Rule2023-12770
Tart Cherries Grown in the States of Michigan, New York, Pennsylvania, Oregon, Utah, Washington, and Wisconsin; Assessment Rate Increase
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
June 15, 2023
Effective
July 17, 2023
Issuing agencies
Agriculture DepartmentAgricultural Marketing Service
Abstract
This rule implements a recommendation from the Cherry Industry Administrative Board (Board) to increase the assessment rate established for the 2022-23 and subsequent fiscal periods. The assessment rate will remain in effect indefinitely unless modified, suspended, or terminated.
Full Text
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<title>Federal Register, Volume 88 Issue 115 (Thursday, June 15, 2023)</title>
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[Federal Register Volume 88, Number 115 (Thursday, June 15, 2023)]
[Rules and Regulations]
[Pages 39117-39119]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-12770]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 88, No. 115 / Thursday, June 15, 2023 / Rules
and Regulations
[[Page 39117]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 930
[Doc. No. AMS-SC-22-0068]
Tart Cherries Grown in the States of Michigan, New York,
Pennsylvania, Oregon, Utah, Washington, and Wisconsin; Assessment Rate
Increase
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: This rule implements a recommendation from the Cherry Industry
Administrative Board (Board) to increase the assessment rate
established for the 2022-23 and subsequent fiscal periods. The
assessment rate will remain in effect indefinitely unless modified,
suspended, or terminated.
DATES: Effective July 17, 2023.
FOR FURTHER INFORMATION CONTACT: Delaney Fuhrmeister, Marketing
Specialist, or Christian D. Nissen, Chief, 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#bbffded7dad5dec295fdced3c9d6ded2c8cfdec9fbcec8dfda95dcd4cd"><span class="__cf_email__" data-cfemail="0e4a6b626f606b7720487b667c636b677d7a6b7c4e7b7d6a6f20696178">[email protected]</span></a> or <a href="/cdn-cgi/l/email-protection#e5a68d978c96918c848bcbab8c9696808ba590968184cb828a93"><span class="__cf_email__" data-cfemail="06456e746f75726f676828486f75756368467375626728616970">[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) 720-8085, or Email:
<a href="/cdn-cgi/l/email-protection#9fcdf6fcf7feedfbb1d3f0e8faeddfeaecfbfeb1f8f0e9"><span class="__cf_email__" data-cfemail="e6b48f858e879482c8aa89918394a693958287c8818990">[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 Order No. 930 as
amended (7 CFR part 930), regulating the handling of tart cherries
grown in the states of Michigan, New York, Pennsylvania, Oregon, Utah,
Washington, and Wisconsin. Part 930 (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
Board locally administers the Order and is comprised of producers and
handlers of tart cherries operating within the area of production, and
a public member.
The Agricultural Marketing Service (AMS) 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. AMS has determined that 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, tart cherry handlers are
subject to assessments. Funds to administer the Order are derived from
such assessments. The assessment rate established herein will be
applicable to all assessable tart cherries for the 2022-23 crop 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.
This final rule increases the assessment rate for the 2022-23 and
subsequent fiscal periods from $0.00575 to $0.0075 per pound of tart
cherries. This rule also increases the portion of the assessment rate
allocated to research and promotion from $0.00275 to $0.0055 per pound
and decrease the portion allocated to administrative expenses from
$0.003 to $0.002 per pound.
The Order authorizes the Board, with the approval of AMS, to
formulate an annual budget of expenses and collect assessments from
handlers to administer the program. The members of the Board are
familiar with the Board's needs and with the costs for goods and
services in their local area and can formulate an appropriate budget
and assessment rate. The assessment rate is formulated and discussed in
a public meeting, and all directly affected persons have an opportunity
to participate and provide input.
For the 2020-21 and subsequent fiscal periods, the Board
recommended, and AMS approved, an assessment rate that would continue
in effect from fiscal period to fiscal period unless modified,
suspended, or terminated by AMS upon recommendation and information
submitted by the Board or other information available to AMS.
The Board met on September 8, 2022, and unanimously recommended
2022-23 expenditures of $1,667,000 and an assessment rate of $0.0075
per pound, of which $0.0055 is for research and promotion expenses, and
$0.002 is for administrative expenses. In comparison, last year's
budgeted expenditures were $1,086,500. The assessment rate of
[[Page 39118]]
$0.0075 is $0.00175 higher than the rate currently in effect.
