Vol. 76 Friday, No. 83 April 29, 2011

Part V

Department of Agriculture

Agricultural Marketing Service

7 CFR Part 970 Proposed National Marketing Agreement Regulating Leafy Green Vegetables; Recommended Decision and Opportunity To File Written Exceptions to Proposed Marketing Agreement No. 970; Proposed Rule

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DEPARTMENT OF AGRICULTURE the date and page number of this issue marketing agreements and orders (7 CFR of the Federal Register. Comments will part 900). Agricultural Marketing Service be made available for public inspection The proposed agreement is based on in the Office of the Hearing Clerk during the record of a public hearing held on: 7 CFR Part 970 regular business hours, or can be viewed September 22 through 24, 2009, in [Doc. No. AO–FV–09–0138; AMS–FV–09– at: http://www.regulations.gov. Monterey, California; September 30 0029; FV09–970–1] To the extent practicable, all through October 1, 2009, in documents filed with the hearing clerk Jacksonville, Florida; October 6, 2009, Proposed National Marketing also should be submitted electronically in Columbus, Ohio; October 8, 2009, in Agreement Regulating Leafy Green to Melissa Schmaedick at the e-mail Denver, Colorado; October 14 and 15, Vegetables; Recommended Decision address noted for her in the FOR 2009, in Yuma, Arizona; October 20, and Opportunity To File Written FURTHER INFORMATION CONTACT section. 2009, in Syracuse, New York; and Exceptions to Proposed Marketing FOR FURTHER INFORMATION CONTACT: October 22, 2009, in Charlotte, North Agreement No. 970 Antoinette Carter, Marketing Order Carolina. Administration Branch, Fruit and The hearing was held to receive AGENCY: Agricultural Marketing Service, evidence on the proposed agreement Vegetable Programs, AMS, USDA, 1400 USDA. from producers, handlers, and other Independence Avenue, SW., Stop 0237, ACTION: Proposed rule and opportunity interested parties. The Notice of Public Washington, DC 20250–0237; to file exceptions. Hearing was published in the Federal Telephone: (202) 720–2491, Fax: (202) Register on September 3, 2009 (74 FR SUMMARY: This recommended decision 720–8938, or E-mail: 45565). proposes the issuance of a marketing [email protected]; or agreement (agreement) under the Melissa Schmaedick, Marketing Order Background Agricultural Marketing Agreement Act Administration Branch, Fruit and In mid-September 2006, FDA issued of 1937 to cover the handling of fresh Vegetable Programs, AMS, USDA, 805 the first public alerts of a multi-State leafy green vegetables in the United SW. Broadway, Suite 930, Portland, OR Escherichia coli (E. coli) outbreak linked States. Leafy green vegetables include 97205; Telephone (503) 326–2724, Fax to fresh spinach grown in California’s lettuce, spinach, cabbage, and similar (503) 326–7440, or E-mail: Salinas Valley. The resulting recall was items. The proposed agreement would [email protected]. the largest ever for fresh leafy green authorize the development and Small businesses may request vegetables. Investigations by FDA and implementation of production and information on this proceeding by the California Department of Health handling regulations (audit metrics) to contacting Antoinette Carter at the Services, in cooperation with the reflect United States Food and Drug address provided for her above. Centers for Disease Control and Administration (FDA) Good SUPPLEMENTARY INFORMATION: Prior Prevention, and USDA’s Animal and Agricultural Practices (GAPs) and Good documents in this proceeding: Notice of Plant Health Inspection Service, Manufacturing Practices (GMPs), and Public Hearing issued on August 31, concluded that the E. coli United States Department of Agriculture 2009, and published in the September 3, contamination might have been (USDA) Good Handling Practices 2009, issue of the Federal Register (74 attributed to environmental factors in (GHPs). The program would be FR 45565); and Notice of Additional the production area. voluntary, and cover both United States Time for Public Hearing issued on In response to this E. coli outbreak, and imported leafy green vegetables. September 18, 2009, and published in members of the California leafy green Signatory handlers would agree to only the September 23, 2009, issue of the vegetable industry initiated the handle leafy green vegetables that meet Federal Register (74 FR 48423). establishment of a State marketing the requirements of the program. The These actions are governed by the agreement for handlers of leafy green program would be financed primarily by provisions of sections 556 and 557 of vegetables. The California Leafy Green assessments collected from signatory title 5 of the United States Code and are Products Handler Marketing Agreement first handlers. A Board, whose members therefore excluded from the became effective February 10, 2007. At would be appointed by the Secretary, requirements of Executive Order 12866. the time of the hearing, 99 percent of would administer the proposed leafy green vegetables produced and Preliminary Statement agreement with USDA oversight. This handled in California were subject to rule also announces USDA Agricultural Notice is hereby given of the filing the State program. In October 2007, a Marketing Service’s (AMS) intention to with the Hearing Clerk of this similar program was implemented in request approval by the Office of recommended decision with respect to Arizona: The Arizona Leafy Green Management and Budget for new the proposed marketing agreement Products Shipper Marketing Agreement. information collection requirements to regulating the handling of leafy green Approximately 75 percent of the leafy implement this program. vegetables in the United States, and the green vegetables produced and handled DATES: Written exceptions must be filed opportunity to file written exceptions in Arizona were being regulated under by July 28, 2011. Pursuant to the thereto. Copies of this recommended that State’s program at the time of the Paperwork Reduction Act, comments on decision can be obtained from Melissa hearing. While both the California and the information collection burden must Schmaedick, whose address is listed Arizona programs are voluntary, the be received by July 28, 2011. above. requirements of these State marketing ADDRESSES: Written exceptions should This recommended decision is issued agreements are mandatory for all be filed with the Hearing Clerk, United pursuant to the provisions of the signatories within each respective State. States Department of Agriculture, 1400 Agricultural Marketing Agreement Act On October 4, 2007, AMS published Independence Ave., SW., Room 1031–S, of 1937, as amended (48 Stat. 31, as an Advance Notice of Proposed Washington, DC 20250–9200, Fax: (202) amended; 7 U.S.C. 601–674), hereinafter Rulemaking (ANPR) in the Federal 720–9776 or via the Internet at http:// referred to as the ‘‘Act’’, and the Register (72 FR 56678) in response to www.regulations.gov. All exceptions applicable rules of practice and industry interest in the establishment of should reference the docket number and procedure governing the formulation of a national marketing program to address

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the handling of leafy green vegetables authority of the Act and that it be academia, and others. Some witnesses nationwide. The ANPR explored the administered by USDA. Proponents supported the proposed agreement, concept of establishing a regulatory explained that, if implemented, an while others opposed it or suggested program to reduce microbial administrative body comprised of leafy modifications or changes to it. contamination and improve product green vegetable producers, handlers, In addition to other opponents of the quality of leafy green vegetables and other representatives of the leafy proposed agreement, an opponent group available in the United States’ produce green vegetable industry should be comprised of member organizations of market. Proposals and comments were established to administer the program the National Organic Coalition (NOC) sought from the public, particularly under USDA oversight. In addition to testified at the hearing. Members of the from producers, handlers, buyers, and the administrative body, proponents NOC include: Beyond Pesticides, Center sellers of leafy green vegetables. proposed two committees: One to assist for Food Safety, Equal Exchange, Food The ANPR resulted in the submission the administrative body in the and Water Watch, Maine Organic and consideration of more than 3,500 identification and development of audit Farmers and Gardeners Association, public comments on the need and level metrics, and one to advise the Midwest Organic Farmers and of support for a nationwide regulatory administrative body on research and Gardeners Association, National program for GAPs, GHPs, and GMPs. development projects administered Cooperative Grocers Association, These comments may be viewed at under the program. Northeast Organic Dairy Producers http://www.regulations.gov and by Proponents defined the proposed Alliance, Northeast Organic Farming typing the following docket number into production area as the 50 States of the Association-Interstate Council, the search function: AMS–FV–07–0090. United States of America and the Organically Grown Company, Rural On June 10, 2009, a petition for District of Columbia. It was further Advancement Foundation International- rulemaking and a request for public proposed that the agreement be financed USA, and the Union of Concerned hearing on a proposed national primarily by assessments collected from Scientists. agreement for leafy green vegetables signatory first handlers on the volume of Witnesses opposed to the program were submitted to AMS. The proposal leafy green vegetables handled. In cited several areas of concern. These was submitted by a group of producers, addition, contributions could be included: The cost of becoming handlers, and interested persons received for the purposes of funding compliant and maintaining compliance representing a cross-section of the research and development activities. with the proposed agreement; the national fresh and fresh-cut produce As a voluntary program, proponents existing proliferation of audit industry, hereinafter referred to as the explained that only signatory handlers requirements from private sector ‘‘proponents’’ or ‘‘proponent group’’. The to the proposed agreement would be customers, the addition of a new and proponent group is comprised of the regulated. Signatory handlers would be potentially conflicting set of audit membership of the following required to only handle leafy green requirements, and ‘‘audit fatigue’’; the organizations: United Fresh Produce vegetables that were produced and need for science-based production and Association, Produce Marketing handled in adherence to specific handling requirements, as well as the Association, Georgia Fresh Vegetable requirements (audit metrics) established need for adequate peer-review of Association, Georgia Farm Bureau, under the proposed agreement. scientific studies used to establish them; Texas Vegetable Association, Arizona Proponents stated that audit metrics potential conflicts between existing Farm Bureau, Leafy Greens Council, should be science-based, scalable, and Federal, State, and local conservation, California Farm Bureau, California Leafy regionally applicable in order to wildlife, and environmental regulations Greens Products Handler Marketing accommodate compliance of varying and any proposed metrics; the need for Agreement, Grower-Shipper Association size and types of operations. Moreover, recognition of organic and other non- of Central California, Western Growers, any audit metrics proposed under the conventional production and handling and the Imperial Valley Vegetable program would require approval of the practices in the development of audit Growers Association. The proponents, USDA prior to implementation. metrics; the appropriateness and whose membership includes both Proponents explained that audits authority for USDA oversight of the conventional and organic producers and should be conducted by the USDA proposed agreement; and, the need for handlers, as well as business entities of Inspection Service, or persons or a national program. all sizes, claim to represent a majority organizations authorized to audit on its At the conclusion of the hearing, the of the volume of leafy green vegetables behalf, to verify signatory handler Administrative Law Judge fixed January produced and handled for the United compliance to the proposed agreement. 13, 2010, as the due date for interested States market. If implemented, proponents stated that persons to file proposed findings and In their request and at the hearing, the such audits should be conducted on conclusions or written arguments based proponents proposed the establishment both domestic and imported product on the evidence received at the hearing. of a program that would oversee a handled by signatory handlers. Upon a motion for extension from the systematic application of good One hundred and twenty individuals proponents as well as member agricultural production, handling, and testified during the 9 days of hearings organizations of the National Organic manufacturing practices for leafy green which resulted in 4,935 pages of Coalition, the date was extended until vegetables. Proponents stated that the testimony. One hundred and thirty-nine January 27, 2010. proposed agreement would minimize exhibits were submitted. Witnesses Sixteen briefs were filed in total. the potential for microbial represented leafy green producers and Those submitting briefs included: contamination in production and handlers, and representatives from Pollinator Partnership, Global Organic handling systems and would improve stakeholder interest groups including Specialty Source, Inc., Chiquita Brands consumer confidence in leafy green State and local government International, Inc., Arizona Leafy Green vegetables in the United States market. representatives, certified organic Products Shipper Marketing Agreement, Proponents supported the auditors, organic and sustainable Office of the Attorney General for the establishment of a voluntary program agriculture advocacy groups, consumer State of Arizona, Episcopal Diocese of that would require mandatory advocacy groups, conservation and California, DNO, Inc., Duda Farm Fresh compliance for its signatories under the wildlife advocacy organizations, Foods, Inc., National Organic Coalition

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(including Food and Water Watch, and California Roundtable on include numerical redesignations of Carolina Farm Stewardship Association, Agriculture and the Environment. sections, combining of regulatory text, the addition of new provisions, and and Florida Certified Organic Growers Overview and Consumers, Inc.), Canadian clarifications. For ease of reference in Horticultural Council, Partners for After extensive analysis and review of reading this recommended decision, the Sustainable Pollination, Association of the hearing record, USDA has following table provides a summary that Food and Drug Officials, Massachusetts incorporated in this recommended identifies the differences between the Farm Bureau Federation, Inc., Grower’s decision changes and revisions to the sections proposed in the Notice of Management, Inc., Western Growers, text of the proposed marketing Hearing and the sections proposed in agreement. Changes and modifications this recommended decision.

Recommended Notice of hearing Changes and revisions decision

970.1 ...... 970.1 NEW ...... 970.2 970.2 ...... REDESIGNATED AND REVISED ...... 970.3 970.3 ...... REDESIGNATED AND REVISED ...... 970.4 NEW ...... 970.5 970.4 ...... REDESIGNATED AND REVISED ...... 970.6 970.6 ...... REDESIGNATED AND REVISED ...... 970.8 NEW ...... 970.9 970.7 ...... REDESIGNATED AND REVISED ...... 970.10 970.8 ...... REDESIGNATED AND REVISED ...... 970.11 970.9 ...... REDESIGNATED AND REVISED ...... 970.12 970.10 ...... REDESIGNATED AND REVISED ...... 970.13 970.11 ...... REDESIGNATED AND REVISED ...... 970.14 970.12 ...... REDESIGNATED AND REVISED ...... 970.15 970.13 ...... REDESIGNATED AND REVISED ...... 970.16 970.14 ...... REDESIGNATED AND REVISED ...... 970.17 970.15 ...... REDESIGNATED AND REVISED ...... 970.18 970.16 ...... REDESIGNATED AND REVISED ...... 970.19 970.17 ...... REDESIGNATED AND REVISED ...... 970.20 NEW ...... 970.21 NEW ...... 970.22 970.18 ...... REDESIGNATED AND REVISED ...... 970.23 NEW ...... 970.24 970.19 ...... REDESIGNATED ...... 970.25 970.20 ...... REDESIGNATED AND REVISED ...... 970.27 970.21 ...... REDESIGNATED AND REVISED ...... 970.19 970.22 ...... REDESIGNATED AND REVISED ...... 970.26 970.23 ...... REDESIGNATED ...... 970.28 NEW ...... 970.29 970.24 ...... REDESIGNATED AND REVISED ...... 970.30 970.25 ...... REDESIGNATED ...... 970.31 NEW ...... 970.32 970.26 ...... REDESIGNATED AND REVISED ...... 970.33 NEW ...... 970.34 970.27 ...... REDESIGNATED AND REVISED ...... 970.35 NEW ...... 970.36 970.28 ...... REDESIGNATED AND REVISED ...... 970.37 970.35 ...... REDESIGNATED AND REVISED ...... 970.39 970.40 ...... REVISED ...... 970.40 NEW ...... 970.41 970.41 ...... REDESIGNATED AND REVISED ...... 970.42 970.42 ...... REDESIGNATED AND REVISED ...... 970.43 970.43 ...... REDESIGNATED AND REVISED ...... 970.44 970.44 ...... REDESIGNATED AND REVISED ...... 970.45 970.45 ...... REDESIGNATED AND REVISED ...... 970.46 970.46 ...... REDESIGNATED AND REVISED ...... 970.47 970.47 ...... REDESIGNATED AND REVISED ...... 970.48 970.48 ...... REDESIGNATED AND REVISED ...... 970.49 970.49 ...... REDESIGNATED AND REVISED ...... 970.50 970.50 ...... REDESIGNATED AND REVISED ...... 970.51 970.55 ...... REVISED ...... 970.55 970.56 ...... REVISED ...... 970.56 970.57 ...... REVISED ...... 970.57 970.58 ...... REVISED ...... 970.58 970.65 ...... REVISED ...... 970.65 970.66 ...... REVISED ...... 970.66 970.67 ...... REVISED ...... 970.67 970.68 ...... REVISED ...... 970.68 970.69 ...... REVISED ...... 970.69 970.70 ...... REVISED ...... 970.70 970.71 ...... REVISED ...... 970.71

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Recommended Notice of hearing Changes and revisions decision

970.72 ...... REVISED ...... 970.72 970.75 ...... REVISED ...... 970.75 970.80 ...... REVISED ...... 970.80 970.81 ...... REVISED ...... 970.81 970.82 ...... REVISED ...... 970.82 970.83 ...... REVISED ...... 970.83 970.85 ...... REVISED ...... 970.85 970.86 ...... REVISED ...... 970.86 970.87 ...... REVISED ...... 970.87 970.88 ...... 970.88 970.89 ...... REVISED ...... 970.89 970.90 ...... 970.90 970.91 ...... REVISED ...... 970.91 970.92 ...... 970.92 970.93 ...... REVISED ...... 970.93 970.94 ...... 970.94 970.95 ...... REVISED ...... 970.95 970.96 ...... REVISED ...... 970.96 970.97 ...... REVISED ...... 970.97 970.98 ...... REVISED ...... 970.98 NEW ...... 970.99

This recommended decision takes (d) Whether the proposed agreement Material Issue Number 1—Current of into consideration the record of the should include the authority to incur Interstate Commerce or Foreign public hearing as well as the arguments expenses and establish procedures to Commerce contained in the post-hearing briefs. The levy assessments on signatory first The record indicates that the handling merits of these arguments are discussed handlers to obtain revenue for paying of leafy green vegetables grown in the in the findings and conclusions of this such expenses; United States, or leafy green vegetables recommended decision. (e) Whether the proposed agreement grown outside the United States and should include the authority to establish Material Issues imported by United States handlers, is signatory handler reporting and in the current of interstate or foreign The material issues presented on the recordkeeping requirements; commerce or directly burdens, record of hearing are as follows: (f) Whether the proposed agreement 1. Whether the handling of leafy green obstructs, or affects such commerce. should require signatory handler Evidence is that the leafy green vegetables in the production area is in compliance with all provisions of the vegetable industry is a highly integrated, the current of interstate commerce or agreement and with any regulations complex system of large, mid-size, and foreign commerce, or directly burdens, issued under it; small producers delivering product to obstructs, or affects such commerce; (g) Whether the proposed agreement 2. Whether market conditions justify handlers, retailers, and foodservice should include the authority to establish a need for a Federal marketing operators nation-wide. Leafy green rules, regulations, or safeguards for agreement which would tend to vegetables may be produced in one exemption from the requirements of the effectuate the declared policy of the Act; State, processed in another State, and agreement; 3. What the definition of the then shipped for consumption to many production area and the commodity to (h) Whether the proposed agreement States or nationally. Moreover, the be covered by the proposed agreement should include the authority to establish product of one or more producers of should be; or provide for the establishment of varying sizes and origin may be handled 4. What the identity of the persons research and market development by one or more handlers, also of varying and the activities to be regulated under projects; size or origin. the proposed agreement should be; (i) Whether the proposed agreement Evidence also is that leafy green 5. What the specific terms and should include additional terms and vegetables are imported, mainly from provisions of the proposed agreement conditions as set forth in § 970.85 Mexico and Canada, and that such leafy should be, including: through § 970.98 of the Notice of green vegetables are often co-mingled (a) The definition of terms used Hearing published in the Federal with United States produced leafy green therein, which are necessary and Register on September 3, 2009 (74 FR vegetables and distributed throughout incidental to attain the declared 45565), which are common to all the United States market. Similarly, objectives and policy of the Act; agreements; and United States produced leafy green (b) Whether an administrative body 6. What the handler sign-up process vegetables are regularly exported, should be established to assist USDA in should be, and if provisions should be primarily to Canada. Exported leafy the administration and oversight of the made for signatory handlers to green vegetables may contain product proposed agreement, and what the discontinue participation in the produced by a variety of producers, membership composition, program. varying in size and origin, and may be administrative procedures, powers, and handled by one or more handlers. Findings and Conclusions duties of that body should be; For these reasons, evidence confirms (c) Whether the proposed agreement The following findings and that the handling of leafy green should include the authority to establish conclusions on the material issues are vegetables is at multiple levels of regulations and audit requirements that based on the evidence presented at the interstate or foreign commerce and has would apply to signatory handlers; hearing and the record thereof. an effect on such commerce.

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Industry Overview which can be found at http:// (head, leaf, and romaine), spinach, and www.bluebook.org. fresh cabbage. Of the 2008 production Producers and Handlers According to the record, many small value, lettuce crops accounted for 79 According to USDA Census of and mid-size producers also operate as percent, cabbage accounted for 15 Agriculture data (Census) and other handlers by way of their direct sales to percent, and spinach accounted for 7 USDA data presented at the hearing, consumers, foodservice operators, or percent, for a total of 81 percent. Other there were 8,216 farms that harvested retailers. Evidence is that the Blue Book minor fresh leafy green vegetable crops, 433,023 acres of leafy green vegetables likely does not account for many of such as collards, escarole, endives and specifically for the fresh market in 2007. these smaller producer-handler specialty varieties of kale, are produced While data indicates that leafy green businesses because they are not directly regionally and seasonally. Evidence is vegetable production is found in all 50 engaged in the mainstream, that these crops are produced widely United States, evidence is that most conventional market. Therefore, record across the United States and are production tends to be concentrated in evidence indicates that the number of generally available throughout the year. the States of California, Arizona, leafy green vegetable handlers in the Since 1997, United States production of Florida, New York, Texas, Georgia, and United States that would qualify to major fresh leafy green vegetables has Colorado, and on farms that exceed the participate as signatory handlers under grown by almost 25 percent. Small Business Administration (SBA) the proposed agreement is more than 1,285. Record evidence is unclear, Major Fresh Leafy Green Vegetable definition of a small agricultural Crops producer. Under 13 CFR 121.201, the however, as to how many small SBA defines ‘‘small’’ agricultural producer-handler operations handling At the time of the hearing, head producers as farming operations having leafy green vegetables exist in the lettuce production was estimated at 5.3 gross annual receipts of $750,000 or United States. billion pounds. Even though head less. This is the threshold by which According to the record, the majority lettuce’s average share of United States USDA analyzes the impact of the of leafy green vegetables handled in the lettuce production has declined from an proposed marketing agreement on small United States are subject to seasonal average of 77 percent during 1996 to producer entities. Farm data by States contracts between producers and 1998, to 56 percent from 2006 to 2008, head lettuce continues to represent the from the 2007 Census of Agriculture handlers, and these relationships are majority of total leafy green vegetable (Census), unavailable from other usually long-term. Typically, such production in the United States. Iceberg sources, has also been used in contracts are prepared using quantity, weight, acreage, or price. lettuce is harvested year-round in developing the recommended decision. Any leafy green vegetable crop for California. Of the other States with large However, the Census defines small sale in the market that is not covered production of head lettuce, Arizona producers as those with annual receipts under a contract is considered part of harvests in the winter, New Jersey of less than $250,000 and large the cash, or ‘‘spot’’ market, where harvests in the spring and fall, and producers as those with $250,000 or produce is sold for cash and delivered Colorado harvests in the summer. more. Thus, in some of the discussion immediately. Small farms often sell According to 2007 Census data, 1,158 and analysis in this recommended directly to consumers at farmers’ farms harvested head lettuce from decision, the Census data cannot be markets, roadside stands, and through nearly 167,000 acres. Although the reconciled with the SBA definition for community-supported agriculture (CSA) farms harvesting head lettuce were small producers. programs, as well as directly to smaller spread over 48 States, only three States California and Arizona are the largest retailers and local foodservice operators. reported harvesting more than 1,000 producing States of leafy green According to the record, these types of acres: California (118,676 acres), vegetables, with California alone transactions are considered part of the Arizona (39,187 acres), and Colorado accounting for 75 percent of total United spot market. (2,268 acres). States production in 2007, and Arizona Evidence shows that some leafy green USDA statistical evidence presented representing 15 percent of total United vegetables for the United States market at the hearing indicates that demand for States production in that same year. are sold through produce auctions, lettuce has shifted away from head Evidence is that the remaining 10 where members of the auction maintain lettuce to romaine and other varieties of percent of production is spread their membership through a contractual leaf lettuce. Leaf and romaine lettuce throughout the United States and tends relationship with the auction production from major States increased to be sourced by handlers from small to organization. In this scenario, produce 125 percent between 1990 and 1999, mid-size farms. supplied by auction members is sold and an additional 42 percent between For such farms, leafy green vegetable through the auction method, where 2000 and 2009. Total production of leaf production commonly only represents a prices obtained for the produce can and romaine lettuce for 2009 was portion of these diversified farms’ total fluctuate based on daily market supply estimated at 3.9 billion pounds production. According to the hearing and demand, and quality of produce. accounting for 42 percent of United record, a ‘‘diversified farm’’ is a farming According to the hearing record, sales of States lettuce production. Leaf and operation that produces a variety of leafy green vegetables made through a romaine lettuce are harvested year- crops or animals, or both, on one farm, produce auction also are considered round in California. Arizona is the other as distinguished from a producer who part of the spot market. main producer of these lettuces in the specializes solely in the production of winter. According to 2007 Census leafy green vegetables. Production record data, 2,891 farms in all 50 States Marketing Research Association USDA data presented at the hearing harvested leaf lettuce from (MRA) data presented at the hearing indicates that the value of leafy green approximately 59,000 acres. For indicates that there were approximately vegetables grown for the United States romaine lettuce, the figures are 87,000 1,285 handlers of leafy green vegetables fresh and fresh-cut market was $2.5 acres harvested from 1,057 farms in 49 in the United States in 2009. This data billion in 2008. The majority of United States. is published in the Blue Book Marketing States leafy green vegetable production According to the hearing record, Research Service Directory (Blue Book), is accounted for by three lettuce crops demand for fresh spinach resulted in

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average production increases of over 6 acres in 2007. The top producing States 8.4 pounds per person in 2000 to 11.1 percent per year since 1990, with for Chinese cabbage include California pounds per person in 2008. production from major States estimated (harvesting 5,593 acres on 111 farms), Consumption of spinach peaked in 2005 to have reached 513 million pounds in Florida (harvesting 3,206 acres on 40 at 2.3 pounds per person, and has 2009. According to the 2007 Census, farms), New Jersey (harvesting 981 acres remained at most 15 percent below peak 1,121 farms in all 50 States harvested on 27 farms), Texas (harvesting 517 consumption since the E. coli outbreak spinach for the fresh market from almost acres on 7 farms), and Hawaii in 2006. Average per capita 30,000 acres. In 2007, the top producers (harvesting 271 acres on 53 farms). consumption of spinach was forecasted of spinach for the fresh market were For escarole and endive, the 2007 at 1.6 pounds per person for 2009. California (harvesting 18,000 acres), Census numbers reported for national Cabbage consumption has remained Arizona (harvesting 3,600 acres), Texas acreage and numbers of farms are 3,169 steady since 2004, oscillating from 8.1 (harvesting 2,200 acres), Colorado and 132, respectively. The top pounds per person in that year to 7.8 (harvesting 1,900 acres), and New Jersey producing States for these crops are pounds per person in 2005–06 to 8.2 (harvesting 1,500 acres). These States California (harvesting 1,974 acres on 28 pounds per person in 2009. accounted for 94 percent of the fresh farms), New Jersey (harvesting 546 acres Leafy Green Vegetable Imports and spinach acreage. Seasonal production on 32 farms), Florida (harvesting 402 Exports data indicates that California harvests acres on 7 farms), Ohio (harvesting 164 spinach throughout the year. Arizona acres on 4 farms), and New York According to data submitted into and Texas harvest in the winter, (harvesting 75 acres on 13 farms). evidence, the United States is the Colorado harvests in the summer, and For kale, the 2007 Census numbers second largest producer of leafy green New Jersey harvests in the spring and reported for national acreage and vegetables in the world, accounting for fall. numbers of farms are 3,784 and 946, roughly 22 percent of global production Production increases for fresh cabbage respectively. The top producing States in 2009. China is the world’s largest have been significantly less than for for these crops are California (harvesting leafy green vegetable producer, with a lettuce and spinach over the past 20 1,077 acres on 96 farms), North Carolina world market share equal to 51 percent years, but do indicate a steady increase (harvesting 363 acres on 64 farms), in 2008. in demand for fresh cabbage. Production Texas (harvesting 214 acres on 13 Witnesses explained that United averaged 2.3 billion pounds in the farms), Colorado (harvesting 84 acres on States leafy green vegetable producers 1990s, 11 percent higher than the 12 farms), and Ohio (harvesting 76 acres compete on both a domestic and average for the 1980s. For the 10-year on 28 farms). international level with foreign leafy period between 2000 and 2009, fresh For mustard greens, the 2007 Census green producers. Since 2002, Mexico cabbage production in major States numbers reported for national acreage has been the largest exporter of leafy averaged 2.4 billion pounds, 4 percent and numbers of farms are 7,013 and 848, green vegetables to the United States, higher than the 1990s average. respectively. The top producing States followed by Canada, Peru, and Israel. In In 2007, 88 percent of harvested for these crops are California (harvesting 2006, Mexico exported 118 million cabbage acreage was for fresh use. In 1,902 acres on 87 farms), Georgia pounds of leafy green vegetables to the 2007, the top 5 State producers of (harvesting 1,585 acres on 36 farms), United States. During the same period, cabbage for the fresh market were South Carolina (harvesting 581 acres on Canada, Peru, and Israel exported 52 California (harvesting 14,000 acres), 35 farms), Texas (harvesting 470 acres million pounds, 1.2 million pounds, New York (harvesting 10,300 acres), on 61 farms), and Michigan (harvesting and 365,000 pounds, respectively. In Florida (harvesting 9,800 acres), Texas 308 acres on 29 farms). 2006, the United States exported (harvesting 6,800 acres), and Georgia slightly less than 12 percent of its leafy Consumption (harvesting 6,600 acres), and accounted green vegetable production. for 67 percent of United States total According to the hearing record, Even though China consumes the fresh cabbage production. Other States annual per capita lettuce consumption majority of its leafy green vegetable that produce large quantities of fresh in the United States was 21 pounds in production, witnesses stated that China cabbage include North Carolina, the 1960s, 24 pounds in the 1970s, and is the main competitor to United States Wisconsin, and Arizona. According to 25 pounds in the first half of the 1980s. leafy green vegetable exports to Asian the 2007 Census, 3,986 farms in all 50 Since the late 1980s, lettuce markets. Although Japan and India both States harvested cabbage for the fresh consumption has averaged about 30 are top ten global producers of leafy market from approximately 71,000 pounds per person, an increase of 40 green vegetables, neither country acres. Of the States with large percent compared to the 1960s. The exports more than 0.1 percent of the production of fresh cabbage, Florida, type of lettuce consumed has changed leafy green vegetables that they produce. Georgia, and Texas harvest in the winter over this period of time. Historically, Mexico is the largest producer of leafy and spring, California harvests year head lettuce has accounted for the green vegetables in Latin America and round, and New York harvests in the majority of national leafy green was the ninth largest global producer in summer. vegetable consumption. While still 2006. Its proximity to the United States representing the majority of leafy green market makes Mexico a competitor in Minor Fresh Leafy Green Vegetable vegetable production volume, evidence both the United States and Mexican Crops is that consumer demand for head markets, in addition to other Latin The 2007 Census included limited lettuce is slowly shifting toward other American markets. Witnesses also data for the following leafy green leafy green vegetable crops. Evidence is explained that some of the leafy green vegetables for the United States market: that demand is shifting to leaf lettuce, vegetables from Mexico are produced by Chinese cabbage, escarole & endive romaine, spinach, and specialty crops. United States companies operating in (data combined), kale, and mustard Consumption of head lettuce both countries. greens. decreased from 23.5 pounds per person Major producers and exporters in the According to hearing record evidence, in 2000 to 16.9 pounds per person in European Union are Spain and Italy. there were a total of 618 farms growing 2008. At the same time, consumption of Both Spain and Italy produced Chinese cabbage on a total of 11,471 leaf and romaine lettuce increased from approximately 2 million pounds of leafy

