Rule2022-08001
Decreased Assessment Rate for Pecans Grown in 15 States
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
April 14, 2022
Effective
May 16, 2022
Issuing agencies
Agriculture DepartmentAgricultural Marketing Service
Abstract
This rule decreases the assessment rate established for the 2021-22 fiscal year and subsequent fiscal years. The assessment rate will remain in effect indefinitely unless modified, suspended, or terminated.
Full Text
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<title>Federal Register, Volume 87 Issue 72 (Thursday, April 14, 2022)</title>
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[Federal Register Volume 87, Number 72 (Thursday, April 14, 2022)]
[Rules and Regulations]
[Pages 22108-22110]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-08001]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 986
[Doc. No. AMS-SC-21-0080; SC21-986-2 FR]
Decreased Assessment Rate for Pecans Grown in 15 States
AGENCY: Agricultural Marketing Service, Department of Agriculture
(USDA).
ACTION: Final rule.
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SUMMARY: This rule decreases the assessment rate established for the
2021-22 fiscal year and subsequent fiscal years. The assessment rate
will remain in effect indefinitely unless modified, suspended, or
terminated.
DATES: Effective May 16, 2022.
FOR FURTHER INFORMATION CONTACT:
Abigail Campos, Marketing Specialist, or Christian D. Nissen,
Regional Director, Southeast Region Branch, Market Development
Division, Specialty Crops Program, AMS, USDA; Telephone: (863) 324-
3375, Fax: (863) 291-8614, or Email: <a href="/cdn-cgi/l/email-protection#b7f6d5ded0d6dedb99f4d6dac7d8c4f7c2c4d3d699d0d8c1"><span class="__cf_email__" data-cfemail="3475565d53555d581a775559445b4774414750551a535b42">[email protected]</span></a> or
<a href="/cdn-cgi/l/email-protection#bffcd7cdd6cccbd6ded191f1d6ccccdad1ffcaccdbde91d8d0c9"><span class="__cf_email__" data-cfemail="7132190318020518101f5f3f180202141f31040215105f161e07">[email protected]</span></a>.
Small businesses may request information on complying with this
regulation by contacting Richard Lower, Market Development Division,
Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP
0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, or Email:
<a href="/cdn-cgi/l/email-protection#66340f050e071402482a09110314261315020748010910"><span class="__cf_email__" data-cfemail="50023933383122347e1c3f27352210252334317e373f26">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: This action, pursuant to 5 U.S.C. 553,
amends regulations issued to carry out a marketing order as defined in
7 CFR 900.2(j). This rule is issued under Marketing Agreement and
Marketing Order No. 986, as amended (7 CFR part 986), regulating the
handling of pecans grown in the states of Alabama, Arkansas, Arizona,
California, Florida, Georgia, Kansas, Louisiana, Missouri, Mississippi,
North Carolina, New Mexico, Oklahoma, South Carolina, and Texas. Part
986, (referred to as ``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 Council locally administers
the Order and is comprised of growers and handlers of pecans operating
within the production area, and one accumulator and one public member.
The Department of Agriculture (USDA) is issuing this rule in
conformance with Executive Orders 12866 and 13563. Executive Orders
12866 and 13563 direct agencies to assess all costs and benefits of
available regulatory alternatives and, if regulation is necessary, to
select regulatory approaches that maximize net benefits (including
potential economic, environmental, public health and safety effects,
distributive impacts, and equity). Executive Order 13563 emphasizes the
importance of quantifying both costs and benefits, reducing costs,
harmonizing rules, and promoting flexibility. This action falls within
a category of regulatory actions that the Office of Management and
Budget (OMB) exempted from Executive Order 12866 review.
This rule has been reviewed under Executive Order 13175--
Consultation and Coordination with Indian Tribal Governments, which
requires agencies to consider whether their rulemaking actions would
have tribal implications. USDA has determined this rule is unlikely to
have substantial direct effects on one or more Indian tribes, on the
relationship between the Federal Government and Indian tribes, or on
the distribution of power and responsibilities between the Federal
Government and Indian tribes.
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. Under the Order now in effect, pecan handlers are
subject to assessments. Funds to administer the Order are derived from
such assessments. It is intended that the assessment rates will be
applicable to all assessable pecans for the 2021-22 fiscal year, and
continue until amended, suspended, or terminated.
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.
The Order provides that based on the recommendation of the Council
or other available data, the Secretary shall fix three base rates of
assessments for inshell pecans handled during each fiscal year. This
rule decreases the assessment rates from $0.03 per pound for improved
varieties and $0.02 per pound for native and seedling varieties and for
substandard pecans, the rates that were established for the 2016-17 and
subsequent fiscal years, to $0.01 per pound for improved varieties and
$0.00 per pound for native and seedling varieties and for substandard
pecans handled for the 2021-22 and subsequent fiscal years.
The Order authorizes the Council, with the approval of Agricultural
Marketing Service (AMS), to formulate an annual budget of expenses and
collect assessments from handlers to administer the program. The
members of the Council are familiar with the Council's needs and with
the costs of goods and services in their local area and can formulate
an appropriate budget and assessment rates. The assessment rates are
formulated and discussed in a public meeting, and all directly affected
persons have an opportunity to participate and provide input.
