[Federal Register: September 23, 2008 (Volume 73, Number 185)]
[Proposed Rules]
[Page 54740-54744]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23se08-26]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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[[Page 54740]]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 915
[Docket No. AMS-FV-08-0022; FV08-915-1 PR]
Avocados Grown in South Florida; Revisions to Grade and Container
Requirements
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This rule invites comments on changes to the grade and
container requirements currently prescribed under the marketing order
for avocados grown in South Florida (order). The order regulates the
handling of avocados grown in South Florida and is administered locally
by the Avocado Administrative Committee (Committee). This change would
establish a minimum grade of a U.S. No. 2 for shipments within the
production area, requiring these shipments to meet the same grade as
currently prescribed for shipments leaving the production area. This
rule would also make changes to the container and container marking
requirements under the order. These changes would provide a grade and
pack to meet consumer demand and would improve the identification and
traceability of avocado shipments.
DATES: Comments must be received by October 8, 2008.
ADDRESSES: Interested persons are invited to submit written comments
concerning this proposal. Comments must be sent to the Docket Clerk,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC
20250-0237; Fax: (202) 720-8938; or Internet: http://
www.regulations.gov. All comments should reference the docket number
and the date and page number of this issue of the Federal Register and
will be made available for public inspection in the Office of the
Docket Clerk during regular business hours, or can be viewed at: http:/
/www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: William G. Pimental, Marketing
Specialist, or Christian D. Nissen, Regional Manager, Southeast
Marketing Field Office, Marketing Order Administration Branch, Fruit
and Vegetable Programs, AMS, USDA; Telephone: (863) 324-3375, Fax:
(863) 325-8793 or E-mail: William.Pimental@usda.gov or
Christian.Nissen@usda.gov.
Small businesses may request information on complying with this
regulation by contacting Jay Guerber, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence
Avenue, SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202)
720-2491, Fax: (202) 720-8938, or E-mail: Jay.Guerber@usda.gov.
SUPPLEMENTARY INFORMATION: This proposal is issued under Marketing
Order No. 915, as amended (7 CFR part 915), regulating the handling of
avocados grown in South Florida, hereinafter referred to as the
``order.'' The order is effective under the Agricultural Marketing
Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter
referred to as the ``Act.''
The Department of Agriculture (USDA) is issuing this rule in
conformance with Executive Order 12866.
This proposal has been reviewed under Executive Order 12988, Civil
Justice Reform. This rule is not intended to have retroactive effect.
This proposal will not preempt any State or local laws, regulations, or
policies, unless they present an irreconcilable conflict with this
rule.
The Act provides that administrative proceedings must be exhausted
before parties may file suit in court. Under section 608c(15)(A) of the
Act, any handler subject to an order may file with USDA a petition
stating that the order, any provision of the order, or any obligation
imposed in connection with the order is not in accordance with law and
request a modification of the order or to be exempted therefrom. A
handler is afforded the opportunity for a hearing on the petition.
After the hearing, USDA would rule on the petition. The Act provides
that the district court of the United States in any district in which
the handler is an inhabitant, or has his or her principal place of
business, has jurisdiction to review USDA's ruling on the petition,
provided an action is filed not later than 20 days after the date of
the entry of the ruling.
This proposal invites comments on changes to the grade and
container requirements currently prescribed under the order. This rule
would establish a minimum grade of a U.S. No. 2 for shipments within
the production area, requiring these shipments to meet the same grade
as currently prescribed for shipments leaving the production area. This
rule would also make changes to the container and container marking
requirements established under the order. These changes would provide a
grade and pack to meet consumer demand and would improve the
identification and traceability of avocado shipments. These changes
were unanimously recommended by the Committee during a number of
meetings over the past several months.
Section 915.51 of the order provides, in part, the authority to
issue regulations establishing specific grade and container
requirements for avocados. Section 915.52 of the order provides the
authority for the modification, suspension or termination of
established regulations. The requisite grade and container requirements
are specified under Sec. Sec. 915.305 and 915.306. These sections
specify, in part, the grade, container, and container marking
requirements for fresh shipments of avocados grown in South Florida.
Standard containers refer to those containers specifically
authorized in Sec. 915.305(a), which can be used for shipments both
inside and outside of the production area. Nonstandard containers refer
to containers other than those authorized in Sec. 915.305(a), and can
only be used when shipping avocados within the production area.
This rule would make several changes to the grade and container
provisions established under the order. This rule would establish a
minimum grade of a U.S. No. 2 for all avocados sold within the
production area. It would also require that all nonstandard containers
used for shipments within the production area be one bushel in size and
that these containers be marked with the registered handler number or
the name and address of the handler.
