[Federal Register: May 12, 2003 (Volume 68, Number 91)]
[Rules and Regulations]
[Page 25279-25281]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12my03-1]
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[[Page 25279]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 989
[Docket No. FV03-989-3 FIR]
Raisins Produced From Grapes Grown in California; Reduction in
Production Cap for 2003 Diversion Program
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: The Department of Agriculture (USDA) is adopting, as a final
rule, without change, an interim final rule reducing the production cap
for the 2003 diversion program (RDP) for Natural (sun-dried) Seedless
(NS) raisins from 2.75 to 2.0 tons per acre. The cap is specified under
the Federal marketing order for California raisins (order). The order
regulates the handling of raisins produced from grapes grown in
California and is administered locally by the Raisin Administrative
Committee (RAC).
EFFECTIVE DATE: June 11, 2003.
FOR FURTHER INFORMATION CONTACT: Maureen T. Pello, Senior Marketing
Specialist, California Marketing Field Office, Marketing Order
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 2202
Monterey Street, suite 102B, Fresno, California 93721; telephone: (559)
487-5901, Fax: (559) 487-5906; or George Kelhart, Technical Advisor,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC
20250-0237; telephone: (202) 720-2491, Fax: (202) 720-8938.
Small businesses may request information on complying with this
regulation by contacting Jay Guerber, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence
Avenue SW., STOP 0237, Washington, DC 20250-0237; telephone: (202) 720-
2491, Fax: (202) 720-8938, or E-mail: Jay.Guerber@usda.gov.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing
Agreement and Order No. 989 (7 CFR part 989), both as amended,
regulating the handling of raisins produced from grapes grown in
California, hereinafter referred to as the ``order.'' The order is
effective under the Agricultural Marketing Agreement Act of 1937, as
amended (7 U.S.C. 601-674), hereinafter referred to as the ``Act.''
USDA is issuing this rule in conformance with Executive Order
12866.
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. This rule is not intended to have retroactive effect.
This rule will not preempt any State or local laws, or policies, unless
they present an irreconcilable conflict with this rule.
The Act provides that administrative proceedings must be exhausted
before parties may file suit in court. Under section 608c(15)(A) of the
Act, any handler subject to an order may file with USDA a petition
stating that the order, any provision of the order, or any obligation
imposed in connection with the order is not in accordance with law and
request a modification of the order or to be exempted therefrom. Such
handler is afforded the opportunity for a hearing on the petition.
After the hearing USDA would rule on the petition. The Act provides
that the district court of the United States in any district in which
the handler is an inhabitant, or has his or her principal place of
business, has jurisdiction to review USDA's ruling on the petition,
provided an action is filed not later than 20 days after the date of
the entry of the ruling.
This final rule reduces the production cap for the 2003 RDP for NS
raisins from 2.75 to 2.0 tons per acre. The cap is specified in the
order. Under a RDP, producers receive certificates from the RAC for
curtailing their production to reduce burdensome supplies. The
certificates represent diverted tonnage. Producers sell the
certificates to handlers who, in turn, redeem the certificates with the
RAC for raisins from the prior year's reserve pool. The production cap
limits the yield per acre that a producer can claim in a RDP. Reducing
the cap for the 2003 RDP is expected to bring the figure in line with
anticipated 2003 crop yields. This action was recommended by the RAC at
a meeting on January 29, 2003.
Volume Regulation Provisions
The order provides authority for volume regulation designed to
promote orderly marketing conditions, stabilize prices and supplies,
and improve producer returns. When volume regulation is in effect, a
certain percentage of the California raisin crop may be sold by
handlers to any market (free tonnage) while the remaining percentage
must be held by handlers in a reserve pool (reserve) for the account of
the RAC. Reserve raisins are disposed of through various programs
authorized under the order. For example, reserve raisins may be sold by
the RAC to handlers for free use or to replace part of the free tonnage
they exported; carried over as a hedge against a short crop the
following year; or may be disposed of in other outlets not competitive
with those for free tonnage raisins, such as government purchase,
distilleries, or animal feed. Net proceeds from sales of reserve
raisins are ultimately distributed to producers.
Raisin Diversion Program
The RDP is another program concerning reserve raisins authorized
under the order and may be used as a means for bringing supplies into
closer balance with market needs. Authority for the program is provided
in Sec. 989.56 of the order, and additional procedures are specified
in Sec. 989.156 of the order's administrative rules and regulations.
