[Federal Register Volume 68, Number 63 (Wednesday, April 2, 2003)]
[Rules and Regulations]
[Pages 15926-15932]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-7938]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 989

[Docket No. FV03-989-4 IFR]


Raisins Produced From Grapes Grown in California; Final Free and 
Reserve Percentages for 2002-03 Crop Natural (Sun-Dried) Seedless and 
Zante Currant Raisins

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule establishes final volume regulation percentages for 
2002-03 crop Natural (sun-dried) Seedless (NS) and Zante Currant (ZC) 
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 locally administered by the 
Raisin Administrative Committee (Committee). The volume regulation 
percentages are 53 percent free and 47 percent reserve for NS raisins, 
and 80 percent free and 20 percent reserve for ZC raisins. The 
percentages are intended to help stabilize raisin supplies and prices, 
and strengthen market conditions.

DATES: Effective April 3, 2003. The volume regulation percentages apply 
to acquisitions of NS and ZC raisins from the 2002-03 crop until the 
reserve raisins from that crop are disposed of under the marketing 
order. Comments received by June 2, 2003, will be considered prior to 
issuance of a final rule.

[[Page 15927]]


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. Under the order provisions now in effect, final free 
and reserve percentages may be established for raisins acquired by 
handlers during the crop year. This rule establishes final free and 
reserve percentages for NS and ZC raisins for the 2002-03 crop year, 
which began August 1, 2002, and ends July 31, 2003. 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 establishes final volume regulation percentages for 2002-
03 crop NS and ZC raisins covered under the order. The volume 
regulation percentages are 53 percent free and 47 percent reserve for 
NS raisins, and 80 percent free and 20 percent reserve for ZC raisins. 
Free tonnage raisins may be sold by handlers to any market. Reserve 
raisins must be held in a pool for the account of the Committee and are 
disposed of through various programs authorized under the order. For 
example, reserve raisins may be sold by the Committee to handlers for 
free use or to replace part of the free tonnage raisins they exported; 
used in diversion programs; carried over as a hedge against a short 
crop; or disposed of in other outlets not competitive with those for 
free tonnage raisins, such as government purchase, distilleries, or 
animal feed.
    The volume regulation percentages are intended to help stabilize 
raisin supplies and prices, and strengthen market conditions. The 
Committee unanimously recommended ZC final percentages on January 29, 
2003, and NS final percentages on February 13, 2003.

Computation of Trade Demands

    Section 989.54 of the order prescribes procedures and time frames 
to be followed in establishing volume regulation. This includes 
methodology used to calculate percentages. Pursuant to Sec.  989.54(a) 
of the order, the Committee met on August 14, 2002, to review shipment 
and inventory data, and other matters relating to the supplies of 
raisins of all varietal types. The Committee computed a trade demand 
for each varietal type for which a free tonnage percentage might be 
recommended. Trade demand is computed using a formula specified in the 
order and, for each varietal type, is equal to 90 percent of the prior 
year's shipments of free tonnage and reserve tonnage raisins sold for 
free use into all market outlets, adjusted by subtracting the carryin 
on August 1 of the current crop year, and adding the desirable carryout 
at the end of that crop year. As specified in Sec.  989.154(a), the 
desirable carryout for NS raisins shall equal the total shipments of 
free tonnage during August and September for each of the past 5 crop 
years, converted to a natural condition basis, dropping the high and 
low figures, and dividing the remaining sum by three, or 60,000 natural 
condition tons, whichever is higher. For all other varietal types, 
including ZC raisins, the desirable carryout shall equal the total 
shipments of free tonnage during August, September and one-half of 
October for each of the past 5 crop years, converted to a natural 
condition basis, dropping the high and low figures, and dividing the 
remaining sum by three. In accordance with these provisions, the 
Committee computed and announced 2002-03 trade demands for NS and ZC 
raisins at 196,185 tons and 2,166 tons, respectively, as shown below.

