Kiwifruit Grown in California; Changes in Minimum Size, Pack, Container, and Inspection Requirements

Federal RegisterJul 29, 1999

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 920

[Docket No. FV98-920-4 FR]

Kiwifruit Grown in California; Changes in Minimum Size, Pack,

Container, and Inspection Requirements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

SUMMARY: This rule revises the minimum size, pack, container, and

inspection requirements prescribed under the California kiwifruit

marketing order. The marketing order regulates the handling of

kiwifruit grown in California and is administered locally by the

Kiwifruit Administrative Committee (Committee). This rule specifies

minimum size requirements for all kiwifruit as a maximum of 55 pieces

of fruit in an 8-pound sample regardless of pack style; requires that

individual consumer packages placed directly on a pallet be stamped

with the applicable inspection lot number; and makes minor changes to

clarify pack and container marking requirements for several containers.

In addition, this rule continues, for the 1999-2000 season, the

suspension of minimum net weight requirements for kiwifruit tray packs

scheduled to expire at the end of the 1998-1999 season. Also, continued

for the 1999-2000 season is the suspension of the requirement that

fruit must be reinspected if it has not been shipped by specified

dates. These changes clarify the minimum size, pack, and container

requirements, and are expected to reduce handler packing costs,

increase producer returns, and enable handlers to compete more

effectively in the marketplace.

EFFECTIVE DATE: This final rule becomes effective August 1, 1999. The

suspension of Secs. 920.302(a)(4)(iii), and 920.155 expires on August

1, 2000.

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: (559) 487-5901, Fax: (559) 487-5906; or

George Kelhart, Technical Advisor, Marketing Order Administration

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

96456, Washington, DC 20090-6456; telephone: (202) 720-2491, Fax: (202)

720-5698. Small businesses may request information on complying with

this regulation or obtain a guide on complying with fruit, vegetable,

and specialty crop marketing agreements and orders by contacting Jay

Guerber, Marketing Order Administration Branch, Fruit and Vegetable

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

6456; telephone: (202) 720-2491, Fax: (202) 720-5698, or E-mail

Jay.G[email protected]. You may view the marketing agreement and order

small business compliance guide at the following web site: http://

www.ams.usda.gov/fv/moab.html.

SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing

Order No. 920, as amended (7 CFR part 920), regulating the handling of

kiwifruit grown in California, hereinafter referred to as the

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

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

referred to as the ``Act.''

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

conformance with Executive Order 12866.

This final 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.

This final rule revises the minimum size, pack, container, and

inspection requirements prescribed under the California kiwifruit

marketing order. The marketing order regulates the handling of

kiwifruit grown in California and is administered locally by the

Committee.

This rule specifies the minimum size requirements for all kiwifruit

as a maximum of 55 pieces of fruit in an 8-pound sample regardless of

pack style; requires that individual consumer packages placed directly

on a pallet be stamped with the applicable inspection lot number; and

makes minor changes to clarify pack and container marking requirements

for several containers.

In addition, this rule continues, for the 1999-2000 season, the

suspension of the minimum net weight requirements in Sec. 920.302

(a)(4)(iii) for kiwifruit packed in containers with cell compartments,

cardboard fillers, or molded trays scheduled to expire at the end of

the 1998-1999 season. This suspension action was implemented by an

interim final rule published last September (63 FR 46861; September 3,

1998). No comments were received pursuant to the request for comments

in the interim final rule. A final rule published last August suspended

the requirement in Sec. 920.155 that fruit must be reinspected if it

has not been shipped by specified dates for the 1998-1999 season (63 FR

41390; August 4, 1998). This rule also continues the suspension of this

requirement for the 1999-2000 season. These changes were unanimously

recommended by the Committee. Clarification of the minimum size, pack,

and container requirements are expected to reduce handler packing

costs, increase producer returns, and enable handlers to compete more

effectively in the marketplace.

