[Federal Register Volume 64, Number 122 (Friday, June 25, 1999)]
[Proposed Rules]
[Pages 34144-34154]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-16209]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 920

[Docket No. FV98-920-4 PR]


Kiwifruit Grown in California; Changes in Minimum Size, Pack, 
Container, and Inspection Requirements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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

SUMMARY: This rule invites comments on proposed changes to the minimum 
size, pack, container, and inspection requirements prescribed under the 
California kiwifruit marketing order. The marketing order regulates the 
handling of kiwifruit grown in California and is administered locally 
by the Kiwifruit Administrative Committee (Committee). This rule would 
specify minimum size requirements for all kiwifruit as a maximum of 55 
pieces of fruit in an 8-pound sample regardless of pack style; require 
that individual consumer packages placed directly on a pallet be 
stamped with the applicable inspection lot number; and make minor 
changes to clarify pack and container marking requirements for several 
containers. In addition, this rule proposes to continue, for the 1999-
2000 season, the suspension of minimum net weight requirements for 
kiwifruit tray packs scheduled to expire at the end of the 1998-1999 
season. Also, proposed to be continued for the 1999-2000 season is

[[Page 34145]]

the suspension of the requirement that fruit must be reinspected if it 
has not been shipped by specified dates. These changes would clarify 
the minimum size, pack, and container requirements, and are expected to 
reduce handler packing costs, increase producer returns, and enable 
handlers to compete more effectively in the marketplace.

DATES: Comments must be received by July 15, 1999.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposal. Comments must be sent to the Docket Clerk, 
Fruit and Vegetable Programs, AMS, USDA, room 2525-S, PO. Box 96456, 
Washington, DC 20090-6456; Fax: (202) 720-5698; or E-mail: 
[email protected]. All comments should reference the docket 
number and the date and page number of this issue of the Federal 
Register and will be made available for public inspection in the Office 
of the Docket Clerk during regular business hours.

FOR FURTHER INFORMATION CONTACT: 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: (559) 487-5901, Fax: (559) 487-5906; or 
George Kelhart, Technical Advisor, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, room 2525-S, PO. Box 
96456, Washington, DC 20090-6456; telephone: (202) 720-2491, Fax: (202) 
720-5698. Small businesses may request information on compliance with 
this regulation or obtain a guide on complying with fruit, vegetable, 
and speciality crop marketing agreements and orders by contacting Jay 
Guerber, Marketing Order Administration Branch, Fruit and Vegetable 
Programs, AMS, USDA, PO. Box 96456, room 2525-S, Washington, DC 20090-
6456; telephone: (202) 720-2491, Fax: (202) 720-5698, or E-mail 
Jay.G[email protected]. You may view the marketing agreement and order 
small business compliance guide at the following web site: http://
www.ams.usda.gov/fv/moab.html.

SUPPLEMENTARY INFORMATION: This proposal is issued under Marketing 
Order No. 920, as amended (7 CFR part 920), regulating the handling of 
kiwifruit 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.''
    The Department of Agriculture (Department) is issuing this proposed 
rule in conformance with Executive Order 12866.
    This proposal has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule is not intended to have retroactive effect. 
This proposal 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.
    This proposal invites comments on changes to minimum size, pack, 
container, and inspection requirements prescribed under the California 
kiwifruit marketing order. The marketing order regulates the handling 
of kiwifruit grown in California and is administered locally by the 
Committee.
    This rule would specify the minimum size requirements for all 
kiwifruit as a maximum of 55 pieces of fruit in an 8-pound sample 
regardless of pack style; require that individual consumer packages 
placed directly on a pallet be stamped with the applicable inspection 
lot number; and make minor changes to clarify pack and container 
marking requirements for several containers.
    In addition, this rule proposes to continue, for the 1999-2000 
season, the suspension of the minimum net weight requirements in 
Sec. 920.302 (a)(4)(iii) for kiwifruit packed in containers with cell 
compartments, cardboard fillers, or molded trays scheduled to expire at 
the end of the 1998-1999 season. This suspension action was implemented 
by an interim final rule published last September (63 FR 46861; 
September 3, 1998). No comments were received pursuant to the request 
for comments in the interim final rule. A final rule published last 
August suspended the requirement in Sec. 920.155 that fruit must be 
reinspected if it has not been shipped by specified dates for the 1998-
1999 season (63 FR 41390 August 4, 1998). This rule also proposes to 
continue the suspension of this requirement for the 1999-2000 season. 
The proposed changes were unanimously recommended by the Committee. 
These changes would clarify the minimum size, pack, and container 
requirements, and are expected to reduce handler packing costs, 
increase producer returns, and enable handlers to compete more 
effectively in the marketplace.
    The interim final rule published last September also increased the 
size variation tolerance, from 10 percent, by count, in any one 
container, to 25 percent, by count, for Size 42 kiwifruit, and the 
maximum number of fruit per 8-pound sample for Sizes 42, 39, 36, 33, 
and 30 of kiwifruit packed in bags, volume fill, or bulk containers for 
the 1998-1999 and future seasons. No changes to these provisions are 
proposed in this action.
    In early November 1998, the Department determined that suspending 
the minimum net weight requirements as specified in 
Sec. 920.302(a)(4)(iii) without redefining the size designation 
definition in Sec. 920.302 (b)(2) had inadvertently limited application 
of the minimum size requirements to volume fill packs.
    The Committee met on November 19, 1998, and clarified that its 
original intent had been to maintain the minimum size requirement on 
all kiwifruit regardless of pack style. The Committee discussed 
changing the regulatory language so that minimum size would apply to 
all pack styles for the remainder of the 1998-1999 season, but 
concluded that it would be unfair to growers and handlers to change 
this requirement in mid-season. The Committee believed that orderly 
marketing would continue as harvest was nearly completed at the time of 
the November 1998 meeting and because a small amount of minimum size 
kiwifruit had been packed in trays.
    The Committee met again on January 13, 1999, to discuss industry 
issues and to make preliminary recommendations for the 1999-2000 
season. The Committee concluded that the recommended changes made for 
the 1998-1999 season had benefitted the industry. Both small and large 
handlers were able to reduce packing costs and compete more effectively 
in the marketplace because of the relaxations made to the requirements.
    The Committee made the following preliminary recommendations for 
the 1999-2000 season: (1) Specify that minimum size requirements apply 
to all kiwifruit regardless of pack style and define Size 45 in terms 
of weight and

