[Federal Register Volume 66, Number 148 (Wednesday, August 1, 2001)]
[Rules and Regulations]
[Pages 39615-39621]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-19099]



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  Federal Register / Vol. 66, No. 148 / Wednesday, August 1, 2001 / 
Rules and Regulations  

[[Page 39615]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 916 and 917

[Docket No. FV01-916-1 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 (Department) is adopting, as a 
final rule, with minor changes, an interim final rule that revised the 
handling requirements for California nectarines and peaches by 
modifying the grade, size, and maturity requirements for fresh 
shipments of these fruits, beginning with 2001 season shipments. This 
rule also continues in effect the requirements for placement of 
Federal-State Inspection Service lot stamps for the 2001 season. 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 interests of producers, handlers, and 
consumers of these fruits.

EFFECTIVE DATE: August 2, 2001.

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, P.O. 
Box 96456, room 2525-S, Washington, DC 20090-6456; telephone: (202) 
720-2491; Fax: (202) 720-8938.
    Small businesses may request information on complying 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) 720-8938. 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 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 December 5, 2000, and unanimously 
recommended that the handling requirements be revised for the 2001 
season, which began April 1. The changes: (1) Continue the lot stamping 
requirements which were in effect for the 2000 season; (2) authorize 
shipments of ``CA Utility'' quality fruit to continue during the 2001 
season; and (3) 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, with 
minor changes.
    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 are encouraged to 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' December meetings because the nectarine and peach trees 
were dormant. The committees subsequently recommended a crop estimate 
at their meetings in early spring. Preliminary estimates indicate that 
the 2001 crop will be slightly smaller than the 2000 crop, which 
totaled 20,645,000 containers of nectarines and 21,491,000 containers 
of peaches. The 2001 crop is estimated to be 19,351,000 containers or 
container equivalents of nectarines and 19,976,000 containers or 
container equivalents of peaches.

Lot Stamping Requirements

    Sections 916.55 and 917.45 of the orders require inspection and 
certification of nectarines and peaches,

[[Page 39616]]

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 before 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 inspector's corresponding 
working papers or field 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 to by the inspector at the time of 
the inspection.
    The lot stamp number has value for the industries, as well. The 
committees utilize the lot stamp number and date codes to trace fruit 
in the container back to the orchard where it was 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. These containers are returnable plastic 
containers. Use of these containers may represent substantial savings 
to retailers for storage and disposal, as well as for handlers who do 
not have to pay for traditional, single-use, containers. Fruit is 
packed in the containers by the handler, delivered to the retailer, 
emptied, and returned to a central clearinghouse for cleaning and 
redistribution to the handler. However, because they were designed for 
reuse, these containers do not support markings that are permanently 
affixed to the container. All markings must be printed on cards that 
slip into tabs on the front or sides of the containers. The cards are 
easily inserted and removed, and further contribute to the efficient 
reuse of the container.
    The cards are a concern for the inspection service and the 
industries. Because of their unique portability, 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 for the 2000 season, the committees 
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, 
noted the committees, an audit trail would be created, confirming that 
the lot stamp number on the containers on each pallet corresponds to 
the lot stamp number on the pallet tag.
    The committees and the inspection service presented their concerns 
to the manufacturers of these types of containers prior to the 2000 
season. At that time, one manufacturer indicated a willingness to 
address the problem by offering an area on the principal display panel 
where the container markings would adhere to the container. Another 
possible improvement discussed was for an adhesive for the current 
style of containers which would securely hold the cards with the lot 
stamp numbers, yet would be easy for the clearinghouse to remove when 
the containers are washed. However, the changes would not be in effect 
for the 2000 season, but were anticipated to be in effect for the 2001 
season.
    In a meeting of the Returnable Plastic Container Task Force on 
November 1, 2000, it was determined that while such a display panel 
might be available for placement of the cards on some containers, there 
was no assurance from container manufacturers that such a panel would 
be available for all returnable plastic containers utilized by the 
industries. In addition, an adhesive is reportedly currently available, 
which may hold the cards securely in place while affording the ease of 
removal necessary for cleaning and redistribution. However, as the 
subcommittee found, the adhesive has yet to be tested under current 
conditions and may not be widely available.
    For those reasons, the task force recommended to the committees 
that the regulation in effect for the 2000 season requiring lot stamp 
numbers on USDA-approved pallet tags, as well as on individual 
containers on a pallet, be again required for the 2001 season. The 
committees, in turn, recommended unanimously that such requirement be 
extended for the 2001 season, as well.
    Thus, the amendment of Secs. 916.115 and 917.150 continues in 
effect to require the lot stamp number to be printed on a USDA-approved 
pallet tag, in addition to the requirement that the lot stamp number be 
applied to cards on all exposed or outside containers, and not less 
than 75 percent of the total containers on a pallet.