The interim final rule published last September also increased the

size variation tolerance, from 10 percent, by count, in any one

container, to 25 percent, by count, for Size 42 kiwifruit, and the

maximum number of fruit per 8-pound sample for Sizes 42, 39, 36, 33,

and 30 of kiwifruit packed in bags,

[[Page 41011]]

volume fill, or bulk containers for the 1998-1999 and future seasons.

This action does not change these provisions.

In early November 1998, the Department determined that suspending

the minimum net weight requirements as specified in

Sec. 920.302(a)(4)(iii) without redefining the size designation

definition in Sec. 920.302 (b)(2) had inadvertently limited application

of the minimum size requirements to volume fill packs.

The Committee met on November 19, 1998, and clarified that its

original intent had been to maintain the minimum size requirement on

all kiwifruit regardless of pack style. The Committee discussed

changing the regulatory language so that minimum size applied to all

pack styles for the remainder of the 1998-1999 season, but concluded

that it would be unfair to growers and handlers to change this

requirement in mid-season. The Committee believed that orderly

marketing would continue as harvest was nearly completed at the time of

the November 1998 meeting and because a small amount of minimum size

kiwifruit had been packed in trays.

The Committee met again on January 13, 1999, to discuss industry

issues and to make preliminary recommendations for the 1999-2000

season. The Committee concluded that the recommended changes made for

the 1998-1999 season had benefitted the industry. Both small and large

handlers were able to reduce packing costs and compete more effectively

in the marketplace because of the relaxations made to the requirements.

The Committee made the following preliminary recommendations for

the 1999-2000 season: (1) Specify that minimum size requirements apply

to all kiwifruit regardless of pack style and define Size 45 in terms

of weight and not pack requirements; (2) make minor changes to clarify

pack and container marking requirements for several containers; (3)

continue the suspension of the requirement that fruit must be

reinspected if it has not been shipped by specified dates for the 1999-

2000 season; and (4) continue the suspension of the minimum net weight

requirements for kiwifruit packed in containers with cell compartments,

cardboard fillers, or molded trays for the 1999-2000 season.

Later in January, the kiwifruit industry held meetings in Northern

and Southern California to further study the minimum size issue.

Studies showed that while Size 45 fruit filled Size 45 cell cups well

during the 1998-1999 season, the fruit packed would not have met the

suspended minimum net weight requirement of 6.5 pounds because of the

cup size used in the Size 45 tray, and also because the shape and

density of fruit varies from year to year. A Size 45 tray of kiwifruit

weighing a minimum of 6.5 pounds is equivalent to a maximum of 55

pieces of fruit in an 8-pound sample. Based on these findings, the

Committee determined that the minimum net weight requirements for Size

45 should be studied further.

The Committee met on February 25, 1999, and unanimously recommended

the following changes and clarifications for the 1999-2000 season: (1)

Specify that the minimum size requirements be defined as a maximum of

55 pieces of fruit in an 8-pound sample and that the minimum size

requirements should apply to all kiwifruit regardless of pack style;

(2) require that individual consumer packages placed directly on a

pallet be stamped with the applicable inspection lot number; (3) make

minor changes to clarify pack and container marking requirements for

several containers; (4) continue the suspension of the minimum net

weight requirements for kiwifruit packed in containers with cell

compartments, cardboard fillers, or molded trays for the 1999-2000

season; and (5) continue the suspension of the requirement that fruit

must be reinspected if it has not been shipped by specified dates for

the 1999-2000 season. The Committee further recommended that all rule

and regulation changes begin as soon as possible to enable handlers to

make operational decisions in time for the 1999-2000 harvest and

shipping season.

Revisions for the 1999-2000 Season

Clarification of the Minimum Size Requirements

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

grown in California are required to be inspected and meet grade, size,

maturity, pack, and container requirements. Section 920.52 authorizes

the establishment of minimum size, pack, and container requirements.

Section 920.302(a)(2) of the order's rules and regulations outlines the

minimum size requirements for fresh shipments of California kiwifruit

and provides that such kiwifruit shall be at least a minimum Size 45.

Section 920.302(a)(4)(iii) specifies minimum net weight

requirements for fruit of various sizes packed in containers with cell

compartments, cardboard fillers, or molded trays.

