Grapes Grown in a Designated Area of Southeastern California and Imported Table Grapes; Revision in Minimum Grade, Container, and Pack Requirements

Federal RegisterMay 26, 1998

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 925 and 944

[Docket No. FV98-925-3 IFR]

Grapes Grown in a Designated Area of Southeastern California and

Imported Table Grapes; Revision in Minimum Grade, Container, and Pack

Requirements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule revises minimum grade requirements for grapes grown

in southeastern California and for grapes imported into the United

States. It also revises container and pack requirements currently

prescribed for California grapes. This rule allows California grape

handlers to market consumer packages of grapes more economically by

increasing the range of allowable bunch sizes for a portion of the 1998

season. Master containers of consumer grape packages could be marketed

if the grape clusters/bunches in the packages consist of at least 2

berry clusters and the clusters/bunches are not greater than 19 ounces

in weight. The increased bunch size range also applies to imported

grapes. This action is in the interest of handlers, producers,

importers, and consumers.

DATES: Effective June 1, 1998; comments must be received by June 25,

1998 and will be considered prior to issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments

concerning this rule. Comments must be sent to the Docket Clerk, Fruit

and Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box 96456,

Washington, DC 20090-6456; Fax: (202) 205-6632. All comments should

reference the docket number and the date and page number of this issue

of the Federal Register and will be available for public inspection in

the Office of the Docket Clerk during regular business hours.

FOR FURTHER INFORMATION CONTACT: Rose M. Aguayo, Marketing Specialist,

California Marketing Field Office, Marketing Order Administration

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

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

Anne M. Dec, Team Leader, Marketing Order Administration Branch, F&V,

AMS, USDA, room 2525-S, P.O. Box 96456, Washington, DC 20090-6456;

telephone: (202) 720-2491, Fax: (202) 205-6632. Small businesses may

request information on compliance with this regulation by contacting

Jay Guerber, Marketing Order Administration Branch, F&V, AMS, USDA,

room 2525-S, P.O. Box 96456, Washington, DC 20090-6456; telephone:

(202) 720-2491, Fax: (202) 205-6632.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order

No. 925 (7 CFR Part 925), regulating the handling of grapes grown in a

designated area of southeastern California, hereinafter referred to as

the ``order.'' The order is effective under the Agricultural Marketing

Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter

referred to as the ``Act.''

This rule is also issued under section 8e of the Act, which

provides that whenever certain specified commodities, including table

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

commodities into the United States are prohibited unless they meet the

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

those in effect for the domestically produced commodities.

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

conformance with Executive Order 12866.

This 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 date of the entry of the ruling.

There are no administrative procedures which must be exhausted

prior to any judicial challenge to the provisions of import regulations

issued under section 8e of the Act.

This rule increases the range of allowable sizes of grape bunches

that California handlers can pack in certain containers during the

period June 1, 1998, through August 15, 1998. Master containers of

consumer grape packages can be marketed if the grape clusters/bunches

in the packages consist of at least 2 berry clusters and the clusters/

bunches are not greater than 19 ounces in weight. The increased bunch

size range also applies to imported grapes, but no container

specifications apply. The changes in domestic requirements were

recommended by the California Desert Grape Administrative Committee

(Committee), the agency responsible for local administration of the

order.

Under the terms of the order, fresh market shipments of grapes

grown in southeastern California are required to be inspected and meet

grade, size, maturity, pack, and container requirements. Current

requirements include minimum grade and net weight requirements. Grapes

must also be packed in authorized containers, and such containers must

be marked with the minimum net weight of the grapes contained therein,

the variety of the grapes, the name of the shipper, and the lot stamp

number corresponding to the lot inspection conducted by an authorized

inspector.

Section 925.52(a)(2) of the grape order provides authority to limit

the handling

[[Page 28476]]

of any grade, size, quality, maturity, or pack of grapes for different

varieties, or any combination of the foregoing during any period or

periods.

Section 925.304(a) of the order's administrative rules and

regulations requires grapes to meet the minimum grade requirements of

U.S. No. 1 Table, or U.S. No. 1 Institutional, or to meet all the

requirements of U.S. No. 1 Institutional, except that a tolerance of 33

percent is provided for off-size bunches. Grapes meeting U.S. No. 1

Institutional requirements are required to be marked ``U.S. No. 1

Institutional.'' Grapes meeting the modified U.S. No. 1 Institutional

requirements may be marked ``DGAC No. 1 Institutional.'' The

requirements for the U.S. No. 1 Table and U.S. No. 1 Institutional

grades are set forth in the United States Standards for Grades of Table

Grapes (European or Vinifera Type) (7 CFR 51.880 through 51.914)

(Standards).

Section 925.52(a)(4) of the order provides authority to regulate

the size, capacity, weight, dimensions, markings, materials, and pack

of containers which may be used in the handling of grapes.

