Cherries Grown in Designated Counties in Washington; Increased Assessment Rate, 92557-92559 [2016-30302]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 81, Number 244 (Tuesday, December 20, 2016)]
[Rules and Regulations]
[Pages 92557-92559]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-30302]



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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 923

[Doc. No. AMS-SC-16-0077; SC16-923-1 FR]


Cherries Grown in Designated Counties in Washington; Increased 
Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule implements a recommendation from the Washington 
Cherry Marketing Committee (Committee) to increase the assessment rate 
established for the 2016-2017 and subsequent fiscal periods from $0.15 
to $0.25 per ton of Washington cherries handled. The Committee locally 
administers the marketing order and is comprised of growers and 
handlers of cherries operating within the production area. Assessments 
upon cherry handlers are used by the Committee to fund reasonable and 
necessary expenses of the marketing order. The fiscal period begins 
April 1 and ends March 31. The assessment rate will remain in effect 
indefinitely unless modified, suspended or terminated.

DATES: Effective December 21, 2016.

FOR FURTHER INFORMATION CONTACT: Teresa Hutchinson or Gary D. Olson, 
Northwest Marketing Field Office, Marketing Order and Agreement 
Division, Specialty Crops Program, AMS, USDA; Telephone: (503) 326-
2724, Fax: (503) 326-7440, or Email: Teresa.Hutchinson@ams.usda.gov or 
GaryD.Olson@ams.usda.gov.
    Small businesses may request information on complying with this 
regulation by contacting Richard Lower, Marketing Order and Agreement 
Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue 
SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, 
Fax: (202) 720-8938, or Email: Richard.Lower@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order 
No. 923, as amended (7 CFR part 923), regulating the handling of 
cherries grown in designated counties in Washington, hereinafter 
referred to as the ``order.'' The order is effective under the 
Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-
674), hereinafter referred to as the ``Act.''
    The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Orders 12866, 13563, and 13175.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the order now in effect, Washington cherry 
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 Washington 
cherries beginning April 1, 2016, and continue until amended, 
suspended, or terminated.
    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 increases the assessment rate for the 2016-2017 and 
subsequent fiscal periods from $0.15 to $0.25 per ton of Washington 
cherries handled.
    The order provides authority for the Committee, 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 
Committee are growers and handlers of Washington cherries. 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.
    For the 2013-2014 and subsequent fiscal periods, the Committee 
recommended, and the USDA approved, an assessment rate of $0.15 per ton 
of Washington cherries 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 May 18, 2016, and unanimously recommended 
expenditures of $57,150 for the 2016-2017 fiscal period. In comparison, 
the previous fiscal period's budgeted expenditures were $59,750. The 
Committee also unanimously recommended an assessment rate of $0.25 per 
ton of Washington cherries. The recommended assessment rate of $0.25 is 
$0.10 higher than the rate currently in effect.
    The expenditures recommended by the Committee for the 2016-2017 
fiscal period include $25,000 for the management fee; $7,000 for 
compliance; $5,000 for the data management fee; $5,000 for accounting 
administration; $5,000 for research; $4,000 for Committee travel; 
$3,000 for an audit; and $3,150 for other miscellaneous expenses. In 
comparison, expenditures for the 2015-2016 fiscal period were $25,000 
for the management fee; $7,000 for compliance; $5,000 for the data 
management fee; $7,000 for accounting administration; $5,000 for 
research; $4,000 for Committee travel; $4,000 for an audit; and $2,750 
for other miscellaneous expenses.
    Committee members estimated the 2016 fresh cherry production to be 
approximately 150,000 tons, which would be less than the 2015 
production of 165,358 tons by 15,358 tons. However, cherry production 
tends to fluctuate due to the effects of weather, pollination, and tree 
health. The Committee's recommended assessment rate was derived by 
dividing the 2016-2017 anticipated expenses by the expected shipments 
of Washington cherries, while also taking into account the Committee's 
monetary reserve. The recommended assessment rate of $0.25 per ton, 
when multiplied by the 150,000 tons of estimated 2016 Washington cherry 
shipments, is expected to generate $37,500 in handler assessments. The 
projected revenue from handler assessments, together with funds from 
the Committee's monetary reserve, should be adequate to cover the 2016-
2017 budgeted expenses of $57,150. The Committee expects its monetary 
reserve to decrease from $49,661 at the beginning of the 2016-2017 
fiscal period to approximately $30,011 at the end of the 2016-2017 
fiscal period. That amount will be within the provisions of the order 
and will provide the Committee with greater ability to absorb 
fluctuations in assessment income and expenses into the future.
    The assessment rate established in this rule will continue in 
effect indefinitely unless modified, suspended, or terminated by USDA

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upon recommendation and information submitted by the Committee or other 
available information.
    Although this assessment rate will be in effect 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 and 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 2016-2017 budget and those 
for subsequent fiscal periods will be reviewed and, as appropriate, 
approved by USDA.