Section 920.302(b)(2) of the order's rules and regulations defines

size designation to mean the same as defined in the table in paragraph

(a)(4)(iii) of this section.

As previously mentioned, the Committee unanimously recommended

suspending the minimum net weight requirements specified in

Sec. 920.302(a)(4)(iii) for the 1998-1999 season. This recommendation

was implemented through an interim final rule published September 3,

1998 (63 FR 46861).

In early November 1998, the Department determined that suspending

Sec. 920.302(a)(4)(iii) without redefining the size designation

definition in Sec. 920.302(b)(2) had inadvertently limited application

of the minimum size requirements to bulk bins, bags, consumer packs,

master containers, and volume fill containers.

The Committee members attended a meeting in November 1998 and again

in January 1999 wherein they clarified their initial intent, and set

preliminary recommendations for the 1999-2000 season.

The Committee met on February 25, 1999, unanimously recommended

that kiwifruit be at least a minimum Size 45, and that Size 45 be

defined in terms of weight and not pack requirements. Size 45 was

defined as a maximum of 55 pieces of fruit in an 8-pound sample. This

recommendation reflected the Committee's original intent to apply

uniform minimum size requirements to all kiwifruit regardless of pack

style. To further clarify its intent, the Committee recommended adding

the size definition to the size requirements in Sec. 920.302(a)(2),

deleting the size designation definition in Sec. 920.302(b)(2), and

defining Size 45 in terms of weight and not pack.

The Committee considered establishing a count of 58 or 59 pieces of

slightly smaller fruit for the Size 45 trays, but concluded that the

count should remain a maximum of 55 pieces of fruit per 8-pound sample

because the current minimum size continues to prevent shipments of low-

quality, undersized fruit, and because repacking problems during the

1998-1999 season resulted from an outdated cup size in the Size 45 tray

and not from the current minimum size.

Over the years, the size designation for Size 45 has changed, but

the tray inserts for this size fruit have not changed. In 1989, the

size designation for Size 45 was changed to 57 pieces of fruit per 8-

pound sample and remained there until 1994, when Size 45 became the

minimum size and was defined as 55 pieces of fruit per 8-pound sample.

Kiwifruit was not packed in Size 45 trays during the three seasons

preceding the 1998-1999 season as it was not

[[Page 41012]]

profitable for growers. A small amount of kiwifruit of this size was

packed during the 1998-1999 season. The Committee believes the molded

trays utilized during the 1998-1999 season were manufactured prior to

1994, that the cell cups of these molded trays were designed to fit

smaller fruit, and that the size of the cups contributed to the packing

problems associated with Size 45 trays during the 1998-1999 season.

Tray manufacturers attending Committee meetings in January and

February 1999 expressed interest in working with the industry in

developing molded tray inserts with slightly larger cell cups for Size

45 trays. These slightly larger cell cups allow slightly larger fruit

to be packed and thus enable the minimum size requirements to be met.

As a result, the Committee unanimously recommended that the minimum

size for all pack styles be established as a maximum of 55 pieces of

fruit in an 8-pound sample. These changes will not impact the kiwifruit

import regulation implemented under section 8e of the Act, because this

recommendation will only clarify that the minimum size requirements

apply to all shipments.

The Committee further recommended that all rules and regulation

changes begin as soon as possible to enable handlers to make

operational decisions in time for the 1999-2000 harvest and shipping

season.

Lot Stamp Requirement

Section 920.303 of the order's rules and regulations outlines

container marking requirements for fresh shipments of California

kiwifruit.

Section 920.303(d) requires all exposed or outside containers of

kiwifruit, but not less than 75 percent of the total containers on a

pallet, to be plainly marked with the lot stamp number corresponding to

the lot inspection conducted by an authorized inspector. Individual

consumer packages and containers that are being directly loaded into a

vehicle for export shipment under the supervision of the Federal or

Federal-State Inspection Service are not subject to these requirements.