[[Page 34146]]

not pack requirements; (2) make minor changes to clarify pack and 
container marking requirements for several containers; (3) continue the 
suspension of the requirement that fruit must be reinspected if it has 
not been shipped by specified dates for the 1999-2000 season; and (4) 
continue the suspension of the minimum net weight requirements for 
kiwifruit packed in containers with cell compartments, cardboard 
fillers, or molded trays for the 1999-2000 season.
    Later in January, the kiwifruit industry held meetings in Northern 
and Southern California to further study the minimum size issue. 
Studies showed that while Size 45 fruit filled Size 45 cell cups well 
during the 1998-1999 season, the fruit packed would not have met the 
suspended minimum net weight requirement of 6.5 pounds because of an 
outdated cup size used in the Size 45 tray. A Size 45 tray of kiwifruit 
weighing a minimum of 6.5 pounds is equivalent to a maximum of 55 
pieces of fruit in an 8-pound sample. Based on these findings, the 
Committee determined that the minimum net weight requirements for Size 
45 should be studied further.
    The Committee met on February 25, 1999, and unanimously recommended 
the following changes and clarifications for the 1999-2000 season: (1) 
Specify that the minimum size requirements be defined as a maximum of 
55 pieces of fruit in an 8-pound sample and that the minimum size 
requirements should apply to all kiwifruit regardless of pack style; 
(2) require that individual consumer packages placed directly on a 
pallet be stamped with the applicable inspection lot number; (3) make 
minor changes to clarify pack and container marking requirements for 
several containers; (4) continue the suspension of the minimum net 
weight requirements for kiwifruit packed in containers with cell 
compartments, cardboard fillers, or molded trays for the 1999-2000 
season; and (5) continue the suspension of the requirement that fruit 
must be reinspected if it has not been shipped by specified dates for 
the 1999-2000 season. The Committee further recommended that all rules 
and regulation changes begin as soon as possible to enable handlers to 
make operational decisions in time for the 1999-2000 harvest and 
shipping season.

New Proposed Changes for the 1999-2000 Season

Clarification of the Minimum Size Requirements

    Under the terms of the order, fresh market shipments of kiwifruit 
grown in California are required to be inspected and meet grade, size, 
maturity, pack, and container requirements. Section 920.52 authorizes 
the establishment of minimum size, pack, and container requirements. 
Section 920.302(a)(2) of the order's rules and regulations outlines the 
minimum size requirements for fresh shipments of California kiwifruit 
and provides that such kiwifruit shall be at least a minimum Size 45.
    Section 920.302(a)(4)(iii) specifies minimum net weight 
requirements for fruit of various sizes packed in containers with cell 
compartments, cardboard fillers, or molded trays.
    Section 920.302(b)(2) of the order's rules and regulations defines 
size designation to mean the same as defined in the table in paragraph 
(a)(4)(iii) of this section.
    As previously mentioned, the Committee unanimously recommended 
suspending the minimum net weight requirements specified in 
Sec. 920.302(a)(4)(iii) for the 1998-1999 season. This recommendation 
was implemented through an interim final rule published September 3, 
1998 (63 FR 46861).
    In early November 1998, the Department determined that suspending 
Sec. 920.302(a)(4)(iii) without redefining the size designation 
definition in Sec. 920.302(b)(2) had inadvertently limited application 
of the minimum size requirements to volume fill packs.
    The Committee members attended a meeting in November 1998 and again 
in January 1999 wherein they clarified their initial intent, and set 
preliminary recommendations for the 1999-2000 season.
    The Committee met on February 25, 1999, unanimously recommended 
that kiwifruit be at least a minimum Size 45, and that Size 45 be 
defined in terms of weight and not pack requirements. Size 45 was 
defined as a maximum of 55 pieces of fruit in an 8-pound sample. This 
recommendation reflects the Committee's original intent to apply 
uniform minimum size requirements to all kiwifruit regardless of pack 
style. To further clarify its intent, the Committee recommended adding 
the size definition to the size requirements in Sec. 920.302(a)(2), 
deleting the size designation definition in Sec. 920.302(b)(2), and 
defining Size 45 in terms of weight and not pack.
    The Committee considered establishing a count of 58 or 59 pieces of 
slightly smaller fruit for the Size 45 trays, but concluded that the 
count should remain a maximum of 55 pieces of fruit per 8-pound sample 
because the current minimum size continues to prevent shipments of low-
quality, undersized fruit, and because repacking problems during the 
1998-1999 season resulted from an outdated cup size in the Size 45 tray 
and not from the current minimum size.
    Over the years, the size designation for Size 45 has changed, but 
the tray inserts for this size fruit have not changed. In 1989, the 
size designation for Size 45 was changed to 57 pieces of fruit per 8-
pound sample and remained there until 1994, when Size 45 became the 
minimum size and was defined as 55 pieces of fruit per 8-pound sample.
    Kiwifruit was not packed in Size 45 trays during the three seasons 
preceding the 1998-1999 season as it was not profitable for growers. A 
small amount of kiwifruit was packed during the 1998-1999 season. The 
Committee believes the molded trays utilized during the 1998-1999 
season were manufactured prior to 1994, that the cell cups of these 
molded trays were designed to fit smaller fruit, and that the size of 
the cups contributed to the packing problems associated with Size 45 
trays during the 1998-1999 season.
    Tray manufacturers attending Committee meetings in January and 
February 1999 expressed interest in working with the industry in 
developing molded tray inserts with slightly larger cell cups for Size 
45 trays. These slightly larger cell cups would allow slightly larger 
fruit to be packed and thus enable the minimum size requirements to be 
met.
    As a result, the Committee unanimously recommended that the minimum 
size for all pack styles be established as a maximum of 55 pieces of 
fruit in an 8-pound sample. These changes would not impact the 
kiwifruit import regulation implemented under section 8e of the Act, 
because this recommendation would only clarify that the minimum size 
requirements apply to all shipments.
    The Committee further recommended that all rules and regulation 
changes begin as soon as possible to enable handlers to make 
operational decisions in time for the 1999-2000 harvest and shipping 
season.

Lot Stamp Requirement

    Section 920.303 of the order's rules and regulations outlines 
container marking requirements for fresh shipments of California 
kiwifruit.
    Section 920.303(d) requires all exposed or outside containers of 
kiwifruit, but not less than 75 percent of the total containers on a 
pallet, to be plainly marked with the lot stamp number corresponding to 
the lot inspection conducted by an authorized

[[Page 34147]]

inspector. Individual consumer packages and containers that are being 
directly loaded into a vehicle for export shipment under the 
supervision of the Federal or Federal-State Inspection Service are not 
subject to these requirements.
    Prior to the 1998-1999 season, handlers did not place individual 
consumer packages directly on pallets for shipping. Individual consumer 
packages were placed in master containers and the master containers 
bore the container marking requirements.
    During the 1998-1999 season, new individual consumer packages that 
interlock and fit on a pallet were utilized. These individual consumer 
packages are stacked six packages by six packages on a pallet resulting 
in 36 individual consumer packages per layer. Pallets are normally 
stacked 8-10 layers high. The Committee determined that this style of 
container would not meet the current marking requirements of not less 
than 75 percent of the total containers on a pallet being plainly 
marked with the lot stamp number. Due to the size and configuration of 
the interlocking individual consumer packages, approximately 57 percent 
of the individual consumer packages would be marked if all exposed or 
outside containers are marked with the lot stamp number.
    Therefore, when the Committee met on February 25, 1999, they 
unanimously recommended adding language to Sec. 920.303(d) that would 
require individual consumer packages placed directly on a pallet to 
have all exposed containers plainly marked with the lot stamp number 
corresponding to the lot inspection conducted by an authorized 
inspector or that a total of four placards be applied to the pallet of 
kiwifruit. The Committee believes that relaxing the requirement to have 
all exposed or outside containers and at least 75 percent of the 
containers on the pallet marked with the lot stamp number, would allow 
handlers to ship individual consumer packages without incurring the 
additional costs of marking containers that are not exposed, and 
slowing down the packing line to mark the containers.

