Olives Grown in California and Imported Olives; Revisions of Outgoing Inspection Requirements and Size Requirements for Whole Pitted Olives

DEPARTMENT OF AGRICULTURE

7 CFR Parts 932 and 944

[Docket No. FV93-932-3IFR]

Olives Grown in California and Imported Olives; Revisions of

Outgoing Inspection Requirements and Size Requirements for Whole Pitted

Olives

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This interim final rule amends outgoing inspection regulations

under the California olive marketing order to authorize handlers to use

in-plant Quality Assurance Programs (QAPs) in lieu of continuous in-

line inspection. This rule also permits handlers to size whole pitted

olives by diameter as an alternative to the current requirement that

such olives be sized by weight prior to pitting. Conforming changes are

made to the size requirements for imported whole pitted olives so that

the requirements for domestic and imported olives are applied

similarly. The changes in the California olive requirements are

designed to result in more efficient handling operations. The changes

in import requirements are necessary under section 8e of the

Agricultural Marketing Agreement Act of 1937.

DATES: Effective on August 1, 1994. Comments which are received by

August 26, 1994 will be considered prior to issuance of any final rule.

ADDRESSES: Interested persons are invited to submit written comments

concerning this rule. Comments must be sent in triplicate to the Docket

Clerk, Fruit and Vegetable Division, AMS, USDA, P.O. Box 96456, room

2525-S, Washington DC 20090-6456; or by facsimile at 202-720-5698.

Comments should reference the docket number and the date and page

number of this issue of the Federal Register and will be available for

public inspection in the Office of the Docket Clerk during regular

business hours.

FOR FURTHER INFORMATION CONTACT: Terry Vawter, California Marketing

Field Office, Fruit and Vegetable Division, AMS, USDA, 2202 Monterey

Street, Suite 102B, Fresno, California, 93721, telephone 209-487-5901;

or Caroline Thorpe, Marketing Order Administration Branch, Fruit and

Vegetable Division, AMS, USDA, P.O. Box 96456, room 2525-S, Washington,

DC, 20090-64565, telephone (202) 720-5127.

SUPPLEMENTARY INFORMATION: This interim final rule is issued under

Marketing Agreement No. 148 and Marketing Order No. 932 [7 CFR Part

932], both as amended, regulating the handling of olives grown in

California, hereinafter referred to as the order. The order is

effective under the Agricultural Marketing Agreement Act of 1937, as

amended [7 U.S.C. 601-674], hereinafter referred to as the Act.

This interim final rule is also issued pursuant to section 8e of

the Act, which provides that whenever certain specified commodities,

including olives, are subject to grade, size, quality, or maturity

requirements under a Federal marketing order, the same or comparable

requirements shall be applied to imports of those commodities.

The Department is issuing this interim final rule in conformance

with Executive Order 12866.

This interim final rule has been reviewed under Executive Order

12778, Civil Justice Reform. This interim final rule is not intended to

have retroactive effect. This interim final rule will not preempt any

State or local laws, regulations, or policies, unless they present an

irreconcilable conflict with this rule.

The Act provides that administrative proceedings must be exhausted

before parties may file suit in court. Under section 608c(15)(A) of the

Act, any handler subject to an order may file with the Secretary a

petition stating that the order, any provision of the order, or any

obligation imposed in connection with the order is not in accordance

with law and requesting a modification of the order or to be exempted

therefrom. A handler is afforded the opportunity for a hearing on the

petition. After the hearing the Secretary would rule on the petition.

The Act provides that the district court of the United States in any

district in which the handler is an inhabitant, or has his or her

principal place of business, has jurisdiction in equity to review the

Secretary's ruling on the petition, provided a bill in equity is filed

not later than 20 days after the date of the entry of the ruling.

There are no administrative procedures which must be exhausted

prior to any judicial challenge to the provisions of import regulations

issued under section 8e of the Act.

Pursuant to the requirements set forth in the Regulatory

Flexibility Act (RFA), the Administrator of the Agricultural Marketing

Service (AMS) has considered the impact of this interim final rule on

small entities.

The purpose of the RFA is to fit regulatory actions to the scale of

business subject to such actions in order that small businesses will

not be unduly or disproportionately burdened. Marketing orders issued

pursuant to the Act, and rules issued thereunder, are unique in that

they are brought about through group action of essentially small

entities acting on their own behalf. Thus, both statutes have small

entity orientation and compatibility. Import regulations issued under

the Act are based on those established under Federal marketing orders.

