Federal Register / Vol. 63, No. 14 /Thursday, January 22, 1998 /Rules and Regulations 3251

Grapefruit classification

(1)

Regulation period

(2)

Minimum grade

(3)

Minimum

diameter

(inches)

(4)

* * * * * * *

* * * * *

Dated: January 15, 1998.

Robert C. Keeney,

Deputy Administrator, Fruit and Vegetable

Programs.

[FR Doc. 98–1430 Filed 1–21–98; 8:45 am]

BILLING CODE 3410–02–P

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 982

[Docket No. FV98–982–1 IFR]

Hazelnuts Grown in Oregon and

Washington; Establishment of Interim

and Final Free and Restricted

Percentages for the 1997–98 Marketing

Year

AGENCY: Agricultural Marketing Service,

USDA.

ACTION: Interim final rule with request

for comments.

SUMMARY: This interim final rule

establishes interim and final free and

restricted percentages for domestic

inshell hazelnuts for the 1997–98

marketing year under the Federal

marketing order for hazelnuts grown in

Oregon and Washington. The

percentages allocate the quantity of

domestically produced hazelnuts which

may be marketed in the domestic inshell

market. The percentages are intended to

stabilize the supply of domestic inshell

hazelnuts to meet the limited domestic

demand for such hazelnuts and provide

reasonable returns to producers. This

rule was recommended unanimously by

the Hazelnut Marketing Board (Board),

which is the agency responsible for

local administration of the order.

DATES: Effective January 23, 1998.

Comments which are received by March

23, 1998, 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 in triplicate to the Docket Clerk,

Fruit and Vegetable Programs, AMS,

USDA, Room 2525–S, P.O. Box 96456,

Washington, DC 20090–6456; Fax: (202)

205–6632. Comments should reference

the docket number and the date and

page number of this issue of the Federal

Register and will be available for public

inspection in the Office of the Docket

Clerk during regular business hours.

FOR FURTHER INFORMATION CONTACT:

Teresa L. Hutchinson, Northwest

Marketing Field Office, Fruit and

Vegetable Programs, Agricultural

Marketing Service, USDA, 1220 SW

Third Avenue, Room 369, Portland, OR

97204; telephone: (503) 326–2724, Fax:

(503) 326–7440 or George J. Kelhart,

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)

205–6632. Small businesses may request

information on compliance 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)

205–6632.

SUPPLEMENTARY INFORMATION: This rule

is issued under Marketing Agreement

No. 115 and Order No. 982 (7 CFR part

982), both as amended, regulating the

handling of hazelnuts grown in Oregon

and Washington, hereinafter referred to

as the ‘‘order.’’ The marketing

agreement and order are 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

conformance with Executive Order

12866.

This rule has been reviewed under

Executive Order 12988, Civil Justice

Reform. It is intended that this action

apply to all merchantable hazelnuts

handled during the 1997–98 marketing

year (July 1, 1997, through June 30,

1998). 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 to

review the Secretary’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 rule establishes marketing

percentages which allocate the quantity

of inshell hazelnuts that may be

marketed in domestic markets. The

Board is required to meet prior to

September 20 of each marketing year to

compute its marketing policy for that

year and compute and announce an

inshell trade demand if it determines

that volume regulations would tend to

effectuate the declared policy of the Act.

The Board also computes and

announces preliminary free and

restricted percentages for that year.

The inshell trade demand is the

amount of inshell hazelnuts that

handlers may ship to the domestic

market throughout the marketing

season. The order specifies that the

inshell trade demand be computed by

averaging the preceding three ‘‘normal’’

years’ trade acquisitions of inshell

hazelnuts, rounded to the nearest whole

number. The Board may increase the

three-year average by up to 25 percent,

if market conditions warrant an

increase. The Board’s authority to

recommend volume regulations and the

computations used to determine

released percentages are specified in

section 982.40 of the order.

The National Agricultural Statistics

Service (NASS) estimated hazelnut

production at 40,000 tons for the Oregon

and Washington area.

The majority of domestic inshell

hazelnuts are marketed in October,

November, and December. By

November, the marketing season is well

under way.

The quantity marketed is broken

down into free and restricted

percentages to make available hazelnuts

which may be marketed in domestic

inshell markets (free) and hazelnuts

which must be exported, shelled or
3252 Federal Register / Vol. 63, No. 14 /Thursday, January 22, 1998 /Rules and Regulations

otherwise disposed of (restricted). The

preliminary free percentage releases 80

percent of the adjusted inshell trade

demand. The preliminary free

percentage is expressed as a percentage

of the total supply subject to regulation

(supply) and is based on the preliminary

crop estimate.

