Proposed Rule2024-20079
Raisins Produced From Grapes Grown in California; Recommended Decision and Opportunity To File Written Exceptions to Proposed Amendment of Marketing Order No. 989
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
September 13, 2024
Issuing agencies
Agriculture DepartmentAgricultural Marketing Service
Abstract
This recommended decision proposes to amend Marketing Order No. 989 (Order), which regulates the handling of raisins produced from grapes grown in California. The Raisin Administrative Committee, which locally administers the Order, recommended amendments that would reduce Committee size, eliminate the designated cooperative bargaining association member seat, lower quorum requirements, remove producer district representation, remove the requirement for separate member and alternate nominations for independent and small cooperative producers, remove factors for establishing marketing policy, add language to clarify the quality of reconditioned raisins, add authority to accept voluntary contributions, and add language regarding ownership of intellectual property. In addition, the Agricultural Marketing Service (AMS) may make any such changes to the Order as may be necessary to conform to any amendment that may result from the hearing. This recommended decision invites written exceptions on the proposed amendments.
Full Text
<html>
<head>
<title>Federal Register, Volume 89 Issue 178 (Friday, September 13, 2024)</title>
</head>
<body><pre>
[Federal Register Volume 89, Number 178 (Friday, September 13, 2024)]
[Proposed Rules]
[Pages 74851-74866]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-20079]
========================================================================
Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
========================================================================
Federal Register / Vol. 89, No. 178 / Friday, September 13, 2024 /
Proposed Rules
[[Page 74851]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 989
[Doc. No. AMS-SC-23-0039; 23-J-0080]
Raisins Produced From Grapes Grown in California; Recommended
Decision and Opportunity To File Written Exceptions to Proposed
Amendment of Marketing Order No. 989
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule and opportunity to file exceptions.
-----------------------------------------------------------------------
SUMMARY: This recommended decision proposes to amend Marketing Order
No. 989 (Order), which regulates the handling of raisins produced from
grapes grown in California. The Raisin Administrative Committee, which
locally administers the Order, recommended amendments that would reduce
Committee size, eliminate the designated cooperative bargaining
association member seat, lower quorum requirements, remove producer
district representation, remove the requirement for separate member and
alternate nominations for independent and small cooperative producers,
remove factors for establishing marketing policy, add language to
clarify the quality of reconditioned raisins, add authority to accept
voluntary contributions, and add language regarding ownership of
intellectual property. In addition, the Agricultural Marketing Service
(AMS) may make any such changes to the Order as may be necessary to
conform to any amendment that may result from the hearing. This
recommended decision invites written exceptions on the proposed
amendments.
DATES: Written exceptions must be filed by October 15, 2024.
ADDRESSES: Written exceptions should be filed with the Hearing Clerk,
U.S. Department of Agriculture, Room 1031-S, Washington, DC 20250-9200;
Fax: (202) 720-9776 or via the internet at <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
All comments should reference the docket number and the date and page
number of this issue of the Federal Register. Comments will be made
available for public inspection in the Office of the Hearing Clerk
during regular business hours or can be viewed at <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
FOR FURTHER INFORMATION CONTACT: Christy Pankey, Marketing Specialist,
or Matthew Pavone, Chief, Rulemaking Services Branch, Market
Development Division, Specialty Crops Program, AMS, USDA, 1400
Independence Avenue SW, Stop 0237, Washington, DC 20250-0237;
Telephone: (202) 720-8085, or Email: <a href="/cdn-cgi/l/email-protection#a2e1cad0cbd1d6db8cf2c3ccc9c7dbe2d7d1c6c38cc5cdd4"><span class="__cf_email__" data-cfemail="8fcce7fde6fcfbf6a1dfeee1e4eaf6cffafcebeea1e8e0f9">[email protected]</span></a> or
<a href="/cdn-cgi/l/email-protection#703d1104041815075e2011061f1e1530050314115e171f06"><span class="__cf_email__" data-cfemail="b7fad6c3c3dfd2c099e7d6c1d8d9d2f7c2c4d3d699d0d8c1">[email protected]</span></a>.
Small businesses may request information on this proceeding by
contacting Richard E. Lower, Market Development Division, Specialty
Crops Program, AMS, USDA, 1400 Independence Avenue SW, Stop 0237,
Washington, DC 20250-0237; Telephone: (202) 720-8085, or Email:
<a href="/cdn-cgi/l/email-protection#e7b58e848f869583c9ab88908295a792948386c9808891"><span class="__cf_email__" data-cfemail="76241f151e170412583a19011304360305121758111900">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: Prior documents in this proceeding: Notice
of Hearing published in the January 12, 2024, issue of the Federal
Register (89 FR 2178).
This recommended decision is in conformance with the provisions of
sections 556 and 557 of title 5 of the United States Code and,
therefore, is excluded from the requirements of Executive Orders 12866,
13563, and 14094.
Notice of this rulemaking action was provided to Tribal governments
through the Department of Agriculture's (USDA) Office of Tribal
Relations.
Preliminary Statement
Notice is hereby given of the filing with the United States
Department of Agriculture's Office of the Hearing Clerk of this
recommended decision with respect to the proposed amendments to 7 CFR
part 989 (``Marketing Order 989'' or ``Order'') regulating the handling
of raisins produced from grapes grown in California and the opportunity
to file written exceptions thereto. Copies of this decision can be
obtained from Christy Pankey, whose address is listed above.
This recommended decision is issued pursuant to the provisions of
the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C.
601-674), hereinafter referred to as the ``Act,'' and the applicable
rules of practice and procedure governing the formulation and amendment
of marketing agreements and orders (7 CFR part 900).
The proposed amendments are based on the record of a public hearing
on February 13 and 14, 2024 at the office of the Raisin Administrative
Committee, 2445 Capitol Street, Suite 200, Fresno, California 93721.
Notice of this hearing was published in the Federal Register on January
12, 2024 (89 FR 2178). The notice of hearing contained four proposals
submitted to the Agricultural Marketing Service (AMS) by the Raisin
Administrative Committee (Committee). AMS also proposed to make changes
as appropriate based on the results of the hearing.
On October 20, 2022, the Committee recommended to AMS three
proposals that would: (1) amend Committee size, composition, producer
representation, and quorum requirements; (2) amend nomination
procedures for small cooperative and independent producers; (3) remove
two factors considered in the development of the annual marketing
policy; and add language to clarify the quality of reconditioned
raisins. The Committee voted on the above proposed amendments, 20 in
favor and 10 opposed, at its August 17, 2022, meeting. On August 16,
2023, the Committee also voted to recommend to AMS the inclusion of two
additional amendments that would add authority to accept voluntary
contributions and add language regarding Committee ownership of
intellectual property. These two amendments are hereinafter referred to
as Proposal No. 4. AMS received the Committee's unanimous
recommendation for those two amendments on August 21, 2023.
After reviewing all aforementioned proposals and other information
submitted by the Committee, AMS decided to schedule this matter for a
hearing.
Under Proposal No. 1, membership size would be reduced from 47 to
21 members and alternates, the designated cooperative bargaining
association member seat would be eliminated, quorum requirements would
be lowered from 25 to 14, producer district representation would be
removed, and a designated seat for an unaffiliated independent producer
member would
[[Page 74852]]
be added. Specifically, producer member seats would be decreased from
35 to 12 and handler member seats would be decreased from 10 to 8.
Proposal No. 2 entails removing the requirement for industry
candidates to be nominated as either a member or an alternate. Proposal
No. 3 would remove factor ``4'' and part of factor ``5'' from
considerations when developing the marketing policy and add language
clarifying that successfully reconditioned raisins are ``standard
raisins.''
Proposal No. 4 would enable the Committee to accept voluntary
contributions and add language regarding ownership of and rights to
intellectual property.
AMS also proposed to make any such changes as may be necessary to
the Order to conform to any amendment that may be adopted, or to
correct minor inconsistencies and typographical errors.
Ten witnesses testified at the hearing: three independent small
producers, two independent small handlers, one independent large
handler, one marketing cooperative small producer, one bargaining
association small producer, one Committee staff member, and one witness
from USDA. Eight industry witnesses supported all four proposals. One
witness, representing the Raisin Bargaining Association (RBA), opposed
the elimination of the designated cooperative bargaining association
member seat under Proposal No. 1. The USDA witness remained neutral.
The Committee is the largest among all marketing order Committees
and boards, with 47 members and 47 alternates, for a total of 94
positions. After two years of ongoing discussion and deliberation, the
Committee recommended AMS reduce its size after determining that a
substantial decline in the California raisin industry and the removal
of volume regulation authority in 2018 has resulted in a high
percentage of Committee vacancies and low attendance at Committee
meetings.
Proponents at the hearing testified that Proposals No. 1 and 2 are
expected to reduce Committee vacancies, improve participation, provide
a cost savings to the program, increase administrative efficiency, and
continue to provide fair representation while better aligning Committee
membership with the overall size of the California raisin industry.
The witness representing the RBA contended that the removal of the
designated cooperative bargaining association member seat, as
recommended by Proposal No. 1, would further diminish the RBA's ability
to act on the behalf of raisin producers. Further, the witness
testified that without the cooperative bargaining association seat
small producers would not be afforded a voice on the Committee.
Proponents of Proposal No. 1 testified, however, that a designated
seat for the RBA is no longer warranted. The proponents believe that,
were the designated cooperative bargaining association seat retained as
part of the proposed restructuring, it would provide an outsized
influence on the reduced Committee. Furthermore, proponents affirmed
that both small producers and RBA producers would retain a voice
without the designated cooperative bargaining association member seat
and would continue to be represented on the Committee through allocated
seats.
