[Federal Register: March 6, 2001 (Volume 66, Number 44)]
[Rules and Regulations]
[Page 13396-13399]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06mr01-4]
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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.
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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
[[Page 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 Sec. 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 x 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
[[Page 13398]]
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 Sec. 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 21,086
estimate; Item 1 minus Item 2)........................
(4) Plus undeclared carry-in as of July 1, 2000, 1,233
subject to regulation.................................
(5) Supply subject to regulation (Item 3 plus Item 4).. 22,319
Inshell Trade Demand:
(6) Average trade acquisitions of inshell hazelnuts for 4,347
three prior years.....................................
(7) Less declared carry-in as of July 1, 2000, not 1,184
subject to regulation.................................
(8) Adjusted Inshell Trade Demand (Item 6 minus Item 7) 3,163
(9) Desirable carry-out on August 31, 2001 (15 percent 652
of Item 6)............................................
(10) Adjusted Inshell Trade Demand plus desirable carry- 3,815
out (Item 8 plus Item 9)..............................
------------------------------------------------------------------------
Percentages Free Restricted
------------------------------------------------------------------------
(11) Interim final percentages (Item 8 14 86
divided by Item 5) x 100...............
(12) Final percentages (Item 10 divided by 17 83
Item 5) x 100..........................
------------------------------------------------------------------------
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
[[Page 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.
Sec. 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
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