[Federal Register Volume 73, Number 143 (Thursday, July 24, 2008)]
[Rules and Regulations]
[Pages 43056-43058]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 08-1465]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 981

[Docket No. AMS-FV-08-0044; FV08-981-1 IFR]


Almonds Grown in California; Relaxation of Incoming Quality 
Control Requirements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule relaxes the incoming quality control requirements 
prescribed under the California almond marketing order (order). The 
order regulates the handling of almonds grown in California and is 
administered locally by the Almond Board of California (Board). This 
rule changes the date by which almond handlers must satisfy their 
inedible disposition obligation from August 31 to September 30 of each 
year. This will provide handlers more flexibility in their operations 
in light of larger almond crops.

[[Page 43057]]


DATES: Effective July 25, 2008; comments received by September 22, 2008 
will be considered prior to issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. 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; 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.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Terry Vawter, Senior Marketing 
Specialist, or Kurt J. Kimmel, Regional Manager, California Marketing 
Field Office, Marketing Order Administration Branch, Fruit and 
Vegetable Programs, AMS, USDA; Telephone: (559) 487-5901, Fax: (559) 
487-5906, 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 Order 
No. 981, as amended (7 CFR part 981), regulating the handling of 
almonds 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.''
    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. 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 relaxes the incoming quality control requirements 
prescribed under the order. This rule changes the date by which almond 
handlers must satisfy their inedible disposition obligation from August 
31 to September 30 of each year. This will provide handlers more 
flexibility in their operations in light of larger almond crops.
    Section 981.42 of the order provides authority for a quality 
control program. Paragraph (a) of this section requires handlers to 
obtain incoming inspections on almonds received from growers to 
determine the percent of inedible kernels in each lot of any variety. 
Inedible kernels are poor quality kernels or pieces of kernels as 
defined in Sec.  981.408. A handler's inedible disposition obligation 
is based on the percentage of inedible kernels in lots received by such 
handler during a crop year, as determined by the Federal-State 
inspection service. Handlers must satisfy their obligation by disposing 
of inedible kernels and other almond material in Board-accepted, non-
human consumption outlets like oil and animal feed. Section 981.42(a) 
also provides authority for the Board, with approval of the Secretary, 
to establish rules and regulations necessary to administer this 
program.
    Section 981.442(a)(5) of the order's administrative rules and 
regulations currently specifies that handlers must satisfy their 
inedible disposition obligation no later than August 31 succeeding the 
crop year in which the obligation was incurred. The crop year runs from 
August 1 through July 31.
    Since the mid-1990s, almond crops have doubled in size and are now 
over 1 billion pounds annually. Larger crops have resulted in larger 
quantities of inedible kernels. Between the 1993-94 and 1997-98 crop 
years, almond production averaged about 570 million pounds and inedible 
disposition obligations averaged about 7 million pounds annually. 
Between the 2003-04 and 2007-08 crop years, production averaged about 1 
billion pounds and inedible disposition obligations averaged about 10 
million pounds annually.
    Many handlers now operate year-round and dispose of their inedible 
kernels at one time after the end of the crop year. With larger crops, 
it has become difficult for handlers to meet the August 31 inedible-
disposition deadline because of the larger volume of inedible kernels 
that must be disposed of under the program. Thus, the Board recommended 
extending the deadline from August 31 to September 30, giving handlers 
an additional month to meet their prior year's obligation. This will 
provide handlers more flexibility in their operations in light of 
larger almond crops. Section 981.442(a)(5) is revised accordingly.
    This rule also removes obsolete language in Sec.  981.442(a)(5). 
That section was modified in 2006 to specify that at least 50 percent 
(increased from 25 percent) of a handler's crop year inedible 
disposition obligation must be satisfied with dispositions consisting 
of inedible kernels. The 50 percent requirement does not apply to 
handlers with total inedible obligations of less than 1,000 pounds. 
However, that section still contains the sentence referencing the 25 
percent requirement. This rule removes that sentence and revises Sec.  
981.442(a)(5) accordingly.

Initial 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 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.
    There are approximately 6,200 producers of almonds in the 
production area and approximately 100 handlers subject to regulation 
under the marketing order. Small agricultural producers are defined by 
the Small Business Administration (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.

