[Federal Register Volume 70, Number 161 (Monday, August 22, 2005)]
[Rules and Regulations]
[Pages 48839-48842]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-16571]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 920

[Docket No. FV05-920-1 FR]


Kiwifruit Grown in California; Relaxation of Pack Requirements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule revises the pack requirements for California 
kiwifruit under the California kiwifruit marketing order (order). The 
order regulates the handling of kiwifruit grown in California and is 
administered locally by the Kiwifruit Administrative Committee 
(Committee). This rule requires that kiwifruit marked as Size 39 or 42 
not vary in diameter by more than \3/8\ inch, regardless of pack type. 
In addition, the three tables that are currently under the pack 
regulation will be consolidated into one. By allowing handlers to 
utilize a single table for kiwifruit size designations and size 
variation tolerances regardless of pack or container, this rule is 
expected to simplify requirements for the industry, reduce handler 
packing costs, increase grower returns, and increase flexibility in 
handler packing operations.

EFFECTIVE DATE: August 23, 2005.

FOR FURTHER INFORMATION CONTACT: Shereen Marino, Marketing Specialist, 
California Marketing Field Office, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA; 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 final rule is issued under Marketing 
Order No. 920 as amended (7 CFR part 920), regulating the handling of 
kiwifruit grown in 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.''
    The Department of Agriculture (USDA) is issuing this rule in

[[Page 48840]]

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 will 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 rule revises the pack requirements for California kiwifruit 
under the order. This rule requires that Size 39 and Size 42 fruit not 
vary in size by more than \3/8\ inch, regardless of pack type. The 
Committee unanimously recommended these changes at its March 2, 2005, 
meeting.
    Currently, three tables are included under the pack regulation to 
designate sizes and list the size variances permitted for the different 
pack arrangements used in the industry. This rule consolidates the 
three tables into one table that lists size designations with 
applicable size variation tolerances for kiwifruit regardless of the 
pack or container type. This rule is expected to simplify requirements 
for the industry, reduce handler packing costs, increase grower 
returns, and increase flexibility in handler packing operations.
    Section 920.52 of the order authorizes the establishment of pack 
requirements. Section 920.302(a)(4) of the order's regulations 
specifies pack requirements for fresh shipments of California 
kiwifruit. Pack requirements include the specific arrangement, size, 
weight, count, or grade of a quantity of kiwifruit in a particular type 
and size of container.
    Section 920.302 of the order's regulations specifies grade, size, 
pack, and container regulations for the fresh shipment of California 
kiwifruit. This section contains three tables regarding pack. One table 
in Sec.  920.302(a)(4)(iii) specifies size designations for kiwifruit 
packed in volume fill containers (such as bags or bulk containers). 
These size designations are based on the maximum number of pieces of 
fruit per 8-pound sample. Two tables in Sec.  920.302 specify size 
variation tolerances. One table in Sec.  920.302(a)(4)(ii)(B) is 
applicable to volume fill containers and lists size designations with 
the corresponding size variation tolerance listed by diameter. The 
other table in Sec.  920.302(a)(4)(ii)(A) is applicable to kiwifruit 
packed in trays and lists the variation tolerance in diameter by count 
(number of pieces of kiwifruit packed in a tray).
    Since 1989, there have been two different size variation tolerances 
for Size 39 and Size 42 kiwifruit, depending on style of pack. The 
majority of Size 39 and Size 42 kiwifruit is initially packed in volume 
fill containers and must meet a size variation tolerance of \3/8\-inch. 
It has become more common for some of the fruit to then be restyled 
(repacked) into trays. In fact, the current estimate is that 10 percent 
of the crop is restyled into trays. All kiwifruit restyled within the 
production area must be reinspected.
    Restyling fruit from volume fill containers into trays may require 
resizing the fruit because the size variation tolerance differs for the 
two containers. Fruit packed in trays that is 39 and 42 count must meet 
a size variation tolerance of \1/4\-inch. In order to meet the more 
restrictive \1/4\-inch tolerance, handlers must resize the fruit. 
Resizing is costly and slows down the restyling process. In addition, 
during the initial packing process, pack styles can change several 
times daily depending upon market demand. Resizing may also reduce 
returns to growers. Thus, the Committee recommended changing the size 
variation requirement for Size 39 and Size 42 kiwifruit from \1/4\ inch 
to \3/8\ inch when packed in cell compartments, cardboard fillers, or 
molded trays.
    The Committee also recommended revising the regulations to specify 
one standard size variation tolerance of \3/8\-inch for Size 39 and 
Size 42 kiwifruit, regardless of whether the fruit is packed in volume 
fill containers or trays. To facilitate this change the three tables 
under the pack regulation will be consolidated into one that lists both 
size designations and their applicable size variation tolerances for 
fruit packed in all container types. Additionally, clarifying language 
that was inadvertently omitted from under the first table (Count) in 
prior rulemaking will be restored. The language clarifies that the 
average weight of all sample units in a lot must weigh at least 8 
pounds, but no sample unit may be more than 4 ounces less than 8 
pounds. This rule is expected to simplify requirements for the 
industry, reduce handler packing costs, increase grower returns, and 
increase flexibility in handler packing operations. Section 920.302 is 
revised accordingly.

