[Federal Register Volume 65, Number 27 (Wednesday, February 9, 2000)]
[Proposed Rules]
[Pages 6341-6344]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-2980]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 989

[Docket No. FV00-989-2 PR]


Raisins Produced From Grapes Grown in California; Increase in 
Compensation Rate for Handlers' Services Performed Regarding Reserve 
Raisins

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule invites comments on increasing, by approximately 15 
percent, the compensation rate for handlers' services performed in 
connection with reserve 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). These 
changes are necessary to reflect current industry costs.

DATES: Comments must be received by April 10, 2000.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposal. Comments must be sent to the Docket Clerk, 
Marketing Order Administration Branch, Fruit and Vegetable Programs, 
AMS, USDA, room 2525-S, PO Box 96456, Washington, DC 20090-6456; Fax: 
(202) 720-5698, or E-mail: [email protected]. All comments 
should reference the docket number and the date and page number of this 
issue of the Federal Register and will be made available for public 
inspection in the Office of the Docket Clerk during regular business 
hours.

FOR FURTHER INFORMATION CONTACT: Maureen T. Pello, 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, or Fax: (202) 720-5698.
    Small businesses may request information on complying with this 
regulation by contacting Jay Guerber, Marketing Order Administration

[[Page 6342]]

Branch, Fruit and Vegetable Programs, AMS, USDA, PO Box 96456, room 
2525-S, Washington, DC 20090-6456; telephone (202) 720-2491, Fax: (202) 
720-5698; or E-mail: [email protected].

SUPPLEMENTARY INFORMATION: This proposal 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 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.
    This rule invites comments on increasing the compensation rate for 
handlers' services performed in connection with reserve raisins covered 
under the order. Under the order, handlers are compensated for 
receiving, storing, fumigating, and handling reserve tonnage raisins 
acquired during a crop year. This rule would increase this rate from 
$40 to $46 per ton to reflect current industry costs. This action was 
unanimously recommended by the Committee on November 10, 1999. 
Additional payment for reserve raisins held beyond the crop year of 
acquisition would be increased from $2.00 to $2.30 per ton for the 
first 3 months, and from $1.03 to $1.18 per ton per month for the 
remaining 9 months. This action was unanimously recommended by the 
Committee on January 13, 2000.
    The order provides authority for volume regulation designed to 
promote orderly marketing conditions, stabilize prices and supplies, 
and improve producer returns. When volume regulation is in effect, a 
certain percentage of the California raisin crop may be sold by 
handlers to any market (free tonnage) while the remaining percentage 
must be held by handlers in a reserve pool (or reserve) for the account 
of the Committee. Reserve raisins are disposed of through certain 
programs authorized under the order. For instance, reserve raisins may 
be sold by the Committee to handlers for free use; used in diversion 
programs; carried over as a hedge against a short crop the following 
year; or disposed of in other outlets not competitive with those for 
free tonnage raisins, such as government purchase, distilleries, or 
animal feed. Proceeds generated from sales of reserve raisins are also 
used to support handler sales to export markets, which are generally 
lower-priced than the domestic market. Net proceeds from sales of 
reserve raisins are distributed to the reserve pool's equity holders, 
primarily producers.
    Section 989.66(f) of the order specifies that handlers be 
compensated for receiving, storing, fumigating, and handling that 
tonnage of reserve raisins determined by the reserve percentage of a 
crop year and held by them for the account of the Committee, in 
accordance with a schedule of payments established by the Committee and 
approved by the Secretary. Such compensation is paid by the Committee 
to handlers as soon as practicable after the end of the second quarter 
of the crop year (January) and quarterly thereafter. The crop year runs 
from August 1 through July 31. The order also requires that the 
Committee review this rate annually.
    Section 989.401(a) of the order's rules and regulations specifies 
that handlers be compensated at a rate of $40 per ton (natural 
condition weight at the time of acquisition) for receiving, storing, 
fumigating, and handling reserve raisins acquired during a particular 
crop year. The Committee conducted a survey among handlers to obtain 
data on the current costs of receiving, storing, fumigating, and 
handling raisins. The survey showed that such costs ranged from about 
$40 to $71.50 per ton. After analyzing the survey, the Committee 
recommended that the compensation rate provided for such services 
performed in connection with reserve raisins be increased from $40 to 
$46 per ton to reflect current industry costs. Paragraph (a)(1) of 
Sec. 989.401 is proposed to be modified accordingly.
    In addition, the Committee recommended that payment to handlers for 
reserve raisins held beyond the end of a crop year be increased by the 
same percentage (15 percent). Additional payment for reserve raisins 
held beyond the crop year of acquisition would be increased from $2.00 
to $2.30 per ton for the first 3 months (August through October), and 
from $1.03 to $1.18 per ton per month for the remaining 9 months 
(November through July). Appropriate modifications are proposed to 
paragraph (b) of Sec. 989.401.
    This rule would also make a minor correction to paragraph (b) of 
Sec. 989.401. That paragraph, which, as indicated above, specifies the 
additional payment for reserve raisins held beyond the crop year of 
acquisition, states such additional payment for months reflecting a 
crop year from September 1 through August 31. However, the order was 
amended in 1976 to change the crop year from August 1 through July 31. 
Thus, the first 3 months of the crop year should be August through 
October, rather than September through November, and the remaining 9 
months of the crop year would be the period November through July. 
Accordingly, appropriate modifications are proposed to paragraph (b) of 
Sec. 989.401.
    Finally, this rule would make a conforming change to paragraph (c) 
of Sec. 989.401 regarding rental payment on boxes and bins containing 
raisins held beyond the crop year of acquisition. Persons who furnish 
boxes or bins used for storing reserve raisins are compensated for the 
use of such containers. Section 989.401(c) currently reflects a crop 
year from September 1 through August 31 and should be modified to 
reflect the current August 1 through July 31 crop year. Appropriate 
changes are proposed to Sec. 989.401(c).
    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 initial 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

