Federal Register / Vol. 76, No. 113 / Monday, June 13, 2011 / Proposed Rules 34181 

version of the guidance, submit written 

comments on the draft guidance by 

August 12, 2011. 

ADDRESSES: Submit written requests for 

hard copies of these draft guidance 

documents to Toni Strother, 

Agricultural Marketing Specialist, 

National Organic Program, USDA– 

AMS–NOP, 1400 Independence Ave., 

SW., Room 2646 So., Ag Stop 0268, 

Washington, DC 20250–0268. See the 

SUPPLEMENTARY INFORMATION section for 

electronic access to the draft guidance 

documents. 

Interested persons may comment on 

these four draft guidance documents 

using the following procedures: 

Internet: http://www.regulations.gov. 

Mail: Comments may be submitted by 

mail to: Toni Strother, Agricultural 

Marketing Specialist, National Organic 

Program, USDA–AMS–NOP, 1400 

Independence Ave., SW., Room 2646 

So., Ag Stop 0268, Washington, DC 

20250–0268. 

Written comments responding to this 

request should be identified with the 

document number AMS–NOP–11–0002; 

NOP–11–02. You should clearly 

indicate your position and the reasons 

for your position. You should clearly 

indicate which guidance document you 

are commenting on, especially if you 

choose to comment on more than one 

draft guidance document. If you are 

suggesting changes to a draft guidance 

document, you should include 

recommended language changes, as 

appropriate, along with any relevant 

supporting documentation. 

USDA intends to make available all 

comments, including names and 

addresses when provided, regardless of 

submission procedure used, on http:// 

www.regulations.gov and at USDA, 

AMS, NOP, Room 2646–South building, 

1400 Independence Ave., SW., 

Washington, DC, from 9 a.m. to noon 

and from 1 to 4 p.m., Monday through 

Friday (except official Federal holidays). 

Persons wanting to visit the USDA 

South building to view comments from 

the public to this notice are requested to 

make an appointment by calling (202) 

720–3252. 

FOR FURTHER INFORMATION CONTACT: 

Melissa R. Bailey, PhD, Director, 

Standards Division, National Organic 

Program (NOP), USDA–AMS–NOP, 

1400 Independence Ave., SW., Room 

2646–So., Ag Stop 0268, Washington, 

DC 20250–0268, Telephone: (202) 720– 

3252, E-mail: 

NOP.guidance@ams.usda.gov, or visit 

the NOP Web site at: http:// 

www.ams.usda.gov/nop. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The NOP selected the topics for the 

four draft guidance documents 

announced through this notice in 

response to recommendations issued by 

the National Organic Standards Board 

(NOSB) and the need to improve 

consistency in how certifying agents 

and certified operations are 

implementing the NOP regulations at 7 

CFR part 205. The NOP developed 

‘‘Seeds, Annual Seedlings, and Planting 

Stock in Organic Crop Production (NOP 

5029)’’, and ‘‘Evaluating Allowed 

Ingredients and Sources of Vitamins and 

Minerals For Organic Livestock Feed, 

Feed Supplements, and Feed Additives 

(NOP 5030)’’ in response to outstanding 

NOSB recommendations from May 

2002, February 2005, and November 

2008. The NOP developed ‘‘The Use of 

Kelp in Organic Livestock Feed (NOP 

5027)’’ in response to requests by 

certifying agents and certified 

operations for clarifications on this 

issue. The NOP developed ‘‘Responding 

to Results from Pesticide Residue 

Testing (NOP 5028)’’ to describe the 

reporting scheme and actions that 

certifying agents should be instituting to 

meet the requirements at § 205.670 of 

the NOP regulations. 

II. Significance of Guidance 

These draft guidance documents are 

being issued in accordance with the 

Office of Management and Budget 

(OMB) Bulletin on Agency Good 

Guidance Practices (GGPs) (January 25, 

2007, 72 FR 3432–3440). 

The purpose of GGPs is to ensure that 

program guidance documents are 

developed with adequate public 

participation, are readily available to the 

public, and are not applied as binding 

requirements. The draft guidance, when 

finalized, will represent the NOP’s 

current thinking on these topics. It does 

not create or confer any rights for, or on, 

any person and does not operate to bind 

the NOP or the public. Guidance 

documents are intended to provide a 

uniform method for operations to 

comply that can reduce the burden of 

developing their own methods and 

simplify audits and inspections. 

