Walnuts Grown in California; Stays of Reserve Obligation and Its Requirements
| Published date | 22 January 2020 |
| Citation | 85 FR 3551 |
| Record Number | 2020-00399 |
| Section | Proposed rules |
| Court | Agricultural Marketing Service |
Federal Register, Volume 85 Issue 14 (Wednesday, January 22, 2020)
[Federal Register Volume 85, Number 14 (Wednesday, January 22, 2020)]
[Proposed Rules]
[Pages 3551-3553]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-00399]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 85, No. 14 / Wednesday, January 22, 2020 /
Proposed Rules
[[Page 3551]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 984
[Docket No. AMS-SC-19-0088; SC19-984-2 PR]
Walnuts Grown in California; Stays of Reserve Obligation and Its
Requirements
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would implement a recommendation from the
California Walnut Board (Board) to stay the reserve obligation and its
requirements currently prescribed under the Federal marketing order for
walnuts grown in California. The proposed rule would also make
conforming changes to remove references to the reserve obligation and
its requirements.
DATES: Comments must be received by February 21, 2020.
ADDRESSES: Interested persons are invited to submit written comments
concerning this 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; Fax: (202) 720-8938; or internet: http://www.regulations.gov.
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: http://www.regulations.gov. All
comments submitted in response to this 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: Terry Vawter, Regional Director,
California Marketing Field Office, Marketing Order and Agreement
Division, Specialty Crops Program, AMS, USDA; Telephone: (559) 487-
5905, Fax: (559) 487-5906; or Email: [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,
Fax: (202) 720-8938, or Email: [email protected].
SUPPLEMENTARY INFORMATION: This action, pursuant to 5 U.S.C. 553,
proposes an amendment to regulations issued to carry out a marketing
order as defined in 7 CFR 900.2(j). This proposed rule is issued under
Marketing Order No. 984, as amended (7 CFR part 984), regulating the
handling of walnuts grown in California. Part 984 (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 Board locally administers the Order and is comprised of
growers and handlers of walnuts operating within California, and a
public member.
The Department of Agriculture (USDA) is issuing this proposed rule
in conformance with Executive Orders 13563 and 13175. This proposed
rule falls within a category of regulatory actions that the Office of
Management and Budget (OMB) exempted from Executive Order 12866 review.
Additionally, because this proposed rule does not meet the definition
of a significant regulatory action, it does not trigger the
requirements contained in Executive Order 13771. See OMB's Memorandum
titled ``Interim Guidance Implementing Section 2 of the Executive order
of January 30, 2017, titled `Reducing Regulation and Controlling
Regulatory Costs' '' (February 2, 2017).
This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. This proposed rule is not intended to have
retroactive effect.
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 proposed rule would stay the regulations related to reserve
walnuts under the Order. Section 984.89(b)(2) states that the Secretary
of Agriculture (Secretary) ``may terminate or suspend the operation of
any or all of the provisions of this subpart, whenever he finds that
such provisions do not tend to effectuate the declared policy of the
act.'' The current authority to establish a reserve obligation has not
been used by the Board since the 1987-88 marketing year, when the Board
began working toward increasing demand rather than controlling supply.
Section 984.21 defines ``handler inventory'' as ``all walnuts,
inshell or shelled (except those held in satisfaction of a reserve
obligation), wherever located, then held by a handler or for his or her
account.''
Sections 984.23 and 984.26 define ``free'' and ``reserve'' walnuts,
respectively; and Sec. 984.33 defines ``hold,'' the action that
requires handlers to maintain possession of the kernelweight of walnuts
necessary to meet his or her reserve obligation.
The reserve obligation requirements in Sec. Sec. 984.48 and 984.49
include provisions that require the Board recommend to the Secretary
free, reserve, and export percentages of walnuts at the start of each
marketing year (September 1). A recommendation for changes to the
percentages must be made to the Secretary on or before February 15 of
each marketing year, if such changes are prudent. The export
percentages are reviewed by the Board's Export Committee, which is
comprised of Board members who are industry experts in exporting
walnuts.
Sections 984.49, 984.50, 984.51, 984.54, 984.56, 984.64, 984.66,
984.67, and 984.69 include establishing a free, reserve, and export
percentage
[[Page 3552]]
obligation; establishing minimum kernel content for any lot of walnuts
acceptable for disposition for credit against a handler's reserve
obligation; mandating inspection of walnuts; establishing the reserve
obligation; instructions regarding the disposition of reserve and
substandard walnuts; a requirement that the Board assist handlers in
meeting their reserve obligation; various exemptions from the reserve
obligation; and authorizing the Board to use funds derived from
assessments to defray expenses related to reserve walnut pool expenses,
respectively.
