[Federal Register Volume 62, Number 134 (Monday, July 14, 1997)]
[Rules and Regulations]
[Pages 37485-37488]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-18392]
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 981
[Docket No. FV97-981-3 IFR]
Almonds Grown in California; Revision to Requirements Regarding
Inedible Almonds
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim final rule with request for comments.
-----------------------------------------------------------------------
SUMMARY: This document revises the administrative rules and regulations
of the California almond marketing order regarding inedible almonds.
Under the terms of the order, handlers are required to obtain
inspection on almonds received from growers to determine the percent of
inedible almonds in each lot of any variety. Handlers are then required
to dispose of a quantity of almonds in excess of 1 percent of the
weight of almonds reported as inedible to non-human consumption
outlets. This rule allows alternative methods of determining handlers'
inedible disposition obligations in such instances. It will add
flexibility to the order's rules and regulations and will help ensure
that the integrity of the quality control provisions is maintained.
DATES: Effective on August 1, 1997. Comments received by August 13,
1997 will be considered prior to issuance of a final rule.
ADDRESSES: Interested persons are invited to submit written comments
concerning this rule. 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; Fax: (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: Maureen Pello, Marketing Specialist,
or Martin Engeler, Assistant Regional Manager, California Marketing
Field Office, Marketing Order Administration Branch, F&V, AMS, USDA,
2202 Monterey Street, suite 102B, Fresno, California 93721; telephone:
(209) 487-5901, Fax: (209) 487-5906. Small businesses may request
information on compliance with this regulation by contacting Jay
Guerber, Marketing Order Administration Branch, F&V, AMS, USDA, room
2525-S, P.O. Box 96456, Washington, DC 20090-6456; telephone: (202)
720-2491, Fax: (202) 720-5698.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing
Agreement and Order No. 981, both as amended (7 CFR part 981),
regulating the handling
[[Page 37486]]
of almonds grown in California, hereinafter referred to as the
``order.'' The marketing agreement and order are 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. This rule is not intended to have retroactive effect.
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 to review the Secretary's
ruling on the petition, provided an action is filed not later than 20
days after date of the entry of the ruling.
This rule revises the administrative rules and regulations of the
California almond order regarding inedible almonds. Under the terms of
the order, handlers are required to obtain inspection on almonds
received from growers to determine the percent of inedible almonds in
each lot of any variety. Handlers are then required to dispose of a
quantity of almonds in excess of 1 percent of the weight of almonds
reported as inedible to non-human consumption outlets. The quantity of
almonds required to be disposed of is the handler's inedible
disposition obligation. However, there are times when an incoming
inspection sample may not be drawn, may be lost, or the size of the
sample drawn may be too small for an inedible weight to be determined.
This rule provides handlers with the opportunity in such cases to
substantiate to the Board the weight of almonds received, the edible
and inedible kernel weights, and the adjusted kernel weight. Such
information can often be obtained from an outgoing inspection
certificate. The inedible disposition obligation may then be based on
that information. If a handler is only able to substantiate the
approximate weight of almonds received, an inedible disposition
obligation of 10 percent of the weight of almonds received in that
particular lot may be applied, upon agreement between Board staff and
the handler. The appropriate weight received can often be obtained from
a weight masters certificate. In adding these procedures to the text of
the rules and regulations, this rule will add flexibility to the rules
and regulations and will help ensure that the integrity of the quality
control provisions of the order is maintained. This change was
unanimously recommended by the Board.
Section 981.42(a) of the almond order requires handlers to obtain
incoming inspection on almonds received from growers to determine the
percent of inedible kernels in any variety. Handlers are required to
report such inedible determination for each lot received to the Board.
Inedible kernels are those kernels, pieces, or particles of kernels
with any defect scored as serious damage (excluding the presence of web
and frass), or damage due to mold, gum, shrivel, or brown spot, as
defined in the United States Standards for Grades of Shelled Almonds,
or which have embedded dirt not easily removed by washing. Edible
kernels are kernels, pieces, or particles of almond kernels that are
not inedible. Section 981.42(a) also provides authority for the Board,
with the approval of the Secretary, to establish rules and regulations
necessary and incidental to the administration of the order's incoming
quality control provisions.
Section 981.442(a)(4) of the order's administrative rules and
regulations specifies that the weight of inedible kernels in each lot
of any variety of almonds in excess of 1 percent of the kernel weight
received by a handler shall constitute such handler's inedible
disposition obligation. Inedible kernels accumulated in the course of
processing must be disposed of in non-human consumption outlets such as
Board approved oil crushers, feed manufacturers, and animal feeders.
