[Federal Register Volume 61, Number 43 (Monday, March 4, 1996)]
[Proposed Rules]
[Pages 8225-8227]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-4871]



 ========================================================================
 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. 43 / Monday, March 4, 1996 / Proposed 
Rules  

[[Page 8225]]


DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 916 and 917

[Docket No. FV95-916-5-PR]


Nectarines and Peaches Grown in California; Relaxation of Quality 
Requirements for Fresh Nectarines and Peaches

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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

SUMMARY: This proposed rule would relax, for the 1996 season only, the 
quality requirements for California nectarines and peaches. This 
proposal would establish a California Tree Fruit Agreement (CTFA) 
Utility quality requirement. California nectarines and peaches are 
currently subject to a minimum requirement of a modified U.S. No. 1 
grade. The CTFA Utility quality requirement would be the same as a U.S. 
No. 2 except that misshapened fruit and fruit with serious damage due 
to scarring would be permitted. This proposed rule would also require 
that containers of nectarines and peaches meeting the CTFA Utility 
quality requirement be clearly marked ``CTFA Utility.'' This proposed 
rule is intended to allow more nectarines and peaches into fresh market 
channels.

DATES: Comments must be received by April 3, 1996.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent 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. All 
comments should reference the docket number and the date and page 
number of this issue of the Federal Register and will be made available 
for public inspection at the office of the Docket Clerk during regular 
business hours.

FOR FURTHER INFORMATION CONTACT: Kenneth Johnson, Marketing Specialist, 
Marketing Order Administration Branch, Fruit and Vegetable Division, 
AMS, USDA, P.O. Box 96456, Room 2523-S, Washington, DC 20090-6456; 
telephone: (202) 720-2861; or Terry Vawter, Marketing Specialist, 
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.

SUPPLEMENTARY INFORMATION: This proposed rule is issued under Marketing 
Agreement and Marketing Order Nos. 916 and 917 [7 CFR Parts 916 and 
917] regulating the handling of nectarines and peaches grown in 
California, hereinafter referred to as the orders. The orders are 
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 proposed 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 the 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 action 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 about 300 California nectarine and peach handlers subject 
to regulation under the orders covering nectarines and peaches grown in 
California, and about 1,800 producers of these fruits in California. 
Small agricultural producers have been defined by the Small Business 
Administration [13 CFR 121.601] as those having annual receipts of less 
than $500,000, and small agricultural service firms are defined as 
those whose annual receipts are less than $5,000,000. A majority of 
these handlers and producers may be classified as small entities.
    The Department is proposing to establish, for the 1996 season only, 
a California Tree Fruit Agreement (CTFA) Utility quality requirement 
and a container marking requirement for shipments of fruit meeting CTFA 
Utility.
    Minimum grade requirements for fresh nectarines and peaches grown 
in California are in effect under Sec. 916.356 and Sec. 917.459, 
respectively. This rule would amend Secs. 916.356 and 917.459 by 
revising paragraph (a)(1) under each section, to permit shipments of 
fruit meeting CTFA Utility. CTFA Utility quality requirements are the 
same as the U.S. No. 2 grade requirements as set forth in the U.S. 
Standards for Grades of Nectarines [7 CFR 51.3145 through 51.3160] and 
the U.S. Standards for Grades of Peaches [7 CFR 51.1210 through 
51.1223], except that misshapened fruit and fruit with serious damage 
due to scarring would be permitted. All other applicable size and 
maturity requirements would remain in effect. CTFA Utility fruit would 
be inspected by the Federal-State Inspection Service as meeting the 
CTFA Utility quality requirements. CTFA 

