[Federal Register: January 13, 2005 (Volume 70, Number 9)]
[Proposed Rules]
[Page 2519-2540]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13ja05-33]
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Part III
Department of Agriculture
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Agricultural Marketing Service
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7 CFR Part 927
Winter Pears Grown in Oregon and Washington; Recommended Decision and
Opportunity To File Written Exceptions to Proposed Amendments to
Marketing Agreement and Order No. 927; Proposed Rule
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 927
[Docket No. AO-F&V-927-A1; FV04-927-1 PR]
Winter Pears Grown in Oregon and Washington; Recommended Decision
and Opportunity To File Written Exceptions to Proposed Amendments to
Marketing Agreement and Order No. 927
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule and opportunity to file exceptions.
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SUMMARY: This recommended decision invites written exceptions on
proposed amendments to the marketing agreement and order (order) for
winter pears grown in Oregon and Washington. The amendments are jointly
proposed by the Winter Pear Control Committee and the Northwest Fresh
Bartlett Marketing Committee, which are responsible for local
administration of orders 927 and 931, respectively. Marketing Agreement
and Order No. 931 regulates the handling of fresh Bartlett pears grown
in Oregon and Washington. The amendments would combine the winter pear
and fresh Bartlett orders into a single program under marketing order
927, and would add authority to assess pears for processing. All of the
proposals are intended to streamline industry organization and improve
the administration, operation, and functioning of the program.
DATES: Written exceptions must be filed by February 14, 2005.
ADDRESSES: Written exceptions should be filed with the Hearing Clerk,
U.S. Department of Agriculture, room 1081-S, Washington, DC 20250-9200,
Facsimile number (202) 720-9776 or http://www.regulations.gov. 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: http://www.ams.usda.gov/fv/moab.html
.
FOR FURTHER INFORMATION CONTACT: Melissa Schmaedick, Marketing Order
Administration Branch, Fruit and Vegetable Programs, Agricultural
Marketing Service, USDA, Post Office Box 1035, Moab, UT 84532,
telephone: (435) 259-7988, fax: (435) 259-4945.
Small businesses may request information on this proceeding 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.
SUPPLEMENTARY INFORMATION: Prior documents in this proceeding: Notice
of Hearing issued on March 24, 2004, and published in the March 30,
2004, issue of the Federal Register (69 FR 16501).
This action is governed by the provisions of sections 556 and 557
of title 5 of the United States Code and is therefore excluded from the
requirements of Executive Order 12866.
Preliminary Statement
Notice is hereby given of the filing with the Hearing Clerk of this
recommended decision with respect to the proposed amendment of
Marketing Agreement and Order 927 regulating the handling of winter
pears grown in Oregon and Washington, and the opportunity to file
written exceptions thereto. Copies of this decision can be obtained
from Melissa Schmaedick, 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 et seq.), hereinafter referred to as the Act, and the applicable
rules of practice and procedure governing the formulation of marketing
agreements and orders (7 CFR part 900).
The proposed amendments are based on the record of a public hearing
held on April 13 and 14, 2004, in Yakima, Washington and on April 16,
2004, in Portland, Oregon. Notice of this hearing was published in the
Federal Register on March 30, 2004 (69 FR 16501). The notice of hearing
contained order changes proposed by both the Winter Pear Control
Committee and the Northwest Fresh Bartlett Marketing Committee, which
are responsible for local administration of orders 927 and 931,
respectively. Marketing order 927 regulates the handling of winter
pears grown in Oregon and Washington. Marketing order 931 regulates the
handling of Bartlett pears in the same production area.
At a joint meeting of the Winter Pear Control Committee and the
Northwest Fresh Bartlett Pear Marketing Committee on November 13, 2003,
both Committees voted unanimously to recommend amendments to Marketing
Order 927. The amendments are intended to streamline industry and
program organization by placing both Marketing Order 927, regulating
the handling of winter pears, and Marketing Order 931, regulating the
handling of Bartlett pears, under one program: Marketing Order 927. If
this proposal were implemented, Marketing Order 931 would be
terminated. The amendments would also add pears for processing to the
order, and would update various provisions of the order.
The Committees proposed amendments to marketing order 927 include:
1. Expanding the definition of pears to include all varieties of
pears classified as summer/fall pears in addition to winter pears;
adding Concorde, Packham, and Taylor s Gold pears to the current list
of winter pear varieties; and adding a third category of pears which
would include varieties not classified as summer/fall or winter pears.
This amendment would extend program coverage to all pears grown in
Oregon and Washington.
2. Revising the definition of size to include language currently
used within the industry.
3. Extending the order's coverage to pears for processing by
revising the definition of handle, and adding definitions of processor
and process.
4. Establishing districts for pears for processing. This amendment
would divide the order s production area into two districts for pears
for processing: one being the State of Oregon and the other being the
State of Washington.
5. Dissolving the current Winter Pear Control Committee and
establishing two new administrative committees: the Fresh Pear
Committee and the Processed Pear Committee (Committees). This proposal
would add a public member and public alternate member seat to both of
the newly established Committees and would remove Section 927.36,
Public advisors. The Committees would coordinate administration of
Marketing Order 927, with each Committee setting assessments and
administering program functions specific to their commodity.
Coordinated administration would allow each Committee to make decisions
on behalf of the commodity they represent, yet combine administrative
functions, when applicable, to maximize efficiencies and minimize
program costs.
Additionally, related changes would be made to order provisions
governing nomination and selection of members and their alternates,
terms of office, eligibility for membership, and quorum and voting
requirements, to reflect the proposed dual committee structure.
6. Authorizing changes in the number of Committee members and
alternates, and allowing reapportionment of committee membership among
districts and groups (i.e., growers, handlers, and
[[Page 2521]]
processors). Such changes would require a Committee recommendation and
approval by the Department.
7. Adding authority to establish assessment rates for each category
of pears, including: Summer/fall pears, winter pears, and all other
pears. In addition, rates of assessment could be different for fresh
pears and pears for processing in each category, and could include
supplemental rates on individual varieties.
8. Adding authority for container marking requirements for fresh
pears.
9. Removing the order provision allowing grower exemptions from
regulation. This is a tool no longer used by the industry and, thus, is
considered obsolete.
10. Amending Sec. 927.70, Reports, to update order language
regarding confidentiality requirements to conform to language under the
Act.
11. Clarifying inspection requirements and adding authority to
eliminate those requirements if an alternative, adequate method of
ensuring compliance with quality and size standards in effect under the
order can be developed.
12. Eliminating the current exemptions for pears for processing and
for pears shipped to storage warehouses.
13. Providing that separate continuance referenda be held every 6
years for fresh pears and processing pears.
14. Adding the authority for the Committees to conduct post-harvest
research, in addition to production research and promotion (including
paid advertising).
15. Updating several order provisions to make them more current.
16. Revising order provisions to reflect the two-committee
structure being recommended for administration of the program.
Twenty-one industry witnesses testified at the hearing. These
witnesses represented fresh winter and summer/fall pear producers and
handlers, and processors of summer/fall pears in the production area.
All witnesses supported the Committees recommended changes; no
opposition was present at the hearing.
Witnesses addressed the need to simplify the operations of the
Northwest pear industry by combining the activities of the fresh winter
pear, the fresh summer/fall pear and the processed pear industries
under a single federal marketing order. Witnesses stated that the
proposed amendments would streamline pear industry activities,
including assessment collection, administration, regulation, promotion,
and research. The three industries are currently regulated under two
Federal marketing orders and two State commissions. If this proposal
were implemented, the two federal programs would be combined under one
federal program that would also assume functions similar to those under
the current state programs. Witnesses stated that the state programs
would likely be dissolved if this proposal were implemented.
Witnesses explained that the proposal would require expanding the
definition of pears under 927 to include all varieties of pears grown
in the production area. The proposed amendments would also include
revising the definition of handle, and adding definitions for process
and processor.
Witnesses stated that expanding the scope of the order to include
pears for processing would require a restructuring of the order s
administrative committee. The new committee structure would include one
committee with oversight for all fresh pear activities, and a second
committee with oversight for all activities related to pears for
processing. Additionally, witnesses spoke in favor of amending order
provisions governing nomination and selection of members and their
alternates, terms of office, eligibility for membership, and quorum and
voting requirements to reflect the proposed dual committee structure.
The order's production area, the States of Oregon and Washington,
would remain the same under the proposed amendments. However, the
subdivision of the production area into districts would be different
for pears for processing than for fresh pears. While four districts
would be established for fresh pears, pears for processing would only
have two districts: the State of Oregon and the State of Washington.
Witnesses also proposed adding a public member and public alternate
member seat to both of the newly established committees. The public
member and his or her alternate would be residents of the production
area, and would have no financial ties to the production, handling or
processing of pears. Witnesses stated that this proposal would also
result in the removal of Sec. 927.36, Public advisors, as unnecessary,
since the public advisors would be replaced by public members of the
committees.
Witnesses favored adding authority to the order to allow the
committees, each independently, to recommend changes in the number of
committee members and alternates of each committee, as well as
recommend reapportionment of committee membership among districts and
groups (i.e., growers, handlers, and processors). Witnesses stated that
this authority would allow the committees more flexibility in
responding to industry changes over time that may merit adjustments in
committee structure. These recommendations would be based on an
assessment of several industry indicators and would require approval by
the Department.
Witnesses stated that the order's assessment structure should also
be revised. Specifically, witnesses advocated adding authority to
establish assessment rates for each category of pears, including:
Summer/fall pears, winter pears, and all other pears. In addition,
rates of assessment could be different for fresh pears and pears for
processing in each category, and could include supplemental rates on
individual varieties. The Fresh Pear Committee would recommend
assessment rates for fresh pears and the Processed Pear Committee would
recommend assessment rates for pears for processing.
Proponents of this amendment stated that authority to establish
assessment rates by category would allow the committees to maintain
different assessment levels for each category of Northwest pears (based
on different budget needs), as well as providing the committees with
additional flexibility through the ability to apply supplemental rates
of assessments for individual varieties within each category.
Supplemental rates would be used to fund specific research or
promotional efforts for individual varieties, whereas categorical
assessment rates would be used to fund activities for an entire
category of pears.
Witnesses explained that authority for production research and
promotion, including paid advertising, currently exists under marketing
order 927. Expanding the order's definition of pears to include summer/
fall varieties and pears for processing would extend those authorities
to all Northwest pears.
In addition, witnesses stated their support for adding the
authority to conduct post-harvest research. Post-harvest research could
include activities such as storage and treatment of pears between the
field and the marketplace. Proponents stated that the authority for
production and post-harvest research, and promotion activities
including paid advertising, would enhance the order's ability to
support Northwest pear growers, handlers and processors.
In discussing the order's authority to regulate fresh pears,
witnesses supported adding authority to establish container marking
regulations. Witnesses stated that this authority, which could include
the use of generic industry logos, would provide the
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industry with a marketing tool to enhance the presentation of fresh
Northwest pears in the marketplace.
Witnesses also advocated adding authority to recommend modification
or elimination of inspection requirements provided that an alternative
method of ensuring compliance with quality and size standards were
developed. Any alternative system would have to be approved by the
Department through the rulemaking process.
Witnesses stated their approval of the Committees' recommendations
to: Eliminate the current exemption for pears for processing and for
pears shipped to storage warehouses as this provision is considered
obsolete; remove the order provision allowing grower exemptions from
regulation as this tool is also no longer used by the industry; and,
amend Sec. 927.70, Reports, to add confidentiality provisions of the
order concerning the handling of information provided to the Committees
and to specify in the order provisions that handlers maintain records
for at least two years.
Finally, witnesses supported requiring continuance referenda as a
means of determining grower sentiment on the order's operations. As
proposed, separate continuance referenda would be held every 6 years
for the fresh pear and processing pear provisions of the order (each
independently).
At the conclusion of the hearing, the Administrative Law Judge
stated that the final date for interested persons to file proposed
findings and conclusions or written arguments and briefs based on the
evidence received at the hearing would be June 1, 2004. The deadline
was subsequently extended to June 16, 2004. One brief on behalf of the
joint Winter Pear Control Committee and the Northwest Fresh Bartlett
Marketing Committee was filed. The brief contained an overview of the
industry's proposals and reiterated support for amending the order.
Material Issues
The material issues presented on the record of hearing are as
follows:
(1) Whether to amend the definition of ``pears'' to include all
varieties of pears grown in the production area;
(2) Whether to revise the definition of ``size'' to reflect current
industry usage of the term;
(3) Whether to add authority to regulate pears for processing, by
revising the definition of ``handle'', and adding definitions of
``processor'' and ``process'';
(4) Whether to establish districts for pears for processing;
(5) Whether to terminate the current Winter Pear Control Committee,
to establish two new administrative committees (the Fresh Pear
Committee and the Processed Pear Committee), to add a public member and
public alternate member seat to both of the newly established
committees, to remove Sec. 927.36, Public advisors, and to make
related changes to order provisions governing nomination and selection
of members and their alternates, terms of office, eligibility for
membership, and quorum and voting requirements;
(6) Whether to add authority for the proposed committees to
recommend changes in the number of committee members and alternates,
and the allocation of membership among groups and districts;
(7) Whether to add authority for the committees to recommend rates
of assessment for pears by category (summer/fall pears, winter pears,
and all other pears) and supplemental rates of assessment by variety;
(8) Whether to add authority for container marking requirements for
fresh pears;
(9) Whether to remove Sec. 927.54, Exemption Certificates, which
allows grower exemptions from regulations;
(10) Whether to amend Sec. 927.70, Reports, to add confidentiality
provisions concerning the handling of information provided to the
Committees and to specify in the order provisions that handlers
maintain records for at least two years;
(11) Whether to add authority to recommend modification or
elimination of inspection requirements, provided that an alternative,
USDA approved method of ensuring compliance with order quality and size
standards could be used;
(12) Whether to eliminate current exemptions for pears for
processing and for pears shipped to storage warehouses;
(13) Whether to provide that separate continuance referenda be held
every 6 years for fresh pears and processing pears;
(14) Whether to add authority for the proposed committees to
conduct post-harvest research, in addition to production research and
promotion (including paid advertising); and
(15) Whether to update several order provisions to make them more
current.
