[Federal Register Volume 66, Number 44 (Tuesday, March 6, 2001)]
[Proposed Rules]
[Pages 13454-13459]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-5321]


-----------------------------------------------------------------------

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 993

[Docket No. FV01-993-1 PR]


Dried Prunes Produced in California; Undersized Regulation for 
the 2001-02 Crop Year

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: This rule invites comments on changes to the undersized 
regulation for dried prunes received by handlers from producers and 
dehydrators under Marketing Order No. 993 for the 2001-02 crop year. 
The marketing order regulates the handling of dried prunes produced in 
California and is administered locally by the Prune Marketing Committee 
(Committee). This rule would remove the smallest, least desirable of 
the marketable size dried prunes produced in California from human 
consumption outlets and allow handlers to dispose of the undersized 
prunes in such outlets as livestock feed. The Committee estimated that 
this rule would reduce the excess of dried prunes by approximately 
3,400 tons while leaving sufficient prunes to fulfill foreign and 
domestic trade demand.

DATES: Comments received by April 16, 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, 
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: <a href="/cdn-cgi/l/email-protection#274a484645094348444c4253444b42554c675254434609404851"><span class="__cf_email__" data-cfemail="c3aeaca2a1eda7aca0a8a6b7a0afa6b1a883b6b0a7a2eda4acb5">[email protected]</span></a>. 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, or can be viewed at: http://www.ams.usda.gov/fv/moab.html.

FOR FURTHER INFORMATION CONTACT: Richard P. Van Diest, Marketing 
Specialist, 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

[[Page 13455]]

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: <a href="/cdn-cgi/l/email-protection#a5efc4dc8be2d0c0d7c7c0d7e5d0d6c1c48bc2cad3"><span class="__cf_email__" data-cfemail="c48ea5bdea83b1a1b6a6a1b684b1b7a0a5eaa3abb2">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement and Order No. 993, both as amended (7 CFR part 993), 
regulating the handling of dried prunes in California, 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. This rule is not intended to have retroactive effect. 
This proposal 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 proposal invites comments on changes to the undersized 
regulation in Sec. 993.49(c) of the prune marketing order for the 2001-
02 crop year for supply management purposes. The regulation removes 
prunes passing through specified screen openings. For French prunes, 
the screen opening would be increased from \23/32\ to \24/32\ of an 
inch in diameter; and for non-French prunes, the opening would be 
increased from \28/32\ to \30/32\ of an inch in diameter. This rule 
would remove the smallest, least desirable of the marketable size dried 
prunes produced in California from human consumption outlets. This rule 
would be in effect from August 1, 2001, through July 31, 2002, and was 
unanimously recommended by the Committee at a November 29, 2000, 
meeting.
    Section 993.19b of the prune marketing order defines undersized 
prunes as prunes which pass freely through a round opening of a 
specified diameter. Section 993.49(c) of the prune marketing order 
establishes an undersized regulation of \23/32\ of an inch for French 
prunes and \28/32\ of an inch for non-French prunes. These diameter 
openings have been in effect for quality control purposes. Section 
993.49(c) also provides that the Secretary upon a recommendation of the 
Committee may establish larger openings for undersized dried prunes 
whenever it is determined that supply conditions for a crop year 
warrant such regulation. Section 993.50(g) states in part: ``No handler 
shall ship or otherwise dispose of, for human consumption, the quantity 
