[Federal Register Volume 63, Number 100 (Tuesday, May 26, 1998)]
[Rules and Regulations]
[Pages 28475-28480]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-13881]



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  Federal Register / Vol. 63, No. 100 / Tuesday, May 26, 1998 / Rules 
and Regulations  

[[Page 28475]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 925 and 944

[Docket No. FV98-925-3 IFR]


Grapes Grown in a Designated Area of Southeastern California and 
Imported Table Grapes; Revision in Minimum Grade, Container, and Pack 
Requirements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule revises minimum grade requirements for grapes grown 
in southeastern California and for grapes imported into the United 
States. It also revises container and pack requirements currently 
prescribed for California grapes. This rule allows California grape 
handlers to market consumer packages of grapes more economically by 
increasing the range of allowable bunch sizes for a portion of the 1998 
season. Master containers of consumer grape packages could be marketed 
if the grape clusters/bunches in the packages consist of at least 2 
berry clusters and the clusters/bunches are not greater than 19 ounces 
in weight. The increased bunch size range also applies to imported 
grapes. This action is in the interest of handlers, producers, 
importers, and consumers.

DATES: Effective June 1, 1998; comments must be received by June 25, 
1998 and 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 sent to the Docket Clerk, Fruit 
and Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box 96456, 
Washington, DC 20090-6456; Fax: (202) 205-6632. All comments should 
reference the docket number and the date and page number of this issue 
of the Federal Register and will be available for public inspection in 
the Office of the Docket Clerk during regular business hours.

FOR FURTHER INFORMATION CONTACT: Rose M. Aguayo, 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 
Anne M. Dec, Team Leader, Marketing Order Administration Branch, F&V, 
AMS, USDA, room 2525-S, P.O. Box 96456, Washington, DC 20090-6456; 
telephone: (202) 720-2491, Fax: (202) 205-6632. Small businesses may 
request information on compliance with this regulation by contacting 
Jay Guerber, Marketing Order Administration Branch, F&V, AMS, USDA, 
room 2525-S, P.O. Box 96456, Washington, DC 20090-6456; telephone: 
(202) 720-2491, Fax: (202) 205-6632.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order 
No. 925 (7 CFR Part 925), regulating the handling of 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.''
    This rule is also issued under section 8e of the Act, which 
provides that whenever certain specified commodities, including table 
grapes, 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 rule in 
conformance with Executive Order 12866.
    This 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.
    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.
    This rule increases the range of allowable sizes of grape bunches 
that California handlers can pack in certain containers during the 
period June 1, 1998, through August 15, 1998. Master containers of 
consumer grape packages can be marketed if the grape clusters/bunches 
in the packages consist of at least 2 berry clusters and the clusters/
bunches are not greater than 19 ounces in weight. The increased bunch 
size range also applies to imported grapes, but no container 
specifications apply. The changes in domestic requirements were 
recommended by the California Desert Grape Administrative Committee 
(Committee), the agency responsible for local administration of the 
order.
    Under the terms of the order, fresh market shipments of grapes 
grown in southeastern California are required to be inspected and meet 
grade, size, maturity, pack, and container requirements. Current 
requirements include minimum grade and net weight requirements. Grapes 
must also be packed in authorized containers, and such containers must 
be marked with the minimum net weight of the grapes contained therein, 
the variety of the grapes, the name of the shipper, and the lot stamp 
number corresponding to the lot inspection conducted by an authorized 
inspector.
    Section 925.52(a)(2) of the grape order provides authority to limit 
the handling

[[Page 28476]]

