Dried Prunes Produced in California; Increased Assessment Rate

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 993

[Docket No. FV99-993-1 PR]

Dried Prunes Produced in California; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule would increase the current assessment rate from

$2.16 to $3.28 per ton of salable dried prunes for the Prune Marketing

Committee (Committee) under Marketing Order No. 993 for the 1998-99 and

subsequent crop years. The Committee is responsible for local

administration of the marketing order which regulates the handling of

dried prunes grown in California. Authorization to assess dried prune

handlers enables the Committee to incur expenses that are reasonable

and necessary to administer the program. The increased assessment rate

is needed because the assessable tonnage is expected to be 99,750

salable tons, or 38 percent less than the Committee's initial estimate

for 1998-99. Increasing the assessment rate to $3.28 per ton of salable

dried prunes would allow the Committee to meet its 1998-99 expenses and

to operate for the first three months of the 1999-2000 crop year before

monies become available from that year's assessments. The higher

assessment rate would apply for the entire 1998-99 crop year, which

began August 1 and ends July 31. The assessment rate would remain in

effect indefinitely unless modified, suspended, or terminated.

DATES: Comments must be received by December 28, 1998.

ADDRESSES: Interested persons are invited to submit written comments

concerning this rule. Comments must be sent to the Docket Clerk, Fruit

and Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box 96456,

Washington, DC 20090-6456; Fax: (202) 205-6632; or E-mail:

[email protected]. Comments should reference the docket number

and the date and page number of this issue of the Federal Register and

will be available for public inspection in the Office of the Docket

Clerk during regular business hours.

FOR FURTHER INFORMATION CONTACT: Diane Purvis, Marketing Assistant, or

Richard P. Van Diest, Marketing Specialist, California Marketing Field

Office, Fruit and Vegetable Programs, AMS, USDA, 2202 Monterey Street,

suite 102B, Fresno, California 93721; telephone (559) 487-5901; Fax

(559) 487-5906; or George Kelhart, Technical Advisor, Marketing Order

Administration Branch, Fruit and Vegetable Programs, AMS, USDA, room

2525-S, P.O. Box 96456, Washington, DC 20090-6456; telephone: (202)

720-2491, Fax: (202) 205-6632. Small businesses may request information

on compliance with this regulation, or obtain a guide on complying with

fruit, vegetable, and specialty crop marketing agreements and orders by

contacting Jay Guerber, Marketing Order Administration Branch, Fruit

and Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box 96456,

Washington, DC 20090-6456; telephone: (202) 720-2491, Fax: (202) 205-

6632, or E-mail: Jay__N__G[email protected]. You may view the marketing

agreement and order small business compliance guide at the following

web site: http://www.ams.usda.gov/fv/moab.html.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing

Agreement and Order No. 993, both as amended (7 CFR part 993),

regulating the handling of dried prunes grown in California,

hereinafter referred to as the ``order.'' The marketing agreement and

order are 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 12988, Civil

Justice Reform. Under the marketing order now in effect, California

dried prune handlers are subject to assessments. Funds to administer

the order are derived from such assessments. It is intended that the

assessment rate as issued herein will be applicable to all assessable

dried prunes beginning on August 1, 1998, and continue until amended,

suspended, or terminated. 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. 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 or

her principal place of business, has jurisdiction to review the

Secretary's ruling on the petition, provided an action is filed not

later than 20 days after the date of the entry of the ruling.

This rule would increase the assessment rate established for the

Committee for the 1998-99 and subsequent crop years from $2.16 per ton

to $3.28 per ton of salable dried prunes.

The California dried prune marketing order provides authority for

the Committee, with the approval of the Department, to formulate an

annual budget of expenses and collect assessments from handlers to

administer the program. The members of the Committee are producers and

handlers of California dried prunes. They are familiar with the

Committee's needs and with the costs for goods and services in their

local area and are thus in a position to formulate an appropriate

budget and assessment rate. The assessment rate is formulated and

discussed in a public meeting. Thus, all directly affected persons have

an opportunity to participate and provide input.

For the 1998-99 and subsequent crop years, the Committee

recommended, and the Department approved, an assessment rate that would

continue in effect from crop year to crop year unless modified,

suspended, or terminated by

[[Page 70064]]

the Secretary upon recommendation and information submitted by the

Committee or other information available to the Secretary.

