Nectarines and Fresh Peaches Grown in California; Termination of Marketing Order 916 and the Peach Provisions of Marketing Order 917, 66602-66606 [2011-27286]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 76, Number 208 (Thursday, October 27, 2011)]
[Rules and Regulations]
[Pages 66602-66606]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-27286]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 916 and 917

[Doc. No. AMS-FV-11-0018; FV11-916/917-4 FR]


Nectarines and Fresh Peaches Grown in California; Termination of 
Marketing Order 916 and the Peach Provisions of Marketing Order 917

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule, termination of order.

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SUMMARY: This final rule terminates the Federal marketing orders 
regulating the handling of nectarines and fresh peaches grown in 
California (orders) and the rules and regulations issued thereunder. 
The Department of Agriculture (USDA) has determined that these 
marketing orders are no longer an effective marketing tool for the 
handling of nectarines and fresh peaches grown in California and that 
termination best serves the current needs of the industry while also 
eliminating the costs associated with the operation of the marketing 
orders.

DATES: Effective Date: October 28, 2011.

FOR FURTHER INFORMATION CONTACT: Jerry L. Simmons, Marketing 
Specialist, or Kurt J. Kimmel, Regional Manager, California Marketing 
Field Office, Marketing Order and Agreements Division, Fruit and 
Vegetable Programs, AMS, USDA; Telephone: (559) 487-5901; Fax: (559) 
487-5906; or Email: Jerry.Simmons@ams.usda.gov or 
Kurt.Kimmel@ams.usda.gov.
    Small businesses may request information on complying with this 
regulation by contacting Laurel May, Marketing Order and Agreements 
Division, 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 Email: Laurel.May@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This action is governed by Section 
608c(16)(A) of the Agricultural Marketing Agreement Act of 1937, as 
amended (7 U.S.C. 601-674), hereinafter referred to as the ``Act'' and 
issued under Marketing Order Nos. 916 and 917, both as amended (7 CFR 
parts 916 and 917), regulating the handling of nectarines and peaches 
grown in California, respectively, hereinafter referred to as the 
``orders.''
    USDA is issuing this rule in conformance with Executive Order 
12866.
    This final rule to terminate the orders has been reviewed under 
Executive Order 12988, Civil Justice Reform. This 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 rule terminates Marketing Order 916--the nectarine order--and 
the peach provisions of Marketing Order 917--the fresh pear and peach 
order--as well as the pertinent rules and regulations issued 
thereunder. USDA believes that termination of these programs is 
appropriate because the programs are no longer favored by industry 
growers.
    The orders authorize regulation of the handling of nectarines and 
fresh pears and peaches grown in California. Sections 916.64 and 917.61 
of the orders require USDA to conduct continuance referenda among 
growers of these fruits every four years to ascertain continuing 
support for the orders and their programs. These sections further 
require USDA to terminate the orders if it finds that the provisions of 
the orders no longer tend to effectuate the declared policy of the Act. 
Section 608c(16)(A) of the Act requires USDA to terminate or suspend 
the operation of any order whenever the order or any provision thereof 
obstructs or does not tend to effectuate the declared policy of the 
Act. Finally, USDA is required to notify Congress of the intended 
terminations not later than 60 days before the date the orders would be 
terminated.
    Continuance referenda were conducted among growers of California 
nectarines and fresh pears and peaches in January and February 2011. 
Less than two-thirds of participating growers, by number and production 
volume, voted in favor of continuing the nectarine and peach orders. By 
contrast, more than 94 percent of pear growers voted to continue the 
pear order provisions.

[[Page 66603]]