[[Page 54741]]
This rule would also require that all avocados sold be packed in new
containers and that the containers be marked with the grade packed.
The first change would establish a minimum grade of a U.S. No. 2
for all avocados sold within the production area. Currently, only
avocados handled in standard containers must meet the grade requirement
of a U.S. No. 2. Avocados sold within the production area in
nonstandard containers are not required to meet a minimum grade. This
rule would modify Sec. 915.306 so that all avocados sold to the fresh
market in the production area, regardless of what type of container,
must meet the minimum grade requirement of a U.S. No. 2.
In 1992, Hurricane Andrew decimated the Florida avocado production
area leaving both avocados and containers in short supply. The industry
recommended that the grade requirement be suspended for avocados sold
within the production area in containers other than the standard
containers defined in Sec. 915.305. This change made more fruit
available for shipment and allowed handlers to pack fruit in any
obtainable container for shipment within the production area.
The industry has since recovered from the devastation caused by the
hurricane. Production for the 2007-08 season was approximately 1.1
million bushels of avocados, nearly matching the level of production
prior to Hurricane Andrew. However, since the grade change made
following the hurricane, avocados shipped within the production area in
nonstandard containers have not had to meet any specific grade
requirements.
At the time of Hurricane Andrew, avocado shipments to production
area markets accounted for around 12 percent of total shipments. Since
that time, shipments to the production area have nearly doubled. For
the last five seasons, shipments to the production area have accounted
for around 23 percent of total shipments, making the production area
one of the largest markets for Florida avocados.
In discussing this issue, Committee members stated that the absence
of a grade requirement has resulted in poor quality avocados being
offered for sale inside the production area. The past few seasons, the
Committee office and members of the industry have been receiving an
increasing number of negative comments regarding the quality of fruit
sold in the production area. These comments indicate there is an
increasing demand for higher quality fruit within the production area.
Production area produce buyers and brokers are looking for higher
quality fruit to meet the demands of production area consumers.
However, buyers have expressed that without a minimum grade requirement
it is difficult to know the quality of the avocados being purchased.
The level of quality received varies between good and poor quality. In
an effort to address this issue, several handlers have already begun
packing to meet a U.S. No. 2 for all their production area shipments.
Still, absent a minimum grade requirement, avocados that would not meet
a U.S. No. 2 are still making it to production area fresh market
channels.
The Committee believes these poor quality avocados have depressed
prices for better quality avocados and resulted in lower overall
returns to producers. Poor quality fruit normally returns the lowest
price when compared to quality fruit. Because there is no minimum grade
requirement for nonstandard containers, buyers are often unsure of the
level of quality they are purchasing. This tends to drive the price
offered towards the lowest level for all avocados. Further, when a
consumer purchases a poor piece of fruit, it can affect repurchases,
reducing demand. Reduced demand also has a negative effect on price.
The Committee believes eliminating lower grade avocados from the
marketplace would address consumer demand, and would help ensure the
industry is providing all their customers with a quality product. This
would encourage repeat purchases, which would help increase returns to
producers and handlers. The Committee agreed this change would
strengthen market conditions for shipments within the production area.
Therefore, the Committee recommended establishing a minimum grade of a
U.S. No. 2 for all avocados sold to markets within the production area.
This rule would also make changes to the container marking
requirements established under the order. Currently, the only container
marking requirement for nonstandard containers is that the containers
be marked with a Federal State Inspection Service (FSIS) lot stamp
number, which is applied to an adhesive tape seal affixed to the
container. While the lot stamp indicates the date the product was
inspected, it does not provide any information that would identify the
handler. Some handlers pay to have the adhesive tape seal preprinted
with their registered handler number, and this number can be used to
identify the handler. However, this is not the case for all handlers.
The Committee is concerned that the use of containers with no
identifying markings poses problems with the positive identification
and traceability of avocados. Such containers are almost impossible to
trace back to the original handler. In cases such as marketing order
compliance, it is important to be able to identify the source of
avocados which are found to be in violation of order requirements.
Committee members agreed that the ability to positively identify
product and trace its origin is a necessity in today's marketplace.
Proper handler identification on a container is an important part of
this traceability.
In discussing this issue, the Committee agreed that an adhesive
tape seal that is pre-printed with the registered handler number is
sufficient to indicate the identity of the handler and to provide trace
back. In cases where the tape seal is not printed with a registered
handler number, the Committee concurred that the name and address of
the handler should appear on the container. The Committee believes
requiring all containers handled within the production area to be
marked with a registered handler number or the name and address of the
handler would improve the identification and traceability of Florida
avocados.
