[Federal Register: October 17, 2006 (Volume 71, Number 200)]
[Rules and Regulations]
[Page 60807-60810]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17oc06-2]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Parts 924 and 944
[Docket No. FV06-924-1 FIR]
Fresh Prunes Grown in Designated Counties in Washington and in
Umatilla County, OR; Suspension of Handling Regulations, Establishment
of Reporting Requirements, and Suspension of the Fresh Prune Import
Regulation
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: The U.S. Department of Agriculture (USDA) is adopting, as a
final rule, without change, an interim final rule suspending the
handling regulations prescribed under the Washington-Oregon fresh prune
marketing order for the 2006 and future seasons. The marketing order
regulates the handling of fresh prunes grown in designated counties in
Washington and in Umatilla County, Oregon, and is administered locally
by the Washington-Oregon Prune Marketing Committee (Committee). This
rule continues in effect the action that suspended the minimum grade,
size, quality, maturity, and inspection requirements for fresh prune
handlers under the marketing order. During the suspension of the
handling regulations, reports from handlers will continue to be
required to obtain information necessary to administer the marketing
order. In addition, this rule continues in effect the suspension of
fresh prune import inspection and minimum quality, grade, size, and
maturity requirements.
DATES: Effective Date: November 16, 2006.
FOR FURTHER INFORMATION CONTACT: Barry Broadbent or Gary Olson,
Northwest Marketing Field Office, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, 1220 SW Third Avenue,
Suite 385, Portland, OR 97204; Telephone: (503) 326-2724, Fax: (503)
326-7440, or e-mail: Barry.Broadbent@usda.gov or GaryD.Olson@usda.gov.
Small businesses may request information on complying with this
regulation by contacting Jay Guerber, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence
Avenue, SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202)
720-2491, Fax: (202) 720-8938, or e-mail: Jay.Guerber@usda.gov.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing
Agreement and Order No. 924, as amended (7 CFR 924), regulating the
handling of fresh prunes grown in designated counties in Washington and
in Umatilla County, Oregon, 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.'' This rule is also issued under section 8e of the Act regarding
the establishment of inspection and quality, grade, size, or maturity
requirements on imports of commodities that are similarly regulated
under Federal marketing orders.
USDA is issuing this rule in conformance with Executive Order
12866.
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. This rule is not intended to have retroactive effect.
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 USDA 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 USDA 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 USDA's ruling on the petition,
provided an action is filed not later than 20 days after the date of
the entry of the ruling.
There are no administrative procedures that must be exhausted prior
to any judicial challenge to the provisions of import regulations
issued under section 8e of the Act.
This rule continues in effect the action that suspended the
handling regulations prescribed under the order for the 2006 and future
seasons.
[[Page 60808]]
Specifically, this rule suspends the minimum grade, size, quality,
maturity, and inspection requirements under the order. In addition,
this rule continues in effect the suspension of regulation of fresh
prune import under section 8e of the Act.
Furthermore, this rule continues in effect the action that
established a new handler reporting requirement. The new handler report
provides the Committee with information that has previously been
available from the Federal-State Inspection Service (Inspection
Service). As a result of suspending the handling regulations, including
mandatory inspections, information from the Inspection Service is no
longer available to the Committee to compile industry statistics and to
assess handlers. The new handler reporting requirement allows the
Committee to obtain information directly from handlers similar to the
information that has been obtained previously from the Inspection
Service.
Section 924.52 of the order authorizes the issuance of regulations
for grade, size, quality, maturity, and pack for fresh prunes grown in
the production area. Section 924.53 authorizes the modification,
suspension, or termination of regulations issued under Sec. 924.52.
Section 924.55 provides that whenever the handling of any variety
of fresh prunes is regulated pursuant to Sec. 924.52 or Sec. 924.53,
such prunes must be inspected by the Inspection Service, and certified
as meeting the applicable requirements. The cost of the inspection and
certification is borne by handlers.
Section 924.60 authorizes the Committee, with the approval of USDA,
to require reports and other information from handlers that are
necessary for the Committee to perform its duties.
Minimum grade, size, quality, maturity, and inspection requirements
for fresh prunes regulated under the order are specified in Sec.
924.319 (the section suspended by this rule). When effective, Sec.
924.319, with exemptions for certain varieties and types of shipments,
provides that all fresh prunes grade at least U.S. No. 1, except that
at least two-thirds of the surface of the prune is required to be
purplish in color, and such prunes measure not less than 1\1/4\ inches
in diameter as measured by a rigid ring. The regulation includes a
minimum quantity exemption, as well as specific tolerances for prunes
that fail to meet color, minimum diameter, and quality requirements.
