[Federal Register Volume 65, Number 124 (Tuesday, June 27, 2000)]
[Rules and Regulations]
[Pages 39507-39513]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-16151]



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  Federal Register / Vol. 65, No. 124 / Tuesday, June 27, 2000 / Rules 
and Regulations  

[[Page 39507]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 916 and 917

[Docket No. FV00-916-1 FIR]


Nectarines and Peaches Grown in California; Revision of Handling 
Requirements for Fresh Nectarines and Peaches

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

SUMMARY: The Department of Agriculture is adopting, as a final rule, 
with minor changes, the provisions of an interim final rule that 
revised the handling requirements for California nectarines and peaches 
by modifying the grade, size, maturity, and container marking 
requirements for fresh shipments of these fruits, beginning with 2000 
season shipments. This rule also continues in effect the modification 
of the requirements for placement of Federal-State Inspection Service 
lot stamps for the 2000 season only. The marketing orders regulate the 
handling of nectarines and peaches grown in California and are 
administered locally by the Nectarine Administrative and Peach 
Commodity Committees (committees). This rule enables handlers to 
continue shipping fresh nectarines and peaches meeting consumer needs 
in the interest of producers, handlers, and consumers of these fruits.

EFFECTIVE DATE: June 28, 2000.

FOR FURTHER INFORMATION CONTACT: Terry Vawter, Marketing Specialist, 
California Marketing Field Office, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, 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, P.O. Box 96456, Washington, DC 20090-6456; telephone: (202) 
720-2491, Fax: (202) 720-5698.
    Small businesses may request information on compliance with this 
regulation by contacting Jay Guerber, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, P.O. Box 96456, room 
2525-S, Washington, DC 20090-6456; telephone: (202) 720-2491; Fax: 
(202) 720-5698, or E-mail: [email protected].

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement Nos. 124 and 85, and Marketing Order Nos. 916 and 917 (7 CFR 
parts 916 and 917) regulating the handling of nectarines and peaches 
grown in California, respectively, hereinafter referred to as the 
``orders.'' The marketing agreements and orders are effective under the 
Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-
674), hereinafter referred to as the ``Act.''
    The Department of Agriculture (Department) is issuing this rule in 
conformance with Executive Order 12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule is not intended to have retroactive effect. 
This rule will not preempt any State or local laws, regulations, or 
policies, unless they present an irreconcilable conflict with this 
rule.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 608c(15)(A) of the 
Act, any handler subject to an order may file with the Secretary a 
petition stating that the order, any provision of the order, or any 
obligation imposed in connection with the order is not in accordance 
with law and request a modification of the order or to be exempted 
therefrom. A handler is afforded the opportunity for a hearing on the 
petition. After the hearing the Secretary would rule on the petition. 
The Act provides that the district court of the United States in any 
district in which the handler is an inhabitant, or has his or her 
principal place of business, has jurisdiction to review the Secretary's 
ruling on the petition, provided an action is filed not later than 20 
days after the date of the entry of the ruling.
    Under the orders, lot stamping, grade, size, maturity, container, 
and pack requirements are established for fresh shipments of California 
nectarines and peaches. Such requirements are in effect on a continuing 
basis. The Nectarine Administrative Committee (NAC) and the Peach 
Commodity Committee (PCC), which are responsible for local 
administration of the orders, met on November 30, 1999, and unanimously 
recommended that these handling requirements be revised for the 2000 
season, which began April 1. The changes: (1) Revise the lot stamping 
requirements for the 2000 season only; (2) authorize shipments of ``CA 
Utility'' quality fruit to continue during the 2000 season; (3) 
eliminate the minimum letter height of maturity marking requirements 
for all containers; (4) provide a tolerance for the ``Peento'' or 
``donut'' types of peaches for healed, non-serious, blossom-end growth 
cracks; and (5) revise varietal maturity, quality, and size 
requirements to reflect recent changes in growing conditions. These 
changes continue in effect as published in the interim final rule.
    The committees meet prior to and during each season to review the 
rules and regulations effective on a continuing basis for California 
nectarines and peaches under the orders. Committee meetings are open to 
the public, and interested persons may express their views at these 
meetings. The Department reviews committee recommendations and 
information, as well as information from other sources, and determines 
whether modification, suspension, or termination of the rules and 
regulations would tend to effectuate the declared policy of the Act.
    No official crop estimate was available at the time of the 
committees' meetings because the nectarine and peach trees were 
dormant. The committees recommended a crop estimate at their meetings 
in early spring. Preliminary estimates indicate that the 2000 crop will 
be slightly larger in size with characteristics similar to the 1999 
crop which totaled 20,405,000 boxes of nectarines and 20,460,000 boxes 
of peaches. The 2000 crop is estimated to be 22,000,000 boxes of 
nectarines and 21,000,000 boxes of peaches.

