[Federal Register Volume 88, Number 198 (Monday, October 16, 2023)]
[Rules and Regulations]
[Pages 71273-71275]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-22334]



 ========================================================================
 Rules and Regulations
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains regulatory documents 
 having general applicability and legal effect, most of which are keyed 
 to and codified in the Code of Federal Regulations, which is published 
 under 50 titles pursuant to 44 U.S.C. 1510.
 
 The Code of Federal Regulations is sold by the Superintendent of Documents. 
 
 ========================================================================
 

  Federal Register / Vol. 88 , No. 198 / Monday, October 16, 2023 / 
Rules and Regulations  

[[Page 71273]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 989

[Doc. No. AMS-SC-23-0007]


Raisins Produced From Grapes Grown in California; Temporary 
Suspension of Continuance Referendum

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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

SUMMARY: This rule temporarily suspends the continuance referendum 
requirement under the Federal marketing order for California raisins. 
The continuance referendum scheduled between November 2023 and November 
2025 overlaps with the timeframe the Agricultural Marketing Service 
(AMS) plans to conduct a formal rulemaking to amend the marketing 
order. This suspension delays the enforcement of the continuance 
referendum requirement to give precedence to the formal rulemaking 
process, which may include a producer referendum. In addition, if the 
marketing order is amended, this temporary suspension provides industry 
time to operate under the amended marketing order before the next 
scheduled continuance referendum.

DATES: Effective October 16, 2023, 7 CFR 989.91(c) is stayed through 
November 26, 2029. Comments received by November 15, 2023 to be assured 
of consideration.

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

FOR FURTHER INFORMATION CONTACT: Christy Pankey, Marketing Specialist, 
or Matthew Pavone, Branch Chief, Rulemaking Services Branch, Market 
Development Division, Specialty Crops Program, AMS, 1400 Independence 
Avenue SW, Stop 0237, Washington, DC 20250-0237; Telephone: (202) 720-
2491 Fax: (202) 720-8938, or Email: [email protected].
    Small businesses may request information on complying with this 
regulation by contacting Richard Lower, Market Development Division, 
Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP 
0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, or Email: 
[email protected].

SUPPLEMENTARY INFORMATION: This action, pursuant to 5 U.S.C. 553, 
amends regulations issued to carry out a marketing order as defined in 
7 CFR 900.2(j). This rule is issued under Marketing Order No. 989, both 
as amended (7 CFR part 989), hereinafter referred to as the ``Order,'' 
and the applicable provisions of the Agricultural Marketing Agreement 
Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as 
the ``Act.'' The Raisin Administrative Committee (Committee) locally 
administers the Order and is comprised of growers and handlers of 
raisins operating within the area of production and a public member. 
The Committee consists of 47 members of whom 35 shall represent 
producers, 10 shall represent handlers, 1 shall represent the 
cooperative bargaining association(s) and 1 shall be a public member.
    The Agricultural Marketing Service (AMS) is issuing this rule in 
conformance with Executive Orders 12866, 13563, and 14094. Executive 
Orders 12866 and 13563 direct agencies to assess costs and benefits of 
available regulatory alternatives and, if regulation is necessary, to 
select regulatory approaches that maximize net benefits (including 
potential economic, environmental, public health and safety effects, 
distributive impacts, and equity). Executive Order 13563 emphasizes the 
importance of quantifying both costs and benefits, reducing costs, 
harmonizing rules, and promoting flexibility. Executive Order 14094 
directs agencies to conduct proactive outreach to engage interested and 
affected parties through a variety of means, such as through field 
offices, and alternative platforms and media. This action falls within 
a category of regulatory actions that the Office of Management and 
Budget (OMB) exempted from Executive Order 12866 review.
    This rule has been reviewed under Executive Order 13175--
Consultation and Coordination with Indian Tribal Governments, which 
requires agencies to consider whether their rulemaking actions would 
have Tribal implications. AMS has determined that this rule is unlikely 
to have substantial direct effects on one or more Indian Tribes, on the 
relationship between the Federal Government and Indian Tribes, or on 
the distribution of power and responsibilities between the Federal 
Government and Indian Tribes.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This 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 the Department of 
Agriculture (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. Such 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 no later than 20 
days after the date of the entry of the ruling.
    This rule temporarily suspends the continuance referendum 
requirement under section 989.91(c). On October 20,

[[Page 71274]]

