[Federal Register Volume 62, Number 71 (Monday, April 14, 1997)]
[Rules and Regulations]
[Pages 18029-18033]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-9476]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 989
[FV97-989-1IFR]
Raisins Produced From Grapes Grown In California; Final Free and
Reserve Percentages for the 1996-97 Crop Year for Natural (Sun-Dried)
Seedless Raisins
AGENCY: Agricultural Marketing Service, USDA.
[[Page 18030]]
ACTION: Interim final rule with request for comments.
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SUMMARY: This interim final rule establishes final free and reserve
percentages for 1996-97 crop Natural (sun-dried) Seedless raisins. The
percentages are 86 percent free and 14 percent reserve. These
percentages are intended to stabilize supplies and prices, and
strengthen market conditions. This rule was recommended by the Raisin
Administrative Committee (Committee), the body which locally
administers the marketing order.
DATES: This interim final rule becomes effective April 15, 1997, and
applies to all Natural (sun-dried) Seedless raisins acquired from the
beginning of the 1996-97 crop year. Comments received by May 14, 1997
will be considered prior to any finalization of this interim final
rule.
ADDRESSES: Interested persons are invited to submit written comments
concerning this action. Comments must be sent in triplicate to the
Docket Clerk, Fruit and Vegetable Division, AMS, USDA, room 2525-S,
P.O. Box 96456, Washington, DC 20090-6456, or faxed to 202-720-5698.
All comments should reference the docket 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.
FOR FURTHER INFORMATION CONTACT:
Richard P. Van Diest, Marketing Specialist, California Marketing Field
Office, Fruit and Vegetable Division, AMS, USDA, 2202 Monterey Street,
suite 102B, Fresno, California 93721; telephone: 209-487-5901 or Mark
A. Slupek, Marketing Specialist, Marketing Order Administration Branch,
Fruit and Vegetable Division, AMS, USDA, room 2523-S, P.O. Box 96456,
Washington, DC 20090-6456; telephone: 202-205-2830. Small businesses
may request information on compliance with this regulation by
contacting: Jay Guerber, Marketing Order Administration Branch, Fruit
and Vegetable Division, AMS, USDA, P.O. Box 96456, room 2525-S,
Washington, DC 20090-6456; telephone (202) 720-2491; Fax # (202) 720-
5698.
SUPPLEMENTARY INFORMATION: This rule is issued under marketing
agreement and Order No. 989 (7 CFR part 989), both as amended,
regulating the handling of raisins produced from grapes 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.''
The Department of Agriculture (Department) is issuing this rule in
conformance with Executive Order 12866.
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. Under the marketing order provisions now in effect,
final free and reserve percentages may be established for raisins
acquired by handlers during the crop year. This rule establishes final
free and reserve percentages for Natural (sun-dried) Seedless raisins
for the 1996-97 crop year, beginning August 1, 1996, through July 31,
1997. 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 the Secretary 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 requesting a modification of the order or to be exempt
therefrom. Such handler is afforded the opportunity for a hearing on
the petition. After the hearing, the Secretary 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 in equity to review
the Secretary's ruling on the petition, provided an action is filed not
later than 20 days after the date of the entry of the ruling.
The order prescribes procedures for computing trade demands and
preliminary and final percentages that establish the amount of raisins
that can be marketed throughout the season. The regulations apply to
all handlers of California raisins. Raisins in the free percentage
category may be shipped immediately to any market, while reserve
raisins must be held by handlers in a reserve pool for the account of
the Committee, which is responsible for local administration of the
order. Under the order, reserve raisins may be: Sold at a later date by
the Committee to handlers for free use or to replace part of the free
raisins they exported; used in diversion programs; exported to
authorized countries; carried over as a hedge against a short crop the
following year; or disposed of in other outlets noncompetitive with
those for free tonnage raisins.
While this rule may restrict the amount of Natural (sun-dried)
Seedless raisins that enter domestic markets, final free and reserve
percentages are intended to promote stronger marketing conditions, to
stabilize prices and supplies, and to improve grower returns. In
addition to the quantity of raisins released under the preliminary
percentages and the final percentages, the order specifies methods to
make available additional raisins to handlers by requiring sales of
reserve pool raisins for use as free tonnage raisins under ``10 plus
10'' offers, and authorizing sales of reserve raisins under certain
conditions, such as a national emergency, crop failure, change of
economic or marketing conditions, or if free tonnage shipments during
the current crop year exceed shipments of the prior crop year by more
than 5 percent.