                         Computed Trade Demands
                        [Natural condition tons]
------------------------------------------------------------------------
                                            NS raisins      ZC raisins
------------------------------------------------------------------------
Prior year's shipments..................         298,133           3,441
Multiplied by 90 percent................            0.90            0.90
                                         -----------------

[[Page 15928]]

 
    Equals adjusted base................         268,320           3,097
                                         =================
Minus carryin inventory.................         132,135           1,910
Plus desirable carryout.................          60,000             978
                                         -----------------
    Equals computed trade demand........         196,185           2,166
------------------------------------------------------------------------

Computation of Preliminary Volume Regulation Percentages

    Section 989.54(b) of the order requires that the Committee 
announce, on or before October 5, preliminary crop estimates and 
determine whether volume regulation is warranted for the varietal types 
for which it computed a trade demand. That section allows the Committee 
to extend the October 5 date up to 5 business days if warranted by a 
late crop.
    Due to a late 2002 crop, the Committee met on October 8, 2002, and 
announced a preliminary crop estimate for NS raisins of 407,996 tons, 
which is almost 18 percent higher than the 10-year average of 346,770 
tons. NS raisins are the major varietal type of California raisin. 
Adding the carryin inventory of 132,135 tons, plus 18,000 tons of 
reserve raisins expected to be released to handlers this season for 
free use in an export program, plus the 407,996-ton crop estimate 
resulted in a total available supply of 558,131 tons, which was 
significantly higher (almost 285 percent) than the 196,185-ton trade 
demand. Thus, the Committee determined that volume regulation for NS 
raisins was warranted. The Committee announced preliminary free and 
reserve percentages for NS raisins, which released 65 percent of the 
computed trade demand since the field price (price paid by handlers to 
producers for their free tonnage raisins) had not been established. The 
preliminary percentages were 31 percent free and 69 percent reserve.
    Also at its October 8, 2002, meeting, the Committee announced a 
preliminary crop estimate for ZC raisins at 4,544 tons, which is 
comparable to the 10-year average of 4,494 tons. Combining the carry-in 
inventory of 1,910 tons with the 4,544-ton crop estimate resulted in a 
total available supply of 6,454 tons. With the estimated supply 
significantly higher (almost three times) than the 2,166-ton trade 
demand, the Committee determined that volume regulation for ZC raisins 
was warranted. The Committee announced preliminary percentages for ZC 
raisins, which released 65 percent of the computed trade demand since 
field price had not been established. The preliminary percentages were 
31 percent free and 69 percent reserve.
    Field prices for both NS and ZC raisins were established on January 
10, 2003, and preliminary percentages were revised on January 13, 2003, 
to 41 percent free and 59 percent reserve for NS and ZC raisins to 
release 85 percent of their trade demands.
    In addition, preliminary percentages were announced for Other 
Seedless, Dipped Seedless, and Oleate and Related Seedless. It was 
ultimately determined that volume regulation was only warranted for NS 
and ZC raisins. As in past seasons, the Committee submitted its 
marketing policy to USDA for review.

Modification to Marketing Policy Regarding ZC Raisins

    Pursuant to Sec.  989.54(f) of the order, the Committee met on 
January 29, 2003, and revised its marketing policy regarding ZC raisins 
due to a major change in economic conditions. The Committee 
recommended, and USDA subsequently approved, an increase in the ZC 
trade demand from 2,166 to 3,302 tons. The Committee's rationale for 
this action was to take advantage of increased demand created by a 
short Greek crop. Greece's crop has been reduced due to adverse weather 
conditions, and the Committee hopes to be able to sell more California 
ZC raisins in world markets.

