[Federal Register: July 9, 2003 (Volume 68, Number 131)]
[Rules and Regulations]
[Page 40754-40757]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09jy03-2]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 993
[Docket No. FV03-993-2 IFR]
Dried Prunes Produced in California; Temporary Suspension of the
Prune Reserve and the Voluntary Producer Prune Plum Diversion
Provisions
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim final rule with request for comments.
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SUMMARY: This rule suspends the prune reserve and the voluntary
producer prune plum diversion provisions in the California Dried Prune
Marketing Order (order) and the administrative rules and regulations
related to volume control restrictions for a five-year period. The
order regulates the handling of dried prunes produced in California and
is administered locally by the Prune Marketing Committee (PMC).
Suspension of these provisions will ensure that volume control
restrictions would not be implemented under these provisions. During
the five-year suspension period, the industry will have the opportunity
to determine whether these provisions should be modified, terminated,
or continue unchanged. In the absence of additional rulemaking to
modify or terminate these provisions, they would come back into effect
automatically at the end of the five-year period.
DATES: Effective August 1, 2003, through July 31, 2008. Comments
received by September 8, 2003 will be considered prior to issuance of a
final rule.
ADDRESSES: Interested persons are invited to submit written comments
concerning this rule. Comments must be sent to the Docket Clerk,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA, 1400 Independence Avenue SW., Stop 0237, Washington, DC
20250-0237; Fax: (202) 720-8938; or E-mail: moab.docketclerk@usda.gov <mailto:moab.docketclerk@usda.gov>.
All comments should reference the docket number and the date and page
number of this issue of the Federal Register and will be made available
for public inspection in the Office of the Docket Clerk during regular
business hours, or can be viewed at: http://www.ams.usda.gov/fv/moab.html <http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.ams.usda.gov/fv/moab.html>
.
FOR FURTHER INFORMATION CONTACT: Richard P. Van Diest, 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, or 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 <mailto:Jay.Guerber@usda.gov>.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing
Agreement and Order No. 993 (7 CFR part 993), both as amended,
regulating the handling of dried prunes produced 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.''
The Department of Agriculture (Department) 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, regulations, 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
[[Page 40755]]
Act, any handler subject to an order may file with USDA a petition
stating that the order, any provision of the order, or any obligation
imposed in connection with the order is not in accordance with law and
request a modification of the order or to be exempted therefrom. A
handler is afforded the opportunity for a hearing on the petition.
After the hearing, USDA would rule on the petition. The Act provides
that the district court of the United States in any district in which
the handler is an inhabitant, or has his or her principal place of
business, has jurisdiction to review USDA's ruling on the petition,
provided an action is filed not later than 20 days after the date of
the entry of the ruling.
This rule suspends for five years all provisions in the order and
administrative rules and regulations concerning the prune reserve and
voluntary producer prune plum diversion. These changes were unanimously
recommended by the PMC. This action is needed to ensure that reserve
percentages would not be established, and that a prune plum diversion
program would not be implemented pursuant to these provisions. During
the five-year suspension period, the industry will have the opportunity
to determine whether these provisions should be modified, terminated,
or remain unchanged.
Marketing Order Authority To Suspend
Section 993.90(a) states in part: ``The Secretary shall terminate
or suspend the operation of any or all of the provisions of this
subpart, whenever he/she finds that such provisions do not tend to
effectuate the declared policy of the act.''
Volume Regulation Provisions
Section 993.54 of the order provides authority for volume
regulation through establishing salable and reserve percentages of
prunes received by handlers (prune reserve). When the prune reserve is
in effect, the salable percentage of the California prune crop may be
sold to any market while the reserve percentage must be held by the
handlers for the account of the PMC. Reserve prunes may be sold to meet
either domestic or foreign trade demand or for use in outlets
noncompetitive with normal outlets for salable prunes. Net proceeds
from sales of reserve prunes are ultimately distributed to producers.
The prune reserve is designed to promote orderly marketing conditions,
stabilize prices and supplies, and improve producer returns.
Voluntary Prune Plum Diversion Program
Section 993.62 of the order authorizes a producer diversion
program, which prune producers may use when a prune reserve is
implemented. Section 993.162 of the administrative rules and
regulations specifies implementing procedures. Under the producer
diversion program, any prune producer may divert prune plums of his own
production for eligible purposes and receive a diversion certificate
from the PMC. The certificate may be submitted to any handler in lieu
of reserve prunes and the handler may apply the quantity represented by
the certificate towards his reserve obligation. Participation in this
program would reduce a producer's expenses to convert prune plums into
dried prunes that would ultimately be placed in a relatively low value
prune reserve.
Background and Action Taken
The prune reserve was last implemented in 1974 and the producer
diversion program was last used in 1971. These programs were
controversial in the 1970s and have become increasingly so since then.
Some of the independent prune handlers who are also prune producers now
oppose any regulatory marketing restrictions because they want to sell
all of the prunes they have produced. If additional tonnage is needed,
such handlers would buy prunes from other producers to meet their
market demand. In addition, if a prune reserve is implemented, it may
require these handlers to contract for additional tonnage in order to
meet their reserve obligation.
