Amendments to the Marketing Order of Grapes Grown in a Southeastern California
| Citation | 86 FR 44644 |
| Record Number | 2021-17233 |
| Published date | 13 August 2021 |
| Court | Agricultural Marketing Service |
Federal Register, Volume 86 Issue 154 (Friday, August 13, 2021)
[Federal Register Volume 86, Number 154 (Friday, August 13, 2021)]
[Proposed Rules]
[Pages 44644-44647]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-17233]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 925
[Doc. No.: AMS-SC-21-0049; SC21-925-2 PR]
Amendments to the Marketing Order of Grapes Grown in a
Southeastern California
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This rule invites comments on proposed amendments to Marketing
Order No. 925, which regulates the handling of grapes grown in a
designated area of southeastern California. Proposed amendments would
change the California Desert
[[Page 44645]]
Grape Administrative Committee's (Committee) size, and its quorum and
voting requirements.
DATES: Comments must be received by October 12, 2021.
ADDRESSES: Interested persons are invited to submit written comments
concerning this proposed rule. Comments must be sent to the Docket
Clerk, Marketing Order and Agreement Division, Specialty Crops Program,
AMS, USDA, 1400 Independence Avenue SW, STOP 0237, Washington, DC
20250-0237; or submitted to internet: https://www.regulations.gov. All
comments should reference the document 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, or can be viewed at: https://www.regulations.gov. All
comments submitted in response to this proposed rule will be included
in the record and will be made available to the public. Please be
advised that the identity of the individuals or entities submitting the
comments will be made public on the internet at the address provided
above.
FOR FURTHER INFORMATION CONTACT: Pushpa Kathir, Marketing Specialist,
or Matthew Pavone, Chief, Rulemaking Services Branch, Marketing Order
and Agreement Division, Specialty Crops Program, AMS, USDA, 1400
Independence Avenue SW, Stop 0237, Washington, DC 20250-0237;
Telephone: (202) 720-2491, [email protected].
Small businesses may request information on complying with this
regulation by contacting Richard Lower, Marketing Order and Agreement
Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue
SW, STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, or
Email: [email protected].
SUPPLEMENTARY INFORMATION: This action, pursuant to 5 U.S.C. 553,
proposes amendments to regulations issued to carry out a marketing
order as defined in 7 CFR 900.2(j). This proposal is issued under
Marketing Order No. 925, as amended (7 CFR part 925), regulating the
handling of grapes grown in a designated area of southeastern
California. Part 925 (referred to as 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 Committee locally
administers the Order and is comprised of grape producers and handlers
operating within the area of production, and a public member.
Section 8c(17) of the Act (7 U.S.C 608c(17)) and the applicable
rules of practice and procedure governing the formulation of marketing
agreements and orders (7 CFR part 900) authorize amendment of the Order
through this informal rulemaking action. The Agricultural Marketing
Service (AMS) will consider comments received in response to this
proposed rule and, based on all the information available, will
determine if the Order amendment is warranted. If AMS determines
amendment of the Order is warranted, a subsequent proposed rule and
notice of referendum would be issued and producers would be allowed to
vote for or against the proposed amendments. AMS would then issue a
final rule effectuating any amendments approved by producers in the
referendum.
The Department of Agriculture (USDA) is issuing this proposed rule
in conformance with Executive Orders 12866 and 13563. Executive Orders
12866 and 13563 direct agencies to assess all costs and benefits of
available regulatory alternatives and, if regulation is necessary, to
select regulatory approaches that maximize net benefits (including
potential economic, environmental, public health and safety effects,
distributive impacts and equity). Executive Order 13563 emphasizes the
importance of quantifying both costs and benefits, reducing costs,
harmonizing rules, and promoting flexibility. This action falls within
a category of regulatory actions that the Office of Management and
Budget (OMB) exempted from Executive Order 12866 review.
In addition, this proposed rule has been reviewed under Executive
Order 13175--Consultation and Coordination with Indian Tribal
Governments, which requires agencies to consider whether their
rulemaking actions would have tribal implications. AMS has determined
this proposed rule is unlikely to have substantial direct effects on
one or more Indian tribes, on the relationship between the Federal
Government and Indian tribes, or on the distribution of power and
responsibilities between the Federal Government and Indian tribes.
This proposal has also been reviewed under Executive Order 12988,
Civil Justice Reform. This rule is not intended to have retroactive
effect. This rule shall not be deemed to preclude, preempt, or
supersede any State program covering grapes grown in a designated area
of Southeastern California.
The Act provides that administrative proceedings must be exhausted
before parties may file suit in court. Under section 8c(15)(A) of the
Act (7 U.S.C. 608(15)(A)), 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 no later than 20 days
after the date of entry of the ruling.