Final Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) 
has considered the economic impact of this rule on small entities. 
Accordingly, AMS has prepared this final regulatory flexibility 
analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
businesses 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 53 handlers of Washington sweet cherries subject to 
regulation under the order and approximately 1,500 growers in the 
regulated production area. Small agricultural service firms are defined 
by the Small Business Administration (13 CFR 121.201) as those having 
annual receipts of less than $7,500,000, and small agricultural growers 
are defined as those having annual receipts of less than $750,000.
    National Agricultural Statistics Service has prepared a preliminary 
report for the 2015 shipping season showing that prices for the 171,600 
tons of sweet cherries that entered the fresh market averaged $2,380 
per ton. Based on the number of growers in the production area (1,500), 
the average grower revenue from the sale of sweet cherries in 2015 can 
therefore be estimated at approximately $272,272 per year. In addition, 
the Committee reports that most of the industry's 53 handlers reported 
gross receipts of less than $7,500,000 from the sale of fresh sweet 
cherries last fiscal period. Thus, the majority of growers and handlers 
of Washington sweet cherries may be classified as small entities.
    This action increases the assessment rate established for the 
Committee and collected from handlers for the 2016-2017 and subsequent 
fiscal periods from $0.15 to $0.25 per ton of Washington cherries 
handled. The Committee unanimously recommended 2016-2017 expenditures 
of $57,150 and an assessment rate of $0.25 per ton. The assessment rate 
of $0.25 is $0.10 higher than the rate established for the 2013-2014 
fiscal period.
    The 2016-2017 Washington cherry crop is estimated at 150,000 tons. 
At the $0.25 per ton assessment rate, the Committee anticipates that 
assessment income of approximately $37,500, along with reserve funds, 
should be adequate to cover budgeted expenses for the 2016-2017 fiscal 
period. With the increased assessment rate and budgeted expense level, 
the Committee anticipates that $19,650 will need to be deducted from 
the monetary reserve. As such, reserve funds are estimated to be at 
$30,011 on March 31, 2017. That reserve level is within the maximum 
permitted by the order of approximately one fiscal period's operational 
expenses (Sec.  923.42(a)(2)).
    The expenditures recommended by the Committee for the 2016-2017 
fiscal period include $25,000 for the management fee; $7,000 for 
compliance; $5,000 for the data management fee; $5,000 for accounting 
administration; $5,000 for research; $4,000 for Committee travel; 
$3,000 for the audit; and $3,150 for other miscellaneous expenses.
    In comparison, expenditures for the 2015-2016 fiscal period were 
$25,000 for the management fee; $7,000 for compliance; $5,000 for the 
data management fee; $7,000 for accounting administration; $5,000 for 
research; $4,000 for Committee travel; $4,000 for the audit; and $2,750 
for other miscellaneous expenses.
    The Committee discussed alternatives to this action, including 
recommending alternative expenditure levels and assessment rates. 
Although lower assessment rates were considered, none were selected 
because they would not have generated sufficient income to administer 
the order.
    A review of historical data and preliminary information pertaining 
to the upcoming fiscal period indicates that the grower price for the 
2016-2017 fiscal period could average $2,380 per ton of sweet cherries. 
Therefore, the estimated assessment revenue for the 2016-2017 fiscal 
period, as a percentage of total grower revenue, is approximately 0.01 
percent.
    This action increases the assessment obligation imposed on 
handlers. While assessments impose some additional costs on handlers, 
the costs are minimal and uniform on all handlers. Some of the 
additional costs may be passed on to growers. However, these costs are 
offset by the benefits derived by the operation of the order.
    In addition, the Committee's meeting was widely publicized 
throughout the Washington cherry industry and all interested persons 
were invited to attend the meeting and participate in Committee 
deliberations on all issues. Like all Committee meetings, the May 18, 
2016, meeting was a public meeting and all entities, both large and 
small, were able to express views on this issue.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the order's information collection requirements have been 
previously approved by the Office of Management and Budget (OMB) and 
assigned OMB No. 0581-0189 (Marketing Orders for Fruit Crops). No 
changes in those requirements are necessary as a result of this action. 
Should any changes become necessary, they would be submitted to OMB for 
approval.
    This rule imposes no additional reporting or recordkeeping 
requirements on either small or large Washington cherry 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. As noted in the 
initial regulatory flexibility analysis, USDA has not identified any 
relevant Federal rules that duplicate, overlap, or conflict with this 
final rule.
    AMS is committed to complying with the E-Government Act, to promote 
the use of the internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.
    A proposed rule concerning this action was published in the Federal 
Register on September 21, 2016 (81 FR 64785). Copies of the proposed 
rule were also emailed to all commodity handlers. Finally, the proposal 
was made available through the Internet by USDA and the Office of the 
Federal Register. A 15-day comment period ending October 6, 2016, was 
provided

