[Federal Register Volume 64, Number 145 (Thursday, July 29, 1999)]
[Rules and Regulations]
[Pages 41019-41023]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-19353]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 979
[Docket No. FV99-979-1 FIR]
Melons Grown in South Texas; Change in Container Regulation
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: The Department of Agriculture (Department) is adopting, as a
final rule, without change, the provisions of an interim final rule
changing the handling regulation currently prescribed under the South
Texas melon (cantaloupes and honeydews) marketing order. The marketing
order regulates the handling of melons grown in South Texas and is
administered locally by the South Texas Melon Committee (committee).
This rule continues in effect changes to the dimensions of bulk
containers used for shipping honeydew melons, requirements that these
containers be octagonal or rectangular in shape, and the addition of a
dimension tolerance for that container. It also continues the
provisions allowing the committee to approve the use of experimental
containers and melon shipments for experimental purposes, and the
removal of two experimental containers that have not been used by the
industry for several years. These changes were unanimously recommended
by the committee and will enable handlers to compete more effectively
in the marketplace.
EFFECTIVE DATE: August 30, 1999.
FOR FURTHER INFORMATION CONTACT: Belinda G. Garza, McAllen Marketing
Field Office, Marketing Order Administration Branch, F&V, AMS, USDA,
1313 E. Hackberry, McAllen, Texas 78501; telephone; (956) 682-2833,
Fax: (956) 682-5942; or George Kelhart, Technical Advisor, Marketing
Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA,
PO Box 96456, room 2525-S, Washington, DC 20090-6456; telephone: (202)
720-2491; Fax: (202) 720-5698. Small businesses may request information
on complying with this regulation, or obtain a guide on complying with
fruit, vegetable, and specialty crop marketing agreements and orders by
contacting Jay Guerber, Marketing Order Administration Branch, Fruit
and Vegetable Programs, AMS, USDA, PO Box 96456, Room 2525-S,
Washington, DC 20090-6456; telephone (202) 720-2491, Fax: (202) 720-
5698, or E-mail:
[[Page 41020]]
Jay.Guerber@usda.gov. You may also view the marketing agreement and
order small business compliance guide at the following web site: http:/
/www.ams.usda.gov/fv/moab.html.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing
Agreement No. 156 and Order No. 979 (7 CFR part 979), regulating the
handling of melons grown in South Texas, hereinafter referred to as the
``order.'' The marketing agreement and order are 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 is issuing this rule in conformance with Executive
Order 12866.
This rule has been reviewed under Executive Order 12988 Civil
Justice Reform. This rule is not intended to have retroactive effect.
This rule 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 the Secretary 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 the Secretary 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 the Secretary'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 rule continues in effect changes to the dimensions of bulk
containers used for shipping honeydew melons, specifications for the
shapes of these bulk containers, the addition of a dimension tolerance
for that container, the addition of procedures that allow the committee
to approve the use of experimental containers and melon shipments for
experimental purposes, and the removal of two experimental containers
that have not been used by the industry for several years. The changes
will enable handlers to compete more effectively in the marketplace,
better meet market needs, and prevent confusion in the industry. A
subcommittee met on January 28, 1999, and unanimously recommended that
the committee approve these changes to the regulation. The committee
met and unanimously recommended the changes on March 30, 1999.
Section 979.52 authorizes the issuance of regulations for grade,
size, maturity, quality, and pack of any or all varieties of melons
during any period. Section 979.54 authorizes the issuance of
regulations that modify, suspend, or terminate requirements issued
under Secs. 979.42, 979.52, or 979.60 to facilitate the handling of
melons for special purposes. Section 979.55 requires adequate
safeguards to ensure that melons handled under Sec. 979.54 are used for
the stated purposes.
Changes to the Bulk Container Requirements for Honeydew Melons
Section 979.304 of the order's rules and regulations sets container
requirements for both cantaloupes and honeydew melons. Only honeydews
are authorized to be packed in bulk containers. Thus, these changes to
bulk container requirements do not apply to cantaloupes.
Prior to the issuance of the interim final rule, Sec. 979.304(b)(4)
authorized the use of a bulk container for honeydew melons and
specified that the container be 48 inches long by 40 inches wide by 24
inches deep or similar dimensions. The phrase ``or similar dimensions''
was included to provide flexibility recognizing that the dimensions of
containers sometimes are a little less or more than those specified in
the regulation. The committee determined that the provisions were too
flexible, and that the lack of specificity could result in
administrative, compliance, and enforcement problems.
