Nectarines and Peaches Grown in California; Revision of Handling Requirements for Fresh Nectarines and Peaches

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 916 and 917

[Docket No. FV96-916-3 FIR]

Nectarines and Peaches Grown in California; Revision of Handling

Requirements for Fresh Nectarines and Peaches

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule finalizes, with a few spelling corrections, the

provisions of an interim final rule that revised the handling

requirements for California nectarines and peaches by modifying the

grade, size, maturity, and container requirements for fresh shipments

of these fruits, beginning with 1997 season shipments. This rule also

corrects current grade, size and maturity requirements, primarily by

restoring regulatory text that was inadvertently misnumbered or omitted

during previous rulemaking actions. This rule enables handlers to

continue shipping fresh nectarines and peaches meeting consumer needs

in the interest of producers, handlers, and consumers of these fruits.

EFFECTIVE DATE: October 29, 1997.

FOR FURTHER INFORMATION CONTACT: Terry Vawter, Marketing Specialist, or

Kurt J. Kimmel, Regional Manager, 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; Fax: (209) 487-5906; or Anne M. Dec,

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. Small

[[Page 50854]]

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 2523-S,

Washington, DC 20090-6456; telephone: (202) 720-2491; Fax: (202) 720-

5698.

SUPPLEMENTARY INFORMATION: This 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, 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 rule in

conformance with Executive Order 12866.

This rule has been reviewed under Executive Order 12988, 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.

Under the orders, grade, size, maturity, container and pack

requirements are established for fresh shipments of California

nectarines and peaches. Such requirements are in effect on a continuing

basis. The Nectarine Administrative Committee (NAC) and the Peach

Commodity Committee (PCC) met December 4, 1996, and unanimously

recommended that these handling requirements be revised prior to the

1997 season, which began April 1. The changes (1) authorize continued

use of a container first used in 1996; (2) authorize shipments of ``CA

Utility'' quality fruit during the 1997 season; (3) clarify container

tolerances for all nectarines and peaches; and (4) revise varietal

maturity and size requirements to reflect recent changes in growing

conditions.

The committees meet prior to and during each season to review the

rules and regulations effective on a continuous basis for California

nectarines and peaches under the orders. Committee meetings are open to

the public, and interested persons may express their views at these

meetings. The Department reviews committee recommendations and

information, as well as information from other sources, and determines

whether modification, suspension, or termination of the rules and

regulations would tend to effectuate the declared policy of the Act.

Container Requirements (Nectarines and Peaches)

Sections 916.52 and 917.41 of the nectarine and peach orders,

respectively, provide authority to fix the size, capacity, weight,

dimensions, markings, or pack of the container or containers that may

be used in the packaging and handling of these fruits. Section 916.350

specifies container and pack requirements for fresh nectarine shipments

and section 917.442 specifies container and pack requirements for fresh

peach shipments. Included in these sections are requirements that all

containers be marked with specific information (e.g., the name of the

handler, and the maturity, size, and variety of the fruit) and that

such markings be applied to the outside ends of the container.

Prior to the 1996 season, the NAC and PCC recommended that a new

container, permitted to be marked on its lid, be approved for nectarine

and peach shipments during the 1996 season only. The revised

requirements became effective on April 1, 1996. The NAC and PCC then

reviewed the impact of the use of this container at the conclusion of

the 1996 season.

The new container is plastic, rather than wood and paper. It is

also recyclable and reusable. The design of some styles of the

container, which has cooling slots on all of its sides, discourages

placement of markings on the outside ends. Furthermore, in order to

ensure and facilitate its reuse, container markings on the permanent

outside ends of the new container are not desirable. Instead, placement

of markings on the disposable lid is preferable. Thus, markings on the

new container have been permitted for either the lid or the outside

ends.

In the 1996 season, approximately 450,000 recyclable, reusable

boxes were used by nectarine and peach handlers. This represents

approximately 1 percent each of the total number of packages of

nectarines and peaches shipped in that season. Users of the recyclable,

reusable plastic boxes reported good acceptance by retailers and expect

increased demand for their use in the coming years. Industry sources

reported the boxes will likely be used for other commodities as

awareness and acceptance of the boxes increase. It was also noted that

the nectarine and peach industries could improve their competitive edge

by continued and increased use of the new recyclable, reusable plastic

box.

The NAC and PCC believe that continuing to permit container

markings to be placed either on the container lid or the outside ends

will continue to facilitate the use of this plastic, reusable, and

recyclable container. Authorizing the continued use of this container

will allow handlers to reduce their container costs through the

continued reuse of the container. Such reduced container costs could

result in increased returns to producers as well.

When the container requirements for nectarines and peaches were

changed on April 1, 1996, the revised provisions did not specify that

the change was effective only for the 1996 season. Thus, no changes in

the regulatory text of Secs. 916.350 and 917.442 are necessary. The use

of the recyclable, reusable plastic container is authorized for the

1997 season and beyond.

Quality Requirements (Nectarines and Peaches)

Sections 916.52 and 917.41 authorize the establishment of grade and

quality requirements for nectarines and peaches. Prior to the 1996

season, Sec. 916.356 required nectarines to meet a modified U.S. No. 1

grade. Specifically, nectarines were required to meet U.S. No. 1 grade

requirements, except there was a slightly tighter requirement for

scarring and a more liberal allowance for misshapened fruit. Under

Sec. 917.459, peaches were also required to meet the requirements of a

U.S. No. 1 grade, except there was a more liberal allowance for open

sutures which are damaged but not seriously damaged.

