81 FR 92559 - Almonds Grown in California; Increased Assessment Rate
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service Federal Register Volume 81, Issue 244 (December 20, 2016)
Agricultural Marketing Service
Federal Register Volume 81, Issue 244 (December 20, 2016)
| Page Range | 92559-92564 | |
| FR Document | 2016-30264 |
[Federal Register Volume 81, Number 244 (Tuesday, December 20, 2016)] [Rules and Regulations] [Pages 92559-92564] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-30264] ----------------------------------------------------------------------- DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Part 981 [Doc. No. AMS-SC-16-0045; SC16-981-2 FR] Almonds Grown in California; Increased Assessment Rate AGENCY: Agricultural Marketing Service, USDA. ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: This rule implements a recommendation from the Almond Board of California (Board) for an increase of the assessment rate established for the 2016-17 through the 2018-19 crop years from $0.03 to $0.04 per pound of almonds handled under the marketing order (order). Of the $0.04 per pound assessment, 60 percent (or $0.024 per pound) is available as credit-back for handlers who conduct their own promotional activities. The assessment rate will return to $0.03 for the 2019-20 and subsequent crop years, and the amount available for handler credit- back will return to $0.018 per pound (60 percent). The Board locally administers the order and is comprised of growers and handlers of almonds grown in California. Assessments upon almond handlers are used by the Board to fund reasonable and necessary expenses of the program. The crop year began on August 1 and ends on July 31. The $0.04 assessment rate will remain in effect until July 31, 2019. Beginning August 1, 2019, the assessment rate will return to $0.03 and will remain in effect indefinitely unless modified, suspended, or terminated. Two comments period were provided to interested individuals. Comments will be addressed later in this document. DATES: Effective December 21, 2016. FOR FURTHER INFORMATION CONTACT: Marketing Specialist Andrea Ricci, or Regional Director Jeffrey Smutny, California Marketing Field Office, Marketing Order and Agreement Division, Specialty Crops Program, [[Page 92560]] AMS, USDA; Telephone: (559) 487-5901, Fax: (559) 487-5906, or Email: with [email protected] or [email protected]. Small businesses may request information on complying with this regulation by contacting Richard Lower, Marketing Order and Agreement Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, Fax: (202) 720-8938, or Email: [email protected]. SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order No. 981, as amended (7 CFR part 981), regulating the handling of almonds 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 Orders 12866, 13563, and 13175. This rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the marketing order now in effect, California almond 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 almonds beginning on August 1, 2016, through July 31, 2019. Beginning August 1, 2019, the assessment rate will return to $0.03 and will remain in effect indefinitely unless modified, 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 rule increases the assessment rate established for the Board for the 2016-17 through 2018-19 crop years from $0.03 to $0.04 per pound of almonds received. Of the $0.04 per pound assessment, 60 percent (or $0.024 per pound) is available as credit-back for handlers who conduct their own promotional activities. The assessment rate will return to $0.03 for the 2019-20 and subsequent crop years, and the amount available for handler credit-back will return to $0.018 per pound (60 percent). The California almond 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 growers and handlers of California almonds. They are familiar with the Board's needs and with the costs for goods and services in their local area and thus are in a position to formulate an appropriate budget and assessment rate. The assessment rate is formulated and discussed in a public meeting. Therefore, all directly affected persons have an opportunity to participate and provide input. For the 2005-06 and subsequent crop years, the Board recommended, and USDA approved, an assessment rate of $0.03 per pound that would continue in effect from crop year to crop year unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the Board or other information available to USDA. Of the $0.03 per pound assessment, 60 percent ($0.018) per pound was made available as credit-back for handlers who conducted their own promotional activities. The Board met on April 12, 2016, and unanimously recommended 2016- 17 expenditures of $69,897,626 and an assessment rate of $0.04 per pound of almonds received. In comparison, last year's budgeted expenditures were $58,998,976. The assessment rate of $0.04 is $0.01 higher than the rate currently in effect, and the credit-back portion of the assessment rate ($0.024 per pound) is $0.006 more than the credit-back portion currently in effect. The Board estimates a production increase of thirty percent, or 600 million pounds, by the 2019-20 crop year. This increase is nearly as much as is consumed by the industry's largest market. Due to the size of the increase in forecasted production, the Board believes that increased market development projects and new marketing programs are required to successfully market the additional supply. Accordingly, the Board has recommended a new ``Nut of Choice'' marketing program. The Board also anticipates needing additional funding for the industry's new ``Crop of Choice'' research program, as well as additional research to address concerns such as changing water supply and quality systems; air quality and how it relates to harvesting, pesticide, and energy use; and bee health. The three-year higher assessment rate is needed to fund the increase in marketing and research activities. The Board anticipates that by the 2019-20 crop year, the increase in production assessed at the reinstated $0.03 per pound rate should generate sufficient revenue to cover the anticipated expenditures at that time. Therefore, beginning August 1, 2019, the assessment rate will return to $0.03 per pound. The following table compares major budget expenditures recommended by the Board for the 2015-16 and 2016-17 crop years: ------------------------------------------------------------------------ Budget expense categories 2015-16 2016-17 ------------------------------------------------------------------------ Operations Expenses..................... $ 7,904,000 $ 8,404,000 Board Accelerated Innovation Management 1,500,000 1,000,000 (AIM) Initiatives...................... Crop of Choice Initiatives.............. 