Tomatoes Grown in Florida; Modification of Handling Regulations

Citation84 FR 59289
Record Number2019-21015
Published date04 November 2019
SectionRules and Regulations
CourtAgricultural Marketing Service,Agriculture Department
Federal Register, Volume 84 Issue 213 (Monday, November 4, 2019)
[Federal Register Volume 84, Number 213 (Monday, November 4, 2019)]
                [Rules and Regulations]
                [Pages 59289-59292]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2019-21015]
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                Rules and Regulations
                 Federal Register
                ________________________________________________________________________
                This section of the FEDERAL REGISTER contains regulatory documents
                having general applicability and legal effect, most of which are keyed
                to and codified in the Code of Federal Regulations, which is published
                under 50 titles pursuant to 44 U.S.C. 1510.
                The Code of Federal Regulations is sold by the Superintendent of Documents.
                ========================================================================
                Federal Register / Vol. 84, No. 213 / Monday, November 4, 2019 /
                Rules and Regulations
                [[Page 59289]]
                DEPARTMENT OF AGRICULTURE
                Agricultural Marketing Service
                7 CFR Part 966
                [Doc. No. AMS-SC-18-0075; SC19-966-1 FR]
                Tomatoes Grown in Florida; Modification of Handling Regulations
                AGENCY: Agricultural Marketing Service, USDA.
                ACTION: Final rule.
                -----------------------------------------------------------------------
                SUMMARY: This rule implements a recommendation from the Florida Tomato
                Committee (Committee) to change the handling regulations under the
                marketing order regulating the handling of tomatoes grown in Florida.
                This action removes the standard weight requirements for tomato
                containers under the handling regulations.
                DATES: Effective December 4, 2019.
                FOR FURTHER INFORMATION CONTACT: Steven W. Kauffman, Marketing
                Specialist, or Christian D. Nissen, Regional Director, Southeast
                Marketing Field Office, Marketing Order and Agreement Division,
                Specialty Crops Program, AMS, USDA; Telephone: (863) 324-3375, Fax:
                (863) 291-8614, or Email: [email protected] or
                [email protected].
                 Small businesses may request information on complying with this
                regulation by contacting Richard Lower, Marketing Order and Agreement
                Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue
                SW, STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491,
                Fax: (202) 720-8938, or Email: [email protected].
                SUPPLEMENTARY INFORMATION: This final rule, pursuant to 5 U.S.C. 553,
                amends regulations issued to carry out a marketing order as defined in
                7 CFR 900.2(j). This final rule is issued under Marketing Agreement No.
                125 and Marketing Order No. 966, as amended (7 CFR part 966),
                regulating the handling of tomatoes grown in Florida. Part 966
                (referred to as 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 Committee locally
                administers the marketing order and is comprised of producers operating
                within the production area.
                 The Department of Agriculture (USDA) is issuing this final rule in
                conformance with Executive Orders 13563 and 13175. This action falls
                within a category of regulatory actions that the Office of Management
                and Budget (OMB) exempted from Executive Order 12866 review.
                Additionally, because this final rule does not meet the definition of a
                significant regulatory action, it does not trigger the requirements
                contained in Executive Order 13771. See OMB's Memorandum titled
                ``Interim Guidance Implementing Section 2 of the Executive Order of
                January 30, 2017, titled `Reducing Regulation and Controlling
                Regulatory Costs' '' (February 2, 2017).
                 This rule has been reviewed under Executive Order 12988, Civil
                Justice Reform. This rule is not intended to have retroactive effect.
                 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 a marketing order may file with USDA a
                petition stating that the marketing order, any provision of the
                marketing order, or any obligation imposed in connection with the
                marketing order is not in accordance with law and request a
                modification of the marketing 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 final rule eliminates the standard weight certification
                requirement established under the Order. This action will relieve
                handlers from the time and cost associated with tomato inspection for
                standard weight certification at handling facilities. The Committee
                unanimously approved this recommendation at public meetings held on
                August 24, 2018, and September 6, 2018.
