Kiwifruit Grown in California; Proposed Amendments to Marketing Order 920 and Referendum Order, 46823-46829 [2013-18627]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 78, Number 149 (Friday, August 2, 2013)]
[Proposed Rules]
[Pages 46823-46829]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-18627]


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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.

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Federal Register / Vol. 78, No. 149 / Friday, August 2, 2013 / 
Proposed Rules

[[Page 46823]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 920

[Doc. No. AMS-FV-12-0008; FV12-920-1 PR]


Kiwifruit Grown in California; Proposed Amendments to Marketing 
Order 920 and Referendum Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule and referendum order.

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SUMMARY: This rule proposes five amendments to Marketing Order No. 920 
(order), which regulates the handling of kiwifruit grown in California, 
and provides growers with the opportunity to vote in a referendum to 
determine if they favor the changes. The amendments are based on 
proposals by the Kiwifruit Administrative Committee (Committee or KAC), 
which is responsible for the local administration of the order. The 
five amendments would provide authority to recommend and conduct 
production and postharvest research, to recommend and conduct market 
research and development projects, to receive and expend voluntary 
contributions, to specify that recommendations for production research 
and market development be approved by eight members of the Committee, 
and to update provisions regarding alternate members' service on the 
Committee. These amendments are intended to improve administration of 
and compliance with the order, as well as reflect current industry 
practices.

DATES: The referendum will be conducted from August 26, 2013, through 
September 6, 2013. The representative period for the purpose of the 
referendum is August 1, 2012, through July 31, 2013.

FOR FURTHER INFORMATION CONTACT: Kathleen Bright, Marketing Order and 
Agreement Division, Fruit and Vegetable Program, AMS, USDA, 1400 
Independence Avenue SW., Stop 0237, Washington, DC 20250-0237; 
Telephone: (202) 205-2830, Fax: (202) 720-8938, or Email: 
Kathleen.Bright@ams.usda.gov or Michelle Sharrow, Marketing Order and 
Agreement Division, Fruit and Vegetable Program, AMS, USDA, 1400 
Independence Avenue SW., Stop 0237, Washington, DC 20250-0237; 
Telephone: (202) 720-9921, Fax: (202) 720-8938 or Email: 
Michelle.Sharrow@ams.usda.gov.
    Small businesses may request information on complying with this 
regulation by contacting Jeffrey Smutny, Marketing Order and Agreement 
Division, Fruit and Vegetable Program, AMS, USDA, 1400 Independence 
Avenue SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-
2491, Fax: (202) 720-8938, or Email: Jeffrey.Smutny@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order 
No. 920, as amended (7 CFR part 920), regulating the handling of 
kiwifruit produced 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.'' Section 608c(17) of the Act and the 
applicable rules of practice and procedure governing the formulation of 
marketing agreements and orders (7 CFR part 900) authorize amendments 
of the order through this informal rulemaking action.
    The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Order 12866.
    This proposal has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule is not intended to have retroactive effect. 
This rule shall not be deemed to preclude, preempt, or supersede any 
research and market development provisions of any State program 
covering California kiwifruit.
    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 no later than 20 days after the date of 
entry of the ruling.
    Section 1504 of the Food, Conservation, and Energy Act of 2008 
(2008 Farm Bill) (Pub. L. 110-246) amended section 18c(17) of the Act, 
which in turn required the addition of supplemental rules of practice 
to 7 CFR Part 900 (73 FR 49307; August, 21, 2008). The amendment of 
section 18c(17) of the Act and additional supplemental rules of 
practice authorize the use of informal rulemaking (5 U.S.C. 553) to 
amend Federal fruit, vegetable, and nut marketing agreements and 
orders. USDA may use informal rulemaking to amend marketing orders 
based on the nature and complexity of the proposed amendments, the 
potential regulatory and economic impacts on affected entities, and any 
other relevant matters.
    AMS has considered these factors and has determined that the 
amendment proposals are not unduly complex and the nature of the 
proposed amendments is appropriate for utilizing the informal 
rulemaking process to amend the order. A discussion of the potential 
regulatory and economic impacts on affected entities is discussed later 
in the ``Final Regulatory Flexibility Analysis'' section of this rule.
    The proposed amendments were unanimously recommended by the 
Committee following deliberations at public meetings on July 12 and 
December 13, 2011. A proposed rule soliciting comments on the proposed 
amendments was issued on February 4, 2013, and published in the Federal 
Register on February 8, 2013 (78 FR 9331). Three comments were 
received. Two comments were supportive of the proposed amendments. The 
third comment was supportive of some of the proposed amendments and not 
supportive of others. These comments will be addressed later in this 
document. AMS will conduct a producer referendum to determine