of any grade, size, quality, maturity, or pack of grapes for different 
varieties, or any combination of the foregoing during any period or 
periods.
    Section 925.304(a) of the order's administrative rules and 
regulations requires grapes to meet the minimum grade requirements of 
U.S. No. 1 Table, or U.S. No. 1 Institutional, or to meet all the 
requirements of U.S. No. 1 Institutional, except that a tolerance of 33 
percent is provided for off-size bunches. Grapes meeting U.S. No. 1 
Institutional requirements are required to be marked ``U.S. No. 1 
Institutional.'' Grapes meeting the modified U.S. No. 1 Institutional 
requirements may be marked ``DGAC No. 1 Institutional.'' The 
requirements for the U.S. No. 1 Table and U.S. No. 1 Institutional 
grades are set forth in the United States Standards for Grades of Table 
Grapes (European or Vinifera Type) (7 CFR 51.880 through 51.914) 
(Standards).
    Section 925.52(a)(4) of the order provides authority to regulate 
the size, capacity, weight, dimensions, markings, materials, and pack 
of containers which may be used in the handling of grapes.
    Section 925.304(b)(1) of the order's administrative rules and 
regulations requires grapes to be packed in new and clean boxes which 
meet the requirements of sections 1380.14, 1380.19, 1436.37, and 
1436.38 of Title 3: California Code of Regulations (CCR). That section 
also authorizes nine containers that can be used for domestic and 
export shipments and specifies dimensions for each such container. An 
additional container, defined in terms of a net weight of 5 kilograms, 
is authorized for export shipments only. All 10 of the authorized 
containers may be used for export shipments. Only the first nine can be 
used for domestic shipments.
    Finally, Sec. 925.304(b)(1) authorizes the Committee to approve 
other containers for experimental or research purposes.
    Section 925.304(b)(2) of the order's administrative rules and 
regulations provides that grapes in any containers weigh at least 20 
pounds based on the average net weight of grapes in a representative 
sample of containers. An exception is provided for grapes packed in 
experimental containers, or packed in bags or wrapped in plastic or 
paper. Containers of grapes packed in bags or wrapped in plastic or 
paper prior to being placed in these containers must meet a minimum net 
weight requirement of 18 pounds. There are no weight requirements 
specified for experimental containers.
    The Committee met on March 24, 1998, and unanimously recommended 
modifying Sec. 925.304 of the order's administrative rules and 
regulations to make the following changes:
    (1) Revise the minimum grade requirement for the period June 1, 
1998, through August 15, 1998, to allow a pilot test for the marketing 
of grapes which meet all the requirements of U.S. No. 1 Institutional 
except for the weight of clusters/bunches. The revision allows 
clusters/bunches as small as a 2 berry cluster and as large as 19 
ounces in weight. Grapes meeting these quality requirements are to be 
marked ``DGAC Consumer No. 1 Institutional'' but cannot be marked 
``Institutional Pack.''
    (2) Authorize an experimental master container, containing 
individual consumer packages of grapes which weigh 1\1/2\ pounds or 
less, net weight, for use during the pilot test period of June 1, 1998, 
to August 15, 1998. Grapes meeting the ``DGAC Consumer No. 1 
Institutional'' requirements must be packed in this container and this 
master container can only be used for packing the ``DGAC Consumer No. 1 
Institutional'' grade.
    (3) Update or remove certain obsolete references appearing in the 
regulation.

Revision in Minimum Grade Requirements

    Until 1993, the minimum grade requirement under the order was U.S. 
No. 1 Table. One requirement of that grade is that grape bunches weigh 
at least 4 ounces.
    In 1991, a new U.S. No. 1 Institutional grade was added to the 
Standards. This grade--used primarily for sales to restaurants and 
other food service firms--provides for grape lots which have very small 
bunches. At the request of the table grape industry, this grade was 
added to meet market demand for individual consumer sized servings of 
grapes. The Standards were further revised in 1996 to lower the minimum 
bunch size to a two berry cluster and specify a separate 4 percent 
tolerance for off-size bunches.
    The minimum grade requirements under the order were changed in 1993 
to allow California grape handlers to pack the newly established U.S. 
No. 1 Institutional grade. Because handlers experienced difficulties in 
packing this grade, these requirements were further revised in 1994 to 
provide a tolerance of 33 percent for off-size bunches. This modified 
U.S. No. 1 Institutional grade is referred to as DGAC No. 1 
Institutional.
    Currently, during the period April 20 through August 15 each year, 
California grape handlers can ship grapes meeting at least U.S. No. 1 
Table, U.S. No. 1 Institutional, or DGAC No. 1 Institutional.
    The requirements of the U.S. No. 1 Institutional are essentially 
the same as those of the U.S. No. 1 Table grade, with three major 
exceptions. The first difference relates to bunch size. Under the U.S. 
No. 1 Table grade, there is a minimum bunch size requirement of 4 
ounces and no maximum bunch size. Under the U.S. No. 1 Institutional 
grade, grapes are to consist of at least a two berry cluster ranging to 
clusters and/or bunches of grapes not greater than five ounces in 
weight. A cluster is two or more berries sharing a common point of 
attachment.
    The second difference is that at least 95 percent of the containers 
in a lot of grapes grading U.S. No. 1 Institutional must be legibly 
marked ``Institutional Pack.'' There are no marking requirements under 
the U.S. No. 1 Table grade.
    The third difference relates to the tolerances for off-size 
bunches. For grapes grading U.S. No. 1 Table, an 8 percent tolerance is 
established for all grade requirements, including off-size bunches. The 
U.S. No. 1 Institutional grade has a separate tolerance of 4 percent 
for off-size clusters/bunches and an 8 percent tolerance for the 
remaining grade requirements.
    Requirements for the DGAC No. 1 Institutional are the same as for 
the U.S. No. 1 Institutional, except that the tolerance for off-size 
bunches is 33 percent. Because grapes meeting these requirements do not 
meet the U.S. No. 1 Institutional grade requirements, they cannot be 
marked ``Institutional Pack.'' They may, however, be marked ``DGAC No. 
1 Institutional.''
    Recently, there has been interest in packing grapes in individual 
consumer packages known as ``punits'' or ``clamshells.'' These 
containers, used most commonly to pack strawberries, are made of a 
clear, hard rigid plastic and typically hold a half pound or a pound of 
fruit. Some retailers prefer these containers because they are of the 
same net weight, and can be scanned at check-out. This is particularly 
convenient for retailers that do not have facilities for weighing 
produce, such as convenience stores and fast food outlets. Some 
consumers also prefer the convenience of prepackaged individual 
portions of fruit.
    To meet changing market requirements, California grape handlers 
would like to be able to pack these consumer packages. Current bunch 
size requirements make it difficult however. Grape bunches normally 
range in weight from \1/4\ pound to 3 pounds. Thus, portions of bunches 
have to be used to fill the new packages to the weights desired by 
buyers. Handlers have

