[Federal Register Volume 78, Number 5 (Tuesday, January 8, 2013)]
[Rules and Regulations]
[Pages 1127-1130]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-00129]



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Rules and Regulations
                                                Federal Register
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Federal Register / Vol. 78, No. 5 / Tuesday, January 8, 2013 / Rules 
and Regulations

[[Page 1127]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 922

[Docket No. AMS-FV-12-0028; FV12-922-2 IR]


Apricots Grown in Designated Counties in Washington; Temporary 
Suspension of Handling Regulations

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim rule with request for comments.

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SUMMARY: This rule suspends the minimum grade, size, quality, maturity, 
and inspection requirements prescribed under the Washington apricot 
marketing order for the 2012-13 fiscal period. The marketing order 
regulates the handling of apricots grown in designated Counties in 
Washington and is administered locally by the Washington Apricot 
Marketing Committee (Committee). In order for the Committee to continue 
collecting assessments and administer the marketing order, the 
Washington State Department of Agriculture will provide apricot 
handling data to the Committee during the suspension of the handling 
regulations. This rule is expected to reduce overall industry expenses 
and increase net returns to producers and handlers.

DATES: Effective January 9, 2013 through March 31, 2013; comments 
received by March 11, 2013 will be considered prior to the 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 and Agreement Division, Fruit and Vegetable Program, 
AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 
20250-0237; Fax: (202) 720-8938; or Internet: www.regulations.gov. All 
comments should reference the document 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: www.regulations.gov. All comments 
submitted in response to this rule will be included in the record and 
will be made available to the public. Please be advised that the 
identity of the individuals or entities submitting the comments will be 
made public on the Internet at the address provided above.

FOR FURTHER INFORMATION CONTACT: Manuel Michel, Marketing Specialist, 
or Gary Olson, Regional Manager, Northwest Marketing Field Office, 
Marketing Order and Agreement Division, Fruit and Vegetable Program, 
AMS, USDA; Telephone: (503) 326-2724; Fax: (503) 326-7440; or Email: 
Manuel.Michel@ams.usda.gov or GaryD.Olson@ams.usda.gov.
    Small businesses may request information on complying with this 
regulation by contacting Laurel May, Marketing Order and Agreement 
Division, Fruit and Vegetable Program, AMS, USDA, 1400 Independence 
SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, 
Fax: (202) 720-8938, or Email: Laurel.May@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement and Order No. 922, as amended (7 CFR 922), regulating the 
handling of apricots grown in designated counties in 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 (USDA) 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.
    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 USDA 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 then afforded the opportunity for a hearing on the petition. 
After the hearing USDA 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 USDA's ruling on the petition, 
provided an action is filed not later than 20 days after date of the 
entry of the ruling.
    This rule suspends the handling regulations prescribed under the 
order for the 2012-13 fiscal period. Specifically, this rule suspends 
the minimum grade, size, quality, maturity, and inspection requirements 
under the order. Notwithstanding the suspension of the order's handling 
regulations, apricots handled in Washington must still meet the state 
minimum grade requirement of Washington No. 2.
    As a direct result of the suspension of the order's handling 
regulations, information from the Inspection Service will no longer be 
available for the Committee to compile industry statistics and to 
assess handlers. However, collaboration with the Washington State 
Department of Agriculture will provide the Committee access to apricot 
handling data, similar to the handler information that has been 
previously collected and provided by the Inspection Service.
    Section 922.52 of the order authorizes the issuance of regulations 
for grade, size, quality, maturity, and pack for apricots grown in the 
production area. Section 922.53 authorizes the modification, 
suspension, or termination of regulations issued under Sec.  922.52, 
whenever the Secretary finds that a regulation no longer effectuates 
the declared policy of the act.
    Section 922.55 provides that whenever the handling of any variety 
of apricots is regulated pursuant to Sec.  922.52 or Sec.  922.53, such 
apricots must be inspected by the Inspection Service, and certified as 
meeting the applicable requirements. The cost of this inspection and 
certification is borne by handlers.
    Section 922.60 authorizes the Committee, with the approval of USDA, 
to require reports and other information

