[Federal Register Volume 74, Number 164 (Wednesday, August 26, 2009)]
[Proposed Rules]
[Pages 43082-43084]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-20515]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 927

[Doc. No. AMS-FV-09-0037; FV09-927-1 PR]


Pears Grown in Oregon and Washington; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule would increase the assessment rate established for 
the Processed Pear Committee (PPC) for the 2009-2010 and subsequent 
fiscal periods from $6.25 to $8.41 per ton for ``summer/fall'' pears 
for canning. The PPC is responsible for local administration of the 
marketing order regulating the handling of pears for processing grown 
in Oregon and Washington. Assessments upon handlers of pears for 
processing are used by the PPC to fund reasonable and necessary 
expenses of the program. The fiscal period for the marketing order 
begins July 1 and ends June 30. The assessment rate would remain in 
effect indefinitely unless modified, suspended or terminated.

DATES: Comments must be received by September 25, 2009.

ADDRESSES: Interested persons are invited to submit written comments 
regarding this rule. Comments must be sent to the Docket Clerk, 
Marketing Order Administration Branch, Fruit and Vegetable Programs, 
AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC 
20250-0237; Fax: (202) 720-8938; or Internet: http://www.regulations.gov. Comments should reference the docket number and 
the date and page number of this issue of the Federal Register and will 
be available for public inspection in the Office of the Docket Clerk 
during regular business hours, or can be viewed at: http://www.regulations.gov. All comments submitted in response to this rule 
will be included in the record and will be made available to the 
public. Please be advised that the identity of the individuals or 
entities submitting the comments will be made public on the Internet at 
the address provided above.

FOR FURTHER INFORMATION CONTACT: Susan M. Coleman or Gary D. Olson, 
Northwest Marketing Field Office, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, 1220 SW., Third 
Avenue, Suite 385, Portland, OR 97204; Telephone: (503) 326-2724; Fax: 
(503) 326-7440; or E-mail: <a href="/cdn-cgi/l/email-protection#82d1f7e7acc1edeee7efe3ecc2e3eff1acf7f1e6e3ace5edf4"><span class="__cf_email__" data-cfemail="772402125934181b121a161937161a04590204131659101801">[email protected]</span></a> or 
<a href="/cdn-cgi/l/email-protection#682f091a112c4627041b07062809051b461d1b0c09460f071e"><span class="__cf_email__" data-cfemail="91d6f0e3e8d5bfdefde2feffd1f0fce2bfe4e2f5f0bff6fee7">[email protected]</span></a>.
    Small businesses may request information on complying with this 
regulation by contacting Jay Guerber, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence 
Avenue, SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 
720-2491; Fax: (202) 720-8938; or E-mail: <a href="/cdn-cgi/l/email-protection#90daf1e9bed7e5f5e2f2f5e2d0f1fde3bee5e3f4f1bef7ffe6"><span class="__cf_email__" data-cfemail="81cbe0f8afc6f4e4f3e3e4f3c1e0ecf2aff4f2e5e0afe6eef7">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order 
No. 927, as amended (7 CFR 927), regulating the handling of pears grown 
in Oregon and Washington, hereinafter referred to as the ``order.'' The 
order is effective under the Agricultural Marketing Agreement Act of 
1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the 
``Act.''
    The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Order 12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the marketing order now in effect, Oregon and 
Washington pear handlers are subject to assessments. Funds to 
administer the order are derived from such assessments. It is intended 
that the assessment rate as proposed herein would be applicable to all 
assessable pears beginning July 1, 2009, and continue until amended, 
suspended, or terminated. This rule will not preempt any State or local 
laws, regulations, or policies, unless they present an irreconcilable 
conflict with this rule.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 608c(15)(A) of the 
Act, any handler subject to an order may file with USDA a petition 
stating that the order, any provision of the order, or any obligation 
imposed in connection with the order is not in accordance with law and 
request a modification of the order or to be exempted therefrom. Such 
handler is afforded the opportunity for a hearing on the petition. 
After the hearing USDA would rule on the petition. The Act provides 
that the district court of the United States in any district in which 
the handler is an

[[Page 43083]]

