[Federal Register Volume 59, Number 200 (Tuesday, October 18, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-25668]


[[Page Unknown]]

[Federal Register: October 18, 1994]


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DEPARTMENT OF AGRICULTURE
7 CFR Part 981

[Docket No. FV94-981-2FIR]

 

Almonds Grown in California; Revision of the Definition of 
Inedible Kernel

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (Department) is adopting as a 
final rule, without change, the provisions of an interim final rule 
which revised the definition of inedible kernel established under the 
administrative rules and regulations of the Federal marketing order for 
California almonds. This revised definition of inedible kernel will 
better reflect handler processing capabilities and will be more 
equitable to growers and handlers. This rule is based on a unanimous 
recommendation of the Almond Board of California (Board), which is 
responsible for local administration of the order.

DATES: Effective on November 17, 1994.

FOR FURTHER INFORMATION CONTACT: Kathleen M. Finn, Marketing 
Specialist, Marketing Order Administration Branch, Fruit and Vegetable 
Division, AMS, USDA, Room 2523-S., P.O. Box 96456, Washington, DC 
20090-6456; telephone: (202) 720-1509, or fax (202) 720-5698, or Martin 
Engeler, Assistant Officer-in-Charge, California Marketing Field 
Office, Fruit and Vegetable Division, AMS, USDA, 2202 Monterey Street, 
Suite 102-B, Fresno, California 93721; (209) 487-5901, or fax (209) 
487-5906.

SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing 
Agreement and Order No. 981 [7 CFR Part 981], both as amended, 
regulating the handling of almonds grown in California. The marketing 
agreement and order are authorized by the Agricultural Marketing 
Agreement Act of 1937, as amended [7 U.S.C. 601-74], hereinafter 
referred to as the Act.
    The Department of Agriculture (Department) is issuing this rule in 
accordance with Executive Order 12866.
    This rule has been reviewed under Executive Order 12778, 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 requesting a modification of the order or to be exempted 
therefrom. A handler is afforded the opportunity for a hearing on the 
petition. After a 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 entry of the ruling.
    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Administrator of the Agricultural Marketing Service 
(AMS) has considered the economic impact of this final 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.
    There are approximately 115 handlers of almonds that are subject to 
regulation under the marketing order and approximately 7,000 producers 
in the regulated area. Small agricultural service firms have been 
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 are defined as those having annual receipts of less than 
$500,000. The majority of the almond producers and handlers may be 
classified as small entities.
    This rule finalizes the revision of the definition of inedible 
kernel in Sec. 981.408--Subpart--Administrative Rules and Regulations 
by excluding almond kernels, pieces, or particles of almond kernels 
with web and frass from being considered inedible almonds.
    The interim final rule was issued on July 28, 1994, and published 
in the Federal Register [59 FR 39417, August 3, 1994], with an 
effective date of August 3, 1994. That rule amended Sec. 981.408 of the 
rules and regulations in effect under the order. That rule provided a 
30-day comment period which ended September 2, 1994. No comments were 
received.
    The processing of almonds involves various steps taken by growers 
and handlers prior to shipment to market. In most situations, growers 
initially take their almonds to a huller/sheller operation where the 
hulls and shells are mechanically removed. The almonds are then 
delivered to a handler, who has the almonds inspected by the Federal-
State Inspection Service. The inspector determines the percentage of 
inedible almond kernels in a sample, as defined in Sec. 981.408. Based 
upon the inspection, growers are paid by the handlers for the 
marketable almonds in the lot.
    The quality control provisions of the marketing order are designed 
to provide procedures to remove inedible almonds from human consumption 
channels. Under this program, handlers incur a disposition obligation 
of inedible almonds, based on the inspection results. Section 981.442 
specifies that the weight of inedible kernels in excess of 1 percent of 
the inedible kernel weight in the lot determined by USDA constitutes 
the inedible disposition obligation. In order to meet this disposition 
obligation, handlers normally deliver packer pickouts, kernels rejected 
in blanching, pieces of kernel, meal accumulated in manufacturing, or 
other material to crushers, feed manufacturers, feeders or dealers in 
nut wastes on record with the Board as accepted users.
    In order to ensure that the inedible kernels are diverted to non-
human consumption channels, the Board maintains a list of approved 
accepted users, which includes feedlots and oil mills. Handlers notify 
the Board at least 72 hours prior to making delivery to an accepted 
user so the Board, at its option, can witness the disposition.
    Section 981.8 of the marketing order defines inedible kernel as 
meaning ``a kernel, piece, or particle of almond kernel with any defect 
scored as serious damage, or damage due to mold, gum, shrivel, or brown 
spot, as defined in the United States Standards for Shelled Almonds or 
which has embedded dirt not easily removed by washing.'' This section 
authorizes modification of the definition by the Board with the 
approval of the Secretary. Prior to the effective date of the interim 
final rule, the definition under Sec. 981.408 of the regulations 
defined an inedible kernel as ``a kernel, piece, or particle of almond 
kernel with any defect scored as serious damage, or damage due to mold, 
gum, shrivel, or brown spot, as defined in the United States Standards 
for Shelled Almonds or which has embedded dirt or other foreign 
material not easily removed by washing.'' Kernels or kernel pieces with 
any defect scored as serious damage were considered inedible kernels.
    Section 51.2130 of the U.S. Standards for Grades of Shelled Almonds 
defines serious damage as ``any defect which makes a kernel or piece of 
kernel unsuitable for human consumption, and includes decay, rancidity, 
insect injury and damage by mold.'' Section 51.2123 of the Standards 
defines ``insect injury'' to mean that ``the insect, web, or frass is 
present or there is definite evidence of insect feeding.''
    The way the definition was previously applied, web or frass was 
considered serious damage by insect injury and when present and noted 
on the incoming inspection, caused the almonds so affected to be 
classified as inedible. As stated previously, handlers pay their 
growers based on the percentage of marketable almonds in the lot. 
Handlers do not pay growers for almonds classified as inedible. Web and 
frass can be removed from the kernels or kernel pieces during normal 
processing, thus making them suitable for human consumption. Because 
handlers pay growers based on the marketable almonds in each lot prior 
to processing, growers were not compensated for any additional 
marketable almonds made available due to web or frass removal after 
processing.
    Handler's disposition obligations are based on the inedible kernel 
content found in the lot prior to processing. When the web and frass 
are removed during processing, those kernels become marketable, 
sometimes making it difficult to generate enough inedible almonds to 
meet the disposition obligation. In such cases, handlers have sometimes 
purchased a mixture of inedible almonds and foreign material such as 
hulls, shells, etc., mixed with almond meats from a hulling and/or 
shelling operation to satisfy their disposition obligation. It has been 
determined that the revision of the definition of inedible kernel will 
make it easier for handlers to meet their inedible obligations because 
the disposition obligations will more accurately reflect the inedible 
percentage determined by the incoming inspection. This rule will better 
address the intent of the quality control program.
    For these reasons, the Board and its Quality Control Committee 
developed plans to further revise the definition. As a result, the 
Board unanimously recommended on May 16, 1994, to revise the definition 
of inedible kernel to eliminate kernels with attached frass and webbing 
from being classified as insect injury and therefore, inedible. This 
rule will not affect the U.S. Standards for Grades of Shelled Almonds.
    This revision is expected to improve the quality control program by 
making the definition of inedible kernel better reflect handler 
processing capabilities and providing more equity for handlers and 
growers. It may also result in growers being paid for marketable 
almonds which are currently being scored as inedible on incoming 
inspections and may result in higher returns to growers.
    Based on the above, the Administrator of the AMS has determined 
that this final rule will not have a significant economic impact on a 
substantial number of small entities.
    After consideration of all relevant material presented, including 
the Board's recommendation, it is found that finalizing the interim 
final rule, without change, as published in the Federal Register (59 FR 
39419, August 3, 1994) will tend to effectuate the declared policy of 
the Act.

List of Subjects in 7 CFR 981

    Almonds, Marketing agreements, Nuts, Reporting and recording 
requirements.

    For the reasons set forth in the preamble, 7 CFR Part 981 is 
amended as follows:

PART 981--ALMONDS GROWN IN CALIFORNIA

    Accordingly, the interim final rule amending 7 CFR part 981, which 
was published at 59 FR 39419 on August 3, 1994, is adopted as a final 
rule without change.

    Dated: October 11, 1994.
Eric M. Forman,
Deputy Director, Fruit and Vegetable Division.
[FR Doc. 94-25668 Filed 10-17-94; 8:45 am]
BILLING CODE 3410-02-P