[Federal Register: December 24, 2008 (Volume 73, Number 248)]
[Proposed Rules]
[Page 79028-79035]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24de08-29]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 905
[Docket No. AO-85-A10; AMS-FV-07-0132; FV08-905-1]
Oranges, Grapefruit, Tangerines, and Tangelos Grown in Florida;
Recommended Decision and Opportunity To File Written Exceptions to
Proposed Amendments to Marketing Agreement 84 and Order No. 905
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule and opportunity to file exceptions.
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SUMMARY: This is a recommended decision regarding proposed amendments
to Marketing Agreement No. 84 and Order No. 905 (order), which regulate
the handling of oranges, grapefruit, tangerines, and tangelos (citrus)
grown in Florida. Four amendments were proposed by the Citrus
Administrative Committee (committee), which is responsible for local
administration of the order. These proposed amendments would modify
committee representation by cooperative entities, allow substitute
alternates to temporarily represent absent members at committee
meetings, authorize the committee to conduct meetings by telephone or
other means of communication, and authorize the committee to conduct
research and promotion programs, including paid advertising, for fresh
Florida citrus. The proposals are intended to improve the operation and
administration of the order. This recommended decision invites written
exceptions on the proposed amendments.
DATES: Written exceptions must be filed by January 23, 2009.
ADDRESSES: Written exceptions should be filed with the Hearing Clerk,
U.S. Department of Agriculture, Room 1081-S, Washington, DC 20250-9200,
Fax: (202) 720-9776 or via the Internet at http://www.regulations.gov.
All comments should reference the docket number and the date and page
number of this issue of the Federal Register. Comments will be made
available for public inspection in the Office of the Hearing Clerk
during regular business hours, or can be viewed at: http://
www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Melissa Schmaedick, Marketing Order
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1220 SW
Third Avenue, Room 385, Portland, Oregon 97204; Telephone: (503) 326-
2724, Fax: (503) 326-7440, or E-mail: Melissa.Schmaedick@usda.gov; or
Laurel May, 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: Laurel.May@usda.gov.
Small businesses may request information on this proceeding 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, E-mail: Jay.Guerber@usda.gov.
SUPPLEMENTARY INFORMATION: Prior documents in this proceeding: Notice
of Hearing issued on January 24, 2008, and published in the January 29,
2008, issue of the Federal Register (73 FR 5130).
This action is governed by the provisions of sections 556 and 557
of title 5 of the United States Code and is therefore excluded from the
requirements of Executive Order 12866.
Preliminary Statement
Notice is hereby given of the filing with the Hearing Clerk of this
recommended decision with respect to the proposed amendments to
Marketing Agreement No. 84 and Order 905 regulating the handling of
oranges, grapefruit, tangerines, and tangelos grown in Florida, and the
opportunity to file written exceptions thereto. Copies of this decision
can be obtained from Melissa Schmaedick, whose address is listed above.
This recommended decision is issued pursuant to the provisions of
the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C.
601-674), hereinafter referred to as the ``Act,'' and the applicable
rules of practice and procedure governing the formulation of marketing
agreements and orders (7 CFR part 900).
The proposed amendments are based on the record of a public hearing
held February 12, 2008, in Winter Haven, Florida. Notice of this
hearing was published in the Federal Register on January 29, 2008 (73
FR 5130). The notice of hearing contained four proposals submitted by
the committee.
The proposed amendments were recommended by the committee following
deliberations at a public meeting on May 29, 2007, and were submitted
to the Agricultural Marketing Service (AMS) on August 16, 2007. After
reviewing the recommendation and other information submitted by the
committee, AMS determined to proceed with the formal rulemaking process
and schedule the matter for hearing.
The committee's proposed amendments to the order would: (1) Modify
committee representation by cooperative entities; (2) allow substitute
alternates to temporarily represent absent members at committee
meetings; (3) authorize the committee to conduct meetings by telephone
or other means of communication; and (4) add authority for research and
promotion programs, including paid advertising, for fresh Florida
citrus.
The Department of Agriculture (USDA) also proposed to make such
changes to the order as may be necessary, if any of the proposed
changes are adopted, so that all of the order's provisions conform to
the effectuated amendments.
Eight industry witnesses testified at the hearing. The witnesses
represented citrus producers and handlers in the production area, as
well as the committee, and they all supported the recommended changes.
The witnesses emphasized the need to modernize committee representation
and administration as well as equip the industry with additional tools
to address the specific research and promotion needs of fresh Florida
citrus.
[[Page 79029]]
Witnesses offered testimony supporting the recommendation to reduce
required committee representation from three each to two each for
producers and handlers affiliated with cooperative marketing
organizations. According to testimony, this would better reflect the
current composition of the fresh Florida citrus industry.
Witnesses testified in support of allowing substitute alternates to
temporarily serve at committee meetings when both a member and his or
her alternate are unable to attend. This would facilitate attaining a
quorum and prevent delays in committee decision making.