Computation of Final Volume Regulation Percentages

    Pursuant to Sec.  989.54(c), at its January 29, 2003, meeting, the 
Committee announced interim percentages for NS and ZC raisins to 
release slightly less than their full trade demands. Based on a revised 
NS crop estimate of 373,138 tons (down from the October estimate of 
407,996 tons), interim percentages for NS raisins were announced at 
52.75 percent free and 47.25 percent reserve. Based on a revised ZC 
crop estimate of 4,128 tons (down from the October estimate of 4,544 
tons), interim percentages for ZC raisins were announced at 79.75 
percent free and 20.25 percent reserve.
    Pursuant to Sec.  989.54(d), the Committee also recommended final 
percentages to release the full trade demands for NS and ZC raisins. 
Final percentages were recommended for ZC raisins at the Committee's 
January meeting at 80 percent free and 20 percent reserve. Final 
percentages for NS raisins were recommended by the Committee at a 
meeting on February 13, 2003, at 53 percent free and 47 percent 
reserve, based on a revised crop estimate of 373,680 tons (slightly up 
from the January estimate of 373,138 tons). The Committee's 
calculations to arrive at final percentages for NS and ZC raisins are 
shown in the table below:

                   Final Volume Regulation Percentages
                        [Natural condition tons]
------------------------------------------------------------------------
                                            NS Raisins      ZC Raisins
------------------------------------------------------------------------
Trade demand............................         196,185           3,302
Divided by crop estimate................     \1\ 373,680       \2\ 4,128
                                         -----------------
    Equals free percentage..............              53              80
    100 minus free percentage equals                  47             20
     reserve percentage.................
------------------------------------------------------------------------
\1\ The crop estimate for NS raisins is underestimated, as acquisitions
  through the week ending February 22, 2003, were at 378,601 tons.

[[Page 15929]]

 
\2\ The crop estimate for ZC raisins is underestimated, as acquisitions
  through the week ending February 22, 2003, were at 4,200 tons.

    In addition, USDA's ``Guidelines for Fruit, Vegetable, and 
Specialty Crop Marketing Orders'' (Guidelines) specify that 110 percent 
of recent years' sales should be made available to primary markets each 
season for marketing orders utilizing reserve pool authority. This goal 
will be met for NS and ZS raisins by the establishment of final 
percentages, which release 100 percent of the trade demands and the 
offer of additional reserve raisins for sale to handlers under the ``10 
plus 10 offers.'' As specified in Sec.  989.54(g), the 10 plus 10 
offers are two offers of reserve pool raisins, which are made available 
to handlers during each season. For each such offer, a quantity of 
reserve raisins equal to 10 percent of the prior year's shipments is 
made available for free use. Handlers may sell their 10 plus 10 raisins 
to any market.
    For NS raisins, the first ``10 plus 10 offer'' was held in February 
2003. A total of 29,813 tons was made available to raisin handlers; all 
of the raisins were purchased. The second 10 plus 10 offer of 29,813 
tons will be made available to handlers in May 2003. Adding the total 
figure of 59,626 tons of 10 plus 10 raisins to the 200,658 tons of free 
tonnage raisins acquired by handlers from producers through the week 
ending February 22, 2003, plus 132,135 tons of 2001-02 carryin 
inventory, plus 18,000 tons of reserve raisins released during the 
season through an export program, equates to 410,419 tons of natural 
condition raisins, or 385,207 tons of packed raisins, that are 
available to handlers for free use or primary markets. This is about 
138 percent of the quantity of NS raisins shipped during the 2001-02 
crop year (298,133 natural condition tons or 279,819 packed tons).
    For ZC raisins, both ``10 plus 10 offers'' were held simultaneously 
in February 2003. A total of 688 tons was made available to handlers, 
and all of the raisins were purchased. Adding the 688 tons of 10 plus 
10 raisins to the 3,360 tons of free tonnage raisins acquired by 
handlers from producers through the week ending February 22, 2003, plus 
1,910 tons of 2001-02 carryin inventory equates to 5,958 tons of 
natural condition raisins, or about 5,268 tons of packed raisins, 
available to handlers for free use or primary markets. This is about 
173 percent of the quantity of ZC raisins shipped during the 2001-02 
crop year (3,441 tons natural condition tons or 3,043 packed tons).
    In addition to the 10 plus 10 offers, Sec.  989.67(j) of the order 
provides authority for sales of reserve raisins to handlers under 
certain conditions such as a national emergency, crop failure, change 
in economic or marketing conditions, or if free tonnage shipments in 
the current crop year exceed shipments of a comparable period of the 
prior crop year. Such reserve raisins may be sold by handlers to any 
market. When implemented, the additional offers of reserve raisins make 
even more raisins available to primary markets, which is consistent 
with USDA's Guidelines.

