Raisins Produced From Grapes Grown In California; Final Free and Reserve Percentages for the 1994-95 Crop Year for Natural (sun-dried) Seedless Raisins

SUMMARY: The Department of Agriculture (Department) is adopting,

without change, the provisions of an interim final rule which

established final free and reserve percentages for 1994-95 crop Natural

(sun-dried) Seedless raisins. The percentages are 77 percent free and

23 percent reserve. These percentages are intended to stabilize

supplies and prices and to help counter the destabilizing effects of

the burdensome oversupply situation facing the raisin industry. This

rule was recommended by the Raisin Administrative Committee

(Committee), the body which locally administers the marketing order.

EFFECTIVE DATE: August 18, 1995.

FOR FURTHER INFORMATION CONTACT: Richard 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 Mark A. Slupek, Marketing

Specialist, Marketing Order Administration Branch, Fruit and Vegetable

Division, AMS, USDA, room 2523-S, P.O. Box 96456, Washington, DC 20090-

6456; telephone: 202-205-2830.

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, 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 of Agriculture (Department) is issuing this rule in

conformance with Executive Order 12866.

This final rule has been reviewed under Executive Order 12778,

Civil Justice Reform. Under the marketing order provisions now in

effect, final free and reserve percentages may be established for

raisins acquired by handlers during the crop year. This action

finalizes final free and reserve percentages for Natural (sun-dried)

Seedless raisins for the 1994-95 crop year, beginning August 1, 1994,

through July 31, 1995. This final 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 requesting a modification of the order or to be exempt

therefrom. Such 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/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 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 4,500 producers in the regulated area. Small agricultural

service firms have been defined by the Small Business Administration

(13 CFR 121.601) as those whose annual receipts (from all sources) are

less than $5,000,000, and small agricultural producers are defined as

those having annual receipts of less than $500,000. No more than eight

handlers, and a majority of producers, of California raisins may be

classified as small entities. Twelve of the 20 handlers subject to

regulation have annual sales estimated to be at least $5,000,000, and

the remaining eight handlers have sales less than $5,000,000, excluding

receipts from any other sources.

An interim final rule was published in the Federal Register on May

17, 1995 (60 FR 26344), with an effective date of May 17, 1995. That

rule established final free and reserve percentages for Natural (sun-

dried) Seedless raisins for the 1994-95 crop year. The percentages were

established in a new section 989.248 of the rules and regulations in

effect under the marketing order. That rule provided a 30-day comment

period which ended June 16, 1995. No comments were received.

The order prescribes procedures for computing trade demands and

preliminary and final percentages that establish the amount of raisins

that can be marketed throughout the season. The regulations apply to

all handlers of California raisins. Raisins in the free percentage

category may be shipped immediately to any market, while reserve

raisins must be held by handlers in a reserve pool for the account of

the Committee. Under the order, reserve raisins may be: Sold at a later

date by the Committee to handlers for free use; used in diversion

programs; exported to authorized countries; carried over as a hedge

against a short crop the following year; or disposed of in other

outlets noncompetitive with those for free tonnage raisins.

[[Page 36952]]

While this rule continues in effect restrictions limiting the

amount of Natural (sun-dried) Seedless raisins that enter domestic

markets, final free and reserve percentages are intended to lessen the

impact of the oversupply situation facing the industry and promote

stronger marketing conditions, thus stabilizing prices and supplies and

improving grower returns. In addition to the quantity of raisins

released under the preliminary percentages and the final percentages,

the order specifies methods to make available additional raisins to

handlers by requiring sales of reserve pool raisins for use as free

tonnage raisins under ``10 plus 10'' offers, and authorizing sales of

reserve raisins under certain conditions.

The Department's ``Guidelines for Fruit, Vegetable, and Specialty

Crop Marketing Orders'' specifies that 110 percent of recent years'

sales should be made available to primary markets each season before

recommendations for volume regulation are approved. This goal is met by

the establishment of a final percentage which releases 100 percent of

the computed trade demand and the additional release of reserve raisins

to handlers under ``10 plus 10'' offers. The ``10 plus 10'' offers are

two simultaneous offers of reserve pool raisins which are made

available to handlers each season. For each such offer, a quantity of

raisins equal to 10 percent of the prior year's shipments is made

available for free use.