The Department's ``Guidelines for Fruit, Vegetable, and Specialty
Crop Marketing Orders'' specify that 110 percent of recent years' sales
should be made available to primary markets each season before
recommendations for volume regulation are approved. This goal is met by
the establishment of a final percentage which releases 100 percent of
the computed trade demand and the additional release of reserve raisins
to handlers under ``10 plus 10'' offers. The ``10 plus 10'' offers are
two simultaneous offers of reserve pool raisins which are made
available to handlers each season. For each such offer, a quantity of
raisins equal to 10 percent of the prior year's shipments is made
available for free use. Approximately 59,000 tons of Natural (sun-
dried) Seedless were purchased by handlers for free use pursuant to
these offers. The quantity available for primary market under this rule
would be about 406,000 tons natural condition raisins or 381,000 tons
packed raisins. This is 129 percent of the quantity shipped in 1995.
Pursuant to section 989.54(a) of the order, the Committee met on
August 15, 1996, to review shipment data, inventory data, and the 1995
crop conditions for raisins of all varietal types. The Committee
computed a trade demand for each varietal type for which a free tonnage
percentage might be recommended. The trade demand is 90 percent of the
prior year's shipments of free tonnage and reserve tonnage raisins sold
for free use for each varietal type into all market outlets, adjusted
by subtracting the carrying of each varietal type on August 1 of the
current crop year and by adding to the trade demand the desirable
carryout for each varietal type at the end of that crop year. As
specified in section 989.154, the desirable carryout for each varietal
type shall be equal to the shipments of free
[[Page 18031]]
tonnage raisins of the prior crop year during the months of August and
September. If the prior year's shipments are limited because of crop
conditions, the total shipments during that period of time during one
of the three years preceding the prior crop year may be used. In
accordance with these provisions, the Committee computed and announced
a 1996-97 trade demand of 232,765 tons for Natural (sun-dried) Seedless
raisins.
As required under section 989.54(b) of the order, the Committee met
on October 3, 1996, and computed and announced a preliminary crop
estimate and preliminary free and reserve percentages for Natural (sun-
dried) Seedless raisins which released 85 percent of the trade demand.
On October 3, 1996, the Committee's crop estimate and preliminary free
and reserve percentages were as follows: 272,034 tons, and 73 percent
free and 27 percent reserve.
Also at that meeting, the Committee computed and announced
preliminary crop estimates and preliminary free and reserve percentages
for Dipped Seedless, Oleate and Related Seedless, Golden Seedless,
Zante Currant, Sultana, Muscat, Monukka, and Other Seedless raisins.
The Committee determined, however, that volume control percentages only
were warranted for Natural (sun-dried) Seedless raisins. It determined
that the supplies of the other varietal types would be less than or
close enough to the computed trade demands for each of these varietal
types. These varietal types are produced in much smaller quantities
than Natural (sun-dried) Seedless raisins. In view of these factors,
volume control percentages either would not be necessary to maintain
market stability or would not be economically practical for the other
variety types.
Pursuant to section 989.54(c), the Committee may adopt interim free
and reserve percentages. Interim percentages may release less than the
computed trade demand for each varietal type. Interim percentages for
Natural (sun-dried) Seedless raisins of 85.75 percent free and 14.25
percent reserve were announced by the Committee on February 3, 1997.
The Committee considered its final estimate of 270,999 tons of 1966-97
production of Natural (sun-dried) Seedless raisins when it established
the interim percentages. That action released most, but not all, of the
computed trade demand for Natural (sun-dried) Seedless raisins.
In addition, under section 989.54(d) of the order, the Committee is
required to recommend to the Secretary, no later than February 15 of
each crop year, final free and reserve percentages which, when applied
to the final production estimate of a varietal type, will tend to
release the full trade demand for any varietal type. The Committee met
on February 3, 1997, for this purpose.
The computed trade demand (232,765 tons) is 90 percent of the prior
year's shipments of free tonnage and reserve tonnage raisins sold for
free use into all market outlets (282,289 tons), adjusted by
subtracting the carrying of each varietal type on August 1 of the
current crop year (113,697 tons) and by adding to the trade demand the
desirable carryout for each varietal type at the end of that crop year
(64,173 tons). No information was presented between the August 15,
1996, meeting and the February 3, 1997, meeting to cause the Committee
to make any change to the computed trade demand. Thus, the Committee
divided the computed trade demand of 232,765 tons by the final
production estimate (270,999 tons) and recommended a final free
percentage of 86 percent and a final reserve percentage of 14 percent.
