[Federal Register Volume 61, Number 54 (Tuesday, March 19, 1996)]
[Rules and Regulations]
[Pages 11127-11129]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-6348]



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DEPARTMENT OF AGRICULTURE
7 CFR Part 925

[Docket No. FV95-925-1IFR]


Grapes Grown in a Designated Area of Southeastern California; 
Interim Final Rule to Revise Container Requirements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule.

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SUMMARY: This rule adds two new containers to the list of containers 
authorized for use by table grape handlers regulated under the 
marketing order. This rule also reduces the minimum net weight of 
containers of California table grapes from 22 pounds to 20 pounds and 
for grapes packed in poly bags from 20 pounds to 18 pounds. The 
marketing order regulates the handling of table grapes grown in a 
designated area of Southeastern California. The marketing order is 
locally administered by the California Desert Grape Administrative 
Committee (CDGAC). This rule allows for more

[[Page 11128]]

efficient use of containers and helps handlers meet industry needs.

DATES: Effective on March 19, 1996; comments must be received by April 
18, 1996 will be considered prior to issuance of a final rule.

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: Charles L. Rush, Marketing Order 
Administration Branch, Fruit and Vegetable Division, AMS, USDA, P.O. 
Box 96456, room 2526-S, Washington, DC 20090-6456, telephone (202) 690-
3670; or Rose M. 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.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order 
No. 925 [7 CFR Part 925], as amended, regulating the handling of table 
grapes grown in a designated area of Southeastern 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 interim 
final rule in conformance with Executive Order 12866.
    This interim rule has been reviewed under Executive Order 12778, 
Civil Justice Reform. This rule is not intended to have retroactive 
effect. This interim final rule would 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 20 handlers of California table grapes 
subject to regulation under the order and approximately 80 table grape 
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 are classified as 
small entities.
    This action is in accordance with Sec. 925.52(a)(4) of the order. 
This section authorizes the Secretary to fix the size, capacity, 
weight, dimensions, markings, materials, and pack of containers which 
may be used in the handling of grapes.
    Currently, Sec. 925.304(b)(2) of the regulations specifies that the 
minimum net weight requirement for grapes in any container, except for 
containers containing grapes packed in sawdust, cork, excelsior, or 
similar packing material, or packed in bags or wrapped in plastic or 
paper, and experimental containers, shall be 22 pounds based on the 
average net weight of grapes in a representative sample of containers. 
Containers of grapes packed in bags or wrapped in plastic or paper 
prior to being placed in these containers are required to meet a net 
weight requirement of 20 pounds.
    Section 925.304(b)(1) of the regulations specifies the dimensions 
of six containers that may be used by handlers of table grapes and 
authorizes the use of other types and sizes of containers on an 
experimental basis.
    The CDGAC met on November 27, and December 4, 1995, and unanimously 
recommended changes in current container requirements. Specifically, 
the CDGAC recommended reducing the minimum net weight of containers 
from 22 to 20 pounds and for containers of grapes wrapped or packed in 
poly bags from 20 to 18 pounds, effective April 20, 1996. The CDGAC 
also unanimously recommended adding two new containers (38S, 12 x 20 
inches) and (38T, 13 \1/8\ x 15 \7/8\ inches) to the list of authorized 
containers. These changes are intended to improve the quality of grapes 
delivered to consumers and reduce handling costs.
    The genesis for discussion of revising containers used to pack 
grapes began about 6 years ago when the recyclability of packaging 
materials became of interest to consumers worldwide and then to 
retailers who bore the brunt of consumers' concern. In addition to the 
environmental concern expressed by consumers, retailers were concerned 
about the increasing costs of disposing of packing and shipping 
materials.
    Simultaneously, in an effort to differentiate themselves in the 
marketplace, many in the retail industry began demanding that grape 
growers provide custom packs. One customer wanted only a certain type 
of bag, another wanted only 5-kilo bags, another wanted bags with 
nothing printed on them, while yet another wanted a special store code.
    These kinds of demands from the retail and food service industry 
led to a great deal of packaging experimentation within the California 
grape industry. It also led to the realization that it had been 25 
years since there had been any quantifiable packaging research. The 
industry decided to take a critical look at grape packaging and 
determine if current practices were getting the product to the retailer 
and ultimately the consumer in the best possible condition; and if not, 
what changes needed to be made to improve delivery. Toward that end, 
the California Table Grape Commission funded a three-year research 
project designed to answer a simple question: what types of containers 
get grapes to the consumer in the best possible condition?
    Grapes are a fragile product. The current method of packing is a 
holdover from 25 years ago when grapes were sold at auctions and it was 
considered a marketing advantage to overpack the box so that when 
buyers looked at the box it was bulging with fruit. Too often though, 
what they did not see was the condition of the fruit inside; crushed,

