Kiwifruit Grown in California; Revision of Pack and Reporting Requirements

SUMMARY: This final rule revises pack and reporting requirements

established under the Federal marketing order for kiwifruit grown in

California. The first change standardizes packaging for certain volume

filled containers packed by weight. For the 1994/95 season only, volume

filled containers packed by weight will be required to be 22- or 23-

pounds net weight if more than 10 pounds and less than 35 pounds.

Thereafter, a 22-pound volume filled standard will be effective. The

second change streamlines information collection requirements under the

program by deleting a requirement that handlers file a Beginning

Inventory Data form and adding reporting requirements for a Kiwifruit

Inventory Shipment System (KISS) form. Since the KISS form is already

in use by handlers, this requirement merely formalizes existing

industry use of the KISS form.

EFFECTIVE DATE: This final rule becomes effective October 25, 1994.

FOR FURTHER INFORMATION CONTACT:

Rose Aguayo, California Marketing Field Office, Marketing Order

Administration Branch, Fruit and Vegetable Division, AMS, USDA, 2202

Monterey Street, Suite 102B, Fresno, California 93721; telephone (209)

487-5901; or Mark Hessel, Marketing Order Administration Branch, Fruit

and Vegetable Division, AMS, USDA, P.O. Box 96456, Room 2526-S,

Washington, DC 20090-6456, telephone (202) 720-5127.

SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing

Order No. 920 [7 CFR Part 920], as amended, regulating the handling of

kiwifruit grown in California, hereinafter referred to as the

``order.'' The order is effective under the Agricultural Marketing

Agreement Act of 1937, as amended [7 U.S.C. 601-674], hereinafter

referred to as the ``Act.''

The Department of Agriculture (Department) is issuing this rule in

conformance with Executive Order 12866.

This final rule has been reviewed under Executive Order 12778,

Civil Justice Reform. This rule is not intended to have retroactive

effect. This final rule will not preempt any State or local laws,

regulations, or policies, unless they present an irreconcilable

conflict with this rule.

The Act provides that administrative proceedings must be exhausted

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

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

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

obligation imposed in connection with the order is not in accordance

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

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

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

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

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

principle 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.

Pursuant to requirements set forth in the Regulatory Flexibility

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

(AMS) has considered the economic impact of this rule on small

entities.

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

business subject to such actions in order that small businesses will

not be unduly or disproportionately burdened. Marketing orders issued

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

they are brought about through group action of essentially small

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

entity orientation and compatibility.

There are approximately 65 handlers of California kiwifruit subject

to regulation under the order and approximately 600 kiwifruit producers

in the production area. Small agricultural service firms are defined by

the Small Business Administration [13 CFR 121.601] as those whose

annual receipts are less than $5,000,000, and small agricultural

producers have been defined as those having annual receipts of less

than $500,000. A majority of handlers and producers of California

kiwifruit may be classified as small entities.

Under the terms of the order, fresh market shipments of California

kiwifruit are required to be inspected and are subject to grade, size,

maturity, pack, and container requirements.

The Kiwifruit Administrative Committee (committee), the agency

responsible for local administration of the order, met on February 10,

1994, and unanimously recommended the following changes:

Pack Requirements

The committee recommended standardizing the weight of certain

volume filled containers by requiring such containers to be marked by

weight at either 22-pounds or 23-pounds net weight through July 31,

1995. For subsequent seasons, volume filled containers will be

standardized at 22 pounds. Paragraph (a)(3) of Sec. 920.52 specifies

that the Secretary may fix the weight of containers used in the

handling of kiwifruit.

In a volume filled container, fairly uniform size kiwifruit are

loosely packed without cell compartments, cardboard fillers or molded

trays. Handlers may ship volume filled containers marked by either the

appropriate count or net weight of kiwifruit. Handler shipments are

based upon the preference of the receiver. Volume filled containers

marked by count will not be affected by this change. Also, containers

of less than 10-pounds or more than 35-pounds net weight will not be

affected by this revised weight standard. Thus the industry will

continue to have the flexibility to utilize containers of different

weights for a variety of buyer preferences.