[[Page 8226]]
Utility fruit would be subject to assessment and all other requirements 
of the orders. This rule would also amend Secs. 916.350 and 917.442 by 
adding a paragraph to each section to specify that each package or 
container of nectarines and peaches shipped, meeting the requirements 
of the newly established CTFA Utility quality requirements, must be 
conspicuously marked with the words ``CTFA Utility''.
    Shipments of California nectarines and peaches are subject to 
minimum grade, size, and maturity requirements under the provisions of 
Federal Marketing Orders 916 (section 916.356) during the period April 
1 through October 31 each year and 917 (section 917.459) during the 
period April 1 through November 23 each year. Currently, nectarine 
shipments are required to meet the requirements of U.S. No. 1 except 
less scarring is permitted than the U.S. No. 1 Grade but the tolerance 
for fruit not well formed is greater than the U.S. No. 1 Grade. 
Different minimum size requirements are in effect for different 
groupings of nectarine varieties. Currently peach shipments are 
required to meet the requirements of U.S. No. 1 Grade except there is 
an additional tolerance for fruit damage caused by open sutures. Also, 
different minimum size requirements are in effect for different 
groupings of peach varieties. Both the nectarine and peach regulations 
allow the shipment of fruit one size smaller than the specified minimum 
if the fruit meets higher maturity requirements. Both nectarine and 
peach shipments are subject to container, pack, and container marking 
requirements.
    Prior to the 1995 shipping season the Nectarine Administrative and 
Peach Commodity Committees (Committees) considered recommending a 
change in the nectarine and peach regulations to allow a utility grade 
for these fruits (Utility grade is a lower quality fruit than U.S. No. 
1). During the 1995 season, changes were made to allow use of the 
utility grade for California plums which are regulated under a State 
program. The plum utility grade was based on the California 
Agricultural Code requirements. The Committees voted not to recommend a 
utility grade for nectarines and peaches in the 1995 season. The 
Committees did, however, hire Dr. Dennis Nef, California State 
University, Fresno, to conduct a research project to study the impact 
of a utility grade for nectarines and peaches. The Committees also 
believed that the industry experiences from the plum utility grade 
would be helpful in making future recommendations for a utility grade 
for nectarines and peaches. The report prepared by Dr. Nef was 
presented to the Nectarine and Peach Grade and Size Subcommittees in 
October 1995. The report found that about 22 percent of the peaches 
sampled in packinghouse cull bins in 1995 would have met California 
agricultural code requirements. Of the nectarines sampled from 
packinghouse culls in that year, about 6 percent would have met 
California agricultural code requirements and an additional 14 percent 
failed marketing order quality requirements but would have met U.S. No. 
1 Grade (as indicated previously, the nectarine grade requirements 
under the marketing order permit less fruit scarring than allowed under 
U.S. No. 1). The report pointed out that these findings were based on a 
crop season which was marked by unusual crop and weather conditions. 
After reviewing the report, the nectarine and peach subcommittees voted 
to not recommend to the full Committees that a utility grade be 
implemented in 1996 for nectarines and peaches citing the unusual 
weather conditions that resulted in below normal crops. They believed 
that Dr. Nef's research project should be continued for another year to 
allow for the collection of data based on a more normal year.
    On November 29, 1995, the Department wrote to the Committees 
recommending that a utility grade be adopted for nectarines and peaches 
for the 1996 season beginning April 1, 1996. These Committees met on 
December 6-7, 1995, to discuss possible implementation of a utility 
grade for nectarines and peaches for the 1996 season. Committee members 
and others in attendance at the meetings expressed views in opposition 
to and in support of implementing a utility grade.
    Commenters in opposition to a utility grade for nectarines and 
peaches stated that the 1995 season was not a normal season for plums, 
nectarines, or peaches and should not be used as a basis for 
recommending a utility grade. They also said that the tree fruit 
industry is facing competition in both domestic and in foreign markets. 
One commenter stated that utility grade fruit would damage the 
reputation of California-produced tree fruit and another stated that 
poor quality California plums had been shipped to Hong Kong last year 
and that these plums had damaged the reputation of California plums. 
One commenter stated that allowing a utility grade would result in 
inspections of fruit which only serve to verify that the fruit in the 
container is poor quality. Others stated that lower quality fruit is 
not wasted and may be used for cattle feed. Another stated that the 
results of the recent grower referendum indicated support for the 
continuation of the program and the continuation of the quality 
standards.
    One commenter in support of a utility grade for nectarines stated 
that the implementation of a utility grade for plums in 1995 resulted 
in a $10 million increase in plum grower revenue. Commenters noted that 
less than 10 percent of the plum pack was utility grade. One commenter 
stated that while less than one percent of his organization's plum pack 
was utility grade, this lower grade should be available for use by 
nectarine and peach handlers if a market exists. Others commented that 
the Department had recommended a utility grade for nectarines and 
peaches for one year only--1996.
    Data on recent production of California nectarines and peaches in 
relation to season average producer prices appears to indicate that 
lesser quality fruit could be marketed successfully without interfering 
with sales of higher quality fruit. The limited quantity expected to be 
available would be expected to have a minimal effect on consumer 
purchases and season average producer prices for California nectarines 
and peaches. Sales of lesser quality fruit to a niche market could 
increase producer revenue and promote consumer satisfaction.
    The Department's proposal to implement the ``CTFA Utility'' quality 
requirement for the 1996 season would authorize fruit meeting this 
requirement to be shipped to market and provide actual information on 
consumer and retailer acceptability of such fruit. This information 
could then be used to supplement information collected by Dr. Nef and 
assist the respective industries in developing their quality 
requirements for the 1997 season.
    Based on the foregoing, the Department proposes that a utility 
grade for nectarines and peaches should be implemented on an 
experimental basis for the 1996 season. The Department proposes, for 
purposes of this regulation, to define ``CTFA Utility'' to mean fruit 
which meets the requirements of U.S. No. 2 Grade defined in the United 
States Standards for Grades of Nectarines (7 CFR 51.3145 through 
51.3160) and the United States Standards for Grades of Peaches (7 CFR 
51.1210 through 51.1223) except that misshapened fruit and fruit with 
serious damage due to scarring would be permitted.
    Committee members and others who commented at the December 6-7 
Committee meetings indicated that a niche market may exist for utility 
grade 

[[Page 8227]]
fruit and that the opportunity should be made available to market lower 
quality fruit to meet demand. This proposal could allow more fruit to 
be marketed.
    In order to prevent confusion in the marketplace and to clearly 
differentiate shipments of ``CTFA Utility'' fruit from better quality 
fruit, this proposal requires that containers of ``CTFA Utility'' fruit 
be conspicuously marked with the words ``CTFA Utility''. In addition, 
shipments of such fruit would be required to meet the same container, 
pack, and container marking requirements in effect for shipments of 
higher quality fruit.
    This proposed rule reflects the Department's appraisal of the need 
to revise the quality and container requirements for California 
nectarines and peaches as specified. The Department believes that this 
rule may have a beneficial impact on producers, handlers, and consumers 
of California nectarines and peaches.
    Based on available information, 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 these matters.

