[Federal Register Volume 64, Number 108 (Monday, June 7, 1999)]
[Rules and Regulations]
[Pages 30233-30236]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-14311]
[[Page 30233]]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 989
[Docket No. FV99-989-3 FIR]
Raisins Produced From Grapes Grown In California; Final Free and
Reserve Percentages for 1998-99 Zante Currant Raisins
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Department of Agriculture (Department) is adopting, as a
final rule without change, the provisions of an interim final rule
which established final volume regulation percentages for 1998-99 Zante
Currant raisins covered under the Federal marketing order for
California raisins (order). The order regulates the handling of raisins
produced from grapes grown in California and is administered locally by
the Raisin Administrative Committee (Committee). The volume regulation
percentages are 85 percent free and 15 percent reserve. Free tonnage
raisins may be sold by handlers to any market. Reserve raisins must be
held in a pool for the account of the Committee and are disposed of
through various programs authorized under the order. The volume
regulation percentages are intended to help the industry manage its
supply of Zante Currant raisins and strengthen market conditions.
EFFECTIVE DATE: July 7, 1999.
FOR FURTHER INFORMATION CONTACT: Maureen T. Pello, Marketing
Specialist, California Marketing Field Office, Fruit and Vegetable
Programs, AMS, USDA, 2202 Monterey Street, suite 102B, Fresno,
California 93721; telephone: (559) 487-5901, Fax: (559) 487-5906; or
George Kelhart, Technical Advisor, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, room 2525-S, PO Box
96456, Washington, DC 20090-6456; telephone: (202) 720-2491, or Fax:
(202) 720-5698. Small businesses may request information on complying
with this regulation, or obtain a guide on complying with fruit,
vegetable, and specialty crop marketing agreements and orders by
contacting Jay Guerber, Marketing Order Administration Branch, Fruit
and Vegetable Programs, AMS, USDA, PO Box 96456, room 2525-S,
Washington, DC 20090-6456; telephone (202) 720-2491, Fax: (202) 720-
5698, or E-mail: Jay.Guerber@usda.gov. You may view the marketing
agreement and order small business compliance guide at the following
web site: http://www.ams.usda.gov/fv/moab.html.
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 is issuing this rule in conformance with Executive
Order 12866.
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. Under the order provisions now in effect, final free
and reserve percentages may be established for raisins acquired by
handlers during the crop year. This rule continues to establish final
free and reserve percentages for Zante Currant raisins for the 1998-99
crop year, which began August 1, 1998, and ends July 31, 1999. 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 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, 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.
This rule continues to establish final volume regulation
percentages for 1998-99 crop Zante Currant raisins covered under the
order. The volume regulation percentages are 85 percent free and 15
percent reserve. Free tonnage raisins may be sold by handlers to any
market. Reserve raisins must be held in a pool for the account of the
Committee and are disposed of through various programs authorized under
the order. For example, reserve raisins may be sold by the Committee to
handlers for free use or to replace part of the free tonnage raisins
they exported; used in diversion programs; carried over as a hedge
against a short crop the following year; or disposed of in other
outlets not competitive with those for free tonnage raisins, such as
government purchase, distilleries, or animal feed. The volume
regulation percentages are intended to help the industry manage its
supply of Zante Currant raisins and strengthen market conditions. Final
percentages were recommended by the Committee at a meeting on February
11, 1999.
Section 989.54 of the order prescribes the procedures and time
frames to be followed in establishing volume regulation. This includes
methodology used to calculate percentages. Pursuant to Sec. 989.54(a)
of the order, the Committee met on August 13, 1998, to review shipment
and inventory data, and other matters relating to the supplies of
raisins of all varietal types. The Committee computed a trade demand
for each varietal type for which a free tonnage percentage might be
recommended. Trade demand is computed using a formula specified in the
order and, for each varietal type, is equal to 90 percent of the prior
year's shipments of free tonnage and reserve tonnage raisins sold for
free use into all market outlets, adjusted by subtracting the carrying
on August 1 of the current crop year and by adding the desirable
carryout at the end of that crop year. As specified in Sec. 989.154,
the desirable carryout for each varietal type is equal to the shipments
of free tonnage raisins of the prior crop year during the months of
August, September, and one-half of October. In accordance with these
provisions, the Committee computed and announced a 1998-99 trade demand
for Zante Currant raisins at 3,215 tons as shown below.
