[Federal Register Volume 71, Number 249 (Thursday, December 28, 2006)]
[Rules and Regulations]
[Pages 78042-78044]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-22236]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 916 and 917

[Docket No. AMS-FV-06-0190; FV07-916/917-2 IFR]


Nectarines and Peaches Grown in California; Temporary Suspension 
of Provisions Regarding Continuance Referenda Under the Nectarine and 
Peach Marketing Orders

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule temporarily suspends order provisions that require 
continuance referenda to be conducted for the nectarine and peach 
marketing orders during winter 2006-07. The suspensions will enable the 
Department of Agriculture (USDA) to postpone conducting the continuance 
referenda until the industry has had sufficient time to evaluate the 
effects of recent amendments to the marketing orders. Temporary 
suspension of the continuance referenda should also minimize confusion 
during the upcoming committee nomination period, which overlaps with 
the scheduled referenda period.

DATES: Effective December 29, 2006; comments must be received by 
January 29, 2007.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this action. 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, E-mail: [email protected], or 
Internet: http://www.regulations.gov. 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: Laurel May, Marketing Order 
Administration Branch, F&V, AMS, USDA, 1400 Independence Avenue, SW., 
STOP 0237, Washington, DC 20250-0237; Telephone: (202) 205-2830, Fax: 
(202) 720-8938, or E-mail: [email protected]; or Kurt Kimmel, 
Regional Manager, 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 E-mail: [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 Order 
Nos. 916 and 917 (7 CFR parts 916 and 917) regulating the handling of 
nectarines and peaches grown in California, respectively, hereinafter 
referred to as the ``orders.'' The orders are 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 suspends the requirement that continuance 
referenda be conducted during 2006-07. 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 date of the 
entry of the ruling.
    This action temporarily suspends the provisions in Sec. Sec.  
916.64(e) and 917.61(e) of the orders, which specify when continuance 
referenda should be conducted to determine whether growers favor 
continuance of the orders. Temporary suspension of the provisions for 
continuance referenda will provide growers with more time to evaluate 
the effects of recent amendments to the orders before voting on 
continuance of the marketing programs. Suspension of the referenda 
requirements will also diminish the confusion likely to occur if the 
referenda are held during upcoming committee nominations. These actions 
were unanimously recommended by the Nectarine Administrative Committee 
(NAC) and the Peach Commodity Committee (PCC) (committees) at their 
August 31, 2006, meetings.

Nectarines

    Section 916.64(e) of the nectarine marking order currently provides 
that USDA shall conduct a continuance referendum between December 1 and 
February 15 of every fourth fiscal period since winter 1974-75 to 
ascertain whether continuance of the order is favored by nectarine 
growers. A continuance referendum is, therefore, scheduled to be 
conducted between December 1, 2006, and February 15, 2007. 
Authorization to suspend the continuance referendum requirement is 
provided in Sec.  916.64(b).
    The NAC recommended that the provision requiring the winter 2006-07 
continuance referendum be temporarily suspended to allow the industry 
time to fully realize the impact of recent amendments to the marketing 
order. Amendments to the order were approved by nectarine growers in a 
referendum held in March 2006. The majority of the amendments will not 
be implemented until January 1, 2007. The continuance referendum cycle 
will resume as provided in Sec.  916.64(e) in the period between 
December 1, 2010, and February 15, 2011. A referendum can be held in 
the interim if deemed appropriate by USDA.
    Among the recent amendments to the order are revisions to the NAC's 
nomination procedures, which require a transition to mail balloting. 
Ballots for the 2007-09 term of office must be mailed to growers in 
January 2007. The NAC believes that receiving both the nomination 
ballots and the continuance referenda ballots during this transitional 
period would confuse growers, who would then be less likely to return 
any of the ballots. The committees expect

[[Page 78043]]

that temporary suspension of the continuance referendum will minimize 
confusion and maximize grower participation in both the committee 
nominations and the continuance referendum. After this initial 
transitional period, biennial committee nominations should take place 
earlier in the year and are not expected to overlap with scheduled 
continuance referendum periods.

