# Kiwifruit Research, Promotion, and Consumer Information Order; Referendum Procedures

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URL: https://www.frixlaw.com/law-library/documents/fr%3A97-27323

## Record

- **Collection:** Federal Register
- **Document type:** Rule
- **Published:** October 17, 1997
- **Citation:** 62 FR 54310

## Text

SUMMARY: This rule provides procedures which the Department of
Agriculture (Department) will use in conducting the referendum to
determine whether the issuance of the proposed Kiwifruit Research,
Promotion, and Consumer Information Order (Order) is approved by a
majority of the producers and importers voting in the referendum and
that the producers and importers favoring approval produce and import
50 percent of the total volume of kiwifruit produced and imported by
persons voting in the referendum.

EFFECTIVE DATE: This rule is effective November 17, 1997.

FOR FURTHER INFORMATION CONTACT: Sonia N. Jimenez, Research and
Promotion Branch, Fruit and Vegetable Division, AMS, USDA, P.O. Box
96456, Room 2535-S, Washington, DC 20090-6456, telephone (202) 720-9916
or (888) 720-9917.

SUPPLEMENTARY INFORMATION: This rule is issued under the Kiwifruit
Research, Promotion, and Consumer Information Act [7 U.S.C. 7461-
7473], hereinafter referred to as the Act.

This rule provides the procedures under which the referendum will
be conducted.

Executive Order 12988

This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. It 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 558 of the Act [7
U.S.C. 7467], after an Order is implemented, a person subject to the
Order may file a petition with the Secretary stating that the Order or
any provision of the Order, or any obligation imposed in connection
with the Order, is not in accordance with law and requesting a
modification of the Order or an exemption from the Order. The
petitioner is afforded the opportunity for a hearing on the petition.
After such hearing, the Secretary will make a ruling on the petition.
The Act provides that the district courts of the United States in any
district in which a person who is a petitioner resides or carries on
business are vested with jurisdiction to review the Secretary's ruling
on the petition, if a complaint for that purpose is filed within 20
days after the date of the entry of the ruling.

Executive Order 12866 and Regulatory Flexibility Act

This rule has been determined not significant for purposes of
Executive Order 12866, and therefore has not been reviewed by the
Office of Management and Budget.
In accordance with the Regulatory Flexibility Act [5 U.S.C. 601 et
seq.], the Agency has examined the impact of this rule on small
entities. Accordingly, we have performed this Final Regulatory
Flexibility Analysis.
Legislation to create a generic program of promotion and research
for kiwifruit became effective on April 4, 1996.
Section 561 of the Act [7 U.S.C. 7470] provides that the Secretary
of Agriculture (Secretary) shall conduct a referendum during the 60-day
period immediately preceding the proposed effective date of an Order to
determine whether the issuance of an Order is favored by a majority of
the producers and importers voting in the referendum. Paragraph (a)(2)
of Section 561 of the Act [7 U.S.C. 7470] requires that the Order be
approved by a majority of producers and importers voting in the
referendum and that the producers and importers favoring approval
produce and import 50 percent or more of the volume of kiwifruit
produced and imported by persons voting in the referendum.
There are approximately 650 producers, 45 importers, and 65
handlers of kiwifruit that would be covered by the program. Small
agricultural service firms, which will include the handlers and
importers who would be covered under the Order, have been defined by
the Small Business Administration (SBA) [13 CFR 121.601] as those whose
annual receipts are less than $5 million and small agricultural
producers, those who would be required to pay assessments, as those
having annual receipts of $500,000. Only one handler has been
identified to have $5 million or more in annual sales. In addition,
there are 10 producers at or over the $500,000 annual sales receipts
threshold. The Department does not have specific information regarding
the size of importers. However, it could be concluded that the majority
of kiwifruit producers and importers may be classified as small
entities.
The Department is aware of kiwifruit producers in California,
Oregon, Pennsylvania, South Carolina, and importers that import
kiwifruit from Chile, New Zealand, and Italy. The Department believes
that these individuals would include a majority of the producers and
importers that would be covered under the program. The Department is
also aware that some individuals may be producers of ``hardy
kiwifruit,'' a different species of kiwifruit, known as Actinidia
arguta, which would not be covered under the proposed program. However,
the Department does not have specific information regarding how many
individuals produce only the ``hardy kiwifruit'' versus the ``fuzzy''
most common kiwifruit species, known as Actinidia deliciosa. Therefore,
the total number of producers believed to be covered by the program is
the same as in the proposed rule on this action.
Other names for the species Actinidia arguta (hardy kiwifruit) are
baby kiwifruit, kiwifruit grape, and kiwiberry. There are no official
statistics on this commodity because it is such a small and new crop.
According to comments received on the Order published on October 2,
1996, in the Federal Register, this species is grown in California,
Oregon, Pennsylvania, Washington, Virginia, and British Columbia. The
production in Virginia and Pennsylvania is not commercially marketed.
Oregon production on 5 acres was a total of 216,000 pounds over the
last 3 years. It takes 3 to 5 years to harvest the first crop. The
hardy kiwifruit is hand-harvested and packed in 6-ounce berry baskets
like raspberries. The harvesting, storage, handling, consumer
recognition, and marketing of this species is completely different from
the most common fuzzy kiwifruit or Actinidia deliciosa. Accordingly, we
changed the definition of kiwifruit in the proposed order to mean all
varieties of fresh kiwifruit classified under the species Actinidia
deliciosa or the genus Actinidia. That definition of kiwifruit is added
in this rule as well. All references to ``kiwifruit'' in this document,
therefore, mean the Actinidia deliciosa species.
California is the source for practically all (99.7 percent) of the
kiwifruit produced in the United States. The California kiwifruit
industry consists of approximately 600 producers and 65 handlers.
Production rose by 75 percent between 1984 and 1996, increasing from

