[Federal Register Volume 68, Number 220 (Friday, November 14, 2003)]
[Rules and Regulations]
[Pages 64502-64504]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-28519]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 989

[Docket No. FV03-989-7 FIR]


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: Final rule.

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SUMMARY: The Department of Agriculture (USDA) is adopting, as a final 
rule, without change, an interim final rule that reduced the additional 
holding and storage payments regarding 2002 Natural (sun-dried) 
Seedless (NS) reserve raisins that were carried into the 2003 crop year 
and used 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 continues to 
reduce expenses incurred by the 2002 reserve pool and thereby helps 
improve returns to 2002 equity holders, primarily raisin producers.

EFFECTIVE DATE: Effective December 15, 2003.

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

[[Page 64503]]

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.''
    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 continues to reduce the additional holding and storage 
payments regarding 2002 NS reserve raisins that were carried into the 
2003 crop year and used 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 used as cattle feed accrue 
beginning September 13, 2003, rather than August 1, 2003. This action 
continues to reduce expenses incurred by the 2002 reserve pool and 
thereby helps 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 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 implemented a 
program to dispose of about 38,000 tons of 2002 NS reserve raisins for 
use as cattle feed. The tonnage was stored at handler facilities and 
was adulterated to ensure that the raisins remain in non-commercial 
channels. The program helped the industry reduce its burdensome 
oversupply of raisins. It also helped to make available bins for 
storing raisins during the new crop year, which began August 1, 2003. 
Nearly all of the reserve tonnage that was used as cattle feed was 
removed from handler premises by mid-September 2003 (about 425 tons 
remained).

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 used as cattle feed. 
Specifically, additional payments for such raisins were accrued 
beginning September 13, 2003, rather than August 1, 2003. Thus, 
additional costs were only incurred for such tonnage that remained at 
handler premises after September 12, 2003 (425 tons). 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 used 
as cattle feed will help improve returns to 2002 equity holders.

Final 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.

[[Page 64504]]

Accordingly, AMS has prepared this final regulatory flexibility 
analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and 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 that $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 continues to reduce the additional holding and storage 
payments specified in paragraphs (b) and (c) of Sec.  989.401 regarding 
2002 NS reserve raisins that were used as cattle feed. Specifically, 
additional payments for such raisins accrued 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 continues to reduce these 
additional payments for 2002 NS reserve raisins held by handlers on 
August 1, 2003, that were used 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, 22,541 tons of reserve raisins remained 
at handler premises after August 1, 2003. About 525 tons were removed 
per day. The cost to store, handle, and fumigate the remaining tonnage 
at the rate of $2.30 per ton per month between August 1 and September 
12, 2003, would have been about $66,256. Bin-rental costs for the same 
period at the current rate of $0.20 per day per bin would have been 
about $198,075.00. Thus, the RAC saved about $264,331 in costs that 
would have been used for holding and storing 2002 reserve raisins 
intended for use as cattle feed between August 1 and September 12, 
2003. This rule continues to 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 reducing the additional holding and storage payments for 2002 
reserve raisins intended for use as cattle feed so that such payments 
accrued 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.
    An interim final rule concerning this action was published in the 
Federal Register on July 31, 2003 (68 FR 44857). Copies of the rule 
were mailed by the RAC staff to all RAC members and alternates, the 
Raisin Bargaining Association, handlers, and dehydrators. In addition, 
the rule was made available through the Internet by the Office of the 
Federal Register and USDA. The rule provided for a 60-day comment 
period that ended on September 29, 2003. No comments were received.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/fv/moab.html. Any questions about the compliance 
guide should be sent to Jay Guerber at the previously mentioned address 
in the FOR FURTHER INFORMATION CONTACT section.
    After consideration of all relevant 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.

List of Subjects in 7 CFR Part 989

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

PART 989--RAISINS PRODUCED FROM GRAPES GROWN IN CALIFORNIA

0
Accordingly, the interim final rule amending 7 CFR part 989 which was 
published at 68 FR 44857 on July 31, 2003, is adopted as a final rule 
without change.

    Dated: November 7, 2003.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 03-28519 Filed 11-13-03; 8:45 am]
BILLING CODE 3410-02-P