Amendments to the Marketing Order of Grapes Grown in a Southeastern California, 3699-3702 [2022-01306]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 87, Number 16 (Tuesday, January 25, 2022)]
[Proposed Rules]
[Pages 3699-3702]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-01306]


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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. 87, No. 16 / Tuesday, January 25, 2022 / 
Proposed Rules

[[Page 3699]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 925

[Doc. No.: AMS-SC-21-0049; SC21-925-2]


Amendments to the Marketing Order of Grapes Grown in a 
Southeastern California

AGENCY: Agricultural Marketing Service (AMS), Department of Agriculture 
(USDA).

ACTION: Proposed rule and referendum order.

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SUMMARY: This rulemaking proposes amendments to Marketing Order No. 
925, which regulates the handling of grapes grown in a designated area 
of southeastern California. The proposed amendments would change the 
California Desert Grape Administrative Committee's (Committee) size, 
and its quorum and voting requirements.

DATES: The referendum will be conducted from February 14 through March 
4, 2022. The representative period for the referendum is January 1 
through December 31, 2021.

ADDRESSES: Interested persons with questions and comments are invited 
to submit written questions and comments to the Docket Clerk, Market 
Development Division, Specialty Crops Program, AMS, USDA, 1400 
Independence Avenue SW, Stop 0237, Washington, DC 20250-0237; or 
Telephone: (202) 720-2491.

FOR FURTHER INFORMATION CONTACT: Pushpa Kathir, Marketing Specialist, 
or Matthew Pavone, Rulemaking Services Branch Chief, Market Development 
Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue 
SW, Stop 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, or 
Email: [email protected] or [email protected].
    Small businesses may request information on complying with this 
regulation by contacting Richard Lower, Market Development Division, 
Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, Stop 
0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, or Email: 
[email protected].

SUPPLEMENTARY INFORMATION: Pursuant to 5 U.S.C. 553, proposes 
amendments to regulations issued to carry out a marketing order as 
defined in 7 CFR 900.2(j) are proposed. This proposal is issued under 
Marketing Order No. 925, as amended (7 CFR part 925), regulating the 
handling of grapes grown in a designated area of southeastern 
California. Part 925 (referred to as the ``Order'') is effective under 
the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 
601-674), hereinafter referred to as the ``Act.'' The Committee locally 
administers the Order and is comprised of grape producers and handlers 
operating within the area of production, and a public member.
    The Department of Agriculture (USDA) is issuing this proposed rule 
in conformance with Executive Orders 12866 and 13563. Executive Orders 
12866 and 13563 direct agencies to assess all costs and benefits of 
available regulatory alternatives and, if regulation is necessary, to 
select regulatory approaches that maximize net benefits (including 
potential economic, environmental, public health and safety effects, 
distributive impacts, and equity). Executive Order 13563 emphasizes the 
importance of quantifying both costs and benefits, reducing costs, 
harmonizing rules, and promoting flexibility. This action falls within 
a category of regulatory actions that the Office of Management and 
Budget (OMB) exempted from Executive Order 12866 review.
    In addition, this proposed rule has been reviewed under Executive 
Order 13175--Consultation and Coordination with Indian Tribal 
Governments, which requires agencies to consider whether their 
rulemaking actions would have tribal implications. The Agricultural 
Marketing Service (AMS) has determined this proposed rule is unlikely 
to have substantial direct effects on one or more Indian tribes, on the 
relationship between the Federal Government and Indian tribes, or on 
the distribution of power and responsibilities between the Federal 
Government and Indian tribes.
    This proposal has also been reviewed under Executive Order 12988, 
Civil Justice Reform. This rule is not intended to have retroactive 
effect. This rule shall not be deemed to preclude, preempt, or 
supersede any State program covering grapes grown in a designated area 
of southeastern California.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 8c(15)(A) of the 
Act (7 U.S.C. 608 (15)(A)), any handler subject to an order may file 
with USDA a petition stating that the order, any provision of the 
order, or any obligation imposed in connection with the order is not in 
accordance with law and request a modification of the order or to be 
exempted therefrom. A handler is afforded the opportunity for a hearing 
on the petition. After the hearing, USDA would rule on the petition. 
The Act provides that the district court of the United States in any 
district in which the handler is an inhabitant, or has his or her 
principal place of business, has jurisdiction to review USDA's ruling 
on the petition, provided an action is filed no later than 20 days 
after the date of entry of the ruling.
    Section 1504 of the Food, Conservation, and Energy Act of 2008 
(2008 Farm Bill) (Pub. L. 110-246) amended section 8c(17) of the Act, 
which in turn required the addition of supplemental rules of practice 
to 7 CFR part 900 (73 FR 49307; August 21, 2008). The amendment of 
section 8c(17) of the Act and supplemental rules of practice authorize 
the use of informal rulemaking (5 U.S.C. 553) to amend Federal fruit, 
vegetable, and nut marketing agreements and orders. USDA may use 
informal rulemaking to amend marketing orders depending upon the nature 
and complexity of the proposed amendments, potential regulatory and 
economic impacts on affected entities, and any other relevant matters.
    AMS has considered these factors and has determined that the 
amendments proposed herein are not unduly complex and the nature of the 
proposed amendments is appropriate for utilizing the informal 
rulemaking process to amend the Order.
    The Committee unanimously recommended the amendments following 
deliberations at a public meeting on April 13, 2021. This proposal 
would amend the Order by

