Almonds Grown in California; Outgoing Quality Control Requirements and Request for Approval of New Information Collection, 70683-70692 [06-9543]
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70683
Proposed Rules
Federal Register
Vol. 71, No. 234
Wednesday, December 6, 2006
This section of the FEDERAL REGISTER
contains notices to the public of the proposed
issuance of rules and regulations. The
purpose of these notices is to give interested
persons an opportunity to participate in the
rule making prior to the adoption of the final
rules.
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 981
[Docket No. FV06–981–1 PR]
Almonds Grown in California;
Outgoing Quality Control
Requirements and Request for
Approval of New Information
Collection
Agricultural Marketing Service,
USDA.
ACTION: Proposed rule.
PWALKER on PRODPC60 with PROPOSALS
AGENCY:
SUMMARY: This proposed rule invites
comments on adding outgoing quality
control requirements under the
administrative rules and regulations of
the California almond marketing order
(order). The order regulates the handling
of almonds grown in California and is
administered locally by the Almond
Board of California (Board). This
proposed rule provides for a mandatory
program under the order to reduce the
potential for Salmonella bacteria in
almonds. This action would help ensure
that quality almonds are available for
human consumption. This proposal also
announces the Agricultural Marketing
Service’s (AMS) intention to request
approval of a new information
collection issued under the order.
DATES: Comments must be received by
January 22, 2007. Pursuant to the
Paperwork Reduction Act, comments on
information collection burden that
would result from this proposal must be
received by February 5, 2007.
ADDRESSES: Interested persons are
invited to submit written comments
concerning this rule. Comments must be
sent to the Docket Clerk, Marketing
Order Administration Branch, Fruit and
Vegetable Programs, AMS, USDA, 1400
Independence Avenue, SW., STOP
0237, Washington, DC 20250–0237; Fax:
(202) 720–8938, E-mail:
moab.docketclerk@usda.gov. or Internet:
https://www.regulations.gov. All
comments should reference the docket
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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, or can be viewed
at: https://www.ams.usda.gov/fv/
moab.html.
FOR FURTHER INFORMATION CONTACT:
Maureen T. Pello, Assistant Regional
Manager, or Kurt J. Kimmel, Regional
Manager, California Marketing Field
Office, Marketing Order Administration
Branch, Fruit and Vegetable Programs,
AMS, USDA, Telephone: (559) 487–
5901, Fax: (559) 487–5906, or E-mail:
Maureen.Pello@usda.gov. or
Kurt.Kimmel@usda.gov.
Small businesses may request
information on complying with this
regulation by contacting Jay Guerber,
Marketing Order Administration
Branch, Fruit and Vegetable Programs,
AMS, USDA, 1400 Independence
Avenue, SW., STOP 0237, Washington,
DC 20250–0237; Telephone: (202) 720–
2491, Fax: (202) 720–8938, or E-mail:
Jay.Guerber@usda.gov.
SUPPLEMENTARY INFORMATION: This
proposed rule is issued under Marketing
Order No. 981, as amended (7 CFR part
981), regulating the handling of almonds
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
(USDA) 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 USDA 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. Such
handler is afforded the opportunity for
a hearing on the petition. After the
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hearing USDA 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 USDA’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 proposed rule invites comments
on adding outgoing quality control
requirements under the administrative
rules and regulations of the order. This
rule provides for a mandatory program
to reduce the potential for Salmonella
bacteria in almonds. This action would
help ensure that quality almonds are
available for human consumption. This
action was unanimously recommended
by the Board at a meeting on August 22,
2006. This proposal also announces
AMS’s intention to request approval of
a new information collection issued
under the order.
Section 981.42(b) of the order
provides authority for the Board to
establish, with approval of the
Secretary, such minimum quality and
inspection requirements applicable to
almonds to be handled or to be
processed into manufactured product,
as will contribute to orderly marketing
or be in the public interest. In such crop
year, no handler shall handle or process
almonds into manufactured items or
products unless they meet the
applicable requirements as evidenced
by certification acceptable to the Board.
The Board, with approval of the
Secretary, may establish rules and
regulations necessary and incidental to
the administration of this provision.
Salmonella Outbreaks Linked to
Almonds
In 2001, a Salmonella outbreak was
identified in Canada, which was linked
to a specific retailer, traced back to raw
almonds sold in bulk bins, and
ultimately traced back to the handler
and the grower. The Salmonella strain
was extremely unusual and had not
previously been associated with
contamination in a non-animal product.
Three orchards where the almonds were
produced were identified, and samples
gathered from the orchards contained
Salmonella. With oversight by the
California Department of Health
Services (CDHS), procedures were
implemented by the grower, huller/
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sheller, and handler to specify how the
almonds from those orchards were to be
processed using a treatment to reduce
the potential for Salmonella before the
almonds were moved into commercial
channels. The Board initiated an
extensive research program to help
understand the occurrence of
Salmonella in almond orchards.
The Board also initiated an education
program for the industry regarding Good
Agricultural Practices (GAP’s), Good
Manufacturing Practices (GMP’s), and
Sanitation Standard Operating
Procedures (SSOP’s). GAP’s provide
guidelines to growers on how to
minimize potential biological hazards
during the production and harvesting of
almonds. GMP’s define procedures to be
used by handlers to allow almonds to be
processed, packed, and sold under
sanitary conditions. SSOP’s help to
ensure a clean and sanitary environment
in the packing facility. Together, these
practices and procedures provide a
framework for a Hazard Analysis
Critical Control Point (HACCP) program
for the industry to proactively eliminate
or minimize potential sources of
Salmonella contamination.
In the spring of 2004, a second
Salmonella outbreak occurred in Oregon
that was linked to raw almonds
purchased at a particular retailer. The
Salmonella strain was very similar to
that identified in 2001. One handler had
been the supplier to the retailer, and the
handler initiated a voluntary recall of 5
million pounds of almonds sold in the
U.S. The Food and Drug Administration
(FDA) subsequently announced that the
almonds had been exported to eight
countries. The handler then initiated a
full recall of the 6 suspect almonds
produced, packed, and shipped,
increasing the recall to approximately
15 million pounds.
In the summer of 2004, the Board
unanimously approved a voluntary
action plan that called for treating all
almonds to reduce the potential for
Salmonella. Handlers were encouraged
to treat the almonds prior to shipment,
or ship the almonds to a manufacturer
who agreed to treat the almonds. The
Board continued to fund research on
various technologies that could be used
to help reduce the potential for
Salmonella in almonds.
Board Recommendation for a
Mandatory Treatment Program
To further its efforts in providing a
high quality product to consumers, in
August 2006, the Board recommended
that a mandatory treatment program be
implemented under the order, pursuant
to authority provided in § 981.42(b).
Specifically, handlers would have to
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subject their almonds to a process that
achieves a minimum 4-log reduction in
Salmonella bacteria prior to shipment.
The program would provide for an
exemption for handlers who ship
untreated almonds under a direct
verifiable (DV) program to
manufacturers within the U.S., Canada,
or Mexico who agree to treat the
almonds accordingly. The program
would also provide for an exemption for
handlers who ship untreated almonds to
locations outside of the U.S., Canada, or
Mexico. All containers of untreated
almonds shipped under the two
exemptions would have to be
prominently identified with the term
‘‘unpasteurized.’’ The program would
become effective for the 2007–08 crop
year which begins on August 1, 2007.
Specific Parameters of Proposed
Mandatory Program
Under the Board’s proposal, handlers
would have to subject their almonds to
a treatment process or processes that
achieve in total a minimum 4-log
reduction of Salmonella bacteria, or
ship their almonds under one of the two
exemptions cited above. The proposal
would only affect those who meet the
definition of ‘‘handler’’ in § 981.13 of
the order (thus exempting growers
selling through roadside stands). Log
reduction describes how much bacterial
contamination is reduced by a treatment
process. A 4-log reduction decreases
bacteria by a factor of 10,000 (4 zeros).
One treatment process that
independently achieved a minimum 4log reduction could be used, or a
combination of different treatments
could be used that collectively achieve
a minimum 4-log reduction (‘‘hurdle’’
technologies).
The Board initially supported a 5-log
reduction, which is FDA’s performance
standard. However, the Board
subsequently funded research with the
University of California, Davis, in
conjunction with Rutgers University,
whereby a risk assessment model was
developed using data from the two
Salmonella outbreaks, as well as data
from an industry pathogen survey.1 The
risk assessment model demonstrated
that a minimum 4-log reduction could
provide an appropriate level of
consumer protection. Thus, the Board
concluded that a 4-log reduction was an
appropriate standard for almonds.
Treatment Processes
Acceptable treatment processes for
handlers would have to utilize
technologies that have been determined
1 Journal of Food Protection, Vol. 69, No. 7, 2006,
Pages 1594–1599.
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to achieve a minimum 4-log reduction
of Salmonella bacteria in almonds,
pursuant to a letter of determination
issued by the FDA, or acceptance by a
scientific review panel as identified by
the Board (known as the Technical
Expert Review Panel, or TERP).
The FDA reviews studies utilizing
specific protocols and treatment
parameters, and issues a letter of
determination when it determines that a
process has sufficiently demonstrated
its effectiveness to achieve a 5-log
reduction of Salmonella in almonds. To
date, FDA has issued letters of
determination for propylene oxide
(PPO), oil roasting, blanching, and for a
moist heat process.
The TERP would evaluate various
treatment technologies against specific
criteria, based on recommendations
provided by the National Advisory
Committee on Microbiological Criteria
in Food (NACMCF). The NACMCF was
formed in 1988 under Departmental
Regulation 1043–28, and provides
impartial, scientific advice to Federal
food safety agencies for use in the
development of an integrated national
food safety systems approach from farm
to final consumption to assure the safety
of domestic, imported, and exported
foods. It is co-sponsored by USDA’s
Food Safety and Inspection Service, the
FDA, the Center for Disease Control and
Prevention, the National Marine
Fisheries Service, and the Department of
Defense Veterinary Service Activity.
While the TERP would not
‘‘recommend’’ or ‘‘approve’’
technologies, its review would ensure
that technologies utilized by the
industry have been evaluated against
specific science-based criteria
demonstrating the technology’s ability
to deliver a lethal treatment for
Salmonella in almonds. Documentation
and data would be provided to the TERP
(by a company pursuing TERP
acceptance for its technology) for review
to ensure that the proposed technologies
are consistently achieving the minimum
4-log reduction.
The TERP, initially formed by the
Board in the fall of 2004 to review
treatment technologies, consists of four
scientists, with a representative from the
FDA serving as an ex-officio member.
The TERP has been evaluating various
technologies and treatments for the
almond industry, and to date, the TERP
has accepted steam and moist heat
treatments as acceptable for achieving
the Board’s Salmonella reduction goals.
Membership on the TERP would be
approved annually by the Board prior to
the beginning of each crop year, or more
frequently if needed during the crop
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Compliance and Verification Program
year, for example, to fill a vacancy on
the panel.
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On-Site Versus Off-Site Treatment
Under the Board’s proposal, unless
handlers shipped their almonds to a
Board-approved DV user (described
later in this document), or shipped their
almonds to locations outside of the U.S.,
Canada, or Mexico, handlers would
have to subject their almonds to a
treatment process or processes prior to
shipment either at their handling
facility (on-site), or at an off-site
treatment facility located within the
production area (California). An off-site
facility may or may not be affiliated
with another handler. Transportation of
almonds by a handler to an off-site
treatment facility would not be
considered a shipment.
Validation by Process Authorities
Handlers could only use, or transport
their almonds to off-site treatment
facilities that use treatment processes
that have been ‘‘validated’’ by a Boardapproved process authority. Validation
means that the treatment technology
and equipment utilized have been
demonstrated to achieve the minimum
4-log reduction. The use of process
authorities is modeled after process
authorities as cited in the ‘‘Guide to
Inspections of Low Acid Canned Food
Manufacturers’’ (Guide) (https://
www.fda.gov). Treatment technology
and equipment that have been modified
to the point where operating parameters
such as time, temperature, or volume,
change must be revalidated.
For purposes of this document, a
process authority is a person or an
organization that has expert knowledge
of appropriate processes for the
treatment of almonds as described
above, and meets other criteria as
specified by the Board. Such criteria
would include, but not be limited to, the
following: (1) Knowledge about the
equipment used for the treatment
process; (2) experience in conducting
appropriate studies to determine the
ability of the equipment to deliver the
appropriate treatment (such as heat
penetration or heat distribution studies);
and (3) the ability to determine that
sufficient data has been gathered to
identify the critical factors needed to
ensure the quality of the final product.
On an annual basis, process authorities
would have to submit an application to
the Board on ABC Form No. 51,
‘‘Application for Process Authority for
Almonds,’’ and be approved by the
Board’s TERP. Should the applicant
disagree with the TERP’s decision, it
could appeal the decision in writing to
the Board, and ultimately to USDA.
