[Federal Register Volume 63, Number 183 (Tuesday, September 22, 1998)]
[Rules and Regulations]
[Pages 50461-50464]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-25398]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 63, No. 183 / Tuesday, September 22, 1998 /
Rules and Regulations
[[Page 50461]]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Parts 916 and 917
[Docket No. FV98-916-2 IFR]
Nectarines and Peaches Grown in California; Relaxation of Quality
Requirements for Fresh Nectarines and Peaches
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim final rule with request for comments.
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SUMMARY: This interim final rule relaxes ``CA Utility'' quality
requirements for California nectarines and peaches for the remainder of
the 1998 season. The ``CA Utility'' quality requirements are based on
minimum quality requirements established under the California
Agricultural Code, with a limitation on the amount of fruit meeting
U.S. No. 1 or higher grade requirements that may be present in each
container marked ``CA Utility.'' Currently, the ``CA Utility'' quality
requirement permits not more than 30 percent of nectarines or peaches
in any container to meet or exceed the requirements of U.S. No. 1. This
relaxation increases that limitation from 30 percent to not more than
40 percent except that at least one-quarter of the fruit grading U.S.
No. 1 in such containers must have non-scoreable blemishes. A non-
scoreable blemish is a defect that does not cause the fruit to fail
U.S. No. 1 grade requirements. This rule will allow more U.S. No. 1
nectarines and peaches to be packed in containers marked ``CA
Utility,'' and is expected to benefit growers, handlers, and consumers.
DATES: Effective September 23, 1998. Comments received by October 7,
1998 will be considered prior to issuance of any final rule.
ADDRESSES: Interested persons are invited to submit written comments
concerning this final rule. Comments must be sent to the Docket Clerk,
Fruit and Vegetable Programs, AMS, USDA, P.O. Box 96456, room 2523-S,
Washington, DC 20090-6456; Fax: (202) 205-6632; or E-mail:
moabdocket__clerk@usda.gov. 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: Terry Vawter, Marketing Specialist, or
Kurt J. Kimmel, Regional Manager, California Marketing Field Office,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA, 2202 Monterey Street, suite 102B, Fresno, California 93721;
telephone: (209) 487-5901; Fax: (209) 487-5906 or George Kelhart,
Technical Advisor, Marketing Order Administration Branch, Fruit and
Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box 96456, Washington,
DC 20090-6456; telephone: (202) 720-2491, Fax: (202) 205-6632. Small
businesses may request information on compliance with this regulation
by contacting: Jay Guerber, Marketing Order Administration Branch,
Fruit and Vegetable Programs, AMS, USDA, P.O. Box 96456, Room 2525-S,
Washington, D.C. 20090-6456; telephone: (202) 720-2491, Fax: (202) 205-
6632.
SUPPLEMENTARY INFORMATION: This interim final rule is issued under
Marketing Agreement Nos. 124 and 85, and Marketing Order Nos. 916 and
917 [7 CFR Parts 916 and 917] regulating the handling of nectarines and
peaches grown in California, respectively, hereinafter referred to as
the ``orders.'' The orders 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 (Department) is issuing this final
rule in conformance with Executive Order 12866.
This final rule has been reviewed under Executive Order 12866,
Civil Justice Reform. This final rule is not intended to have
retroactive effect. This final 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 interim final rule relaxes, for the remainder of the 1998
season, the ``CA Utility'' quality requirement to allow more U.S. No. 1
grade nectarines and peaches in containers marked ``CA Utility''.
Currently, the term ``CA Utility'' means that not more than 30 percent
of the nectarines and peaches in any container meet or exceed the
requirements of the U.S. No. 1 grade, and meet other specified
requirements. This interim final rule increases that percentage to 40
percent except that at least one-quarter of the fruit grading U.S. No.
1 in such containers must have non-scoreable blemishes. A non-scoreable
blemish is a defect that will not cause the fruit to fail to meet the
requirements of U.S. No. 1. This relaxation will be in effect for the
remainder of the 1998 season, and will allow more U.S. No. 1 grade
fruit to be packed as ``CA Utility'' quality.
The Nectarine Administrative Committee (NAC) and Peach Commodity
Committee (PCC) (committees) met on September 15, 1998, to discuss this
relaxation. At that time, the NAC voted without opposition to recommend
the increased percentage of U.S. No. 1 nectarines with non-scoreable
blemishes. The PCC voted with eight in favor and one opposed to
recommend a similar change. The member opposed believed that it was too
late in the season to make such a change, that such a change would
[[Page 50462]]
disadvantage those who had already shipped ``CA Utility'' fruit in
1998, and that more study and analysis of the situation was needed.