Prior to the 1998-1999 season, handlers did not place individual

consumer packages directly on pallets for shipping. Individual consumer

packages were placed in master containers and the master containers

bore the container marking requirements.

During the 1998-1999 season, new individual consumer packages that

interlock and fit on a pallet were utilized. These individual consumer

packages are stacked six packages by six packages on a pallet resulting

in 36 individual consumer packages per layer. Pallets are normally

stacked 8-10 layers high. The Committee determined that this style of

container will not meet the current marking requirements of not less

than 75 percent of the total containers on a pallet being plainly

marked with the lot stamp number. Due to the size and configuration of

the interlocking individual consumer packages, approximately 57 percent

of the individual consumer packages will be marked if all exposed or

outside containers are marked with the lot stamp number.

Therefore, when the Committee met on February 25, 1999, they

unanimously recommended adding language to Sec. 920.303(d) to require

individual consumer packages placed directly on a pallet to have all

exposed containers plainly marked with the lot stamp number

corresponding to the lot inspection conducted by an authorized

inspector or that a total of four placards be applied to the pallet of

kiwifruit. The Committee believes that relaxing the requirement to have

all exposed or outside containers and at least 75 percent of the

containers on the pallet marked with the lot stamp number, will allow

handlers to ship individual consumer packages without incurring the

additional costs of marking containers that are not exposed, and

slowing down the packing line to mark the containers.

Changes To Clarify Pack and Container Marking Requirements

Section 920.303 of the order's rules and regulations outlines

container marking requirements for fresh shipments of California

kiwifruit.

Section 920.303(c)(3) establishes how the quantity shall be marked

on bulk bins and requires the quantity to be indicated in terms of the

size designation and net weight, or in terms of the size designation,

net weight, and count.

Section 920.303(c)(5) establishes how the quantity shall be marked

on individual consumer packages and requires that the quantity shall be

indicated in terms of either net weight or count (or both) for

individual consumer packages. It further requires that if count is

used, it must be accompanied by the size designation.

At the February 25, 1999, meeting, the Committee recommended the

following changes to pack requirements in Secs. 920.302(a)(4)(ii) and

(iv): (1) Change language in the first table of Sec. 920.302(a)(4)(ii)

as follows: Change ``Sizes'' to ``Count,'' change ``30 or larger'' to

``30 or less,'' and change ``39 or smaller'' to ``39 or more'; (2) add

language to Sec. 920.302(a)(4)(ii) to exclude individual consumer

packages from the list of containers that utilize the size variation

tolerance table for kiwifruit packed in containers with cell

compartments, cardboard fillers, or molded trays; (3) change language

in the second table of Sec. 920.302(a)(4)(ii) from ``Sizes'' to ``Size

Designation'; (4) change language in Sec. 920.302(a)(4)(ii) to add

individual consumer packages to the list of containers which specifies

size variation tolerances for kiwifruit packed in bags, volume fill, or

bulk containers; and (5) change language in Sec. 920.302(a)(4)(iv) by

adding ``individual consumer packages'' to the list of containers in

the table specifying the numerical size and maximum number of fruit per

8-pound sample; delete the word ``numerical'' when describing size; and

delete the words ``Column 1,'' ``Column 2,'' and ``Numerical Count''

from the size designation table in Sec. 920.302(a)(4)(iv) as they are

not necessary.

These changes will: (1) Reflect current industry practices; (2)

clarify that the size variation tolerances which are applied to fruit

packed in volume fill containers are also applied to individual

consumer packages; (3) clarify that the size designation chart is

utilized to determine the maximum number of fruit per 8-pound sample

for individual consumer packages; and (4) delete unnecessary language.

The Committee also recommended the following changes to container

requirements in Secs. 920.303(c)(3) and (5) as follows: (1) Change

language in Sec. 920.303(c)(3) by adding ``individual consumer packages

not within a master container'' to the list of containers in the size

designation table specifying the size and maximum number of fruit per

8-pound sample; (2) delete the word ``bins'' and replace it with

``containers'; (3) delete the words ``net weight'' as they are not

necessary; and (4) change language in Sec. 920.302(a)(5) by adding

``within a master container'' after individual consumer packages.

