E9-23152. Nectarines and Peaches Grown in California; Decreased Assessment Rates

AGENCY:

Agricultural Marketing Service, USDA.

ACTION:

Affirmation of interim final rule as final rule.

SUMMARY:

The Department of Agriculture (USDA) is adopting, as a final rule, without change, an interim final rule that decreased the assessment rates established for the Nectarine Administrative Committee and the Peach Commodity Committee (Committees) for the 2009-10 and subsequent fiscal periods. The Nectarine Administrative Committee (NAC) program decreased its assessment rate from $0.06 to $0.0175 per 25-pound container or container equivalent of nectarines handled. The Peach Commodity Committee (PCC) program decreased its assessment rate from $0.06 to $0.0025 per 25-pound container or container equivalent of peaches handled. The Committees locally administer the marketing orders for nectarines and peaches grown in California (order). The interim final rule was necessary to align the Committees' expected revenue with decreases in its proposed budget for the 2009-10 fiscal period, which began March 1, 2009.

DATES:

Effective Date: Effective September 26, 2009.

FOR FURTHER INFORMATION CONTACT:

Jennifer Robinson, Marketing Specialist, or Kurt J. Kimmel, Regional Manager, California Marketing Field Office, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA; Telephone: [phone], Fax: [phone]; or E-mail: [e-mail] or [e-mail].

Small businesses may obtain information on complying with this and other marketing order regulations by viewing a guide at the following Web site: http://www.ams.usda.gov/​AMSv1.0/​ams.fetchTemplateData.do?​template=​TemplateN&​page=​MarketingOrdersSmallBusinessGuide; or by contacting Jay Guerber, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC 20250-0237; Telephone: [phone], fax: [phone], or e-mail: [e-mail].

SUPPLEMENTARY INFORMATION:

This rule is issued under Marketing Order Nos. 916 and 917, both as amended (7 CFR parts 916 and 917), regulating the handling of nectarines and peaches grown in California, respectively, hereinafter referred to as the “orders.” The orders are effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.”

USDA is issuing this rule in conformance with Executive Order 12866.

Under the orders, California nectarine and peach handlers are subject to assessments, which provide funds to administer the orders. Assessment rates issued under the orders are intended to be the applicable to all assessable nectarines and peaches for the entire fiscal period, and continue indefinitely until amended, suspended, or terminated. The Committee's fiscal period begins on March 1, and ends on the last day of February.

In an interim final rule published in the Federal Register on June 18, 2009, and effective on June 19, 2009 (74 FR 28869, Doc. No. AMS-FV-09-0013; FV09-916/917-2 IFR), §§ 916.234 and 917.258 were amended by decreasing the assessment rates established for the NAC program for the 2009-10 and subsequent fiscal periods from $0.06 to $0.0175 per 25-pound container or container equivalent of nectarines and for the PCC program for the 2009-10 and subsequent fiscal periods from $0.06 to $0.0025 per 25-pound container or container equivalent of peaches. Decreases in the per-container assessment rates were possible due to significant decreases in budgeted administrative and promotional expenses for 2009.

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 business subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and the rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf. Thus, both statutes have small entity orientation and compatibility.

There are approximately 120 California nectarine and peach handlers subject to regulation under the orders covering nectarines and peaches grown in California, and about 550 producers of these fruits in California. Small agricultural service firms, which include handlers, are defined by the Small Business Administration (SBA) (13 CFR 121.201) as those whose annual receipts are less than $7,000,000. Small agricultural producers are defined by the SBA as those having annual receipts of less than $750,000. A majority of these handlers and producers may be classified as small entities.

The Committees' staff has estimated that there are fewer than 30 handlers in the industry who would not be considered small entities. For the 2008 season, the Committees' staff estimated that the average handler price received was $9.00 per container or container equivalent of nectarines or peaches. A handler would have to ship at least 777,778 containers to have annual receipts of $7,000,000. Given data on shipments maintained by the Committees' staff and the average handler price received during the 2008 season, the Committees' staff estimates that small handlers represent approximately 78 percent of all the handlers within the industry.