[[Page 28477]]

determined that increasing the range of permissible bunch sizes to 
allow for clusters/bunches of two berries to 19 ounces will provide 
handlers the flexibility needed to pack grapes in the desired consumer 
containers.
    This rule revises Sec. 925.304(a) of the order's rules and 
regulations to allow handlers to ship a new grade of grapes to be known 
as DGAC Consumer No. 1 Institutional. The name recognizes that such 
grapes will be packed in consumer packages and that the grapes are not 
packed to the minimum requirements of the U.S. No. 1 Table grade. 
Grapes meeting this requirement must meet the requirements of the U.S. 
No. 1 Institutional grade, except for the cluster/bunch size 
requirements. Specifically, these modified requirements allow shipments 
with clusters/bunches ranging from 2 berry clusters to clusters/bunches 
of grapes up to 19 ounces in weight.

Container Requirements

    The Committee recommended that grapes packed in accordance with the 
new DGAC Consumer No. 1 Institutional requirements be packed in a 
certain way. These grapes must be packed in individual consumer 
packages. The consumer packages must then be packed in a master 
container.
    Typically, the individual consumer packages hold either \1/2\ or 1 
pound of fruit. To allow for normal shrinkage during handling, handlers 
generally pack a slightly greater weight than is desired at retail. 
Section 925.304(b) is revised to provide that DGAC Consumer No. 1 
Institutional grade grapes be packed in master containers containing 
individual consumer packages weighing 1\1/2\ pounds or less.
    Additionally, these master containers are required to be marked 
``DGAC Consumer No. 1 Institutional'' to accurately reflect their 
contents. The individual consumer packages do not need to be so marked. 
Other container marking requirements appearing in the regulation apply 
to the master containers as well.
    The master containers used for these grapes will typically hold 10 
consumer packages weighing 1 pound each or 20 packages weighing \1/2\ 
pound each. Thus, these containers are exempt from the net weight 
requirements of 18 or 20 pounds specified in Sec. 925.304(b)(2).

Application to Imports

    Section 8e of the Act specifies that whenever certain commodities, 
like grapes, are regulated under a Federal order, imports of those 
commodities must meet the same or comparable grade, size, quality, and 
maturity requirements as those in effect for the domestically produced 
commodity. Pack and container requirements are not authorized by 
section 8e. Thus, the revised grade requirements implemented by this 
rule apply to imported grapes; none of the container or container 
marking requirements apply, however. If desired, importers may label 
containers of grapes meeting the modified U.S. No. 1 Institutional 
requirements as ``DGAC Consumer No. 1 Institutional.'' Specifically, 
this rule modifies language in Sec. 944.503(a)(1) of the Table Grape 
Import Regulation 4 for fresh grapes imported into the United States.

