Walnuts Grown in California; Decreased Assessment Rate, 73761-73764 [E8-28766]
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73761
Rules and Regulations
Federal Register
Vol. 73, No. 234
Thursday, December 4, 2008
This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents. Prices of
new books are listed in the first FEDERAL
REGISTER issue of each week.
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 984
[Docket No. AMS–FV–08–0093; FV09–984–
2 IFR]
Walnuts Grown in California;
Decreased Assessment Rate
Agricultural Marketing Service,
USDA.
ACTION: Interim final rule with request
for comments.
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AGENCY:
SUMMARY: This rule decreases the
assessment rate established for the
California Walnut Board (Board) for the
2008–09 and subsequent marketing
years from $0.0158 to $0.0131 per
kernelweight pound of assessable
walnuts. The Board locally administers
the marketing order which regulates the
handling of walnuts grown in
California. Assessments upon walnut
handlers are used by the Board to fund
reasonable and necessary expenses of
the program. The marketing year begins
September 1 and ends August 31. The
assessment rate will remain in effect
indefinitely unless modified,
suspended, or terminated.
DATES: Effective December 5, 2008.
Comments received by February 2,
2009, will be considered prior to
issuance of a final rule.
ADDRESSES: Interested persons are
invited to submit written comments
concerning 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: https://
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
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15:50 Dec 03, 2008
Jkt 217001
Office of the Docket Clerk during regular
business hours, or can be viewed at:
https://www.regulations.gov. All
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 the Web site referenced above.
FOR FURTHER INFORMATION CONTACT:
Debbie Wray, Marketing Specialist, or
Kurt J. Kimmel, Regional Manager,
California Marketing Field Office,
Marketing Order Administration
Branch, Fruit and Vegetable Programs,
AMS, USDA; Telephone: (559) 487–
5901, Fax: (559) 487–5906, or E-mail:
Debbie.Wray@usda.gov, or
Kurt.Kimmel@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.
SUPPLEMENTARY INFORMATION: This rule
is issued under Marketing Order No.
984, as amended (7 CFR part 984),
regulating the handling of walnuts
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 Order
12866.
This rule has been reviewed under
Executive Order 12988, Civil Justice
Reform. Under the marketing order now
in effect, California walnut 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 walnuts
beginning on September 1, 2008, 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
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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 decreases the assessment
rate established for the Board for the
2008–09 and subsequent marketing
years from $0.0158 to $0.0131 per
kernelweight pound of assessable
walnuts.
The California walnut 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 producers and handlers
of California walnuts. They are familiar
with the Board’s needs and 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 2008–09 and subsequent
marketing years, the Board
recommended, and USDA approved, an
assessment rate of $0.0158 per
kernelweight pound of assessable
walnuts that would continue in effect
from year to year unless modified,
suspended, or terminated by USDA
upon recommendation and information
submitted by the Board or other
information available to the USDA. The
Board recommended this rate in May
2008 along with expenditures of
$4,594,300 for 2008–09.
The Board met on September 12,
2008, and unanimously recommended
reducing its 2008–09 expenditures to
$3,809,000 and reducing the assessment
rate to $0.0131 per kernelweight pound
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Federal Register / Vol. 73, No. 234 / Thursday, December 4, 2008 / Rules and Regulations
of assessable walnuts. The assessment
rate of $0.0131 per kernelweight pound
of assessable walnuts is $0.0027 per
kernelweight pound lower than the rate
currently in effect. The decreased
assessment rate is primarily due to an
$800,000 decrease in domestic market
development expenditures previously
recommended for the 2008–09
marketing year.
The following table compares major
budget expenditures recommended by
the Board in May 2008 and September
2008 for the 2008–09 marketing year:
Original
2008–09
Budget expense categories
Employee Expenses ................................................................................................................................................
Travel/Board Expenses ...........................................................................................................................................
Office Costs/Annual Audit ........................................................................................................................................
Program Expenses Including Research:
Controlled Purchases .......................................................................................................................................
Crop Acreage Survey .......................................................................................................................................