Alternative approaches that can 

demonstrate compliance with the 

Organic Foods Production Act (OFPA), 

as amended (7 U.S.C. 6501–6522), and 

its implementing regulations are also 

acceptable. As with any alternative 

compliance approach, the NOP strongly 

encourages industry to discuss 

alternative approaches with the NOP 

before implementing them to avoid 

unnecessary or wasteful expenditures of 

resources and to ensure the proposed 

alternative approach complies with the 

Act and its implementing regulations. 

Electronic Access 

Persons with access to Internet may 

obtain the draft guidance at either 

NOP’s Web site at http:// 

www.ams.usda.gov/nop or http:// 

www.regulations.gov. Requests for hard 

copies of the draft guidance documents 

can be obtained by submitting a written 

request to the person listed in the 

ADDRESSES section of this Notice. 

Authority: 7 U.S.C. 6501–6522. 

Dated: June 7, 2011. 

Ellen King, 

Acting Administrator, Agricultural Marketing 

Service. 

[FR Doc. 2011–14500 Filed 6–10–11; 8:45 am] 

BILLING CODE 3410–02–P 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 983 

[Doc. No. AMS–FV–10–0099; FV11–983–1 

PR] 

Pistachios Grown in California, 

Arizona, and New Mexico; Proposed 

Amendments to Marketing Order 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Proposed rule. 

SUMMARY: Four amendments to 

Marketing Agreement and Order No. 

983, which regulates the handling of 

pistachios grown in California, Arizona, 

and New Mexico, were proposed by the 

Administrative Committee for 

Pistachios (Committee), which is 

responsible for local administration of 

the order. The proposed amendments 

would provide authority to establish 

aflatoxin and quality regulations for 

pistachios shipped to export markets, 

including authority to establish different 

regulations for different markets. The 

order currently provides authority for 

aflatoxin and quality regulations only 

for pistachios shipped to domestic 

markets. These proposed amendments 

are intended to provide authority to 

ensure uniform and consistent aflatoxin 

and quality regulations in the domestic 

and various export markets. 

DATES: Comments must be received by 

July 13, 2011. 

ADDRESSES: Written comments should 

be submitted to the Docket Clerk, 

Marketing Order Administration 

Branch, Fruit and Vegetable Programs, 

AMS, USDA, 1400 Independence 

Avenue SW., STOP 0237, Washington, 


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DC 20250–0237; Fax: (202) 720–8938; or 

Internet: http://www.regulations.gov. All 

comments should reference the 

document number and the date and 

page number of this issue of the Federal 

Register. All comments submitted in 

response to this proposed rule will be 

included in the record and will be made 

available for public inspection in the 

Office of the Docket Clerk during regular 

business hours, or can be viewed at: 

http://www.regulations.gov. Please be 

advised that the identity of the 

individuals or entities submitting the 

comments will be made public on the 

Internet at the address provided above. 

To the extent practicable, all 

documents filed with the Docket Clerk 

should also be submitted electronically 

to Martin Engeler at the email address 

noted for him in the FOR FURTHER

INFORMATION CONTACT section. 

FOR FURTHER INFORMATION CONTACT: 

Martin Engeler, Marketing Order 

Administration Branch, Fruit and 

Vegetable Programs, AMS, USDA; 2202 

Monterey Street, Fresno, California, 

93721; Telephone: (559)487–5110, Fax: 

(559) 487–5906, or Kathleen M. Finn, 

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: 

Martin.Engeler@ams.usda.gov or 

Kathy.Finn@ams.usda.gov. 

Small businesses may request 

information on complying with this 

regulation by contacting Laurel May, 

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: 

Laurel.May@ams.usda.gov. 

SUPPLEMENTARY INFORMATION: This 

proposal is issued under Marketing 

Agreement and Order No. 983, both as 

amended (7 CFR part 983), regulating 

the handling of pistachios produced in 

California, Arizona, and New Mexico, 

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 

applicable rules of practice and 

procedure governing the formulation of 

marketing agreements and orders (7 CFR 

part 900) authorize amendment of the 

order through this informal rulemaking 

action. A producer referendum may be 

held in the future to determine support 

for the proposed order amendments, if 

deemed appropriate. 

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. 

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. 

Section 1504 of the Food, 

Conservation, and Energy Act of 2008 

(2008 Farm Bill) (Pub. L. 110–246) made 

changes to 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 changes to 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 if 

certain criteria are met. 

