Filberts/Hazelnuts Grown in Oregon and Washington; Establishment of Interim and Final Free and Restricted Percentages for the 1995-96 Marketing Year

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 982

[Docket No. FV95-982-2IFR]

Filberts/Hazelnuts Grown in Oregon and Washington; Establishment

of Interim and Final Free and Restricted Percentages for the 1995-96

Marketing Year

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This interim final rule establishes interim and final free and

restricted percentages for domestic inshell filberts/hazelnuts for the

1995-96 marketing year under the Federal marketing order for filberts/

hazelnuts grown in Oregon and Washington. The percentages allocate the

quantity of domestically produced filberts/hazelnuts which may be

marketed in the domestic inshell market. The percentages are intended

to stabilize the supply of domestic inshell filberts/hazelnuts to meet

the limited domestic demand for such filberts/hazelnuts and provide

reasonable returns to producers. This rule was recommended unanimously

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

responsible for local administration of the order.

DATES: Effective January 29, 1996. Comments which are received by

February 28, 1996 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, Room 2525-S, P.O. Box 96456, 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 L. Hutchinson, Marketing

Specialist, Northwest Marketing Field Office, Fruit and Vegetable

Division, Agricultural Marketing Service, USDA, 1220 SW Third Ave.,

Room 369, Portland, OR 97204; telephone (503) 326-2725 or Mark A.

Slupek, Marketing Specialist, Marketing Order Administration Branch,

Fruit and Vegetable Division, AMS, USDA, Room 2536-S, P.O. Box 96456,

Washington, DC 20090-6456; telephone: (202) 205-2830.

SUPPLEMENTARY INFORMATION: This 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 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 1995-96 marketing

year. 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 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 rule 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

$5,000,000. 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 establishes the amount

of inshell filberts/hazelnuts that may be marketed in domestic markets.

The domestic outlets for this commodity are characterized by limited

demand, and the establishment of interim 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 handlers may ship to the

domestic market throughout the season, and the percentages release the

volume of

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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 figure by no more than 25 percent, if market

conditions warrant such 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. Desirable carryout is used for early season

shipments until the new crop is available for market.

The preliminary free and restricted percentages make available

portions of the filbert/hazelnut supply subject to regulation which may

be marketed in domestic inshell markets (free) and exported, shelled,

or otherwise disposed of (restricted) early in the 1995-96 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 28, 1995, meeting, the Board computed and announced

preliminary free and restricted percentages of 10 percent and 90

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 was to guard against

underestimates of crop size. The preliminary free percentage released

3,478 tons of filberts/hazelnuts from the 1995 supply for domestic

inshell use. 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 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 provide 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. However, the inshell trade demand can only be revised

upward.

In accordance with order provisions, the Board met on November 15,

1995, 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 14 percent and 86 percent,

respectively. The Board also recommended that the final percentages be

effective on June 1, 1996, which is 30 days prior to the end of the

season. The interim final percentages make an additional 870 tons of

inshell filberts/hazelnuts available for the domestic inshell market.

The interim final marketing percentages are based on the industry's

final production estimates and release 4,348 tons to the domestic

inshell market from the 1995 supply subject to regulation. The final

marketing percentages release an additional 637 tons from the 1995 crop

for domestic use. Thus, a total of 4,985 tons of inshell filberts/

hazelnuts will be available from the 1995 supply subject to regulation

for domestic use when the final percentages are established. The

National Agricultural Statistics Service (NASS) estimated filbert/

hazelnut production at 38,000 tons for the Oregon and Washington area.

The Board unanimously voted to accept the NASS estimate.

The marketing percentages are based on the Board's production

estimates and the following supply and demand information for the 1995-

96 marketing year:

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

Tons

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Inshell Supply:

(1) Total production (NASS estimate)........... ........ 38,000

(2) Less substandard, farm use (disappearance). ........ 2,466

(3) Merchantable production (the Board's

adjusted crop estimate)....................... ........ 35,534

(4) Plus undeclared carryin as of July 1, 1995,

subject to regulation......................... ........ 11

(5) Supply subject to regulation (Item 3 plus

Item 4)....................................... ........ 35,545

Inshell Trade Demand:

(6) Average trade acquisitions of inshell

filberts/hazelnuts for three prior years...... ........ 4,247

(7) Increase to encourage increased sales (15

percent of Item 6)............................ ........ 637

(8) Less declared carryin as of July 1, 1995,

not subject to regulation..................... ........ 536

(9) Adjusted Inshell Trade Demand.............. ........ 4,348

(10) 15 percent of the average trade

acquisitions of inshell filberts/hazelnuts for

three prior years (Item 6).................... ........ 637

(11) Adjusted Inshell Trade Demand plus 15

percent for carryout (Item 9 plus Item 10).... ........ 4,985

Percentages: Free Restricted

(12) Interim final percentages 12 88 (Item 9

divided by Item 5) x 100...................... 12 88

(13) Final percentages (Item 11 divided by Item

5) x 100...................................... 14 86

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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 the domestic inshell market have available

a quantity equal to 110 percent of prior years' shipments in those

outlets before secondary market allocations are

[[Page 2667]]

approved. This provides for plentiful supplies for consumers and for

market expansion while retaining the mechanism for dealing with

oversupply situations. At its August 28, 1995, meeting, the Board

recommended that an increase of 15 percent (637 tons) for market

expansion be included in the inshell trade demand which was used to

compute the interim percentages. The established final percentages are

based on the final inshell trade demand, and will make available an

additional 637 tons for desirable carryout. The total free supply will

be the final trade demand of 4,985 tons plus the declared carryin of

536 tons or 5,521 tons. This is 130 percent of prior years' sales and

exceeds 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 1995-96 marketing year began July 1,

1995, 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 rule, which was recommended at an open Board

meeting, and need no additional time to comply with this rule; 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 982.243 is added to read as follows:

Note: This section will not be published in the annual Code of

Federal Regulations.

Sec. 982.243 Free and restricted percentages--1995-96 marketing year.

(a) The interim final free and restricted percentages for

merchantable filberts/hazelnuts for the 1995-96 marketing year shall be

12 and 88 percent, respectively.

(b) On June 1, 1996, the final free and restricted percentages for

merchantable filberts/hazelnuts for the 1995-96 marketing year shall be

14 and 86 percent, respectively.

Dated: January 22, 1996.

Sharon Bomer Lauritsen,

Deputy Director, Fruit and Vegetable Division.

[FR Doc. 96-1295 Filed 1-26-96; 8:45 am]

BILLING CODE 3410-02-P