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 
for 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 the revision of Secs. 916.350, 
916.356, 917.442, and 917.459 to permit shipments of nectarines and 
peaches meeting ``CA Utility'' quality requirements during the 2001 
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 have been permitted 
each season since 1996.
    Studies conducted by the NAC and PCC indicate that some consumers, 
retailers, and foreign importers find the lower-quality fruit 
acceptable in some markets. When shipments of ``CA Utility'' nectarines 
were first permitted in 1996, they represented 1.1 percent of all 
nectarine shipments, or approximately 210,000 containers. Shipments of 
``CA Utility'' nectarines reached a high of 4.5 percent (928,500 
containers) during the 2000 season, but usually represent approximately 
3 to 3.5 percent of total nectarine shipments. Shipments of ``CA 
Utility'' peaches totaled 1.9 percent of all peach shipments, or 
approximately 366,000 containers, during the 1996 season. Shipments of 
``CA Utility'' peaches reached a high of 4.1 percent of all peach 
shipments (872,500 containers) during the 2000 season, but usually 
range from 3 to 3.5 percent of total peach shipments.
    Handlers have also commented that the availability of ``CA 
Utility'' lends flexibility to their packing operations.

[[Page 39617]]

They have noted that they now have the opportunity to remove marginal 
nectarines and peaches from their U.S. No. 1 containers and place this 
fruit in containers of ``CA Utility.'' This flexibility, the handlers 
note, results in making the contents of their U.S. No. 1 containers 
better without sacrificing any fruit.
    For these reasons, the committees unanimously recommended that 
shipments of ``CA Utility'' quality nectarines and peaches be permitted 
for the 2001 season with a continuing in-house statistical review. The 
revisions of paragraphs (d) of Secs. 916.350 and 917.442, and 
paragraphs (a)(1) of Secs. 916.356 and 917.459 continue in effect to 
permit shipments of nectarines and peaches meeting ``CA Utility'' 
quality requirements during the 2001 season, on the same basis as the 
2000 season.

