Practice and procedure: California,
[Federal Register: December 3, 2002 (Volume 67, Number 232)]
[Rules and Regulations]
[Page 71803-71808]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03de02-3]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 989
[Docket No. FV02-989-6 FIR]
Raisins Produced From Grapes Grown In California; Decrease in Desirable Carryout Used to Compute Trade Demand
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
SUMMARY: The Department of Agriculture (USDA) is adopting, as a final rule, without change, an interim final rule that decreased the desirable carryout used to compute the yearly trade demand for raisins covered under the Federal marketing order for California raisins (order). The order regulates the handling of raisins produced from grapes grown in California and is administered locally by the Raisin Administrative Committee (Committee). This action continues to decrease the amount of tonnage available early in the season and is expected to help the industry reduce an oversupply of California raisins.
EFFECTIVE DATE: January 2, 2003.
FOR FURTHER INFORMATION CONTACT: Maureen T. Pello, Senior 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, 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. 989 (7 CFR part 989), both as amended, regulating the handling of raisins produced from grapes grown 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.''
The Department of Agriculture (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 in equity 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 to decrease the desirable carryout used to compute the yearly trade demand for raisins regulated under the order. Trade demand is computed based on a formula specified in the order, and is used to determine volume regulation percentages for each crop year, if necessary. Desirable carryout, one factor
[[Page 71804]]
in this formula, is the amount of tonnage from the prior crop year needed during the first part of the next crop year to meet market needs, before new crop raisins are available. This action continues to decrease the desirable carryout for Natural (sun-dried) Seedless (NS) raisins from a rolling average of 3 to 2 months of prior year's shipments over the past 5 years, dropping the high and low figures, and dividing the remaining sum by three, or 60,000 natural condition tons, whichever is higher. This action also continues to decrease the desirable carryout for all other varietal types of raisins covered under the order from a rolling average of 3 to 2\1/2\ months of prior year's shipments over the past 5 years, dropping the high and low figures, and dividing the remaining sum by three. These actions were recommended by the Committee at meetings held on June 27 and July 24, 2002.
The order provides authority for volume regulation designed to promote orderly marketing conditions, stabilize prices and supplies, and improve producer returns. When volume regulation is in effect, a certain percentage of the California raisin crop may be sold by handlers to any market (free tonnage) while the remaining percentage must be held by handlers in a reserve pool (reserve) for the account of the Committee. Reserve raisins are disposed of through certain programs authorized under the order. For instance, reserve raisins may be sold by the Committee to handlers for free use or to replace part of the free tonnage raisins they exported; used in diversion programs; carried over as a hedge against a short crop the following year; or disposed of in other outlets not competitive with those for free tonnage raisins, such as government purchase, distilleries, or animal feed. Funds generated from sales of reserve raisins are also used to support handler sales to export markets. Net proceeds from sales of reserve raisins are ultimately distributed to the reserve pool's equity holders, primarily producers.
Section 989.54 of the order prescribes procedures to be followed in establishing volume regulation and includes methodology used to calculate volume regulation percentages. Trade demand is based on a computed formula specified in this section, and is also part of the formula used to determine volume regulation percentages. Trade demand is equal to 90 percent of the prior year's shipments, adjusted by the carryin and desirable carryout inventories.
At one time, Sec. 989.54(a) also specified actual tonnages for desirable carryout for each varietal type regulated. However, in 1989, these tonnages were suspended from the order, and flexibility was added so that the Committee could adopt a formula for desirable carryout in the order's rules and regulations. The formula has allowed the Committee to periodically adjust the desirable carryout to better reflect changes in each season's marketing conditions.
The formula for desirable carryout has been specified since 1989 in Sec. 989.154. Initially, the formula was established so that desirable carryout was based on shipments for the first 3 months of the prior crop year--August, September, and October (the crop year runs from August 1 through July 31). This amount was gradually reduced to 2\1/2\ months in 1991-92, 2\1/4\ months in 1995-96, and to 2 months in 1996- 97. The Committee reduced the desirable carryout between 1991-1997 because it believed that an excessive supply of raisins was available early in a new crop year creating unstable market conditions.