Pursuant to these sections, the RAC must meet each crop year to
review raisin data, including information on production, supplies,
market demand, and inventories. If the RAC determines that the
available supply of raisins, including those in the reserve pool,
exceeds projected market needs, it can decide to implement a diversion
program, and announce the amount of tonnage eligible for diversion
during the subsequent crop year. Producers who wish to participate in
the RDP must submit an application to the RAC. Approved producers
curtail their production by vine removal or some other means
established by the RAC. Such producers receive a certificate from the
RAC that represents the quantity of raisins diverted. Producers
[[Page 25280]]
sell these certificates to handlers who pay producers for the free
tonnage applicable to the diversion certificate minus the established
harvest cost for the diverted tonnage. Handlers redeem the certificates
by presenting them to the RAC and paying an amount equal to the
established harvest cost plus payment for receiving, storing,
fumigating, handling, and inspecting the tonnage represented on the
certificate. The RAC then gives the handler raisins from the prior
year's reserve pool in an amount equal to the tonnage represented on
the diversion certificate. The new crop year's volume regulation
percentages are applied to the diversion tonnage acquired by the
handler (as if the handler had bought raisins directly from a
producer).
Production Cap
Section 989.56(a) of the order specifies a production cap of 2.75
tons per acre for any production unit of a producer approved for
participation in a RDP. The RAC may recommend, subject to approval by
USDA, reducing the 2.75 ton per acre production cap. The production cap
limits the yield that a producer can claim. Producers who historically
produce yields above the production cap can choose to produce a crop
rather than participate in the diversion program. No producer is
required to participate in a RDP.
Pursuant to Sec. 989.156, producers who wish to participate in a
program must submit an application to the RAC. Producers must specify,
among other things, the raisin production and the acreage covered by
the application. RAC staff verifies producers' production claims using
handler acquisition reports and other available information. However, a
producer could misrepresent production by claiming that some raisins
produced on one ranch were produced on another, and use an inflated
yield on the RDP application. Thus, the production cap limits the
amount of raisins for which a producer participating in a RDP may be
credited, and protects the program from overstated yields.
RAC Recommendation
The RAC met on January 29, 2003, and recommended allocating 35,000
tons of 2002 NS reserve raisins to a 2003 RDP. The program will be
limited to vine removal for complete production units, with a 5-year
moratorium on replanting raisin-variety grapes. Damages of $700 per ton
of creditable fruit weight represented on the RDP certificate will be
imposed on producers who replant prior to July 31, 2008. Harvest costs
were established at $340 per ton. The RAC also recommended reducing the
production cap from 2.75 to 2.0 tons per acre. With this year's large
crop of about 373,000 tons, the RAC believes that the grape vines will
produce a smaller crop next year. Thus, the RAC recommended reducing
the cap from 2.75 to 2.0 tons per acre to reflect anticipated 2003 crop
yields.
The RAC's RDP recommendation passed with 24 members in favor and 21
opposed. Those opposed expressed concern with the RDP as a whole, not
the production cap. They believe that many producers have already
pulled out their vines, and that attrition should occur naturally in
the industry. Concern also was expressed that the tonnage allocated to
the diversion program would be added to next year's crop estimate,
thereby reducing next year's free tonnage percentage and producer
returns. Those in favor of the program contend that, with a 2002 NS
crop estimated at about 373,000 tons (deliveries through the week
ending March 29, 2003, are at 387,780 tons), and a computed trade
demand (comparable to market needs) of 196,185 tons, there would be
176,815 tons of reserve raisins. A diversion program is one avenue
authorized under the order to utilize these reserve raisins.
On February 7, 2003, USDA approved the requirements of the RDP
recommended by the RAC, with the exception of the production cap, which
required informal rulemaking. This rule continues in effect an interim
final rule implementing the RAC's recommendation to reduce the 2003 RDP
production cap from 2.75 to 2.0 tons per acre. Paragraph (t) in Sec.
989.156 of the order's rules and regulations was revised accordingly.
Final Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), the Agricultural Marketing Service (AMS) has considered the
economic impact of this action on small entities. Accordingly, AMS has
prepared this final regulatory flexibility analysis.
The purpose of the RFA is to fit regulatory actions to the scale of
business subject to such actions in order that small businesses will
not be unduly or disproportionately burdened. Marketing orders issued
pursuant to the Act, and rules issued thereunder, are unique in that
they are brought about through group action of essentially small
entities acting on their own behalf. Thus, both statutes have small
entity orientation and compatibility.
