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41948

Proposed Rules Federal Register


Vol. 72, No. 147

Wednesday, August 1, 2007

This section of the FEDERAL REGISTER can be viewed at: http:// or her principal place of business, has
contains notices to the public of the proposed www.regulations.gov. jurisdiction to review USDA’s ruling on
issuance of rules and regulations. The the petition, provided an action is filed
purpose of these notices is to give interested FOR FURTHER INFORMATION CONTACT: Rose
M. Aguayo, Marketing Specialist, or not later than 20 days after the date of
persons an opportunity to participate in the the entry of the ruling.
rule making prior to the adoption of the final Kurt J. Kimmel, Regional Manager,
rules. California Marketing Field Office, This proposal invites comments on
Marketing Order Administration using an estimated trade demand figure
Branch, Fruit and Vegetable Programs, to compute volume regulation
DEPARTMENT OF AGRICULTURE AMS, USDA; Telephone: (559) 487– percentages for 2007–08 crop NS raisins
5901, Fax: (559) 487–5906, or E-mail: covered under the order. This rule
Agricultural Marketing Service Rose.Aguayo@usda.gov or would provide parameters for
Kurt.Kimmel@usda.gov. implementing volume regulation for
7 CFR Part 989 Small businesses may request 2007–08 crop NS raisins, if supplies are
information on complying with this short, for the purposes of maintaining a
[Docket No. AMS–FV–07–0071; FV07–989– regulation by contacting Jay Guerber, portion of the industry’s export markets
2 PR] Marketing Order Administration and stabilizing the domestic market.
Branch, Fruit and Vegetable Programs, This action was unanimously
Raisins Produced From Grapes Grown AMS, USDA, 1400 Independence recommended by the Committee at a
In California; Use of Estimated Trade Avenue, SW., STOP 0237, Washington, meeting on April 12, 2007.
Demand To Compute Volume DC 20250–0237; Telephone: (202) 720–
Regulation Percentages Volume Regulation Authority
2491, Fax: (202) 720–8938, or E-mail:
Jay.Guerber@usda.gov. The order provides authority for
AGENCY: Agricultural Marketing Service, volume regulation designed to promote
USDA. SUPPLEMENTARY INFORMATION: This
proposal is issued under Marketing orderly marketing conditions, stabilize
ACTION: Proposed rule. prices and supplies, and improve
Agreement and Order No. 989 (7 CFR
part 989), both as amended, regulating producer returns. When volume
SUMMARY: This rule invites comments
the handling of raisins produced from regulation is in effect, a certain
on using an estimated trade demand percentage of the California raisin crop
figure to compute volume regulation grapes grown in California, hereinafter
referred to as the ‘‘order.’’ The order is may be sold by handlers to any market
percentages for 2007–08 crop Natural (free tonnage), while the remaining
(sun-dried) Seedless (NS) raisins effective under the Agricultural
Marketing Agreement Act of 1937, as percentage must be held by handlers in
covered under the Federal marketing a reserve pool (reserve) for the account
order for California raisins (order). The amended (7 U.S.C. 601–674), hereinafter
referred to as the ‘‘Act.’’ of the Committee. Reserve raisins are
order regulates the handling of raisins disposed of through certain programs
produced from grapes grown in The Department of Agriculture
(USDA) is issuing this rule in authorized under the order. For
California and is administered locally instance, reserve raisins may be sold by
by the Raisin Administrative Committee conformance with Executive Order
12866. the Committee to handlers for free use
(Committee). This rule would provide or to replace part of the free tonnage
This proposal has been reviewed
parameters for implementing volume raisins they exported; used in diversion
under Executive Order 12988, Civil
regulation for 2007–08 crop NS raisins, programs; carried over as a hedge
Justice Reform. This rule is not intended
if supplies are short, for the purposes of against a short crop the following year;
to have retroactive effect. This proposal
maintaining a portion of the industry’s or disposed of in other outlets not
will not preempt any State or local laws,
export markets and stabilizing the competitive with those for free tonnage
regulations, or policies, unless they
domestic market. raisins, such as government purchase,
present an irreconcilable conflict with
DATES: Comments must be received by this rule. distilleries, or animal feed. Net proceeds
August 16, 2007. The Act provides that administrative from sales of reserve raisins are
ADDRESSES: Interested persons are proceedings must be exhausted before distributed to the reserve pool’s equity
invited to submit written comments parties may file suit in court. Under holders, primarily producers.
concerning this proposal. Comments section 608c(15)(A) of the Act, any Section 989.54 of the order prescribes
must be sent to the Docket Clerk, handler subject to an order may file procedures and time frames to be
Marketing Order Administration with USDA a petition stating that the followed in establishing volume
Branch, Fruit and Vegetable Programs, order, any provision of the order, or any regulation for each crop year, which
AMS, USDA, 1400 Independence obligation imposed in connection with runs from August 1 through July 31. The
Avenue SW., STOP 0237, Washington, the order is not in accordance with law Committee must meet by August 15 to
DC 20250–0237; Fax: (202) 720–8938; or and request a modification of the order review data regarding raisin supplies. At
Internet: http://www.regulations.gov. All or to be exempted therefrom. A handler that time, the Committee computes a
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comments should reference the docket is afforded the opportunity for a hearing trade demand for each varietal type of
number and the date and page number on the petition. After the hearing USDA raisins for which a free tonnage
of this issue of the Federal Register and would rule on the petition. The Act percentage might be recommended.
will be made available for public provides that the district court of the Trade demand is equal to 90 percent of
inspection in the Office of the Docket United States in any district in which the prior year’s domestic and export
Clerk during regular business hours, or the handler is an inhabitant, or has his shipments, adjusted by subtracting

