[Federal Register Volume 62, Number 6 (Thursday, January 9, 1997)]
[Rules and Regulations]
[Pages 1239-1246]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-449]



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  Federal Register / Vol. 62, No. 6 / Thursday, January 9, 1997 / Rules 
and Regulations  

[[Page 1239]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 932 and 944

[Docket No. FV96-932-2 FR]


Olives Grown in California and Imported Olives; Establishment of 
Minimum Quality Requirements for California and Imported Olives, and 
Revision of Outgoing Inspection Requirements and Procedures for 
California Olives

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

SUMMARY: This final rule establishes minimum quality requirements for 
California olives under Marketing Order 932 and imported olives by 
replacing grade requirements which have been based on the U.S. 
Standards for Grades of Canned Ripe Olives (standards). This final rule 
also revises outgoing inspection requirements and procedures for 
California olives. This action is expected to result in reduced 
handling costs, especially inspection costs, and improved consumer 
satisfaction.

EFFECTIVE DATES: This final rule becomes effective January 13, 1997.

FOR FURTHER INFORMATION CONTACT: Terry Vawter, Marketing Specialist, 
California Marketing Field Office, Marketing Order Administration 
Branch, F&V, AMS, USDA, 2202 Monterey Street, suite 102B, Fresno, 
California 93721; telephone (209) 487-5901; Fax # (209) 487-5906; or 
Caroline Thorpe, Marketing Specialist, Marketing Order Administration 
Branch, F&V, AMS, USDA, room 2522-S, P.O. Box 96456, Washington, DC. 
20090-6456; telephone (202) 720-8139; Fax # (202) 720-5698. Small 
businesses may request information on compliance with this regulation 
by contacting: Jay Guerber, Marketing Order Administration Branch, 
Fruit and Vegetable Division, AMS, USDA, P.O. Box 96456, room 2525-S, 
Washington, DC 20090-6456; telephone (202) 720-2491; Fax # (202) 720-
5698.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order 
No. 932 (7 CFR part 932), as amended, regulating the handling of olives 
grown in 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.''
    This final rule is also issued under section 8e of the Act, which 
provides that whenever certain specified commodities, including olives, 
are regulated under a Federal marketing order, imports of these 
commodities into the United States are prohibited unless they meet the 
same or comparable grade, size, quality, or maturity requirements as 
those in effect for the domestically-produced commodities.
    The Department of Agriculture (Department) is issuing this final 
rule in conformance with Executive Order 12866.
    This final rule has been reviewed under Executive Order 12988, 
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.
    There are no administrative procedures which must be exhausted 
prior to any judicial challenge to the provisions of import regulations 
issued under section 8e of the Act.
    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), 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. Import regulations issued under 
the Act are based on those established under Federal marketing orders.
    There are 4 handlers of olives who are subject to regulation under 
the order, and approximately 1,350 producers of olives in the regulated 
area. There are approximately 25 importers of olives subject to the 
olive import regulation. Small agricultural service firms, which 
includes handlers and importers, have been defined by the Small 
Business Administration (13 CFR 121.601) as those having annual 
receipts of less than $5,000,000, and small agricultural producers are 
defined as those having annual receipts of less than $500,000. None of 
the handlers is considered a small entity, but the majority of olive 
producers and some of the importers may be classified as small 
entities.
    The California Olive Committee (committee) met on March 27, 1996, 
and unanimously recommended establishing minimum quality requirements 
to be incorporated within the rules and regulations of the order and 
revising outgoing inspection requirements and procedures. At a meeting 
on July 10, 1996, the committee recommended a change in their 
recommendations of March 27, 1996, with regard to an outgoing 
inspection requirement.
    Incoming inspection requirements at Sec. 932.51 require handlers to 
weigh and size-grade olives prior to processing, and dispose of non-
canning size (undersized) olives into appropriate non-canning outlets. 
Such weighing and size-grading is done under the

[[Page 1240]]

