Tomatoes Grown in
Florida; Partial
Exemption to the
Minimum Grade
Requirements
AGENCY: Agricultural
Marketing Service,
USDA.
ACTION: Final
rule.
-----------------------------------------------------------------------
SUMMARY: This rule
provides a partial
exemption to the
minimum grade
requirements under
the marketing order
for tomatoes grown
in Florida (order).
The Florida Tomato
Committee
(Committee) locally
administers
the order. Under the
order, Florida
tomatoes must meet
at least a U.S. No.
2 grade before they
can be shipped and
sold outside the
regulated area. This
rule exempts
UglyRipeTM (UglyRipe)
tomatoes from the
shape requirements
associated with the
U.S. No. 2 grade.
This change
increases the volume
of UglyRipe tomatoes
that will meet the
order requirements,
and will help
increase shipments
and availability of
these tomatoes for
consumers.
EFFECTIVE DATE: This
final rule becomes
effective January
18, 2007.
FOR FURTHER
INFORMATION CONTACT:
William Pimental,
Marketing
Specialist, or
Christian Nissen,
Regional Manager,
Southeast Marketing
Field Office,
Marketing Order
Administration
Branch, Fruit and
Vegetable Programs,
AMS, USDA;
Telephone: (863)
324-3375, Fax: (863)
325-8793, or e-mail:
William.Pimental@USDA.gov,
or
Christian.Nissen@usda.gov.
Small businesses may
request information
on complying with
this regulation by
contacting Jay
Guerber, Marketing
Order Administration
Branch, Fruit and
Vegetable Programs,
AMS, USDA, 1400
Independence Avenue
SW., STOP 0237,
Washington, DC
20250-0237;
telephone: (202)
720-2491, Fax: (202)
720-8938, or e-mail:
Jay.Guerber@usda.gov.
[[Page 1920]]
SUPPLEMENTARY
INFORMATION: This
final rule is issued
under Marketing
Agreement No. 125
and Marketing Order
No. 966, both as
amended (7 CFR part
966), regulating the
handling of tomatoes
grown in certain
designated counties
in Florida,
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
of Agriculture
(USDA) is issuing
this rule in
conformance with
Executive Order
12866.
This final 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 USDA a petition
stating that the
order, any provision
of the order, or any
obligation imposed
in connection with
the order is not in
accordance with law
and
request a
modification of the
order or to be
exempted therefrom.
A handler is
afforded the
opportunity for a
hearing on the
petition. After the
hearing USDA would
rule on the
petition. The Act
provides that the
district court of
the United States in
any district in
which the handler is
an inhabitant, or
has his or her
principal place of
business, has
jurisdiction to
review USDA's ruling
on the petition,
provided an action
is filed not later
than 20 days after
the date of the
entry of the ruling.
This final rule
provides a partial
exemption to the
minimum grade
requirements
prescribed under the
order. The order's
rules and
regulations specify
that Florida
tomatoes must meet
at least a U.S. No.
2 grade before they
can be shipped and
sold outside the
regulated area. This
rule exempts
UglyRipe tomatoes
from the shape
requirements
associated with the
U.S. No. 2 grade.
This change
increases the volume
of UglyRipe tomatoes
that will meet the
order requirements,
and will help
increase shipments
and availability of
these tomatoes for
consumers. In
addition, it is
anticipated that
this change will
help promote
continued innovation
within the industry.
Section 966.52
of the order
provides the
authority for the
establishment of
grade and size
requirements for
Florida tomatoes.
Form and shape
represent part of
the elements of
grade. Section
966.323 of the
order's rules and
regulations
specifies, in part,
the minimum grade
requirements for
Florida tomatoes.
The current minimum
grade requirement
for Florida tomatoes
is a U.S. No. 2. The
specifics of this
grade requirement
are listed under the
U.S. Standards for
Grades of Fresh
Tomatoes (7 CFR
51.1855-51.1877).
The U.S.