The free and reserve percentages established by this interim final
rule will apply uniformly to all handlers in the industry, whether
small or large, and there are no known additional costs incurred by
small handlers. Although raisin markets are limited, they are available
to all handlers, regardless of size. The stabilizing effects of the
percentages impact both small and large handlers positively by helping
them maintain and expand markets.
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
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 rules issued thereunder, are unique in that
they are brought about through group action of essentially small
entities acting on their own behalf. Thus, both statutes have small
entity orientation and compatibility.
There are approximately 20 handlers of California raisins who are
subject to regulation under the raisin marketing order and
approximately 4,500 producers of raisins in the regulated area. Small
agricultural service firms, which includes handlers, have been denied
by the Small Business Administration (13 CFR 121.601) as those having
annual receipts of less than $5,000,000, and small agricultural
producers are defined as those having annual receipts of less than
$500,000. No more than 8 handlers, and a majority of producers, of
California raisins may be classified as small entities. Twelve of the
20 handlers subject to regulation have annual sales estimated to be at
least $5,000,000, and the remaining 8 handlers have sales less than
$5,000,000, excluding receipts from any other sources.
Committee and subcommittee meetings are widely publicized in
advance and are held in a location central to the production area. The
meetings are open to all industry members (including small business
entities) and other interested persons--who are encouraged to
participate in the deliberations and voice their opinions on topics
under discussion. Thus, Committee recommendations can be considered to
represent the interests of small business entities in the industry.
Many years of marketing experience led to the development of the
current volume control procedures. These procedures have helped the
industry address its marketing problems by keeping supplies in balance
with domestic and export market needs, and strengthening market
conditions. The current volume control procedures fully supply the
domestic and export markets, provide for market expansion, and help
prevent oversupplies in the domestic market.
In discussing the possibility of marketing percentages for the
1996-97 crop year, the Committee considered: (1) The estimated tonnage
held by producers, handlers, and for the account of the Committee at
the beginning of the crop year (113,697 tons); (2) the estimated
tonnage of standard raisins which will be produced in 1996-97 (270,999
tons); (3) the trade demand for raisins in free tonnage outlets in
1996-97 (232,765 tons); (4) the estimated desirable carryout at the end
of the 1996-97 crop year for free tonnage (64,173 tons); (5) the
estimated world raisin supply and demand situation; (6) the current
prices being received and the probable level of prices to be received
for raisins by producers and handlers; and (7) the trend and level of
consumer income.
The Committee's review of the factors resulted in the computation
and announcement in October 1997 of preliminary free and reserve
percentages for Natural (sun-dried) Seedless raisins. This varietal
type is the major commercial varietal type produced in California.
Although the 1996-97 crop was estimated to be down from previous crop
years, the total supply available for
[[Page 18032]]
marketing (270,999 tons) exceeded the computed trade demand (232,765
tons) by a large enough quantity (38,234 tons) to support limiting the
quantity available for sale in free tonnage markets by placing a
portion of the crop aside to be sold when demand improved in the
current or subsequent season.
This rule establishes free and reserve percentages for Natural
(sun-dried) Seedless raisins in accordance with the volume control
provisions in section 989.54. Raisins in the free percentage category
may be shipped immediately to any market, while reserve raisins must be
held by handlers in a reserve pool for the account of the Committee,
which is responsible for local administration of the order. Under the
order, reserve raisins may be: Sold at a later date by the Committee to
handlers for free use or to replace part of the free use raisins they
exported: used in diversion programs; exported to authorized countries;
carried over as a hedge against a short crop the following year; or
disposed of in other outlets noncompetitive with those for free tonnage
raisins. The percentage releases provide all handlers with the
opportunity to benefit from the most profitable domestic market. That
market is available to all handlers, regardless of handler size.
Raisin variety grapes can be marketed as fresh grapes, crushed for
use in the production of wine or juice concentrate, or dried into
raisins. Annual fluctuations in the fresh grape, wine, and concentrate
markets cause fluctuations in raisin supply. These supply fluctuations
can cause producer price instability and disorderly market conditions.
Volume control is helpful to the raisin industry because it lessens the
impact of such fluctuations and contributes to orderly marketing.
