[Federal Register Volume 61, Number 60 (Wednesday, March 27, 1996)]
[Rules and Regulations]
[Pages 13393-13395]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-7436]
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DEPARTMENT OF AGRICULTURE
7 CFR Part 920
[Docket No. FV95-920-4FR]
Kiwifruit Grown in California; Relaxation of Container Marking
Requirements
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: This final rule relaxes the container marking requirements for
kiwifruit packed under the Federal marketing order for kiwifruit grown
in California. This relaxation reduces the number of kiwifruit
containers required to be marked with the lot stamp number. This rule
reduces handling costs and provides more flexibility in kiwifruit
packing operations.
EFFECTIVE DATE: April 26, 1996.
FOR FURTHER INFORMATION CONTACT: Rose Aguayo, California Marketing
Field Office, Marketing Order Administration Branch, Fruit and
Vegetable Division, AMS, USDA, 2202 Monterey Street, suite 102B,
Fresno, California 93721; telephone (209) 487-5901, Fax # (209) 487-
5906; or Charles Rush, Marketing Order Administration Branch, Fruit and
Vegetable Division, AMS, USDA, P.O. Box 96456, room 2526-S, Washington,
DC 20090-6456, telephone (202) 720-5127, Fax # (202) 720-5698.
SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing
Order No. 920 (7 CFR Part 920), as amended, 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 (Department) is issuing this final
rule in conformance with Executive Order 12866.
This final rule has been reviewed under Executive Order 12778,
Civil Justice Reform. This rule is not intended to have retroactive
effect. This final 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 the Secretary 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 the Secretary 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 in equity to review the
Secretary's ruling on the petition, provided a bill in equity
[[Page 13394]]
is filed not later than 20 days after date of the entry of the ruling.
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), the Administrator of the Agricultural Marketing Service
(AMS) has considered the economic impact of this rule on small
entities.
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 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 65 handlers of California kiwifruit subject
to regulation under the order and approximately 500 kiwifruit producers
in the production area. Small agricultural service firms are defined by
the Small Business Administration (13 CFR 121.601) as those whose
annual receipts are less than $5,000,000, and small agricultural
producers have been defined as those having annual receipts of less
than $500,000. A majority of handlers and producers of California
kiwifruit may be classified as small entities.
Under the terms of the marketing order, fresh market shipments of
California kiwifruit are required to be inspected and are subject to
grade, size, maturity, pack and container requirements. Current
requirements include specifications that all containers of kiwifruit
shall be plainly marked with the lot stamp number corresponding to the
lot inspection conducted by an authorized inspector, except for
individual consumer packages and containers that are being directly
loaded into a vehicle for export shipment under the supervision of the
Federal or Federal-State Inspection Service.
The Kiwifruit Administrative Committee (committee), the agency
responsible for local administration of the marketing order, met on
November 30, 1995, and recommended, by unanimous vote, to relax the
container marking requirements by reducing the number of containers
plainly marked with the lot stamp number from all containers to all
exposed or outside containers of kiwifruit, but not less than 75
percent of the total containers on a pallet.
The marketing order authorizes under Sec. 920.52(a)(3) the
establishment of container marking requirements. Section 920.303(d) of
the rules and regulations outlines the lot stamp number container
marking requirements for fresh kiwifruit packed under the order.
The committee recommended relaxing the lot stamp number marking
requirement because of changes in the produce retail industry. The
committee anticipates that the current order language, which requires
all containers to be plainly marked with the lot stamp number, will
create a problem in the near future due to industry changes in
container packaging configurations and pallet sizes. This relaxation
allows the industry flexibility for future pallet size and container
configurations.
Many products, outside the produce industry, are received by
retailers on 48- by 40-inch pallets. The kiwifruit industry almost
exclusively used the ``LA Lug'' container which fits on the 35- by 42-
inch or 53- by 42-inch pallets until recent years. The ``LA Lug''
configuration does not create a center tier when stacked on these
pallets. When kiwifruit shippers use 35- by 42-inch or 53- by 42-inch
pallets, receivers must unload the pallets and restack the fruit on
metric pallets, causing more damage to the fruit and more labor costs
to the receiver. Because of retail buying patterns and the retail
demand for operational consistency in pallet usage, the produce
industry has been moving away from using the 35- by 42-inch or 53 x 42
inch pallets and has been moving towards using a standard grocery-
industry metric pallet measuring 48- by 40-inches. The committee
anticipates that the retail usage of the metric pallet will continue to
increase because: (1) Retailer and handler trucking and transportation
costs for produce stacked on metric pallets are less than for produce
stacked on 35- by 42-inch and 53- by 42-inch pallets, (2) retailer
labor and disposal costs are less when metric pallets are utilized, and
(3) receiving areas are steadily being remodeled to handle metric
pallets. In the 1995/1996 season, approximately one percent of the
industry's 9.3 million trays equivalents were packed in ``shoe'' box
containers. The ``shoe'' box container (12 x 20 inches) is one of two
new containers which is stacked in eight columns on a 48- by 40-inches
metric pallet, and is configured in a manner which leaves one side of
each container exposed. The other container that fits on the metric
pallet is the ``mum'' box container. The ``mum'' box container
(13.3 x 16 inches) is stacked nine columns on a pallet with the center
column inaccessible to lot stamp numbering after the containers are
placed on the pallet during block inspection. In block inspection, the
inspection occurs after the pallets have been packed, strapped, and
been placed in storage. In-line inspection is performed during the
packing process, prior to palletization and storage.