There are 5 handlers of olives regulated under the order, and

approximately 1,350 producers in the regulated area. In addition, there

are approximately 25 importers of olives subject to the requirements of

the olive import regulation. Small agricultural producers have been

defined by the Small Business Administration [13 CFR 121.601] as those

having annual receipts of less than $500,000, and small agricultural

service firms, which include olive handlers and importers, are defined

as those whose annual receipts are less than $5,000,000. The majority

of the olive producers and importers may be classified as small

entities. None of the olive handlers may be so classified.

The California Olive Committee (committee), the agency responsible

for local administration of the order, met on December 14, 1993, and

unanimously recommended revising outgoing inspection procedures to

permit handlers to establish a QAP in lieu of maintaining continuous

in-line outgoing inspection of processed olives. Outgoing inspection is

the assignment of a final grade to the product after processing is

completed, according to the requirements of the U.S. Standards for

Grades of Canned Ripe Olives (Standards) [7 CFR 52.3751 to 52.3764].

The committee also recommended that handlers be allowed to size whole

pitted olives by diameter after pitting, as an alternative to the

current requirement that such olives be sized by weight prior to

pitting.

Pursuant to Sec. 932.52 of the order, and Sec. 932.152 of the

current regulations, handlers are required to maintain continuous in-

line outgoing inspection for the handling of processed olives. Pursuant

to Sec. 932.53, such outgoing inspection is performed by the Processed

Products Branch (PPB) of the Department. Continuous in-line outgoing

inspection consists of inspection and grading services in an approved

plant whereby one or more PPB inspector(s) are present at all times the

plant is in operation to make in-process checks on the preparation,

processing, packing, and warehousing of all products and to assure

compliance with sanitary requirements. However, costs for continuous

in-line outgoing inspection have increased in recent years. Thus, the

PPB is prepared to develop QAP inspection procedures which will provide

quality assurance certification for California olive handlers, thereby

reducing handlers' inspection costs.

Currently, most handlers employ their own quality-control

personnel. The PPB is prepared to establish QAPs with individual

handlers as provided in the ``Regulations Governing Inspection and

Certification of Processed Fruits and Vegetables and Related Products''

[7 CFR 52.2]. As established, handlers will be permitted to use a QAP

inspection procedure rather than the currently-mandated continuous in-

line outgoing inspection. Under a QAP, the PPB provides training for

the handler's quality-control personnel. The handler's quality-control

personnel will be trained in the same procedures currently used by the

PPB inspectors. Once the handler's quality-control personnel are

trained to properly perform the same duties and responsibilities as a

PPB inspector, a period of evaluation of the reliability of the

handler's quality control responsibilities begins. This is the

reliability evaluation period. At such time as the handler's quality-

control personnel successfully complete the reliability evaluation

period, a QAP will begin operation with oversight provided by the PPB.

The PPB inspectors will continue to issue certificates of inspection.

Certificates of inspection will be based on outgoing inspection records

maintained by the handler's QAP personnel. These will be verified

through spot-checks and sample regrading by PPB inspectors. A QAP will

continue to assure safe, wholesome, and uniformly high-quality

processed products.

Under a QAP, each handler and the PPB will develop an individually

written plan tailored to each handler's facility. A contract between

the handler and the PPB will also be developed based upon the terms of

the QAP. The contract will be signed at the beginning of the

reliability evaluation. Once a handler's QAP is approved, the handler

is notified in writing and the PPB begins verifying the work of the

handler's QAP personnel. Such verification may include reviews of plant

sanitation, quality and non-quality product analyses, procedures and/or

techniques, case-stamping, checkloading, condition of container, or

other types of procedures normally performed by the PPB. Inclusion of

any or all of these verification procedures will be determined by the

operating characteristics of each handler's facility or facilities.

In the event deviations from proper QAP procedures are detected by

the PPB during the reliability verification process, the handler will

be informed of the problem and corrective action required. If

corrective action is taken, the QAP continues in operation. Continued

deviations may result in suspension of QAP approval. The suspension may

be permanent or temporary and may only be restored upon concurrence by

the PPB. During any suspension, the handler would be required to use

continuous in-line inspection.

Establishing a QAP inspection procedure meets marketing order

inspection requirements, and provides handlers with an alternative to

continuous in-line inspection (which requires the presence of a PPB

inspector during final processing prior to the packaging of olives). To

effectuate this change, paragraphs (a) and (b)(1) of Sec. 932.152,

Outgoing regulations, are revised to add authority for handlers to use

either the QAP process or continuous in-line inspection.

Section 932.52 authorizes sizing of whole pitted olives based upon

count-per-pound designations (the actual weight of individual fruit) or

modifications recommended by the committee and approved by the

Secretary. Section 932.152 currently specifies that all processed

olives must be sized in accordance with the count-per-pound

designations established for canned whole ripe olives, and further

requires that such sizing be done prior to pitting. This interim final

rule provides an alternative method for sizing whole pitted olives to

provide handlers with more flexibility in their operations while

ensuring that appropriate size standards are continued for whole pitted

olives.

