[Federal Register Volume 62, Number 131 (Wednesday, July 9, 1997)]
[Proposed Rules]
[Pages 36743-36746]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-17866]
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Proposed Rules
Federal Register
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This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 62, No. 131 / Wednesday, July 9, 1997 /
Proposed Rules
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 920
[Docket No. FV97-920-2 PR]
Kiwifruit Grown in California; Proposed Relaxation in Pack
Requirements
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This proposal invites comments on revisions to pack
requirements for Size 42 and Size 45 kiwifruit under the Federal
marketing order for kiwifruit grown in California. This rule would
increase the size variation tolerance for Size 42 kiwifruit from 5
percent, by count, to 10 percent, by count, and would increase the size
variation tolerance for Size 45 kiwifruit from 10 percent, by count, to
25 percent, by count. This relaxation was recommended by the Kiwifruit
Administrative Committee (committee), the agency responsible for local
administration of the marketing order. The committee expects this rule
to reduce handler costs, increase grower returns, and allow the
kiwifruit industry to meet the increased demand for lower priced
kiwifruit.
DATES: Comments must be received by August 8, 1997.
ADDRESSES: Interested persons are invited to submit written comments
concerning this proposal. Comments must be submitted in triplicate to
the Docket Clerk, Fruit and Vegetable Division, AMS, USDA, P.O. Box
96456, room 2525-S, Washington, DC 20090-6456, FAX (202) 720-5698. All
comments should reference the docket number and the date and page
number of this issue of the Federal Register and will be made available
for public inspection in the Office of the Docket Clerk during regular
business hours.
FOR FURTHER INFORMATION CONTACT: Rose Aguayo, Marketing Specialist, or
Kurt Kimmel, Regional Manager, California Marketing Field Office,
Marketing Order Administration Branch, Fruit and Vegetable Division,
AMS, USDA, 2202 Monterey St., suite 102B, Fresno, California 93721,
telephone (209) 487-5901, FAX (209) 487-5906. Small businesses may
request information on compliance with this regulation by contacting
Jay Guerber, Marketing Order Administration Branch, Fruit and Vegetable
Division, AMS, USDA, P.O. Box 96456, room 2525-S, Washington, DC 20090-
6456, telephone (202) 720-2491, FAX (202) 720-5698.
SUPPLEMENTARY INFORMATION: This proposed rule is issued under Marketing
Order No. 920 (7 CFR part 920), as amended, regulating the handling of
kiwifruit grown in California, hereinafter referred to as the
``order.'' The order is effective under the Agricultural Marketing
Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter
referred to as the ``Act.''
The Department of Agriculture (Department) is issuing this proposed
rule in conformance with Executive Order 12866.
This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. This action is not intended to have retroactive
effect. This proposed rule would 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
principle place of business, has jurisdiction in equity to review the
Secretary's ruling on the petition, provided a bill in equity is filed
not later than 20 days after the date of the entry of the ruling.
This proposal invites comments on revisions to pack requirements
for Size 42 and Size 45 kiwifruit under the Federal marketing order for
kiwifruit grown in California. This rule would increase the size
variation tolerance for Size 42 kiwifruit from 5 percent, by count, to
10 percent, by count, and would increase the size variation tolerance
for Size 45 kiwifruit from 10 percent, by count, to 25 percent, by
count.
Section 920.52 authorizes the establishment of pack requirements.
Section 920.302(a)(4) of the rules and regulations outlines the pack
requirements for fresh shipments of California kiwifruit. Under
Sec. 920.302(a)(4)(I) of the rules and regulations, kiwifruit packed in
containers with cell compartments, cardboard fillers, or molded trays
shall be of proper size and fairly uniform in size. Section
920.302(a)(4)(ii) outlines pack requirements for kiwifruit packed in
cell compartments, cardboard fillers or molded trays and includes a
table that specifies numerical size designations and the size variation
tolerances. It also outlines pack requirements for kiwifruit packed in
bags, volume fill or bulk containers, and includes a separate table
that specifies numerical size designations and size variation
tolerances. This section provides that not more than 10 percent, by
count of the containers in any lot may fail to meet pack requirements.
It also provides that not more than 5 percent, by count, of kiwifruit
in any container, (except that for Size 45 kiwifruit, the tolerance, by
count, in any one container, may not be more than 10 percent) may fail
to meet pack requirements. This size variation tolerance does not apply
to other pack requirements such as how the fruit fills the cell
compartments, cardboard fillers, or molded trays, or any weight
requirements.