2022, the Committee recommended amending the marketing order through 
formal rulemaking and, in a separate request, recommended the 
suspension of the continuance referendum scheduled to occur sometime 
between November 2023 and November 2025. The Committee believes the 
suspension would eliminate any potential confusion among producers 
voting in two referendums in a two-year period.
    Section 989.91(b) states that the Secretary shall terminate or 
suspend the operation of any or all provisions of the Order, whenever 
the Secretary finds that such provisions do not tend to effectuate the 
declared policy of the Act. Section 989.91(c) specifies the Secretary 
shall conduct a referendum no less than five crop years and no later 
than six crop years from November 26, 2018, to ascertain whether 
continuance of the Order is favored by producers. The requirement also 
specifies that subsequent referenda be conducted every six crop years 
thereafter. By this requirement, the timing of the next continuance 
referendum is scheduled to occur sometime between November 2023 and 
November 2025. AMS identifies this period as the same period when the 
formal rulemaking process would occur, which may also include its own 
referendum vote. In view of the anticipated time necessary to complete 
the proposed formal rulemaking action and the likelihood of an 
amendatory referendum being conducted within two years of the scheduled 
continuance referendum, AMS determined that the continuance referendum 
requirement should be suspended to minimize confusion among voters. 
Secondly, AMS determined that to conduct a continuance referendum 
during the same period for when the formal rulemaking is expected to 
occur would not allow the industry time to fully consider the impact of 
potentially new amendments to the Order. For these reasons, the 
continuance referendum requirement would not tend to effectuate the 
declared policy of the Act for that period of time, and therefore, AMS 
has determined not to conduct the continuance referendum at the time 
required by the Order.
    Alternatively, AMS considered suspending the continuance referendum 
until immediately after the conclusion of the formal rulemaking. 
However, this timing would still result in multiple referenda occurring 
within the same 2-year period, which may cause voter confusion, and 
would prevent producers from having adequate time to evaluate any 
potential results of the amendatory process before voting on the 
continuance of the Order. To address these temporal concerns, AMS 
determined that the suspension of the continuance referendum 
requirement should extend until 2029, which is on course with the 
original structure of the timeframe under the Order as discussed in the 
preceding paragraph. This suspension would provide industry and the 
Committee time to assess the benefits of amendments resulting from the 
formal rulemaking, if any, prior to the continuance referendum, prevent 
any voter confusion, and also maintain the structure of the timetable 
in the Order. Based on that timetable, a continuance referendum would 
be conducted to determine if California raisin producers sufficiently 
support the Order as amended.
    This rule suspends the continuance referendum requirement under 
section 989.91(c). The next scheduled continuance referendum will be 
conducted sometime between November 2029 and November 2030.
    A 30-day comment period is provided to allow interested persons to 
respond to this interim final rule. AMS will consider all written 
comments received prior to the issuance of a final rule.

Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), AMS considered the economic impact of 
this action on small entities. Accordingly, AMS prepared this 
regulatory flexibility analysis. The purpose of the RFA is to fit 
regulatory actions to the scale of businesses that are subject to such 
actions so that small businesses will not be unduly or 
disproportionately burdened by the action. Marketing orders issued 
pursuant to the Act, and the rules issued thereunder, are unique in 
that they are brought through group action of essentially small 
entities acting on their own behalf.
    Presently, there are approximately 18 handlers of raisins subject 
to regulation under the Order and approximately 2,000 raisin producers 
in the regulated area.
    Small agricultural producers are defined by the Small Business 
Administration (SBA) as those having annual receipts of less than 
$4,000,000 (NAICS code 111332, Grape Vineyards). Small agricultural 
service firms are defined by the SBA as those having annual receipts of 
less than $34,000,000 (NAICS code 115114, Postharvest Crop Activities) 
(13 CFR 121.201).
    Using USDA National Agricultural Statistics Service (NASS) data, 
the 2021 season average value of utilized production of California 
processed raisin-type grapes (most of which are dried into raisins) is 
$393.649 million. Dividing that figure by 2,000 producers yields an 
annual average revenue per producer of $196,825, well below the SBA 
large farm size of threshold of $4,000,000. In terms of annual sales of 
processed raisin-type grapes, the majority of producers may be 
classified as small entities.
    Dividing the $393.649 million crop value figure by 18 handlers 
yields an average annual sales per handler estimate of $21,869,389. 
This annual average sales figure is measured at the producer-level crop 
value, and to draw conclusions about the proportion of small handlers, 
a handler margin estimate is needed.
    There is no current publicly available estimate of an average 
raisin handler margin, but a 1988 economic study of the California 
raisin industry estimated producer-handler average margins of about 30 
percent for bulk raisin shipments and about 60 percent for packaged 
shipments. Current handler margins are likely somewhat smaller, since 
the study was completed more than three decades ago, and current bulk 
handling and packaging technologies are more efficient.
    An alternative method to compute an average handler margin for 
packaged raisins is to compare the NASS season average grower price per 
ton for processed raisin-type grapes (converted to its dried weight 
equivalent) with an average price per ton for packaged raisins that 
USDA paid under its Commodity Procurement Program in recent years 
($1.41 per pound, $2,820 per ton). The NASS 2021 season average grower 
price for raisin-type grapes was $369 per ton. Using a standard 
conversion factor of 4.62 to convert to a dried-weight equivalent, the 
price per ton for raisins is $1,705 ($369 x 4.62). A computed handler 
margin estimate is 65 percent ($2,820/$1,705-1). Since the Commodity 
Procurement average price includes shipping cost to recipient 
locations, the 65 percent margin is moderately overstated.
    If a handler had annual raisin sales of exactly $34 million (the 
SBA large firm size threshold) that would mean a handler margin of 55 
percent above the producer level ($34,000,000/$21,869,389).
    Since both abovementioned margin estimates for packaged raisin 
shipments (60 and 65 percent) are close to the 55 percent margin 
implied by the $34 million SBA size threshold, it can be concluded that 
there are raisin handlers with annual sales both above and below the 
size threshold. It is reasonable to assume that fewer than 9 of the 18 
handlers have annual raisin sales well

