[Federal Register Volume 65, Number 27 (Wednesday, February 9, 2000)]
[Rules and Regulations]
[Pages 6305-6308]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-2978]



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 Rules and Regulations
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  Federal Register / Vol. 65, No. 27 / Wednesday, February 9, 2000 / 
Rules and Regulations  

[[Page 6305]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 916 and 917

[Docket No. FV99-916-3 FR]


Nectarines and Peaches Grown in California; Revision of Reporting 
Requirements

AGENCY:  Agricultural Marketing Service, USDA.

ACTION:  Final rule.

-----------------------------------------------------------------------

SUMMARY:  This rule revises the rules and regulations of the marketing 
orders (orders) for fresh nectarines and peaches grown in California 
pertaining to reporting requirements. The orders regulate the handling 
of nectarines and peaches grown in California and are administered 
locally by the Nectarine Administrative and Peach Commodity Committees 
(committees). Under the orders, authority is provided for the 
committees to require handlers to file reports on the destinations of 
their shipments of fresh nectarines and peaches. This rule will require 
handlers to file such destination reports. Additional and timely 
information will thus be available to the committees and industry, 
facilitating improved decision making and program administration with 
regard to marketing research and development, and promotional 
activities.

EFFECTIVE DATE:  This final rule becomes effective March 10, 2000.

FOR FURTHER INFORMATION CONTACT:  Terry Vawter, Marketing Specialist, 
California Marketing Field Office, Marketing Order Administration 
Branch, 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, PO Box 96456, Washington, DC 20090-6456; telephone: (202) 720-
2491, Fax: (202) 720-5698.
    Small businesses may request information on complying with this 
regulation 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) 205-5698, or E-mail: [email protected].

SUPPLEMENTARY INFORMATION:  This rule is issued under Marketing 
Agreements Nos. 124 and 85, and Marketing Order Nos. 916 and 917 (7 CFR 
parts 916 and 917) regulating the handling of nectarines and peaches 
grown in California, respectively, hereinafter referred to as the 
``orders.'' The marketing agreements and orders are 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 final 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 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.
    This final rule revises the orders' rules and regulations 
pertaining to reporting requirements under the orders. This rule 
establishes procedures in the orders' rules and regulations for 
handlers to file reports on the destinations of their shipments of 
fresh nectarines and peaches. Under the orders the term ``handler'' is 
synonymous with the term ``shipper.'' This rule was unanimously 
recommended by the committees at their meetings on December 2, 1998.
    In Secs. 916.60 and 917.50 of the orders, authority is provided for 
the committees to require handlers to file reports with the committees. 
The information authorized includes, but is not limited to: (1) The 
name of the shipper and the shipping point; (2) The car or truck 
license number (or name of the trucker), and identification of the 
carrier; (3) The date and time of departure; (4) The number and type of 
containers in the shipment; (5) The quantities shipped, showing 
separately the variety, grade, and size of the fruit; (6) The 
destination; and (7) The identification of the inspection certificate 
or waiver pursuant to which the fruit was handled. Handlers have not 
been required to report the destinations of their shipments of fresh 
nectarines and peaches.
    The Nectarine Administrative Committee's (NAC) and the Peach 
Commodity Committee's (PCC) discussions on destination reports were 
prompted by recommendations of two subcommittees which met prior to the 
December 2, 1998, committee meetings. At a Domestic Promotion 
Subcommittee meeting, the merits of destination reports were discussed, 
among other issues. The subcommittee unanimously recommended adding a 
requirement to the orders' rules and regulations for destination 
reports. The subcommittee believed that having information about 
markets to which nectarines and peaches are shipped will be a valuable 
marketing tool. The members believed that such information will allow 
the subcommittee to target markets more effectively for promotion, and 
permit a more effective analysis of the effectiveness of industry 
funded media and promotional campaigns. At an International Programs 
Subcommittee meeting, the merits of destination

[[Page 6306]]

