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.

Proposed Rules Federal Register

39230 

Vol. 74, No. 150 

Thursday, August 6, 2009 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 983 

[Doc. No. AO–FV–08–0147; AMS–FV–08– 

0051; FV08–983–1] 

Pistachios Grown in California; 

Secretary’s Decision and Referendum 

Order on Proposed Amendment of 

Marketing Order No. 983 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Proposed rule and referendum 

order. 

SUMMARY: This decision proposes 

amendments to Marketing Agreement 

and Order No. 983 (order), which 

regulates the handling of pistachios 

grown in California, and provides 

growers with the opportunity to vote in 

a referendum to determine if they favor 

the changes. The amendments are based 

on proposals by the Administrative 

Committee for Pistachios (Committee), 

which is responsible for local 

administration of the order. These 

amendments would: Expand the 

production area covered under the order 

to include Arizona and New Mexico in 

addition to California; authorize the 

Committee to reimburse handlers for a 

portion of their inspection and 

certification costs in certain situations; 

authorize the Committee to recommend 

research projects; modify existing order 

authorities concerning aflatoxin and 

quality regulations; modify the authority 

for interhandler transfers of order 

obligations; redesignate several sections 

of the order; remove previously 

suspended order provisions, and make 

other related changes. The amendments 

are intended to improve the operation 

and functioning of the marketing order 

program. 

DATES: The referendum will be 

conducted from August 10 through 

August 22, 2009. The representative 

period for the purpose of the 

referendum is September 1, 2008, 

through July 31, 2009. 

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@ams.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– 

1509, Fax: (202) 720–8938, or e-mail: 

Laurel.May@ams.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, e-mail: 

Jay.Guerber@ams.usda.gov. 

SUPPLEMENTARY INFORMATION: Prior 

documents in this proceeding: Notice of 

Hearing issued on July 15, 2008, and 

published in the July 18, 2008, issue of 

the Federal Register (73 FR 41298), and 

a Recommended Decision issued on 

April 29 and published in the May 5, 

2009, issue of the Federal Register (74 

FR 20630). 

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 

The proposed amendments are based 

on the record of a public hearing held 

on July 29 and 30, 2008, in Fresno, 

California, to consider such 

amendments to 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 orders (7 CFR Part 900). 

The Notice of Hearing was published 

in the Federal Register on July 18, 2008 

(73 FR 41298), and contained 

amendment proposals submitted by the 

Committee. 

The amendments included in this 

decision would add new sections to the 

order which would result in numerical 

redesignation of several sections of the 

order. The redesignated sections would 

allow the related provisions to be 

grouped together in the order. The 

amendments included in this decision 

would: 

1. Expand the production area to 

include the States of Arizona and New 

Mexico. The production area covered 

under the order is currently limited to 

the State of California. This proposal 

would revise existing § 983.26, 

Production area, and redesignate it as 

§ 983.25. It would also result in 

corresponding changes being made to 

existing § 983.11, Districts; § 983.21, 

Part and subpart; and existing § 983.32, 

Establishment and membership. 

Existing sections 983.21 and 983.32 

would also be redesignated as § 983.20 

and § 983.41, respectively. 

2. Authorize the Committee to 

reimburse handlers for travel and 

shipping costs related to aflatoxin 

inspection, under certain circumstances. 

This proposal would amend existing 

§ 983.44, Inspection, certification and 

identification, and redesignate it as 

§ 983.56. 

3. Add a new § 983.46, Research, that 

would authorize the Committee to 

engage in research projects with the 

approval of USDA. This proposed 

amendment would also require 

corresponding changes to existing 

§ 983.34, Procedure, to establish voting 

requirements for Committee 

recommendations concerning research. 

It would also require corresponding 

changes to existing § 983.46, 

Modification or suspension of 

regulations, and § 983.54, Contributions. 

The existing § 983.34, § 983.46, and 

§ 983.54 would also be redesignated as 

§ 983.43, § 983.59, and § 983.72, 

respectively. 

4. Provide broad authority for 

aflatoxin regulations by revising existing 

§ 983.38, Aflatoxin levels, and 

redesignating it as § 983.50. This 

proposal would also require 

corresponding changes to existing 

§ 983.40, and redesignating that section 

as § 983.52. It would also require 

corresponding changes to § 983.1, 

Accredited laboratory. 

5. Provide broad authority for quality 

regulations by revising existing § 983.39, 

Minimum quality levels, and 


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redesignating it as § 983.51. It would 

also remove provisions from that section 

concerning specific quality regulations 

that are currently suspended. This 

amendment would also require 

corresponding changes by removing 

currently suspended language in 

§ 983.6, Assessed weight; revising 

§ 983.7, Certified pistachios; removing 

existing § 983.19, Minimum quality 

requirements and § 983.20, Minimum 

quality certificate; revising existing 

§ 983.31, Shelled pistachios; revising 

existing § 983.41, Testing of minimal 

quantities, and removing currently 

suspended language in that section; 

revising existing § 983.42, Commingling; 

and revising existing § 983.45, 

Substandard pistachios. Sections 

983.31, 983.41, 983.42, and 983.45 

would be redesignated as sections 

983.30, 983.53, 983.54, and 983.57, 

respectively. 

6. Add a new § 983.58, Interhandler 

Transfers. This proposal would modify 

existing authority under the order by 

expanding the range of marketing order 

obligations that may be transferred 

between handlers when pistachios are 

transferred between handlers. This 

proposal would require a corresponding 

change to existing § 983.53, 

Assessments, and would redesignate 

§ 983.53 as § 983.71. 

7. As a result of the proposed 

amendments and corresponding 

changes to the order summarized above, 

numerous administrative changes to the 

order would also be required. Such 

changes include numerical 

redesignations to several sections of the 

order, changes to cross references of 

section numbers in regulatory text as a 

result of the numerical redesignations, 

and removal of obsolete provisions. The 

title of order would be revised to 

include the States of Arizona and New 

Mexico. In addition, a change would be 

made to amend existing § 983.70 and 

redesignate it as § 983.92. 

In addition to the proposed 

amendments to the order, AMS 

proposed to make any such additional 

changes as may be necessary to the 

order to conform to any amendment that 

may be adopted. To the extent 

necessary, conforming changes have 

been made to the amendments. These 

conforming changes have been 

identified in the above list of proposed 

amendments. 

Upon the basis of evidence 

introduced at the hearing and the record 

thereof, the Administrator of AMS on 

April 29, 2009, issued a Recommended 

Decision published in the Federal 

Register on May 5, 2009 (74 FR 20630). 

An opportunity to file written 

exceptions was provided through June 

4, 2009. None were received. 

Small Business Considerations 

Pursuant to the requirements set forth 

in the Regulatory Flexibility Act (5 

U.S.C. 601–612) (RFA), 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 

receipts of less than $7,000,000. Small 

agricultural producers have been 

defined as those with annual receipts of 

less than $750,000. 

There are approximately 24 handlers 

and approximately 800 producers of 

pistachios in the State of California. It 

is estimated that approximately 50 

percent of the processing handlers had 

annual receipts of less than $7,000,000, 

according to information presented at 

the hearing. In addition, based on the 

number of producers, the size of the 

2007 crop, and the average producer 

price per pound data reported by the 

National Agricultural Statistics Service 

(NASS), the average producer revenue 

for the 2007 crop was $702,000. It is 

estimated that 85% of the producers in 

California produced less than $750,000 

worth of pistachios and would thus be 

considered small businesses according 

to the SBA definition. 

Based on information presented at the 

hearing, it is estimated that there are 

approximately 40 to 50 growers of 

pistachios in Arizona and 

approximately 30 growers in New 

Mexico. It is also estimated that there 

are 2 handlers in Arizona and 3 

handlers in New Mexico. Although no 

official data is available, based on 

hearing testimony it is estimated that 

the majority of producers in Arizona 

and New Mexico are small businesses 

according to SBA’s definition. It is also 

estimated that all of the handlers in 

New Mexico are small businesses and 

one of the handlers in Arizona is a small 

business. 

