[Federal Register: October 23, 2003 (Volume 68, Number 205)]
[Rules and Regulations]
[Page 60620-60624]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23oc03-4]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Parts 993 and 999
[Docket No. FV03-993-3 FIR]
Dried Prunes Produced in California; Temporary Suspension of the
Mandatory Outgoing Prune Inspection and Quality Requirements, and
Modification of the Undersized Prune Disposition Requirements Under the
Marketing Order, and Suspension of the Prune Import Regulation
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 which suspended for three
years the outgoing prune inspection and quality requirements under the
California Dried Prune Marketing Order (Order) and its administrative
rules and regulations, and the prune import regulation. Continued
suspension of the outgoing inspection and quality requirements, and
import regulation provisions ensures relief from these requirements.
The Order regulates the handling of dried prunes produced in California
and is administered locally by the Prune Marketing Committee
(Committee). During the three-year suspension, the industry will have
the opportunity to develop and implement outgoing inspection and
finished product grade standards more consistent with current industry
needs. In the absence of additional rulemaking to modify or terminate
the suspended provisions, they will come back into effect automatically
at the end of the three-year period. The modifications to the
undersized prune disposition requirements made by the interim final
rule also are continued without change.
EFFECTIVE DATE: November 24, 2003.
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.
[[Page 60621]]
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.''
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, 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
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 continues in effect the suspension of the outgoing prune
inspection and quality requirements in the order and its administrative
rules and regulations, and the prune import regulation for a three-year
period, and modification of the undersized prune disposition
requirements. These changes became effective with the start of the new
crop year on August 1, 2003. The order regulates the handling of dried
prunes produced in California and is administered locally by the Prune
Marketing Committee (Committee). The Committee unanimously recommended
suspension of the outgoing inspection, and outgoing prune quality
requirements at meetings held on April 3, and May 1, 2003, because it
is the quickest way to ensure relief from these regulations. During the
three-year suspension period, the industry will have the opportunity to
develop and implement outgoing inspection and finished product grade
standards that are more in line with current industry needs. As
discussed below, suspension of the prune import regulation is required
under section 8e of the Act.
Marketing Order Authority To Modify and Suspend
Section 993.50(g) states in part: ``rules and regulations to insure
proper disposition of the [undersized] prunes shall be established by
the Committee with the approval of the Secretary.''
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 finds that such provisions do not tend to
effectuate the declared policy of the act.''
Outgoing Grade and Size Regulations
The order previously mandated outgoing inspections and outgoing
prune quality, size, and labeling requirements of California produced
prunes by California prune handlers to verify that such prunes meet
quality requirements. These requirements were based on the U.S.
Standards for Grades of Dried Prunes and marketing order grade
standards. The objective of the inspection, grade, size, and labeling
requirements was to ensure that only prunes of acceptable quality and
size entered the domestic and foreign markets for human consumption,
thereby ensuring consumer satisfaction, increasing sales, and improving
returns to producers. While the industry continues to believe that
quality is an important factor in maintaining sales, the Committee
believes that the costs associated with existing minimum grade, size,
and labeling standards may exceed the benefits accrued from such
requirements at this time.
Prune Import Regulations
Section 8e of the Agriculture Marketing Agreement Act of 1937 (Act)
provides that when certain domestically produced commodities, including
prunes, are regulated under a Federal marketing order, imports of that
commodity must meet the same or comparable grade, size, quality, and
maturity requirements. Section 999.200 contained the prune import
regulations that were comparable to the domestically produced prune
outgoing quality and size requirements. Since this rule continues to
suspend the outgoing quality and size requirements for domestically
produced prunes for three years, these requirements in the import
regulation must continue to be suspended during this period as well.
U.S. imports of dried prunes are insignificant compared to U.S.
production. In 2002, while the U.S. produced 158,000 tons of dried
prunes, only 616 tons were imported. In that year, the domestically
produced tonnage was over 250 times as large as the imported tonnage.
In 2001, 204 tons were imported, but the U.S. produced 150,000 tons.
Production was 735 times as large as imports.
In recent years, about 90 percent of U.S. imports of dried prunes
have come from Argentina. Other countries that export to the United
States include Chile, France, Mexico, Iran, and Turkey.
