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[Federal Register Volume 76, Number 74 (Monday, April 18, 2011)]
[Rules and Regulations]
[Pages 21615-21618]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-9328]

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 916 and 917

[Doc. No. AMS-FV-11-0019; FV11-916/917-5 IR]

Nectarines and Peaches Grown in California; Suspension of 
Handling Requirements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim rule with request for comments.

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SUMMARY: This rule suspends the quality, inspection, reporting, and 
assessment requirements specified under the California nectarine and 
peach marketing orders (orders). The orders regulate the handling of 
nectarines and peaches grown in California. During recent referenda, 
less than the required two-thirds majority of growers, by number and 
production volume, favored continuation of the orders. After 
consideration of the referendum results and other factors, the 
Department of Agriculture (USDA) has decided to seek termination of the 
orders. Suspension of the handling regulations for the 2011 and 
subsequent marketing seasons will relieve handlers of all regulatory 
burden under the orders while USDA processes the terminations. 
Termination of the orders must be delayed until after a 60-day 
Congressional notification period following issuance of a proposed 
rule, which will be published in a future issue of the Federal 
Register.

DATES: Effective April 19, 2011; comments received by June 17, 2011 
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, 1400 Independence Avenue, SW., STOP 0237, Washington, DC 
20250-0237; Fax: (202) 720-8938, or Internet: http://www.regulations.gov. All comments should reference the document number 
and the date and page number of this issue of the Federal Register and 
will be made available for public inspection at the Office of the 
Docket Clerk during regular business hours, or can be viewed at: http://www.regulations.gov. All comments submitted in response to this rule 
will be included in the record and will be made available to the 
public. Please be advised that the identity of the individuals or 
entities submitting the

[[Page 21616]]

comments will be made public on the Internet at the address provided 
above.

FOR FURTHER INFORMATION CONTACT: Jerry L. Simmons, Marketing 
Specialist, or Kurt J. Kimmel, Regional Manager, 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: Jerry.Simmons@ams.usda.gov or 
Kurt.Kimmel@ams.usda.gov.
    Small businesses may request information on complying with this 
regulation by contacting Antoinette Carter, 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; or E-mail: 
Antoinette.Carter@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order 
Nos. 916 and 917, both as amended (7 CFR parts 916 and 917), regulating 
the handling of nectarines and peaches grown in California, 
respectively, hereinafter referred to as the ``orders.'' The orders are 
effective under the Agricultural Marketing Agreement Act of 1937, as 
amended (7 U.S.C. 601-674), hereinafter referred to as the ``Act.''
    USDA is issuing this rule in conformance with Executive Order 
12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Regulatory requirements for nectarines and peaches 
grown in California are suspended indefinitely beginning with the 2011 
marketing season.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 608c(15)(A) of the 
Act, any handler subject to an order may file with USDA a petition 
stating that the order, any provision of the order, or any obligation 
imposed in connection with the order is not in accordance with law and 
request a modification of the order or to be exempted therefrom. A 
handler is afforded the opportunity for a hearing on the petition. 
After the hearing, USDA would rule on the petition. The Act provides 
that the district court of the United States in any district in which 
the handler is an inhabitant, or has his or her principal place of 
business, has jurisdiction to review USDA's ruling on the petition, 
provided an action is filed not later than 20 days after the date of 
the entry of the ruling.
    This action suspends for the 2011 and subsequent marketing seasons 
the quality, inspection, reporting, and assessment requirements for 
nectarines and peaches specified under the orders. Suspension of the 
handling requirements will relieve handlers of all regulatory burdens 
associated with the programs while USDA seeks to terminate the orders, 
which are no longer favored by industry growers.
    The nectarine order has been in effect since 1958. The peach order, 
