Raisins Produced From Grapes Grown in California; Reduction in the Production Cap for the 1996 Raisin Diversion Program for Natural (Sun-dried) Seedless Raisins

DEPARTMENT OF AGRICULTURE

7 CFR Part 989

[FV95-989-5IFR]

Raisins Produced From Grapes Grown in California; Reduction in

the Production Cap for the 1996 Raisin Diversion Program for Natural

(Sun-dried) Seedless Raisins

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This interim final rule invites comments on a reduction of the

production cap for the 1996 Raisin Diversion Program (RDP) for Natural

(sun-dried) Seedless raisins. The production cap, which limits the

amount of raisin tonnage per acre for which an RDP participant can

receive credit, is reduced from 2.75 tons per acre to 2.2 tons per acre

for this program. This reduction is intended to bring the production

cap for 1996 in line with 1995 production per acre, which was

approximately 20 percent smaller than the 1994 crop yield per acre.

This rule was unanimously recommended by the Raisin Administrative

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

order.

DATES: This interim final rule becomes effective January 3, 1996.

Comments which are received by January 18, 1996 will be considered

prior to any finalization of this interim final rule.

ADDRESSES: Interested persons are invited to submit written comments

concerning this action. Comments must be sent in triplicate to the

Docket Clerk, Fruit and Vegetable Division, AMS, USDA, room 2525-S,

P.O. Box 96456, Washington, DC 20090-6456, or faxed to 202-720-5698.

Comments should reference the docket number and the date and page

number of this issue of the Federal Register and will be made available

for public inspection in the Office of the Docket Clerk during regular

business hours.

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 interim final rule is issued under

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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 interim final rule has been reviewed under Executive Order

12778, Civil Justice Reform. Under the marketing order provisions now

in effect, the production cap for the RDP is 2.75 tons per acre, but it

may be reduced with the approval of the Secretary. This rule

establishes a production cap of 2.2 tons per acre for the 1996 RDP.

This rule is not intended to have retroactive effect. This interim

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.

The authority for the RDP and implementing rules and regulations

are specified in Secs. 989.56 and 989.156, respectively. The purpose of

the RDP is to give producers the means to voluntarily reduce their

raisin production. Each approved producer who has removed grapes in

accordance with rules and regulations receives a diversion certificate

from the Committee. Such certificates represent reserve tonnage raisins

equal to the amount of raisins diverted. That is, the amount of grape

acreage removed from production (for RDP purposes) multiplied by the

producer's previous crop year yield in tons per acre, or multiplied by

the production cap if the previous year's actual yield exceeds the cap.

These certificates may be submitted by producers only to handlers.

The handler pays the producer for the free tonnage applicable to the

diversion certificate minus the established harvest cost for the entire

tonnage shown on the certificate. Factors reviewed by the Committee in

determining allowable harvest costs are specified in

Sec. 989.156(a)(1).

Any handler holding diversion certificates may redeem such

certificates with the Committee for reserve pool raisins. To redeem a

certificate, the handler must present the certificate to the Committee

and pay the Committee an amount equal to the established harvest costs

plus an amount equal to the payment for receiving, storing, fumigating,

handling, and inspecting reserve tonnage raisins specified in

Sec. 989.401 for the entire tonnage represented on the certificate.

The marketing order requires the Committee to meet on or before

November 30 of each crop year to review production data, supply data,

demand data, inventory, and other matters relating to the quantity of

raisins available to or needed by the market. If the Committee decides

that the current crop year's reserve pool has more than enough raisins

to meet projected market needs, it can announce the amount of such

excess eligible for diversion during the subsequent crop year. The

administrative rules and regulations established under the order

require that such announcement be made on or before November 30 of each

year.

A production cap of 2.75 tons of raisins per acre is established

under the order for any production unit of a producer approved for

participation in an RDP. When the diversion tonnage is announced, the

Committee may recommend, subject to the approval of the Secretary, that

the production cap for that RDP be less than 2.75 tons per acre. The

production cap limits the yield that a producer can claim and is

designed to allow most high yield producers to participate in an RDP.

