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[Federal Register Volume 77, Number 136 (Monday, July 16, 2012)]
[Proposed Rules]
[Pages 41707-41709]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-17229]

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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. 77, No. 136 / Monday, July 16, 2012 / 
Proposed Rules

[[Page 41707]]

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 51

[Doc. Number FV-11-0046]

United States Standards for Grades of Almonds in the Shell

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: The Agricultural Marketing Service (AMS), of the Department of 
Agriculture (USDA), is proposing to revise the United States Standards 
for Grades of Almonds in the Shell. AMS received written requests from 
the produce industry to amend the standards to align inspection 
procedures for incoming inspections (based on the marketing order) and 
outgoing inspections (based on the grade standards). Therefore, AMS is 
proposing to change the determination of internal defects from count to 
weight.

DATES: Comments must be received by August 15, 2012.

ADDRESSES: Interested persons are invited to submit written comments to 
the Standardization and Training Branch, Fresh Products Division, Fruit 
and Vegetable Programs, Agricultural Marketing Service, U.S. Department 
of Agriculture, National Training and Development Center, Riverside 
Business Park, 100 Riverside Parkway, Suite 101, Fredericksburg, VA 
22406: Fax (540) 361-1199, or on the Web at: www.regulation.gov. 
Comments should make reference to the dates and page number of this 
issue of the Federal Register and will be made available for public 
inspection in the above office during regular business hours. Comments 
can also be viewed on the www.regulations.gov Web site. The current 
United States Standards for Almonds in the Shell, along with the 
proposed changes, will be available either through the address cited 
above or by accessing the AMS, Fresh Products Division Web site at: 
http://www.ams.usda.gov/freshinspection.

FOR FURTHER INFORMATION CONTACT: Dr. Carl Newell, at the above address 
or call (540) 361-1120.

SUPPLEMENTARY INFORMATION: 

Executive Order 12866 Regulatory Flexibility Act

    This proposed rule has been determined to be not significant for 
purposes of Executive Order 12866 and, therefore, has not been reviewed 
by the Office of Management and Budget.
    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act (RFA) (5 U.S.C. 601-612), AMS has considered the 
economic impact of the proposed action on small entities. The purpose 
of the RFA is to fit regulatory actions to the scale of businesses 
subject to such actions so that small businesses will not be unduly or 
disproportionately burdened. Accordingly, AMS has prepared this initial 
regulatory flexibility analysis. Interested parties are invited to 
submit information on the regulatory and informational impacts of these 
actions on small businesses.
    This rule proposes to revise the United States Standards for Grades 
of Almonds in the Shell (standards) that were issued under the 
Agricultural Marketing Act of 1946 (7 U.S.C. 1621-1627). Standards 
issued under the 1946 Act are voluntary.
    Small agricultural service firms, which include handlers, have been 
defined by the Small Business Administration (SBA) (13 CFR 121.201) as 
those having annual receipts of less than $7,000,000 and small 
agricultural producers have been defined as those having annual 
receipts of less than $750,000.
    There are approximately 53 handlers of almonds that would 
potentially be affected by the changes set forth in this proposed rule 
and approximately 6,500 producers of almonds. Information provided by 
the Almond Board of California (ABC) indicates that approximately 36 
percent of the handlers would be considered small agricultural service 
firms.
    According to data reported by the National Agricultural Statistics 
Service (NASS), the two-year average crop value for 2008-09 and 2009-10 
was $2.566 billion. Dividing that average by 6,500 producers yields 
average estimated producer revenues of $394,769, which suggests that 
the majority of almond producers would be considered small entities 
according to the SBA's definition.
    The California almond bearing acreage increased approximately 9 
percent between 2008 and 2010, from 680,000 to 740,000 acres. 
Approximately 1.643 billion pounds (shelled basis) of almonds were 
produced during the 2009-10 season. More than two thirds of 
California's almond crop is exported to approximately 90 countries 
worldwide, and comprises nearly 80 percent of the world's almond 
supply.
    The changes proposed herein will have the effect of improving 
grading methods and accuracy without adding any additional financial 
burden to buyers or sellers of almonds in the shell. This rule changes 
one step in a multi-step grading procedure (7 CFR 51.2080) and changes 
the method of determining one of five tolerances used in determining 
grade (7 CFR 51.2075(b)(5)). The outgoing inspection procedure will 
become more closely aligned with incoming inspection by shifting the 
basis (from count to weight) in the standards for determining the 
percentage of internal defects in an inspection sample of almonds in 
the shell.
    In addition to simplifying the grading process, the weight basis 
would yield a more accurate percentage of internal defects. With a 
count method, a defect such as shriveling would result in a particular 
kernel being counted as one of the 300 kernels in the sample with 
internal defects, even if the defect left only a small portion of the 
original kernel in the sample. Due to its lower weight relative to a 
fully formed kernel, a shriveled kernel has a smaller impact on the 
percentage of internal defects when the sample is weighed rather than 
counted.
    The lower average percentage of internal defects using the weight 
method was confirmed by a review of shipping point inspection records, 
with 14 examples in which both the count and weight method were used on 
the same sample of inshell almonds. The average serious damage 
percentages of the count method and the weight method were 1.5 percent 
and 0.8 percent, respectively. Smaller percentages of defects in 
sampled lots using the weight method will mean

