Proposed National Marketing Agreement Regulating Leafy Green Vegetables; Recommended Decision and Opportunity To File Written Exceptions to Proposed Marketing Agreement No. 970
Federal RegisterApr 29, 2011
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 970
[Doc. No. AO-FV-09-0138; AMS-FV-09-0029; FV09-970-1]
Proposed National Marketing Agreement Regulating Leafy Green Vegetables; Recommended Decision and Opportunity To File Written Exceptions to Proposed Marketing Agreement No. 970
AGENCY:
Agricultural Marketing Service, USDA.
ACTION:
Proposed rule and opportunity to file exceptions.
SUMMARY:
This recommended decision proposes the issuance of a marketing agreement (agreement) under the Agricultural Marketing Agreement Act of 1937 to cover the handling of fresh leafy green vegetables in the United States. Leafy green vegetables include lettuce, spinach, cabbage, and similar items. The proposed agreement would authorize the development and implementation of production and handling regulations (audit metrics) to reflect United States Food and Drug Administration (FDA) Good Agricultural Practices (GAPs) and Good Manufacturing Practices (GMPs), and United States Department of Agriculture (USDA) Good Handling Practices (GHPs). The program would be voluntary, and cover both United States and imported leafy green vegetables. Signatory handlers would agree to only handle leafy green vegetables that meet the requirements of the program. The program would be financed primarily by assessments collected from signatory first handlers. A Board, whose members would be appointed by the Secretary, would administer the proposed agreement with USDA oversight. This rule also announces USDA Agricultural Marketing Service's (AMS) intention to request approval by the Office of Management and Budget for new information collection requirements to implement this program.
DATES:
Written exceptions must be filed by July 28, 2011. Pursuant to the Paperwork Reduction Act, comments on the information collection burden must be received by July 28, 2011.
ADDRESSES:
Written exceptions should be filed with the Hearing Clerk, United States Department of Agriculture, 1400 Independence Ave., SW., Room 1031-S, Washington, DC 20250-9200, Fax: (202) 720-9776 or via the Internet at
http://www.regulations.gov.
All exceptions should reference the docket number and the date and page number of this issue of the
Federal Register
. Comments will be made available for public inspection in the Office of the Hearing Clerk during regular business hours, or can be viewed at:
http://www.regulations.gov.
To the extent practicable, all documents filed with the hearing clerk also should be submitted electronically to Melissa Schmaedick at the e-mail address noted for her in the
FOR FURTHER INFORMATION CONTACT
section.
FOR FURTHER INFORMATION CONTACT:
Antoinette Carter, 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:
Antoinette.Carter@ams.usda.gov;
or Melissa Schmaedick, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 805 SW. Broadway, Suite 930, Portland, OR 97205; Telephone (503) 326-2724, Fax (503) 326-7440, or E-mail:
Melissa.Schmaedick@ams.usda.gov.
Small businesses may request information on this proceeding by contacting Antoinette Carter at the address provided for her above.
SUPPLEMENTARY INFORMATION:
Prior documents in this proceeding: Notice of Public Hearing issued on August 31, 2009, and published in the September 3, 2009, issue of the
Federal Register
(74 FR 45565); and Notice of Additional Time for Public Hearing issued on September 18, 2009, and published in the September 23, 2009, issue of the
Federal Register
(74 FR 48423).
These actions are governed by the provisions of sections 556 and 557 of title 5 of the United States Code and are therefore excluded from the requirements of Executive Order 12866.
Preliminary Statement
Notice is hereby given of the filing with the Hearing Clerk of this recommended decision with respect to the proposed marketing agreement regulating the handling of leafy green vegetables in the United States, and the opportunity to file written exceptions thereto. Copies of this recommended decision can be obtained from Melissa Schmaedick, whose address is listed above.
This recommended decision is issued pursuant to the provisions of the Agricultural Marketing Agreement Act of 1937, as amended (48 Stat. 31, as amended; 7 U.S.C. 601-674), hereinafter referred to as the “Act”, and the applicable rules of practice and procedure governing the formulation of marketing agreements and orders (7 CFR part 900).
The proposed agreement is based on the record of a public hearing held on: September 22 through 24, 2009, in Monterey, California; September 30 through October 1, 2009, in Jacksonville, Florida; October 6, 2009, in Columbus, Ohio; October 8, 2009, in Denver, Colorado; October 14 and 15, 2009, in Yuma, Arizona; October 20, 2009, in Syracuse, New York; and October 22, 2009, in Charlotte, North Carolina.
The hearing was held to receive evidence on the proposed agreement from producers, handlers, and other interested parties. The Notice of Public Hearing was published in the
Federal Register
on September 3, 2009 (74 FR 45565).
Background
In mid-September 2006, FDA issued the first public alerts of a multi-State Escherichia coli (E. coli) outbreak linked to fresh spinach grown in California's Salinas Valley. The resulting recall was the largest ever for fresh leafy green vegetables. Investigations by FDA and the California Department of Health Services, in cooperation with the Centers for Disease Control and Prevention, and USDA's Animal and Plant Health Inspection Service, concluded that the E. coli contamination might have been attributed to environmental factors in the production area.
In response to this E. coli outbreak, members of the California leafy green vegetable industry initiated the establishment of a State marketing agreement for handlers of leafy green vegetables. The California Leafy Green Products Handler Marketing Agreement became effective February 10, 2007. At the time of the hearing, 99 percent of leafy green vegetables produced and handled in California were subject to the State program. In October 2007, a similar program was implemented in Arizona: The Arizona Leafy Green Products Shipper Marketing Agreement. Approximately 75 percent of the leafy green vegetables produced and handled in Arizona were being regulated under that State's program at the time of the hearing. While both the California and Arizona programs are voluntary, the requirements of these State marketing agreements are mandatory for all signatories within each respective State.
On October 4, 2007, AMS published an Advance Notice of Proposed Rulemaking (ANPR) in the
Federal Register
(72 FR 56678) in response to industry interest in the establishment of a national marketing program to address
the handling of leafy green vegetables nationwide. The ANPR explored the concept of establishing a regulatory program to reduce microbial contamination and improve product quality of leafy green vegetables available in the United States' produce market. Proposals and comments were sought from the public, particularly from producers, handlers, buyers, and sellers of leafy green vegetables.
The ANPR resulted in the submission and consideration of more than 3,500 public comments on the need and level of support for a nationwide regulatory program for GAPs, GHPs, and GMPs. These comments may be viewed at
http://www.regulations.gov
and by typing the following docket number into the search function: AMS-FV-07-0090.
On June 10, 2009, a petition for rulemaking and a request for public hearing on a proposed national agreement for leafy green vegetables were submitted to AMS. The proposal was submitted by a group of producers, handlers, and interested persons representing a cross-section of the national fresh and fresh-cut produce industry, hereinafter referred to as the “proponents” or “proponent group”. The proponent group is comprised of the membership of the following organizations: United Fresh Produce Association, Produce Marketing Association, Georgia Fresh Vegetable Association, Georgia Farm Bureau, Texas Vegetable Association, Arizona Farm Bureau, Leafy Greens Council, California Farm Bureau, California Leafy Greens Products Handler Marketing Agreement, Grower-Shipper Association of Central California, Western Growers, and the Imperial Valley Vegetable Growers Association. The proponents, whose membership includes both conventional and organic producers and handlers, as well as business entities of all sizes, claim to represent a majority of the volume of leafy green vegetables produced and handled for the United States market.
In their request and at the hearing, the proponents proposed the establishment of a program that would oversee a systematic application of good agricultural production, handling, and manufacturing practices for leafy green vegetables. Proponents stated that the proposed agreement would minimize the potential for microbial contamination in production and handling systems and would improve consumer confidence in leafy green vegetables in the United States market.
Proponents supported the establishment of a voluntary program that would require mandatory compliance for its signatories under the authority of the Act and that it be administered by USDA. Proponents explained that, if implemented, an administrative body comprised of leafy green vegetable producers, handlers, and other representatives of the leafy green vegetable industry should be established to administer the program under USDA oversight. In addition to the administrative body, proponents proposed two committees: One to assist the administrative body in the identification and development of audit metrics, and one to advise the administrative body on research and development projects administered under the program.
Proponents defined the proposed production area as the 50 States of the United States of America and the District of Columbia. It was further proposed that the agreement be financed primarily by assessments collected from signatory first handlers on the volume of leafy green vegetables handled. In addition, contributions could be received for the purposes of funding research and development activities.
As a voluntary program, proponents explained that only signatory handlers to the proposed agreement would be regulated. Signatory handlers would be required to only handle leafy green vegetables that were produced and handled in adherence to specific requirements (audit metrics) established under the proposed agreement. Proponents stated that audit metrics should be science-based, scalable, and regionally applicable in order to accommodate compliance of varying size and types of operations. Moreover, any audit metrics proposed under the program would require approval of the USDA prior to implementation.
Proponents explained that audits should be conducted by the USDA Inspection Service, or persons or organizations authorized to audit on its behalf, to verify signatory handler compliance to the proposed agreement. If implemented, proponents stated that such audits should be conducted on both domestic and imported product handled by signatory handlers.
One hundred and twenty individuals testified during the 9 days of hearings which resulted in 4,935 pages of testimony. One hundred and thirty-nine exhibits were submitted. Witnesses represented leafy green producers and handlers, and representatives from stakeholder interest groups including State and local government representatives, certified organic auditors, organic and sustainable agriculture advocacy groups, consumer advocacy groups, conservation and wildlife advocacy organizations, academia, and others. Some witnesses supported the proposed agreement, while others opposed it or suggested modifications or changes to it.
In addition to other opponents of the proposed agreement, an opponent group comprised of member organizations of the National Organic Coalition (NOC) testified at the hearing. Members of the NOC include: Beyond Pesticides, Center for Food Safety, Equal Exchange, Food and Water Watch, Maine Organic Farmers and Gardeners Association, Midwest Organic Farmers and Gardeners Association, National Cooperative Grocers Association, Northeast Organic Dairy Producers Alliance, Northeast Organic Farming Association-Interstate Council, Organically Grown Company, Rural Advancement Foundation International-USA, and the Union of Concerned Scientists.
Witnesses opposed to the program cited several areas of concern. These included: The cost of becoming compliant and maintaining compliance with the proposed agreement; the existing proliferation of audit requirements from private sector customers, the addition of a new and potentially conflicting set of audit requirements, and “audit fatigue”; the need for science-based production and handling requirements, as well as the need for adequate peer-review of scientific studies used to establish them; potential conflicts between existing Federal, State, and local conservation, wildlife, and environmental regulations and any proposed metrics; the need for recognition of organic and other non-conventional production and handling practices in the development of audit metrics; the appropriateness and authority for USDA oversight of the proposed agreement; and, the need for a national program.
At the conclusion of the hearing, the Administrative Law Judge fixed January 13, 2010, as the due date for interested persons to file proposed findings and conclusions or written arguments based on the evidence received at the hearing. Upon a motion for extension from the proponents as well as member organizations of the National Organic Coalition, the date was extended until January 27, 2010.
Sixteen briefs were filed in total. Those submitting briefs included: Pollinator Partnership, Global Organic Specialty Source, Inc., Chiquita Brands International, Inc., Arizona Leafy Green Products Shipper Marketing Agreement, Office of the Attorney General for the State of Arizona, Episcopal Diocese of California, DNO, Inc., Duda Farm Fresh Foods, Inc., National Organic Coalition
(including Food and Water Watch, Carolina Farm Stewardship Association, and Florida Certified Organic Growers and Consumers, Inc.), Canadian Horticultural Council, Partners for Sustainable Pollination, Association of Food and Drug Officials, Massachusetts Farm Bureau Federation, Inc., Grower's Management, Inc., Western Growers, and California Roundtable on Agriculture and the Environment.
Overview
After extensive analysis and review of the hearing record, USDA has incorporated in this recommended decision changes and revisions to the text of the proposed marketing agreement. Changes and modifications include numerical redesignations of sections, combining of regulatory text, the addition of new provisions, and clarifications. For ease of reference in reading this recommended decision, the following table provides a summary that identifies the differences between the sections proposed in the Notice of Hearing and the sections proposed in this recommended decision.
Notice of hearing
Changes and revisions
Recommended decision
970.1
970.1
NEW
970.2
970.2
REDESIGNATED AND REVISED
970.3
970.3
REDESIGNATED AND REVISED
970.4
NEW
970.5
970.4
REDESIGNATED AND REVISED
970.6
970.6
REDESIGNATED AND REVISED
970.8
NEW
970.9
970.7
REDESIGNATED AND REVISED
970.10
970.8
REDESIGNATED AND REVISED
970.11
970.9
REDESIGNATED AND REVISED
970.12
970.10
REDESIGNATED AND REVISED
970.13
970.11
REDESIGNATED AND REVISED
970.14
970.12
REDESIGNATED AND REVISED
970.15
970.13
REDESIGNATED AND REVISED
970.16
970.14
REDESIGNATED AND REVISED
970.17
970.15
REDESIGNATED AND REVISED
970.18
970.16
REDESIGNATED AND REVISED
970.19
970.17
REDESIGNATED AND REVISED
970.20
NEW
970.21
NEW
970.22
970.18
REDESIGNATED AND REVISED
970.23
NEW
970.24
970.19
REDESIGNATED
970.25
970.20
REDESIGNATED AND REVISED
970.27
970.21
REDESIGNATED AND REVISED
970.19
970.22
REDESIGNATED AND REVISED
970.26
970.23
REDESIGNATED
970.28
NEW
970.29
970.24
REDESIGNATED AND REVISED
970.30
970.25
REDESIGNATED
970.31
NEW
970.32
970.26
REDESIGNATED AND REVISED
970.33
NEW
970.34
970.27
REDESIGNATED AND REVISED
970.35
NEW
970.36
970.28
REDESIGNATED AND REVISED
970.37
970.35
REDESIGNATED AND REVISED
970.39
970.40
REVISED
970.40
NEW
970.41
970.41
REDESIGNATED AND REVISED
970.42
970.42
REDESIGNATED AND REVISED
970.43
970.43
REDESIGNATED AND REVISED
970.44
970.44
REDESIGNATED AND REVISED
970.45
970.45
REDESIGNATED AND REVISED
970.46
970.46
REDESIGNATED AND REVISED
970.47
970.47
REDESIGNATED AND REVISED
970.48
970.48
REDESIGNATED AND REVISED
970.49
970.49
REDESIGNATED AND REVISED
970.50
970.50
REDESIGNATED AND REVISED
970.51
970.55
REVISED
970.55
970.56
REVISED
970.56
970.57
REVISED
970.57
970.58
REVISED
970.58
970.65
REVISED
970.65
970.66
REVISED
970.66
970.67
REVISED
970.67
970.68
REVISED
970.68
970.69
REVISED
970.69
970.70
REVISED
970.70
970.71
REVISED
970.71
970.72
REVISED
970.72
970.75
REVISED
970.75
970.80
REVISED
970.80
970.81
REVISED
970.81
970.82
REVISED
970.82
970.83
REVISED
970.83
970.85
REVISED
970.85
970.86
REVISED
970.86
970.87
REVISED
970.87
970.88
970.88
970.89
REVISED
970.89
970.90
970.90
970.91
REVISED
970.91
970.92
970.92
970.93
REVISED
970.93
970.94
970.94
970.95
REVISED
970.95
970.96
REVISED
970.96
970.97
REVISED
970.97
970.98
REVISED
970.98
NEW
970.99
This recommended decision takes into consideration the record of the public hearing as well as the arguments contained in the post-hearing briefs. The merits of these arguments are discussed in the findings and conclusions of this recommended decision.
