[Federal Register Volume 69, Number 58 (Thursday, March 25, 2004)]
[Rules and Regulations]
[Pages 15632-15641]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-6701]



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Part VII





Department of Agriculture





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Agricultural Marketing Service



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7 CFR Parts 916 and 917



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

  Federal Register / Vol. 69, No. 58 / Thursday, March 25, 2004 / Rules 
and Regulations  

[[Page 15632]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 916 and 917

[Docket No. FV03-916-2 FIR]


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (USDA) is adopting, as a final 
rule, with minor changes, the provisions of an interim final rule and 
an amended interim final rule revising the handling requirements for 
California nectarines and peaches by modifying the grade, size, 
maturity, and container and pack requirements for fresh shipments of 
these fruits, beginning with 2003 season shipments. This rule also 
continues in effect a modification of the requirements for placement of 
Federal-State Inspection Service lot stamps for the 2003 season, a 
revised net weight for a style of containers, an exemption for those 
containers from the well-filled requirement, clarifications to the 
provisions on the use of variety names, and the revised weight-count 
standards for Peento type peaches. It also changes the names of six 
peach varieties for clarification purposes. The marketing orders 
regulate the handling of nectarines and peaches grown in California and 
are administered locally by the Nectarine Administrative and Peach 
Commodity Committee (committees).

EFFECTIVE DATE: March 26, 2004.

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, 1400 
Independence Avenue, SW., STOP 0237, Washington, DC 20250-0237; 
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, 1400 Independence 
Avenue, SW., STOP 0237, Washington, DC 20250-0237; 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 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 (USDA) 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 USDA 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, USDA 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 USDA's ruling on the petition, 
provided an action is filed not later than 20 days after the date of 
the entry of the ruling.
    This final rule adopts, with minor changes, the provisions of an 
interim final rule published in the Federal Register on August 13, 2003 
(68 FR 48251) that amended an interim final rule that was published in 
the Federal Register on April 9, 2003 (68 FR 17257). Together, these 
rules made modifications to the handling requirements for fresh 
nectarines and peaches under the orders' rules and regulations.
    Under the orders, lot stamping, grade, size, maturity, and 
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 3, 2002, and unanimously 
recommended that these handling requirements be revised for the 2003 
season, which began in April. The changes contained in the interim 
final rule: (1) Continue the lot stamping requirements which have been 
in effect since the 2000 season; (2) authorize shipments of ``CA 
Utility'' quality fruit to continue during the 2003 season; (3) revise 
weight-count standards for the Peento type peaches; (4) establish a net 
weight for all five-down containers and exempt those containers from 
the well-filled requirement; and (5) revise varietal maturity, quality, 
and size requirements to reflect changes in growing and marketing 
practices.
    The committees met again on May 1, 2003, and recommended further 
modification to the orders' rules and regulations. The changes 
contained in the amended interim final rule: (1) Provide an additional 
net weight for five down Euro containers, (2) exempt Peento type 
peaches from all weight-count standards applicable to round varieties, 
and (3) clarify the provisions on the use of variety names.
    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 committees held such meetings on December 3, 
2002, and May 1, 2003. USDA 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 recommended crop estimates at their May 1, 
2003, meetings of 22,004,000 containers or container equivalents of 
nectarines and 21,336,000 containers or container equivalents of 
peaches, which are slightly lower than the 2002 actual production.

Lot Stamping Requirements

    Sections 916.55 and 917.45 of the orders require inspection and 
certification of nectarines and peaches, respectively, handled by 
handlers.

[[Page 15633]]

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 from which 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.
    Over the last few years, several new containers have been 
introduced for use by nectarine and peach handlers. These containers 
are returnable plastic containers (RPCs). Use of RPCs 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 these 
containers are designed for reuse, RPCs 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 RPCs.
    The cards are a continuing concern for the inspection service and 
the industries 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 
industry's ``trace back'' program.
    To address this concern since the 2000 season, the committees have 
annually recommended that pallets of inspected fruit in RPCs 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 each container on the 
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 offered by the 
manufacturers were not available for use in the previous three seasons, 
and there is no assurance that they will be available for the 2003 
season.
    During a meeting of the Stone Fruit Grade and Size Subcommittee on 
November 6, 2002, it was determined that given the different styles and 
configurations of RPCs available, having a standardized display panel 
or a satisfactory adhesive for placement of the cards may not be 
realistic and the industry needed to continue the lot stamping 
requirements in place since the 2000 season.
    For those reasons, the subcommittee unanimously recommended to the 
committees that the regulation in effect since 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 2003 
season. The committees, in turn, recommended unanimously that such 
requirement be extended for the 2003 season, as well.
    Thus, the amendments to Sec. Sec.  916.115 and 917.150 are 
continued 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, 
during the 2003 season.

