[Federal Register Volume 67, Number 25 (Wednesday, February 6, 2002)]
[Rules and Regulations]
[Pages 5442-5445]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-2848]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 982

[Docket No. FV01-982-3 FR]


Hazelnuts Grown in Oregon and Washington; Establishment of 
Reporting Requirements for Imported Hazelnuts

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule establishes reporting requirements for hazelnuts 
imported by handlers of hazelnuts grown in Oregon and Washington. It 
requires handlers to report the receipt and disposition of hazelnuts 
grown outside of the United States. This rule was recommended by the 
Hazelnut Marketing Board (Board), the agency responsible for local 
administration of the marketing order regulating the handling of 
hazelnuts grown in Oregon and Washington. Requiring handlers to report 
the receipt and disposition of imported hazelnuts will provide the 
Board with more

[[Page 5443]]

accurate information on the total supply of hazelnuts being handled in 
Oregon and Washington. This information will facilitate the Board's 
preparation of its annual marketing policy and will help in its ability 
to track both domestic and foreign product.

EFFECTIVE DATE: February 7, 2002.

FOR FURTHER INFORMATION CONTACT: Teresa L. Hutchinson, Marketing 
Specialist, Northwest Marketing Field Office, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1220 SW 
Third Avenue, suite 385, Portland, Oregon 97204; telephone: (503) 326-
2724; Fax: (503) 326-7440; or George Kelhart, Technical Advisor, 
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) 720-8938.
    Small businesses may request information on complying with this 
regulation by contacting Jay Guerber, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, P.O. 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 No. 115 and Order No. 982 both as amended (7 CFR part 982), 
regulating the handling of hazelnuts grown in Oregon and Washington, 
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 (USDA) 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 USDA 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 USDA 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 USDA'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 establishes reporting requirements for hazelnuts 
imported by handlers of hazelnuts grown in Oregon and Washington. The 
rule requires handlers to report the receipt and disposition of 
hazelnuts grown outside of the United States. Requiring handlers to 
report the receipt and disposition of imported hazelnuts will provide 
the Board with more accurate information on the total supply of 
hazelnuts being handled in Oregon and Washington.
    At its November 14, 2000, meeting, the Board passed a general 
recommendation to require handlers to report imported hazelnuts. After 
developing procedures and a form necessary for implementation, the 
Board submitted its recommendation to the Department in May 2001.
    Sections 982.64 through 982.67 of the order authorize the Board to 
require certain specific reports from handlers, including creditable 
promotion and advertising reports, carryover reports, shipment reports, 
and reports on the disposition of restricted hazelnuts. Section 982.68 
of the order provides additional authority for the Board, with the 
approval of USDA, to require such other reports as the Board may 
require to perform its duties under the order.
    The Board believes that more accurate information on the total 
supply of hazelnuts moving in and out of Oregon and Washington--both 
foreign and domestic product--will facilitate the administration of the 
order. The Board will use this information to more efficiently track 
the receipt and disposition of hazelnuts by handlers in Oregon and 
Washington. Furthermore, the Board will use this information in its 
marketing policy deliberations each fall when it reviews the crop 
estimate, handler carryover, and other factors to determine whether 
volume regulation would be appropriate. In addition, the Board is 
concerned that imported hazelnuts might be included in handler 
inventory reports of Oregon and Washington hazelnuts.
    In addition to the domestic crop, of which 100 percent is produced 
in Oregon and Washington, hazelnuts are imported into the United States 
from Canada and Turkey, and occasionally from Italy. Hazelnuts produced 
in Oregon and Washington generally represent from 3 to 5 percent of the 
world crop. According to USDA statistics, the majority of hazelnuts 
imported into the United States are in kernel form, of which about 96 
percent are from Turkey. A small percentage of imports are inshell 
hazelnuts and generally are from British Columbia, Canada, and enter 
the U.S. through Washington State. Although information pertaining to 
the quantity of imported hazelnuts has long been available, information 
specific to the receipt and disposition by Oregon and Washington 
hazelnut handlers prior to this final rule was lacking.
    A major concern of the Board has been the inshell hazelnuts 
imported from Canada by Oregon and Washington handlers. As production 
in Canada has increased, there has been an increase in Canadian 
hazelnuts imported into Oregon and Washington. These hazelnuts are 
generally the same variety (Barcelona) as are produced in Oregon and 
Washington. If these hazelnuts are placed in the domestic inshell 
market without its knowledge, the Board's marketing policy calculations 
could be inaccurate. This rule will enable the Board to collect import 
hazelnut data to see how much is being imported and disposed of by 
domestic handlers.
    According to the National Agricultural Statistics Service, the 10-
year average annual production of hazelnuts grown in Oregon and 
Washington is 29,800 inshell tons. Of that total, an average of 4,253 
tons was sold in the domestic market. Furthermore, according to the 
Foreign Agricultural Service, imports during the same 10-year period 
averaged 316 tons. The five-year average for imports is 534 tons, 
however, indicating that the increase may well be significant enough to 
impact the inshell domestic market.
    The report, F/H Form 1f, will be submitted to the Board monthly 
when imported hazelnuts are received and shipped by the handler to a 
buyer in the United States or exported inshell or shelled. The Board 
estimates that these reports will be submitted about five times per 
year by each importing handler. The report will include the quantity of 
such hazelnuts received, country of origin, inspection certificate 
number, whether such hazelnuts were inshell or kernels, the disposition 
outlet (domestic, export, inshell, or shelled, etc.), and the shipment 
date of such hazelnuts.
    The Board also recommended that, with each report, the handler 
submit a copy of the inspection certificate issued by the Federal-State 
Inspection Service (FSIS) for compliance purposes. The inspection 
certificate will indicate the