California accounts for the vast 

majority of pistachio acreage and 

production in the U.S. According to 

data from the National Agricultural 

Statistics Service (NASS), California’s 

total acreage in 2007 was reported at 

176,400 acres. While no 2007 acreage 

data is available from NASS for Arizona 

and New Mexico, in 2006, Arizona 

acreage was reported at 2,500 acres 

while New Mexico acreage was reported 

at 1,350 acres in 2002. Two witnesses 

from New Mexico testified that they 

estimate acreage in New Mexico to be 

about 450 acres in 2007. Pistachios are 

also grown in small quantities in Texas, 

Utah, and Nevada. However, witnesses 

testified that pistachios produced in 

those States are considered to be the 

result of hobby farming and are not 

commercially significant in volume. 

California, Arizona, and New Mexico 

account for over 99.99 percent of 

domestic pistachio production and 

essentially all of the production used for 

commercial purposes, according to the 

record. 

The order regulating the handling of 

pistachios grown in the State of 

California was established in 2004. The 

primary feature of the order is a quality 

provision that requires pistachios to be 

sampled and tested for aflatoxin prior to 

shipment to domestic markets. Such 

shipments of pistachios may not exceed 

a tolerance level for aflatoxin. 

Information collection and 

dissemination is also conducted under 

the order. The program is funded 

through assessments on handlers 

according to the quantity of pistachios 

handled. The order is administered by 

an industry committee of handlers and 

growers, and is designed to support both 

large and small pistachio handlers and 

growers. Committee meetings where 

regulatory recommendations and other 

decisions are made are open to the 

public. All members are able to 

participate in Committee deliberations, 

and each Committee member has an 

equal vote. Others in attendance at 

meetings are also allowed to express 

their views. 

The Committee met on March 6, 2008, 

and requested that USDA conduct a 

public hearing to consider proposed 

amendments to the order. USDA 

reviewed the request and determined to 

proceed to a hearing. A hearing was 

conducted on July 29 and 30, 2008, in 

Fresno, California. The Committee’s 

meeting and the hearing were both open 

to the public and all that attended were 

able to participate and express their 

views. 

The proposed amendments 

recommended by the Committee would: 

Expand the production area to include 

the States of Arizona and New Mexico; 

authorize the Committee to reimburse 

handlers for certain inspection costs; 


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39232 Federal Register / Vol. 74, No. 150 / Thursday, August 6, 2009 / Proposed Rules 

authorize research activities under the 

order; provide broad authority for 

aflatoxin regulation under the order, 

provide broad authority for quality 

regulation under the order; provide 

authority for interhandler transfer of 

marketing order obligations; and make 

corresponding administrative changes to 

the order as a result of the 

aforementioned proposed changes. 

The proposed amendments are 

intended to improve the operation and 

functioning of the marketing order 

program. Record evidence indicates that 

the proposals are intended to benefit all 

producers and handlers under the order, 

regardless of size. All grower and 

handler witnesses at the hearing 

supported the proposed amendments 

and while acknowledging the additional 

cost implications, they stated that they 

expected the benefits to outweigh the 

costs. 

A description of the proposed 

amendments and their anticipated 

economic impact on small and large 

entities is discussed below. 

Evaluation of the Potential Economic 

Impacts of the Proposed Amendments 

The key economic issues to examine 

in considering the proposed 

amendments to the marketing order are 

the benefits and costs to growers and 

handlers of the proposed expansion of 

the production area and the 

consequences of that expansion. The 

most significant change in terms of its 

potentially significant and immediate 

impact is the fact that if the production 

area is expanded to include Arizona and 

New Mexico, the pistachio handlers in 

those two States would become 

regulated under the order and would 

have to meet the same aflatoxin 

certification requirements that apply to 

California handlers. 

Aflatoxin Requirements 

California handlers currently must 

have all pistachio lots destined for the 

domestic market tested and certified 

that they do not exceed a maximum 

aflatoxin tolerance. To comply with the 

standard, California handlers arrange for 

a sample to be taken from each lot that 

is to be shipped domestically and to 

have that sample tested for aflatoxin. 

Lots that meet the standard receive 

written certifications that allow 

shipment to the domestic market. Lots 

that exceed the aflatoxin tolerance 

cannot be shipped domestically. 

Handlers may rework the lots to remove 

contaminated nuts and then can begin 

the certification process again. There are 

costs associated with each of these 

steps, which are currently borne by 

California handlers and would be borne 

by handlers in the other two States, if 

the order is amended. 

Before considering cost-related 

details, it is important to examine the 

benefits associated with mandatory 

aflatoxin certification. Various grower 

and handler witnesses testified that they 

expected significant benefits to accrue 

from the mandatory requirements 

enforced through the marketing order, 

and increased consumer confidence in 

the quality of U.S. pistachios. Arizona 

and New Mexico handler witnesses 

indicated that they would willingly 

comply with all of the steps involved in 

meeting the aflatoxin standards. Grower 

witnesses from Arizona and New 

Mexico indicated awareness that at least 

part of the increased handler costs from 

aflatoxin certification would be passed 

onto them, but that they expected the 

net effect to be strongly positive. Grower 

witnesses from Arizona and New 

Mexico also stated they did not expect 

to have to undertake any significant 

changes in their pistachio production 

operations as a result of coming under 

the authority of the marketing order. 

Witnesses said that they believed that 

they would have overall improved 

returns and higher sales than would be 

the case without the marketing order 

regulation. They expected the benefits 

of the proposed amendments to far 

outweigh the costs. 

A 2005 benefit cost analysis of 

Federal marketing order mandatory 

aflatoxin requirements for California 

was submitted as evidence at the 

hearing. The analysis, prepared by 

agricultural economists at the 

University of California-Davis, was 

entitled ‘‘Economic Consequences of 

Mandated Grading and Food Safety 

Assurance: Ex Ante Analysis of the 

Federal Marketing Order for California 

Pistachios’’ (Richard S. Gray and others, 

University of California, Giannini 

Foundation Monograph 46, March 

2005). In present-value terms, over a 20- 

year horizon, the benefits to producers 

in the study’s baseline scenario were 

estimated to be $75.3 million. The study 

reported a ‘‘most likely scenario’’ 

benefit cost ratio of nearly 6:1, with a 

range from about 4:1 to 9:1 under 

alternative scenarios representing low 

and high aflatoxin event impacts, 

respectively, on the pistachio market. 

One witness noted that, depending on 

compliance cost and aflatoxin event 

assumptions under alternative scenarios 

in the study, the expected benefit cost 

ratio from implementation of mandatory 

aflatoxin standards under the California 

marketing order ranged between 5:1 and 

17:1. Several grower and handler 

witnesses suggested that these 

significant benefit cost ratios for the 

California marketing order would also 

likely apply if the order were expanded 

to include Arizona and New Mexico. 

The following section examines the 

cost impacts of the mandatory aflatoxin 

requirements in an expanded marketing 

order. 

Differences in Aflatoxin Inspection and 

Certification Costs 

Aflatoxin inspection and certification 

costs can be divided into the costs of: 

(1) Inspector travel time to pistachio 

handler’s premises; (2) time required for 

the inspector to draw samples from lots 

designated for domestic shipment; 

(3) cost of shipping samples to the 

testing laboratory; (4) aflatoxin analysis 

(testing cost); and (5) value of the 

destroyed pistachios used in the 

sampling and analysis. 

Tables 1–3 that follow present 

estimated costs for representative 

handlers in California, Arizona, and 

New Mexico. Each table is designed to 

summarize handler costs for the lots 

being tested, including each of the five 

cost elements listed above. For clarity of 

the cost comparisons, the lot size to be 

sampled is assumed to be 50,000 

pounds in the representative scenarios 

for all three States. The 50,000-pound 

lot size is most appropriate for 

California’s handler plants, which are 

generally larger than the handler plants 

in Arizona and New Mexico. The 

impact in terms of higher unit cost for 

smaller lot sizes is discussed below. 

