This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

25233

Vol. 65, No. 84

Monday, May 1, 2000

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 981

[Docket No. FV00–981–1 IFR]

Almonds Grown in California; Release

of the Reserve Established for the

1999–2000 Crop Year

AGENCY: Agricultural Marketing Service,

USDA.

ACTION: Interim final rule with request

for comments.

SUMMARY: This rule relaxes volume

regulation implemented under the

California almond marketing order

(order) during the 1999–2000 crop year

(August 1 through July 31). The order

regulates the handling of almonds

grown in California and is locally

administered by the Almond Board of

California (Board). This rule releases, in

three stages, reserve almonds into

normal salable channels. One-third of

the reserve will be released on the

effective date of this rule, the secondthird will be released on June 1, 2000,

and the final-third will be released on

July 1, 2000. Releasing the reserve is

necessary to provide a sufficient

quantity of almonds to meet anticipated

trade demand and carryover needs.

DATES: Effective on May 2, 2000;

comments received by May 16, 2000

will be considered prior to 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 Administration Branch, Fruit and

Vegetable Programs, AMS, USDA, room

2525–S, P.O. Box 96456, Washington,

DC 20090–6456; Fax: (202) 720–5698, or

E-mail: moab.docketclerk@usda.gov. All

comments should reference the docket

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.

FOR FURTHER INFORMATION CONTACT:

Martin Engeler, California Marketing

Field Office, Marketing Order

Administration Branch, Fruit and

Vegetable Programs, AMS, USDA, 2202

Monterey Street, suite 102B, Fresno,

California 93721; telephone: (559) 487–

5901, Fax: (559) 487–5906; or George

Kelhart, Technical Advisor, Marketing

Order Administration Branch, Fruit and

Vegetable Programs, AMS, USDA, room

2525–S, P.O. Box 96456, Washington,

DC 20090–6456; telephone: (202) 720–

2491, Fax: (202) 720–5698.

Small businesses may request

information on complying with this

regulation by contacting Jay Guerber,

Marketing Order Administration

Branch, Fruit and Vegetable Programs,

AMS, USDA, P.O. Box 96456, room

2525–S, Washington, DC 20090–6456;

telephone: (202) 720–2491, Fax: (202)

720–5698, or E-mail:

Jay.Guerber@usda.gov.

SUPPLEMENTARY INFORMATION: This rule

is issued under Marketing Order No.

981, as amended, (7 CFR part 981),

regulating the handling of almonds

grown in California, 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

(Department) is issuing this rule in

accordance with Executive Order 12866.

This rule has been reviewed under

Executive Order 12988, Civil Justice

Reform. Under the provisions of the

marketing order now in effect, salable

and reserve percentages may be

established for almonds during any crop

year. This rule revises the salable and

reserve percentages for marketable

California almonds during the 1999–

2000 crop year, which began August 1,

1999, and ends July 31, 2000. This rule

will not preempt any State or local laws,

regulations, or policies, unless they

present an irreconcilable conflict with

this rule.

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 the Secretary 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 the Secretary 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 in

equity to review the Secretary’s ruling

on the petition, provided a bill in equity

is filed not later than 20 days after the

date of the entry of the ruling.

This interim final rule relaxes volume

regulation implemented under the order

during the 1999–2000 crop year (August

1 through July 31). The order regulates

the handling of almonds grown in

California and is locally administered

by the Board. During the 1999–2000

season, handlers were required to

withhold as a reserve, from normal

competitive markets, 22.36 percent of

the almonds which they received from

growers. The remaining 77.64 percent of

the crop could be sold by handlers to

any market at any time. These

percentages are referred to as reserve

and salable percentages, respectively.

This rule relaxes this regulation on

handlers by releasing, in three stages, all

almonds held as reserve to be available

for sale to normal market channels. This

is necessary to provide a sufficient

quantity of almonds to meet anticipated

trade demand and carryover needs. This

action was unanimously recommended

by the Board at a meeting on April 10,

2000.

Section 981.47 of the almond

marketing order provides authority for

the Secretary, based on

recommendations by the Board and the

analysis of other available information,

to establish salable and reserve

percentages for almonds during a crop

year. To aid the Secretary in fixing the

salable and reserve percentages,

§ 981.49 of the order requires the Board

to submit information to the Department

on estimates of the marketable

production of almonds, trade demand

needs for the year, carryin inventory at

the beginning of the year, and the

desirable carryout inventory at the end

of the year. Reserve almonds may be

disposed of in authorized reserve

outlets, such as certified organic

markets or for use in almond oil,

25234 Federal Register / Vol. 65, No. 84 / Monday, May 1, 2000 / Rules and Regulations

almond butter, and animal feed. Reserve

almonds can also be released for sale

into normal marketing channels based

on a revision of the aforementioned

factors and other information. Authority

for the Board to recommend revisions in

the volume regulation percentages is

provided in § 981.48 of the order. Such

revisions must be recommended by May

15.

