[Federal Register: December 4, 2008 (Volume 73, Number 234)]
[Rules and Regulations]
[Page 73761-73764]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04de08-1]
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Rules and Regulations
Federal Register
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[[Page 73761]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 984
[Docket No. AMS-FV-08-0093; FV09-984-2 IFR]
Walnuts Grown in California; Decreased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim final rule with request for comments.
-----------------------------------------------------------------------
SUMMARY: This rule decreases the assessment rate established for the
California Walnut Board (Board) for the 2008-09 and subsequent
marketing years from $0.0158 to $0.0131 per kernelweight pound of
assessable walnuts. The Board locally administers the marketing order
which regulates the handling of walnuts grown in California.
Assessments upon walnut handlers are used by the Board to fund
reasonable and necessary expenses of the program. The marketing year
begins September 1 and ends August 31. The assessment rate will remain
in effect indefinitely unless modified, suspended, or terminated.
DATES: Effective December 5, 2008. Comments received by February 2,
2009, will be considered prior to issuance of a final rule.
ADDRESSES: Interested persons are invited to submit written comments
concerning this rule. Comments must be sent to the Docket Clerk,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC
20250-0237; Fax: (202) 720-8938; or Internet: http://
www.regulations.gov. Comments should reference the docket number and
the date and page number of this issue of the Federal Register and will
be available for public inspection in the Office of the Docket Clerk
during regular business hours, or can be viewed at: http://
www.regulations.gov. All comments should reference the docket number
and the date and page number of this issue of the Federal Register and
will be available for public inspection in the Office of the Docket
Clerk during regular business hours, or can be viewed at the Web site
referenced above.
FOR FURTHER INFORMATION CONTACT: Debbie Wray, Marketing Specialist, or
Kurt J. Kimmel, Regional Manager, California Marketing Field Office,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA; Telephone: (559) 487-5901, Fax: (559) 487-5906, or E-mail:
Debbie.Wray@usda.gov, or Kurt.Kimmel@usda.gov.
Small businesses may request information on complying with this
regulation by contacting Jay Guerber, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence
Avenue, SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202)
720-2491, Fax: (202) 720-8938, or E-mail: Jay.Guerber@usda.gov.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order
No. 984, as amended (7 CFR part 984), regulating the handling of
walnuts grown in California, hereinafter referred to as the ``order.''
The order is effective under the Agricultural Marketing Agreement Act
of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the
``Act.''
The Department of Agriculture (USDA) is issuing this rule in
conformance with Executive Order 12866.
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. Under the marketing order now in effect, California
walnut handlers 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
walnuts beginning on September 1, 2008, and continue until amended,
suspended, or terminated. This rule will not preempt any State or local
laws, regulations, or policies, unless they present an irreconcilable
conflict with this rule.
The Act provides that administrative proceedings must be exhausted
before parties may file suit in court. Under section 608c(15)(A) of the
Act, any handler subject to an order may file with USDA a petition
stating that the order, any provision of the order, or any obligation
imposed in connection with the order is not in accordance with law and
request a modification of the order or to be exempted therefrom. Such
handler is afforded the opportunity for a hearing on the petition.
After the hearing, USDA would rule on the petition. The Act provides
that the district court of the United States in any district in which
the handler is an inhabitant, or has his or her principal place of
business, has jurisdiction to review USDA's ruling on the petition,
provided an action is filed not later than 20 days after the date of
the entry of the ruling.
This rule decreases the assessment rate established for the Board
for the 2008-09 and subsequent marketing years from $0.0158 to $0.0131
per kernelweight pound of assessable walnuts.
The California walnut marketing order provides authority for the
Board, with the approval of USDA, to formulate an annual budget of
expenses and collect assessments from handlers to administer the
program. The members of the Board are producers and handlers of
California walnuts. They are familiar with the Board's needs and 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 at a public meeting. Thus,
all directly affected persons have an opportunity to participate and
provide input.
For the 2008-09 and subsequent marketing years, the Board
recommended, and USDA approved, an assessment rate of $0.0158 per
kernelweight pound of assessable walnuts that would continue in effect
from year to year unless modified, suspended, or terminated by USDA
upon recommendation and information submitted by the Board or other
information available to the USDA. The Board recommended this rate in
May 2008 along with expenditures of $4,594,300 for 2008-09.
The Board met on September 12, 2008, and unanimously recommended
reducing its 2008-09 expenditures to $3,809,000 and reducing the
assessment rate to $0.0131 per kernelweight pound
[[Page 73762]]
of assessable walnuts. The assessment rate of $0.0131 per kernelweight
pound of assessable walnuts is $0.0027 per kernelweight pound lower
than the rate currently in effect. The decreased assessment rate is
primarily due to an $800,000 decrease in domestic market development
expenditures previously recommended for the 2008-09 marketing year.
The following table compares major budget expenditures recommended
by the Board in May 2008 and September 2008 for the 2008-09 marketing
year:
------------------------------------------------------------------------
Original 2008- Revised 2008-
Budget expense categories 09 09
------------------------------------------------------------------------
Employee Expenses....................... $410,500 $410,500
Travel/Board Expenses................... 100,000 100,000
Office Costs/Annual Audit............... 142,500 142,500
Program Expenses Including Research:
Controlled Purchases................ 5,000 5,000
Crop Acreage Survey................. .............. ..............