[[Page 1128]]

from handlers that are necessary for the Committee to perform its 
duties.
    Minimum grade, size, quality, maturity, and inspection requirements 
for apricots regulated under the order are specified in Sec.  922.321 
(the section being suspended by this rule). When effective, Sec.  
922.321, with exemptions for certain varieties and types of shipments, 
provides that all apricots shall grade not less than Washington No. 1, 
and are at least reasonably uniform in color; provided, that such 
apricots of the Moorpark variety in open containers shall be generally 
well matured. The regulation also includes a minimum quantity 
exemption, as well as specific tolerances for apricots that fail to 
meet color, minimum diameter, and quality requirements.
    The Committee meets regularly to review and consider 
recommendations for the regulatory requirements of Washington apricots. 
Committee meetings are open to the public and interested persons may 
express their views at these meetings. The USDA reviews Committee 
recommendations, information submitted by the Committee, and other 
available information, and determines whether modification, suspension, 
or termination of the regulatory requirements would tend to effectuate 
the declared policy of the Act.
    At its May 24, 2012, meeting, the Committee unanimously recommended 
suspending the order's handling regulations for the 2012 season. The 
Committee requested that this rule be effective immediately for the 
2012-13 fiscal period, which began on April 1, 2012.
    The objective of the handling regulation has been to ensure that 
only acceptable quality apricots enter fresh market channels, thereby 
ensuring consumer satisfaction, increasing sales, and improving returns 
to producers.
    The apricot industry recognizes the continued importance of quality 
as a significant factor in maintaining sales. Some Committee members 
expressed concern that the elimination of current handling and 
inspection requirements could potentially result in lower quality 
apricots being shipped to fresh markets, thereby affecting consumer 
demand. There is also concern that if overall quality declines, the 
Washington apricot industry could lose sales to other apricot producing 
regions.
    However, due to the evolving nature of fresh fruit marketing, many 
wholesale and retail apricot buyers now require their own specific 
criteria for product quality from all handlers. Therefore, the 
Committee believes the cost of inspection and certification, which is 
mandated when the handling regulations are in effect, may exceed the 
benefits derived.
    After much consideration, the Committee recommended the suspension 
of the handling regulations prescribed under the order for the 2012-13 
fiscal period. This action will allow the Committee to evaluate the 
impact that suspended regulations will have on the quality of 
Washington apricots. Should the market situation so dictate, the 
Committee may take appropriate action to continue the suspension of the 
handling regulations or recommend termination of the order.
    This rule enables Washington apricot handlers to ship apricots 
without regard to the order's minimum grade, size, quality, maturity, 
and inspection requirements. This suspension action will also allow 
handlers to decrease their total costs by eliminating the expenses 
associated with mandatory inspection. However, this rule does not 
impede handlers from seeking product inspection on a voluntary basis if 
they find inspection desirable. Prior to the end of the fiscal period, 
the Committee will evaluate the effect that the suspension of the 
handling regulations has on the 2012 market conditions and on producer 
returns, and if necessary, make recommendations to USDA for changes.
    The suspension of the handling regulations will also result in the 
elimination of the inspection certificates being generated and 
forwarded to the Committee office by the Inspection Service. The 
Committee has used these certificates as the basis for the collection 
of handler assessments and for compiling apricot industry statistics. 
As a result of not having the information provided by the inspection 
certificates, the Committee will enter into a memorandum of 
understanding with the Washington State Department of Agriculture in 
order to obtain the information necessary to collect assessments and 
generate statistical information.
    Authorization to assess handlers enables the Committee to incur 
expenses that are reasonable and necessary to administer the program.
    Consistent with the suspension of Sec.  922.321, this rule also 
suspends Sec.  922.111 of the rules and regulations in effect under the 
order. Section 922.111 contains provisions for handlers to apply for 
waivers from mandatory inspection when such inspection is not readily 
available from the Inspection Service. With the suspension of 
regulation, such waivers are no longer necessary.