Peaches

    Section 917.61(e) of the peach marketing order currently provides 
that USDA shall conduct a continuance referendum between December 1 and 
February 15 of every fourth fiscal period since winter 1974-75 to 
ascertain whether continuance of the order is favored by peach growers. 
A continuance referendum is, therefore, scheduled to be conducted 
between December 1, 2006 and February 15, 2007. Authorization to 
suspend the continuance referendum requirement is provided in Sec.  
917.61(b).
    The PCC recommended that the provision requiring the winter 2006-07 
continuance referendum be temporarily suspended to allow the industry 
time to fully realize the impact of recent amendments to the marketing 
order. Amendments to the order were approved by peach growers in a 
referendum held in March 2006. The majority of the amendments will not 
be implemented until January 1, 2007. The continuance referendum cycle 
will resume as provided in Sec.  917.61(e) in the period between 
December 1, 2010, and February 15, 2011. A referendum can be held in 
the interim if deemed appropriate by USDA.
    Section 917.61(e) also requires that USDA conduct continuance 
referenda regarding the provisions of Part 917 pertaining to pears. 
Although the provisions pertaining to pears are currently suspended, 
the pear referenda are conducted concurrently with the peach and 
nectarine continuance referenda. In order to stay synchronized with the 
peach and nectarine referenda, the pear referendum will not be held 
during the period between December 1, 2006, and February 15, 2007. The 
pear continuance referendum cycle will resume as provided in Sec.  
917.61(e) in the period between December 1, 2010, and February 15, 
2011. A referendum can be held in the interim if deemed appropriate by 
USDA.
    Among the recent amendments to the order are revisions to the PCC's 
nomination procedures, which require a transition to mail balloting. 
Ballots for the 2007-09 term of office must be mailed to growers in 
January 2007. The PCC believes that receiving both the nomination 
ballots and the continuance referenda ballots during this transitional 
period would confuse growers, who would then be less likely to return 
any of the ballots. The committees expect that temporary suspension of 
the continuance referendum will minimize confusion and maximize grower 
participation in both the committee nominations and the continuance 
referendum. After this initial transitional period, biennial committee 
nominations should take place earlier in the year and are not expected 
to overlap with scheduled continuance referendum periods.

Initial Regulatory Flexibility Act

    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 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 150 handlers of nectarines and peaches who 
are subject to regulation under the order and approximately 800 growers 
of these fruits in the regulated area. Small agricultural service 
firms, which include handlers, have been defined by the Small Business 
Administration (13 CFR 121.201) as those having annual receipts of less 
than $6,500,000, and small agricultural growers are defined as those 
having annual receipts of less than $750,000. The majority of these 
handlers and growers may be classified as small entities.
    The committees' staff has estimated that there are fewer than 26 
handlers in the industry who could be defined as other than small 
entities. For the 2005 season, the committees' staff estimated that the 
average handler price received was $10.00 per container or container 
equivalent of nectarines or peaches. A handler would have to ship at 
least 600,000 containers to have annual receipts of $6,000,000. Given 
data on shipments maintained by the committees' staff and the average 
handler price received during the 2005 season, the committees' staff 
estimates that small handlers represent approximately 86 percent of all 
the handlers within the industry.
    The committees' staff has also estimated that fewer than 10 percent 
of the growers in the industry could be defined as other than small 
entities. For the 2005 season, the committees' staff estimated the 
average grower price received was $5.25 per container or container 
equivalent for nectarines and peaches. A grower would have to produce 
at least 142,858 containers of nectarines and peaches to have annual 
receipts of $750,000. Given data maintained by the committees' staff 
and the average grower price received during the 2005 season, the 
committees' staff estimates that small growers represent more than 90 
percent of the producers within the industry.
    With an average grower price of $5.25 per container or container 
equivalent, and a combined packout of nectarines and peaches of 
approximately 38,776,500 containers, the value of the 2005 packout is 
estimated to be $203,576,600. Dividing this total estimated grower 
revenue figure by the estimated number of growers (800) yields an 
estimated average revenue per grower of about $254,471 from the sales 
of peaches and nectarines.
    This rule temporarily suspends the provisions in Sec. Sec.  
916.64(e) and 917.61(e), which specify the time period in which 
continuance referenda should be conducted to determine if growers favor 
continuance of the nectarine and peach marketing orders, respectively. 
Pursuant to these provisions, the next continuance referenda are 
scheduled for the period between December 1, 2006, and February 15, 
2007. Authorization to suspend these provisions is provided in 
Sec. Sec.  916.64(b) and 917.61(b) of the orders.
    The committees recommended suspension of these provisions to allow 
the industry time to evaluate the effects of recent amendments to the 
marketing orders before voting on continuation of the programs. For 
instance, several of the amendments were intended to increase industry 
participation in program activities. Others were intended to modernize 
the marketing orders' operations to better reflect current industry 
business practices. Postponing the referenda will give the industry 
time to operate under the amended orders and determine whether the 
intended goals were met before the next continuance referenda. The 
continuance referenda cycles as provided in Sec. Sec.  916.64(e) and 
917.61(e) will resume in the period between December 1, 2010, and 
February 15, 2011. Referenda can be held in the interim if deemed 
appropriate by USDA.