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 service 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.
    Since 1949, the California raisin industry has operated under a 
Federal marketing order. The order contains authority to, among other 
things, limit the portion of a given year's crop that can be marketed 
freely in any outlet by raisin handlers. This volume control mechanism 
is used to stabilize supplies and prices and strengthen market 
conditions.
    Pursuant to Sec.  989.54(d) of the order, this rule establishes 
final volume regulation percentages for 2002-03 crop NS and ZC raisins. 
The volume regulation percentages are 53 percent free and 47 percent 
reserve for NS raisins, and 80 percent free and 20 percent reserve for 
ZC raisins. Free tonnage raisins may be sold by handlers to any market. 
Reserve raisins must be held in a pool for the account of the Committee 
and are disposed of through certain programs authorized under the 
order.
    Volume regulation is warranted this season for NS raisin 
acquisitions of 378,601 tons through the week ending February 22, 2003, 
combined with the carryin inventory of 132,135 tons, plus 18,000 tons 
of reserve raisins released for free use through an export program, 
results in a total available supply of 528,736 tons, which is about 270 
percent higher than the 196,185-ton trade demand. Volume regulation is 
warranted for ZC raisins this season because acquisitions of 4,200 tons 
through the week ending February 22, 2003, combined with the carryin 
inventory of 1,910 tons results in a total available supply of 6,110 
tons, which is about twice the 3,302-ton trade demand.
    Many years of marketing experience led to the development of the 
current volume regulation procedures. These procedures have helped the 
industry address its marketing problems by keeping supplies in balance 
with domestic and export market needs, and strengthening market 
conditions. The current volume regulation procedures fully supply the 
domestic and export markets, provide for market expansion, and help 
reduce the burden of oversupplies in the domestic market.
    Raisin grapes are a perennial crop, so production in any year is 
dependent upon plantings made in earlier years. The sun-drying method 
of producing raisins involves considerable risk because of variable 
weather patterns.
    Even though the product and the industry are viewed as mature, the 
industry has experienced considerable change over the last several 
decades. Before the 1975-76 crop year, more than 50 percent of the 
raisins were packed and sold directly to consumers. Now, over 60 
percent of raisins are sold in bulk. This means that raisins are now 
sold to consumers mostly as an ingredient in another product such as 
cereal and baked goods. In addition, for a few years in the early 
1970's, over 50 percent of the raisin grapes were sold to the wine 
market for crushing. Since then, the percent of raisin-variety grapes 
sold to the wine industry has decreased.

[[Page 15930]]