In 1998, the Committee determined that, because of the reduced desirable carryout, not enough raisins were being made available for growth. Thus, the desirable carryout was increased to 2\1/2\ months of prior year's shipments to allow for a higher trade demand figure and, thus, a higher free tonnage percentage, making more raisins available to handlers, especially for immediate use early in the season when supplies are often tight. This action also allowed desirable carryout to move towards what handlers actually hold in inventory at the end of a crop year, or about 100,000 tons. The Committee continued this practice and, in 2000, desirable carryout was changed to equal a rolling average of 3 months of prior year's shipments (August, September, and October) over the past 5 years, dropping the high and low figures.
June 27, 2002, Recommendation
At a meeting on June 27, 2002, the Committee reviewed the desirable carryout level. Most Committee members believe that the supply of free tonnage raisins on the market has once again become excessive and is contributing to unstable market conditions. The following table illustrates how handler inventories for NS raisins have been building in recent years:
Carryout Inventory Over Past 5 Years
Carryout inventory Crop years
(Natural condition tons)
2001-02........................................ 133,815 (estimated) 2000-01........................................
116,131 1999-2000......................................
101,946 1998-99........................................
98,291 1997-98........................................
92,769
To moderate the oversupply of marketable tonnage early in the crop year, the Committee recommended reducing the desirable carryout level for all varietal types of raisins from a rolling average of 3 months (August, September, and October) to 2\1/2\ months (August, September, and one-half of October) of prior year's shipments over the past 5 years, dropping the high and low figures. Committee staff estimated that this change to the desirable carryout level would reduce the 2002 trade demand for NS raisins by 15,000 tons. Decreasing the trade demand will reduce the free tonnage percentage, thus, making less free tonnage available to handlers for immediate use.
The Committee's vote on this action was 41 in favor and 5 opposed. Two of the members voting no commented that the large carryout at the end of the current crop year was due mainly to an extra 32,000 tons of reserve raisins that were purchased by handlers in September 2001. They believe that the carryout problem will correct itself next season. Other members commented that this action would create a hardship on producers by reducing the free tonnage percentage, thereby reducing producer payments. After much deliberation, the majority of Committee members supported reducing the desirable carryout from a rolling average of 3 to 2\1/2\ months of shipments over the past 5 years, dropping the high and low figures.
Most of the discussion at the Committee's meeting concerned the desirable carryout level for NS raisins. NS raisins are the major commercial varietal type of raisin produced in California. With the exception of the 1998-99 crop year, volume regulation has been implemented for NS raisins for the past several seasons. However, the Committee also believes that the decrease in desirable carryout should apply to the other varietal types of raisins covered under the order.
July 24, 2002, Revised Recommendation for NS Raisins
The raisin industry continued to explore other avenues to reduce the oversupply of California raisins, including implementing a ``surplus pool
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and non-harvest'' program for the 2002 crop year. However, rulemaking would be required as appropriate.
The Committee met on July 24, 2002, and revisited its oversupply situation and the desirable carryout issue. As a result, the Committee voted to further reduce the NS supply by decreasing the NS desirable carryout to a rolling average of 2 months (August and September) of prior year's shipments over the past 5 years, dropping the high and low figures, or 60,000 natural condition tons, whichever is higher. Committee staff estimated that this would reduce the 2002 trade demand for NS raisins by another 15,000 tons, or a total of 30,000 tons. The desirable carryout for all other varietal types would remain at the 2\1/2\ month level recommended in June 2002.
The Committee's vote on this action was 32 in favor, 10 opposed, and 2 abstentions. The members voting no were primarily concerned that this action would reduce the free tonnage percentage and producer payments.
