[Federal Register Volume 66, Number 146 (Monday, July 30, 2001)]
[Rules and Regulations]
[Pages 39274-39277]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-18945]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 989

[Docket No. FV01-989-2 FR]


Raisins Produced From Grapes Grown in California; Reporting on 
Organic Raisins

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule adds additional reporting requirements for handlers 
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 (RAC). This rule requires handlers to report 
to the RAC information on acquisitions, shipments, and inventories of 
organic raisins. This rule will provide the RAC with accurate data on 
organic raisins. The RAC will evaluate this data to determine whether 
organic raisins should be subject to the order's volume regulation 
requirements.

EFFECTIVE DATE: July 31, 2001.

FOR FURTHER INFORMATION CONTACT: Maureen T. Pello, Senior 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) 720-8938.
    Small businesses may request information on complying with this 
regulation by contacting Jay Guerber, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, PO Box 96456, room 
2525-S, Washington DC 20090-6456; telephone: (202) 720-2491, Fax: (202) 
720-8938, 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 marketing 
agreement and order 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. 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 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 adds additional reporting requirements for handlers 
covered under the order. This rule requires handlers to report to the 
RAC information on acquisitions, shipments, and inventories of organic 
raisins. This rule will provide the RAC with accurate data on organic 
raisins. The RAC will evaluate this data to determine whether organic 
raisins should be subject to the order's volume regulation 
requirements. This action was unanimously recommended by the RAC at a 
meeting on November 29, 2000.
    Section 989.73 of the order provides authority for the RAC to 
collect reports from handlers. Paragraph (d) of that section provides 
that, upon request of the RAC, with approval by the Secretary, handlers 
shall furnish to the RAC other information as may be necessary to 
enable it to exercise its powers and perform its duties. The RAC meets 
routinely to make decisions on various programs authorized under the 
order such as volume regulation and quality control. The RAC utilizes 
information collected under the order in its decision-making. Section 
989.173 of the order's administrative rules and regulations specifies 
certain reports that

[[Page 39275]]

handlers are currently required to submit to the RAC.
    The RAC would like to collect information on organic raisins. Some 
organic raisin growers have expressed concern to the RAC and the 
Department with the application of the order's volume regulation 
provisions to organic raisins. In response, the RAC formed a working-
group to review this issue and possible avenues of relief for such 
organic growers. One option considered by the RAC was to establish 
separate varietal types for organic raisins covered under the order. 
This would permit the RAC to consider the application of volume 
regulation for organic raisins separate from traditionally grown 
raisins. However, during this process, it was determined that reliable 
data on the production, shipment, and marketing of organic raisins does 
not exist. Thus, the RAC does not have sufficient information at this 
time to make an informed decision.
    Therefore, the RAC recommended requiring handlers to report 
information to the RAC on organic raisins. Such information would 
include reports on acquisitions, shipments (dispositions), and 
inventories of organic raisins. Information regarding transfers between 
handlers of organic raisins would also be needed to provide the RAC 
with accurate shipment data. The RAC recommended that this final rule 
become effective on July 31, 2001, the last day of the 2000-01 crop 
year, so that the RAC could collect year-end inventory information on 
2000-01 crop organic raisins. During the following weeks, handlers 
would begin reporting weekly acquisitions and monthly shipments of 
2001-02 crop organic raisins.
    Finally, for purposes of this final rule, organically produced 
raisins would mean California raisins that have been certified as 
organic by an organic certification organization currently registered 
with the California Department of Food and Agriculture (CDFA), or such 
certifying organization accredited under the National Organic Program 
(NOP). Section 989.173 of the order's administrative rules and 
regulation is revised accordingly. Paragraph (d) of that section 
regarding an interhandler transfer report is revised, and a new 
paragraph (g) is added to require handlers of organic raisins to report 
information regarding inventories, acquisitions, and dispositions of 
organic raisins. This information will enable the RAC to make an 
informed decision on whether organic raisins should be subject to the 
order's volume regulation requirements.