Witnesses also advocated adding authority to conduct committee
meetings via telephone or other means of communication technology. Such
authority would improve committee efficiencies and encourage greater
participation by members throughout the production area.
Finally, witness testimony supported adding authority to conduct
research and promotion activities. This would enable the committee to
sponsor programs specific to the needs of the fresh citrus industry.
At the conclusion of the hearing, the Administrative Law Judge
established a deadline of March 31, 2008, for interested persons to
file proposed findings and conclusions or written arguments and briefs
based on the evidence received at the hearing. No briefs were filed.
Material Issues
The material issues presented on the record of hearing are as
follows:
(1) Whether to amend the order by reducing the number of required
cooperative producer and handler seats on the committee from three each
to two each;
(2) Whether to amend the order to authorize substitute alternates
to temporarily represent absent members and alternates to meet quorum
requirements at committee meetings;
(3) Whether to amend the order to authorize the committee to
conduct meetings via telephone or other means of communication
technology; and
(4) Whether to amend the order by authorizing the committee to
establish and conduct research and production activities, including
paid advertising.
Findings and Conclusions
The following findings and conclusions on the material issues are
based on evidence presented at the hearing and the record thereof.
Material Issue Number 1--Cooperative Representation
Sections 905.22, Nominations, and 905.23, Selection, of the order
should be amended to reduce the required number of committee seats held
by producers and handlers affiliated with cooperative marketing
organizations from three each to two each.
The committee is comprised of 18 members, of whom nine are
producers, eight are handlers, and one is a non-industry public member.
The current committee structure allocates the nine producer seats
between four producer districts and requires that at least three
producer members represent cooperatives. The order's provisions also
require that at least three of the eight handler members represent
cooperatives. Witnesses testified that this membership allocation was
appropriate in the past, but no longer appropriately reflects the
industry's composition. Therefore, witnesses supported reducing the
required number of committee producer and handler seats held by
cooperative representatives from three each to two each to better
reflect the composition of the modern Florida fresh citrus industry.
Witnesses described various types of fresh citrus cooperatives that
exist to serve members: Producer, marketing and ``full service''
cooperatives. Producer cooperatives provide production services to
members. Marketing cooperatives market and ship members' fruit. Full
service cooperatives offer production, harvest, packing, and marketing
services for members.
Witnesses explained that there were numerous citrus cooperatives at
the time the order was promulgated, and the committee's original
structure was designed to accurately represent the interests of
cooperative organizations during committee deliberations. However, over
time, the number of cooperative organizations within the industry has
declined. Today there are fewer cooperatives, and those that remain
handle a smaller proportion of the industry's total shipments.
For example, according to witnesses, there were twenty marketing
cooperatives during the 1998-99 fiscal period, and they shipped
approximately 33 percent of Florida's fresh citrus. By 2006-07, only
ten marketing cooperatives, shipping approximately 22 percent of the
fresh citrus, remained. Witnesses explained that while there has been a
consolidation of fresh citrus shippers throughout the industry, the
consolidation has been relatively greatest among cooperative marketing
entities. According to witnesses, the numbers of producer cooperatives
and full service cooperatives have declined also. Witnesses testified
that there was broad support from cooperative organizations for the
proposed amendment.
Record evidence supports reducing the number of required
cooperative seats on the committee. This amendment would restructure
the committee so that proportionately fewer members would be required
to represent cooperative organizations, reflective of current industry
composition.
Citing recent changes in industry makeup, witnesses stated that
they would like to include additional language under this proposal that
would allow them to review industry composition every three years and
recommend appropriate adjustments to committee apportionment with
respect to cooperative affiliation through informal rulemaking.
However, the committee did not provide proposed order language for a
modification to Proposal 1 at the hearing when requested and the matter
was not pursued. Therefore, Proposal 1 is being considered by USDA as
it was written in the Notice of Hearing for this rulemaking.
No testimony opposing the proposed amendment was given at the
hearing. For the reasons stated above, it is recommended that
Sec. Sec. 905.22, Nomination, and 905.23, Selection, be amended to
reduce the required number of committee seats held by producers and
handlers affiliated with cooperative marketing organizations from three
to two as proposed in Proposal 1.
Material Issue Number 2--Substitute Alternates
Section 905.29 of the order should be amended to provide that if
both a member and his or her respective alternate are unable to attend
a committee meeting, such member may designate another alternate to act
in his or her place in order to obtain a quorum. Further, it should be
provided that any such alternate member represent the same group
affiliation as the absent member. If the member is unable to designate
such an alternate, the committee members present may designate such
alternate.
As originally published in the Federal Register notice of hearing
(73 FR 513; January 29, 2008), this proposed amendment specified that
in addition to representing the same group affiliation (producer or
handler) a substitute alternate should be from the same district as the
absent member and
[[Page 79030]]
alternate. However, the committee proposed a modification at the
hearing so that a substitute alternate did not have to be from the same
district. Witnesses explained that substitutes with the same group
affiliation would adequately represent the views of absent members.