[[Page 41708]]

larger quantities of almonds meet a particular grade, which would 
positively affect the quality of the almonds, as it would yield more 
accurate percentages of defects, resulting in higher payments to 
growers.
    Shifting the determination of internal (kernel) defects from a 
count basis to a weight basis in the standards is expected to 
contribute to efficiencies in the grading process. It would make the 
internal defects aspect of the outgoing inspection process consistent 
with that of the incoming inspection. Weighing rather than counting the 
kernels may result in slightly more time in the inspection process, but 
any potential effect on the cost of inspections is expected to be minor 
or nonexistent, and would be offset by the benefits.
    There is no disproportionate impact on smaller entities; entities 
of all sizes will benefit.
    This rule would not impose any additional reporting or 
recordkeeping requirements on either small or large almond producers, 
handlers or exporters and will be done at no cost to the industry.
    The use of grading services and grading standards is voluntary 
unless required by a specific Act, Federal Marketing Order or 
Agreement, or other regulations governing domestic, import or export 
shipments.
    USDA has not identified any Federal rules that duplicate, overlap, 
or conflict with this rule. However, there is a marketing program which 
regulates the handling of almonds under 7 CFR part 981. The revision 
being proposed in this action only affects the inspection procedures 
for internal defects in the standards. As such, the proposed action 
would not affect almonds in the shell under the marketing order.
    Alternatives were considered for this action. One alternative would 
be to not issue a proposed rule. However, the need for revisions 
remains due to differing procedures for incoming and outgoing almond 
inspections, and the proposal is the result of a request by industry. 
Further, the purpose of these standards is to facilitate the marketing 
of agricultural commodities.

Executive Order 12988

    The rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This action is not intended to have retroactive effect. 
There are no administrative procedures which must be exhausted prior to 
any judicial challenge to the provisions of the rule.
    Section 203(c) of the Act directs and authorizes the Secretary of 
Agriculture ``to develop and improve standards of quality, condition, 
quantity, grade and packaging and recommend and demonstrate such 
standards in order to encourage uniformity and consistency in 
commercial practices.'' AMS is committed to carrying out this authority 
in a manner that facilitates the marketing of agricultural commodities 
and makes copies of official standards available upon request.

