[Federal Register Volume 60, Number 119 (Wednesday, June 21, 1995)]
[Proposed Rules]
[Pages 32280-32282]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-15106]



      
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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 60, No. 119 / Wednesday, June 21, 1995 / 
Proposed Rules  

[[Page 32280]]

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 989

[Docket No. FV95-989-3PR]


Change of Desirable Carryout Used in Computing Trade Demand

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would change the desirable carryout levels 
which are used in computing the yearly trade demand for California 
raisins. The trade demand is used to help determine the volume 
regulation percentages for each crop year, if necessary. The desirable 
carryout would be reduced from the current two and one-half months of 
shipments to two and one-fourth months of shipments during the 1995-96 
crop year and to two months of shipments in subsequent crop years. The 
Raisin Administrative Committee (Committee), which is responsible for 
local administration of the Federal marketing order, believes that the 
current desirable carryout level results in excessive supplies of 
marketable tonnage early in the crop year. This proposal would 
contribute to the orderly marketing of California raisins by mitigating 
the oversupply of raisins early in the crop year, thus stabilizing the 
market conditions for producers and handlers.

DATES: Comments must be received by July 6, 1995.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposal. Comments must be sent in triplicate to the 
Docket Clerk, Fruit and Vegetable Division, AMS, USDA, room 2525-S, 
P.O. Box 96456, Washington, DC 20090-6456, or faxed to (202) 720-5698. 
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.

FOR FURTHER INFORMATION CONTACT: Mark Hessel, Marketing Specialist, 
California Marketing Field Office, Fruit and Vegetable Division, AMS, 
USDA, 2202 Monterey Street, suite 102B, Fresno, California 93721; 
telephone: (209) 487-5901, or fax (209) 487-5906; or Valerie L. Emmer, 
Marketing Specialist, Marketing Order Administration Branch, Fruit and 
Vegetable Division, AMS, USDA, room 2523-S, P.O. Box 96456, Washington, 
DC 20090-6456; telephone: (202) 205-2829, or fax (202) 720-5698.

SUPPLEMENTARY INFORMATION: This proposal is issued under Marketing 
Agreement and Order No. 989 (7 CFR Part 989), as amended, regulating 
the handling of raisins produced from grapes grown in California, 
hereinafter referred to as the ``order.'' This 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 proposal has been reviewed under Executive Order 12778, Civil 
Justice Reform. This proposal would reduce the desirable carryout for 
the 1995-96 crop year, beginning August 1, 1995, through July 31, 1996, 
and for subsequent crop years. This proposal 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 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 the Secretary 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 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 requirements set forth in the Regulatory Flexibility 
Act (RFA), the Administrator of the Agricultural Marketing Service 
(AMS) has considered the economic impact of this action 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 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 marketing order and approximately 4,500 
producers in the regulated area. Small agricultural service firms have 
been defined by the Small Business Administration (13 CFR 121.601) as 
those whose annual receipts (from all sources) are less than 
$5,000,000, and small agricultural producers are defined as those 
having annual receipts of less than $500,000. No more than eight 
handlers and a majority of producers of California raisins may be 
classified as small entities. Twelve of the 20 handlers subject to 
regulation have annual sales estimated to be at least $5,000,000, and 
the remaining eight handlers have sales less than $5,000,000, excluding 
receipts from any other sources.
    This proposed rule would change section 989.154 of the 
administrative rules and regulations of the raisin marketing order. The 
Committee recommended by a vote of 31 to 15 at its April 28, 1995, 
meeting, to adjust the desirable carryout level in section 989.154 from 
the current two and one-half months of shipments to two and one-fourth 
months of shipments during the 1995-96 crop year and to two months of 
shipments in subsequent crop years. The crop year includes the 12-month 
period August 1 through July 31.
    The desirable carryout level is the amount of tonnage from the 
prior crop year needed during the first part of the succeeding crop 
year to meet market needs, before new crop raisins are harvested and 
available for market. [[Page 32281]] Currently, section 989.154 
provides that the desirable carryout levels shall be equal to the 
shipments of free tonnage to all outlets for each varietal type during 
the months of August, September, and one-half of the total shipments 
for the month of October of the prior crop year.
    The desirable carryout figure is used in marketing policy 
calculations to determine trade demand. The trade demand is 90 percent 
of prior year's shipments, adjusted by the carryin and desirable 
carryout. The trade demand is then used to help determine the volume 
regulation percentages for each crop year, if necessary.
    Beginning in the 1991-92 crop year the desirable carryout was 
reduced from three months of shipments to two and one-half months of 
shipments. It was determined that the use of the three month desirable 
carryout level resulted in excessive supplies of marketable tonnage 
early in the season.
    The Committee has used the two and one-half month desirable 
carryout figure for four crop years and has determined that the use of 
this figure also results in an excessive supply of free tonnage at the 
beginning of the marketing season. A majority of the Committee members 
believes that this causes unstable market conditions during the early 
part of the crop year.
    To correct the oversupply of marketable raisin tonnage early in the 
season, the Committee has recommended that the desirable carryout 
levels be revised from two and one-half months of the prior year's 
shipments to two and one-fourth months of the prior year's shipments 
for the 1995-96 crop year and to two months of the prior year's 
shipments for subsequent crop years.
    The change in the desirable carryout levels would reduce the trade 
demand and the free tonnage percentage, and would make less free 
tonnage available to handlers for immediate use. However, handlers 
would still be provided an opportunity to increase their inventories, 
if necessary, by purchasing raisins from the reserve pool under order-
mandated 10 plus 10 offers during November and other releases of 
reserve pool raisins available under the marketing order. The 10 plus 
10 offers are two simultaneous offers of reserve pool raisins which are 
made available to handlers each season. For each such offer, a quantity 
of raisins equal to 10 percent of the prior year's shipments is made 
available for free use. Although this proposed rule would tighten the 
supply of raisins early in the season, handlers would still have the 
opportunity to obtain additional supplies to meet market needs, if 
needed later in the season.
    This proposal is intended to stabilize the early season raisin 
market. Bringing early season supplies in line with market needs is 
expected to stabilize market prices. This price stabilization should 
make raisin buyers less likely to postpone their purchases. Thus, 
decreasing the desirable carryout could strengthen the market and 
increase shipments, which would benefit raisin producers and handlers.
    One alternative that was discussed by the Committee prior to 
recommending this proposed change was to immediately set the desirable 
carryout level at two months of the prior year's shipments. It was 
determined that this was too rapid an adjustment and that first setting 
the desirable carryout levels at two and one-quarter months for the 
1995-96 season and two months in subsequent crop years would be a more 
prudent approach.
    Another alternative considered was setting the desirable carryout 
at a fixed tonnage. However, this alternative does not allow the 
desirable carryout to fluctuate with changing market conditions from 
year to year.
    Those voting in opposition to the recommendation to reduce the 
desirable carryout level believed that the marketing order should not 
further restrict supplies during the early part of the crop year. 
However, the following table shows that adequate supplies of Natural 
(sun-dried) Seedless raisins have been available early in the crop year 
to meet demand. Natural (sun-dried) Seedless raisins represent about 90 
percent of all raisins produced in California. The other two varieties 
which had reserve pools for the 1994-95 crop year, Zante Currant 
raisins and Other Seedless raisins, had carryins far exceeding the 
annual trade demand. ``Carryin'' is synonymous with the ``carryout'' of 
the preceding crop year. All figures are in natural condition tons.