0 5,625,000 Reputation Management................... 1,826,350 2,000,000 Production Research..................... 1,843,331 1,843,331 Environmental Research.................. 1,039,790 1,039,790 Scientific Affairs/Nutrition............ 1,640,000 1,640,000 Global Market Development............... 38,583,756 38,583,756 Nut of Choice Initiatives............... 0 5,100,000 Technical & Regulatory Affairs.......... 1,045,500 1,045,500 Industry Services....................... 2,436,220 2,436,220 Almond Quality & Food Safety............ 790,800 790,800 Corporate Technology.................... 389,229 389,229 ------------------------------------------------------------------------ [[Page 92561]] The assessment rate recommended by the Board was derived by considering the anticipated 30-percent production increase in the next three years, anticipated expenditures plus additional program expenses, current production level, and maintaining adequate operating reserve funds. In its recommendation, the Board utilized an estimate of 1,835,290,000 pounds of assessable almonds for the 2016-17 crop year. If realized, this should provide estimated assessment revenue of $62,262,213, which reflects credit-back reimbursements and organic exemptions. In addition, it is anticipated that $20,907,722 will be provided by other sources, including interest income, Market Access Program (MAP) funds, and operating reserve funds. When combined, revenue from these sources should be adequate to cover budgeted expenses. Section 981.81 of the order authorizes the Board to maintain operating reserve funds consisting of an administrative-research portion and a marketing promotion portion, and states that the amount allocated to each portion shall not exceed six months' budgeted expenses for that activity area. Funds in the reserve at the end of the 2016-17 crop year are estimated to be approximately $16,581,222, well within the amount permitted by the order. A proposed rule concerning this action was published in the Federal Register on July 18, 2016 (81 FR 46616). A 15-day comment period ending August 2, 2016, was provided for interested persons to respond to the proposal. One commenter raised concern that notification of the proposal was not promptly circulated within industry and asked for an extension of the comment period. After reviewing the request, USDA published a notice reopening the comment period for an additional 30 days in the Federal Register on September 12, 2016 (81 FR 62668). All comments will be addressed further in this document. The assessment rate established in this rule will continue in effect until July 31, 2019. Beginning August 1, 2019, the assessment rate will return to $0.03 and 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 will be in effect for a specified period, the Board will continue to meet prior to or during each crop 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 would 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 2016-17 budget and those for subsequent crop years would be reviewed and, as appropriate, approved by USDA. 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, 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 6,800 almond growers in the production area and approximately 100 handlers subject to regulation under the marketing order. Small agricultural producers are defined by the Small Business Administration (SBA) 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 $7,500,000 (13 CFR 121.201). The National Agricultural Statistics Service (NASS) reported in its 2012 Agricultural Census that there were 6,841 almond farms in the production area (California), of which 6,204 had bearing acres. The following computation provides an estimate of the proportion of producers (farms) and agricultural service firms (handlers) that would be considered small under the SBA definitions. The NASS Census data indicates that out of the 6,204 California farms with bearing acres of almonds, 4,471 (72 percent) have fewer than 100-bearing acres. In its most recently reported crop year (2015), NASS reported an average yield of 2,130 pounds per acre and a season average grower price of $2.84 per pound. A 100-acre farm with an average yield of 2,130 pounds per acre would produce about 213,000 pounds of almonds. At $2.84 per pound, that farm's production would be valued at $604,920. Because the Census of Agriculture indicates that the majority of California's almond farms are smaller than 100 acres, it could be concluded that the majority of growers had annual receipts from the sale of almonds in 2015 of less than $604,920, well below the SBA threshold of $750,000. Thus, over 70 percent of California's almond growers would be considered small growers according to SBA's definition. According to information supplied by the Board, approximately 30 percent of California's almond handlers shipped almonds valued under $7,500,000 during the 2014-15 crop year and would therefore be considered small handlers according to the SBA definition. This rule increases the assessment rate collected from handlers for the 2016-17 through the 2018-19 crop years from $0.03 to $0.04 per pound of almonds received. Of the $0.04 per pound assessment, 60 percent (or $0.024 per pound) is available as