Although this action tightens the supply of raisins available early in the season, handlers will still be provided an opportunity to increase their inventories, if necessary, by purchasing raisins from the reserve pool under order-mandated 10 plus 10 offers and other releases of reserve raisins available under the order. The 10 plus 10 offers are two offers of reserve pool raisins, which are made available to handlers each season. For each such offer, a quantity of raisins equal to 10 percent of the prior year's shipments is made available for free use. Although this rule tends to tighten the supply of raisins early in the season, handlers will still have the opportunity to obtain additional raisins from the 10 plus 10 offers. Thus, paragraph (a) in Sec. 989.154 is modified accordingly.
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.
There are approximately 20 handlers of California raisins who are subject to regulation under the order and approximately 4,500 raisin 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 $5,000,000, and small agricultural producers are defined as those having annual receipts of less than $750,000. Thirteen of the 20 handlers subject to regulation have annual sales estimated to be at least $5,000,000, and the remaining 7 handlers have sales less than $5,000,000. No more than 7 handlers, and a majority of producers, of California raisins may be classified as small entities.
This rule continues to reduce the desirable carryout used to compute the yearly trade demand for raisins regulated under the order. Trade demand is computed based on a formula specified under Sec. 989.54(a) of the order. It is also part of another formula used to determine volume regulation percentages for each crop year, if necessary. Desirable carryout, one factor in this formula, is the amount of tonnage from the prior crop year needed during the first part of the next crop year to meet market needs, before new crop raisins are available. This rule continues to reduce the desirable carryout specified in paragraph (a) of Sec. 989.154 for NS raisins from a rolling average of 3 months (August, September, and October) to 2 months (August and September) of prior year's shipments for the past 5 years, dropping the high and low figures, and dividing the remaining sum by three, or 60,000 natural condition tons, whichever is higher. This rule also continues to reduce the desirable carryout for all other varietal types covered under the order from 3 months (August, September, and October) to 2\1/2\ months (August, September, and one- half of October) of prior year's shipments for the past 5 years, dropping the high and low figures, and dividing the remaining sum by three.
The desirable carryout level applies uniformly to all handlers in the industry, whether small or large, and there are no known additional costs incurred by small handlers. As previously mentioned, reducing the desirable carryout will reduce the trade demand and free tonnage percentage, thus making less raisins available to handlers early in the season. This action is expected to help reduce the burdensome supply of California raisins, thereby improving market conditions. Handlers will be provided opportunities throughout the crop year to purchase raisins from the reserve pool to increase their inventories.
The Committee considered a number of alternative levels of desirable carryout. The Committee has an appointed subcommittee, which periodically holds public meetings to discuss changes to the order and other issues. The subcommittee met on June 26, 2002, and discussed desirable carryout. Some industry members supported maintaining the status quo. Others supported an incremental reduction to the desirable carryout, reducing the level to a rolling average of 2\3/4\ months in 2002, and to a rolling average of 2\1/2\ months in 2003. The subcommittee ultimately recommended to the full Committee in June that the desirable carryout be reduced for all varietal types to a rolling average of 2\1/2\ months of prior year's shipments for the past 5 years, dropping the high and low figures, and dividing the remaining sum by three. The full Committee adopted the subcommittee's June recommendation.
As mentioned earlier, the raisin industry continued to explore other avenues to reduce the oversupply of California raisins, including implementing a ``surplus pool and non-harvest'' program for the 2002 crop year. However, rulemaking would be required as appropriate.
The Committee revisited the desirable carryout issue on July 24, 2002. At that meeting, the Committee reviewed an alternative proposal that would revise the trade demand formula by eliminating the adjustment for carryin and carryout inventory. The Committee also reviewed the merits of reducing the desirable carryout for NS raisins to a rolling average of 2 months of prior year's shipments over the past 5 years, dropping the high and low figures, and dividing the remaining sum by three, or 60,000 natural condition tons, whichever is higher. After much discussion, the majority of Committee members supported further reducing the desirable carryout for NS raisins to this level. Committee staff estimated that this would reduce the 2002 trade demand for NS raisins by another 15,000 tons, or a total of 30,000 tons. The desirable carryout for all other varietal types would remain at the 2\1/2\ month level recommended in June 2002.
