[Federal Register Volume 64, Number 9 (Thursday, January 14, 1999)]
[Rules and Regulations]
[Pages 2425-2428]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-842]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 989

[FV99-989-1 FIR]


Raisins Produced From Grapes Grown In California; Relaxations to 
Substandard and Maturity Dockage Systems

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, an interim final rule relaxing the 
substandard and maturity dockage systems for raisins covered under the 
Federal marketing order for California raisins (order). The order 
regulates the handling of raisins produced from grapes grown in 
California and is administered locally by the Raisin Administrative 
Committee (Committee). Relaxing the limits for the 1998 crop reduces 
the number of lots of raisins returned by handlers to producers or 
reconditioned by handlers at the producers' expense. This minimizes 
producers' reconditioning costs and facilitates 1998 crop deliveries.

EFFECTIVE DATE: February 16, 1999.

FOR FURTHER INFORMATION CONTACT: Maureen T. Pello, Marketing 
Specialist, California Marketing Field Office, Fruit and Vegetable 
Programs, AMS, USDA, 2202 Monterey Street, suite 102B, Fresno, 
California 93721; telephone: (559) 487-5901, Fax: (559) 487-5906; or 
George Kelhart, Technical Advisor, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box 
96456, Washington, DC 20090-6456; telephone: (202) 720-2491, or Fax: 
(202) 205-6632. Small businesses may request information on complying 
with this regulation, or obtain a guide on complying with fruit, 
vegetable, and specialty crop marketing agreements and orders by 
contacting Jay Guerber, Marketing Order Administration Branch, Fruit 
and Vegetable Programs, AMS, USDA, P.O. Box 96456, room 2525-S, 
Washington, DC 20090-6456; telephone (202) 720-2491, Fax: (202) 205-
6632, or E-mail: Jay__N__G[email protected]. You may view the marketing 
agreement and order small business compliance guide at the following 
web site: http://www.ams.usda.gov/fv/moab.html.

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 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 is issuing this rule in conformance with Executive 
Order 12866.
    This rule has been reviewed under Executive Order 12988, 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 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 an action is filed not 
later than 20 days after the date of the entry of the ruling.
    Under the order, handlers may acquire raisins from producers under 
a weight dockage system and adjust the creditable fruit weight acquired 
according to the percentage of substandard raisins in a lot, or 
percentage of raisins that fall below certain levels of maturity. 
Certain marketing order obligations and producer payments are based on 
the creditable weight of raisins acquired by handlers. Because of 
unusual crop conditions this year created by the weather phenomenon 
known as El Nino, the industry predicted that a relatively high 
percentage of the 1998-99 crop will fall outside the limits of the 
substandard and maturity dockage systems.
    This rule continues to relax the substandard and maturity dockage 
systems for raisins covered under the order. Under the order, handlers 
may acquire raisins from producers under a weight dockage system and 
adjust the creditable fruit weight acquired

[[Page 2426]]

according to the percentage of substandard raisins in a lot, or 
percentage of raisins that fall below certain levels of maturity. Some 
marketing order obligations (assessments and volume control) and 
producer payments are based on the creditable weight of raisins 
acquired by handlers. Because of unusual crop conditions this year 
created by the weather phenomenon known as El Nino, the industry 
predicted that a relatively high percentage of the 1998-99 crop will 
fall outside the limits of the substandard and maturity dockage 
systems. Relaxing the limits for the 1998 crop reduces the number of 
lots of raisins returned by handlers to producers or reconditioned by 
handlers at the producers' expense. This minimizes producers' 
reconditioning costs and facilitates 1998 crop deliveries. This rule 
was unanimously recommended by the Committee at a meeting on October 8, 
1998.
    Section 989.58(a) of the order provides authority for quality 
control regulations whereby natural condition raisins that are 
delivered by producers to handlers must meet certain incoming quality 
requirements. This section also contains authority for handlers to 
acquire natural condition raisins which fall outside the tolerance 
established for maturity, which includes substandard raisins, under a 
weight dockage system. Handler acquisitions of raisins and payments to 
producers are adjusted according to the percentage of substandard 
raisins in a lot, or percentage of raisins that fall below certain 
levels of maturity.

