[Federal Register Volume 61, Number 136 (Monday, July 15, 1996)]
[Rules and Regulations]
[Pages 36814-36816]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-17869]


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DEPARTMENT OF AGRICULTURE
7 CFR Part 989

[FV96-989-1FIR]


Raisins Produced From Grapes Grown in California; Final Free and 
Reserve Percentages for the 1995-96 Crop Year for Natural (Sun-Dried) 
Seedless, Zante Currant, and Other 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 established final free and reserve percentages for 1995-96 crop 
Natural (sun-dried) Seedless (NS), Zante Currant (ZC), and Other 
Seedless (OS) raisins. The percentages are 79 percent free and 21 
percent reserve, 70 percent free and 30 percent reserve, and 51 percent 
free and 49 percent reserve for NS, ZC, and OS raisins, respectively. 
These percentages are intended to stabilize supplies and prices and to 
help counter the destabilizing effects of the burdensome oversupply 
situation facing the raisin industry. This rule was unanimously 
recommended by the Raisin Administrative Committee (Committee), the 
body which locally administers the marketing order.

EFFECTIVE DATE: August 14, 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.


[[Page 36815]]


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. Under the marketing order provisions now in effect, 
final free and reserve percentages may be established for raisins 
acquired by handlers during the crop year. This action finalizes final 
free and reserve percentages for NS, ZC, and OS raisins for the 1995-96 
crop year, beginning August 1, 1995, through July 31, 1996. 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 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 to review the Secretary's 
ruling on the petition, provided an action is filed not later than 20 
days after the date of the entry of the ruling.
    An interim final rule was published in the Federal Register on 
February 26, 1996 (61 FR 7067), with an effective date of February 26, 
1996. That rule established final free and reserve percentages for NS, 
ZC, and OS raisins for the 1995-96 crop year. The percentages were 
established in a new section 989.249 of the rules and regulations in 
effect under the marketing order. That rule provided a 30-day comment 
period which ended March 27, 1996. No comments were received.
    The order prescribes procedures for computing trade demands and 
preliminary and final percentages that establish the amount of raisins 
that can be marketed throughout the season. The regulations apply to 
all handlers of California raisins. Raisins in the free percentage 
category may be shipped immediately to any market, while reserve 
raisins must be held by handlers in a reserve pool for the account of 
the Committee. Under the order, reserve raisins may be: Sold at a later 
date by the Committee to handlers for free use; used in diversion 
programs; exported to authorized countries; carried over as a hedge 
against a short crop the following year; or disposed of in other 
outlets noncompetitive with those for free tonnage raisins.
    While this rule continues in effect restrictions limiting the 
amount of NS, ZC, and OS raisins that enter domestic markets, final 
free and reserve percentages are intended to lessen the impact of the 
oversupply situation facing the industry and promote stronger marketing 
conditions, thus stabilizing prices and supplies and improving grower 
returns. In addition to the quantity of raisins released under the 
preliminary percentages and the final percentages, the order specifies 
methods to make available additional raisins to handlers by requiring 
sales of reserve pool raisins for use as free tonnage raisins under 
``10 plus 10'' offers, and authorizing sales of reserve raisins under 
certain conditions.
    The Department's ``Guidelines for Fruit, Vegetable, and Specialty 
Crop Marketing Orders'' specifies that 110 percent of recent years' 
sales should be made available to primary markets each season before 
recommendations for volume regulation are approved. This goal is met by 
the establishment of a final percentage which makes available 100 
percent of the computed trade demand and the additional offering of 
reserve raisins to handlers under ``10 plus 10'' offers. 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. A total of 62,578 tons of NS, 960 tons 
of ZC, and 638 tons of OS were purchased by handlers for free use 
pursuant to these offers.
    Pursuant to section 989.54(a) of the order, the Committee met on 
August 15, 1995, to review shipment and inventory data, and other 
matters relating to the supplies of raisins of all varietal types. The 
Committee computed a trade demand for each varietal type for which a 
free tonnage percentage might be recommended. The trade demand is 90 
percent of the prior year's shipments of free tonnage and reserve 
tonnage raisins sold for free use for each varietal type into all 
market outlets, adjusted by subtracting the carryin of each varietal 
type on August 1 of the current crop year and by adding to the trade 
demand the desirable carryout for each varietal type at the end of that 
crop year. As specified in section 989.154, the desirable carryout for 
each varietal type shall be equal to the shipments of free tonnage 
raisins of the prior crop year during the months of August, September, 
and one fourth of October. If the prior year's shipments are limited 
because of crop conditions, the total shipments during that period of 
time during one of the three years preceding the prior crop year may be 
used. In accordance with these provisions, the Committee computed and 
announced 1995-96 trade demands of 257,314 tons, 2,208 tons, and 1,047 
tons for NS, ZC, and OS raisins, respectively.
    As required under section 989.54(b) of the order, the Committee met 
on October 3, 1995, and computed and announced preliminary crop 
estimates and preliminary free and reserve percentages for NS and ZC 
raisins which released 65 percent of the trade demand since the field 
prices had not been established, and 85 percent of the trade demand for 
OS raisins because the field price had been established. The 
preliminary crop estimates and preliminary free and reserve percentages 
were as follows: 335,118 tons, 50 percent free, and 50 percent reserve 
for NS raisins; 3,696 tons, 39 percent free, and 61 percent reserve for 
ZC raisins; and 2,197 tons, 40 percent free, and 60 percent reserve for 
OS raisins. The Committee authorized the Committee staff to modify the 
preliminary percentages to release 85 percent of the trade demand when 
the field prices were established for NS and ZC raisins. The 
preliminary percentages for NS and ZC raisins were adjusted soon 
thereafter to 65 percent free, 35 percent reserve, and 51 percent free 
and 49 percent reserve, respectively.
    Also at that meeting, the Committee computed and announced 
preliminary crop estimates and preliminary free and reserve percentages 
for Dipped Seedless, Oleate and Related Seedless, Golden Seedless, 
Sultana, Muscat, and Monukka raisins. It determined that the supplies 
of these varietal types would be less than or close enough to the 
computed trade demands for each variety, and that volume control 
percentages would not be necessary to maintain market stability for 
these varietal types.

