Pears Grown in Oregon and Washington; Increased Assessment Rate for Processed Pears, 83870-83872 [2023-26380]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 88, Number 230 (Friday, December 1, 2023)]
[Proposed Rules]
[Pages 83870-83872]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-26380]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 88, No. 230 / Friday, December 1, 2023 / 
Proposed Rules

[[Page 83870]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 927

[Doc. No. AMS-SC-23-0037]


Pears Grown in Oregon and Washington; Increased Assessment Rate 
for Processed Pears

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would implement a recommendation from the 
Processed Pear Committee (Committee) to increase the assessment rate 
established for the 2023-2024 fiscal period and subsequent fiscal 
periods. The proposed assessment rate would remain in effect 
indefinitely unless modified, suspended, or terminated.

DATES: Comments must be received by January 2, 2024.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. Comments can be sent to the Docket 
Clerk, Market Development Division, Specialty Crops Program, AMS, USDA, 
1400 Independence Avenue SW, STOP 0237, Washington, DC 20250-0237. 
Comments may also be submitted to the Docket Clerk electronically by 
Email: [email protected] or via the internet at: https://www.regulations.gov. Comments should reference the document number and 
the date and page number of this issue of the Federal Register and can 
be viewed at: https://www.regulations.gov. Comments submitted in 
response to this proposed rule will be included in the record and will 
be made available to the public. Please be advised that the identity of 
the individuals or entities submitting the comments will be made public 
on the internet at the address provided above.

FOR FURTHER INFORMATION CONTACT: Dale Novotny, Marketing Specialist, or 
Gary Olson, Chief, West Region Branch, Market Development Division, 
Specialty Crops Program, AMS, USDA; Telephone: (503) 326-2724, or 
Email: [email protected] or [email protected].
    Small businesses may request information on complying with this 
regulation by contacting Richard Lower, Market Development Division, 
Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP 
0237, Washington, DC 20250-0237; Telephone: (202) 720-8085, or Email: 
[email protected].

SUPPLEMENTARY INFORMATION: This action, pursuant to 5 U.S.C. 553, 
proposes to amend regulations issued to carry out a marketing order as 
defined in 7 CFR 900.2(j). This proposed rule is issued under Marketing 
Order No. 927, as amended (7 CFR part 927), regulating the handling of 
pears grown in Oregon and Washington. Part 927 (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 growers, handlers, and processors of pears operating within the area 
of production, and a public member.
    The Agricultural Marketing Service (AMS) is issuing this proposed 
rule in conformance with Executive Orders 12866, 13563, and 14094. 
Executive Orders 12866 and 13563 direct agencies to assess all costs 
and benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects, distributive impacts and equity). Executive Order 13563 
emphasizes the importance of quantifying both costs and benefits, 
reducing costs, harmonizing rules, and promoting flexibility. Executive 
Order 14094 reaffirms, supplements, and updates Executive Order 12866 
and further directs agencies to solicit and consider input from a wide 
range of affected and interested parties through a variety of means. 
This proposed action falls within a category of regulatory actions that 
the Office of Management and Budget (OMB) exempted from Executive Order 
12866 review.
    This proposed rule has been reviewed under Executive Order 13175, 
Consultation and Coordination with Indian Tribal Governments, which 
requires Federal agencies to consider whether their rulemaking actions 
would have Tribal implications. The AMS has determined that this 
proposed rule is unlikely to have substantial direct effects on one or 
more Indian Tribes, on the relationship between the Federal Government 
and Indian Tribes, or on the distribution of power and responsibilities 
between the Federal Government and Indian Tribes.
    This proposed rule has been reviewed under Executive Order 12988--
Civil Justice Reform. Under the Order now in effect, pear handlers are 
subject to assessments. Funds to administer the Order are derived from 
such assessments. It is intended that the assessment rate would be 
applicable to all assessable ``summer/fall'' pears for canning for the 
2023-2024 fiscal period, 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 the U.S. Department 
of Agriculture (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 proposed rule would increase the assessment rate for ``summer/
fall'' varieties of pears for canning handled under the Order from 
$7.15 per ton, the rate that was established for the 2018-2019 fiscal 
period and subsequent fiscal periods, to $7.50 per ton for the 2023-
2024 fiscal period and subsequent fiscal periods.
    The Order authorizes the Committee, with the approval of AMS, to 
formulate an annual budget of expenses and collect assessments from 
handlers to administer the program. The members