Tolerances for Substandard Raisins

    Section 989.701 of the order's regulations specifies incoming 
quality requirements for natural condition raisins. Lots of raisins may 
contain a maximum percentage, depending on varietal type, of 
substandard raisins (raisins that show development less than that 
characteristic of raisins prepared from fairly well-matured grapes). 
Specifically, lots of Natural (sun-dried) Seedless, Golden Seedless, 
Dipped Seedless, Oleate and Related Seedless, Monukka, and Other 
Seedless raisin may contain no more than 5 percent, by weight, of 
substandard raisins. Lots of Muscat, Sultana, and Zante Currant raisins 
may contain no more than 12 percent, by weight, of substandard raisins.

Dockage System for Substandard Raisins

    Section 989.212 provides that handlers may acquire, under an 
agreement with a producer, raisins that fall outside the tolerance for 
substandard raisins specified in Sec. 989.701. Prior to implementation 
of an interim final rule on October 24, 1998 (63 FR 56781), handlers 
could acquire any lot of Natural (sun-dried) Seedless, Golden Seedless, 
Dipped Seedless, Oleate and Related Seedless, Monukka, and Other 
Seedless raisins containing from 5.1 through 17.0 percent, by weight, 
substandard raisins under a weight dockage system. Handlers could also 
acquire, subject to prior agreement, any lot of Muscat (including other 
raisins with seeds), Sultana, and Zante Currant raisins containing from 
12.1 through 20.0 percent, by weight, of substandard raisins under a 
weight dockage system. The creditable weight of each lot of raisins 
acquired by handlers under the substandard dockage system is obtained 
by multiplying the applicable net weight of the lot of raisins by the 
applicable dockage factor in the tables in Sec. 989.212. The dockage 
factor reduces the weight of the raisin lot by an amount approximating 
the weight of the raisins needed to be removed in order for the 
remainder of the lot to meet minimum grade requirements after 
processing and packing. The weight determined in this manner represents 
the creditable weight of the raisins which is used as a basis for 
applicable marketing order obligations and handler payments to 
producers. Those raisins failing to meet established substandard 
tolerance levels are returned to the producer or reconditioned by the 
handler (at the producer's expense) to bring the lot up to acceptable 
quality standards.
    Adverse crop conditions this year created by the weather phenomenon 
known as El Nino affected the quality of the grapes used to make 
raisins by not allowing the grapes to properly mature. Temperatures in 
the production area stayed below average until about mid-June. In 
addition, due to the lateness of the 1998 crop (at least 3 to 4 weeks), 
producers had difficulty finding sufficient labor to harvest the crop. 
Raisin deliveries from producers to handlers were about 3-4 weeks later 
than in most crop years. The Committee predicted that a relatively high 
percentage of the 1998-99 crop would not meet the upper limit (17.0 or 
20.0 percent, depending on varietal type) for the amount of substandard 
raisins permitted in incoming lots of raisins.
    Thus, the Committee recommended that the allowable amount of 
substandard fruit in producer deliveries that can be acquired under the 
dockage system be increased, for the 1998-99 crop year only, from 17.0 
to 25.0 percent for Natural (sun-dried) Seedless, Golden Seedless, 
Dipped Seedless, Oleate and Related Seedless, Monukka, and Other 
Seedless raisins. Likewise, the Committee recommended increasing the 
substandard dockage limit, for the 1998-99 crop year only, from 20.0 to 
35.0 percent for Muscat (including other raisins with seeds), Sultana, 
and Zante Currant raisins. Lots containing more than 25.0 or 35.0 
percent, depending on varietal type, of substandard raisins are 
considered off-grade and require reconditioning before they can be 
acquired by handlers. Appropriate changes incorporating these 
recommendations were made to Sec. 989.212 and apply for the 1998-99 
crop year only.
    Increasing the upper limit allowed for substandard raisins reduces 
the number of lots of raisins returned by handlers to producers or 
reconditioned by handlers at the producers' expense. Handlers may 
acquire more lots of raisins upon first inspection without experiencing 
further delay while waiting for failing lots to be reconditioned. The 
ability to acquire more raisins upon first inspection helped handlers 
better meet early season market needs.

Tolerance for Maturity

    Section 989.701 of the order's regulations specifies that lots of 
certain varietal types of natural condition raisins must contain a 
minimum percentage of raisins that are well-matured or reasonably well-
matured. Specifically, lots of Natural (sun-dried) Seedless, Golden 
Seedless, Dipped Seedless, Oleate and Related Seedless, Monukka, and 
Other Seedless raisins must contain at least 50 percent, by weight, of 
raisins that are well-matured or reasonably well-matured, or what is 
commonly referred to by the industry as the ``B or better'' maturity 
standard.

