[Federal Register Volume 72, Number 60 (Thursday, March 29, 2007)]
[Rules and Regulations]
[Pages 14651-14654]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-5791]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 929
[Docket No. AMS-FV-06-0174; FV06-929-1 FR]
Cranberries Grown in the States of Massachusetts, et al.;
Increased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: This rule increases the assessment rate established for the
Cranberry Marketing Committee (Committee) for the 2006-2007 fiscal year
and subsequent fiscal years from $0.18 to $0.28 per barrel.
Authorization to assess cranberry handlers enables the Committee to
incur expenses that are reasonable and necessary to administer the
program. The Committee locally administers the marketing order which
regulates the handling of cranberries grown in the States of
Massachusetts, Rhode Island, Connecticut, New Jersey, Wisconsin,
Michigan, Minnesota, Oregon, Washington, and Long Island in the State
of New York. The fiscal year began September 1, 2006, and ends August
31, 2007. The assessment rate will remain in effect indefinitely unless
modified, suspended, or terminated.
DATES: Effective Date: This rule becomes effective March 30, 2007.
FOR FURTHER INFORMATION CONTACT: Patricia A. Petrella or Kenneth G.
Johnson, DC Marketing Field Office, Fruit and Vegetable Programs, AMS,
USDA, Unit 155, 4700 River Road, Riverdale, Maryland 20737; telephone:
(301) 734-5243, Fax: (301) 734-5275, or E-mail at
[email protected] or [email protected].
Small businesses may request information on complying with this
regulation by contacting Jay Guerber, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence
Avenue, SW, STOP 0237, Washington, DC 20250-0237; telephone: (202) 720-
[[Page 14652]]
2491, Fax: (202) 720-8938, or e-mail: [email protected].
SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing
Agreement and Order No. 929, as amended (7 CFR part 929), regulating
the handling of cranberries produced in the States of Massachusetts,
Rhode Island, Connecticut, New Jersey, Wisconsin, Michigan, Minnesota,
Oregon, Washington, and Long Island in the State of New York,
hereinafter referred to as the ``order.'' The order is effective under
the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C.
601-674), hereinafter referred to as the ``Act.''
The Department of Agriculture (USDA) is issuing this rule in
conformance with Executive Order 12866.
This final rule has been reviewed under Executive Order 12988,
Civil Justice Reform. Under the marketing order now in effect,
cranberries are subject to assessments. Funds to administer the order
are derived from such assessments. It is intended that the assessment
rate as issued herein will be applicable to all assessable cranberries
beginning September 1, 2006, and continue until amended, suspended, or
terminated. This rule will not preempt any State or local laws,
regulations, or policies, unless they present an irreconcilable
conflict with this rule.
The Act provides that administrative proceedings must be exhausted
before parties may file suit in court. Under section 608c(15)(A) of the
Act, any handler subject to an order may file with the USDA a petition
stating that the order, any provision of the order, or any obligation
imposed in connection with the order is not in accordance with law and
request a modification of the order or to be exempted therefrom. Such
handler is afforded the opportunity for a hearing on the petition.
After the hearing the 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 the USDA's ruling on the petition,
provided an action is filed not later than 20 days after the date of
the entry of the ruling.
This final rule increases the assessment rate established for the
2006-2007 and subsequent fiscal years from $0.18 to $0.28 per barrel of
cranberries.
The proposed rule inadvertently referred to the proposed increase
as a ``per pound'' increase rather than a ``per barrel'' increase two
times in the SUPPLEMENTARY INFORMATION section. The proposed regulatory
text was correct in the proposed rule. The inadvertent errors are
corrected in this document.
The cranberry marketing order provides authority for the Committee,
with approval of USDA, to formulate an annual budget of expenses and
collect assessments from handlers to administer the program. The
members of the Committee are producers and handlers of cranberries.
They are familiar with the Committee's needs and with the costs for
goods and services in their local area and are thus in a position to
formulate an appropriate budget and assessment rate. The assessment
rate is formulated and discussed in a public meeting. Thus, all
directly affected persons have an opportunity to participate and
provide input.
