[Federal Register Volume 61, Number 106 (Friday, May 31, 1996)]
[Rules and Regulations]
[Pages 27245-27247]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-13616]



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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service

7 CFR Part 925

[Docket No. FV95-925-1FIR]


Grapes Grown in a Designated Area of Southeastern California; 
Revision of Container Requirements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (Department) is adopting as a 
final rule, the provisions of an interim final rule with correction 
which added 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 efficient use of containers and helps handlers meet 
industry needs.

EFFECTIVE DATE: July 1, 1996.

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 final 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 final 
rule in conformance with Executive Order 12866.
    This rule has been reviewed under Executive Order 12778, Civil 
Justice Reform. This rule is not intended to have retroactive effect. 
This 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 to review the Secretary's 
ruling on the petition, provided an action 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 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 minority of handlers and producers are classified as 
small entities.
    This rule finalizes changes in the container requirements under the 
marketing order for grapes grown in designated areas of Southeastern 
California. This rule also finalizes a reduction in 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. 
These changes were unanimously recommended by the CDGAC.
    An interim final rule was issued on March 11, 1996, and published 
in the Federal Register (61 FR 11127, March 19, 1996), with an 
effective date of March 19, 1996. That rule amended Sec. 925.304 of the 
rules and regulations in effect under the order. That rule provided a 
30-day comment period which ended April 18, 1996. No comments were 
received. A correction document was issued on March 25, 1996, and 
published in the Federal Register (61 FR 14013, March 29, 1996). The 
document corrected amendatory language number 2 of the interim final 
rule.
    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,

[[Page 27246]]

materials, and pack of containers which may be used in the handling of 
grapes.
    Prior to the effective date of the interim final rule, Sec. 925.304 
(b)(2) of the regulations specified 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, 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 were required to meet a net weight 
requirement of 20 pounds.
    Section 925.304 (b)(1) of the regulations specified the dimensions 
of six containers that could be used by handlers of table grapes and 
authorized 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 the 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, 
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 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. 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.
    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, 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.
    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.
    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 have to 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.
    The 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.
    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 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 finalizing the interim final rule, which was published in 
the Federal Register (61 FR 11127, March 19, 1996) and corrected in the 
Federal Register (61 FR 14013, March 29, 1996) will tend to effectuate 
the declared policy of the Act.

List of Subjects in 7 CFR Part 925

    Grapes, Marketing agreements, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 925 is 
amended as follows:
    1. The authority citation for 7 CFR part 925 continues to read as 
follows:

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

[[Page 27247]]

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

    Accordingly, the interim final rule amending 7 CFR part 925 which 
was published at 61 FR 11127, March 19, 1996, and corrected at 61 FR 
14013, March 29, 1996, is adopted as a final rule.

    Dated: May 22, 1996.
Robert C. Keeney,
Director, Fruit and Vegetable Division.
[FR Doc. 96-13616 Filed 5-30-96; 8:45 am]
BILLING CODE 3410-02-P