supervision of the Federal or Federal-State Inspection Service. These 
requirements provide the basis for handler payments to producers, and 
ensure that olives are properly sized into the various canning and non-
canning size categories.
    Once the olives have been size-graded, they are stored in tanks, 
ensuring that the various sizes of olives remain segregated. Non-
canning size olives are disposed of into appropriate outlets, such as 
in frozen or acidified forms, or crushed for oil.
    Outgoing inspection requirements at Sec. 932.52 and Sec. 932.149 
specify the minimum quality of canned ripe olives as a modified U.S. 
Grade C as certified by inspectors of the USDA, Processed Products 
Branch (PPB). Certification as to grade provides handlers and their 
customers with a uniform level of quality familiar to both parties. The 
outgoing inspection requirements also ensure that canned ripe olives 
meet applicable size designations prior to shipment. Two methods of 
outgoing inspection are authorized: A Quality Assurance Program (QAP) 
approved by the PPB or in-line inspection.
    This rule adds the option of lot inspection to assist handlers in 
reducing inspection costs. Currently, during in-line inspection, an 
inspector is required to be present any time olives are in the final 
stage of processing prior to packaging. The current cost for an 
inspector ranges from $31.50 per hour for handlers in California under 
the marketing order to $42.00 per hour depending on the contract. For 
an 8-hour day, the cost of one inspector ranges from $252.00 to 
$328.00. Because of this, handlers may benefit from economies of scale: 
the more canned olives packaged, the lower the cost per can of olives.
    In 1994, QAPs were added as an option to reduce inspection costs. 
Under QAPs, savings are more likely to accrue to larger-volume 
handlers, who are more likely to have sufficient olives to operate 
year-round and realize savings by employing trained quality-control 
personnel. When there is a large crop, more handlers may benefit from 
QAPs for similar reasons.
    Adding lot inspection offers handlers a less-costly inspection 
option. During lot inspection, an inspector does not need to be present 
during the final processing, unlike in-line inspection. However, an 
inspector will inspect a statistical percentage of a lot of olives 
whether the lot is large or small. Thus, there is less benefit of 
economies of scale because for large lots more olives will be inspected 
and for small lots fewer olives will be inspected.
    The committee recommended changes in some of the inspection 
requirements to reduce handlers' costs, especially the costs of 
inspection, and to address the concerns of consumers of canned ripe 
olives. The changes simplify the inspection process by eliminating 
steps which have been made unnecessary by modern olive processing and 
pitting equipment. This can reduce handling costs, including inspection 
costs, thereby improving returns to California producers and handlers.
    The changes address consumer concerns, as identified through a 1995 
consumer survey which the committee undertook. Surveyed consumers 
indicated that flavor, color, and character are quality criteria most 
important to them. The term ``character'' is used to include olive 
firmness, tenderness and texture. The changes address consumer concerns 
by evaluating quality based upon those criteria. This will help ensure 
that consumer satisfaction is met, benefitting the California olive 
industry, importers, and consumers.
    Therefore, the AMS has determined that this action would not have a 
significant economic impact on a substantial number of small entities. 
Interested persons are invited to submit information on the regulatory 
and informational impacts of this action on small businesses.

Establishment of Minimum Quality Requirements

    Currently, Sec. 932.149 specifies that canned olives meet a minimum 
grade requirement of a modified U.S. Grade C. Additional specific 
requirements are established for the various styles of canned ripe 
olives, including whole, pitted, broken pitted, halved, segmented 
(wedged), sliced, and chopped styles. Section 932.149 references 
various definitions from the standards.
    In place of these grades and definitions, the committee recommended 
a set of minimum quality requirements for four styles of canned olives: 
(1) Whole and pitted style olives; (2) sliced, segmented (wedged), and 
halved style olives; (3) chopped style olives; and (4) broken pitted 
olives. These quality requirements include criteria pertaining to 
flavor, saltiness, color, character, uniformity of size and freedom 
from defects. These factors are similar to those currently specified in 
the standards and handling regulations, and have been determined to be 
of importance to consumers through the committee's consumer survey.
    Olives are currently graded based upon five factors: flavor, 
saltiness, color, character, and defects. Currently, Table I in 
Sec. 932.149 only sets limits for defects of canned ripe olives. Limits 
for the other four factors, flavor, saltiness, color, and character, 
are defined in the standards. In place of Table I, based upon 
information from the 1995 consumer survey, the committee recommended 
establishing four new tables which would specify the limits for defects 
for each of the canned ripe olive styles (whole and pitted styles; 
sliced, segmented (wedged), and halved styles; chopped style; and 
broken pitted style). The new tables also define the limits of the four 
characteristics (flavor, saltiness, color, and character) currently 
defined in the standards. The four new tables provide all the 
definitions and tolerances necessary to establish minimum quality 
requirements in place of grade requirements.
    To effectuate the establishment of minimum quality requirements, 
references to ``grade'' in Sec. 932.149 will be replaced with 
``quality'', canned broken pitted olives will be defined separately in 
a new paragraph designated as (a)(4), and four new tables depicting 
minimum quality requirements for (1) canned whole and pitted olives; 
(2) canned sliced, segmented (wedged), and halved olives; (3) canned 
chopped style olives; and (4) canned broken pitted style olives will be 
added to Sec. 932.149, replacing the current Table 1.
    In conforming changes, the word ``grade'' will be replaced with the 
words ``minimum quality'' or ``minimum quality requirements,'' as 
necessary, in Sec. 932.150,Sec. 932.152, Sec. 932.153, and 
Sec. 932.155.
    Section 932.149(a)(2) currently sets the tolerance for identifiable 
pieces of pit caps, end slices, and slices at 5 percent, by weight, for 
canned chopped style olives. The committee recommended a relaxed 
tolerance of 10 percent, by weight, in an effort to encourage handlers 
to cut olives of the chopped style in larger pieces. The committee was 
concerned that canned chopped style olives are currently chopped too 
finely, rendering the product nearly an olive ``flour'' rather than 
identifiable pieces of olives consumers indicated they preferred. This 
change will reduce the costs of packing canned chopped style olives.
    The committee recommended that the definition of ``broken pitted'' 
olives be modified from the definition provided in the standards. To 
accomplish this, the committee proposed a modified definition in 
Sec. 932.149 of the regulations. The current definition is considered 
too restrictive by the committee. Under the current definition, broken 
pitted olives are