    Grower support for the programs was similar in the last referenda, 
which were conducted in 2003. USDA conducted public listening sessions 
following the referenda and found that the nectarine and peach orders 
might continue to benefit the industries if modifications were made to 
the programs. Subsequently, several revisions were made to the orders 
and the handling regulations over the last several years. Continuance 
referendum requirements were suspended for 2007 because the orders had 
just been amended, and the industries wanted to operate the amended 
orders for a period of time before voting again on continuance.
    Nevertheless, the results of the most recent referenda, as well as 
feedback from the industries over the last few years, suggest that the 
nectarine and peach programs no longer meet industry needs and that the 
benefits of such programs no longer outweigh costs to handlers and 
growers. USDA believes that the referendum results and industry 
feedback support termination of the programs.
    As stated earlier, pear growers in the most recent referendum, as 
well as in previous referenda, supported continuance of the pear order 
provisions, which have been suspended since 1994 (59 FR 10055; March 3, 
1994). USDA does not intend to terminate the pear order provisions at 
this time. The remainder of this document pertains to the termination 
of the nectarine and peach order provisions only.
    The nectarine order has been in effect since 1958, and the peach 
order since 1939. Operating under the management umbrella of the 
California Tree Fruit Agreement (CTFA), the orders have provided the 
California fresh tree fruit industries with authority for grade, size, 
quality, maturity, pack, and container regulations, as well as the 
authority for mandatory inspection. The orders also authorize 
production research and marketing research and development projects, as 
well as the necessary reporting, recordkeeping, and assessment 
functions required for operation.
    Based on the referendum results and other pertinent factors, USDA 
suspended the orders' handling regulations on April 19, 2011 (76 FR 
21615). The suspended handling regulations consist of minimum quality 
and inspection requirements for nectarines and peaches marked with the 
``California Well Matured'' label, which is available for use only by 
handlers complying with prescribed quality and maturity requirements 
under the orders. As well, all reporting and assessment requirements 
were suspended.
    Originally established to maintain the orderly marketing of 
California tree fruit, the quality regulations under the order evolved 
over the years to reflect industry trends. The ``California Well 
Matured'' label was developed to define standards for premium quality 
fruit harvested and packed at its peak to satisfy customer demands. 
Working with the Federal and Federal-State Inspection Programs, the 
Nectarine Administrative Committee and Peach Commodity Committee 
(committees), which administer the day-to-day operations of the 
programs, recommended variety-specific size and maturity standards that 
were incorporated into the regulations. These standards helped ensure 
that the industry marketed and shipped the highest quality fruit, which 
in turn supported increased returns to growers and handlers. A 
``utility grade'' was defined to allow for the movement of a certain 
percentage of lesser quality fruit to markets where it could be sold 
without undermining the industry's overall marketing goals.
    Funded through assessments paid by handlers, the committees 
sponsored production research programs to address grower needs such as 
pesticide use and development of new fruit varieties. As well, post-
harvest handling concerns, such as container and pack configuration, 
were addressed through committee-funded research. Assessment funds were 
also used to fund market research and development projects, promoting 
California tree fruit in both domestic and international markets.
    In recent years, changes in the industry led the committees to 
reduce the number of programs they supported through the orders. 
Because many customers now establish their own quality standards, the 
committees felt it was no longer essential to mandate inspection and 
certification of packed fruit to marketing order standards. During the 
last few years, only those handlers wishing to use the ``California 
Well Matured'' label were required to obtain inspection and 
certification. With the consolidation of many smaller farms, larger 
companies have undertaken their own research and promotion programs, 
thus minimizing the desirability of committee-funded generic programs.
    The industries proposed several amendments to the orders, which 
were effectuated in 2006 and 2007 (71 FR 41345; July 21, 2006). The 
amendments modernized the orders to streamline administration of the 
programs. The district boundaries within the regulated production areas 
were redefined, and the committee structures and nomination procedures 
were modified to provide greater opportunities for participation in 
committee activities by industry members.
    Despite USDA efforts to help refine the programs over the past 
several years, growers have continued to express their belief that the 
programs no longer meet their needs. These referendum results 
demonstrate a lack of grower support needed to carry out the objectives 
of the Act. Thus, it has been determined that the provisions of the 
orders no longer tend to effectuate the declared policy of the Act and 
should be terminated.
    Specifically, part 916, regulating the handling of nectarines grown 
in California is removed from the Code of Federal Regulations. In part 
917, which regulates the handling of both pears and peaches, Sec. Sec.  
916.8, 917.22, 917.150, 917.258, 917.259, 917.442, and 917.459, which 
relate solely to peaches, are removed. Sec. Sec.  917.4, 917.5, 917.6, 
917.15, 917.20, 917.24, 917.25, 917.26, 917.28, 917.29, 917.34, 917.35, 
917.37, 917.100, 917.119, and 917.143 are revised to remove references 
to peaches and to conform to removal of other sections. In some 
sections of part 917, language relating to the regulation of pears is 
currently suspended. Such suspensions are lifted to facilitate revision 
of these sections. Finally, the remaining provisions and administrative 
rules and regulations under part 917 are suspended indefinitely.

