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. FV93-932-3FIR]

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: Final rule.

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SUMMARY: The Department of Agriculture (Department) is adopting as a

final rule, with changes, the provisions of an interim final rule

amending 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 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.

EFFECTIVE DATE: Effective on December 7, 1994.

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

SUPPLEMENTARY INFORMATION: This 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 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 final rule in conformance with

Executive Order 12866.

This final rule has been reviewed under Executive Order 12778,

Civil Justice Reform. This final 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 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 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 interim final rule was issued on July 21, 1994, and published

in the Federal Register [59 FR 38104, July 27, 1994], with an effective

date of July 27, 1994. That rule amended Secs. 932.152, and 932.401 of

regulations in effect under the order. That rule provided a 30-day

comment period which ended August 26, 1994. No comments were received.

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

requirement that such olives be sized by weight prior to pitting.

Prior to the interim final rule, Sec. 932.52 of the order and

Sec. 932.152 of the regulations required handlers to maintain

continuous in-line outgoing inspection for the handling of processed

olives. Also, 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 Part 52.2]. As established, handlers will be permitted to use a

QAP inspection procedure rather than 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. Prior to the interim final rule, Sec. 932.152 specified that

all processed olives must be sized in accordance with the count-per-

pound designations established for canned whole ripe olives, and

further required that such sizing be done prior to pitting. This 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 (Sec. 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.

This rule changes the interim final rule published in the Federal

Register July 27, 1994 [59 FR 38104]. That rule modified Table II in

Sec. 932.152, paragraph (g)(1), to conform to rule changes made in

1991. However, further changes were made to Table II in an interim

final rule published in the Federal Register on September 13, 1994 [59

FR 46907]. This final rule therefore conforms with the changes in the

most recent interim final rule.

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 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 final rule.

After consideration of all relevant matter presented, including

information and recommendations submitted by the committee and other

available information, it is found that finalizing the interim final

rule, with changes, as published in Federal Register [59 FR 38104],

will tend to effectuate the declared policy of the Act.

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. Accordingly, the interim final rule amending 7 CFR Part 932

which was published at 57 FR 38104 on July 27, 1994, is adopted as a

final rule with the following change:

Table II in Sec. 932.152(g)(1) is revised to read as follows:

Sec. 932.152 Outgoing regulations.

* * * * *

(g) * * *

(1) * * *

Table II.--Limited Use Size Olives

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Average count range (per

Variety pound)

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Group 1, except Ascolano, Barouni, and St. 76-90, inclusive.

Agostino.

Group 1, Ascolano, Barouni, and St. Agostino 106-140, inclusive.

Group 2, except Obliza...................... 141-180, inclusive.

Group 2, Obliza............................. 128-140, inclusive.

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PART 944--FRUITS, IMPORT REGULATIONS

3. Accordingly, the interim final rule amending 7 CFR Part 944

which was published at 59 FR 38104 on July 27, 1994, is adopted as a

final rule without change.

Dated: November 1, 1994.

Eric M. Forman,

Deputy Director, Fruit and Vegetable Division.

[FR Doc. 94-27517 Filed 11-4-94; 8:45 am]

BILLING CODE 3410-02-P