[Federal Register Volume 80, Number 41 (Tuesday, March 3, 2015)]
[Proposed Rules]
[Pages 11346-11349]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-04087]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 925 and 944

[Doc. No. AMS-FV-14-0031; FV14-925-2 PR]


Grapes Grown in a Designated Area of Southeastern California and 
Imported Table Grapes; Relaxation of Handling Requirements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule with request for comments.

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SUMMARY: This proposed rule invites comments on partially relaxing the 
handling requirements currently prescribed under the California table 
grape marketing order (order) and the table grape import regulation. 
The order regulates the handling of table grapes grown in a designated 
area of southeastern California and is administered locally by the 
California Desert Grape Administrative Committee (committee). The 
import regulation is authorized under section 8e of the Agricultural 
Marketing Agreement Act of 1937 and regulates the importation of table 
grapes into the United States. This action would partially relax the 
one-quarter pound minimum bunch size requirement in the order's 
regulations and the import regulation for U.S. No. 1 Table grade grapes 
packed in consumer packages known as clamshells weighing 5 pounds or 
less. Under the proposal, up to 20 percent of the weight of such 
containers may consist of single grape clusters weighing less than one-
quarter pound, but consisting of at least five berries each. This rule 
would provide California desert grape handlers and importers with the 
flexibility to respond to an ongoing marketing opportunity to meet 
consumer needs.

DATES: Comments must be received by April 2, 2015.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. Comments must be sent to the Docket 
Clerk, Marketing Order and Agreement Division, Fruit and Vegetable 
Program, 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 document 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

[[Page 11347]]

hours, or can be viewed at: http://www.regulations.gov. All comments 
submitted in response to this proposal will be included in the record 
and will be made available to the public. Please be advised that the 
identity of the individuals or entities submitting the comments will be 
made public on the Internet at the address provided above.

FOR FURTHER INFORMATION CONTACT: Kathie Notoro, Marketing Specialist, 
or Martin Engeler, Regional Director, California Marketing Field 
Office, Marketing Order and Agreement Division, Fruit and Vegetable 
Program, 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 Jeffrey Smutny, Marketing Order and Agreement 
Division, Fruit and Vegetable Program, AMS, USDA, 1400 Independence 
Avenue SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-
2491, Fax: (202) 720-8938, or Email: [email protected].

SUPPLEMENTARY INFORMATION: This proposal is issued under Marketing 
Order No. 925, as amended (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 Department of Agriculture (USDA) is issuing this proposed rule 
in conformance with Executive Orders 12866, 13563, and 13175.
    This proposal has been reviewed under Executive Order 12988, Civil 
Justice Reform. This proposed rule is not intended to have retroactive 
effect.
    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.
    There are no administrative procedures which must be exhausted 
prior to any judicial challenge to the provisions of import regulations 
issued under section 8e of the Act.
    This proposed rule would partially relax the one-quarter pound 
minimum bunch size requirement in the order's regulations and the 
import regulation for all U.S. No. 1 Table grade grapes packed in 
clamshell consumer packages weighing 5 pounds or less. Under the 
revision, up to 20 percent of the weight of such containers could 
consist of single grape clusters weighing less than one-quarter pound 
but consisting of at least five berries each. This proposed rule would 
provide California desert grape handlers and importers with the 
flexibility to respond to an ongoing marketing opportunity. The 
committee met on November 5, 2013, and conducted an electronic vote on 
April 8, 2014, to unanimously recommend the partial relaxation for 
California desert grapes. The change in the import regulation is 
required under section 8e of the Act.
    Section 925.52(a)(1) of the order provides authority to regulate 
the handling of any grade, size, quality, maturity, or pack of any and 
all varieties of grapes during the season. Section 925.53 provides 
authority for the committee to recommend to USDA changes to regulations 
issued pursuant to Sec.  925.52. Section 925.55 specifies that when 
grapes are regulated pursuant to Sec.  925.52, such grapes must be 
inspected by the Federal or Federal-State Inspection Service (FSIS) to 
ensure they meet applicable requirements.
    Section 925.304(a) of the order's rules and regulations requires 
grapes to meet the minimum grade and size requirements of U.S. No 1 
Table; or to meet all the requirements of U.S. No. 1 Institutional, 
except that a tolerance of 33 percent is provided for off-size bunches. 
The requirements for the U.S. No. 1 Table and U.S. No. 1 Institutional 
grades are set forth in the United States Standards for Grades of Table 
Grapes (European or Vinifera Type) (7 CFR 51.880 through 51.914) 
(Standards). To meet the requirements of U.S. No. 1 Table grade, grapes 
must have a bunch size of at least one-quarter pound.
    In 2010, the order's regulations were relaxed with respect to the 
bunch size requirement specified in the Standards (75 FR 17031). This 
change permitted the use of bunch sizes smaller than one-quarter pound, 
but with at least five berries each, in packing consumer clamshell 
containers containing 2 pounds net weight or less. Not more than 20 
percent of the weight of such containers could consist of these smaller 
bunches. This relaxation was made to allow handlers to take advantage 
of a new marketing opportunity for grapes packed in small clamshell 
containers. Prior to the relaxation, handlers were experiencing 
difficulty filling these containers properly with one-quarter pound 
bunches; smaller bunches were needed to fill the corners of the square 
container configuration to achieve the desired weight.
    Since the order's regulations were amended in 2010, customers 
nationwide have been increasingly requesting grapes in larger clamshell 
containers. Handlers experience difficulty properly filling these 
larger containers to the desired weights with one-quarter pound bunch 
sizes, similar to the problem they experienced with the smaller 2-pound 
clamshell containers. Therefore, the committee recommended that the 
bunch size requirement in the order's regulations pertaining to U.S. 
No. 1 Table grade grapes be partially relaxed with respect to 
containers weighing 5 pounds or less. Under this proposed change, up to 
20 percent of the weight of such containers may consist of single grape 
clusters weighing less than one-quarter pound, but with at least five 
berries each. This proposal would allow handlers to continue to respond 
to increased marketing opportunities. Section 925.304 (a) would be 
revised accordingly.
    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). A relaxation in the California Desert Grape 
Regulation 6 minimum bunch size requirement would require a 
corresponding relaxation to the minimum bunch size requirement for 
imported table grapes. Like the domestic industry, this proposed action 
would allow importers the flexibility to respond to an ongoing 
marketing opportunity to meet consumer needs. Section 944.503(a)(1) 
would be revised accordingly.