Material Issues
The material issues presented on the record of hearing are as follows:
1. Whether the handling of leafy green vegetables in the production area is in the current of interstate commerce or foreign commerce, or directly burdens, obstructs, or affects such commerce;
2. Whether market conditions justify a need for a Federal marketing agreement which would tend to effectuate the declared policy of the Act;
3. What the definition of the production area and the commodity to be covered by the proposed agreement should be;
4. What the identity of the persons and the activities to be regulated under the proposed agreement should be;
5. What the specific terms and provisions of the proposed agreement should be, including:
(a) The definition of terms used therein, which are necessary and incidental to attain the declared objectives and policy of the Act;
(b) Whether an administrative body should be established to assist USDA in the administration and oversight of the proposed agreement, and what the membership composition, administrative procedures, powers, and duties of that body should be;
(c) Whether the proposed agreement should include the authority to establish regulations and audit requirements that would apply to signatory handlers;
(d) Whether the proposed agreement should include the authority to incur expenses and establish procedures to levy assessments on signatory first handlers to obtain revenue for paying such expenses;
(e) Whether the proposed agreement should include the authority to establish signatory handler reporting and recordkeeping requirements;
(f) Whether the proposed agreement should require signatory handler compliance with all provisions of the agreement and with any regulations issued under it;
(g) Whether the proposed agreement should include the authority to establish rules, regulations, or safeguards for exemption from the requirements of the agreement;
(h) Whether the proposed agreement should include the authority to establish or provide for the establishment of research and market development projects;
(i) Whether the proposed agreement should include additional terms and conditions as set forth in § 970.85 through § 970.98 of the Notice of Hearing published in the
Federal Register
on September 3, 2009 (74 FR 45565), which are common to all agreements; and
6. What the handler sign-up process should be, and if provisions should be made for signatory handlers to discontinue participation in the program.
Findings and Conclusions
The following findings and conclusions on the material issues are based on the evidence presented at the hearing and the record thereof.
Material Issue Number 1—Current of Interstate Commerce or Foreign Commerce
The record indicates that the handling of leafy green vegetables grown in the United States, or leafy green vegetables grown outside the United States and imported by United States handlers, is in the current of interstate or foreign commerce or directly burdens, obstructs, or affects such commerce.
Evidence is that the leafy green vegetable industry is a highly integrated, complex system of large, mid-size, and small producers delivering product to handlers, retailers, and foodservice operators nation-wide. Leafy green vegetables may be produced in one State, processed in another State, and then shipped for consumption to many States or nationally. Moreover, the product of one or more producers of varying sizes and origin may be handled by one or more handlers, also of varying size or origin.
Evidence also is that leafy green vegetables are imported, mainly from Mexico and Canada, and that such leafy green vegetables are often co-mingled with United States produced leafy green vegetables and distributed throughout the United States market. Similarly, United States produced leafy green vegetables are regularly exported, primarily to Canada. Exported leafy green vegetables may contain product produced by a variety of producers, varying in size and origin, and may be handled by one or more handlers.
For these reasons, evidence confirms that the handling of leafy green vegetables is at multiple levels of interstate or foreign commerce and has an effect on such commerce.
Industry Overview
Producers and Handlers
According to USDA Census of Agriculture data (Census) and other USDA data presented at the hearing, there were 8,216 farms that harvested 433,023 acres of leafy green vegetables specifically for the fresh market in 2007.
While data indicates that leafy green vegetable production is found in all 50 United States, evidence is that most production tends to be concentrated in the States of California, Arizona, Florida, New York, Texas, Georgia, and Colorado, and on farms that exceed the Small Business Administration (SBA) definition of a small agricultural producer. Under 13 CFR 121.201, the SBA defines “small” agricultural producers as farming operations having gross annual receipts of $750,000 or less. This is the threshold by which USDA analyzes the impact of the proposed marketing agreement on small producer entities. Farm data by States from the 2007 Census of Agriculture (Census), unavailable from other sources, has also been used in developing the recommended decision. However, the Census defines small producers as those with annual receipts of less than $250,000 and large producers as those with $250,000 or more. Thus, in some of the discussion and analysis in this recommended decision, the Census data cannot be reconciled with the SBA definition for small producers.
California and Arizona are the largest producing States of leafy green vegetables, with California alone accounting for 75 percent of total United States production in 2007, and Arizona representing 15 percent of total United States production in that same year. Evidence is that the remaining 10 percent of production is spread throughout the United States and tends to be sourced by handlers from small to mid-size farms.
For such farms, leafy green vegetable production commonly only represents a portion of these diversified farms' total production. According to the hearing record, a “diversified farm” is a farming operation that produces a variety of crops or animals, or both, on one farm, as distinguished from a producer who specializes solely in the production of leafy green vegetables.
Marketing Research Association (MRA) data presented at the hearing indicates that there were approximately 1,285 handlers of leafy green vegetables in the United States in 2009. This data is published in the Blue Book Marketing Research Service Directory (Blue Book), which can be found at
http://www.bluebook.org
.
According to the record, many small and mid-size producers also operate as handlers by way of their direct sales to consumers, foodservice operators, or retailers. Evidence is that the Blue Book likely does not account for many of these smaller producer-handler businesses because they are not directly engaged in the mainstream, conventional market. Therefore, record evidence indicates that the number of leafy green vegetable handlers in the United States that would qualify to participate as signatory handlers under the proposed agreement is more than 1,285. Record evidence is unclear, however, as to how many small producer-handler operations handling leafy green vegetables exist in the United States.
According to the record, the majority of leafy green vegetables handled in the United States are subject to seasonal contracts between producers and handlers, and these relationships are usually long-term. Typically, such contracts are prepared using quantity, weight, acreage, or price.
Any leafy green vegetable crop for sale in the market that is not covered under a contract is considered part of the cash, or “spot” market, where produce is sold for cash and delivered immediately. Small farms often sell directly to consumers at farmers' markets, roadside stands, and through community-supported agriculture (CSA) programs, as well as directly to smaller retailers and local foodservice operators. According to the record, these types of transactions are considered part of the spot market.
Evidence shows that some leafy green vegetables for the United States market are sold through produce auctions, where members of the auction maintain their membership through a contractual relationship with the auction organization. In this scenario, produce supplied by auction members is sold through the auction method, where prices obtained for the produce can fluctuate based on daily market supply and demand, and quality of produce. According to the hearing record, sales of leafy green vegetables made through a produce auction also are considered part of the spot market.
Production
USDA data presented at the hearing indicates that the value of leafy green vegetables grown for the United States fresh and fresh-cut market was $2.5 billion in 2008. The majority of United States leafy green vegetable production is accounted for by three lettuce crops (head, leaf, and romaine), spinach, and fresh cabbage. Of the 2008 production value, lettuce crops accounted for 79 percent, cabbage accounted for 15 percent, and spinach accounted for 7 percent, for a total of 81 percent. Other minor fresh leafy green vegetable crops, such as collards, escarole, endives and specialty varieties of kale, are produced regionally and seasonally. Evidence is that these crops are produced widely across the United States and are generally available throughout the year. Since 1997, United States production of major fresh leafy green vegetables has grown by almost 25 percent.
Major Fresh Leafy Green Vegetable Crops
At the time of the hearing, head lettuce production was estimated at 5.3 billion pounds. Even though head lettuce's average share of United States lettuce production has declined from an average of 77 percent during 1996 to 1998, to 56 percent from 2006 to 2008, head lettuce continues to represent the majority of total leafy green vegetable production in the United States. Iceberg lettuce is harvested year-round in California. Of the other States with large production of head lettuce, Arizona harvests in the winter, New Jersey harvests in the spring and fall, and Colorado harvests in the summer.
According to 2007 Census data, 1,158 farms harvested head lettuce from nearly 167,000 acres. Although the farms harvesting head lettuce were spread over 48 States, only three States reported harvesting more than 1,000 acres: California (118,676 acres), Arizona (39,187 acres), and Colorado (2,268 acres).
USDA statistical evidence presented at the hearing indicates that demand for lettuce has shifted away from head lettuce to romaine and other varieties of leaf lettuce. Leaf and romaine lettuce production from major States increased 125 percent between 1990 and 1999, and an additional 42 percent between 2000 and 2009. Total production of leaf and romaine lettuce for 2009 was estimated at 3.9 billion pounds accounting for 42 percent of United States lettuce production. Leaf and romaine lettuce are harvested year-round in California. Arizona is the other main producer of these lettuces in the winter. According to 2007 Census record data, 2,891 farms in all 50 States harvested leaf lettuce from approximately 59,000 acres. For romaine lettuce, the figures are 87,000 acres harvested from 1,057 farms in 49 States.
According to the hearing record, demand for fresh spinach resulted in
average production increases of over 6 percent per year since 1990, with production from major States estimated to have reached 513 million pounds in 2009. According to the 2007 Census, 1,121 farms in all 50 States harvested spinach for the fresh market from almost 30,000 acres. In 2007, the top producers of spinach for the fresh market were California (harvesting 18,000 acres), Arizona (harvesting 3,600 acres), Texas (harvesting 2,200 acres), Colorado (harvesting 1,900 acres), and New Jersey (harvesting 1,500 acres). These States accounted for 94 percent of the fresh spinach acreage. Seasonal production data indicates that California harvests spinach throughout the year. Arizona and Texas harvest in the winter, Colorado harvests in the summer, and New Jersey harvests in the spring and fall.
Production increases for fresh cabbage have been significantly less than for lettuce and spinach over the past 20 years, but do indicate a steady increase in demand for fresh cabbage. Production averaged 2.3 billion pounds in the 1990s, 11 percent higher than the average for the 1980s. For the 10-year period between 2000 and 2009, fresh cabbage production in major States averaged 2.4 billion pounds, 4 percent higher than the 1990s average.
In 2007, 88 percent of harvested cabbage acreage was for fresh use. In 2007, the top 5 State producers of cabbage for the fresh market were California (harvesting 14,000 acres), New York (harvesting 10,300 acres), Florida (harvesting 9,800 acres), Texas (harvesting 6,800 acres), and Georgia (harvesting 6,600 acres), and accounted for 67 percent of United States total fresh cabbage production. Other States that produce large quantities of fresh cabbage include North Carolina, Wisconsin, and Arizona. According to the 2007 Census, 3,986 farms in all 50 States harvested cabbage for the fresh market from approximately 71,000 acres. Of the States with large production of fresh cabbage, Florida, Georgia, and Texas harvest in the winter and spring, California harvests year round, and New York harvests in the summer.
Minor Fresh Leafy Green Vegetable Crops
The 2007 Census included limited data for the following leafy green vegetables for the United States market: Chinese cabbage, escarole & endive (data combined), kale, and mustard greens.
According to hearing record evidence, there were a total of 618 farms growing Chinese cabbage on a total of 11,471 acres in 2007. The top producing States for Chinese cabbage include California (harvesting 5,593 acres on 111 farms), Florida (harvesting 3,206 acres on 40 farms), New Jersey (harvesting 981 acres on 27 farms), Texas (harvesting 517 acres on 7 farms), and Hawaii (harvesting 271 acres on 53 farms).
For escarole and endive, the 2007 Census numbers reported for national acreage and numbers of farms are 3,169 and 132, respectively. The top producing States for these crops are California (harvesting 1,974 acres on 28 farms), New Jersey (harvesting 546 acres on 32 farms), Florida (harvesting 402 acres on 7 farms), Ohio (harvesting 164 acres on 4 farms), and New York (harvesting 75 acres on 13 farms).
For kale, the 2007 Census numbers reported for national acreage and numbers of farms are 3,784 and 946, respectively. The top producing States for these crops are California (harvesting 1,077 acres on 96 farms), North Carolina (harvesting 363 acres on 64 farms), Texas (harvesting 214 acres on 13 farms), Colorado (harvesting 84 acres on 12 farms), and Ohio (harvesting 76 acres on 28 farms).
For mustard greens, the 2007 Census numbers reported for national acreage and numbers of farms are 7,013 and 848, respectively. The top producing States for these crops are California (harvesting 1,902 acres on 87 farms), Georgia (harvesting 1,585 acres on 36 farms), South Carolina (harvesting 581 acres on 35 farms), Texas (harvesting 470 acres on 61 farms), and Michigan (harvesting 308 acres on 29 farms).
Consumption
According to the hearing record, annual per capita lettuce consumption in the United States was 21 pounds in the 1960s, 24 pounds in the 1970s, and 25 pounds in the first half of the 1980s. Since the late 1980s, lettuce consumption has averaged about 30 pounds per person, an increase of 40 percent compared to the 1960s. The type of lettuce consumed has changed over this period of time. Historically, head lettuce has accounted for the majority of national leafy green vegetable consumption. While still representing the majority of leafy green vegetable production volume, evidence is that consumer demand for head lettuce is slowly shifting toward other leafy green vegetable crops. Evidence is that demand is shifting to leaf lettuce, romaine, spinach, and specialty crops.
Consumption of head lettuce decreased from 23.5 pounds per person in 2000 to 16.9 pounds per person in 2008. At the same time, consumption of leaf and romaine lettuce increased from 8.4 pounds per person in 2000 to 11.1 pounds per person in 2008. Consumption of spinach peaked in 2005 at 2.3 pounds per person, and has remained at most 15 percent below peak consumption since the E. coli outbreak in 2006. Average per capita consumption of spinach was forecasted at 1.6 pounds per person for 2009. Cabbage consumption has remained steady since 2004, oscillating from 8.1 pounds per person in that year to 7.8 pounds per person in 2005-06 to 8.2 pounds per person in 2009.
Leafy Green Vegetable Imports and Exports
According to data submitted into evidence, the United States is the second largest producer of leafy green vegetables in the world, accounting for roughly 22 percent of global production in 2009. China is the world's largest leafy green vegetable producer, with a world market share equal to 51 percent in 2008.
Witnesses explained that United States leafy green vegetable producers compete on both a domestic and international level with foreign leafy green producers. Since 2002, Mexico has been the largest exporter of leafy green vegetables to the United States, followed by Canada, Peru, and Israel. In 2006, Mexico exported 118 million pounds of leafy green vegetables to the United States. During the same period, Canada, Peru, and Israel exported 52 million pounds, 1.2 million pounds, and 365,000 pounds, respectively. In 2006, the United States exported slightly less than 12 percent of its leafy green vegetable production.
