Domestic Dates Produced or Packed in Riverside County, California; Temporary Relaxation of Size Requirements for Deglet Noor Dates

SUMMARY: This proposal invites comments on revisions to the size

requirements currently prescribed for the Deglet Noor variety of dates

under the California date marketing order. The marketing order

regulates the handling of domestic dates produced or packed in

Riverside County, California, and is administered locally by the

California Date Administrative Committee (committee). This rule would

increase the current tolerance for individual, whole Deglet Noor dates

weighing less than 6.5 grams (the prescribed minimum) from 10 to 15

percent. The rule would be in effect through October 31, 1997. The

relaxation is necessary because dates from the 1996-97 crop are smaller

in size and weight than normal. The decrease in size and weight is due

to extremely high temperatures experienced last spring in the

production area. This relaxation was recommended by the committee to

make a larger quantity of the 1996-97 crop available for sale

domestically and in Canada and is expected to benefit producers,

handlers, and consumers.

DATES: Comments must be received by December 23, 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: Maureen Pello, 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 Valerie Emmer, Marketing

Specialist, Marketing Order Administration Branch, F&V, AMS, USDA, room

2536-S, P.O. Box 96456, Washington, DC 20090-6456: telephone: (202)

205-2829, 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, USDA, P.O. Box 96456, room 2525-S, Washington, DC 20090-

6456; telephone (202) 720-2491; Fax # (202) 720-5698.

SUPPLEMENTARY INFORMATION: This proposal is issued under Marketing

Agreement and Order No. 987 (7 CFR part 987), both as amended,

regulating the handling of domestic dates produced or packed in

Riverside County, California, hereinafter referred to as the ``order.''

The marketing agreement and order 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 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 date of the entry of the ruling.

This proposal invites comments on revisions to the size

requirements currently prescribed for the Deglet Noor variety of dates

under the California date marketing order. This rule would increase the

current tolerance for individual, whole Deglet Noor dates weighing less

than 6.5 grams (the prescribed minimum) from 10 to 15 percent. The rule

would be in effect through October 31, 1997, and was recommended by the

committee.

Section 987.39 of the date marketing order provides authority for

the establishment of minimum quality requirements for varieties of

California dates to be handled in designated outlets. Section 987.40 of

the order also provides authority for the committee to recommend to the

Secretary additional grade or size requirements for any variety of

dates to be handled in any designated outlet when it deems advisable.

Pursuant to Sec. 987.12, there are four designated outlet categories

for California dates--``DAC'' dates, ``dates for further processing''

(FP dates), ``export'' dates, and ``product'' dates.

Section 987.112a of the order's administrative rules prescribes

grade, size, and container requirements for each of the four outlet

categories of dates. Paragraph (b)(2) of that section prescribes such

requirements for DAC dates. DAC dates are marketable whole or pitted

dates that are inspected and certified as meeting the grade, size,

container, and applicable identification requirements for handling in

the United States and Canada. Currently, DAC dates must meet the

requirements for U.S. Grade B, as specified in the U.S. Standards for

Grades of Dates (Standards) issued by the Department. In addition, with

respect to whole dates of the Deglet Noor variety, the individual dates

in a sample from a lot must weigh at least 6.5 grams, with a

[[Page 64639]]

tolerance of 10 percent per lot for dates weighing less than 6.5 grams.

Paragraph (c)(2) of Sec. 987.112a provides similar requirements for

FP dates. FP dates are marketable whole dates acquired by one handler

from another handler that are certified as meeting the same grade and

size requirements for DAC dates, with the exception of moisture

requirements and applicable identification requirements. Currently, FP

dates must also meet the requirements for U.S. Grade B as specified in

the Standards, except for moisture.

Section 987.112a also specifies requirements for the remaining two

outlet categories of dates--export and product. Except for some minor

differences stated in the section, export and product dates must meet

the requirements for U.S. Grade C as specified in the Standards.

