Walnuts Grown in California; Reporting Walnuts Grown Outside of the United States and Received by California Handlers

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 984

[Docket No. FV99-984-2 PR]

Walnuts Grown in California; Reporting Walnuts Grown Outside of

the United States and Received by California Handlers

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule invites comments on revising the

administrative rules and regulations of the Federal marketing order for

California walnuts (order) to require handlers to report receipts of

walnuts grown outside of the United States. This proposal also

announces the Agricultural Marketing Service's (AMS) intention to

request a revision to the currently approved information collection

requirements issued under the order. The order regulates the handling

of walnuts grown in California and is administered locally by the

Walnut Marketing Board (Board). Requiring handlers to report to the

Board receipts of walnuts grown outside of the United States would

allow the Board to have better information on the total available

supply of walnuts within California, which includes both California and

foreign product. This would facilitate program administration.

DATES: Comments must be received by October 18, 1999.

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, P.O. Box 96456, room 2525-S,

Washington, DC 20090-6456; Fax: (202) 720-5698; 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: Maureen T. Pello, 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, P.O. Box 96456, room

2525-S, Washington, DC 20090-6456; telephone: (202) 720-2491, Fax:

(202) 720-5698. Small businesses may request information on complying

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, P.O. Box 96456, room 2525-S,

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

5698, or E-mail: Jay.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 proposal rule is issued under Marketing

Agreement and Order No. 984, both as amended (7 CFR part 984),

regulating the handling of walnuts 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 proposed

rule in conformance with Executive Order 12866.

This proposal has been reviewed under Executive Order 12988, Civil

Justice Reform. This rule is not intended to have retroactive effect.

This proposal 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 proposed rule invites comments on revising the order's

administrative rules and regulations to require handlers to report to

the Board receipts of walnuts grown outside of the United States. This

would allow the Board to have better information on the total available

supply of walnuts within California, which includes both California and

foreign product, which would facilitate program administration. This

action was unanimously recommended by the Board at a meeting on

September 11, 1998.

Section 984.76 of the order provides authority for the Board, with

the approval of the Secretary, to require handlers to furnish reports

and information to the Board as needed to enable the Board to perform

its duties under the order. The Board meets during the season to make

decisions on various programs authorized under the order. These

programs include quality control (minimum grade and size requirements

for both inshell and shelled walnuts placed into channels of commerce),

volume regulation, and projects regarding production research, and

marketing research and development.

The Board would like to have better information on the total supply

of walnuts within California, which includes both California and

foreign product. The Board would use this information in its marketing

policy deliberations each fall when it reviews the crop estimate,

handler carryover, and other factors to determine whether volume

regulation would be appropriate. In addition, the Board has some

concerns that, particularly in short crop years when handlers may

import more walnuts to meet customer demands, imported walnuts could be

[[Page 45209]]

included in handler inventory reports of California walnuts. Accurate

information regarding the supply of walnuts within California is needed

by the Board in its administration of the order.

According to the National Agricultural Statistics Service, the 10-

year average annual production of California walnuts is 235,000 inshell

tons. Bureau of Census data indicates that the 10-year average annual

import figure for walnuts is 1,036.5 shelled tons. However, during

short crop years in California such as the 1992-93 (203,000 inshell

tons) and 1996-97 (208,000 inshell tons) seasons, imports increased to

8,046 and 5,806 shelled tons, respectively.

Thus, the Board recommended that handlers be required to report to

the Board receipts of walnuts grown outside of the United States. This

report, WMB Form No. 7, would be submitted to the Board four times per

year as follows: On or before November 5 for such walnuts received

during the period August 1 to October 31; on or before February 5 for

such walnuts received during the period November 1 to January 31; on or

before May 5 for such walnuts received during the period February 1 to

April 30; and on or before August 5 for such walnuts received during

the period May 1 to July 31. The report would include the quantity of

such walnuts received, country of origin, and whether such walnuts were

inshell or shelled.

The Board also recommended that, with each report, the handler

submit a copy of a product tag issued by the Dried Fruit Association of

California (DFA) for compliance purposes. The DFA is a private agency

designated under the marketing order to provide inspection services for

handlers to ensure that California walnuts meet minimum grade and size

requirements in effect under the order. The product tag would indicate

the name of the person from whom the walnuts were received, the date

the walnuts were received by the handler, the number of containers and

U.S. Custom's Service entry number, whether the product is inshell or

shelled, the quantity of walnuts, country of origin, the name of the

DFA inspector who issued the tag, and the date such tag was issued. The

Board believes product tags are necessary to verify handler receipt

reports for imported walnuts. Accordingly, a new Sec. 984.476 is

proposed to be added to the orders' administrative rules and

regulations.