Crop Estimate ...................................................................................................................................................
Production Research * ......................................................................................................................................
Domestic Market Development ........................................................................................................................
Reserve for Contingency ..................................................................................................................................
Revised
2008–09
$410,500
100,000
142,500
$410,500
100,000
142,500
5,000
........................
110,000
835,000
2,935,000
56,300
5,000
........................
110,000
835,000
2,135,000
71,000
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* Includes Research Director’s compensation and a contingency for production research issues.
The assessment rate recommended by
the Board was derived by dividing
anticipated expenses by expected
shipments of California walnuts
certified as merchantable. Merchantable
shipments for the year are estimated at
290,773,800 kernelweight pounds
which should provide slightly over
$3,809,000 in assessment income and
allow the Board to cover its expenses.
Unexpended funds may be retained in
a financial reserve, provided that funds
in the financial reserve do not exceed
approximately two years’ budgeted
expenses. If not retained in a financial
reserve, unexpended funds may be used
temporarily to defray expenses of the
subsequent marketing year, but must be
made available to the handlers from
whom collected within 5 months after
the end of the year, according to
§ 984.69 of the order.
The estimate for merchantable
shipments is based on historical data,
which is the prior year’s production of
323,082 tons (inshell). Pursuant to
§ 984.51(b) of the order, this figure was
converted to a merchantable
kernelweight basis using a factor of 0.45
(323,082 tons × 2,000 pounds per ton ×
0.45).
The assessment rate established in
this rule 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 is
effective for an indefinite period, the
Board will continue to meet prior to or
during each marketing 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
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15:50 Dec 03, 2008
Jkt 217001
and interested persons may express
their views at these meetings. USDA
will 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 2008–09 budget
and those for subsequent marketing
years will be reviewed and, as
appropriate, approved by USDA.
Initial 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 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 currently 55 handlers of
California walnuts subject to regulation
under the marketing order, and there are
approximately 4,000 growers in the
production area. Small agricultural
service firms are defined by the Small
Business Administration (SBA) (13 CFR
121.201) as those having annual receipts
of less than $7,000,000, and small
agricultural producers are defined as
those having annual receipts of less than
$750,000.
USDA’s National Agricultural
Statistics Service (NASS) reports that
California walnuts were harvested from
a total of 218,000 bearing acres during
2007–08. The average yield for the
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2007–08 crop was 1.49 tons per acre,
which is slightly lower than the 1.53
tons per acre average for the previous
five years. NASS reported the value of
the 2007–08 crop at $2,320 per ton,
which is considerably higher than the
previous five-year average of $1,384 per
ton.
At the time of the 2002 Census of
Agriculture, which is the most recent
information available, approximately 83
percent of California’s walnut farms
were smaller than 100 acres. Fortyseven percent were between 1 and 15
acres. A 100-acre farm with an average
yield of 1.49 tons per acre would have
been expected to produce about 149
tons of walnuts during 2007–08. At
$2,320 per ton, that farm’s production
would have had an approximate value
of $345,000. Assuming that the majority
of California’s walnut farms are still
smaller than 100 acres, it could be
concluded that the majority of the
growers had receipts of less than
$345,000 in 2007–08. This is well below
the SBA threshold of $750,000; thus, the
majority of California’s walnut growers
would be considered small growers
according to SBA’s definition.
According to information supplied by
the industry, approximately two-thirds
of California’s walnut handlers shipped
merchantable walnuts valued under
$7,000,000 during the 2007–08
marketing year and would therefore be
considered small handlers according to
the SBA definition.
This rule decreases the assessment
rate established for the Board and
collected from handlers for the 2008–09
and subsequent marketing years from
$0.0158 per kernelweight pound of
assessable walnuts to $0.0131 per
kernelweight pound of assessable
walnuts. The Board unanimously
recommended 2008–09 expenditures of
$3,809,000 and an assessment rate of
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Federal Register / Vol. 73, No. 234 / Thursday, December 4, 2008 / Rules and Regulations
$0.0131 per kernelweight pound of
assessable walnuts. The assessment rate
of $0.0131 is $0.0027 lower than the rate
currently in effect. The quantity of
assessable walnuts for the 2008–09
marketing year is estimated at 323,082
tons. Thus, the $0.0131 rate should
provide slightly over $3,809,000 in
assessment income and be adequate to
meet the year’s expenses. The decreased
assessment rate is primarily due to an
73763
$800,000 decrease in domestic market
development expenditures.
