Olives Grown in California and Imported Olives; Establishment of Minimum Quality Requirements for California and Imported Olives, and Revision of Outgoing Inspection Requirements and Procedures for California Olives

Federal RegisterNov 8, 1996

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SUMMARY: This proposal invites comments on the establishment of minimum

quality requirements for California olives under Marketing Order 932

and imported olives to replace grade requirements currently in effect

which are based on the U.S. Standards for Grades of Canned Ripe Olives

(standards). This proposal would also revise outgoing inspection

requirements and procedures for California olives. This action is

expected to result in reduced handling costs, especially inspection

costs, and improved consumer satisfaction.

DATES: Comments must be received by November 25, 1996.

ADDRESSES: Interested persons are invited to submit written comments

concerning this proposal. Comments must be sent in triplicate to the

Docket Clerk, Fruit and Vegetable Division, AMS, USDA, room 2525-S,

P.O. Box 96456, Washington, DC 20090-6456, Fax # (202) 720-5698. All

comments should reference the docket number and the date and page

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

for public inspection in the Office of the Docket Clerk during regular

business hours.

FOR FURTHER INFORMATION CONTACT: Terry Vawter, Marketing Specialist,

California Marketing Field Office, Marketing Order Administration

Branch, F&V, AMS, USDA, 2202 Monterey Street, suite 102B, Fresno,

California 93721; telephone (209) 487-5901; Fax # (209) 487-5906; or

Caroline Thorpe, Marketing Specialist, Marketing Order Administration

Branch, F&V, AMS, USDA, room 2522-S, P.O. Box 96456, Washington, D.C.

20090-6456; telephone (202) 720-8139; Fax # (202) 720-5698. Small

businesses may request information on compliance with this regulation

by contacting: Jay Guerber, Marketing Order Administration Branch,

Fruit and Vegetable Division, AMS, P.O. Box 96456, room 2523-S,

Washington, D.C. 20090-6456; telephone (202) 720-2491; Fax # (202) 720-

5698.

SUPPLEMENTARY INFORMATION: This proposal is issued under Marketing

Order No. 932 (7 CFR Part 932), 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 proposed rule is also issued under section 8e of the Act,

which provides that whenever certain specified commodities, including

olives, are regulated under a Federal marketing order, imports of these

commodities into the United States are prohibited unless they meet the

same or comparable grade, size, quality, or maturity requirements as

those in effect for the domestically produced commodities.

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

conformance with Executive Order 12866.

This proposal has been reviewed under Executive Order 12988, Civil

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

This proposal 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.

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 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. Import regulations issued under

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

There are 5 handlers of olives who are subject to regulation under

the order, and approximately 1,350 producers of olives in the regulated

area. There are approximately 25 importers of olives subject to the

olive import regulation. Small agricultural service firms, which

includes handlers and importers, have been defined by the Small

Business Administration (13 CFR 121.601) as those having annual

receipts of less than $5,000,000, and small agricultural producers are

defined as those having annual receipts of less than $500,000. None of

the handlers is considered a small entity, but the majority of olive

producers and importers may be classified as small entities.

The California Olive Committee (committee) met on March 27, 1996,

and unanimously recommended establishing minimum quality requirements

to be incorporated within the rules and regulations of the order and

revising

[[Page 57783]]

outgoing inspection requirements and procedures. At a meeting on July

10, 1996, the committee recommended a change in their recommendations

of March 27, 1996, with regard to an outgoing inspection requirement.

Currently under the marketing order, incoming inspection

requirements at Sec. 932.51 require handlers to weigh and size-grade

olives prior to processing, and dispose of non-canning size

(undersized) olives into appropriate non-canning outlets. Such weighing

and size-grading is done under the supervision of the Federal or

Federal-State Inspection Service. These requirements provide the basis

for handler payments to producers, and ensure that olives are properly

sized into the various canning and non-canning size categories.

Once the olives have been size-graded, they are stored in tanks,

ensuring that the various sizes of olives remain segregated. Non-

canning size olives are disposed of into appropriate outlets, such as

in frozen or acidified forms, or crushed for oil.