[[Page 46824]]

support for the proposed amendments. If appropriate, a final rule will 
then be issued to effectuate the amendments favored by producers in the 
referendum.
    The Committee's proposed amendments would amend the marketing order 
by: (1) Adding authority to recommend and conduct production and 
postharvest research, (2) adding authority to recommend and conduct 
market research and development projects, (3) adding authority to 
receive and expend voluntary contributions, (4) amending procedures to 
specify that recommendations for production research and market 
development be approved by eight members of the Committee, and (5) 
clarifying provisions regarding alternate members' service on the 
Committee.
    In addition to these proposed amendments, AMS proposes to make any 
additional changes to the order as may be necessary to conform to any 
amendment that may result from this rulemaking action.

Proposal Number 1--Production and Postharvest Research

    This proposal would add section 920.47 to authorize production and 
postharvest research to assist or improve the efficient production and 
postharvest handling of kiwifruit. Adding this authority would provide 
the Committee with the ability to conduct production research, food 
quality and handling research, and to distribute that information. 
These functions were previously conducted by the California Kiwifruit 
Commission (CKC), a State of California program, which ceased to exist 
on September 30, 2011.
    Kiwifruit is a relatively new crop to California with the first 
commercial crop produced in 1971. The CKC was established in 1979, five 
years prior to the kiwifruit marketing order. The CKC performed 
marketing research and development programs for the industry. When the 
kiwifruit marketing order was established in 1984, its main purpose was 
to implement quality and pack and container regulations. The two 
programs worked independently, and the industry chose not to add 
authority for production and postharvest research to the Federal order 
at inception to avoid duplication. According to the Committee, industry 
leaders believed at that time that having programs that performed 
separate and distinct functions would best serve the interests of the 
kiwifruit industry.
    Over the past two decades, California kiwifruit acreage and the 
number of growers have decreased, from a peak in 1992 of 7,300 
producing acres and 690 producers to 4,200 producing acres and 175 
growers today, according to data from the National Agricultural 
Statistics Service and the Committee. As a result, the industry has 
reduced programs supported by industry assessments. In the early 2000s, 
industry leaders began to evaluate industry programs in an effort to 
determine which ones were the most beneficial and actively sought ways 
to make the administration of these programs more cost efficient and 
effective. The need for production and postharvest research is 
repeatedly identified as one of the most important programs to the 
industry, along with market development programs. According to the 
Committee, there is a general consensus throughout the industry that 
the future administration of these activities should be done through 
one program, and because there is widespread support to maintain the 
quality and pack and container requirements, that program should be the 
Federal marketing order.
    The Committee believes that for the California kiwifruit industry 
to remain productive and competitive, management practices must 
continue to evolve. It further believes that production and postharvest 
research was one of the most beneficial activities performed by the 
CKC. Over the years, these activities helped growers become 
knowledgeable on how to establish vineyards, prune, thin, irrigate, 
pollinate, fertilize, manage diseases, harvest, store and transport 
kiwifruit. According to the Committee, the industry wants the KAC to 
conduct these activities since the CKC no longer exists.
    The Committee believes production and postharvest research would 
have a direct and positive impact on producers, handlers, and 
consumers. Diseases such as the infectious vine-killing bacterial 
disease known as PSA, confirmed in New Zealand in 2010, decimated 28% 
of New Zealand's orchards. With no current organization equipped to 
facilitate research activities, the same could happen to California 
kiwifruit. Production research projects sponsored by the Committee 
could help develop cultural practices to reduce the likelihood of a 
similar incident in the United States. In addition, improving food 
quality and handling practices is important to producers, handlers, and 
consumers. The industry desires to take a proactive stance to be 
prepared to address any challenges in this area.
    Also, without a research organization, the Committee is unable to 
participate in the joint global research effort with the International 
Kiwifruit Organization (IKO). The IKO jointly funds research activities 
with other organizations that benefit kiwifruit producers and consumers 
on a global basis. Approval of this proposal would ensure the 
industry's ability to participate in these activities.
    Adding production research to the order is expected to improve 
returns for producers because it will enable the industry to develop 
new technologies to increase yields, improve fruit quality and 
production, and facilitate postharvest research.
    There is a potential cost to handlers of increased assessments to 
fund projects. However, the KAC would weigh the costs against the 
potential benefits. The USDA would review and approve activities prior 
to their undertaking. In addition, the KAC would evaluate activities 
after they are completed to ensure that the goals and objectives are 
met.
    For the reasons stated above, it is proposed that section 920.47 be 
added to authorize production and postharvest research to assist or 
improve the efficient production and postharvest handling of kiwifruit.