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Treatment Plans
To ensure compliance with the
mandatory program, handlers would be
subject to verification by the Federal or
Federal-State Inspection Service
(inspection agency). Handlers could use
either an on-site (traditional) or an
audit-based verification program. Each
handler would decide which
verification program would be the most
cost-effective for his or her operation.
All handlers would be required to
submit a treatment plan to the Board for
the upcoming crop year by May 31. The
crop year runs from August 1 through
July 31 of the subsequent year.
However, for the 2007–08 crop year,
which would be the first year that the
mandatory program was in effect,
handlers would have to submit their
treatment plans by May 1, 2007. The
plan would be reviewed by the Board in
conjunction with the inspection agency
to ensure such plans were complete and
auditable. The plan would be approved
by the Board and must address specific
parameters for the handler to ship
almonds. Such parameters would
include, but not be limited to, the
following: (1) The location of treatment
plant; (2) the name and address of offsite treatment facility (custom
processor), if appropriate; (3) a
statement regarding whether treatment
processes have been accepted by the
TERP and/or ‘‘determined’’ by the FDA;
(4) a statement regarding validation of
treatment technology and equipment by
a Board-approved process authority; (5)
a statement whether untreated almonds
would be exported; (6) a statement
whether the handler would use the DV
program; (7) a description or flow chart
explaining how raw, untreated almonds
enter and flow through the handler
facility, and how the product would
flow through the treatment process,
including post treatment, packing, and/
or storage; (8) a list of all treatments that
would be used on the almonds
(including, for example, number of
blanching lines, etc.); (9) a description
of how treated product would be
differentiated and segregated from
untreated product to ensure
maintenance of treated product
integrity; (10) a list of procedures
regarding how interhandler transfers
would be tracked; and (11) an
explanation by handlers using a
combination of processes to achieve a
minimum 4-log reduction, that the
processes occur in an appropriate
sequence in sufficiently close proximity
to ensure that the integrity of the treated
product is maintained between
processes.
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Almonds sent by a handler for
treatment to an off-site facility affiliated
with another handler would be subject
to the approved treatment plan utilized
at that off-site facility. Handlers would
have to follow their own approved
treatment plans for almonds sent to an
off-site facility that is not affiliated with
another handler.
On-Site Verification Program
Under an on-site verification program,
handlers would cause the inspection
agency to verify that their almonds had
been subjected to an acceptable
treatment process that had been
validated by a Board-approved process
authority. Such handlers would have to
submit, or cause to be submitted, a
verification report to the Board. The
inspection agency would have to
physically observe the treatment process
to issue such a report. It would be the
handler’s responsibility to arrange for
inspection agency verification. An onsite program would be comparable to a
traditional in-line or lot inspection
program.
Audit-Based Verification Program
Under an audit-based verification
program, handlers would be subject to
periodic audits conducted by the
inspection agency. The inspection
agency would verify that handlers were
following their approved treatment
plans. Audit frequency would be tied to
handler performance. Handlers would
be provided with written audit reports
specifying deficiencies. Handlers who
do not comply with an audit-based
verification program would be required
to revert to an on-site verification
program. Audit reports would be
provided to the Board to facilitate
program compliance.
Interhandler Transfers
Interhandler transfers of almonds may
or may not be treated prior to transfer.
Handlers receiving untreated almonds
from another handler would be
responsible for treating the product.
Handlers receiving treated almonds
from another handler would need to
have procedures outlined in their
treatment plan addressing how the
integrity of the treated almonds would
be maintained. In all instances
involving interhandler transfers, it
would be the responsibility of the
receiving handler to ensure that the
almonds are treated prior to shipment
and to maintain documentation to that
effect.
Handler Records
Handlers would be required to
maintain records and documentation
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that would be subject to audit by the
inspection agency and the Board for the
purpose of verifying compliance with
the regulation. Consistent with § 981.70
of the order regarding handler records
and verification, records would have to
be maintained for 2 full years following
the end of a crop year. Such records
would identify lots from the point of
treatment forward to the point of
shipment by the handler. Lot
identification would also provide the
ability to differentiate treated from
untreated product.
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Exemptions
Direct Verifiable Program
Handlers could ship untreated
almonds directly to Board-approved
manufacturers within the U.S., Canada,
or Mexico for further processing under
the Direct Verifiable or DV program. The
Board would issue a DV user code to an
approved manufacturer. Handlers
would have to reference this code on all
documentation accompanying the lot.
This would help the Board track DV
shipments and facilitate compliance
with the program. Handlers would also
have to identify each container of such
almonds with the term ‘‘unpasteurized.’’
Container means a box, bin, bag, carton,
or any other type of receptacle used in
the packaging or handling of bulk
almonds. The lettering must be on one
outside principal display panel, at least
1⁄2 inch in height, clear and legible. If a
third party is involved in the
transaction, the handler must provide
sufficient documentation to the Board to
track the shipment from the handler’s
facility to the approved DV user.
Manufacturers wanting to participate
in the DV program would have to
submit an application annually to the
Board on ABC Form No. 52,
‘‘Application for Direct Verifiable (DV)
Program for Further Processing of
Untreated Almonds,’’ and be approved
by the Board’s TERP. Should the
applicant disagree with the TERP’s
decision, it could appeal the decision in
writing to the Board, and ultimately to
USDA.
Similar to handlers, manufacturers
would have to subject the almonds to a
treatment process or processes using
technologies that achieve in total a
minimum 4-log reduction of Salmonella
bacteria as determined by the FDA or
accepted by the TERP. Additionally,
manufacturers could use treatment
processes that have been ‘‘established’’
by a Board-approved process authority.
‘‘Established’’ means that that the
process authority would evaluate
treatment processes and protocols to
ensure the technology’s ability to
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deliver a lethal treatment for Salmonella
in almonds and achieve a minimum 4log reduction. The Board recommended
this option to address manufacturers’
concern regarding the process to seek
TERP acceptance of their treatments,
which could involve providing data on
their proprietary processes to the TERP
(i.e., specific time and temperature data
for special equipment).
Manufacturers must also do the
following: (1) Identify the
manufacturing locations where
treatment would occur; (2) have their
treatment technology and equipment
validated by a Board-approved process
authority. Treatment technology and
equipment that have been modified to
the point where operating parameters
such as time, temperature, or volume,
change must be revalidated; (3)
maintain all records regarding
validation and verification of treatment
methods, processing, and product
traceability for 2 years, and make such
records available for review by the
Board; and (4) ship untreated almonds
(due, for example, to a manufacturer
overbuying) to a handler, to another
approved DV user, to locations outside
the U.S., Canada, or Mexico (containers
must remain identified with the term
unpasteurized), or dispose of such
almonds in non-edible channels.
Further, DV users would be audited
by a Board-approved auditor within 1–
2 months after the start of treatments,
and at least once every 12 months
thereafter. Such audits would determine
if: (1) The DV user utilized appropriate
treatment processes; (2) the DV user has
a letter issued by a Board-approved
process authority that validated that the
treatment achieves a 4-log reduction of
Salmonella; (3) personnel and
procedures used at the facility ensure
that treatment parameters were
followed; and (4) records are retained
for two years that document the
treatment of almonds, or that any
untreated almonds were properly
disposed of as outlined above. A
summary audit report of the DV user
would be sent to the Board within 10
days of the audit. On an annual basis,
DV user auditors would have to submit
an application to the Board on ABC
Form No. 53, ‘‘Application for Direct
Verifiable (DV) Program Auditors,’’ and
be approved by the Board’s TERP.
Should the applicant disagree with the
TERP’s decision, it could appeal the
decision in writing to the Board, and
ultimately to USDA.
The Board recommended including
Mexico and Canada as part of the DV
program for compliance purposes. The
Board was concerned that handlers
could circumvent the regulation by
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shipping untreated almonds to Mexico
or Canada, then, bring them back into
the U.S. and sell them in normal market
channels.
Shipments Outside of the U.S., Canada,
or Mexico
Handlers could also ship untreated
almonds directly to locations outside
the U.S., Canada, or Mexico, provided
that each container of such almonds is
prominently identified with the term
unpasteurized. The lettering must be on
one outside principal display panel, at
least 1⁄2 inch in height, clear and legible.
Again, if a third party is involved in the
transaction, the handler must provide
sufficient documentation to the Board to
track the shipment from the handler’s
facility to the importer in the foreign
country.
Accordingly, a new paragraph (b)
regarding outgoing quality control and a
mandatory program to reduce the
potential for Salmonella bacteria
contamination in almonds is proposed
to be added to § 981.442 of the order’s
administrative rules and regulations.
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 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 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 6,000
producers of almonds in the production
area and approximately 115 handlers
subject to regulation under the
marketing order. Additionally, the
Board estimates there would be about 25
process authorities, 53 almond
manufacturers, and 50 DV program
auditors impacted by this rule. Small
agricultural producers are defined by
the Small Business Administration (13
CFR 121.201) as those having annual
receipts of less than $750,000, and small
agricultural service firms are defined as
those whose annual receipts are less
than $6,500,000.
Data for the most recently completed
crop year indicate that about 52 percent
of the handlers shipped under
$6,500,000 worth of almonds. Dividing
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average almond crop value for 2003–
2005 reported by the National
Agricultural Statistics Service (NASS)
($2.043 billion) by the number of
producers (6,000) yields an average
annual producer revenue estimate of
about $340,000. Based on the foregoing,
about half of the handlers and a majority
of almond producers may be classified
as small entities. While data regarding
the size of the process authorities is not
available, it may be assumed that some
process authorities, almond
manufacturers, and DV program
auditors may be classified as small
entities.
The almond industry’s 6,000 growers
produce approximately 1 billion pounds
annually (kernel weight basis). Industry
members expect production to increase
by 50 percent in the next 3–5 years, due
to a significant amount of newly planted
acreage that will come into production.
Although the Board currently projects
that there are about 115 handlers,
handler number estimates can vary over
time. Recent surveys have yielded
estimates ranging from 112 (see Table 1)
to 117 (see Table 2). Handlers ultimately
market their almonds to customers in
the U.S. and abroad. As shown in Table
1, the Board estimates that about 27 of
112 handlers handle more than 10
million pounds each, and cumulatively
handle 82 percent of the crop.
TABLE 1.—NUMBER OF HANDLERS CATEGORIZED BY SIZE
Less than 1
million lbs.
No. of handlers ................................................................................................................
Percent of crop handled ..................................................................................................
According to data provided by the
Board, about 30 percent of California
almonds are sold domestically (about
300 million pounds). An estimated 20
percent of the domestic shipments are
in the form of manufactured product—
blanched, sliced, diced, or otherwise
further processed using thermal
treatments. About 70 percent of
Between 1
and 5
million lbs.
41
1
Between 5
and 10
million lbs.
28
6
16
11
More than
10 million
lbs.
27
82
shipments as shown in Table 2 below.
Table 2 shows that 16 handlers are
responsible for 90 percent of domestic
shipments. Many of the same handlers
are among the 38 that are responsible for
90 percent of exports. About 79 of an
estimated 117 handlers are responsible
for the remaining 10 percent of export
shipments.
California almond production is
exported to more than 80 countries
worldwide. Mexico and Canada account
for approximately 5 percent of export
shipments. The quantities shipped by
companies handling almonds vary
considerably. However, a limited
number of handlers are responsible for
the majority of domestic and export
TABLE 2.—HANDLER SHIPMENT SUMMARY
Domestic (U.S.)
300,000,000
pounds
PWALKER on PRODPC60 with PROPOSALS
No. of handlers responsible for 50 percent of shipments .......................
No. of handlers responsible for 80 percent of shipments .......................
No. of handlers responsible for 90 percent of shipments .......................
This rule would add a new paragraph
(b) for outgoing quality control under
§ 981.442 of the order’s administrative
rules and regulations, whereby a
mandatory program to reduce the
potential for Salmonella bacteria in
almonds would be implemented under
the order. Specifically, handlers would
have to subject their almonds to a
treatment process that achieves a
minimum 4-log reduction in Salmonella
bacteria prior to shipment. The program
would exempt handlers who ship
untreated almonds under a direct
verifiable (DV) program to
manufacturers within the U.S., Canada,
or Mexico who agree to treat the
almonds accordingly. The program
would also exempt handlers who ship
untreated almonds to locations outside
of the U.S., Canada, or Mexico. All
containers of untreated almonds
shipped under the exemptions would
have to be prominently identified with
the term ‘‘unpasteurized.’’ The program
would take effect for the 2007–08 crop
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16:05 Dec 05, 2006
Jkt 211001
3
12
16
year which 25 begins on August 1, 2007.
Authority for the program is provided in
§ 981.42(b) of the order.