The Board met in May and July of

1999 to review projected crop estimates

and marketing conditions for the 1999–

2000 crop year. A record crop of 830

million kernelweight pounds was

projected for the season. This would

produce an estimated 796.8 marketable

kernelweight pounds after an

adjustment for processing losses and

exempt product. When combined with

estimated carryin and adjusted for

desired carryout, an estimated 827.2

million pounds was available for the

1999–2000 crop year. Trade demand

was estimated by the Board at 649

million pounds; thus, a projected

oversupply of almonds existed for the

1999–2000 crop year of about 178.2

million pounds. The Board also

considered other factors such as price

levels and fluctuations, increased

plantings and yields, and weatherrelated variations in production, and

ultimately recommended establishment

of a reserve for the 1999–2000 season.

The Department established salable and

reserve percentages of 77.64 and 22.36

percent, respectively, for almonds

received by handlers during the 1999–

2000 crop year, pursuant to a regulation

published in the Federal Register on

November 2, 1999 (64 FR 59107).

The Board met on April 10, 2000, to

consider disposition of the reserve. At

that time, the Board evaluated

marketing and other conditions in the

industry, and recommended revisions to

the marketing policy estimates initially

used in establishing the reserve. A

comparison of the initial estimates and

revised estimates are contained in the

following table.

MARKETING POLICY ESTIMATES—1999

CROP

[Kernelweight basis in millions of pounds]

7/12/99

initial

estimates

4/10/00

revised

estimates

Estimated Production:

1. 1999 Production ....... 830.0 827.4

2. Loss and

Exempt—

4.0% .......... 33.2 33.1

3. Marketable

Production 796.8 794.3

MARKETING POLICY ESTIMATES—1999

CROP—Continued

[Kernelweight basis in millions of pounds]

7/12/99

initial

estimates

4/10/00

revised

estimates

Estimated Trade

Demand:

4. Domestic ... 190.0 203.0

5. Export ........ 459.0 492.0

6. Total .......... 649.0 695.0

Inventory Adjustment:

7. Carryin 8/1/

99 ............... 100.4 91.8

8. Desirable

Carryover 7/

31/00 .......... 70.0 191.1

9. Adjustment

(Item 8

minus item

7) ............... ¥30.4 99.3

Salable/Reserve:

10. Adjusted

Trade Demand (Item

6 plus item

9) ............... 618.6 794.3

11. Reserve

(Item 3

minus item

10) ............. 178.2 0.0

12. Salable %

(Item 10 divided by

item 3×100) 77.64% 100.0

13. Reserve

% (100%

minus item

12) ............. 22.36% 0.0

In arriving at these estimates, the

Board revised its the 1999–2000 crop

estimate of 830 million pounds to 827.4

million pounds, and marketable

production of 796.8 million pounds to

794.3 million pounds. The carryin on

August 1, 1999, was initially estimated

to be 100.4 million pounds. That figure

was revised to reflect actual carryin of

91.8 million pounds. Thus, the total

available supply for the 1999–2000 crop

year is slightly lower than initially

estimated.

Shipment figures for the year to date

were analyzed. Through March 2000,

total industry shipments of almonds

were 525.5 million pounds, significantly

higher than shipments for a comparable

period in any prior year. Based on

historical shipping patterns and

shipments to date this season, the Board

anticipates strong shipment levels to

continue for the remainder of the

season. Therefore, the Board revised its

trade demand estimate from 649 million

pounds to 695 million pounds.

Although an official crop estimate for

the 2000–2001 crop year will not be

available until May 11, 2000, the

consensus in the industry is that next

year’s crop will be significantly smaller

than the current crop. Several factors

have contributed to this conclusion. In

addition to the usual pattern of a shorter

crop following a large crop, the weather

throughout the production area during

the month of February was generally

cool, rainy, and windy. During this

period, almond trees were in bloom, and

the weather conditions were not

conducive to good flower pollination.