Proposal Number 2--Market Research and Development

    This proposal would add section 920.48 to authorize marketing 
research and development programs to promote, assist, or improve the 
marketing, distribution, and consumption of kiwifruit. Adding this 
authority would enable the industry to continue to conduct these 
activities that were previously conducted by the CKC.
    The California kiwifruit industry, as a whole, has undergone many 
changes since the inception of the marketing order in 1984. The 
industry experienced significant growth in the 1980s, but acreage and 
production levels have since declined. According to the Committee, this 
has caused industry leaders to evaluate which programs are most 
beneficial to the industry and the most efficient way to conduct such 
programs. Through an industry vote, the CKC was discontinued in 2011, 
as previously discussed. The Committee believes that marketing research 
and development activities previously conducted by the CKC are 
beneficial to the industry, but can be conducted under the Federal 
marketing order. This also creates overall efficiencies by using a 
single industry organization to carry out the various functions 
previously conducted by two organizations. Therefore, the Committee 
supports adding marketing research and development authority to the 
order.
    Providing authority for the Committee to conduct marketing research 
and

[[Page 46825]]

development programs would assist the industry with the marketing, 
distribution, and consumption of kiwifruit. The Committee could 
undertake marketing research and development activities such as 
conducting market and consumer surveys, which could identify consumer 
and market preferences. Further, adding this authority to the marketing 
order would enable the Committee to apply for Market Access Program 
(MAP) funding from the USDA and engage in jointly funded export 
marketing research and development activities. Participation in jointly 
funded programs including MAP was identified as a priority by the 
Committee in its strategic planning in the early 2000s. These types of 
activities would be designed to increase the demand and sales of 
California kiwifruit, with the intent of increasing returns to 
producers.
    There is a potential cost to handlers of increased assessments to 
fund projects. However, the KAC would weigh the costs against the 
potential benefits. The USDA would review and approve activities prior 
to their undertaking. The KAC would evaluate activities after they are 
completed to ensure that the goals and objectives are met. In addition, 
the Federal Agricultural Improvement and Reform Act of 1996 (1996 Farm 
Bill) (Pub. L. 104-127) requires Federal marketing order promotion 
activities to be evaluated by an independent party on a regular basis 
to ensure they are effective. Any such programs conducted under the 
order would be evaluated to help ensure that the benefits exceed the 
costs.
    For the reasons stated above, it is proposed that section 920.48 be 
added to authorize marketing research and development programs to 
promote, assist, or improve the marketing, distribution and consumption 
of kiwifruit.