It now believes that a more precise tolerance is needed so there is
no room for misinterpretation by the industry. The committee,
therefore, recommended removing the phrase ``or similar dimensions''
and adding in its place provisions establishing a dimension tolerance
of 1\1/2\ inch for each dimension. The 1\1/2\ inch tolerance for each
dimension for this container will allow handlers to pack honeydew
melons in containers with dimensions slightly different from the sizes
specified in the regulation. Identifying a specific dimension tolerance
in the regulation will prevent misunderstandings, and provide handlers
the flexibility to use bulk containers with slight dimension variations
when packing honeydew melons.
The committee also recommended allowing the depth of the bulk
container to range between 24 and 36 inches to permit melon handlers to
pack larger or a greater number of honeydew melons in the container, if
they desire. The industry's need to pack larger or a greater number of
honeydews in the bulk container, depending on buyer or retailer needs,
led to this committee recommendation for increased container
flexibility.
The committee further recommended that the shape of bulk containers
used for honeydew melons be rectangular or octagonal. Currently, these
are the only shapes used by handlers, and the limitation will not
impose an added burden on handlers. The change is expected to foster
compliance and simplify enforcement. Last season a total of 1,727 bulk
containers were shipped by the industry, compared to 1,655 containers
in 1997. Demand for bulk containers has increased in recent years
because their use results in reduced costs to receivers. Bulk bins can
be re-used, whereas other containers cannot. The cost of disposing of
used containers has increased.
Addition of Provisions Allowing the Committee To Approve the Use of
Experimental Containers and Melon Shipments for Experimental
Purposes
The market for both cantaloupes and honeydew melons continues to
undergo rapid changes. Buyers, retailers, and consumers continually
demand flexibility in container availability. The committee is always
looking for ways to strengthen and expand the market for melons. Except
for an experimental honeydew pony carton that was removed by the
interim final rule, there were no provisions in place allowing the
committee to approve melon shipments for experimental purposes nor in
experimental containers unless informal rulemaking was initiated. There
are times during the melon shipping season when the trade is interested
in receiving melons in containers other than those authorized by the
regulations. The industry has been using only fiberboard containers,
and they are interested in experimenting with plastic bins.
Not being able to respond quickly to market demands for testing
different types of melon containers could have caused the South Texas
melon industry to lose sales to competing melon-producing areas.
Competition from other melon production areas demands that the Texas
melon industry have the ability to quickly respond to buyer, retailer,
and consumer demands for new containers. The committee may become aware
of the need for new containers during the shipping season. The shipping
season normally runs from
[[Page 41021]]
May 1 through June 20 each year. For the committee to respond quickly
to market needs for containers, it should have flexibility to approve
the use of experimental containers whenever the need arises. Also,
melon-producing areas without marketing orders are not bound by
container restrictions and have the flexibility to use different types
and sizes of containers as needed by consumers and retailers. The added
flexibility allows handlers to better meet buyers' needs.
In addition, the committee recommended that provisions be added to
the regulations to permit it to approve shipments for experimental
purposes to allow the industry to test different types of melon
shipments whenever needed to meet competition from other growing areas,
and buyers' needs. Some handlers have expressed an interest in
experimenting with the shipment of cantaloupe and honeydew melons in
the same container.
Establishing provisions in the regulations to allow the committee
to approve the use of experimental containers will allow the industry
to respond quickly to market needs for containers not approved under
the order's container regulations. Establishing provisions in the
regulations to allow the committee to approve shipments for
experimental purposes will allow the industry to test different types
of melon shipments when needed.
Safeguards for these types of shipments are currently specified in
paragraph (f) of Sec. 979.304. A handler wanting an exemption for an
experimental container or experimental use would apply to the committee
for a Certificate of Privilege. The Certificate would be issued by the
committee after consideration of the application. Handlers using a
Certificate of Privilege are required to report each exempt shipment to
the committee. This enables the committee to easily track such
shipments, and ensure compliance with the order's rules and
regulations.
Once the committee approves the use of experimental containers or
experimental shipments, the industry will be able to determine the
benefits and market acceptance of the containers and other types of
shipments. Also, allowing handlers to ship melons in test containers
enables the committee to determine whether such containers should be
added to the permanent list of approved containers in the regulations.
Removal of Two Experimental Containers
An experimental honeydew pony carton added in 1985 to paragraph
(e)(3) and a cantaloupe carton added in 1990 to paragraph (e)(4) in
Sec. 979.304 have not been used for several years. The committee,
therefore, recommended that they be removed from the handling
regulation.