[[Page 54311]]

18 thousand tons to 31.5 tons. In the period from 1984 through 1996,
the value of production fell by 26 percent.
Most U.S. kiwifruit is utilized fresh. Fresh utilization increased
by 123 percent between 1984 and 1996, growing from 11.7 thousand tons
to 26.1 thousand tons. The season average price during 1984 through
1996 fell by 53 percent, declining from $1,070 per ton to $502 per ton.
Exports accounted for about 30 percent of U.S. fresh utilization during
that period.
Between 1992 and 1996, the average annual production per producer,
including kiwifruit for processing, was 99 tons or 28,286 7-pound trays
of kiwifruit. The average price was $406 per ton, giving an average
return of about $40,000 per producer per year. A typical tray price
during this period was $1.42 per tray, and the average amount shipped
per handler was about 148,276 trays, yielding an average annual revenue
per handler of $210,552. U.S. importers handled an average of 184,857
trays per year per importer. During this period, the average value of
total imports per year was $18.3 million (f.o.b. country of origin).
The majority of kiwifruit came from Chile, with the remaining coming
from New Zealand and Italy. In 1996, imports totaled 87.9 million
pounds, up 5 percent from 1995. The value of imports in 1996 was $26.5
million.
The proposed rule published in the Federal Register on October 2,
1996, provided statistics on production, value of production, fresh
utilization, average price, average return per producer, average annual
revenue per handler, and other related statistics that are different
from the statistics provided in this rule. These changes are due to the
fact that the October 2, 1996, rule relied on statistics from 1985
through 1995 because 1996 crop year statistics were not available. When
1996 statistics are added to the averages, the final averages change
because the domestic 1996 crop statistics are considerably lower in
terms of production, and fresh utilization. For example, production
from 1985 to 1995 increased an average of 119 percent. However, when
adding 1996 production, the average from 1985 to 1996 shows an average
increase of only 75 percent. Therefore, adding the 1996 statistics to
the averages provided in the October 2 proposed rule changes the
statistical averages, in some cases considerably, making the statistics
for production and fresh utilization lower than previously indicated.
This rule provides the procedures under which kiwifruit producers
and importers may vote on whether they want the kiwifruit research and
promotion program to be implemented. Kiwifruit producers of 500 pounds
or more and importers of 10,000 pounds or more annually can vote in the
referendum. There are approximately 700 eligible voters.
The Department will keep all these individuals informed throughout
the program implementation and referendum process to ensure that they
are aware of and are able to participate in the program implementation
process. In addition, trade associations and related industry media
will receive news releases and other information regarding the
implementation and referendum process.
There is a federal marketing order program and a California state
program for kiwifruit. The marketing order regulations for grade, size,
maturity, and containers are designed to assure consumers of
consistently good quality California kiwifruit. The marketing order and
its regulations allow small farmers to compete effectively in an
increasingly competitive marketplace. The California Kiwifruit
Commission (CKC) administers the California state program for
kiwifruit. The CKC is composed of kiwifruit producers, packers, and
handlers.
In 1996-97 it is estimated that producers would pay $1.15 million
in assessments at a rate of 17 cents per kiwifruit tray or tray
equivalent. Handlers collect the assessments and remit the money to the
CKC.
Voting in the referendum is optional. However, if producers and
importers choose to vote, the burden of voting will be offset by the
benefits of having the opportunity to vote on whether they want the
program or not.
The Department considered requiring eligible voters to vote in
person at various Department offices across the country. However,
conducting the referendum from one central location by mail ballot is
more cost effective for this program. Also, the Department will provide
easy access to information for potential voters through a toll free
telephone line.

