[Federal Register Volume 62, Number 34 (Thursday, February 20, 1997)]
[Rules and Regulations]
[Pages 7660-7663]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-4335]


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DEPARTMENT OF AGRICULTURE
7 CFR Part 987

[Docket No. FV-96-987-3 FR]


Domestic Dates Produced or Packed in Riverside County, 
California; Temporary Relaxation of Size Requirements for Deglet Noor 
Dates

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This final rule revises the size requirements currently 
prescribed for the Deglet Noor variety of dates under the California 
date marketing order. The marketing order regulates the handling of 
domestic dates produced or packed in Riverside County, California, and 
is administered locally by the California Date Administrative Committee 
(committee). This rule will increase the current tolerance for 
individual, whole Deglet Noor dates weighing less than 6.5 grams (the 
prescribed minimum) from 10 to 15 percent and will be in effect through 
October 31, 1997. The relaxation is necessary because dates from the 
1996-97 crop are smaller in size and weight than normal. The decrease 
in size and weight is due to extremely high temperatures experienced 
last spring in the production area. This relaxation was recommended by 
the committee to make a larger quantity of the 1996-97 crop

[[Page 7661]]

available for sale domestically and in Canada and is expected to 
benefit producers, handlers, and consumers.

EFFECTIVE DATE: This final rule becomes effective February 21, 1997.

FOR FURTHER INFORMATION CONTACT: Maureen Pello, 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 Valerie L. Emmer, Marketing 
Specialist, Marketing Order Administration Branch, F&V, AMS, USDA, room 
2536-S, P.O. Box 96456, Washington, DC 20090-6456: telephone: (202) 
205-2829, 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 final rule is issued under Marketing 
Agreement and Order No. 987 (7 CFR part 987), both as amended, 
regulating the handling of domestic dates produced or packed in 
Riverside County, California, hereinafter referred to as the ``order.'' 
The marketing agreement and order 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 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 date of the entry of the ruling.
    This final rule revises the size requirements currently prescribed 
for the Deglet Noor variety of dates under the California date 
marketing order. This rule will increase the current tolerance for 
individual, whole Deglet Noor dates weighing less than 6.5 grams (the 
prescribed minimum) from 10 to 15 percent. The rule will be in effect 
through October 31, 1997, and was recommended by the committee.
    Section 987.39 of the date marketing order provides authority for 
the establishment of minimum quality requirements for varieties of 
California dates to be handled in designated outlets. Section 987.40 of 
the order also provides authority for the committee to recommend to the 
Secretary additional grade or size requirements for any variety of 
dates to be handled in any designated outlet when it deems advisable. 
Pursuant to Sec. 987.12, there are four designated outlet categories 
for California dates--``DAC'' dates, ``dates for further processing'' 
(FP dates), ``export'' dates, and ``product'' dates.
    Section 987.112a of the order's administrative rules prescribes 
grade, size, and container requirements for each of the four outlet 
categories of dates. Paragraph (b)(2) of that section prescribes such 