The following table compares major
budget expenditures recommended by
the Board in May 2008 and September
2008 for the 2008–09 marketing year:
Original
2008–09
Budget expense categories
Employee Expenses ................................................................................................................................................
Travel/Board Expenses ...........................................................................................................................................
Office Costs/Annual Audit ........................................................................................................................................
Program Expenses Including Research:
Controlled Purchases .......................................................................................................................................
Crop Acreage Survey .......................................................................................................................................
Crop Estimate ...................................................................................................................................................
Production Research * ......................................................................................................................................
Domestic Market Development ........................................................................................................................
Reserve for Contingency ..................................................................................................................................
Revised
2008–09
$410,500
100,000
142,500
$410,500
100,000
142,500
5,000
........................
110,000
835,000
2,935,000
56,300
5,000
........................
110,000
835,000
2,135,000
71,000
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* Includes Research Director’s compensation and a contingency for production research issues.
The Board reviewed and unanimously
recommended 2008–09 expenditures of
$3,809,000. Prior to arriving at this
budget, the Board considered alternative
expenditure levels but ultimately
decided that the recommended levels
were reasonable to properly administer
the order. The assessment rate
recommended by the Board was derived
by dividing anticipated expenses by
expected shipments of California
walnuts certified as merchantable.
Merchantable shipments for the year are
estimated at 290,773,800 kernelweight
pounds which should provide
$3,809,000 in assessment income and
allow the Board to cover its expenses.
Unexpended funds may be retained in
a financial reserve, provided that funds
in the financial reserve do not exceed
approximately two years’ budgeted
expenses. If not retained in a financial
reserve, unexpended funds may be used
temporarily to defray expenses of the
subsequent marketing year, but must be
made available to the handlers from
whom collected within 5 months after
the end of the year, according to
§ 984.69 of the order.
According to NASS, the season
average grower price for years 2006 and
2007 were $1,630 and $2,320 per ton,
respectively. These prices provide a
range within which the 2008–09 season
average price could fall. Dividing these
average grower prices by 2,000 pounds
per ton provides an inshell price per
pound range of $0.815 to $1.16.
Dividing these inshell prices per pound
by the 0.45 conversion factor (inshell to
kernelweight) established in the order
yields a 2008–09 price range estimate of
$1.81 to $2.58 per kernelweight pound
of assessable walnuts.
To calculate the percentage of grower
revenue represented by the assessment
rate, the assessment rate of $0.0131 per
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15:50 Dec 03, 2008
Jkt 217001
kernelweight pound is divided by the
low and high estimates of the price
range. The estimated assessment
revenue for the 2008–09 marketing year
as a percentage of total grower revenue
would thus likely range between 0.508
and 0.724 percent.
This action decreases 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 reduces
the burden on handlers, and may reduce
the burden on producers. In addition,
the Board’s meeting was widely
publicized throughout the California
walnut industry and all interested
persons were invited to attend the
meeting and participate in Board
deliberations on all issues. Like all
Board meetings, the September 12,
2008, meeting was a public meeting and
all entities, both large and small, were
able to express views on this issue.
Finally, interested persons are invited to
submit comments on this interim final
rule, including the regulatory and
informational impacts of this action on
small businesses.
This action imposes no additional
reporting or recordkeeping requirements
on either small or large California
walnut 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 Internet and other information
technologies to provide increased
opportunities for citizen access to
Government information and services,
and for other purposes.
PO 00000
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USDA has not identified any relevant
Federal rules that duplicate, overlap, or
conflict with this rule.