In addition, the price wineries have offered for raisin grapes has 
dropped to $65 per ton.
    California's grapes are classified into three groups--table grapes, 
wine grapes, and raisin-variety grapes. Raisin-variety grapes are the 
most versatile of the three types. They can be marketed as fresh 
grapes, crushed for juice in the production of wine or juice 
concentrate, or dried into raisins. Annual fluctuations in the fresh 
grape, wine, and concentrate markets, as well as weather-related 
factors, cause fluctuations in raisin supply. This type of situation 
introduces a certain amount of variability into the raisin market. 
Although the size of the crop for raisin-variety grapes may be known, 
the amount dried for raisins depends on the demand for crushing. This 
makes the marketing of raisins a more difficult task. These supply 
fluctuations can result in producer price instability and disorderly 
market conditions.
    Volume regulation is helpful to the raisin industry because it 
lessens the impact of such fluctuations and contributes to orderly 
marketing. For example, producer prices for NS raisins remained fairly 
steady between the 1992-93 through the 1997-98 seasons, although 
production varied. As shown in the table below, during those years, 
production varied from a low of 272,063 tons in 1996-97 to a high of 
387,007 tons in 1993-94, or about 114,944 tons. According to Committee 
data, the total producer return per ton during those years, which 
includes proceeds from both free tonnage plus reserve pool raisins, has 
varied from a low of $901 in 1992-93 to a high of $1,049 in 1996-97, or 
$148. Total producer prices for the 1998-99 and 1999-2000 seasons 
increased significantly due to back-to-back short crops during those 
years. Producer prices dropped dramatically for the last two seasons 
due to record-size production and large carry-in inventories.

                    Natural Seedless Producer Prices
------------------------------------------------------------------------
                                          Deliveries
              Crop Year                    (natural      Producer Prices
                                       condition tons)      (per ton)
------------------------------------------------------------------------
2001-02..............................          377,328       \1\ $554.40
2000-01..............................          432,616        \2\ 570.82
1999-2000............................          299,910          1,211.25
1998-99..............................          240,469      \3\ 1,290.00
1997-98..............................          382,448            946.52
1996-97..............................          272,063          1,049.20
1995-96..............................          325,911          1,007.19
1994-95..............................          378,427            928.27
1993-94..............................          387,007            904.60
1992-93..............................          371,516            901.41 
------------------------------------------------------------------------
\1\ and \2\ Return-to-date, reserve pools still open.
\3\ No volume regulation.

    There are essentially two broad markets for raisins--domestic and 
export. In recent years, both export and domestic shipments have been 
decreasing. Domestic shipments decreased from a high of 204,805 packed 
tons during the 1990-91 crop year to a low of 156,325 packed tons in 
1999-2000. In addition, exports decreased from 114,576 packed tons in 
1991-92 to a low of 91,600 packed tons in the 1999-2000 crop year.
    In addition, the per capita consumption of raisins has declined 
from 2.07 pounds in 1988 to 1.46 pounds in 2001. This decrease is 
consistent with the decrease in the per capita consumption of dried 
fruits in general, which is due to the increasing availability of most 
types of fresh fruit throughout the year.
    While the overall demand for raisins has been decreasing (as 
reflected in the decline in commercial shipments and per capita 
consumption), production has been increasing. Deliveries of NS dried 
raisins from producers to handlers reached an all-time high of 432,616 
tons in the 2000-01 crop year. This large crop was preceded by two 
short crop years; deliveries were 240,469 tons in 1998-99 and 299,910 
tons in 1999-2000. Deliveries for the 2000-01 crop year soared to a 
record level because of increased bearing acreage, yields, and growers 
drying more grapes for raisins. Deliveries for the 2001-02 crop year 
were at 377,328 tons, and deliveries through February 22, 2003, for the 
current year were at 378,601 tons. Three crop years of high production 
and a large 2001-02 carryin inventory has contributed to the industry's 
burdensome supply of raisins.
    This type of surplus situation leads to serious marketing problems. 
Handlers compete against each other in an attempt to sell more raisins 
to reduce inventories and to market their crop. This situation puts 
downward pressure on growers' prices and incomes.
    The order permits the industry to exercise supply control 
provisions, which allow for the establishment of free and reserve 
percentages, and establishment of a reserve pool. One of the primary 
purposes of establishing free and reserve percentages is to equilibrate 
supply and demand. If raisin markets are over-supplied with product, 
producer prices will decline.
    Raisins are generally marketed at relatively lower price levels in 
the more elastic export market than in the more inelastic domestic 
market. This results in a larger volume of raisins being marketed and 
enhances producer returns. In addition, this system allows the U.S. 
raisin industry to be more competitive in export markets.
    To assess the impact that volume control has on the prices 
producers receive for their product, an econometric model has been 
constructed. The model developed is for the purpose of estimating 
nominal prices under a number of scenarios using the volume control 
authority under the Federal marketing order. The price producers 
receive for the harvest and delivery of their crop is largely 
determined by the level of production and the volume of carryin 
inventories. The Federal marketing order permits the industry to 
exercise supply control provisions, which allow for the establishment 
of reserve and free percentages for primary markets, and a reserve 
pool. The establishment of reserve percentages impacts the production 
that is marketed in the primary markets.
    The reserve percentage limits what handlers can market as free 
tonnage. Assuming the 53 percent reserve limits the total free tonnage 
to 200,658 natural

