Marketing Order Regulating the Handling of Spearmint Oil Produced in the Far West; Increased Assessment Rate, 41325-41328 [2020-13614]
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Federal Register / Vol. 85, No. 133 / Friday, July 10, 2020 / Rules and Regulations
assigned OMB No. 0581–0178 Vegetable
and Specialty Crops. No changes in
those requirements will be necessary as
a result of this rule. Should any changes
become necessary, they would be
submitted to OMB for approval.
This rule will not impose any
additional reporting or recordkeeping
requirements on either small or large
Walla Walla sweet onion 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 March 31, 2020 (85 FR
17768). Copies of the proposed rule
were also mailed or sent via email to all
Walla Walla sweet onion handlers. The
proposal was made available through
the internet by USDA and the Office of
the Federal Register. A 60-day comment
period ending June 1, 2020, was
provided for interested persons to
respond to the proposal. No comments
were received. Accordingly, no changes
will be made to the proposed 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/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 will tend to effectuate the
declared policy of the Act.
jbell on DSKJLSW7X2PROD with RULES
List of Subjects in 7 CFR Part 956
Marketing agreements, Reporting and
recordkeeping requirements, Walla
Walla sweet onions.
For the reasons set forth in the
preamble, 7 CFR part 956 is amended as
follows:
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PART 956—WALLA WALLA SWEET
ONIONS GROWN IN THE WALLA
WALLA VALLEY OF SOUTHEAST
WASHINGTON AND NORTHEAST
OREGON
1. The authority citation for 7 CFR
part 956 continues to read as follows:
■
Authority: 7 U.S.C. 601–674.
2. Section 956.202 is revised to read
as follows:
■
§ 956.202
Assessment rate.
On and after January 1, 2020, an
assessment rate of $0.15 per 50-pound
bag or equivalent is established for
Walla Walla sweet onions.
Bruce Summers,
Administrator, Agricultural Marketing
Service.
[FR Doc. 2020–13502 Filed 7–9–20; 8:45 am]
BILLING CODE P
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 985
[Doc. No. AMS–SC–20–0029; SC20–985–2
FR]
Marketing Order Regulating the
Handling of Spearmint Oil Produced in
the Far West; Increased Assessment
Rate
Agricultural Marketing Service,
USDA.
ACTION: Final rule.
AGENCY:
This final rule implements a
recommendation from the Far West
Spearmint Oil Administrative
Committee (Committee) to increase the
assessment rate established for the
2020–2021 and subsequent marketing
years. The assessment rate will remain
in effect indefinitely unless modified,
suspended, or terminated.
DATES: Effective August 10, 2020.
FOR FURTHER INFORMATION CONTACT:
Joshua Wilde, Marketing Specialist, or
Gary Olson, Regional Director,
Northwest Marketing Field Office,
Marketing Order and Agreement
Division, Specialty Crops Program,
AMS, USDA; Telephone: (503) 326–
2055, Fax: (503) 326–7440, or Email:
Joshua.R.Wilde@usda.gov or
GaryD.Olson@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,
SUMMARY:
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41325
DC 20250–0237; Telephone: (202) 720–
2491, Fax: (202) 720–8938, or Email:
Richard.Lower@usda.gov.
SUPPLEMENTARY INFORMATION: This
action, pursuant to 5 U.S.C. 553,
amends regulations issued to carry out
a marketing order as defined in 7 CFR
900.2(j). This final rule is issued under
Marketing Order No. 985, as amended (7
CFR part 985), regulating the handling
of spearmint oil produced in the Far
West. Part 985 (referred to as 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
Committee locally administers the
Order and is comprised of spearmint oil
producers operating within the
production area, and a public member.
The Department of Agriculture
(USDA) is issuing this rule in
conformance with Executive Orders
13563 and 13175. This final rule falls
within a category of regulatory actions
that the Office of Management and
Budget (OMB) exempted from Executive
Order 12866 review. Additionally,
because this rule does not meet the
definition of a significant regulatory
action, it does not trigger the
requirements contained in Executive
Order 13771. See OMB’s Memorandum
titled ‘‘Interim Guidance Implementing
Section 2 of the Executive Order of
January 30, 2017, titled ‘Reducing
Regulation and Controlling Regulatory
Costs’ ’’ (February 2, 2017).
