Filberts/Hazelnuts Grown in Oregon and Washington; Establishment of Interim Final and Final Free and Restricted Percentages for the 1993-94 Marketing Year

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 982

[Docket No. FV93-982-2IFR]

Filberts/Hazelnuts Grown in Oregon and Washington; Establishment

of Interim Final and Final Free and Restricted Percentages for the

1993-94 Marketing Year

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule establishes interim final and final free and

restricted percentages for domestic inshell filberts/hazelnuts for the

1993-94 marketing year under the Federal marketing order for filberts/

hazelnuts grown in Oregon and Washington. The percentages allocate the

amounts of domestically produced filberts/hazelnuts which may be

marketed in domestic, export and other outlets. The percentages are

intended to stabilize the supply of domestic inshell filberts/hazelnuts

in order to meet the limited domestic demand for such filberts/

hazelnuts and provide reasonable returns to producers. This rule was

recommended by the Filbert/Hazelnut Marketing Board (Board), which is

the agency responsible for local administration of the order.

DATES: Effective on February 25, 1994. Comments which are received by

March 28, 1994 will be considered prior to any finalization of the

interim final rule.

ADDRESSES: Interested persons are invited to submit written comments

concerning this rule to: Docket Clerk, Fruit and Vegetable Division,

AMS, USDA, P.O. Box 96456, room 2525-S, Washington, DC 20090-6456.

Three copies of all written material shall be submitted, and they will

be made available for public inspection at the office of the Docket

Clerk during regular business hours. All comments should reference the

docket number, date and page number of this issue of the Federal

Register.

FOR FURTHER INFORMATION CONTACT: Teresa Hutchinson, Marketing

Specialist, Northwest Marketing Field Office, Fruit and Vegetable

Division, AMS, USDA, 1220 SW Third Ave., room 369, Portland, OR 97204;

telephone (503) 326-2724 or Kathleen M. Finn, Marketing Specialist,

Marketing Order Administration Branch, Fruit and Vegetable Division,

AMS, USDA, room 2524-S, P.O. Box 96456, Washington, DC 20090-6456;

telephone: (202) 720-1509.

SUPPLEMENTARY INFORMATION: This interim final rule is issued under

Marketing Agreement and Order No. 982 (7 CFR part 982), both as

amended, regulating the handling of filberts/hazelnuts grown in Oregon

and Washington. This 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 interim final rule has been reviewed under Executive Order

12778, Civil Justice Reform. It is intended that this action apply to

all merchantable filberts/hazelnuts handled during the 1993-94

marketing year. The marketing year covers the period July 1, 1993

through June 30, 1994. This rule will not preempt any state or local

laws, regulations, or policies, unless they present an irreconcilable

conflict with this action.

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 a bill in equity is filed

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

Pursuant to the 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 1,000 producers of filberts/hazelnuts in

the production area and approximately 25 handlers subject to regulation

under the marketing order. 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

$3,500,000. The majority of handlers and producers of filberts/

hazelnuts may be classified as small entities.

The Board's recommendation and this interim final rule are based on

requirements specified in the order. This rule will establish the

amount of inshell filberts/hazelnuts that can be marketed in domestic

markets. The domestic outlets for this commodity are characterized by

limited demand, and the establishment of interim final and final free

and restricted percentages will benefit the industry by promoting

stronger marketing conditions and stabilizing prices and supplies, thus

improving grower returns.

The Board is required to meet prior to September 20 of each

marketing year to compute an inshell trade demand and preliminary free

and restricted percentages, if the use of volume regulation is

recommended during the season. The order prescribes formulas for

computing the inshell trade demand, as well as preliminary, interim

final, and final percentages. The inshell trade demand establishes the

amount of inshell filberts/hazelnuts the market can utilize throughout

the season, and the percentages release the volume of filberts/

hazelnuts necessary to meet the inshell trade demand. The preliminary

percentages provide for the release of 80 percent of the inshell trade

demand. The interim final percentages release 100 percent of the

inshell trade demand. The inshell trade demand equals the average of

the preceding three ``normal'' years' trade acquisitions of inshell

filberts/hazelnuts, rounded to the nearest whole number. The Board may

increase such estimate by no more than 25 percent, if market conditions

warrant an increase. The final free and restricted percentages release

an additional 15 percent of the average of the preceding three years'

trade acquisitions of inshell filberts/hazelnuts for desirable

carryout.