of prunes determined by the inspection service pursuant to 
Sec. 993.49(c) to be undersized prunes.'' Pursuant to Sec. 993.52 
minimum standards, pack specifications, including the openings 
prescribed in Sec. 993.49(c), may be modified by the Secretary on the 
basis of a recommendation of the Committee or other information.
    Pursuant to the authority in Sec. 993.52 of the order, Sec. 993.400 
modifies the undersized prune openings prescribed in Sec. 993.49(c) to 
permit openings of \23/32\ or \24/32\ of an inch for French prunes and 
\28/32\ or \30/32\ of an inch for non-French prunes.
    During the 1974-75 and 1977-78 crop years, the undersized prune 
regulation was established by the Department at \23/32\ of an inch in 
diameter for French prunes and \28/32\ of an inch in diameter for non-
French prunes. These diameter openings were established in 
Secs. 993.401 and 993.404, respectively (39 FR 32733, September 11, 
1974; and 42 FR 49802, September 28, 1977). In addition, the Committee 
recommended and the Department established volume regulation 
percentages during the 1974-75 crop year with an undersized regulation 
at the aforementioned 23/32 and \28/32\ inch diameter screen sizes. 
During the 1975-76 and 1976-77 crop years, the undersized prune 
regulation was established at \24/32\ of an inch for French prunes and 
\30/32\ of an inch for non-French prunes. These diameter openings were 
established in Secs. 993.402 and 993.403 respectively (40 FR 42530, 
September 15 1975; and 41 FR 37306, September 3, 1976). The prune 
industry had an excess supply of prunes--particularly small size 
prunes. Rather than recommending volume regulation percentages for the 
1975-76, 1976-77, and 1977-78 crop years, the Committee recommended the 
establishment of an undersized prune regulation applicable to all 
prunes received by handlers from producers and dehydrators during each 
of those crop years.
    The objective of the undersized prune regulations during each of 
those crop years was to preclude the use of small prunes in 
manufactured prune products such as juice and concentrate. Handlers 
could not market undersized prunes for human consumption, but could 
dispose of them in nonhuman outlets such as livestock feed.
    With these experiences as a basis, the marketing order was amended 
on August 1, 1982, establishing the continuing quality-related 
regulation for undersized French and non-French prunes under 
Sec. 993.49(c). That regulation has removed from the marketable supply 
those prunes which are not desirable for use in prune products.
    As in the 1970's, the prune industry is currently experiencing an 
excess supply of prunes. During the 1998-99 crop year, an undersized 
prune regulation was established at \24/32\ of an inch for French 
prunes, and \30/32\ of an inch for non-French prunes. These diameter 
openings were established in Sec. 993.405 (63 FR 20058, April 23, 
1998). With larger than desired carryin inventories and a 1999-2000 
prune crop of about 172,000 natural condition tons, the Committee 
unanimously recommended continuing with an undersized prune regulation 
at \24/32\ of an inch in diameter for French prunes and \30/32\ of an 
inch in diameter for non-French prunes. These diameter openings were 
established in Sec. 993.406 (64 FR 23759, May 4, 1999) and made 
effective from August 1, 1999, through July 31, 2000. With larger than 
desired carryin inventories and a 2000-01 prune crop of about 203,000 
natural condition tons, the Committee unanimously recommended 
continuing with an undersized prune regulation at \24/32\ of an inch in 
diameter for French prunes and \30/32\ of an inch in diameter for non-
French prunes. These diameter openings were established in Sec. 993.407 
(65 FR 29945, May 10, 2000) and made effective from August 1, 2000, 
through July 31, 2001.
    For the 1998-99 crop year, the carryin inventory level reached a 
record high of