This rule continues the revision in the interim rule to paragraph

(a)(1) of Sec. 916.356 and paragraph (a)(1) of Sec. 917.459 to permit

shipments of nectarines and peaches meeting ``CA Utility'' quality

requirements during the 1997 season. (``CA Utility'' fruit is lower in

quality than fruit meeting the modified U.S. No. 1 grade

[[Page 50855]]

requirements.) Shipments of nectarines and peaches meeting ``CA

Utility'' quality requirements were first permitted during the 1996

season for that season only. By unanimous vote, the NAC and PCC

recommended that fruit meeting ``CA Utility'' quality requirements be

permitted to be shipped for an additional year. The NAC and PCC will

continue to monitor retailer and consumer perceptions of ``CA Utility''

nectarines and peaches to determine whether such fruit should continue

to be marketed.

Preliminary studies conducted by the NAC and PCC indicate that some

consumers, retailers, and foreign importers found the lower quality

fruit acceptable in some markets. Shipments of ``CA Utility''

nectarines represented 1.1 percent of all nectarine shipments, or

approximately 210,000 boxes in 1996. Shipments of ``CA Utility''

peaches represented 1.9 percent of all peach shipments in 1996, or

approximately 365,000 boxes.

Dr. Dennis Nef, California State University, Fresno, studied

samples of culled fruit at handler facilities during the 1995 and 1996

seasons. Results from the 1996 season were compared to the 1995 season.

Preliminary data indicate that a smaller percentage of culled

nectarines and peaches met the marketing order grade (modified U.S. No.

1) and size requirements in 1996 than in 1995. In 1995, approximately 8

percent of the nectarines in the cull stream met those requirements,

while in 1996, approximately 1 percent of the nectarines in the cull

stream met those requirements. In 1995, approximately 7 percent of the

peaches in the cull stream met the order's grade and size requirements,

while in 1996, approximately 1 percent of the peaches in the cull

stream met those requirements. (The ``cull stream'' includes all fruit

which is removed from the packing line by the handler's quality control

personnel and not placed in a container for shipment.) The decrease in

the amount of fruit in the cull stream seems to indicate a greater

utilization of available fruit rather than its disposal. With the

option of packing ``CA Utility'' quality fruit, it appears that the

handlers'' quality control personnel were less inclined to be overly

critical and to exclude acceptable modified U.S. No. 1 fruit. However,

not all of this increased utilization can be attributed to the

implementation of ``CA Utility'' quality requirements. The 1995 season,

which was the first in which cull data were obtained, was plagued by

adverse weather and hail storms. The damage inflicted by the storms

created conditions which decreased the quality of available nectarines

and peaches and increased somewhat the percentage of fruit in the cull

stream which would have met marketing order requirements. It is

probable that the implementation of ``CA Utility'' quality requirements

increased the utilization of some fruit which might have been disposed

of otherwise. Such utilization benefitted producers, handlers, and

consumers. For that reason, the NAC and PCC recommended that ``CA

Utility'' quality requirements be continued for the 1997 season. The

NAC and PCC will continue to monitor the impact of shipping ``CA

Utility'' nectarines and peaches to determine whether such shipments

continue to be in the interests of producers, handlers, and consumers.

In conforming changes, paragraph (d) of Sec. 916.350 and paragraph

(d) of Sec. 917.442 continue to be revised to require that ``CA

Utility'' quality fruit be labeled as such. This marking requirement

was in effect during the 1996 season, and is intended to enable

customers to differentiate between the different qualities of available

fruit.

Clarification of Container Tolerances (Nectarines and Peaches)

For those grade factors included in the U.S. Standards for Grades

of Nectarines or Peaches (standards), tolerances are provided for fruit

that fails to meet those factors to allow for variations incidental to

proper grading and handling. Tolerances are specified for both entire

lots of fruit and for individual containers within the lot.

The container tolerances in the standards are applicable to all

nectarines and peaches since those tolerances are not modified by the

order's rules and regulations. However, last fall, the NAC and PCC

voted to clarify the requirements for affected parties. Clarifying

these container tolerances will not have a regulatory impact on

nectarine and peach handlers because these tolerances are the same as

those applied in the standards.

Maturity Requirements (Nectarines and Peaches)

Both orders provide (in Secs. 916.52 and 917.41) authority to

establish maturity requirements. The minimum maturity level currently

specified for nectarines and peaches is ``mature'' as defined in the

standards. Additionally, both orders' rules and regulations provide for

a higher, ``well matured'' classification. For most varieties, ``well

matured'' fruit determinations are made using maturity guides (e.g.,

color chips). These maturity guides are reviewed each year by the

Shipping Point Inspection Service (SPI) to determine whether they need

to be changed based on the most recent information available on the

characteristics of each variety.

Nectarines

Requirements for ``well matured'' nectarines are specified in

paragraph (a)(1) of Sec. 916.356. This rule continues in effect the

revision in the interim rule of Table 1 of paragraph (a)(1) of

Sec. 916.356 for nectarines to add maturity guides for 12 nectarine

varieties. Specifically, an addition to the maturity guides was

recommended for Earliglo, May Jim, Red Glo, Royal Glo, and Zee Grand

nectarine varieties at a maturity guide of I; Big Jim, Early Red Jim,

Late Red Jim, May Lion, and Red Fred nectarine varieties at a maturity

guide of J; and Kay Diamond and Ruby Diamond nectarine varieties at a

maturity guide of L.

