California and Imported Kiwifruit; Handling Regulations, 5721-5724 [2023-01701]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 88, Number 19 (Monday, January 30, 2023)]
[Rules and Regulations]
[Pages 5721-5724]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-01701]



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Rules and Regulations
                                                Federal Register
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This section of the FEDERAL REGISTER contains regulatory documents 
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Federal Register / Vol. 88, No. 19 / Monday, January 30, 2023 / Rules 
and Regulations

[[Page 5721]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 920 and 944

[Doc. No. AMS-SC-21-0098]


California and Imported Kiwifruit; Handling Regulations

AGENCY: Agricultural Marketing Service, Department of Agriculture 
(USDA).

ACTION: Final rule.

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

SUMMARY: This rule implements a recommendation from the Kiwifruit 
Administrative Committee (Committee) to modify the handling regulations 
prescribed under the Federal marketing order for kiwifruit grown in 
California. This action revises the size and uniformity requirements 
for all varieties of Actinidia chinensis species kiwifruit, which is 
commonly known as golden kiwifruit, regulated under the marketing 
order. A corresponding change is also made to the kiwifruit import 
regulation as required under section 8e of the Agricultural Marketing 
Agreement Act of 1937.

DATES: Effective March 1, 2023.

FOR FURTHER INFORMATION CONTACT: Barry Broadbent, Senior Marketing 
Specialist, or Gary Olson, Regional Director, Western Region Field 
Office, Market Development Division, Specialty Crops Program, AMS, 
USDA; Telephone: (503) 326-2724, or Email: [email protected] or 
[email protected].
    Small businesses may request information on complying with this 
regulation by contacting Richard Lower, Market Development Division, 
Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP 
0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, or Email: 
[email protected].

SUPPLEMENTARY INFORMATION: This action, pursuant to 5 U.S.C. 553, 
amends regulations issued to carry out a marketing order as defined in 
7 CFR 900.2(j). This final rule is issued under Marketing Order No. 
920, as amended (7 CFR part 920), regulating the handling of kiwifruit 
grown in California. Part 920 (referred to as 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 
Committee locally administers the Order and comprises kiwifruit growers 
operating within the production area, and a public member.
    This final rule is also issued under section 8e of the Act (7 
U.S.C. 608e-1), which provides that whenever certain specified 
commodities, including kiwifruit, are regulated under a Federal 
marketing order, imports of these commodities into the United States 
are prohibited unless they meet the same or comparable grade, size, 
quality, or maturity requirements as those in effect for domestically 
produced commodities.
    The Agricultural Marketing Service (AMS) is issuing this final rule 
in conformance with Executive Orders 12866 and 13563. Executive Orders 
12866 and 13563 direct agencies to assess all costs and benefits of 
available regulatory alternatives and, if regulation is necessary, to 
select regulatory approaches that maximize net benefits (including 
potential economic, environmental, public health and safety effects, 
distributive impacts and equity). Executive Order 13563 emphasizes the 
importance of quantifying both costs and benefits, reducing costs, 
harmonizing rules, and promoting flexibility. This action falls within 
a category of regulatory actions that the Office of Management and 
Budget (OMB) exempted from Executive Order 12866 review.
    This final rule has been reviewed under Executive Order 13175--
Consultation and Coordination with Indian Tribal Governments, which 
requires agencies to consider whether their rulemaking actions would 
have tribal implications. AMS has determined this final rule is 
unlikely to have substantial direct effects on one or more Indian 
tribes, on the relationship between the Federal Government and Indian 
tribes, or on the distribution of power and responsibilities between 
the Federal Government and Indian tribes.
    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 the United States 
Department of Agriculture (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 the entry of 
the ruling.
    There are no administrative procedures that must be exhausted prior 
to any judicial challenge to the provisions of import regulations 
issued under section 8e of the Act.
    Under the provisions of the Order, fresh market shipments of 
kiwifruit produced in California are required to be inspected and are 
subject to grade, size, quality, maturity, pack, and container 
requirements. This final rule revises the minimum size and uniformity 
requirements for certain varieties of kiwifruit handled under the 
Order. As required by section 8e of the Act, the revision to the 
minimum size requirement will also be applied to the import regulations 
for kiwifruit.
    Section 920.51 of the Order provides authority for the Committee to 
recommend regulations to the Secretary. Section 920.52 of the Order 
provides authority for the establishment of handling regulations. 
Further, Sec.  920.53 provides the authority to recommend the 
modification, suspension, or termination of such regulations when the 
Committee finds that industry conditions so dictate. Section 920.302 
establishes the minimum grade, size, quality, maturity, pack, and 
container requirements for kiwifruit handled subject to the Order. 
Under the authority of Sec.  920.53, the Committee determined that the 
production and marketing conditions for some varieties