credit-back for handlers who conduct their own promotional activities, consistent with Sec. 981.441 of the order's regulations and subject to Board approval. The Board unanimously recommended 2016-17 expenditures of $69,897,626 and an assessment rate of $0.04 per pound of almonds received. The assessment rate of $0.04 is $0.01 higher than the 2015-16 rate, and the credit-back portion of $0.024 per pound is $0.006 higher than the current credit-back portion of $0.018. The quantity of assessable almonds for the 2016-17 crop year is estimated at 1,835,290,000 pounds. This should provide estimated assessment revenue of $62,262,213, which reflects credit-back reimbursements and organic exemptions. In addition, it is anticipated that $20,907,722 will be provided by other sources, including interest income, MAP funds, and operating reserve funds. When combined, revenue from these sources should be adequate to cover budgeted expenses. The major expenditures recommended by the Board for the 2016-17 crop year include $8,404,000 for Operations Expenses, $1,000,000 for Board AIM Initiatives, $5,625,000 for Crop of Choice Initiatives, $2,000,000 for Reputation Management, $1,843,331 for Production Research, $1,039,790 for Environmental Research, $1,640,000 for Scientific Affairs/Nutrition, $38,583,756 for Global Market Development, $5,100,000 for Nut of Choice Initiatives, $1,045,500 for Technical & Regulatory Affairs, $2,436,220 for Industry [[Page 92562]] Services, $790,800 for Almond Quality & Food Safety, and $389,229 for Corporate Technology. Budgeted expenses for these items in 2015-16 were $7,904,000 for Operations Expenses, $1,500,000 for Board AIM Initiatives, $0 for Crop of Choice Initiatives, $1,826,350 for Reputation Management, $1,843,331 for Production Research, $1,039,790 for Environmental Research, $1,640,000 for Scientific Affairs/Nutrition, $38,583,756 for Global Market Development, $0 for Nut of Choice Initiatives, $1,045,500 for Technical & Regulatory Affairs, $2,436,220 for Industry Services, $790,800 for Almond Quality & Food Safety, and $389,229 for Corporate Technology. The Board estimates a production increase of 30 percent, or 600 million pounds, by the 2019-20 crop year. This increase is nearly as large as the current consumption of the industry's largest market. Increased market development investment as well as new marketing programs will be required to successfully market the additional supply. Additional investment in research is also needed to address concerns such as changing water supply and quality systems; air quality and how it relates to harvesting, pesticide, and energy use; and bee health. Accordingly, the three-year higher assessment rate is needed to fund the Board's new Nut of Choice marketing program and Crop of Choice research activities. The Board anticipates that by the 2019-20 crop year, the increased production assessed at the reinstated $0.03 per pound rate should generate sufficient revenue to cover the anticipated expenditures at that time. Prior to arriving at this budget and assessment rate, the Board held a strategic planning session in February 2016. The Board also considered recommendations made from its various committees, including the Global Market Development Committee, Production Research Committee, and Environmental Committee. Alternative expenditure levels were discussed, based upon the relative value of various activities to the almond industry. Ultimately, the Board unanimously determined that 2016-17 expenditures of $69,897,626 were appropriate and that the recommended assessment rate, plus income from other sources and operation reverse funds, would generate sufficient revenue to meet its expenses. A review of historical information and preliminary information pertaining to the upcoming crop year indicates that the grower price for the 2016-17 season could range between $4.00 and $2.84 per pound of almonds. Therefore, the estimated assessment revenue for the 2016-17 crop year (disregarding any amounts credited pursuant to Sec. 981.41 and Sec. 981.441) as a percentage of total grower revenue could range between 1.00 and 1.41 percent, respectively. This action increases 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 marketing order. In addition, the Board's meeting was widely publicized throughout the California almond industry, and all interested persons were invited to attend the meeting and participate in Board deliberations on all issues. Like all Board meetings, the April 12, 2016, 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 Office of Management and Budget (OMB) and assigned OMB No. 0581-0178 (Vegetable and Specialty Crops.) No changes in those requirements as a result of this action are necessary. 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 California almond 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 the internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes. As previously noted, a proposed rule concerning this action was published providing a 15-day comment period for interested persons to respond to the proposal. In addition, on September 12, 2016, the comment period was reopened for an additional 30 days. Copies of the proposed rule were provided to all almond handlers. Finally, the proposal was made available through the internet by USDA and the Office of the Federal Register. A total of forty-six comments were received. Twenty-eight supported and eighteen opposed the proposal. Of the eighteen in opposition, three were grower/handlers, eleven were growers, two individuals were from outside of the production area, and two individuals did not identify themselves. Of those who supported the proposal, twenty-three were growers. The majority of the commenters in support of the proposal stated that increasing the assessment rate now was necessary to fund market development programs and new marketing and promotion activities to create demand prior to the onset of the increased production. Commenters noted that the industry is aware of the increasing almond