Table 1 of paragraph (a)(1) of Sec. 916.356 continues in effect the

revision changing the maturity guides for the following eight nectarine

varieties: Autumn Delight, Fairlane, Moon Grand, Red Diamond, Sparkling

June, Spring Diamond, Summer Diamond, and Summer Lion. The maturity

guide for these eight varieties was M, which was changed to L. The M

maturity guide is no longer deemed suited by SPI to nectarine varieties

currently in production. The L maturity guide more accurately reflects

the background color of modern nectarine varieties under production at

this time. For this reason, the NAC recommended these maturity

requirement changes based on SPI's continuing review of individual

maturity characteristics and identification of the appropriate maturity

guide corresponding to the ``well matured'' level of maturity for

nectarine varieties in production.

Paragraph (a)(1) of Sec. 916.356 also continues in effect the

revision in the interim rule to remove 13 nectarine varieties which are

no longer in production. The NAC routinely reviews the status of

nectarine varieties listed in these maturity guides. The most recent

review revealed that 13 of the nectarine varieties listed in the

maturity guide had not been in production since the 1993 season.

Typically, the NAC recommends removing a variety after non-production

for three seasons or if trees of that variety are known to have been

pulled out because a maturity guide for an obsolete variety is no

longer needed. The varieties removed include the Clinton-Strawberry,

Desert Dawn, Early Star, Gee Red, Granderli, Hi Red, Larry's Grand,

Late Tina Red, Mayfair, May Red, Red June, Stan Grand, and 61-61

nectarine varieties.

[[Page 50856]]

Table 1 of paragraph (a)(1) of Sec. 916.356 continues in effect the

revision to correct the identification of the Red Lion nectarine

variety. The name ``Red Lion'' has been changed to ``August Lion.'' For

that reason, all references to Red Lion have been changed to August

Lion. In addition, three nectarine varieties were identified as June

Glo, May Glo, and Spring Brite. The correct spelling of these three

varieties is Juneglo, Mayglo, and Spring Bright, respectively.

Peaches

Paragraph (a)(1) of Sec. 917.459 specifies maturity requirements

for fresh peaches being inspected and certified as being ``well

matured.''

This rule continues in effect the revision of Table 1 of paragraph

(a)(1) of Sec. 917.459 to add maturity guides for the Kingscrest peach

variety to be regulated at the H maturity guide, the Red Dancer peach

variety to be regulated at the I maturity guide, and the Early Elegant

Lady peach variety to be regulated at the L maturity guide.

This rule also continues in effect the revision in the interim rule

changing the maturity guide assignment on Table 1 of paragraph (a)(1)

of Sec. 917.459 for the Summer Lady peach variety from the M maturity

guide to the L maturity guide. The M maturity guide is no longer deemed

suited by SPI to peach varieties currently in production. The L

maturity guide more accurately reflects the background color of modern

peach varieties in production at this time. For this reason, the PCC

recommended this maturity requirement change based on SPI's continuing

review of individual maturity characteristics and identification of the

appropriate maturity guide corresponding to the ``well matured'' level

of maturity for peach varieties in production.

The maturity requirement changes for these peach varieties are

based on the PCC's continuing review of their individual maturity

characteristics, and the identification of the appropriate color chip

corresponding to the ``well matured'' level of maturity for each such

variety.

Table 1 of paragraph (a)(1) of Sec. 917.459 continues in effect the

revision in the interim rule removing 19 peach varieties which are no

longer in production. The PCC routinely reviews the status of peach

varieties listed in these maturity guides. The most recent review

revealed that 19 of the peach varieties listed in the maturity guide

had not been in production since the 1993 season. Typically, the PCC

recommends removing a variety after non-production for three seasons or

if trees of that variety are known to have been pulled out because a

maturity guide for an obsolete variety is no longer needed. The

varieties removed include the Armgold, Bella Rosa, Bonjour, Desertgold,

Early Fairtime, Early Royal May, Fortyniner, Jody Gaye, June Crest,

Mardigras, Morning Sun, Preuss Suncrest, Prima Fire, Royal April, Sun

Lady, Toreador, Treasure, Windsor, and 50-178 peach varieties.

Table 1 of paragraph (a)(1) continues in effect the revision to

change the spelling of two varieties of peaches. The Judy Elberta and

Mary Ann varieties appeared on Table 1. However, the spelling of these

two names was corrected to read ``July Elberta'' and ``Mary Anne.''

Size Requirements (Nectarines and Peaches)

Both orders provide (in Secs. 916.52 and 917.41) authority to

establish size requirements. Size regulations encourage growers to

leave fruit on the tree for a greater length of time. This increased

growing time not only improves maturity and, therefore, the quality of

the product, but also the size of the fruit. Increased size results in

increases in the number of packed boxes of fruit per acre. Acceptable

size fruit also provides greater consumer satisfaction, more repeat

purchases, and, therefore, increased returns to producers. Varieties

recommended for specific size regulation have been reviewed and

recommendations are based on the specific characteristics of each

variety. The NAC and PCC conduct studies each season on the range of

sizes reached by the regulated varieties and determine whether

revisions in the size requirements are appropriate.

Nectarines

Section 916.356 specifies size requirements for fresh nectarines in

paragraphs (a)(2) through (a)(9). This rule continues in effect the

revision in the interim rule of Sec. 916.356 to establish variety-

specific size requirements for 10 nectarine varieties that were

produced in commercially significant quantities of more than 10,000

packages for the first time during the 1996 season. This rule also

continues in effect the modification of the variety-specific size

requirements for several varieties of nectarines.