Even though China consumes the majority of its leafy green vegetable production, witnesses stated that China is the main competitor to United States leafy green vegetable exports to Asian markets. Although Japan and India both are top ten global producers of leafy green vegetables, neither country exports more than 0.1 percent of the leafy green vegetables that they produce.
Mexico is the largest producer of leafy green vegetables in Latin America and was the ninth largest global producer in 2006. Its proximity to the United States market makes Mexico a competitor in both the United States and Mexican markets, in addition to other Latin American markets. Witnesses also explained that some of the leafy green vegetables from Mexico are produced by United States companies operating in both countries.
Major producers and exporters in the European Union are Spain and Italy. Both Spain and Italy produced approximately 2 million pounds of leafy
green vegetables annually from 2000-2006. Total exports from Spain and Italy average 45 percent and 10 percent of their respective leafy green vegetable production.
Record evidence from the hearing illustrates that the handling of United States grown leafy green vegetables is multi-State, regional, national, and international in scope. Within the United States, the handling of leafy green vegetables in one State exerts an influence on all other handling of leafy green vegetables within the production area. Additionally, the handling of imported fresh leafy green vegetables also impacts interstate commerce and foreign commerce. Record evidence is that imported leafy green vegetables are widely distributed throughout the United States market alongside domestic leafy green vegetables. Moreover, record evidence is that sometimes imported product is co-mingled with domestic product prior to its distribution in United States markets. Thus, the evidence shows that the handling of leafy green vegetables for the United States market, whether the leafy green vegetables are produced domestically or imported, is in the current of interstate and foreign commerce and directly affects such commerce.
Material Issue Number 2—The Need for a National Leafy Green Vegetable Marketing Agreement
The record evidence demonstrates that there is a need for the proposed program to regulate the handling of leafy green vegetables, and that such a program would improve quality by minimizing the occurrence of microbial contamination of those vegetables. If implemented, the proposed program would provide for the establishment of audit metrics and verification audits of all product handled by signatory handlers within the United States. Any audit metrics developed under the proposed program would reflect FDA good agricultural practice guidelines (GAPs) and FDA fresh product manufacturing regulation (GMPs). Any regulation would also take into account leafy green vegetable industry stakeholder interests and concerns regarding varying production and handling environments across the nation. Furthermore, the proposed program would assist in stabilizing market conditions if a contamination event were to occur, and would increase consumer confidence in the quality of leafy green vegetables.
While participation in the proposed program would be voluntary, any handler becoming a signatory to the agreement would be subject to mandatory compliance. The proposed program would also cover any imported leafy green vegetables handled by signatory handlers. According to record evidence, foreign producers and handlers doing business with signatory handlers would be required to meet equivalent audit metrics as in effect for the domestic industry.
USDA Inspection Service would serve as the primary auditing authority to conduct verification audits under the proposed program. USDA Inspection Service would also have the authority to designate other entities approved or recognized by USDA to conduct audits on its behalf.
According to the hearing record, there are no national, mandatory food quality or safety regulations for the growing and handling of fresh leafy green vegetables. There are, however, FDA guidelines that are commonly used by leafy green vegetable producers and handlers in their development of private or customer-driven food safety plans. These guidelines are: The “Guide to Minimize Microbial Food Safety Hazards for Fresh Fruits and Vegetables” (1998), and the “Guide to Minimize Microbial Food Safety Hazards for Fresh-cut Fruits and Vegetables” (2008). According to the hearing record, these guidelines jointly comprise what are referred to as “Good Agricultural Practices” or “GAPs”. In 2009, FDA published a draft set of commodity specific guidelines for leafy green vegetables, the “Commodity Specific Food Safety Guidelines for Lettuce and Leafy Greens Supply Chain”. These guidelines have not been finalized yet and, therefore, are not being actively used in the industry.
Mandatory FDA regulation does exist for manufacturers of fresh-cut leafy green vegetables. Manufacturers alter leafy green vegetables from their fresh form into a fresh-cut form. FDA regulations regarding the manufacturing of fresh-cut leafy green vegetables are found in 21 CFR Part 110. According to the record, these regulations are commonly referred to as Good Manufacturing Practices (GMPs).
The AMS, in partnership with State departments of agriculture, offers a voluntary, audit-based program that verifies adherence to the two FDA guidelines identified above. Under AMS's Good Agricultural and Good Handling Practices Audit Verification Programs, the FDA GAPs guidelines are divided into two specific programs: GAPs verification audits, which examine farm practices, and Good Handling Practices (GHPs), which concentrate on packing facilities, storage facilities, and wholesale distribution centers. The AMS programs are not mandatory. However, according to the hearing record, many commercial purchasers of leafy green vegetables require their vendors to be audited under one of the above mentioned programs.
There are two State programs that have been established specifically for the purpose of regulating the handling of fresh leafy green vegetables. These programs are found in California and Arizona.
The California Leafy Green Products Handler Marketing Agreement became effective February 10, 2007. Record evidence indicates that, at the time of the hearing, 99 percent of leafy green vegetables produced and handled in California were subject to the State program. In October 2007, a similar program was implemented in Arizona: The Arizona Leafy Green Products Shipper Marketing Agreement. Evidence is that approximately 75 percent of the leafy green vegetables produced and handled in Arizona were being regulated under that State's program at the time of the hearing. While both the California and Arizona programs are voluntary, the requirements of these State marketing agreements are mandatory for all signatories within each respective State.
Proponents of the proposed agreement stated that a national program would allow for the coordination of audit verifications for all fresh leafy green vegetables at a national level and would allow for continuity of product quality as it moves between States.
While proponents acknowledged that leafy green vegetable GAP and GHP programs have been designed and implemented in cooperation with the USDA Inspection Service in two States (Arizona and California), they argued that the development of a national program was necessary. Proponents stated that a national program would minimize the potential for contamination of fresh leafy green vegetables in all States where they were produced or handled, not just California and Arizona. According to the record, participation in the two State programs represents roughly 99 and 75 percent of production in California and Arizona, respectively, but participation of production outside of those two States is inconsistent and limited. Proponents explained that producers and handlers who currently undergo GAP or GHP audit verifications outside of the States of California and Arizona primarily do so either electively or at the request of their buyers.
Proponents explained that a fresh leafy green vegetable may be grown in one State, shipped to another State for washing and preliminary handling, and then shipped to a third State for further processing and packaging prior to that product reaching consumers. For this reason, proponents stated that consistency in good agricultural and handling practices were needed in all States in which leafy green vegetables are grown or handled. Proponents stated that national coordination of such practices is needed to maintain the integrity of product quality, including minimizing the potential for microbial contamination.
For example, the California Leafy Green Products Handler Marketing Agreement does not cover lettuce or leafy green vegetables grown outside of California. It does not have the authority to send inspectors to audit growers or handlers in another State. Therefore, if a handler who is based in California receives product from outside the State, that product may not be required to meet the GAPs or GHPs. According to the proponents, the development of a national GAP and GHP program for leafy green vegetables based on FDA guidelines would foster consistency in agricultural and handling practices across all States.
Proponents explained that FDA-based GAPs and GHPs provide general guidance on critical steps within the growing, harvesting, transportation, cooling, packing, and storage of fresh produce where food safety might be compromised. FDA guidelines alert producers and handlers to critical areas within the production and handling of fresh leafy green vegetables that present potential for microbiological contamination. FDA guidelines do not, however, describe the actions that need to be taken by producers or handlers within their individual businesses to meet the guidance benchmark. Proponents explained that guidance of this kind is established in the form of “audit metrics”.
For example, FDA guidelines state that mechanical or machine harvest has become increasingly prevalent and that this activity leads to increased surface contact exposure of leafy green vegetables with components of the harvest machinery. FDA guidelines identify surface contact in mechanical harvesting as a critical step. One of the guidelines offered by FDA to reduce the potential for contamination at this critical step includes establishing appropriate measures that reduce, control, or eliminate the potential introduction of human pathogens at the cut surface during and after the mechanical harvest operation. Under the proposed program, audit metrics would be developed to identify actions that would meet this guideline, such as equipment cleaning schedules and requirements for harvest workers to use gloves or other protective clothing.
According to proponents, if the proposed program were implemented, its administrative body would have authority to recommend “audit metrics”. Witnesses explained that audit metrics are standards or steps within a production or handling system at which some action or measure should be taken to minimize the potential for microbial contamination. The standards or steps within a production or handling system at which action or measures are taken are also referred to as “control points” of a “process control”. It was further explained that any “audit metrics” established under the proposed program would represent a set of auditable standards or requirements within a process control that would allow an auditor to determine if a producer or handler is in compliance with the program.
While proponent witnesses supported the need for a uniform verification audit program, they also supported the development of a program that recognizes differences among producers and handlers across regions in the production area. For example, differences in water sources, geography, climate, or size of operation could require slight variations in the types of actions needed to be taken for a producer or handler to be compliant under the proposed program.
It also was argued that the proposed agreement should allow for the development of audit metrics that are reflective of current industry practices and are scientifically-based. According to the record, standardization of production and handling audit metrics would result in increased efficiencies and reduced costs related to multiple buyer-specific requirements. Proponents explained that usage of current industry practices was important for two reasons. First, current practices for organic handling operations are likely different from conventional handling operations. However, the audit metric established for each respective type of handling operation should result in both operations meeting the FDA guidelines and complying with the proposed program.
Secondly, proponents advocated that audit metrics be supported by current scientific research accepted within the professional and academic scientific community. Proponents stated that the proposed program would positively address the increasingly common practice among fresh produce buyers to develop their own food safety requirements for producers and handlers. According to the hearing record, these requirements often differ from buyer to buyer, resulting in a complex web of private standards that producers and handlers need to adhere to in order to sell their product.
Implementation of these varied requirements is costly to the producer and handler, and is often redundant. Moreover, many witnesses testified that some buyer requirements are not scientifically justified and, in turn, have led to production and handling practices that challenge existing industry technology or are contra-indicated to findings of current scientific research.
To this end, proponents expressed the importance of including input from stakeholder groups including, but not limited, to organic producers and handlers, small businesses, and natural resource interest groups. Additionally, proponents stated that members of the professional and academic community should be represented in the audit metric development process.
Proponents argued that because the handling of imported fresh leafy green vegetables impacts domestic commerce, foreign product handled by signatories should also be regulated. As discussed in Material Issue 1, imported leafy green vegetables are widely distributed throughout the United States market alongside domestic leafy green vegetables. Moreover, record evidence shows that imported product can be co-mingled with domestic product prior to its distribution in United States markets.
Witnesses explained that if microbial contamination were to occur during the growing or handling of foreign leafy green vegetables imported by United States handlers and consumed by United States consumers, the United States fresh leafy green vegetable industry would suffer economic losses regardless of the origin of the contaminated product. Witnesses stressed the importance of having a Federally-regulated program through which the industry could stabilize any negative market impacts, and proactively address consumer confidence with regard to domestically handled leafy green vegetables, if such an event were to occur.
According to the hearing record, the regulation of imported product handled by signatory handlers would ensure that both domestic and foreign product was held to the same, or equivalent, good agricultural and handling practices. This would allow for consistency of
product quality among participants of the proposed program.
Proponents stated that it is critical for the industry to improve and ensure the safety and quality of leafy green vegetables. The relationship among quality, consumer demand, and producer returns was demonstrated at the hearing. Furthermore, the correlation between product quality and the absence of microbial contamination was clearly defined.
Witnesses testifying at the hearing used the example of the September 2006, multi-state outbreak of E. coli linked to fresh spinach grown in California's Salinas Valley. According to the record, the resulting recall was the largest ever for the fresh leafy green vegetable industry. Investigations by FDA and the California Department of Health Services, in cooperation with the Centers for Disease Control and Prevention, and USDA Animal and Plant Health Inspection Service, concluded that E. coli contamination might have been attributed to environmental factors in the production area.
Witnesses who were impacted by the recall stated that consumer demand for fresh spinach dropped by more than 60 percent immediately following FDA's public alerts. Witnesses also explained that after the contamination had been linked to California, consumer consumption of spinach remained at record lows regardless of the State within which it was produced. According to record evidence, consumer demand for spinach remains below pre-2006 levels.
Proponents used the 2006 E. coli outbreak, and the subsequent damage to consumer confidence and demand for leafy green vegetables, to demonstrate that a contamination event in one State can impact industry participants nation-wide. Witnesses stressed the need to have a regulatory system in place as a means of minimizing the potential for future contamination events. Witnesses also expressed the usefulness of having a Federally regulated program to facilitate the rapid identification and containment of contamination events if they occur. Proponents explained that such a national program would safeguard consumers, as well as provide the leafy green vegetable industry with a mechanism to address potential loss of consumer confidence in product quality.
According to record evidence, USDA has several programs—namely the Qualified Through Verification and the GAPs and GHPs Audit Verification Programs—that provide independent verification that growers and handlers are following FDA's guidance and commodity-specific best practices.
Proponents further stated that USDA and FDA have an established working relationship on food quality programs. For example, AMS offers the GAPs and GHPs Fresh Produce Audit Verification Program, a voluntary, audit-based program for the fresh produce industry based on the FDA's “Guidance to Minimize Microbial Food Safety Hazards for Fresh Fruits and Vegetables”, and also coordinates Inspection Service audits under both the California and Arizona leafy green vegetable marketing agreements.
Witnesses in favor of USDA oversight also cited the history of interagency cooperation. As an example, witnesses at the hearing referred to the USDA and FDA co-sponsorship of the National Advisory Committee on Microbiological Criteria for Foods by the Food Safety and Inspection Services, along with other Federal agencies such as the Centers for Disease Control and Prevention.
Witnesses opposed to the proposed program, as well as those who voiced the need for revisions to the proponents' proposal, expressed apprehension over the ability of program administrators to collaborate with stakeholder interest groups. Specifically, witnesses were concerned that the development and recommendation process of audit metrics would not take into consideration differences between conventional and organic production and handling practices, as well as scale of business operations. Other areas of particular concern noted during the hearing include topics such as conservation practices and natural resource management.
These witnesses also explained that regulatory jurisdiction over some of these topics is shared by multiple Federal, State, and local government agencies, and stated the need to include representatives from these regulatory agencies in the audit metric development process. It was argued that their involvement would mitigate the potential for conflicting requirements being placed on producers or handlers that are subject to multiple sets of standards and compliance issues.
Some witnesses opposed to the proposed program expressed concern that its implementation would lead to further proliferation of private sector standards. These critics argue that the current California and Arizona State programs have had little positive impact on the reduction of private standards in those States since their implementation.
While many witnesses testified at the hearing that a relationship between product quality and food safety does exist, some stated that a regulatory program would be better placed under FDA oversight, or perhaps under a system of State regulatory programs.
Critics of USDA oversight of such a program stated that USDA lacks the scientific expertise needed for the development and implementation of a science-based regulatory program for food safety. Critics also explained that their understanding of the mission of AMS is to facilitate the marketing of agricultural products and therefore should not be involved in the oversight of quality as it relates to food safety issues. These witnesses stated that monitoring of food safety is not relevant to food quality and should not be included under the purview of marketing and market stability.
