[Federal Register Volume 72, Number 50 (Thursday, March 15, 2007)]
[Rules and Regulations]
[Pages 12038-12040]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-4662]


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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 FIR]


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: Final rule.

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SUMMARY: The Department of Agriculture (USDA) is adopting, as a final 
rule, without change, an interim final rule temporarily suspending 
order provisions that require continuance referenda to be conducted for 
the nectarine and peach marketing orders during winter 2006-07. This 
rule enables 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 current 
committee nomination period, which overlaps with the scheduled 
referenda period.

DATES: Effective Date: April 16, 2007.

FOR FURTHER INFORMATION CONTACT: Laurel May, 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]; 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]. The rule can be viewed at http://www.regulations.gov.
    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, both as amended (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 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 date of the 
entry of the ruling.
    This rule continues in effect the action that 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 current 
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

[[Page 12039]]

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 were 
implemented on 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 were 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 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 were 
implemented on 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 were 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.

Final 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 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 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 
California nectarine and peach 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

[[Page 12040]]

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 continues in effect the action that 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.
    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 required 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.
    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.
    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.
    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.
    An interim final rule concerning this action was published in the 
Federal Register on December 28, 2006. The committees posted the rule 
on their Web site. In addition, the rule was made available through the 
Internet by USDA and the Office of the Federal Register. That rule 
provided for a 30-day comment period which ended January 29, 2007. One 
comment supporting the proposal was received. The commenter cited more 
time to evaluate the effects of recent amendments to the order and 
reduced confusion for committee nominations as justification for 
temporarily suspending the provisions for continuance referenda.
    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 committees' recommendations, and other information, it is found 
that the order provisions suspended by this action no longer tend to 
effectuate the declared policy of the Act for the 2006-07 period. 
Accordingly, we are finalizing the interim final rule, without change, 
as published in the Federal Register (71 FR 78042, December 28, 2006).

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.

PART 916--NECTARINES GROWN IN CALIFORNIA

PART 917--FRESH PEARS AND PEACHES GROWN IN CALIFORNIA

0
Accordingly, the interim final rule amending 7 CFR parts 916 and 917, 
which was published at 71 FR 78042 on September 28, 2006, is adopted as 
a final rule without change.

    Dated: March 9, 2007.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
 [FR Doc. E7-4662 Filed 3-14-07; 8:45 am]
BILLING CODE 3410-02-P