[[Page 15931]]

condition tons (.53 x 378,601 tons delivered through February 22, 2003) 
and carryin is 132,135 natural condition tons, and purchases from 
reserve total 77,626 natural condition tons (which includes anticipated 
reserve raisins released through the export program and other 
purchases), then the total free supply is estimated at 410,419 natural 
condition tons. The econometric model estimates prices to be $142 per 
ton higher than under an unregulated scenario. This price increase is 
beneficial to all producers regardless of size and enhances producers' 
total revenues in comparison to no volume control. Establishing a 
reserve allows the industry to help stabilize supplies in both domestic 
and export markets, while improving returns to producers.
    Regarding ZC raisins, ZC raisin production is much smaller than NS 
raisin production. Volume regulation has been implemented for ZC 
raisins during the 1994-95, 1995-96, 1997-98, 1998-99, 1999-2000, and 
2000-01 seasons. Various programs to utilize reserve pool ZC raisins 
were implemented during those years. As shown in the table below, 
although production varied during those years, volume regulation helped 
to reduce inventories, and helped to strengthen total producer prices 
(free tonnage plus reserve ZC raisins) from $412.56 per ton in 1994-95 
to a high of $1,034.03 per ton in 1998-99. The Committee is 
implementing an export program for ZC raisins, in addition to NS 
raisins. Through this program, the Committee plans to continue to 
manage its ZC supply, build and maintain export markets, and ultimately 
improve producer returns. Volume regulation helps the industry not only 
to manage oversupplies of raisins, but also maintain market stability.

         ZC Inventories and Producer Prices During Years of Volume Regulation --(natural condition tons)
----------------------------------------------------------------------------------------------------------------
                                                                                  Inventory          Producer
                           Crop year                             Deliveries ---------------------   prices (per
                                                                             Desirable  Physical       ton)
----------------------------------------------------------------------------------------------------------------
2001-02........................................................      4,213       1,227     1,395    \1\$1,000.00
2000-01........................................................      4,848       1,227     1,109          851.55
1999-2000......................................................      3,683         573     1,906          669.14
1998-99........................................................      3,880         694     1,188        1,034.03
1997-98........................................................      4,826         788     1,679          710.08
1996-97........................................................      4,491         987       549     \2\1,150.00
1995-96........................................................      3,294         782     2,890          711.32
1994-95........................................................      5,377         837     4,364          412.56 
----------------------------------------------------------------------------------------------------------------
\1\ and \2\ No volume regulation.