Others witnesses stated that individual State departments of agriculture would be better equipped at addressing the particular needs and unique characteristics of their producer and handler constituents. Witnesses in favor of State regulatory programs argued that the implementation of a national program would result in a “one-size fits all” Federal regulatory program. These witnesses believe that regulation would be developed to reflect the agricultural practices of regions producing the most volume of leafy green vegetables to the detriment of regions producing less volume.
Lastly, concerns were raised during the hearing process and in the post-hearing briefs submitted over the development process of any audit metrics applied to foreign production or handling operations. Witnesses also raised questions over the proposed agreement's ability to recognize foreign GAPs, GHPs and GMPs programs, foreign auditing services, or independent third-party auditing services currently in operation both domestically and internationally.
Based on hearing record evidence, USDA concludes that there is a need for a national program to regulate the handling of leafy green vegetables. The evidence supports that the proposed program would allow a uniform baseline of regulation to be proficiently administered throughout the complex and diverse leafy green vegetable industry. The proposed program should allow for participation and compliance among the diverse community of growing and handling operations across the United States.
Through the proposed program, leafy green vegetable industry stakeholders could work cooperatively together to develop and recommend a uniform, auditable, science-based food quality
verification program. Furthermore, audit oversight conducted by the USDA Inspection Service or USDA approved or recognized entities in coordination with current FDA guidelines, would benefit the industry and would be in the best interest of consumers. Finally, the proposed agreement would tend to effectuate the declared policy of the Act.
Material Issue Number 3—Definition of Leafy Green Vegetables and Production Area
The proposed agreement should provide for the definition of the commodity and the area that would be regulated. Terms related to the commodity to be covered by the proposed agreement, such as “fresh” and “fresh-cut” should also be defined.
Leafy Green Vegetables
The proponents testified that leafy green vegetables are short-lived herbaceous plants that are eaten raw. Most leafy green vegetables are produced in raised beds that are either directly seeded or transplanted with plugs (immature plants). Leafy green vegetables produced for fresh market production are harvested either as single leaves or as whole plants. Some types of leafy green vegetables, such as chard, kale, mizuna, and baby leaf lettuce may be harvested multiple times in a crop year. Record evidence pertaining to the leafy green vegetables included in the definition follows.
Arugula, a member of the
Brassicaceae
family of plants, has three species that are used for human consumption: the annual species—
Eruca sativa
(domesticated) and
Eruca sativa vesicaria
(L.) Cav. (wild-type); perennial species—
Diplotaxis tenuifolia
(L.) DC; and a polyploidy perennial
Diplotaxis muralis
(L.) DC. Arugula is a low-growing annual that is commonly called rocket, roquette (French), rughetta, and rucola (Italian). If arugula is marketed as a single commodity, it is usually bunched and packed into cartons in the field. Arugula that is for the fresh-cut market is shipped from the field to the processing facility in bulk containers.
According to record evidence, arugula produced in Arizona is primarily produced for value-added packaged salad mixes. In this example, the plants are not thinned after sprouting and are harvested as immature arugula. This differs from producers in New Jersey, who generally harvest, wash, and bundle their crop, and sell it as a single commodity at local produce auctions in wholesale units of 24 bunches per crate. Record evidence indicates that small producers who produce arugula generally sell their crop in bunches directly to customers at farmers' markets.
Cabbage, one of the most consumed vegetables in the world, is a member of the
Brassica oleracea
species (
Capitata
Group) of the family
Brassicaceae.
Cabbage is produced year-round in all 50 States. A mature head of cabbage generally weighs 3-5 pounds, depending on the variety. Cabbage produced for the fresh market is harvested by hand and packed 18-24 heads per carton.
Chard (
Beta vulgaris var. cicla
) is a member of the
Amaranthaceae
family of plants that is commonly called Swiss chard in the United States. It is the same species as beetroot. Stems of the chard plant vary from white to red and yellow depending on the variety. If only mature leaves are harvested, chard will continue to be productive for up to a year. Leaves are typically bunched in the field during harvest. Immature or baby leaves may be added to packaged salad mixes.
Cilantro (
Coriandrum sativum
) is an annual herb in the family
Apiaceae
that is also called Chinese or Mexican parsley in the United States. In Florida, cilantro is produced for the fresh-cut market between late September and May, whereas in California it is produced year-round. Hand-harvested cilantro is sold in bunches tied with a rubber band or twist tie. Conventional packing is 30 bunches in 10 pound boxes.
There are three major cress species known in North America: Garden cress, Upland cress, and watercress. All are members of the family
Brassicaceae.
Garden cress (
Lepidium sativum
), also called peppergrass, pepper cress, or pepperwort, is a fast-growing plant. Introduced to the United States from China, it is botanically related to mustard and watercress and is sometimes referred to as an herb. Garden cress is commonly used in salads as a “baby green”. Upland cress (
Barbarea verna
) is native and grows wild in the southeast; it is often called creasy greens, highland creasy, or creasy salad. Watercress (
Nasturtium officinale, N. microphyllum
) is a fast-growing aquatic or semi-aquatic perennial plant. It is thought to be one of the oldest known leafy green vegetables consumed by humans.
Dandelion is produced commercially in the United States from two species,
Taraxacum officinale
and
Chichorium intybus,
both belonging to the
Asteraceae
family. A perennial herbaceous plant, dandelions are native to North America and produced as weeds worldwide. Dandelion use as a fresh leafy green is growing in popularity.
Endigia is a new variety of forced red chicory that is a cross between Belgian endive and two varieties of radicchio—Chioggia and Verona.
Endive (
Cichorium endivia
) is a leafy green belonging to the large
Asteraceae
family. There are two main varieties of endive, curly endive, or frisee (var.
crispum
), and escarole (var.
latifolia
). The leaves from endive are harvested by hand and tied in bunches before being packed into cartons. Belgian endive (
Cichorium intybus
var.
foliosum
) is also known as witloof in the United States.
Kale is a member of the
Brassica oleracea
species (
Acephala
Group) with common varieties of green kale, red kale, red Russian kale, and Lacinto or dinosaur kale. At harvest, two cuttings may generally be taken from one seeding. If harvested as an immature leaf, kale is often co-mingled with other immature or baby leaf variety leafy green vegetables in salad mixes. Mature kale is typically cooked prior to eating. However, witnesses testified that mature kale is often used on salad bars for decoration, so it comes into contact with other leafy green vegetables in that context.
Lettuce (
Lactuca sativa
) is produced in all 50 States and is highly perishable. Lettuce crops include head, leaf, and romaine. Common varieties of head lettuce (
Lactuca sativa
var.
capitata
) are iceberg (also called crisphead) and butterhead (also called Boston, bibb, buttercrunch, or Tom Thumb). During harvesting in Arizona and California, outer leaves are stripped from the lettuce heads before boxing. Head lettuce sold fresh is boxed 24 heads to a carton—either naked or film-wrapped. Head lettuce that will be further processed is shipped in bulk to the processing facility where it is washed, cored, shredded, and/or cut and packaged as ready-to-eat products. Leaf lettuce (
Lactuca sativa
var.
crispa
) has steadily grown in popularity in the United States in the past 15 years. Common leaf lettuce varieties are red leaf, green leaf, and baby leaf or salad/spring mix. At harvest, leaf lettuce is generally naked packed 24 to a carton. Romaine lettuce (
Lactuca sativa
var.
longifolia
), also called Cos lettuce, is generally loosely packed.
Mâche (
Valerianella locusta
) is a small annual plant of the family
Valeriancaceae.
It is also called corn salad, Lewiston cornsalad, lamb's lettuce, lamb's tongue, field lettuce, field salad, rapunzel, and fetticus.
Parsley (
Petroselinum crispum
) is a biennial green leaf herb that is a member of the family
Apiaceae.
Parsley
is available in two varieties—curly leaf and Italian or flat leaf. Parsley is harvested by cutting 1.5-2 inches above ground so that re-growth may occur, allowing for three to four cuttings per planting.
Radicchio, a type of chicory (
Cichorium intybus
var.
foliosum
), is a member of the family
Asteraceae.
Sometimes called Italian chicory, varieties of radicchio are named after the regions of Italy from which they originate. The most common variety of radicchio found in the United States is Radicchio di Chioggia. Other lesser known varieties available are Radicchio di Treviso, Tardivo, and Radicchio di Castelfranco. In Italy, radicchio is often grilled or roasted, but in the United States it is most often used as a colorful addition to leafy green salad mixes. The United States also imports radicchio from Italy and Chile.
Spinach (
Spinancia oleracea
) is a hardy leafy green vegetable that is produced in all 50 States. There are several different varieties of spinach that are classified according to leaf shape and texture. Varieties include savoy, which has wrinkled leaves, semi-savoy, and varieties with smooth or flat leaves. Savoy types are sold mainly for fresh market uses, while types with smooth or flat leaves are used mainly for processing. The growing season varies by location, and leaves may be cut as often as four times during a crop year. Spinach is sold in bunches or as loose leaf in cellophane packaging to food service and retail outlets.
Tat soi (
Brassica rapa
var.
rosularis, Narinosa
group) is an Asian leafy green vegetable and a member of the
Brassicaceae
family.
Winter purslane (
Claytonia perfoliata
) is a member of the
Portulacaceae
family. Also known as Cuban Spinach and Miner's lettuce, winter purslane is an annual plant.
Proponents and other witnesses testified that they believe this is a comprehensive list of the leafy green vegetables produced in the United States and available in the market. However, new varieties of lettuces and other leafy greens appear in the market on an annual basis. Those varieties would be covered by the proposed agreement. Similarly, witnesses testified that “baby leaf” or “baby greens” are a seed variety that is to be harvested and marketed as a vegetable, rather than being an immature version of a leafy green vegetable. These varieties would also be covered by the program. The definition of leafy green vegetables should be revised to clarify that all varieties of the listed items would be covered.
Some witnesses supported adding mustards and herbs to the proponents' definition. However, record evidence does not support extending program coverage to those items. Proponents testified, for example, that mustards were not included in the definition of leafy green vegetables because they are normally cooked prior to consumption.
The proponents supported including “spring mix” in the definition of leafy green vegetables. However, the record evidence is that spring mix is not a single commodity, but a mixture of a variety of leafy green vegetables. Proponents and other witnesses testified that there is no universal, standard ingredient blend for spring mix. A spring mix typically includes, but is not limited to, arugula, chard, cress, lettuce, and radicchio. It also includes baby leaf items such as cress, dandelion, endiga, mache, mizuna, tat soi, and winter purslane. While the list of leafy green vegetables includes most items commonly used in a spring mix, signatory handlers who produce a spring mix would need to ensure that all ingredients of their spring mix are produced and handled in accordance with the terms of the proposed agreement.
The proposed agreement is intended to cover all mixes (such as spring mix and other salad blends) of leafy green vegetables. The definition of leafy green vegetables is revised to clarify this point by adding a new paragraph (b). In a related matter, sometimes salad mixes contain items that are not leafy green vegetables, such as carrots or dressings. These items would not be covered by the agreement. Such language is being added to the definition of leafy green vegetables as a new paragraph (c). (This provision appeared in § 970.8 of the proponents' proposal, but that section of the proposed agreement is being deleted as unnecessary.)
Some witnesses stated that the program should apply only to fresh-cut leafy green vegetables. These witnesses cited that there is a different safety risk for leafy green vegetables produced for fresh-cut versus the fresh market. Other witnesses with generally the same viewpoint stated that the list of leafy green vegetables presented by the proponents was too broad and should provide an exception for leafy green vegetables that require cooking.
Based on hearing record evidence, all leafy green vegetables included in the proposed definition that are handled by signatory handlers and that are intended for human consumption in the fresh form (whether fresh-cut or not) should be covered under the proposed agreement. Record evidence demonstrates that the movement of leafy green vegetables from producers to handlers is fluid and that oftentimes it is difficult to anticipate what the end use of a harvested field will be. Moreover, record evidence supports that the opportunity for microbial contamination exists throughout the industry at the production, harvesting, handling and processing stages. Therefore, coverage of all leafy green vegetables, whether in their fresh or fresh-cut form, is necessary and is in the best interest of consumers.
Regarding witness requests to exempt leafy green vegetables that require cooking prior to human consumption, this exemption is unnecessary as the proposed program would only cover leafy green vegetables intended for consumption in their raw or uncooked form. This is because the process of cooking is identified as a “kill step” in food safety guidelines and is believed to eliminate contamination.
Lastly, the record evidence supports the authority for the Board, with the approval of the Secretary, to add and remove leafy green vegetables from the definition as deemed necessary. This authority would enable the program to adapt and change to the needs of the leafy green vegetable industry. Any change would require that the Board approve such a recommendation at a public meeting and then submit the recommendation to the Secretary for review. If appropriate, USDA would initiate rulemaking.
In summary, the definition of “leafy green vegetables” that appeared in the Notice of Hearing as § 970.15, is revised as discussed above and redesignated as § 970.18.
Fresh
Proponents and other witnesses stated that “fresh” means any leafy green vegetable in the raw or natural form. Proponents described the many different ways that leafy green vegetables are harvested fresh in the field. One witness described how cilantro could be harvested using any of three different methods: (1) Cut the foliage 1-2 inches above the crown (the most common method); (2) cut the whole plant just below the soil; and (3) bulk harvest into bins using a mower and conveyor. Another witness provided the example that a head of lettuce that is field-cored and wrapped in the field is considered a raw agricultural commodity in a package. Both of these examples demonstrate that while harvesting involves cutting the foliage growth from the stem or crown of the plant, such cutting does not
constitute the creation of a fresh-cut leafy green vegetable.
The term “fresh” was used often as witnesses discussed GAPs and GHPs, since both pertain only to the fresh commodity. Thus, based on record evidence, a new definition § 970.9, “fresh” is added to the proposed agreement. This is necessary to identify and describe how fresh leafy green vegetables are different from fresh-cut leafy green vegetables.
Fresh-Cut
Proponents proposed a definition of “fresh cut” to mean fresh leafy green vegetables that have been altered from their natural form by cutting, dicing, peeling, slicing, chopping, shredding, coring, or trimming, with or without washing prior to being packaged for use by the consumer, foodservice industry, or a retail establishment. Proponents provided examples of fresh-cut leafy green vegetables by citing lettuce that is shipped in bulk to the processing facility where it is washed, cored, shredded or cut, and packaged as ready-to-eat bagged salads. It was noted that this process would also apply to cabbage.
Section 970.7 is revised for clarification and redesignated as § 970.10.
In addition, proponents proposed a definition in the Notice of Hearing as § 970.8, “fresh-cut, packaged leafy green product”. However, witnesses testified that this term means the same as the definition of “fresh-cut”. This definition is being removed from the proposed agreement as unnecessary. Likewise, the definition of “Packaged” that appeared in the Notice of Hearing as § 970.18 is deleted as unnecessary.
Production Area
The term “production area” should be included in order to identify the area in which the proposed program would be applicable. According to the hearing record, the production area should include the fifty of the United States and the District of Columbia.