A small business guide on complying
with fruit, vegetable, and specialty crop
marketing agreements and orders may
be viewed at:
https://www.ams.usda.gov/AMSv1.0/
ams.fetchTemplateData.do?
template=TemplateN&page=Marketing
OrdersSmallBusinessGuide. 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 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.
Pursuant to 5 U.S.C. 553, it is also
found and determined upon good cause
that it is impracticable, unnecessary,
and contrary to the public interest to
give preliminary notice prior to putting
this rule into effect, and that good cause
exists for not postponing the effective
date of this rule until 30 days after
publication in the Federal Register
because (1) the 2008–09 marketing year
began on September 1, 2008, and the
marketing order requires that the rate of
assessment for each year apply to all
assessable walnuts handled during the
year; (2) the action decreases the
assessment rate for assessable walnuts
beginning with the 2008–09 marketing
year; (3) handlers are aware of this
action which was unanimously
recommended by the Board at a public
meeting and is similar to other
assessment rate actions issued in past
years; and (4) this interim final rule
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Federal Register / Vol. 73, No. 234 / Thursday, December 4, 2008 / Rules and Regulations
provides a 60-day comment period, and
all comments timely received will be
considered prior to finalization of this
rule.
List of Subjects in 7 CFR Part 984
Walnuts, Marketing agreements, Nuts,
Reporting and recordkeeping
requirements.
For the reasons set forth in the
preamble, 7 CFR part 984 is amended as
follows:
■
PART 984—WALNUTS GROWN IN
CALIFORNIA
1. The authority citation for 7 CFR
part 984 continues to read as follows:
■
Authority: 7 U.S.C. 601–674.
2. Section 984.347 is revised to read
as follows:
■
§ 984.347
Assessment rate.
Background
On and after September 1, 2008, an
assessment rate of $0.0131 per
kernelweight pound is established for
California merchantable walnuts.
Dated: November 26, 2008.
James E. Link,
Administrator, Agricultural Marketing
Service.
[FR Doc. E8–28766 Filed 12–2–08; 11:15 am]
BILLING CODE 3410–02–P
DEPARTMENT OF AGRICULTURE
Commodity Credit Corporation
7 CFR Part 1430
RIN 0560–AH83
Milk Income Loss Contract Program
and Price Support Program for Milk
Commodity Credit Corporation,
USDA.
ACTION: Final rule.
erowe on PROD1PC64 with RULES
AGENCY:
SUMMARY: This rule amends the
regulations for the Milk Income Loss
Contract (MILC) Program, as authorized
by the Food, Conservation, and Energy
Act of 2008 (the 2008 Farm Bill), to
extend the program from October 1,
2007, through September 30, 2012. This
rule also increases the percentage rate
for the payment calculation after fiscal
year (FY) 2008 and increases the
payment quantity limitation of eligible
pounds of milk per operation beginning
in FY 2009. This rule also provides for
an adjustment to the MILC payment rate
if feed costs increase above a specified
level. This rule is needed to extend the
MILC program, which is designed to
stabilize and generally enhance milk
producer revenue, through FY 2012 and
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15:50 Dec 03, 2008
Jkt 217001
to make changes to that program
authorized by the 2008 Farm Bill. This
rule also adjusts the milk price support
program regulations to specify that
support purchases will only be made
from manufacturers and not from third
parties such as brokers.
DATES: Effective Date: December 1, 2008.
FOR FURTHER INFORMATION CONTACT:
Danielle Cooke, Special Programs
Manager, Price Support Division, FSA,
USDA, STOP 0512, 1400 Independence
Ave., SW., Washington, DC 20250–0512;
telephone: (202) 720–1919; fax: (202)
690–1536; e-mail:
Danielle.Cooke@wdc.usda.gov. Persons
with disabilities who require alternative
means for communication (Braille, large
print, audio tape, etc.) should contact
the USDA Target Center at (202) 720–
2600 (voice and TDD).
SUPPLEMENTARY INFORMATION:
This final rule implements changes in
the MILC program enacted in section
1506 in Title I of the 2008 Farm Bill
(Pub. L. 110–246, 7 U.S.C. 8773). It, in
effect, permits new contracts to extend
the old MILC program first provided for
in Section 1502 of the Food Security
and Rural Investment Act of 2002 (Pub.