At its meeting on October 31, 1996, the committee recommended

increasing the current tolerance for individual, whole Deglet Noor

dates weighing less than 6.5 grams from 10 to 15 percent to be handled

in the DAC and FP outlet categories. The committee also recommended

that this relaxation be in effect through October 31, 1997. This would

allow the rule to be in effect for the remainder of the 1996-97 season,

which ends on September 30, plus an additional month. By the end of

October 1997, as prescribed under the order, the committee is required

to meet and review its marketing policy for the next season. Five

committee members voted for this change, three voted against, and one

abstained.

In its deliberations, the committee commented that the average

fruit size for the 1996-97 crop is expected to be much smaller this

season than in recent years, primarily due to the hot, dry spring.

Increasing the tolerance from 10 to 15 percent for dates weighing less

than 6.5 grams should allow a greater quantity of Deglet Noor dates

which are of good quality but weigh less than 6.5 grams to meet the

requirements for DAC and FP dates. Currently, the industry average of

the number of dates packed per pound is 60. The additional five percent

tolerance for undersize dates would allow handlers to include

approximately two additional smaller dates per pound, bringing the

average total number of dates packed per pound to 62. Thus, more of the

crop would be utilized as whole dates domestically and in Canada.

The committee estimates total 1996-97 marketable date shipments at

33.5 million pounds. Of that amount, Deglet Noor shipments are

estimated at approximately 32.4 million pounds, with about 15 million

pounds likely to meet the current requirements for DAC and FP dates.

According to the committee, increasing the tolerance from 10 to 15

percent should allow about three to five percent more Deglet Noor dates

to meet the DAC and FP requirements, or between 450,000 and 750,000

pounds. Making more Deglet Noor dates of satisfactory quality available

for sale domestically and in Canada would provide for maximum

utilization of the 1996-97 crop, thereby benefiting producers,

handlers, and consumers.

The three committee members who opposed the recommendation believe

that the overall quality of dates packed would be decreased if smaller

fruit is allowed to meet the requirements for DAC and FP dates.

However, other committee members commented that the smaller size dates

would still have to meet all of the other characteristics DAC and FP

dates must already meet. Thus, consumers would continue to receive good

quality whole dates with only a slight increase in the number of

smaller size dates. In addition, the majority of committee members

believe that this change would only affect about three to five percent

of the Deglet Noor shipments that are expected to meet DAC and FP

requirements.

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. Accordingly, AMS has

prepared this initial regulatory flexibility analysis.

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 15 handlers of California dates who are

subject to regulation under the marketing order and approximately 135

date producers in the regulated area. Small agricultural service firms

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.

Last year, as a percentage, about 75 percent of the handlers

shipped under 4 million pounds of dates and 25 percent shipped over 4

million. Using an average f.o.b. price of $1.12 per pound, about 75

percent of date handlers could be considered small businesses under

SBA's definition and about 25 percent of the handlers could be

considered large businesses. The majority of handlers and producers of

California dates may be classified as small entities.

This proposal would revise size requirements currently prescribed

for the Deglet Noor variety of dates under Sec. 987.112a of the

California date marketing order. Deglet Noor dates from the 1996-97

crop are smaller in size and weight than normal, due to extremely high

temperatures experienced last spring in the production area. The

committee recommended increasing the current tolerance for individual,

whole Deglet Noor dates weighing less than 6.5 grams (the prescribed

minimum) from 10 to 15 percent, to make a larger quantity of the 1996-

97 crop available for sale domestically and in Canada, and is expected

to benefit producers, handlers, and consumers. This rule would be in

effect through October 31, 1997.

At the meeting, the committee discussed the impact of this change

on handlers and producers in terms of cost. Handlers and producers

receive higher returns for dates that meet DAC and FP requirements. As

previously mentioned, dates sold as DAC or FP must meet the

requirements for U.S. Grade B dates (with the exception of moisture for

FP dates) as specified in the Standards and dates sold in other outlet

categories such as product and export must meet requirements specified

for U.S. Grade C dates. According to industry members, handlers receive

about $.50 per pound more for U.S. Grade B dates than U.S. Grade C, and

growers receive about $.30 more per pound more for U.S. Grade B dates.