Final Regulatory Flexibility Analysis

    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing 
Service (AMS) has considered the economic impact of this rule 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 the 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 97 California nectarine and peach handlers 
subject to regulation under the orders covering nectarines and peaches 
grown in California, and about 447 growers of these fruits in 
California. Small agricultural service firms, which include handlers, 
are defined by the Small Business Administration (SBA)

[[Page 66604]]

(13 CFR 121.201) as those having annual receipts of less than 
$7,000,000, and small agricultural growers are defined as those having 
annual receipts of less than $750,000. A majority of these handlers and 
growers may be classified as small entities.
    For the 2010 marketing season, the committees' staff estimated that 
the average handler price received was $10.50 per container or 
container equivalent of nectarines or peaches. A handler would have to 
ship at least 666,667 containers to have annual receipts of $7,000,000. 
Given data on shipments maintained by the committees' staff and the 
average handler price received during the 2010 season, the committees' 
staff estimates that approximately 46 percent of handlers in the 
industry would be considered small entities.
    For the 2010 marketing season, the committees' staff estimated the 
average grower price received was $5.50 per container or container 
equivalent for nectarines and peaches. A grower would have to produce 
at least 136,364 containers of nectarines and peaches to have annual 
receipts of $750,000. Given data maintained by the committees' staff 
and the average grower price received during the 2010 season, the 
committees' staff estimates that more than 80 percent of the growers 
within the industry would be considered small entities.
    This rule terminates the Federal marketing orders for nectarines 
and peaches grown in California, and the rules and regulations issued 
thereunder. USDA believes that the orders no longer meet the needs of 
growers and handlers. The results of recent grower referenda and 
experience with the industries support order terminations.
    Sections 916.64 and 917.61 of the orders provide that USDA shall 
terminate or suspend any or all provisions of the orders when a finding 
is made that the orders do not tend to effectuate the declared policy 
of the Act. Furthermore, Sec.  608c(16)(A) of the Act provides that 
USDA shall terminate or suspend the operation of any order whenever the 
order or provision thereof obstructs or does not tend to effectuate the 
declared policy of the Act. An additional provision requires that 
Congress be notified not later than 60 days before the date the orders 
would be terminated.
    Although marketing order requirements are applied to handlers, the 
costs of such requirements are often passed on to growers. Termination 
of the orders, and the resulting regulatory relaxation, would therefore 
be expected to reduce costs for both handlers and growers.
    As an alternative to this rule, AMS considered not terminating the 
nectarine and peach order provisions. In that case, the industries 
could have recommended further refinements to the orders and the 
handling regulations in order to meet current marketing needs. However, 
such changes made to the programs over the last several years have 
failed to improve the programs enough to warrant continuing grower 
support. Therefore, this alternative was rejected, and AMS recommended 
that the programs be terminated.
    In accordance with the Paperwork Reduction Act of 1995, (44 U.S.C. 
Chapter 35), the information collection requirements being terminated 
were approved previously by the Office of Management and Budget (OMB) 
and assigned OMB No. 0581-0189, Generic Fruit Crops. Termination of the 
reporting requirements under the orders would reduce the reporting and 
recordkeeping burden on California nectarine and peach handlers by 
339.45 hours, and should further reduce industry expenses. Since 
handlers would no longer be required to file forms with the Committee, 
this final rule does not impose any additional reporting or 
recordkeeping requirements on either small or large entities.
    On February 25, 2011, AMS published a notice and request for 
comments regarding the request for OMB approval of a new information 
collection for nectarine and peach handlers (76 FR 10555). Five new 
forms were proposed for the collection of industry information that 
would have facilitated administration of the orders. Such information 
collection would have increased the annual reporting burden for 
industry handlers by 2,878.70 hours. The request for OMB approval of 
the new information collection has been withdrawn.
    As with all Federal marketing order programs, reports and forms are 
periodically reviewed to reduce information requirements and 
duplication by industry and public sector agencies.
    In addition, USDA has not identified any relevant Federal rules 
that duplicate, overlap or conflict with this rule.
    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.
    The grower referendum was well publicized in the production area, 
and referendum ballots were mailed to all known growers of nectarines 
and peaches in California. As well, all interested persons have been 
invited to attend the committees' meetings over the years and 
participate in discussions regarding the programs developed under the 
orders.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: https://www.ams.usda.gov/MarketingOrdersSmallBusinessGuide. Any questions 
about the compliance guide should be sent to Laurel May at the 
previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    A proposed rule inviting comments regarding the termination of 
nectarines and peaches was published in the Federal Register on June 2, 
2011 (75 FR 31888). The rule was made available by the Committees to 
handlers and producers. In addition the rule was made available through 
the Internet by the USDA and the office of the Federal Register. The 
rule provided a 15 day comment period which ended on June 17, 2011. No 
comments were received.
    Based on the foregoing, and pursuant to Sec.  608c(16)(A) of the 
Act and Sec. Sec.  916.64 and 917.61 of the orders, USDA is terminating 
the orders, as they do not tend to effectuate the declared policy of 
the Act. USDA hereby appoints a Trustee Oversight Committee to conclude 
and liquidate the affairs of the Committee, and to continue in that 
capacity until discharged by USDA. The appointed Committee members are 
Russ Tavlan (Vice Chairman), Mike Reimer, Mark Bybee, and Rick Jackson 
(Chairman) of the Peach Commodity Committee and Casey Jones, Rick 
Jackson, Jeff Bolt (Vice Chairman) and Rod Milton (Chairman) of the 
Nectarine Administrative Committee, as trustees they will oversee this 
liquidation.
    Section 8c(16)(A) of the Act requires USDA to notify Congress at 
least 60 days before terminating a Federal marketing order program. 
USDA notified Congress on July 5, 2011 of its intention to terminate 
this marketing order.
    It is further found that good cause exists for not postponing the 
effective date of this rule until 30 days after publication in the 
Federal Register (5 U.S.C. 553) because (1) This action relieves 
restrictions on handlers by terminating the requirements of the 
nectarine and peach orders, (2) A proposed rule inviting comments 
regarding the termination of nectarines and Peaches was published in 
the Federal Register on June 2, 2011 (75 FR 31888) and no comments were 
received, (3) all handling regulations have been suspended under the 
order for nectarine