Authority to fix the rate of assessment to be paid by each handler
and to collect such assessment appears in Sec. 929.41 of the order. In
addition, Sec. 929.45 of the order provides that the Committee, with
the approval of the USDA, may establish or provide for the
establishment of production research, marketing research, and market
development projects designed to assist, improve, or promote the
marketing, distribution, consumption, or efficient production of
cranberries. The expense of such projects is paid from funds collected
pursuant to Sec. 929.41 (Assessments), or from such other funds as
approved by the USDA.
For the 2001-2002 fiscal year, the Committee recommended, and USDA
approved, an assessment rate of $0.18 per barrel of cranberries handled
that would continue in effect from fiscal period to fiscal period
unless modified, suspended, or terminated by USDA upon recommendation
and information submitted by the Committee or other information
available to USDA.
The Committee met on August 28, 2006, and recommended 2006-2007
expenditures of $3,522,062 and an assessment rate of $0.28 per barrel
of cranberries. The Committee passed the assessment rate increase by a
vote of 12 to 2. Those not supporting the recommendation wanted a
lesser increase. In comparison, last year's budgeted expenses were
$2,612,265. The assessment rate of $0.28 is $0.10 higher than the rate
currently in effect.
The Committee recommended the $0.10 per barrel increase to cover
increased costs. The Committee has expanded its contributions to the
export market development program from $50,000 in 1999 to $480,000 in
2006. The Committee has increased funding of the export market
development program as target markets have expanded from two in 1999
(Japan and Germany), to five in 2006 (Japan, Germany, Mexico, France
and Australia) with contingency plans to expand activities regionally
within Europe and in South Korea. According to the Committee,
cranberries and cranberry products going into export markets have
steadily increased from 10 percent of the annual cranberry production
during the 1999-2000 fiscal period to approximately 24 percent of the
annual production in the 2005-2006 fiscal period.
In order to expand and maintain activities within the target
markets, the Committee has used funds from its reserve account to meet
the costs of educating consumers and the trade industry.
Since the last increase published in the Federal Register on
February 14, 2002, at 67 FR 6843, the assessment rate has not been
increased to compensate for increases in the costs of goods and
services, costs contributable to increasing the Committee membership
and to pay back funds taken from the reserve for the expanding export
market development program. As a result, the reserve has continued to
decrease until it is at a point where the Committee is unable to meet
the order's reserve funding requirements or balance its budget without
an increase in assessments and/or cutback in program activities. The
Committee recommended the assessment rate increase to continue to
expand the generic export market development program and have
sufficient funding to meet its operational expenses. Without this
increase, the Committee would have to curtail expansion of the export
market development and promotion program.
All cranberry handlers regulated under the marketing order will pay
the proposed assessment rate. However, certain organic handlers may be
exempt from paying assessments for market promotion activities pursuant
to 7 CFR 900.700.
The major expenditures recommended by the Committee for the 2006-
2007 fiscal year include $500,000 for domestic promotion, $480,000 for
export promotion, $154,116 for personnel, $103,500 for meetings, and
$107,527 for administrative expenses. Budgeted expenses for major items
in 2005-2006 were $488,225 for domestic promotion, $147,420 for
personnel, $105,500 for meetings, and $116,542 for administrative
expenses. The Committee recommended an increased assessment rate to
generate larger revenue to meet its operational and export promotion
expenses and keep its reserves at an acceptable level.
[[Page 14653]]
In deriving the recommended assessment rate, the Committee
determined assessable cranberry production for the upcoming fiscal
period at 6,506,000 barrels. Therefore, total assessment income for the
2006-2007 fiscal year is estimated at $1,821,680 (6,506,000 barrels x
$0.28). This amount plus $1,767,600 from USDA's Foreign Agricultural
Service's Market Access Program (MAP) and adequate funds in the reserve
and interest income will be adequate to cover budgeted expenses. Funds
in the reserve (approximately $541,122) will be kept within the
approximately one fiscal period's expenses as recommended by the
Committee consistent with Sec. 929.42(a) of the order.
The assessment rate established in this rule will continue in
effect indefinitely unless modified, suspended, or terminated by USDA
upon recommendation and other information submitted by the Committee or
other available information.