Outgoing inspection requirements at Sec. 932.52 and Sec. 932.149

specify the minimum quality of canned ripe olives as a modified U.S.

Grade C as certified by inspectors of the USDA, Processed Products

Branch (PPB). Certification as to grade provides handlers and their

customers with a uniform level of quality familiar to both parties. The

outgoing inspection requirements also ensure that canned ripe olives

meet applicable size designations prior to shipment. Two methods of

outgoing inspection are authorized: a Quality Assurance Program (QAP)

approved by the PPB or in-line inspection.

This rule adds the option of lot inspection to assist handlers in

reducing inspection costs. Currently, during in-line inspection, an

inspector is required to be present any time olives are in the final

stage of processing prior to packaging. The current cost for an

inspector ranges from $34.00 to $42.00 per hour. For an 8-hour day the

cost of one inspector ranges from $272.00 to $328.00. Because of this,

handlers may benefit from economies of scale: the more olives produced,

the less cost per can of olives.

In 1994, QAPs were added as an option to reduce inspection costs.

Under QAPs, savings are more likely to accrue to larger-volume

handlers, who are more likely to have sufficient olives to operate

year-round and realize savings by employing trained quality-control

personnel. When there is a large crop, more handlers may benefit from

QAPs for similar reasons.

Adding lot inspection will offer handlers a less-costly inspection

option. During lot inspection, an inspector does not need to be present

during the final processing, unlike in-line inspection. However, an

inspector will inspect a statistical percentage of a lot of olives

whether the lot is large or small. Thus, there is less benefit of

economies of scale because for large lots more olives will be inspected

and for small lots fewer olives will be inspected.

The committee recommended changes in some of the inspection

requirements to reduce handlers' costs, especially the costs of

inspection, and to address the concerns of consumers of canned ripe

olives. The changes would simplify the inspection process by

eliminating steps which have been made unnecessary by modern olive

processing and pitting equipment. This would reduce handling costs,

including inspection costs, thereby improving returns to California

producers and handlers. Similar cost savings should accrue to importers

because of simplified inspection procedures.

The changes would also address consumer concerns, as identified

through a 1995 consumer survey which the committee undertook. Surveyed

consumers indicated that flavor, color, and character (softness) are

quality criteria most important to them. The changes would address

consumer concerns by evaluating quality based upon those criteria. This

would ensure that consumer satisfaction is met, benefitting the

California olive industry, importers, and consumers.

Therefore, the AMS has determined that this action would not have a

significant economic impact on a substantial number of small entities.

Interested persons are invited to submit information on the regulatory

and informational impacts of this action on small businesses.

Establishment of Minimum Quality Requirements

Currently, Sec. 932.149 specifies that canned olives meet a minimum

grade requirement of a modified U.S. Grade C. Additional specific

requirements are established for the various styles of canned ripe

olives, including whole, pitted, broken pitted, halved, segmented

(wedged), sliced, and chopped styles. Section 932.149 references

various definitions from the standards.

In place of these grades and definitions, the committee has

proposed a set of minimum quality requirements for four styles of

canned olives: (1) Whole and pitted style olives; (2) sliced, segmented

(wedged), and halved style olives; (3) chopped style olives; and (4)

broken pitted olives. These quality requirements include criteria

pertaining to flavor, saltiness, color, character (softness),

uniformity of size and freedom from defects. These factors are similar

to those currently specified in the standards and handling regulations,

and have been determined to be of importance to consumers through the

committee's consumer survey.

Olives are currently graded based upon five factors: flavor,

saltiness, color, character (softness), and defects. Currently, Table I

in Sec. 932.149 only sets limits for defects of canned ripe olives.

Limits for the other four factors, flavor, saltiness, color, and

character, are defined in the standards. In place of Table I, based

upon information from the 1995 consumer survey, the committee has

proposed establishing four new tables which would specify the limits

for defects for each of the canned ripe olive styles (whole and pitted

styles; sliced, segmented (wedged), and halved styles; chopped style;

and broken pitted style). The new tables would also define the limits

of the four characteristics (flavor, saltiness, color, and character)

currently defined in the standards. The four new tables would provide

all the definitions and tolerances necessary to establish minimum

quality requirements in place of grade requirements.

