Almonds Grown in California; Order Amending Marketing Order No. 981, 45153-45156 [E8-17827]
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45153
Rules and Regulations
Federal Register
Vol. 73, No. 150
Monday, August 4, 2008
This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
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Agricultural Marketing Service
7 CFR Part 981
[Docket No. AO–214–A7; AMS–FV–07–0050;
FV07–981–1]
Almonds Grown in California; Order
Amending Marketing Order No. 981
Agricultural Marketing Service,
USDA.
ACTION: Final rule.
ebenthall on PRODPC60 with RULES
AGENCY:
SUMMARY: This final rule amends the
marketing order for almonds grown in
California. The amendments were
proposed by the Almond Board of
California (Board), which is responsible
for local administration of the order.
The amendments will authorize the
establishment of different outgoing
quality requirements for different
markets and authorize the establishment
of bulk container marking and labeling
requirements. The amendments are
intended to provide additional
flexibility in administering the quality
control provisions of the order and
provide the industry with additional
tools for the marketing of almonds.
DATES: This rule is effective August 5,
2008.
FOR FURTHER INFORMATION CONTACT:
Martin Engeler, Marketing Order
Administration Branch, Fruit and
Vegetable Programs, AMS, USDA, 2202
Monterey Street, Suite 102–B, Fresno,
California 93721; Telephone: (559) 487–
5110, Fax: (559) 487–5906, or E-mail:
Martin.Engeler@usda.gov; or Laurel
May, 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:
Laurel.May@usda.gov.
Small businesses may request
information on this proceeding by
15:19 Aug 01, 2008
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Prior
documents in this proceeding: Notice of
Hearing issued on June 29, 2007, and
published in the July 6, 2007, issue of
the Federal Register (72 FR 36900); a
Recommended Decision issued on
December 21, 2007, and published in
the December 28, 2007, issue of the
Federal Register (72 FR 73671); and a
Secretary’s Decision and Referendum
Order issued on February 27, 2008, and
published in the March 3, 2008, issue of
the Federal Register (73 FR 11360).
This action is governed by the
provisions of sections 556 and 557 of
Title 5 of the United States Code and is
therefore excluded from the
requirements of Executive Order 12866.
SUPPLEMENTARY INFORMATION:
DEPARTMENT OF AGRICULTURE
VerDate Aug<31>2005
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.
Preliminary Statement
This final rule was formulated on the
record of a public hearing held on
August 2, 2007, in Modesto, California.
Notice of this hearing was issued on
June 29, 2007, and published in the July
6, 2007, issue of the Federal Register
(72 FR 36900). The hearing was held to
consider the proposed amendment of
Marketing Order No. 981, hereinafter
referred to as the ‘‘order’’.
The hearing was held pursuant to the
provisions of the Agricultural Marketing
Agreement Act of 1937, as amended (7
U.S.C. 601–674), hereinafter referred to
as the ‘‘Act,’’ and the applicable rules of
practice and procedure governing the
formulation of marketing agreements
and marketing orders (7 CFR part 900).
The Notice of Hearing contained two
amendment proposals submitted by the
Almond Board of California (Board),
which is responsible for local
administration of the order. Upon the
basis of evidence introduced at the
hearing and the record thereof, the
Administrator of AMS on December 21,
2007, filed with the Hearing Clerk, U.S.
Department of Agriculture, a
Recommended Decision and
Opportunity to File Written Exceptions
thereto by January 17, 2008. No
exceptions were filed.
A Secretary’s Decision and
Referendum Order was issued on
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February 27, 2008, directing that a
referendum be conducted during the
period March 24 through April 11, 2008,
among almond growers to determine
whether they favored the proposed
amendments to the order. To become
effective, the amendments had to be
approved by at least two-thirds of those
producers voting or by voters
representing at least two-thirds of the
volume of almonds represented by
voters in the referendum. Each of the
two proposed amendments were favored
by at least 80 percent of the voters
voting in the referendum.
The amendments approved by voters
and included in this order will:
1. Authorize the establishment of
different outgoing almond quality
requirements for different markets; and
2. Authorize the establishment of
container marking and labeling
requirements.
The U.S. Department of Agriculture
(USDA) also proposed to allow such
changes as may be necessary to the
order so that all of the order’s provisions
conform to the effectuated amendments.
None were deemed necessary.
An amended marketing agreement
was subsequently provided to all
almond handlers in the production area
for their approval. The marketing
agreement was not approved by
handlers representing at least 50 percent
of the volume of almonds handled by all
handlers during the representative
period of August 1, 2006, through July
31, 2007.
Small Business Consideration
Pursuant to the requirements set forth
in the Regulatory Flexibility Act (RFA)
(5 U.S.C. 601–612), 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 so that
small businesses will not be unduly or
disproportionately burdened. Marketing
orders and amendments thereto are
unique in that they are normally
brought about through group action of
essentially small entities for their own
benefit.