This rule imposes no additional reporting or recordkeeping requirements on either small or large raisin 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. Finally, USDA has not
[[Page 71806]]
identified any relevant Federal rules that duplicate, overlap or conflict with this rule.
In addition, the Committee's subcommittee meeting on June 26, 2002, and the Committee's meetings on June 27 and July 24, 2002, where this action was deliberated, were public meetings widely publicized throughout the raisin industry. All interested persons were invited to attend the meetings and participate in the industry's deliberations. Finally, all interested persons were invited to submit information on the regulatory and informational impacts of this action on small businesses.
Comments were received addressing the interim final rule including its initial regulatory flexibility analysis. These comments are addressed in the following discussion of comments received.
A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at the following Web site: 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.
An interim final rule concerning this action was published in the Federal Register on August 12, 2002 (67 FR 52390). Copies of the rule were mailed by Committee staff to all Committee members and alternates, the Raisin Bargaining Association, handlers and dehydrators. In addition, the rule was made available through the Internet by the Office of the Federal Register and USDA. That rule provided for a 10- day comment period that ended on August 22, 2002. Two comments were received. One favored the action. The other opposed the action.
The comment in favor stated that reducing the amount of NS raisins available to processors in terms of trade demand will not short the availability of raisins to the handler community because reserve raisins for free use can be made available to handlers under the marketing order. According to this commenter, producers need handlers to purchase their raisins and handlers need a marketing environment to sell those raisins in the most productive and efficient manner possible, and the reduction in desirable carryover appears to address both these needs.
The commenter opposed to the action stated that the reduction in desirable carryout is designed solely to protect the existing unsold inventory of weaker handlers. This action, however, is intended to decrease the amount of tonnage available early in the season and to help the industry reduce an oversupply of California raisins.
The commenter alleges that the decrease in desirable carryout, and eventually trade demand, first to 2.5 months and then to 2 months for NS raisins is entirely arbitrary and capricious. The commenter states that neither the Committee nor USDA have supplied price, revenue, or grower income responses to the formula change. Previous adjustments in desirable carryover were similarly lacking such analysis, according to the commenter.
The commenter states that the admitted effect of reducing carryout is to reduce trade demand by 30,000 tons, and, therefore, the total amount of free tonnage. The commenter contends that this would have a disproportionate impact on both growers and handlers based upon their relative sizes. According to the commenter, since one of the main effects of the proposal is price protection for existing inventory, those handlers with greater unsold inventories will experience more net gain compared to those handlers who hold less remaining inventory, thus creating a wealth transfer (from both growers and more efficient handlers) to those handlers less capable of effective marketing. The commenter further contends that the regulatory flexibility analysis is inadequate and defective and fails to take account of the net adverse effect on all growers and handlers of the lost revenue from reducing trade demand by 30,000 tons, and its addition to the unprofitable reserve.
The commenter further contends that the Committee and USDA have increasingly mismanaged the volume control program under the marketing order to produce a dynamically unstable condition of simultaneous oversupply and under-marketing. The commenter also contends that the volume control and various disposition programs for reserve raisins implemented under the order have prevented a normal and orderly supply response to changes in domestic and world demand and have contributed to unreasonable fluctuations in supplies and prices contrary to the Act.
The commenter states that the volume control program is careening out of control in terms of regulatory complexity, misallocation of resources, and distortions of supply, demand, and price signals. The Committee is losing consensus, has no strategic plan for the long-run future of the industry, and volume control should be stopped immediately. Only then, the commenter states, will supply, demand, and price balance be restored to long-term equilibrium. According to the commenter, wasting half the crop is simply absurd, and the raisin order was never intended as a prorate program or as an excuse to accumulate increasingly large price depressing surpluses. The commenter states that domestic price and supply manipulation is unwise, if not impossible, in an increasingly competitive world market.
The intent of volume control under the marketing order is to help stabilize raisin supplies and prices, strengthen market conditions, and improve producer returns. The marketing order has been quite successful in achieving these goals over the years. From the mid-1980's to the late 1990's producer prices were strong, demand in export was growing, and demand domestically was holding steady, due in part to the volume control programs implemented under the marketing order.
