[Federal Register Volume 79, Number 42 (Tuesday, March 4, 2014)]
[Rules and Regulations]
[Pages 12033-12034]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-04689]

Rules and Regulations
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Federal Register / Vol. 79, No. 42 / Tuesday, March 4, 2014 / Rules 
and Regulations

[[Page 12033]]


Agricultural Marketing Service

7 CFR Parts 920 and 944

[Doc. No. AMS-FV-13-0032; FV13-920-1 FIR]

Kiwifruit Grown in California and Imported Kiwifruit; Relaxation 
of Minimum Grade Requirement

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Affirmation of interim rule as final rule.


SUMMARY: The Department of Agriculture (USDA) is adopting, as a final 
rule, without change, an interim rule that relaxed the minimum grade 
requirement under the marketing order for kiwifruit grown in California 
(order), and for kiwifruit imported into the United States that are 
shipped to the fresh market, by increasing the tolerance of kiwifruit 
which is ``badly misshapen'' from 7 percent to 16 percent. This change 
is intended to facilitate the packing of fruit to meet the minimum 
grade requirement of ``KAC No. 1,'' and reduce costs associated with 
re-sorting and repacking this grade of fruit.

DATES: Effective March 7, 2014.

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: Kathie.Notoro@ams.usda.gov or 
    Small businesses may obtain information on complying with this and 
other marketing order regulations by viewing a guide at the following 
Web site: http://www.ams.usda.gov/MarketingOrdersSmallBusinessGuide; or 
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: Jeffrey.Smutny@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order 
No. 920, as amended (7 CFR part 920), regulating the handling of 
kiwifruit 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 
    This rule is also issued under section 8e of the Act, which 
provides that whenever certain specified commodities, including 
kiwifruit, 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 
    The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Orders 12866 and 13563.
    The handling of kiwifruit grown in California is regulated by 7 CFR 
part 920. Prior to this change, the minimum grade requirement under the 
definition for KAC No. 1 kiwifruit quality allowed a tolerance of 7 
percent for ``badly misshapen'' fruit. Increasing the tolerance for 
badly misshapen fruit to 16 percent is expected to reduce the incidence 
of containers of KAC No. 1 fruit failing to meet grade requirements, 
thereby reducing costs associated with repacking and re-sorting failing 
fruit. It is also expected to help facilitate and streamline the 
packing process by avoiding disruptions associated with repacking and 
re-sorting fruit.
    Imported kiwifruit is subject to regulations specified in 7 CFR 
part 944. Under those regulations, imported kiwifruit must meet the 
same minimum size requirements as specified for domestic kiwifruit 
under the order. Therefore, the tolerance of kiwifruit which is ``badly 
misshapen'' was also relaxed from 7 percent to 16 percent for kiwifruit 
imported into the United States.
    This rule continues in effect the rule that relaxed the minimum 
grade requirement for both domestic and imported kiwifruit.
    In an interim rule that was published in the Federal Register on 
July 22, 2013, (78 FR 43758, Doc. No. AMS-FV-13-0032; FV13-920-1 IR), 
Sec. Sec.  920.302 and 944.550 were amended by changing the definition 
of KAC No. 1 quality to allow a tolerance of 16 percent for kiwifruit 
that is ``badly misshapen.''

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 
    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. Import regulations issued under 
the Act are based on those established under Federal marketing orders.
    There are approximately 178 kiwifruit growers subject to regulation 
under the marketing order and approximately 28 handlers in the 
production area. There are approximately 53 importers of kiwifruit. 
Small agricultural service firms, which include kiwifruit handlers and 
importers, are defined by the Small Business Administration (SBA) (13 
CFR 121.201) as those having annual receipts of less than $7,000,000, 
and small agricultural producers are defined as those having annual 
receipts of less than $750,000.
    The California Agricultural Statistical Service (CASS) reported 
total California kiwifruit production for the 2011-12 season at 37,700 
tons, with an average price of $775 per ton. Based on the average price 
and shipment information provided by the CASS and the Kiwifruit 
Administrative Committee (Committee), the majority of kiwifruit 
handlers would be considered small businesses under the SBA definition. 
Based on kiwifruit production and price information, as well as the 
total number of California kiwifruit growers, the average annual grower 
revenue is less than $750,000. Thus, the majority of California