[[Page 3700]]

changing the Committee's size, and its quorum and voting requirements.
    A proposed rule soliciting comments on the proposed amendments was 
published in the Federal Register on August 13, 2021 (86 FR 44644). Two 
comments were received in support of the proposed amendments, so no 
changes will be made to the proposed amendments.
    AMS will conduct a producer referendum to determine support for the 
proposed amendments. If appropriate, a final rule will then be issued 
to effectuate the amendments, if they are favored by producers in the 
referendum.

Proposal 1--Reduce Committee Size

    Sec.  925.20 provides that the Committee consists of 12 members 
and, for each member of the Committee, there must be an alternate who 
has the same qualifications as the member. This proposal would amend 
Sec.  925.20 by reducing the size of the Committee from 12 to 10 
members. The requirement that each member has an alternate with the 
same qualifications as the member would remain unchanged. Four members 
and their alternates would be producers or officers or employees of 
producers (producer members). Four members and their alternates would 
be handlers or officers or employees of handlers (handler members). One 
member and alternate would be either a producer or handler or officer 
or employee thereof. One member and alternate would represent the 
public.
    Since promulgation of the Order in 1980, the California table grape 
industry has seen reductions of about 55 percent of its producers and 
58 percent of its registered handlers, which makes it difficult to find 
eligible members to fill all positions on the Committee. Industry 
consolidation and land development pressure due to conversion of lands 
for residential and commercial uses have contributed to this decline. 
Decreasing the Committee's size from 12 members to 10 members would 
make Committee membership more reflective of today's industry and 
enable the Committee to fill all its member positions without 
difficulty.

Proposal 2--Revise Quorum and Voting Requirements

    Currently, Sec.  925.30 states that eight members of the Committee 
shall constitute a quorum, and any action of the committee shall 
require at least eight concurring votes.
    The proposed change would modify Sec.  925.30 to allow six members 
to constitute a quorum including, at a minimum, one producer member and 
one handler member, with six concurring votes required to pass any 
motion or approve any Committee action.
    The Committee is experiencing difficulties filling member seats and 
obtaining a quorum at meetings to conduct business activities. 
Adjusting current requirements would enable the Committee to operate 
fully, mitigating the risk of not establishing a quorum during 
scheduled meetings and not having the required votes to pass any 
action. These changes would help to streamline the Committee's 
operations and increase its effectiveness.

Final Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), AMS has considered the economic impact of 
this proposed rule on small entities. Accordingly, AMS has prepared 
this final regulatory flexibility analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
businesses subject to such actions so that small businesses will not be 
unduly or disproportionately burdened.
    Small agricultural producers have been defined by the Small 
Business Administration (SBA) (13 CFR 121.201) as those having annual 
receipts of no more than $1,000,000. Small agricultural service firms 
(handlers) are defined as those with annual receipts of no more than 
$30,000,000.
    Proposed amendments to the Order would reduce the number of members 
and alternates seats on the Committee from 12 to 10 and reduce the 
quorum and voting requirements from 8 to 6 members. These amendments 
are necessary to reflect the industry's consolidation. Since 
promulgation of the Order in 1980, the California table grape industry 
has lost roughly 55 percent of its producers and 58 percent of its 
registered handlers.
    Committee reports that there are 21 producers and 10 handlers of 
table grapes in the production region. Committee packout reports show 
that average annual packout for 2018 through 2020 was 3.2127 million 
18-pound containers, equivalent to 28,914 tons. The 3-year average of 
California fresh table grape prices was $1,267 per ton. Multiplying 
quantity by price yields an annual average crop value estimate of 
$36.634 million. Dividing the average crop value estimate by the number 
of producers (21) yields an average crop value per producer of $1.744 
million, moderately larger than the SBA small farm size threshold of 
$1,000,000. Therefore, using the estimated prices, packout volume, and 
number of producers and assuming a normal bell-curve distribution of 
receipts among producers, AMS estimates the majority of producers would 
qualify as large businesses under the SBA definition.
    Dividing the average crop value of $36.634 million by the number of 
handers (10) yields a per-handler estimate of $3.663 million, well 
below the SBA small business threshold of $30,000,000 in annual 
receipts. However, that computation measures handler annual receipts 
using producer-level crop value data, since AMS is unable to locate an 
estimate of a handler margin. A range of handler margin estimates would 
be 30 to 40 percent above the grower price. Applying those two 
percentages, a range of handler annual receipts estimates would be $4.8 
to $5.1 million, still well below $30,000,000. Therefore, using these 
estimated prices, utilization volume, handler margin estimates and 
number of handlers, AMS estimates that the majority of handlers would 
meet the SBA definition of small businesses.
    AMS has determined that the proposed amendments would not have a 
significant impact on a substantial number of small businesses. Both 
large and small entities would be expected to benefit from the 
Committee's improved ability to address important issues on a timely 
basis. The proposed reduction in the number of seats on the Committee, 
and the reduced quorum and voting requirements, would not require any 
significant changes in producer or handler business operations, and no 
significant industry educational effort would be needed. Producers and 
handlers, large and small would incur no additional costs. No small 
businesses would be unduly or disproportionately burdened.
    The Committee unanimously recommended the proposed amendments at a 
public meeting on April 13, 2021. If these proposals are approved in a 
referendum, there would be no direct financial effects on producers or 
handlers. However, these proposed changes would have indirect financial 
effects--decreased administrative costs to producers and Committee 
staff stemming from fewer resources required to the annual preparation 
of multiple nomination notices and meetings, and reduced travel 
expenses associated with carrying out annual duties.
    Since 1980, the number of producers and handlers operating in the 
industry has decreased, which makes it difficult to find enough members 
to fill positions on the Committee. Decreasing the Committee's size 
would make it more reflective of today's industry. No

