Nectarines and Peaches Grown in California; Relaxation of Quality Requirements for Fresh Nectarines and Peaches

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 916 and 917

[Docket No. FV95-916-5FR]

Nectarines and Peaches Grown in California; Relaxation of Quality

Requirements for Fresh Nectarines and Peaches

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This final rule relaxes, for the 1996 season only, the quality

requirements for California nectarines and peaches. This rule

establishes a ``CA Utility'' quality requirement, based on minimum

quality standards established under the California Agricultural Code,

with a limitation on the amount of fruit meeting U.S. No. 1 or higher

grade requirements that may be contained in the utility pack. This

final rule also requires that containers of nectarines and peaches

meeting the ``CA Utility'' quality requirement be clearly marked ``CA

Utility.'' This final rule will allow more nectarines and peaches into

fresh market channels, and is designed to benefit growers and

consumers.

EFFECTIVE DATE: This final rule becomes effective May 2, 1996.

FOR FURTHER INFORMATION CONTACT: Kenneth Johnson, Marketing Specialist,

Marketing Order Administration Branch, Fruit and Vegetable Division,

AMS, USDA, P.O. Box 96456, Room 2523-S, Washington, DC 20090-6456;

telephone: (202) 720-2861; or Terry Vawter, Marketing Specialist,

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.

SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing

Agreement and Marketing Order Nos. 916 and 917 [7 CFR Parts 916 and

917] regulating the handling of nectarines and peaches grown in

California, respectively, hereinafter referred to as the orders. The

orders are 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 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 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

principal place of business, has jurisdiction to review the Secretary's

ruling on the petition, provided an action 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 Agricultural Marketing Service (AMS) has considered the

economic impact of this action 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 about 300 California nectarine and peach handlers subject

to regulation under the orders covering nectarines and peaches grown in

California, and about 1,800 producers of these fruits in California.

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 are defined as

those whose annual

[[Page 19161]]

receipts are less than $5,000,000. A majority of these handlers and

producers may be classified as small entities.

This final rule establishes, for the 1996 season only, a ``CA

Utility'' quality requirement and a container marking requirement for

shipments of ``CA Utility'' fruit.

Minimum grade requirements for fresh nectarines and peaches grown

in California are in effect under Sec. 916.356 and Sec. 917.459,

respectively. This rule amends Secs. 916.356 and 917.459 by revising

paragraph (a)(1) under each section to permit shipments of fruit

meeting ``CA Utility'' quality requirements. ``CA Utility'' quality

requirements are the same as the requirements set forth in the

California Agricultural Code for nectarines and peaches with the

exception that not more than 30 percent of the fruit in a container may

meet or exceed the requirements of the U.S. No. 1 Grade Standard. ``CA

Utility'' fruit must be inspected by the Federal or Federal-State

Inspection Service and certified as meeting the ``CA Utility'' quality

requirements. ``CA Utility'' fruit are subject to assessment, maturity,

size and all other requirements of the orders.

This rule also amends Secs. 916.350 and 917.442 by adding a

paragraph to each section to specify that each package or container of

nectarines and peaches shipped, meeting the requirements of the newly

established ``CA Utility'' quality, must be conspicuously marked with

the words ``CA Utility'' on a visible display panel.

Shipments of California nectarines and peaches are subject to

minimum grade, size, and maturity requirements under the provisions of

Marketing Orders 916 (section 916.356) during the period April 1

through October 31 each year and 917 (section 917.459) during the

period April 1 through November 23 each year. Currently, nectarine

shipments are required to meet the requirements of U.S. No. 1 Grade,

except less scarring is permitted than under the U.S. No. 1 Grade, and

the tolerance for fruit that is not well formed is greater than the

U.S. No. 1 Grade. Different minimum size requirements are in effect for

different groupings of nectarine varieties.

Peach shipments are currently required to meet the requirements of

U.S. No. 1 Grade, except there is an additional tolerance for fruit

damage caused by open sutures. Also, different minimum size

requirements are in effect for different groupings of peach varieties.

