Cranberries Grown in the States of Massachusetts, et al.; Increased Assessment Rate, 14651-14654 [E7-5791]
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Federal Register / Vol. 72, No. 60 / Thursday, March 29, 2007 / Rules and Regulations
including remedial and enforcement
actions, are required.
If APHIS determines that action is not
necessary to mitigate low-level presence
of a regulated material in commerce to
protect plant health or the environment,
this determination does not preclude
enforcement action against a company
or individual for violation of APHIS
regulations. APHIS will investigate and
take appropriate enforcement action
whenever regulated materials are
detected in commerce.
APHIS coordinates closely with EPA
and FDA on investigations, risk
evaluations, and the determination of
what remediation measures, if any, will
be necessary. This cooperation is crucial
and helps to ensure that there are no
unresolved safety issues. Any regulatory
action taken by APHIS will not preclude
FDA or EPA from pursuing action under
their own authorities, as necessary, to
ensure the safety of food as well as to
protect human health and the
environment from the sale, distribution,
or use of any pesticide.
APHIS has authority under the PPA to
take or order remedial measures which
include the authority to hold, seize,
quarantine, treat, apply other remedial
measures to, destroy, or otherwise
dispose of regulated materials if it is
determined that such measures are
necessary to prevent the dissemination
of a plant pest within or throughout the
United States.10 Any remedial action
taken would be determined on a caseby-case basis. Key considerations
include the extent of the occurrence, the
nature of the regulated material, as well
as any potential risks to plant health or
the environment. In any case where
APHIS determines that an incident
involving a GE plant would result in the
introduction or dissemination of
material that could pose a threat to plant
health or the environment, remediation
measures will be required. It is
important to note that, due to the strict
requirements that APHIS has developed
in recent years for GE plants that pose
elevated risks, such occurrences would
be unlikely.
There are two principal situations in
which APHIS may determine that action
under the PPA was not necessary. Even
though remedial measures would not
generally be applied in these two
situations, applicants field testing these
types of plants must be authorized
through either notifications or permits
and must follow all APHIS
requirements.
The first situation would be when the
regulated material is derived from
plants that meet all of the criteria to
10 See
7 U.S.C. 7714; 7 CFR 340.0(b).
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qualify for APHIS’ notification process.
The six eligibility requirements are: 11
• The plant must not be listed on the
Federal Noxious Weed list or be
considered a weed in the area of
proposed release.
• The introduced genetic material
must be stably integrated, which means
the introduced DNA must remain inside
the living cell and replicate only with
the plant DNA.
• The function of the introduced
genetic material is known, and its
presence in the regulated article does
not result in a plant disease.
• The introduced genetic material
does not cause the production of an
infectious entity, produce substances
that are known to be, or are likely to be,
toxic to nontarget organisms, or produce
products intended for pharmaceutical or
industrial use.
• The introduced genetic sequences
derived from plant viruses do not pose
a significant risk of creating a new plant
virus.
• The plant has not been modified to
contain certain genetic material derived
from animal or human pathogens. In
addition, plants containing coding
sequences whose products are known
agents of diseases in humans or
nontarget animals are not eligible.
The majority of GE plants field tested
under APHIS regulations qualify for the
notification process because they
present minimal risk to plant health and
the environment. Many of the plants
that have been engineered for common
traits such as pest resistance, herbicide
tolerance, male sterility, and improved
product quality such as delayed fruit
ripening meet the criteria for
notification. APHIS has extensive
experience with these types of plants
and has overseen thousands of field
tests involving them.
The second situation in which APHIS
may not take remedial action is if the GE
plant is similar to another GE plant that
has already been deregulated by APHIS
with respect to both plant genotype and
any novel protein(s) expressed. APHIS
will carefully assess the GE plant
material, including the plant genotype,
the introduced genes, and any proteins
produced. When these are sufficiently
similar to those of a previously
deregulated plant, APHIS is able to
conclude confidently that, like the
previously deregulated plant, the new
GE plant poses no significant safety risk
to plant health or the environment, and
thus, remedial action may not be
necessary.
11 The specific criteria for GE crops planted under
notification are found at 7 CFR 340.3.
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14651
Authority: 7 U.S.C. 7701–7772 and 7781–
7786; 31 U.S.C. 9701; 7 CFR 2.22, 2.80, and
371.3.
Done in Washington, DC, this 26th day of
March 2007.
Bruce Knight,
Under Secretary for Marketing and Regulatory
Programs.