[[Page 1241]]

defined as ``olives [which] consist substantially of large pieces that 
may have been broken in pitting but have not been sliced or cut.'' 
Currently, each handler packing broken pitted olives is prohibited from 
using olives which have been improperly pitted but unbroken because the 
olives have not been ``broken'' in the pitting process. (Improperly 
pitted olives do not contain pits or pit fragments.) Each such handler, 
therefore, pays an employee to ``break'' the unbroken, improperly 
pitted olives so that such olives meet the requirement for broken 
pitted olives. As recommended by the committee, the definition for 
broken pitted olives deletes the word ``substantially,'' thereby 
permitting a greater percentage of unbroken, improperly pitted olives 
to be included in the broken pitted style category. Such change is 
intended to reduce the costs of packing broken pitted olives while 
maintaining the quality of the product.
    The committee further recommended basing outgoing inspections on a 
pass-fail basis, eliminating the requirement that the inspection 
service certify that canned ripe olives are either Grade A, Grade B, or 
Grade C. Under a pass-fail outgoing inspection, canned ripe olives 
either meet the minimum quality requirements and pass inspection, or 
fail to meet the minimum quality requirements and not pass inspection. 
There will be no need to calculate the grade of each sample in order to 
assign Grade A, Grade B, or Grade C. Elimination of the requirement to 
certify to a grade will simplify the inspection of such olives, thereby 
reducing inspection time and overall inspection costs.

Authorized Methods of Outgoing Inspection

    Pursuant to Sec. 932.52 of the order and Sec. 932.152 of the 
current outgoing regulations, handlers are required to maintain 
continuous in-line outgoing inspection or a certified QAP. Under 
continuous in-line outgoing inspection, at least one inspector must be 
present at all times when a plant is in operation to make in-process 
checks on the preparation, processing, packing, and warehousing of all 
products. The current cost for an inspector ranges from $31.50 for 
handlers under the marketing order to $42.00 per hour depending on the 
contract. For an 8-hour day the cost of one inspector ranges from 
$252.00 to $328.00.
    By contrast, under a QAP, each certified plant has trained quality-
control personnel who perform most of the same functions as a PPB 
inspector. The PPB inspectors continue to issue certificates of 
inspection based upon the outgoing inspection records maintained by the 
certified quality-control personnel. These records are verified through 
spot-checks and samples taken by PPB inspectors.
    A QAP may decrease outgoing inspection costs for a handler compared 
to inspection costs under continuous in-line outgoing inspection. 
However, cost savings under a QAP accrue more to larger-volume 
handlers, who are more likely to have sufficient olives to operate 
year-round and realize savings by employing trained quality-control 
personnel. When there is a large crop, more handlers may benefit from a 
QAP for similar reasons. However, olive crop sizes may vary 
substantially from one year to the next due to the alternate-bearing 
characteristics. This variability further reduces the efficiency of 
operations at most of the olive processing plants and the cost-savings 
of QAP, since handlers' fixed costs must be paid independent of the 
size of the crop.
    To enable handlers to minimize their inspection costs, the 
committee recommended that handlers be allowed to utilize any 
inspection method permitted by PPB, so that each may choose the method 
most economical for their operations. Thus, in addition to a QAP and 
in-line inspection, lot inspection will also be authorized for meeting 
outgoing inspection requirements. Under lot inspection, a specified 
number of containers of the same size and type, containing olives of 
the same type and style, at the same location, are inspected. Lot 
inspection occurs after processing, rather than during processing. 
Inspecting by lot has the potential to reduce costs for handlers 
because lot inspection does not require the presence of an inspector at 
all times while olives are being processed.
    To effectuate this change, paragraphs (a) and (b)(1) of 
Sec. 932.152, Outgoing regulations, are revised to add authority for 
handlers to use either continuous in-line outgoing inspection, QAP, or 
lot inspection. Because lot inspection does not require the presence of 
an inspector at all times during the processing of olives, paragraph 
(b)(1) is revised by deleting the final sentence, thereby removing the 
requirement that an inspector be present when olives are processed. 
This change is expected to reduce overall inspection costs by 
eliminating overtime hours which accrue when an inspector is required 
to remain in an olive processing plant at all times while processing is 
underway.

