[Federal Register Volume 59, Number 124 (Wednesday, June 29, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-15721]


[[Page Unknown]]

[Federal Register: June 29, 1994]


  
  
  
                                                   VOL. 59, NO. 124

                                           Wednesday, June 29, 1994

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 920 and 944

[Docket No. FV94-920-1PR]

 

Kiwifruit Grown in California and Imported Kiwifruit; Proposed 
Increase in Minimum Size Requirements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: This proposed rule would increase the current minimum size 
requirements for kiwifruit grown in California and for kiwifruit 
imported into the United States that are shipped to the fresh market. 
The minimum size requirements would be increased from Size 49, which is 
defined as 60 pieces of fruit per 8-pound sample, to Size 45, which 
would be defined as 55 pieces of fruit per 8-pound sample. This rule 
would prevent shipments of low-quality, undersized kiwifruit from 
having a negative effect on the market.

DATES: Comments must be received by July 29, 1994.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposal. Comments should be sent in triplicate to the 
Docket Clerk, Fruit and Vegetable Division, AMS, USDA, Room 2525-S, 
P.O. Box 96456, Washington, DC 20090-6456 or by FAX at (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 available for 
public inspection in the office of the Docket Clerk during regular 
business hours.

FOR FURTHER INFORMATION CONTACT: Mark Hessel, Marketing Order 
Administration Branch, AMS, USDA, P.O. Box 96456, Room 2526-S, 
Washington, DC 20090-6456; telephone (202) 720-5127; or Rose Aguayo, 
California Marketing Field Office, AMS, USDA, 2202 Monterey Street, 
Suite 102 B, Fresno, California 93721; telephone (209) 487-5901.

