[Federal Register Volume 73, Number 55 (Thursday, March 20, 2008)]
[Rules and Regulations]
[Pages 14917-14919]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-5648]



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  Federal Register / Vol. 73, No. 55 / Thursday, March 20, 2008 / Rules 
and Regulations  

[[Page 14917]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 983

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


Pistachios Grown in California; Changes in Handling Requirements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (USDA) is adopting, as a final 
rule, without change, an interim final rule changing the handling 
requirements 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 continues in effect the action 
that suspended the minimum quality requirements, including maximum 
defects and minimum sizes, for California pistachios. This reduces 
handler costs and provides handlers more flexibility in meeting 
customer needs.

DATES: Effective Date: April 21, 2008.

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 E-mail: [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.''
    USDA is issuing this rule in conformance with Executive Order 
12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule is not intended to have retroactive effect. 
This rule will not preempt any State or local laws, regulations, or 
policies, unless they present an irreconcilable conflict with this 
rule.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 608c(15)(A) of the 
Act, any handler subject to an order may file with USDA a petition 
stating that the order, any provision of the order, or any obligation 
imposed in connection with the order is not in accordance with law and 
request a modification of the order or to be exempted therefrom. A 
handler is afforded the opportunity for a hearing on the petition. 
After the hearing, USDA would rule on the petition. The Act provides 
that the district court of the United States in any district in which 
the handler is an inhabitant, or has his or her principal place of 
business, has jurisdiction to review USDA's ruling on the petition, 
provided an action is filed not later than 20 days after the date of 
the entry of the ruling.
    This rule continues in effect the action that changed the handling 
requirements for pistachios currently authorized under the order. This 
rule continues to suspend the minimum quality requirements, including 
maximum defects and minimum sizes, for California pistachios. This 
reduces handler costs and provides handlers more flexibility in meeting 
customer needs. This action was recommended by the committee.
    Prior to implementation of the interim final rule, Sec.  983.39 
established 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 were 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

[[Page 14918]]

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.
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    \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.
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    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 have met the requirements of the order because 
the sizes are smaller than authorized, which was 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 reduces handler costs and provides handlers more 
flexibility in meeting customer needs. Suspending these requirements 
also necessitated modifications to other sections of the order and 
regulations that referenced minimum quality and size requirements. 
Accordingly, this rule continues to partially suspend or amend 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 continues to 
suspend 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 were removed because the committee's State counterpart, 
the California Pistachio Commission, has been terminated and there is 
currently no relationship between the two organizations.

Final 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 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 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 as 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 continues in effect the action that changed the handling 
requirements authorized under the order. This rule continues to suspend 
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 decreases handler inspection costs. The committee 
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.
    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.
    In addition, as noted in the initial regulatory flexibility 
analysis, 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.
    An interim final rule concerning this action was published in the 
Federal Register on December 7, 2007. Copies of the rule were mailed by 
the committee's staff to all committee members and pistachio handlers. 
In addition, the rule was made available by USDA and the Office of the 
Federal Register. That rule provided for a 60-day comment period which 
ended February 5, 2008. One comment was received that was not relevant 
to the interim final rule.
    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.
    The order provisions and regulations that were suspended or 
terminated no longer tend to effectuate the declared policy of the Act, 
while the regulations that were revised 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 finalizing this interim final rule, 
without change, as published in the Federal Register (72 FR 69139, 
December 7, 2007), will effectuate the declared policy of the Act.

List of Subjects in 7 CFR Part 983

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

[[Page 14919]]

PART 983--PISTACHIOS GROWN IN CALIFORNIA

0
Accordingly, the interim final rule amending 7 CFR part 983 which was 
published at 72 FR 69139 on December 7, 2007, is adopted as a final 
rule without change.

    Dated: March 13, 2008.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
 [FR Doc. E8-5648 Filed 3-19-08; 8:45 am]
BILLING CODE 3410-02-P