In addition, as previously mentioned, 1996-97 marketable Deglet

Noor shipments are estimated to be approximately 32.4 million pounds,

of which about 15 million pounds should meet DAC and FP requirements.

If, as the committee anticipates, increasing the tolerance for smaller

size fruit would impact about three to five percent of the crop, this

change would allow between about 450,000 and 750,000 pounds more Deglet

Noor dates to be sold as DAC and FP dates. With a net increase to

handlers and producers of about $.50 per pound and $.30 per pound,

respectively, for U.S. Grade B dates, the proposed change could mean an

increase in total net returns of $225,000-$375,000 for all handlers and

$135,000-$225,000 for all producers. The benefits for this rule are not

[[Page 64640]]

expected to be disproportionately greater or less for small handlers or

producers than for larger entities.

The committee discussed alternatives to this change, including not

increasing the tolerance at all, as well as increasing the tolerance by

10 percent rather than five percent. While only a small amount of the

crop is expected to be affected by increasing the tolerance, the

committee believes that an increase would benefit producers and

handlers with smaller fruit this season. The committee considered

increasing the tolerance from 10 to 20 percent but believed that this

could put too much smaller size fruit on the market. In addition,

committee members commented that the tolerance was increased by five

percent during the 1992-93 season and in prior seasons because of

similar problems of an abundance of small size fruit due to hot

temperatures, and that the five percent increase was satisfactory.

Thus, the majority of committee members agreed that the tolerance for

the size of Deglet Noor dates should be increased from 10 to 15 percent

through October 31, 1997.

This proposed rule would relax size requirements under the date

marketing order. Accordingly, this action would not impose any

additional reporting or recordkeeping requirements on either small or

large date handlers. As with all Federal marketing order programs,

reports and forms are periodically reviewed to reduce information

requirements and duplication by industry and public sector agencies.

The Department has not identified any relevant Federal rules that

duplicate, overlap or conflict with this proposed rule. However, as

previously stated, DAC and FP dates must meet the requirements for U.S.

Grade B, as specified in the U.S. Standards for Grades of Dates (7 CFR

52.1001 through 52.1011) issued under the Agricultural Marketing Act of

1946 (7 U.S.C. 1621 through 1627). Standards issued under the

Agricultural Marketing Agreement Act of 1946 are voluntary.

In addition, the committee's meeting was widely publicized

throughout the date industry and all interested persons were invited to

attend the meeting and participate in committee deliberations on all

issues. Like all committee meetings, the October 31, 1996, meeting was

a public meeting and all entities, both large and small, were able to

express views on this issue. The committee itself is composed of nine

members, of which six are handlers/producers and three are producers

only, the majority of whom are small entities. Finally, interested

persons are invited to submit information on the regulatory and

informational impacts of this action on small businesses.

A 15-day comment period is provided to allow interested persons to

respond to this proposal. Fifteen days is deemed appropriate because

this rule would need to be in place as soon as possible since handlers

are already shipping dates from the 1996-97 crop. All written comments

timely received will be considered before a final determination is made

on this matter.

List of Subjects in 7 CFR Part 987

Dates, Marketing agreements, Reporting and recordkeeping

requirements.

For the reasons set forth in the preamble, 7 CFR part 987 is

proposed to be amended as follows:

1. The authority citation for 7 CFR part 987 continues to read as

follows:

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

PART 987--DOMESTIC DATES PRODUCED OR PACKED IN RIVERSIDE COUNTY,

CALIFORNIA

Sec. 987.112a [Amended]

2. In Sec. 987.112a, paragraphs (b)(2) and (c)(2), the words

``December 29, 1992, and ending October 31, 1993,'' are removed and the

words ``[Insert date one day after final rule is published in the

Federal Register], and ending October 31, 1997,'' are added in their

place.

Dated: December 2, 1996.

Robert C. Keeney,

Director, Fruit and Vegetable Division.

[FR Doc. 96-31163 Filed 12-05-96; 8:45 am]

BILLING CODE 3410-02-P