[Federal Register: November 14, 2003 (Volume 68, Number 220)]
[Rules and Regulations]
[Page 64502-64504]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14no03-4]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 989
[Docket No. FV03-989-7 FIR]
Raisins Produced From Grapes Grown in California; Reduction in
Additional Storage Payments Regarding Reserve Raisins Intended for Use
as Cattle Feed
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 that reduced the additional
holding and storage payments regarding 2002 Natural (sun-dried)
Seedless (NS) reserve raisins that were carried into the 2003 crop year
and used as cattle feed. The crop year runs from August 1 through July
31. Such payments are authorized 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). This action continues to
reduce expenses incurred by the 2002 reserve pool and thereby helps
improve returns to 2002 equity holders, primarily raisin producers.
EFFECTIVE DATE: Effective December 15, 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
[[Page 64503]]
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. 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 to reduce the additional holding and storage
payments regarding 2002 NS reserve raisins that were carried into the
2003 crop year and used as cattle feed. The crop year runs from August
1 through July 31. Under the order, handlers are compensated for
receiving, storing, fumigating, and handling reserve tonnage raisins
acquired during a crop year. The order also authorizes additional
payments for reserve raisins held beyond the crop year of acquisition.
The RAC met on July 2, 2003, and unanimously recommended that
additional payments for reserve raisins used as cattle feed accrue
beginning September 13, 2003, rather than August 1, 2003. This action
continues to reduce expenses incurred by the 2002 reserve pool and
thereby helps improve returns to 2002 equity holders, primarily raisin
producers.
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 the reserve pool's equity
holders, primarily producers.
Costs Regarding Holding and Storage of Reserve Raisins
Section 989.66(f) of the order specifies that handlers be
compensated for receiving, storing, fumigating, and handling that
tonnage of reserve raisins determined by the reserve percentage of a
crop year and held by them for the account of the RAC, in accordance
with a schedule of payments established by the RAC and approved by the
Secretary. Further, the RAC must pay rent to producers or handlers for
boxes used in storing reserve raisins held beyond the crop year of
acquisition. As previously mentioned, the crop year runs from August 1
through July 31.
Section 989.401(b) of the order's rules and regulations specifies
additional payments to handlers for storing, handling, and fumigating
reserve raisins held beyond the crop year of acquisition. Specifically,
handlers must be compensated for such raisins at a rate of $2.30 per
ton for the first 3 months (August through October), and at a rate of
$1.18 per ton per month for the remaining 9 months (November through
July).
Section 989.401(c) specifies further payment of rental on boxes and
bins containing raisins held beyond the crop year of acquisition.
Specifically, persons who furnish boxes or bins used for storing
reserve raisins held for the account of the RAC on August 1 are
compensated for the use of such containers as follows: For boxes, 2\1/
2\ cents per day, not to exceed a total payment of $1.00 per box per
year, per average net weight of raisins in a sweatbox, with equivalent
rates for raisins in boxes other than sweatboxes; and for bins, 20
cents per day per bin, not to exceed a total of $10.00 per bin per
year.
Disposal Program
Pursuant to Sec. 989.67(b) of the order, the RAC implemented a
program to dispose of about 38,000 tons of 2002 NS reserve raisins for
use as cattle feed. The tonnage was stored at handler facilities and
was adulterated to ensure that the raisins remain in non-commercial
channels. The program helped the industry reduce its burdensome
oversupply of raisins. It also helped to make available bins for
storing raisins during the new crop year, which began August 1, 2003.
Nearly all of the reserve tonnage that was used as cattle feed was
removed from handler premises by mid-September 2003 (about 425 tons
remained).
RAC Recommendation
The RAC met on July 2, 2003, and unanimously recommended reducing
the additional holding and storage payments regarding 2002 NS reserve
raisins held by handlers on August 1, 2003, and used as cattle feed.
Specifically, additional payments for such raisins were accrued
beginning September 13, 2003, rather than August 1, 2003. Thus,
additional costs were only incurred for such tonnage that remained at
handler premises after September 12, 2003 (425 tons). Payments for
storing and holding reserve raisins are deducted from reserve pool
proceeds, and net proceeds are ultimately distributed to equity
holders. Thus, reducing the expenses for 2002 NS reserve tonnage used
as cattle feed will help improve returns to 2002 equity holders.
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.
[[Page 64504]]
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 service 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 reduce the additional holding and storage
payments specified in paragraphs (b) and (c) of Sec. 989.401 regarding
2002 NS reserve raisins that were used as cattle feed. Specifically,
additional payments for such raisins accrued beginning September 13,
2003, rather than August 1, 2003. Under the order, handlers are
compensated for receiving, storing, fumigating, and handling reserve
tonnage raisins acquired during a crop year. The order also authorizes
additional holding and storage payments for reserve raisins held beyond
the crop year of acquisition. This action continues to reduce these
additional payments for 2002 NS reserve raisins held by handlers on
August 1, 2003, that were used as cattle feed. Authority for this
action is provided in Sec. 989.66(f) of the order.
Regarding the impact of this rule on affected entities, handlers
and producers, the order provides that handlers store reserve raisins
for the account of the RAC. Net proceeds from sales of such reserve
raisins are distributed to the reserve pool's equity holders, primarily
producers. Handlers are compensated from reserve pool funds for their
costs in receiving, storing, fumigating, and handling reserve raisins
during the crop year of acquisition and for the subsequent crop year.
Compensation is also paid for the use of bins and boxes for storing
reserve raisins held beyond the crop year of acquisition.
Under the disposal program, 22,541 tons of reserve raisins remained
at handler premises after August 1, 2003. About 525 tons were removed
per day. The cost to store, handle, and fumigate the remaining tonnage
at the rate of $2.30 per ton per month between August 1 and September
12, 2003, would have been about $66,256. Bin-rental costs for the same
period at the current rate of $0.20 per day per bin would have been
about $198,075.00. Thus, the RAC saved about $264,331 in costs that
would have been used for holding and storing 2002 reserve raisins
intended for use as cattle feed between August 1 and September 12,
2003. This rule continues to reduce these costs to zero and thereby
reduce expenses incurred by the 2002 NS reserve pool. Handlers,
however, will not be compensated this amount for holding and storing
this tonnage.
Regarding alternatives to this action, one option would be to
maintain the status quo and have the 2002 reserve pool incur these
costs. However, this would not help to improve returns to 2002 equity
holders. Another alternative would be to reduce the payments for the
period August 1 through September 12, 2003, to figures lower than those
currently specified in Sec. 989.401. However, all RAC members
supported reducing the additional holding and storage payments for 2002
reserve raisins intended for use as cattle feed so that such payments
accrued beginning September 13, 2003, rather than August 1, 2003.
This rule imposes no additional reporting or recordkeeping
requirements on either small or large raisin handlers. 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 Administrative Issues Subcommittee and RAC
meetings on July 2, 2003, where 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 July 31, 2003 (68 FR 44857). Copies of the rule
were mailed by the 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. The rule provided for a 60-day comment
period that ended on September 29, 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 hereby found that this rule, as
hereinafter set forth, 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 44857 on July 31, 2003, is adopted as a final rule
without change.
Dated: November 7, 2003.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 03-28519 Filed 11-13-03; 8:45 am]
BILLING CODE 3410-02-P