[Federal Register Volume 71, Number 218 (Monday, November 13, 2006)]
[Rules and Regulations]
[Pages 66093-66095]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-19079]



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 Rules and Regulations
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  Federal Register / Vol. 71, No. 218 / Monday, November 13, 2006 / 
Rules and Regulations  

[[Page 66093]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 922

[Docket No. FV06-922-2 FIR]


Apricots Grown in Designated Counties in Washington; Temporary 
Relaxation of the Minimum Grade Requirement

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 relaxed the minimum 
grade requirement prescribed under the Washington apricot marketing 
order for the 2006 shipping season. The marketing order regulates the 
handling of fresh apricots grown in designated counties in the State of 
Washington, and is administered locally by the Washington Apricot 
Marketing Committee (Committee). This rule continues in effect the 
action that relaxed the fresh apricot minimum grade requirement from 
Washington No. 1 grade to Washington No. 2 grade. Taking into 
consideration pre-harvest hail damage, this change was made for the 
purpose of increasing the supply of marketable fresh apricots while 
increasing the potential for higher producer returns.

EFFECTIVE DATE: December 13, 2006.

FOR FURTHER INFORMATION CONTACT: Robert J. Curry or Gary D. Olson, 
Northwest Marketing Field Office, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, 1220 SW Third Avenue, 
Suite 385, Portland, Oregon 97204-2807; 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. 922 (7 CFR part 922) regulating the handling of 
apricots grown in designated counties in Washington, 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, 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.
    The interim final rule being adopted by this rule relaxed the 
minimum grade requirement for fresh apricots produced in Washington 
State from Washington No. 1 grade to Washington No. 2 grade. Based on 
pre-harvest hail damage, this change was made for the purpose of 
increasing the supply of marketable fresh apricots while increasing the 
potential for higher producer returns. The minimum grade requirement 
will revert to Washington No. 1 grade on April 1, 2007, for the 2007 
and future seasons.
    Section 922.52 of the order authorizes the issuance of regulations 
for grade, size, quality, maturity, pack, and container for any variety 
of apricots grown in the production area. Section 922.53 further 
authorizes the modification, suspension, or termination of regulations 
issued pursuant to Sec.  922.52. Section 922.55 provides that whenever 
apricots are regulated pursuant to Sec. Sec.  922.52 or 922.53, such 
apricots must be inspected by the Federal-State Inspection Service, and 
certified as meeting the applicable requirements of such regulations.
    Minimum grade, maturity, color, and size requirements for 
Washington apricots regulated under the order are specified in Sec.  
922.321 Apricot Regulation 21. Section 922.321 provides, in part, that 
no handler shall handle any container of apricots unless such apricots 
grade not less than Washington No. 1, except for shipments subject to 
exemption under the regulation. In addition, the section provides that 
the Moorpark variety in open containers must be generally well matured. 
That section also provides that, with the exception of exempt 
shipments, apricots must be at least reasonably uniform in color, and 
be not less than 1\5/8\ inches in diameter, except for the Blenheim, 
Blenril, and Tilton varieties which must be not less than 1\1/4\ inches 
in diameter. Individual shipments of apricots are exempt from these 
requirements if sold for home use only, do not, in the aggregate, 
exceed 500 pounds net weight, and each container is stamped or marked 
with the words ``not for resale.''
    The interim final rule being adopted by this action revised 
paragraph (a)(1) of Sec.  922.321 by temporarily changing the minimum 
grade requirement for fresh shipments of apricots from Washington No. 1 
grade to Washington No. 2 grade for the 2006 shipping season only. This 
change was based on a request from a handler representing several 
producers and recommended by the Committee in a vote of nine to one to 
facilitate the handling of fruit damaged by hail. The

[[Page 66094]]

2006 Washington apricot shipping season started in late June and ended 
in early September, with most shipments made by early August. The 
Washington No. 1 minimum grade requirement will resume April 1, 2007, 
for the 2007 season and future seasons.
    The Committee meets prior to and during each season to consider 
recommendations for modification, suspension, or termination of the 
regulatory requirements for Washington apricots 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 information submitted by, and recommendations from, the 
Committee and other available information to determine whether 
modification, suspension, or termination of the regulatory requirements 
would tend to effectuate the declared policy of the Act.
    Last spring, the Committee conveyed to USDA that widely scattered 
hail damage was reported within the Washington apricot production area 
as a result of late spring storms. The severe weather conditions 
resulted in damage to the crop making it difficult for apricots to meet 
the minimum grade requirements of Washington No. 1. The relaxation in 
the grade requirement provided for the handling of a larger portion of 
the Washington apricot crop than would have been permitted if the 
minimum grade requirement had remained at Washington No. 1. This action 
helped the industry meet consumer demand while providing for better 
producer returns.