For the 2016-17 and subsequent fiscal years, the Council
recommended, and AMS approved, assessment rates of $0.03 per pound for
improved varieties and $0.02 per pound for native and seedling
varieties and for substandard pecans handled. The assessment rates
continue in effect from fiscal year to fiscal year unless modified,
suspended, or terminated by AMS upon recommendation and information
submitted by the Council or other information available to AMS.
The Council held a virtual meeting on September 22, 2021, and
recommended 2021-22 expenditures of $9,002,508, and a decreased
assessment rate of $0.01 per pound of improved varieties, and $0.00 per
pound for native and seedling varieties and for substandard pecans. In
comparison, the previous fiscal year's budget expenditures were
$11,741,400. The assessment rate for improved varieties of $0.01 and
the assessment rate of $0.00 for native and seedling varieties and for
substandard pecans are
[[Page 22109]]
$0.02 lower than the rates currently in effect.
On February 12, 2021, USDA established the Pecan Promotion,
Research and Information Order, a new research and promotion program.
Under the new program, research and promotion activities for pecans are
funded through the collection of assessments from U.S. growers and
foreign importers.
With the new program in effect, the Council recommended reducing
expenditures for research and promotion under the Order. With these
reductions, total budgeted expenditures for 2021-22 are estimated at
$9,002,508 which is $2,738,892 less than the $11,741,400 budgeted for
2020-21. The Council unanimously voted to decrease the assessment rates
to reflect the reduction in expenditures, and to offset the assessments
collected under the new program so the assessment burden on the
industry does not increase.
The major expenditures for the Council for the 2021-22 year include
$2,510,000 for international relations, $2,180,000 for marketing, and
$1,447,066 for general administration. Budgeted expenses for these
items in 2020-21 were $1,968,000, $6,715,000, and $1,425,000,
respectively.
The Council derived the recommended assessment rates by considering
anticipated expenses, expected shipments of pecans, Market Access
Program (MAP) funds, and the amount of funds available in the
authorized reserve. Assessable shipments for the year are an estimated
315 million pounds of improved varieties, which should provide
approximately $3,150,000 in assessment income (315,000,000 pounds
multiplied by $0.01). Income derived from handler assessments
calculated at the new rate, along with interest income, MAP funds, and
funds from the Council's authorized reserve, should be adequate to
cover projected budgeted expenses of $9,002,508. Funds in the reserve
are estimated to be $2,800,000 at the end of the 2021-22 fiscal year,
which is within the maximum permitted by Sec. 986.64 of the Order
(approximately three fiscal years' expenses).
The assessment rate will continue in effect indefinitely unless
modified, suspended, or terminated by AMS upon recommendation and
information submitted by the Council or other available information.
Although these assessment rates will be in effect for an indefinite
period, the Council will continue to meet prior to or during each
fiscal year to recommend a budget of expenses and consider
recommendations for modification of the assessment rates. The dates and
times of Council meetings are available from the Council or AMS.
Council meetings are open to the public and interested persons may
express their views at these meetings. AMS will evaluate Council
recommendations and other available information to determine whether
modification of the assessment rates is needed. Further rulemaking
would be undertaken as necessary. The Council's 2021-22 budget and
those for subsequent fiscal years will be reviewed and, as appropriate,
approved by AMS.
Final 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 final regulatory flexibility
analysis.
The purpose of the RFA is to fit regulatory actions to the scale of
businesses subject to such actions in order that small businesses will
not be unduly or disproportionately burdened. Marketing orders issued
pursuant to the Act are unique in that they are brought about through
group action of essentially small entities acting on their own behalf.
There are approximately 4,500 growers of pecans in the production
area and approximately 150 handlers subject to regulation under the
Order. Small agricultural growers are defined by the Small Business
Administration (SBA) as those having annual receipts less than
$1,000,000, and small agricultural service firms are defined as those
whose annual receipts are less than $30,000,000 (13 CFR 121.201).
According to the National Agricultural Statistics Service (NASS),
the 2020-21 crop value was $435.28 million. With a crop size of 305.36
million pounds, the season average grower price was $1.43 per pound.
Dividing the $435.28 million crop value by the estimated number of
pecan growers (4,500) yields an annual average receipts per grower
estimate of $96,729. This is well below the SBA threshold for small
growers.
Evidence presented at the pecan marketing order promulgation
hearing indicates an average handler margin of $0.58 per pound. Adding
this margin to the average grower price of $1.43 per pound for in-shell
pecans yields an estimated annual handler price of $2.01 per pound.
With a total 2020-21 utilization of 305.36 million pounds, the total
estimated value of production at the handler level for the fiscal year
was $613.77 million ($2.01 per pound multiplied by 305.36 million
pounds). Dividing this $613.77 million figure by the number of handlers
(150) yields an average annual receipts per handler estimate of $4.09
million. This is well below the SBA threshold for small agricultural
service firms. Assuming a normal distribution, the majority of pecan
growers and handlers may be classified as small entities.
