[Federal Register Volume 72, Number 235 (Friday, December 7, 2007)]
[Rules and Regulations]
[Pages 69139-69142]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 07-5989]


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

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 983

[Docket No. AMS-FV-07-0082; FV07-983-1 IFR]


Pistachios Grown in California; Changes in Handling Requirements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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

SUMMARY: This rule changes the handling requirements currently 
authorized under the California pistachio marketing order (order). The 
order regulates the handling of pistachios grown in California and is 
administered locally by the Administrative Committee for Pistachios 
(committee). This rule suspends the minimum quality requirements, 
including maximum defects and minimum sizes, for California pistachios. 
This will reduce handler costs and provide handlers more flexibility in 
meeting customer needs.

DATES: Effective December 10, 2007; comments received by February 5, 
2008 will be considered prior to issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must 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; 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 made available for public inspection in the Office of the 
Docket Clerk during regular business hours, or can be viewed at: http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Terry Vawter, Senior Marketing 
Specialist, or Kurt J. Kimmel, Regional Manager, California Marketing 
Field Office, Marketing Order Administration Branch, Fruit and 
Vegetable Programs, AMS, USDA; Telephone: (559) 487-5901, Fax: (559) 
487-5906, or Email: [email protected] or [email protected].
    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 Order 
No. 983 (7 CFR part 983), regulating the handling of pistachios 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 
conformance with Executive Order 12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule is not intended to have retroactive effect. 
This rule will not preempt any State or local laws, regulations, or 
policies, unless they present an irreconcilable conflict with this 
rule.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 608c(15)(A) of the 
Act, any handler subject to an order may file with USDA a petition 
stating that the order, any provision of the order, or any obligation 
imposed in connection with the order is not in accordance with law and 
request a modification of the order or to be exempted therefrom. A 
handler is afforded the opportunity for a hearing on the petition. 
After the hearing, USDA would rule on the petition. The Act provides 
that the district court of the United States in any district in which 
the handler is an inhabitant, or has his or her principal place of 
business, has jurisdiction to review USDA's ruling on

[[Page 69140]]

the petition, provided an action is filed not later than 20 days after 
the date of the entry of the ruling.
    This rule changes the handling requirements for pistachios 
currently authorized under the order. This rule suspends the minimum 
quality requirements, including maximum defects and minimum sizes, for 
California pistachios. This will reduce handler costs and provide 
handlers more flexibility in meeting customer needs. This action was 
recommended by the committee.
    Section 983.39 establishes minimum quality levels for pistachios, 
including maximum defects and minimum sizes permitted under the order. 
Under Sec.  983.46, the Secretary may modify, suspend, or make rules 
and regulations to implement Sec. Sec.  983.38 through 983.45 based 
upon a recommendation by seven concurring committee members or other 
available information.
    The quality and size requirements have been in effect for 
California pistachios since the order's inception in 2004. Evidence 
provided at the promulgation hearing suggested that there was a direct 
link between lower-quality pistachios and the incidence of aflatoxin 
contamination (see 68 FR 45990). Aflatoxin is one of a group of 
mycotoxins produced by the molds Aspergillus flavus and Aspergillus 
parasiticus. Aflatoxins are naturally-occurring in the field and can be 
further spread in improperly processed and stored nuts, dried fruits, 
and grains. The data presented at the hearing was based on aflatoxin 
analyses of pistachios with different defects. Although the data also 
indicated that the levels of aflatoxin associated with each defect 
varied widely, researchers attributed this to variability among the 
samples.
    As further data was collected in 2005 and 2006, University of 
California researchers concluded that variability in aflatoxin levels 
seen in previous studies may have been due to geographic variability 
1 2. Aflatoxin contamination is more prevalent in pistachios 
produced in the northern San Joaquin Valley, while quality defects, 
largely due to insect damage, are less prevalent. The opposite is true 
for the southern San Joaquin Valley. It is now believed that these 
differences in aflatoxin contamination between the growing areas are 
due to differences in climate. The northern San Joaquin Valley has more 
aflatoxin contamination because its cooler temperatures and greater 
moisture are more conducive to Aspergillus and aflatoxin development, 
but less conducive to insect population and damage. However, in the 
southern San Joaquin Valley, there is a higher incidence of insect 
damage and a much lower incidence of aflatoxin contamination because of 
the drier environment and higher temperatures. Thus, recent research 
suggests that aflatoxin occurrence in pistachios may be attributable to 
climatic factors.
---------------------------------------------------------------------------

    \1\ Doster, M.A., T.J. Michailides, L.D. Boeckler, and D.P. 
Morgan, 2006. Development of expert systems and predictive models 
for aflatoxin contamination in pistachios. In California Pistachio 
Industry Annual Report Crop Year 2005-2006, pg. 101-102.
    \2\ Doster, M.A., T.J. Michailides, L.D. Boeckler, and D.P. 
Morgan, 2007. Prediction of aflatoxin contamination and a survey of 
fungi producing Ochratoxin A in California pistachios. In California 
Pistachio Industry Annual Report Crop Year 2006-2007, pg. 109-110.
---------------------------------------------------------------------------