The industry's usage of block and in-line inspection methods is
fairly evenly split with approximately 50 percent of the handlers using
in-line inspection and 50 percent using block inspection. The majority
of block inspections are conducted in the northern part of California
while in-line inspections are conducted primarily in the southern part
of California.
The committee's recommendation to relax the container marking
requirement will not significantly lower the number of containers being
inspected or bearing the lot stamp number. Of the 81 containers stacked
on a metric pallet during block inspection, nine containers (the center
tier--approximately 11 percent of the pallet) will not be lot stamp
numbered. The center tiers of all pallets will be randomly inspected by
the Federal or Federal-State Inspection Service for all marketing order
requirements. When the industry utilizes in-line inspection, both the
``shoe'' and ``mum'' containers are accessible to lot stamp number
marking and inspection, as they are being stacked on the pallet.
There is unanimous support in the industry to reduce the lot stamp
number container marking requirement.
Several other alternatives were suggested during the public
meeting. One alternative discussed by the committee was to require all
containers to continue to be lot stamp numbered. Maintaining the
requirement for lot stamp numbers to be placed on all containers
increases handler labor costs, slows handler operations, increases
handler restrapping costs, as well as increases inspection costs. It
was the consensus of the committee that such a requirement will be cost
prohibitive as each block-inspected pallet will have to be manually
pulled apart to enable the lot stamp number to be placed on the nine-
column center tier containers.
Another alternative suggested was to eliminate the block-inspection
method and require all handlers to use the in-line inspection method.
During in-line inspection, containers will be stamped with the lot
stamp number prior to being stacked on the pallet. This will have a
serious financial impact on the industry, especially among small
growers and handlers, due to a large increase in inspection costs. This
suggestion was unacceptable to the industry as it will be cost
prohibitive and could force small growers and handlers out of business.
[[Page 13395]]
Another alternative examined was to establish regulations
prohibiting the use of any containers that create an inaccessible
center when stacked on pallets. This alternative was not acceptable as
it will not allow the industry to make necessary container changes to
meet changing retailer needs and will be an excessive restriction.
This final rule, which relaxes the lot stamp number requirement,
impacts all handlers in the same manner and was viewed by the committee
as the least restrictive and best solution. Relaxing the lot stamp
number requirement solves the problems caused by changes in pallet
sizes and container configurations as well as spares the industry
future financial hardship. It allows the industry flexibility for
future pallet size and container configurations.
A proposed rule concerning this relaxation was issued on January
24, 1996, and published in the Federal Register on February 1, 1996,
(61 FR 3604). That rule provided a 30-day comment period which ended
March 4, 1996. No comments were received.
Based on the above, the Administrator of the AMS has determined
that this action will not have a significant economic impact on a
substantial number of small entities.
After consideration of all relevant matter presented, the
information and recommendations submitted by the committee, and other
available information, it is found that this action will tend to
effectuate the declared policy of the Act.
List of Subjects in 7 CFR Part 920
Kiwifruit, Marketing agreements.
For the reasons set forth in the preamble, 7 CFR Part 920 is
amended as follows:
PART 920--KIWIFRUIT GROWN IN CALIFORNIA
1. The authority citation for 7 CFR Part 920 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. In Section 920.303 paragraph (d) is revised to read as follows:
Sec. 920.303 Container marking regulations.
* * * * *
(d) All exposed or outside containers of kiwifruit, but not less
than 75 percent of the total containers on a pallet, shall be plainly
marked with the lot stamp number corresponding to the lot inspection
conducted by an authorized inspector; except for individual consumer
packages and containers that are being directly loaded into a vehicle
for export shipment under the supervision of the Federal or Federal-
State Inspection Service.
Dated: March 20, 1996.
Eric M. Forman,
Deputy Director, Fruit and Vegetable Division.
[FR Doc. 96-7436 Filed 3-26-96; 8:45 am]
BILLING CODE 3410-02-P