Crop Estimate....................... 110,000 110,000
Production Research *............... 835,000 835,000
Domestic Market Development......... 2,935,000 2,135,000
Reserve for Contingency............. 56,300 71,000
------------------------------------------------------------------------
* Includes Research Director's compensation and a contingency for
production research issues.
The assessment rate recommended by the Board was derived by
dividing anticipated expenses by expected shipments of California
walnuts certified as merchantable. Merchantable shipments for the year
are estimated at 290,773,800 kernelweight pounds which should provide
slightly over $3,809,000 in assessment income and allow the Board to
cover its expenses. Unexpended funds may be retained in a financial
reserve, provided that funds in the financial reserve do not exceed
approximately two years' budgeted expenses. If not retained in a
financial reserve, unexpended funds may be used temporarily to defray
expenses of the subsequent marketing year, but must be made available
to the handlers from whom collected within 5 months after the end of
the year, according to Sec. 984.69 of the order.
The estimate for merchantable shipments is based on historical
data, which is the prior year's production of 323,082 tons (inshell).
Pursuant to Sec. 984.51(b) of the order, this figure was converted to
a merchantable kernelweight basis using a factor of 0.45 (323,082 tons
x 2,000 pounds per ton x 0.45).
The assessment rate established in this rule will continue in
effect indefinitely unless modified, suspended, or terminated by USDA
upon recommendation and information submitted by the Board or other
available information.
Although this assessment rate is effective for an indefinite
period, the Board will continue to meet prior to or during each
marketing year to recommend a budget of expenses and consider
recommendations for modification of the assessment rate. The dates and
times of Board meetings are available from the Board or USDA. Board
meetings are open to the public and interested persons may express
their views at these meetings. USDA will evaluate Board recommendations
and other available information to determine whether modification of
the assessment rate is needed. Further rulemaking would be undertaken
as necessary. The Board's 2008-09 budget and those for subsequent
marketing years will be reviewed and, as appropriate, approved by USDA.
Initial Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), the Agricultural Marketing Service (AMS) has considered the
economic impact of this rule on small entities. Accordingly, AMS has
prepared this initial regulatory flexibility analysis.
The purpose of the RFA is to fit regulatory actions to the scale of
business subject to such actions in order that small businesses will
not be unduly or disproportionately burdened. Marketing orders issued
pursuant to the Act, and the rules issued thereunder, are unique in
that they are brought about through group action of essentially small
entities acting on their own behalf.
There are currently 55 handlers of California walnuts subject to
regulation under the marketing order, and there are approximately 4,000
growers in the production area. Small agricultural service firms are
defined by the Small Business Administration (SBA) (13 CFR 121.201) as
those having annual receipts of less than $7,000,000, and small
agricultural producers are defined as those having annual receipts of
less than $750,000.
USDA's National Agricultural Statistics Service (NASS) reports that
California walnuts were harvested from a total of 218,000 bearing acres
during 2007-08. The average yield for the 2007-08 crop was 1.49 tons
per acre, which is slightly lower than the 1.53 tons per acre average
for the previous five years. NASS reported the value of the 2007-08
crop at $2,320 per ton, which is considerably higher than the previous
five-year average of $1,384 per ton.
At the time of the 2002 Census of Agriculture, which is the most
recent information available, approximately 83 percent of California's
walnut farms were smaller than 100 acres. Forty-seven percent were
between 1 and 15 acres. A 100-acre farm with an average yield of 1.49
tons per acre would have been expected to produce about 149 tons of
walnuts during 2007-08. At $2,320 per ton, that farm's production would
have had an approximate value of $345,000. Assuming that the majority
of California's walnut farms are still smaller than 100 acres, it could
be concluded that the majority of the growers had receipts of less than
$345,000 in 2007-08. This is well below the SBA threshold of $750,000;
thus, the majority of California's walnut growers would be considered
small growers according to SBA's definition.
According to information supplied by the industry, approximately
two-thirds of California's walnut handlers shipped merchantable walnuts
valued under $7,000,000 during the 2007-08 marketing year and would
therefore be considered small handlers according to the SBA definition.
This rule decreases the assessment rate established for the Board
and collected from handlers for the 2008-09 and subsequent marketing
years from $0.0158 per kernelweight pound of assessable walnuts to
$0.0131 per kernelweight pound of assessable walnuts. The Board
unanimously recommended 2008-09 expenditures of $3,809,000 and an
assessment rate of
[[Page 73763]]
$0.0131 per kernelweight pound of assessable walnuts. The assessment
rate of $0.0131 is $0.0027 lower than the rate currently in effect. The
quantity of assessable walnuts for the 2008-09 marketing year is
estimated at 323,082 tons. Thus, the $0.0131 rate should provide
slightly over $3,809,000 in assessment income and be adequate to meet
the year's expenses. The decreased assessment rate is primarily due to
an $800,000 decrease in domestic market development expenditures.
