[Federal Register Volume 62, Number 115 (Monday, June 16, 1997)]
[Rules and Regulations]
[Pages 32473-32476]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-15669]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 989
[FV97-989-1 FIR]
Raisins Produced From Grapes Grown In California; Final Free and
Reserve Percentages for the 1996-97 Crop Year 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 established final free and reserve percentages for 1996-97 crop
Natural (sun-dried) Seedless raisins. The percentages are 86 percent
free and 14 percent reserve. These percentages are intended to
stabilize supplies and prices, and strengthen market conditions. This
rule was recommended by the Raisin Administrative Committee
(Committee), the body which locally administers the marketing order.
EFFECTIVE DATE: July 16, 1997.
FOR FURTHER INFORMATION CONTACT: Maureen Pello, Marketing Specialist,
California Marketing Field Office, Fruit and Vegetable Division, AMS,
USDA, 2202 Monterey Street, suite 102B, Fresno, California 93721;
telephone: 209-487-5901, Fax (209) 487-5906; 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. Small businesses may request
information on compliance with this regulation by contacting: Jay
Guerber, Marketing Order Administration Branch, Fruit and Vegetable
Division, AMS, USDA, P.O. Box 96456, room 2525-S, Washington, DC 20090-
6456; telephone (202) 720-2491; Fax # (202) 720-5698.
SUPPLEMENTARY INFORMATION: This 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 marketing
agreement and order are
[[Page 32474]]
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 12988, 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 rule finalizes an
interim final rule which established final free and reserve percentages
for Natural (sun-dried) Seedless raisins for the 1996-97 crop year,
beginning August 1, 1996, through July 31, 1997. 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 or
her principal place of business, has jurisdiction in equity 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.
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, which is responsible for local administration of the
order. Under the order, reserve raisins may be: Sold at a later date by
the Committee to handlers for free use or to replace part of the free
raisins they exported; 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 may restrict the amount of Natural (sun-dried)
Seedless raisins that enter domestic markets, final free and reserve
percentages are intended to promote stronger marketing conditions, to
stabilize prices and supplies, and to improve 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, such as a national emergency, crop failure, change of
economic or marketing conditions, or if free tonnage shipments during
the current crop year exceed shipments of the prior crop year by more
than 5 percent.
The Department's ``Guidelines for Fruit, Vegetable, and Specialty
Crop Marketing Orders'' specify 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 releases 100 percent of
the computed trade demand and the additional release 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. Approximately 59,000 tons of Natural (sun-
dried) Seedless were purchased by handlers for free use pursuant to
these offers. The quantity available under this rule would be about
406,000 tons natural condition raisins or 381,000 tons packed raisins.
This is 129 percent of the quantity shipped in 1995.
Pursuant to section 989.54(a) of the order, the Committee met on
August 15, 1996, to review shipment data, inventory data, and the 1995
crop conditions for 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 and September. 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 a 1996-97 trade demand
of 232,765 tons for Natural (sun-dried) Seedless raisins.
As required under section 989.54(b) of the order, the Committee met
on October 3, 1996, and computed and announced a preliminary crop
estimate and preliminary free and reserve percentages for Natural (sun-
dried) Seedless raisins which released 85 percent of the trade demand.
On October 3, 1996, the Committee's crop estimate and preliminary free
and reserve percentages were as follows: 272,034 tons, and 73 percent
free and 27 percent reserve.
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,
Zante Currant, Sultana, Muscat, Monukka, and Other Seedless raisins.
The Committee determined, however, that volume control percentages only
were warranted for Natural (sun-dried) Seedless raisins. It determined
that the supplies of the other varietal types would be less than or
close enough to the computed trade demands for each of these varietal
types. These varietal types are produced in much smaller quantities
than Natural (sun-dried) Seedless raisins. In view of these factors,
volume control percentages either would not be necessary to maintain
market stability or would not be economically practical for the other
varietal types.
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. Interim percentages for
Natural (sun-dried) Seedless raisins of 85.75 percent free and 14.25
percent reserve were announced by the Committee on February 3, 1997.