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 Number 1--Revision of the Definition of Pears
Section 927.4 of the order should be amended to include all
varieties of pears grown in the States of Oregon and Washington. This
amendment would entail adding a category for all pear varieties
characterized as summer/fall varieties, and would add the Concorde,
Packham and Taylor s Gold varieties to the current list of pear
varieties characterized as winter pear varieties. In addition, a third
category of pears should be added that would include all varieties not
classified as summer/fall or winter pears, that are grown within the
production area.
The winter pear order currently defines pears as any and all of the
Beurre D'Anjou, Beurre Bosc, Winter Nelis, Doyenne du Comice, Forelle,
and Seckel varieties of pears. It also includes any other varieties or
subvarieties characterized as winter pears that are grown in the
production area and are recognized by the committee and approved by the
Department.
The proposed amendment would broaden the scope of Federal marketing
order 927 to cover all pears produced within the production area.
Witnesses stated that without this proposed change in the definition of
pears covered by marketing order 927, all other proposed amendments
would not be possible as they entail bringing the fresh winter and
summer/fall pear industries and the processed pear industry under one
Federal regulatory program.
According to the record, there are eight principal varieties of
pears grown in the States of Washington and Oregon. These pear
varieties are split into categories of summer/fall and winter pears.
These references stem from the differences in the crop harvest and
marketing cycles of the different varieties.
Winter pears, such as the red and green Anjou, Bosc, Comice,
Seckel, Forelle, Concorde, Packham and Taylor's Gold varieties, are
typically harvested in early September. Winter pear varieties are
generally able to be stored longer than summer/fall varieties, and thus
can be sold throughout the winter, spring and summer. The marketing
season for Comice, Seckel, and Forelle generally runs through April.
The marketing season for Bosc pears extends into May, and Anjou pears
can be available into July or later.
Summer/fall varieties include the Bartlett and Starkrimson pear
varieties. Summer/fall pears are harvested in late summer and are
marketed throughout the fall, sometimes into January. Bartlett
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pears can either be red or green, with the green Bartlett being more
prevalent in the marketplace. Bartlett pears are also the variety of
pear that is most commonly used for processing. The Starkrimson variety
is a summer/fall variety that has recently become more important in the
overall volume of pear production in Oregon and Washington.
Witnesses also indicated that establishing an ``other'' category
would be prudent in the event that future varieties of pears were
developed that do not fall into the other established categories. The
industry would gain flexibility in responding to new developments in
the Oregon and Washington pear industry by providing for the structure
to classify such pears appropriately for program purposes. This would
allow the industry to avoid having to pursue amendment of the marketing
order in the future, if new varieties of pears are developed that are
not considered winter or summer/fall pears.
USDA is also recommending that Sec. 927.4, the definition of pears
proposed by industry, be revised to include language stating that all
pears with the genus name ``Pyrus'' produced within the production area
would be included under the order. This language was also included in
the brief filed by the joint Winter Pear Control Committee and the
Northwest Fresh Bartlett Marketing Committee in support of the proposed
amendments to marketing order 927. Accordingly, USDA recommends
revising Sec. 927.4, Pears, to include the genus name ``Pyrus'' in the
definition.
Witnesses stated that this proposed amendment would provide the
basis for many of the other proposed amendments discussed later in this
document. The industry intends to expand the scope of Federal marketing
order 927 to include all varieties of pears grown in Oregon and
Washington, to regulate both fresh pears and pears for processing, as
well as to establish two administrative committees for local oversight
and administration of the order. In order to effectuate these changes,
the definition of pears needs to be amended to provide authority to
regulate all pears under one order. This would be accomplished by
amending the order's definition of pears.
Witnesses explained that the winter, summer/fall, fresh and
processed pear industries are closely inter-related. Growing,
harvesting, packing, processing and marketing activities of all of
these industries impact each other to the extent that regulating them
under one Federal marketing order would be logistically beneficial for
the Oregon and Washington pear industry. Proponents of this amendment
stated that this amendment, in conjunction with the proposed amendments
discussed in later material issues, would help to improve the orderly
marketing of product within the industry.
To illustrate the interaction of the different pear industries,
witnesses used the example of a large crop of Bartlett pears. In this
example, communication between the fresh and processing sides of the
pear industry would be helpful in assuring timely movement of a
perishable product and maximizing returns for that product. Crop
estimates and harvest information, for example, could be shared between
the fresh and processed committees to anticipate market distribution
strategies for the large crop. The committees would facilitate
information sharing at the administrative, grower and handler levels to
enhance coordination of fresh and processed industry activities. For
example, potential overflow from the fresh market needs to be able to
move efficiently to the processed industry in order to prevent loss of
product. Timely movement of a perishable product is essential to
securing the highest grower return for that product.
Similarly, witnesses stated that regulating all varieties of pears
(winter and summer/fall) under one marketing order would synchronize
activities and facilitate inter-industry discussions and decision-
making.
There was no opposition testimony on this issue. For the above
reasons, it is recommended that section 927.4 be amended to include all
pears characterized as winter and summer/fall varieties and
subvarieties grown within the production area. A category for all pears
not classified as either winter or summer/fall pears should also be
established. USDA recommends including a reference to the genus name
``Pyrus'' as part of this definition.
A conforming change is needed in the title of 7 CFR Part 927. It is
proposed to be revised to ``Pears Grown in Oregon and Washington'' to
reflect the fact that the program no longer would cover only winter
pears.
Material Issue Number 2--Revision of the Definition of Size
Section 927.5, Size, should be revised to reflect contemporary
definition of the term as used by the industry today.
Witnesses explained that the current definition of ``size'' in the
order is outdated as it defines size according the number of pears that
can be packed in a standard western pear box. A standard western pear
box is described as a box that is 18 inches long, 11\1/2\ inches wide
and 8\1/2\ inches deep. At the time marketing order 927 was
established, the standard western pear box was the common receptacle
used for packing fresh pears. Over time, different forms of packing
containers with different dimensions have evolved. Thus, this
definition no longer accurately reflects the variety of containers used
within the industry.
Alternatively, witnesses proposed that the definition be revised to
include language describing a 44-pound net weight standard box or
container equivalent. According to the record, industry currently
describes a 44-pound box as a standard container, and uses this
definition to measure crop size and changes in crop volumes from year
to year.
Witnesses also explained that, given the proposal to add authority
to regulate pears for processing to the order, a size definition solely
based on a fresh pear packing box would not be appropriate. Witnesses
proposed a size definition that would also include a physical
measurement: The greatest transverse diameter of the pear taken at
right angles to a line running from the stem end. Proponents of the
revised definition stated that a diameter-based definition would
accurately describe pear sizes in both the fresh and processed pear
industries, and would more accurately reflect current sizing procedures
and technology. As one witness stated, the physical description for
measuring pears provides the basis for determining what size actually
goes into a box. Representatives from the pear processing industry also
explained that processors require a minimum-diameter size of 2\1/4\
inches for pears for processing. Thus, the revised definition of size
would better reflect current practices of both industries.
There was no opposition testimony on this issue. For the above
reasons, it is recommended that Sec. 927.5, Size, be revised to more
accurately reflect the contemporary definition used within the
industry.
Material Issue Number 3--Adding Authority to Regulate Pears for
Processing
Federal marketing order 927 should be amended to include authority
to regulate pears for processing by revising Sec. 927.7, Handler, and
Sec. 927.8, Ship or handle. These terms should be amended to include
persons receiving pears for processing. In addition, definitions of
``processor'' and ``process'' should be added to the order to further
clarify the amended terms ``handler'' and ``ship or handle.''
The order currently does not include authority to regulate pears
for
[[Page 2524]]
processing. However, the regulation of pears for processing is
authorized under the Act and, therefore, can be added as a provision of
marketing order 927. Given the proposal described in Material Issue 1,
revising the definition of ``pears,'' the authority to regulate pears
for processing would apply to all pear varieties grown in the states of
Oregon and Washington.
There are five processing plants in the production area, with one
in Oregon and four in Washington. Seventy five percent of the
processing tonnage produced within the production area originates from
the State of Washington, with 73 percent of the total located in the
Yakima area. Processed pear production totaled 842.2 million pounds in
the 2001/2002 crop year, compared to 1086.3 million pounds of fresh
pear production in the same year.
According to the hearing record, adding authority to regulate pears
for processing would complement the Oregon and Washington pear
industries' desire to coordinate and streamline industry-wide research,
promotion, and administrative activities. To accomplish this, the
definition of ``handle'' should be expanded to include receiving pears
for processing. Processing would be defined as canning, reducing to
concentrate, freezing, dehydrating, pressing or pureeing pears, or in
any other way converting pears commercially into a processed product. A
processor would be any person who commercially processes pears.
Most pear producers within the production area produce both winter
and summer/fall pear varieties for both the fresh and processed product
markets. Record evidence indicates that the fresh and processed product
markets compliment each other, as the latter provides a market for
product that cannot be profitably distributed in the fresh market.
Combining the activities of the fresh and the processed pear industries
under a single Federal marketing order would facilitate communication
among industry participants and would allow for more efficient
marketing and research.
Representatives of the processed pear industry testifying at the
hearing stated their support for adding authority to regulate pears for
processing under the order. Witnesses stated that a Federal marketing
order would provide a stable, unified, and constant vehicle to
accomplish industry production and marketing objectives, mainly
promoting consumption of fresh and processed Northwest pears, and
increasing grower returns. Witnesses expanded on the many benefits they
believed would result from collective industry action, and stated that
coordination of marketing and research efforts is essential to
maintaining market share in an increasingly competitive marketplace.
Moreover, witnesses explained that combining fresh and processed pear
activities under one program would represent a natural progression of
the long-existing cooperation between the two industries.
According to the record, pear growers in Oregon and Washington have
a 50-year history of dedicated funding to promote canned pears to
consumers and foodservice users. Formal support of the processed pear
industry began in 1954 with the establishment of the Pacific Northwest
Canned Pear Service (PNCPS), a non-profit marketing organization funded
through voluntary grower assessments.
The PNCPS continues to operate under the direction of growers from
Washington and Oregon through two State grower organizations: the
Washington State Fruit Commission and the Oregon Bartlett Pear
Commission. The two State organizations annually approve a budget based
on a per-ton assessment on pears delivered to processors. This
mandatory assessment is collected from shippers and processors by both
organizations, and provides the funds for the PNCPS to operate through
an annually approved contract.
Due to the mandatory collection of marketing dollars from
Washington and Oregon Bartlett pear growers who sell their tonnage for
processing, all of those growers are members of the PNCPS. Each of the
two State grower organizations appoints board members to the PNCPS
board of directors.
In addition, processor members pay an annual associate membership
fee and pay assessments on pears transported to the Northwest for
processing from California, Idaho, or Canada. Associate processor
members include all five pear processors operating in the production
area.
Witnesses testified, if implemented, the proposal to include
regulatory authority for pears for processing could lead to the
dissolution of the two State commissions. Collection of assessments and
administration of the marketing order program would become the
responsibility of the proposed Processed Pear Committee, described and
discussed under Material Issue 5.
Witnesses did not expect the proposed change in the structure of
processed pear organizations to result in a change to the combined
federal and state assessments that handlers are currently paying. The
proposed amendment is expected to result in a reorganization of
entities representing processed pear interests, reducing the number of
regulatory entities from two to one. Assessment collection would be
simplified, but the level of assessment is not expected to increase or
decrease significantly. According to the hearing record, current
assessments equal roughly $5 per ton of pears received for processing.
Handler assessments would be levied on the first individual
receiving pears from the producer for packing or processing. For
example, if a producer were to transport pears directly to a processor,
that processor would be considered the first handler and would be
responsible for submitting the appropriate assessment to the
administrative committee. If a producer delivers pears to a
packinghouse, where pre-sizing or grading for fresh market may take
place prior to selecting tonnage to be directed to the processor, then
the packinghouse would be considered the first handler and would be
responsible for the assessment amount due. If a producer were to
deliver pears to a packinghouse or processing facility outside of the
production area, then the producer would be considered the first
handler. The definition of handler would exclude any person receiving
pears solely for the purpose of transporting them to a packinghouse or
processor, such as a contract carrier.
Subject to approval by the Department, Federal processed pear
assessments could be allocated to a promotional organization to conduct
promotional activities on a contract basis, much like the current
contractual arrangement between the PNCPS and the State commissions.
Record evidence demonstrated that promotional activities, such as
consumer education campaigns, distributor rebate programs, and other
marketing, such as recipe development, have helped to sustain a stable
market share for processed pears. In spite of increasing competition
from imported pears and a growing preference among consumers for take-
out or fast food meal service, demand for processed pear products has
remained relatively stable over the past three decades.
The record evidence shows that over the last three years, imported
canned pears have become an increasingly competitive challenge to the
Northwest canned pear industry. Witnesses cited imports from China,
South Africa and Australia as the industry's top three foreign
competitors, with imported product accounting for nearly 10 percent of
domestic canned pear sales. Promotional activities geared towards
[[Page 2525]]
large-volume end users, including school foodservice, health care, and
other on-site foodservice operators and distributors, have helped the
Northwest processed pear industry to maintain a stable share of these
market sectors. Witnesses stated that incorporating processed pears
under the Federal marketing order for Oregon and Washington pears would
assist the industry and assure that promotional activities continue to
receive coordinated industry support.
Information presented at the hearing suggests that over the past
century a number of factors have converged to change consumer food
consumption patterns and encourage the emerging dominance of food
service over the retail sector. In an increasingly demanding work-life
environment, many consumers are becoming increasingly dependent on
dining out or purchasing prepared foods. With consumers turning to
foodservice with their food dollars, canned pear consumption has moved
away from the home and into foodservice operations.
As a result, representatives from the PNCPS explained that current
promotional activities related to this sector are largely oriented
towards consumer education and public relations efforts via food
editors and nutrition professionals, and consumer retail promotion.