[[Page 6343]]

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 121.201) 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. Thirteen of the 20 handlers have annual sales 
estimated to be at least $5,000,000, and the remaining 7 handlers have 
estimated sales less than $5,000,000, excluding receipts from any other 
sources. No more than 7 handlers, and a majority of producers, of 
California raisins may be classified as small entities.
    Pursuant to Sec. 989.66(f) of the order, this rule would increase 
the compensation rate for handlers' services performed in connection 
with reserve raisins covered under the order. This rule would revise 
paragraphs (a)(1) and (b) of Sec. 989.401, respectively, to increase 
the handlers' compensation for receiving, storing, fumigating, and 
handling reserve raisins acquired during a particular crop year from 
$40 to $46 per ton, and increase such additional payment for reserve 
raisins held beyond the crop year of acquisition from $2.00 to $2.30 
per ton for the first 3 months (August through October), and from $1.03 
to $1.18 per ton per month for the remaining 9 months (November through 
July). These changes are necessary to reflect current industry costs. 
Conforming changes are also proposed to paragraphs (b) and (c) of 
Sec. 989.401 to reflect the current August 1 through July 31 crop year.
    Regarding the impact of this rule on affected entities, handlers 
and producers, the order provides that handlers store reserve raisins 
for the account of the Committee. Net proceeds from sales of such 
reserve raisins are distributed back to the reserve pool's equity 
holders, primarily producers. Handlers are compensated from reserve 
pool funds for their costs in receiving, storing, fumigating, and 
handling reserve raisins. Currently, handlers are compensated at a rate 
of $40 per ton for reserve raisins acquired during a particular crop 
year. For example, for the 1997-98 crop year, about 130,000 tons of 
raisins were held in reserve, and handlers were compensated a total of 
about $5.7 million from the 1997-98 reserve pool. A Committee survey 
showed that handler costs regarding reserve raisins has increased in 
recent years and that handlers have been absorbing these costs. 
Increasing the $40 per ton fee to $46 per ton for reserve raisins 
acquired during a particular crop year would more appropriately reflect 
the costs incurred by handlers and thereby reduce net proceeds to 
equity holders. There should be no disproportionate impact of this 
proposed action on small entities. Costs are allocated to equity 
holders based on their proportionate share of raisins in the reserve 
pool. In addition, this cost is incorporated into the price of reserve 
raisins that are sold to handlers for free use. Thus, the reserve pool 
is ultimately reimbursed for some of this cost.
    Other alternatives to the proposed rates were considered by the 
raisin industry prior to the Committee's recommendations. The 
Committee's Administrative Issues Subcommittee met on November 9, 1999, 
and considered rates of $44 and $50 per ton for services performed in 
connection with reserve raisins acquired during a crop year. 
Ultimately, the Committee concluded that the proposed $46 per ton rate 
for services performed during the year of acquisition, and comparable 
rates for the succeeding crop year, were appropriate.
    This proposed rule would increase the compensation rate for 
handlers' services regarding reserve tonnage raisins. Accordingly, this 
action would 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 sector agencies. Finally, the Department has not identified 
any relevant Federal rules that duplicate, overlap or conflict with 
this proposed rule.
    In addition, the Committee's Administrative Issues Subcommittee 
meeting on November 9, 1999, and the Committee meetings on November 10, 
1999, and on January 13, 2000, where this action was deliberated were 
all public meetings widely publicized throughout the raisin industry. 
All interested persons were invited to attend the meetings and 
participate in the industry's deliberations. Finally, all interested 
persons are invited to submit information on the regulatory and 
informational impacts of this action on small businesses.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at the 
following web site: 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.
    A 60-day comment period is invited to allow interested persons to 
respond to this proposal. All written comments timely received will be 
considered before a final determination is made on this matter.