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 the 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 45 handlers of California kiwifruit subject 
to regulation under the marketing order and approximately 275 growers 
in the production area. Small agricultural service firms are defined by 
the Small Business Administration (13 CFR 121.201) as those whose 
annual receipts are less than $6,000,000, and small agricultural 
producers are defined as those whose annual receipts are less than 
$750,000. None of the 45 handlers subject to regulation have annual 
kiwifruit sales of at least $6,000,000. In addition, six growers 
subject to regulation have annual sales exceeding $750,000. Therefore, 
a majority of the kiwifruit handlers and growers may be classified as 
small entities.
    This rule relaxes the pack requirements currently specified in 
Sec.  920.302 for kiwifruit. The rule creates one standard size 
variation tolerance to be applied uniformly to all container types. 
Additionally, the three tables currently under the pack regulation will 
be consolidated into one. By allowing handlers to utilize a single 
table for kiwifruit size designations and size variation tolerances, 
regardless of pack or container, this rule is expected to simplify 
requirements for the industry, reduce handler packing costs, increase 
grower returns, and increase flexibility in handler packing operations. 
Authority for this action is provided in Sec.  920.52 of the order, 
which authorizes the establishment of pack requirements.

[[Page 48841]]

    The impact of this change on handlers was discussed by the 
Committee. Approximately 10 percent of shipments are restyled from a 
volume fill container to a tray pack. Based on an industry survey, 
restyling costs an average of $.07 per tray equivalent. Since there 
will no longer be a need for handlers to resize the fruit when 
restyling from a volume fill container to a tray pack, it is estimated 
that restyling costs per tray equivalent will decrease to $.035 per 
tray equivalent. The average of Size 39 and 42 fruit sold over a 6-year 
period is approximately 22 percent of the crop. Current restyling costs 
are obtained by calculating 10 percent of the average of Size 39 and 42 
fruit (22 percent of the total packout) and multiplying that number by 
the estimated cost per tray equivalent.
    Based on a total crop of 6 million tray equivalents (te) the cost 
savings for repacking/restyling will be around $9,000. This amount is 
obtained by subtracting $9,240 from $18,480 from the table below, which 
is the difference between the restyling costs incurred when fruit must 
be resized and restyling costs when fruit does not need to be resized.

Total Crop Sold (te)--6,000,000
Total Size 39 & 42 fruit (22% of total crop) (te)--1,320,000
Estimated number of Size 39 & 42 fruit restyled annually from bulk to 
trays (10% of total 39/42's packed) (te)--132,000
Approximate cost to restyle Sizes 39 and 42 fruit without rechecking/
resizing for size variation difference (0.07 cents per te)--$9,240
Approximate cost to restyle Size 39 and 42 fruit that requires resize 
for size variation difference (0.14 cents per te)--$18,480