[[Page 66605]]

and peaches since April 19, 2011, and (4) no useful purpose would be 
served by delaying the effective date.

List of Subjects

7 CFR Part 916

    Marketing agreements, Nectarines, Reporting and recordkeeping 
requirements.

7 CFR Part 917

    Marketing agreements, Peaches, Pears, Reporting and recordkeeping 
requirements.
    For the reasons set forth in the preamble, 7 CFR part 916 is 
removed and 7 CFR part 917 is amended as follows:

0
1. The authority citation for 7 CFR parts 916 and 917 continues to read 
as follows:

    Authority:  7 U.S.C. 601-674.

PART 916--NECTARINES GROWN IN CALIFORNIA

0
2. 7 CFR part 916 is removed.

PART 917--FRESH PEARS AND PEACHES GROWN IN CALIFORNIA

0
3. In part 917, Sec. Sec.  917.1 through 917.3, Sec.  917.7, Sec.  
917.9, Sec. Sec.  917.11 through 917.14, Sec. Sec.  917.16 through 
917.19, Sec.  917.27, Sec. Sec.  917.30 through 917.33, Sec.  917.36, 
Sec. Sec.  917.38 through 917.43, Sec.  917.45, Sec.  917.50, 
Sec. Sec.  917.60 through 917.69, Sec. Sec.  917.101, Sec.  917.103, 
Sec.  917.110, Sec.  917.115, and Sec.  917.122 are suspended 
indefinitely.


Sec.  917.4  [Amended]

0
4. In Sec.  917.4, lift the suspension of July 21, 2006 (71 FR 41351); 
remove paragraphs (a) and (b); redesignate paragraph (c) as paragraph 
(a); add and reserve paragraph (b); and suspend the section 
indefinitely.


Sec.  917.5  [Amended]

0
5. In Sec.  917.5, remove the second sentence and suspend the section 
indefinitely.


Sec.  917.6  [Amended]

0
6. In Sec.  917.6, remove the words ``That for peaches, packing or 
causing the fruit to be packed also constitutes handling; Provided 
further,'' and suspend the section indefinitely.


Sec.  917.8  [Removed]

0
7. Remove Sec.  917.8.


Sec.  917.15  [Amended]

0
8. In Sec.  917.15, lift the suspension of March 3, 1994 (59 FR 10055), 
remove the words ``Sec. Sec.  917.21 through 917.22'' and add in their 
place the words ``Sec.  917.21,'' and suspend the section indefinitely.


Sec.  917.20  [Amended]

0
9. In Sec.  917.20, lift the suspension of March 3, 1994 (59 FR 10055), 
and revise the section to read as follows, and suspend the section 
indefinitely:


Sec.  917.20  Designation of members of commodity committees.

    There is hereby established a Pear Commodity Committee consisting 
of 13 members. Each commodity committee may be increased by one public 
member nominated by the respective commodity committee and selected by 
the Secretary. The members of each said committee shall be selected 
biennially for a term ending on the last day of February of odd 
numbered years, and such members shall serve until their respective 
successors are selected and have qualified. The members of each 
commodity committee shall be selected in accordance with the provisions 
of Sec.  917.25.


Sec.  917.22  [Removed]

0
10. Remove Sec.  917.22.


Sec.  917.24  [Amended]

0
11. In Sec.  917.24, lift the suspensions of March 3, 1994 (59 FR 
10055), and February 21, 2007 (72 FR 7821); revise the section to read 
as follows; and suspend the section indefinitely:


Sec.  917.24  Procedure for nominating members of various commodity 
committees.