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 
proposed to be amended as follows:

PART 989--RAISINS PRODUCED FROM GRAPES GROWN IN CALIFORNIA

    1. The authority citation for 7 CFR part 989 continues to read as 
follows:

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

    2. In Sec. 989.401, paragraphs (a)(1), (b), and (c) are revised to 
read as follows:


Sec. 989.401  Payments for services performed with respect to reserve 
tonnage raisins.

    (a) Payment for crop year of acquisition.--(1) Receiving, storing, 
fumigating, and handling. Each handler shall be compensated at a rate 
of $46 per ton (natural condition weight at the time of acquisition) 
for receiving, storing, fumigating, and handling the reserve tonnage 
raisins, as determined by the final reserve tonnage percentage, 
acquired during a particular crop year and held by the handler for the 
account of the Committee during all or any part of the same crop year.
* * * * *
    (b) Additional payment for reserve tonnage raisins held beyond the 
crop year of acquisition. Additional payment for reserve tonnage 
raisins held beyond the crop year of acquisition shall be made in 
accordance with this paragraph. Each handler holding such raisins for 
the account of the Committee on August 1 shall be compensated for 
storing, handling, and fumigating such raisins at the rate of $2.30 per 
ton per month, or any part thereof, between August 1 and October 31, 
and at the rate of $1.18 per ton per month, or any part thereof, 
between November 1 and July 31. Such services shall be completed so 
that the Committee is assured that the raisins are maintained in good 
condition.
    (c) Payment of rental on boxes and bins containing raisins held 
beyond the crop year of acquisition. Payment of rental on boxes and 
bins containing

[[Page 6344]]

reserve tonnage raisins held beyond the crop year of acquisition shall 
be made in accordance with this paragraph. Each handler, producer, 
dehydrator, and other person who furnishes boxes or bins in which such 
raisins are held for the account of the Committee on August 1 shall be 
compensated for the use of such boxes and bins. The rate of 
compensation shall be: For boxes, two and one-half cents per day, not 
to exceed a total payment of $1 per box per year, per average net 
weight of raisins in a sweatbox, with equivalent rates for raisins in 
boxes other than sweatboxes; and for bins 20 cents per day per bin, not 
to exceed a total of $10 per bin per year. For purposes of this 
paragraph, box means any container with a capacity of less than 1,000 
pounds and bin means any container with a capacity of 1,000 pounds, or 
more. The average net weight of raisins in each type of box shall be 
the industry average as computed by the Committee for the box in which 
the raisins are so held. No further compensation shall be paid unless 
the raisins are so held in the boxes on the succeeding August 1.
* * * * *

    Dated: February 3, 2000.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 00-2980 Filed 2-8-00; 8:45 am]
BILLING CODE 3410-02-P