Clarification/Removal of Obsolete Language

    This rule removes language in the introductory text of Sec. 925.304 
by removing a proviso that applies to the 1987 season and is no longer 
necessary.
    This rule makes several other corrections in both the order's 
administrative rules and regulations and the import regulation. 
Specifically, the tolerance percentage of ``8 percent'' is changed to 
``4 percent'' in Secs. 925.304(a) of the order's administrative rules 
and regulations and in 944.503(a)(1) of the import regulation. This 
corrects those sections to accurately specify the current tolerance for 
off-size bunches in the U.S. No. 1 Institutional grade. This rule 
corrects a reference to the Standards from section number ``51.913'' to 
section number ``51.914'' in Secs. 925.304(a) of the order and in 
944.503(a)(1) of the import regulation; and changes a California 
Department of Food and Agriculture reference from ``California 
Administrative Code (Title 3)'' to ``Title 3: California Code of 
Regulations'' in paragraph (a)(1)(ii) of Sec. 944.503 of the import 
regulation.

Initial Regulatory Flexibility Analysis

    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. Accordingly, AMS has prepared this initial 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. Import regulations issued under 
the Act are based on those established under Federal marketing orders.
    There are approximately 27 handlers of California grapes who are 
subject to regulation under the order and approximately 80 grape 
producers in the production area. In addition, there are approximately 
127 importers of grapes. 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 have been defined as those having annual receipts of less 
than $500,000. Ten of the 27 handlers subject to regulation have annual 
grape sales of at least $5,000,000, excluding receipts from any other 
sources. In addition, 70 of the 80 producers subject to regulation have 
annual sales of at least $500,000, and the remaining 10 producers have 
annual sales less than $500,000, excluding receipts from any other 
sources. Therefore, a majority of handlers and a minority of producers 
are classified as small entities. The average importer receives $2.8 
million in grape revenue, excluding receipts from other sources. 
Therefore, we believe that the majority of these importers are small 
entities.
    This rule increases the range of allowable sizes of grape bunches 
that California handlers can pack in certain containers during the 
period June 1, 1998, through August 15, 1998. Master containers of 
consumer grape packages can be marketed if the grape clusters/bunches 
in the packages consist of at least 2 berry clusters and the clusters/
bunches are not greater than 19 ounces in weight. The increased bunch 
size range also applies to imported grapes, but no container 
specifications apply. The changes in domestic requirements were 
recommended by the California Desert Grape Administrative Committee 
(Committee), the agency responsible for local administration of the 
order.
    Under the terms of the order, fresh market shipments of grapes 
grown in southeastern California are required to be inspected and meet 
grade, size, maturity, pack, and container requirements. Current 
requirements include minimum grade and net weight requirements. Grapes 
must also be packed in authorized containers, and such containers must 
be marked with the minimum net weight of the grapes contained therein, 
the variety of the grapes, the name of the shipper, and the lot stamp 
number corresponding to the lot inspection conducted by an authorized 
inspector.
    Section 925.52(a)(2) of the grape order provides authority to limit 
the handling

[[Page 28478]]