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'' 
determinations for nectarines and peaches 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 upon the most-recent information 
available on the individual characteristics of each nectarine and peach 
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 2001 handling regulations are the same as 
those that appeared in the 2000 handling regulations 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. This 
rule continues in effect the revision of TABLE 1 of paragraph 
(a)(1)(iv) of Sec. 916.356 to add maturity guides for two varieties of 
nectarines. Specifically, SPI recommended adding maturity guides for 
the Diamond Bright nectarine variety to be regulated at the J maturity 
guide, and for the Honey Kist variety to be regulated at the I maturity 
guide.
    The NAC recommended these maturity guide 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 nectarine varieties in 
production.
    Peaches: Requirements for ``well-matured'' peaches are specified in 
Sec. 917.459 of the order's rules and regulations. This rule continues 
in effect the revision of TABLE 1 of paragraph (a)(1)(iv) of 
Sec. 917.459 to add maturity guides for four varieties of peaches. 
Specifically, SPI recommended adding maturity guides for the Autumn 
Flame and Vista peach varieties to be regulated at the J maturity 
guide, for the Earlitreat variety to be regulated at the H maturity 
guide, and for the Summer Zee variety to be regulated at the L maturity 
guide.
    The PCC recommended these maturity guide 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.
    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, which improves both size 
and maturity of the fruit. Acceptable fruit size provides greater 
consumer satisfaction and promotes repeat purchases; and, therefore, 
increases returns to producers and handlers. In addition, increased 
fruit size results in increased numbers of packed containers of 
nectarines and peaches per acre, also a benefit to producers and 
handlers.
    Varieties recommended for specific size regulations have been 
reviewed and such recommendations are based on the specific 
characteristics of each variety. The NAC and PCC conduct studies each 
season on the range of sizes attained by the regulated varieties and 
those varieties with the potential to become regulated, and determine 
whether revisions and additions to 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 the revision of 
Sec. 916.356 to establish variety-specific minimum size requirements 
for 7 varieties of nectarines, which were produced in commercially 
significant quantities of more than 10,000 containers for the first 
time during the 2000 season. This rule also continues in effect the 
removal of the variety-specific minimum size requirements for 11 
varieties of nectarines whose shipments fell below 5,000 containers 
during the 2000 season.
    For example, one of the varieties recommended for addition to the 
variety-specific minimum size requirements is the September Free 
variety of nectarines, recommended for regulation at a minimum size 80. 
Studies of the size ranges attained by the September Free variety 
revealed that 100 percent of the containers met the minimum size of 80 
during the 2000 season. Sizes ranged from size 40 to size 80, with 3.3 
percent of the packages in the 40 sizes, 37 percent in the 50 sizes, 
32.5 percent in the 60 sizes, 23.8 percent in the 70 sizes and 3.3 
percent at size 80.
    A review of other varieties with the same harvesting period 
indicated that the September Free variety was also comparable to those 
varieties in its size ranges for that time period. Discussions with 
handlers known to handle the variety confirm this information regarding 
minimum size and harvesting period, as well. Thus, the recommendation 
to place the September Free variety in the variety-specific minimum 
size regulation at a minimum size 80 is appropriate.
    Historical 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 the staff 
receives such comments, either in writing or verbally.
    For reasons similar to those discussed in the preceding paragraph, 
the revision of the introductory text of paragraph (a)(3) of 
Sec. 916.356 continues in effect to include the Crimson Baby nectarine 
variety, and the revision of the introductory text of paragraph (a)(4) 
continues in effect to include the Scarlet Jewels nectarine variety. In 
addition, the revision of the introductory text of paragraph (a)(6) of 
Sec. 916.356 continues in effect to include the Arctic Mist, August 
Pearl, July Pearl, September Free, and Spring Sweet nectarine 
varieties.
    This rule also continues in effect the revision of the introductory 
text of paragraphs (a)(4) and (a)(6) of Sec. 916.356 to remove 11 
varieties from the variety-specific minimum size requirements

[[Page 39618]]