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.
    This proposed rule is also issued under section 8e of the Act, 
which provides that whenever certain specified commodities, including 
kiwifruit, are regulated under a Federal marketing order, imports of 
these commodities into the United States are prohibited unless they 
meet the same or comparable grade, size, quality, or maturity 
requirements as those in effect for the domestically produced 
commodities.
    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 12778, 
Civil Justice Reform. This action is not intended to have retroactive 
effect. This proposed 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 in equity to review the 
Secretary's ruling on the petition, provided a bill in equity is filed 
not later than 20 days after date of the entry of the ruling.
    There are no administrative procedures which must be exhausted 
prior to any judicial challenge to the provisions of import regulations 
issued under section 8e of the Act.
    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act (RFA), the Administrator of the Agricultural Marketing 
Service (AMS) has considered the economic impact of this proposed rule 
on small entities.
    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. Import regulations issued under 
the Act are based on those established under Federal marketing orders.
    There are approximately 65 handlers subject to regulation under the 
order and about 600 producers of California kiwifruit. There are 
approximately 75 importers of kiwifruit. Small agricultural service 
firms, which include kiwifruit handlers and importers, have been 
defined by the Small Business Administration [13 CFR 121.601] as those 
whose annual receipts are less than $3,500,000, and small agricultural 
producers are defined as those whose annual receipts are less than 
$500,000. A majority of these handlers, importers, and producers may be 
classified as small entities.
    Under the terms of the marketing order, fresh market shipments of 
California kiwifruit are required to be inspected and are subject to 
grade, size, maturity, pack, and container requirements. Current 
requirements include specifications that such shipments be at least 
Size 49, grade at least KAC No. 1 quality, and contain a minimum of 6.5 
percent soluble solids.
    The production of California kiwifruit for the 1993 season was 
approximately 12.3 million tray equivalents, compared to the 1992 
season production of 13.3 million tray equivalents. This represents an 
8 percent decrease in California kiwifruit production from 1992 to 
1993.
    The Kiwifruit Administrative Committee (committee), the agency 
responsible for local administration of the marketing order, met on 
February 10, 1993, and recommended increasing the minimum size 
requirement from Size 49, which is defined as 60 pieces of fruit per 8-
pound sample, to Size 45, which would be defined as 55 pieces of fruit 
per 8-pound sample.
    The marketing order authorizes under Sec. 920.52(a)(2) the 
establishment of minimum size requirements. Sec. 920.302(a)(2) of the 
rules and regulations outlines the minimum size requirements for fresh 
shipments of California kiwifruit. Section 920.302(a)(4)(ii) includes a 
table that specifies numerical size designations that are used to 
determine kiwifruit sizes. These size designations are defined by 
numerical counts, which establish the maximum number of fruit per 8-
pound sample for each of the established sizes. The size designation 
table defines ten different sizes, beginning with Size 21 (the largest 
size) and ending with Size 49 (the smallest size). The committee 
recommended eliminating the Size 49 designation (60 pieces of fruit per 
8-pound sample) and redefining the Size 45/46 designation (57 pieces of 
fruit per 8-pound sample) as a Size 45 designation (55 pieces of fruit 
per 8-pound sample).
    The committee recommended increasing the minimum size requirement 
because of the blending and packing of undersized fruit into containers 
using the Size 49 designation. Current pack requirements specify that 
kiwifruit designated as Size 45/46 or below must be packed within a \1/
4\ inch size tolerance. Undersized fruit (Size 49 kiwifruit near or 
below the lower limit of the size tolerance) is often blended into the 
Size 49 designation. It is a common practice throughout the industry to 
blend and pack kiwifruit that could be designated as either undersized 
fruit, Size 49, or Size 45/46 into a Size 49 container.
    Blending occurs because adjoining size designations have size 
tolerances that partially overlap and kiwifruit within either size 
tolerance may be packed in either size designation. For example, the 
current Size 49 designation and the current Size 45/46 designation have 
only a 3-count difference per 8-pound sample. This amounts to only a 
0.12 ounce difference per individual fruit. The equipment and time 
needed to detect such a difference when packing individual fruit would 
be cost prohibitive, so instead, handlers choose to blend sizes.
    Blending has become more prevalent in recent years because a 
greater percentage of kiwifruit is being packed in volume-fill or bulk 
containers in which the fruit is packed ``loosely'' instead of in 
containers with molded trays. Without the constraints of a molded tray, 
there is more freedom to blend sizes.
    The committee's intention in recommending this increase in the 
minimum size requirement is to eliminate shipments of undersized fruit 
that is blended into the Size 49 designation. This undersized kiwifruit 
tends to soften more rapidly during storage than larger fruit and 
becomes more susceptible to decay. This tendency for undersized fruit 
to soften more rapidly than larger fruit becomes more pronounced once 
it leaves a controlled environment and enters an uncontrolled one such 
as a retail shelf. The end result is that the consumer is more likely 
to encounter quality defects with undersized fruit then with larger 
fruit.
    Eliminating fresh shipments of undersized fruit by increasing the 
minimum size requirement would improve overall quality and increase 
uniformity of pack size. The consumer would benefit by being offered a 
higher quality kiwifruit that would ripen properly without prematurely 
shriveling or softening. Also, grower returns are expected to increase 
due to less repack loss, better kiwifruit movement, and higher prices 
because of a better quality product.
    There is also ample evidence to show that the market is adverse to 
smaller sizes. The California Kiwifruit Commission funded an 
independent survey titled ``Fresh Kiwifruit: Views from the Trade,'' in 
1993. This survey indicated that 30% of the trade rejects small sizes 
and that 86.1% of the trade prefers Size 42 (defined as 50 pieces of 
fruit per 8-pound sample) or larger. Also, 92.1% of the merchandisers 
and produce managers claim that their customers reject small sizes.
    An example of how consumers reject smaller sizes is when kiwifruit 
is sold at the retail level out of 125 pound bulk bins. Consumers 
initially pick out the largest and higher quality kiwifruit, and 
displays are left with undersized and low quality kiwifruit that is 
rejected by later consumers.
    The committee's recommendation that the minimum size requirement be 
set at Size 45 would not significantly lower the volume of kiwifruit 
available in the fresh market. Although the committee reports that 
12.1% of the California kiwifruit packout for the 1993/94 season was 
designated as Size 49, most of this total could be blended into the 
proposed Size 45 designation because of the small difference between 
the two size designations. The practice of blending sizes makes it 
difficult to predict how much fruit would be eliminated by this 
proposal, however, the committee estimates that the total packout would 
be reduced by only 1%. In addition, growers could adjust pruning, 
thinning, fertilizing, and irrigation techniques so that a larger 
percentage of kiwifruit would meet the higher size requirement.
    There is general agreement in the industry for the need to 
eliminate the packing of undersize fruit. Other alternatives have been 
suggested to eliminate shipments of low quality, undersized fruit, but 
would not adequately address the problem. One suggestion was to 
eliminate the blending of sizes by eliminating the size tolerances. 
This is not a realistic alternative, because as mentioned earlier, it 
would be cost prohibitive and impossible to achieve using today's 
packing methods.
    Another suggestion was to measure size by passing a fruit through a 
template with an opening large enough for an undersized fruit to fall 
through, but too small for a kiwifruit that meets the minimum size 
requirement to fall through. This template would be used to determine 
whether a fruit was undersized. However, this alternative does not take 
into consideration that kiwifruit grows in different shapes so that a 
heavier fruit that is short and broad could fall through a template 
while a lighter fruit that is long and narrow would not. Weight is 
currently used to measure size and is the most accurate measure of a 
kiwifruit's size.
    Another alternative presented at the meeting was to tighten the 
maturity requirements rather than the size standards so that 
undersized, immature fruit would not be shipped. However, not all 
undersized fruit is immature, but all undersized fruit is more 
susceptible to quality problems. Thus, this alternative would not fully 
address the problem of blending in undersized fruit of inferior 
quality.
    Finally, another alternative presented in the meeting was to 
establish Size 45 as the minimum size, but continue to define it as 57 
pieces of fruit instead of 55 pieces of fruit per 8-pound sample as 
recommended by the committee. However, because of the approximately 
0.12 ounce difference between a Size 45 kiwifruit defined as 57 pieces 
of fruit per 8-pound sample and a Size 49 kiwifruit defined as 60 
pieces of fruit per 8-pound sample, this alternative would not go far 
enough to prevent the blending of undersized fruit.
    Section 8e of the Act provides that when certain domestically 
produced commodities, including kiwifruit, 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 would increase the minimum size requirement under the 
domestic handling regulations, a corresponding change to the import 
regulations must also be considered.
    Minimum grade, size, quality, and maturity requirements for 
kiwifruit imported into the United States are currently in effect under 
Sec. 944.550 [7 CFR 944.550]. The minimum size requirement is specified 
in paragraph (a) of Sec. 944.550. This proposal would increase the 
minimum size requirement for imported kiwifruit from Size 49, which is 
defined as 60 pieces of fruit per 8-pound sample, to Size 45, which 
would be defined as 55 pieces of fruit per 8-pound sample.
    The increase in the minimum size requirement for importers of 
kiwifruit would also have a beneficial impact. This rule would 
eliminate quality problems associated with undersized imported 
kiwifruit as it would for undersized domestic kiwifruit. In addition, 
the domestic trade's preference for larger size kiwifruit applies to 
imported kiwifruit as well as domestic kiwifruit. Thus, importers would 
benefit by improving the overall quality of kiwifruit shipments and 
increasing sales.
    In accordance with section 8e of the Act, the United States Trade 
Representative has concurred with the issuance of this proposed rule.
    Based on the above, the Administrator of the AMS has determined 
that this action would not have a significant economic impact on a 
substantial number of small entities.
    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