AMS has considered the nature and 

complexity of the proposed 

amendments, the potential regulatory 

and economic impacts on affected 

entities, and other relevant matters, and 

has determined that amending the order 

as proposed by the committee could 

appropriately be accomplished through 

informal rulemaking. AMS will analyze 

any comments received on the 

amendments proposed in this rule, and 

if warranted, will conduct a producer 

referendum to determine grower 

support for the proposed amendments. 

If appropriate, a final rule will then be 

issued to effectuate the amendments 

favored by producers participating in 

the referendum. 

The proposed amendments were 

unanimously recommended by the 

Committee following deliberations at a 

public meeting on July 9, 2010. The 

Committee’s proposed amendments 

would: (1) Provide authority to establish 

aflatoxin sampling, analysis, and 

inspection requirements for shipments 

of pistachios to export markets, 

including authority to establish different 

regulations for different markets. (2) 

Provide authority to establish quality 

and inspection requirements for 

shipments of pistachios to export 

markets, including authority to establish 

different regulations for different 

markets. (3) Change a related section of 

the order concerning substandard 

pistachios to conform to the proposed 

addition of export authority. (4) Correct 

an erroneous cross-reference to another 

section of the order. 

Proposal Number 1—Aflatoxin 

Regulation Authority 

Section 983.50 of the order provides 

authority to establish aflatoxin 

sampling, analysis, and inspection 

requirements applicable to pistachios 

shipped for domestic human 

consumption. Section 983.150 of the 

order’s administrative rules and 

regulations establish such requirements. 

These regulations prohibit the shipment 

of pistachios for domestic human 

consumption unless they have been 

sampled and tested according to specific 

procedures and protocols, and certified 

that they do not contain traces of 

aflatoxin exceeding a tolerance level of 

15 parts per billion (ppb). The aflatoxin 

regulations under the order are intended 

to help assure consumers of a good 

quality product and to reduce the risk 

of potential aflatoxin contamination. 

While authority exists to establish 

aflatoxin regulations for domestic 

shipments of pistachios, no such 

authority exists under the order for 

export shipments. This proposed 

amendment would add authority to 

establish aflatoxin regulations for 

shipments of pistachios to export 

markets. 

When the order was promulgated in 

2004, a State of California marketing 

agreement was in effect that provided 

aflatoxin testing and certification for 

export shipments to designated markets. 

Under that program, handlers tested and 

certified export shipments according to 

the methods and protocols acceptable to 

the export destination. Thus, the 

authority to regulate export shipments 

was not included in the order to avoid 

duplication. The State program served 

the needs of the industry for several 

years, but was terminated in 2010. 

Although handlers continue to test and 

certify product prior to shipping into 

export markets, there is currently no 

program in place to establish uniform 

and consistent procedures. 

The export market is becoming 

increasingly important to the U.S. 

pistachio industry to market its 


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continually increasing production. 

Pistachio acreage and production in the 

U.S. has been increasing steadily since 

the crop became commercially 

significant in the 1970’s. This upward 

trend has continued since the order was 

promulgated, and is expected to 

continue into the foreseeable future. 

According to information reported by 

the Committee, in 2004 pistachio 

bearing acreage in California was 93,000 

acres and non-bearing acreage was 

24,733 acres, for a total of 117,773 acres. 

In 2010, bearing acreage was 137,102 

acres and non-bearing acreage was 

78,234, for a total of 215,336 acres. This 

represents an 83 percent increase in 

total acreage in just six years. The 

increased plantings are a response to the 

growing demand for U.S. pistachios, 

especially in export markets. A review 

of Committee shipment data indicates a 

substantial increase in shipments to 

export markets has occurred in recent 

years. Export shipments of open inshell 

pistachios increased from 95,761,666 

pounds in the 2004–05 shipping season 

to 192,436,136 pounds in the 2009–10 

season. Exports represented 

approximately 63 percent of total U.S. 

pistachio shipments during the 2009–10 

season, underscoring the importance of 

the export market to the industry. 

In view of the new plantings of 

pistachios as represented by the nonbearing acreage data, it is readily 

apparent that the production of U.S. 

pistachios will increase significantly in 

coming years. Successful marketing of 

the crop in the future will be dependent 

not only on sustaining current markets, 

but increasing the global demand to 

absorb the increased production. In 

order to accomplish this, it is important 

to reduce the risk of an aflatoxin 

incident involving U.S. pistachios. 