Prior to the 1995-1996 season, handlers were experiencing
difficulty meeting the size variation tolerance for Size 45 kiwifruit.
Size 45 is the minimum size. The committee determined that the best
solution was to increase the size variation tolerance, by count, in any
one container, for Size 45 kiwifruit. Section 920.302 (a)(4) was
revised by a final rule issued June 21, 1995 (60 FR 32257) to include a
provision that increased the size variation tolerance, by count, in any
one
[[Page 36744]]
container, from 5 percent to 10 percent for Size 45 kiwifruit.
This increased size variation tolerance for Size 45 kiwifruit has
been utilized for two seasons. Handlers are still experiencing
difficulty discerning if size variation tolerances for smaller fruit
are being met during the packing process.
As the size of the kiwifruit increases, so does the size of the
variation allowed. In the larger kiwifruit sizes, failure to meet the
required size variation standards results in packs that are visibly
irregular in size. In Size 42 and Size 45 packs, however, when the
respective 5 and 10 percent tolerances are exceeded, the variation is
difficult to detect visually. A size variation of \1/4\-inch (6.4 mm)
difference is allowed between the widest and narrowest kiwifruit in any
Size 42 container utilizing cell compartments, cardboard fillers or
molded trays and a \3/8\-inch (9.5 mm) size variation difference is
allowed between the widest and narrowest kiwifruit in a Size 42 bag,
volume fill or bulk container. A \1/4\-inch (6.4 mm) size variation
difference is allowed between the widest and narrowest kiwifruit in any
Size 45 container.
Packers must separate the round and flat shaped kiwifruit into two
different containers in order to meet the size variation requirements.
During the packing operation, a mechanical sizer routinely sorts the
kiwifruit by shape and size. The kiwifruit which is missed by the
mechanical sizer must be manually sorted by the handler. If size
variation tolerances are not being met, packers must slow down the pack
line and increase efforts to separate the round and flat kiwifruit to
ensure that current size variation requirements are met. Since it is
not economically feasible for each handler to be equipped with a
caliper to measure size variation, they rely on their visual judgement.
During inspection, calipers are utilized by the inspectors to determine
if the size variation is met for Size 42 and Size 45 containers. The
industry views this separation of Size 42 and 45 round and flat shaped
kiwifruit into two different containers by shape as an added cost, that
is particularly detrimental because this fruit returns little if any
money back to the grower. The higher costs of sizing the fruit during
the packing operation may have cost the industry sales as well.
Further, this sizing of kiwifruit may not be apparent to consumers.
Usually a pallet of Size 42 kiwifruit includes containers of round
fruit and containers of flat fruit. When a pallet of Size 42 kiwifruit
reaches the retailer, a container of round fruit may be displayed. As
the kiwifruit is sold, a container of the Size 42 flat fruit may be
commingled with the remaining round fruit. The consumer would then see
this commingled fruit with slightly different shapes on display. The
size variation standards that the packer strived so hard to stay within
during the packing process are erased.
The committee met on April 16, 1997, and recommended by a vote of
eight in favor and one opposed to relax the pack requirements in effect
under the order pertaining to size variation tolerances for Size 42 and
Size 45 kiwifruit. The committee recommended increasing size variation
tolerances for kiwifruit, in any one container, from 5 percent, by
count, to 10 percent, by count, for Size 42 kiwifruit and from 10
percent, by count, to 25 percent, by count, for Size 45 kiwifruit and
further recommended that this rule be effective in September for the
1997-1998 season. The season normally begins the end of September or
the first week of October. The increased size variation tolerances
would apply to any container of kiwifruit.
This proposed rule would reduce costs for handlers by allowing them
to operate in a more efficient and cost-effective manner and would
enable the industry to meet the increased demand in the marketplace for
lower priced, uniform containers of kiwifruit. Through these cost
savings, growers would be expected to receive higher returns.
There is support in the industry to increase these size variation
tolerances. The one committee member who opposed the recommendation
believes it would lower the quality of California kiwifruit.
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), the Agricultural Marketing Service (AMS) has considered the
economic impact of this rule on small entities. Accordingly, the AMS
has prepared this initial regulatory flexibility analysis.
The purpose of the RFA is to fit regulatory actions to the scale of
business subject to such actions in order that small businesses will
not be unduly or disproportionately burdened. Marketing orders issued
pursuant to the Act, and rules issued thereunder, are unique in that
they are brought about through group action of essentially small
entities acting on their own behalf. Thus, both statutes have small
entity orientation and compatibility.