According to the Board, the costs to
individual handlers to comply with the
program would vary considerably
depending on their markets and
treatment method(s) chosen. Handlers
could: (1) Install new equipment in their
processing lines to treat the almonds
prior to shipment into commercial
channels; (2) outsource to another
handler or an off-site facility within
California for treatment; (3) transfer
their untreated product to another
handler who would treat the almonds
prior to shipment; (4) ship their
untreated almonds to Board-approved
DV users or to locations outside of the
U.S., Canada, or Mexico; or (5) use a
combination of these approaches.
In a handler survey conducted by the
Board in March 2005 (to which 116
handlers handling almonds at that time
responded), 86 handlers (74 percent)
have their own facilities and/or
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Fmt 4702
Export to Canada and
Mexico 37,600,000
pounds
Sfmt 4702
4
16
26
All export (includes
Canada and Mexico)
700,000,000 pounds
9
26
38
equipment to process almonds; the
remainder have almonds processed on
their behalf. Of those handlers with
their own facilities and/or equipment,
66 (77 percent of 86) indicated they
planned to install equipment to treat
almonds while the remaining 20
indicated they would outsource to a
third party, or custom processor. Again,
the overall economic impact of the
program would vary based on the
approach selected. Smaller handlers
may choose to defer purchasing
equipment and send their almonds to an
off-site facility for treatment until more
cost effective technologies are available.
Costs would also vary by treatment
method. Some handlers may choose to
install PPO chambers at their facilities.
Handler sources estimate that typical
installation costs for a PPO chamber
range from $500,000 to $1,250,000. As
with other technologies, overall cost
would depend upon how much
infrastructure is in place in the
processing facility as well as the desired
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capacity of the chambers. Actual
treatment cost for handlers treating their
own product is approximately $0.03 per
pound, varying with volume and
efficiencies. PPO treatment is currently
available in the industry on a contract
basis at $0.04–$0.05 per pound
(including transportation to the facility).
Regarding steam technologies,
handler sources estimate the following
equipment costs for in-line steam
systems designed to treat almonds at
varying capacities from 1,000 pounds to
over 30,000 pounds of almonds per
hour:
TABLE 3.—ESTIMATED EQUIPMENT
COSTS FOR STEAM UNITS FOR DIFFERING LEVELS OF TREATMENT CAPACITY
Capacity
(pounds per hour)
1,000 .....................
5,000 .....................
7,500–15,000 ........
Equipment costs
$100,000–$200,000
300,000–325,000
370,000–470,000
the 20,000 to 30,000 pound per hour
range in Table 3. The treatment
equipment costs for that capacity range
from $525,000 to $800,000. With an
additional 50 percent for cost of other
related equipment and facility
Capacity
Equipment costs
expansion, the costs range from
(pounds per hour)
$787,500 to $1,200,000. Handler sources
20,000–30,000 ......
525,000–800,000 suggest that a figure near the upper end
Over 30,000 ..........
600,000–1,000,000 of that range, $1,125,000, is a good point
estimate of the cost for a 10,000,000
While treatment equipment costs
pound per year treatment line.
would be the most significant outlay,
An important step in assessing the
there would also be capital expenditures financial impact of the proposed
associated with additional conveyance
mandatory treatment on handlers is to
equipment, boilers, cooling systems,
estimate the annualized equipment cost
bins, and possible expansion or
and operating cost of treating the
construction of new buildings. Handler
almonds to prevent Salmonella
sources estimate these costs to be an
contamination. This can be illustrated
additional 50 percent of the treatment
by additional computations, with
equipment costs cited in Table 3,
10,000,000 pounds per year serving as a
depending on capacity needs, and
representative level of treatment
assuming maximum throughput.
capacity, as shown in Table 4, third line
A typical system of 10 million pound
of column A. Table 4 also shows a range
annual capacity would be equivalent to
of costs across different levels of
22,000 pounds per hour, which falls in
handler treatment capacity.
TABLE 3.—ESTIMATED EQUIPMENT
COSTS FOR STEAM UNITS FOR DIFFERING LEVELS OF TREATMENT CAPACITY—Continued
TABLE 4.—ESTIMATE OF AVERAGE ANNUAL EQUIPMENT AND OPERATING COSTS AT VARYING LEVELS OF HANDLER
TREATMENT CAPACITY
B
Total equipment cost *
A
Handler annual capacity
C
Annual use
cost of equipment, 5 year
life **
D
E
Unit cost of equipment at
50% of
capacity
(c/50% of A)
F
Full capacity
(C/A)
(Pounds)
Average
operating
cost
G
H
Equipment plus operating
cost at
50% of
capacity
(D+F)
Full capacity
(E+F)
Cents per pound
2,000,000 .....................................
5,000,000 .....................................
10,000,000 ...................................
15,000,000 ...................................
20,000,000 ...................................
$300,000
487,500
1,125,000
1,500,000
1,650,000
$69,292
112,600
259,845
346,460
381,106
$0.069
0.045
0.052
0.046
0.038
$0.035
0.023
0.026
0.023
0.019
$0.0035
0.0035
0.0035
0.0035
0.0035
$0.0725
0.0485
0.0555
0.0495
0.0415
$0.0385
0.0265
0.0295
0.0265
0.0225
PWALKER on PRODPC60 with PROPOSALS
* Equipment cost estimates at varying capacity levels, including treatment chambers, plus an additional 50 percent for conveyors, other equipment and extension of facilities.
** Annualized equipment cost is computed by dividing the equipment purchase cost by 4.3295, which is the Present Value of a $1 annuity for 5
Years (estimated life of the equipment) at a 5 percent interest rate (estimated cost of capital).
Source for equipment and operating costs: Almond handlers.
To obtain the annual unit cost for
installing a 10 million pound capacity
treatment line (an expenditure of
$1,125,000 in column B), the first step
is to obtain the annualized equipment
cost. The parameters recommended by
the handlers were a 5 year equipment
life and a 5 percent cost of capital. The
annual equipment use factor (4.3295) is
the present value of a $1 annuity for 5
years at 5 percent. Dividing the total
equipment expenditure of $1,125,000 by
4.3295 yields an annualized equipment
cost estimate of $259,845 (column C).
Dividing this figure by the annual
10,000,000 pound capacity yields a cost
per pound estimate of 2.6 cents (column
E). If the treatment line ran at half
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16:53 Dec 05, 2006
Jkt 211001
capacity, the equipment costs per pound
would double to 5.2 cents (column D).
This method of computing annualized
equipment cost does not account for the
tax implications of annual equipment
depreciation or for the salvage value at
the end of the equipment’s useful life.
In addition, the useful life of many
pieces of equipment may well be over
5 years.
Ongoing operational costs (electricity,
etc.) are estimated by handlers to range
from $0.0027 to $0.0043 per pound,
depending on the system. The midpoint
of this range ($0.0035) appears in
column F.
The key results from Table 4 are the
cost estimates per pound of almonds
treated, including both annualized
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Frm 00006
Fmt 4702
Sfmt 4702
equipment costs and operating costs.
The highest cost is 7.25 cents per pound
for the smallest handler (2 million
pounds treated annually) operating at 50
percent capacity (column G). The lowest
cost estimate is 2.25 cents per pound for
a handler treating 20 million pounds per
year operating at full capacity (column
H). These costs can be put in context by
comparing them to almond grower
prices as reported each year by the
NASS. For 2003 to 2005, grower prices
averaged $2.07 per pound, computed by
dividing the value of production for
those three years by the three-year
quantity of production. The treatment
cost estimates per pound in Table 4
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range from 3 percent to 1 percent of the
2003–2005 average grower price, and
represent an even smaller proportion of
the prices paid to handlers when selling
to almond users further down the
marketing chain.
A key aspect of handler costs is the
proportion of total capacity at which a
new production line would operate.
Operating at higher capacity spreads the
equipment cost across a wider base. For
a small handler, investing in equipment
with this level of capacity may only be
viable economically if the costs are
spread over their entire production run,
rather than only applying costs to a
small portion of their production run. If
they do not intend to run their entire
production through the treatment
process, it may be more viable to
outsource the treatment. Costs of
contract processing (i.e., batch
operations for steam processes or PPO
treatment) are estimated to range from
$0.04 to $0.05 per pound. This estimate
includes additional costs associated
with transporting almonds to a custom
facility ($0.01 to $0.015 per pound). For
medium-sized and larger handlers, it
may be more cost effective to construct
a treatment processing line, particularly
if they intend to immediately put a
significant portion of their production
through the process.
Handler sources estimate that the cost
of setting up a new oil roast line is
$300,000 to $600,000, with operating
costs of $0.06 to $0.10 per pound. A
blanching line may cost upward of
$1,500,000 to $2,500,000 with an
operating cost of approximately $0.12 to
$0.22 per pound. It is unlikely that
handlers would select these
technologies unless they are already
providing custom processed, valueadded products to their customers.
Regarding compliance and oversight
costs, it is anticipated that handlers who
do not currently have thorough
recordkeeping procedures in place
would likely have to invest
approximately 40–80 person-hours to
develop their treatment plan. However,
once this document has been created, it
would be updated on an annual basis,
which would likely involve less time.
Validation of treatment systems is
estimated to cost from $1,000 to $3,000
per line, depending upon the
complexity of the equipment utilized.
Treatment technology and equipment
that have been modified to the point
where operating parameters such as
time, temperature, or volume, change
must be revalidated.
Handler verification costs could vary,
depending on whether the handler was
under an on-site program or an auditbased program. The fee for an on-site
program would be a minimum charge of
$44.00 per hour (with 1 hour required
to treat 44,000 pounds), or $0.204 per
hundredweight, whichever is greater.
The former is equivalent to $1.00 per
thousand pounds treated. For an auditbased program, the fee would be $78.00
per hour. Travel time for both programs
would be charged at $44.00 per hour
and $0.34 per mile.
Examples of estimated handler
verification costs are provided in Tables
5 and 6 below:
TABLE 5.—ANNUAL HANDLER VERIFICATION COSTS: ON-SITE PROGRAM
Volume of almonds treated per year
Audit cost by type
100,000
lbs
Hourly rate* ..........................................................................................................
Per Cwt = $.204 ...................................................................................................
2 mill.
lbs
$100
204
40 mill.
lbs
$2,000
4,080
$40,000
81,600
100 mill.
lbs
250 mill.
lbs
$100,000
204,000
$250,000
510,000
* Hourly rate of $44/hour, with 1 hour required per 44,000 1bs of volume treated (equivalent to $1.00 per thousand pounds treated).
TABLE 6.—ANNUAL HANDLER VERIFICATION COSTS: AUDIT-BASED PROGRAM
Audit cost by hours required to complete audit*
1
2
3
4
5
6
7
8
$78
32
110
$156
32
188
$234
32
266
$312
32
344
$390
32
422
$468
32
500
$546
32
578
$624
32
656
Audit hourly cost = $78 ....................................................................
Auditor Transportation Cost** ..........................................................
Cost per individual audit ..................................................................
PWALKER on PRODPC60 with PROPOSALS
* Estimated hours per audit varies by volume treated annually: (up to 2 milllon pounds: 1–3 hours); (more than 2 but less than 40 million
pounds: 2–5 hours); (40 million pounds or more: 3–8 hours).
** Estimated auditor transportation cost to each facility is approximately $32: $22 for travel time (1⁄2 hour @ $44/hour) plus mileage reimbursement of $10 (30 miles @ $0.34 per mile).
The benefits associated with the
proposed mandatory program are the
avoided costs of a Salmonella outbreak.
These costs may vary depending on
several factors, including the quantity of
product recalled, impact on consumer
sales, lost customer confidence,
insurance costs, and possible litigation.
Using 2003–2005 average almond crop
value as the basis, a loss of 5 percent
would be equal to approximately $102
million.
The Board considered various
alternatives and options to a mandatory
treatment program. One option would
VerDate Aug<31>2005
16:05 Dec 05, 2006
Jkt 211001
be to take no action. However, the Board
concluded that this was not in the best
interest of the industry nor consumers.
The Board believes that the industry
should provide consumers with a
quality product. Taking no action when
there are viable alternatives could be
significant in terms of the financial well
being of the industry should another
outbreak occur that was linked to
almonds.
The Board also considered continuing
its voluntary action plan alone, without
proposing a mandatory program.
However, surveys conducted by the
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Fmt 4702
Sfmt 4702
Board indicate that not all handlers are
implementing the action plan. Thus, the
Board concluded that a mandatory
program is in the best interest of the
industry and consumers.
The Board also considered the
effectiveness of testing for Salmonella
prior to shipment. During the 2001 and
2004 outbreaks, significant amounts of
testing occurred at the orchard level, in
hulling and shelling facilities, and at
retail. However, it was determined by
the CDHS, University of California,
Davis, and other pathogen experts that
testing cannot be relied upon as the only
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Federal Register / Vol. 71, No. 234 / Wednesday, December 6, 2006 / Proposed Rules
measure to ensure that almonds are
Salmonella free. Thus, the Board
concluded that testing alone was not a
viable alternative.
