[Federal Register Volume 68, Number 131 (Wednesday, July 9, 2003)]
[Rules and Regulations]
[Pages 40754-40757]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-17276]


-----------------------------------------------------------------------

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 993

[Docket No. FV03-993-2 IFR]


Dried Prunes Produced in California; Temporary Suspension of the 
Prune Reserve and the Voluntary Producer Prune Plum Diversion 
Provisions

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

-----------------------------------------------------------------------

SUMMARY: This rule suspends the prune reserve and the voluntary 
producer prune plum diversion provisions in the California Dried Prune 
Marketing Order (order) and the administrative rules and regulations 
related to volume control restrictions for a five-year period. The 
order regulates the handling of dried prunes produced in California and 
is administered locally by the Prune Marketing Committee (PMC). 
Suspension of these provisions will ensure that volume control 
restrictions would not be implemented under these provisions. During 
the five-year suspension period, the industry will have the opportunity 
to determine whether these provisions should be modified, terminated, 
or continue unchanged. In the absence of additional rulemaking to 
modify or terminate these provisions, they would come back into effect 
automatically at the end of the five-year period.

DATES: Effective August 1, 2003, through July 31, 2008. Comments 
received by September 8, 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: Richard P. Van Diest, 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, or 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. 993 (7 CFR part 993), both as amended, 
regulating the handling of dried prunes produced in California, 
hereinafter referred to as the ``order.'' The order is effective under 
the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 
601-674), hereinafter referred to as the ``Act.''
    The Department of Agriculture (Department) is issuing this rule in 
conformance with Executive Order 12866.
    This 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

[[Page 40755]]

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 rule suspends for five years all provisions in the order and 
administrative rules and regulations concerning the prune reserve and 
voluntary producer prune plum diversion. These changes were unanimously 
recommended by the PMC. This action is needed to ensure that reserve 
percentages would not be established, and that a prune plum diversion 
program would not be implemented pursuant to these provisions. During 
the five-year suspension period, the industry will have the opportunity 
to determine whether these provisions should be modified, terminated, 
or remain unchanged.

Marketing Order Authority To Suspend

    Section 993.90(a) states in part: ``The Secretary shall terminate 
or suspend the operation of any or all of the provisions of this 
subpart, whenever he/she finds that such provisions do not tend to 
effectuate the declared policy of the act.''

Volume Regulation Provisions

    Section 993.54 of the order provides authority for volume 
regulation through establishing salable and reserve percentages of 
prunes received by handlers (prune reserve). When the prune reserve is 
in effect, the salable percentage of the California prune crop may be 
sold to any market while the reserve percentage must be held by the 
handlers for the account of the PMC. Reserve prunes may be sold to meet 
either domestic or foreign trade demand or for use in outlets 
noncompetitive with normal outlets for salable prunes. Net proceeds 
from sales of reserve prunes are ultimately distributed to producers. 
The prune reserve is designed to promote orderly marketing conditions, 
stabilize prices and supplies, and improve producer returns.

Voluntary Prune Plum Diversion Program

    Section 993.62 of the order authorizes a producer diversion 
program, which prune producers may use when a prune reserve is 
implemented. Section 993.162 of the administrative rules and 
regulations specifies implementing procedures. Under the producer 
diversion program, any prune producer may divert prune plums of his own 
production for eligible purposes and receive a diversion certificate 
from the PMC. The certificate may be submitted to any handler in lieu 
of reserve prunes and the handler may apply the quantity represented by 
the certificate towards his reserve obligation. Participation in this 
program would reduce a producer's expenses to convert prune plums into 
dried prunes that would ultimately be placed in a relatively low value 
prune reserve.

