[Federal Register Volume 89, Number 68 (Monday, April 8, 2024)]
[Rules and Regulations]
[Pages 24337-24339]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-07330]



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 Rules and Regulations
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  Federal Register / Vol. 89, No. 68 / Monday, April 8, 2024 / Rules 
and Regulations  

[[Page 24337]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 989

[Doc. No. AMS-SC-23-0038]


Raisins Produced From Grapes Grown in California; Increased 
Assessment Rate

AGENCY: Agricultural Marketing Service, Department of Agriculture 
(USDA).

ACTION: Final rule.

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SUMMARY: This final rule implements a recommendation from the Raisin 
Administrative Committee (Committee) to increase the assessment rate 
established for the 2023-2024 and subsequent crop years. The assessment 
rate will remain in effect indefinitely unless modified, suspended, or 
terminated.

DATES: Effective May 8, 2024.

FOR FURTHER INFORMATION CONTACT: Jeremy Sasselli, Marketing Specialist, 
or Barry Broadbent, Acting Chief, West Region Branch, Market 
Development Division, Specialty Crops Program, AMS, USDA; Telephone: 
(559) 487-5901 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 202500237; 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 final rule is issued under Marketing Agreement and 
Order No. 989, as amended (7 CFR part 989), regulating the handling of 
raisins produced from grapes grown in California. Part 989 (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 Committee locally administers the Order 
and is comprised of producers and handlers of raisins operating within 
the area of production, and a public member.
    The Agricultural Marketing Service (AMS) is issuing this final rule 
in conformance with Executive Orders 12866, 13563, and 14094. Executive 
Orders 12866 and 13563 direct agencies to assess all 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 final 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 final 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 final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. Under the Order now in effect, California raisin 
handlers are subject to assessments. Funds to administer the Order are 
derived from such assessments. It is intended that the assessment rate 
will be applicable to all assessable raisins beginning on August 1, 
2023, and continue until amended, suspended, or terminated.
    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 U.S. 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 not later than 20 
days after the date of the entry of the ruling.
    Section 989.79 provides authority for the Committee, with the 
approval of AMS, to formulate an annual budget of expenses and collect 
assessments from handlers to administer the program. The members are 
familiar with the Committee's needs and with the costs of goods and 
services in their local area and are thus in a position to formulate an 
appropriate budget and assessment rate. The assessment rate is 
formulated and discussed in a public meeting. Thus, all directly 
affected persons have an opportunity to participate and provide input.
    For the 2018-2019 and subsequent crop years, an assessment rate of 
$22 per assessable ton of raisins handled (84 FR 2049) was in place. 
That rate continues in effect from crop year to crop year until 
modified, suspended, or terminated by AMS upon recommendation and 
information submitted by the Committee or other information available 
to AMS. This final rule increases the assessment rate from $22 per ton 
to $24 per ton of assessable raisins for the 2023-2024 and subsequent 
crop years.
    Prior to arriving at this assessment rate, the Committee considered 
information from its Audit Subcommittee (Subcommittee), which met on 
June 21, 2023. The Subcommittee discussed alternative spending levels 
before making a recommendation to the full Committee. On June 28, 2023, 
the full Committee

[[Page 24338]]