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green vegetables annually from 2000– agreement would be subject to facilities, and wholesale distribution 2006. Total exports from Spain and Italy mandatory compliance. The proposed centers. The AMS programs are not average 45 percent and 10 percent of program would also cover any imported mandatory. However, according to the their respective leafy green vegetable leafy green vegetables handled by hearing record, many commercial production. signatory handlers. According to record purchasers of leafy green vegetables Record evidence from the hearing evidence, foreign producers and require their vendors to be audited illustrates that the handling of United handlers doing business with signatory under one of the above mentioned States grown leafy green vegetables is handlers would be required to meet programs. multi-State, regional, national, and equivalent audit metrics as in effect for There are two State programs that international in scope. Within the the domestic industry. have been established specifically for United States, the handling of leafy USDA Inspection Service would serve the purpose of regulating the handling green vegetables in one State exerts an as the primary auditing authority to of fresh leafy green vegetables. These influence on all other handling of leafy conduct verification audits under the programs are found in California and green vegetables within the production proposed program. USDA Inspection Arizona. area. Additionally, the handling of Service would also have the authority to The California Leafy Green Products imported fresh leafy green vegetables designate other entities approved or Handler Marketing Agreement became also impacts interstate commerce and recognized by USDA to conduct audits effective February 10, 2007. Record foreign commerce. Record evidence is on its behalf. evidence indicates that, at the time of that imported leafy green vegetables are According to the hearing record, there the hearing, 99 percent of leafy green widely distributed throughout the are no national, mandatory food quality vegetables produced and handled in United States market alongside or safety regulations for the growing and California were subject to the State domestic leafy green vegetables. handling of fresh leafy green vegetables. program. In October 2007, a similar There are, however, FDA guidelines that Moreover, record evidence is that program was implemented in Arizona: are commonly used by leafy green sometimes imported product is co- The Arizona Leafy Green Products vegetable producers and handlers in mingled with domestic product prior to Shipper Marketing Agreement. Evidence their development of private or its distribution in United States markets. is that approximately 75 percent of the customer-driven food safety plans. Thus, the evidence shows that the leafy green vegetables produced and These guidelines are: The ‘‘Guide to handling of leafy green vegetables for handled in Arizona were being Minimize Microbial Food Safety the United States market, whether the regulated under that State’s program at leafy green vegetables are produced Hazards for Fresh Fruits and Vegetables’’ the time of the hearing. While both the domestically or imported, is in the (1998), and the ‘‘Guide to Minimize California and Arizona programs are current of interstate and foreign Microbial Food Safety Hazards for voluntary, the requirements of these commerce and directly affects such Fresh-cut Fruits and Vegetables’’ (2008). State marketing agreements are commerce. According to the hearing record, these guidelines jointly comprise what are mandatory for all signatories within Material Issue Number 2—The Need for referred to as ‘‘Good Agricultural each respective State. a National Leafy Green Vegetable Practices’’ or ‘‘GAPs’’. In 2009, FDA Proponents of the proposed agreement Marketing Agreement published a draft set of commodity stated that a national program would The record evidence demonstrates specific guidelines for leafy green allow for the coordination of audit that there is a need for the proposed vegetables, the ‘‘Commodity Specific verifications for all fresh leafy green program to regulate the handling of Food Safety Guidelines for Lettuce and vegetables at a national level and would leafy green vegetables, and that such a Leafy Greens Supply Chain’’. These allow for continuity of product quality program would improve quality by guidelines have not been finalized yet as it moves between States. minimizing the occurrence of microbial and, therefore, are not being actively While proponents acknowledged that contamination of those vegetables. If used in the industry. leafy green vegetable GAP and GHP implemented, the proposed program Mandatory FDA regulation does exist programs have been designed and would provide for the establishment of for manufacturers of fresh-cut leafy implemented in cooperation with the audit metrics and verification audits of green vegetables. Manufacturers alter USDA Inspection Service in two States all product handled by signatory leafy green vegetables from their fresh (Arizona and California), they argued handlers within the United States. Any form into a fresh-cut form. FDA that the development of a national audit metrics developed under the regulations regarding the manufacturing program was necessary. Proponents proposed program would reflect FDA of fresh-cut leafy green vegetables are stated that a national program would good agricultural practice guidelines found in 21 CFR Part 110. According to minimize the potential for (GAPs) and FDA fresh product the record, these regulations are contamination of fresh leafy green manufacturing regulation (GMPs). Any commonly referred to as Good vegetables in all States where they were regulation would also take into account Manufacturing Practices (GMPs). produced or handled, not just California leafy green vegetable industry The AMS, in partnership with State and Arizona. According to the record, stakeholder interests and concerns departments of agriculture, offers a participation in the two State programs regarding varying production and voluntary, audit-based program that represents roughly 99 and 75 percent of handling environments across the verifies adherence to the two FDA production in California and Arizona, nation. Furthermore, the proposed guidelines identified above. Under respectively, but participation of program would assist in stabilizing AMS’s Good Agricultural and Good production outside of those two States market conditions if a contamination Handling Practices Audit Verification is inconsistent and limited. Proponents event were to occur, and would increase Programs, the FDA GAPs guidelines are explained that producers and handlers consumer confidence in the quality of divided into two specific programs: who currently undergo GAP or GHP leafy green vegetables. GAPs verification audits, which audit verifications outside of the States While participation in the proposed examine farm practices, and Good of California and Arizona primarily do program would be voluntary, any Handling Practices (GHPs), which so either electively or at the request of handler becoming a signatory to the concentrate on packing facilities, storage their buyers.

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Proponents explained that a fresh mechanical harvest operation. Under address the increasingly common leafy green vegetable may be grown in the proposed program, audit metrics practice among fresh produce buyers to one State, shipped to another State for would be developed to identify actions develop their own food safety washing and preliminary handling, and that would meet this guideline, such as requirements for producers and then shipped to a third State for further equipment cleaning schedules and handlers. According to the hearing processing and packaging prior to that requirements for harvest workers to use record, these requirements often differ product reaching consumers. For this gloves or other protective clothing. from buyer to buyer, resulting in a reason, proponents stated that According to proponents, if the complex web of private standards that consistency in good agricultural and proposed program were implemented, producers and handlers need to adhere handling practices were needed in all its administrative body would have to in order to sell their product. States in which leafy green vegetables authority to recommend ‘‘audit metrics’’. Implementation of these varied are grown or handled. Proponents stated Witnesses explained that audit metrics requirements is costly to the producer that national coordination of such are standards or steps within a and handler, and is often redundant. practices is needed to maintain the production or handling system at which Moreover, many witnesses testified that integrity of product quality, including some action or measure should be taken some buyer requirements are not minimizing the potential for microbial to minimize the potential for microbial scientifically justified and, in turn, have contamination. contamination. The standards or steps led to production and handling For example, the California Leafy within a production or handling system practices that challenge existing Green Products Handler Marketing at which action or measures are taken industry technology or are contra- Agreement does not cover lettuce or are also referred to as ‘‘control points’’ of indicated to findings of current leafy green vegetables grown outside of a ‘‘process control’’. It was further scientific research. California. It does not have the authority explained that any ‘‘audit metrics’’ To this end, proponents expressed the to send inspectors to audit growers or established under the proposed program importance of including input from handlers in another State. Therefore, if would represent a set of auditable stakeholder groups including, but not a handler who is based in California standards or requirements within a limited, to organic producers and receives product from outside the State, process control that would allow an handlers, small businesses, and natural that product may not be required to auditor to determine if a producer or resource interest groups. Additionally, meet the GAPs or GHPs. According to handler is in compliance with the proponents stated that members of the the proponents, the development of a program. professional and academic community national GAP and GHP program for While proponent witnesses supported should be represented in the audit leafy green vegetables based on FDA the need for a uniform verification audit metric development process. guidelines would foster consistency in program, they also supported the Proponents argued that because the agricultural and handling practices development of a program that handling of imported fresh leafy green across all States. recognizes differences among producers vegetables impacts domestic commerce, Proponents explained that FDA-based and handlers across regions in the foreign product handled by signatories GAPs and GHPs provide general production area. For example, should also be regulated. As discussed guidance on critical steps within the differences in water sources, geography, in Material Issue 1, imported leafy green growing, harvesting, transportation, climate, or size of operation could vegetables are widely distributed cooling, packing, and storage of fresh require slight variations in the types of throughout the United States market produce where food safety might be actions needed to be taken for a alongside domestic leafy green compromised. FDA guidelines alert producer or handler to be compliant vegetables. Moreover, record evidence producers and handlers to critical areas under the proposed program. shows that imported product can be co- within the production and handling of It also was argued that the proposed mingled with domestic product prior to fresh leafy green vegetables that present agreement should allow for the its distribution in United States markets. potential for microbiological development of audit metrics that are Witnesses explained that if microbial contamination. FDA guidelines do not, reflective of current industry practices contamination were to occur during the however, describe the actions that need and are scientifically-based. According growing or handling of foreign leafy to be taken by producers or handlers to the record, standardization of green vegetables imported by United within their individual businesses to production and handling audit metrics States handlers and consumed by meet the guidance benchmark. would result in increased efficiencies United States consumers, the United Proponents explained that guidance of and reduced costs related to multiple States fresh leafy green vegetable this kind is established in the form of buyer-specific requirements. Proponents industry would suffer economic losses ‘‘audit metrics’’. explained that usage of current industry regardless of the origin of the For example, FDA guidelines state practices was important for two reasons. contaminated product. Witnesses that mechanical or machine harvest has First, current practices for organic stressed the importance of having a become increasingly prevalent and that handling operations are likely different Federally-regulated program through this activity leads to increased surface from conventional handling operations. which the industry could stabilize any contact exposure of leafy green However, the audit metric established negative market impacts, and vegetables with components of the for each respective type of handling proactively address consumer harvest machinery. FDA guidelines operation should result in both confidence with regard to domestically identify surface contact in mechanical operations meeting the FDA guidelines handled leafy green vegetables, if such harvesting as a critical step. One of the and complying with the proposed an event were to occur. guidelines offered by FDA to reduce the program. According to the hearing record, the potential for contamination at this Secondly, proponents advocated that regulation of imported product handled critical step includes establishing audit metrics be supported by current by signatory handlers would ensure that appropriate measures that reduce, scientific research accepted within the both domestic and foreign product was control, or eliminate the potential professional and academic scientific held to the same, or equivalent, good introduction of human pathogens at the community. Proponents stated that the agricultural and handling practices. cut surface during and after the proposed program would positively This would allow for consistency of

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product quality among participants of are following FDA’s guidance and product quality and food safety does the proposed program. commodity-specific best practices. exist, some stated that a regulatory Proponents stated that it is critical for Proponents further stated that USDA program would be better placed under the industry to improve and ensure the and FDA have an established working FDA oversight, or perhaps under a safety and quality of leafy green relationship on food quality programs. system of State regulatory programs. vegetables. The relationship among For example, AMS offers the GAPs and Critics of USDA oversight of such a quality, consumer demand, and GHPs Fresh Produce Audit Verification program stated that USDA lacks the producer returns was demonstrated at Program, a voluntary, audit-based scientific expertise needed for the the hearing. Furthermore, the program for the fresh produce industry development and implementation of a correlation between product quality and based on the FDA’s ‘‘Guidance to science-based regulatory program for the absence of microbial contamination Minimize Microbial Food Safety food safety. Critics also explained that was clearly defined. Hazards for Fresh Fruits and their understanding of the mission of Witnesses testifying at the hearing Vegetables’’, and also coordinates AMS is to facilitate the marketing of used the example of the September Inspection Service audits under both the agricultural products and therefore 2006, multi-state outbreak of E. coli California and Arizona leafy green should not be involved in the oversight linked to fresh spinach grown in vegetable marketing agreements. of quality as it relates to food safety California’s Salinas Valley. According to Witnesses in favor of USDA oversight issues. These witnesses stated that the record, the resulting recall was the also cited the history of interagency monitoring of food safety is not relevant largest ever for the fresh leafy green cooperation. As an example, witnesses to food quality and should not be vegetable industry. Investigations by at the hearing referred to the USDA and included under the purview of FDA and the California Department of FDA co-sponsorship of the National marketing and market stability. Health Services, in cooperation with the Advisory Committee on Microbiological Others witnesses stated that Centers for Disease Control and Criteria for Foods by the Food Safety individual State departments of Prevention, and USDA Animal and and Inspection Services, along with agriculture would be better equipped at Plant Health Inspection Service, other Federal agencies such as the addressing the particular needs and concluded that E. coli contamination Centers for Disease Control and unique characteristics of their producer might have been attributed to Prevention. and handler constituents. Witnesses in environmental factors in the production Witnesses opposed to the proposed favor of State regulatory programs area. program, as well as those who voiced argued that the implementation of a Witnesses who were impacted by the the need for revisions to the proponents’ national program would result in a ‘‘one- recall stated that consumer demand for proposal, expressed apprehension over size fits all’’ Federal regulatory program. fresh spinach dropped by more than 60 the ability of program administrators to These witnesses believe that regulation percent immediately following FDA’s collaborate with stakeholder interest would be developed to reflect the public alerts. Witnesses also explained groups. Specifically, witnesses were agricultural practices of regions that after the contamination had been concerned that the development and producing the most volume of leafy linked to California, consumer recommendation process of audit green vegetables to the detriment of consumption of spinach remained at metrics would not take into regions producing less volume. record lows regardless of the State consideration differences between Lastly, concerns were raised during within which it was produced. conventional and organic production the hearing process and in the post- According to record evidence, consumer and handling practices, as well as scale hearing briefs submitted over the demand for spinach remains below pre- of business operations. Other areas of development process of any audit 2006 levels. particular concern noted during the metrics applied to foreign production or Proponents used the 2006 E. coli hearing include topics such as handling operations. Witnesses also outbreak, and the subsequent damage to conservation practices and natural raised questions over the proposed consumer confidence and demand for resource management. agreement’s ability to recognize foreign leafy green vegetables, to demonstrate These witnesses also explained that GAPs, GHPs and GMPs programs, that a contamination event in one State regulatory jurisdiction over some of foreign auditing services, or can impact industry participants nation- these topics is shared by multiple independent third-party auditing wide. Witnesses stressed the need to Federal, State, and local government services currently in operation both have a regulatory system in place as a agencies, and stated the need to include domestically and internationally. means of minimizing the potential for representatives from these regulatory Based on hearing record evidence, future contamination events. Witnesses agencies in the audit metric USDA concludes that there is a need for also expressed the usefulness of having development process. It was argued that a national program to regulate the a Federally regulated program to their involvement would mitigate the handling of leafy green vegetables. The facilitate the rapid identification and potential for conflicting requirements evidence supports that the proposed containment of contamination events if being placed on producers or handlers program would allow a uniform they occur. Proponents explained that that are subject to multiple sets of baseline of regulation to be proficiently such a national program would standards and compliance issues. administered throughout the complex safeguard consumers, as well as provide Some witnesses opposed to the and diverse leafy green vegetable the leafy green vegetable industry with proposed program expressed concern industry. The proposed program should a mechanism to address potential loss of that its implementation would lead to allow for participation and compliance consumer confidence in product further proliferation of private sector among the diverse community of quality. standards. These critics argue that the growing and handling operations across According to record evidence, USDA current California and Arizona State the United States. has several programs—namely the programs have had little positive impact Through the proposed program, leafy Qualified Through Verification and the on the reduction of private standards in green vegetable industry stakeholders GAPs and GHPs Audit Verification those States since their implementation. could work cooperatively together to Programs—that provide independent While many witnesses testified at the develop and recommend a uniform, verification that growers and handlers hearing that a relationship between auditable, science-based food quality

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verification program. Furthermore, audit generally sell their crop in bunches fresh leafy green is growing in oversight conducted by the USDA directly to customers at farmers’ popularity. Inspection Service or USDA approved markets. Endigia is a new variety of forced red or recognized entities in coordination Cabbage, one of the most consumed chicory that is a cross between Belgian with current FDA guidelines, would vegetables in the world, is a member of endive and two varieties of radicchio— benefit the industry and would be in the the Brassica oleracea species (Capitata Chioggia and Verona. best interest of consumers. Finally, the Group) of the family Brassicaceae. Endive (Cichorium endivia) is a leafy proposed agreement would tend to Cabbage is produced year-round in all green belonging to the large Asteraceae effectuate the declared policy of the Act. 50 States. A mature head of cabbage family. There are two main varieties of generally weighs 3–5 pounds, endive, curly endive, or frisee (var. Material Issue Number 3—Definition of depending on the variety. Cabbage crispum), and escarole (var. latifolia). Leafy Green Vegetables and Production produced for the fresh market is The leaves from endive are harvested by Area harvested by hand and packed 18–24 hand and tied in bunches before being The proposed agreement should heads per carton. packed into cartons. Belgian endive provide for the definition of the Chard (Beta vulgaris var. cicla) is a (Cichorium intybus var. foliosum) is also commodity and the area that would be member of the Amaranthaceae family of known as witloof in the United States. regulated. Terms related to the plants that is commonly called Swiss Kale is a member of the Brassica commodity to be covered by the chard in the United States. It is the same oleracea species (Acephala Group) with proposed agreement, such as ‘‘fresh’’ and species as beetroot. Stems of the chard common varieties of green kale, red ‘‘fresh-cut’’ should also be defined. plant vary from white to red and yellow kale, red Russian kale, and Lacinto or depending on the variety. If only mature dinosaur kale. At harvest, two cuttings Leafy Green Vegetables leaves are harvested, chard will may generally be taken from one The proponents testified that leafy continue to be productive for up to a seeding. If harvested as an immature green vegetables are short-lived year. Leaves are typically bunched in leaf, kale is often co-mingled with other herbaceous plants that are eaten raw. the field during harvest. Immature or immature or baby leaf variety leafy Most leafy green vegetables are baby leaves may be added to packaged green vegetables in salad mixes. Mature produced in raised beds that are either salad mixes. kale is typically cooked prior to eating. directly seeded or transplanted with Cilantro (Coriandrum sativum) is an However, witnesses testified that mature plugs (immature plants). Leafy green annual herb in the family Apiaceae that kale is often used on salad bars for vegetables produced for fresh market is also called Chinese or Mexican decoration, so it comes into contact with production are harvested either as single parsley in the United States. In Florida, other leafy green vegetables in that leaves or as whole plants. Some types of cilantro is produced for the fresh-cut context. leafy green vegetables, such as chard, market between late September and Lettuce (Lactuca sativa) is produced kale, mizuna, and baby leaf lettuce may May, whereas in California it is in all 50 States and is highly perishable. be harvested multiple times in a crop produced year-round. Hand-harvested Lettuce crops include head, leaf, and year. Record evidence pertaining to the cilantro is sold in bunches tied with a romaine. Common varieties of head leafy green vegetables included in the rubber band or twist tie. Conventional lettuce (Lactuca sativa var. capitata) are definition follows. packing is 30 bunches in 10 pound iceberg (also called crisphead) and Arugula, a member of the boxes. butterhead (also called Boston, bibb, Brassicaceae family of plants, has three There are three major cress species buttercrunch, or Tom Thumb). During species that are used for human known in North America: Garden cress, harvesting in Arizona and California, consumption: the annual species— Upland cress, and watercress. All are outer leaves are stripped from the Eruca sativa (domesticated) and Eruca members of the family Brassicaceae. lettuce heads before boxing. Head sativa vesicaria (L.) Cav. (wild-type); Garden cress (Lepidium sativum), also lettuce sold fresh is boxed 24 heads to perennial species—Diplotaxis tenuifolia called peppergrass, pepper cress, or a carton—either naked or film-wrapped. (L.) DC; and a polyploidy perennial pepperwort, is a fast-growing plant. Head lettuce that will be further Diplotaxis muralis (L.) DC. Arugula is a Introduced to the United States from processed is shipped in bulk to the low-growing annual that is commonly China, it is botanically related to processing facility where it is washed, called rocket, roquette (French), mustard and watercress and is cored, shredded, and/or cut and rughetta, and rucola (Italian). If arugula sometimes referred to as an herb. packaged as ready-to-eat products. Leaf is marketed as a single commodity, it is Garden cress is commonly used in lettuce (Lactuca sativa var. crispa) has usually bunched and packed into salads as a ‘‘baby green’’. Upland cress steadily grown in popularity in the cartons in the field. Arugula that is for (Barbarea verna) is native and grows United States in the past 15 years. the fresh-cut market is shipped from the wild in the southeast; it is often called Common leaf lettuce varieties are red field to the processing facility in bulk creasy greens, highland creasy, or creasy leaf, green leaf, and baby leaf or salad/ containers. salad. Watercress (Nasturtium spring mix. At harvest, leaf lettuce is According to record evidence, arugula officinale, N. microphyllum) is a fast- generally naked packed 24 to a carton. produced in Arizona is primarily growing aquatic or semi-aquatic Romaine lettuce (Lactuca sativa var. produced for value-added packaged perennial plant. It is thought to be one longifolia), also called Cos lettuce, is salad mixes. In this example, the plants of the oldest known leafy green generally loosely packed. are not thinned after sprouting and are vegetables consumed by humans. Maˆche (Valerianella locusta) is a harvested as immature arugula. This Dandelion is produced commercially small annual plant of the family differs from producers in New Jersey, in the United States from two species, Valeriancaceae. It is also called corn who generally harvest, wash, and Taraxacum officinale and Chichorium salad, Lewiston cornsalad, lamb’s bundle their crop, and sell it as a single intybus, both belonging to the lettuce, lamb’s tongue, field lettuce, commodity at local produce auctions in Asteraceae family. A perennial field salad, rapunzel, and fetticus. wholesale units of 24 bunches per crate. herbaceous plant, dandelions are native Parsley (Petroselinum crispum) is a Record evidence indicates that small to North America and produced as biennial green leaf herb that is a producers who produce arugula weeds worldwide. Dandelion use as a member of the family Apiaceae. Parsley

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is available in two varieties—curly leaf Some witnesses supported adding demonstrates that the movement of leafy and Italian or flat leaf. Parsley is mustards and herbs to the proponents’ green vegetables from producers to harvested by cutting 1.5–2 inches above definition. However, record evidence handlers is fluid and that oftentimes it ground so that re-growth may occur, does not support extending program is difficult to anticipate what the end allowing for three to four cuttings per coverage to those items. Proponents use of a harvested field will be. planting. testified, for example, that mustards Moreover, record evidence supports that Radicchio, a type of chicory were not included in the definition of the opportunity for microbial (Cichorium intybus var. foliosum), is a leafy green vegetables because they are contamination exists throughout the member of the family Asteraceae. normally cooked prior to consumption. industry at the production, harvesting, Sometimes called Italian chicory, The proponents supported including handling and processing stages. varieties of radicchio are named after ‘‘spring mix’’ in the definition of leafy Therefore, coverage of all leafy green the regions of Italy from which they green vegetables. However, the record vegetables, whether in their fresh or originate. The most common variety of evidence is that spring mix is not a fresh-cut form, is necessary and is in the radicchio found in the United States is single commodity, but a mixture of a best interest of consumers. Radicchio di Chioggia. Other lesser variety of leafy green vegetables. Regarding witness requests to exempt known varieties available are Radicchio Proponents and other witnesses testified leafy green vegetables that require di Treviso, Tardivo, and Radicchio di that there is no universal, standard cooking prior to human consumption, Castelfranco. In Italy, radicchio is often ingredient blend for spring mix. A this exemption is unnecessary as the grilled or roasted, but in the United spring mix typically includes, but is not proposed program would only cover States it is most often used as a colorful limited to, arugula, chard, cress, lettuce, leafy green vegetables intended for addition to leafy green salad mixes. The and radicchio. It also includes baby leaf consumption in their raw or uncooked United States also imports radicchio items such as cress, dandelion, endiga, form. This is because the process of from Italy and Chile. mache, mizuna, tat soi, and winter cooking is identified as a ‘‘kill step’’ in Spinach (Spinancia oleracea) is a purslane. While the list of leafy green food safety guidelines and is believed to hardy leafy green vegetable that is vegetables includes most items eliminate contamination. produced in all 50 States. There are commonly used in a spring mix, Lastly, the record evidence supports several different varieties of spinach signatory handlers who produce a the authority for the Board, with the that are classified according to leaf spring mix would need to ensure that all approval of the Secretary, to add and shape and texture. Varieties include ingredients of their spring mix are remove leafy green vegetables from the savoy, which has wrinkled leaves, semi- produced and handled in accordance definition as deemed necessary. This savoy, and varieties with smooth or flat with the terms of the proposed authority would enable the program to leaves. Savoy types are sold mainly for agreement. fresh market uses, while types with The proposed agreement is intended adapt and change to the needs of the smooth or flat leaves are used mainly for to cover all mixes (such as spring mix leafy green vegetable industry. Any processing. The growing season varies and other salad blends) of leafy green change would require that the Board by location, and leaves may be cut as vegetables. The definition of leafy green approve such a recommendation at a often as four times during a crop year. vegetables is revised to clarify this point public meeting and then submit the Spinach is sold in bunches or as loose by adding a new paragraph (b). In a recommendation to the Secretary for leaf in cellophane packaging to food related matter, sometimes salad mixes review. If appropriate, USDA would service and retail outlets. contain items that are not leafy green initiate rulemaking. Tat soi (Brassica rapa var. rosularis, vegetables, such as carrots or dressings. In summary, the definition of ‘‘leafy Narinosa group) is an Asian leafy green These items would not be covered by green vegetables’’ that appeared in the vegetable and a member of the the agreement. Such language is being Notice of Hearing as § 970.15, is revised Brassicaceae family. added to the definition of leafy green as discussed above and redesignated as Winter purslane (Claytonia perfoliata) vegetables as a new paragraph (c). (This § 970.18. is a member of the Portulacaceae provision appeared in § 970.8 of the Fresh family. Also known as Cuban Spinach proponents’ proposal, but that section of and Miner’s lettuce, winter purslane is the proposed agreement is being deleted Proponents and other witnesses stated an annual plant. as unnecessary.) that ‘‘fresh’’ means any leafy green Proponents and other witnesses Some witnesses stated that the vegetable in the raw or natural form. testified that they believe this is a program should apply only to fresh-cut Proponents described the many comprehensive list of the leafy green leafy green vegetables. These witnesses different ways that leafy green vegetables produced in the United cited that there is a different safety risk vegetables are harvested fresh in the States and available in the market. for leafy green vegetables produced for field. One witness described how However, new varieties of lettuces and fresh-cut versus the fresh market. Other cilantro could be harvested using any of other leafy greens appear in the market witnesses with generally the same three different methods: (1) Cut the on an annual basis. Those varieties viewpoint stated that the list of leafy foliage 1–2 inches above the crown (the would be covered by the proposed green vegetables presented by the most common method); (2) cut the agreement. Similarly, witnesses testified proponents was too broad and should whole plant just below the soil; and that ‘‘baby leaf’’ or ‘‘baby greens’’ are a provide an exception for leafy green (3) bulk harvest into bins using a mower seed variety that is to be harvested and vegetables that require cooking. and conveyor. Another witness marketed as a vegetable, rather than Based on hearing record evidence, all provided the example that a head of being an immature version of a leafy leafy green vegetables included in the lettuce that is field-cored and wrapped green vegetable. These varieties would proposed definition that are handled by in the field is considered a raw also be covered by the program. The signatory handlers and that are intended agricultural commodity in a package. definition of leafy green vegetables for human consumption in the fresh Both of these examples demonstrate that should be revised to clarify that all form (whether fresh-cut or not) should while harvesting involves cutting the varieties of the listed items would be be covered under the proposed foliage growth from the stem or crown covered. agreement. Record evidence of the plant, such cutting does not

