[Federal Register Volume 60, Number 15 (Tuesday, January 24, 1995)]
[Rules and Regulations]
[Pages 4532-4534]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-1749]
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DEPARTMENT OF AGRICULTURE
7 CFR Part 989
[Docket No. FV94-989-5FIR]
Raisins Produced From Grapes Grown in California; Expenses and
Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: The Department of Agriculture (Department) is adopting as a
final rule, without change, the provisions of an interim final rule
that authorized expenses and established an assessment rate that will
generate funds to pay those expenses. Authorization of this budget
enables the Raisin Administrative Committee (Committee) to incur
expenses that are reasonable and necessary to administer the program.
Funds to administer this program are derived from assessments on
handlers.
EFFECTIVE DATE: August 1, 1994, through July 31, 1995.
FOR FURTHER INFORMATION CONTACT: Martha Sue Clark, Marketing Order
Administration Branch, Fruit and Vegetable Division, AMS, USDA, P.O.
Box 96456, room 2523-S, Washington, DC 20090-6456, telephone 202-720-
9918, or Richard P. Van Diest, California Marketing Field Office, Fruit
and Vegetable Division, AMS, USDA, suite 102B, 2202 Monterey Street,
Fresno, CA 93721, telephone 209-487-5901.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing
Agreement and Order No. 989 (7 CFR part 989), regulating the handling
of raisins produced from grapes grown in California. The marketing
agreement and order are 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 is issuing this rule in conformance
with Executive Order 12866.
This rule has been reviewed under Executive Order 12778, Civil
Justice Reform. Under the provisions of the marketing order now in
effect, California raisins are subject to assessments. It is intended
that the assessment rate as issued herein will be applicable to all
assessable raisins handled during the 1994-95 crop year, which began
August 1, 1994, and ends July 31, 1995. This final 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 the Secretary 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 requesting a modification of the order or to be exempted
therefrom. Such handler is afforded the opportunity for a hearing 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 in equity to
review the Secretary's ruling on the petition, provided a bill in
equity is filed not later than 20 days after the date of the entry of
the ruling.
Pursuant to the requirements set forth in the Regulatory
Flexibility Act (RFA), the Administrator of the Agricultural Marketing
Service (AMS) has considered the economic impact of this rule on small
entities.
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 the 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 5,000 producers of California raisins under
this marketing order, and approximately 20 handlers. Small agricultural
producers have been defined by the Small Business Administration (13
CFR 121.601) as those having annual receipts of less than $500,000, and
small agricultural service firms are defined as those whose annual
receipts are less than $5,000,000. A majority of California raisin
producers and a minority of handlers may be classified as small
entities.
The budget of expenses for the 1994-95 crop year was prepared by
the Committee, the agency responsible for local administration of the
marketing order, and submitted to the Department for approval. The
members of the Committee are producers and handlers of California
raisins. They are familiar with the Committee's needs and with the
costs of goods and services in their [[Page 4533]] local area and are
thus in a position to formulate an appropriate budget. The budget was
formulated and discussed in a public meeting. Thus, all directly
affected persons have had an opportunity to participate and provide
input.
The assessment rate recommended by the Committee was derived by
dividing anticipated expenses by expected acquisitions of California
raisins. Because that rate will be applied to actual acquisitions, it
must be established at a rate that will provide sufficient income to
pay the Committee's expenses.
The Committee, with headquarters in Fresno, California, met August
15, 1994, and unanimously recommended a 1994-95 budget of $1,324,000,
which is $744,940 more than the previous year. Budget items for 1994-95
which have increased compared to those budgeted for 1993-94 (in
parentheses) are: Office salaries, $123,000 ($90,000), fieldman
salaries, $44,000 ($42,600), Payroll taxes, $30,000 ($27,500), employer
retirement contribution, $20,000 ($18,200), general insurance, $8,000
($6,000), group medical insurance, $40,000 ($37,000), rent, $43,000
($17,900), telephone, $15,000 ($4,000), postage, $20,000 ($12,000),
office supplies, $30,000 ($20,000), repairs and maintenance, $10,000
($5,000), audit fees, $20,000 ($3,600), office travel, $14,000
($12,000), Committee meeting expenses, $7,500 ($5,000), miscellaneous
expense, $15,000 ($10,000), objective measurement survey, $14,750
($14,000), and reserve for contingencies, $142,400 ($55,810). The
Committee also recommended employee benefit expenses of $2,500 and
export program funding of $50,000 for travel and $350,000 for foreign
program administration, for which no funding was recommended last year.
The Committee also provided for $1,652,750 for certain expenses
likely to be incurred in connection with the 1994-95 raisin reserve
pools for Natural (sun-dried) Seedless and Zante Currant raisins. In
addition, a pool currently exists for Other Seedless raisins, and the
Committee will make a decision on or before February 15, 1995, on
whether or not this pool will be continued. Pool expenses are deducted
from proceeds obtained from the sale of reserve raisins. These expenses
are $766,150 more than the $886,600 for 1993-94 reserve pool expenses.
The larger administrative and reserve pool expenses result from the
Committee's takeover of certain industry export marketing activities
and the fact that the Natural (sun-dried) Seedless raisin crop is
larger than last year. This large crop, and the pooling of Zante
Currant raisins for the first time in many years, will result in a
large quantity to be pooled and increased costs. These costs will be
even larger if Other Seedless raisins are pooled. Reserve pool
expenditures are reviewed annually by the Department.