In the mid-1990’s, heightened 

consumer concern about aflatoxin 

occurred in Europe which resulted in a 

significant drop in pistachio 

consumption in those markets. Issues 

involving other commodities have also 

occurred in recent years, with adverse 

impacts. The pistachio industry thus 

believes it would be prudent to avail 

itself of an additional tool that could be 

used to reduce the risk of potential 

aflatoxin incidence in U.S. pistachios 

and the associated negative impacts. 

Although pistachios destined for 

export markets are currently being 

tested and certified based on the 

requirements in those markets and 

customer’s needs, there is currently no 

program in place with government 

oversight to ensure all handlers are 

following specific established protocols 

and procedures. Adding authority to the 

order to allow issuance of rules and 

regulations for aflatoxin testing and 

certification for export shipments would 

provide a mechanism to establish 

uniform and consistent aflatoxin 

sampling, analysis, and inspection 

requirements for shipments of 

domestically produced pistachios to 

export markets. A program with 

consistent and uniform procedures, 

with Federal oversight, would help 

instill confidence with foreign 

customers and government officials that 

the U.S. pistachio industry is committed 

to providing a good quality product to 

its markets that match or exceed the 

standards of the importing country. 

The intent of the proposed 

amendments authorizing aflatoxin 

regulation for exports is to provide an 

additional tool under the order to aid in 

successful marketing of future crops. 

The various export markets to which 

pistachios are shipped often have 

different requirements, such as 

allowable aflatoxin tolerance levels. 

Thus, the Committee also recommended 

adding authority to the order to 

establish different aflatoxin regulations 

for different markets. The proposed 

amendment would therefore authorize 

different regulations for different 

markets. 

If the order is amended to include 

authority to establish aflatoxin 

regulations for shipments to export 

markets, specific regulations would 

need to be added to the order’s rules 

and regulations through the informal 

rulemaking process. If the industry 

chooses to pursue such regulations, the 

Committee would meet to consider and 

analyze the available information in 

developing any recommendation to 

AMS. Any recommendation of the 

Committee concerning potential 

aflatoxin regulations would require a 

unanimous vote of 12 Committee 

members or alternate members acting in 

their stead according to the voting 

requirements in § 983.43 of the order. 

For the reasons stated above, it is 

proposed that § 983.50, Aflatoxin 

regulations, be amended to authorize 

the Committee, with approval of the 

Secretary, to establish aflatoxin 

sampling, analysis, and inspection 

requirements for pistachios to be 

shipped for human consumption in 

export markets. It is also proposed that 

§ 983.50 of the order be amended to 

authorize the Committee, with approval 

of the Secretary, to establish different 

aflatoxin requirements for different 

markets. 

Proposal Number 2—Quality 

Regulation Authority 

Section 983.51 of the order provides 

authority for the Committee, with 

approval of the Secretary, to establish 

quality and inspection requirements for 

pistachios shipped for domestic human 

consumption. There are currently no 

such requirements in effect under the 

order. 

When the order was promulgated in 

2004, specific requirements pertaining 

to quality levels were contained in the 

provisions of the order. These 

provisions were in effect from 2004 

through 2007. In December 2007, the 

requirements were suspended because 

they were no longer meeting the 

industry’s needs. In November 2009, the 

order was amended and the suspended 

quality requirements were removed 

from the order and replaced with broad 

authority for quality regulation. At that 

time, there was no desire by the 

industry to reinstate the specific quality 

regulations previously in effect or any 

intent to recommend any form of quality 

regulation. However, the industry 

desired to retain authority to implement 

some form of quality regulation in the 

future if circumstances warrant. 

Informal rulemaking would be required 

to reinstate quality regulations. 

Applying similar logic, the Committee 

recommended at its July 2010 meeting 

to amend the broad quality authority 

under the order to include the authority 

to establish requirements for export 

shipments, in addition to domestic 

shipments. No quality regulations are 

currently being contemplated by the 

industry; however, the Committee 

believes it would be prudent to expand 

the current authority for quality 

regulations to include export shipments. 

Adding broad authority for quality 

regulations for exports would provide 

flexibility in the order by increasing the 

industry’s ability to respond to quality 

issues related to exports, if they arise. 

Exports are becoming an increasingly 

important market for the industry and 

currently account for nearly two-thirds 

of domestically produced pistachios. 