Both the nectarine and peach regulations allow the shipment of

fruit one size smaller than the specified minimum if the fruit meets

higher maturity requirements. Both nectarine and peach shipments are

also subject to container, pack, and container marking requirements.

Prior to the 1995 shipping season, the Nectarine Administrative and

Peach Commodity Committees (Committees), the agencies responsible for

local administration of the orders, considered recommending a change in

the nectarine and peach regulations to allow a utility grade for these

fruits. (Utility grade is a lower quality fruit than U.S. No. 1.)

During the 1995 season, changes were made to allow the shipment of a

utility grade for California plums, which are regulated under a State

program. The plum utility grade was based on California Agricultural

Code requirements. The Committees voted not to recommend a utility

grade for nectarines and peaches for the 1995 season. The Committees

did, however, hire Dr. Dennis Nef, California State University, Fresno,

to conduct a research project to study the potential impact of a

utility grade for nectarines and peaches. The Committees also believed

that industry experience with the plum utility grade would be helpful

in making future recommendations for appropriate quality requirements

for nectarines and peaches. The report prepared by Dr. Nef was

presented to the Nectarine and Peach Grade and Size Subcommittees in

October 1995. The report found that about 22 percent of the peaches

sampled in packinghouse cull bins in 1995 would have met California

Agricultural Code requirements. Of the nectarines sampled from

packinghouse culls in that year, about 6 percent would have met

California Agricultural Code requirements, and an additional 14 percent

failed marketing order quality requirements but met U.S. No. 1 Grade

requirements (as indicated previously, the nectarine requirements under

the order permit less fruit scarring than allowed under the U.S. No. 1

Grade). The report pointed out that these findings were based on a

season which was marked by unusual crop and weather conditions. After

reviewing the report, the nectarine and peach subcommittees voted not

to recommend to the full Committees that a utility grade be implemented

in 1996 for nectarines and peaches, citing the unusual weather

conditions that resulted in below normal crop production. They believed

that Dr. Nef's research project should be continued for another year to

allow for the collection of data based on a more typical season.

On November 29, 1995, the Department wrote to the Committees,

recommending that a utility grade be adopted for nectarines and peaches

for the 1996 season beginning April 1, 1996. The Committees met on

December 6-7, 1995, to discuss possible implementation of a utility

grade for nectarines and peaches for the 1996 season. Committee members

and others in attendance at the meetings expressed views in opposition

to and in support of implementing a utility grade.

Commentors in opposition to a utility grade for nectarines and

peaches stated that the 1995 season was not a normal season for plums,

nectarines, or peaches and should not be used as a basis for

recommending a utility grade. They also said that the tree fruit

industry is facing competition in both domestic and in foreign markets.

One commentor stated that utility grade fruit would damage the

reputation of California-produced tree fruit and another stated that

poor quality California plums had been shipped to Hong Kong during the

1995 season, and that these plums had damaged the overall reputation of

California plums. One commentor stated that allowing a utility grade

would result in inspections of fruit which would only serve to verify

that the fruit in the container is poor quality. Others stated that

lower quality fruit is not wasted and may be used for cattle feed.

Another stated that the results of the recent grower referendum

indicated support for the continuation of the program and the

continuation of current quality standards.

One commentor in support of a utility grade for nectarines stated

that the implementation of a utility grade for plums in 1995 resulted

in a $10 million increase in plum grower revenue. Commentors noted that

less than 10 percent of the plum pack was utility grade. One commentor

stated that while less than one percent of his organization's plum pack

was utility grade, this lower grade should be available for use by

nectarine and peach handlers if a market exists. Others commented that

the Department had recommended a utility grade for nectarines and

peaches for one year only--1996.

Committee members and others who commented at the December 1995

Committee meetings indicated that a niche market may exist for utility

grade fruit and that the opportunity should be made available to market

lower quality fruit to meet demand. Reducing quality requirements would

allow more fruit to be marketed. The lower quality fruit would be made

available at lower prices, which would especially benefit lower income

consumers.