According to the record, consumer promotion efforts, including
lifestyle brochures, newspaper recipe releases and consumer
newsletters, have helped to stabilize home consumption.
While witnesses stated that promotional activities are essential to
the continued vitality of the processed pear industry, they also
expressed their view that grade and size regulatory authority for
processed pears should not be included under the order. In other words,
supporters of this proposal only favored regulatory oversight of the
collection of assessments on pears for processing for the use of
funding research and promotion. This amendment would not include
authority to establish grade and size regulations for pears for
processing.
Representatives from the processed pear industry stated that during
the drafting of the proposal to amend marketing order 927 to include
pears for processing, processors were polled by members of the Winter
Pear Control Committee regarding support for grade and size regulatory
authority. Given that the processed pear industry currently operates
under established USDA grades and standards, processors opted against
including this authority in the proposed amendment. When asked at the
hearing if such authority might be desirable at some point in the
future, processors responded that they would be prepared to pursue
amendment of the order at such time. Thus, authority for grade and size
regulation is not included as part of this proposal.
Based on the record testimony and the reasons outlined above, Sec.
927.7, Handler, and Sec. 927.8, Ship or handle, should be amended to
include the activity of receiving pears for processing. In addition,
two new definitions should be added to the order: Sec. 927.14,
Processor, and Sec. 927.15, Process. No opposition to these proposed
amendments was presented at the hearing.
Material Issue Number 4--Districts
Section 927.11, Districts, should be amended to include two sets of
representative districts: one for fresh pear production and one for
processed pear production. This section of the order needs to be
revised to reflect the proposed establishment of two administrative
committees: the Fresh Pear Committee and the Processed Pear Committee,
discussed in Material Issue 5. The geographic boundaries of the total
production area under Marketing Order 927, which includes the states of
Oregon and Washington, would not change.
Marketing order 927 currently defines four districts for fresh
winter pear production. Given the proposal to expand marketing order
coverage to all varieties of pears produced and handled in the fresh
and processed pear industries of Oregon and Washington, these
representative districts need to be adjusted. The proposed amendment
would retain a four-district division of the production area for fresh
pear production, but would slightly modify the current district
boundaries to reflect the addition of summer/fall pear varieties. In
addition, two districts for processed pears would be established. These
would be defined along State boundary lines, with Oregon as one
district and Washington as the other.
The current Winter Pear Control Committee consists of 12 members
allocated among 4 geographic districts: Medford, Yakima, Mid-Columbia
and Wenatchee. The Medford and Yakima Districts each have one grower
and one handler member, and the Mid-Columbia and Wenatchee Districts
each have two grower and two handler members. There is also a non-
voting public advisor.
The current Northwest Fresh Bartlett Marketing Committee, which
represents Oregon and Washington summer/fall fresh production, has 14
members allocated among 4 districts: Medford, Yakima, Mid-Columbia and
Wenatchee. The Medford and Yakima Districts each have two grower and
two handler members, and the Mid-Columbia and Wenatchee Districts each
have two grower and one handler members. There is also one non-voting
public advisor.
Geographically, these districts are nearly identical to the winter
pear districts, with the exception of the division of production along
the Columbia River Gorge and southern Oregon. The differences in
district committee representation reflect the regional differences in
summer/fall pear production and winter pear production.
According to the record, the proposed Fresh Pear Committee
districts are based on the existing structure of the Winter Pear
Control Committee, which has been updated several times and which
accurately represents the interests of the fresh summer/fall pear
industry. The proposed fresh district structure also borrows from the
Northwest Fresh Bartlett Marketing Committee in that it divides the
State of Washington along a more logical division of County lines.
The proposed districts for the Fresh Pear Committee are as follows:
The Medford District would include all of the Counties in the State of
Oregon except for Hood River and Wasco Counties; the Mid-Columbia
District would include Hood River and Wasco Counties in the State of
Oregon and the Counties of Skamania and Klickitat in the State of
Washington; the Wenatchee District would include the Counties of King,
Chelan, Okanogan, Douglas, Grant, Lincoln, and Spokane in the State of
Washington, and all other Counties in Washington lying north thereof;
and, the Yakima District would include all of the State of Washington
not included in the Wenatchee District or in the Mid-Columbia District.
Record evidence indicates that the most significant change in the
proposed fresh pear district structure occurs in Oregon, with fresh
pear representation being shifted from the Mid-Columbia District to the
Medford District. Witnesses explained that growers from this area
specifically asked to be included in Medford instead of Mid-Columbia to
better reflect the distribution of fresh production in Oregon. The
shift in district boundaries would also result in more opportunities
for industry members from this region to participate as members of the
committee.
According to the record, there are roughly 350 fresh pear producers
in Hood River County, Oregon, and less than 40 fresh pear producers in
Medford County, Oregon. The area subject to the proposed shift in
district boundaries is
[[Page 2526]]
known as the Willamette Valley region and has less than 40 fresh pear
producers. Given the distribution of fresh pear producers in Oregon,
the proposal to merge Willamette Valley producers into the Medford
District would improve representation of that area on the committee.
The Medford Districts average annual production of winter pears has
decreased over the past five years by approximately 10.8 percent, or
from 1.127 million boxes (10 year average) to 1 million boxes (five
year average). Average annual production of summer/fall pear varieties
over the same time period has fallen 13 percent, from 269 thousand
boxes (10 year average) to 234 thousand boxes (five year average). At
the time, average annual production of summer/fall varieties in the
Mid-Columbia District have increased by nearly 10 percent, growing from
868 thousand boxes (10 year average) to 951 thousand boxes (5 year
average). Mid-Columbia average annual production of winter pears has
remained fairly stable over this period, decreasing by only one half of
a percent. Thus, expanding the Medford District would allocate a
portion of the current Mid-Columbia District production to that
district, and would expand the pool of Medford District industry
representatives eligible to serve on the committee.
The proposal to redefine Wenatchee District to include King, Grant
and Lincoln Counties, and all other Counties in Washington lying north
thereof, is also the result of a shift in boundary lines. The total
amount of commercial fresh production represented in this district
would not significantly change. However, the re-designation would allow
for a better division of production between districts in Washington if
production in the northern part of the State were to grow in the
future. Witnesses stated that under the proposed district boundaries
the State of Washington would be divided geographically into two
districts.
The proposed fresh pear district boundaries and corresponding
allocation of committee member representation, discussed in Material
Issue 5, are also validated by seasonal production summaries. A review
of production statistics by district covering 10 years presented at the
hearing indicate that the Wenatchee and Mid-Columbia Districts are the
largest producers of both fresh winter and summer/fall varieties, and
therefore merit a larger committee representation than the Medford and
Yakima Districts. The proposed district boundaries offer a more
accurate geographical representation of fresh pear production in the
States of Oregon and Washington and more fairly gauge regional
production differences.
According to the record, processed pear production has historically
been identified by Oregon and Washington State boundaries.
Representation of processed pear industry interests and collection of
mandatory State assessments have been conducted by respective State
commissions: the Oregon Bartlett Pear Commission in Oregon and the
Washington Stone Fruit Commission in Washington.
The proposed Processed Pear Committee, further discussed under
Material Issue 5, would initially be made up of 10 members allocated
between 2 districts. One district would encompass the entire State of
Washington. Because processed pear production in this district would
represent 75 percent of total processed pear production in the
production area, committee member representation would include two
grower members, two handler members and two processor members.
The other district would encompass the State of Oregon and would be
allocated committee representation of one grower member, one handler
member, and one processor member. (The public member would represent
the production area at-large.) This proposed structure meets the
existing language in the Act, which requires representation of
processors and producers to be equal.
Growers and processors testifying at the hearing stated their
support for the proposed processed pear districts and indicated that
representation by State offered an equitable division of production
interests on the proposed administrative committee. While Oregon only
represents 25 percent of total production area production, witnesses
agreed that the entire State should be included in the same district to
provide the Oregon processed pear industry a separate district.
Given the record evidence and the reasons outlined above, USDA
recommends that Sec. 927.11, Districts, be amended as proposed. This
amendment would create two sets of representative districts under the
order: one for fresh pears and one for processed pears. The proposed
amendment reflects current industry operations and ensures equitable
representation of producers, handlers and processors of pears in the
States of Oregon and Washington. No opposition to this proposal was
given at the hearing.
Material Issue Number 5--Termination of the Winter Pear Control
Committee and Establishment of the Fresh Pear Committee and the
Processed Pear Committee
The marketing order should be amended to create two administrative
committees: the Fresh Pear Committee and the Processed Pear Committee.
Conforming changes should be made for all sections related to committee
establishment, nomination, selection, voting, eligibility and tenure.
These changes should all reflect a two-committee structure, where each
committee has authority to act independently.
The order is currently structured around the Oregon and Washington
fresh winter pear industry, with the Winter Pear Control Committee
responsible for local administration of the program. The proposal to
expand order coverage to all pear varieties produced within the
production area, and to both the fresh and processed product
industries, necessitates modification of this structure.
All witnesses at the hearing supported including both winter and
summer/fall pears, in addition to all pear varieties not classified as
either, under marketing order 927. Witnesses explained that
consolidation would eliminate a confusing and inefficient system
currently comprised of two Federal marketing orders and two State
commissions. These four programs would be replaced with an updated
single marketing program, which would benefit producers, handlers, and
processors.
Witnesses also advocated the establishment of two administrative
bodies: One for the fresh industry and one for the processed industry.
Witnesses explained that while the two industries were both dependent
on the same production of pears, the administrative needs of the two
industries were different. Managing the two sides of the pear industry,
fresh and processed, would require two differing approaches. From
promotional activities to customers, trade factors to shelf life, and
consumer trends to cultural practices in the orchards, pears for the
fresh market differ from pears for processing.
According to the record, the ability for the fresh and processed
industries to recommend assessment levels, maintain separate financial
records, and establish reserves independently based on specific
promotional objectives, is very important. However, the two committees
would have the ability to work together in many areas, such as
[[Page 2527]]
funding of research that benefits all pears, and compiling statistical
reports. Witnesses stated that the proposed amendments to the marketing
order would provide a unified program for all pears under one marketing
order, yet recognizes the differences in the objectives of the two
industries. For these reasons, Sec. 927.20, Establishment and
membership, should be amended to create a Fresh Pear Committee and a
Processed Pear Committee.
The proposed Fresh Pear Committee should consist of 13 members of
whom 6 should be growers, 6 should be handlers and 1 should be a public
member. For each member there should be two alternates, designated as
the ``first alternate'' and the ``second alternate,'' respectively.
Each fresh pear district, described in Material Issue 4, should be
represented by one grower member and one handler member, except that
the Mid-Columbia District and the Wenatchee District, which should be
represented by two grower members and two handler members. The
committee should recommend a public member to the Department once the
industry representatives are nominated and appointed by the Department.
The proposed Processed Pear Committee should consist of 10 members
of whom 3 should be growers, 3 should be handlers, 3 members shall be
processors, and 1 should be a public member. For each member there
should be two alternates, designated as the ``first alternate'' and the
``second alternate,'' respectively. District 1, the State of
Washington, should be represented by two grower members, two handler
members and two processor members. District 2, the State of Oregon,
should be represented by one grower member, one handler member and one
processor member. The committee should recommend a public member to the
Department once the industry representatives are nominated and
appointed by the Department.
The proposal to add a voting public member to each administrative
committee is new to the order. Prior to the proposed amendments, the
Winter Pear Control Committee did have the authority to appoint a
public advisor. However, the public advisor did not have voting rights.
Witnesses supported the addition of a voting public member as they
anticipated that a non-industry perspective would contribute the
committee discussions and decision-making. Under the proposed
amendments, the public member would not be allowed to have financial
interests in the pear industry. Thus, the public member would be better
able to represent consumer interests.
Sections 927.21 and 927.22, which outline provisions for the
nomination and selection of committee members, should be amended to
include language specific to the two proposed administrative
committees. Nomination and selection of Fresh and Processed Pear
Committee members and their respective alternates would operate
similarly to the current nomination and selection system for the Winter
Pear Control Committee. Committee members would be elected for
nomination at a meeting of their peers. This means that growers would
be elected at growers' meetings, handlers would be elected at meetings
of handlers, and processors would be elected at meetings attended by
processors.
Advance notices of these meetings would be placed in the local
media, and all eligible members of that peer group could be nominated
for selection to the committees. After an individual is nominated, and
accepts that nomination, a statement containing background information
and acknowledgement of their willingness to serve would be submitted to
the USDA. Ultimately, committee member nominees would be selected and
appointed as committee members by USDA.
Sections 927.23 and 927.24 govern voting and eligibility
requirements for committee members. Again, these sections are based on
the language currently in place for the Winter Pear Control Committee.
These sections should be revised to reflect the proposed dual committee
structure. Voting guidelines stipulate that only growers, handlers or
processors, respectively, should vote for their peers.
Moreover, an individual should participate only in the election
held in the district in which he or she produces, handles or processes
pears. Individuals would be entitled to cast only one vote on behalf of
his or her self, his or her agents, partners, affiliates, subsidiaries,
and representatives. While each person may vote as a grower, handler or
processor, they would not be able to vote as a combination thereof.
Thus, if a person were a pear producer, handler and processor, he or
she would have to choose whether to participate in the producer,
handler or processor member nominations. Likewise, a producer who grows
pears in more than one district would have to choose the district in
which he or she wishes to participate.
In order to be eligible to serve as a committee member, a grower,
handler or processor must conduct their respective business in the
district that they represent. Officers or employees of a corporate or
limited liability corporation should be eligible to serve as
representatives of their employer.
Section 927.27, Term of office, should be amended to replace all
references to the Winter Pear Control Committee with the Fresh Pear and
Processed Pear Committee. The terms of office of members and alternates
should be for 2 years beginning on July 1. About one-half of committee
membership of each committee ends each June 30. This provision would
allow for staggered terms of office and would ensure that only one-half
of each committee rotates tenure each year, thus providing for a
continuation of experience among committee members.