Sections 916.52 and 917.41 of the orders authorize the
establishment of grade and quality requirements for nectarines and
peaches, respectively. Prior to the 1996 season, Sec. 916.356 of the
order's rules and regulations required nectarines to meet a modified
U.S. No. 1 grade. Specifically, nectarines were required to meet U.S.
No. 1 grade requirements, except there was a slightly tighter
requirement for scarring and a more liberal allowance for misshapen
fruit. Under Sec. 917.459 of the order's rules and regulations prior to
the 1996 season, peaches were also required to meet the requirements of
U.S. No. 1, except there was a more liberal allowance for open sutures
that were not ``serious damage.''
The minimum grade, size, and maturity requirements in Sec. 916.356
applicable to shipments of California nectarines apply during the
period April 1 through October 31 each year. The minimum grade, size,
and maturity requirements in Sec. 917.459 applicable to shipments of
California peaches apply during the period April 1 through November 23
each year.
Since the 1996 shipping season, the nectarine and peach regulations
have allowed ``CA Utility'' quality to be shipped during the regulatory
periods. Utility quality is a lower quality fruit than U.S. No. 1.
Containers marked as ``CA Utility'' must be inspected by the
Federal or Federal-State Inspection Service and certified as meeting
the ``CA Utility'' quality requirements. Part of the inspection process
is to evaluate the fruit in accordance with the requirements of the
U.S. Standards for Grades of Nectarines, the U.S. Standards for Grades
of Peaches, and the orders. In conducting inspections, inspectors are
required to evaluate various blemishes. Some blemishes are serious or
severe enough to be ``scored'' as defects which are damaging to the
grade of the fruit, while some other blemishes are either not serious
or severe enough to affect the grade of the fruit. In the first
instance, the blemishes are termed ``scoreable'' defects; and in the
second instance, the blemishes are termed ``non-scoreable.'' It is the
recommendation of the committees that such non-scoreable blemishes must
be present on at least one-quarter of the 40 percent of the fruit
grading U.S. No. 1 in boxes marked ``CA Utility.''
While containers marked ``CA Utility'' fruit are subject to relaxed
quality requirements, all other requirements of the orders must be met.
In addition to the grade requirements, Secs. 916.350 and 917.442
require each package or container of nectarines and peaches meeting the
requirements of ``CA Utility,'' to be conspicuously marked with the
words ``CA Utility'' on a visible display panel.
Through August 31 of the 1998 season, shipments of ``CA Utility''
quality nectarines and peaches have averaged about 4 percent of total
shipments. In prior seasons, utility quality shipments have been less
than 2 percent. The increase this season is attributed to quality
problems resulting from heavy early season rains. Also, hail storms
later during the season damaged some fruit rendering it unsalable,
while some fruit sustained only moderate scarring. This is especially
true for nectarines, whose smooth skin does not provide the same
protection as the fuzzy exterior of peaches.
Preliminary studies conducted by the NAC and PCC indicate that some
consumers, retailers, and foreign buyers found the lower-quality fruit
acceptable in some markets. Shipments of ``CA Utility'' nectarines
represented 1.1 percent of all nectarine shipments, or approximately
210,000 boxes in 1996. In 1997, shipments of ``CA Utility'' nectarines
represented 1.1 percent of all nectarine shipments, or approximately
230,000 boxes. Shipments of ``CA Utility'' peaches represented 1.9
percent of all peach shipments, or 366,000 boxes in 1996. In 1997,
shipments of ``CA Utility'' peaches represented 1.0 percent of all
peach shipments, or approximately 217,000 boxes. By contrast, shipments
of ``CA Utility'' nectarines represents 4.0 percent of all nectarine
shipments, or approximately 694,881 boxes by August 31 of the 1998
season. Shipments of ``CA Utility'' peaches represents 4.0 percent of
all peach shipments, or approximately 544,065 boxes by August 31 of the
1998 season.
This rule amends Secs. 916.356 and 917.459 by revising paragraph
(a)(1) under each section to allow not more than 40 percent U.S. No. 1
grade fruit to be packed in containers marked as ``CA Utility'' except
that at least one-quarter of the fruit grading U.S. No. 1 in such
container must have non-scoreable blemishes.
At the September 15, 1998, committee meetings, comments supporting
the recommendation were made by handlers who had experienced incidents
where the percentage of U.S. No. 1 fruit contained in their ``CA
Utility'' boxes was found to be higher than permitted by the orders'
rules and regulations. In those instances, they were forced to repack
the boxes, move blemished fruit to boxes containing U.S. No. 1 fruit,
or discard or donate the fruit.