which includes provisions for the handling of fresh pears, has been in 
effect since 1939. The orders have been used over the years to provide 
the California tree fruit industries with authority for grade, size, 
maturity, pack, and container regulations, as well as authority for 
inspection requirements. The orders also authorize production research 
and marketing research and development projects, as well as the 
necessary reporting and recordkeeping functions required for operation. 
The programs are funded by assessments imposed on handlers.
    Sections 916.64(e) and 917.61(e) of the orders require continuance 
referenda to be conducted every fourth year between December 1 and 
February 15. During the period January 12 through February 2, 2011, 
USDA conducted referenda among growers to determine if they favored 
continuation of their programs. The referendum order published in the 
Federal Register on December 13, 2010 (75 FR 77563), explained that 
USDA would consider terminating the orders if fewer than two-thirds of 
the growers voting and growers of less than two-thirds of the 
production volume represented in the referenda favored continuance.
    Ballots were mailed to 447 known nectarine and peach growers in 
California. Ninety-nine valid nectarine ballots and 102 valid peach 
ballots were returned. Only 63 percent of participating nectarine 
growers, who produced 36 percent of the volume represented in the 
referendum, favored continuation of the nectarine order. Only 62 
percent of the peach growers, who produced 36 percent of the volume 
represented in the referendum, favored continuing the peach order.
    During the same period, referendum ballots were mailed to 140 pear 
growers. Thirty-four valid ballots were returned. Ninety-four percent 
of participating pear growers, who produced 99 percent of the 
production volume represented in the referendum, voted to continue the 
fresh pear order. The provisions of Marketing Order No. 917 (7 CFR part 
917) pertaining to pears have been suspended since 1994 (59 FR 10055; 
March 5, 1994). However, because pear growers support continuance of 
the suspended provisions, USDA does not intend to terminate the pear 
provisions at this time. The remainder of this document pertains to the 
suspension of regulations under the nectarine and peach orders only.
    These are the second consecutive referenda in which growers have 
failed to support continuation of the nectarine and peach orders. In 
2003, growers did not vote in favor of continuing the programs. 
However, after conducting listening sessions with the industry, USDA 
determined that with certain modifications the order programs could 
continue to be beneficial. The orders were amended (71 FR 41345; July 
21, 2006) and regulatory changes were made that were intended to make 
the programs relevant to contemporary industry needs (72 FR 18847; 
April 16, 2007). No continuance referenda were conducted in 2007 
because the orders were being amended at the time.
    Despite USDA efforts to help refine the programs over the past 
several years, growers have continued to express their belief that the 
programs no longer meet their needs. These referendum results 
demonstrate a lack of grower support needed to carry out the objectives 
of the Act. Thus, it has been determined that the provisions of the 
orders no longer tend to effectuate the declared policy of the Act. 
USDA intends to seek termination of the orders through the informal 
rulemaking process and will publish a proposed rule regarding the 
terminations in a future issue of the Federal Register. Additionally, 
USDA is required to notify Congress not later than 60 days before the 
date the order would be terminated.
    The 2011-12 fiscal year for California nectarines and peaches began 
March 1, 2011. The 2011 marketing season begins on April 1. This action 
suspends the nectarine and peach quality, inspection, and assessment 
regulations in effect under the orders for the 2011-12 and subsequent 
marketing seasons. Also, handler reports would not be required 
beginning with the 2011 marketing season. Suspending all regulatory 
requirements relieves handlers of all regulatory burden under the 
orders.
    It is hereby determined that the quality, inspection, reporting, 
and assessment requirements specified in Sections 916.110, 916.115, 
916.234, 916.235, 916.350, and 916.356 for nectarines do not effectuate 
the declared policy of the Act and should not be applied during the 
2011-12 and subsequent seasons. Further, it is hereby determined that 
the quality, inspection, reporting, and assessment requirements 
specified in Sections 917.143, 917.150, 917.258, 917.259, 917.442, and 
917.459 for peaches do not effectuate the

