[Federal Register Volume 85, Number 165 (Tuesday, August 25, 2020)]
[Proposed Rules]
[Pages 52278-52280]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-17125]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
 ========================================================================
 

  Federal Register / Vol. 85, No. 165 / Tuesday, August 25, 2020 / 
Proposed Rules  

[[Page 52278]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 984

[Docket No. AMS-SC-20-0053; SC20-984-1 PR]


Walnuts Grown in California; Changes to Reporting Requirements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: This proposed rule would implement a recommendation from the 
California Walnut Board (Board) to change the reporting requirements 
prescribed under the Federal marketing order regulating the handling of 
walnuts grown in California. This action would require California 
walnut handlers to report purchase commitments (walnuts sold but not 
yet shipped) with domestic and foreign buyers on a monthly basis. This 
action should provide more accurate information about supply and demand 
to industry, which would also enhance marketing efforts.

DATES: Comments must be received by September 24, 2020.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent to the Docket Clerk, 
Marketing Order and Agreement Division, Specialty Crops Program, AMS, 
USDA, 1400 Independence Avenue SW, STOP 0237, Washington, DC 20250-
0237; Fax: (202) 720-8938; or internet: https://www.regulations.gov. 
All comments should reference the document 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: https://www.regulations.gov. All 
comments submitted in response to this proposal will be included in the 
record and will be made available to the public. Please be advised that 
the identity of the individuals or entities submitting the comments 
will be made public on the internet at the address provided above.

FOR FURTHER INFORMATION CONTACT: Pushpinder Kumar, Marketing 
Specialist, or Terry Vawter, Regional Director, Marketing Order and 
Agreement Division, California Marketing Field Office, Specialty Crops 
Program, AMS, USDA; Telephone: (559) 487-5903, Fax: (559) 487-5906; or 
Email: [email protected] or [email protected].
    Small businesses may request information on complying with this 
regulation by contacting Richard Lower, Marketing Order and Agreement 
Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue 
SW, STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, 
Fax: (202) 720-8938, or Email: [email protected].

SUPPLEMENTARY INFORMATION: This action, pursuant to 5 U.S.C. 553, 
proposes an amendment to regulations issued to carry out a marketing 
order as defined in 7 CFR 900.2(j). This proposed rule is issued under 
Marketing Order No. 984, as amended (7 CFR part 984), regulating the 
handling of walnuts grown in California. Part 984 (referred to as 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 Board locally administers the Order and is comprised of growers 
and handlers of walnuts operating within California, and a public 
member.
    The Department of Agriculture (USDA) is issuing this proposed rule 
in conformance with Executive Orders 13563 and 13175. This action falls 
within a category of regulatory actions that the Office of Management 
and Budget (OMB) exempted from Executive Order 12866 review. 
Additionally, because this proposed rule does not meet the definition 
of a significant regulatory action, it does not trigger the 
requirements contained in Executive Order 13771. See OMB's Memorandum 
titled ``Interim Guidance Implementing Section 2 of the Executive order 
of January 30, 2017, titled `Reducing Regulation and Controlling 
Regulatory Costs''' (February 2, 2017).
    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This proposed rule is not intended to have 
retroactive effect.
    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 proposed rule would revise reporting requirements under the 
Order by authorizing the Board to collect reports from handlers about 
monthly purchase commitments with domestic and foreign buyers. The 
Board believes that the collection of this information will enable the 
industry to have more accurate and timely data regarding the industry's 
monthly supply and demand. Such information is expected to enhance 
overall marketing efforts.
    The Marketing Order Revision Committee (MORC) met to discuss the 
proposal in a public meeting via teleconference on April 2, 2020. The 
MORC recommended the change in reporting requirements to enable the 
industry to have more complete information on purchase commitments. The 
Board unanimously recommended this action at a public meeting held on 
May 7, 2020, where stakeholders were encouraged to express their views 
and provide input.
    Section 984.71 authorizes the Board to require handlers to report 
inventory of inshell and shelled walnuts as specified by the Board.
    Section 984.72 authorizes the Board to require that handlers who 
handle merchantable walnuts, inshell or shelled, at any time during the 
marketing year shall submit reports showing the quantity handled and 
other pertinent information, as specified by the Board.
    Section 984.73 authorizes the Board, with the approval of the 
Secretary, to require handlers to report walnut

[[Page 52279]]

receipts from growers, handlers or others in a form and on designated 
times.
    Section 984.76 authorizes the Board, with the approval of the 
Secretary, to request handlers to furnish other reports and information 
as needed to enable the Board to perform its duties under the Order.
    Sections 984.471, 984.472, and 984.473 provide the rules and 
regulations related to reports of inventory, merchantable walnuts 
shipped, and walnuts received from growers, respectively.
    Currently, reports of shipments and receipts are filed by handlers 
on CWB Form No. 6 no later than the 5th day of month following such 
shipments or receipts. This report also includes the quantity shipped 
to domestic and foreign buyers for shelled and inshell walnuts, 
including information about the quantity of walnuts exported by country 
of destination. Under this proposed rule, handlers would report 
purchase commitments of walnuts, not yet shipped, made with domestic 
and foreign buyers. The proposed change and information about each 
handler's shipments and receipts, is expected to provide more timely 
information about supply and demand for walnuts, and enhance marketing 
and promotion efforts.
    The Board proposes to add a new paragraph (c) to section 984.472, 
which would require handlers to submit reports on the purchase 
commitments with buyers that are not yet shipped. The title of Section 
984.472 would also be amended to read ``Reports of merchantable walnuts 
shipped, received, and committed.''

