[Federal Register: June 16, 2004 (Volume 69, Number 115)]
[Proposed Rules]
[Page 33584-33587]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16jn04-24]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 981
[Docket No. FV04-981-3 PR]
Almonds Grown in California; Increased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This rule would increase the assessment rate established for
the Almond Board of California (Board) for the 2004-05 and subsequent
crop years from $0.020 to $0.025 per pound of almonds received. Of the
$0.025 per pound assessment, $0.014 would be available as credit-back
for handlers who conduct their own promotional activities. The Board
locally administers the marketing order which regulates the handling of
almonds grown in California. Authorization to assess almond handlers
enables the Board to incur expenses that are reasonable and
[[Page 33585]]
necessary to administer the program. The crop year begins August 1 and
ends July 31. The assessment rate will remain in effect indefinitely
unless modified, suspended, or terminated.
DATES: Comments must be received by June 28, 2004.
ADDRESSES: Interested persons are invited to submit written comments
concerning this rule. Comments must be sent to the Docket Clerk,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC
20250-0237; Fax: (202) 720-8938, E-mail: moab.docketclerk@usda.gov, or
Internet: http://www.regulations.gov. Comments should reference the
docket number and the date and page number of this issue of the Federal
Register and will be available for public inspection in the Office of
the Docket Clerk during regular business hours, or can be viewed at:
http://www.ams.usda.gov/fv/moab.html.
FOR FURTHER INFORMATION CONTACT: Toni Sasselli, Marketing Assistant, or
Martin Engeler, Assistant Regional Manager, California Marketing Field
Office, Marketing Order Administration Branch, Fruit and Vegetable
Programs, AMS, USDA, 2202 Monterey Street, Suite 102B, Fresno,
California 93721; telephone: (559) 487-5901, Fax: (559) 487-5906; or
George Kelhart, Technical Advisor, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence
Avenue SW., STOP 0237, Washington, DC 20250-0237; telephone: (202) 720-
2491, Fax: (202) 720-8938.
Small businesses may request information on complying with this
regulation by contacting Jay Guerber, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence
Avenue SW., STOP 0237, Washington, DC 20250-0237; telephone: (202) 720-
2491, Fax: (202) 720-8938, or E-mail: Jay.Guerber@usda.gov.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order
No. 981, as amended (7 CFR part 981), regulating the handling of
almonds grown in California, hereinafter referred to as the ``order.''
The order is effective under the Agricultural Marketing Agreement Act
of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the
``Act.''
The Department of Agriculture (USDA) is issuing this rule in
conformance with Executive Order 12866.
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. Under the marketing order now in effect, California
almond handlers are subject to assessments. Funds to administer the
order are derived from such assessments. It is intended that the
assessment rate as proposed herein would be applicable to all
assessable almonds beginning August 1, 2004, and continue until
amended, suspended, or terminated. This rule will not preempt any State
or local laws, regulations, or policies, unless they present an
irreconcilable conflict with this rule.
The Act provides that administrative proceedings must be exhausted
before parties may file suit in court. Under section 608c(15)(A) of the
Act, any handler subject to an order may file with 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. Such
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 not later than 20 days after the date of
the entry of the ruling.
This rule would increase the assessment rate established for the
Board for the 2004-05 and subsequent crop years from $0.020 to $0.025
per pound of almonds received. Of the $0.025 per pound assessment,
$0.014 would be available as credit-back for handlers who conduct their
own promotional activities.
The California almond marketing order provides authority for the
Board, with the approval of USDA, to formulate an annual budget of
expenses and collect assessments from handlers to administer the
program. The members of the Board are producers and handlers of
California almonds. They are familiar with the Board's needs and with
the costs for goods and services in their local area and are thus in a
position to formulate an appropriate budget and assessment rate. The
assessment rate is formulated and discussed in a public meeting. Thus,
all directly affected persons have an opportunity to participate and
provide input.
For the 2003-04 and subsequent crop years, the Board recommended,
and USDA approved, an assessment rate that would continue in effect
from crop year to crop year unless modified, suspended, or terminated
by USDA upon recommendation and information submitted by the Board or
other information available to USDA.
The Board met on May 20, 2004, and recommended 2004-05 expenditures
of $24,027,344. In comparison, last year's budgeted expenditures were
$20,547,385. The recommended assessment rate of $0.025 would be $0.005
higher than the rate currently in effect, and the credit-back portion
of the assessment rate would be $0.004 more than the rate currently in
effect.