Standards for Grades
of Fresh Tomatoes
(Standards) specify
the criteria
tomatoes must meet
to grade a U.S. No.
2, including that
they must be
reasonably well
formed, and not more
than slightly rough.
These two elements
relate specifically
to the shape of the
tomato. The
definitions section
of the Standards
defines reasonably
well formed as not
decidedly kidney
shaped, lopsided,
elongated, angular,
or otherwise
decidedly deformed.
The term slightly
rough means that the
tomato is not
decidedly ridged or
grooved. This rule
amends Sec. 966.323
to exempt UglyRipe
tomatoes from these
shape requirements
as specified under
the grade for a U.S.
No. 2.
UglyRipe
tomatoes are a
trademarked tomato
variety bred to look
and taste like an
heirloom-type
tomato. One of the
characteristics of
this variety is its
appearance. UglyRipe
tomatoes are often
shaped differently
from other round
tomatoes. Depending
on the time of year
and the weather,
UglyRipe tomatoes
are concave on the
stem end with
deep, ridged
shoulders. They can
also appear kidney
shaped and lopsided.
Because of this
variance in shape
and appearance,
UglyRipe tomatoes
can have difficulty
meeting the shape
requirements of the
U.S. No. 2 grade.
This rule
provides UglyRipe
tomatoes with a
partial exemption
from the grade
requirements under
the order. UglyRipe
tomatoes are only
exempt from the
shape requirements
of the grade and are
still required to
meet all other
aspects of the U.S.
No. 2 grade.
UglyRipe tomatoes
also continue to be
required to meet all
other requirements
under the
marketing order,
such as size, pack
and container, and
inspection.
Prior to the
1998-99 season, the
Committee
recommended that the
minimum grade be
increased from a
U.S. No. 3 to a U.S.
No. 2. Committee
members agree that
increasing the grade
requirement has been
very beneficial to
the industry and in
the marketing of
Florida tomatoes.
Further, some
Committee members
have stated that a
large part of the
volume of the
standard commercial
varieties of
tomatoes which fail
to make the grade
are rejected because
of their shape and
appearance.
Consequently, there
was some industry
concern that
providing an
exemption for
UglyRipe tomatoes
could result in the
shipment of U.S. No.
3 grade tomatoes of
other varieties,
contrary to the
objectives of the
exemption and the
order.
To address this
concern, the
producers of
UglyRipe tomatoes
pursued entry into
USDA's Identity
Preservation (IP)
program. This
program was
developed by the
Agricultural
Marketing Service to
assist companies in
marketing products
having unique
traits. The program
provides
independent,
third-party
verification of the
segregation of a
company's
unique product at
every stage, from
seed, production and
processing, to
distribution.
UglyRipe tomatoes
were granted
positive program
status in early
2006.
This partial
exemption only
extends to UglyRipe
tomatoes covered
under the IP
program. As such,
this should help
ensure that only
UglyRipe tomatoes
are shipped under
the exemption. In
addition, this
exemption is
contingent upon
UglyRipe tomatoes
continuing to meet
the requirements of
the IP program.
This rule
exempts UglyRipe
tomatoes from the
shape requirements
associated with the
U.S. No. 2 grade.
This change
increases the volume
of UglyRipe tomatoes
that will meet order
requirements, and
will help increase
shipments and
availability of
these tomatoes. In
addition, it is
hoped that this
change will help
promote continued
innovation within
the industry.
Section 8e of
the Act 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. Since
this rule provides a
partial exemption to
the minimum grade
requirements
under the domestic
handling
regulations, a
corresponding change
to the import
regulations is also
needed. A final rule
providing the same
partial exemption to
the minimum grade
requirements under
the import
regulations will be
issued as a separate
action.
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
[Page 1921]]
business subject to
such actions in
order that small
businesses will not
be unduly or
disproportionately
burdened. Marketing
orders issued
pursuant to the Act,
and rules issued
thereunder, are
unique in that they
are brought about
through group action
of essentially small
entities acting on
their own behalf.