This rule has been reviewed under
Executive Order 12988, Civil Justice
Reform. Under the Order now in effect,
Far West spearmint oil handlers are
subject to assessments. Funds to
administer the Order are obtained from
such assessments. The assessment rate
will be applicable to all assessable
spearmint oil for the 2020–2021
marketing year, 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
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review USDA’s ruling on the petition,
provided an action is filed no later than
20 days after the date of the entry of the
ruling.
This final rule increases the
assessment rate from $0.10 per pound,
the rate that was established for the
2019–2020 marketing year, to $0.14 per
pound of Far West spearmint oil
handled for the 2020–2021 and
subsequent marketing years.
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 are familiar with the
Committee’s needs and with the costs of
goods and services in their local area
and are 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 2019–2020 and subsequent
marketing years, the Committee
recommended, and USDA approved, an
assessment rate of $0.10 per pound of
Far West spearmint oil handled. That
assessment rate would continue in effect
from marketing year to marketing year
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 February 26,
2020, and unanimously recommended
expenditures of $214,825 and an
assessment rate of $0.14 per pound of
Far West spearmint oil handled for the
2020–2021 and subsequent marketing
years. In comparison, the previous
year’s budgeted expenditures were
$272,850. The assessment rate of $0.14
is $0.04 higher than the $0.10 rate
currently in effect. The Committee
recommended the assessment rate
increase because expenditures have
exceeded assessment revenue in the
previous six marketing years and
financial reserves have been reduced to
approximately $87,468. The Committee
believes that drawing from reserves to
fund operations is not a sustainable
strategy and that the previous
assessment increase from $0.09 to $0.10
per pound of spearmint oil handled,
effective for the 2019–2020 and
subsequent marketing years, was not
sufficient to offset declining sales
volume and increasing costs. The
Committee projects expenses to exceed
income by $63,525 if the assessment
rate is left unchanged for the 2020–2021
marketing year. The Committee believes
that the $0.14 per pound assessment
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rate will allow the Committee to
adequately balance budgeted expenses
with projected income for the 2020–
2021 and subsequent marketing years.
The major expenditures
recommended by the Committee for the
2020–2021 marketing year include
$169,000 for contracted administration
by Ag Association Management, Inc.,
$26,025 for administrative expenses,
$8,800 for Committee expenses, $6,500
for software/website maintenance, and
$4,500 for market research and
development projects. In comparison,
major expenses for the 2019–2020
marketing year included $169,000 for
contracted administration, $30,850 for
administrative expenses, $15,000 for
Committee expenses, $6,500 for
software/website maintenance, and
$13,000 for market research and
development projects.
The Committee derived the
recommended assessment rate by
considering anticipated expenses,
expected spearmint oil sales, and the
amount of funds available in the
authorized reserve. Income derived from
handler assessments, calculated at
$210,000 (1,500,000 pounds of
spearmint oil × $0.14 per pound
assessment rate), along with $1,300 in
other income and $3,525 from reserve
funds, will be sufficient to cover
budgeted expenses of $214,825. Funds
in the reserve (estimated to be $87,468
at the beginning of the 2020–2021
marketing year) will be kept within the
maximum permitted by § 985.42(a) of
the Order and will not exceed
approximately one marketing year’s
operational expenses.
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 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 marketing year 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.
USDA will evaluate Committee
recommendations and other available
information to determine whether
modification of the assessment rate is
needed. Further rulemaking would be
undertaken as necessary. The
Committee’s 2020–2021 marketing year
budget, and those for subsequent
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marketing years, 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
final 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 approximately 41 producers
and 94 producers of Scotch and Native
spearmint oil, respectively, in the
regulated area and approximately 8
spearmint oil handlers subject to
regulation under the Order. Small
agricultural producers are defined by
the Small Business Administration
(SBA) as those having annual receipts of
less than $1,000,000, and small
agricultural service firms have been
defined as those whose annual receipts
are less than $30,000,000 (13 CFR
121.201).
The Committee reported that recent
producer prices for spearmint oil range
from $14.00 to $17.50 per pound. The
National Agricultural Statistics Service
(NASS) reported that the 2018 U.S.
season average spearmint oil producer
price per pound was $16.80.