The Committee also recommended 

adding authority to the order to 

establish different quality requirements 

for different markets. Similar to the 

discussion under Proposal Number 1, 

different markets to which pistachios 

are shipped may have different quality 

requirements or concerns. The proposed 

amendment would therefore authorize 

different quality regulations for different 

markets. This would provide additional 

flexibility to the order to address 

different market needs. 

If the order is amended to include 

authority to establish quality regulations 

for shipments to export markets, 

specific regulations would need to be 

added to the order’s rules and 

regulations through the informal 


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rulemaking process. If the industry 

chooses to pursue such regulations, the 

Committee would meet to consider and 

analyze the available information in 

developing a recommendation to AMS. 

Any recommendation of the Committee 

concerning potential quality regulations 

would require a unanimous vote of 12 

Committee members or alternate 

members acting in their stead according 

to the voting requirements in § 983.43 of 

the order. 

For the reasons stated above, it is 

proposed that § 983.51, Quality 

regulations, be amended to authorize 

the Committee, with approval of the 

Secretary, to establish quality and 

inspection requirements for pistachios 

to be shipped for human consumption 

in export markets. It is also proposed 

that § 983.51 of the order be amended to 

authorize the Committee, with approval 

of the Secretary, to establish different 

quality requirements for different 

markets. 

Proposal Number 3—Conforming 

Change 

Section 983.57 of the order provides 

authority to establish reporting and 

disposition procedures for pistachios 

that do not meet aflatoxin or quality 

requirements (substandard product) to 

ensure they are not shipped for 

domestic human consumption. Since 

the order currently authorizes regulation 

of the domestic market only, § 983.57 

does not reference the utilization of 

reporting and disposition procedures to 

ensure that substandard pistachios are 

not shipped to other markets besides the 

domestic market. Therefore, if Proposal 

Numbers 1 and 2 are adopted to include 

authority to regulate other markets, a 

conforming change should be made to 

§ 983.57 to reference the utilization of 

reporting and disposition procedures to 

ensure substandard pistachios are not 

shipped to any market for which 

regulations exist. 

It is therefore proposed that § 983.57, 

Substandard pistachios, be amended to 

authorize reporting and disposition 

procedures for substandard pistachios to 

ensure they are not shipped for human 

consumption in any market for which 

aflatoxin and/or quality requirements 

exist pursuant to § 983.50 and/or 

§ 983.51. 

Proposal Number 4—Correction 

Section 983.53 of the order pertains to 

aflatoxin testing of minimal quantities 

of pistachios and provides, in part, that 

lots of pistachios exceeding the 

maximum tolerance level for aflatoxin 

may be tested again after being 

reworked as specified in § 983.50. The 

reference to § 983.50 is incorrect. The 

correct section, which pertains to 

rework procedures, is § 983.52. This 

proposed amendment recommended by 

the Committee would correct the 

erroneous reference. 

It is therefore proposed to amend 

§ 983.53 by removing the reference to 

§ 983.50 in paragraph (a) (2) and 

replacing it with the correct reference to 

§ 983.52. 

Initial Regulatory Flexibility Analysis 

Pursuant to requirements set forth in 

the Regulatory Flexibility Act (RFA) (5 

U.S.C. 601–612), the Agricultural 

Marketing Service (AMS) has 

considered the economic impact of this 

action on small entities. Accordingly, 

AMS has prepared this initial regulatory 

flexibility analysis. 

The purpose of the RFA is to fit 

regulatory actions to the scale of 

business subject to such actions in order 

that small businesses will not be unduly 

or disproportionately burdened. 

Marketing orders issued pursuant to the 

Act, and rules issued thereunder, are 

unique in that they are brought about 

through group action of essentially 

small entities acting on their own 

behalf. 

There are approximately 850 

producers and 29 handlers of pistachios 

in the production area encompassing 

California, Arizona, and New Mexico. 

The Small Business Administration 

(SBA) (13 CFR 121.201) 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. 

Based on Committee data, it is 

estimated that over 70 percent of the 

handlers ship less than $7,000,000 

worth of pistachios and would thus be 

considered small business under the 

SBA definition. It is also estimated that 

over 80 percent of the growers in the 

production area produce less than 

$750,000 worth of pistachios and would 

thus be considered small businesses 

under the SBA definition. 

The amendments proposed by the 

Committee would provide authority to 

establish aflatoxin sampling, analysis, 

and inspection requirements for 

shipments of pistachios to export 

markets, including authority to establish 

different regulations for different 

markets; provide authority to establish 

quality and inspection requirements for 

shipments of pistachios to export 

markets, including authority to establish 

different regulations for different 

markets; change a related section of the 

order concerning substandard pistachios 

to conform to the proposed addition of 

export authority; and correct an 

erroneous cross-reference to another 

section of the order. 