                 Section 966.52 of the Order provides authority to the Committee to
                establish pack and container requirements for tomatoes grown within the
                regulated area. This includes fixing the size, weight, capacity,
                dimensions, markings, or pack of the container which may be used in the
                packaging, transportation, sale, shipment, or other handling of
                tomatoes.
                 Section 966.323 sets forth the handling regulations for Florida
                tomatoes. Section 966.323(a)(3)(i) designates the container
                requirements for weight and establishes that Sec. 51.1863 of the U.S.
                Tomato Standards (7 CFR 51.1863), which specifies the standard weight
                requirement, shall apply to all containers.
                 Section 966.60 requires Florida tomatoes to be inspected and
                certified by authorized representatives of the Federal or Federal-State
                Inspection Service (FSIS), or such other inspection service as the
                Secretary shall designate. The Florida Department of Agriculture and
                Consumer Services is an agency employing state workers who collaborate
                with the USDA to provide inspection services to areas not serviced by
                federal employees. FSIS currently certifies to standard weight as part
                of the inspection process.
                 The Committee met on August 24, 2018, and September 6, 2018, to
                discuss current standard weight procedures and compliance with the
                standard weight certification requirements. Representatives from USDA's
                Specialty Crop Inspection Division (SCI) and from FSIS were present to
                participate in the discussion. These representatives informed Committee
                members that some handling facilities were not maintaining compliance
                with the standard weight certification requirements.
                 The current inspection sampling rate for standard weight
                certification is 36 containers sampled based on a lot size of 1600
                containers. FSIS currently samples eight tomato containers from each
                lot for grade and size inspection, and these containers are also
                weighed as part of the sampling for standard weight. To comply with
                standard weight certification procedures, an additional 28 containers
                should be weighed. To
                [[Page 59290]]
                lower the inspection time and cost, many tomato handlers provide an
                employee to sample and weigh the additional 28 containers to reach the
                total 36 samples required for the standard weight certification of each
                lot.
                 The containers weighed must meet the prescribed inspection
                requirements in 7 CFR 51.1863 for certification of the lot. Section
                51.1863 specifies that when packages are marked to a net weight of 15
                pounds or more, the net weight of the contents shall not be less than
                the designated net weight and shall not exceed the designated weight by
                more than 2 pounds. To allow for variations incident to proper sizing,
                not more than 15 percent, by count, of the packages in any lot may fail
                to meet the requirements for standard weight. Most of the tomatoes
                produced in the production area are packed in 25-pound containers.
                 In their discussion, Committee members stated that the current
                sampling rate requires costly labor and is a time-consuming process
                that is difficult to maintain due to the handling volume in many
                operations. One industry member stated that the volume of lots
                inspected at some handling operations can total around 50 lots in a
                single 24-hour period. If 50 lots were inspected in one day this would
                equal a total of 1800 samples selected for recording the weight. The
                handler's employee would be responsible for pulling and weighing 1400
                of these 25-pound samples to meet the standard weight requirement.
                Thus, high volume handlers may have to employ multiple people to
                perform the weight inspections.
                 The labor provided by the handler expedites the certification
                process and is lower than the cost of having FSIS inspectors weigh the
                additional cartons. However, standard weight certification is still
                expensive to maintain. One member stated that providing the necessary
                employees at their handling facility to properly administer the
                certification program cost an extra $80,000 a year above the fees
                charged by FSIS inspection.
                 The Committee asked if it might be possible to lower the sampling
                rate while maintaining the certification process as the container
                sampling size for standard weight is several times greater than the
                number of containers sampled by FSIS when certifying for grade and
                size. SCI stated that certification at a rate lower than 36 samples
                would require a study that could statistically support a new sampling
                rate. SCI indicated a study would possibly take a year to develop,
                implement, and analyze the results. Committee members expressed concern
                over the time and cost of carrying out such a study, and that the best
                course of action may be to remove the requirement for standard weight
                inspection.