Paperwork Reduction Act

In accordance with the Office of Management and Budget (OMB)
regulations [5 CFR Part 1320] which implements the Paperwork Reduction
Act of 1995 [44 U.S.C. Chapter 35], the referendum ballot has been
approved by the Office of Management and Budget (OMB) and has been
assigned OMB number 0581-0093.
Title: National Research, Promotion, and Consumer Information
Programs.
OMB Number: 0581-0093.
Expiration Date of Approval: October 31, 1997.
Type of Request: Revision of a currently approved information
collection for research and promotion programs.
Abstract: The information collection requirements in this request
are essential to carry out the intent of the Act.
The burden associated with the ballot is as follows:
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average .25 hours per response for each
producer and importer.
Respondents: Producers and importers.
Estimated Number of Respondents: 700.
Estimated Number of Responses per Respondent: 1 every 6 years
(.16).
Estimated Total Annual Burden on Respondents: 29 hours.
No comments were received concerning the collection of information,
the accuracy of the estimated burden, or ways to enhance or minimize
the collection of information.

Background

The Act authorizes the Secretary to establish a national kiwifruit
research, promotion, and consumer information program. The program
would be funded by an assessment levied on producers and importers not
to exceed 10 cents per 7-pound tray of kiwifruit. Producers who produce
less than 500 pounds annually, importers who import less than 10,000
pounds annually, and kiwifruit sold directly to a consumer by a
producer for a purpose other than resale and domestic and imported
kiwifruit for processing are exempt from assessments.
Assessments would be used to pay for: research, promotion, and
consumer information; administration, maintenance, and functioning of
the Board; and expenses incurred by the Secretary in implementing and
administering the Order, including referendum costs.
Section 561 of the Act [7 CFR part 7470] requires that a referendum
be conducted among eligible producers and importers of kiwifruit to
determine whether they favor implementation of the Order. The Order
shall become effective if it is approved by a majority of producers and
importers voting in the referendum and the producers and importers
favoring approval produce and import more than 50 percent of the total
volume of kiwifruit produced and imported by persons voting in the
referendum.

[[Page 54312]]

A proposed rule containing the proposed Order was published in the
October 2, 1996, issue of the Federal Register [61 FR 51378]. A
proposal containing that proposed order that will be subject to
referendum is being published separately in this issue of the Federal
Register.
This final rule provides the procedures under which kiwifruit
producers and importers may vote on whether they want the kiwifruit
research and promotion program to be implemented. Kiwifruit producers
of 500 pounds or more and importers of 10,000 pounds or more annually
can vote in the referendum. There are approximately 700 eligible
voters.
This final rule will add a new subpart which establishes procedures
to be used in the referendum. This subpart covers definitions, voting,
instructions, use of subagents, ballots, the referendum report, and
confidentiality of information.
A proposed rule with a request for comments on the referendum
procedures was published in the October 2, 1996, issue of the Federal
Register [61 FR 51391]. No comments were received on the proposal.
However, comments were received on the proposed Order regarding the
definition of kiwifruit. The commenters expressed that some individuals
may be producers of ``hardy kiwifruit,'' a different species of
kiwifruit, known as Actinidia arguta. Other names for this species
(hardy kiwifruit) are baby kiwifruit, kiwifruit grape, and kiwiberry.
There are no official statistics on this commodity because it is such a
small and new crop. According to comments received on the proposed
Order this species is grown in California, Oregon, Pennsylvania,
Washington, Virginia, and British Columbia. The production in Virginia
and Pennsylvania is not commercially marketed. Oregon production on 5
acres was a total of 216,000 pounds over the last 3 years. It takes 3
to 5 years to harvest the first crop. The hardy kiwifruit is hand-
harvested and packed in 6-ounce berry baskets like raspberries. The
harvesting, storage, handling, consumer recognition, and marketing of
this species is completely different from the most common fuzzy
kiwifruit or Actinidia deliciosa. Accordingly, we changed the
definition of kiwifruit in the proposed order to mean all varieties of
fresh kiwifruit classified under the species Actinidia deliciosa or the
genus Actinidia. That definition of kiwifruit is added in this rule as
well. All references to ``kiwifruit'' in this document, therefore, mean
the Actinidia deliciosa species.
Accordingly, no changes to the text of the regulation as proposed
are made in this final rule, except for the addition of the definition
of kiwifruit that appears in the proposed order. After consideration of
all relevant material presented, it is found that this final rule
effectuates the declared policy of the Act.