[FR Doc. 07–1536 Filed 3–27–07; 2:00 pm]
BILLING CODE 3410–34–P
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 929
[Docket No. AMS–FV–06–0174; FV06–929–
1 FR]
Cranberries Grown in the States of
Massachusetts, et al.; Increased
Assessment Rate
Agricultural Marketing Service,
USDA.
ACTION: Final rule.
AGENCY:
SUMMARY: This rule increases the
assessment rate established for the
Cranberry Marketing Committee
(Committee) for the 2006–2007 fiscal
year and subsequent fiscal years from
$0.18 to $0.28 per barrel. Authorization
to assess cranberry handlers enables the
Committee to incur expenses that are
reasonable and necessary to administer
the program. The Committee locally
administers the marketing order which
regulates the handling of cranberries
grown in the States of Massachusetts,
Rhode Island, Connecticut, New Jersey,
Wisconsin, Michigan, Minnesota,
Oregon, Washington, and Long Island in
the State of New York. The fiscal year
began September 1, 2006, and ends
August 31, 2007. The assessment rate
will remain in effect indefinitely unless
modified, suspended, or terminated.
DATES: Effective Date: This rule becomes
effective March 30, 2007.
FOR FURTHER INFORMATION CONTACT:
Patricia A. Petrella or Kenneth G.
Johnson, DC Marketing Field Office,
Fruit and Vegetable Programs, AMS,
USDA, Unit 155, 4700 River Road,
Riverdale, Maryland 20737; telephone:
(301) 734–5243, Fax: (301) 734–5275, or
E-mail at Patricia.Petrella@usda.gov or
Kenneth.Johnson@usda.gov.
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–
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14652
Federal Register / Vol. 72, No. 60 / Thursday, March 29, 2007 / Rules and Regulations
2491, Fax: (202) 720–8938, or e-mail:
Jay.Guerber@usda.gov.
This final
rule is issued under Marketing
Agreement and Order No. 929, as
amended (7 CFR part 929), regulating
the handling of cranberries produced in
the States of Massachusetts, Rhode
Island, Connecticut, New Jersey,
Wisconsin, Michigan, Minnesota,
Oregon, Washington, and Long Island in
the State of New York, 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 final rule has been reviewed
under Executive Order 12988, Civil
Justice Reform. Under the marketing
order now in effect, cranberries 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 cranberries
beginning September 1, 2006, 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 the 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 the 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 the 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 established for the
2006–2007 and subsequent fiscal years
from $0.18 to $0.28 per barrel of
cranberries.
The proposed rule inadvertently
referred to the proposed increase as a
‘‘per pound’’ increase rather than a ‘‘per
barrel’’ increase two times in the
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SUPPLEMENTARY INFORMATION:
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SUPPLEMENTARY INFORMATION section.
The proposed regulatory text was
correct in the proposed rule. The
inadvertent errors are corrected in this
document.
The cranberry marketing order
provides authority for the Committee,
with approval of USDA, to formulate an
annual budget of expenses and collect
assessments from handlers to administer
the program. The members of the
Committee are producers and handlers
of cranberries. They are familiar with
the Committee’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 in a public
meeting. Thus, all directly affected
persons have an opportunity to
participate and provide input.
Authority to fix the rate of assessment
to be paid by each handler and to collect
such assessment appears in § 929.41 of
the order. In addition, § 929.45 of the
order provides that the Committee, with
the approval of the USDA, may establish
or provide for the establishment of
production research, marketing
research, and market development
projects designed to assist, improve, or
promote the marketing, distribution,
consumption, or efficient production of
cranberries. The expense of such
projects is paid from funds collected
pursuant to § 929.41 (Assessments), or
from such other funds as approved by
the USDA.
For the 2001–2002 fiscal year, the
Committee recommended, and USDA
approved, an assessment rate of $0.18
per barrel of cranberries handled that
would continue in effect from fiscal
period to fiscal period unless modified,
suspended, or terminated by USDA
upon recommendation and information
submitted by the Committee or other
information available to USDA.
The Committee met on August 28,
2006, and recommended 2006–2007
expenditures of $3,522,062 and an
assessment rate of $0.28 per barrel of
cranberries. The Committee passed the
assessment rate increase by a vote of 12
to 2. Those not supporting the
recommendation wanted a lesser
increase. In comparison, last year’s
budgeted expenses were $2,612,265.
The assessment rate of $0.28 is $0.10
higher than the rate currently in effect.
The Committee recommended the
$0.10 per barrel increase to cover
increased costs. The Committee has
expanded its contributions to the export
market development program from
$50,000 in 1999 to $480,000 in 2006.
The Committee has increased funding of
the export market development program
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as target markets have expanded from
two in 1999 (Japan and Germany), to
five in 2006 (Japan, Germany, Mexico,
France and Australia) with contingency
plans to expand activities regionally
within Europe and in South Korea.