requirements for DAC dates. DAC dates are marketable whole or pitted 
dates that are inspected and certified as meeting the grade, size, 
container, and applicable identification requirements for handling in 
the United States and Canada. Currently, DAC dates must meet the 
requirements for U.S. Grade B, as specified in the U.S. Standards for 
Grades of Dates (Standards) issued by the Department. In addition, with 
respect to whole dates of the Deglet Noor variety, the individual dates 
in a sample from a lot must weigh at least 6.5 grams, with a tolerance 
of 10 percent per lot for dates weighing less than 6.5 grams.
    Paragraph (c)(2) of Sec. 987.112a provides similar requirements for 
FP dates. FP dates are marketable whole dates acquired by one handler 
from another handler that are certified as meeting the same grade and 
size requirements as for DAC dates, with the exception of moisture 
requirements and applicable identification requirements. Currently, FP 
dates must also meet the requirements for U.S. Grade B as specified in 
the Standards, except for moisture.
    Section 987.112a also specifies requirements for the remaining two 
outlet categories of dates--export and product. Except for some minor 
differences stated in the section, export and product dates must meet 
the requirements for U.S. Grade C as specified in the Standards.
    At its meeting on October 31, 1996, the committee recommended 
increasing the current tolerance for individual, whole Deglet Noor 
dates weighing less than 6.5 grams from 10 to 15 percent to be handled 
in the DAC and FP outlet categories. The committee also recommended 
that this relaxation be in effect through October 31, 1997. This will 
allow the rule to be in effect for the remainder of the 1996-97 season, 
which ends on September 30, plus an additional month. By the end of 
October 1997, as prescribed under the order, the committee is required 
to meet and review its marketing policy for the next season. Five 
committee members voted for this change, three voted against, and one 
abstained.
    In its deliberations, the committee commented that the average 
fruit size for the 1996-97 crop is expected to be much smaller this 
season than in recent years, primarily due to the hot, dry spring. 
Increasing the tolerance from 10 to 15 percent for dates weighing less 
than 6.5 grams should allow a greater quantity of Deglet Noor dates 
which are of good quality but weigh less than 6.5 grams to meet the 
requirements for DAC and FP dates. Currently, the industry average of 
the number of dates packed per pound is 60. The additional five percent 
tolerance for undersize dates will allow handlers to include 
approximately two additional smaller dates per pound. Thus, more of the 
crop would be utilized as whole dates domestically and in Canada. The 
committee estimates total 1996-97 marketable date shipments at 33.5 
million pounds. Of that amount, Deglet Noor shipments are estimated at 
approximately 32.4 million pounds, with about 15 million pounds likely 
to meet the current requirements for DAC and FP dates. According to the 
committee, increasing the tolerance from 10 to 15 percent should allow 
about three to five percent more Deglet Noor dates to meet the DAC and 
FP requirements, or between 450,000 and 750,000 pounds. Making more 
Deglet Noor dates of satisfactory quality available for sale 
domestically and in Canada should provide for maximum utilization of 
the 1996-97 crop, thereby benefiting producers, handlers, and 
consumers.
    The three committee members who opposed the recommendation believe