List of Subjects in 7 CFR Part 1214

Administrative practice and procedure, Advertising, Consumer
information, Marketing agreements, Kiwifruit, Promotion, Reporting and
recordkeeping requirements.

For the reasons set forth in the preamble, Title 7, chapter XI of
the Code of Federal Regulations is amended as follows:
1. Part 1214 is added to read as follows:

PART 1214--KIWIFRUIT RESEARCH, PROMOTION, AND CONSUMER INFORMATION
ORDER

Subpart A--Reserved

Subpart B--Reserved

Subpart C--Procedure for the Conduct of Referenda in Connection With
the Kiwifruit Research, Promotion, and Consumer Information Order

Sec.
1214.200 General.
1214.201 Definitions.
1214.202 Voting.
1214.203 Instructions.
1214.204 Subagents.
1214.205 Ballots.
1214.206 Referendum report.
1214.207 Confidential information.

Authority: 7 U.S.C. 7461-7473.

Subpart C--Procedure for the Conduct of Referenda in Connection
With the Kiwifruit Research, Promotion, and Consumer Information
Order

Sec. 1214.200 General.

A referendum to determine whether eligible producers and importers
favor the issuance of a proposed Kiwifruit Research, Promotion, and
Consumer Information Order shall be conducted in accordance with this
subpart.

Sec. 1214.201 Definitions.

Unless otherwise defined in this section, the definition of terms
used in this subpart shall have the same meaning as the definitions in
the Order.
(a) Administrator means the Administrator of the Agricultural
Marketing Service, with power to redelegate, or any officer or employee
of the Department to whom authority has been delegated or may hereafter
be delegated to act in the Administrator's stead.
(b) Order means the Kiwifruit Research, Promotion, and Consumer
Information Order.
(c) Referendum agent or agent means the individual or individuals
designated by the Secretary to conduct the referendum.
(d) Representative period means the period designated by the
Secretary.
(e) Person means any individual, group of individuals, partnership,
corporation, association, cooperative, or any other legal entity. For
the purpose of this definition, the term ``partnership'' includes, but
is not limited to:
(1) A husband and wife who has title to, or leasehold interest in,
kiwifruit production facilities and equipment as tenants in common,
joint tenants, tenants by the entirety, or, under community property
laws, as community property, and
(2) So-called ``joint ventures,'' wherein one or more parties to
the agreement, informal or otherwise, contributed capital and others
contributed labor, management, equipment, or other services, or any
variation of such contributions by two or more parties so that it
results in the production or importation of kiwifruit and the authority
to transfer title to the kiwifruit so produced or imported.
(f) Eligible producer means any person or entity defined as a
producer who produced 500 pounds or more of kiwifruit during the
representative period and who:
(1) Owns or shares in the ownership of kiwifruit production
facilities and equipment resulting in the ownership of the kiwifruit
produced;
(2) Rents kiwifruit production facilities and equipment resulting
in the ownership of all or a portion of the kiwifruit produced;
(3) Owns kiwifruit production facilities and equipment but does not
manage them and, as compensation, obtains the ownership of a portion of
the kiwifruit produced; or
(4) Is a party in a landlord-tenant relationship or a divided
ownership arrangement involving totally independent entities
cooperating only to produce kiwifruit who share the risk of loss and
receive a share of the kiwifruit produced. No other acquisition of
legal title to kiwifruit shall be deemed to result in persons becoming
eligible producers.
(g) Eligible importer means any person or entity defined as an
importer who imported 10,000 pounds or more during the representative
period. Importation occurs when commodities originating outside the
United States are entered or withdrawn from the U.S. Customs

[[Page 54313]]

Service for consumption in the United States. Included are persons who
hold title to foreign-produced kiwifruit immediately upon release by
the U.S. Customs Service, as well as any persons who act on behalf of
others, as agents or broker, to secure the release of kiwifruit from
the U.S. Customs Service when such kiwifruit are entered or withdrawn
for consumption in the United States.
(h) Kiwifruit means all varieties of fresh kiwifruit classified
under the species Actinidia deliciosa or the genus Actinidia, whose
fruit is a large berry, oval in shape, with a brown skin covered in
hairs, which are grown in or imported into the United States.