[[Page 11348]]

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), the 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 
businesses 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.
    There are approximately 15 handlers of southeastern California 
grapes who are subject to regulation under the marketing order and 
about 41 grape producers in the production area. In addition, there are 
about 102 importers of grapes. Small agricultural service firms are 
defined by the Small Business Administration (SBA) as those having 
annual receipts of less than $7,000,000, and small agricultural 
producers are defined as those whose annual receipts are less than 
$750,000 (13 CFR 121.201). Ten of the 15 handlers subject to regulation 
have annual grape sales of less than $7,000,000, according to USDA 
Market News Service and committee data. Based on information from the 
committee and USDA's Market News Service, it is estimated that at least 
10 of the 41 producers have annual receipts of less than $750,000. 
Thus, it may be concluded that a majority of grape handlers regulated 
under the order and about ten of the producers could be classified as 
small entities under the SBA definitions.
    Mexico, Chile, and Peru are the major countries that export table 
grapes to the United States. According to 2013 data from USDA's Foreign 
Agricultural Service (FAS), shipments of table grapes imported into the 
United States from Mexico totaled 16,582,989 18-pound lugs, from Chile 
totaled 47,922,204 18-pound lugs, and from Peru totaled 3,519,448 18-
pound lugs. According to FAS data, the value of table grapes imported 
from Mexico, Chile, and Peru was $332,284,000, $760,952,000, and 
$80,912,000, respectively, for a total value of $1,174,148,000. It is 
estimated that the average importer receives $11.5 million in revenue 
from the sale of table grapes. Based on this information, it may be 
concluded that the average table grape importer would not be classified 
as a small entity.
    This proposed rule would revise Sec.  925.304(a) of the rules and 
regulations of the California desert grape order and Sec.  
944.503(a)(1) of the table grape import regulation. This proposed rule 
would partially relax the one-quarter pound minimum bunch size 
requirement in the order's regulations and the import regulation for 
U.S. No. 1 Table grade grapes packed in consumer clamshell packages 
weighing 5 pounds or less. Under the proposed relaxation, up to 20 
percent of the weight of each package may consist of single grape 
clusters weighing less than one-quarter pound, but with at least five 
berries each. Authority for the proposed change to the California 
desert grape rules and regulations is provided in Sec. Sec.  
925.52(a)(1) and 925.53. Authority for the change to the table grape 
import regulation is provided in section 8e of the Act.
    There is agreement in the industry for the need to expand the 
revised minimum bunch size requirement for grapes packed in these 
consumer clamshell packages to allow for more packaging options.
    Regarding the impact of this proposed rule on affected entities, 
this rule would provide both California desert grape handlers and 
importers with the flexibility to continue to respond to an ongoing 
marketing opportunity to meet consumer needs. This marketing 
opportunity initially existed in the 2009 season, and the minimum bunch 
size regulations were revised for consumer clamshell packages weighing 
2 pounds or less, on a test basis. In 2011, the regulation was revised 
permanently for consumer clamshell packages weighing 2 pounds or less 
due to the positive market response. This proposal would expand the 
revised requirements to include larger consumer clamshell packages 
weighing 5 pounds or less. Customers have been requesting larger sized 
clamshell packages, and this proposed action would enable handlers and 
importers to take advantage of increased market opportunities, which 
may result in increased shipments of consumer grape packages. This is 
expected to have a positive impact on producers, handlers, and 
importers.
    No additional alternatives were considered because the 2011 
revision produced the desired results, and no problems were identified. 
The committee believes the partial relaxation of the bunch size 
requirement for grapes packed in larger consumer clamshell packages was 
appropriate to prescribe for the 2014 and subsequent seasons.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the order's information collection requirements have been 
previously approved by the Office of Management and Budget (OMB) and 
assigned OMB No. 0581-0189. No changes in those requirements as a 
result of this action are necessary. Should any changes become 
necessary, they would be submitted to OMB for approval.
    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.
    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, USDA has not identified any relevant Federal rules 
that duplicate, overlap or conflict with this rule.
    Further, the committee's meeting was widely publicized throughout 
the grape industry, and all interested persons were invited to attend 
the meeting and participate in committee deliberations. Like all 
committee meetings, the November 5, 2013 meeting was a public meeting; 
and all entities, both large and small, were able to express their 
views on this issue.
    Finally, interested persons are invited to submit comments on this 
proposed 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/MarketingOrdersSmallBusinessGuide. Any questions 
about the compliance guide should be sent to Jeffrey Smutny at the 
previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposal. Thirty days is deemed appropriate because 
this rule, if adopted, needs to be in place as soon as possible to 
allow handlers to take advantage of this relaxation during the 
regulatory period which begins on April 10, 2015. All written comments 
timely received will be considered before a final determination is made 
on this matter.
    In accordance with section 8e of the Act, the United States Trade