Last season the industry standardized the weight of all volume

filled containers of kiwifruit designated by weight at 23-pounds net

weight of kiwifruit unless such containers hold less than 10-pounds or

more than 35-pounds net weight of kiwifruit. The industry has since

learned that the recognized world standard for volume filled containers

of kiwifruit is 10-kilograms (10-kg) net weight which is equal to

approximately 22 pounds. The industry has also become aware that

neither foreign nor domestic buyers wish to pay more for a 23-pound box

than for a 22-pound (10-kg) box. As a result, California marketers

selling 23-pound containers have been disadvantaged in both export and

domestic markets compared to marketers from other countries selling 22-

pound (10-kg) containers of fruit.

The change to a standard container weight of 22-pounds net weight

will enable the industry to mark volume filled containers both in terms

of a unit of measure in pounds and with a metric weight. Standardizing

the weight of volume filled containers marked by weights recognized in

the world market will standardize marketing practices for the kiwifruit

industry.

The committee considered immediately standardizing the minimum

weight for volume filled containers at only 22 pounds (10 kg) rather

than at 22 pounds or 23 pounds. However, all committee members were in

favor of allowing handlers to continue to also pack or ship to the 23-

pound standard for the 1994/95 season to enable handlers to utilize

existing inventories of boxes and labels. Thus the requirement to ship

only 22-pound net weight containers will be effective for the 1995-96

and subsequent seasons.

This final rule will impact all handlers in the same manner. The

same size container currently used for the 23-pound standard can be

used for the 22-pound (10-kg) standard. It is anticipated that only a

small number of packages will be shipped in 23-pound containers during

the 1994/95 season. This is because handlers shipping 23-pound

containers have already expressed the concern that they do not receive

a price premium for the extra pound of fruit in each container. This

concern will be remedied by deleting the preprinted marking of 23

pounds, relabeling the container to read 22 pounds, and filling the

container with 22 pounds of fruit. This change will impose some minimal

costs on those handlers who choose to print new labels or convert 23-

pound volume filled containers into other types of containers. However,

the overall benefits to the California kiwifruit industry by

standardizing volume filled containers at 22 pounds (10 kg), with the

option of using existing labels and boxes for the 1994/95 season, will

more than offset the costs imposed on handlers.

Reporting Requirements

Paragraphs (a) and (b) of Sec. 920.60 authorize reporting

requirements for kiwifruit handlers under the marketing order. Pursuant

to Sec. 920.160, the marketing order requires a Beginning Inventory

Data form to be filed with the committee by each handler no later than

five days after all fruit has been packed for the season, or such other

later time as the committee may establish. This information includes

beginning inventory by container type and by fruit size.

In 1990, the California Kiwifruit Commission, hereinafter referred

to as the ``State commission,'' adopted the Kiwifruit Inventory

Shipment System (KISS) form. The KISS form is comprised of three

sections: (1) The ``KISS/Add Inventory'' requires all handlers to

report their beginning inventories by size and container type.

Inventory includes all fruit packed at harvest; (2) The ``KISS/Deduct

Inventory'' requires all handlers to report fruit lost in repack, fruit

repacked into another container type, and adjustments to decrease

posted inventory; and (3) The ``KISS/Shipments'' requires all handlers

to report shipments by size and container type.

All three sections of the KISS form will be filed with the

committee, on or before December 5th, or such other later time as the

committee may establish. Subsequent KISS forms, including all three

sections, will be filed with the committee by the fifth day and again

by the twentieth day of each calendar month, or such other later time

as the committee may establish.