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Federal Register / Vol. 72, No. 147 / Wednesday, August 1, 2007 / Proposed Rules 41949

carryin inventory from the prior year competitive in export markets. Prices in working group presented its
and adding a desirable carryout export markets are generally lower than recommendation to the subcommittee,
inventory for the end of the current the domestic market. The ERO began in and then, in turn, to the Committee.
year. the early 1980’s as a ‘‘raisin-back’’ At a meeting on April 12, 2007, the
By October 5, the Committee must program whereby handlers who Committee unanimously recommended
announce preliminary crop estimates exported California raisins could
and determine whether volume using an estimated trade demand rather
purchase, at a reduced price, reserve
regulation is warranted for the varietal than a computed trade demand to
raisins for free use. This effectively
types for which it computed trade blended down the cost of the raisins calculate the 2007–08 NS raisin crop
demands. Preliminary volume that were exported. The NS raisin ERO volume regulation percentages, if the
regulation percentages are then was changed to a ‘‘cash-back’’ program crop size falls within certain
computed to release 85 percent of the in 1996 whereby handlers could receive parameters. Section 989.154(b) of the
computed trade demand if a field price cash from the reserve pool for export order’s administrative rules and
has been established or 65 percent of the shipments. regulations would be revised by
trade demand if no field price has been The ERO has been operated as a ‘‘cash replacing ‘‘1999–2000’’ with ‘‘2007–08’’
established. Field price is the price that back’’ program in all years since then, and ‘‘235,000’’ with ‘‘215,000.’’
handlers pay for raisins from producers. except for 2000, 2001, and a portion of
Implementing Volume Regulation if
By February 15, the Committee must 2002. During 2002 both ‘‘cash back’’ and
recommend final free and reserve ‘‘raisin back’’ programs were Supplies Are Short To Maintain the
percentages that will tend to release the implemented. Financing for the cash- ERO
full trade demand. back ERO program has been primarily Section 989.54(e) contains a list of
The order also requires that, when from the Committee’s ‘‘10 plus 10’’ sales factors that the Committee must
volume regulation is in effect, two offers of reserve raisins. Under the 2002, 2003, consider when computing volume
of reserve raisins must be made 2004, and 2005 cash-back ERO programs
regulation percentages. Factor (4) states
available to handlers for free use. These an average of $39.7 million of reserve
that the Committee must consider, if
offers are known as the ‘‘10 plus 10’’ pool funds were utilized to support the
different than the computed trade
offers. Each offer consists of a quantity export of about 103,000 packed tons of
of reserve raisins equal to 10 percent of NS raisins. demand, the estimated trade demand for
the prior year’s shipments. The order raisins in free tonnage outlets.
Current Industry Situation—Declining
also specifies that ‘‘10 plus 10’’ raisins The Committee unanimously
Production
must be sold to handlers at the current recommended using an estimated trade
field price plus a 3 percent surcharge The Committee is concerned that the demand figure for 2007–08 crop NS
and Committee costs. 2007–08 crop may be short because of raisins, which is a figure different than
grape vine removals over the last several the computed trade demand, to compute
Development of Export Markets years and an April frost. As a result, volume regulation percentages to create
With the exception of 11 crop years, volume regulation may not be warranted a reserve if supplies are short. This
volume regulation has been utilized for based on the order’s computed trade would allow the Committee to continue
NS raisins since the order’s inception in demand formula. its ERO program, thereby maintaining a
1949. The procedures for determining During the last several years, grape
portion of its export sales and
volume regulation percentages have production has been declining because
stabilizing the domestic market.
been modified over the years to address of poor grower returns in the wine and
the industry’s needs. In the past, volume raisin segments of the industry. About Specifically, the Committee
regulation has been utilized primarily to 40,000 acres of grape vines have been recommended that an estimated trade
help the industry manage an oversupply removed in favor of other crops, which demand be utilized to compute
of raisins. Through the use of various have recently been providing higher preliminary, interim, and final free and
marketing programs operated through returns. In addition, a frost in April this reserve percentages for 2007–08 crop NS
reserve pools and other industry year may reduce the crop further. raisins if the crop estimate is equal to,
promotional activities, the industry has If no 2007–08 reserve were less than, or no more than 10 percent
also developed its export markets. established, the industry would not be greater than the trade demand as
Between 1980 and 1985, exports of able to continue the ERO program and computed according to the formula
California NS raisins averaged about 26 support its export sales. The Committee specified in § 989.54(a) of the order. If
percent (53,700 packed tons, or raisins is concerned that the industry could an estimated trade demand figure is
which have been processed) of the lose a significant portion, perhaps 50 utilized, the final reserve percentage
industry’s total NS raisin shipments percent, of its export markets. Further, would be no more than 10 percent.
(207,600 packed tons, excluding handlers who could not sell their raisins Finally, volume regulation would not be
government purchases) per year. During in export may sell their raisins implemented if the 2007–08 crop
the last nine years (1997–2005) these domestically. Annual domestic estimate is below 215,000 natural
exports averaged about 37 percent shipments of NS raisins for the past 9 condition tons.
(105,000 packed tons, or raisins which years have averaged about 177,000
have been processed) of the industry’s packed tons. The Committee is To illustrate how this would work,
total NS raisin shipments (282,000 concerned that additional raisins sold the Committee would compute a trade
packed tons, excluding government into the domestic market could create demand for NS raisins by August 15 (as
purchases) per year. instability. an example, 245,000 natural condition
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Thus, the Committee formed a tons). At that time, the Committee


