[Federal Register Volume 61, Number 22 (Thursday, February 1, 1996)]
[Proposed Rules]
[Pages 3604-3605]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-2064]



 ========================================================================
 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. 61, No. 22 / Thursday, February 1, 1996 / 
Proposed Rules  

[[Page 3604]]


DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 920

[Docket No. FV95-920-4PR]


Kiwifruit Grown in California; Proposed Relaxation of Container 
Marking Requirements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would relax the container marking 
requirements for kiwifruit packed under the Federal marketing order for 
kiwifruit grown in California. This relaxation would reduce the number 
of kiwifruit containers required to be marked with the lot stamp 
number. This rule would reduce handling costs and provide more 
flexibility in kiwifruit packing operations.

DATES: Comments must be received by March 4, 1996.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be submitted in triplicate to the 
Docket Clerk, Fruit and Vegetable Division, AMS, USDA, P.O. Box 96456, 
room 2523-S, Washington, DC 20090-6456, or by facsimile at (202) 720-
5698. Comments should reference this 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, California Marketing 
Field Office, Marketing Order Administration Branch, Fruit and 
Vegetable Division, AMS, USDA, 2202 Monterey Street, suite 102B, 
Fresno, California 93721; telephone (209) 487-5901, Fax # (209) 487-
5906; or Charles Rush, Marketing Order Administration Branch, Fruit and 
Vegetable Division, AMS, USDA, P.O. Box 96456, room 2526-S, Washington, 
DC 20090-6456, telephone (202) 720-5127, 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 12778, 
Civil Justice Reform. This rule 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.
    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 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 65 handlers of California kiwifruit subject 
to regulation under the order and approximately 500 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. A majority of handlers and producers of California 
kiwifruit 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 all containers of kiwifruit 
shall be plainly marked with the lot stamp number corresponding to the 
lot inspection conducted by an authorized inspector, except for 
individual consumer packages and containers that are being directly 
loaded into a vehicle for export shipment under the supervision of the 
Federal or Federal-State Inspection Service.
    The Kiwifruit Administrative Committee (committee), the agency 
responsible for local administration of the marketing order, met on 
November 30, 1995, and recommended, by unanimous vote, to relax the 
container marking requirements by reducing the number of containers 
plainly marked with the lot stamp number from all containers to all 
exposed or outside containers of kiwifruit, but not less than 75 
percent of the total containers on a pallet.
    The marketing order authorizes under Sec. 920.52(a)(3) the 
establishment of container marking requirements. Section 920.303(d) of 
the rules and regulations outlines the lot stamp number container 
marking requirements for fresh kiwifruit packed under the order.
    The committee recommended relaxing the lot stamp number marking 
requirement because of changes in the produce retail industry. The 
committee anticipates that the current order language, which requires 
all containers 