Outgoing Inspection for Size of Canning-Size Olives

    The committee also recommended revising the current requirements 
that canning-size olives, which have been sized and stored in tanks 
prior to pitting, be inspected for size prior to packaging. Currently, 
such olives are required under incoming inspection requirements to be 
weighed and size-graded. Olives are then stored in tanks prior to 
processing. The outgoing requirements mandate that such olives be 
submitted for size inspection prior to packaging. However, handlers 
size olives upon receipt and keep the sizes separate throughout the 
packaging process because doing so facilitates more efficient operation 
of modern processing and pitting equipment. Eliminating the requirement 
for inspection for size prior to packaging will simplify the inspection 
process and reduce overall inspection costs while maintaining the 
integrity and quality of canned ripe olives.
    To effectuate this change, paragraph (b)(2) of Sec. 932.152 is 
deleted. This deletion necessitates the redesignation of paragraph 
(b)(1) as (b).
    However, olives which are smaller than authorized for use as canned 
ripe olives (undersized olives) will still be held under surveillance 
by the inspection service, as required in the incoming inspection 
requirements and specified in paragraph (e)(2) of Sec. 932.151, since 
handlers must dispose of such olives into appropriate outlets, such as 
in frozen or acidified forms, or crushed for oil.

Outgoing Inspection for Size of Limited-Use Olives

    Section 932.152, paragraphs (g)(1) and (g)(2), of the current 
outgoing regulations specify that olives used in the production of 
limited-use styles are not required to be submitted for an outgoing 
inspection for size prior to packaging if they were size-graded by the 
inspection service during the incoming inspection process. Limited-use 
styles include halved, segmented (wedged), sliced, or chopped styles. 
Typically, smaller olives may be used for limited-use styles rather 
than for whole styles.
    According to the requirements of Sec. 932.51(a)(ii) of the order, 
canning size olives are sized by the inspection service during the 
incoming inspection process. The olives are then either placed in 
storage tanks or sent immediately to processing.
    Olives process more efficiently when all the olives in the 
processing tank are uniform in size. Modern, high-speed

[[Page 1242]]

pitting equipment produces higher yields and inflicts less damage to 
olives when the sizes being pitted are uniform. This is especially true 
for the smaller canning sizes. Currently, over 95 percent of all olives 
are pitted prior to packaging.
    Olive handlers have an additional incentive to maintain strict 
control over various sizes of olives--retail customers' demands for 
uniform size and quality.
    For those reasons, the committee recommended changes in 
Sec. 932.152, paragraphs (g)(1) and (g)(2) to eliminate the requirement 
for inspection for size prior to packaging.
    To effectuate the change, the words ``without an outgoing 
inspection for size designation'' are deleted from Sec. 932.152, 
paragraphs (g)(1) and (g)(2).
    These changes establish minimum quality requirements of flavor, 
saltiness, color, character, and defects for whole and pitted style 
olives; sliced, segmented (wedged), and halved style olives; chopped 
style olives; and broken pitted style olives. They also revise outgoing 
inspection requirements and procedures under the marketing order by 
eliminating requirements that sized and stored olives be submitted for 
sizing prior to packaging, and permitting lot inspection. These 
revisions eliminate requirements no longer deemed necessary, thereby 
reducing handling costs, while maintaining quality and size 
requirements needed to ensure customer satisfaction.
    This rule also changes Sec. 932.153 (as amended in the Federal 
Register on August 5, 1996, 61 FR 40507), which specifies current 
minimum grade and size requirements for limited use olives. All 
references to ``grade'' in that section are replaced by the words 
``minimum quality'' or ``minimum quality requirements,'' as necessary.