[[Page 3701]]

economic impact is expected if the proposed amendments are approved 
because they would not establish any new regulatory requirements on 
handlers, nor would they have any assessment or funding implications. 
There would be no change in financial costs associated with reporting 
or recordkeeping requirements if this proposal is approved.
    Alternatives to this proposal, including making no changes at this 
time, were considered by the Committee. Due to changes in the industry, 
AMS believes the proposals are justified and necessary to ensure the 
Committee's ability to locally administer the program. Reducing the 
size of the Committee would enable it to satisfy membership, and quorum 
and voting requirements fully, thereby ensuring a more efficient and 
orderly flow of business.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the Order's information collection requirements have been 
previously approved by OMB and assigned OMB No. 0581-0189, Fruit Crops. 
No changes in those requirements are necessary because of this action. 
Should any changes become necessary, they would be submitted to OMB for 
approval.
    This proposed rule would impose no additional reporting or 
recordkeeping requirements on either small or large California table 
grape handlers. As with all Federal marketing order programs, reports 
and forms are periodically reviewed to reduce information requirements 
and duplication by industry and public-sector agencies.
    AMS is committed to complying with the E-Government Act, to promote 
the use of the internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this action.
    The Committee's meetings are widely publicized throughout the 
southeastern California table grape production area. All interested 
persons are invited to attend the meetings, whether held virtually or 
in-person, and encouraged to participate in Committee deliberations on 
all issues. As with all Committee meetings, the April 13, 2021, meeting 
was public, and all entities, both large and small, were encouraged to 
express their views on the proposed amendments.
    A proposed rule concerning this action was published in the Federal 
Register on August 13, 2021 (86 FR 44644). A copy of the rule was sent 
via email to the Committee Manager for disposal to all Committee 
members and California table grape handlers. Finally, the proposed rule 
was made available by USDA through the internet and the office of the 
Federal Register. A 60-day comment period ending October 12, 2021, was 
provided to allow interested persons to respond to the proposal. Two 
comments were received during the comment period, both of which were in 
support of the proposed amendments. However, one commentor was 
concerned that the restructure of the Committee might limit the 
participation of interested parties in the industry. Further, the 
commentor suggested adding a requirement for periodic review of the 
Committee structure to the regulations.
    USDA and the Committee encourage the participation of all eligible 
interested parties in the administration of the Order. The proposed 
restructuring of the Committee is not intended to limit the 
participation of individuals on the Committee, but rather to reflect 
the current industry demographic and to facilitate the ability of the 
Committee to function moving forward. Furthermore, the Committee has 
the ability to recommend changes to the Committee structure when it is 
deemed appropriate, and the addition of a regulatory review requirement 
is not necessary. As such, no changes will be made to the amendments as 
proposed.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: 
https://www.ams.usda.gov/rules-regulations/moa/small-businesses. Any 
questions about the compliance guide should be sent to Richard Lower at 
the previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.

Findings and Conclusions

    The findings and conclusions, and general findings and 
determinations included in the proposed rule set forth in the August 
13, 2021, issue of the Federal Register are hereby approved and 
adopted.