Background and Action Taken

    The prune reserve was last implemented in 1974 and the producer 
diversion program was last used in 1971. These programs were 
controversial in the 1970s and have become increasingly so since then. 
Some of the independent prune handlers who are also prune producers now 
oppose any regulatory marketing restrictions because they want to sell 
all of the prunes they have produced. If additional tonnage is needed, 
such handlers would buy prunes from other producers to meet their 
market demand. In addition, if a prune reserve is implemented, it may 
require these handlers to contract for additional tonnage in order to 
meet their reserve obligation.
    Recently in 2001, when the PMC recommended using supply control 
techniques, some of the independent handlers and producers opposed the 
use of these programs. Ultimately, the supply control programs were not 
implemented at that time. Also, some in the industry do not support the 
use of these supply control provisions because the industry has 
successfully reduced crop sizes through other means.
    Through industry and USDA funded tree pull programs, the industry 
has removed over 18,000 acres of prune plum trees; thus reducing the 
annual prune production by at least 27,000 tons of prunes over the 
five-year suspension period.
    During the five-year suspension period, the industry will have the 
opportunity to either recommend that these provisions be terminated 
through rulemaking procedures, or recommend modifications to the 
provisions to make them more acceptable to all segments of the 
industry. In the interim, the suspension of these provisions would 
ensure that these provisions are not implemented. In the absence of any 
additional action, the provisions will automatically come back into 
effect at the end of the suspension period.
    The PMC unanimously recommended this action at an April 3, 2003, 
meeting. This interim final rule suspends Sec. Sec.  993.21d, 
993.36(i), 993.54, 993.55, 993.56, 993.57, 993.58, 993.59, 993.62, 
993.65 of the order, and Sec. Sec.  993.156, 993.157, 993.158, 993.159, 
993.162, 993.165 and 993.172(e) of the administrative rules and 
regulations in effect under the order. Portions of Sec. Sec.  993.33 
and 993.41(b) of the order and portions of Sec. Sec.  993.173(a)(6), 
993.173(b)(3), and 993.173(c)(1) of the administrative rules and 
regulations are also suspended. These sections of the order and 
administrative rules and regulations pertain to the various 
requirements of the prune reserve and producer diversion programs.

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.

Industry Profile

    There are approximately 1,205 producers of dried prunes in the 
production area and approximately 21 handlers subject to regulation 
under the marketing order. Small agricultural producers are defined by 
the Small Business Administration (13 CFR 121.201) as those having 
annual receipts of less than $750,000 and small agricultural service 
firms are defined as those having annual receipts of less than 
$5,000,000.
    Eight of the 21 handlers (38 percent) shipped over $5,000,000 worth 
of dried prunes and could be considered large handlers by the Small 
Business Administration. Thirteen of the 21 handlers (62 percent) 
shipped less than $5,000,000 worth of dried prunes and

[[Page 40756]]

could be considered small handlers. An estimated 32 producers, or less 
than 3 percent of the 1,205 total producers, would be considered large 
growers with annual incomes over $750,000. The majority of handlers and 
producers of California dried prunes may be classified as small 
entities.

Summary of Rule Change

    This rule suspends for five years all provisions in the order and 
administrative rules and regulations concerning the prune reserve and 
voluntary producer diversion programs. These supply control programs 
have been and continue to be controversial in the industry. 
Furthermore, the industry has successfully reduced crop sizes through 
other means. Through industry and USDA funded tree pull programs, over 
18,000 acres of prune plum trees have been removed, reducing production 
by at least 27,000 tons over the five-year suspension period.
    This action would ensure that the reserve and diversion volume 
control programs are not implemented for the period of the suspension. 
During the five-year suspension period, the industry will have the 
opportunity to determine whether these provisions should be modified, 
terminated, or remain the same. In the absence of further rulemaking, 
these provisions will automatically come back into effect at the end of 
the suspension period. Authority to suspend these provisions of the 
marketing order and administrative rules and regulations is provided in 
Sec.  993.90(a) of the order.

Impact of Regulation

    Regarding the impact of this rule on affected entities, this action 
could reduce the reporting and recordkeeping burden on California prune 
handlers and producers and reduce some of the PMC's administrative 
costs. Although the prune reserve and producer diversion programs have 
not been implemented since the 1970's and handlers and producers have 
not been required to file reports pertaining to these programs, 
suspending these provisions would reduce the potential reporting burden 
on handlers and producers. Suspension of the provisions eliminates the 
possibility of requiring handlers and producers to file reports 
associated with the programs. It would also reduce some of the 
potential PMC administrative costs of managing these programs. The PMC 
estimates that 21 California prune handlers would be subject to these 
provisions and to filing reports pertaining to these programs. Also, if 
a producer diversion program was implemented, it is estimated that as 
many as 300 producers would file forms applicable to this program. If 
handlers filed reports under the prune reserve program, their estimated 
burden would be 57 hours. If growers filed reports under the diversion 
program, their estimated burden would be 75.58 hours. Thus, there is a 
potential for reducing the estimated annual burden of 132.58 hours. The 
benefits of this interim final rule would apply to all prune handlers 
and producers, regardless of their size of operation.
    The forms applicable to these programs are as follows: (1) Form PMC 
4.1, Reserve Prunes Held--Handler; (2) Form PMC 4.2, Prune Reserve 
Tonnage Sales Agreement; (3) Form PMC 4.5, Certificate of Insurance 
Coverage; (4) Form PMC 5.1, Notice of Proposed Intent to Store Reserve 
Prunes; (5) Form PMC 8.44, Request for Replacement of Draft; (6) Form 
PMC 8.443, Claim for Reserve Pool Proceeds; (7) Form PMC 9.1, 
Notification of Desire for Deferment of Reserve Withholding; (8) Form 
PMC 10.1, Application for Prune Plum Diversion; (9) No form number, 
Proof of Diversion; and (10) No form number, Notification of Report of 
Diversion.
    It should be noted that if the PMC determines this action is having 
an unfavorable impact on the industry, it could meet and recommend 
rescinding the suspension. Also, as previously mentioned, the 
provisions would automatically come back into effect at the end of the 
suspension period.

