Pistachios Grown in California, Arizona, and New Mexico; Increased Assessment Rate, 12799-12802 [2021-04599]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 86, Number 42 (Friday, March 5, 2021)]
[Rules and Regulations]
[Pages 12799-12802]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-04599]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 983

[Doc. No. AMS-SC-20-0069; SC20-983-2 FR]


Pistachios Grown in California, Arizona, and New Mexico; 
Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This final rule implements a recommendation from the 
Administrative Committee for Pistachios (Committee) to increase the 
assessment rate established for the

[[Page 12800]]

2020-21 and subsequent production years. The assessment rate will 
remain in effect indefinitely unless modified, suspended, or 
terminated.

DATES: Effective April 5, 2021.

FOR FURTHER INFORMATION CONTACT: Peter Sommers, Marketing Specialist, 
California Marketing Field Office, or Andrew Hatch, Deputy Director, 
Marketing Order and Agreement Division, Specialty Crops Program, AMS, 
USDA; Telephone: (559) 538-1670 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, or 
Email: [email protected].

SUPPLEMENTARY INFORMATION: This action, pursuant to 5 U.S.C. 553, 
implements an amendment to regulations issued to carry out a marketing 
order as defined in 7 CFR 900.2(j). This rule is issued under Marketing 
Agreement and Order No. 983, as amended (7 CFR part 983), regulating 
the handling of pistachios grown in California, Arizona, and New 
Mexico. Part 983 (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 producers and handlers of 
pistachios 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 rule falls 
within a category of regulatory actions that the Office of Management 
and Budget (OMB) exempted from Executive Order 12866 review.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the Order now in effect, pistachio handlers are 
subject to assessments. Funds to administer the Order are derived from 
such assessments. It is intended that the assessment rate be applicable 
to all assessable pistachios for the 2020-21 production 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 a 
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 no later than 20 days after the date of the 
entry of the ruling.
    This final rule increases the assessment rate from $0.00010 per 
pound of assessed weight pistachios, the rate that was established for 
the 2017-18 and subsequent production years, to $0.00015 per pound of 
assessed weight pistachios for the 2020-21 and subsequent production 
years.
    The Order authorizes 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 2017-18 and subsequent production years, the Committee 
recommended, and USDA approved, an assessment rate of $0.00010 per 
pound of assessed weight pistachios. That assessment rate continued 
until modified, suspended, or terminated by USDA upon recommendation 
and information submitted by the Committee or other information 
available to USDA.
    The Committee met on July 14, 2020, and unanimously recommended 
expenditures of $679,800 and an assessment rate of $0.00015 per pound 
of assessed weight pistachios handled for the 2020-21 and subsequent 
production years. In comparison, last year's budgeted expenditures were 
$677,100. The assessment rate of $0.00015 is $0.00005 higher than the 
rate currently in effect. The Committee recommended increasing the 
assessment rate to provide adequate income, along with California 
Pistachio Research Board (CPRB) management income and reserve funds, to 
cover the Committee's budgeted expenses for the 2020-21 production 
year. Funds in the reserve are expected to be approximately $197,585 at 
the end of the 2020-21 production year, which is within the Order's 
requirement of carryover funds no more than approximately two 
production years' budgeted expenses.
    The major expenditures recommended by the Committee for the 2020-21 
production year include $74,800 for various administrative expenses, 
$10,000 for compliance expenses, $346,500 for salaries and related 
employee expenses, $125,000 for research, and $80,000 for a contingency 
fund. Budgeted expenses for these items for the 2019-20 production year 
were $48,900, $10,000, $336,500, $125,000, and $80,000, respectively.
    The Committee derived the recommended assessment rate by 
considering anticipated expenses, an estimated crop of 950 million 
pounds of assessed weight pistachios, and the amount of funds available 
in the authorized reserve. Income derived from handler assessments, 
calculated at $142,500 (950,000,000 pounds assessed weight pistachios 
multiplied by $0.00015 assessment rate), along with CPRB management 
income ($175,200), and funds from the Committee's authorized reserve 
($559,685), will be adequate to cover budgeted expenses of $679,800. 
Funds in the reserve are estimated to be $197,585 at the end of the 
2020-21 production year ($142,500 in assessment income plus $175,200 
from CPRB management income plus $559,685 from the Committee's reserves 
minus $679,800 in Committee estimated expenses equals $197,585 
remaining in the reserve fund).
    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 
production 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 2020-21 production year 
budget, and those for subsequent