The Committees' staff has also estimated that fewer than 60 producers in the industry would not be considered small entities. For the 2008 season, the Committees estimated the average producer price received was $4.25 per container or container equivalent for nectarines and peaches. A producer would have to produce at least 176,471 containers of nectarines and peaches to have annual receipts of $750,000. Given data maintained by the Committees' staff and the average producer price received during the 2008 season, the Committees' staff estimates that small producers represent more than 88 percent of the producers within the industry.

With an average producer price of $4.25 per container or container equivalent, and a combined packout of nectarines and peaches of 45,543,561 containers, the value of the 2008 packout is estimated to be $193,560,134. Dividing this total estimated producer revenue figure by the estimated number of producers (550) yields an estimate of average revenue per producer of about $351,928 from the sales of peaches and nectarines.

This rule continues in effect the action that decreased the assessment rates established for the NAC for the 2009-10 and subsequent fiscal periods from $0.06 to $0.0175 per 25-pound container or container equivalent of nectarines and for the PCC for the 2009-10 and subsequent fiscal periods from $0.06 to $0.0025 per 25-pound container or container equivalent of peaches.

The NAC recommended 2009-10 fiscal period expenditures of $1,797,290.20 for nectarines and an assessment rate of $0.0175 per 25-pound container or container equivalent of nectarines. The assessment rate of $0.0175 is $0.0425 lower than the rate currently in effect. The PCC recommended 2009-10 fiscal period expenditures of $1,885,250 for peaches and an assessment rate of $0.0025 per 25-pound container or container equivalent of peaches. The assessment rate of $0.0025 is $0.0575 lower than the rate currently in effect.

This rule continues in effect the action that decreased the assessment obligation imposed on handlers. Assessments are applied uniformly on all handlers, and some of the costs may be passed on to producers. However, decreasing the assessment rate would reduce the burden on handlers, and may reduce the burden on producers. In addition, the Committees' meetings were widely publicized throughout the California nectarine and peach industries and all interested persons were invited to attend the meetings and encouraged to participate in the Committees' deliberations on all issues. Like all Committee meetings, the February 19, 2009 meetings were public meetings and entities of all sizes were able to express views on this issue.

This action imposes no additional reporting or recordkeeping requirements on either small or large 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.

In addition, as noted in the initial regulatory flexibility analysis, USDA has not identified any relevant Federal rules that duplicate, overlap or conflict with this rule.

Comments on the interim final rule were required to be received on or before August 17, 2009. One comment was received in support of the decreased assessment rates. Therefore, for the reasons given in the interim final rule, we are adopting the interim final rule as a final rule, without change.

To view the interim final rule and comment, go to: http://www.regulations.gov/​search/​Regs/​home.html#docketDetail?​R=​AMS-FV-09-0013.

This action also affirms information contained in the interim final rule concerning the Executive Orders 12866 and 12988, the Paperwork Reduction Act (44 U.S.C. Chapter 35), and the E-Gov Act (44 U.S.C. 101).

After consideration of all relevant material presented, it is found that finalizing this interim final rule, without change, as published in the Federal Register (74 FR 28869, June 18, 2009) will tend to effectuate the declared policy of the Act.

List of Subjects

7 CFR Part 916

• Marketing agreements
• Nectarines
• Reporting and recordkeeping requirements

7 CFR Part 917

• Marketing agreements
• Peaches
• Pears
• Reporting and recordkeeping requirements

PARTS 916 AND 917—[AMENDED]

Accordingly, the interim final rule amending 7 CFR parts 916 and 917, which was published at 74 FR 28869 on June 18, 2009, is adopted as a final rule, without change.

Dated: September 21, 2009.

Rayne Pegg,

Administrator, Agricultural Marketing Service.