Witnesses supported Proposals No. 2-4.
Based on the hearing record, this initial decision recommends
amending the Order to incorporate Proposals No. 1-4, as they are likely
to address industry concerns without imposing undue burdens on small
businesses upon implementation.
At the conclusion of the hearing, the Administrative Law Judge
established a deadline of 20 business days from the date the transcript
corrections were made available on the AMS website (May 1, 2024) for
interested persons to file proposed findings and conclusions or written
arguments and briefs based on the evidence received at the hearing. No
briefs were filed.
Material Issues
The material issues presented on the record of hearing are as
follows:
1. Whether to:
i. Amend Sec. 989.26 to reduce Committee membership size from 47
to 21 members and alternates. Corresponding changes would be made to
Sec. 989.126.
ii. Amend Sec. 989.26 to remove the designated cooperative
bargaining association seat. Corresponding changes would remove
references to the designated cooperative bargaining association
position in Sec. 989.30.
iii Amend Sec. Sec. 989.26(c) and 989.126(a)(1) to remove producer
district representation and add an unaffiliated independent producer
member seat. Corresponding changes would remove Sec. Sec. 989.22 and
989.122, and references to producer districts in Sec. Sec.
989.29(b)(2), 989.126(a) and 989.129.
iv. Amend Sec. 989.38 to lower quorum requirements from 25 to 14.
2. Whether to amend Sec. 989.29 to eliminate the requirement for
separate nominations for independent producers or producers affiliated
with small cooperative marketing associations.
3. Whether to remove paragraph (a)(4) and the last part of
paragraph (a)(5) from Sec. 989.54, and to amend Sec. Sec. 989.24 and
989.58 by adding language that would clarify that raisins that have
been reconditioned, inspected, and certified as meeting the minimum
grade shall be classified as standard raisins.
4. Whether to add Sec. Sec. 989.63 and 989.64 to establish
authorities regarding the acceptance of voluntary contributions,
ownership rights of intellectual property, and the collection of rents/
royalties from such intellectual property.
5. Whether any conforming changes need to be made as a result of
the above proposed amendments. Conforming changes may also include
correction of non-substantive, typographical errors.
Findings and Conclusions
The following findings and conclusions on the material issues are
based on evidence presented at the hearing and the record thereof.
Material Issue No. 1--Committee Membership Size and Composition,
Producer District Representation, and Quorum Requirements
Section 989.26 ``Establishment and membership'' should be amended
to reduce the number of Committee members from 47 to 21. This amendment
would decrease the number of producer members from 35 to 12 and handler
members from 10 to 8. Further, Sec. 989.26 should be amended to
eliminate the designated cooperative bargaining association member
position. The public member position would remain unchanged.
Corresponding changes would reapportion producer and handler members in
Sec. 989.126 and remove the references to the cooperative bargaining
association and cooperative bargaining association(s) officers or
employees in Sec. 989.30.
Additionally, Sec. Sec. 989.26(c) and 989.126(a) should be amended
to remove producer districts and to designate one unaffiliated
independent producer member and alternate position on the Committee.
This change would combine nominations for the current three districts
into a single ballot for independent producer members and alternates
and include an additional nomination for an unaffiliated independent
producer member and alternate position. Corresponding changes would
remove Sec. Sec. 989.22 and 989.122, and references to producer
districts in Sec. Sec. 989.29(b)(2), 989.126(a) and 989.129.
[[Page 74853]]
Finally, Sec. 989.38 ``Procedure'' should be amended to lower
quorum requirements from 25 to 14.
The evidence of record is that the Committee has experienced an
increase in Committee vacancies due to a substantial decline in the
size of the California raisin industry. Lower levels of engagement from
industry members have also been observed since the removal of volume
regulation authority from the Order in 2018. The record further shows
that the raisin industry's decline is a result of volatile producer
returns over the past two decades, and that industry members lost
interest in attending Committee meetings after volume regulation
authority was removed in 2018.
The Committee believes reducing Committee size and reapportioning
membership, including the elimination of the designated cooperative
bargaining association member seat and the removal of producer
districts, would reduce Committee vacancies and improve attendance,
provide a cost savings, increase administrative efficiencies, provide
fair representation, and balance Committee membership with the overall
size of the California raisin industry. The amendment to lower quorum
requirements to align with the reduced Committee size would also aid in
achieving those goals.
Currently, Sec. 989.26 provides that Committee membership consist
of 47 members, of whom 35 shall represent producers, 10 shall represent
handlers, 1 shall represent the cooperative bargaining association, and
1 shall be a public member. For each member of the Committee there
shall be an alternate member who shall have the same qualifications as
the member for whom they represent as an alternate. The industry is
comprised of three marketing segments: independent producers and
handlers, a cooperative marketing association--Sun-Maid Growers of
California (Sun-Maid), and a cooperative bargaining association--the
Raisin Bargaining Association (RBA). Member representation, excluding
all designated seats, is based on a proportional share system.
Witnesses testified that this system ensures fair representation on the
Committee by allocating producer and handler seats based on each
marketing segment's proportional share or contribution to total raisin
acquisitions. The designated cooperative bargaining association member
and public member seats are not based on proportional shares. Section
989.26(e) provides the cooperative bargaining association member shall
be selected from the cooperative bargaining association(s) and the
public member shall be nominated by Committee members.
Proposal No. 1 would reduce the size of the Committee from 47 to 21
members. In addition, the proposal includes the elimination of the
designated cooperative bargaining association member seat, the addition
of an unaffiliated independent producer member seat, removal of
producer districts, and lowering Committee quorum requirements. The
proportional share system and requirement that each member have an
alternate would remain unchanged. The restructured Committee would
consist of the following:
<bullet> twelve (12) producer member seats (reduced from 35), of
which one independent producer member seat would be allocated to an
unaffiliated independent producer,
<bullet> eight (8) handler members seats (reduced from 10), and
<bullet> one (1) public member.
In addition, the quorum requirement would be reduced from 25 to 14.
The record shows the decline in the industry, the high percentage
of Committee vacancies, and low attendance rates substantiate the
proposed amendment to reduce Committee size. Several witnesses
testified that the decline in the crop size and the number of producers
has made it increasingly difficult to fill Committee seats. This has
led to a number of issues with the Committee's ability to effectively
administer the program due to the large number of vacancies and low
attendance.
Industry Decline
The economic viability of raisins produced from grapes grown in
California has been on an unsustainable path for many years. Several
witnesses testified to the significant decrease in raisin bearing
acres, from 225,000 to 98,000, and the number of raisin producers, from
3,500 to 1,500, due to industry instability over the past two decades.
Hearing evidence shows the decline is attributable to the various
challenges the California raisin industry has faced since its peak in
2000 and to the different strategies that raisin producers have
employed in an effort to mitigate the financial strain posed by such
challenges. The record shows these challenges, including
overproduction, foreign competition, changing consumer preferences, and
overall high production costs have negatively impacted producer
returns.
Overproduction and foreign competition have created a challenging
environment for raisin producers, impacting their ability to achieve
favorable returns. Hearing evidence shows gradual increases in raisin
production by foreign countries, who benefit from low production costs
and government subsidies, diminished the California raisin industry's
world market share and depressed prices for domestic handlers and
producers. Witnesses testified that the California raisin industry lost
its pricing power in global markets after raisin production in foreign
countries such as Turkey, Uzbekistan, and Afghanistan surpassed U.S.
production and drove the prices of raisins down. For the California
raisin industry, some export markets such as Europe, where the industry
had established a strong foothold, are no longer available to U.S.
raisin handlers because they cannot compete due to higher shipping
costs. Further, one witness testified that until the 2000's, the
industry remained competitive despite increases in foreign production.
Domestic raisin producers, however, experienced a sharp downturn in
profitability after a four-year period of large crops that resulted in
a tremendous surplus, market oversaturation, and reduced pricing. Thus,
the California raisin industry, which once dominated the global market
by producing over 50 percent of the world's supply in the 1990s, now
accounts for approximately just 8 percent of the world market share
today.
The hearing record also shows consumer preferences have shifted
away from raisins, furthering the decline in raisin demand. One witness
testified that raisins are not as popular with younger generations,
such as Millennials and Generation Z. Such changes in consumer
preferences have contributed to decreases in demand and lower sales and
revenue for producers, leading to declining production levels and
diminished returns.
High production costs due to drought, labor shortage, and other
factors have also contributed to less than favorable returns for raisin
producers. Witnesses testified to rising labor costs, such as double-
digit wage inflation mandated by the State of California, and labor
shortages, particularly during harvest. These factors require producers
to offer higher wages to attract or retain workers, and have
systemically increased the cost of raisin production. In addition,
rising input costs related to irrigation, fertilizer, environmental
regulation, taxation, and multiple years of drought have also driven
the cost of production higher. As such, cost increases have made raisin
production more expensive, leading some producers to scale back or
abandon raisin production altogether.
[[Page 74854]]
The record shows that the myriad of challenges faced by the
California raisin industry has pushed many raisin producers to either
sell their land or transition to more profitable crops. One witness
testified that among the largest factors contributing to the industry's
decline is producers pulling out vineyards due to insufficient producer
returns. Another witness testified that the California raisin industry
has shrunk over the years due to higher-value crops replacing raisins
on farmland in the production area. The record suggests raisin
producers have used these tactics, and other strategies, such as
cutting production costs that inevitably led to greater decreases in
production, to optimize returns. Overall, the increase in Committee
vacancies and low attendance at meetings is attributable to the
decrease in raisin production, and the number of raisin producers, as a
result of declining demand, high production costs, and low grower
returns.