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. 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 Sec. Sec.  916.350, 
916.356, 917.442, and 917.459 to permit shipments of nectarines and 
peaches meeting ``CA Utility'' quality requirements during the 2003 
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 in 1996 indicated 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 represented 1.1 percent 
of all nectarine shipments, or approximately 210,000 containers. 
Shipments of ``CA Utility'' nectarines reached a high of 5.3 percent 
(1,239,000 containers) during the 2002 season, but usually represent 
approximately 4 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 5.6 percent of all peach 
shipments (1,231,000 containers) during the 2002 season, but usually 
represent approximately 4 percent of total peach shipments.
    Handlers have also commented that the availability of the ``CA 
Utility'' quality option lends flexibility to their packing operations. 
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

[[Page 15634]]

note, results in better quality U.S. No. 1 packs without sacrificing 
fruit.
    The Stone Fruit Grade and Size Subcommittee met on November 6, 
2002, and did not make a recommendation to the NAC and PCC to continue 
shipments of ``CA Utility'' quality nectarines and peaches. Some 
subcommittee members raised concerns about ``CA Utility'' quality 
fruit, including concerns that growers' returns on ``CA Utility'' 
quality fruit are lower. The issue of the authorized tolerance of 40 
percent U.S. No. 1 fruit in each container of ``CA Utility'' quality 
was raised, and there was some discussion that the tolerance should be 
reduced so that less U.S. No. 1 fruit would be in a box of ``CA 
Utility'' quality fruit. However, ultimately no decisions were made by 
the subcommittee as the result of these discussions.
    Subsequently, however, the NAC and PCC voted unanimously at their 
December 3, 2002, meetings to authorize continued shipments of ``CA 
Utility'' quality fruit during the 2003 season.
    Accordingly, based upon the recommendations, the revision of 
paragraph (d) of Sec. Sec.  916.350 and 917.442, and paragraph (a)(1) 
of Sec. Sec.  916.356 and 917.459 is continued in effect to permit 
shipments of nectarines and peaches meeting ``CA Utility'' quality 
requirements during the 2003 season, on the same basis as shipments 
since the 2000 season.

Weight-Count Standards for Peento Type Peaches

    Under the requirements of Sec.  917.41 of the order, containers of 
peaches are required to meet weight-count standards for a maximum 
number of peaches in a 16-pound sample when such peaches, which may be 
packed in tray-packed containers, are converted to volume-filled 
containers. Under Sec.  917.442 of the order's rules and regulations, 
weight-count standards are established for all varieties of peaches as 
Tables 1, 2, and 3 of paragraph (a)(5)(iv).
    According to the PCC, Peento type peaches were initially packed in 
trays because they were marketed as a premium variety, whose value 
justified the added packing costs. However, as the volume has 
increased, the value of Peento type peaches has diminished in the 
marketplace, and some handlers converted their tray-packed containers 
of Peento type peaches to volume-filled containers.
    Prior to the 2002 season, weight-count standards established for 
peaches and nectarines were developed solely for round fruit. Peento 
type peaches are shaped like donuts, and weight-count standards for 
round fruit were inappropriate. In an effort to standardize the 
conversion from tray-packed containers to volume-filled containers for 
Peento type peaches, the committee staff conducted weigh-count surveys 
to determine the most optimum weight-counts for the varieties at 
varying fruit sizes.
    As a result of those surveys, a new weight-count table applicable 
to only the Peento type peaches was added for the 2002 season and 
amended for the 2003 season. The new weight-count tables accommodate 
very large Peento type peaches that were not previously converted from 
tray-packs to volume-filled containers, but were being packed in 
volume-filled containers and required weight-count standards 
specifically for those sizes. These weight-count standards continue in 
effect.
    However, Peento peaches, which are subject to weight-count 
standards in Table 3 of paragraph (a)(5)(iv) in Sec.  917.442, were not 
exempted from weight-count standards in the non-listed variety size 
requirements specified in paragraphs (b)(3) and (c)(3) of Sec.  
917.459, according to the commenter. This was an inadvertent omission 
in the previous interim final rule and required a conforming change in 
the amended interim final rule.
    This final rule continues in effect the corrections to paragraphs 
(b)(3) and (c)(3) of Sec.  917.459, which exempts Peento type peaches 
from the weight-count standards applicable to round varieties by adding 
the words ``except for Peento type peaches'' at the end of paragraphs 
(b)(3) and (c)(3) of Sec.  917.459.

Container and Pack Requirements

    Sections 916.52 and 917.41 of the orders authorize establishment of 
container, pack, and marking requirements for shipments of nectarines 
and peaches, respectively. Under Sec. Sec.  916.350 and 917.442 of the 
orders' rules and regulations, the specifications of container 
markings, net weights, well-filled requirements, weight-count standards 
for various sizes of nectarines and peaches, and lists of standard 
containers are provided.
    The committees unanimously recommended that a uniform net weight be 
established for all ``five down'' boxes (commonly referred to as 
``Euro'' boxes), and that all such containers be exempted from the 
well-filled requirement. The net weight requirement in effect at that 
time of 31 pounds for ``five down'' boxes and the exemption from the 
well-filled requirement applies only to RPCs. However, as a handler 
noted at one meeting, the industry uses boxes of the same ``footprint'' 
(length and width dimensions) as the RPCs that are made of more 
traditional materials, such as corrugated cardboard. ``Five down'' 
boxes are containers that lay in a pattern of five containers per layer 
on each pallet. In other words, each layer of boxes on a pallet 
contains only five Euro boxes. Other container sizes and footprints may 
result in nine boxes per layer, etc. Since applying the well-filled 
requirements to any five down Euro box might result in bruising or 
other damage to fruit packed in it, the Stone Fruit Grade and Size 
Subcommittee voted unanimously to extend the requirements applicable to 
RPCs with regard to net weight and well-filled requirements to all five 
down Euro containers. This would ensure that all five down Euro 
containers have a uniform net weight and ensure that the fruit in those 
containers is handled in such a way to minimize damage. These 
requirements continue in effect.
    At the December 3, 2002, meeting, the NAC and PCC also unanimously 
recommended that all five down Euro boxes have an established net 
weight of 31 pounds, which is to be printed on the end of the 
container, and that those containers, like the RPCS, be exempt from the 
well-filled requirement.
    However, discussions regarding minimum net weights for all five 
down Euro boxes continued at the April 8, 2003, Grade and Size 
Subcommittee meeting and at the May 1, 2003, committee meetings.
    As a result of those meetings, the committees revised their 
December 3, 2003, recommendation to include the authority for a 29-
pound box in addition to the 31-pound box, thus necessitating the need 
for the amended interim final rule. That rule was published on August 
13, 2003 (68 FR 48251). The committees recommended the additional net 
weight when a handler requested such consideration. Containers used in 
the nectarine and peach industry have largely resulted from retailer 
demands. Many retailers want all of their suppliers to provide them 
with commodities in containers of the same footprint (length and width 
dimensions), thereby creating consistency and ease of transportation, 
storage, etc., for the retailer. Euro containers meet those demands, 
but require the industry to make changes in pack styles and package 
weights to conform to the evolving demands of the retail sector.
    This recommendation resulted from a request by a handler who wanted 
to respond to a demand from one of his larger retail customers. The 
customer wanted volume-filled containers of nectarines and peaches of 
the same