Recently in 2001, when the PMC recommended using supply control
techniques, some of the independent handlers and producers opposed the
use of these programs. Ultimately, the supply control programs were not
implemented at that time. Also, some in the industry do not support the
use of these supply control provisions because the industry has
successfully reduced crop sizes through other means.
Through industry and USDA funded tree pull programs, the industry
has removed over 18,000 acres of prune plum trees; thus reducing the
annual prune production by at least 27,000 tons of prunes over the
five-year suspension period.
During the five-year suspension period, the industry will have the
opportunity to either recommend that these provisions be terminated
through rulemaking procedures, or recommend modifications to the
provisions to make them more acceptable to all segments of the
industry. In the interim, the suspension of these provisions would
ensure that these provisions are not implemented. In the absence of any
additional action, the provisions will automatically come back into
effect at the end of the suspension period.
The PMC unanimously recommended this action at an April 3, 2003,
meeting. This interim final rule suspends Sec. Sec. 993.21d,
993.36(i), 993.54, 993.55, 993.56, 993.57, 993.58, 993.59, 993.62,
993.65 of the order, and Sec. Sec. 993.156, 993.157, 993.158, 993.159,
993.162, 993.165 and 993.172(e) of the administrative rules and
regulations in effect under the order. Portions of Sec. Sec. 993.33
and 993.41(b) of the order and portions of Sec. Sec. 993.173(a)(6),
993.173(b)(3), and 993.173(c)(1) of the administrative rules and
regulations are also suspended. These sections of the order and
administrative rules and regulations pertain to the various
requirements of the prune reserve and producer diversion programs.
Initial 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 initial regulatory flexibility analysis.
The purpose of the RFA is to fit regulatory actions to the scale of
business subject to such actions in order that small businesses will
not be unduly or disproportionately burdened. Marketing orders issued
pursuant to the Act, and rules issued thereunder, are unique in that
they are brought about through group action of essentially small
entities acting on their own behalf. Thus, both statutes have small
entity orientation and compatibility.
Industry Profile
There are approximately 1,205 producers of dried prunes in the
production area and approximately 21 handlers subject to regulation
under the marketing order. Small agricultural producers are defined by
the Small Business Administration (13 CFR 121.201) as those having
annual receipts of less than $750,000 and small agricultural service
firms are defined as those having annual receipts of less than
$5,000,000.
Eight of the 21 handlers (38 percent) shipped over $5,000,000 worth
of dried prunes and could be considered large handlers by the Small
Business Administration. Thirteen of the 21 handlers (62 percent)
shipped less than $5,000,000 worth of dried prunes and
[[Page 40756]]
could be considered small handlers. An estimated 32 producers, or less
than 3 percent of the 1,205 total producers, would be considered large
growers with annual incomes over $750,000. The majority of handlers and
producers of California dried prunes may be classified as small
entities.
Summary of Rule Change
This rule suspends for five years all provisions in the order and
administrative rules and regulations concerning the prune reserve and
voluntary producer diversion programs. These supply control programs
have been and continue to be controversial in the industry.
Furthermore, the industry has successfully reduced crop sizes through
other means. Through industry and USDA funded tree pull programs, over
18,000 acres of prune plum trees have been removed, reducing production
by at least 27,000 tons over the five-year suspension period.
This action would ensure that the reserve and diversion volume
control programs are not implemented for the period of the suspension.
During the five-year suspension period, the industry will have the
opportunity to determine whether these provisions should be modified,
terminated, or remain the same. In the absence of further rulemaking,
these provisions will automatically come back into effect at the end of
the suspension period. Authority to suspend these provisions of the
marketing order and administrative rules and regulations is provided in
Sec. 993.90(a) of the order.
Impact of Regulation
Regarding the impact of this rule on affected entities, this action
could reduce the reporting and recordkeeping burden on California prune
handlers and producers and reduce some of the PMC's administrative
costs. Although the prune reserve and producer diversion programs have
not been implemented since the 1970's and handlers and producers have
not been required to file reports pertaining to these programs,
suspending these provisions would reduce the potential reporting burden
on handlers and producers. Suspension of the provisions eliminates the
possibility of requiring handlers and producers to file reports
associated with the programs. It would also reduce some of the
potential PMC administrative costs of managing these programs. The PMC
estimates that 21 California prune handlers would be subject to these
provisions and to filing reports pertaining to these programs. Also, if
a producer diversion program was implemented, it is estimated that as
many as 300 producers would file forms applicable to this program. If
handlers filed reports under the prune reserve program, their estimated
burden would be 57 hours. If growers filed reports under the diversion
program, their estimated burden would be 75.58 hours. Thus, there is a
potential for reducing the estimated annual burden of 132.58 hours. The
benefits of this interim final rule would apply to all prune handlers
and producers, regardless of their size of operation.