Export Replacement Offer working group to review this issue and would also announce its intention to
One market development program consider options to continue to support use an estimated trade demand of
operated through reserve pools, the its export sales while maintaining 215,000 natural condition tons to
Export Replacement Offer (ERO), has stability in the domestic market. After compute volume regulation percentages
helped U.S. raisins to be price its meeting on February 1, 2007, the for the 2007–08 crop.

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41950 Federal Register / Vol. 72, No. 147 / Wednesday, August 1, 2007 / Proposed Rules

Crop Estimate Below 215,000 Tons—No computed, producers receive an initial condition tons) would be utilized to
Regulation payment from handlers for 85 percent of compute volume regulation percentages.
The Committee would meet by the computed trade demand (or 65 Under this scenario, enough raisins
October 5 to announce a NS crop percent of the trade demand if no field (over 26,000 natural condition tons)
estimate and determine whether volume price has been established). Using the would be available in reserve to
regulation was warranted. Under the 245,000 natural condition ton computed continue the ERO program.
trade demand figure, this would equate It is anticipated that allowing the use
Committee’s proposal, if the 2007–08
to 208,250 natural condition tons. of an estimated trade demand figure to
crop estimate is under 215,000 natural
However, if the lower, 215,000 natural compute volume regulation percentages
condition tons, volume regulation
condition ton estimated trade demand for 2007–08 crop NS raisins if supplies
would not be recommended. With a
figure were utilized to compute are short would assist the industry in
crop of 215,000 natural condition tons, maintaining a portion of its export
preliminary percentages, producers
and about 108,000 natural condition markets and stabilize the domestic
would receive an initial payment from
tons of NS raisins projected to be carried market. If the crop estimate is below
handlers for only 182,750 natural
forward from the 2006–07 crop year, a 215,000 natural condition tons, no
condition tons, or 75 percent.
supply of about 323,000 natural The Committee is concerned with the volume regulation would be
condition tons of raisins would be preliminary percentage computation implemented. If this occurs, it is
available for the 2007–08 crop year. As using an estimated trade demand and its anticipated that domestic market needs
previously mentioned, annual NS raisin impact on producer returns. The would be met, while export markets
shipments average about 282,000 Committee wants to ensure that the would likely not be satisfied.
packed tons (about 300,000 natural producers receive the field price for as However, if the crop falls between
condition tons), excluding government much of their crop as possible while 215,000 natural condition tons and
purchases. still establishing a small pool of reserve 269,500 tons, establishing a small
With an available supply of only raisins to maintain the ERO. The reserve pool would allow the industry
323,000 natural condition tons of NS Committee would meet by February 15 to not only satisfy the needs of the
raisins, the Committee believes that the to compute final free and reserve domestic market, but also maintain a
industry’s first priority would be to percentages. The Committee portion of its export sales, which now
satisfy the needs of the domestic market, recommended that if an estimated trade account for about 37 percent of the
which absorbs annually an average of demand figure is used to compute industry’s annual shipments. By
about 177,000 packed tons (188,000 percentages, the final reserve percentage maintaining an ERO program, even at a
natural condition tons). Assuming that be computed to equal no more than 10 reduced level, exporters could continue
188,000 natural condition tons were percent of the estimated crop. Producers to be price competitive and sell their
