[Federal Register Volume 63, Number 150 (Wednesday, August 5, 1998)]
[Rules and Regulations]
[Pages 41709-41711]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-20913]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 981
[Docket No. FV98-981-1 FR]
Almonds Grown in California; Revision of Requirements Regarding
Quality Control Program
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: This rule revises the administrative rules and regulations of
the California almond marketing order (order) pertaining to the quality
control program. The order regulates the handling of almonds grown in
California, and is administered locally by the Almond Board of
California (Board). 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 accepted users
of such product. Accepted users are approved annually by the Board.
This rule clarifies conditions upon which accepted users' status may be
denied or revoked by the Board. This rule will help to ensure that
inedible almonds are removed from human consumption channels, thereby
maintaining the integrity of the quality control provisions of the
order.
EFFECTIVE DATE: This final rule becomes effective August 6, 1998.
FOR FURTHER INFORMATION CONTACT: 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; 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, Fax: (202) 205-6632. 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, PO Box 96456,
Washington, DC 20090-6456; telephone: (202) 720-2491, Fax: (202) 205-
6632.
SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing
Order No. 981, as amended (7 CFR part 981), regulating the handling of
almonds grown in California, hereinafter referred to as the ``order.''
The marketing 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. 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 final rule revises the administrative rules and regulations
pertaining to a quality control program under the California almond
order. This rule was unanimously recommended by the Board, and
clarifies conditions under which the Board may deny or revoke the
status of accepted users of inedible almonds.
Section 981.42 of the order provides authority for a quality
control program. Section 981.42(a) requires handlers to obtain incoming
inspection on almonds received from growers to determine the percent of
inedible kernels in each lot of any variety. Handlers are required to
report such inedible determination for each lot received to the Board.
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 quality control
provisions.
Section 981.442 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. Handlers are required to deliver inedible kernels
accumulated in the course of processing to Board-approved accepted
users of such product in order to satisfy the disposition obligation.
Accepted users then dispose of inedible kernels to non-human
consumption outlets. Because inedible kernels are considered unfit for
human consumption, 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.
Accepted users of inedible almonds file an application with the
Board specifying certain terms and conditions with which they will
voluntarily abide. The application also indicates they will dispose of
the inedible almonds received from handlers in one or more of the
following manners: crushing into oil; manufacturing into animal feed;
or feeding directly to animals. The Board staff reviews and approves
accepted user applications on an annual basis.
Section 981.442(a)(7) of the rules and regulations lists
eligibility criteria for accepted users. These criteria are applied by
the Board when reviewing and approving accepted users. However, the
regulations do not specifically address when the Board may deny or
revoke accepted user status. Situations
[[Page 41710]]
have occurred in the past wherein accepted users have failed to
completely meet these conditions, and the Board could not be assured
the inedible almonds were being disposed of in non-human consumption
outlets.
The Board met on March 25, 1998, and unanimously recommended adding
language to Sec. 981.442(a)(7) of the administrative rules and
regulations stating that an accepted user's status may be denied or
revoked if the eligibility requirements are not met or if the terms and
conditions agreed to in the accepted user application are not met. The
Board recommended that this change be made effective by the beginning
of the crop year (August 1, 1998), or as soon as possible thereafter,
so that this action coincides with the approval cycle for accepted user
applications.
This change provides a clear foundation of understanding between
the Board, handlers, and accepted users. This action will assist in
maintaining the integrity of the Board's quality control program by
providing clear authority to deny or revoke accepted user status. This
will help to ensure inedible almonds are properly disposed of in non-
human consumption outlets, which is in the interest of producers,
handlers, and consumers.
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 97 handlers of California almonds who are
subject to regulation under the 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.
There are currently 23 accepted users of inedible almonds approved
by the Board. Accepted users may enter into a voluntary agreement with
the Board to function as an outlet to which handlers can ship inedible
almonds to satisfy an order obligation. While data concerning these
entities is limited, based on a review of the quantity of inedible
almonds delivered to each entity, it is believed that the majority may
be classified as small entities.
This rule revises the quality control provisions of the
administrative rules and regulations issued under the California almond
order. 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 accepted users of such
product. Accepted users are approved annually by the Board.