    This change reduces packing costs since handlers will no longer 
need to resize fruit to the more restrictive \1/4\-inch tolerance in 
the restyling (repacking) process. The packing process will also move 
more rapidly since frequent resizing adjustments are no longer 
necessary. Fewer resizing adjustments may also mean increased returns 
to growers.
    The Committee considered the alternative of not revising the rule, 
but this was not considered viable because of the confusion currently 
experienced because of differences in the size variation tolerance in 
the different packs and the resulting increased packing costs. The 
Committee reasoned that the only viable alternative was to create a 
standard size variation tolerance regardless of pack.
    This rule creates one size variation standard that will be applied 
uniformly to all container types as well as consolidate the three 
tables currently in the pack regulation of the order into one table. 
Accordingly, these actions do not impose any additional reporting or 
recordkeeping requirements on either small or large kiwifruit handlers. 
As with all Federal marketing order programs, reports and forms are 
periodically reviewed to reduce information requirements and 
duplication by industry and public sectors.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this final rule. In fact, this action will 
relax the current requirements under the U.S. Standards for Grade of 
Kiwifruit (7 CFR 51.2335 through 51.2340) issued under the Agricultural 
Marketing Act of 1946 (7 U.S.C. 1621 through 1627) with regard to 
``fairly uniform in size.''
    In addition, the Committee's meeting was widely publicized 
throughout the kiwifruit industry and all interested persons were 
invited to attend the meeting and participate in Committee 
deliberations on all issues. Like all Committee meetings, the March 2, 
2005, meeting, was a public meeting and all entities, both large and 
small, were encouraged to express their views on these issues.
    A proposed rule concerning this action was published in the Federal 
Register on June 22, 2005 (70 FR 36060). Copies of the rule were mailed 
or sent via facsimile to all Committee members and kiwifruit handlers. 
Finally, the rule was made available through the Internet by USDA and 
the Office of the Federal Register. A 20-day comment period ending July 
12, 2005, was provided to allow interested persons to respond to the 
proposal. No comments were received.
    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.
    After consideration of all relevant matter presented, including the 
information and recommendation submitted by the Committee and other 
available information, it is hereby found that this rule, as 
hereinafter set forth, will tend to effectuate the declared policy of 
the Act.
    It is further found that good cause exists for not postponing the 
effective date of this rule until 30 days after publication in the 
Federal Register (5 U.S.C. 553) because this rule should be in place by 
September 10, 2005, which is prior to the start of the new shipping 
season. This rule relaxes requirements currently in effect. Further, 
handlers are aware of this rule, which was recommended at a public 
meeting. Also, a 20-day comment period was provided for in the proposed 
rule and no comments were received.

List of Subjects in 7 CFR Part 920

    Kiwifruit, Marketing agreements, Reporting and recordkeeping 
requirements.

0
For the reasons set forth in the preamble, 7 CFR part 920 is amended as 
follows:

PART 920--KIWIFRUIT GROWN IN CALIFORNIA

0
1. The authority citation for 7 CFR part 920 continues to read as 
follows:

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

0
2. In Sec.  920.302, paragraph (a)(4) is revised to read as follows:


Sec.  920.302  Grade, size, pack, and container regulations.

    (a) * * *
    (4) Pack Requirements. (i) Kiwifruit packed in containers with cell 
compartments, cardboard fillers, or molded trays shall be of proper 
size for the cells, fillers, or molds in which they are packed. Such 
fruit shall be fairly uniform in size.
    (ii) (A) Kiwifruit packed in any container shall be subject to the 
size designation, maximum number of fruit per 8-pound sample, and the 
size variation tolerance specified as follows:

[[Page 48842]]



                Size Designation and Size Variation Chart
------------------------------------------------------------------------
                                  Column 2
                                  maximum
                                 number of     Column 3 size variation
   Column 1 size designation    fruit per 8-     tolerance (diameter)
                                   pound
                                   sample
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18 or larger..................           25  \1/2\-inch (12.7 mm).
20............................           27  \1/2\-inch (12.7 mm).
23............................           30  \1/2\-inch (12.7 mm).
25............................           32  \1/2\-inch (12.7 mm).
27/28.........................           35  \1/2\-inch (12.7 mm).
30............................           39  \1/2\-inch (12.7 mm).
33............................           43  \3/8\-inch (9.5 mm).
36............................           46  \3/8\-inch (9.5 mm).
39............................           49  \3/8\-inch (9.5 mm).
42............................           53  \3/8\-inch (9.5 mm).
45 or smaller.................           55  \1/4\-inch (6.4 mm).
------------------------------------------------------------------------

    (B) The average weight of all sample units in a lot must weigh at 
least 8 pounds, but no sample unit may be more than 4 ounces less than 
8 pounds.
    (C) Not more than 10 percent, by count, of the containers in any 
lot and not more than 5 percent, by count, of kiwifruit in any 
container, (except that for Sizes 42 and 45 kiwifruit, the tolerance, 
by count, in any one container, may not be more than 25 percent) may 
fail to meet the size variation requirements of this paragraph.
    (iii) All volume fill containers of kiwifruit designated by weight 
shall hold 19.8-pounds (9-kilograms) net weight of kiwifruit unless 
such containers hold less than 15 pounds or more than 35 pounds net 
weight of kiwifruit.
* * * * *

    Dated: August 17, 2005.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 05-16571 Filed 8-19-05; 8:45 am]
BILLING CODE 3410-02-P