Changes to Clarify Pack and Container Marking Requirements

    Section 920.303 of the order's rules and regulations outlines 
container marking requirements for fresh shipments of California 
kiwifruit.
    Section 920.303(c)(3) establishes how the quantity shall be marked 
on bulk bins and requires the quantity to be indicated in terms of the 
size designation and net weight; or in terms of the size designation, 
net weight, and count.
    Section 920.303(c)(5) establishes how the quantity shall be marked 
on individual consumer packages and requires that the quantity shall be 
indicated in terms of either net weight or count (or both) for 
individual consumer packages. It further requires that if count is 
used, it must be accompanied by the size designation.
    At the February 25, 1999, meeting, the Committee recommended the 
following changes to pack requirements in Secs. 920.302(a)(4)(ii) and 
(iv): (1) Change language in the first table of Sec. 920.302(a)(4)(ii) 
as follows: Change ``Sizes'' to ``Count,'' change ``30 or larger'' to 
``30 or less,'' and change ``39 or smaller'' to ``39 or more''; (2) add 
language to Sec. 920.302(a)(4)(ii) to exclude individual consumer 
packages from the list of containers that utilize the size variation 
tolerance table for kiwifruit packed in containers with cell 
compartments, cardboard fillers, or molded trays; (3) change language 
in the second table of Sec. 920.302(a)(4)(ii) from ``Sizes'' to ``Size 
Designation''; (4) change language in Sec. 920.302(a)(4)(ii) to add 
individual consumer packages to the list of containers which specifies 
size variation tolerances for kiwifruit packed in bags, volume fill, or 
bulk containers; and (5) change language in Sec. 920.302(a)(4)(iv) by 
adding ``individual consumer packages'' to the list of containers in 
the table specifying the numerical size and maximum number of fruit per 
8-pound sample; delete the word ``numerical'' when describing size; and 
delete the words ``Column 1,'' ``Column 2,'' and ``Numerical Count'' 
from the size designation table in Sec. 920.302(a)(4)(iv) as they are 
not necessary.
    These changes would: (1) Reflect current industry practices; (2) 
clarify that the size variation tolerances which are applied to fruit 
packed in volume fill containers are also applied to individual 
consumer packages; (3) clarify that the size designation chart is 
utilized to determine the maximum number of fruit per 8-pound sample 
for individual consumer packages; and (4) delete unnecessary language.
    The Committee also recommended the following changes to container 
requirements in Secs. 920.303(c)(3) and (5) as follows: (1) Change 
language in Sec. 920.303(c)(3) by adding ``individual consumer packages 
not within a master container'' to the list of containers in the size 
designation table specifying the size and maximum number of fruit per 
8-pound sample; (2) delete the word ``bins'' and replace it with 
``containers''; (3) delete the words ``net weight'' as they are not 
necessary; and (4) change language in Sec. 920.302(a)(5) by adding 
``within a master container'' after individual consumer packages.
    These changes would ensure that marking requirements are clearly 
defined for individual consumer packages placed directly on a pallet as 
well as those packed within a master container.

Continuation of 1998-1999 Season Suspended Actions for the 1999-
2000 Season

Continued Suspension of Minimum Net Weight Requirements for Trays

    Section 920.302(a)(4) of the order's rules and regulations outlines 
pack requirements for fresh shipments of California kiwifruit.
    Section 920.302(a)(4)(iii) specifies minimum net weight 
requirements for fruit of various sizes packed in containers with cell 
compartments, cardboard fillers, or molded trays.
    Prior to the 1989-1990 season, there were no minimum tray weight 
requirements although 73.5 percent of the crop was packed in trays. 
During the 1989-1990 season, minimum tray weights were mandated, as 
there were many new packers involved in the kiwifruit packing process 
and stricter regulations were viewed as necessary to provide uniform 
container weights for each size. However, since that season the 
proportion of the crop packed in trays has steadily declined.
    During the 1997-1998 season, only 15.5 percent of the crop was 
packed into molded trays and less than 1 percent of this fruit was 
rejected for failure to meet minimum tray weights. As a consequence, 
the Committee believed that minimum tray weight requirements might no 
longer be necessary to maintain uniformity in the marketplace.
    Prior to the 1998-1999 season handlers were required to meet the 
minimum net weight requirements as shown in the following chart:

------------------------------------------------------------------------
                                                             Minimum net
                                                              weight of
                Count designation of fruit                      fruit
                                                              (Pounds)
------------------------------------------------------------------------
34 or larger..............................................         7.5
35 to 37..................................................         7.25
38 to 40..................................................         6.875
41 to 43..................................................         6.75
44 and smaller............................................         6.5
------------------------------------------------------------------------

    The Committee met on July 8, 1998, and unanimously recommended 
suspension of the minimum net weight requirements for kiwifruit packed 
in cell compartments, cardboard fillers, or molded trays for the 1998-
1999 season.

[[Page 34148]]

Section 920.302(a)(4)(iii) was suspended for the 1998-1999 season by an 
interim final rule published September 3, 1998 (63 FR 14861).
    As previously mentioned, both small and large handlers were able to 
reduce packing costs and to compete more effectively in the market 
during the 1998-1999 season because of the relaxation in packing 
requirements. The industry continued to pack well filled trays without 
having to spend the extra time weighing them. There was no reduction in 
the uniform appearance of fruit packed into trays.
    Therefore, when the Committee met on January 13, 1999, to consider 
its preliminary recommendations for the season, it concluded that 
minimum net weight requirements for trays should continue to be 
suspended for the 1999-2000 season.
    The Committee met on February 25, 1999, and unanimously recommended 
continuing the suspension of Sec. 920.302(a)(4)(iii) for the 1999-2000 
season. The 1999-2000 season ends July 31, 2000. The Committee plans to 
further evaluate the benefits during the 1999-2000 season.

Continued Suspension of Reinspection Requirement

    Section 920.55 of the order requires that prior to handling any 
variety of California kiwifruit, such kiwifruit shall be inspected by 
the Federal or Federal-State Inspection Service (inspection service) 
and certified as meeting the applicable grade, size, quality, or 
maturity requirements in effect pursuant to Sec. 920.52 or Sec. 920.53.
    Section 920.55(b) provides authority for the establishment, through 
the order's rules and regulations, of a period prior to shipment during 
which inspections must be performed.
    Prior to its suspension for 1998-1999 season, Sec. 920.155 of the 
order's rules and regulations specified that the certification of 
grade, size, quality, and maturity of kiwifruit pursuant to Sec. 920.52 
or Sec. 920.53 during each fiscal year is valid until December 31 of 
such year or 21 days from the date of inspection, whichever is later. 
Any inspected kiwifruit to be shipped after the certification period 
lapses was required to be reinspected and recertified before shipment.
    Section 920.155 was suspended for the 1998-1999 season by a final 
rule published August 1, 1998 (63 FR 41390). The Committee recommended 
this suspension to lessen the expenses upon the many kiwifruit growers 
who had either lost money or merely recovered their production costs in 
recent years. It concluded that the cost of reinspecting kiwifruit was 
too high to justify requiring it in view of the limited benefit 
reinspection provides. The Committee also believed it was no longer 
necessary to have fruit reinspected to provide consumers with a high 
quality product because storage and handling operations had improved in 
the industry.
    During the 1998-1999 season, handlers voluntarily checked stored 
fruit prior to shipment to ensure that the condition of the fruit had 
not deteriorated. This enabled handlers to ship quality kiwifruit 
during the 1998-1999 season without the necessity for reinspection and 
recertification and the costs associated with such requirements. The 
Committee had estimated that handlers would save $50,000 by conducting 
their own reinspection during the 1998-1999 season.
    At the February 25, 1999, meeting, the Committee unanimously 
recommended suspending Sec. 920.155 for the 1999-2000 season. The 
Committee still believes that handlers saved $50,000 by conducting 
their own reinspection during the 1998-1999 season even though the 
marketed crop was less than projected, more fruit was in-line inspected 
than projected, and shipments had started later during the 1998-1999 
season than anticipated.
    Although freezing temperatures and winds during the spring may 
reduce the size of the 1999-2000 crop, the Committee believes the 
industry would continue to benefit from conducting its own 
reinspection.
    The Committee would like to evaluate this suspension one more 
season before making a decision to permanently remove this requirement 
from the rules and regulations. Thus, the Committee unanimously 
recommended suspending Sec. 920.155 for the 1999-2000 season. The 1999-
2000 season ends July 31, 2000.