To effectuate the proposed establishment of minimum quality

requirements, references to ``grade'' in Sec. 932.149 would be replaced

with ``quality'', canned broken pitted olives would be defined

separately in a new paragraph designated as (a)(4), and four new tables

depicting minimum quality requirements for (1) canned whole and pitted

olives; (2) canned sliced, segmented (wedged), and halved olives; (3)

canned chopped style olives; and (4) canned broken pitted style olives

would be added to Sec. 932.149, replacing the current Table 1.

In conforming changes, the word ``grade'' would be replaced with

the words ``minimum quality'' or ``minimum quality requirements,'' as

necessary, in Sec. 932.150, Sec. 932.153, and Sec. 932.155.

Section 932.149(a)(2) currently sets the tolerance for identifiable

pieces of pit caps, end slices, and slices at 5 percent, by weight, for

canned chopped style olives. The committee recommended a relaxed

tolerance of 10 percent, by weight, in an effort to encourage handlers

to cut olives of the chopped style in larger pieces. The committee was

concerned that canned chopped style olives are currently chopped too

finely, rendering the product nearly an olive ``flour'' rather

[[Page 57784]]

than identifiable pieces of olives consumers indicated they preferred.

This change would reduce the costs of packing canned chopped style

olives.

The committee recommended that the definition of ``broken pitted''

olives be modified from the definition provided in the standards. To

accomplish this, the committee proposed a modified definition in

Sec. 932.149 of the regulations. The current definition is considered

too restrictive by the committee. Under the current definition, broken

pitted olives are defined as ``olives [which] consist substantially of

large pieces that may have been broken in pitting but have not been

sliced or cut.'' Currently, each handler packing broken pitted olives

is prohibited from using olives which have been improperly pitted but

unbroken because the olives have not been ``broken'' in the pitting

process. (Improperly pitted olives do not contain pits or pit

fragments.) Each such handler, therefore, pays an employee to ``break''

the unbroken, improperly pitted olives so that such olives meet the

requirement for broken pitted olives. As recommended by the committee,

the proposed definition for broken pitted olives would delete the word

``substantially,'' thereby permitting a greater percentage of unbroken,

improperly pitted olives to be included in the broken pitted style

category. Such change is intended to reduce the costs of packing broken

pitted olives while maintaining the quality of the product.

The committee further recommended basing outgoing inspections on a

pass-fail basis, eliminating the requirement that the inspection

service certify that canned ripe olives are either Grade A, Grade B, or

Grade C. Under a pass-fail outgoing inspection, canned ripe olives

would either meet the minimum quality requirements and pass inspection,

or fail to meet the minimum quality requirements and not pass

inspection. There would be no need to calculate the grade of each

sample in order to assign Grade A, Grade B, or Grade C. Elimination of

the requirement to certify to a grade would simplify the inspection of

such olives, thereby reducing inspection time and overall inspection

costs.

Authorized Methods of Outgoing Inspection

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

current outgoing regulations, handlers are required to maintain

continuous in-line outgoing inspection or a certified QAP. Under

continuous in-line outgoing inspection, at least one inspector must be

present at all times when a plant is in operation to make in-process

checks on the preparation, processing, packing, and warehousing of all

products. The current cost for an inspector ranges from $34.00 to

$42.00 per hour. For an 8-hour day the cost of one inspector ranges

from $272.00 to $328.00.

By contrast, under a QAP, each certified plant has trained quality-

control personnel who perform most of the same functions as a PPB

inspector. The PPB inspectors continue to issue certificates of

inspection based upon the outgoing inspection records maintained by the

certified quality-control personnel. These records are verified through

spot-checks and samples taken by PPB inspectors.

A QAP may decrease outgoing inspection costs for a handler compared

to inspection costs under continuous in-line outgoing inspection.

However, cost savings under a QAP accrue more to larger-volume

handlers, who are more likely to have sufficient olives to operate

year-round and realize savings by employing trained quality-control

personnel. When there is a large crop, more handlers may benefit from a

QAP for similar reasons. However, olive crop sizes may vary

substantially from one year to the next due to the alternate-bearing

characteristics. This variability further reduces the efficiency of

operations at most of the olive processing plants and the cost-savings

of QAP, since handlers' fixed costs must be paid independent of the

size of the crop.