                 In discussing the value of the weight certification program,
                Committee members stated that receivers of Florida tomato shipments
                still perform weight inspections regardless of the required weight
                certification. Even with the standard weight certification, there are
                occasions when weight is an issue and the shipper often rectifies any
                discrepancies by making an adjustment to the shipment for the receiver.
                At both meetings, Committee members expressed that handling operations
                are spending thousands of dollars annually to meet the certification
                requirement without realizing a significant benefit from the program.
                Committee members stated that the expense of labor and inspection time
                for certification is difficult to justify since the handler already
                makes an adjustment for the receiver regardless of the certification.
                 Committee members also stated that tomato handlers outside the
                regulated area are not required to maintain standard weight
                certification. One member indicated that eliminating the standard
                weight requirement on Florida tomato handlers would allow the
                industry's inspection procedures to be more comparable to handlers
                outside the regulated area. Another commenter stated that most handlers
                are now using in-line scales to weigh each container and did not see
                the benefit of requiring standard weight certification.
                 Removing the standard weight requirement will allow handlers to
                avoid the time and labor costs associated with the certification
                process. The Committee believes there is no longer enough benefit to
                justify maintaining the standard weight certification, and unanimously
                recommended eliminating the standard weight requirements for the 2019-
                20 and subsequent fiscal periods.
                 Committee members agreed that maintaining the individual net weight
                requirements for containers is still a valuable component of the Order.
                The current net weight requirements state all tomatoes packed by a
                registered handler shall be packed in containers of 10, 20, and 25
                pounds designated net weights. The net weight of the contents shall not
                be less than the designated net weight and shall not exceed the
                designated net weight by more than two pounds. This action will not
                modify that requirement.
                 With this action, FSIS will still sample the required containers to
                perform size and grade inspection along with recording the weights from
                each sample. FSIS shall provide a record of the weights from the eight
                samples inspected for size and grade upon request. The Committee noted
                that the eight samples weighed by FSIS will provide an independent
                record to reference in addition to the in-line automated weighing
                systems used by many handlers. The Committee believes the eight samples
                weighed by FSIS in conjunction with the automated weighing systems will
                provide ample information regarding the container weights for each lot.
                Further, eliminating the standard weight requirement will not preclude
                the handler from requesting a standard weight inspection.
                 Section 8e of the Act (7 U.S.C. 608e-1) provides that when certain
                domestically produced commodities, including tomatoes, are regulated
                under a Federal marketing order, imports of that commodity must meet
                the same or comparable grade, size, quality, and maturity requirements.
                No corresponding change to the import regulations is required as this
                action changes the container requirements.
                Final Regulatory Flexibility Analysis
                 Pursuant to requirements set forth in the Regulatory Flexibility
                Act (RFA) (5 U.S.C. 601-612), 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
                businesses 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.
                 There are approximately 75 producers of Florida tomatoes in the
                production area and 37 handlers subject to regulation under the Order.
                Small agricultural producers are defined by the Small Business
                Administration (SBA) as those having annual receipts less than
                $750,000, and small agricultural service firms are defined as those
                whose annual receipts are less than $7,500,000 (13 CFR 121.201).
                 According to industry and Committee data, the average annual price
                for fresh Florida tomatoes during the 2017-18 season was approximately
                $12.56 per 25-pound container, and total fresh shipments were 25.9
                million containers. Using the average price and shipment
                [[Page 59291]]
                information, the number of handlers, and assuming a normal
                distribution, the majority of handlers have average annual receipts of
                more than $7,500,000, ($12.56 times 25.9 million containers equals
                $325,304,000 divided by 37 handlers equals $8,792,000 per handler).
                 In addition, based on production data, an estimated producer price
                of $6.00 per 25-pound container, the number of Florida tomato
                producers, and assuming a normal distribution, the average annual
                producer revenue is above $750,000 ($6.00 times 25.9 million containers
                equals $155,400,000 divided by 75 producers equals $2,072,000 per
                producer). Thus, the majority of handlers and producers of Florida
                tomatoes may be classified as large entities.