Proposal Number 3--Voluntary Contributions

    This proposal would add section 920.45 to authorize the Committee 
to receive and expend voluntary contributions for market development 
projects, market research, and production and postharvest research. The 
proposal also contains a provision that any voluntary contributions 
would be free from any encumbrances by the donor and the Committee 
would retain complete control of their use. Currently, the Committee 
only has authority to collect and spend assessment dollars. In the 
event that proposal number one and/or proposal number two are adopted, 
for example, the ability to accept voluntary contributions would 
provide the Committee with additional funding sources for production 
and postharvest research, and marketing research and development 
activities.
    This proposal compliments and supports proposals number one and 
two. If adopted, this proposal could help provide financial support for 
marketing research and development activities. Producers and handlers 
could benefit from these activities as discussed under proposals number 
one and two. Also, funding from an additional source could help to 
mitigate potential assessment rate increases to fund research and 
development projects.
    The Committee would clearly communicate that voluntary 
contributions accepted would be free from any encumbrances by the donor 
and the Committee would retain control over the use of the funds.
    For the reasons stated above, it is proposed that section 920.45 be 
added to authorize the Committee to receive and expend voluntary 
contributions for market development projects, market research, and 
production and postharvest research.

Proposal Number 4--Committee Quorum (Voting)

    This proposal would modify section 920.32 so that approval by eight 
members of the Committee is required for market research and 
development as well as production and postharvest research activities. 
The proposed change to require an eight-vote majority for marketing 
research and development issues is consistent with industry practices 
and voting requirements for Committee actions on other issues. The 
Committee is comprised of twelve members and alternates. This proposal 
would help to ensure industry support exists before undertaking these 
activities.
    Section 920.32 of the order provides that actions of the Committee 
require a majority vote, except that eight concurring votes are 
required by the Committee with respect to actions concerning expenses, 
assessments, or recommendations for regulations. The addition of 
approval by eight members for marketing research and development 
activities would be consistent with current Committee procedures 
regarding issues of major importance to the industry. Requiring eight 
concurring votes would ensure that major actions of the Committee would 
have a super majority, indicating that a broad level of industry 
support exists prior to undertaking marketing research and development 
activities.
    For the reasons stated above, it is proposed that section 920.32 be 
modified so that approval by eight members of the Committee is required 
for market research and development as well as production and 
postharvest research activities.

Proposal Number 5--Alternate Member Procedures

    This proposal would modify section 920.27 to update and clarify 
procedures for substitute alternates from within the same district to 
represent absent members at Committee meetings in districts with more 
than two members. Further, this proposal would clarify existing 
language in the order by providing the authority for substitute 
alternates within the same district to represent absent members. This 
is a necessary change designed to update existing language.
    Prior to 2010, the production area covered by the order was 
comprised of eight districts, represented by one or two members, and an 
alternate member for each district, for a total of twenty-two grower 
positions. In 2010, the order was amended and the number of districts 
decreased to three. Each district is now represented on the Committee 
by two, four, or five members and alternate members, for a total of 
twenty-two grower positions. However, section 920.27 only addresses 
alternate members' service on the Committee in districts with one and 
two grower positions. This proposal addresses alternate members' 
service on the Committee in districts with more than two members, as 
well as alternates if both a member and his or her respective alternate 
are unable to attend a Committee meeting. In such situations, the 
Committee would be authorized to designate any other alternate present, 
from the same district, to serve in place of the absent member.
    Updating the order to clarify procedures for substitute alternates' 
service on the Committee would help to ensure that quorum requirements 
are met. It would also contribute to more efficient conduct of 
Committee business.
    For the reasons stated above, it is proposed that section 920.27 be 
modified to update and clarify procedures for substitute alternates 
from within the same district to represent absent members at Committee 
meetings in districts with more than two members.

Final Regulatory Flexibility Analysis

    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act (RFA) (5 U.S.C. 601-612), the Agricultural

[[Page 46826]]