The Board also explored the merits of
requiring alternative log reductions. As
previously mentioned, the Board
initially supported a 5-log reduction,
which was FDA’s performance standard.
However, a risk assessment model
demonstrated that a minimum 4-log
reduction could provide an appropriate
level of consumer protection compared
to a 5-log reduction. Thus, the Board
concluded that a minimum 4-log
reduction was an appropriate standard
for almonds.
The Board also explored the merits of
whether the DV program should be
temporary, whereby all almonds would
be treated at the handler level prior to
shipment. The Board submitted an
initial proposal to USDA in February
2006 that would have ultimately
required handlers to treat all almonds
prior to shipment, with the DV program
being temporary. However, concerns
were raised by various parties,
including manufacturers, handlers, and
foreign countries, regarding the
temporary nature of the DV program,
and the requirement that all exported
almonds be treated prior to shipment.
The Board ultimately revised its
proposal to remove the proviso
regarding discontinuance of the DV
program, to allow untreated almonds to
be shipped to locations outside the U.S.,
Canada, or Mexico, and to require that
all containers of untreated almonds be
prominently identified with the term
‘‘unpasteurized.’’
This action would impose additional
reporting and recordkeeping burden on
California almonds handlers, process
authorities, almond manufacturers, and
DV program auditors. Process
authorities, manufacturers, and DV
auditors would be required to submit
respective applications to the Board
annually. Almond handlers would be
required to submit treatment plans to
the Board annually. These new forms
and a sample ‘‘Handler Treatment Plan’’
are being submitted to the Office of
Management and Budget (OMB) for
approval under OMB Control No. 0581–
NEW. Specific burdens for the three
applications and handler treatment plan
are detailed later in this document in
the section titled Paperwork Reduction
Act. 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. Finally, USDA has not
identified any relevant Federal rules
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16:05 Dec 05, 2006
Jkt 211001
that duplicate, overlap, or conflict with
this rule.
Additionally, the meetings were
widely publicized throughout the
California almond industry and all
interested persons were invited to
attend the meetings and participate in
deliberations on all issues. Between the
summer of 2004 and the Board’s August
2006, meeting, this issue was addressed
at an estimated 12 Board meetings, 18
Food Quality and Safety Committee
meetings, and well over 20 task force
meetings. All of these meetings were
public meetings and all entities, both
large and small, were able to express
views on this issue. Additionally, the
Board issued about 35 updates to
handlers regarding its voluntary action
plan and progress towards its
recommended mandatory program.
Finally, interested persons are invited to
submit information on the regulatory
and informational impacts of this action
on small businesses.
A small business guide on complying
with fruit, vegetable, and specialty crop
marketing agreements and orders may
be viewed at: https://www.ams.usda.gov/
fv/moab.html. Any questions about the
compliance guide should be sent to Jay
Guerber at the previously mentioned
address in the FOR FURTHER INFORMATION
CONTACT section.
A 45-day comment period is provided
for interested persons to comment on
this proposal.The comment period is
deemed appropriate because the Board
recommended that the mandatory
program be in effect for the 2007–08
crop year, which begins August 1, 2007.
For that year, handlers would have to
submit their treatment plans to the
Board by May 1, 2006. All written
comments received will be considered
before a final determination is made on
this matter.
Paperwork Reduction Act
In accordance with the Paperwork
Reduction Act of 1995 (44 U.S.C.
Chapter 35), the AMS announces its
intention to request approval of a new
information collection under the
marketing order for California almonds.
Title: Almonds Grown in California,
Marketing Order No. 981.
OMB No.: 0581–NEW.
Expiration Date of Approval: 3 years
from OMB date of approval.
Type of Request: New collection.
Abstract: The information collection
requirements in this request are
essential to carry out the intent of the
Act, to provide the respondents the type
of service they request, and to
administer the California almond
marketing order program, which has
been operating since 1950.
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Fmt 4702
Sfmt 4702
On August 22, 2006, the Board
unanimously recommended adding a
new section to the order’s
administrative rules and regulations to
implement a mandatory program to help
reduce the potential for Salmonella in
almonds. This document concerns the
additional reporting and recordkeeping
requirements regarding this mandatory
program, in addition to the
accompanying regulation previously
discussed. Almond handlers would be
required to submit annual treatment
plans to the Board and inspection
agency regarding how they plan to treat
their almonds to reduce the potential for
Salmonella. Entities interested in being
almond process authorities that would
validate technologies would have to
submit an application to the Board on
ABC Form No. 51, ‘‘Application for
Process Authority for Almonds.’’
Manufacturers in the U.S., Canada, and
Mexico interested in being approved to
accept untreated almonds, provided
they agree to treat the almonds
themselves under the Board’s DV
program, would have to submit an
application to the Board on ABC Form
No. 52, ‘‘Application for Direct
Verifiable (DV) Program for
FurtherProcessing of Untreated
Almonds.’’ Entities interested in being
approved DV user auditors would have
to submit an application to the Board on
ABC Form No. 53, ‘‘Application for
Direct Verifiable (DV) Program
Auditors.’’ This information would be
needed by the Board to properly
administer the mandatory Salmonella
treatment program for the California
almond industry.
The information collected is used
only by authorized representatives of
USDA, including AMS, Fruit and
Vegetable Programs regional and
headquarters’ staff, and authorized
employees and agents of the Board.
Authorized Board employees, agents,
and the industry are the primary users
of the information and AMS is the
secondary user.
Handler Treatment Plan
Estimate of Burden: Public reporting
burden for this collection of information
is estimated to be no more than 27.3
hours per response (80 hours per
response for the first year of regulation,
and 1 hour per response each year
thereafter) .
Respondents: Almond handlers.
Estimated Number of Respondents:
115.
Estimated Number of Responses per
Respondent: 1.
Estimated Total Annual Burden on
Respondents: 3,143 hours per year
(9,200 hours for the first year of
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regulation, and 115 hours for each year
thereafter).
Application for Process Authority for
Almonds—ABC Form No. 51
Estimate of Burden: Public reporting
burden for this collection of information
is estimated to average 2 hours per
response.
Respondents: Persons or organizations
that would like to qualify to be Boardapproved process authorities that
validate treatments and technologies.
Estimated Number of Respondents:
25.
Estimated Number of Responses per
Respondent: 1.
Estimated Total Annual Burden on
Respondents: 50 hours.
Application for Direct Verifiable (DV)
Program for FurtherProcessing of
Untreated Almonds—ABC Form No. 52
Estimate of Burden: Public reporting
burden for this collection of information
is estimated to average 1 hour per
response.
Respondents: Manufacturers who
would like to qualify to participate in
the Board’s direct verifiable program.
Estimated Number of Respondents:
53.
Estimated Number of Responses per
Respondent: 1.
Estimated Total Annual Burden on
Respondents: 53 hours.
PWALKER on PRODPC60 with PROPOSALS
Application for Direct Verifiable (DV)
Program Auditors—ABC Form No. 53
Estimate of Burden: Public reporting
burden for this collection of information
is estimated to average 1 hour per
response.
Respondents: Entities that would like
to qualify as auditors under the DV
program.
Estimated Number of Respondents:
50.
Estimated Number of Responses per
Respondent: 1.
Estimated Total Annual Burden on
Respondents: 50 hours.
Comments: Comments are invited on:
(1) Whether the proposed collection of
information is necessary for the proper
performance of the functions of the
agency, including whether the
information will have practical utility;
(2) the accuracy of the agency’s estimate
of the burden of the proposed collection
of information, including the validity of
the methodology and assumptions used;
(3) ways to enhance the quality, utility,
and clarity of the information to be
collected; and (4) ways to minimize the
burden of the collection of information
on those who are to respond, including
the use of appropriate automated,
electronic, mechanical, or other
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16:05 Dec 05, 2006
Jkt 211001
technological collection techniques or
other forms of information technology.
Comments should reference OMB No.
0581–NEW and the California almond
marketing order, and be sent to the
USDA in care of the Docket Clerk at the
address above. All comments received
will be available for public inspection
during regular business hours at the
same address. All responses to this
notice will be summarized and included
in the request for OMB approval. All
comments will also become a matter of
public record.
The AMS is committed to complying
with the E-Government Act, to promote
the use of the Internet and other
information technologies to provide
increased opportunities for citizen
access to Government information and
services, and for other purposes.
It is estimated that handlers and
manufacturers may spend between 20–
100 hours annually maintaining records
pertaining to this rule. Using a figure of
$10 per hour (a sum deemed reasonable,
should handlers and manufacturers be
compensated for this time), it is
estimated that the recordkeeping burden
would cost handlers and manufacturers
between $200–$1,000 per year.
Additionally, handler and
manufacturers would have to maintain
related records and documentation for
two full years following the end of the
crop year.
A 60-day comment period is provided
to allow interested persons to comment
on this proposed information collection.
List of Subjects in 7 CFR Part 981
Almonds, Marketing agreements,
Nuts, Reporting and recordkeeping
requirements.
For the reasons set forth in the
preamble, 7 CFR part 981 is proposed to
be amended as follows:
PART 981—ALMONDS GROWN IN
CALIFORNIA
1. The authority citation for 7 CFR
part 981 continues to read as follows:
Authority: 7 U.S.C. 601–674.
2. Section 981.442 is amended by
adding paragraph (b) to read as follows:
§ 981. 442
Quality control.
*
*
*
*
*
(b) Outgoing. Pursuant to § 981.42(b),
beginning with the 2007–08 crop year,
which begins on August 1, 2007, and
except as provided in § 981.13 and in
paragraph (6) of this section, handlers
shall subject their almonds to a
treatment process or processes prior to
shipment to reduce potential
Salmonella bacteria contamination in
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Sfmt 4702
70691
accordance with the provisions of this
section.
(1) Treatment process. Acceptable
treatment processes shall utilize
technologies that have been determined
to achieve in total a minimum 4-log
reduction of Salmonella bacteria in
almonds, pursuant to a letter of
determination issued by the Food and
Drug Administration(FDA), or
acceptance by a scientific review panel
as identified by the Board (Technical
Expert Review Panel or ‘‘TERP’’). Such
panel shall be approved at least
annually by the Board prior to the
beginning of each crop year, or as
needed during the crop year.
(2) On-site versus off-site treatment.
Handlers shall subject almonds to a
treatment process or processes prior to
shipment either at their handling
facility (on-site), or at an off-site
treatment facility located within the
production area. Transportation of
almonds by a handler to an off-site
treatment facility shall not be deemed a
shipment.
(3) Validation by process authorities.
Handlers shall only use, or transport
their almonds to off-site treatment
facilities that use treatment processes
that have been validated by a Boardapproved process authority. Validation
means that the treatment technology
and equipment have been demonstrated
to achieve in total a minimum 4-log
reduction of Salmonella bacteria in
almonds.
A process authority is an entity that
has expert knowledge of appropriate
processes for the treatment of almonds
as defined in paragraph (b)(1) of this
section, and meets other criteria as
specified by the Board. Treatment
technology and equipment that have
been modified to the point where
operating parameters such as time,
temperature, or volume, change shall be
revalidated. On an annual basis, process
authorities must submit an application
to the Board on ABC Form No. 51,
‘‘Application for Process Authority for
Almonds,’’ and be approved by the
Board’s TERP. Should the applicant
disagree with the TERP’s decision, it
may appeal the decision in writing to
the Board, and ultimately to USDA.
(4) Compliance and verification. In
accordance with the requirements of
this paragraph, handlers shall utilize
either an on-site verification program
(traditional), or an audit-based
verification program to ensure that their
almonds have been subjected to an
acceptable treatment process to reduce
Salmonella bacteria prior to shipment.
Each handler may decide which
verification program would be the most
cost-effective for his or her operation.
E:\FR\FM\06DEP1.SGM
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PWALKER on PRODPC60 with PROPOSALS
70692
Federal Register / Vol. 71, No. 234 / Wednesday, December 6, 2006 / Proposed Rules
(i) By May 31, each handler shall
submit to the Board a Treatment Plan
for the upcoming crop year: Provided,
That, for the 2007–08 crop year, which
begins on August 1, 2007, each handler
shall submit to the Board its Treatment
Plan by May 1, 2007. A Treatment Plan
shall describe how a handler plans to
treat his or her almonds, and must
address specific parameters as outlined
by the Board for the handler to ship
almonds. Such plan shall be reviewed
by the Board, in conjunction with the
inspection agency, to ensure it is
complete and can be verified, and be
approved by the Board. Almonds sent
by a handler for treatment to an off-site
facility affiliated with another handler
shall be subject to the approved
Treatment Plan utilized at that facility.
Handlers shall follow their own
approved Treatment Plans for almonds
sent to an off-site facility that is not
affiliated with another handler.