Maintaining Current Regulatory Changes

Maintaining the Current Size Variation Tolerance for Size 42 Kiwifruit

    Section 920.302(a)(4) of the order's rules and regulations outlines 
pack requirements for fresh shipments of California kiwifruit.
    Section 920.302(a)(4)(ii) specifies size variation ranges in terms 
of fruit diameter for each size of kiwifruit and size variation 
tolerances.
    Section 920.302(a)(4)(ii) was revised by an interim final rule 
published September 3, 1998 (63 FR 46861) to include a provision to 
increase the size variation tolerance for Size 42 kiwifruit from 10 
percent, by count, to 25 percent, by count.
    During the 1998-1999 season a significantly smaller amount of 
kiwifruit was packed into the 40 series sizes than anticipated. Only 7 
percent of the fruit was packed into Size 42 containers, and only 15.3 
percent was packed into Size 42 and 45 containers. This is 
significantly less than the previous two years when 35 percent of the 
fruit was packed into the 40 series sizes.
    In addition, size variation was not a problem for Size 42 fruit 
during the 1998-1999 season, as the majority of the fruit was round and 
short and not a mixture of round and flat fruit. A typical crop has a 
mixture of round and flat fruit. A mixture of round and flat fruit is 
difficult to pack and slows down the packing line.
    The Committee believes that maintaining the increased size 
variation tolerance for Size 42 kiwifruit for the 1999-2000 season 
would continue to benefit the industry by easing the packing burden and 
reducing costs, while maintaining uniform looking boxes of fruit 
desired by customers.

Maintaining the Current Maximum Number of Fruit per 8-Pound Sample for 
Kiwifruit Packed in Bags, Volume Fill, or Bulk Containers

    Section 920.302(a)(4) of the order's rules and regulations outlines 
pack requirements for fresh shipments of California kiwifruit.
    Section 920.302(a)(4)(iv) establishes a maximum number of fruit per 
8-pound sample for each numerical count size designation for fruit 
packed in bags, volume fill, or bulk containers.
    Section 920.302(a)(4)(iv) was revised by an interim final rule 
published September 3, 1998 (63 FR 46861) to include a provision that 
increased the maximum number of fruit per 8-pound sample for Sizes 42 
through 30. Size 42 fruit is smaller than Size 30 fruit. The size 
designation chart below depicts these changes:

------------------------------------------------------------------------
                                                               Maximum
                                                              number of
                      Size designation                       fruit Per 8
                                                                pound
                                                                sample
------------------------------------------------------------------------
21.........................................................           22
25.........................................................           27
27/28......................................................           30
30.........................................................           33
33.........................................................           36
36.........................................................           42
39.........................................................           48
42.........................................................           53
45.........................................................           55
------------------------------------------------------------------------

    Currently, under the rules and regulations, kiwifruit packed in 
bags,

[[Page 34149]]

volume fill, or bulk containers, must not exceed the maximum number of 
fruit per an 8-pound sample for each size designation.
    Under the current regulations, handlers are better able to meet the 
needs of buyers, because kiwifruit sells by the piece, and buyers 
desire as much fruit in each container as the container can comfortably 
hold. California handlers are applying weight standards that are 
similar to those used by importers, thereby lessening confusion in the 
marketplace and facilitating the marketing of California kiwifruit.