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 
businesses 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.
    Based on committee data, there are approximately 175 producers and 
27 handlers of kiwifruit in the California production area. The Small 
Business Administration (SBA) defines small agricultural producers as 
those having annual receipts of less than $750,000, and small 
agricultural service firms are defined as those having annual receipts 
of less than $7,000,000. (13 CFR 121.201).
    The California Agricultural Statistical Service (CASS) reported 
total California kiwifruit production for the 2011-12 season at 37,700 
tons, with an average price of $775 per ton. Based on the average 
price, shipment, and grower information provided by the CASS and the 
Committee, 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.
    The amendments proposed by the Committee would provide authority to 
recommend and conduct production and postharvest research; add 
authority to recommend and conduct marketing research and development 
projects; add authority to receive and expend voluntary contributions; 
amend procedures to specify that recommendations for production 
research and market development be approved by eight members of the 
Committee; and update provisions regarding alternate members' service 
on the Committee.
    These proposed amendments were unanimously recommended at public 
meetings of the Committee held on July 12 and December 13, 2011.
    If proposal number one regarding adding research authority to the 
order is approved in referendum, there would be no immediate cost to 
growers or handlers. This proposal would only provide authority to 
recommend production and postharvest research activities. In the event 
the Committee decided to undertake these activities in the future, 
there would be a cost associated with funding any projects recommended. 
However, research activities were previously funded by the industry 
through the CKC, which no longer exists. Therefore, there would be no 
net overall increase in costs to the industry if the Committee chose to 
take over projects previously funded through the CKC.
    Section 920.41(b) of the order establishes a maximum limit on the 
assessment rate that may be implemented. The limit was established at 
$.035 per tray equivalent (6.8 pounds) when the order was promulgated 
in 1984, and may be adjusted for inflation. The assessment rate 
currently in effect is $.035 per 19.8-pound (9 kilo) container, or 
approximately $.012 per tray equivalent (Sec.  920.213). The current 
rate is well below the maximum authorized under the order and any 
potential increase in the assessment rate to cover the costs of 
research activities is anticipated to be well within the maximum 
assessment rate authorized under the order. Therefore, the Committee 
did not recommend an increase in the assessment rate limitation. In 
addition, if proposal number three, regarding authority for the 
Committee to accept voluntary contributions is approved, it could 
provide additional sources of revenue and reduce the amount of 
assessment monies otherwise needed to fund research activities.
    Although there would be a cost associated with any research 
activities undertaken by the industry, the benefits of such activities 
would be expected to outweigh the costs. Past benefits of production 
research to the California kiwifruit industry include improved 
techniques for establishing vineyards, pruning, thinning, irrigating, 
pollination, fertilizer application, disease and pest management, and 
harvesting. Benefits of postharvest research include improved methods 
of fruit storage, packaging, and transportation. These research results 
have been disseminated to growers and handlers in the past and have 
been instrumental in maintaining a viable kiwifruit industry in 
California. The Committee believes a continuation of these types of 
activities is important to the long term success of the industry.
    Prior to undertaking any research activities, the Committee would 
evaluate potential projects and weigh their costs against the potential 
benefits to the industry. Any projects recommended by the Committee 
would be reviewed and approved by USDA before being implemented. The 
Committee and USDA would provide oversight to help ensure that the 
goals and objectives were being met. The results would be disseminated 
to industry members and would also be available to the public.
    If proposal number two regarding adding authority to the order for 
marketing research and development projects is approved, there would be 
no immediate costs to the industry, as with proposal number one. This 
proposal would similarly only provide authority to recommend production 
and postharvest research activities. In the event the Committee decided 
to undertake these activities in the future, there would be a cost 
associated with funding any marketing research and development projects 
recommended.
    Like the production and postharvest research activities discussed 
above, marketing research and development projects could also receive 
supplemental funding through receipt of voluntary contributions if 
proposal number three is approved. This could help to mitigate any 
possible assessment rate increases to pay for the costs of these 
activities. To the extent that the assessment rate may need to be 
increased, any increase would be limited so it remains within the 
maximum level authorized under section 920.41 of the order.
    Any increased costs associated with marketing research and 
development activities are expected to be outweighed by the benefits. 
Marketing research could be conducted regarding consumer tastes and 
preferences. This type of information is valuable in developing 
marketing strategies. Collection of market data can also be useful to 
determine the success of prior programs and to develop future programs. 
Market development programs could be used to conduct programs designed 
to increase awareness and demand for California kiwifruit. These demand 
building activities would be expected to increase sales with the intent 
of ultimately increasing returns to producers.
    Prior to undertaking any marketing research and/or market 
development activities, the Committee would evaluate potential projects 
and their costs against the potential benefits to the industry. Any 
projects recommended by the Committee would be reviewed and approved by 
USDA before implementation. The Committee would provide oversight to 
ensure that the goals and objectives were being met. In addition, as 
required by the Federal Agricultural Improvement and Reform