(ii) Handlers utilizing an on-site
verification program shall cause the
inspection agency to verify that their
Treatment Plans have been followed,
and that their almonds have been
subjected to an acceptable treatment
process that has been validated by a
Board-approved process authority. Such
handlers shall submit, or cause to be
submitted, a verification report to the
Board. The inspection agency must
physically observe the treatment process
to issue such report.
(iii) Handlers utilizing an audit-based
verification program shall be subject to
periodic audits conducted by the
inspection agency. The inspection
agency shall provide copies of the audit
report to the Board. Handlers who do
not comply with an audit-based
verification program shall be required to
revert to an on-site verification program.
(iv) Interhandler transfers of almonds
may or may not be treated prior to
transfer. Handlers receiving untreated
almonds from another handler shall be
responsible for treating the product.
Handlers receiving treated almonds
from another handler must have
procedures outlined in theirTreatment
Plan addressing how the integrity of the
treated almonds will be maintained. In
all instances involving interhandler
transfers, the receiving handler shall be
responsible for ensuring that the
almonds are treated prior to shipment
and maintaining documentation to that
effect.
(5) Records. Handlers shall maintain
records and documentation that will be
subject to audit by the Board for the
purpose of verifying compliance with
this section. Records must be
maintained for two full years following
the end of the crop year, and must
VerDate Aug<31>2005
16:05 Dec 05, 2006
Jkt 211001
identify lots from the point of treatment
forward to the point of shipment by the
handler. Lot identification shall also
provide the ability to differentiate
treated from untreated product.
(6) Exemptions. Handlers may ship
untreated almonds under the following
conditions. For purposes of this section,
container means a box, bin, bag, carton,
or any other type of receptacle used in
the packaging of bulk almonds.
(i) Handlers may ship untreated
almonds for further processing directly
to manufacturers located within the
U.S., Canada or Mexico. This program
shall be termed the Direct Verifiable
(DV) program. Handlers may only ship
untreated almonds to manufacturers
who have submitted ABC Form No. 52,
‘‘Application for Direct Verifiable (DV)
Program for Further Processing of
Untreated Almonds,’’ and have been
approved by the Board’ TERP. Such
manufacturers must apply to the Board
and be approved annually by the TERP.
Should the applicant disagree with the
TERP’s decision, it may appeal the
decision in writing to the Board, and
ultimately to USDA. The Board shall
issue a DV User code to an approved
manufacturer. Handlers must reference
such code in all documentation
accompanying the lot and identify each
container of such almonds with the term
‘‘unpasteurized.’’ Such lettering shall be
on one outside principal display panel,
at least 1⁄2 inch in height, clear and
legible. If a third party is involved in the
transaction, the handler must provide
sufficient documentation to the Board to
track the shipment from the handler’s
facility to the approved DV user.
Approved DV Users shall:
(A) Subject such almonds to a
treatment process or processes using
technologies that achieve in total a
minimum 4-log reduction of Salmonella
bacteria as determined by the FDA,
accepted by the Board’s scientific
review panel, or established by a Boardapproved process authority;
(B) Identify the manufacturing
locations where treatment will occur;
(C) Have their treatment technology
and equipment validated by a Boardapproved process authority. Treatment
technology and equipment that have
been modified to the point where
operating parameters such as time,
temperature, or volume, change shall be
revalidated;
(D) Have their technology and
procedures verified by a Boardapproved DV auditor to ensure they are
being applied appropriately. On an
annual basis, DV auditors must submit
an application to the Board on ABC
Form No. 53, ‘‘Application for Direct
Verifiable (DV) Program Auditors,’’ and
PO 00000
Frm 00010
Fmt 4702
Sfmt 4702
be approved by the Board’s TERP.
Should the applicant disagree with the
TERP’s decision, it may appeal the
decision in writing to the Board, and
ultimately to USDA;
(E) Maintain all records regarding
validation and verification of treatment
methods, processing, and product
traceability. Such records shall be
retained for two years and shall be made
available for review by the Board; and,
(F) Ship any almonds which will not
be treated to a handler, to another
approved DV User, to locations outside
the U.S., Canada, and Mexico
(containers must remain identified with
the term ‘‘unpasteurized’’), as specified
in § 981. 442(b)(6)(i), or dispose of such
almonds in non-edible channels.
(ii) Handlers may ship untreated
almonds directly or through a third
party to locations outside the U.S.,
Canada, and Mexico, provided that each
container of such almonds is identified
with the term ‘‘unpasteurized.’’ Such
lettering shall be on one outside
principal display panel, at least 1⁄2 inch
in height, clear and legible. If a third
party is involved in the transaction, the
handler must provide sufficient
documentation to the Board to track the
shipment from the handler’s facility to
the importer in the foreign country.
(7) Other restrictions. The provisions
of this section do not supersede any
restrictions or prohibitions regarding
almonds grown in California under the
FederalFood, Drug and Cosmetic Act, or
any other applicable laws or regulations
or the need to comply with applicable
food and sanitary regulations of city,
county, State or Federal agencies.
Dated: December 1, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing
Service.
[FR Doc. 06–9543 Filed 12–1–06; 12:43 pm]
BILLING CODE 3410–02–M
DEPARTMENT OF ENERGY
Federal Energy Regulatory
Commission
18 CFR Parts 2, 33, 365 and 366
[Docket No. AD07–2–000]
Repeal of the Public Utility Holding
Company Act of 1935 and Enactment
of the Public Utility Holding Company
Act of 2005; Transaction Subject to
FPA Section 203; Supplemental Notice
of Technical Conference
November 27, 2006.
Federal Energy Regulatory
Commission, DOE.
AGENCY:
E:\FR\FM\06DEP1.SGM
06DEP1
Agencies
[Federal Register Volume 71, Number 234 (Wednesday, December 6, 2006)]
[Proposed Rules]
[Pages 70683-70692]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-9543]
========================================================================
Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
========================================================================
Federal Register / Vol. 71, No. 234 / Wednesday, December 6, 2006 /
Proposed Rules
[[Page 70683]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 981
[Docket No. FV06-981-1 PR]
Almonds Grown in California; Outgoing Quality Control
Requirements and Request for Approval of New Information Collection
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This proposed rule invites comments on adding outgoing quality
control requirements under the administrative rules and regulations of
the California almond marketing order (order). The order regulates the
handling of almonds grown in California and is administered locally by
the Almond Board of California (Board). This proposed rule provides for
a mandatory program under the order to reduce the potential for
Salmonella bacteria in almonds. This action would help ensure that
quality almonds are available for human consumption. This proposal also
announces the Agricultural Marketing Service's (AMS) intention to
request approval of a new information collection issued under the
order.
DATES: Comments must be received by January 22, 2007. Pursuant to the
Paperwork Reduction Act, comments on information collection burden that
would result from this proposal must be received by February 5, 2007.
ADDRESSES: Interested persons are invited to submit written comments
concerning this rule. Comments must be sent to the Docket Clerk,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC
20250-0237; Fax: (202) 720-8938, E-mail: moab.docketclerk@usda.gov. or
Internet: https://www.regulations.gov. 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, or can be viewed at:
https://www.ams.usda.gov/fv/moab.html.
FOR FURTHER INFORMATION CONTACT: Maureen T. Pello, Assistant Regional
Manager, or Kurt J. Kimmel, Regional Manager, California Marketing
Field Office, Marketing Order Administration Branch, Fruit and
Vegetable Programs, AMS, USDA, Telephone: (559) 487-5901, Fax: (559)
487-5906, or E-mail: Maureen.Pello@usda.gov. or Kurt.Kimmel@usda.gov.
Small businesses may request information on complying with this
regulation by contacting Jay Guerber, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence
Avenue, SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202)
720-2491, Fax: (202) 720-8938, or E-mail: Jay.Guerber@usda.gov.
SUPPLEMENTARY INFORMATION: This proposed rule is issued under Marketing
Order No. 981, as amended (7 CFR part 981), regulating the handling of
almonds 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 (USDA) 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 USDA 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. Such
handler is afforded the opportunity for a hearing on the petition.
After the hearing USDA 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 USDA'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 proposed rule invites comments on adding outgoing quality
control requirements under the administrative rules and regulations of
the order. This rule provides for a mandatory program to reduce the
potential for Salmonella bacteria in almonds. This action would help
ensure that quality almonds are available for human consumption. This
action was unanimously recommended by the Board at a meeting on August
22, 2006. This proposal also announces AMS's intention to request
approval of a new information collection issued under the order.
Section 981.42(b) of the order provides authority for the Board to
establish, with approval of the Secretary, such minimum quality and
inspection requirements applicable to almonds to be handled or to be
processed into manufactured product, as will contribute to orderly
marketing or be in the public interest. In such crop year, no handler
shall handle or process almonds into manufactured items or products
unless they meet the applicable requirements as evidenced by
certification acceptable to the Board. The Board, with approval of the
Secretary, may establish rules and regulations necessary and incidental
to the administration of this provision.
Salmonella Outbreaks Linked to Almonds
In 2001, a Salmonella outbreak was identified in Canada, which was
linked to a specific retailer, traced back to raw almonds sold in bulk
bins, and ultimately traced back to the handler and the grower. The
Salmonella strain was extremely unusual and had not previously been
associated with contamination in a non-animal product. Three orchards
where the almonds were produced were identified, and samples gathered
from the orchards contained Salmonella. With oversight by the
California Department of Health Services (CDHS), procedures were
implemented by the grower, huller/
[[Page 70684]]
sheller, and handler to specify how the almonds from those orchards
were to be processed using a treatment to reduce the potential for
Salmonella before the almonds were moved into commercial channels. The
Board initiated an extensive research program to help understand the
occurrence of Salmonella in almond orchards.
The Board also initiated an education program for the industry
regarding Good Agricultural Practices (GAP's), Good Manufacturing
Practices (GMP's), and Sanitation Standard Operating Procedures
(SSOP's). GAP's provide guidelines to growers on how to minimize
potential biological hazards during the production and harvesting of
almonds. GMP's define procedures to be used by handlers to allow
almonds to be processed, packed, and sold under sanitary conditions.
SSOP's help to ensure a clean and sanitary environment in the packing
facility. Together, these practices and procedures provide a framework
for a Hazard Analysis Critical Control Point (HACCP) program for the
industry to proactively eliminate or minimize potential sources of
Salmonella contamination.
In the spring of 2004, a second Salmonella outbreak occurred in
Oregon that was linked to raw almonds purchased at a particular
retailer. The Salmonella strain was very similar to that identified in
2001. One handler had been the supplier to the retailer, and the
handler initiated a voluntary recall of 5 million pounds of almonds
sold in the U.S. The Food and Drug Administration (FDA) subsequently
announced that the almonds had been exported to eight countries. The
handler then initiated a full recall of the 6 suspect almonds produced,
packed, and shipped, increasing the recall to approximately 15 million
pounds.
In the summer of 2004, the Board unanimously approved a voluntary
action plan that called for treating all almonds to reduce the
potential for Salmonella. Handlers were encouraged to treat the almonds
prior to shipment, or ship the almonds to a manufacturer who agreed to
treat the almonds. The Board continued to fund research on various
technologies that could be used to help reduce the potential for
Salmonella in almonds.
Board Recommendation for a Mandatory Treatment Program
To further its efforts in providing a high quality product to
consumers, in August 2006, the Board recommended that a mandatory
treatment program be implemented under the order, pursuant to authority
provided in Sec. 981.42(b). Specifically, handlers would have to
subject their almonds to a process that achieves a minimum 4-log
reduction in Salmonella bacteria prior to shipment. The program would
provide for an exemption for handlers who ship untreated almonds under
a direct verifiable (DV) program to manufacturers within the U.S.,
Canada, or Mexico who agree to treat the almonds accordingly. The
program would also provide for an exemption for handlers who ship
untreated almonds to locations outside of the U.S., Canada, or Mexico.
All containers of untreated almonds shipped under the two exemptions
would have to be prominently identified with the term
``unpasteurized.'' The program would become effective for the 2007-08
crop year which begins on August 1, 2007.
Specific Parameters of Proposed Mandatory Program
Under the Board's proposal, handlers would have to subject their
almonds to a treatment process or processes that achieve in total a
minimum 4-log reduction of Salmonella bacteria, or ship their almonds
under one of the two exemptions cited above. The proposal would only
affect those who meet the definition of ``handler'' in Sec. 981.13 of
the order (thus exempting growers selling through roadside stands). Log
reduction describes how much bacterial contamination is reduced by a
treatment process. A 4-log reduction decreases bacteria by a factor of
10,000 (4 zeros). One treatment process that independently achieved a
minimum 4-log reduction could be used, or a combination of different
treatments could be used that collectively achieve a minimum 4-log
reduction (``hurdle'' technologies).
