[Federal Register Volume 71, Number 200 (Tuesday, October 17, 2006)]
[Rules and Regulations]
[Pages 60807-60810]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-17192]


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

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 924 and 944

[Docket No. FV06-924-1 FIR]


Fresh Prunes Grown in Designated Counties in Washington and in 
Umatilla County, OR; Suspension of Handling Regulations, Establishment 
of Reporting Requirements, and Suspension of the Fresh Prune Import 
Regulation

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

SUMMARY: The U.S. Department of Agriculture (USDA) is adopting, as a 
final rule, without change, an interim final rule suspending the 
handling regulations prescribed under the Washington-Oregon fresh prune 
marketing order for the 2006 and future seasons. The marketing order 
regulates the handling of fresh prunes grown in designated counties in 
Washington and in Umatilla County, Oregon, and is administered locally 
by the Washington-Oregon Prune Marketing Committee (Committee). This 
rule continues in effect the action that suspended the minimum grade, 
size, quality, maturity, and inspection requirements for fresh prune 
handlers under the marketing order. During the suspension of the 
handling regulations, reports from handlers will continue to be 
required to obtain information necessary to administer the marketing 
order. In addition, this rule continues in effect the suspension of 
fresh prune import inspection and minimum quality, grade, size, and 
maturity requirements.

DATES: Effective Date: November 16, 2006.

FOR FURTHER INFORMATION CONTACT: Barry Broadbent or Gary Olson, 
Northwest Marketing Field Office, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, 1220 SW Third Avenue, 
Suite 385, Portland, OR 97204; Telephone: (503) 326-2724, Fax: (503) 
326-7440, or e-mail: [email protected] or [email protected].
    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. 924, as amended (7 CFR 924), regulating the 
handling of fresh prunes grown in designated counties in Washington and 
in Umatilla County, Oregon, 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.'' This rule is also issued under section 8e of the Act regarding 
the establishment of inspection and quality, grade, size, or maturity 
requirements on imports of commodities that are similarly regulated 
under Federal marketing orders.
    USDA is issuing this rule in conformance with Executive Order 
12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule is not intended to have retroactive effect. 
This rule will not preempt any State or local laws, regulations, or 
policies, unless they present an irreconcilable conflict with this 
rule.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 608c(15)(A) of the 
Act, any handler subject to an order may file with USDA a petition 
stating that the order, any provision of the order, or any obligation 
imposed in connection with the order is not in accordance with law and 
request a modification of the order or to be exempted therefrom. 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.
    There are no administrative procedures that must be exhausted prior 
to any judicial challenge to the provisions of import regulations 
issued under section 8e of the Act.
    This rule continues in effect the action that suspended the 
handling regulations prescribed under the order for the 2006 and future 
seasons.

[[Page 60808]]