[[Page 43058]]

    Data for the most recently-completed crop year indicate that about 
50 percent of the handlers shipped under $6,500,000 worth of almonds. 
Dividing average almond crop value for 2006-07 reported by the National 
Agricultural Statistics Service of $2.258 billion by the number of 
producers (6,200) yields an average annual producer revenue estimate of 
about $364,190. Based on the foregoing, about half of the handlers and 
a majority of almond producers may be classified as small entities.
    This rule revises and relaxes Sec.  981.442(a)(5) of the order's 
administrative rules and regulations, whereby handlers will be 
permitted to satisfy their inedible disposition obligation no later 
than September 30 of each year for obligations incurred in the previous 
crop year, rather than the current deadline of August 31 of each year. 
This rule also removes an obsolete sentence in that section that 
references handler dispositions containing 25 percent inedible kernels. 
Authority for this action is provided in Sec.  981.42(a) of the order.
    Regarding the impact of this action on affected entities, extending 
the disposition deadline will provide handlers with additional 
flexibility in light of larger almond crops. Handlers who operate year 
round and dispose of their inedible kernels at one time after the end 
of the crop year will have an additional month to satisfy their prior 
year's inedible obligation.
    The Board considered alternatives to this action. The Board's Food 
Quality and Safety Committee (committee) met in September and November 
2007 and discussed the difficulties that handlers were experiencing 
with meeting the August 31 disposition deadline. The committee 
recommended revising the regulation to allow July dispositions to be 
counted towards either the current year or the following year's 
obligation. However, the intent of the inedible program is to ensure 
that poor quality almonds from the current crop year are removed from 
the market. Thus, allowing July dispositions to count towards the 
following year's obligation would not meet the intent of the program.
    The committee deliberated on this issue again in April 2008. The 
committee considered the option of extending the August 31 deadline to 
September 30. The Board concurred with this option at its meeting on 
April 2, 2008, and referred the issue back to the committee for full 
discussion. The committee met again on April 22, 2008, to discuss the 
potential change. Ultimately, the committee recommended this option to 
the Board, and the Board unanimously recommended this change at its May 
2008 meeting.
    This rule will not impose any additional reporting or recordkeeping 
requirements on either small or large almond 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.
    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 committee and Board meetings where this issue was 
discussed were widely publicized throughout the almond industry and all 
interested persons were invited to attend the meetings and encouraged 
to participate in Board deliberations. Like all committee and Board 
meetings, the meetings held in September and November 2007, and in 
April and May 2008 were all 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 comments on this 
interim final rule, including 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/AMSv1.0/ams.fetchTemplateData.do?template=TemplateN&page=MarketingOrdersSmallBusinessGuide. 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 relaxing the quality control 
requirements currently prescribed under the California almond marketing 
order. This rule extends the date by which handlers must satisfy their 
inedible disposition obligation from August 31 to September 30 of each 
year. Any comments received will be considered prior to finalization of 
this rule.
    After consideration of all relevant material presented, including 
the Board's recommendation, and other information, it is found that 
this interim final rule, as hereinafter set forth, will tend to 
effectuate the declared policy of the Act.
    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 in place as soon as possible so that 
handlers can act accordingly; (2) the Board unanimously recommended 
this change at a public meeting, and interested parties had an 
opportunity to provide input; (3) this rule relaxes the current rules 
and regulations; and (4) this rule provides a 60-day comment period and 
any comments received will be considered prior to finalization of this 
rule.

List of Subjects in 7 CFR Part 981

    Almonds, Marketing agreements, Nuts, Reporting and recordkeeping 
requirements.

0
For the reasons set forth in the preamble, 7 CFR part 981 is amended as 
follows:

PART 981--ALMONDS GROWN IN CALIFORNIA

0
1. The authority citation for 7 CFR part 981 continues to read as 
follows:

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


0
2. In Sec.  981.442, paragraph (a)(5) the words ``At least 25 percent 
of a handler's total crop year inedible disposition obligation shall be 
satisfied with dispositions consisting of inedible kernels as defined 
in Sec.  981.408: Provided, That this 25 percent requirement shall not 
apply to handlers with total annual obligations of less than 1,000 
pounds.'' are removed and the last sentence is revised to read as 
follows:


Sec.  981.442  Quality control.

    (a) * * *
    (5) * * * Each handler's disposition obligation shall be satisfied 
when the almond meat content of the material delivered to accepted 
users equals the disposition obligation, but no later than September 30 
succeeding the crop year in which the obligation was incurred.
* * * * *

    Dated: July 22, 2008.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 08-1465 Filed 7-22-08; 12:26 pm]
BILLING CODE 3410-02-P