[[Page 39508]]

Lot Stamping Requirements

    Sections 916.55 and 917.45 of the orders require inspection and 
certification of nectarines and peaches, respectively, handled by 
handlers. Sections 916.115 and 917.150 of the nectarine and peach 
orders' rules and regulations, respectively, require that all exposed 
or outside containers of nectarines and peaches, and at least 75 
percent of the total containers on a pallet, be stamped with the 
Federal-State Inspection Service (inspection service) lot stamp number 
after inspection and prior to shipment to show that the fruit has been 
inspected. These requirements apply except for containers that are 
loaded directly onto railway cars, exempted, or mailed directly to 
consumers in consumer packages.
    Lot stamp numbers are assigned to each handler by the inspection 
service, and are used to identify the handler and the date on which the 
container was packed. The lot stamp number is also used by the 
inspection service to identify and locate the corresponding inspector's 
working papers or notes. Working papers are the documents each 
inspector completes while performing an inspection on a lot of 
nectarines or peaches. Information contained in the working papers 
supports the grade levels certified by the inspector at the time of 
inspection.
    The lot stamp number has value for the industries, as well. The 
committees utilize the lot stamp numbers and date codes to trace fruit 
in the container back to the orchard where harvested. This information 
is essential in providing quick information for a crisis management 
program instituted by the industries. Without the lot stamp information 
on each container, the ``trace-back'' effort, as it is called, would be 
jeopardized.
    Recently, several new containers have been introduced for use by 
nectarine and peach handlers. The boxes are returnable plastic 
containers which retailers send back to a central clearinghouse after 
use. Use of these boxes may represent substantial savings to retailers 
for storage and disposal, as well as for handlers who do not have to 
pay for traditional containers. Fruit is packed in the boxes by the 
handler, delivered to the retailer, emptied, and returned to the 
clearinghouse for cleaning and redistribution. However, because they 
were designed to be reused, these boxes do not support markings that 
are permanently affixed to the container. All markings must be printed 
on cards which slip into tabs on the front or sides of the containers. 
The cards are easily inserted and removed, and further contribute to 
the efficient use of the container.
    The cards are a concern for the inspection service and the 
industries, however. Because of their unique portability, there is some 
concern that the cards on pallets of inspected containers could easily 
be moved to pallets of uninspected containers, thus permitting a 
handler to avoid inspection on a lot or lots of nectarines or peaches. 
This would also jeopardize the use of the lot stamp numbers for the 
industries' ``trace-back'' program.
    To address this concern, the committees have recommended that 
pallets of inspected fruit be identified with a USDA-approved pallet 
tag containing the lot stamp number, in addition to the lot stamp 
number printed on the card on the container. In this way, an audit 
trail is created, confirming that the lot stamp number on the 
containers on each pallet correspond to the lot stamp number on the 
pallet tag.
    The inspection service and the committees have presented their 
concerns to the manufacturers of these types of boxes. One manufacturer 
has indicated a willingness to address the problem by offering an area 
on the principle display panel where the container markings will adhere 
to the box, which will meet the needs of the industries, the inspection 
service, and the manufacturer. However, the manufacturer expressed the 
belief that this change may not be available in time for the 2000 
season. For that reason, the committees further recommended that the 
proposed modification of the lot stamping requirements be put into 
place for the 2000 season only.
    This rule continues in effect revisions to Secs. 916.115 and 
917.150 which require the lot stamp number to be adhered to a USDA-
approved pallet tag, in addition to the requirement that the number be 
applied to cards on all exposed or outside containers, and not less 
than 75 percent of the total containers on a pallet.
    This rule also continues in effect a conforming change to 
Sec. 917.150 that changed the word ``but'' to ``and,'' making the 
language in this section similar to that in Sec. 916.115.

Grade and Quality Requirements

    Sections 916.52 and 917.41 of the orders authorize the 
establishment of grade and quality requirements for nectarines and 
peaches, respectively. Prior to the 1996 season, Sec. 916.356 required 
nectarines to meet a modified U.S. No. 1 grade. Specifically, 
nectarines were required to meet U.S. No. 1 grade requirements, except 
there was a slightly tighter requirement for scarring and a more 
liberal allowance for misshapen fruit. Prior to the 1996 season, 
Sec. 917.459 required peaches to meet the requirements of a U.S. No. 1 
grade, except for a more liberal allowance for open sutures that were 
not ``serious damage.''
    This rule continues in effect a revision of Sec. 916.350, 
Sec. 916.356, Sec. 917.442, and Sec. 917.459 to permit shipments of 
nectarines and peaches meeting ``CA Utility'' quality requirements 
during the 2000 season. (``CA Utility'' fruit is lower in quality than 
that meeting the modified U.S. No. 1 grade requirements.) Shipments of 
nectarines and peaches meeting ``CA Utility'' quality requirements were 
permitted during the 1996 and 1997 seasons, and also during the 1998 
and 1999 seasons with slight modifications.
    Studies conducted by the NAC and PCC indicate that some consumers, 
retailers, and foreign importers found the lower quality fruit 
acceptable in some markets. When shipments of ``CA Utility'' nectarines 
were first permitted in 1996, they only represented 1.1 percent of all 
nectarine shipments, or approximately 210,000 boxes. Shipments of ``CA 
Utility'' peaches represented 1.9 percent of all peach shipments, or 
366,000 boxes. By 1998 and 1999, shipments of ``CA Utility'' nectarines 
represented 4.5 percent and 4.0 percent, respectively, of all nectarine 
shipments; or approximately 760,000 boxes and 819,600 boxes, 
respectively. In 1998 and 1999, shipments of ``CA Utility'' peaches 
represented 3.3 percent and 3.4 percent, respectively, of all peach 
shipments; or approximately 602,000 boxes and 689,800 boxes, 
respectively.
    For these reasons, the committees unanimously recommended that 
shipments of ``CA Utility'' quality nectarines and peaches be permitted 
for the 2000 season with a continuing in-house statistical review. This 
rule continues in effect a revision to paragraphs (d) of Secs. 916.350 
and 917.442, and paragraphs (a)(1) of Secs. 916.356 and 917.459 to 
permit shipments of nectarines and peaches meeting ``CA Utility'' 
quality requirements during the 2000 season, on the same basis as last 
season.
    In addition, this rule continues in effect a revision of paragraph 
(a)(1) of Sec. 917.459 to provide a 10 percent tolerance for healed, 
non-serious, blossom-end growth cracks for the ``Peento'' or ``donut'' 
varieties of peaches, such as the ``Saturn'' and ``Jupiter'' varieties.