Tenure limitations should be the same under the revised order as
they currently are for the winter pear committee members. This section
states that no member should serve more than three consecutive 2-year
terms unless specifically exempted by the Department. Members and
alternate members should continue to serve until their respective
successors are qualified to serve on the committee and are selected.
Section 927.33, Procedure, describes quorum and voting requirements
for committee action at meetings. The language in this section should
be revised to reflect the proposed Fresh and Processed Pear Committees
and should provide for a 75-percent attendance rate for a quorum for
each committee. All decision-making at committee meetings should
require the concurring vote of at least 75 percent of those members
present, including alternates serving in the place of any members.
When asked how procedural aspects of the order would be impacted
given a change in a committee size, witnesses stated that
administration of the order should continue to be conducted as
currently outlined. If a committee size were to change in terms of
total number of members, witnesses felt that the 75 percent requirement
for both quorum and committee action should be maintained.
According to the hearing record, witnesses supported the use of
current marketing order 927 language as a model for the administrative
functioning of the proposed Fresh and Processed Pear Committees.
Witnesses noted that marketing order 927 has a long history of
effectively meeting the needs of the Oregon and Washington fresh winter
pear industry. Therefore, few changes to the provisions of the
[[Page 2528]]
above-described sections were proposed.
Record evidence supports the proposed changes in Sec. Sec. 927.20
to 927.24, 927.27, and 927.33 described above. No opposition to these
amendments was offered at the hearing.
Numerous conforming changes are needed to reflect the proposed dual
committee structure. These proposed revisions would, for the most part,
replace all references to the ``Winter Pear Control Committee'' or
``Control Committee'' with references to the ``Fresh Pear Committee,''
the ``Processed Pear Committee,'' or both. Another change needed in
several sections is adding reference to processor committee members in
addition to producer and handler members. Such conforming changes are
needed in Sec. Sec. 927.9 Fiscal period; 927.26 Qualifications; 927.28
Alternates for members; 927.29 Vacancies; 927.30 Compensation and
expenses; 927.31 Powers; 927.32 Duties; 927.34 Right of the Secretary;
927.35 Funds and other property; 927.40 Expenses; 927.43 Use of funds;
927.45 Contributions; 927.50 Marketing policy; 927.52 Prerequisites to
recommendations; 927.53 Notification; 927.75 Liability; 927.79
Proceedings after termination; and 927.80 Amendments. Additionally one
heading should be changed from ``Control Committee'' to
``Administrative Bodies.''
Material Issue Number 6--Adding Authority for Changes in Committee Size
and Membership Allocation
Section 927.20 of the order should be revised to add authority for
the committees, each individually, to recommend changes in committee
size and structure. The intent of this proposal is to provide the
committees with a tool to more efficiently respond to the changing
character of the Oregon and Washington State pear industry. In
recommending any such changes, the following would be considered: (1)
Shifts in acreage within districts and within the production area
during recent years; (2) the importance of new production in its
relation to existing districts; (3) equitable relationship between
Committee membership and the various districts; (4) economies to result
from more efficient administration due to redistricting or
reapportionment of members within districts; and (5) other relevant
factors.
Testimony indicates that significant changes have occurred in both
the production base and industry demographics of the pear industry
since the order was implemented. These changes suggest that flexibility
in adapting to the changing character of the Oregon and Washington pear
industry is important to the administration of the order. Witnesses
stated that, ultimately, the order's ability to remain effective over
time would be reliant on its ability to change with the needs of the
industry. In this regard, witnesses proposed adding authority to the
order that would allow for committee size and structure to be
considered, and recommendations for change to be made.
Witnesses testified that careful industry analysis would lead to
sound recommendations to USDA regarding any change in committee size or
structure. If the authority to change the size of the committees were
added to the order, the committees could, at regular meetings, review
the current structure of the committees using the points of
consideration mentioned above. Upon completing this analysis, the
committees could make a recommendation to USDA for a change in the size
of the committee. Recommendations would be made by each committee
individually for the segment of the industry that they represent.
Implementation of this authority would allow such changes to be pursued
through the informal rulemaking process.
Given the changes that the Oregon and Washington pear industry has
seen over time, flexibility to change the size of the committees in
step with the evolving needs of the industry would be an important
tool. It would allow the committees to focus on the increasing
competitiveness in the market while minimizing costs and maximizing
efficiency.
Record evidence supports amending the order to add authority to
change committee size and structure. This amendment would allow each
committee, given due analysis and consideration of key factors and USDA
approval, to more quickly adapt to changes within the industry. There
was no opposition to the above proposal. Accordingly, USDA is proposing
that Sec. 927.20 be amended.
Material Issue Number 7--Assessment and Supplemental Assessment Rates
Section 927.41, Assessments, should be amended to allow the Fresh
Pear and Processed Pear Committees to recommend rates of assessment for
each category of pears, including summer/fall pears, winter pears, and
all other pears. In addition, rates of assessment could be different
for fresh pears and pears for processing in each category, and could
include supplemental rates on individual varieties.
Currently, the order provides for an assessment rate for winter
pears, and supplemental assessment rates for individual varieties and
subvarieties of winter pears, to be established. Rates of assessment
are recommended to the Department for approval. If authority to
establish rates of assessment for summer/fall and other pear varieties,
as well as supplemental rates of assessment, were incorporated under
the order, they, too, would be subject to approval by USDA. Assessments
are used to fund the administrative functions of the committee, in
addition to any research and promotional activities authorized under
the order. According to the record, supplemental rates of assessment
would be used for expenses specific to an individual variety or
subvariety of pear.
Witnesses stated that three different base assessments would best
serve the industry. Historically, fresh winter pear varieties have paid
higher assessments than fresh summer/fall pears. Pears for processing
have been assessed at yet a different level, and could feasibly have
differential assessments for winter, summer/fall or other varieties
over time.
Moreover, while the proposed amendments would result in unifying
the programs for winter pears and summer/fall pears varieties under one
marketing order, (and one, combined fiscal year) separate base
assessment rates would allow for differences in the budget requirements
for each category. Winter pears have a distinct season from summer/fall
pears, and thus present distinct, identifiable costs. The operational
differences of each category reflect the need for maintaining
differences in base assessment rates in order to generate adequate
funds cover category-specific costs.
According to the record, the base assessment for pears classified
as ``other'' is intended for the future needs of the industry as new
varieties or subvarieties of the genus Pyrus are developed that do not
fit under either ``winter pear'' or ``summer/fall pear.''
Besides the differences between fresh and processed pears,
witnesses stated that it would be important to provide each committee
with the authority to establish varying rates of assessment on a
variety-specific basis. This authority would provide the committees
with flexibility to ensure that variety-specific projects could be
undertaken as special promotional or research needs develop. Having the
ability to add a supplemental rate of assessment to a specific variety,
without raising assessments for all other pears, would allow the
committee to address those needs without requiring funding by
[[Page 2529]]
entities not involved with the production or handling of that variety.
According to the record, a supplemental rate of assessment for
Anjou pears currently exists under marketing order 927. Funds generated
by this supplemental assessment are used to address research and
production issues specific to ethoxyquin use to stop scald, a defect
found almost exclusively in Anjou pears. Anjou growers testifying at
the hearing indicated their support of this supplemental assessment and
stated that without the resulting extra revenue, research and
registration of ethoxyquin chemicals essential to the industry would be
unavailable. Without the flexibility of a supplemental assessment,
witnesses stated that the lack of funding and loss in investments of
Anjou production could have resulted in an industry crisis.
Record evidence supports amending the marketing order to authorize
establishment of rates of assessment for each category of pears,
including summer/fall pears, winter pears, and all other pears. In
addition, rates of assessment could be different for fresh pears and
pears for processing in each category, and could include supplemental
rates on individual varieties or subvarieties. There was no opposition
to the above proposal. Accordingly, the Department is proposing that
Sec. 927.41 be amended.
Material Issue Number 8--Adding Authority for Container Marking
Requirements
Section 927.51, Issuance of regulations and modification,
suspension, or termination thereof, should be amended to provide
authority for container marking regulations for fresh pears. This
authority would allow the Fresh Pear Committee to recommend mandatory
marking or labeling requirements on containers used in the packing or
handling of fresh pears grown in Oregon and Washington. Any committee
recommendation would be subject to review and approval of the
Secretary.
The order currently authorizes the establishment of grade, size and
quality regulations, but does not include container-marking authority.
Witnesses stated that this authority, which would include the use of
generic industry logos, would provide the industry with a marketing
tool to enhance the presentation of fresh Northwest pears in the
marketplace.
According to the record, the industry's ability to deliver a
consistently graded, sized, weighed, and marked product has become
steadily more important. The growing presence of imported pears and
other like products have caused increased competition for the
consumer's attention in the marketplace. Pear supply and utilization
figures from the USDA's Economic Research Service show that imports
have accounted for between 20 and 23 percent of U.S. domestic fresh
pear consumption in recent years. Imports from Argentina and Chile are
the most prevalent. Use of a generic pear logo, by the Northwest Pear
Bureau, the promotional organization representing Oregon and Washington
fresh pears, has been helpful in promoting pears to consumers. If the
proposed container marking authority were implemented, the Fresh Pear
Committee could expand the use of this logo or develop similar
promotional marking requirements.
Witnesses also explained that handlers, in packing to the varying
demands of their customers, are using an increasing number of different
types of containers. Pear sizes have traditionally been associated with
the number of pears that fit into a western standard box (see Material
Issue 2). However, since the western standard box is no longer
``standard'', determining the size of pear packed cannot be simply
calculated by counting the number of pears in the container. For this
reason, handlers testifying at the hearing stated that container
marking would be helpful in reducing confusion in the marketplace. If
pear size were required to be marked on all containers packed,
regardless of the container size or shape, this information would be
more readily available to consumers. This information would also allow
for easier price comparisons between differing containers holding the
same size pear.
Witnesses offered the following example of regulating 180-size
pears to describe how container-marking authority could be beneficial
to the fresh pear industry:
If the Fresh Pear Committee were to determine that, for example,
size 180 pears are not profitable to the grower, a regulation
eliminating that size from the marketplace could be implemented. The
committee could also implement a container-marking requirement
mandating the marking of product size on all fresh pear containers. In
this case, container marking would facilitate better identification of
the size of pears in containers and better communication of size of
product to customers.
Testimony indicated that fresh packing facilities are already
configured for labeling and container marking. Witnesses noted that
there would be little, if any, need for equipment changes or additions.
Thus, the proposed change is not expected to negatively affect the
costs associated with handling fresh pears. The proposed amendment
would only authorize container marking specifications; it would not
impose any new regulatory requirements on Oregon or Washington fresh
pear handlers. Authority to regulate container pack or size is also not
included as part of this proposal. Any specific recommendation by the
Committee to implement this authority would be subject to analysis
through the informal rulemaking process.
Record evidence supports amending the order to include container
marking authority. This amendment would allow the Fresh Pear Committee
to recommend, and USDA to implement, container marking requirements
through the informal rulemaking procedure. No opposition to the above
proposal was voiced at the hearing. Accordingly, USDA proposes that
Sec. 927.51 be amended.
Material Issue Number 9--Removal of Grower Exemption Certificates
Section 927.54, Exemption certificates, should be removed from the
order as it is obsolete and no longer used by the industry. This
section provides authority for the issuance of exemption certificates
to growers who would be prevented from shipping product under a grade
or size regulation implemented under the order. A grower receiving such
an exemption certificate would be allowed to ship a quantity of the
variety being regulated equal to the average shipping quantity of that
variety for the district in which he or she produces.
According to the record, grade and size regulations for pears other
than the Anjou pear variety have only been implemented once in the
history of marketing order 927, in 1977. Witnesses stated that the
practical use of this exemption clause at that time was deemed
ineffective. Consequently, it was recommended by the committee that
this authority be eliminated.
For the above reasons, the Department agrees that Sec. 927.54
should be removed from the order.
Material Issue Number 10--Confidentiality and Record Retention
Requirements
The Fresh Pear Committee and the Processed Pear Committee should,
each independently, have authority to establish handler reporting
requirements, subject to USDA approval. Section 927.70, Reports, should
be further revised to include language spelling out confidential
[[Page 2530]]
treatment of handler information submitted to the committees under the
mandatory reporting requirements of this section.
Confidentiality would help protect handlers against any disclosure
of information that might adversely affect or reveal a handler's
competitive position. The proposed amendment would also add language
providing that handlers must retain shipping and disposition records of
pears handled for two years. The record retention requirement would
allow the committees access to information in the event that handler
reports need to be verified.
According to the record, Oregon and Washington winter and summer/
fall pear handlers currently submit reports under marketing orders 927
and 931. Information submitted in accordance with reporting
requirements provides the data necessary for such things as annual
production by variety, shipment volumes during the season, and historic
comparisons. In turn, the committees use industry reports to determine
promotion, sales and marketing activities. Information gathered from
these reports is also used to calculate assessments and conduct
compliance audits.
Witnesses stated that adding the requirement for record retention
for two years would formalize current industry practices and would
update order language to conform to the Act.
For the reasons described above, Sec. 927.70, Reports, should be
amended to include confidentiality and record retention requirements.
No opposition to this proposal was voiced at the hearing.
Material Issue Number 11--Inspection Requirements
Section 927.60, Inspection and certification, should be amended to
clarify current inspection requirements and add authority for the Fresh
Pear Committee to recommend elimination of those requirements under
certain circumstances.
Section 927.51 of the order authorizes the establishment of grade,
size and quality requirements for fresh shipments of pears. Section
927.60 requires that each shipment of fresh pears be inspected and
certified by the Federal-State Inspection Service. The primary purpose
of the inspection and certification requirement is to ensure compliance
with any regulations in effect under the authority of Sec. 927.51.
Traditionally, the pear industry has used end-line inspection
procedures. Under this scenario, samples of packed pears are examined
at the end of the production process, and the results are certified by
Federally licensed inspectors. The record shows that in recent years,
the Federal-State Inspection Service has developed effective, less
costly alternatives to the end-line inspection program. One alternative
is the ``Partners in Quality'' program, a documented quality assurance
system. Under this program, individual packing houses must demonstrate
and document their ability to pack product that meets all relevant
quality requirements. Effectiveness of the program is verified through
periodic, unannounced audits of each packer's system by USDA-approved
auditors.