Olive Import Requirements

    Section 8e of the Act requires that whenever grade, size, quality, 
or maturity requirements are in effect for olives under a domestic 
marketing order, imported olives must meet the same or comparable 
requirements. This rule establishes minimum quality requirements to 
replace current minimum grade requirements for California olives under 
the marketing order. Therefore, a corresponding change is made in the 
olive import regulation.
    This rule modifies paragraphs (a)(8), (b)(1), (g), and (j) of 
Sec. 944.401 by deleting certain references to the standards and adding 
specific quality criteria for imported olives which are the same as 
those for California olives.
    The proposed rule concerning this action was published in the 
November 8, 1996, Federal Register (61 FR 57782), with a 15-day comment 
period ending November 25, 1996. No comments were received.
    Although no comments were received, the Department is making 
several changes in the regulatory text that appeared in the proposed 
rule for purposes of clarification.
    In tables 1 through 4 of sections 932.149 and 944.401, with respect 
to color criteria, the proposed rule stated, in part, that olives must 
have ``a color equal or darker than the comparator.'' This rule 
replaces the word ``comparator'' with the term ``USDA Composite Color 
Standard.'' This is a more precise term for the standard used to 
determine the appropriate color of olives, and does not materially 
affect the color requirement. In table 1 of those same two sections, 
with respect to pits and pit fragments, the allowance of ``Not more 
than 1.3 average by count'' is changed to read ``Not more than 1.3% by 
count.'' This is a clarifying change.
    In section 932.152(c)(2)(xi), the word ``standard'' is replaced by 
the word ``quality.'' This is a more accurate word.
    Finally, a paragraph (5) is added to section 932.149(a) and a 
paragraph (v) is added to section 944.401(b) to provide a tolerance for 
olives that do not meet the quality criteria set forth in those 
sections. Absent such tolerances, one failed unit would result in an 
entire lot failing to meet the specified quality requirements. The 
tolerances specified are those that appear in the standards and that 
are currently used by the olive industry. The proposed rule did not 
contain such tolerances. Adding these provisions to the final rule 
corrects this oversight.
    In accordance with section 8e of the Act, the U.S. Trade 
Representative has concurred with the issuance of this proposed rule.
    After consideration of all relevant matter presented, including the 
information and recommendations submitted by the Committee and other 
available information, it is hereby found that this rule, as 
hereinafter set forth, will tend to effectuate the declared policy of 
the Act.
    It is further found that good cause exists for not postponing the 
effective date of this rule until 30 days after publication in the 
Federal Register (5 U.S.C. 553) because this rule should be implemented 
as soon as possible since the crop year for olives grown in California 
began on August 1, 1996, and olives from the 1996 crop are already 
being processed and shipped. Further, handlers are aware of this rule, 
which was recommended at two public meetings. Additionally, interested 
parties had the opportunity to comment on the proposed rule, and no 
comments were received.

List of Subjects

7 CFR Part 932

    Marketing agreements, Olives, Reporting and recordkeeping 
requirements.

7 CFR Part 944

    Avocados, Food grades and standards, Grapefruit, Grapes, Imports, 
Kiwifruit, Limes, Olives, Oranges.

    For the reasons set forth in the preamble, 7 CFR parts 932 and 944 
are amended as follows:
    1. The authority citation for 7 CFR parts 932 and 944 continues to 
read as follows:

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

PART 932--OLIVES GROWN IN CALIFORNIA

    2. Section 932.149 is revised to read as follows:


Sec. 932.149  Modified minimum quality requirements for specified 
styles of canned olives of the ripe type.

    (a) Except as otherwise provided in this section, the minimum 
quality requirements prescribed in Sec. 932.52(a)(1) are modified as 
follows, for specified styles of canned olives of the ripe type:
    (1) Canned whole and pitted olives of the ripe type shall meet the 
minimum quality requirements as prescribed in Table 1 of this section;
    (2) Canned sliced, segmented (wedged), and halved olives of the 
ripe type shall meet the minimum quality requirements as prescribed in 
Table 2 of this section;
    (3) Canned chopped olives of the ripe type shall meet the minimum 
quality requirements as prescribed in Table 3 of this section; and 
shall be practically free from identifiable units of pit caps, end 
slices, and slices (``practically free from identifiable units'' means 
that not more than 10 percent, by weight, of the unit of chopped style 
olives may be identifiable pit caps, end slices, or slices); and,
    (4) Canned broken pitted olives of the ripe type shall meet the 
minimum quality requirements as prescribed in Table 4 of this section;
    (5) A lot of canned ripe olives is considered to meet the 
requirements of this section if all or most of the sample units meet 
the requirements specified in Tables 1 through 4 of this section: 
Provided, That the number of sample units which do not meet the

[[Page 1243]]

requirements specified in Tables 1 through 4 of this section does not 
exceed the acceptance number prescribed for in the sample size provided 
in Table I of 7 CFR 52.38: Provided further, That there is no off 
flavor in any sample unit.