Table 1 is a representation of the 

current aflatoxin certification cost 

situation in California, which is the 

production area of the current Federal 

marketing order for pistachios. It serves 

as a benchmark with which to compare 

the costs in the other two States, 

Arizona and New Mexico, which would 

be included under the proposed 

expanded production area. Witnesses 

from the pistachio industry in each of 

the three States submitted as evidence 

the data used in the three tables, and 

stated that the data was representative 

of the situation that exists or would be 

faced by handlers in those States. 

Witnesses pointed out that inspector 

travel costs and sample shipment costs 

were the most variable costs across the 

States. Inspector travel costs consist of 

the mileage reimbursement that 

inspectors need to be paid by the 

handlers, plus the time spent traveling 

to the handler’s location. In California, 

inspectors are regularly in the plants, 

and there is no additional travel time 

associated with aflatoxin sampling. 

Witnesses testified that New Mexico 

inspector travel costs could be as high 

as $485 per lot due to the large distances 

involved, but that the figure of $432.50 


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was the most representative. Data 

presented at the hearing indicated that 

Arizona inspector travel cost could be as 

high as $100 per lot, but that a lower 

figure of $32.70 was more likely due to 

the closer proximity of Arizona Plant 

Services inspectors, who may be 

certified to take the sample. 

TABLE 1—CALIFORNIA PISTACHIOS: COST SCENARIO FOR SAMPLING AND AFLATOXIN TESTING FOR REPRESENTATIVE

HANDLER

50,000-pound lots 

Description of cost elements Dollars 

per lot 

Dollars 

per 

pound 

Inspector Travel Time to Plant .............................................. ................ ................ No inspector travel time; inspector regularly in plant. 

Inspector Sampling Time ...................................................... $70.00 $0.0014 [Cost of sampler time: 2 hours) @ $35/hour = $70]; [2 

hours to draw 100 samples for one lot 2]. 

Value of Pistachio Sample .................................................... $44.00 $0.0009 [10 kg (22-lb.) weight of sample from 100 sub-samples]; 

[22 lbs. @ $2.00 per pound = $44]. 

Shipping Cost to Laboratory 1 ............................................... ................ ................ Onsite labs in plants; no shipping cost. 

Aflatoxin Testing Cost 2 ......................................................... $90.00 $0.0018 $90 lab fee to determine aflatoxin level of sample. 

Total Cost ....................................................................... $204.00 $0.0041 

Pct. of price received by handler .......................................... ................ 0.2% Industry estimate of CA handler sale price per pound = 

$2.00. 

Pct. of price received by grower ........................................... ................ 0.3% NASS estimate of 2007 CA grower price per pound = 

$1.35. 

1 DFA laboratory in Fresno, CA. 

2Aflatoxin analysis done in onsite laboratory; imputed cost of $90 is based on cost in outside laboratory. Source: Testimony at pistachio Federal marketing order hearing, July 29–30, 2008, in Fresno, CA. 

TABLE 2—ARIZONA PISTACHIOS: COST SCENARIO FOR SAMPLING AND AFLATOXIN TESTING FOR REPRESENTATIVE

HANDLER

50,000-pound lots 

Description of cost elements Dollars 

per lot 

Dollars 

per 

pound 

Inspector Travel Time to Plant .............................................. $32.70 $0.0007 [24 miles 1 @ $0.40 per mile = $9.60]; [Cost of sampler 

time: 40 min. (0.66 hours) @ $35/hour = $23.10]. 

Inspector Sampling Time ...................................................... $70.00 $0.0014 [Cost of sampler time: 2 hours @ $35/hour = $70]; [2 

hours to draw 100 samples for one lot 2]. 

Value of Pistachio Sample .................................................... $60.50 $0.0012 [10 kg (22-lb.) weight of sample from 100 sub-samples]; 

[22 lbs. @ $2.75 per pound = $60.50]. 

Shipping Cost to Laboratory 3 ............................................... $200.00 $0.0040 Shipping cost per 10 kg sample. 

Aflatoxin Testing Cost ........................................................... $90.00 $0.0018 $90 lab fee to determine aflatoxin level of sample. 

Total Cost ....................................................................... $453.20 $0.0091 

Pct. of price received by handler .......................................... ................ 0.3% Industry estimate of AZ handler sale price per pound = 

$2.75. 

Pct. of price received by grower ........................................... ................ 0.7% USDA/NASS estimate of 2007 CA grower price per pound 

= $1.35 (AZ price not available). 

1 12 miles each way from pistachio handler plant in Bowie, AZ to the San Simon, AZ location of Arizona Plant Services inspectors (certified 

samplers). 2Three lots sampled per visit over a 6-hour period. 

3 DFA laboratory in Fresno, CA; handler witness expected to use overnight shipping, estimated at $200 per 10 kg sample. 

Source: Computed by USDA, based on evidence presented at pistachio Federal marketing order hearing, July 29–30, 2008, in Fresno, CA. 

TABLE 3—NEW MEXICO PISTACHIOS: COST SCENARIO FOR SAMPLING AND AFLATOXIN TESTING FOR REPRESENTATIVE

HANDLER

50,000-pound lots 

Description of cost elements Dollars 

per lot 

Dollars 

per 

pound 

Inspector Travel Time to Plant .............................................. $432.50 $0.0087 [600 miles 1 @ $0.40 per mile = $240]; [Cost of sampler 

time: 5.5 hours 2 @ $35/hour = $192.50]. 

Inspector Sampling Time ...................................................... $70.00 $0.0014 [Cost of sampler time: 2 hours @ $35/hour = $70]; [2 

hours to draw 100 samples for one lot]. 


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TABLE 3—NEW MEXICO PISTACHIOS: COST SCENARIO FOR SAMPLING AND AFLATOXIN TESTING FOR REPRESENTATIVE

HANDLER—Continued 

50,000-pound lots 

Description of cost elements Dollars 

per lot 

Dollars 

per 

pound 

Value of Pistachio Sample .................................................... $44.00 $0.0009 [10 kg (22-lb.) weight of sample from 100 sub-samples]; 

[22 lbs. @ $2.00 per pound = $44]. 

Shipping Cost to Laboratory 3 ............................................... $105.00 $0.0021 Shipping cost per 10 kg sample 4. 

Aflatoxin Testing Cost ........................................................... $90.00 $0.0018 $90 lab fee to determine aflatoxin level of sample. 

Total Cost ....................................................................... $741.50 $0.0148 

Pct. of price received by handler .......................................... ................ 0.7% Industry estimate of NM handler sale price per pound = 

$2.00. 

Pct. of price received by grower ........................................... ................ 1.1% USDA/NASS estimate of 2007 CA grower price per pound 

= $1.35 (NM price not available). 

1Average of round trip travel distances to Alamagordo, NM, pistachio handler plant from two NM inspector (certified sampler) locations— 

Portales (416 miles round trip) and Farmington (782 miles). 2Average of driving time estimates to two inspector locations: (4 + 7) / 2 = 5.5 hours. 

3 DFA laboratory in Fresno, CA. 

4Average of estimated range of shipping costs = ($90 + $120) / 2 = $105. 

Source: Computed by USDA, based on evidence presented at pistachio Federal marketing order hearing, July 29–30, 2008, in Fresno, CA. 

Two cost elements that are uniform 

across the three States are sampling time 

and testing cost. The estimated time that 

it takes an inspector to draw a 10 kg (22 

pound) sample for aflatoxin testing of a 

50,000 pound lot, based on 100 subsamples, is 2 hours. At a standard 

hourly rate of $35 per hour, two hours 

of sampling time will cost the handler 

$70. The testing cost for a laboratory to 

determine the aflatoxin level from a 

sample is $90. 

Witnesses indicated that the cost for 

the 22 pounds of pistachios used in the 

sample (handler sales revenue foregone) 

was $2.00 per pound ($44 total) in 

California and New Mexico and $2.75 in 

Arizona (about $61 total). 

