Source: https://www.federalregister.gov/articles/2008/03/03/E8-4016/walnuts-grown-in-california-order-amending-marketing-order-and-agreement-no-984
Timestamp: 2015-05-22 14:34:59
Document Index: 56263835

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Federal Register | Walnuts Grown in California; Order Amending Marketing Order and Agreement No. 984
Publication Date: Monday, March 03, 2008
Dates: This rule is effective April 2, 2008, except for amendments to Sec. Sec. 984.7, 984.13, 984.14, 984.15, 984.21, 984.22, 984.42, 984.46, 984.48, 984.50, 984.51, 984.52, 984.59, 984.67, 984.69, 984.70, 984.71, 984.73 and 984.89, which are effective September 1, 2008.
-11340 (13 pages)
Shorter URL: https://federalregister.gov/a/E8-4016 Related Topics
This rule is effective April 2, 2008, except for amendments to §§ 984.7, 984.13, 984.14, 984.15, 984.21, 984.22, 984.42, 984.46, 984.48, 984.50, 984.51, 984.52, 984.59, 984.67, 984.69, 984.70, 984.71, 984.73 and 984.89, which are effective September 1, 2008.
Upon the basis of evidence introduced at the hearing and the record thereof, the Administrator of AMS on March 19, 2007, filed with the Hearing Clerk, U.S. Department of Agriculture, a Recommended Decision and Opportunity to File Written Exceptions thereto by April 16, 2007. Fifteen exceptions were filed during the exception period.
1. Change the marketing year from August 1 through July 31 to September 1 through August 31. This will amend § 984.7, Marketing year, and will result in conforming changes being made to § 984.36, Term of office, and § 984.48, Marketing estimates and recommendations.
2. Specify that the act of packing walnuts is considered a handling function. This will amend § 984.13, To handle, as well as clarify the definition of “pack” in § 984.15 by including the term “shell” as a function of “pack.”
3. (a) Amend all parts of the order that refer to cooperative seats on the Board, redistribute member seats among districts, and provide designated seats for a handler handling 35 percent or more of production, if such handler exists. This will amend § 984.35, Walnut Marketing Board, and § 984.14, Handler.
3. (b) Amend the Board member nomination process to reflect proposed changes in the Board structure, as outlined in 3(a). This will amend § 984.37, Nominations, and § 984.40, Alternate.
4. Require Board nominees to submit a written qualification and acceptance statement prior to selection by USDA. This will amend § 984.39, Qualify by acceptance.
5. Change the name of the Walnut Marketing Board to the California Walnut Board. This will amend § 984.6, Board, and § 984.35, Walnut Marketing Board.
6. Add authority to reestablish districts, reapportion members among districts, and revise groups eligible for representation on the Board. This will add a new paragraph (d) to § 984.35, Walnut Marketing Board.
7. Add percentage requirements to Board quorum and voting requirements, add authority for the Board to vote by “any other means of communication” (including facsimile) and add authority for Board meetings to be held by telephone or by “any other means of communication”, providing that all votes cast at such meetings shall be confirmed in writing. This will amend § 984.45, Procedure, and will result in a conforming change in § 984.48 (a), Marketing estimates and recommendations.
8. Add authority to carry over excess assessment funds. This will amend § 984.69, Assessments.
9. Add authority to accept voluntary financial contributions. This will add a new § 984.70, Contributions.
10. Clarify that members and alternate members may be reimbursed for expenses incurred while performing their duties and that reimbursement includes per diem. This will amend § 984.42, Expenses.
11. Add authority for the Board to appoint more than one inspection service as long as the functions performed by each service are separate and do not duplicate each other. This will amend § 984.51, Inspection and certification of inshell and shelled walnuts.
12. (a) Broaden the scope of the quality control provisions and by adding authority to recommend different regulations for different market destinations. This will amend § 984.50, Grade and size regulations.
12. (b) Add authority that would allow for shelled walnuts to be inspected after having been sliced, chopped, ground, or in any other manner changed from shelled walnuts, if regulations for such walnuts are in effect. This will amend § 984.52, Processing of shelled walnuts.
13. Add authority for marketing promotion and paid advertising. This will amend § 984.46, Research and development.
14. Replace the terms “carryover” with “inventory,” and “mammoth” with “jumbo,” to reflect current day industry practices. This will amend § 984.21, Handler inventory, and § 984.67, Exemption, and will also result in conforming changes being made to § 984.48, Marketing estimates and recommendations, and § 984.71, Reports of handler carryover.