There are approximately 20 handlers of California raisins who are
subject to regulation under the order and approximately 4,500 raisin
producers in the regulated area. Small agricultural firms are defined
by the Small Business Administration (13 CFR 121.201) as those having
annual receipts of less that $5,000,000, and small agricultural
producers are defined as those having annual receipts of less than
$750,000. Thirteen of the 20 handlers subject to regulation have annual
sales estimated to be at least $5,000,000, and the remaining 7 handlers
have sales less than $5,000,000. No more than 7 handlers, and a
majority of producers, of California raisins may be classified as small
entities.
This rule continues to revise Sec. 989.156(t) of the order's rules
and regulations regarding the RDP. Authority for this action is
provided in Sec. 989.56(a) of the order. Under a RDP, producers
receive certificates from the RAC for curtailing their production to
reduce burdensome supplies. The certificates represent diverted
tonnage. Producers sell the certificates to handlers who, in turn,
redeem the certificates with the RAC for raisins from the prior year's
reserve pool. The order specifies a production cap limiting the yield
per acre that a producer can claim in a RDP.
This rule continues to reduce the cap from 2.75 to 2.0 tons per
acre to reflect next year's estimated yield. Regarding the impact of
this action on affected entities, producers who participate in the 2003
RDP will nonetheless have the opportunity to earn income for not
harvesting a 2003-04 crop. Producers who sell the certificates to
handlers next fall will be paid for the free tonnage applicable to the
diversion certificate minus the harvest cost for the diverted tonnage.
Applicable harvest costs for the 2003 RDP were established by the RAC
at $340 per ton.
Reducing the production cap will have little impact on raisin
handlers. Handlers will pay producers for the free tonnage applicable
to the diversion certificate minus the $340 per ton harvest cost.
Handlers will redeem the certificates for 2002-03 crop NS reserve
raisins and pay the RAC the $340 per ton harvest cost plus payment for
receiving, storing, fumigating, handling (currently totaling $46 per
ton), and inspecting (currently $9.00 per ton) the tonnage represented
on the certificate. Reducing the production cap will have little impact
on handler payments for reserve raisins under the 2003 RDP.
Alternatives to the recommended action included leaving the
production cap at 2.75 tons per acre or reducing it to another figure
besides 2.0 tons per acre. However, the majority of RAC members believe
that a cap of 2.0 tons
[[Page 25281]]
per acre will more accurately reflect anticipated 2003 crop yields.
This rule imposes no additional reporting or recordkeeping
requirements on either small or large raisin handlers. In accordance
with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the
information collection requirement referred to in this rule (i.e., the
application) has been approved by the Office of Management and Budget
(OMB) under OMB Control No. 0581-0178. As with all Federal marketing
order programs, reports and forms are periodically reviewed to reduce
information requirements and duplication by industry and public sector
agencies. Finally, USDA has not identified any relevant Federal rules
that duplicate, overlap, or conflict with this rule.
Further, the RAC's meeting on January 29, 2003, and the RAC's
Administrative Issues Subcommittee meeting on January 24, 2003, when
this action was deliberated were both public meetings widely publicized
throughout the raisin industry. All interested persons were invited to
attend the meetings and participate in the industry's deliberations.
An interim final rule concerning this action was published in the
Federal Register on March 19, 2003 (68 FR 13219). Copies of the rule
were mailed by RAC staff to all RAC members and alternates, the Raisin
Bargaining Association, handlers and dehydrators. In addition, the rule
was made available through the Internet by the Office of the Federal
Register and USDA. That rule provided for a 15-day comment period that
ended on April 3, 2003. No comments were received.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/fv/moab.html.
Any questions about the compliance
guide should be sent to Jay Guerber at the previously mentioned address
in the FOR FURTHER INFORMATION CONTACT section.
After consideration of all relevant material presented, including
the information and recommendation submitted by the RAC and other
available information, it is found that finalizing the interim final
rule, without change, as published in the Federal Register (68 FR
13219, March 19, 2003) will tend to effectuate the declared policy of
the Act.
List of Subjects in 7 CFR Part 989
Grapes, Marketing agreements, Raisins, Reporting and recordkeeping
requirements.
PART 989--RAISINS PRODUCED FROM GRAPES GROWN IN CALIFORNIA
0
Accordingly, the interim final rule amending 7 CFR part 989 which was
published at 68 FR 13219 on March 19, 2003, is adopted as a final rule
without change.
Dated: May 6, 2003.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 03-11704 Filed 5-9-03; 8:45 am]
BILLING CODE 3410-02-P
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