The adoption of the KISS form by the State commission resulted in

redundant reporting requirements in the kiwifruit industry. The KISS

form collects the same information as the Beginning Inventory Data

form. This information is used to verify the total amount of fruit

available for shipping, to calculate statistics, and to determine if

assessments billed match reported shipments. In an effort to eliminate

the redundant reporting requirements, the committee recommended that

the Beginning Inventory Data form reporting requirement be deleted from

paragraph (b) of Sec. 920.160 and the KISS form reporting requirements

be added. This rule is intended to enable kiwifruit handlers to

efficiently file one form to meet the requirements of both the State

commission and the Federal marketing order. Deleting the requirement

for the Beginning Inventory Data form in paragraph (b) of Sec. 920.160

and utilizing the KISS form will eliminate the submission of duplicate

information.

In accordance with the Paperwork Reduction Act of 1980 [44 U.S.C.

Chapter 35], the information collection requirements contained in this

rule have been approved by the Office of Management and Budget (OMB)

and have been assigned OMB No. 0581-0149. Eliminating the Beginning

Inventory Data form will decrease the information collection burden for

the industry by 65 hours. It has been estimated that it will take an

average of .5 hours for each of the approximately 65 handlers of

kiwifruit to complete the KISS form. Thus the finalized change will

increase the overall burden by 325 hours because the KISS form is filed

with the committee more frequently.

A proposed rule concerning this action was published in the Federal

Register on August 14, 1994 [59 FR 41717], with a 30-day comment period

ending September 14, 1994. No comments were received.

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

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

substantial number of small entities.

After consideration of all relevant matter presented, including the

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.

It is further found that good cause exists for not postponing the

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

Federal Register [5 U.S.C. 553] because: (1) Handlers have begun

labeling boxes in preparation of shipping kiwifruit for the 1994/1995

season which began in mid-September; (2) Handlers are aware of this

rule, which was unanimously recommended by the committee at a public

meeting; and (3) a 30-day comment period was provided for in the

proposed rule.

List of Subjects in 7 CFR Part 920

Kiwifruit, Marketing agreements, Reporting and recordkeeping

requirements.

For the reasons set forth in the preamble, 7 CFR Part 920 is

amended as follows:

PART 920--KIWIFRUIT GROWN IN CALIFORNIA

1. The authority citation for 7 CFR Part 920 continues to read as

follows:

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

2. In Sec. 920.160, paragraph (b) is revised to read as follows:

Sec. 920.160 Reports.

* * * * *

(b) Kiwifruit Inventory Shipping System (KISS) form.

Each handler shall file with the committee the initial Kiwifruit

Inventory Shipment System (KISS) form, which consists of three sections

``KISS/Add Inventory,'' ``KISS/Deduct Inventory,'' and ``KISS/

Shipment,'' on or before December 5th, or such other later time as the

committee may establish. Subsequent KISS forms, including all three

sections, shall be filed with the committee by the fifth day and again

by the twentieth day of each calendar month, or such other later time

as the committee may establish, and will contain the following

information:

(1) The beginning inventory of the handler by size and container

type;

(2) The quantity of fruit the handler lost in repack and repacked

into other container types;

(3) The total domestic and export shipments of the handler by size

and container type; and

3. In Sec. 920.302, paragraph (a)(4)(iv) is revised to read as

follows:

Sec. 920.302 Grade, size, pack and container regulations.

* * * * *

(4) * * *

(iv) All volume filled containers of kiwifruit designated by weight

shall hold 22-pounds (10-kilograms) net weight of kiwifruit unless such

containers hold less than 10-pounds or more than 35-pounds net weight

of kiwifruit. Provided, That for the season ending July 31, 1995, such

containers may also hold 23-pounds net weight of kiwifruit.

* * * * *

(4) Any other adjustments which increase or decrease posted handler

inventory.

* * * * *

Dated: October 19, 1994.

Eric M. Forman,

Deputy Director, Fruit and Vegetable Division.

[FR Doc. 94-26459 Filed 10-20-94; 4:30 pm]

BILLING CODE 3410-02-P