[Federal Register: August 26, 2009 (Volume 74, Number 164)]
[Proposed Rules]
[Page 43082-43084]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26au09-12]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 927
[Doc. No. AMS-FV-09-0037; FV09-927-1 PR]
Pears Grown in Oregon and Washington; Increased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This rule would increase the assessment rate established for
the Processed Pear Committee (PPC) for the 2009-2010 and subsequent
fiscal periods from $6.25 to $8.41 per ton for ``summer/fall'' pears
for canning. The PPC is responsible for local administration of the
marketing order regulating the handling of pears for processing grown
in Oregon and Washington. Assessments upon handlers of pears for
processing are used by the PPC to fund reasonable and necessary
expenses of the program. The fiscal period for the marketing order
begins July 1 and ends June 30. The assessment rate would remain in
effect indefinitely unless modified, suspended or terminated.
DATES: Comments must be received by September 25, 2009.
ADDRESSES: Interested persons are invited to submit written comments
regarding 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 submitted in response to this rule
will be included in the record and will be made available to the
public. Please be advised that the identity of the individuals or
entities submitting the comments will be made public on the Internet at
the address provided above.
FOR FURTHER INFORMATION CONTACT: Susan M. Coleman or Gary D. Olson,
Northwest Marketing Field Office, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, 1220 SW., Third
Avenue, Suite 385, Portland, OR 97204; Telephone: (503) 326-2724; Fax:
(503) 326-7440; or E-mail: Sue.Coleman@ams.usda.gov or
GaryD.Olson@ams.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@ams.usda.gov.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order
No. 927, as amended (7 CFR 927), regulating the handling of pears grown
in Oregon and Washington, 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, Oregon and
Washington pear handlers are subject to assessments. Funds to
administer the order are derived from such assessments. It is intended
that the assessment rate as proposed herein would be applicable to all
assessable pears beginning July 1, 2009, 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
[[Page 43083]]
inhabitant, or has his or her principal place of business, has
jurisdiction to review USDA's ruling on the petition, provided an
action is filed not later than 20 days after the date of the entry of
the ruling.
This rule would increase the assessment rate established for the
PPC for the 2009-2010 and subsequent fiscal periods from $6.25 to $8.41
per ton for ``summer/fall'' pears for canning handled under the order.
The assessment rate for ``winter'' and ``other'' pears for processing
would remain unchanged at a zero rate.
The order provides authority for the PPC, 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 PPC are
growers, handlers, and processors of Oregon and Washington pears. They
are familiar with the PPC'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 at a public meeting. Thus, all directly
affected persons have an opportunity to participate and provide input.
For the 2005-06 and subsequent fiscal periods, the PPC unanimously
recommended the following three base rates of assessment: (a) $6.25 per
ton for any or all varieties or subvarieties of pears for canning
classified as ``summer/fall'', excluding pears for other methods of
processing; (b) $0.00 per ton for any or all varieties or subvarieties
of pears for processing classified as ``winter''; and (c) $0.00 per ton
for any or all varieties or subvarieties of pears for processing
classified as ``other''. The assessment for ``summer/fall'' pears
applies only to pears for canning and excludes pears for other methods
of processing as defined in Sec. 927.15, which includes pears for
concentrate, freezing, dehydrating, pressing, or in any other way to
convert pears into a processed product. This rate continues in effect
from fiscal period to fiscal period unless modified, suspended, or
terminated by USDA upon recommendation and information submitted by the
PPC or other information available to USDA.
The PPC met on May 28, 2009, and unanimously recommended 2009-2010
expenditures of $1,029,554. In comparison, last year's budgeted
expenditures were $882,606. The major expenditures recommended by the
PPC for the 2009-2010 fiscal period include $860,310 for promotion and
paid advertising; $130,944 for research; $24,200 for administration;
$13,100 for PPC expenses; and $1,000 for contingency. In comparison,
major expenditures for the 2008-09 fiscal period included $700,000 for
promotion and paid advertising; $140,106 for research; $28,000 for
administration; $13,500 for PPC expenses; and $1,000 for contingency.
The PPC based its recommended assessment rate for ``summer/fall''
pears for canning on the 2009-2010 crop estimate, the 2009-2010 program
expenditure needs, and the current and projected size of its monetary
reserve. Shipments of ``summer/fall'' pears for canning for 2009-2010
are estimated at 121,000 tons, which should provide $1,017,610 in
assessment income. Income derived from handler assessments, along with
interest income ($5,000), and funds from the Committee's authorized
reserve ($136,420), should be adequate to cover the budgeted
expenditures. The estimated 2009-2010 year-end reserve is $129,476,
which is within the order's limit of approximately one fiscal period's
operational expenses.
Over the past five years, the Northwest processed pear industry has
suffered a reduction in crop size by approximately 23 percent. With the
decreasing crop size, along with the increasing costs for promotional
activities, the PPC has been forced to cut back on some promotional
activities and use reserve funds. The PPC recommended the higher
assessment rate to increase the funding for promotional activities. The
budget for promotion and paid advertising would increase from $700,000
to $860,310. This increase will allow the PPC to effectively carry out
the promotional activities needed to maintain the existing market share
and increase demand. The PPC recommended no change for the $0.00
assessment rate for both the ``winter'' and ``other'' classification of
pears for processing.
The proposed assessment rate would continue in effect indefinitely
unless modified, suspended, or terminated by USDA upon recommendation
and information submitted by the PPC or other available information.