acreage and the need to invest prior to the larger crop materializing. The commenters also noted that the three-year ``sunset'' feature will ensure that once the additional 30 percent increase in production is realized, the assessment rate will return to the current $0.03 rate. One commenter noted the need to develop demand for the increased supplies to ensure the carry-over inventory is kept near zero each year, which will help stabilize prices at the grower level and negate the effect of the increased assessment. Another commenter noted that the recent volatility in almond prices illustrates how critically important it is to make investments now. Several commenters stated the Board has had proven success in the areas of marketing and promotion; nutrition, environmental, and production research; and grower outreach; and they are pleased overall with the work of the Board. Commenters also expressed the need for continued investment in research, specifically in areas that will provide resources for growers to continue to remain profitable in the face of continued challenges. One commenter stated that programs such as the almond order are a good example of a public/private partnership which has worked for the consumer, farmer, and food safety while expanding markets around the world. The majority of commenters in opposition of the proposal stated the increase of production over the next several years should generate adequate income to fund Board programs. In the development of the budget, the Board contemplated the production forecast of a 30 percent increase in the next three years. The Board anticipates the 2016-17 crop year production at 1.835 billion pounds, 2017-18 crop year production at 2.184 billion pounds, 2018-19 crop year production at 2.277 billion pounds, and 2019-20 crop year production at 2.354 billion pounds. The Board discussed the need to build demand before this increased production is realized. The Board strongly believes [[Page 92563]] not doing so in advance will negatively impact prices. The Board is concerned that without market expansion and new market development programs, the anticipated 600 million pounds' increase in production will lead to oversupply. This year, after Committee input and Board strategic planning, the Board decided an increase in the assessment rate was necessary. The increase in revenue will be used to fund new marketing programs and increase the budgets of existing market research and development projects. At the $0.03 assessment rate, the Board determined funding generated would not be adequate to cover anticipated expenses necessary to establish outlets for the increased production. In its recommendation to have the assessment rate revert back to $0.03 after three years, the Board considered current program needs at the current production level against the anticipated production in the next three years, while recognizing that the increased production will generate adequate income once realized. In its discussion, the Board also considered the time and resources needed to develop new marketing and promotion programs. The Global Market Demand Committee developed a comprehensive marketing plan, which includes the Nut of Choice program. The plan encompasses expanding the Germany and Japan markets by increasing funding in order to increase impressions; accelerating momentum by increasing budgets and impressions for the U.S./Canada, France, United Kingdom, India, and South Korea markets; maintaining budget levels in the China market and Global Initiative; and allocating spending for one to two additional exploratory markets (i.e., Mexico, Indonesia, and Saudi Arabia regions). Prior to the Committee recommending the marketing plan, it reviewed key factors for each market, including market attractiveness, total market demand forecast, market outlook, opportunities and challenges, historical spending data, and low-end and high-end demand potential. The Board also determined that with the current environment of the agriculture industry, investing in new and innovative techniques would be key to the viability of the almond industry moving forward. Key areas of focus are water management, food safety, production, pest management, pollination, biomass, and soil health. Additionally, several commenters stated that for growers, with the decline in prices and the rising production costs, it is difficult to remain profitable. The Board has had considerable strategic discussions about the continued challenges facing growers, including rising production costs, water availability, and regulatory impacts, and ways to address the issues. As a result, a substantial portion of the revenue generated by the increased assessment rate is designated for research. More specifically, the newly established nine capabilities of the Crop of Choice Program will fund research at a level of $5.625 million. Areas of focus include Irrigation and Nutrients; Orchard, Tree, Rootstock; Harvesting; Value-Added Orchard Utilization; Soil Health Management; Pest Management; Food Safety; Pollination; Energy; and the Sustainability Program update and outreach. This investment is intended to develop new and innovative techniques to help the almond industry continue to remain profitable. In addition, the increased investment in market development and new marketing programs is intended to create demand to absorb the anticipated increase in production. In turn, these activities should stabilize prices. Three commenters raised concern that only 23 percent of the additional funding generated is allocated to direct marketing. The commenters further stated that if at least 80 percent of the additional funding was not allocated to direct marketing and promotion activities, they were opposed to the increase. The Board utilizes a comprehensive strategy that includes a balanced approach for research and marketing and promotion activities to sustain and develop market outlets. The Board-funded research plays an integral part in supporting the almond industry, which