Initial Regulatory Flexibility Analysis

    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 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 the 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 60 handlers of California kiwifruit subject 
to regulation under the marketing order and approximately 450 producers 
in the production area. Small agricultural producers are defined by the 
Small Business Administration (13 CFR 121.601) as those whose annual 
receipts are less than $500,000, and small agricultural service firms 
are defined as those whose annual receipts are less than $5,000,000. 
One of the 60 handlers subject to regulation has annual kiwifruit 
receipts of at least $5,000,000. This figure excludes receipts from any 
other sources. The remaining 59 handlers have annual receipts less than 
$5,000,000, excluding receipts from other sources. In addition, 10 of 
the 450 producers subject to regulation have annual sales of at least 
$500,000, excluding receipts from any other sources. The remaining 440 
producers have annual sales less than $500,000, excluding receipts from 
any other sources. Therefore, a majority of the kiwifruit handlers and 
producers may be classified as small entities.
    This proposal invites comments on changes to minimum size, pack, 
container, and inspection requirements prescribed under the California 
kiwifruit marketing order. The marketing order regulates the handling 
of kiwifruit grown in California and is administered locally by the 
Committee.
    This rule would specify the minimum size requirements for all 
kiwifruit as a maximum of 55 pieces of fruit in an 8-pound sample 
regardless of pack style; require that individual consumer packages 
placed directly on a pallet be stamped with the applicable inspection 
lot number; and make minor changes to clarify pack and container 
marking requirements for several containers.
    In addition, this rule proposes to continue, for the 1999-2000 
season, the suspension of the minimum net weight requirements in 
Sec. 920.302(a)(4)(iii) for kiwifruit packed in containers with cell 
compartments, cardboard fillers, or molded trays scheduled to expire at 
the end of the 1998-1999 season. This suspension action was implemented 
by an interim final rule published last September (63 FR 46861; 
September 3, 1998). A final rule published last August suspended, for 
the 1998-1999 season, the requirement in Sec. 920.155 that fruit must 
be reinspected if it has not been shipped by specified dates (63 FR 
41390; August 4, 1998). This rule also proposes to continue the 
suspension of this requirement for the 1999-2000 season.
    The proposed changes were unanimously recommended by the Committee. 
These changes would clarify the minimum size, pack, and container 
requirements, and are expected to reduce handler packing costs, 
increase producer returns, and enable handlers to compete more 
effectively in the marketplace.
    The interim final rule published last September also increased the 
size variation tolerance for Size 42 kiwifruit and the maximum number 
of fruit for the 8-pound sample for the 1998-1999 and future seasons. 
No changes to these provisions are proposed in this action.
    In early November 1998, the Department determined that suspending 
the minimum net weight requirements as specified in 
Sec. 920.302(a)(4)(iii) without redefining the size designation 
definition in Sec. 920.302(b)(2) had inadvertently limited application 
of the minimum size requirements to volume fill packs.
    The Committee met on November 19, 1998, and clarified that the 
intent of its July 8, 1998, recommendation had been to maintain the 
minimum size requirement on all kiwifruit regardless of pack style. The 
Committee discussed changing the regulatory language so that minimum 
size would apply to all pack styles for the remainder of the 1998-1999 
season, but concluded that it would be unfair to growers and handlers 
to change this requirement in mid-season. The Committee believed that 
orderly marketing would continue as harvest was nearly completed at the 
time of the November 1998 meeting and because a small amount of minimum 
size kiwifruit had been packed in trays.
    The Committee met again on January 13, 1999, to discuss industry 
issues and to make preliminary recommendations for the 1999-2000 
season. The Committee concluded that the recommended changes made for 
the season had benefitted the industry. Both small and large handlers 
were able to reduce packing costs and compete more effectively in the 
marketplace in the 1998-1999 season because of the relaxations made to 
the requirements.
    The Committee made the following preliminary recommendations for 
the 1999-2000 season: (1) Specify that minimum size requirements apply 
to all kiwifruit regardless of pack style and define Size 45 in terms 
of weight and not pack requirements; (2) make minor changes to clarify 
pack and container marking requirements for several containers; (3) 
continue the suspension of the requirement that fruit must be 
reinspected if it has not been shipped by specified dates for the 1999-
2000 season; and (4) continue the suspension of the minimum net weight 
requirements for kiwifruit packed in containers with cell compartments, 
cardboard fillers, or molded trays for the 1999-2000 season.
    Later in January the kiwifruit industry held meetings in Northern 
and Southern California to further study the minimum size issue. 
Studies showed that while Size 45 fruit filled Size 45 cell cups well 
during the 1998-1999 season, the fruit would not have met the suspended 
minimum net weight requirement of 6.5 pounds because of an outdated cup 
size used in the Size 45 tray. A Size 45 tray of kiwifruit weighing a 
minimum of 6.5 pounds is equivalent to a maximum of 55 pieces of fruit 
in an 8-pound sample. Based on these findings, the Committee determined 
that the minimum net weight requirements for Size 45 should be further 
evaluated.
    The Committee met on February 25, 1999, and unanimously recommended 
the following changes and clarifications for the 1999-2000 season: (1) 
Specify that the minimum size requirements be defined as a maximum of 
55 pieces of fruit in an 8-pound sample and that the minimum size 
requirements should apply to all kiwifruit regardless of pack style; 
(2) require that individual consumer packages placed directly on a 
pallet be stamped with the applicable inspection lot number; (3) make 
minor changes to clarify pack and container

[[Page 34150]]

marking requirements for several containers; (4) continue the 
suspension of the minimum net weight requirements for kiwifruit packed 
in containers with cell compartments, cardboard fillers, or molded 
trays for the 1999-2000 season; and (5) continue the suspension of the 
requirement that fruit must be reinspected if it has not been shipped 
by specified dates for the 1999-2000 season. The Committee further 
recommended that all rules and regulation changes begin as soon as 
possible to enable handlers to make operational decisions in time for 
the 1999-2000 harvest and shipping season.

New Proposed Changes for the 1999-2000 Season

Clarification of the Minimum Size Requirement

    Under the terms of the order, fresh market shipments of kiwifruit 
grown in California are required to be inspected and meet grade, size, 
maturity, pack, and container requirements. Section 920.52 authorizes 
the establishment of minimum size, pack, and container requirements. 
Section 920.302(a)(2) of the order's rules and regulations outlines the 
minimum size requirements for fresh shipments of California kiwifruit 
and provides that such kiwifruit shall be at least a minimum Size 45.
    Section 920.302(a)(4)(iii) specifies minimum net weight 
requirements for fruit of various sizes packed in containers with cell 
compartments, cardboard fillers, or molded trays.
    Section 920.302(b)(2) of the order's rules and regulations defines 
size designation to mean the same as defined in the table in paragraph 
(a)(4)(iii) of this section.
    Prior to the 1998-1999 season, the minimum size for kiwifruit was 
defined as a maximum of 55 pieces of fruit in an 8-pound sample 
regardless of pack style. As previously mentioned, a change of pack 
requirements recommended by the Committee last summer and implemented 
by an interim final rule published on September 3, 1998 (63 FR 46861) 
unintentionally limited application of minimum size requirements to 
volume fill containers. The Committee members attended a meeting in 
November 1998 and again in January 1999 wherein they clarified their 
initial intent, and set preliminary recommendations for the 1999-2000 
season.
    On February 25, 1999, the Committee unanimously recommended that 
kiwifruit be at least a minimum Size 45, and that Size 45 be defined in 
terms of weight and not pack requirements. The Committee recommended 
that Size 45 be defined as a maximum of 55 pieces of fruit in an 8-
pound sample. This recommendation reflects the Committee's original 
intent to apply uniform minimum size requirements to all kiwifruit 
regardless of pack style. To further clarify its intent, the Committee 
recommended adding the size definition to the size requirements in 
Sec. 920.302(a)(2), deleting the size designation definition in 
Sec. 920.302(b)(2), and defining Size 45 in terms of weight and not 
pack.
    The Committee considered other alternatives to maintaining Size 45, 
defined as a maximum of 55 pieces of fruit in an 8-pound sample, as the 
minimum size, but determined that these alternatives would not 
adequately address the industry's problems. The Committee discussed 
establishing two minimum net weight requirements, a lower net weight 
requirement for Size 45 fruit packed into trays and a higher net weight 
requirement for Size 45 kiwifruit packed into volume fill containers. 
This suggestion was not acceptable as the Committee believes pack style 
should not be the deciding factor in what size fruit is acceptable and 
that lower weights on trays would discriminate against Size 45 
kiwifruit packed into containers other than trays. In addition, members 
commented that packers of volume fill containers might then have to 
meet a more restrictive minimum size requirement than importers of 
kiwifruit, and that two different minimum size requirements could cause 
confusion in the marketplace and result in disorderly marketing.
    The Committee also considered establishing a count of 58 or 59 
pieces of fruit for the Size 45 trays, but concluded that the count 
should remain a maximum of 55 pieces of fruit per 8-pound sample 
because the current minimum size continues to prevent shipments of low-
quality, undersized fruit, and because repacking problems during the 
1998-1999 season resulted from an outdated cup size in the Size 45 tray 
and not from the current minimum size.
    Over the years, the size designation (pieces of fruit) for Size 45 
has changed, but the tray inserts for this size fruit have not changed. 
In 1989, the size designation for Size 45 was changed to 57 pieces of 
fruit per 8-pound sample and remained there until 1994, when Size 45 
became the minimum size and was defined as 55 pieces of fruit per 8-
pound sample.
    Kiwifruit was not packed in Size 45 trays during the three seasons 
preceding the 1998-1999 season as it was not profitable for growers. A 
small amount of kiwifruit was packed during the 1998-1999 season. The 
Committee believes that the molded trays utilized during the 1998-1999 
season were manufactured prior to 1994, that the cell cups of these 
molded trays were designed to fit smaller fruit, and that the size of 
the cups contributed to the packing problems associated with Size 45 
trays during the 1998-1999 season.
    Tray manufacturers attending Committee meetings in January and 
February 1999 expressed interest in working with the industry in 
developing molded tray inserts with slightly larger cell cups for Size 
45 trays. These slightly larger cell cups would allow slightly larger 
fruit to be packed and thus enable the minimum size requirements to be 
met.
    As a result, the Committee unanimously recommended that the minimum 
size for all pack styles be established as a maximum of 55 pieces of 
fruit in an 8-pound sample. These changes would not impact the 
kiwifruit import regulation implemented under section 8e of the Act, 
because this recommendation would only clarify that the minimum size 
requirement applies to all shipments regardless of pack style.
    The Committee further recommended that all rules and regulation 
changes begin as soon as possible to enable handlers to make 
operational decisions in time for the 1999-2000 harvest and shipping 
season.

