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[Federal Register Volume 78, Number 205 (Wednesday, October 23, 2013)]
[Rules and Regulations]
[Pages 62963-62966]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-24900]

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 922

[Doc. No. AMS-FV-13-0040; FV13-922-1 IR]

Apricots Grown in Designated Counties in Washington; Suspension 
of Handling Regulations

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim rule with request for comments.

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SUMMARY: This rule suspends the minimum grade, size, quality, maturity, 
and inspection requirements prescribed under the Washington apricot 
marketing order (order) for the remainder of the 2013-2014 fiscal 
period and subsequent fiscal periods. The order regulates the handling 
of apricots grown in designated counties in Washington and is 
administered locally by the Washington Apricot Marketing Committee 
(Committee). This rule follows a suspension of the handling regulations 
that was enacted in the 2012-2013 fiscal period, and is expected to 
reduce overall industry expenses and increase net returns to growers 
and handlers.

DATES: Effective October 24, 2013. Comments received by December 23,

[[Page 62964]]

2013 will be considered prior to the issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent to the Docket Clerk, 
Marketing Order and Agreement Division, Fruit and Vegetable Program, 
AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 
20250-0237; Fax: (202) 720-8938; or internet: http://www.regulations.gov. All comments should reference the document number 
and the date and page number of this issue of the Federal Register and 
will be made available for public inspection in the Office of the 
Docket Clerk during regular business hours, or can be viewed at: http://www.regulations.gov. All comments submitted in response to this rule 
will be included in the record and will be made available to the 
public. Please be advised that the identity of the individuals or 
entities submitting comments will be made public on the internet at the 
address provided above.

FOR FURTHER INFORMATION CONTACT: Manuel Michel, Marketing Specialist, 
or Gary Olson, Regional Director, Northwest Marketing Field Office, 
Marketing Order and Agreement Division, Fruit and Vegetable Program, 
AMS, USDA; Telephone: (503) 326-2724, Fax: (503) 326-7440, or Email: 
Manuel.Michel@ams.usda.gov or GaryD.Olson@ams.usda.gov.
    Small businesses may request information on complying with this 
regulation by contacting Jeffrey Smutny, Marketing Order and Agreement 
Division, Fruit and Vegetable Program, AMS, USDA, 1400 Independence 
Avenue SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-
2491, Fax: (202) 720-8938, or Email: Jeffrey.Smutny@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement No. 132 and Order No. 922, both as amended (7 CFR Part 922), 
regulating the handling of apricots grown in designated counties in 
Washington, hereinafter referred to as the ``order.'' The order is 
effective under the Agricultural Marketing Agreement Act of 1937, as 
amended, (7 U.S.C. 601-674), hereinafter referred to as the ``Act.'' 
The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Orders 12866 and 13563.
    This rule 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 then 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 
entry of the ruling.
    This rule suspends the handling regulations prescribed under the 
order for the remainder of the 2013-2014 fiscal period and subsequent 
fiscal periods. Specifically, this rule suspends the minimum grade, 
size, quality, maturity, and inspection requirements under the order. 
This rule follows a suspension of the handling regulations enacted in 
the 2012-2013 fiscal period. Notwithstanding the suspension of the 
order's handling regulations, apricots handled in Washington must still 
meet Washington State's minimum grade requirement of Washington No. 2.
    In addition, as a direct result of the suspension of the order's 
handling regulations, information from the Federal-State Inspection 
Service will no longer be available for the Committee to use to compile 
industry statistics and assess handlers. However, through a 
collaborative agreement, the Washington State Department of Agriculture 
is expected to provide the Committee access to apricot handling data 
similar to the information that has been previously collected and 
provided by the Inspection Service.
    Section 922.52 of the order authorizes the issuance of regulations 
for grade, size, quality, maturity, and pack for apricots grown in the 
production area. The minimum grade, size, quality, maturity, and 
inspection requirements for apricots regulated under the order are 
specified in Sec.  922.321.
    Section 922.53 authorizes the modification, suspension, or 
termination of regulations issued under Sec.  922.52 when such changes 
tend to effectuate the declared policy of the Act. Further, on the same 
basis and in a like manner, whenever the Secretary finds that a 
regulation previously established obstructs or does not tend to 
effectuate the declared policy of the Act, such regulation shall be 
suspended or terminated.
    Section 922.55 provides that whenever the handling of any variety 
of apricots is regulated pursuant to Sec.  922.52 or Sec.  922.53, such 
apricots must be inspected by the Inspection Service and certified as 
meeting the applicable requirements. The cost of inspection and 
certification is borne by handlers. Section 922.111 provides for the 
waiver of the inspection requirement upon certain conditions for 
certain handlers when inspection by the Inspection Service is not 
readily available.
    The Committee meets regularly to review and consider 
recommendations for the regulatory requirements of Washington apricots. 
Committee meetings are open to the public and interested persons may 
express their views at these meetings. The USDA reviews Committee 
recommendations, information submitted by the Committee, and other 
available information and determines whether modification, suspension, 
or termination of the regulatory requirements would tend to effectuate 
the declared policy of the Act.
    At its May 13, 2013, meeting, the Committee unanimously recommended 
suspending the order's handling regulations for the 2013-2014 and 
subsequent fiscal periods. The Committee requested that this rule be 
effective immediately for the remainder of the 2013-2014 fiscal period.
    The objective of the handling regulation has been to ensure that 
only acceptable quality apricots enter fresh market channels to foster 
consumer satisfaction, increase sales, and improve returns to growers.
    The Washington apricot industry recognizes that quality is an 
important factor that helps to maintain sales. Some Committee members 
expressed concern that suspension of the handling and inspection 
requirements could potentially result in lower quality apricots being 
shipped to fresh markets, affecting consumer demand. There is also 
concern that if overall quality declines, the Washington apricot 
industry could lose sales to other apricot producing regions. However, 
due to the evolving nature of fresh fruit marketing, many wholesale and 
retail apricot buyers have developed their own specific criteria that 
their suppliers are required to meet to ensure a high quality product. 
Therefore, the Committee believes that the cost of complying with the 
order's handling regulations, when such regulations are in effect, may 
exceed the benefits.
    Furthermore, the Committee suspended the order's handling 
regulations, effective January 9, 2013, during the 2012-2013 fiscal 
period, and