For example, one of the varieties added to the variety-specific

size requirements is the Kay Glo variety. Studies of the size ranges

attained by the Kay Glo variety revealed that .5 percent of that

variety met the smallest size, size 96, while 1.6 percent met the

largest size, size 40. Approximately 45 percent of the nectarines of

the Kay Glo variety met the next larger size, size 50.

A review of other varieties with the same harvesting period

indicated that Kay Glo was comparable to those varieties in its size

ranges. Thus, the recommendation to place the Kay Glo nectarine variety

in the variety-specific size regulation at a size 88 is appropriate.

Historical variety data such as this provide the NAC with the

information necessary to recommend the appropriate sizes at which to

regulate various nectarine varieties.

Paragraph (a)(3) of Sec. 916.356 continues in effect the revision

to include the Grand Sun nectarine variety; paragraph (a)(4) continues

in effect the revision to include the Arctic Star, Kay Glo, Prima

Diamond II, and Prince Jim nectarine varieties; and paragraph (a)(6) in

Sec. 916.356 continues in effect the revision to include the Arctic

Pride, Arctic Sweet, Diamond Ray, Honey Kist, and Prime Diamond VII

nectarine varieties.

This rule also continues in effect the revision of Sec. 916.356 to

remove seven nectarine varieties from the variety-specific size

requirements specified in the section because less than 5,000 packages

of each of these varieties were produced during the 1996 season.

Paragraph (a)(4) of that section continues in effect the removal of the

Mike Grand nectarine variety. Paragraph (a)(6) continues in effect the

removal of the Early Sungrand, Nectarine 23, Prima Diamond, Prima

Diamond III, Tasty Gold, and Tom Grand nectarine varieties.

Paragraph (a)(4) of Sec. 916.356 continues in effect the revision

to include the Arctic Glo and Red Glo nectarine varieties which were

inadvertently removed from the variety-specific size requirement prior

to the 1996 season.

In a conforming change, paragraphs (a)(3) and (a)(4) of

Sec. 916.356 also continue in effect the revision in the interim rule

to correct the spelling of the Mayglo and Juneglo nectarine varieties,

respectively. Paragraph (a)(6) continues in effect the revision to

include the August Lion variety in place of the Red Lion variety.

Nectarine varieties removed from the nectarine variety-specific

list become subject to the non-listed variety size requirements

specified in paragraphs (a)(7), (a)(8), and (a)(9) of Sec. 916.356.

The NAC recommended these changes in the minimum size requirements

based on a continuing review of the sizing and maturity relationships

for these nectarine varieties, and consumer acceptance levels for

various sizes of fruit. This rule

[[Page 50857]]

is designed to establish minimum size requirements for fresh nectarines

consistent with expected crop and market conditions.

Peaches

Section 917.459 specifies size requirements for fresh peaches in

paragraphs (a)(2) through (a)(6), and paragraphs (b) and (c). This rule

continues in effect the revision in the interim rule of Sec. 917.459 to

establish variety-specific size requirements for nine peach varieties

that were produced in commercially significant quantities of more than

10,000 packages for the first time during the 1996 season.

For example, one of the varieties added to the variety-specific

size requirements is the August Lady variety. Studies of the size

ranges attained by the August Lady variety revealed that no peaches of

that variety met the smallest size, size 96, while 36 percent of the

peaches of the August Lady variety met the largest size, size 30.

A review of other varieties of the same harvesting period indicated

that August Lady was comparable to those varieties in its size ranges.

Thus, the recommendation to place the August Lady peach variety in the

variety-specific size regulation at a size 72 is appropriate.

Historical variety data such as this provide the PCC with the

information necessary to recommend the appropriate sizes at which to

regulate various peach varieties.

In Sec. 917.459, current paragraph (a)(5) continues in effect the

revision to include the Rich Mike, Sweet Gem, and Sweet Scarlet peach

varieties; and current paragraph (a)(6) continues in effect the

revision to include the August Lady, Autumn Flame, Red Sun, Scarlet

Snow, Snow Diamond, Summer Zee, and Vista peach varieties.

This rule also continues in effect the removal of one peach variety

from the variety-specific size requirements specified in Sec. 917.459,

because less than 5,000 packages of this variety were produced during

the 1996 season. In Sec. 917.459, current paragraph (a)(5) continues in

effect the revision to remove the Regina peach variety.

In a conforming change, current paragraph (a)(6) of Sec. 917.459

continues the revision in the interim rule to correct the spelling of

one peach variety from ``Mary Ann'' to ``Mary Anne.''

Peach varieties removed from the variety-specific list become

subject to the non-listed variety size requirements specified in

paragraphs (b) and (c) of Sec. 917.459.

The PCC recommended these changes in the minimum size requirements

based on a continuing review of the sizing and maturity relationships

for these peach varieties, and the consumer acceptance levels for

various sizes of fruit. This rule is designed to establish minimum size

requirements for fresh peaches consistent with expected crop and market

conditions.

This rule reflects the committees' and the Department's appraisal

of the need to revise the handling requirements for California

nectarines and peaches, as specified. The Department's determination is

that this rule will have a beneficial impact on producers, handlers,

and consumers of California nectarines and peaches.

This rule establishes handling requirements for fresh California

nectarines and peaches consistent with expected crop and market

conditions, and will help ensure that all shipments of these fruits

made each season will meet acceptable handling requirements established

under each of these orders. This rule will also help the California

nectarine and peach industries provide fruit desired by consumers. This

rule is designed to establish and maintain orderly marketing conditions

for these fruits in the interest of producers, handlers, and consumers.