At its August 28, 1997, meeting, the

Board computed and announced

preliminary free and restricted

percentages of 8 percent and 92 percent,

respectively. The Board used the NASS

crop estimate of 40,000 tons. The

purpose of releasing only 80 percent of

the inshell trade demand under the

preliminary percentage was to guard

against an underestimate of crop size.

The preliminary free percentage

released 3,003 tons of hazelnuts from

the 1997 supply for domestic inshell

use. The preliminary restricted

percentage of the 1997 supply for export

and kernel markets totaled 34,296 tons.

Under the order, the Board must meet

a second time, on or before November

15, to recommend interim final and

final percentages. The Board uses

current crop estimates to calculate the

interim final and final percentages. The

interim final percentages are calculated

in the same way as the preliminary

percentages and release the remaining

20 percent (to total 100 percent of the

inshell trade demand) previously

computed by the Board. Final free and

restricted percentages may release up to

an additional 15 percent of the average

of the preceding three years’ trade

acquisitions to provide an adequate

carryover into the following season. The

final free and restricted percentages

must be effective by June 1, at least 30

days prior to the end of the marketing

year, June 30. The final free and

restricted percentages can be made

effective earlier, if recommended by the

Board and approved by the Secretary.

Revisions in the marketing policy can be

made until February 15 of each

marketing year, but the inshell trade

demand can only be revised upward,

consistent with section 982.40(e).

The Board met on November 13, 1997,

and reviewed and approved an

amended marketing policy. The Board

recommended that the three-year

average trade acquisition figure of 4,279

tons be increased by 214 tons for market

expansion. The Board also

recommended the establishment of

interim final and final free and

restricted percentages. Interim final

percentages were recommended at 10

percent free and 90 percent restricted.

The interim final percentage makes an

additional 965 tons of inshell hazelnuts

available for the domestic inshell

market, including product for market

expansion. The interim final marketing

percentages are based on the Board’s

final production estimate (42,000 tons)

and release 3,968 tons to the domestic

inshell market from the 1997 supply

subject to regulation. The interim final

restricted percentage resulted in a

restricted obligation of 35,173 tons.

The final free and restricted

percentages were recommended at 12

percent and 88 percent, respectively.

The Board also recommended that the

final percentages be effective on April

30, 1997. The established final

marketing percentages release for

domestic inshell use an additional 642

tons from the supply subject to

regulation. Thus, a total of 4,610 tons of

inshell hazelnuts will be released from

the 1997 supply for domestic inshell

use.

The marketing percentages are based

on the Board’s production estimates and

the following supply and demand

information for the 1997–98 marketing

year:

Tons

Inshell Supply

(1) Total production (Board’s estimate) ........................................... 42,000

(2) Less substandard, farm use

(disappearance) .......................... 2,860

(3) Merchantable production

(Board’s adjusted crop estimate) 39,140

(4) Plus undeclared carryin as of

July 1, 1997, subject to regulation ............................................... 1

(5) Supply subject to regulation

(Item 3 plus Item 4) ..................... 39,141

Inshell Trade Demand

(6) Average trade acquisitions of

inshell hazelnuts for three prior

years ............................................ 4,279

(7) Increase to encourage increased sales (5 percent of Item

6) ................................................. 214

(8) Less declared carryin as of July

1, 1996, not subject to regulation 525

(9) Adjusted Inshell Trade Demand 3,968

(10) 15 percent of the average

trade acquisitions of inshell hazelnuts for three prior years (Item

6) ................................................. 642

(11) Adjusted Inshell Trade Demand plus 15 percent for carryout (Item 9 plus Item 10) ............ 4,610

Percentages Free Restricted

(12) Interim final percentages (Item 9 divided by Item 5) ×

100 ............................. 10 90

(13) Final percentages

(Item 11 divided by

Item 5) × 100 ............. 12 88

In addition to complying with the

provisions of the order, the Board also

considered the Department’s 1982

‘‘Guidelines for Fruit, Vegetable, and

Specialty Crop Marketing Orders’’

(Guidelines) when making its

computations in the marketing policy.