The preliminary free and restricted percentages make available

portions of the filbert/hazelnut crop which may be marketed in domestic

inshell markets (free) and exported, shelled, or otherwise disposed of

(restricted) early in the 1993-94 season. The preliminary free

percentage is expressed as a percentage of the total supply subject to

regulation and is based on preliminary crop estimates. The majority of

domestic inshell filberts/hazelnuts are marketed in October, November,

and December. By November, the marketing season is well under way.

At its August 26, 1993, meeting, the Board announced preliminary

free and restricted percentages of 7 percent and 93 percent,

respectively, to release 80 percent of the inshell trade demand. The

purpose of releasing only 80 percent of the inshell trade demand under

the preliminary percentage is to guard against underestimates of crop

size. The preliminary restricted percentage is 100 percent minus the

free percentage.

On or before November 15, the Board must meet again to recommend

interim final percentages and final percentages. The Board uses current

crop estimates to calculate the interim final and final percentages.

The interim final percentages are calculated in the same way as the

preliminary percentages and release 100 percent of the inshell trade

demand previously computed by the Board for the marketing year. Final

free and restricted percentages release an additional 15 percent of the

average of the preceding three years' trade acquisitions to ensure an

adequate carryover into the following season. The final free and

restricted percentages must be effective at least 30 days prior to the

end of the marketing year (July 1 through June 30), or earlier, if

recommended by the Board and approved by the Secretary. In addition,

revisions in the marketing policy can be made until February 15 of each

marketing year.

In accordance with order provisions, the Board met on November 10,

1993, reviewed and approved an amended marketing policy and recommended

the establishment of interim final and final free and restricted

percentages. Interim final percentages were recommended at 12 percent

free and 88 percent restricted, and final free and restricted

percentages were recommended at 13 percent and 87 percent. The interim

final percentages make an additional 807 tons of product available for

the domestic inshell market. The interim final marketing percentages

are based on the industry's final production estimates and release

3,903 tons to the domestic inshell market from the 1993 crop. The final

marketing percentages release an additional 605 tons from the 1993 crop

for domestic use. Thus, a total of 4,508 tons of product will be

available from the 1993 crop for domestic use when the final

percentages are established. The Oregon Agricultural Statistics Service

provided an early estimate of 39,000 tons total production for the

Oregon and Washington area. However, a handler survey conducted by the

Board provided a more current estimate of 37,700 tons total production

for the area. Therefore, the Board voted to unanimously accept the more

current estimate of 37,700 tons.

Although the crop is large, the Board determined that the inshell

domestic market conditions will allow more product without depressing

the market and recommended immediate release of the additional 15

percent (the final percentages). The Board believes that the immediate

release of the final percentages will benefit the industry with

increased returns to growers and more product available for consumers.

The marketing policy of the marketing order states that the final

percentages must be effective at least 30 days prior to the end of the

marketing year, or earlier. The Board has recommended immediate release

of the final percentages, in accordance with the authority of the

marketing policy. The marketing policy also requires that procedurally,

the Board recommend interim final and final percentages. Therefore, the

interim final percentages have been established even though they will

not be utilized this marketing season.

