[Federal Register: October 7, 2003 (Volume 68, Number 194)]
[Rules and Regulations]               
[Page 57783-57785]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07oc03-1]                         






Rules and Regulations
                                                Federal Register
________________________________________________________________________

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[[Page 57783]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 993

[Docket No. FV03-993-2 FIR]

 
Dried Prunes Produced in California; Temporary Suspension of the 
Prune Reserve and the Voluntary Producer Prune Plum Diversion 
Provisions

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (USDA) is adopting, as a final 
rule, without change, an interim final rule suspending the prune 
reserve and the voluntary producer prune plum diversion provisions in 
the California Dried Prune Marketing Order (order) and the 
administrative rules and regulations related to volume control 
restrictions for a five-year period. The order regulates the handling 
of dried prunes produced in California and is administered locally by 
the Prune Marketing Committee (PMC). Suspension of these provisions 
ensures that volume control restrictions will not be implemented under 
the order. During the five-year suspension period, the industry will 
have the opportunity to determine whether these provisions should be 
modified, terminated, or continue unchanged. In the absence of 
additional rulemaking to modify or terminate these provisions, they 
will come back into effect automatically at the end of the five-year 
period.

EFFECTIVE DATE: November 6, 2003.

FOR FURTHER INFORMATION CONTACT: Richard P. Van Diest, Marketing 
Specialist, California Marketing Field Office, Marketing Order 
Administration Branch, 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, 1400 Independence Avenue SW., STOP 0237, Washington, DC 
20250-0237; telephone: (202) 720-2491, or Fax: (202) 720-8938.
    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. 993 (7 CFR part 993), both as amended, 
regulating the handling of dried prunes produced 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.''
    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.
    This rule continues in effect the suspension for five years of all 
provisions in the order and administrative rules and regulations 
concerning the prune reserve and voluntary producer prune plum 
diversion. This action was unanimously recommended by the PMC. This 
rule will continue to ensure that reserve percentages are not 
established, and that a prune plum diversion program is not implemented 
pursuant to these provisions. During the five-year suspension period, 
the industry will have the opportunity to determine whether these 
provisions should be modified, terminated, or remain unchanged.

Marketing Order Authority To Suspend

    Section 993.90(a) states in part: ``The Secretary shall terminate 
or suspend the operation of any or all of the provisions of this 
subpart, whenever he/she finds that such provisions do not tend to 
effectuate the declared policy of the act.''

Volume Regulation Provisions

    Section 993.54 of the order provides authority for volume 
regulation through establishing salable and reserve percentages of 
prunes received by handlers (prune reserve). When the prune reserve is 
in effect, the salable percentage of the California prune crop may be 
sold to any market while the reserve percentage must be held by the 
handlers for the account of the PMC. Reserve prunes may be sold to meet 
either domestic or foreign trade demand or for use in outlets 
noncompetitive with normal outlets for salable prunes. Net proceeds 
from sales of reserve prunes are ultimately distributed to producers. 
The prune reserve is designed to promote orderly marketing conditions, 
stabilize prices and supplies, and improve producer returns.

Voluntary Prune Plum Diversion Program

    Section 993.62 of the order authorizes a producer diversion 
program, which prune producers may use when a prune reserve is 
implemented. Section 993.162 of the administrative rules and 
regulations specifies implementing procedures. Under the producer 
diversion program, any prune producer may divert prune plums of his own 
production for eligible purposes and receive a diversion certificate 
from the PMC. The certificate may be submitted to any handler in lieu 
of reserve prunes

[[Page 57784]]

and the handler may apply the quantity represented by the certificate 
towards his reserve obligation. Participation in this program reduces a 
producer's expenses to convert prune plums into dried prunes that will 
ultimately be placed in a relatively low value prune reserve.