To enable handlers to minimize their inspection costs, the

committee recommended that handlers be allowed to utilize any

inspection method permitted by PPB, so that each may choose the method

most economical for their operations. Thus, in addition to a QAP and

in-line inspection, lot inspection would also be authorized for meeting

outgoing inspection requirements. Under lot inspection, a specified

number of containers of the same size and type, containing olives of

the same type and style, at the same location, are inspected. Lot

inspection occurs after processing, rather than during processing.

Inspecting by lot has the potential to reduce costs for handlers

because lot inspection does not require the presence of an inspector at

all times while olives are being processed.

To effectuate this change, paragraphs (a) and (b)(1) of

Sec. 932.152, Outgoing regulations, would be revised to add authority

for handlers to use either continuous in-line outgoing inspection, QAP,

or lot inspection. Because lot inspection does not require the presence

of an inspector at all times during the processing of olives, paragraph

(b)(1) would also be revised by deleting the final sentence, thereby

removing the requirement that an inspector be present when olives are

processed. This change is expected to reduce overall inspection costs

by eliminating overtime hours which accrue when an inspector is

required to remain in an olive processing plant at all times while

processing is underway. Under this proposal, for example, an inspector

could work a fixed shift, first providing lot inspection on olives

processed during the previous night, then converting to in-line

outgoing inspection for the remainder of the shift.

Outgoing Inspection for Size of Canning-Size Olives

The committee also recommended revising the current requirements

that canning-size olives, which have been sized and stored in tanks

prior to pitting, be inspected for size prior to packaging. Currently,

such olives are required under incoming inspection requirements to be

weighed and size-graded. Olives are then stored in tanks prior to

processing. The outgoing requirements mandate that such olives be

submitted for size inspection prior to packaging. However, handlers

size olives upon receipt and keep the sizes separate throughout the

packaging process because doing so facilitates more efficient operation

of modern processing and pitting equipment. Eliminating the requirement

for inspection for size prior to packaging would simplify the

inspection process and reduce overall inspection costs while

maintaining the integrity and quality of canned ripe olives.

To effectuate this change, paragraph (b)(2) of Sec. 932.152 would

be deleted. This deletion would necessitate the redesignation of

paragraph (b)(1) as (b).

However, olives which are smaller than authorized for use as canned

ripe olives (undersized olives) would still be held under surveillance

by the inspection service, as required in the incoming inspection

requirements and specified in paragraph (e)(2) of Sec. 932.151, since

handlers must dispose of such olives into appropriate outlets, such as

in frozen or acidified forms, or crushed for oil.

Outgoing Inspection for Size of Limited-Use Olives

Section 932.152, paragraphs (g)(1) and (g)(2), of the current

outgoing regulations specify that olives used in the production of

limited-use styles are not required to be submitted for an outgoing

inspection for size prior to packaging if they were size-graded by

[[Page 57785]]

the inspection service during the incoming inspection process. Limited-

use styles include halved, segmented (wedged), sliced, or chopped

styles. Typically, smaller olives may be used for limited-use styles

than for whole styles.

According to the requirements of Sec. 932.51(a)(ii) of the order,

canning size olives are sized by the inspection service during the

incoming inspection process. The olives are then either placed in

storage tanks or sent immediately to processing.

Olives process more efficiently when all the olives in the

processing tank are uniform in size. Modern, high-speed pitting

equipment produces higher yields and inflicts less damage to olives

when the sizes being pitted are uniform. This is especially true for

the smaller canning sizes. Currently, over 95 percent of all olives are

pitted prior to packaging.

Olive handlers have an additional incentive to maintain strict

control over various sizes of olives--retail customers' demands for

uniform size and quality.

For those reasons, the committee recommended changes in

Sec. 932.152, paragraphs (g)(1) and (g)(2) to eliminate the requirement

for inspection for size prior to packaging.

To effectuate the change, the words ``without an outgoing

inspection for size designation'' would be deleted from Sec. 932.152,

paragraphs (g)(1) and (g)(2).