[[Page 19162]]

Data on recent production of California nectarines and peaches in

relation to season average producer prices appear to indicate that

lesser quality fruit could be marketed successfully without interfering

with sales of higher quality fruit. The limited additional quantity

expected to be made available would be expected to have a minimal

effect on consumer purchases and season average producer prices for

California nectarines and peaches. Sales of lesser quality fruit to a

niche market could increase producer revenue and promote consumer

satisfaction.

The implementation of utility quality requirements for the 1996

season would authorize fruit meeting these requirements to be shipped

to market and would provide information on consumer and retailer

acceptance of such fruit. This information could then be used to

supplement information collected by Dr. Nef and assist the Committees

in developing appropriate quality requirements for the 1997 season.

Based on the foregoing, the Department proposed that a utility

grade for nectarines and peaches be implemented on a temporary basis

for the 1996 season. The Department proposed, for purposes of this

regulation, to define ``CTFA Utility'' to mean fruit which meets the

requirements of the U.S. No. 2 Grade defined in the United States

Standards for Grades of Nectarines (7 CFR 51.3145 through 51.3160) and

the United States Standards for Grades of Peaches (7 CFR 51.1210

through 51.1223), except that misshapened fruit and fruit with serious

damage due to scarring would be permitted.

In order to prevent confusion in the marketplace and to clearly

differentiate shipments of ``CTFA Utility'' fruit from better quality

fruit, the Department proposed requiring containers of ``CTFA Utility''

fruit to be conspicuously marked with the words ``CTFA Utility''. In

addition, it was proposed that shipments of such fruit continue to be

required to meet the same container, pack, and container marking

requirements in effect for shipments of higher quality fruit.

A proposed rule concerning this action was published in the March

4, 1996, Federal Register (61 FR 8225), with a 30-day comment period

ending on April 3, 1996. Nine comments were received. Jonathan Field,

Manager of the California Tree Fruit Agreement, and John Tos, Chairman

of the Peach Commodity Committee, submitted comments on behalf of the

Committees, recommending modifications to the proposed rule as

published. Six other commentors supported the establishment of a

utility quality requirement, but did not fully agree with the

Committees' comments: Harry Snyder, Consumers Union of U.S., Inc; Joe

Caram, nectarine grower, Reedley, California; Steven Booz, Reedley,

California; Richard Mittry, tree fruit grower, Sultana, California; Dan

Gerawan, tree fruit grower-shipper, Reedley, California; and Craig

Rasmussen, a grower and packer of California tree fruit, Reedley,

California.

One comment received from Leroy Giannini, a grower-handler of

California tree fruit, Dinuba, California, opposes the establishment of

utility quality requirements. Mr. Giannini states that California

nectarines and peaches have grown in production over the last 30 years

from 1 million cartons annually to almost 20 million cartons. He

attributed this growth to the industry's quality assurance program. Mr.

Giannini states further that during the 1995 season, ``Utility'' grade

plums were marked up at retail, but neither grower nor consumer

interests were well served. Mr. Giannini believes that the goal of

providing lower cost plums to consumers through implementation of the

``Utility'' grade failed to materialize.

Comments supporting modification of the proposed rule addressed

revisions in four areas: Whether the utility quality requirements

should be based on the U.S. Standards for Grades; whether there should

be a limit on the amount of U.S. No. 1 grade fruit in the utility pack;

where utility quality fruit should be permitted to be marketed; and how

utility quality fruit should be labeled.

The Basis for Utility Quality Requirements

As previously indicated, the Department proposed defining utility

quality in terms of a modified U.S. No. 2 grade. In Messrs. Field and

Tos's comments, they state that the Committees support basing nectarine

and peach utility quality requirements on the minimum quality standards

established in the California Agricultural Code. The Committees believe

the quality requirements for California nectarines and peaches should

be consistent with the minimum requirements in place for the California

plum utility grade, which are based on the California Agricultural

Code.

In addition to providing consistency within the California tree

fruit industry, the Committees believe that basing the utility quality

requirements on the California Agricultural Code will result in lower

inspection costs. Mr. Field provided a letter from Mr. John Wiley,

Branch Chief, Shipping Point Inspection, California Department of Food

and Agriculture, which stated that requiring inspectors to review

product for a quality requirement which is not a part of their normal

procedures would increase the cost of inspection, thereby increasing

program costs, particularly to small growers. Mr. Wiley stated further

that, having a proposed quality requirement of U.S. No. 2 with

different tolerances for peaches and nectarines, would increase the

time required for training and supervision as well as increase the

potential for confusion by inspectors and the difficulty of

differentiating between the various grades.

