[Federal Register Volume 67, Number 230 (Friday, November 29, 2002)]
[Rules and Regulations]
[Pages 71072-71075]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-30355]



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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 989

[Docket No. FV03-989-2 IFR]


Raisins Produced From Grapes Grown in California; Temporary 
Suspension of a Provision, and Extension of Certain Deadlines Under the 
Raisin Diversion Program

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule temporarily suspends the deadline for announcing a 
2003 raisin diversion program (RDP) as specified under the Federal 
marketing order for California raisins (order). This rule also extends 
certain deadlines within the 2002-2003 crop year concerning the RDP 
specified in the order's regulations. The order regulates the handling 
of raisins produced from grapes grown in California and is administered 
locally by the Raisin Administrative Committee (RAC). Changes beginning 
with a possible 2003 RDP have been recommended by the RAC. Currently, 
there is a November 30 deadline for the RAC to announce a 2003 RDP. 
This action is needed to provide flexibility in implementing the 
existing as well as any new provisions of a 2003 RDP. This action will 
also allow necessary review and evaluation of proposed provisions for 
such a program. The December 15 deadline for redemption of diversion 
certificates for the 2002 RDP also is extended, given the lack of sales 
of those certificates.

DATES: Effective: December 2, 2002. Comments received by January 28, 
2003, will be considered prior to issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent to the Docket Clerk, 
Marketing Order Administration Branch, Fruit and Vegetable Programs, 
AMS, USDA, 1400 Independence Avenue SW, STOP 0237, Washington, DC 
20250-0237; Fax: (202) 720-8938, 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, or can be viewed at: http://www.ams.usda.gov/fv/moab.html.

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, 1400 Independence Avenue SW, STOP 0237, Washington, DC 
20250-0237; 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, 1400 Independence 
Avenue SW, STOP 0237, Washington, DC 20250-0237; telephone: (202) 720-
2491, Fax: (202) 720-8938, or E-mail: [email protected].

SUPPLEMENTARY INFORMATION: This 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 (USDA) 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 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. Such 
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 rule temporarily suspends an order provision concerning the 
November 30 deadline by which the RAC must announce a RDP, and extends 
related deadlines specified under the order's regulations concerning 
the 2003 diversion program. Changes beginning with a possible 2003 RDP 
recently have been recommended by the RAC. This action is needed to 
provide flexibility in implementing the existing as well as any new 
provisions of a 2003 RDP. This action will also allow necessary review 
and evaluation of proposed provisions for such a program. This rule 
also extends the December 15 redemption deadline for diversion 
certificates for the 2002 Natural (sun-dried) Seedless (NS) RDP, given 
the lack of sales of those certificates.

Volume Regulation Provisions

    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 (reserve) for the account of 
the RAC. Reserve raisins are disposed of through various programs 
authorized under the order. For example, reserve raisins may be sold by 
the RAC to handlers for free use or to replace part of the free tonnage 
they exported; carried over as a hedge against a short crop the 
following year; or may be disposed of in other outlets not competitive 
with those for free tonnage raisins, such as government purchase, 
distilleries, or animal feed. Net proceeds from sales of reserve 
raisins are ultimately distributed to producers.

Raisin Diversion Program

    The RDP is another program concerning reserve raisins authorized 
under the order and may be used as a means for controlling 
overproduction. Authority for the program is provided in Sec.  989.56 
of the order. Paragraph (e) of that section provides authority for the 
RAC to establish, with the approval of USDA, such rules and regulations 
as may be necessary for the implementation and operation of a RDP. 
Accordingly, additional procedures and deadlines are specified in Sec.  
989.156.
    These sections currently require the RAC to meet by November 30 
each crop year to review raisin data, including information on 
production, supplies, market demand, and inventories. If the

