[Federal Register Volume 65, Number 93 (Friday, May 12, 2000)]
[Rules and Regulations]
[Pages 30525-30527]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-11922]



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 Rules and Regulations
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  Federal Register / Vol. 65, No. 93 / Friday, May 12, 2000 / Rules and 
Regulations  

[[Page 30525]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 989

[Docket No. FV00-989-2 FR]


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule increases, 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.

EFFECTIVE DATE: August 1, 2000.

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, P.O. 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 
Branch, Fruit and Vegetable Programs, AMS, USDA, P.O. 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 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 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 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 final rule increases 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 increases 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 will 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

[[Page 30526]]

(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 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 is thus 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). Paragraph (b) of Sec. 989.401 is modified 
accordingly.
    This final rule also makes 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 are August through October, 
rather than September through November, and the remaining 9 months of 
the crop year are the period November through July. Paragraph (b) of 
Sec. 989.401 is modified accordingly.
    Finally, this final rule makes 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 is modified to reflect the 
current August 1 through July 31 crop year.
    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 121.201) 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 
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 increases the 
compensation rate for handlers' services performed in connection with 
reserve raisins covered under the order. This rule revises 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 increases 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 made 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 more appropriately reflects the 
costs incurred by handlers and thereby reduces net proceeds to equity 
holders. There should be no disproportionate impact of this 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 rates adopted herein 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 $46 per ton rate for 
services performed during the year of acquisition, and comparable rates 
for the succeeding crop year, were appropriate.
    This final rule increases the compensation rate for handlers' 
services regarding reserve tonnage raisins. Accordingly, this action 
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. Finally, the Department has not identified any relevant 
Federal rules that duplicate, overlap or conflict with this 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.

[[Page 30527]]

    A proposed rule concerning this action was published in the Federal 
Register on February 9, 2000 (65 FR 6341). Copies of the rule were 
mailed by the Committee staff 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 April 10, 2000. No comments were received.
    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.
    After consideration of all relevant matter presented, including the 
information and recommendation submitted by the Committee 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 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 
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 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: May 8, 2000.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 00-11922 Filed 5-11-00; 8:45 am]
BILLING CODE 3410-02-P