Other Changes in the Regulations
Prior to the issuance of the interim final rule, the name of one of
the designated inspection offices and the telephone area codes of the
designated inspection offices in Sec. 979.304(c)(4) were incorrect. To
correct these references, the committee recommended that the name of
the inspection office be changed to ``Texas Cooperative Inspection
Program'' office and the telephone area codes be changed from ``210''
to ``956.''
In addition, in Sec. 979.180 and Sec. 979.304, the word
``cantaloup'' was misspelled. To correct the misspelling, all
references to ``cantaloup'' were changed to ``cantaloupe'' by the
interim final rule.
Final 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 final 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 the rules issued thereunder, are unique in
that they are brought about through group action of essentially small
entities acting on their own behalf. Thus, both statutes have small
entity orientation and compatibility.
There are 14 handlers of South Texas melons who are subject to
regulation under the marketing order and approximately 33 melon growers
in the regulated area. Small agricultural service firms have been
defined by the Small Business Administration (13 CFR 121.601) as those
having annual receipts of less than $5,000,000, and small agricultural
growers are defined as those having annual receipts of less than
$500,000.
Most of the handlers are vertically integrated corporations
involved in producing, shipping, and marketing melons. For the 1997-98
marketing year, 6,770 acres of production were shipped by the
industry's 14 handlers; the average acreage and median acreage handled
totaled 484 acres and 417 acres, respectively. In terms of production
value, total revenues from the 14 handlers were estimated to be $16.4
million.
The Rio Grande Valley melon industry is characterized by growers
and handlers whose farming operations generally involve more than one
commodity, and whose income from farming operations is not exclusively
dependent on the production of melons. Alternative crops provide an
opportunity to utilize many of the same facilities and equipment not in
use when the melon production season is complete. For this reason,
typical melon growers and handlers either double-crop melons during
other times of the year or produce alternate commodities, like onions.
Based on the SBA's definition of small entities, the committee
estimates that a majority of the 14 handlers regulated by the order
would be considered small entities if only their spring melon revenues
are considered. However, revenues from other productive enterprises
would likely push a large number of these handlers above the $5,000,000
annual receipt threshold. Of the 33 growers within the production area,
few have sufficient acreage to generate sales in excess of $500,000;
therefore, the majority of growers may be classified as small entities.
This rule continues the changes to the container regulation to
accurately identify the shapes and dimensions of bulk containers
handlers use for shipping honeydew melons, the addition of procedures
allowing the committee to approve use of experimental containers and
melon shipments for experimental purposes, the removal of two
experimental containers that have not been used by the industry for
several years, and several minor modifications to update the
regulations. These changes will enable handlers to compete more
effectively in the marketplace, better meet market needs, and prevent
confusion. A subcommittee met on January 28, 1999, and unanimously
recommended that the committee approve these changes to the regulation.
The committee met and unanimously recommended the changes on March 30,
1999.
Section 979.52 authorizes the issuance of regulations for grade,
size, maturity, quality, and pack for any or all varieties of melons
during any period. Section 979.54 authorizes the issuance of
regulations that modify, suspend, or
[[Page 41022]]
terminate requirements issued under Secs. 979.42, 979.52, or 979.60 to
facilitate handling of melons for special purposes. Section 979.55
requries adequate safeguards to ensure that melons handled under
Sec. 979.54 are used for the stated purpose.
At its meeting on March 30, 1999, the committee unanimously
recommended revising Sec. 979.304 as follows:
(1) Modify the bulk container requirements to accurately identify
the shapes and dimensions of bulk containers used for shipping honeydew
melons;
(2) Add provisions to allow the committee to approve the use of
experimental containers and melon shipments for experimental purposes;
(3) Remove two experimental containers that have not been used by
the industry for several years; and
(4) Make several minor modifications to update the regulations.
Changes in the Bulk Container Requirements for Honeydew Melons
Prior to the issuance of the interim final rule, Sec. 979.304(b)(4)
authorized the use of a bulk container for honeydew melons and
specified that the container be 48 inches long by 40 inches wide by 24
inches deep or similar dimensions. The committee recommended that the
regulation specify that the bulk containers be rectangular or
octagonal, the types of containers currently being used by the
industry, in order to help administer the program. Making the
regulation more specific will foster compliance and simplify
enforcement. Last season 1,727 of these bulk containers were shipped by
the industry. Specifying the shape of the bulk container in the
regulation cleared up any misunderstanding that any shape bulk
container could be used for shipping honeydew melons.