[[Page 46827]]

Act of 1996, any marketing research and development programs engaged in 
under a Federal marketing order require periodic evaluation by an 
independent third party to ensure that they are effective. Thus, any 
such programs conducted under the kiwifruit order would be evaluated to 
help ensure that the benefits exceed the costs.
    Proposal number three would provide authority for the Committee to 
receive voluntary contributions to help fund marketing research and 
development activities. If approved and utilized, this could provide an 
additional source of revenue to help supplement the funding of research 
and development programs. These types of programs are intended to 
benefit the entire industry. This proposal would not increase or 
decrease any reporting, recordkeeping, or compliance costs. Acceptance 
of voluntary financial contributions by the Committee would not result 
in increased costs. Rather, it might reduce the amount of assessment 
revenue needed to fund a given program or programs.
    Proposal numbers four and five relate to voting procedures and 
alternate member service on the Committee. Both are procedural in 
nature and would have no economic impact on producers or handlers if 
they are approved because they would not establish any regulatory 
requirements on handlers, nor do they contain any assessment or funding 
implications. There would be no change in financial costs, reporting, 
or recordkeeping requirements if either of these proposals is approved.
    Alternatives to these proposals, including making no changes at 
this time, were considered. However, the Committee believes that it 
would be beneficial to have the ability to conduct production research 
and market development activities, collect voluntary contributions, and 
clarify procedural language for Committee meetings.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the order's information collection requirements have been 
previously approved by the Office of Management and Budget (OMB) and 
assigned OMB No. 0581-0189, Generic OMB Fruit Crops. No changes in 
those requirements as a result of this proceeding are anticipated. 
Should any changes become necessary, they would be submitted to OMB for 
approval.
    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.
    In addition, 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.
    The Committee's meetings, at which these proposals were discussed, 
were widely publicized throughout the California kiwifruit industry. 
All interested persons were invited to attend the meeting and 
encouraged to participate in Committee deliberations on all issues. 
Like all Committee meetings, the meeting was public, and all entities, 
both large and small, were encouraged to express their views on these 
proposals.
    A proposed rule concerning this action was published in the Federal 
Register on February 8, 2013 (78 FR 9331). Copies of the rule were 
mailed or sent via facsimile to all Committee members and kiwifruit 
handlers. Finally, the rule was made available through the internet by 
USDA and the Office of the Federal Register. A 60-day comment period 
ending April 9, 2013, was provided to allow interested persons to 
respond to the proposal.
    Three comments were received. Two comments were supportive of the 
proposed amendments.
    The third commenter supported the amendments to Sec. Sec.  920.32 
and 920.45 concerning Committee quorum (voting) and accepting voluntary 
contributions, respectively. However, the commenter was opposed to the 
proposed amendment to Sec.  920.27 regarding alternate member 
procedures that would allow substitute alternates, from within the same 
district, to represent absent members at Committee meetings in 
districts with two or more members because he was concerned that it 
gave the Committee the opportunity to choose an alternate who shared 
their views. The proposed change would improve the likelihood that 
quorum requirements are met. This should ensure a timely and orderly 
flow of business so that important matters would not have to be 
postponed. The substitute alternate would only be called upon if the 
member and their designated alternate were both absent. Because the 
substitute would be from the same district as the absent member and 
alternate, it is more likely that the substitute would represent the 
views of other growers in that district.
    In 2010, the order was amended and the number of districts 
decreased to three. Each district is now represented on the Committee 
by two, four, or five members and alternate members, for a total of 
twenty-two grower positions. However, section 920.27 only addresses 
alternate members' service on the Committee in districts with one and 
two grower positions. This proposal addresses alternate members' 
service on the Committee in districts with more than two members, as 
well as substitute alternates if both a member and his or her 
respective alternate are unable to attend a Committee meeting. In such 
situations, the Committee would be authorized to designate any other 
alternate present, in the same district, to serve in place of the 
absent member. Accordingly, no change to the proposed amendment is 
being adopted.
    The commenter was also opposed to the proposed amendment to Sec.  
920.48 regarding marketing research and development because he believes 
each marketer should conduct their own market promotion. The Act 
authorizes the establishment of marketing research and development 
projects including paid advertising for certain commodities; however, 
paid advertising is not authorized for kiwifruit. (7 U.S.C. 
608(c)(6)(I)) The Committee developed this amendment taking into 
account that the CKC is no longer conducting such activities. One 
purpose of such generic programs is to benefit all members of the 
kiwifruit industry, including those that could not fund their own 
programs. As such, adding authority in the order for market research 
and development projects would benefit the entire kiwifruit industry. 
Therefore, no change to the proposed amendment is being adopted.
    The commenter only supported the amendment to add authority to 
Sec.  920.47 to conduct production and postharvest research if the 
quorum requirement of eight votes passes in Sec.  920.32. The commenter 
wanted to either eliminate or link the two proposed amendments. Such a 
change would not allow the voters to consider each proposal on its own 
merits. Currently, the order requires an eight vote plurality for any 
changes for expenses, assessments, or recommended regulations in Sec.  
920.32. The Committee unanimously supported requiring eight votes for 
approval of marketing research and development as well as production 
and postharvest research activities. Requiring at least eight votes 
would insure that a broad base of support existed for any major actions 
that would affect the budget. Further, the Committee believes this 
requirement will ensure that industry support exists before undertaking 
these activities. The commenter was

