13396 Federal Register / Vol. 66, No. 44 / Tuesday, March 6, 2001 / Rules and Regulations

regulations from 227⁄32 inches to 229⁄32

inches, and will allow handlers the

option of packing slightly larger

tomatoes in a 6x6 container. With this

increased flexibility, handlers will be

able to better meet consumer demand

for larger tomatoes, while providing

greater returns to growers. The

Committee unanimously recommended

this change. Authority for this action is

provided in § 966.52.

If handlers take advantage of the

increased packing flexibility, they

would incur direct costs associated with

the purchase of new sizing belts. Sizing

belts convey and size fruit during the

packing process. Depending on the

amount of use, sizing belts can last a

season or may need to be replaced two

to three times a season. Estimated prices

associated with these purchases could

range from $450.00 for a small handler

to $19,000 for very large handlers.

While there are short-term costs

associated with the maximum diameter

of the 6x6 sizing designation, the

benefits are expected to outweigh the

costs. Moreover, changing sizing belts is

a routine action since they have to be

regularly replaced depending on use.

These costs are expected to be minimal

relative to the benefits expected, and in

relation to normal operating costs and

procedures.

A study conducted by Dr. John J.

VanSickle at the University of Florida

estimates that a shift of 1 percent of 5x6

tomatoes into the smaller size categories

would increase the prices for 5x6-size

tomatoes by .25 percent. For 6x6’s, the

price could increase by .15 percent. The

increase in price would occur in

response to consumer demand for packs

with slightly larger tomatoes.

This change is designed to provide

handlers with more flexibility as to how

sizes are packed. Because of this,

handlers can choose to continue to pack

as they have without making any

adjustments due to this rule change.

Purchasing new equipment is not

necessary to remain in compliance with

order provisions. Therefore, this rule

places the decision with the individual

handler as to whether the costs are

outweighed by the benefits.

Individual seasons and different

periods during the same season can

present a fair amount of variability in

production and size. This change

provides handlers with some additional

flexibility when packing for size to

allow handlers to make some

adjustments in order to maximize

returns and to service customer

demand. This rule provides the

opportunity for handlers to make

adjustments based on market

conditions. This should have a positive

effect on returns.

The Committee recommended these

changes to improve the marketing of

Florida tomatoes. The opportunities and

benefits of this rule are expected to be

equally available to all tomato handlers

and growers regardless of their size of

operation. This action will have a

beneficial impact on producers and

handlers since it will allow tomato

handlers more flexibility in making

tomatoes available to meet consumer

needs consistent with crop and market

conditions.

The Committee discussed alternatives

to this recommendation, including

leaving the regulations as currently

issued. All Committee members agreed

that this change would be helpful in

improving pack appearance and in

providing handlers some additional

flexibility. Therefore, the Committee

voted to make this change rather than

leave the size designation for 6X6

unchanged.

This rule will not impose any

additional reporting or recordkeeping

requirements on either small or large

tomato 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, as noted in the initial

regulatory flexibility analysis, the

Department has not identified any

relevant Federal rules that duplicate,

overlap or conflict with this rule.

Further, the Committee’s meeting was

widely publicized throughout the

tomato industry and all interested

persons were invited to attend the

meeting and participate in Committee

deliberations. Like all Committee

meetings, the September 8, 2000,

meeting was a public meeting and all

entities, both large and small, were able

to express their views on this issue.

Also, the Committee has a number of

appointed subcommittees to review

certain issues and make

recommendations to the Committee.

The Committee’s Marketing

Subcommittee met on August 21, 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.

An interim final rule concerning this

action was published in the Federal

Register on November 6, 2000. Copies of

the rule were mailed by the Committee’s

staff to all Committee members and

tomato handlers. In addition, the Office

of the Federal Register made the rule

available through the Internet. That rule

provided for a 60-day comment period,

which ended January 5, 2001. No

comments were received.

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/

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

Committee’s recommendation, and

other information, it is found that

finalizing the interim final rule, without

change, as published in the Federal

Register (65 FR 66492, November 6,

2000) will tend to effectuate the

declared policy of the Act.

List of Subjects in 7 CFR Part 966

Marketing agreements, Reporting and

recordkeeping requirements, Tomatoes.

PART 966—TOMATOES GROWN IN

FLORIDA

Accordingly, the interim final rule

amending 7 CFR part 966 which was

published at 65 FR 66492 on November

6, 2000, is adopted as a final rule

without change.

Dated: February 28, 2001.

Kenneth C. Clayton,

Acting Administrator, Agricultural Marketing

Service.