Small agricultural service firms,
which include handlers regulated under
the order, have been defined by the
Small Business Administration (SBA)
(13 CFR 121.201) as those having annual
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receipts of less than $6,500,000. Small
agricultural producers have been
defined as those with annual receipts of
less than $750,000.
There are approximately 104 handlers
of almonds subject to regulation under
the order and approximately 6,000
producers of almonds in the regulated
area. Information provided at the
hearing indicates that approximately 50
percent of the handlers would be
considered small agricultural service
firms. According to data reported by the
National Agricultural Statistics Service
(NASS), the two-year average crop value
for 2005–06 and 2006–07 was $2.283
billion. Dividing that average by 6,000
producers yields average estimated
producer revenues of $380,500, which
suggests that the majority of almond
producers would also be considered
small entities according to the SBA’s
definition.
The order regulates the handling of
almonds grown in the state of
California. The California almond
bearing acreage increased nearly 40
percent between 1996 and 2006, from
418,000 to 585,000 acres.
Approximately 1.115 billion pounds
(shelled basis) of almonds were
produced during the 2006–07 season.
Bearing acreage for the 2007–08 season
is estimated to be 615,000 acres. NASS
has forecasted that the 2007–08 crop
will reach 1.330 billion pounds (shelled
basis). More than two thirds of
California’s almond crop is exported to
approximately 90 countries worldwide,
and comprises nearly 80 percent of the
world’s almond supply.
Under the order, incoming and
outgoing quality regulations are
established, statistical information is
collected, production research projects
are conducted, and marketing research
and generic promotion programs are
sponsored. Program activities
administered by the Board are designed
to support large and small almond
producers and handlers. The 10-member
Board is comprised of both producer
and handler representatives from the
production area. Board meetings where
regulatory recommendations and other
decisions are made are open to the
public. All members are able to
participate in Board deliberations, and
each Board member has an equal vote.
Others in attendance at meetings are
also allowed to express their views.
The Board’s Food Quality and Safety
Committee discussed the need for
amendments to the order at meetings
held on May 12, 2005; July 20, 2005;
and November 1, 2006. The Board
approved language for two proposed
amendments to the order at their
meeting on November 28, 2006. During
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15:19 Aug 01, 2008
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a conference call on February 27, 2007,
the Board confirmed that the two
amendments should be proposed to
USDA. The views of all participants
were considered throughout this
process.
In addition, the hearing to receive
evidence on the proposed changes was
open to the public and all interested
parties were invited and encouraged to
participate and provide their views.
The amendments are intended to
provide the Board and the industry with
additional flexibility in the marketing of
California almonds. Record evidence
indicates that the amendments are
intended to benefit all producers and
handlers under the order, regardless of
size. There are no cost implications for
handlers or growers from adding the
new order authorities. Costs of
implementation will be incurred only if
specific additional requirements are
established following future informal
rulemaking. All grower and handler
witnesses supported the amendments
and commented on the implications of
implementing specific requirements in
the future. In that context, witnesses
stated that they expected the benefits to
be substantial and the costs of any
future requirements to be minimal.
A description of the amendments and
their anticipated economic impact on
small and large entities is discussed
below.
Proposal 1—Adding the Authority To
Establish Different Outgoing Quality
Requirements for Different Markets
The record shows that the amendment
adding authority to establish different
outgoing quality requirements for
different markets will, in itself, have no
economic impact on producers or
handlers of any size. Regulations
implemented under that authority could
impose additional costs on handlers
required to comply with them.
However, witnesses testified that
establishing mandatory regulations for
different markets could increase the
industry’s credibility and reduce the
risk that shipments of substandard
product could jeopardize the entire
industry’s reputation. Record evidence
shows that any additional costs are
likely to be offset by the benefits of
complying with those requirements.
Witnesses cited decreased delays and
demurrage charges, as well as fewer
rejected loads and increased customer
confidence, as expected benefits.
Recently, almonds have been rejected in
the EU due to aflatoxin levels exceeding
its importing tolerances. Information
provided at the hearing shows that the
rejection of a 44,000 pound container of
almonds in the EU costs about $10,000,
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or 22.7 cents per pound. The cost
includes demurrage for unanticipated
delays at port, warehousing product
while awaiting official import testing
results, shipping rejected almonds back
to the U.S., and shipping a replacement
container back to the EU.
To reduce the risk of rejections, the
California almond industry developed a
voluntary aflatoxin testing protocol.
Witnesses estimated that the cost of the
pre-export testing, including the value
of the sample, analytical fees, courier
fees, and sampling labor is less than 2
cents per pound, which is less than 10
percent of the cost associated with a
rejection. Proponents testified that if a
requirement that all almonds destined
for the EU be tested prior to shipment
was established under authority
provided by the order amendment,
handlers would incur the cost of testing,
but those costs would be expected to be
more than offset by the reduced risk of
rejections.
It’s likely that most handlers are
already complying with their customers’
specific market requirements on a
voluntary basis as a part of doing
business, but witnesses explained that
mandatory requirements lend credibility
to the entire industry. In addition, such
requirements could reduce the risk that
one shipment of substandard product
would jeopardize the entire industry’s
reputation.