Regulation regarding the importation of fresh prunes into the
United States under Section 8e of the Act is set forth in Sec.
944.700.
The Committee meets regularly to consider recommendations for
modification, suspension, or termination of the regulatory requirements
for Washington-Oregon fresh prunes which have been issued on a
continuing basis. Committee meetings are open to the public and
interested persons may express their views at these meetings. The USDA
reviews Committee recommendations, information submitted by the
Committee, and other available information, and determines whether
modification, suspension, or termination of the regulatory requirements
would tend to effectuate the declared policy of the Act.
At its February 16, 2006, meeting, the Committee unanimously
recommended suspending the handling regulations and establishing a new
handler reporting requirement for the 2006 and future seasons.
The objective of handling regulation has been to ensure that only
acceptable quality fresh prunes enter fresh market channels, thereby
ensuring consumer satisfaction, increasing sales, and improving returns
to producers. While the industry continues to believe that quality is
an important factor in maintaining sales, the Committee believes the
cost of inspection and certification (mandated when the handling
regulations are in effect) currently exceeds the benefits derived.
Fresh prune prices have been at low levels in recent seasons, and
many producers have faced difficulty covering their production costs.
Consequently, the Committee has, for a number of years, explored the
possibility of reducing the industry's costs through the elimination of
mandatory inspections and the accompanying fees. The Committee is
concerned, however, that the elimination of current handling and
inspection requirements could possibly result in lower quality fresh
prunes being shipped to fresh markets, thereby affecting consumer
demand. Also, there is some concern that, should overall quality
decline, the Washington-Oregon fresh prune industry could lose sales to
other prune producing regions.
After much consideration, the Committee recommended the suspension
of the handling regulations for the 2006 and future seasons, but
stipulated that the Committee would assess marketing conditions
annually to determine if lifting the suspension is warranted. The
suspension enables the industry to realize needed cost savings while
the impact of the suspension is evaluated, on an ongoing basis, by the
Committee. Should the market situation so dictate, the Committee may
take appropriate action to recommend reinstating regulation.
This final rule enables Washington-Oregon fresh prune handlers to
continue to ship prunes without regard to minimum grade, size, quality,
maturity, and inspection requirements. This allows handlers to decrease
their total costs by eliminating the expenses associated with mandatory
inspection. This rule does not restrict handlers from seeking product
inspection on a voluntary basis if they find inspection desirable. The
Committee will evaluate the effect the suspension of the handling
regulations has on market conditions and on producer returns each year
the suspension is in effect, and, if necessary, make recommendations to
USDA for changes.
The suspension of the handling regulation and mandatory inspections
also results in the elimination of the inspection certificates that
have been generated by the Inspection Service and forwarded to the
Committee. The Committee used these certificates as the basis for
assessment billing from handlers and for compiling prune industry
statistics. In the absence of the inspection certificates, handlers are
now required to submit reports directly to the Committee to facilitate
the collection of assessments and the compilation of industry
statistics.
Therefore, a new Sec. 924.160 Reports has now been added which
requires each handler to submit to the Committee, on or before October
30 of each year, a ``Handler Statement for Washington-Oregon Fresh
Prunes'' containing the following information: (a) The handler's name
and address; (b) the name and address of each producer; (c) the
quantity, in field run tons, of early and late fresh prunes handled by
each handler; (d) the assessment due and enclosed; (e) the name,
telephone number, and signature of the authorized person completing the
form; and (f) the date the form is signed.
Authorization to assess handlers enables the Committee to incur
expenses that are reasonable and necessary to administer the program.
The new reporting requirement facilitates the Committee's ability to
collect assessments needed to cover necessary program costs. Even
though reporting requirements are increased, this final rule, through
the elimination of inspection and certification requirements, is
expected to reduce overall industry expenses.
Consistent with the suspension of Sec. 924.319, this final rule
also suspends Sec. 924.110 of the rules and regulations in effect
under the order. Section 924.110 contains provisions for handlers to
[[Page 60809]]
apply for waivers from mandatory inspection when such inspection is not
readily available from the Inspection Service. With the suspension of
regulation, such waivers are no longer necessary.
Contained within the handling regulations (Sec. 924.319(b)) is a
provision allowing the handling of any individual shipment which, in
the aggregate, does not exceed 500 pounds net weight of Stanley or
Merton variety prunes, or 350 pounds net weight of any other variety of
prunes, without regard to the inspection and assessment requirements
issued under the order. Regardless of the suspension of handling
regulations, the Committee desires that this provision remain effective
for the purpose of providing a minimum quantity exemption from
assessments. Thus, a new Sec. 924.121 Minimum quantity exemption is
established. This section essentially continues the provision with the
same minimum quantity exemption threshold as in 924.319(b), but in
regards to the assessment requirements contained in Sec. 924.41 only.
