[Federal Register Volume 70, Number 100 (Wednesday, May 25, 2005)]
[Proposed Rules]
[Pages 30001-30009]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-10440]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
 ========================================================================
 

  Federal Register / Vol. 70, No. 100 / Wednesday, May 25, 2005 / 
Proposed Rules  

[[Page 30001]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 925 and 944

[Docket No. FV03-925-1 PR]


Grapes Grown in a Designated Area of Southeastern California and 
Imported Table Grapes; Proposed Change in Regulatory Periods

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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

SUMMARY: This proposed rule would revise the regulatory periods when 
minimum grade, size, quality, and maturity requirements apply to 
southeastern California grapes under Marketing Order No. 925 (order), 
and to imported grapes under the table grape import regulation. The 
current regulatory periods for both domestic and imported grapes are 
April 20 through August 15 of each year. The California Desert Grape 
Administrative Committee (Committee), which locally administers the 
order, unanimously recommended changing the date when these 
requirements expire for grapes grown in California to July 10 because 
few grapes are normally shipped after that date. A corresponding change 
for imported table grapes is required under section 8e of the 
Agricultural Marketing Agreement Act of 1937. The Desert Grape Growers 
League of California (the ``League'') requested that the beginning date 
of the regulatory period for imported table grapes be changed from 
April 20 to April 1. The League requested this change to prevent the 
marketing of grape imports that do not meet the California grape 
order's grade, size, quality, and maturity requirements. The Act 
provides authority for such change. If implemented, the regulatory 
period for domestic grapes would be April 1-July 10 so both sets of 
requirements apply during the same time period. This proposed rule also 
would clarify the maturity (soluble solids) requirements for 
southeastern California and imported Flame Seedless variety grapes.

DATES: Comments must be received by July 25, 2005.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposal. Comments should be sent to the Docket Clerk, 
Marketing Order Administration Branch, Fruit and Vegetable Programs, 
AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 
20250-0237; Fax: (202) 720-8938, E-mail: [email protected], or 
Internet: http://www.regulations.gov. All comments should reference the 
docket number and the date and page number of this issue of the Federal 
Register and will be available for public inspection in the office of 
the Docket Clerk during regular business hours, or can be viewed at: 
http://www.ams.usda.gov/fv/moab.html.

FOR FURTHER INFORMATION CONTACT: Rose Aguayo or Kurt Kimmel, 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, 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 proposed rule is issued under Marketing 
Agreement and Marketing Order No. 925, (7 CFR part 925), regulating the 
handling of grapes grown in a designated area of southeastern 
California, hereinafter referred to as the ``order.'' The order is 
effective under the Agricultural Marketing Agreement Act of 1937, as 
amended (7 U.S.C. 601-674), hereinafter referred to as the ``Act.''
    This proposed rule is also issued under section 8e of the Act, 
which provides that whenever certain specified commodities, including 
table grapes, are regulated under a Federal marketing order, imports of 
these commodities into the United States are prohibited unless they 
meet the same or comparable grade, size, quality, or maturity 
requirements as those in effect for the domestically produced 
commodities. The table grape import regulation is specified in Sec.  
944.503 (7 CFR part 944.503).
    The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Order 12866.
    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This action is not intended to have retroactive 
effect. This proposed rule will not preempt any State or local laws, 
regulations, or policies, unless they present an irreconcilable 
conflict with this rule.
    Section 608c(15)(A) of the Act provides that administrative 
proceedings must be exhausted before parties may file suit in court. 
Under this section, 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. Section 
608c(15)(B) 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.
    There are no administrative procedures that must be exhausted prior 
to any judicial challenge to the provisions of import regulations 
issued under section 8e of the Act.

Introduction

    Section 925.52(a)(2) of the order provides authority to limit the 
handling of any grade, size, quality, maturity, or pack of grapes 
differently for different varieties, or any combination of the 
foregoing during any period or periods. Under the terms of the order, 
fresh market shipments of grapes grown in a designated area of 
southeastern

[[Page 30002]]

California are required to be inspected and are subject to grade, size, 
quality, maturity, pack, and container requirements during the period 
April 20 through August 15 of each year.
    Current requirements under the marketing order require such 
shipments to be at least U.S. No. 1 Table, as set forth in the United 
States Standards for Grades of Table Grapes (European or Vinifera type) 
(7 CFR 51.880 through 51.914; (Standards), or meet the requirements of 
the U.S. No. 1 Institutional grade, except for the tolerance percentage 
for bunch size. The tolerance is 33 percent instead of 4 percent as is 
required to meet the U.S. No. 1 Institutional grade.
    Grapes meeting the institutional quality requirements may be marked 
``DGAC No. 1 Institutional'' but shall not be marked ``Institutional 
Pack.'' Grapes of the Flame Seedless and Perlette varieties are 
required to meet the ``other varieties'' standard for berry size (ten-
sixteenths of an inch).
    In addition, fresh shipments of grapes from the marketing order 
area are required to meet the minimum maturity requirements for table 
grapes as specified in the California Code of Regulations (3 CCR 
1436.12). Grapes of the Flame Seedless variety shall be considered 
mature if the juice meets or exceeds 16.5 percent soluble solids, or 
contains not less than 15 percent soluble solids and the soluble solids 
are equal to or in excess of 20 parts to every part acid contained in 
the juice in accordance with applicable sampling and testing procedures 
specified in the California Code of Regulations.
    Currently, the foregoing requirements also apply to imported table 
grapes under section 8e of the Act during the period April 20 through 
August 15 (except for the 16.5 percent soluble solids option). However, 
as described below, importers of grapes currently manage to avoid these 
requirements.
    For example, imported grapes can be (and are in fact) shipped in 
large quantities before the requirements come into effect and then are 
stored, allowing them to be marketed during the regulatory period of 
the order without having to meet the same requirements as domestic 
grapes. The changes in this proposed rule would ensure more equitable 
and stable conditions for all market participants, consistent with the 
statutory mandate.
    A USDA/ERS report discussed the purposes and benefits of quality/
condition standards (USDA, Economic Research Service, Agricultural 
Economic Report Number 707, ``Federal Marketing Orders and Federal 
Research and Promotion Programs, Background for 1995 Farm 
Legislation'', by Steven A. Neff and Gerald E. Plato, May 1995). The 
basic rationale for such standards is that only satisfied customers are 
repeat customers. Thus, quality standards help ensure that consumers 
are presented a product that is of a consistent quality. This helps 
create buyer confidence and contributes to stable market conditions. 
When consumers purchase satisfactory quality grapes, they are likely to 
purchase grapes again. If they purchase poor quality grapes, they are 
likely to delay future purchases, which could reduce demand for all 
grapes.