The Committee also recommended that all nonstandard containers be
marked with the grade packed. Currently, only standard containers are
required to be marked with the grade and only from the first Monday
after July 15 until the first Monday after January 1. In its discussion
of this change, the Committee agreed that for nonstandard containers
the grade should be marked in letters at least 3 inches in height,
rather than match the 1-inch requirement for standard containers.
Nonstandard containers tend to be oversized, and as such, Committee
members believe the grade markings need to be in larger letters, which
would be more in scale with the larger containers. Also, in the
production area, avocados are often displayed in the container in which
they were packed. Having recommended that all avocados packed be
required to meet a U.S. No. 2 to address the concerns of their
customers, Committee members thought it was important that the grade be
clearly displayed on the container.
Further, the Committee also agreed it was important to have the
grade marked on all containers throughout the season. Therefore, the
Committee recommended that the language in the rules and regulations
stating that the grade only needs to appear on standard containers from
the first Monday after July 15 until the first Monday after January 1
be removed, and that the grade packed be required to appear on all
standard and
[[Page 54742]]
nonstandard containers for the entire shipping season.
This rule would also make two changes to the container requirements
specified under Sec. 915.305. Currently, there are no specific
container requirements for weight and dimension for nonstandard
containers, except that handlers are prohibited from using 20 bushel
plastic field bins to ship avocados to markets inside the production
area. As such, many different containers have been used for shipments
within the production area. However, the vast majority of nonstandard
containers used in the production area are new one bushel containers or
used one bushel containers that were previously packed with bananas.
The use of used banana boxes for shipping avocados within the
production area increased dramatically following Hurricane Andrew, when
containers were in short supply. Now, with many of the avocados sold in
the production area displayed in the container in which they were
packed, the Committee is concerned that the practice of packing in used
containers has had a negative effect on the sale of production area
avocados. These containers often have marks and stains from their
previous use, and can be in poor condition. The Committee is concerned
that the condition of the boxes is affecting the perception of the
avocados packed inside.
With production area shipments accounting for 23 percent of total
shipments, the Committee believes it is important to provide production
area markets with a quality pack. The Committee believes requiring
avocados to be packed in new containers would be more sanitary, would
improve the appearance of the overall pack, and could increase sales.
Consequently, the Committee recommended that all containers used to
pack avocados be required to be new.
The other container change the Committee recommended was that all
nonstandard containers be required to be one bushel containers. Most
nonstandard containers in use are used banana boxes or new containers
with dimensions similar to banana boxes. These containers hold
approximately one bushel of avocados, which the industry has found to
be a useful size for shipments within the production area. Rather than
permitting the use of any size container within the production area,
the Committee believes requiring the use of a one bushel container
would provide some additional uniformity to the pack.
With many handlers already utilizing the one bushel container for
production area shipments, this sized container is readily available
throughout the production area. Also, because all containers to be used
would be required to be new, and handlers would be purchasing
containers, the Committee believes this is a good time to establish
requirements for nonstandard containers. Requiring all nonstandard
containers to be one bushel would provide for a uniform pack that is
attractive to the consumer. Therefore, the Committee recommended that
one bushel containers be used for all shipments within the production
area.
These changes to the grade and container requirements would improve
the overall quality and pack, which would meet the demands of
production area customers. Responding to market preferences is expected
to benefit producers and handlers of Florida avocados. Further,
requiring container marking requirements would improve the
identification and traceability of production area avocados.
Consequently, the Committee recommended the above changes to the rules
and regulations under the order.
This rule would also make a minor correction to Sec. 915.306
(a)(1). This change would remove language which only pertains to the
period November 2, 1992, through March 31, 1993. This language is
obsolete, and as such is no longer necessary.
Section 8e of the Act provides that when certain domestically
produced commodities, including avocados, are regulated under a Federal
marketing order, imports of that commodity must meet the same or
comparable grade, size, quality, and maturity requirements. This rule
would not change the minimum grade of a U.S. No. 2 established for
avocados shipped outside the production area or the maturity
requirements established under the order. This rule would just require
all avocados shipped within the production area to meet the same
minimum grade of a U.S. No. 2, and would change the container
requirements under the domestic handling regulation. Consequently, no
corresponding changes to the import regulations would be required.
Initial Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), the Agricultural Marketing Service (AMS) has considered the
economic impact of this action on small entities. Accordingly, AMS has
prepared this initial regulatory flexibility analysis.
The purpose of the RFA is to fit regulatory actions to the scale of
business subject to such actions in order that small businesses will
not be unduly or disproportionately burdened. Marketing orders issued
pursuant to the Act, and rules issued thereunder, are unique in that
they are brought about through group action of essentially small
entities acting on their own behalf.