The forms applicable to these programs are as follows: (1) Form PMC
4.1, Reserve Prunes Held--Handler; (2) Form PMC 4.2, Prune Reserve
Tonnage Sales Agreement; (3) Form PMC 4.5, Certificate of Insurance
Coverage; (4) Form PMC 5.1, Notice of Proposed Intent to Store Reserve
Prunes; (5) Form PMC 8.44, Request for Replacement of Draft; (6) Form
PMC 8.443, Claim for Reserve Pool Proceeds; (7) Form PMC 9.1,
Notification of Desire for Deferment of Reserve Withholding; (8) Form
PMC 10.1, Application for Prune Plum Diversion; (9) No form number,
Proof of Diversion; and (10) No form number, Notification of Report of
Diversion.
It should be noted that if the PMC determines this action is having
an unfavorable impact on the industry, it could meet and recommend
rescinding the suspension. Also, as previously mentioned, the
provisions would automatically come back into effect at the end of the
suspension period.
Alternatives Considered
The PMC and industry members discussed at the PMC's April 3, 2003,
meeting different alternatives to this action. The PMC discussed the
possibility of amending the marketing order provisions relating to
reserve and producer diversion programs but determined it would prefer
to eliminate the prune reserves and producer diversion provisions from
the order and administrative rules and regulations in a more timely
fashion. During the suspension, the industry will have the opportunity
to consider possible order amendments to these volume control
provisions. Another alternative would be to terminate the marketing
order. Many on the PMC and in the industry deemed termination too
drastic an action and preferred to preserve the marketing order and
make necessary changes to it to meet current industry needs and to
reflect current industry marketing practices.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35), the applicable forms being suspended by this rule were
approved previously by the Office of Management and Budget and assigned
OMB 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.
In addition, USDA has not identified any relevant Federal rules
that duplicate, overlap or conflict with this rule.
The PMC's April 3, 2003, meeting where this issue was deliberated
was widely publicized throughout the prune industry and all interested
persons were invited to attend the meetings and participate in the
industry's deliberations. Like all PMC meetings, this meeting was a
public meeting and all entities, both large and small, were able to
express their views on these issues. Finally, interested persons are
invited to submit information on the regulatory and informational
impacts of these changes on small businesses.
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 <http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=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.
A 60-day comment period is provided to allow interested persons to
respond to this rule. All written comments timely received will be
considered before a final determination is made on this matter.
After consideration of all relevant material presented, including
the PMC's recommendation, and other information, it is found that the
provisions being suspended would not tend to effectuate the declared
policy of the Act during the August 1, 2003, through July 31, 2008.
Pursuant to 5 U.S.C. 553, it is also found and determined upon good
cause that it is impracticable, unnecessary, and contrary to the public
interest to give preliminary notice prior to putting this rule into
effect and that good cause exists for not postponing the effective date
of this rule until 30 days after publication in the Federal Register
because: (1) This rule should be implemented as soon as possible so
California dried prune producers and handlers can plan accordingly; (2)
this rule relaxes requirements in the order and administrative rules
and regulations related to volume control activities; (3) these changes
were unanimously recommended at a public meeting and interested parties
had an opportunity to provide input; and (4) a 60-day comment period is
provided and all
[[Page 40757]]
comments received will be considered prior to finalization of this
rule.
List of Subjects in 7 CFR Part 993
Marketing agreements, Plums, Prunes, Reporting and recordkeeping
requirements.
0
For the reasons set forth in the preamble, 7 CFR part 993 is amended as
follows:
PART 993--DRIED PRUNES PRODUCED IN CALIFORNIA
0
1. The authority citation for 7 CFR part 993 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
0
2. In Part 993, Sec. Sec. 993.21d, 993.54, 993.55, 993.56, 993.57,
993.58, 993.59, 993.62, 993.65, 993.156, 993.157, 993.158, 993.159,
993.162, 993.165, and 993.172(e) are suspended in their entirety.
Sec. 993.33 [Suspended in part]
0
3. In the first sentence of Sec. 993.33, the words, ``salable and
reserve percentages, and on any matters pertaining to the control or
disposition of reserve prunes or to prune plum diversion pursuant to
Sec. 993.62,'' are suspended.
0
4. In Sec. 993.36, paragraph (i) is suspended.
Sec. 993.41 [Amended]
0
5. Section 993.41 is amended as follows:
0
a. Suspending paragraph (b)(2) in its entirety.
0
b. Suspending the words ``and reserve'' in paragraph (b)(3).
0
c. Suspending words ``without regard to possible diversions of prune
plums by producers'' in paragraph (b)(4).
0
d. Suspending paragraphs (b)(10), (b)(11), and (b)(12) in their
entirety.
Sec. 993.173 [Amended]
0
6. In Sec. 993.173, paragraph (a)(6) the words ``itemized as to
salable and reserve prunes by category'' are suspended and in paragraph
(c)(1) the words ``and the tonnage of reserve prunes by size in each
category;'' are suspended.
Dated: July 2, 2003.
A. J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 03-17276 Filed 7-8-03; 8:45 am]
BILLING CODE 3410-02-P
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