This volume control regulation provides

a method to collectively limit the

supply of inshell hazelnuts available for

sale in domestic markets. The

Guidelines provide that the domestic

inshell market has available a quantity

equal to 110 percent of prior years’

shipments before secondary market

allocations are approved. This provides

for plentiful supplies for consumers and

for market expansion, while retaining

the mechanism for dealing with

oversupply situations. At its November

13, 1997, meeting, the Board

recommended that an increase of 5

percent (214 tons) for market expansion

be included in the inshell trade demand

which was used to compute the interim

percentages. The established final

percentages are based on the final

inshell trade demand, and will make

available an additional 642 tons for

desirable carryout. The total free supply

for the 1997–98 marketing year is 5,135

tons of hazelnuts, which is the final

trade demand of 4,610 tons plus the

declared carryin of 525 tons. This

amount is 120 percent of prior years’

sales and exceeds the goal of the

Guidelines.

Pursuant to requirements set forth in

the Regulatory Flexibility Act (RFA), the

Agricultural Marketing Service (AMS)

has considered the economic impact of

this rule 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.

There are approximately 1,000

producers of hazelnuts in the

production area and approximately 23

handlers subject to regulation under the

marketing order. Small agricultural

producers have been defined by the

Small Business Administration (13 CFR

121.601) as those having annual receipts

of less than $500,000, and small

agricultural service firms are defined as

those whose annual receipts are less

than $5,000,000. Using these criteria,

virtually all of the producers are small

agricultural producers and an estimated

20 of the 23 handlers are small
Federal Register / Vol. 63, No. 14 /Thursday, January 22, 1998 /Rules and Regulations 3253

agricultural service firms. Thus, the

great majority of hazelnut producers and

handlers may be classified as small

entities.

Board meetings are widely publicized

in advance of the meetings and are held

in a location central to the production

area. The meetings are open to all

industry members and other interested

persons who are encouraged to

participate in the deliberations and

voice their opinions on topics under

discussion. Thus, Board

recommendations can be considered to

represent the interests of small business

entities in the industry.

Many years of marketing experience

led to the development of the current

volume control procedures. These

procedures have helped the industry

solve its marketing problems by keeping

inshell supplies in balance with

domestic needs. The current volume

control procedures fully supply the

domestic inshell market, provide for

market expansion, and help prevent

oversupplies in that market.

Inshell hazelnuts sold to the domestic

market provide higher returns to the

industry than are obtained from

shelling. The inshell market is inelastic

and is characterized as having limited

demand and being prone to oversupply.

Industry statistics show that total

hazelnut production has varied widely

over the last 10 years, from a low of

13,000 tons in 1989 to a high of 41,000

tons in 1993. Average production has

been around 24,000 tons. While crop

size has fluctuated, the volume

regulations contribute toward orderly

marketing and market stability, and help

moderate the variation in returns for all

growers and handlers, both large and

small. For instance, production in the

shortest crop year (1989) was 53 percent

of the 10-year average (1987–1996).

Production in the biggest crop year

(1996) was 170 percent of the 10-year

average. The percentage releases

provide all handlers with the

opportunity to benefit from the most

profitable domestic inshell market. That

market is available to all handlers,

regardless of handler size.

NASS statistics show that the grower

price per pound has increased steadily

over the last 4 years, from $.28 in 1992

to $.43 in 1996.

The Board discussed the only

alternative to this rule which was not to

regulate. Without any regulations in

effect, the Board believes that the

industry would oversupply the inshell

domestic market. With the 1997

hazelnut crop the largest in history, the

release of 42,000 tons on the domestic

inshell market would cause grower

returns to decrease drastically, and

completely disrupt the market.

While the level of benefits of this

rulemaking are difficult to quantify, the

stabilizing effects of the volume

regulations impact both small and large

handlers positively by helping them

maintain and expand markets even

though hazelnut supplies fluctuate

widely from season to season.

Hazelnuts produced under the order

comprise virtually all of the hazelnuts

produced in the U.S. This production

represents, on average, approximately 3

percent of total U.S. tree nut production

and approximately 3 percent of the

world’s hazelnut production.

This volume control regulation

provides a method for the U.S. hazelnut

industry to limit the supply of domestic

inshell hazelnuts available for sale in

the U.S. Section 982.40 of the order

establishes a procedure and

computations for the Board to follow in

recommending to the Secretary release

of preliminary, interim final, and final

quantities of hazelnuts to be released to

the free and restricted markets each

marketing year. The program results in

plentiful supplies for consumers and for

market expansion while retaining the

mechanism for dealing with oversupply

situations.