[[Page 36816]]

    On January 12, 1996, the Committee recommended final percentages of 
79 percent free, 21 percent reserve for NS raisins; 70 percent free, 30 
percent reserve for ZC raisins; and 51 percent free, 49 percent reserve 
for OS raisins.
    Pursuant to section 989.54(c), the Committee may adopt interim free 
and reserve percentages. Interim percentages may release less than the 
computed trade demand for each varietal type. The Committee also 
computed interim free and reserve percentages at the January 12, 1996, 
meeting. Interim percentages were announced as 78.75 percent free, 
21.25 percent reserve for NS raisins; 69.75 percent free, 30.25 percent 
reserve for ZC raisins; and 50.75 percent free, 49.25 percent reserve 
for OS raisins. That action released most, but not all, of the computed 
trade demand for NS, ZC, and OS raisins.
    Under section 989.54(d) of the order, the Committee is required to 
recommend to the Secretary, no later than February 15 of each crop 
year, final free and reserve percentages which, when applied to the 
final production estimate of a varietal type, will tend to release the 
full trade demand for any varietal type.
    The Committee's final estimate of 1995-96 production of NS raisins 
is 325,808 tons. Dividing the computed trade demand of 257,314 tons by 
the final estimate of production results in a final free percentage of 
79 percent and a final reserve percentage of 21 percent for NS raisins.
    The Committee's final estimate of 1995-96 production of ZC raisins 
is 3,158 tons. Dividing the computed trade demand of 2,208 tons by the 
final estimate of production results in a final free percentage of 70 
percent and a final reserve percentage of 30 percent for ZC raisins.
    The Committee's final estimate of 1995-96 production of OS raisins 
is 2,048 tons. Dividing the computed trade demand of 1,047 tons by the 
final estimate of production results in a final free percentage of 51 
percent and a final reserve percentage of 49 percent for OS raisins.
    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.
    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 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.
    In recent years, the California raisin industry has been faced with 
a burdensome oversupply. A major reason for its oversupply problem is 
that wineries have not been purchasing as many raisin variety grapes. 
Raisin variety grapes which wineries will not buy generally are dried 
into raisins. The volume control procedures specified in the order 
provide a means of lessening the impact of year-to-year variations in 
raisin supplies on producer prices. The percentages contribute toward 
orderly marketing and market stability.
    The free and reserve percentages established by the interim final 
rule, and continued in effect, without change, by this rule, apply 
uniformly to all handlers in the industry, whether small or large, and 
release the full trade demand. There are no known additional costs 
incurred by small handlers that are not incurred by large handlers. As 
the season progressed, additional quantities of the trade demand were 
released. For some varieties of raisins, no volume control was 
implemented.
    Although raisin markets are limited, they are available to all 
handlers, regardless of size. While the level of benefits of this 
action are difficult to quantify, the stabilizing effects of the 
percentages impact both small and large handlers positively by helping 
them maintain and expand markets even though raisin supplies fluctuate 
from season to season. Between the 1989-90 and 1994-95 crop years, 
total California raisin shipments increased by three percent, which 
benefitted both small and large handlers.
    Accordingly, the Agricultural Marketing Service has determined that 
the issuance of this final rule will not have a significant economic 
impact on a substantial number of small entities in the California 
raisin industry.
    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 on February 26, 1996 (61 FR 7067), 
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

    Accordingly, the interim final rule amending 7 CFR part 989 which 
was published at 61 FR 7067 on February 26, 1996, is adopted as a final 
rule without change.

    Dated: July 8, 1996.
Robert C. Keeney,
Director, Fruit and Vegetable Division.
[FR Doc. 96-17869 Filed 7-12-96; 8:45 am]
BILLING CODE 3410-02-P