Kiwifruit Grown in California; Change in Reporting Requirements, 46306-46310 [E9-21657]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 74, Number 173 (Wednesday, September 9, 2009)]
[Rules and Regulations]
[Pages 46306-46310]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-21657]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 920

[Doc. No. AMS-FV-08-0017; FV08-920-2 FR]


Kiwifruit Grown in California; Change in Reporting Requirements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule changes the reporting requirements currently 
prescribed under the marketing order that regulates the handling of 
kiwifruit grown in California. The order is administered locally by the 
Kiwifruit Administrative Committee (Committee). This rule requires 
handlers who ship 100,000 or more trays per season to file weekly 
shipment and price information with the Committee. Shipments of organic 
kiwifruit are exempt from this requirement. The Committee will use this 
information to prepare its marketing policy statements and annual 
reports and to provide timely information to the industry to assist 
them in making

[[Page 46307]]

marketing decisions throughout the season.

DATES: Effective Date: September 10, 2009.

FOR FURTHER INFORMATION CONTACT: Debbie Wray, Marketing Specialist, 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: 
Debbie.Wray@ams.usda.gov or Kurt.Kimmel@ams.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@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing 
Order No. 920 as amended (7 CFR part 920), regulating the handling of 
kiwifruit grown in California, hereinafter referred to as the 
``order.'' The order is effective under the Agricultural Marketing 
Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter 
referred to as the ``Act.''
    The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Order 12866.
    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This rule is not intended to have retroactive 
effect.
    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. A 
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 final rule adds a new reporting requirement and form to those 
currently specified in the order's administrative rules and 
regulations. This change will allow the Committee to collect weekly 
shipment and price information from kiwifruit handlers who ship 100,000 
or more trays per season. Under this regulation, handlers will not be 
required to provide weekly shipment and price information on shipments 
of organic kiwifruit. The information collected will be used by the 
Committee to prepare its marketing policy statement as required under 
the order. The information will also be used to generate timely reports 
for the industry as a whole to use in making marketing decisions 
throughout the season. This rule was recommended by the Committee at 
its meetings on September 6, 2007; January 30, 2008; and April 22, 
2008.
    Section 920.34 of the order requires the Committee to prepare an 
annual report for presentation to the Secretary and the industry. The 
annual report provides a cumulative review of industry statistics as 
well as information about program activities and expenditures. Section 
920.50 of the order requires the Committee to prepare an annual 
marketing policy report for submission to the Secretary. The marketing 
policy describes expected kiwifruit production, quality, and marketing 
conditions. Along with other pertinent information, the marketing 
policy provides the basis for the recommendation of appropriate 
kiwifruit handling regulations for the upcoming season. Section 920.60 
of the order authorizes the Committee to require handlers to file 
reports and provide other information as may be necessary for the 
Committee to perform these duties. The provisions of Sec.  920.60(c) 
require that handlers maintain copies of all kiwifruit receipts and 
disposals for at least two succeeding fiscal years to verify their 
shipping reports.
    The Committee's current reporting requirements are specified in 
Sec.  920.160 of the order's administrative rules and regulations. This 
section includes requirements that handlers submit shipment reports and 
the Kiwifruit Inventory Shipping System (KISS) form, which consists of 
three reports: KISS/Add Inventory, KISS/Deduct Inventory, and KISS/
Shipment.
    Handlers who ship fewer than 10,000 trays per season are only 
required to file the shipment report twice per year and are not 
required to file the KISS form. Handlers who ship 10,000 trays or more 
per season are required to file the shipment report monthly and all 
three sections of the KISS form monthly or semi-monthly during certain 
months. The Committee provides forms to assist handlers with supplying 
the required information.
    Kiwifruit shipments generally begin in September and continue 
through July. The Committee requires handlers who ship 10,000 trays or 
more to file their initial shipment reports by the fifth day of the 
month following the month in which their first shipments are made. This 
report is used to track shipments by type, weight, and destination.
    The Committee has established November 5 as the deadline for filing 
the initial KISS reports. Subsequent reports are to be filed on the 
fifth day of each month throughout the season, with biweekly reports 
required for the months of December, January, and February. The KISS/
Shipment report is used to report shipments by fruit size and pack 
type. The KISS/Add Inventory and KISS/Deduct Inventory reports are used 
to report changes in inventory.
    This final rule revises Sec.  920.160 by adding a new reporting 
requirement and form. Under the new regulation, handlers who ship 
100,000 tray equivalents or more per season will be required to submit 
weekly shipment and price data on the new KISS Price/Shipment report 
form. The information collected on the KISS Price/Shipment report will 
include data on gross f.o.b. sales and the total number of containers 
shipped by pack, fruit size, grade, and market destination. Handlers 
submitting the KISS Price/Shipment report will no longer be required to 
submit the existing shipment report or KISS/Shipment report as that 
information will be collected on the new KISS Price/Shipment report. 
However, handlers submitting the KISS Price/Shipment report will still 
be responsible for filing the KISS/Add Inventory and KISS/Deduct 
Inventory reports.
    The Committee recommended the 100,000 tray threshold because 
handlers shipping 100,000 trays or more account for approximately 90% 
of the production area's total shipments in a season. Committee members 
believe that information on such shipments will provide a sufficiently 
broad picture of ongoing marketing conditions. Information about the 
volume of kiwifruit in the current channels of commerce will be 
compiled by the Committee and reported to the industry. The Committee 
believes that such information provided throughout the season will 
benefit the industry as a whole when making marketing decisions.
    While information from handlers with total shipments of fewer than 
100,000 trays each season might not be significant on a weekly basis, 
such information will continue to be collected from those handlers on 
the other existing shipment and KISS