Currently, outgoing quality
requirements established under the
order apply to all handler entities
regardless of size. If regulations are
established pursuant to this
amendment, distribution of any
increased costs between small and large
entities would depend on the
requirements established for the markets
to which individual handlers shipped
their almonds as well as the volume of
almonds shipped to those markets. But
increases in cost would be equitable to
all entities because requirements for
each market would be imposed
uniformly on all handlers shipping to
that market.
Witnesses explained that almonds are
used in many different ways by the
various markets. In Europe, almonds are
widely used as marzipan and
ingredients for baked goods, candy, and
other dishes. In India and the Middle
East, almonds are presented as gifts at
holidays and weddings, and play a part
in other cultural traditions. India
imports large quantities of inshell
almonds that are then processed by
hand. The wide range of uses leads to
a similarly wide array of customer
requirements.
According to record testimony,
handlers adapt their export methods to
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satisfy customer requirements. One
witness explained that it is often
difficult for smaller handlers to stay
informed of rapidly changing import
regulations. The witness stated that
small handlers in particular would
benefit from the authority to establish
different requirements for different
markets by avoiding costly mistakes that
could be associated with not
understanding various market and
import requirements. If regulations are
established under this amendment, the
Board will provide information about
updated requirements to the industry.
Finally, one witness explained that
having the ability under the order to
establish different outgoing quality
requirements for different markets will
not restrict handlers’ choices regarding
which markets to supply. Rather, the
provision will ensure that the important
standards that differentiate markets will
be consistently met by all handlers
shipping to those markets.
Proposal 2—Adding the Authority To
Establish Container Labeling and
Marking Requirements
The second amendment adds § 981.43
to the order to provide general authority
to establish container marking and
labeling requirements. This amendment
will allow the Board, through the
informal rulemaking process, to
recommend and establish uniform
container marking and labeling
regulations in response to evolving
market requirements. Under previous
order provisions, there is only very
limited authority for container marking
and labeling requirements.
Witnesses testified that the lack of
this authority has hindered them from
adapting quickly and appropriately to
recent market situations. In one case
described at the hearing, the industry
was unable to implement container
marking or labeling following recalls for
possible Salmonella contamination.
Witnesses stated that customer
confidence in almond quality could
have been reinforced if the necessary
authority to establish marking and
labeling requirements had been
available. Such authority would have
allowed the industry to prescribe
labeling to clearly indicate which
almonds had been treated to reduce risk
of contamination.
The amendment will allow the
industry to respond to evolving market
needs as they develop by establishing
uniform and consistent marking and
labeling requirements. According to
proponents, the ability to communicate
important product information to
customers in a uniform and consistent
manner will be essential as the industry
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15:19 Aug 01, 2008
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strives to maintain its position in the
expanding global marketplace.
If regulations are implemented
pursuant to this amendment, costs of
complying with any regulations
established thereunder will not be
disproportionate to small businesses.
Witnesses testified that applying labels
and marks to almond containers is
currently a common practice, and
industry handlers already have
container marking processes and
equipment in place. Therefore, the costs
associated with the addition of uniform
marking or labeling requirements will
be minimal for both small and large
entities. The record shows that any costs
will likely be offset by the benefits
derived from being more responsive to
market demands.
Interested persons were invited to
present evidence at the hearing on the
probable regulatory and informational
impact of the proposed amendments to
the order on small entities. The record
evidence indicates that the amendments
are intended to benefit all producers
and handlers under the order, regardless
of size. Further, the record shows that
the costs associated with implementing
regulations would be outweighed by the
benefits expected to accrue to the
California almond industry.
USDA has not identified any relevant
Federal rules that duplicate, overlap or
conflict with this rule. These
amendments are designed to enhance
the administration and functioning of
the order to the benefit the California
almond industry.
Paperwork Reduction Act
Information collection requirements
for part 981 are currently approved by
the Office of Management and Budget
(OMB), under OMB Number 0581–0178,
Vegetable and Specialty Crops.
Implementation of these amendments
will not trigger any changes to those
requirements. Should any such changes
become necessary in the future, they
will be submitted to OMB for approval.
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 Government Paperwork Elimination
Act, which requires Government
agencies in general to provide the public
the option of submitting information or
transacting business electronically to
the maximum extent possible.
AMS is committed to complying with
the E-Government Act, to promote the
use of the Internet and other
information technologies to provide
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45155
increased opportunities for citizen
access to Government information and
services, and for other purposes.
Civil Justice Reform
The amendments to Marketing Order
981 stated herein have been reviewed
under Executive Order 12988, Civil
Justice Reform. They are not intended to
have retroactive effect. The amendments
will not preempt any State or local laws,
regulations, or policies, unless they
present an irreconcilable conflict with
an amendment.
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 Sates 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
the entry of the ruling.