Section 1504 of the Food, Conservation, and Energy Act of 2008
(2008 Farm Bill) (Pub. L. 110-246) amended section 8c(17) of the Act,
which in turn required the addition of supplemental rules of practice
to 7 CFR part 900 (73 FR 49307; August 21, 2008). The amendment of
section 8c(17) of the Act and supplemental rules of practice authorize
the use of informal rulemaking (5 U.S.C. 553) to amend Federal fruit,
vegetable, and nut marketing agreements and orders. USDA may use
informal rulemaking to amend marketing orders depending upon the nature
and complexity of proposed amendments, potential regulatory and
economic impacts on affected entities, and any other relevant matters.
AMS has considered these factors and has determined that amendments
proposed herein are not unduly complex and the nature of proposed
amendments is appropriate for utilizing the informal rulemaking process
to amend the Order. A discussion of the potential regulatory and
economic impacts on affected entities is discussed later in the
``Initial Regulatory Flexibility Analysis'' section of this proposed
rule.
The Committee unanimously recommended amendments following
deliberations at the public meeting held on April 13, 2021. Proposals
would amend the Order by changing the Committee's size, as well as its
quorum and voting requirements.
Proposal 1--Reduce Committee Size
Sec. 925.20 provides that the Committee consists of 12 members
and, for each member of the Committee, there must be an alternate who
has the same qualifications as the member. This proposal would amend
Sec. 925.20 by reducing the size of the Committee from 12 to 10
members. The requirement that
[[Page 44646]]
each member has an alternate with the same qualifications as the member
would remain unchanged. Four members and their alternates would be
producers, officers, or employees of producers (producer members). Four
members and their alternates would be handlers, officers, or employees
of handlers (handler members). One member and alternate would be either
a producer, handler, or officer or employee thereof. One member and
alternate would represent the public.
Since promulgation of the Order in 1980, the California table grape
industry has seen reductions of about 55% of its producers and 58% of
registered handlers. Natural industry consolidation and land
development pressure have also contributed to this decline. Decreasing
the Committee's size from 12 members to 10 members would make Committee
membership more reflective of today's industry and enable the Committee
to fill all its member positions without difficulty.
Proposal 2--Revise Quorum and Voting Requirements
Currently, Sec. 925.30 states that eight members of the Committee
shall constitute a quorum, and any action of the committee shall
require at least eight concurring votes.
The proposed change would modify Sec. 925.30 to allow six members
to constitute a quorum including at a minimum one producer member and
one handler member, with six concurring votes required to pass any
motion or approve any Committee action. The Committee is experiencing
difficulties filling all seats and obtaining a quorum at meetings to
conduct business activities. Adjusting current requirements would
enable the Committee to operate fully mitigating the risk of not
establishing a quorum during scheduled meetings and not having the
required votes to pass any action. These changes would help to
streamline the Committee's operations and increase its effectiveness.
Initial Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA) (5 U.S.C. 601-612), AMS has considered the economic impact of
this proposed 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
businesses subject to such actions so that small businesses will not be
unduly or disproportionately burdened.
Small agricultural producers have been defined by the Small
Business Administration (SBA) (13 CFR 121.201) as those having annual
receipts of no more than $1,000,000. Small agricultural service firms
(handlers) are defined as those with annual receipts of no more than
$30,000,000.
Proposed amendments to the California desert grape marketing order
would reduce the number of member and alternate seats on the California
Desert Grape Administrative Committee from 12 to 10 and reduce quorum
and voting requirements from 8 to 6 members. These amendments are
necessary to reflect the industry's consolidation. Since the
promulgation of the marketing order in 1980, the California desert
grape industry has lost roughly 55 percent of its producers and 58
percent of the registered handlers.
The Committee reports that there are 21 producers and 10 handlers
of table grapes in the marketing order production region. The Committee
packout reports show that average annual packout for 2018 through 2020
was 3.2127 million 18-pound containers, equivalent to 28,914 tons. The
3-year average of California fresh table grape prices was $1,267 per
ton. Multiplying quantity times price yields an annual average crop
value estimate of $36.634 million. Dividing the average crop value
estimate by the number of producers (21) yields an average crop value
per producer of $1.744 million, moderately larger than the SBA small
farm size threshold of $1,000,000. Therefore, using the estimated
prices, packout volume, and number of producers, and assuming a normal
bell-curve distribution of receipts among producers, AMS estimates the
majority of producers would qualify as large businesses under the SBA
definition.
Dividing the average crop value of $36.634 million by the number of
handers (10) yields a per-handler estimate of $3.663 million, well
below the SBA small business threshold of $30,000,000 in annual
receipts. However, that computation measures handler annual receipts
using producer-level crop value data, since AMS is unable to locate an
estimate of a hander margin. A range of handler margin estimates would
be 30 to 40 percent above the grower price. Applying those two
percentages, a range of handler annual receipts estimates would be $4.8
to $5.1 million, still well below $30,000,000. Therefore, using these
estimated prices, utilization volume, handler margin estimates and
number of handlers, and assuming a normal bell-curve distribution of
receipts among handlers, AMS estimates that the majority of handlers
would meet the SBA definition of small businesses.