The Board recommended increasing the assessment rate to allow for
more spending on health benefits research, increased spending on
promotion, and to add funds to Board reserves, which have been depleted
due to reduced production in previous seasons. The production during
the 2022-23 fiscal period was 242,352,172 pounds, an increase from the
172,354,783 pounds produced the previous year. However, at the current
assessment rate, assessment income would equal $1,393,525, which does
not meet the Board's anticipated expenditures of $1,667,000. By
increasing the assessment rate by $0.00175, assessment income would be
$1,817,641. This amount should provide sufficient funds to meet 2022-23
anticipated expenses.
Major expenditures recommended by the Board for the 2022-23 year
include $850,000 for promotion, $250,000 for health benefits research,
and $200,000 for salaries. Budgeted expenses for these items in 2021-22
were $600,000, $0, and $258,000, respectively.
The assessment rate recommended by the Board was derived by
reviewing anticipated expenses, production of tart cherries, and the
level of funds in reserve. The 2022-23 crop produced 242,352,172 pounds
of tart cherries, which should provide $1,817,641 in assessment income
(242,352,172 pounds multiplied by $0.0075). However, the Board
anticipates that due to approved exemptions and loss adjustments, the
actual income from assessments will be closer to $1,784,641. Income
derived from handler assessments at the rate established by this rule,
along with reserve funds and interest income, should be adequate to
cover budgeted expenses. Funds in the reserve (currently about
$262,732) are expected to be kept within the maximum permitted by the
Order (approximately one fiscal period's expenses as authorized in
Sec. 930.42).
The assessment rate will continue in effect indefinitely unless
modified, suspended, or terminated by AMS upon recommendation and
information submitted by the Board or other available information.
Although this assessment rate will be in effect for an indefinite
period, the Board 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. Dates and times of Board
meetings are available from the Board or AMS. Board meetings are open
to the public and interested persons may express their views at these
meetings. AMS evaluates Board recommendations and other available
information to determine whether modification of the assessment rate is
needed, and further rulemaking would be undertaken as necessary. The
Board's 2022-23 budget and those for subsequent fiscal periods 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), 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, 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 400 tart cherry growers in the production
area and approximately 40 handlers subject to regulation under the
Order. The Small Business Administration (SBA) standard for small
agricultural producers applicable to tart cherries is annual receipts
of less than $3,500,000 (Other Noncitrus Fruit Farming, NAICS 111339).
Small agricultural service firms are defined as those having annual
receipts of less than $34,000,000 (NAICS 115114, Postharvest Crop
Activities) (13 CFR 121.201).\1\
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\1\ The proposed rule used a SBA size standard for a small
agricultural producer and service firm with annual receipts less
than $3 million and $30 million respectively. This was an error,
since in December 2022 the size standard was revised upward to $3.5
million and $34 million. This final rule uses the updated $3.5
million and $34 million standard for a small agricultural producer
and service firm. The determination that the majority of producers
and handlers of tart cherries may be classified as small entities
has not changed from the proposed rule.
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The National Agricultural Statistics Service (NASS) reported that
the 2021-22 value of the tart cherry crop for processed utilization was
approximately $83 million. Production utilized for processing was 171.0
million pounds and the season average grower price for processed tart
cherries was $0.485 per pound. Dividing the crop value by the estimated
number of producers (400) yields an estimated average annual receipts
per producer of $207,500 ($83 million divided by 400 producers). This
is well below the SBA threshold for small producers.
An estimate of the season average price per pound received by
handlers for processed tart cherries was derived from USDA's purchases
of dried tart cherries for feeding programs in the 2021-2022 season at
an average price of $4.70 per pound. The dried cherry price was
converted to a raw product equivalent price of $0.94 per pound at an
industry recognized ratio of five to one. Multiplying this price by
2021 total processed utilization of 171.0 million pounds results in an
estimated handler-level tart cherry value of $160.7 million. Dividing
this figure by the number of handlers ($160.7 million divided by 40
handlers) yields estimated average annual receipts per handler of
approximately $4 million, which is well below the SBA threshold of $34
million for small agricultural service firms. Assuming a normal
distribution, the majority of producers and handlers of tart cherries
may be classified as small entities.
This final rule increases the assessment rate established for the
Board and collected from handlers for the 2022-23 and subsequent fiscal
periods from $0.00575 to $0.0075 per pound of tart cherries. This
change also increases the portion of the assessment rate allocated to
research and promotion from $0.00275 to $0.0055 per pound and decreases
the portion allocated to administrative expenses from $0.003 to $0.002
per pound. The Board unanimously recommended 2022-23 expenditures of
$1,667,000 and the assessment rate of $0.0075 per pound. The assessment
rate of $0.0075 is $0.00175 higher than the current rate. The 2022-23
crop produced 242,352,172 pounds of tart cherries, which should provide
$1,817,641 in assessment income (242,352,172 pounds multiplied by
$0.0075). However, the Board anticipates that due to approved
exemptions and loss adjustments the actual income from assessments will
be closer to $1,784,641. Income derived from handler assessments and
funds from the Board's authorized reserve, should be adequate to cover
budgeted expenses.