There was no testimony in opposition to this modification. Further, as
provided in Sec. 905.114 of the regulations issued under the order,
one producer district is currently allocated only one member seat and
one alternate member seat on the committee. In this case, if a
substitute alternate could only be drawn from the absent member's
district there would be no pool from which to designate a temporary
alternate.
As mentioned under Material Issue Number 1, the committee is
comprised 18 members, and each member has an alternate that serves in
the member's stead if the member is absent. The order specifies that
ten committee members constitute a quorum. For most committee actions,
ten concurring votes, including five producer votes, are required for
approval. There is no provision for a situation in which neither a
member nor that member's alternate are available to attend meetings.
Witnesses explained that travel distance and scheduling conflicts
occasionally prevent committee members and their alternates from
attending meetings. Witnesses testified that these unexpected absences
have led to meeting cancellations in the past because quorum
requirements could not be met. According to witness testimony,
cancelled meetings mean delays in conducting committee business and are
costly in terms of travel time and expense.
The committee proposed that Sec. 905.29 be amended to allow
available alternates to temporarily represent absent members if the
members and their respective alternates are unable to attend a meeting.
Witnesses explained that all alternates have the necessary background
to be able to serve on short notice if necessary. According to the
record, all members and alternates receive meeting agendas and
background information about upcoming meeting topics prior to the
meetings. The committee also posts this information on its website.
Additionally, many alternates have served previously as members or
alternates and are knowledgeable about the issues that come before the
committee. According to witnesses, a number of alternate producer and
handler members reside in the two areas where meetings are most often
held, and could be contacted on short notice if necessary to obtain a
quorum. Witnesses testified that allowing substitute alternates to
serve at meetings would ensure that quorum requirements can be met and
that committee business is conducted in a timely manner.
Finally, witnesses testified that members should be allowed to
select their own substitutes whenever possible because the members
would be able to select substitutes who they feel would best represent
their views during meeting deliberations and voting. However, witnesses
acknowledged that in some cases members might be unable to designate
substitutes prior to a meeting. In those situations, the committee
should be authorized to designate substitutes with the same group
affiliation at the meeting if necessary to meet quorum requirements.
No testimony or evidence opposing this proposal was provided at the
hearing. For the reasons stated above, it is recommended that Sec.
905.29, Inability of members to serve, be amended, as modified at the
hearing, to specify that if neither a member nor his or her respective
alternate is able to attend a committee meeting, the member may
designate another alternate of the same affiliation (producer or
handler) to represent him or her at the meeting. Further, the committee
may designate an alternate to substitute for an absent member if the
member is unable to designate a substitute alternate prior to the
meeting.
Material Issue Number 3--Telephone Meetings
Section 905.34, Procedure of committees, should be amended to
authorize the committee to conduct committee meetings by telephone and
other means of communication.
Under the order, the committee is authorized to make
recommendations regarding the administration of its programs to the
Secretary. Ten members of the committee constitute a quorum, and ten
concurring votes, including those of five producers, are required for
approval of most committee actions. Currently, Sec. 905.34 of the
order authorizes the committee to cast votes by telephone in emergency
situations. The committee is required to fully explain any proposition
presented for telephone votes to each member or alternate acting for a
member. The order requires all votes cast by phone to be confirmed in
writing and specifies that two dissenting votes will prevent the
adoption of a proposition voted upon by telephone.
The committee proposed that the order be amended to authorize the
committee to conduct any of its meetings by telephone or other means of
communication. According to the record, holding regular business
meetings via teleconference or videoconference has become common
practice within other citrus industry organizations, and witnesses
supported the proposal to authorize the committee to conduct its
meetings using modern technology as well. Witnesses at the hearing
testified that using the authorized telephone voting authority during
past emergencies has worked well for the committee, and believe that
similar benefits would derive from the authority to conduct business
meetings through alternative means of communication.
According to the witnesses, authority to conduct business meetings
via telephone or other means of communication would allow the committee
to respond more quickly to urgent matters. Meetings could be scheduled
on a timelier basis because the need for participants to plan for long-
distance travel would be reduced. Witnesses testified that holding
business meetings by telephone or other means of communication would
also be expected to improve committee efficiency, save members travel
time and expense, encourage greater industry participation, make
meetings more accessible to people with disabilities, promote openness
of meeting proceedings, and allow the industry to build consensus
through continuing discussions on certain topics. Proponents pointed
out that new communications technologies, such as videoconferencing and
web conferencing, continue to be developed, and that it is the
committee's intent that all such communication methods be included in
the scope of this proposal.
Witnesses stated that if the proposal authorizing the committee to
conduct research and promotion programs as discussed under Material
Issue Number 4 below is adopted, the committee and its subcommittees
would be likely to hold many more meetings as the new programs are
developed. Witnesses believe that this increased meeting frequency
could be handled most efficiently through the use of telephone or other
communications technologies. Additionally, witnesses believe that more
people would be encouraged to participate in the development of the new
programs.
