[Federal Register Volume 61, Number 29 (Monday, February 12, 1996)] [Notices] [Pages 5373-5375] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 96-2178] ----------------------------------------------------------------------- DEPARTMENT OF AGRICULTURE Food Distribution Program: Substitution of Donated Chicken with Commercial Chicken AGENCY: Food and Consumer Service, USDA. ACTION: Notice. ----------------------------------------------------------------------- SUMMARY: This notice announces the Food and Consumer Service's (FCS) intent to conduct a demonstration project to study the effects of allowing the substitution of donated chicken with commercial chicken in the State processing of donated chicken supplied by the Department of Agriculture (the Department). Under the demonstration project, FCS is invoking, in a final rule published elsewhere in this issue of the Federal Register, its authority under 7 CFR 250.30(t) to waive the current prohibition in 7 CFR 250.30(f)(1)(i) of the substitution of poultry and will establish the criteria under which substitution will be permitted. Only bulk pack chicken and chicken parts will be eligible for substitution. The Department will use the demonstration project results to examine whether permitting this type of substitution will result in increased processor participation and provide a greater variety of processed chicken end products to recipient agencies in a more timely manner at lower costs. DATES: The proposals described in this Notice may be submitted to FCS through June 30, 1997. ADDRESSES: Proposals should be sent to Ellen Henigan, Chief, Schools/ Institutions Branch, Food Distribution Division, Food and Consumer Service, U.S. Department of Agriculture, Park Office Center, Room 501, 3101 Park Center Drive, Alexandria, Virginia 22302-1594. FOR FURTHER INFORMATION CONTACT: Ursula Key, Schools/Institutions Branch, at (703) 305-2644. SUPPLEMENTARY INFORMATION: Executive Order 12866 This notice has been determined to be significant and was reviewed by the Office of Management and Budget under Executive Order 12866. Executive Order 12372 This program is listed in the Catalog of Federal Domestic Assistance under 10.550 and is subject to the provisions of Executive Order 12372, which requires intergovernmental consultation with State and local officials (7 CFR Part 3015, Subpart V and final rule-related notices published at 48 FR 29114, June 24, 1983 and 49 FR 22676, May 31, 1984). Regulatory Flexibility Act This action is not a rule as defined by the Regulatory Flexibility Act (5 U.S.C. 601-612) and is thus exempt from the provisions of that Act. Background Section 250.30 of the current Food Distribution Program regulations sets forth the terms and conditions under which distributing agencies, subdistributing agencies, and recipient agencies may enter into contracts with commercial firms for processing donated foods and prescribes the minimum requirements to be included in such contracts. Section 250.30(t) authorizes FCS to waive any of the requirements contained in 7 CFR Part 250 for the purpose of conducting demonstration projects to test program changes designed to improve the State processing of donated foods. Current Program Requirements The State processing regulations at Sec. 250.30(f)(1)(i) currently allow for the substitution of certain specified donated food items, with the exception of meat and poultry. Under the current regulations at Sec. 250.30(g), when donated meat or poultry products are processed [[Page 5374]] or when any commercial meat or poultry products are incorporated into an end product containing one or more donated foods, all of the processing is required to be performed in plants under continuous Federal meat or poultry inspection or continuous State meat or poultry inspection in States certified to have programs at least equal to the Federal inspection programs. In addition to Food Safety Inspection Service (FSIS) inspection, all donated meat and poultry processing must be performed under Agricultural Marketing Service (AMS) acceptance service grading. Currently, only a few poultry processors are participating in the State processing of donated foods. Processors have stated that the current policy which prohibits the substitution of donated chicken reduces the quantity of donated chicken they are able to accept and process during a given period. Chicken purchased by USDA for further processing is bulk chill packed. Processors must schedule production around deliveries of the donated chicken since it is a very highly perishable product. Some of the processors must schedule production around deliveries of donated chicken for up to 30 individual States. Vendors do not always deliver donated chicken to the processors as scheduled, causing delays in production of end products. These delays may be eliminated if the processors can substitute commercial chicken for donated chicken. Demonstration Project From February 1, 1996 to June 30, 1997, the Department will operate a demonstration project under which it will permit selected poultry processors to substitute commercial chicken for donated chicken in the State processing of donated chicken. Processors may submit proposals and be selected to participate in the demonstration project during this time. FCS is invoking, in a final rule published elsewhere in this issue of the Federal Register, its authority under 7 CFR 250.30(t) to waive the current prohibition in 7 CFR 250.30(f)(1)(i) of the substitution of poultry for purposes of this demonstration project. The