                    Table 1.--Whole and Pitted Style                    
                    [Defects by count per 50 olives]                    
------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
FLAVOR.......................  Reasonably good; no ``off'' flavor.      
FLAVOR (Green Ripe Type)       Free from objectionable flavors of any   
                                kind.                                   
SALOMETER....................  Acceptable Range in degrees: 3.0 to 14.0.
COLOR........................  Reasonably uniform with not less than 60%
                                having a color equal or darker than the 
                                USDA Composite Color Standard for Ripe  
                                Type.                                   
CHARACTER....................  Not more than 5 soft units or 2          
                                excessively soft units.                 
UNIFORMITY OF SIZE             60%, by visual inspection, of the most   
                                uniform in size. The diameter of the    
                                largest does not exceed the smallest by 
                                more than 4mm.                          
DEFECTS:                                                                
    Pitter Damage (Pitted      15.                                      
     Style Only).                                                       
    Major Blemishes..........  5.                                       
    Major Wrinkles...........  5.                                       
    Pits and Pit Fragments     Not more than 1.3 % average by count.    
     (Pitted Style Only).                                               
    Major Stems..............  Not more than 3.                         
    HEVM.....................  Not more than 1 unit per sample.         
    Mutilated................  Not more than 3.                         
    Mechanical Damage........  Not more than 5.                         
    Split Pits or Misshapen..  Not more than 5.                         
------------------------------------------------------------------------


         Table 2.--Sliced, Segmented (Wedged), and Halved Styles        
                    [Defects by count per 255 grams]                    
------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
FLAVOR.......................  Reasonably good; no ``off'' flavor.      
SALOMETER....................  Acceptable Range in degrees: 3.0 to 14.0.
COLOR........................  Reasonably uniform with no units lighter 
                                than the USDA Composite Color Standard  
                                for Ripe Type.                          
CHARACTER....................  Not more than 13 grams excessively soft. 
DEFECTS:                                                                
    Pits and Pit Fragments...  Average of not more than 1 by count per  
                                300 grams.                              
    Major Stems..............  Not more than 3.                         
    HEVM.....................  Not more than 2 units per sample.        
    Broken Pieces and End      Not more than 125 grams by weight.       
     Caps.                                                              
------------------------------------------------------------------------


                         Table 3.--Chopped Style                        
                    [Defects by count per 255 grams]                    
------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
FLAVOR.......................  Reasonably good; no ``off'' flavor.      
SALOMETER....................  Acceptable Range in degrees: 3.0 to 14.0.
COLOR........................  Reasonably uniform with no units lighter 
                                than the USDA Composite Color Standard  
                                for Ripe Type.                          
DEFECTS:                                                                
    Pits and Pit Fragments...  Average of not more than 1 by count per  
                                300 grams.                              
    Major Stems..............  Not more than 3.                         
    HEVM.....................  Not more than 2 units per sample.        
------------------------------------------------------------------------


                      Table 4.--Broken Pitted Style                     
                    [Defects by count per 255 grams]                    
------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
FLAVOR.......................  Reasonably good; no ``off'' flavor.      
SALOMETER....................  Acceptable Range in degrees: 3.0 to 14.0.
COLOR........................  Reasonably uniform with no units lighter 
                                than the USDA Composite Color Standard  
                                for Ripe Type.                          
CHARACTER....................  Not more than 13 grams excessively soft. 
DEFECTS:                                                                
    Pits and Pit Fragments...  Average of not more than 1 by count per  
                                300 grams.                              
    Major Stems..............  Not more than 3.                         
    HEVM.....................  Not more than 2 units per sample.        
------------------------------------------------------------------------

    (b) Terms used in this section shall have the same meaning as are 
given to the respective terms in the current U.S. Standards for Grades 
of Canned Ripe Olives (7 CFR part 52): Provided, That the definition of 
``broken pitted olives'' is as follows: ``Broken pitted olives'' 
consist of large pieces that may have

[[Page 1244]]

been broken in pitting but have not been sliced or cut.
    3. Section 932.150 is revised to read as follows:


Sec. 932.150  Modified minimum quality requirements for canned green 
ripe olives.

    The minimum quality requirements prescribed in Sec. 932.52 (a)(1) 
of this part are hereby modified with respect to canned green ripe 
olives so that no requirements shall be applicable with respect to 
color and blemishes of such olives.
    4. In section 932.152, paragraphs (a), (b), (c)(2), the heading of 
paragraph (d), (d)(1), (g)(1) introductory text (table remains 
unchanged), and (g)(2) introductory text (table remains unchanged) are 
revised to read as follows:


Sec. 932.152  Outgoing regulations.