    Additionally, growers and handlers are reporting unexpected 
problems with the size of pistachios this season, as well as with 
staining of the nut shell from the hull. Pistachios are smaller than 
usual, and the large crop has resulted in a large percentage of 
pistachios which may not meet the requirements of the order because the 
sizes are smaller than currently authorized, which is 30/64ths of an 
inch. Staining is a problem this season due to unseasonable humidity 
and spotty rains on August 26th and 30th. The moisture wet the outer 
hull, and the hull then stained the pistachio shell. Dark stains are an 
external defect, which affects overall pistachio quality.
    Thus, the committee recommended suspending the minimum quality 
requirements, which include maximum defects and minimum sizes, under 
the order. This will reduce handler costs and provide handlers more 
flexibility in meeting customer needs. Suspending these requirements 
also necessitates modifications to other sections of the order and 
regulations that reference minimum quality and size requirements. 
Accordingly, this rule partially suspends or amends language in 
Sec. Sec.  983.6, 983.7, 983.31, 983.38, 983.40, 983.41, 983.42, 
983.45, 983.138, 983.143, and 983.147 of the order; and suspends 
Sec. Sec.  983.19, 983.20, 983.39, and 983.141 in their entirety.
    Additionally, the third sentence in Sec.  983.11(b), and all of 
Sec.  983.71 are removed because the committee's State counterpart, the 
California Pistachio Commission, has been terminated and there is 
currently no relationship between the two organizations.

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), Agricultural Marketing Service (AMS) has considered the 
economic impact of this action 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 would 
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.
    There are approximately 740 producers in the production area, and 
50 handlers of California pistachios subject to regulation. The Small 
Business Administration (SBA) (13 CFR 121.201) defines small 
agricultural producers as those having annual receipts less than 
$750,000, and defines small agricultural service firms those whose 
annual receipts are less than $6,500,000. Of the 740 producers, 
approximately 722 have annual receipts of less than $750,000. Forty-two 
of the 50 handlers subject to regulation have annual pistachio receipts 
of less than $6,500,000. Thus, the majority of producers and handlers 
of California pistachios may be classified as small entities.
    This rule changes the handling requirements authorized under the 
order. This rule suspends the minimum quality requirements, including 
maximum defects and minimum sizes, for California pistachios. Authority 
for this action is provided in Sec.  983.46.
    Regarding the impact on affected entities, suspending the minimum 
quality requirements will decrease handler inspection costs. The 
committee currently estimates that the direct costs to obtain 
inspection average approximately $50.00 per lot. The average lot is 
approximately 44,000 pounds. With over 100,000,000 pounds shipped 
domestically, the direct costs for inspection for approximately 2,300 
lots could total $115,000 for the industry. The direct costs do not 
include handler staff time in preparing samples, and handler storage 
and recordkeeping costs associated with inspected pistachios.
    The committee considered alternatives to suspending the minimum 
quality requirements. Some producers were concerned that this could 
give handlers too much latitude in their operations. Other producers 
commented that handlers' customers would likely dictate product quality 
and prevent shipment of substandard pistachios into the market. 
Ultimately, the majority of committee members supported the changes.

[[Page 69141]]

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the form ACP-5, ``Minimal Testing'' being suspended by 
this rule was previously approved by the Office of Management and 
Budget and assigned OMB No. 0581-0215, Pistachios Grown in California, 
for 1 burden hour. 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.
    AMS is committed to complying with the E-Government Act, to promote 
the use of the Internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this rule.
    Further, the committee meetings where this action was discussed 
were widely publicized throughout the pistachio industry and all 
interested persons were encouraged to attend the meetings and 
participate in the committee's deliberations. Like all committee 
meetings, these were public meetings, and entities of all sizes were 
encouraged to express their views on these issues. Finally, interested 
persons are invited to submit comments on this interim final rule, 
including 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.
    This rule invites comments on changes to the handling requirements 
currently prescribed under the order. Any comments received will be 
considered prior to finalization of this rule.
    The order provisions suspended by this action no longer tend to 
effectuate the declared policy of the Act. Accordingly, after 
consideration of all relevant material presented, including the 
committee's recommendation, and other information, it is found that 
this interim final rule, as hereinafter set forth, will effectuate the 
declared policy of the Act.
    Pursuant to 5 U.S.C. 553, it is also found and determined upon good 
cause that it is impracticable, unnecessary, and contrary to the public 
interest to give preliminary notice prior to putting this rule into 
effect and that good cause exists for not postponing the effective date 
of this rule until 30 days after publication in the Federal Register 
because: (1) It relaxes quality requirements currently in effect; (2) 
handlers are already receiving 2007-08 crop pistachios, and this rule 
should apply to as much of the 2007-08 crop as possible; (3) handlers 
are aware of these changes, which were discussed at two public 
meetings; and (4) this rule has a 60-day comment period and any 
comments received will be considered prior to finalization of this 
rule.

