[Federal Register: October 7, 2003 (Volume 68, Number 194)]
[Rules and Regulations]
[Page 57783-57785]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07oc03-1]
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Rules and Regulations
Federal Register
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[[Page 57783]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 993
[Docket No. FV03-993-2 FIR]
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: Final rule.
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SUMMARY: The Department of Agriculture (USDA) is adopting, as a final
rule, without change, an interim final rule suspending 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
ensures that volume control restrictions will not be implemented under
the order. 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
will come back into effect automatically at the end of the five-year
period.
EFFECTIVE DATE: November 6, 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.
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. 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 for five years of all
provisions in the order and administrative rules and regulations
concerning the prune reserve and voluntary producer prune plum
diversion. This action was unanimously recommended by the PMC. This
rule will continue to ensure that reserve percentages are not
established, and that a prune plum diversion program is not 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
[[Page 57784]]
and the handler may apply the quantity represented by the certificate
towards his reserve obligation. Participation in this program reduces a
producer's expenses to convert prune plums into dried prunes that will
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 1970's 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 were
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 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 five-year suspension period.
The PMC unanimously recommended this action at an April 3, 2003,
meeting. This rule continues to suspend Sec. Sec. 993.21d, 993.36(i),
993.54, 993.55, 993.56, 993.57, 993.58, 993.59, 993.62, and 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 continue to
be suspended. These sections of the order and administrative rules and
regulations pertain to the various requirements of the prune reserve
and producer diversion programs.
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 majority of handlers and
producers of California dried prunes may be classified as small
entities.
Summary of Rule Change
This rule continues to suspend 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 rule continues to ensure that the reserve and diversion volume
control programs will not be implemented for the five-year suspension
period. Also, during the 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 1970s and handlers and producers have
not been required to file reports pertaining to these programs,
suspending these provisions continues to reduce the potential reporting
burden on handlers and producers. Suspension of the provisions
continues to eliminate the possibility of requiring handlers and
producers to file reports associated with the programs. It also
continues to reduce some of the potential PMC administrative costs of
managing these programs. The PMC estimates that 21 California prune
handlers are 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 rule
apply to all prune handlers and producers, regardless of their size of
operation.
[[Page 57785]]
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 automatically come back into effect at the end of the
suspension period.
Alternatives Considered
The PMC and industry members discussed different alternatives to
this action at the PMC's April 3, 2003, meeting. The PMC discussed the
possibility of amending the marketing order provisions relating to
reserve and producer diversion programs but decided to eliminate the
prune reserve 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 the volume control provisions. Another
alternative was 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 meeting 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.
An interim final rule concerning this action was published in the
Federal Register on July 9, 2003. The PMC's staff mailed copies of the
rule to all PMC 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 8, 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 PMC's recommendation, and other information, it is found that
finalizing the interim final rule, without change, as published in the
Federal Register (68 FR 40754, July 9, 2003) will tend to effectuate
the declared policy of the Act.
List of Subjects in 7 CFR Part 993
Marketing agreements, Plums, Prunes, Reporting and recordkeeping
requirements.
PART 993--DRIED PRUNES PRODUCED IN CALIFORNIA
0
Accordingly, the interim final rule amending 7 CFR part 993 which was
published at 68 FR 40754 on July 9, 2003, is adopted as a final rule
without change.
Dated: October 1, 2003.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 03-25312 Filed 10-6-03; 8:45 am]
BILLING CODE 3410-02-P