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RAC determines that the available supply of raisins, including those in 
the reserve pool, exceeds projected market needs, it can decide to 
implement a diversion program, and announce the amount of tonnage 
eligible for diversion during the subsequent crop year. Producers who 
wish to participate in the RDP must submit an application to the RAC. 
The RAC conducts a lottery if the tonnage applied for exceeds what has 
been allotted. RAC staff then notifies producers whether they have been 
accepted into the program.
    Approved producers curtail their production by vine removal or some 
other means established by the RAC. Such producers receive a 
certificate the following fall from the RAC which represents the 
quantity of raisins diverted. Producers sell these certificates to 
handlers who pay producers for the free tonnage applicable to the 
diversion certificate minus the established harvest cost for the 
diverted tonnage. Handlers redeem the certificates by presenting them 
to the RAC, and paying an amount equal to the established harvest cost 
plus payment for receiving, storing, fumigating, handling, and 
inspecting the tonnage represented on the certificate. The RAC then 
gives the handler raisins from the prior year's reserve pool in an 
amount equal to the tonnage represented on the diversion certificate. 
The new crop year's volume regulation percentages are applied to the 
diversion tonnage acquired by the handler (as if the handler had bought 
raisins directly from a producer).

Extension of Deadlines for 2003 Diversion Program

    The California raisin and grape industries continue to be plagued 
by burdensome supplies and severe economic conditions. Industry members 
have been reviewing various options to help address some of these 
concerns. The RAC has also been reviewing options to help the industry 
address these issues through the marketing order.
    At its October 15, 2002, meeting, the RAC recommended modifications 
to the RDP that are intended to significantly reduce the industry's 
oversupply and improve producer returns. Some revisions were proposed 
by the RAC's Executive Committee at follow-up meetings on October 24 
and November 4, 2002. The RAC would like its recommended changes in 
effect for the 2003 diversion program. Given the November 30 deadline 
in the order for the RAC to announce a 2003 RDP and other deadlines in 
the regulations, this action is needed to provide flexibility in 
implementing the existing as well as any new provisions of a 2003 RDP. 
This action will also allow necessary review and evaluation of 
provisions for such a program.
    Specifically, the words ``On or before November 30 of'' in Sec.  
989.56(a) must be suspended until July 31, 2003, which is the end of 
the 2002-03 crop year. The November 30 date also is specified in Sec.  
989.156(a) of the order's regulations. A proviso should be added to 
Sec.  989.156(a) to allow the RAC to extend this date for the 2003 
diversion program to a later date during the 2002-03 crop year. Similar 
provisos are added to allow the RAC to extend the following dates in 
Sec.  989.156 for the 2003 diversion program: the December 20 date 
specified in paragraph (b) whereby producers must submit applications 
to the RAC to participate in a RDP; the January 12 date specified in 
paragraph (c) whereby producers must submit corrected applications to 
the RAC; and the January 15 date specified in paragraph (a) whereby the 
RAC can allocate additional tonnage to a RDP. Section 989.56(a) and 
Sec.  989.156 are modified accordingly.

Extension of Redemption Deadline for 2002 Diversion Program

    Section 989.156(k) of the order's regulations specifies that 
handlers must redeem diversion certificates by December 15 of the crop 
year for which they were issued. The value of the free tonnage 
represented on NS raisin diversion certificates has historically been 
based on a free tonnage field price negotiated by the Raisin Bargaining 
Association (RBA) and industry handlers. A RBA field price has not yet 
been established, and most certificates have not been sold by 
producers. Therefore, Sec.  989.156(k) is modified to specify that, for 
the 2002 NS RDP, the December 15 redemption deadline may be extended by 
the RAC to a later date within the 2002-03 crop year.