Although the assessment rate will be effective for an indefinite
period, the Committee will continue to meet prior to or during each
fiscal period to recommend a budget of expenses and consider
recommendations for modification of the assessment rate. The dates and
times of Committee meetings are available from the Committee or the
USDA. Committee meetings are open to the public and interested persons
may express their views at these meetings. USDA will evaluate Committee
recommendations and other available information to determine whether
modification of the assessment rate is needed. Further rulemaking will
be undertaken as necessary. The Committee's 2006-2007 budget and those
for subsequent fiscal periods will be reviewed and, as appropriate,
approved by the USDA.
Final Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), the Agricultural Marketing Service (AMS) has considered the
economic impact of this action on small entities. Accordingly, AMS has
prepared this final regulatory flexibility analysis.
The purpose of the RFA is to fit regulatory actions to the scale of
business subject to such actions in order that small businesses will
not be unduly or disproportionately burdened. Marketing orders issued
pursuant to the Act, and rules thereunder, are unique in that they are
brought about through group action of essentially small entities acting
on their own behalf. Thus, both statutes have small entity orientation
and compatibility.
There are approximately 50 handlers of cranberries who are subject
to regulation under the cranberry marketing order and approximately
1250 producers of cranberries in the regulated area. Small agricultural
service firms, which includes handlers, are defined by the Small
Business Administration (13 CFR 121.201) as those having annual
receipts of less than $6,500,000, and small agricultural producers are
defined as those having annual receipts of less than $750,000. The
majority of producers and handlers of cranberries under the order are
considered small entities under SBA's standards.
The principal demand for cranberries is in the form of processed
products. Cranberries are dried, frozen, canned, and juiced. During the
2001-2002 fiscal year through the 2005-2006 fiscal year, approximately
91 percent of the U.S. cranberry crop, or 5.4 million barrels, was
processed annually.
Based on National Agricultural Statistics Service data, acreage in
the United States devoted to cranberry production has leveled off over
the last several crop years. Bearing acres have declined slightly from
a high of 39,600 acres in the 2003-2004 fiscal year to 39,100 in the
2005-2006 fiscal year. Wisconsin and Massachusetts lead the nation in
cranberry acreage, with approximately 81 percent of the total, and
production also at approximately 81 percent of the total U.S. cranberry
crop each year.
This rule increases the assessment rate established for the
Committee and collected from handlers for the 2006-2007 fiscal period
and subsequent periods from $0.18 to $0.28 per barrel of cranberries.
The Committee discussed continuing the existing assessment rate,
but concluded that it needed the additional funds to devote to its
export market development and promotion program and replenish its
financial reserve which would be funded through assessments.
This action increases the assessment obligation imposed on
handlers. While assessments impose some additional costs on handlers,
the costs are uniform on all handlers. Some of the additional costs may
be passed on to producers. However, these costs will be offset by the
benefits derived by the operation of the marketing order. In addition,
the Committee's meeting was widely publicized throughout the cranberry
industry and all interested persons were invited to attend the meeting
and participate in Committee deliberations on all issues. Like all
Committee meetings, all entities, both large and small, were able to
express views on this issue. Finally, interested persons are invited to
submit information on the regulatory and informational impacts of this
action on small businesses.
This rule will impose no additional reporting or recordkeeping
requirements on either small or large cranberry handlers. As with all
Federal marketing order programs, reports and forms are periodically
reviewed to reduce information requirements and duplication by industry
and public sector agencies.
The AMS is committed to complying with the E-Government Act, to
promote the use of the Internet and other information technologies to
provide increased opportunities for citizen access to Government
information and services, and for other purposes.
USDA has not identified any relevant Federal rules that duplicate,
overlap, or conflict with this rule.
As mentioned previously, a proposed rule was published in the
Federal Register on January 16, 2007 (72 FR 1678). Copies of the
proposed rule were mailed or sent via facsimile to all Committee
members and handlers. Finally, the proposed rule was made available
through the Internet, USDA and the Office of the Federal Register. A
30-day comment period ending February 15, 2007, was provided to allow
interested persons to respond to the proposal. Four comments were
received. One supported and three opposed the proposal.
The commenter in support for the assessment rate increase stated
that the increase is needed to help fund the Committee's operations and
to help increase consumer awareness of cranberries.