Order Amending the Order Regulating
the Handling of Almonds Grown in
California
Findings and Determinations
The findings and determinations set
forth hereinafter are supplementary and
in addition to the findings and
determinations previously made in
connection with the issuance of the
order; and all of 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.
(a) Findings and Determinations Upon the
Basis of the Hearing Record.
Pursuant to the provisions of the
Agricultural Marketing Agreement Act of
1937, as amended (7 U.S.C. 601–674) and the
applicable rules of practice and procedure
effective thereunder (7 CFR part 900), a
public hearing was held upon the proposed
amendments to Marketing Order No. 981 (7
CFR part 981), regulating the handling of
almonds grown in California.
Upon the basis of the evidence introduced
at such hearing and the record thereof, it is
found that:
(1) The marketing order, as amended, and
as hereby further amended, and all of the
terms and conditions thereof, will tend to
effectuate the declared policy of the Act;
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Federal Register / Vol. 73, No. 150 / Monday, August 4, 2008 / Rules and Regulations
(2) The marketing order, as amended, and
as hereby further amended, regulates the
handling of almonds grown in the production
area in the same manner as, and is applicable
only to persons in the respective classes of
commercial and industrial activity specified
in the marketing order upon which hearings
have been held;
(3) The marketing order, as amended, and
as hereby further 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
orders applicable to subdivision of the
production area would not effectively carry
out the declared policy of the Act;
(4) The marketing order, as amended, and
as hereby further 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 almonds grown in the
production area; and
(5) All handling of almonds grown in the
production area is in the current of interstate
or foreign commerce or directly burdens,
obstructs, or affects such commerce.
(b) Additional Findings.
It is necessary and in the public interest to
make these amendments effective not later
than one day after publication in the Federal
Register. A later effective date would
unnecessarily delay implementation of the
new amendments. These amendments should
be in place as soon as possible as the new
crop year begins August 1. Making the
effective date one day after publication in the
Federal Register will allow the industry to
consider regulations implementing the new
order authorities at the beginning of the new
crop year, which would be beneficial to the
industry.
(c) Determinations. It is hereby determined
that:
(1) Handlers (excluding cooperative
associations of producers who are not
engaged in processing, distributing, or
shipping almonds covered by the order as
hereby amended) who, during the period
August 1, 2006, through July 31, 2007,
handled 50 percent or more of the volume of
such almonds covered by said order, as
hereby amended, have not signed an
amended marketing agreement; and,
(2) The issuance of this amendatory order,
further amending the aforesaid order, is
favored or approved by at least two-thirds of
the producers who participated in a
referendum on the question of approval and
who, during the period of August 1, 2006,
through July 31, 2007 (which has been
deemed to be a representative period), have
been engaged within the production area in
the production of such almonds, such
producers having also produced for market at
least two-thirds of the volume of such
commodity represented in the referendum;
and
(3) In the absence of a signed marketing
agreement, the issuance of this amendatory
order is the only practical means pursuant to
the declared policy of the Act of advancing
the interests of producers of almonds in the
production area.
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Order Relative to Handling of Almonds
Grown in California
It is therefore ordered, that on and
after the effective dates hereof, all
handling of almonds grown in
California shall be in conformity to, and
in compliance with, the terms and
conditions of the said order as hereby
amended as follows:
The provisions of the proposed order
further amending the order contained in
the Secretary’s Decision issued by the
Administrator on February 27, 2008,
and published in the Federal Register
on March 3, 2008 (73 FR 11360), shall
be and are the terms and provisions of
this order amending the order and set
forth in full herein.
List of Subjects in 7 CFR Part 981
Almonds, Marketing agreements,
Nuts, Reporting and recordkeeping
requirements.
PART 981—ALMONDS GROWN IN
CALIFORNIA
For the reasons set forth in the
preamble, Title 7 of Chapter XI of the
Code of Federal Regulations is amended
by amending part 981 to read as follows:
I 1. The authority citation for 7 CFR
part 981 continues to read as follows:
I
Authority: 7 U.S.C. 601–674.
2. Amend paragraph (b) of § 981.42 by
adding the following sentence before the
last sentence to read as follows:
I
§ 981.42
Quality control.
*
*
*
*
*
(b) * * * The Board may, with the
approval of the Secretary, establish
different outgoing quality requirements
for different markets. * * *
3. Add a new § 981.43 to read as
follows:
I
§ 981.43
Marking or labeling of containers.
The Board may, with the approval of
the Secretary, establish regulations to
require handlers to mark or label their
containers that are used in packaging or
handling of bulk almonds. For purposes
of this section, container means a box,
bin, bag, carton, or any other type of
receptacle used in the packaging or
handling of bulk almonds.
Dated: July 30, 2008.
Lloyd C. Day,
Administrator, Agricultural Marketing
Service.
[FR Doc. E8–17827 Filed 8–1–08; 8:45 am]
BILLING CODE 3410–02–P
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DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 25
[Docket No. NM390; Special Conditions No.
25–372–SC]
Special Conditions: Embraer S.A.,
Model ERJ 190–100 ECJ Airplane; Fire
Protection
Federal Aviation
Administration (FAA), DOT.