Currently, U.S. hazelnut production

can be successfully allocated between

the inshell domestic and secondary

markets. One of the best secondary

markets for hazelnuts is the export

market. Inshell hazelnuts produced

under the marketing order compete well

in export markets because of quality.

Europe, and Germany in particular, is

historically the primary world market

for U.S. produced inshell hazelnuts,

although China was the largest importer

in 1996–97. A third market is for shelled

hazelnuts sold domestically.

Domestically produced kernels

generally command a higher price in the

domestic market than imported kernels.

The industry is continuing its efforts to

develop and expand secondary markets,

especially the domestic kernel market.

Small business entities, both producers

and handlers, benefit from the

expansion efforts resulting from this

program.

There are some reporting,

recordkeeping and other compliance

requirements under the order. The

reporting and recordkeeping burdens

have been accepted by the handlers as

necessary for compliance purposes and

for developing statistical data for

maintenance of the program. The forms

require information which is readily

available from handler records and

which can be provided without data

processing equipment or trained

statistical staff. As with other marketing

order programs, reports and forms are

periodically studied to reduce or

eliminate duplicate information

collection burdens by industry and

public sector agencies. This interim

final rule does not change those

requirements.

The Department has not identified

any relevant Federal rules that

duplicate, overlap or conflict with this

regulation.

Written comments as to the effect of

this action on small business entities

timely received, will be considered

before finalization of this rule.

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.

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 action until 30 days

after publication in the Federal Register

because: (1) The 1997–98 marketing

year began July 1, 1997, and the

percentages established herein apply to

all merchantable hazelnuts handled

from the beginning of the crop year; (2)

handlers are aware of this rule, which

was recommended at an open Board

meeting, and need no additional time to

comply with this rule; and (3) interested

persons are provided a 60-day comment

period in which to respond. All

comments timely received will be

considered prior to finalization of this

action.

List of Subjects in 7 CFR Part 982

Filberts, Hazelnuts, Marketing

agreements, Nuts, Reporting and

recordkeeping requirements.

For the reasons set forth in the

preamble, 7 CFR part 982 is amended as

follows:

PART 982—HAZELNUTS GROWN IN

OREGON AND WASHINGTON

1. The authority citation for 7 CFR

Part 982 continues to read as follows:

Authority: 7 U.S.C. 601–674.

2. Section 982.245 is added to read as

follows:

Note: This section will not appear in the

annual Code of Federal Regulations.
3254 Federal Register / Vol. 63, No. 14 /Thursday, January 22, 1998 /Rules and Regulations

§ 982.245 Free and restricted

percentages—1997–98 marketing year.

(a) The interim final free and

restricted percentages for merchantable

hazelnuts for the 1997–98 marketing

year shall be 10 and 90 percent,

respectively.

(b) On April 30, 1998, the final free

and restricted percentages for

merchantable hazelnuts for the 1997–98

marketing year shall be 12 and 88

percent, respectively.

Dated: January 15, 1998.

Robert C. Keeney,

Deputy Administrator, Fruit and Vegetable

Programs.

[FR Doc. 98–1433 Filed 1–21–98; 8:45 am]

BILLING CODE 3410–02–P

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 997 and 998

[Docket No. FV97–998–3 FIR]

Domestically Produced Peanuts

Handled by Persons Not Subject to

Peanut Marketing Agreement No. 146;

Marketing Agreement No. 146

Regulating the Quality of Domestically

Produced Peanuts

AGENCY: Agricultural Marketing Service,

USDA.

ACTION: Final rule.

SUMMARY: The Department of

Agriculture (Department) is adopting as

a final rule, without change, an interim

final rule which decreased the

assessment rate for the Peanut

Administrative Committee (Committee)

under Marketing Agreement No. 146

(agreement) for the 1997–98 and

subsequent crop years. Authorization to

assess peanut handlers who have signed

the agreement enables the Committee to

incur expenses that are reasonable and

necessary to administer the program.

The Department is also required to

impose an administrative assessment on

farmers’ stock peanuts received or

acquired by handlers who are not

signatory (non-signatory handlers) to the

agreement. Therefore, the assessment

rate established under the agreement

also must be applied to all nonsignatory handlers. The 1997–98 crop

year began July 1 and ends June 30. The

assessment rate will remain in effect

indefinitely unless modified,

suspended, or terminated.

