PROPOSED RULES
Original Notice.
Preproposal statement of inquiry was filed as WSR 00-05-100.
Title of Rule: Red raspberry grades and standards.
Purpose: To (1) establish a grade and standards for fresh red raspberries that are destined for freezing, puree, juice stock and other processing uses; (2) establish standards for red raspberry puree stock and juice stock red raspberries; (3) establish container marking requirements for red raspberries; and (4) specify how red raspberries may be used, processed and sold. Red raspberries destined for fresh market are exempt from this rule.
Statutory Authority for Adoption: Chapters 15.17 and 69.04 RCW.
Statutory authority for WAC 16-143-010, 16-143-020, 16-143-030 and 16-143-070 is chapters 15.17 and 69.04 RCW; WAC 16-143-030, 16-143-040 and 16-143-050 is chapter 15.17 RCW; and WAC 16-143-060, 16-143-070, 16-143-080, 16-143-090, 16-143-100 and 16-143-110 is chapter 69.04 RCW.
Statute Being Implemented: Chapters 15.17 and 69.04 RCW.
Summary: See Explanation of Rule below.
Name of Agency Personnel Responsible for Drafting: Dannie McQueen, P.O. Box 42560, Olympia, WA 98504-2560, (360) 902-1809; Implementation and Enforcement: Mike Donovan and Jim Quigley, P.O. Box 42560, Olympia, WA 98504-2560, (360) 902-1883.
Name of Proponent: The Department of Agriculture received request for proposed rule making from the Red Raspberry Commission, private.
Rule is not necessitated by federal law, federal or state court decision.
Explanation of Rule, its Purpose, and Anticipated Effects: If adopted, the rule will institute new approaches for growers, processors, concentrators ... anyone in the business of dealing with red raspberries destined for freezing, puree, juice stock and other processing uses.
Red raspberries destined for processing would be required to meet grade standards and put in the appropriately marked containers. The red raspberries would require inspection at a licensed food processing facility. There are no reporting or record-keeping requirements.
The red raspberries meeting the grading standards for Washington No. 1 processing grade red raspberries are to be in containers that are marked with the words "Washington No. 1 processing grade red raspberries." Washington No. 1 processing grade red raspberries may be used for straight pack, IQF, puree stock, puree concentrate, juice, juice concentrate or any other type of use. Raspberries that do not meet grade or are ungraded are regarded as unclassified and are required to be in containers marked "Juice Stock Red Raspberries." Unclassified fruit may be used only for processing into wine, ultra-filtered or pasteurized juice products, or juice concentrate filtered to remove foreign material including mold.
Proposal does not change existing rules.
A small business economic impact statement has been prepared under chapter 19.85 RCW.
With the exception of those small raspberry growers that sell fresh market fruit, most raspberries are harvested with harvesting machines into flats or barrels (drums). The processor normally provides the grower containers for the fresh raspberries that are transported to the processor. Fruit that is picked for the making of puree or for IQF packs are sorted into flats using manual labor to remove foreign material or poor quality berries or fruit is picked straight into drums which is then transported to the processor for juice.
It has been commonly understood in the past by the industry that only the higher quality berries picked into flats were of puree quality and used for puree products. Growers receive a premium for those berries. Traditionally, although not required by state or federal regulation, processors would use the fruit harvested into drums for the production of juice. Over the past years, processors began using berries harvested into drums for puree, therefore, using what is considered by some to be a lower quality fruit for the making of puree. The concern by some growers is that this practice in the long term will reduce the quality of raspberry products produced from Washington state raspberries, and thereby, affect Washington raspberry grower's ability to compete with raspberry production in other domestic or foreign markets.
The purpose of the proposed rule is to (1) establish a grade and standards for fresh red raspberries that are destined for freezing, puree, juice stock and other processing uses; (2) establish standards of identify for red raspberry puree stock and juice stock red raspberries; (3) establish container marking requirements for red raspberries; and (4) specify how red raspberries may be used, processed and sold.