Thus, both statutes
have small
entity orientation
and compatibility.
There are
approximately 100
producers of
tomatoes in the
production area and
approximately 70
handlers subject to
regulation under the
marketing 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 $6,500,000 (13
CFR 121.201).
Based on
industry and
Committee data, the
average annual price
for fresh Florida
tomatoes during the
2004-05 season was
approximately $12.50
per 25-pound
container, and fresh
shipments totaled
53,025,915 25-pound
cartons of tomatoes.
Committee data
indicates
approximately 27
percent of the
handlers handle 95
percent of the total
volume shipped
outside the
regulated area.
Based on the average
price, about 75
percent of handlers
could be considered
small businesses
under SBA's
definition. In
addition, based on
production, grower
prices as reported
by the National
Agricultural
Statistics Service,
and the total number
of Florida tomato
growers, the average
annual grower
revenue is below
$750,000. Thus, the
majority of handlers
and producers of
Florida tomatoes may
be classified as
small entities.
This final rule
provides a partial
exemption to the
minimum grade
requirements for
tomatoes grown in
Florida. Under the
order, Florida
tomatoes must meet
at least a U.S. No.
2 grade before they
can be shipped and
sold outside the
regulated area. This
final rule exempts
UglyRipe tomatoes
from the shape
requirements
specified under the
Standards for a U.S.
No. 2 grade. This
change increases the
volume of UglyRipe
tomatoes that will
meet the order
requirements, and
will help increase
shipments and
availability of
these tomatoes for
consumers. This
final rule amends
the provisions of
Sec. 966.323.
Authority for this
action is provided
in Sec. 966.52 of
the order.
This change
represents a small
increase in costs
for producers and
handlers of UglyRipe
tomatoes, primarily
from costs
associated with
developing and
maintaining the IP
program. However,
the majority of
facilities
associated with
UglyRipe tomatoes
were involved with
the IP program prior
to this rule and
have already
received a
successful audit.
Therefore, the
additional costs
associated with this
action are those
costs related to
maintaining and
complying with the
IP program. It is
anticipated that
these costs will be
minimal and will be
offset by the
increased sales of
UglyRipe tomatoes.
Finally,
UglyRipe tomatoes
are still required
to meet the majority
of the requirements
for a U.S. No. 2
grade, and are
usually priced
higher than U.S. No.
2 graded standard
commercial variety
tomatoes. Therefore,
this action should
not have a price
depressing effect on
standard varieties,
and because of the
difference in price,
this exemption
should not have a
significant impact
on the market share
for standard
commercial varieties
of Florida tomatoes.
One alternative
to this action that
was considered was
to not provide an
exemption from shape
requirements for
UglyRipe tomatoes.
This option would
not have allowed for
an increase in the
volume of UglyRipe
tomatoes that would
meet the order
requirements, and
would not help
increase shipment
and availability of
these tomatoes.
Therefore,
this alternative was
rejected.
This final rule
provides a partial
exemption to the
minimum grade
requirements under
the Florida tomato
marketing order.
Accordingly, this
rule will not impose
any additional
reporting or
recordkeeping
requirements on
either small or
large 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.
The 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.
As noted in the
initial regulatory
flexibility
analysis, USDA has
not identified any
relevant Federal
rules that
duplicate, overlap
or conflict with
this final rule.
A proposed rule
concerning this
action was published
in the Federal
Register on June 29,
2006 (71 FR 37014).
Copies of the rule
were mailed or sent
via facsimile to all
Committee members
and tomato handlers.
Finally, the rule
was made available
through the Internet
by USDA and the
Office of the
Federal Register. A
60-day comment
period ending August
28, 2006, was
provided to allow
interested persons
to respond to the
proposal.
Eighty-eight
comments were
received during the
comment period in
response to the
proposal. Of the
comments received,
79 were in support
of the regulation
and 9 were in
opposition. One
comment was received
after the close of
the comment period.