[[Page 39509]]

    These varieties of peaches characteristically suffer blossom-end 
(calyx basin) cracks during development. These cracks heal as the 
growth continues and as the fruit gains size. Generally, the cracks are 
completely healed by harvest. Peaches with unhealed or serious blossom-
end growth cracks at the time of inspection would not be included in 
U.S. No. 1 or ``CA Utility'' packages. Such a relaxation will permit 
handlers of the Peento type of peaches to utilize more of these fruit 
in boxes of U.S. No. 1 peaches, benefitting both handlers and growers 
of these varieties.
    The PCC unanimously recommended this additional tolerance of 10 
percent for healed, non-serious, blossom-end growth cracks for the 
Peento type of peaches, beginning in the 2000 season.

Container Marking Requirements

    Sections 916.52 and 917.41 of the nectarine and peach orders, 
respectively, authorize container marking requirements. Requirements 
for container markings are specified in Secs. 916.350 and 917.442 of 
the orders' rules and regulations. Container marking requirements 
include marking of the commodity and variety (e.g., Fay Elberta 
peaches), the size of the fruit in the box (e.g., 88 size), the net 
weight, and the maturity (either U.S. Mature (US MAT) or California 
Well Matured (CA WELL MAT)), on each container of nectarines or 
peaches.
    As innovative containers enter the marketplace, especially those 
preferred by retailers, the configuration of display panels changes. 
This is true for both retail and consumer-size containers. As a result, 
handlers are forced to make adjustments in their container markings to 
accommodate the differences in display panels. Some containers, such as 
those intended for purchase by individual consumers, are smaller and 
have less display-panel surface area, and meeting all the minimum size 
labeling requirements is difficult. Some handlers requested a 
relaxation in the container labeling requirements with regard to the 
fruit maturity marking, and the committees agreed that a modification 
would be appropriate. This relaxation eliminates the minimum lettering 
height in favor of a requirement that fruit maturity markings be clear 
and legible. Therefore, the revision to Secs. 916.350 and 917.442, 
paragraphs (a)(3) continues in effect.

Maturity Requirements

    Both orders provide (in Secs. 916.52 and 917.41) authority to 
establish maturity requirements for nectarines and peaches, 
respectively. The minimum maturity level currently specified for 
nectarines and peaches is ``mature'' as defined in the standards. 
Additionally, both orders'' rules and regulations provide for a higher, 
``well matured'' classification. For most varieties, ``well-matured'' 
fruit determinations are made using maturity guides (e.g., color 
chips). These maturity guides are reviewed each year by the Shipping 
Point Inspection Service (SPI) to determine whether they need to be 
changed based on the most recent information available on the 
individual characteristics of each variety.
    These maturity guides established under the handling regulations of 
the California tree fruit marketing orders have been codified in the 
Code of Federal Regulations as TABLE 1 in Secs. 916.356 and 917.459, 
for nectarines and peaches, respectively.
    The requirements in the 2000 handling regulation are the same as 
those that appeared in the 1999 handling regulation with a few 
exceptions. Those exceptions are explained in this rule.
    Nectarines: Requirements for ``well-matured'' nectarines are 
specified in Sec. 916.356 of the order's rules and regulations. While 
SPI made no recommendation with regard to changes to the NAC regarding 
maturity guides, the committee recommended removal of several varieties 
of nectarines from the maturity guides.
    This rule continues in effect a revision of TABLE 1 of paragraph 
(a)(1)(iv) of Sec. 916.356 by removing 12 nectarine varieties which are 
no longer in production. The NAC routinely reviews the status of 
nectarine varieties listed in these maturity guides. The most recent 
review revealed that 12 of the nectarine varieties currently listed in 
the maturity guide have not been in production since the 1997 season. 
Typically, the NAC recommends removing a variety after non-production 
for three seasons, or if trees of that variety are known to have been 
pulled out, because a maturity guide for an obsolete variety is no 
longer needed. The varieties removed include the Apache, Arm King, Bob 
Grand, Flavor Grand, Flavortop I, Maybelle, Mike Grand, Pacific Star, 
Son Red, Summer Star, Sunfre, and Tasty Gold nectarine varieties.
    Peaches: Section 917.459 of the order's rules and regulations 
specifies maturity requirements for fresh peaches being inspected and 
certified as being ``well matured.''
    This rule continues in effect a revision of TABLE 1 of paragraph 
(a)(1)(iv) of Sec. 917.459 to add maturity guides for 2 peach varieties 
and revise the maturity guide for 1 variety. Specifically, SPI 
recommended adding the maturity guides for the Earli Rich peach variety 
to be regulated at the H maturity guide, and the Late Ito Red peach 
variety to be regulated at the L maturity guide. SPI also recommended a 
modification to the current maturity guide for the Autumn Rose peach 
variety, changing the maturity guide from the I to the H maturity 
guide.
    This rule also continues in effect a correction of the reference to 
the Ambercrest peach variety listed in TABLE 1 of paragraph (a)(1)(iv). 
The correct name of the variety is ``Amber Crest.''
    The PCC recommended these maturity requirements based on SPI's 
continuing review of individual maturity characteristics and 
identification of the appropriate maturity guide corresponding to the 
``well-matured'' level of maturity for peach varieties in production.
    TABLE 1 of paragraph (a)(1)(iv) of Sec. 917.459 was also revised to 
remove 15 peach varieties which are no longer in production, and this 
rule continues in effect that revision. The PCC routinely reviews the 
status of peach varieties listed in these maturity guides. The most-
recent review revealed that 15 of the peach varieties currently listed 
in the maturity guide have not been in production since the 1997 
season. Typically, the PCC recommends removing a variety after non-
production for three seasons, or if trees of that variety are known to 
have been pulled out, because a maturity guide for an obsolete variety 
is no longer needed. The varieties removed include the August Sun, 
Autumn Crest, Belmont (Fairmont), Berenda Sun, Fayette, Golden Crest, 
Golden Lady, June Sun, Mary Anne, Parade, Pat's Pride, Prima Lady, Red 
Cal, Scarlet Lady, and Springold peach varieties.