of any grade, size, quality, maturity, or pack of grapes for different 
varieties, or any combination of the foregoing during any period or 
periods.
    Section 925.304(a) of the order's administrative rules and 
regulations requires grapes to meet the minimum grade requirements of 
U.S. No. 1 Table, or U. S. No. 1 Institutional, or to meet all the 
requirements of U.S. No. 1 Institutional, except that a tolerance of 33 
percent is provided for off-size bunches. Grapes meeting U.S. No. 1 
Institutional requirements are required to be marked ``U.S. No. 1 
Institutional.'' Grapes meeting the modified U.S. No. 1 Institutional 
requirements may be marked ``DGAC No. 1 Institutional.'' The 
requirements for the U.S. No. 1 Table and U.S. No. 1 Institutional 
grades are set forth in the United States Standards for Grades of Table 
Grapes (European or Vinifera Type) (7 CFR 51.880 through 51.914) 
(Standards).
    Section 925.52(a)(4) of the order provides authority to regulate 
the size, capacity, weight, dimensions, markings, materials, and pack 
of containers which may be used in the handling of grapes.
    Section 925.304(b)(1) of the order's administrative rules and 
regulations requires grapes to be packed in new and clean boxes which 
meet the requirements of sections 1380.14, 1380.19, 1436.37, and 
1436.38 of Title 3: California Code of Regulations (CCR). That section 
also authorizes nine containers that can be used for domestic and 
export shipments, and specifies dimensions for each such container. An 
additional container, defined in terms of a net weight of 5 kilograms, 
is authorized for export shipments only. All 10 authorized containers 
may be used for export shipments. Only the first nine can be used for 
domestic shipments.
    Finally, Sec. 925.304(b)(1) authorizes the Committee to approve 
other containers for experimental or research purposes.
    Section 925.304(b)(2) of the order's administrative rules and 
regulations provides that grapes in any containers weigh at least 20 
pounds based on the average net weight of grapes in a representative 
sample of containers. An exception is provided for grapes packed in 
experimental containers, or packed in bags or wrapped in plastic or 
paper. Containers of grapes packed in bags or wrapped in plastic or 
paper prior to being placed in these containers must meet a minimum net 
weight requirement of 18 pounds.
    There are no weight requirements specified for experimental 
containers.
    The Committee met on March 24, 1998, and unanimously recommended 
modifying Sec. 925.304 of the order's administrative rules and 
regulations to make the following changes:
    (1) Revise the minimum grade requirement for the period June 1, 
1998, through August 15, 1998, to allow a pilot test for the marketing 
of grapes which meet all the requirements of U.S. No. 1 Institutional 
except for the weight of clusters/bunches. The revision allows 
clusters/bunches as small as a 2 berry cluster and as large as 19 
ounces in weight. Grapes meeting these quality requirements are to be 
marked ``DGAC Consumer No. 1 Institutional'' but cannot be marked 
``Institutional Pack.''
    (2) Authorize an experimental master container, containing 
individual consumer packages of grapes which weigh 1\1/2\ pounds or 
less, net weight, for use during the pilot test period of June 1, 1998, 
to August 15, 1998. Grapes meeting the ``DGAC Consumer No. 1 
Institutional'' requirements must be packed in this container and this 
master container can only be used for packing the ``DGAC Consumer No. 1 
Institutional'' grade.
    Currently, during the period April 20 through August 15 each year, 
California grape handlers can ship grapes meeting at least U.S. No. 1 
Table, U.S. No. 1 Institutional, or DGAC No. 1 Institutional.
    The requirements of the U.S. No. 1 Institutional are essentially 
the same as those of the U.S. No. 1 Table grade, with three major 
exceptions. The first difference relates to bunch size. Under the U.S. 
No. 1 Table grade, there is a minimum bunch size requirement of 4 
ounces and no maximum bunch size. Under the U.S. No. 1 Institutional 
grade, grapes are to consist of at least a two berry cluster ranging to 
clusters and/or bunches of grapes not greater than five ounces in 
weight. A cluster is two or more berries sharing a common point of 
attachment.
    The second difference is that at least 95 percent of the containers 
in a lot of grapes grading U.S. No. 1 Institutional must be legibly 
marked ``Institutional Pack.'' There are no marking requirements under 
the U.S. No. 1 Table grade.
    The third difference relates to the tolerances for off-size 
bunches. For grapes grading U.S. No. 1 Table, an 8 percent tolerance is 
established for all grade requirements, including off-size bunches. The 
U.S. No. 1 Institutional grade has a separate tolerance of 4 percent 
for off-size clusters/bunches and an 8 percent tolerance for the 
remaining grade requirements.
    Requirements for the DGAC No. 1 Institutional are the same as for 
the U.S. No. 1 Institutional, except that the tolerance for off-size 
bunches is 33 percent. Because grapes meeting these requirements do not 
meet the U.S. No. 1 Institutional grade requirements, they cannot be 
marked ``Institutional Pack.'' They may, however, be marked ``DGAC No. 
1 Institutional.''
    Recently, there has been interest in packing grapes in individual 
consumer packages known as ``punits'' or ``clamshells.'' These 
containers, used most commonly to pack strawberries, are made of a 
clear, hard rigid plastic and typically hold a half pound or a pound of 
fruit. Some retailers prefer these containers because they are of the 
same net weight, and can be scanned at check-out. This is particularly 
convenient for retailers that do not have facilities for weighing 
produce, such as convenience stores and fast food outlets. Some 
consumers also prefer the convenience of prepackaged individual 
portions of fruit.
    To meet changing market requirements, California grape handlers 
would like to be able to pack these consumer packages. Current bunch 
size requirements make it difficult however. Grape bunches normally 
range in weight from 1/4 pound to 3 pounds. Thus, portions of bunches 
have to be used to fill the new packages to the weights desired by 
buyers. Handlers have determined that increasing the range of 
permissible bunch sizes to allow for clusters/bunches of two berries to 
19 ounces will provide handlers the flexibility needed to pack grapes 
in the desired consumer containers.
    This rule revises Sec. 925.304(a) of the order's rules and 
regulations to allow handlers to ship a new grade of grapes to be known 
as DGAC Consumer No. 1 Institutional. The name recognizes that such 
grapes will be packed in consumer packages and that the grapes are not 
packed to the minimum requirements of the U.S. No. 1 Table grade. 
Grapes meeting this requirement must meet the requirements of the U.S. 
No. 1 Institutional grade, except for the cluster/bunch size 
requirements. Specifically, these modified requirements allow shipments 
with clusters/bunches ranging from 2 berry clusters to clusters/bunches 
of grapes up to 19 ounces in weight.
    The Committee recommended that grapes packed in accordance with the 
new DGAC Consumer No. 1 Institutional requirements be packed in a 
certain way. These grapes must be packed in individual consumer 
packages. The consumer packages must then be packed in a master 
container.
    Typically, the individual consumer packages hold either \1/2\ or 1 
pound of fruit. To allow for normal shrinkage during handling, handlers 
generally