Section 925.304(b)(1) of the order's administrative rules and

regulations requires grapes to be packed in new and clean boxes which

meet the requirements of sections 1380.14, 1380.19, 1436.37, and

1436.38 of Title 3: California Code of Regulations (CCR). That section

also authorizes nine containers that can be used for domestic and

export shipments and specifies dimensions for each such container. An

additional container, defined in terms of a net weight of 5 kilograms,

is authorized for export shipments only. All 10 of the authorized

containers may be used for export shipments. Only the first nine can be

used for domestic shipments.

Finally, Sec. 925.304(b)(1) authorizes the Committee to approve

other containers for experimental or research purposes.

Section 925.304(b)(2) of the order's administrative rules and

regulations provides that grapes in any containers weigh at least 20

pounds based on the average net weight of grapes in a representative

sample of containers. An exception is provided for grapes packed in

experimental containers, or packed in bags or wrapped in plastic or

paper. Containers of grapes packed in bags or wrapped in plastic or

paper prior to being placed in these containers must meet a minimum net

weight requirement of 18 pounds. There are no weight requirements

specified for experimental containers.

The Committee met on March 24, 1998, and unanimously recommended

modifying Sec. 925.304 of the order's administrative rules and

regulations to make the following changes:

(1) Revise the minimum grade requirement for the period June 1,

1998, through August 15, 1998, to allow a pilot test for the marketing

of grapes which meet all the requirements of U.S. No. 1 Institutional

except for the weight of clusters/bunches. The revision allows

clusters/bunches as small as a 2 berry cluster and as large as 19

ounces in weight. Grapes meeting these quality requirements are to be

marked ``DGAC Consumer No. 1 Institutional'' but cannot be marked

``Institutional Pack.''

(2) Authorize an experimental master container, containing

individual consumer packages of grapes which weigh 1\1/2\ pounds or

less, net weight, for use during the pilot test period of June 1, 1998,

to August 15, 1998. Grapes meeting the ``DGAC Consumer No. 1

Institutional'' requirements must be packed in this container and this

master container can only be used for packing the ``DGAC Consumer No. 1

Institutional'' grade.

(3) Update or remove certain obsolete references appearing in the

regulation.

Revision in Minimum Grade Requirements

Until 1993, the minimum grade requirement under the order was U.S.

No. 1 Table. One requirement of that grade is that grape bunches weigh

at least 4 ounces.

In 1991, a new U.S. No. 1 Institutional grade was added to the

Standards. This grade--used primarily for sales to restaurants and

other food service firms--provides for grape lots which have very small

bunches. At the request of the table grape industry, this grade was

added to meet market demand for individual consumer sized servings of

grapes. The Standards were further revised in 1996 to lower the minimum

bunch size to a two berry cluster and specify a separate 4 percent

tolerance for off-size bunches.

The minimum grade requirements under the order were changed in 1993

to allow California grape handlers to pack the newly established U.S.

No. 1 Institutional grade. Because handlers experienced difficulties in

packing this grade, these requirements were further revised in 1994 to

provide a tolerance of 33 percent for off-size bunches. This modified

U.S. No. 1 Institutional grade is referred to as DGAC No. 1

Institutional.

Currently, during the period April 20 through August 15 each year,

California grape handlers can ship grapes meeting at least U.S. No. 1

Table, U.S. No. 1 Institutional, or DGAC No. 1 Institutional.

The requirements of the U.S. No. 1 Institutional are essentially

the same as those of the U.S. No. 1 Table grade, with three major

exceptions. The first difference relates to bunch size. Under the U.S.

No. 1 Table grade, there is a minimum bunch size requirement of 4

ounces and no maximum bunch size. Under the U.S. No. 1 Institutional

grade, grapes are to consist of at least a two berry cluster ranging to

clusters and/or bunches of grapes not greater than five ounces in

weight. A cluster is two or more berries sharing a common point of

attachment.

The second difference is that at least 95 percent of the containers

in a lot of grapes grading U.S. No. 1 Institutional must be legibly

marked ``Institutional Pack.'' There are no marking requirements under

the U.S. No. 1 Table grade.

The third difference relates to the tolerances for off-size

bunches. For grapes grading U.S. No. 1 Table, an 8 percent tolerance is

established for all grade requirements, including off-size bunches. The

U.S. No. 1 Institutional grade has a separate tolerance of 4 percent

for off-size clusters/bunches and an 8 percent tolerance for the

remaining grade requirements.

Requirements for the DGAC No. 1 Institutional are the same as for

the U.S. No. 1 Institutional, except that the tolerance for off-size

bunches is 33 percent. Because grapes meeting these requirements do not

meet the U.S. No. 1 Institutional grade requirements, they cannot be

marked ``Institutional Pack.'' They may, however, be marked ``DGAC No.

1 Institutional.''

Recently, there has been interest in packing grapes in individual

consumer packages known as ``punits'' or ``clamshells.'' These

containers, used most commonly to pack strawberries, are made of a

clear, hard rigid plastic and typically hold a half pound or a pound of

fruit. Some retailers prefer these containers because they are of the

same net weight, and can be scanned at check-out. This is particularly

convenient for retailers that do not have facilities for weighing

produce, such as convenience stores and fast food outlets. Some

consumers also prefer the convenience of prepackaged individual

portions of fruit.