Specifically, this rule suspends the minimum grade, size, quality, 
maturity, and inspection requirements under the order. In addition, 
this rule continues in effect the suspension of regulation of fresh 
prune import under section 8e of the Act.
    Furthermore, this rule continues in effect the action that 
established a new handler reporting requirement. The new handler report 
provides the Committee with information that has previously been 
available from the Federal-State Inspection Service (Inspection 
Service). As a result of suspending the handling regulations, including 
mandatory inspections, information from the Inspection Service is no 
longer available to the Committee to compile industry statistics and to 
assess handlers. The new handler reporting requirement allows the 
Committee to obtain information directly from handlers similar to the 
information that has been obtained previously from the Inspection 
Service.
    Section 924.52 of the order authorizes the issuance of regulations 
for grade, size, quality, maturity, and pack for fresh prunes grown in 
the production area. Section 924.53 authorizes the modification, 
suspension, or termination of regulations issued under Sec.  924.52.
    Section 924.55 provides that whenever the handling of any variety 
of fresh prunes is regulated pursuant to Sec.  924.52 or Sec.  924.53, 
such prunes must be inspected by the Inspection Service, and certified 
as meeting the applicable requirements. The cost of the inspection and 
certification is borne by handlers.
    Section 924.60 authorizes the Committee, with the approval of USDA, 
to require reports and other information from handlers that are 
necessary for the Committee to perform its duties.
    Minimum grade, size, quality, maturity, and inspection requirements 
for fresh prunes regulated under the order are specified in Sec.  
924.319 (the section suspended by this rule). When effective, Sec.  
924.319, with exemptions for certain varieties and types of shipments, 
provides that all fresh prunes grade at least U.S. No. 1, except that 
at least two-thirds of the surface of the prune is required to be 
purplish in color, and such prunes measure not less than 1\1/4\ inches 
in diameter as measured by a rigid ring. The regulation includes a 
minimum quantity exemption, as well as specific tolerances for prunes 
that fail to meet color, minimum diameter, and quality requirements.
    Regulation regarding the importation of fresh prunes into the 
United States under Section 8e of the Act is set forth in Sec.  
944.700.
    The Committee meets regularly to consider recommendations for 
modification, suspension, or termination of the regulatory requirements 
for Washington-Oregon fresh prunes which have been issued on a 
continuing basis. Committee meetings are open to the public and 
interested persons may express their views at these meetings. The USDA 
reviews Committee recommendations, information submitted by the 
Committee, and other available information, and determines whether 
modification, suspension, or termination of the regulatory requirements 
would tend to effectuate the declared policy of the Act.
    At its February 16, 2006, meeting, the Committee unanimously 
recommended suspending the handling regulations and establishing a new 
handler reporting requirement for the 2006 and future seasons.
    The objective of handling regulation has been to ensure that only 
acceptable quality fresh prunes enter fresh market channels, thereby 
ensuring consumer satisfaction, increasing sales, and improving returns 
to producers. While the industry continues to believe that quality is 
an important factor in maintaining sales, the Committee believes the 
cost of inspection and certification (mandated when the handling 
regulations are in effect) currently exceeds the benefits derived.
    Fresh prune prices have been at low levels in recent seasons, and 
many producers have faced difficulty covering their production costs. 
Consequently, the Committee has, for a number of years, explored the 
possibility of reducing the industry's costs through the elimination of 
mandatory inspections and the accompanying fees. The Committee is 
concerned, however, that the elimination of current handling and 
inspection requirements could possibly result in lower quality fresh 
prunes being shipped to fresh markets, thereby affecting consumer 
demand. Also, there is some concern that, should overall quality 
decline, the Washington-Oregon fresh prune industry could lose sales to 
other prune producing regions.
    After much consideration, the Committee recommended the suspension 
of the handling regulations for the 2006 and future seasons, but 
stipulated that the Committee would assess marketing conditions 
annually to determine if lifting the suspension is warranted. The 
suspension enables the industry to realize needed cost savings while 
the impact of the suspension is evaluated, on an ongoing basis, by the 
Committee. Should the market situation so dictate, the Committee may 
take appropriate action to recommend reinstating regulation.
    This final rule enables Washington-Oregon fresh prune handlers to 
continue to ship prunes without regard to minimum grade, size, quality, 
maturity, and inspection requirements. This allows handlers to decrease 
their total costs by eliminating the expenses associated with mandatory 
inspection. This rule does not restrict handlers from seeking product 
inspection on a voluntary basis if they find inspection desirable. The 
Committee will evaluate the effect the suspension of the handling 
regulations has on market conditions and on producer returns each year 
the suspension is in effect, and, if necessary, make recommendations to 
USDA for changes.
    The suspension of the handling regulation and mandatory inspections 
also results in the elimination of the inspection certificates that 
have been generated by the Inspection Service and forwarded to the 
Committee. The Committee used these certificates as the basis for 
assessment billing from handlers and for compiling prune industry 
statistics. In the absence of the inspection certificates, handlers are 
now required to submit reports directly to the Committee to facilitate 
the collection of assessments and the compilation of industry 
statistics.
    Therefore, a new Sec.  924.160 Reports has now been added which 
requires each handler to submit to the Committee, on or before October 
30 of each year, a ``Handler Statement for Washington-Oregon Fresh 
Prunes'' containing the following information: (a) The handler's name 
and address; (b) the name and address of each producer; (c) the 
quantity, in field run tons, of early and late fresh prunes handled by 
each handler; (d) the assessment due and enclosed; (e) the name, 
telephone number, and signature of the authorized person completing the 
form; and (f) the date the form is signed.
    Authorization to assess handlers enables the Committee to incur 
expenses that are reasonable and necessary to administer the program. 
The new reporting requirement facilitates the Committee's ability to 
collect assessments needed to cover necessary program costs. Even 
though reporting requirements are increased, this final rule, through 
the elimination of inspection and certification requirements, is 
expected to reduce overall industry expenses.
    Consistent with the suspension of Sec.  924.319, this final rule 
also suspends Sec.  924.110 of the rules and regulations in effect 
under the order. Section 924.110 contains provisions for handlers to