[[Page 12801]]

production 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 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 21 handlers subject to the regulation under 
the Order, and approximately 1,501 producers of pistachios in the 
production area. 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).
    According to the National Agricultural Statistics Service (NASS), 
the national average producer price for pistachios for the 2018 
production year was $2.65 per pound. Committee data indicates 2018-19 
pistachio total production was 746,858,150 pounds. The total 2018 value 
of the pistachio crop was $1,979,174,098 (746,858,150 pounds times 
$2.65 per pound). Dividing the crop value by the estimated number of 
producers (1,501) yields an estimated average receipt per producer of 
$1,318,570 which is above the SBA threshold for small producers.
    According to USDA Market News data, the reported terminal price for 
2018 for pistachios ranged between $155.00 to $165.00 per 25-pound 
carton. The average of this range is $160.00 ($155.00 plus $165.00 
divided by 2). Dividing the average value by the 25-pound carton yields 
an estimated average price per pound of $6.40 ($160.00 average value 
for 25-pound carton divided by 25). Multiplying the 2018-19 pistachio 
total production of 746,858,150 pounds by the estimated average price 
per pound of $6.40 equals $4,779,892,160.
    Dividing this figure by 21 regulated handlers yields estimated 
average annual handler receipts of $227,613,912, which is also above 
the SBA threshold for small agricultural service firms. Therefore, 
using the above data, and assuming a normal distribution, the majority 
of producers and handlers of pistachios may be classified as large 
entities.
    The assessment rate of $0.00015 that the committee recommended 
complies with section 983.71(b) of the Order which states that any 
assessment rate must not exceed one-half of one percent of the average 
price received by producers in the preceding production year. The 
average price received by producers in the preceding production year 
was $2.65 per pound of pistachios. Thus, $2.65 times 0.5 percent equals 
$0.01325, which is greater than the assessment rate increase of 
$0.00015.
    This rule increases the assessment rate collected from handlers for 
the 2020-21 and subsequent production years from $0.00010 to $0.00015 
per pound assessed weight pistachios. The Committee unanimously 
recommended 2020-21 expenditures of $679,800 and an assessment rate of 
$0.00015 per pound assessed weight pistachios. The assessment rate of 
$0.00015 per pound assessed weight pistachios is $0.00005 higher than 
the rate currently in effect. The volume of assessable pistachios for 
the 2020-21 production year is estimated at 950 million pounds. Thus, 
the $0.00015 per pound assessed weight pistachios should provide 
$142,500 in assessment income (950,000,000 pounds assessed weight 
pistachios multiplied by $0.00015 assessment rate). Income derived from 
handler assessments, along with CPRB management income and funds from 
the Committee's authorized reserve, will be adequate to cover budgeted 
expenses for the 2020-21 production year.
    The major expenditures recommended by the Committee for the 2020-21 
production year include $74,800 for various administrative expenses, 
$10,000 for compliance expenses, $346,500 for salaries and related 
employee expenses, $125,000 for research, and $80,000 for a contingency 
fund. Budgeted expenses for these items in the 2019-20 production year 
were $48,900, $10,000, $336,500, $125,000, and $80,000 respectively.
    In recent years, the Committee has utilized reserve funds to 
partially fund its budgeted expenditures. The Committee recommended 
increasing the assessment rate to provide income to partially cover the 
Committee's budgeted expenses for the 2020-21 production year while 
maintaining its financial reserve within the limit required by the 
Order.
    Prior to arriving at this budget and assessment rate, the Committee 
discussed various alternatives, including maintaining the current 
assessment rate of $0.00010 per pound assessed weight pistachios, and 
increasing the assessment rate by a different amount. However, the 
Committee determined that the recommended assessment rate will fund 
budgeted expenses and avoid drawing down reserves at an unsustainable 
rate.
    This rule 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 meeting was widely publicized throughout the 
pistachio industry. All interested persons were invited to attend the 
meeting and encouraged to participate in Committee deliberations on all 
issues. Like all Committee meetings, the July 14, 2020, meeting was a 
public meeting, and all entities, both large and small, were able to 
express views on this issue. Finally, 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 the OMB and assigned OMB No. 0581-0215, 
Pistachios Grown in California, Arizona, and New Mexico. 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 pistachio 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. 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 October 5, 2020 (85 FR 62615). The Committee notified all 
pistachio handlers of the proposed

[[Page 12802]]

assessment rate increase. The proposed rule was made available through 
the internet by USDA and the Office of the Federal Register. A 45-day 
comment period ending November 19, 2020, was provided for interested 
persons to respond to the proposal. Two comments were received. One 
favored the increased assessment rate, and the other was not pertinent 
to the rule.
    The commenter supportive of the assessment rate increase felt that 
this action was within the agency's rulemaking power. The comment 
stated that the Committee determined that the assessment rate would 
help with some of the financial necessities, but would not 
significantly decrease the amount in the reserve fund. The second 
comment received was not pertinent to the proposal and did not address 
the merits of this action.
    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/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 983

    Marketing agreements, Pistachios, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 983 is 
amended as follows:

PART 983--PISTACHIOS GROWN IN CALIFORNIA, ARIZONA, AND NEW MEXICO

0
1. The authority citation for 7 CFR part 983 continues to read as 
follows:

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


0
2. Section 983.253 is revised to read as follows:


Sec.  983.253   Assessment rate.

    On and after September 1, 2020, an assessment rate of $0.00015 per 
pound is established for California, Arizona, and New Mexico 
pistachios.

Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2021-04599 Filed 3-4-21; 8:45 am]
BILLING CODE P