[[Page 13456]]

126,485 natural conditions tons. Excessive inventories tend to dampen 
producer returns, and cause weak marketing conditions. The carryin for 
the 1999-2000 crop year was reduced to 59,944 natural condition tons. 
This reduction was due to the low level of salable production in 1998-
99 (about 102,521 natural condition tons and 50 percent of a normal 
size crop) and the undersized prune regulation. The carryin for the 
2000-01 crop increased to 65,131 natural condition tons. This increase 
was due to a larger crop size of about 172,000 natural condition tons 
and reduced shipments during the 1999-2000 crop year. According to the 
Committee, the desired inventory level to keep trade distribution 
channels full while awaiting the new crop has ranged between 35,353 and 
42,071 natural condition tons since the 1996-97 crop year, while the 
actual inventory has ranged between 59,944 and 126,485 natural 
condition tons since that year. The desired inventory level for early 
season shipments fluctuates from year-to-year depending on market 
conditions.
    At its meeting on November 29, 2000, the Committee unanimously 
recommended continuing an undersized prune regulation at \24/32\ of an 
inch in diameter for French prunes and \30/32\ of an inch in diameter 
for non-French prunes during the 2001-02 crop year for supply 
management purposes. This regulation would be in effect from August 1, 
2001, through July 31, 2002.
    The Committee estimated that there would be an excess of about 
41,476 natural condition tons of dried prunes as of July 31, 2001. This 
proposed rule would continue to remove primarily small-sized prunes 
from human consumption channels, consistent with the undersized prune 
regulation that was implemented for the 1998-99, 1999-2000, and 2000-01 
crop years. It is estimated that approximately 3,400 natural condition 
tons of small prunes would be removed from human consumption channels 
during the 2001-02 crop year as a result of this rule. This would leave 
sufficient prunes to fill domestic and foreign trade demand during the 
2001-02 crop year, and provide an adequate carryout on July 31, 2002, 
for early season shipments until the new crop is available for 
shipment. According to the Committee, the desired inventory level to 
keep trade distribution channels full while awaiting the 2001-02 crop 
is about 41,000 natural condition tons.
    In its deliberations, the Committee reviewed statistics reflecting: 
(1) A worldwide prune demand which has been relatively stable at about 
260,000 tons; (2) a worldwide oversupply that is expected to continue 
growing this century (estimated at 299,420 natural condition tons by 
the year 2005; (3) a continuing oversupply situation in California 
caused by increased production from increased plantings and higher 
yields per acre (between the 1990-91 and 2000-01 crop years, the yields 
ranged from 1.2 to 2.6 versus a 10-year average of 2.1 tons per acre); 
and (4) California's continued excess inventory situation. The 
production of these small sizes ranged from 1,335 to 8,778 natural 
condition tons during the 1990-91 through the 1999-2000 crop years. The 
Committee concluded that it has to continue utilizing supply management 
techniques to accelerate the return to a balanced supply/demand 
situation in the interest of the California dried prune industry. The 
proposed changes to the undersized regulation for the 2001-02 crop year 
are the result of these deliberations, and the Committee's desire to 
gradually bring supplies in line with market needs.
    The industry's oversupply situation is expected to continue over 
the next few years due to new prune plantings in recent years with 
higher yields per acre. These plantings have a higher tree density per 
acre than the older prune plantings. During the 1990-91 crop year, the 
non-bearing acreage totaled 5,900 acres; but by 1998-99, the non-