[[Page 21617]]

declared policy of the Act and should not be applied during the 2011-12 
and subsequent seasons. Therefore, these sections are suspended 
effective April 19, 2011. Upon termination of the order provisions 
pertaining to nectarines and peaches grown in California, these and 
other regulations under the orders would no longer be in effect.

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) 
has considered the economic impact of this action on small entities. 
Accordingly, AMS has prepared this initial regulatory flexibility 
analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and the rules issued thereunder, are unique in 
that they are brought about through group action of essentially small 
entities acting on their own behalf.
    There are approximately 97 California nectarine and peach handlers 
subject to regulation under the orders covering nectarines and peaches 
grown in California, and about 447 growers of these fruits in 
California. Small agricultural service firms, which include handlers, 
are defined by the Small Business Administration (SBA) (13 CFR 121.201) 
as those having annual receipts of less than $7,000,000, and small 
agricultural growers are defined as those having annual receipts of 
less than $750,000. A majority of these handlers and growers may be 
classified as small entities.
    For the 2010 marketing season, the committees' staff estimated that 
the average handler price received was $10.50 per container or 
container equivalent of nectarines or peaches. A handler would have to 
ship at least 666,667 containers to have annual receipts of $7,000,000. 
Given data on shipments maintained by the committees' staff and the 
average handler price received during the 2010 season, the committees' 
staff estimates that approximately 46 percent of handlers in the 
industry would be considered small entities.
    For the 2010 marketing season, the committees' staff estimated the 
average grower price received was $5.50 per container or container 
equivalent for nectarines and peaches. A grower would have to produce 
at least 136,364 containers of nectarines and peaches to have annual 
receipts of $750,000. Given data maintained by the committees' staff 
and the average grower price received during the 2010 season, the 
committees' staff estimates that more than 80 percent of the growers 
within the industry would be considered small entities.
    This rule suspends the quality, inspection, and assessment 
requirements for nectarines and peaches under the orders. Also, handler 
reports would not be required beginning with the 2011 marketing season. 
This action is consistent with USDA's decision to seek termination of 
the nectarine and peach order provisions. Growers recently participated 
in continuance referenda to determine current support for the orders. 
Less than the required two-thirds majority of voters, by number and 
production volume, favored continuance. As provided in the orders, USDA 
is obligated to consider order termination when growers fail to support 
the order programs in sufficient numbers. Following the 2003 
continuance referenda, in which voters did not support continuation of 
the programs, USDA conducted listening sessions in the industry. It was 
determined at that time that the programs might continue to benefit 
growers and handlers if certain modifications were made to the 
programs. The orders were amended in 2006 (71 FR 41345; July 21, 2006). 
Significant changes to the orders' grade and inspection regulations 
were subsequently made to reduce costs to handlers (72 FR 18847; April 
16, 2007). The industries then transferred the bulk of their 
promotional activities to California State marketing programs. The 
California State marketing programs were subsequently discontinued in 
2010. Despite all these attempts to modify the Federal programs, the 
industry has continued to express its belief that the benefits of the 
programs no longer outweigh the costs. Therefore, USDA has decided to 
seek termination of the nectarine and peach marketing order programs. 
Suspension of the regulations would relieve handlers of quality, 
inspection, and assessment burdens during the termination process. 
Also, handler reports would not be required beginning with the 2011 
marketing season. Additionally, growers may be relieved of some costs, 
such as assessment expenses, which are often passed onto them by 
handlers. Suspension of the requirements is therefore expected to 
reduce the regulatory burden on handlers and growers of all sizes.
    As an alternative to this rule, AMS considered not suspending the 
stated handler requirements. In that case, handlers would have to 
comply with all quality, inspection, assessment, and reporting 
requirements until the orders were terminated. However, AMS does not 
believe that it is appropriate to require handlers to continue to be 
regulated during the 2011 marketing season when AMS intends to 
terminate the orders as soon as practicable. Therefore, this 
alternative was rejected and handlers will be relieved of the 
regulatory burdens under orders 916 and 917.
    This rule will not impose any additional reporting or recordkeeping 
requirements on either small or large California nectarine or peach 
handlers. As with all Federal marketing order programs, reports and 
forms are periodically reviewed to reduce information requirements and 
duplication by industry and public sector agencies. In addition, USDA 
has not identified any relevant Federal rules that duplicate, overlap, 
or conflict with this rule.
    AMS is committed to complying with the E-Government Act, to promote 
the use of the Internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.
    Finally, interested persons are invited to submit comments on this 
interim rule, including the regulatory and informational impacts of 
this action on small businesses.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/MarketingOrdersSmallBusinessGuide. Any questions 
about the compliance guide should be sent to Antoinette Carter at the 
previously-mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    This rule invites comments on suspension of the quality, 
inspection, reporting, and assessment requirements currently prescribed 
under the marketing orders for California fresh nectarines and peaches. 
Any comments received will be considered prior to finalization of this 
rule.
    After consideration of all relevant material presented, including 
the results of recent grower continuance referenda, it is found that 
the regulatory requirements suspended by this interim rule, as 
hereinafter set forth, do not tend to effectuate the declared policy of 
the Act.
    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

[[Page 21618]]

exists for not postponing the effective date of this rule until 30 days 
after publication in the Federal Register because: (1) This rule should 
be implemented as soon as possible, since shipments of California 
nectarines and peaches are expected to begin in early April; (2) less 
than the required two-thirds majority of voters, by number or 
production volume, favored continuance of the nectarine and peach 
orders in the recent referenda; (3) handlers are aware of USDA's 
intention to suspend the regulations, which was announced in a press 
release issued on March 25, 2011; and (4) this rule provides a 60-day 
comment period, and any comments received will be considered prior to 
finalization of this rule.

List of Subjects

7 CFR Part 916

    Marketing agreements, Nectarines, Reporting and recordkeeping 
requirements.

7 CFR Part 917

    Marketing agreements, Peaches, Pears, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR parts 916 and 917 
are amended as follows:

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

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

PART 916--NECTARINES GROWN IN CALIFORNIA

0
2. In part 916, Sec. Sec.  916.110, 916.115, 916.234, 916.235, 916.350, 
and 916.356 are suspended indefinitely, effective April 19, 2011.

PART 917--FRESH PEARS AND PEACHES GROWN IN CALIFORNIA

0
3. In part 917, Sec.  917.143, paragraph (b), lift the suspensions of 
March 3, 1994 (59 FR 10056); and suspend Sec. Sec.  917.143, 917.150, 
917.258, 917.259, 917.442, and 917.459 indefinitely, effective April 
19, 2011.

    Dated: April 12, 2011.
David R. Shipman,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2011-9328 Filed 4-15-11; 8:45 am]
BILLING CODE 3410-02-P
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