Lot Stamp Requirement

    Section 920.303 of the order's rules and regulations outlines 
container marking requirements for fresh shipments of California 
kiwifruit.
    Section 920.303(d) requires all exposed or outside containers of 
kiwifruit, but not less than 75 percent of the total containers on a 
pallet, to be plainly marked with the lot stamp number corresponding to 
the lot inspection conducted by an authorized inspector. Individual 
consumer packages and containers that are being directly loaded into a 
vehicle for export shipment under the supervision of the Federal or 
Federal-State Inspection Service are not subject to this requirement.
    Prior to the 1998-1999 season, handlers did not place individual 
consumer packages directly on pallets for shipping. Individual consumer 
packages were placed in master containers and the master containers 
bore the container marking requirements.
    During the 1998-1999 season, new individual consumer packages that 
interlock and fit on a pallet were

[[Page 34151]]

utilized. These individual consumer packages are stacked six packages 
by six packages on a pallet resulting in 36 individual consumer 
packages per layer. Pallets are normally stacked 8-10 layers high. The 
Committee determined that this style of container would not meet the 
current marking requirements of not less than 75 percent of the total 
containers on a pallet being plainly marked with the lot stamp number. 
Due to the size and configuration of the interlocking individual 
consumer packages, approximately 57 percent of the individual consumer 
packages would be marked if all exposed or outside containers are 
marked with the lot stamp number.
    Therefore, when the Committee met on February 25, 1999, it 
unanimously recommended adding language to Sec. 920.303(d) that would 
require individual consumer packages placed directly on a pallet to 
have all exposed containers plainly marked with the lot stamp number 
corresponding to the lot inspection conducted by an authorized 
inspector or that a total of four placards be applied to the pallet of 
kiwifruit. The Committee believes that relaxing the requirement to have 
all exposed or outside containers and at least 75 percent of the 
containers on the pallet marked with the lot stamp number, would allow 
handlers to ship individual consumer packages without incurring the 
additional costs of marking containers that are not exposed, and 
slowing down the packing line to mark the containers.
    The Committee considered other alternatives to the requirement to 
stamp all exposed or outside containers, or to attach four placards to 
the pallet, but determined that these suggestions would not adequately 
address the positive lot identification requirements.
    One suggestion was to utilize one or two placards, but the industry 
believed that four placards (one on each side) would be a more adequate 
means of ensuring that the pallet met the positive lot identification 
(PLI) requirements.
    Another suggestion was to identify each package in such a way that 
it could be traced back to the original inspection certificate. Placing 
date codes or other types of codes on every container prior to 
palletizing and using that as PLI on the inspection certificate was 
discussed. The Committee did not adopt this suggestion as it believed 
that all containers, including those in the center stacks would have to 
be marked with a special code, and that this would be more restrictive 
than current requirements for other containers placed on pallets. The 
Committee also believed that this might slow down the packing process, 
thus resulting in increased packing costs.
    After considering the alternatives, the Committee unanimously 
recommended that individual consumer packages placed directly on a 
pallet have all exposed containers plainly marked with the lot stamp 
number corresponding to the lot inspection conducted by an authorized 
inspector or that a total of four placards be applied to the pallet of 
kiwifruit.

Changes To Clarify Pack and Container Marking Requirements

    Section 920.303 of the order's rules and regulations outlines 
container marking requirements for fresh shipments of California 
kiwifruit.
    Section 920.303(c)(3) establishes how the quantity shall be marked 
on bulk bins and requires the quantity to be indicated in terms of the 
size designation and net weight, or in terms of the size designation, 
net weight, and count.
    Section 920.303(c)(5) establishes how the quantity shall be marked 
on individual consumer packages and requires that the quantity shall be 
indicated in terms of either net weight or count (or both) for 
individual consumer packages. It further requires that if count is 
used, it must be accompanied by the size designation.
    At the February 25, 1999, meeting, the Committee recommended the 
following changes to pack requirements in Secs. 920.302(a)(4)(ii) and 
(iv): (1) Change language in the first table of Sec. 920.302(a)(4)(ii) 
as follows: Change ``Sizes'' to ``Count,'' change ``30 or larger'' to 
``30 or less,'' and change ``39 or smaller'' to ``39 or more'; (2) add 
language to Sec. 920.302(a)(4)(ii) to exclude individual consumer 
packages from the list of containers that utilize the size variation 
tolerance table for kiwifruit packed in containers with cell 
compartments, cardboard fillers, or molded trays; (3) change language 
in the second table of Sec. 920.302(a)(4)(ii) from ``Sizes'' to ``Size 
Designation'; (4) change language in Sec. 920.302(a)(4)(ii) to add 
individual consumer packages to the list of containers which specifies 
size variation tolerances for kiwifruit packed in bags, volume fill, or 
bulk containers; and (5) change language in Sec. 920.302(a)(4)(iv) by 
adding ``individual consumer packages'' to the list of containers that 
utilize the table which specifies the numerical size and maximum number 
of fruit per 8-pound sample; delete the word ``numerical'' when 
describing size; and delete the words ``Column 1,'' ``Column 2,'' and 
``Numerical Count'' from the size designation table in 
Sec. 920.302(a)(4)(iv) as they are not necessary.
    These changes would: (1) Reflect current industry practices; (2) 
clarify that the size variation tolerances which are applied to fruit 
packed in volume fill containers are also applied to individual 
consumer packages; (3) clarify that the size designation chart is 
utilized to determine the maximum number of fruit per 8-pound sample 
for individual consumer packages; and (4) delete unnecessary language.
    The Committee also recommended the following changes to container 
requirements in Secs. 920.303(c)(3) and (5) as follows: (1) Change 
language in Sec. 920.303(c)(3) by adding ``individual consumer packages 
not within a master container'' to the list of containers in the size 
designation table specifying the size and maximum number of fruit per 
8-pound sample; (2) delete the word ``bins'' and replace it with 
``containers'; (3) delete the words ``net weight'' as they are not 
necessary; and (4) change language in Sec. 920.302(a)(5) by adding 
``within a master container'' after individual consumer packages.
    These changes would ensure that marking requirements are clearly 
defined for individual consumer packages placed directly on a pallet as 
well as those packed within a master container.