Another program recently developed is the Customer Assisted
Inspection Program (CAIP). Under CAIP, USDA inspectors oversee the in-
line sampling and inspection process performed by trained company
staff. USDA oversight ranges from periodic visits throughout the day to
a continuous on-site presence.
Witnesses at the hearing testified that the fresh pear industry
should be able to utilize any method of inspection acceptable to the
Federal-State Inspection Service. These alternative methods have been
developed by USDA as a means of reducing costs to industry. Individual
pear handlers could choose the method of inspection best suited to
their operations. The language of Sec. 927.60 is proposed to be
revised to make this clarification.
Witnesses also testified that the Committee should be authorized to
recommend modification or elimination of the inspection requirement if
it is able to devise an alternative means of ensuring compliance with
any quality and size standards in effect under the order. Any
alternative system would have to be approved by the Department through
the informal rulemaking process. Additionally, it would have to provide
adequate assurance that handlers under the program were in compliance
with program requirements.
The Agricultural Marketing Service is responsible for ensuring that
all handlers regulated under a marketing order program are in
compliance with any regulations that are in effect. Marketing order
administrative committees have the responsibility of locally
administering marketing order programs, which includes monitoring
industry s compliance with order requirements, and reporting any
violations to the Department for enforcement measures.
While the Department supports and encourages innovation and
development of cost-saving procedures, it is important that the program
maintain its integrity and that any quality or size regulation in
effect are not compromised.
Witnesses at the hearing did not provide specific examples of any
alternatives. However, they supported maximum flexibility in the order
to allow the industry to take advantage of any innovative procedures
that may be available in the future. As previously discussed, such
procedures would require USDA approval.
According to the hearing record, the integrity of the industry s
commitment to comply with grade and size regulations would not be
compromised. The authority to recommend alternatives to mandatory
inspection would be a practical tool for the industry. It would allow
grade and size standards to be maintained, yet could allow for time and
cost-saving opportunities.
One witness offered the example of current quality regulations in
effect for Anjou pears. All Anjou pears shipped domestically prior to
November 1st must have a pressure reading of 14 pounds or below and
have been cooled to at least 35 degrees. This regulation requires that
the fruit be inspected. Handlers currently pay 12\1/2\ cents per
hundredweight for this inspection. At times, they lose time due to
delays in the inspection process. Handler witnesses also indicated that
delays could be longer for smaller shippers that do not have inspectors
stationed at their warehouses. Witnesses explained that if alternative
forms of inspection were allowed, grade and size regulation could be
more economically implemented.
Record evidence supports amending Sec. 927.60 to clarify that any
inspection program developed by the Federal-State Inspection Service
may be utilized by fresh pear handlers under the order. Additionally,
that section should be amended to add authority for the Fresh Pear
Committee to recommend modification or elimination of the inspection
requirement provided that an adequate method of ensuring compliance
with quality and size requirements can be developed. This amendment
would allow the Fresh Pear Committee to recommend, and USDA to
implement, time and cost-saving mechanisms for handlers without
compromising product quality in the marketplace.
The proposed language of 927.60, Inspection and certification, has
been revised somewhat from what appeared in the Notice of Hearing to
clarify the intent of the pear industry, as testified at the hearing.
[[Page 2531]]
Material Issue Number 12--Elimination of Obsolete Exemption Provisions
Section 927.65, Exemption from regulation, allows pears shipped for
certain purposes to be exempt from handling regulations in effect under
the order as well as from assessments. This section should be amended
by deleting obsolete provisions.
Currently pears shipped for consumption by charitable institutions,
distribution by relief agencies, or conversion into by-products are
exempt from regulation. Since this decision recommends extending
program coverage to pears for processing, the third purpose listed
needs to be deleted.
Additionally, paragraph (c) of Sec. 927.65 provides authority for
the committee, with the approval of USDA, to designate storage
warehouses within the production area. Pears shipped to those storage
warehouses would be exempt from any regulatory provisions in effect
under the order. This authority has never been used. As such, the
record supports deleting this provision as unnecessary. The
administrative committees would retain the authority (provided in Sec.
927.65(b)) to designate types of shipments that should be exempt from
regulations (including payment of assessments). Such exemptions could
only be implemented with USDA approval through informal rulemaking.
This proposal also recommends revising the language in Sec. 927.64
paragraphs (a) and (b), to reflect the dual committee structure
described in Material Issue 5. The amended language would replace all
references to the ``Winter Pear Control Committee'' in this section
with ``the Fresh Pear Committee or the Processed Pear Committee.''
Given the above-described reasons, the Department agrees that Sec.
927.64 should be amended by removing paragraph (c) from the order and
updating language in paragraphs (a) and (b) to reflect to the proposed
dual committee structure. No opposition to this proposal was presented
at the hearing.
Material Issue Number 13--Continuance Referenda
Section 927.78, Termination, should be amended to provide for
separate continuance referenda for fresh pears and pears for processing
every 6 years. A vote to discontinue the program with respect to fresh
pears would not result in discontinuance of the order with respect to
pears for processing, and vice versa.
Marketing order 927 currently requires that continuance referenda
be held every 6 years. Witnesses supported the need for maintaining the
referendum process and stated that this practice should be extended to
both fresh and processed pears.
The record shows that producers should have an opportunity to
periodically vote on whether a marketing order should continue.
Continuance referenda provide an industry with a means to measure
producer support for the program. Experience has shown that programs
need significant industry support to operate effectively. Continuance
would require a favorable vote of at least two-thirds of those voting,
or at least two-thirds of the volume represented in the referendum.
This is the same as that for issuance and amendment of an order.
The USDA believes that producers should have an opportunity to
periodically vote on whether the marketing order should continue, and
that the costs in time and money are well worth the periodic producer
feedback afforded by such referenda. Accordingly, the record evidence
supports the requirement that such referenda be conducted.
Record evidence supports the amendment of Sec. Sec. 927.78 to
require separate continuance referenda for fresh and processed pears.
No opposition to this proposal was received at the hearing.
Material Issue Number 14--Adding Authority for Post-Harvest Research
Section 927.47, Research and development, should be amended to
include authority for post-harvest research. In addition, the language
in this section should be revised to reflect the proposed dual
committee structure. All references to the Winter Pear Control
Committee should be revised to reference the proposed Fresh and
Processed Pear Committees.
The order currently contains authority for production research and
marketing research, but does not contain specific authority for post-
harvest research. Examples of post-harvest research include developing
improved storage, handling and packaging technologies. Witnesses
supported the need for research in this area and discussed the benefits
currently brought to the industry through production and market
research.
Witnesses stated that research and promotion have been beneficial
in assisting the pear industry to improve crop yields and enhance
marketability and market distribution of their product. As a result,
pears have been able to retain a viable role in an increasingly
competitive market. Post-harvest research would complement the already
existing authorities, as it would focus on a section of the pear crop
to market flow that, until now, has not benefited from research
activities. For example, improved storage techniques could benefit the
pear industry by decreasing the loss of product due to storage, or by
increasing the storability of product to help prolong the marketing
season. Funding for these activities would come from assessments and
would be subject to approval by the Department.
Authority for promotion, including paid advertising, also currently
exists under the order. Given the proposal to add summer/fall pear
varieties to the scope of the order, the already existing authority for
paid advertising would be applied to these varieties if the proposed
amendments were implemented. Witnesses stated that these promotional
activities, including paid generic advertising, have historically been
beneficial in boosting sales and maintaining market share.
Witnesses also expressed that research and promotion activities
were likely to be more effective and cost-efficient under the proposed
dual-committee structure as the industry would be able to better
coordinate needs and resources. Promotional authority for both
commodities, fresh and processed pears, should include market research
and development projects, as well as marketing promotion, including
paid advertising. In the absence of this proposed change, the
effectiveness of the total pear marketing program would be limited by
the inability to use all available tools when promoting pears grown in
the Northwest.
Record evidence indicates that, in the past, pear-related research
has been supported by a number of industry organizations, State
commissions, and Federal marketing orders. With the proposed
consolidation of all pears under one marketing order, it is essential
that both committees have the authority to collect and allocate
research assessment dollars to ensure that the necessary funding
continues to be available for specific projects supported by the
industry. To this end, witnesses stated that research benefits
everyone. As an example, research that leads to improved pack-outs or
improved storability would likely increase grower returns and provide a
better product on store shelves, to the benefit of the consumer.
Given the reasons outlined above, Sec. 927.47, Research and
promotion, should be amended to include authority for post-harvest
research. In addition, changes should be made in the language of this
section to reflect the proposed
[[Page 2532]]
dual-committee structure representing both fresh and processed pears.
No opposition to this proposal was voiced at the hearing.
Material Issue Number 15--Updating of Order Provisions
Marketing order 927 contains several sections that should be
amended to better reflect current industry operations. These amendments
are largely considered housekeeping changes, as they are intended to
simply update language rather than alter the meaning of order
provisions in any way.
Section 927.1, Secretary, should be revised to include the modern
definition of this term. The revised definition recognizes officers or
employees of the Department of Agriculture as delegates of the
Secretary of Agriculture.
Section 927.3, Person, should be revised to make this definition
consistent with that in the Act.
Section 927.6, Grower, should be revised to recognize the term
``producer'' as a synonymous term.
Section 927.44, Collection of assessments, should be removed as
being obsolete and inconsistent with USDA policy.
Section 927.77, Effective time, should be revised by removing the
date ``August 26, 1939'' as obsolete.
No opposition to these amendments was voiced at the hearing.
Accordingly, USDA proposes that the above-described sections be
amended.
Small Business Consideration
Pursuant to the requirements set forth in the Regulatory
Flexibility Act (RFA), the Agricultural Marketing Service (AMS) has
considered the economic impact of this action on small entities.
Accordingly, AMS has prepared this initial regulatory flexibility
analysis.
The purpose of the RFA is to fit regulatory actions to the scale of
business subject to such actions 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. Thus,
both the RFA and the Act are compatible with respect to small entities.
Small agricultural producers have been defined by the Small
Business Administration (SBA)(13 CFR 121.201) as those having annual
receipts of less than $750,000. Small agricultural service firms, which
include handlers regulated under the order, are defined as those with
annual receipts of less than $5,000,000.
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 record evidence is
that most of the proposed amendments are designed to enhance industry
efficiencies and reduce costs, thereby improving grower returns.
The record indicates that there are approximately 1,850 pear
growers in Oregon and Washington. Of that total, 1,345 growers report
Bartlett or other summer/fall pear production, and 1,753 growers report
winter pear production. Two-year average NASS figures (the 2002 crop
year and preliminary figures for 2003) provides the following
production profile for Washington and Oregon, respectively: bearing
acres, 24,800 and 17,600; yield per acre, 16.8 tons and 11.8 tons;
annual production, 417,500 tons and 207,500 tons. Total acres planted
in pears for Washington and Oregon (including non-bearing acres) in
2002 were 26,586 and 22,822, respectively. Average Washington and
Oregon pear pack-out for the 10-year period from 1993/94 to 2002/03 was
14,639,225 standard boxes, compared to 13,476,829 standard boxes for
1989/90-1998/99.
Summing average Washington and Oregon pear acreage for 2002 and
2003, and dividing by the number of growers (1,850), the estimated
average acreage per grower in the two-state area is 26.7 total acres
and 22.9 bearing acres. According to the 1997 Agricultural Census, the
average Oregon and Washington pear grower had approximately 23 and 15
total acres, respectively. The sum of average Washington and Oregon
pear production for 2002 and 2003, divided by the number of growers,
yields an estimated average production per grower in the two-state area
of 338 tons (676,000 pounds).
The average fresh market grower return for the two States has been
between 20 and 22 cents per pound in recent years, and between 10 and
12 cents per pound for processing. Estimated 2-year average pear sales
revenue per grower in the production area is approximately $101,000,
which is between \1/7\ and \1/8\ of the revenue that would qualify a
grower to be a large grower according to the SBA definition (if based
on pear sales alone). According to the hearing record, roughly 75
percent of the fresh pear producers in the States of Oregon and
Washington qualify as small producers. One witness stated that a 1,000-
acre farm represents the threshold between a small and a large producer
(a substantially different definition from what the SBA uses).
There are 55 handlers that handle fresh pears produced in Oregon
and Washington; 73 percent of these fall into the SBA definition of
``small business. There are five processing plants in the production
area, with one in Oregon and four in Washington. All five processors
are larger than the SBA's definition of small business. According to
information presented by processors testifying at the hearing, roughly
90 percent of pears received for processing come from small grower
entities.
The proposals put forth at the hearing would streamline industry
organization, but would not result in a significant change in industry
production, harvest or distribution activities. In discussing the
impacts of the proposed amendments on small growers and handlers,
witnesses indicated that the changes are expected to result in lower
costs.
If implemented, the amendments would result in the consolidation of
marketing orders 927 and 931, regulating fresh winter pears and summer/
fall pears, respectively. Program coverage would also be extended to
pears for processing. The combined programs would be administered by
two new administrative committees, one for fresh pears and one for
pears for processing. Cost savings could occur as a result of more
efficient coordination of administrative activities between the two
proposed committees.
Record evidence indicates the proposal to revise the order s
inspection provisions may result in cost savings for handlers. Handlers
within the production area typically have about 75 percent of their
product inspected on a voluntary basis. The remaining 25 percent
represents the amount of additional product that would be required to
be inspected if regulations were in effect.
Handler witnesses also reported that inspection costs average 12\1/
2\ cents per hundredweight, with a $9.00 minimum fee. In addition to
paying the inspection fee, handlers may also experience delays in
shipments while waiting for inspection to be completed. Handlers
indicated that such delays could be longer for smaller shippers that do
not have inspectors regularly stationed at their warehouses. This
proposal seeks to reduce these costs by allowing alternatives to
mandatory inspection.