[[Page 78044]]

    This action is also expected to decrease the confusion likely to 
occur if the continuance referenda scheduled for the period between 
December 1, 2006, and February 15, 2007, are held as scheduled. 
Implementation of the order amendments requires a transition to mail 
balloting for NAC and PCC nominations in January 2007, which would 
overlap with the scheduled continuance referenda. Growers could each 
receive as many as four ballots during the overlapping nominations and 
referenda periods if they produce both nectarines and peaches. The 
committees are concerned that the flood of ballots could confuse 
growers and discourage them from participating fully. Therefore, the 
committees recommended that the continuance referenda be postponed. 
After this initial transitional period the biennial committee 
nominations should take place earlier in the year and are not expected 
to overlap with scheduled continuance referenda periods.
    One alternative to this action would be to conduct the referenda as 
scheduled. However, the committees believe that growers need additional 
time to evaluate the effectiveness of the amendments that were adopted 
before voting on continuation of the marketing programs. Postponing the 
continuance referenda until a later time is expected to provide a 
better assessment of industry support for the orders. Further, if the 
continuance referenda were not postponed the referenda period would 
overlap with the committee nominations period. Voter confusion would 
likely occur due to the receipt of multiple ballots during that time. 
The committees were concerned that the confusion would lead to 
decreased grower participation in both the referenda and the committee 
nominations. Therefore, USDA has determined that the provisions 
requiring that continuance referenda be conducted during the period 
between December 1, 2006, and February 15, 2007, should be temporarily 
suspended.
    This rule will not impose any additional reporting or recordkeeping 
requirements on either small or large nectarine or peach 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.
    The 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.
    In addition, USDA has not identified any relevant Federal rules 
that duplicate, overlap, or conflict with this rule.
    Further, the committees' meetings were widely publicized throughout 
the nectarine and peach industry and all interested persons were 
invited to attend the meetings and participate in committee 
deliberations. Like all committee meetings, the August 31, 2006, 
meetings were public meetings and all entities, both large and small, 
were able to express their views on this issue.
    Finally, 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.
    This rule invites comments on the temporary suspension of 
provisions regarding the continuance referenda under the California 
nectarine and peach marketing orders. Any comments received will be 
considered prior to finalization of this rule.
    After consideration of all relevant material presented, including 
the committees' recommendations, and other information, it is found 
that the order provisions suspended by this interim final rule, as 
hereinafter set forth, do not tend to effectuate the declared policy of 
the Act for the 2006-07 period.
    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 since 
the nectarine and peach marketing order continuance referenda periods 
are scheduled to commence December 1, 2006; (2) the rule relaxes 
referenda requirements for the nectarine and peach industries; (3) the 
committees discussed this issue at public meetings and interested 
parties had opportunities to provide input at those meetings; and (4) 
the rule provides a 30-day comment period and any comments received 
will be considered period to finalization of this rule.

List of Subjects

7 CFR Part 916

    Marketing agreements, Nectarines, Reporting and recordkeeping 
requirements.

7 CFR Part 917

    Marketing agreements, Peaches, Pears, Reporting and recordkeeping 
requirements.

0
For the reasons set forth in the preamble, 7 CFR Parts 916 and 917 are 
amended as follows:
0
1. The authority citation for 7 CFR parts 916 and 917 continues to read 
as follows:

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

PART 916--NECTARINES GROWN IN CALIFORNIA


Sec.  916.64  [Amended]

0
2. In paragraph (e) of Sec.  916.64 Termination, the sentence ``The 
Secretary shall conduct such referendum within the same period of every 
fourth fiscal period thereafter.'' is temporarily suspended December 1, 
2006, through February 15, 2007.

PART 917--FRESH PEARS AND PEACHES GROWN IN CALIFORNIA


Sec.  917.61  [Amended]

0
3. In paragraph (e) of Sec.  917.61 Termination, the sentence ``The 
Secretary shall conduct such a referendum within the same period of 
every fourth fiscal period thereafter.'' is temporarily suspended 
December 1, 2006, through February 15, 2007.

    Dated: December 21, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E6-22236 Filed 12-27-06; 8:45 am]
BILLING CODE 3410-02-P