                 This final rule eliminates the standard weight certification
                requirement under the Order. The Committee determined there is no
                longer enough benefit to justify the cost and time required for the
                standard weight certification. This action will enable handlers to
                reduce inspection time and labor costs associated with the standard
                weight program. This rule revises Sec. 966.323. Authority for these
                changes is provided in Sec. 966.52.
                 It is not anticipated that this action will impose additional costs
                on handlers or growers, regardless of size. This action is intended to
                reduce expenses incurred for labor and inspection time associated with
                the certification process for standard weight.
                 The current inspection sampling rate for standard weight
                certification based on a lot size of 1600 containers is 36 containers.
                FSIS currently samples eight tomato containers from each lot for grade
                and size inspection, and these containers are also weighed as part of
                the sampling for standard weight. To comply with standard weight
                certification procedures, an additional 28 containers need to be
                weighed. To lower the inspection time and cost, many tomato handlers
                provide an employee to sample and weigh the additional 28 containers to
                reach the total 36 samples required for the standard weight
                certification of each lot.
                 Total fresh shipments of Florida tomatoes for the 2017-18 season
                were 25.9 million 25-pound containers. This volume represents
                approximately 16,188 normal lots of tomatoes requiring inspection for
                standard weight. Using 2017-18 volume, this change will eliminate the
                requirement that inspection personnel or handler employees lift, weigh,
                and record approximately 453,265 25-pound containers during a similar
                season. This analysis illustrates the laborious nature involved in the
                standard weight inspection and certification process.
                 Avoiding the time and labor costs associated with standard weight
                certification will reduce expenses for the Florida tomato industry.
                This action will reduce the labor required for the inspection process
                by thousands of hours every year, reducing the cost for handlers. The
                expense of labor for inspection can vary widely between handler
                employees and the FSIS. However, one Committee member stated that this
                action will save his handling operation $80,000 every year. This action
                is expected to lower handler cost associated with the inspection
                process. The benefits of this rule are expected to be equally available
                to all Florida fresh tomato handlers, regardless of size.
                 The Committee considered an alternative to this action. Prior to
                this recommendation, the Committee discussed lowering the sampling size
                for the standard weight certification program with the SCI. However,
                after further discussion on the inspection process and the time it
                could possibly take to review, the Committee determined the standard
                weight program no longer provided enough benefit to justify the cost
                and time required for certification. Therefore, the alternative was
                rejected.
                 In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
                Chapter 35), the Order's information collection requirements have been
                previously approved by OMB and assigned OMB No. 0581-0178 Vegetable and
                Specialty Crops. No changes in those requirements are necessary as a
                result of this action. Should any changes become necessary, they would
                be submitted to OMB for approval.
                 This final rule will not impose any additional reporting or
                recordkeeping requirements on either small or large Florida tomato
                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. As noted in the
                initial regulatory flexibility analysis, USDA has not identified any
                relevant Federal rules that duplicate, overlap, or conflict with this
                rule. No public comments were received regarding the initial regulatory
                flexibility analysis.
                 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.
                 The Committee's meetings were widely publicized throughout the
                Florida tomato industry, and all interested persons were invited to
                attend the meeting and participate in Committee deliberations on all
                issues. Like all Committee meetings, the August 24 and September 6,
                2018, meetings were public meetings, and all entities, both large and
                small, were able to express their views on this issue.
                 A proposed rule concerning this action was published in the Federal
                Register on April 16, 2019 (84 FR 15528). Copies of the proposed rule
                were sent via email to Committee members and Florida tomato handlers.
                Additionally, the rule was made available through the internet by USDA
                and the Office of the Federal Register. A 30-day comment period ending
                May 16, 2019, was provided to allow interested persons to respond to
                the proposal.
                 During the comment period, five comments were received in response
                to the proposal. Four of the comments favored the proposed change, but
                expressed some concerns over the potential impact of the change. Three
                of these comments supported the action from a financial and economic
                standpoint. Two commenters stated the net weight requirements were
                enough to ensure quality.