The hearing record shows that the committee intends to continue
holding assembled meetings to deliberate matters such as its annual
budget of expenses. Witnesses stated that the committee's intent would
be to reserve
[[Page 79031]]
most controversial discussions for assembled meetings. However,
proponents recognized that some emergency situations could involve
controversial issues and decisions regarding those issues might have to
be made during telephone meetings.
Currently, the order requires that all votes cast during an
assembled meeting be cast in person and that votes cast by telephone be
confirmed in writing. Under the proposed amendment, votes cast at
meetings held via telephone or other means of communication would
continue to require written confirmation. Witnesses stated that, in
addition to current written confirmation, facsimiles and emails would
be considered acceptable forms of written confirmation of a member's
vote.
Witnesses anticipated that if this proposal were implemented,
situations could arise where some members participate in assembled
meetings by telephone or other means of communication. In situations
where part of the meeting members are assembled and part of the meeting
members join via communications technology, votes cast by those members
not physically present at the assembled meeting location would not be
considered as cast in person.
Finally, if the proposed amendment is adopted, the same quorum and
voting requirements specified for assembled committee meetings would
apply to meetings held by any other means.
No testimony opposing this proposal was presented at the hearing.
For the reasons stated above, it is recommended that Sec. 905.34,
Procedure of committees, be amended to provide that the committee may
conduct meetings via telephone or any other means of communication in
addition to assembled meetings. Moreover, it is recommended that some
members may participate in assembled meetings via telephone or other
means of communication provided that any votes cast at assembled
meetings other than in person be confirmed in writing.
Material Issue Number 4--Research and Promotion
A new Sec. 905.54, providing authority to establish and conduct
research and promotion programs, including paid advertising, should be
added to the order.
The Act lists under 5 U.S.C. 608c(I) specific commodities for which
paid advertising may be conducted under marketing order programs.
Citrus is included in that list.
Currently, the order does not provide authority for the committee
to recommend or conduct research or promotion projects. This proposed
amendment would authorize the committee to recommend, conduct, and fund
approved production research and market research and promotion
programs, including paid advertising, to address the specific needs of
fresh citrus growers and handlers.
The Florida citrus industry as a whole conducts a number of
research and promotion programs. Some of the citrus production and
marketing problems addressed through these programs are shared by all
segments of the industry. But many challenges are unique to the fresh
citrus industry. Currently, research and promotion for fresh citrus is
encapsulated within the programs of the larger industry, which has a
processing orientation since approximately 90 percent of all Florida
citrus produced is used for processing. The fresh citrus industry
believes that research and promotion programs established under the
order might better address their unique needs and that the committee
should be authorized to recommend and conduct such programs.
Witnesses identified issues facing the fresh citrus industry and
described how authority to conduct research and promotional programs
would help them address those issues specifically. Witnesses testified
that research to improve fresh citrus production and handling practices
could benefit the industry by reducing the incidence and spread of
bacterial canker.
The record shows that there has been a decline in fresh Florida
citrus production in recent years. According to evidence presented at
the hearing, bearing acreage of Florida grapefruit has decreased by
more than 50 percent of the 1996-97 total of 139,200 acres.
Consequently, grapefruit production has mirrored the loss of acreage,
with drops from the previous 5-year average of 69 percent in 2004-05
and 53 percent in 2005-06, due to hurricane damage. At the time of the
hearing, witnesses expected that there would be a further drop in
production of approximately 10 percent between the 2006-07 and 2007-08
crops due to disease. Similar declines were described for Florida
orange production. Bearing acreage has trended downward from a total of
609,200 acres in 1996-97 to 475,900 acres in 2006-07. Yields also
declined in the same period, from 18.05 tons per acre to 12.20 tons per
acre. Total production during the same ten seasons decreased from
10,980,000 tons to 5,805,000 tons. According to witnesses, some of that
loss is attributable to hurricane damage, but much is also due to
removal of diseased trees. Data was also presented at the hearing to
show that bearing acreage of Florida tangerines and tangelos has
declined from 40,000 acres in 1997-98 to 21,000 acres in 2006-07. Total
utilized tangerine and tangelo production for that span of years
decreased from 375,000 tons to 275,000 tons.
In 1997-98, 43 percent of Florida grapefruit, 4.5 percent of
Florida oranges, and 54 percent of Florida tangerines were utilized in
the fresh market. By comparison, fresh utilization for those crops in
2006-07 was 40 percent of grapefruit, 5 percent of oranges, and 60
percent of tangerines and tangelos. Although the percentage of the
crops utilized for fresh market has not changed considerably over that
time period, the decreases in total production make less fruit
available for fresh market utilization. According to witnesses, packing
houses are not packing at full capacity because there is a shortage of
fruit acceptable for the fresh market. As described above, some of the
shortage may be due to losses from hurricane damage. But much may be
attributed to diseases. Production research is needed to develop
disease resistant citrus varieties and better disease management
strategies to improve fresh citrus yields and increase returns to
producers and handlers.