Undersized Prune Disposition Regulations
The prune administrative rules and regulations previously required
handlers to have a third party inspection of each lot of undersized
prunes prior to shipment into nonhuman outlets or other disposition.
Under Sec. 993.51 of the Order, inspections are performed by the Dried
Fruit Association of California. These requirements also required
handlers to submit to the Committee comprehensive documentation
verifying that they have satisfied their undersized prune obligation.
The prune administrative rules and regulations previously limited
the quantities of larger size prunes that can be used to meet a
handler's undersized disposition obligation. While the Committee plans
to continue to restrict the shipment of undersized prunes into human
consumption outlets, the Committee continues to believe that the costs
associated with the inspection and documentation of the disposal of
undersized prunes may exceed the benefits. To reduce the cost and time
for handlers to file reports and verify the disposition of undersized
prunes through inspection, the Committee unanimously recommended
removing the inspection requirements, and simplifying the documentation
required from handlers to satisfy their undersized obligation as well
as removing the limits on the weights of larger prunes that can be used
to meet undersized obligations.
Background and Action Taken
California prune handlers are currently selling prunes in many
forms to customers throughout the world. The
[[Page 60622]]
majority of these sales involve sizing or processing the prunes to more
stringent specifications than required under the order. Retail and
wholesale buyers often visit handlers' plants in California to verify
specification and quality procedures, which tend to be more stringent
than the minimum outgoing quality requirements mandated in the
marketing order. Handlers continue to improve the quality and outgoing
inspection procedures to target the specific customer and market
demands. Almost all prunes sold for consumption in the United States as
prunes are pitted and packaged in consumer bags and canisters targeting
much higher standards than those mandated by the marketing order.
Previously used procedures required detailed administrative
notating and reporting of defect information, large numbers of line
inspectors at handler plants, and tracking and segregating lots and
bins of fruit to comply with the order. As a result, handlers expended
significant amounts of time and money on the inspection process. Also,
almost all fruit is inspected by international buyers upon receipt, and
is accepted or rejected based on the fruits' condition at the time of
that review, regardless of any prior inspection process or
certification. Further, prunes produced in other countries must meet
customer specifications and inspection criteria.
Because of increased foreign competition that sells quality-
processed fruit, shifting consumer demand from natural condition to
processed prunes, and increasingly competitive specifications, the
minimum marketing order standards no longer reflect current industry
needs. The Committee continues to believe that California prune
handlers must reduce all unnecessary costs in order to remain
competitive with imported fruit and to profitably sell fruit in
international markets.
The mandatory outgoing inspections focused on cosmetic defects or
defects that tend to be removed through steaming, pitting, or juicing
the fruit. While the industry once sold primarily unprocessed prunes,
consumer demand has changed and some processing is invariably required,
leaving the outgoing inspection criteria inapplicable and out-dated.
With regard to import requirements, section 8e of the Act requires
import regulations to be comparable to the domestic regulations, not
more restrictive. Since this rule continues to suspend outgoing grade
and size regulations for domestically produced prunes, and
substantially relaxes the disposition and verification requirements on
undersized prunes under the order, the import regulation must continue
to be suspended as well.
During the three-year suspension period, the industry will have the
opportunity to develop and implement more appropriate finished product
grade standards through amendments to the order and administrative
rules and regulations. In the interim, the suspension of these
provisions continues to 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.
At its May 1, 2003, meeting, the Committee unanimously recommended
suspension of all outgoing inspection, outgoing quality, size, and
labeling requirements in the marketing order and the administrative
rules and regulations for three years, beginning with the start of the
new crop year on August 1, 2003. The suspension of these provisions
continues to reduce some administrative costs.
This rule continues to suspend in their entirety Sec. Sec.
993.50(a) through (f) and 993.97 Exhibit A--Part II of the order, and
Sec. Sec. 993.150(a) and (b), 993.150(d) through (g)(1), 993.515,
993.516, 993.517, 993.518 of the administrative rules and regulations,
as well as the import regulation specified in Sec. 999.200. Portions
of Sec. Sec. 993.50(g) and 993.51 of the order, and portions of
Sec. Sec. 993.601 of the administrative rules and regulations continue
to be suspended. These sections of the order and administrative rules
and regulations pertain to the various requirements of the outgoing
inspection, outgoing quality, size, and labeling requirements, and
import regulation provisions.