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 firms are defined 
by the Small Business Administration (13 CFR 121.201) as those having 
annual receipts of less that $5,000,000, and small agricultural 
producers are defined as those having annual receipts of less than 
$500,000. 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. No more than 7 handlers, and a majority of producers, of 
California raisins may be classified as small entities, excluding 
receipts from other sources.
    This final rule revises paragraph (d) in Sec. 989.173 and adds a 
new paragraph (g) to that section to require handlers of organic 
raisins to submit reports to the RAC regarding acquisitions, shipments, 
and inventories of such raisins. This rule is needed so that the RAC 
can collect accurate data on organic raisins and evaluate this 
information to determine whether organic raisins should be categorized 
as separate varietal types under the order. This will permit the RAC to 
consider application of the order's volume regulation provisions to 
organic raisins separate from traditionally grown raisins. Authority 
for this action is provided in Sec. 989.73 of the order.
    Regarding the impact of this rule on affected entities, this rule 
will impose some additional burden on handlers who handle organic 
raisins. Such handlers will be required to submit a weekly acquisition 
report for organic raisins, a monthly shipment (disposition) report, a 
monthly report of exports by country of destination, and an annual 
inventory report. Handlers will also be required to report transfers of 
organic raisins between handlers; however, those transfers would be 
captured on the same interhandler transfer report as handlers are 
currently using.
    It is estimated that it will take each handler of organic raisins 
about 5 minutes to complete each weekly acquisition report (4 hours and 
20 minutes annually per handler), 5 minutes to complete each monthly 
shipment report (1 hour annually per handler), 5 minutes to complete 
each report of exports by country of destination (1 hour annually per 
handler), and 5 minutes to complete an annual inventory report (5 
minutes annually per handler). If all handlers handle organic raisins, 
it is estimated that the total additional annual burden would be 6 
hours and 25 minutes for each handler, or a total of 128 hours for the 
industry. In addition, handlers will be required to provide copies of 
organic certificates at the request of the RAC. The reporting burden 
for this activity is accounted for in the new weekly organic 
acquisition report. The four new reports, the organic inspection 
certificate requests, and underlying recordkeeping burden for organic 
acquisitions, shipments, and inventories have been approved by the 
Office of Management and Budget (OMB) under OMB Control No. 0581-0196. 
At a later time, the new collection will be added to the currently 
approved collection for use under OMB No. 0581-0178. The burden for the 
interhandler transfer report (RAC-6) has already been approved by the 
OMB.
    The Department has identified four comparable reports required to 
be submitted by handlers to the RAC under Sec. 989.173. That section 
requires handlers to report to the RAC for all California raisins 
weekly acquisitions, monthly dispositions, monthly exports by country 
of destination, and annual inventories. This final rule requires 
handlers continue to report such information for all California 
raisins, but that similar information regarding organically produced 
raisins be captured separately. Although this will be an additional 
reporting burden on handlers, the RAC determined that this action is 
necessary to collect accurate information on organic raisins. In 
addition, several handlers are represented on the RAC and voted for 
this action.
    Several alternatives were considered by RAC's work-group to address 
concerns of organic raisin growers. The group considered recommending 
informal rulemaking to establish separate varietal types for organic

[[Page 39276]]