The Standards provide a method for sizing whole pitted fruit on the

basis of illustrations and approximate diameter ranges (section

52.3754, Table I). For example, olives that are ``Jumbo'' in size are

those that are approximately 22 to 24 millimeters in diameter and

conform closely with the applicable illustration in Table I. The

committee believes that this sizing method may be more appropriate for

whole pitted olives, which now account for a substantial majority of

the California olives packaged in the whole form. Thus, this rule

authorizes the sizing of whole pitted olives after pitting in

accordance with the illustrations and approximate diameter ranges

provided in the Standards.

The Standards also provide allowances for size variances for whole

pitted olives in Sec. 52.3756. The requirements of U.S. Grade C (the

minimum allowed under the order), provide that of the 60 percent, by

count, of the olives that are most uniform in size, the diameter of the

largest olive cannot exceed the diameter of the smallest olive by more

than 4 millimeters. These variances will be applied to whole pitted

olives when handlers choose to have their pitted olives sized by

diameter, after pitting. The committee believes that these guidelines

for sizing whole pitted olives are sufficient and that no additional

specifications relating to size are needed at this time.

To provide for this change in whole pitted olive sizing

requirements, paragraph (f) of Sec. 932.152 is revised to add authority

for sizing by diameter as provided in the Standards. In addition,

paragraph (b)(1) of Sec. 932.152 is revised by deleting the sentence

which requires sizing prior to pitting. Also, paragraph (b)(2) is

revised to reflect the elimination of the in-line inspection and sizing

prior to pitting requirements.

The outgoing regulations contain a table pertaining to size

certification of limited size olives for limited use styles at

Sec. 932.152(g)(1). In 1991, the committee recommended and the

Secretary approved modifications in the sizes of limited use olives.

While such modifications were reflected elsewhere in the regulations, a

conforming change was not made in Table II of Sec. 932.152(g)(1). This

rule corrects the table, bringing it into conformance with the rules as

they were modified in 1991.

In accordance with section 8e of the Act, olives imported into the

United States are subject to comparable size requirements as

established for domestically grown olives under the order. Those

requirements are found in Olive Regulation 1 [7 CFR 944.401].

Under the import regulation, canned pitted ripe olives are subject

to minimum size requirements in terms of a minimum diameter and a

specific tolerance for undersized fruit. The undersize tolerances set

forth in the import regulation are based upon those established for

canned whole olives under the California olive marketing order.

As previously explained, this interim final rule establishes size

requirements for canned pitted olives under the order in terms of

illustrations, approximate diameter ranges, and size variances which

are set forth in the Standards. Thus, in accordance with section 8e of

the Act, conforming changes are made in the minimum size requirements

for imported canned pitted olives so that such requirements are applied

in a manner similar to that under the order.

Based on the above, the Administrator of the AMS has determined

that this rule will not have a significant economic impact on a

substantial number of small entities.

In accordance with section 8e of the Act, the U.S. Trade

Representative has concurred with the issuance of this interim final

rule.

After consideration of all relevant matter presented, including

information and recommendations submitted by the committee and other

available information, it is hereby found that this rule, as

hereinafter set forth, will tend to effectuate the declared policy of

the Act.

Pursuant to 5 U.S.C. 553, it is also found and determined, upon

good cause, that it is impracticable, unnecessary, and contrary to the

public interest to give preliminary notice prior to putting this rule

into effect, and that good cause exists for not postponing the

effective date of this rule until 30 days after publication in the

Federal Register because: (1) This rule relaxes requirements currently

in effect; (2) this rule should be in effect as soon as possible

because handlers are currently processing olives; (3) this rule was

unanimously recommended by the committee at a public meeting; and (4)

this rule provides a 30-day comment period, and any comments received

will be considered prior to finalization of this rule.

Lists of Subjects

7 CFR Part 932

Marketing agreements, Olives, Reporting and recordkeeping

requirements.

7 CFR Part 944

Avocados, Food grades and standards, Grapefruit, Grapes, Imports,

Kiwifruit, Limes, Olives, Oranges.

For the reasons set forth in the preamble, 7 CFR Parts 932 and 944

are amended as follows:

1. The authority citation for both 7 CFR Parts 932 and 944

continues to read as follows:

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

PART 932--OLIVES GROWN IN CALIFORNIA

2. Section 932.152 is amended by revising paragraphs (a), (b),

(f)(2), (f)(3), and Table II in paragraph (g)(1) to read as follows:

Sec. 932.152 Outgoing regulations.