According to the Committee, cranberries
and cranberry products going into
export markets have steadily increased
from 10 percent of the annual cranberry
production during the 1999–2000 fiscal
period to approximately 24 percent of
the annual production in the 2005–2006
fiscal period.
In order to expand and maintain
activities within the target markets, the
Committee has used funds from its
reserve account to meet the costs of
educating consumers and the trade
industry.
Since the last increase published in
the Federal Register on February 14,
2002, at 67 FR 6843, the assessment rate
has not been increased to compensate
for increases in the costs of goods and
services, costs contributable to
increasing the Committee membership
and to pay back funds taken from the
reserve for the expanding export market
development program. As a result, the
reserve has continued to decrease until
it is at a point where the Committee is
unable to meet the order’s reserve
funding requirements or balance its
budget without an increase in
assessments and/or cutback in program
activities. The Committee recommended
the assessment rate increase to continue
to expand the generic export market
development program and have
sufficient funding to meet its
operational expenses. Without this
increase, the Committee would have to
curtail expansion of the export market
development and promotion program.
All cranberry handlers regulated
under the marketing order will pay the
proposed assessment rate. However,
certain organic handlers may be exempt
from paying assessments for market
promotion activities pursuant to 7 CFR
900.700.
The major expenditures
recommended by the Committee for the
2006–2007 fiscal year include $500,000
for domestic promotion, $480,000 for
export promotion, $154,116 for
personnel, $103,500 for meetings, and
$107,527 for administrative expenses.
Budgeted expenses for major items in
2005–2006 were $488,225 for domestic
promotion, $147,420 for personnel,
$105,500 for meetings, and $116,542 for
administrative expenses. The
Committee recommended an increased
assessment rate to generate larger
revenue to meet its operational and
export promotion expenses and keep its
reserves at an acceptable level.
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In deriving the recommended
assessment rate, the Committee
determined assessable cranberry
production for the upcoming fiscal
period at 6,506,000 barrels. Therefore,
total assessment income for the 2006–
2007 fiscal year is estimated at
$1,821,680 (6,506,000 barrels x $0.28).
This amount plus $1,767,600 from
USDA’s Foreign Agricultural Service’s
Market Access Program (MAP) and
adequate funds in the reserve and
interest income will be adequate to
cover budgeted expenses. Funds in the
reserve (approximately $541,122) will
be kept within the approximately one
fiscal period’s expenses as
recommended by the Committee
consistent with § 929.42(a) of the order.
The assessment rate established in
this rule will continue in effect
indefinitely unless modified,
suspended, or terminated by USDA
upon recommendation and other
information submitted by the
Committee or other available
information.
Although the assessment rate will be
effective for an indefinite period, the
Committee 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. The
dates and times of Committee meetings
are available from the Committee or the
USDA. Committee meetings are open to
the public and interested persons may
express their views at these meetings.
USDA will evaluate Committee
recommendations and other available
information to determine whether
modification of the assessment rate is
needed. Further rulemaking will be
undertaken as necessary. The
Committee’s 2006–2007 budget and
those for subsequent fiscal periods will
be reviewed and, as appropriate,
approved by the USDA.
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Final Regulatory Flexibility Analysis
Pursuant to requirements set forth in
the Regulatory Flexibility Act (RFA), the
Agricultural Marketing Service (AMS)
has considered the economic impact of
this action 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 rules thereunder, are unique in
that they are brought about through
group action of essentially small entities
acting on their own behalf. Thus, both
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statutes have small entity orientation
and compatibility.
There are approximately 50 handlers
of cranberries who are subject to
regulation under the cranberry
marketing order and approximately
1250 producers of cranberries in the
regulated area. Small agricultural
service firms, which includes handlers,
are defined by the Small Business
Administration (13 CFR 121.201) as
those having annual receipts of less than
$6,500,000, and small agricultural
producers are defined as those having
annual receipts of less than $750,000.
The majority of producers and handlers
of cranberries under the order are
considered small entities under SBA’s
standards.
The principal demand for cranberries
is in the form of processed products.
Cranberries are dried, frozen, canned,
and juiced. During the 2001–2002 fiscal
year through the 2005–2006 fiscal year,
approximately 91 percent of the U.S.
cranberry crop, or 5.4 million barrels,
was processed annually.
Based on National Agricultural
Statistics Service data, acreage in the
United States devoted to cranberry
production has leveled off over the last
several crop years. Bearing acres have
declined slightly from a high of 39,600
acres in the 2003–2004 fiscal year to
39,100 in the 2005–2006 fiscal year.