The Board initially supported a 5-log reduction, which is FDA's
performance standard. However, the Board subsequently funded research
with the University of California, Davis, in conjunction with Rutgers
University, whereby a risk assessment model was developed using data
from the two Salmonella outbreaks, as well as data from an industry
pathogen survey.\1\ The risk assessment model demonstrated that a
minimum 4-log reduction could provide an appropriate level of consumer
protection. Thus, the Board concluded that a 4-log reduction was an
appropriate standard for almonds.
---------------------------------------------------------------------------
\1\ Journal of Food Protection, Vol. 69, No. 7, 2006, Pages
1594-1599.
---------------------------------------------------------------------------
Treatment Processes
Acceptable treatment processes for handlers would have to utilize
technologies that have been determined to achieve a minimum 4-log
reduction of Salmonella bacteria in almonds, pursuant to a letter of
determination issued by the FDA, or acceptance by a scientific review
panel as identified by the Board (known as the Technical Expert Review
Panel, or TERP).
The FDA reviews studies utilizing specific protocols and treatment
parameters, and issues a letter of determination when it determines
that a process has sufficiently demonstrated its effectiveness to
achieve a 5-log reduction of Salmonella in almonds. To date, FDA has
issued letters of determination for propylene oxide (PPO), oil
roasting, blanching, and for a moist heat process.
The TERP would evaluate various treatment technologies against
specific criteria, based on recommendations provided by the National
Advisory Committee on Microbiological Criteria in Food (NACMCF). The
NACMCF was formed in 1988 under Departmental Regulation 1043-28, and
provides impartial, scientific advice to Federal food safety agencies
for use in the development of an integrated national food safety
systems approach from farm to final consumption to assure the safety of
domestic, imported, and exported foods. It is co-sponsored by USDA's
Food Safety and Inspection Service, the FDA, the Center for Disease
Control and Prevention, the National Marine Fisheries Service, and the
Department of Defense Veterinary Service Activity.
While the TERP would not ``recommend'' or ``approve'' technologies,
its review would ensure that technologies utilized by the industry have
been evaluated against specific science-based criteria demonstrating
the technology's ability to deliver a lethal treatment for Salmonella
in almonds. Documentation and data would be provided to the TERP (by a
company pursuing TERP acceptance for its technology) for review to
ensure that the proposed technologies are consistently achieving the
minimum 4-log reduction.
The TERP, initially formed by the Board in the fall of 2004 to
review treatment technologies, consists of four scientists, with a
representative from the FDA serving as an ex-officio member. The TERP
has been evaluating various technologies and treatments for the almond
industry, and to date, the TERP has accepted steam and moist heat
treatments as acceptable for achieving the Board's Salmonella reduction
goals. Membership on the TERP would be approved annually by the Board
prior to the beginning of each crop year, or more frequently if needed
during the crop
[[Page 70685]]
year, for example, to fill a vacancy on the panel.
On-Site Versus Off-Site Treatment
Under the Board's proposal, unless handlers shipped their almonds
to a Board-approved DV user (described later in this document), or
shipped their almonds to locations outside of the U.S., Canada, or
Mexico, handlers would have to subject their almonds to a treatment
process or processes prior to shipment either at their handling
facility (on-site), or at an off-site treatment facility located within
the production area (California). An off-site facility may or may not
be affiliated with another handler. Transportation of almonds by a
handler to an off-site treatment facility would not be considered a
shipment.
Validation by Process Authorities
Handlers could only use, or transport their almonds to off-site
treatment facilities that use treatment processes that have been
``validated'' by a Board-approved process authority. Validation means
that the treatment technology and equipment utilized have been
demonstrated to achieve the minimum 4-log reduction. The use of process
authorities is modeled after process authorities as cited in the
``Guide to Inspections of Low Acid Canned Food Manufacturers'' (Guide)
(https://www.fda.gov). Treatment technology and equipment that have been
modified to the point where operating parameters such as time,
temperature, or volume, change must be revalidated.
For purposes of this document, a process authority is a person or
an organization that has expert knowledge of appropriate processes for
the treatment of almonds as described above, and meets other criteria
as specified by the Board. Such criteria would include, but not be
limited to, the following: (1) Knowledge about the equipment used for
the treatment process; (2) experience in conducting appropriate studies
to determine the ability of the equipment to deliver the appropriate
treatment (such as heat penetration or heat distribution studies); and
(3) the ability to determine that sufficient data has been gathered to
identify the critical factors needed to ensure the quality of the final
product. On an annual basis, process authorities would have to submit
an application to the Board on ABC Form No. 51, ``Application for
Process Authority for Almonds,'' and be approved by the Board's TERP.
Should the applicant disagree with the TERP's decision, it could appeal
the decision in writing to the Board, and ultimately to USDA.
Compliance and Verification Program
Treatment Plans
To ensure compliance with the mandatory program, handlers would be
subject to verification by the Federal or Federal-State Inspection
Service (inspection agency). Handlers could use either an on-site
(traditional) or an audit-based verification program. Each handler
would decide which verification program would be the most cost-
effective for his or her operation. All handlers would be required to
submit a treatment plan to the Board for the upcoming crop year by May
31. The crop year runs from August 1 through July 31 of the subsequent
year. However, for the 2007-08 crop year, which would be the first year
that the mandatory program was in effect, handlers would have to submit
their treatment plans by May 1, 2007. The plan would be reviewed by the
Board in conjunction with the inspection agency to ensure such plans
were complete and auditable. The plan would be approved by the Board
and must address specific parameters for the handler to ship almonds.
Such parameters would include, but not be limited to, the following:
(1) The location of treatment plant; (2) the name and address of off-
site treatment facility (custom processor), if appropriate; (3) a
statement regarding whether treatment processes have been accepted by
the TERP and/or ``determined'' by the FDA; (4) a statement regarding
validation of treatment technology and equipment by a Board-approved
process authority; (5) a statement whether untreated almonds would be
exported; (6) a statement whether the handler would use the DV program;
(7) a description or flow chart explaining how raw, untreated almonds
enter and flow through the handler facility, and how the product would
flow through the treatment process, including post treatment, packing,
and/or storage; (8) a list of all treatments that would be used on the
almonds (including, for example, number of blanching lines, etc.); (9)
a description of how treated product would be differentiated and
segregated from untreated product to ensure maintenance of treated
product integrity; (10) a list of procedures regarding how interhandler
transfers would be tracked; and (11) an explanation by handlers using a
combination of processes to achieve a minimum 4-log reduction, that the
processes occur in an appropriate sequence in sufficiently close
proximity to ensure that the integrity of the treated product is
maintained between processes.
Almonds sent by a handler for treatment to an off-site facility
affiliated with another handler would be subject to the approved
treatment plan utilized at that off-site facility. Handlers would have
to follow their own approved treatment plans for almonds sent to an
off-site facility that is not affiliated with another handler.
On-Site Verification Program
Under an on-site verification program, handlers would cause the
inspection agency to verify that their almonds had been subjected to an
acceptable treatment process that had been validated by a Board-
approved process authority. Such handlers would have to submit, or
cause to be submitted, a verification report to the Board. The
inspection agency would have to physically observe the treatment
process to issue such a report. It would be the handler's
responsibility to arrange for inspection agency verification. An on-
site program would be comparable to a traditional in-line or lot
inspection program.
Audit-Based Verification Program
Under an audit-based verification program, handlers would be
subject to periodic audits conducted by the inspection agency. The
inspection agency would verify that handlers were following their
approved treatment plans. Audit frequency would be tied to handler
performance. Handlers would be provided with written audit reports
specifying deficiencies. Handlers who do not comply with an audit-based
verification program would be required to revert to an on-site
verification program. Audit reports would be provided to the Board to
facilitate program compliance.
Interhandler Transfers
Interhandler transfers of almonds may or may not be treated prior
to transfer. Handlers receiving untreated almonds from another handler
would be responsible for treating the product. Handlers receiving
treated almonds from another handler would need to have procedures
outlined in their treatment plan addressing how the integrity of the
treated almonds would be maintained. In all instances involving
interhandler transfers, it would be the responsibility of the receiving
handler to ensure that the almonds are treated prior to shipment and to
maintain documentation to that effect.
Handler Records
Handlers would be required to maintain records and documentation
[[Page 70686]]
that would be subject to audit by the inspection agency and the Board
for the purpose of verifying compliance with the regulation. Consistent
with Sec. 981.70 of the order regarding handler records and
verification, records would have to be maintained for 2 full years
following the end of a crop year. Such records would identify lots from
the point of treatment forward to the point of shipment by the handler.
Lot identification would also provide the ability to differentiate
treated from untreated product.
Exemptions
Direct Verifiable Program
Handlers could ship untreated almonds directly to Board-approved
manufacturers within the U.S., Canada, or Mexico for further processing
under the Direct Verifiable or DV program. The Board would issue a DV
user code to an approved manufacturer. Handlers would have to reference
this code on all documentation accompanying the lot. This would help
the Board track DV shipments and facilitate compliance with the
program. Handlers would also have to identify each container of such
almonds with the term ``unpasteurized.'' Container means a box, bin,
bag, carton, or any other type of receptacle used in the packaging or
handling of bulk almonds. The lettering must be on one outside
principal display panel, at least \1/2\ inch in height, clear and
legible. If a third party is involved in the transaction, the handler
must provide sufficient documentation to the Board to track the
shipment from the handler's facility to the approved DV user.
Manufacturers wanting to participate in the DV program would have
to submit an application annually to the Board on ABC Form No. 52,
``Application for Direct Verifiable (DV) Program for Further Processing
of Untreated Almonds,'' and be approved by the Board's TERP. Should the
applicant disagree with the TERP's decision, it could appeal the
decision in writing to the Board, and ultimately to USDA.
Similar to handlers, manufacturers would have to subject the
almonds to a treatment process or processes using technologies that
achieve in total a minimum 4-log reduction of Salmonella bacteria as
determined by the FDA or accepted by the TERP. Additionally,
manufacturers could use treatment processes that have been
``established'' by a Board-approved process authority. ``Established''
means that that the process authority would evaluate treatment
processes and protocols to ensure the technology's ability to deliver a
lethal treatment for Salmonella in almonds and achieve a minimum 4-log
reduction. The Board recommended this option to address manufacturers'
concern regarding the process to seek TERP acceptance of their
treatments, which could involve providing data on their proprietary
processes to the TERP (i.e., specific time and temperature data for
special equipment).
Manufacturers must also do the following: (1) Identify the
manufacturing locations where treatment would occur; (2) have their
treatment technology and equipment validated by a Board-approved
process authority. Treatment technology and equipment that have been
modified to the point where operating parameters such as time,
temperature, or volume, change must be revalidated; (3) maintain all
records regarding validation and verification of treatment methods,
processing, and product traceability for 2 years, and make such records
available for review by the Board; and (4) ship untreated almonds (due,
for example, to a manufacturer overbuying) to a handler, to another
approved DV user, to locations outside the U.S., Canada, or Mexico
(containers must remain identified with the term unpasteurized), or
dispose of such almonds in non-edible channels.
Further, DV users would be audited by a Board-approved auditor
within 1-2 months after the start of treatments, and at least once
every 12 months thereafter. Such audits would determine if: (1) The DV
user utilized appropriate treatment processes; (2) the DV user has a
letter issued by a Board-approved process authority that validated that
the treatment achieves a 4-log reduction of Salmonella; (3) personnel
and procedures used at the facility ensure that treatment parameters
were followed; and (4) records are retained for two years that document
the treatment of almonds, or that any untreated almonds were properly
disposed of as outlined above. A summary audit report of the DV user
would be sent to the Board within 10 days of the audit. On an annual
basis, DV user auditors would have to submit an application to the
Board on ABC Form No. 53, ``Application for Direct Verifiable (DV)
Program Auditors,'' and be approved by the Board's TERP. Should the
applicant disagree with the TERP's decision, it could appeal the
decision in writing to the Board, and ultimately to USDA.
The Board recommended including Mexico and Canada as part of the DV
program for compliance purposes. The Board was concerned that handlers
could circumvent the regulation by shipping untreated almonds to Mexico
or Canada, then, bring them back into the U.S. and sell them in normal
market channels.
Shipments Outside of the U.S., Canada, or Mexico
Handlers could also ship untreated almonds directly to locations
outside the U.S., Canada, or Mexico, provided that each container of
such almonds is prominently identified with the term unpasteurized. The
lettering must be on one outside principal display panel, at least \1/
2\ inch in height, clear and legible. Again, if a third party is
involved in the transaction, the handler must provide sufficient
documentation to the Board to track the shipment from the handler's
facility to the importer in the foreign country.
Accordingly, a new paragraph (b) regarding outgoing quality control
and a mandatory program to reduce the potential for Salmonella bacteria
contamination in almonds is proposed to be added to Sec. 981.442 of
the order's administrative rules and regulations.