[[Page 11129]]
split or falling off the stem. In addition, the standard lug box in use 
today was designed to fit railroad cars. Shipping grapes by rail car is 
a part of the industry's picturesque past.
    The study of table grape packaging was conducted by the University 
of California at Davis and the University of California at Kearney 
Agricultural Center at Parlier. The objective of the study was to 
develop knowledge concerning packaging that allows the movement of 
table grapes from the field to the consumer in the best possible 
condition.
    The study looked at multiple varieties of grapes grown in 
California, packed in cartons of a wide variety of materials, 
dimensions, and packing depths. The study monitored numerous shipments 
from the field to the grocery store. The conclusion of the study was 
that the California table grape industry should reduce the weight of 
its containers by 2 pounds in order to get the fruit delivered to 
consumers in the best possible condition. At the reduced weight, the 
damage to the grapes, particularly in terms of bruising, splitting and 
shattering, decreases. Table grapes of most varieties suffered 
considerable damage when packed at net weights of 22 or 23 pounds. The 
damage was reduced considerably when the pack weights were reduced to 
20 to 21 pounds.
    Thus, the CDGAC's recommendation to reduce the minimum net weight 
requirements is expected to result in higher quality grapes being 
offered to consumers. This should increase satisfaction, strengthen 
demand, and improve returns to growers and handlers.
    Currently, most grapes packed in California are palletized on 35- 
x 42-inch or 53- x 42-inch pallets prior to shipment. When received by 
wholesalers or retailers, the grapes are unloaded and restacked on 48- 
x 40-inch pallets. In response to these concerns by their customers, 
grape handlers are beginning to discontinue use of the 35- x 42- inch 
or 53- x 42-inch pallets.
    Grocery and wholesale warehouse operations use 48- x 40-inch 
pallets as the standard pallet for most products. The bulk of product 
sold at retail outlets (e.g., cereal, paper products, canned goods, 
etc.) are dry goods. These products are generally shipped on 48- x 40- 
pallets. Consequently, the distribution channel is set up to 
accommodate 48- x 40-inch pallets.
    Nonstandard pallets such as those used by grape handlers must be 
disposed of at the receivers' expense. However, with the use of 48- 
x 40-inch pallets, which can be recycled, there should be a reduction 
in expenses associated with pallets. The recycling program allows the 
receiver to use the pallet more than once or remove it from the waste 
stream to use or sell.
    These changes in container requirements are supported by the 
California Department of Agriculture, the California Grape and Tree 
Fruit League, the California Table Grape Commission, the Food Marketing 
Institute, and the National Association of Perishable Agricultural 
Receivers. These organizations have all agreed that the reduction in 
net weight is necessary to facilitate the implementation of an 
industry-wide adoption of the standardized 48- x 40-inch pallet and the 
incidence of damage to fruit due to over packing.
    Through the research conducted the CDGAC determined that other 
container size and net weight options available were not in the best 
interest of the industry. Further, wholesalers and retailers support 
the recommended changes, and believe it is the best option.
    Thus, this rule allows the industry to use more efficient 
containers and provides handlers with more flexibility in packing table 
grapes. Imported table grapes will not be affected by this rule.
    Based on the above, the Administrator of the AMS has determined 
that this action will not have a significant economic impact on a 
substantial number of small entities.
    After consideration of all relevant material presented, including 
the CDGAC's recommendation, and other available information, it is 
found that this interim final rule, as hereinafter set forth, will tend 
to effectuate the declared policy of the Act.
    Pursuant to 5 U.S.C. 553, it is also found and determined, upon 
good cause, that it is impracticable, unnecessary and contrary to the 
public interest to give preliminary notice prior to putting this rule 
into effect, and that good cause exists for not postponing the 
effective date of this rule until 30 days after publication in the 
Federal Register because: (1) This action relaxes handling requirements 
currently in effect for table grapes grown in designated areas of 
Southeastern California; (2) California table grape handlers are aware 
of this action which was unanimously recommended by the CDGAC at a 
public meeting, and they will need no additional time to comply with 
the relaxed requirements (since they have the option of continuing to 
use previously approved containers; (3) California table grape 
shipments begin approximately April 20, 1996, and this rule needs to be 
in effect as soon as possible; and (4) this rule provides a 30-day 
comment period and any comments received will be considered prior to 
finalization of this rule.

List of Subjects in 7 CFR Part 925

    Grapes, Marketing agreements and orders, reporting and 
recordkeeping requirements.

    For the reasons set forth in the preamble, 7 CFR part 925 is 
amended to read as follows:

PART 925--GRAPES GROWN IN A DESIGNATED AREA OF SOUTHEASTERN 
CALIFORNIA

    1. The authority citation for 7 CFR part 925 continues to read as 
follows:

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

    2. In Sec. 925.304, paragraph (b)(2) is revised and paragraphs 
(b)(1)(vi) and (b)(1) (vii) are redesignated as paragraphs (b)(1)(vii) 
and (vii) and new paragraphs (b)(1) (vi) and (vii) are added to read as 
follows:


Sec. 925.304  California Desert Grape Regulation 6.

* * * * *
    (b) * * *
    (1) * * *
    (vi) Grape lug with dimensions in inches of 5 to 9 inches (inside) 
x  11\11/16\ to 12 (outside) x 19\11/16\ to 20 (outside), specified as 
container 38S;
    (vii) Grape lug with dimensions in inches of 6\5/8\ to 7\1/2\ 
(inside)  x  13\1/8\ (outside)  x  15\7/8\ (outside), specified as 
container 38T;
* * * * *
    (2) The minimum net weight of grapes in any such containers, except 
for containers containing grapes packed in sawdust, cork, excelsior or 
similar packing material, or packed in bags or wrapped in plastic or 
paper, and experimental containers, shall be 20 pounds based on the 
average net weight of grapes in a representative sample of containers. 
Containers of grapes packed in bags or wrapped in plastic or paper 
prior to being placed in these containers shall meet a minimum net 
weight requirement of 18 pounds.
* * * * *
    Dated: March 11, 1996.
Eric M. Forman,
Deputy Director, Fruit and Vegetable Division.
[FR Doc. 96-6348 Filed 3-18-96; 8:45 am]
BILLING CODE 3410-02-P