                 The concerns raised included the impact on quality and labor. Two
                commenters were concerned about consumers receiving a quality product.
                One commenter supported lifting the regulation for small entities, but
                that inspection and certification be maintained for large entities.
                This action only removes the standard weight requirement. All lots of
                tomatoes will still be inspected for quality and net weight, helping to
                ensure consumers receive a consistent product meeting the established
                quality standards. In its discussions, the Committee indicated without
                a standard weight certification, the net weights will still be checked
                by the receiver and adjustments can be make accordingly. Further,
                eliminating the standard weight requirement will not preclude the
                handler from requesting a standard weight inspection if that is
                preferred by the customer.
                 Two comments questioned the impact of this change on the labor
                force. During the Committee's deliberations, handlers described
                assigning some employees to assist in the process as a cost-saving
                measure compared to having FSIS provide additional staff to do the
                sampling. Committee members stated the current sampling rate is a
                costly, time-consuming process that is difficult
                [[Page 59292]]
                to maintain due to the handling volume in many operations. The
                Committee anticipates improved efficiency in inspection time and labor
                costs.
                 One individual also recommended developing an alternative process
                for certification that could allow handlers to continue receiving
                certification. As previously stated, the Committee discussed
                alternative means for certification and determined the standard weight
                program no longer provided enough benefit to justify the cost and time
                required to develop that alternative.
                 The remaining comment pertained to issues not applicable to the
                proposed rule. Accordingly, based on the comments received, no changes
                will be made to the rule as proposed.
                 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/rules-regulations/moa/small-businesses. Any questions
                about the compliance guide should be sent to Richard Lower at the
                previously mentioned address in the FOR FURTHER INFORMATION CONTACT
                section.
                 After consideration of all relevant matter presented, including the
                information and recommendation submitted by the Committee and other
                available information, it is hereby found that this rule, as
                hereinafter set forth, will tend to effectuate the declared policy of
                the Act.
                List of Subjects in 7 CFR Part 966
                 Marketing agreements, Reporting and recordkeeping requirements,
                Tomatoes.
                 For the reasons set forth in the preamble, 7 CFR part 966 is
                amended as follows:
                PART 966--TOMATOES GROWN IN FLORIDA
                0
                1. The authority citation for 7 CFR part 966 continues to read as
                follows:
                 Authority: 7 U.S.C. 601-674.
                0
                2. Revise Sec. 966.110 to read as follows:
                Sec. 966.110 Order.
                 Order means Order No. 966 (Sec. Sec. 966.1 through 966.92)
                regulating the handling of tomatoes grown in Florida, also referenced
                in this part as marketing order and agreement.
                0
                3. Revise Sec. 966.111 to read as follows:
                Sec. 966.111 Marketing Agreement.
                 The Marketing Agreement associated with Order No. 966 is Marketing
                Agreement No. 125.
                0
                4. Amend Sec. 966.323 by revising paragraphs (a)(3)(i) and the last
                two sentences of paragraph (g) to read as follows:
                Sec. 966.323 Handling regulation.
                * * * * *
                 (a) * * *
                 (3) * * *
                 (i) All tomatoes packed by a registered handler shall be packed in
                containers of 10, 20, and 25 pounds designated net weights. The net
                weight of the contents shall not be less than the designated net weight
                and shall not exceed the designated net weight by more than two pounds.
                * * * * *
                 (g) * * * U.S. tomato standards means the revised United States
                Standards for Fresh Tomatoes (7 CFR 51.1855 through 51.1877) effective
                October 1, 1991, as amended, or variations thereof specified in this
                section, provided that Sec. 51.1863 shall not apply to tomatoes
                covered by this part. Other terms in this section shall have the same
                meaning as when used in this part and the U.S. tomato standards.
                 Dated: September 23, 2019.
                Bruce Summers,
                Administrator, Agricultural Marketing Service.
                [FR Doc. 2019-21015 Filed 11-1-19; 8:45 am]
                 BILLING CODE 3410-02-P
                

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