Prune handlers opposed the previously stated undersized prune
regulations because they were costly to use. Undersized prunes have
marginal value as cattle feed or use in tobacco products (about $40-$45
per ton), and the costs of completing the required Committee paperwork
and having them inspected by the DFA of California may exceed the
revenue received. The industry is now also less concerned about the
minimal amount of poor quality undersized prunes. Supplies of
undersized prunes are now lower because of the recent tree pull
programs and growers field sizing programs to drop small prune plums in
the orchard, rather than deliver them to handlers.
The Committee chose to recommend removal of the limits on the
quantities of larger-sized prunes that can be used to meet a handler's
undersized weight disposition obligation, and the requirement for
inspection of the undersized prunes and certification of handlers'
receipt of usage, because these changes eliminate certain inspection
costs and reduce Committee and handler administration costs.
At the April 3, 2003, meeting, the Committee unanimously
recommended modification of the undersized prune disposition provisions
in the marketing order and the administrative rules and regulations,
which began with the start of the new crop year on August 1, 2003. The
modification of these provisions continues to reduce some committee and
handler administrative costs.
This rule continues to remove Sec. 993.150(g)(2)(i), Sec.
993.150(g)(2)(iii), and Sec. 993.150(g)(2)(iv) in the administrative
rules and regulations. Portions of Sec. 993.150(g)(3) continue to be
amended.
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.
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 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
[[Page 60623]]
majority of handlers and producers of California dried prunes may be
classified as small entities.
In addition, there are an estimated 30 importers and one third-
party entity that performed inspections under the order. USDA does not
have precise information on these entities, but believes that the
majority of the importers and the inspection agency are small entities.
Summary of Rule Change
This rule continues to suspend the outgoing prune inspection and
outgoing prune quality requirements under the order and the
administrative rules and regulations, and the prune import provisions
for a three-year period, and continues to modify the undersized prune
disposition requirements. These changes continue to be effective since
the start of the new crop year on August 1, 2003, for three years. In
the absence of additional rulemaking, the suspended requirements will
come back into effect at the end of the three-year period.
The industry chose suspension of the outgoing inspection, outgoing
prune quality and size and labeling requirements, because suspension is
the quickest way to ensure relief from these regulations. During the
three-year suspension period, the industry continues will have the
opportunity to develop and implement more effective finished product
grade standards through amendments to the order and administrative
rules and regulations. It also has an opportunity to decide whether
these requirements should be terminated.
Authority to suspend these provisions of the marketing order and
administrative rules and regulations is provided in Sec. 993.90(a) of
the order. Authority to modify the disposition requirements and
procedures for undersized prunes in the administrative rules and
regulations is provided in Sec. Sec. 993.50(g) and 993.52 of the
order. Authority for the import regulation is in section 8e of the Act.
Impact of Regulation
Regarding the impact of this rule on affected entities, this action
continues the reduced reporting and recordkeeping burden on California
prune handlers and continues the reduction in the Committee's and
handlers' administrative costs. Also, this action continues to reduce
the number of inspections performed by the inspection agency under the
order. The Committee estimates that 21 California prune handlers are
subject to these provisions and to filing the handler reports. Also
under the prune import regulations, it is estimated that as many as 10
importers would file forms applicable to the import regulations. The
handler annual burden to file these reports is 70.04 hours, and the
respondent annual burden to file reports under the import regulations
is 6.05 hours. Thus, there is a potential to reducing the annual
handler and importer reporting burden by 76.09 hours during the
suspension period. The benefits of this final rule apply to all prune
handlers and importers, regardless of their size of operation.