    Free and reserve percentages are established by varietal type, and 
usually in years when the supply exceeds the trade demand by a large 
enough margin that the Committee believes volume regulation is 
necessary to maintain market stability. Accordingly, in assessing 
whether to apply volume regulation or, as an alternative, not to apply 
such regulation, it has been determined that volume regulation is 
warranted this season for only two of the ten raisin varietal types 
defined under the order.
    The free and reserve percentages established by this rule release 
the full trade demands and apply uniformly to all handlers in the 
industry, regardless of size. For NS raisins, with the exception of the 
1998-99 crop year, small and large raisin producers and handlers have 
been operating under volume regulation percentages every year since 
1983-84. There are no known additional costs incurred by small handlers 
that are not incurred by large handlers. While the level of benefits of 
this rulemaking are difficult to quantify, the stabilizing effects of 
the volume regulations impact small and large handlers positively by 
helping them maintain and expand markets even though raisin supplies 
fluctuate widely from season to season. Likewise, price stability 
positively impacts small and large producers by allowing them to better 
anticipate the revenues their raisins will generate.
    There are some reporting, recordkeeping and other compliance 
requirements under the order. The reporting and recordkeeping burdens 
are necessary for compliance purposes and for developing statistical 
data for maintenance of the program. The requirements are the same as 
those applied in past seasons. Thus, this action imposes no additional 
reporting or recordkeeping burdens on either small or large handlers. 
The forms require information which is readily available from handler 
records and which can be provided without data processing equipment or 
trained statistical staff. The information collection and recordkeeping 
requirements have been previously approved by the Office of Management 
and Budget (OMB) under OMB Control No. 0581-0178. As with other similar 
marketing order programs, reports and forms are periodically studied to 
reduce or eliminate duplicate information collection burdens by 
industry and public sector agencies. In addition, USDA has not 
identified any relevant Federal rules that duplicate, overlap, or 
conflict with this rule. Finally, interested persons are invited to 
submit information on the regulatory and informational impacts of this 
action on small businesses.
    Further, Committee and subcommittee meetings are widely publicized 
in advance and are held in a location central to the production area. 
The meetings are open to all industry members, including small business 
entities, and other interested persons who are encouraged to 
participate in the deliberations and voice their opinions on topics 
under discussion.
    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 material 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.
    This rule invites comments for a 60-day period on the establishment 
of final volume regulation percentages for 2002-03 crop NS and ZC 
raisins covered under the order. All comments received within the 
comment period will be considered prior to finalization of this rule.

[[Page 15932]]

    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) The relevant provisions of this part require that 
the percentages designated herein for the 2002-03 crop year apply to 
all NS and ZC raisins acquired from the beginning of that crop year; 
(2) handlers are currently marketing their 2002-03 crop NS and ZC 
raisins and this action should be taken promptly to achieve the 
intended purpose of making the full trade demands available to 
handlers; (3) handlers are aware of this action, which was recommended 
at public meetings, and need no additional time to comply with these 
percentages; and (4) this interim final rule provides a 60-day comment 
period, and all comments timely received will be considered prior to 
finalization of this rule.

List of Subjects in 7 CFR Part 989

    Grapes, Marketing agreements, Raisins, Reporting and recordkeeping 
requirements.

0
For the reasons set forth in the preamble, 7 CFR part 989 is amended to 
read as followed:

PART 989--RAISINS PRODUCED FROM GRAPES GROWN IN CALIFORNIA

0
1. The authority citation for 7 CFR part 989 continues to read as 
follows:

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

0
2. Section 989.256 is added to Subpart--Supplementary Regulations to 
read as follows:

    Note: This section will not appear in the annual Code of Federal 
Regulations.

Sec.  989.256  Final free and reserve percentages for the 2002-03 crop 
year.

    The final percentages for standard Natural (sun-dried) Seedless and 
Zante Currant raisins acquired by handlers during the crop year 
beginning on August 1, 2002, which shall be free tonnage and reserve 
tonnage, respectively, are designated as follows:

------------------------------------------------------------------------
                                                    Free       Reserve
                 Varietal type                   percentage   percentage
------------------------------------------------------------------------
Natural (sun-dried) Seedless..................           53           47
Zante Currant.................................           80           20
------------------------------------------------------------------------


    Dated: March 27, 2003.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 03-7938 Filed 4-1-03; 8:45 am]
BILLING CODE 3410-02-P