bearing acreage had quadrupled to more than 26,000 acres. The non-
bearing acreage has subsequently been reduced to 22,000 acres during 
the 1999-2000 crop year. The 1996-97 through 1999-2000 yields have 
ranged from 1.2 to 2.6 tons per acre. Over the last 10-years, the 
average was 2.1 tons per acre.
    The 2000-01 dried prune crop is expected to be 203,000 natural 
condition tons. Another large crop of about 193,000 natural condition 
tons is expected for the 2001-02 crop year, partly because of an 
anticipated increase in bearing acreage.
    The 1997-98 crop year producer prices for the \24/32\ size French 
prunes have been about $40-$50 per ton, about $260-$270 per ton below 
post harvest costs. During the 2000-01 crop year, feedlots are paying 
about $35 to $40 per ton for the \24/32\ size French prunes, which is 
about $270-275 per ton below post harvest costs. The lower producer 
prices are expected to continue as an incentive for production of 
larger size prunes. The larger sizes will help the industry better meet 
the increasing market demand for larger-sized pitted prunes.
    The 1998-99, 1999-2000, and 2000-01 undersized prune rules of \24/
32\ of an inch for French prunes and \30/32\ of an inch for non-French 
prunes have expedited the reduction of small prune inventories, but 
more needs to be done to bring supplies into balance with market 
demand. The excess inventory on July 31, 2000, was 65,131 natural 
condition tons, and about 3,400 natural condition tons of dried prunes 
are expected to be removed from the 2000-01 marketable supply by the 
current undersized regulation. The Committee believes that the same 
undersized regulation also should be implemented during the 2001-02 
crop year to continue reducing the inventories of small prunes, to help 
reduce the expected large 2001-02 prune crop, and more quickly bring 
supplies in line with demand. Attainment of this goal would benefit all 
of the producers and handlers of California prunes.
    The recommended decision of June 1, 1981 (46 FR 29271) regarding 
undersized prunes states that the undersized prune regulation at the 
\23/32\ and \28/32\ inch diameter size openings would be continuous for 
the purposes of quality control even in above parity situations. It 
further states that any change (i.e., increase) in the size of those 
openings would not be for the purpose of establishing a new quality-
related minimum. Larger openings would only be applicable when supply 
conditions warranted the regulation of a larger quantity of prunes as 
undersized prunes. Thus, any regulation prescribing openings larger 
than those in Sec. 993.49(c) should not be implemented when the grower 
average price is expected to be above parity. The season average price 
received by prune growers ranged from 39 percent to 62 percent of 
parity during the 1994 through 1999 seasons. As discussed later, the 
average grower price for prunes during the 2001-02 crop year is not 
expected to be above parity, and implementation of this more 
restrictive undersized regulation would be appropriate in reference to 
parity.
    Section 8e of the Act requires that when certain domestically 
produced commodities, including prunes, are regulated under a Federal 
marketing order, imports of that commodity must meet the same or 
comparable grade, size, quality, or maturity requirements for the 
domestically produced commodity. This action would not impact the dried 
prune import regulation because the action would affect volume control, 
not quality control. The smaller diameter openings of \23/32\ of an 
inch for French prunes and \28/32\ of an inch for non-French prunes 
were implemented to improve product quality. The recommended increases 
to \24/32\ of an inch in diameter for French prunes and \30/32\ of an 
inch in diameter for non-French prunes are for purposes