According to witness testimony, competition in the global market
means that fresh Florida citrus must meet market demands for
cosmetically acceptable fruit. One witness suggested that production
research focused on improved windbreak systems could reduce cosmetic
scarring as well as the spread of bacterial canker. Witnesses also
mentioned the need for development of new varieties of fruit that would
be not only disease resistant, but easier to peel and seedless, in
response to consumer demands.
Witnesses testified that Florida's share of U.S. fresh citrus sales
has declined in recent years. Evidence provided at the hearing shows
that Florida's share of fresh U.S. grapefruit shipments is down from 72
percent in 1997-98 to 64 percent in 2006-07. Florida's share of U.S.
tangerine and tangelo shipments has decreased from 72 percent in 1997-
98 to 65 percent in 2006-07. Percentages for fresh Florida orange
shipments have remained fairly consistent over the same 10-year period,
generally around 20 percent of the U.S. total. Witnesses believe there
is a need for the fresh Florida citrus industry to sponsor consumer
research and market development programs that would revitalize that
sector.
Witnesses advocated providing the industry with necessary tools to
[[Page 79032]]
strengthen grower returns and enhance demand while elevating consumer
awareness and appreciation of fresh Florida citrus.
Addition of the authority to conduct research and promotion
programs would merely authorize the committee to recommend such
programs and, following USDA approval, to plan and conduct such
activities. As mentioned above, research and promotion programs for the
broader Florida citrus industry is currently conducted through the
Florida Department of Citrus and other industry organizations. Funding
for those programs comes from fees collected by those entities.
Witnesses at the hearing testified that projects addressing the
specific needs of the fresh industry would shift to the committee.
Funding for the committee's projects would come from the collection of
assessments from handlers of fresh Florida citrus, as authorized under
the order with funding for other projects to remain with the other
entities. Therefore, witnesses believed that total costs to handlers
would not be significantly different from their current total industry
assessments.
Supporters of the proposed amendment emphasized that stakeholders
in the fresh citrus industry should be the ones to determine which
programs would best meet the industry's needs. One witness representing
the committee said that if the proposed amendment is adopted, the
committee would likely establish two varietal subcommittees for
oranges/specialty crops and grapefruit to consider and recommend
research and promotion projects to benefit the different types of fresh
citrus grown in the production area. For example, most of Florida's
fresh grapefruit shipments are to export markets, while only a limited
percentage of fresh oranges and tangerines are exported. Market
development projects could be planned that would enhance the marketing
of each different crop. The varietal subcommittees would help ensure
that the market differences between the varieties are recognized and
addressed in any research and promotion programs that might be
established as a result of this additional authority.
According to witness testimony, many Florida citrus producers and
handlers grow and/or ship more than one type of citrus, such as oranges
and tangerines. Most also provide fruit for both the processing and
fresh markets. Witnesses offering testimony at the hearing represented
this group of diversified Florida citrus producers and handlers. Each
was supportive of this proposal and testified that the Florida citrus
industry as a whole was supportive of the committee's efforts to
undertake responsibility for fresh citrus research and promotion
programs.
The committee's proposal included provision language that would
require the committee to report on the status and accomplishments of
its research and promotion programs annually. Similarly, contracting
parties working on such projects with the committee would be required
to file and maintain complete project reports and make them available
to the committee.
No testimony opposing this proposal was provided at the hearing.
For the reasons stated above, it is recommended that a new Sec. 905.54
be added to the order to provide authority to establish and conduct
production research projects, marketing research and development
projects, and marketing promotion programs, including paid advertising,
to enhance the production and marketing of fresh Florida citrus.
Additionally, the section should require that the committee provide
annual project status reports to its members and to USDA, Moreover,
contractors should be required to file and maintain project reports and
records and make them available to the committee and USDA.
Conforming Changes
AMS also proposed to make such changes as may be necessary to the
order to conform to any amendment that may result from the hearing.
Amendments to Sec. 905.22 Nominations, as described under Material
Issue 1, would replace the word ``he'' in the first sentence of
paragraph (a)(2) to ``he or she.'' As conforming changes in Sec.
905.22, AMS recommends replacing the word ``he'' in the second sentence
of paragraph (a)(2) with ``he and she'', and replacing the word ``his''
in the last sentence of paragraph (b)(2) with the words ``his or her.''
Small Business Considerations
Pursuant to the requirements set forth in the Regulatory
Flexibility Act (5 U.S.C. 601-612) (RFA), 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 so that small businesses will not be
unduly or disproportionately burdened. Marketing orders and amendments
thereto are unique in that they are normally brought about through
group action of essentially small entities for their own benefit.