reports also were discussed. The members of this subcommittee also 
believed that such reports will provide invaluable information to 
assist the NAC and PCC in targeting their promotional activities in the 
most-promising markets for these two fruits.
    The NAC and PCC discussed the subcommittees' recommendations and 
the merits of destination reporting. Both the NAC and PCC agreed that 
the establishment of such a report requiring each handler to list the 
destination of his/her shipments of nectarines and peaches in both 
domestic and international markets will provide invaluable information 
and greatly benefit the industries.
    With destination information from handlers, the committees will be 
able to make better-informed decisions about marketing research and 
development projects conducted, and gauge the success of such 
activities knowing the volume of fruit shipped to various markets. With 
this information, the committees will also be able to direct their 
marketing research and development activities and funds to the most-
promising markets, and tailor the activities to meet the needs of the 
particular markets, focus on the more successful promotional 
activities, and target markets based on consumption.
    Current market analysis tools, such as consumer and retail surveys, 
provide useful information based on a small group of respondents, but 
specific shipment and destination information will enable the 
committees to direct their activities to the most successful markets, 
and perform a more thorough analysis of the benefits of their 
promotional activities.
    Without exact destination information, the committees do not know 
precisely the quantities of nectarines and peaches shipped to various 
markets, and, therefore, may be spending funds on promotional 
activities not appropriate for the particular market. Experience has 
shown that certain types of promotion are appropriate for developing 
markets and other activities are more appropriate when trying to expand 
markets. With the ability to determine the markets to which nectarines 
and peaches are not shipped, the committees will have the ability to 
direct their marketing research and promotion funds to open those 
markets for future shipments. In addition, such information will permit 
the committees to constructively evaluate the effectiveness of their 
marketing promotion and research programs by helping them get a better 
handle on promotions that have been working and those that have not, 
and determine the reason(s) for any lack of success. The industries 
have long recognized the importance of this information in making their 
promotion activities more effective and in helping to sell more 
nectarines and peaches. They have tried voluntary reporting, but this 
has not worked.
    The shipping season for nectarines begins April 1 and ends on 
October 31 of each year, and the shipping season for peaches begins on 
April 1 and ends on November 23 of each year. The destination report 
will be required from all handlers by the fifteenth of the month 
following the month in which the shipments were made. Handlers will be 
required to report the number of packages of peaches and nectarines 
shipped to each destination, and indicate whether the fruit were white-
fleshed or yellow-fleshed, and whether the fruit were ``CA Utility'' 
quality. Destination information for domestic market shipments will 
include the city and state, and zip code, if known. Destination 
information for international market shipments will include the country 
to which shipped.
    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 300 California nectarine and peach handlers 
subject to regulation under the orders covering nectarines and peaches 
grown in California, and about 1,800 producers of these fruits in 
California. Small agricultural service firms, which includes handlers, 
have been defined by the Small Business Administration (13 CFR 121.201) 
as those whose annual receipts are less than $5,000,000. Small 
agricultural producers are defined as those having annual receipts of 
less than $500,000.
    Based upon committees' staff data, it is estimated that there are 
less than 20 handlers in the industry who could be defined as other 
than small entities. If the average handler price received were $9.00 
per box or box equivalent of nectarines or peaches, a handler would 
have to ship at least 555,000 boxes to have annual receipts of 
$5,000,000. Less than 20 handlers ship more than 555,000 boxes of 
nectarines and/or peaches. Small handlers would, therefore, represent 
approximately 94 percent of the handlers within the industry. In 
addition, there are approximately 400 producers who could be defined as 
other than small entities. If the average producer price received were 
$6.00 per box or box equivalent for nectarines and $5.65 per box or box 
equivalent for peaches, producers would have to produce approximately 
84,000 boxes or box equivalents of nectarines and approximately 89,000 
boxes or box equivalents of peaches to have annual receipts of 
$500,000. More than 1,400 producers produce less than 84,000 boxes of 
nectarines or 89,000 boxes of peaches. Therefore, small producer 
entities would represent approximately 78 percent of the producers 
within the industry. For these reasons, a majority of the handlers and 
producers may be classified as small entities.
    This final rule revises Secs. 916.160 and 917.178 of the orders' 
administrative rules and regulations to require handlers to file 
destination reports on a monthly basis during the shipping season by 
adding a new paragraph (c) to each section. The information obtained 
from such reports will improve decision making and program 
administration with regard to marketing research and development 
activities undertaken to expand shipments of fresh nectarines and 
peaches domestically and in foreign markets.
    Two comments were received as a result of a proposed rule published 
in the Federal Register on June 7, 1999 (64 FR 30252). The commenters 
raised issues concerning both the initial regulatory impact analysis 
and the information collection requirements, as proposed. These 
comments are discussed more fully later in this document.
    Requiring handlers to file this report on a monthly basis will 
impose an additional reporting burden on both small and large handlers. 
The report is estimated to take three-quarters of an hour to complete. 
It is further estimated that handlers will file an average of four 
destination reports per year, creating an estimated total annual burden 
of three hours per handler. The total industry annual burden is, 
therefore, estimated at approximately 900 hours per year for nectarine 
and peach shipments each.
    Although this action creates an additional burden on handlers of 
fresh nectarines and peaches, the benefits of