At least one handler complained that the fruit with non-scoreable
blemishes was unsightly in the type of U.S. No. 1 box he offered to the
marketplace and to his customers. His preference was to place the fruit
with non-scoreable blemishes in boxes marked ``CA Utility.'' The
limitation of not more than 30 percent U.S. No. 1 fruit in boxes marked
``CA Utility'' became a greater hindrance as the season progressed. The
handler noted that an unseasonable morning rain had recently caused
dark stains on the skin of nectarines, rendering them unsuitable for
inclusion in his U.S. No. 1 boxes. He preferred including such fruit in
the ``CA Utility'' boxes, but doing so caused the ``CA Utility'' boxes
to contain more than the 30 percent U.S. No. 1 fruit permissible.
A niche market exists for utility quality fruit and an opportunity
should be made available to market somewhat better quality ``CA
Utility'' fruit to meet demand. Allowing ten percent more U.S. No. 1
grade fruit to be packed as ``CA Utility'' quality requirements would
allow more fruit to be marketed as ``CA Utility'' if handlers prefer to
do so. ``CA Utility'' quality fruit is generally made available at
lower prices to especially benefit lower-income consumers.
Some committee members initially continued to support limiting the
amount of U.S. No. 1 grade fruit that can be included in a utility pack
to 30 percent of the total in any container to maintain differences
between U.S. No. 1 containers and ``CA Utility'' containers. However,
after further discussion, it was agreed that a greater percentage of
U.S. No. 1 in a ``CA Utility'' container would not be confusing if such
fruit is also blemished. It was, therefore, agreed that an additional
10 percent U.S. No. 1 should be permitted except that every piece of
fruit in that 10 percent must possess a non-scoreable blemish. This
relaxation will be in effect for the remainder of the 1998 season. The
boxes marked ``CA Utility'' would be clearly distinct from boxes
containing U.S. No. 1 grade. Failure to provide a clear distinction
could cause confusion in the marketplace and would not meet the goal of
providing low-cost fruit to low-income consumers. It is the opinion of
the committees that this relaxation will not cause confusion among
buyers.
Data on recent production and shipments of California nectarines
and peaches appear to indicate that ``CA Utility'' quality fruit can be
marketed
[[Page 50463]]
successfully without interfering with sales of higher quality fruit. In
fact, some handlers noted that they used the ``CA Utility'' box as a
``safety net.'' Fruit which was not good enough to meet their own
criteria for packing in U.S. No. 1 boxes could be better utilized in
boxes of ``CA Utility.'' The advent of ``CA Utility'' quality
requirements has given handlers increased flexibility to improve the
overall appearance of their U.S. No. 1 shipments.
For these reasons, the NAC and PCC recommended that for the
remainder of the 1998 season that the percentage of U.S. No. 1
nectarines and peaches permitted in containers marked as ``CA Utility''
quality be increased from 30 percent to 40 percent except that at least
one-quarter of the fruit grading U.S. No. 1 in such containers must
have non-scoreable blemishes. This relaxation will be in effect for the
remainder of the 1998 season. The committees also voted to review the
percentages during the winter.
Pursuant to the 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 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 300 California nectarine and peach handlers
subject to regulation under the orders covering nectarines and peaches
grown in California, and about 1,800 producers of these fruits in
California. Small agricultural service firms, which includes handlers,
are defined by the Small Business Administration [13 CFR 121.601] as
those whose annual receipts are less than $5,000,000. Small
agricultural producers have been defined as those having annual
receipts of less than $500,000. A majority of these handlers and
producers may be classified as small entities.
Under Secs. 916.356 and 917.459 of the orders, grade and size
requirements are established for fresh shipments of California
nectarines and peaches, respectively. Such requirements are in effect
during the period April 1 through October 31 each year for nectarines,
and April 1 through November 23 for peaches. This rule relaxes, for the
remainder of the 1998 season, the definition of the ``CA Utility''
quality for California nectarines and peaches. The ``CA Utility''
quality requirement is based on minimum quality requirements
established under the California Agricultural Code, with a limitation
on the amount of fruit meeting U.S. No. 1 or higher grade requirements
that may be contained in the utility pack. Currently, the ``CA
Utility'' quality requirement, permits not more than 30 percent of the
peaches in any container to meet or exceed the requirements of a U.S.
No. 1. This relaxation increases that percentage to not more than 40
percent except that at least one-quarter of the fruit grading U.S. No.