Small agricultural service firms, which include handlers regulated
under the order, have been defined by the Small Business Administration
(SBA) (13 CFR 121.201) as those having annual receipts of less than
$7,000,000. Small agricultural producers have been defined as those
with annual receipts of less than $750,000.
There are approximately 48 handlers of fresh citrus subject to
regulation under the order and approximately 7,700 producers of fresh
citrus in the regulated area. Information provided at the hearing
indicates that over 90 percent of the handlers would be considered
small agricultural service firms. Hearing testimony also suggests that
the majority of producers would also be considered small entities
according to the SBA's definition.
The order regulates the handling of fresh citrus grown in the state
of Florida. Total bearing citrus acreage has declined from a peak of
approximately 800,000 acres in 1996-97 to about 550,000 acres in 2006-
07, largely due to hurricane damage and the removal of diseased citrus
trees. Approximately 7.236 million tons of citrus were produced in
Florida during the 2006-07 season--a decline of approximately 6 million
tons compared to the 1996-97 season. According to evidence provided at
the hearing, approximately 10 percent of Florida citrus is used in the
fresh market, while the remainder is used in the production of
processed juice products. Generally, 40 percent of Florida's fresh
citrus is shipped to export markets, including the Pacific Rim
countries, Europe, and Canada.
Under the order, outgoing quality regulations are established for
fresh citrus shipments, and statistical information is collected.
Program activities administered by the committee are designed to
support large and small citrus producers and handlers. The 18-member
committee is comprised of both producer and handler representatives
from the production area, as well as a public member. Committee
meetings where regulatory recommendations and other decisions are made
are open to the public. All members are able to participate in
committee deliberations, and each committee member has an equal vote.
Others in attendance at meetings are also allowed to express their
views.
After discussions within the citrus industry, the committee
considered developing its own research and marketing promotion programs
focusing on fresh Florida citrus. An amendment study subcommittee was
formed to explore this idea and other possible order revisions. The
subcommittee
[[Page 79033]]
developed a list of proposed amendments to the order, which was then
presented to the committee and shared with other industry
organizations. The proposed amendments were also posted on the
committee's Web site for review by the Florida citrus industry at
large.
The committee met to review and discuss the subcommittee's
proposals at its meeting on May 29, 2007. At that time, the committee
voted unanimously to support the four proposed amendments that were
forwarded to AMS.
The proposed amendments are intended to provide the committee and
the industry with additional flexibility in administering the order and
producing and marketing fresh Florida citrus. Record evidence indicates
that the proposals are intended to benefit all producers and handlers
under the order, regardless of size.
All grower and handler witnesses supported the proposed amendments
at the hearing. Some witnesses commented on the implications of
implementing specific marketing, research, and development programs. In
that context, witnesses stated that they expected the benefits to
producers and handlers to outweigh any potential costs.
A description of the proposed amendments and their anticipated
economic impact on small and large entities is discussed below.
Proposal 1--Cooperative Representation
Proposal 1 would amend the order by reducing the required number of
cooperative producer and cooperative handler seats on the committee
from three each to two each.
At the time the order was promulgated, there were numerous
cooperative entities in the industry. The committee's original
structure was designed to afford proportional representation for
cooperative producers and handlers on the committee. The shrinking
number of cooperatives entities, especially cooperative marketing
entities, over time has prompted the committee to evaluate the
appropriateness of the current committee structure. The committee
believes that reducing the number of required cooperative seats on the
committee would better reflect the current composition of the industry.
The reduction would ensure that the interests of all large and small
producers and handlers, whether independent or members of cooperatives,
are represented appropriately during committee deliberations. Adoption
of the proposed amendment would have no economic impact on producers or
handlers of any size.
Proposal 2--Substitute Alternates
Proposal 2 would amend the order by allowing members who are unable
to attend committee meetings to designate available alternates to
represent them if their own alternates are also unavailable in order to
achieve a quorum. If members are unable to designate substitute
alternates, the committee could designate substitutes at the meeting if
necessary to secure a quorum. Under current order provisions, only a
member's respective alternate may represent the member if the member is
unable to attend a meeting. There is no provision for a situation in
which both the member and his or her alternate are unavailable for a
meeting. In the past, meetings have been cancelled at the last minute
because attendance was insufficient to meet quorum requirements.
If implemented, the proposed amendment would allow alternates not
otherwise representing absent members to represent other members at
committee meetings in order to secure a quorum. This would help ensure
that quorum requirements could be met and that committee business could
be addressed in a timely manner. This amendment would have no adverse
economic impact on producers or handlers of any size.
Proposal Number 3--Telephone Meetings
Proposal 3 would amend the order by adding authority to conduct
committee meetings by telephone or other means of communication.
Currently, the committee is limited to meeting in person, with
provision for emergency voting by telephone. This amendment would give
the committee greater flexibility in scheduling meetings and would be
consistent with current practices in other citrus industry settings.