[[Page 62965]]

did not receive complaints related to the quality of Washington 
apricots. Therefore, the Committee believes that the marketing order's 
minimum handling requirements can be suspended without negatively 
affecting the Washington apricot industry.
    After carefully evaluating all available information, the Committee 
recommended suspending the handling regulations prescribed under the 
order for the 2013-2014 and subsequent fiscal periods. However, if 
marketing conditions change, the Committee may take the appropriate 
action to reinstate the handling regulations or recommend termination 
of the order.
    This rule enables Washington apricot handlers to ship apricots 
without regard to the order's minimum grade, size, quality, maturity, 
and inspection requirements for the remainder of the 2013-2014 and 
subsequent fiscal periods. This action will also allow handlers to 
decrease their total costs by eliminating the expenses associated with 
mandatory inspections. However, this rule does not impede handlers from 
seeking product inspection on a voluntary basis, if they find 
inspection desirable. At the end of each season, the Committee will 
evaluate the impact of the suspension of the handling regulations on 
marketing conditions and grower returns. Should modification become 
necessary, the Committee would recommend a change to USDA.
    As a result of the suspension of the handling regulations, the 
Inspection Service will no longer generate and forward inspection 
certificates to the Committee. Prior to the temporary suspension of the 
handling regulation during the 2012-2013 season, the Committee used 
these certificates as the basis for collecting handler assessments and 
compiling apricot industry statistics. In the absence of such 
inspection certificates for upcoming seasons, the Committee intends to 
enter into a memorandum of understanding with the Washington State 
Department of Agriculture in order to obtain the information necessary 
to collect assessments and generate statistical information. 
Authorization to assess handlers enables the Committee to incur 
expenses that are reasonable and necessary to administer the program.
    Consistent with the suspension of Sec.  922.321, this rule also 
suspends Sec.  922.111 of the rules and regulations in effect under the 
order. Section 922.111 contains provisions for handlers to apply for a 
waiver from mandatory inspection when such inspection is not readily 
available from the Inspection Service. With the suspension of the 
handling regulations, such waivers are no longer necessary.