The Committee met on December 1, 1998, and unanimously recommended

to reduce its 1998-99 budget from $348,840 to $327,180 and increase the

current assessment rate from $2.16 to $3.28 per ton of salable dried

prunes. The assessment rate of $2.16 per ton was approved by the

Department in a final rule published in the Federal Register on October

2, 1998 (63 FR 52959). The $1.22 per ton increase in the assessment

rate to $3.28 per ton is needed to allow the Committee to meet its

1998-99 expenses and to operate for the first three months of the 1999-

2000 crop year before monies become available from next year's

assessments. The California Agricultural Statistical Service originally

estimated a 170,000 ton crop (161,500 salable tons) for the 1998-99

crop year. Due to unusually cool and wet weather conditions caused by

the El Nino this season, the 1998-99 crop harvest is about four weeks

late, of poor quality, and approximately 50 percent less than normal

size. The Committee now expects the salable prune tonnage to be 99,750

salable tons, or 38 percent less than the Committee's initial estimate

for 1998-99.

The following table compares major budget expenditures recommended

by the Committee on June 25, 1998, and major budget expenditures in the

revised budget recommended on December 1, 1998.

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($1,000)

Budget expense categories -----------------------

6/25/98 12/1/98

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Salaries, Wages & Benefits...................... 191.5 189.7

Research & Development.......................... 30 0

Office Rent..................................... 23 23

Travel.......................................... 21 18.5

Acreage Survey.................................. 21 0

Reserve (Contingencies)......................... 9.14 50.93

Equipment Rental................................ 9 9

Data Processing................................. 8 3.85

Stationary & Printing........................... 5.5 5

Office Supplies................................. 5 5

Postage & Messenger............................. 5 5

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The assessment rate recommended by the Committee was derived by

dividing the reduced expenses by its reduced estimate of salable

California dried prunes. Production of dried prunes for the year is

estimated at 99,750 salable tons which should provide $327,180 in

assessment income. Interest income also will be available to cover

anticipated expenses. The Committee is authorized to use excess

assessment funds from the 1997-98 crop year (currently estimated at

$58,088) for up to five months beyond the end of the crop year to meet

1998-99 crop year expenses. At the end of the five months, the

Committee refunds or credits excess funds to handlers (Sec. 993.81(c)).

Income derived from handler assessments, along with interest income,

would be adequate to cover budgeted expenses.

The proposed assessment rate would continue in effect indefinitely

unless modified, suspended, or terminated by the Secretary upon

recommendation and information submitted by the Committee or other

available information.

Although this assessment rate would be in effect for an indefinite

period, the Committee would continue to meet prior to or during each

crop year to recommend a budget of expenses and consider

recommendations for modification of the assessment rate. The dates and

times of Committee meetings are available from the Committee or the

Department. Committee meetings are open to the public and interested

persons may express their views at these meetings. The Department would

evaluate Committee recommendations and other available information to

determine whether modification of the assessment rate is needed.

Further rulemaking would be undertaken as necessary. The Committee's

1998-99 budget and those for subsequent crop years would be reviewed

and, as appropriate, approved by the Department.

Pursuant to requirements set forth in the Regulatory Flexibility

Act (RFA), the Agricultural Marketing Service (AMS) has considered the

economic impact of this rule on small entities. Accordingly, AMS has

prepared this initial regulatory flexibility analysis.

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 the 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 1,250 producers of dried prunes in the

production area and approximately 20 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 less than $500,000, and small agricultural

service firms are defined as those whose annual receipts are less than

$5,000,000.

An updated prune industry profile shows that 8 of the 20 handlers

(40 percent) shipped over $5,000,000 of dried prunes and could be

considered large handlers by the Small Business Administration. Twelve

of the 20 handlers (60 percent) shipped under $5,000,000 of dried

prunes and could be considered small handlers. An estimated 90

producers, or about 7 percent of the 1,250 total producers, would be

considered large growers with annual income over $500,000. The majority

of handlers and producers of California dried prunes may be classified

as small entities.

This rule would increase the current assessment rate established

for the Committee and collected from handlers for the 1998-99 and

subsequent crop years from $2.16 per ton to $3.28 per ton of salable

dried prunes. The Committee unanimously recommended 1998-99

expenditures of $327,180 and an assessment rate of $3.28 per ton of

salable dried prunes. The proposed assessment rate of $3.28 is $1.22

higher than the current 1998-99 rate (63 FR 52959, October 2, 1998).

The quantity of assessable dried prunes for the 1998-99 crop year is

now estimated at 99,750 salable tons. Thus, the $3.28 rate should

provide $327,180 in assessment income and be adequate to meet this

year's expenses. Interest income also would be available to cover

budgeted expenses if the 1998-99 expected assessment income falls

short.