Traditionally, the pear industry has used end-line inspection
procedures. Under this scenario, samples of packed pears are examined
at the end of the production process, and the results are certified by
Federally licensed
[[Page 2533]]
inspectors. The record shows that in recent years, the Federal-State
Inspection Service has developed effective, less costly alternatives to
the end-line inspection program. One alternative is the Partners in
Quality program, a documented quality assurance system. Under this
program, individual packing houses must demonstrate and document their
ability to pack product that meets all relevant quality requirements.
Effectiveness of the program is verified through periodic, unannounced
audits of each packer's system by USDA-approved auditors.
Another program recently developed is the Customer Assisted
Inspection Program (CAIP). Under CAIP, USDA inspectors oversee the in-
line sampling and inspection process performed by trained company
staff. USDA oversight ranges from periodic visits throughout the day to
a continuous on-site presence. Witnesses at the hearing testified that
the fresh pear industry should be able to utilize any method of
inspection acceptable to the Federal-State Inspection Service. These
alternative methods have been developed by USDA as a means of reducing
costs to industry. If this amendment were implemented, individual pear
handlers could choose the method of inspection best suited to their
operations, thereby possibly reducing costs associated with inspection.
Additionally, the authority to eliminate inspection requirements
could have handler cost implications. However, any increase or decrease
in costs could not be determined until specific alternative methods are
developed to assure compliance with any quality and size standards in
effect.
The proposal to authorize container marking requirements is not
expected to result in significant cost increases for fresh pear
handlers. Testimony indicated that packing facilities are already
configured for labeling and container marking. Witnesses noted that
there would be little, if any, need for equipment changes or additions.
Thus, the proposed change is not expected to have any adverse financial
impact related to handling fresh pears. It should be noted that the
proposed amendment would only grant the committees authority to
recommend container markings; implementation of this authority could be
done through informal rulemaking in the future. The amendment itself
would therefore not impose any new regulatory requirements on Oregon or
Washington fresh pear handlers.
Witnesses explained that the winter, summer/fall, fresh and
processed pear industries are closely inter-related. Growing,
harvesting, packing, processing and marketing activities of these
industries all impact each other. Thus, bringing all industry segments
together under a single marketing program would be beneficial for the
Oregon and Washington pear industry. Proponent witnesses stated that
the combined amendments, if implemented, would help to improve the
orderly marketing of product within the industry.
Similarly, coordinated marketing and distribution efforts for fresh
varieties that appear in the marketplace simultaneously would assist in
maximizing grower returns from each variety. While the industries
currently undertake coordinated marketing and promotional activities,
witnesses stated that combining these industries would further
synchronize activities and facilitate industry discussions and
decision-making.
The amendments would add authority to assess summer/fall pear
handlers and undertake promotional activities on their behalf in a
manner similar to that done currently for winter pears. When asked if
assuming this authority would be acceptable to the summer/fall pear
industry, witnesses supported promotional activities, including paid
generic advertising, as a way to boost sales and maintain market share.
Post-harvest research would also benefit the pear industries by
focusing on a section of the pear crop-to-market flow that, until now,
has not benefited from research activities. Improved storage techniques
resulting from industry-funded post-harvest research could benefit the
pear industry by decreasing the loss of product due to storage, or by
increasing the storability of product to help prolong the marketing
season.
A significant market-facilitating function carried out by the
current marketing order committees is the collection of statistical
data. That function would continue under the amended marketing order
and the authority to collect information would extend to additional
varieties that are currently produced. Flexibility is provided for
including other varieties in the future. Witnesses emphasized the
importance and value of collecting and disseminating accurate
statistical information to enable industry participants to make
economic and marketing decisions.
The proposal to establish two administrative committees also
includes the addition of a public member to each of those committees.
The benefit of adding a non-industry, consumer perspective to committee
deliberations and decision-making could prove very beneficial.
Witnesses stated that this additional perspective would improve the
committees understanding of the consumer in the marketplace and could
enhance committee activities aimed at increasing consumer demand for
Oregon and Washington pears.
The addition of a public member to each committee is not expected
to result in any substantial cost increases. While these members would
be entitled to reimbursement for certain expenses allowed for under the
order, this expense is neither different nor any more burdensome than
the current reimbursement arrangement for committee members.
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 entities. The record evidence is that
most of the amendments are designed to reduce costs. While some of the
proposals could impose some minimal costs, those costs would be
outweighed by the benefits expected to accrue to the Oregon and
Washington pear industry.
Current information collection requirements for Part 927 are
approved by OMB under OMB number 0581-0089. Any changes in those
requirements as a result of this proceeding would be submitted to OMB
for approval. Witnesses stated that existing forms could be adequately
modified to serve the needs of the proposed fresh and processed pear
committees. While conforming changes to the forms would need to be made
(such as changing the name of the committee), the functionality of the
forms would remain the same.
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 proposed rule. These amendments are
designed to enhance the administration and functioning of the marketing
order to the benefit of the industry.
Committee meetings regarding these proposals as well as the hearing
dates were widely publicized throughout the Oregon and Washington fresh
and processed pear industries, and all interested persons were invited
to attend the meetings and the hearing and participate in deliberations
on all issues.
[[Page 2534]]
All committee meetings (both of the Winter Pear Committee and the
Northwest Bartlett Pear Committee) and the hearing were public forums
and all entities, both large and small, were able to express views on
these issues. Finally, interested persons are invited to submit
information on the regulatory and informational impacts of this action
on small businesses.
A 30-day comment period is provided to allow interested persons to
respond to this proposal. Thirty days is deemed appropriate so that
this rulemaking may be completed prior to the beginning of the 2005
crop year, beginning July 1, 2005. All written exceptions timely
received will be considered and a grower referendum will be conducted
before these proposals are implemented.
Civil Justice Reform
The amendments to Marketing Agreement and Order 927 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 section 608c(15)(A) of the
Act, any handler subject to an order may file with USDA a petition
stating that the order, any provision of the order, or any obligation
imposed in connection with the order is not in accordance with law and
request a modification of the order or to be exempted therefrom. A
handler is 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.
Rulings on Briefs of Interested Persons
Briefs, 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
thefindings 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 agreement and 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 agreement and order, as amended, and as hereby
proposed to be further amended, regulate the handling of pears grown in
the production area in the same manner as, and are applicable only to,
persons in the respective classes of commercial and industrial activity
specified in the marketing agreement and order upon which a hearing has
been held;
(3) The marketing agreement and order, as amended, and as hereby
proposed to be further amended, are limited in their 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 agreement and order, as amended, and as hereby
proposed to be further amended, prescribe, 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 pears grown in the production area; and
(5) All handling of pears grown in the production area as defined
in the marketing agreement and 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. Thirty days is deemed appropriate so that
this rulemaking may be completed prior to the 2005-2006 season. All
written exceptions timely received will be considered and a grower
referendum will be conducted before these proposals are implemented.
List of Subjects in 7 CFR Part 927
Marketing agreements, Winter pears, Reporting and recordkeeping
requirements.
Recommended Further Amendment of the Marketing Agreement and Order
For the reasons set out in the preamble, 7 CFR part 927 is proposed
to be amended as follows:
PART 927--PEARS GROWN IN OREGON AND WASHINGTON
1. The authority citation for 7 CFR part 927 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. Revise the heading of part 927 to read as set forth above.
3. Revise Sec. 927.1 to read as follows:
Sec. 927.1 Secretary.
Secretary means the Secretary of Agriculture of the United States,
or any officer or employee of the Department of Agriculture who has
been delegated, or to whom authority may hereafter be delegated, the
authority to act for the Secretary.
4. Revise Sec. 927.3 to read as follows:
Sec. 927.3 Person.
Person means an individual partnership, corporation, association,
legal representative, or any other business unit.
5. Revise Sec. 927.4 to read as follows:
Sec. 927.4 Pears.
(a) Pears means and includes any and all varieties or subvarieties
of pears with the genus Pyrus that are produced in the production area
and are classified as:
(1) Summer/fall pears including Bartlett and Starkrimson pears;
(2) Winter pears including Beurre D, Anjou, Beurre Bosc, Doyenne du
Comice, Concorde, Forelle, Winter Nelis, Packham, Seckel, and Taylor's
Gold pears; and
(3) Other pears including any or all other varieties or
subvarieties of pears not classified as summer/fall or winter pears.
(b) The Fresh Pear Committee and/or the Processed Pear Committee,
with the approval of the Secretary, may recognize new or delete
obsolete varieties or subvarieties for each category.
6. Revise Sec. 927.5 to read as follows:
Sec. 927.5 Size.
Size means the number of pears which can be packed in a 44-pound
net weight standard box or container equivalent, or as ``size'' means
the greatest transverse diameter of the pear taken at right angles to a
line running from the stem to the blossom end, or such other
specifications more specifically defined in a regulation issued under
this part.
7. Revise Sec. 927.6 to read as follows:
[[Page 2535]]
Sec. 927.6 Grower.
Grower is synonymous with producer and means any person engaged in
the production of pears, either as owner or as tenant.
8. Revise Sec. 927.7 to read as follows:
Sec. 927.7 Handler.
Handler is synonymous with shipper and means any person (except a
common or contract carrier transporting pears owned by another person)
who, as owner, agent, broker, or otherwise, ships or handles pears, or
causes pears to be shipped or handled by rail, truck, boat, or any
other means whatsoever.
9. Revise Sec. 927.8 to read as follows:
Sec. 927.8 Ship or handle.
Ship or handle means to sell, deliver, consign, transport or ship
pears within the production area or between the production area and any
point outside thereof, including receiving pears for processing:
Provided, That the term ``handle'' shall not include the transportation
of pear shipments within the production area from the orchard where
grown to a packing facility located within the production area for
preparation for market or delivery for processing.
10. Revise Sec. 927.9 to read as follows:
Sec. 927.9 Fiscal period.
Fiscal period means the period beginning July 1 of any year and
ending June 30 of the following year or such may be approved by the
Secretary pursuant to a joint recommendation by the Fresh Pear
Committee and the Processed Pear Committee.
11. Revise Sec. 927.11 to read as follows:
Sec. 927.11 District.
District means the applicable one of the following--described
subdivisions of the production area covered by the provisions of this
subpart:
(a) For the purpose of committee representation, administration and
application of provisions of this subpart as applicable to pears for
the fresh market, districts shall be defined as follows:
(1) Medford District shall include all the counties in the State of
Oregon except for Hood River and Wasco counties.
(2) Mid-Columbia District shall include Hood River and Wasco
counties in the State of Oregon, and the counties of Skamania and
Klickitat in the State of Washington.
(3) Wenatchee District shall include the counties of King, Chelan,
Okanogan, Douglas, Grant, Lincoln, and Spokane in the State of
Washington, and all other counties in Washington lying north thereof.
(4) Yakima District shall include all of the State of Washington,
not included in the Wenatchee District or in the Mid-Columbia District.
(b) For the purpose of committee representation, administration and
application of provisions of this subpart as applicable to pears for
processing, districts shall be defined as follows:
(1) The State of Washington.
(2) The State of Oregon.
(c) The Secretary, upon recommendation of the Fresh Pear Committee
or the Processed Pear Committee, may reestablish districts within the
production area.
12. Revise Sec. 927.13 to read as follows:
Sec. 927.13 Subvariety.
Subvariety means and includes any mutation, sport, or other
derivation of any of the varieties covered in Sec. 927.4 which is
recognized by the Fresh Pear Committee or the Processed Pear Committee
and approved by the Secretary. Recognition of a subvariety shall
include classification within a varietal group for the purposes of
votes conducted under Sec. 927.52.
13. Add a new Sec. 927.14 to read as follows:
Sec. 927.14 Processor.
Processor means any person who as owner, agent, broker, or
otherwise, commercially processes pears in the production area.
14. Add a new Sec. 927.15 to read as follows:
Sec. 927.15 Process.
Process means to can, concentrate, freeze, dehydrate, press or
puree pears, or in any other way convert pears commercially into a
processed product.
15. Revise the undesignated center heading preceding Sec. 927.20
to read as follows:
Administrative Bodies
16. Revise Sec. 927.20 to read as follows:
Sec. 927.20 Establishment and membership.
There are hereby established two committees to administer the terms
and provisions of this subpart as specifically provided in Sec. Sec.
927.20 through 927.35:
(a) A Fresh Pear Committee, consisting of 13 individual persons as
its members is established to administer order provisions relating to
the handling of pears for the fresh market. Six members of the Fresh
Pear Committee shall be growers, six members shall be handlers, and one
member shall represent the public. For each member there shall be two
alternates, designated as the ``first alternate'' and the ``second
alternate,'' respectively. Each district shall be represented by one
grower member and one handler member, except that the Mid-Columbia
District and the Wenatchee District shall be represented by two grower
members and two handler members.
(b) A Processed Pear Committee consisting of 10 members is
established to administer order provisions relating to the handling of
pears for processing. Three members of the Processed Pear Committee
shall be growers, three members shall be handlers, three members shall
be processors, and one member shall represent the public. For each
member there shall be two alternates, designated as the ``first
alternate'' and the ``second alternate'', respectively. District 1, the
State of Washington, shall be represented by two grower members, two
handler members and two processor members. District 2, the State of
Oregon, shall be represented by one grower member, one handler member
and one processor member.
(c) The Secretary, upon recommendation of the Fresh Pear Committee
or the Processed Pear Committee may reapportion members among
districts, may change the number of members and alternates, and may
change the composition by changing the ratio of members, including
their alternates. In recommending any such changes, the following shall
be considered:
(1) Shifts in pear acreage within districts and within the
production area during recent years;
(2) The importance of new pear production in its relation to
existing districts;
(3) The equitable relationship between membership and districts;
(4) Economies to result for growers in promoting efficient
administration due to redistricting or reapportionment of members
within districts; and
(5) Other relevant factors.
17. Revise Sec. 927.21 to read as follows:
Sec. 927.21 Nomination and selection of members and their respective
alternates.