Section 981.442(a)(7) of the order's administrative rules and
regulations provides criteria which accepted users must meet. This rule
revises this section to specify that an accepted user's status may be
denied or revoked if the criteria are not met. This rule will help
maintain the integrity of the Board's quality control program.
This change is not expected to impact handlers, other than to
clarify to them that an accepted user's status may be denied or
revoked. Handlers are provided a listing of approved accepted users so
they know who they can deliver inedible material to and receive credit
against their obligation. In the event an application for accepted user
status is denied or an accepted user's status is revoked, handlers will
be notified by Board staff and provided an updated listing.
This rule only impacts applicants for accepted user status, or
accepted users in the sense that it clarifies that accepted user status
may be denied or revoked if the terms and conditions set forth in the
rules and regulations and the accepted user application are not met.
Accepted users are approved entities to which handlers may deliver
inedible almonds and receive credit against their inedible disposition
obligation. Accepted users voluntarily agree to meet certain terms and
conditions so the Board may be assured that inedible almonds do not
enter human consumption channels. If these dealers in inedible almonds
do not agree to the terms and conditions, they are not approved by the
Board. However, they may still operate in the business, although
handlers do not receive credit against their inedible disposition
obligation if they deliver product to such non-approved entities.
Situations have occurred in the past wherein accepted users have failed
to completely meet these conditions, and the Board could not be assured
the inedible almonds were being disposed of in non-human consumption
outlets.
One alternative to this rule would be to maintain the regulatory
language as it currently exists, in which case there would be no
clarification. Another alternative would be to specify at length all
possible reasons for denying or revoking an accepted user's status. The
first alternative fails to address the issue, and the second would
require unnecessary lengthy additions to regulatory language, and may
be incomplete.
This rule imposes no 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 sector agencies. 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 approved by the
Office of Management and Budget (OMB) and have been assigned OMB No.
0581-0071. Finally, the Department has not identified any relevant
Federal rules that duplicate, overlap or conflict with this rule.
In addition, 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 March 25, 1998, meeting was a public meeting and all
entities, both large and small, were able to express their views on
this issue. The Board itself is composed of 10 members, of which 5 are
producers and 5 are handlers.
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 February 25, 1998,
[[Page 41711]]
and discussed this issue. That meeting was also a public meeting and
both large and small entities were able to participate and express
their views.
A proposed rule concerning this action was published in the Federal
Register on June 17, 1998 (63 FR 33010). Copies of the rule were mailed
to all Board members and almond handlers. Finally, the rule was made
available through the Internet by the Office of the Federal Register. A
30-day comment period ending July 17, 1998, was provided to allow
interested persons to respond to the proposal.
One comment was received in response to the proposed rule. The
commenter, a marketing cooperative representing California almond
growers, supported the proposal. The commenter believes that denying or
revoking accepted user status is the principal method that the Board
has to ensure that only users that dispose of inedible almonds in
proper channels are approved by the Board.
After consideration of all relevant matter presented, including the
information and recommendation submitted by the Board, the comment
received, and other available information, it is hereby found that this
rule, as hereinafter set forth, will tend to effectuate the declared
policy of the Act.
It is further found that good cause exists for not postponing the
effective date of this rule until 30 days after publication in the
Federal Register (5 U.S.C. 553) because the beginning of the 1998-99
crop year is August 1, 1998, and the rule needs to be in effect as soon
as possible so this action coincides with the approval cycle for
accepted user applications. Further, handlers are aware of this rule,
which was recommended at a public meeting. Also, a 30-day comment
period was provided for in the proposed rule, and one comment was
received which supported the change.
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. Section 981.442 is amended by adding a new paragraph (a)(7)(iv)
to read as follows:
Sec. 981.442 Quality Control.
(a) * * *
(7) * * *
(iv) The Board may deny or revoke accepted user status at any time
if the applicant or accepted user fails to meet the terms and
conditions of Sec. 981.442, or if the applicant or accepted user fails
to meet the terms and conditions set forth in the accepted user
application (ABC Form 34).
* * * * *
Dated: July 30, 1998.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-20913 Filed 8-4-98; 8:45 am]
BILLING CODE 3410-02-P