(a) Inspection stations. Processed olives shall be sampled and

graded only at an inspection station which shall be any olive

processing plant having facilities for in-line inspection which are

satisfactory to the Inspection Service and the committee, or at an

olive processing plant which has an approved Quality Assurance Program

in effect.

(b) Inspection--(1) General. Inspection of packaged olives for

conformance with Sec. 932.52 shall be by a Quality Assurance Program

approved by the Processed Products Branch (PPB), USDA; or by in-line

inspection. A PPB approved Quality Assurance Program shall be pursuant

to a Quality Assurance contract as referred to in Sec. 52.2. During in-

line inspection, no handler shall perform the final processing

operations which immediately precede the packaging of the olives unless

an inspector is present when the olives are so processed.

(2) Pitting operations. If olives are sized prior to pitting and

such olives meet the size requirements for packaging as canned whole

ripe olives but are held in containers prior to final processing, such

olives shall be identified to the satisfaction of the Inspection

Service and be held separate and apart from other olives until such

time as they are submitted for inspection prior to being packaged. If

olives are sized prior to pitting and such olives do not meet the size

requirements for packaging as canned whole ripe olives but meet the

applicable size requirements specified in Sec. 932.52 for halved,

sliced, chopped, or minced styles of canned ripe olives, such olives

shall be identified to the satisfaction of the Inspection Service and

be held separate and apart from other olives until such time as they

are submitted for inspection prior to being packaged.

* * * * *

(f) Size designations (1) * * *

(2) The size of the canned whole olives shall conform with the

applicable count per pound range indicated in Table I of paragraph

(f)(1) of this section. When the count per pound of whole olives falls

between two count ranges, the size designation shall be that of the

smaller size. The average count for canned whole ripe olives is

determined from all containers in the sample and is calculated on the

basis of the drained weight of the olives.

(3) Pitted olives must meet the size requirements for canned whole

olives specified in paragraphs (f)(1) and (f)(2) of this section prior

to pitting, or must meet the size designations specified in

Sec. 52.3754 of the U.S. Standards for Grades of Canned Ripe Olives

subsequent to pitting, subject to the following minimum size

requirements:

(i) Variety group 1 olives, except Ascolano, Barouni, and St.

Agostino varieties, shall be at least ``Extra Large;''

(ii) Variety group 1 olives of the Ascolano, Barouni, and St.

Agostino varieties shall be at least ``Large;''

(iii) Variety group 2 olives, except the Obliza variety, shall be

at least ``Small;''

(iv) Variety group 2 olives of the Obliza variety shall be at least

``Medium.''

(g) * * *

(1) * * *

Table II.--Limited Use Size Olives

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Variety Average count range (per pound)

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Group 1, except Ascolano, Barouni, 76-105, inclusive.

and St. Agostino

Group 1, Ascolano, Barouni, and St. 106-180, inclusive.

Agostino

Group 2, except Obliza 141-205, inclusive.

Group 2, Obliza 128-180, inclusive.

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* * * * *

PART 944--FRUITS, IMPORT REGULATIONS

3. Section 944.401 is amended by revising paragraphs (b)(7) through

(b)(11) to read as follows:

Sec. 944.401 Olive Regulation 1.

(a) * * *

(b) * * *

(7) Canned pitted ripe olives of Variety Group 1, except the

Ascolano, Barouni, and St. Agostino varieties, shall be at least

``Extra Large'' as defined in Sec. 52.3754 of the U.S. Standards for

Grades of Canned Ripe Olives.

(8) Canned pitted ripe Variety Group 1 olives of the Ascolano,

Barouni, and St. Agostino varieties shall be at least ``Large'' as

defined in Sec. 52.3754 of the U.S. Standards for Grades of Canned Ripe

Olives.

(9) Canned pitted ripe olives of Variety Group 2, except the Obliza

variety, shall be at least ``Small'' as defined in Sec. 52.3754 of the

U.S. Standards for Grades of Canned Ripe Olives.

(10) Canned pitted ripe Variety Group 2 olives of the Obliza

variety shall be at least ``Medium'' as defined in Sec. 52.3754 of the

U.S. Standards for Grades of Canned Ripe Olives.

(11) Canned pitted ripe olives not identifiable as to variety or

variety group shall be at least ``Small'' as defined in Sec. 52.3754 of

the U.S. Standards for Grades of Canned Ripe Olives.

* * * * *

Dated: July 21, 1994.

Terry C. Long,

Acting Deputy Director Fruit and Vegetable Division.

[FR Doc. 94-18215 Filed 7-26-94; 8:45 am]

BILLING CODE 3410-02-P