Size Requirements

    Both orders provide (in Secs. 916.52 and 917.41) authority to 
establish size requirements. Size regulations encourage producers to 
leave fruit on the tree longer. This increased growing time not only 
improves the size of the fruit, but also increases its maturity. In 
addition, increased size results in an increased number of packed boxes 
of nectarines or peaches per acre. Acceptable size fruit also provides 
greater consumer satisfaction and more repeat purchases; and, 
therefore, increases returns to producers and handlers. Varieties 
recommended for specific size regulation have been reviewed and such 
recommendations are based on the specific characteristics

[[Page 39510]]

of each variety. The NAC and PCC conduct studies each season on the 
range of sizes reached by the regulated varieties and determine whether 
revisions in the size requirements are appropriate.
    Nectarines: Section 916.356 of the order's rules and regulations 
specifies minimum size requirements for fresh nectarines in paragraphs 
(a)(2) through (a)(9). This rule continues in effect a revision of 
Sec. 916.356 to establish variety-specific minimum size requirements 
for 14 nectarine varieties that were produced in commercially-
significant quantities of more than 10,000 packages for the first time 
during the 1999 season. This rule also continues in effect a 
modification of the variety-specific minimum size requirements for 6 
varieties of nectarines whose shipments fell below 5,000 packages 
during the 1999 season.
    For example, one of the varieties recommended for addition to the 
variety-specific minimum size requirements is the Diamond Jewel 
nectarine variety. Studies of the size ranges attained by the Diamond 
Jewel variety revealed all but one box of that variety met minimum 
sizes 50, 60, 70, and 80 during the 1999 season. The one box reportedly 
met a minimum size 88. While the size distribution peaked on the size 
70, 100 percent of the fruit sized at a minimum of size 88.
    A review of other varieties with the same harvesting period 
indicated that Diamond Jewel was also comparable to those varieties in 
its size ranges for that time period. Discussions with handlers known 
to handle the variety confirmed this information regarding minimum size 
and harvesting period, as well. Thus, the recommendation to place the 
Diamond Jewel nectarine variety in the variety-specific size regulation 
at a size 88 is appropriate.
    Historical variety data such as this provides the NAC with the 
information necessary to recommend the appropriate sizes at which to 
regulate various nectarine varieties. In addition, producers and 
handlers of the varieties affected are personally invited to comment 
when such size recommendations are deliberated. Producer and handler 
comments are also considered at both NAC and subcommittee meetings when 
such comments are received by the staff.
    For reasons similar to those discussed in the preceding paragraph, 
the revision of the introductory text of paragraph (a)(4) of 
Sec. 916.356 continues in effect to include the Diamond Jewel, Kay 
Sweet, and White Sun nectarine varieties; and the revision of the 
introductory text of paragraph (a)(6) in Sec. 916.356 continues in 
effect to include the Arctic Blaze, Arctic Gold, Arctic Jay, Cole Red, 
Fire Sweet, Honey Blaze, Kay Bright, Prima Diamond XVIII, Regal Pearl, 
Ruby Sweet, and White September nectarine varieties.
    This rule continues in effect the revision of the introductory text 
of paragraph (a)(4) of Sec. 916.356 to remove 2 nectarine varieties 
from the variety-specific minimum size requirements specified in the 
section because less than 5,000 packages of each of these varieties 
were produced during the 1999 season. Thus, the revision of the 
introductory text of paragraph (a)(4) continues in effect the removal 
of the Early May and Prima Diamond VI nectarine varieties.
    This rule also continues in effect the revision of the introductory 
text of paragraph (a)(6) of Sec. 916.356 to remove 4 nectarine 
varieties from the variety-specific minimum size requirements specified 