Initial Regulatory Flexibility Analysis

    Pursuant to 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 action on small entities. 
Accordingly, AMS has prepared this initial regulatory flexibility 
analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
businesses subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and 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 94 growers of Washington apricots in the 
production area and approximately 20 handlers subject to regulation 
under the marketing order. Small agricultural producers are defined by 
the Small Business Administration (SBA) as those having annual receipts 
of less than $750,000, and small agricultural service firms as those 
having annual receipts of less than $7,000,000. (13 CFR 121.201)
    The National Agricultural Statistics Service (NASS) reports that 
the 2012 total production and utilization (including both fresh and 
processed markets) of Washington apricots was approximately 6,700 tons, 
the average price was $1,250 per ton, and the total farm-gate value was 
approximately $8,371,000. Based on these reports and the number of 
apricot growers within the production area, it is estimated that the 
2012 average revenue from the sale of apricots was approximately 
$89,000. In addition, based on information from the USDA's Market News 
Service, 2012 f.o.b. prices for WA No.1 apricots ranged from $16.00 to 
$24.00 per 24-pound loose-pack container, and from $18.00 to $27.00 for 
2-layer tray-pack containers. Using average price and shipment 
information provided by the Committee, it is determined that each of 
the Washington apricot handlers currently ship less than $7,000,000 
worth of apricots on an annual basis. In view of the foregoing, it is 
concluded that the majority of growers and handlers of Washington 
apricots may be classified as small entities.
    At its May 13, 2013, meeting, the Committee unanimously recommended 
suspending the handling regulations for the 2013-2014 and subsequent 
fiscal periods. This rule suspends the requirements specified in Sec.  
922.111 and Sec.  922.321 of the order. The suspension of these 
regulations will allow the Washington apricot industry to market 
apricots without regard to minimum grade, size, quality, maturity, and 
inspection requirements prescribed under the Federal marketing order. 
Authority for this action is provided in Sec.  922.53.
    In prior years, the handling regulation has helped ensure that only 
acceptable, quality apricots enter fresh market channels, thereby 
fostering consumer satisfaction, increasing sales, and improving 
returns to growers. While the industry continues to believe that 
quality is an important factor in maintaining sales, the Committee 
believes the cost of inspection and certification may exceed the 
benefits. The Committee also believes that the demands of wholesale 
buyers and consumers will continue to drive growers and handlers to 
maintain a high level of product quality, without the necessity of 
imposing minimum quality standards and mandatory inspections. At the 
end of each fiscal period, the Committee will evaluate the results of 
the regulatory suspension and determine if changes are necessary.
    The apricot industry has seen considerable fluctuations in the 
price of apricots in recent years. As a result, at times some growers 
and handlers have faced difficulty covering their total production 
costs. In response to the adverse economic conditions experienced by 
the industry, the Committee discussed the possibility of reducing 
handling expenses by the eliminating mandatory inspections. The 
Committee considered the potential consequences of suspending the 
handling and inspection regulations, and how this may result in lower 
quality apricots being shipped to fresh markets. Also, if fruit quality 
were to decline, some Committee members were concerned that the 
Washington apricot industry could lose sales to other apricot producing 
regions.
    The Committee believes that current market conditions make the 
inspection program unnecessary and that the costs associated with 
regulation are greater than the benefits. Therefore, the Committee 
recommended the suspension of the handling regulations for the 
remainder of the 2013-2014 and subsequent fiscal periods. The Committee 
will evaluate the effects of the suspension at the end of each season 
and consider appropriate actions for the ensuing fiscal periods.
    This rule enables handlers to ship apricots without regard to the 
order's minimum grade, size, quality, maturity, and inspection 
requirements for the

[[Page 62966]]

