[Federal Register Volume 69, Number 142 (Monday, July 26, 2004)]
[Rules and Regulations]
[Pages 44457-44460]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-16940]



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 Rules and Regulations
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  Federal Register / Vol. 69, No. 142 / Monday, July 26, 2004 / Rules 
and Regulations  

[[Page 44457]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 916 and 917

[Docket No. FV04-916/917-02 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 (USDA) is adopting as a final 
rule, with a change, an interim final rule revising the handling 
requirements for California nectarines and peaches by reducing the 
minimum net weight for shipments of nectarines and peaches in bulk bins 
under the marketing orders. 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 will enable packers to continue shipping fresh 
nectarines and peaches meeting customers' needs in the interests of 
producers, packers, and consumers of these fruits.

DATES: Effective Date: August 25, 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 in 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 rule continues in effect the revisions of the handling 
requirements for California nectarines and peaches by reducing the 
minimum net weight for shipments of nectarines and peaches in bulk bins 
under the marketing orders.
    Under the orders, 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 
February 25, 2004, and unanimously recommended that the handling 
requirements be further revised for the 2004 season, which began in 
April. The committees unanimously recommended that the minimum net 
weight for loose-filled bulk bin containers be reduced from 400 pounds 
to 100 pounds, and that change continues in effect.
    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 February 25, 
2004.
    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' February 25, 2004, meetings because the nectarine and peach 
trees were dormant. The committees subsequently recommended a crop 
estimate at their meetings on April 28, 2004. The estimates indicate 
that the 2004 nectarine crop will be approximately 22,245,000 
containers, and the 2004 peach crop will be approximately 22,601,000 
containers. This crop is similar to the 2003 crop, which totaled 
21,896,300 containers of nectarines and 22,306,300 containers of 
peaches.

Container and Pack Requirements

    Sections 916.52 and 917.41 of the orders authorize establishment of 
container, pack, and container marking requirements for shipments of 
nectarines and peaches, respectively. Under Sec. Sec.  916.350 and 
917.442 of the orders' rules and regulations, container markings, net 
weights, well-filled requirements, weight-count standards

[[Page 44458]]

for various sizes of nectarines and peaches, and standard containers 
for nectarines and peaches, respectively, are specified. Included in 
the container and pack requirements are minimum net weight requirements 
for several containers, such as the bulk bin.
    Previously, the minimum net weight for bulk bin containers was 400 
pounds. At the request of a handler, the committees unanimously 
recommended that the minimum net weight be reduced to 100 pounds for 
bulk bin containers of loose-filled nectarines and peaches.
    The committees' recommendations resulted from a recommendation by 
the Tree Fruit Quality Subcommittee. At the subcommittee meeting on 
February 4, 2004, a handler requested that the current minimum net 
weight be reviewed and possibly modified. The handler noted that he had 
increased shipments of bulk peaches during the 2003 season, but found 
the minimum net weight of 400 pounds too restrictive because the weight 
of the fruit in the bin damages the contents, especially the peaches at 
the bottom of the bin. The handler suggested that a minimum weight of 
200 pounds might serve the industry better by ensuring the safe arrival 
of the fruit.
    The subcommittee discussed shipments of nectarines and peaches in 
bulk bins, and reviewed the historical significance of the minimum net 
weight of 400 pounds. The subcommittee determined that the net weight 
was set in 1976 when there were few, if any, bulk bin shipments.
    The subcommittee also deliberated the relative value of different 
minimum weights; e.g. 125 pounds, 200 pounds, or 100 pounds. They 
determined that since the weight constituted a minimum net weight 
rather than maximum net weight, it was prudent to use a weight that was 
lighter than the previously established minimum net weight, but still 
heavy enough to constitute a bulk shipment. Because it would be 
difficult for a handler to pack a 100-pound box for anything other than 
a bulk bin shipment, the 100 minimum net weight was determined to be 
the optimum net weight and was unanimously recommended. The 
subcommittee further unanimously recommended that the 100-pound minimum 
net weight be in place for the 2004 season only, with a review of the 
success of the modification at the end of the season.
    The committees discussed the Tree Fruit Quality subcommittee's 
recommendation at the February 25, 2004, meetings and reviewed the 
current industry practices regarding shipping in bulk bin containers. 
While use of bulk bins appears to be in its infancy, the committees 
appreciate that such shipments could constitute a new trend, and that 
relaxing the current minimum net weight for those containers provides 
yet another marketing opportunity for handlers. Moreover, the reduced 
minimum net weight will provide another container option for handlers 
and safeguard the fruit in the container from damage. However, the 
committees disagreed with the subcommittee's recommendation that the 
change should be in place for the 2004 season only, and did not believe 
it necessary to review the use of these containers at the end of the 
2004 season.
    For the reasons stated above, the committees recommended that the 
minimum net weight for loose-filled bulk bin containers of nectarines 
and peaches be decreased from 400 pounds to 100 pounds. That change 
continues in effect.
    Nectarines: For the reasons stated above, the revision of paragraph 
(a)(9) of Sec.  916.350 continues in effect to modify the minimum net 
weight of bulk bin containers of loose-filled nectarines from 400 
pounds to 100 pounds. The required 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 of paragraph 
(a)(10) of Sec.  917.442 continues in effect to modify the minimum net 
weight of bulk bin containers of loose-filled peaches from 400 pounds 
to 100 pounds. The required container markings shall be placed on one 
outside end of the container in plain sight and in plain letters.