Three comments were received (two from growers and one from a
grower-handler) in opposition to the proposed assessment rate increase.
One of the commenters opposed the proposal because he did not believe a
$.10 per barrel increase in the assessment rate will have a meaningful
increase on the demand for cranberries. The commenter also stated that
it is inequitable to force U.S. growers to spend another $.10 per
barrel while growers in Canada and Chile pay nothing. Finally, this
commenter stated that it is impossible to justify an increase in the
assessment rate for advertising when cranberry supply and demand are
projected to be in balance. Another commenter opposed the proposal
based on his contention that he already spends a sum of money on
branded advertising with a major cranberry cooperative. The last
[[Page 14654]]
commenter felt that the assessment rate increase was an excessive and
unjustified expense.
In response to these comments, the $.10 per barrel increase is not
specifically for export promotional activities but to provide the
Committee with funds for its operational expenses. As previously
stated, the assessment rate has not been increased since 2002. Since
that time, there have been increases in the costs of goods and
services, costs contributable to increasing Committee membership and to
pay back funds taken from the reserve for the export market development
program. The increase in the assessment rate is needed to generate
larger revenue for the Committee to meet its expenses and keep its
reserves at an acceptable level. Without the increase, the Committee
will have to curtail its operational expenses including the export
market development and promotion program that has[K1] been
funded by assessments and MAP funds for the past several years.
With regard to the equitability of some handlers paying the
increased assessment rate while others pay no assessments, all
cranberry handlers regulated under the marketing order will have to pay
the increased assessment rate. Certain organic handlers are exempt from
paying assessments on market promotion activities. However, handlers
not regulated under the marketing order (such as those handlers in
Canada or Chile) are not subject to its provisions and thus, do not
have to pay assessments.
Lastly, in regards to the commenter who already pays for branded
advertising, we note that those advertisements promote a specific brand
of cranberries and cranberry products. The Committee's domestic and
export promotion programs are generic and were developed to promote the
qualities of cranberries and cranberry products for the entire
cranberry industry. Both the generic and branded promotion of
cranberries and cranberry products reach new markets/customers and
increase demand for cranberries. Under the marketing order, the
assessment obligation is imposed on handlers. While assessments impose
some additional costs on handlers, the costs are uniform on all
handlers. Some of the additional costs may be passed on to producers.
However, we believe that these costs are offset by the benefits derived
by the operation of the marketing order.
Accordingly, no changes will be made to this rule based on the
comments received.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at the
following Web site: http://www.ams.usda.gov/fv/moab.html. Any questions
about the compliance guide should be sent to Jay Guerber at the
previously mentioned address in the FOR FURTHER INFORMATION CONTACT
section.
After consideration of all relevant material presented, including
the information and recommendation submitted by the Committee and other
available information, it is hereby found that this rule, as
hereinafter set forth, will tend to effectuate the declared policy of
the Act.
Pursuant to 5 U.S.C. 553, it is also found and determined that good
cause exists for not postponing the effective date of this rule until
30 days after publication in the Federal Register because the 2006-2007
fiscal period began September 1, 2006, and the marketing order requires
that the rate of assessment for each fiscal period apply to all
assessable cranberries handled during such fiscal period. Further,
handlers are aware of this action which was recommended by the
Committee at a public meeting. Also, a 30-day comment period was
provided for in the proposed rule.
List of Subjects in 7 CFR Part 929
Cranberries, Marketing agreements, Reporting and recordkeeping
requirements.
0
For the reasons set forth in the preamble, 7 CFR part 929 is amended as
follows:
PART 929--CRANBERRIES GROWN IN THE STATES OF MASSACHUSETTS, RHODE
ISLAND, CONNECTICUT, NEW JERSEY, WISCONSIN, MICHIGAN, MINNESOTA,
OREGON, WASHINGTON, AND LONG ISLAND IN THE STATE OF NEW YORK
0
1. The authority citation for 7 CFR part 929 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
0
2. Section 929.236 is revised to read as follows:
Sec. 929.236 Assessment rate.
On and after September 1, 2006, an assessment rate of $.28 per
barrel is established for cranberries.
Dated: March 23, 2007.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E7-5791 Filed 3-28-07; 8:45 am]
BILLING CODE 3410-02-P