This action decreases the assessment rates collected from handlers
for the 2021-22 and subsequent fiscal years from $0.03 to $0.01 per
pound of improved varieties and from $0.02 to $0.00 per pound of native
and seedling varieties and for substandard pecans handled. The Council
recommended 2021-22 fiscal year expenditures of $9,002,508 and
assessment rates of $0.01 per pound for improved varieties and $0.00
per pound for native and seedling varieties and for substandard pecans.
The assessment rates are $0.02 per pound lower than 2016-17 rates. The
quantity of assessable pecans for the 2021-22 fiscal year is estimated
at 315 million pounds. Thus, the $0.01 per pound for improved varieties
and $0.00 per pound for native and seedling varieties and for
substandard pecans rate should provide $3,150,000 in assessment income.
Income derived from handler assessments, along with interest income,
MAP funds, and funds from the Council's authorized reserve, will be
adequate to cover budgeted expenses.
The major expenditures projected by the Council for the 2021-22
year include $2,510,000 for international relations, $2,180,000 for
marketing, and $1,447,066 for general administration. Budgeted expenses
for these items in 2020-21 were $2,510,000, $6,285,000, and $1,447,066,
respectively.
The Council recommended decreasing the assessment rates to reflect
a reduction in research and promotion expenditures as these activities
will be carried out by the new USDA research and promotion program also
funded by the industry. Consequently, the Council recommended a
corresponding decrease in the assessment rates to reflect the decrease
in research and promotion expenditures.
Prior to arriving at the estimated expenditures and assessment
rates, the Council considered information from various sources, such as
the Council's Governance Committee. Alternative expenditure levels were
discussed by this Committee, based upon the relative value of various
activities to the pecan industry and the impact of the new research and
promotion program. The Council determined that based on the information
currently available,
[[Page 22110]]
program activities should be appropriately funded, and no alternate
expenditure levels were deemed appropriate.
Using NASS data, a weighted average grower price for the past 3
seasons (2018-19 through 2020-21) is $1.66 per pound. This provides a
reasonable forecast of the average grower price for 2021-22 season. The
new assessment rate of $0.01 per pound for improved varieties
represents 0.6 percent of the $1.66 weighted average price (six tenths
of one percent; $0.01 divided by $1.66 x 100).
This action will decrease the assessment obligation imposed on
handlers. Assessments are applied uniformly on all handlers, and some
of the costs may be passed on to growers. However, decreasing the
assessment rates reduces the burden on handlers and may also reduce the
burden on growers.
The September 22, 2021, Council meeting was widely publicized
throughout the pecan industry. Meetings are held virtually or in a
hybrid style. Participants have a choice whether to attend in person or
virtually and can participate in the Council's deliberations on all
issues. Like all Council meetings, the September 22, 2021, meeting was
a public meeting and all entities, both large and small, were able to
express views on this issue.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35), the Order's information collection requirements have been
previously approved by the OMB and assigned OMB No. 0581-0291 Federal
Marketing Order for Pecans. No changes in those requirements are
necessary as a result of this rule. Should any changes become
necessary, they would be submitted to OMB for approval.
This rule imposes no additional reporting or recordkeeping
requirements on either small or large pecan 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. As noted in the initial regulatory
flexibility analysis, AMS 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 proposed rule concerning this action was published in the Federal
Register on December 6, 2021 (86 FR 68934). Copies of the proposed rule
were also mailed or sent via email to all pecan handlers. The proposal
was made available through the internet by AMS and the Office of the
Federal Register. A 30-day comment period ending January 5, 2022, was
provided for interested persons to respond to the proposal.
No comments were received. Accordingly, no changes will be made to
the rule as proposed.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at:
<a href="https://www.ams.usda.gov/rules-regulations/moa/small-businesses">https://www.ams.usda.gov/rules-regulations/moa/small-businesses</a>. Any
questions about the compliance guide should be sent to Richard Lower at
the previously mentioned address in the FOR FURTHER INFORMATION CONTACT
section.
After consideration of all relevant material presented, including
the information and recommendations submitted by the Council and other
available information, AMS has determined that this rule will tend to
effectuate the declared policy of the Act.
List of Subjects in 7 CFR Part 986
Marketing agreements, Nuts, Pecans, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, the Agricultural
Marketing Service is amending 7 CFR part 986 as follows:
PART 986--PECANS GROWN IN THE STATES OF ALABAMA, ARKANSAS, ARIZONA,
CALIFORNIA, FLORIDA, GEORGIA, KANSAS, LOUISIANA, MISSOURI,
MISSISSIPPI, NORTH CAROLINA, NEW MEXICO, OKLAHOMA, SOUTH CAROLINA,
AND TEXAS
0
1. The authority citation for 7 CFR part 986 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
0
2. Section 986.161 is revised to read as follows:
Sec. 986.161 Assessment rate.
On and after October 1, 2021, assessment rates of $0.01 per pound
for pecans classified as improved, $0.00 per pound for pecans
classified as native and seedling, and $0.00 per pound for pecans
classified as substandard pecans are established.
Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2022-08001 Filed 4-13-22; 8:45 am]
BILLING CODE P
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