Proponents testified that the intent of the proposed program is to put into effect a national, standardized system to increase quality by minimizing microbial contamination of leafy green vegetables intended for raw or uncooked human consumption in the United States. Furthermore, the proposed program would assist in stabilizing market conditions if a contamination event were to occur, and would increase consumer confidence in the quality of leafy green vegetables.
According to record evidence and as discussed in Material Issue 1, leafy green vegetables are produced and handled year-round in all 50 States and the District of Columbia. Handlers in the United States may acquire leafy green vegetables that are produced in one State, manufactured in another State, and shipped nationally for consumption by consumers. Additionally, witnesses stated that some handlers have production or manufacturing operations, or both, in multiple locations throughout the United States. Thus, the national scope of the leafy green vegetable industry supports defining the production area as all 50 States and the District of Columbia.
Lastly, the production area and the zones into which it would be divided would determine the eligibility of persons to serve on the Board. The proposed program would require that all handlers, producers, and at-large members are located within the production area. The topic of the division of the production area into zones and Board membership are further discussed in Material Issue 5(b).
Based on the hearing record, the term “production area” should be defined to mean all 50 States and the District of Columbia of the United States of America. The definition of “production area” that appeared in the Notice of Hearing as § 970.23 is redesignated as § 970.28.
Material Issue Number 4—Persons and Activities To Be Regulated
Certain terms should be defined to identify the persons and the activities that would be regulated under the proposed agreement. The proposed agreement would regulate the act of handling leafy green vegetables in the production area by those handlers would voluntarily agree to adhere to the agreement requirements. As such, the following terms should be defined: “handle”, “handler”, “importer”, “manufacture”, “manufacturer”, “signatory first handler”, and “signatory handler.”
According to record testimony, within the leafy green vegetable industry, businesses in the farm to fork continuum include growers/producers, handlers (commonly known as processors, shippers, packers), wholesalers/distributors, agents/brokers, exporters/importers, retail outlets such as grocery stores, and foodservice providers. Small farms as defined by SBA commonly sell their leafy green vegetables directly to consumers at farmer markets, through Community Supported Agriculture (CSA) programs, or to retailers. Record testimony indicates that large farm operations usually sell their leafy green vegetable crops to handlers or directly to retailers at wholesale produce auctions.
Record testimony indicates that there basically are two types of handlers “first handlers” and “secondary handlers” or handlers other than first handlers. “First handlers” take possession of leafy green vegetables and may process and package leafy green vegetables before selling to other handlers or retailers. “Secondary handlers” such as manufacturers—the record indicates—commonly buy from first handlers. However, such handlers also could buy directly from producers.
According to record testimony, handling generally begins when the harvested leafy green vegetable crop leaves the field and is in the possession of the handler. Record testimony also indicates that fresh leafy green vegetable crops may change hands as many as three times through handling activities before reaching its final destination.
According to record evidence, the term “handle” should be defined to mean “receive, acquire, sell, process, ship, distribute, or import leafy green vegetables. The record indicates that “handle” should not include retail sales, foodservice sales, or brokering of such leafy green vegetables. According to record evidence, the act of handling places leafy green vegetables or products into the current of commerce both within the production area, and between the production area and any point outside that area. As such, “handle” which appeared in the Notice of Hearing as § 970.11 should be redesignated as § 970.14, and revised slightly for clarity.
“Handler” should be defined to mean any person who handles leafy green vegetables. The record indicates that a handler could be an individual, joint venture, partnership, corporation, or other business entity. According to record testimony, a handler represents the segment of the industry that processes, ships, sells, consigns, or imports leafy green vegetables, or any combination thereof. As proposed by under this agreement, distributors, packers, processors, shippers, and wholesalers would be handlers. The record also indicates that producers who engage in the act of handling leafy green vegetables would be considered handlers. As handlers, such producers would directly place their product into the stream of commerce, through direct sales to consumers, retailers, or other handlers such as a manufacturer or foodservice operator.
For the purposes of the proposed agreement, the term “handler” should specify that brokers, retailers, and foodservice operators would not be considered handlers unless such
persons are otherwise engaged in handling. The record indicates that generally brokers serve as intermediaries and, negotiate with producers or handlers on behalf of their customers without ever taking possession or ownership of the actual leafy green vegetables.
The term “handler” appeared in the Notice of Hearing as § 970.12, and should be re-designated § 970.15, and revised slightly for clarity.
Record evidence indicates that the term “signatory” should be modified to “signatory handler” and the definition should be revised to mean a handler located in the production area who is party to the proposed agreement. The revisions clarify that only handlers could become signatories to the proposed agreement, and that such persons would have to be located within the production area.
According to the record, a signatory handler would be responsible for meeting the requirements of the proposed agreement, complying with audit requirements, and submitting reports and other information required for the administration of the proposed agreement. In cases where a signatory handler contracts for services, the signatory handler would be responsible for verifying and retaining documentation that the contracting service provider or agent meets any requirements in effect under the proposed agreement.
Signatory handlers would be eligible to nominate persons to the Board and to serve as handler members or their alternates on the Board. Signatory handlers also would be eligible to nominate persons to serve on Committees of the Board and be eligible to serve as members of the Technical Review Committee. Additionally, record evidence indicates that signatory handlers would need to be located in the production area because they are responsible for handling leafy green vegetables in the United States.
The term “signatory”, which appeared in the Notice of Hearing as § 970.26, is revised to “signatory handler”, and redesignated as § 970.33.
Record testimony indicates that, signatory handlers would be identified as “first” or “secondary” handlers under the proposed agreement. Record evidence supports adding a new § 970.32. This section would establish the definition of “signatory first handler” to mean the person located in the production area who signs the proposed agreement and who is the first to handle leafy green vegetables. This definition is intended to identify signatory handlers who first receive leafy green vegetables for the purposes of assessment collection. As proposed under the agreement and supported by the record, signatory first handlers would be financially responsible for the payment of assessments under the proposed agreement. It is important to identify the responsible party, since leafy green vegetables may be handled by several different signatory handlers and the assessment should only be applied once.
According to proponents of the proposed agreement, “signatory first handlers” would be identified as the handler who first takes possession of leafy green vegetables in their natural form from a producer with the intent to sell them to retailers or other handlers. As an example, a signatory first handler may contract with an independent harvesting company to harvest a producer's crop and deliver that crop to the signatory first handler's facility. In such a case, the signatory first handler would take ownership of the crop, yet would not be the first business entity to physically engage in the act of handling. According to record evidence, given that the harvesting company is contracted by the signatory first handler, and the handler assumes ownership, the said handler, and not the harvester, would be identified as the signatory first handler. Therefore, the signatory first handler would be responsible for ensuring that the contracting harvester is in compliance with any provisions in effect under the proposed agreement. Additionally, the signatory first handler would be responsible for the payment of assessments on such leafy green vegetables.
As another example, if a producer were to harvest a leafy green vegetable crop and then engage in the act of handling the crop that producer would be considered a “signatory first handler” and responsible for ensuring crop is in program compliance with the proposed agreement, assuming the producer in its capacity as a handler had signed the agreement.
Witnesses explained that while some leafy green vegetables are minimally handled after they are harvested, some product is sold or transferred to a secondary handler or a handler other than a first handler for further processing. These secondary handlers are commonly known as “manufacturers” or “processors”. Record testimony indicates that secondary handlers or handlers other than first handlers generally buy from first handlers, and could receive product from other handlers, processors, or manufacturers. Additionally, such secondary handlers also may purchase leafy green vegetables directly from producers.
According to the hearing record, the term “process”, which is included in the definition of “handle”, is synonymous with “manufacture” and means “to change fresh leafy green vegetables from their natural or raw form into packaged fresh-cut products.” During the manufacturing process, leafy green vegetables are typically washed, and then shredded, cut, cored, trimmed, or blended with other types of fresh-cut leafy green vegetables, or any combination thereof. Ultimately, the processed product is packaged for distribution. Processed fresh leafy green vegetable products are then typically transported in refrigerated trucks or coolers to the secondary handler's customer. These customers may include consumers, retailers, foodservice companies, or wholesale produce operations supplying a range of products to retail and foodservice companies.
Witnesses were careful to clarify that activities of a manufacturer do not include the packing of leafy green vegetables in the field. Additionally, record testimony indicates that, in some cases, coring and trimming activities can be part of a producer or handler harvesting activity. Therefore, the definition of manufacture should not include leafy green vegetables packed in the field. Additionally, the terms “manufacture” and “process” appeared in the Notice of Hearing as § 970.16 and § 970.21, respectively, and should be combined and revised slightly for purposes of clarification and redesignated as § 970.19.
The term “manufacturer” as indicated above should be defined to mean any person who manufactures. As slightly revised, the definition should not include a retailer, a foodservice operator, or broker, except to the extent that such a person is otherwise engaged in handling. The term “manufacturer” appeared in the Notice of Hearing as § 970.17, and should be redesignated as § 970.20.
Hearing record evidence supports the inclusion of the term “import” under the definition of “handle”. As such, the term “importer” should be defined to mean “a handler located in the production area who imports leafy green vegetables that are produced or handled outside of the production area.” The term “importer” appeared in the Notice of Hearing as § 970.13, and should be re-designated as § 970.16.
Material Issue Number 5(a)—Definition of Terms
In addition to the definitions addressed in Material Issues 3 and 4, certain terms should be defined for the purpose of specifically designating their applicability and limitations whenever they are used in the proposed agreement.
“Act” should be defined in § 970.1 of the proposed agreement as the Agricultural Marketing Agreement Act of 1937, as amended (48 Stat. 31, as amended; 7 U.S.C. 601-674). This is the statute under which the proposed regulatory agreement would be operative.
Record evidence supports adding a new definition § 970.2, “Audit metric”, to the proposed agreement. According to the record, “audit metric” should be defined to mean an auditable standard or requirement within a process control prescribed pursuant to § 970.67.
“Audit verification” should be revised to “audit” and should mean an official review conducted by the Inspection Service to verify and document that good agricultural, handling, and manufacturing practices are adhered to throughout the growing, harvesting, packing, manufacturing, and transportation of leafy green vegetables. Additionally, according to the record, an audit would include a physical visit to the farm or facility subject to audit while it is in operation. This audit would represent a “snapshot in time” based on documentation reviewed, persons interviewed, and operations observed. The intention of the audit is to provide the auditor with a picture of the handler's activities with the ultimate goal of ensuring that such activities comply with program requirements.
The definition for “audit verification” that appeared in the Notice of Hearing as § 970.2, should be redesignated as § 970.3, “audit”.
The term “broker” should mean a person who coordinates the sale and transportation of leafy green vegetables for retail or foodservice operators, without taking ownership of such vegetables. This definition appeared in the Notice of Hearing as § 970.3, and should be redesignated as § 970.4 and reworded for clarity.
As witnesses explained, and as recommended in this decision, the term “critical limit” should refer to a maximum or minimum value that is assigned to a process control when a biological, chemical, or a physical parameter must be controlled. This prevents or minimizes the occurrence of a food safety hazard. “Critical limit” appeared in the Notice of Hearing as § 970.4, and should be redesignated as § 970.6 and revised slightly for clarity.
The term “crop year” should be defined to mean the 12-month period beginning on April 1 of any year and ending on March 31 of the following year. The record indicates that leafy green vegetables are produced year round in the production area. The proposed April through March period mirrors the existing crop year in the predominant production areas for leafy green vegetables. This period represents a fixed timeline that would prescribe a period of conduct essential for the Board's administrative activities, such as preparing an annual budget of expenses and accounting for receipts and expenditures of funds. Thus, the term “crop year” would be synonymous with “fiscal year.”
The definition of “crop year” should be revised to include authority for the Board, subject to approval of the Secretary, to recommend any other annual period if a different annual period is found to be more appropriate. The definition of “crop year” that appeared in the Notice of Hearing as § 970.5 should be revised as indicated above and redesignated as § 970.7.
The definition of “foodservice distributor” that appeared in the Notice of Hearing should be replaced by a definition of “foodservice operator”. The term should be defined to mean a person that provides leafy green vegetables to the public as a restaurant, cafeteria, industrial caterer, hospital, or nursing homes. These businesses directly deliver leafy green vegetables to consumers, either by sale or by offering for direct consumption. Foodservice operators are excluded from the definition of “handler” in their role as a foodservice operator, much the same as retailers are excluded from the term handlers in their roles as retailers.
Record evidence also supports clarifying that the list of businesses identified in the proponents' definition of foodservice operators is not all inclusive. This clarification is being added to the definition of foodservice operator, which appeared as § 970.6 and is being revised and redesignated as § 970.8.
“Good agricultural and handling practices” refer to general practices established by FDA to reduce microbial food safety hazards in leafy green vegetables. According to the hearing record, good agricultural and handling practices are described in two FDA guideline documents, the “Guide to Minimize Microbial Food Safety Hazards for Fresh Fruits and Vegetables” and the “Guide to Minimize Microbial Food Safety Hazards for Fresh-cut Fruits and Vegetables”.
FDA is the agency at the U.S. Department of Health and Human Services charged with primary regulatory responsibility for food safety. The FDA guidelines referenced above, broadly referred to as “GAPs” and “GHPs”, are intended to assist the produce industry in minimizing the risk of food-borne contamination throughout the industry's production and handling activities. According to the hearing record, GAPs and GHPs, would provide the scientific baseline or reference for all audit metrics relating to production and handling activities developed under the proposed agreement.
As witnesses explained, and as included in the proposed agreement, the Board should have authority to recommend, for approval by the Secretary, the adoption of any other documents or regulations, established for the purposes of minimizing microbial food safety hazards in the production and handling of leafy green vegetables. These documents and regulations would be used as the basis for audits conducted by the Inspection Service under the program.
Section 970.9 that appeared in the Notice of Hearing is being modified for clarification and redesignated as § 970.11.
According to the hearing record, “good manufacturing practices”, or “GMPs”, mean any FDA regulations which describe the methods, equipment, facilities, and controls required for producing fresh-cut food, including processed, packaged leafy green vegetables. Current FDA regulations appear in 21 CFR Part 110. According to the hearing record, GMPs would provide the scientific baseline or reference for all audit metrics relating to manufacturing activities developed under the proposed agreement.
As recommended in this proposed agreement, the Board should have authority to recommend, for approval by the Secretary, the adoption of FDA guidance documents, regulations, or any other documents, for use in audits conducted by the Inspection Service under this part. This definition appeared in the Notice of Hearing as § 970.10, “good manufacturing practices” and should be revised and redesignated as § 970.13, “good manufacturing practices or GMPs”.
“Inspection Service” should be defined to mean Fruit and Vegetable Programs, Agricultural Marketing Service, USDA, its designees, or any other entity approved or recognized by USDA to conduct audits on leafy green vegetables. USDA recommends revising
this definition to more clearly define the Inspection Service's role in the audit process. This definition appeared in the Notice of Hearing as § 970.14 and should be revised and redesignated as § 970.17.
The term “National Leafy Green Vegetable Board” or “Board” be added to the list of defined terms as § 970.22 of the proposed agreement. “Board” should mean the administrative board established pursuant to § 970.40 and § 970.41.