Section 8e of the Act requires that whenever grade, size, quality,
or maturity requirements are in effect for certain commodities under a
domestic marketing order, including fresh prunes, imports of that
commodity must meet the same or comparable requirements. Section
944.700 contains the regulations for fresh prune imports. Since this
final rule indefinitely suspends the handling regulation for domestic
fresh prunes, including grade, size, quality, and maturity
requirements, the regulation of imported fresh prunes is suspended
indefinitely as well.
Final Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), the Agricultural Marketing Service (AMS) has considered the
economic impact of this action on small entities. Accordingly, AMS has
prepared this final 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.
Currently, there are 7 handlers of Washington-Oregon fresh prunes
who are subject to regulation under the order and approximately 100
fresh prune producers in the regulated area. Small agricultural service
firms are defined by the Small Business Administration (13 CFR 121.201)
as those having annual receipts of less than $6,500,000, and small
agricultural producers are defined as those having annual receipts of
less than $750,000.
Fresh prune production has been approximately 5,000 to 7,000 tons
per year for the past several years. The Committee estimates that all
Washington-Oregon fresh prune handlers combined ship less than
$6,500,000 worth of prunes on an annual basis. In addition, based on
acreage, production, and producer prices reported by the National
Agricultural Statistics Service, and the total number of Washington-
Oregon fresh prune producers, average annual producer receipts are
approximately $13,000, which is considerably less than the $750,000
threshold. In view of the foregoing, it can be concluded that all of
the handlers and producers of Washington-Oregon fresh prunes may be
classified as small entities.
This final rule continues in effect the suspension of the handling
regulations specified in Sec. 924.319, as well as the fresh prune
import regulations specified in Sec. 944.700. Furthermore, this rule
continues in effect the modified minimum quantity exemption as a new
Sec. 924.121 and the addition a new reporting requirement as Sec.
924.160. The suspension of the handling regulation will allow the
Washington-Oregon fresh prune industry to market fresh prunes without
regard to minimum grade, size, quality, maturity, and inspection
requirements. Authority for this action is provided in Sec. Sec.
924.53 and 924.60.
The handling regulations help ensure that only acceptable quality
fresh prunes enter fresh market channels, thereby ensuring consumer
satisfaction, increasing sales, and improving returns to producers.
While the industry continues to believe that quality is an important
factor in maintaining sales, the Committee believes the cost of
inspection and certification exceeds the benefits derived. The
Committee believes that the demands of wholesale buyers and consumers
will drive handlers and producers to maintain a high level of product
quality without the necessity of minimum quality standards and
mandatory inspections. The Committee will review the suspension of the
handling regulations and all relevant related issues on an annual
basis. The handling regulations can be reinstated by way of Committee
recommendation and USDA approval through the informal rulemaking
process.
Fresh prune prices have been at low levels in recent years, and
many producers have faced difficulty covering their production costs.
In response to the adverse economic conditions being experienced by the
industry, the Committee discussed the possibility of reducing costs
through the elimination of mandatory inspection and the related fees.
The Committee is concerned, however, that the elimination of current
handling and inspection requirements could possibly result in lower
quality fresh prunes being shipped to fresh markets. Also, should fruit
quality decline, there is some concern among Committee members that the
Washington-Oregon fresh prune industry could lose sales to other prune
producing regions.
While acknowledging these concerns, the Committee believes that the
benefits derived from suspending the regulations outweigh the potential
costs. The Committee also believes that the current marketing situation
makes regulation unnecessary, that the cost of regulation outweighs the
benefits, and that the conditions leading to the suspension will
perpetuate well into the future. Therefore, the Committee recommended
that the suspension of the handling regulations be effective not only
for the upcoming season, but for future seasons as well. The indefinite
suspension will alleviate the need for annual rulemaking to maintain
the suspension while allowing the Committee to monitor the impacts of
the suspension and consider appropriate actions for ensuing seasons. If
and when the industry experiences changes in the marketing environment
that would make reinstating the handling regulations necessary, the
Committee has the ability to quickly respond.
This final rule enables handlers to ship prunes without regard to
the minimum grade, size, quality, maturity, and inspection requirements
of the order for the 2006 and future seasons. This allows handlers to
decrease costs by eliminating the costs associated with mandatory
inspection but does not, however, restrict handlers from seeking
inspection on a voluntary basis if they find inspection desirable. The
Committee will evaluate the effect that suspension of the handling
regulations has on marketing conditions and on producer returns at
their annual meeting each spring.