The former regulation did not provide specific tolerances on the
container dimensions, and the committee did not know exactly how
``similar dimensions'' was being interpreted. Differences in
interpretation among handlers and the industry regarding the phrase
``or similar dimensions'' could have caused problems enforcing the
marketing order program. A more precise tolerance was needed so that
there was no room for misinterpretation by the industry. To clarify the
industry's intentions, the committee recommended removing the phrase
``or similar dimensions'' and adding in its place, ``A tolerance of
1\1/2\ inch for each dimension shall be permitted.'' The committee
believes the recommendation to provide a 1\1/2\ inch tolerance for each
dimension on this container has provided handlers some flexibility to
pack honeydew melons in containers with slightly different dimensions
from the sizes specified in the regulation. Identifying specific
dimension tolerances in the regulation also has prevented possible
misunderstandings on authorized container dimensions.
The committee also recommended increasing the depth allowance of
the bulk container by 12 inches to permit melon handlers to pack larger
or a greater number of honeydew melons in the container.
Adding tolerances to the dimensions of the approved bulk container
and increasing the depth allowance has allowed the melon industry to
accept containers with slight dimension variations from box
manufacturers. This has given handlers additional flexibility in making
container purchases.
The industry's need to pack larger or a greater number of honeydews
in the bulk container, depending on buyer or retailer needs, led to the
committee's recommendation to increase the depth allowance of the
container by an additional 12 inches to permit a range from 24 to 36
inches deep.
Addition of Provisions Allowing the Committee To Approve the Use of
Experimental Containers and Melon Shipments for Experimental
Purposes
The marketplace continues to undergo rapid changes. Buyers,
retailers, and consumers continually demand flexibility in container
availability. The committee is always looking for ways to strengthen
and expand the market for melons. Except for an experimental honeydew
pony carton provision that was removed by the interim final rule, there
were no procedures in place to allow the committee to approve melon
shipments for experimental purposes nor in experimental containers
unless they initiated informal rulemaking. There are times during the
melon shipping season when the trade is interested in receiving melons
in containers other than those authorized by the regulations. The
industry has been using only fiberboard containers, and they are
interested in experimenting with plastic bins. The committee did not
have the flexibility to react quickly to the need for containers not
approved for South Texas melon shipments. Not being able to respond
quickly to market demands for testing different types of melon
containers could have caused the South Texas melon industry to lose
sales to competing melon-producing areas.
Competition from other melon production areas demands that the
Texas melon industry be able to quickly respond to buyer, retailer, and
consumer demands for new containers. Because the melon regulatory
period begins May 1 each year and runs through June 20, the committee
is not able to meet, approve regulatory changes, and promptly complete
the rulemaking process in order to approve various types of
experimental containers. The industry may not be aware of the need for
new containers until it is in the middle of its shipping season. For
the committee to respond quickly to market needs for containers which
were not currently authorized, it needed the flexibility to approve the
use of experimental containers whenever the need arose. Also, melon-
producing areas without marketing orders are not bound by container
restrictions and have the flexibility to use different types and sizes
of containers as needed by consumers and retailers. The added
flexibility will allow handlers to meet the competition from other
areas and better meet buyers' needs. In addition, the committee
recommended that provisions be added to the regulations to permit it to
approve shipments for experimental purposes to allow the industry to
test different types of melon shipments whenever needed. As mentioned
before, some handlers have expressed an interest in experimenting with
the shipment of cantaloupes and honeydew melons in the same container.
Establishing provisions to allow the committee to approve the use
of experimental containers will allow the industry to respond quickly
to market needs for containers not approved under the orders's
container regulations, and establishing provisions to authorize the
committee to approve shipments for experimental purposes will allow the
industry to test different types of melon shipments when needed.
Because the committee has established safeguard for these types of
experimental containers or experimental shipments, the industry will be
able to determine the benefits and market acceptance of the containers
or other types of shipments. Also, allowing handlers to ship melons in
test containers will enable the committee to determine whether such
containers should be added to the permanent list of approved
containers.
Removal of Two Experimental Containers
Two experimental containers in (e)(3) (a honeydew pony carton added
in 1985) and (e)(4) (a cantaloupe carton added in 1990) of Sec. 979.304
are obsolete and have not been used for several years, and the
committee recommended that they be removed from the handling
[[Page 41023]]
regulation. The interim final rule removed these containers from the
regulation.