[[Page 46308]]

reports and will be used to generate the Committee's marketing policy 
statements and annual reports.
    The previous reporting requirements made no provisions for 
collecting information on kiwifruit prices. The Committee believes that 
the industry as a whole will benefit from receiving gross f.o.b. sales 
information that will be collected by the Committee each week and used 
to generate timely industry reports. In the past, the Committee has 
used information from other sources to prepare their mandatory reports 
and provide updates to the industry, but Committee members feel that 
information from such sources no longer meets their needs. For example, 
one voluntary industry organization collects and reports weekly price 
information from participating handlers. Some industry members have 
found this information helpful in making marketing decisions in the 
past. However, Committee members report that the number of 
participating handlers has declined and that the information collected 
from the remaining participants may not provide as complete a picture 
of ongoing marketing conditions as the Committee would like. The 
Committee believes that compiling sales information from all large-
volume kiwifruit handlers in the production area will be more 
reflective of--and will be of greater benefit to--the industry as a 
whole.
    There can be significant differences in the price of kiwifruit 
throughout the season, including great fluctuations in prices from week 
to week. The Committee believes that having accurate and timely sales 
information will help to reduce these price fluctuations and promote 
orderly marketing, resulting in increased grower returns.
    Under the change, handlers will not be required to report shipments 
of organically-produced (organic) kiwifruit on the new KISS Price/
Shipment report. There are only a small number of handlers who handle 
organic kiwifruit, representing a small percentage of total shipments. 
Organic kiwifruit has its own unique marketing conditions with a 
pricing structure that differs from that of conventionally-produced 
(conventional) kiwifruit. Therefore, the Committee recommended that 
shipments of organic kiwifruit should be exempt from the new reporting 
requirements. However, organic kiwifruit shipments will continue to be 
reported as required on the appropriate existing Committee forms.
    Kiwifruit handlers who ship between 10,000 and 100,000 trays or 
tray equivalents will continue to report by submitting monthly shipping 
reports and the existing KISS forms, including the KISS/Shipment 
reports. The reporting requirements for handlers shipping fewer than 
10,000 tray equivalents will also remain the same. Also, the reporting 
exemption for minimum quantities of kiwifruit handled under certain 
conditions specified in Sec.  920.110(b) will remain unchanged.
    For the new KISS Price/Shipment report, the shipping week will be 
defined as Sunday through Saturday. Reports for each shipping week will 
be due no later than 5:00 p.m. (the close of business) on Tuesday of 
the following week to insure timely processing of current shipment and 
price information. Handlers will begin reporting following the first 
week of the season in which they have shipments. In weeks when no 
shipments are made, each handler will still be required to file a 
report indicating that no shipments were made during the reporting 
period. This will continue until the handler files a final report for 
the season. The new reporting form will have a space for handlers to 
indicate when they are filing their final reports of the season. The 
price data and shipping information received from all affected handlers 
will be compiled by the Committee and presented to the industry 
throughout the season in the form of general reports. At the end of 
each year, the information collected will be summarized and used to 
prepare the Committee's annual reports and marketing policy statements.
    This rule also makes a correction to Sec.  920.160(b). A final rule 
published in the Federal Register on December 10, 1996 [61 FR 64959], 
made changes to Sec.  920.160(b) and inadvertently removed part of the 
section. Specifically, the last sentence of Sec.  920.160(b), which 
specifies the frequency with which the KISS reports shall be filed as 
well as what information shall be included, was removed. This rule 
restores the language that was inadvertently removed.
    Section 8e of the Act provides that when certain domestically 
produced commodities, including kiwifruit, are regulated under a 
Federal marketing order, imports of that commodity must meet the same 
or comparable grade, size, quality, and maturity requirements. This 
rule only changes the reporting requirements under the domestic 
handling regulations. No changes to the import regulations will be 
made.