[[Page 5722]]

of kiwifruit have changed and that the handling requirements should be 
modified accordingly.
    Prior to this rule change, the handling regulations required that 
all varieties of kiwifruit be a minimum Size 45, defined as a maximum 
of 55 pieces of fruit in an 8-pound sample. In addition, kiwifruit 
packed in containers were required to be fairly uniform in size.
    At its meeting on September 29, 2021, the Committee unanimously 
recommended modifying the regulations to accommodate varieties of 
Actinidia chinensis species kiwifruit that are characteristically 
smaller in size and less uniform than the more common varieties grown 
in California that are Actinidia deliciosa species. No other species of 
kiwifruit are known to be grown in California.
    This final rule relaxes the minimum size requirement for all 
varieties of Actinidia chinensis species kiwifruit to Size 49, defined 
in the requirements as a maximum of 64 pieces of fruit in an 8-pound 
sample. In addition, the final rule exempts all varieties of Actinidia 
chinensis species kiwifruit from the requirement that fruit packed in a 
container be fairly uniform in size.
    At the time that the Order's handling regulations were established 
in 1985, practically all the kiwifruit grown in California were 
varieties of the Actinidia deliciosa species. As such, the requirements 
were implemented to accommodate the characteristics of those varieties. 
Recently, production of varieties of Actinidia chinensis species 
kiwifruit has been increasing in California. This sector of the 
industry now accounts for approximately eight percent of the acreage 
and five percent of the production in the state. Given the natural 
characteristics of Actinidia chinensis species kiwifruit, the current 
minimum size and uniformity requirements preclude some high-quality 
kiwifruit from entering the fresh market. Relaxing the minimum 
requirements for those varieties will allow growers to market more of 
their fruit in the fresh market, increasing their total revenue. The 
change is expected to benefit domestic kiwifruit growers, handlers, and 
consumers.
    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. Since 
this action modifies the minimum size requirement for varieties of 
Actinidia chinensis species kiwifruit under the domestic handling 
regulations, a corresponding change is made to the import regulations.
    Minimum grade, size, quality, and maturity requirements for 
kiwifruit imported into the United States are currently in effect under 
Sec.  944.550 (7 CFR 944.550). Paragraph (a) of that section specifies 
the minimum size requirement. This final rule lowers the minimum size 
requirement for varieties of Actinidia chinensis species kiwifruit to 
Size 49, defined as a maximum of 64 pieces of kiwifruit in an 8-pound 
sample. In accordance with the Act, under the kiwifruit import 
regulations, imported kiwifruit are not subject to container and pack 
requirements. Accordingly, the change in the Order's uniformity 
requirement does not affect the kiwifruit import requirements.
    The relaxation in the size requirements for imports of Actinidia 
chinensis varieties will allow a greater quantity of kiwifruit to be 
imported. The change is expected to benefit kiwifruit importers and 
consumers of imported kiwifruit.