The term “part” should be added to the proposed agreement as § 970.24 and should be defined to mean the marketing agreement regulating the handling of leafy green vegetables and all rules, and regulations issued thereunder.
As presented in the Notice of Hearing, proponents proposed that “Person” should be defined to mean an individual, partnership, corporation, association, or any other business unit or legal entity. This definition should be revised to make it consistent with the definition of the same term in the Act and redesignated as § 970.25.
The definition of “process control” should be revised so that it more clearly reflects the usage of this term as it was presented by witnesses during the hearing. “Process control” should mean a step or point within a production, harvesting, handling, manufacturing, or transportation process at which the potential for microbiological contamination can be reduced. This definition appeared in the Notice of Hearing as § 970.22, and should be revised and redesignated as § 970.26.
“Producer” is synonymous with “grower” and should be defined to mean any person engaged in a proprietary capacity in the production of leafy green vegetables for sale or delivery to a signatory handler.
Section § 970.20 of the Notice of Hearing should be modified for clarity and redesignated as § 970.27.
Witnesses proposed the addition of the term “region” to the list of definitions to clarify that “region” is distinctly different from the term “zone”. As discussed later in Material Issue 5(b), zones are related to Board membership. According to record evidence, “region” should mean a production or growing area distinguished by common environmental or growing conditions including, but not limited to, geography, climate, production practices, water sources and distribution systems, and wildlife. This definition should be added to the list of definitions as § 970.29 of the proposed agreement.
“Retailer” should be defined to mean any person that sells leafy green vegetables directly to the consumer. Retailers' sales typically involve the sale of leafy green vegetables for further preparation or home consumption by the consumer. An example of a retailer would be a grocery store.
This definition appeared in the Notice of Hearing as § 970.24, and should be revised for clarity and redesignated as § 970.30.
“Secretary” means the Secretary of Agriculture of the United States or any officer or employee of the USDA who is acting on their behalf. This definition appeared in the Notice of Hearing as § 970.25 and should be redesignated as § 970.31.
“United States Department of Agriculture or USDA” should be defined to mean any officer, employee, service, program, or branch of the Department of Agriculture, or any other person acting as the Secretary's agent or representative in connection with any provisions of this part. This definition appeared in the Notice of Hearing as § 970.27 and should be revised with minor modifications for clarity and redesignated as § 970.35.
A definition of the term “United States Food and Drug Administration or FDA” should be added to the list of defined terms as § 970.36 of the proposed agreement and should mean the agency within the United States Department of Health and Human Services. This definition allows the FDA acronym to be used throughout the proposed agreement.
The definition of “Zone” that appeared in the Notice of Hearing as § 970.28 should be revised and redesignated as § 970.37. “Zone” should be defined to mean one of the subdivisions of the production area or such other subdivisions as may be established pursuant to § 970.41. Defining the zones would be important for the purpose of Board and the Technical Review Committee representation, and is related to §§ 970.40, 970.41, 970.42, 970.44, 970.46, 970.49 and 970.66.
Record evidence supports modifying the zones proposed by the proponents, as well as adding additional zones. Zones should be comprised of States that are geographically contiguous and reflect similarities in climate and crop production. Zones should also reflect the distribution of leafy green vegetable acreage, and distribution of leafy green vegetable farms. “Zone” is further discussed under Material Issue 5(b).
USDA recommends replacing the proponents' proposed five zones with eight zones, as stated below:
(1)
Zone 1
shall include the States of California and Hawaii.
(2)
Zone 2
shall include the States of Alaska, Idaho, Montana, Oregon, Washington, and Wyoming;
(3)
Zone 3
shall include the States of Arizona, Colorado, Nevada, New Mexico, and Utah;
(4)
Zone 4
shall include the States of Illinois, Iowa, Minnesota, Nebraska, North Dakota, South Dakota, and Wisconsin;
(5)
Zone 5
shall include the States of Arkansas, Kansas, Louisiana, Missouri, Oklahoma, and Texas;
(6)
Zone 6
shall include the States of Delaware, District of Columbia, Indiana, Kentucky, Maryland, Michigan, Ohio, Virginia, and West Virginia;
(7)
Zone 7
shall include the States of Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, and Tennessee; and,
(8)
Zone 8
shall include the States of Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont.
Material Issue 5(b)—Administrative Board
The proposed agreement should provide for the establishment of an administrative body (Board) to administer the program and to provide for its effective and efficient operation. Membership on the Board should be reflective of leafy green vegetable industry stakeholders, namely signatory handlers, producers supplying such signatory handlers, importers, retailers, foodservice operators, and the public (consumers). Further, the proposed agreement should delineate the procedures, powers, and duties of the Board.
USDA recommends that, based on record evidence, the provisions of the proposed agreement pertaining to zones, Board membership allocation among zones, eligibility requirements, and nomination procedures, be revised from those provisions that appeared in the Notice of Hearing. Specifically, USDA recommends increasing the number of zones and redefining them so that regional similarities are recognized as well as leafy green vegetable acreage and the number of farms harvesting leafy green vegetables. USDA also proposes that the Board's membership be expanded and revised to reflect the proposed changes in zones, and to increase opportunity for participation of industry representatives on the Board. Lastly, USDA proposes that eligibility requirements and nomination procedures be revised to address witness concerns regarding diverse
stakeholder (small businesses, organic businesses, diversified businesses) representation among the Board membership. This would provide for an open, transparent, and inclusive nomination, selection, and appointment process.
This Material Issue addresses §§ 970.37, 970.40, 970.41, 970.42, 970.43, 970.44, 970.45, 970.48, 970.49, 970.50, and 970.51 of the proposed agreement. These sections address the subject areas of: establishment of zones, establishment and membership of the Board, rezoning and reallocation, eligibility, term of office, nominations, alternate members, compensation and expenses, administrative procedures, and powers and duties of the Board. These sections were originally proposed in the Notice of Hearing as §§ 970.28, 970.40, 970.41, 970.42, 970.43, 970.44, 970.47, 970.48, 970.49, and 970.50, respectively.
Definition of Zones
The proponents testified that the production area should be subdivided into five zones for the purpose of industry representation on the Board and administration of the proposed agreement. The five zones were proposed as follows:
(1)
Zone 1:
California, Washington, Oregon, Hawaii, and Alaska.
(2)
Zone 2:
Arizona, Montana, North Dakota, Wyoming, South Dakota, Idaho, Nevada, and Utah.
(3)
Zone 3:
New Mexico, Colorado, Nebraska, Minnesota, Iowa, Kansas, Oklahoma, Texas, Missouri, Arkansas, and Louisiana.
(4)
Zone 4:
Wisconsin, Michigan, Ohio, Illinois, Indiana, Kentucky, Tennessee, Mississippi, Alabama, and Georgia.
(5)
Zone 5:
Maine, New Hampshire, Vermont, New York, Connecticut, Massachusetts, Pennsylvania, New Jersey, West Virginia, Virginia, Maryland, Delaware, Rhode Island, North Carolina, South Carolina, Florida, and the District of Columbia.
For this zone structure, the proponents utilized 2007 United States Census production volume data for leafy green vegetables. Proponents explained that they attempted to anchor each zone with a key leafy green vegetable-producing State, as detailed in Material Issue 1. For this reason, the States of California and Arizona were purposefully separated so that their production volume would not be attributed to one zone, thereby not skewing the balance of Board member representation in favor of those two States and thus, a specific zone. Other anchor States that produce the majority of leafy green vegetables in the United States are Texas, Colorado, Georgia, Florida, and New York.
Proponents explained that their intent was to create zones strictly for the purpose of industry representation on the Board. Proponents contended that the proposed zones and corresponding Board representation would provide for the development of audit metrics that recognized regional differences. Proponents further explained that they intended to develop a process that would be inclusive and transparent to allow for the participation of various stakeholder groups and the recognition of regional, geographic differences. The topic of audit metrics development is discussed in Material Issue 5(c).
A considerable number of witnesses, both those who were opposed to the establishment of the proposed agreement, as well as those who supported the concept of a national agreement but suggested improvements to the proponents' proposal, raised concerns over the proponents' proposed zones. Witnesses testified that the proposed zones were geographically too large, and did not recognize regional differences in geography, types of crops grown, production practices, environmental factors, climate, and diverse stakeholder concerns that exist in the United States leafy green vegetable industry. Witnesses also testified that the proposed zones did not accurately reflect the distribution of leafy green vegetable acreage or the distribution of farms.
Witnesses contended that the proponents' proposed zones were not established based on agricultural or climatic conditions to reflect common growing seasons or agronomic zone characteristics. Witnesses further claimed that it was unreasonable to expect representatives of zones inclusive of States that greatly differ in leafy green vegetable crop type, production methods, geography, and climate, to adequately understand the growing conditions across such a wide geography. Witnesses cited several examples to illustrate the proponents' proposed zones were geographically too large and included States in the same zone that do not share geographic and climate characteristics, but would be represented by the same membership and Board member allocation.
As an example, witnesses testified that proponents' proposed Zone 4 included 10 States that stretched from Wisconsin to Alabama. These witnesses pointed out that, as proposed, the States of Georgia and Ohio, and the States of Wisconsin and Alabama, would be in the same zone even though they have distinct differences in geography and climate. Witnesses also noted that proponents' proposed Zone 5, which included 16 States and the District of Columbia, combined southern States such as Florida with northern States such as Vermont, Maine, and New York which vary widely in geography, climate, and production practices. Witnesses further asserted that the States in proposed Zone 5 have different soil types, water sources, growing seasons, and marketing channels.
Witnesses testified that production practices, which vary across the United States, were reflective of climates. Witnesses suggested that the proposed zones should include similar climate areas such as the Upper Midwest as one zone. An example cited by witnesses identified Upper Midwest States as having climate requiring different production practices than those found in Georgia or California. Witnesses explained that Upper Midwest States tend to have periods of hard freezes, thereby limiting their production season to the months of May through October. In contrast, witnesses noted that the State of Georgia has a high humidity climate, Northeast States have cooler climates, and Southern California has more of a desert climate.
Witnesses asserted that States having similar climate and geography should be grouped together in order to represent a contiguous area as further support of proper representation of like concerns among States. One witness offered the example of combining the States of Florida, Georgia, and Alabama as an appropriate representation of like geography, climate, and production practices. Another witness suggested subdividing the State of Maryland to place the northern half of Maryland with States west to Michigan in one zone, and southern part of Maryland with States west of the Mississippi River in another zone. Additionally, another witness suggested combining the Northeast States into one single zone because of similarities in climate.
Some witnesses suggested that the division of zones and Board membership allocation among those zones should be based on the number of leafy green vegetables acres harvested for the fresh and fresh-cut market. Witnesses explained that some production areas benefit from production environments that allow for multiple harvests of high-yielding crops, while other areas only harvest one crop per year.
According to witnesses, an example of this difference would be a producer in California that may harvest a field of immature or baby leaf varieties of leafy
green vegetables several times within one growing season, while producers of cabbage in New York may only harvest one time per growing season. In this example, if production volume were used instead of acreage, the producer in California would be given more weight in the allocation of producer seats under the proponents' proposal. However, witnesses indicated that if the number of acres were used as a basis of member allocation, the example farm in California would be equally weighted to the farm in New York. As such, witnesses suggested that the usage of acres would therefore result in a more equitable representation of producers on the Board.
Other witnesses, including those opposed to the proposed agreement, suggested using the number of farms per State to capture the distribution of producers nationwide as opposed to relying solely on production volume to determine producer representation. These witnesses explained that while some States have a concentration of large producer entities producing high-yielding crops, other States have a high number of smaller producer entities that produce leafy green vegetables as a portion of their overall farm production. Witnesses argued that under a zone and membership allocation structure that focuses on production volume, such as that proposed by the proponents, States having a high number of small, low-volume farms risk being under-represented compared to States with fewer high-volume farms. Witnesses contended that under-representation of these small farm operations would result from the proponents' proposed zones. Witnesses with this concern stated that the proposed zones and corresponding member representation on the Board should be revised to better recognize diversified, small-scale operations.
Witnesses argued that an increase in the number of zones together with a more accurate zone definition would likely result in greater opportunities for stakeholders, such as small diversified farms, farms using non-conventional production methods, and handler entities interacting with local, small-scale markets and producer associations, to gain representation. Witnesses stated that increased opportunity for stakeholders would result in the inclusion of those groups' concerns in Board decisions, including the audit metric development process.
Witnesses argued that, contrary to the proponents' position, the definition of zones and the recommendation of audit metrics by Board members are intrinsically linked. Witnesses disagreed with the proponents' position that the division of zones would not have an impact on the process of developing audit metrics under the proposed agreement. They explained that if the proposed zones did not adequately represent regional differences in geography, climate, and production practices, the composition of Board membership would not adequately represent the complex spectrum of producer and signatory handler interests that exist in the United States leafy green vegetable industry. Furthermore, because the Board would ultimately be responsible for recommending audit metrics to USDA for approval, witnesses feared that minority and diverse stakeholder concerns would be overlooked in this process because they may not be represented on the Board.
Lastly, witnesses, including proponent witnesses, stated that the Board should have the ability to modify the number and definition of zones, in order to reflect the diverse and changing leafy green vegetable industry.
Proponent witnesses testified that their intent in defining the proposed zones was to allow for adequate participation by stakeholders to ensure consideration of diverse interests in Board decision-making, including the development of the audit metrics. However, there was record testimony that the proposed zones were geographically too large to ensure adequate representation of diverse stakeholder interests. The record further establishes that acreage of leafy green vegetables and the number of farms harvesting leafy green vegetables rather than production volume also should be considered in subdividing the production area into zones.
Throughout the hearing, proponents stated they were open to revisions in the proposed agreement to address concerns brought to light by the hearing process. Proponents asserted that they were willing to collaborate with concerned witnesses and USDA to improve the proposed agreement's effectiveness. Several proponents stated that, while their proposal attempted to present an equitable, balanced division of geographic zones and diverse perspectives of the supply chain, USDA should have the discretion, based on hearing record evidence, to modify the proposal so that it better reflects the needs of the industry. In addition, both witnesses who were opposed to the proponents' proposal and those who advocated improvements to the proposal, stated that USDA should revise the proposed zones and Board membership eligibility requirements to ensure that leafy green stakeholder groups are adequately represented. These stakeholder groups would include, but are not limited to: Small producer and signatory handler entities, organic producers and signatory handlers, and diversified farming operations.
USDA has analyzed witness testimony in conjunction with record data and has developed recommended changes to the proposed zones. Evidence reviewed by USDA includes both Census and NASS leafy green vegetable data, and information specific to the distribution of leafy green vegetable acreage and the number of farm reporting such acreage by State. In addition, USDA considered information supplied by witnesses with regard to geography, climate, and seasonal growth patterns of different leafy green vegetable crops to more appropriately group States into zones.
