Mango Promotion, Research, and Information Order; Assessment Increase, 21843-21846 [2012-8825]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 77, Number 71 (Thursday, April 12, 2012)]
[Rules and Regulations]
[Pages 21843-21846]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-8825]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1206

[Document No. AMS-FV-11-0021]


Mango Promotion, Research, and Information Order; Assessment 
Increase

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule amends the Mango Promotion, Research, and 
Information Order (Order) to increase the assessment rate on first 
handlers and importers of mangos from one-half cent per pound to three-
quarters of a cent per pound. The increase is permitted under the 
Order, which is authorized by the Commodity Promotion, Research, and 
Information Act of 1996 (Act). The National Mango Board (Board), which 
administers the Order, recommended this action to ensure that the 
Board's research and promotion programs continue to be adequately 
funded.

[[Page 21844]]


DATES: Effective Date: September 1, 2012.

FOR FURTHER INFORMATION CONTACT: Veronica Douglass, Marketing 
Specialist, Research and Promotion Division, Fruit and Vegetable 
Programs, AMS, U.S. Department of Agriculture, Stop 0244, Room 1406-S, 
1400 Independence Avenue SW., Washington, DC 20250-0244; telephone: 
888-720-9917; fax: 202-205-2800; or email: 
veronica.douglass@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This rule is issued under the Mango 
Promotion, Research, and Consumer Information Order (Order) [7 CFR part 
1206]. The Order is authorized under the Commodity Promotion, Research, 
and Information Act of 1996 (Act) [7 U.S.C. 7411-7425].

Executive Order 12866

    The Office of Management and Budget (OMB) has waived the review 
process required by Executive Order 12866 for this action.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. It is not intended to have a retroactive effect.
    Section 524 of the Act provides that the Act shall not affect or 
preempt any other State or Federal law authorizing promotion or 
research relating to an agricultural commodity.
    Under the Act, a person subject to an order may file a petition 
with the U.S. Department of Agriculture (Department) stating that an 
order, any provision of an order, or any obligation imposed in 
connection with an order, is not established in accordance with the 
law, and requesting a modification of an order or an exemption from an 
order. Any petition filed challenging an order, any provision of an 
order, or any obligation imposed in connection with an order, shall be 
filed within two years after the effective date of an order, provision, 
or obligation subject to challenge in the petition. The petitioner will 
have the opportunity for a hearing on the petition. Thereafter, the 
Department will issue a ruling on the petition. The Act provides that 
the district court of the United States for any district in which the 
petitioner resides or conducts business shall have the jurisdiction to 
review a final ruling on the petition, if the petitioner files a 
complaint for that purpose not later than 20 days after the date of the 
entry of the Department's final ruling.