Initial Regulatory Flexibility Analysis

Pursuant to requirements set forth in the Regulatory Flexibility

Act (RFA), the 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 5,000 producers of walnuts in the

production area and approximately 50 handlers subject to regulation

under the 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. The

majority of producers of California walnuts may be classified as small

entities.

During the 1997-98 season, as a percentage, 33 percent of the

handlers shipped over 2.4 million kernelweight pounds of walnuts, and

67 percent of the handlers shipped under 2.4 million kernelweight

pounds of walnuts. Based on an average price of $2.10 per kernelweight

pound at the point of first sale, the majority of handlers of

California walnuts may be classified as small entities.

This rule would add a new Sec. 984.476 to the order's

administrative rules and regulations which would require handlers to

report to the Board receipts of walnuts grown outside of the United

States. This would allow the Board to have better information on the

total available supply of walnuts, including California and foreign

product, which would facilitate program administration. Authority for

requiring handlers to submit this information to the Board is provided

in Sec. 984.76 of the order.

Regarding the impact of the proposed action on affected entities,

this rule should impose minimal additional costs. The Board estimates

that about six handlers have imported walnuts over the past few years.

Such handlers would be required to submit an additional report to the

Board four times per year along with tags issued by the DFA verifying

receipts of foreign product. The DFA currently provides inspection

services for all handlers of California walnuts and would be available

at no additional cost to issue product tags to handlers receiving

imports. Handlers would then submit these tags to the Board for

verification purposes.

An alternative to the proposed action would be to not collect

information from handlers on receipts of imported walnuts. However, as

previously mentioned, the Board would like to have better information

on the total available supply of walnuts within California, which

includes both California and foreign product. The only way this

information can be obtained by the Board is to collect it from

handlers. This information would facilitate program administration by

improving the Board's base of information from which to make decisions.

The Board also recommended that a system be established for

monitoring walnuts grown outside of the United States that are received

by California handlers. Under the proposed monitoring system, DFA

inspectors would check whether or not foreign product had been

inspected and met the requirements of section 8e of the Act. Under

section 8e, whenever certain specified commodities are regulated under

a Federal marketing order, imports of that commodity must meet the same

or comparable grade, size, quality, and maturity requirements as those

in effect for the domestic commodity. Walnuts are included under

section 8e, and thus importers of walnuts are required to have such

walnuts inspected. However, it is the USDA's responsibility to ensure

that imported walnuts meet the requirements of section 8e. Thus, we are

not proceeding with this recommendation.

Finally, the Board considered whether it would be useful to collect

information on walnuts grown outside of California, but within the

United States. However, Board members agreed that the amount of such

walnuts was so small, it was not worth requiring handlers to report

such information.

This action would impose some additional reporting and

recordkeeping burden on handlers that receive walnuts grown outside of

the United States. It is estimated that six handlers may import walnuts

during the season. Such handlers would be required to submit a receipt

report to the Board four times per year. It is estimated that it would

take such handlers 5 minutes to complete each report. Thus, the

additional annual burden should total no more than 2 hours for the

industry. The information would be collected on WMB Form No. 7. That

form is being submitted to the Office of Management and Budget (OMB)

for approval under OMB Control No. 0581-0178. As with other similar

marketing order programs,

[[Page 45210]]

reports and forms are periodically reviewed to reduce information

requirements and duplication by industry and public sector agencies.

The Department has identified one relevant Federal rule regarding

requirements for walnuts grown outside of the United States. As

previously stated, walnuts are included under section 8e. Thus,

importers of walnuts are required to have such walnuts inspected by the

USDA's inspection service. Importers whose walnuts meet section 8e

requirements do not have to submit any paperwork to the USDA. However,

importers whose walnuts fail section 8e requirements, or whose walnuts

are exempt from section 8e because such walnuts are so immature that

they cannot be used for drying and sale as dried walnuts (green

walnuts), or are being sent to designated outlets (animal feed,

processing, or charity) have to submit paperwork to the USDA. However,

only a small amount of information requested by the USDA in these

instances or by the Board through this rule, would be duplicative.

In addition, the Board's meeting on September 11, 1998, where this

action was deliberated was a public meeting widely publicized

throughout the walnut industry. This issue was also deliberated at an

earlier Board meeting on February 2, 1998, and at a Grades and

Standards Subcommittee meeting on June 5, 1998. All interested persons

were invited to attend these meetings and participate in the industry's

deliberations. Finally, interested persons are invited to submit

information on the regulatory and informational impacts of this action

on small businesses.

Paperwork Reduction Act

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.