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 final 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 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. Small agricultural service firms, which

includes handlers, are defined as those whose annual receipts are less

than $5,000,000. A majority of these handlers and producers may be

classified as small entities.

Under Secs. 916.52 and 917.41 of the orders, grade, size, maturity,

container and pack requirements are established for fresh shipments of

California nectarines and peaches. Such requirements are in effect on a

continuing basis. This rule continues the revisions in the interim rule

of requirements to: (1) authorize continued use of a container first

used in 1996; (2) authorize shipments of ``CA Utility'' quality fruit

during the 1997 season; (3) clarify container tolerances for containers

of nectarines and peaches; and (4) revise varietal maturity and size

requirements to reflect current growing conditions.

Section 916.350, paragraph (c) and Sec. 917.442, paragraph (c)

continue in effect the authority to use a recyclable, reusable plastic

container during the 1997 season and beyond. This rule also continues

in effect the authority to permit markings on such containers to be

placed on the disposable lids rather than on the outside ends of the

containers. Use of this container will continue to offer a cheaper and

more environment-friendly alternative to currently-used disposable

wooden and paper boxes. In addition, use of this container is advocated

by retailers who desire to decrease their costs of disposing of packing

boxes. Approximately 450,000 recyclable, reusable plastic boxes were

used by handlers of nectarines and peaches during the 1996 season,

representing more than 1 percent each of total nectarine shipments of

19,561,227 boxes and peach shipments of 19,481,624 boxes.

The increased use of this container is expected to result in

decreased handling costs for handlers, and thereby improved returns to

producers. Generally, under current industry practices, handlers' costs

of packaging nectarines and peaches are passed on to producers by

handlers via a deduction from total returns. Such costs include pre-

cooling of received fruit, costs of boxes, costs of packing materials,

costs of palletizing packed boxes, cold storage, inspection costs, etc.

A decrease in the cost of boxes, then, has the potential for decreased

handling costs passed on to all producers.

Under Secs. 916.350 and 917.442 of the regulations for nectarines

and peaches, respectively, use of lower-quality ``CA Utility''

nectarines and peaches was authorized for the 1996 season only. This

rule continues the revision in the interim rule to permit the continued

use of ``CA Utility'' quality fruit for the 1997 season while further

data is obtained. During the 1996 season, the Department authorized the

use of nectarines and peaches which were of a lower quality than the

minimum permitted for previous seasons. During 1996, there

[[Page 50858]]

were 210,443 boxes of nectarines and 365,761 boxes of peaches shipped

as ``CA Utility,'' or 1.1 percent and 1.9 percent of nectarine and

peach shipments, respectively. Continued availability of ``CA Utility''

quality fruit is expected to have a positive impact on producers,

handlers, and consumers by permitting more nectarines and peaches into

fresh market channels, without adversely impacting the market for

higher quality fruit.

This rule also continues the clarification in the interim rule of

the container tolerances for nectarines and peaches. Under the orders,

the container tolerances in the standards have been applied to

nectarines and peaches, although the tolerances were not specifically

included in the orders' rules and regulations. Thus, this is a

clarifying change which will not impose any additional burdens on

growers or handlers.

Sections 916.356 and 917.442 for nectarines and peaches,

respectively, currently establish minimum maturity levels. This rule

continues in effect adjustments to the maturity requirements for

several varieties of nectarines and peaches. Maturity requirements are

based on maturity measurements generally using maturity guides (e.g.,

color chips). Such maturity guides provide producers and handlers with

objective tools for measuring the maturity of different varieties of

nectarines and peaches. Such maturity guides are reviewed annually to

determine the appropriate guide for each nectarine and peach variety.

These annual adjustments reflect changes in the maturity patterns of

nectarines and peaches as experienced over the previous seasons'

inspections. Adjustments in the guides ensure that fruit has met an

acceptable level of ripeness, thus ensuring consumer satisfaction and

benefitting nectarine and peach growers and handlers.

Currently, in Secs. 916.356 and 917.459, minimum sizes for various

varieties of nectarines and peaches are established. This rule

continues in effect adjustments to the minimum sizes for various

varieties of nectarines and peaches beginning with the 1997 season.

Minimum size regulations are put in place to allow fruit to remain on

the tree for a greater length of time. This increased growing time not

only improves maturity, but also improves fruit size. Increased fruit

size increases the number of packed boxes per acre to the benefit of

both producers and handlers. Increased fruit size also provides greater

consumer satisfaction and, therefore, more repeat purchases by

consumers. Repeat purchases and consumer satisfaction benefit producers

and handlers alike. Such adjustments to minimum sizes of nectarines and

peaches are recommended each year by the NAC and PCC based upon

historical data regarding sizes which the different varieties attain.

This rule clarifies some of the orders' requirements and relaxes

others. This action does not impose any additional reporting and

recordkeeping requirements on either small or large 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 rule. However, as previously

stated, nectarines and peaches under the orders have to meet certain

requirements set forth in the standards issued under the Agricultural

Marketing Act of 1946 (7 U.S.C. 1621 through 1627). Standards issued

under the Agricultural Marketing Act of 1946 are otherwise voluntary.

In addition, the committees' meetings were widely publicized

throughout the nectarine and peach industries and all interested

parties were invited to attend the meetings and participate in

committee deliberations on all issues. Like all committee meetings, the

December 4, 1996, meetings were public meetings and all entities, both

large and small, were able to express views on these issues. The

committees themselves are composed of producers, the majority of whom

are small entities.