There are approximately 60 handlers of California kiwifruit subject
to regulation under the order and approximately 450 kiwifruit producers
in the production area. Small agricultural service firms are defined by
the Small Business Administration (13 CFR 121.601) as those whose
annual receipts are less than $5,000,000, and small agricultural
producers have been defined as those having annual receipts of less
than $500,000. One of the 60 handlers subject to regulation has annual
kiwifruit sales of at least $5,000,000, and the remaining 59 handlers
have sales less than $5,000,000, excluding receipts from any other
sources. Ten of the 450 producers subject to regulation have annual
sales of at least $500,000, and the remaining 440 producers have sales
less than $500,000, excluding receipts from any other sources.
Therefore, a majority of handlers and producers of California kiwifruit
may be classified as small entities.
Section 920.52 authorizes the establishment of pack requirements.
Section 920.302(a)(4)(ii) outlines pack requirements for kiwifruit
packed in any container and contains tables that specify numerical size
designations and size variation tolerances. This rule would increase
the size variation tolerance for Size 42 kiwifruit from 5 percent, by
count, to 10 percent, by count, and would increase the size variation
tolerance for Size 45 kiwifruit from 10 percent, by count, to 25
percent, by count. This relaxation was recommended by the committee,
the agency responsible for local administration of the marketing order.
In the larger kiwifruit sizes, failure to meet the required size
variation standards results in packs that are visibly irregular in
size. In Size 42 and Size 45, however, when the respective 5 and 10
percent tolerances are exceeded, the variation is difficult to detect
visually. However, packers must separate the round and flat shaped
kiwifruit into two different containers in order to meet the size
variation requirements within each container for Size 42 and Size 45
kiwifruit. The industry views this separation of Size 42 and 45 round
and flat shaped kiwifruit into two different containers by shape as an
added cost, that is particularly detrimental because this fruit returns
little if any money back to the grower. The higher costs of sizing the
fruit during the packing operation may have cost the industry sales as
well.
Further, this sizing of kiwifruit may not be apparent to consumers.
Usually a pallet of Size 42 kiwifruit includes containers of round
fruit and containers of flat fruit. When a pallet of Size 42 kiwifruit
reaches the retailer, a container of round fruit may be displayed. As
the kiwifruit is sold, a container of the Size 42 flat fruit may be
commingled with the remaining round fruit and the current size
variation standards that the packer strived so hard
[[Page 36745]]
to stay within during the packing process are erased.
This proposed rule should reduce costs for handlers by allowing
them to operate in a more efficient and cost-effective manner and to
meet the increased demand in the marketplace for lower priced, uniform
containers of kiwifruit.
Approximately 74 percent of all kiwifruit shipped during the 1996-
1997 season was shipped in bags, volume fill or bulk containers. The
proposed increase in tolerance in Size 42 from 5 percent, by count, to
10 percent, by count, would increase the number of kiwifruit that may
exceed the \3/8\'' size variation requirement in bags, volume fill, or
bulk containers. Since the individual fruit weight of a Size 42
kiwifruit is approximately 0.160 ounces, a 22-pound volume fill
container of Size 42 kiwifruit would contain approximately 138 fruit.
An increased tolerance of 10 percent per container would allow
approximately 14 kiwifruit to exceed the \3/8\'' tolerance versus 7
kiwifruit at the 5 percent tolerance rate. As a result, handlers would
be able to operate more efficiently with this increased tolerance.
The proposed increase in tolerance in Size 45 from 10 percent, by
count, to 25 percent, by count, would increase the number of kiwifruit
that may exceed the \1/4\'' size variation requirement. Since the
individual fruit weight of a Size 45 kiwifruit is approximately 0.145
ounces, a 22-pound volume fill container of Size 45 kiwifruit contains
approximately 151 kiwifruit. An increased tolerance of 25 percent, by
count, per container would allow 37 kiwifruit out of 151 kiwifruit to
exceed the \1/4\'' tolerance versus 15 kiwifruit at the 10 percent
tolerance rate. With this increased tolerance, handlers expect to be
able to pack round and flat shaped kiwifruit into one container,
thereby reducing costs.
This action is not expected to reduce the quality of the kiwifruit
pack. Consumers would not see any changes to the product at retail,
because the produce staff at the stores already commingle round and
flat kiwifruit in their display bins. Also, the allowed variation would
be at a reasonable level and retailers would still receive a fairly
uniform box of fruit.