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constitute the creation of a fresh-cut green vegetables are produced and crops to handlers or directly to retailers leafy green vegetable. handled year-round in all 50 States and at wholesale produce auctions. The term ‘‘fresh’’ was used often as the District of Columbia. Handlers in the Record testimony indicates that there witnesses discussed GAPs and GHPs, United States may acquire leafy green basically are two types of handlers ‘‘first since both pertain only to the fresh vegetables that are produced in one handlers’’ and ‘‘secondary handlers’’ or commodity. Thus, based on record State, manufactured in another State, handlers other than first handlers. ‘‘First evidence, a new definition § 970.9, and shipped nationally for consumption handlers’’ take possession of leafy green ‘‘fresh’’ is added to the proposed by consumers. Additionally, witnesses vegetables and may process and package agreement. This is necessary to identify stated that some handlers have leafy green vegetables before selling to and describe how fresh leafy green production or manufacturing other handlers or retailers. ‘‘Secondary vegetables are different from fresh-cut operations, or both, in multiple handlers’’ such as manufacturers—the leafy green vegetables. locations throughout the United States. record indicates—commonly buy from Thus, the national scope of the leafy first handlers. However, such handlers Fresh-Cut green vegetable industry supports also could buy directly from producers. Proponents proposed a definition of defining the production area as all 50 According to record testimony, ‘‘fresh cut’’ to mean fresh leafy green States and the District of Columbia. handling generally begins when the vegetables that have been altered from Lastly, the production area and the harvested leafy green vegetable crop their natural form by cutting, dicing, zones into which it would be divided leaves the field and is in the possession peeling, slicing, chopping, shredding, would determine the eligibility of of the handler. Record testimony also coring, or trimming, with or without persons to serve on the Board. The indicates that fresh leafy green vegetable washing prior to being packaged for use proposed program would require that all crops may change hands as many as by the consumer, foodservice industry, handlers, producers, and at-large three times through handling activities or a retail establishment. Proponents members are located within the before reaching its final destination. provided examples of fresh-cut leafy production area. The topic of the According to record evidence, the green vegetables by citing lettuce that is division of the production area into term ‘‘handle’’ should be defined to shipped in bulk to the processing zones and Board membership are mean ‘‘receive, acquire, sell, process, facility where it is washed, cored, further discussed in Material Issue 5(b). ship, distribute, or import leafy green shredded or cut, and packaged as ready- Based on the hearing record, the term vegetables. The record indicates that to-eat bagged salads. It was noted that ‘‘production area’’ should be defined to ‘‘handle’’ should not include retail sales, this process would also apply to mean all 50 States and the District of foodservice sales, or brokering of such cabbage. Columbia of the United States of leafy green vegetables. According to Section 970.7 is revised for America. The definition of ‘‘production record evidence, the act of handling clarification and redesignated as area’’ that appeared in the Notice of places leafy green vegetables or § 970.10. Hearing as § 970.23 is redesignated as products into the current of commerce In addition, proponents proposed a § 970.28. both within the production area, and between the production area and any definition in the Notice of Hearing as Material Issue Number 4—Persons and ‘‘ point outside that area. As such, § 970.8, fresh-cut, packaged leafy green Activities To Be Regulated product’’. However, witnesses testified ‘‘handle’’ which appeared in the Notice that this term means the same as the Certain terms should be defined to of Hearing as § 970.11 should be definition of ‘‘fresh-cut’’. This definition identify the persons and the activities redesignated as § 970.14, and revised is being removed from the proposed that would be regulated under the slightly for clarity. agreement as unnecessary. Likewise, the proposed agreement. The proposed ‘‘Handler’’ should be defined to mean definition of ‘‘Packaged’’ that appeared agreement would regulate the act of any person who handles leafy green in the Notice of Hearing as § 970.18 is handling leafy green vegetables in the vegetables. The record indicates that a deleted as unnecessary. production area by those handlers handler could be an individual, joint would voluntarily agree to adhere to the venture, partnership, corporation, or Production Area agreement requirements. As such, the other business entity. According to The term ‘‘production area’’ should be following terms should be defined: record testimony, a handler represents included in order to identify the area in ‘‘handle’’, ‘‘handler’’, ‘‘importer’’, the segment of the industry that which the proposed program would be ‘‘manufacture’’, ‘‘manufacturer’’, processes, ships, sells, consigns, or applicable. According to the hearing ‘‘signatory first handler’’, and ‘‘signatory imports leafy green vegetables, or any record, the production area should handler.’’ combination thereof. As proposed by include the fifty of the United States According to record testimony, within under this agreement, distributors, and the District of Columbia. the leafy green vegetable industry, packers, processors, shippers, and Proponents testified that the intent of businesses in the farm to fork wholesalers would be handlers. The the proposed program is to put into continuum include growers/producers, record also indicates that producers effect a national, standardized system to handlers (commonly known as who engage in the act of handling leafy increase quality by minimizing processors, shippers, packers), green vegetables would be considered microbial contamination of leafy green wholesalers/distributors, agents/brokers, handlers. As handlers, such producers vegetables intended for raw or uncooked exporters/importers, retail outlets such would directly place their product into human consumption in the United as grocery stores, and foodservice the stream of commerce, through direct States. Furthermore, the proposed providers. Small farms as defined by sales to consumers, retailers, or other program would assist in stabilizing SBA commonly sell their leafy green handlers such as a manufacturer or market conditions if a contamination vegetables directly to consumers at foodservice operator. event were to occur, and would increase farmer markets, through Community For the purposes of the proposed consumer confidence in the quality of Supported Agriculture (CSA) programs, agreement, the term ‘‘handler’’ should leafy green vegetables. or to retailers. Record testimony specify that brokers, retailers, and According to record evidence and as indicates that large farm operations foodservice operators would not be discussed in Material Issue 1, leafy usually sell their leafy green vegetable considered handlers unless such

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persons are otherwise engaged in leafy green vegetables for the purposes leafy green vegetables directly from handling. The record indicates that of assessment collection. As proposed producers. generally brokers serve as under the agreement and supported by According to the hearing record, the intermediaries and, negotiate with the record, signatory first handlers term ‘‘process’’, which is included in the producers or handlers on behalf of their would be financially responsible for the definition of ‘‘handle’’, is synonymous customers without ever taking payment of assessments under the with ‘‘manufacture’’ and means ‘‘to possession or ownership of the actual proposed agreement. It is important to leafy green vegetables. identify the responsible party, since change fresh leafy green vegetables from The term ‘‘handler’’ appeared in the leafy green vegetables may be handled their natural or raw form into packaged Notice of Hearing as § 970.12, and by several different signatory handlers fresh-cut products.’’ During the should be re-designated § 970.15, and and the assessment should only be manufacturing process, leafy green revised slightly for clarity. applied once. vegetables are typically washed, and Record evidence indicates that the According to proponents of the then shredded, cut, cored, trimmed, or term ‘‘signatory’’ should be modified to proposed agreement, ‘‘signatory first blended with other types of fresh-cut ‘‘signatory handler’’ and the definition handlers’’ would be identified as the leafy green vegetables, or any should be revised to mean a handler handler who first takes possession of combination thereof. Ultimately, the located in the production area who is leafy green vegetables in their natural processed product is packaged for party to the proposed agreement. The form from a producer with the intent to distribution. Processed fresh leafy green revisions clarify that only handlers sell them to retailers or other handlers. vegetable products are then typically could become signatories to the As an example, a signatory first handler transported in refrigerated trucks or proposed agreement, and that such may contract with an independent coolers to the secondary handler’s persons would have to be located within harvesting company to harvest a customer. These customers may include the production area. producer’s crop and deliver that crop to consumers, retailers, foodservice According to the record, a signatory the signatory first handler’s facility. In companies, or wholesale produce handler would be responsible for such a case, the signatory first handler meeting the requirements of the operations supplying a range of would take ownership of the crop, yet products to retail and foodservice proposed agreement, complying with would not be the first business entity to companies. audit requirements, and submitting physically engage in the act of handling. reports and other information required According to record evidence, given that Witnesses were careful to clarify that for the administration of the proposed the harvesting company is contracted by activities of a manufacturer do not agreement. In cases where a signatory the signatory first handler, and the include the packing of leafy green handler contracts for services, the handler assumes ownership, the said vegetables in the field. Additionally, signatory handler would be responsible handler, and not the harvester, would be record testimony indicates that, in some for verifying and retaining identified as the signatory first handler. cases, coring and trimming activities documentation that the contracting Therefore, the signatory first handler can be part of a producer or handler service provider or agent meets any would be responsible for ensuring that harvesting activity. Therefore, the requirements in effect under the the contracting harvester is in definition of manufacture should not proposed agreement. compliance with any provisions in include leafy green vegetables packed in Signatory handlers would be eligible effect under the proposed agreement. the field. Additionally, the terms to nominate persons to the Board and to Additionally, the signatory first handler ‘‘manufacture’’ and ‘‘process’’ appeared serve as handler members or their would be responsible for the payment of in the Notice of Hearing as § 970.16 and alternates on the Board. Signatory assessments on such leafy green § 970.21, respectively, and should be handlers also would be eligible to vegetables. combined and revised slightly for nominate persons to serve on As another example, if a producer purposes of clarification and Committees of the Board and be eligible were to harvest a leafy green vegetable to serve as members of the Technical crop and then engage in the act of redesignated as § 970.19. Review Committee. Additionally, record handling the crop that producer would The term ‘‘manufacturer’’ as indicated evidence indicates that signatory be considered a ‘‘signatory first handler’’ above should be defined to mean any handlers would need to be located in and responsible for ensuring crop is in person who manufactures. As slightly the production area because they are program compliance with the proposed revised, the definition should not responsible for handling leafy green agreement, assuming the producer in its include a retailer, a foodservice vegetables in the United States. capacity as a handler had signed the operator, or broker, except to the extent The term ‘‘signatory’’, which appeared agreement. that such a person is otherwise engaged in the Notice of Hearing as § 970.26, is Witnesses explained that while some in handling. The term ‘‘manufacturer’’ revised to ‘‘signatory handler’’, and leafy green vegetables are minimally appeared in the Notice of Hearing as redesignated as § 970.33. handled after they are harvested, some § 970.17, and should be redesignated as Record testimony indicates that, product is sold or transferred to a § 970.20. signatory handlers would be identified secondary handler or a handler other as ‘‘first’’ or ‘‘secondary’’ handlers under than a first handler for further Hearing record evidence supports the the proposed agreement. Record processing. These secondary handlers inclusion of the term ‘‘import’’ under the evidence supports adding a new are commonly known as definition of ‘‘handle’’. As such, the term § 970.32. This section would establish ‘‘manufacturers’’ or ‘‘processors’’. Record ‘‘importer’’ should be defined to mean ‘‘a the definition of ‘‘signatory first testimony indicates that secondary handler located in the production area handler’’ to mean the person located in handlers or handlers other than first who imports leafy green vegetables that the production area who signs the handlers generally buy from first are produced or handled outside of the proposed agreement and who is the first handlers, and could receive product production area.’’ The term ‘‘importer’’ to handle leafy green vegetables. This from other handlers, processors, or appeared in the Notice of Hearing as definition is intended to identify manufacturers. Additionally, such § 970.13, and should be re-designated as signatory handlers who first receive secondary handlers also may purchase § 970.16.

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Material Issue Number 5(a)—Definition § 970.4, and should be redesignated as Food Safety Hazards for Fresh-cut Fruits of Terms § 970.6 and revised slightly for clarity. and Vegetables’’. FDA is the agency at the U.S. In addition to the definitions The term ‘‘crop year’’ should be Department of Health and Human addressed in Material Issues 3 and 4, defined to mean the 12-month period Services charged with primary certain terms should be defined for the beginning on April 1 of any year and regulatory responsibility for food safety. purpose of specifically designating their ending on March 31 of the following The FDA guidelines referenced above, applicability and limitations whenever year. The record indicates that leafy broadly referred to as ‘‘GAPs’’ and they are used in the proposed green vegetables are produced year ‘‘GHPs’’, are intended to assist the agreement. round in the production area. The produce industry in minimizing the risk ‘‘Act’’ should be defined in § 970.1 of proposed April through March period of food-borne contamination throughout the proposed agreement as the mirrors the existing crop year in the the industry’s production and handling Agricultural Marketing Agreement Act predominant production areas for leafy activities. According to the hearing of 1937, as amended (48 Stat. 31, as green vegetables. This period represents record, GAPs and GHPs, would provide amended; 7 U.S.C. 601–674). This is the a fixed timeline that would prescribe a the scientific baseline or reference for statute under which the proposed period of conduct essential for the Board’s administrative activities, such all audit metrics relating to production regulatory agreement would be and handling activities developed under operative. as preparing an annual budget of expenses and accounting for receipts the proposed agreement. Record evidence supports adding a As witnesses explained, and as new definition § 970.2, ‘‘Audit metric’’, and expenditures of funds. Thus, the term ‘‘crop year’’ would be synonymous included in the proposed agreement, the to the proposed agreement. According to Board should have authority to the record, ‘‘audit metric’’ should be with ‘‘fiscal year.’’ The definition of ‘‘crop year’’ should recommend, for approval by the defined to mean an auditable standard Secretary, the adoption of any other or requirement within a process control be revised to include authority for the Board, subject to approval of the documents or regulations, established prescribed pursuant to § 970.67. for the purposes of minimizing Secretary, to recommend any other ‘‘Audit verification’’ should be revised microbial food safety hazards in the annual period if a different annual to ‘‘audit’’ and should mean an official production and handling of leafy green period is found to be more appropriate. review conducted by the Inspection vegetables. These documents and The definition of ‘‘crop year’’ that Service to verify and document that regulations would be used as the basis appeared in the Notice of Hearing as good agricultural, handling, and for audits conducted by the Inspection § 970.5 should be revised as indicated manufacturing practices are adhered to Service under the program. throughout the growing, harvesting, above and redesignated as § 970.7. Section 970.9 that appeared in the packing, manufacturing, and The definition of ‘‘foodservice Notice of Hearing is being modified for transportation of leafy green vegetables. distributor’’ that appeared in the Notice clarification and redesignated as Additionally, according to the record, of Hearing should be replaced by a § 970.11. an audit would include a physical visit definition of ‘‘foodservice operator’’. The According to the hearing record, to the farm or facility subject to audit term should be defined to mean a ‘‘good manufacturing practices’’, or while it is in operation. This audit person that provides leafy green ‘‘GMPs’’, mean any FDA regulations would represent a ‘‘snapshot in time’’ vegetables to the public as a restaurant, which describe the methods, based on documentation reviewed, cafeteria, industrial caterer, hospital, or equipment, facilities, and controls persons interviewed, and operations nursing homes. These businesses required for producing fresh-cut food, observed. The intention of the audit is directly deliver leafy green vegetables to including processed, packaged leafy to provide the auditor with a picture of consumers, either by sale or by offering green vegetables. Current FDA the handler’s activities with the ultimate for direct consumption. Foodservice regulations appear in 21 CFR Part 110. goal of ensuring that such activities operators are excluded from the According to the hearing record, GMPs comply with program requirements. definition of ‘‘handler’’ in their role as a would provide the scientific baseline or The definition for ‘‘audit verification’’ foodservice operator, much the same as reference for all audit metrics relating to that appeared in the Notice of Hearing retailers are excluded from the term manufacturing activities developed as § 970.2, should be redesignated as handlers in their roles as retailers. under the proposed agreement. § 970.3, ‘‘audit’’. Record evidence also supports As recommended in this proposed The term ‘‘broker’’ should mean a clarifying that the list of businesses agreement, the Board should have person who coordinates the sale and identified in the proponents’ definition authority to recommend, for approval by transportation of leafy green vegetables of foodservice operators is not all the Secretary, the adoption of FDA for retail or foodservice operators, inclusive. This clarification is being guidance documents, regulations, or any without taking ownership of such added to the definition of foodservice other documents, for use in audits vegetables. This definition appeared in operator, which appeared as § 970.6 and conducted by the Inspection Service the Notice of Hearing as § 970.3, and is being revised and redesignated as under this part. This definition should be redesignated as § 970.4 and § 970.8. appeared in the Notice of Hearing as reworded for clarity. ‘‘Good agricultural and handling § 970.10, ‘‘good manufacturing As witnesses explained, and as practices’’ refer to general practices practices’’ and should be revised and recommended in this decision, the term established by FDA to reduce microbial redesignated as § 970.13, ‘‘good ‘‘critical limit’’ should refer to a food safety hazards in leafy green manufacturing practices or GMPs’’. maximum or minimum value that is vegetables. According to the hearing ‘‘Inspection Service’’ should be assigned to a process control when a record, good agricultural and handling defined to mean Fruit and Vegetable biological, chemical, or a physical practices are described in two FDA Programs, Agricultural Marketing parameter must be controlled. This guideline documents, the ‘‘Guide to Service, USDA, its designees, or any prevents or minimizes the occurrence of Minimize Microbial Food Safety other entity approved or recognized by a food safety hazard. ‘‘Critical limit’’ Hazards for Fresh Fruits and Vegetables’’ USDA to conduct audits on leafy green appeared in the Notice of Hearing as and the ‘‘Guide to Minimize Microbial vegetables. USDA recommends revising

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this definition to more clearly define the ‘‘Retailer’’ should be defined to mean (1) Zone 1 shall include the States of Inspection Service’s role in the audit any person that sells leafy green California and Hawaii. process. This definition appeared in the vegetables directly to the consumer. (2) Zone 2 shall include the States of Notice of Hearing as § 970.14 and Retailers’ sales typically involve the sale Alaska, Idaho, Montana, Oregon, should be revised and redesignated as of leafy green vegetables for further Washington, and Wyoming; § 970.17. preparation or home consumption by (3) Zone 3 shall include the States of The term ‘‘National Leafy Green the consumer. An example of a retailer Arizona, Colorado, Nevada, New Vegetable Board’’ or ‘‘Board’’ be added to would be a grocery store. Mexico, and Utah; the list of defined terms as § 970.22 of This definition appeared in the Notice (4) Zone 4 shall include the States of the proposed agreement. ‘‘Board’’ should of Hearing as § 970.24, and should be Illinois, Iowa, Minnesota, Nebraska, mean the administrative board revised for clarity and redesignated as North Dakota, South Dakota, and established pursuant to § 970.40 and § 970.30. Wisconsin; § 970.41. ‘‘Secretary’’ means the Secretary of (5) Zone 5 shall include the States of The term ‘‘part’’ should be added to Agriculture of the United States or any Arkansas, Kansas, Louisiana, Missouri, the proposed agreement as § 970.24 and officer or employee of the USDA who is Oklahoma, and Texas; (6) Zone 6 shall include the States of should be defined to mean the acting on their behalf. This definition Delaware, District of Columbia, Indiana, marketing agreement regulating the appeared in the Notice of Hearing as Kentucky, Maryland, Michigan, Ohio, handling of leafy green vegetables and § 970.25 and should be redesignated as Virginia, and West Virginia; all rules, and regulations issued § 970.31. ‘‘United States Department of (7) Zone 7 shall include the States of thereunder. Agriculture or USDA’’ should be defined Alabama, Florida, Georgia, Mississippi, As presented in the Notice of Hearing, to mean any officer, employee, service, North Carolina, South Carolina, and proponents proposed that ‘‘Person’’ program, or branch of the Department of Tennessee; and, should be defined to mean an Agriculture, or any other person acting (8) Zone 8 shall include the States of individual, partnership, corporation, as the Secretary’s agent or representative Connecticut, Maine, Massachusetts, association, or any other business unit in connection with any provisions of New Hampshire, New Jersey, New York, or legal entity. This definition should be this part. This definition appeared in Pennsylvania, Rhode Island, and revised to make it consistent with the the Notice of Hearing as § 970.27 and Vermont. definition of the same term in the Act should be revised with minor and redesignated as § 970.25. Material Issue 5(b)—Administrative modifications for clarity and Board The definition of ‘‘process control’’ redesignated as § 970.35. should be revised so that it more clearly A definition of the term ‘‘United The proposed agreement should reflects the usage of this term as it was States Food and Drug Administration or provide for the establishment of an presented by witnesses during the FDA’’ should be added to the list of administrative body (Board) to hearing. ‘‘Process control’’ should mean defined terms as § 970.36 of the administer the program and to provide a step or point within a production, proposed agreement and should mean for its effective and efficient operation. harvesting, handling, manufacturing, or the agency within the United States Membership on the Board should be transportation process at which the Department of Health and Human reflective of leafy green vegetable potential for microbiological Services. This definition allows the FDA industry stakeholders, namely signatory contamination can be reduced. This acronym to be used throughout the handlers, producers supplying such definition appeared in the Notice of proposed agreement. signatory handlers, importers, retailers, Hearing as § 970.22, and should be The definition of ‘‘Zone’’ that foodservice operators, and the public revised and redesignated as § 970.26. appeared in the Notice of Hearing as (consumers). Further, the proposed ‘‘Producer’’ is synonymous with § 970.28 should be revised and agreement should delineate the ‘‘grower’’ and should be defined to mean redesignated as § 970.37. ‘‘Zone’’ should procedures, powers, and duties of the any person engaged in a proprietary be defined to mean one of the Board. capacity in the production of leafy green subdivisions of the production area or USDA recommends that, based on vegetables for sale or delivery to a such other subdivisions as may be record evidence, the provisions of the signatory handler. established pursuant to § 970.41. proposed agreement pertaining to zones, Section § 970.20 of the Notice of Defining the zones would be important Board membership allocation among Hearing should be modified for clarity for the purpose of Board and the zones, eligibility requirements, and and redesignated as § 970.27. Technical Review Committee nomination procedures, be revised from Witnesses proposed the addition of representation, and is related to those provisions that appeared in the the term ‘‘region’’ to the list of §§ 970.40, 970.41, 970.42, 970.44, Notice of Hearing. Specifically, USDA definitions to clarify that ‘‘region’’ is 970.46, 970.49 and 970.66. recommends increasing the number of distinctly different from the term Record evidence supports modifying zones and redefining them so that ‘‘zone’’. As discussed later in Material the zones proposed by the proponents, regional similarities are recognized as Issue 5(b), zones are related to Board as well as adding additional zones. well as leafy green vegetable acreage membership. According to record Zones should be comprised of States and the number of farms harvesting evidence, ‘‘region’’ should mean a that are geographically contiguous and leafy green vegetables. USDA also production or growing area reflect similarities in climate and crop proposes that the Board’s membership distinguished by common production. Zones should also reflect be expanded and revised to reflect the environmental or growing conditions the distribution of leafy green vegetable proposed changes in zones, and to including, but not limited to, geography, acreage, and distribution of leafy green increase opportunity for participation of climate, production practices, water vegetable farms. ‘‘Zone’’ is further industry representatives on the Board. sources and distribution systems, and discussed under Material Issue 5(b). Lastly, USDA proposes that eligibility wildlife. This definition should be USDA recommends replacing the requirements and nomination added to the list of definitions as proponents’ proposed five zones with procedures be revised to address § 970.29 of the proposed agreement. eight zones, as stated below: witness concerns regarding diverse

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stakeholder (small businesses, organic of leafy green vegetables in the United distinct differences in geography and businesses, diversified businesses) States are Texas, Colorado, Georgia, climate. Witnesses also noted that representation among the Board Florida, and New York. proponents’ proposed Zone 5, which membership. This would provide for an Proponents explained that their intent included 16 States and the District of open, transparent, and inclusive was to create zones strictly for the Columbia, combined southern States nomination, selection, and appointment purpose of industry representation on such as Florida with northern States process. the Board. Proponents contended that such as Vermont, Maine, and New York This Material Issue addresses the proposed zones and corresponding which vary widely in geography, §§ 970.37, 970.40, 970.41, 970.42, Board representation would provide for climate, and production practices. 970.43, 970.44, 970.45, 970.48, 970.49, the development of audit metrics that Witnesses further asserted that the 970.50, and 970.51 of the proposed recognized regional differences. States in proposed Zone 5 have different agreement. These sections address the Proponents further explained that they soil types, water sources, growing subject areas of: establishment of zones, intended to develop a process that seasons, and marketing channels. establishment and membership of the would be inclusive and transparent to Witnesses testified that production Board, rezoning and reallocation, allow for the participation of various practices, which vary across the United eligibility, term of office, nominations, stakeholder groups and the recognition States, were reflective of climates. alternate members, compensation and of regional, geographic differences. The Witnesses suggested that the proposed expenses, administrative procedures, topic of audit metrics development is zones should include similar climate and powers and duties of the Board. discussed in Material Issue 5(c). areas such as the Upper Midwest as one These sections were originally proposed A considerable number of witnesses, zone. An example cited by witnesses in the Notice of Hearing as §§ 970.28, both those who were opposed to the identified Upper Midwest States as 970.40, 970.41, 970.42, 970.43, 970.44, establishment of the proposed having climate requiring different 970.47, 970.48, 970.49, and 970.50, agreement, as well as those who production practices than those found respectively. supported the concept of a national in Georgia or California. Witnesses agreement but suggested improvements explained that Upper Midwest States Definition of Zones to the proponents’ proposal, raised tend to have periods of hard freezes, The proponents testified that the concerns over the proponents’ proposed thereby limiting their production season production area should be subdivided zones. Witnesses testified that the to the months of May through October. into five zones for the purpose of proposed zones were geographically too In contrast, witnesses noted that the industry representation on the Board large, and did not recognize regional State of Georgia has a high humidity and administration of the proposed differences in geography, types of crops climate, Northeast States have cooler agreement. The five zones were grown, production practices, climates, and Southern California has proposed as follows: environmental factors, climate, and more of a desert climate. (1) Zone 1: California, Washington, diverse stakeholder concerns that exist Witnesses asserted that States having Oregon, Hawaii, and Alaska. in the United States leafy green similar climate and geography should be (2) Zone 2: Arizona, Montana, North vegetable industry. Witnesses also grouped together in order to represent a Dakota, Wyoming, South Dakota, Idaho, testified that the proposed zones did not contiguous area as further support of Nevada, and Utah. accurately reflect the distribution of proper representation of like concerns (3) Zone 3: New Mexico, Colorado, leafy green vegetable acreage or the among States. One witness offered the Nebraska, Minnesota, Iowa, Kansas, distribution of farms. example of combining the States of Oklahoma, Texas, Missouri, Arkansas, Witnesses contended that the Florida, Georgia, and Alabama as an and Louisiana. proponents’ proposed zones were not appropriate representation of like (4) Zone 4: Wisconsin, Michigan, established based on agricultural or geography, climate, and production Ohio, Illinois, Indiana, Kentucky, climatic conditions to reflect common practices. Another witness suggested Tennessee, Mississippi, Alabama, and growing seasons or agronomic zone subdividing the State of Maryland to Georgia. characteristics. Witnesses further place the northern half of Maryland (5) Zone 5: Maine, New Hampshire, claimed that it was unreasonable to with States west to Michigan in one Vermont, New York, Connecticut, expect representatives of zones zone, and southern part of Maryland Massachusetts, Pennsylvania, New inclusive of States that greatly differ in with States west of the Mississippi River Jersey, West Virginia, Virginia, leafy green vegetable crop type, in another zone. Additionally, another Maryland, Delaware, Rhode Island, production methods, geography, and witness suggested combining the North Carolina, South Carolina, Florida, climate, to adequately understand the Northeast States into one single zone and the District of Columbia. growing conditions across such a wide because of similarities in climate. For this zone structure, the geography. Witnesses cited several Some witnesses suggested that the proponents utilized 2007 United States examples to illustrate the proponents’ division of zones and Board Census production volume data for leafy proposed zones were geographically too membership allocation among those green vegetables. Proponents explained large and included States in the same zones should be based on the number of that they attempted to anchor each zone zone that do not share geographic and leafy green vegetables acres harvested with a key leafy green vegetable- climate characteristics, but would be for the fresh and fresh-cut market. producing State, as detailed in Material represented by the same membership Witnesses explained that some Issue 1. For this reason, the States of and Board member allocation. production areas benefit from California and Arizona were As an example, witnesses testified production environments that allow for purposefully separated so that their that proponents’ proposed Zone 4 multiple harvests of high-yielding crops, production volume would not be included 10 States that stretched from while other areas only harvest one crop attributed to one zone, thereby not Wisconsin to Alabama. These witnesses per year. skewing the balance of Board member pointed out that, as proposed, the States According to witnesses, an example of representation in favor of those two of Georgia and Ohio, and the States of this difference would be a producer in States and thus, a specific zone. Other Wisconsin and Alabama, would be in California that may harvest a field of anchor States that produce the majority the same zone even though they have immature or baby leaf varieties of leafy