[[Page 5444]]

name of the person from whom the hazelnuts were received, the date the 
hazelnuts were received by the handler, the number of tons and U.S. 
Custom Service entry number, whether the product is inshell or shelled, 
the quantity of hazelnuts, country of origin, the name of the FSIS 
inspector who issued the certificate, and the date such certificate was 
issued. The Board believes inspection certificates are necessary to 
verify handler receipt and disposition reports for imported hazelnuts.

Final Regulatory Flexibility Analysis and Paperwork Reduction Act

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Agricultural Marketing Service (AMS) has considered the 
economic impact of this rule 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 the 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 800 growers of hazelnuts in the production 
area and approximately 19 handlers subject to regulation under the 
order. Small agricultural growers are defined by the Small Business 
Administration (SBA) (13 CFR 121.201) as those having annual receipts 
of less than $750,000, and small agricultural service firms are defined 
as those whose annual receipts are less than $5,000,000.
    Based on the SBA definition, the Board estimates that the majority 
of the handlers and all of the growers are small entities. Board 
records show that in the 1999-2000 marketing year approximately 9 
percent of the handlers shipped over 7,692,308 pounds of hazelnuts, and 
91 percent of the handlers shipped under 7,692,308 pounds of hazelnuts. 
Thus, based on an average price of $0.65 per pound at the point of 
first sale, it can be concluded that the majority of hazelnut handlers 
may be classified as small entities.
    Board meetings are widely publicized in advance of the meetings and 
are held in a location central to the production area. The meetings are 
open to all industry members and other interested persons who are 
encouraged to participate in the deliberations and voice their opinions 
on topics under discussion. Thus, Board recommendations can be 
considered to represent the interests of small business entities in the 
industry.
    This rule adds a new Sec. 982.467 to the order's administrative 
rules and regulations which requires handlers to report to the Board 
the receipt and disposition of hazelnuts grown outside of the United 
States. This report will provide the Board with more accurate 
information on the total available supply of hazelnuts--foreign and 
domestic product--and will help facilitate program administration. 
Authority for requiring handlers to submit this information to the 
Board is provided in Sec. 982.68 of the order.
    Regarding the impact of the action on affected entities, this rule 
should impose minimal additional costs. The Board estimates that about 
five handlers have imported hazelnuts over the past few years. Such 
handlers will be required to submit an additional monthly report to the 
Board when imported hazelnuts are received and shipped, along with 
inspection certificates or other information required by the Board for 
verification purposes. The Board estimates that each affected handler 
will submit about five of these reports annually.
    An alternative to this action would have been to continue the 
practice of not collecting information from handlers on the receipt and 
disposition of imported hazelnuts. However, as previously mentioned, 
the Board believes it will be able to better administer the order by 
obtaining more accurate information on the total available supply of 
hazelnuts being received and disposed of by Oregon and Washington 
handlers, including foreign and domestic product. The only way this 
information can be obtained by the Board is to directly collect it from 
handlers. This information will facilitate program administration by 
improving the Board's base of information from which to make decisions.
    Another alternative the Board considered was whether it would be 
useful to collect information on hazelnuts grown outside of Oregon and 
Washington, but within the United States. However, Board members agreed 
that the quantity of domestic hazelnuts grown outside the production 
area and handled by regulated handlers is insignificant commercially, 
and, therefore, not needed.
    This action imposes some additional reporting and recordkeeping 
burden on handlers that receive hazelnuts from outside of the United 
States. As stated earlier, the Board has estimated that five handlers 
may import hazelnuts during the marketing year. Such handlers will be 
required to submit a receipt and disposition report (F/H Form 1f) to 
the Board monthly when imported hazelnuts are received and shipped. The 
Board estimates that these reports will be submitted about five times 
per year per handler, and will require that each handler spend about 
five minutes to complete each report. Thus, the annual burden 
associated with this information collection should total no more than 
two hours for the industry. The information will be collected on F/H 
Form 1f. The form has been approved by the Office of Management and 
Budget (OMB) under OMB Control No. 0581-0178 in accordance with the 
Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35).
    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. The USDA has 
identified one relevant Federal rule regarding requirements for 
hazelnuts grown outside of the United States. Under section 608e of the 
Act, whenever certain specified commodities are regulated under a 
Federal marketing order, imports of that commodity must meet the same 
or comparable grade, size, quality, and maturity requirements as those 
in effect for the domestic commodity. Hazelnuts are included under 
section 608e of the Act. Thus, importers of hazelnuts are required to 
have such hazelnuts inspected by the Federal-State inspection service. 
Importers whose hazelnuts meet section 608e requirements do not have to 
submit any paperwork to USDA. However, importers whose hazelnuts fail 
section 608e requirements, or whose hazelnuts are being sent to 
designated outlets (animal feed, processing, or charity) have to submit 
paperwork to USDA. Only a small amount of information required by USDA 
in these instances or by the Board through this rule will be 
duplicative.
    In addition, the Board's meeting was widely publicized throughout 
the hazelnut industry and all interested persons were invited to attend 
the meeting and participate in Board deliberations on all issues. Like 
all Board meetings, the November 14, 2000, meeting was a public meeting 
and all entities, both large and small, were able to express views on 
this issue.
    A proposed rule concerning this action was published in the Federal 
Register on August 22, 2001 (66 FR 44086). Copies of the rule were 
mailed to all Board members. The rule was also

