[Federal Register Volume 89, Number 15 (Tuesday, January 23, 2024)]
[Rules and Regulations]
[Pages 4165-4167]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-01252]



 ========================================================================
 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. 89, No. 15 / Tuesday, January 23, 2024 / 
Rules and Regulations  

[[Page 4165]]



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, Department of Agriculture 
(USDA).

ACTION: Affirmation of interim final rule as final rule.

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

SUMMARY: This final rule adopts, without change, an interim final rule 
implementing a recommendation from the Raisin Administrative Committee 
(Committee) to temporarily suspend the continuance referendum 
requirement under the Federal marketing order for California raisins. 
This final rule continues in effect the temporary suspension to give 
precedence to the formal rulemaking process and to provide the 
California raisin industry time to operate under the marketing order, 
if amended, before the next scheduled continuance referendum.

DATES: Effective January 23, 2024.

FOR FURTHER INFORMATION CONTACT: Christy Pankey, Marketing Specialist, 
or Matthew Pavone, Chief, Rulemaking Services Branch, Market 
Development Division, Specialty Crops Program, AMS, 1400 Independence 
Avenue SW, Stop 0237, Washington, DC 20250-0237; Telephone: (202) 720-
8085 Fax: (202) 720-8938, or Email: [email protected] or 
[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) 720-8085, 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 Agreement No. 989 
and 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 
production area and a public member. The Committee consists of 47 
members, of whom 35 represent producers, 10 represent handlers, one 
represents the cooperative bargaining association(s), and one is 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 
reaffirms, supplements, and updates Executive Order 12866 and further 
directs agencies to solicit and consider input from a wide range of 
affected and interested parties through a variety of means. 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 sec. 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 continues in effect the temporary suspension of the 
continuance referendum requirement under Sec.  989.91(c). On October 
20, 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 eliminates any potential confusion among producers who would 
otherwise be voting in two referenda 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. Under this requirement, the next continuance referendum is 
scheduled to occur

[[Page 4166]]

sometime between November 2023 and November 2025. AMS identified this 
period as the same period when the formal rulemaking process will 
occur, which may also include its own referendum. In consideration 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. Additionally, AMS 
determined that conducting a continuance referendum during the same 
period as the formal rulemaking is expected to occur would not allow 
the industry time to fully consider the impact of potential amendments 
to the Order. For these reasons, the continuance referendum requirement 
does not tend to effectuate the declared policy of the Act for that 
period of time. 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 
prevent producers from having adequate time to evaluate any potential 
effects of the amendatory process before voting on Order continuance. 
To address these temporal concerns, AMS determined that the suspension 
of the continuance referendum requirement should extend until 2029, at 
which point the original timeframe under the Order as discussed in the 
preceding paragraph will be resumed. Based on that timetable, the next 
continuance referendum will be conducted sometime between November 2029 
and November 2030 to determine whether California raisin producers 
sufficiently support continuation of the Order.

Final 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 about 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 * 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 above $34 million. Therefore, 
more than 9, a majority of handlers, have raisin sales below $34 
million and may be classified as small entities.
    This rule continues in effect the temporary suspension of the 
continuance referendum requirement under section 989.91(c). The 
Committee recommended this action to avoid the scheduled referendum 
period overlapping with the formal rulemaking to amend the Order and 
any potential confusion it would otherwise cause producers. After 
considering the Committee's request, AMS determined 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.
    An interim final rule concerning this action was published in the 
Federal Register on October 16, 2023 (88 FR 71273). AMS provided a 30-
day comment period ending November 15, 2023, to give interested persons 
time to respond to the interim final rule. AMS received one comment in 
support of the interim final rule. Accordingly, no changes were made to 
the rule as published.
    This final rule continues in effect the temporary suspension of the 
continuance referendum requirement under Sec.  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

[[Page 4167]]

conducted no earlier than November 26, 2029.
    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 to those requirements are necessary as 
a result of this rule. Should any changes become necessary, they would 
be submitted to OMB for approval.
    This 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 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 finalizing the 
interim final rule, without change, as published in the Federal 
Register of October 16, 2023 (88 FR 71273), will tend to effectuate the 
declared policy of the Act.

List of Subjects in 7 CFR Part 989

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

0
Accordingly, the interim final rule amending 7 CFR part 989, which was 
published at 88 FR 71273 on October 16, 2023, is adopted as a final 
rule without change.

Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2024-01252 Filed 1-22-24; 8:45 am]
BILLING CODE 3410-02-P