The following table compares major budget expenditures recommended

by the Committee on June 25, 1998, with major budget expenditures in

the revised budget recommended on December 1, 1998.

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

($1,000)

Budget expense categories -----------------------

6/25/98 12/1/98

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

Salaries, Wages & Benefits...................... 191.5 189.7

Research & Development.......................... 30 0

Office Rent..................................... 23 23

Travel.......................................... 21 18.5

Acreage Survey.................................. 21 0

Reserve (Contingencies)......................... 9.14 50.93

Equipment Rental................................ 9 9

Data Processing................................. 8 3.85

Stationary & Printing........................... 5.5 5

Office Supplies................................. 5 5

Postage & Messenger............................. 5 5

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

[[Page 70065]]

Due to unusually cool and wet weather conditions caused by the El

Nino this season, the 1998-99 crop harvest is about four weeks late, of

poor quality, and approximately 50 percent less than normal size. At

its December 1, 1998, meeting, the Committee reduced the California

Agricultural Statistical Service's dried prune crop estimate for 1998-

99 from 170,000 tons (161,500 salable tons) to 103,000 tons (99,750

salable tons).

The Committee reviewed and unanimously recommended 1998-99

expenditures of $327,180. The assessment rate of $3.28 per ton of

salable dried prunes was then determined by dividing the total

recommended budget by the reduced estimate for salable dried prunes.

The Committee is authorized to use excess assessment funds from the

1997-98 crop year (currently estimated at $58,088) for up to five

months beyond the end of the crop year to fund 1998-99 crop year

expenses. At the end of the five months, the Committee refunds or

credits excess funds to handlers (Sec. 993.81(c)). Anticipated

assessment income and interest income during 1998-99 would be adequate

to cover authorized expenses.

Recent price information indicates that the grower price for the

1998-99 season should average about $800 per salable ton of dried

prunes. Based on estimated shipments of 99,750 salable tons, assessment

revenue during the 1998-99 crop year is expected to be less than 1

percent of the total expected grower revenue.

This action would increase the assessment obligation imposed on

handlers. While assessments impose some additional costs on handlers,

the costs are minimal and uniform on all handlers. Some of the

additional costs may be passed on to producers. However, these costs

would be offset by the benefits derived by the operation of the

marketing order. In addition, the Committee's meeting was widely

publicized throughout the California dried prune industry, and all

interested persons were invited to attend the meeting and participate

in Committee deliberations on all issues. Like all Committee meetings,

the December 1, 1998, meeting was a public meeting and all entities,

both large and small, were able to express views on this issue.

Finally, interested persons are invited to submit information on the

regulatory and informational impacts of this action on small

businesses.

This proposed rule would impose no additional reporting or

recordkeeping requirements on either small or large California dried

prune handlers. As with all Federal marketing order programs, reports

and forms are periodically reviewed to reduce information requirements

and duplication by industry and public sector agencies.

The Department has not identified any relevant Federal rules that

duplicate, overlap, or conflict with this rule.

A 10-day comment period is provided to allow interested persons to

respond to this proposed rule. Ten days is deemed appropriate because:

(1) The 1998-99 crop year began on August 1, 1998, and the marketing

order requires that the rate of assessment for each crop year apply to

all assessable dried prunes handled during such crop year; (2) the

Committee needs to have sufficient funds to pay its expenses which are

incurred on a continuous basis; (3) handlers are aware of this action

which was unanimously recommended by the Committee at a public meeting

and is similar to other assessment rate actions issued in past years;

and (4) the Committee's excess funds are nearly exhausted and the

assessment increase must be implemented promptly so the Committee can

collect assessments based on the higher rate and meet its financial

obligations.

List of Subjects in 7 CFR Part 993

Marketing agreements, Plums, Prunes, Reporting and recordkeeping

requirements.

For the reasons set forth in the preamble, 7 CFR part 993 is

proposed to be amended as follows:

PART 993--DRIED PRUNES PRODUCED IN CALIFORNIA

1. The authority citation for 7 CFR part 993 continues to read as

follows:

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

2. Section 993.347 is proposed to be revised to read as follows:

Sec. 993.347 Assessment rate.

On and after August 1, 1998, an assessment rate of $3.28 per ton is

established for California dried prunes.

Dated: December 14, 1998.

Robert C. Keeney,

Deputy Administrator, Fruit and Vegetable Programs.

[FR Doc. 98-33573 Filed 12-17-98; 8:45 am]

BILLING CODE 3410-02-P