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for interested persons to respond to the proposal.
    One comment was received during the comment period in response to 
the proposal. The commenter was concerned about the impact that the 
increased assessment rate would have on growers. The commenter also 
questioned why the assessment is only applied to certain counties in 
Washington, and not others. In addition, the commenter stated that the 
opinions of sweet cherry growers and handlers should be taken into 
consideration when establishing assessment rates, and that there should 
be flexibility during the transitional period when a new assessment 
rate is implemented. Lastly, the commenter offered recommendations with 
regards to the assessment rate establishment process and took exception 
to the indefinite period that assessment rates are in effect.
    Under the order, it is handlers that are assessed, not growers. As 
such, growers will not be directly impacted by this action. However, as 
mentioned previously in this rule, some of the additional costs to 
handlers as a result of this action may be passed on to growers. 
Nevertheless, USDA believes that such additional costs will be offset 
by the benefits derived by the operation of the order.
    Furthermore, the commenter's request for clarity with regards to 
why only certain counties are covered by this regulatory change is 
addressed in the order's provisions. Section 923.4 defines the order's 
production area as the counties of Okanogan, Chelan, Kittitas, Yakima, 
Klickitat in the State of Washington and all of the counties in 
Washington lying east thereof. Only handlers who handle cherries grown 
within the specific production area are subject to assessment.
    Lastly, the commenter's thoughts regarding the assessment rate 
establishment process and effective period have been previously 
addressed in this rule. The Committee meets 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 USDA. 
Committee meetings are open to the public and interested persons may 
express their views at these meetings.
    Meetings are widely publicized throughout the Washington cherry 
industry and all interested persons are invited to attend the meetings 
and participate in Committee deliberations on all issues. In addition, 
interested persons are invited to submit comments on any proposed 
assessment rules. All comments are considered prior to finalization of 
a proposed rule. Once established, assessment rates remain in effect 
until modified by USDA upon the recommendation of the Committee.
    Accordingly, no changes will be made to the rule as proposed, based 
on the comment received.
    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/rules-regulations/moa/small-businesses. Any questions 
about the compliance guide should be sent to Richard Lower 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 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: (1) The 
2016-2017 fiscal period began on April 1, 2016, and the order requires 
that the assessment rate for each fiscal period apply to all assessable 
Washington cherries handled during such fiscal period; (2) the 
Committee needs to have sufficient funds to pay its expenses, which are 
incurred on a continuous basis; (3) handlers have already shipped 
Washington cherries from the 2016 crop; and (4) handlers are aware of 
this action, which was unanimously recommended by the Committee at a 
public meeting and is similar to other assessment rate actions issued 
in past years.

List of Subjects in 7 CFR Part 923

    Cherries, Marketing agreements, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 923 is 
amended as follows:

PART 923--CHERRIES GROWN IN DESIGNATED COUNTIES IN WASHINGTON

0
1. The authority citation for 7 CFR part 923 continues to read as 
follows:

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

0
2. Section 923.236 is revised to read as follows:


Sec.  923.236  Assessment rate.

    On and after April 1, 2016, an assessment rate of $0.25 per ton is 
established for the Washington Cherry Marketing Committee.

    Dated: December 12, 2016.
Bruce Summers,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2016-30302 Filed 12-19-16; 8:45 am]
 BILLING CODE 3410-02-P