Grapes Grown in a Designated Area of Southeastern California; Revision of Container Requirements

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 925

[Docket No. FV95-925-1FIR]

Grapes Grown in a Designated Area of Southeastern California;

Revision of Container Requirements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

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

which added two new containers to the list of containers authorized for

use by table grape handlers regulated under the marketing order. This

rule also reduces the minimum net weight of containers of California

table grapes from 22 pounds to 20 pounds and for grapes packed in poly

bags from 20 pounds to 18 pounds. The marketing order regulates the

handling of table grapes grown in a designated area of Southeastern

California. The marketing order is locally administered by the

California Desert Grape Administrative Committee (CDGAC). This rule

allows for more efficient use of containers and helps handlers meet

industry needs.

EFFECTIVE DATE: July 1, 1996.

FOR FURTHER INFORMATION CONTACT: Charles L. Rush, Marketing Order

Administration Branch, Fruit and Vegetable Division, AMS, USDA, P.O.

Box 96456, room 2526-S, Washington, DC 20090-6456, telephone (202) 690-

3670; or Rose M. 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.

SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing

Order No. 925 [7 CFR Part 925], as amended, regulating the handling of

table grapes grown in a designated area of Southeastern 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 final

rule in conformance with Executive Order 12866.

This rule has been reviewed under Executive Order 12778, Civil

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

This 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 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 20 handlers of California table grapes

subject to regulation under the order and approximately 80 table grape

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 minority of handlers and producers are classified as

small entities.

This rule finalizes changes in the container requirements under the

marketing order for grapes grown in designated areas of Southeastern

California. This rule also finalizes a reduction in the minimum net

weight of containers of California table grapes from 22 pounds to 20

pounds and for grapes packed in poly bags from 20 pounds to 18 pounds.

These changes were unanimously recommended by the CDGAC.

An interim final rule was issued on March 11, 1996, and published

in the Federal Register (61 FR 11127, March 19, 1996), with an

effective date of March 19, 1996. That rule amended Sec. 925.304 of the

rules and regulations in effect under the order. That rule provided a

30-day comment period which ended April 18, 1996. No comments were

received. A correction document was issued on March 25, 1996, and

published in the Federal Register (61 FR 14013, March 29, 1996). The

document corrected amendatory language number 2 of the interim final

rule.

This action is in accordance with Sec. 925.52(a)(4) of the order.

This section authorizes the Secretary to fix the size, capacity,

weight, dimensions, markings,

[[Page 27246]]

materials, and pack of containers which may be used in the handling of

grapes.

Prior to the effective date of the interim final rule, Sec. 925.304

(b)(2) of the regulations specified that the minimum net weight

requirement for grapes in any container, except for containers

containing grapes packed in sawdust, cork, excelsior, or similar

packing material, or packed in bags or wrapped in plastic or paper, and

experimental containers, be 22 pounds based on the average net weight

of grapes in a representative sample of containers. Containers of

grapes packed in bags or wrapped in plastic or paper prior to being

placed in these containers were required to meet a net weight

requirement of 20 pounds.

Section 925.304 (b)(1) of the regulations specified the dimensions

of six containers that could be used by handlers of table grapes and

authorized the use of other types and sizes of containers on an

experimental basis.

The CDGAC met on November 27, and December 4, 1995, and unanimously

recommended changes in the container requirements. Specifically, the

CDGAC recommended reducing the minimum net weight of containers from 22

to 20 pounds and for containers of grapes wrapped or packed in poly

bags from 20 to 18 pounds, effective April 20, 1996. The CDGAC also

unanimously recommended adding two new containers (38S, 12 x 20 inches)

and (38T, 13\1/8\ x 15\7/8\ inches) to the list of authorized

containers. These changes are intended to improve the quality of grapes

delivered to consumers and reduce handling costs.

The genesis for discussion of revising containers used to pack

grapes began about 6 years ago when the recyclability of packaging

materials became of interest to consumers worldwide and then to

retailers who bore the brunt of consumers' concern. In addition to the

environmental concern expressed by consumers, retailers were concerned

about the increasing costs of disposing of packing and shipping

materials.

Simultaneously, in an effort to differentiate themselves in the

marketplace, many in the retail industry began demanding that grape

growers provide custom packs. One customer wanted only a certain type

of bag, another wanted only 5-kilo bags, another wanted bags with

nothing printed on them, while yet another wanted a special store code.