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green vegetables several times within with the proponents’ position that the groups are adequately represented. one growing season, while producers of division of zones would not have an These stakeholder groups would cabbage in New York may only harvest impact on the process of developing include, but are not limited to: Small one time per growing season. In this audit metrics under the proposed producer and signatory handler entities, example, if production volume were agreement. They explained that if the organic producers and signatory used instead of acreage, the producer in proposed zones did not adequately handlers, and diversified farming California would be given more weight represent regional differences in operations. in the allocation of producer seats under geography, climate, and production USDA has analyzed witness the proponents’ proposal. However, practices, the composition of Board testimony in conjunction with record witnesses indicated that if the number membership would not adequately data and has developed recommended of acres were used as a basis of member represent the complex spectrum of changes to the proposed zones. allocation, the example farm in producer and signatory handler interests Evidence reviewed by USDA includes California would be equally weighted to that exist in the United States leafy both Census and NASS leafy green the farm in New York. As such, green vegetable industry. Furthermore, vegetable data, and information specific witnesses suggested that the usage of because the Board would ultimately be to the distribution of leafy green acres would therefore result in a more responsible for recommending audit vegetable acreage and the number of equitable representation of producers on metrics to USDA for approval, witnesses farm reporting such acreage by State. In the Board. feared that minority and diverse addition, USDA considered information Other witnesses, including those stakeholder concerns would be supplied by witnesses with regard to opposed to the proposed agreement, overlooked in this process because they geography, climate, and seasonal growth suggested using the number of farms per may not be represented on the Board. patterns of different leafy green State to capture the distribution of Lastly, witnesses, including vegetable crops to more appropriately producers nationwide as opposed to proponent witnesses, stated that the group States into zones. relying solely on production volume to Board should have the ability to modify USDA’s analysis of the distribution of determine producer representation. the number and definition of zones, in leafy green acreage throughout the These witnesses explained that while order to reflect the diverse and changing production area as compared to the some States have a concentration of leafy green vegetable industry. volume of production demonstrated that large producer entities producing high- Proponent witnesses testified that significant variances exist between areas yielding crops, other States have a high their intent in defining the proposed producing high-yielding crops and those number of smaller producer entities that zones was to allow for adequate producing low-yielding crops. An produce leafy green vegetables as a participation by stakeholders to ensure acreage-based analysis places leafy portion of their overall farm production. consideration of diverse interests in green vegetable acreage having smaller Witnesses argued that under a zone and Board decision-making, including the annual per acre production yields on membership allocation structure that development of the audit metrics. more equal footing with leafy green focuses on production volume, such as However, there was record testimony vegetable acreage having higher annual that proposed by the proponents, States that the proposed zones were per acre production yields. This should having a high number of small, low- geographically too large to ensure result in greater and more equitable volume farms risk being under- adequate representation of diverse opportunity for participation in States represented compared to States with stakeholder interests. The record further having lower yields per acre. As such, fewer high-volume farms. Witnesses establishes that acreage of leafy green USDA recommends that acreage rather contended that under-representation of vegetables and the number of farms than production volume, as proposed by these small farm operations would harvesting leafy green vegetables rather proponents, should be utilized in result from the proponents’ proposed than production volume also should be defining zones. zones. Witnesses with this concern considered in subdividing the Furthermore, USDA’s analysis of the stated that the proposed zones and production area into zones. number of farms reporting harvest of corresponding member representation Throughout the hearing, proponents leafy green vegetables (specifically for on the Board should be revised to better stated they were open to revisions in the the fresh and fresh-cut market) allowed recognize diversified, small-scale proposed agreement to address concerns USDA to assess the distribution of operations. brought to light by the hearing process. industry stakeholders across the Witnesses argued that an increase in Proponents asserted that they were production area. Using the number of the number of zones together with a willing to collaborate with concerned farms harvesting leafy green vegetables more accurate zone definition would witnesses and USDA to improve the in defining zones would address likely result in greater opportunities for proposed agreement’s effectiveness. concerns that States having a high stakeholders, such as small diversified Several proponents stated that, while number of small producer entities farms, farms using non-conventional their proposal attempted to present an would be under-represented under the production methods, and handler equitable, balanced division of zone structure proposed by proponents. entities interacting with local, small- geographic zones and diverse Lastly, defining zones on a combined scale markets and producer perspectives of the supply chain, USDA analysis of leafy green vegetable acreage associations, to gain representation. should have the discretion, based on and the number of leafy green farms Witnesses stated that increased hearing record evidence, to modify the provides better representation on the opportunity for stakeholders would proposal so that it better reflects the Board of diverse stakeholder interests. result in the inclusion of those groups’ needs of the industry. In addition, both USDA also took into consideration concerns in Board decisions, including witnesses who were opposed to the witness testimony that zones should the audit metric development process. proponents’ proposal and those who reflect grouping of States that are Witnesses argued that, contrary to the advocated improvements to the contiguous and share geographic and proponents’ position, the definition of proposal, stated that USDA should climate similarities. According to zones and the recommendation of audit revise the proposed zones and Board hearing record evidence, incorporating metrics by Board members are membership eligibility requirements to guidelines that would require, to the intrinsically linked. Witnesses disagreed ensure that leafy green stakeholder extent practicable, grouping of States

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into zones that are contiguous and share (1) Zone 1 should include the States of signatory handlers, producers, and climate and similarities in agricultural of California and Hawaii; the other at-large members (retailer, practices would result in zones (2) Zone 2 should include the States foodservice, importer, and public) comprised of States that share similar of Alaska, Idaho, Montana, Oregon, among the 23 seats would be as follows: production and handling concerns. Washington, and Wyoming; 13 handler seats (57 percent), 6 Regarding the above, USDA (3) Zone 3 should include the States producer seats (26 percent), and 4 at- recommends grouping, to the extent of Arizona, Colorado, Nevada, New large seats (17 percent). practicable, geographically contiguous Mexico, and Utah; Proponents testified that even though States into zones to reflect similarities (4) Zone 4 should include the States the proposed agreement would regulate in climate and agricultural practices. of Illinois, Iowa, Minnesota, Nebraska, signatory handlers, the inclusion of For example, southeastern States such North Dakota, South Dakota, and producers delivering product to those as Mississippi, Alabama, Florida, Wisconsin; handlers as Board members was Georgia, and North and South Carolina (5) Zone 5 should include the States important given that they would also be were grouped together because of the of Arkansas, Kansas, Louisiana, impacted by any regulations in effect similarity in warm, coastal climates, Missouri, Oklahoma, and Texas; under the proposed agreement. The type of crops grown, and growing (6) Zone 6 should include the States proponents testified that the importer, seasons. Tennessee was added to this of Delaware, the District of Columbia, retailer, foodservice, and public group as record evidence indicated that Indiana, Kentucky, Maryland, Michigan, members are needed to represent the the similarity between leafy green Ohio, Virginia, and West Virginia; diverse perspectives of the farm-to- vegetable production in this State was (7) Zone 7 should include the States consumer leafy green vegetable supply more similar to the coastal States than of Alabama, Florida, Georgia, chain. They further stated that each of its northern neighbors. Mississippi, North Carolina, South these stakeholders can address unique Similarly, the northeastern States Carolina, and Tennessee; factors associated with their sector. stretching from Pennsylvania and New (8) Zone 8 should include the States Proponents stated that the public Jersey up through Maine were grouped of Connecticut, Maine, Massachusetts, member seat was intended to provide because of similarities in crop types and New Hampshire, New Jersey, New York, consumer representation on the Board. growing seasons. According to the Pennsylvania, Rhode Island, and Proponents explained further that hearing record, the northeastern States Vermont. specific producer and signatory handler produce a majority of the nation’s These zones, which were previously stakeholder groups should be assured cabbage, which is typically a colder defined in § 970.28 of the Notice of representation on the Board and, weather crop that is harvested according Hearing, now appear in § 970.37. therefore, proposed representation to a crop cycle that is distinctly different The Board should have authority to requirements for these groups. from warm weather crops. Another recommend future modifications of the Specifically, the proposed requirements example is the grouping of Arizona, defined zones and to ensure proper state the majority of producer members New Mexico, Nevada and Utah. These geographic division of the production could not be engaged in the act of States all represent warmer, drier area over time. In making such a handling leafy green vegetables or climates with spring and summer recommendation, the Board would be manufacturing fresh-cut, packaged leafy growing and harvest seasons. These expected to consider factors similar to green products. In addition, the Board States also typically rely heavily on those used in deriving the zones would include at least two small irrigation watering systems as rainfall is proposed in this recommended producer business entities, and four limited. Similar to the case of decision. signatory handler members would be Tennessee, Colorado was included in Board Membership and Allocation of manufacturers of fresh-cut leafy green the southwestern State grouping even Member Seats Among Zones vegetables. though that State tends to have an Proponents explained that the overall cooler and wetter climate. Proponent witnesses advocated a proposal to include producers not However, according to the record, Board membership of 23 members engaged in handling or manufacturing Colorado leafy green vegetable crops, allocated among five zones, with the leafy green vegetables or products growing and harvest seasons were more representation of each zone based on would allow for representation of ‘‘pure’’ similar to those in Arizona and New that zone’s relative volume of leafy producer interests on the Board. Mexico than those in the other green vegetable production. Of the Regarding Board seats allocated to small neighboring States of Nebraska, 23-member Board proposed by the producer entities, proponents explained Wyoming, or Kansas. proponents, 13 seats would be assigned that the United States leafy green States ranking among the top leafy to signatory handlers and 6 seats would vegetable production industry is green vegetable bearing acreage were be assigned to producers delivering to comprised of many different sizes of identified so that each zone was signatory handlers. The signatory producer operations following varying anchored with a key leafy green handler and producer member seats production methods, and that each type vegetable producing State. This is would be allocated among the proposed of producer is faced with unique consistent with the method applied by five zones as follows: Four handlers and challenges when producing for the proponents. two producers from Zone 1; three United States leafy green vegetable In summary, the record supports handlers and one producer from Zone 2; industry. For this reason, proponents increasing the number of proposed two handlers and one producer from stated that small producer entities zones from 5 to 8. The zones would Zone 3; two handlers and one producer should be assured representation on the delineate smaller geographic areas that from Zone 4; and two handlers and one administrative Board. Lastly, both reflect similarities in climate, producer from Zone 5. In addition, the proponents explained that geography, and crop production, and proponents’ proposal would assign one manufacturers of fresh-cut leafy green increase opportunity for participation of seat to each of the following interest vegetables face unique challenges that industry representative on the Board. groups: Retailers, foodservice, importers are different from those faced by other The zone structure would be as (signatory handlers), and the public. As sectors of the leafy green vegetable follows: proposed by proponents, representation industry. For this reason, proponents

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stated that their representation on the (1) Zone 1 should have four signatory zones. This differs somewhat from what Board was important to understanding handlers and three producers; the proponent group proposed—that the issues that are particular to that part of (2) Zone 2 should have one signatory Board would need to consider shifts in the United States leafy green vegetable handler and one producer; production. Other criteria to consider industry. (3) Zone 3 should have one signatory would be the importance of new Both witnesses who were opposed to handler and one producer; acreage, the equitable relationship the proponents’ proposal and those who (4) Zone 4 should have one signatory between membership and zones, advocated improvements to the handler and one producer; economies to result in promoting proposal stated that USDA should (5) Zone 5 should have one signatory efficient administration of the program, revise, as necessary, Board membership handler and one producer; and other relevant factors. The to ensure that diverse leafy green (6) Zone 6 should have one signatory agreement should require that each zone vegetable industry stakeholder groups handler and one producer; be represented by at least one producer are represented. Witnesses testified that (7) Zone 7 should have two signatory one signatory handler seat. the proponents’ proposed Board handlers and one producer; and, membership, which resulted from their (8) Zone 8 should have one signatory Eligibility proposed zones, appeared to be based handler and one producer. The proponents proposed eligibility more on ensuring the strategic voting In addition to the producer and requirements for the purpose of power for certain States. These signatory handler seats, four seats identifying persons who would be witnesses asserted that the proposed should represent the following four qualified to serve as members on the zones and corresponding Board groups: Importers, retailers, foodservice, Board. Proponents proposed that in membership would provide inequitable and the public. Representation of these order for a signatory handler (including representation of leafy green vegetable stakeholders is needed to represent the importers) or producer to be eligible to industry stakeholders, particularly diverse perspectives of the leafy green serve on the Board, each should be an small, diversified farm operations. vegetable supply chain. The owner, officer, or employee of a The record supports the establishment representation of the proposed 26- signatory handler or producer at the of an administrative Board to administer member Board for signatory handlers, time of their selection and throughout the proposed agreement and provide for producers, and the other members their term of office in the zone for which its effective and efficient operation. The (importer, foodservice, retailer, and selected. record also indicates that the public) would be 12 seats (46 percent), Proponents proposed that the retail, membership of the administrative Board 10 seats (39 percent), and 4 seats (15 foodservice, and public members and should represent signatory handlers, percent), respectively. their respective alternate members not producers supplying such handlers, This revised allocation represents an be engaged in the production or importers, retailers, foodservice, and the increase in producer representation on handling of leafy green vegetables. public. the Board from the proponents’ Additionally, the retail and foodservice Upon consideration of the record proposed 26 percent to 39 percent, as members and their respective alternate evidence, a 3-member increase in the well as a decrease in at-large members should be, at the time of their total size of the Board would allow for representation from the proponents’ selection and throughout their term of greater industry representation yet proposed 17 percent to 15 percent. The office, an owner, officer, or employee of would maintain a membership that is revised signatory handler representation the firm represented by the seat manageable and efficient. For these would result in 46 percent versus the selected. This would enable these reasons, the Board membership should proponents’ 57 percent. members to represent all stakeholders be increased from 23 to 26 members. Of The proponents’ recommendations involved in the supply chain for that that total, USDA recommends that 22 that the majority of grower members not sector. Board member seats be designated as be engaged in handling, that at least two Regarding the producer and signatory producer and signatory handler seats, of the grower members represent small handler member seats, there was and the remaining 4 seats be designated businesses and that at least four of the testimony presented at the hearing as importer, retailer, foodservice, and handler members be manufacturers of advocating that such members should public member seats. Each member fresh-cut products should remain in be required to be a legal resident in the should also have an alternate who § 970.40. Additionally, to the extent zone for which selected. However, would have the same qualifications as practicable, Board membership should record evidence supports that where a the member for whom he or she is an include diversified farm producers and producer or handler conducts business alternate. organic producers and handlers. is a more important criteria than the In allocating handler and grower Section 970.40 of the proposed producer or handler’s place of seats, each zone’s combined share of agreement is being revised as discussed residence. national leafy green acreage and the above. Multiple witnesses expressed concern national number of leafy green vegetable Proponents proposed including that the proposed eligibility provisions producing farms were considered. In authority to reapportion Board member could allow large leafy green vegetable instances where a zone represents a seats among zones, change the number producers and handlers—who often greater portion of leafy green vegetable of Board members, and revise operate in multiple States—to have acreage or a larger number of leafy green composition (the relative number of member seats in several zones. These vegetable farms, additional producer or signatory handler, producer and other witnesses testified that the agreement signatory handler members would be seats). This authority appeared in the should limit the number of seats any allocated. Additionally, record evidence hearing notice under § 970.40 and is one company could fill to maximize supports assigning a minimum of one being moved to a new § 970.41. industry representation on the Board. producer member and one signatory In making any recommendation to According to record evidence, handler representative to each zone. revise membership, the Board would limiting Board member representation Based on the foregoing discussion, the have to consider the geographic to provide that no one company or its following is the allocation of producer distribution of acreage and the number affiliates could be represented on the and signatory handler members: of leafy green vegetable farms among the Board by more than one signatory

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handler (including importer) or would be collected by USDA (initially) successfully compete and receive producer and their alternate member and by the Board (for subsequent nomination and appointment to the should provide more opportunities for nominations) at producer and signatory Board. Substantial concern was raised diverse representation on the Board. As handler meetings, by mail, or through over the potential for large producer and such, a provision is added to the any form of electronically verifiable signatory handler entities to control the proposed agreement to specify that communication. Names received as nomination process and the resulting company representation for such nominees for producer and signatory list of nominees forwarded to the entities would be limited to one member handler member seats would then be Secretary for approval. seat and one alternate member seat. placed on a ballot and would be voted Additional concern was voiced over Finally, the remaining members of the on by their peers, respectively. A list of the process outlined by proponents for Board may be from any zone because nominees receiving the highest number the nomination of the retailer, they represent the production area at of votes would be forwarded to USDA foodservice, importer, and public large. The eligibility requirements for selection and appointment by the member seats. Witnesses argued that proposed in § 970.41 of the Notice of Secretary. Proponents explained that because the proponents’ proposal Hearing are revised as discussed above once the producer and signatory handler allowed nominations for these positions and redesignated as § 970.42. members had been appointed, those to be made exclusively by appointed members would nominate the retailer, producer and signatory handler Alternate Members foodservice, importer, and public members to USDA, the proposed Proponents proposed that each Board members and their alternate members. process lacked transparency or the member should be assigned an alternate Final selection and appointment of the opportunity for input from industry member for the purpose of assuring retailer, foodservice operator, importer, representatives not appointed to the continuity and stability of Board and public member would be made by Board. operations. Alternate members would the Secretary. Many witnesses testified that in the act in the place and stead of the Board Proponents further explained that, as absence of proposed zones that better members they are alternates for when part of the nomination process, reflected regional differences and an the Board members cannot fulfill their nominees would be required to indicate increase in Board membership to allow Board obligations. Alternate members in advance of selection their interest to for greater industry participation, all would succeed their member in the serve as a member, alternate, or both, Board member selections should be event of that member’s death, removal, and that they are willing to accept the made by the Secretary. resignation or disqualification. The seat for which selected. According to These witnesses advocated the alternate would then serve until a the record, agreeing in advance to serve establishment of a system under which successor was selected and qualified. as a Board member or alternate member a peer nomination voting process would According to proponents, alternate would avoid possible delays in the be replaced by an industry-wide members would be subject to the same appointment of the Board. nomination process, with selection and eligibility requirements as Board According to proponents, the appointment by the Secretary. Others members and would be nominated in proposed agreement would provide, in suggested that nominations should be the same manner as Board members. times when nominations are not made made by the general public, with Proponents explained that providing in a timely manner and as specified, the selection and appointment by the alternate Board members would ensure Secretary authority to appoint members Secretary. According to witnesses full representation of the industry, as and alternates who meet the proposed making these suggestions, their well as full representation of their eligibility requirements. Furthermore, recommendations would lead to a particular zone and group (producers, proponents explained that in the event transparent process for the signatory handlers, or other stakeholder that any vacancy were to arise on the identification and selection of Board members). Board due to an individual’s members, and would improve the The record supports the proponents’ disqualification, removal, resignation, or potential for diverse stakeholders to proposal regarding alternate members. death, a successor member or alternate participate on the Board. This proposal appeared as § 970.44 of member would be nominated and Record evidence supports that a the Notice of Hearing and is selected in accordance with the process for Board member nominations redesignated as § 970.45. The last proposed nomination and acceptance is necessary. Further, record evidence sentence of that section is removed as it procedures, or at the discretion of the supports that nominations for producer is duplicative of language that appears Secretary. and signatory handler (including in § 970.49. A considerable number of witnesses, importer) member seats and their both those who were opposed to the alternate member seats of the Board, Nominations establishment of the agreement, as well should be made by their respective A nomination mechanism should be as those who supported the concept of peers. As such, nominations for established through which members and a national program but suggested signatory handler member seats and alternate members of the Board would improvements to the proponents’ their alternates only would be made by be nominated, selected, and appointed proposal, raised concerns over the signatory handlers. Likewise, only by the Secretary. Record evidence proposed nomination and selection producers supplying signatory handlers supports revising § 970.43 of the Notice process outlined by the proponents. would be allowed to nominate eligible of Hearing to improve transparency in The primary concern among these producers for producer member seats the selection and appointment of Board witnesses focused on what was and their alternate seats. members. perceived as a closed nomination Record evidence supports that the In their proposal, proponents process. These witnesses stated that a nomination process for the retailer, described a nomination process to peer nomination and ballot system, in foodservice, and public member, and identify Board member nominees and to combination with the proponents’ their alternates, should be revised to provide for their selection and proposed zones and limited number of allow for nominations to be received at appointment by USDA. Proponents Board member seats, would result in the meetings, by mail, or by any form of explained that names of nominees inability of diverse stakeholders to electronically verifiable communication

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from any person in the production area. limits would not apply to alternate explained that Good Agricultural, This revision would allow for greater members to ensure continuity in Board Handling, and Manufacturing Practices industry and public participation in the operations. are guidelines that are independent of nomination of persons representing the the proposed agreement and, therefore, Compensation and Expenses retail, foodservice, and public would not be subject to recommended communities and would allow for According to record evidence, Board revisions proposed by the Board. The greater transparency in that process. members and alternate members, witness offered that approval of audit As part of the nomination process, committee and subcommittee members, metrics would better capture the intent nominees would be required to indicate including those members serving on the of the proponent group. Hearing record in advance of selection their interest to Technical Review Committee and the evidence supports replacing ‘‘acceptance serve as a member, alternate, or both, Research and Development Committee, of Good Agricultural, Handling, and and that they are willing to accept the would necessarily incur some expenses Manufacturing Practices’’ with seat for which selected. This would while attending meetings, or performing ‘‘approval of the audit metrics as avoid possible delays in the other duties under the proposed provided in § 970.67’’ in § 970.49 of the appointment of the Board. agreement. Proponents propose that proposed agreement. The record evidence supports revising reasonable expenses, which could In the event that a Board member the proponents’ nomination process by include expenses associated with travel, were absent from a meeting, witnesses removing the industry vote on nominees meals, and lodging, should be explained that that member’s alternate received. Instead, all names received reimbursed. However, proponents could serve in the absent member’s during the nomination period should be explained these same members and place and stead for the purpose of forwarded to the Secretary, together alternate members would not receive constituting a quorum and voting. with necessary information concerning any compensation for their time. No Proponents further explained that if their eligibility. specific testimony was received in both the member and their alternate The Secretary would appoint from opposition to this proposal. A provision were unable to attend a meeting, the those nominees the members and for compensation and expenses was absent member or Board could designate alternate members of the Board on the proposed in the Notice of Hearing as any other alternate from the same zone basis of the representation provided for § 970.47 and is redesignated as § 970.48. and group who is present at the meeting in §§ 970.40 through 970.42 of this Quorum and Voting Provisions to serve in the absent member’s place proposed agreement. and stead. Finally, the record supports The proponents proposed that For example, Zone 7 is proposed to be nomination provisions with regard to provisions establishing quorum and allocated two signatory handler acceptance, failure to nominate, and voting procedures would be necessary members. If one of the two Zone 7 vacancies. Sections 970.43(c), (d) and (e) for the effective functioning of the signatory handler members were present as published in the Notice of Hearing proposed Board. In their proposal, at a meeting and both the other member are redesignated as § 970.44(c), (e) and proponents stated that having a quorum and their alternate were both absent, the (f). requirement would ensure a majority of alternate for the first member could Board members be present prior to the serve in the place and stead of the Term of Office Board voting on any action. According absent member because they would The proponents proposed that the to proponents, a quorum would be met represent both the same zone and group term of office for Board members and when a majority of all Board members as the absentee. In this scenario, the alternates should begin on April 1 and were present at a meeting, including at alternate member would be selected to continue for two years. The record least one member from each zone. If a serve in the place and stead of the indicates that leafy green vegetables are quorum were met, proponents stated absentee by either the absent Board produced year round and that a term of that voting requirements for any action member or the Board. In this same office beginning on April 1 corresponds taken by the Board would require the example, if an available alternate to the beginning of the time period concurrence of a majority of all the member was a signatory handler from a designated in the definition of crop members present at the meeting. different zone or was an alternate year. This language was published in The proponents identified three Board producer for Zone 7, that alternate could the Notice of Hearing as § 970.42 and is actions that would require more than a not be designated to serve. redesignated as § 970.43. simple majority vote. Proponents Proponent witnesses testified that This decision recommends the two- proposed that a minimum concurrence meetings of the Board should be open to year term of office as proposed by of two-thirds of the Board members at the public, and notice of meetings proponents for Board members and their a meeting be required for Board actions should be given to the Secretary in the alternates to increase industry related to the acceptance of GAPs, same manner as is given to members of participation in administering the GHPs, and GMPs, as well as changes in the Board. The record indicates that at proposed agreement. The two-year term the assessment rate and termination of Board meetings, members could cast of office would apply to all Board the agreement. Proponents explained their vote by voice, hand, or in writing. members, including those representing that for these specific actions a 2⁄3 vote Additionally, a member participating the public. The maximum number of requirement would be needed due to the by telephone would need to confirm his terms that an individual would be importance of changes to audit metrics, or her vote in writing. According to the allowed to serve as a member on the assessments, or termination. record, a videoconference would be Board would be three consecutive two- One witness testifying in favor of the considered an assembled meeting and year terms of office, or a maximum of super-majority provision clarified that all votes would be considered as cast in six consecutive years. Thus, once a the original language proposed by the person without need for subsequent person has served as a Board member proponents and published in the Notice written confirmation. for six consecutive years, that person of Hearing erroneously referred to The record supports the need to would not be eligible for re-nomination ‘‘acceptance of Good Agricultural, establish quorum requirements and to the Board until after 12 consecutive Handling, and Manufacturing Practices’’ voting procedures so that meetings are months out of office. Such 6-year term instead of audit metrics. The witness conducted in an orderly manner and

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that adequate representation in Board execute its responsibilities under the financial planning of Board expected decisions. However, the proposed proposed agreement. They pertain to expenditures and anticipated receipts. language should be modified to state specific activities authorized under the In addition, the development of an that a majority of all appointed members proposed agreement, such as annual budget would be instrumental in of the Board shall constitute a quorum. investigating and compiling information determining, along with production This would address situations in which regarding leafy green vegetables, and to estimates, the annual assessment rate. a zone may not have any appointed the general administration of the The witness stated that the budget members. proposed agreement including hiring should be reviewed and approved by No specific testimony was received in employees, appointing officers, and USDA to ensure the fiscal responsibility opposition to this proposal. keeping records of all Board in the proposed agreement’s Accordingly, the provisions regarding transactions. administration. quorum and voting procedures in The specific duties of the Board At the hearing, some witnesses raised § 970.48 would be revised as previously proposed by the proponents are as questions regarding the protection of discussed above and redesignated as follows: confidential information, especially § 970.49. (a) To act as intermediary between the within the context of financial reports Secretary and any signatory with respect developed by the Board, and audit of Powers to the operations of the agreement; Board annual financials, including Proponent witnesses testified that (b) To select from among its members receipt of assessments and the certain powers should be assigned to the a chairperson and such other officers as disbursement of all funds. Witnesses Board in order for it to carry out its may be necessary, and to define the expressed concern over the need to functions under the proposed duties of such officers; maintain confidentiality of proprietary agreement. Proponents indicated that (c) To establish subcommittees and information when such reports are these powers would enable the Board to advisory boards to aid the Committee in written or audits conducted. make recommendations to the USDA the performance of its duties under the The duties proposed by the that reflect the conditions in the agreement; proponents and listed above are industry based on their knowledge and (d) To adopt such bylaws for the reasonable and necessary. No specific experience. To this end, the proponents conduct of its business as it may deem testimony was received in opposition to included six powers in their proposal: advisable; this proposal. This proposal was (1) To administer the proposed (e) To keep minutes, books, and included in the Notice of Hearing as agreement in accordance with its terms records which clearly reflect all the acts § 970.50 and is revised as previously and provisions; and transactions of the Committee and discussed and redesignated as § 970.51. subcommittees, and these shall be (2) To make such rules and Material Issue Number 5(c)—Audit subject to examination by the Secretary regulations, with the approval of the Metrics and Verification Audits Secretary, as may be necessary to at any time; effectuate the terms and provisions of (f) To appoint such employees or According to record evidence, the the proposed agreement; agents as it may deem necessary, and to proposed agreement should provide that (3) To adopt, with the approval of the determine the compensation and define verification audits be conducted to Secretary after notice and comment, the duties of each; verify that signatory handlers are audit metrics to administer the terms (g) To cause its financial statements to complying with the provisions of the and provisions of the proposed be audited by a certified public proposed program. This would include agreement; accountant at least once each crop year audits of signatory handler operations to (4) To cooperate with existing State and at such other times as the ensure that GHP audit metrics are being boards, commissions and agreements Committee may deem necessary or as adhered to, as well as producer through memorandum of understanding the Secretary may request. Such audit operations delivering to those handlers to affect the purposes of the proposed shall include an examination of the to ensure that GAP audit metrics are agreement; receipt of assessments and the being adhered to. Verification audits (5) To receive, investigate, and report disbursement of all funds. The should also be conducted of to the Secretary complaints of violation Committee shall provide the Secretary manufacturer operations (for those of the provisions of the proposed with a copy of all audits and shall make manufacturers who are signatories to the agreement; and, copies of such audits, after the removal proposed agreement) to ensure that (6) To recommend to the Secretary of any confidential information that may GMP audit metrics are being adhered to. amendments to the proposed agreement. be contained in them, available for Proposed provisions for verification No specific testimony was received in examination at the offices of the audits are provided for in § 970.66. opposition to this proposal. Committee; Record evidence supports providing Certain powers should be granted to (h) To investigate the production, the Board with the authority to the Board to enable it to properly handling and marketing of leafy green recommend audit metrics. Audit metrics administer the proposed program. Upon vegetables and to assemble data in established under the proposed program review, power 3 above is included in connection therewith; and, would represent a set of auditable power 2 and is therefore duplicative, (i) To furnish such available standards or process control that would while power 4 is more appropriately information as may be deemed pertinent allow an auditor to determine if a included under Board duties. The or as requested by the Secretary. producer or handler is in compliance section ‘‘Powers’’ originally was Record evidence indicates that, in with the program. Provisions for the included in the Notice of Hearing as addition to the duties proposed by the development of audit metrics are § 970.49 and is revised and redesignated proponents, the duty to develop an provided for in § 907.67. as § 970.50. annual budget for review and approval In addition, a Technical Review by the Secretary should be included. Committee (TRC) should be established Duties Witnesses testifying in favor of this to assist the Board in the development Proponents stated that specific duties addition stated that development of a of audit metrics. Members of the TRC are necessary for the Board to fully budget is necessary to ensure proper would represent signatory handlers and