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) 
has considered the economic impact of this action 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 the rules issued thereunder, are unique in 
that they are brought about through group action of essentially small 
entities acting on their own behalf.
    There are approximately 20 handlers of Washington apricots who are 
subject to regulation under the marketing order and approximately 94 
apricot producers in the regulated area. Small agricultural service 
firms are defined by the Small Business Administration (SBA) (13 CFR 
121.201) as those having annual receipts of less than $7,000,000, and 
small agricultural producers are defined as those having annual 
receipts of less than $750,000.
    Apricot production has been approximately 4,200 to 8,900 tons per 
year for the past several years. The National Agricultural Statistics 
Service (NASS) reports that all Washington apricot handlers combined 
ship approximately $7,132,000 worth of apricots during the 2011 season. 
In addition, based on acreage, production, and producer prices reported 
by NASS, and the total number of Washington apricot producers, average 
annual producer receipts are approximately $76,000, which is 
considerably less than the $750,000 threshold. In view of the 
foregoing, it can be concluded that a majority of the handlers and 
producers of Washington apricots may be classified as small entities.
    At its May 24, 2012, meeting, the Committee unanimously recommended 
suspending the handling regulations for the 2012-13 fiscal period.
    This rule suspends the handling regulations specified in Sec. Sec.  
922.111 and 922.321. The suspension of these handling regulations will 
allow the Washington apricot industry to market apricots without regard 
to minimum grade, size, quality, maturity, and inspection requirements 
prescribed under the federal marketing order. Authority for this action 
is provided in Sec.  922.53.
    The handling regulations help ensure that only acceptable quality 
apricots

[[Page 1129]]