Field observations since the bloom

period confirm that next year’s crop will

be significantly smaller. Preliminary

industry discussions indicate that the

2000–2001 crop will be approximately

550 million pounds. A crop of that size

would not provide a sufficient supply of

almonds to meet trade needs and

provide an adequate carryout at the end

of the 2000–2001 crop year. Therefore,

to provide more almonds to satisfy the

current year’s trade demand and to

augment next year’s supplies, the Board

recommended releasing the 1999–2000

crop year reserve.

The Board also considered the timing

of releasing reserve product to salable

market channels. The Board determined

that a gradual release schedule would

best serve the industry. This would

prevent a large quantity of almonds

from being made available for sale by

handlers immediately, which could put

downward pressure on prices and create

disorderly marketing conditions. Thus,

the Board unanimously recommended

releasing one-third of the reserve as

soon as possible, one-third on June 1,

2000, and the final-third on July 1, 2000.

The resulting salable and reserve

percentages will be 85.09 percent and

14.91 percent, respectively, on the

effective date of this rule; 92.55 percent

and 7.45 percent, respectively, on June

1, 2000; and 100 and 0 percent,

respectively, on July 1, 2000.

Pursuant to requirements set forth in

the Regulatory Flexibility Act (RFA), the

Administrator of 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

business subject to such actions in order

that small businesses will not be unduly

or disproportionately burdened.

Marketing orders issued pursuant to the

Act, and rules issued thereunder, are

unique in that they are brought about

through group action of essentially

small entities acting on their own

behalf. Thus, both statutes have small

entity orientation and compatibility.

Federal Register / Vol. 65, No. 84 / Monday, May 1, 2000 / Rules and Regulations 25235

There are approximately 105 handlers

of California almonds who are subject to

regulation under the marketing order

and approximately 6,000 producers in

the regulated area. Small agricultural

service firms have been defined by the

Small Business Administration (13 CFR

121.201) as those having annual receipts

of less than $5,000,000, and small

agricultural producers are defined as

those whose annual receipts are less

than $500,000.

Based on the most current data

available, about 54 percent of almond

handlers ship under $5,000,000 worth

of almonds and 46 percent ship over

$5,000,000 worth on an annual basis. In

addition, based on production and

grower prices reported by the National

Agricultural Statistics Service (NASS),

and the total number of almond

growers, the average annual grower

revenue is approximately $195,000. In

view of the foregoing, it can be

concluded that the majority of handlers

and producers of California almonds

may be classified as small entities.

Pursuant to §§ 981.47 and 981.49,

during the 1999–2000 crop year,

handlers were required to withhold as a

reserve, from normal competitive

markets, 22.36 percent of the almonds

which they received from growers (64

FR 59107, November 2, 1999). The

remaining 77.64 percent of the crop

could be sold by handlers to any market

at any time. Volume regulation was

implemented because the available

supply of almonds for the 1999–2000

crop year, adjusted by carryin and

desired carryout, was estimated to be

about 827 million pounds, which

exceeded the estimated trade demand

needs of about 649 million pounds.

Pursuant to § 981.48 of the order, this

rule releases 7.45 percent of the reserve

on the effective date of this rule, 7.45

percent on June 1, 2000, and 7.45

percent on July 1, 2000. Releasing the

reserve is necessary to provide a

sufficient quantity of almonds to meet

anticipated trade demand and carryover

needs. Shipment levels through March

2000 and anticipated strong shipments

for the remainder of the season lead to

an increased trade demand estimate

from 649 million pounds to 695 million

pounds. In addition, because a smaller

2000–2001 crop is expected

(approximately 550 million pounds), the

industry would like to increase the

amount of 1999–2000 carryout

inventory from 70 million pounds to

191.2 million pounds to augment

supplies during the next crop year.

Timing of the release is structured so

that all 178 million pounds of reserve

product will not enter the market at one

time.

This action is expected to have a

positive effect on producers and

handlers of almonds. It gradually

removes the regulatory requirement that

handlers hold product in reserve or sell

it to reserve outlets. Handlers will be

able to sell reserve almonds into normal

markets at prevailing prices (currently

in the range of $1.25 per pound to $1.60

per pound) as opposed to selling them

into lower value reserve outlets (ranging

from 8 to 15 cents per pound for oil or

4 to 5 cents per pound for animal feed).

Although reserve almonds can be sold

to organic markets or for use in the

manufacture of almond butter at higher

prices than other reserve outlets, the

quantity that can be sold is limited

because those markets are limited.