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producers throughout the production based on documentation reviewed, agency that is authorized to audit on its area, as well as stakeholder interest persons interviewed and operations behalf. Proponents explained that audits groups including but not limited to observed. Information gathered during should be conducted on a regular organic and non-conventional the audit would reflect past and ongoing schedule that would ensure every agriculture, small business operations, activities of the signatory handler or handler is audited during their members of the scientific community, their supplying producer(s) to the corresponding production season. In and interested government agencies. Inspection Service. addition, unannounced audits of Authority for the TRC would be Section 970.66 of the proponents’ handlers and associated producers provided for in § 970.46 (formerly proposed language describes should be performed during the § 970.45). verification audit provisions for GAPs, production season in each zone. Provisions requiring traceability GHPs and GMPs audits. Proponents Finally, § 970.66 is revised for clarity. should be established under the stated that signatory handlers would be proposed program. The ability to trace required to ensure that any leafy green Administrative Review produce during all stages of production, vegetables handled by their operation Under proposed § 970.70, any handling, and distribution would be a have been subject to GAPs verification signatory handler denied the use of the key factor in ensuring compliance. audits. Proponents further stated that official certification mark as a result of Witnesses stated that traceability would the GAPs audits should reflect FDA failing an audit should be allowed to also provide for increased information production and harvest guidelines, petition for reconsideration of the about the source and movement of referred to in proposed § 970.11, and results. Proponents proposed that such produce within the leafy green vegetable should meet audit metrics provided for person could request an administrative industry in the event that a under proposed § 970.67. review if it is believed that a material contamination incident was to occur. Proponents also stated that all fact of the original verification audit was Provisions relating to traceability are signatory handlers to the proposed misinterpreted. Administrative reviews provided for under § 970.68. program should be subject to GHPs or would be conducted in accordance with According to the hearing record, an GMPs verification audits, whichever is the USDA audit verification procedures official mark should be developed for applicable. Such audits would verify for any audit program in effect. the purposes of identifying compliant that signatory handlers operate under The record evidence also supports participants in the proposed program. auditable conditions that meet general that a financially interested person The proposed mark would be used on FDA guidelines referred to in § 970.11 should have recourse if an auditing bills of lading, manifests or other like or FDA manufacturing regulations error is made. Witnesses also stated that documentation that is standard in pre- referred to in § 970.13, and should meet the person requesting the review should retail market transactions. In addition, audit metrics provided for under pay the cost of the review, and would the Board should have the authority to proposed § 970.67. be subsequently provided a copy of the recommend other uses of the official Proponents explained that audits review results. mark. Any other such uses would were necessary to ensure the integrity of This section is revised for clarity. require the approval of the Secretary. all leafy green vegetables handled under Audit Metrics Provisions for the development and the program. Proponents stated that usage of the official mark are provided quality assurance of leafy green According to the hearing record and for under § 970.69. vegetables begins in the field where the as defined in Material Issue 5(a), ‘‘audit The record also supports the produce is grown, but that the integrity metric’’ refers to an auditable standard establishment of provisions allowing for of that quality should be maintained or requirement used to verify that a any financially interested person to through all stages post-production production, handling or manufacturing request an administrative review if it is through delivery to market. By ensuring system intended to prevent, reduce or believed that the results of an audit are that leafy green vegetables are eliminate a microbiological hazard is in error. These proposed provisions are consistently subject to GAPs, GHPs and being effectively and accurately included in § 970.70. GMPs, proponents asserted that the followed. A collection of such standards Provision for the Secretary to modify, potential for microbial contamination of is referred to as ‘‘audit metrics’’ and suspend, or terminate regulations in those vegetables would be minimized. together establish the framework within effect under the proposed program These practices would support the which the process controls intended to should also be included in the proposed delivery of quality products to the ensure good agricultural, handling or agreement. This is provided for in marketplace. manufacturing practices can be verified § 970.71. According to the hearing record, as being met. proponents further stated that signatory One example of this is an audit metric Verification Audits handlers of the proposed program that provides that water used in a As explained in Material Issue 5(a), should not be allowed to import leafy production field to be verified as the term ‘‘verification audit’’ should be green vegetables produced or handled in meeting a quality standard. However, defined to mean an official audit foreign countries that have not been the way that an individual producer conducted by the Inspection Service to subject to GAPs, GHPs or GMPs may meet that standard would differ verify and document that good verification audits by the Inspection depending on whether the water was agricultural, handling, and Service or agencies approved to audit on sourced from municipal or private manufacturing practices are adhered to its behalf. Proponents stated that any wells, delivered via canal irrigation, throughout the growing, harvesting, foreign leafy green vegetables that are applied to the crop in a foliar or non- packing and transportation of leafy imported should be subject to foliar application, or was rain water. green vegetables. According to the comparable requirements that would be The applicable process control also record, a verification audit would in effect in the United States if this would differ. include a physical visit to the farm or proposed program were implemented. Each audit metric is a specific facility subject to audit while it is in According to the hearing record, all measure of GAPs, GHPs, or GMPs operation, to the extent practicable, and audits should be conducted by the compliance. To the extent that would represent a snapshot in time Inspection Service or any other such production, handling and

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manufacturing environments present limits, shall incorporate current university from within each zone; one different factors that need to be industry production, harvest and representative of the USDA Natural controlled during those processes, handling technologies, should be based Resources Conservation Service metrics may differ by zone or region. on scientific practices. appointed by the Secretary; one Moreover, according to the hearing Paragraph § 970.67(d) of the Notice of representative of the U.S. record, the auditable actions taken by a Hearing should be redesignated as a Environmental Protection Agency producer, handler, or manufacturer to new § 970.67(f). This paragraph states designated by that agency’s meet metric standards may also vary that audit metrics may be developed Administrator; and, two representatives due to differences in business size, or and recommended to accommodate of FDA appointed by that cultural growing and handling practices. differences in production, harvest, and administration’s Commissioner. According to the record, audit metrics handling environments of different Proponents stated that it was their should incorporate current industry regions. intent to provide an administrative production, harvest and handling A new § 970.67(h) should be added to structure and Technical Review technologies, and should be based on state that audit metrics may be Committee that would allow fresh leafy scientific practices. developed and recommended to green vegetable industry stakeholders to Section 970.67 of the proponents’ accommodate differences in production, proactively engage in the process of proposed language describes the harvest and handling environments of recommending audit metrics for development and implementation of imported leafy green vegetables and approval and implementation by USDA. audit metrics under the proposed their products. Proponents explained that their program. This language states that audit Paragraph § 970.67(e) of the Notice of proposal provided authority for metrics may be recommended by the Hearing should be redesignated as a additional subcommittees under both Board to USDA for approval after new § 970.67(g). This paragraph states the Board and the Technical Review consultation with the Technical Review that after consultation with the Committee to be established. Through Committee. The Technical Review Technical Review Committee, the Board these subcommittees, industry Committee, and any subcommittees may, at any time, recommend changes stakeholders could work cooperatively established thereunder, would provide to the audit metrics for approval by the to develop and recommend uniform, the Board with production and handling Secretary. auditable, science-based production and perspectives of the various regions, According to the hearing record, the handling audit metrics that also particular challenges of individual Board should be required to review incorporated any necessary specific regions, as well as scientific review and audit metrics periodically. Witnesses measures to accommodate differences in food safety expertise. explained that systematic reviews size of operation, geographic location, or The proponents’ proposal contained a needed to occur to ensure that audit other environmental challenges for a list of areas that may be addressed in metrics continually reflect the best given region. Also, recommendations establishing audit metrics for GAPs, industry practices, scientific would be addressed by the full Board, GHPs, and GMPs. They are included in information, and industry knowledge. would require Secretary approval, and paragraphs (a) and (b), and those This review should occur at least every would be subject to a public rulemaking paragraphs are revised for clarity. 3 years. This language was originally process. Hearing record evidence indicates included in the Notice of Hearing as During the hearing, several witnesses concern over the method by which § 970.67(f) and should be redesignated raised concerns over the proposed critical limits for process controls and as § 970.67(h). structure of the Technical Review quality factors would be identified and Committee. In particular, witnesses Technical Review Committee established under the proposed stated that producer interests, especially program. Witnesses stated that any According to the proponent proposal, those of small producers, diversified proposed critical limits should be the audit metrics development process farm operations, and organic farms, science-based, should reflect the broad would require consultative sessions were not given adequate representation. spectrum of industry practices across with a subcommittee, the Technical Moreover, witnesses stated that the the country, and should reflect or Review Committee. TRC membership Technical Review Committee, as coordinate with FDA and other existing would include industry representation, proposed by the proponents, did not Federal or State regulation. food safety professionals, members of provide adequate involvement of local, Portions of § 970.67(c) of the Notice of the scientific community, and State, and other Federal government Hearing should be divided for clarity representatives from selected interests in the development of metrics. and redesignated as § 970.67(c), (d), and government agencies. Proponents stated These witnesses explained that any (e). Paragraph (c) should state that that the proposed TRC and its members metrics established under the proposed critical limits for process controls for would ensure that current industry program could impact existing each quality factor identified in GAPs, practices as well as current scientific regulation or areas of shared jurisdiction GHPs or GMPs audit metrics may be research and technology were integrated by those entities. recommended by the Board, after into any proposed metrics. This Areas of particular stakeholder consultation with the Technical Review subcommittee was originally identified concern noted during the hearing Committee, for approval of the as the Technical Review Board in the include: Water quality and usage, Secretary, or may be developed by Notice of Hearing, and is being renamed conservation practices, wildlife and USDA. the Technical Review Committee. habitat management, and natural Paragraph (d) should state that USDA According to the proponents’ resource management. Regulatory may consult with appropriate proposal, the Technical Review jurisdiction over some of these topics is government entities and consider Committee would have 14 members shared by multiple Federal, State, and recommendations made by the Board appointed by the Board. The 14 local government bodies. Witnesses after Board consultation with the members would include: One concerned over the audit metric Technical Review Committee. representative from each of the five development process argued the need to Paragraph (e) should state that Board originally proposed zones; one food include input and information from recommendations, including critical safety representative from a land grant representatives of these regulatory

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bodies to mitigate the potential for Resources Conservation Service. The environments that produce, handle, or conflicting requirements being placed Technical Review Committee would manufacture leafy green vegetables. on producers or handlers. therefore consist of 25 members. This Subcommittees may consist of Lastly, witnesses who voiced proposed language is presented in producers, handlers, and other concerns over the initial proposal’s five § 970.46. interested parties as deemed appropriate geographic zones also voiced concerns Additionally, the Secretary would by the TRC. over the Board’s ability to appoint have authority to appoint such USDA USDA recommends that § 970.45 of members of the Technical Review representation on the Committee as the Notice of Hearing be revised as Committee. Opponents stated that deemed appropriate. Record evidence previously discussed and redesignated without more appropriate stakeholder indicates that this may include as § 970.46. representation on the Board, the representatives of the National Organic Traceability placement of members on the Technical Program, Agricultural Research Service, Review Committee would not be and National Institute of Food and According to proponents of the reflective of the industry’s diversity. Agriculture. proposed program, the ability to trace a On the last day of the hearing, Further, USDA may consult with product during production, processing, proponents submitted a modified other Federal agencies, as appropriate, and distribution would be a key factor Technical Review Committee structure. whose interests may be affected by audit in increasing information and Proponents presenting modified metrics identified in §§ 970.66 and communication within the market, as language explained that the revised 970.67, and may allow for well as ensuring compliance. language attempted to address opposing representatives of those agencies to In the case of a contamination event, witness’ concerns. The revised language participate in the work of the Technical timely communication about the scope outlined a new Technical Review Review Committee. Agencies identified of the contamination is essential to Committee that would consist of 21 as potentially having a collaborative addressing consumer concerns and members to include: One handler and interest include, but are not limited to: reducing the economic impact of the one producer representative from each United States Environmental Protection event on the industry and removing of the initial zones elected by the Board Agency, FDA Center for Food Safety and contaminated product from the market. members of that zone; one producer Applied Nutrition, and Department of For this reason, proponents representative considered a small Interior Fish and Wildlife Service. recommended including authority to business entity under the SBA The proponent proposal did not implement traceability requirements guidelines and one organic producer include specific nomination procedures under the proposed program. These elected by all Board members; one for TRC members. However, record requirements would allow for a more produce safety expert from a land grant evidence supports a process that would efficient recall of contaminated product university within each of the initial allow for broad industry participation in if a contamination event were to occur. zones elected by the producer and Committee nominations. Accordingly, Proponents explained that handler members from the TRC nomination procedures are being information required under a corresponding zone; one representative added that are similar to those for Board traceability system would allow for a of the USDA Natural Resources members. more rapid and accurate identification Conservation Service appointed by the For the purposes of establishing the of both the source location of the Secretary; one representative of the initial TRC, nominations would be contamination, and the distribution of United States Environmental Protection conducted by the Secretary by means of product coming from that source. Agency designated by that agency’s meetings of producer and signatory Signatory handlers would need to have Administrator; and, two representatives handler representatives, by mail, or by in place systems and procedures that of FDA appointed by that any other form of electronically will allow them to track their products. administration’s Commissioner. verifiable communication (such as fax, Official Certification Mark Proponents explained that their videoconference, conference call). The proposed modifications would improve Secretary would then select and appoint According to the hearing record, an producer representation on the TRC. the members from such nominations. official mark or trademark should be Moreover, the addition of seats Subsequent to the nomination of the developed for the purposes of designated for small businesses and initial members, all successor members identifying compliant participants in organic operations would ensure that would be nominated by producers and the proposed program. Evidence these stakeholder interests were signatory handlers. In addition, the presented during the hearing also represented in the audit metric Board could recommend nominees to supports that any such mark should be development process. USDA. The Board would forward the developed through the use of funds The alternative Technical Review entire list of nominees received to collected under proposed § 970.56 and Committee structure would improve the USDA for final selection and according to the provisions of proposed representation of stakeholder interests, appointment by the Secretary. § 970.55. The mark would be the but needs to be revised to reflect the Authority should be added for the property of the United States modified zone definitions. Board to recommend modifications to Government as represented by the Board Each of the eight zones, as the membership of the TRC. Any such and would be used for the benefit of the recommended in § 970.37, would have recommendations by the Board would Board, its signatories and their affiliated one signatory handler, one producer, require approval of the Secretary. This producers. and one food safety expert. One of the authority would provide flexibility to Proponents explained that the eight producer seats would have to be recommend adjustments or changes to proposed mark would be used on bills filled by a producer meeting the SBA the structure of the TRC over time. of lading, manifests and other like definition of small agricultural Finally, the TRC should have the documentation that is standard in pre- producer, and one must be filled by a authority to appoint subcommittees as retail market transactions. Proponents certified organic producer. In addition, necessary to facilitate the development indicated that use of the mark would the Secretary would appoint one of audit metrics specific to regions, or lead to buyer confidence in producer, representative from the USDA Natural production, handling, or manufacturing handler, and manufacturer transactions

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because it would indicate that the established under the program. This The record evidence is that GHP and product being sold met program provision appears in § 970.71. GMP audits conducted on second standards. Proponents also stated that signatory handlers should not be paid Material Issue Number 5(d) Expenses, use of the mark would facilitate for by the Board. This is because those Assessments, Accounting and traceability. handlers would not be required to pay Contributions Proponents stated that their intention assessments on the leafy green was to not use the official certification The Board should be authorized to vegetables that they handle or mark on retail or consumer packaging. incur reasonable and necessary manufacture. While some proponents suggested that expenses and to collect assessments to Minor clarifying changes have been the mark could be used in literature or fund such expenses. Further, the made to § 970.55. informational campaigns designed to proposed agreement should provide for Assessments inform participants of the fresh produce handling of excess assessments industry about the scope and mission of collected and should authorize the The proponents testified that funds to the proposed program, proponent Board to accept voluntary contributions. cover the Board’s administrative expenses should be obtained through testimony did not anticipate the use of Expenses the mark at the consumer level for the collection of assessments from marketing purposes. The record evidence supports that the signatory first handlers who handle Many witnesses who were opposed to Board should be authorized, under leafy green vegetables in the production the proposed program were also § 970.55 of the proposed agreement, to area. These assessments would reflect opposed to the development of the mark incur such expense as the Secretary each signatory first handler’s and stated that the proponents’ finds are reasonable and likely to be proportional share of the volume of proposed language did not clearly incurred during each crop year. leafy green vegetables subject to prohibit the use of such mark on Necessary expenses for the maintenance regulation under the proposed consumer packaging. These witnesses and functioning of the Board would agreement. As such, assessments would stated that if the mark were used on generally include, but would not be be based on the total amount of leafy consumer packaging, its use would lead limited to, administrative expenses such green vegetables handled by each to an unfair marketing advantage for as employee salaries and benefits; signatory first handler. participants of the program over those establishment of an office and According to the hearing record, prior opting not to participate. equipping that office; telephone and to the beginning of each crop year and The proposed agreement should mail services; and business and travel- as necessary thereafter, the Board provide authority for the Board to related expenses for the Board staff. As should prepare and recommend to recommend, subject to approval of the discussed previously, expenses incurred USDA an estimated budget of expenses Secretary, alternative uses of the official by Board members and alternate including a rate of assessment certification mark is important to members, committee members, and calculated to adequately cover the cost ensuring flexibility of the proposed subcommittee members in attending of such projected expenditures. provisions and their application under meetings or performing other official Proponents stated that any such the proposed program. However, based duties should also be reimbursable assessment rate could include a on record evidence, the use of the mark expenses. According to the hearing supplemental assessment rate if it was on consumer packages would be record, the proposed agreement should determined beneficial to the prohibited. The authority to recommend also authorize the Board to incur administration of the program. A alternative uses would allow the Board expenses related to research, supplemental assessment rate could be to address unanticipated circumstances development, and education activities used to address a specific problem. An that may present themselves in the pursuant to § 970.75. The types of example would be the need to fund a future. activities that could be funded under research project that only affects Lastly, hearing record evidence this authority are discussed under cabbage. In this example, the Board demonstrates that a signatory handler’s Material Issue 5(h). could assess a supplemental assessment compliance with the proposed program According to the hearing record, the rate on cabbage, which would be in would be a condition precedent and Board should also pay for GAP audit addition to the regular administrative subsequent to the signatory handler’s fees for verification audits conducted on assessment rate. Funds derived from use of the mark. As discussed under producers delivering to signatory these supplemental assessment rates Material Issue 5(f), use of the mark handlers as well as GHP audit fees for would then be specifically earmarked to would also be subject to verification, those signatory handlers. Having pay for the cabbage research project in suspension and revocation provisions of uniform assessments pay for such audit this example. the proposed program. costs should alleviate concerns raised Testimony indicates that the In summary, the record supports about the relative costs of audits for preparation of a budget prior to the authority for the development of a operations of varying size and in beginning of each crop year would registered certification mark. The different locations. Having the Board provide a basis for the Board’s proposed regulatory text published in pay audit fees could also result in more assessment rate formulation. Once the Notice of Hearing under § 970.69 is efficiencies for the program. approved at the Board level, the annual revised to reflect the change discussed The record evidence is that the Board budget and assessment rate above and for clarification. would pay for direct audit costs. Any recommendations would be submitted additional costs related to inspection to USDA for review and approval. Modification, Suspension and service travel would be borne by the As supported by the record, the Termination signatory first handler. Specifics as to proposed agreement contains a The Secretary may modify, suspend, which costs would be paid out of maximum assessment rate limit of $0.05 or terminate regulations in effect under assessment funds could be included in per 24-pound carton of leafy green the proposed program based on Board any memorandum of understanding vegetables or equivalent (including any recommendations or otherwise. This between the Board and the Inspection supplemental assessment rate). would allow changes in any regulations Service. According to the hearing record, lettuce

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has traditionally been shipped in Excess Funds proposed agreement should provide that 24-pound cartons and is widely The proponents proposed procedures all reports and other information considered a standard of measurement for accounting of excess funds in submitted by signatory handlers remain for the leafy green vegetable industry. § 970.57 of the proposed agreement. in the custody of employees or For leafy green vegetables not typically They indicated that such procedures authorized agents of the Board at all shipped in 24-pound cartons, the Board would be necessary to assure signatory times. Finally, the proposed agreement would recommend appropriate formulas handlers and the industry that there should authorize agents or employees of to calculate equivalent units of would be proper disposition of excess USDA and the Board to access the measurement for assessment purposes. funds, and that a detailed accounting premises of signatory handlers during The intent of the maximum limit on would be made of such disposition. reasonable business hours to verify the assessment rate is to assure This section would allow the Board, compliance with the proposed signatory handlers that program with the approval of the Secretary, to agreement. expenses would be kept within establish an operating monetary reserve. Reports and Recordkeeping specified limits. Proponents stated that This would permit the Board to carry The record indicates that the Board the maximum limit is based on over to subsequent crop years any should have the authority, with the experience with the State marketing excess funds in a reserve, if funds approval of the Secretary, to require agreement programs in California and already in the reserve do not exceed under § 970.80(a) that signatory Arizona. They testified that the initial approximately two years’ expenses. If handlers submit to the Board such California assessment level was two reserve funds exceed that amount, the reports and information as the Board cents per 24-count carton equivalent, assessment rate should be reduced to may need to perform its functions and and it was lowered to a penny and a half bring the reserve to a more reasonable fulfill its responsibilities under the per carton equivalent after the second level. These reserve funds could be used proposed agreement. The Board would year. Given this experience, the to defray expenses during any crop year require reports and information for such proponents anticipate that the actual before assessment income is sufficient to cover such expenses; to cover deficits purposes as collecting assessments; cost of the proposed agreement, if analyzing leafy green vegetable markets implemented, would be covered by an incurred during any crop year when assessment income is less than and marketing trends with the objective assessment rate below the proposed of preparing and evaluating research maximum limit. expenses; to fulfill any obligations under § 970.75; and, to cover necessary and development projects; developing Should a signatory first handler fail to expenses of liquidation in the event of and recommending rules and timely pay assessments, record evidence termination of the program. regulations; and determining whether indicates that such handler should be In lieu of depositing excess funds in signatory handlers are complying with required to pay the Board, in addition a monetary reserve, the proponents the requirements of the proposed to the overdue assessments, an interest proposed that § 970.57 would also agreement. or late payment charge, or both, on any provide the Board with the necessary Hearing testimony includes witness outstanding balance. The time period in authority to credit each handler’s statements that reports potentially which assessments should be paid to account, or to refund each handler required under the proposed agreement the Board, the rate of interest, and any directly, with a proportionate share of could include production, inventory, late payment charge would be any excess assessment funds at the end and sales data; customer and supplier recommended by the Board and of each crop year. lists; and testing and audit reports. This approved by the Secretary through the Clarifying changes have been made to should not be construed as a complete public rulemaking process. § 970.57. list of information the Board might According to hearing record evidence, require, nor all of the information Voluntary Contributions late payment charges and interest on necessary for the proper conduct of unpaid balances are reasonable to The proponents testified that in Board operations under the proposed encourage timely payment of addition to assessment and other agreement. Therefore, the Board should assessments and to compensate the income, such as interest, the Board have the authority, with the approval of Board for expenses incurred in should be able to receive voluntary the Secretary, to require each signatory collecting unpaid assessments. contributions for the conduct of handler to furnish such information as Witnesses stated that timely collection research, development, and education it finds necessary to perform its duties of assessments would be important in activities authorized under § 970.75 of under the proposed agreement. order to efficiently and effectively the proposed agreement. Testimony Under § 970.80(b), proponents administer the provisions of this supported having such contributions testified that signatory handlers should proposed agreement. free from any encumbrances by the be required to maintain records of all donor, and that the Board should retain receipts and acquisitions of leafy green The proponents testified that the complete control of the use of such vegetables as may be necessary to verify Board may accept, but not require, funds. This authority appears in the reports that are submitted to the advance payments of assessments, § 970.58. Board. This would also include all which would be credited toward documentation relating to audit reports. assessments levied against that Material Issue Number 5(e)—Reporting All records would be maintained for at signatory first handler for the crop year. and Recordkeeping least two years after the end of the crop In addition, the Board would be The proposed agreement should year of their applicability. The records authorized to borrow money to cover provide that signatory handlers maintained should be sufficient to operating expenses when assessment periodically submit reports and other document and substantiate each and reserve funds are not sufficient. information to the Board and to signatory handler’s compliance with the Revisions have been made to § 970.56 maintain records regarding the handling proposed agreement. Witnesses testified and paragraph (c) of that section has of leafy green vegetables. Further, to that these records may be needed to been deleted as unnecessary. ensure compliance with the Act, the assist in compliance investigations.

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Paragraphs (a) and (b) of § 970.80 are Board, as well as the Secretary, should effective and to help ensure that it is revised for clarification, and paragraph have reasonable access to any signatory administered fairly to all participants. (c) is deleted as it is not necessary. handler’s premises during regular Under § 970.83, proponents testified business hours (those hours when the that compliance of the proposed Confidential Information signatory is actually engaged in agreement would be overseen by the As required by the Act and supported growing, harvesting, packing, or Board and USDA. The Board would through testimony provided by transporting leafy green vegetables). The establish a policy in the form of a witnesses at the hearing, § 970.81 would record verification should be conducted compliance program under which non- require that all reports and information through a visit to the signatory handler’s compliance actions would be identified submitted by signatory handlers be facility, where documentation would be either by the Inspection Service or by received by, and at all times be in the reviewed and personnel interviewed to Board compliance staff. Non- custody of, employees or authorized ascertain compliance with this part. compliance actions may be identified agents of the Board. Information In regards to the general issue of during scheduled or unscheduled submitted by signatory handlers reporting and recordkeeping, evidence audits, visits to a farm or facility, or affecting the trade position, financial indicates that handlers of leafy green from anonymous complaints. condition, or business operation of such vegetables and products already collect Proponents and other witnesses handlers could not be disclosed by the and maintain much of the information supported the proposal that any employees of the Board, or by any proposed for submission to the Board signatory handler not in compliance agents authorized by the Board, to any under the proposed agreement with the proposed agreement could be person or entity other than the provisions. Furthermore, hearing subject to withdrawal of audit services, Secretary. Witnesses testified that testimony suggests that the proposed could lose the privilege of the use of the reports and information that contain agreement would be beneficial to the official certification mark, or be subject proprietary market and business industry by helping to standardize how to misbranding or trademark violations, information could affect the trade information is collected, maintained, depending on the level of non- position, financial condition, or and disseminated. An additional benefit compliance. It was further proposed by business operation of the affected to the reporting and recordkeeping proponents under § 970.83(c) that signatory handler, and that requirements of the proposed agreement failure to comply with the provisions of confidentiality would be necessary to would be enhanced traceability and this proposed agreement may also result protect the businesses submitting the identification of product due to the in additional remedies or penalties. information. The Board would also According to the hearing record, more consistent and generally available confidentially hold any data or signatory handlers would be obligated nature of the digitized information information obtained or extracted from to adhere to program requirements. likely required by handlers. reports or information submitted by Such requirements would include such signatory handlers. The proponents also Although some small and organic things as acquiring only leafy green stated that, although information from producers and handlers currently not vegetables that have been grown in reports and information may be associated with any food quality accordance with GAPs; receiving combined and made available in the verification program expressed concerns successful audits verifying that GHPs form of general reports, the identities of about the additional personnel and cost and GMPs (if applicable) are being the individuals furnishing the possibly required for adherence to the adhered to; filing reports and information should not be disclosed. proposed reporting and recordkeeping maintaining records; and paying Combined information in general requirements, others currently assessments. Failure to comply with reports could be helpful to the Board associated with a food quality these requirements could result in and to the leafy green vegetable verification program of some kind action against the signatory handlers. industry. testified that good recordkeeping has The record shows that the intent of Minor revisions have been made to helped adhere to the food quality the program would be to improve § 970.81 for clarification. verification program and been beneficial vegetable quality by reducing the risk of to overall farm operation. These contamination. As such, the focus Verification of Reports witnesses also expressed the belief that would be to establish and maintain best In § 970.82, the proponents proposed the reporting requirements herein practices. If a signatory handler were procedures for verifying that reports proposed would not constitute an found to be out of compliance with the filed by signatory handlers are in undue burden on leafy green vegetable audit metrics established under the compliance with the requirements of the businesses. program, the first step would be to proposed agreement. For this purpose, Section 970.82 is modified slightly for require that handler to take appropriate the hearing record indicates that clarification. corrective action to address and correct any non-conformities. authorized agents or employees of the Material Issue Number 5(f)— According to record evidence, non- Board, and the Secretary, should have Compliance access to the premises of all signatory compliance by signatory handlers handlers during reasonable business The proposed agreement should would be identified and classified at hours. In addition to having access to a provide the Board and USDA with the various levels from minor to flagrant signatory handler’s premises to verify authority to withdraw audit services, violations of the proposed agreement. that all reports have been submitted withdraw the use of the official Other than in cases of immediate threat accurately, the proponents indicated certification mark, or seek remedies or to public health, any signatory handler that authorized agents or employees of penalties should signatory handlers be found in violation of the proposed the Board, and the Secretary, should in non-compliance with the proposed agreement would be allowed to address also have access to check GAPs audit agreement. In addition, the proposed and correct any actions that led to non- verification records for compliance with agreement should provide that any compliance of the proposed agreement. the proposed agreement. immediate threat to public health be If a signatory handler were to fail to take Record evidence indicates that reported to appropriate health officials. appropriate verifiable corrective, the authorized agents or employees of the This is necessary for the program to be signatory handler could be subject to