USDA's analysis of the distribution of leafy green acreage throughout the production area as compared to the volume of production demonstrated that significant variances exist between areas producing high-yielding crops and those producing low-yielding crops. An acreage-based analysis places leafy green vegetable acreage having smaller annual per acre production yields on more equal footing with leafy green vegetable acreage having higher annual per acre production yields. This should result in greater and more equitable opportunity for participation in States having lower yields per acre. As such, USDA recommends that acreage rather than production volume, as proposed by proponents, should be utilized in defining zones.
Furthermore, USDA's analysis of the number of farms reporting harvest of leafy green vegetables (specifically for the fresh and fresh-cut market) allowed USDA to assess the distribution of industry stakeholders across the production area. Using the number of farms harvesting leafy green vegetables in defining zones would address concerns that States having a high number of small producer entities would be under-represented under the zone structure proposed by proponents. Lastly, defining zones on a combined analysis of leafy green vegetable acreage and the number of leafy green farms provides better representation on the Board of diverse stakeholder interests.
USDA also took into consideration witness testimony that zones should reflect grouping of States that are contiguous and share geographic and climate similarities. According to hearing record evidence, incorporating guidelines that would require, to the extent practicable, grouping of States
into zones that are contiguous and share climate and similarities in agricultural practices would result in zones comprised of States that share similar production and handling concerns.
Regarding the above, USDA recommends grouping, to the extent practicable, geographically contiguous States into zones to reflect similarities in climate and agricultural practices. For example, southeastern States such as Mississippi, Alabama, Florida, Georgia, and North and South Carolina were grouped together because of the similarity in warm, coastal climates, type of crops grown, and growing seasons. Tennessee was added to this group as record evidence indicated that the similarity between leafy green vegetable production in this State was more similar to the coastal States than its northern neighbors.
Similarly, the northeastern States stretching from Pennsylvania and New Jersey up through Maine were grouped because of similarities in crop types and growing seasons. According to the hearing record, the northeastern States produce a majority of the nation's cabbage, which is typically a colder weather crop that is harvested according to a crop cycle that is distinctly different from warm weather crops. Another example is the grouping of Arizona, New Mexico, Nevada and Utah. These States all represent warmer, drier climates with spring and summer growing and harvest seasons. These States also typically rely heavily on irrigation watering systems as rainfall is limited. Similar to the case of Tennessee, Colorado was included in the southwestern State grouping even though that State tends to have an overall cooler and wetter climate. However, according to the record, Colorado leafy green vegetable crops, growing and harvest seasons were more similar to those in Arizona and New Mexico than those in the other neighboring States of Nebraska, Wyoming, or Kansas.
States ranking among the top leafy green vegetable bearing acreage were identified so that each zone was anchored with a key leafy green vegetable producing State. This is consistent with the method applied by proponents.
In summary, the record supports increasing the number of proposed zones from 5 to 8. The zones would delineate smaller geographic areas that both reflect similarities in climate, geography, and crop production, and increase opportunity for participation of industry representative on the Board.
The zone structure would be as follows:
(1)
Zone 1
should include the States of California and Hawaii;
(2)
Zone 2
should include the States of Alaska, Idaho, Montana, Oregon, Washington, and Wyoming;
(3)
Zone 3
should include the States of Arizona, Colorado, Nevada, New Mexico, and Utah;
(4)
Zone 4
should include the States of Illinois, Iowa, Minnesota, Nebraska, North Dakota, South Dakota, and Wisconsin;
(5)
Zone 5
should include the States of Arkansas, Kansas, Louisiana, Missouri, Oklahoma, and Texas;
(6)
Zone 6
should include the States of Delaware, the District of Columbia, Indiana, Kentucky, Maryland, Michigan, Ohio, Virginia, and West Virginia;
(7)
Zone 7
should include the States of Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, and Tennessee;
(8)
Zone 8
should include the States of Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont.
These zones, which were previously defined in § 970.28 of the Notice of Hearing, now appear in § 970.37.
The Board should have authority to recommend future modifications of the defined zones and to ensure proper geographic division of the production area over time. In making such a recommendation, the Board would be expected to consider factors similar to those used in deriving the zones proposed in this recommended decision.
Board Membership and Allocation of Member Seats Among Zones
Proponent witnesses advocated a Board membership of 23 members allocated among five zones, with the representation of each zone based on that zone's relative volume of leafy green vegetable production. Of the 23-member Board proposed by the proponents, 13 seats would be assigned to signatory handlers and 6 seats would be assigned to producers delivering to signatory handlers. The signatory handler and producer member seats would be allocated among the proposed five zones as follows: Four handlers and two producers from Zone 1; three handlers and one producer from Zone 2; two handlers and one producer from Zone 3; two handlers and one producer from Zone 4; and two handlers and one producer from Zone 5. In addition, the proponents' proposal would assign one seat to each of the following interest groups: Retailers, foodservice, importers (signatory handlers), and the public. As proposed by proponents, representation of signatory handlers, producers, and the other at-large members (retailer, foodservice, importer, and public) among the 23 seats would be as follows: 13 handler seats (57 percent), 6 producer seats (26 percent), and 4 at-large seats (17 percent).
Proponents testified that even though the proposed agreement would regulate signatory handlers, the inclusion of producers delivering product to those handlers as Board members was important given that they would also be impacted by any regulations in effect under the proposed agreement. The proponents testified that the importer, retailer, foodservice, and public members are needed to represent the diverse perspectives of the farm-to-consumer leafy green vegetable supply chain. They further stated that each of these stakeholders can address unique factors associated with their sector. Proponents stated that the public member seat was intended to provide consumer representation on the Board.
Proponents explained further that specific producer and signatory handler stakeholder groups should be assured representation on the Board and, therefore, proposed representation requirements for these groups. Specifically, the proposed requirements state the majority of producer members could not be engaged in the act of handling leafy green vegetables or manufacturing fresh-cut, packaged leafy green products. In addition, the Board would include at least two small producer business entities, and four signatory handler members would be manufacturers of fresh-cut leafy green vegetables.
Proponents explained that the proposal to include producers not engaged in handling or manufacturing leafy green vegetables or products would allow for representation of “pure” producer interests on the Board. Regarding Board seats allocated to small producer entities, proponents explained that the United States leafy green vegetable production industry is comprised of many different sizes of producer operations following varying production methods, and that each type of producer is faced with unique challenges when producing for the United States leafy green vegetable industry. For this reason, proponents stated that small producer entities should be assured representation on the administrative Board. Lastly, proponents explained that manufacturers of fresh-cut leafy green vegetables face unique challenges that are different from those faced by other sectors of the leafy green vegetable industry. For this reason, proponents
stated that their representation on the Board was important to understanding issues that are particular to that part of the United States leafy green vegetable industry.
Both witnesses who were opposed to the proponents' proposal and those who advocated improvements to the proposal stated that USDA should revise, as necessary, Board membership to ensure that diverse leafy green vegetable industry stakeholder groups are represented. Witnesses testified that the proponents' proposed Board membership, which resulted from their proposed zones, appeared to be based more on ensuring the strategic voting power for certain States. These witnesses asserted that the proposed zones and corresponding Board membership would provide inequitable representation of leafy green vegetable industry stakeholders, particularly small, diversified farm operations.
The record supports the establishment of an administrative Board to administer the proposed agreement and provide for its effective and efficient operation. The record also indicates that the membership of the administrative Board should represent signatory handlers, producers supplying such handlers, importers, retailers, foodservice, and the public.
Upon consideration of the record evidence, a 3-member increase in the total size of the Board would allow for greater industry representation yet would maintain a membership that is manageable and efficient. For these reasons, the Board membership should be increased from 23 to 26 members. Of that total, USDA recommends that 22 Board member seats be designated as producer and signatory handler seats, and the remaining 4 seats be designated as importer, retailer, foodservice, and public member seats. Each member should also have an alternate who would have the same qualifications as the member for whom he or she is an alternate.
In allocating handler and grower seats, each zone's combined share of national leafy green acreage and the national number of leafy green vegetable producing farms were considered. In instances where a zone represents a greater portion of leafy green vegetable acreage or a larger number of leafy green vegetable farms, additional producer or signatory handler members would be allocated. Additionally, record evidence supports assigning a minimum of one producer member and one signatory handler representative to each zone.
Based on the foregoing discussion, the following is the allocation of producer and signatory handler members:
(1) Zone 1 should have four signatory handlers and three producers;
(2) Zone 2 should have one signatory handler and one producer;
(3) Zone 3 should have one signatory handler and one producer;
(4) Zone 4 should have one signatory handler and one producer;
(5) Zone 5 should have one signatory handler and one producer;
(6) Zone 6 should have one signatory handler and one producer;
(7) Zone 7 should have two signatory handlers and one producer; and,
(8) Zone 8 should have one signatory handler and one producer.
In addition to the producer and signatory handler seats, four seats should represent the following four groups: Importers, retailers, foodservice, and the public. Representation of these stakeholders is needed to represent the diverse perspectives of the leafy green vegetable supply chain. The representation of the proposed 26-member Board for signatory handlers, producers, and the other members (importer, foodservice, retailer, and public) would be 12 seats (46 percent), 10 seats (39 percent), and 4 seats (15 percent), respectively.
This revised allocation represents an increase in producer representation on the Board from the proponents' proposed 26 percent to 39 percent, as well as a decrease in at-large representation from the proponents' proposed 17 percent to 15 percent. The revised signatory handler representation would result in 46 percent versus the proponents' 57 percent.
The proponents' recommendations that the majority of grower members not be engaged in handling, that at least two of the grower members represent small businesses and that at least four of the handler members be manufacturers of fresh-cut products should remain in § 970.40. Additionally, to the extent practicable, Board membership should include diversified farm producers and organic producers and handlers.
Section 970.40 of the proposed agreement is being revised as discussed above.
Proponents proposed including authority to reapportion Board member seats among zones, change the number of Board members, and revise composition (the relative number of signatory handler, producer and other seats). This authority appeared in the hearing notice under § 970.40 and is being moved to a new § 970.41.
In making any recommendation to revise membership, the Board would have to consider the geographic distribution of acreage and the number of leafy green vegetable farms among the zones. This differs somewhat from what the proponent group proposed—that the Board would need to consider shifts in production. Other criteria to consider would be the importance of new acreage, the equitable relationship between membership and zones, economies to result in promoting efficient administration of the program, and other relevant factors. The agreement should require that each zone be represented by at least one producer one signatory handler seat.
Eligibility
The proponents proposed eligibility requirements for the purpose of identifying persons who would be qualified to serve as members on the Board. Proponents proposed that in order for a signatory handler (including importers) or producer to be eligible to serve on the Board, each should be an owner, officer, or employee of a signatory handler or producer at the time of their selection and throughout their term of office in the zone for which selected.
Proponents proposed that the retail, foodservice, and public members and their respective alternate members not be engaged in the production or handling of leafy green vegetables. Additionally, the retail and foodservice members and their respective alternate members should be, at the time of their selection and throughout their term of office, an owner, officer, or employee of the firm represented by the seat selected. This would enable these members to represent all stakeholders involved in the supply chain for that sector.
Regarding the producer and signatory handler member seats, there was testimony presented at the hearing advocating that such members should be required to be a legal resident in the zone for which selected. However, record evidence supports that where a producer or handler conducts business is a more important criteria than the producer or handler's place of residence.
Multiple witnesses expressed concern that the proposed eligibility provisions could allow large leafy green vegetable producers and handlers—who often operate in multiple States—to have member seats in several zones. These witnesses testified that the agreement should limit the number of seats any one company could fill to maximize industry representation on the Board.
According to record evidence, limiting Board member representation to provide that no one company or its affiliates could be represented on the Board by more than one signatory
handler (including importer) or producer and their alternate member should provide more opportunities for diverse representation on the Board. As such, a provision is added to the proposed agreement to specify that company representation for such entities would be limited to one member seat and one alternate member seat.
Finally, the remaining members of the Board may be from any zone because they represent the production area at large. The eligibility requirements proposed in § 970.41 of the Notice of Hearing are revised as discussed above and redesignated as § 970.42.
Alternate Members
Proponents proposed that each Board member should be assigned an alternate member for the purpose of assuring continuity and stability of Board operations. Alternate members would act in the place and stead of the Board members they are alternates for when the Board members cannot fulfill their Board obligations. Alternate members would succeed their member in the event of that member's death, removal, resignation or disqualification. The alternate would then serve until a successor was selected and qualified.
According to proponents, alternate members would be subject to the same eligibility requirements as Board members and would be nominated in the same manner as Board members. Proponents explained that providing alternate Board members would ensure full representation of the industry, as well as full representation of their particular zone and group (producers, signatory handlers, or other stakeholder members).
The record supports the proponents' proposal regarding alternate members. This proposal appeared as § 970.44 of the Notice of Hearing and is redesignated as § 970.45. The last sentence of that section is removed as it is duplicative of language that appears in § 970.49.
Nominations
A nomination mechanism should be established through which members and alternate members of the Board would be nominated, selected, and appointed by the Secretary. Record evidence supports revising § 970.43 of the Notice of Hearing to improve transparency in the selection and appointment of Board members.
In their proposal, proponents described a nomination process to identify Board member nominees and to provide for their selection and appointment by USDA. Proponents explained that names of nominees would be collected by USDA (initially) and by the Board (for subsequent nominations) at producer and signatory handler meetings, by mail, or through any form of electronically verifiable communication. Names received as nominees for producer and signatory handler member seats would then be placed on a ballot and would be voted on by their peers, respectively. A list of nominees receiving the highest number of votes would be forwarded to USDA for selection and appointment by the Secretary. Proponents explained that once the producer and signatory handler members had been appointed, those members would nominate the retailer, foodservice, importer, and public members and their alternate members. Final selection and appointment of the retailer, foodservice operator, importer, and public member would be made by the Secretary.
Proponents further explained that, as part of the nomination process, nominees would be required to indicate in advance of selection their interest to serve as a member, alternate, or both, and that they are willing to accept the seat for which selected. According to the record, agreeing in advance to serve as a Board member or alternate member would avoid possible delays in the appointment of the Board.
According to proponents, the proposed agreement would provide, in times when nominations are not made in a timely manner and as specified, the Secretary authority to appoint members and alternates who meet the proposed eligibility requirements. Furthermore, proponents explained that in the event that any vacancy were to arise on the Board due to an individual's disqualification, removal, resignation, or death, a successor member or alternate member would be nominated and selected in accordance with the proposed nomination and acceptance procedures, or at the discretion of the Secretary.
A considerable number of witnesses, both those who were opposed to the establishment of the agreement, as well as those who supported the concept of a national program but suggested improvements to the proponents' proposal, raised concerns over the proposed nomination and selection process outlined by the proponents.
The primary concern among these witnesses focused on what was perceived as a closed nomination process. These witnesses stated that a peer nomination and ballot system, in combination with the proponents' proposed zones and limited number of Board member seats, would result in the inability of diverse stakeholders to successfully compete and receive nomination and appointment to the Board. Substantial concern was raised over the potential for large producer and signatory handler entities to control the nomination process and the resulting list of nominees forwarded to the Secretary for approval.