Other Changes in the Regulations
Prior to the interim final rule, the name and telephone area codes
of an inspection office in Sec. 979.304(c)(4) were incorrect. To
correct these references, the committee recommended that the name of
the inspection office be changed to ``Texas Cooperative Inspection
Program'' office and the telephone area codes be changed from ``210''
to ``956.''
In Marketing Order No. 979 the correct spelling of ``cantaloupe''
is used, and in Secs. 979.180 and 979.304, ``cantaloup'' was
misspelled. To correct the misspelling and for consistency, all
references to ``cantaloup'' were changed to ``cantaloupe'' by the
interim final rule.
This rule will continue to permit the South Texas melon industry to
experiment with different types of containers prior to adding them to
their approved container list. The committee believes this will allow
handlers to more effectively accommodate retailer and customer needs.
The committee recommended these changes to assist the consuming
public in receiving Texas melons in containers they desire. Permitting
the South Texas melon industry to experiment with different types of
containers without the need for rulemaking and adding tolerance to the
approved honeydew bulk container have small entity orientation.
An alternative to the recommended changes would have been to keep
the regulations as they are, however:
(1) It was the committee's desire to come up with a more workable
bulk honeydew container regulation to make it more precise and
eliminate potential problems. Not permitting a 1\1/2\ inch tolerance
for each dimension on the bulk container could have prevented the
industry from marketing honeydew melons in containers which might be
manufactured slightly different from the sizes specified in the
regulation.
(2) Not permitting the committee to quickly approve shipments for
experimental purposes exempt from regulations or in experimental
containers without rulemaking could have hindered the industry's
ability to respond to market needs and prevented it from marketing more
melons. Not providing the committee the flexibility to quickly respond
to market demands for test containers or shipments could have resulted
in the industry losing sales to other melon producing areas.
(3) The two permanent experimental containers were no longer needed
because the containers have not been used for a number of years, and a
new section was added to make it possible for the committee to quickly
approve the use of experimental containers.
(4) Not updating the name and telephone numbers of the inspection
office to accurately reflect the correct information could have caused
confusion in the industry.
Although authorizing melon shipments for experimental purposes and
the use of experimental containers will impose some additional
reporting and recordkeeping requirements on melon handlers, this will
be minimal. Currently, handlers making shipments of melons for special
purposes, including experimental, are required to obtain a Certificate
of Privilege to notify the committee of their intent to ship melons for
these purposes. Also, handlers must prepare a special purpose shipment
report on each shipment and forward it to the committee. The committee
estimates that approximately two or four handlers might request
approval for the use of experimental containers, which will increase
the total reporting and recordkeeping burden by approximately .1 to .2
hours, and this time to currently approved under OMB No. 0581-0178 by
the Office of Management and Budget (OMB) in accordance with the
Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35).
As with all Federal marketing order programs, reports and forms are
periodically reviewed to reduce information requirements and
duplication by industry and public sectors. In addition, as noted in
the initial regulatory flexibility analysis, the Department has not
identified any relevant Federal rules and duplicate, overlap or
conflict with this rule.
Further, the committee's meeting was publicized throughout the
melon industry and all interested persons were invited to attend the
meeting and participate in committee deliberations. Like all committee
meetings, the March 30, 1999, meeting was a public meeting and all
entities, both large and small, were able to express their views on
this issue. The committee itself is composed of 10 members, of which 9
are growers and handlers, and one represents the public. Also, the
committee has a subcommittee to review certain issues and make
recommendations to the committee. The subcommittee met on January 28,
1999, and discussed this issue in detail. The meeting was a public
meeting and both large and small entities were able to participate and
express their views.
An interim final rule concerning this action was published in the
Federal Register on May 4, 1999. Copies of the rule were mailed by the
committee's staff to all committee members and melon handlers. In
addition, the rule was made available through the Internet by the
Office of the Federal Register. That rule provided for a 60-day comment
period which ended July 6, 1999. No comments were received.
After consideration of all relevant material presented, including
the Committee's recommendation, and other information, it is found that
finalizing an interim final rule, without change, was published in the
Federal Register (64 FR 23754, May 4, 1999) will tend to effectuate the
declared policy of the Act.
List of Subjects in 7 CFR Part 981
Marketing agreements, Melons, Reporting and recordkeeping
requirements.
PART 979--MELONS GROWN IN SOUTH TEXAS
Accordingly, the intermin final rule amending 7 CFR part 979 which
was published at 64 FR 23754 on May 4, 1999, is adopted as a final rule
without change.
Dated: July 23, 1999.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 99-19353 Filed 7-28-99; 8:45 am]
BILLING CODE 3410-02-M