Final Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), 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 are unique in that they are brought about through 
group action of essentially small entities acting on their own behalf. 
Import regulations issued under the Act are based on those established 
under Federal marketing orders.
    There are approximately 133 kiwifruit growers in the production 
area and 20 handlers subject to regulation under the Order. In 
addition, there are approximately 80 importers of kiwifruit. Small 
producers of kiwifruit are defined by the Small Business Administration 
(SBA) as those having annual receipts less than $3,000,000. Small 
agricultural service firms, which include kiwifruit handlers and 
importers, are defined by the SBA as those having annual receipts of 
less than $30,000,000. The SBA threshold for growers changed in between 
the proposed and the final rule. Thus, AMS changed the RFA to reflect 
the new amount in this final rule. The change did not impact the number 
of growers considered to be small.
    The USDA National Agricultural Statistics Service (NASS) reported 
that total production of California kiwifruit for the 2020-2021 season 
was 39,760 tons. NASS further reported that the average producer price 
was $1,920 per ton over that period. Multiplying $1,920 per ton by the 
production quantity of 39,760 tons yields an annual crop revenue 
estimate of $76,339,200. The average annual fresh kiwifruit revenue for 
each of the 133 growers for the 2020-2021 season is therefore 
calculated to be $573,979 ($76,339,200 divided by 133), which is less 
than the SBA threshold of $3,000,000 for small producers of kiwifruit. 
Therefore, on average and given a normal distribution, the majority of 
growers may be classified as small businesses.
    In addition, based on information reported by USDA's Market News 
Service (Market News), the average Free On Board (F.O.B.) shipping 
point price for California kiwifruit over the 2020-2021 season was 
$23.28 per 9 kilogram container (19.8 pounds equivalent). Multiplying 
$23.28 by the shipment quantity of 4,016,162 containers (39,760 tons 
times 2,000 pounds per ton divided by 19.8 pounds) yields an annual 
crop revenue estimate of $93,496,251. The average annual fresh 
kiwifruit revenue for each of the 20 handlers is therefore calculated 
to be $4,674,813 ($93,496,251 divided by 20), which is below the SBA 
threshold of $30,000,000 for agricultural service firms. Therefore, on 
average and assuming a normal distribution, the majority of the 
handlers may be classified as small businesses.
    Further, USDA's Foreign Agricultural Service reported 80,279 metric 
tons of kiwifruit were imported during the 2020-2021 season with a 
reported value of $184,488,000. Using that data, the average revenue 
for each of the approximately 80 kiwifruit importers would be 
$2,306,100 ($184,488,000 divided by 80), which is below the $30,000,000 
SBA threshold for small agricultural service firms. As such, the 
majority of kiwifruit importers may be classified as small businesses.
    This final rule relaxes the minimum size and uniformity 
requirements prescribed in the Order's handling regulations. The final 
rule lowers the minimum size requirement for all varieties of Actinidia 
chinensis species kiwifruit from Size 45 to 49, defined in the 
requirements as a maximum of 64 pieces of fruit in an 8-pound sample. 
In addition, the final rule exempts all varieties of Actinidia 
chinensis species kiwifruit from the Order's container requirement that 
fruit be fairly uniform in size.

[[Page 5723]]

    This action will not impose any additional costs to the industry. 
It is expected to increase revenue to handlers and growers of Actinidia 
chinensis species varieties of kiwifruit, as smaller size fruit, and 
fruit that lacks uniformity, will be allowed to enter the market. The 
quality of fruit to consumers is not expected to be significantly 
affected, as relaxing the size and uniformity requirements will not 
impact the Order's minimum quality requirements. All kiwifruit marketed 
under the Order will continue to be packed to the minimum grade of KAC 
No.1.
    The Committee considered alternatives to the recommended changes, 
including taking no action and continuing to regulate according to the 
requirements as currently established. In addition, the Committee 
considered lowering the size requirements for all varieties of 
kiwifruit. However, the Committee determined that the minimum size 
requirement is effective for Actinidia deliciosa varieties and that it 
should not be changed. The Committee also considered establishing other 
minimum sizes for Actinidia chinensis varieties higher and lower than 
the minimum size recommended but believed that Size 49 will allow more 
fruit to be marketed and still maintain the high standards of 
California kiwifruit. Ultimately, the Committee determined that 
relaxation of the handling regulation, as recommended, is in the best 
interests of the growers, handlers, and consumers of California 
kiwifruit and rejected all other alternatives.
    Committee meetings were widely publicized throughout the California 
kiwifruit industry. All interested persons were invited to attend 
meetings and participate in Committee deliberations. Like all Committee 
meetings, the September 27, 2021, meeting was a public meeting, and all 
entities, both large and small, were able to express their views on 
this issue. Also, the embassies of countries that export kiwifruit to 
the United States, and known kiwifruit importers, will be notified of 
this final rule upon its publication. Finally, interested persons were 
invited to submit comments on the proposed rule, including the 
regulatory and informational impacts of this action on small 
businesses.
    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, Fruit Crops. No changes in those 
requirements are necessary as a result of this action. Should any 
changes become necessary, they would be submitted to OMB for approval.
    This final rule does not impose any additional reporting or 
recordkeeping requirements on either small or large kiwifruit handlers. 
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. AMS has not 
identified any relevant Federal rules that duplicate, overlap, or 
conflict with this final 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.
    A proposed rule concerning this action was published in the Federal 
Register on June 17, 2022 (87 FR 36412). Copies of the proposed rule 
were also mailed or sent via email to all California kiwifruit 
handlers. A copy of the proposed rule was made available through the 
internet by AMS. A 60-day comment period ending August 16, 2022, was 
provided for interested persons to respond to the proposal. Three 
comments were received in favor of the rule. Accordingly, no changes 
have been made to the rule as proposed.
    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/rules-regulations/moa/small-businesses. Any 
questions about the compliance guide should be sent to Richard Lower at 
the previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    After consideration of all relevant material presented, including 
the information and recommendations submitted by the Committee and 
other available information, USDA has determined that this final rule 
is consistent with and will effectuate the purposes of the Act.
    In accordance with section 8e of the Act, the United States Trade 
Representative has concurred with the issuance of this final rule.