in the section because less than 5,000 packages of each of these 
varieties were produced during the 1999 season. Thus, the revision of 
the introductory text of paragraph (a)(6) continues in effect the 
removal of the Flavortop, Flavortop I, How Red (Sunectnineteen) and the 
491-48 nectarine varieties.
    The Grand Sun nectarine variety had 1999 shipments of 2,939 
packages, but was not recommended for removal from variety-specific 
size requirements because the variety is expected to increase in 
commercial significance during the 2000 season. Inclement weather, 
including the cool spring and frost damage, is considered to be a 
factor in the decreased production during the 1999 season. However, in 
the interim final rule, this variety was inadvertently omitted from 
paragraph (a)(3) of Sec. 916.356. This rule corrects that omission. 
This rule also corrects the name of the variety from ``Gran Sun'' to 
``Grand Sun.''
    Nectarine varieties removed from the nectarine variety-specific 
list become subject to the non-listed variety size requirements 
specified in paragraphs (a)(7), (a)(8), and (a)(9) of Sec. 916.356.
    The NAC recommended these changes in the minimum size requirements 
based on a continuing review of the sizing and maturity relationships 
for these nectarine varieties, and consumer acceptance levels for 
various sizes of fruit. This rule is designed to establish minimum size 
requirements for fresh nectarines consistent with expected crop and 
market conditions.
    Peaches: Section 917.459 of the order's rules and regulations 
specifies minimum size requirements for fresh peaches in paragraphs 
(a)(2) through (a)(6), and paragraphs (b) and (c). This rule continues 
in effect the revision of Sec. 917.459 to establish variety-specific 
minimum size requirements for 16 peach varieties that were produced in 
commercially-significant quantities of more than 10,000 packages for 
the first time during the 1999 season. This rule also continues in 
effect the modification of the variety-specific minimum size 
requirements for 4 varieties of peaches whose shipments fell below 
5,000 packages during the 1999 season.
    One of the varieties recommended for addition to the variety-
specific size requirements is the Brittany Lane variety. Studies of the 
size ranges attained by the Brittany Lane variety revealed that while 
the size distribution peaked on size 50, all of the boxes of that 
variety met at least the size 80 requirement.
    A review of other varieties of the same harvesting period indicated 
that Brittany Lane was also comparable to those varieties in its size 
ranges. Discussions with handlers known to handle the variety confirmed 
this information regarding minimum size and harvesting period, as well. 
Thus, the recommendation to place the Brittany Lane variety in the 
variety-specific size regulation at a size 80 is appropriate.
    Historical variety data such as this provides the PCC with the 
information necessary to recommend the appropriate sizes at which to 
regulate various peach varieties. In addition, producers of the 
affected varieties are invited to comment when such size 
recommendations are deliberated. Producer and handler comments are also 
considered at both PCC and subcommittee meetings when such comments are 
received by staff of CTFA.
    In Sec. 917.459 of the order's rules and regulations, the revision 
of the introductory text of paragraph (a)(5) continues in effect to 
include the Brittany Lane, Snow Prince, Zee Diamond, 012-094, and 172LE 
White Peach (Crimson Snow/Sunny Snow) peach varieties; and the revision 
of the introductory text of paragraph (a)(6) continues in effect to 
include the Country Sweet, Earli Rich, Full Moon, Late September Snow, 
N117, Queen Lady, Red Sun, Sierra Gem, Snow Blaze, Sweet Kay, and Sweet 
September peach varieties.
    This rule also continues in effect the revision of Sec. 917.459 to 
remove 4 peach varieties from the variety-specific size requirements 
specified in that section, because less than 5,000 packages of this 
variety were produced during the 1999 season. In Sec. 917.459, the 
revision of the

[[Page 39511]]