[[Page 28479]]

pack a slightly greater weight than is desired at retail. Section 
925.304(b) is revised to provide that DGAC Consumer No. 1 Institutional 
grade grapes be packed in master containers containing individual 
consumer packages weighing 1\1/2\ pounds or less.
    Additionally, these master containers are required to be marked 
``DGAC Consumer No. 1 Institutional'' to accurately reflect their 
contents. The individual consumer packages do not need to be so marked. 
Other container marking requirements appearing in the regulation apply 
to the master containers as well.
    The master containers used for these grapes will typically hold 10 
consumer packages weighing 1 pound each or 20 packages weighing \1/2\ 
pound each. Thus, these containers are exempt from the net weight 
requirements of 18 or 20 pounds specified in Sec. 925.304(b)(2).
    Section 8e of the Act specifies that whenever certain commodities, 
like grapes, are regulated under a Federal order, imports of those 
commodities must meet the same or comparable grade, size, quality, and 
maturity requirements as those in effect for the domestically produced 
commodity. Pack and container requirements are not authorized by 
section 8e. Thus, the revised grade requirements implemented by this 
rule apply to imported grapes; none of the container or container 
marking requirements apply, however. If desired, importers may label 
containers of grapes meeting the modified U.S. No. 1 Institutional 
requirements as ``DGAC Consumer No. 1 Institutional.'' Specifically, 
this rule modifies language in Sec. 944.503(a)(1) of the Table Grape 
Import Regulation 4 for fresh grapes imported into the United States.
    This regulation provides handlers and importers more marketing 
flexibility, is estimated to result in increased shipments of consumer-
sized grape packs, and is expected to have positive impact on 
California grape handlers and importers of grapes. The changes address 
the marketing and shipping needs of the grape industry, and are in the 
interest of handlers, producers, importers, and consumers.
    During the last several seasons, Mexico has been the largest 
exporter of grapes to the United States during the June 1 through 
August 15 period. Chile and Italy have exported small quantities of 
grapes to the U.S. during this same period. Chile is the dominant 
exporting country from December through May each year.
    During the pilot test period of June 1, 1998, through August 15, 
1998, imports are estimated to total 5.5 million lugs from Mexico, 33 
thousand lugs from Chile, and approximately 4 thousand lugs from Italy. 
These estimates are based upon lug weights of 18 pounds.
    According to Department inspection officials, minimal quantities of 
grapes meeting the institutional grades have been imported since the 
``Institutional Pack'' was implemented. Based on historical data, it is 
estimated that approximately .5 percent to 1 percent of the imported 
lugs will meet the requirements of either the ``U.S. No. 1 
Institutional'' or the ``DGAC No. 1 Institutional'' grades. It is 
further estimated that less than 1 percent of the imported lugs will 
meet the requirements of the ``DGAC Consumer No. 1 Institutional'' 
grade. The majority of imported grapes meet the higher grade 
requirements of U.S. No. 1 Table, U.S. Fancy Table, or U.S. Extra Fancy 
Table.
    The Committee estimates the 1998 domestic crop will be 
approximately 8 million lugs. Domestic handlers in southeastern 
California, regulated under the order, are expected to ship 
approximately 6.2 million lugs during the test period. It is estimated 
that approximately .5 percent (31,000 lugs) to 1 percent (62,000 lugs) 
of the crop will be packed as U.S. No. 1 Institutional or DGAC No. 1 
Institutional and that less than 1 percent (62,000 lugs) of the crop 
will be packed as ``DGAC Consumer No. 1 Institutional'' during the test 
period. The estimates for the DGAC Consumer No. 1 Institutional are 
based upon a lug weight of 10 pounds. The Committee estimated that 
handlers will receive approximately $0.60 to $1.00 per pound for a 
total estimated value of $372,000 to $620,000 for this new individual 
consumer pack. Handlers will receive approximately $0.10 more for the 
new consumer packages than for bagged grapes. Consumers will benefit by 
being able to purchase grapes in preferred containers.
    The Committee requested that this rule be effective by June 1, 
1998. The California grape shipping season is expected to begin 
shortly, and continue until August 15, 1998. Therefore, an effective 
date of June 1 will allow handlers and importers approximately 10 weeks 
to test the market.
    At the meeting, the Committee discussed the potential impact of 
this rule and determined that this action will not require any changes 
in grape handling practices. Those who choose to pack to this new grade 
could achieve additional sales which will be a benefit to the grape 
industry as a whole.
    The benefits of this rule are not expected to be disproportionately 
greater or smaller for small handlers or producers than for larger 
entities.
    The Committee discussed alternatives to this revision, including 
not having a pilot test, but determined that handlers, producers, 
importers and consumers should benefit from this pilot test.
    The Committee also discussed adding a percentage tolerance for off-
size bunches of 33 percent similar to the additional percentage 
tolerance allowed for the DGAC No. 1 Institutional grade, but 
determined that the 4 percent tolerance, as contained in the Standards, 
was adequate to facilitate packaging of the ``punits'' or 
``clamshells''.
    This action will not impose any additional reporting or 
recordkeeping requirements on either small or large grape handlers or 
importers. 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. In addition, the 
Department has not identified any relevant Federal rules that 
duplicate, overlap or conflict with this rule.
    Further, the Committee's meeting was widely publicized throughout 
the grape industry and all interested persons were invited to attend 
the meeting and participate in Committee deliberations on all issues. 
Like all Committee meetings, the March 24, 1998, meeting was a public 
meeting and all entities, both large and small, were able to express 
their views on this issue. The Committee itself is composed of 12 
members: 8 are handlers and producers, 1 is a producer only, and 2 are 
handlers only. The twelfth Committee member is the public member. In 
addition, the embassies of Mexico, Chile, and Italy were notified of 
the anticipated action. Finally, interested persons are invited to 
submit information on the regulatory and informational impacts of this 
action on small businesses.
    After consideration of all relevant material presented, including 
the Committee'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 revises minimum grade 
requirements currently in effect for grapes grown in designated