These changes would establish minimum quality requirements of

flavor, saltiness, color, character, and defects for whole and pitted

style olives; sliced, segmented (wedged), and halved style olives;

chopped style olives; and broken pitted style olives. They would also

revise outgoing inspection requirements and procedures under the

marketing order by eliminating requirements that sized and stored

olives be submitted for sizing prior to packaging, and permitting lot

inspection. These revisions would eliminate requirements no longer

deemed necessary, thereby reducing handling costs, while maintaining

quality and size requirements needed to ensure customer satisfaction.

This rule also would make changes to Sec. 932.153 (as amended in

the Federal Register on August 5, 1996, 61 FR 40507), which specifies

current minimum grade and size requirements for limited use olives. All

references to ``grade'' in that section would be replaced by the words

``minimum quality'' or ``minimum quality requirements,'' as necessary.

Olive Import Requirements

Section 8e of the Act requires that whenever grade, size, quality,

or maturity requirements are in effect for olives under a domestic

marketing order, imported olives must meet the same or comparable

requirements. This rule proposes establishing minimum quality

requirements to replace current minimum grade requirements for

California olives under the marketing order. Therefore, a corresponding

change is needed in the olive import regulation.

This rule proposes modifying paragraphs (a)(8), (b)(1), (g), and

(j) of Sec. 944.401 to delete certain references to the standards and

add specific quality criteria for imported olives which are the same as

those being proposed for California olives.

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

Representative has concurred with the issuance of this proposed rule.

This rule provides a 15-day comment period to allow interested

persons to respond to this proposal. This period is deemed appropriate

because the crop year began August 1, 1996, and this proposal needs to

become effective as soon as possible. The proposal was recommended by

the committee at a public meeting and all interested persons were

invited to provide input. This proposal will also reduce handler costs

and help ensure consumer satisfaction. All written comments timely

received will be considered prior to finalization of this rule.

List 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 proposed to be amended as follows:

1. The authority citation for 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 932.149 is revised to read as follows: Sec. 932.149

Modified minimum quality requirements for specified styles of canned

olives of the ripe type.

(a) Except as otherwise provided in this section, the minimum

quality requirements prescribed in Sec. 932.52(a)(1) are modified as

follows, for specified styles of canned olives of the ripe type:

(1) Canned whole and pitted olives of the ripe type shall meet the

minimum quality requirements as prescribed in Table 1 of this section;

(2) Canned sliced, segmented (wedged), and halved olives of the

ripe type shall meet the minimum quality requirements as prescribed in

Table 2 of this section;

(3) Canned chopped olives of the ripe type shall meet the minimum

quality requirements as prescribed in Table 3 of this section; and

shall be practically free from identifiable units of pit caps, end

slices, and slices (``practically free from identifiable units'' means

that not more than 10 percent, by weight, of the unit of chopped style

olives may be identifiable pit caps, end slices, or slices); and

(4) Canned broken pitted olives of the ripe type shall meet the

minimum quality requirements as prescribed in Table 4 of this section.

Table 1.--Whole and Pitted Style

[Defects by count per 50 olives]

----------------------------------------------------------------------------------------------------------------

FLAVOR............................................................. Reasonably good; no ``off'' flavor.

FLAVOR (Green Ripe Type)........................................... Free from objectionable flavors of any

kind.

SALOMETER.......................................................... Acceptable Range in degrees: 3.0 to 14.0.

COLOR.............................................................. Reasonably uniform with not less than 60%

having a color equal or darker than

comparator for Ripe Type.

CHARACTER.......................................................... Not more than 5 soft units or 2 excessively

soft units.

UNIFORMITY OF SIZE................................................. 60%, by visual inspection, of the most

uniform in size. The diameter of the

largest does not exceed the smallest by

more than 4mm.

[[Page 57786]]

DEFECTS:

Pitter Damage (Pitted Style Only).............................. 15.

Major Blemishes................................................ 5.

Major Wrinkles................................................. 5.

Pits and Pit Fragments (Pitted Style Only)..................... Not more than 1.3 average by count.