1 in such container must have non-scoreable blemishes. A non-scoreable
blemish is a defect that does not cause the fruit to fail to meet U.S.
No. 1 grade requirements. This rule is expected to benefit growers,
handlers, and consumers.
Since the 1996 shipping season, the nectarine and peach regulations
have allowed ``CA Utility'' fruit to be shipped during the regulatory
periods. Prior to the 1996 season, Sec. 916.356 of the order's rules
and regulations required nectarines to meet a modified U.S. No. 1
grade. Specifically, nectarines were required to meet U.S. No. 1 grade
requirements, except there was a slightly tighter requirement for
scarring and a more liberal allowance for misshapen fruit. Under
Sec. 917.459 of the order's rules and regulations prior to the 1996
season, peaches were also required to meet the requirements of a U.S.
No. 1 grade, except there was a more liberal allowance for open sutures
that were not ``serious damage. ``CA Utility'' quality is a lower-
quality fruit than U.S. No. 1 and has been regulated since its
inception in 1996. Through August 31 of the 1998 season, shipments of
utility quality for both nectarines and peaches have averaged about 4
percent of total shipments. In prior seasons, utility quality shipments
have been in the 1 to 2 percent range. The increase so far this season
is mostly attributed to quality problems resulting from heavy early
season rains.
A niche market exists for ``CA Utility'' quality fruit and the
opportunity should be made available to market somewhat better-quality
``CA Utility'' fruit to meet demand.
According to comments made at the meeting on September 15, 1998,
changing the requirements now to allow additional U.S. No. 1 fruit to
be packed in ``CA Utility'' containers would not disadvantage those
handlers who have already finished for the season. Those handlers were
able to put fruit grading U.S. No. 1 into their U.S. No. 1 containers.
Since they would have likely wanted to pack such fruit in these
containers to receive the higher return anticipated for U.S. No. 1
fruit, they have not been harmed economically. Therefore, no harm has
been done by implementing this relaxation this late in the season.
Therefore, the NAC and PCC recommended changing the ``CA Utility''
quality at their September 15, 1998, meetings by modifying the
percentage of U.S. No.1 fruit in each box. The committees also voted to
review the percentages during the winter.
In Secs. 916.350 and 917.442 of the orders regulating nectarines
and peaches, respectively, lower-quality nectarines and peaches were
authorized for shipment as ``CA Utility'' as an experiment for the 1996
season only. Such authorization was continued during the 1997 and 1998
seasons. This rule changes the percentage of U.S. No. 1 nectarines and
peaches which can be packed in a container marked ``CA Utility'' for
the remainder of the 1998 season except that the fruit grading U.S. No.
1 must have a specified percentage of non-scoreable blemishes.
During the 1996 season, the Department authorized the shipment of
nectarines and peaches which were of a lower quality than the minimum
permitted for previous seasons. During 1996, there were approximately
210,000 boxes of nectarines and approximately 366,000 boxes of peaches
packed as ``CA Utility,'' or 1.1 percent and 1.9 percent of fresh
shipments, respectively. During 1997, there were approximately 230,000
boxes of nectarines and 217,000 boxes of peaches packed as ``CA
Utility,'' or 1.1 percent and 1.0 percent of fresh shipments,
respectively. By contrast, shipments of ``CA Utility'' nectarines
represents 4.0 percent of all nectarine shipments, or approximately
694,881 boxes by August 31 of the 1998 season. Shipments of ``CA
Utility'' peaches represents 4.0 percent of all peach shipments, or
approximately 544,065 boxes by August 31 of the 1998 season. Continued
availability of ``CA Utility'' quality fruit with the new relaxations
is expected to have a positive impact on producers, handlers, and
consumers by permitting more nectarines and peaches to be shipped into
fresh market channels, without adversely impacting the market for
higher quality fruit.
The committees considered several alternatives at the meeting. One
alternative was to leave the percentage of U.S. No. 1 nectarines and
peaches permitted in ``CA Utility'' containers
[[Page 50464]]
unchanged. It was determined that alternative would not address the
problem which faced the industry. The NAC and PCC also considered
increasing the 30 percent U.S. No. 1 tolerance to not more than 40
percent or to not more than 50 percent, but determined that such a
relaxation could render ``CA Utility'' boxes less distinctive from U.S.