[[Page 28480]]

areas of southeastern California and for grapes imported into the 
United States and offers handlers and importers more marketing 
flexibility; (2) California grape handlers are aware of this action 
which was unanimously recommended by the Committee at a public meeting. 
In addition, the embassies of Mexico, Chile, and Italy were notified of 
the anticipated action; (3) no changes in packing procedures are 
required by this rule for either California handlers or importers, and 
they will need no additional time to comply with the revised 
requirements; (4) California grape shipments are expected to begin 
soon, and this rule needs to be in effect by June 1, 1998, so handlers 
can test market acceptance for the remainder of the season; and (5) 
this rule provides a 30-day comment period and any comments received 
will be considered prior to finalization of this rule. For the same 
reasons, a 30-day comment period is deemed appropriate to provide for 
comments from interested persons. Further, the end of the 1998 season 
is August 15.
    In accordance with section 8e of the Act, the United States Trade 
Representative has concurred with the issuance of this rule.

List of Subjects

7 CFR Part 925

    Grapes, Marketing agreements, 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 925 and 944 
are amended as follows:
    1. The authority citation for 7 CFR parts 925 and 944 continues to 
read as follows:

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

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

    2. Section 925.304 is amended by revising the introductory text, 
paragraph (a) introductory text, paragraph (b)(1)(iii) and the first 
sentence of paragraph (b)(2) to read as follows:


Sec. 925.304  California Desert Grape Regulation 6.