Major Stems.................................................... Not more than 3.

HEVM........................................................... Not more than 1 unit per sample.

Mutilated...................................................... Not more than 3.

Mechanical Damage.............................................. Not more than 5.

Split Pits or Misshapen........................................ Not more than 5.

----------------------------------------------------------------------------------------------------------------

Table 2.--Sliced, Segmented (Wedged), and Halved Styles

[Defects by count per 255 grams]

----------------------------------------------------------------------------------------------------------------

FLAVOR........................................................... Reasonably good; no ``off'' flavor.

SALOMETER........................................................ Acceptable Range in degrees: 3.0 to 14.0.

COLOR............................................................ Reasonably uniform with no units lighter than

the comparator for Ripe Type.

CHARACTER........................................................ Not more than 13 grams excessively soft.

DEFECTS:

Pits and Pit Fragments....................................... Average of not more than 1 by count per 300

grams.

Major Stems.................................................. Not more than 3.

HEVM......................................................... Not more than 2 units per sample.

Broken Pieces and End Caps................................... Not more than 125 grams by weight.

----------------------------------------------------------------------------------------------------------------

Table 3.--Chopped Style

[Defects by count per 255 grams]

----------------------------------------------------------------------------------------------------------------

FLAVOR........................................................... Reasonably good; no ``off'' flavor.

SALOMETER........................................................ Acceptable Range in degrees: 3.0 to 14.0.

COLOR............................................................ Reasonably uniform with no units lighter than

the comparator for Ripe Type.

DEFECTS:

Pits and Pit Fragments....................................... Average of not more than 1 by count per 300

grams.

Major Stems.................................................. Not more than 3.

HEVM......................................................... Not more than 2 units per sample.

----------------------------------------------------------------------------------------------------------------

Table 4.--Broken Pitted Style

[Defects by count per 255 grams]

----------------------------------------------------------------------------------------------------------------

FLAVOR........................................................... Reasonably good; no ``off'' flavor.

SALOMETER........................................................ Acceptable Range in degrees: 3.0 to 14.0.

COLOR............................................................ Reasonably uniform with no units lighter than

the comparator for Ripe Type.

CHARACTER........................................................ Not more than 13 grams excessively soft.

DEFECTS:

Pits and Pit Fragments....................................... Average of not more than 1 by count per 300

grams.

Major Stems.................................................. Not more than 3.

HEVM......................................................... Not more than 2 units per sample.

----------------------------------------------------------------------------------------------------------------

(b) Terms used in this section shall have the same meaning as are

given to the respective terms in the current U.S. Standards for Grades

of Canned Ripe Olives (7 CFR part 52): Provided, That the definition of

``broken pitted olives'' is as follows: ``Broken pitted olives''

consist of large pieces that may have been broken in pitting but have

not been sliced or cut.

3. Section 932.150 is revised to read as follows: Sec. 932.150

Modified minimum quality requirements for canned green ripe olives.

The minimum quality requirements prescribed in Sec. 932.52 (a)(1)

are hereby modified with respect to canned green ripe olives so that no

requirements shall be applicable with respect to color and blemishes of

such olives.

4. In Sec. 932.152, paragraphs (a), (b), (c)(2), the heading of

(d), (d)(1), (g)(1) introductory text, and (g)(2) introductory text are

revised 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 or lot inspection which

are satisfactory to the Inspection Service and the Committee; or an

olive processing plant which has an approved Quality Assurance Program

in effect.

(b) Inspection--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 or

lot inspection. A PPB approved Quality Assurance Program shall be

pursuant to a Quality Assurance contract as referred to in Sec. 52.2.

(2) The Inspection Service shall issue for each day's pack a signed

certificate covering the quantities of such packaged olives which meet

all applicable minimum quality and size

[[Page 57787]]

requirements. Each such certificate shall contain at least the

following:

(i) Date;

(ii) Place of inspection;

(iii) Name and address of handler;

(iv) Can code;

(v) Variety;

(vi) Fruit size;

(vii) Can size;

(viii) Style;

(ix) Total number of cases;

(x) Number of cans per case; and

(xi) Statement that packaged olives meet the effective minimum

standards for canned ripe olives as warranted by the facts.