Alternatives Considered

    The PMC and industry members discussed at the PMC's April 3, 2003, 
meeting different alternatives to this action. The PMC discussed the 
possibility of amending the marketing order provisions relating to 
reserve and producer diversion programs but determined it would prefer 
to eliminate the prune reserves and producer diversion provisions from 
the order and administrative rules and regulations in a more timely 
fashion. During the suspension, the industry will have the opportunity 
to consider possible order amendments to these volume control 
provisions. Another alternative would be to terminate the marketing 
order. Many on the PMC and in the industry deemed termination too 
drastic an action and preferred to preserve the marketing order and 
make necessary changes to it to meet current industry needs and to 
reflect current industry marketing practices.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the applicable forms being suspended by this rule were 
approved previously by the Office of Management and Budget and assigned 
OMB 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.
    In addition, USDA has not identified any relevant Federal rules 
that duplicate, overlap or conflict with this rule.
    The PMC's April 3, 2003, meeting where this issue was deliberated 
was widely publicized throughout the prune industry and all interested 
persons were invited to attend the meetings and participate in the 
industry's deliberations. Like all PMC meetings, this meeting was a 
public meeting and all entities, both large and small, were able to 
express their views on these issues. Finally, interested persons are 
invited to submit information on the regulatory and informational 
impacts of these changes on small businesses.
    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. All written comments timely received will be 
considered before a final determination is made on this matter.
    After consideration of all relevant material presented, including 
the PMC's recommendation, and other information, it is found that the 
provisions being suspended would not tend to effectuate the declared 
policy of the Act during the August 1, 2003, through July 31, 2008.
    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 should be implemented as soon as possible so 
California dried prune producers and handlers can plan accordingly; (2) 
this rule relaxes requirements in the order and administrative rules 
and regulations related to volume control activities; (3) these changes 
were unanimously recommended at a public meeting and interested parties 
had an opportunity to provide input; and (4) a 60-day comment period is 
provided and all

[[Page 40757]]

comments received will be considered prior to finalization of this 
rule.

List of Subjects in 7 CFR Part 993

    Marketing agreements, Plums, Prunes, Reporting and recordkeeping 
requirements.

0
For the reasons set forth in the preamble, 7 CFR part 993 is amended as 
follows:

PART 993--DRIED PRUNES PRODUCED IN CALIFORNIA

0
1. The authority citation for 7 CFR part 993 continues to read as 
follows:

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


0
2. In Part 993, Sec. Sec.  993.21d, 993.54, 993.55, 993.56, 993.57, 
993.58, 993.59, 993.62, 993.65, 993.156, 993.157, 993.158, 993.159, 
993.162, 993.165, and 993.172(e) are suspended in their entirety.


Sec.  993.33  [Suspended in part]

0
3. In the first sentence of Sec.  993.33, the words, ``salable and 
reserve percentages, and on any matters pertaining to the control or 
disposition of reserve prunes or to prune plum diversion pursuant to 
Sec.  993.62,'' are suspended.

0
4. In Sec.  993.36, paragraph (i) is suspended.


Sec.  993.41  [Amended]

0
5. Section 993.41 is amended as follows:
0
a. Suspending paragraph (b)(2) in its entirety.
0
b. Suspending the words ``and reserve'' in paragraph (b)(3).
0
c. Suspending words ``without regard to possible diversions of prune 
plums by producers'' in paragraph (b)(4).
0
d. Suspending paragraphs (b)(10), (b)(11), and (b)(12) in their 
entirety.


Sec.  993.173  [Amended]

0
6. In Sec.  993.173, paragraph (a)(6) the words ``itemized as to 
salable and reserve prunes by category'' are suspended and in paragraph 
(c)(1) the words ``and the tonnage of reserve prunes by size in each 
category;'' are suspended.

    Dated: July 2, 2003.
A. J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 03-17276 Filed 7-8-03; 8:45 am]
BILLING CODE 3410-02-P