Continuation of 1998-1999 Season Suspended Actions for the 1999-
2000 Season

Continued Suspension of Minimum Net Weight Requirements for Trays

    Section 920.302(a)(4) of the order's rules and regulations outlines 
pack requirements for fresh shipments of California kiwifruit.
    Before the suspension action last September, 
Sec. 920.302(a)(4)(iii) specified minimum net weight requirements for 
fruit of various sizes packed in containers with cell compartments, 
cardboard fillers, or molded trays.
    Prior to the 1989-1990 season, there were no minimum tray weight 
requirements although 73.5 percent of the crop was packed in trays. 
During the 1989-1990 season, minimum tray weights were mandated, as 
there were many new packers involved in the kiwifruit packing process 
and stricter regulations were viewed as necessary to provide uniform 
container weights for each size. However, since that season the 
proportion of the crop packed in trays has steadily declined.
    During the 1997-1998 season, only 15.5 percent of the crop was 
packed into molded trays and less than 1 percent of this fruit was 
rejected for failure to meet

[[Page 34152]]

minimum tray weights. As a consequence, the Committee believed that 
minimum tray weight requirements might no longer be necessary to 
maintain uniformity in the marketplace.
    Prior to the 1998-1999 season handlers were required to meet the 
minimum net weight requirements as shown in the following chart:

------------------------------------------------------------------------
                                                             Minimum net
                                                              weight of
                Count designation of fruit                      fruit
                                                              (Pounds)
------------------------------------------------------------------------
34 or larger..............................................         7.5
35 to 37..................................................         7.25
38 to 40..................................................         6.875
41 to 43..................................................         6.75
44 and smaller............................................         6.5
------------------------------------------------------------------------

    The Committee met on July 8, 1998, and unanimously recommended 
suspension of the minimum net weight requirements for kiwifruit packed 
in cell compartments, cardboard fillers, or molded trays for the 1998-
1999 season. Section 920.302(a)(4)(iii) was suspended for the 1998-1999 
season by an interim final rule published September 3, 1998 (63 FR 
46861).
    As previously mentioned, both small and large handlers were able to 
reduce packing costs and to compete more effectively in the market 
during the 1998-1999 season because of the relaxation in packing 
requirements. The industry continued to pack well filled trays without 
having to spend the extra time weighing them. There was no reduction in 
the uniform appearance of fruit packed into trays.
    Therefore, when the Committee met on January 13, 1999, to consider 
its preliminary recommendations for the season, it concluded that 
minimum net weight requirements for trays should continue to be 
suspended for the 1999-2000 season.
    The Committee met on February 25, 1999, and unanimously recommended 
continuing the suspension of Sec. 920.302(a)(4)(iii) for the 1999-2000 
season. The 1999-2000 season ends July 31, 2000. The Committee plans to 
further evaluate the benefits during the 1999-2000 season.

Continued Suspension of Reinspection Requirements

    Section 920.55 of the order requires that prior to handling any 
variety of California kiwifruit, such kiwifruit shall be inspected by 
the Federal or Federal-State Inspection Service (inspection service) 
and certified as meeting the applicable grade, size, quality, or 
maturity requirements in effect pursuant to Sec. 920.52 or Sec. 920.53.
    Section 920.55(b) provides authority for the establishment, through 
the order's rules and regulations, of a period prior to shipment during 
which inspections must be performed.
    Prior to the 1998-1999 season, Sec. 920.155 of the order's rules 
and regulations prescribed that the certification of grade, size, 
quality, and maturity of kiwifruit pursuant to Sec. 920.52 or 
Sec. 920.53 during each fiscal year was valid until December 31 of such 
year or 21 days from the date of inspection, whichever was later. Any 
inspected kiwifruit to be shipped after the certification period lapses 
was required to be reinspected and recertified before shipping.
    Section 920.155 was suspended for the 1998-1999 season by a final 
rule published August 4, 1998 (63 FR 41390). The Committee recommended 
this suspension to lessen the expenses upon the many kiwifruit growers 
who had either lost money or merely recovered their production costs in 
recent years. It concluded that the cost of reinspecting kiwifruit was 
too high to justify requiring it in view of the limited benefit 
reinspection provides. The Committee also believed it was no longer 
necessary to have fruit reinspected to provide consumers with a high 
quality product because storage and handling operations had improved in 
the industry.
    During the 1998-1999 season, handlers voluntarily checked stored 
fruit prior to shipment to ensure that the condition of the fruit had 
not deteriorated. This enabled handlers to ship quality kiwifruit 
during the 1998-1999 season without the necessity for reinspection and 
recertification and the costs associated with such requirements. The 
Committee had estimated that handlers would save $50,000 by conducting 
their own reinspection during the 1998-1999 season.
    At the February 25, 1999, meeting, the Committee unanimously 
recommended suspending Sec. 920.155 for the 1999-2000 season. The 
Committee still believes that handlers saved $50,000 by conducting 
their own reinspection during the 1998-1999 season even though the 
marketed crop was less than projected, more fruit was in-line inspected 
than projected, and shipments had started later during the 1998-1999 
season than anticipated.
    Although freezing temperatures and winds during the spring may 
reduce the 1999-2000 crop estimate, the Committee believes the industry 
would continue to benefit from conducting its own reinspection.
    The Committee would like to evaluate this suspension one more 
season before making a decision to permanently remove this requirement 
from the rules and regulations. Thus, the Committee unanimously 
recommended suspending Sec. 920.155 for the 1999-2000 season. The 1999-
2000 season ends July 31, 2000.

Maintaining Current Regulatory Changes

Maintaining the Current Size Variation Tolerance for Size 42 Kiwifruit

    Section 920.302(a)(4) of the order's rules and regulations outlines 
pack requirements for fresh shipments of California kiwifruit.
    Section 920.302(a)(4)(ii) specifies size variation ranges in terms 
of fruit diameter for each size of kiwifruit and size variation 
tolerances.
    Section 920.302(a)(4)(ii) was revised by an interim final rule 
published September 3, 1998 (63 FR 46861) to include a provision to 
increase the size variation tolerance for Size 42 kiwifruit from 10 
percent, by count, to 25 percent, by count.
    During the 1998-1999 season, a significantly smaller amount of 
kiwifruit was packed into the 40 series sizes than anticipated. Only 7 
percent of the fruit was packed into Size 42 containers, and only 15.3 
percent was packed into Size 42 and 45 containers. This is 
significantly less than the previous two years when 35 percent of the 
fruit was packed into the 40 series sizes.
    In addition, size variation was not a problem for Size 42 fruit 
during the 1998-1999 season, as the majority of the fruit was round and 
short and not a mixture of round and flat fruit. A typical crop has a 
mixture of round and flat fruit. A mixture of round and flat fruit is 
difficult to pack and slows down the packing line.
    The Committee believes that maintaining the increased size 
variation tolerance for Size 42 kiwifruit for the 1999-2000 season 
would continue to benefit the industry by easing the packing burden and 
reducing costs, while maintaining uniform looking boxes of fruit 
desired by customers.