II. Summary of Proposed Rule: Red raspberries destined for processing would be required to meet grade standards and put in the appropriately marked containers. The red raspberries would require inspection at a licensed food processing facility. There are no reporting or record-keeping requirements.
The red raspberries meeting the grading standards for Washington No. 1 processing grade red raspberries are to be in containers that are marked with the words "Washington No. 1 processing grade Red Raspberries." Washington No. 1 processing grade red raspberries may be used for straight pack, IQF, puree stock, puree concentrate, juice, juice concentrate or any other type of use. Raspberries that do not meet grade or are ungraded are regarded as unclassified and are required to be in containers marked "Juice Stock Red Raspberries." Unclassified fruit may be used only for processing into wine, ultra-filtered or pasteurized juice products, or juice concentrate filtered to remove foreign material including mold.
III. Statutory Authorities for Promulgation of Proposed Rule: Chapter 15.17 RCW, Standards of grades and pack, grants the Washington State Department of Agriculture the authority to establish grades for fresh fruits and vegetables. Chapter 69.04 RCW, the Food, Drugs, Cosmetics, and Poisons Act, allows the Washington State Department of Agriculture to establish oversight of product used under its authority to protect consumers from adulterated or misbranded food, or food which may potentially injure consumers by product use.
IV. Potentially Affected Industries: 1. Growers who sell red raspberries to processors. The Standard Industrial Classification (SIC) code 0171 was used to determine the number of berry growers in the state. Based on additional employment information approximately two-hundred nineteen (76%) of the two-hundred eighty-eight berry growers grow red raspberries. The businesses include the one-hundred seventy-three growers in the Red Raspberry Commission and an estimated maximum of forty-six raspberry growers outside the commission as based on size or location (eastern Washington). Please note a number of the estimated forty-two smallest growers may only sell fresh market and are thus exempt from this rule. The other four growers are assumed to be in eastern Washington and thus not members of the commission. The eastern Washington growers could be any farm size. However, there is no known large acreage of raspberries in the eastern portion of the state.
2. Packer processors. There are approximately forty-seven large and small processors in Washington. The processors are roughly evenly split between large and small businesses (52% to 48%). Based on the information provided by the agency and SIC code 2033 and 2037 there is no way to tell how many of these are packer processors. However, there are reported by Red Raspberry Commission members to be eighteen packer processors. All are also growers. Whatcom County is reported to have twelve processor packers.
3. Concentrator processors and ingredient users. Since eighteen of the forty-seven large and small processors are packer processors the remaining twenty-nine are assumed to be concentrators and ingredient users. There are ten or fewer concentrators in the state. All are large businesses. The remaining nineteen businesses are assumed to be ingredient users. The ingredient user category includes both large businesses and very small home-based businesses such as specialty jam makers.
V. Grower Economic Impacts - Assumptions, Costs, Revenue: Grower Assumptions:
1. There are eight thousand seven hundred acres in red raspberry production in Washington.
2. There are two hundred fifty harvesting machines, one per thirty acres for harvesting into flats, one per forty acres for harvesting into barrels.
3. Harvest lasts approximately six weeks. Puree and the highest quality berries are harvested during the first four weeks of the harvest
4. The average raspberry production is eight thousand pounds per acre (4 tons).
5. The average employee cost, with benefits, is $7.50 per hour.
6. The average harvest day worked is twelve hours per day. Crews work seven days per week.
7. Packer processors supply containers for harvest. Growers supply harvesters, trucks and staff.
8. Growers do not label flats or other containers.
9. Growers will receive more for higher grades of berries. A premium of ten to fifteen cents per pound is received for IQF, five to eight cents per pound is given for berries suitable for puree.
10. At least eighteen growers are also packer processors, Whatcom County has the most grower/packer processors with twelve.