Industry statistics show that Natural (sun-dried) Seedless raisin
receipts have varied widely over the last ten years, from a low of
325,911 tons in 1995 to a high of 395,501 tons in 1989. Average
receipts for the last 10 years have been around 365,000 tons. As crop
size has fluctuated, volume regulations have contributed toward orderly
marketing and market stability, and have helped moderate the variation
in returns for all growers and handlers, both large and small. For
instance, handler receipts in the shortest crop year (1995) were 89
percent of the ten-year average (1986-1995). Handler receipts in the
biggest crop year (1989) were 108 percent of the ten-year average.
Free and reserve percentages are established by variety, and only
in years when the supply exceeds the trade demand by a large enough
margin that the Committee believes volume control is necessary to
maintain market stability. Accordingly, in assessing whether to apply
volume control regulation or, as an alternative, not to apply such
regulation, the Committee recommended only one of the 9 raisin varietal
types defined under the marketing order for volume control regulation
this season.
As mentioned earlier, the Department's ``Guidelines for Fruit,
Vegetable, and Speciality Crop Marketing Orders'' specify that 110
percent of recent years' sales should be made available to primary
markets each season before recommendations for volume regulation are
approved. The quantity available under this rule is 129 percent of the
quantity shipped in 1995.
The free and reserve percentages established by this rule release
the full trade demand and apply uniformly to all handlers in the
industry, regardless of size. There are no known additional costs
incurred by small handlers that are not incurred by large handlers. The
stabilizing effects of the percentages impact all handlers positively
by helping them maintain and expand markets, despite seasonal supply
fluctuations. Likewise, price stability positively impacts all
producers by allowing them to better anticipate the revenues their
raisins will generate.
While the level of benefits of this rulemaking are difficult to
quantify, the stabilizing effects of the volume regulations impact both
small and large handlers positively by helping them maintain markets
even though raisin supplies fluctuate widely from season to season.
There are some reporting, recordkeeping and other compliance
requirements under the marketing order. The reporting and recordkeeping
burdens are necessary for compliance purposes and for developing
statistical data for maintenance of the program. The forms require
information which is readily available from handler records and which
can be provided without data processing equipment or trained
statistical staff. As with other, similar marketing order programs,
reports and forms are periodically studied to reduce or eliminate
duplicate information collection burdens by industry and public sector
agencies. This interim final rule does not change those requirements.
The Department has not identified any relevant Federal rules that
duplicate, overlap, or conflict with this regulation.
A 30-day comment period is provided to allow interested persons to
respond to this rule. All written comments received within the comment
period regarding this action or its effect on small business entities
will be considered prior to finalization of this rule.
After consideration of all relevant material presented, including
the Committee's recommendation, and other information, it is found that
this interim final rule, as hereinafter set forth, will tend to
effectuate the declared policy of the Act.
Pursuant to 5 U.S.C. 553, it is also found and 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, and that good cause exists for not postponing the effective
date of this rule until 30 days after publication in the Federal
Register because: (1) The relevant provisions of this part require that
the percentages designated herein for the 1996-97 crop year apply to
all Natural (sun-dried) Seedless raisins acquired from the beginning of
that crop year; (2) handlers are currently marketing 1996-97 crop
raisins of the Natural (sun-dried) Seedless varietal type and this
action should be taken promptly to achieve the intended purpose of
making the full trade demand quantity computed by the Committee
available to handlers; (3) handlers are aware of this action, which the
Committee unanimously recommended at an open meeting, and need no
additional time to comply with these percentages; and (4) this interim
final rule provides a 30-day comment period and any comments received
will be considered prior to finalization of this interim final rule.
List of Subjects in 7 CFR Part 989
Grapes, Marketing agreements, Raisins, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, 7 CFR Part 989 is
amended to read as follows:
PART 989--RAISINS PRODUCED FROM GRAPES GROWN IN CALIFORNIA
1. The authority citation for 7 CFR part 989 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. Section 989.250 is added to Subpart--Supplementary Regulations
to read as follows:
Note: This section will not appear in the Code of Federal
Regulations.
Sec. 989.250 Final free and reserve percentages for the 1996-97 crop
year.
The final percentages for standard Natural (sun-dried) Seedless
raisins
[[Page 18033]]
acquired by handlers during the crop year beginning on August 1, 1996,
which shall be free tonnage and reserve tonnage, respectively, are
designated as follows:
------------------------------------------------------------------------
Free Reserve
Varietal type percentage percentage
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Natural (sun-dried) Seedless.................... 86 14
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Dated: April 7, 1997.
Robert C. Keeney,
Director, Fruit and Vegetable Division.
[FR Doc. 97-9476 Filed 4-11-97; 8:45 am]
BILLING CODE 3410-02-M