    (a) Inspection stations. Processed olives shall be sampled and 
inspected only at an inspection station which shall be any olive 
processing plant having facilities for in-line or lot inspection which 
are satisfactory to the Inspection Service and the Committee; or an 
olive processing plant which has an approved Quality Assurance Program 
in effect.
    (b) Inspection--General. Inspection of packaged olives for 
conformance with Sec. 932.52 shall be by a Quality Assurance Program 
approved by the Processed Products Branch (PPB), USDA; or by in- line 
or lot inspection. A PPB approved Quality Assurance Program shall be 
pursuant to a Quality Assurance contract as referred to in Sec. 52.2.
    (c) * * *
    (2) The Inspection Service shall issue for each day's pack a signed 
certificate covering the quantities of such packaged olives which meet 
all applicable minimum quality and size requirements. Each such 
certificate shall contain at least the following:
    (i) Date;
    (ii) Place of inspection;
    (iii) Name and address of handler;
    (iv) Can code;
    (v) Variety;
    (vi) Fruit size;
    (vii) Can size;
    (viii) Style;
    (ix) Total number of cases;
    (x) Number of cans per case;
    (xi) And statement that packaged olives meet the effective minimum 
quality requirements for canned ripe olives as warranted by the facts.
    (d) Olives which fail to meet minimum quality and size 
requirements. (1) Whenever any portion of a handler's daily pack of 
packaged olives fails to meet all applicable minimum quality and size 
requirements, the Inspection Service shall issue a signed report 
covering such olives. Each such report shall contain at least the 
following:
    (i) Date;
    (ii) Place of inspection;
    (iii) Name and address of handler;
    (iv) Can code;
    (v) Variety;
    (vi) Fruit size;
    (vii) Can size;
    (viii) Style;
    (ix) Total number of cases;
    (x) Number of cans per case; and
    (xi) Reason why the applicable requirements were not met.
* * * * *
    (g) Size Certification. (1) When limited-use size olives for 
limited-use styles are authorized during a crop year and a handler 
elects to have olives sized pursuant to Sec. 932.51(a)(2)(i), any lot 
of limited-use size olives may be used in the production of packaged 
olives for limited-use styles if such olives are within the average 
count range in Table II contained herein for that variety group, and 
meet such further mid-point or acceptable count requirements for the 
average count range in each size as approved by the committee.
* * * * *
    (2) When limited-use size olives are not authorized for limited-use 
styles during a crop year and a handler elects to have olives sized 
pursuant to Sec. 932.51(a)(2)(ii), any lot of canning-sized olives may 
be used in the production of packaged olives for whole, pitted, or 
limited-use styles if such olives are within the average count range in 
Table III contained herein for that variety group, and meet such 
further mid-point or acceptable count requirements for the average 
count range in each size as approved by the committee.
* * * * *
    5. In Sec. 932.153, the section heading and paragraph (a) are 
revised to read as follows:


Sec. 932.153  Establishment of minimum quality and size requirements 
for processed olives for limited uses.

    (a) Minimum quality requirements. On or after August 1, 1996, any 
handler may use processed olives of the respective variety group in the 
production of limited use styles of canned ripe olives if such olives 
were processed after July 31, 1996, and meet the minimum quality 
requirements specified in Sec. 932.52(a)(1) as modified by 
Sec. 932.149.
* * * * *
    6. In Sec. 932.155, paragraph (c) is revised to read as follows:


Sec. 932.155  Special purpose shipments.

* * * * *
    (c) In accordance with the provisions of Sec. 932.55(b), any 
handler may use processed olives in the production of packaged olives 
for repackaging, and ship packaged olives for repackaging, if the 
packaged olives meet the minimum quality requirements, except for the 
requirement that the packaged olives possess a reasonably good flavor: 
Provided, That the failure to possess a reasonably good flavor is due 
only to excessive sodium chloride.

PART 944--FRUITS; IMPORT REGULATIONS

    7. In Sec. 944.401, paragraphs (a)(8), (b)(1), (g), and (j) are 
revised to read as follows:


Sec. 944.401  Olive Regulation 1.

    (a) * * *
    (8) Terms used in this section shall have the same meaning as are 
given to the respective terms in the current U.S. Standards for Grades 
of Canned Ripe Olives (7 CFR part 52) including the terms ``size'', 
``character'', ``defects'' and ``ripe type'': Provided, That the 
definition of ``broken pitted olives'' is as follows: ``Broken pitted 
olives'' consist of large pieces that may have been broken in pitting 
but have not been sliced or cut.
    (b) * * *
    (1) Minimum quality requirements. Canned ripe olives shall meet the 
following quality requirements, except that no requirements shall be 
applicable with respect to color and blemishes for canned green ripe 
olives:
    (i) Canned whole and pitted olives of the ripe type shall meet the 
minimum quality requirements prescribed in Table 1 of this section;
    (ii) Canned sliced, segmented (wedged), and halved olives of the 
ripe type shall meet the minimum quality requirements prescribed in 
Table 2 of this section;
    (iii) Canned chopped olives of the ripe type shall meet the minimum 
quality requirements prescribed in Table 3 of this section and shall be 
practically free from identifiable units of pit caps, end slices, and 
slices (``practically free from identifiable units'' means that not 
more than 10 percent, by weight, of the unit of chopped style olives 
may be identifiable pit caps, end slices, or slices); and
    (iv) Canned broken pitted olives of the ripe type shall meet the 
minimum quality requirements prescribed in Table 4 of this section, 
Provided, That broken pitted olives consist of large

[[Page 1245]]

pieces that may have been broken in pitting but have not been sliced or 
cut.
    (v) A lot of canned ripe olives is considered to meet the 
requirements of this section if all or most of the sample units meet 
the requirements specified in Tables 1 through 4 of this section: 
Provided, That the number of sample units which do not meet the 
requirements specified in Tables 1 through 4 of this section does not 
exceed the acceptance number prescribed for in the sample size provided 
in Table I of 7 CFR 52.38: Provided further, That there is no off 
flavor in any sample unit.