11. At least 97% of the growers are small businesses (fewer than fifty employees).
Grower assumptions specific to the proposed rule:
| • | 4% of the acreage will make changes to harvest higher quality fruit. This will cause the lease or purchase of twelve additional harvesters and hire staff to run those harvesters. Most growers lease harvesters at an average cost of $16,000 per year. The staff to operate each of the harvesters for 6 weeks is estimated to be $11,340 ($7.50 x 12 hours x 7 days x 6 weeks x 3 employees). The total annual leasing cost and additional staff for new harvesters is $328,080. |
| • | 15% of the currently owned harvesters (thirty-eight harvesters) will require additional staff to produce a higher grade of berries for the puree market. The season will be four weeks for the higher grade of berries. One employee will be needed on the machine and an additional 0.5 employee will be needed per machine for stacking and transporting. The increased staff cost will be $143,640 and is based on thirty-eight harvesters x 1.5 employees x $7.50 x 12 hours x 7 days x 4 weeks. |
| • | The higher grade of berries that are sold for puree production will receive a premium of 6 cents per pound. Total production that would be eligible for this premium is 10 million pounds. The additional revenue from the premium will be $600,000 for the growers. |
| • | Container and labeling costs will not be borne by the growers. |
| • | While it could be argued the demand may decline for puree stock because of higher revenues to the grower, it is assumed the demand will remain the same. |
The grower of red raspberries is not assumed to experience a loss of sales or revenue from the proposed rule. The demand for raspberry products has been steady. It is likely that the grower will experience an increase in the value of the berries that are graded No. 1 because the rule prohibits the use of juice stock berries in puree. Depending upon the demand for berries suitable for puree the grower is estimated to receive a premium of six cents per pound for their graded berries. Based on the estimate of ten million pounds of puree suitable berries the return to growers would be $600,000.
The above economic impact is in terms of the total impact spread across all growers. Under the proposed rules a grower may choose to harvest into drums and sell the entire crop as juice stock. The maximum impact scenario to one individual grower, a small business that is not a processor, follows: The greatest impact is based on the grower that has forty-five acres of raspberries. One harvester can harvest this acreage, if harvesting for juice berries. However, switching to puree would require that another harvester be leased at $16,000 and a harvester crew hired for $11,340. An additional person would also be needed for their original harvester at $2,520 for the four weeks of early harvest. The total costs to this individual grower would be $29,860. The total additional revenue for their acreage, assuming all berries had been previously sold for juice, is $14,256. This is based on an estimated 5,280 pounds of berries per acre (four weeks of harvest) sold as puree berries with a premium of six cents per pound. This grower with forty-five acres is not likely to switch to producing for the puree market. Other growers with excess harvester capacity, for instance two harvesters for fifty acres, are more likely to switch to the puree market.
VI. Packer Processor Economic Impacts - Assumptions, Costs, Revenue: Packer Processors Assumptions:
1. Containers are owned by the packer processors and are given to the growers for harvesting. The cost per flat is $3.50.
2. Labeling is already done at the processing plant. The labels are computer generated and labeling changes to add "grade" are simple to make.
3. Lots of varying quality of fruit are already tracked by packer processors.
4. A processing line to handle barrels and additional flats would cost $50,000 (ten years for depreciation). Each line needs eight staff at $7.50 per hour for four weeks, seven days per week, twelve hours per day for a cost total of $20,160 per line.
5. An additional ten million pounds of puree quality fruit would be processed through the packer processor for sale to the concentrator.
6. All packer processors are also growers.
Packer processors assumptions specific to the proposed rule:
| • | Eight million more puree suitable berries would be picked into flats representing a 20% increase in the number of needed containers. An estimated 50,000 additional flats are needed at $3.50 per flat for a total cost of $175,000. |
| • | The increased packed puree product cost for the concentrator processor is estimated to be 6 cents per pound. The additional revenue to packer from the concentrator would total $600,000 for the 10 million pounds of berries that would be sold as puree instead of juice stock. |
| • | An increase in labor cost would be caused by the additional eight million pounds of berries picked into flats. Each line is assumed to need one additional person for four weeks. Each of the eighteen packer processors is assumed to have five lines. Therefore, the eighteen packer processors need a total of 90 additional employees. The total additional labor cost would be $226,800. These berries are included in the ten million pounds of berries that are the base for projected revenue. |
| • | Capital costs for setup of two lines to handle barrels and additional flats is $100,000 with the annual additional costs for staff of $40,320. |
| • | There are no increased labeling or lot tracking costs. |
The packer processor of red raspberries is not assumed to experience a loss of sales or revenue from the proposed rule. The demand for raspberry products has been steady. It is likely that the packer processor will experience an increase in the value of the berries that are graded No. 1 because the rule prohibits the use of juice stock berries in puree. Depending upon the demand for berries suitable for puree the packer processor is estimated to receive a premium of six cents per pound for their graded berries. Based on the estimate of ten million pounds of puree suitable berries the return to packer processors would be $600,000.