Dockage System for Maturity

    Section 989.213 provides that handlers may acquire, under an 
agreement with a producer, raisins falling outside the tolerance for 
maturity specified in Sec. 989.701. Prior to implementation of the 
previously referenced interim final rule on October 24, 1998, handlers 
could acquire any lot of Natural (sun-dried) Seedless, Golden Seedless, 
Dipped Seedless, Oleate and Related Seedless, Monukka, and Other 
Seedless raisins which contained from 35.0 to 49.9 percent, by weight, 
of well-matured or reasonably well-matured raisins under a weight 
dockage system. The dockage system is applied similarly to the 
substandard dockage system previously described. The creditable weight 
of each lot of raisins acquired by handlers under the maturity dockage

[[Page 2427]]

system is obtained by multiplying the applicable net weight of the lot 
of raisins by the applicable dockage factor in the tables in 
Sec. 989.213. The dockage factor reduces the weight of the raisins 
needed to be removed in order for the remainder of the lot to meet 
minimum maturity requirements after processing and packing. The weight 
determined in this manner represents the creditable weight of the 
raisins which is used as a basis for applicable marketing order 
obligations and handler payments to producers. Those raisins failing to 
meet the established maturity tolerance level are returned to the 
producer or reconditioned by the handler (at the producer's expense) to 
bring the lot up to acceptable quality standards. If a lot of raisins 
is subject to both a maturity and substandard dockage factor, only the 
highest of the two dockage factors is applied.
    In addition, prior to implementation of the interim final rule, the 
maturity dockage system was divided into three categories depending on 
the percentage of well-matured or reasonably well-matured raisins in a 
lot. The creditable fruit weight of raisins delivered by producers to 
handlers in the first category, which included lots containing between 
45.0 to 49.9 percent well-matured or reasonably well-matured raisins, 
was reduced .05 percent for each 0.1 percent the lot was below 50.0 
percent down to 45.0 percent. The creditable fruit weight of raisins 
delivered by producers to handlers in the second category, which 
included lots containing between 40.0 to 44.9 percent well-matured or 
reasonably well-matured raisins, was reduced 0.1 percent for each 0.1 
percent the lot was below 44.9 percent down to 40.0 percent. The 
creditable fruit weight of raisins delivered by producers to handlers 
in the third category, which included lots containing between 35.0 to 
39.9 percent well-matured or reasonably well-matured raisins, was 
reduced 0.15 percent for each 0.1 percent the lot was below 39.9 
percent down to 35.0 percent. Applicable marketing order obligations 
and producer payments were reduced accordingly.
    Because of the unusual crop conditions this year created by El 
Nino, the Committee predicted that a relatively high percentage of the 
1998-99 crop will fall below the 35.0 percent tolerance level for 
maturity. Thus, the Committee recommended that the minimum allowable 
level for maturity in lots of raisins delivered by producers that can 
be acquired under the dockage system be reduced, for the 1998-99 crop 
year only, from 35.0 to 30.0 percent.
    The Committee also recommended that the creditable fruit weight of 
raisin deliveries in this fourth category created for the 1998-99 crop 
year, or lots containing between 30.0 to 34.9 percent well-matured or 
reasonably well-matured raisins, be reduced 0.2 percent for each 0.1 
percent the lot is below 34.9 percent down to 30.0 percent. Applicable 
marketing order obligations and producer payments are reduced 
accordingly. Lots containing 29.9 percent or less raisins which are 
well-matured or reasonably well-matured raisins are considered off-
grade and require reconditioning before they can be acquired by 
handlers. A new paragraph (e) has been added to Sec. 989.213 for this 
fourth category and applies only to the 1998-99 crop year.
    Similar to relaxing the substandard dockage system, reducing the 
minimum allowable level for maturity for the 1998-99 crop year reduces 
the number of lots of raisins returned by handlers to producers or 
reconditioned by handlers at the producers' expense. Handlers may 
acquire more lots of raisins upon first inspection without experiencing 
further delay while waiting for failing lots to be reconditioned and 
reinspected. The ability to acquire more raisins upon first inspection 
helped handlers better meet early season market needs.