Multiplying $16.80 per pound by 2018–
2019 marketing year spearmint oil
utilization of 1,963,028 million pounds
yields a crop value estimate of about
$33.0 million. Total 2018–2019
marketing year spearmint oil utilization,
reported by the Committee, was 717,952
pounds and 1,245,076 pounds for
Scotch and Native spearmint oil,
respectively.
Given the reporting requirements for
the volume regulation provisions of the
Order, the Committee maintains
accurate records of each producer’s
production and sales. Using the $16.80
average spearmint oil price, and
Committee production data for each
producer, the Committee estimates that
38 of the 41 Scotch spearmint oil
producers and 89 of the 94 Native
spearmint oil producers could be
classified as small entities under the
SBA definition.
There is no third party or
governmental entity that collects and
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Federal Register / Vol. 85, No. 133 / Friday, July 10, 2020 / Rules and Regulations
reports spearmint oil prices received by
spearmint oil handlers. However, the
Committee estimates an average
spearmint oil handling markup at
approximately 20 percent of the price
received by producers. Multiplying 1.20
by the 2018 producer price of $16.80
yields a handler free on board (FOB)
price estimate of $20.16 per pound.
Multiplying this estimated handler
FOB price by spearmint oil utilization of
1,963,028 pounds results in an
estimated handler-level spearmint oil
value of $39.6 million. Dividing this
figure by the number of handlers (8)
yields estimated average annual handler
receipts of about $5.0 million, which is
well below the SBA threshold for small
agricultural service firms.
Furthermore, using confidential data
on pounds handled by each handler,
and the abovementioned estimated
handler price per pound, the Committee
reported that it is not likely that any of
the eight handlers had a 2018–2019
marketing year spearmint oil sales value
that exceeded the $30 million SBA
threshold.
Therefore, many of the Far West
spearmint oil producers may be
classified as small entities and all of the
Far West spearmint oil handlers may be
classified as small entities.
This final rule increases the
assessment rate collected from handlers
for the 2020–2021 and subsequent
marketing years from $0.10 to $0.14 per
pound of spearmint oil handled. The
Committee unanimously recommended
2020–2021 expenditures of $214,825
and an assessment rate of $0.14 per
pound of spearmint oil. The $0.14 per
pound assessment rate is $0.04 higher
than the rate previously in effect.
The Committee estimates that the
industry will handle 1,500,000 pounds
of spearmint oil during the 2020–2021
marketing year. Thus, the $0.14 per
pound rate should provide $210,000 in
assessment income. The Committee
anticipates that income derived from
handler assessments, along with $1,300
of other income and $3,525 from its
reserve fund, will fully fund all
budgeted expenses for the 2020–2021
marketing year. Furthermore, the
Committee expects that assessment
revenue will completely cover budgeted
expenses for the 2021–2022 and
subsequent marketing years.
The major expenditures
recommended by the Committee for the
2020–2021 marketing year include
$169,000 for contracted administration
by Ag Association Management, Inc.,
$26,025 for administrative expenses,
$8,800 for Committee expenses, $6,500
for software/website maintenance, and
$4,500 for market research and
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development projects. Budgeted
expenses for these items in the 2019–
2020 marketing year were $169,000,
$30,850, $15,000, $6,500, and $13,000,
respectively.
The Committee recommended the
assessment rate increase because
expenditures have exceeded assessment
revenue in the previous six marketing
years and financial reserves have been
reduced to approximately $87,468. The
Committee believes that drawing from
reserves to fund operations is not a
sustainable strategy and that the
previous assessment increase from $0.09
to $0.10 per pound of Far West
spearmint oil handled was not sufficient
to offset declining sales volume. The
Committee projected expenses to exceed
income by $63,525 if the assessment
rate was left unchanged for the 2020–
2021 marketing year. Increasing the
continuing assessment rate will allow
the Committee to adequately balance
budgeted expenses with projected
income for the 2020–2021 and
subsequent marketing years.