Grower members and their respective alternates for each district
shall be selected by the Secretary from nominees elected by the growers
in such district. Handler members and their respective alternates for
each district shall be selected by the Secretary from nominees elected
by the handlers in such district. Processor members and their
respective alternates shall be selected by the Secretary from nominees
elected by the processors. Public members for each committee shall be
nominated by the Fresh Pear Committee and the Processed Pear Committee,
each independently, and selected by the Secretary. The Fresh Pear
Committee and the Processed Pear
[[Page 2536]]
Committee may, each independently, prescribe such additional
qualifications, administrative rules and procedures for selection for
each candidate as it deems necessary and as the Secretary approves.
18. Revise Sec. 927.22 to read as follows:
Sec. 927.22 Meetings for election of nominees.
(a) Nominations for members of the Fresh Pear Committee and their
alternates shall be made at meetings of growers and handlers held in
each of the districts designated in Sec. 927.11 at such times and
places designated by the Fresh Pear Committee.
(b) Nominations for grower and handler members of the Processed
Pear Committee and their alternates shall be made at meetings of
growers and handlers held in each of the districts designated in Sec.
927.11 at such times and places designated by the Processed Pear
Committee. Nominations for processor members of the Processed Pear
Committee and their alternates shall be made at a meeting of processors
at such time and place designated by the Processed Pear Committee.
19. Revise Sec. 927.23 to read as follows:
Sec. 927.23 Voting.
Only growers in attendance at meetings for election of nominees
shall participate in the nomination of grower members and their
alternates, and only handlers in attendance at meetings for election of
nominees shall participate in the nomination of handler members and
their alternates, and only processors in attendance for election of
nominees shall participate in the nomination of processor members and
their alternates. A grower may participate only in the election held in
the district in which he or she produces pears, and a handler may
participate only in the election held in the district in which he or
she handles pears. Each person may vote as a grower, handler or
processor, but not a combination thereof. Each grower, handler and
processor shall be entitled to cast one vote, on behalf of himself, his
agents, partners, affiliates, subsidiaries, and representatives, for
each nominee to be elected.
20. Revise Sec. 927.24 to read as follows:
Sec. 927.24 Eligibility for membership.
Each grower member and each of his or her alternates shall be a
grower, or an officer or employee of a corporate or LLC grower, who
grows pears in the district in which and for which he or she is
nominated and selected. Each handler member and each of his or her
alternates shall be a handler, or an officer or employee of a handler,
handling pears in the district in and for which he or she is nominated
and selected. Each processor member and each of their alternates shall
be a processor, or an officer or employee of a processor, who processes
pears in the production area.
21. Revise Sec. 927.26 to read as follows:
Sec. 927.26 Qualifications.
Any person prior to or within 15 days after selection as a member
or as an alternate for a member of the Fresh Pear Committee or the
Processed Pear Committee shall qualify by filing with the Secretary a
written acceptance of the person's willingness to serve.
22. Revise Sec. 927.27 to read as follows:
Sec. 927.27 Term of office.
The term of office of each member and alternate member of the Fresh
Pear Committee and the Processed Pear Committee shall be for two years
beginning July 1 and ending June 30: Provided, That the terms of office
of one-half the initial members and alternates shall end June 30, 2006;
and that beginning with the 2005-2006 fiscal period, no member shall
serve more than three consecutive two-year terms unless specifically
exempted by the Secretary. Members and alternate members shall serve in
such capacities for the portion of the term of office for which they
are selected and have qualified and until their respective successors
are selected and have qualified. The terms of office of successor
members and alternates shall be so determined that one-half of the
total committee membership ends each June 30.
23. Revise Sec. 927.28 to read as follows:
Sec. 927.28 Alternates for members.
The first alternate for a member shall act in the place and stead
of the member for whom he or she is an alternate during such member's
absence. In the event of the death, removal, resignation, or
disqualification of a member, his or her first alternate shall act as a
member until a successor for the member is selected and has qualified.
The second alternate for a member shall serve in the place and stead of
the member for whom he or she is an alternate whenever both the member
and his or her first alternate are unable to serve. In the event that a
member of the Fresh Pear Committee or the Processed Pear Committee and
both that member's alternates are unable to attend a meeting, the
member may designate any other alternate member from the same group
(handler, processor, or grower) to serve in that member's place and
stead.
24. Revise Sec. 927.29 to read as follows:
Sec. 927.29 Vacancies.
To fill any vacancy occasioned by the failure of any person
selected as a member or as an alternate for a member of the Fresh Pear
Committee or the Processed Pear Committee to qualify, or in the event
of death, removal, resignation, or disqualification of any qualified
member or qualified alternate for a member, a successor for his or her
unexpired term shall be nominated and selected in the manner set forth
in Sec. Sec. 927.20 to 927.35. If nominations to fill any such vacancy
are not made within 20 days after such vacancy occurs, the Secretary
may fill such vacancy without regard to nominations.
25. Revise Sec. 927.30 to read as follows:
Sec. 927.30 Compensation and expenses.
The members and alternates for members shall serve without
compensation, but may be reimbursed for expenses necessarily incurred
by them in the performance of their respective duties.
26. Revise Sec. 927.31 to read as follows:
Sec. 927.31 Powers.
The Fresh Pear Committee and the Processed Pear Committee shall
have the following powers to exercise each independently:
(a) To administer, as specifically provided in Sec. Sec. 927.20 to
927.35, the terms and provisions of this subpart:
(b) To make administrative rules and regulations in accordance
with, and to effectuate, the terms and provisions of this subpart; and
(c) To receive, investigate, and report to the Secretary complaints
of violations of the provisions of this subpart.
27. Revise Sec. 927.32 to read as follows:
Sec. 927.32 Duties.
The duties of the Fresh Pear Committee and the Processed Pear
Committee, each independently, shall be as follows:
(a) To act as intermediary between the Secretary and any grower,
handler or processor;
(b) To keep minutes, books, and records which will reflect clearly
all of the acts and transactions. The minutes, books, and records shall
be subject at any time to examination by the Secretary or by such
person as may be designated by the Secretary;
(c) To investigate, from time to time, and to assemble data on the
growing, harvesting, shipping, and marketing conditions relative to
pears, and to furnish to the Secretary such available information as
may be requested;
(d) To perform such duties as may be assigned to it from time to
time by the Secretary in connection with the
[[Page 2537]]
administration of section 32 of the Act to amend the Agricultural
Adjustment Act, and for other purposes, Public Act No. 320, 74th
Congress, approved August 24, 1935 (49 Stat. 774), as amended;
(e) To cause the books to be audited by one or more competent
accountants at the end of each fiscal year and at such other times as
the Fresh Pear Committee or the Processed Pear Committee may deem
necessary or as the Secretary may request, and to file with the
Secretary copies of any and all audit reports made;
(f) To appoint such employees agents, and representatives as it may
deem necessary, and to determine the compensation and define the duties
of each;
(g) To give the Secretary, or the designated agent of the
Secretary, the same notice of meetings as is given to the members of
the Fresh Pear Committee or the Processed Pear Committee;
(h) To select a chairman of the Fresh Pear Committee or the
Processed Pear Committee and, from time to time, such other officers as
it may deem advisable and to define the duties of each; and
(i) To submit to the Secretary as soon as practicable after the
beginning of each fiscal period, a budget for such fiscal year,
including a report in explanation of the items appearing therein and a
recommendation as to the rate of assessment for such period.
28. Revise Sec. 927.33 to read as follows:
Sec. 927.33 Procedure.
(a) Quorum and voting. A quorum at a meeting of the Fresh Pear
Committee or the Processed Pear Committee shall consist of 75 percent
of the number of committee members, or alternates then serving in the
place of any members, respectively. Except as otherwise provided in
Sec. 927.52, all decisions of the Fresh Pear Committee or the
Processed Pear Committee at any meeting shall require the concurring
vote of at least 75 percent of those members present, including
alternates then serving in the place of any members.
(b) Mail voting. The Fresh Pear Committee or the Processed Pear
Committee may provide for members voting by mail, telecopier or other
electronic means, telephone, or telegraph, upon due notice to all
members. Promptly after voting by telephone or telegraph, each member
thus voting shall confirm in writing, the vote so cast.
29. Revise Sec. 927.34 to read as follows:
Sec. 927.34 Right of the Secretary.
The members and alternates for members and any agent or employee
appointed or employed by the Fresh Pear Committee or the Processed Pear
Committee shall be subject to removal or suspension by the Secretary at
any time. Each and every regulation, decision, determination, or other
act shall be subject to the continuing right of the Secretary to
disapprove of the same at any time, and, upon such disapproval, shall
be deemed null and void, except as to acts done in reliance thereon or
in compliance therewith prior to such disapproval by the Secretary.
30. Revise Sec. 927.35 to read as follows:
Sec. 927.35 Funds and other property.
(a) All funds received pursuant to any of the provisions of this
subpart shall be used solely for the purposes specified in this
subpart, and the Secretary may require the Fresh Pear Committee or the
Processed Pear Committee and its members to account for all receipts
and disbursements.
(b) Upon the death, resignation, removal, disqualification, or
expiration of the term of office of any member or employee, all books,
records, funds, and other property in his or her possession belonging
to the Fresh Pear Committee or the Processed Pear Committee shall be
delivered to his or her successor in office or to the Fresh Pear
Committee or Processed Pear Committee, and such assignments and other
instruments shall be executed as may be necessary to vest in such
successor or in the Fresh Pear Committee or Processed Pear Committee
full title to all the books, records, funds, and other property in the
possession or under the control of such member or employee pursuant to
this subpart.
Sec. 927.36 [Removed]
31. Remove Sec. 927.36, Public advisors.
32. Revise Sec. 927.40 to read as follows:
Sec. 927.40 Expenses.
The Fresh Pear Committee and the Processed Pear Committee are
authorized, each independently, to incur such expenses as the Secretary
finds may be necessary to carry out their functions under this subpart.
The funds to cover such expenses shall be acquired by the levying of
assessments as provided in Sec. 927.41.
33. Revise Sec. 927.41 to read as follows:
Sec. 927.41 Assessments.
(a) Assessments will be levied only upon handlers who first handle
pears. Each handler shall pay assessments on all pears handled by such
handler as the pro rata share of the expenses which the Secretary finds
are reasonable and likely to be incurred by the Fresh Pear Committee or
the Processed Pear Committee during a fiscal period. The payment of
assessments for the maintenance and functioning of the Fresh Pear
Committee or the Processed Pear Committee may be required under this
part throughout the period such assessments are payable irrespective of
whether particular provisions thereof are suspended or become
inoperative.
(b)(1) Based upon a recommendation of the Fresh Pear Committee or
other available data, the Secretary shall fix three base rates of
assessment for pears that handlers shall pay on pears handled for the
fresh market during each fiscal period. Such base rates shall include
one rate of assessment for any or all varieties or subvarieties of
pears classified as summer/fall; one rate of assessment for any or all
varieties or subvarieties of pears, classified as winter; and one rate
of assessment for any or all varieties or subvarieties of pears
classified as other. Upon recommendation of the Fresh Pear Committee or
other available data, the Secretary may also fix supplemental rates of
assessment on individual varieties or subvarieties categorized within
the above-defined assessment classifications to secure sufficient funds
to provide for projects authorized under Sec. 927.47. At any time
during the fiscal period when it is determined on the basis of a Fresh
Pear Committee recommendation or other information that different rates
are necessary for fresh pears or for any varieties or subvarieties, the
Secretary may modify those rates of assessment and such new rate shall
apply to any or all varieties or subvarieties that are shipped during
the fiscal period for fresh market.
(2) Based upon a recommendation of the Processed Pear Committee or
other available data, the Secretary shall fix three base rates of
assessment for pears that handlers shall pay on pears handled for
processing during each fiscal period. Such base rates shall include one
rate of assessment for any or all varieties or subvarieties of pears
classified as summer/fall; one rate of assessment for any or all
varieties or subvarieties of pears, classified as winter; and one rate
of assessment for any or all varieties or subvarieties of pears
classified as other. Upon recommendation of the Processed Pear
Committee or other available data, the Secretary may also fix
supplemental rates of assessment on individual varieties or
subvarieties categorized within the above-defined assessment
classifications to secure sufficient funds to provide for projects
authorized under
[[Page 2538]]
Sec. 927.47. At any time during the fiscal period when it is
determined on the basis of a Processed Pear Committee recommendation or
other information that different rates are necessary for pears for
processing or for any varieties or subvarieties, the Secretary may
modify those rates of assessment and such new rate shall apply to any
or all varieties or subvarieties of pears that are shipped during the
fiscal period for processing.
(c) Based on the recommendation of the Fresh Pear Committee, the
Processed Pear Committee or other available data, the Secretary may
establish additional base rates of assessments, or change or modify the
base rate classifications defined in paragraphs (a) and (b) of this
section.
(d) The Fresh Pear Committee or the Processed Pear Committee may
impose a late payment charge on any handler who fails to pay any
assessment within the time prescribed. In the event the handler
thereafter fails to pay the amount outstanding, including the late
payment charge, within the prescribed time, the Fresh Pear Committee or
the Processed Pear Committee may impose an additional charge in the
form of interest on such outstanding amount. The Fresh Pear Committee
or the Processed Pear Committee, with the approval of the Secretary,
shall prescribe the amount of such late payment charge and rate of
interest.
(e) In order to provide funds to carry out the functions of the
Fresh Pear Committee or the Processed Pear Committee prior to
commencement of shipments in any season, handlers may make advance
payments of assessments, which advance payments shall be credited to
such handlers and the assessments of such handlers shall be adjusted so
that such assessments are based upon the quantity of each variety or
subvariety of pears handled by such handlers during such season.
Further, payment discounts may be authorized by the Fresh Pear
Committee or the Processed Pear Committee upon the approval of the
Secretary to handlers making such advance assessment payments.
34. Revise Sec. 927.42 to read as follows:
Sec. 927.42 Accounting.