The comments in
support of the
proposal expressed
appreciation for the
taste of UglyRipe
tomatoes, and
supported a greater
market availability
for UglyRipe
tomatoes. Several
commenters stated
that UglyRipe
tomatoes compared
favorably with
homegrown tomatoes.
Other commenters
compared the taste
as being equal to
local tomatoes, even
in
winter when local
tomatoes were not
available. Several
of the comments
stated that good
taste was of greater
importance than
appearance.
Commenters also
expressed that they
have had difficulty
in finding UglyRipe
tomatoes available
for purchase and
supported this rule
and its efforts to
increase
availability.
Nine comments
were received in
opposition to the
proposed rule. Of
these comments, five
expressed concerns
regarding this
proposal's impact on
orderly marketing.
Four commenters
stated that the
current marketing
order requirements
provide stability to
the industry. One
commenter stated
that the standards
established under
the order are key to
the establishment of
an orderly market
for Florida growers
and that this rule
will weaken the
industry's ability
to maintain an
orderly market.
Another commenter
stated that the
proposed rule does
not establish,
maintain, or support
orderly marketing
conditions, but does
the exact opposite.
One of the main
goals of marketing
orders is to
establish orderly
marketing conditions
for those
commodities covered
under marketing
orders. As
previously noted,
this partial
exemption only
extends to UglyRipe
tomatoes. Further,
this rule only
provides UglyRipe
tomatoes with a
partial exemption
from the shape
requirements of the
U.S. No. 2 grade.
UglyRipe tomatoes
are still subject to
the requirements for
maturity, ripeness,
softness,
development, decay,
and damage as
specified under the
Standards for a U.S.
No. 2 grade. Even
with this partial
exemption, the
requirements for
UglyRipe tomatoes
are still
significantly higher
than those for U.S.
No. 3 grade
tomatoes.
Because this
partial exemption is
narrowly defined,
the vast majority of
the tomatoes shipped
from Florida will
still meet the
requirements for a
U.S. No. 2 grade.
Therefore, this
change will not
diminish the overall
benefits of the
established grade
standard.
[[Page 1922]]
Consequently, this
change should not
have an adverse
impact on the
orderly market for
Florida tomatoes.
Five commenters
stated that this
change would allow
UglyRipe tomatoes to
circumvent the
requirements of the
order. Two comments
declared that this
rule would allow all
UglyRipe tomatoes
produced to be sold
outside of the
regulated area.
Another comment
stated that this
rule would allow
UglyRipe tomatoes to
escape the standards
applicable to all
other tomatoes.
This partial
exemption will not
allow UglyRipe
tomatoes to
circumvent the
requirements of the
order, or allow all
UglyRipe tomatoes
produced in Florida
to be shipped
outside the
regulated area. As
stated above,
UglyRipe tomatoes
will still have to
meet the majority of
the requirements for
U.S. No. 2 grade
tomatoes, and will
have to be inspected
to ensure these
requirements are
met. UglyRipe
tomatoes also
continue to be
required to meet all
other requirements
under the marketing
order, such as size,
pack and container,
and assessment
provisions. In
addition, UglyRipe
tomatoes must meet
the requirements of
the IP program.
Five commenters
expressed concern
that providing this
exemption for the
UglyRipe tomato will
create a loophole,
which will result in
the shipment of U.S.
No. 3 grade tomatoes
of other varieties
by other producers.
One of the
commenters stated
that with this
change, every farmer
in Florida will be
selling his off
shaped fruit.
Another
commenter wrote that
this action presents
too many
opportunities for
domestic growers and
importers to sell
tomatoes of inferior
quality. Another
commenter stated
that they had no
doubt that efforts
will be made to
market U.S. No. 3
grade tomatoes that
resemble UglyRipe
tomatoes.
We disagree with
these comments.