Final Regulatory Flexibility Analysis

    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.
    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 order and approximately 4,500 raisin 
producers in the regulated area. Small agricultural service firms 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 7 handlers, and a majority of 
producers, of California raisins may be classified as small entities. 
Thirteen of the 20 handlers subject to regulation have annual sales 
estimated to be at least $5,000,000, and the remaining 7 handlers have 
sales less than $5,000,000, excluding receipts from any other sources.
    This rule continues to relax the substandard and maturity dockage 
systems specified in Secs. 989.212 and 989.213, respectively, of the 
order's regulations. These sections allow handlers to acquire raisins 
from producers under a weight dockage system and adjust their payments 
and marketing order obligations according to the percentage of 
substandard raisins in a lot, or percentage of raisins falling below 
certain levels of maturity. Because of unusual crop conditions this 
year created by El Nino, the industry predicted that a relatively high 
percentage of the 1998 crop will fall outside the limits of the dockage 
systems. Relaxing the limits reduces the number of lots of raisins 
returned by handlers to producers or reconditioned by handlers at the 
producers' expense.
    Relaxing the dockage limits for the 1998-99 crop year allows 
handlers to acquire more lots of raisins that fall outside specified 
tolerances for substandard raisins and maturity. Thus, fewer lots are 
returned to producers for reconditioning. Transportation costs for 
hauling raisins to and from the handler's premises (estimated at $5.00 
per ton one way) for reconditioning and re-inspection are eliminated. 
Producers also save on reconditioning costs. Producer costs for 
reconditioning substandard raisins (a ``dry'' vacuuming process) are 
estimated at $20.00 per ton. Producer costs for reconditioning raisins 
falling below certain maturity levels (usually a ``wash and dry'' 
process) are estimated at $140.00 per ton. Producers also save on re-
inspection costs at $8.50 per ton because more of their raisins meet 
the relaxed incoming substandard and maturity requirements upon first 
inspection. In summary, producers whose lots of raisins fall into the 
extended dockage limits for substandard raisins do not have to incur 
$38.50 per ton in costs for hauling, ``dry'' reconditioning, and re-
inspection. Producers whose lots fall into the revised dockage limits 
for maturity do not have to incur $158.00 per ton in costs for hauling, 
``wet'' reconditioning, and re-inspection.
    Relaxing the dockage limits may cause handlers to incur some 
additional costs because, while the incoming quality requirements are 
relaxed, outgoing quality requirements remain unchanged. Thus, the 
burden of removing substandard raisins or raisins falling below certain 
levels of maturity

[[Page 2428]]

is shifted from producers to handlers. Although handlers have this 
additional burden, handlers can more efficiently and economically 
manage the situation because they already have the processing equipment 
designed to remove the undesirable fruit.
    The Committee considered some alternatives to the recommended 
action. The Committee has an appointed subcommittee which periodically 
holds public meetings to discuss changes to the order and other issues. 
The subcommittee met on October 6, 1998. There was some deliberation at 
the subcommittee meeting about revising the order's tolerances for mold 
for the 1998-99 crop year. However, the majority of subcommittee 
members did not support any change to the mold tolerances at this time.
    Another alternative discussed at the subcommittee and Committee 
meetings was to reduce the maturity dockage limit from 35.0 to 30.0 
percent, as recommended, but revise the dockage factor by 0.15 percent 
rather than the higher increment of 0.20 percent as recommended by the 
Committee. However, some handlers believe that the higher incremental 
dockage is necessary to accommodate a handler's ability to meet the 
minimum outgoing quality requirements for maturity. Thus, the Committee 
unanimously recommended that the higher increment of 0.20 percent was 
appropriate.
    This rule imposes no 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 sector agencies. 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.
    In addition, the Committee's subcommittee meeting on October 6, 
1998, and the Committee meeting on October 8, 1998, where this action 
was deliberated were public meetings widely publicized throughout the 
raisin industry. All interested persons were invited to attend the 
meetings and participate in the industry's deliberations.
    An interim final rule concerning this action was published in the 
Federal Register on October 23, 1998, and, as previously noted, 
effective on October 24, 1998. Copies of the rule were mailed to all 
Committee members and alternates, the Raisin Bargaining Association, 
handlers, and dehydrators. In addition, the rule was made available 
through the Internet by the Office of the Federal Register. That rule 
provided for a 60-day comment period which ended December 22, 1998. 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 (63 FR 56781), 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.

    Accordingly, the interim final rule amending 7 CFR part 989 which 
was published at 63 FR 56781 on October 23, 1998, is adopted as a final 
rule without change.

    Dated: January 8, 1999.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 99-842 Filed 1-13-99; 8:45 am]
BILLING CODE 3410-02-U