[[Page 46828]]

supportive of adding the quorum voting requirement for production and 
postharvest research and the commenter was in favor of production and 
postharvest research.
    The purpose of not bundling the proposed amendments is to give the 
industry the opportunity to consider each proposal on its own merits. 
If the proposed addition of new Sec.  920.47 and/or Sec.  920.48 is 
approved by voters, the language in Sec.  920.32 will be amended 
accordingly, if that amendment also receives the required approval. 
Likewise, if Sec.  920.32 does not pass, Sec.  920.47 and/or Sec.  
920.48 could still benefit the industry. Accordingly, no changes have 
been made to the proposed amendments.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: 
www.ams.usda.gov/MarketingOrdersSmallBusinessGuide. Any questions about 
the compliance guide should be sent to Jeffrey Smutny at the previously 
mentioned address in the FOR FURTHER INFORMATION CONTACT section.

Findings and Conclusions

    The findings and conclusions and general findings and 
determinations included in the proposed rule set forth in the February 
8, 2013, issue of the Federal Register are hereby approved and adopted.

Marketing Order

    Annexed hereto and made a part hereof is the document entitled 
``Order Amending the Order Regulating the Handling of Kiwifruit Grown 
in California.'' This document has been decided upon as the detailed 
and appropriate means of effectuating the foregoing findings and 
conclusions. It is hereby ordered, that this entire rule be published 
in the Federal Register.

Referendum Order

    It is hereby directed that a referendum be conducted in accordance 
with the procedure for the conduct of referenda (7 CFR part 900.400-
407) to determine whether the annexed order amending the order 
regulating the handling of kiwifruit grown in California is approved by 
growers, as defined under the terms of the order, who during the 
representative period were engaged in the production of kiwifruit in 
the production area.
    The representative period for the conduct of such referendum is 
hereby determined to be August 1, 2012, through July 31, 2013.
    The agents of the Secretary to conduct such referendum are 
designated to be Rose Aguayo and Kathie Notoro, California Marketing 
Field Office, Marketing Order and Agreement Division, Fruit and 
Vegetable Program, AMS, USDA; Telephone: (559) 487-5901, or Email: 
Rose.Aguayo@ams.usda.gov or Kathie.Notoro@ams.usda.gov, respectively.

List of Subjects in 7 CFR Part 920

    Marketing agreements, Kiwifruit, Reporting and recordkeeping 
requirements.

    Dated: July 29, 2013.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.