                    Table 1.--Whole and Pitted Style                    
                    [Defects by count per 50 olives]                    
------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
FLAVOR.......................  Reasonably good; no ``off'' flavor.      
FLAVOR (Green Ripe Type).....  Free from objectionable flavors of any   
                                kind.                                   
SALOMETER....................  Acceptable range in degrees: 3.0 to 14.0.
COLOR........................  Reasonably uniform with not less than 60%
                                having a color equal or darker than the 
                                USDA Composite Color Standard for Ripe  
                                Type.                                   
CHARACTER....................  Not more than 5 soft units or 2          
                                excessively soft units.                 
UNIFORMITY OF SIZE...........  60%, by visual inspection, of the most   
                                uniform in size. The diameter of the    
                                largest does not exceed the smallest by 
                                more than 4mm.                          
DEFECTS:.....................                                           
    Pitter Damage (Pitted      15.                                      
     Style Only).                                                       
    Major Blemishes..........  5.                                       
    Major Wrinkles...........  5.                                       
    Pits and Pit Fragments     Not more than 1.3% average by count.     
     (Pitted Style Only).                                               
    Major Stems..............  Not more than 3.                         
    HEVM.....................  Not more than 1 unit per sample.         
    Mutilated................  Not more than 3.                         
    Mechanical Damage........  Not more than 5.                         
    Split Pits or Misshapen..  Not more than 5.                         
------------------------------------------------------------------------


         Table 2.--Sliced, Segmented (Wedged), and Halved Styles        
                       [Defects by count per 255]                       
------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
FLAVOR.......................  Reasonably good; no ``off'' flavor.      
SALOMETER....................  Acceptable range in degrees: 3.0 to 14.0.
COLOR........................  Reasonably uniform with no units lighter 
                                than the USDA Composite Color Standard  
                                for Ripe Type.                          
CHARACTER....................  Not more than 13 grams excessively soft. 
DEFECTS:                                                                
    Pits and Pit Fragments...  Average of not more than 1 by count per  
                                300 grams.                              
    Major Stems..............  Not more than 3.                         
    HEVM.....................  Not more than 2 units per sample.        
    Broken Pieces and End      Not more than 125 grams by weight.       
     Caps.                                                              
------------------------------------------------------------------------


                         Table 3.--Chopped Style                        
                    [Defects by count per 255 grams]                    
------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
FLAVOR.......................  Reasonably good; no ``off'' flavor.      
SALOMETER....................  Acceptable range in degrees: 3.0 to 14.0.
COLOR........................  Reasonably uniform with no units lighter 
                                than the USDA Composite Color Standard  
                                for Ripe Type.                          
DEFECTS:                                                                
    Pits and Pit Fragments...  Average of not more than 1 by count per  
                                300 grams.                              
    Major Stems..............  Not more than 3.                         
    HEVM.....................  Not more than 2 units per sample.        
------------------------------------------------------------------------


                      Table 4.--Broken Pitted Style                     
                    [Defects by count per 255 grams]                    
------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
FLAVOR.......................  Reasonably good; no ``off'' flavor.      
SALOMETER....................  Acceptable range in degrees: 3.0 to 14.0.
COLOR........................  Reasonably uniform with no units lighter 
                                than the USDA Composite Color Standard  
                                for Ripe Type.                          
CHARACTER....................  Not more than 13 grams excessively soft. 
DEFECTS:                                                                
    Pits and Pit Fragments...  Average of not more than 1 by count per  
                                300 grams.                              
    Major Stems..............  Not more than 3.                         
    HEVM.....................  Not more than 2 units per sample.        
------------------------------------------------------------------------


[[Page 1246]]

* * * * *
    (g) It is hereby determined, on the basis of the information 
currently available, that the minimum quality requirements and size 
requirements set forth in this part are comparable to those applicable 
to California canned ripe olives.
* * * * *
    (j) The minimum quality, size, and maturity requirements of this 
section shall not be applicable to olives imported for charitable 
organizations or processing for oil, but shall be subject to the 
safeguard provisions contained in Sec. 944.350.

    Dated: December 31, 1996.
Robert C. Keeney,
Director, Fruit and Vegetable Division.
[FR Doc. 97-449 Filed 1-8-97; 8:45 am]
BILLING CODE 3410-02-P