AMS has determined that these proposed amendments would not have a
significant impact on a substantial number of small businesses. Rather,
large and small entities alike would be expected to benefit from the
Committee's improved ability to address important issues of interest to
all on a timely basis. The proposed reduction in the number of seats on
the Committee, and the reduced quorum and voting requirements, would
not require any significant changes in producer or handler business
operations, and no significant industry educational effort would be
needed. Producers and handlers, large and small alike, would incur no
additional costs. No small businesses would be unduly or
disproportionately burdened.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35), the Order's information collection requirements have been
previously approved by OMB and assigned OMB No. 0581-0189, Fruit Crops.
No changes in those requirements are necessary because of this action.
Should any changes become necessary, they would be submitted to OMB for
approval.
This proposed rule would impose no additional reporting or
recordkeeping requirements on either small or large California table
grape 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.
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.
USDA has not identified any relevant Federal rules that duplicate,
overlap, or conflict with this action.
The Committee's meetings are widely publicized throughout the
southeastern California table grape production area. All interested
persons are invited to attend the meeting and encouraged to participate
in Committee deliberations on all issues. Like all Committee meetings,
the April 13, 2021 meeting was public, and all entities, both large and
small, were encouraged to express their views on the proposals.
Interested persons are invited to submit comments on the proposed
amendments to the Order, including comments on the regulatory and
information collection impacts of this action on small businesses.
[[Page 44647]]
Following analysis of any comments received on the amendments in
this proposed rule, AMS will evaluate all available information and
determine whether to proceed. If appropriate, a proposed rule and
notice of referendum would be issued, and producers would be provided
the opportunity to vote for or against the proposed amendments.
Information about the referendum, including dates and voter eligibility
requirements, would be published in a future issue of the Federal
Register. A final rule would then be issued to effectuate any
amendments favored by producers participating in the referendum.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at:
https://www.ams.usda.gov/rules-regulations/moa/small-businesses. Any
questions about the compliance guide should be sent to Richard Lower at
the previously mentioned address in the FOR FURTHER INFORMATION CONTACT
section.
General Findings
Findings hereinafter set forth are supplementary to findings and
determinations that were previously made in connection with the
issuance of Marketing Order 925; and all said previous findings and
determinations are hereby ratified and affirmed, except insofar as such
findings and determinations may be in conflict with the findings and
determinations set forth herein.
1. Marketing Order 925, as hereby proposed to be amended, and all
terms and conditions thereof, would tend to effectuate the declared
policy of the Act;
2. Marketing Order 925, as hereby proposed to be amended, regulates
the handling of grapes grown in southeastern California and is
applicable only to persons in respective classes of commercial and
industrial activity specified in the Order;
3. Marketing Order 925, as hereby proposed to be amended, is
limited in application to the smallest regional production area which
is practicable, consistent with carrying out the declared policy of the
Act, and the issuance of several marketing orders applicable to
subdivisions of the production area would not effectively carry out the
declared policy of the Act;
4. Marketing Order 925, as hereby proposed to be amended,
prescribes, insofar as practicable, such different terms applicable to
different parts of the production area as are necessary to give due
recognition to the differences in the production and marketing of
grapes produced or packed in the production area; and
5. All handling of grapes produced or packed in the production
area, as defined in Marketing Order 925, is in the current of
interstate or foreign commerce or directly burdens, obstructs, or
affects such commerce.
A 60-day comment period is provided to allow interested persons to
respond to these proposals. Any comments received on amendments
proposed in this rule will be analyzed, and if AMS determines to
proceed based on all the information presented, a producer referendum
would be conducted to determine producer support for the proposed
amendments. If appropriate, a final rule would then be issued to
effectuate the amendments favored by producers participating in the
referendum.
List of Subjects in 7 CFR Part 925
Grapes, Marketing agreements, Reporting and recordkeeping
requirements.
For reasons set forth in the preamble, 7 CFR part 925 is proposed
to be amended as follows:
PART 925--GRAPES GROWN IN A DESIGNATED AREA OF SOUTHEASTERN
CALIFORNIA.
0
1. The authority citation for 7 CFR part 925 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
0
2. In Sec. 925.20, revise paragraph (a) to read as follows:
Sec. 925.20 Establishment and membership.
(a) There is hereby established a California Desert Grape Committee
consisting of 10 members, each of whom shall have an alternate who
shall have the same qualifications as the member. Four members and
their alternates shall be producers, officers or employees of producers
(producer members). Four members and their alternates shall be
handlers, or officers or employees of handlers (handler members). One
member and alternate shall be either a producer or handler, or an
officer or employee thereof. One member and alternate shall represent
the public.
* * * * *
0
3. In Sec. 925.30, revise paragraph (a) to read as follows:
Sec. 925.30 Procedure.
(a) Six members of the committee shall constitute a quorum,
including at a minimum one producer representative and one handler
representative, and any action of the committee shall require at least
six concurring votes;
* * * * *
Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2021-17233 Filed 8-12-21; 8:45 am]
BILLING CODE P