Given all of the assumptions that 

went into developing the cost summary 

in Table 1, the estimated cost per lot for 

a California handler for aflatoxin 

certification is $204, which is less than 

one half cent per pound (about four 

tenths of a cent). This represents 0.2 

percent of the $2.00 pistachio value per 

pound at the handler level (estimate 

provided by industry witnesses) and 0.3 

percent of the 2007 grower price per 

pound for California pistachios, 

estimated by NASS at $1.35 per pound. 

A California pistachio industry witness 

pointed out that the unit price would be 

even lower with larger lot sizes and that 

the average lot size for ‘‘failed lots’’ in 

a recent year under the marketing order 

(those that exceeded the maximum 

aflatoxin tolerance) was nearly 67,000 

pounds. 

Table 2 shows that a representative 

Arizona handler would pay twice as 

much as a California handler—$453 per 

lot, or nearly one cent per pound (about 

nine tenths of a cent). The data in Table 

3 indicated that a New Mexico handler 

would pay even more for aflatoxin 

certification—$742 per 50,000 pound 

lot, or about 1.5 cents per pound. Thus 

the certification costs for the smaller 

plants in Arizona and New Mexico 

would be between two and four times 

higher, if lot sizes were the same. 

Typical lot sizes may be smaller in 

Arizona and New Mexico; witnesses 

indicated that lot sizes could vary 

between 10,000 and 50,000 pounds. An 

Arizona handler witness presented 

evidence indicating that 40,000 pounds 

would be a more likely typical lot size, 

and that the sample size and related cost 

factors would be the same. With a 

smaller lot size, the Arizona handler 

cost per pound rises from nine tenths of 

a cent (50,000 pound lot) to 1.1 cents 

(40,000 pound lot). This cost per pound 

is nearly 3 times higher than the cost for 

a California handler with a 50,000 

pound lot, but the percentage of the 

estimated handler sales price remains 

under one half of one percent (0.4%). 

A New Mexico handler witness 

characterized their own operation as 

being quite a bit smaller than the main 

Arizona handler and most California 

handlers. If the typical lot size for a 

small New Mexico handler was 10,000 

pounds, then the sample size would be 

smaller (13.2 pounds) and the inspector 

sampling time declines from two hours 

to one hour. The total cost would 

decline modestly, from $742 for a 

50,000 pound lot to $689 for a 10,000 

pound lot. However, since the costs are 

spread over fewer pounds, the unit cost 

for certification would rise to nearly 

seven cents per pound, about 3 percent 

of the handler sales price. If the small 

handler had a typical lot size of 30,000 

pounds (the midpoint between 10,000 

and 50,000 pounds) the certification 

cost would be about 2.5 cents per 

pound, just over one percent of the 

handler sale price. 

However, the New Mexico handler 

witness indicated that they would try to 

organize their pistachio handling 

operation to keep the lot sizes for 

sampling and testing large enough to 

keep costs down. The 50,000 pound lot 

example shown in Table 3 therefore 

provides a reasonable representation of 

small handler certification costs. The 

higher costs are due largely to the less 

developed aflatoxin testing 

infrastructure than is available in 

California, and related issues such as 

greater distances for inspector travel. 

Additional costs are incurred if a lot 

exceeds the maximum aflatoxin 

tolerance. Witnesses estimated that in 

all three States the cost for reworking a 

lot to remove the contaminated nuts 

would be 25 cents per pound. After 

reworking the lot a handler would incur 

another round of the sampling and 

testing costs highlighted in the tables. 

Grower witnesses stated that the 

aflatoxin certification costs as presented 

by handler and other industry 

witnesses, and illustrated by the three 

tables, appeared to be reasonable 

representations of the cost of 

compliance with the aflatoxin 

requirements under the marketing order. 

Proposed Reimbursement To Account 

for Handler Cost Differences 

The significant cost differences 

highlighted above is the reason that 


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pistachio industry witnesses from all 

three States supported a proposed 

amendment to authorize the Committee 

to reimburse handlers in more remote 

locations within the production area for 

the excess costs due to lack of access to 

inspection and certification services. 

Reimbursing handlers for the excess 

costs would eliminate any differential 

impact and would equalize the aflatoxin 

certification costs across the proposed 

expanded production area. 

Although the precise details of 

reimbursement would be established 

through the informal rulemaking 

process upon recommendation of the 

Committee if such authority were 

granted, the following example 

illustrates one way to estimate the 

amount of reimbursement that may 

occur. With a 50,000 pound lot size, 

Table 3 shows the cost per lot for a New 

Mexico handler is about $742. The New 

Mexico handler would be expected to 

pay only the portion of the costs that are 

the same across the three States ($70 for 

inspector sampling, plus $90 testing 

cost, plus $44 in revenue foregone from 

destroyed pistachios, for a total cost per 

lot of $204). The handler represented by 

Table 3 would receive a reimbursement 

per lot of $538 ($742 minus $204). 

Using different cost assumptions, a 

pistachio industry witness provided an 

example with a somewhat higher 

estimate of the likely cost ($605 per lot) 

that the Committee would reimburse 

New Mexico handlers. The witness 

estimated that with ten sampling trips 

per year, and one lot sampled per trip, 

the New Mexico reimbursements would 

total $6,050. With an anticipated total of 

100 lots tested in Arizona in the 

example presented by the witness, and 

with a reimbursement rate of $235 per 

lot, the total Arizona cost would be 

$23,500. The sum for the two States 

would be about $30,000. 

Based on similar assumptions used in 

developing the tables, the total current 

cost of marketing order aflatoxin 

certification for California handlers 

(excluding the Committee assessment) 

was estimated by an industry witness to 

be $530,000. Based on this example, a 

$30,000 reimbursement would be issued 

by the Committee to the Arizona and 

New Mexico handlers. The 

reimbursement would represent about a 

6 percent increase above the $530,000 

currently paid by the California 

handlers. The witness also stated that 

when the reimbursement system is 

implemented, all handlers of like-size 

operations would have comparable 

inspection costs. 

All California handler and grower 

witnesses expressed their support for 

such a reimbursement provision. In 

addition, all of the Arizona and New 

Mexico handler and grower witnesses 

also testified in favor of such a 

reimbursement. 

Handler and grower witnesses 

indicated that the expected benefits 

from the operation of the expanded 

marketing order would substantially 

exceed costs. 

Other Proposed Amendments 

The addition of production, post 

harvest, and nutrition research authority 

to the order would have no immediate 

cost impact on the industry. If the 

proposal is adopted, it would allow the 

Committee to recommend research 

activities to USDA. If approved, the 

projects would be funded through 

handler assessments. It is likely that 

program assessments would increase in 

order to fund any projects 

recommended, which would increase 

costs to handlers. However, the order 

limits the total assessment that can be 

implemented under the order so that the 

entire assessment cannot exceed one 

half of one percent of the average price 

received by producers in the preceding 

crop year. To the extent that funds for 

research would only represent a portion 

of the assessment funds, the cost of any 

research that may be conducted would 

necessarily be less than one half of one 

percent of the average price received by 

producers. In addition, since 

assessments are collected from handlers 

based on the volume of pistachios 

handled, any cost associated with 

research projects would be 

proportionate to the size of the handlers. 

Witnesses testified that the Committee 

would not undertake any research 

activities unless they expected the 

benefits to outweigh the costs. One 

witness testified that a presentation at a 

Symposium for Agricultural Research 

held on June 18 and 19, 2008, in 

Sacramento, California indicated that a 

benefit/cost ratio for agricultural 

research in California has been 

estimated at 30.7 to 1. 

Handler and grower witnesses made 

positive comments in support of other 

proposed order amendments, including 

the granting of broad authority for 

aflatoxin standards and for other quality 

regulations. Witnesses stated that there 

would be no immediate impact from the 

granting of these authorities, because 

there are no industry plans for changes 

in regulations. However, handler and 

grower witnesses stated that having 

such authority would be quite helpful to 

the future of the pistachio industry, and 

that if the authorities were exercised in 

the future, they expected that it would 

be done in a way that assured that 

benefits would outweigh costs. Since 

unanimity of the Committee would 

generally be required to make such 

changes, they expressed confidence that 

only regulations would be established 

that had very broad industry consensus. 