Handlers and growers should be able to

achieve higher total revenue for their

product by selling to normal markets,

because trade demand for almonds has

increased significantly from early

season estimates, and price levels have

also improved in recent months.

Releasing reserve almonds into the

market in three stages will help to

ensure that a large supply of almonds is

not available for sale by handlers at the

same time, which could create a

temporary oversupply and have a

negative impact on price levels. The

staged release will also help to ensure

that additional product will be available

to carry into the following crop year to

augment anticipated short supplies.

This action is intended to promote

orderly marketing conditions for the

remainder of the 1999–2000 crop year

and also leading into the 2000–2001

crop year, for the benefit of producers

and handlers, regardless of size.

One alternative considered was to

release all of the reserve product to

normal market channels as soon as

possible. This alternative was not

recommended because it was believed

that too much product would be

available at one time, creating a shortterm oversupply situation, which could

negatively impact prices and market

conditions. Another alternative

considered was to release one-third of

the reserve as soon as possible, and if

the May 11, 2000, crop estimate issued

by NASS for the 2000–2001 crop is less

than 525 million pounds, to release the

entire reserve as soon as possible after

that. If the May crop estimate is more

than 525 million pounds, this

alternative would release one-third of

the reserve as soon as possible after the

estimate is issued and the final onethird on July 1, 2000. This was not

recommended. The Board decided that

three equal releases were preferable.

All the scenarios considered had the

common goal of releasing all the 1999–

2000 crop year reserve to the salable

category. The Board ultimately

recommended releasing one-third of the

reserve as soon as possible (on the

effective date of this rule), one third on

June 1, 2000, and the final one-third on

July 1, 2000. The Board believed this

would best achieve orderly marketing

objectives. Adequate supplies should be

available to meet market needs for the

remainder of the crop year and for

carryin to the next crop year, thus

satisfying market needs and maintaining

market and price stability.

This rule will not impose any

additional reporting and recordkeeping

requirements on either small or large

handlers. As with all Federal marketing

order programs, reports and forms are

periodically reviewed to help reduce

information requirements and

duplication by industry and public

sector agencies.

In addition, the Department has not

identified any relevant Federal rules

that duplicate, overlap, or conflict with

this rule.

Further, the Board’s meeting was

widely publicized throughout the

almond industry and all interested

persons were invited to attend the

meeting and participate in Board

deliberations. Like all Board meetings,

the April 10, 2000, meeting was a public

meeting and all entities, both large and

small, were able to express their views

on this issue.

Also, the Board has a number of

appointed committees to review certain

issues and make recommendations to

the Board. The Board’s Reserve

Committee met on April 10, 2000, and

discussed this issue in detail. That

meeting was also a public meeting and

both large and small entities were able

to participate and express their views.

Finally, interested persons are invited to

submit information on 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 the following website:

http://www.ams.usda.gov/fv/

moab.html. Any questions about the

compliance guide should be sent to Jay

Guerber at the previously mentioned

address in the FOR FURTHER INFORMATION

CONTACT section.

After consideration of all relevant

material presented, including the

Board’s recommendation, and other

information, it is found that this interim

final rule, as hereinafter set forth, will

tend to effectuate the declared policy of

the Act.

A comment period of 15 days is

provided to allow interested persons to

25236 Federal Register / Vol. 65, No. 84 / Monday, May 1, 2000 / Rules and Regulations

respond to this interim final rule. A

comment period of 15 days is deemed

appropriate to allow the Department

sufficient time to consider comments

prior to the scheduled releases on June

1, and July 1, 1999. All comments

timely received will be considered in

finalizing this action.

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 rule relaxes

requirements currently in effect by

increasing the quantity of almonds that

may be marketed; (2) the 1999–2000

crop year ends July 31, (3) this rule was

discussed at a public meeting and

interested persons had an opportunity

to provide input; (4) the rule was

unanimously recommended by the

Board; and (5) this rule provides a 15-

day comment period and any comments

received will be considered prior to

finalization of this rule.

List of Subjects in 7 CFR Part 981

Almonds, Marketing agreements,

Nuts, Reporting and recordkeeping

requirements.

For the reasons set forth in the

preamble, 7 CFR part 981 is amended as

follows:

PART 981—ALMONDS GROWN IN

CALIFORNIA

1. The authority citation for 7 CFR

part 981 continues to read as follows:

Authority: 7 U.S.C. 601–674.

[Note: This section will not appear in the

Code of Federal Regulations.]