discussed the recommendation of the Subcommittee and voted unanimously 
to recommend a budget of $5,241,000 and an assessment rate of $24 per 
ton as reasonable and necessary to properly administer the Order.
    The Committee last amended the assessment rate in 2019 to $22 per 
ton, which continues to remain in effect; however, California raisin 
acreage and volume have steadily declined since 2019. The Committee 
determined the level of assessment revenue under the current rate is 
now insufficient to meet the rising costs of program operations given a 
production estimate of 192,000 tons of assessable raisins for the 2023-
2024 crop year.
    The assessment rate of $24 is $2 higher than the rate currently in 
effect and is expected to generate assessment income of approximately 
$4,608,000 ($24 per ton multiplied by 192,000 assessable tons) for the 
2023-2024 crop year. This assessment revenue, combined with other 
Committee income and monetary reserves is sufficient to cover the 
budget balance of $633,000 ($5,241,000 minus $4,608,000).
    The major expenditures recommended by the Committee for the 2023-
2024 crop year include $3,303,000 for marketing promotion; $1,205,000 
for salaries and employee related costs; $658,000 for administrative 
expenses; $55,000 for compliance activities; and $20,000 for research 
and studies. Budgeted expenditures for the 2022-2023 crop year were 
$3,592,000; $1,232,000; $703,900; $55,000; and $45,000, respectively. 
The assessment rate increase will cover the expenditures for the 2023-
2024 crop year, while reducing the amount of money needing to be 
expended from reserves.
    This assessment rate will continue in effect indefinitely unless 
modified, suspended, or terminated by AMS upon recommendation and 
information submitted by the Committee or other available information.
    Although this assessment rate will be in effect for an indefinite 
period, the Committee will continue to meet prior to or during each 
crop year to recommend a budget of expenses and consider 
recommendations for modification of the assessment rate. The dates and 
times of Committee meetings are available from the Committee or AMS. 
Committee meetings are open to the public and interested persons may 
express their views at these meetings. AMS will evaluate Committee 
recommendations and other available information to determine whether 
modification of the assessment rate is needed. Further rulemaking will 
be undertaken as necessary. The Committee's budget for subsequent crop 
years would be reviewed and, as appropriate, approved by AMS.

Final Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), the AMS has considered the economic 
impact of this final rule 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 
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 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 1,700 producers of California raisins and 
approximately 17 handlers subject to regulation under the marketing 
order. Small agricultural producers of raisins are defined by the Small 
Business Administration (SBA) as those having annual receipts equal to 
or less than $4.0 million (NAICS code 111332, Grape Vineyards) and 
small agricultural service firms are defined as those whose annual 
receipts are equal to or less than $34.0 million (NAICS code 115114, 
Postharvest Crop Activities) (13 CFR 121.201).
    Using USDA National Agricultural Statistics Service (NASS) data, 
the 2022 season average value of utilized production of California 
processed raisin-type grapes (most of which are dried into raisins) is 
$376.618 million. Dividing that figure by 1,700 producers yields an 
annual average revenue per producer of $221,540, well below the SBA 
large farm size threshold of $4.0 million. Therefore, in terms of 
average annual sales of processed raisin-type grapes, the majority of 
California raisin producers may be classified as small entities.
    To make a similar computation for handlers, the first step is to 
estimate a representative handler price received per pound for packaged 
raisins. Recent USDA purchases under the Commodity Procurement Program 
provide such an estimate. For the most recent raisin crop year used by 
the Committee (August 2022-July 2023), the average price paid for 
packaged raisins purchased by the USDA for food assistance programs was 
$1.56 per pound. For that time period, the Committee provided a list of 
quantities delivered by handlers. When multiplied by the $1.56 price 
per pound, the results showed that 5 handlers had annual raisin 
receipts greater than $34 million, the SBA threshold level for a large 
handler. The remaining 12 handlers out of 17 are small handlers, using 
the SBA criterion.
    This final rule will increase the assessment rate collected from 
handlers for the 2023-2024 and subsequent crop years from $22 to $24 
per ton of assessable raisins acquired by handlers. The Committee 
reviewed its ongoing activities and determined the expenses that would 
be reasonable and necessary to continue program operations for the 
2023-2024 crop year. Additionally, the Committee considered that 
California raisin acreage and volume have steadily declined. 
Consequently, the revenue collected from assessments also decreased, 
while program operating costs have continued to increase. Ultimately, 
the Committee recommended budget totals $5,241,000 for the 2023-2024 
crop year. With the current assessment of $22 per ton, and an operating 
budget of $5,241,000, the Committee would face a deficit of over $1 
million. At the rate of $24 per ton, the anticipated assessment income 
would be $4,608,000 and will reduce the estimated deficit by 
approximately $384,000.
    The major expenditures recommended by the Committee for the 2023-
2024 crop year include $3,303,000 for marketing promotion; $1,205,000 
for salaries and employee related costs; $658,000 for administrative 
expenses; $55,000 for compliance activities; and $20,000 for research 
and studies. Budgeted expenditures for the 2022-2023 crop year were 
$3,592,000; $1,232,000; $703,900; $55,000; and $45,000, respectively. 
The increased assessment rate is necessary to help cover the 
expenditures for the 2023-2024 crop year, while reducing the amount of 
money needing to be expended from reserves.
    The Order provides authority for the Committee to formulate an 
annual budget of expenses and an assessment rate to cover such expenses 
is authorized by AMS. Prior to arriving at this budget and assessment 
rate, the Committee considered alternative spending levels at its June 
28, 2023, meeting but ultimately decided that the recommended budget 
and assessment rate were reasonable and necessary to properly 
administer the Order.
    This final rule increases the assessment obligation imposed on 
handlers. While the increased assessment rate will impose some 
additional costs on handlers, the costs are minimal and applied 
uniformly on all handlers. Some of the additional costs may be passed 
on to producers.