[[Page 6307]]

collecting additional and timely information regarding destinations are 
anticipated to outweigh the estimated increased reporting burden. The 
committees will have detailed information about markets to which fruit 
is sent; and, therefore, will be able to make better-informed decisions 
about marketing research and promotion fund expenditures and activities 
undertaken. Such reports and forms will be filed by all handlers, 
regardless of size; and thus, the increased burden will be equitably 
distributed to all handlers. Finally, 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 accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the information collection requirements that are contained 
in this rule have been approved by the Office of Management and Budget 
(OMB) and have been assigned OMB No. 0581-0072 for documents required 
under the nectarine marketing order, and OMB No. 0581-0080 for 
documents required under the peach marketing order. The estimated 
burden has been revised based upon a comment received. The revised 
estimated total annual burden for nectarine and peach handlers is 
reduced from 1,200 hours to 900 hours. As previously stated, this 
comment is discussed more fully later in the document. In addition, the 
Department has not identified any relevant Federal rules that 
duplicate, overlap, or conflict with this final rule.
    An alternative to this action would be to continue operations 
without required destination reporting. Most committee members agreed 
that the value of having destination information outweighed the burden 
on handlers of filing such reports in terms of targeting marketing and 
promotion funds and activities. In recent years, the committees have 
decided to keep their marketing and promotion expenses relatively 
constant. Because of this, the committee members felt that greater 
emphasis should be placed on using the funds to their greatest 
advantage.
    All committee members agreed that continuing to spend promotion 
funds, without the information to be provided by destination reports, 
was not in the best interest of the industries. Further, as the 
percentage of promotion funds either decreases or remains constant in 
relationship to total committee funds, and as shipments of nectarines 
and peaches increase over time, detailed information on the 
destinations of nectarine and peach shipments will be valuable in 
targeting promising markets. The committee members also noted that 
voluntary destination reports have been requested in the past, but very 
few handlers provided the information. The committees, therefore, voted 
unanimously at all the meetings to require destination reports from 
nectarine and peach handlers.
    During the deliberations, some committee members indicated their 
concern that destination information will not be kept confidential by 
committee staff. The Act states, in part, in Sec. 608d(2), that ``all 
information furnished to or acquired by the Secretary of Agriculture 
pursuant to this section, as well as information for marketing order 
programs that is categorized as trade secrets and commercial or 
financial information * * *, shall be kept confidential by all officers 
and employees of the Department of Agriculture.'' In addition, 
Secs. 916.60(d) and 917.50(d) of the orders also require committee 
employees to maintain confidentiality of all reports and records 
submitted by handlers. Therefore, each handler is generally protected 
against disclosure of any confidential information the handler 
furnishes to the committees. Further, under the Act, persons found 
guilty of revealing confidential information could be subject to a 
fine, imprisonment, or both, or could be removed from office.
    The committee meetings were widely publicized throughout the tree 
fruit industry and all interested persons were invited to express their 
views and participate in committee deliberations on all issues. Like 
all committee meetings, the December 2, 1998, meetings were public 
meetings, and all entities, large and small, were able to express their 
views on this issue. The subcommittee meetings were also public 
meetings at which large and small entities were invited to express 
their views and participate in all deliberations. Finally, interested 
persons were invited to submit information on the regulatory and 
informational impacts of this action on small businesses.
    A proposed rule concerning this action was published in the Federal 
Register on June 7, 1999 (64 FR 30252). The proposal also announced 
AMS's intent to request a revision to the currently approved 
information collection requirements issued under the orders. Copies of 
the proposal were also mailed to handlers on June 9, 1999, by the 
California Tree Fruit Agreement staff, who conduct day-to-day business 
operations for the committees. Finally, the proposed rule was made 
available through the Internet by the Office of the Federal Register. A 
60-day comment period, ending August 6, 1999, was provided to allow 
interested persons to respond to the proposal.
    Two comments were received during the comment period in response to 
the proposal. One commenter, a handler, made two points concerning the 
proposed rule. First, the commenter was of the view that the proposed 
information to be collected was not necessary to ensure the high 
quality of nectarines and peaches and adequate returns to producers. 
This commenter went on to state that the marketing orders have never 
been concerned with the returns to the producer, only moving the crop 
at whatever price necessary to move it, in addition to collecting the 
mandatory assessment. The Department disagrees with the commenter's 
views. The marketing orders were issued consistent with the provisions 
of the Act. The regulations issued in this rulemaking are authorized 
under the orders and their purpose is to provide additional and timely 
information to the committees and the industries, thereby facilitating 
improved decision making and program administration with regard to 
marketing research and development, and promotional activities. 
Accordingly, the Department believes that the information required by 
the regulations is needed to accomplish their stated objectives.
    With regard to the commenter's second point, the commenter stated 
that the number of producers that are small entities should be based on 
an average of boxes shipped over 3-5 years. The regulatory flexibility 
analysis discusses and sets forth the identification and estimates of 
small entities under criteria established by the Small Business 
Administration. The information is based on the most current and 
accurate information available, and, as such, the Department believes 
is best suited to accomplish the objectives of the Regulatory 
Flexibility Act and this program. The commenter went on to state that 
there should be a minimum of perhaps 50,000 shipped boxes before a 
destination report should be required of producers who are also 
handlers. While minimum exemptions are and have been used as an 
alternative in a variety of regulatory schemes, they may not be 
appropriate in all programs. For example, with regard to this program, 
a second commenter noted that given the structure of the industries, it 
was important that all handlers report their destinations and that the 
report be compiled collectively to measure trends and to analyze 
marketing effectiveness. Accordingly, given the purpose and nature of 
these regulations, the

