[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]



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DEPARTMENT OF AGRICULTURE

Food Distribution Program: Substitution of Donated Chicken with 
Commercial Chicken

AGENCY: Food and Consumer Service, USDA.

ACTION: Notice.

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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