Changing the Date When Domestic and Imported Table Grape Regulations 
Expire

    Section 925.304 of the order provides a regulatory period of April 
20 through August 15 when minimum grade, size, quality, and maturity 
requirements apply to grapes grown in southeastern California. A final 
rule published on March 20, 1987, (52 FR 8865) established these 
regulatory periods to promote the orderly marketing of grapes.
    The Committee met on November 14, 2002, and unanimously recommended 
modifying Sec.  925.304 of the order to change the date when minimum 
grade, size, quality, and maturity requirements expire to July 10, 
rather than August 15. The Committee met again on December 12, 2002, 
and clarified that the proposed regulatory period (April 20-July 10) 
should also apply to pack and container requirements under the order.
    Since 1987, the amount of grapes handled in the production area 
after July 10 has generally decreased as older vineyards, which 
typically produce late [season] varieties, have been removed. From 
2000-2004, more than 99 percent of the 8.0 million 18-pound lugs of 
grapes grown in the production area were handled during the period 
April 20-July 10. On average, less than half of one percent (21,688 18-
pound lugs) of these grapes were harvested and marketed during the 
period July 11-August 15.
    Southeastern California grapes handled after July 10 tend to bring 
much lower prices than early season grapes. For example, in 2003, Flame 
Seedless grapes during the first two weeks of May had an average FOB 
price of $13.85 to $23.85 while end-of-season (August) Flame Seedless 
grapes brought an average FOB price of $11.85 to $12.85 per 18-pound 
lug.
    Additionally, inspection costs outweigh the benefits of the order 
for grapes handled after July 10, with inspection fees proportionally 
higher for the volume of grapes inspected. For inspections of 
production area grapes, the Federal/State Inspection Service 
(Inspection Service) charges range from $0.026 to $0.043 depending on 
the weight of the container, or $25 per certificate, whichever is 
greater. Inspector travel and overtime fees also are charged, as 
applicable. This information can be viewed at http://www.cdfa.ca.gov/is/spi/schedule.htm and http://www.cdfa.ca.gov/is/spi/feeinfo.htm. At 
the end of the season, grape handlers from the production area ship a 
smaller volume and inspection fees are proportionally higher per lug.
    The Committee believes that ending regulatory requirements in July 
would benefit handlers and producers by reducing inspection costs. 
Therefore, at its November 14, 2002, meeting, the Committee unanimously 
recommended modifying Sec.  925.304 of the order to change the date 
when minimum grade, size, quality, and maturity requirements expire to 
July 10.
    Under section 8e of the Act, minimum grade, size, quality, and 
maturity requirements for table grapes imported into the United States 
are established under Table Grape Import Regulation 4 (7 CFR 944.503) 
(import regulation).
    Section 944.503(a)(3) of the import regulation specifies that the 
regulatory period for imported grapes for the fresh market is April 20 
through August 15 of each year. Since this proposal would change the 
regulatory period when grade, size, quality, and maturity requirements 
expire for grapes grown in the production area under the marketing 
order to July 10, a corresponding change to the regulatory period for 
imported table grapes is required under section 8e of the Act.
    Reports from the U.S. Census Bureau indicate that during April 
through October of 2000, 2001, 2002, and 2003, an average of 12.6 
million 18-pound lugs of Mexican grapes were imported and marketed. 
Average imports from Chile at these times totaled 8.7 million 18-pound 
lugs. On average, Mexico and Chile accounted for 98 percent of the 
imports. The remaining 2 percent came from various countries.
    It is expected that an earlier end to the regulatory period for 
domestic and imported grapes would benefit handlers, producers, and 
importers, because this would reduce the regulatory burden on these 
entities.

Changing the Beginning of the Regulatory Period for Domestic and 
Imported Table Grapes

    In January 2003, the League requested USDA to change the beginning 
date of the regulatory period for imported table grapes from April 20 
to April 1, and

[[Page 30003]]