Regulatory Flexibility Analysis and Paperwork Reduction Act

    In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C. 
601-612), the Agricultural Marketing Service (AMS) has considered the 
economic impact of this rule on small entities that would be affected 
by this rule. The purpose of the RFA is to fit regulatory action to 
scale on businesses subject to such action, so that small businesses 
will not be disproportionately burdened.
    The Small Business Administration defines small agricultural 
producers as those having annual receipts of no more than $750,000, and 
small agricultural service firms as those having annual receipts of no 
more than $7 million (13 CFR part 121). First handlers and importers 
would be considered agricultural service firms, and the majority of 
mango producers, first handlers and importers would be considered small 
businesses. Although this criterion does not factor in additional 
monies that may be received by producers, first handlers and importers 
of mangos, it is an inclusive standard for identifying small entities.
    First handlers and importers who market or import less than 500,000 
pounds of mangos annually are exempt from the assessment. Mangos that 
are exported out of the United States are also exempt from assessment. 
In addition, domestic and foreign producers are not subject to 
assessment under the Order, but such individuals are eligible to serve 
on the Board along with importers and first handlers. Currently, fewer 
than five first handlers and 193 importers are subject to assessment 
under the Order.
    Under the current Order, first handlers and importers of 500,000 
pounds or more of mangos per year each pay a mandatory assessment of 
one-half cent per pound of mangos handled or imported. The amendment to 
the Order would increase the rate of assessment currently paid by first 
handlers and importers of mangos to three-quarters of a cent per pound. 
Exempt handlers and importers would remain exempt from assessment. 
While this amendment will have an economic impact on handlers and 
importers of more than 500,000 pounds of mangos per year, the impact is 
expected to be offset by the benefits to the mango industry. Assessment 
revenue is used by the Board to finance promotion, research, and 
information programs designed to increase consumer demand for mangos. 
Assessments at the current rate of one-half cent per pound generate 
about $3.4 million in annual revenue. The Order is administered by the 
Board under the Department's supervision.
    According to the Board, additional revenue is needed to avoid 
reductions in the promotions budget and to increase investment in 
marketing and research programs. At its September 2009 meeting, the 
Board voted to propose a 50 percent increase in the mango assessment 
rate upon completion of the March 2010 referendum to determine whether 
mango handlers and importers favored continuation of the Order. The 
increase in the assessment rate is consistent with section 1206.42(b) 
of the Order, which permits modification of the assessment rate by the 
Board with the approval of the Secretary, after the first referendum is 
conducted.
    Mango assessment collections began on January 3, 2005, however, 
Board activities did not begin until 2006. Consequently, the Board was 
able to grow a considerable reserve that was used to supplement annual 
assessment revenues from 2007 until 2009. In 2010, higher than expected 
assessment revenue made it possible for the Board to operate without 
exceeding the total assessments collected for that year and to begin 
2011 with approximately $1.6 million in available resources. However, 
with 2011 spending projected at approximately $4.3 million and 
assessment income projected at approximately $3.2 million, the Board is 
expected to begin 2012 with a reserve of $505,244. With no extra funds 
available from reserves, and if the assessment rate is kept at the 
current level, the Board's budget would have to be decreased.
    In 2010, an econometric study of the effects of the Board's 
promotion activities on U.S. mango demand was conducted by Dr. Ronald 
Ward of the University of Florida (2010 economic study). The study 
indicates that from 2005 through 2009, the value of mango imports to 
the U.S. grew from $169 million to $217 million. This is significant as 
the vast majority of mangos consumed in the U.S. are imported. The 
growth in value is the result of both higher prices and greater volumes 
imported. The study also found that the Board's activities have had a 
positive economic impact on the demand for mangos, both in attracting 
more buyers and in increasing the number of mangos purchased per buyer. 
According to the study, increased spending by the Board would 
correspond to increases in market penetration and the number of 
households purchasing mangos. Likewise, decreased spending would 
correspond to declines in both of those areas. Based on the analysis of 
these two

[[Page 21845]]

factors and the value of mango imports, the study concludes that every 
$1 invested in the Board adds an additional $7 to mango freight on 
board revenues. This study is available from the Board and on the 
Agricultural Marketing Service Web site (www.ams.usda.gov/fvpromotion).
    An increase of one quarter of a cent per pound in the mango 
assessment rate is expected to add an additional $1.6 million per year 
to the Board's assessment revenue. With the additional revenue 
collected, the Board intends to invest primarily in marketing and 
research programs. In addition, the Board would be able to establish a 
contingency fund to ensure consistent funding in the face of market 
instability.
    The Board considered three alternatives prior to recommending that 
the assessment rate be increased. First, the Board considered reducing 
investment in its research program. However, postponing research 
projects, such as the human nutrition studies that may help the Board 
to develop health messages that increase demand for mangos, could 
hinder expansion of the U.S. mango market. Second, the Board considered 
limiting investment in programs designed to improve the quality of 
mangos available at the retail level. Delivering higher quality mangos 
to U.S. consumers is one of the Board's top priorities because higher 
quality often translates to higher demand. Third, the Board considered 
reducing funding for its marketing programs. Lowering the funding level 
for marketing programs would significantly reduce the Board's ability 
to conduct promotion and consumer marketing activities, thereby 
hindering its efforts to increase demand for mangos.
    This rule does not impose additional recordkeeping requirements on 
first handlers, importers, or producers of mangos. First handlers or 
importers of less than 500,000 pounds of mangos per year are exempt.
    There are no Federal rules that duplicate, overlap, or conflict 
with this rule. Additionally, section 517(c) of the Act states that not 
more than one assessment may be levied on a first handler or importer.
    In accordance with OMB regulation [5 CFR part 1320] that implements 
information collection requirements imposed by the Paperwork Reduction 
Act of 1995 [44 U.S.C. 3501-3520], there are no new requirements 
contained in this rule. The information collection requirements imposed 
by the Order have been previously approved under OMB control number 
0581-0093. This rule does not result in a change to the information 
collection and recordkeeping requirements.