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 
businesses subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and 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 90 handlers subject to regulation under the 
Order and approximately 4,400 walnut growers in the production area. 
The Small Business Administration (SBA) defines small agricultural 
service firms as those having annual receipts of less than $30,000,000, 
and small agricultural producers as those having annual receipts of 
less than $1,000,000 (13 CFR 121.201).
    According to the California Walnut Board, there are approximately 
4,400 producers and 90 handlers in the production area. The Board also 
reported that approximately 82 percent of California's walnut handlers 
shipped merchantable walnuts valued under $30 million during the 2018-
2019 marketing year and would therefore be considered small handlers 
according to the SBA definition.
    Data from the 2017 Agricultural Census, published by USDA's 
National Agricultural Statistics Service (NASS), show that 86 percent 
of California farms growing walnuts had walnut sales of less than $1 
million. In an alternative computation using NASS data, the 3-year 
average crop value (2016/17 to 2018/19) was $1.24 billion. Average 
bearing acres over that same 3-year period were 333,000. Dividing crop 
value by acres yields a revenue per acre estimate of $3,733. Using 
these numbers, it would take approximately 268 acres ($1,000,000 / 
$3,733) to yield $1 million in annual walnut sales. The 2017 
Agricultural Census data show that 80 percent of walnut farms in 2017 
were below 260 acres. By either measure, the NASS data demonstrate that 
well over three-fourths of California walnut farms would be considered 
small businesses according to the SBA definition.
    This proposed rule would revise the title of section 984.472 and 
add a new paragraph (c) to include the requirement for handlers to 
report monthly purchase commitments made with domestic and foreign 
buyers. This action is expected to positively impact the industry by 
providing more accurate and timely information regarding the industry's 
monthly supply and demand. Such information is expected to enhance 
overall marketing efforts.
    During the MORC meeting on April 2, 2020, alternatives were 
discussed including not collecting information about purchase 
commitments. However, the industry believes that information about 
walnut supply and demand would prove critical in supporting overall 
marketing efforts. Timely and accurate information gives the handlers 
and the Board valuable data, permitting them to focus on their sales 
efforts. At the May 7, 2020 meeting, the Board discussed the MORC's 
recommendation and its reasoning. There was agreement about the value 
of having the commitment information, along with information on 
shipments and receipts.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the Order's information collection requirements have been 
previously approved by the Office of Management and Budget (OMB) under 
OMB No. 0581-0178, Vegetable and Specialty Crops. This proposed rule 
would require changes to the Board's existing CWB Form No. 6 by 
changing the title and adding the provision to collect information on 
purchase commitments with domestic and foreign buyers. The revised form 
has been submitted to OMB for approval.
    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. USDA has not 
identified any relevant Federal rules that duplicate, overlap, or 
conflict with this proposed 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.
    The Board's meetings were widely publicized throughout the walnut 
industry and all interested persons were invited to attend the meetings 
and encouraged to participate in the deliberations on all issues. The 
MORC's meeting on April 2, 2020, and the Board's meeting on May 7, 
2020, were public meetings held via teleconference and all entities, 
both large and small, were able to express views on this issue. 
Finally, interested persons are invited to submit comments on this 
proposed 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: 
https://www.ams.usda.gov/rules-regulations/moa/small-businesses. Any 
questions about the compliance guide should be sent to Richard Lower at 
the previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposal. All written comments timely received will be 
considered before a final determination is made on this matter.

List of Subjects in 7 CFR Part 984

    Marketing agreements, Reporting and recordkeeping requirements, and 
Walnuts.


[[Page 52280]]


    For the reasons set forth in the preamble, 7 CFR part 984 is 
proposed to be amended as follows:

PART 984--WALNUTS GROWN IN CALIFORNIA

0
1. The authority citation for 7 CFR part 984 continues to read as 
follows:

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

0
2. Amend Sec.  984.472 by revising the heading and adding paragraph (c) 
to read as follows:


Sec.  984.472  Reports of merchantable walnuts received, shipped, and 
committed.

* * * * *
    (c) Reports of merchantable walnuts on which handlers have made 
purchase commitments with buyers during the month, but which have not 
yet been shipped, shall be submitted to the Board on CWB Form No. 6, 
not later than the 5th day of the month following the month in which 
the walnuts were committed. Such reports shall show the quantity of 
walnuts committed in either inshell or shelled pounds. If the handler 
made no commitments during any month, he/she shall mark ``None'' in the 
``Purchase Commitments'' section of CWB Form 6.

Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2020-17125 Filed 8-24-20; 8:45 am]
BILLING CODE 3410-02-P