EFFECTIVE DATE: February 23, 1998.

FOR FURTHER INFORMATION CONTACT:

Tammie Bryant or Jim Wendland,

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)

205–6632. Small businesses may request

information on compliance 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)

205–6632.

SUPPLEMENTARY INFORMATION: This rule

is issued pursuant to the requirements

of the Agricultural Marketing

Agreement Act of 1937, as amended (7

U.S.C. 601–674), hereafter referred to as

the ‘‘Act’’; and under Marketing

Agreement No. 146 (7 CFR part 998)

regulating the quality of domestically

produced peanuts.

The Department is issuing this rule in

conformance with Executive Order

12866.

This rule has been reviewed under

Executive Order 12988, Civil Justice

Reform. Farmers’ stock peanuts received

or acquired by non-signatory handlers

and farmers’ stock peanuts received or

acquired by handlers signatory to the

agreement, other than from those

described in §§ 998.31(c) and (d), are

subject to assessments. It is intended

that the assessment rates issued herein

will be applicable to all assessable

peanuts beginning July 1, 1997, and

continuing until amended, suspended,

or terminated. This rule will not

preempt any State or local laws,

regulations, or policies, unless they

present an irreconcilable conflict with

this rule. There are no administrative

procedures which must be exhausted

prior to any judicial challenge to the

provisions of this rule.

This rule adopts as a final rule,

without change, the provisions of an

interim final rule, which decreased the

assessment rate established for the

Committee for the 1997–98 and

subsequent fiscal years from $0.70 to

$0.35 per ton.

The agreement provides authority for

the Committee, with the approval of the

Department, to formulate an annual

budget of expenses and collect

assessments from handlers to administer

the program. Funds to administer the

agreement program are derived from

signatory handler assessments. The

members of the Committee are handlers

and producers of peanuts. They are

familiar with the Committee’s needs and

with the costs of goods and services in

their local areas and, thus, are in a

position to formulate an appropriate

budget and assessment rate. The

assessment rate is formulated and

discussed in public meetings. Thus, all

directly affected persons have an

opportunity to participate and provide

input. The handlers of peanuts who are

directly affected have signed the

marketing agreement authorizing the

expenses that may be incurred and the

imposition of assessments.

For the 1997–98 and subsequent crop

years, the Committee recommended and

the Department approved, an

assessment rate that would continue in

effect from crop year to crop year

indefinitely unless modified,

suspended, or terminated by the

Secretary, upon recommendation and

information submitted by the

Committee or other information

available to the Secretary.

The Committee met on April 30, 1997,

and unanimously recommended 1997–

98 administrative expenditures of

$525,000 and an administrative

assessment rate of $0.35 per net ton of

assessable farmers’ stock peanuts

received or acquired by handlers. The

Committee also voted not to recommend

an assessment rate for indemnification

for handler losses due to aflatoxin

contamination. Adequate funds are

included in the Committee’s

indemnification reserve for such

expenses during the 1997–98 crop year.

In comparison, last year’s budgeted

administrative expenditures were

$1,025,500. Major expenditures

recommended by the Committee for the

1997–98 crop year compared with those

budgeted for 1996–97 (in parentheses)

include: $55,000 for executive salaries

($112,450), $50,000 for clerical salaries

($131,500), $125,000 for field

representatives (3 compliance officers

rather than 7 fieldmen) salaries

($296,700), $18,000 for payroll taxes

($42,000), $65,000 for employee benefits

($148,000), $40,000 for Committee

members travel ($40,000), $5,000 for

staff travel ($5,000), $60,000 for field

representatives travel ($110,000), $9,800

for insurance and bonds ($9,800),

$19,000 for office rent and parking

($46,200), $10,000 for office supplies

and stationery ($14,000), $10,400 for

postage and mailing ($13,200), $11,000

for telephone and telegraph ($15,000),

$6,000 for repairs and maintenance

agreements ($6,000), $10,400 for the

audit fee ($10,400), and $15,800 for the

contingency reserve ($10,250).

The assessment rate recommended by

the Committee was derived by dividing

anticipated expenses by expected

receipts and acquisitions of farmers’

stock peanuts. Farmers’ stock peanuts

received or acquired by handlers

signatory to the agreement, other than

from those described in § 998.31(c) and