[[Page 71275]]

above $34 million. Therefore, more than 9, a majority of handlers, have 
raisin sales below $34 million and may be classified as small entities.
    On October 20, 2022, the Committee recommended that AMS postpone 
the scheduled continuance referendum to avoid the referendum period 
overlapping with a formal rulemaking to amend the Order and any 
potential confusion it would otherwise cause producers. After 
considering the Committee's request, AMS determined that the scheduled 
continuance referendum should be suspended while AMS conducts a formal 
rulemaking to amend the Order and, if effectuated, while the industry 
operates under such amended Order.
    Section 989.91(b) authorizes the Secretary to terminate or suspend 
the operation of any or all provisions of the Order, whenever the 
Secretary finds that such provisions do not tend to effectuate the 
declared policy of the act.
    This interim final rule suspends the continuance referendum 
requirement under section 989.91(c) of the Federal marketing order 
regulating the handling of raisins produced from grapes grown in 
California. The next scheduled continuance referendum will be conducted 
no earlier than November 26, 2029. AMS will consider all comments 
received prior to publication of a final rule in the Federal Register.
    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 OMB and assigned OMB No. 0581-0178, Vegetable 
and Specialty Crops. No changes are necessary in those requirements as 
a result of this rule. Should any changes become necessary, they would 
be submitted to OMB for approval.
    This interim final rule does not impose any additional reporting or 
recordkeeping requirements on either small or large raisin 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 has not 
identified any relevant Federal rules that duplicate, overlap, or 
conflict with this interim final 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.
    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.
    After consideration of all relevant material presented, including 
the information and recommendations submitted by the Committee and 
other available information, it is hereby found that this section 
989.91(c) does not tend to effectuate the declared policy of the Act 
for the period specified herein and should be stayed for that period.
    This interim final rule invites comments on the temporary 
suspension of the continuance referendum requirement under Marketing 
Order 989, which regulates the handling of raisins produced from grapes 
grown in California. A 30-day comment period is provided to allow 
interested persons to respond to this rule. All written comments timely 
received will be considered before a final rule is published in the 
Federal Register.

Good Cause Analysis

    Pursuant to section 553(b)(B) of the Administrative Procedure Act, 
notice and comment are not required prior to the issuance of a final 
rule if an agency, for good cause, finds that ``notice and public 
procedure thereon are impracticable, unnecessary, or contrary to the 
public interest.''
    AMS has 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 because this rule should 
be implemented as soon as possible since the continuance referendum 
period was originally scheduled during this time period and the 
potential formal rulemaking will likely begin soon, the Committee 
discussed this issue at public meetings and unanimously recommended a 
suspension of the continuance referendum, and the rule provides a 
comment period and any comments received will be considered prior to 
finalization of this rule.
    For the reasons stated above, AMS also finds that good cause exists 
for the interim final rule to be effective upon publication in the 
Federal Register.

List of Subjects in 7 CFR Part 989

    Grapes, Marketing agreements, Raisins, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, the Agricultural 
Marketing Service amends 7 CFR part 989 as follows:

PART 989--RAISINS PRODUCED FROM GRAPES GROWN IN CALIFORNIA

0
1. The authority citation for 7 CFR part 989 continues to read as 
follows:

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


Sec.  989.91  Suspension or termination.

0
2. In Sec.  989.91, paragraph (c) is stayed from October 16, 2023 
through November 26, 2029.

Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2023-22334 Filed 10-13-23; 8:45 am]
BILLING CODE P