List of Subjects in 7 CFR Part 983

    Pistachios, Marketing agreements and orders, Reporting and 
recordkeeping requirements.

0
For the reasons set forth in the preamble, 7 CFR part 983 is amended as 
follows:

PART 983--PISTACHIOS GROWN IN CALIFORNIA

0
1. The authority citation for 7 CFR part 983 continues to read as 
follows:

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


Sec. Sec.  983.19, 983.20, 983.39, 983.141  [Amended]

0
2. In part 983, Sec. Sec.  983.19, 983.20, 983.39, and 983.141 are 
suspended indefinitely.


Sec.  983.6  [Amended]

0
3. In Sec.  983.6, the words ``free of internal defects as defined in 
Sec.  983.39(b)(4) and (5)'' are suspended indefinitely.


Sec.  983.7  [Amended]

0
4. In Sec.  983.7, the words ``and minimum quality'' are suspended 
indefinitely.


Sec.  983.11  [Amended]

0
5. In Sec.  983.11, paragraph (b), the third sentence is removed.


Sec.  983.31  [Amended]

0
6. In Sec.  983.31, the words ``and/or minimum quality'' are suspended 
indefinitely.


Sec.  983.38  [Amended]

0
7. In Sec.  983.38, paragraph (d)(1), the words ``and divided between 
those pistachios for aflatoxin testing and those for minimum quality 
testing'' are suspended indefinitely.

0
8. In Sec.  983.38, paragraph (d)(4), the word ``, grade'' is suspended 
from the penultimate sentence indefinitely.


Sec.  983.40  [Amended]

0
9. Paragraph (a) of Sec.  983.40 is suspended indefinitely.

0
10. In Sec.  983.40, paragraph (b), the words ``and/or the minimum 
quality'' are suspended from the first sentence indefinitely, the words 
``either'' and ``or the minimum quality'' are suspended from the second 
sentence indefinitely, and the words ``, and the handler, under the 
supervision of an inspector, shall send the failed lot notification 
reports for the lots that do not meet the minimum quality requirements 
to the committee'' are suspended from the third sentence indefinitely.

0
11. In Sec.  983.40, paragraph (c), the fifth sentence is suspended 
indefinitely.

0
12. Paragraph (e) of Sec.  983.40 is suspended indefinitely.


Sec.  983.41  [Amended]

0
13. Paragraph (b) of Sec.  983.41 is suspended indefinitely.


Sec.  983.42  [Amended]

0
14. In Sec.  983.42, the words ``and minimum quality certificate'' are 
suspended indefinitely.


Sec.  983.45  [Amended]

0
15. In Sec.  983.45, the words ``and minimum quality requirements,'' 
the first ``Sec.  ,'' and ``and 983.39'' are suspended indefinitely.


Sec.  983.71  [Removed]

0
16. Section 983.71 is removed.

0
17. Section 983.138 is revised to read as follows:


Sec.  983.138  Samples for testing.

    Prior to testing, a sample shall be drawn from each lot to be used 
to test pistachios for aflatoxin. The lot sample shall be of sufficient 
weight to comply with Tables 1 and 2 of Sec.  983.38.


Sec.  983.143  [Amended]

0
18. Section 983.143 is amended by revising paragraph (b) to read as 
follows:


Sec.  983.143  Reinspection.

    (a) * * *
    (b) Each handler who handles pistachios shall cause any lot or 
portion of a lot initially certified for aflatoxin, and subsequently 
materially changed, to be reinspected for aflatoxin and certified as a 
new lot or new lots: Provided, That, handlers exempted from order 
requirements under Sec.  983.170 are exempt from all reinspection 
requirements.

0
19. In Sec.  983.147, paragraph (a) is revised to read as follows:

[[Page 69142]]

Sec.  983.147  Reports.

    (a) ACP-2, Failed Lot Notification. Each handler shall notify the 
Administrative Committee for Pistachios (committee) of all lots that 
fail to meet the order's maximum aflatoxin requirements by completing 
section A of this form. Handlers shall furnish this report to the 
committee no later than 10 days after completion of the aflatoxin test. 
Each USDA-approved aflatoxin testing laboratory shall complete section 
C of this report, and forward this report and the failing aflatoxin 
test results to the committee and to the handler within 10 days of the 
test failure.
* * * * *


Sec.  983.147  [Amended]

0
20. Paragraph (d) of Sec.  983.147 is suspended indefinitely.

    Dated: December 4, 2007.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 07-5989 Filed 12-5-07; 10:02 am]
BILLING CODE 3410-02-P