Initial 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 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 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 than $5,000,000, and small agricultural 
producers are defined as those having annual receipts of less than 
$750,000. 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. No more than 7 handlers, and a 
majority of producers, of California raisins may be classified as small 
entities.
    This rule temporarily suspends a provision specified in Sec.  
989.56(a) of the order regarding the November 30 deadline by which the 
RAC must announce a 2003 RDP, and extends related deadlines in Sec.  
989.156 applicable to the 2003 diversion program. This rule also 
extends the December 15 redemption deadline for 2002 RDP certificates. 
Under a RDP, producers receive certificates from the RAC for curtailing 
their production to reduce burdensome supplies. The certificates 
represent diverted tonnage. Producers sell the certificates to handlers 
who, in turn, redeem the certificates with the RAC for raisins from the 
prior year's reserve pool. Authority for these changes to the 
regulations is provided in Sec.  989.56(e) of the order.
    Regarding the impact of this action on affected entities, the 
suspension of the November 30 meeting date and related extensions 
applicable to the 2003 diversion program are needed to provide 
flexibility in implementing the existing as well as any new provisions 
of a 2003 RDP. This action also will allow necessary review and 
evaluation of proposed provisions for such a program. Changes beginning 
with a possible 2003 RDP recently have been recommended by the RAC.
    Extending the December 15 deadline for the redemption of 2002 NS 
RDP certificates is necessary, given the lack of sale of such 
certificates. Producers will have more time to sell their certificates 
to handlers, and for handlers to redeem the certificates with the RAC. 
Equity holders in the 2002 NS reserve pool would all benefit from the 
extension. Once a field price is established, more transactions 
regarding the RDP certificates can be completed. Producers can earn 
income when they

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sell the certificates to handlers. Handlers can redeem the certificates 
for reserve raisins. Finally, equity holders in the 2002 NS reserve 
pool would earn some return for the raisins allotted to the RDP.
    This rule imposes no additional reporting or recordkeeping 
requirements on either small or large raisin handlers. In accordance 
with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the 
information collection requirement referred to in this rule (i.e., the 
RDP application) has been approved previously by the Office of 
Management and Budget (OMB) under OMB Control No. 0581-0178. 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, USDA has 
not identified any relevant Federal rules that duplicate, overlap, or 
conflict with this rule.
    USDA is initiating this action to facilitate administration of the 
order and help the raisin industry through this difficult time. All 
interested persons are invited to submit information on the regulatory 
and informational impact of this action on small businesses. 
Additionally, 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.
    A 60-day comment period is provided to allow interested persons to 
respond to this rule. Any comments received will be considered prior to 
finalization of this rule.
    After consideration of all relevant material presented, and other 
available information, it is hereby found that the order provision 
temporarily suspended does not tend to effectuate the declared policy 
of the Act. It is further found that the extension of the deadlines 
specified in this interim final rule tend to effectuate the declared 
policy of the Act.
    Pursuant to 5 U.S.C. 553, it is also found and determined upon good 
cause that it is impracticable, unnecessary, and contrary to the public 
interest to give preliminary notice prior to putting this rule into 
effect, and that good cause exists for not postponing the effective 
date of this rule until 30 days after publication in the Federal 
Register because: (1) This rule needs to be in place as soon as 
possible because the order currently requires the RAC to meet on or 
before November 30, 2002, and this action would suspend this date for 
the remainder of the 2002-03 crop year; (2) this rule relaxes certain 
deadlines currently specified in the order and implementing 
regulations; and (3) a 60-day comment period is provided and all 
comments received will be considered in finalizing this 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.


Sec.  989.56  [Suspended in part]

    2. In Sec.  989.56, paragraph (a) the words, ``On or before 
November 30 of,'' are suspended effective December 2, 2002 through July 
31, 2003.

    3. In Sec.  989.156, paragraph (a)(1), the first sentence in 
paragraph (b), the last sentence in paragraph (c), paragraph (k), and 
paragraph (s) are revised to read as follows:


Sec.  989.156  Raisin diversion program.