[[Page 12034]]

kiwifruit producers may also be classified as small entities. In 
addition, based on data from the U.S. Census Bureau, Department of 
Commerce, the value of imported kiwifruit for 50 of the 53 importers 
was less than $7,000,000. Thus, it can be concluded that the majority 
of kiwifruit importers may be classified as small entities.
    This rule continues in effect the action that relaxed the minimum 
grade requirement for KAC No. 1 kiwifruit grown in California and for 
imported kiwifruit. This rule relaxes the tolerance for kiwifruit that 
is ``badly misshapen'' from 7 percent to 16 percent under the 
provisions of Sec. Sec.  920.302(b) and 944.550 of the order. Authority 
for the change in the order's rules and regulations is provided in 
Sec.  920.53. The change in the import regulation is provided under 
section 8e of the Act.
    This action is not expected to increase costs associated with the 
order requirements or the kiwifruit import regulation. Rather, this 
action is expected to reduce costs to handlers and growers of 
kiwifruit, and to increase efficiencies in the packing process. 
Increasing the tolerance for misshapen fruit will reduce the amount of 
product that fails to meet the minimum grade, thus reducing re-sorting 
and repacking costs and reducing inefficiencies in the packing process. 
The quality of fruit to consumers is not expected to be significantly 
    Importers also benefit from this change as a greater volume of 
fruit is available for shipment to the United States. The opportunities 
and benefits of this rule are equally available to all kiwifruit 
handlers, growers, and importers, regardless of their size.
    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, Generic Fruit Crops. 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 will not impose any additional reporting or recordkeeping 
requirements on either small or large kiwifruit handlers in California 
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. In addition, USDA 
has not identified any relevant Federal rules that duplicate, overlap, 
or conflict with this rule.
    Further, the Committee's meeting where this change was recommended 
was widely publicized throughout the California kiwifruit industry. All 
interested persons were invited to attend the meeting and participate 
in Committee deliberations. Like all Committee meetings, the March 27, 
2013, meeting was a public meeting. All entities, both large and small, 
were able to express their views on this issue.
    Comments on the interim rule were required to be received on or 
before September 20, 2013. One comment was received. The commenter 
supported this action, stating that increasing the tolerance for 
misshapen fruit would decrease food waste and increase the availability 
of affordable fresh fruit for consumers. No changes are being made to 
the interim rule based on comments received.
    Therefore, for the reasons given in the interim rule, we are 
adopting the interim rule as a final rule, without change.
    To view the interim rule, go to: http://www.regulations.gov/#!documentDetail;D=AMS-FV-13-0032-0001.
    This action also affirms information contained in the interim rule 
concerning Executive Orders 12866 and 12988, the Paperwork Reduction 
Act (44 U.S.C. Chapter 35), and the E-Gov Act (44 U.S.C. 101).
    In accordance with section 8e of the Act, the United States Trade 
Representative has concurred with the issuance of this final rule.
    After consideration of all relevant material presented, it is found 
that finalizing the interim rule, without change, as published in the 
Federal Register (78 FR 43758, July 22, 2013) will tend to effectuate 
the declared policy of the Act.

List of Subjects

7 CFR Part 920

    Kiwifruit, Marketing agreements.

7 CFR Part 944

    Avocados, Food grades and standards, Grapefruit, Grapes, Imports, 
Kiwifruit, Limes, Olives, Oranges.

Sec. Sec.  920 AND 944  [AMENDED]

    Accordingly, the interim rule that amended 7 CFR parts 920 and 944 
and that was published at 78 FR 43758 on July 22, 2013, is adopted as a 
final rule, without change.

    Dated: February 25, 2014.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2014-04689 Filed 3-3-14; 8:45 am]