Witnesses stated that using modern communication technology would
allow the committee to respond more quickly to urgent industry needs
and would provide greater access to meetings by members and other
industry participants. Greater meeting flexibility would make it easier
for the committee to hold additional meetings where there is a need for
lengthier discussion and consensus building. The quorum and voting
requirements specified for assembled meetings would also apply to
meetings held via telephone or teleconference. The votes of members
participating by telephone or other means of communication would be
confirmed in writing. Faxes and emails would be considered acceptable
forms of written vote confirmation by the committee.
This amendment is expected to benefit producers and handlers of all
sizes by improving committee efficiencies, encouraging greater
participation in industry deliberations and is not expected to result
in any significant increased costs to producers or handlers.
Proposal Number 4--Research and Promotion
Proposal 4 would amend the order by adding authority to establish
research and promotion programs. If this authority was implemented, the
committee would be able to address the specific needs of the Florida
fresh citrus industry by recommending, conducting, and funding research
projects and promotional programs, including paid advertising, that
focus on the production, handling, and marketing of fresh citrus.
Witnesses testified that the committee's assessment rate would
increase to cover the costs of any newly authorized research and
promotion projects, and that there may be an offset by decreases in
payments by the industry to fund projects through other entities. Any
increased assessment costs would be based on the volume of fresh citrus
shipped by each handler. Therefore, any increased costs would be
applied proportionately to all handlers.
Witnesses testified that the benefits expected to accrue to
producers and handlers following implementation of this amendment would
outweigh the costs. Witnesses advocated the establishment of production
research programs that would assist with the development of new
varieties and post-harvest handling methods to improve the
marketability of fresh Florida citrus. Witnesses expect that marketing
programs specific to fresh citrus would increase consumer demand and
sales, which would in turn increase returns to producers and handlers.
There was unanimous support for this proposal from witnesses at the
hearing.
Interested persons were invited to present evidence at the hearing
on the probable regulatory and informational impact of the proposed
amendments to the order on small entities. The record evidence is that
implementation of the proposals to reallocate membership seats,
authorize the use of substitute alternates, and authorize use of modern
communication technology at meetings would have little or no impact on
producers and handlers. Adding authority to conduct research and
[[Page 79034]]
promotion programs would result in additional costs being imposed on
handlers once implemented. Evidence provided at the hearing shows that
committee expenses, and therefore handler assessments, would increase
with the implementation of the proposal to authorize research and
promotion programs. However, the record indicates that there may be an
offset by decreases in payments to other industry entities now
conducting research. Improved production and marketing strategies
developed under the authorized programs would be expected to outweigh
any additional costs to the Florida fresh citrus industry. In addition,
any increased costs would be proportional to a handler's size and would
not unduly or disproportionately impact small entities.
USDA has not identified any relevant Federal rules that duplicate,
overlap or conflict with this proposed rule. These amendments are
intended to improve the operation and administration of the order and
to assist in the marketing of fresh Florida citrus.
Committee meetings regarding these proposals, as well as the
hearing date and location, were widely publicized throughout the citrus
industry, and all interested persons were invited to attend the
meetings and the hearing and to participate in committee deliberations
on all issues. All committee meetings and the hearing were public
forums and all entities, both large and small, were able to express
views on these issues. Finally, interested persons are invited to
submit information on the regulatory and informational impacts of this
action on small businesses.
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.
Paperwork Reduction Act
Current information collection requirements for Part 905 are
approved by the Office of Management and Budget (OMB), under OMB Number
0581-0189--``Generic OMB Fruit Crops.'' No changes in these
requirements are anticipated as a result of this proceeding. Should any
such changes become necessary, they would be submitted to OMB for
approval.
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.
Civil Justice Reform
The amendments to Marketing Order No. 905 proposed herein have been
reviewed under Executive Order 12988, Civil Justice Reform. They are
not intended to have retroactive effect. If adopted, the proposed
amendments would not preempt any State or local laws, regulations, or
policies, unless they present an irreconcilable conflict with this
proposal.
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 Sates 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 no later than 20 days after the date of the
entry of the ruling.
Rulings on Briefs of Interested Persons
Briefs and proposed findings and conclusions based on the record
evidence were solicited in this proceeding. No briefs were filed.
General Findings
The findings hereinafter set forth are supplementary to the
findings and determinations which were previously made in connection
with the issuance of the marketing agreement and order; and all said
previous findings and determinations are hereby ratified and affirmed,
except insofar as such findings and determinations may be in conflict
with the findings and determinations set forth herein.