The major expenditures recommended by the Board for the 2004-05
crop year include $7,115,000 for advertising and market research,
$9,215,000 for public relations and other promotion and education
programs including a Market Access Program (MAP) administered by USDA's
Foreign Agricultural Service (FAS), $1,730,000 for salaries, $1,200,000
for nutrition research, $947,321 for production research, $808,000 for
food quality programs, $460,042 for environmental research, $200,000
for travel, $130,000 for office rent, $125,000 for a crop estimate, and
$95,000 for an acreage survey. Budgeted expenses for these items in
2003-2004 were $6,375,312 for advertising and market research,
$7,587,750 for public relations and other promotion and education
programs including a Market Access Program (MAP) administered by USDA's
Foreign Agricultural Service (FAS), $1,500,000 for salaries and wages,
$1,000,000 for nutrition research, $850,332 for production research,
$823,948 for food quality programs, $254,903 for environmental
research, $200,000 for travel, $122,472 for office rent, $120,750 for a
crop estimate, and $90,780 for an acreage survey.
The Board recommended increasing the assessment rate from $0.020
per pound to $0.025 per pound of almonds handled. Of the $0.025 per
pound assessment, $0.014 per pound would be available as credit-back
for handlers who conduct their own promotional activities consistent
with Sec. 981.441 of the order's regulations and subject to Board
approval. The Board recommended increasing the assessment rate to
generate adequate revenue to fund the Board's 2004-05 budgeted expenses
and to maintain a financial reserve. Section 981.81(c) authorizes a
financial reserve of approximately one-half year's budgeted expenses.
One-half of the 2004-05 crop year's budgeted expenses of $24,027,344
equals $12,013,672. The Board's financial reserve at the end of the
2004-05 crop year is projected to be $3,067,437, which is well within
the authorized reserve.
[[Page 33586]]
The assessment rate recommended by the Board was derived by
considering anticipated expenses and production levels of California
almonds, and additional pertinent factors. In its recommendation, the
Board utilized an estimate of 1,056,000,000 pounds of assessable
almonds for the 2004-05 crop year. If realized, this would provide
estimated assessment revenue of $11,616,000 from all handlers, and an
additional $8,131,200 from those handlers who do not participate in the
credit-back program, for a total of $19,747,200. In addition, it is
anticipated that $7,347,581 will be provided by other sources,
including interest income, MAP funds, grant funds, miscellaneous
income, and reserve/carryover funds. When combined, revenue from these
sources would be adequate to cover budgeted expenses. Any unexpended
funds from the 2004-05 crop year may be carried over to cover expenses
during the succeeding crop year. Funds in the reserve at the end of the
2004-05 crop year are estimated to be approximately $3,067,437, which
would be within the amount permitted by the order.
The proposed assessment rate would continue in effect indefinitely
unless modified, suspended, or terminated by USDA upon recommendation
and information submitted by the Board or other available information.
Although this assessment rate would be in effect for an indefinite
period, the Board will continue to meet prior to or during each crop
year to recommend a budget of expenses and consider recommendations for
modification of the assessment rate. The dates and times of Board
meetings are available from the Board or USDA. Board meetings are open
to the public and interested persons may express their views at these
meetings. USDA would evaluate Board recommendations and other available
information to determine whether modification of the assessment rate is
needed. Further rulemaking would be undertaken as necessary. The
Board's 2004-05 budget and those for subsequent crop years would be
reviewed and, as appropriate, approved by USDA.
Initial Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), the Agricultural Marketing Service (AMS) has considered the
economic impact of this rule on small entities. Accordingly, AMS has
prepared this initial regulatory flexibility analysis.
The purpose of the RFA is to fit regulatory actions to the scale of
business subject to such actions in order that small businesses will
not be unduly or disproportionately burdened. Marketing orders issued
pursuant to the Act, and the rules issued thereunder, are unique in
that they are brought about through group action of essentially small
entities acting on their own behalf. Thus, both statutes have small
entity orientation and compatibility.
There are approximately 6,000 producers of almonds in the
production area and approximately 119 handlers subject to regulation
under the marketing order. Small agricultural producers are defined by
the Small Business Administration (13 CFR 121.201) as those having
annual receipts less than $750,000, and small agricultural service
firms are defined as those whose annual receipts are less than
$5,000,000.
Data for the most recently completed crop year indicate that about
38 percent of the handlers shipped over $5,000,000 worth of almonds and
about 62 percent of handlers shipped under $5,000,000 worth of almonds.
In addition, based on production and grower price data reported by the
California Agricultural Statistics Service (CASS), and the total number
of almond growers, the average annual grower revenue is estimated to be
approximately $199,000. Based on the foregoing, the majority of
handlers and producers of almonds may be classified as small entities.
This rule would increase the assessment rate established for the
Board and collected from handlers for the 2004-05 and subsequent crop
years from $0.020 to $0.025 per pound of almonds. Of the $0.025 per
pound assessment, $0.014 per pound would be available as credit-back
for handlers who conduct their own promotional activities consistent
with Sec. 981.441 of the order's regulations and subject to Board
approval.
The Board met on May 20, 2004, and recommended 2004-2005
expenditures of $24,027,344 and an assessment rate of $0.025 per pound.