continues to face new challenges as the landscape of agriculture changes. The Board triennially holds strategic planning retreats to develop tactics that directly address the needs of the almond industry as well as ever-changing market demands. The Board recommends a budget each year utilizing recommendations made by each Committee. Committees are comprised of industry members and meet regularly to deliberate and prioritize programs. Marketing and promotion has been set as a priority, and recommendations have been made to increase spending. Along with the marketing activities, the Board has a robust research program. Nutrition, production, environmental, and food safety research has been utilized by the marketing programs to better position almonds in the marketplace. Specifically, in the past several years with the drought in California, the almond industry came under media fire for its water use. Through the research programs funded by the Board, the marketing team was able to provide data regarding almonds and water use. This research was pivotal in transitioning the conversation from negative to neutral or positive. Additionally, almonds have a qualified heart-healthy claim, which can be directly linked to the research funded as part of the nutrition research program. The almond industry's ability to utilize the heart-health claim is a vital part of the marketing program. Further, the Board is celebrating the tenth year of its California Almond Sustainability Program. As consumer demand continues to shift towards products that are sustainable, the Sustainability Program has been a great resource to the marketing program to provide data regarding the sustainability of the almond industry. The research and marketing and promotion activities work interdependently, ensuring the viability of the industry. Two commenters stated an assessment rate increase should be approved by growers prior to implementation. Two of the commenters questioned the outreach to the growing community, stating growers should have a larger role in the discussion. One of the commenters requested a grower referendum prior to implementation of an assessment rate change. All Board and Committee meetings are open to the public, allowing directly affected persons and other interested parties an opportunity to participate and provide input. On April 14, 2016, the Board sent a memo to almond handlers and growers as part of its mailer, providing notice of the Board's unanimous recommendation to increase the assessment rate. The Board also included an article regarding the recommendation in the April California Almonds Outlook e-newsletter. In addition, two comment periods were provided, which gave interested parties the opportunity to comment on the recommended proposal. The Board included notice of the comment periods in its industry e- newsletters, on its Web site (specifically, on the grower site), on its social media platforms, and announced this information at its Committee and Board meetings. Notices of the comment periods were also made available on the USDA Web site. In response to the request to hold a grower referendum, under the California almond marketing order, referenda are conducted every five years to ascertain whether continuation of the order is favored by growers. The last continuance referendum was held in 2014, and results indicated continued [[Page 92564]] grower support for the order. Furthermore, annual budget and assessment rate recommendations are among the many duties the Board, which is comprised of grower and handler members, is required to perform as authorized under the order. One commenter raised concern that the additional funding will be used to increase the size and salaries of the organization, which will lead to the continuation of increasing the assessment rate year after year. Also, the commenter expressed concerns about transparency and availability of financial information. The majority of the funds generated by the increased assessment are allotted to research programs and marketing and promotion activities. For the past several years, operating expenses have fluctuated between 12 percent and 15 percent of the total budget. In the recommended budget for the 2016-17 crop year, operating expenses are approximately 12 percent of the total budget. In addition, in its unanimous recommendation, the Board stipulated that the increased assessment rate continue only through the 2018-19 crop year. The assessment rate will revert to the current $0.03 rate beginning August 1, 2019. All Board and Committee meetings are open to the public. On a quarterly basis, the Board reviews and approves financial statements at its public meetings. Those documents are made available to the public, and interested persons are encouraged to participate in all meetings. One commenter expressed concern about the order's credit-back program and that it is not advantageous to non-branded handlers. While credit-back is associated with the assessment rate, the Board did not discuss the program as part of this proposal. This rule does not modify the percentage rate available for handler credit-back. One commenter raised concern that the Nut of Choice and Crop of Choice programs appear to be an effort to improve the image of almonds at the expense of other California commodities. USDA has a strict policy against any marketing order boards, committees, or councils disparaging other commodities. USDA reviews all marketing and communication materials prior to publication to ensure that policy is being followed. Accordingly, no changes will be made to the rule as proposed, 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: http://www.ams.usda.gov/rules-regulations/moa/small-businesses. 