15. (a) Clarify and simplify the interhandler transfer provision, and add authority for the Board to recommend to USDA regulations, including necessary reports, for administrative oversight of such transfers. This will amend § 984.59, Interhandler transfers.
15. (b) Clarify that the Board may require reports from handlers or packers that place California walnuts into the stream of commerce. This will amend § 984.73, Reports of walnut receipts.
16. Update and simplify the language in § 984.22, Trade demand, to state “United States and its territories,” rather than name “Puerto Rico” and “The Canal Zone”.
17. Add language to the order that would acknowledge that the Board may deliberate, consult, cooperate, and exchange information with the California Walnut Commission. Any information sharing would be kept confidential. This will add a new § 984.91, Relationship with the California Walnut Commission.
18. Require that continuance referenda be conducted on a periodic basis to ascertain industry support for the order and add more flexibility in the termination provisions. This will amend § 984.89, Effective time and termination.
Small Business Consideration Back to Top
Small agricultural growers are defined by the Small Business Administration (SBA)(13 CFR 121.201) as those having annual receipts of less than $750,000. Small agricultural service firms, which include handlers regulated under the order, were defined at the time of the hearing as those with annual receipts of less than $5,000,000. The definition of small agricultural service firm has subsequently changed to one with annual receipts of $6,500,000.
Walnut Industry Background and Overview Back to Top
Designation of More Than One Inspection Service Back to Top
Annual Walnut Inspection Costs Using DFA, 2004-05 Crop Year Back to Top
Largest Handlers
Additional Large Handlers
The amendment also specifies that “each service shall be separate so as to not conflict with each other”, meaning that each inspection service will offer distinct and different services (i.e. PIQ vs. lot inspections) so that the integrity of both programs will be maintained.
Walnut Inspection Cost Comparison: DFA vs. USDA for Top 7 Handlers Back to Top
Largest 4 Handlers
Additional 3 large handlers
Largest 7 Handlers
Inspection of Sliced, Chopped or Ground Shelled Walnuts Back to Top
While this amendment may result in some cost increases associated with administration and oversight of new quality regulations, it is also expected that some handlers may benefit from lower inspection costs if the inspection requirements for specific markets were modified. Any costs associated with the implementation of this amendment are expected to be outweighed by the overall benefits accrued to the industry.
Marketing Promotion and Paid Advertising Back to Top
Impact of Remaining Amendments Back to Top
Conforming changes were made to § 984.36, Term of office and § 984.48, Marketing estimates and recommendations, so that Board member terms of office and marketing estimates are calculated according to the modified marketing year. This amendment is not expected to result in any increases in costs to growers or handlers.
This amendment adds authority to reestablish districts, to reapportion members among districts, and to revise groups eligible for representation on the Board.The intent of this amendment is to provide the Board with a tool to more efficiently respond to the changing character of the California walnut industry. In recommending any such changes, the following will be considered: (1) Shifts in acreage within districts and within the production area during recent years; (2) the importance of new production in its relation to existing districts; (3) the equitable relationship between Board apportionment and districts; (4) changes in industry structure and/or the percentage of crop represented by various industry entities resulting in the existence of two or more handlers handling 35 percent or more of the crop; and (5) other relevant factors. This amendment is not expected to result in any increases in costs to growers or handlers.
This amendment broadens the scope of the quality control provisions of the order by adding authority to recommend different regulations for different market destinations. Witnesses emphasized the usefulness in terms of market development of being able to establish different regulations for individual markets and/or regions. Witnesses stated that allowing the Board to make such recommendations will help the walnut industry adapt to changing international market conditions. Updating Order Terminology
This amendment replaces the terms “carryover” with “inventory,” and “mammoth” with “jumbo,” to reflect current day industry procedures. Conforming changes were made to the § 984.48, Marketing estimates and recommendations, and § 984.71, Reports of handler carryover, sections of the order so that order terminology is consistent throughout.
This amendment updates and simplifies the language in § 984.22, Trade demand, to state “United States and its territories,” rather than name “Puerto Rico” and “The Canal Zone”. Witnesses explained that the reference to “Puerto Rico” and “The Canal Zone” in the order is outdated and should be updated to reference “United States and its territories”.