specified in the section because less than 5,000 containers of each of 
these varieties were produced during the 2000 season. Specifically, the 
revision of the introductory text of paragraph (a)(4) of Sec. 916.356 
continues in effect the removal of the Diamond Jewel and May Lion 
nectarine varieties; and the revision of the introductory text of 
paragraph (a)(6) of Sec. 916.356 continues in effect the removal of the 
Alshir Red, Autumn Delight, Crystal Rose, Fairlane, Fantasia, Kay 
Bright, Niagra Grand, Rio Red, and White September nectarine varieties.
    Nectarine varieties removed from the nectarine variety-specific 
minimum size requirements become subject to the non-listed variety size 
requirements specified in paragraphs (a)(7), (a)(8), and (a)(9) of 
Sec. 916.356.
    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 10 peach varieties that were produced in 
commercially significant quantities of more than 10,000 containers for 
the first time during the 2000 season. This rule also continues in 
effect the removal of the variety-specific minimum size requirements 
for 9 varieties of peaches whose shipments fell below 5,000 containers 
during the 2000 season.
    For example, one of the varieties recommended for addition to the 
variety-specific minimum size requirements is the Coral Princess 
variety of peaches, which was recommended for regulation at a minimum 
size 72. Studies of the size ranges attained by the Coral Princess 
variety revealed that 100 percent of the containers met the minimum 
size of 72 during the 2000 season. The sizes ranged from the 30 sizes 
to the 70 sizes, with 1.6 percent of the containers meeting the 30 
sizes, 37 percent meeting the 40 sizes, 55.9 percent meeting the 50 
sizes, 4.9 percent meeting the 60 sizes, and 0.6 percent meeting size 
72. The size distribution for the 2000 season was similar to the size 
distribution for the 1999 season.
    A review of other varieties with the same harvesting period 
indicated that the Coral Princess variety was also comparable to those 
varieties in its size ranges for that time period. Discussions with 
handlers known to handle the variety confirm this information regarding 
minimum size and harvesting period, as well. Thus, the recommendation 
to place the Coral Princess variety in the variety-specific minimum 
size regulation at a minimum size 72 is appropriate.
    Historical 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 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 PCC and subcommittee meetings when the staff 
receives such comments, either in writing or verbally.
    For reasons similar to those discussed in the preceding paragraph, 
the revision of the introductory text of paragraph (a)(5) of 
Sec. 917.459 continues in effect to include the Kingscrest peach 
variety; and the revision of the introductory text of paragraph (a)(6) 
of Sec. 917.459 continues in effect to include the Autumn Red, Coral 
Princess, Garnet Jewel, Ivory Princess, Klondike, Pretty Lady, Snow 
Jewel, Summer Dragon, and Sweet Dream peach varieties.
    This rule also continues in effect the revision of the introductory 
text of paragraphs (a)(2), (a)(3), (a)(5), and (a)(6) of Sec. 917.459 
to remove 9 peach varieties from the variety-specific minimum size 
requirements specified in the section because less than 5,000 
containers of each of these varieties were produced during the 2000 
season. Thus, the revision of the introductory text of paragraph (a)(2) 
of Sec. 917.459 continues in effect the removal of the Lady Sue peach 
variety; the revision of the introductory text of paragraph (a)(3) 
continues in effect the removal of the Goldcrest peach variety; and the 
revision of the introductory text of paragraph (a)(5) continues in 
effect the removal of the Merrill Gemfree peach variety. The revision 
of the introductory text of paragraph (a)(6) of Sec. 917.459 continues 
in effect the removal of the Autumn Lady, Early O'Henry, Late September 
Snow, N117, Red Sun, and Suncrest peach varieties.
    Peach varieties removed from the peach variety-specific minimum 
size requirements become subject to the non-listed variety size 
requirements specified in paragraphs (b) and (c) of Sec. 917.459.
    The NAC and PCC recommended these changes in the minimum size 
requirements based on a continuing review of the sizing and maturity 
relationships for these nectarine and peach varieties, and the consumer 
acceptance levels for various fruit sizes. This rule is designed to 
establish minimum size requirements for fresh nectarines and peaches 
consistent with expected crop and market conditions.
    This rule reflects the committees' and the Department's appraisal 
of the need to revise 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 fresh California nectarines and peaches.
    This rule continues in effect the 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 establish and maintain orderly 
marketing conditions for these fruits in the interests of producers, 
handlers, and consumers.

Final 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 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, 
are defined by the Small Business Administration [13 CFR 121.201] as 
those whose annual receipts are less than $5,000,000. Small 
agricultural producers are defined by the Small Business Administration 
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 has estimated that there are less than 20 
handlers in the industry who could be defined as other than small 
entities. In the 2000 season, the average handler price received was 
$9.00 per container or

[[Page 39619]]