They expected additional improvements 

in product quality and improved returns 

to growers and handlers from the use of 

any such future regulations. 

One other proposed amendment, 

relating to interhandler transfers, merits 

discussion in the context of economic 

impact on handlers and growers, 

particularly small ones. When the 

marketing order was promulgated in 

2004, authority was given for 

interhandler transfers of noncertified 

pistachios. Evidence presented at the 

hearing indicates that the proposed 

amendment formalizes that authority 

and expands it to include other 

marketing order requirements, including 

the payment of assessments on hulled 

and dried pistachios, when that 

processing is done by the producer. 

Under the marketing order, the entity 

which hulls and dries pistachios is 

responsible for assessments and 

inspections. This provision was 

included because in California 

producers normally deliver pistachios to 

a handler (processor) for hulling and 

drying as well as the subsequent 

handling functions. 

However, conditions in Arizona and 

New Mexico are different due to the 

limited processing capacity of some 

handlers, the lack of processing access 

of producers, and the small size of some 

producing operations. It is necessary in 

these conditions for some producers to 

process (hull and dry) their pistachios 

prior to delivery to a handler. The 

hulling and drying is part of the harvest 

process, and it is not the intent of these 

producers to perform any other 

handling functions. The proposal would 

therefore allow the transfer of 

responsibility for assessments, 

inspections and other marketing order 

requirements to the handler who places 

the pistachios into the stream of 

commerce. 

According to evidence presented at 

the hearing, this amendment would 

allow a small number of producers who 

hull and dry their own production, but 

perform no additional handling 

functions (estimated at less than ten), to 

limit their responsibility to filing a form 

at the time of pistachio delivery. This 

proposal would more clearly delineate 

the responsibilities of handlers and the 

small number of affected producers. 

Both would continue their current 

practices in virtually all cases, and the 

proposal would neither increase nor 

decrease returns. If the proposal is not 

accepted, small grower/handlers would 


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assume an additional paperwork burden 

associated with the role of a handler, 

according to testimony. This proposal 

has the effect of assisting small business 

operations by removing them from 

paperwork and other burdens. 

Handler Assessment Costs 

Under the marketing order, handlers 

pay assessments to the Committee for 

costs associated with administering the 

program. Following is an evaluation of 

the impact these costs would have on 

handlers in Arizona and New Mexico if 

they are included under the order. 

The assessment rate authorized under 

the order is limited to one-half of one 

percent (.005) of the average grower 

price received in the preceding crop 

year. The current assessment rate under 

the order is $.0007 per pound, or .07 

cents per pound. This compares to an 

estimated average grower price for the 

2007 crop year of $1.35 per pound. The 

assessment rate for the 2007 crop year 

was .05 percent (5/100ths of one 

percent) of the grower price. 

Although there are no NASS data 

available regarding New Mexico 

pistachio production, information 

presented by witnesses at the hearing 

indicates average annual production in 

New Mexico could be in the range of 

300,000 to 350,000 pounds. At an 

assessment rate of $.0007, this would 

equate to a total annual assessment 

ranging from $210 to $245 for all New 

Mexico handlers combined. Production 

from Arizona was 7 million pounds in 

2007, according to NASS data. At the 

$.0007 per pound assessment rate, this 

would equate to a total annual 

assessment of $4,900 for all Arizona 

handlers combined. Assessments under 

the order present a cost to handlers, but 

as can be seen from the foregoing 

example, the cost is minimal. In 

addition, the costs are applied to 

handlers in proportion to the quantity of 

pistachios handled, so there is no 

differential impact anticipated for small 

and large handlers. 

Paperwork Reduction Act 

Information collection requirements 

for Part 983 are currently approved by 

the Office of Management and Budget 

(OMB) under OMB No. 0581–0215, 

‘‘Pistachios Grown in California.’’ The 

information requirements generated by 

the proposed amendments would result 

in an increase in burden, which has 

been submitted to OMB for approval 

under OMB No. 0581–NEW. Upon 

approval, we will request that this 

collection be merged into OMB No. 

0581–0215. 

The estimated burden is as follows: 

Estimate of Burden: Public reporting 

burden for this collection of information 

is estimated to average .225 hours per 

response. 

Respondents: Producers and handlers 

of pistachios grown in Arizona and New 

Mexico. 

Estimated Number of Respondents: 

85. 

Estimated Number of Responses per 

Respondent: 1.51. 

Estimated Total Annual Burden on 

Respondents: 29 hours. 

The Recommended Decision provided 

an opportunity to submit comments on 

the proposed information collection 

requirements. None were received. 

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. USDA has not 

identified any relevant Federal rules 

that duplicate, overlap or conflict with 

this proposed rule. All of these 

amendments are designed to enhance 

the administration and functioning of 

the marketing order to the benefit of the 

industry. 

While the implementation of these 

requirements may impose some 

additional costs on handlers, the costs 

are minimal and uniform on all 

handlers. Some of these costs may be 

passed on to growers. However, these 

costs would be offset by the benefits 

derived by the operation of the 

marketing order. In addition, the 

meetings regarding these proposals as 

well as the hearing date were widely 

publicized throughout the existing and 

proposed addition to the pistachio 

production area and all interested 

persons were invited to attend the 

meetings and the hearing and 

participate in Committee deliberations 

on all issues. All Committee meetings 

and the hearing were public forums and 

all entities, both large and small, were 

able to express views on these issues. 

The Committee itself is composed of 

members representing handlers and 

producers. Finally, interested persons 

are invited to submit information on the 

regulatory and informational impacts of 

this action on small businesses. 

AMS is committed to complying with 

the Government Paperwork Elimination 

Act (GPEA), 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 

Agreement and Order 983 proposed 

herein have been reviewed under 

Executive Order 12988, Civil Justice 

Reform. They are not intended to have 

retroactive effect. If adopted, the 

proposed amendments would not 

preempt any State or local laws, 

regulations, or policies, unless they 

present an irreconcilable conflict with 

this proposal. 

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. 

Findings and Conclusions 

The findings and conclusions, rulings, 

and general findings and determinations 

included in the Recommended Decision 

set forth in the May 5, 2009, (74 FR 

20630) issue of the Federal Register are 

hereby approved and adopted. 

Marketing Agreement and Order 

Annexed hereto and made a part 

hereof is the document entitled ‘‘Order 

Amending the Order Regulating the 

Handling of Pistachios Grown in 

California, Arizona, and New Mexico.’’ 

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 

decision 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 part 900.400–407) to determine 

whether the annexed order amending 

the order regulating the handling of 

pistachios grown in California, Arizona, 

and New Mexico is approved or favored 


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1This order shall not become effective unless and 

until the requirements of § 900.14 of the rules of 

practice and procedure governing proceedings to 

formulate marketing agreements and marketing 

orders have been met. 

by producers, as defined under the 

terms of the order, who during the 

representative period were engaged in 

the production of pistachios in the 

production area (California, Arizona, 

and New Mexico). 

The representative period for the 

conduct of such referendum is hereby 

determined to be September 1, 2008 

through July 31, 2009. 

The agents of the Secretary to conduct 

such referendum are hereby designated 

to be Kurt Kimmel and Jennifer 

Robinson, California Marketing Field 

Office, Marketing Order Administration 

Branch, Fruit and Vegetable Programs, 

AMS, USDA; Telephone: (559) 487– 

5901, Fax (559) 487–5906, or e-mail: 

Kurt.Kimmel@ams.usda.gov or 

Jen.Robinson@ams.usda.gov, 

respectively. 

List of Subjects in 7 CFR Part 983 

Pistachios, Marketing agreements and 

orders, Reporting and recordkeeping 

requirements. 

Dated: July 29, 2009. 

Rayne Pegg, 

Administrator, Agricultural Marketing 

Service. 

Order Amending the Order Regulating 

the Handling of Pistachios Grown in 

California, Arizona, and New Mexico 1

Findings and Determinations 

The findings and determinations 

hereinafter set forth are supplementary 

to the findings and determinations that 

were previously made in connection 

with the issuance of the marketing 

order; 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. 