provided information supporting that request. The League contends that 
during the prior year, imports of grapes that did not meet marketing 
order requirements were on the market and were able to avoid the 
California grape order's grade, size, maturity, and quality 
requirements. The League further contends that there would be no 
adverse effect on the availability and prices of grapes if the 
regulatory period for imports were changed to April 1.
    Section 608e-1(b)(1) of the Act allows the Secretary of Agriculture 
to extend order requirements for a period, not to exceed 35 days, 
during which the order requirements would be effective for an imported 
commodity during any year, if the Secretary determines that the 
additional period of time is necessary to effectuate the purposes of 
the Act and to prevent the circumvention by imports of the grade, size, 
quality, or maturity requirements of the marketing order applicable to 
domestic production. Further, section 608e-1(b)(2) of the Act provides 
that in making such a determination, the Secretary, through notice and 
comment procedures, shall consider:
    (A) To what extent, during the previous year, imports of a 
commodity that did not meet the requirements of a marketing order 
applicable to such commodity were marketed in the United States during 
the period that such marketing order requirements were in effect for 
available domestic commodities (or would have been marketed during such 
time if not for any additional period established by the Secretary);
    (B) If the importation into the United States of such commodity 
did, or was likely to, circumvent the grade, size, quality, or maturity 
standards of a seasonal marketing order applicable to such commodity 
produced in the United States; and
    (C) The availability and price of commodities of the variety 
covered by the marketing order during any additional period the 
marketing order requirements are to be in effect.
    Imported grapes are either sold immediately or stored for later 
sale. Importers may voluntarily request inspection of grapes suspected 
of not meeting U.S. No. 1 Table Grade or other contractual requirements 
desired by the importer prior to April 20. Data provided by the League 
shows that a high percentage of grapes subjected to these voluntary 
inspections failed to meet the requested quality checks.
    The data reflects a pattern of uneven quality--both high and low--
of imported grapes prior to April 20. The data also shows sales of 
imported grapes that would have failed section 8e requirements in the 
market during the regulated period, and that lower quality/condition 
grapes are purchased for lower prices than those obtained for higher 
quality fruit. Quality includes size, color, shape, texture, freedom 
from defects, and other more permanent physical properties of a product 
that can affect its market value. Condition includes the stage of 
maturity, decay, freezing injury, shriveling, or any other 
deterioration that may have occurred, or progressed, since the product 
was harvested and that may continue to progress.
    Since exporting countries can and, in fact, do export many high 
quality grapes to the United States prior to April 20, and have the 
capability to export grapes meeting minimum import requirements, we 
would not expect a shortage of grapes in the market with an earlier 
effective date for section 8e import requirements. An earlier date 
would only ensure that grapes being imported met minimum requirements. 
As a result, we would expect prices to firm up since there would not be 
a heavy volume of low quality/poor condition grapes in the market. 
Further, buyers would be assured of good quality grapes with excellent 
value. This is expected to result in repeat purchases of high quality 
imported and domestic grapes, which would benefit both segments of the 
industry.
    USDA will review and analyze all comments received as a result of 
publication of this proposed rule. Given the provisions of section 
608(e)-1(b)(2) of the Act, and information provided by petitioners, 
USDA is specifically interested in any comments, information or data 
which addresses the following: (a) During prior years, whether imports 
of grapes that did not meet section 8e requirements were sold to 
retailers in the United States during the period that such requirements 
were in effect; (b) whether imported grapes did or were likely to 
circumvent such section 8e requirements; and (c) whether there would be 
any adverse effects on the availability and prices of grapes if the 
beginning of the regulatory period for imports were changed to April 1.
    The U.S. Census Bureau indicates that on average for 2000, 2001, 
2002, and 2003 (January through December), 60.0 million 18-pound lugs 
of grapes were imported into the United States. The two main countries 
exporting to the United States were Chile, with average exports of 45.7 
million 18-pound lugs (76 percent of the total), and Mexico, with 12.6 
million 18-pound lugs (21 percent of the total). The remaining three 
percent came from various countries.
    Trade data from the U.S. Census Bureau shows that Chile accounts 
for almost all U.S. imports of fresh grapes in the February through 
April period in recent years. The total average grape imports for that 
period in the years 2000-2004 averaged 33.6 million 18-pound lugs. Of 
this amount, 32.8 million came from Chile (97.6 percent). South Africa 
accounted for 0.5 million lugs (1.6 percent), and the remaining 0.8 
percent came from various countries.
    Information from the League for 2000, 2001, 2002, 2003, and 2004 
shows that the Port of Philadelphia (where historically the greatest 
percentage of Chilean table grapes enters the United States) received 
on-average 20 million 18-pound lugs of imported Chilean grapes during 
the February 1-April 19 period, with 30 percent (6 million) of these 20 
million 18-pound lugs arriving between April 1 and April 19.
    The League compiled weekly inspection summaries of inspection data 
from USDA's Fresh Products Branch, Fruit and Vegetable Programs. These 
inspection summaries consisted of voluntary condition and quality 
inspections of imported grapes at the Port of Philadelphia for the 
period February-April in 2000, 2001, 2002, 2003 and 2004. Based on AMS 
experience, importers request voluntary quality and condition 
inspections on grapes that appear to be of lower quality or condition 
than buyer specifications prior to April 20 to determine the grade of 
the fruit as specified in the Standards.
    The Table Grape import regulation specifies that imported grapes 
must meet the minimum grade and size requirements for U.S. No. 1 Table 
or for U.S. No. 1 Institutional grade as specified in the Standards, 
with the exception of the extra tolerance for bunch size for U.S. No. 1 
Institutional.
    The USDA Fresh Products Branch data on voluntary inspections of 
Chilean grapes indicates a relatively high failure rate, tending toward 
the upper part of the range as the April 20 effective date nears.
    According to the data provided by the League, approximately 2 
million 18-pound lugs of imported Chilean grapes arriving at the 
Philadelphia Port during the April 1 through April 19 period were 
inspected voluntarily for quality and condition with failure rates 
ranging from a low of 75 percent to a high of 90 percent in 2000; from 
65 percent to 78 percent in 2001; from 65 percent to 70 percent in 
2002; from 53 percent to 78 percent in 2003; and from 42 percent to 57 
percent in 2004. For the two to three days immediately prior to April 
20 in

[[Page 30004]]