The greatest cost to an individual packer processor, assumed to be a large business, is estimated to be $82,760. This is based on paying for a new line and staff to run the line at $70,160 and additional staff for increased sorting on their other five lines at $12,600. The total revenue for this processor for one year is assumed to be $33,333. This is based on the individual packer processor's split of the ten million pounds of berries (555,555 pounds) that would switch from juice stock to puree and a premium of six cents per pound. This does not appear to be a prudent investment until depreciation across ten years for the line capital investment is considered and the assumption for the amount of berries crossing the new line increases. The new total for an assumption of 700,000 pounds of berries on the new line and factoring in depreciation show annual costs of $37,760 and revenue of $42,000.
VII. Concentrator Processor and Ingredient User Economic Impacts - Assumptions, Costs, Revenue Reduction: Concentrator Processors Assumptions:
1. Some concentrator processors currently use berries that under the proposed rule would be considered juice stock quality fruit for making puree. For instance, one company in eastern Washington uses two million pounds annually of drum harvested fruit in their puree products. The price paid for these juice berries is at least ten cents per pound less than that paid for puree stock. The total amount of berries that would be upgraded to Washington No. 1 processing grade red raspberries and suitable for puree stock is estimated at ten million pounds.
2. It is assumed that concentrator processors will pass any increased costs to the end product maker (e.g. a jam maker) who needs a specific ingredient. It is estimated that the increased cost to the end product user is twelve cents per pound for the estimated ten million pounds of puree berries that are used to make jam and other products that was sold by the grower for juice stock. The pounds of concentrated stock affected are less than ten million pounds because one ton of berries makes six hundred fifty pounds of concentrated product.
The twenty-nine concentrator processors and ingredient users such as jam makers are estimated to experience a twelve cent increase per pound in production cost for ten million pounds of berries caused by paying more for graded berries suitable for puree. Any blending of juice stock berries into graded berries would result in the blended stock being suitable only for juice. The blending of juice stock berries into puree is specifically prohibited. Some of the concentrator processors currently purchase only high quality berries that are commonly understood to be of puree quality for their puree products. These concentrator processors would have no impact from the proposed rule. The other concentrator processors that blend juice stock into puree are assumed to pass their increased puree costs for the ten million pounds of berries entirely to the ingredient users. The prohibition against using juice berries in puree is estimated to cost the ingredient users $1,200,000.
VIII. Requirements with Chapter 19.85 RCW, Regulatory Fairness Act: The Regulatory Fairness Act (chapter 19.85 RCW) requires that rules promulgated by state agencies under the Administrative Procedure Act be examined for their impact on small businesses. The purpose of the act is to ensure that rules proposed do not place a disproportionally high burden on small businesses relative to the burden they place on large businesses (reference RCW 19.85.011). A small business is defined as an independent, for-profit Washington business entity with fifty or fewer employees (RCW 19.85.020).
The act requires that proposed rules that impose "more than minor costs" on industry businesses be evaluated and, if necessary, altered to minimize their impact on small business. An analysis of compliance costs must be completed and documented in a small business economic impact statement (SBEIS) if: (1) A proposed rule meets or exceeds this "more than minor" criterion, or if (2) the Joint Administrative Rules Review Committee (JARRC) requests an SBEIS for a proposed rule. A state agency may independently decide to complete an SBEIS.