Computed Trade Demand
[Natural condition tons]
------------------------------------------------------------------------
Zante
currant
raisins
------------------------------------------------------------------------
Prior year's shipments..................................... 4,121
Multiplied by 90 percent................................... 0.90
Equals adjusted base....................................... 3,709
Minus carryin inventory.................................... 1,188
Plus desirable carryout.................................... 694
Equals computed trade demand 3,215
------------------------------------------------------------------------
Section 989.54(b) of the order requires that the Committee
announce, on or before October 5, preliminary crop estimates and
determine whether volume regulation is warranted for the varietal types
for which it computed a trade demand. That section allows the Committee
to extend the October 5 date
[[Page 30234]]
up to 5 business days if warranted by a late crop.
The 1998-99 crop was unusually late because of the combined effect
of adverse crop conditions during the spring of 1998 created by the
weather phenomenon known as El Nino, scattered rain during the fall
harvest, and a shortage of labor once the grapes were ready for
harvest. The crop is normally harvested during late August and early
September; this season's crop was harvested about 3-4 weeks later.
Because of the late crop, the Committee met on October 8, 1998, and
announced preliminary crop estimates for all nine varietal types of
raisins covered under the order. To guard against an underestimation of
the crop, the Committee computed preliminary volume regulation
percentages for five of the nine varietal types of raisins covered
under the order--Dipped Seedless, Natural (sun-dried) Seedless
(Naturals), Oleate and Related Seedless, Other Seedless, and Zante
Currant raisins. The total crop was initially estimated at 321,486
tons.
As more information became available during the following months,
the Committee determined that volume regulation was only warranted for
Zante Currant raisins. The other varietal types of raisins for which
preliminary percentages were computed are produced from grapes that
mature later than Zante Currants, and thus the crop sizes for these
varietal types were more adversely affected by the poor weather
conditions and labor problems. The Committee ultimately determined that
the supplies of these other varietal types would be less than or close
to their computed trade demands, and that volume regulation percentages
were not needed. Based on the most recent information available, the
total crop estimate was reduced from 321,486 to 276,510 tons. This is
the first time in 16 years that volume regulation was not implemented
for Naturals, the major varietal type of California raisin (crop
estimate reduced from 280,092 to 235,000 tons, about 35 percent lower
than the 10-year average of 360,183 tons). As in past seasons, the
Committee submitted its marketing policy to the Department for review.
Regarding Zante Currant raisins, the Committee announced its
preliminary crop estimate at its October 1998 meeting at 3,684 tons. As
indicated in the preceding paragraph, Zante Currants mature earlier
than the other varietal types of raisins covered under the order. Thus,
producers were able to harvest their Zante Currants before it rained in
the production area and before labor was in short supply. With the
preliminary crop estimate (3,684 tons), 1997-98 carryin inventory
(1,188 tons), and reserve raisins released for free use through an
export program (483 tons) totaling to a supply of 5,355 tons, about 66
percent higher than trade demand (3,215 tons), and the 1997-98 carryin
inventory (1,188 tons) about 71 percent higher than the desirable
inventory (694 tons), the Committee determined that volume regulation
for Zante Currant raisins was warranted.
At the October meeting, the Committee also computed preliminary
free and reserve percentages for Zante Currants which released 65
percent of the computed trade demand since the field price had not been
established. The preliminary percentages were 57 percent free and 43
percent reserve. These percentages were modified to release 85 percent
of the trade demand on October 16, 1998, when the Zante Currant field
price was established. The Zante Currant preliminary percentages were
thus modified to 74 percent free and 26 percent reserve. The Committee
met on November 13, 1998, and announced interim percentages for Zante
Currant raisins at 85 percent free and 15 percent reserve which, based
on the 3,684 ton crop estimate, released less than the computed trade
demand. On January 15, 1999, the Committee revised its crop estimate
for Zante Currants from 3,684 to 3,801 tons.
Various programs to utilize reserve Zante Currant raisins were
implemented when volume regulation was in effect during the 1994-95,
1995-96, and 1997-98 seasons to help reduce inventories, and help
strengthen total producer prices (which includes proceeds from both
free tonnage plus reserve pool Zante Currants) from $412.56 per ton in
1994-95 to an estimated high of $730 per ton in 1997-98. The Committee
is implementing a reserve program this year which is expected to help
the industry export more Zante Currants, thereby reducing the
industry's oversupply, helping to build export markets, and ultimately
improving producer returns.