L. 107–171, 7 U.S.C. 7982). That
program, as amended by subsequent
enactments, ended its coverage with
milk marketed in September of 2007.
The 2008 Farm Bill permits coverage
starting with October 2007 marketings
carrying through September 2012
marketings. The ‘‘old’’ program,
regulations were codified in 7 CFR part
1430. This rule, to provide for the
‘‘new’’ program, modifies 7 CFR part
1430 to:
• Cover marketings during the new
period and make changes to the
payment rate formula used to calculate
payments;
• Change the production limits for
payments during specific periods;
• Add applicability of Adjusted Gross
Income (AGI) provisions to eligibility
requirements; and
• Add provisions to adjust the
payment rate if feed costs exceed a
specified level.
With certain per year per operation
eligibility pound limits, the MILC
program provides payments to dairy
operations when milk prices fall below
a set benchmark. What constitutes an
‘‘operation’’ for purposes of the ‘‘new’’
program, including poundage limits,
will be determined as before. All prior
participants in the ‘‘old’’ program must
sign new contracts. New participants
(those not in the ‘‘old’’ program) cannot
be affiliated with prior participants.
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Fmt 4700
Sfmt 4700
Also, the rule, as required by the 2008
Farm Bill, beginning in FY 2009, sets
new eligibility limits tied to the AGI of
persons or entities seeking payment.
Payees for the relevant year cannot have
nonfarm income in excess of $500,000.
AGI rules will cover multi-program
regulations to be issued separately.
As indicated, there is a per-operation
per year pound limit to the MILC
payment eligibility of operations. For
FY 2009 (October 1, 2008, through
September 30, 2009), FY 2010 (October
1, 2009, through September 30, 2010),
FY 2011 (October 1, 2010, through
September 30, 2011), and FY 2012
(October 1, 2011, through September 30,
2012), the limit for each fiscal year is
2.985 million pounds. Further, no
payments will be made for September
2012 marketings, as specified in the
2008 Farm Bill, if the operation’s
cumulative total for FY 2012 is over 2.4
million pounds and if the operation is
under that amount the payable
marketings for September will be
limited to those that will not bring the
total over 2.4 million pounds. Payments
are computed, however, on a monthly
basis. They are made only when the
official Federal class I milk marketing
order milk price per cwt. for Boston,
Massachusetts is less than $16.94. When
the Boston price is under the target, the
payment for eligible production will be,
for FYs 2009 through 2012, 45 percent
of the difference. Otherwise, for
September 2012 marketings the
percentage will be 34 percent. The pay
rate can be raised, by command of the
2008 Farm Bill; however, if the National
Average Feed Dairy Feed Ration Cost as
officially computed exceeds $7.35 per
cwt. ($9.50 per cwt. for September 2012
marketings). If the triggering feed ration
amount is exceeded, the benchmark
$16.94 figure for the MILC payment rate
calculation will be increased by the
percentage amount which is 45 percent
of the percentage amount by which the
Feed Ration Cost exceeded its own
benchmark ($7.35 or $9.50, depending
on the month involved). Feed Ration
Cost is calculated using the same
procedures used to calculate the feed
components of the estimated price of 16
percent Mixed Dairy Feed per pound as
reported in the USDA Agricultural
Prices publication. Entire month prices
used to calculate feed price ratios for
each month will be used. As to the
calculation, if for example, the May
2009 Feed Ration Cost exceed by 14
percent the $7.35 per cwt. benchmark,
then the MILC payment benchmark for
May 2009 marketings would be
increased by 6.3 percent (45% of 14%)
E:\FR\FM\04DER1.SGM
04DER1
]]>Agencies
[Federal Register Volume 73, Number 234 (Thursday, December 4, 2008)]
[Rules and Regulations]
[Pages 73761-73764]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-28766]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
week.