Prior to arriving at this budget and
assessment rate, the Committee
discussed various alternatives,
including maintaining the current
assessment rate of $0.10 per pound and
increasing the assessment rate to a
different amount. However, leaving the
assessment rate unchanged would have
required the Committee to deplete its
financial reserve to a fiscally
unsustainable level. Based on estimated
shipments, the established assessment
rate of $0.14 per pound of spearmint oil
should provide $210,000 in assessment
income. The Committee determined
assessment revenue will be adequate to
cover most of the budgeted expenditures
for the 2020–2021 marketing year and
all of the Committee’s budgeted
expenditures for subsequent marketing
years. Any excess funds will be used to
replenish the Committee’s monetary
reserve in the future. Reserve funds will
be kept within the amount authorized in
the Order.
A review of historical information and
preliminary information pertaining to
the upcoming marketing year indicates
that the average producer price for the
2020–2021 season is expected to be
approximately $15.90–17.40 per pound
of spearmint oil. Therefore, estimated
assessment revenue for the 2020–2021
marketing year as a percentage of total
producer revenue will be between 0.80
and 0.88 percent ($0.14 divided by
$17.40 and $15.90, respectively).
This action increases 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,
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41327
these costs are expected to be offset by
the benefits derived by the operation of
the Order.
The Committee’s meetings are widely
publicized throughout the Far West
spearmint oil industry. All interested
persons were invited to attend the
meetings and participate in Committee
deliberations on all issues. Like all
Committee meetings, the February 26,
2020, meeting was a public meeting and
all entities, both large and small, were
able to express views on this issue.
Interested persons were invited to
submit comments on this rule,
including the regulatory and
information collection impacts of this
action on small businesses.
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 OMB and
assigned OMB No. 0581–0178 Vegetable
and Specialty Crops. No changes in
those requirements will be necessary as
a result of this action. Should any
changes become necessary, they will be
submitted to OMB for approval.
This final rule will not impose any
additional reporting or recordkeeping
requirements on either small or large
Far West spearmint oil 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 April 27, 2020 (85 FR
23243). Copies of the proposed rule
were provided to all Far West spearmint
oil handlers. The proposal was also
made available through the internet by
USDA and the Office of the Federal
Register. A 30-day comment period
ending May 27, 2020, was provided for
interested persons to respond to the
proposal. No comments were received.
Accordingly, no changes will be made
to the rule as proposed.
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/
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Federal Register / Vol. 85, No. 133 / Friday, July 10, 2020 / Rules and 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 will tend to effectuate the
declared policy of the Act.
List of Subjects in 7 CFR Part 985
Marketing agreements, Oils and fats,
Reporting and recordkeeping
requirements, Spearmint oil.
For the reasons set forth in the
preamble, 7 CFR part 985 is amended as
follows:
PART 985—MARKETING ORDER
REGULATING THE HANDLING OF
SPEARMINT OIL PRODUCED IN THE
FAR WEST
1. The authority citation for 7 CFR
part 985 continues to read as follows:
■
Authority: 7 U.S.C. 601–674.
■
2. Revise § 985.141 to read as follows:
§ 985.141
Assessment rate.
On and after June 1, 2020, an
assessment rate of $0.14 per pound is
established for Far West spearmint oil.
Unexpended funds may be carried over
as a reserve.
Bruce Summers,
Administrator, Agricultural Marketing
Service.
[FR Doc. 2020–13614 Filed 7–9–20; 8:45 am]
BILLING CODE 3410–02–P
DEPARTMENT OF AGRICULTURE
Office of the Secretary
7 CFR Part 9
[Docket ID: FSA–2020–0004]
RIN 0503–AA65
Coronavirus Food Assistance
Program; Correction
Office of the Secretary, USDA.
Correcting amendments.
AGENCY:
ACTION:
The Secretary of Agriculture
implemented the Coronavirus Food
Assistance Program (CFAP), which
provides assistance to agricultural
producers impacted by the effects of the
COVID–19 outbreak, through a final rule
published in the Federal Register on
May 21, 2020. We realized that there
were errors in some of the payment rates
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SUMMARY:
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in that final rule. In addition, we were
able to reevaluate the payment rates for
certain specialty crops based on data
that was available from industry in
response to the CFAP notice of funding
availability, which was published in the
Federal Register on May 22, 2020. This
document corrects payment rates and
categories for those specialty crops that
were published in the final rule.
DATES: Effective Date: July 10, 2020.
FOR FURTHER INFORMATION CONTACT:
William L. Beam; telephone: (202) 720–
3175; email: Bill.Beam@usda.gov.