raisins. However, as discussed in this rule, the RAC determined that 
sufficient data does not exist on production and shipments of organic 
raisins to warrant such action at this time.
    Another option considered was to recommend informal rulemaking 
under authority provided in Sec. 989.60(c). Under that authority, the 
RAC may designate such raisins as it deems appropriate for production, 
processing, and marketing and development projects. For each project, 
the volume of tonnage that can be acquired by all handlers cannot 
exceed 500 tons annually. Such raisins can be exempt from certain order 
regulations such as volume control. The 500-ton limit can be increased 
through informal rulemaking. The working-group considered increasing 
the 500-ton limit and recommending a marketing develop project for all 
organic Natural (sun-dried) Seedless raisins. Such raisins would be 
exempt from volume regulation.
    Also, there was some discussion about exempting organic raisins 
from the order's volume control requirements through a formal 
rulemaking proceeding. However, the working-group and ultimately the 
RAC decided that, at this time, the most appropriate action would be to 
collect the necessary production and shipment data on organic raisins. 
The RAC would evaluate this information and determine whether 
additional action on organic raisins would be warranted, including 
establishing separate varietal types for organic raisins.
    Further, the RAC's meetings of its organic working-group on August 
29 and October 17, 2000, and Administrative Issues Subcommittee and RAC 
meetings held on November 29, 2000, 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.
    A proposed rule concerning this action was published in the Federal 
Register on March 27, 2001 (66 FR 16621). The proposal also announced 
AMS's intent to request a revision to the currently approved 
information collection requirements issued under the order. Copies of 
the rule were mailed by the RAC staff to all RAC members and 
alternates, the Raisin Bargaining Association, handlers and 
dehydrators. Finally, the rule was made available through the Internet 
by the Office of the Federal Register. A 60-day comment period ending 
May 29, 2001, was provided to allow interested persons to respond to 
the proposal. Three comments were received.
    The first commenter requested that organic raisins not be subject 
to the Federal marketing order. The commenter stated that there is a 
shortage of organic raisins, and that withholding them from the market 
creates a hardship for organic growers.
    By definition, the current Federal raisin marketing order covers 
all raisins produced from grapes grown in California. This includes 
organic and traditionally grown raisins. Exempting organic raisins from 
the marketing order would require an amendment to the order, which is 
outside the scope of this rule.
    Prior to taking other action on this issue, the RAC wants to 
appropriately assess the applicability of the order's volume regulation 
provisions to organic raisins. The RAC determined that accurate data 
regarding acquisitions, shipments, and inventories of organic raisins 
is needed to make this assessment. This rule allows the RAC to collect 
this information. The RAC will then evaluate this data and determine 
whether further action on organic raisins is warranted.
    A second commenter requested that organic certifying agencies, 
rather than handlers, be required to submit copies of organic 
certificates directly to the RAC at its request. However, certifying 
agencies are not subject to marketing order requirements. Accordingly, 
no changes will be made to the rule as proposed, based on the two 
comments discussed above.
    A third commenter indicated strong support for the RAC to collect 
data on organic raisins, but also suggested a change to the proposed 
rule. Specifically, the commenter suggested that the proposed 
definition of organically produced raisins be modified to include not 
only raisins certified by organic certification organizations currently 
registered with CDFA, but also raisins certified by certifying 
organizations that will be accredited under the NOP on or about April 
22, 2002.
    The commenter raises a valid point. The Organic Foods Production 
Act (OFPA) of 1990 required the Department to develop national 
standards for organically produced agricultural products. The NOP was 
established under the OFPA. NOP requires that agricultural products 
labeled as organic originate from farms or handling operations 
certified by a state or private agency that has been accredited by the 
Department. The Department issued national organic standards in 
December 2000, and expects to announce the first round of USDA-
accredited certification agents on or about April 21, 2002.
    Accordingly, the final rule has been changed based on this comment. 
Thus, for purposes of this rule, organically produced raisins shall 
mean raisins that have been certified by an organic certification 
organization currently registered with CDFA, or such certifying 
organization accredited under the NOP.
    This same commenter went on to question whether a further policy 
change would be useful which would allow organic commodities to be 
recognized by their production standard, rather than relying on the 
flexibility in existing language. While this suggestion is beyond the 
scope of this rulemaking, AMS does review its programs to improve their 
organization and application, as appropriate.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: 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, comments 
received, and other available information, it is hereby found that this 
rule, as set forth, will tend to effectuate the declared policy of the 
Act.
    It is further found that good cause exists for not postponing the 
effective date of this rule until 30 days after publication in the 
Federal Register (5 U.S.C. 553) because this rule needs to be in effect 
by July 31, 2001, the last day of the 2000-01 crop year, so that the 
RAC can collect year-end inventory data on 2000-01 organic raisins. 
Further, handlers are aware of this action which was unanimously 
recommended by the RAC at a public meeting. Finally, a 60-day comment 
period was provided for in the proposed rule.