Requiring handlers to meet this obligation helps to ensure that each
handler's outgoing shipments of almonds are relatively free of almonds
with serious damage, and the number of kernels with minor damage should
be minimal. Thus, the intent of the order's inedible program is to help
ensure that only quality almonds are ultimately shipped into market
channels.
At a meeting on May 9, 1997, the Board recommended that
Sec. 981.442 of the order's administrative rules and regulations be
revised to allow alternative methods of establishing handlers' inedible
disposition obligations in certain instances. The Board recommended
that this rule be in effect for the beginning of the 1997-98 crop year
which begins on August 1, 1997.
Discussions at this and prior meetings of the Board's Quality
Control Committee indicated that a considerable amount of activity
occurs at handlers' facilities when handlers are receiving almonds from
growers. For example, handlers may be receiving, moving, processing,
and shipping several lots of almonds at a rapid pace. During this time,
incoming inspection for some lots of almonds may be inadvertently
missed due to the high level of activity. In addition, samples are
occasionally lost or the size of the samples drawn are too small for
kernel weight determinations. Board staff commented that there are
instances where handlers notice that an error was made and contact the
Board's staff in an effort to comply with the order's rules and
regulations. Board staff also indicated that this is not a large
problem but that it does occur occasionally.
Thus, the Board recommended that for any lot of almonds where a
sample is not drawn, is lost, or is too small for the kernel weight to
be determined, the handler may establish and substantiate, to the
Board's satisfaction, the weight of the almonds received, the edible
and inedible kernel weights, and the adjusted kernel weight. Adjusted
kernel weight means the actual gross weight of any lot of almonds less
the following: the weight of containers; moisture of kernels in excess
of 5 percent; shells (if applicable); processing loss of 1 percent for
deliveries with less than 95 percent kernels; and trash or other
foreign material. In such instances, the handler's inedible disposition
obligation will be based on that information. If the handler is only
able to establish and substantiate the approximate received weight, an
inedible disposition obligation of 10 percent of such received weight
may be applied, upon agreement between Board staff and the handler.
This change will add flexibility to the order and will help ensure
that the integrity of the order's quality control provisions is
maintained. The Board estimates that for the past 3 years, about 3.05
percent of the almonds received by handlers from growers were inedible.
Thus, the Board's recommended 10 percent disposition obligation for
lots of almonds where an inedible weight was
[[Page 37487]]
not determined exceeds historical averages. This should provide a
disincentive for handlers to purposely avoid inspection, while
providing handlers an opportunity to maintain compliance with order
requirements.
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 97 handlers of California almonds who are
subject to regulation under the marketing order and approximately 7,000
almond producers in the regulated area. 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.
Currently, about 58 percent of the handlers ship under $5,000,000
worth of almonds and 42 percent ship over $5,000,000 worth on an annual
basis. In addition, based on acreage, production, and grower prices
reported by the National Agricultural Statistics Service, and the total
number of almond growers, the average annual grower revenue is
approximately $156,000. In view of the foregoing, it can be concluded
that the majority of handlers and producers of California almonds may
be classified as small entities.
This rule revises the administrative rules and regulations of the
almond order regarding inedible almonds. Section 981.42(a) of the order
requires handlers to obtain inspection on almonds received from growers
to determine the percent of inedible almonds in each lot of any
variety. Section 981.42(a) also provides authority for the Board, with
the approval of the Secretary, to establish rules and regulations
necessary and incidental to the administration of the order's incoming
quality control provisions.
Under Sec. 981.442(a)(4) of the order's administrative rules and
regulations, handlers are required to dispose of a quantity of almonds
in excess of 1 percent of the weight of almonds reported as inedible in
non-human consumption outlets. However, there are times when a sample
may not be drawn, may be lost, or the size of the sample drawn may be
too small for an inedible kernel weight to be determined. This rule
revises Sec. 981.442(a)(4) to allow a handler's inedible disposition
obligation in such cases to be based on documentation provided by the
handler, to the satisfaction of Board staff. If sufficient
documentation is not available, an inedible disposition obligation of
10 percent of the received weight may be applied. This change adds
flexibility to the regulations while maintaining the integrity of the
order's quality control provisions. This rule was unanimously
recommended by the Board and will be in effect beginning with the 1997-
98 season which begins on August 1, 1997.