ACTION: Final special conditions.
AGENCY:
SUMMARY: These special conditions are
issued for the Embraer S.A., Model ERJ
190–100 ECJ airplane. This airplane has
a novel or unusual design feature, in
that it features multiple electrical/
electronic equipment bays that are
located throughout the airplane. The
applicable airworthiness regulations do
not contain adequate or appropriate
safety standards for this design feature.
These special conditions contain the
additional safety standards that the
Administrator considers necessary to
establish a level of safety equivalent to
that established by the existing
airworthiness standards.
DATES: Effective Date: September 3,
2008.
FOR FURTHER INFORMATION CONTACT:
Stephen Happenny, FAA, Propulsion/
Mechanical Branch, ANM–112,
Transport Airplane Directorate, Aircraft
Certification Service, 1601 Lind
Avenue, SW., Renton, Washington
98057–3356; telephone 425–227–2147;
facsimile 425–227–1232.
SUPPLEMENTARY INFORMATION:
Background
Embraer S.A., made the original
application for certification of the
Model ERJ 190 on May 20, 1999. The
Embraer application includes six
different models, the initial variant
being designated as the Model ERJ 190–
100. The application was submitted
concurrently with that for the Model
ERJ 170–100, which received an FAA
type certificate (TC) on February 20,
2004. Although the applications were
submitted as two distinct TCs, the
airplanes share the same conceptual
design and general configuration. On
July 2, 2003, Embraer S.A., submitted a
request for an extension of its original
application for the Model ERJ 190
series, with a new application date of
May 30, 2001, for establishing the type
certification basis. The FAA
certification basis was adjusted to reflect
this new application date. In addition,
Embraer has elected to voluntarily
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[Federal Register Volume 73, Number 150 (Monday, August 4, 2008)]
[Rules and Regulations]
[Pages 45153-45156]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-17827]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
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========================================================================
Federal Register / Vol. 73, No. 150 / Monday, August 4, 2008 / Rules
and Regulations
[[Page 45153]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 981
[Docket No. AO-214-A7; AMS-FV-07-0050; FV07-981-1]
Almonds Grown in California; Order Amending Marketing Order No.
981
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This final rule amends the marketing order for almonds grown
in California. The amendments were proposed by the Almond Board of
California (Board), which is responsible for local administration of
the order. The amendments will authorize the establishment of different
outgoing quality requirements for different markets and authorize the
establishment of bulk container marking and labeling requirements. The
amendments are intended to provide additional flexibility in
administering the quality control provisions of the order and provide
the industry with additional tools for the marketing of almonds.
DATES: This rule is effective August 5, 2008.
FOR FURTHER INFORMATION CONTACT: Martin Engeler, Marketing Order
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 2202
Monterey Street, Suite 102-B, Fresno, California 93721; Telephone:
(559) 487-5110, Fax: (559) 487-5906, or E-mail:
Martin.Engeler@usda.gov; or Laurel May, 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: Laurel.May@usda.gov.
Small businesses may request information on this proceeding 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: Prior documents in this proceeding: Notice
of Hearing issued on June 29, 2007, and published in the July 6, 2007,
issue of the Federal Register (72 FR 36900); a Recommended Decision
issued on December 21, 2007, and published in the December 28, 2007,
issue of the Federal Register (72 FR 73671); and a Secretary's Decision
and Referendum Order issued on February 27, 2008, and published in the
March 3, 2008, issue of the Federal Register (73 FR 11360).
This action is governed by the provisions of sections 556 and 557
of Title 5 of the United States Code and is therefore excluded from the
requirements of Executive Order 12866.
Preliminary Statement
This final rule was formulated on the record of a public hearing
held on August 2, 2007, in Modesto, California. Notice of this hearing
was issued on June 29, 2007, and published in the July 6, 2007, issue
of the Federal Register (72 FR 36900). The hearing was held to consider
the proposed amendment of Marketing Order No. 981, hereinafter referred
to as the ``order''.
The hearing was held pursuant to the provisions of the Agricultural
Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674),
hereinafter referred to as the ``Act,'' and the applicable rules of
practice and procedure governing the formulation of marketing
agreements and marketing orders (7 CFR part 900).
The Notice of Hearing contained two amendment proposals submitted
by the Almond Board of California (Board), which is responsible for
local administration of the order. Upon the basis of evidence
introduced at the hearing and the record thereof, the Administrator of
AMS on December 21, 2007, filed with the Hearing Clerk, U.S. Department
of Agriculture, a Recommended Decision and Opportunity to File Written
Exceptions thereto by January 17, 2008. No exceptions were filed.
A Secretary's Decision and Referendum Order was issued on February
27, 2008, directing that a referendum be conducted during the period
March 24 through April 11, 2008, among almond growers to determine
whether they favored the proposed amendments to the order. To become
effective, the amendments had to be approved by at least two-thirds of
those producers voting or by voters representing at least two-thirds of
the volume of almonds represented by voters in the referendum. Each of
the two proposed amendments were favored by at least 80 percent of the
voters voting in the referendum.