These changes will ensure that marking requirements are clearly

defined for individual consumer packages placed directly on a pallet as

well as those packed within a master container.

[[Page 41013]]

Continuation of 1998-1999 Season Suspended Actions for the 1999-

2000 Season

Continued Suspension of Minimum Net Weight Requirements for Trays

Section 920.302(a)(4) of the order's rules and regulations outlines

pack requirements for fresh shipments of California kiwifruit.

Section 920.302(a)(4)(iii) specifies minimum net weight

requirements for fruit of various sizes packed in containers with cell

compartments, cardboard fillers, or molded trays.

Prior to the 1989-1990 season, there were no minimum tray weight

requirements although 73.5 percent of the crop was packed in trays.

During the 1989-1990 season, minimum tray weights were mandated, as

there were many new packers involved in the kiwifruit packing process

and stricter regulations were viewed as necessary to provide uniform

container weights for each size. However, since that season the

proportion of the crop packed in trays has steadily declined.

During the 1997-1998 season, only 15.5 percent of the crop was

packed into molded trays and less than 1 percent of this fruit was

rejected for failure to meet minimum tray weights. As a consequence,

the Committee believed that minimum tray weight requirements might no

longer be necessary to maintain uniformity in the marketplace.

Prior to the 1998-1999 season handlers were required to meet the

minimum net weight requirements as shown in the following chart:

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

Minimum net

weight of

Count designation of fruit fruit

(Pounds)

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

34 or larger............................................. 7.5

35 to 37................................................. 7.25

38 to 40................................................. 6.875

41 to 43................................................. 6.75

44 and smaller........................................... 6.5

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

The Committee met on July 8, 1998, and unanimously recommended

suspension of the minimum net weight requirements for kiwifruit packed

in cell compartments, cardboard fillers, or molded trays for the 1998-

1999 season. Section 920.302(a)(4)(iii) was suspended for the 1998-1999

season by an interim final rule published September 3, 1998 (63 FR

14861).

As previously mentioned, both small and large handlers were able to

reduce packing costs and to compete more effectively in the market

during the 1998-1999 season because of the relaxation in packing

requirements. The industry continued to pack well filled trays without

having to spend the extra time weighing them. There was no reduction in

the uniform appearance of fruit packed into trays.

Therefore, when the Committee met on January 13, 1999, to consider

its preliminary recommendations for the season, it concluded that

minimum net weight requirements for trays should continue to be

suspended for the 1999-2000 season.

The Committee met on February 25, 1999, and unanimously recommended

continuing the suspension of Sec. 920.302(a)(4)(iii) for the 1999-2000

season. The 1999-2000 season ends July 31, 2000. The Committee plans to

further evaluate the benefits during the 1999-2000 season.

Continued Suspension of Reinspection Requirement

Section 920.55 of the order requires that prior to handling any

variety of California kiwifruit, such kiwifruit shall be inspected by

the Federal or Federal-State Inspection Service (inspection service)

and certified as meeting the applicable grade, size, quality, or

maturity requirements in effect pursuant to Sec. 920.52 or Sec. 920.53.

Section 920.55(b) provides authority for the establishment, through

the order's rules and regulations, of a period prior to shipment during

which inspections must be performed.

Prior to its suspension for the 1998-1999 season, Sec. 920.155 of

the order's rules and regulations specified that the certification of

grade, size, quality, and maturity of kiwifruit pursuant to Sec. 920.52

or Sec. 920.53 during each fiscal year is valid until December 31 of

such year or 21 days from the date of inspection, whichever is later.

Any inspected kiwifruit to be shipped after the certification period

lapses was required to be reinspected and recertified before shipment.

Section 920.155 was suspended for the 1998-1999 season by a final

rule published August 1, 1998 (63 FR 41390). The Committee recommended

this suspension to lessen the expenses upon the many kiwifruit growers

who had either lost money or merely recovered their production costs in

recent years. It concluded that the cost of reinspecting kiwifruit was

too high to justify requiring it in view of the limited benefit

reinspection provides. The Committee also believed it was no longer

necessary to have fruit reinspected to provide consumers with a high

quality product because storage and handling operations had improved in

the industry.