[[Page 15635]]

weight as tray-packed containers, which currently weigh 29 pounds.
    At the meeting, the handler advised the committees that the current 
minimum net weight of 31 pounds for volume-filled Euro containers is 
not flexible enough to afford him the opportunity to meet the demands 
of his buyer.
    Nectarines: For the reasons stated above, the revision of paragraph 
(a)(8) of Sec.  916.350 continues in effect to include a 29-pound net 
weight for all volume-filled five down Euro containers of nectarines, 
in addition to the 31-pound net weight authorized. The 29-pound 
container will be permitted during the 2003 season only. At the end of 
the 2003 season, the committee will recommend either a 29-pound, 31-
pound container, or other appropriate weight. The container markings 
shall be placed on one outside end of the container in plain sight and 
in plain letters.
    Peaches: For the reasons stated above, the revision to paragraph 
(a)(9) of Sec.  917.442 continues in effect to include a 29-pound net 
weight for all volume-filled five down Euro containers of peaches, in 
addition to the 31-pound net weight authorized. The 29-pound container 
will be permitted during the 2003 season only. At the end of the 2003 
season, the committee will recommend either a 29-pound, 31-pound 
container, or other appropriate weight. The markings shall be placed on 
one outside end of the container in plain sight and in plain letters.

Variety Nomenclature

    In Sec. Sec.  916.350 and 917.442 of the orders' rules and 
regulations, specifications of container markings, net weights, well-
filled requirements, weight-count standards for various sizes of fruit, 
and lists of standard containers are provided.
    In Sec. Sec.  916.356 and 917.459 of the orders' rules and 
regulations, specifications of grade, maturity, and size regulations 
for nectarines and peaches, respectively, are assigned by variety. 
These variety-specific requirements are applied based upon the name of 
the variety, the size each variety is known to attain, the appropriate 
maturity guide (e.g., color chip) for the variety, and the historic 
harvest period specific to each named variety.
    In Sec. Sec.  916.60 and 917.50, handlers are required to report on 
shipments of nectarines and peaches. Sections 916.160 and 917.178 of 
the orders' rules and regulations specify the types of reports that 
handlers must file with the committees. Among the requirements, 
handlers must report the total shipments of nectarines and peaches by 
variety by November 15 of each year. Thus, ensuring that the 
appropriate name of each variety is used for inspections and reports is 
critical to the operation of the nectarine and peach marketing orders.
    Some handlers are using trademark names in place of the patented or 
introductory name on containers of fruit and in committee reports. 
Thus, the Shipping Point Inspection Service (SPI) may not be able to 
provide appropriate inspection for a variety with an unfamiliar name 
and the committees may not be able to collect data appropriately. 
Accordingly, the amendment of paragraphs (a)(2) of Sec. Sec.  916.350 
and 917.442 are continued in effect by adding that a marketing name, 
trademark, or brand name may be associated with the patented or 
introductory name, but cannot be substituted for a variety name.
    In recognition of this language, this final rule corrects the names 
of six peach varieties so those varieties are identified by their 
patented or introductory names. The patented or introductory names are 
listed first followed by the marketing name, trademark, or brand name 
in parenthesis. Thus, Table 1 of paragraph (a)(1)(iv) of Sec.  917.459 
is revised to change the name of the Burpeachthree peach variety to 
Burpeachthree (September Flame); the introductory text of paragraph 
(a)(5) is amended to change the name of the Burpeachone peach variety 
to Burpeachone (Spring Flame 21); and the introductory text of 
paragraph (a)(6) of Sec.  917.456 is revised to change the names of the 
Burpeachtwo, Burpeachthree, Burpeachfive, and Burpeachsix peach 
varieties to Burpeachtwo (Henry II), Burpeachthree (September Flame), 
Burpeachfour (August Flame), Burpeachfive (July Flame), and Burpeachsix 
(June Flame), respectively. The names in parentheses are included with 
the patented or introductory names because these names sometimes are 
more familiar to handlers.