When the cap was added to the marketing order in 1989, only 8 percent

of raisin producers exceeded the 2.75 tons per acre yield. Producers

who historically produce yields above the production cap can choose to

produce a crop rather than participate in a diversion program. No

producer is required to participate in an RDP.

A producer who wants to participate in an RDP must apply to the

Committee. The producer must specify, among other things, the raisin

production and the acreage covered by the application. The Committee

verifies producers' production claims using handler acquisition reports

and other available information. However, a producer could misrepresent

production by claiming that some raisins produced on one ranch were

produced on another, and use an inflated yield on the RDP application.

Thus, the production cap limits the amount of raisins for which a

producer participating in an RDP may be credited, and protects the

program from overstated production yields.

For example, a producer whose actual yield was 2.5 tons per acre

might claim that the yield was 3.5 tons per acre on the RDP

application. The current production cap would allow that producer to

receive a diversion certificate for 2.75 tons per acre, which is 0.25

tons above the actual yield but far less than the 1.0 ton which would

have been improperly credited if the diversion certificate had been

based on a yield of 3.5 tons per acre. The production cap reduces the

amount of inflated tonnage which could be improperly credited and

allows more producers to participate. When the production cap is more

in line with the

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actual yield per acre, the total quantity of raisins available under

the RDP can be allocated to more applicants. A producer who actually

produced 3.5 tons per acre might decide to produce a raisin crop rather

than apply for the RDP and be subject to the production cap.

The Committee met on November 27, 1995, and reviewed data relating

to the quantity of reserve pool raisins and anticipated market needs.

The Committee decided that the 1995-96 reserve pool had more raisins

than necessary to meet projected market needs and announced that 20,000

tons of Natural (sun-dried) Seedless raisins would be eligible for

diversion under the 1996 RDP.

The Committee members believe that the current production cap is

too high because 1995 crop year yields per acre are down 20 percent

compared to 1994. The Committee, therefore, unanimously recommended a

reduction in the production cap of 20 percent, from 2.75 tons per acre

to 2.2 tons per acre for the 1996 RDP, based on 1995 production.

Reducing the production cap proportionately to the decrease in yield

per acre is more reflective of actual production yields during the 1995

crop year.

A 15-day comment period was deemed appropriate for this rule

because the submission deadlines for applications and corrected

applications for the 1996 RDP are December 20, 1995, and January 12,

1996, respectively, and the Department would like to make its final

decision available as quickly as possible.

The information collection requirement (i.e., the RDP application)

referred to in this rule has been previously approved by the Office of

Management and Budget (OMB) under the provisions of 44 U.S.C. Chapter

35 and has been assigned OMB number 0581-0083.

Based on available information, the Administrator of the AMS has

determined that the issuance of this interim 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 this regulation, 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 rule until 30 days after publication in the Federal

Register because: (1) The submission deadlines for producer

applications and corrected applications for the 1996 RDP are December

20, 1995, and January 12, 1996, respectively, and producers need to

know about the reduced production cap as soon as possible, to make a

decision on whether or not to apply; (2) producers are aware of this

action, which was recommended by the Committee at an open meeting; (3)

the program is voluntary, and any producer who objects to the reduced

production cap can choose to produce a raisin crop for delivery during

1996; and (4) this interim final rule provides a 15-day period for

written comments and all comments received will be considered prior to

finalization of this interim final rule.

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 to read 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. A new paragraph (t) is added to Sec. 989.156 of Subpart--

Administrative Rules and Regulations (7 CFR Part 989.102-989.176) to

read as follows:

Sec. 989.156 Raisin diversion program.

* * * * *

(t) Pursuant to Sec. 989.56(a), the production cap for the 1996

Raisin Diversion Program for the Natural (sun dried) Seedless varietal

type is 2.2 tons of raisins per acre.

Dated: December 26, 1995.

Sharon Bomer Lauritsen,

Deputy Director, Fruit and Vegetable Division.

[FR Doc. 96-26 Filed 1-2-96; 8:45 am]

BILLING CODE 3410-02-P