The record shows the decline in the California raisin industry has
directly impacted the number of Committee vacancies as there are fewer
producers in industry to draw from. Further, low attendance rates at
Committee meetings are attributable to both the increase in Committee
vacancies and to raisin producers becoming uninterested in Committee
operations after the removal of volume regulation authority from the
Order. The record further indicates that the Committee is the largest
of all marketing orders, comprising 47 members and 47 alternates.
However, witnesses testified that the Committee has increasingly
struggled to fill member positions due to the significant decline in
the number of producers and bearing acres in the past 20 years, and
that this difficulty arises because the Committee did not downsize in
response to the shrinking industry, leading to a rise in vacancies.
Committee Vacancies
Record evidence includes a data table from the Committee that
highlights low levels of attendance and high vacancies during Committee
meetings. The Committee's data, illustrated in Table 1, a replication
of exhibit 16 from the hearing, shows the attendance history for full
Committee meetings conducted between August 2019 and June 2023. The
Committee held 23 Committee meetings during this period, which appears
in column 1. The date each meeting was held appears in column 2. The
percentage of members present at each meeting appears in column 3 and
is computed by dividing the total number of members voting at each
meeting, which appears in column 4, by the total number of Committee
seats (47). The total number of members in attendance at each meeting
appears in column 5. The total number of alternate members voting at
each meeting appears in column 6. The total number of alternates in
attendance at each meeting appears in column 7, and the total number of
vacant seats at each meeting appears in column 8. Witnesses testified
that all Committee meetings are held in-person with an option for
members and alternates to participate either by conference call or
video.
BILLING CODE P
[[Page 74855]]
[GRAPHIC] [TIFF OMITTED] TP13SE24.044
BILLING CODE C
Column 8 in Table 1 illustrates a gradual increase in Committee
vacancies, from 14 to 21, for full Committee meetings held between
August 2019 and June 2023. The Table further shows an average of 17
positions have remained vacant for approximately 4 years.
Low Attendance
The increase in Committee vacancies has also contributed to low
attendance rates. Full Committee meetings with low attendance, between
26 to 28 members present, are highlighted in column 4 of Table 1.
Dividing the number of highlighted cells (7) by the number of full
Committee meetings held (23) equates to an average low attendance rate
of 30 percent for full Committee meetings held between August 2019 to
June 2023.
Witnesses testified that for much of that time, initial member
attendance at meetings was approximately 60 percent for full members
and roughly 25 percent for alternates. These percentages suggest
[[Page 74856]]
that not only are there fewer producers in the industry, but those that
remain are likely less interested in committing to long-term Committee
service when faced with economic uncertainty and instability due to
volatile producer returns.
Removal of Volume Regulation
On November 26, 2018, USDA removed all volume regulation and
reserve pool authority after the United States Supreme Court, in Horne
v. USDA, ruled that the application of the Order's reserve pool
authority to the Horne's raisin operation was a taking under the Fifth
Amendment to the United States Constitution.
Attendance rates started to decline when the industry removed the
authority for volume regulation from the Order. Record evidence shows
that Committee meetings were once filled with members when volume
regulation was in effect. Witnesses testified that staff did not have
to make phone calls and send text messages to get people into meetings
because there were so many Committee actions that affected producers'
and handlers' bottom-line. Members and alternates wanted to have their
opinions heard and to vote on specific volume regulations and reserve
pool recommendations and the economic repercussions that would result
from them. Historically, given the impact that volume regulation had on
the industry, Committee membership was intentionally established as the
largest of all marketing orders with 47 members and 47 alternates to
ensure equitable representation during the establishment of free and
reserve percentages in Committee meetings.
Prior to its removal, volume regulation authorized the Committee to
establish free and reserve percentages based on production levels and
trade demand as a way to stabilize surplus by controlling the supply of
California raisins. Under this regulation, a portion of total raisins
produced would be free for handlers to acquire and dispose of in
approved market channels, and the other portion would be held in
reserve pools by the Committee. This prevented oversupply and volatile
fluctuations in the market allowing raisin producers to sell a portion
of their crop at a return above the cost of production. The other
portion held in reserves was disposed by the Committee in different
outlets under various reserve programs. Proceeds from the disposal of
raisins held in reserves would be distributed to raisin producers when
sold.
The contention with volume regulation stemmed from the disposal of
raisins held in reserve. The hearing record shows that raisin producers
were not satisfied with the process whereby reserve raisins were sold
in export channels. One witness testified that hundreds and hundreds of
people attended meetings when volume regulation was being considered,
but after the United States Supreme Court ruling that the reserve
system was a taking, and the Order was subsequently amended to remove
volume regulation authority, producers lost interest in attending
meetings because there was no reserve program to discuss and vote on.
Quorum Requirements
Committee vacancies also increase the difficulty in achieving
quorum at meetings with fewer members. Witnesses testified that the
Committee often struggles to make quorum and staff must make phone
calls to members the day of meetings to get attendance rates up.
Further, record evidence shows one instance when quorum requirements
were not met during the period shown on Table 1.
Currently under the Order, the quorum requirement is 25. It is a
fixed number and is based on the number of Committee positions expected
to be filled. Thus, unfilled Committee seats make it more difficult to
reach quorum and increases the probability that quorum requirements may
not be met when attendance levels are low. One witness testified that
there were several meetings where they were barely enough members
present to constitute a quorum and conduct Committee business. Another
witness testified that the majority of vacant seats are allocated to
independent producer alternates, and if these seats are not filled, the
absence of a full member at a meeting increases the likelihood of not
meeting quorum requirements due to there being no alternate to fill in
for the absent member.
The record shows the Committee continued to struggle meeting quorum
requirements despite ramping up outreach efforts. Witnesses testified
that when quorum is not met, it reduces administrative effectiveness
and efficiency and increases nonproductive costs, such as expenses
associated with member travel and staff hours because full Committee
meetings must be delayed and rescheduled.
Amendment 1--Reducing Committee Size
Reducing Committee size and reapportioning membership, including
the elimination of the designated cooperative bargaining association
member seat and the removal of producer districts, along with lowering
quorum requirements, would address the current issues concerning
Committee vacancies, low attendance, and meeting quorum. Further, it
would provide a cost savings, increase administrative efficiencies,
continue to provide fair representation, and balance Committee
membership with the overall size of the California raisin industry.
Decreasing the number of Committee seats would reduce the
likelihood of position vacancies by making it easier to fill each seat.
Table 1 shows an average of 41 members currently attend Committee
meetings. Column 5 shows 30 full Committee members on average attend
Committee meetings and column 7 shows an average of 11 alternate
members, for a total of 41 members on average. Witnesses testified that
reducing the committee size may help reduce Committee vacancies. Based
on the current averages in Table 1, the Committee would have less
difficulty filling 21 member and alternate seats.
Amendment 2--Lowering Quorum Requirements
This proposal also reduces quorum requirements from 25 to 14.
Reducing quorum requirements is necessary to effectuate the proposed
amendment, if implemented. The proposed quorum is 67 percent of voting
membership (14 divided by 21 multiplied by 100). This is slightly
higher than the current quorum which is 53 percent of voting membership
(25 divided by 47 multiplied by 100). Witnesses testified that the
higher voting percentage will provide for fair representation by
ensuring both producer and handler members are in attendance at
meetings to vote on formal recommendations. This also promotes
transparency and representation by ensuring no single segment can
dictate Committee operations and that all perspectives of the industry
are considered when decisions are made. In addition, the probability of
not meeting quorum requirements is also reduced with the smaller
Committee, increasing administrative efficiencies, and providing a cost
savings by decreasing the number of delayed and rescheduled meetings
due to low attendance.
A reduced Committee size would also increase competitiveness in
nominations and reduce nepotism. Witnesses testified that much of the
industry is vertically integrated, where producers own or are employed
by a packinghouse, making them handler-affiliated. In these situations,
such a producer could occupy a producer or handler member seat, and in
many instances it's a family member that
[[Page 74857]]
occupies the other seat. Thus, a smaller Committee size would reduce
the chances of multiple family members serving due to increased
competitiveness.
Amendment 3--Removing Producer Districts
Witnesses testified that many independent producer seats are filled
with handler-affiliated producers and the addition of the unaffiliated
independent producer member seat ensures fair representation by having
a ``true'' producer on the Committee.
The evidence of record is that an unaffiliated independent producer
member is a producer that has no ownership interest in a packinghouse.
Such a producer would have no proprietary or employment affiliation to
any cooperative marketing association, cooperative bargaining
association, or a handler. In addition, in the event there are no
qualified candidates to fill the unaffiliated independent producer
member or alternate seats, this proposal also adds language to Sec.
989.26 that ensures the designated unaffiliated member, and alternate
seats are filled by any independent producer candidates not otherwise
slated.
The removal of producer districts also ensures equitable
representation on the Committee. Currently under the Order, three
independent producer districts exist. All counties north of Fresno
County, California, are represented in District No. 1, all counties
south of Fresno County, California, are represented in District No. 2,
and all of Fresno County, California, is represented in District No. 3.
Independent producer members are apportioned as follows; one producer
member each for Districts No. 1 and 2, and the remaining producer
members to which independent and small cooperative producers are
entitled in District No. 3. Separate nomination ballots are mailed to
all three districts.
The record shows the decline in industry has directly impacted
independent producer member nominations, leaving fewer eligible
producers in some of the designated producer districts. Witnesses
testified that the industry had more active producers competing for
nominations before the decline. Witnesses further testified that the
candidacy pool for independent producers has decreased, leading to
continuous nominations of the same producers in Districts 1 and 2,
resulting in inequitable representation in producer districts. One
witness, identifying as a small producer, testified that this gives an
unfair advantage to those much smaller producing regions by providing
automatic seats. This results in an imbalance where industry members in
the larger District 3 have less representation, as they must compete
for seats on the Committee. Meanwhile, producers in the smaller
Districts 1 and 2 face less competition for a seat, giving them greater
representation on the Committee that is disproportionate to their
district size.