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withdrawal of audit services or lose the including market research, development Witnesses supporting the authority for use of the official certification mark. projects, and to develop and implement educational and outreach programs According to the hearing record, the educational and outreach programs stated the programs should be designed status of a signatory handler’s intended to facilitate the adoption, to assist small businesses comply with compliance would be public implementation, and administration of the proposed agreement. They asserted information and may be posted on a the agreement. In addition, the proposed these programs could be effective tools Web site. agreement should establish a Research for providing training to entities, The Notice of Hearing also contained and Development Committee to assist particularly small entities, about the a provision in § 970.83(b) that any the Board in carrying out the proposed agreement, its audit metrics detection of an S threat to public health aforementioned programs. and other requirements. Such programs, should be reported to FDA. Record the witnesses asserted, also could be Research, Development, Education and evidence supports notification of any used to increase awareness of the Outreach appropriate health officials, not just proposed agreement within the leafy FDA. Proponent witnesses testified that the green vegetable industry supply chain. Section 970.83 of the proposed proposed agreement should provide the Witnesses supporting inclusion of a agreement is revised for clarification Board authority to establish marketing training component explained that and to remove unnecessary language. research and development projects, and training should be made available to or promotional activities, including paid producers, handlers, and persons Material Issue Number 5(g)— advertising, to assist or promote the conducting verification audits under the Exemptions efficient adoption, implementation, and proposed agreement. According to these USDA recommends that the Board marketplace acceptance of the witnesses, training for producers and should have the authority to exempt agreement and leafy green vegetables. handlers would assist in program small quantities of leafy green As proposed by proponents, such compliance and ensure a clear vegetables from any or all program projects and activities would require understanding of the proposed requirements. approval by the Secretary, and would be agreement and its requirements. Section § 970.72, ‘‘Exemptions,’’ of the funded by collected assessments and Witnesses advocating training for Notice of Hearing stated in part: ‘‘The voluntary contributions as specified in auditors stated that such would provide [Board], with the approval of the proposed §§ 970.56 and 970.58, consistency and accuracy in audit Secretary, may establish such rules, respectively. verifications. regulations, and safeguards that exempt Proponent witnesses testified that the Additionally, in implementing from any and all requirements pursuant authority for market research was educational and outreach programs to this part, such quantities of leafy necessary to better understand and under the proposed agreement, green vegetables or products as do not communicate with key leafy green witnesses advocated cooperation with interfere with the objective of this part.’’ vegetable industry audiences—such as existing state, local, and Federal While the proponents’ proposal buyers. The authority for the conduct of agencies, universities, or other would have permitted the Board to market research and development organizations already successfully exempt a given quantity of leafy green projects generally was supported by operating such programs within their vegetables from the requirements of the witnesses. However, some witnesses regions or communities. agreement, during the hearing sessions, suggested the types of research specified Based on the record evidence, the both proponents and the opponents of under the proposed agreement should proposed agreement should authorize this agreement opposed that any be expanded beyond market research. the Board to conduct research quantity of leafy green vegetables Specifically, these witnesses stated the (including market research), should become exempt from the proposed agreement should authorize development projects, and education agreement. Witnesses’ rationale for this food safety research such as best and outreach programs. The proposed opposition was that any quantity of practices in production, handling, and programs would help to expand exempt leafy green vegetables, be it from manufacturing of leafy green vegetables, knowledge about the leafy green a small, organic, or large farm, may contamination risk management vegetable industry, the proposed jeopardize the ultimate goal of this including reducing the risk of cross- agreement, its audit metrics, and program which is to make the contamination in the food supply chain, requirements. The programs also would production and handling of leafy green and identification of measures to reduce assist in increasing awareness on the vegetables safer. microbial contamination. While proposed agreement among leafy green While the objectives of the program proponents supported research vegetable stakeholders. Lastly, the should not be compromised, the associated with quality in areas such as programs should allow the proposed agreement should authorize an production, handling, and agreement to become more accessible to exemption if an unforeseen manufacturing practices for leafy green small entities, organic, diversified, and circumstance arises which would make vegetables, they did not support the use unconventional operations within the such an exemption reasonable. of collected funds for generic research leafy green vegetable industry. Furthermore, the Board should have on risks associated with leafy green Record evidence establishes that the authority to recommend rules and vegetables. proposed agreement should authorize regulations to ensure that such leafy Several witnesses who expressed the Board to provide for the conduct of green vegetables are handled and used concern about the potential impact market research and development only as authorized under the agreement. audit metrics could have on small projects as proposed by proponents. Clarifying changes are made to business entities suggested the proposed These projects would allow the Board to § 970.72. agreement should provide authority to compile information related to the leafy the Board to develop and implement green vegetable industry to better Material Issue Number 5(h)—Research, educational and outreach programs. understand the industry, facilitate Development, and Education This recommendation was supported by communications with industry The proposed agreement should the proponents of the proposed stakeholders, and evaluate the proposed authorize the Board to conduct research, agreement. agreement. This authority also would

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help ensure the proposed agreement is the expenses for the activities described Based on record evidence, the functioning properly and meeting its above would be budgeted and paid from proposed agreement should not provide intended purpose. funds collected pursuant to §§ 970.56 for the conduct of promotion and The record evidence further and 970.58, both assessments and advertising activities. The record clearly establishes that authority to conduct contributions. demonstrates a lack of support for the research under the proposed agreement Based on the record evidence, all inclusion of such authority. should be expanded beyond market research, development projects, and As detailed above, § 970.75 ‘‘Research research. The record evidence supports education and outreach programs to be and Promotion’’, as proposed by authority for the conduct of research conducted under the proposed proponents, should be revised and projects designed to assist or improve agreement in a given fiscal period included in the proposed agreement as the development of audit metrics related should be required to be submitted by ‘‘Research, Development, and to the production, handling, and the Board to the Secretary for approval Education.’’ manufacturing of leafy green vegetables. prior to being undertaken. The amount Research and Development Committee The broader research authority would of funds to be spent on research, allow for the conduct of research that is development projects, and education The proponents proposed that a applicable to various production and outreach programs would be ‘‘Market Review Board’’ as specified in environments and practices, spanning included in the annual budget required § 970.46 of their proposal be established from conventional, to organic, to others. to be submitted to the Secretary for to advise the administrative body on The proposed authority also would review and approval. Additionally, the retail, foodservice, and consumer issues allow research concerning Board would be required to report to the to maximize consumer confidence contamination risk management as well Secretary at least annually on the through market acceptance and as other relevant areas. Record evidence progress of each project and at the recognition of the proposed agreement. supports providing broad research conclusion of each project. These are Proponent witnesses explained that the authority to ensure relevant areas common USDA program requirements Market Review Board would assist with related to leafy green vegetables could to ensure the effective conduct of promotion and acceptance of the be researched, if deemed necessary and authorized projects and the proper use proposed agreement throughout the appropriate. of collected funds. leafy green vegetable supply chain. Record evidence supports the As proposed by proponents, the inclusion of authority for the Promotion and Advertising Market Review Board would be development and implementation of Regarding the proponents’ proposed appointed by the administrative body educational and outreach programs authority for the conduct of promotion and would consist of a minimum of under the proposed agreement. Record and advertising activities, proponent nine members as follows: Two evidence indicates that these programs witnesses testified that the intended representatives of retail grocers, two would be critical to facilitate awareness target audience for outreach and representatives of foodservice and education of the proposed promotion of the proposed agreement operations, three consumers, and two agreement. was buyers and others within the leafy representatives from land grant As supported by record evidence, the green vegetable industry. Proponent universities with expertise in fresh proposed educational and outreach witnesses stated that they vegetable marketing, economics, or authority would allow the Board to fundamentally believed funds collected consumer acceptance. Under the develop tools that aid growers and under the proposed agreement should proponents’ proposal, the handlers, particularly small entities, not be used for consumer advertising or administrative body also would have comply with program requirements. other marketing campaigns designed to the authority to appoint additional According to record evidence, these promote food safety and or leafy green representatives from consumer, retail, tools could include templates to aid vegetables. and foodservice organizations. producers and handlers with Several witnesses—those in support Several witnesses expressed concerns recordkeeping requirements, and how-to of the proposed agreement and those over the potential role of the proposed guides to assist with complying with opposed to it—expressed concern Market Review Board relating to the audit metrics and implementing best regarding the authority to engage in promotion of the proposed agreement to practices. Additionally, record evidence promotion and advertising activities. maximize consumer acceptance through indicates that the proposed authority for These witnesses opposed any marketing market acceptance of the proposed educational and outreach programs efforts targeted to consumers. The agreement. These witnesses believed would allow for the development and witnesses further contended that such that marketplace acceptance of the implementation of training programs for marketing of the proposed agreement proposed agreement related to persons responsible for conducting would imply that leafy green vegetables promotion of the program to consumers. audit verifications to ensure consistency covered under the proposed agreement These witnesses were opposed to the and accuracy. As supported by the were safer than those that were not proposed marketing and promotion record, the proposed authority would covered under the agreement, thus authorities, including paid advertising, allow the Board to coordinate with creating a competitive advantage for that were outlined in § 970.75 ‘‘Research local, State, and Federal agencies, and entities associated with the proposed and Promotion’’ of the proponents’ other organizations in designing and agreement. proposal. implementing educational and outreach The testimony of a witness supported Based on the record evidence, the programs. the conduct of generic promotional proponents’ proposed Market Review Record evidence supports that the activities under the proposed Board should be removed from the educational and outreach programs agreement. However, testimony of the proposed agreement and, in its place, a should be funded by authorized receipts proponents indicated the proposed Research and Development Committee of the Board, including assessment agreement was not designed to use should be established. The name of the income, voluntary contributions, and collected assessments to fund the committee reflects the role and miscellaneous income such as interest. generic promotion of leafy green responsibilities of the committee as As provided in the proposed agreement, vegetables to consumers. described below.

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As supported by record evidence, the representatives of retailers, consumers, members of the Board, and the selection Research and Development Committee and foodservice companies. of an initial Board by the Secretary. The should be established for the purpose of As supported by record evidence, the specific time frame would be assisting the Board in the oversight and membership of the Research and established at the time the agreement management of research, development Development Committee could be becomes effective. projects, and education and outreach modified based on recommendations by Handlers who sign up during this activities under the proposed the Board and approval of the Secretary, initial sign-up period would be eligible agreement, as authorized under or as otherwise deemed appropriate by to serve as initial members of the Board. proposed § 970.75. The record evidence USDA. Additionally, the Research and Proponent witnesses explained that the also indicates that the membership Development Committee should be initial sign-up period should be for a structure proposed by proponents for allowed to appoint subcommittees as specified period of time so that handlers the Market Review Board should be necessary to assist it in carrying out its know in what time frame they may sign- adopted for the proposed Research and roles. Subcommittees could be up for this agreement to be eligible to Development Committee and modified comprised of producers, signatory serve on the initial Board. After this slightly for clarity. However, based on handlers, and other interested parties initial sign-up period, a handler may record evidence, the nomination and such as representatives of consumers, become a signatory to this agreement at selection process for this committee retailers, and foodservice organizations any time. should be expanded to ensure broader as deemed appropriate by the Research Section 970.97 has been changed to participation by interested parties as and Development Committee. The above add an initial sign-up phase and change detailed below. described proposed language should be the title of the section from ‘‘Additional Record evidence indicates that included in the proposed agreement as parties’’ to ‘‘Handler Sign-up’’. § 970.47 ‘‘Research and Development persons appointed to this committee Handler Withdrawal From the Committee’’, and should take the place should have expertise in certain areas to Agreement aid them in performing the committee’s and stead of the proponents’ proposed roles and responsibilities. As such, the Market Review Board. The agreement should also provide proposed agreement should specify that that signatory handlers may withdraw Material Issue Number 5(i)—Common from the program. Record evidence persons should have expertise in one of, Terms but not limited to, the following areas: supported a process wherein a signatory The provisions of proposed §§ 970.85 The production, handling, and handler could file a written notice of through 970.96 are common to marketing of leafy green vegetables; withdrawal with the Board during any marketing agreements and orders now small, diversified, or organic production crop year. The withdrawal would operating. All such provisions are practices; agricultural economics; or become effective at the beginning of the necessary to effectuate the other educational outreach in the specified or subsequent crop year. The signatory provisions of the marketing agreement related areas. handler would remain responsible for and to effectuate the declared policy of any obligations (including payment of The expanded nomination and the Act. The record evidence supports assessments) incurred during the period selection process would address inclusion of each provision. These that handler was a signatory handler. concerns raised by witnesses regarding provisions are identified by the section In addition, a signatory handler could the selection of members to this number and heading as follows: receive immediately withdrawal from Committee. Witnesses expressed § 970.85 Effective time; § 970.86 Rights the program if they cease to be a handler concerns that the proponents’ proposal of Secretary; § 970.87 Personal liability; of leafy green vegetables and give notice limited the persons that could be § 970.88 Separability; § 970.89 to the Board in writing. Again the identified and, thus, selected to be Derogation; § 970.90 Duration of signatory handler would be responsible members of this Committee. The immunities; § 970.91 Agents; § 970.92 for any obligations incurred during the broader process offered in this Suspension or termination; § 970.93 period of participation in the program. recommended decision would allow for Proceedings upon termination; § 970.94 Section 970.98 has been revised for more participation from interested Effect of termination or amendment; clarity, including the addition of persons in the nomination process, and § 970.95 Amendments and § 970.96 language to state that upon withdrawing would provide that selections be made Counterparts. Minor changes to these from the agreement, the withdrawing by the Secretary. sections are made for clarification. party would no longer be permitted to Record evidence supports that use any official certification mark nominations for the Research and Material Issue Number 6—Handler developed under the agreement. Development Committee should be Sign-up and Withdrawal received from producers and signatory Based on a review of the hearing Small Business Consideration handlers at meetings, by mail, or by any record, the proposed agreement should Pursuant to the requirements set forth form of electronically verifiable provide for two handler sign-up phases in the Regulatory Flexibility Act communication. In addition, the Board to facilitate initial implementation of (5 U.S.C. 601–612) (RFA), AMS has also would be allowed to recommend the program, including the nomination considered the economic impact of this nominees to the Secretary. The and selection of the initial Board. Also, action on small entities. Accordingly, Secretary would select and appoint the the agreement should provide for AMS has prepared this initial regulatory members from such nominations or handler withdrawal from the agreement. flexibility analysis. from other qualified persons. Record The purpose of the RFA is to fit evidence also supports providing Handler Sign-Up regulatory actions to the scale of authority for the appointment of A two-phase approach to the handler business subject to such actions so that additional members to this Committee sign-up process would be used. An small businesses will not be unduly or by the Secretary. This provision is initial phase of at least 60 days would disproportionately burdened. Small consistent with the proponents’ be established. This would allow for the agricultural service firms, which proposal, which would have allowed for nomination of producer and signatory include handlers that would be eligible the appointment of additional handler members and alternate to be signatories under the proposed

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agreement, have been defined by the programs which are designed to food contamination outbreaks in terms Small Business Administration (SBA) minimize the potential of contamination of lost sales. A measure of the benefit of (13 CFR 121.201) as those having annual from leafy green vegetables produced the proposed program is the avoidance receipts of less than $7,000,000. within the respective States. of lost sales. According to data published in the Blue An economist with a science-based An economist on the faculty at Book, there are over 2,200 handlers, consulting firm (Intertox) testified as a Arizona State University testifying as a which include approximately 300 proponent witness. This witness proponent witness stated that, based on importers and over 100 fresh cut presented evidence that a majority of his research, the cost of a food processors, of leafy green vegetables in the volume of leafy green vegetables contamination outbreak is high and the U.S. As noted earlier, there may be production is currently being produced borne by all producers in that industry. additional small handler businesses, under the California or Arizona State He estimated that a food contamination specifically producers who are engaged marketing agreements. In California, outbreak event could lead to a 10 in handling, not included in this total. which accounts for 75 percent of U.S. percent long-term reduction in demand While the hearing record does not leafy green vegetables production, 99 for leafy green vegetables. In addition, contain data to estimate average annual percent of this production is covered the witness stated that without sales for handlers, the majority of under the LGMA. Arizona represents 15 intervention, such as a national handlers who testified at the hearing percent of U.S. production; 90 percent agreement, the leafy green vegetable indicated they had annual sales of leafy of that volume is covered by the Arizona industry could face a major food green vegetables in excess of the SBA agreement. For those producers and contamination incident, on average, definition for a small agricultural handlers, implementation of a national every 10 years, leading to significant service firm. marketing agreement would not likely financial losses. The hearing record indicates that, cause significant additional costs. Record testimony indicates that according to the latest Census of If adopted, the proposed agreement producers and handlers can derive some Agriculture, 8,216 farms harvested leafy would authorize the development and benefit from their investments to green vegetables from 433,023 acres for implementation of audit metrics that are minimize food contamination but the the fresh market in 2007. Statistics for consistent with FDA GAPs and GMPs, value of that investment is diminished the leafy green industry presented at the and current USDA GHPs. While the if others do not similarly invest. The hearing show that the total value for proposed program would be voluntary, record further indicates that a collective leafy green vegetable crops was handlers who choose to become action program with government approximately $2.5 billion in 2008. signatories would be required to oversight, such as a marketing Small agricultural producers have comply. Many of the farms that produce agreement, can be used to intervene in been defined by the SBA as those with leafy green vegetables would be subject a market system if the market is not annual receipts of less than $750,000. to certain requirements under the producing enough of a public good; in Based on the information presented at proposed marketing agreement if they this case investment to minimize food the hearing, 89 percent of farms opt to sell to signatory handlers. contamination outbreaks. producing leafy green vegetables in the Evidence provided at the hearing In the absence of collective action, United States would be considered indicates that large farms almost always individual producers may not have small businesses as defined by the SBA. sell to handlers under seasonal contracts sufficient incentive to invest in food In addition to handlers and and that these relationships are usually quality verification programs since it is producers, other persons including long-term. These large farms produce not a tangible food characteristic for retailers, food service representatives, most of the volume of leafy green their buyers or final consumers. The food safety experts, and other members vegetables in the U.S., and are quite witness noted that producers who do of the public could nominate or serve on likely to supply handlers who would be not invest, or who under-invest, in such the boards or committees as appropriate. signatories under the proposed quality or best practices programs create The reporting burden on such persons is agreement. a ‘‘free rider’’ problem, since they do not discussed in the Paperwork Reduction A key economic issue to examine in pay their fair share of the production Act section that follows. considering the proposed agreement is cost for what consumers expect to buy— In 2007, 69 percent of leafy green the benefits and costs to signatory a fresh leafy green product that is not vegetable farms had annual gross sales handlers, and to producers supplying contaminated. under $100,000, 12 percent had annual such handlers. Additional evidence about sales and gross sales between $100,000 and price impacts to producers and handlers $299,000, 8 percent had annual gross Benefits of the Proposed Program from the 2006 spinach outbreak was sales between $300,000 and $749,000, The record evidence from handlers presented by a witness from California with the remaining 11 percent of farms and producers who handle and produce State University-Fresno. The witness producing leafy green vegetables in the a vast majority of the volume of leafy stated that although the contaminated United States having annual gross sales green vegetables in the U.S. is that spinach was grown in California, over $750,000. although the proposed program would producer sales throughout the nation Since the spinach outbreak in 2006, impose some additional costs on were affected. Even after the source was large and small leafy green vegetable signatory handlers and the growers who isolated and consumers were assured producers and handlers in all parts of sell to them, those costs would be that eating fresh spinach was again safe, the country have had to become more outweighed by the benefits expected to sales lagged for a significant period of knowledgeable about produce accrue to the U.S. leafy green vegetable time and the commodity may have contamination. This has led many of industry. experienced long term loss of goodwill. them to initiate or increase good A primary benefit of the proposed Due to reduced shipments and lower agricultural, handling and agreement is the reduced likelihood of prices from August through December manufacturing practices and programs. food contamination outbreaks in leafy 2006, the farm level loss in U.S. spinach Other initiatives include the green vegetables and products handled sales was estimated at $12 million; the implementation of the California and in the United States. Two witnesses estimated loss at the retail level was $63 Arizona State marketing agreement presented estimates of the impacts of million.

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The record testimony indicates that program that standardizes GAPs, GHPs, ‘‘best’’ practices. The most immediate the benefits to a producer of and GMPs throughout the industry. The and significant changes for producers, implementing a best practices or food leafy green vegetable industry also may especially small ones, would be the safety plan can include higher prices benefit from the proposed agreement’s increased expenses of supplying received by producers, maintaining and ability to make timely adjustments to signatory handlers. While some growing sales, reducing liability costs GAP and GHP audit metrics, as producers may currently be applying and improving operational efficiency. appropriate, through the mechanisms of and implementing GAPs, many The witness also noted that the benefits the agreement. producers would have to make physical tend to accrue over time and are The record evidence shows that the modifications in their operations, add to uncertain. proposed agreement would likely result their current recordkeeping The proposed program has the in some cost increases for producers and requirements, and increase their potential to increase the number of handlers, especially in the short run administrative oversight over certain producers, including small producers, (both start-up costs and ongoing annual aspects of their farming enterprise. following standard GAPs. This could costs), but in the long run there could Record evidence supports a program result in handlers buying leafy green be some cost decreases from where the costs resulting from vegetables from more small producers. streamlining of differing buyer participation are proportional to the size The proposed agreement also has the standards and being subject to fewer of businesses involved and do not potential to reduce the redundancy of audits. unduly or disproportionately impact multiple audit verifications to which small entities. many handlers are currently subjected Compliance Cost Estimates Witnesses at the hearing provided due to specific buyer requirements. Based on record evidence, the evidence of the cost of compliance with Reducing multiple audit verifications proposed agreement would result in food quality verification requirements will reduce costs and improve efficiency total one-time modification costs at the that were used in this document to for both signatory handlers and their farm level for all leafy green acreage compute producer cost estimates of supplying producers. outside of California and Arizona implementation of the proposed Evidence was presented at the hearing estimated to range between $1.2 and program. Cost per acre data was that, due to food contamination $3.0 million, and an estimated average combined with estimates of the number outbreaks in recent years, producers of range of $14–$34 per acre for of acres to provide overall national cost the vast majority of leafy green vegetable modification costs. The record evidence estimates. production currently have contracts that indicates that this modification costs Data derived from the 2007 Census of stipulate production standards that need estimate is in addition to an estimated Agriculture (2007 Census), which was to be met to deliver their leafy green $6.1–$14.7 million already expended at presented at the hearing, showed that vegetables to handlers. These standards the farm level for producers under State the total number of U.S. acres of leafy are generally mandated to handlers by marketing agreement programs. greens outside of California and Arizona retail and food service buyers, but Under the proposed agreement, total was 88,572, representing 20 percent of consequently have an impact on seasonal (annual) cost increases at the total U.S. acres. Combined acres for producers who must also conform to the farm level for all leafy green acreage California and Arizona total 344,451. standards in order to sell to handlers. outside of California and Arizona are A USDA Economic Research Service estimated to range from $2.7 to $4.4 Acres Percentage and University of Arizona research million, which is an estimated average of U.S. acres report was submitted at the hearing range of $30–$50 per acre annual regarding the fresh-cut vegetable United States ...... 433,023 ...... compliance costs. These annual cost California ...... 271,040 63 industry. Fifteen lettuce and bagged estimates would be in addition to the Arizona ...... 73,411 17 salad shippers were interviewed in estimated $13.0–$21.7 million being All other States ... 88,572 20 1999–2000. This research indicated that expended at the farm level for producers most leafy greens shippers were under State marketing agreement Source: NASS, USDA diversified mixed-vegetable shippers programs. We are relying primarily on Two reports submitted as evidence at and many engaged in some degree of cost estimates published in a University the hearing (the ‘‘UC report’’ and the processing. In 1999, 80 percent of these of California report submitted at the ‘‘Intertox report’’) included estimates of shippers had requests from retailers for, hearing. However, a wider range of cost compliance cost per acre.1 The cost and were providing, third-party food estimates was submitted by a proponent impact estimates are summarized in safety certification. witness and is included subsequently in three tables, two of which focus on Evidence was presented at the Table 2. producer costs, and a third one covers hearings that the lack of one set of Based on record data, annual handler first handler assessment costs. production and handling standards in assessments that would be collected Table 1 presents computations of the leafy green vegetable industry often under the proposed agreement are producer costs using cost data from the results in producers having to comply estimated to range between $5.7 and UC report and acreage data from the with different sets of standards for $28.6 million. Annual per acre 2007 Census. The $14 per acre figure different customers. compliance costs, not including appearing in the 2nd column of Table 4 Based on record testimony by those assessments, for handlers who also are was rounded off from a $13.60 cost who favor the proposed agreement, producers are estimated to range estimate in the UC Report.2 The support was expressed for a government between $48 and $105 per acre. standard deviation was rounded off to program that would become an industry Producer Cost Impact Estimates standard. If this proposal is 1 Exhibit 43 ‘‘Producers’ Compliance Costs for the implemented, supporters of the Under the proposed agreement, Leafy Greens Marketing Agreement and Other Food proposed agreement believe that the signatory handlers would be required to Safety Programs’’, by S. Hardesty and Y. Kusunose, UC Davis; and Exhibit 34A ‘‘Marketing Data and multiplicity of private standards would ensure that producers that supply them Cost Overview’’ by Diane Wetherington, Intertox. be replaced or minimized with a with leafy green vegetables are 2 ‘‘Cost per acre of leafy greens’’ on the bottom row science-based, consistent, and scalable producing in accordance with a set of of Table 4 of the UC Report.

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$202 and added to the mean cost to give To provide an estimate of the total would likely be minimal, since most an upper range estimate of $34 per acre. cost for modifications for the industry as acreage is already participating in the Multiplying the cost figures of $14 a whole, the fourth column adds the leafy green marketing agreements in and $34 per acre by 88,572 acres yields costs in column three to an estimated those two States and/or have already a range of estimated farm modification cost expended by producers in completed modifications in response to costs of $1.2 to $3.0 million for all leafy California and Arizona. However, contractual GAPs and audit verification green acreage outside of California and additional California and Arizona farm cost obligations from buyers. Arizona. modification costs for compliance

TABLE 1—RANGE OF FARM MODIFICATION COST ESTIMATES FOR PRODUCER COMPLIANCE WITH THE PROPOSED PROGRAM [one time expenditures, not seasonal]

Total modifica- Total modifica- Per acre cost tion cost for tion cost for in California* farms outside farms in the of CA, AZ*** U.S.***

– – – – – – $ million – – – – – –

Mean cost of producers in survey ...... $14 $1.2 $6.1 Mean cost plus $20 per acre* * ...... 34 3.0 14.7 *Farm modification cost based on 2009 UC report of impact of California LGMA by S. Hardesty, presented at the hearing in Monterey. **Approximately one standard deviation from the mean cost of producers surveyed in the 2009 UC report. ***To get Total Modification Cost, per acre cost is multiplied by acreage data from 2007 Census (88,572 acres of leafy greens outside of CA and AZ; total U.S. leafy green acres of 433,023 is the sum of 344,451 acres in California and Arizona plus 88,572 outside of those two States).

The most common changes in leafy vegetables of under $1 million. Revenue larger percent for those producers with green farming operations made by of $1 million to $10 million was defined small, scattered plots. respondents (to the survey that was the as medium, and a large farm had leafy Another key impact to examine is the basis of the UC report) were installing green revenues over $10 million increased seasonal cost that would be or improving fencing and bathroom/ annually. incurred every year by producers for hand-washing facilities. The total cost of compliance with the proposed program. The survey results indicated that one- the investments/modifications for A range of compliance cost increases is third of respondents reduced LGMA compliance averaged $21,490, or presented in Table 2, based on cost data $13.60 per acre, with a range from $0 to production area under cultivation, drawn from the UC and Intertox $150,500. The cost for modifications averaging a 1.5 percent reduction, to reports.3 Table 2 presents a range of per reported by small farms was $14.82 per meet buffer zone requirements. acre of cost increases for producer acre. The figures for medium and large Evidence presented at the hearing compliance—four cost levels at $20 farms were $18.05 and $8.29 per acre, indicates small producers tend to have increments: $10, $30, $50, and $70.4 respectively. In the UC report, a small numerous small plots of land. Buffer Individual producer costs could vary farm was defined as a farm with annual zone land loss, if required under the substantially from these estimates of gross revenue from leafy green proposed agreement, could be a much mean costs per acre.

TABLE 2—RANGE OF SEASONAL COST INCREASE ESTIMATES FOR PRODUCER COMPLIANCE WITH THE PROPOSED PROGRAM

Seasonal cost Seasonal cost Increased cost per acre increases for increases for farms outside farms in the of CA, AZ* U.S.*

$ million

$10 ...... * * * $0.9 $4.3 30 ...... * * 2.7 13.0 50 ...... * * 4.4 21.7

3 In table 5 in the UC report, the bottom rows other regions of the U.S. were not submitted at the included personnel, water testing, third party show that the mean food safety costs per acre were hearing, it is assumed that a similar range of audits, recordkeeping, training, equipment, and a $24.04 and $54.63. The difference between those additional expenditures would be likely in other category called ‘‘ranch care, pest control, chlorine.’’ figures ($30.59, rounded to $30) represents one states under the proposed program. Given this range of total costs from the Intertox estimate of increased California producer 4 Table 13 on page 13 of the Intertox report report, it is assumed that a range of cost increases expenditure on food safety after the California indicates costs of $35 and $45 for a producer (averaged over all producers) could range from $10 LGMA went into effect in 2007, compared to growing 200 acres of leafy greens. Table 14 on page seasonal food safety expenses already incurred 14 presents per acre cost estimates of $20, $30 and to $70 per acre. prior to the LGMA. In table 6 of the UC report, $50 for a 10,000-acre producer. Tables 15 and 16 mean per acre costs of $36.46 and $84.36 appear in (on page 16 of the Intertox report) present costs for the bottom rows. The difference between them is producer-handlers. For a producer-handler $47.90, which is rounded to $50. The $30 and $50 shipping 200,000 cartons annually, the per acre cost costs represent a range of estimates of the cost estimates were $67 and $95. For an operation impact of the additional requirements to comply shipping 9.5 million cartons, the food safety costs with the California LGMA. Since cost data from were $48 and $105. The cost elements in the tables

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TABLE 2—RANGE OF SEASONAL COST INCREASE ESTIMATES FOR PRODUCER COMPLIANCE WITH THE PROPOSED PROGRAM—Continued

Seasonal cost Seasonal cost increases for increases for Increased cost per acre farms outside farms in the of CA, AZ* U.S.*

70 ...... * * * 6.2 30.3 * Acreage data from 2007 Census, 88,572 acres of leafy greens outside of CA and AZ plus 271,040 acres of leafy greens in CA and AZ equals U.S. leafy green acres of 433,023. ** In the UC report, a producer survey yielded a mean estimated increase of about $30. A separate estimate of ‘‘Seasonal Food Safety Losses and Activities’’ showed increased per acre expenditure of about $48, which is rounded to $50 in the table above. *** The Intertox report included producer food safety costs from ranging from $20 to $50 per acre, and for producer/handlers, from $48 to $105 per acre, for all food safety expenses, not just those incurred for compliance. Given this range of total costs, it is assumed that a range of net in- creased costs (averaged over all producers) could range from $10 to $70 per acre. Individual producer costs could vary substantially from these estimates of mean costs per acre.