demonstration project has been limited to bulk pack chicken and chicken parts only because such chicken lends itself readily to such a study. There are a number of reasons that this chicken is better than meat for purposes of this demonstration project. The definition of substitution in Sec. 250.3 requires any replacement of commercial product for donated food to be of the same generic identity and equal or better quality. With bulk pack chicken and chicken parts, these requirements can be met easily and quickly, but requirements for the substitution of meat would be more complicated. For example, the USDA specification for donated ground beef calls for quality assurance provisions and certification requirements such as: (1) Checking fresh chilled beef for condition prior to grinding; (2) a sampling program to determine if physchrotropic plate count levels exceed 100,000 bacteria per gram; (3) assuring removal of bone and trimming defects; (4) compliance with time and temperature requirements during processing and storing; and (5) compliance with fat content requirements. These requirements cannot be duplicated by many processors. Additionally, donated ground beef is delivered frozen for processing, so the need for quickly turning around the product is not as crucial as it is for bulk chilled chicken. On the other hand, the USDA specifications for donated bulk pack chicken and chicken parts are more easily met. Bulk pack turkey and turkey parts may be considered for inclusion in future demonstration projects since graders can easily determine if commercial turkey meets or exceeds the specifications for donated turkey. FCS is soliciting interested poultry processors to submit written proposals to participate in the demonstration project. The following basic requirements will apply to the demonstration project:As with the processing of donated chicken into end products, Agricultural Marketing Service (AMS) graders must monitor the processing of any substituted commercial chicken to ensure program integrity is maintained. Only bulk pack chicken and chicken parts delivered by USDA vendors to the processor will be eligible for substitution. No backhauled product will be eligible. (Backhauled product is typically cut-up frozen chicken parts delivered to schools which may be turned over to processors for further processing at a later time.) Commercial chicken substituted for donated chicken must be certified by an AMS grader as complying with all product specifications for the donated chicken. Substitution of commercial chicken may occur in advance of the actual receipt of the donated chicken by the processor. However, no substitution may occur before the notice to deliver for that processor is issued by USDA. Lead time between the purchase and delivery of donated chicken may be up to five weeks. Any variation between the amount of commercial chicken substituted and the amount of donated chicken received by the processor will be adjusted according to guidelines furnished by USDA. Any donated chicken not used in end products because of substitution must only be used by the processor in other commercial processed products and cannot be sold as an intact unit. The only regulatory provision or State processing contract term affected by the demonstration project is the prohibition on substitution of chicken (Sec. 250.30(f)(1)(i) of the regulations). All other regulatory and contract requirements remain unchanged and must still be met by processors participating in the demonstration project. The demonstration project will enable FCS to evaluate whether to amend program regulations to provide for the substitution of donated chicken with commercial chicken in the State processing program. Particular attention will be paid to whether such an amendment of the regulations would probably increase the number of processors participating, and whether it would probably increase the quantity of donated chicken that each processor accepts for processing. Further, FCS will attempt to determine whether the expected increase in competition and the expected increase in the quantity of donated chicken accepted for processing in fact enable processors to function more efficiently, producing a greater variety of processed chicken end products in a more timely manner at lower costs. Interested processors should submit a written proposal to FCS outlining how they plan to carry out the substitution while complying with the above conditions. The proposal must contain a step-by-step description of how production will be monitored and a complete description of the records that will be maintained for the commercial chicken substituted for the donated chicken as well as the disposition of the donated chicken delivered. All proposals will be reviewed by representatives of the Food Distribution Division of FCS and by representatives of AMS's Poultry Division's Commodity Procurement Branch and Grading Branch. Those companies selected for participation in the demonstration project will be required to enter into an agreement with FCS and AMS which authorizes the processor to substitute commercial bulk pack chicken or chicken parts in fulfilling any current or future State processing contracts during the demonstration project period. Participation in the demonstration [[Page 5375]] project will not ensure the processor will receive any State processing contracts. Dated: January 18, 1996. Ellen Haas, Under Secretary for Food, Nutrition, and Consumer Services. [FR Doc. 96-2178 Filed 2-9-96; 8:45 am] BILLING CODE 3410-30-U