These proposed amendments were 

unanimously recommended at a public 

meeting of the Committee held on July 

10, 2010. None of the proposed 

amendments would have an immediate 

impact on handlers or producers if they 

are approved because they would not 

establish any requirements or 

regulations on handlers. However, the 

proposed amendments that would add 

authority to the order to regulate exports 

could impact growers and handlers in 

the industry if the authority is 

implemented. Therefore, the potential 

costs that may be associated with future 

regulation of exports is discussed below. 

In the event implementing regulations 

are subsequently recommended by the 

Committee if the proposed amendments 

are approved, additional analysis of the 

potential costs and benefits would be 

conducted as part of the informal 

rulemaking process. 

Under § 983.50 of the order and 

§ 983.150 of the administrative rules 

and regulations, sampling, analysis, and 

inspection of pistachios for aflatoxin is 

required prior to shipment to domestic 

markets. Specific procedures and 

requirements for handlers to follow are 

prescribed. It is anticipated that any 

requirements recommended for export 

shipments would be similar to those in 

effect for domestic shipments. Thus, the 

associated costs would be similar. 

The costs of complying with aflatoxin 

regulations can be broken into three 

basic elements: Sampling of the 

product, the market value of the product 

samples that are used in testing, and the 

cost of the aflatoxin analysis performed 

by laboratories. These costs can vary 

among handlers depending on their 

particular operations. In recognition of 

this, the Committee provided estimates 

of the various cost elements for 

purposes of this discussion. 

The cost of drawing samples from lots 

is estimated to range from $50.00 to 

$75.00 per lot. The variation in this cost 

can be attributed to factors such as the 

type of inspection program utilized by 

handlers. For purposes of this 

evaluation a cost factor of $70.00 per lot 

is utilized. The cost of the product used 

in sampling and testing varies 

depending upon the market price for 

pistachios. For purposes of this 

evaluation a value of $3.00 per pound 

as estimated by the Committee is 

utilized. At $3.00 per pound and a 44- 

pound sample, the cost of product used 

in sampling is $132.00 per lot. 

Laboratory costs for analyzing aflatoxin 

content are estimated to be $100.00 per 

test; with two tests per lot, the cost is 

$200.00 per lot. 


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Pistachio lots tested for aflatoxin can 

vary in size, but for purposes of this 

evaluation, a lot size of 50,000 pounds 

is used as that is a reasonable 

representative size for a typical handler 

operation. Applying the above cost 

estimates to a lot size of 50,000 pounds 

results in the following cost estimates 

on a per pound basis: 

1. Sampling cost: $0.0014 per pound 

($70.00 per lot divided by 50,000 

pounds). 

2. Value of product used in sampling: 

$0.0026 per pound ($132.00 per lot 

divided by 50,000 pounds). 

3. Analytical cost of aflatoxin testing: 

$0.0040 per pound ($200 per sample 

divided by 50,000 pounds). 

This results in a total estimated per 

pound cost of $0.0060 ($0.0014 + 

$0.0026 + $0.0040), or 0.8 cents per 

pound. 

When compared to the market price 

for pistachios, the direct costs 

associated with an aflatoxin program are 

proportionately small. Utilizing a 

market price of $3.00 per pound as used 

in the above cost estimates, the costs of 

aflatoxin sampling and testing represent 

0.27 percent of the market price. Even 

if the market price for pistachios was 

$1.00 per pound, the aflatoxin sampling 

and testing costs would be well below 

one percent of the price. 

Most handlers who shipped 

pistachios to export markets in the past 

were signatories to a state marketing 

agreement that required aflatoxin 

sampling and analysis. That program 

was terminated in 2010. Since then, 

most handlers reportedly conduct 

aflatoxin testing and certification on 

export shipments to satisfy the 

requirements of the various markets. 

Therefore, the costs discussed above are 

already being borne by handlers. 

While difficult to quantify, one of the 

primary benefits of an aflatoxin program 

is the reduced risk of a potential food 

incident. For example, in the late 1990s, 

high aflatoxin levels were detected in 

pistachios in European markets. This 

led to a 60 percent decrease in pistachio 

imports in Europe, and it took several 

years for the market to return to more 

normal levels. The U.S was not 

dominant in the European market at that 

time, but in recent years, Europe has 

become an increasingly significant 

market for U.S. pistachios. Regardless of 

the location of the market, this example 

demonstrates the devastating effect a 

food quality or food safety issue can 

have on the marketing of a product. 