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 rule 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.
    There are approximately 300 apricot producers within the regulated 
production area and approximately 22 regulated handlers. Small 
agricultural producers are defined by the Small Business Administration 
(SBA) (13 CFR 121.201) as those having annual receipts of less than 
$750,000, and small agricultural service firms are defined as those 
whose annual receipts are less than $6,500,000.
    For the 2005 apricot shipping season, the Washington Agricultural 
Statistics Service prepared a preliminary report showing that the total 
5,600 ton apricot utilization sold for an average of $997 per ton. 
Based on the number of producers in the production area (300), the 
average annual producer revenue from the sale of apricots in 2005 can 
thus be estimated at approximately $18,611.
    Average revenue per handler can be estimated using f.o.b. prices. 
According to USDA's Market News Service, 2005 fresh apricot f.o.b. 
prices ranged from $15.00 to $20.00 per 24-pound loose-pack container, 
and from $14.00 to $24.00 for 2-layer tray pack containers (which weigh 
an average of about 20 pounds each). Total apricot sales revenue at the 
f.o.b. shipper level can be estimated by taking the midpoints of each 
of the two ranges ($17.50 and $19.00) as representative annual average 
prices for each of the container types. The 2005 season fresh apricot 
pack-out of 4,471 tons can be assumed to be equally divided between the 
two container types, yielding an estimated quantity packed in each 
container type of 2,235.5 tons, or 4.471 million pounds. Dividing this 
quantity by the pounds per container yields the following handler sales 
revenue estimates: (a) 186,292 24-pound loose-pack containers, with an 
average price of $17.50, valued at $3,260,110 and (b) 223,550 two-layer 
tray pack containers, with an average price of $19.00, valued at 
$4,246,500. Combining the estimated handler sales revenue for the two 
container types ($7,506,610) and dividing by the number of handlers 
(22) yields an annual average fresh apricot sales revenue estimate per 
handler of $341,210. Since both the average annual producer and handler 
revenue figures are under the limits established by SBA, it is 
reasonable to assume that the majority of producers and handlers of 
Washington apricots may be classified as small entities.
    This rule adopts, as a final rule, an interim final rule that 
revised paragraph (a)(1) of Sec.  922.321 by temporarily changing the 
minimum grade requirement for fresh shipments of apricots from 
Washington No. 1 grade to Washington No. 2 grade for the 2006 season 
only. The Washington No. 1 minimum grade requirement will resume April 
1, 2007, for the 2007 season and future seasons. Section 922.52 of the 
order authorizes the issuance of regulations for grade, size, quality, 
maturity, pack, and container for any variety of apricots grown in the 
production area. Section 922.53 further authorizes the modification, 
suspension, or termination of regulations issued pursuant to Sec.  
922.52.
    The Committee believes that this action has not negatively impacted 
small businesses. The interim final rule relaxed the minimum grade 
requirement in the order's handling regulations and was intended to 
provide enhanced marketing opportunities for the Washington apricot 
industry.
    Given the emergency nature of the relaxation, the Committee's 
recommendation was made via the vote-by-mail procedures of the order. 
With ten of the twelve members responding, nine members supported the 
temporary grade change and one member opposed it. The only alternative 
to a grade relaxation offered on the ballot was to leave the minimum 
grade at Washington No. 1, which was not adopted.
    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.
    This rule will not impose any additional reporting or recordkeeping 
requirements on either small or large apricot 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. 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.
    An interim final rule regarding this action was published in the 
Federal Register on August 2, 2006. Copies of the rule were made 
available to the apricot industry by the Committee's staff, as well as 
through the Internet by USDA and the Office of the Federal Register. 
That rule provided for a 60-day comment period which ended October 2, 
2006. 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 Committee's recommendation, and other information, it is found that 
the

[[Page 66095]]

interim final rule, without change, as published in the Federal 
Register (71 FR 43643, August 2, 2006) will tend to effectuate the 
declared policy of the Act.

List of Subjects in 7 CFR Part 922

    Apricots, Marketing agreements, Reporting and recordkeeping 
requirements.

PART 922--APRICOTS GROWN IN DESIGNATED COUNTIES IN WASHINGTON

0
Accordingly, the interim final rule amending 7 CFR part 922 which was 
published at 71 FR 43643 on August 2, 2006, is adopted as a final rule 
without change.

    Dated: November 7, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
 [FR Doc. E6-19079 Filed 11-9-06; 8:45 am]
BILLING CODE 3410-02-P