This proposed amendment would remove the requirement that
independent producer members represent districts and would combine
nominations for the three producer districts into one ballot instead of
three individual ballots mailed to each district.
The record shows combining producer districts ensures fair
representation. Witnesses testified that the removal of producer
districts would increase competitiveness, allowing for a fair
nomination process. This is because combining districts would expand
the candidacy pool for each producer member position by increasing
competition for nominations and would ensure all independent and small
cooperative producers have an equal opportunity to be nominated.
Combining districts would also lead to a reduced administrative burden
and cost savings by reducing the number of separate nomination meetings
required to be held and eliminating the tabulation of separate ballots
for each district.
Further, this proposal would ensure independent producer member
seats are filled in the event producer districts become too small to
function adequately due to the significant decline in the number of
producers in industry.
Amendment 4--Eliminating Cooperative Bargaining Association Member Seat
This proposal would also eliminate the designated cooperative
bargaining association member seat from the restructured Committee.
Some witnesses testified that the designated cooperative bargaining
association member seat is no longer warranted after volume regulation
was removed from the Order. Further, due to a significant decline in
the RBA's raisin acquisition totals, a designated member seat would
provide the RBA an outsized influence and perpetuate unequal
representation on the Committee.
The evidence of record is that on August 14, 2022, the Committee
voted 20 in support and 10 opposed on Proposals No. 1-3 and voted
unanimously in favor of Proposal No. 4 when it was considered on August
16, 2023. Based on testimony, eight of the ten members voting in
opposition represented the RBA. Those members disagreed with the
removal of the designated cooperative bargaining association member
seat, but supported all other amendments proposed. One witness,
representing the RBA, testified in opposition to the elimination of the
designated cooperative bargaining association member seat at the
hearing.
The RBA was established to provide California raisin producers with
collective bargaining power when negotiating prices with handlers.
Witnesses testified that, since the late 1940's, the industry was
plagued with huge swings in production and low producer returns which
led to the formation of the RBA. Under the RBA, producers leverage
their collective strength to negotiate fair prices and ensure economic
stability.
The record shows that successful collective bargaining requires
strong industry representation and confidential pricing agreements. The
witness representing the RBA testified that at one time the RBA
represented approximately 40 percent of total raisin acquisitions,
reflecting large industry representation. Several witnesses testified
that the RBA manager was the only person who knew which handlers signed
the pricing agreement, ensuring confidentiality. This would prevent
free riders from benefiting from the RBA's agreements.
In 1967, volume regulation and Committee size were amended to
provide inclusion and representation for the newly formed cooperative
bargaining association, established in 1966. Committee size was
increased by one member to represent the RBA because the preponderance
of evidence, at that time, indicated the cooperative bargaining
association had become a major entity in the raisin industry and should
directly participate in marketing decisions.
Volume regulation was also modified to establish preliminary free
percentages at an earlier date to give certainty as to the quantity to
be released in free tonnage outlets, and to provide a basis for
producers and handlers to negotiate an appropriate field price.
Witnesses testified that the designated cooperative bargaining
association member seat was reserved exclusively for the managerial
officer of the RBA due to confidentiality of RBA pricing agreements and
volume regulation.
Under volume regulation, not less than 65 percent of desirable free
tonnage was released until the Committee had determined that field
prices were firmly established, and open price contracts have been
closed. Thus, a portion of free
[[Page 74858]]
tonnage was withheld until field prices were established, and the RBA
manager was the only person that could supply the information as to
whether or not the RBA had successfully bargained for a price.
The Committee also used the established field price negotiated by
the RBA as a ``base price'' for export programs, such as the Raisin-
Back or Cash-Back program. Witnesses testified, however, that these
programs no longer exist after volume regulation authority was removed
from the Order and, therefore, the environment in which the RBA manager
was necessary to participate in Committee deliberations on volume
regulation no longer exists.
Further, the record shows the RBA has diminished in influence due
to a decline in membership and raisin acquisition totals. Such a
decline in acquisition totals no longer warrants a designated seat
based on proportional acquisition totals. The witness representing the
RBA explained that the RBA faced many challenges with membership, such
as compliance issues and contract violations, and has lost membership
in part due to the substantial decline in the number of producers and
acreage industrywide. The witness testified that one of the biggest
factors contributing to low RBA membership is producers pulling raisin
acreage out of production due to insufficient returns over the past 7
to 10 years, which has weakened representation and diminished raisin
acquisitions under the RBA.
The record also shows the RBA faced difficulty negotiating prices
due to foreign competitors depressing the price of raisins. The RBA
witness testified to economic hardships due to foreign competition with
production costs that are 20 to 30 percent lower. This weakens the
RBA's position to bargain because foreign countries are selling raisins
at a lower price due to their low production costs. The witness further
explained that if the RBA cannot get a fair price, it is disastrous for
raisin producers and further accelerates the rate that producer pull
raisins out of production. Additionally, the witness explained that
more RBA members and increased member tonnage would provide greater
leverage to negotiate, but overall acquisition totals have gone down.
The record shows total RBA raisin acquisitions declined from 30 percent
of the total industry acquisitions to 12.5 percent in the past 8 years.
Overall, witnesses testified that the elimination of the designated
cooperative bargaining association seat would provide fair and
equitable representation on the Committee because membership would be
based on a proportional share system. The record further shows that RBA
producers will maintain seats on the Committee based on their
proportional share of total acquisitions and could gain more seats if
their total raisin acquisitions were to increase. This means that each
industry marketing segment represented would be equal or proportionate
to total raisins produced and/or acquired. Thus, the number of seats
allocated to the RBA would be solely based on their share of total
raisin acquisitions, similarly to other industry groups on the
Committee. Further, if the cooperative bargaining association
designated seat were to remain in the restructured Committee, it would
provide an outsized or unequal representation because the cooperative
bargaining association would be over-represented proportionally to the
other industry segments on the Committee.
The witness representing the RBA contended that if the designated
seat is eliminated, it would further diminish RBA's ability to work on
the behalf of raisin producers, that the Committee structure would be
too overladen with handler representation because the cooperative
marketing association, Sun-Maid, would have 50 percent representation
on the Committee, and that the RBA should continue to be involved in
marketing discussions because they represent independent small
producers. The designated cooperative bargaining association member
seat, however, is not justified based on record evidence. With the
removal of volume regulation authority from the Order and the decline
in RBA member representation and acquisition totals, the cooperative
bargaining association no longer warrants a designated seat.
Additionally, the record shows that much of the industry is
vertically integrated, with many entities engaged as both a producer
and a handler. The proposed restructured Committee accounts for and
reflects these changes in industry composition over the years and the
addition of the unaffiliated independent producer member seat would
ensure independent producers have a voice on the Committee. The seat
also helps to ensure the majority of Committee members represent
producers and that there isn't an unfair balance favoring handler
representation on the Committee. Finally, all Committee meetings are
open to the public and the RBA could continue to participate in
Committee deliberations through allocated producer member seats.
The RBA witness discussed two alternatives for a new Committee size
and structure on the record. The witness suggested that Committee size
should not be based on acquisition totals, that every handler should
have a seat, and each segment of producers would choose how many
producer representatives would serve on the Committee. AMS does not
consider this a viable alternative because the witness did not provide
any specifics for a proposed restructuring of the Committee. Further,
since there are approximately 17 handlers, the alternative would likely
result in a Committee size larger than the current size of the
Committee. The second alternative proposed by the witness included
keeping the designated seat for a total of 22 members and alternates.
This is also not a viable alternative because the designated seat would
provide the RBA with unequitable representation on the Committee
because the seat would not be based on any proportional share of
industry acquisitions.
Additionally, the hearing record shows that the Committee discussed
several alternatives to the proposed Committee structure over several
years before ultimately deciding 21 members and alternates would be an
appropriate Committee size. Witnesses testified the Rulemaking
Workgroup and Administrative Issues Subcommittee held in-depth
discussions and reviewed a multitude of scenarios, proposals, and
several reduction options, including 70, 60, and 50 percent size
reductions in approximately 12 meetings between January 2020 and July
2023. Finally, one witness testified that the Committee size of 47
members and alternates was established in an era in the late 1940s when
industry had approximately 5,000 to 7,000 producers. The current
proposal to reduce the Committee size, given the diminished industry
make-up, would actually create a Committee that is more representative
of producers than as compared to the Committee historically. Thus, the
proposed amendments discussed under Material Issue 1 would better align
Committee membership with the overall size and configuration of the
current California raisin industry by ensuring Committee composition is
balanced with the size and needs of the industry.
For the reason stated above, Sec. 989.26 ``Establishment and
membership'' should be amended to reduce the number of Committee
members from 47 to 21. Further, Sec. 989.26 should be amended to
eliminate the designated cooperative bargaining association member
position. Sections 989.26(c) and 989.126(a)(1) should be amended to
remove producer districts and to add a
[[Page 74859]]
new designated seat for an unaffiliated independent producer member,
and Sec. 989.38 ``Procedure'' should be amended to lower quorum
requirements from 25 to 14.
Material Issue No. 2--Nomination Procedures for Independent and Small
Cooperative Producers
Section 989.29 ``Initial members and nomination of successor
members'' should be amended to eliminate the requirement for separate
nominations for independent producers or producers affiliated with
small cooperative marketing associations. Currently no small
cooperative marketing association exists within industry. This proposed
amendment would remove the requirement that independent producers must
be nominated specifically for either a full Committee seat or an
alternate member seat. Further, in addition to the proposed amendment
that would remove producer district representation by combining
nominees for three separate districts into a single ballot, this
amendment would eliminate the separate tabulation procedures for full
member and alternate member nominations. The notification of nomination
meetings would remain unchanged.