Maturity and Size Requirements

    In Sec. Sec.  916.52 and 917.41, authority is provided 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. 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 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 orders have been codified in the Code of Federal Regulations as 
Table 1 in Sec. Sec.  916.356 and 917.459, for nectarines and peaches, 
respectively.
    The requirements in the 2003 handling regulations are the same as 
those that appeared in the 2002 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 four varieties 
of nectarines. Specifically, SPI recommended adding maturity guides for 
the Mango variety to be regulated at the B maturity guide, for the 
Honey Royale and the Sunny Red varieties at the J maturity guide, and 
the Prince Jim variety to be regulated at the L 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 six peach varieties. Specifically, 
SPI recommended adding maturity guides for the September Flame variety 
to be regulated at the I maturity guide; Autumn Red, Magenta Queen, 
Pretty Lady, and the Prima Gattie 10 varieties to be regulated at the J 
maturity guide; and the Golden Princess variety to be regulated at the 
L maturity guide.
    In addition, SPI requested that the language in paragraph 
(a)(1)(vi) of Sec.  917.459 be revised with regard to the Joanna Sweet 
variety. The Joanna Sweet variety was previously required to have a one 
hundred percent surface color requirement for meeting the assigned 
color chip. SPI requested that the language be changed to reflect that 
any of the fruit surface that is not red shall meet the color guide 
established for the variety, including any color found in the stem 
cavity. This recommendation is based upon SPI's experience with the 
maturity characteristics of this variety.

[[Page 15636]]

    Thus, the revision of paragraph (a)(1)(iv) of Sec.  917.459 
continues in effect to reflect that recommendation. 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 Sec. Sec.  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 establishing variety-specific minimum size requirements 
for four varieties of nectarines that were produced in commercially-
significant quantities of more than 10,000 containers for the first 
time during the 2002 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 2002 season.
    For example, one of the varieties recommended for addition to the 
variety-specific minimum size requirements is the Red Roy variety of 
nectarines, recommended for regulation at a minimum size 88. Studies of 
the size ranges attained by the Red Roy variety revealed that 100 
percent of the containers met the minimum size of 88 during the 2002 
season. Sizes ranged from size 40 to size 88, with 1.5 percent of the 
fruit in the 40 sizes, 22.2 percent of the packages in the 50 sizes, 
55.8 percent in the 60 sizes, 14.6 percent in the 70 sizes, 5.4 in the 
80 sizes, with .5 percent in the size 88.
    A review of other varieties with the same harvesting period 
indicated that the Red Roy 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 Red Roy variety in the variety-specific minimum size 
regulation at a minimum size 88 is appropriate. This recommendation 
resulted from size studies conducted over a two-year period.
    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)(4) of Sec.  916.356 continues in 
effect to include the Red Roy variety; and the revision of the 
introductory text of paragraph (a)(6) of Sec.  916.356 continues in 
effect to include the Candy Gold, Candy Sweet, and Honey Royale 
nectarine varieties.
    This rule also continues in effect the revision of the introductory 
text of paragraphs (a)(3), (a)(4), and (a)(6) of Sec.  916.356 to 
remove 11 varieties from the variety-specific minimum size requirements 
specified in these paragraphs because less than 5,000 containers of 
each of these varieties were produced during the 2002 season. 
Specifically, the revision of the introductory text of paragraph (a)(3) 
of Sec.  916.356 continues in effect to remove the Johnny's Delight and 
May Jim nectarine varieties; the revision of the introductory text of 
paragraph (a)(4) of Sec.  916.356 continues in effect to remove the 
Scarlet Jewels and Star Brite nectarine variety; and the revision of 
the introductory text of paragraph (a)(6) of Sec.  916.356 continues in 
effect to remove the Arctic Gold, Kay Diamond, Prima Diamond XVI, 
Spring Diamond, Spring Red, Summer Beaut, and Sunecteight (Super Star) 
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 12 peach varieties that were produced in 
commercially-significant quantities of more than 10,000 containers for 
the first time during the 2002 season. This rule also continues in 
effect the removal of variety-specific minimum size requirements for 10 
varieties of peaches whose shipments fell below 5,000 containers during 
the 2002 season.
    For example, one of the varieties recommended for addition to the 
variety-specific minimum size requirements is the Springtreat (60EF32) 
variety of peaches, which was recommended for regulation at a minimum 
size 80. Studies of the size ranges attained by the Springtreat 
(60EF32) variety revealed that 100 percent of the containers met the 
minimum size of 80 during the 2002 season. The sizes ranged from size 
50 to size 80, with 8.2 percent of the containers meeting the size 50, 
41.2 percent meeting the size 60, 37.6 percent meeting the size 70, and 
12.9 percent meeting the size 80.
    A review of other varieties with the same harvesting period 
indicated that the Springtreat (60EF32) variety was also comparable to 
those varieties in its size ranges for that time period. Discussions 
with handlers known to pack the variety confirm this information 
regarding minimum size and harvesting period, as well. Thus, the 
recommendation to place the Springtreat (60EF32) variety in the 
variety-specific minimum size regulation at a minimum size 80 is 
appropriate. This recommendation, as with all other size 
recommendations for peaches, resulted from size studies conducted over 
a three-year period.
    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 Happy Dream, Magenta

[[Page 15637]]