The marketing percentages are based on the Board's production

estimates and the following supply and demand information for the 1993-

94 marketing year:

------------------------------------------------------------------------

Tons

------------------------------------------------------------------------

Inshell Supply

(1) Total production (Filbert/Hazelnut Marketing Board handler

survey estimate).............................................. 37,700

(2) Less substandard, farm use (disappearance)................. 2,700

(3) Merchantable production (the Board's adjusted crop

estimate)..................................................... 35,000

(4) Plus undeclared carryin as of July 1, 1993, subject to

regulation.................................................... 338

(5) Supply subject to regulation (Item 3 plus Item 4)..........

35,338

Inshell Trade Demand

(6) Average trade acquisitions of inshell filberts for three

prior years................................................... 4,033

(7) Increase to encourage increased sales (20 percent)......... 807

(8) Less declared carryin as of July 1, 1993, not subject to

regulation.................................................... 937

(9) Adjusted Inshell Trade Demand.............................. 3,903

(10) 15 percent of the average trade acquisitions of inshell

filberts for three prior years (Item 6)....................... 605

(11) Adjusted Inshell Trade Demand plus 15 percent (Item 9 plus

Item 10)...................................................... 4,508

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Percentages Free Restricted

(12) Interim final percentages (Item 9 divided by

Item 5) x 100................................... 11 89

(13) Final percentages (Item 11 divided by Item 5)

x 100............................................ 13 87

In addition to complying with the provisions of the marketing

order, the Board also considers the Department's 1982 ``Guidelines for

Fruit, Vegetable, and Specialty Crop Marketing Orders'' (Guidelines)

when making its computations in the marketing policy. This volume

control regulation provides a method to collectively limit the supply

of inshell filberts/hazelnuts available for sale in domestic markets.

The Guidelines provide that this primary market have available a

quantity equal to 110 percent of recent years' sales in those outlets

before secondary market allocations are approved. This provides for

plentiful supplies for consumers and for market expansion while

retaining the mechanism for dealing with oversupply situations. An

additional increase of 20 percent (807 tons) has been included in the

calculations used in determining the inshell trade demand. The

established final percentages, will make available 4,508 tons from the

1993 crop plus 937 tons of declared carryin which is 135 percent of

prior years' sales, thus exceeding the goal of the Guidelines.

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

that this interim final rule will not have a significant economic

impact on a substantial number of small entities. Written comments,

timely received in response to this action, will be considered before

finalization of this rule.

After consideration of all available information, it is found that

the establishment of interim final and final free and restricted

percentages, 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 action until 30 days after publication in the

Federal Register because: (1) The 1993-94 marketing year began July 1,

1993, and the percentages established herein apply to all merchantable

filberts/hazelnuts handled from the beginning of the crop year; (2)

handlers are aware of this action, which was recommended at an open

Board meeting, and need no additional time to comply with these

percentages which release more filberts/hazelnuts than the preliminary

percentages; and (3) interested persons are provided a 30-day comment

period in which to respond. All comments timely received will be

considered prior to finalization of this action.

List of Subjects in 7 CFR Part 982

Filberts, Hazelnuts, Marketing agreements, Nuts, Reporting and

recordkeeping requirements.

For the reasons set forth in the preamble, 7 CFR part 982 is

amended as follows:

PART 982--FILBERTS/HAZELNUTS GROWN IN OREGON AND WASHINGTON

1. The authority citation for 7 CFR part 982 continues to read as

follows:

Authority: 7 U.S.C. 601-674.

2. Section 982.242 is added to read as follows:

(Note: The following section will not be published in the Code of

Federal Regulations.)

Section 982.242 Free and restricted percentages--1993-94 marketing

year.

(a) The interim final free and restricted percentages for

merchantable filberts/hazelnuts for the 1993-94 marketing year shall be

11 and 89 percent, respectively.

(b) The final free and restricted percentages for merchantable

filberts/hazelnuts for the 1993-94 marketing year shall be 13 and 87

percent, respectively.

Dated: February 18, 1994.

Robert C. Keeney,

Deputy Director, Fruit and Vegetable Division.

[FR Doc. 94-4234 Filed 2-24-94; 8:45 am]

BILLING CODE 3410-02-P