Order Amending the Order Regulating Walnuts Grown in California Back to Top
(b) Additional findings. The effective date for the amendments shall be 30 days after publication in the Federal Register, except for §§ 984.7, 984.13, 984.14, 984.15, 984.21, 984.22, 984.42, 984.46, 984.48, 984.50, 984.51, 984.52, 984.59, 984.67, 984.69, 984.70, 984.71, 984.73 and 984.89, which are effective September 1, 2008.
Order Relative to Handling of Walnuts Grown in California Back to Top
2.Revise § 984.6 to read as follows: § 984.6 Board.
Board means the California Walnut Board established pursuant to § 934.35.
3.Revise § 984.7 to read as follows: § 984.7 Marketing year.
4.Revise § 984.13 to read as follows: § 984.13 To handle.
5.Revise § 984.14 to read as follows: § 984.14 Handler.
6.Revise § 984.15 to read as follows: § 984.15 Pack.
7.Revise § 984.21 to read as follows: § 984.21 Handler inventory.
8.Revise § 984.22 to read as follows: § 984.22 Trade demand.
9.Revise § 984.35 to read as follows: § 984.35 California Walnut Board.
10.Revise § 984.37 to read as follows: § 984.37 Nominations.
11.In § 984.38, the suspension of August 20, 2005 (70 FR 50153), is lifted effective April 2, 2008. 12.Revise § 984.38 to read as follows: § 984.38 Eligibility.
No person shall be selected or continue to serve as a member or alternate to represent one of the groups specified in § 984.35(a)(1) through (6) or § 984.38(b)(1) through (6), unless he or she is engaged in the business he or she is to represent, or represents, either in his or her own behalf or as an officer or employee if the business unit engaged in such business. Also, each member or alternate member representing growers in District 1 or District 2 shall be a grower, or officer or employee of the group he or she is to represent.
13.Revise § 984.39 to read as follows: § 984.39 Qualify by acceptance.
14.Revise § 984.40 to read as follows: § 984.40 Alternate.
15.Revise § 984.42 to read as follows: § 984.42 Expenses.
16.Amend § 984.45 by revising paragraphs (b) and (c) and adding paragraph (d) to read as follows: § 984.45 Procedure.
(b) All decisions of the Board, except where otherwise specifically provided (see § 984.35(d)), shall be by a sixty-percent (60%) super-majority vote of the members present. A quorum of six members, or the equivalent of sixty percent (60%) of the Board, shall be required for the conduct of Board business. (c) The Board may vote by mail or telegram, or by any other means of communication, upon due notice to all members. The Board, with the approval of the Secretary, shall prescribe the minimum number of votes that must be cast when voting is by any of these methods, and any other procedures necessary to carry out the objectives of this paragraph.
17.Revise § 984.46 to read as follows: § 984.46 Research and development.
18.Amend § 984.48 by revising paragraphs (a) introductory text, (a)(2), (4), and (5) to read as follows: § 984.48 Marketing estimates and recommendations.
19.Amend § 984.50 by revising the heading and paragraph (d) to read as follows: § 984.50 Grade, quality and size regulations.
20.Amend § 984.51 by revising paragraph (a) to read as follows: § 984.51 Inspection and certification of inshell and shelled walnuts.
21.Amend § 984.52 by revising paragraph (a) and adding a new paragraph (c) to read as follows: § 984.52 Processing of shelled walnuts.
(a) No handler shall slice, chop, grind, or in any manner change the form of shelled walnuts unless such walnuts have been certified as merchantable or unless such walnuts meet quality regulations established under § 984.50(d) if such regulations are in effect.
22.Revise § 984.59 to read as follows: § 984.59 Interhandler transfers.
23.Amend § 984.67 by revising paragraph (a) to read as follows: § 984.67 Exemptions.
24.Amend § 984.69 by revising paragraph (c) to read as follows: § 984.69 Assessments.
25.Add a new § 984.70 to read as follows: § 984.70 Contributions.
The Board may accept voluntary contributions but these shall only be used to pay expenses incurred pursuant to § 984.46, Research and development. Furthermore, such contributions shall be free from any encumbrances by the donor and the Board shall retain complete control of their use.
26.Revise § 984.71 to read as follows: § 984.71 Reports of handler inventory.
27.Revise § 984.73 to read as follows: § 984.73 Reports of walnut receipts.
28.Amend § 984.89 by redesignating paragraph (b)(4) as (b)(5) and adding a new paragraph (b)(4) to read as follows: § 984.89 Effective time and termination.
29.Add a new § 984.91 to read as follows: § 984.91 Relationship with the California Walnut Commission.