The evidence of record is that the Order was amended in 2018 to
require separate nomination procedures as a method to increase
independent producer nominations by ensuring independent producers
interested in serving only as an alternate were not nominated as full
members. At that time, the Committee believed providing this additional
flexibility for independent producer nominations would encourage
participation. However, a witness testified that separate nominations
actually discouraged participation on the Committee. Witnesses
testified that the number of alternate members attending meetings
declined because nominees may have been under the notion that
alternates did not need to attend every meeting, fueling low attendance
rates and absenteeism.
The record further shows that the number of independent producers
nominated did not increase but instead declined, evidenced by the
increase in the number of vacant alternate positions shown in table 1
column 8. Witnesses testified that both full members and alternate
members should attend meetings to stay informed on industry issues that
may require a future vote, and that reverting back to the original
nomination procedures for independent producers would streamline the
nomination process and ensure alternate seats are filled. The proposed
nomination process would be streamlined because there would be one
tabulation of votes instead of two separate tabulations, one for full
members and one for alternate members. The Committee also believes that
nominations would not be necessary with a smaller Committee size
because with fewer seats, competitiveness in nominations would
increase. Additionally, current average attendance rates in Table 1
show approximately 41 members would likely be able to serve. Table 1
column 5 shows 30 full Committee members on average attend Committee
meetings and column 7 shows an average of 11 alternate members, for a
total of 41 members on average.
This proposed amendment would remove language describing separate
nomination procedures and add language stipulating one tabulation of
ballots according to the highest number of votes for full member and
alternate seats. With this revised process, an independent producer
receiving the highest number of votes would be designated as the first
independent producer member nominee. The producer receiving the second
highest number of votes would be designated as the second independent
producer member nominee. This tabulation process would continue until
all independent producer member seats are nominated. The nominee then
receiving the next highest number of votes would be designated as an
alternate member nominee, with this process continuing until all seats
are filled.
For the reasons stated above, Sec. 989.29 ``Initial members and
nomination of successor members'' should be amended to eliminate the
requirement for separate nominations for independent producers or
producers affiliated with small cooperative marketing associations.
Material Issue No. 3--Marketing Policy and Quality Standards for
Reconditioned Raisins
Section 989.54(a) ``Marketing Policy'' should be amended to remove
factor number 4 ``An estimated desirable carryout at the end of the
crop year;'' and the last part of factor number 5 ``, considering the
estimated world raisin supply and demand situation.''
Sections 989.24 ``Standard raisins, off-grade raisins, other
failing raisins, and raisin residual material'' and 989.58 ``Natural
condition raisins'' should be amended to add language clarifying the
quality of successfully reconditioned raisins as standard raisins. This
would add language that clarifies that successfully reconditioned
raisins that meet the Order's minimum grade, quality, and condition
standards are ``standard raisins.''
Marketing Policy
The evidence of record is that factor number 4 and the latter
portion of factor number 5 are no longer necessary factors to consider
in the development of the annual marketing policy due to the removal of
volume regulation authority from the Order. Additionally, the record
shows the report relied upon to determine the estimated world raisin
supply and demand under factor 5 is no longer published and that it
would be cost prohibitive to solicit similar information from other
sources. The Committee believes that factor 4 and part of factor 5 are
market determinants no longer considered by the Committee and removal
would increase administrative efficiencies by lessening the
administrative burden and costs associated with researching and
assembling data that is not needed.
The record shows factor number 4 and part of factor number 5 are
unnecessary marketing policy considerations without volume regulation.
Witnesses testified that the Committee has not considered a ``desirable
carryout'' listed under Factor 4 since 2019. This is because the
``desirable carryout'' is the free tonnage inventory at the end of a
crop year that would be considered desirable to carry over into the
succeeding crop year to maintain continuity of sales until new crop
raisins had become available. Witnesses also testified that the
information for the latter part of factor 5 was obtained from USDA's
National Agricultural Statistics Service (NASS). NASS, however,
discontinued its ``Raisins: World Market and Trade Report'', in 2019.
Further, the consideration of world raisin supply and demand was
primarily to aid in the estimation of probable export market
requirements for reserve raisins during a crop year under volume
regulation. The Committee no longer establishes free and reserve
tonnage percentages, thus factor number 4 ``An estimated desirable
carryout at the end of the crop year;'' and the last part of factor
number 5 ``, considering the estimated world raisin supply and demand
situation'' are unnecessary under the current administration of the
Order.
Additionally, record evidence shows that reports on world supply
and demand may be obtained from other sources. Witnesses testified
however, that such reports are expensive and, again, unnecessary after
the removal of volume regulation authority from the
[[Page 74860]]
Order. Removing factor 4 and the latter part of factor 5 would allow
the Committee to focus on pertinent factors to be considered in
formulating its marketing policy, instead of considering factors the
Committee believes are unnecessary, thereby reducing administrative
burden and increasing efficiency. For the reasons stated above, Sec.
989.54(a) ``Marketing Policy'' factor number 4 ``An estimated desirable
carryout at the end of the crop year;'' and the latter part of factor
number 5 ``, considering the estimated world raisin supply and demand
situation'' should be removed.
Reconditioned Raisins
The evidence of record is that negative impressions about
reconditioned raisins has adversely impacted the sales of such
reconditioned fruit. Successfully reconditioned raisins meeting minimum
grade, quality, and condition standards under the Order, however,
should not be differentiated from other standard raisins. The Committee
believes the additional language clarifying the quality of
reconditioned raisins as standard raisins would improve efficiencies by
streamlining the sales process. Further, this language would help to
overcome existing obstacles experienced in the marketing of California
raisins and achieve increased sales and sustained growth.
To dispel misconceptions about the quality of reconditioned
raisins, this proposal would add a paragraph to Sec. 989.58 explaining
that all raisins which have been inspected and certified as meeting the
minimum grade, quality, and condition standards, whether upon incoming
inspection or upon later inspection after reconditioning, shall be
determined to be standard raisins, labeled accordingly, and shall be
eligible for commercial disposition as natural condition raisins or
packed raisins in normal outlets. Further Sec. 989.24(b) would be
amended to clarify that off-grade raisins successfully reconditioned
are standard raisins.
The record shows that handlers are adjusting to the decline in
raisin production over the past two decades by optimizing sales to meet
customer demand. One witness testified there is a greater need to
eliminate the differentiation and stigma associated with reconditioned
raisins because the volume of production has declined. There is a
negative impression in the raisin market that the quality of
reconditioned raisins that have been reworked and reinspected to meet
the Order's minimum grade requirements, however, is somehow diminished.
This is evidenced by past sale specifications, from both government and
outside customer requests, that the product cannot be reconditioned
fruit.
Negative impressions associated with reconditioned raisins often
revolve around concerns regarding their perceived inferior quality
compared to non-reconditioned raisins that meet minimum grade
requirements. The record shows, however, that reconditioning is the
process of removing defective raisins from a lot, with the end result
being a lot comprised of natural condition raisins that meet the
Order's requirements. Currently, raisins that fail incoming
inspections, or other off-grade raisins, are either disposed in
eligible non-normal outlets, returned to the producer, or
reconditioned. Witnesses testified that most off-grade raisins are
reconditioned by the handler, but sometimes they are returned to
producers for reconditioning.
Witnesses further testified that the negative label attached to
reconditioned raisins stems from the misconception about the
reconditioning process and final product. Witnesses explained that
handlers apply different reconditioning processes, ranging from
minimally invasive to more intense processes. Such processes are highly
dependent on the defects identified within a specified lot. Minimal
processes include shaking or vibrating raisins on a conveyor system to
remove foreign material or drying raisins with excessive moisture on
trays to an acceptable level. A more intense process includes washing
and drying to remove moldy or fermented raisins. During this process
raisins are placed in a hot water bath that travels along augers and
mold belts, removing defective raisins. Raisins that remain are then
transferred to a tray and re-dried. Essentially, all reconditioning
processes remove defective raisins to improve the grade and quality of
the lot to meet incoming inspection requirements. Further, off-grade
raisins returned to the producer and reconditioned by them before being
shipped back to the handler are not classified as reconditioned
raisins. Witnesses testified that raisins reconditioned on producer
premises have no designation that the lot was reconditioned, thus
including language that clarifies that successfully reconditioned
raisins are standard raisins provides for fair marketing practices.
Further, the record shows that reconditioning techniques have improved
over the years.
Witnesses also testified that the negative misconception of
reconditioned raisins is from an outdated categorization for
reconditioned fruit when volume regulation was authorized under the
Order. Under volume regulation, raisins reconditioned by handlers were
held in a separate reserve pool, and at that time, handlers didn't
always successfully recondition product held in the pool. Witnesses
testified that today, processors must ensure raisins meet the Order's
minimum grade requirements, because outlets under volume regulation
were removed from the Order and no reserve pool for reconditioned
raisins currently exists.
The record shows the addition of clarifying language to the Order
would help to dispel the negative perception associated with
reconditioned raisins, streamlining the sales of such fruit by reducing
unnecessary friction points in the purchase of reconditioned raisins.
Additionally, the USDA specifications for commodity purchases no longer
distinguish between reconditioned and non-reconditioned raisins that
meet minimum grade requirements. For the reasons stated above,
Sec. Sec. 989.24 ``Standard raisins, off-grade raisins, other failing
raisins, and raisin residual material'' and 989.58 ``Natural condition
raisins'' should be amended to add language clarifying the quality of
successfully reconditioned raisins as standard raisins.
