Raisins Produced From Grapes Grown in California; Removal of an Exemption for Raisins Produced in Southern California and Exported to Mexico

DEPARTMENT OF AGRICULTURE

7 CFR Part 989

[Docket No. FV94-989-3FR]

Raisins Produced From Grapes Grown in California; Removal of an

Exemption for Raisins Produced in Southern California and Exported to

Mexico

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This final rule revises the administrative rules and

regulations established under the Federal marketing order for raisins

produced from grapes grown in California. It removes a provision that

currently exempts raisins produced from grapes dried on the vine in

southern California and exported to Mexico from all marketing order

requirements. This rule is based on a unanimous recommendation of the

Raisin Administrative Committee (Committee), which is responsible for

local administration of the order. Elimination of the exemption will

facilitate administration and improve enforcement efforts.

EFFECTIVE DATE: August 26, 1994.

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 FAX (209) 487-5906; or

Mark A. Slupek, Marketing Specialist, Marketing Order Administration

Branch, F&V, AMS, USDA, Room 2523-S, P.O. Box 96456, Washington, DC

20090-6456; Telephone: (202) 205-2830, or FAX (202) 720-5698.

SUPPLEMENTARY INFORMATION: This final 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. 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 12778, Civil

Justice Reform. It is not intended to have retroactive effect. This

action 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 8c(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 exempted

therefrom. A handler is afforded the opportunity for a hearing on the

petition. After a 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 a bill in equity is filed

not later than 20 days after the date of entry of the ruling.

Pursuant to requirements set forth in the Regulatory Flexibility

Act (RFA), the Administrator of the Agricultural Marketing Service

(AMS) has considered the economic impact of this action on small

entities.

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 5,000 producers in the regulated area. Small agricultural

producers have been defined by the Small Business Administration [13

CFR 121.601] as those having annual receipts of less than $500,000, and

small agricultural service firms are defined as those whose annual

receipts are less than $5,000,000. A majority of producers and a

minority of handlers of California raisins may be classified as small

entities.

This final rule removes a provision that exempts raisins produced

from grapes dried on the vine in southern California and exported to

Mexico in natural condition from all marketing order requirements. It

is based on a unanimous recommendation of the Committee and other

available information.

Section 989.60 of the order provides that the Committee may

establish, with the approval of the Secretary, rules and procedures to

exempt from regulations raisins produced in southern California (i.e.,

the counties of Riverside, Imperial, San Bernardino, Ventura, Orange,

Los Angeles, and San Diego) and disposed of for distillation, livestock

feed, or by export in natural condition to Mexico.

Paragraph (b) of section 989.160 of Subpart--Administrative Rules

and Regulations (7 CFR 989.102-989.176) currently exempts raisins

produced from grapes dried on the vine in those southern California

counties, which are disposed of for use in distillation, livestock

feed, or by export in natural condition to Mexico, from all marketing

order requirements. This final rule eliminates the exemption that

applies to those raisins exported in natural condition to Mexico.

When that exemption provision was established in the early 1970's,

the quantities of raisins exported to Mexico were relatively small and

were of off-grade quality. It was determined at that time that the

export exemption would not interfere with order regulations or with

accomplishing program objectives.

Diminished demand in recent years for off-grade raisins and raisin

residual material for distillation in California has made export in

natural condition to Mexico a relatively lucrative market. The

Committee has confirmed reports that large volumes of poor quality

raisins, including lots as large as forty to fifty thousand pounds,

have been exported into Mexico from southern California and other areas

of California. This is a significant departure from the situation which

existed when the exemption was first implemented. Raisins from areas

which are not exempt from the provisions of the order appear to be

passing into Mexico in violation of the regulations.

The North American Free Trade Agreement (NAFTA) has effected the

removal of import duties and license requirements, opening the Mexican

market to raisins which meet the quality requirements of the order.

Hence, there is now an opportunity to build an export market in Mexico

for high quality raisins. The Committee believes that all raisins

eligible for export to Mexico need to be subject to the quality

requirements of the order. The Committee also believes that the

regulation of such raisins is essential to meeting program objectives

and improving compliance efforts.

On the basis of this information, the Committee, on April 16, 1994,

unanimously recommended the removal of the exemption that applies to

raisins produced from grapes dried on the vine in southern California

and exported in natural condition to Mexico.

Notice of this action was published in the Federal Register on July

15, 1994 [59 FR 36093]. The proposed rule provided a 15-day comment

period which ended August 1, 1994. No comments were received.

Based on the above, the Administrator of the AMS has determined

that this final rule will not have a significant economic impact on a

substantial number of small entities.

After consideration of all relevant information presented,

including the Committee's unanimous recommendation and other

information, it is found that the issuance of this final rule, will

tend to effectuate the declared policy of the Act.

Pursuant to 5 U.S.C. 553, it is also found and determined that good

cause exists for not postponing the effective date of this final rule

until 30 days after publication in the Federal Register because: (1)

The 1994-95 crop year began August 1, 1994, and the final rule should

cover as much of the crop year as possible to accomplish program

objectives and improve compliance efforts; (2) handlers are aware of

this action which was unanimously recommended by the Committee at a

public meeting; and (3) the proposed rule provided a 15-day comment

period, and no comments were received.

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 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 989.160 is amended by revising paragraph (b) to read as

follows:

Sec. 989.160 Exemptions.

* * * * *

(b) Disposition of raisins produced in Southern California. Raisins

produced from grapes dried on the vine in the counties of Riverside,

Imperial, San Bernardino, Ventura, Orange, Los Angeles, and San Diego,

which are disposed of for use in distillation or livestock feed, shall

be exempt from the provisions of this part.

Dated: August 22, 1994.

Eric M. Forman,

Deputy Director, Fruit and Vegetable Division.

[FR Doc. 94-21082 Filed 8-25-94; 8:45 am]

BILLING CODE 3410-02-P