2000, 2001, 2002, 2003, and 2004, the failure rates averaged 90 percent 
in 2000, 78 percent in 2001, 67 percent in 2002, 73 percent in 2003, 
and 46 percent in 2004.
    Prior to April 20, grapes voluntarily inspected may be placed into 
the channels of commerce in the United States. By contrast, imported 
grapes that fail import quality requirements during the period April 
20-August 15 may be reworked and marketed in the United States if the 
grapes meet the import requirements when re-inspected; otherwise the 
grapes must be exported, destroyed, or utilized in processed products.
    When consumer demand exceeds supply, the imported grapes move 
directly into retail markets; however, when supply exceeds demand, the 
imported grapes are put in cold storage until there is a demand for the 
grapes. The length of storage may negatively affect the quality of the 
grapes.
    Studies of table grape importer storage behavior performed by 
SURRES, a division of the Applied Technology Corporation, and the 
College of Business and Management, University of Maryland, indicate 
that importers use their storage capability extensively during the 
March-April time frames and that storage periods in the 30-60 day range 
are not uncommon at this time of year. Thus, this would allow grapes 
imported prior to April 20, which would not have met import quality 
requirements currently in place after April 20, to be sold after April 
20, in competition with grapes that have passed inspection and met or 
exceeded the marketing order and import requirements.
    The League's weekly inspection summary indicates that an 
insignificant amount of grapes are imported after April 20 and the 
amount imported during the regulated period would not account for the 
substantial percentage of imported grapes that are being bought and 
sold consistently in May. USDA Market News Service market reports 
classify commodities as fine/excellent, good, fair, ordinary, or poor 
condition/quality. Many of the USDA Market News Service Reports show 
that fair, ordinary, and poor condition imported table grapes were on 
the market during May 2000, 2001, 2002, 2003, and 2004; and June 2000, 
2001 and 2004. Generally, the ordinary and poor condition imported 
grapes would not be permitted to enter the United States during the 
regulation period because they would fail the minimum import 
requirements. Fair condition grapes might also fail to meet minimum 
import requirements.
    USDA Market News Wholesale reports indicate that fair, ordinary, 
and poor condition imported grapes are on the market during the period 
that the southeastern California marketing order requirements are in 
effect and that these imported grapes compete against grapes that 
comply with the standards implemented under the marketing order. USDA 
Market News Philadelphia Wholesale Fruit and Vegetable Reports, dated 
May 15, 16, and 17, 2002, show that imported poor condition Chilean Red 
Seedless grapes were selling in the market for $.50 a lug. Chilean Red 
Seedless grapes were in various markets on May 17, 2002: Fair/good 
condition grapes were in the St. Louis market at $8 a lug; ordinary/
fair condition grapes were in the Boston and Chicago markets at $5 to 
$8 a lug; ordinary condition grapes were in the New York market at $5 a 
lug and in the Baltimore market at $3 to $6 a lug; and poor condition 
grapes were in the Detroit market at $3 to $4 a lug. Excellent and good 
quality grapes from the production area were sold in various markets 
during that time at prices ranging from $22 to $37 per 18-pound lug of 
grapes. Additionally, USDA Market News Philadelphia Reports dated May 
7, 8 and 9, 2003, show that poor/ordinary condition grapes were on the 
market at $1 to $6 a lug. Good quality grapes from the production area 
were sold in various markets during that time at prices ranging from 
$24 to $29 per 18-pound lug of grapes. USDA Market News Philadelphia 
Wholesale Fruit and Vegetable Reports, dated May 13 and 14, 2004, show 
that imported ordinary condition Chilean Crimson Seedless grapes were 
selling in the market for $5-$10 a lug, and reports dated May 17, 2004, 
show that imported ordinary condition Thompson Seedless grapes were 
selling in the market for $5 a lug. Good quality grapes from the 
production area were sold in various markets during that time at prices 
ranging from $30 to $40 a lug. The domestic industry contends that it 
might have received higher prices due to consumer demand if the lower 
condition imported grapes were not competing with them during that 
time.
    The California Table Grape Commission (CTGC) Market Activity Report 
of May 10, 2002, indicates that 12 percent of the stores in the Central 
Market (Terre Haute, Ft. Wayne, and Indianapolis, IN) were carrying 
poor condition Chilean Red Seedless grapes at $1.79 a pound; and that 
18 percent of the stores in the West Market (Phoenix, Arizona) were 
carrying poor/fair condition Chilean Black Seedless grapes at $1.99 a 
pound, as well as fair condition Chilean Red Seedless Grapes at $.79-
$1.49 a pound.
    Additionally, the CTGC Grape Market Activity Report of May 10, 
2002, shows that 36 percent of the West Market (Phoenix, Arizona) 
stores carried fair/good condition Chilean Thompson Seedless grapes, 
while the May 17, 2002, report shows that 35 percent of the stores in 
Central Markets were carrying poor/fair Chilean Thompson seedless 
grapes priced at $1.99-$2.49 a pound and that 67 percent of the stores 
in the Northeast Market (New York, New Jersey, Pennsylvania) were 
carrying poor/fair Chilean Thompson seedless grapes priced at $2.49-
$3.99 a pound. Additionally, the May 18, 2001, report shows that 11 
percent of the Central stores were carrying very poor condition Chilean 
Thompson Seedless grapes at $2.49 a pound. The CTGC Market Activity 
Report of May 16, 2003, indicates that 25 percent of the stores in 
Indianapolis, IN and San Antonio, TX were carrying fair condition 
Chilean Thompson Seedless grapes at $2.59 a pound. The June 6, 2003, 
report indicates that 40 percent of the stores in the Northeast Market 
were carrying fair condition Chilean Crimson Seedless grapes at $1.99 a 
pound.
    Weekly arrival summaries were provided by the League from Sermaco, 
a private company that provides import information on Chilean table 
grapes from ships' manifests. The weekly arrival summaries show that 
1.6 million 18-pound lugs of imported Chilean Thompson Seedless grapes 
arrived at all ports during the weeks of April 1-April 19, 2004. These 
arrival summaries also showed that 3,846 18-pound lugs of Chilean 
Thompson Seedless grapes arrived after the regulatory period began on 
April 20, 2004. USDA Market News Terminal Reports indicate that 
imported Chilean poor, ordinary, and fair condition Thompson Seedless 
grapes [that probably would not meet the standards provided in the 
marketing order] were on various markets during the regulated period, 
whereas the grapes imported during the regulatory period were subject 
to import requirements. From the above referenced information, USDA 
believes that imported Chilean grapes that were in fair, ordinary, and 
poor condition and that were imported prior to April 20, were stored 
and then marketed during May 2000, 2001, 2002, 2003, and 2004; and 
during June 2000, 2001, and 2004, in competition with inspected and 
marketing order compliant California grapes. In addition, fair, 
ordinary, and poor condition imported grapes were on the market during 
May 2000, 2001, 2002, 2003, and

[[Page 30005]]

2004 and during June 2000, 2001, 2003, and 2004.
    The League believes that an earlier beginning (April 1) to the 
regulatory period would allow most questionable quality/condition and 
failing grapes to clear the market before the southeastern California 
grape industry begins shipments. The League believes that this would 
help strengthen the market and firm up prices for both domestic and 
imported grapes.
    The League believes that the marketing of grapes of lower quality/
condition (because they did not have to meet the marketing order 
standards) in competition with grapes that do have to meet those 
standards and are of a higher quality/condition tends to lower market 
demand and depress prices for all grapes in the market.
    The proposed change in the beginning date of the regulatory period 
for grapes would help alleviate price depressing conditions by 
prohibiting the sale of low-quality and low-condition grapes and help 
set a positive market tone.
    USDA Market News Wholesale Fruit and Vegetable Reports and CTGC's 
Grape Market Activity Reports indicate that low condition and failing 
grapes are sold at reduced prices. In addition, USDA Market News 
Service Terminal Market Wholesale Fruit and Vegetable Reports show the 
condition and price of Chilean, Brazilian, South African, Mexican, and 
southeastern California grapes and indicate that better condition 
grapes tend to receive higher prices per box.
    For example, the Philadelphia Wholesale Fruit and Vegetable Report 
for May 10, 2004, indicates that small size, good-to-excellent 
condition, white seedless grapes from southeastern California sold for 
$46 per 18-pound lug (bagged), and that Chilean large poor condition 
white seedless grapes sold for $5 to $10 per 18-pound lug. Poor 
condition, lower-priced, imported grapes are present in the marketplace 
at the same times as better condition grapes that meet the minimum 
quality requirements under the marketing order and import regulations. 
Without the presence of poorer condition grapes in the market, the 
overall quality/condition level of domestic and imported grapes should 
advance. Higher overall condition/quality should result in increased 
demand and repeat purchases. This would benefit the marketers of both 
domestic and imported grapes.
    The April 1 date is being proposed because this date would enable 
most grapes imported prior to April 1 to clear the market prior to the 
commencement of the southeastern California harvest and marketing 
season.
    In addition, the information from USDA's Market News Service 
indicates that better condition grapes yield higher prices, which could 
offset the added inspection costs of 2.5 cents per box for imported 
grapes. In 2000, 2001, and 2002, less than half of one percent of 
imported grapes required mandatory inspection. However, if inspection 
in these years had been mandatory as of April 1, about 15 percent would 
have had to be inspected. Thus, consumers would have been assured of 
receiving fewer low quality grapes.
    This proposed rule is expected to prevent circumvention of the 
intent of the Act by grape imports and to provide consumers with higher 
quality/condition grapes on a more consistent basis. Experience has 
shown that an improvement in product quality and condition results in 
increased acceptance in the marketplace, and more frequent purchases. 
If this were achieved, domestic producers and handlers of southeastern 
California grapes, and exporters and importers of foreign-produced 
grapes would benefit from more stable marketing conditions and prices. 
Buyers, too, would be rewarded with more satisfactory quality/condition 
grapes, which could result in more grape purchases. This would benefit 
the producers and marketers of both domestic and imported grapes.
    Inspection fees would be applicable to grapes imported during the 
period April 1 through April 19. These fees vary, depending on such 
factors as the location of the inspection, the size of the load to be 
inspected, and whether there are multiple commodities to be inspected. 
Current inspection fees for imported grapes are 2.5 cents per package 
when inspected at dockside. When the inspection is performed at a 
location other than dockside, the fees range from $76 to $99 per car 
lot depending the number of packages in the load and the type of 
inspection requested. A carlot usually contains 45,000 pounds of 
grapes. Information on inspection fees can be viewed at  http://www.ams.usda.gov/fv/fpboverview.htm.
    During October 2003-April 2004, FOB prices for imported grapes 
ranged from $6 to $44 per package, depending on the month, condition, 
and size of the grapes. In April 2004, prices per package ranged from 
$8 to $26 per package. Therefore, inspection fees would be less than 1 
percent of the value of the grapes imported during this period of time.
    USDA also is proposing to change the beginning of the domestic 
regulatory period from April 20 to April 1 to keep the beginning of 
both regulatory periods the same and to ensure that the same 
requirements apply to both domestic and imported grapes during the 
April 1-19 period.