    (a) The Control Committee shall hold or cause to be held not later 
than February 15 for pears of each odd numbered year a meeting or 
meetings of the growers of the fruits in each representation area set 
forth in Sec.  917.21. These meetings shall be supervised by the 
Control Committee, which shall prescribe such procedures as shall be 
reasonable and fair to all persons concerned.
    (b) With respect to each commodity committee, only growers of the 
particular fruit who are present at such nomination meetings or 
represented at such meetings by duly authorized employees may 
participate in the nomination and election of nominees for commodity 
committee members and alternates. Each such grower, including employees 
of such grower, shall be entitled to cast but one vote for each 
position to be filled for the representation area in which he produces 
such fruit.
    (c) A particular grower, including employees of such growers, shall 
be eligible for membership as principle or alternate to fill only one 
position on a commodity committee. A grower nominated for membership on 
the Pear Commodity Committee must have produced at least 51 percent of 
the pears shipped by him during the previous fiscal period, or he must 
represent an organization which produced at least 51 percent of the 
pears shipped by it during such period.


Sec.  917.25  [Amended]

0
12. In Sec.  917.25, lift the suspension of July 1, 2006 (71 FR 41352), 
remove and reserve paragraph (b), and suspend the section indefinitely.


Sec.  917.26  [Amended]

0
13. In Sec.  917.26, lift the suspension of March 3, 1994 (59 FR 
10055), remove the words ``Sec. Sec.  917.21 and 917.22'' and add in 
their place the word ``Sec.  917.21,'' and suspend the section 
indefinitely.


Sec.  917.28  [Amended]

0
14. In Sec.  917.28, lift the suspension of March 3, 1994 (59 FR 
10055), remove the words ``Sec. Sec.  917.16, 917.21, and 917.22'' and 
add in their place the words ``Sec. Sec.  917.16 and 917.21,'' and 
suspend the section indefinitely.


Sec.  917.29  [Amended]

0
15. In Sec.  917.29, lift the suspension of March 3, 1994 (59 FR 
10055), remove the words ``and of the Peach Commodity Committee'' and 
``each'' from paragraph (b), remove the final sentence of paragraph 
(d), and suspend the section indefinitely.


Sec.  917.34  [Amended]

0
16. In Sec.  917.34, lift the suspension of March 3, 1994 (59 FR 
10055), remove the words ``Sec. Sec.  917.21 and 917.22'' in paragraph 
(k) and add in their place the word ``Sec.  917.21'', and suspend the 
section indefinitely.


Sec.  917.35  [Amended]

0
17. In Sec.  917.35, lift the suspension of March 3, 1994 (59 FR 
10055), remove the words ``Peach and'' and ``each'' wherever they 
appear in paragraph (a), remove the final sentence of paragraph (d), 
and suspend the section indefinitely.


Sec.  917.37  [Amended]

0
18. In Sec.  917.37, remove the final three sentences of paragraph (b) 
and suspend the section indefinitely.


Sec.  917.100  [Amended]

0
19. In Sec.  917.100, lift the suspension of March 3, 1994 (59 FR 
10055), remove the words ``and peaches'', and suspend the section 
indefinitely.


Sec.  917.119  [Amended]

0
20. In Sec.  917.119, remove paragraph (a), redesignate paragraphs (b) 
through (e) as paragraphs (a) through (d), and suspend the section 
indefinitely.

[[Page 66606]]

Sec.  917.143  [Amended]

0
21. In Sec.  917.143, lift the suspension of April 18, 2011 (76 FR 
21618); remove the words ``and peaches'' from the introductory text of 
paragraph (b) and from paragraphs (b)(1), (b)(2), and (b)(4); remove 
the words ``and 200 pounds of peaches'' from paragraph (b)(3); and 
suspend the section indefinitely.


Sec.  917.150  [Removed]

0
22. Remove Sec.  917.150.

Subpart--Assessment Rates (Sec. Sec.  917.258 through 917.259) 
[Removed]

0
23. Remove Subpart--Assessment Rates, consisting of Sec. Sec.  917.258 
through 917.259.

Subpart--Container and Pack Regulation (Sec. Sec.  917.442) 
[Removed]

0
24. Remove Subpart--Container and Pack Regulation, consisting of Sec.  
917.442.


Sec.  917.459  [Removed]

0
25. Remove Sec. Sec.  917.459.

    Dated: October 14, 2011.
David R. Shipman,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2011-27286 Filed 10-26-11; 8:45 am]
BILLING CODE 3410-02-P