[[Page 7662]]

that the overall quality of dates packed will be decreased if smaller 
fruit is allowed to meet the requirements for DAC and FP dates. 
However, other committee members commented that the smaller size dates 
will still have to meet all of the other characteristics DAC and FP 
dates must already meet. Thus, consumers should continue to receive 
good quality whole dates with only a slight increase in the number of 
smaller size dates. In addition, the majority of committee members 
believe that this change will only affect about three to five percent 
of the Deglet Noor shipments that are expected to meet DAC and FP 
requirements.
    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. Accordingly, AMS has 
prepared this final regulatory flexibility analysis.
    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 15 handlers of California dates who are 
subject to regulation under the marketing order and approximately 135 
date producers in the regulated area. Small agricultural service firms 
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.
    Last year, as a percentage, about 75 percent of the handlers 
shipped under 4 million pounds of dates and 25 percent shipped over 4 
million. Using an average f.o.b. price of $1.12 per pound, about 75 
percent of date handlers could be considered small businesses under 
SBA's definition and about 25 percent of the handlers could be 
considered large businesses. The majority of handlers and producers of 
California dates may be classified as small entities.
    This final rule revises the size requirements currently prescribed 
for the Deglet Noor variety of dates under Sec. 987.112a of the 
California date marketing order. Deglet Noor dates from the 1996-97 
crop are smaller in size and weight than normal, due to extremely high 
temperatures experienced last spring in the production area. The 
committee recommended increasing the current tolerance for individual, 
whole Deglet Noor dates weighing less than 6.5 grams (the prescribed 
minimum) from 10 to 15 percent, to make a larger quantity of the 1996-
97 crop available for sale domestically and in Canada, thereby 
benefitting producers, handlers, and consumers. This rule will be in 
effect through October 31, 1997.
    At the meeting, the committee discussed the impact of this change 
on handlers and producers in terms of cost. Handlers and producers 
receive higher returns for dates that meet DAC and FP requirements. As 
previously mentioned, dates sold as DAC or FP must meet the 
requirements for U.S. Grade B dates (with the exception of moisture for 
FP dates) as specified in the Standards and dates sold in other outlet 
categories such as product and export must meet requirements specified 
for U.S. Grade C dates. According to industry members, handlers receive 
about $.50 per pound more for U.S. Grade B dates than U.S. Grade C, and 
growers receive about $.30 more per pound more for U.S. Grade B dates.
    In addition, as previously mentioned, 1996-97 marketable Deglet 
Noor shipments are estimated to be approximately 32.4 million pounds, 
of which about 15 million pounds should meet DAC and FP requirements. 
If, as the committee anticipates, increasing the tolerance for smaller 
size fruit will impact about three to five percent of the crop, this 
change should allow between about 450,000 and 750,000 pounds more 
Deglet Noor dates to be sold as DAC and FP dates. With a net increase 
to handlers and producers of about $.50 per pound and $.30 per pound, 
respectively, for U.S. Grade B dates, this change could mean an 
increase in total net returns of $225,000-$375,000 for all handlers and 
$135,000-$225,000 for all producers. The benefits for this rule are not 
expected to be disproportionately greater or less for small handlers or 
producers than for larger entities.
    The committee discussed alternatives to this change, including not 
increasing the tolerance at all, as well as increasing the tolerance by 
10 percent rather than five percent. While only a small amount of the 
crop is expected to be affected by increasing the tolerance, the 
committee believes that an increase should benefit producers and 
handlers with smaller fruit this season. The committee considered 
increasing the tolerance from 10 to 20 percent but believed that this 
could put too much smaller size fruit on the market. In addition, 
committee members commented that the tolerance was increased by five 
percent during the 1992-93 season and in prior seasons because of 
similar problems of an abundance of small size fruit due to hot 
temperatures, and that the five percent increase was satisfactory. 
Thus, the majority of committee members agreed that the tolerance for 
the size of Deglet Noor dates should be increased from 10 to 15 percent 
through October 31, 1997.
    This final rule will relax size requirements under the date 
marketing order. Accordingly, this action will not impose any 
additional reporting or recordkeeping requirements on either small or 
large date handlers. As with all Federal marketing order programs, 
reports and forms are periodically reviewed to reduce information 
requirements and duplication by industry and public sector agencies.
    As noted in the initial regulatory flexibility analysis, the 
Department has not identified any relevant Federal rules that 
duplicate, overlap or conflict with this final rule. However, as 
previously stated, DAC and FP dates must meet the requirements for U.S. 
Grade B, as specified in the U.S. Standards for Grades of Dates (7 CFR 
52.1001 through 52.1011) issued under the Agricultural Marketing Act of 
1946 (7 U.S.C. 1621 through 1627). Standards issued under the 
Agricultural Marketing Agreement Act of 1946 are voluntary. Further, 
the public comments received concerning the proposal did not address 
the initial regulatory flexibility analysis.
    In addition, the committee's meeting was widely publicized 
throughout the date industry and all interested persons were invited to 
attend the meeting and participate in committee deliberations on all 
issues. Like all committee meetings, the October 31, 1996, meeting was 
a public meeting and all entities, both large and small, were able to 
express views on this issue. The committee itself is composed of nine 
members, of which six are handlers/producers and three are producers 
only, the majority of whom are small entities.
    A proposed rule concerning this action was issued by the Department 
on December 2, 1996, put on public display at the Office of the Federal 
Register on December 5, 1996, and published in the Federal Register on 
Friday, December 6, 1996 (61 FR 64638). Copies of the rule were made 
available to industry members on December 5, 1996, at a meeting of the 
California Date Commission (Commission), a State organization that 
conducts promotional activities for the date industry. Many of the 
committee members also sit on the Commission. Copies of the rule were 
also mailed or sent via facsimile to all committee members and date 
handlers.