The following table compares major budget expenditures recommended
by the Board in May 2008 and September 2008 for the 2008-09 marketing
year:
------------------------------------------------------------------------
Original 2008- Revised 2008-
Budget expense categories 09 09
------------------------------------------------------------------------
Employee Expenses....................... $410,500 $410,500
Travel/Board Expenses................... 100,000 100,000
Office Costs/Annual Audit............... 142,500 142,500
Program Expenses Including Research:
Controlled Purchases................ 5,000 5,000
Crop Acreage Survey................. .............. ..............
Crop Estimate....................... 110,000 110,000
Production Research *............... 835,000 835,000
Domestic Market Development......... 2,935,000 2,135,000
Reserve for Contingency............. 56,300 71,000
------------------------------------------------------------------------
* Includes Research Director's compensation and a contingency for
production research issues.
The Board reviewed and unanimously recommended 2008-09 expenditures
of $3,809,000. Prior to arriving at this budget, the Board considered
alternative expenditure levels but ultimately decided that the
recommended levels were reasonable to properly administer the order.
The assessment rate recommended by the Board was derived by dividing
anticipated expenses by expected shipments of California walnuts
certified as merchantable. Merchantable shipments for the year are
estimated at 290,773,800 kernelweight pounds which should provide
$3,809,000 in assessment income and allow the Board to cover its
expenses. Unexpended funds may be retained in a financial reserve,
provided that funds in the financial reserve do not exceed
approximately two years' budgeted expenses. If not retained in a
financial reserve, unexpended funds may be used temporarily to defray
expenses of the subsequent marketing year, but must be made available
to the handlers from whom collected within 5 months after the end of
the year, according to Sec. 984.69 of the order.
According to NASS, the season average grower price for years 2006
and 2007 were $1,630 and $2,320 per ton, respectively. These prices
provide a range within which the 2008-09 season average price could
fall. Dividing these average grower prices by 2,000 pounds per ton
provides an inshell price per pound range of $0.815 to $1.16. Dividing
these inshell prices per pound by the 0.45 conversion factor (inshell
to kernelweight) established in the order yields a 2008-09 price range
estimate of $1.81 to $2.58 per kernelweight pound of assessable
walnuts.
To calculate the percentage of grower revenue represented by the
assessment rate, the assessment rate of $0.0131 per kernelweight pound
is divided by the low and high estimates of the price range. The
estimated assessment revenue for the 2008-09 marketing year as a
percentage of total grower revenue would thus likely range between
0.508 and 0.724 percent.
This action decreases the assessment obligation imposed on
handlers. Assessments are applied uniformly on all handlers, and some
of the costs may be passed on to producers. However, decreasing the
assessment rate reduces the burden on handlers, and may reduce the
burden on producers. In addition, the Board's meeting was widely
publicized throughout the California walnut industry and all interested
persons were invited to attend the meeting and participate in Board
deliberations on all issues. Like all Board meetings, the September 12,
2008, meeting was a public meeting and all entities, both large and
small, were able to express views on this issue. Finally, interested
persons are invited to submit comments on this interim final rule,
including the regulatory and informational impacts of this action on
small businesses.
This action imposes no additional reporting or recordkeeping
requirements on either small or large California walnut 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.
AMS is committed to complying with the E-Government Act, to promote
the use of 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.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at: http:/
/www.ams.usda.gov/AMSv1.0/
ams.fetchTemplateData.do?template=TemplateN&page=MarketingOrdersSmallBus
inessGuide. 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 Board 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 upon good
cause that it is impracticable, unnecessary, and contrary to the public
interest to give preliminary notice prior to putting this rule into
effect, and that good cause exists for not postponing the effective
date of this rule until 30 days after publication in the Federal
Register because (1) the 2008-09 marketing year began on September 1,
2008, and the marketing order requires that the rate of assessment for
each year apply to all assessable walnuts handled during the year; (2)
the action decreases the assessment rate for assessable walnuts
beginning with the 2008-09 marketing year; (3) handlers are aware of
this action which was unanimously recommended by the Board at a public
meeting and is similar to other assessment rate actions issued in past
years; and (4) this interim final rule
[[Page 73764]]
provides a 60-day comment period, and all comments timely received will
be considered prior to finalization of this rule.
List of Subjects in 7 CFR Part 984
Walnuts, Marketing agreements, Nuts, Reporting and recordkeeping
requirements.
0
For the reasons set forth in the preamble, 7 CFR part 984 is amended as
follows:
PART 984--WALNUTS GROWN IN CALIFORNIA
0
1. The authority citation for 7 CFR part 984 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
0
2. Section 984.347 is revised to read as follows:
Sec. 984.347 Assessment rate.
On and after September 1, 2008, an assessment rate of $0.0131 per
kernelweight pound is established for California merchantable walnuts.
Dated: November 26, 2008.
James E. Link,
Administrator, Agricultural Marketing Service.
[FR Doc. E8-28766 Filed 12-2-08; 11:15 am]
BILLING CODE 3410-02-P