Mr. Gerawan supported using the California Agricultural Code as a

basis for utility quality requirements. The remaining commentors did

not state specifically whether they supported this proposed

modification or not. The Department believes that the Committees' and

Mr. Gerawan's arguments have merit. Also, defining the utility quality

requirements in terms of the California Agricultural Code should not

result in any less fruit being made available to fresh markets. For

these reasons, the Committees' and Mr. Gerawan's proposed revision is

adopted.

Limitation of U.S. No. 1 Grade Fruit in Utility Packs

The Committees support limiting the amount of U.S. No. 1 grade

fruit that can be included in a utility pack. Specifically, they

support a limit of 15 percent in any container. Mr. Field, in his

comment, states that a utility quality requirement must be clearly

distinct from a U.S. No. 1 grade. Failure to provide a clear

distinction could cause confusion in the marketplace and would not meet

the goal of providing low-cost fruit to low-income consumers. Mr. Field

contends that the Department failed to address this issue in its

proposal which to allow for a U.S. No. 2 grade, with a 100 percent

tolerance for misshapen and seriously scarred fruit; and that such

action would, in effect, do away with regulatory grades in place for

California nectarines and peaches. Mr. Field states that containers

could be marked as utility without regard to the amount of U.S. No. 1

therein. Fruit could be packed at 80-85 percent U.S. No. 1 and fail

marketing order requirements, but rather than be repacked, it could be

marked utility and marketed. This would cause confusion in the

marketplace since the fruit would not be adequately distinguished from

U.S. No. 1 grade fruit. By the same token, a container of nectarines or

peaches could have 0 percent U.S. No. 1 or 100 percent U.S. No. 1

product

[[Page 19163]]

inside, but could be marked utility for whatever reason the shipper

determined appropriate. According to Mr. Field, this clearly

demonstrates why the Committees believe it is necessary to establish a

maximum tolerance of 15 percent for U.S. No. 1 grade fruit in

containers marketed as utility grade fruit.

In the comments received in support of the proposed rule, five

commentors stated that the Department should not set a 15 percent

tolerance on U.S. No. 1 grade fruit in containers marked utility. These

commentors contend that it would be too difficult and costly for

packers to meet a 15 percent tolerance because some containers would

not meet the utility quality requirements because they would have too

much ``good fruit'' in the box. These commentors could see no

reasonable justification for limiting the amount of good quality fruit

in a utility pack.

Mr. Rasmussen offered a compromise. He believes that there should

be a limit on the amount of U.S. No. 1 grade fruit in the utility pack

to ensure a distinct difference between the packs, but states the 15

percent limit supported by the Committees was overly restrictive. He

supports a limit of 30 percent. This limit has proved workable for the

California plum industry's use of a utility grade standard.

The Department finds that Mr. Rasmussen's suggested revision is

reasonable. Thus, this rule provides that the amount of fruit in a

container of utility quality fruit that meets or exceeds the

requirements of a U.S. No. 1 grade cannot exceed 30 percent.

Where Utility Quality Fruit May Be Shipped

The Committees, through Mr. Field, also comment that on an

experimental basis, utility quality fruit should be limited to the

domestic markets. Mr. Field opines that under sections 916.54 and

917.43 of the orders, special purpose shipments can be made for

research purposes for special markets. Mr. Field believes that this

authority allows restricting utility grade shipments, which would

enable the nectarine and peach industries to continue studying the

utility quality requirements, the availability of lower quality fruit

to lower income consumers, and the benefits of making the lower quality

product available. Mr. Field believes limiting shipments of utility

quality fruit to the domestic market would allow for these studies to

progress and would allay the fears of the industries that low quality

fruit in export markets is to the long term detriment of the

industries.

Five commentors state that there is no rationale for restricting

the sale of utility quality California nectarines and peaches to

Mexico, where there is believed to be strong market demand for the

product. One commentor--Mr. Rasmussen--did not state a position on this

subject.

