[Federal Register Volume 80, Number 214 (Thursday, November 5, 2015)]
[Rules and Regulations]
[Pages 68421-68424]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-28136]



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  Federal Register / Vol. 80, No. 214 / Thursday, November 5, 2015 / 
Rules and Regulations  

[[Page 68421]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 925 and 944

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


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

SUMMARY: This final rule implements a recommendation from the 
California Desert Grape Administrative Committee (Committee) to 
partially relax the handling requirements currently prescribed under 
the California table grape marketing order (order) and the table grape 
import regulation. The Committee locally administers the order and 
regulates the handling of table grapes grown in a designated area of 
southeastern California. 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 
final rule relaxes 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 five pounds or less. 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 
action provides California desert grape handlers and importers with the 
flexibility to respond to ongoing marketing opportunities to meet 
consumer needs.

DATES: Effective April 1, 2016.

FOR FURTHER INFORMATION CONTACT: Kathie Notoro, Marketing Specialist, 
or Martin Engeler, Regional Director, California Marketing Field 
Office, Marketing Order and Agreement Division, Specialty Crops 
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, Specialty Crops 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 final rule 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 final 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 final rule in 
conformance with Executive Orders 12866, 13563, and 13175.
    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This 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 final rule partially relaxes 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 five 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 final rule provides 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, in which voters 
unanimously recommended 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

[[Page 68422]]

(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 (See, 75 FR 17031, 
affirmed at 75 FR 34343). 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 two 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 bunches weighing one-quarter pound or more; 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 the corners 
of these larger containers to the desired weights with bunches weighing 
one-quarter pound or more, 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 clamshell containers weighing 5 pounds or less. Under this 
action, 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 action allows handlers to continue to 
respond to increased marketing opportunities. Section 925.304(a) is 
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). This relaxation in the California Desert Grape 
Regulation 6 minimum bunch size requirement requires a corresponding 
relaxation to the minimum bunch size requirement for imported table 
grapes. Similar to the domestic industry, this action allows importers 
the flexibility to respond to an ongoing marketing opportunity to meet 
consumer needs. Section 944.503(a)(1) is revised accordingly.

Final 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 final 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 14 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 14 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 2014 data from USDA's Foreign 
Agricultural Service (FAS), shipments of table grapes imported into the 
United States from Mexico totaled 17,042,386 18-pound lugs, from Chile 
totaled 38,466,540 18-pound lugs, and from Peru totaled 5,065,653 18-
pound lugs. According to FAS data, the total value of table grapes 
imported into the United States in 2014 was $1,189,848,000. It is 
estimated that the average importer received $11.7 million in revenue 
from the sale of table grapes in 2014. Based on this information, it 
may be concluded that the average table grape importer is not 
classified as a small entity.
    This final rule revises 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 final rule 
partially relaxes 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 five 
pounds or less. Under the 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 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 general 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 final rule on affected entities, this 
rule provides both California desert grape handlers and importers 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 certain packages weighing two pounds or less on a test basis. In 
2010, the regulation was revised permanently for consumer clamshell 
packages weighing two pounds or less due to the positive market 
response. This rule expands the revised requirements to include larger 
consumer clamshell packages weighing 5 pounds or less. Customers have 
been requesting larger sized clamshell packages, and this action 
enables 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 2010 
revision produced the desired results. The Committee believes the 
partial relaxation of the bunch size requirement for grapes packed in 
larger consumer clamshell packages is appropriate.
    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

[[Page 68423]]