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.


[[Page 39277]]



    2. In Sec. 989.173, paragraph (d)(1)(iii) is revised, paragraphs 
(g), (h), and (i) are redesignated as paragraphs (h), (i), and (j), and 
a new paragraph (g) is added to read as follows:


Sec. 989.173  Reports.

* * * * *
    (d) * * *
    (1) * * *
    (iii) The varietal type of raisin, with organically produced 
raisins as specified in paragraph (g) of this section separated out, 
net weight, and condition of the raisins transferred; and
* * * * *
    (g) Organically produced raisins. For purposes of this section, 
organically produced raisins means raisins that have been certified by 
an organic certification organization currently registered with the 
California Department of Food and Agriculture, or such certifying 
organization accredited under the National Organic Program. Handlers of 
such raisins shall submit the following reports to the Committee.
    (1) Inventory report of organically produced raisins. Each handler 
shall submit to the Committee by the close of business on July 31 of 
each crop year, and not later than the following August 6, on an 
appropriate form provided by the Committee, a report showing, with 
respect to the organically produced raisins held by such handler:
    (i) The quantity of free tonnage raisins, segregated as to 
locations where they are stored and whether they are natural condition 
or packed;
    (ii) The quantity of reserve tonnage raisins held for the account 
of the Committee;
    (iii) The quantity of off-grade raisins segregated as to those for 
reconditioning and those for disposition as such.
    (2) Acquisition report of organically produced standard raisins. 
Each handler shall submit to the Committee for each week (Sunday 
through Saturday or such other 7-day period for which the handler has 
submitted a proposal to and received approval from the Committee) and 
not later than the following Wednesday, on an appropriate form provided 
by the Committee, a report showing the following:
    (i) The total net weight of the standard raisins acquired during 
the reporting period, segregated when appropriate, as to free tonnage 
and reserve tonnage;
    (ii) The location of the reserve tonnage; and
    (iii) The cumulative totals of such acquisitions (as so segregated) 
from the beginning of the current crop year.
    (iv) Upon request of the Committee, each handler shall provide 
copies of the organic certificate(s) applicable to the quantity of 
raisins reported as acquired.
    (3) Disposition report of organically produced raisins. No later 
than the seventh day of each month, handlers who are not processors 
shall submit to the Committee, on an appropriate form provided by the 
Committee, a report showing the aggregate quantity of free tonnage 
packed raisins and standard natural condition raisins which were 
shipped or otherwise disposed of by such handler during the preceding 
month (exclusive of transfer within the State of California between the 
plants of any such handler and from such handler to other handlers). 
Such information shall include:
    (i) Domestic outlets (exclusive of Federal government purchases) 
according to the quantity shipped in consumer cartons, the quantity of 
bags having a net weight content of 4 pounds or less, and the quantity 
shipped in bulk packs (including, but not limited to those in bags 
having a net weight content of more than 4 pounds);
    (ii) Federal government purchases;
    (iii) Export outlets according to quantity shipped in consumer 
cartons, the quantity shipped in bags having a net weight of 4 pounds 
or less, and the quantity shipped in bulk packs (including, but not 
limited to, those in bags having a net weight content of more than 4 
pounds);
    (iv) Export outlets, by countries of destination; and
    (v) Each of any other outlets in which the handler disposed of such 
raisins other than by any transfer which is excluded by the preceding 
sentence.
* * * * *

    Dated: July 25, 2001.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 01-18945 Filed 7-26-01; 11:11 am]
BILLING CODE 3410-02-P