7 CFR Part 920

    Kiwifruit, Marketing agreements.

7 CFR Part 944

    Avocados, Food grades and standards, Grapefruit, Grapes, Imports, 
Kiwifruit, Limes, Olives, Oranges.

    For the reasons set forth above, 7 CFR Parts 920 and 944 are 
proposed to be amended as follows:
    1. The authority citation for 7 CFR Parts 920 and 944 continues to 
read as follows:

    Authority: 7 U.S.C. 601-674.

PART 920--KIWIFRUIT GROWN IN CALIFORNIA

    2. In Sec. 920.302, paragraphs (a)(2) and (a)(4)(ii) are revised to 
read as follows:


Sec. 920.302  Grade, size, pack, and container regulations.

    (a) * * *
    (2) Size Requirements. Such kiwifruit shall be at least a minimum 
Size 45.
* * * * *
    (4) * * *
    (ii)(A) Kiwifruit packed in bags, volume fill or bulk containers 
may not vary more than \1/2\ inch (12.7 mm) in diameter if Size 30 or 
larger; not more than \3/8\ inch (9.5 mm) in diameter if Size 33, 36, 
39, or 42; and not more than \1/4\ inch in diameter (6.4 mm) if Size 
45. 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 
may fail to meet the requirements of this paragraph. The following 
table specifies the numerical size designation to be used in packing 
such containers as shown in Column 1, and the maximum number of fruit 
per 8-pound sample as shown in Column 2.

------------------------------------------------------------------------
                                                              Column 2, 
                                                               maximum  
                                                              number of 
        Column 1, numerical count size designation           fruit per 8-
                                                                pound   
                                                                sample  
------------------------------------------------------------------------
21.........................................................           22
25.........................................................           27
27/28......................................................           30
30.........................................................           32
33.........................................................           35
36.........................................................           40
39.........................................................           45
42.........................................................           50
45.........................................................          55 
------------------------------------------------------------------------

    (B) The average weight of all sample units in a lot must weigh at 
least 8 pounds, but no sample unit may be more than 4 ounces less than 
8 pounds.
* * * * *

PART 944--FRUITS; IMPORT REGULATIONS

    3. In Sec. 944.550, paragraph (a) is revised to read as follows:


Sec. 944.550  Kiwifruit import regulation.

    (a) Pursuant to section 8e of the Agricultural Marketing Agreement 
Act of 1937, as amended, the importation into the United States of any 
kiwifruit is prohibited unless such kiwifruit meets all the 
requirements of a U.S. No. 1 grade as defined in the United States 
Standards for Grades of Kiwifruit (7 CFR 51.2335 through 51.2340), 
except that the kiwifruit shall be ``not badly misshapen,'' and an 
additional tolerance of 7 percent is provided for kiwifruit that is 
``badly misshapen.'' Such fruit shall be at least Size 45, which means 
there shall be a maximum of 55 pieces of fruit and the average weight 
of all samples in a specific lot must weigh at least 8 pounds, provided 
that no individual sample may be less than 7 pounds 12 ounces.
* * * * *
    Dated: June 23, 1994.
Eric M. Forman,
Deputy Director, Fruit and Vegetable Division.
[FR Doc. 94-15721 Filed 6-28-94; 8:45 am]
BILLING CODE 3410-02-P