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 final rule does 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.
    As noted in the initial regulatory flexibility analysis, USDA has 
not identified any relevant Federal rules that duplicate, overlap or 
conflict with this final rule.
    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, the Committee's meeting was widely publicized 
throughout the Southeastern California grape industry, and all 
interested persons in the production area 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.
    A proposed rule concerning this action was published in the Federal 
Register on March 3, 2015 (80 FR 11346). Copies of the rule were mailed 
or sent via facsimile to all Committee members and table grape handlers 
in the production area. Finally, the rule was made available through 
the internet by USDA and the Office of the Federal Register. A 30-day 
comment period, ending on April 2, 2015, was provided to allow 
interested persons to respond to the proposal.
    Twelve comments were received during the comment period in response 
to the proposal. Nine strongly supported the partial relaxation of the 
handling requirements and three comments were opposed.
    One commenter who opposed the partial relaxation specifically for 
5-pound clamshells or smaller stated that all consumer packages should 
be regulated similarly. This commenter also stated that if one 
clamshell container exceeds the 20 percent tolerance for small bunches, 
the entire lot is out of grade. The commenter indicated this has caused 
a problem for him in the past with 2-pound clamshell containers. The 
commenter also expressed concern that different grape quality standards 
are in effect at the same time. Finally, this commenter stated that he 
had not received notification of the November 5, 2013, meeting.
    In response to these comments, it is noted that the relaxed bunch 
size requirements do not apply to all consumer packages. As indicated 
in the proposed rule, the Committee's recommendation was specific to 
clamshell containers because smaller clusters of grapes are needed to 
fill the corners of these square containers. This aspect of the rule 
and its rationale is identical to the previous regulation that applied 
to 2-pound containers. Similar issues regarding other consumer 
containers were not reported or discussed by the Committee when it 
recommended this change. However, since this rule was initially 
recommended, the Committee has indicated that additional options may be 
considered and recommended in the future if appropriate rationale and 
justification are presented and evaluated.
    Regarding the comment concerning the bunch size tolerance, it is 
acknowledged that one failing container may cause the entire lot to be 
out of grade. However, it should be noted that the tolerance allows 20 
percent of the weight of the container to contain bunches of grapes 
smaller than one-quarter pound, but consisting of at least five 
berries. This is an allowance, not a requirement. Handlers are not 
required to use any clusters smaller than one-quarter pound to fill the 
containers. The relaxed tolerance merely provides handlers with the 
option and flexibility to utilize the smaller clusters to fill out the 
clamshell corners. Handlers choosing to utilize this practice should be 
able to fill the container's corners and fall within the 20 percent 
tolerance.
    Regarding the comment concerning different standards for grapes in 
the market at the same time, the marketing order only regulates grapes 
grown in Southeastern California. Thus, the order's regulations have no 
control over grapes from other areas. This rule is not intended to 
affect the overall quality of grapes in the marketplace. There is only 
one marketing order for table grapes. It is intended to allow 
Southeastern California grape handlers to meet the needs of their 
customers. Furthermore, industry experience following the previous 
revision for 2-pound clamshell containers, which is similar to this 
change, has been positive.
    In response to the comment that notification of the November 5, 
2013, meeting had not been received, it should be noted that the 
Committee routinely announces all upcoming meetings at least 3 days 
before they occur. These announcements are issued to all growers and 
handlers in the production area. Further, the commenter acknowledged 
awareness of the open comment period as published in the March 3, 2015, 
Federal Register notice, and his comment was received in a timely 
manner and is being addressed herein.
    Another commenter who opposed the rule believes that this partial 
relaxation will allow inferior grapes to be packed and is a visual 
misrepresentation to both the retailer and the consumer.
    This action was recommended by the Committee in response to 
customer complaints about the empty corners of the larger clamshells. 
While the tolerance for bunch size will be increased for grapes packed 
in clamshells containers weighing five pounds or less, all other 
requirements of U.S. No. 1 Table, as set forth in the U.S. Standards 
for Grades of Table Grapes, will still apply. Thus, the increased 
tolerance is not expected to affect the overall quality of the grapes 
in the marketplace. The change is intended to provide the industry with 
increased flexibility to meet customers' needs.
    The last commenter suggested that the math in calculating the 
acceptable tolerance of the one-quarter pound bunch minimum requirement 
for 5-pound clamshell containers is incorrect and offered various other 
weight combinations to meet the 5-pound weight requirement of an 
individual container. He also asserted that the current minimum bunch 
size requirement for U.S. No. 1 Table Grade grapes is 1.25 pounds. 
Finally, this commenter claimed that quality will be sacrificed by 
allowing 20 percent of the 5-pound containers to consist of loose 
grapes. These assertions are incorrect. The rationale for this rule is 
not based on a mathematical calculation of grape bunch sizes that could 
be used to fill containers. The rationale is to allow use of bunches 
smaller than one-quarter pound but consisting of at least five berries 
to properly fill the corners of the square containers. Furthermore, the 
assertion that the bunch size requirement for U.S. No. 1 Table Grade 
grapes is 1.25 pounds is not accurate. The bunch size requirement for 
U.S. No. 1 Table Grade grapes is one-quarter pound. This rule provides 
for up to 20 percent of the weight of clamshell containers to contain 
grape clusters weighing less than one-quarter pound, but the clusters 
must consist of at least five berries each.

[[Page 68424]]

    Finally, this rule does not allow 20 percent of the 5-pound 
container to consist of loose grapes. Loose grapes are not permitted by 
this relaxation. The 20 percent tolerance is given to limit the number 
of bunches weighing less than one-quarter pound and each must still 
contain at least five attached berries. As previously stated, this 
change is not expected to affect the overall quality of grapes in the 
marketplace as all of the other requirements of U.S. No. 1 Table grade, 
as set forth in the U.S. Standards for Grades of Table Grapes, will 
still apply.
    A similar requirement has been in place under the marketing order 
since 2010 for clamshell containers weighing two pounds or less, and 
the industry has received positive responses from customers. Since that 
time, the popularity of clamshell containers has increased, and larger 
sized clamshell containers are now being used for packaging grapes due 
to customer's demands.
    This action simply applies the same requirements to larger 
clamshell containers, as desired by customers.
    Accordingly, no changes will be made to the rule as proposed, based 
on the comments 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/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.
    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. In accordance with section 8e of the Act, the United States 
Trade 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 amended as follows:

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

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

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


0
2. Amend Sec.  925.304 by revising paragraph (a) introductory text, re-
designating paragraphs (a)(1) and (2) as paragraphs (a)(3) and (4) and 
adding new paragraphs (a)(1) and (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 (4) of this section, such grapes shall meet the minimum 
grade and size requirements established in paragraphs (a)(1) or (2) of 
this section.
    (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: Provided that 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 revising paragraph (a)(1) introductory text, 
redesignating paragraphs (a)(1)(i) and (ii) as paragraphs (a)(1)(iii) 
and (iv) and adding new paragraphs (a)(1)(i) and (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 (iv) of this section, 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 (ii) of this section.
    (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.''
* * * * *

Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2015-28136 Filed 11-4-15; 8:45 am]
BILLING CODE 3410-02-P