Queen, Springtreat (60EF32), and Spring Flame 21 peach varieties; and 
the revision of the introductory text of paragraph (a)(6) of Sec.  
917.459 continues in effect to include the August Flame, Henry II, June 
Flame, Pink Giant, Prima Peach XV, Red Giant, Snow Beauty, and Snow 
Princess peach varieties.
    This rule also continues in effect the revision of the introductory 
text of paragraph (a)(3) of Sec.  917.459 to remove the Topcrest peach 
variety; continues in effect the revision of the introductory text of 
paragraph (a)(5) of Sec.  917.459 to remove the White Dream peach 
variety; and continues in effect the revision of the introductory 
paragraph (a)(6) of Sec.  917.459 to remove the Cal Red, Champagne, 
Flaming Dragon, Garnet Jewel, Lacey, Madonna Sun, Morning Lord, and Red 
Sun peach varieties from the variety-specific minimum size requirements 
specified in the section because less than 5,000 containers of each of 
these varieties was produced during the 2002 season.
    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 continues these 
requirements in effect and 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 USDA's appraisal of the need 
to revise the handling requirements for California nectarines and 
peaches, as specified. USDA believes 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 establishment of 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 to 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 include 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 $750,000. 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. For the 2002 season, the committees' staff estimated that the 
average handler price received was $9.00 per container or container 
equivalent of nectarines or peaches. A handler would have to ship at 
least 556,000 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 2002 season, the committees' staff 
estimates that small handlers represent approximately 94 percent of all 
the handlers within the industry.
    The committees' staff has also estimated that less than 20 percent 
of the producers in the industry could be defined as other than small 
entities. For the 2002 season, the committees' estimated the average 
producer price received was $4.00 per container or container equivalent 
for nectarines and peaches. A producer would have to produce at least 
187,500 containers of nectarines and peaches to have annual receipts of 
$750,000. Given data maintained by the committees' staff and the 
average producer price received during the 2002 season, the committees' 
staff estimates that small producers represent more than 80 percent of 
the producers within the industry. With an average producer price of 
$4.00 per container or container equivalent, and a combined packout of 
nectarines and peaches of 45,354,000 containers, the value of the 2002 
packout level is estimated to be $181,416,000. Dividing this total 
estimated grower revenue figure by the estimated number of producers 
(1,800) yields an estimate of average revenue per producer of about 
$101,000 from the sales of peaches and nectarines.
    Under Sec. Sec.  916.52 and 917.41 of the orders, grade, size, 
maturity, container, container marking, 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 3, 2002, and unanimously 
recommended that these handling requirements be revised for the 2003 
season. These recommendations had been presented to the committees by 
various subcommittees, each charged with review and discussion of the 
changes. The changes contained in the interim final rule: (1) Continue 
the lot stamping requirements for reusable plastic containers that have 
been in effect since the 2000 season; (2) authorize shipments of ``CA 
Utility'' quality fruit to continue during the 2003 season; (3) revise 
weight-count standards for the Peento type peaches; (4) establish a net 
weight for all five-down containers and exempt those containers from 
the well-filled requirement; and (5) revise varietal maturity, quality, 
and size requirements to reflect changes in growing and marketing 
practices.
    The committees met again on May 1, 2003, and recommended amendments 
to the interim final rule. The changes contained in the amended interim 
final rule: (1) Provide an additional net weight for five down Euro 
containers, (2) exempt Peento type peaches from all weight-count 
standards applicable to round varieties, and (3) clarify the provisions 
on the use of variety names.

Lot Stamping Requirements--Discussions and Alternatives

    This final rule continues in effect the lot stamping requirements 
for returnable plastic containers under the marketing orders' rules and 
regulations that have been in effect for such containers since the 2000 
season for nectarine and peach shipments. The modified requirements

[[Page 15638]]

of Sec. Sec.  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 cards on all 
exposed or outside containers, and not less than 75 percent of the 
total containers on a pallet. Continuation in effect of such 
requirements for the 2003 season would help the inspection service 
safeguard the identity of inspected and certified containers of 
nectarines and peaches, and would help the industry by keeping in place 
the information necessary to facilitate their ``trace-back'' program.
    The Stone Fruit Grade and Size Subcommittee met on November 6, 
2002, and considered possible alternatives to this action. Other 
alternatives were rejected because it was determined that given the 
different styles and configurations of RPCs available, having a 
satisfactory adhesive for placement of the cards may not be realistic, 
at least for the time being, given the reluctance of box manufacturers 
to respond to the industry's requests.
    For those reasons, the subcommittee and the committees unanimously 
recommended extending the requirement for the lot stamp number to be 
printed 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 are intended to ensure that all the containers on each 
pallet have been inspected and certified in the event a card on an 
individual container or containers is removed, misplaced, or lost.

Grade and Quality Requirements--Discussions and Alternatives

    In 1996, Sec. Sec.  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. Such shipments have 
subsequently been permitted each season. Since 1996, shipments of ``CA 
Utility'' have ranged from 1 to 5 percent of total nectarine and peach 
shipments. This rule authorizes continued shipments of ``CA Utility'' 
quality nectarines and peaches during the 2003 season.
    The Grade and Size Subcommittee met on November 6, 2002, and 
briefly discussed ``CA Utility'' quality nectarines and peaches. The 
subcommittee deliberated the relative value of continued shipment of 
``CA Utility'' quality nectarines and peaches. The subcommittee 
ultimately did not make a recommendation to the NAC and PCC regarding 
continued shipments of ``CA Utility'' quality nectarines and peaches. 
The subcommittee did, however, request that the results of a grower 
survey on attitudes toward ``CA Utility'' quality fruit conducted in 
December of 2001 by the committees be provided to the committees at the 
December 3, 2002, meeting.
    However, at their meetings on December 3, 2002, the NAC and PCC 
unanimously recommended continued shipments of ``CA Utility'' quality 
nectarines and peaches, noting that the alternative to discontinue such 
shipments was not in the interest of the industry and would have been 
inconsistent with past practices of permitting such shipments.