[[Page 11349]]

Representative has concurred with the issuance of this rule.

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:

0
1. The authority citation for 7 CFR parts 925 and 944 continues to read 
as follows:

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

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

0
2. Amend Sec.  925.304(a) by re-designating paragraphs (a)(1) and 
(a)(2) as paragraphs (a)(3) and (a)(4), revising paragraph (a) 
introductory text and adding new paragraphs (a)(1) and (a)(2) to read 
as follows:


Sec.  925.304  California Desert Grape Regulation 6.

* * * * *
    (a) Grade, size, and maturity. Except as provided in paragraphs 
(a)(3) and (a)(4) of this section, such grapes shall meet the minimum 
grade and size requirements established in paragraphs (a)(1) or (a)(2).
    (1) 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), with the exception of the tolerance percentage for 
bunch size when packed in individual consumer clamshell packages 
weighing 5 pounds or less: not more than 20 percent of the weight of 
such containers may consist of single clusters weighing less than one-
quarter pound, but with at least five berries each; or
    (2) U.S. No. 1 Institutional, with the exception of the tolerance 
percentage 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 may be marked ``DGAC No. 1 
Institutional'' but shall not be marked ``Institutional Pack.''
* * * * *

PART 944--FRUITS; IMPORT REQUIREMENTS

0
3. Amend Sec.  944.503 by redesignating paragraphs (a)(1)(i) and 
(a)(1)(ii) as paragraphs (a)(1)(iii) and (a)(1)(iv), revising paragraph 
(a)(1) introductory text and adding new paragraphs (a)(1)(i) and 
(a)(1)(ii) 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, and except as provided in paragraphs (a)(1)(iii) 
and (a)(1)(iv), 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 established in paragraphs (a)(1)(i) or 
(a)(2)(ii).
    (i) 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), with the exception of the tolerance percentage for 
bunch size when packed in individual consumer clamshell packages 
weighing 5 pounds or less: not more than 20 percent of the weight of 
such containers may consist of single clusters weighing less than one-
quarter pound, but with at least five berries each; or
    (ii) U.S. No. 1 Institutional, with the exception of the tolerance 
percentage 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 may be marked ``DGAC No. 1 
Institutional'' but shall not be marked ``Institutional Pack.''
* * * * *

    Dated: February 23, 2015.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2015-04087 Filed 3-2-15; 8:45 am]
BILLING CODE 3410-02-P