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 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 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 6,000 producers of almonds in the
production area and approximately 115 handlers subject to regulation
under the marketing order. Additionally, the Board estimates there
would be about 25 process authorities, 53 almond manufacturers, and 50
DV program auditors impacted by this rule. Small agricultural producers
are defined by the Small Business Administration (13 CFR 121.201) as
those having annual receipts of less than $750,000, and small
agricultural service firms are defined as those whose annual receipts
are less than $6,500,000.
Data for the most recently completed crop year indicate that about
52 percent of the handlers shipped under $6,500,000 worth of almonds.
Dividing
[[Page 70687]]
average almond crop value for 2003-2005 reported by the National
Agricultural Statistics Service (NASS) ($2.043 billion) by the number
of producers (6,000) yields an average annual producer revenue estimate
of about $340,000. Based on the foregoing, about half of the handlers
and a majority of almond producers may be classified as small entities.
While data regarding the size of the process authorities is not
available, it may be assumed that some process authorities, almond
manufacturers, and DV program auditors may be classified as small
entities.
The almond industry's 6,000 growers produce approximately 1 billion
pounds annually (kernel weight basis). Industry members expect
production to increase by 50 percent in the next 3-5 years, due to a
significant amount of newly planted acreage that will come into
production.
Although the Board currently projects that there are about 115
handlers, handler number estimates can vary over time. Recent surveys
have yielded estimates ranging from 112 (see Table 1) to 117 (see Table
2). Handlers ultimately market their almonds to customers in the U.S.
and abroad. As shown in Table 1, the Board estimates that about 27 of
112 handlers handle more than 10 million pounds each, and cumulatively
handle 82 percent of the crop.
Table 1.--Number of Handlers Categorized by Size
----------------------------------------------------------------------------------------------------------------
Between 1 Between 5
Less than 1 and 5 and 10 More than
million million million 10 million
lbs. lbs. lbs. lbs.
----------------------------------------------------------------------------------------------------------------
No. of handlers............................................. 41 28 16 27
Percent of crop handled..................................... 1 6 11 82
----------------------------------------------------------------------------------------------------------------
According to data provided by the Board, about 30 percent of
California almonds are sold domestically (about 300 million pounds). An
estimated 20 percent of the domestic shipments are in the form of
manufactured product--blanched, sliced, diced, or otherwise further
processed using thermal treatments. About 70 percent of California
almond production is exported to more than 80 countries worldwide.
Mexico and Canada account for approximately 5 percent of export
shipments. The quantities shipped by companies handling almonds vary
considerably. However, a limited number of handlers are responsible for
the majority of domestic and export shipments as shown in Table 2
below. Table 2 shows that 16 handlers are responsible for 90 percent of
domestic shipments. Many of the same handlers are among the 38 that are
responsible for 90 percent of exports. About 79 of an estimated 117
handlers are responsible for the remaining 10 percent of export
shipments.
Table 2.--Handler Shipment Summary
----------------------------------------------------------------------------------------------------------------
Export to Canada and All export (includes
Domestic (U.S.) Mexico 37,600,000 Canada and Mexico)
300,000,000 pounds pounds 700,000,000 pounds
----------------------------------------------------------------------------------------------------------------
No. of handlers responsible for 50 percent of 3 4 9
shipments....................................
No. of handlers responsible for 80 percent of 12 16 26
shipments....................................
No. of handlers responsible for 90 percent of 16 26 38
shipments....................................
----------------------------------------------------------------------------------------------------------------
This rule would add a new paragraph (b) for outgoing quality
control under Sec. 981.442 of the order's administrative rules and
regulations, whereby a mandatory program to reduce the potential for
Salmonella bacteria in almonds would be implemented under the order.
Specifically, handlers would have to subject their almonds to a
treatment process that achieves a minimum 4-log reduction in Salmonella
bacteria prior to shipment. The program would exempt handlers who ship
untreated almonds under a direct verifiable (DV) program to
manufacturers within the U.S., Canada, or Mexico who agree to treat the
almonds accordingly. The program would also exempt handlers who ship
untreated almonds to locations outside of the U.S., Canada, or Mexico.
All containers of untreated almonds shipped under the exemptions would
have to be prominently identified with the term ``unpasteurized.'' The
program would take effect for the 2007-08 crop year which 25 begins on
August 1, 2007. Authority for the program is provided in Sec.
981.42(b) of the order.
According to the Board, the costs to individual handlers to comply
with the program would vary considerably depending on their markets and
treatment method(s) chosen. Handlers could: (1) Install new equipment
in their processing lines to treat the almonds prior to shipment into
commercial channels; (2) outsource to another handler or an off-site
facility within California for treatment; (3) transfer their untreated
product to another handler who would treat the almonds prior to
shipment; (4) ship their untreated almonds to Board-approved DV users
or to locations outside of the U.S., Canada, or Mexico; or (5) use a
combination of these approaches.
In a handler survey conducted by the Board in March 2005 (to which
116 handlers handling almonds at that time responded), 86 handlers (74
percent) have their own facilities and/or equipment to process almonds;
the remainder have almonds processed on their behalf. Of those handlers
with their own facilities and/or equipment, 66 (77 percent of 86)
indicated they planned to install equipment to treat almonds while the
remaining 20 indicated they would outsource to a third party, or custom
processor. Again, the overall economic impact of the program would vary
based on the approach selected. Smaller handlers may choose to defer
purchasing equipment and send their almonds to an off-site facility for
treatment until more cost effective technologies are available.
Costs would also vary by treatment method. Some handlers may choose
to install PPO chambers at their facilities. Handler sources estimate
that typical installation costs for a PPO chamber range from $500,000
to $1,250,000. As with other technologies, overall cost would depend
upon how much infrastructure is in place in the processing facility as
well as the desired
[[Page 70688]]
capacity of the chambers. Actual treatment cost for handlers treating
their own product is approximately $0.03 per pound, varying with volume
and efficiencies. PPO treatment is currently available in the industry
on a contract basis at $0.04-$0.05 per pound (including transportation
to the facility).
Regarding steam technologies, handler sources estimate the
following equipment costs for in-line steam systems designed to treat
almonds at varying capacities from 1,000 pounds to over 30,000 pounds
of almonds per hour:
Table 3.--Estimated Equipment Costs for Steam Units for Differing Levels
of Treatment Capacity
------------------------------------------------------------------------
Capacity (pounds per hour) Equipment costs
------------------------------------------------------------------------
1,000.......................................... $100,000-$200,000
5,000.......................................... 300,000-325,000
7,500-15,000................................... 370,000-470,000
20,000-30,000.................................. 525,000-800,000
Over 30,000.................................... 600,000-1,000,000
------------------------------------------------------------------------
While treatment equipment costs would be the most significant
outlay, there would also be capital expenditures associated with
additional conveyance equipment, boilers, cooling systems, bins, and
possible expansion or construction of new buildings. Handler sources
estimate these costs to be an additional 50 percent of the treatment
equipment costs cited in Table 3, depending on capacity needs, and
assuming maximum throughput.
A typical system of 10 million pound annual capacity would be
equivalent to 22,000 pounds per hour, which falls in the 20,000 to
30,000 pound per hour range in Table 3. The treatment equipment costs
for that capacity range from $525,000 to $800,000. With an additional
50 percent for cost of other related equipment and facility expansion,
the costs range from $787,500 to $1,200,000. Handler sources suggest
that a figure near the upper end of that range, $1,125,000, is a good
point estimate of the cost for a 10,000,000 pound per year treatment
line.
An important step in assessing the financial impact of the proposed
mandatory treatment on handlers is to estimate the annualized equipment
cost and operating cost of treating the almonds to prevent Salmonella
contamination. This can be illustrated by additional computations, with
10,000,000 pounds per year serving as a representative level of
treatment capacity, as shown in Table 4, third line of column A. Table
4 also shows a range of costs across different levels of handler
treatment capacity.
Table 4.--Estimate of Average Annual Equipment and Operating Costs at Varying Levels of Handler Treatment Capacity
--------------------------------------------------------------------------------------------------------------------------------------------------------
D E Unit cost of equipment F G H Equipment plus
C Annual use at ------------- operating cost at
B Total cost of ----------------------------- -------------------------
A Handler annual capacity equipment cost equipment, 5 50% of Full Average 50% of Full
* year life ** capacity (c/ capacity operating capacity capacity
50% of A) (C/A) cost (D+F) (E+F)
--------------------------------------------------------------------------------------------------------------------------------------------------------
(Pounds) Cents per pound
----------------------------------------------------- -------------------------------------------------------------------
2,000,000........................................... $300,000 $69,292 $0.069 $0.035 $0.0035 $0.0725 $0.0385
5,000,000........................................... 487,500 112,600 0.045 0.023 0.0035 0.0485 0.0265
10,000,000.......................................... 1,125,000 259,845 0.052 0.026 0.0035 0.0555 0.0295
15,000,000.......................................... 1,500,000 346,460 0.046 0.023 0.0035 0.0495 0.0265
20,000,000.......................................... 1,650,000 381,106 0.038 0.019 0.0035 0.0415 0.0225
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Equipment cost estimates at varying capacity levels, including treatment chambers, plus an additional 50 percent for conveyors, other equipment and
extension of facilities.
** Annualized equipment cost is computed by dividing the equipment purchase cost by 4.3295, which is the Present Value of a $1 annuity for 5 Years
(estimated life of the equipment) at a 5 percent interest rate (estimated cost of capital).
Source for equipment and operating costs: Almond handlers.
To obtain the annual unit cost for installing a 10 million pound
capacity treatment line (an expenditure of $1,125,000 in column B), the
first step is to obtain the annualized equipment cost. The parameters
recommended by the handlers were a 5 year equipment life and a 5
percent cost of capital. The annual equipment use factor (4.3295) is
the present value of a $1 annuity for 5 years at 5 percent. Dividing
the total equipment expenditure of $1,125,000 by 4.3295 yields an
annualized equipment cost estimate of $259,845 (column C). Dividing
this figure by the annual 10,000,000 pound capacity yields a cost per
pound estimate of 2.6 cents (column E). If the treatment line ran at
half capacity, the equipment costs per pound would double to 5.2 cents
(column D).
This method of computing annualized equipment cost does not account
for the tax implications of annual equipment depreciation or for the
salvage value at the end of the equipment's useful life. In addition,
the useful life of many pieces of equipment may well be over 5 years.
Ongoing operational costs (electricity, etc.) are estimated by
handlers to range from $0.0027 to $0.0043 per pound, depending on the
system. The midpoint of this range ($0.0035) appears in column F.
The key results from Table 4 are the cost estimates per pound of
almonds treated, including both annualized equipment costs and
operating costs. The highest cost is 7.25 cents per pound for the
smallest handler (2 million pounds treated annually) operating at 50
percent capacity (column G). The lowest cost estimate is 2.25 cents per
pound for a handler treating 20 million pounds per year operating at
full capacity (column H). These costs can be put in context by
comparing them to almond grower prices as reported each year by the
NASS. For 2003 to 2005, grower prices averaged $2.07 per pound,
computed by dividing the value of production for those three years by
the three-year quantity of production. The treatment cost estimates per
pound in Table 4
[[Page 70689]]
range from 3 percent to 1 percent of the 2003-2005 average grower
price, and represent an even smaller proportion of the prices paid to
handlers when selling to almond users further down the marketing chain.
A key aspect of handler costs is the proportion of total capacity
at which a new production line would operate. Operating at higher
capacity spreads the equipment cost across a wider base. For a small
handler, investing in equipment with this level of capacity may only be
viable economically if the costs are spread over their entire
production run, rather than only applying costs to a small portion of
their production run. If they do not intend to run their entire
production through the treatment process, it may be more viable to
outsource the treatment. Costs of contract processing (i.e., batch
operations for steam processes or PPO treatment) are estimated to range
from $0.04 to $0.05 per pound. This estimate includes additional costs
associated with transporting almonds to a custom facility ($0.01 to
$0.015 per pound). For medium-sized and larger handlers, it may be more
cost effective to construct a treatment processing line, particularly
if they intend to immediately put a significant portion of their
production through the process.
Handler sources estimate that the cost of setting up a new oil
roast line is $300,000 to $600,000, with operating costs of $0.06 to
$0.10 per pound. A blanching line may cost upward of $1,500,000 to
$2,500,000 with an operating cost of approximately $0.12 to $0.22 per
pound. It is unlikely that handlers would select these technologies
unless they are already providing custom processed, value-added
products to their customers.
Regarding compliance and oversight costs, it is anticipated that
handlers who do not currently have thorough recordkeeping procedures in
place would likely have to invest approximately 40-80 person-hours to
develop their treatment plan. However, once this document has been
created, it would be updated on an annual basis, which would likely
involve less time. Validation of treatment systems is estimated to cost
from $1,000 to $3,000 per line, depending upon the complexity of the
equipment utilized. Treatment technology and equipment that have been
modified to the point where operating parameters such as time,
temperature, or volume, change must be revalidated.