Background

    On March 11, 2011, AMS received a letter from the Almond Board of 
California (Board) requesting that the procedure for measuring internal 
(kernel) defects in the United States Standards for Grades of Almonds 
in the Shell be changed from a count basis to a weight basis. The 
purpose of this change is to align incoming and outgoing inspection 
procedures.
    Currently, almonds must undergo incoming inspections and may 
undergo outgoing inspections. The almond marketing order (part 981--
Almonds Grown in California) mandates that the percentage of inedible 
kernels is determined during an incoming inspection. As required in the 
marketing order (7 CFR 981.42 and 981.442 (Quality Control)), Federally 
licensed state inspectors perform these inspections on 100% of the 
product moving from growers to handlers (packers). Inedible kernel is 
defined in section 981.8 and 981.408 of the marketing order and is 
based on internal (kernel) defects as defined in the standards, in 
sections 51.2087 (Decay), 51.2088 (Rancidity), 51.2089 (Damage) and 
51.2090 (Serious Damage).
    Federally licensed state inspectors also perform outgoing 
inspections, which are voluntary, on approximately 75% of all of the 
almonds going from the handlers to domestic and international markets, 
according to shipping point records maintained by Federal State 
Inspection.
    The current procedures for determining the percentage of defective 
kernels in the two different inspections are not the same. For incoming 
inspections, the percentage of inedible kernels is determined on a 
weight basis. With outgoing inspections, however, determining the 
percentage of internal (kernel) defects, which is one step in a multi-
step procedure specified in the standards for determining U.S. grade, 
is done through a combination of count and weight of the nuts in the 
sample. This proposed change would more closely align the procedures of 
the incoming and outgoing inspections.
    A key reason for making this change is the increasing magnitude of 
exports of almonds in the shell. Between the 2006/07 and 2009/10 
seasons, export shipments of almonds in the shell doubled, rising from 
148 to 297 million pounds (inshell basis), according to trade data from 
the Foreign Agricultural Service of USDA. During this same time period, 
the number of handlers exporting almonds in the shell increased by 42%. 
Due to the substantial increase in the number of handlers and volume of 
shipments, the Board received numerous inquiries regarding the reasons 
for the different procedures for determining internal defects on 
incoming and outgoing inspections.
    A number of handlers asked the Board's Food Quality and Safety 
Committee (committee) to look into how to change the standards to make 
outgoing inspections more consistent with the incoming inspection 
method. Determining the percentage of nuts with internal defects is the 
third of three required steps in section 51.2080 Determination of 
Grade. In addition, a 10 percent tolerance for internal (kernel) 
defects is one of five tolerances that are specified in section 
51.2075(b)(5) for determining whether a lot of inshell almonds is 
graded as U.S. No. 1. Committee staff queried handlers that ship 
almonds in the shell about changing the determination of internal 
defects from a count basis to a weight basis, which would apply to both 
of these sections.
    AMS is proposing to amend section 51.2075(b)(5) by changing the 
word ``count'' in the first line to ``weight.'' The other four 
tolerances specified in section 51.2075(b) remain unchanged. AMS is 
also proposing to amend section 51.2080 by changing the word ``count'' 
in the last line to ``weight.'' This would make the internal defects 
aspect of the outgoing inspection process consistent with that of the 
incoming inspection mandated by the marketing order.
    The proposed rule provides for a 30-day comment period for 
interested parties to comment on the revisions to the standard.

List of Subjects in 7 CFR Part 51

    Agricultural commodities, Food grades and standards, Fruits, Nuts, 
Reporting and recordkeeping requirements, Trees, Vegetables.

    For reasons set forth in the preamble, 7 CFR part 51 is proposed to 
be amended as follows:

PART 51--[AMENDED]

    1. The authority citation for part 51 continues to read as follows:

    Authority:  7 U.S.C. 1621-1627.

    2. In Sec.  51.2075, paragraph (b)(5) is revised to read as 
follows:

[[Page 41709]]

Sec.  51.2075  U.S. No. 1.

* * * * *
    (b) * * *
    (5) For internal (kernel) defects. 10 percent, by weight, for 
almonds with kernels failing to meet the requirements of this grade: 
Provided, that not more than one-half of this tolerance or 5 percent 
shall be allowed for kernels affected by decay or rancidity, damaged by 
insects or mold or seriously damaged by shriveling: And provided 
further, that no part of this tolerance shall be allowed for live 
insects inside the shell.
* * * * *
    3. Sec.  51.2080 is revised to read as follows:

Determination of Grade

Sec.  51.2080  Determination of Grade.

    In grading the inspection sample, the percentage of loose hulls, 
pieces of shell, chaff and foreign material is determined on the basis 
of weight. Next, the percentages of nuts which are of dissimilar 
varieties, undersize or have adhering hulls or defective shells are 
determined by count, using an adequate portion of the total sample. 
Finally, the nuts in that portion of the sample are cracked and the 
percentage having internal defects is determined on the basis of 
weight.

    Dated: July 11, 2012.
David R. Shipman,
Administrator, Agricultural Marketing Service.
[FR Doc. 2012-17229 Filed 7-13-12; 8:45 am]
BILLING CODE 3410-02-P
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