Persons with disabilities who require
alternative means for communication
should contact the USDA Target Center
at (202) 720–2600 (voice).
SUPPLEMENTARY INFORMATION: This
document corrects the CFAP regulations
in 7 CFR part 9, which were
implemented in the final rule that was
published in the Federal Register on
May 21, 2020 (85 FR 30825–30835).
This is the second set of corrections.
The first set of corrections was
published in the Federal Register on
June 12, 2020 (85 FR 35799–35800).
This document augments those
corrections.
In response to the notice of funding
availability published in the Federal
Register on May 22, 2020 (85 FR 31062–
31065), a few commenters stated that
USDA had miscalculated price
decreases for certain commodities.
USDA reviewed the data for all
specialty crop commodities and found
some inconsistencies in data points.
Accordingly, USDA is correcting the
errors to make apples, blueberries,
garlic, potatoes, raspberries, tangerines,
and taro eligible for payment under 7
CFR 9.5(b)(1), and adding CARES Act
payment rates for sales losses for those
crops to Table 1 to § 9.5(h).
USDA found that peaches and
rhubarb no longer qualify for payment
based on sales losses under § 9.5(b)(1).
Peaches showed a 3 percent sales price
decrease and rhubarb showed an
increase in sales price of 28 percent
when corrections to the data sets were
made. Therefore, we are removing the
CARES Act payment rates for sales
losses for these two crops from Table 1
to § 9.5(h).
USDA took into account data
submitted by the apple industry to
determine price eligibility under
§ 9.5(b)(1) for apples. The price data sets
came from actual sales of 43.8 million
bushels of apples that average 42
pounds. This quantity is more than half
of all the apples marketed during the
study period. The data came from
surveys of marketers from the four
largest apple producing states—
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Washington, New York, Michigan and
Pennsylvania. Those four states’
combined production is approximately
94 percent of the U.S. total. The
Washington State Tree Fruit Association
reflects approximately 85 percent of
Washington apple sales. Washington
state apple production comprises about
two-thirds of the U.S. total, but an even
higher share of total U.S. sales during
the study period. Data submitted
showed an industry average loss of 10.9
percent. Accordingly, USDA is adding
apple eligibility for payment losses.
USDA is also adding eligibility for
certain potatoes. Original prices used by
USDA for the May 12, 2020, rule
included all fresh potatoes and did not
include prices for processing or seed
potatoes as those are not obtained at
shipping points or terminal markets.
The potato industry submitted price
data from industry surveys and reports.
The industry data show that seed
potatoes had a 15 percent price decline
and fresh food retail and service
potatoes had a 6.7 percent price decline
over the rule stated period. However,
the industry reported fresh price only
for russet potatoes.
Another potato commenter used data
from one potato producing state to
determine shipping point price changes
for non-organic russet potatoes in 50-lb
units. Terminal market prices were also
reported. A notable difference between
the USDA payment calculations is that
prices generated by USDA included
prices from all states.
The potato industry also requested
payments for seed potatoes. Seed
potatoes can be any type of potato and
can be diverted to the fresh market if
needed. USDA agrees. Accordingly,
seed potatoes is now a category of
potatoes eligible for payment.
After reviewing all the data submitted
by the potato industry USDA agrees that
the potato category be corrected to be
divided as follows:
• Potatoes fresh—Russets;
• Potatoes fresh—other;
• Potatoes—processing; and
• Potatoes—seed.
Payment rates for these categories are
shown on the table below.
As discussed above, USDA is
correcting the payment rates in Table 1
to § 9.5(h) for apples, artichokes,
asparagus, blueberries, cantaloupes,
cucumbers, garlic, kiwifruit,
mushrooms, papaya, peaches, potatoes
(separated into categories for fresh—
Russets, fresh—other, processing, and
seed), raspberries, rhubarb, tangerines,
and taro.