Weight-Count Standards for Peento Type Peaches--Discussions and 
Alternatives

    Section 917.442 also establishes minimum weight-count standards for 
containers of peaches. Under these requirements, containers of peaches 
are required to meet weight-count standards for a maximum number of 
peaches in a 16-pound sample when such peaches are packed in a tray-
packed container. Those same maximum numbers of peaches are also 
applicable to volume-filled containers, based upon the tray-packed 
standard. The weight-count standard was developed so handlers may 
convert tray-packed peaches to volume-filled containers and be assured 
that fruit of a specific size in the volume-filled container will be 
the same as that in the tray-packed container.
    When Peento type peach varieties were first introduced and 
marketed, they were generally tray-packed because they were a novel and 
premium product. As production has increased, the value of the 
varieties has diminished in the marketplace, and some handlers have 
converted their tray-packed containers of Peento type peaches to 
volume-filled containers. Weight-count standards provide a basis for 
volume filling containers of other varieties of peaches. Peento type 
peaches are regulated under a new table of weight-count standards 
applicable to only these uniquely-shaped peaches, and this regulation 
continues in effect.
    This rule continues in effect the exemption from the weight-count 
standards for round peaches in the non-listed (blanket) variety sizes 
in paragraph (b)(3) and (c)(3) of Sec. Sec.  917.459. Thus, under the 
rules and regulations in the orders, varieties of Peento type peaches 
that are not regulated by name would be regulated by date of harvest in 
the blanket regulations. To correct that omission, the words ``except 
Peento type peaches'' were added to the end of each of those 
paragraphs.
    The alternative to this conforming change would be to have Peento 
type peaches in non-listed variety sizes subject to the same weight-
count standards assigned to round varieties, treating these Peento type 
peaches differently than other varieties of Peento type peaches. 
Clearly, that is not an acceptable alternative, given that these donut-
shaped peaches cannot meet the requirements established for round 
peaches, and require their own weight-count standards.
    Also under section 917.442, containers of peaches must meet weight-
count standards for a maximum number of peaches in a 16-pound sample 
when such peaches are packed in a tray-packed container. Those same 
maximum numbers of peaches are also applicable to volume-filled 
containers, based upon the tray-packed standard. The weight-count 
standard was developed so handlers may convert tray-packed peaches to 
volume-filled containers and be assured that fruit of a specific size 
in the volume-filled container will be the same as that in the tray-
packed container.
    When the Stone Fruit Grade and Size Subcommittee met on November 6, 
2002, they discussed the recent changes in the packing and marketing of 
Peento type peaches. When these varieties were first introduced and 
marketed, they were generally tray-packed because they were a novel and 
premium product. As production has increased, the value of the 
varieties has diminished in the marketplace, and some handlers have 
converted their tray-packed containers of Peento type peaches to 
volume-filled containers. Weight-count standards provide a basis for 
volume filling containers of peaches. Peento type peaches are regulated 
under a new table of weight-count standards applicable to only these 
uniquely-shaped peaches, and these standards continue in effect.
    During continued weight studies conducted in 2002, the staff 
learned that all available sizes of Peento type peaches were being 
packed in volume-filled containers, including sizes for which there 
were not yet minimum weight-count standards. For that reason, 
modifications to Table 3 in paragraph (a)(5)(vi) of Sec.  917.442 are 
continued in effect to include additional sizes 30 and 32, which are 
larger-sized Peento peaches.
    The alternative to this would result in larger-sized Peento type 
peaches being exempted from weight-count standards applicable to these 
fruit specifically. They may, however, have been subject to weight-
counts for their size (30 and

[[Page 15639]]

32) of round varieties of peaches. Clearly, that alternative is not 
acceptable, given the unique shape of Peento type peaches.