[[Page 13457]]

of volume control. Therefore, the increased diameters would not be 
applied to imported prunes.
    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 1,250 producers of dried prunes in the 
production area and approximately 22 handlers subject to regulation 
under the marketing 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.
    An updated industry profile shows that 9 out of 22 handlers (41%) 
shipped over $5,000,000 worth of dried prunes and could be considered 
large handlers by the Small Business Administration. Thirteen of the 22 
handlers (59%) shipped under $5,000,000 worth of prunes and could be 
considered small handlers. An estimated 109 producers, or less than 9% 
of the 1,250 total producers, would be considered large growers with 
annual incomes over $500,000. The majority of handlers and producers of 
California dried prunes may be classified as small entities.
    This proposed rule would establish an undersized prune regulation 
of \24/32\ of an inch in diameter for French prunes and \30/32\ of an 
inch in diameter for non-French prunes for the 2001-02 crop year for 
inventory management purposes. This change in regulation would result 
in more of the smaller sized prunes being classified as undersized 
prunes and is expected to benefit producers, handlers, and consumers. 
The larger screen openings currently in place for 2000-01 are expected 
to remove about 3,400 tons of dried prunes from the excess marketable 
supply. The Committee estimated that there will be an excess of about 
41,400 natural condition tons of dried prunes on July 31, 2001. 
Implementation of the larger openings in 2001-02 is expected to reduce 
that surplus by about 3,400 tons.
    Because the benefits and costs of the proposed action would be 
directly proportional to the quantity of \24/32\ screen French prunes 
and \30/32\ screen non-French prunes produced or handled, small 
businesses should not be disproportionately affected by the proposal. 
While variation in sugar content, prune density, and dry-away ratio 
vary from county to county, they also vary from orchard to orchard and 
season to season. In the major producing areas of the Sacramento and 
San Joaquin Valleys (which account for over 99 percent of the state's 
production), the prunes produced are homogeneous enough that the 
proposal should not be viewed as inequitable by large and small 
producers in any area of the State.
    The quantity of small prunes in a lot is not dependent on whether a 
producer or handler is small or large; but is primarily dependent on 
cultural practices, soil composition, and water costs. The cost to 
minimize the quantity of small prunes is similar for small and large 
entities. The anticipated benefits of this rule are not expected to be 
disproportionately greater or lesser for small handlers or producers 
than for large entities. The only additional costs on producers and 
handlers expected from the increased openings would be the disposal of 
additional tonnage (now estimated to be about 3,400 tons) to nonhuman 
consumption outlets. These costs are expected to be minimal and would 
be offset by the benefits derived by the elimination of some of the 
excess supply of small-sized prunes.
    At the November 29, 2000, meeting, the Committee discussed the 
financial impact of this change on handlers and producers. Handlers and 
producers receive higher returns for the larger size prunes. Prunes 
eliminated through the implementation of this rule have very little 
value. As mentioned earlier, the current situation for producers of 
these small sizes is quite bleak with producers losing about $270-$275 
on every ton delivered to handlers. During the 2000-01 crop year, the 
feedlot prices for \24/32\ screen French prunes ranges between $35 and 
$40 per ton. This price is a little lower than the $40-50 price during 
the 1998-99 crop year. The cost of drying a ton of such prunes is $260 
per ton at a 4 to 1 dry-away ratio, transportation is at least $20 per 
ton, and the producer assessment paid to the California Prune Board (a 
body which administers the State marketing order for promotion) is $30 
per ton. The total cost is about $310 per ton which equates to a loss 
of about $270-$275 per ton for every ton of \24/32\ screen French 
prunes produced and delivered to handlers.
    Utilizing data provided by the Committee, the Department has 
evaluated the impact of the proposed undersized regulation change upon 
producers and handlers in the industry. The analysis shows that a 
reduction in the marketable production and handler inventories could 
result in higher season-average prices, which would benefit all 
producers. The removal of the smallest, least desirable of the 
marketable dried prunes produced in California from human consumption 
outlets would eliminate an estimated 3,400 tons of small-sized dried 
prunes during the 2001-02 crop year from the marketplace. This would 
help lessen the negative marketing and pricing effects resulting from 
the excess inventory situation facing the industry. California prune 
handlers reported that they held 65,131 tons of natural condition 
prunes on July 31, 2000, the end of the 1999-2000 crop year. The 65,131 
ton year-end inventory is larger than what is desired for early season 
shipments by the prune industry. The desired inventory level is based 
on an average 12-week supply to keep trade distribution channels full 
while awaiting new crop. Currently, it is about 41,000 natural 
condition tons. This leaves a 2000-01 inventory surplus of about 24,000 
tons. The undersized regulation will help reduce the surplus, but the 
anticipated large 2001-02 prune crop is expected to worsen the supply 
imbalance.
    One of the primary reasons for this proposed rulemaking action is 
that the dried prune industry continues to be plagued by high carryin 
inventories. California prune handlers estimate that 82,286 tons of 
prunes (natural condition) will be inventoried at the end of the 2000-
01 crop year. This will result in a surplus of 41,476 tons over the 
industry's desired carryout of 40,810 tons.
    Increasing the screen openings is an attempt to moderately reduce 
and control the marketable production and carryin inventory. If the 
marketable supply and the carryin inventory are both reduced, then 
prices may be expected to increase. If no action is taken, rising 
production levels, high inventories, and low grower prices will 
continue.
    To assess the impacts that regulation has on the prices growers 
receive for their product, an econometric model has been estimated. The 
two variables of interest in this model are marketable production and 
carryin inventory. Both of the estimated parameters for these variables 
are negative and statistically significant. This provides evidence that