2. In Part 981, § 981.240 is revised to

read as follows:

§ 981.240 Salable and reserve percentages

for almonds during the crop year beginning

on August 1, 1999.

The salable and reserve percentages

during the crop year beginning on

August 1, 1999, shall be 85.09 percent

and 14.91 percent, respectively,

beginning on May 2, 2000; 92.55 percent

and 7.45 percent, respectively,

beginning on June 1, 2000, and 100

percent and 0 percent, respectively,

beginning on July 1, 2000.

Dated: April 25, 2000.

Robert C. Keeney,

Deputy Administrator, Fruit and Vegetable

Programs.

[FR Doc. 00–10765 Filed 4–28–00; 8:45 am]

BILLING CODE 3410–02–P

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1205

[CN–00–002]

2000 Amendment to Cotton Board

Rules and Regulations Adjusting

Supplemental Assessment on Imports

AGENCY: Agricultural Marketing Service,

USDA.

ACTION: Final rule.

SUMMARY: The Agricultural Marketing

Service (AMS) is amending the Cotton

Board Rules and Regulations by

lowering the value assigned to imported

cotton for the purpose of calculating

supplemental assessments collected for

use by the Cotton Research and

Promotion Program. This action is

required by this regulation on an annual

basis to ensure that the assessments

collected on imported cotton and the

cotton content of imported products

remain similar to those paid on

domestically produced cotton.

EFFECTIVE DATE: May 31, 2000.

FOR FURTHER INFORMATION CONTACT:

Whitney Rick, (202) 720–2259.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This rule has been determined to be

‘‘non significant’’ for purposes of

Executive Order 12866, and, therefore,

has not been reviewed by the Office of

Management and Budget.

Executive Order 12988

This rule has been reviewed under

Executive Order 12988, Civil Justice

Reform. It is not intended to have

retroactive effect. This rule would not

preempt any state or local laws,

regulations, or policies, unless they

present an irreconcilable conflict with

this rule.

The Cotton Research and Promotion

Act provides that administrative

proceedings must be exhausted before

parties may file suit in court. Under

Section 12 of the Act, any person

subject to an order may file with the

Secretary a petition stating that the

order, any provision of the plan, or any

obligation imposed in connection with

the order is not in accordance with law

and requesting a modification of the

order or to be exempted therefrom. Such

person is afforded the opportunity for a

hearing on the petition. After the

hearing, the Secretary would rule on the

petition. The Act provides that the

District Court of the United States in

any district in which the person is an

inhabitant, or has his principal place of

business, has jurisdiction to review the

Secretary’s ruling, provided a complaint

is filed within 20 days from the date of

the entry of ruling.

Regulatory Flexibility Act

Pursuant to requirements set forth in

the Regulatory Flexibility Act (RFA) (5

U.S.C. 601 et seq.) AMS has considered

the economic impact of this action on

small entities and has determined that

its implementation will not have a

significant economic impact on a

substantial number of small businesses.

There are an estimated 10,000

importers who are presently subject to

rules and regulations issued pursuant to

the Cotton Research and Promotion

Order. This rule would affect importers

of cotton and cotton-containing

products. The majority of these

importers are small businesses under

the criteria established by the Small

Business Administration. This rule

would lower the assessments paid by

the importers under the Cotton Research

and Promotion Order. Even though the

assessment will be lowered, the

decrease is small and will not

significantly affect small businesses.

The current assessment on imported

cotton is $0.011397 per kilogram of

imported cotton. The amended

assessment is $0.009833, a decrease of

$0.001564 or a 13.72 percent decrease

from the current assessment. From

January through December 1999

approximately $23 million was

collected at the $0.011397 per kilogram

rate. Should the volume of cotton

products imported into the U.S. remain

at the same level in 2000, one could

expect the decreased assessment to

generate approximately $19.8 million or

a 13.72 percent decrease from 1999.

Paperwork Reduction

In compliance with Office of

Management and Budget (OMB)

regulations (5 CFR part 1320) which

implement the Paperwork Reduction

Act (PRA) (44 U.S.C. 3501 et seq.) the

information collection requirements

contained in the regulation to be

amended have been previously

approved by OMB and were assigned

control number 0581–0093.

Background

The Cotton Research and Promotion

Act Amendments of 1990 enacted by

Congress under Subtitle G of Title XIX

of the Food, Agriculture, Conservation

and Trade Act of 1990 on November 28,

1990, contained two provisions that

authorized changes in the funding

procedures for the Cotton Research and

Promotion Program.