Final Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (5 U.S.C. 601-612) (RFA), the Agricultural Marketing Service (AMS) 
has considered the economic impact of this action on small entities. 
Accordingly, AMS has prepared this final regulatory flexibility 
analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and rules issued thereunder, are unique in that 
they are brought about through group action of essentially small 
entities acting on their own behalf.
    Small agricultural service firms are defined by the Small Business 
Administration (SBA) (13 CFR 121.201) as those having annual receipts 
of less than $7,000,000, and small agricultural producers are defined 
as those having annual receipts of less than $750,000.
    Based on Committee data, there are approximately 30 handlers of 
kiwifruit subject to regulation under the marketing order and 
approximately 220 kiwifruit growers in the production area. According 
to information provided by the Committee, approximately three handlers 
handle only organic kiwifruit, and four handle both conventional and 
organic kiwifruit.
    The National Agricultural Statistical Service (NASS) reported total 
California kiwifruit production for the 2008-09 season at 23,000 tons 
with an average price of $888 per ton. Based on the average price and 
shipment information provided by the NASS and the Committee, it could 
be concluded that the majority of kiwifruit handlers would be 
considered small businesses under the SBA definition. In addition, 
based on kiwifruit production and price information, as well as the 
total number of California kiwifruit growers, the average annual grower 
revenue is less than $750,000. Thus, the majority of California 
kiwifruit producers may also be classified as small entities.
    This final rule changes the reporting requirements currently 
prescribed under the order. This rule adds a new reporting requirement 
and form to the reporting requirements, which will allow the Committee 
to collect weekly shipment and price information from kiwifruit 
handlers who ship 100,000 or more trays per season. Handlers will not 
be required to report information on shipments of organic kiwifruit on 
this new form but will continue to report shipments of organic 
kiwifruit on existing Committee forms. This change will help the 
Committee develop its annual reports and marketing policy statements as 
required under the order and will enable the Committee to provide 
timely information to the industry as a whole to assist with

[[Page 46309]]

marketing decisions. This rule revises Sec.  920.160, which specifies 
the reporting requirements. In addition to the new shipping and price 
information collection, this rule restores a portion of Sec.  
920.160(b) that was inadvertently removed from the regulation during a 
previous rulemaking action. Authority for the collection of shipment 
and other information is provided in Sec.  920.60 of the order.
    Requiring shipment and price reports on a weekly basis will impose 
an additional reporting burden on handlers who handle 100,000 or more 
tray equivalents of kiwifruit. However, this data is already being 
recorded and maintained by most handlers as a routine part of their 
business. Consequently, any additional costs associated with this 
change are expected to be minimal. Also, the benefits of having timely 
information regarding shipments and price are expected to outweigh any 
costs associated with the increase in reporting burden. While this 
change will impose an additional reporting burden on those handlers 
required to submit the KISS Price/Shipment report, those handlers will 
no longer be required to submit the shipment report or the KISS/
Shipment report, which will offset somewhat the increase in burden. 
Further, the benefits of this rule are expected to be equally available 
to all industry members, regardless of their size.
    The Committee discussed alternatives to this action, including 
making no changes to the reporting requirements. However, the Committee 
believes that collecting weekly shipment and price data will provide 
valuable information to the industry. The Committee also considered 
using weekly sales information collected by other entities. However, 
the Committee believes including the information collection under the 
order's rules and regulations will make the reports they generate more 
accurate and more reflective of the marketing conditions throughout the 
industry. Therefore, both alternatives were rejected.
    This final rule establishes a new reporting requirement. This 
action also requires a new Committee form, the KISS Price/Shipment 
report. Therefore, this final rule will impose an additional reporting 
burden on handlers who handle 100,000 tray equivalents or more of 
kiwifruit. The new form has been submitted to the Office of Management 
and Budget (OMB) under OMB No. 0581-NEW. Upon approval of this new form 
by OMB, it will be merged with the forms currently approved for use 
under OMB No. 0581-0189, Generic OMB Fruit Crops.
    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. USDA has not 
identified any relevant Federal rules that duplicate, overlap or 
conflict with this rule.
    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.
    Further, the Committee's meetings were widely publicized throughout 
the kiwifruit industry and all interested persons were invited to 
attend the meetings and participate in Committee deliberations on all 
issues. Like all Committee meetings, the September 6, 2007; January 30, 
2008; and April 22, 2008; meetings were public meetings and all 
entities, both large and small, were able to express views on this 
issue.
    A proposed rule concerning this action was published in the Federal 
Register on June 4, 2009 (74 FR 26806). A notice of the rule was 
published in the Committee's electronic newsletter that is distributed 
to all kiwifruit handlers. Also, the rule was made available through 
the Internet by USDA and the Office of the Federal Register. A 60-day 
comment period, ending August 3, 2009, was provided for interested 
persons to submit comments on this proposed rule, including the 
regulatory and informational impacts of this action on small 
businesses. No comments were received.
    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/AMSv1/ams.fetchTemplateData.do?template=TemplateN&page=MarketingOrdersSmallBusinessGuide. Any questions about the compliance guide should be sent to 
Jay Guerber at the previously mentioned address in the FOR FURTHER 
INFORMATION CONTACT section.
    After consideration of all relevant matters presented, including 
the information and recommendation submitted by the Committee and other 
available information, it is hereby found that this rule, as 
hereinafter set forth, will tend to effectuate the declared policy of 
the act.
    It is further found that good cause exists for not postponing the 
effective date of this rule until 30 days after publication in the 
Federal Register (5 U.S.C. 553) because the Committee requires time to 
prepare and mail handler report packets, which should include the new 
KISS Price/Shipment Report form, prior to the beginning of shipments 
for the 2009-10 crop year. In addition, handlers are aware of this 
rule, which was recommended at Committee meetings on September 6, 2007; 
January 30, 2008; and April 22, 2008. Also, a 60-day comment period was 
provided in the proposed rule.