------------------------------------------------------------------------
                                         Desirable                      
                                          carryin                       
                                        (Aug, Sept   Physical   Aug/Sept
               Crop year                  and 1/2    carryin   shipments
                                            Oct       (tons)     (tons) 
                                        shipments)                      
                                          (tons)                        
------------------------------------------------------------------------
1994-95...............................      84,671     92,248     64,374
1993-94...............................      81,867     93,752     67,784
1992-93...............................      82,591    115,440     65,495
1991-92...............................      84,541    109,306     65,613
------------------------------------------------------------------------

    The desirable carryin is set to meet the demand for the early part 
of the crop year (August and September) before the new crop becomes 
available. The actual physical carryin has far exceeded the desirable 
carryin and has resulted in an oversupply of free tonnage during the 
early part of the crop year. The reduction in desirable carryout would 
contribute to correcting the problem by adjusting the free tonnage 
market supply, which would bring it more in line with demand.
    The desirable carryout levels that would be established by this 
proposed rule would apply uniformly to all handlers in the industry, 
whether small or large, and there would be no known additional costs 
incurred by small handlers. The stabilizing effects of the revised 
desirable carryout levels would impact both small and large handlers 
positively by helping them maintain and expand markets.
    In the event that the prior year's shipments are limited because of 
crop conditions, a proviso in section 989.154 allows the committee to 
select the total shipments during the months of August, September and 
one-half of the total shipments for October during one of the three 
years preceding the prior crop year. Consistent with the need to reduce 
early season supplies, this proposed rule would make a corresponding 
revision to this proviso, by changing the total shipments from August, 
September, and one-half of the total shipments for October to the total 
shipments from August and September only.
    Based on available information, the Administrator of the AMS has 
determined that this action would not have a significant economic 
impact on a substantial number of small entities.
    Interested persons are invited to submit their views and comments 
on this proposal. A 15-day comment period is considered appropriate 
because the order requires that the committee meet on or before August 
15 to compute and announce the trade demand. As indicated earlier, the 
desirable carryover is an important factor in that calculation. Thus, a 
decision on whether to issue the Committee's recommendation must be 
made prior to that date. A longer comment period would not provide an 
adequate amount of time to complete this rulemaking by that date. All 
written comments timely received will be considered before a final 
determination is made on this matter.

List of Subjects in 7 CFR Part 989

    Grapes, Marketing agreements, Raisins, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 989 is 
proposed to be amended as follows: [[Page 32282]] 

PART 989--RAISINS PRODUCED FROM GRAPES GROWN IN CALIFORNIA

    1. The authority citation for 7 CFR part 989 continues to read as 
follows:

    Authority: 7 U.S.C. 601-674.

    2. Section 989.154 is revised to read as follows:


Sec. 989.154  Desirable carryout levels.

    The desirable carryout levels to be used in computing and 
announcing a crop year's marketing policy shall be equal to the total 
shipments of free tonnage of the prior crop year during the months of 
August and September, for each varietal type, converted to a natural 
condition basis: Provided, That the desirable carryout levels to be 
used in computing and announcing the 1995-96 crop year's marketing 
policy shall be equal to the total 1994 shipments of free tonnage for 
the months of August and September, and one-fourth of the total 
shipments for the month of October: Provided further, That should the 
prior year's shipments be limited because of crop conditions, the 
Committee may select the total shipments during the months of August 
and September during one of the three crop years preceding the prior 
crop year.

    Dated: June 15, 1995.
Sharon Bomer Lauritsen,
Deputy Director, Fruit and Vegetable Division.
[FR Doc. 95-15106 Filed 6-20-95; 8:45 am]
BILLING CODE 3410-02-P