Pursuant to section 989.54(a) of the order, the Committee met on

August 15, 1994, 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. The trade demand is 90

percent of the prior year's shipments of free tonnage and reserve

tonnage raisins sold for free use for each varietal type into all

market outlets, adjusted by subtracting the carryin of each varietal

type on August 1 of the current crop year and by adding to the trade

demand the desirable carryout for each varietal type at the end of that

crop year. As specified in section 989.154, the desirable carryout for

each varietal type shall be equal to the shipments of free tonnage

raisins of the prior crop year during the months of August, September,

and one half of October. If the prior year's shipments are limited

because of crop conditions, the total shipments during that period of

time during one of the three years preceding the prior crop year may be

used. In accordance with these provisions, the Committee computed and

announced a 1994-95 trade demand of 294,422 tons for Natural (sun-

dried) Seedless raisins.

As required under section 989.54(b) of the order, the Committee met

on October 5, 1994, and computed and announced a preliminary crop

estimate and preliminary free and reserve percentages for Natural (sun-

dried) Seedless raisins which released 65 percent of the trade demand

since the field price had not been established. The preliminary crop

estimate and preliminary free and reserve percentages were as follows:

404,677 tons, and 47 percent free and 53 percent reserve. The Committee

authorized the Committee staff to modify the preliminary percentages to

release 85 percent of the trade demand when the field price was

established. The preliminary percentages for Natural (sun-dried)

Seedless raisins were adjusted soon thereafter to 62 percent free and

38 percent reserve.

Also at that meeting, the Committee computed and announced

preliminary crop estimates and preliminary free and reserve percentages

for Dipped Seedless, Oleate and Related Seedless, Golden Seedless,

Zante Currant, Sultana, Muscat, Monukka, and Other Seedless raisins. On

January 12, 1995, the Committee determined that volume control

percentages only were warranted for Zante Currant, Other Seedless, and

Natural (sun-dried) Seedless raisins, and it recommended final

percentages of 40 percent free and 60 percent reserve for both Zante

Currant and Other Seedless raisins. It determined that the supplies of

the other varietal types would be less than or close enough to the

computed trade demands for each of these varietals. In view of these

factors, volume control percentages would not be necessary to maintain

market stability for the other varietal types.

Pursuant to section 989.54(c), the Committee may adopt interim free

and reserve percentages. Interim percentages may release less than the

computed trade demand for each varietal type. Interim percentages for

Natural (sun-dried) Seedless raisins of 75 percent free and 25 percent

reserve were computed and announced on January 15, 1995. That action

released most, but not all, of the computed trade demand for Natural

(sun-dried) Seedless raisins.

Under section 989.54(d) of the order, the Committee is required to

recommend to the Secretary, no later than February 15 of each crop

year, final free and reserve percentages which, when applied to the

final production estimate of a varietal type, will tend to release the

full trade demand for any varietal type.

The Committee's final estimate of 1994-95 production of Natural

(sun-dried) Seedless raisins is 379,972 tons. Dividing the computed

trade demand of 294,422 tons by the final estimate of production

results in a final free percentage of 77 percent and a final reserve

percentage of 23 percent.

The free and reserve percentages established by the interim final

rule, and continued in effect, without change, by this rule, apply

uniformly to all handlers in the industry, whether small or large, and

there are no known additional costs incurred by small handlers.

Although raisin markets are limited, they are available to all

handlers, regardless of size. The stabilizing effects of the

percentages impact both small and large handlers positively by helping

them maintain and expand markets.

Based on available information, the Administrator of the AMS has

determined that the issuance of 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 recommendations and other information, it is

found that finalizing the interim final rule, without change, as

published in the Federal Register on May 17, 1995 (60 FR 26344) 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 as follows:

PART 989--RAISINS PRODUCED FROM GRAPES GROWN IN CALIFORNIA

Accordingly, the interim final rule adding section 989.248, which

was published at 60 FR 26344 on May 17, 1995, is adopted as a final

rule without change.

Dated: July 13, 1995.

Sharon Bomer Lauritsen,

Deputy Director, Fruit and Vegetable Division.

[FR Doc. 95-17740 Filed 7-18-95; 8:45 am]

BILLING CODE 3410-02-P