No. 1 and create confusion in the marketplace. Another alternative
included a requirement that at least 90 percent of the individual
fruits in all boxes marked with ``CA Utility'' possess defects. Such a
requirement would create a box of fruit which would be distinct from
U.S. No. 1 due to a greater number of defects present. However, this
alternative was determined to be unacceptable because it represented
too radical a change of ``CA Utility'' quality given the emergency
nature of the recommendation. This alternative fails to offer a sound
basis for comparison with the current requirement of not more than 30
percent U.S. No. 1 because it does not reference the U.S. No. 1 grade.
Such comparison may be necessary as the committees continue to study
marketplace reaction to changes in quality requirements of ``CA
Utility.'' fruit.
This action does not impose any additional reporting and
recordkeeping requirements on either small or large 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. In accordance with
the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the
information collection requirements that are contained in Parts 916 and
917 have been previously approved by the Office of Management and
Budget (OMB) and have been assigned OMB Nos. 0581-0072 and 0581-0080,
respectively.
The Department has not identified any relevant Federal rules that
duplicate, overlap, or conflict with this rule. However, as previously
stated, nectarines and peaches under the orders have to meet certain
requirements set forth in the standards issued under the Agricultural
Marketing Act of 1946 (7 U.S.C. 1621 through 1627). Standards issued
under the Agricultural Marketing Act of 1946 are otherwise voluntary.
In addition, the committees' meetings were widely publicized
throughout the nectarine and peach industries and all interested
parties were invited to attend the meetings and participate in
committee deliberations on all issues. Like all committee meetings, the
September 15, 1998, meetings were public meetings and all entities,
both large and small, were able to express views on these issues. The
committees themselves are composed of producers, the majority of whom
are small entities. Finally, interested persons are invited to submit
information on the regulatory and informational impacts of this action
on small businesses.
This rule reflects the Department's appraisal of the need to revise
the quality requirements for California nectarines and peaches. The
Department believes that this rule will have a beneficial impact on
producers, handlers, and consumers of California nectarines and
peaches.
After consideration of all relevant matter presented, including the
information and recommendations submitted by the Committees, 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 this rule should apply to as
many shipments of California nectarines and peaches as possible. The
shipping seasons for both California nectarines and peaches began on
April 1, 1998. To maximize the effectiveness of this relaxation prior
to the end of the season, this rule needs to be in place as soon as
possible. Further, handlers are aware of this rule, which was
recommended and discussed in public meetings of the committees and no
additional time is needed for those handlers to comply with the relaxed
quality requirements. Finally, a 15-day comment period is provided for
in this interim final rule, and any written comments received will be
considered in the finalization of this interim final rule. A 15-day
comment period is appropriate because the end of the season is quickly
approaching.
List of Subjects
7 CFR Part 916
Marketing agreements, Nectarines, Reporting and recordkeeping
requirements.
7 CFR Part 917
Marketing agreements, Peaches, Pears, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, 7 CFR Parts 916 and 917
are amended as follows:
1. The authority citation for 7 CFR Parts 916 and 917 continues to
read as follows:
Authority: 7 U.S.C. 601-674.
PART 916--NECTARINES GROWN IN CALIFORNIA
2. In Sec. 916.356, paragraph (a)(1) introductory text, the last
proviso in the first sentence and the last phrase are revised to read
as follows:
Sec. 916.356 California Nectarine Grade and Size Regulation.
(a) * * *
(1) * * * Provided further, That, during the period September 23,
1998, through October 31, 1998, any handler may handle nectarines if
such nectarines meet ``CA Utility'' quality requirements. The term ``CA
Utility'' means that not more than 40 percent of the nectarines in any
container meet or exceed the requirements of the U.S. No. 1 grade,
except that at least one-quarter of the fruit grading U.S. No. 1 grade
shall have non-scoreable blemishes as determined when applying the U.S.
Standards for Grades of Nectarines; and that such nectarines are mature
and are:
* * * * *
PART 917--FRESH PEARS AND PEACHES GROWN IN CALIFORNIA
3. In Sec. 917.459, paragraph (a)(1) introductory text, the last
proviso in the first sentence and the last phrase are revised to read
as follows:
(a) * * *
(1) * * * Provided further, That during the period September 23,
1998, through November 23, 1998, any handler may handle peaches if such
peaches meet ``CA Utility'' requirements. The term ``CA Utility'' means
that not more than 40 percent of the peaches in any container meet or
exceed the requirements of the U.S. No. 1 grade, except that at least
one-quarter of the fruit grading U.S. No. 1 grade shall have non-
scoreable blemishes as determined when applying the U.S. Standards for
Grades of Peaches; and that such peaches are mature and are:
* * * * *
Dated: September 18, 1998.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-25398 Filed 9-21-98; 8:45 am]
BILLING CODE 3410-02-P