container equivalent of nectarines or peaches. A handler would have to 
ship at least 555,555 containers to have annual receipts of $5,000,000. 
Given data on shipments maintained by the committees' staff and the 
average handler price received during the 2000 season, the committees' 
staff estimates that small handlers represent approximately 94 percent 
of the handlers within the industry.
    The committees' staff has also estimated that approximately 22 
percent of the producers in the industry could be defined as other than 
small entities. In the 2000 season, the average producer price received 
was $5.50 per container or container equivalent for nectarines, and 
$5.25 per container or container equivalent for peaches. A producer 
would have to produce at least 90,910 containers of nectarines and 
95,239 containers of peaches to have annual receipts of $500,000. Given 
data maintained by the committees' staff and the average producer price 
received during the 2000 season, the committees' staff estimates that 
small producers represent approximately 78 percent of the producers 
within the industry.
    Under Secs. 916.52 and 917.41 of the orders, grade, size, maturity, 
container, and pack requirements are established for fresh shipments of 
California nectarines and peaches, respectively. Such requirements are 
in effect on a continuing basis. The NAC and PCC met on December 5, 
2000, and unanimously recommended that the handling requirements be 
revised for the 2001 season, which began April 1, 2001. These 
recommendations had been presented to the committees by various 
subcommittees, each charged with the review and discussion of the 
changes. This rule continues in effect the revisions to the handling 
requirements to: (1) Continue the lot stamping requirements which were 
in effect for the 2000 season; (2) authorize shipments of ``CA 
Utility'' quality fruit to continue during the 2001 season; and (3) 
revise varietal maturity, quality, and size requirements to reflect 
recent changes in growing conditions.
    This rule continues in effect the lot stamping requirements for 
returnable plastic containers under the marketing orders' rules and 
regulations that were in effect for such containers during the 2000 
season for nectarine and peach shipments. The modified requirements of 
Secs. 916.115 and 917.150 mandated that the lot stamp numbers be 
printed on a USDA-approved pallet tag, in addition to the requirement 
that the lot stamp number be applied to the cards on all exposed or 
outside containers, and not less than 75 percent of the total 
containers on a pallet. Such requirements are continued in effect for 
the 2001 season, and would help the inspection service safeguard the 
identity of inspected and certified containers of nectarines and 
peaches, and help the industry by keeping in place the information 
necessary to facilitate their ``trace-back'' program.
    The Returnable Plastic Container Task Force and Grade and Size 
Subcommittee considered possible alternatives to this action. They 
discussed the availability of a new container style with a specific 
area on the principal display panel for placement of the cards, but 
were not assured by container manufacturers that all containers would 
have such a display area. Also, in the absence of an adhesive to secure 
the cards, the display area would not meet the requirements of the 
committees or the inspection service. Such alternatives were, thus, 
rejected.
    For these reasons, the task force and subcommittee recommended to 
the committees, and the committees voted unanimously, to extend the 
requirement for the lot stamp number to be provided on the cards on 
each container and for each pallet to be marked with a USDA-approved 
pallet tag, also containing the lot stamp number. Such safeguards will 
continue to ensure that all the containers on each pallet had been 
inspected and certified in the event a card on an individual container 
or containers is removed, misplaced, or lost.
    In 1996, Secs. 916.350 and 917.442 were revised to permit shipments 
of ``CA Utility'' quality nectarines and peaches as an experiment 
during the 1996 season only. Since that time, shipments of ``CA 
Utility'' have ranged from 1 to 4 percent of total nectarine and peach 
shipments. This rule continues in effect the authorization for 
continued shipments of ``CA Utility'' quality nectarines and peaches 
during the 2001 season.
    The Grade and Size Subcommittee considered one alternative to this 
action. They considered not authorizing continued shipments of ``CA 
Utility'' quality nectarines and peaches. However, shipments of ``CA 
Utility'' quality fruit are holding steady or increasing in volume 
since 1996. Also, some handlers note, that the availability of ``CA 
Utility'' gives handlers the flexibility to remove marginal fruit from 
their U.S. No. 1 containers, thus, making the contents of their U.S. 
No. 1 containers better. Based upon these considerations, this 
alternative was rejected.
    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 917.459 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 recommended by SPI. 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 characteristics of 
nectarines and peaches as experienced over the previous season's 
inspections. Adjustments in the guides ensure that fruit has met an 
acceptable level of maturity, ensuring consumer satisfaction while 
benefiting nectarine and peach producers and handlers.
    Currently, in Sec. 916.356 of the nectarine order's rules and 
regulations, and in Sec. 917.459 of the peach order's rules and 
regulations, minimum sizes for various varieties of nectarines and 
peaches, respectively, are established. This rule continues in effect 
the adjustments to the minimum sizes authorized for various varieties 
of nectarines and peaches for the 2001 season. Minimum size regulations 
are put in place to encourage producers to leave fruit on the trees for 
a longer period of time. This increased growing time not only improves 
maturity, but also increases fruit size. Increased fruit size increases 
the number of packed containers per acre; and coupled with heightened 
maturity levels, also provides greater consumer satisfaction, fostering 
repeat purchases. Such improved consumer satisfaction and repeat 
purchases benefit both producers and handlers alike. Such adjustments 
to minimum sizes of nectarines and peaches are recommended by the NAC 
and PCC based upon historical data, producer and handler information 
regarding sizes attained by different varieties, and trends in consumer 
purchases.
    An alternative to such actions would include not establishing lot 
stamping, grade, size, and maturity regulations for nectarines and 
peaches. Such an action, however, would be a significant departure from 
the committees' practices, would ultimately increase the amount of less 
acceptable fruit being marketed to consumers, and, thus, would be 
contrary to the long-term