The Committees did not provide sufficient evidence that the

adoption of the CA Utility requirement for the 1996 season only would

result in any damage to export markets. Thus, the Committees' proposal

is denied.

Labeling Requirements for Utility Quality Fruit

The Committees, through Mr. Field, comment that the name of the

proposed quality requirement, ``CTFA Utility'' should be known instead

as ``USDA Utility''. The Committees believe that since the Department

initially proposed the utility quality requirements, such quality

requirements should be called ``USDA Utility.'' It is the consensus of

the Committees that the California quality image could be diluted by

using ``California'' or ``CTFA'' to describe the lower quality product.

Mr. Field also states that containers of utility quality California

nectarines and peaches should meet all size, marking, and standard

container requirements, with the additional requirement that the

marking of ``USDA Utility'' should be a minimum height of \3/4\ inches

and on the visible display panel of the box. (The proposed rule did not

specify where such marking should appear.) As provided in the proposed

rule, consumer bags or packages are also required to be to be marked.

Requiring the marking to be on a visible display panel and on consumer

packages will enable consumers and retailers to identify the fruit as

utility quality when it is palletized or on display at the retail

level.

Mr. Rasmussen is the only other commentor who expresses an opinion

on this issue. He states that the utility quality peaches and

nectarines should be known as ``CA Utility.'' This is comparable to the

designation used for California plums, and having the same nomenclature

for peaches and nectarines would be advantageous from the standpoint of

maintaining uniformity among the three commodities and creating less

confusion in the marketplace.

The Department finds that Mr. Rasmussen's position has merit and is

therefore adopted. Further, the Committees' proposal to require the

marking on a visible display panel also has merit and is incorporated

in this final rule.

The intent of this rule is to establish a minimum quality

requirement for California nectarines and peaches to allow more fruit

into fresh market channels, ensure customer satisfaction and improve

returns to producers. Moreover, as previously stated, information

gathered as a result of allowing shipments of ``CA Utility'' quality

fruit, for the 1996 season, can be used to help determine appropriate

quality requirements for California nectarines and peaches for the 1997

season.

This rule reflects the Department's appraisal of the need to revise

the quality and container marking requirements for California

nectarines and peaches. The Department believes that this rule will

have a beneficial impact on producers, handlers, and consumers of

California nectarines and peaches.

Based on available information, 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 Committees, the

comments received, 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 this rule should apply to as

many shipments of California nectarines and peaches as possible. The

shipping seasons for both California nectarines and peaches began on

April 1, 1996. Further, handlers are aware of this rule, which was

recommended in a proposed rule in early March and discussed in public

meetings of the Committees. Also, this rule provides an additional

alternative for handlers of California nectarines and peaches, and no

additional time is needed for those handlers to comply with the relaxed

quality requirements. Finally, a 30-day comment period was provided for

in the proposed rule, and all comments have been considered in

developing this final rule.

List of Subjects

7 CFR Part 916

Marketing agreements, Nectarines, Reporting and recordkeeping

requirements.

[[Page 19164]]

7 CFR Part 917

Marketing agreements, Peaches, Pears, Reporting and recordkeeping

requirements.

For the reasons set forth in the preamble, 7 CFR Parts 916 and 917

are amended as follows:

1. The authority citation for 7 CFR Parts 916 and 917 continues to

read as follows:

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

PART 916--NECTARINES GROWN IN CALIFORNIA

2. Section 916.350 is amended by adding a new paragraph (d) to read

as follows:

Sec. 916.350 California Nectarine Container and Pack Regulation.

* * * * *

(d) During the period April 1 through October 31, 1996, each

container or package when packed with nectarines meeting CA Utility

requirements, shall bear the words ``CA Utility'', along with all other

required container markings, in letters of \3/4\ inch minimum height on

the visible display panel. Consumer bags or packages must also be

clearly marked on the bag or package as ``CA Utility'' along with other

required markings.

3. Section 916.356 is amended by revising paragraph (a)(1) to read

as follows:

Sec. 916.356 California Nectarine Grade and Size Regulation.