Marketing Order

    Annexed hereto and made a part hereof is the document entitled 
``Order Amending the Order Regulating the Handling of Grapes Grown in a 
Designated Area of Southeastern California.'' This document has been 
decided upon as the detailed and appropriate means of effectuating the 
foregoing findings and conclusions. It is hereby ordered that this 
entire proposed rule be published in the Federal Register.

Referendum Order

    It is hereby directed that a referendum be conducted in accordance 
with the procedure for the conduct of referenda (7 CFR 900.400 through 
900.407) to determine whether the annexed order amending the Order 
regulating the handling of grapes grown in a designated area of 
southeastern California is approved by growers, as defined under the 
terms of the Order, who during the representative period were engaged 
in the production of grapes in the production area. The representative 
period for the conduct of such referendum is hereby determined to be 
January 1, 2021, through December 31, 2021.
    The agents designated by the Secretary to conduct the referendum 
are Jeffery Rymer and Gary D. Olsen, Western Region Branch, Market 
Development Division, Specialty Crops Program, AMS, USDA; Telephone: 
(559) 487-5901, Fax: (559) 487-5906, or Email: [email protected] 
or [email protected], respectively.

Order Amending the Order Regulating the Handling of Grapes Grown in a 
Designated Area of Southeastern California 1
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    \1\ This order shall not become effective unless and until the 
requirements of Sec.  900.14 of the rules of practice and procedure 
governing proceedings to formulate marketing agreements and 
marketing orders have been met.
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Findings and Determinations

    The findings hereinafter set forth are supplementary to the 
findings and determinations which were previously made in connection 
with the issuance of Marketing Order 925; and all said previous 
findings and determinations are hereby ratified and affirmed, except 
insofar as such findings and determinations may be in conflict with the 
findings and determinations set forth herein.
    1. Marketing Order 925 as hereby proposed to be amended and all the 
terms and conditions thereof, would tend to effectuate the declared 
policy of the Act;
    2. Marketing Order 925 as hereby proposed to be amended regulates 
the handling of grapes grown in a designated area of southeastern 
California and is applicable only to persons in the respective classes 
of commercial and industrial activity specified in the Order;
    3. Marketing Order 925 as hereby proposed to be amended is limited 
in

[[Page 3702]]

application to the smallest regional production area which is 
practicable, consistent with carrying out the declared policy of the 
Act, and the issuance of several marketing orders applicable to 
subdivisions of the production area would not effectively carry out the 
declared policy of the Act;
    4. Marketing Order 925 as hereby proposed to be amended prescribes, 
insofar as practicable, such different terms applicable to different 
parts of the production area as are necessary to give due recognition 
to the differences in the production and marketing of grapes produced 
or packed in the production area; and
    5. All handling of grapes produced or packed in the production area 
as defined in Marketing Order 925 is in the current of interstate or 
foreign commerce or directly burdens, obstructs, or affects such 
commerce.

Order Relative to Handling

    It is therefore ordered, that on and after the effective date 
hereof, all handling of grapes grown in a designated area of 
southeastern California shall be in conformity to, and in compliance 
with, the terms and conditions of the said Order as hereby proposed to 
be amended as follows:
    The provisions of the proposed marketing order amending the Order 
contained in the proposed rule issued by the Administrator and 
published in the Federal Register (86 FR 44644) on August 13, 2021, 
will be and are the terms and provisions of this order amending the 
Order and are set forth in full herein.

List of Subjects in 7 CFR Part 925

    Grapes, Marketing agreements, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, the Agricultural 
Marketing Service proposes to amend 7 CFR part 925 as follows:

PART 925--GRAPES GROWN IN A DESIGNATED AREA OF SOUTHEASTERN 
CALIFORNIA

0
1. The authority citation for 7 CFR part 925 continues to read as 
follows:

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

0
2. In Sec.  925.20, revise paragraph (a) to read as follows:


Sec.  925.20  Establishment and membership.

    (a) There is hereby established a California Desert Grape Committee 
consisting of 10 members, each of whom shall have an alternate who 
shall have the same qualifications as the member. Four of the members 
and their alternates shall be producers, or officers or employees of 
producers (producer members). Four of the members and their alternates 
shall be handlers, or officers or employees of handlers (handler 
members). One member and alternate shall be either a producer or 
handler, or an officer or employee thereof. One member and alternate 
shall represent the public.
* * * * *
0
3. In Sec.  925.30, revise paragraph (a) to read as follows:


Sec.  925.30   Procedure.

    (a) Six members of the committee shall constitute a quorum, 
including at a minimum one producer member and one handler member, and 
any action of the committee shall require at least six concurring 
votes.
* * * * *

Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2022-01306 Filed 1-24-22; 8:45 am]
BILLING CODE P