Clarification of Maturity Requirements

    This proposed rule also revises Sec.  944.503(a)(1)(ii) to clarify 
that imported Flame Seedless variety grapes shall be considered mature 
if the juice meets or exceeds 16.5 percent soluble solids, or contains 
not less than 15 percent soluble solids and the soluble solids are 
equal to or in excess of 20 parts to every part acid contained in the 
juice in accordance with applicable sampling and testing procedures 
specified in the California Code of Regulations (3 CCR 1436.3, 1436.5, 
1463.6, 1436.7, 1436.12, and 1436.17). Currently, this subparagraph 
does not include the 16.5 percent option for meeting maturity 
requirements. In addition, obsolete language regarding requirements in 
effect only in 1998 is removed from paragraph (a)(1). These same 
requirements are already in effect for grapes shipped from southeastern 
California under Marketing Order No. 925.

Initial Regulatory Flexibility Impact Analysis

    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act (RFA), the Agricultural Marketing Service (AMS) has 
considered the economic impact of this proposed rule on small entities. 
Accordingly, AMS has prepared this initial regulatory flexibility 
analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and 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. Import regulations issued under 
the Act are comparable to those established under Federal marketing 
orders.
    There are approximately 20 handlers of southeastern California 
grapes who are subject to regulation under the order and about 50 grape 
producers in the production area. In addition, there are approximately 
123 importers of grapes. Small agricultural service firms, which 
include grape handlers and importers, are defined by the Small Business 
Administration (13 CFR 121.201) as those having annual receipts of less 
than $6,000,000, and small agricultural

[[Page 30006]]

producers are defined as those whose annual receipts are less than 
$750,000. Twelve of the 20 handlers subject to regulation have annual 
grape sales of less than $ 6 million. In addition, just under 80 
percent of producers in the production area have annual sales less than 
$750,000. Therefore, a majority of handlers and producers may be 
classified as small entities. The average importer receives $2.8 
million in revenue from the sale of grapes. Therefore, we believe that 
the majority of these importers are small entities.

Summary of Proposed Changes

    This rule would revise the regulatory periods when minimum grade, 
size, quality, and maturity requirements apply to grapes grown in 
southeastern California under the order, and to imported grapes under 
the table grape import regulation. The current regulatory periods for 
both domestic and imported grapes are April 20 through August 15 of 
each year. The California Desert Grape Administrative Committee (the 
``Committee''), which locally administers the order for grapes grown in 
a designated area of southeastern California, unanimously recommended 
changing the date when these requirements expire for grapes grown in 
California to July 10. A corresponding change to the regulatory period 
for imported table grapes is required under section 8e of the Act. This 
shortened regulatory period is in the interest of handlers and 
producers.
    The Desert Grape Growers League of California (the ``League'') 
requested that the beginning date of the regulatory period for imported 
grapes be changed from April 20 to April 1 and provided information to 
support its request. This proposed action is expected to prevent 
circumvention of the California grape order's grade, size, quality, and 
maturity requirements by low-quality grapes and to provide consumers 
with higher quality grapes on a more consistent basis. Experience has 
shown that an improvement in product quality results in increased 
acceptance in the marketplace, and more frequent purchases. To keep the 
beginning of the domestic regulatory period in line with the beginning 
of the import regulatory period, USDA also is proposing to change the 
beginning of the domestic regulatory period from April 20 to April 1.