Container and Pack Requirements--Discussions and Alternatives

    The Stone Fruit Grade and Size Subcommittee also discussed the 31-
pound net weight requirement for all five down Euro containers at its 
meeting on November 6, 2002. At that time, it was noted by one handler 
that the current net weight of 31 pounds and exemption from the well-
filled requirement are applicable to only the RPCs. The handler noted, 
however, that the industry also currently uses five down Euro boxes 
that are not RPCs. He further suggested that all five down Euro boxes 
should be required to meet the net weight of 31 pounds and be exempted 
from the requirement to be well-filled. The subcommittee agreed and 
unanimously recommended the change to the committees. The alternative 
would have meant that only the RPC five down Euro containers would have 
been subject to the minimum regulated with a net weight of 31 pounds, 
and exempted from the requirement to be well-filled. In consideration 
of uniformity for all five down Euro containers, this alternative was 
rejected.
    The Stone Fruit Grade and Size Subcommittee discussed the 31-pound 
net weight requirement for volume-filled five down Euro containers 
again at another meeting on April 8, 2003. At that time, one handler 
advised that the current net weight of 31 pounds is not flexible enough 
to afford him the opportunity to meet the demands of his buyers. The 
handler noted that one large customer has begun demanding volume-filled 
boxes of nectarines and peaches in a 29-pound box rather than a 31-
pound box, which makes the volume-filled container weight consistent 
with the tray-packed container weight. The handler added that he was 
unable to provide what his customer wanted, given that the current 
requirements limit him to a box with a 31-pound minimum weight. In the 
absence of change, the handler would be forced to ship 31 pounds to the 
customer, and risk receiving payment for only the 29 pounds the 
customer wanted. The subcommittee agreed that the 31-pound box did not 
provide enough flexibility for all handlers and unanimously recommended 
that the minimum 31-pound requirement for volume-filled containers be 
revised. The alternative would have meant that this handler at least 
would have been unable to meet the demands of a buyer without pricing 
considerations. In an effort to enhance each handler's ability to 
provide what the market demands, such an alternative was rejected.
    The NAC and PCC discussed the subcommittee's recommendation at 
their meeting on May 1, 2003. They debated the value of simply making 
29 pounds the sole minimum net weight for volume-filled Euro 
containers, but opted to maintain the 31-pound container and add the 
29-pound container for the 2003 season, contingent upon review at the 
end of the season by the Grade and Size Subcommittee. At that time, the 
subcommittee is expected to recommend only one net weight for five 
down, volume-filled Euro containers of nectarines and peaches for the 
2004 season.
    The NAC voted 7 in favor and one opposed to this recommendation, 
while the PCC voted unanimously in favor of the recommendation. The NAC 
member opposed to the recommendation noted that additional box styles 
are costly to the industry and should be avoided, if possible. However, 
the large majority of committee members disagreed with that 
alternative, opting instead to take steps to be responsive to buyers.
    Sections 916.350 and 917.442 establish container, pack, and marking 
requirements for shipments of nectarines and peaches, respectively. 
This rule continues in effect the changes to the pack and container 
marking requirements of the orders' rules and regulations to authorize 
both a 29-pound and a 31-pound net weight for all types of five down 
Euro boxes, and exempt such boxes from the well-filled requirement.

Variety Nomenclature--Discussions and Alternatives

    The Grade and Size Subcommittee discussed the issue of variety 
nomenclature at its meeting on April 8, 2003. Several members expressed 
concern that use of different marketing names by different handlers for 
the same variety was causing mismarking situations, which affect 
inspections, size and maturity assignments, and data collection. The 
current regulations require that containers bear the name of the 
variety. This was clarified in the amended interim final rule of August 
13, 2003, by adding that trademarks, marketing names, and brand names 
may be associated with the variety name, but cannot be substituted for 
the variety name. We are finalizing this change. This change is 
expected to foster consistent variety identification within the 
industries, and uniform application of maturity and size requirements.
    As noted in the discussion of comments concerning the naming of 
varieties and recognizing the importance of providing a uniform method 
of identifying varieties, USDA plans to work with the committees in 
developing procedures on the naming of varieties to assure consistency 
within the industries. If necessary, further rulemaking will be 
implemented by USDA on this issue.

Maturity and Size Requirements--Discussions and Alternatives

    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 refinements in measurements of the maturity 
characteristics of nectarines and peaches as experienced over previous 
seasons' inspections. Adjustments in the guides utilized 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 rule and 
regulations, and in Sec.  917.459 of the peach order's rule 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 2003 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 improves maturity, 
increases fruit size, and results in the increased number of packed 
containers per acre. Those factors, coupled with heightened maturity 
levels, also provide greater consumer satisfaction, which foster repeat 
purchases. Those factors, in turn, benefit both producers and handlers 
alike.
    Annual adjustments to minimum sizes of nectarines and peaches, such 
as these, 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.

[[Page 15640]]