shipped domestically, the Committee would ultimately be paid the field price raisins abroad. The domestic market
estimates that, with no ERO program to for 90 percent of their crop, or their free would remain stable because it would
help U.S. raisins be price competitive in tonnage. not have to absorb any additional raisins
export markets, the industry would The remaining 10 percent of the crop that handlers could not afford to sell in
export about half of its usual tonnage, or would be held in reserve and offered for export markets.
about 56,000 natural condition tons. sale to handlers in the ‘‘10 plus 10’’
The remaining 79,000 natural condition offers. As previously described, the ‘‘10 Initial Regulatory Flexibility Analysis
tons would likely be held in inventory plus 10’’ offers are two offers of reserve Pursuant to requirements set forth in
for the following 2008–09 crop year. raisins that are made available to the Regulatory Flexibility Act (RFA), the
Annual carryout inventory for NS handlers for free use. The order Agricultural Marketing Service (AMS)
raisins for the past 9 years has averaged specifies that each offer consists of a has considered the economic impact of
about 108,000 natural condition tons. quantity of reserve raisins equal to 10 this action on small entities.
percent of the prior year’s shipments. Accordingly, AMS has prepared this
Crop Estimate Between 215,000 Tons
This requirement would not be met if initial regulatory flexibility analysis.
and 10 Percent Above the Computed The purpose of the RFA is to fit
Trade Demand—Volume Regulation volume regulation were implemented
when raisin supplies were short. regulatory actions to the scale of
If the October 2007–08 crop estimate However, all of the raisins held in business subject to such actions in order
for NS raisins falls between 215,000 reserve would be made available to that small businesses will not be unduly
natural condition tons and 10 percent handlers for free use. Handlers would or disproportionately burdened.
above the computed trade demand, the pay the Committee for the ‘‘10 plus 10’’ Marketing orders issued pursuant to the
Committee would use an estimated raisins and that money would be Act, and rules issued thereunder, are
trade demand figure to compute utilized to fund a 2007–08 ERO unique in that they are brought about
preliminary free and reserve percentages program. Any unused 2007–08 reserve through group action of essentially
for the 2007–08 crop. Thus, using the pool funds could be loaned forward to small entities acting on their own
245,000 natural condition ton computed initiate a 2008–09 ERO program or to behalf.
trade demand figure, an estimated trade make a grower payment to the 2007–08 There are approximately 23 handlers
demand would be used to compute reserve pool growers. of California raisins who are subject to
volume regulation percentages if the regulation under the order and
crop estimate falls between 215,000 and Crop Estimate More Than 10 Percent approximately 4,000 raisin producers in
269,500 natural condition tons. Above the Computed Trade Demand the regulated area. Small agricultural
The order specifies that preliminary Finally, the Committee recommended service firms have been defined by the
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percentages compute to release 85 that, if the 2007–08 crop estimate is Small Business Administration (13 CFR
percent of the computed trade demand more than 10 percent greater than the 121.601) as those having annual receipts
as free tonnage once a field price is computed trade demand (or above of less than $6,500,000, and small
established. Producers are paid the field 269,500 natural condition tons in the agricultural producers are defined as
price for their free tonnage. Normally, earlier example), the computed trade those having annual receipts of less than
when preliminary percentages are demand (as an example, 245,000 natural $750,000. No more than 10 handlers,