Wisconsin and Massachusetts lead the
nation in cranberry acreage, with
approximately 81 percent of the total,
and production also at approximately 81
percent of the total U.S. cranberry crop
each year.
This rule increases the assessment
rate established for the Committee and
collected from handlers for the 2006–
2007 fiscal period and subsequent
periods from $0.18 to $0.28 per barrel of
cranberries.
The Committee discussed continuing
the existing assessment rate, but
concluded that it needed the additional
funds to devote to its export market
development and promotion program
and replenish its financial reserve
which would be funded through
assessments.
This action increases the assessment
obligation imposed on handlers. While
assessments impose some additional
costs on handlers, the costs are uniform
on all handlers. Some of the additional
costs may be passed on to producers.
However, these costs will be offset by
the benefits derived by the operation of
the marketing order. In addition, the
Committee’s meeting was widely
publicized throughout the cranberry
industry and all interested persons were
invited to attend the meeting and
participate in Committee deliberations
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14653
on all issues. Like all Committee
meetings, all entities, both large and
small, were able to express views on
this issue. Finally, interested persons
are invited to submit information on the
regulatory and informational impacts of
this action on small businesses.
This rule will impose no additional
reporting or recordkeeping requirements
on either small or large cranberry
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.
The 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.
USDA has not identified any relevant
Federal rules that duplicate, overlap, or
conflict with this rule.
As mentioned previously, a proposed
rule was published in the Federal
Register on January 16, 2007 (72 FR
1678). Copies of the proposed rule were
mailed or sent via facsimile to all
Committee members and handlers.
Finally, the proposed rule was made
available through the Internet, USDA
and the Office of the Federal Register. A
30-day comment period ending
February 15, 2007, was provided to
allow interested persons to respond to
the proposal. Four comments were
received. One supported and three
opposed the proposal.
The commenter in support for the
assessment rate increase stated that the
increase is needed to help fund the
Committee’s operations and to help
increase consumer awareness of
cranberries.
Three comments were received (two
from growers and one from a growerhandler) in opposition to the proposed
assessment rate increase. One of the
commenters opposed the proposal
because he did not believe a $.10 per
barrel increase in the assessment rate
will have a meaningful increase on the
demand for cranberries. The commenter
also stated that it is inequitable to force
U.S. growers to spend another $.10 per
barrel while growers in Canada and
Chile pay nothing. Finally, this
commenter stated that it is impossible to
justify an increase in the assessment rate
for advertising when cranberry supply
and demand are projected to be in
balance. Another commenter opposed
the proposal based on his contention
that he already spends a sum of money
on branded advertising with a major
cranberry cooperative. The last
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14654
Federal Register / Vol. 72, No. 60 / Thursday, March 29, 2007 / Rules and Regulations
commenter felt that the assessment rate
increase was an excessive and
unjustified expense.
In response to these comments, the
$.10 per barrel increase is not
specifically for export promotional
activities but to provide the Committee
with funds for its operational expenses.
As previously stated, the assessment
rate has not been increased since 2002.
Since that time, there have been
increases in the costs of goods and
services, costs contributable to
increasing Committee membership and
to pay back funds taken from the reserve
for the export market development
program. The increase in the assessment
rate is needed to generate larger revenue
for the Committee to meet its expenses
and keep its reserves at an acceptable
level. Without the increase, the
Committee will have to curtail its
operational expenses including the
export market development and
promotion program that has[K1] been
funded by assessments and MAP funds
for the past several years.
With regard to the equitability of
some handlers paying the increased
assessment rate while others pay no
assessments, all cranberry handlers
regulated under the marketing order
will have to pay the increased
assessment rate. Certain organic
handlers are exempt from paying
assessments on market promotion
activities. However, handlers not
regulated under the marketing order
(such as those handlers in Canada or
Chile) are not subject to its provisions
and thus, do not have to pay
assessments.
Lastly, in regards to the commenter
who already pays for branded
advertising, we note that those
advertisements promote a specific brand
of cranberries and cranberry products.
The Committee’s domestic and export
promotion programs are generic and
were developed to promote the qualities
of cranberries and cranberry products
for the entire cranberry industry. Both
the generic and branded promotion of
cranberries and cranberry products
reach new markets/customers and
increase demand for cranberries. Under
the marketing order, the assessment
obligation is imposed on handlers.
While assessments impose some
additional costs on handlers, the costs
are uniform on all handlers. Some of the
additional costs may be passed on to
producers. However, we believe that
these costs are offset by the benefits
derived by the operation of the
marketing order.
Accordingly, no changes will be made
to this rule based on the comments
received.