The interim final rule regarding this action was issued on March

24, 1997, and published in the Federal Register on April 1, 1997 (62 FR

15355). That rule amended Secs. 916.350, 916.356, 917.442, and 917.459

of the rules and regulations in effect under the orders. That rule

provided a 30-day comment period which ended on May 1, 1997. One

comment was received from the committees' Field Director.

The comment was apparently based on a misreading of the application

of tolerances in the U.S. Standards and suggested that the container

tolerances for nectarines included in the interim final rule were

greater than those recommended by the NAC. However, the commenter

recommended that the container tolerances in the interim rule continue

in effect unchanged, since revisions at this point would subject

handlers of nectarines to changes in container tolerances in the middle

of the shipping season. The comment further indicated that the NAC will

likely review the nectarine container tolerances at the end of the 1997

season and consider whether modifications are needed prior to the 1998

season.

The comment also noted three typographical errors in the interim

final rule. The nectarine variety named ``May Fire'' should be spelled

``Mayfire.'' Table 1 in Sec. 916.356 (a)(1) has been corrected

accordingly.

The name of a nectarine variety included in the variety-specific

size requirements at Sec. 916.356(a)(6) has also been corrected from

``White Jewels (Arctic Snow)'' to ``Arctic Snow (White Jewel).''

Finally, the commenter noted that the spelling of ``Kingcrest''

should be changed to ``Kingscrest'' in references to that peach variety

in Table 1 of paragraph (a)(1) and current paragraph (a)(5) of

Sec. 917.459. Those corrections are made by this rule.

The Department also noted a number of errors in the current text of

Secs. 916.356 and 917.459 that are corrected by this rule. The primary

corrections restore regulatory text that was inadvertently misnumbered

or removed during previous rulemaking actions, move certain text to

more appropriate locations, and delete obsolete language no longer

needed. Specific changes are listed below.

Paragraph (a)(1) of Sec. 916.356 is revised to include an exemption

from a grade requirement pertaining to color for nectarine varieties

lacking red blush or red color on the skins. This provision was

inadvertently omitted from the regulatory text in a previous rule.

Paragraphs (a)(1) of Secs. 916.356 and 917.459 are revised to move

the maturity tables, which were misnumbered, to a new subparagraph

(iv). This new subparagraph also contains introductory text pertaining

to the maturity tables, which was misnumbered. Also, provisions

pertaining to appeals of maturity determinations are relocated in a new

subparagraph (v).

In the interim final rule published in the Federal Register on

April 1, 1997 (62 FR 15355), the new provisions pertaining to container

tolerances were duplicatively numbered with the tolerances applicable

to ``CA Utility'' quality nectarines and peaches. The latter tolerances

are placed in subparagraphs (a)(1)(iii) of Secs. 916.356 and 917.459.

In Sec. 916.356, current paragraph (c) is redesignated as paragraph

(d), and the new container tolerances are moved to a new paragraph (c).

In Sec. 917.459, current paragraph (e) is redesignated as paragraph

(f), and the new container tolerances are moved to a new paragraph (e).

[[Page 50859]]

As previously noted, the spelling of the ``Mayglo'' nectarine

variety was corrected in paragraph (a)(3) of Sec. 916.356; this rule

makes that correction in paragraph (a)(2) of that section as well.

In Sec. 917.459, obsolete language pertaining to minimum sizes for

peaches is removed. Current paragraphs (a)(2) and (a)(4) are removed

and current paragraphs (a)(3), (a)(5), and (a)(6) are redesignated as

(a)(2), (a)(3), and (a)(4). Conforming changes are made in paragraphs

(b) and (c) of that section as well.

After consideration of all relevant matter presented, including

that contained in the interim final rule, as well as the committees'

recommendations, the comment received, and other available information,

it is found that this final rule, as hereinafter set forth, will tend

to effectuate the declared policy of the Act.

List of Subjects

7 CFR Part 916

Marketing agreements, Nectarines, Reporting and recordkeeping

requirements.

7 CFR Part 917

Marketing agreements, Peaches, Pears, Reporting and recordkeeping

requirements.

Accordingly, the interim final rule amending 7 CFR parts 916 and

917 which was published at 62 FR 15355 on April 1, 1997, is adopted as

a final rule with the following changes:

PART 916--NECTARINES GROWN IN CALIFORNIA

1. The authority citation for 7 CFR part 916 continues to read as

follows:

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

2. Section 916.356 is amended by:

(A) Revising paragraphs (a)(1) introductory text, and (a)(1)(iii);

(B) Adding new paragraphs (a)(1)(iv), (a)(1)(v), and a new Table 1

with a note immediately following it after paragraph (a)(1)(iv);

(C) Removing the words ``May Glo'' and adding the word ``Mayglo''

in paragraph (a)(2);

(D) Adding the words ``Arctic Snow (White Jewel)'' after the words

``Arctic Queen'' and removing the words ``White Jewels (Arctic Snow)''

in paragraph (a)(6); and

(E) Redesignating paragraph (c) as paragraph (d) and adding a new

paragraph (c) 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 misshapened: Provided further, That all varieties of nectarines

which fail to meet the U.S. No. 1 grade only on account of lack of

blush or red color due to varietal characteristics shall be considered

as meeting the requirements of this subpart: Provided further, That

during the period April 1 through October 31, 1997, 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) * * *

(ii) * * *

(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 paragraph, 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.

(iv) The Federal or Federal-State Inspection Service shall make

final determinations on maturity through the use of color guides or

such other tests as determined appropriate by the inspection agency.