The act establishes specific analyses and necessary elements for inclusion in an SBEIS. Among other requirements, the SBEIS must include a brief description of the compliance requirements of the rule, a description of the professional services needed by small business to comply with the rule, an analysis of the compliance cost for small business, and a comparison of the compliance costs for small and large businesses.
Based upon the extent any disproportionate impact is anticipated to occur for small businesses from the proposed rule, the agency must reduce the costs on small business, where legal and feasible, in meeting the stated objective of the statutes upon which the rule is based. Mitigation can be accomplished in a number of ways, such as establishing differing compliance or reporting requirements for small businesses, clarifying or simplifying the compliance requirements for small businesses, delaying compliance timetables, exempting small businesses from any or all the rule requirements, or similar measures.
The Department of Agriculture, in order to be in compliance with the Regulatory Fairness Act, has documented its analyses on businesses herein and mitigated the impacts on small businesses, as outlined in this document.
IV.Mitigation of Impacts on Businesses both Large and Small: The growers are mostly (97.6%) small businesses and the processors are almost evenly split between small and large businesses. Since the requirements are based evenly on volume the larger the grower or processor the greater the total cost. The costs associated with compliance are, with the exception of the two new processing lines that are likely to be done by a large business, variable costs and should not result in a disproportionate impact on small businesses. Each grower will decide if the increase in revenue for their specific situation justifies the increase in cost to product berries for the puree processing market.
One way the proposed rule will be mitigated is the cost of inspection for compliance by the Washington State Department of Agriculture that is needed by growers and packer processors. The fruit and vegetable inspection program costs for this rule are based on check sampling individual growers for compliance. If the inspection costs were charged to each randomly selected individual business it would result in a disproportionate impact on the selected business, most of which are small businesses.
The Department of Agriculture proposed to the Red Raspberry Commission that, in the event the rules are adopted, the commission would enter into an interagency agreement with the department to provide inspection. The inspection costs would be borne by the commission. No individual grower or packer processor will need to pay for an individual compliance inspection. The commission already pools the assessments received from the individual growers. The pooled money will pay for the estimated $2,800 in annual inspection costs. The other processor inspections would be routine agency inspections conducted by the food safety program and thus not charged to the processor.
A copy of the statement may be obtained by writing to [Dannie McQueen, P.O. Box 42560, Olympia, WA 98504-2560,] phone (360) 902-1809, fax (360) 902-2092.
Section 201, chapter 403, Laws of 1995, does not apply to this rule adoption. The sections are not applicable to the Department of Agriculture.
Hearing Location: Whatcom County Courthouse, County council Chamber, 311 Grand Avenue, Bellingham, WA 98225, on May 10, 2000, at 10:00 a.m.
Assistance for Persons with Disabilities: Contact Lou Jones by May 1, 2000, TDD (360) 902-1996, or (360) 902-1806.
Submit Written Comments to: Dannie McQueen, Department of Agriculture, 1111 Washington Street S.E., P.O. Box 42560, Olympia, WA 98504-2560, e-mail dmcqueen@agr.wa.gov, fax (360) 902-2092, by 5:00 p.m., May 11, 2000.
Date of Intended Adoption: May 19, 2000.
April 5, 2000
William E. Brookreson
Deputy Director
OTS-3981.1
RED RASPBERRY GRADES AND STANDARDS
The purpose of this chapter is to:
(1) Establish a grade and standards for fresh red raspberries that are destined for freezing, puree, juice stock and other processing uses;
(2) Establish standards for red raspberry puree stock and juice stock red raspberries;
(3) Establish container marking requirements for red raspberries; and
(4) Specify how red raspberries may be used, processed and sold.
Red raspberries destined for fresh market are exempt from this rule.
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The following definitions apply to this chapter:
(1) "Containers" includes pails, trays, barrels, drums, tanks, transport vessels, or other bulk containers used to store or contain red raspberries intended for further processing.
(2) "Damage" means any defect or any combination of defects, which materially detract from the appearance, or the edible or marketing quality of red raspberries.