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A small business guide on complying
with fruit, vegetable, and specialty crop
marketing agreements and orders may
be viewed at the following Web site:
https://www.ams.usda.gov/fv/moab.html.
Any questions about the compliance
guide should be sent to Jay Guerber at
the previously mentioned address in the
DEPARTMENT OF AGRICULTURE
FOR FURTHER INFORMATION CONTACT
Irish Potatoes Grown in Colorado;
Modification of the Handling
Regulation for Area No. 2
section.
After consideration of all relevant
material presented, including the
information and recommendation
submitted by the Committee 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.
Pursuant to 5 U.S.C. 553, it is also
found and determined that good cause
exists for not postponing the effective
date of this rule until 30 days after
publication in the Federal Register
because the 2006–2007 fiscal period
began September 1, 2006, and the
marketing order requires that the rate of
assessment for each fiscal period apply
to all assessable cranberries handled
during such fiscal period. Further,
handlers are aware of this action which
was recommended by the Committee at
a public meeting. Also, a 30-day
comment period was provided for in the
proposed rule.
List of Subjects in 7 CFR Part 929
Cranberries, Marketing agreements,
Reporting and recordkeeping
requirements.
I For the reasons set forth in the
preamble, 7 CFR part 929 is amended as
follows:
PART 929—CRANBERRIES GROWN IN
THE STATES OF MASSACHUSETTS,
RHODE ISLAND, CONNECTICUT, NEW
JERSEY, WISCONSIN, MICHIGAN,
MINNESOTA, OREGON,
WASHINGTON, AND LONG ISLAND IN
THE STATE OF NEW YORK
1. The authority citation for 7 CFR
part 929 continues to read as follows:
I
Authority: 7 U.S.C. 601–674.
2. Section 929.236 is revised to read
as follows:
I
§ 929.236
Assessment rate.
On and after September 1, 2006, an
assessment rate of $.28 per barrel is
established for cranberries.
Dated: March 23, 2007.
Lloyd C. Day,
Administrator, Agricultural Marketing
Service.
[FR Doc. E7–5791 Filed 3–28–07; 8:45 am]
BILLING CODE 3410–02–P
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Agricultural Marketing Service
7 CFR Part 948
[Docket No. AMS–FV–06–0181; FV06–948–
2 FIR]
Agricultural Marketing Service,
USDA.
ACTION: Final rule.
AGENCY:
SUMMARY: The Department of
Agriculture (USDA) is adopting, as a
final rule, without change, an interim
final rule modifying the grade and
maturity requirements for potatoes
handled under the Colorado potato
marketing order, Area No. 2. The
marketing order regulates the handling
of Irish potatoes grown in Colorado and
is administered locally by the Colorado
Potato Administrative Committee, Area
No. 2 (Committee). This rule continues
in effect the action that relaxed the
minimum grade requirement from U.S.
No. 1 grade to U.S. Commercial grade
for all Area No. 2 potato varieties, other
than round, red-skinned varieties,
measuring from 11⁄2-inch minimum
diameter to 21⁄4-inch maximum
diameter (size B), and 1-inch minimum
diameter to 13⁄4-inch maximum
diameter. This rule also continues in
effect the action that changed the date
minimum maturity requirements are
implemented from August 25 to August
1 of each year. These changes are
intended to facilitate the handling and
marketing of Colorado Area No. 2
potatoes.
DATES:
Effective Date: April 30, 2007.
FOR FURTHER INFORMATION CONTACT:
Teresa Hutchinson or Gary Olson,
Northwest Marketing Field Office,
Marketing Order Administration
Branch, Fruit and Vegetable Programs,
AMS, USDA; Telephone: (503) 326–
2724, Fax: (503) 326–7440, or E-mail:
Teresa.Hutchinson@usda.gov or
GaryD.Olson@usda.gov.
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:
Jay.Guerber@usda.gov.
This rule
is issued under Marketing Agreement
No. 97 and Marketing Order No. 948,
SUPPLEMENTARY INFORMATION:
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]]>Agencies
[Federal Register Volume 72, Number 60 (Thursday, March 29, 2007)]
[Rules and Regulations]
[Pages 14651-14654]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-5791]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 929
[Docket No. AMS-FV-06-0174; FV06-929-1 FR]
Cranberries Grown in the States of Massachusetts, et al.;
Increased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: This rule increases the assessment rate established for the
Cranberry Marketing Committee (Committee) for the 2006-2007 fiscal year
and subsequent fiscal years from $0.18 to $0.28 per barrel.