The Committee considered its final estimate of 270,999 tons of 1996-97
production of Natural (sun-dried) Seedless raisins when it established
the interim percentages. That action released most, but not all, of the
computed trade demand for Natural (sun-dried) Seedless raisins.
[[Page 32475]]
In addition, 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 met
on February 3, 1997, for this purpose.
The computed trade demand (232,765 tons) is 90 percent of the prior
year's shipments of free tonnage and reserve tonnage raisins sold for
free use into all market outlets (282,289 tons), adjusted by
subtracting the carryin of each varietal type on August 1 of the
current crop year (113,697 tons) and by adding to the trade demand the
desirable carryout for each varietal type at the end of that crop year
(64,173 tons). No information was presented between the August 15,
1996, meeting and the February 3, 1997, meeting to cause the Committee
to make any change to the computed trade demand. Thus, the Committee
divided the computed trade demand of 232,765 tons by the final
production estimate (270,999 tons) and recommended a final free
percentage of 86 percent and a final reserve percentage of 14 percent.
The free and reserve percentages established by the interim final
rule finalized herein apply uniformly to all handlers in the industry,
whether small or large, and there are no known additional costs
incurred by small handlers. Although raisin markets are limited, they
are available to all handlers, regardless of size. The stabilizing
effects of the percentages impact both small and large handlers
positively by helping them maintain and expand markets.
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. Accordingly, AMS has
prepared this final regulatory flexibility analysis.
There are approximately 20 handlers of California raisins who are
subject to regulation under the raisin marketing order and
approximately 4,500 producers of raisins in the regulated area. Small
agricultural service firms, which includes handlers, have been defined
by the Small Business Administration (13 CFR 121.601) as those having
annual receipts of less than $5,000,000, and small agricultural
producers are defined as those having annual receipts of less than
$500,000. No more than 8 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 8 handlers have sales less than
$5,000,000, excluding receipts from any other sources.
Committee and subcommittee meetings are widely publicized in
advance and are held in a location central to the production area. The
meetings are open to all industry members (including small business
entities) and other interested persons--who are encouraged to
participate in the deliberations and voice their opinions on topics
under discussion. Thus, Committee recommendations can be considered to
represent the interests of small business entities in the industry.
Many years of marketing experience led to the development of the
current volume control procedures. These procedures have helped the
industry address its marketing problems by keeping supplies in balance
with domestic and export market needs, and strengthening market
conditions. The current volume control procedures fully supply the
domestic and export markets, provide for market expansion, and help
prevent oversupplies in the domestic market.
In discussing the possibility of marketing percentages for the
1996-97 crop year, the Committee considered: (1) The estimated tonnage
held by producers, handlers, and for the account of the Committee at
the beginning of the crop year (113,697 tons); (2) the estimated
tonnage of standard raisins which will be produced in 1996-97 (270,999
tons); (3) the trade demand for raisins in free tonnage outlets in
1996-97 (232,765 tons); (4) the estimated desirable carryout at the end
of the 1996-97 crop year for free tonnage (64,173 tons); (5) the
estimated world raisin supply and demand situation; (6) the current
prices being received and the probable level of prices to be received
for raisins by producers and handlers; and (7) the trend and level of
consumer income.
The Committee's review of the factors resulted in the computation
and announcement in October 1996 of preliminary free and reserve
percentages for Natural (sun-dried) Seedless raisins. This varietal
type is the major commercial varietal type produced in California.
Although the 1996-97 crop was estimated to be down from previous crop
years, the total supply available for marketing (270,999 tons) exceeded
the computed trade demand (232,765 tons) by a large enough quantity
(38,234 tons) to support limiting the quantity available for sale in
free tonnage markets by placing a portion of the crop aside to be sold
when demand improved in the current or subsequent season.
This rule finalizes an interim final rule which established free
and reserve percentages for Natural (sun-dried) Seedless raisins in
accordance with the volume control provisions in section 989.54.