These kinds of demands from the retail and food service industry

led to a great deal of packaging experimentation within the California

grape industry. It also led to the realization that it had been 25

years since there had been any quantifiable packaging research. The

industry decided to take a critical look at grape packaging and

determine if current practices were getting the product to the retailer

and ultimately the consumer in the best possible condition; and if not,

what changes needed to be made to improve delivery. Toward that end,

the California Table Grape Commission funded a three-year research

project designed to answer a simple question: what types of containers

get grapes to the consumer in the best possible condition?

Grapes are a fragile product. The current method of packing is a

holdover from 25 years ago when grapes were sold at auctions and it was

considered a marketing advantage to overpack the box so that when

buyers looked at the box it was bulging with fruit. Too often though,

what they did not see was the condition of the fruit inside; crushed,

split or falling off the stem. In addition, the standard lug box in use

today was designed to fit railroad cars. Shipping grapes by rail car is

a part of the industry's past.

The study of table grape packaging was conducted by the University

of California at Davis and the University of California at Kearney

Agricultural Center at Parlier. The objective of the study was to

develop knowledge concerning packaging that allows the movement of

table grapes from the field to the consumer in the best possible

condition. At the reduced weight, the damage to the grapes,

particularly in terms of bruising, splitting and shattering, decreases.

Table grapes of most varieties suffered considerable damage when packed

at net weights of 22 or 23 pounds. The damage was reduced considerably

when the pack weights were reduced to 20 to 21 pounds.

Through the research conducted the CDGAC determined that other

container size and net weight options available were not in the best

interest of the industry. Further, wholesalers and retailers support

the recommended changes, and believe it is the best option.

Thus, the CDGAC's recommendation to reduce the minimum net weight

requirements is expected to result in higher quality grapes being

offered to consumers. This should increase satisfaction, strengthen

demand, and improve returns to growers and handlers.

Most grapes packed in California are palletized on 35- x 42-inch or

53- x 42-inch pallets prior to shipment. When received by wholesalers

or retailers, the grapes are unloaded and restacked on 48- x 40-inch

pallets.

Grocery and wholesale warehouse operations use 48- x 40-inch

pallets as the standard pallet for most products. The bulk of product

sold at retail outlets (e.g., cereal, paper products, canned goods,

etc.) are dry goods. These products are generally shipped on 48- x 40-

pallets. Consequently, the distribution channel is set up to

accommodate 48- x 40-inch pallets.

Nonstandard pallets such as those used by grape handlers have to be

disposed of at the receivers' expense. However, with the use of 48- x

40-inch pallets, which can be recycled, there should be a reduction in

expenses associated with pallets. The recycling program allows the

receiver to use the pallet more than once or remove it from the waste

stream to use or sell.

The changes in container requirements are supported by the

California Department of Agriculture, the California Grape and Tree

Fruit League, the California Table Grape Commission, the Food Marketing

Institute, and the National Association of Perishable Agricultural

Receivers. These organizations have all agreed that the reduction in

net weight is necessary to facilitate the implementation of an

industry-wide adoption of the standardized 48- x 40-inch pallet and the

incidence of damage to fruit due to over packing.

Thus, this rule allows the industry to use more efficient

containers and provides handlers with more flexibility in packing table

grapes. Imported table grapes will not be affected by this rule.

Based on the above, 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 material presented, including

the CDGAC's recommendation, and other available information, it is

found that finalizing the interim final rule, which was published in

the Federal Register (61 FR 11127, March 19, 1996) and corrected in the

Federal Register (61 FR 14013, March 29, 1996) will tend to effectuate

the declared policy of the Act.

List of Subjects in 7 CFR Part 925

Grapes, Marketing agreements, Reporting and recordkeeping

requirements.

For the reasons set forth in the preamble, 7 CFR part 925 is

amended as follows:

1. The authority citation for 7 CFR part 925 continues to read as

follows:

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

[[Page 27247]]

PART 925--GRAPES GROWN IN A DESIGNATED AREA OF SOUTHEASTERN

CALIFORNIA

Accordingly, the interim final rule amending 7 CFR part 925 which

was published at 61 FR 11127, March 19, 1996, and corrected at 61 FR

14013, March 29, 1996, is adopted as a final rule.

Dated: May 22, 1996.

Robert C. Keeney,

Director, Fruit and Vegetable Division.

[FR Doc. 96-13616 Filed 5-30-96; 8:45 am]

BILLING CODE 3410-02-P