Major expenditures recommended by the Board for the 2022-23 year
include $850,000 for promotion, $250,000 for health benefits research,
and $200,000 for salaries. Budgeted expenses for promotion and salaries
in 2021-22 was $600,000 and $258,000, respectively. There were no
budgeted expenses for health benefits research in 2021-2022.
The Board voted to increase the assessment rate to allow for more
spending on health benefits research,
[[Page 39119]]
increased spending on promotion, and to add funds to Board reserves,
which have been depleted due to reduced production in previous seasons.
At the current assessment rate of $0.00575 and with the 2022-23 crop
production at 242,352,172 pounds, assessment income would equal
$1,393,525 ($0.00575 multiplied by 242,352,172), an amount insufficient
to cover the Committee's anticipated expenditures of $1,667,000. By
increasing the assessment rate by $0.00175, assessment income would be
approximately $1,817,641 ($0.0075 multiplied by 242,352,172). This
amount, along with interest income, and funds from the reserve, should
provide sufficient funds to meet 2022-23 anticipated expenses.
Prior to arriving at this budget and assessment rate, the Board
considered the level of production, projected expenditures, and the
amount in the authorized reserve. The Board discussed alternatives,
including maintaining the current assessment rate of $0.00575. However,
leaving the assessment unchanged would not generate sufficient revenue
to meet Board expenses for the 2022-23 fiscal period. Consequently, the
Board determined that the assessment rate should be increased to
$0.0075 per pound to generate sufficient revenue to meet expenses.
Therefore, the Committee rejected the idea of maintaining the current
assessment rate.
A review of historical information and preliminary information
pertaining to the upcoming season indicates the producer price for the
2022-23 season should be approximately $0.23 per pound of tart
cherries. The assessment rate of $0.0075 per pound represents 3.26
percent of the $0.23 revenue for the 2021-22 fiscal period as a
percentage of total producer revenue ($0.0075 divided by $0.23
multiplied by 100).
This rule increases the assessment obligation imposed on handlers.
While assessments impose additional costs on handlers, the costs are
minimal and uniform on all handlers, and some of the costs may be
passed on to growers. However, these costs are expected to be offset by
the benefits derived by the operation of the Order.
The Board's meeting was widely publicized throughout the tart
cherry 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 8, 2022, meeting was a public meeting and
all entities, both large and small, were able to express views on this
issue. In addition, interested persons were invited to submit comments
on the proposed rule, including the regulatory and informational
impacts of this action on small businesses.
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. 0581-0177, Tart
Cherries Grown in Michigan, New York, Pennsylvania, Oregon, Utah,
Washington, and Wisconsin. No changes in those requirements would be
necessary because of this rule. If any changes become necessary, they
would be submitted to OMB for approval.
This rule does not impose any additional reporting or recordkeeping
requirements on either small or large tart cherry 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 has not identified any relevant Federal
rules that duplicate, overlap, or conflict with this final 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 February 24, 2023 (88 FR 11822). Copies of the proposed
rule were also mailed or sent via email to all tart cherry handlers. A
copy of the proposed rule was made available through the internet by
AMS via <a href="https://www.regulations.gov">https://www.regulations.gov</a>. A 30-day comment period ending
March 27, 2023, was provided for interested persons to respond to the
proposal.
No comments were received. Accordingly, no changes have been 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 Board and other
available information, AMS has determined that this rule tends to
effectuate the declared policy of the Act.
List of Subjects in 7 CFR Part 930
Cherries, Marketing agreements, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, the Agricultural
Marketing Service amends 7 CFR part 930 as follows:
PART 930--TART CHERRIES GROWN IN THE STATES OF MICHIGAN, NEW YORK,
PENNSYLVANIA, OREGON, UTAH, WASHINGTON, AND WISCONSIN
0
1. The authority citation for 7 CFR part 930 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
0
2. Section 930.200 is revised to read as follows:
Sec. 930.200 Assessment rate.
On and after October 1, 2022, the assessment rate imposed on
handlers shall be $0.0075 per pound of tart cherries grown in the
production area and utilized in the production of tart cherry products.
Included in this rate is $0.0055 per pound of tart cherries to cover
the cost of the research and promotion program and $0.002 per pound of
tart cherries to cover administrative expenses.
Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2023-12770 Filed 6-14-23; 8:45 am]
BILLING CODE P
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