[Federal Register Volume 61, Number 2 (Wednesday, January 3, 1996)]
[Rules and Regulations]
[Pages 100-102]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-26]



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DEPARTMENT OF AGRICULTURE
7 CFR Part 989

[FV95-989-5IFR]


Raisins Produced From Grapes Grown in California; Reduction in 
the Production Cap for the 1996 Raisin Diversion Program for Natural 
(Sun-dried) Seedless Raisins

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This interim final rule invites comments on a reduction of the 
production cap for the 1996 Raisin Diversion Program (RDP) for Natural 
(sun-dried) Seedless raisins. The production cap, which limits the 
amount of raisin tonnage per acre for which an RDP participant can 
receive credit, is reduced from 2.75 tons per acre to 2.2 tons per acre 
for this program. This reduction is intended to bring the production 
cap for 1996 in line with 1995 production per acre, which was 
approximately 20 percent smaller than the 1994 crop yield per acre. 
This rule was unanimously recommended by the Raisin Administrative 
Committee (Committee), the body which locally administers the marketing 
order.

DATES: This interim final rule becomes effective January 3, 1996. 
Comments which are received by January 18, 1996 will be considered 
prior to any finalization of this interim final rule.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this action. 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. 
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: Richard Van Diest, 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 Mark A. Slupek, Marketing 
Specialist, Marketing Order Administration Branch, Fruit and Vegetable 
Division, AMS, USDA, room 2523-S, P.O. Box 96456, Washington, DC 20090-
6456; telephone: 202-205-2830.

SUPPLEMENTARY INFORMATION: This interim final rule is issued under 

[[Page 101]]
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.''
    The Department of Agriculture (Department) is issuing this rule in 
conformance with Executive Order 12866.
    This interim final rule has been reviewed under Executive Order 
12778, Civil Justice Reform. Under the marketing order provisions now 
in effect, the production cap for the RDP is 2.75 tons per acre, but it 
may be reduced with the approval of the Secretary. This rule 
establishes a production cap of 2.2 tons per acre for the 1996 RDP. 
This rule is not intended to have retroactive effect. This interim 
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 exempt 
therefrom. Such 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/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 raisin 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.
    The authority for the RDP and implementing rules and regulations 
are specified in Secs. 989.56 and 989.156, respectively. The purpose of 
the RDP is to give producers the means to voluntarily reduce their 
raisin production. Each approved producer who has removed grapes in 
accordance with rules and regulations receives a diversion certificate 
from the Committee. Such certificates represent reserve tonnage raisins 
equal to the amount of raisins diverted. That is, the amount of grape 
acreage removed from production (for RDP purposes) multiplied by the 
producer's previous crop year yield in tons per acre, or multiplied by 
the production cap if the previous year's actual yield exceeds the cap.
    These certificates may be submitted by producers only to handlers. 
The handler pays the producer for the free tonnage applicable to the 
diversion certificate minus the established harvest cost for the entire 
tonnage shown on the certificate. Factors reviewed by the Committee in 
determining allowable harvest costs are specified in 
Sec. 989.156(a)(1).
    Any handler holding diversion certificates may redeem such 
certificates with the Committee for reserve pool raisins. To redeem a 
certificate, the handler must present the certificate to the Committee 
and pay the Committee an amount equal to the established harvest costs 
plus an amount equal to the payment for receiving, storing, fumigating, 
handling, and inspecting reserve tonnage raisins specified in 
Sec. 989.401 for the entire tonnage represented on the certificate.
    The marketing order requires the Committee to meet on or before 
November 30 of each crop year to review production data, supply data, 
demand data, inventory, and other matters relating to the quantity of 
raisins available to or needed by the market. If the Committee decides 
that the current crop year's reserve pool has more than enough raisins 
to meet projected market needs, it can announce the amount of such 
excess eligible for diversion during the subsequent crop year. The 
administrative rules and regulations established under the order 
require that such announcement be made on or before November 30 of each 
year.
    A production cap of 2.75 tons of raisins per acre is established 
under the order for any production unit of a producer approved for 
participation in an RDP. When the diversion tonnage is announced, the 
Committee may recommend, subject to the approval of the Secretary, that 
the production cap for that RDP be less than 2.75 tons per acre. The 
production cap limits the yield that a producer can claim and is 
designed to allow most high yield producers to participate in an RDP. 
When the cap was added to the marketing order in 1989, only 8 percent 
of raisin producers exceeded the 2.75 tons per acre yield. Producers 
who historically produce yields above the production cap can choose to 
produce a crop rather than participate in a diversion program. No 
producer is required to participate in an RDP.
    A producer who wants to participate in an RDP must apply to the 
Committee. The producer must specify, among other things, the raisin 
production and the acreage covered by the application. The Committee 
verifies producers' production claims using handler acquisition reports 
and other available information. However, a producer could misrepresent 
production by claiming that some raisins produced on one ranch were 
produced on another, and use an inflated yield on the RDP application. 
Thus, the production cap limits the amount of raisins for which a 
producer participating in an RDP may be credited, and protects the 
program from overstated production yields.
    For example, a producer whose actual yield was 2.5 tons per acre 
might claim that the yield was 3.5 tons per acre on the RDP 
application. The current production cap would allow that producer to 
receive a diversion certificate for 2.75 tons per acre, which is 0.25 
tons above the actual yield but far less than the 1.0 ton which would 
have been improperly credited if the diversion certificate had been 
based on a yield of 3.5 tons per acre. The production cap reduces the 
amount of inflated tonnage which could be improperly credited and 
allows more producers to participate. When the production cap is more 
in line with the 