[[Page 7663]]

Finally, the rule was made available through the Internet by the Office 
of the Federal Register.
    A 15-day comment period was provided to allow interested persons to 
respond to the proposal. Fifteen days was deemed appropriate because a 
rule finalizing the action would need to be in place as soon as 
possible since handlers are already shipping dates from the 1996-97 
crop.
    Two comments were received during the comment period in response to 
the proposal. The commenters, both representing the same producer 
operation, opposed the proposed relaxation. The points made by the 
commenters were thoroughly discussed prior to the committee vote.
    The commenters disagreed with the statement in the proposed rule 
that the relaxation would benefit both producers and handlers. They 
claimed that the increased returns to the handlers would not be passed 
down to the producers. While this may differ between and among 
individual handlers and producers, it is the Department's understanding 
that growers are paid for their dates by handlers either on a weight 
basis (so much money per pound of dates delivered) or on a packout 
basis (so much money per pound of U.S. Grade B or U.S. Grade C dates). 
Committee members indicated at the meeting that, when growers are paid 
based on packout, such growers receive about $.30 more per pound for 
U.S. Grade B dates than U.S. Grade C dates. As previously mentioned, 
the committee anticipates that increasing the tolerance for smaller 
size fruit will allow more dates to meet U.S. Grade B and be sold as 
DAC and FP dates and thus, will benefit handlers and producers in the 
industry.
    The commenters also contend that the proposed relaxation will lower 
industry quality standards at a time when the industry should be 
striving for higher standards. However, as discussed by the committee 
and specified in the proposed rule, the 5 percent increase in the 
number of smaller size dates should result in an average of only 2 
additional smaller sized dates in each package of approximately 60 
dates. The majority of the committee members felt such a relaxation 
would not significantly affect the overall quality of each date 
package.
    One commenter claimed that the estimate of 450,000 to 750,000 
pounds of additional dates made available by the proposed rule is not 
accurate because the industry's carryin inventory was 14 million 
pounds. While the total inventory is, indeed, estimated at 14.7 million 
pounds, the inventory of DAC dates--those dates affected by the 
relaxation--is only 5.7 million pounds, which is less than normal. The 
committee's estimate of an additional 450,000 to 750,000 pounds of DAC 
dates is accurate.
    The commenter also suggested that smaller dates would not 
necessarily come only from the 1996 crop. The commenter stated that the 
rule's expiration date of October 31, 1997, overlaps the 1997 crop 
harvest. The commenter contends that smaller dates from the 1997 crop 
could be packed with the 1996 crop. However, harvest usually begins in 
mid to late October and only a small amount of dates are harvested and 
processed before the end of the month. Also, it is common industry 
practice to store dates for up to 10 months prior to processing, 
packaging and shipment. Therefore, the October 1997 time period would 
allow stored 1996 crop dates to be used.
    The commenter also claimed that the relaxation is a short term 
solution and questioned whether other commodities lower quality 
standards because of adverse weather conditions. Such action has been 
recommended by other marketing order committees and approved by the 
Secretary for some commodities. Such recommendations have helped 
marketing order industries to fully utilize available production when 
harvests are diminished by adverse weather or other disasters.
    Accordingly, no changes will be made to the rule as proposed, based 
on the comments received.
    After consideration of all relevant matter presented, including the 
information and recommendation 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 handlers are already shipping 
dates from the 1996-97 crop and handlers want to take advantage of the 
relaxation as soon as possible. Further, handlers are aware of this 
rule, which was recommended at a public meeting. Also, a 15-day comment 
period was provided for in the proposed rule.

List of Subjects in 7 CFR Part 987

    Dates, Marketing agreements, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 987 is 
amended as follows:
    1. The authority citation for 7 CFR part 987 continues to read as 
follows:

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

PART 987--DOMESTIC DATES PRODUCED OR PACKED IN RIVERSIDE COUNTY, 
CALIFORNIA


Sec. 987.112a  [Amended]

    2. In Sec. 987.112a, paragraphs (b)(2) and (c)(2), the words 
``December 29, 1992, and ending October 31, 1993,'' are removed and the 
words ``February 21, 1997, and ending October 31, 1997,'' are added in 
their place.

    Dated: February 14, 1997.
Robert C. Keeney,
Director, Fruit and Vegetable Division.
[FR Doc. 97-4335 Filed 2-18-97; 2:02 pm]
BILLING CODE 3410-02-P