    During the period April 20 through August 15 each year, no person 
shall pack or repack any variety of grapes except Emperor, Almeria, 
Calmeria, and Ribier varieties, on any Saturday, Sunday, Memorial Day, 
or the observed Independence Day holiday, unless approved in accordance 
with paragraph (e) of this section, nor handle any variety of grapes 
except Emperor, Calmeria, Almeria, and Ribier varieties, unless such 
grapes meet the requirements specified in this section.
    (a) Grade, size, and maturity. Except as provided in paragraphs 
(a)(1) and (a)(2) of this section, such grapes shall meet the minimum 
grade and size requirements of U.S. No. 1 Table, as set forth in the 
United States Standards for Grades of Table Grapes (European or 
Vinifera Type 7 CFR 51.880 through 51.914), or shall meet all the 
requirements of U.S. No. 1 Institutional with the exception of the 
tolerance percentage for bunch size. Such tolerance shall be 33 percent 
instead of 4 percent as is required to meet U.S. No. 1 Institutional 
grade. Grapes meeting these quality requirements may be marked ``DGAC 
No. 1 Institutional'' but shall not be marked ``Institutional Pack.'' 
In addition, during the period June 1, 1998, through August 15, 1998, 
grapes may be handled that meet all the requirements of U.S. No. 1 
Institutional, except that clusters/bunches must consist of at least a 
2 berry cluster ranging to clusters and/or bunches of grapes not 
greater than 19 ounces in weight. Such grapes must be marked ``DGAC 
Consumer No. 1 Institutional'' and meet the container requirements in 
paragraph (b)(1)(iii) of this section.
* * * * *
    (b) * * *
    (1) * * *
    (iii) Such other types and sizes of containers as may be approved 
by the Committee for experimental or research purposes: Provided, That 
for the period June 1, 1998, through August 15, 1998, master containers 
may be used if they are packed with individual consumer packs of grapes 
that weigh 1\1/2\ pounds or less, net weight, and meet the requirements 
of the ``DGAC Consumer No. 1 Institutional.'' Provided further, That 
grapes meeting the requirements of ``DGAC Consumer No. 1 
Institutional'' shall be packed only in this container, and this master 
container shall be marked ``DGAC Consumer No. 1 Institutional.''
    (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 containers authorized in paragraph (b)(1)(iii) of this 
section, shall be 20 pounds based on the average net weight of grapes 
in a representative sample of containers. * * *
* * * * *

PART 944--FRUITS; IMPORT REQUIREMENTS

    3. In Sec. 944.503, paragraphs (a)(1) introductory text and 
(a)(1)(ii) are revised to read as follows:


Sec. 944.503  Table Grape Import Regulation 4.

    (a)(1) Pursuant to section 8e of the Act and Part 944--Fruits, 
Import Regulations, the importation into the United States of any 
variety of Vinifera species table grapes, except Emperor, Calmeria, 
Almeria, and Ribier varieties, is prohibited unless such grapes meet 
the minimum grade and size requirements specified in 7 CFR 51.884 for 
U.S. No. 1 Table, as set forth in the United States Standards for 
Grades of Table Grapes (European or Vinifera Type, 7 CFR 51.880 through 
51.914), or shall meet all the requirements of U.S. No. 1 Institutional 
with the exception of the tolerance for bunch size. Such tolerance 
shall be 33 percent instead of 4 percent as is required to meet U.S. 
No. 1 Institutional grade. Grapes meeting these quality requirements 
shall not be marked ``Institutional Pack'', but may be marked ``DGAC 
No. 1 Institutional.'' In addition, during the period June 1, 1998, 
through August 15, 1998, grapes may be imported if they meet all the 
requirements of U.S. No. 1 Institutional, except that clusters/bunches 
must consist of at least a 2 berry cluster ranging to clusters and/or 
bunches of grapes not greater than 19 ounces (0.532 kilograms) in 
weight. Such grapes may be marked ``DGAC Consumer No. 1 Institutional'' 
but shall not be marked ``Institutional Pack.''
* * * * *
    (ii) Grapes of the Flame Seedless variety shall meet the minimum 
berry size requirement of ten-sixteenths of an inch (1.5875 
centimeters) and shall be considered mature if the juice contains not 
less than 15 percent soluble solids and the soluble solids are equal to 
or in excess of 20 parts to every part acid contained in the juice in 
accordance with applicable sampling and testing procedures specified in 
sections 1463.3, 1436.5, 1436.6, 1436.7, 1436.12, and 1436.17 of 
Article 25 of Title 3: California Code of Regulations (CCR).
* * * * *
    Dated: May 19, 1998.
Robert C. Keeny,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-13881 Filed 5-22-98; 8:45 am]
BILLING CODE 3410-02-P