[Federal Register Volume 61, Number 34 (Tuesday, February 20, 1996)]
[Rules and Regulations]
[Pages 6307-6309]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3609]



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DEPARTMENT OF AGRICULTURE
7 CFR Part 989

[FV95-989-5FIR]


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: 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 
which reduced 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, was 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.

EFFECTIVE DATE: March 21, 1996.

FOR FURTHER INFORMATION CONTACT: Richard P. 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 final 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.''
    The Department of Agriculture (Department) is issuing this rule in 
conformance with Executive Order 12866.
    This rule has been reviewed under Executive Order 12778, 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 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. 

[[Page 6308]]

    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 production 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 rule finalizes the establishment of a production cap of 2.2 
tons per acre for the 1996 RDP. This action was unanimously recommended 
by the Raisin Administrative Committee (Committee), the body which 
locally administers the order.
    The interim final rule being finalized was issued on December 26, 
1995, and published in the Federal Register (61 FR 100, January 3, 
1996), with an effective date of January 3, 1996. That rule added a new 
paragraph (t) to Sec. 989.156 of the rules and regulations in effect 
under the order. That rule provided a 15-day comment period which ended 
January 18, 1996. No comments were received.
    The authority for the RDP and implementing rules and regulations 
are specified in Sec. 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 certificates 
represent 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 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 20,000 ton maximum eligible level was determined to be 
inappropriate since later information indicated that the excess tonnage 
in the 1995-96 reserve pool was not as large as had been earlier 
expected. The Committee met again on December 18, 1995, and announced, 
therefore, that applications from producers who intended to remove 
their grape vines would be accepted, but that other applications would 
be rejected. After reviewing the applications, the Committee determined 
that approximately 2,221 tons of Natural (sun-dried) Seedless raisins 
will be eligible for diversion under the 1996 RDP.
    The Committee members also believed that the former production cap 
was too high because 1995 crop year yields per acre were 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 more 

[[Page 6309]]
accurately reflected actual production yields during the 1995 crop 
year.
    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 these considerations, 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 information presented, 
including the Committee's recommendations and other information, it is 
found that finalizing the interim final rule, without change, as 
published in the Federal Register (61 FR 100, January 3, 1996) 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.

    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

    Accordingly, the interim final rule amending 7 CFR part 989, which 
was published at 61 FR 100 on January 3, 1996, is adopted as a final 
rule without change.

    Dated: February 12, 1996.
Sharon Bomer Lauritsen,
Deputy Director, Fruit and Vegetable Division.
[FR Doc. 96-3609 Filed 2-16-96; 8:45 am]
BILLING CODE 3410-02-P