introductory text of paragraph (a)(5) continues in effect to remove the 
Golden Crest (Supechthree) peach variety and the revision of the 
introductory text of paragraph (a)(6) of Sec. 917.459 continues in 
effect to remove the Snow Diamond, Sparkle, and 1-01-505 peach 
varieties.
    The Super Rich peach variety had 1999 shipments of 3,941 packages, 
but was not recommended for removal from variety-specific size 
requirements because the variety is expected to increase in commercial 
significance during the 2000 season. Inclement weather, including the 
cool spring and frost damage, is considered to be a factor in the 
decreased production during the 1999 season.
    In paragraph (a) (6) of Sec. 917.459, this action corrects the name 
of the peach variety ``Prima Gattie'' to ``Prima Gattie 8'', and the 
variety ``Yukon King'' to ``Autumn Snow'' These corrections are based 
on the comment received.
    Peach varieties removed from the variety-specific list become 
subject to the non-listed variety size requirements specified in 
paragraphs (b) and (c) of Sec. 917.459.
    The PCC recommended these changes in the minimum size requirements 
based on a continuing review of the sizing and maturity relationships 
for these peach varieties, and the consumer acceptance levels for 
various fruit sizes. This rule continues in effect the minimum size 
requirements for fresh peaches consistent with expected crop and market 
conditions.
    This rule reflects the committees' and the Department's appraisal 
of the need to continue in effect the revision to the handling 
requirements for California nectarines and peaches, as specified. The 
Department has determined that this rule will have a beneficial impact 
on producers, handlers, and consumers of California nectarines and 
peaches.
    This rule continues in effect handling requirements for fresh 
California nectarines and peaches consistent with expected crop and 
market conditions, and will help ensure that all shipments of these 
fruits made each season will meet acceptable handling requirements 
established under each of these orders. This rule will also help the 
California nectarine and peach industries provide fruit desired by 
consumers. This rule is designed to maintain orderly marketing 
conditions for these fruits in the interest of producers, handlers, and 
consumers.
    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Agricultural Marketing Service (AMS) has considered the 
economic impact of this action on small entities. Accordingly, AMS has 
prepared this final regulatory flexibility analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and rules issued thereunder, are unique in that 
they are brought about through group action of essentially small 
entities acting on their own behalf. Thus, both statutes have small 
entity orientation and compatibility.
    There are approximately 300 California nectarine and peach handlers 
subject to regulation under the orders covering nectarines and peaches 
grown in California, and about 1,800 producers of these fruits in 
California. Small agricultural service firms, which includes handlers, 
have been defined as those whose annual receipts are less than 
$5,000,000. Small agricultural producers have been defined by the Small 
Business Administration [13 CFR 121.201] as those having annual 
receipts of less than $500,000. A majority of these handlers and 
producers may be classified as small entities.
    The committees' staff have estimated that there are less than 20 
handlers in the industry who could be defined as other than small 
entities. If the average handler price received were $9.00 per box or 
box equivalent of nectarines or peaches, a handler would have to ship 
at least 555,000 boxes to have annual receipts of $5,000,000. Small 
handlers represent approximately 94 percent of the handlers within the 
industry. If the average producer price received were $6.00 per box or 
box equivalent for nectarines and $5.65 per box or box equivalent for 
peaches, producers would have to produce approximately 84,000 boxes or 
box equivalents of nectarines and approximately 89,000 boxes or box 
equivalents of peaches to have annual receipts of $500,000. Therefore, 
small producer entities are estimated to represent approximately 78 
percent of the producers within the industry. For those reasons, a 
majority of the handler and producers may be classified as small 
entities, excluding receipts from other sources.
    Under Secs. 916.52 and 917.41 of the orders, lot stamping, grade, 
size, maturity, and container and pack requirements are established for 
fresh shipments of California nectarines and peaches, respectively. 
Such requirements are in effect on a continuing basis. This rule 
continues in effect the revision to the handling requirements to: (1) 
Revise the lot stamping requirements for the 2000 season only; (2) 
authorize shipments of ``CA Utility'' quality fruit to continue during 
the 2000 season; (3) eliminate the minimum size of maturity marking 
requirements for all containers; (4) provide a tolerance for the 
``Peento'' or ``donut'' types of peaches for healed, non-serious, 
blossom-end growth cracks; and (5) revise varietal maturity, quality, 
and size requirements to reflect recent changes in growing conditions.
    In Secs. 916.115 and 917.150 of the orders' rules and regulations, 
respectively, handlers are required to stamp containers of nectarines 
and peaches with the Federal-State Inspection Service lot stamp number 
after inspection and prior to shipment. New, returnable containers, 
which do not support permanent markings, utilize printed cards which 
contain the lot stamp number, date codes, and other container marking 
requirements. The printed cards are easily inserted into tabs on the 
front or sides of the containers. The ease of portability of these 
cards creates problems for both the inspection service and the 
industries in tracking the containers. Cards on a pallet of inspected 
fruit could be easily moved to a pallet of uninspected fruit, thus 
permitting a handler to circumvent inspection requirements. The 
inspection service and the committees have recommended that each pallet 
of inspected nectarines and peaches be marked with a pallet tag 
containing the lot stamp number, in addition to the lot stamp number 
provided on the card on the containers.
    The committees believe that this recommendation should be limited 
to the 2000 season only, since at least one manufacturer anticipates 
the availability of an area on the principle display panel where the 
container markings will adhere to the box, which will meet the needs of 
the industries, inspection service, and the manufacturer. However, the 
manufacturer expressed the belief that this change may not be available 
in time for the 2000 season. For that reason, the committees further 
recommended that the proposed modification of the lot stamping 
requirements be put into place for the 2000 season only.
    In 1996, Secs. 916.350 and 917.442 were revised to permit shipments 
of lower-quality nectarines and peaches, known as ``CA Utility,'' as an 
experiment for the 1996 season only. Such authorization was continued 
during the 1997, 1998, and 1999 seasons. This rule continues in effect 
the authority to permit the continued use of ``CA Utility'' quality 
fruit for the 2000 season with a continued in-house statistical review 
to be conducted by the NAC and PCC. During the 1996 season, the 
Department authorized the shipment of nectarines and peaches which were 
of a

[[Page 39512]]