Changing the Ending of the Regulatory Period for Domestic and Imported 
Grapes

    Section 925.52(a)(2) of the grape order provides authority to limit 
the handling of any grade, size, quality, maturity or pack of grapes 
differently for different varieties, or any combination of the 
foregoing during any period or periods.
    Section 925.304 of the order's administrative rules and regulations 
provides a regulatory period of April 20 through August 15 when minimum 
grade, size, quality, and maturity requirements apply to grapes grown 
in southeastern California under the order. A final rule published on 
March 20, 1987, (52 FR 8865) established these regulatory periods to 
promote the orderly marketing of grapes.
    Grape handlers in the production area shipped and marketed on 
average 8 million 18-pound lugs of grapes annually from 2000-2004. 
Approximately 99 percent of the 8 million 18-pound lugs were shipped 
and marketed during the period May 1-July 10. At least fourteen 
varieties are grown in the production area regulated under the order 
and marketed in major U.S. market areas. The four major varieties are 
Flame Seedless, Perlettes, Thompson Seedless, and Sugraone.
    Since 1987, the amount of grapes handled after July 10 has 
decreased, and in the period 2000-2004, the amount of grapes handled 
after July 10 constituted less than 1 percent of the on-average 8 
million lugs produced in the production area. The Committee met on 
November 14, 2002, and unanimously recommended modifying Sec.  925.304 
of the order's administrative rules and regulations to advance the date 
when minimum grade, size, quality, and maturity requirements expire to 
July 10, rather than August 15. The Committee met again on December 12, 
2002, and clarified that the proposed regulatory period should also 
apply to pack and container requirements under the order.
    The amount of grapes handled in the production area after July 10 
has generally decreased as older vineyards, which typically produce 
late season varieties, have been removed. During the past three years, 
more than 99 percent of the grapes grown in the production area were 
handled during the period April 20 through July 10.
    Grapes handled after July 10 tend to bring much lower prices than 
early season grapes. For example, in the 2003 season, early season 
(handled in the first two weeks of May) Flame Seedless grapes had an 
average FOB price of $13.85 to $23.85 while end-of-season Flame 
Seedless grapes brought an average FOB price of $11.85 to $12.85 per 
18-pound lug.
    Additionally, inspection costs outweigh the benefits of the order 
requirements for grapes handled after July 10, as inspection fees are 
proportionally higher for the volume of grapes inspected. Thus, this 
shortened regulatory period is expected to benefit handlers and 
producers. This change would also benefit enterprises that import 
grapes after July 10.
    Reports from the U.S. Census Bureau indicate that during the April-
October period of 2000, 2001, 2002, and 2003, an average of 12.6 
million 18-pound lugs of Mexican grapes were imported and marketed. 
Average imports from Chile at these times totaled 8.7 million 18-pound 
lugs. On average, Mexico and Chile accounted for 98 percent of imports. 
The remaining 2 percent came from other countries.
    Other alternatives were suggested to more adequately reflect the 
end of the harvest for the domestic production area and to generate 
shipments of higher quality grapes.
    For example, one suggestion was to change the ending date of the 
regulatory period for grapes grown in the designated area of 
southeastern California to July 1 or July 5. This suggestion was not 
adopted because the Committee believes that July 10 would be more 
reflective of the end of the [season], as less than half of one percent 
of grapes are shipped from the production area after July 10.
    Section 8e of the Act specifies that whenever certain specified 
commodities, including table grapes, are regulated under a Federal 
marketing order, imports of that commodity into the United States are 
prohibited unless they meet the same or comparable grade, size, 
quality, and maturity requirements as those in effect for the 
domestically produced commodity. Minimum grade, size, quality, and 
maturity requirements for table grapes imported into the United States 
are established under Table Grape Import Regulation 4 (7 CFR 
944.503)(import regulation).
    Section 944.503(a)(3) of the import regulation specifies that the 
regulatory period for imported grapes for the fresh market is April 20 
through August 15 of each year. Since this proposal would change the 
expiration date of regulatory period for the California production area 
to July 10, a corresponding change to the regulatory period for 
imported table grapes is required under section 8e of the Act.
    It is expected that the shortened regulatory period for domestic 
and imported grapes would benefit handlers, producers, and importers 
because their regulatory burdens would be reduced.

Changing the Beginning of the Regulatory Period for Imported Grapes

    The U.S. Census Bureau indicates that on average for 2000, 2001, 
2002, and

[[Page 30007]]

2003 (January through December); 60.0 million 18-pound lugs of grapes 
were imported into the United States. The two main countries exporting 
to the United States were Chile, with average exports of 45.7 million 
18-pound lugs (76 percent of the total), and Mexico with 12.6 million 
18-pound lugs (21 percent of the total). The remaining three percent 
came from other countries.
    The major varieties imported from Chile include Thompson Seedless, 
Flame Seedless, Red Globes, and Crimson Seedless. The majority of 
Chilean shipments arrive in the United States during the December-April 
period. Imports from Mexico to the United States are concentrated in 
the months of May, June, and July, with the majority of the crop 
shipped during the months of May and June. The most significant 
imported Mexican varieties are Thompson Seedless, Perlette, and Flame 
Seedless. The League requested that the beginning date of the 
regulatory period for imported grapes be advanced from April 20 to 
April 1, and submitted information to support its request to USDA for 
review and evaluation. USDA is proposing to change the beginning of the 
domestic regulatory period to keep the import and domestic regulatory 
period dates the same.
    The authority for changing the beginning date of the regulatory 
period for imports is specified in Sec.  608e-1(b) of the Act. These 
provisions allow the Secretary to extend import requirements for a 
period, not to exceed 35 days, during which the import requirements 
would be effective for the imported commodity. To change the beginning 
date, USDA considers the following: (1) For the prior year, whether 
imports of grapes that did not meet import requirements were marketed 
in the United States during the period that such import requirements 
were in effect; (2) whether imported grapes did or were likely to 
circumvent such import requirements; and (3) whether there would be any 
adverse effect on the availability and prices of grapes if the 
regulatory period for imports was changed to April 1.
    The League contends that such an action is needed to prevent 
circumvention of the California grape order's grade, size, maturity, 
and quality requirements by table grape imports.
    Trade data from the U.S. Census Bureau also shows that Chile 
accounts for almost all U.S. imports of fresh grapes during the 
February-April period in recent years. The total average grape imports 
for that period in the years 2000-2004 averaged 33.6 million 18-pound 
lugs. Of this amount, 32.8 million came from Chile (97.6 percent). 
South Africa accounted for 0.5 million lugs (1.6 percent). The 
remaining 0.8 percent came from other countries. Information from the 
League for 2000, 2001, 2002, 2003, and 2004 shows that the Port of 
Philadelphia (where historically the greatest percentage of Chilean 
table grapes enters the United States) received on-average 20 million 
18-pound lugs of imported Chilean grapes during the February 1-April 19 
period, with 30 percent (6 million) of these 20 million 18-pound lugs 
arriving between April 1 and April 19.
    The League compiled weekly inspection summaries of inspection data 
from USDA's Fresh Products Branch, Fruit and Vegetable Programs. These 
inspection summaries consisted of voluntary condition and quality 
inspections of imported grapes at the Port of Philadelphia for the 
period February-April 2000, 2001, 2002, 2003, and 2004.
    Based on AMS experience, importers request voluntary quality and 
condition inspections on grapes that appear to be of lesser quality 
prior to April 20 to determine the grade of the fruit as specified in 
the United States Standards for Grades of Table Grapes (European or 
Vinifera type) (7 CFR 51.880 through 51.914).
    According to the data provided by the League, approximately 2 
million 18-pound lugs of imported Chilean grapes arriving at the 
Philadelphia Port during the April 1 through April 19 period were 
inspected voluntarily for quality and condition with failure rates 
ranging from a low of 75 percent to a high of 90 percent in 2000; from 
65 percent to 78 percent in 2001; 65 percent to 70 percent in 2002; 
from 53 percent to 78 percent in 2003; and from 42 percent to 57 
percent in 2004. For the two to three days immediately prior to April 
20 in 2000, 2001, 2002, 2003, and 2004, the failure rates averaged 90 
percent in 2000, 78 percent in 2001, 67 percent in 2002, 73 percent in 
2003, and 46 percent in 2004.
    As mentioned earlier, these summaries and U.S. Census Bureau trade 
data indicate that voluntarily inspected and uninspected imported 
grapes were imported into the United States prior to April 20 and were 
marketed during the April 20-June period each year. As a practical 
matter, the quantities of grapes imported immediately prior to the 
beginning of the regulatory period are generally so large that they 
could not all be marketed before import requirements go into effect or 
the domestic industry begins shipments.
    USDA Market News data indicates that poorer condition imported 
grapes are marketed at lower prices than those obtained for better 
condition domestic or imported grapes in the marketplace. Poor 
condition grapes can cause a dampening effect on demand for all grapes 
in the marketplace. Thus, the proposed change would benefit both 
domestic shippers and importers of grapes.
    Studies of table grape importer storage behavior performed by 
SURRES, a division of Applied Technology Corporation, and the College 
of Business and Management, University of Maryland, indicate that 
importers use their storage capability extensively during the March-
April time frames and that storage periods in the 30-60 day range are 
not uncommon at this time of year.
    According to information from USDA Grape Market News, low quality 
imported grapes are in the U.S. market, from coast to coast, 
consistently during May, the same time as table grapes that have met 
the standards of the marketing order. On average, 60.0 million 18-pound 
lugs of grapes (2000, 2001, 2002, and 2003) were imported into the 
United States at all ports during the January-December period.
    Further, on average, the Philadelphia Port receives 11 varieties of 
table grapes that are exempted under the import requirements. During 
the period April 1-19, 2000, 2001, 2002, 2003, and 2004 approximately 6 
million 18-pound lugs of Chilean grapes were imported into the United 
States. On average, 1.8 million of these 18-pound lugs are exempted 
under the import requirements during this period. It is estimated that 
approximately 5.4 million 18-pound lugs of imported Chilean grapes 
would remain exempt from import requirements if the regulatory period 
is changed to April 1-July 10.
    During the 2000-2004 period, after April 20--the current effective 
date of the order requirements and the table grape import regulation--
there was a significant decrease in imports. The League pointed out 
that approximately 230,000 18-pound lugs of Chilean grapes on average 
(2000, 2001, 2002, 2003, and 2004) were imported into the United States 
the week following April 20, a significant decrease from the previous 
week's, on average, 3.3 million 18-pound lugs. Of these approximately 
230,000 18-pound lugs of Chilean table grapes, 140,000 lugs were non-
exempt varieties and subject to inspection for grade, size, quality, 
and maturity requirements under the table grape import regulations.
    USDA Market News Service Reports and Sermaco reports on arrivals of