The Federal or Federal-State Inspection Service will use the maturity

guides listed in Table 1 to paragraph (a)(1)(iv) in making maturity

determinations for the specified varieties when inspecting to the

``well matured'' level of maturity. For these varieties, not less than

90 percent of any lot shall meet the color guide established for the

variety, and an aggregate area of not less than 90 percent of the fruit

surface shall meet the color guide established for the variety, except

that for the Fairlane, Tom Grand, and 61-61 varieties of nectarines,

not less than an aggregate area of 80 percent of the fruit surface

shall meet the color guide established for the variety. For varieties

not listed, the Federal or Federal-State Inspection Service will use

such tests as it deems proper. A variance for any variety from the

application of the maturity guides specified in Table 1 to paragraph

(a)(1)(iv) may be granted during the season to reflect changes in crop,

weather, or other conditions that would make the specified guides an

inappropriate measure of ``well matured.''

Table 1 to Paragraph (a)(1)(iv)

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

Column A variety Column B maturity guide

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

Alshir Red................................. J

Ama Lyn.................................... G

Apache..................................... G

April Glo.................................. H

Arm King................................... B

August Glo................................. L

August Lion................................ J

August Red................................. J

Aurelio Grand.............................. F

Autumn Delight............................. L

Autumn Grand............................... L

Big Jim.................................... J

Bob Grand.................................. L

Del Rio Rey................................ G

Earliglo................................... I

Early Diamond.............................. J

Early May.................................. F

Early May Grand............................ H

Early Red Jim.............................. J

Early Sungrand............................. H

Fairlane................................... L

Fantasia................................... J

Firebrite.................................. H

Flamekist.................................. L

Flaming Red................................ K

Flavor Grand............................... G

Flavortop.................................. J

Flavortop I................................ K

Gold King.................................. H

Grand Diamond.............................. L

Grand Stan................................. F

Independence............................... H

July Red................................... L

Juneglo.................................... H

June Grand................................. G

Kay Diamond................................ L

Kent Grand................................. L

King Jim................................... L

Kism Grand................................. J

Late Le Grand.............................. L

Late Red Jim............................... J

Le Grand................................... H

Maybelle................................... F

May Diamond................................ I

Mayfire.................................... H

Mayglo..................................... H

May Grand.................................. H

May Jim.................................... I

May Kist................................... H

May Lion................................... J

[[Page 50860]]

Mid Glo.................................... L

Mike Grand................................. H

Moon Grand................................. L

Niagara Grand.............................. H

Pacific Star............................... G

P-R Red.................................... L

Red Diamond................................ L

Red Delight................................ I

Red Fred................................... J

Red Free................................... L

Red Glen................................... J

Red Glo.................................... I

Red Grand.................................. H

Red Jim.................................... L

Red June................................... G

Red May.................................... J

Regal Grand................................ L

Rio Red.................................... L

Rose Diamond............................... J

Royal Delight.............................. F

Royal Giant................................ I

Royal Glo.................................. I

Ruby Diamond............................... L

Ruby Grand................................. J

Ruby Sun................................... J

Scarlet Red................................ K

September Grand............................ L

September Red.............................. L

Sheri Red.................................. J

Sierra Star/181-119........................ G

Son Red.................................... L

Sparkling June............................. L

Sparkling May.............................. J

Sparkling Red.............................. L

Spring Bright.............................. L

Spring Diamond............................. L

Spring Grand............................... G

Spring Red................................. H

Spring Top................................. B

Star Bright................................ G

Star Brite................................. J

Star Grand................................. H

Summer Beaut............................... H

Summer Blush............................... J

Summer Bright.............................. J

Summer Diamond............................. L

Summer Fire................................ L

Summer Grand............................... L

Summer Lion................................ L

Summer Red................................. L

Summer Star................................ G

Sunburst................................... J

Sun Diamond................................ I

Sunfre..................................... F

Sun Grand.................................. G

Super Star................................. G

Tasty Free................................. J

Tasty Gold................................. H

Tom Grand.................................. L

Zee Glo.................................... J

Zee Grand.................................. I

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

Note: Consult with the Federal or Federal-State Inspection Service

Supervisor for the maturity guides applicable to the varieties not

listed in this table.

(v) If a grower or handler believes his/her fruit is meeting the

appropriate maturity level but the fruit has not been so graded by the

inspector, he/she may appeal the inspection by calling the officer-in-

charge of the local Federal-State Inspection Service office to arrange

for an on-site examination of the fruit.

* * * * *

(c) Container tolerances. A package may contain not more than

double any specified tolerance except that at least two defective

specimens may be permitted in any package: Provided, That the averages

for the entire lot are within the tolerances specified in this part.

PART 917--FRESH PEARS AND PEACHES GROWN IN CALIFORNIA

3. The authority citation for 7 CFR part 917 continues to read as

follows:

4. Section 917.459 is amended by:

(A) Revising paragraphs (a)(1) introductory text, and (a)(1)(iii);

(B) Adding new paragraphs (a)(1)(iv) and (a)(1)(v), and a new Table

1 with a note immediately following it following paragraph (a)(1)(iv);

(C) Removing paragraph (a)(2) and redesignating paragraphs (a)(3),

(a)(4), (a)(5) and (a)(6) as paragraphs (a)(2), (a)(3), (a)(4) and

(a)(5);

(D) Revising the introductory text of paragraphs (b) and (c);

(E) Redesignating paragraph (e) as paragraph (f) and adding a new

paragraph (e) 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 further, That during the period April 1 through

November 23, 1997, 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) * * *

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

peaches in any container may be below the requirements prescribed by

this paragraph. 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 one and one-half times the tolerances specified if the

percentage of defects of the entire lot averages within the tolerances.