[[Page 24339]]

However, these costs will be offset by the benefits derived by the 
industry from the operation of the Order.
    The Committee's meetings were widely publicized throughout the 
production area. The raisin industry and all interested persons were 
invited to attend the meetings and participate in Committee 
deliberations on all issues. Like all Committee meetings, the June 28, 
2023, meeting was a public meeting and all entities, both large and 
small, were able to express views on this issue. In addition, 
interested persons were invited to submit comments on this rule, 
including the regulatory and information collection impacts of this 
action on small businesses.
    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 in those requirements are necessary as 
a result of this action. Should any changes become necessary, they 
would be submitted to OMB for approval.
    This final rule will not impose any additional reporting or 
recordkeeping requirements on either small or large California 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 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.
    AMS has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this final rule.
    A proposed rule concerning this action was published in the Federal 
Register on November 16, 2023 (88 FR 78679). Copies of the proposed 
rule were provided to all raisin handlers. The proposal was also made 
available through the internet by USDA and the Office of the Federal 
Register. A 30-day comment period ending December 18, 2023, was 
provided for interested persons to respond to the proposal.
    Three comments in opposition to the proposed assessment rate change 
were received. Of the three, two comments are attributed to the same 
person. The first commenter described the proposal as undermining 
farmers economically by forcing them to impart a substantial portion of 
their crop earnings to pay assessments. As stated in the proposal, 
California raisin handlers, not farmers, are subject to assessments. 
Essentially, these assessments help to cover the costs of administering 
the Order. Such costs may be passed on to farmers from handlers; 
however, continuous support for the Order from California raisin 
growers suggests the benefits of orderly marketing outweigh these 
costs. The comment further states that raisin farmers no longer enjoy 
the right to sell their own produce and that the Committee gives or 
sells raisins to Federal agencies and foreign governments because they 
are often the lowest bidders. First, the Order regulates the handling 
of raisins, not raisin growers, and by no means prevents raisin growers 
from packing, processing, or selling their own fruit. Finally, Order 
provisions do not provide the Committee with authority to acquire, give 
or sell raisins either domestically or internationally.
    The other commenter suggested USDA redirect assessment funds from 
other non-specialty crops to fund the Order due to decreases in raisin 
acreage and growth. The Committee collects assessments, not USDA, and 
such funds may only be collected and used in accordance with the Act 
and the terms and provisions specified in the Order. Further, Federal 
marketing orders are issued pursuant to the Act, and the rules issued 
thereunder are unique and brought about through group action of 
essentially small entities acting on their own behalf. Both commenters 
suggested a concern for the welfare of raisin farmers; however, each 
indicate a lack of understanding of the authority, operations, and 
funding of this Order. Accordingly, no changes will be made to the rule 
as proposed.
    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, AMS has determined that this final rule is 
consistent with and will effectuate the purposes of the Act.

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.


0
2. Revise Sec.  989.347 to read as follows:


Sec.  989.347   Assessment rate.

    On and after August 1, 2023, an assessment rate of $24 per ton is 
established for assessable raisins produced from grapes in California.

Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2024-07330 Filed 4-5-24; 8:45 am]
BILLING CODE P