Authorization to assess cranberry handlers enables the Committee to
incur expenses that are reasonable and necessary to administer the
program. The Committee locally administers the marketing order which
regulates the handling of cranberries grown in the States of
Massachusetts, Rhode Island, Connecticut, New Jersey, Wisconsin,
Michigan, Minnesota, Oregon, Washington, and Long Island in the State
of New York. The fiscal year began September 1, 2006, and ends August
31, 2007. The assessment rate will remain in effect indefinitely unless
modified, suspended, or terminated.
DATES: Effective Date: This rule becomes effective March 30, 2007.
FOR FURTHER INFORMATION CONTACT: Patricia A. Petrella or Kenneth G.
Johnson, DC Marketing Field Office, Fruit and Vegetable Programs, AMS,
USDA, Unit 155, 4700 River Road, Riverdale, Maryland 20737; telephone:
(301) 734-5243, Fax: (301) 734-5275, or E-mail at
Patricia.Petrella@usda.gov or Kenneth.Johnson@usda.gov.
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-
[[Page 14652]]
2491, Fax: (202) 720-8938, or e-mail: Jay.Guerber@usda.gov.
SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing
Agreement and Order No. 929, as amended (7 CFR part 929), regulating
the handling of cranberries produced in the States of Massachusetts,
Rhode Island, Connecticut, New Jersey, Wisconsin, Michigan, Minnesota,
Oregon, Washington, and Long Island in the State of New York,
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 final rule has been reviewed under Executive Order 12988,
Civil Justice Reform. Under the marketing order now in effect,
cranberries 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 cranberries
beginning September 1, 2006, 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 the 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 the 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 the 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 established for the
2006-2007 and subsequent fiscal years from $0.18 to $0.28 per barrel of
cranberries.
The proposed rule inadvertently referred to the proposed increase
as a ``per pound'' increase rather than a ``per barrel'' increase two
times in the SUPPLEMENTARY INFORMATION section. The proposed regulatory
text was correct in the proposed rule. The inadvertent errors are
corrected in this document.
The cranberry marketing order provides authority for the Committee,
with approval of USDA, to formulate an annual budget of expenses and
collect assessments from handlers to administer the program. The
members of the Committee are producers and handlers of cranberries.
They are familiar with the Committee'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 in a public meeting. Thus, all
directly affected persons have an opportunity to participate and
provide input.
Authority to fix the rate of assessment to be paid by each handler
and to collect such assessment appears in Sec. 929.41 of the order. In
addition, Sec. 929.45 of the order provides that the Committee, with
the approval of the USDA, may establish or provide for the
establishment of production research, marketing research, and market
development projects designed to assist, improve, or promote the
marketing, distribution, consumption, or efficient production of
cranberries. The expense of such projects is paid from funds collected
pursuant to Sec. 929.41 (Assessments), or from such other funds as
approved by the USDA.
For the 2001-2002 fiscal year, the Committee recommended, and USDA
approved, an assessment rate of $0.18 per barrel of cranberries handled
that would continue in effect from fiscal period to fiscal period
unless modified, suspended, or terminated by USDA upon recommendation
and information submitted by the Committee or other information
available to USDA.
The Committee met on August 28, 2006, and recommended 2006-2007
expenditures of $3,522,062 and an assessment rate of $0.28 per barrel
of cranberries. The Committee passed the assessment rate increase by a
vote of 12 to 2. Those not supporting the recommendation wanted a
lesser increase. In comparison, last year's budgeted expenses were
$2,612,265. The assessment rate of $0.28 is $0.10 higher than the rate
currently in effect.
The Committee recommended the $0.10 per barrel increase to cover
increased costs. The Committee has expanded its contributions to the
export market development program from $50,000 in 1999 to $480,000 in
2006. The Committee has increased funding of the export market
development program as target markets have expanded from two in 1999
(Japan and Germany), to five in 2006 (Japan, Germany, Mexico, France
and Australia) with contingency plans to expand activities regionally
within Europe and in South Korea. According to the Committee,
cranberries and cranberry products going into export markets have
steadily increased from 10 percent of the annual cranberry production
during the 1999-2000 fiscal period to approximately 24 percent of the
annual production in the 2005-2006 fiscal period.
In order to expand and maintain activities within the target
markets, the Committee has used funds from its reserve account to meet
the costs of educating consumers and the trade industry.
Since the last increase published in the Federal Register on
February 14, 2002, at 67 FR 6843, the assessment rate has not been
increased to compensate for increases in the costs of goods and
services, costs contributable to increasing the Committee membership
and to pay back funds taken from the reserve for the expanding export
market development program. As a result, the reserve has continued to
decrease until it is at a point where the Committee is unable to meet
the order's reserve funding requirements or balance its budget without
an increase in assessments and/or cutback in program activities. The
Committee recommended the assessment rate increase to continue to
expand the generic export market development program and have
sufficient funding to meet its operational expenses. Without this
increase, the Committee would have to curtail expansion of the export
market development and promotion program.