A California State raisin marketing order was terminated in 1994.
Its administrative agency, the California Raisin Advisory Board
(CALRAB), formerly conducted marketing promotion and paid advertising
activities here and abroad for the California raisin industry.
The Committee is taking over the funding and administration of the
Market Promotion Program (MPP). The MPP, administered by the
Department's Foreign Agricultural Service (FAS), encourages the
development, maintenance, and expansion of export markets for
agricultural commodities like raisins.
Recently, the FAS redirected MPP funds allocated to CALRAB for
foreign promotion and advertising to the Committee which desires to use
the funds to continue the industry's strong overseas promotion and
advertising activities. To receive the full allocation ($4,479,549),
the Committee must be able to show that it plans to spend, from
industry sources, an amount equal to 50 percent of that allotment
($2,239,975). This spending can be for administration or promotion. The
Committee recommended that the increased spending necessary to meet the
required MPP matching figure be funded through increased handler
assessments, reserve pool funds, and merchandising incentive program
funds.
Under the marketing order's volume regulation provisions, marketing
percentages (free and reserve) for a varietal type can be implemented
to stabilize supplies. The free percentage prescribes the portion of
the crop that can be shipped immediately to any market. The reserve
percentage prescribes the portion of the crop to be held for later
shipment. Reserve raisins are held in a reserve pool by handlers for
the account of the Committee. Funds generated from the sales of reserve
raisins, after deduction of reserve pool expenses, are distributed
equally to equity holders in the pool (producers).
A Committee implemented merchandising incentive program promotes
the consumption of California raisins in foreign markets. For various
countries, cash rebates and advertising/promotion incentives are
offered to qualifying importers. Funds used to pay the incentives are
derived from reserve pool sales.
The Committee's MPP match of $2,239,775 will be made up of
$1,249,775 in Committee domestic and overseas administration costs and
$990,000 in industry market promotion funds. Domestic administration
costs include $238,560 in employee salaries and benefits and $252,215
for MPP overhead costs. The overhead costs include expenditures for
Committee staff to travel overseas ($100,000), Committee delegation
trips ($50,000), rent ($28,500), insurance ($1,600), telephone
($7,500), postage ($6,000), office supplies, ($2,500), repairs and
maintenance ($2,000), audit fees ($15,000), local travel ($3,000),
equipment ($5,000), and miscellaneous expenses ($31,715).
The overseas costs of $714,000 include funding for the Committee's
overseas marketing representatives and their staffs for nine countries
(United Kingdom, Germany, Japan, Singapore, Philippines, Thailand,
Malaysia, China, and Hong Kong). The costs include salaries and
benefits, travel, office rent, office supplies, utilities, and postage.
The representatives will handle the administration and day-to-day
details of the marketing activities conducted in these countries.
The domestic and overseas administrative and overhead costs for the
MPP will be paid with handler administrative assessments and reserve
pool proceeds. Most of the major expense items for the MPP (employees
salaries and benefits, domestic and overseas travel, and office rent)
will be shared equally between administrative and reserve pool funds.
A total of $1,442,325 was available for the Committee's
merchandising incentive program this year. Of that amount, a total of
$990,000 will qualify for the MPP match. The Committee plans to use
these funds for authorized promotion activities in Japan.
The Committee unanimously recommended an assessment rate of $4.00
per ton, which is $2.20 more than last year. This rate, when applied to
anticipated acquisitions of 331,000 tons, will yield $1,324,000 in
assessment income, which will be adequate to cover anticipated
administrative expenses. Any unexpended assessment funds from the crop
year are required to be credited or refunded to the handlers from whom
collected.
An interim final rule was published in the Federal Register on
October 31, 1994 (59 FR 54379). That interim final rule added
Sec. 989.345 to authorize expenses and establish an assessment rate for
the Committee. That rule provided that interested persons could
[[Page 4534]] file comments through December 30, 1994. No comments were
received.
While this action will impose some additional costs on handlers and
producers, the costs on handlers are in the form of uniform
assessments, and those on producers will be shared equally by all
equity holders in the 1994-95 reserve pool for Natural (sun-dried)
Seedless raisins. However, these costs will be offset by the benefits
derived by the operation of the marketing order. Therefore, the
Administrator of the AMS has determined that this action will not have
a significant economic impact on a substantial number of small
entities.
After consideration of all relevant matter presented, including the
information and recommendations submitted by the Committee 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.
It is further found that good cause exists for not postponing the
effective date of this action until 30 days after publication in the
Federal Register (5 U.S.C. 553) because the Committee needs to have
sufficient funds to pay its expenses which are incurred on a continuous
basis. The 1994-95 crop year began on August 1, 1994. The marketing
order requires that the rate of assessment for the crop year apply to
all assessable raisins handled during the crop year. In addition,
handlers are aware of this action which was unanimously recommended by
the Committee at a public meeting and published in the Federal Register
as an interim final rule.
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
Accordingly, the interim final rule amending 7 CFR part 989 which
was published at 59 FR 54379 on October 31, 1994, is adopted as a final
rule without change.
Dated: January 18, 1995.
Sharon Bomer Lauritsen,
Deputy Director, Fruit and Vegetable Division.
[FR Doc. 95-1749 Filed 1-23-95; 8:45 am]
BILLING CODE 3410-02-P