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 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. It is further found that good cause exists for not postponing the effective date of this rule until 30 days after publication in the Federal Register (5 U.S.C. 553) because the 2016-17 crop year began August 1, 2016, and the marketing order requires that the rate of assessment for each crop year apply to all assessable almonds handled during such crop year. Further, handlers are aware of this rule, which was recommended at a public meeting. Also, a 15-day comment period was provided for in the proposed rule, followed by an additional 30-day comment period. List of Subjects in 7 CFR Part 981 Almonds, Marketing agreements, Nuts, Reporting and recordkeeping requirements. For the reasons set forth in the preamble, 7 CFR part 981 is amended as follows: PART 981--ALMONDS GROWN IN CALIFORNIA 0 1. The authority citation for 7 CFR part 981 continues to read as follows: Authority: 7 U.S.C. 601-674. 0 2. Section 981.343 is revised to read as follows: Sec. 981.343 Assessment rate. For the period August 1, 2016, through July 31, 2019, the assessment rate shall be $0.04 per pound for California almonds. Of the $0.04 assessment rate, 60 percent per assessable pound is available for handler credit-back. On and after August 1, 2019, an assessment rate of $0.03 per pound is established for California almonds. Of the $0.03 assessment rate, 60 percent per assessable pound is available for handler credit-back. Dated: November 12, 2016. Elanor Starmer, Administrator, Agricultural Marketing Service. [FR Doc. 2016-30264 Filed 12-19-16; 8:45 am] BILLING CODE P
![Federal Register / Vol. 81, No. 244 / Tuesday, December 20, 2016 / Rules and Regulations 92559
for interested persons to respond to the on any proposed assessment rules. All § 923.236 Assessment rate.
proposal. comments are considered prior to On and after April 1, 2016, an
One comment was received during finalization of a proposed rule. Once assessment rate of $0.25 per ton is
the comment period in response to the established, assessment rates remain in established for the Washington Cherry
proposal. The commenter was effect until modified by USDA upon the Marketing Committee.
concerned about the impact that the recommendation of the Committee. Dated: December 12, 2016.
increased assessment rate would have Accordingly, no changes will be made
on growers. The commenter also Bruce Summers,
to the rule as proposed, based on the Associate Administrator, Agricultural
questioned why the assessment is only comment received.
applied to certain counties in Marketing Service.
Washington, and not others. In addition, A small business guide on complying [FR Doc. 2016–30302 Filed 12–19–16; 8:45 am]
the commenter stated that the opinions with fruit, vegetable, and specialty crop BILLING CODE 3410–02–P
of sweet cherry growers and handlers marketing agreements and orders may
should be taken into consideration be viewed at: http://www.ams.usda.gov/
when establishing assessment rates, and rules-regulations/moa/small-businesses. DEPARTMENT OF AGRICULTURE
that there should be flexibility during Any questions about the compliance
guide should be sent to Richard Lower Agricultural Marketing Service
the transitional period when a new
assessment rate is implemented. Lastly, at the previously mentioned address in
the FOR FURTHER INFORMATION CONTACT 7 CFR Part 981
the commenter offered
recommendations with regards to the section. [Doc. No. AMS–SC–16–0045; SC16–981–2
assessment rate establishment process After consideration of all relevant FR]
and took exception to the indefinite material presented, including the
period that assessment rates are in information and recommendation Almonds Grown in California;
effect. submitted by the Committee and other Increased Assessment Rate
Under the order, it is handlers that are available information, it is hereby found AGENCY: Agricultural Marketing Service,
assessed, not growers. As such, growers that this rule, as hereinafter set forth, USDA.
will not be directly impacted by this will tend to effectuate the declared ACTION: Final rule.
action. However, as mentioned policy of the Act.
previously in this rule, some of the Pursuant to 5 U.S.C. 553, it also found SUMMARY: This rule implements a
additional costs to handlers as a result and determined that good cause exists recommendation from the Almond
of this action may be passed on to for not postponing the effective date of Board of California (Board) for an
growers. Nevertheless, USDA believes this rule until 30 days after publication increase of the assessment rate
that such additional costs will be offset established for the 2016–17 through the
in the Federal Register because: (1) The
by the benefits derived by the operation 2018–19 crop years from $0.03 to $0.04
2016–2017 fiscal period began on April
of the order. per pound of almonds handled under
Furthermore, the commenter’s request 1, 2016, and the order requires that the
assessment rate for each fiscal period the marketing order (order). Of the $0.04
for clarity with regards to why only per pound assessment, 60 percent (or
certain counties are covered by this apply to all assessable Washington
cherries handled during such fiscal $0.024 per pound) is available as credit-
regulatory change is addressed in the back for handlers who conduct their
order’s provisions. Section 923.4 defines period; (2) the Committee needs to have
sufficient funds to pay its expenses, own promotional activities. The
the order’s production area as the
which are incurred on a continuous assessment rate will return to $0.03 for
counties of Okanogan, Chelan, Kittitas,
basis; (3) handlers have already shipped the 2019–20 and subsequent crop years,
Yakima, Klickitat in the State of
Washington cherries from the 2016 and the amount available for handler
Washington and all of the counties in
crop; and (4) handlers are aware of this credit-back will return to $0.018 per
Washington lying east thereof. Only
action, which was unanimously pound (60 percent). The Board locally
handlers who handle cherries grown
recommended by the Committee at a administers the order and is comprised
within the specific production area are
public meeting and is similar to other of growers and handlers of almonds
subject to assessment.