The amendments approved by voters and included in this order will:
1. Authorize the establishment of different outgoing almond quality
requirements for different markets; and
2. Authorize the establishment of container marking and labeling
requirements.
The U.S. Department of Agriculture (USDA) also proposed to allow
such changes as may be necessary to the order so that all of the
order's provisions conform to the effectuated amendments. None were
deemed necessary.
An amended marketing agreement was subsequently provided to all
almond handlers in the production area for their approval. The
marketing agreement was not approved by handlers representing at least
50 percent of the volume of almonds handled by all handlers during the
representative period of August 1, 2006, through July 31, 2007.
Small Business Consideration
Pursuant to the requirements set forth in the Regulatory
Flexibility Act (RFA) (5 U.S.C. 601-612), 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 so that small businesses will not be
unduly or disproportionately burdened. Marketing orders and amendments
thereto are unique in that they are normally brought about through
group action of essentially small entities for their own benefit.
Small agricultural service firms, which include handlers regulated
under the order, have been defined by the Small Business Administration
(SBA) (13 CFR 121.201) as those having annual
[[Page 45154]]
receipts of less than $6,500,000. Small agricultural producers have
been defined as those with annual receipts of less than $750,000.
There are approximately 104 handlers of almonds subject to
regulation under the order and approximately 6,000 producers of almonds
in the regulated area. Information provided at the hearing indicates
that approximately 50 percent of the handlers would be considered small
agricultural service firms. According to data reported by the National
Agricultural Statistics Service (NASS), the two-year average crop value
for 2005-06 and 2006-07 was $2.283 billion. Dividing that average by
6,000 producers yields average estimated producer revenues of $380,500,
which suggests that the majority of almond producers would also be
considered small entities according to the SBA's definition.
The order regulates the handling of almonds grown in the state of
California. The California almond bearing acreage increased nearly 40
percent between 1996 and 2006, from 418,000 to 585,000 acres.
Approximately 1.115 billion pounds (shelled basis) of almonds were
produced during the 2006-07 season. Bearing acreage for the 2007-08
season is estimated to be 615,000 acres. NASS has forecasted that the
2007-08 crop will reach 1.330 billion pounds (shelled basis). More than
two thirds of California's almond crop is exported to approximately 90
countries worldwide, and comprises nearly 80 percent of the world's
almond supply.
Under the order, incoming and outgoing quality regulations are
established, statistical information is collected, production research
projects are conducted, and marketing research and generic promotion
programs are sponsored. Program activities administered by the Board
are designed to support large and small almond producers and handlers.
The 10-member Board is comprised of both producer and handler
representatives from the production area. Board meetings where
regulatory recommendations and other decisions are made are open to the
public. All members are able to participate in Board deliberations, and
each Board member has an equal vote. Others in attendance at meetings
are also allowed to express their views.
The Board's Food Quality and Safety Committee discussed the need
for amendments to the order at meetings held on May 12, 2005; July 20,
2005; and November 1, 2006. The Board approved language for two
proposed amendments to the order at their meeting on November 28, 2006.
During a conference call on February 27, 2007, the Board confirmed that
the two amendments should be proposed to USDA. The views of all
participants were considered throughout this process.
In addition, the hearing to receive evidence on the proposed
changes was open to the public and all interested parties were invited
and encouraged to participate and provide their views.
The amendments are intended to provide the Board and the industry
with additional flexibility in the marketing of California almonds.
Record evidence indicates that the amendments are intended to benefit
all producers and handlers under the order, regardless of size. There
are no cost implications for handlers or growers from adding the new
order authorities. Costs of implementation will be incurred only if
specific additional requirements are established following future
informal rulemaking. All grower and handler witnesses supported the
amendments and commented on the implications of implementing specific
requirements in the future. In that context, witnesses stated that they
expected the benefits to be substantial and the costs of any future
requirements to be minimal.
A description of the amendments and their anticipated economic
impact on small and large entities is discussed below.
Proposal 1--Adding the Authority To Establish Different Outgoing
Quality Requirements for Different Markets
The record shows that the amendment adding authority to establish
different outgoing quality requirements for different markets will, in
itself, have no economic impact on producers or handlers of any size.
Regulations implemented under that authority could impose additional
costs on handlers required to comply with them. However, witnesses
testified that establishing mandatory regulations for different markets
could increase the industry's credibility and reduce the risk that
shipments of substandard product could jeopardize the entire industry's
reputation. Record evidence shows that any additional costs are likely
to be offset by the benefits of complying with those requirements.
Witnesses cited decreased delays and demurrage charges, as well as
fewer rejected loads and increased customer confidence, as expected
benefits. Recently, almonds have been rejected in the EU due to
aflatoxin levels exceeding its importing tolerances. Information
provided at the hearing shows that the rejection of a 44,000 pound
container of almonds in the EU costs about $10,000, or 22.7 cents per
pound. The cost includes demurrage for unanticipated delays at port,
warehousing product while awaiting official import testing results,
shipping rejected almonds back to the U.S., and shipping a replacement
container back to the EU.