The correction and addition in the
payment rates and the resulting changes
in the eligibility for specific types of
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]]>Agencies
[Federal Register Volume 85, Number 133 (Friday, July 10, 2020)]
[Rules and Regulations]
[Pages 41325-41328]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-13614]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 985
[Doc. No. AMS-SC-20-0029; SC20-985-2 FR]
Marketing Order Regulating the Handling of Spearmint Oil Produced
in the Far West; Increased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: This final rule implements a recommendation from the Far West
Spearmint Oil Administrative Committee (Committee) to increase the
assessment rate established for the 2020-2021 and subsequent marketing
years. The assessment rate will remain in effect indefinitely unless
modified, suspended, or terminated.
DATES: Effective August 10, 2020.
FOR FURTHER INFORMATION CONTACT: Joshua Wilde, Marketing Specialist, or
Gary Olson, Regional Director, Northwest Marketing Field Office,
Marketing Order and Agreement Division, Specialty Crops Program, AMS,
USDA; Telephone: (503) 326-2055, Fax: (503) 326-7440, or Email:
[email protected] or [email protected].
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: [email protected].
SUPPLEMENTARY INFORMATION: This action, pursuant to 5 U.S.C. 553,
amends regulations issued to carry out a marketing order as defined in
7 CFR 900.2(j). This final rule is issued under Marketing Order No.
985, as amended (7 CFR part 985), regulating the handling of spearmint
oil produced in the Far West. Part 985 (referred to as 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
Committee locally administers the Order and is comprised of spearmint
oil producers operating within the production area, and a public
member.
The Department of Agriculture (USDA) is issuing this rule in
conformance with Executive Orders 13563 and 13175. This final rule
falls within a category of regulatory actions that the Office of
Management and Budget (OMB) exempted from Executive Order 12866 review.
Additionally, because this rule does not meet the definition of a
significant regulatory action, it does not trigger the requirements
contained in Executive Order 13771. See OMB's Memorandum titled
``Interim Guidance Implementing Section 2 of the Executive Order of
January 30, 2017, titled `Reducing Regulation and Controlling
Regulatory Costs' '' (February 2, 2017).
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. Under the Order now in effect, Far West spearmint oil
handlers are subject to assessments. Funds to administer the Order are
obtained from such assessments. The assessment rate will be applicable
to all assessable spearmint oil for the 2020-2021 marketing year, 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
[[Page 41326]]
review USDA's ruling on the petition, provided an action is filed no
later than 20 days after the date of the entry of the ruling.
This final rule increases the assessment rate from $0.10 per pound,
the rate that was established for the 2019-2020 marketing year, to
$0.14 per pound of Far West spearmint oil handled for the 2020-2021 and
subsequent marketing years.
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 are
familiar with the Committee's needs and with the costs of goods and
services in their local area and are 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 2019-2020 and subsequent marketing years, the Committee
recommended, and USDA approved, an assessment rate of $0.10 per pound
of Far West spearmint oil handled. That assessment rate would continue
in effect from marketing year to marketing year 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 February 26, 2020, and unanimously recommended
expenditures of $214,825 and an assessment rate of $0.14 per pound of
Far West spearmint oil handled for the 2020-2021 and subsequent
marketing years. In comparison, the previous year's budgeted
expenditures were $272,850. The assessment rate of $0.14 is $0.04
higher than the $0.10 rate currently in effect. The Committee
recommended the assessment rate increase because expenditures have
exceeded assessment revenue in the previous six marketing years and
financial reserves have been reduced to approximately $87,468. The
Committee believes that drawing from reserves to fund operations is not
a sustainable strategy and that the previous assessment increase from
$0.09 to $0.10 per pound of spearmint oil handled, effective for the
2019-2020 and subsequent marketing years, was not sufficient to offset
declining sales volume and increasing costs. The Committee projects
expenses to exceed income by $63,525 if the assessment rate is left
unchanged for the 2020-2021 marketing year. The Committee believes that
the $0.14 per pound assessment rate will allow the Committee to
adequately balance budgeted expenses with projected income for the
2020-2021 and subsequent marketing years.
The major expenditures recommended by the Committee for the 2020-
2021 marketing year include $169,000 for contracted administration by
Ag Association Management, Inc., $26,025 for administrative expenses,
$8,800 for Committee expenses, $6,500 for software/website maintenance,
and $4,500 for market research and development projects. In comparison,
major expenses for the 2019-2020 marketing year included $169,000 for
contracted administration, $30,850 for administrative expenses, $15,000
for Committee expenses, $6,500 for software/website maintenance, and
$13,000 for market research and development projects.