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.

Industry Information

    There are approximately 250 California nectarine and peach packers 
subject to regulation under the orders regulating nectarines and 
peaches grown in California, and about 1,800 producers of these fruits 
in California. The Small Business Administration [13 CFR 121.201] 
defines small agricultural service firms as those whose annual receipts 
are less than $5,000,000. The Small Business Administration also 
defines small agricultural producers as those having annual receipts of 
less than $750,000. A majority of these packers 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 2003 season, the average handler price received was 
$7.00 per container or container equivalent of nectarines or peaches. A 
handler would have to ship at least 714,286 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 
2003 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. In the 2003 season, 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 2003 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 
44,202,600 containers, the value of the 2003 packout value (total 
estimated grower revenue) is estimated to be $176,810,400. Dividing 
this total estimated grower revenue figure by the estimated number of 
producers (1,800) yields an estimated average revenue per producer of 
approximately $98,228 from the sales of nectarines and peaches.

[[Page 44459]]

Discussion of the Change in Minimum Net Weight

    Under Sec. Sec.  916.52 and 917.41 of the orders, pack and 
container 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 February 25, 
2004, and unanimously recommended that the minimum net weight for 
loose-filled bulk bin containers be reduced from 400 to 100 pounds. 
This recommendation was presented to the committees by the Tree Fruit 
Quality Subcommittee after a thorough discussion at their February 4, 
2004, meeting. A handler requested that the subcommittee review the 
current minimum net weight of bulk bin containers used for loose-filled 
shipments of nectarines and peaches.
    The subcommittee discussed the historical significance of the 
current minimum net weight of 400 pounds and deliberated the relative 
value of recommending various lighter net weights, as well. They 
determined that the optimum net weight for bulk bin containers was 100 
pounds. Until recently, they noted, there were few, if any, shipments 
of nectarines and peaches in bulk bins. However, changes in the 
industry, improvements in containers, shipments of increasingly more 
mature fruit, and the demands of their retail customers have apparently 
improved the prospects for such shipments.
    In considering possible alternatives to this action, the 
subcommittee discussed varying minimum net weights, and the types and 
sizes of bulk bin containers currently available to the industry. While 
other alternatives were not rejected out of hand, the subcommittee 
reasoned that decreasing the current 400-pound minimum net weight to 
100 pounds was a prudent option since the weight of the container 
constituted a minimum net weight, rather than a maximum net weight. 
Such a weight afforded increased protection of the fruit in the bin 
while providing increased flexibility for handlers who might want to 
experiment with varying weights, as their customers demanded. If a 
handler had customer requests for 125 pounds, that option would be 
available under the recommendations. If another handler had a request 
for 250 pounds, that option would also be available.
    The committees agreed with the Tree Fruit Quality Subcommittee's 
recommendation, except for establishing a trial period during the 2004 
season. The committees voted unanimously to establish the revised 
minimum net weight of 100 pounds for bulk bin containers without the 
requirement for a trial during the 2004 season or an industry review at 
the end of the season.
    The committees make recommendations regarding all the revisions in 
handling requirements after considering all available information, 
including recommendations by various subcommittees, comments of persons 
at subcommittee and committee meetings, and comments received by 
committee staff. Such subcommittees include the Tree Fruit Quality and 
Research Subcommittees, 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 
packers 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 Tree Fruit Quality Subcommittee, many 
growers and handlers who are affected by the issues discussed by the 
subcommittee attend and actively participate in the public 
deliberations. In fact, if a specific producer or handler is known to 
have an interest in one or more topics to be discussed, committee staff 
specifically invites him or her to the meetings to participate in the 
debate and provide information not already available to staff and the 
subcommittee, including information which may refute the staff's 