[FR Doc. 01–5317 Filed 3–5–01; 8:45 am]

BILLING CODE 3410–02–P

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 982

[Docket No. FV01–982–1 IFR]

Hazelnuts Grown in Oregon and

Washington; Establishment of Interim

and Final Free and Restricted

Percentages for the 2000–2001

Marketing Year

AGENCY: Agricultural Marketing Service,

USDA.

ACTION: Interim final rule with request

for comments.

SUMMARY: This rule establishes interim

and final free and restricted percentages

for domestic inshell hazelnuts for the

2000–2001 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

Federal Register / Vol. 66, No. 44 / Tuesday, March 6, 2001 / Rules and Regulations 13397

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 marketing

order.

DATES: Effective Date: This interim final

rule is effective March 7, 2001 through

June 30, 2001.

Applicability Date: This interim final

rule applies during the period July 1,

2000, through June 30, 2001. Comments

received by May 7, 2001 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, 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 available for public inspection in

the Office of the Docket Clerk during

regular business hours, or can viewed

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

moab.html.

FOR FURTHER INFORMATION CONTACT:

Teresa L. Hutchinson, Northwest

Marketing Field Office, Marketing Order

Administration Branch, Fruit and

Vegetable Programs, AMS, USDA, 1220

SW Third Avenue, suite 385, Portland,

OR 97204; telephone: (503) 326–2724,

Fax: (503) 326–7440; or George J.

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, room 2525–S, P.O. Box

96456, 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 Agreement

No. 115 and Marketing Order No. 982,

both as amended (7 CFR part 982),

regulating the handling of hazelnuts

grown in Oregon and Washington,

hereinafter referred to as the ‘‘order.’’

The order is effective under the

Agricultural Marketing Agreement Act

of 1937, as amended (7 U.S.C. 601–674),

hereinafter referred to as the ‘‘Act.’’

The Department of Agriculture

(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 2000–2001

marketing year (July 1, 2000, through

June 30, 2001). 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 the

percentages are specified in § 982.40 of

the order.

The quantity to be 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

otherwise disposed of by handlers

(restricted). Prior to September 20 of

each marketing year, the Board must

compute and announce preliminary free

and restricted percentages. The

preliminary free percentage releases 80

percent of the inshell trade demand to

the domestic market. The purpose of

releasing only 80 percent of the inshell

trade demand under the preliminary

percentage is to guard against an

underestimate of crop size. 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.

The National Agricultural Statistics

Service (NASS) has estimated hazelnut

production at 25,000 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 Board initially adjusted the crop

estimate down to 24,153 tons by taking

into consideration the average crop

disappearance over the preceding three

years (8.32 percent) and the undeclared

carry-in (1,234 tons.) The Board

computed the adjusted inshell trade

demand of 3,163 tons by taking the

difference between the average of the

past three years’ sales (4,347 tons) and

the declared carry-in from last year’s

crop (1,184 tons.)

The Board computed and announced

preliminary free and restricted

percentages of 10 percent and 90

percent, respectively, at its August 31,

2000, meeting. The Board computed the

preliminary free percentage by

multiplying the adjusted trade demand

by 80 percent and dividing the result by

the adjusted crop estimate (3,163 tons ×

80 percent/24,153 tons = 10 percent.)

The preliminary free percentage thus

initially released 2,530 tons of hazelnuts

from the 2000 supply for domestic

inshell use, and the restricted

percentage withheld 21,738 tons for the

export and kernel market.

Under the order, the Board must meet

again on or before November 15 to

recommend interim final and final

percentages. The Board uses current

crop estimates to calculate 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

13398 Federal Register / Vol. 66, No. 44 / Tuesday, March 6, 2001 / Rules and Regulations

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 (i.e.,

desirable carryout). The order requires

that the final free and restricted

percentages shall be effective 30 days

prior to the end of the marketing year,

or 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 § 982.40(e).

The Board met on November 14, 2000,

and reviewed and approved an

amended marketing policy and

recommended the establishment of

interim final and final free and

restricted percentages. The interim final

free and restricted percentages were

recommended at 14 percent free and 86

percent restricted. Final percentages,

which included an additional 15

percent of the average of the preceding

three-years’ trade acquisitions for

desirable carry-out, were recommended

at 17 percent free and 83 percent

restricted effective May 1, 2001. The

final free percentage releases 3,815 tons

of inshell hazelnuts from the 2000

supply for domestic use.