Background and Action Taken

    The prune reserve was last implemented in 1974 and the producer 
diversion program was last used in 1971. These programs were 
controversial in the 1970's and have become increasingly so since then. 
Some of the independent prune handlers who are also prune producers now 
oppose any regulatory marketing restrictions because they want to sell 
all of the prunes they have produced. If additional tonnage were 
needed, such handlers would buy prunes from other producers to meet 
their market demand. In addition, if a prune reserve is implemented, it 
may require these handlers to contract for additional tonnage in order 
to meet their reserve obligation.
    Recently in 2001, when the PMC recommended using supply control 
techniques, some of the independent handlers and producers opposed the 
use of these programs. Ultimately, the supply control programs were not 
implemented at that time. Also, some in the industry do not support the 
use of these supply control provisions because the industry has 
successfully reduced crop sizes through other means.
    Through industry and USDA funded tree pull programs, the industry 
has removed over 18,000 acres of prune plum trees; thus reducing the 
annual prune production by at least 27,000 tons of prunes over the 
five-year suspension period.
    During the five-year suspension period, the industry will have the 
opportunity to either recommend that these provisions be terminated 
through rulemaking procedures, or recommend modifications to the 
provisions to make them more acceptable to all segments of the 
industry. In the interim, the suspension of these provisions continues 
to ensure that these provisions are not implemented. In the absence of 
any additional action, the provisions will automatically come back into 
effect at the end of the five-year suspension period.
    The PMC unanimously recommended this action at an April 3, 2003, 
meeting. This rule continues to suspend Sec. Sec.  993.21d, 993.36(i), 
993.54, 993.55, 993.56, 993.57, 993.58, 993.59, 993.62, and 993.65 of 
the order, and Sec. Sec.  993.156, 993.157, 993.158, 993.159, 993.162, 
993.165 and 993.172(e) of the administrative rules and regulations in 
effect under the order. Portions of Sec. Sec.  993.33 and 993.41(b) of 
the order and portions of Sec. Sec.  993.173(a)(6), 993.173(b)(3), and 
993.173(c)(1) of the administrative rules and regulations continue to 
be suspended. These sections of the order and administrative rules and 
regulations pertain to the various requirements of the prune reserve 
and producer diversion programs.

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 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.

Industry Profile

    There are approximately 1,205 producers of dried prunes in the 
production area and approximately 21 handlers subject to regulation 
under the marketing order. Small agricultural producers are defined by 
the Small Business Administration (13 CFR 121.201) as those having 
annual receipts of less than $750,000, and small agricultural service 
firms are defined as those having annual receipts of less than 
$5,000,000.
    Eight of the 21 handlers (38 percent) shipped over $5,000,000 worth 
of dried prunes and could be considered large handlers by the Small 
Business Administration. Thirteen of the 21 handlers (62 percent) 
shipped less than $5,000,000 worth of dried prunes and could be 
considered small handlers. An estimated 32 producers, or less than 3 
percent of the 1,205 total producers, would be considered large growers 
with annual incomes over $750,000. The majority of handlers and 
producers of California dried prunes may be classified as small 
entities.

Summary of Rule Change

    This rule continues to suspend for five years all provisions in the 
order and administrative rules and regulations concerning the prune 
reserve and voluntary producer diversion programs. These supply control 
programs have been and continue to be controversial in the industry. 
Furthermore, the industry has successfully reduced crop sizes through 
other means. Through industry and USDA funded tree pull programs, over 
18,000 acres of prune plum trees have been removed, reducing production 
by at least 27,000 tons over the five-year suspension period.
    This rule continues to ensure that the reserve and diversion volume 
control programs will not be implemented for the five-year suspension 
period. Also, during the suspension period, the industry will have the 
opportunity to determine whether these provisions should be modified, 
terminated, or remain the same. In the absence of further rulemaking, 
these provisions will automatically come back into effect at the end of 
the suspension period. Authority to suspend these provisions of the 
marketing order and administrative rules and regulations is provided in 
Sec.  993.90(a) of the order.