To reduce the risk of rejections, the California almond industry
developed a voluntary aflatoxin testing protocol. Witnesses estimated
that the cost of the pre-export testing, including the value of the
sample, analytical fees, courier fees, and sampling labor is less than
2 cents per pound, which is less than 10 percent of the cost associated
with a rejection. Proponents testified that if a requirement that all
almonds destined for the EU be tested prior to shipment was established
under authority provided by the order amendment, handlers would incur
the cost of testing, but those costs would be expected to be more than
offset by the reduced risk of rejections.
It's likely that most handlers are already complying with their
customers' specific market requirements on a voluntary basis as a part
of doing business, but witnesses explained that mandatory requirements
lend credibility to the entire industry. In addition, such requirements
could reduce the risk that one shipment of substandard product would
jeopardize the entire industry's reputation.
Currently, outgoing quality requirements established under the
order apply to all handler entities regardless of size. If regulations
are established pursuant to this amendment, distribution of any
increased costs between small and large entities would depend on the
requirements established for the markets to which individual handlers
shipped their almonds as well as the volume of almonds shipped to those
markets. But increases in cost would be equitable to all entities
because requirements for each market would be imposed uniformly on all
handlers shipping to that market.
Witnesses explained that almonds are used in many different ways by
the various markets. In Europe, almonds are widely used as marzipan and
ingredients for baked goods, candy, and other dishes. In India and the
Middle East, almonds are presented as gifts at holidays and weddings,
and play a part in other cultural traditions. India imports large
quantities of inshell almonds that are then processed by hand. The wide
range of uses leads to a similarly wide array of customer requirements.
According to record testimony, handlers adapt their export methods
to
[[Page 45155]]
satisfy customer requirements. One witness explained that it is often
difficult for smaller handlers to stay informed of rapidly changing
import regulations. The witness stated that small handlers in
particular would benefit from the authority to establish different
requirements for different markets by avoiding costly mistakes that
could be associated with not understanding various market and import
requirements. If regulations are established under this amendment, the
Board will provide information about updated requirements to the
industry.
Finally, one witness explained that having the ability under the
order to establish different outgoing quality requirements for
different markets will not restrict handlers' choices regarding which
markets to supply. Rather, the provision will ensure that the important
standards that differentiate markets will be consistently met by all
handlers shipping to those markets.
Proposal 2--Adding the Authority To Establish Container Labeling and
Marking Requirements
The second amendment adds Sec. 981.43 to the order to provide
general authority to establish container marking and labeling
requirements. This amendment will allow the Board, through the informal
rulemaking process, to recommend and establish uniform container
marking and labeling regulations in response to evolving market
requirements. Under previous order provisions, there is only very
limited authority for container marking and labeling requirements.
Witnesses testified that the lack of this authority has hindered
them from adapting quickly and appropriately to recent market
situations. In one case described at the hearing, the industry was
unable to implement container marking or labeling following recalls for
possible Salmonella contamination. Witnesses stated that customer
confidence in almond quality could have been reinforced if the
necessary authority to establish marking and labeling requirements had
been available. Such authority would have allowed the industry to
prescribe labeling to clearly indicate which almonds had been treated
to reduce risk of contamination.
The amendment will allow the industry to respond to evolving market
needs as they develop by establishing uniform and consistent marking
and labeling requirements. According to proponents, the ability to
communicate important product information to customers in a uniform and
consistent manner will be essential as the industry strives to maintain
its position in the expanding global marketplace.
If regulations are implemented pursuant to this amendment, costs of
complying with any regulations established thereunder will not be
disproportionate to small businesses. Witnesses testified that applying
labels and marks to almond containers is currently a common practice,
and industry handlers already have container marking processes and
equipment in place. Therefore, the costs associated with the addition
of uniform marking or labeling requirements will be minimal for both
small and large entities. The record shows that any costs will likely
be offset by the benefits derived from being more responsive to market
demands.
Interested persons were invited to present evidence at the hearing
on the probable regulatory and informational impact of the proposed
amendments to the order on small entities. The record evidence
indicates that the amendments are intended to benefit all producers and
handlers under the order, regardless of size. Further, the record shows
that the costs associated with implementing regulations would be
outweighed by the benefits expected to accrue to the California almond
industry.
USDA has not identified any relevant Federal rules that duplicate,
overlap or conflict with this rule. These amendments are designed to
enhance the administration and functioning of the order to the benefit
the California almond industry.
Paperwork Reduction Act
Information collection requirements for part 981 are currently
approved by the Office of Management and Budget (OMB), under OMB Number
0581-0178, Vegetable and Specialty Crops. Implementation of these
amendments will not trigger any changes to those requirements. Should
any such changes become necessary in the future, they will be submitted
to OMB for approval.