There are safeguards
in place to address
these issues. In
addition to the
existing inspection
requirements, and
compliance efforts,
this partial
exemption only
extends to UglyRipe
tomatoes covered
under the IP
program. This
program was
developed by AMS and
provides
independent,
third-party
verification
of the segregation
of a company's
product at every
stage, from seed,
production and
processing, to
distribution. This
will help ensure
that only UglyRipe
tomatoes are shipped
using this partial
exemption, as only
handlers covered
under the IP program
will be allowed to
pack under the
exemption. Further,
USDA plans to
closely monitor
compliance
with this exemption.
Three commenters
stated that this
rule will have a
negative economic
impact on the tomato
industry. One
commenter stated
that this rule will
cause a market share
loss and loss of
sales. Another
comment
states that this
will increase
supply, which will
negatively affect
price.
We disagree
because this partial
exemption is so
narrowly defined,
and only applies to
UglyRipe tomatoes,
it should not result
in a significant
increase in the
overall supply of
tomatoes. Also, this
action should not
have a significant
impact on price.
Prior to the 1998-99
season, the
Committee
recommended that the
minimum grade be
increased from a
U.S. No. 3 to a U.S.
No. 2. The reason
for this action was
that U.S. No. 3
grade tomatoes were
having a price
depressing effect on
the market. This is
because U.S. No. 3
grade tomatoes of
standard commercial
varieties sell at
prices below those
for U.S. No. 2 grade
tomatoes. However,
in the case of
UglyRipe tomatoes,
they are
still required to
meet the majority of
the requirements for
a U.S. No. 2 grade,
and are usually
priced higher than
U.S. No. 2 graded
standard commercial
variety tomatoes.
Therefore this
action should not
have a price
depressing effect on
standard varieties,
and because of the
difference in price
this exemption
should not have a
significant impact
on the market share
for standard
commercial varieties
of Florida tomatoes.
Two commenters
also stated that
this regulation
would have a
negative impact on
small growers. The
commenters stated
that when USDA did
its initial
regulatory
flexibility analysis
USDA only considered
the impact on
producers and
handlers of UglyRipe
tomatoes. The
commenters stated
that this rule would
have a negative
impact on small
producers and
handlers of standard
commercial
varieties.
In its initial
regulatory
flexibility
analysis, USDA found
that this change
represents a small
increase in costs
for producers and
handlers of UglyRipe
tomatoes, primarily
from costs
associated with
developing and
maintaining the IP
program. As
discussed above,
this rule should not
significantly impact
demand or price for
standard commercial
varieties.
Consequently, we do
not agree that this
action will
negatively impact
growers and handlers
of standard
commercial
varieties.
Accordingly, no
changes will be made
to the rule as
proposed, based on
comments received.
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/fv/moab.html.
Any questions about
the compliance guide
should be sent to
Jay Guerber 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.
It is further
found that good
cause exists for not
postponing the
effective date of
this rule until 30
days after
publication in the
Federal Register (5
U.S.C. 553) because
the regulatory
period will begin
October 10, 2006.
Also, a 60-day
comment period was
provided for in the
proposed rule.
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
1. The authority
citation for 7 CFR
part 966 continues
to read as
follows:
Authority: 7
U.S.C. 601-674.0|
2. Amend Sec.
966.323, by adding a
new paragraph (d)(5)
to read as follows:
Sec. 966.323
Handling regulation.
* * * * *
(d) * * *
(5) For
UglyRipeTM tomatoes.
UglyRipeTM
tomatoes must meet
all the requirements
of this section:
Provided, That
UglyRipeTM tomatoes
shall be graded and
at least meet the
requirements
specified for U.S.
No. 2 under the U.S.
Standards for
Grades of Fresh
Tomatoes, except
they are exempt from
the requirements
that they be
reasonably well
formed and not more
than slightly rough,
and Provided,
Further that the
UglyRipeTM tomatoes
meet the
requirements of the
Identity
Preservation
program, Fresh
Products
Branch, Fruit and
Vegetable Programs,
AMS, USDA.
* * * * *
Dated: January
12, 2007.
Lloyd C. Day,
Administrator,
Agricultural
Marketing Service.
[FR Doc. 07-162
Filed 1-12-07; 11:58
am]