California kiwifruit packing operations range from very small
operations, employing as few as 2 persons, to large operations
employing as many as 150 people per shift. The 1997-1998 season crop
estimate is projected to be 10 to 12 million tray equivalents. A tray
equivalent is 7 pounds of fruit. Handlers pack from several hundred to
over 25,000 tray equivalents during the season. Packing costs for
volume fill containers range from approximately $0.25 to 0.75 per
container. The 60 packing sheds can be divided into 3 size categories
of small, medium, and large. Small sheds would consist of 25 employees
or less, medium sheds 26-75 employees, and large sheds would consist of
76 or more employees. The committee anticipates that labor devoted to
packout, on average, would be decreased by 1 to 3 employees per packing
shed. The committee estimates cost savings of approximately $0.01 per
tray equivalent. Based on a projected crop estimate of 10 to 12 million
tray equivalents, a savings of $100,000 to $120,000 could be realized
for the 1997-1998 season.
The committee discussed numerous alternatives to this change,
including eliminating all pack requirements, increasing the size
variation tolerance to establish a Size 42-45 container by blending the
packing of Size 42 and Size 45 kiwifruit into one container, reducing
the minimum size from Size 45 to Size 49, eliminating Size 45 and
making Size 42 the minimum size, making Size 45 requirements more
restrictive, reducing the maximum to 53 kiwifruit in the 8 pound
sample, lowering the minimum maturity to 6.2 percent, and increasing
the degree, or size of the variation allowed, from \1/4\-inch to \3/8\-
inch for Size 45 kiwifruit. After lengthy discussion, all of these
alternatives were deemed unacceptable. The general consensus was that
eliminating all pack requirements could adversely affect quality. The
committee wishes to continue utilizing separate Size 42 and Size 45
containers at this time because handlers are able to market each size.
Reducing the minimum size from Size 45 to Size 49 would not benefit the
industry because growers and handlers could not make a profit growing,
packing and selling Size 49.
It was the general consensus that eliminating Size 45 and making
Size 42 the minimum size, or making Size 45 requirements more
restrictive, by reducing the maximum to 53 kiwifruit in the 8 pound
sample, would impose more stringent requirements on California growers
and handlers and eliminate salable fruit from markets. Committee
members deemed lowering the minimum maturity to 6.2 percent
unacceptable as kiwifruit picked below the current minimum maturity of
6.5 percent may shrivel in cold storage. The last alternative
considered was to increase the degree, or size of the variation
allowed, from \1/4\-inch to \3/8\-inch for Size 45 kiwifruit. It was
the consensus of the committee that such an increase would allow
undesired blending of undersize kiwifruit. The end result would be a
container with visibly different fruit sizes, including undersize
fruit. This alternative was deemed not acceptable as the industry
desires to pack a uniform container of kiwifruit.
This proposed rule would relax pack requirements under the
kiwifruit marketing order and these requirements would be applied
uniformly to all handlers. This action would not impose any additional
reporting or recordkeeping requirements on either small or large
kiwifruit 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 Department has not identified any relevant Federal rules that
duplicate, overlap or conflict with this proposed rule.
The committee's meeting was widely publicized throughout the
kiwifruit industry and all interested persons were invited to attend
the meeting and participate in committee deliberations on all issues.
Like all committee meetings, the April 16, 1997, meeting was a public
meeting and all entities, both large and small, were able to express
views on this issue. Finally, interested persons are invited to submit
information on the regulatory and informational impacts of this action
on small businesses.
A 30-day comment period is provided to allow interested persons to
respond to this proposal. All written comments timely received will be
considered before a final determination is made on this matter.
List of Subjects in 7 CFR Part 920
Kiwifruit, Marketing agreements.
For the reasons set forth in the preamble, 7 CFR part 920 is
proposed to be amended as follows:
PART 920--KIWIFRUIT GROWN IN CALIFORNIA
1. The authority citation for 7 CFR part 920 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. In Sec. 920.302 paragraph (a)(4)(ii) is amended by revising the
last sentence to read as follows:
Sec. 920.302 Grade, size, pack, and container regulations.
(a) * * *
(4) * * * (ii)* * * Not more than 10 percent, by count of the
containers in any lot and not more than 5 percent, by count, of
kiwifruit in any container, (except that for Size 42 kiwifruit, the
[[Page 36746]]
tolerance, by count, in any one container, may not be more than 10
percent and except that for Size 45 kiwifruit, the tolerance, by count,
in any one container, may not be more than 25 percent) may fail to meet
the requirements of this paragraph.
Dated: July 2, 1997.
Eric M. Forman,
Director, Fruit and Vegetable Division.
[FR Doc. 97-17866 Filed 7-8-97; 8:45 am]
BILLING CODE 3410-02-P