enter fresh market channels, thereby ensuring consumer satisfaction, 
increasing sales, and improving returns to producers. While the 
industry continues to believe that quality is an important factor in 
maintaining sales, the Committee believes the cost of inspection and 
certification may exceed the benefits derived. The Committee also 
believes that the demands of wholesale buyers and consumers will drive 
handlers and producers to maintain a high level of product quality 
without the necessity of minimum quality standards and mandatory 
inspections. The Committee will review the outcome of the handling 
regulation suspension prior to the end of the 2012-13 fiscal period and 
determine if continued suspension, or alternatively, termination of the 
marketing order is warranted. The handling regulations will be 
automatically reinstated on April 1, 2013.
    Apricot prices have fluctuated considerably in recent years, and at 
times some producers have faced difficulty covering their total costs. 
In response to the adverse economic conditions experienced by the 
industry, the Committee discussed the possibility of reducing expenses 
through the elimination of mandatory inspection. The Committee 
considered the potential consequences of suspending the handling and 
inspection requirements, and how this could result in lower quality 
apricots being shipped to fresh markets. Also, if fruit quality were to 
decline, there is some concern among Committee members that the 
Washington apricot industry could lose sales to other apricot producing 
regions.
    While acknowledging these concerns, the Committee also believes 
that the current marketing conditions make the program unnecessary, 
because the costs of regulation may be greater than the benefits 
gained. Therefore, the Committee recommended the suspension of the 
handling regulations for the 2012-13 fiscal period. The Committee will 
review the impacts of the suspension prior to the end of the fiscal 
period and consider appropriate actions for ensuing seasons.
    This rule enables handlers to ship apricots without regard to the 
order's minimum grade, size, quality, maturity, and inspection 
requirements during the 2012-13 fiscal period. This rule allows 
handlers to decrease their overall costs by eliminating the costs 
associated with mandatory inspection. This rule, however, does not 
impede handlers from seeking inspection on a voluntary basis if they 
find inspection desirable.
    The suspension of the handling regulations will result in the 
elimination of mandatory inspections and, in turn, the inspection 
certificates generated by the Inspection Service and provided to the 
Committee. The Committee has used such certificates for assessment 
billing purposes and for compiling industry statistics. As a result of 
needing the information that was previously provided by the inspection 
certificates, the Committee will enter into a memorandum of 
understanding with the Washington State Department of Agriculture in 
order to obtain information on which to collect assessments and 
generate statistical information.
    The Committee anticipates that this rule will not negatively impact 
small handlers and producers because it suspends minimum grade, size, 
quality, maturity, and inspection requirements prescribed under the 
order. The total cost of inspection and certification for fresh 
shipments of Washington apricots during the 2011 marketing season is 
estimated by the Committee to have been $0.23 per hundredweight, or 
approximately $12,700 total. This represents approximately $635 per 
handler. Since handlers may continue to have their apricots voluntarily 
inspected, the Committee expects that some handlers will continue to 
have at least a portion of their fresh apricots inspected and certified 
by the Inspection Service.
    Alternatives to the suspension of the handling regulations 
considered by the Committee included maintaining the status quo, 
suspending regulations indefinitely, and terminating the marketing 
order in its entirety. The Committee believes that the continuation of 
regulation would be an unnecessary burden on the industry, given the 
evolving marketing conditions and future outlook. Thus, continuing to 
regulate in the same manner was not a viable option to the Committee. 
The Committee also discussed suspending regulation indefinitely, but 
rejected this alternative at this time. The Committee believes that 
suspending the handling regulations for one season will provide 
sufficient information to evaluate the impact this has on the quality 
of Washington apricots. Last of all, the Committee considered 
terminating the order in its entirety, but similarly declined the 
option. The Committee will review the impacts of the suspension prior 
to the end of the fiscal period and consider appropriate actions for 
ensuing seasons.
    In accordance with the Paperwork Reduction Act of 1995, (44 U.S.C. 
Chapter 35), the order's information collection requirements have been 
previously approved by the Office of Management and Budget (OMB) and 
assigned OMB No. 0581-0189. No changes in those requirements as a 
result of this action are necessary. Should any changes become 
necessary, they would be submitted to OMB for approval.
    This rule will not impose any additional reporting or recordkeeping 
requirements on either small or large apricot 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.
    AMS is committed to complying with the E-Government Act, to promote 
the use of the Internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.
    In addition, USDA has not identified any relevant Federal rules 
that duplicate, overlap or conflict with this rule.
    Further, the Committee's meeting was widely publicized throughout 
the Washington apricot industry and all interested persons were invited 
to attend the meeting and participate in Committee deliberations. Like 
all Committee meetings, the May 24, 2012, 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 
comments on this interim rule, including 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: 
www.ams.usda.gov/MarketingOrdersSmallBusinessGuide. Any questions about 
the compliance guide should be sent to Laurel May at the previously 
mentioned address in the FOR FURTHER INFORMATION CONTACT section.
    This rule invites comments on the suspension of the handling 
regulations prescribed under the Washington apricot marketing order. 
Any comments timely received will be considered prior to finalization 
of this rule.
    After consideration of all relevant material presented, including 
the Committee's recommendation, and other information, it is found that 
the regulatory requirements no longer tend to effectuate the declared 
policy of the Act, and are therefore being suspended.
    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

[[Page 1130]]

give preliminary notice prior to putting this rule into effect, and 
that good cause exists for not postponing the effective date of this 
rule until 30 days after publication in the Federal Register because: 
(1) This interim rule is a relaxation in the apricot handling 
regulations and should be in place as soon as possible for the 2012-13 
fiscal period; (2) handlers need to know as soon as possible that they 
are free to market their apricots without regard to the order's 
handling regulations; (3) this issue has been widely discussed at 
various industry and association meetings and the Committee has kept 
the industry well informed; (4) handlers are aware of this rule, which 
was recommended at a public meeting; and (5) this rule provides a 60-
day comment period and any comments received will be considered prior 
to finalization of this rule.

List of Subjects in 7 CFR Part 922

    Apricots, Marketing agreements, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 922 is 
amended as follows:

PART 922--APRICOTS GROWN IN DESIGNATED COUNTIES IN WASHINGTON

0
1. The authority citation for 7 CFR part 922 continues to read as 
follows:

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


Sec. Sec.  922.111 and 922.321   [Suspended]

0
2. In Part 922, Sec. Sec.  922.111 and 922.321 are suspended in their 
entirety from January 9, 2013 through March 31, 2013.

    Dated: January 2, 2013.
David R. Shipman,
Administrator, Agricultural Marketing Service.
[FR Doc. 2013-00129 Filed 1-7-13; 8:45 am]
BILLING CODE 3410-02-P