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Federal Register / Vol. 72, No. 147 / Wednesday, August 1, 2007 / Proposed Rules 41951

and a majority of producers, of Committee members have also raisins fell to $700 per ton, causing
California raisins may be classified as commented that, once export markets producers to experience large financial
small entities. Thirteen of the 23 were lost, it would be difficult and losses. Thus, the industry wants to help
handlers subject to regulation have costly for the industry to recover those avoid a repeat of what happened in the
annual sales estimated to be at least sales. Raisins are mostly used as an 1980’s by utilizing the Federal order to
$6,500,000, and the remaining 10 ingredient in baked goods, cereals, and maintain export sales and provide
handlers have sales less than snacks. Typically, buyers want reliable stability in the domestic market.
$6,500,000, excluding receipts from any suppliers from year to year and are An alternative to the proposed action
other sources. generally reluctant to find alternative was considered by the industry. As
This rule would revise § 989.154(b) of ingredients or sources. In turn, once previously mentioned, the Committee
the order’s administrative rules and buyers change sources, they may not formed a working group to address its
regulations by changing the parameters switch back. concerns. The working group
for using an estimated trade demand Export markets for raisins are highly considered utilizing the computed trade
figure specified in § 989.54(e)(4) of the competitive. The U.S. and Turkey are demand formula in the order and
order to compute volume regulation the world’s leading producers of raisins. utilizing about $7.5 million of available
percentages for 2007–08 crop NS Turkey exports approximately 80 funds of the 2005–06 reserve pool and
raisins. Section 989.154(b) would percent of its total production, and about 20,000 tons of natural condition
provide guidelines for the use of volume represents an alternative product source raisins remaining in the 2006–07 reserve
regulation if 2007–08 NS raisin supplies for raisin buyers. pool to fund the ERO. However, the
are short for the purposes of Maintaining the industry’s export committee decided that sufficient assets
maintaining a portion of the industry’s markets would help the industry would not be available to fund the
export markets and stabilizing the maximize its 2007–08 total shipments of 2007–08 crop NS raisin ERO. The
domestic market. NS raisins and prevent handlers from Committee’s assets are not sufficient,
Regarding the impact of the action on carrying forward large quantities of because there was no 2004–05 reserve,
producers and handlers, under the inventory into the 2008–09 crop year. If and funds from the 2005–06 and 2006–
Committee’s proposal, if an estimated the industry is unable to maximize its 07 pools will ultimately fund the 2007–
trade demand figure was used to 2007–08 shipments of NS raisins, carry 08 ERO program only until about May
compute volume regulation percentages, in inventory could be high, which 2008. Thus, after much discussion, the
the final reserve percentage would would result in a lower computed trade
working group ultimately recommended
compute to no more than 10 percent. demand figure for the 2008–09 crop
to the Committee using an estimated
Producers would thus be paid the field year. If the industry returns to its
trade demand to compute volume
price for at least 90 percent of their pattern of relatively large crops in 2009–
regulation percentages next year if
crop, but would not be paid the field 10, a low trade demand and large crop
2007–08 crop NS raisin supplies are
price for about 10 percent of their crop estimate would compute to a low free
short.
that would go into a reserve pool. The tonnage percentage. Large supplies exert