It is true that the industry has been experiencing an oversupply of raisins and weak marketing conditions since 1999. However, an immediate stop to volume regulation could result in an even worse situation and more than one-half of the expected 2002-03 crop probably would have to be disposed of in low return outlets.
The raisin industry has more raisins than it can sell, is faced with low prices, and weak domestic and export demand. It needs some means to help improve the situation. Most of the raisins produced are made from the Thompson Seedless grape, and the predominant raisin varietal is Natural (sun-dried) Seedless, comprising about 90 percent of the California crop. In previous seasons, producers earned as much as $1,425 a ton on raisins. Last season, the price dropped to about $880 per ton. This year's price has yet to be set, but is expected to be about the same or lower. Producers are having difficulty covering their production costs at such prices. Further, possible foreclosures on grower loans could add to the existing difficult situation.
Handlers are carrying in an aggregate of about 150,000 tons of 2001 NS crop inventory (about 45,000 tons higher than usual). With the large carryin, additional NS raisins available through a raisin-back export program (about 18,000 tons) and the 2002 diversion program (about 51,000 tons), and a 2002-03 bumper NS crop of about 400,000 tons, the available supply of NS raisins could exceed 600,000 tons. The industry ships about 310,000 tons of raisins annually. Thus, with no volume regulation the industry could have an excess of over 300,000 tons of raisins. This has made it difficult for handlers
[[Page 71807]]
and producers to agree on a field price, and handlers are continuing to have difficulty selling their raisins at competitive prices. Without a mechanism in place to withhold the excess from the market, much of the crop might be wasted, and weak marketing conditions would continue for both producers and handlers. This would be disastrous for both producers and handlers. On October 8, 2002, preliminary volume regulation percentages were computed and announced for 2002-03 by the Committee. For NS, Oleate Seedless, Zante Currant, and Other Seedless raisins, a percentage of the crop will be held in reserve, which is expected to help balance supply with demand, and help alleviate the economic pressures caused by oversupply, low prices, and weak demand.
USDA disagrees with the commenter's views concerning this rulemaking and the operation of the marketing order program. This action is intended to help the raisin industry alleviate the oversupply problem it is facing and as the commenter in favor of the action states, it should meet the marketing needs of both growers and handlers. This action is consistent with the Agricultural Marketing Agreement Act of 1937 and the marketing order as well as other applicable law.
The current volume regulation procedures are intended to fully supply the domestic and export markets, provide for market expansion, and help prevent oversupplies in the domestic market, and have been used in previous years to help the industry. These procedures have been used carefully in an attempt to help the industry consistent with the Act.
Before the 1975-76 crop year, more than 50 percent of the raisins were packed and sold directly to consumers. Now, over 60 percent of raisins are sold in bulk. This means that raisins are now sold to consumers mostly as an ingredient in another product such as cereal and baked goods. In addition, for a few years in the early 1970's, over 50 percent of the raisin grapes were sold to the wine market for crushing. Since then, the percent of raisin-variety grapes sold to the wine industry has decreased.
California's grapes are classified into three groups--table grapes, wine grapes, and raisin-variety grapes. Raisin-variety grapes are the most versatile of the three types. They can be marketed as fresh grapes, crushed for juice in the production of wine or juice concentrate, or dried into raisins. Annual fluctuations in the fresh grape, wine, and concentrate markets, as well as weather-related factors, cause fluctuations in raisin supply. This type of situation introduces a certain amount of variability into the raisin market. Although the size of the crop for raisin-variety grapes may be known, the amount dried for raisins depends on the demand for crushing. This makes the marketing of raisins a more difficult task. These supply fluctuations can result in producer price instability and disorderly market conditions.