[[Page 30008]]

imported grapes indicate that imported table grapes are in the domestic 
market during May and June, that many of those grapes are in fair, 
ordinary, and poor condition, and that they compete with domestic and 
imported grapes that are required to be inspected and certified as 
meeting minimum quality requirements. The USDA Fresh Products Branch 
data on voluntary inspections for 2000 and 2001 indicates a relatively 
high failure rate for imported Chilean grapes for the period April 1 
through 19, increasing somewhat as the April 20 effective date nears. 
The inspection data provided further indicates that less than half of 
one percent (approximately 137,000 18-pound lugs on average) of 
imported regulated Chilean grapes during the last three years were 
subject to inspection during the period April 20 through the end of the 
Chilean shipping season, July 14. Limited quantities of Chilean grapes 
are imported after the import regulation takes effect. The majority of 
imports from Mexico is imported during the May-July period, and is 
inspected under the import regulation.
    USDA Economic Research Service (ERS) studies indicate that low 
quality commodities can adversely affect the market for shippers of 
acceptable quality products. Quality requirements are typically used to 
cultivate a positive image of a consistent and reliable supplier of 
high-quality product. This results in consumer good will that 
strengthens demand and boosts producer prices. (USDA, Economic Research 
Service, Agricultural Economic Report Number 629, ``Federal Marketing 
Orders for Fruits, Vegetables, Nuts, and Specialty Crops'' by Nicholas 
J. Powers, March 1990; USDA, Economic Research Service, ``Criteria for 
Evaluating Federal Marketing Orders: Fruits, Vegetables, Nuts, and 
Specialty Commodities'' by Leo C. Polopolus, Hoy F. Carman, Edward V. 
Jesse, and James D. Shaffer, December 1986).
    The presence of lower quality grapes in the marketplace weakens 
demand for all grapes. Market research and experience show that 
consumers often purchase other commodities in place of the commodity 
with which they had a bad quality experience, which has a negative 
effect on grower, handler, exporter, and importer returns.
    The ERS report also discusses the purposes of quality standards. 
The basic rationale for such standards is that only satisfied customers 
are repeat customers. When consumers have a good quality experience, 
they make repeat purchases. Thus, quality standards help ensure that 
consumers are presented a product that is of a consistent quality.
    Given the marketing of uninspected imported grapes during May 2000, 
2001, 2002, 2003, and 2004 and June 2000, 2001, and 2004 it is in the 
interest of producers and importers that demand not be adversely 
affected by the marketing of lower quality/condition grapes. There is 
an obvious need to maintain consumer confidence through good-quality 
product.
    The per capita consumption of fresh grapes has increased from 3.97 
pounds in 1980 to 8.59 pounds in 2002. Changing the regulatory period 
for imports to April 1 would help better maintain quality and consumer 
acceptance in the marketplace, and could further increase per capita 
consumption.
    According to the League, table grapes from some countries exporting 
to the United States must meet minimum inspection requirements on a 
year-round basis in both the European Union and in Canada. Hence, a 
change in the effective date to April 1 should not affect the 
availability of imported table grapes because quality table grapes 
could easily be diverted to the U.S. market. During April 1-19, 2004, 
FOB prices for imported grapes in U.S. markets ranged from $8 to $26 
per package, depending on the month, condition, and size of the grapes. 
In comparison, Canadian FOB prices for imported grapes ranged from 
$12.03 to $33.98 and European Union prices ranged from $8 to $22 during 
April 2004 depending on condition and size of the grapes.
    Better quality grapes yield more revenue, which could offset the 
added inspection costs of 2.5 cents per box for imported grapes checked 
at dockside. In 2000, 2001, 2002, 2003 and 2004, less than 1 percent of 
Chilean grapes required mandatory inspection. However, if inspection in 
these years had been mandatory as of April 1, about 15 percent would 
have had to be inspected. Thus, consumers would have been assured of 
receiving fewer lower quality grapes. It is anticipated that the price 
would be slightly higher as higher quality fruit would be sold to 
consumers.
    Inspection fees would be applicable to grapes imported during the 
April 1-19 period. These fees vary, depending on such factors as the 
location of the inspection, the size of the load to be inspected, and 
whether there are multiple commodities to be inspected. Current 
inspection fees for imported grapes are 2.5 cents per package when 
inspected at dockside. When the inspection is performed at a location 
other than dockside, the fees range from $76 to $99 per car lot, 
depending on the number of packages in the load. (See http://www.ams.usda.gov/fv/fpboverview.htm for inspection fee information). A 
carlot usually contains 45,000 pounds of grapes.
    During the October 2003-April 2004 period, FOB prices for imported 
grapes ranged from $6 to mostly $44 per package, depending on the 
month, condition, and size of the grapes. In April 2004, prices per 
package ranged from $8 to $26 per package. Therefore, inspection fees 
would be less than 1 percent of the value of the grapes imported during 
this period of time.
    The benefit of changing the regulatory periods when grade, size, 
quality, and maturity requirements apply to grapes grown in a 
designated area of southeastern California and to imported grapes under 
the grape import regulation is not expected to be disproportionately 
larger or smaller for small importers than for large importers, nor for 
small handlers or producers than for larger entities.
    While earlier beginning dates for the regulatory period for 
imported grapes are authorized by statute, which provides that the 
additional period of time may not exceed 35 days, April 1 is less 
restrictive than the 35 days for importers, and one that could improve 
the quality of imported and domestic grapes, lessen the chances of 
circumvention of the grape marketing order's grade, size, quality, and 
maturity requirements by low quality/condition grape imports, and be in 
the interest of handlers, producers, importers, and consumers.
    This rule would not impose any additional reporting or 
recordkeeping requirements on either small or large grape handlers or 
importers. 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 proposed rule.
    Further, the Committee's meetings were widely publicized throughout 
the grape industry and all interested persons were invited to attend 
the meetings and participate in Committee deliberations. Like all 
Committee meetings, the November 14, 2002, and the December 12, 2002, 
meetings were public meetings and all entities, both large and small, 
were able to express their views on changing the ending date from 
August 15 to July 10. In addition, the World Trade Organization, the