Material Issue No. 4--Contribution Authority and Patent/Trademark
Authority
Sections Sec. Sec. 989.63 ``Contributions'' and 989.64 ``Patents,
copyrights, trademarks, inventions, product formulations, and
publications'' should be added to establish authority to accept
voluntary contributions and authority related to the ownership of, and
rights to, intellectual property and the collection of rents/royalties
from the same. This new authority would also provide directions for
disposition of any intellectual property developed through funds
received by the Committee should the Order be terminated.
This would allow the Committee to accept voluntary contributions
that would be free from any encumbrances by the donor, and to develop
intellectual property, including patents, copyrights, trademarks,
inventions, product formulations, or publications, through the use of
Order funds. Additionally, such funds, including funds received from
the licensing or use of intellectual property developed, shall only be
used to pay expenses authorized under the Order. Further, all
intellectual property developed through the use of funds received by
the Committee would be the property of the U.S. government. Ownership
and related rights of
[[Page 74861]]
intellectual property developed through funds collected by the
Committee and funds contributed by another organization or person,
would be determined by agreement between the Committee and the person
or organization contributing funds towards the development of such
intellectual property stipulating the above. Similarly, should any
intellectual property be licensed to the Committee, the related rights
to such licensure would be determined by agreement between the
Committee and the person or organization permitting licensure. The
Committee believes the addition of authorities to receive voluntary
contributions and to develop intellectual property under the Order
would generate revenue for the industry through the marketing of
California raisins and provide funding for additional research and
promotion and other activities under the Order.
The evidence of record is that the Committee may soon enter into a
sublicensing agreement with the California Department of Food and
Agriculture (CDFA) for intellectual property rights to the California
Dancing Raisins after film producers interested in remaking a movie
about the characters contacted the Committee.
The CDFA is the owner of the intellectual property rights to the
California Dancing Raisins. Witnesses testified that the characters
were developed under the California State Marketing Order by the
California Raisin Marketing Board (CRMB). The CRMB, however, was
subsequently terminated and ownership of all intellectual property
under the CRMB reverted to the State of California. The CDFA is
currently seeking to sublicense, or transfer, the characters, and other
intellectual property, to the Committee. Such arrangement would be by a
separate agreement between the parties.
Witnesses testified that voluntary contribution authority would
allow the Committee to receive funds if the characters were to be
sublicensed in the future. Currently, the Order does not include
provisions that enable the Committee to receive and use funds, such as
donations, gifts, or contributions from individuals, businesses, or
other entities. This proposed amendment would provide the authority to
accept voluntary contributions, such as rents, royalties, residual
payments, or other income from the rental, sales, leasing, franchising,
or other uses of intellectual property. Witnesses also testified that
the amendments would solidify the authority to use the characters and
avoid future litigation.
The record shows that the addition of voluntary contributions and
intellectual property is not uncommon. Witnesses testified that most
marketing orders have developed their own logos and sublicense them out
for use. Further, many research and promotion programs include language
pertaining to voluntary contributions. Witnesses also testified that
the addition of voluntary contributions and intellectual property
rights has the broadest of industry support with almost total
unanimity.
Additionally, the proposed amendments would not only be used for
the California Dancing Raisins specifically, but it would also create
the opportunity for the industry to benefit from the development of
intellectual property moving forward. The language related to the
ownership and rights of intellectual property developed under the Order
would provide that the Committee may develop intellectual property in
the future. This may lead to brand recognition, increases in consumer
demand, better returns, and greater market share, making California
raisins more competitive worldwide.
For the reason stated above, Sec. Sec. 989.63 ``Contributions''
and 989.64 ``Patents, copyrights, trademarks, inventions, product
formulations, and publications'' should be added to establish authority
to accept voluntary contributions and authority related to the
ownership of, and rights to, intellectual property and the collection
of rents/royalties from the same.
Material Issue No. 5--USDA Conforming Change
Based on record evidence, USDA is recommending the following
conforming change to the Order; revise Sec. 989.129 to replace the
word ``ballot'' with ``vote.'' USDA is also recommending minor
punctuation changes to Sec. 989.64 for clarity and readability.
USDA proposes to revise Sec. 989.129 to replace the word
``ballot'' with ``vote.'' The word ``ballot'' replaced ``vote'' as part
of the Order amendment in 2018 that separated nomination procedures for
independent producers. Material issue No. 2 proposes to undo the
requirement for separate nomination procedures. This proposal would
revert the text back to its original language before separate
nominations were implemented in the 2018 amendment.
USDA proposes to make minor punctuation changes to Sec. 989.64 for
clarity and readability. These changes would not change the meaning of
the section. USDA proposes to add a semicolon after the last reference
to ``Committee'' in Sec. 989.64(a) and delete the comma after
``publication'' in Sec. 989.64(d).
Small Business Considerations
Pursuant to the requirements set forth in the Regulatory
Flexibility Act (RFA), 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
businesses subject to such actions so that small businesses will not be
unduly or disproportionately burdened. Marketing orders and amendments
thereto are unique in that they are normally brought about through
group action of essentially small entities for their own benefit.
According to the hearing transcript, there are approximately 1,500
producers of California raisins. According to NASS data presented at
the hearing, the total value of production for the 2022/23 crop year of
raisins was $381,780,000. Taking the total value of production for
raisins and dividing it by the total number of raisin producers
provides a return per producer of $254,520. Small agricultural
producers of raisins are defined by the Small Business Administration
(SBA) as those having annual receipts equal to or less than $4.0
million (NAICS code 111332, Grape Vineyards) (13 CFR 121.201).
Therefore, a majority of raisin producers would be considered small
entities under SBA's standards.
According to the record, there were 17 handlers for the 2022-2023
crop year. Small agricultural service firms are defined as those whose
annual receipts are equal to or less than $34.0 million (NAICS code
115114, Postharvest Crop Activities) (13 CFR 121.201). To make a
similar computation for handlers, the first step is to estimate a
representative handler price received per pound for packaged raisins.
Recent USDA purchases under the Commodity Procurement Program provide
such an estimate. For the most recent raisin crop year used by the
Committee (August 2022-July 2023), the average price paid for packaged
raisins purchased by the USDA for food assistance programs was $1.56
per pound. The annual receipts for handlers can be calculated by taking
the USDA average purchase price and multiplying it by the total number
of shipments as reported by the Committee for the 2022-2023 crop year
($1.56 x 414,898,000 LB) which equals $647,240,880. Taking the
calculation for the annual receipts by handlers and dividing by the
number of handlers provides an estimated annual receipt per handler
($647,240,880 divided by 17), which equals $38,072,993. Based on
[[Page 74862]]
the SBA definition of an agricultural service firm having less than $34
million in annual receipts, there is a mix of both large and small
raisin handlers.
The production area regulated under the Order covers the State of
California. Acreage devoted to raisin production in the production area
has declined in recent years. According to data presented at the
hearing, bearing acreage for raisins reached a high of 280,000 acres
during the 2000-2001 crop year. Since then, bearing acreage for raisins
has decreased almost 53 percent to 133,000 in 2021-2022. Total
production of raisins reached a high during the 2000-2001 crop year of
2,921,000 tons (green tons) but has decreased 65 percent to a total
production of raisins of 1,010,000 tons in 2021-2022.
During the hearing held February 13 and 14, 2024, interested
persons were invited to present evidence at the hearing on the probable
regulatory and informational impact of the proposed amendments to the
Order on small businesses. The evidence presented at the hearing shows
that none of the proposed amendments would have any burdensome effects
on small agricultural producers or firms.
Estimated Economic Impact of Amending Committee Membership Size and
Composition
The proposal described under Material Issue No. 1 would amend Sec.
989.26 by reducing Committee membership from 47 to 21 members.
Corresponding changes would also be made to Sec. 989.126. The proposal
would also remove producer district representation in Sec. 989.26(c)
and add an unaffiliated independent producer member seat to Sec.
989.126(a)(1). Corresponding changes would also remove Sec. Sec.
989.22 and 989.122 and references to producer districts in Sec. Sec.
989.29(b)(2), 989.126(a), and 989.129. In addition, Proposal No. 1
would eliminate the designated bargaining association seat in Sec.
989.26. Corresponding changes would also remove the reference to the
bargaining association position in Sec. 989.30. Lastly, Proposal No. 1
would amend Sec. 989.26 by lowering quorum requirements from 25 to 14.
Witnesses supported this proposal and stated that reducing the size
of the Committee would make conducting business more efficient. These
witnesses' statements are supported by the data collected by NASS
showing that bearing acreage for raisins has decreased almost 53
percent since the 2000-2001 season.
Currently, the Committee is structured to have 47 members and 47
alternates, where quorum is met when at least 25 members attend. A
witness testified that, from April 2019 through June 2023, Committee
meeting participation averages only 33 out of the 47 members in
attendance. Witnesses testified that the number of raisin producers has
declined from approximately 3,500 during the 2000-2001 season to
approximately 1,500 during the 2022-2023 season. Reducing the number of
members on the Committee will bring representation into balance with
the overall size of the industry.
For the reasons described above, it is determined that the proposed
amendment would benefit industry participants and improve
administration of the order. The costs of implementing this proposal
would be minimal, if any, and may even create efficiencies that would
reduce administrative costs.
Estimated Economic Impact of Removing Separate Nomination Procedures
The proposal described under Material Issue No. 2 would amend Sec.
989.29 to eliminate the requirement for separate nominations for
independent producers or producers affiliated with small cooperative
marketing associations.