There are approximately 35 handlers of Florida avocados subject to
regulation under the order and approximately 300 producers of avocados
in the production area. Small agricultural service firms, which include
avocado handlers, are defined by the Small Business Administration
(SBA) as those whose annual receipts are less than $6,500,000, and
small agricultural producers are defined as those having annual
receipts of less than $750,000 (13 CFR 121.201).
According to Committee data, the average price for Florida avocados
during the 2007-08 season was around $12.00 per 55-pound bushel
container, and total shipments were near 1.1 million 55-pound bushels.
Using the average price and shipment information provided by the
Committee, the majority of avocado handlers could be considered small
businesses under SBA's definition. In addition, based on avocado
production, producer prices, and the total number of Florida avocado
producers, the average annual producer revenue is less than $750,000.
Consequently, the majority of avocado handlers and producers may be
classified as small entities.
This proposal would revise the grade and container requirements
currently prescribed under the order. This rule would establish a
minimum grade of a U.S. No. 2 for shipments within the production area,
requiring these shipments to meet the same grade as currently
prescribed for shipments leaving the production area. It would also
require that all nonstandard containers used for shipments within the
production area one bushel in size and that these containers be marked
with the registered handler number or the name and address of the
handler. This rule would also require that all avocados sold be packed
in new containers and that the containers be marked with the grade
packed. These changes would provide a grade and pack to meet consumer
demand, which would increase producer returns. This rule would also
improve the identification and traceability of production area
avocados. This rule would revise Sec. Sec. 915.305 and 915.306, which
specify the requisite grade and container requirements. Authority for
[[Page 54743]]
these actions is provided in Sec. Sec. 915.51 and 915.52 of the order.
These changes were unanimously recommended by the Committee during a
number of meetings over the past several months.
This rule could result in some additional costs. These potential
costs would stem primarily from the application of the minimum grade to
nonstandard containers, the new container marking requirements, and the
requirement that all containers packed be new containers.
The grade requirement for nonstandard containers could result in
the loss of some sales, as handlers would no longer be able to sell
fruit not meeting a U.S. No. 2 inside the production area. However,
these losses are expected to be minimal. Several handlers have already
started packing their nonstandard containers to meet a U.S. No. 2 in
response to consumer demand. Further, the volume of fruit failing to
meet a U.S. No. 2 represents only a small percentage of production area
shipments. The Committee estimates lower grade avocados account for
only around 6 percent of production area shipments. Last year, the
industry shipped nearly 264,000 55-pound containers to production area
markets. Using these numbers, lower grade avocados accounted for only
15,840 of the containers shipped to the production area last year, or 1
percent of total industry shipments. Consequently, this rule is not
expected to appreciably impact the total number of shipments.
Further, the grade change is not expected to result in perceptibly
higher inspection costs. Currently, all avocados shipped in the
production area must meet maturity requirements regardless of the
container in which they are packed. Consequently, all avocados are
already inspected, so any increase in inspection costs would be
minimal.
The costs associated with the recommended changes in marking
requirements are also expected to be nominal. Larger operations use
automated stamping, and already print necessary information on standard
containers. A small reconfiguration would allow them to meet this
requirement. Some operations order their containers preprinted with the
needed information. As this rule would require the use of new
containers, handlers would be purchasing containers. The added cost of
the additional marking requirements for preprinted containers should be
minor. Smaller operations stamp the containers by hand. These
operations would be able to meet the new requirements with a one-time
purchase of a grade stamp and a name and address stamp.
This rule could also result in a slight increase in cost for
handlers that were using used containers. However, Committee members
stated that plain, one bushel containers are readily available on the
market at reasonable prices. Also, dealers collect and sell the used
containers, so used containers are not cost free. Further, the
available quantities of used containers are not sufficient to handle
all production area shipments, so many new nonstandard containers are
already being purchased. Consequently, the cost associated with this
change should also be minimal.
While this rule could result in some additional costs, the proposed
changes are expected to have a positive effect in the marketplace. The
production area is an important market for the industry, accounting for
nearly 23 percent of shipments for the last five seasons. The
availability of poor quality avocados has had a price depressing effect
on the market. Without change, there could be a continued erosion of
market confidence and producer returns.
Requiring nonstandard containers to meet the minimum grade of a
U.S. No. 2 would address consumer demand and help protect the
production area market from the price depressing effects of poor
quality avocados. In addition, requiring all production area avocados
to be packed in new containers clearly marked with the grade packed
would also improve the overall avocado pack sold in the production
area. These new requirements would allow handlers to respond to market
preferences which is expected to benefit producers and handlers of
Florida avocados. Consumers would also benefit as a result of the
higher quality pack available in the marketplace. This rule would also
provide improved traceability and identification of Florida avocados.