Background

    Under the Order, the Board administers a nationally coordinated 
program of research and promotion designed to strengthen the position 
of mangos in the marketplace and to establish, maintain, and expand 
U.S. markets for mangos. The program is financed by assessments on 
first handlers and importers of 500,000 pounds or more of mangos per 
year. The Order specifies that first handlers are responsible for 
submitting assessments to the Board on a monthly basis and maintaining 
records necessary to verify their reporting. Assessments paid by 
importers are collected and remitted to the Board by the U.S. Customs 
and Border Protection Service.
    This rule increases the mango assessment rate, by one quarter of a 
cent per pound, to three quarters of a cent per pound. Currently, the 
assessment rate is one half cent per pound of mangos handled 
domestically or imported into the United States. In order to sustain 
and expand its promotion, research, and communications programs, the 
Board contends that additional revenue is required. The assessment rate 
increase is expected to generate an additional $1.6 million annually, 
depending on the volume of mangos handled in the United States or 
imported into the United States. In 2010, a total of 717,830,404 pounds 
of mangos were subject to assessment, resulting in approximately $3.6 
million in assessment revenue. Less than one percent of the total 
assessments were from domestic handlers as the vast majority of 
assessments were collected from importers. The Board states that the 
assessment rate increase will enable it to make additional investments 
in its marketing and research programs. In addition, the Board states 
that some of the additional revenue may be used to establish a 
contingency fund to ensure consistent funding for its programs.
    The Board, whose members represent domestic producers, first 
handlers, importers, and foreign producers, voted at its September 12, 
2009 meeting to increase the assessment rate by one quarter of a cent 
per pound after the March 2010 continuance referendum. Of the members 
present at the meeting, 9 voted in favor and 4 opposed proposal of the 
assessment rate increase. The four Board members who voted against the 
assessment increase stated that the increase would be passed on to 
mango producers. The assessment will be imposed on first handlers and 
importers who pay assessments under the Order. Business decisions on 
how to manage assessments, including whether to pass back the cost of 
assessments to producers, are made by handlers and importers based on 
their respective business practices.
    Accordingly, this action will amend the Order by changing the 
current assessment rate of one half cent per pound of mangos, as stated 
in section 1206.42(b), to three quarters of a cent per pound.
    A proposed rule concerning this action was published in the Federal 
Register on May 10, 2011 [76 FR 26946]. Copies of the proposed rule 
were made available on the Internet at www.ams.usda.gov/fvpromotion and 
www.regulations.gov. In addition, AMS published a press release 
announcing the comment period. The proposed rule provided a 60-day 
comment period, which ended July 11, 2011. Twenty comments were 
received by the deadline.

Summary of Comments

    Of the 20 comments received regarding the proposed rule, 17 
supported and three opposed the proposed amendment.
    A total of 11 commenters supported the assessment rate increase 
based on positive results already achieved by the Board. Their comments 
stated that the Board has increased mango consumption and market 
penetration, fostered better relations between consumers and the mango 
industry, and educated consumers and industry stakeholders about 
mangos. One commenter noted that because of the Board's efforts, more 
than 4,000 in-store mango tasting events have been conducted, the 
number of restaurants offering mango dishes has grown, more benefits 
stemming from mango consumption have been discovered, and the mango 
industry has a united consumer marketing message. Two commenters noted 
specific support for the Board's health research activities.
    Six commenters supported the assessment rate increase as a means of 
ensuring the Board's programs are adequately funded. Two commenters 
stated that the Board's programs are essential to maintain the growth 
in U.S. demand for mangos. One commenter also stated that the proposed 
increase in assessments is needed to keep up the momentum of the 
Board's current promotion and research activities. One commenter noted 
that any additional revenue should be used primarily for promotion and 
research programs rather than overhead expenses.