    An alternative to such action would include not establishing 
minimum size regulations for these new varieties. Such an action, 
however, would be a significant departure from the committees' 
practices and represent a significant change in the regulations as they 
currently exist; could ultimately increase the amount of less 
acceptable fruit being marketed to consumers; and, thus, would be 
contrary to the long-term interests of producers, handlers, and 
consumers. For these reasons, this alternative was not recommended.
    The committees make recommendations regarding all the revisions in 
handling and lot stamping requirements after considering all available 
information, including recommendations by various subcommittees, 
comments of persons at committee and subcommittee meetings, and 
comments received by committee staff. Such subcommittees include the 
Stone Fruit Grade and Size Subcommittee, the Inspection and Compliance 
Subcommittee, and the Executive Committee.
    At the meetings, the impact of and alternatives to these 
recommendations are deliberated. These subcommittees, like the 
committees themselves, frequently consist of individual producers and 
handlers with many years' experience in the industry who are familiar 
with industry practices and trends. Like all committee meetings, 
subcommittee meetings are open to the public and comments are widely 
solicited. In the case of the Stone Fruit Grade and Size Subcommittee, 
many growers and handlers who are affected by the issues discussed by 
the subcommittee are invited to attend the meetings and actively 
participate in the public deliberations. In addition, minutes of all 
subcommittee meetings are distributed to committee members and others 
who have requested them, thereby increasing the availability of 
information within the industry.
    Each of the recommended handling requirement changes for the 2003 
season is expected to generate financial benefits for produces and 
handlers through increased fruit sales, compared to the situation that 
would exist if the changes were not adopted. Both large and small 
entities are expected to benefit from the changes, and the costs of 
compliance are not expected to be substantially different between large 
and small entities.
    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.
    USDA 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 
throughout the nectarine and peach industry 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 and the last week of April or first 
week of May. Like all committee meetings, the December 3, 2002, and May 
1, 2003, meetings were public meetings, and all entities, large and 
small, were encouraged to express views on these issues. These 
regulations were also reviewed and thoroughly discussed at subcommittee 
meetings held on November 6, 2002, and April 8, 2003.
    An interim final rule concerning this action was published in the 
Federal Register on April 9, 2003 (68 FR 17257), and an amended interim 
final rule was published on August 13, 2003 (68 FR 48251). The interim 
final rule provided for a 60-day comment period, which ended on June 9, 
2003. One comment was received. That comment was addressed in the 
amended interim final rule. The amended interim final rule provided for 
a 30-day comment period, which ended September 12, 2003. One comment 
was received on the amended interim final rule. Copies of the interim 
final rule and amended interim final rule were provided to all 
committee members, and were available on the committees' Web site at 
www.caltreefruit.com. The U.S. Government Printing Office and USDA also 
made copies of both rules available on the Internet.
    The commenter to the amended interim final rule recommended changes 
to the names of several peach varieties to bring them into conformity 
with the recommendations of the PCC. These changes have been made. 
However, to assure consistency in the naming of varieties, USDA plans 
to work with the committees in developing procedures in naming 
varieties. USDA recognizes that there is a need for consistency in 
naming the various peach and nectarine varieties to prevent misleading 
variety markings and to accomplish program objectives. If necessary, 
further rulemaking would be undertaken on this matter.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at the 
following Web site: 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, the 
comment received, and other information, it is found that finalizing 
the interim final and amended interim final rules, with minor changes, 
as published in the Federal Register (68 FR 17257, April 9, 2003, and 
68 FR 48251, August 13, 2003, respectively), will tend to effectuate 
the declared policy of the Act.
    Pursuant to 5 U.S.C. 553, it is also found that good cause exists 
for not postponing the effective date of this rule until after 30 days 
after publication in the Federal Register because the 2004 shipping 
season is expected to begin in early April and these rulemaking actions 
for 2003 should be finalized promptly so the regulation modifications 
for 2004 can be implemented. These rules continue to relax grade 
requirements for nectarines and peaches. Appropriate subcommittees met 
and made recommendations to the committees, the committees met and 
unanimously recommended changes at public meetings, and interested 
persons had opportunities to provide input at all these meetings. 
Interested persons had an opportunity to file written comments, which 
were considered prior to the finalization of the interim rules.

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.

PART 916--NECTARINES GROWN IN CALIFORNIA

PART 917--PEACHES GROWN IN CALIFORNIA

0
Accordingly, the interim final rules amending 7 CFR parts 916 and 917 
which were published at 68 FR 17257 on

[[Page 15641]]

April 9, 2003, and at 68 FR 48251 on August 13, 2003, are adopted as 
final rules with the following changes to 7 CFR part 917:
0
1. The authority citation for 7 CFR parts 916 and 917 continues to read 
as follows:

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

0
2. Section 917.459 is amended by:
0
A. Amending paragraph (a)(1)(iv) by removing the entry ``September 
Flame'' and adding the entry ``Burpeachthree'' (September 
FlameTM) to Table 1.
0
B. Removing the words ``Spring Flame 21'' and adding in alphabetical 
order the words ``Burpeach (Spring FlameTM 21)'' in 
paragraph (a)(5).
0
C. Revising the introductory text of paragraph (a)(6).
    Revisions read as follows:


Sec.  917.459  California Peach Grade and Size Regulation.

* * * * *

                                 Table 1
------------------------------------------------------------------------
              Column A variety                 Column B maturity guide
------------------------------------------------------------------------
 
                                * * * * *
Burpeachthree (Spring Flame\TM\)...........  I
 
                                * * * * *
------------------------------------------------------------------------

* * * * *
    (a) * * *
    (6) Any package or container of August Lady, Autumn Flame, Autumn 
Red, Autumn Rose, Autumn Snow, Burpeachtwo (Henry IITM), 
Burpeachthree (September FlameTM), Burpeachfour (August 
FlameTM), Burpeachfive (July FlameTM), 
Burpeachsix (June FlameTM), Cassie, Coral Princess, Country 
Sweet, Diamond Princess, Earlirich, Early Elegant Lady, Elegant Lady, 
Fairtime, Fancy Lady, Fay Elberta, Flamecrest, Full Moon, Ivory 
Princess, Jillie White, Joanna Sweet, John Henry, June Pride, Kaweah, 
Kings Lady, Klondike, Late Ito Red, O'Henry, Pink Giant, Pretty Lady, 
Prima Gattie 8, Prima Peach 13, Prima Peach XV, Prima Peach 20, Prima 
Peach 23, Prima Peach XXV, Prima Peach XXVII, Princess Gayle, Queen 
Lady, Red Dancer, Red Giant, Rich Lady, Royal Lady, Ryan Sun, Saturn 
(Donut), Scarlet Snow, September Snow, September Sun, Sierra Gem, 
Sierra Lady, Snow Beauty, Snow Blaze, Snow Fall, Snow Gem, Snow Giant, 
Snow Jewel, Snow King, Snow Princess, Sprague Last Chance, Spring Gem, 
Sugar Giant, Sugar Lady, Summer Dragon, Summer Lady, Summer Sweet, 
Summer Zee, Supechfour (Amber Crest), Sweet Dream, Sweet Gem, Sweet 
Kay, Sweet September, Tra Zee, Vista, White Lady, Zee Lady, or 24-SB 
variety peaches unless:
* * * * *

    Dated: March 19, 2004.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 04-6701 Filed 3-24-04; 8:45 am]
BILLING CODE 3410-02-P