The Committee derived the recommended assessment rate by
considering anticipated expenses, expected spearmint oil sales, and the
amount of funds available in the authorized reserve. Income derived
from handler assessments, calculated at $210,000 (1,500,000 pounds of
spearmint oil x $0.14 per pound assessment rate), along with $1,300 in
other income and $3,525 from reserve funds, will be sufficient to cover
budgeted expenses of $214,825. Funds in the reserve (estimated to be
$87,468 at the beginning of the 2020-2021 marketing year) will be kept
within the maximum permitted by Sec. 985.42(a) of the Order and will
not exceed approximately one marketing year's operational expenses.
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 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
marketing year 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. USDA will evaluate Committee
recommendations and other available information to determine whether
modification of the assessment rate is needed. Further rulemaking would
be undertaken as necessary. The Committee's 2020-2021 marketing year
budget, and those for subsequent marketing years, 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 final 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 approximately 41 producers and 94 producers of Scotch and
Native spearmint oil, respectively, in the regulated area and
approximately 8 spearmint oil handlers subject to regulation under the
Order. Small agricultural producers are defined by the Small Business
Administration (SBA) as those having annual receipts of less than
$1,000,000, and small agricultural service firms have been defined as
those whose annual receipts are less than $30,000,000 (13 CFR 121.201).
The Committee reported that recent producer prices for spearmint
oil range from $14.00 to $17.50 per pound. The National Agricultural
Statistics Service (NASS) reported that the 2018 U.S. season average
spearmint oil producer price per pound was $16.80. Multiplying $16.80
per pound by 2018-2019 marketing year spearmint oil utilization of
1,963,028 million pounds yields a crop value estimate of about $33.0
million. Total 2018-2019 marketing year spearmint oil utilization,
reported by the Committee, was 717,952 pounds and 1,245,076 pounds for
Scotch and Native spearmint oil, respectively.
Given the reporting requirements for the volume regulation
provisions of the Order, the Committee maintains accurate records of
each producer's production and sales. Using the $16.80 average
spearmint oil price, and Committee production data for each producer,
the Committee estimates that 38 of the 41 Scotch spearmint oil
producers and 89 of the 94 Native spearmint oil producers could be
classified as small entities under the SBA definition.
There is no third party or governmental entity that collects and
[[Page 41327]]
reports spearmint oil prices received by spearmint oil handlers.
However, the Committee estimates an average spearmint oil handling
markup at approximately 20 percent of the price received by producers.
Multiplying 1.20 by the 2018 producer price of $16.80 yields a handler
free on board (FOB) price estimate of $20.16 per pound.
Multiplying this estimated handler FOB price by spearmint oil
utilization of 1,963,028 pounds results in an estimated handler-level
spearmint oil value of $39.6 million. Dividing this figure by the
number of handlers (8) yields estimated average annual handler receipts
of about $5.0 million, which is well below the SBA threshold for small
agricultural service firms.
Furthermore, using confidential data on pounds handled by each
handler, and the abovementioned estimated handler price per pound, the
Committee reported that it is not likely that any of the eight handlers
had a 2018-2019 marketing year spearmint oil sales value that exceeded
the $30 million SBA threshold.
Therefore, many of the Far West spearmint oil producers may be
classified as small entities and all of the Far West spearmint oil
handlers may be classified as small entities.
This final rule increases the assessment rate collected from
handlers for the 2020-2021 and subsequent marketing years from $0.10 to
$0.14 per pound of spearmint oil handled. The Committee unanimously
recommended 2020-2021 expenditures of $214,825 and an assessment rate
of $0.14 per pound of spearmint oil. The $0.14 per pound assessment
rate is $0.04 higher than the rate previously in effect.
The Committee estimates that the industry will handle 1,500,000
pounds of spearmint oil during the 2020-2021 marketing year. Thus, the
$0.14 per pound rate should provide $210,000 in assessment income. The
Committee anticipates that income derived from handler assessments,
along with $1,300 of other income and $3,525 from its reserve fund,
will fully fund all budgeted expenses for the 2020-2021 marketing year.
Furthermore, the Committee expects that assessment revenue will
completely cover budgeted expenses for the 2021-2022 and subsequent
marketing years.