[[Page 102]]
actual yield per acre, the total quantity of raisins available under 
the RDP can be allocated to more applicants. A producer who actually 
produced 3.5 tons per acre might decide to produce a raisin crop rather 
than apply for the RDP and be subject to the production cap.
    The Committee met on November 27, 1995, and reviewed data relating 
to the quantity of reserve pool raisins and anticipated market needs. 
The Committee decided that the 1995-96 reserve pool had more raisins 
than necessary to meet projected market needs and announced that 20,000 
tons of Natural (sun-dried) Seedless raisins would be eligible for 
diversion under the 1996 RDP.
    The Committee members believe that the current production cap is 
too high because 1995 crop year yields per acre are down 20 percent 
compared to 1994. The Committee, therefore, unanimously recommended a 
reduction in the production cap of 20 percent, from 2.75 tons per acre 
to 2.2 tons per acre for the 1996 RDP, based on 1995 production. 
Reducing the production cap proportionately to the decrease in yield 
per acre is more reflective of actual production yields during the 1995 
crop year.
    A 15-day comment period was deemed appropriate for this rule 
because the submission deadlines for applications and corrected 
applications for the 1996 RDP are December 20, 1995, and January 12, 
1996, respectively, and the Department would like to make its final 
decision available as quickly as possible.
    The information collection requirement (i.e., the RDP application) 
referred to in this rule has been previously approved by the Office of 
Management and Budget (OMB) under the provisions of 44 U.S.C. Chapter 
35 and has been assigned OMB number 0581-0083.
    Based on available information, the Administrator of the AMS has 
determined that the issuance of this interim final rule will not have a 
significant economic impact on a substantial number of small entities.
    After consideration of all relevant information presented, 
including the Committee's recommendations and other information, it is 
found that this regulation, as hereinafter set forth, will tend to 
effectuate the declared policy of the Act.
    Pursuant to 5 U.S.C. 553, it is also found and determined upon good 
cause that it is impracticable, unnecessary, and contrary to the public 
interest to give preliminary notice prior to putting this rule into 
effect, and that good cause exists for not postponing the effective 
date of this rule until 30 days after publication in the Federal 
Register because: (1) The submission deadlines for producer 
applications and corrected applications for the 1996 RDP are December 
20, 1995, and January 12, 1996, respectively, and producers need to 
know about the reduced production cap as soon as possible, to make a 
decision on whether or not to apply; (2) producers are aware of this 
action, which was recommended by the Committee at an open meeting; (3) 
the program is voluntary, and any producer who objects to the reduced 
production cap can choose to produce a raisin crop for delivery during 
1996; and (4) this interim final rule provides a 15-day period for 
written comments and all comments received will be considered prior to 
finalization of this interim final rule.

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 
amended to read as follows:

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. A new paragraph (t) is added to Sec. 989.156 of Subpart--
Administrative Rules and Regulations (7 CFR Part 989.102-989.176) to 
read as follows:


Sec. 989.156  Raisin diversion program.

* * * * *
    (t) Pursuant to Sec. 989.56(a), the production cap for the 1996 
Raisin Diversion Program for the Natural (sun dried) Seedless varietal 
type is 2.2 tons of raisins per acre.

    Dated: December 26, 1995.
Sharon Bomer Lauritsen,
Deputy Director, Fruit and Vegetable Division.
[FR Doc. 96-26 Filed 1-2-96; 8:45 am]
BILLING CODE 3410-02-P