========================================================================
Federal Register / Vol. 73, No. 234 / Thursday, December 4, 2008 /
Rules and Regulations
[[Page 73761]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 984
[Docket No. AMS-FV-08-0093; FV09-984-2 IFR]
Walnuts Grown in California; Decreased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim final rule with request for comments.
-----------------------------------------------------------------------
SUMMARY: This rule decreases the assessment rate established for the
California Walnut Board (Board) for the 2008-09 and subsequent
marketing years from $0.0158 to $0.0131 per kernelweight pound of
assessable walnuts. The Board locally administers the marketing order
which regulates the handling of walnuts grown in California.
Assessments upon walnut handlers are used by the Board to fund
reasonable and necessary expenses of the program. The marketing year
begins September 1 and ends August 31. The assessment rate will remain
in effect indefinitely unless modified, suspended, or terminated.
DATES: Effective December 5, 2008. Comments received by February 2,
2009, will be considered prior to issuance of a final rule.
ADDRESSES: Interested persons are invited to submit written comments
concerning 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: https://
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: https://
www.regulations.gov. All 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 the Web site
referenced above.
FOR FURTHER INFORMATION CONTACT: Debbie Wray, Marketing Specialist, or
Kurt J. Kimmel, Regional Manager, California Marketing Field Office,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA; Telephone: (559) 487-5901, Fax: (559) 487-5906, or E-mail:
Debbie.Wray@usda.gov, or Kurt.Kimmel@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.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order
No. 984, as amended (7 CFR part 984), regulating the handling of
walnuts 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 Order 12866.
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. Under the marketing order now in effect, California
walnut 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
walnuts beginning on September 1, 2008, 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 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 decreases the assessment rate established for the Board
for the 2008-09 and subsequent marketing years from $0.0158 to $0.0131
per kernelweight pound of assessable walnuts.
The California walnut 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 producers and handlers of
California walnuts. They are familiar with the Board's needs and 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 2008-09 and subsequent marketing years, the Board
recommended, and USDA approved, an assessment rate of $0.0158 per
kernelweight pound of assessable walnuts that would continue in effect
from year to year unless modified, suspended, or terminated by USDA
upon recommendation and information submitted by the Board or other
information available to the USDA. The Board recommended this rate in
May 2008 along with expenditures of $4,594,300 for 2008-09.
The Board met on September 12, 2008, and unanimously recommended
reducing its 2008-09 expenditures to $3,809,000 and reducing the
assessment rate to $0.0131 per kernelweight pound
[[Page 73762]]
of assessable walnuts. The assessment rate of $0.0131 per kernelweight
pound of assessable walnuts is $0.0027 per kernelweight pound lower
than the rate currently in effect. The decreased assessment rate is
primarily due to an $800,000 decrease in domestic market development
expenditures previously recommended for the 2008-09 marketing year.
The following table compares major budget expenditures recommended
by the Board in May 2008 and September 2008 for the 2008-09 marketing
year:
------------------------------------------------------------------------
Original 2008- Revised 2008-
Budget expense categories 09 09
------------------------------------------------------------------------
Employee Expenses....................... $410,500 $410,500
Travel/Board Expenses................... 100,000 100,000
Office Costs/Annual Audit............... 142,500 142,500
Program Expenses Including Research:
Controlled Purchases................ 5,000 5,000
Crop Acreage Survey................. .............. ..............
Crop Estimate....................... 110,000 110,000
Production Research *............... 835,000 835,000
Domestic Market Development......... 2,935,000 2,135,000
Reserve for Contingency............. 56,300 71,000
------------------------------------------------------------------------
* Includes Research Director's compensation and a contingency for
production research issues.
The assessment rate recommended by the Board was derived by
dividing anticipated expenses by expected shipments of California
walnuts certified as merchantable. Merchantable shipments for the year
are estimated at 290,773,800 kernelweight pounds which should provide
slightly over $3,809,000 in assessment income and allow the Board to
cover its expenses. Unexpended funds may be retained in a financial
reserve, provided that funds in the financial reserve do not exceed
approximately two years' budgeted expenses. If not retained in a
financial reserve, unexpended funds may be used temporarily to defray
expenses of the subsequent marketing year, but must be made available
to the handlers from whom collected within 5 months after the end of
the year, according to Sec. 984.69 of the order.