Regarding the impact of this rule on handlers and growers in terms
of cost, providing handlers with the option of accepting an inedible
disposition obligation based on appropriate documentation or accepting
an obligation of 10 percent for lots where a sample was not drawn, was
lost, or was too small for an inedible weight to be determined are
options that will be made available to all handlers, both large and
small. Handlers receive lower prices for inedible almonds that must be
sold in non-human consumption outlets as opposed to edible almonds that
can be sold in normal market channels. For example, handlers receive
about 28-35 cents per pound for almonds used for crushing into oil and
about 2-3 cents per pound for almonds used for animal feed. Price
levels for sales of edible almonds to normal market outlets vary
significantly from year to year depending on available supplies and
market conditions and can range from $1.00-$3.00 per pound. If inedible
almonds were allowed to be sold in normal market channels, consumer and
buyer satisfaction would likely decrease because poor quality almonds
were being made available. Buyers would likely purchase fewer almonds
and demand for almonds would thus decline, which would in turn decrease
returns to growers and handlers, both large and small.
Thus, this rule will add flexibility to the rules and regulations
and help ensure that the integrity of the order's quality control
provisions is maintained. As previously mentioned, the Board estimates
that for the past 3 years, about 3.05 percent of the almonds received
by handlers from growers were inedible. The Board's recommended 10
percent disposition obligation for lots where an inedible weight was
not determined exceeds historical averages. This rule also provides
handlers an opportunity to maintain compliance with order requirements.
An alternative to this change would be to not incorporate these
options into the order's administrative rules and regulations. Thus, in
cases where an inedible disposition obligation was inadvertently not
obtained, such handlers would be considered to be out of compliance
with order requirements and subject to penalties under the Act.
However, the Board determined that it would be in the industry's best
interest to provide alternative methods of determining inedible
disposition obligations. This will allow handlers additional options in
the rules and regulations to remain in compliance with order
requirements and the integrity of the order's incoming quality control
program will still be maintained.
This rule will not impose any additional reporting or recordkeeping
requirements on either small or large almond handlers. As with all
Federal marketing order programs, reports and forms are periodically
reviewed to reduce information requirements and duplication by industry
and public sectors. In accordance with the Paperwork Reduction Act of
1995 (44 U.S.C. Chapter 35), the information collection requirements
that are contained in this rule have been previously approved by the
Office of Management and Budget (OMB) and have been assigned OMB No.
0581-0071. In addition, the Department has not identified any relevant
Federal rules that duplicate, overlap or conflict with this rule.
Further, the Board's meeting was widely publicized throughout the
almond industry and all interested persons were invited to attend the
meeting and participate in Board deliberations. Like all Board
meetings, the May 9, 1997, meeting was a public meeting and all
entities, both large and small, were able to express their views on
this issue.
Also, the Board has a number of appointed committees to review
certain issues and make recommendations to the Board. The Board's
Quality Control Committee met on April 23, 1997, and discussed this
inedible disposition obligation issue in detail. That meeting was also
a public meeting and both large and small entities were able to
participate and express their views. Finally, interested persons are
invited to submit information on the regulatory and information impacts
of this action on small businesses.
[[Page 37488]]
After consideration of all relevant material presented, including
the Board'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.
This rule invites comments on revising the requirements regarding
inedible almonds currently prescribed under the California almond
marketing order. Any comments received will be considered prior to
finalization of this rule.
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) This rule provides for alternative methods of determining
handlers' inedible disposition obligations; (2) this rule should be in
effect at the beginning of the crop year which begins on August 1,
1997, so that all handlers are provided the same opportunities under
the order; (3) this change was unanimously recommended by the Board at
a public meeting and interested parties had an opportunity to provide
input; and (4) this rule provides for a 30-day comment period and any
comments received will be considered prior to finalization of this
rule.
List of Subjects in 7 CFR Part 981
Almonds, Marketing agreements, Nuts, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, 7 CFR part 981 is
amended as follows:
PART 981--ALMONDS GROWN IN CALIFORNIA
1. The authority citation for 7 CFR part 981 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. In Sec. 981.442, paragraph (a)(4) is amended by designating the
existing text as paragraph (i) and adding a new paragraph (ii) to read
as follows:
Sec. 981.442 Quality Control.
(a) * * *
(4) * * *
(ii) If a sufficient sample is not available for any lot of
almonds, the handler may establish and substantiate, to the
satisfaction of the Board, the received weight, the edible and inedible
kernel weights, and the adjusted kernel weight by providing sufficient
information as the Board may prescribe. If the handler is only able to
establish and substantiate the approximate received weight, an inedible
disposition obligation of 10 percent of such received weight may be
applied, upon agreement between the Board and the handler.
* * * * *
Dated: July 8, 1997.
Sharon Bomer Lauritsen,
Acting Director, Fruit and Vegetable Division.
[FR Doc. 97-18392 Filed 7-11-97; 8:45 am]
BILLING CODE 3410-02-P