Chapter 35), the AMS announces its intention to request a revision to a

currently approved information collection for vegetable and specialty

crop marketing orders, which includes the Federal marketing order for

California walnuts.

Title: Vegetable and Specialty Crop Marketing Orders.

OMB Number: 0581-0178.

Expiration Date of Approval: July 31, 2000.

Type of Request: Intent to revise a currently approved information

collection.

Abstract: The information collection requirements in this request

are essential to carry out the intent of the Act, to provide the

respondents the type of service they request, and to administer the

California walnut marketing order program, which has been operating

since 1948.

On September 11, 1998, the Board unanimously recommended revising

the order's administrative rules and regulations to require handlers to

report to the Board receipts of walnuts grown outside of the United

States. This information would be reported on WMB Form No. 7. This

notice concerns this report, in addition to the accompanying regulation

previously discussed regarding requiring this report be submitted by

handlers to the Board.

The Board would like to have better information on the total supply

of walnuts available within California, which includes both California

and foreign product. The Board would use this information in its

marketing policy deliberations each fall when it reviews the crop

estimate, handler carryover, and other factors to determine whether

volume regulation would be appropriate. In addition, the Board has some

concerns that, particularly in short crop years when handlers may

import more walnuts to meet customer demands, imported walnuts could be

included in handler inventory reports of California walnuts. Accurate

information regarding the supply of walnuts within California is needed

by the Board in its administration of the order.

The information collected is used only by authorized

representatives of the USDA, including AMS, Fruit and Vegetable

Programs regional and headquarter's staff, and authorized employees of

the Board. Authorized Board employees and the industry are the primary

users of the information and AMS is the secondary user.

Estimate of Burden: Public reporting burden for this collection of

information is estimated to average 5 minutes per response.

Respondents: California walnut handlers who receive walnuts grown

outside of the United States.

Estimated Number of Respondents: 6.

Estimated Number of Responses per Respondent: 4.

Estimated Total Annual Burden on Respondents: 2 hours.

Comments: Comments are invited on: (1) Whether the proposed

collection of information is necessary for the proper performance of

the functions of the agency, including whether the information will

have practical utility; (2) the accuracy of the agency's estimate of

the burden of the proposed collection of information, including the

validity of the methodology and assumptions used; (3) ways to enhance

the quality, utility, and clarity of the information to be collected;

and (4) ways to minimize the burden of the collection of information on

those who are to respond, including the use of appropriate automated,

electronic, mechanical, or other technological collection techniques or

other forms of information technology.

Comments should reference OMB No. 0581-0178 and the Vegetable and

Specialty Crop Marketing Orders, and be sent to the USDA in care of the

Docket Clerk at the address above. All comments received will be

available for public inspection during regular business hours at the

same address.

All responses to this notice will be summarized and included in the

request for OMB approval. All comments will also become a matter of

public record.

A 60-day comment period is provided to allow interested persons to

respond to this proposal.

List of Subjects in 7 CFR Part 984

Marketing agreements, Nuts, Reporting and recordkeeping

requirements, Walnuts.

For the reasons set forth in the preamble, 7 CFR part 984 is

proposed to be amended as follows:

PART 984--WALNUTS GROWN IN CALIFORNIA

1. The authority citation for 7 CFR part 984 continues to read as

follows:

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

2. A new Sec. 984.476 is added to read as follows:

Sec. 984.476 Report of walnut receipts from outside of the United

States.

Each handler who receives walnuts from outside of the United States

shall file with the Board, on WMB Form No. 7, a report of the receipt

of such walnuts. The report shall be filed as follows: On or before

November 5 for such walnuts received during the period August 1 to

October 31; on or before February 5 for such walnuts received during

the period November 1 to January 31; on or before May 5 for such

walnuts received during the period February 1 to April 30; and on or

before August 5 for such walnuts received during the period May 1 to

July 31. The report shall include the quantity of such walnuts

received, the country of origin for such walnuts, and whether such

walnuts are inshell or shelled. With each report, the handler shall

submit a copy of a product tag issued by a DFA of California inspector

for each receipt of such walnuts that includes the name of the person

from whom such walnuts were received, the date such walnuts were

received by the handler, the number of containers and the U.S. Custom's

Service entry number,

[[Page 45211]]

whether such walnuts are inshell or shelled, the quantity of such

walnuts received, the country of origin for such walnuts, the name of

the DFA of California inspector who issued the product tag, and the

date such tag was issued.

Dated: August 17, 1999.

Robert C. Keeney,

Deputy Administrator, Fruit and Vegetable Programs.

[FR Doc. 99-21666 Filed 8-18-99; 8:45 am]

BILLING CODE 3410-02-P