[[Page 13458]]

reducing the marketable supply and the carryin inventory would result 
in higher grower prices. This action would benefit all growers and 
handlers regardless of size.
    Increasing the undersized openings would result in a reduced level 
of marketable production. The Committee estimates that marketable 
production will be reduced by 3,400 tons, or 2.2 percent. If marketable 
production for the 2001-02 crop year is reduced by 2.2 percent, the 
model suggests an increase in prices of approximately 0.9 percent 
compared to taking no action. Although increasing the undersized 
openings will only have a modest effect on marketable production, price 
increases would result. This proposed action would not only help reduce 
the oversupply situation, but improve the quality of the manufactured 
prune products by removing the smaller, less desirable prunes from the 
supply chain.
    Without increasing the undersized openings, the industry could be 
expected to continue to build unwanted inventories. These inventories 
have a depressing effect on grower prices. The econometric model shows 
that, for every 1 percent increase in carryin inventories, a decrease 
in grower prices of 0.12 percent occurs.
    This action would not result in a shortage of prunes for either 
retail or food service outlets. Inventories are expected to remain 
above desired levels and marketable production is anticipated to be in 
excess of demand. Additionally, this action is not expected to have a 
significant impact on retail or food service outlet prices.
    In summary, increasing the openings in the sizing screens may 
reduce the volume of marketable production and decrease the carryin 
inventory. If the rule change accomplishes these two intended effects, 
the model shows that season-average prices will be slightly higher than 
if the screen openings remain unchanged. A higher season-average price 
should benefit all producers regardless of size.
    As the marketable dried prune production and surplus prune 
inventories are reduced through this proposal, and producers continue 
to implement improved cultural and thinning practices to produce 
larger-sized prunes, continued improvement in producer returns is 
expected.
    For the 1991-92 through the 1999-2000 crop years, the season 
average price received by the producers ranged from a high of $1,140 
per ton to a low of $778 per ton during the 1998-99 crop year. The 
season average price received by producers during that 9-year period 
ranged from 39 percent to 68 percent of parity. Based on available data 
and estimates of prices, production, and other economic factors, the 
season average producer price for 2000-01 season is expected to be 
about the same as the 1999-2000 season average producer price of $892 
per ton, or about 42 percent of parity.
    The Committee discussed alternatives to this change, including 
making no changes to the undersized prune regulation and allowing 
market dynamics to foster prune inventory adjustments through lower 
prices on the smaller prunes. While reduced grower prices for small 
prunes are expected to contribute toward a slow reduction in dried 
prune inventories, the Committee believed that the undersized rule 
change is needed to expedite that reduction. With the excess tonnage of 
dried prunes, the Committee also considered establishing a reserve pool 
and diversion program to reduce the oversupply situation. A third 
alternative discussed was to advance to a \25/32\ screen undersized 
regulation for French prunes. However, handlers expressed concern that 
this would reduce the amount of manufacturing prunes available for the 
manufacture of prune juice and concentrate. The first two initiatives 
were not supported because they would not specifically eliminate the 
smallest, least valuable prunes, which are in oversupply. Instead, the 
reserve pool and diversion program would eliminate larger size prunes 
from human consumption outlets. Reserve pools for prunes have 
historically been implemented on dried prunes regardless of the size of 
the prunes. While the marketing order also allows handlers to remove 
the larger prunes from the pool by replacing them with small prunes and 
the value difference in cash, this exchange would be cumbersome and 
expensive to administer compared to the proposal.
    Section 8e of the Act requires that when certain domestically 
produced commodities, including prunes, are regulated under a Federal 
marketing order, imports of that commodity must meet the same or 
comparable grade, size, quality, or maturity requirements for the 
domestically produced commodity. This action does not impact the dried 
prune import regulation because the action to be implemented is for 
inventory management, not quality control purposes. The smaller 
diameter openings of \23/32\ of an inch for French prunes and \28/32\ 
of an inch for non-French prunes were implemented to improve product 
quality. The recommended increases to \24/32\ of an inch in diameter 
for French prunes and \30/32\ of an inch in diameter for non-French 
prunes are for purposes of inventory management. Therefore, the 
increased diameters would not be applied to imported prunes.
    This action would not impose any additional reporting or 
recordkeeping requirements on either small or large California dried 
prune 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.
    The Department has not identified any relevant Federal rules that 
duplicate, overlap or conflict with this proposed rule.
    In addition, the Committee's meeting was widely publicized 
throughout the prune industry and all interested persons were invited 
to attend the meeting and participate in Committee deliberations on all 
issues. Like all Committee meetings, the November 29, 2000, meeting was 
a public meeting and all entities, both large and small, were able to 
express views on this issue. The Committee itself is composed of 
twenty-two members. Seven are handlers, fourteen are producers, and one 
is a public member. Moreover, the Committee and its Supply Management 
Subcommittee have been monitoring the supply situation, and this 
proposed rule reflects their deliberations completely. 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.
    The Committee requested a comment period through April 16, 2001, to 
allow interested persons to respond to this proposal. This longer 
comment period is needed to give the Committee more time to observe the 
bloom period during the spring and industry shipment trends during the 
year and allow sufficient time to comment to the Department concerning 
any changes that are deemed appropriate. All written comments timely 
received will be considered before a final determination is made on 
this matter.

List of Subjects in 7 CFR Part 993

    Marketing agreements, Plums, Prunes, Reporting and recordkeeping 
requirements.


[[Page 13459]]


    For the reasons set forth in the preamble, 7 CFR part 993 is 
proposed to be amended as follows:

PART 993--DRIED PRUNES PRODUCED IN CALIFORNIA

    1. The authority citation for 7 CFR part 993 continues to read as 
follows:

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

    Note: This section will not appear in the Code of Federal 
Regulations.


    A new Sec. 993.408 is added to read as follows:


Sec. 993.408  Undersized prune regulation for the 2001-02 crop year.

    Pursuant to Secs. 993.49(c) and 993.52, an undersized prune 
regulation for the 2001-02 crop year is hereby established. Undersized 
prunes are prunes which pass through openings as follows: for French 
prunes, \24/32\ of an inch in diameter; for non-French prunes, \30/32\ 
of an inch in diameter.

    Dated: February 28, 2001.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 01-5321 Filed 3-5-01; 8:45 am]
BILLING CODE 3410-02-U


</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>