(d) Olives which fail to meet minimum quality and size

requirements. (1) Whenever any portion of a handler's daily pack of

packaged olives fails to meet all applicable minimum quality and size

requirements, the Inspection Service shall issue a signed report

covering such olives. Each such report shall contain at least the

following:

(i) Date;

(ii) Place of inspection;

(iii) Name and address of handler;

(iv) Can code;

(v) Variety;

(vi) Fruit size;

(vii) Can size;

(viii) Style;

(ix) Total number of cases;

(x) Number of cans per case; and

(xi) Reason why the applicable requirements were not met.

* * * * *

(g) Size certification. (1) When limited-use size olives for

limited-use styles are authorized during a crop year and a handler

elects to have olives sized pursuant to Sec. 932.51(a)(2)(i), any lot

of limited-use size olives may be used in the production of packaged

olives for limited-use styles if such olives are within the average

count range in Table II contained herein for that variety group, and

meet such further mid-point or acceptable count requirements for the

average count range in each size as approved by the committee.

* * * * *

(2) When limited-use size olives are not authorized for limited-use

styles during a crop year and a handler elects to have olives sized

pursuant to Sec. 932.51(a)(2)(ii), any lot of canning-sized olives may

be used in the production of packaged olives for whole, pitted, or

limited-use styles if such olives are within the average count range in

Table III contained herein for that variety group, and meet such

further mid-point or acceptable count requirements for the average

count range in each size as approved by the committee.

* * * * *

5. In Sec. 932.153, the section heading and paragraph (a) are

revised to read as follows:

Sec. 932.153 Establishment of minimum quality and size requirements

for processed olives for limited uses.

(a) Minimum Quality Requirements. On or after August 1, 1996, any

handler may use processed olives of the respective variety group in the

production of limited use styles of canned ripe olives if such olives

were processed after July 31, 1996, and meet the minimum quality

requirements specified in Sec. 932.52(a)(1) as modified by

Sec. 932.149.

* * * * *

6. In Sec. 932.155, paragraph (c) is revised to read as follows:

Sec. 932.155 Special purpose shipments.

* * * * *

handler may use processed olives in the production of packaged olives

for repackaging, and ship packaged olives for repackaging, if the

packaged olives meet the minimum quality requirements, except for the

requirement that the packaged olives possess a normal flavor: Provided,

That the failure to possess a normal flavor is due only to excessive

sodium chloride.

PART 944--FRUITS; IMPORT REGULATIONS

7. In Sec. 944.401, paragraphs (a)(8), (b)(1), (g), and (j) are

revised to read as follows:

Sec. 944.401 Olive Regulation 1.

(a) * * *

(8) Terms used in this section shall have the same meaning as are

given to the respective terms in the current U.S. Standards for Grades

of Canned Ripe Olives (7 CFR part 52) including the terms ``size'',

``character'', ``defects'' and ``ripe type'': Provided, That the

definition of ``broken pitted olives'' is as follows: ``Broken pitted

olives'' consist of large pieces that may have been broken in pitting

but have not been sliced or cut.

(b) * * *

(1) Minimum quality requirements. Canned ripe olives shall meet the

following quality requirements, except that no requirements shall be

applicable with respect to color and blemishes for canned green ripe

olives:

(i) Canned whole and pitted olives of the ripe type shall meet the

minimum quality requirements prescribed in Table 1 of this section;

(ii) Canned sliced, segmented (wedged), and halved olives of the

ripe type shall meet the minimum quality requirements prescribed in

Table 2 of this section;

(iii) Canned chopped olives of the ripe type shall meet the minimum

quality requirements prescribed in Table 3 of this section and shall be

practically free from identifiable units of pit caps, end slices, and

slices (``practically free from identifiable units'' means that not

more than 10 percent, by weight, of the unit of chopped style olives

may be identifiable pit caps, end slices, or slices); and

(iv) Canned broken pitted olives of the ripe type shall meet the

minimum quality requirements prescribed in Table 4 of this section,

Provided, That broken pitted olives consist of large pieces that may

have been broken in pitting but have not been sliced or cut.