(a) * * *

(1) Any lot or package or container of any variety of nectarines

unless such nectarines meet the requirements of U.S. No. 1 grade:

Provided, that nectarines 2 inches in diameter or smaller, shall not

have fairly light colored, fairly smooth scars which exceed an

aggregate area of a circle \3/8\ inch in diameter, and nectarines

larger than 2 inches in diameter shall not have fairly light colored,

fairly smooth scars which exceed an aggregate area of a circle \1/2\

inch in diameter: Provided further, That an additional tolerance of 25

percent shall be permitted for fruit that is not well formed but not

badly misshapen. Provided further, That during the period April 1

through October 31, 1996, any handler may handle nectarines if such

nectarines meet ``CA Utility'' quality requirements. The term ``CA

Utility'' means that not more than 30 percent of the nectarines in any

container meet or exceed the requirements of the U.S. No. 1 grade and

that such nectarines are mature and are:

(i) Free from insect injury which has penetrated or damaged the

flesh; split pits which cause an unhealed crack or one or more well

healed cracks which, either singly or in the aggregate, are more than

\3/8\ inch in length; mold, brown rot, and decay which has affected the

edible portion; and

(ii) Free from serious damage due to skin breaks, cuts, growth

cracks, bruises, or other causes.

(iii) Tolerances. Not more than 10 percent, by count, of the

nectarines in any one container may be below the requirements which are

prescribed by this subparagraph, including not more than 5 percent, by

count, for any one defect, except split pits. An additional tolerance

of 10 percent, by count, of the nectarines in any one container or bulk

lot may contain nectarines affected with split pits. This means a total

tolerance of 20 percent is allowed for all defects, including split

pits, but not to exceed 15 percent for split pits alone.

* * * * *

PART 917--FRESH PEARS AND PEACHES GROWN IN CALIFORNIA

3. Section 917.442 is amended by adding a new paragraph (d) to read

as follows:

Sec. 917.442 California Peach Container and Pack Regulation.

* * * * *

(d) During the period April 1 through November 23, 1996, each

container or package when packed with peaches meeting CA Utility

requirements, shall bear the words ``CA Utility'', along with all other

required container markings, in letters of \3/4\ inch minimum height on

the visible display panel. Consumer bags or packages must also be

clearly marked on the bag or package as ``CA Utility'' along with other

required markings.

4. Section 917.459 is amended by revising paragraph (a)(1) to read

as follows:

Sec. 917.459 California Peach Grade and Size Regulation.

(a) * * *

(1) Any lot or package or container of any variety of peaches

unless such peaches meet the requirements of U.S. No. 1 grade:

Provided, that an additional 25 percent tolerance shall be permitted

for fruit with open sutures which are damaged, but not seriously

damaged. Provided, That during the period April 1 through November 23,

1996, any handler may handle peaches if such peaches meet ``CA

Utility'' quality requirements. The term ``CA Utility'' means that not

more than 30 percent of the peaches in any container meet or exceed the

requirements of the U.S. No. 1 grade and that such peaches are mature

and are:

(i) Free from insect injury which has penetrated or damaged the

flesh; split pits which cause an unhealed crack or one or more healed

cracks which, either singly or in the aggregate, are more than \1/2\

inch in length; and mold, brown rot, and decay; and

(ii) Free from serious damage due to cuts, skin breaks, growth

cracks, bruises, scab, rust, blight, disease, hail or other causes.

Damage to any peach is serious when it causes a waste of 10 percent or

more, by volume, of the individual peach.

(iii) Tolerances. Not more than 10 percent, by count, of the

peaches in any container may be below the requirements prescribed by

this subparagraph. Not more than one-half of this tolerance shall be

allowed for any one cause. Individual containers in any lot may contain

not more than 1 \1/2\ times the tolerances specified if the percentage

of defects of the entire lot averages within the tolerances.

* * * * *

Dated: April 25, 1996.

Robert C. Keeney,

Director, Fruit and Vegetable Division.

[FR Doc. 96-10758 Filed 4-30-96; 8:45 am]

BILLING CODE 3410-02-P