lower quality than the minimum permitted for previous seasons. During 
1996, there were 210,443 boxes of nectarines and 365,761 boxes of 
peaches packed as ``CA Utility,'' or 1.1 percent and 1.9 percent of 
fresh shipments, respectively. During 1997, there were 230,275 boxes of 
nectarines and 216,562 boxes of peaches packed as ``CA Utility,'' or 
1.1 percent and 1.0 percent of fresh shipments, respectively. In 1998, 
there were 760,000 boxes of nectarines and 602,000 boxes of peaches 
packed as ``CA Utility,'' or 4.5 percent and 3.3 percent of fresh 
shipments, respectively. In 1999, there were 819,600 boxes of 
nectarines and 689,800 boxes of peaches packed as ``CA Utility,'' or 
4.0 percent and 3.4 percent of fresh shipments, respectively.
    Continued availability of ``CA Utility'' quality fruit is expected 
to have a positive impact on producers, handlers, and consumers by 
permitting more nectarines and peaches to be shipped into fresh market 
channels, without adversely impacting the market for higher quality 
fruit.
    Sections 916.356 and 917.442 establish minimum maturity levels. 
This rule continues in effect the annual adjustments to the maturity 
requirements for several varieties of nectarines and peaches. Maturity 
requirements are based on maturity measurements generally using 
maturity guides (e.g., color chips), as reviewed by SPI. Such maturity 
guides provide producers, handlers, and SPI with objective tools for 
measuring the maturity of different varieties of nectarines and 
peaches. Such maturity guides are reviewed annually by SPI to determine 
the appropriate guide for each nectarine and peach variety. These 
annual adjustments reflect changes in the maturity patterns of 
nectarines and peaches as experienced over the previous seasons' 
inspections. Adjustments in the guides ensure that fruit has met an 
acceptable level of maturity, thus ensuring consumer satisfaction while 
benefitting nectarine and peach producers and handlers.
    In Sec. 916.356 of the order's rules and regulations for nectarines 
and Sec. 917.459 of the order's rules and regulations for peaches, 
minimum sizes for various varieties of nectarines and peaches are 
established. This rule continues in effect the adjustments to the 
minimum sizes authorized for various varieties of nectarines and 
peaches for the 2000 season. Minimum size regulations are put in place 
to allow fruit to stay on the tree for a greater length of time. This 
increased growing time not only improves maturity, but also improves 
fruit size. Increased fruit size increases the number of packed boxes 
per acre. Increased fruit size and maturity also provide greater 
consumer satisfaction and, therefore, more repeat purchases by 
consumers. Repeat purchases and consumer satisfaction benefit producers 
and handlers alike. Such adjustments to minimum sizes of nectarines and 
peaches are recommended each year by the NAC and PCC based upon 
historical data, and producer and handler information regarding sizes 
which the different varieties attain.
    The recommendations with regard to maturity markings on containers, 
continuation of authority to ship nectarines and peaches which meet the 
``CA Utility'' quality requirements, and an increased tolerance for 
Peento type of peaches, are relaxations which continue in effect. These 
regulations are intended to provide increased flexibility for handlers 
of nectarines and peaches.
    The committees made recommendations regarding these revisions in 
handling requirements after considering all available information, 
including comments of persons at three subcommittee meetings. The Grade 
and Size Subcommittee met on November 9, 1999, the Management Services 
Committee met on November 17, 1999, and the Returnable Plastic 
Container Task Force met on November 23, 1999. At the meetings, the 
impact of and alternatives to these recommendations were discussed.
    At the Grade and Size Subcommittee, the members discussed 
recommendations of SPI with regard to maturity guides, and 
recommendations of staff with regard varietal sizing and grades. SPI 
recommended maturity guides for two varieties of peaches and also 
recommended a change in maturity guides for an established variety. SPI 
made no recommendations to add or change any maturity guides for 
nectarines. The staff made recommendations to remove varieties of 
nectarines and peaches from the maturity listings which are no longer 
in commercial production.
    The staff also made recommendations to add nectarine and peach 
varieties to the variety-specific size requirements, based upon 
internal studies of the sizing characteristics of those nectarines and 
peaches. These nectarine and peach varieties were packed in 
commercially-significant quantities of 10,000 packages or more during 
the 1999 season. Also, the staff made recommendations to remove 
nectarine and peach varieties from the variety-specific sizing 
requirements, based upon information indicating that less than 5,000 
packages of those varieties were packed in the 1999 season and that the 
shipments of those varieties are expected to continue to decline in 
commercial significance. The committees routinely review their 
regulations and add varieties of which more than 10,000 packages are 
packed in a season; or remove varieties of which less than 5,000 
packages are packed in a season. The alternative to these requirements 
would be for the more popular varieties to be subject to the less-
precise general sizing regulations. This alternative was rejected since 
it would ultimately increase the amount of less-acceptable fruit being 
marketed to consumers. Such a result would be contrary to the long-term 
interests of producers, handlers, and consumers.
    At the Grade and Size Subcommittee meeting, a handler recommended 
eliminating the required minimum letter height for maturity markings 
for all types of containers. The handler noted that some boxes 
preferred by retailers have limited amounts of space on the display 
panels, especially consumer boxes. He suggested that the lettering 
height minimum for the maturity markings be eliminated in favor of 
clear and legible markings. Any alternatives, he noted, would fall 
short of the need to provide handlers the necessary maturity marking 
flexibility. He added that with all the required markings for variety, 
commodity, etc., very little room is left on the display panel and 
markings may nearly overlap. His recommendation and those of SPI and 
the staff were approved unanimously.
    At the Returnable Plastic Container Task Force meeting, the 
participants discussed the most expedient method to ensure that lot 
stamp numbers and date codes could be affixed to containers of 
nectarines and peaches to allow such containers to be adequately 
tracked, which would meet the needs of the inspection service and the 
industries. The members also met with a manufacturer of one of the 
returnable boxes, who expressed a willingness to cooperate with the 
industries in finding a solution to the problem of the highly-portable 
cards on the containers.
    Alternatives offered included leaving container marking 
requirements unchanged, eliminating lot stamp numbers as a required 
marking, and permitting shipments of nectarines and peaches in these 
containers without restrictions on the cards. By leaving container 
marking requirements unchanged, handlers would be precluded from 
providing nectarines and peaches in containers advocated by receiving 
retailers. Eliminating lot stamp numbers as a required marking is 
unacceptable to both the inspection service and the industry. Allowing