Sections 984.450, 984.456, and 984.464 establish requirements
relative to grade and size, inspection, and disposition of reserve
walnuts, respectively.
This proposed suspension is expected to streamline Board operations
by eliminating the need for the Export Committee and removing the need
for the Board to consider free, reserve, and export percentages at its
meetings at the start of each marketing year.
The reserve obligation and its requirements would be suspended but
remain part of the Order until the Board makes a recommendation to
reinstate or terminate them. This proposed rule would also remove
related references to the reserved obligation and its requirements. The
Secretary would review any such recommendation by the Board.
This proposed rule would stay Sec. Sec. 984.23, 984.26, 984.33,
984.49, 984.54, 984.56, 984.66, and 984.456 in their entirety.
This proposed rule would amend Sec. Sec. 984.21, 984.48, 984.50,
984.51, 984.64, 984.69, 984.450, 984.451, and 984.464 to remove
references to the reserve obligation and its requirements.
This proposed stay requires no changes to any existing Board forms.
Initial 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 initial regulatory flexibility analysis.
The purpose of the RFA is to fit regulatory actions to the scale of
businesses 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.
There are approximately 90 handlers subject to regulation under the
Order and approximately 5,000 walnut growers in the production area.
The Small Business Administration (SBA) defines small agricultural
service firms as those having annual receipts of less than $30,000,000,
and small agricultural producers as those having annual receipts of
less than $1,000,000 (13 CFR 121.201).
Based upon information from the National Agricultural Statistics
Service (NASS), the price reported for July 2019 was $7,060 per ton
($3.53 per pound) of walnuts. Data from NASS indicate that the average
walnut production is 1.93 tons per acre. Given that volume and price, a
grower would have to farm at least 74 acres to receive $1,000,000, not
accounting for input costs. NASS data on farm size indicate that only
approximately 42 percent of walnut growers farm more than 74 acres.
Thus, most walnut growers may be considered small entities.
Given data from the Board regarding walnut receipts by handlers,
including walnut acquisitions and the $7,060 per ton price, only 38
percent of handlers would have annual receipts of $30,000,000. Thus,
most walnut handlers may be considered small entities.
This proposed stay is expected to positively impact the Board,
including members of the Export Committee, by staying regulations that
have not been used in decades. No longer having to gather data, discuss
the information, and then make recommendations to the Secretary
regarding a reserve obligation would allow the Board's meeting early in
the marketing year to run more efficiently.
This proposed rule would stay the reserve obligation and its
requirements under the Order for the 2019-20 marketing year and beyond,
until the Board recommends to the Secretary that the requirements be
reinstated or terminated. The proposed rule would also remove related
references to the reserve obligation and its requirements in the Order.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
chapter 35), the Order's information collection requirements are
approved by the Office of Management and Budget (OMB) under OMB No.
0581-0178 Vegetable and Specialty Crops. No changes to those
requirements are necessary as a result of this action.
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.
In addition, USDA has not identified any relevant Federal rules
that duplicate, overlap, or conflict with this rule.
The Board held a strategic planning session on February 12-13,
2019, and thoroughly discussed this action. The Marketing Order Review
Committee (MORC) of the Board met on August 14, 2019, to further
discuss the reserve obligation and its requirements and made a
recommendation for the change at the Board's September 13, 2019
meeting. The strategic planning sessions, the MORC meeting, and the
Board meeting on September 13, 2019, were public meetings widely
publicized throughout the California walnut industry, and all
interested persons were invited to attend the meetings and encouraged
to participate in Board deliberations.
Interested persons are invited to submit comments on this proposed
rule, including the regulatory and informational impacts of this action
on small businesses.
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/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.
This proposed rule invites comments on staying the reserve
authority under the Order. Any comments received will be considered
prior to the finalization of this rule.
After consideration of all relevant material presented, including
the Board's recommendation, and other information, it is found that
this proposed rule, as hereinafter set forth, would tend to effectuate
the declared policy of the Act.
List of Subjects in 7 CFR Part 984
Marketing agreements, Reporting and recordkeeping requirements, and
Walnuts.