field price for NS raisins for the past 5 downward pressure on the field price. This action would not impose any
years has averaged $1,073 per ton. Since NS raisin producers are paid additional reporting or recordkeeping
Handlers in turn would purchase 90 significantly more for their free tonnage requirements on either small or large
percent of their raisins directly from than for reserve tonnage, this would raisin handlers. As with all Federal
producers at the field price, but would mean reduced returns to producers. marketing order programs, reports and
have to buy remaining raisins out of the Projected reduced 2009–10 returns to forms are periodically reviewed to
reserve pool at a higher price (field price producers, coupled with the risks of reduce information requirements and
plus 3 percent and Committee costs). rain and labor shortages during harvest, duplication by industry and public
The ‘‘10 plus 10’’ price of NS reserve may influence producers to ‘‘go green,’’ sector agencies.
raisins has averaged about $100 higher or sell their raisin-variety grapes to the The AMS is committed to complying
than the field price for the past 9 years, fresh-grape, wine, or juice concentrate with the E-Government Act, to promote
or $1,173 per ton. Proceeds from the ‘‘10 markets. Additional supplies to those the use of the Internet and other
plus 10’’ sales would be used to support outlets could potentially reduce ‘‘green’’ information technologies to provide
export sales. returns as well. increased opportunities for citizen
While there may be some initial costs A similar scenario occurred in the access to Government information and
for both producers and handlers, the California raisin industry in the early services, and for other purposes.
long term benefits of this action far 1980’s where the industry experienced USDA has not identified any relevant
outweigh the costs. The Committee two consecutive short-crop years. The Federal rules that duplicate, overlap or
believes that with no reserve pool, and 1981–82 and 1982–83 crops were short, conflict with this proposed rule.
hence, no ERO program, export sales followed by relatively large crops for the In addition, the Committee’s working
would decline dramatically, perhaps up remainder of the 1980’s. The producer group meeting held on February 1, 2007,
to 50 percent. Handlers would likely field price for NS raisins was $1,275 per and the subcommittee and Committee
sell into the domestic market raisins ton for 1981–82 crop raisins, and $1,300 meetings on April 12, 2007, were widely
that they were unable to sell into lower per ton for 1982–83 crop raisins. No publicized throughout the raisin
priced export markets. Additional NS volume regulation was implemented in industry and all interested persons were
raisins sold into the domestic market, 1982–83. However, a large inventory of invited to attend the meetings and
which typically absorbs about 177,000 high-priced raisins was carried forward participate in Committee deliberations
packed tons, could create instability. into the 1983–84 crop year. When on all issues. Like all Committee
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The industry would likely lose a coupled with the largest crop on record meetings, the February 1, 2007, and
substantial portion of its export markets, at the time, volume regulation was April 12, 2007, meetings were public
which now account for about 37 percent implemented for the 1983–84 crop with meetings and all entities, both large and
(105,000 packed tons) of the industry’s the free tonnage percentage at a small, were able to express views on
annual shipments (282,000 packed historically low 37.5 percent. By 1984, this issue. Finally, interested persons
tons), excluding government purchases). the producer field price for free tonnage are invited to submit information on the