[[Page 39513]]

returnable, plastic containers to be shipped with the highly portable 
cards is also unacceptable since the portability of the cards could 
enable a handler to evade inspection on a lot or lots of nectarines or 
peaches by moving the cards to uninspected containers, and could 
jeopardize the industries' ``trace back'' program. All of these 
alternatives were, therefore, rejected.
    At the Management Services Committee meeting, the members reviewed 
all subcommittee recommendations available to them. The members of the 
Management Services Committee include the chairpersons and vice-
chairpersons of the committees, who generally have many years 
experience working in the industries. They, too, discussed 
recommendations of subcommittees and were free to make alternative 
recommendations or revise recommendations to the committees, as they 
reviewed such recommendations.
    Like committee meetings, subcommittee meetings are open to the 
public and comments are widely solicited.
    This rule does not impose any additional reporting and 
recordkeeping requirements on either small or large handlers. As with 
all Federal marketing order programs, reports and forms are 
periodically reviewed to reduce information requirements and 
duplication by industry and public sector agencies. In addition, as 
noted in the initial regulatory flexibility analysis, the Department 
has not identified any relevant Federal rules that duplicate, overlap, 
or conflict with this rule.
    However, as previously stated, nectarines and peaches under the 
orders have to meet certain requirements set forth in the standards 
issued under the Agricultural Marketing Act of 1946 (7 U.S.C. 1621 
through 1627). Standards issued under the Agricultural Marketing Act of 
1946 are otherwise voluntary.
    In addition, the committees' meetings were widely publicized 
throughout the nectarine and peach industries and all interested 
parties were invited to attend the meetings and participate in 
committee deliberations on all issues. These meetings are held annually 
during the last week of November or first week of December. Like all 
committee meetings, the November 30, 1999, meetings were public 
meetings and all entities, both large and small, were able to express 
views on these issues. The committees themselves are composed of 
producers.
    An interim final rule concerning this action was published in 
Federal Register on March 22, 2000 (65 FR 15205). Copies of the rule 
were mailed to all committee members and handlers by the committee 
staff on March 22, 2000. Finally, the rule was made available through 
the Internet by the Office of the Federal Register. A 60-day comment 
period ending May 22, 2000, was provided to allow interested persons to 
respond to the proposal. One comment was received during the comment 
period in response to the proposal.
    The commenter submitted several clarifications to the interim final 
rule. One clarification dealt with the inadvertent omission of the 
``Grand Sun'' nectarine variety from the variety specific size 
designations in paragraph (a)(3) of Sec. 916.356. The clarification 
also noted that the interim final rule listed the variety as ``Gran 
Sun.'' As noted earlier, these corrections relative to the Grand Sun 
nectarine variety have been made.
    The commenter also requested name corrections for two peach 
varieties. According to the commenter, the name ``Prima Gattie'' should 
be corrected to read ``Prima Gattie 8,'' and the name ``Yukon King'' 
should be corrected to read ``Autumn Snow.''
    Accordingly, appropriate changes are made based upon the comment 
received.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at the 
following website: http://www.ams.usda.gov/fv/moab.html. Any questions 
about the compliance guide should be sent to Jay Guerber at the 
previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    After consideration of all relevant material presented, the 
information and recommendations submitted by the committees, and other 
information, it is found that finalizing the interim final rule, with 
appropriate changes, as published in the Federal Register (65 FR 15205, 
March 22, 2000) will tend to effectuate the declared policy of the Act.
    It is further found that good cause exists for not postponing the 
effective date of this rule until 30 days after publication in the 
Federal Register (5 U.S.C. 553) because: (1) Handlers are already 
shipping nectarines and peaches from the 2000 crop; (2) handlers are 
already aware of this rule, which was unanimously recommended at a 
public meeting; and (3) a 60-day comment period was provided for in the 
interim final rule.

List of Subjects

7 CFR Part 916

    Marketing agreements, Nectarines, Reporting and recordkeeping 
requirements.

7 CFR Part 917

    Marketing agreements, Peaches, Pears, Reporting and recordkeeping 
requirements.

    Accordingly, the interim final rule amending 7 CFR parts 916 and 
917, which was published at 65 FR 15205 on March 22, 2000, is adopted 
as a final rule with the following changes:
    1. The authority citation for 7 CFR parts 916 and 917 continues to 
read as follows:

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

PART 916--NECTARINES GROWN IN CALIFORNIA


Sec. 916.356  [Amended]

    2. Section 916.356, paragraph (a)(3) is amended by adding the words 
``Grand Sun'' between the words ``Early Diamond'' and ``Johnny's 
Delight.''

PART 917--FRESH PEARS AND PEACHES GROWN IN CALIFORNIA


Sec. 917.459  [Amended]

    3. Section 917.459, paragraph (a)(6) is amended by revising the 
words ``Prima Gattie'' to read ``Prima Gattie 8,'' removing the words 
``Yukon King,'' and adding the words ``Autumn Snow'' between the words 
``Autumn Rose'' and ``Cal Red.''

    Dated: June 21, 2000.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 00-16151 Filed 6-26-00; 8:45 am]
BILLING CODE 3410-02-P