Lastly, the commenter’s thoughts assessment rate actions issued in past grown in California. Assessments upon
regarding the assessment rate years. almond handlers are used by the Board
establishment process and effective to fund reasonable and necessary
List of Subjects in 7 CFR Part 923 expenses of the program. The crop year
period have been previously addressed
in this rule. The Committee meets prior Cherries, Marketing agreements, began on August 1 and ends on July 31.
to, or during, each fiscal period to Reporting and recordkeeping The $0.04 assessment rate will remain
recommend a budget of expenses and requirements. in effect until July 31, 2019. Beginning
consider recommendations for August 1, 2019, the assessment rate will
For the reasons set forth in the return to $0.03 and will remain in effect
modification of the assessment rate. The preamble, 7 CFR part 923 is amended as
dates and times of Committee meetings indefinitely unless modified,
follows: suspended, or terminated. Two
are available from the Committee or
USDA. Committee meetings are open to comments period were provided to
PART 923—CHERRIES GROWN IN
the public and interested persons may interested individuals. Comments will
DESIGNATED COUNTIES IN
express their views at these meetings. be addressed later in this document.
WASHINGTON
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Meetings are widely publicized DATES: Effective December 21, 2016.
throughout the Washington cherry ■ 1. The authority citation for 7 CFR FOR FURTHER INFORMATION CONTACT:
industry and all interested persons are part 923 continues to read as follows: Marketing Specialist Andrea Ricci, or
invited to attend the meetings and Regional Director Jeffrey Smutny,
Authority: 7 U.S.C. 601–674.
participate in Committee deliberations California Marketing Field Office,
on all issues. In addition, interested ■ 2. Section 923.236 is revised to read Marketing Order and Agreement
persons are invited to submit comments as follows: Division, Specialty Crops Program,
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![92564 Federal Register / Vol. 81, No. 244 / Tuesday, December 20, 2016 / Rules and Regulations
grower support for the order. Any questions about the compliance DEPARTMENT OF AGRICULTURE
Furthermore, annual budget and guide should be sent to Richard Lower
assessment rate recommendations are at the previously-mentioned address in Agricultural Marketing Service
among the many duties the Board, the FOR FURTHER INFORMATION CONTACT
which is comprised of grower and section. 7 CFR Part 987
handler members, is required to perform After consideration of all relevant [Doc. No. AMS–SC–16–0084; SC16–987–1
as authorized under the order. material presented, including the FIR]
One commenter raised concern that information and recommendation
the additional funding will be used to submitted by the Board and other Domestic Dates Produced or Packed in
increase the size and salaries of the available information, it is hereby found Riverside County, California;
organization, which will lead to the that this rule, as hereinafter set forth, Decreased Assessment Rate
continuation of increasing the will tend to effectuate the declared
assessment rate year after year. Also, the AGENCY: Agricultural Marketing Service,
policy of the Act. USDA.
commenter expressed concerns about
transparency and availability of It is further found that good cause ACTION: Affirmation of interim rule as
financial information. The majority of exists for not postponing the effective final rule.
the funds generated by the increased date of this rule until 30 days after
assessment are allotted to research publication in the Federal Register (5 SUMMARY: The Department of
programs and marketing and promotion U.S.C. 553) because the 2016–17 crop Agriculture (USDA) is adopting, as a
activities. For the past several years, year began August 1, 2016, and the final rule, without change, an interim
operating expenses have fluctuated marketing order requires that the rate of rule that implemented a
between 12 percent and 15 percent of assessment for each crop year apply to recommendation from the California
the total budget. In the recommended all assessable almonds handled during Date Administrative Committee
budget for the 2016–17 crop year, such crop year. Further, handlers are (committee) to decrease the assessment
operating expenses are approximately aware of this rule, which was rate established for the committee for
12 percent of the total budget. In recommended at a public meeting. Also, the 2016–17 and subsequent crop years
addition, in its unanimous a 15-day comment period was provided from $0.10 to $0.05 per hundredweight
recommendation, the Board stipulated for in the proposed rule, followed by an of dates handled under the marketing
that the increased assessment rate additional 30-day comment period. order (order). The committee locally
continue only through the 2018–19 crop List of Subjects in 7 CFR Part 981 administers the order and is comprised
year. The assessment rate will revert to of producers and handlers of dates
the current $0.03 rate beginning August Almonds, Marketing agreements, operating within the area of production.