Sec. 1214.202 Voting.

(a) Each person who is an eligible producer or importer, as defined
in this subpart, at the time of the referendum and during the
representative period, shall be entitled to cast only one ballot in the
referendum. However, each producer in a landlord-tenant relationship or
a divided ownership arrangement involving totally independent entities
cooperating only to produce kiwifruit, in which more than one of the
parties is a producer, shall be entitled to cast one ballot in the
referendum covering only such producer's share of the ownership.
(b) Proxy voting is not authorized, but an officer or employee of
an eligible corporate producer or importer, or an administrator,
executor, or trustee of an eligible producing or importing entity may
cast a ballot on behalf of such producer or importer entity. Any
individual so voting in a referendum shall certify that such individual
is an officer or employee of the eligible producer or importer, or an
administrator, executor, or trustee of an eligible producing or
importing entity, and that such individual has the authority to take
such action. Upon request of the referendum agent, the individual shall
submit adequate evidence of such authority.
(c) All ballots are to be cast by mail.

Sec. 1214.203 Instructions.

The referendum agent shall conduct the referendum, in the manner
provided in this subpart, under the supervision of the Administrator.
The Administrator may prescribe additional instructions, not
inconsistent with the provisions of this section, to govern the
procedure to be followed by the referendum agent. Such agent shall:
(a) Determine the time of commencement and termination of the
period during which ballots may be cast.
(b) Provide ballots and related material to be used in the
referendum. Ballot material shall provide for recording essential
information including that needed for ascertaining:
(1) Whether the person voting, or on whose behalf the vote is cast,
is an eligible voter;
(2) The total volume of kiwifruit produced by the voting producer
during the representative period; and
(3) The total volume of kiwifruit imported by the voting importer
during the representative period.
(c) Give reasonable advance public notice of the referendum:
(1) By utilizing available media or public information sources,
without incurring advertising expense, to publicize the dates, places,
method of voting, eligibility requirements, and other pertinent
information. Such sources of publicity may include, but are not limited
to, print and radio; and
(2) By such other means as the agent may deem advisable.
(d) Mail to eligible producers and importers, whose names and
addresses are known to the referendum agent, the instructions on
voting, a ballot, and a summary of the terms and conditions of the
proposed Order. No person who claims to be eligible to vote shall be
refused a ballot.
(e) At the end of the voting period, collect, open, number, and
review the ballots and tabulate the results in presence of an agent of
the Office of Inspector General.
(f) Prepare a report on the referendum.
(g) Announce the results to the public.

Sec. 1214.204 Subagents.

The referendum agent may appoint any individual or individuals
deemed necessary or desirable to assist the agent in performing such
agent's functions in this subpart. Each individual so appointed may be
authorized by the agent to perform any or all of the functions which,
in the absence of such appointment, shall be performed by the agent.

Sec. 1214.205 Ballots.

The referendum agent and subagents shall accept all ballots cast;
but, should they, or any of them, deem that a ballot should be
challenged for any reason, the agent or subagent shall endorse above
their signature, on the ballot, a statement to the effect that such
ballot was challenged, by whom challenged, the reasons therefore, the
results of any investigations made with respect thereto, and the
disposition thereof. Ballots invalid under this subpart shall not be
counted.

Sec. 1214.206 Referendum report.

Except as otherwise directed, the referendum agent shall prepare
and submit to the Administrator a report on results of the referendum,
the manner in which it was conducted, the extent and kind of public
notice given, and other information pertinent to analysis of the
referendum and its results.

Sec. 1214.207 Confidential information.

The ballots and other information or reports that reveal, or tend
to reveal, the vote of any person covered under the Act and the voting
list shall be held confidential and shall not be disclosed.

Dated: October 8, 1997.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 97-27323 Filed 10-16-97; 8:45 am]
BILLING CODE 3410-02-U

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A97-27323. Public record. Not legal advice.