Without such programs, the Committee estimates that its export
shipments would be reduced, thereby reducing overall Zante Currant
shipments for the crop year. Reduced shipments for the current year
would create a high carryin inventory which would result in a lower
computed trade demand for next year, a lower free tonnage percentage,
should volume regulation be implemented, and likely reduced returns to
1999-2000 crop raisin producers. The implementation of volume
regulation for 1998-99 Zante Currant raisins is expected to help manage
supply and strengthen market conditions.
As required under Sec. 989.54(d) of the order, the Committee
recommended to the Secretary at its meeting on February 11, 1999, final
free and reserve percentages for Zante Currant raisins which, when
applied to the final production estimate, will tend to release the full
trade demand for Zante Currants. With the increased crop estimate of
3,801 tons, final percentages computed to the same figures as the
interim percentages--85 percent free and 15 percent reserve. The
Committee's calculations to arrive at final percentages are shown in
the table below.
Final Volume Regulation Percentages
[Tonnage as natural condition weight]
------------------------------------------------------------------------
Zante
currant
raisins
------------------------------------------------------------------------
Trade demand............................................... 3,215
Divided by crop estimate................................... 3,801
Equals free percentage..................................... 85
100 minus free percentage equals reserve percentage........ 15
------------------------------------------------------------------------
In addition, the Department's ``Guidelines for Fruit, Vegetable,
and Speciality Crop Marketing Orders'' (Guidelines) specify that 110
percent of recent years' sales should be made available to primary
markets each season for marketing orders utilizing reserve pool
authority. This goal has been met for Zante Currants by the
establishment of final percentages which released 100 percent of the
trade demand and the offer of additional reserve raisins for sale to
handlers under the ``10 plus 10 offers.'' As specified in
Sec. 989.54(g), the 10 plus 10 offers are two offers of reserve pool
raisins which are made available to handlers during each season.
Handlers may sell their 10 plus 10 raisins to any market. For each such
offer, a quantity of reserve raisins equal to 10 percent of the prior
year's shipments is made available for free use.
About 824 tons of raisins were made available in the 10 plus 10
offers (which included 423 tons of remaining 1997 reserve Zante
Currants), or 412 tons per offer. Both offers were held simultaneously
in March 1999. Adding the 824 tons of 10 plus 10 raisins to the 3,215
ton trade demand figure, plus 1,188 tons of 1997-98 carryin inventory
equates to about 5,227 tons natural condition raisins or 4,645 tons
packed raisins that were made available for free use, or to the primary
market. This is 127 percent of the quantity of Zante Currants shipped
in 1997 (4,121 tons
[[Page 30235]]
natural condition tons or 3,662 packed tons).
In addition to the 10 plus 10 offers, Sec. 989.67(j) of the order
provides authority for sales of reserve raisins to handlers under
certain conditions such as a national emergency, crop failure, change
in economic or marketing conditions, or if free tonnage shipments in
the current crop year exceed shipments of a comparable period of the
prior crop year. Such reserve raisins may be sold by handlers to any
market. These additional offers of reserve raisins would thus make even
more raisins available to primary markets which is consistent with the
Department's Guidelines.
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 final 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 order and approximately 4,500 raisin
producers in the regulated area. Almost all of the 20 handlers handled,
and about 130 of the 4,500 raisin producers produced Zante Currants
during the 1998-99 crop year. Small agricultural service firms have
been defined 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 7 handlers, and a majority of
producers, of California raisins may be classified as small entities.
Thirteen of the 20 handlers subject to regulation have annual sales
estimated to be at least $5,000,000, and the remaining 7 handlers have
sales less than $5,000,000, excluding receipts from any other sources.
Pursuant to Sec. 989.54(d) of the order, this rule continues to
establish final volume regulation percentages for 1998-99 crop Zante
Currant raisins. The volume regulation percentages are 85 percent free
and 15 percent reserve. Free tonnage raisins may be sold by handlers to
any market. Reserve raisins must be held in a pool for the account of
the Committee and are disposed of through certain programs authorized
under the order. Volume regulation is warranted for Zante Currants this
season because the crop estimate of 3,801 tons combined with the 1997-
98 carryin inventory of 1,188 tons, plus 483 tons of reserve raisins
released for free use through an export program, results in a supply of
5,472 tons which exceeds the trade demand of 3,215 tons by about 70
percent. The volume regulation percentages are intended to help the
industry manage its supply of Zante Currant raisins and strengthen
market conditions.