Order Amending the Order Regulating the Handling of Kiwifruit Grown in 
California \1\
---------------------------------------------------------------------------

    \1\ This order shall not become effective unless and until the 
requirements of Sec.  900.14 of the rules of practice and procedure 
governing proceedings to formulate marketing agreements and 
marketing orders have been met.
---------------------------------------------------------------------------

Findings and Determinations

    The findings hereinafter set forth are supplementary to the 
findings and determinations which were previously made in connection 
with the issuance of the marketing order; and all said previous 
findings and determinations are hereby ratified and affirmed, except 
insofar as such findings and determinations may be in conflict with the 
findings and determinations set forth herein.
    1. The marketing order, as amended, and as hereby proposed to be 
further amended, and all of the terms and conditions thereof, would 
tend to effectuate the declared policy of the Act;
    2. The marketing order, as amended, and as hereby proposed to be 
further amended, regulates the handling of kiwifruit grown in 
California in the same manner as, and is applicable only to, persons in 
the respective classes of commercial and industrial activity specified 
in the marketing order;
    3. The marketing order, as amended, and as hereby proposed to be 
further amended, is limited in application to the smallest regional 
production area which is practicable, consistent with carrying out the 
declared policy of the Act, and the issuance of several orders 
applicable to subdivisions of the production area would not effectively 
carry out the declared policy of the Act;
    4. The marketing order, as amended, and as hereby proposed to be 
further amended, prescribes, insofar as practicable, such different 
terms applicable to different parts of the production area as are 
necessary to give due recognition to the differences in the production 
and marketing of kiwifruit produced in the production area; and
    5. All handling of kiwifruit produced in the production area as 
defined in the marketing order is in the current of interstate or 
foreign commerce or directly burdens, obstructs, or affects such 
commerce.

Order Relative to Handling

    It is therefore ordered, That on and after the effective date 
hereof, all handling of kiwifruit grown in California shall be in 
conformity to, and in compliance with, the terms and conditions of the 
said order as hereby proposed to be amended as follows:
    The provisions of the proposed marketing order amending the order 
contained in the proposed rule issued by the Administrator on February 
4, 2013, and published in the Federal Register (78 FR 9331) on February 
8, 2013, will be and are the terms and provisions of this order 
amending the order and are set forth in full herein.

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.

0
2. Revise Sec.  920.27 to read as follows:


Sec.  920.27  Alternate members.

    An alternate member of the committee, during the absence of the 
member for whom that individual is an alternate, shall act in the place 
and stead of such member and perform such other duties as assigned. In 
the event both a member and his or her alternate are unable to attend a 
committee meeting, the committee may designate any other alternate 
member from the same district to serve in such member's place and 
stead. In the event of the death, removal, resignation, or 
disqualification of a member, the alternate of such member shall act 
for him or her until a successor for such member is selected and has 
qualified.
0
3. Revise Sec.  920.32(a) to read as follows:


Sec.  920.32  Procedure.

    (a) Eight members of the committee, or alternates acting for 
members, shall constitute a quorum and any action of the committee 
shall require the concurring vote of the majority of those present: 
Provided, That actions of the committee with respect to expenses and 
assessments, production and postharvest research, market research and 
development, or recommendations for regulations pursuant to Sec. Sec.  
920.50

[[Page 46829]]

through 920.55, of this part shall require at least eight concurring 
votes.
* * * * *
0
4. Add Sec.  920.45 to read as follows:


Sec.  920.45  Contributions.

    The committee may accept voluntary contributions, but these shall 
only be used to pay expenses incurred pursuant to Sec.  920.47 and 
Sec.  920.48. Furthermore, such contributions shall be free from any 
encumbrances by the donor, and the committee shall retain complete 
control of their use.
0
5. Add Sec.  920.47 to read as follows:


Sec.  920.47  Production and postharvest research.

    The committee, with the approval of the Secretary, may establish or 
provide for the establishment of projects involving research designed 
to assist or improve the efficient production and postharvest handling 
of kiwifruit.
0
6. Add Sec.  920.48 to read as follows:


Sec.  920.48  Market research and development.

    The committee, with the approval of the Secretary, may establish or 
provide for the establishment of marketing research and development 
projects designed to assist, improve, or promote the marketing, 
distribution, and consumption of kiwifruit.

[FR Doc. 2013-18627 Filed 8-1-13; 8:45 am]
BILLING CODE 3410-02-P