Of the $0.025 per pound assessment, $0.014 per pound would be available
as credit-back for handlers who conduct their own promotional
activities. The proposed assessment rate of $0.025 would be $0.005
higher than the current rate, and the credit-back portion would be
$0.004 more than the current rate. The quantity of assessable almonds
for the 2004-05 crop year is estimated at 1,056,000,000 pounds. The
proposed assessment rate would provide estimated assessment revenue of
$11,616,000 from all handlers, and an additional $8,131,200 from those
handlers who do not participate in the credit-back program, for a total
of $19,747,200. In addition, it is anticipated that $7,347,581 will be
provided by other sources, including interest income, MAP funds, grant
funds, miscellaneous income, and reserve/carryover funds. When
combined, revenue from these sources would be adequate to cover
budgeted expenses. The projected financial reserve at the end of 2004-
05 would be $3,067,437, which would be within the maximum permitted
under the order.
The major expenditures recommended by the Board for the 2004-05
crop year include $7,115,000 for advertising and market research,
$9,215,000 for public relations and other promotion and education
programs including a Market Access Program (MAP) administered by USDA's
Foreign Agricultural Service (FAS), $1,730,000 for salaries, $1,200,000
for nutrition research, $947,321 for production research, $808,000 for
food quality programs, $460,042 for environmental research, $200,000
for travel, $130,000 for office rent, $125,000 for a crop estimate, and
$95,000 for an acreage survey. Budgeted expenses for these items in
2003-2004 were $6,375,312 for advertising and market research,
$7,587,750 for public relations and other promotion and education
programs including a Market Access Program (MAP) administered by USDA's
Foreign Agricultural Service (FAS), $1,500,000 for salaries and wages,
$1,000,000 for nutrition research, $850,332 for production research,
$823,948 for food quality programs, $254,903 for environmental
research, $200,000 for travel, $122,472 for office rent, $120,750 for a
crop estimate, and $90,780 for an acreage survey.
The Board considered alternative assessment rate levels, including
the portion available for handler credit-back. After deliberating the
issue, the Board recommended increasing the assessment rate to $0.025
per pound, with $0.014 available for handler credit-back. In arriving
at its budget, the Board considered information from its various
committees. Alternative expenditure levels were discussed by these
groups, based on the value of various activities to the industry. The
committees ultimately recommended appropriate activities and funding
levels, which were adopted by the Board.
A review of historical information and preliminary information
pertaining to the upcoming crop year indicates that the average grower
price for the 2004-05 season could range between $1.50 and $1.80 per
pound of almonds. Therefore, the estimated assessment revenue for the
2004-05 crop year (disregarding any amounts credited pursuant to
Sec. Sec. 981.41 and 981.441) as a
[[Page 33587]]
percentage of total grower revenue could range between 1.2 and 1
percent, respectively.
This action would increase the assessment obligation imposed on
handlers. While assessments impose some additional costs on handlers,
the costs are minimal and uniform on all handlers. Some of the
additional costs may be passed on to producers. However, these costs
would be offset by the benefits derived by the operation of the
marketing order. In addition, the Board's meeting was widely publicized
throughout the California almond industry and all interested persons
were invited to attend the meeting and participate in Board
deliberations on all issues. Like all Board meetings, the May 20, 2004,
meeting was a public meeting and all entities, both large and small,
were able to express views on this issue. Finally, interested persons
are invited to submit information on the regulatory and informational
impacts of this action on small businesses.
This proposed rule would impose no additional reporting or
recordkeeping requirements on either small or large California almond
handlers. As with all Federal marketing order programs, reports and
forms are periodically reviewed to reduce information requirements and
duplication by industry and public sector agencies.
USDA has not identified any relevant Federal rules that duplicate,
overlap, or conflict with this rule.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/fv/moab.html.
Any questions about the compliance
guide should be sent to Jay Guerber at the previously mentioned address
in the FOR FURTHER INFORMATION CONTACT section.
A 10-day comment period is provided to allow interested persons to
respond to this proposed rule. Ten days is deemed appropriate because:
(1) The 2004-05 crop year begins on August 1, 2004, and the marketing
order requires that the rate of assessment for each crop year apply to
all assessable almonds handled during such crop year; (2) a final
decision on the increase should be made as soon as possible so handlers
can plan accordingly; (3) the Board needs to have sufficient funds to
pay its expenses which are incurred on a continuous basis; and (4)
handlers are aware of this action which was recommended by the Board at
a public meeting and is similar to other assessment rate actions issued
in past years.
List of Subjects in 7 CFR Part 981
Almonds, Marketing agreements, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, 7 CFR part 981 is
proposed to be amended as follows:
PART 981--ALMONDS GROWN IN CALIFORNIA
1. The authority citation for 7 CFR part 981 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. Section 981.343 is revised to read as follows:
Sec. 981.343 Assessment rate.
On and after August 1, 2004, an assessment rate of $0.025 per pound
is established for California almonds. Of the $0.025 assessment rate,
$0.014 per assessable pound is available for handler credit-back.
Dated: June 10, 2004.
Kenneth C. Clayton,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 04-13690 Filed 6-14-04; 12:56 pm]
BILLING CODE 3410-02-P