[Federal Register Volume 68, Number 147 (Thursday, July 31, 2003)]
[Rules and Regulations]
[Pages 44857-44859]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-19492]



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 Rules and Regulations
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  Federal Register / Vol. 68, No. 147 / Thursday, July 31, 2003 / Rules 
and Regulations  

[[Page 44857]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 989

[Docket No. FV03-989-7 IFR]


Raisins Produced From Grapes Grown in California; Reduction in 
Additional Storage Payments Regarding Reserve Raisins Intended for Use 
as Cattle Feed

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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

SUMMARY: This rule reduces the additional holding and storage payments 
regarding 2002 Natural (sun-dried) Seedless reserve raisins that are 
carried into the 2003 crop year and intended for use as cattle feed. 
The crop year runs from August 1 through July 31. Such payments are 
authorized under the Federal marketing order for California raisins 
(order). The order regulates the handling of raisins produced from 
grapes grown in California and is administered locally by the Raisin 
Administrative Committee (RAC). This action will reduce expenses 
incurred by the 2002 reserve pool and thereby help improve returns to 
2002 equity holders, primarily raisin producers.

DATES: Effective August 1, 2003. Comments received by September 29, 
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, 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 rule reduces the additional holding and storage payments 
regarding 2002 NS reserve raisins that are carried into the 2003 crop 
year and intended for use as cattle feed. The crop year runs from 
August 1 through July 31. Under the order, handlers are compensated for 
receiving, storing, fumigating, and handling reserve tonnage raisins 
acquired during a crop year. The order also authorizes additional 
payments for reserve raisins held beyond the crop year of acquisition. 
The RAC met on July 2, 2003, and unanimously recommended that 
additional payments for reserve raisins intended for use as cattle feed 
accrue beginning September 13, 2003, rather than August 1, 2003. This 
action will reduce expenses incurred by the 2002 reserve pool and 
thereby help improve returns to 2002 equity holders, primarily raisin 
producers.

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

[[Page 44858]]

raisins, such as government purchase, distilleries, or animal feed. Net 
proceeds from sales of reserve raisins are ultimately distributed to 
the reserve pool's equity holders, primarily producers.

Costs Regarding Holding and Storage of Reserve Raisins

    Section 989.66(f) of the order specifies that handlers be 
compensated for receiving, storing, fumigating, and handling that 
tonnage of reserve raisins determined by the reserve percentage of a 
crop year and held by them for the account of the RAC, in accordance 
with a schedule of payments established by the RAC and approved by the 
Secretary. Further, the RAC must pay rent to producers or handlers for 
boxes used in storing reserve raisins held beyond the crop year of 
acquisition. As previously mentioned, the crop year runs from August 1 
through July 31.
    Section 989.401(b) of the order's rules and regulations specifies 
additional payments to handlers for storing, handling, and fumigating 
reserve raisins held beyond the crop year of acquisition. Specifically, 
handlers must be compensated for such raisins at a rate of $2.30 per 
ton for the first 3 months (August through October), and at a rate of 
$1.18 per ton per month for the remaining 9 months (November through 
July).
    Section 989.401(c) specifies further payment of rental on boxes and 
bins containing raisins held beyond the crop year of acquisition. 
Specifically, persons who furnish boxes or bins used for storing 
reserve raisins held for the account of the RAC on August 1 are 
compensated for the use of such containers as follows: For boxes, 2\1/
2\ cents per day, not to exceed a total payment of $1.00 per box per 
year, per average net weight of raisins in a sweatbox, with equivalent 
rates for raisins in boxes other than sweatboxes; and for bins, 20 
cents per day per bin, not to exceed a total of $10.00 per bin per 
year.

Disposal Program

    Pursuant to Sec.  989.67(b) of the order, the RAC is implementing a 
program to dispose of 40,000 tons of 2002 NS reserve raisins for use as 
cattle feed. The tonnage is stored at handler facilities and will be 
adulterated to ensure that the raisins remain in non-commercial 
channels. The program is intended to help the industry reduce its 
burdensome oversupply of raisins. It will also help make available bins 
for storing raisins during the new crop year, which begins August 1, 
2003. Barring unforeseen circumstances, reserve tonnage intended for 
use as cattle feed should be removed from handler premises by mid-
September 2003.

RAC Recommendation

    The RAC met on July 2, 2003, and unanimously recommended reducing 
the additional holding and storage payments regarding 2002 NS reserve 
raisins held by handlers on August 1, 2003, and intended for use as 
cattle feed. Specifically, additional payments for such raisins will 
accrue beginning September 13, 2003, rather than August 1, 2003. Thus, 
additional costs will only be incurred for such tonnage that remains at 
handler premises after September 12, 2003. Payments for storing and 
holding reserve raisins are deducted from reserve pool proceeds, and 
net proceeds are ultimately distributed to equity holders. Thus, 
reducing the expenses for 2002 NS reserve tonnage intended for use as 
cattle feed will help improve returns to 2002 equity holders.