[[Page 60809]]

apply for waivers from mandatory inspection when such inspection is not 
readily available from the Inspection Service. With the suspension of 
regulation, such waivers are no longer necessary.
    Contained within the handling regulations (Sec.  924.319(b)) is a 
provision allowing the handling of any individual shipment which, in 
the aggregate, does not exceed 500 pounds net weight of Stanley or 
Merton variety prunes, or 350 pounds net weight of any other variety of 
prunes, without regard to the inspection and assessment requirements 
issued under the order. Regardless of the suspension of handling 
regulations, the Committee desires that this provision remain effective 
for the purpose of providing a minimum quantity exemption from 
assessments. Thus, a new Sec.  924.121 Minimum quantity exemption is 
established. This section essentially continues the provision with the 
same minimum quantity exemption threshold as in 924.319(b), but in 
regards to the assessment requirements contained in Sec.  924.41 only.
    Section 8e of the Act requires that whenever grade, size, quality, 
or maturity requirements are in effect for certain commodities under a 
domestic marketing order, including fresh prunes, imports of that 
commodity must meet the same or comparable requirements. Section 
944.700 contains the regulations for fresh prune imports. Since this 
final rule indefinitely suspends the handling regulation for domestic 
fresh prunes, including grade, size, quality, and maturity 
requirements, the regulation of imported fresh prunes is suspended 
indefinitely as well.

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. 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 the 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.
    Currently, there are 7 handlers of Washington-Oregon fresh prunes 
who are subject to regulation under the order and approximately 100 
fresh prune 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 $6,500,000, and small 
agricultural producers are defined as those having annual receipts of 
less than $750,000.
    Fresh prune production has been approximately 5,000 to 7,000 tons 
per year for the past several years. The Committee estimates that all 
Washington-Oregon fresh prune handlers combined ship less than 
$6,500,000 worth of prunes on an annual basis. In addition, based on 
acreage, production, and producer prices reported by the National 
Agricultural Statistics Service, and the total number of Washington-
Oregon fresh prune producers, average annual producer receipts are 
approximately $13,000, which is considerably less than the $750,000 
threshold. In view of the foregoing, it can be concluded that all of 
the handlers and producers of Washington-Oregon fresh prunes may be 
classified as small entities.
    This final rule continues in effect the suspension of the handling 
regulations specified in Sec.  924.319, as well as the fresh prune 
import regulations specified in Sec.  944.700. Furthermore, this rule 
continues in effect the modified minimum quantity exemption as a new 
Sec.  924.121 and the addition a new reporting requirement as Sec.  
924.160. The suspension of the handling regulation will allow the 
Washington-Oregon fresh prune industry to market fresh prunes without 
regard to minimum grade, size, quality, maturity, and inspection 
requirements. Authority for this action is provided in Sec. Sec.  
924.53 and 924.60.
    The handling regulations help ensure that only acceptable quality 
fresh prunes enter fresh market channels, thereby ensuring consumer 
satisfaction, increasing sales, and improving returns to producers. 
While the industry continues to believe that quality is an important 
factor in maintaining sales, the Committee believes the cost of 
inspection and certification exceeds the benefits derived. The 
Committee believes that the demands of wholesale buyers and consumers 
will drive handlers and producers to maintain a high level of product 
quality without the necessity of minimum quality standards and 
mandatory inspections. The Committee will review the suspension of the 
handling regulations and all relevant related issues on an annual 
basis. The handling regulations can be reinstated by way of Committee 
recommendation and USDA approval through the informal rulemaking 
process.
    Fresh prune prices have been at low levels in recent years, and 
many producers have faced difficulty covering their production costs. 
In response to the adverse economic conditions being experienced by the 
industry, the Committee discussed the possibility of reducing costs 
through the elimination of mandatory inspection and the related fees. 
The Committee is concerned, however, that the elimination of current 
handling and inspection requirements could possibly result in lower 
quality fresh prunes being shipped to fresh markets. Also, should fruit 
quality decline, there is some concern among Committee members that the 
Washington-Oregon fresh prune industry could lose sales to other prune 
producing regions.
    While acknowledging these concerns, the Committee believes that the 
benefits derived from suspending the regulations outweigh the potential 
costs. The Committee also believes that the current marketing situation 
makes regulation unnecessary, that the cost of regulation outweighs the 
benefits, and that the conditions leading to the suspension will 
perpetuate well into the future. Therefore, the Committee recommended 
that the suspension of the handling regulations be effective not only 
for the upcoming season, but for future seasons as well. The indefinite 
suspension will alleviate the need for annual rulemaking to maintain 
the suspension while allowing the Committee to monitor the impacts of 
the suspension and consider appropriate actions for ensuing seasons. If 
and when the industry experiences changes in the marketing environment 
that would make reinstating the handling regulations necessary, the 
Committee has the ability to quickly respond.
    This final rule enables handlers to ship prunes without regard to 
the minimum grade, size, quality, maturity, and inspection requirements 
of the order for the 2006 and future seasons. This allows handlers to 
decrease costs by eliminating the costs associated with mandatory 
inspection but does not, however, restrict handlers from seeking 
inspection on a voluntary basis if they find inspection desirable. The 
Committee will evaluate the effect that suspension of the handling 
regulations has on marketing conditions and on producer returns at 
their annual meeting each spring.
    The suspension of the handling regulations results in the 
elimination of mandatory inspections and, in turn, the inspection 
certificates that are generated by the Inspection Service and 
subsequently provided to the Committee. The Committee has in the