Impact of Regulation

    Regarding the impact of this rule on affected entities, this action 
could reduce the reporting and recordkeeping burden on California prune 
handlers and producers and reduce some of the PMC's administrative 
costs. Although the prune reserve and producer diversion programs have 
not been implemented since the 1970s and handlers and producers have 
not been required to file reports pertaining to these programs, 
suspending these provisions continues to reduce the potential reporting 
burden on handlers and producers. Suspension of the provisions 
continues to eliminate the possibility of requiring handlers and 
producers to file reports associated with the programs. It also 
continues to reduce some of the potential PMC administrative costs of 
managing these programs. The PMC estimates that 21 California prune 
handlers are subject to these provisions and to filing reports 
pertaining to these programs. Also, if a producer diversion program was 
implemented, it is estimated that as many as 300 producers would file 
forms applicable to this program. If handlers filed reports under the 
prune reserve program, their estimated burden would be 57 hours. If 
growers filed reports under the diversion program, their estimated 
burden would be 75.58 hours. Thus, there is a potential for reducing 
the estimated annual burden of 132.58 hours. The benefits of this rule 
apply to all prune handlers and producers, regardless of their size of 
operation.

[[Page 57785]]

    The forms applicable to these programs are as follows: (1) Form PMC 
4.1, Reserve Prunes Held--Handler; (2) Form PMC 4.2, Prune Reserve 
Tonnage Sales Agreement; (3) Form PMC 4.5, Certificate of Insurance 
Coverage; (4) Form PMC 5.1, Notice of Proposed Intent to Store Reserve 
Prunes; (5) Form PMC 8.44, Request for Replacement of Draft; (6) Form 
PMC 8.443, Claim for Reserve Pool Proceeds; (7) Form PMC 9.1, 
Notification of Desire for Deferment of Reserve Withholding; (8) Form 
PMC 10.1, Application for Prune Plum Diversion; (9) No form number, 
Proof of Diversion; and (10) No form number, Notification of Report of 
Diversion.
    It should be noted that if the PMC determines this action is having 
an unfavorable impact on the industry, it could meet and recommend 
rescinding the suspension. Also, as previously mentioned, the 
provisions automatically come back into effect at the end of the 
suspension period.

Alternatives Considered

    The PMC and industry members discussed different alternatives to 
this action at the PMC's April 3, 2003, meeting. The PMC discussed the 
possibility of amending the marketing order provisions relating to 
reserve and producer diversion programs but decided to eliminate the 
prune reserve and producer diversion provisions from the order and 
administrative rules and regulations in a more timely fashion. During 
the suspension, the industry will have the opportunity to consider 
possible order amendments to the volume control provisions. Another 
alternative was to terminate the marketing order. Many on the PMC and 
in the industry deemed termination too drastic an action and preferred 
to preserve the marketing order and make necessary changes to it to 
meet current industry needs and to reflect current industry marketing 
practices.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the applicable forms being suspended by this rule were 
approved previously by the Office of Management and Budget and assigned 
OMB No. 0581-0178. 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, USDA has not identified any relevant Federal rules 
that duplicate, overlap or conflict with this rule.
    The PMC's April 3, 2003, meeting where this issue was deliberated 
was widely publicized throughout the prune industry and all interested 
persons were invited to attend the meeting and participate in the 
industry's deliberations. Like all PMC meetings, this meeting was a 
public meeting and all entities, both large and small, were able to 
express their views on these issues.
    An interim final rule concerning this action was published in the 
Federal Register on July 9, 2003. The PMC's staff mailed copies of the 
rule to all PMC members, alternates, and prune handlers. In addition, 
the rule was made available through the Internet by the Office of the 
Federal Register and USDA. That rule provided for a 60-day comment 
period which ended on September 8, 2003. No comments were received.
    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.
    After consideration of all relevant material presented, including 
the PMC's recommendation, and other information, it is found that 
finalizing the interim final rule, without change, as published in the 
Federal Register (68 FR 40754, July 9, 2003) will tend to effectuate 
the declared policy of the Act.

List of Subjects in 7 CFR Part 993

    Marketing agreements, Plums, Prunes, Reporting and recordkeeping 
requirements.

PART 993--DRIED PRUNES PRODUCED IN CALIFORNIA

0
Accordingly, the interim final rule amending 7 CFR part 993 which was 
published at 68 FR 40754 on July 9, 2003, is adopted as a final rule 
without change.

    Dated: October 1, 2003.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 03-25312 Filed 10-6-03; 8:45 am]

BILLING CODE 3410-02-P