All cranberry handlers regulated under the marketing order will pay
the proposed assessment rate. However, certain organic handlers may be
exempt from paying assessments for market promotion activities pursuant
to 7 CFR 900.700.
The major expenditures recommended by the Committee for the 2006-
2007 fiscal year include $500,000 for domestic promotion, $480,000 for
export promotion, $154,116 for personnel, $103,500 for meetings, and
$107,527 for administrative expenses. Budgeted expenses for major items
in 2005-2006 were $488,225 for domestic promotion, $147,420 for
personnel, $105,500 for meetings, and $116,542 for administrative
expenses. The Committee recommended an increased assessment rate to
generate larger revenue to meet its operational and export promotion
expenses and keep its reserves at an acceptable level.
[[Page 14653]]
In deriving the recommended assessment rate, the Committee
determined assessable cranberry production for the upcoming fiscal
period at 6,506,000 barrels. Therefore, total assessment income for the
2006-2007 fiscal year is estimated at $1,821,680 (6,506,000 barrels x
$0.28). This amount plus $1,767,600 from USDA's Foreign Agricultural
Service's Market Access Program (MAP) and adequate funds in the reserve
and interest income will be adequate to cover budgeted expenses. Funds
in the reserve (approximately $541,122) will be kept within the
approximately one fiscal period's expenses as recommended by the
Committee consistent with Sec. 929.42(a) of the order.
The assessment rate established in this rule will continue in
effect indefinitely unless modified, suspended, or terminated by USDA
upon recommendation and other information submitted by the Committee or
other available information.
Although the assessment rate will be effective for an indefinite
period, the Committee 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. The dates and
times of Committee meetings are available from the Committee or the
USDA. Committee meetings are open to the public and interested persons
may express their views at these meetings. USDA will evaluate Committee
recommendations and other available information to determine whether
modification of the assessment rate is needed. Further rulemaking will
be undertaken as necessary. The Committee's 2006-2007 budget and those
for subsequent fiscal periods will be reviewed and, as appropriate,
approved by the USDA.
Final Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), the Agricultural Marketing Service (AMS) has considered the
economic impact of this action 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 rules 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 50 handlers of cranberries who are subject
to regulation under the cranberry marketing order and approximately
1250 producers of cranberries in the regulated area. Small agricultural
service firms, which includes handlers, are defined by the Small
Business Administration (13 CFR 121.201) as those having annual
receipts of less than $6,500,000, and small agricultural producers are
defined as those having annual receipts of less than $750,000. The
majority of producers and handlers of cranberries under the order are
considered small entities under SBA's standards.
The principal demand for cranberries is in the form of processed
products. Cranberries are dried, frozen, canned, and juiced. During the
2001-2002 fiscal year through the 2005-2006 fiscal year, approximately
91 percent of the U.S. cranberry crop, or 5.4 million barrels, was
processed annually.
Based on National Agricultural Statistics Service data, acreage in
the United States devoted to cranberry production has leveled off over
the last several crop years. Bearing acres have declined slightly from
a high of 39,600 acres in the 2003-2004 fiscal year to 39,100 in the
2005-2006 fiscal year. Wisconsin and Massachusetts lead the nation in
cranberry acreage, with approximately 81 percent of the total, and
production also at approximately 81 percent of the total U.S. cranberry
crop each year.
This rule increases the assessment rate established for the
Committee and collected from handlers for the 2006-2007 fiscal period
and subsequent periods from $0.18 to $0.28 per barrel of cranberries.
The Committee discussed continuing the existing assessment rate,
but concluded that it needed the additional funds to devote to its
export market development and promotion program and replenish its
financial reserve which would be funded through assessments.
This action increases the assessment obligation imposed on
handlers. While assessments impose some additional costs on handlers,
the costs are uniform on all handlers. Some of the additional costs may
be passed on to producers. However, these costs will be offset by the
benefits derived by the operation of the marketing order. In addition,
the Committee's meeting was widely publicized throughout the cranberry
industry and all interested persons were invited to attend the meeting
and participate in Committee deliberations on all issues. Like all
Committee meetings, all entities, both large and small, were able to
express views on this issue. Finally, interested persons are invited to
submit information on the regulatory and informational impacts of this
action on small businesses.
This rule will impose no additional reporting or recordkeeping
requirements on either small or large cranberry 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.