The estimate for merchantable shipments is based on historical
data, which is the prior year's production of 323,082 tons (inshell).
Pursuant to Sec. 984.51(b) of the order, this figure was converted to
a merchantable kernelweight basis using a factor of 0.45 (323,082 tons
x 2,000 pounds per ton x 0.45).
The assessment rate established in this rule 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 is effective for an indefinite
period, the Board will continue to meet prior to or during each
marketing 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 will 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 2008-09 budget and those for subsequent
marketing years will be reviewed and, as appropriate, approved by USDA.
Initial 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 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 currently 55 handlers of California walnuts subject to
regulation under the marketing order, and there are approximately 4,000
growers in the production area. Small agricultural service firms are
defined by the Small Business Administration (SBA) (13 CFR 121.201) as
those having annual receipts of less than $7,000,000, and small
agricultural producers are defined as those having annual receipts of
less than $750,000.
USDA's National Agricultural Statistics Service (NASS) reports that
California walnuts were harvested from a total of 218,000 bearing acres
during 2007-08. The average yield for the 2007-08 crop was 1.49 tons
per acre, which is slightly lower than the 1.53 tons per acre average
for the previous five years. NASS reported the value of the 2007-08
crop at $2,320 per ton, which is considerably higher than the previous
five-year average of $1,384 per ton.
At the time of the 2002 Census of Agriculture, which is the most
recent information available, approximately 83 percent of California's
walnut farms were smaller than 100 acres. Forty-seven percent were
between 1 and 15 acres. A 100-acre farm with an average yield of 1.49
tons per acre would have been expected to produce about 149 tons of
walnuts during 2007-08. At $2,320 per ton, that farm's production would
have had an approximate value of $345,000. Assuming that the majority
of California's walnut farms are still smaller than 100 acres, it could
be concluded that the majority of the growers had receipts of less than
$345,000 in 2007-08. This is well below the SBA threshold of $750,000;
thus, the majority of California's walnut growers would be considered
small growers according to SBA's definition.
According to information supplied by the industry, approximately
two-thirds of California's walnut handlers shipped merchantable walnuts
valued under $7,000,000 during the 2007-08 marketing year and would
therefore be considered small handlers according to the SBA definition.
This rule decreases the assessment rate established for the Board
and collected from handlers for the 2008-09 and subsequent marketing
years from $0.0158 per kernelweight pound of assessable walnuts to
$0.0131 per kernelweight pound of assessable walnuts. The Board
unanimously recommended 2008-09 expenditures of $3,809,000 and an
assessment rate of
[[Page 73763]]
$0.0131 per kernelweight pound of assessable walnuts. The assessment
rate of $0.0131 is $0.0027 lower than the rate currently in effect. The
quantity of assessable walnuts for the 2008-09 marketing year is
estimated at 323,082 tons. Thus, the $0.0131 rate should provide
slightly over $3,809,000 in assessment income and be adequate to meet
the year's expenses. The decreased assessment rate is primarily due to
an $800,000 decrease in domestic market development expenditures.
The following table compares major budget expenditures recommended
by the Board in May 2008 and September 2008 for the 2008-09 marketing
year:
------------------------------------------------------------------------
Original 2008- Revised 2008-
Budget expense categories 09 09
------------------------------------------------------------------------
Employee Expenses....................... $410,500 $410,500
Travel/Board Expenses................... 100,000 100,000
Office Costs/Annual Audit............... 142,500 142,500
Program Expenses Including Research:
Controlled Purchases................ 5,000 5,000
Crop Acreage Survey................. .............. ..............
Crop Estimate....................... 110,000 110,000
Production Research *............... 835,000 835,000
Domestic Market Development......... 2,935,000 2,135,000
Reserve for Contingency............. 56,300 71,000
------------------------------------------------------------------------
* Includes Research Director's compensation and a contingency for
production research issues.