1, 2019. All Board and Committee Nuts, Reporting and recordkeeping The interim rule was necessary to allow
meetings are open to the public. On a requirements. the committee to reduce its financial
quarterly basis, the Board reviews and For the reasons set forth in the reserve while still providing adequate
approves financial statements at its preamble, 7 CFR part 981 is amended as funding to meet program expenses.
public meetings. Those documents are follows: DATES: Effective December 21, 2016.
made available to the public, and FOR FURTHER INFORMATION CONTACT:
interested persons are encouraged to PART 981—ALMONDS GROWN IN Terry Vawter, Senior Marketing
participate in all meetings. CALIFORNIA Specialist Jeffrey Smutny, Regional
One commenter expressed concern Director, California Marketing Field
about the order’s credit-back program ■ 1. The authority citation for 7 CFR Office, Marketing Order and Agreement
and that it is not advantageous to non- part 981 continues to read as follows: Division, Specialty Crops Program,
branded handlers. While credit-back is AMS, USDA; Telephone: (559) 487–
Authority: 7 U.S.C. 601–674.
associated with the assessment rate, the 5901, Fax: (559) 487–5906, or Email:
Board did not discuss the program as ■ 2. Section 981.343 is revised to read Terry.Vawter@ams.usda.gov or
part of this proposal. This rule does not as follows: Jeffrey.Smutny@ams.usda.gov.
modify the percentage rate available for Small businesses may obtain
handler credit-back. § 981.343 Assessment rate.
information on complying with this
One commenter raised concern that For the period August 1, 2016, regulation by viewing a guide at the
the Nut of Choice and Crop of Choice through July 31, 2019, the assessment following Web site: http://
programs appear to be an effort to rate shall be $0.04 per pound for www.ams.usda.gov/rules-regulations/
improve the image of almonds at the California almonds. Of the $0.04 moa/small-businesses; or by contacting
expense of other California assessment rate, 60 percent per Richard Lower, Marketing Order and
commodities. USDA has a strict policy assessable pound is available for Agreement Division, Specialty Crops
against any marketing order boards, handler credit-back. On and after Program, AMS, USDA, 1400
committees, or councils disparaging August 1, 2019, an assessment rate of Independence Avenue SW., STOP 0237,
other commodities. USDA reviews all $0.03 per pound is established for Washington, DC 20250–0237;
marketing and communication materials California almonds. Of the $0.03 Telephone: (202) 720–2491, Fax: (202)
prior to publication to ensure that assessment rate, 60 percent per 720–8938, or Email: Richard.Lower@
policy is being followed. assessable pound is available for ams.usda.gov.
Accordingly, no changes will be made handler credit-back.
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to the rule as proposed, based on the SUPPLEMENTARY INFORMATION: This rule
comments received. Dated: November 12, 2016. is issued under Marketing Agreement
A small business guide on complying Elanor Starmer, and Order No. 987, both as amended (7
with fruit, vegetable, and specialty crop Administrator, Agricultural Marketing CFR part 987), regulating the handling
marketing agreements and orders may Service. of domestic dates produced or packed in
be viewed at: http://www.ams.usda.gov/ [FR Doc. 2016–30264 Filed 12–19–16; 8:45 am] Riverside County, California, hereinafter
rules-regulations/moa/small-businesses. BILLING CODE P referred to as the ‘‘order.’’ The order is
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Document Created: 2018-02-14 09:09:44
Document Modified: 2018-02-14 09:09:44
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Rules and Regulations | |
| Action | Final rule. | |
| Dates | Effective December 21, 2016. | |
| Contact | Marketing Specialist Andrea Ricci, or Regional Director Jeffrey Smutny, California Marketing Field Office, Marketing Order and Agreement Division, Specialty Crops Program, AMS, USDA; Telephone: (559) 487-5901, Fax: (559) 487-5906, or Email: with [email protected] or [email protected] | |
| FR Citation | 81 FR 92559 | |
| CFR Associated | Almonds; Marketing Agreements; Nuts and Reporting and Recordkeeping Requirements |
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