The 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.
USDA has not identified any relevant Federal rules that duplicate,
overlap, or conflict with this rule.
As mentioned previously, a proposed rule was published in the
Federal Register on January 16, 2007 (72 FR 1678). Copies of the
proposed rule were mailed or sent via facsimile to all Committee
members and handlers. Finally, the proposed rule was made available
through the Internet, USDA and the Office of the Federal Register. A
30-day comment period ending February 15, 2007, was provided to allow
interested persons to respond to the proposal. Four comments were
received. One supported and three opposed the proposal.
The commenter in support for the assessment rate increase stated
that the increase is needed to help fund the Committee's operations and
to help increase consumer awareness of cranberries.
Three comments were received (two from growers and one from a
grower-handler) in opposition to the proposed assessment rate increase.
One of the commenters opposed the proposal because he did not believe a
$.10 per barrel increase in the assessment rate will have a meaningful
increase on the demand for cranberries. The commenter also stated that
it is inequitable to force U.S. growers to spend another $.10 per
barrel while growers in Canada and Chile pay nothing. Finally, this
commenter stated that it is impossible to justify an increase in the
assessment rate for advertising when cranberry supply and demand are
projected to be in balance. Another commenter opposed the proposal
based on his contention that he already spends a sum of money on
branded advertising with a major cranberry cooperative. The last
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commenter felt that the assessment rate increase was an excessive and
unjustified expense.
In response to these comments, the $.10 per barrel increase is not
specifically for export promotional activities but to provide the
Committee with funds for its operational expenses. As previously
stated, the assessment rate has not been increased since 2002. Since
that time, there have been increases in the costs of goods and
services, costs contributable to increasing Committee membership and to
pay back funds taken from the reserve for the export market development
program. The increase in the assessment rate is needed to generate
larger revenue for the Committee to meet its expenses and keep its
reserves at an acceptable level. Without the increase, the Committee
will have to curtail its operational expenses including the export
market development and promotion program that has[K1] been
funded by assessments and MAP funds for the past several years.
With regard to the equitability of some handlers paying the
increased assessment rate while others pay no assessments, all
cranberry handlers regulated under the marketing order will have to pay
the increased assessment rate. Certain organic handlers are exempt from
paying assessments on market promotion activities. However, handlers
not regulated under the marketing order (such as those handlers in
Canada or Chile) are not subject to its provisions and thus, do not
have to pay assessments.
Lastly, in regards to the commenter who already pays for branded
advertising, we note that those advertisements promote a specific brand
of cranberries and cranberry products. The Committee's domestic and
export promotion programs are generic and were developed to promote the
qualities of cranberries and cranberry products for the entire
cranberry industry. Both the generic and branded promotion of
cranberries and cranberry products reach new markets/customers and
increase demand for cranberries. Under the marketing order, the
assessment obligation is imposed on handlers. While assessments impose
some additional costs on handlers, the costs are uniform on all
handlers. Some of the additional costs may be passed on to producers.
However, we believe that these costs are offset by the benefits derived
by the operation of the marketing order.
Accordingly, no changes will be made to this rule 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 the
following Web site: https://www.ams.usda.gov/fv/moab.html. Any questions
about the compliance guide should be sent to Jay Guerber 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 Committee 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.
Pursuant to 5 U.S.C. 553, it is also found and determined that good
cause exists for not postponing the effective date of this rule until
30 days after publication in the Federal Register because the 2006-2007
fiscal period began September 1, 2006, and the marketing order requires
that the rate of assessment for each fiscal period apply to all
assessable cranberries handled during such fiscal period. Further,
handlers are aware of this action which was recommended by the
Committee at a public meeting. Also, a 30-day comment period was
provided for in the proposed rule.
List of Subjects in 7 CFR Part 929
Cranberries, Marketing agreements, Reporting and recordkeeping
requirements.
0
For the reasons set forth in the preamble, 7 CFR part 929 is amended as
follows:
PART 929--CRANBERRIES GROWN IN THE STATES OF MASSACHUSETTS, RHODE
ISLAND, CONNECTICUT, NEW JERSEY, WISCONSIN, MICHIGAN, MINNESOTA,
OREGON, WASHINGTON, AND LONG ISLAND IN THE STATE OF NEW YORK
0
1. The authority citation for 7 CFR part 929 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
0
2. Section 929.236 is revised to read as follows:
Sec. 929.236 Assessment rate.
On and after September 1, 2006, an assessment rate of $.28 per
barrel is established for cranberries.
Dated: March 23, 2007.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E7-5791 Filed 3-28-07; 8:45 am]
BILLING CODE 3410-02-P