The final marketing percentages are

based on the Board’s final production

estimate and the following supply and

demand information for the 2000–2001

marketing year:

Tons

Inshell Supply:

(1) Total production (Board’s estimate) ............................................................................................................................................ 23,000

(2) Less substandard, farm use (disappearance) ............................................................................................................................ 1,914

(3) Merchantable production (Board’s adjusted crop estimate; Item 1 minus Item 2) .................................................................... 21,086

(4) Plus undeclared carry-in as of July 1, 2000, subject to regulation ............................................................................................ 1,233

(5) Supply subject to regulation (Item 3 plus Item 4) ...................................................................................................................... 22,319

Inshell Trade Demand:

(6) Average trade acquisitions of inshell hazelnuts for three prior years ........................................................................................ 4,347

(7) Less declared carry-in as of July 1, 2000, not subject to regulation ......................................................................................... 1,184

(8) Adjusted Inshell Trade Demand (Item 6 minus Item 7) ............................................................................................................. 3,163

(9) Desirable carry-out on August 31, 2001 (15 percent of Item 6) ................................................................................................ 652

(10) Adjusted Inshell Trade Demand plus desirable carry-out (Item 8 plus Item 9) ....................................................................... 3,815

Percentages Free Restricted

(11) Interim final percentages (Item 8 divided by Item 5) × 100 ............................................................................. 14 86

(12) Final percentages (Item 10 divided by Item 5) × 100 ...................................................................................... 17 83

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. The established

final percentages are based on the final

inshell trade demand, and will make

available an additional 652 tons for

desirable carry-out effective May 1,

2001. The total free supply for the 2000–

2001 marketing year is 4,999 tons of

hazelnuts, which is the sum of the final

trade demand of 4,347 tons and the 652

ton desirable carry-out. This amount is

115 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,

the 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. Thus, both statutes have small

entity orientation and compatibility.

There are approximately 800

producers of hazelnuts in the

production area and approximately 22

handlers subject to regulation under the

order. Small agricultural producers have

been defined by the Small Business

Administration (13 CFR 121.201) 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 19 of the 22

handlers are small agricultural service

firms. In view of the foregoing, it can be

concluded that the 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 while

preventing 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

15,500 tons in 1998 to a high of 47,000

Federal Register / Vol. 66, No. 44 / Tuesday, March 6, 2001 / Rules and Regulations 13399

tons in 1997. Average production has

been around 29,800 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

producers and handlers, both large and

small. For instance, production in the

shortest crop year (1998) was 55 percent

of the 10-year average (1990–1999).

Production in the biggest crop year

(1997) was 158 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.

As an alternative, the Board discussed

not regulating the 2000–2001 hazelnut

crop. However, without any regulations

in effect, the Board believes that the

industry would oversupply the inshell

domestic market.

While the level of benefits of this

rulemaking is 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 United States. This

production represents, on average, less

than 5 percent of total U.S. tree nut

production, and less than 5 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 United States. 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. A

third market is for shelled hazelnuts

(kernels) 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

are necessary for compliance purposes

and for developing statistical data for

maintenance of the program. The

information collection requirements

have been previously approved by the

Office of Management and Budget under

OMB No. 0581–0178. 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

reviewed to reduce or eliminate

duplicate information collection

burdens by industry and public sector

agencies. This interim final rule does

not change those requirements. In

addition, the Department has not

identified any relevant Federal rules

that duplicate, overlap or conflict with

this regulation.

Further, the Board’s meeting was

widely publicized throughout the

hazelnut industry and all interested

persons were invited to attend the

meeting and participate in Board

deliberations. Like all Board meetings,

the November 14, 2000, meeting was a

public meeting and all entities, both

large and small, were able to express

their views on this issue. 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: 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.

This rule invites comments on the

establishment of interim and final free

and restricted percentages for the 2000–

2001 marketing year under the hazelnut

order. Any comments received will be

considered prior to 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 2000–2001 marketing

year began July 1, 2000, 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, and 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 982.248 is added to read as

follows:

Note: This section will not be published in

the annual Code of Federal Regulations.

§ 982.248 Free and restricted

percentages—2000–2001 marketing year.

(a) The interim final free and

restricted percentages for merchantable

hazelnuts for the 2000–2001 marketing

year shall be 14 and 86 percent,

respectively.

(b) On May 1, 2001, the final free and

restricted percentages for merchantable

hazelnuts for the 2000–2001 marketing

year shall be 17 and 83 percent,

respectively.

Dated: February 28, 2001.

Kenneth C. Clayton,

Acting Administrator, Agricultural Marketing

Service.

[FR Doc. 01–5319 Filed 3–5–01; 8:45 am]

BILLING CODE 3410–02–P