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 Government Paperwork
Elimination Act, which requires Government agencies in general to
provide the public the option of submitting information or transacting
business electronically to the maximum extent possible.
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.
Civil Justice Reform
The amendments to Marketing Order 981 stated herein have been
reviewed under Executive Order 12988, Civil Justice Reform. They are
not intended to have retroactive effect. The amendments will not
preempt any State or local laws, regulations, or policies, unless they
present an irreconcilable conflict with an amendment.
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 Sates 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 the
entry of the ruling.
Order Amending the Order Regulating the Handling of Almonds Grown in
California
Findings and Determinations
The findings and determinations set forth hereinafter are
supplementary and in addition to the findings and determinations
previously made in connection with the issuance of the order; and all
of 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.
(a) Findings and Determinations Upon the Basis of the Hearing
Record.
Pursuant to the provisions of the Agricultural Marketing
Agreement Act of 1937, as amended (7 U.S.C. 601-674) and the
applicable rules of practice and procedure effective thereunder (7
CFR part 900), a public hearing was held upon the proposed
amendments to Marketing Order No. 981 (7 CFR part 981), regulating
the handling of almonds grown in California.
Upon the basis of the evidence introduced at such hearing and
the record thereof, it is found that:
(1) The marketing order, as amended, and as hereby further
amended, and all of the terms and conditions thereof, will tend to
effectuate the declared policy of the Act;
[[Page 45156]]
(2) The marketing order, as amended, and as hereby further
amended, regulates the handling of almonds grown in the production
area in the same manner as, and is applicable only to persons in the
respective classes of commercial and industrial activity specified
in the marketing order upon which hearings have been held;
(3) The marketing order, as amended, and as hereby further
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 orders
applicable to subdivision of the production area would not
effectively carry out the declared policy of the Act;
(4) The marketing order, as amended, and as hereby further
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 almonds grown in the production area;
and
(5) All handling of almonds grown in the production area is in
the current of interstate or foreign commerce or directly burdens,
obstructs, or affects such commerce.
(b) Additional Findings.
It is necessary and in the public interest to make these
amendments effective not later than one day after publication in the
Federal Register. A later effective date would unnecessarily delay
implementation of the new amendments. These amendments should be in
place as soon as possible as the new crop year begins August 1.
Making the effective date one day after publication in the Federal
Register will allow the industry to consider regulations
implementing the new order authorities at the beginning of the new
crop year, which would be beneficial to the industry.
(c) Determinations. It is hereby determined that:
(1) Handlers (excluding cooperative associations of producers
who are not engaged in processing, distributing, or shipping almonds
covered by the order as hereby amended) who, during the period
August 1, 2006, through July 31, 2007, handled 50 percent or more of
the volume of such almonds covered by said order, as hereby amended,
have not signed an amended marketing agreement; and,
(2) The issuance of this amendatory order, further amending the
aforesaid order, is favored or approved by at least two-thirds of
the producers who participated in a referendum on the question of
approval and who, during the period of August 1, 2006, through July
31, 2007 (which has been deemed to be a representative period), have
been engaged within the production area in the production of such
almonds, such producers having also produced for market at least
two-thirds of the volume of such commodity represented in the
referendum; and
(3) In the absence of a signed marketing agreement, the issuance
of this amendatory order is the only practical means pursuant to the
declared policy of the Act of advancing the interests of producers
of almonds in the production area.
Order Relative to Handling of Almonds Grown in California
It is therefore ordered, that on and after the effective dates
hereof, all handling of almonds grown in California shall be in
conformity to, and in compliance with, the terms and conditions of the
said order as hereby amended as follows:
The provisions of the proposed order further amending the order
contained in the Secretary's Decision issued by the Administrator on
February 27, 2008, and published in the Federal Register on March 3,
2008 (73 FR 11360), shall be and are the terms and provisions of this
order amending the order and set forth in full herein.
List of Subjects in 7 CFR Part 981
Almonds, Marketing agreements, Nuts, Reporting and recordkeeping
requirements.
PART 981--ALMONDS GROWN IN CALIFORNIA
0
For the reasons set forth in the preamble, Title 7 of Chapter XI of the
Code of Federal Regulations is amended by amending part 981 to read as
follows:
0
1. The authority citation for 7 CFR part 981 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
0
2. Amend paragraph (b) of Sec. 981.42 by adding the following sentence
before the last sentence to read as follows:
Sec. 981.42 Quality control.
* * * * *
(b) * * * The Board may, with the approval of the Secretary,
establish different outgoing quality requirements for different
markets. * * *
0
3. Add a new Sec. 981.43 to read as follows:
Sec. 981.43 Marking or labeling of containers.
The Board may, with the approval of the Secretary, establish
regulations to require handlers to mark or label their containers that
are used in packaging or handling of bulk almonds. For purposes of this
section, container means a box, bin, bag, carton, or any other type of
receptacle used in the packaging or handling of bulk almonds.
Dated: July 30, 2008.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E8-17827 Filed 8-1-08; 8:45 am]
BILLING CODE 3410-02-P