findings. This recommendation, in fact, resulted from a request made by 
a handler who was specifically invited by staff to take his concerns to 
the Tree Fruit Quality Subcommittee.
    In addition, minutes of all subcommittee and committee meetings are 
distributed to committee members and others who have requested them, 
thereby increasing the availability of information within the industry. 
The staff has surveyed committee members and others in the industry to 
determine each person's preference in receiving committee 
communications. Each person was given the opportunity to specify how he 
or she would like meeting agendas and other committee communications to 
be delivered: facsimile, electronic mail, and/or mailed hard copy. The 
staff is also preparing to make meeting minutes available on the 
committees' Web site, as well, where meeting agendas are currently 
available.
    This rule does not impose any additional reporting and 
recordkeeping requirements on either small or large packers. As with 
all Federal marketing order programs, reports and forms are 
periodically reviewed to reduce information requirements and 
duplication by industry and public sector agencies. In addition, USDA 
has not identified any relevant Federal rules that duplicate, overlap, 
or conflict with this rule.
    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 fall, late 
winter, and early spring. Like all committee meetings, the February 25, 
2004, 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 a subcommittee meeting 
held on February 4, 2004.
    An interim final rule concerning this action was published in the 
Federal Register on April 14, 2004. Copies of the rule were provided to 
interested parties through the committees' Web site and through the 
Internet by USDA and the Office of the Federal Register. That rule 
provided for a 60-day comment period which ended June 14, 2004. One 
comment was received.
    The commenter stated that the revisions to the handling 
requirements for nectarines and peaches grown in California as 
presented in the interim final rule will allow handlers to better serve 
their buyers.
    He also asked that an exception for blush or red color for U.S. No. 
1 nectarines currently permitted under the marketing order handling 
regulations be removed. According to the comment, recent revisions to 
Sec.  51.3147 of the U.S. Standards for Grades of Nectarines (69 FR 
9189, February 27, 2004) have eliminated the color requirement for U.S. 
No. 1 nectarines, making the exception in the nectarine marketing order 
regulations obsolete. For that reason, the exception in paragraph 
(a)(1) of Sec.  916.356 will be removed.
    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, and other 
information, it is found that finalizing the interim final

[[Page 44460]]

rule, with a change, as published in the Federal Register (69 FR 19753, 
April 14, 2004) will tend to effectuate the declared policy of the Act.

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--FRESH PEARS AND PEACHES GROWN IN CALIFORNIA

0
Accordingly, the interim final rule amending 7 CFR parts 916 and 917, 
which was published at 69 FR 19753 on April 14, 2004, is adopted as a 
final rule with the following change to 7 CFR part 916:
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. In Sec.  916.356, paragraph (a)(1), the introductory text is revised 
to read as follows:


Sec.  916.356  California Nectarine Grade and Size Regulation.

    (a) * * *
    (1) Any lot or package or container of any variety of nectarines 
unless such nectarines meet the requirements of U.S. No. 1 grade: 
Provided, That nectarines 2 inches in diameter or smaller, shall not 
have fairly light-colored, fairly smooth scars which exceed an 
aggregate area of a circle \3/8\ inch in diameter, and nectarines 
larger than 2 inches in diameter shall not have fairly light-colored, 
fairly smooth scars which exceed an aggregate area of a circle \1/2\ 
inch in diameter: Provided further, That an additional tolerance of 25 
percent shall be permitted for fruit that is not well formed but not 
badly misshapen: Provided further, That during the period April 1 
through October 31, 2004, any handler may handle nectarines if such 
nectarines meet ``CA Utility'' quality requirements. The term ``CA 
Utility'' means that not more than 40 percent of the nectarines in any 
container meet or exceed the requirements of the U.S. No. 1 grade, 
except that when more than 30 percent of the nectarines in any 
container meet or exceed the requirements of the U.S. No. 1 grade, the 
additional 10 percent shall have non-scoreable blemishes as determined 
when applying the U.S. Standards for Grades of Nectarines; and that 
such nectarines are mature and are:
* * * * *

    Dated: July 21, 2004.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 04-16940 Filed 7-23-04; 8:45 am]
BILLING CODE 3410-02-P