inhabitant, or has his or her principal place of business, has 
jurisdiction to review USDA's ruling on the petition, provided an 
action is filed not later than 20 days after the date of the entry of 
the ruling.
    This rule would increase the assessment rate established for the 
PPC for the 2009-2010 and subsequent fiscal periods from $6.25 to $8.41 
per ton for ``summer/fall'' pears for canning handled under the order. 
The assessment rate for ``winter'' and ``other'' pears for processing 
would remain unchanged at a zero rate.
    The order provides authority for the PPC, with the approval of 
USDA, to formulate an annual budget of expenses and collect assessments 
from handlers to administer the program. The members of the PPC are 
growers, handlers, and processors of Oregon and Washington pears. They 
are familiar with the PPC's needs and with the costs for goods and 
services in their local area and are thus in a position to formulate an 
appropriate budget and assessment rate. The assessment rate is 
formulated and discussed at a public meeting. Thus, all directly 
affected persons have an opportunity to participate and provide input.
    For the 2005-06 and subsequent fiscal periods, the PPC unanimously 
recommended the following three base rates of assessment: (a) $6.25 per 
ton for any or all varieties or subvarieties of pears for canning 
classified as ``summer/fall'', excluding pears for other methods of 
processing; (b) $0.00 per ton for any or all varieties or subvarieties 
of pears for processing classified as ``winter''; and (c) $0.00 per ton 
for any or all varieties or subvarieties of pears for processing 
classified as ``other''. The assessment for ``summer/fall'' pears 
applies only to pears for canning and excludes pears for other methods 
of processing as defined in Sec.  927.15, which includes pears for 
concentrate, freezing, dehydrating, pressing, or in any other way to 
convert pears into a processed product. This rate continues in effect 
from fiscal period to fiscal period unless modified, suspended, or 
terminated by USDA upon recommendation and information submitted by the 
PPC or other information available to USDA.
    The PPC met on May 28, 2009, and unanimously recommended 2009-2010 
expenditures of $1,029,554. In comparison, last year's budgeted 
expenditures were $882,606. The major expenditures recommended by the 
PPC for the 2009-2010 fiscal period include $860,310 for promotion and 
paid advertising; $130,944 for research; $24,200 for administration; 
$13,100 for PPC expenses; and $1,000 for contingency. In comparison, 
major expenditures for the 2008-09 fiscal period included $700,000 for 
promotion and paid advertising; $140,106 for research; $28,000 for 
administration; $13,500 for PPC expenses; and $1,000 for contingency.
    The PPC based its recommended assessment rate for ``summer/fall'' 
pears for canning on the 2009-2010 crop estimate, the 2009-2010 program 
expenditure needs, and the current and projected size of its monetary 
reserve. Shipments of ``summer/fall'' pears for canning for 2009-2010 
are estimated at 121,000 tons, which should provide $1,017,610 in 
assessment income. Income derived from handler assessments, along with 
interest income ($5,000), and funds from the Committee's authorized 
reserve ($136,420), should be adequate to cover the budgeted 
expenditures. The estimated 2009-2010 year-end reserve is $129,476, 
which is within the order's limit of approximately one fiscal period's 
operational expenses.
    Over the past five years, the Northwest processed pear industry has 
suffered a reduction in crop size by approximately 23 percent. With the 
decreasing crop size, along with the increasing costs for promotional 
activities, the PPC has been forced to cut back on some promotional 
activities and use reserve funds. The PPC recommended the higher 
assessment rate to increase the funding for promotional activities. The 
budget for promotion and paid advertising would increase from $700,000 
to $860,310. This increase will allow the PPC to effectively carry out 
the promotional activities needed to maintain the existing market share 
and increase demand. The PPC recommended no change for the $0.00 
assessment rate for both the ``winter'' and ``other'' classification of 
pears for processing.
    The proposed assessment rate would continue in effect indefinitely 
unless modified, suspended, or terminated by USDA upon recommendation 
and information submitted by the PPC or other available information.
    Although this assessment rate would be effective for an indefinite 
period, the PPC would continue to meet prior to or during each fiscal 
period to recommend a budget of expenses and consider recommendations 
for modification of the assessment rate. The dates and times of the 
PPC's meetings are available from the PPC or USDA. The PPC meetings are 
open to the public and interested persons may express their views at 
these meetings. USDA would evaluate the PPC's recommendations and other 
available information to determine whether modification of the 
assessment rate is needed. Further rulemaking will be undertaken as 
necessary. The PPC's 2009-2010 budget and those for subsequent fiscal 
periods would be reviewed and, as appropriate, approved by USDA.

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) 
has considered the economic impact of this rule on small entities. 
Accordingly, AMS has prepared this initial regulatory flexibility 
analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and the rules issued thereunder, are unique in 
that they are brought about through group action of essentially small 
entities acting on their own behalf.
    There are approximately 1,500 growers of pears for canning in the 
regulated production area and approximately 51 handlers subject to 
regulation under the order. Small agricultural growers are defined by 
the Small Business Administration (13 CFR 121.201) as those having 
annual receipts of less than $750,000, and small agricultural service 
firms are defined as those whose annual receipts are less than 
$7,000,000.
    According to the Noncitrus Fruits and Nuts 2008 Preliminary Summary 
issued in January 2009 by the National Agricultural Statistics Service, 
the total farm gate value of ``summer/fall'' processed pears grown in 
Oregon and Washington for 2008 was $28,868,000. Therefore, the 2008 
average gross revenue for a ``summer/fall'' processed pear grower in 
Oregon and Washington was $19,245. Based on records of the PPC and 
recent f.o.b. prices for pears, all of the handlers ship less than 
$7,000,000 worth of processed pears on an annual basis. Thus it can be 
concluded that the majority of growers and handlers of Oregon and 
Washington pears may be classified as small entities.
    There are five processing plants in the production area, with one 
in Oregon and four in Washington. All five processors would be 
considered large entities under the SBA's definition of small 
businesses.
    This rule would increase the assessment rate established for the 
PPC and collected from handlers for the 2009-2010 and subsequent fiscal