Additional concern was voiced over the process outlined by proponents for the nomination of the retailer, foodservice, importer, and public member seats. Witnesses argued that because the proponents' proposal allowed nominations for these positions to be made exclusively by appointed producer and signatory handler members to USDA, the proposed process lacked transparency or the opportunity for input from industry representatives not appointed to the Board.
Many witnesses testified that in the absence of proposed zones that better reflected regional differences and an increase in Board membership to allow for greater industry participation, all Board member selections should be made by the Secretary.
These witnesses advocated the establishment of a system under which a peer nomination voting process would be replaced by an industry-wide nomination process, with selection and appointment by the Secretary. Others suggested that nominations should be made by the general public, with selection and appointment by the Secretary. According to witnesses making these suggestions, their recommendations would lead to a transparent process for the identification and selection of Board members, and would improve the potential for diverse stakeholders to participate on the Board.
Record evidence supports that a process for Board member nominations is necessary. Further, record evidence supports that nominations for producer and signatory handler (including importer) member seats and their alternate member seats of the Board, should be made by their respective peers. As such, nominations for signatory handler member seats and their alternates only would be made by signatory handlers. Likewise, only producers supplying signatory handlers would be allowed to nominate eligible producers for producer member seats and their alternate seats.
Record evidence supports that the nomination process for the retailer, foodservice, and public member, and their alternates, should be revised to allow for nominations to be received at meetings, by mail, or by any form of electronically verifiable communication
from any person in the production area. This revision would allow for greater industry and public participation in the nomination of persons representing the retail, foodservice, and public communities and would allow for greater transparency in that process.
As part of the nomination process, nominees would be required to indicate in advance of selection their interest to serve as a member, alternate, or both, and that they are willing to accept the seat for which selected. This would avoid possible delays in the appointment of the Board.
The record evidence supports revising the proponents' nomination process by removing the industry vote on nominees received. Instead, all names received during the nomination period should be forwarded to the Secretary, together with necessary information concerning their eligibility.
The Secretary would appoint from those nominees the members and alternate members of the Board on the basis of the representation provided for in §§ 970.40 through 970.42 of this proposed agreement.
Finally, the record supports nomination provisions with regard to acceptance, failure to nominate, and vacancies. Sections 970.43(c), (d) and (e) as published in the Notice of Hearing are redesignated as § 970.44(c), (e) and (f).
Term of Office
The proponents proposed that the term of office for Board members and alternates should begin on April 1 and continue for two years. The record indicates that leafy green vegetables are produced year round and that a term of office beginning on April 1 corresponds to the beginning of the time period designated in the definition of crop year. This language was published in the Notice of Hearing as § 970.42 and is redesignated as § 970.43.
This decision recommends the two-year term of office as proposed by proponents for Board members and their alternates to increase industry participation in administering the proposed agreement. The two-year term of office would apply to all Board members, including those representing the public. The maximum number of terms that an individual would be allowed to serve as a member on the Board would be three consecutive two-year terms of office, or a maximum of six consecutive years. Thus, once a person has served as a Board member for six consecutive years, that person would not be eligible for re-nomination to the Board until after 12 consecutive months out of office. Such 6-year term limits would not apply to alternate members to ensure continuity in Board operations.
Compensation and Expenses
According to record evidence, Board members and alternate members, committee and subcommittee members, including those members serving on the Technical Review Committee and the Research and Development Committee, would necessarily incur some expenses while attending meetings, or performing other duties under the proposed agreement. Proponents propose that reasonable expenses, which could include expenses associated with travel, meals, and lodging, should be reimbursed. However, proponents explained these same members and alternate members would not receive any compensation for their time. No specific testimony was received in opposition to this proposal. A provision for compensation and expenses was proposed in the Notice of Hearing as § 970.47 and is redesignated as § 970.48.
Quorum and Voting Provisions
The proponents proposed that provisions establishing quorum and voting procedures would be necessary for the effective functioning of the proposed Board. In their proposal, proponents stated that having a quorum requirement would ensure a majority of Board members be present prior to the Board voting on any action. According to proponents, a quorum would be met when a majority of all Board members were present at a meeting, including at least one member from each zone. If a quorum were met, proponents stated that voting requirements for any action taken by the Board would require the concurrence of a majority of all the members present at the meeting.
The proponents identified three Board actions that would require more than a simple majority vote. Proponents proposed that a minimum concurrence of two-thirds of the Board members at a meeting be required for Board actions related to the acceptance of GAPs, GHPs, and GMPs, as well as changes in the assessment rate and termination of the agreement. Proponents explained that for these specific actions a
2/3
vote requirement would be needed due to the importance of changes to audit metrics, assessments, or termination.
One witness testifying in favor of the super-majority provision clarified that the original language proposed by the proponents and published in the Notice of Hearing erroneously referred to “acceptance of Good Agricultural, Handling, and Manufacturing Practices” instead of audit metrics. The witness explained that Good Agricultural, Handling, and Manufacturing Practices are guidelines that are independent of the proposed agreement and, therefore, would not be subject to recommended revisions proposed by the Board. The witness offered that approval of audit metrics would better capture the intent of the proponent group. Hearing record evidence supports replacing “acceptance of Good Agricultural, Handling, and Manufacturing Practices” with “approval of the audit metrics as provided in § 970.67” in § 970.49 of the proposed agreement.
In the event that a Board member were absent from a meeting, witnesses explained that that member's alternate could serve in the absent member's place and stead for the purpose of constituting a quorum and voting. Proponents further explained that if both the member and their alternate were unable to attend a meeting, the absent member or Board could designate any other alternate from the same zone and group who is present at the meeting to serve in the absent member's place and stead.
For example, Zone 7 is proposed to be allocated two signatory handler members. If one of the two Zone 7 signatory handler members were present at a meeting and both the other member and their alternate were both absent, the alternate for the first member could serve in the place and stead of the absent member because they would represent both the same zone and group as the absentee. In this scenario, the alternate member would be selected to serve in the place and stead of the absentee by either the absent Board member or the Board. In this same example, if an available alternate member was a signatory handler from a different zone or was an alternate producer for Zone 7, that alternate could not be designated to serve.
Proponent witnesses testified that meetings of the Board should be open to the public, and notice of meetings should be given to the Secretary in the same manner as is given to members of the Board. The record indicates that at Board meetings, members could cast their vote by voice, hand, or in writing.
Additionally, a member participating by telephone would need to confirm his or her vote in writing. According to the record, a videoconference would be considered an assembled meeting and all votes would be considered as cast in person without need for subsequent written confirmation.
The record supports the need to establish quorum requirements and voting procedures so that meetings are conducted in an orderly manner and
that adequate representation in Board decisions. However, the proposed language should be modified to state that a majority of all appointed members of the Board shall constitute a quorum. This would address situations in which a zone may not have any appointed members.
No specific testimony was received in opposition to this proposal. Accordingly, the provisions regarding quorum and voting procedures in § 970.48 would be revised as previously discussed above and redesignated as § 970.49.
Powers
Proponent witnesses testified that certain powers should be assigned to the Board in order for it to carry out its functions under the proposed agreement. Proponents indicated that these powers would enable the Board to make recommendations to the USDA that reflect the conditions in the industry based on their knowledge and experience. To this end, the proponents included six powers in their proposal:
(1) To administer the proposed agreement in accordance with its terms and provisions;
(2) To make such rules and regulations, with the approval of the Secretary, as may be necessary to effectuate the terms and provisions of the proposed agreement;
(3) To adopt, with the approval of the Secretary after notice and comment, audit metrics to administer the terms and provisions of the proposed agreement;
(4) To cooperate with existing State boards, commissions and agreements through memorandum of understanding to affect the purposes of the proposed agreement;
(5) To receive, investigate, and report to the Secretary complaints of violation of the provisions of the proposed agreement; and,
(6) To recommend to the Secretary amendments to the proposed agreement.
No specific testimony was received in opposition to this proposal.
Certain powers should be granted to the Board to enable it to properly administer the proposed program. Upon review, power 3 above is included in power 2 and is therefore duplicative, while power 4 is more appropriately included under Board duties. The section “Powers” originally was included in the Notice of Hearing as § 970.49 and is revised and redesignated as § 970.50.
Duties
Proponents stated that specific duties are necessary for the Board to fully execute its responsibilities under the proposed agreement. They pertain to specific activities authorized under the proposed agreement, such as investigating and compiling information regarding leafy green vegetables, and to the general administration of the proposed agreement including hiring employees, appointing officers, and keeping records of all Board transactions.
The specific duties of the Board proposed by the proponents are as follows:
(a) To act as intermediary between the Secretary and any signatory with respect to the operations of the agreement;
(b) To select from among its members a chairperson and such other officers as may be necessary, and to define the duties of such officers;
(c) To establish subcommittees and advisory boards to aid the Committee in the performance of its duties under the agreement;
(d) To adopt such bylaws for the conduct of its business as it may deem advisable;
(e) To keep minutes, books, and records which clearly reflect all the acts and transactions of the Committee and subcommittees, and these shall be subject to examination by the Secretary at any time;
(f) To appoint such employees or agents as it may deem necessary, and to determine the compensation and define the duties of each;
(g) To cause its financial statements to be audited by a certified public accountant at least once each crop year and at such other times as the Committee may deem necessary or as the Secretary may request. Such audit shall include an examination of the receipt of assessments and the disbursement of all funds. The Committee shall provide the Secretary with a copy of all audits and shall make copies of such audits, after the removal of any confidential information that may be contained in them, available for examination at the offices of the Committee;
(h) To investigate the production, handling and marketing of leafy green vegetables and to assemble data in connection therewith; and,
(i) To furnish such available information as may be deemed pertinent or as requested by the Secretary.
Record evidence indicates that, in addition to the duties proposed by the proponents, the duty to develop an annual budget for review and approval by the Secretary should be included. Witnesses testifying in favor of this addition stated that development of a budget is necessary to ensure proper financial planning of Board expected expenditures and anticipated receipts. In addition, the development of an annual budget would be instrumental in determining, along with production estimates, the annual assessment rate. The witness stated that the budget should be reviewed and approved by USDA to ensure the fiscal responsibility in the proposed agreement's administration.
At the hearing, some witnesses raised questions regarding the protection of confidential information, especially within the context of financial reports developed by the Board, and audit of Board annual financials, including receipt of assessments and the disbursement of all funds. Witnesses expressed concern over the need to maintain confidentiality of proprietary information when such reports are written or audits conducted.
The duties proposed by the proponents and listed above are reasonable and necessary. No specific testimony was received in opposition to this proposal. This proposal was included in the Notice of Hearing as § 970.50 and is revised as previously discussed and redesignated as § 970.51.
Material Issue Number 5(c)—Audit Metrics and Verification Audits
According to record evidence, the proposed agreement should provide that verification audits be conducted to verify that signatory handlers are complying with the provisions of the proposed program. This would include audits of signatory handler operations to ensure that GHP audit metrics are being adhered to, as well as producer operations delivering to those handlers to ensure that GAP audit metrics are being adhered to. Verification audits should also be conducted of manufacturer operations (for those manufacturers who are signatories to the proposed agreement) to ensure that GMP audit metrics are being adhered to. Proposed provisions for verification audits are provided for in § 970.66.
Record evidence supports providing the Board with the authority to recommend audit metrics. Audit metrics established under the proposed program would represent a set of auditable standards or process control that would allow an auditor to determine if a producer or handler is in compliance with the program. Provisions for the development of audit metrics are provided for in § 907.67.
In addition, a Technical Review Committee (TRC) should be established to assist the Board in the development of audit metrics. Members of the TRC would represent signatory handlers and
producers throughout the production area, as well as stakeholder interest groups including but not limited to organic and non-conventional agriculture, small business operations, members of the scientific community, and interested government agencies. Authority for the TRC would be provided for in § 970.46 (formerly § 970.45).
Provisions requiring traceability should be established under the proposed program. The ability to trace produce during all stages of production, handling, and distribution would be a key factor in ensuring compliance. Witnesses stated that traceability would also provide for increased information about the source and movement of produce within the leafy green vegetable industry in the event that a contamination incident was to occur. Provisions relating to traceability are provided for under § 970.68.
According to the hearing record, an official mark should be developed for the purposes of identifying compliant participants in the proposed program. The proposed mark would be used on bills of lading, manifests or other like documentation that is standard in pre-retail market transactions. In addition, the Board should have the authority to recommend other uses of the official mark. Any other such uses would require the approval of the Secretary. Provisions for the development and usage of the official mark are provided for under § 970.69.
The record also supports the establishment of provisions allowing for any financially interested person to request an administrative review if it is believed that the results of an audit are in error. These proposed provisions are included in § 970.70.
Provision for the Secretary to modify, suspend, or terminate regulations in effect under the proposed program should also be included in the proposed agreement. This is provided for in § 970.71.
Verification Audits
As explained in Material Issue 5(a), the term “verification audit” should be defined to mean an official audit conducted by the Inspection Service to verify and document that good agricultural, handling, and manufacturing practices are adhered to throughout the growing, harvesting, packing and transportation of leafy green vegetables. According to the record, a verification audit would include a physical visit to the farm or facility subject to audit while it is in operation, to the extent practicable, and would represent a snapshot in time based on documentation reviewed, persons interviewed and operations observed. Information gathered during the audit would reflect past and ongoing activities of the signatory handler or their supplying producer(s) to the Inspection Service.
Section 970.66 of the proponents' proposed language describes verification audit provisions for GAPs, GHPs and GMPs audits. Proponents stated that signatory handlers would be required to ensure that any leafy green vegetables handled by their operation have been subject to GAPs verification audits. Proponents further stated that the GAPs audits should reflect FDA production and harvest guidelines, referred to in proposed § 970.11, and should meet audit metrics provided for under proposed § 970.67.
Proponents also stated that all signatory handlers to the proposed program should be subject to GHPs or GMPs verification audits, whichever is applicable. Such audits would verify that signatory handlers operate under auditable conditions that meet general FDA guidelines referred to in § 970.11 or FDA manufacturing regulations referred to in § 970.13, and should meet audit metrics provided for under proposed § 970.67.
Proponents explained that audits were necessary to ensure the integrity of all leafy green vegetables handled under the program. Proponents stated that quality assurance of leafy green vegetables begins in the field where the produce is grown, but that the integrity of that quality should be maintained through all stages post-production through delivery to market. By ensuring that leafy green vegetables are consistently subject to GAPs, GHPs and GMPs, proponents asserted that the potential for microbial contamination of those vegetables would be minimized. These practices would support the delivery of quality products to the marketplace.
According to the hearing record, proponents further stated that signatory handlers of the proposed program should not be allowed to import leafy green vegetables produced or handled in foreign countries that have not been subject to GAPs, GHPs or GMPs verification audits by the Inspection Service or agencies approved to audit on its behalf. Proponents stated that any foreign leafy green vegetables that are imported should be subject to comparable requirements that would be in effect in the United States if this proposed program were implemented.
According to the hearing record, all audits should be conducted by the Inspection Service or any other such agency that is authorized to audit on its behalf. Proponents explained that audits should be conducted on a regular schedule that would ensure every
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