List of Subjects

7 CFR Part 920

    Kiwifruit, Marketing agreements, Reporting and recordkeeping 
requirements.

7 CFR Part 944

    Avocados, Food grades and standards, Grapefruit, Grapes, Imports, 
Kiwifruit, Limes, Olives, Oranges, Plums, Prunes.

    For the reasons set forth in the preamble, the Agricultural 
Marketing Service amends 7 CFR parts 920 and 944 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.


0
2. Amend Sec.  920.302 by:
0
a. Revising paragraphs (a)(2), (a)(4) heading, and (a)(4)(i); and
0
b. In paragraph (a)(4)(ii)(A):
0
i. Designating the table as table 1 to paragraph (a)(4)(ii)(A);
0
ii. Revising the three column headings;
0
iii. Removing the entry for ``45 or smaller'' and adding an entry for 
``45'' in its place; and
0
iv. Adding an entry for ``49'' in numerical order and footnotes 1 and 2 
at the end of the table.
    The revisions and additions read as follows:


Sec.  920.302  Grade, size, pack, and container regulations.

    (a) * * *
    (2) Size requirements. Such kiwifruit, except for varieties of the 
Actinidia chinensis species, shall be at least a minimum Size 45, 
defined as a maximum of 55 pieces of fruit in an 8-pound sample. 
Varieties of the Actinidia chinensis species shall be at least a 
minimum Size 49, defined as a maximum of 64 pieces of fruit in an 8-
pound sample.
* * * * *
    (4) Pack requirements. (i) Kiwifruit packed in containers with cell 
compartments, cardboard fillers, or molded trays shall be of proper 
size for the cells, fillers, or molds in which they are packed. Such 
fruit, except for varieties of the Actinidia chinensis species, shall 
be fairly uniform in size.
    (ii)(A) * * *

[[Page 5724]]



 Table 1 to Paragraph (a)(4)(ii)(A)--Size Designation and Size Variation
                                  Chart
------------------------------------------------------------------------
                                   Maximum number of    Size variation
        Size designation           fruit per 8-pound       tolerance
                                        sample          (diameter) \1\
------------------------------------------------------------------------
 
                              * * * * * * *
45..............................                 55   \1/4\-inch (6.4
                                                       mm).
\2\ 49..........................                 64   Not applicable.
------------------------------------------------------------------------
\1\ Not applicable to Actinidia chinensis species varieties.
\2\ Applicable only to Actinidia chinensis species varieties.

* * * * *

PART 944--FRUITS; IMPORT REGULATIONS

0
3. The authority citation for 7 CFR part 944 continues to read as 
follows:

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


0
4. Amend Sec.  944.550 by revising paragraph (a) to read as follows:


Sec.  944.550   Kiwifruit import regulation.

    (a) Pursuant to section 8e of the Agricultural Marketing Agreement 
Act of 1937, as amended, the importation into the United States of any 
kiwifruit is prohibited unless such kiwifruit meets all the 
requirements of a U.S. No. 1 grade as defined in the United States 
Standards for Grades of Kiwifruit (7 CFR 51.2335 through 51.2340), 
except that the kiwifruit shall be ``not badly misshapen,'' and an 
additional tolerance of 16 percent is provided for kiwifruit that is 
``badly misshapen,'' and except that such kiwifruit shall have a 
minimum of 6.2 percent soluble solids. Such fruit, except for varieties 
of the Actinidia chinensis species, shall be at least Size 45, which 
means there shall be a maximum of 55 pieces of fruit in an 8-pound 
sample. Varieties of the Actinidia chinensis species shall be at least 
Size 49, which means there shall be a maximum of 64 pieces of fruit in 
an 8-pound sample. The average weight of all samples in a specific lot 
must weigh at least 8 pounds (3.632 kilograms), provided that no 
individual sample may be less than 7 pounds 12 ounces (3.472 
kilograms).
* * * * *

Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2023-01701 Filed 1-27-23; 8:45 am]
BILLING CODE P