[[Page 5445]]

made available through the Internet by the Office of the Federal 
Register and USDA. A 60-day comment period ending October 22, 2001, was 
provided to allow interested persons to respond to the proposal. No 
comments were received.
    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 Board 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.
    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: (1) Handlers are already 
shipping hazelnuts from the 2001-2002 crop; (2) the Board would like to 
begin receiving this report as soon as possible to have better 
information on the total supply of hazelnuts within Oregon and 
Washington; (3) handlers are aware of this rule which was recommended 
at a public meeting; and (4) a 60-day comment period was provided in 
the proposed rule; no comments were received.

List of Subjects in 7 CFR Part 982

    Filberts, Hazelnuts, Marketing agreements, Nuts, Reporting and 
recordkeeping requirements.

    For the reasons set forth in the preamble, 7 CFR part 982 is 
amended as follows:

PART 982--HAZELNUTS GROWN IN OREGON AND WASHINGTON

    1. The authority citation for 7 CFR part 982 continues to read as 
follows:

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

    2. A new Sec. 982.467 is added to read as follows:


Sec. 982.467  Report of receipts and dispositions of hazelnuts grown 
outside the United States.

    Each handler who receives hazelnuts grown outside the United States 
shall report to the Board monthly on F/H Form 1f the receipt and 
disposition of such hazelnuts. All reports submitted shall include 
transactions through the end of each month, or other reporting periods 
established by the Board, and are due in the Board office on the tenth 
day following the end of the reporting period. The report shall include 
the quantity of such hazelnuts received, the country of origin for such 
hazelnuts, inspection certificate number, whether such hazelnuts are 
inshell or kernels, the disposition outlet, and shipment date of such 
hazelnuts. With each report, the handler shall submit copies of the 
applicable inspection certificates.

    Dated: January 31, 2002.
A. J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 02-2848 Filed 2-5-02; 8:45 am]
BILLING CODE 3410-02-P