The forms affected by this rule are as follows: (1) Form PMC 2.2,
Application for Permission to Dispose of Substandard Prunes; (2) Form
PMC 2.6, Statement of Proposed Disposition of Substandard Prunes; (3)
Form PMC 4.72A, Foreign Export `` Notice of Substandard Prunes for
Manufacturing Purposes; (4) Form PMC 4.72B, Foreign Export `` Notice of
Usage of Substandard Prunes for Manufacturing Purposes; (5) Form PMC
2.21, Application for Permission to Dispose of Undersized Prunes for
Non-Human Usage; (6) Form PMC 4.71A, User's Receipt of Dried Undersized
Prunes for Non-Human Usage; (7) Form PMC 4.71B, User's Certificate of
Non-Human Usage of Dried Undersized Prunes; (8) Form PMC 2.63,
Statement of Proposed Disposition of Undersized Prunes; (9) Form FV-
170, Prune Form No. 1; and (10) Form FV-171, Prune Form No. 2.
It should be noted that if the Committee determines that these
suspensions are having an unfavorable impact on the industry, it could
meet and recommend rescinding the suspensions. Also, as previously
mentioned, the provisions automatically come back into effect at the
end of the suspension period.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35), the information collection requirements being suspended by
this rule were previously approved by the Office of Management and
Budget, under 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, as noted in the initial regulatory flexibility
analysis, USDA has not identified any relevant Federal rules that
duplicate, overlap or conflict with this rule.
Alternatives Considered
At meetings held on April 3, and May 1, 2003, the Committee and
industry members discussed different alternatives to these actions. The
Committee discussed the possibility of suspending the total Federal
prune marketing order, but its benefit in other areas is recognized by
the industry. Another alternative discussed was to suspend all
mandatory inspections (both incoming and outgoing inspections), but
many on the Committee and in the industry deemed this action too
extreme. Another alternative discussed was to exempt handlers from the
inspection requirements if they could demonstrate that the automation
of their plant assured consistent delivery of higher quality prunes,
but this would not be practicable. Another alternative considered was a
two-year suspension of the undersized prune regulation. This was
opposed because it would increase the domestic salable tonnage and
would add to the industry's oversupply.
The Committee's April 3, and May 1, 2003, meetings where the
outgoing inspection, outgoing prune quality, size, and labeling
requirement issues were deliberated were public meetings and widely
publicized throughout the prune industry. At the April 3, 2003,
meeting, the Committee recommended removing the limits on the quantity
of larger-sized prunes that could be used to meet handler undersized
obligations and eliminating the DFA of California undersized prune
inspection and certification of receipt and usage. This was to reduce
costs, including inspection fees and other Committee costs associated
with mandatory inspection, and the reporting burden resulting from the
inspection requirements.
All interested persons were invited to attend the meetings and
participate in the industry's deliberations. Finally, interested
persons were invited to submit information on the regulatory and
informational impacts of these changes on small businesses.
An interim final rule concerning this action was published in the
Federal Register on July 24, 2003. Copies of the rule were mailed by
the Committee's staff to all Committee members, alternates and prune
handlers. In addition, the rule was made available through the Internet
by the Office of the Federal Register and USDA. That rule provided for
a 60-day comment period which ended on September 22, 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 <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
[[Page 60624]]
address in the FOR FURTHER INFORMATION CONTACT section.
The Office of the U.S. Trade Representative has reviewed this rule
and concurs with its issuance.
After consideration of all relevant material presented, including
the Committee's recommendation, and other information, it is found that
finalizing the interim final rule, without change, as published in the
Federal Register (68 FR 43614, July 24, 2003) will tend to effectuate
the declared policy of the Act.
List of Subjects
7 CFR Part 993
Marketing agreements, Plums, Prunes, Reporting and recordkeeping
requirements.
7 CFR Part 999
Dates, Filberts, Food grades and standards, Imports, Nuts, Prunes,
Raisins, Reporting and recordkeeping requirements, Walnuts.
PART 993--DRIED PRUNES PRODUCED IN CALIFORNIA
PART 999--SPECIALTY CROPS: IMPORT REGULATIONS
Accordingly, the interim final rule amending 7 CFR parts 993 and
999 which was published at 68 FR 43614 on July 24, 2003, is adopted as
a final rule without change.
Dated: October 17, 2003.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 03-26712 Filed 10-22-03; 8:45 am]
BILLING CODE 3410-02-P
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