[[Page 39620]]

interests of producers, handlers, and consumers. For these reasons, 
this alternative is not appropriate.
    The committees made recommendations regarding all the revisions in 
handling and lot stamping requirements after considering all available 
information, including comments of persons at several subcommittee 
meetings and comments received by committee staff. Such subcommittees 
include the Grade and Size Subcommittee, the Inspection and Compliance 
Subcommittee, the Returnable Plastic Container Task Force, and the 
Management Services Committee.
    At the meetings, the impact of and alternatives to these 
recommendations were deliberated. These subcommittees and the task 
force, like the committees themselves, frequently consist of individual 
producers (and handlers, where authorized) with many years' experience 
in the industry who are familiar with industry practices. Like all 
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.
    Additionally, 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 CFR 1621 et seq). Standards 
issued under the Agricultural Marketing Act of 1946 are otherwise 
voluntary.
    In addition, the committees' meetings are widely publicized through 
the nectarine and peach industries and all interested parties are 
encouraged to attend 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 
December 5, 2000, meetings were public meetings, and all entities, 
large and small, were encouraged to express views on these issues. 
Further, various subcommittee meetings were held prior to the December 
5 meeting in which these regulations were reviewed and discussed.
    An interim final rule concerning this action was published in the 
Federal Register on April 2, 2001 (66 FR 17479). Copies of the rule 
were provided to all committee members, and nectarine and peach 
handlers by the committees' staff. In addition, the rule was made 
available through the Internet by the Office of the Federal Register. 
That rule provided for a 60-day comment period, which ended June 1, 
2001. One comment was received.
    The commenter requested several clarifications to the interim final 
rule. One clarification dealt with the spelling of two nectarine 
varieties currently referred to as ``Prima Diamond 13'' and ``Brite 
Pearl.'' According to the commenter, ``Prima Diamond 13'' should be 
corrected to read ``Prima Diamond XIII,'' and ``Brite Pearl'' should be 
corrected to read ``Bright Pearl.''
    The commenter also noted that the name of the nectarine variety 
referred to as ``Super Star'' should be corrected to read 
``Sunecteight.'' Further, the commenter noted, the trademarked name 
``Super Star'' should appear in parentheses after the varietal name 
``Sunecteight'' in the regulations. The current maturity assignment for 
the Super Star variety will be applied to ``Sunecteight (Super Star).''
    The commenter also advised that the name of the peach variety 
currently referred to as ``Amber Crest'' should be corrected to read 
``Supechfour.'' The commenter also requested that the trademarked name, 
``Amber Crest,'' should appear in parentheses after the varietal name 
``Supechfour'' in the regulations. The current maturity assignment for 
the Amber Crest variety will be applied to ``Supechfour (Amber 
Crest).''
    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 matters 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 (66 FR 17479, 
April 2, 2001), 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 California nectarines and peaches from the 2001 crop, and the 
varietal name corrections should be in place for the season: (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 66 FR 17479 on April 2, 2001, 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, TABLE 1 of paragraph (a)(1)(iv), is amended by 
removing the words ``Super Star * * * * * * G'' and adding the words 
``Sunecteight (Super Star)'' with a ``G'' maturity guide, between the 
words ``Sun Diamond'' and ``Sun Grand.''

    3. Section 916.356, paragraph (a)(4), is amended by revising the 
words ``Prima Diamond 13'' to read ``Prima Diamond XIII.''

    4. Section 916.356, paragraph (a)(6), is amended by revising the 
words ``Brite Pearl'' to read ``Bright Pearl;'' by removing the words 
``Super Star;'' and by adding the words ``Sunecteight (Super Star)'' 
between the words ``Sun Diamond'' and ``Sunny Red.''

PART 917--FRESH PEARS AND PEACHES GROWN IN CALIFORNIA


Sec. 917.459  [Amended]

    5. Section 917.459, TABLE 1 of paragraph (a)(1)(iv), is amended by 
removing the words ``Amber Crest * * * * * * G'' and by adding the 
words ``Supechfour (Amber Crest)'' with

[[Page 39621]]

a ``G'' maturity guide, between the words ``Suncrest'' and ``Sweet 
Scarlet.''

    6. Section 917.459, paragraph (a)(6) is amended by removing the 
words ``Amber Crest'' and adding the words ``Supechfour (Amber Crest)'' 
between the words ``Summer Zee'' and ``Sweet Dream.''

    Dated: July 26, 2001.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 01-19099 Filed 7-31-01; 8:45 am]
BILLING CODE 3410-02-P