The suspension of the handling regulations results in the
elimination of mandatory inspections and, in turn, the inspection
certificates that are generated by the Inspection Service and
subsequently provided to the Committee. The Committee has in the
[[Page 60810]]
past used such certificates for assessment billing purposes and for
compiling industry statistics. As a result of the suspension of the
handling regulations, the Committee will require a report directly from
each handler for the purpose of obtaining information on which to
collect assessments and generate statistical information.
The Committee anticipates that this rule will not negatively impact
small handlers and producers because it suspends minimum grade, size,
quality, maturity, and inspection requirements. The total cost of
inspection and certification for fresh shipments of Washington-Oregon
fresh prunes during the 2005 marketing season is estimated by the
Committee to have been $0.23 per hundredweight, or approximately
$27,000 total. This represents approximately $4,000 per handler. Since
handlers may continue to have their prunes voluntarily inspected, the
Committee expects that some handlers will continue to have at least a
portion of their fresh prunes inspected and certified by the Inspection
Service.
Alternatives to the suspension of the handling regulations
considered by the Committee included maintaining the status quo,
suspending the regulations for one season only, and terminating the
marketing order in its entirety. The Committee believes, however, that
the continuation of regulation would be a financial burden on the
industry, given the current market situation and outlook. With that
perspective, continuing to regulate was not a viable option to the
Committee. The Committee also discussed suspending regulation one
season at a time, but rejected that option as well. Finally, the
Committee considered terminating the order in its entirety, but
declined to take that action because the Committee continues to believe
that the order has purpose, even without handling regulation.
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. In addition, as
noted in the initial regulatory flexibility analysis, USDA has not
identified any relevant Federal rules that duplicate, overlap, or
conflict with this rule.
Further, the Committee's meeting was widely publicized throughout
the Washington-Oregon fresh prune industry and all interested persons
were invited to attend the meeting and participate in Committee
deliberations. Like all Committee meetings, the February 16, 2006,
meeting was a public meeting and all entities, both large and small,
were able to express their views on this issue.
An interim final rule concerning this action was published in the
Federal Register on May 9, 2006 (71 FR 26817). Copies of the rule were
mailed by the Committee's staff to all Committee members and fresh
prune handlers. In addition, the rule was made available through the
Internet by the Office of the Federal Register and the USDA. A 60-day
comment period ending July 10, 2006, was provided to allow interested
persons to respond to the interim final rule. Two comments were
received during the comment period. However, as neither comment
addressed the substance of this rule, they will not be considered in
this document.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/fv/moab.html.
Any questions about the compliance
guide should be sent to Jay Guerber at the previously mentioned address
in the FOR FURTHER INFORMATION CONTACT section.
As mentioned previously, this action requires an additional
collection of information. The information collection requirements are
discussed in the following section.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
3501 et seq.), the information collection requirements that are
contained in this rule were approved by the Office of Management and
Budget (OMB), under OMB No. 0581-0237. The information collection has
been merged into OMB No. 0581-0189, Generic OMB Fruit Crops, which
expires September 30, 2007.
In summary, the additional reporting requirements will enable the
Committee to collect information from fresh prune handlers regarding
the total quantity of early and late fresh prunes handled during the
season, which was previously obtained from the inspection certificates
issued by the Inspection Service. However, this source will no longer
be available under the suspension of the handling regulations. The
Committee will use used by the Committee to compile information that is
essential for the collection of handler assessments, to provide
production statistics to the industry, and to help ensure compliance
with the order's provisions. In addition, the form will assist the
Committee and USDA with oversight and planning.
E-Government Act Compliance
The Agricultural Marketing Service (AMS) is committed to complying
with the E-Government Act, to promote the use of the Internet and other
information technologies to provide increased opportunities for citizen
access to Government information and services, and for other purposes.
After consideration of all relevant material presented, including
the Committee's recommendation, and other information, it is found that
finalizing the interim final rule, without change, as published in the
Federal Register (71 FR 26817, May 9, 2006) will tend to effectuate the
declared policy of the Act.
The U.S. Trade Representative has reviewed this final rule and
concurs with its issuance.
List of Subjects in 7 CFR Parts 924 and 944
Plums, Prunes, Marketing agreements, Reporting and recordkeeping
requirements.
PART 924--FRESH PRUNES GROWN IN DESIGNATED COUNTIES IN WASHINGTON
AND IN UMATILLA COUNTY, OREGON
PART 944--FRUITS; IMPORT REGULATIONS
0
Accordingly, the interim final rule amending 7 CFR parts 924 and 944
which was published at 71 FR 26817 on May 9, 2006, is adopted as a
final rule without change.
Dated: October 10, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E6-17192 Filed 10-16-06; 8:45 am]
BILLING CODE 3410-02-P