Multiplying the cost figures of $30 to quality and best practices procedures, some which increased cash costs, such $50 per acre by 88,572 acres yields a and increased water testing averaging a as new or added testing of the growing range of seasonal cost increase estimates total of $3,657 per month. environment. Many stated that they for program compliance of $2.7 to $4.4 Record evidence indicates that a large were spending more of their time on million for all leafy green acreage proportion of commercial leafy green food safety issues, including attending outside of California and Arizona. vegetable production is already training. Most small producers testifying Adding Intertox submitted estimates complying with the California and or were concerned with potential increases the range to $900,000 to $6.2 Arizona marketing agreements, recordkeeping requirements that they million. Just as with modification costs therefore, the proposed agreement believed would be burdensome under discussed above, it is assumed that would not cause these producers to the proposed agreement. Evidence California and Arizona farm seasonal incur significant cost increases since presented at the hearing suggested that cost increases for program compliance they have already invested in food most producers are spending time and/ would be minimal, since most acreage is quality verification and related or money trying to reduce the potential already participating in the leafy green compliance. for food contamination, but the efforts marketing agreements in those two Record evidence indicates that, based are not consistent and vary from States and/or have already undertaken on a 2008 survey of LGMA participants, producer to producer. It is anticipated seasonal GAPs or audit verification the types of costs associated with the that the proposed agreement would expenditures in response to contractual agreement included additional have minimal impact on small obligations from buyers. However, to personnel costs, additional water and producers that market directly through provide an estimate of the total seasonal soil amendment tests, traceability local farmers’ markets or similar costs for the industry as a whole, the processes and increased recordkeeping. community outlets, because these fourth column adds the costs in column According to the record evidence, small handling entities would likely not be three to an estimated cost expended by producers reported costs associated signatories to the proposed agreement. producers in California and Arizona, with the LGMA of $35 to $45 per acre; Producer/Handler Cost Impact most of who are covered by State for large producers, costs were $20 to Estimates marketing agreements. $50 per acre. Small producers in the Results of the UC report included per survey had made little investment prior According to record evidence, a large acre seasonal (annual) food safety cost to the LGMA. In the absence of specific producer who also is a large handler estimates of $0 to $200 in 2007. This buyer or program requirements, such as would have food quality and best estimate includes requirements of the National Organic Program, costs practices procedure costs ranging from private standards audits in addition to were small and/or not broken out from $48 to $105 per acre. The evidence LGMA compliance. The average other operating expenses in the survey. indicates the largest cost increase for increase in seasonal compliance cost for The costs cited in the Intertox large producers was hiring or assigning producers of all sizes was $30.59 per testimony represent 1–2 percent of total food safety personnel to manage food acre. Total seasonal compliance costs operating costs and include all food quality and best practices procedure reported by small farms were $38.57 per quality and best practices procedure compliance. Further evidence indicates acre. The figures for medium and large costs, not just those associated with the that a small handler who is also a small farms were $85.89 and $33.22 per acre, LGMA. Numerous proponent witnesses producer would have audit verification respectively. Taking all costs into testified that these costs were or compliance related costs ranging consideration, average compliance costs representative of their costs as a from $67 to $95 per acre. This is based totaled 1.0–1.3 percent of producers’ producer or handler. on a representative farm growing and leafy green vegetable revenues. Evidence provided at the hearing shipping 200,000 cartons of leafy green A researcher on the faculty at indicates that most, if not all, large vegetables per year (approximately 950 California State University at Fresno producers have initiated some food acres). quality and best practices procedures testified as a proponent witness. The Assessment Cost Impacts on Handlers witness reported results of a survey even if they were not regulated under taken on the costs of complying with the either of the two State marketing Under the proposed agreement, LGMA. Three significant cost increases agreements currently in effect. signatory first handlers would be as a result of the LGMA were $400–500 Some small producers testified that assessed based on their volume of leafy per audit per farm for compliance they had initiated good agricultural green vegetables handled for the fresh audits, one additional employee for food practices in recent years, including market. These assessments would cover

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the administrative costs of the proposed computation is based on a carton weight carton, the total assessment cost to program as well as audit verification of 24 pounds and an average yield. The handlers in all other States is estimated fees for signatory first handlers and their three-year average U.S. yield (2007– at $1.2 million, based on 88,172 acres, producers. Additionally, signatory 2009) for the 5 major leafy greens is 313 if all producers in those States sold their handlers other than first handlers would hundredweight (cwt.) per acre. entire leafy green production to pay costs associated with the conduct of Multiplying $13.04 per acre times signatory handlers. audit verifications. The record evidence California and Arizona acreage of indicates that USDA’s current rate is 344,451 yields an estimate of $4.5 In 2009, 167.7 million pounds of fresh $92 per hour per auditor. million in total assessments for those lettuce, spinach and cabbage were Table 3 shows alternative assessment two States. The $4.5 million assessment imported in the U.S. Record evidence rates and a computation illustrating the figure represents an approximation of indicates that some of the leafy green total cost to all U.S. leafy green the average of annual payments by vegetables imported into the United vegetable signatory handlers of the handlers since the State LGMAs were States are produced and/or shipped by California and Arizona marketing implemented in 2007; those States large U.S. companies. Assessments on agreements, and signatory first handlers would therefore likely not see a the quantity of imports are estimated to under the proposed agreement. An significant change in assessment add $70,000 to potential total assessment rate of one cent per carton payments if the rate was approximately assessments at the assessment rate of is equivalent to $13.04 per acre. This one cent per carton. At one cent per one cent per carton.

TABLE 3—ESTIMATE OF POTENTIAL HANDLER ASSESSMENTS UNDER ALTERNATIVE PAYMENT RATES

Assessment rates Total assessments **

Assessments Per carton Per acre California All other on domestic Imports *** Total assess- equivalent * and Arizona states production ments

$ $ per acre – – – – – – – – $ million – – – – – – – –

0.01 ...... 13.04 4.49 1.16 5.65 0.07 5.72 0.03 ...... 39.13 13.48 3.47 16.94 0.21 17.15 0.05 ...... 65.21 22.46 5.78 28.24 0.35 28.59 * Computation of per acre equivalent: $0.05 per carton/24 lbs. per carton = $0.002083 per pound, or $0.2083 per cwt; Average yield for 5 major leafy greens (2007–2009) = 313 cwt. per acre; $0.2083 per cwt. × 313 cwt. per acre = $65.21 per acre. ** Computed by multiplying Per Acre Equivalent Assessment Rate by Acres (California and Arizona = 344,451; all other States = 88,172). *** Imports are assumed to be 167.7 million pounds.

If the rate were five cents per carton, disproportionate impact on small would ensure that the interests of small the per-acre equivalent rate would be producers relative to larger producers. entities would be considered in the $65.21. California and Arizona handlers The cost to producers of implementing establishment of the audit metrics under would pay $22.5 million, an increase of GAPs requirements is likely to be highly the agreement. $18 million from the estimated $4.5 variable, based on individual farm The proposed modifications are million that they have been paying in situations, and may or may not be intended to ensure representation in the recent years to their respective State disproportionately different for small process so that the audit metrics LGMAs. Handlers in all other States producers in relation to their larger developed would be scale-appropriate would pay $5.8 million. If all U.S. counterparts. and would not disproportionately producers sold their entire leafy green In AMS’s analysis of the proposed burden small entities. As recommended production to signatory first handlers agreement, consideration was given to in this proposed rule, the Secretary under the proposed agreement, if its potential impact on small producers. would have final approval of audit imports were equal to 2009 levels and In particular, this proposed rule metrics. if the assessment rate were five cents broadens Board representation and The establishment of audit metrics per carton, the estimate of total membership of the proposed Technical would include considering the assessment payments would be $28.6 Review Committee, provides for recommendations in a public forum. A million. The three cent per carton rate coordination with programs and other super majority vote by the Board is shown in the table represents an independent entities, and would required for recommendations to be intermediate level of assessment. include the addition of education and forwarded to the Secretary for approval outreach authority to support the through the informal rulemaking Concerns of Small Handlers and transition of small businesses into process. That process would include Producers compliance with the proposed public notice, the opportunity for public Hearing evidence indicates that agreement. comment, and final approval by USDA. participants representing small In response to comments received Since audits paid for by the Board businesses and organic operations were during the hearing, AMS is with assessment funds are based on concerned about the potential costs recommending changes to the proposal volume handled, small handlers should associated with any proposed best to make the Board and Committee more not be at a disadvantage in participating practices resulting from the fully representative of the varied in the proposed program in relation to implementation of this proposed business sizes and diverse production large handlers. In addition, since agreement. A number of those who cultures which comprise the domestic producers within the production area testified at the hearing expressed leafy green vegetables industry. The (U.S. grown) would not be required to concern that, if implemented, the changes to representation on the Board pay either assessments or auditing costs, proposed agreement might have a and Technical Review Committee small producers should not be at a

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disadvantage in relation to larger National Marketing Agreement Estimated Number of Respondents: producers for these costs. Regulating Leafy Green Vegetables. The 2,370 (2,200 handlers, 140 producers, 30 The hearing record indicates support general public would nominate three public). for moving forward with the proposed additional members and their alternates Estimated Number of Annual agreement as revised to ensure that to represent one from each of the Responses: 4,790. concerns of small, organic and following: Retailers, foodservice Estimated Number of Responses per diversified operations are addressed. operators, and the public. Each Respondent: 2.02. Estimated Total Annual Burden on Paperwork Reduction Act producer, signatory handler, importer, retailer, foodservice operator, and Respondents: 522 hours. In accordance with the Paperwork person of the general public would be Reduction Act of 1995 (44 U.S.C. Estimated Annual Burden for Each allowed to nominate oneself to the Form Chapter 35), AMS announces its Board as a member or alternate. Each intention to request an approval of a person nominated would be required to For each new form, the proposed new information collection for the complete a background information request for approval of new information proposed National Marketing form. All nominations would be collections under the proposed Agreement Regulating Leafy Green submitted to the Secretary for selection agreement are as follows: Vegetables. and appointment as Board members and FV–307 National Marketing Title: National Marketing Agreement alternate members. Agreement Regulating Leafy Green Regulating Leafy Green Vegetables. Following the selection of the Board, Vegetables. Handlers would use this OMB Number: 0581–NEW. committee nomination forms and form to indicate their willingness to Expiration Date of Approval: Three background information forms would be comply with the provisions of the years from approval date. proposed agreement. The proposed Type of Request: New information used to nominate and appoint members to the Technical Review Committee and National Marketing Agreement collection. Regulating Leafy Green Vegetables form Abstract: The information collection the Research and Development Committee. Each producer and would be completed if the proposed requirements in this request are agreement is implemented and in any essential to carry out the intent of the signatory handler would have the opportunity to submit a nomination future amendment of the agreement. Act, to provide the respondents the type Estimate of Burden: Public reporting of service they request, and to form with the names of persons to be considered for nomination to these burden for this collection of information administer the proposed National is estimated to average 5 minutes per Marketing Agreement Regulating Leafy committees. Persons who are nominated would be required to complete a response. Green Vegetables. Respondents: Handlers of leafy green background information form. All The proposed agreement for leafy vegetables. nominations would be submitted to the green vegetables would authorize the Estimated Number of Respondents: Secretary for selection and appointment development and implementation of 2,200. as committee members. production and handling regulations Estimated Number of Responses per (audit metrics). Such audit metrics The forms covered under this Respondent: 1. would reflect GAPs, GHPs, and GMPs. information collection request would be Estimated Total Annual Burden on AMS is the agency that would provide for the submission of minimum Respondents: 183.26 hours. oversight of the proposed agreement, information necessary to ascertain FV–308A Certificate of Resolution. and any administrative rules and handler support for the proposed This form would document corporate regulations issued under the proposed agreement, to appoint Board members handlers’ support for the proposed program. and their alternates, and appoint agreement. The certificate of resolution Upon implementation of the proposed members to specific committees of the would be completed if the proposed agreement or during amendatory Board. Additional reporting and agreement is implemented and in any proceedings, handlers would be offered recordkeeping requirements may future amendment of the agreement. the opportunity to sign an agreement to subsequently be recommended by the Estimate of Burden: Public reporting indicate their willingness to comply Board for its use in administering the burden for this collection of information with the provisions of the new or proposed agreement. The burden is estimated to average 5 minutes per amended agreement. The proposed imposed by any additional requirements response. agreement would be voluntary in that would be submitted for approval by the Respondents: Incorporated handlers only handlers who sign the proposed OMB. of leafy green vegetables. agreement would become signatory The information collected would be Estimated Number of Respondents: handlers who are subject to its used only by authorized representatives 2,100. requirements. AMS also would provide of USDA, including AMS, Fruit and Estimated Number of Responses per a certificate of resolution for each Vegetable Programs’ regional and Respondent: 1. signatory handler organization to sign, headquarters staff, and authorized Estimated Total Annual Burden on documenting the handler’s approval of employees of the Board, if established. Respondents: 174.93 hours. the proposed agreement. Section 608(d)(2) of the Act provides for FV–309 Nomination Form by If the proposed agreement is confidential treatment of information. Producers/Signatory Handlers. established, nomination forms for Producers and signatory handlers of Total Annual Estimated Burden signatory handlers and producers and leafy green vegetables would use this background information forms would be The total burden for the information form to nominate themselves or other used to nominate and appoint Board collection request under the proposed producers and signatory handlers to members and alternates. Producer, agreement is as follows: serve on the Board. This form also signatory handler, and importer Estimate of Burden: Public reporting would include the nomination of the members would be nominated to serve burden for this collection of information importer member and their alternate. as representatives on the Board by their is estimated to average .25 hours per For the purpose of this calculation, it is peers who also are subject to the response. estimated that 70 producers and 70

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signatory handlers would offer is estimated to average 10 minutes per mechanical, or other technological nominations. response. collection techniques or other forms of Estimate of Burden: Public reporting Respondents: Producers and signatory information technology. burden for this collection of information handlers of leafy green vegetables, and Comments should reference OMB No. is estimated to average 10 minutes per the Board. 0581–NEW and the Proposed National response. Estimated Number of Respondents: Marketing Agreement Regulating Leafy Respondents: Producers and signatory 75. Green Vegetables, and be sent to USDA handlers of leafy green vegetables. Estimated Number of Responses per in care of the Docket Clerk at the Estimated Number of Respondents: Respondent: 1. previously-mentioned address. All 140. Estimated Total Annual Burden on comments received will be available for Estimated Number of Responses per Respondents: 12.75 hours. public inspection during regular Respondent: 1. FV–313 Committee Background business hours at the same address. Estimated Total Annual Burden on Information. This recommended All responses to this notice will be Respondents: 23.38 hours. decision proposes that the Technical summarized and included in the request FV–310 Nomination Form by General Review Committee consist of a for OMB approval of the above- Public. Any person located in the minimum of 10 members and the described forms. All comments will production area would use this form to Research and Development Committee become a matter of public record. nominate themselves or other persons consist of a minimum of 9 members. AMS is committed to complying with from the public to serve as a retailer, This form would be used by candidates the E–Government Act, to promote the foodservice representative, and public that have been nominated to provide use of the Internet and other member or alternate member on the their qualifications to serve on the information technologies to provide Board. For the purpose of this Technical Review Committee or the increased opportunities for citizen calculation, it is estimated that 30 Research and Development Committee. access to Government information and persons would offer nominations. For the purpose of this calculation, it is services, and for other purposes. Estimate of Burden: Public reporting estimated that 20 producers, 15 burden for this collection of information signatory handlers, and 40 other persons Civil Justice Reform is estimated to average 10 minutes per would agree to be candidates to serve on The marketing agreement proposed response. these committees. herein has been reviewed under Respondents: General Public. Estimate of Burden: Public reporting Executive Order 12988, Civil Justice Estimated Number of Respondents: burden for this collection of information 30. Reform. It is not intended to have Estimated Number of Responses per is estimated to average 30 minutes per retroactive effect. There are no Respondent: 1. response. administrative procedures that must be Estimated Total Annual Burden on Respondents: Producers and signatory exhausted prior to any judicial Respondents: 5.10 hours. handlers of leafy green vegetables, challenge to the provisions of marketing FV–311 Background Information. This retailers, foodservice representatives, agreements issued under the Act. proposed rule recommends the Board be food safety experts, and other persons. Estimated Number of Respondents: Rulings on Briefs of Interested Persons, comprised of 26 members and 26 Proposed Findings and Conclusions alternates. This form would be used by 75. nominated candidates to provide their Estimated Number of Responses per Briefs, proposed findings and qualifications to serve on the Board. For Respondent: 1. conclusions, and the evidence in the Estimated Total Annual Burden on the purpose of this calculation, it is record were considered in making the Respondents: 37.50 hours. estimated that 170 persons would agree findings and conclusions set forth in If this proposed agreement is to be candidates to serve on the Board. this recommended decision. To the Estimate of Burden: Public reporting established by USDA, the Board could extent that the suggested findings and burden for this collection of information recommend to the Department other conclusions filed by interested persons is estimated to average 30 minutes per forms (such as monthly assessment are inconsistent with the findings and response. report, contact information form, conclusions of this recommended Respondents: Signatory handlers, withdrawal form, etc.) which would be decision, the requests to make such importers, producers, retailers, needed to administer the proposed findings or to reach such conclusions foodservice representatives, and general agreement. All such forms would be are denied. subject to USDA and OMB review and public nominees. General Findings Estimated Number of Respondents: approval. 170. Comments: Comments are invited on: 1. The proposed agreement and all of Estimated Number of Responses per (1) Whether the proposed collection of the terms and conditions thereof, would Respondent: 1. information is necessary for the proper tend to effectuate the declared policy of Estimated Total Annual Burden on performance of the functions of the the Act; Respondents: 85.0 hours. agency, including whether the 2. The proposed agreement regulates FV–312 Committee Nomination Form. information would have practical the handling of leafy green vegetables Producers and signatory handlers of utility; (2) the accuracy of the agency’s grown in the production area in the leafy green vegetables would use this estimate of the burden of the proposed same manner as, and is applicable only form to nominate persons to serve on collection of information, including the to, persons in the respective classes of the Technical Review Committee or the validity of the methodology and commercial and industrial activity Research and Development Committee. assumptions used; (3) ways to enhance specified in the proposed agreement For the purpose of this calculation, it is the quality, utility, and clarity of the upon which a hearing has been held; estimated that 40 producers and 35 information to be collected; and (4) 3. The proposed agreement prescribes, signatory handlers would offer ways to minimize the burden of the insofar as practicable, such different nominations. collection of information on those who terms applicable to different parts of the Estimate of Burden: Public reporting are to respond, including the use of production area as are necessary to give burden for this collection of information appropriate automated, electronic, due recognition to the differences in the

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production and marketing of leafy green 970.37 Zone. of 1937, as amended (48 Stat. 31, as vegetables in the production area; and Purpose amended; 7 U.S.C. 601–674). 4. All handling of leafy green 970.39 Purpose. vegetables grown in the production, or § 970.2 Audit metric. handled as imported product from National Leafy Green Vegetable Board Audit metric means an auditable outside the production area, as defined 970.40 Establishment and membership. standard or requirement within a in the proposed agreement, is in the 970.41 Reallocation of membership. process control prescribed pursuant to current of interstate or foreign 970.42 Eligibility. § 970.67. 970.43 Term of office. commerce or directly burdens, § 970.3 Audit. obstructs, or affects such commerce. 970.44 Nominations. A 90-day comment period is provided 970.45 Alternate members. Audit means an official review 970.46 Technical Review Committee. to allow interested persons to respond conducted by the Inspection Service to 970.47 Research and Development verify and document that good to this proposal. All written exceptions Committee. timely received will be considered. agricultural, handling, and 970.48 Compensation and expenses. manufacturing practices are adhered to After consideration of any comments 970.49 Procedure. received, the Secretary will issue a 970.50 Powers. throughout the growing, harvesting, Secretary’s Decision which, if 970.51 Duties. packing, manufacturing, and transportation of leafy green vegetables. warranted, would include a handler Expenses and Assessments sign-up period. The audit includes a physical visit to 970.55 Expenses. the farm or facility subject to audit List of Subjects in 7 CFR Part 970 970.56 Assessments. while it is in operation, where 970.57 Accounting. practicable, and represents a ‘‘snapshot Marketing agreements, Reporting and 970.58 Contributions. recordkeeping requirements, Vegetables. in time’’ based on documentation Duties and Responsibilities of Signatory reviewed, persons interviewed, and Title 7, Chapter IX is proposed to be Handlers operations observed, and is intended to amended by adding Part 970 to read as reflect past and ongoing activities. follows: 970.65 Signatory handlers. 970.66 Verification audits. § 970.4 Broker. PART 970—NATIONAL MARKETING 970.67 Audit metrics. 970.68 Traceability. Broker means a person who AGREEMENT REGULATING LEAFY 970.69 Official certification mark. GREEN VEGETABLES coordinates the sale and transportation 970.70 Administrative review of audits. of leafy green vegetables for retail or Subpart—Agreement Regulating Signatory 970.71 Modification, suspension, or foodservice operators, without taking Handlers termination of regulations. ownership of such leafy green 970.72 Exemptions. Definitions vegetables. Research and Development Sec. § 970.6 Critical limit. 970.75 Research, development, and 970.1 Act. education. Critical limit means a maximum or 970.2 Audit metric. minimum value that is assigned to a 970.3 Audit. Reports and Records 970.4 Broker. process control when a biological, 970.80 Reports and recordkeeping. chemical, or a physical parameter must 970.6 Critical limit. 970.81 Confidential information. 970.7 Crop year. be controlled to prevent or minimize the 970.82 Verification of reports. occurrence of a food safety hazard. 970.8 Foodservice operator. 970.83 Compliance. 970.9 Fresh. 970.10 Fresh-cut. Miscellaneous § 970.7 Crop year. 970.11 Good agricultural and handling 970.85 Effective time. Crop year is synonymous with fiscal practices. 970.86 Rights of the Secretary. year and means the 12-month period 970.13 Good manufacturing practices or 970.87 Personal liability. beginning on April 1 of any year and GMPs. 970.88 Separability. ending on March 31 of the following 970.14 Handle. 970.89 Derogation. year, or any other period recommended 970.15 Handler. 970.90 Duration of immunities. by the Board and approved by the 970.16 Importer. 970.91 Agents. Secretary. 970.17 Inspection Service. 970.92 Suspension or termination. 970.18 Leafy green vegetables. 970.93 Proceedings upon termination. § 970.8 Foodservice operator. 970.19 Manufacture. 970.94 Effect of termination or amendment. 970.20 Manufacturer. Foodservice operator means a 970.95 Amendments. business (including but not limited to 970.22 National Leafy Green Vegetable 970.96 Counterparts. Board or Board. 970.97 Handler sign-up. an industrial caterer or hospital) that 970.23 Packaged. 970.98 Withdrawal. receives or purchases leafy green 970.24 Part. 970.99 OMB control number. vegetables from handlers and delivers 970.25 Person. such vegetables to consumers, either by Authority: U.S.C. 601–674. 970.26 Process control. sale or by offering for direct 970.27 Producer. consumption. 970.28 Production area. Subpart—Agreement Regulating 970.29 Region. Signatory Handlers § 970.9 Fresh. 970.30 Retailer. 970.31 Secretary. Definitions Fresh means any leafy green vegetable in the raw or natural form. 970.32 Signatory first handler. § 970.1 Act. 970.33 Signatory handler. § 970.10 Fresh-cut. 970.35 United States Department of Act means Public Act No. 10, 73rd Agriculture or USDA. Congress (May 12, 1933), as amended Fresh-cut is synonymous with 970.36 United States Food and Drug and as reenacted and amended by the products and means leafy green Administration or FDA. Agricultural Marketing Agreement Act vegetables that have been altered from

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their fresh form by cutting, dicing, § 970.17 Inspection Service. or sealed, such as cellophane, peeling, slicing, chopping, shredding, Inspection Service means the Fruit clamshells, cartons or totes. coring, or trimming, with or without and Vegetable Programs, Agricultural washing prior to being packaged for use Marketing Service, USDA, its designees, § 970.24 Part. by the consumer, foodservice industry, or any other entity approved or Part means the marketing agreement or a retail establishment. recognized by USDA to conduct audits regulating the handling of leafy green on leafy green vegetables. vegetables by signatory handlers and all § 970.11 Good agricultural and handling rules, regulations and supplementary practices. § 970.18 Leafy green vegetables. subparts issued thereunder. Good agricultural practices or GAPs (a) Leafy green vegetables means the and Good handling practices or GHPs mature and immature leafy portions of § 970.25 Person. refer to general practices to reduce any of the following vegetables and any Person means an individual, microbial food safety hazards in leafy varieties thereof that are for human partnership, corporation, association, or green vegetables, as described in consumption in their fresh or fresh-cut any other business unit. sections of the current FDA ‘‘Guide to form: arugula, cabbage (red, green, and Minimize Microbial Food Safety savoy), chard, cilantro, cress, dandelion, § 970.26 Process control. Hazards for Fresh Fruits and Vegetables’’ endigia, endive (escarole), kale, lettuce Process control means a step or point ˆ and the current FDA ‘‘Guide to (head, leaf, and romaine), mache, within a production, harvesting, Minimize Microbial Food Safety mizuna, parsley, radicchio, spinach, tat handling, manufacturing, or Hazards for Fresh-cut Fruits and soi, winter purslane, or any other leafy transportation process at which the Vegetables’’ that are applicable to the green vegetable recommended by the potential for microbiological production and harvesting activities of Board and approved by the Secretary. contamination can be reduced. leafy green vegetables, or any other The Board may recommend, subject to revised or modified versions thereof, or the approval of the Secretary, the § 970.27 Producer. any other documents or regulations, as removal of any leafy green vegetable Producer is synonymous with grower recommended by the Board and from this definition. and means any person engaged in a (b) Combinations of the above listed approved by the Secretary for use in proprietary capacity in the production leafy green vegetables are covered by the audits conducted by the Inspection of leafy green vegetables for sale or requirements established under this Service under this part. delivery to a signatory handler. part. This includes spring mix. § 970.13 Good manufacturing practices or (c) All non-leafy green vegetables or § 970.28 Production area. GMPs. non-produce ingredients commingled with fresh-cut leafy green vegetables in Production area means all fifty States Good manufacturing practices or packaged products (e.g., salad kits and the District of Columbia of the GMPs means any FDA regulations that which may contains carrots, meat, United States of America. appear in 21 CFR Part 110 or as cheese, and/or dressings) are not otherwise amended, which describe the § 970.29 Region. covered by this part. methods, equipment, facilities, and Region means a production or controls required for producing fresh- § 970.19 Manufacture. growing area distinguished by common cut processed food, including packaged Manufacture is synonymous with environmental or growing conditions leafy green vegetables, or FDA guidance process and means to change fresh leafy including, but not limited to, geography, documents, regulations, or any other green vegetables to fresh-cut leafy green climate, production practices, water documents recommended by the Board vegetables: Provided, that manufacture sources and distribution systems, or and approved by the Secretary for use does not include leafy green vegetables wildlife. Regions are not synonymous in audits conducted by the Inspection packed in the field or apply to retailing, with zones. Service under this part. foodservice operators, or brokering, § 970.30 Retailer. § 970.14 Handle. except to the extent that a retailer, foodservice operator, or broker is other Retailer means any person that sells Handle means to receive, acquire, wised engaged in manufacturing for leafy green vegetables directly to the sell, process, ship, distribute, or import non-retail purposes. consumer. leafy green vegetables: Provided, that handle does not include brokering, § 970.20 Manufacturer. § 970.31 Secretary. retail sales, or foodservice sales of leafy Manufacturer means any person who Secretary means the Secretary of green vegetables. manufactures: Provided, that, this Agriculture of the United States or any definition does not include a retailer, a officer or employee of the United States § 970.15 Handler. foodservice operator, or broker, except Department of Agriculture who is, or Handler means any person who to the extent that such a person is who may hereafter be, authorized to act handles leafy green vegetables: otherwise engaged in handling. in his or her stead. Provided, that, this definition does not § 970.22 National Leafy Green Vegetable § 970.32 Signatory first handler. include a retailer, foodservice operator, Board or Board. or a broker, except to the extent such National Leafy Green Vegetable Board Signatory first handler means the person is otherwise engaged in or Board means the administrative person located in the production area handling. board established pursuant to § 970.40, that first handles leafy green vegetables and who is party to this part. § 970.16 Importer. or as affected pursuant to § 970.41. Importer means a handler located in § 970.23 Packaged. § 970.33 Signatory handler. the production area who imports leafy Packaged is synonymous with Signatory handler means a handler green vegetables that are produced or containerized and means leafy green located in the production area who is handled outside of the production area.’’ vegetables that are uniformly wrapped party to this part.