Table 1.--Whole and Pitted Style

[Defects by count per 50 olives]

----------------------------------------------------------------------------------------------------------------

FLAVOR........................................................... Reasonably good; no ``off'' flavor.

FLAVOR (GREEN RIPE TYPE)......................................... Free from objectionable flavors of any kind.

SALOMETER........................................................ Acceptable Range in degrees: 3.0 to 14.0.

COLOR............................................................ Reasonably uniform with not less than 60%

having a color equal or darker than

comparator for Ripe Type.

CHARACTER........................................................ Not more than 5 soft units or 2 excessively

soft units.

UNIFORMITY OF SIZE............................................... 60%, by visual inspection, of the most

uniform in size. The diameter of the largest

does not exceed the smallest by more than

4mm.

DEFECTS:

Pitter Damage (Pitted Style Only)............................ 15.

Major Blemishes.............................................. 5.

[[Page 57788]]

Major Wrinkles............................................... 5.

Pits and Pit Fragments (Pitted Style Only)................... Not more than 1.3 average by count.

Major Stems.................................................. Not more than 2.

HEVM......................................................... Not more than 1 unit per sample.

Mutilated.................................................... Not more than 3.

Mechanical Damage............................................ Not more than 5.

Split Pits or Misshapen...................................... Not more than 5.

----------------------------------------------------------------------------------------------------------------

Table 2.--Sliced, Segmented (Wedged), and Halved Styles

[Defects by count per 255]

----------------------------------------------------------------------------------------------------------------

FLAVOR........................................................... Reasonably good; no ``off'' flavor.

SALOMETER........................................................ Acceptable Range in degrees: 3.0 to 14.0.

COLOR............................................................ Reasonably uniform with no units lighter than

the comparator for Ripe Type.

CHARACTER........................................................ Not more than 13 grams excessively soft.

DEFECTS:

Pits and Pit Fragments....................................... Average of not more than 1 by count per 300

grams.

Major Stems.................................................. Not more than 3.

HEVM......................................................... Not more than 2 units per sample.

Broken Pieces and End Caps................................... Not more than 125 grams by weight.

----------------------------------------------------------------------------------------------------------------

Table 3.--Chopped Style

[Defects by count per 255 grams]

----------------------------------------------------------------------------------------------------------------

FLAVOR........................................................... Reasonably good; no ``off'' flavor.

SALOMETER........................................................ Acceptable Range in degrees: 3.0 to 14.0.

COLOR............................................................ Reasonably uniform with no units lighter than

the comparator for Ripe Type.

DEFECTS:

Pits and Pit Fragments....................................... Average of not more than 1 by count per 300

grams.

Major Stems.................................................. Not more than 3.

HEVM......................................................... Not more than 2 units per sample.

----------------------------------------------------------------------------------------------------------------

Table 4.--Broken Pitted Style

[Defects by count per 255 grams]

----------------------------------------------------------------------------------------------------------------

FLAVOR........................................................... Reasonably good; no ``off'' flavor.

SALOMETER........................................................ Acceptable Range in degrees: 3.0 to 14.0.

COLOR............................................................ Reasonably uniform with no units lighter than

the comparator for Ripe Type.

CHARACTER........................................................ Not more than 13 grams excessively soft.

DEFECTS:

Pits and Pit Fragments....................................... Average of not more than 1 by count per 300

grams.

Major Stems.................................................. Not more than 3.

HEVM......................................................... Not more than 2 units per sample.

----------------------------------------------------------------------------------------------------------------

* * * * *

(g) It is hereby determined, on the basis of the information

currently available, that the minimum quality requirements and size

requirements set forth in this regulation are comparable to those

applicable to California canned ripe olives.

* * * * *

(j) The minimum quality, size, and maturity requirements of this

section shall not be applicable to olives imported for charitable

organizations or processing for oil, but shall be subject to the

safeguard provisions contained in Sec. 944.350.

Dated: November 1, 1996.

Robert C. Keeney,

Director, Fruit and Vegetable Division.

[FR Doc. 96-28609 Filed 11-7-96; 8:45 am]

BILLING CODE 3410-02-P

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