Although this assessment rate would be effective for an indefinite
period, the PPC would 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 the
PPC's meetings are available from the PPC or USDA. The PPC meetings are
open to the public and interested persons may express their views at
these meetings. USDA would evaluate the PPC's recommendations and other
available information to determine whether modification of the
assessment rate is needed. Further rulemaking will be undertaken as
necessary. The PPC's 2009-2010 budget and those for subsequent fiscal
periods would be reviewed and, as appropriate, approved by USDA.
Initial Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), (5 U.S.C. 601-612), 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 approximately 1,500 growers of pears for canning in the
regulated production area and approximately 51 handlers subject to
regulation under the order. Small agricultural growers are defined by
the Small Business Administration (13 CFR 121.201) as those having
annual receipts of less than $750,000, and small agricultural service
firms are defined as those whose annual receipts are less than
$7,000,000.
According to the Noncitrus Fruits and Nuts 2008 Preliminary Summary
issued in January 2009 by the National Agricultural Statistics Service,
the total farm gate value of ``summer/fall'' processed pears grown in
Oregon and Washington for 2008 was $28,868,000. Therefore, the 2008
average gross revenue for a ``summer/fall'' processed pear grower in
Oregon and Washington was $19,245. Based on records of the PPC and
recent f.o.b. prices for pears, all of the handlers ship less than
$7,000,000 worth of processed pears on an annual basis. Thus it can be
concluded that the majority of growers and handlers of Oregon and
Washington pears may be classified as small entities.
There are five processing plants in the production area, with one
in Oregon and four in Washington. All five processors would be
considered large entities under the SBA's definition of small
businesses.
This rule would increase the assessment rate established for the
PPC and collected from handlers for the 2009-2010 and subsequent fiscal
[[Page 43084]]
periods from $6.25 to $8.41 per ton for ``summer/fall'' pears for
canning. The PPC also unanimously recommended 2009-2010 expenditures of
$1,029,554. With a 2009-2010 crop of ``summer/fall'' pears for canning
estimate of 121,000 tons in Oregon and Washington, the PPC anticipates
assessment income of about $1,017,610. The PPC recommended the higher
assessment rate to increase the funding for promotional activities.
The major expenditures recommended by the PPC for the 2009-2010
fiscal period include $860,310 for promotion and paid advertising,
$130,944 for research, $24,200 for administration, $13,100 for PPC
expenses, and $1,000 for contingency. In comparison, major expenditures
for the 2008-09 fiscal period included $700,000 for promotion and paid
advertising, $140,106 for research, $28,000 for administration, $13,500
for PPC expenses, and $1,000 for contingency.
The PPC discussed alternatives to this recommended assessment
increase. The PPC reviewed a ``critical issue analysis'' of the key
components of the PPC's promotion program and discussed individual
promotional activities. Leaving the assessment rate at the current
$6.25 per ton would have cut core promotional activities. A $0.05
increase to $6.30 per ton would not be sufficient and would limit
promotional activities. The assessment rate of $8.41 per ton for
``summer/fall'' pears for canning enables the PPC to achieve the key
components of the PPC's promotion program.
A review of historical information and preliminary information
pertaining to the upcoming crop year indicates that the grower price
for the 2009-2010 season could average about $250 per ton for ``summer/
fall'' pears for canning. Therefore, the estimated assessment revenue
for the 2009-2010 fiscal period as a percentage of total grower revenue
is 3.364 percent for Oregon and Washington ``summer/fall'' pears for
canning.
This action would increase the assessment obligation imposed on
handlers. While assessments impose some additional costs on handlers,
the costs are minimal and uniform on all handlers. Some of the
additional costs may be passed on to growers. However, these costs
would be offset by the benefits derived by the operation of the order.
In addition, the PPC's meeting was widely publicized throughout the
Oregon and Washington pear industry and all interested persons were
invited to attend and participate in PPC deliberations on all issues.
Like all PPC meetings, the May 28, 2009 meeting was a public meeting
and all entities, both large and small, were able to express views on
the issues. Finally, interested persons are invited to submit
information on the regulatory and informational impacts of this action
on small businesses.
This proposed rule would impose no additional reporting or
recordkeeping requirements on either small or large Oregon and
Washington pear 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.
Additionally, USDA has not identified any relevant Federal rules that
duplicate, overlap, or conflict with this rule.
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.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and order 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.
A 30-day comment period is provided to allow interested persons to
respond to this proposed rule. Thirty days is deemed appropriate
because: (1) The 2009-2010 fiscal period will begin on July 1, 2009,
and the order requires that the assessment rate for each fiscal period
apply to all pears for canning handled during such fiscal period; (2)
the Oregon and Washington pear harvest and shipping season is expected
to begin in mid-August; (3) the PPC needs to have sufficient funds to
pay its expenses, which are incurred on a continuous basis; and (4)
handlers are aware of this action, which was recommended by the PPC at
a public meeting and is similar to other assessment rate actions issued
in past years.
List of Subjects in 7 CFR Part 927
Marketing agreements, Pears, Reporting and recordkeeping
requirements.
For the reasons set forth 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. In Sec. 927.237, the introductory text and paragraph (a) are
revised to read as follows:
Sec. 924.237 Processed pear assessment rate.
On or after July 1, 2009, the following base rates of assessment
for pears for processing are established for the Processed Pear
Committee:
(a) $8.41 per ton for any or all varieties or subvarieties of pears
for canning classified as ``summer/fall'' excluding pears for other
methods of processing;
* * * * *
Dated: August 20, 2009.
Rayne Pegg,
Administrator, Agricultural Marketing Service.
[FR Doc. E9-20515 Filed 8-25-09; 8:45 am]
BILLING CODE 3410-02-P