(a) If, at the end of a fiscal period, the assessments collected
are in excess of expenses incurred, the Fresh Pear Committee or the
Processed Pear Committee may carryover such excess into subsequent
fiscal periods as a reserve: Provided, That funds already in the
reserve do not exceed approximately one fiscal period's expenses. Such
reserve may be used to cover any expense authorized under this part and
to cover necessary expenses of liquidation in the event of termination
of this part. Any such excess not retained in a reserve or applied to
any outstanding obligation of the person from whom it was collected
shall be refunded proportionately to the persons from whom it was
collected. Upon termination of this part, any funds not required to
defray the necessary expenses of liquidation shall be disposed of in
such manner as the Secretary may determine to be appropriate: Provided,
That to the extent practical, such funds shall be returned pro rata to
the persons from whom such funds were collected.
(b) All funds received pursuant to the provisions of this part
shall be used solely for the purpose specified in this part and shall
be accounted for in the manner provided in this part. The Secretary may
at any time require the Fresh Pear Committee or the Processed Pear
Committee and its members to account for all receipts and
disbursements.
35. Revise Sec. 927.43 to read as follows:
Sec. 927.43 Use of funds.
From the funds acquired pursuant to Sec. 927.41 the Fresh Pear
Committee and the Processed Pear Committee, each independently, shall
pay the salaries of its employees, if any, and pay the expenses
necessarily incurred in the performance of the duties of the Fresh Pear
Committee or the Processed Pear Committee.
Sec. 927.44 [Removed]
36. Remove Sec. 927.44, Collection of unpaid assessments.
37. Revise Sec. 927.45 to read as follows:
Sec. 927.45 Contributions.
The Fresh Pear Committee or the Processed Pear Committee may accept
voluntary contributions but these shall only be used to pay expenses
incurred pursuant to Sec. 927.47. Furthermore, such contributions
shall be free from any encumbrances by the donor and the Fresh Pear
Committee or the Processed Pear Committee shall retain complete control
of their use.
38. Revise Sec. 927.47 to read as follows:
Sec. 927.47 Research and development.
The Fresh Pear Committee or the Processed Pear Committee, with the
approval of the Secretary, may establish or provide for the
establishment of production and post-harvest research, or marketing
research and development projects designed to assist, improve, or
promote the marketing, distribution, and consumption of pears. Such
projects may provide for any form of marketing promotion, including
paid advertising. The expense of such projects shall be paid from funds
collected pursuant to Sec. Sec. 927.41 and 927.45. Expenditures for a
particular variety or subvariety of pears shall approximate the amount
of assessments and voluntary contributions collected for that variety
or subvariety of pears.
39. Revise Sec. 927.50 to read as follows:
Sec. 927.50 Marketing policy.
(a) It shall be the duty of the Fresh Pear Committee to
investigate, from time to time, supply and demand conditions relative
to pears and each grade, size, and quality of each variety or
subvariety thereof. Such investigations shall be with respect to the
following:
(1) Estimated production of each variety or subvariety of pears and
of each grade, size, and quality thereof;
(2) Prospective supplies and prices of pears and other fruits, both
in fresh and processed form, which are competitive to the marketing of
pears;
(3) Prospective exports of pears and imports of pears from other
producing areas;
(4) Probable harvesting period for each variety or subvariety of
pears;
(5) The trend and level of consumer income;
(6) General economic conditions; and
(7) Other relevant factors.
(b) On or before August 1 of each year, the Fresh Pear Committee
shall recommend regulations to the Secretary if it finds, on the basis
of the foregoing investigations, that such regulation as is provided in
Sec. 927.51 will tend to effectuate the declared policy of the act.
(c) In the event the Fresh Pear Committee at any time finds that by
reason of changed conditions, any regulation issued pursuant to Sec.
927.51 should be modified, suspended, or terminated, it shall so
recommend to the Secretary.
40. Revise Sec. 927.51 to read as follows:
Sec. 927.51 Issuance of regulations; and modification, suspension, or
termination thereof.
(a) Whenever the Secretary finds, from the recommendations and
information submitted by the Fresh Pear Committee, or from other
available information, that regulation, in the manner specified in this
section, of the shipment of fresh pears would tend to effectuate the
declared policy of the act, he or she shall so limit the shipment of
such pears during a specified period or periods. Such regulation may:
(1) Limit the total quantity of any grade, size, quality, or
combinations
[[Page 2539]]
thereof, of any variety or subvariety of pears grown in any district
and may prescribe different requirements applicable to shipments to
different export markets;
(2) Limit, during any period or periods, the shipment of any
particular grade, size, quality, or any combination thereof, of any
variety or subvariety, of pears grown in any district or districts of
the production area; and
(3) Provide a method, through rules and regulation issued pursuant
to this part, for fixing markings on the container or containers, which
may be used in the packaging or handling of pears, including
appropriate logo or other container markings to identify the contents
thereof.
(b) Whenever the Secretary finds, from the recommendations and
information submitted by the Fresh Pear Committee, or from other
available information, that a regulation should be modified, suspended,
or terminated with respect to any or all shipments of fresh pears grown
in any district in order to effectuate the declared policy of the act,
he or she shall so modify, suspend, or terminate such regulation. If
the Secretary finds, from the recommendations and information submitted
by the Fresh Pear Committee, or from other available information, that
a regulation obstructs or does not tend to effectuate the declared
policy of the act, he or she shall suspend or terminate such
regulation. On the same basis and in like manner, the Secretary may
terminate any such modification or suspension.
41. Revise Sec. 927.52 to read as follows:
Sec. 927.52 Prerequisites to recommendations.
(a) Decisions of the Fresh Pear Committee or the Processed Pear
Committee with respect to any recommendations to the Secretary pursuant
to the establishment or modification of a supplemental rate of
assessment for an individual variety or subvariety of pears shall be
made by affirmative vote of not less than 75 percent of the applicable
total number of votes, computed in the manner hereinafter described in
this section, of all members. Decisions of the Fresh Pear Committee
pursuant to the provisions of Sec. 927.50 shall be made by an
affirmative vote of not less than 80 percent of the applicable total
number of votes, computed in the manner hereinafter prescribed in this
section, of all members.
(b) With respect to a particular variety or subvariety of pears,
the applicable total number of votes shall be the aggregate of the
votes allotted to the members in accordance with the following: Each
member shall have one vote as an individual and, in addition, shall
have a vote equal to the percentage of the vote of the district
represented by such member; and such district vote shall be computed as
soon as practical after the beginning of each fiscal period on either:
(1) The basis of one vote for each 25,000 boxes (except 2,500 boxes
for varieties or subvarieties with less than 200,000 standard boxes or
container equivalents) of the average quantity of such variety or
subvariety produced in the particular district and shipped therefrom
during the immediately preceding three fiscal periods; or
(2) Such other basis as the Fresh Pear Committee or the Processed
Pear Committee may recommend and the Secretary may approve. The votes
so allotted to a member may be cast by such member on each
recommendation relative to the variety or subvariety of pears on which
such votes were computed.
42. Revise Sec. 927.53 to read as follows:
Sec. 927.53 Notification.
(a) The Fresh Pear Committee shall give prompt notice to growers
and handlers of each recommendation to the Secretary pursuant to the
provisions of Sec. 927.50.
(b) The Secretary shall immediately notify the Fresh Pear Committee
of the issuance of each regulation and of each modification,
suspension, or termination of a regulation and the Fresh Pear Committee
shall give prompt notice thereof to growers and handlers.
Sec. 927.54 [Removed]
42-a. Remove Sec. 927.54, Exemption Certificate.
43. Amend Sec. 927.60 by revising paragraph (a) and adding a new
paragraph (c) to read as follows:
Sec. 927.60 Inspection and certification.
(a) Handlers shall ship only fresh pears inspected by the Federal-
State Inspection Service or under a program developed by the Federal-
State Inspection Service: except, that such inspection and
certification of shipments of pears may be performed by such other
inspection service as the Fresh Pear Committee, with the approval of
the Secretary, may designate. Promptly after shipment of any pears, the
handler shall submit, or cause to be submitted, to the Fresh Pear
Committee a copy of the inspection certificate issued on such shipment.
* * * * *
(c) The Fresh Pear Committee may, with the approval of the
Secretary, prescribe rules and regulations modifying or eliminating the
requirement for mandatory inspection and certification of shipments:
Provided, That an adequate method of ensuring compliance with quality
and size requirements is developed.
44. Revise Sec. 927.65 to read as follows:
Sec. 927.65 Exemption from regulation.
(a) Nothing contained in this subpart shall limit or authorize the
limitation of shipment of pears for consumption by charitable
institutions or distribution by relief agencies, nor shall any
assessment be computed on pears so shipped. The Fresh Pear Committee or
the Processed Pear Committee may prescribe regulations to prevent pears
shipped for either of such purposes from entering commercial channels
of trade contrary to the provisions of this subpart.
(b) The Fresh Pear Committee or the Processed Pear Committee may
prescribe rules and regulations, to become effective upon the approval
of the Secretary, whereby quantities of pears or types of pear
shipments may be exempted from any or all provisions of this subpart.
45. Revise Sec. 927.70 to read as follows:
Sec. 927.70 Reports.
(a) Upon the request of the Fresh Pear Committee or the Processed
Pear Committee, and subject to the approval of the Secretary, each
handler shall furnish to the aforesaid committee, respectively, in such
manner and at such times as it prescribes, such information as will
enable it to perform its duties under this subpart.
(b) All such reports shall be held under appropriate protective
classification and custody by the Fresh Pear Committee or the Processed
Pear Committee, or duly appointed employees thereof, so that the
information contained therein which may adversely affect the
competitive position of any handler in relation to other handlers will
not be disclosed. Compilations of general reports from data submitted
by handlers are authorized subject to the prohibition of disclosure of
individual handlers identities or operations.
(c) Each handler shall maintain for at least two succeeding years
such records of the pears received and of pears disposed of, by such
handler as may be necessary to verify reports pursuant to this section.
46. Revise Sec. 927.75 to read as follows:
Sec. 927.75 Liability.
No member or alternate for a member of the Fresh Pear Committee or
the Processed Pear Committee, nor any
[[Page 2540]]
employee or agent thereof, shall be held personally responsible, either
individually or jointly with others, in any way whatsoever, to any
party under this subpart or to any other person for errors in judgment,
mistakes, or other acts, either of commission or omission, as such
member, alternate for a member, agent or employee, except for acts of
dishonesty, willful misconduct, or gross negligence.
47. Revise Sec. 927.76 to read as follows:
Sec. 927.76 Agents.
The Secretary may name, by designation in writing, any person,
including any officer or employee of the Government or any bureau or
division in the Department of Agriculture to act as his or her agent or
representative in connection with any of the provisions of this
subpart.
48. Revise Sec. 927.77 to read as follows:
Sec. 927.77 Effective time.
The provisions of this subpart and of any amendment thereto shall
become effective at such time as the Secretary may declare, and shall
continue in force until terminated in one of the ways specified in
Sec. 927.78.
49. Amend Sec. 927.78 by revising paragraphs (b), (c), and (d) to
read as follows:
Sec. 927.78 Termination.
* * * * *
(b) The Secretary shall terminate or suspend the operation of any
or all of the provisions of this subpart whenever he or she finds that
such operation obstructs or does not tend to effectuate the declared
policy of the act.
(c) The Secretary shall terminate the provisions of this subpart
applicable to fresh pears for market or pears for processing at the end
of any fiscal period whenever the Secretary finds, by referendum or
otherwise, that such termination is favored by a majority of growers of
fresh pears for market or pears for processing, respectively: Provided,
That such majority has during such period produced more than 50 percent
of the volume of fresh pears for market or pears for processing,
respectively, in the production area. Such termination shall be
effective only if announced on or before the last day of the then
current fiscal period.
(d) The Secretary shall conduct a referendum within every six-year
period beginning on the date this section becomes effective, to
ascertain whether continuance of the provisions of this subpart
applicable to fresh pears for market or pears for processing are
favored by producers of pears for the fresh market and pears for
processing, respectively. The Secretary may terminate the provisions of
this subpart at the end of any fiscal period in which the Secretary has
found that continuance of this subpart is not favored by producers who,
during a representative period determined by the Secretary, have been
engaged in the production of fresh pears for market or pears for
processing in the production area: Provided, That termination of the
order shall be effective only if announced on or before the last day of
the then current fiscal period.
* * * * *
50. Revise Sec. 927.79 to read as follows:
Sec. 927.79 Proceedings after termination.
(a) Upon the termination of this subpart, the members of the Fresh
Pear Committee or the Processed Pear Committee then functioning shall
continue as joint trustees for the purpose of liquidating all funds and
property then in the possession or under the control of the Fresh Pear
Committee or the Processed Pear Committee, including claims for any
funds unpaid or property not delivered at the time of such termination.
(b) The joint trustees shall continue in such capacity until
discharged by the Secretary; from time to time account for all receipts
and disbursements; deliver all funds and property on hand, together
with all books and records of the Fresh Pear Committee or the Processed
Pear Committee and of the joint trustees, to such person as the
Secretary shall direct; and, upon the request of the Secretary, execute
such assignments or other instruments necessary and appropriate to vest
in such person full title and right to all of the funds, property, or
claims vested in the Fresh Pear Committee or the Processed Pear
Committee or in said joint trustees.
(c) Any funds collected pursuant to this subpart and held by such
joint trustees or such person over and above the amounts necessary to
meet outstanding obligations and the expenses necessarily incurred by
the joint trustees or such other person in the performance of their
duties under this subpart, as soon as practicable after the termination
hereof, shall be returned to the handlers pro rata in proportion to
their contributions thereto.
(d) Any person to whom funds, property, or claims have been
transferred or delivered by the Fresh Pear Committee or the Processed
Pear Committee or its members, upon direction of the Secretary, as
provided in this section, shall be subject to the same obligations and
duties with respect to said funds, property, or claims as are imposed
upon the members or upon said joint trustees.
51. Revise Sec. 927.80 to read as follows:
Sec. 927.80 Amendments.
Amendments to this subpart may be proposed from time to time by the
Fresh Pear Committee or the Processed Pear Committee or by the
Secretary.
Dated: January 5, 2005.
Kenneth C. Clayton,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 05-579 Filed 1-12-05; 8:45 am]
BILLING CODE 3410-02-P