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.
    This rule reduces the additional holding and storage payments 
specified in paragraphs (b) and (c) of Sec.  989.401 regarding 2002 NS 
reserve raisins that are intended for use as cattle feed. Specifically, 
additional payments for such raisins will accrue beginning September 
13, 2003, rather than August 1, 2003. Under the order, handlers are 
compensated for receiving, storing, fumigating, and handling reserve 
tonnage raisins acquired during a crop year. The order also authorizes 
additional holding and storage payments for reserve raisins held beyond 
the crop year of acquisition. This action reduces these additional 
payments for 2002 NS reserve raisins held by handlers on August 1, 
2003, that are intended for use as cattle feed. Authority for this 
action is provided in Sec.  989.66(f) of the order.
    Regarding the impact of this rule on affected entities, handlers 
and producers, the order provides that handlers store reserve raisins 
for the account of the RAC. Net proceeds from sales of such reserve 
raisins are distributed to the reserve pool's equity holders, primarily 
producers. Handlers are compensated from reserve pool funds for their 
costs in receiving, storing, fumigating, and handling reserve raisins 
during the crop year of acquisition and for the subsequent crop year. 
Compensation is also paid for the use of bins and boxes for storing 
reserve raisins held beyond the crop year of acquisition.
    Under the disposal program, it is estimated that about 22,500 tons 
of reserve raisins will remain at handler premises after August 1, 
2003. If 634 tons were removed per day, costs to store, handle, and 
fumigate the tonnage at the current rate of $2.30 per day between 
August 1 and September 12, 2003, would be $59,133.00. Bin-rental costs 
for the same period at the current rate of $0.20 per day per bin would 
be $161,966.00. Thus, the RAC would incur an estimated $221,000 for 
holding and storing 2002 reserve raisins that are intended for use as 
cattle feed between August 1 and September 12, 2003. This rule will 
reduce these costs to zero and thereby reduce expenses incurred by the 
2002 NS reserve pool. Handlers, however, will not be compensated this 
amount for holding and storing this tonnage.
    Regarding alternatives to this action, one option would be to 
maintain the status quo and have the 2002 reserve pool incur these 
costs. However, this would not help to improve returns to 2002 equity 
holders. Another alternative would be to reduce the payments for the 
period August 1 through September 12, 2003, to figures lower than those 
currently specified in Sec.  989.401. However, all RAC members 
supported

[[Page 44859]]

reducing the additional holding and storage payments for 2002 reserve 
raisins intended for use as cattle feed so that such payments will 
accrue beginning September 13, 2003, rather than August 1, 2003.
    This rule imposes no additional reporting or recordkeeping 
requirements on either small or large raisin handlers. 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.
    Further, the RAC's Administrative Issues Subcommittee and RAC 
meetings on July 2, 2003, where this action was deliberated were both 
public meetings widely publicized throughout the raisin industry. All 
interested persons were invited to attend the meetings and participate 
in the industry's deliberations. Finally, all interested persons are 
invited to submit information on the regulatory and informational 
impacts of this action 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 invited to allow interested persons to 
respond to this rule. All written comments timely received will be 
considered prior to finalization of this rule.
    After consideration of all relevant material presented, including 
the information and recommendation submitted by the RAC 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.
    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 action needs to be in place by August 1, 
2003, so that additional payments regarding reserve raisins held by 
handlers on August 1, 2003, and intended for cattle feed will be 
incurred beginning September 13, 2003, rather than August 1 2003; (2) 
handlers and producers are aware of this action which was recommended 
by the RAC at a public meeting; (3) the action was recommended by a 
unanimous vote of the RAC; and (4) this interim final rule provides a 
60-day comment period for written comments 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 as 
follows:

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. In Sec.  989.401, paragraphs (b) and (c) are revised to read as 
follows:


Sec.  989.401  Payments for services performed with respect to reserve 
tonnage raisins.

* * * * *
    (b) Additional payment for reserve tonnage raisins held beyond the 
crop year of acquisition. Additional payment for reserve tonnage 
raisins held beyond the crop year of acquisition shall be made in 
accordance with this paragraph. Each handler holding such raisins for 
the account of the Committee on August 1 shall be compensated for 
storing, handling, and fumigating such raisins at the rate of $2.30 per 
ton per month, or any part thereof, between August 1 and October 31, 
and at the rate of $1.18 per ton per month, or any part thereof, 
between November 1 and July 31: Provided, That handlers holding 2002-03 
Natural (sun-dried) Seedless reserve raisins on August 1, 2003, that 
are intended for use as cattle feed shall be compensated for storing, 
handling, and fumigating such raisins at the rate of $2.30 per ton per 
month, or any part thereof, between September 13 and October 31, 2003, 
and at the rate of $1.18 per ton per month, or any part thereof, 
between November 1, 2003, and July 31, 2004. Such services shall be 
completed so that the Committee is assured that the raisins are 
maintained in good condition.
    (c) Payment of rental on boxes and bins containing raisins held 
beyond the crop year of acquisition. Payment of rental on boxes and 
bins containing reserve tonnage raisins held beyond the crop year of 
acquisition shall be made in accordance with this paragraph. Each 
handler, producer, dehydrator, and other person who furnishes boxes or 
bins in which such raisins are held for the account of the Committee on 
August 1, shall be compensated for the use of such boxes and bins: 
Provided, That persons holding 2002-03 Natural (sun-dried) Seedless 
reserve raisins on September 13, 2003, that are intended for use as 
cattle feed shall be compensated for the use of such boxes and bins, 
and that no compensation shall be accrued for such raisins held between 
August 1 and September 12, 2003. The rate of compensation shall be: For 
boxes, two and one-half cents per day, not to exceed a total payment of 
$1 per box per year, per average net weight of raisins in a sweatbox, 
with equivalent rates for raisins in boxes other than sweatboxes; and 
for bins 20 cents per day per bin, not to exceed a total of $10 per bin 
per year. For purposes of this paragraph, box means any container with 
a capacity of less than 1,000 pounds, and bin means any container with 
a capacity of 1,000 pounds or more. The average net weight of raisins 
in each type of box shall be the industry average as computed by the 
Committee for the box in which the raisins are so held. No further 
compensation shall be paid unless the raisins are so held in the boxes 
on the succeeding August 1.
* * * * *

    Dated: July 25, 2003.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 03-19492 Filed 7-28-03; 1:04 pm]
BILLING CODE 3410-02-P