The major expenditures recommended by the Committee for the 2020-
2021 marketing year include $169,000 for contracted administration by
Ag Association Management, Inc., $26,025 for administrative expenses,
$8,800 for Committee expenses, $6,500 for software/website maintenance,
and $4,500 for market research and development projects. Budgeted
expenses for these items in the 2019-2020 marketing year were $169,000,
$30,850, $15,000, $6,500, and $13,000, respectively.
The Committee recommended the assessment rate increase because
expenditures have exceeded assessment revenue in the previous six
marketing years and financial reserves have been reduced to
approximately $87,468. The Committee believes that drawing from
reserves to fund operations is not a sustainable strategy and that the
previous assessment increase from $0.09 to $0.10 per pound of Far West
spearmint oil handled was not sufficient to offset declining sales
volume. The Committee projected expenses to exceed income by $63,525 if
the assessment rate was left unchanged for the 2020-2021 marketing
year. Increasing the continuing assessment rate will allow the
Committee to adequately balance budgeted expenses with projected income
for the 2020-2021 and subsequent marketing years.
Prior to arriving at this budget and assessment rate, the Committee
discussed various alternatives, including maintaining the current
assessment rate of $0.10 per pound and increasing the assessment rate
to a different amount. However, leaving the assessment rate unchanged
would have required the Committee to deplete its financial reserve to a
fiscally unsustainable level. Based on estimated shipments, the
established assessment rate of $0.14 per pound of spearmint oil should
provide $210,000 in assessment income. The Committee determined
assessment revenue will be adequate to cover most of the budgeted
expenditures for the 2020-2021 marketing year and all of the
Committee's budgeted expenditures for subsequent marketing years. Any
excess funds will be used to replenish the Committee's monetary reserve
in the future. Reserve funds will be kept within the amount authorized
in the Order.
A review of historical information and preliminary information
pertaining to the upcoming marketing year indicates that the average
producer price for the 2020-2021 season is expected to be approximately
$15.90-17.40 per pound of spearmint oil. Therefore, estimated
assessment revenue for the 2020-2021 marketing year as a percentage of
total producer revenue will be between 0.80 and 0.88 percent ($0.14
divided by $17.40 and $15.90, respectively).
This action increases 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, these costs are
expected to be offset by the benefits derived by the operation of the
Order.
The Committee's meetings are widely publicized throughout the Far
West spearmint oil industry. All interested persons were invited to
attend the meetings and participate in Committee deliberations on all
issues. Like all Committee meetings, the February 26, 2020, meeting was
a public meeting and all entities, both large and small, were able to
express views on this issue. Interested persons were invited to submit
comments on this rule, including the regulatory and information
collection impacts of this action on small businesses.
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 OMB and assigned OMB No. 0581-0178 Vegetable and
Specialty Crops. No changes in those requirements will be necessary as
a result of this action. Should any changes become necessary, they will
be submitted to OMB for approval.
This final rule will not impose any additional reporting or
recordkeeping requirements on either small or large Far West spearmint
oil 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 April 27, 2020 (85 FR 23243). Copies of the proposed rule
were provided to all Far West spearmint oil handlers. The proposal was
also made available through the internet by USDA and the Office of the
Federal Register. A 30-day comment period ending May 27, 2020, was
provided for interested persons to respond to the proposal. No comments
were received. Accordingly, no changes will be made to the rule as
proposed.
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/
[[Page 41328]]
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 will tend to
effectuate the declared policy of the Act.
List of Subjects in 7 CFR Part 985
Marketing agreements, Oils and fats, Reporting and recordkeeping
requirements, Spearmint oil.
For the reasons set forth in the preamble, 7 CFR part 985 is
amended as follows:
PART 985--MARKETING ORDER REGULATING THE HANDLING OF SPEARMINT OIL
PRODUCED IN THE FAR WEST
0
1. The authority citation for 7 CFR part 985 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
0
2. Revise Sec. 985.141 to read as follows:
Sec. 985.141 Assessment rate.
On and after June 1, 2020, an assessment rate of $0.14 per pound is
established for Far West spearmint oil. Unexpended funds may be carried
over as a reserve.
Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2020-13614 Filed 7-9-20; 8:45 am]
BILLING CODE 3410-02-P