Consequently, the benefits of this rule would outweigh the potential
costs associated with these changes. The costs and benefits of this
rule are not expected to be disproportionately different for small or
large entities.
The Committee discussed alternatives to these proposed changes. One
alternative considered was to not make any changes to the rules and
regulations. However, the Committee agreed making these changes would
make the industry more responsive to consumer demand. It would also
provide for better identification and traceability of production area
avocados. Therefore, this alternative was rejected. The Committee also
considered the alternative of requiring the grade to be stamped on
nonstandard containers in letters and numbers at least 1 inch in height
as is required for standard containers. However, with nonstandard
containers being larger in size and with production area avocados sold
in the container, the Committee determined that the grade should be
clearly visible, and that 1 inch was not large enough. Therefore, this
alternative was also rejected.
This proposed rule would revise the grade and container
requirements currently prescribed under the avocado marketing order.
Accordingly, this action would not impose any additional reporting or
recordkeeping requirements on either small or large avocado handlers.
As with all Federal marketing order programs, reports and forms are
periodically reviewed to reduce information requirements and
duplication by industry and public sector agencies.
AMS is committed to complying with the E-Government Act, to promote
the use of the Internet and other information technologies to provide
increased opportunities for citizen access to Government information
and services, and for other purposes.
USDA has not identified any relevant Federal rules that duplicate,
overlap or conflict with this proposed rule. In addition, the
Committee's meetings were widely publicized throughout the avocado
industry and all interested persons were invited to attend the meetings
and participate in Committee deliberations on all issues. Like all
Committee meetings, the August 8, 2007, September 9, 2007, January 9,
2008, and February 13, 2008, meetings were public meetings and all
entities, both large and small, were able to express views on these
issues. Finally, interested persons are invited to submit comments on
this proposed rule, including the regulatory and informational impacts
of this action on small businesses.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at: http:/
/www.ams.usda.gov/AMSv1.0/
ams.fetchTemplateData.do?template=TemplateN&page=MarketingOrdersSmallBus
inessGuide. Any questions about the compliance guide should be sent to
Jay Guerber at the previously mentioned address in the FOR FURTHER
INFORMATION CONTACT section.
A 15-day comment period is provided to allow interested persons to
respond to this proposal. Fifteen days is deemed appropriate because
this rule would need to be in place as soon as possible since handlers
began shipping avocados from the 2008-09 crop starting in June.
[[Page 54744]]
The Committee unanimously recommended these changes at various public
meetings and interested parties had an opportunity to provide input.
Also, Florida avocado producers and handlers are aware of these
changes. All written comments timely received will be considered before
a final determination is made on this matter.
List of Subjects in 7 CFR Part 915
Avocados, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, 7 CFR part 915 is
proposed to be amended as follows:
PART 915--AVOCADOS GROWN IN SOUTH FLORIDA
1. The authority citation for 7 CFR part 915 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. Two new paragraphs (d) and (e) are added to Sec. 915.305 to
read as follows:
Sec. 915.305 Florida Avocado Container Regulation 5.
* * * * *
(d) Avocados handled for the fresh market in containers other than
those authorized under Sec. 915.305(a) and shipped to destinations
within the production area must be packed in 1-bushel containers.
(e) All containers in which the avocados are packed must be new,
and clean in appearance, without marks, stains, or other evidence of
previous use.
2. In Sec. 915.306, paragraphs (a)(1), (a)(6) and (a)(7) are
revised to read as follows:
Sec. 915.306 Florida avocado grade, pack, and container marking
regulation.
(a) * * *
(1) Such avocados grade at least U.S. No. 2, except that avocados
handled to destinations within the production area may be placed in
containers with avocados of dissimilar varietal characteristics.
* * * * *
(6) Such avocados when handled in containers authorized under Sec.
915.305, except for those to export destinations, are marked once with
the grade of fruit in letters and numbers at least 1 inch in height on
the top or one side of the container, not to include the bottom.
(7) Such avocados when handled in containers other than those
authorized under Sec. 915.305(a) for shipment to destinations within
the production area are marked once with the grade of fruit in letters
and numbers at least 3 inches in height on the top or one side of the
container, not to include the bottom. Each such container is also to be
marked at least once with either the registered handler number assigned
to the handler at the time of certification as a registered handler or
with the name and address of the handler.
* * * * *
Dated: September 17, 2008.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E8-22147 Filed 9-22-08; 8:45 am]
BILLING CODE 3410-02-P