List of Subjects

7 CFR Part 916

    Marketing agreements, Nectarines, Reporting and recordkeeping 
requirements.

7 CFR Part 917

    Marketing agreements, Peaches, Pears, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR Parts 916 and 917 
are proposed to be amended as follows:

PART 916--NECTARINES GROWN IN CALIFORNIA

    1. The authority citation for 7 CFR Part 916 continues to read as 
follows:

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

    2. Section 916.350 is amended by adding a new paragraph (d) to read 
as follows:


Sec. 916.350  California Nectarine Container and Pack Regulation.

* * * * *
    (d) During the period April 1 through October 31, 1996, each 
container or package when packed with nectarines meeting CTFA Utility 
requirements, shall bear the words ``CTFA Utility'' marked on all 
containers and packages, along with all other required container 
markings, in letters of \3/4\ inch minimum height on the principal 
display panel. Consumer bags or packages must also be clearly marked on 
the bag or package as ``CTFA Utility'' along with other required 
markings.
    3. Section 916.356 is amended by revising paragraph (a)(1) to read 
as follows:


Sec. 916.356  California Nectarine Grade and Size Regulation.

    (a) * * *
    (1) Any lot or package or container of any variety of nectarines 
unless such nectarines meet the requirements of U.S. No. 1 grade: 
Provided, that nectarines 2 inches in diameter or smaller, shall not 
have fairly light colored, fairly smooth scars which exceed an 
aggregate area of a circle \3/8\ inch in diameter, and nectarines 
larger than 2 inches in diameter shall not have fairly light colored, 
fairly smooth scars which exceed an aggregate area of a circle \1/2\ 
inch in diameter: Provided further, That an additional tolerance of 25 
percent shall be permitted for fruit that is not well formed but not 
badly misshapen. Provided further, that, during the period April 1 
through October 31, 1996, any handler may handle nectarines if such 
nectarines meet CTFA Utility quality requirements. The term CTFA 
Utility means nectarines that have been inspected by the Federal or 
Federal-State Inspection Service and meet the requirements of the U.S. 
No. 2 grade as defined in the United States Standards for Grades of 
Nectarines [7 CFR 51.3145 through 51.3160], except that misshapened 
fruit and fruit with serious damage due to scarring would be permitted. 
The Federal or Federal-State Inspection Service shall make final 
determinations on maturity through the use of color guides or such 
other tests as determined appropriate by the inspection agency.
* * * * *

PART 917--FRESH PEARS AND PEACHES GROWN IN CALIFORNIA

    1. The authority citation for 7 CFR Part 917 continues to read as 
follows:

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

    2. Section 917.442 is amended by adding and reserving a new 
paragraph (c) and adding paragraph (d) to read as follows:


Sec. 917.442  California Peach Container and Pack Regulation.

* * * * *
    (d) During the period April 1 through November 23, 1996, each 
container or package when packed with peaches meeting CTFA Utility 
requirements, shall bear the words ``CTFA Utility'' marked on all 
containers and packages, along with all other required container 
markings, in letters of \3/4\ inch minimum height on the principal 
display panel. Additional consumer bags or packages must also be 
clearly marked on the bag or package as ``CTFA Utility'' along with 
other required markings.
    3. Section 917.459 is amended by revising paragraph (a)(1) to read 
as follows:


Sec. 917.459  California Peach Grade and Size Regulation.

    (a) * * *
    (1) Any lot or package or container of any variety of peaches 
unless such peaches meet the requirements of U.S. No. 1 grade: 
Provided, that an additional 25 percent tolerance shall be permitted 
for fruit with open sutures which are damaged, but not seriously 
damaged. Provided, that, during the period April 1 through November 23, 
1996, any handler may handle peaches if such peaches meet CTFA Utility 
quality requirements. The term CTFA Utility means peaches that have 
been inspected by the Federal or Federal State Inspection Service and 
meet the requirements of the U.S. No. 2 grade as defined in the United 
States Standards for Grades of Peaches [7 CFR 51.1210 through 51.1223], 
except that misshapened fruit and fruit with serious damage due to 
scarring would be permitted. The Federal or Federal-State Inspection 
Service shall make final determinations on maturity through the use of 
color chips or other tests as determined appropriate by the inspection 
agency.
* * * * *
    Dated: February 26, 1996.
Sharon Bomer Lauritsen,
Deputy Director, Fruit and Vegetable Division.
[FR Doc. 96-4871 Filed 3-1-96; 8:45 am]
BILLING CODE 3410-02-P