(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– 

612), and the applicable rules of 

practice and procedure effective 

thereunder (7 CFR part 900), a public 

hearing was held upon proposed further 

amendment of Marketing Agreement 

and Order No. 983, regulating the 

handling of pistachios grown in 

California. Upon the basis of the 

evidence introduced at such hearing 

and the record thereof, it is found that: 

(1) The marketing agreement and 

order, and as hereby proposed to be 

amended, and all of the terms and 

conditions thereof, would tend to 

effectuate the declared policy of the Act; 

(2) The marketing agreement and 

order, as hereby proposed to be 

amended, regulate the handling of 

pistachios grown in the production area 

in the same manner as, and are 

applicable only to, persons in the 

respective classes of commercial and 

industrial activity specified in the 

marketing agreement and order upon 

which a hearing has been held; 

(3) The marketing agreement and 

order, as hereby proposed to be 

amended, are limited in their 

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 

subdivisions of the production area 

would not effectively carry out the 

declared policy of the Act; 

(4) The marketing agreement and 

order, as hereby proposed to be 

amended, prescribe, 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 pistachios 

grown in the production area; and 

(5) All handling of pistachios grown 

in the production area as defined in the 

marketing agreement and order, 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 pistachios grown in 

California, Arizona, and New Mexico 

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 agreement and order 

amending the order contained in the 

Recommended Decision issued on April 

29, 2009, and published in the Federal 

Register on May 5, 2009, (74 FR 20630) 

will be and are the terms and provisions 

of this order amending the order and are 

set forth in full below. 

PART 983—[AMENDED] 

1. The authority citation for 7 CFR 

part 983 continues to read as follows: 

Authority: 7 U.S.C. 601–674. 

2. The heading for part 983 is revised 

to read as follows: 

PART 983—PISTACHIOS GROWN IN 

CALIFORNIA, ARIZONA, AND NEW 

MEXICO 

3. Revise § 983.1 to read as follows: 

§ 983.1 Accredited laboratory. 

An accredited laboratory is a 

laboratory that has been approved or 

accredited by the U.S. Department of 

Agriculture. 

4. Lift suspension of § 983.6, 

published on December 7, 2007 (72 FR 

69141) and effective on December 10, 

2007 and revise the section to read as 

follows: 

§ 983.6 Assessed weight. 

Assessed weight means pounds of 

inshell pistachios, with the weight 

computed at 5 percent moisture, 

received for processing by a handler 

within each production year: Provided, 

That for loose kernels, the actual weight 

shall be multiplied by two to obtain an 

inshell weight; Provided further, That 

the assessed weight may be based upon 

quality requirements for inshell 

pistachios that may be recommended by 

the Committee and approved by the 

Secretary. 

5. Lift suspension of § 983.7 

published on December 7, 2007 (72 FR 

69141) and effective on December 10, 

2007, and revise the section to read as 

follows: 

§ 983.7 Certified pistachios. 

Certified pistachios are those that 

meet the inspection and certification 

requirements under this part. 

6. Revise § 983.8 to read as follows: 

§ 983.8 Committee. 

Committee means the Administrative 

Committee for Pistachios established 

pursuant to § 983.41. 

§ 983.11 [Amended] 

7. Amend § 983.11 by adding a 

paragraph (a)(4) to read as follows: 

§ 983.11 Districts. 

(a) * * * 

(4) District 4 consists of the States of 

Arizona and New Mexico. 

* * * * * 

§ 983.19 [Removed and Reserved] 

8. Lift suspension of § 983.19 

published on December 7, 2007 (72 FR 

69141) and effective on December 10, 

2007, and remove the section. 

§ 983.20 [Removed and Reserved] 

9. Lift suspension of § 983.20 

published on December 7, 2007 (72 FR 

69141) and effective on December 10, 

2007, and remove the section. 


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§ 983.21 [Redesignated as § 983.20] 

10. Redesignate § 983.21 as § 983.20, 

and revise it to read as follows: 

§ 983.20 Part and subpart. 

Part means the order regulating the 

handling of pistachios grown in the 

States of California, Arizona and New 

Mexico, and all the rules, regulations 

and supplementary orders issued 

thereunder. The aforesaid order 

regulating the handling of pistachios 

grown in California, Arizona and New 

Mexico shall be a subpart of such part. 

§ 983.22 [Redesignated as § 983.21] 

11. Redesignate § 983.22 as § 983.21. 

§ 983.23 [Redesignated as § 983.22] 

12. Redesignate § 983.23 as § 983.22, 

and revise it to read as follows: 

§ 983.22 Pistachios. 

Pistachios means the nuts of the 

pistachio tree of the genus and species 

Pistacia vera grown in the production 

area, whether inshell or shelled. 

§ 983.24 [Redesignated as § 983.23] 

13. Redesignate § 983.24 as § 983.23. 

§ 983.25 [Redesignated as § 983.24] 

14. Redesignate § 983.25 as § 983.24. 

§ 983.26 [Redesignated as § 983.25] 

15. Redesignate § 983.26 as § 983.25, 

and revise it to read as follows: 

§ 983.25 Production area. 

Production Area means the States of 

California, Arizona, and New Mexico. 

§§ 983.27 through 983.30 [Redesignated as 

§§ 983.26 through 983.29] 

16. Redesignate §§ 983.27 through 

983.30 as §§ 983.26 through 983.29, 

respectively. 

§ 983.31 [Redesignated as § 983.30] 

17. Lift suspension of § 983.31 

published on December 7, 2007 (72 FR 

69141) and effective on December 10, 

2007, redesignate § 983.31 as § 983.30, 

and revise the section to read as follows: 

§ 983.30 Substandard pistachios. 

Substandard pistachios means 

pistachios, inshell or shelled, which do 

not meet regulations established 

pursuant to §§ 983.50 and 983.51. 

§ 983.53 [Redesignated as § 983.71] 

18. Redesignate § 983.53 as § 983.71, 

and revise paragraph (a) to read as 

follows: 

§ 983.71 Assessments. 

(a) Each handler who receives 

pistachios for processing in each 

production year, except as provided in 

§ 983.58, shall pay the committee on 

demand, an assessment based on the pro 

rata share of the expenses authorized by 

the Secretary for that year attributable to 

the assessed weight of pistachios 

received by that handler in that year. 

* * * * * 

§ 983.54 [Redesignated as § 983.72] 

19. Redesignate § 983.54 as § 983.72, 

and revise the section to read as follows: 

§ 983.72 Contributions. 

The committee may accept voluntary 

contributions but these shall only be 

used to pay for committee expenses 

unless specified in support of research 

under § 983.46. Furthermore, research 

contributions shall be free of additional 

encumbrances by the donor and the 

committee shall retain complete control 

of their use. 

§ 983.55 [Redesignated as § 983.73] 

20. Redesignate § 983.55 as § 983.73. 

§ 983.56 [Redesignated as § 983.74] 

21. Redesignate § 983.56 as § 983.74, 

and amend it by removing the reference 

to ‘‘§ 983.53’’ and adding in its place 

‘‘§ 983.71’’ in paragraph (a)(1). 

§ 983.57 [Redesignated as § 983.75] 

22. Redesignate § 983.57 as § 983.75, 

and revise it to read as follows: 

§ 983.75 Implementation and amendments. 

The Secretary, upon the 

recommendation of a majority of the 

committee, may issue rules and 

regulations implementing or modifying 

§§ 983.64 through 983.74 inclusive. 

§§ 983.58 through 983.64 [Redesignated as 

§§ 983.80 through 983.86] 

23. Redesignate §§ 983.58 through 

983.64 as §§ 983.80 through 983.86, 

respectively. 

24. Move the undesignated center 

heading ‘‘MISCELLANEOUS 

PROVISIONS’’ to precede § 983.80. 

§ 983.65 [Redesignated as § 983.87] 

25. Redesignate § 983.65 as § 983.87, 

and revise it to read as follows: 

§ 983.87 Effective time. 

