Imported Walnuts; Suspension of Handling Regulations

<RULE> DEPARTMENT OF AGRICULTURE <SUBAGY>Agricultural Marketing Service</SUBAGY> <CFR>7 CFR Part 999</CFR> <DEPDOC>[Doc. No. AMS-SC-24-0053]</DEPDOC> <SUBJECT>Imported Walnuts; Suspension of Handling Regulations</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Agricultural Marketing Service, Department of Agriculture (USDA). <HD SOURCE="HED">ACTION:</HD> Direct final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> This direct final rule stays the regulation governing imports of walnuts in order to align it with regulations prescribed under the Federal marketing order regulating the handling of walnuts grown in California. This action is required under the Agricultural Marketing Agreement Act of 1937, as amended. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> This direct final rule is effective November 6, 2025, without further action or notice, unless significant adverse comments are received by October 22, 2025. If significant adverse comments are received, the Agricultural Marketing Service will publish a timely withdrawal of the amendment in the <E T="04">Federal Register</E> . </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> Interested persons are invited to submit written comments concerning this direct final rule. Comments can be sent to the Docket Clerk, Market Development Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP 0237, Washington, DC 20250-0237. Comments can also be sent to the Docket Clerk electronically by Email: <E T="03">MarketingOrderComment@usda.gov</E> or via the internet at: <E T="03">https://www.regulations.gov.</E> Comments should reference the document number and the date and page number of this issue of the <E T="04">Federal Register</E> . Comments submitted in response to this direct final rule will be included in the record, will be made available to the public, and can be viewed at: <E T="03">https://www.regulations.gov.</E> Please be advised that the identity of the individuals or entities submitting the comments will be made public on the internet at the address provided above. <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Joshua R. Wilde, Marketing Specialist, or Barry Broadbent, Chief, Northwest Region Branch, Market Development Division, Specialty Crops Program, AMS, USDA; telephone: (503) 326-2724; or email: <E T="03">Joshua.R.Wilde@usda.gov</E> or <E T="03">Barry.Broadbent@usda.gov.</E> Small businesses may request information on complying with this regulation by contacting Antoinette Carter, Market Development Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP 0237, Washington, DC 20250-0237; telephone: (202) 690-3919; or email: <E T="03">Antoinette.Carter@usda.gov.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> This direct final rule is issued under section 8e of the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act”. Section 8e provides that whenever certain specified commodities, including walnuts, are regulated under a Federal marketing order, imports of these commodities into the United States are prohibited unless they meet the same or comparable grade, size, quality, or maturity requirements as those in effect for domestically produced commodities. Marketing Order No. 984 (referred to as the “Order”) regulates the handling of walnuts grown in California (7 CFR part 984). The California Walnut Board (Board) locally administers the Order and is comprised of growers and handlers of California walnuts operating within the area of production and a public member. The Agricultural Marketing Service (AMS) is issuing this direct final rule in conformance with Executive Order 12866, as amended by Executive Order 13563. Executive Orders 12866 and 13563 direct agencies to assess costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. This action falls within a category of regulatory actions that the Office of Management and Budget (OMB) exempted from Executive Order 12866 review. This direct final rule has been reviewed under Executive Order 13175, “Consultation and Coordination with Indian Tribal Governments,” which requires Federal agencies to consider whether their rulemaking actions would have Tribal implications. AMS has determined that this rule is unlikely to have substantial direct effects on one or more Indian Tribes, on the relationship between the Federal government and Indian Tribes, or on the distribution of power and responsibilities between the Federal government and Indian Tribes. This direct final rule has been reviewed under Executive Order 12988, “Civil Justice Reform.” This rule is not intended to have retroactive effect. This direct final rule stays the regulation governing imports of walnuts in order to align the walnut import regulation with handling regulations prescribed under the Order. On October 28, 2021, the Board recommended formal rulemaking to amend the Order and submitted five proposed amendments to AMS. Among the Board's proposals were the removal of grade, quality, size, and inspection requirements for walnuts handled under the Order. AMS held a public hearing on these proposals on April 19 and 20, 2022. In preparation for this hearing, AMS published a notification of hearing on proposed rulemaking on April 1, 2022 (87 FR 19020), providing information for how to submit testimony and attend the proceedings. Nine industry witnesses testified at the hearing. All witnesses expressed their support for the proposed amendments. The witnesses, Board, and the walnut industry were aware that a corresponding change would need to be made with respect to the walnut import regulation, as required by section 8e of the Act, when they made the recommendation to remove handling regulation requirements from the Order. Based upon the record of hearing, AMS published a recommended decision, with an opportunity to file exceptions, on October 25, 2022 (87 FR 64385). AMS subsequently published a proposed rule and referendum order on March 7, 2023 (88 FR 14083). AMS then conducted a grower referendum with a voting period of April 3 through April 21, 2023. The proposed amendments to remove grade, quality, size, and inspection requirements from the Order were supported by approximately 81 percent of growers voting in the referendum, accounting for 88 percent of the volume represented by participating growers. Finally, AMS published a final rule on August 21, 2023, to amend the Order as proposed (88 FR 56745). A corresponding change to the walnut import regulation was required pursuant to section 8e of the Act but was not incorporated into the final rule referenced above. This direct final rule addresses the import walnut import regulations. This direct final rule indefinitely stays regulations governing the importation of walnuts into the United States. Pursuant to section 8e of the Act, whenever a marketing order contains any terms or conditions regulating the grade, size, quality, or maturity of certain commodities produced in the United States (including walnuts), the importation of any such commodity “shall be prohibited unless it complies with the grade, size, quality, and maturity provisions of such order or comparable restrictions”. Because the Order no longer contains any such terms or conditions, it is necessary that a corresponding change be made to 7 CFR 999.100 with respect to the grade, quality, size, and inspection requirements imposed on walnuts imported into the United States. Under § 984.50 of the amended Order, the Board retains authority to recommend regulations to establish new grade, quality, size, and maturity requirements, subject to approval of the Secretary. Therefore, walnut import regulations under 7 CFR 999.100 will be stayed and not eliminated. Should the Board recommend reestablishment of handling regulations under the Order, which would require a corresponding lifting of the suspension on the walnut import regulation, AMS would review any such recommendation and proceed with rulemaking as appropriate. In accordance with section 8e of the Act, AMS would submit any subsequent proposal to the United States Trade Representative for concurrence prior to making a corresponding change to the import requirements. In addition, AMS has notified the United States Trade Representative of this current action. <HD SOURCE="HD1">Regulatory Flexibility Analysis</HD> Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), AMS has considered the economic impact of this action on small entities. Accordingly, AMS has prepared this regulatory flexibility analysis. The purpose of the RFA is to fit regulatory actions to the scale of business subject to such actions in order that small businesses will not be unduly or disproportionately burdened. At the time this analysis was prepared, the Small Business Administration (SBA) defined small agricultural service firms, which would include walnut importers, as those having annual receipts of less than $34,000,000 (North American Industry Classification System (NAICS) code 115114, Postharvest Crop Activities) (13 CFR 121.201). USDA's Economic Research Service reported that approximately 1,210,000 pounds of fresh or dried walnuts were imported during the 2023-2024 season with a reported total value of $4,693,000. According to AMS' Compliance Enforcement Management System, approximately 23 firms imported fresh or dried walnuts into the United States over this same period. Usin ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 14k characters. 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