For the reasons set forth in the preamble, 7 CFR part 984 is
proposed to be amended as follows:
PART 984--WALNUTS GROWN IN CALIFORNIA
0
1. The authority citation for 7 CFR part 984 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
Sec. 984.21 [Amended]
0
2. Revise Sec. 984.21 to read as follows:
[[Page 3553]]
Handler inventory as of any date means all walnuts, inshell or
shelled, wherever located, then held by a handler or for his or her
account.
Sec. 984.23 [Stayed]
0
3. Section 984.23 is stayed indefinitely.
Sec. 984.26 [Stayed]
0
4. Section Sec. 984.26 is stayed indefinitely.
Sec. 984.33 [Stayed]
0
5. Section Sec. 984.33 is stayed indefinitely.
Sec. 984.48 [Amended]
0
6. In Sec. 984.48, paragraphs (a)(6) and (7) are stayed indefinitely.
Sec. 984.49 [Stayed]
0
7. Section Sec. 984.49 is stayed indefinitely.
Sec. 984.50 [Amended]
0
12. In Sec. 984.50, paragraph (e) is stayed indefinitely.
0
13. In Sec. 984.51, revise paragraphs (a) and (c) to read as follows:
Sec. 984.51 Inspection and certification of inshell and shelled
walnuts.
(a) Before or upon handling of any walnuts, each handler at his or
her own expense shall cause such walnuts to be inspected to determine
whether they meet the then-applicable grade and size regulations. Such
inspection shall be performed by the inspection service or services
designated by the Board with the approval of the Secretary; Provided,
That if more than one inspection service is designated, the functions
performed by each services shall be separate, and shall not duplicate
each other. Handlers shall obtain a certificate for each inspection and
cause a copy of each certificate issued by the inspection service to be
furnished to the Board. Each certificate shall show the identity of the
handler, quantity of walnuts, the date of inspection, and for inshell
walnuts, the grade and size of such walnuts as set forth in the United
States Standards for Walnuts (Juglans regia) in the Shell. The Board,
with the approval of the Secretary, may prescribe procedures for the
administration of this provision.
* * * * *
(c) Upon inspection, walnuts shall be identified by tags, stamps,
or other means of identification prescribed by the Board and affixed to
the container by the handler under the supervision of the Board or of a
designated inspector and such identification shall not be altered or
removed except at directed by the Board. The assessment requirements in
Sec. 984.69 shall be incurred at the time of certification.
Sec. 984.54 [Stayed]
0
14. Section 984.54 is stayed indefinitely.
Sec. 984.56 [Stayed]
0
15. Section 984.56 is stayed indefinitely.
0
16. Revise Sec. 984.64 to read as follows:
Sec. 984.64 Disposition of substandard walnuts.
Substandard walnuts may be disposed of only for manufacture into
oil, livestock feed, or such other uses as the Board determines to be
noncompetitive with existing domestic and export markets for
merchantable walnuts and with proper safeguards to prevent such walnuts
from thereafter entering channels of trade in such markets. Each
handler shall submit, in such form and at such intervals as the Board
may determine, reports of:
(a) His production and holdings of substandard walnuts and; (b) The
disposition of all substandard walnuts to any other person, showing the
quantity, lot, date, name and address of the person to whom delivered,
the approved use and such other information pertaining thereto as the
Board may specify.
Sec. 984.66 [Stayed]
0
17. Section 984.66 is stayed indefinitely.
0
18. Amend Sec. 984.67 by:
0
a. Stay paragraph (a) indefinitely, and;
0
b. Revise paragraph (b)(1) to read as follows:
Sec. 984.67 Exemptions.
* * * * *
(b) * * *
(1) Sales by growers direct to consumers. Any walnut grower may
handle walnuts of his production free of the regulatory and assessment
provisions of this part if he sells such walnuts in the area of
production directly to consumers under the following types of
exemptions:
* * * * *
Sec. 984.69 [Amended]
0
19. In Sec. 984.69 paragraph (b) is stayed indefinitely.
Sec. 984.450 [Amended]
0
20. In Sec. 984.450 paragraphs (a) and (b) are stayed indefinitely.
Sec. 984.451 [Amended]
0
21. In Sec. 984.451 paragraph (c) is stayed indefinitely.
Sec. 984.456 [Stayed]
0
22. Section 984.456 is stayed indefinitely.
Sec. 984.464 [Amended]
0
23. In Sec. 984.464 paragraph (a) is stayed indefinitely.
Dated: January 9, 2020.
Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2020-00399 Filed 1-21-20; 8:45 am]
BILLING CODE 3410-02-P