The provisions of this part, as well as 

any amendments, shall become effective 

at such time as the Secretary may 

declare, and shall continue in force 

until terminated or suspended in one of 

the ways specified in § 983.88 or 

§ 983.89. 

§§ 983.66 through 983.69 [Redesignated as 

§§ 983.88 through 983.91] 

26. Redesignate §§ 983.66 through 

983.69 as §§ 983.88 through 983.91, 

respectively. 

§ 983.70 [Redesignated as § 983.92] 

27. Redesignate § 983.70 as § 983.92, 

and revise it to read as follows: 

§ 983.92 Exemption. 

Any handler may handle pistachios 

within the production area free of the 

requirements in §§ 983.50 through 

983.58 and § 983.71 if such pistachios 

are handled in quantities not exceeding 

5,000 dried pounds during any 

production year. The Secretary, upon 

recommendation of the committee, may 

issue rules and regulations changing the 

5,000 pound quantity applicable to this 

exemption. 

§ 983.41 [Redesignated] 

28. Lift suspension of § 983.41 

published on December 7, 2007 (72 FR 

69141) and effective on December 10, 

2007, redesignate § 983.41 as § 983.53, 

and revise the section to read as follows: 

§ 983.53 Testing of minimal quantities. 

(a) Aflatoxin. Handlers who handle 

less than 1 million pounds of assessed 

weight per year have the option of 

utilizing both of the following methods 

for testing for aflatoxin: 

(1) The handler may have an 

inspector sample and test his or her 

entire inventory of hulled and dried 

pistachios for the aflatoxin certification 

before further processing. 

(2) The handler may segregate receipts 

into various lots at the handler’s 

discretion and have an inspector sample 

and test each specific lot. Any lots that 

are found to have less aflatoxin than the 

level established by the committee and 

approved by the Secretary can be 

certified by an inspector to be negative 

as to aflatoxin. Any lots that are found 

to have aflatoxin exceeding the level 

established by the committee and 

approved by the Secretary may be tested 

after reworking in the same manner as 

specified in § 983.50. 

(b) Quality. The committee may, with 

the approval of the Secretary, establish 

regulations regarding the testing of 

minimal quantities of pistachios for 

quality. 

§ 983.42 [Redesignated as § 983.54] 

29. Lift suspension of § 983.42 

published on December 7, 2007 (72 FR 

69141) and effective on December 10, 

2007, redesignate § 983.42 as § 983.54, 

and revise the section to read as follows: 

§ 983.54 Commingling. 

Certified lots may be commingled 

with other certified lots, but the 

commingling of certified and uncertified 

lots shall cause the loss of certification 

for the commingled lots. 


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Federal Register / Vol. 74, No. 150 / Thursday, August 6, 2009 / Proposed Rules 39239 

§ 983.43 [Redesignated as § 983.55] 

30. Redesignate § 983.43 as § 983.55. 

§ 983.44 [Redesignated as § 983.56] 

31. Redesignate § 983.44 as § 983.56, 

and revise it to read as follows: 

§ 983.56 Inspection, certification and 

identification. 

Upon recommendation of the 

committee and approval of the 

Secretary, all pistachios that are 

required to be inspected and certified in 

accordance with this part shall be 

identified by appropriate seals, stamps, 

tags, or other identification to be affixed 

to the containers by the handler. All 

inspections shall be at the expense of 

the handler, Provided, That for handlers 

making shipments from facilities 

located in an area where inspection 

costs for inspector travel and shipment 

of samples for aflatoxin testing would 

otherwise exceed the average of those 

same inspection costs for comparable 

handling operations located in Districts 

1 and 2, such handlers may be 

reimbursed by the committee for the 

difference between their respective 

inspection costs and such average, or as 

otherwise recommended by the 

committee and approved by the 

Secretary. 

§ 983.45 [Redesignated as § 983.57] 

32. Lift the suspension of § 983.45 

published on December 7, 2007 (72 FR 

69141) and effective on December 10, 

2007, redesignate § 983.45 as § 983.57, 

and revise the section to read as follows: 

§ 983.57 Substandard pistachios. 

The committee shall, with the 

approval of the Secretary, establish such 

reporting and disposition procedures as 

it deems necessary to ensure that 

pistachios which do not meet the 

aflatoxin and quality requirements 

established pursuant to §§ 983.50 and 

983.51 shall not be shipped for domestic 

human consumption. 

§ 983.46 [Redesignated as § 983.59] 

33. Redesignate § 983.46 as § 983.59, 

and revise it to read as follows: 

§ 983.59 Modification or suspension of 

regulations. 

(a) In the event that the committee, at 

any time, finds that by reason of 

changed conditions, any regulations 

issued pursuant to §§ 983.50 through 

983.58 should be modified or 

suspended, it shall, pursuant to 

§ 983.43, so recommend to the 

Secretary. 

(b) Whenever the Secretary finds from 

the recommendations and information 

submitted by the committee or from 

other available information, that a 

regulation should be modified, 

suspended, or terminated with respect 

to any or all shipments of pistachios in 

order to effectuate the declared policy of 

the Act, the Secretary shall modify or 

suspend such provisions. If the 

Secretary finds that a regulation 

obstructs or does not tend to effectuate 

the declared policy of the Act, the 

Secretary shall suspend or terminate 

such regulation. 

(c) The Secretary, upon 

recommendation of the committee, may 

issue rules and regulations 

implementing §§ 983.50 through 983.58. 

§§ 983.47 through 983.51 [Redesignated as 

§§ 983.64 through 983.68] 

34. Redesignate §§ 983.47 through 

983.51 as §§ 983.64 through 983.68, 

respectively. 

35. Move the undesignated center 

heading ‘‘REPORTS, BOOKS, AND 

RECORDS’’ to precede § 983.64. 

§ 983.52 [Redesignated as § 983.70] 

36. Redesignate § 983.52 as § 983.70. 

37. Move the undesignated center 

heading ‘‘EXPENSES AND 

ASSESSMENTS’’ to precede § 983.70. 

38. Add a new § 983.58 to read as 

follows: 

§ 983.58 Interhandler transfers. 

Within the production area, any 

handler may transfer pistachios to 

another handler for additional handling, 

and any assessments, inspection 

requirements, aflatoxin testing 

requirements, and any other marketing 

order requirements with respect to 

pistachios so transferred may be 

assumed by the receiving handler. The 

committee, with the approval of the 

Secretary, may establish methods and 

procedures, including necessary reports, 

to maintain accurate records for such 

transfers. 

§ 983.32 [Redesignated as § 983.41] 

39. Redesignate § 983.32 as § 983.41, 

amend the section by removing the 

words ‘‘eleven (11)’’ from the 

introductory paragraph and adding in 

their place the words ‘‘twelve (12),’’ and 

by revising paragraph (b) to read as 

follows: 

§ 983.41 Establishment and membership. 

(a) * * * 

(b) Producers. Nine members shall 

represent producers. Producers within 

the respective districts shall nominate 

four producers from District 1, three 

producers from District 2, one producer 

from District 3, and one producer from 

District 4. The Secretary, upon 

recommendation of the committee, may 

reapportion producer representation 

among the districts to ensure proper 

representation. 

* * * * * 

§ 983.33 [Redesignated as § 983.42] 

40. Redesignate § 983.33 as § 983.42, 

and amend the section by removing the 

word ‘‘grower’’ and adding in its place 

the word ‘‘producer’’ in paragraph (a), 

removing the reference to ‘‘§ 983.32’’ 

and adding in its place ‘‘§ 983.41’’ in 

paragraph (j), and by removing the 

reference to ‘‘§§ 983.32, 983.33, and 

983.34’’ and adding in its place 

‘‘§§ 983.41, 983.42, and 983.43’’ in 

paragraph (n). 

§ 983.34 [Redesignated as § 983.43] 

41. Redesignate § 983.34 as § 983.43, 

and revise paragraph (a) of that section 

to read as follows: 

§ 983.43 Procedure. 