[[Page 3605]]
to be plainly marked with the lot stamp number, would create a problem 
in the near future due to industry changes in container packaging 
configurations and pallet sizes. This relaxation would allow the 
industry flexibility for future pallet size and container 
configurations.
    Many products, outside the produce industry, are received by 
retailers on 48- by 40-inch pallets. The kiwifruit industry almost 
exclusively used the ``LA Lug'' container which fits on the 35-  x  42-
inch or 53- by 42-inch pallets until recent years. The ``LA Lug'' 
configuration does not create a center tier when stacked on these 
pallets. When kiwifruit shippers use 35- by 42-inch or 53- by 42-inch 
pallets, receivers must unload the pallets and restack the fruit on 
metric pallets, causing more damage to the fruit and more labor costs 
to the receiver. Because of retail buying patterns and the retail 
demand for operational consistency in pallet usage, the produce 
industry has been moving away from using the 35- by 42-inch or 53  x  
42 inch pallets and has been moving towards using a standard grocery-
industry metric pallet measuring 48- by 40-inches. The committee 
anticipates that the retail usage of the metric pallet will continue to 
increase because: (1) Retailer and handler trucking and transportation 
costs for produce stacked on metric pallets are less than for produce 
stacked on 35- by 42-inch and 53- by 42-inch pallets, (2) retailer 
labor and disposal costs are less when metric pallets are utilized, and 
(3) receiving areas are steadily being remodeled to handle metric 
pallets. In the 1995/1996 season, approximately one percent of the 
industry's 9.3 million trays equivalents were packed in ``shoe'' box 
containers. The ``shoe'' box container (12  x  20 inches) is one of two 
new containers which is stacked in eight columns on a 48- by 40-inches 
metric pallet, and is configured in a manner which leaves one side of 
each container exposed. The other container that fits on the metric 
pallet is the ``mum'' box container. The ``mum'' box container (13.3 
x  16 inches) is stacked nine columns on a pallet with the center 
column inaccessible to lot stamp numbering after the containers are 
placed on the pallet during block inspection. In block inspection, the 
inspection occurs after the pallets have been packed, strapped, and 
been placed in storage. In-line inspection is performed during the 
packing process, prior to palletization and storage.
    The industry's usage of block and in-line inspection methods is 
fairly evenly split with approximately 50 percent of the handlers using 
in-line inspection and 50 percent using block inspection. The majority 
of block inspections are conducted in the northern part of California 
while in-line inspections are conducted primarily in the southern part 
of California.
    The committee's recommendation to relax the container marking 
requirement would not significantly lower the number of containers 
being inspected or bearing the lot stamp number. Of the 81 containers 
stacked on a metric pallet during block inspection, nine containers 
(the center tier--approximately 11 percent of the pallet) would not be 
lot stamp numbered. The center tiers of all pallets would be randomly 
inspected by the Federal or Federal-State Inspection Service for all 
marketing order requirements. When the industry utilizes in-line 
inspection, both the ``shoe'' and ``mum'' containers are accessible to 
lot stamp number marking and inspection, as they are being stacked on 
the pallet.
    There is unanimous support in the industry to reduce the lot stamp 
number container marking requirement.
    Several other alternatives were suggested during the public 
meeting. One alternative discussed by the committee was to require all 
containers to continue to be lot stamp numbered. Maintaining the 
requirement for lot stamp numbers to be placed on all containers would 
increase handler labor costs, slow handler operations, increase handler 
restrapping costs, as well as increase inspection costs. It was the 
consensus of the committee that such a requirement would be cost 
prohibitive as each block-inspected pallet would have to be manually 
pulled apart to enable the lot stamp number to be placed on the nine-
column center tier containers.
    Another alternative suggested was to eliminate the block-inspection 
method and require all handlers to use the in-line inspection method. 
During in-line inspection, containers would be stamped with the lot 
stamp number prior to being stacked on the pallet. This would have a 
serious financial impact on the industry, especially among small 
growers and handlers, due to a large increase in inspection costs. This 
suggestion was unacceptable to the industry as it would be cost 
prohibitive and could force small growers and handlers out of business.
    Another alternative examined was to establish regulations 
prohibiting the use of any containers that would create an inaccessible 
center when stacked on pallets. This alternative was not acceptable as 
it would not allow the industry to make necessary container changes to 
meet changing retailer needs and would be an excessive restriction.
    This proposed rule, which would relax the lot stamp number 
requirement, would impact all handlers in the same manner and was 
viewed by the committee as the least restrictive and best solution. 
Relaxing the lot stamp number requirement would solve the problems 
caused by changes in pallet sizes and container configurations as well 
as spare the industry future financial hardship. It would allow the 
industry flexibility for future pallet size and container 
configurations.
    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 in 7 CFR Part 920

    Kiwifruit, Marketing agreements.

    For the reasons set forth in the preamble, it is proposed that 7 
CFR Part 920 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. 920.303, paragraph (d) is revised to read as follows:


Sec. 920.303  Container marking regulations.

* * * * *
    (d) All exposed or outside containers of kiwifruit, but not less 
than 75 percent of the total containers on a pallet, shall be plainly 
marked with the lot stamp number corresponding to the lot inspection 
conducted by an authorized inspector; except for individual consumer 
packages and containers that are being directly loaded into a vehicle 
for export shipment under the supervision of the Federal or Federal-
State Inspection Service.
* * * * *
    Dated: January 24, 1996.
Sharon Bomer Lauritsen,
Deputy Director, Fruit and Vegetable Division.
[FR Doc. 96-2064 Filed 1-31-96; 8:45 am]
BILLING CODE 3410-02-P