[[Page 21846]]

    One supportive commenter noted that all Board expenditures must be 
approved by the Board members, who represent the interests of different 
regions and countries. Because the Board is comprised of members from 
six countries and the Commonwealth of Puerto Rico, the ability of the 
Board to come to a consensus on activities and expenditures is valuable 
to the entire mango industry. One comment cited the geographic 
diversity of the Board as a key reason for its success because a wide 
variety of viewpoints are represented by the Board members. The fact 
that the assessment increase is favored by a majority of Board members 
demonstrates the breadth of support for the increase from throughout 
the mango industry.
    Another commenter stated that the proposed assessment increase has 
been discussed with all mango industry stakeholders, and is favored by 
organizations in Mexico, Peru, Guatemala, Haiti, Ecuador and Brazil. In 
order to determine whether foreign producers would support an 
assessment increase, the Board held informational meetings in each of 
the countries that export mangos to the United States. At these 
meetings, Board representatives explained the activities conducted with 
assessment funds and received positive feedback from attendees on the 
proposed assessment increase.
    One of the comments in support of the assessment increase was 
received from a Mexican mango industry organization. In addition to 
their own comments, several commenters submitted correspondence from 
foreign agricultural organizations indicating their support for the 
assessment increase. Letters of support were received on behalf of 
organizations in Haiti, Peru, Guatemala, Ecuador, and Brazil.
    One commenter opposed the assessment increase, stating that the 
Board can fulfill its objectives at its current funding level. As the 
Board stated in its proposal, without an increase in the assessment 
rate, spending on mango research and promotion programs would need to 
be reduced. As stated previously, the 2010 econometric study concluded 
that decreased spending on the Board's programs would correspond to 
declines in mango purchases.
    One commenter opposed the assessment increase, stating that raising 
the assessment rate would harm mango importers already coping with 
higher freight rates and poor currency exchange rates. In response, 
another commenter argued that the assessment is an investment rather 
than an expense. This same commenter further stated that the investment 
in the Board would be used to improve market penetration, thereby 
improving returns to growers and shippers, and offsetting the higher 
costs. Additionally, the 2010 econometric study found that increased 
spending by the Board provides a large increase in revenues to 
importers.
    One commenter opposed the assessment increase, stating that the 
current assessment provides a negative return on investment. Another 
commenter also noted that the Board should ensure that its investments 
are yielding reasonable returns. One commenter further stated that the 
assessment rate needed to sufficiently fund promotion programs would 
likely be 20 times the proposed rate of three quarters of a cent per 
pound. No evidence was offered to support this claim. According to the 
2010 econometric study, every $1 currently spent by the Board adds an 
additional $7 to mango freight on board revenues.
    The Department has considered all of the comments and is not making 
any changes to the proposed rule.
    After consideration of all relevant material presented, the Board's 
recommendation, public comments and other information, it is hereby 
found that this rule, as published in the Federal Register on May 10, 
2011 [76 FR 26946], is consistent with and will effectuate the purpose 
of the Act.

List of Subjects in 7 CFR Part 1206

    Administrative practice and procedure, Advertising, Consumer 
information, Marketing agreements, Mango promotion, Reporting and 
recordkeeping requirements.

    For the reasons set forth in the preamble, 7 CFR part 1206 is 
amended as follows:

PART 1206--MANGO PROMOTION, RESEARCH, AND INFORMATION

0
1. The authority citation for 7 CFR part 1206 continues to read as 
follows:

    Authority:  7 U.S.C. 7411-7425 and 7 U.S.C. 7401.


0
2. In Sec.  1206.42, paragraph (b) is revised to read as follows:


Sec.  1206.42  Assessments.

* * * * *
    (b) The assessment rate shall be \3/4\ of a cent per pound on all 
mangos. The assessment rate will be reviewed and may be modified by the 
Board with the approval of the Department, after the first referendum 
is conducted as stated in Sec.  1206.71(b). The Department will amend 
this section if the assessment rate is modified.
* * * * *

    Dated: April 6, 2012.
David R. Shipman,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2012-8825 Filed 4-11-12; 8:45 am]
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