(1) The marketing agreement and order, as amended, and as hereby
proposed to be further amended, and all of the terms and conditions
thereof, would tend to effectuate the declared policy of the Act;
(2) The marketing agreement and order, as amended, and as hereby
proposed to be further amended, regulates the handling of fresh citrus
grown in the production area (Florida) in the same manner as, and is
applicable only to, persons in the respective classes of commercial and
industrial activity specified in the marketing order upon which a
hearing has been held;
(3) The marketing agreement and order, as amended, and as hereby
proposed to be further amended, is limited in its application to the
smallest regional production area which is practicable, consistent with
carrying out the declared policy of the Act, and the issuance of
several orders applicable to subdivisions of the production area would
not effectively carry out the declared policy of the Act;
(4) The marketing agreement and order, as amended, and as hereby
proposed to be further amended, prescribes, insofar as practicable,
such different terms applicable to different parts of the production
area as are necessary to give due recognition to the differences in the
production and marketing of fresh citrus grown in the production area;
and
(5) All handling of fresh citrus grown in the production area as
defined in the marketing agreement and order, is in the current of
interstate or foreign commerce or directly burdens, obstructs, or
affects such commerce.
A 30-day comment period is provided to allow interested persons to
respond to this proposal. Thirty days is deemed appropriate because
these proposed changes have already been widely publicized and the
committee and industry would like to avail themselves of the
opportunity to implement the changes as soon as possible. All written
exceptions timely received will be considered and a grower referendum
will be conducted before any of these proposals are implemented.
List of Subjects in 7 CFR Part 905
Grapefruit, Marketing agreements, Oranges, Reporting and
recordkeeping requirements, Tangelos, Tangerines.
For the reasons set forth in the preamble, 7 CFR Part 905 is
proposed to be amended as follows:
PART 905--ORANGES, GRAPEFRUIT, TANGERINES, AND TANGELOS GROWN IN
FLORIDA
1. The authority citation for 7 CFR part 905 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. Amend Sec. 905.22 by revising paragraphs (a)(2) and (b)(2) to
read as follows:
Sec. 905.22 Nominations.
(a) * * *
(1) * * *
(2) Each nominee shall be a producer in the district from which he
or she is nominated. In voting for nominees, each producer shall be
entitled to cast one vote for each nominee in each of the districts in
which he or she is a
[[Page 79035]]
producer. At least two of the nominees and their alternates so
nominated shall be affiliated with a bona fide cooperative marketing
organization.
(b) * * *
(1) * * *
(2) Nomination of at least two members and their alternates shall
be made by bona fide cooperative marketing organizations which are
handlers. Nominations for not more than six members and their
alternates shall be made by handlers who are not so affiliated. In
voting for nominees, each handler or his or her authorized
representative shall be entitled to cast one vote, which shall be
weighted by the volume of fruit by such handler during the then current
fiscal period.
3. Revise Sec. 905.23 to read as follows:
Sec. 905.23 Selection.
(a) From the nominations made pursuant to Sec. 905.22(a) or from
other qualified persons, the Secretary shall select one member and one
alternate member to represent District 2 and two members and two
alternate members each to represent Districts 1, 3, 4, and 5 or such
other number of members and alternate members from each district as may
be prescribed pursuant to Sec. 905.14. At least two such members and
their alternates shall be affiliated with bona fide cooperative
marketing organizations.
(b) From the nominations made pursuant to Sec. 905.22(b) or from
other qualified persons, the Secretary shall select at least two
members and their alternates to represent bona fide cooperative
marketing organizations which are handlers, and the remaining members
and their alternates to represent handlers who are not so affiliated.
4. In Sec. 905.29, redesignate paragraph (b) as paragraph (c), and
add a new paragraph (b) to read as follows:
Sec. 905.29 Inability of members to serve.
* * * * *
(b) If both a member and his or her respective alternate are unable
to attend a committee meeting, such member may designate another
alternate to act in his or her place in order to obtain a quorum:
Provided, That such alternate member represents the same group
affiliation as the absent member. If the member is unable to designate
such an alternate, the committee members present may designate such
alternate.
* * * * *
5. Revise paragraph (c) of Sec. 905.34 to read as follows:
Sec. 905.34 Procedure of committees.
* * * * *
(c) The committee may provide for meeting by telephone, telegraph,
or other means of communication, and any vote cast at such a meeting
shall be promptly confirmed in writing: Provided, That if any assembled
meeting is held, all votes shall be cast in person.
* * * * *
6. Add a new Sec. 905.54 to read as follows:
Sec. 905.54 Marketing, research and development.
The committee may, with the approval of the Secretary, establish,
or provide for the establishment of, projects including production
research, marketing research and development projects, and marketing
promotion including paid advertising, designed to assist, improve, or
promote the marketing, distribution, and consumption or efficient
production of fruit. The expenses of such projects shall be paid by
funds collected pursuant to Sec. 905.41. Upon conclusion of each
project, but at least annually, the committee shall summarize the
program status and accomplishments to its members and the Secretary. A
similar report to the committee shall be required of any contracting
party on any project carried out under this section. Also, for each
project, the contracting party shall be required to maintain records of
money received and expenditures, and such shall be available to the
committee and the Secretary.
Dated: December 19, 2008.
James E. Link,
Administrator, Agricultural Marketing Service.
[FR Doc. E8-30670 Filed 12-23-08; 8:45 am]
BILLING CODE 3410-02-P