[Federal Register Volume 73, Number 219 (Wednesday, November 12, 2008)]
[Rules and Regulations]
[Pages 66719-66721]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-26851]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 981

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


Almonds Grown in California; Relaxation of Incoming Quality 
Control Requirements

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 relaxing 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 continues in effect the action that 
changed the date by which almond handlers must satisfy their inedible 
disposition obligation from August 31 to September 30 of each year. 
This change provides handlers more flexibility in their operations in 
light of larger almond crops.

DATES: Effective Date: December 12, 2008.

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.''
    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 continues in effect a relaxation of the incoming quality 
control requirements prescribed under the order by changing the date by 
which almond handlers must satisfy their inedible disposition 
obligation from August 31 to September 30 of each year. This provides 
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

[[Page 66720]]

authority for the Board, with approval of the Secretary, to establish 
rules and regulations necessary to administer this program.
    Prior to publication of the interim final rule, Sec.  981.442(a)(5) 
of the order's administrative rules and regulations specified 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-1990's, 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 
provides handlers more flexibility in their operations in light of 
larger almond crops. The revision of Sec.  981.442(a)(5) continues in 
effect, accordingly.
    This rule also continues in effect the removal of 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 contained the sentence 
referencing the 25 percent requirement. This rule continues in effect 
both the removal of that sentence and the revision of Sec.  
981.442(a)(5), accordingly.

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.
    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.
    Data for the 2006-07 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 continues in effect both the revision and relaxation of 
Sec.  981.442(a)(5) of the order's administrative rules and 
regulations, whereby handlers are 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 
previous deadline of August 31 of each year. This rule also continues 
in effect the removal of an obsolete sentence in that section that 
referenced 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 provides 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 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 subsequently 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. 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.
    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.
    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.
    An interim final rule concerning this action was published in the 
Federal Register on July 24, 2008. Copies of the rule were provided to 
all Board members and almond handlers by the

[[Page 66721]]

Board's staff. In addition, the rule was made available through the 
Internet by USDA and the Office of the Federal Register. That rule 
provided for a 60-day comment period which ended on September 22, 2008. 
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/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.
    After consideration of all relevant material presented, including 
the Board's recommendation, and other information, it is found that 
finalizing the interim final rule, without change, as published in the 
Federal Register on July 24, 2008 (73 FR 43056), will tend to 
effectuate the declared policy of the Act.

List of Subjects in 7 CFR Part 981

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

PART 981--ALMONDS GROWN IN CALIFORNIA

0
Accordingly, the interim final rule amending 7 CFR part 981, which was 
published at 73 FR 43056 on July 24, 2008, is adopted as a final rule 
without change.

    Dated: November 5, 2008.
David R. Shipman,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. E8-26851 Filed 11-10-08; 8:45 am]
BILLING CODE 3410-02-P