To meet changing market requirements, California grape handlers

would like to be able to pack these consumer packages. Current bunch

size requirements make it difficult however. Grape bunches normally

range in weight from \1/4\ pound to 3 pounds. Thus, portions of bunches

have to be used to fill the new packages to the weights desired by

buyers. Handlers have

[[Page 28477]]

determined that increasing the range of permissible bunch sizes to

allow for clusters/bunches of two berries to 19 ounces will provide

handlers the flexibility needed to pack grapes in the desired consumer

containers.

This rule revises Sec. 925.304(a) of the order's rules and

regulations to allow handlers to ship a new grade of grapes to be known

as DGAC Consumer No. 1 Institutional. The name recognizes that such

grapes will be packed in consumer packages and that the grapes are not

packed to the minimum requirements of the U.S. No. 1 Table grade.

Grapes meeting this requirement must meet the requirements of the U.S.

No. 1 Institutional grade, except for the cluster/bunch size

requirements. Specifically, these modified requirements allow shipments

with clusters/bunches ranging from 2 berry clusters to clusters/bunches

of grapes up to 19 ounces in weight.

Container Requirements

The Committee recommended that grapes packed in accordance with the

new DGAC Consumer No. 1 Institutional requirements be packed in a

certain way. These grapes must be packed in individual consumer

packages. The consumer packages must then be packed in a master

container.

Typically, the individual consumer packages hold either \1/2\ or 1

pound of fruit. To allow for normal shrinkage during handling, handlers

generally pack a slightly greater weight than is desired at retail.

Section 925.304(b) is revised to provide that DGAC Consumer No. 1

Institutional grade grapes be packed in master containers containing

individual consumer packages weighing 1\1/2\ pounds or less.

Additionally, these master containers are required to be marked

``DGAC Consumer No. 1 Institutional'' to accurately reflect their

contents. The individual consumer packages do not need to be so marked.

Other container marking requirements appearing in the regulation apply

to the master containers as well.

The master containers used for these grapes will typically hold 10

consumer packages weighing 1 pound each or 20 packages weighing \1/2\

pound each. Thus, these containers are exempt from the net weight

requirements of 18 or 20 pounds specified in Sec. 925.304(b)(2).

Application to Imports

Section 8e of the Act specifies that whenever certain commodities,

like grapes, are regulated under a Federal order, imports of those

commodities must meet the same or comparable grade, size, quality, and

maturity requirements as those in effect for the domestically produced

commodity. Pack and container requirements are not authorized by

section 8e. Thus, the revised grade requirements implemented by this

rule apply to imported grapes; none of the container or container

marking requirements apply, however. If desired, importers may label

containers of grapes meeting the modified U.S. No. 1 Institutional

requirements as ``DGAC Consumer No. 1 Institutional.'' Specifically,

this rule modifies language in Sec. 944.503(a)(1) of the Table Grape

Import Regulation 4 for fresh grapes imported into the United States.

Clarification/Removal of Obsolete Language

This rule removes language in the introductory text of Sec. 925.304

by removing a proviso that applies to the 1987 season and is no longer

necessary.

This rule makes several other corrections in both the order's

administrative rules and regulations and the import regulation.

Specifically, the tolerance percentage of ``8 percent'' is changed to

``4 percent'' in Secs. 925.304(a) of the order's administrative rules

and regulations and in 944.503(a)(1) of the import regulation. This

corrects those sections to accurately specify the current tolerance for

off-size bunches in the U.S. No. 1 Institutional grade. This rule

corrects a reference to the Standards from section number ``51.913'' to

section number ``51.914'' in Secs. 925.304(a) of the order and in

944.503(a)(1) of the import regulation; and changes a California

Department of Food and Agriculture reference from ``California

Administrative Code (Title 3)'' to ``Title 3: California Code of

Regulations'' in paragraph (a)(1)(ii) of Sec. 944.503 of the import

regulation.

Initial Regulatory Flexibility Analysis

Pursuant to requirements set forth in the Regulatory Flexibility

Act (RFA), the Administrator of the Agricultural Marketing Service

(AMS) has considered the economic impact of this rule 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. Import regulations issued under

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

There are approximately 27 handlers of California grapes who are

subject to regulation under the order and approximately 80 grape

producers in the production area. In addition, there are approximately

127 importers of grapes. 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 have been defined as those having annual receipts of less

than $500,000. Ten of the 27 handlers subject to regulation have annual

grape sales of at least $5,000,000, excluding receipts from any other

sources. In addition, 70 of the 80 producers subject to regulation have

annual sales of at least $500,000, and the remaining 10 producers have

annual sales less than $500,000, excluding receipts from any other

sources. Therefore, a majority of handlers and a minority of producers

are classified as small entities. The average importer receives $2.8

million in grape revenue, excluding receipts from other sources.

Therefore, we believe that the majority of these importers are small

entities.