[[Page 60810]]

past used such certificates for assessment billing purposes and for 
compiling industry statistics. As a result of the suspension of the 
handling regulations, the Committee will require a report directly from 
each handler for the purpose of obtaining information on which to 
collect assessments and generate statistical information.
    The Committee anticipates that this rule will not negatively impact 
small handlers and producers because it suspends minimum grade, size, 
quality, maturity, and inspection requirements. The total cost of 
inspection and certification for fresh shipments of Washington-Oregon 
fresh prunes during the 2005 marketing season is estimated by the 
Committee to have been $0.23 per hundredweight, or approximately 
$27,000 total. This represents approximately $4,000 per handler. Since 
handlers may continue to have their prunes voluntarily inspected, the 
Committee expects that some handlers will continue to have at least a 
portion of their fresh prunes inspected and certified by the Inspection 
Service.
    Alternatives to the suspension of the handling regulations 
considered by the Committee included maintaining the status quo, 
suspending the regulations for one season only, and terminating the 
marketing order in its entirety. The Committee believes, however, that 
the continuation of regulation would be a financial burden on the 
industry, given the current market situation and outlook. With that 
perspective, continuing to regulate was not a viable option to the 
Committee. The Committee also discussed suspending regulation one 
season at a time, but rejected that option as well. Finally, the 
Committee considered terminating the order in its entirety, but 
declined to take that action because the Committee continues to believe 
that the order has purpose, even without handling regulation.
    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, as 
noted in the initial regulatory flexibility analysis, USDA has not 
identified any relevant Federal rules that duplicate, overlap, or 
conflict with this rule.
    Further, the Committee's meeting was widely publicized throughout 
the Washington-Oregon fresh prune industry and all interested persons 
were invited to attend the meeting and participate in Committee 
deliberations. Like all Committee meetings, the February 16, 2006, 
meeting was a public meeting and all entities, both large and small, 
were able to express their views on this issue.
    An interim final rule concerning this action was published in the 
Federal Register on May 9, 2006 (71 FR 26817). Copies of the rule were 
mailed by the Committee's staff to all Committee members and fresh 
prune handlers. In addition, the rule was made available through the 
Internet by the Office of the Federal Register and the USDA. A 60-day 
comment period ending July 10, 2006, was provided to allow interested 
persons to respond to the interim final rule. Two comments were 
received during the comment period. However, as neither comment 
addressed the substance of this rule, they will not be considered in 
this document.
    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.
    As mentioned previously, this action requires an additional 
collection of information. The information collection requirements are 
discussed in the following section.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501 et seq.), the information collection requirements that are 
contained in this rule were approved by the Office of Management and 
Budget (OMB), under OMB No. 0581-0237. The information collection has 
been merged into OMB No. 0581-0189, Generic OMB Fruit Crops, which 
expires September 30, 2007.
    In summary, the additional reporting requirements will enable the 
Committee to collect information from fresh prune handlers regarding 
the total quantity of early and late fresh prunes handled during the 
season, which was previously obtained from the inspection certificates 
issued by the Inspection Service. However, this source will no longer 
be available under the suspension of the handling regulations. The 
Committee will use used by the Committee to compile information that is 
essential for the collection of handler assessments, to provide 
production statistics to the industry, and to help ensure compliance 
with the order's provisions. In addition, the form will assist the 
Committee and USDA with oversight and planning.

E-Government Act Compliance

    The Agricultural Marketing Service (AMS) is committed to complying 
with the E-Government Act, to promote the use of the Internet and other 
information technologies to provide increased opportunities for citizen 
access to Government information and services, and for other purposes.
    After consideration of all relevant material presented, including 
the Committee's recommendation, and other information, it is found that 
finalizing the interim final rule, without change, as published in the 
Federal Register (71 FR 26817, May 9, 2006) will tend to effectuate the 
declared policy of the Act.
    The U.S. Trade Representative has reviewed this final rule and 
concurs with its issuance.

List of Subjects in 7 CFR Parts 924 and 944

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

PART 924--FRESH PRUNES GROWN IN DESIGNATED COUNTIES IN WASHINGTON 
AND IN UMATILLA COUNTY, OREGON

PART 944--FRUITS; IMPORT REGULATIONS

0
Accordingly, the interim final rule amending 7 CFR parts 924 and 944 
which was published at 71 FR 26817 on May 9, 2006, is adopted as a 
final rule without change.

    Dated: October 10, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
 [FR Doc. E6-17192 Filed 10-16-06; 8:45 am]
BILLING CODE 3410-02-P