During the 1998-1999 season, handlers voluntarily checked stored

fruit prior to shipment to ensure that the condition of the fruit had

not deteriorated. This enabled handlers to ship quality kiwifruit

during the 1998-1999 season without the necessity for reinspection and

recertification and the costs associated with such requirements. The

Committee had estimated that handlers would save $50,000 by conducting

their own reinspection during the 1998-1999 season.

At the February 25, 1999, meeting, the Committee unanimously

recommended suspending Sec. 920.155 for the 1999-2000 season. The

Committee still believes that handlers saved $50,000 by conducting

their own reinspection during the 1998-1999 season even though the

marketed crop was less than projected, more fruit was in-line inspected

than projected, and shipments had started later during the 1998-1999

season than anticipated.

Although freezing temperatures and winds during the spring have

reduced the size of the 1999-2000 crop, the Committee believes the

industry will continue to benefit from conducting its own reinspection.

The Committee plans to evaluate this suspension one more season

before making a decision to permanently remove this requirement from

the rules and regulations. Thus, the Committee unanimously recommended

suspending Sec. 920.155 for the 1999-2000 season. The 1999-2000 season

ends July 31, 2000.

Maintaining Current Regulatory Changes

Maintaining the Current Size Variation Tolerance for Size 42 Kiwifruit

Section 920.302(a)(4) of the order's rules and regulations outlines

pack requirements for fresh shipments of California kiwifruit.

Section 920.302(a)(4)(ii) specifies size variation ranges in terms

of fruit diameter for each size of kiwifruit and size variation

tolerances.

Section 920.302(a)(4)(ii) was revised by an interim final rule

published September 3, 1998 (63 FR 46861) to include a provision to

increase the size variation tolerance for Size 42 kiwifruit from 10

percent, by count, to 25 percent, by count.

During the 1998-1999 season a significantly smaller amount of

kiwifruit was packed into the 40 series sizes than anticipated. Only 7

percent of the fruit was packed into Size 42 containers, and only 15.3

percent was packed into Size 42 and 45 containers. This is

significantly less than the previous two years when 35 percent of the

fruit was packed into the 40 series sizes.

[[Page 41014]]

In addition, size variation was not a problem for Size 42 fruit

during the 1998-1999 season, as the majority of the fruit was round and

short and not a mixture of round and flat fruit. A typical crop has a

mixture of round and flat fruit. A mixture of round and flat fruit is

difficult to pack and slows down the packing line.

The Committee believes that maintaining the increased size

variation tolerance for Size 42 kiwifruit for the 1999-2000 season will

continue to benefit the industry by easing the packing burden and

reducing costs, while maintaining uniform looking boxes of fruit

desired by customers.

Maintaining the Current Maximum Number of Fruit per 8-Pound Sample for

Kiwifruit Packed in Bags, Volume Fill, or Bulk Containers

Section 920.302(a)(4) of the order's rules and regulations outlines

pack requirements for fresh shipments of California kiwifruit.

Section 920.302(a)(4)(iv) establishes a maximum number of fruit per

8-pound sample for each numerical count size designation for fruit

packed in bags, volume fill, or bulk containers.

Section 920.302(a)(4)(iv) was revised by an interim final rule

published September 3, 1998 (63 FR 46861) to include a provision that

increased the maximum number of fruit per 8-pound sample for Sizes 42

through 30. Size 42 fruit is smaller than Size 30 fruit. The size

designation chart below depicts these changes:

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

Maximum

number of

Size designation fruit per 8

pound

sample

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

21......................................................... 22

25......................................................... 27

27/28...................................................... 30

30......................................................... 33

33......................................................... 36

36......................................................... 42

39......................................................... 48

42......................................................... 53

45......................................................... 55

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

Currently, under the rules and regulations, kiwifruit packed in

bags, volume fill, or bulk containers, must not exceed the maximum

number of fruit per an 8-pound sample for each size designation.