[[Page 6308]]

Department does not believe that a minimum exemption is appropriate. 
Further, based upon information in another comment received concerning 
the proposed rule, the committees have revised the detail in the forms 
to be used to further minimize the burden.
    The second commenter, the manager of the California Tree Fruit 
Agreement, the body which manages the PCC and NAC, supported the 
proposed rule, stating that destination reports will help in providing 
information for the committees to make long-term decisions designed to 
improve the marketing of nectarines and peaches grown in California. 
This commenter noted, as well, the importance of requiring all handlers 
to file destination reports. This commenter also discussed requirements 
for similar information in other programs, the confidentiality of the 
information submitted, and the need to finalize this action as soon as 
possible.
    The comment went on to state that the NAC and the PCC have revised 
the destination reports since the proposed rule was issued to make it 
more simple for handlers to complete. For example, requested 
information concerning grade and size has been removed, and zip code 
information would be required only if known by the handler. Reporting 
``CA Utility'' quality fruit also would be required. It was suggested 
that the computer technology that is being used in the industries may 
also assist handlers in completing the destination report in less time 
that it would take to complete the report by hand.
    The Department has revised its estimate of the time it would take 
to complete the destination report from one hour to three-quarters of 
an hour. The revised estimated total annual burden to nectarine and 
peach handlers is reduced from 1,200 hours to 900 hours.
    Accordingly, appropriate changes have been made to the rule as 
proposed, based on this second comment. Finally, this rule will be 
effective for the beginning of the 2000 shipping season.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at the 
following website: http://www.ams.usda.gov/fv/moab.html. Any questions 
about the compliance guide should be sent to Jay Guerber at the 
previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    After consideration of all relevant matters presented, including 
the information and recommendation submitted by the committees and 
other available information, it is hereby found that this rule, as 
hereinafter set forth, will tend to effectuate the declared policy of 
the Act.

List of Subjects

7 CFR Part 916

    Marketing agreements, Nectarines, Reporting and recordkeeping 
requirements.

7 CFR Part 917

    Marketing agreements, Peaches, Pears, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR parts 916 and 917 
are amended as follows:
    1. The authority citation for 7 CFR parts 916 and 917 continues to 
read as follows:

    Authority:  7 U.S.C. 601-674.

PART 916--NECTARINES GROWN IN CALIFORNIA

    2. In Sec. 916.160, paragraph (c) is added to read as follows:


Sec. 916.160  Reporting procedure.

* * * * *
    (c) Destination report. Each shipper who ships nectarines shall 
furnish to the manager of the Nectarine Administrative Committee a 
report of the number of packages of nectarines shipped to each 
destination, and whether the nectarines were yellow-fleshed or white-
fleshed, and whether the nectarines were ``CA Utility'' quality. The 
destination is defined as nectarine shipments to any domestic or 
international market. Destination information for domestic market 
shipments shall include city and state, and zip code, if known. 
Destination information for international market shipments shall 
include the country to which shipped. This report shall be submitted by 
the fifteenth of each month following the month in which nectarine 
shipments were made.

PART 917--PEACHES GROWN IN CALIFORNIA

    3. In Sec. 917.178, paragraph (c) is added to read as follows:


Sec. 917.178  Peaches.

* * * * *
    (c) Destination report. Each shipper who ships peaches shall 
furnish to the manager of the Control Committee a report of the number 
of packages of peaches shipped to each destination, and whether the 
peaches shipped were yellow-fleshed or white-fleshed, and whether the 
peaches were ``CA Utility'' quality. The destination is defined as 
peach shipments to any domestic or international market. Destination 
information for domestic market shipments shall include the city and 
state, and zip code, if known. Destination information for 
international market shipments shall include the country to which 
shipped. This report shall be submitted by the fifteenth of each month 
following the month in which peach shipments were made.

    Dated: February 3, 2000.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 00-2978 Filed 2-8-00; 8:45 am]
BILLING CODE 3410-02-P