    (a)(1) Quantity to be diverted.
    On or before November 30 of each crop year, the Committee shall 
announce the quantity of raisins eligible for a raisin diversion 
program: Provided, That, for the 2003 diversion program, this date may 
be extended by the Committee to a later date within the 2002-03 crop 
year. On or before January 15 of each crop year, the Committee may 
announce an increase in the tonnage eligible for a raisin diversion 
program: Provided, That, for the 2002 Natural (sun-dried) Seedless 
raisin diversion program, the Committee may announce an increase in the 
quantity of tonnage eligible for the program later than January 15: And 
provided further, That, for the 2003 raisin diversion program, this 
date may be extended by the Committee to a later date within the 2002-
03 crop year. The quantity eligible for diversion may be announced for 
any of the following varietal types of raisins: Natural (sun-dried) 
Seedless, Muscat (including other raisins with seeds), Sultana, Zante 
Currant, Monukka, and Other Seedless raisins. At the same time the 
Committee shall determine and announce to producers, handlers, and the 
cooperative bargaining association(s) the allowable harvest cost to be 
applicable to such diversion tonnage. The factors to be reviewed by the 
Committee in determining allowable harvest costs shall include but not 
be limited to: Costs for picking, turning, rolling, boxing, paper 
trays, vineyard terracing, hauling to the handler, and crop insurance.
* * * * *
    (b) Application for diversion certificates. Any producer desiring 
to participate in a raisin diversion program shall file with the 
Committee, by certified mail, prior to December 20 of the crop year, an 
application on Form RAC-1000, ``Application for a Raisin Diversion 
Program'' together with a copy of any two of the following four 
documents: Plot Map from the County Hall of Records; irrigation tax 
bill; county property tax bill; or any other document containing an 
Assessors Parcel Number: Provided, That, for the 2003 diversion 
program, this date may be extended by the Committee to a later date 
within the 2002-03 crop year. * * *
    (c) * * * However, such correction must be received by the 
Committee on or before January 12: Provided, That, for the 2003 
diversion program, this date may be extended by the Committee to a 
later date within the 2002-03 crop year.
* * * * *
    (k) Redemption of certificates. Any handler holding certificates 
may redeem such certificates for reserve pool raisins from the 
Committee. To redeem a certificate, a handler must present the 
diversion certificate to the Committee and pay the Committee an amount 
equal to the established harvest costs plus an amount equal to the 
payment for receiving, storing, fumigating, handling, and inspecting 
raisins as specified in Sec.  989.401 for the entire tonnage shown on 
the certificate. Handlers who acquire diversion certificates from 
producers shall report acquisitions of such certificates and submit 
them for redemption in a manner and for the reporting periods provided 
in Sec.  989.173(b) for the acquisition of raisins acquired from 
producers. The Committee shall issue a reserve release entitling the 
handler to an amount of reserve pool raisins equal to the entire amount 
of tonnage shown on the certificate. Upon receipt of the diversion 
certificate, the Committee shall note on the certificate that it is 
cancelled. Diversion certificates will only be valid and honored if 
presented to the Committee for redemption on or before December 15 of 
the crop year for which they were issued: Provided, That, for the 2002 
diversion program for Natural

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(sun-dried) Seedless raisins, this date may be extended by the 
Committee to a later date within the 2002-03 crop year.
* * * * *
    (s) Additional opportunity for vine removal.
    The Committee may announce a date later than that provided in Sec.  
989.156(b), by which producers, who agree to remove the vines on a 
production unit may file an application to participate in a raisin 
diversion program.
    (1) For the 2002 Natural (sun-dried) Seedless raisin diversion 
program, additional opportunity for vine removal shall be provided in 
accordance with paragraph (u) of this section.
    (2) For raisin diversion programs applicable to the 2003 and 
subsequent crop years, the following provisions apply.
    (i) The announced date shall be not later than May 1. The diversion 
certificates will be issued only for the production units from which 
vines are removed. The total tonnage available to such applicants shall 
not exceed the tonnage determined by deducting the tonnage approved for 
applications received on or before December 20 from the total tonnage 
announced as eligible by the Committee for diversion: Provided, That, 
for the 2003 diversion program, this date may be extended by the 
Committee to a later date within the 2002-03 crop year. Applications 
shall be considered and approved on a first-come, first-served, basis 
and shall not be given preference over the tonnage approved for 
applications received on or before December 20: Provided, That, for the 
2003 diversion program, this date may be extended by the Committee to a 
later date within the 2002-03 crop year. The vines shall be removed 
from the production units for which such applications are approved not 
later than June 1.
    (ii) Producers who agree to remove the vines pursuant to this 
paragraph shall notify the Committee in advance of the date when such 
vines will be removed in order to allow a representative of the 
Committee to observe and verify such vine removal.
* * * * *

    Dated: November 25, 2002.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 02-30355 Filed 11-26-02; 11:02 am]
BILLING CODE 3410-02-P