List of Subjects in 7 CFR Part 920

    Kiwifruit, Marketing agreements, Reporting and recordkeeping 
requirements.


0
For the reasons set forth in the preamble, 7 CFR part 920 is amended as 
follows:

PART 920--KIWIFRUIT GROWN IN CALIFORNIA

0
1. The authority citation for 7 CFR part 920 continues to read as 
follows:

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


Sec.  920.160  [Amended]

0
2. Sec.  920.160 is amended by revising the first sentence of paragraph 
(a), revising paragraph (b), and adding paragraphs (d) and (e) to read 
as follows:


Sec.  920.160  Reports.

    (a) When requested by the Kiwifruit Administrative Committee, each 
shipper who ships kiwifruit, except as provided in paragraph (e) of 
this section, shall furnish a report of shipment and inventory data to 
the committee no later than the fifth day of the month following such 
shipment, or such other later time established by the committee: 
Provided, That each shipper who ships less than 10,000 trays, or the 
equivalent thereof, per fiscal year and has qualified with the 
committee shall furnish such report of shipment and inventory data to 
the committee twice per fiscal year. * * *
    (b) Kiwifruit Inventory Shipping System (KISS) form. Each handler, 
except such handlers that ship less than 10,000 trays, or the 
equivalent thereof, per season and have qualified with the committee, 
shall file with the committee the initial Kiwifruit Inventory Shipment 
System (KISS) form, which consists of three sections ``KISS/Add 
Inventory,'' ``KISS/Deduct Inventory,'' and ``KISS/Shipment,'' on or 
before November 5th, or such other later time as the committee may 
establish. Subsequent KISS forms, including all three sections, shall 
be filed with the committee by the fifth day and again by the twentieth 
day of each calendar month, or such other later time as the committee 
may establish, and will contain the following information:

[[Page 46310]]

    (1) The beginning inventory of the handler by size and container 
type;
    (2) The quantity of fruit the handler lost in repack and repacked 
into other container types;
    (3) The total domestic and export shipments of the handler by size 
and container type; and
    (4) Any other adjustments which increase or decrease posted handler 
inventory.
* * * * *
    (d) KISS Price/Shipment report. Each handler who ships 100,000 or 
more trays, or the equivalent thereof, per season, shall file the KISS 
Price/Shipment report with the committee. Handlers are not required to 
report organic kiwifruit shipments on this report. The handler shall 
file the report weekly following the first week he or she makes 
shipments and shall continue filing reports until he or she submits a 
final report for the season. Each such report shall be filed with the 
committee no later than 5:00 p.m. (the close of business) on the 
Tuesday immediately following the shipping week. For the purpose of 
this subsection, the shipping week is defined as Sunday through 
Saturday. The report shall show:
    (1) The company name, contact person, and phone number of the 
handler;
    (2) Weekly period covered by the report;
    (3) Total fresh market shipments and gross f.o.b. sales of 
kiwifruit by pack style and size; and
    (4) Total fresh market shipments and gross f.o.b. sales to export 
markets by pack style and size.
    (e) Handlers who file the KISS Price/Shipment report specified in 
paragraph (d) of this section are exempt from filing the shipping 
report specified in paragraph (a) of this section and the KISS/Shipment 
report specified in paragraph (b) of this section.

    Dated: September 2, 2009.
Rayne Pegg,
Administrator, Agricultural Marketing Service.
[FR Doc. E9-21657 Filed 9-8-09; 8:45 am]
BILLING CODE 3410-02-P