Handler verification costs could vary, depending on whether the
handler was under an on-site program or an audit-based program. The fee
for an on-site program would be a minimum charge of $44.00 per hour
(with 1 hour required to treat 44,000 pounds), or $0.204 per
hundredweight, whichever is greater. The former is equivalent to $1.00
per thousand pounds treated. For an audit-based program, the fee would
be $78.00 per hour. Travel time for both programs would be charged at
$44.00 per hour and $0.34 per mile.
Examples of estimated handler verification costs are provided in
Tables 5 and 6 below:
Table 5.--Annual Handler Verification Costs: On-Site Program
----------------------------------------------------------------------------------------------------------------
Volume of almonds treated per year
----------------------------------------------------------
Audit cost by type 100,000 2 mill. 40 mill. 100 mill. 250 mill.
lbs lbs lbs lbs lbs
----------------------------------------------------------------------------------------------------------------
Hourly rate*......................................... $100 $2,000 $40,000 $100,000 $250,000
Per Cwt = $.204...................................... 204 4,080 81,600 204,000 510,000
----------------------------------------------------------------------------------------------------------------
* Hourly rate of $44/hour, with 1 hour required per 44,000 1bs of volume treated (equivalent to $1.00 per
thousand pounds treated).
Table 6.--Annual Handler Verification Costs: Audit-Based Program
----------------------------------------------------------------------------------------------------------------
Audit cost by hours required to complete audit*
-----------------------------------------------------------------------
1 2 3 4 5 6 7 8
----------------------------------------------------------------------------------------------------------------
Audit hourly cost = $78................. $78 $156 $234 $312 $390 $468 $546 $624
Auditor Transportation Cost**........... 32 32 32 32 32 32 32 32
Cost per individual audit............... 110 188 266 344 422 500 578 656
----------------------------------------------------------------------------------------------------------------
* Estimated hours per audit varies by volume treated annually: (up to 2 milllon pounds: 1-3 hours); (more than 2
but less than 40 million pounds: 2-5 hours); (40 million pounds or more: 3-8 hours).
** Estimated auditor transportation cost to each facility is approximately $32: $22 for travel time (\1/2\ hour
@ $44/hour) plus mileage reimbursement of $10 (30 miles @ $0.34 per mile).
The benefits associated with the proposed mandatory program are the
avoided costs of a Salmonella outbreak. These costs may vary depending
on several factors, including the quantity of product recalled, impact
on consumer sales, lost customer confidence, insurance costs, and
possible litigation. Using 2003-2005 average almond crop value as the
basis, a loss of 5 percent would be equal to approximately $102
million.
The Board considered various alternatives and options to a
mandatory treatment program. One option would be to take no action.
However, the Board concluded that this was not in the best interest of
the industry nor consumers. The Board believes that the industry should
provide consumers with a quality product. Taking no action when there
are viable alternatives could be significant in terms of the financial
well being of the industry should another outbreak occur that was
linked to almonds.
The Board also considered continuing its voluntary action plan
alone, without proposing a mandatory program. However, surveys
conducted by the Board indicate that not all handlers are implementing
the action plan. Thus, the Board concluded that a mandatory program is
in the best interest of the industry and consumers.
The Board also considered the effectiveness of testing for
Salmonella prior to shipment. During the 2001 and 2004 outbreaks,
significant amounts of testing occurred at the orchard level, in
hulling and shelling facilities, and at retail. However, it was
determined by the CDHS, University of California, Davis, and other
pathogen experts that testing cannot be relied upon as the only
[[Page 70690]]
measure to ensure that almonds are Salmonella free. Thus, the Board
concluded that testing alone was not a viable alternative.
The Board also explored the merits of requiring alternative log
reductions. As previously mentioned, the Board initially supported a 5-
log reduction, which was FDA's performance standard. However, a risk
assessment model demonstrated that a minimum 4-log reduction could
provide an appropriate level of consumer protection compared to a 5-log
reduction. Thus, the Board concluded that a minimum 4-log reduction was
an appropriate standard for almonds.
The Board also explored the merits of whether the DV program should
be temporary, whereby all almonds would be treated at the handler level
prior to shipment. The Board submitted an initial proposal to USDA in
February 2006 that would have ultimately required handlers to treat all
almonds prior to shipment, with the DV program being temporary.
However, concerns were raised by various parties, including
manufacturers, handlers, and foreign countries, regarding the temporary
nature of the DV program, and the requirement that all exported almonds
be treated prior to shipment. The Board ultimately revised its proposal
to remove the proviso regarding discontinuance of the DV program, to
allow untreated almonds to be shipped to locations outside the U.S.,
Canada, or Mexico, and to require that all containers of untreated
almonds be prominently identified with the term ``unpasteurized.''
This action would impose additional reporting and recordkeeping
burden on California almonds handlers, process authorities, almond
manufacturers, and DV program auditors. Process authorities,
manufacturers, and DV auditors would be required to submit respective
applications to the Board annually. Almond handlers would be required
to submit treatment plans to the Board annually. These new forms and a
sample ``Handler Treatment Plan'' are being submitted to the Office of
Management and Budget (OMB) for approval under OMB Control No. 0581-
NEW. Specific burdens for the three applications and handler treatment
plan are detailed later in this document in the section titled
Paperwork Reduction Act. 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.
Finally, USDA has not identified any relevant Federal rules that
duplicate, overlap, or conflict with this rule.
Additionally, the meetings were widely publicized throughout the
California almond industry and all interested persons were invited to
attend the meetings and participate in deliberations on all issues.
Between the summer of 2004 and the Board's August 2006, meeting, this
issue was addressed at an estimated 12 Board meetings, 18 Food Quality
and Safety Committee meetings, and well over 20 task force meetings.
All of these meetings were public meetings and all entities, both large
and small, were able to express views on this issue. Additionally, the
Board issued about 35 updates to handlers regarding its voluntary
action plan and progress towards its recommended mandatory program.
Finally, interested persons are invited to submit information on the
regulatory and informational impacts of this action on small
businesses.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at: http:/
/www.ams.usda.gov/fv/moab.html. Any questions about the compliance
guide should be sent to Jay Guerber at the previously mentioned address
in the FOR FURTHER INFORMATION CONTACT section.
A 45-day comment period is provided for interested persons to
comment on this proposal.The comment period is deemed appropriate
because the Board recommended that the mandatory program be in effect
for the 2007-08 crop year, which begins August 1, 2007. For that year,
handlers would have to submit their treatment plans to the Board by May
1, 2006. All written comments received will be considered before a
final determination is made on this matter.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35), the AMS announces its intention to request approval of a
new information collection under the marketing order for California
almonds.
Title: Almonds Grown in California, Marketing Order No. 981.
OMB No.: 0581-NEW.
Expiration Date of Approval: 3 years from OMB date of approval.
Type of Request: New collection.
Abstract: The information collection requirements in this request
are essential to carry out the intent of the Act, to provide the
respondents the type of service they request, and to administer the
California almond marketing order program, which has been operating
since 1950.
On August 22, 2006, the Board unanimously recommended adding a new
section to the order's administrative rules and regulations to
implement a mandatory program to help reduce the potential for
Salmonella in almonds. This document concerns the additional reporting
and recordkeeping requirements regarding this mandatory program, in
addition to the accompanying regulation previously discussed. Almond
handlers would be required to submit annual treatment plans to the
Board and inspection agency regarding how they plan to treat their
almonds to reduce the potential for Salmonella. Entities interested in
being almond process authorities that would validate technologies would
have to submit an application to the Board on ABC Form No. 51,
``Application for Process Authority for Almonds.'' Manufacturers in the
U.S., Canada, and Mexico interested in being approved to accept
untreated almonds, provided they agree to treat the almonds themselves
under the Board's DV program, would have to submit an application to
the Board on ABC Form No. 52, ``Application for Direct Verifiable (DV)
Program for FurtherProcessing of Untreated Almonds.'' Entities
interested in being approved DV user auditors would have to submit an
application to the Board on ABC Form No. 53, ``Application for Direct
Verifiable (DV) Program Auditors.'' This information would be needed by
the Board to properly administer the mandatory Salmonella treatment
program for the California almond industry.
The information collected is used only by authorized
representatives of USDA, including AMS, Fruit and Vegetable Programs
regional and headquarters' staff, and authorized employees and agents
of the Board. Authorized Board employees, agents, and the industry are
the primary users of the information and AMS is the secondary user.
Handler Treatment Plan
Estimate of Burden: Public reporting burden for this collection of
information is estimated to be no more than 27.3 hours per response (80
hours per response for the first year of regulation, and 1 hour per
response each year thereafter) .
Respondents: Almond handlers.
Estimated Number of Respondents: 115.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 3,143 hours per year
(9,200 hours for the first year of
[[Page 70691]]
regulation, and 115 hours for each year thereafter).
Application for Process Authority for Almonds--ABC Form No. 51
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 2 hours per response.
Respondents: Persons or organizations that would like to qualify to
be Board-approved process authorities that validate treatments and
technologies.
Estimated Number of Respondents: 25.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 50 hours.
Application for Direct Verifiable (DV) Program for FurtherProcessing of
Untreated Almonds--ABC Form No. 52
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 1 hour per response.
Respondents: Manufacturers who would like to qualify to participate
in the Board's direct verifiable program.
Estimated Number of Respondents: 53.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 53 hours.
Application for Direct Verifiable (DV) Program Auditors--ABC Form No.
53
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 1 hour per response.
Respondents: Entities that would like to qualify as auditors under
the DV program.
Estimated Number of Respondents: 50.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 50 hours.
Comments: Comments are invited on: (1) Whether the proposed
collection of information is necessary for the proper performance of
the functions of the agency, including whether the information will
have practical utility; (2) the accuracy of the agency's estimate of
the burden of the proposed collection of information, including the
validity of the methodology and assumptions used; (3) ways to enhance
the quality, utility, and clarity of the information to be collected;
and (4) ways to minimize the burden of the collection of information on
those who are to respond, including the use of appropriate automated,
electronic, mechanical, or other technological collection techniques or
other forms of information technology.
Comments should reference OMB No. 0581-NEW and the California
almond marketing order, and be sent to the USDA in care of the Docket
Clerk at the address above. All comments received will be available for
public inspection during regular business hours at the same address.
All responses to this notice will be summarized and included in the
request for OMB approval. All comments will also become a matter of
public record.
The AMS is committed to complying with the E-Government Act, to
promote the use of the Internet and other information technologies to
provide increased opportunities for citizen access to Government
information and services, and for other purposes.
It is estimated that handlers and manufacturers may spend between
20-100 hours annually maintaining records pertaining to this rule.
Using a figure of $10 per hour (a sum deemed reasonable, should
handlers and manufacturers be compensated for this time), it is
estimated that the recordkeeping burden would cost handlers and
manufacturers between $200-$1,000 per year. Additionally, handler and
manufacturers would have to maintain related records and documentation
for two full years following the end of the crop year.
A 60-day comment period is provided to allow interested persons to
comment on this proposed information collection.
List of Subjects in 7 CFR Part 981
Almonds, Marketing agreements, Nuts, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, 7 CFR part 981 is
proposed to be amended as follows:
PART 981--ALMONDS GROWN IN CALIFORNIA
1. The authority citation for 7 CFR part 981 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. Section 981.442 is amended by adding paragraph (b) to read as
follows:
Sec. 981. 442 Quality control.
* * * * *
(b) Outgoing. Pursuant to Sec. 981.42(b), beginning with the 2007-
08 crop year, which begins on August 1, 2007, and except as provided in
Sec. 981.13 and in paragraph (6) of this section, handlers shall
subject their almonds to a treatment process or processes prior to
shipment to reduce potential Salmonella bacteria contamination in
accordance with the provisions of this section.
(1) Treatment process. Acceptable treatment processes shall utilize
technologies that have been determined to achieve in total a minimum 4-
log reduction of Salmonella bacteria in almonds, pursuant to a letter
of determination issued by the Food and Drug Administration(FDA), or
acceptance by a scientific review panel as identified by the Board
(Technical Expert Review Panel or ``TERP''). Such panel shall be
approved at least annually by the Board prior to the beginning of each
crop year, or as needed during the crop year.
(2) On-site versus off-site treatment. Handlers shall subject
almonds to a treatment process or processes prior to shipment either at
their handling facility (on-site), or at an off-site treatment facility
located within the production area. Transportation of almonds by a
handler to an off-site treatment facility shall not be deemed a
shipment.
(3) Validation by process authorities. Handlers shall only use, or
transport their almonds to off-site treatment facilities that use
treatment processes that have been validated by a Board-approved
process authority. Valida