[[Page 43084]]

periods from $6.25 to $8.41 per ton for ``summer/fall'' pears for 
canning. The PPC also unanimously recommended 2009-2010 expenditures of 
$1,029,554. With a 2009-2010 crop of ``summer/fall'' pears for canning 
estimate of 121,000 tons in Oregon and Washington, the PPC anticipates 
assessment income of about $1,017,610. The PPC recommended the higher 
assessment rate to increase the funding for promotional activities.
    The major expenditures recommended by the PPC for the 2009-2010 
fiscal period include $860,310 for promotion and paid advertising, 
$130,944 for research, $24,200 for administration, $13,100 for PPC 
expenses, and $1,000 for contingency. In comparison, major expenditures 
for the 2008-09 fiscal period included $700,000 for promotion and paid 
advertising, $140,106 for research, $28,000 for administration, $13,500 
for PPC expenses, and $1,000 for contingency.
    The PPC discussed alternatives to this recommended assessment 
increase. The PPC reviewed a ``critical issue analysis'' of the key 
components of the PPC's promotion program and discussed individual 
promotional activities. Leaving the assessment rate at the current 
$6.25 per ton would have cut core promotional activities. A $0.05 
increase to $6.30 per ton would not be sufficient and would limit 
promotional activities. The assessment rate of $8.41 per ton for 
``summer/fall'' pears for canning enables the PPC to achieve the key 
components of the PPC's promotion program.
    A review of historical information and preliminary information 
pertaining to the upcoming crop year indicates that the grower price 
for the 2009-2010 season could average about $250 per ton for ``summer/
fall'' pears for canning. Therefore, the estimated assessment revenue 
for the 2009-2010 fiscal period as a percentage of total grower revenue 
is 3.364 percent for Oregon and Washington ``summer/fall'' pears for 
canning.
    This action would increase the assessment obligation imposed on 
handlers. While assessments impose some additional costs on handlers, 
the costs are minimal and uniform on all handlers. Some of the 
additional costs may be passed on to growers. However, these costs 
would be offset by the benefits derived by the operation of the order.
    In addition, the PPC's meeting was widely publicized throughout the 
Oregon and Washington pear industry and all interested persons were 
invited to attend and participate in PPC deliberations on all issues. 
Like all PPC meetings, the May 28, 2009 meeting was a public meeting 
and all entities, both large and small, were able to express views on 
the issues. Finally, interested persons are invited to submit 
information on the regulatory and informational impacts of this action 
on small businesses.
    This proposed rule would impose no additional reporting or 
recordkeeping requirements on either small or large Oregon and 
Washington pear handlers. As with all Federal marketing order programs, 
reports and forms are periodically reviewed to reduce information 
requirements and duplication by industry and public sector agencies. 
Additionally, USDA has not identified any relevant Federal rules that 
duplicate, overlap, or conflict with this rule.
    AMS is committed to complying with the E-Government Act, to promote 
the use of the Internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and order may be viewed at: http://www.ams.usda.gov/AMSv1.0/ams.fetchTemplateData.do?template=TemplateN&page=MarketingOrdersSmallBusinessGuide. Any questions about the compliance guide should be sent to 
Jay Guerber at the previously mentioned address in the FOR FURTHER 
INFORMATION CONTACT section.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposed rule. Thirty days is deemed appropriate 
because: (1) The 2009-2010 fiscal period will begin on July 1, 2009, 
and the order requires that the assessment rate for each fiscal period 
apply to all pears for canning handled during such fiscal period; (2) 
the Oregon and Washington pear harvest and shipping season is expected 
to begin in mid-August; (3) the PPC needs to have sufficient funds to 
pay its expenses, which are incurred on a continuous basis; and (4) 
handlers are aware of this action, which was recommended by the PPC at 
a public meeting and is similar to other assessment rate actions issued 
in past years.

List of Subjects in 7 CFR Part 927

    Marketing agreements, Pears, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 927 is 
proposed to be amended as follows:

PART 927--PEARS GROWN IN OREGON AND WASHINGTON

    1. The authority citation for 7 CFR part 927 continues to read as 
follows:

    Authority:  7 U.S.C. 601-674.

    2. In Sec.  927.237, the introductory text and paragraph (a) are 
revised to read as follows:


Sec.  924.237  Processed pear assessment rate.

    On or after July 1, 2009, the following base rates of assessment 
for pears for processing are established for the Processed Pear 
Committee:
    (a) $8.41 per ton for any or all varieties or subvarieties of pears 
for canning classified as ``summer/fall'' excluding pears for other 
methods of processing;
* * * * *

    Dated: August 20, 2009.
Rayne Pegg,
Administrator, Agricultural Marketing Service.
[FR Doc. E9-20515 Filed 8-25-09; 8:45 am]
BILLING CODE 3410-02-P


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