Under the current regulations, handlers are better able to meet the

needs of buyers, because kiwifruit sells by the piece, and buyers

desire as much fruit in each container as the container can comfortably

hold. California handlers are applying weight standards that are

similar to those used by importers, thereby lessening confusion in the

marketplace and facilitating the marketing of California kiwifruit.

Initial Regulatory Flexibility Analysis

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 the 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 60 handlers of California kiwifruit subject

to regulation under the marketing order and approximately 450 producers

in the production area. Small agricultural producers are defined by the

Small Business Administration (13 CFR 121.601) as those whose annual

receipts are less than $500,000, and small agricultural service firms

are defined as those whose annual receipts are less than $5,000,000.

One of the 60 handlers subject to regulation has annual kiwifruit

receipts of at least $5,000,000. This figure excludes receipts from any

other sources. The remaining 59 handlers have annual receipts less than

$5,000,000, excluding receipts from other sources. In addition, 10 of

the 450 producers subject to regulation have annual sales of at least

$500,000, excluding receipts from any other sources. The remaining 440

producers have annual sales less than $500,000, excluding receipts from

any other sources. Therefore, a majority of the kiwifruit handlers and

producers may be classified as small entities.

This final rule changes minimum size, pack, container, and

inspection requirements prescribed under the California kiwifruit

marketing order. The marketing order regulates the handling of

kiwifruit grown in California and is administered locally by the

Committee.

This rule specifies the minimum size requirements for all kiwifruit

as a maximum of 55 pieces of fruit in an 8-pound sample regardless of

pack style; requires that individual consumer packages placed directly

on a pallet be stamped with the applicable inspection lot number; and

makes minor changes to clarify pack and container marking requirements

for several containers.

In addition, this rule continues, for the 1999-2000 season, the

suspension of the minimum net weight requirements in Sec. 920.302

(a)(4)(iii) for kiwifruit packed in containers with cell compartments,

cardboard fillers, or molded trays scheduled to expire at the end of

the 1998-1999 season. This suspension action was implemented by an

interim final rule published last September (63 FR 46861; September 3,

1998). A final rule published last August suspended, for the 1998-1999

season, the requirement in Sec. 920.155 that fruit must be reinspected

if it has not been shipped by specified dates (63 FR 41390; August 4,

1998). This rule also continues the suspension of this requirement for

the 1999-2000 season.

These changes were unanimously recommended by the Committee.

Clarification of the minimum size and changes to the pack and container

requirements are expected to reduce handler packing costs, increase

producer returns, and enable handlers to compete more effectively in

the marketplace.

The interim final rule published last September also increased the

size variation tolerance for Size 42 kiwifruit and the maximum number

of fruit for the 8-pound sample for the 1998-1999 and future seasons.

No changes are being made to these provisions by this action.

In early November 1998, the Department determined that suspending

the minimum net weight requirements as specified in

Sec. 920.302(a)(4)(iii) without redefining the size designation

definition in Sec. 920.302(b)(2) had inadvertently limited application

of the minimum size requirements to volume fill packs.

The Committee met on November 19, 1998, and clarified that the

intent of its July 8, 1998, recommendation had been to maintain the

minimum size requirement on all kiwifruit regardless of pack style. The

Committee discussed changing the regulatory language so that minimum

size applied to all pack styles for the remainder of the 1998-1999

season, but concluded that it would be unfair to growers and handlers

to change this requirement in mid-season. The Committee believed that

orderly marketing would continue as harvest was nearly completed at the

time of the November 1998 meeting and because a small amount of minimum

size kiwifruit had been packed in trays.

The Committee met again on January 13, 1999, to discuss industry

issues and to make preliminary recommendations for the 1999-2000

season. The

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Committee concluded that the recommended changes made for the season

had benefitted the industry. Both small and large handlers were able to

reduce packing costs and compete more effectively in the marketplace in

the 1998-1999 season because of the relaxations made to the

requirements.