Another benefit of an aflatoxin testing 

program is the resulting reduction in the 

incidence of rejected shipments at their 

destination. Many countries test product 

prior to allowing its importation. 

Product that does not meet the 

importing country’s standards can be 

rejected and returned to the shipper. It 

is estimated that the cost of handling or 

returning a rejected lot is between 

$12,000 and $15,000 per lot. Product 

that has been tested prior to shipment 

based on the requirements of its market 

destination is less likely to be rejected 

and would not incur the associated 

costs. 

Avoiding a disruption in the 

marketing of pistachios in export 

markets is important in maintaining the 

viability of the industry. Shipments of 

open inshell pistachios increased 

dramatically in recent years; from 

95,761,666 pounds in the 2004–05 

shipping season to 192,436,136 pounds 

in the 2009–10 season, according to 

Committee data. Exports represented 

approximately 63 percent of total U.S. 

pistachio shipments during the 2009–10 

season. According to statistics reported 

by the Committee, total acreage 

increased from 117,773 acres in 2004 to 

215,336 acres in 2010, representing an 

83 percent increase. Much of this 

acreage is non-bearing and will come 

into production in the near future. 

These statistics demonstrate that 

domestic production of pistachios will 

continue to increase in the future, and 

export markets must be maintained to 

accommodate the increased supplies. 

Expanding order authority to include 

establishing aflatoxin requirements 

applicable to export shipments will 

provide an additional tool to aid in the 

marketing of pistachios covered under 

the order. In the event the authority is 

implemented, the potential costs 

associated with a mandatory aflatoxin 

program for exports are expected to be 

more than offset by the potential 

benefits discussed above. 

An analysis of the potential costs of 

adding authority to the order to 

establish quality regulations is not 

possible because no quality regulations 

are currently in effect under the order, 

and none are being contemplated. 

Quality regulations were in effect for 

domestic shipments from 2004 through 

2007, but were suspended because they 

were no longer meeting the industry’s 

needs. However, the order still contains 

broad authority for domestic quality 

regulations and the industry may desire 

to reinstate them if circumstances 

warrant. As a result of the increasing 

importance of the export market as 

demonstrated above, the Committee 

recommended adding authority to the 

order for quality regulation for export 

shipments in the event circumstances in 

the future warrant their implementation. 

If such authority is added to the order, 

a unanimous action of the Committee 

would be required to recommend the 

establishment of any export quality 

regulations. In addition, informal 

rulemaking would be required for 

implementation, and an analysis of the 

potential costs and benefits would be 

conducted during that process. 

The remaining proposed amendments 

are administrative in nature and would 

have no economic impact on growers or 

handlers. One of the proposed 

amendments would add conforming 

language to another section of the order 

if other amendments are approved, and 

another proposed amendment would 

correct an incorrect section reference in 

the order. 

Alternatives to these proposals 

include making no changes at this time. 

However, the Committee believes it 

would be beneficial to have the means 

necessary to apply regulations to the 

export markets if circumstances 

warrant. 

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. 0581–0215, 

‘‘Pistachios Grown in California’’. 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 meeting, at which 

these proposals were discussed, was 

widely publicized throughout the 

pistachio 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. 

Finally, interested persons are invited 

to submit comments on the proposed 

amendments to the order, including 


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34186 Federal Register / Vol. 76, No. 113 / Monday, June 13, 2011 / Proposed Rules 

comments on the regulatory and 

informational impacts of this action on 

small businesses. 

Following analysis of any comments 

received on the amendments proposed 

in this rule, AMS will determine 

whether to proceed, and if so, would 

conduct a producer referendum. 

Information about the referendum, 

including dates and voter eligibility 

requirements, would be published in a 

future issue of the Federal Register. If 

appropriate, a final rule would then be 

issued to effectuate the amendments 

favored by producers participating in 

the referendum. 

A small business guide on complying 

with fruit, vegetable, and specialty crop 

marketing agreements and orders may 

be viewed at: http://www.ams.usda.gov/ 

MarketingOrdersSmallBusinessGuide. 

Any questions about the compliance 

guide should be sent to Antoinette 

Carter at the previously mentioned 

address in the FOR FURTHER INFORMATION

CONTACT section. 