[[Page 30009]]

Chilean Technical Barriers to Trade (TBT) inquiry point for 
notifications under the U.S-Chile Free Trade Agreement, the embassies 
of Argentina, Brazil, Canada, Chile, Italy, Mexico, Peru, and South 
Africa, and known grape importers will be notified of the proposed 
action. Finally, interested persons are invited to submit information 
on the regulatory and informational impacts of this action on small 
businesses.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: 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.
    In accordance with section 8e of the Act, the United States Trade 
Representative has concurred with the issuance of this proposed rule.
    A 60-day comment period is provided to allow interested persons to 
respond to this proposal. All written comments timely received will be 
considered before a final determination is made on this matter.

List of Subjects

7 CFR Part 925

    Grapes, Marketing agreements, Reporting and recordkeeping 
requirements.

7 CFR Part 944

    Avocados, Food grades and standards, Grapefruit, Grapes, Imports, 
Kiwifruit, Limes, Olives, Oranges.

    For the reasons set forth in the preamble, 7 CFR parts 925 and 944 
are proposed to be amended as follows:

PART 925--GRAPES GROWN IN A DESIGNATED AREA OF SOUTHEASTERN 
CALIFORNIA

    1. The authority citation for 7 CFR parts 925 and 944 continues to 
read as follows:

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

    2. The introductory text to Sec.  925.304 is proposed to be revised 
to read as follows:


Sec.  925.304  California Desert Grape Regulation 6.

    During the period April 1 through July 10 each year, no person 
shall pack or repack any variety of grapes except Emperor, Almeria, 
Calmeria, and Ribier varieties, on any Saturday, Sunday, Memorial Day, 
or the observed Independence Day holiday, unless approved in accordance 
with paragraph (e) of this section, nor handle any variety of grapes 
except Emperor, Calmeria, Almeria, and Ribier varieties, unless such 
grapes meet the requirements specified in this section.
* * * * *

PART 944--FRUITS; IMPORT REGULATIONS

    3. In Sec.  944.503, paragraphs (a)(1) introductory text, 
(a)(1)(ii), and (a)(3) are proposed to be revised to read as follows: 
Sec.  944.503 Table Grape Import Regulation 4.
    (a)(1) Pursuant to section 8e of the Act and Part 944--Fruits, 
Import Regulations, the importation into the United States of any 
variety of Vinifera species table grapes, except Emperor, Calmeria, 
Almeria, and Ribier varieties, is prohibited unless such grapes meet 
the minimum grade and size requirements specified in 7 CFR 51.884 for 
U.S. No. 1 table, as set forth in the United States Standards for 
Grades of Table Grapes (European Vinifera Type, 7 CFR 51.880 through 
51.914), or shall meet all the requirements of U.S. No. 1 Institutional 
with the exception of the tolerance for bunch size. Such tolerance 
shall be 33 percent instead of 4 percent as is required to meet U.S. 
No. 1 Institutional grade. Grapes meeting these quality requirements 
shall not be marked ``Institutional Pack,'' but may be marked ``DGAC 
No. 1 Institutional.''
    (i) * * *
    (ii) Grapes of the Flame Seedless variety shall meet the minimum 
berry size requirement of ten-sixteenths of an inch (1.5875 
centimeters) and shall be considered mature if the juice meets or 
exceeds 16.5 percent soluble solids, or the juice contains not less 
than 15 percent soluble solids and the soluble solids are equal to or 
in excess of 20 parts to every part acid contained in the juice, in 
accordance with applicable sampling and testing procedures specified in 
sections 1436.3, 1436.5, 1436.6, 1436.7, 1436.12, and 1436.17 of 
Article 25 of Title 3: California Code of Regulations (CCR).
* * * * *
    (3) All regulated varieties of grapes offered for importation shall 
be subject to the grape import requirements contained in this section 
effective April 1 through July 10.
* * * * *

    Dated: May 20, 2005.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 05-10440 Filed 5-24-05; 8:45 am]
BILLING CODE 3410-02-P