(3) "Graded" means red raspberries that have been visually inspected and determined to meet the standards set forth in WAC 16-143-030.
(4) "Juice stock red raspberries" means any red raspberries destined for the production of red raspberry juice, red raspberry juice concentrate, or any other product listed in WAC 16-143-080. Washington No. 1 processing grade red raspberries as defined in this chapter or unclassified red raspberries may be used for juice stock.
(5) "Pasteurized" means the product has been subjected to heat or other approved treatment sufficient to kill harmful microorganisms.
(6) "Serious damage" means any defect, or any combination of defects, which seriously detract from the appearance, or the edible or marketing quality of the red raspberry. Red raspberries which are badly deformed, leaky, moldy, decayed, or from which the core has not been removed shall be considered seriously damaged.
(7) "Ultra-filtration" means filtering to a very high level sufficient to remove foreign material including microorganisms and mold from the product.
(8) "Washington No. 1 processing grade red raspberries" are defined in WAC 16-143-030.
(9) "Well-colored" means that the whole surface of the red raspberry shows a color characteristic of a mature red raspberry.
(10) "Well-developed" means that the red raspberry is not misshapen because of anthracnose injury, frost injury, lack of pollination, insect injury, or other causes.
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To qualify for the Washington No. 1 processing grade, red raspberries must be washed, sorted and graded at a licensed food processing facility and must meet the following standards:
(1) The red raspberries must be well-colored and well-developed;
(2) The red raspberries must be free from cores, mold, decay, dirt, leaves, or other foreign material;
(3) The red raspberries must not be damaged by shriveling, moisture, disease, or insects;
(4) The red raspberries must not have more than eight of twenty-five fields with mold hyphae as determined by the Howard Mold Count or equivalent analysis.
(5) Not more than ten percent by volume of the red raspberries in any lot may fail to meet the requirements for Washington No. 1 processing grade because of serious damage by any cause, and not more than two percent of the ten percent may be affected by mold or decay. Individual samples may contain not more than one and one-half times this tolerance, even if the average of all the samples from the lot are within this specified tolerance.
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Red raspberries that:
(1) Fail to meet the Washington No. 1 processing grade standards; or
(2) Are not graded; or
(3) Are in unmarked containers, are considered "unclassified." The term "unclassified" means no grade has been applied to the lot.
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Marking requirements for red raspberry containers are:
(1) Washington No. 1 processing grade red raspberry containers may be marked with the name and address of the grower, packer, shipper, and must be prominently marked with the grade "Washington No. 1 Processing Grade Red Raspberries."
(2) Any combination of Washington No. 1 processing grade red raspberries and unclassified red raspberries must be in containers prominently marked "juice stock red raspberries."
(3) Unclassified red raspberries must be in containers that are prominently marked "juice stock red raspberries."
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Washington No. 1 processing grade red raspberries may be used or sold for straight pack, individually quick frozen (IQF), puree stock, puree concentrate, juice, juice concentrate, or for any other type of use.
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Red raspberry puree stock must be red raspberries that meet Washington No. 1 processing grade standards and have been graded and cleaned, washed, and sorted in a licensed food processing facility to remove harmful or foreign material.
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Product designated or marked as "juice stock red raspberries" must be used and sold only for processing into wine, ultra-filtered, or pasteurized juice products or juice concentrate filtered sufficiently to remove foreign material including mold from the product, or for distilling.
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Red raspberries designated or marked as "juice stock red raspberries" may not be sold or used to produce puree, puree concentrate or any red raspberry products other than those designated in WAC 16-143-080.
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Any red raspberries or red raspberry products that are adulterated under RCW 69.04.210, including through the deliberate addition of moldy product, or any red raspberries or red raspberry products containing unacceptable levels of filth or mold, may not be sold or processed for any purpose.
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Guidelines for the safe production of red raspberries and other agricultural products may be found in the Food and Drug Administration's Good Agricultural Practices Guidelines. This document can be obtained on request from the Washington State Department of Agriculture, Food Safety Program, P.O. Box 42560, Olympia, WA 98504-2560.
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