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, which is responsible for local
administration of the order. Under the order, reserve raisins may be:
Sold at a later date by the Committee to handlers for free use or to
replace part of the free use raisins they exported; 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. The
percentage releases provide all handlers with the opportunity to
benefit from the most profitable domestic market. That market is
available to all handlers, regardless of handler size.
Raisin variety grapes can be marketed as fresh grapes, crushed for
use in the production of wine or juice concentrate, or dried into
raisins. Annual fluctuations in the fresh grape, wine, and concentrate
markets cause fluctuations in raisin supply. These supply fluctuations
can cause producer price instability and disorderly market conditions.
Volume control is helpful to the raisin industry because it lessens the
impact of such fluctuations and contributes to orderly marketing.
Industry statistics show that Natural (sun-dried) Seedless raisin
receipts have varied widely over the last ten years, from a low of
325,911 tons in 1995 to a high of 395,501 tons in 1989. Average
receipts for the last 10 years have been around 365,000 tons. As crop
size has fluctuated, volume regulations have contributed toward orderly
marketing and market stability, and have helped moderate the variation
in returns for all growers and handlers, both large and small. For
instance, handler receipts in the shortest crop year (1995) were 89
percent of the ten-year average (1986-1995). Handler receipts in the
biggest crop year (1989) were 108 percent of the ten-year average.
Free and reserve percentages are established by variety, and only
in years when the supply exceeds the trade demand by a large enough
margin that the Committee believes volume control is necessary to
maintain market stability. Accordingly, in assessing whether to apply
volume control regulation or, as an alternative, not to
[[Page 32476]]
apply such regulation, the Committee recommended only one of the 9
raisin varietal types defined under the marketing order for volume
control regulation this season.
As mentioned earlier, the Department's ``Guidelines for Fruit,
Vegetable, and Specialty Crop Marketing Orders'' specify that 110
percent of recent years' sales should be made available to primary
markets each season before recommendations for volume regulation are
approved. The quantity available under this rule is 129 percent of the
quantity shipped in 1995.
The free and reserve percentages established by the interim final
rule released the full trade demand and apply uniformly to all handlers
in the industry, regardless of size. There are no known additional
costs incurred by small handlers that are not incurred by large
handlers. The stabilizing effects of the percentages impact all
handlers positively by helping them maintain and expand markets,
despite seasonal supply fluctuations. Likewise, price stability
positively impacts all producers by allowing them to better anticipate
the revenues their raisins will generate.
While the level of benefits of this rulemaking are difficult to
quantify, the stabilizing effects of the volume regulations impact both
small and large handlers positively by helping them maintain markets
even though raisin supplies fluctuate widely from season to season.
This rule will not impose any additional reporting or recordkeeping
requirements on either small or large raisin handlers. As with all
Federal marketing order programs, reports and forms are periodically
reviewed to reduce information requirements and duplication by industry
and public sectors. In addition, as noted in the initial regulatory
flexibility analysis, the Department has not identified any relevant
Federal rules that duplicate, overlap, or conflict with this rule.
An interim final rule concerning this action was issued by the
Department on April 7, 1997, put on display at the Office of the
Federal Register on April 11, 1997, and published in the Federal
Register on April 14, 1997. Copies of the rule were mailed by the
Committee's staff to all Committee members, raisin handlers, and
dehydrators. Finally, the rule was made available through the Internet
by the Office of the Federal Register. That rule provided for a 30-day
comment period which ended May 14, 1997. No comments were received.
After consideration of all relevant material presented, including
the Committee's recommendation, and other information, it is found that
finalizing the interim final rule, without change, as published in the
Federal Register (62 FR 18029, April 14, 1997) 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 62 FR 18029 on April 14, 1997, is adopted as a final
rule without change.
Dated: June 6, 1997.
Eric M. Forman,
Acting Director, Fruit and Vegetable Division.
[FR Doc. 97-15669 Filed 6-13-97; 8:45 am]
BILLING CODE 3410-02-P