The Board reviewed and unanimously recommended 2008-09 expenditures
of $3,809,000. Prior to arriving at this budget, the Board considered
alternative expenditure levels but ultimately decided that the
recommended levels were reasonable to properly administer the order.
The assessment rate recommended by the Board was derived by dividing
anticipated expenses by expected shipments of California walnuts
certified as merchantable. Merchantable shipments for the year are
estimated at 290,773,800 kernelweight pounds which should provide
$3,809,000 in assessment income and allow the Board to cover its
expenses. Unexpended funds may be retained in a financial reserve,
provided that funds in the financial reserve do not exceed
approximately two years' budgeted expenses. If not retained in a
financial reserve, unexpended funds may be used temporarily to defray
expenses of the subsequent marketing year, but must be made available
to the handlers from whom collected within 5 months after the end of
the year, according to Sec. 984.69 of the order.
According to NASS, the season average grower price for years 2006
and 2007 were $1,630 and $2,320 per ton, respectively. These prices
provide a range within which the 2008-09 season average price could
fall. Dividing these average grower prices by 2,000 pounds per ton
provides an inshell price per pound range of $0.815 to $1.16. Dividing
these inshell prices per pound by the 0.45 conversion factor (inshell
to kernelweight) established in the order yields a 2008-09 price range
estimate of $1.81 to $2.58 per kernelweight pound of assessable
walnuts.
To calculate the percentage of grower revenue represented by the
assessment rate, the assessment rate of $0.0131 per kernelweight pound
is divided by the low and high estimates of the price range. The
estimated assessment revenue for the 2008-09 marketing year as a
percentage of total grower revenue would thus likely range between
0.508 and 0.724 percent.
This action decreases 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 reduces the burden on handlers, and may reduce the
burden on producers. In addition, the Board's meeting was widely
publicized throughout the California walnut industry and all interested
persons were invited to attend the meeting and participate in Board
deliberations on all issues. Like all Board meetings, the September 12,
2008, meeting was a public meeting and all entities, both large and
small, were able to express views on this issue. Finally, interested
persons are invited to submit comments on this interim final rule,
including the regulatory and informational impacts of this action on
small businesses.
This action imposes no additional reporting or recordkeeping
requirements on either small or large California walnut 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 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.
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/AMSv1.0/
ams.fetchTemplateData.do?template=TemplateN&page=MarketingOrdersSmallBus
inessGuide. 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 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.
Pursuant to 5 U.S.C. 553, it is also found and determined upon good
cause that it is impracticable, unnecessary, and contrary to the public
interest to give preliminary notice prior to putting this rule into
effect, and that good cause exists for not postponing the effective
date of this rule until 30 days after publication in the Federal
Register because (1) the 2008-09 marketing year began on September 1,
2008, and the marketing order requires that the rate of assessment for
each year apply to all assessable walnuts handled during the year; (2)
the action decreases the assessment rate for assessable walnuts
beginning with the 2008-09 marketing year; (3) handlers are aware of
this action which was unanimously recommended by the Board at a public
meeting and is similar to other assessment rate actions issued in past
years; and (4) this interim final rule
[[Page 73764]]
provides a 60-day comment period, and all comments timely received will
be considered prior to finalization of this rule.
List of Subjects in 7 CFR Part 984
Walnuts, Marketing agreements, Nuts, Reporting and recordkeeping
requirements.
0
For the reasons set forth in the preamble, 7 CFR part 984 is amended as
follows:
PART 984--WALNUTS GROWN IN CALIFORNIA
0
1. The authority citation for 7 CFR part 984 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
0
2. Section 984.347 is revised to read as follows:
Sec. 984.347 Assessment rate.
On and after September 1, 2008, an assessment rate of $0.0131 per
kernelweight pound is established for California merchantable walnuts.
Dated: November 26, 2008.
James E. Link,
Administrator, Agricultural Marketing Service.
[FR Doc. E8-28766 Filed 12-2-08; 11:15 am]
BILLING CODE 3410-02-P