Currently, the Committee has difficulty filling Committee seats
designated for independent producer members and independent producer
alternate members. Independent producer alternate member seats have
gone unfilled for several consecutive years.
According to witness testimony, the purpose of the proposal is to
eliminate the requirements for separate nominations for independent
producers and create greater competition for all Committee positions.
When the raisin industry had more producers, the Committee believed
designating separate nominations for independent producers ensured that
independent producers' concerns were part of Committee discussions. As
the raisin industry has evolved, separate nominations for independent
producers have fueled low attendance rates and absenteeism at Committee
meetings.
In conclusion, it is determined that the benefits of eliminating
the requirements for separate nominations for independent producers
would outweigh any costs associated with the implementation of the
proposed amendment.
Estimated Economic Impact of Updating Marketing Policy and Quality
Standards for Reconditioned Raisins
The proposal described under Material Issue No. 3 would, in Sec.
989.54(a), remove factor number 4 ``An estimated desirable carryout at
the end of the crop year;'' and the last part of factor number 5, ``,
considering the estimated world raisin supply and demand situation''.
Proposal No. 3 would also amend Sec. Sec. 989.24 and 989.58 by adding
language to clarify the quality of reconditioned raisins as ``standard
raisins.''
Currently, many customers believe reconditioned raisins differ from
raisins that were not reconditioned, even though both raisins have met
the same quality standard. The Committee believes that there is an
impression in the raisin market that the quality level of reconditioned
raisins is lower than standard raisins. Clarifying standard raisins as
any raisins that have been inspected and meet the Order's minimum
requirements, regardless of whether the fruit has been reconditioned or
not, would remove any negative quality impression that is associated
with reconditioned raisins.
According to a witness, the proposed amendment would streamline the
sales process and would have a positive impact for raisin handlers and
producers. Currently, USDA does not distinguish between reconditioned
or standard raisins when purchasing for feeding programs.
It is determined that the benefits gained from implementing this
proposal would outweigh additional implementation costs incurred, if
any.
Estimated Economic Impact for Adding Contribution Authority and Patent/
Trademark Authority
The proposal described under Material Issue 4 would add Sec.
989.63 to establish the authority to accept voluntary contributions and
add Sec. 989.64 to establish authority related to ownership of, and
rights to, intellectual property and add authority for the collection
of rents/royalties from the same.
The Order does not currently allow for the Committee to accept
voluntary contributions or have ownership of, and rights to,
intellectual property. This proposal would allow for the Committee to
generate additional income outside the collection of handler
assessments.
According to a witness, the Committee has been approached recently
with the opportunity to generate revenue from the trademarked Dancing
Raisins. Adding the authority
[[Page 74863]]
to own, and to exercise the rights of, intellectual property would
allow the Committee to receive income from patents, copyrights,
trademarks, inventions, publications, or product formulations. Such
authority would allow the Committee to collect additional income from
the Dancing Raisins and any other intellectual property owned or
controlled by the Committee. The additional income could benefit the
raisin industry by, for instance, supporting future research as
determined by the Committee.
For the reasons described above, it is determined that any
additional costs incurred for this proposal would be outweighed by the
increased flexibility for the industry to respond to a changing global
marketplace.
USDA has not identified any relevant Federal rules that duplicate,
overlap or conflict with this proposed rule. These amendments are
intended to improve the operation and administration of the Order and
to assist in the marketing of California raisins.
Committee meetings regarding these proposals, as well as the
hearing date and location, were widely publicized throughout the
California raisin industry, and all interested persons were invited to
attend the meetings and the hearing to participate in Committee
deliberations on all issues. All Committee meetings, and the hearing,
were public forums, and all entities, both large and small, were able
to express views on these issues. Interested persons are invited to
submit information on the regulatory impacts of this action on small
businesses.
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.
Paperwork Reduction Act
Current information collection requirements that are part of the
Federal marketing order for California raisins (7 CFR part 984) are
approved under OMB No. 0581-0178 Vegetables and Specialty Crops. Some
changes in those requirements are anticipated as a result of this
proceeding. Such changes would be submitted to OMB for approval.
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.
Civil Justice Reform
The amendments to the Order proposed herein have been reviewed
under Executive Order 12988, Civil Justice Reform. They are not
intended to have retroactive effect. If adopted, the proposed
amendments would not preempt any State or local laws, regulations, or
policies, unless they present an irreconcilable conflict with this
proposal.
The Act provides that administrative proceedings must be exhausted
before parties may file suit in court. Under Sec. 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 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 no later than 20 days after the date of
entry of the ruling.
Rulings on Briefs of Interested Persons
No briefs were filed. Proposed findings and conclusions and the
evidence in the record were considered in making the findings and
conclusions set forth in this recommended decision. To the extent that
the suggested findings and conclusions filed by interested persons are
inconsistent with the findings and conclusions of this recommended
decision, the requests to make such findings or to reach such
conclusions are denied.
General Findings
The findings hereinafter set forth are supplementary to the
findings and determinations which were previously made in connection
with the issuance of the marketing agreement and order and all said
previous findings and determinations are hereby ratified and affirmed,
except insofar as such findings and determinations may be in conflict
with the findings and determinations set forth herein.
(1) The marketing order, as amended, and as hereby proposed to be
further amended, and all of the terms and conditions thereof, would
tend to effectuate the declared policy of the Act;
(2) The marketing order, as amended, and as hereby proposed to be
further amended, regulates the handling of raisins produced from grapes
grown in the production area (California) in the same manner as, and is
applicable only to, persons in the respective classes of commercial and
industrial activity specified in the marketing order upon which a
hearing has been held;
(3) The marketing order, as amended, and as hereby proposed to be
further amended, is limited in its application to the smallest regional
production area which is practicable, consistent with carrying out the
declared policy of the Act, and the issuance of several orders
applicable to subdivisions of the production area would not effectively
carry out the declared policy of the Act;
(4) The marketing order, as amended, and as hereby proposed to be
further amended, prescribes, insofar as practicable, such different
terms applicable to different parts of the production area as are
necessary to give due recognition to the differences in the production
and marketing of raisins grown in the production area; and
(5) All handling of raisins grown in the production area as defined
in the marketing order is in the current of interstate or foreign
commerce or directly burdens, obstructs, or affects such commerce.
A 30-day comment period is provided to allow interested persons to
respond to this proposal. All written exceptions received within the
comment period will be considered, and a producer referendum may be
conducted before any of these proposals are implemented.
List of Subjects in 7 CFR Part 989
Grapes, Marketing agreements, Raisins, Reporting and recordkeeping
requirements.
Recommended Further Amendment of the Marketing Order
For the reasons set out in the preamble, the Agricultural Marketing
Service proposes to amend 7 CFR part 989 as follows:
PART 989--RAISINS PRODUCED FROM GRAPES GROWN IN CALIFORNIA
0
1. The authority citation for part 989 continues to read as follows:
Authority: 7 U.S.C. 601-674.
Sec. 989.22 [Removed and Reserved]
0
2. Remove and reserve Sec. 989.22.
0
3. Amend Sec. 989.24 by revising paragraph (b) to read as follows:
Sec. 989.24 Standard raisins, off-grade raisins, other failing
raisins, and raisin residual material.
* * * * *
[[Page 74864]]
(b) Off-grade raisins means raisins which do not meet the then
effective minimum grade and condition standards for natural condition
raisins: Provided, That raisins which are certified as off-grade
raisins shall continue to be such until successfully reconditioned as
standard raisins or become ``other failing raisins.''
* * * * *
0
4. Revise Sec. 989.26 to read as follows:
Sec. 989.26 Establishment and membership.
A Raisin Administrative Committee is hereby established consisting
of 21 members of whom 12 shall represent producers, 8 shall represent
handlers and 1 shall be a public member.
(a) The producer members shall be selected as follows:
(1) Producer members representing the cooperative marketing
association(s) shall be members of such association(s) engaged in the
handling of raisins, each of which acquired not less than 10 percent of
the total raisin acquisitions during the preceding crop year, and those
members shall be equal to the product, rounded to the nearest whole
number, obtained by multiplying 12 by the ratio the cooperative
marketing association(s) raisin acquisitions are to the acquisitions of
all handlers during the preceding crop year. (2) Producer members
representing cooperative bargaining association(s) shall be members of
such association(s), and the number of those members shall be equal to
the product, rounded to the nearest whole number, obtained by
multiplying 12 by the ratio the raisins acquired by handlers from
bargaining association members are to the total acquisitions of all
handlers during the preceding crop year.
(3) All other producer members, who shall not be members of a
cooperative bargaining association(s), cooperative marketing
association(s) engaged in the handling of raisins which acquired 10
percent or more of the total acquisitions during the preceding crop
year, nor sold for cash to cooperative marketing association(s), shall
represent all producers not defined in paragraphs (a)(1) or (2) of this
section and shall be selected as designated in the rules and
regulations.
(b) The handler members shall be divided into two groups and
include the following:
(1) Handler members shall be selected from and represent
cooperative marketing association(s) engaged in the handling of raisins
each of which acquired not less than 10 percent of the total raisin
acquisitions during the preceding crop year, and the number of those
members shall be equal to the product, rounded to the nearest whole
number, obtained by multiplying 8 by the ratio of the cooperative
marketing association(s) raisin acquisitions are to the total
acquisitions of all handlers during the preceding crop year.
(2) The remaining handler members shall be selected from and
represent all other handlers, which would include all independent
handlers and small cooperative marketing association(s) who acquired
less than 10 percent of the total raisin acquisitions during the
preceding crop year. Handler nominees for this group shall be nominated
by all handlers in the group in a manner determined by the Committee,
with the approval of the Secretary, and specified in the rules and
regulations.