Maintaining the Current Maximum Number of Fruit per 8-Pound Sample for 
Kiwifruit Packed in Bags, Volume Fill, or Bulk Containers

    Section 920.302(a)(4) of the order's rules and regulations outlines 
pack requirements for fresh shipments of California kiwifruit.
    Section 920.302(a)(4)(iv) establishes a maximum number of fruit per 
8-pound sample for each numerical count size designation for fruit 
packed in bags, volume fill, or bulk containers.
    Section 920.302(a)(4)(iv) was revised by an interim final rule 
published

[[Page 34153]]

September 3, 1998 (63 FR 46861) to include a provision that increased 
the maximum number of fruit per 8-pound sample for Sizes 42 through 30. 
Size 42 fruit is smaller than Size 30 fruit. The size designation chart 
below depicts these changes:

------------------------------------------------------------------------
                                                               Maximum
                                                              number of
                      Size designation                       fruit per 8
                                                                pound
                                                                sample
------------------------------------------------------------------------
21.........................................................           22
25.........................................................           27
27/28......................................................           30
30.........................................................           33
33.........................................................           36
36.........................................................           42
39.........................................................           48
42.........................................................           53
45.........................................................           55
------------------------------------------------------------------------

    Currently, under the rules and regulations, kiwifruit packed in 
bags, volume fill, or bulk containers, must not exceed the maximum 
number of fruit per an 8-pound sample for each size designation.
    Under the current regulations, handlers are better able to meet the 
needs of buyers, because kiwifruit sells by the piece, and buyers 
desire as much fruit in each container as the container can comfortably 
hold. California handlers are applying weight standards that are 
similar to those used by importers, thereby lessening confusion in the 
marketplace and facilitating the marketing of California kiwifruit.
    The proposed changes address the marketing and shipping needs of 
the kiwifruit industry and are in the interest of handlers, producers, 
buyers, and consumers. The impact of these changes on producers and 
handlers is expected to be beneficial for all levels of business.
    This action would not impose any additional reporting or 
recordkeeping requirements on either small or large kiwifruit handlers. 
As with all Federal marketing order programs, reports and forms are 
periodically reviewed to reduce information requirements and 
duplication by industry and public sectors. In addition, the Department 
has not identified any relevant Federal rules that duplicate, overlap, 
or conflict with this rule.
    Further, the Committee's meetings were widely publicized throughout 
the kiwifruit industry and all interested persons were invited to 
attend the meetings and participate in Committee deliberations. Like 
all Committee meetings, the February 25, 1999, 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. Three of these members are handlers and producers, eight are 
producers only, and one is a public member. Finally, interested persons 
are invited to submit information on the regulatory and informational 
impacts of this action on small businesses.
    A 20-day comment period is provided to allow interested persons to 
respond to this proposal. Twenty days is deemed appropriate because: 
(1) The changes proposed in this rule, if adopted, should be in place 
as soon as possible to enable handlers to make operational decisions in 
time for the 1999-2000 season which begins August 1; and (2) this 
action was unanimously recommended by the Committee at a public meeting 
and is not expected to be controversial. All written comments timely 
received will be considered before a final determination is made on 
this matter.

List of Subjects in 7 CFR Part 920

    Kiwifruit, Marketing agreements, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 920 is 
proposed to be amended as follows:

PART 920--KIWIFRUIT GROWN IN CALIFORNIA

    1. The authority citation for 7 CFR part 920 continues to read as 
follows:

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


Sec. 920.155  [Suspended]

    2. In part 920, Sec. 920.155 is suspended in its entirety effective 
August 1, 1999, through July 31, 2000.
    3. Section 920.302 is amended by revising paragraphs (a)(2), 
(a)(4)(ii), and (a)(4)(iv), suspending paragraph (a)(4)(iii),effective 
August 1, 1999, through July 31, 2000, removing the phrase 
``Definitions. (1) The term KAC No.'' in paragraph (b) and adding in 
its place the phrase ``Definitions. The term Kac No.'', and removing 
paragraph (b)(2) to read as follows:


Sec. 920.302  Grade, size, pack, and container regulations.

    (a) * * *
    (2) Size Requirements. Such kiwifruit shall be at least a minimum 
Size 45. Size 45 is defined as a maximum of 55 pieces of fruit in an 8-
pound sample.
* * * * *
    (4) * * *
    (ii) Kiwifruit packed in cell compartments, cardboard fillers or 
molded trays (excluding individual consumer packages) may not vary in 
diameter more than:

------------------------------------------------------------------------
                   Count                              Diameter
------------------------------------------------------------------------
30 or less................................  \1/2\ inch (12.7 mm).
31-38.....................................  \3/8\ inch (9.5 mm).
39 or more................................  \1/4\ inch (6.4 mm).
------------------------------------------------------------------------

Kiwifruit packed in individual consumer packages, bags, volume fill, or 
bulk containers, fruit may not vary more than:

------------------------------------------------------------------------
             Size Designation                         Diameter
------------------------------------------------------------------------
30 or larger..............................  \1/2\ inch (12.7 mm).
33, 36, 39, and 42........................  \3/8\ inch (9.5 mm).
45 or smaller.............................  \1/4\ inch (6.4 mm).
------------------------------------------------------------------------

Not more than 10 percent, by count of the containers in any lot and not 
more than 5 percent, by count, of kiwifruit in any container, (except 
that for Sizes 42 and 45 kiwifruit, the tolerance, by count, in any one 
container, may not be more than 25 percent) may fail to meet the 
requirements of this paragraph.
* * * * *
    (iv) When kiwifruit is packed in individual consumer packages, 
bags, volume fill or bulk containers, the following table specifying 
the size designation and maximum number of fruit per 8-pound sample is 
to be used.

------------------------------------------------------------------------
                                                               Maximum
                                                              number of
                      Size designation                        fruit  Per
                                                               8-pound
                                                                sample
------------------------------------------------------------------------
21.........................................................           22
25.........................................................           27
27/28......................................................           30
30.........................................................           33
33.........................................................           36
36.........................................................           42
39.........................................................           48
42.........................................................           53
45.........................................................           55
------------------------------------------------------------------------

* * * * *
    4. In Sec. 920.303, paragraphs (c)(3), (c)(5), and (d) are revised 
to read as follows:


Sec. 920.303  Container marking regulations.

* * * * *
    (c) * * *
    (3) For bulk containers or individual consumer packages not within 
a master container, the quantity shall be indicated in terms of the 
size designation and net weight; or in terms of the size designation 
and count.
* * * * *
    (5) The quantity shall be indicated in terms of either net weight 
or count (or both) for individual consumer packages within a master 
container. If count is used, it must be accompanied by the size 
designation.
* * * * *

[[Page 34154]]

    (d) All exposed or outside containers of kiwifruit, but not less 
than 75 percent of the total containers on a pallet, shall be plainly 
marked with the lot stamp number corresponding to the lot inspection 
conducted by an authorized inspector, except for individual consumer 
packages within a master container and containers that are being 
directly loaded into a vehicle for export shipment under the 
supervision of the Federal or Federal-State Inspection Service. 
Individual consumer packages of kiwifruit placed directly on a pallet 
shall have all outside or exposed packages on a pallet plainly marked 
with the lot stamp number corresponding to the lot inspection conducted 
by an authorized inspector or have one inspection label placed on each 
side of the pallet.
* * * * *
    Dated: June 21, 1999.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 99-16209 Filed 6-24-99; 8:45 am]
BILLING CODE 3410-02-P