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§ 970.35 United States Department of National Leafy Green Vegetable Board § 970.41 Reallocation of membership. Agriculture or USDA. § 970.40 Establishment and membership. The Board may recommend, subject to United States Department of the approval of the Secretary, (a) A National Leafy Green Vegetable Agriculture or USDA means any officer, reallocation of Board members among Board is hereby established to employee, service, program or branch of zones, changes in the number of Board administer the terms and provisions of the Department of Agriculture, or any members, and changes in the this part. Such Board shall consist of other person acting as the Secretary’s composition of the Board by revising the twenty-six members, each of whom agent or representative in connection number of members representing shall have an alternate who shall have with any provisions of this part. various industry sectors, Provided, that the same qualifications as the member each zone must be represented by at § 970.36 United States Food and Drug for whom he or she is an alternate. least one producer and one signatory Administration or FDA. Board membership shall be allocated as handler. In making such United States Food and Drug follows: recommendations, the Board shall Administration or FDA means the (1) Four signatory handlers and three consider the following factors: government agency within the United producers from Zone 1; States Department of Health and Human (2) One signatory handler and one (a) Shifts in acreage and number of Services. producer from Zone 2; producers within zones; (3) One signatory handler and one (b) The importance of new acreage in § 970.37 Zone. producer from Zone 3; its relation to existing zones; Zone means the applicable one of the (4) One signatory handler and one (c) The equitable relationship between following described subdivisions of the producer from Zone 4; membership and zones; production area or such other (5) One signatory handler and one (d) Economies to result in promoting subdivisions as recommended by the producer from Zone 5; efficient administration due to Board and approved by the Secretary: (6) One signatory handler and one reallocation or changing the (a) Zone 1 shall include the States of producer from Zone 6; composition of membership; and, California and Hawaii. (7) Two signatory handlers and one (e) Other relevant factors. (b) Zone 2 shall include the States of producer from Zone 7; Alaska, Idaho, Montana, Oregon, (8) One signatory handler and one § 970.42 Eligibility. Washington, and Wyoming; producer from Zone 8; (a) Each signatory handler member (c) Zone 3 shall include the States of (9) One importer representative from (including importer) and his or her Arizona, Colorado, Nevada, New the production area; alternate member at the time of his or Mexico, and Utah; (10) One retailer representative from her selection and throughout his or her (d) Zone 4 shall include the States of the production area; term of office shall be a signatory (11) One foodservice representative Illinois, Iowa, Minnesota, Nebraska, handler (including importer), or an from the production area; and, North Dakota, South Dakota, and officer or employee of a signatory (12) One public member Wisconsin; handler in the zone for which selected. (e) Zone 5 shall include the States of representative from the production area. (b) A majority of the producer (b) Each producer member and his or Arkansas, Kansas, Louisiana, Missouri, her alternate member at the time of his Oklahoma, and Texas; members of the Board shall not be engaged in the handling of leafy green or her selection and through his or her (f) Zone 6 shall include the States of vegetables or the manufacturing of term of office shall be a producer, or an Delaware, District of Columbia, Indiana, fresh-cut products, and two producers officer or employee of a producer in the Kentucky, Maryland, Michigan, Ohio, must be small producers. Further, at zone for which selected. Virginia, and West Virginia; least four handler members must be (c) No signatory handler (including (g) Zone 7 shall include the States of engaged in the manufacturing of fresh- importer) or producer shall be Alabama, Florida, Georgia, Mississippi, cut leafy green products. represented on the Board by more than North Carolina, South Carolina, and (c) To the extent practicable, Board one member and one alternate member. Tennessee; and, membership shall include (d) The retailer, foodservice, and (h) Zone 8 shall include the States of representation of the following public members and their alternate Connecticut, Maine, Massachusetts, stakeholder groups: members may not be engaged in the New Hampshire, New Jersey, New York, (1) Producers that meet the Small production or handling of leafy green Pennsylvania, Rhode Island, and Business Administration’s (SBA) vegetables. The retailer and foodservice Vermont. definition small agricultural producers. members and their alternates shall be, at Purpose (2) Diversified farm producers who the time of their selection and produce a variety of crops or animals, or throughout their term of office, an § 970.39 Purpose. both, on one farm, as distinguished from owner, officer or employee for the seat The purpose of this agreement is to: specialization of a single commodity. selected. Implement a uniform, auditable, For the purposes of this subpart, variety science-based food quality verification of crops means any crop in addition to § 970.43 Term of office. program conducted by the USDA; those included in the definition of leafy Members and alternate members of enhance the quality of leafy green green vegetables. the Board shall serve for terms of two vegetables available in the marketplace (3) Producers and signatory handlers (2) years beginning on April 1 and through the application of good representing certified organic businesses ending on March 31. Each member and agricultural production, handling, and meeting the SBA definition of small alternate member shall continue to serve manufacturing practices; foster greater business entity. until a successor is selected and has cooperation with local, State, and (4) Producers and signatory handlers qualified. Members shall not serve more Federal agencies and other representing certified organic businesses than three (3) consecutive two-year organizations; and, improve consumer that exceed the SBA definition of small terms of office or for a total of six (6) confidence in leafy green vegetables. business entity. consecutive years.

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§ 970.44 Nominations. such vacancy occurs, the Secretary may and other interested persons as deemed Nomination of Board members and appoint from other qualified persons appropriate by the Technical Review alternate members shall follow the without regard to nominations on the Committee. procedure set forth in this section, or basis of representation provided for in such other procedure as may be §§ 970.40 through 970.42. § 970.47 Research and Development Committee. recommended by the Board and approved by the Secretary. § 970.45 Alternate members. The Research and Development (a) Producer and signatory handler An alternate for a member shall act in Committee is hereby established for the (including importer) nominations. the place and stead of such member purpose of providing advice to the Nominations for the producer and during the member’s absence or, in the Board on research, development, and signatory handler (including importer) event of the member’s death, removal, educational and outreach programs as members and alternate members shall resignation, or disqualification, until a authorized under § 970.75. be received at meetings, by mail, or by successor for such member’s unexpired (a) The Research and Development any form of electronically verifiable term has been selected and has Committee shall consist of 9 members as communication. Only persons eligible qualified. follows: Two representatives of retailers; to serve on the Board as producers and two representatives from foodservice § 970.46 Technical Review Committee. signatory handlers shall be eligible to companies; three public representatives, nominate producer and signatory A Technical Review Committee is and two representatives from land grant handler (including importer) members hereby established for the purpose of universities with expertise in one, but and alternate members. assisting the Board in developing audit not limited to, the following areas: The (b) Retailer, foodservice and public metrics in § 970.67. production, handling, and marketing of member nominations. Nominations for (a) The Technical Review Committee leafy green vegetables; small, the retailer, foodservice, and public shall consist of one producer, one diversified, or organic production and members and their alternate members signatory handler, and one food safety handling practices; agricultural shall be received at meetings, by mail, expert from each zone. Of the producer economics; or educational outreach in or by any form of electronically members, at least one must be a small the specified or related areas. verifiable communication. Any person producer as defined by the Small (b) Nomination and selection. from the production area shall be Business Administration and one must Nominations shall be received from eligible to nominate the retailer, be a certified organic producer. In producers and signatory handlers at foodservice, and public members and addition, the Technical Review meetings, by mail, or by any form of their alternate members. Committee shall include one electronically verifiable communication. (c) Acceptance. Each nominee shall representative from the USDA Natural The Board may recommend nominees to qualify by advising the Secretary that, if Resources Conservation Service to be USDA. The Secretary shall select and selected, such person agrees to serve in appointed by the Secretary. appoint the members from such the seat and position appointed. (b) The Secretary may appoint nominations or from other qualified (d) Selection. A report shall be additional representatives from USDA persons. provided to the Secretary detailing all agencies including, but not limited to: (c) The membership of the Research nominations prior to the beginning of National Organic Program, Agricultural and Development Committee may be each two- year term of office, together Research Service, and National Institute modified based on recommendations by with all necessary data and other of Food and Agriculture. the Board and approval of the Secretary, information as requested by the (c) USDA may consult with and invite or as otherwise deemed appropriate by Secretary. The Secretary shall appoint representation from agencies outside of USDA. from those nominees or from other USDA including, but not limited to: the (d) The Research and Development qualified persons, the members and United States Environmental Protection Committee may appoint subcommittees alternate members of the Board on the Agency, FDA, and the United States as necessary. Subcommittees may basis of the representation provided for Department of Interior Fish and Wildlife consist of producers, signatory handlers, in §§ 970.40 through 970.42. Service. and other interested persons as deemed (e) Failure to nominate. If (d) Nomination and selection. appropriate by the Research and nominations are not made within the Nominations for positions prescribed in Development Committee. time and manner specified in this part, paragraph (a) of this section shall be the Secretary may, without regard to received from producers and signatory § 970.48 Compensation and expenses. nominations, select the members and handlers at meetings, by mail, or by any All Board members, alternate Board alternate members of the Board on the form of electronically verifiable members, committee members, and basis of the representation provided for communication. In addition, the Board subcommittee members, shall serve in §§ 970.40 through 970.42. may recommend nominees to USDA. without compensation, but shall be (f) Vacancies. To fill a vacancy on the The Secretary may select and appoint reimbursed for necessary and reasonable Board occasioned by the failure of any the members from such nominations or expenses incurred in the performance of person selected as member or alternate from other qualified persons. their duties under this part. member to qualify, or in the event of the (e) The membership of the Technical death, removal, resignation, or Review Committee may be modified § 970.49 Procedure. disqualification of any member or based on recommendations by the Board (a) A majority of all the appointed alternate member, a successor for the and approval of the Secretary, or as members of the Board shall constitute a unexpired term of such member or otherwise deemed appropriate by quorum: Provided, That each zone with alternate member shall be nominated USDA. an appointed member shall be and selected in the manner specified in (f) The Technical Review Committee represented by at least one member or paragraphs (a) and (b) of this section. If may appoint subcommittees as his or her alternate at any meeting of the the names of nominees to fill any such necessary to facilitate the development full Board. Board action shall require vacancy are not made available to the of audit metrics. Subcommittees may the concurrence of a majority of present Secretary within a reasonable time after consist of producers, signatory handlers, members except that recommendations

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for the Secretary’s approval of audit once each crop year and at such other that signatory first handlers shall pay metrics, assessment rates, and times as the Board may deem necessary during each crop year. The Board may termination of the agreement must be or as the Secretary may request. Such recommend and the Secretary may approved by a 2⁄3 vote of present audit shall include an examination of approve supplemental assessments, but members. the receipt of income and the no combination of assessment and (b) In the event that a producer or disbursement of all funds. The Board supplemental assessments may exceed signatory handler member of the Board staff shall provide the Secretary with a the cap established in paragraph (c) of and their alternate are unable to attend copy of all audits and shall make copies this section. the meeting, the absent member or the of such audits available for examination (c) Based on the recommendation of Board may designate any other alternate at the office of the Board; Provided, That the Board, or other available data, the from the same zone and group all confidential information is treated Secretary may change or modify the (signatory handler, producer) who is pursuant to § 970.81; base rate assessment. The assessment present at the meeting to serve in the (g) To investigate the production, shall be set at the lowest rate practical member’s place. handling, and manufacturing of leafy to carry out the objectives of this part. (c) The Board shall give to the green vegetables and to assemble data in The assessment rate shall not exceed Secretary the same notice of each connection therewith; $0.05 per 24-pound carton or equivalent meeting that is given to the members of (h) To establish subcommittees to aid of leafy green vegetables. the Board. the Board in the performance of its (d) Assessments not paid by a (d) The Board may vote by telephone duties under this part; or other means of communication, and (i) To collaborate with existing State signatory first handler within a any votes so cast shall be confirmed boards, commissions, and governing prescribed period of time may be subject promptly in writing: Provided, That, if bodies of State agreements through to an interest or late payment charge, or an assembled meeting is held, all memoranda of understanding to affect both. The period of time, rate of interest, members present shall cast votes in the purposes of this part; and late payment charge may be person. A videoconference shall be (j) To recommend, after consultation recommended by the Board and considered an assembled meeting and with the Technical Review Committee, approved by the Secretary. all votes shall be considered as cast in for approval of the Secretary audit (e) In order to provide funds for the person. metrics as provided for in § 970.67; administration of this part, the Board (k) To act as intermediary between the may accept, but not require, advance § 970.50 Powers. Secretary and any signatory handler payments of assessments, which shall The Board shall have the following with respect to the operations of this be credited toward assessments levied powers: part; and against such signatory first handler (a) To administer this part in (l) To furnish such available during the crop year. The Board may accordance with its terms and information as may be deemed pertinent also borrow money, subject to approval provisions; or as requested by the Secretary. by the Secretary, for such purposes (b) To make such rules and when assessment and reserve funds are Expenses and Assessments regulations, with the approval of the not sufficient to cover Board expenses. Secretary, as may be necessary to § 970.55 Expenses. § 970.57 Accounting. effectuate the terms and provisions of The Board is authorized to incur such this part; expenses as the Secretary finds are If, at the end of a crop year, the (c) To receive, investigate, and report reasonable for the maintenance and assessments collected are in excess of to the Secretary complaints of violations functioning of the Board during each expenses incurred, the Board, with the of the provisions of this part; and crop year, including the payment of approval of the Secretary, may carry (d) To recommend to the Secretary over such excess into subsequent crop amendments to the part. audit fees, activities provided for under § 970.75, and for such other purposes as years as an operating monetary reserve, § 970.51 Duties. the Secretary may, pursuant to the except that total funds already in such The Board shall have, among others, provisions of this part, determine to be reserve shall not exceed approximately the following duties: appropriate. Such expenses shall be two (2) crop years’ budgeted expenses. (a) To select from among its members paid from assessments received Funds in such reserve shall be available a chairperson and such other officers as pursuant to § 970.56 and other funds for use by the Board for expenses may be necessary, and to define the available to the Board. authorized pursuant to § 970.55 and duties of such officers; § 970.75, and to cover necessary (b) To adopt such bylaws for the § 970.56 Assessments. expenses of liquidation in the event of conduct of its business as it may deem (a) Each signatory first handler shall termination of this part. If any such advisable; be responsible for paying the Board excess is not retained in a reserve, each (c) To keep minutes, books, and such handler’s pro-rata share of the signatory handler entitled to a records which clearly reflect all the acts Board’s expenses authorized by the proportionate refund shall be credited and transactions of the Board, Secretary for each crop year. The with such refund against the operations committees, and subcommittees, and payment of assessments for the of the following crop year, or be paid these shall be subject to examination by maintenance and functioning of the such refund. Board, as described in § 970.55, may be the Secretary at any time; § 970.58 Contributions. (d) To appoint such employees or required under this part throughout the agents as it may deem necessary, and to period it is in effect irrespective of The Board may accept voluntary determine the compensation and define whether particular provisions thereof contributions but these shall only be the duties of each; are suspended or become inoperative. used to pay expenses incurred pursuant (e) To submit a budget to the (b) Based upon recommendation of to § 970.75. Such contributions shall be Secretary for each crop year; the Board, or other available data, the free from any encumbrances by the (f) To cause its books to be audited by Secretary shall fix a base rate of donor and the Board shall retain a certified public accountant at least assessment for all leafy green vegetables complete control of their use.

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Duties and Responsibilities of Signatory recommend audit metrics to the years to ensure that they continually Handlers Secretary for approval. reflect the best leafy green vegetable (a) GAPs audit metrics. Audit metrics industry practices, scientific § 970.65 Signatory handlers. for GAPs may include verification of information, and industry knowledge. No signatory handler to this part shall process controls related but not limited handle leafy green vegetables for human to: Water quality, soil amendments, § 970.68 Traceability. consumption unless such are verified as machine harvest, hand harvest (a) The traceability of leafy green meeting the verification audit (including direct contact with soil vegetables by signatory handlers shall provisions of this part. Such verification during harvest), transfer of human be established at production, handling, shall take the form of an official audit pathogens by field workers, field manufacturing, and distribution. conducted by the Inspection Service sanitation, equipment-facilitated cross (b) Signatory handlers shall have the pursuant to § 970.66. contamination, flooding, water usage to ability to track their leafy green § 970.66 Verification audits. prevent dehydration, and production vegetables from their supplier(s) to their location concerns, including climatic customer(s) and shall have in place (a) GAPs audits. (1) Signatory conditions and environment, handlers shall ensure that any leafy systems and procedures that allow for encroachment of animals of significant this information to be made available green vegetables handled by a handler’s risk, and urban settings. facilities have been subject to GAPs during an audit by the Inspection (b) GHPs and GMPs audit metrics. Service. audits conducted by the Inspection Audit metrics for GHPs and GMPS may Service. Such audits shall verify that the include verification of process controls (c) Documents necessary for leafy green vegetables were produced related but not limited to: verification shall be maintained for two under auditable conditions that meet (1) Post-harvest handling processes: years. production and harvest guidelines Cooling, water, reuse of field containers, § 970.69 Official certification mark. referred to in § 970.11 and any bulk-bin modified atmosphere process, applicable audit metrics under § 970.67. condition and sanitation of (a) Any registered certified mark (2) No signatory handler subject to the transportation vehicles, and employee developed under this part are the provisions of this part shall receive leafy hygiene. property of the United States green vegetables produced outside the (2) Handling and manufacturing Government as represented by the Board production area that have not been processes: Wash water, wash system and shall inure to the benefit of the subject to GAPs audits conducted by the capacity, bulk-bin modified atmosphere Board. This mark shall be used in Inspection Service. Such audits shall process, condition and sanitation of accordance with this section and verify that such product was produced transportation vehicles, employee consistent with the mark’s registration. under auditable conditions that meet hygiene, labeling of Raw Agricultural (b) The Board may license signatory production and harvest requirements Commodity versus ready-to-eat handlers to affix the official certification referred to in § 970.11 and in applicable products, and finished product mark to bills of lading or manifests, or audit metrics under § 970.67. packaging. any other such uses recommended by (b) GHPs or GMPs audits. (1) All (3) Distribution handling processes: the Board and approved by the signatory handlers shall be subject to Condition and sanitation of Secretary to carry out the purpose of audits. Such audits shall verify that transportation vehicles, condition and this part, Provided, that such mark may such handlers operate under auditable sanitation of distribution and cooler not be used on consumer packages. The conditions that meet guidelines facilities, and temperature measurement use of the official certification mark provided for in the GHPs or GMPs of product. shall be subject to the verification, referred to in § 970.11 and § 970.13 and (c) Critical limits for process controls suspension, or revocation requirements in applicable audit metrics under for each step or point identified in of this part. § 970.67. GAPs, GHPs, or GMPs audit metrics (c) A signatory handler’s compliance (2) No signatory handlers subject to may be recommended by the Board, with the regulations under this part is the provisions of this part shall receive after consultation with the Technical a condition precedent and subsequent to leafy green vegetables from handlers Review Committee, for approval of the the signatory handler’s entitlement to outside the production area that have Secretary, or may be developed by use the official certification mark. not been subject to GHPs or GMPs USDA. audits conducted by the Inspection (d) Technical Review Committee § 970.70 Administrative review of audits. Service. Such audits shall verify that the recommendations, including critical (a) Any financially interested person leafy green vegetables were produced limits, shall incorporate current leafy may request an administrative review of under auditable conditions that meet green vegetable industry production, an audit if it is believed that the original production and harvest guidelines harvest and handling technologies, and audit is in error. referred to in § 970.11 and applicable be based on scientific practices. audit metrics provided for in § 970.67. (e) Audit metrics may be developed (b) Any signatory handler denied the (c) Audits shall be conducted on a and recommended to accommodate use of the official certification mark may regular schedule that ensures every differences in production, harvest, and request an administrative review of an signatory handler is audited at least handling environments of different audit if it is believed that a material fact once a crop year. In addition, random regions and of different leafy green of the original audit was misinterpreted. unannounced audits of signatory vegetables. (c) Administrative reviews will be handlers and associated producers shall (f) After consultation with the conducted in accordance with the be performed during the production Technical Review Committee, the Board USDA audit verification procedures for season in each zone. may, at any time, recommend changes any audit program in effect under this to audit metrics for approval by the part. The person requesting the review § 970.67 Audit metrics. Secretary. shall pay for the cost of the review. The After consultation with the Technical (g) The Board shall review audit review results shall be issued to the Review Committee, the Board may metrics a minimum of once every three person making the request.

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§ 970.71 Modification, suspension, or maintained for at least two years after (3) Fails to successfully pass any audit termination of regulations. the end of the crop year of their conducted under this part, or fails to (a) In the event that the Board, at any applicability. Such recordkeeping shall take appropriate verifiable corrective time, finds that any regulations issued be sufficient to document and action to address non-conformities; under this part should be modified or substantiate the signatory handler (4) Ships or places into the current of suspended, it shall, pursuant to compliance with this part. commerce leafy green vegetables for § 970.49, so recommend to the human consumption that fail to meet Secretary. § 970.81 Confidential information. requirements under this part pursuant (b) Whenever the Secretary finds from All reports and information submitted to §§ 970.66 and 970.67; the recommendations and information by signatory handlers pursuant to the (5) Comingles leafy green vegetables submitted by the Board or from other provisions of this part shall be received that fail to meet the requirements of this available information, that any by, and at all times be in the custody of, part with leafy green vegetables and regulations issued under this part employees or authorized agents of the ships the comingled lot for human should be modified, suspended, or Board. No such employees or authorized consumption; terminated in order to effectuate the agents shall disclose to any person, (6) Fails to maintain and provide declared policy of the Act, the Secretary other than the Secretary upon request access to records pursuant to § 970.80; shall modify, suspend or terminate such therefore, data, or information obtained or provisions. If the Secretary finds that a or extracted from such reports and (7) Otherwise violates any of the regulation obstructs or does not tend to information which might affect the trade provisions of this part. effectuate the declared policy of the Act, position, financial condition, or (b) Any lot, or portion thereof, of leafy the Secretary shall suspend or terminate business operation of the particular green vegetables that is deemed to be an such regulation. signatory handler from whom received: immediate threat to public health by Provided, That such data and Inspection Service staff during the § 970.72 Exemptions. information may be combined and made course of an audit shall be reported by With the approval of the Secretary, available in the form of general reports USDA to appropriate health officials. the Board may recommend rules, in which the identities of the individual (c) Failure to comply with the regulations, and safeguards that exempt persons furnishing the information is provisions of this part may result in leafy green vegetables from any or all not disclosed. additional remedies or penalties. requirements pursuant to this part. The Miscellaneous Board may require reports or § 970.82 Verification of reports. certifications, or impose other (a) For the purpose of checking and § 970.85 Effective time. conditions as are necessary to ensure verifying reports filed by signatory The provisions of this part, as well as that such exempted leafy green handlers, the Board, through its any amendments, shall continue in vegetables are handled only as authorized agents or employees, and the force and effect until modified, authorized. Secretary shall have access to any suspended, or terminated. signatory handler’s premises during Research and Development regular business hours, and shall be § 970.86 Rights of the Secretary. § 970.75 Research, development, and permitted at any such time to: Members and alternates of the Board, education. (1) Examine such premises and any committees, subcommittees, and any The Board, with the approval of the leafy green vegetables held by such agents, employees, or representatives Secretary, may establish or provide for signatory handler, and any and all thereof, shall be subject to removal or the establishment of research, including records of the signatory handler with suspension by the Secretary at any time. market research, related to production, respect to such signatory handler’s Each and every decision, determination, handling, and manufacturing leafy green acquisition, sales, uses and shipments or other act of the Board shall be subject vegetables, developments projects, and thereof; and to the continuing right of the Secretary educational and outreach programs, (2) Examine any and all records of to disapprove of the same at any time. designed to assist, improve, or promote such signatory handler with respect to Upon such disapproval, the the efficient adoption, implementation, activities carried out pursuant to disapproved action of the Board shall be and administration of this part. The § 970.66. deemed null and void. (b) Each signatory handler shall expenses of such projects shall be furnish all labor and equipment § 970.87 Personal liability. budgeted and paid from funds collected necessary. No member or alternate member of pursuant to §§ 970.56 and 970.58. the Board or the committees, and no Reports and Records § 970.83 Compliance. employee or agent of the Board or the (a) A signatory handler may be subject committees, shall be held personally § 970.80 Reports and recordkeeping. to withdrawal of audit services or may responsible, either individually or (a) Each signatory handler shall report lose the privilege of the use of the jointly with others, in any way all receipts and acquisitions of all leafy official certification mark if the whatsoever, to any person for errors in green vegetables and such other reports signatory handler: judgment, mistakes, or other acts, either or information as recommended by the (1) Produces or acquires leafy green of commission or omission, as such Board and approved by the Secretary vegetables without an Inspection member, alternate, employee, or agent, that may be necessary to enable the Service audit pursuant to §§ 970.66 and except for acts of dishonesty, willful Board to carry out the provisions of this 970.67; misconduct, or gross negligence. part. (2) Fails to obtain audit on the (b) Each signatory handler shall production, handling, or manufacturing § 970.88 Separability. maintain records of all receipts and of leafy green vegetables handled If any provision of this part is acquisitions of leafy green vegetables pursuant to § 970.66 and ships such declared invalid or the applicability and all documentation relating to audit leafy green vegetables for human thereof to any person, circumstance, or reports. Such records shall be consumption; thing is held invalid, the validity of the

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remainder of this part or the discharged by the Secretary, and shall instrument as if all signatures were applicability thereof to any other account for all receipts and contained in one original. person, circumstance, or thing shall not disbursements and deliver all property be affected thereby. on hand, together with all books and § 970.97 Handler sign-up. records of the Board and the joint (a) After the effective date of this part, § 970.89 Derogation. trustees, to such persons as the there shall be an initial sign-up period Nothing contained in this part is, or Secretary may direct; and shall upon the of a length to be determined by the shall be construed to be, in derogation request of the Secretary, execute such Secretary for handlers to become or in modification of the rights of the assignments or other instruments signatories. Handlers who sign up Secretary or of the United States to necessary or appropriate to vest in such during the initial sign-up period and exercise any powers granted by the Act person full title and right to all the their corresponding producers are or otherwise, or, in accordance with funds, properties, and claims vested in eligible to serve as initial members of such powers, to act in the premises the Board or the joint trustees, pursuant the Board pursuant to § 970.42. whenever such action is deemed to this part. Any person to whom funds, (b) After the initial sign-up period advisable. property, or claims have been ends, a handler may become a signatory § 970.90 Duration of immunities. transferred or delivered by the Board or at any time by executing a counterpart to this part and delivering it to the The benefits, privileges, and the joint trustees, pursuant to this Secretary. This agreement shall take immunities conferred upon any person section, shall be subject to the same effect as to such new contracting party by virtue of this part shall cease upon obligations imposed upon the members at the time such counterpart is delivered its termination, except with respect to of said Board and upon said joint to the Secretary. The obligations, acts done under and during the trustees. benefits, privileges, and immunities existence of this part. § 970.94 Effect of termination or conferred by this agreement shall then amendment. § 970.91 Agents. be effective as to such new contracting The Secretary may, by designation in Unless otherwise expressly provided party. by the Secretary, the termination of this writing, name any officer or employee of § 970.98 Withdrawal. the United States, or name any agency part or any regulation issued pursuant or program in the USDA, to act as the thereto, or the issuance of any Release from this agreement may be Secretary’s agent or representative in amendment to either thereof, shall not: obtained under the following connection with any of the provisions of (a) Affect or waive any right, duty, conditions: this part. obligation, or liability which shall have (a) A signatory may file with the arisen or which may thereafter arise, in Board a written request for withdrawal § 970.92 Suspension or termination. connection with any provisions of this at any time, but such withdrawal will (a) The Secretary may at any time part or any regulation issued become effective at the beginning of the terminate the provisions of this part. thereunder; next crop year. (b) The Secretary shall terminate or (b) Release or extinguish any violation (b) Immediate withdrawal may be suspend the operations of any or all of of this part or any regulation issued; or effectuated when a signatory handler the provisions of this part whenever it (c) Affect or impair any rights or ceases to be a handler of leafy green is found that such provisions do not remedies of the Secretary, or of any vegetables and gives written notice tend to effectuate the declared policy of other persons, with respect to such thereof to the Board. the Act. violation. (c) A signatory handler’s withdrawal (c) The provisions of this part shall, does not relieve the signatory handler of in any event, terminate whenever the § 970.95 Amendments. any obligation incurred while a provisions of the Act authorizing them Amendments to this part may be signatory to this agreement. cease. proposed from time to time by the (d) A signatory handler that Board, or by any interested person withdraws shall not use the official § 970.93 Proceedings upon termination. affected by its provisions, including the certification mark once no longer a Upon the termination of this part, the Secretary. signatory handler. then functioning members of the Board shall continue as joint trustees, for the § 970.96 Counterparts. Dated: April 22, 2011. purpose of liquidating the affairs of the This part may be executed in multiple Rayne Pegg, Board. Action by such trustees shall counterparts and, when one counterpart Administrator, Agricultural Marketing require the concurrence of a majority of is signed by the Secretary, all such Service. said trustees. Such trustees shall counterparts shall constitute, when [FR Doc. 2011–10199 Filed 4–26–11; 4:15 pm] continue in such capacity until taken together, one and the same BILLING CODE 3410–02–P

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