Volume regulation is helpful to the raisin industry because it lessens the impact of such fluctuations and contributes to orderly marketing. For example, producer prices for NS raisins have remained fairly steady between the 1992-93 through the 1997-98 seasons, although production has varied. As shown in the table below, during those years, production varied from a low of 272,063 tons in 1996-97 to a high of 387,007 tons in 1993-94, or about 42 percent. According to Committee data, the total producer return per ton during those years, which includes proceeds from both free tonnage plus reserve pool raisins, has varied from a low of $901 in 1992-93 to a high of $1,049 in 1996-97, or 16 percent. Total producer prices for the 1998-99 and 1999-2000 season increased significantly due to back-to-back short crops during those years.
Natural Seedless Producer Prices
Production (natural Producer Crop year
condition prices tons)
2000-2001..................................... 432,616 \1\ $570.82 1999-2000..................................... 299,910 1,211.25 1998-99....................................... 240,469
\2\ 1,290.00 1997-98....................................... 382,448 946.52 1996-97....................................... 272,063 1,049.20 1995-96....................................... 325,911 1,007.19 1994-95....................................... 378,427 928.27 1993-94....................................... 387,007 904.60 1992-93....................................... 371,516 901.41
\1\ Return to date, reserve pool still open. \2\ No volume regulation.
There are essentially two broad markets for raisins--domestic and export. In recent years, both export and domestic shipments have been decreasing. Domestic shipments decreased from a high of 204,805 packed tons during the 1990-91 crop year to a low of 156,325 packed tons in 1999-2000. In addition, exports decreased from 114,576 packed tons in 1991-92 to 91,600 packed tons in the 1999-2000 crop year.
In addition, the per capita consumption of raisins has declined from 2.07 pounds in 1988 to 1.55 pounds in 2000. This decrease is consistent with the decrease in the per capita consumption of dried fruits in general, which is due to the increasing availability of most types of fresh fruit throughout the year.
While the overall demand for raisins has been decreasing (as reflected in decline in commercial shipments), production has been increasing. The production of dried raisins reached an all-time high of an estimated 432,616 tons in the 2000-01 crop year. This large crop was preceded by two short crop years; production was 240,469 tons in 1998- 99 and 299,910 tons in 1999-2000. Production for the 2000-01 crop year soared to a record level because of increased bearing acreage and yields. Estimated production is more moderate at 372,499 tons in 2001- 02. However, with 2001-02 carryin inventory totaling 116,131 tons, total available supply is quite large.
The order permits the industry to exercise supply control provisions, which allow for the establishment of
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free and reserve percentages, and establishment of a reserve pool. One of the primary purposes of establishing free and reserve percentages is to equilibrate supply and demand. If raisin markets are over-supplied with product, grower prices will decline.
Raisins are generally marketed at relatively lower price levels in the more elastic export market than in the more inelastic domestic market. This results in a larger volume of raisins being marketed and enhances grower returns. In addition, this system allows the U.S. raisin industry to be more competitive in export markets. crop year.
There are no known additional costs incurred by small handlers that are not incurred by large handlers. While the level of benefits of this rulemaking are difficult to quantify, the stabilizing effects of the volume regulations impact small and large handlers positively by helping them maintain and expand markets even though raisin supplies fluctuate widely from season to season. Likewise, price stability positively impacts small and large producers by allowing them to better anticipate the revenues their raisins will generate.
After consideration of all relevant material presented, including the information and recommendation submitted by the Committee, the comments received, and other available information, it is hereby found that this rule, as hereinafter set forth, will tend to effectuate the declared policy of the Act.
List of Subjects in 7 CFR Part 989
Grapes, Marketing agreements, Raisins, Reporting and recordkeeping requirements.
PART 989--RAISINS PRODUCED FROM GRAPES GROWN IN CALIFORNIA
Accordingly, the interim final rule amending 7 CFR part 989 which was published at 67 FR 52390 on August 12, 2002, is adopted as a final rule without change.
Dated: November 26, 2002. A. J. Yates, Administrator, Agricultural Marketing Service.
[FR Doc. 02-30583 Filed 12-2-02; 8:45 am]
BILLING CODE 3410-02-P