remainder of the 2013-2014 year and subsequent fiscal periods. This 
action will also eliminate the costs associated with mandatory 
inspections. However, this rule does not prohibit handlers from seeking 
inspection on a voluntary basis if they find inspection desirable.
    The suspension of the handling regulations will result in the 
elimination of mandatory inspections and, in turn, the inspection 
certificates generated by the Inspection Service. The Committee has 
used these certificates in prior years for assessment billing purposes 
and for compiling industry statistics. To replicate the information 
that was previously provided by the inspection certificates, the 
Committee intends to enter into a memorandum of understanding with the 
Washington State Department of Agriculture in order to obtain 
information on which to collect assessments and generate statistical 
information.
    The Committee anticipates that this interim rule will not 
negatively impact small handlers or growers. The action is a relaxation 
of the regulations, suspending the minimum grade, size, quality, 
maturity, and inspection requirements prescribed under the order. The 
total cost of inspection and certification for fresh shipments of 
Washington apricots during the 2011 fiscal period was estimated by the 
Committee to have been $0.23 per hundredweight, or approximately 
$12,700 total. This represents approximately $635 per handler. Since 
handlers may choose to have their apricots voluntarily inspected, the 
Committee expects that some handlers will continue to have at least a 
portion of their fresh apricots inspected and certified by the 
Inspection Service.
    The Committee considered other alternatives to the indefinite 
suspension of the handling regulations, which included maintaining the 
status quo, suspending regulations on an annual basis, and terminating 
the marketing order in its entirety. The Committee believes that the 
continuation of mandatory regulation would be an unnecessary burden on 
the Washington apricot industry, given the evolving marketing 
conditions and future industry outlook. Thus, continuing to regulate as 
currently prescribed by the order was not a viable option for the 
Committee. The Committee also discussed suspending the handling 
regulations on an annual basis, but rejected this alternative at this 
time. Finally, the Committee considered terminating the order in its 
entirety, but eliminated this option as well, after determining that 
such a drastic action was unwarranted at this time. The Committee will 
evaluate the impacts of the suspension at the end of each season and 
consider appropriate actions for ensuing fiscal periods.
    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 the Office of Management and Budget (OMB) and 
assigned OMB No. 0581-0189. No changes in those requirements as a 
result of this action are necessary. Should any changes become 
necessary, they would be submitted to OMB for approval.
    This rule will not impose any additional reporting or recordkeeping 
requirements on either small or large apricot 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.
    In addition, USDA has not identified any relevant Federal rules 
that duplicate, overlap or conflict with this rule.
    Further, the Committee's meeting was widely publicized throughout 
the Washington apricot industry and all interested persons were invited 
to attend the meeting and participate in the Committee's deliberations. 
Like all Committee meetings, the May 13, 2013, meeting was a public 
meeting. All entities, both large and small, were able to express their 
views on this issue. Finally, interested persons are invited to submit 
comments on this interim rule, including the regulatory and 
informational impacts of this action on small businesses.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: 
www.ams.usda.gov/MarketingOrdersSmallBusinessGuide. Any questions about 
the compliance guide should be sent to Jeffrey Smutny at the previously 
mentioned address in the FOR FURTHER INFORMATION CONTACT section.
    This rule invites comments on the suspension of the handling 
regulations prescribed under the Washington apricot marketing order. 
Any comments timely received will be considered prior to finalization 
of this rule.
    After consideration of all relevant material presented, including 
the Committee's recommendation and other information, it is found that 
the regulatory requirements no longer tend to effectuate the declared 
policy of the Act and are therefore being suspended indefinitely.
    Pursuant to 5 U.S.C. 553, it is also found and determined upon good 
cause that it is impracticable, unnecessary, and contrary to the public 
interest to give preliminary notice prior to putting this rule into 
effect, and that good cause exists for not postponing the effective 
date of this rule until 30 days after publication in the Federal 
Register because: (1) This interim rule is a relaxation of the apricot 
handling regulations and should be made effective as soon as possible 
for the 2013-2014 fiscal period, which began April 1, 2013; (2) 
handlers are already shipping apricots and should know as soon as 
possible that they are able to market their apricots without regard to 
the order's handling regulations; (3) this issue has been widely 
discussed at various industry and association meetings, and the 
Committee has kept the industry well informed; (4) handlers are aware 
of this rule, which was recommended at a public meeting; and (5) this 
rule provides a 60-day comment period, and any comments received will 
be considered prior to finalization of this rule.

List of Subjects in 7 CFR Part 922

    Apricots, Marketing agreements, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR Part 922 is 
amended as follows:

PART 922--APRICOTS GROWN IN DESIGNATED COUNTIES IN WASHINGTON

0
1. The authority citation for 7 CFR Part 922 continues to read as 
follows:

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

Sec. Sec.  922.111 and 922.321  [Suspended]

0
2. In Part 922, Sec. Sec.  922.111 and 922.321 are suspended 
indefinitely in their entirety, beginning on October 24, 2013.

    Dated: October 17, 2013.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2013-24900 Filed 10-22-13; 8:45 am]
BILLING CODE 3410-02-P
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