Many years of marketing experience led to the development of the
current volume regulation 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 regulation procedures fully supply the
domestic and export markets, provide for market expansion, and help
prevent oversupplies in the domestic market.
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. With the exception of the 1996-97 season,
small and large Zante Currant raisin producers and handlers have been
operating under volume regulation percentages every year since 1994-95.
There are no known additional costs incurred by small handlers that are
not incurred by large handlers. All handlers are regulated based on the
quantity of raisins which they acquire from producers. While the level
of benefits of this rulemaking are difficult to quantify, the
stabilizing effects of volume regulation impact both small and large
handlers positively by helping them maintain orderly marketing
conditions by managing supply.
Various programs to utilize reserve Zante Currant raisins were
implemented when volume regulation was in effect during the 1994-95,
1995-96, and 1997-98 seasons. As shown in the table following this
paragraph, although production varied during those years, volume
regulation helped to reduce inventories, and helped to strengthen total
producer prices (which includes proceeds from both free tonnage plus
reserve pool Zante Currants) from $412.56 per ton in 1994-95 to an
estimated high of $730 per ton in 1997-98. The Committee is
implementing a reserve program this year which is expected to help the
industry export more Zante Currants, thereby reducing the industry's
oversupply, helping to build export markets, and ultimately improving
producer returns.
Zante Currant Inventories and Producer Prices During Years of Volume Regulation
[*Natural condition tons]
----------------------------------------------------------------------------------------------------------------
Inventory* Total season
-------------------------- average
Crop year Production* producer
Desirable Physical prices (per
ton)
----------------------------------------------------------------------------------------------------------------
1994-95.................................................. 5,377 837 4,364 $412.56
1995-96.................................................. 3,294 782 2,890 711.32
1996-97.................................................. 4,491 987 549 \1\ 1,150.00
1997-98.................................................. 4,826 694 1,188 730.00
----------------------------------------------------------------------------------------------------------------
\1\ No volume regulation.
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 regulation is necessary to
maintain market stability. Accordingly, in assessing whether to apply
volume regulation or, as an alternative, not to apply such regulation,
the Committee recommended that volume regulation was only warranted for
Zante Currant raisins this season. Preliminary volume regulation
percentages were computed and announced in October 1998 for four other
varietal types of California raisins. As more information became
available in the following months, the Committee
[[Page 30236]]
determined that the supplies of these other varietal types would be
less than or close to their computed trade demands; thus, the Committee
determined that volume regulation was not warranted.
There are some reporting, recordkeeping and other compliance
requirements under the order. The reporting and recordkeeping burdens
are necessary for compliance purposes and for developing statistical
data for maintenance of the program. The requirements are the same as
those applied last season. Thus, this action imposes no additional
reporting or recordkeeping burdens on either small or large handlers.
The forms require information which is readily available from handler
records and which can be provided without data processing equipment or
trained statistical staff. The information and recordkeeping
requirements have been previously approved by the Office of Management
and Budget (OMB) under OMB Control No. 0581-0178. 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.
In addition, the Department has not identified any relevant Federal
rules that duplicate, overlap, or conflict with this rule. Finally,
interested persons are invited to submit information on the regulatory
and informational impacts of this action on small businesses.
Further, 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.
An interim final rule concerning this action was published in the
Federal Register on March 8, 1999. Copies of the rule were mailed to
all Committee members and alternates, the Raisin Bargaining
Association, handlers and dehydrators. In addition, the rule was made
available through the Internet by the Office of the Federal Register.
That rule provided for a 60-day comment period which ended May 7, 1999
(64 FR 10919). No comments were received.
After consideration of all relevant material presented, including
the Committee's recommendation, and other information, it is found that
this rule, as hereinafter set forth, 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.
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
Accordingly, the interim final rule amending 7 CFR part 989 which
was published at 64 FR 10919 on March 8, 1999, is adopted as a final
rule without change.
Dated: June 1, 1999.
Bernadine M. Baker,
Acting Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 99-14311 Filed 6-4-99; 8:45 am]
BILLING CODE 3410-02-P