General Findings 

The findings hereinafter set forth are 

supplementary to the findings and 

determinations which were previously 

made in connection with the issuance of 

the marketing agreement and 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 agreement and 

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 agreement and 

order, as amended, and as hereby 

proposed to be further amended, 

regulate the handling of pistachios 

grown in California, Arizona, and New 

Mexico in the same manner as, and are 

applicable only to, persons in the 

respective classes of commercial and 

industrial activity specified in the 

marketing agreement and order; 

3. The marketing agreement and 

order, as amended, and as hereby 

proposed to be further amended, are 

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 agreement and 

order, as amended, and as hereby 

proposed to be further amended, 

prescribe, 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 pistachios produced or 

packed in the production area; and 

5. All handling of pistachios 

produced or packed in the production 

area as defined in the marketing 

agreement and order is in the current of 

interstate or foreign commerce or 

directly burdens, obstructs, or affects 

such commerce. 

A 30-day comment period is provided 

to allow interested persons to respond 

to these proposals. Thirty days is 

deemed appropriate because the 

proposed changes have been widely 

publicized, and implementation of the 

changes, if adopted, would be desirable 

to benefit the industry as soon as 

possible. Any comments received on the 

amendments proposed in this rule will 

be analyzed, and if warranted, a 

producer referendum will be conducted 

to determine grower support for the 

proposed amendments. If appropriate, a 

final rule will then be issued to 

effectuate the amendments favored by 

producers participating in the 

referendum. 

List of Subjects in 7 CFR Part 983 

Marketing agreements, Pistachios, 

Reporting and recordkeeping 

requirements. 

For the reasons set forth in the 

preamble, 7 CFR part 983 is proposed to 

be amended as follows: 

PART 983—PISTACHIOS GROWN IN 

CALIFORNIA, ARIZONA, AND NEW 

MEXICO 

1. The authority citation for 7 CFR 

part 983 continues to read as follows: 

Authority: 7 U.S.C. 601–674. 

2. Revise § 983.50 to read as follows: 

§ 983.50 Aflatoxin regulations. 

The committee shall establish, with 

the approval of the Secretary, such 

aflatoxin sampling, analysis, and 

inspection requirements applicable to 

pistachios to be shipped for domestic 

human consumption as will contribute 

to orderly marketing or be in the public 

interest. The committee may also 

establish, with the approval of the 

Secretary, such requirements for 

pistachios to be shipped for human 

consumption in export markets. No 

handler shall ship, for human 

consumption in domestic, or if 

applicable, export markets, pistachios 

that exceed an aflatoxin level 

established by the committee and 

approved by the Secretary. All 

shipments to markets for which 

requirements have been established 

must be covered by an aflatoxin 

inspection certificate. The committee 

may, with the approval of the Secretary, 

establish different sampling, analysis, 

and inspection requirements, and 

different aflatoxin level requirements, 

for different markets. 

3. Revise § 983.51 to read as follows: 

§ 983.51 Quality regulations. 

For any production year, the 

committee may establish, with the 

approval of the Secretary, such quality 

and inspection requirements applicable 

to pistachios shipped for human 

consumption in domestic or export 

markets as will contribute to orderly 

marketing or be in the public interest. In 

such production year, no handler shall 

ship pistachios for human consumption 

in domestic, or if applicable, export 

markets unless they meet the applicable 

requirements as evidenced by 

certification acceptable to the 

committee. The committee may, with 

the approval of the Secretary, establish 

different quality and inspection 

requirements for different markets. 

§ 983.53 [Amended] 

4. Amend § 983.53 by removing the 

reference to ‘‘§ 983.50’’ and adding in its 

place ‘‘§ 983.52’’ in paragraph (a)(2). 

5. Revise § 983.57 to read as follows: 

§ 983.57 Substandard pistachios. 

The committee shall, with the 

approval of the Secretary, establish such 

reporting and disposition procedures as 

it deems necessary to ensure that 

pistachios which do not meet aflatoxin 

and quality requirements are not 

shipped for human consumption in 

those markets for which such 

requirements exist pursuant to § 983.50 

and § 983.51. 

Dated: June 5, 2011. 

Ellen King, 

Acting Administrator, Agricultural Marketing 

Service. 

[FR Doc. 2011–14432 Filed 6–10–11; 8:45 am] 

BILLING CODE 3410–02–P 


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