(a) Quorum. A quorum of the 

committee shall be any seven voting 

committee members. The vote of a 

majority of members present at a 

meeting at which there is a quorum 

shall constitute the act of the committee: 

Provided, That: 

(1) Actions of the committee with 

respect to the following issues shall 

require twelve (12) concurring votes of 

the voting members regarding any 

recommendation to the Secretary for 

adoption or change in: 

(i) Quality regulation; 

(ii) Aflatoxin regulation; 

(iii) Research under § 983.46; and 

(2) Actions of the committee with 

respect to the following issues shall 

require eight (8) concurring votes of the 

voting members regarding 

recommendation to the Secretary for 

adoption or change in: 

(i) Inspection programs; 

(ii) The establishment of the 

committee. 

* * * * * 

§ 983.35 [Redesignated as § 983.44] 

42. Redesignate § 983.35 as § 983.44. 

§ 983.36 [Redesignated as § 983.45] 

43. Redesignate § 983.36 as § 983.45. 

§ 983.37 [Redesignated as § 983.47] 

44. Redesignate § 983.37 as § 983.47. 

45. Move the undesignated center 

heading ‘‘MARKETING POLICY’’ to 

precede § 983.47. 

§ 983.38 [Redesignated as § 983.50] 

46. Lift the suspension of § 983.38 

published on December 7, 2007 (72 FR 

69141) and effective on December 10, 

2007, redesignate § 983.38 as § 983.50, 

and revise the section to read as follows: 


jlentini on DSKJ8SOYB1PROD with PROPOSALS
39240 Federal Register / Vol. 74, No. 150 / Thursday, August 6, 2009 / Proposed Rules 

§ 983.50 Aflatoxin regulations. 

The committee shall establish, with 

the approval of the Secretary, such 

aflatoxin sampling, analysis, and 

inspection requirements applicable to 

pistachios to be shipped for domestic 

human consumption as will contribute 

to orderly marketing or be in the public 

interest. No handler shall ship, for 

human consumption, pistachios that 

exceed an aflatoxin level established by 

the committee with approval of the 

Secretary. All domestic shipments must 

be covered by an aflatoxin inspection 

certificate. 

47. Move the undesignated center 

heading ‘‘REGULATIONS’’ to precede 

§ 983.50. 

§ 983.39 [Redesignated as § 983.51] 

48. Lift suspension of § 983.39 

published on December 7, 2007 (72 FR 

69141) and effective on December 10, 

2007, redesignate § 983.39 as § 983.51, 

and revise the section to read as follows: 

§ 983.51 Quality regulations. 

For any production year, the 

committee may establish, with the 

approval of the Secretary, such quality 

and inspection requirements applicable 

to pistachios to be shipped for domestic 

human consumption as will contribute 

to orderly marketing or be in the public 

interest. In such production year, no 

handler shall ship pistachios for 

domestic human consumption unless 

they meet the applicable requirements 

as evidenced by certification acceptable 

to the committee. 

§ 983.40 [Redesignated as § 983.52] 

49. Lift suspension of § 983.40 

published on December 7, 2007 (72 FR 

69141) and effective on December 10, 

2007, redesignate § 983.40 as § 983.52, 

and revise the section to read as follows: 

§ 983.52 Failed lots/rework procedure. 

(a) Substandard pistachios. Each lot 

of substandard pistachios may be 

reworked to meet aflatoxin or quality 

requirements. The committee may 

establish, with the Secretary’s approval, 

appropriate rework procedures. 

(b) Failed lot reporting. If a lot fails to 

meet the aflatoxin and/or the quality 

requirements of this part, a failed lot 

notification report shall be completed 

and sent to the committee within 10 

working days of the test failure. This 

form must be completed and submitted 

to the committee each time a lot fails 

either aflatoxin or quality testing. The 

accredited laboratories shall send the 

failed lot notification reports for 

aflatoxin tests to the committee, and the 

handler, under the supervision of an 

inspector, shall send the failed lot 

notification reports for the lots that do 

not meet the quality requirements to the 

committee. 

50. Add a new § 983.46, preceded by 

an undesignated center heading, to read 

as follows: 

Research 

§ 983.46 Research. 

The committee, with the approval of 

the Secretary, may establish or provide 

for the establishment of projects 

involving research designed to assist or 

improve the efficient production and 

postharvest handling of quality 

pistachios. The committee, with the 

approval of the Secretary, may also 

establish or provide for the 

establishment of projects designed to 

determine the effects of pistachio 

consumption on human health and 

nutrition. Pursuant to § 983.43(a), such 

research projects may only be 

established with 12 concurring votes of 

the voting members of the committee. 

The expenses of such projects shall be 

paid from funds collected pursuant to 

§§ 983.71 and 983.72. 

[FR Doc. E9–18538 Filed 8–5–09; 8:45 am] 

BILLING CODE 3410–02–P 

DEPARTMENT OF AGRICULTURE 

Commodity Credit Corporation 

7 CFR Part 1493 

RIN 0551–AA73 

Facility Guarantee Program 

AGENCY: Foreign Agricultural Service 

and Commodity Credit Corporation, 

USDA. 

ACTION: Advanced notice of proposed 

rulemaking. 

SUMMARY: This advanced notice of 

proposed rulemaking (ANPR) solicits 

comments on options to reform the 

USDA, Commodity Credit Corporation 

(CCC), Facility Guarantee Program 

(FGP). The purpose of the ANPR is to 

invite suggestions on improvements and 

changes to be made in the 

implementation and operation of the 

FGP, with the intent of improving the 

FGP’s effectiveness and efficiency and 

lowering costs. 

DATES: Comments on this notice must be 

received by October 5, 2009 to be 

assured consideration. 

ADDRESSES: You may submit comments 

by any of the following methods: 

• E–Mail: FGP.ANPR@fas.usda.gov. 

• Fax: (202) 720–2495, Attention: 

‘‘FGP/ANPR Comments.’’ 

• Mail to: P. Mark Rowse, Director, 

Office of Trade Programs, Credit 

Programs Division, Foreign Agricultural 

Service, U.S. Department of Agriculture, 

Stop 1025, Washington, DC 20250– 

1025. 

• Hand Delivery or Courier: 1250 

Maryland Avenue, SW., Washington, 

DC 20024. 

All comments received will be 

available for public inspection at the 

above address during regular business 

hours. 

FOR FURTHER INFORMATION CONTACT: P. 

Mark Rowse, Director, Credit Programs 

Division, at the address stated above or 

by telephone: (202) 720–6211. 

SUPPLEMENTARY INFORMATION:

Background 

The FGP is currently authorized by 

the Food, Agriculture, Conservation, 

and Trade Act of 1990 (the 1990 Act), 

as amended. Under the FGP, CCC 

provides payment guarantees to 

facilitate the financing of manufactured 

goods and services exported from the 

United States to improve or establish 

agriculture-related facilities in emerging 

markets. By supporting such facilities, 

the FGP is designed to enhance sales of 

U.S. agricultural commodities and 

products to emerging markets where the 

demand for such commodities and 

products may be limited due to 

inadequate storage, processing, handling 

or distribution capabilities for such 

products. 

Under the FGP, CCC guarantees a loan 

established by a U.S. bank (or, less 

typically, by a U.S. exporter) to an 

importer’s bank. The eligible importer’s 

bank issues a dollar-denominated letter 

of credit in favor of the exporter. The 

eligible U.S. bank, working with the 

exporter, extends credit to finance the 

sale of equipment, goods or services for 

an FGP approved project. 

As a Participant to the Organization 

for Economic Cooperation and 

Development’s (OECD) Arrangement on 

Officially Supported Export Credits, the 

United States has agreed to adopt the 

terms and conditions of that 

Arrangement for the FGP. The 

Arrangement can be found on the 

OECD’s Web site at: http:// 

www.oecd.org/topic/0,3373,en_

2649_34169_1_1_1_1_37431,00.html. 

Project Eligibility 

USDA does not designate specific 

projects but instead solicits proposals 

from exporters. Private sector importers, 

exporters and the banking sector should 

determine which projects are 

commercially viable. The FGP will 

support the financing of projects that 


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