(c) The public member shall be nominated by the Committee and
selected by the Secretary as public member.
(d) For each member of the Committee there shall be an alternate
member who shall have the same qualifications as the member for whom
they are an alternate.
0
5. Amend Sec. 989.29 by revising paragraphs (a) and (b)(1) and (2) to
read as follows:
Sec. 989.29 Initial members and nomination of successor members.
(a) Initial members. Members and alternate members of the Committee
serving immediately prior to the effective date of this amended subpart
shall, if thereafter they are eligible, serve on the Committee until
April 30, 2026, and until their respective successors have been
selected and qualified.
(b) * * *
(1) The Committee shall notify the cooperative marketing
association(s) engaged in handling not less than 10 percent of the
total raisin acquisitions during the preceding crop year, and
cooperative bargaining association(s), of the date by which nominations
to fill member and alternate member positions shall be made. The
Committee shall give reasonable publicity of a meeting or meetings of
producers who are not members of cooperative bargaining association(s),
or cooperative marketing association(s) which handled 10 percent or
more of the total raisin acquisitions during the preceding crop year,
and of independent handlers and cooperative marketing association(s)
who handled less than 10 percent of the total raisin acquisitions
during the preceding crop year, for the purpose of making nominations
to fill the member and alternate member positions prescribed in Sec.
989.26 (a)(3) and (b): Provided, That member and alternate member
nominations by independent handlers and cooperative marketing
association(s) who acquired less than 10 percent of the total raisin
acquisitions during the preceding crop year may be made to the
Committee by mail in lieu of meetings.
(2)(i) Any producer representing independent producers and
producers who are affiliated with cooperative marketing association(s)
handling less than 10 percent of the total raisin acquisitions during
the preceding crop year must have produced grapes which were made into
raisins.
(ii) Each such producer whose name is offered in nomination to
represent on the Committee independent producers or producers who are
affiliated with cooperative marketing association(s) handling less than
10 percent of the total raisin acquisitions during the preceding crop
year shall be given the opportunity to provide the Committee a short
statement outlining qualifications and desire to serve if selected.
These brief statements, together with a ballot and voting instructions,
shall be mailed to all independent producers and producers who are
affiliated with cooperative marketing associations handling less than
10 percent of the total raisin acquisitions during the preceding crop
year of record with the Committee. The producer candidate receiving the
highest number of votes shall be designated as the first member nominee
for a member position in which they qualify, the second highest shall
be designated as the second member nominee for a member position which
they qualify, until nominees for all producer member positions have
been filled. Similarly, after all producer member positions have been
filled, the producer candidate receiving the highest number of votes
shall be designated as the first alternate member nominee for a member
position in which they qualify, the second highest shall be designated
as the second alternate member nominee for a member position in which
they qualify, until nominees for all alternate member positions have
been filled.
(iii) In the event there are no qualified candidates for any
designated producer member or alternate member positions, such
positions may be filled by other producer candidates not otherwise
nominated for a position.
(iv) Each independent producer or producer affiliated with
cooperative marketing association(s) handling less than 10 percent of
the total raisin acquisitions during the preceding crop year shall cast
only one vote with respect to each position for which nominations are
to be made. Write-in candidates shall be accepted. The person receiving
the most votes with
[[Page 74865]]
respect to each position to be filled, in accordance with paragraph
(b)(2)(ii) and (iii) of this section, shall be the person to be
certified to the Secretary as the nominee. The Committee may, subject
to the approval of the Secretary, establish rules and regulations to
effectuate this section.
* * * * *
0
6. Revise Sec. 989.30 to read as follows:
Sec. 989.30 Selection.
The Secretary shall select producer, handler, and public members
and alternate members in the number specified in Sec. 989.26, as
applicable, and with the qualifications specified in Sec. 989.27. Such
selections may be made from nominations certified pursuant to Sec.
989.29 or from other eligible producers, or handlers.
Sec. 989.38 [Amended]
0
7. Amend Sec. 989.38 by removing the numeral ``25'' and adding in its
place the numeral ``14''.
Sec. 989.54 [Amended]
0
8. Amend Sec. 989.54 by:
0
a. Removing paragraph (a)(4);
0
b. Redesignating paragraphs (a)(5) through (9) as paragraphs (a)(4)
through (8), respectively; and
0
c. Removing in newly redesignated paragraph (a)(4), the text ``,
considering the estimated world raisin supply and demand situation''.
0
9. Amend Sec. 989.58 by adding paragraph (g) to read as follows:
Sec. 989.58 Natural condition raisins.
* * * * *
(g) Quality reconditioned raisins. All raisins which have been
inspected and certified as meeting the minimum grade, quality, and
condition standards established pursuant to this section, whether upon
incoming inspection or upon later inspection after reconditioning,
shall be determined to be standard raisins, labelled accordingly, and
shall be eligible for commercial disposition as natural condition
raisins or packed raisins in normal outlets.
0
10. Add Sec. 989.63 to read as follows:
Sec. 989.63 Contributions.
The Committee may accept voluntary contributions: Provided, That
such contributions shall only be used to pay expenses authorized under
Sec. 989.79. Furthermore, contributions shall be free from any
encumbrances by the donor and the Committee shall retain complete
control of their use.
0
11. Add Sec. 989.64 to read as follows:
Sec. 989.64 Patents, copyrights, trademarks, inventions, product
formulations, and publications.
(a) Any patents, copyrights, trademarks, inventions, product
formulations, and publications developed through the use of funds
received by the Committee under this subpart shall be the property of
the U.S. Government, as represented by the Committee, and shall, along
with any rents, royalties, residual payments, or other income from the
rental, sales, leasing, franchising, or other uses of such patents,
copyrights, trademarks, inventions, product formulations, or
publications, inure to the benefit of the Committee; shall be
considered income subject to the same fiscal, budget, and audit
controls as other funds of the Committee; and may be licensed subject
to approval by the Secretary.
(b) Upon termination of this subpart, Sec. 989.92 shall apply to
determine disposition of any property, including patents, copyrights,
trademarks, inventions, product formulations, and publications
developed through the use of funds received by the Committee under this
subpart.
(c) Should patents, copyrights, trademarks, inventions, product
formulations, or publications be developed through the use of funds
collected by the Committee under this subpart and funds contributed by
another organization or person, ownership and related rights to such
patents, copyrights, trademarks, inventions, product formulations, or
publications shall be determined by agreement between the Committee and
the person or organization contributing funds towards the development
of such patents, copyrights, inventions, trademarks, product
formulations, or publications in a manner consistent with paragraph (a)
of this section.
(d) Should any patents, copyrights, trademarks, inventions, product
formulations, or publications be licensed to the Committee by another
person or organization, the rights and obligations regarding such
licensed patents, copyrights, trademarks, inventions, product
formulations, or publications shall be determined by agreement between
the Committee and the person or organization permitting licensure in a
manner consistent with paragraph (a) of this section.
Sec. 989.122 [Removed and Reserved]
0
12. Remove and reserve Sec. 989.122.
0
13. Revise Sec. 989.126 to read as follows:
Sec. 989.126 Representation of the Committee.
(a) Pursuant to Sec. 989.26(a)(3), and commencing with the term of
office beginning May 1, 2026, apportionment of independent and small
cooperative producers shall be:
(1) One producer member, selected from and representing all
producers, who is unaffiliated with any handler (including, but not
limited to, ownership, employment, or agent of any handler, and whose
family members are similarly unaffiliated with any handler); and
(2) The remaining producer member(s) selected from and representing
all other independent and small cooperative producers.
(b) Pursuant to section Sec. 989.26(b)(2), and commencing with the
term of office beginning May 1, 2026, apportionment of the independent
and small cooperative marketing association handlers shall be:
(1) Two members selected from and representing the four handler(s)
other than major cooperative marketing association handler(s) who
acquired the largest percentage of the total raisin acquisitions during
the preceding crop year; and
(2) The remaining member(s) selected from and representing all
other handlers, including small cooperative marketing association
handler(s) and all processors.
0
14. Revise Sec. 989.129 to read as follows:
Sec. 989.129 Voting at nomination meetings.
Any person (defined in Sec. 989.3 as an individual, partnership,
corporation, association, or any other business unit) who is engaged,
in a proprietary capacity, in the production of grapes which are sun-
dried or dehydrated by artificial means to produce raisins and who
qualifies under the provisions of Sec. 989.29(b)(2) shall be eligible
to cast one vote for a nominee for each producer member position and
one vote for a nominee for each producer alternate member position on
the Committee which is to be filled. Such person must be the one who or
which: Owns and farms land resulting in his or its ownership of such
grapes produced thereon; rents and farms land, resulting in his or its
ownership of all or a portion of such grapes produced thereon; or owns
land which he or it does not farm and, as rental for such land, obtains
the ownership of a portion of such grapes or the raisins. In this
connection, a partnership shall be deemed to include two or more
persons (including a husband and wife) with respect to land the title
to which, or leasehold interest
[[Page 74866]]
in which, is vested in them as tenants in common, joint tenants, or
under community property laws, as community property. In a landlord-
tenant relationship, wherein each of the parties is a producer, each
such producer shall be entitled to one vote for a nominee for each
producer member position and one vote for each producer alternate
member position. Hence, where two persons operate land as landlord and
tenant on a share-crop basis, each person is entitled to one vote for
each such position to be filled. Where land is leased on a cash rental
basis, only the person who is the tenant or cash renter (producer) is
entitled to vote. A partnership or corporation, when eligible, is
entitled to cast only one vote for a nominee for each producer position
to be filled.
Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2024-20079 Filed 9-12-24; 8:45 am]
BILLING CODE P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on September 13, 2024.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.