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41952 Federal Register / Vol. 72, No. 147 / Wednesday, August 1, 2007 / Proposed Rules

regulatory and informational impacts of Dated: July 26, 2007. Instructions: All comments should
this action on small businesses. Lloyd C. Day, make reference to the date and page
A small business guide on complying Administrator, Agricultural Marketing number of this issue of the Federal
with fruit, vegetable, and specialty crop
Service. Register.
[FR Doc. E7–14825 Filed 7–31–07; 8:45 am] Background Documents: Regulatory
marketing agreements and orders may
BILLING CODE 3410–02–P analyses and other documents relating
be viewed at: http://www.ams.usda.gov/
to this action will be available for public
fv/moab/html. Any questions about the inspection in Room 1643–S, 1400
compliance guide should be sent to Jay Independence Avenue, SW.,
Guerber at the previously mentioned DEPARTMENT OF AGRICULTURE
Washington, DC 20250–3604 during
address in the FOR FURTHER INFORMATION Grain Inspection, Packers and regular business hours.
CONTACT section. Stockyards Administration Read Comments: All comments will
A 15-day comment period is provided be available for public inspection in the
to allow interested persons to respond 9 CFR Part 201 above office during regular business
to this proposal. Fifteen days is deemed hours (7 CFR 1.27(b)).
RIN 0580–AA98
appropriate, because this action, if FOR FURTHER INFORMATION CONTACT: S.
adopted, should be in place by the Poultry Contracts; Initiation, Brett Offutt, Director, Policy and
beginning of the 2007–08 crop year, Performance, and Termination Litigation Division, P&SP, GIPSA, 1400
August 1. All written comments timely Independence Ave., SW., Washington,
AGENCY: Grain Inspection, Packers and DC 20250, (202) 720–7363,
received will be considered before a
Stockyards Administration, USDA. s.brett.offutt@usda.gov.
final determination is made on this
ACTION: Proposed rule.
matter. SUPPLEMENTARY INFORMATION:
List of Subjects in 7 CFR Part 989 SUMMARY: We are proposing to amend
Background
the regulations issued under the Packers
Grapes, Marketing agreements, and Stockyards P&S Act, 1921 (7 U.S.C. As the Grain Inspection, Packers and
Raisins, Reporting and recordkeeping 181, et seq.) (P&S Act) concerning Stockyards Administration (GIPSA), one
requirements. Records to be Furnished Poultry of our functions is the enforcement of
Growers and Sellers. The regulations list the Packers and Stockyards (P&S) Act of
For the reasons set forth in the 1921. Under authority granted us by the
the records live poultry dealers (poultry
preamble, 7 CFR part 989 is proposed to companies) must furnish poultry Secretary of Agriculture (Secretary), we
be amended as follows: growers, including requirements for the are authorized (7 U.S.C. 228) to make
timing and contents of poultry growout those regulations necessary to carry out
PART 989—RAISINS PRODUCED the provisions of the P&S Act. Section
contracts.
FROM GRAPES GROWN IN The proposed amendments would § 201.100 of the regulations (9 CFR
CALIFORNIA require poultry companies to timely 201.100) specifies what contract terms
deliver a copy of an offered contract to must be disclosed to growers by poultry
1. The authority citation for 7 CFR companies.
growers; to include information about
part 989 continues to read as follows: any Performance Improvement Plans We believe the failure to disclose
Authority: 7 U.S.C. 601–674. (PIPs) in contracts; to include provisions certain terms in a poultry growing out
for written termination notices in arrangement (growout contract)
2. Section 989.154, paragraph (b) is contracts; and notwithstanding a constitutes an unfair, discriminatory, or
revised to read as follows: confidentiality provision, allow growers deceptive practice in violation of
to discuss the terms of contracts with section 202 (7 U.S.C 192) of the P&S
§ 989.154 Marketing policy computations.
designated individuals. Act.
(a) * * * DATES: We will consider comments we Due to the vertical integration and
(b) Estimated trade demand. Pursuant receive by October 30, 2007. high concentration of the poultry
to § 989.54(e)(4), estimated trade ADDRESSES: We invite you to submit
industry, growers are often presented
demand is a figure different than the comments on this proposed rule. You contracts on a ‘‘take it or leave it’’ basis.
may submit comments by any of the Growers do not realistically have the
trade demand computed according to
following methods: option of negotiating contract terms
the formula in § 989.54(a). The
• E-Mail: Send comments via with a large poultry company. Growers
Committee shall use an estimated trade
electronic mail to often do not have the option of
demand to compute preliminary and
comments.gipsa@usda.gov. contracting with another poultry
interim free and reserve percentages, or company on more favorable terms
determine such final percentages for • Mail: Send hardcopy written
comments to Tess Butler, GIPSA, USDA, because there may be no other poultry
recommendation to the Secretary for companies in the area. There is
2007–08 crop Natural (sun-dried) 1400 Independence Avenue, SW., Room
1643–S, Washington, DC 20250–3604. considerable information asymmetry as
Seedless (NS) raisins if the crop
• Fax: Send comments by facsimile well as an imbalance in market power:
estimate is equal to, less than, or no transmission to: (202) 690–2755. Growers sometimes do not know the full
more than 10 percent greater than the • Hand Delivery or Courier: Deliver content of their own contract and are
computed trade demand: Provided, That comments to: Tess Butler, GIPSA, constrained by confidentiality clauses
the final reserve percentage computed USDA, 1400 Independence Avenue, from discussing the contract with
pwalker on PROD1PC71 with PROPOSALS

using such estimated trade demand SW., Room 1643–S, Washington, DC business advisers, while at the same
shall be no more than 10 percent, and 20250–3604. time poultry companies have detailed
no reserve shall be established if the • Federal e-Rulemaking Portal: Go to information about the market as a whole
final 2007–08 NS raisin crop estimate is http://www.regulation.gov. Follow the and about the current terms being
less than 215,000 natural condition on-line instruction for submitting offered to other growers. Growers often
tons. comments. have much of their net worth invested

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