(iv) The Federal or Federal-State Inspection Service shall make

final determinations on maturity through the use of color chips or such

other tests as determined appropriate by the inspection agency. The

Federal or Federal-State Inspection Service will use the maturity

guides listed in Table 1 to paragraph (a)(1)(iv) in making maturity

determinations for the specified varieties when inspecting to the

``well matured'' level of maturity. For these varieties, not less than

90 percent of any lot shall meet the color guide established for the

variety, and an aggregate area of not less than 90 percent of the fruit

surface shall meet the color guide established for the variety. For

varieties not listed, the Federal or Federal-State Inspection Service

will use such tests as it deems proper. A variance for any variety from

the application of the maturity guides specified in Table 1 to

paragraph (a)(1)(iv) may be granted during the season to reflect

changes in crop, weather, or other conditions that would make the

specified inappropriate measure of ``well matured.''

Table 1 to paragraph (a)(1)(iv)

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

Column A variety Column B maturity guide

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

Angelus.................................... I

Ambercrest................................. G

August Sun................................. I

Autumn Crest............................... I

Autumn Gem................................. I

Autumn Lady................................ H

Autumn Rose................................ I

Belmont (Fairmont)......................... I

Berenda Sun................................ I

Blum's Beauty.............................. G

Cardinal................................... G

Cal Red.................................... I

Carnival................................... I

Cassie..................................... H

Coronet.................................... E

Crimson Lady............................... J

Crown Princess............................. J

David Sun.................................. I

Diamond Princess........................... J

Early Coronet.............................. D

Early Delight.............................. H

Early Elegant Lady......................... L

Early May Crest............................ H

Early O'Henry.............................. I

Early Top.................................. G

Elberta.................................... B

Elegant Lady............................... L

Fairtime................................... G

Fancy Lady................................. J

Fay Elberta................................ C

[[Page 50861]]

Fayette.................................... I

Fire Red................................... I

First Lady................................. D

Flamecrest................................. I

Flavorcrest................................ G

Flavor Queen............................... H

Flavor Red................................. G

Franciscan................................. G

Goldcrest.................................. H

Golden Crest............................... H

Golden Lady................................ F

Honey Red.................................. G

John Henry................................. J

July Elberta............................... C

July Lady.................................. G

June Lady.................................. G

June Pride................................. J

June Sun................................... H

Kearney.................................... I

Kern Sun................................... H

Kingscrest................................. H

Kings Lady................................. I

Kings Red.................................. I

Lacey...................................... I

Mary Anne.................................. G

May Crest.................................. G

May Lady................................... G

May Sun.................................... I

Merrill Gem................................ G

Merrill Gemfree............................ G

O'Henry.................................... I

Pacifica................................... G

Parade..................................... I

Pat's Pride................................ D

Prima Lady................................. J

Prime Crest................................ H

Queencrest................................. G

Ray Crest.................................. G

Red Cal.................................... I

Red Dancer (Red Boy)....................... I

Redglobe................................... C

Redhaven................................... G

Red Lady................................... G

Redtop..................................... G

Regina..................................... G

Rich Lady.................................. J

Rich May................................... H

Rio Oso Gem................................ I

Royal Lady................................. J

Royal May.................................. G

Ruby May................................... H

Ryan Sun................................... I

Scarlet Lady............................... F

September Sun.............................. I

Sierra Crest............................... H

Sierra Lady................................ I

Sparkle.................................... I

Springcrest................................ G

Spring Lady................................ H

Springold.................................. D

Sugar Lady................................. J

Summer Lady................................ L

Summerset.................................. I

Suncrest................................... G

Topcrest................................... H

Tra Zee.................................... J

Willie Red................................. G

Zee Lady................................... L

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

Note: Consult with the Federal or Federal-State Inspection Service

Supervisor for the maturity guides applicable to the varieties not

listed in this table.

(v) If a grower or handler believes his/her fruit is meeting the

appropriate maturity level but the fruit has not been so graded by the

inspector, he/she may appeal the inspection by calling the officer-in-

charge of the local Federal-State Inspection Service office to arrange

for an on-site examination of the fruit.

* * * * *

(b) During the period April 1 through June 30 of each fiscal

period, no handler shall handle any package or container of any variety

of peaches not specifically named in paragraphs (a)(2), (a)(3) or

(a)(4) of this section unless:

* * * * *

(c) During the period July 1 through October 31 of each fiscal

period, no handler shall handle any package or container of any variety

of peaches not specifically named in paragraphs (a)(2), (a)(3) or

(a)(4) of this section unless:

* * * * *

(e) Container tolerances. The contents of individual packages in

the lot are subject to the following limitations, provided the averages

for the entire lot are within the tolerances specified in this part:

(1) For packages which contain more than 10 pounds, and a tolerance

of 10 percent or more is provided, individual packages shall have not

more than one and one-half times the tolerance specified. For packages

which contain more than 10 pounds and a tolerance of less than 10

percent is provided, individual packages shall have not more than

double the tolerance specified.

(2) For packages which contain 10 pounds or less, individual

packages are not restricted as to the percentage of defects.

* * * * *

Dated: September 18, 1997.

Robert C. Keeney.

Director, Fruit and Vegetable Division.

[FR Doc. 97-25410 Filed 9-26-97; 8:45 am]

BILLING CODE 3410-02-U