[[Page 83871]]

of the Committee are familiar with the Committee's needs and with the 
costs of goods and services in their local area and are able to 
formulate an appropriate budget and assessment rate. The assessment 
rate is formulated and discussed in a public meeting, and all directly 
affected persons have an opportunity to participate and provide input.
    For the 2018-2019 fiscal period and subsequent fiscal periods, the 
Committee recommended, and AMS approved, an assessment rate of $7.15 
per ton of ``summer/fall'' varieties of pears for canning handled (83 
FR 62451). That rate continues in effect from fiscal period to fiscal 
period until modified, suspended, or terminated by AMS upon 
recommendation and information submitted by the Committee or other 
information available to AMS.
    The Committee met on June 8, 2023, and unanimously recommended 
2023-2024 fiscal period expenditures of $607,532 and an assessment rate 
of $7.50 per ton of ``summer/fall'' varieties of pears for canning 
handled for the 2023-2024 fiscal period and subsequent fiscal periods. 
In comparison, last year's budgeted expenditures were $594,130. The 
proposed assessment rate of $7.50 per ton is $0.35 higher than the rate 
currently in effect. The Committee recommended increasing the 
assessment rate to better fund operations using assessment revenue and 
reduce the reliance on reserve funds. The Committee has drawn down its 
financial reserve in recent years to cover Committee expenses and to 
reduce the reserve so as to not exceed approximately one fiscal 
period's budgeted expenses, in conformance with the Order (7 CFR 
927.42(a)). The Committee projects handler receipts of 78,000 tons of 
assessable ``summer/fall'' varieties of pears for canning for the 2023-
2024 fiscal period, which is 7,288 more than was projected for the 
2022-2023 fiscal period.
    The major expenditures recommended by the Committee for the 2023-
2024 fiscal period include $492,595 for marketing, promotions, and paid 
advertising; $73,337 for research; $25,000 for promotion management 
fees; and $16,600 for Committee administrative expenses. Budgeted 
expenditures for the 2022-2023 fiscal period were $483,300, $66,530, 
$25,000, and $21,396, respectively.
    Processed pears for canning are marketed throughout the calendar 
year. The expected 78,000-ton 2023 crop would generate $585,000 in 
assessment revenue at the proposed assessment rate (78,000 tons of 
assessable ``summer/fall'' varieties of pears for canning multiplied by 
$7.50 per ton assessment rate). The remaining $22,532 needed to cover 
budgeted expenditures would come from reserve funds carried over from 
previous fiscal periods and $100 in interest income. The 2023-2024 
fiscal period assessment rate increase should be appropriate to ensure 
the Committee has sufficient revenue, along with its reserve, to fully 
fund its recommended 2023-2024 fiscal period budgeted expenditures and 
maintain a level of reserve funds that the Committee believes is 
appropriate.
    The Committee derived the recommended assessment rate by 
considering anticipated fiscal period expenses, an estimated 2023 crop 
volume of 78,000 tons of assessable ``summer/fall'' varieties of pears 
for canning, and the amount of funds available in the authorized 
reserve. Income derived from handler assessments ($585,000) and funds 
from the Committee's authorized reserve ($22,432) along with interest 
income ($100) are expected to be adequate to cover budgeted expenses 
($607,532).
    The proposed assessment rate would continue in effect indefinitely 
unless modified, suspended, or terminated by AMS upon recommendation 
and information submitted by the Committee or other available 
information. Although this assessment rate would be in effect for an 
indefinite period, the Committee would 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 
or AMS. Committee meetings are open to the public and interested 
persons may express their views at these meetings. AMS would 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 2023-2024 
fiscal period budget, and those for subsequent fiscal periods, will be 
reviewed and, as appropriate, approved by AMS.

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), AMS has considered the economic impact of 
this proposed rule on small entities. Accordingly, AMS prepared this 
initial 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 1,500 growers of pears for processing in 
the production area and approximately 34 handlers of processed pears 
subject to regulation under the Order. Small agricultural growers of 
processed pears are defined by the Small Business Administration (SBA) 
as those having annual receipts equal to or less than $3.5 million, and 
small agricultural service firms are defined as those whose annual 
receipts are equal to or less than $34 million (13 CFR 121.201).
    According to the National Agricultural Statistics Service (NASS), 
the average annual grower price received for processed pears in 
Washington and Oregon was $361 per ton (2022). Total production of 
pears for canning for the 2022 season was reported by the Committee to 
be 74,131 tons. Using the average grower price from 2022, the most 
recent years for which there is NASS data, the total 2022 crop value of 
pears grown for processing in Oregon and Washington was $26,761,291 
(74,131 tons multiplied by $361 per ton). Dividing the crop value by 
the estimated number of growers (1,500) yields an estimated average 
receipt per grower of $17,841, which is well below the SBA threshold 
for small growers.
    Given the relatively small total farmgate value of pears for 
processing produced in the production area ($26,761,291), it is 
probable that most, if not all, of the pear processors regulated by the 
Order would be considered small entities. Dividing the $26,761,291 
estimated crop value by the number of handlers of processed pears (34) 
equals $787,097. AMS has not identified a direct third-party reference 
for estimating processed pear manufacturing margins. Without direct 
third-party information regarding the industry, determination of the 
number of large and small processors using the SBA's definition would 
be difficult. However, given the low average crop value of pears for 
processing ($787,097) it may be assumed that most, if not all, of the 
handlers of processed pears would have annual receipts below the SBA 
threshold for small agricultural service firms ($34 million). 
Therefore, using the above information and

[[Page 83872]]

assuming a normal distribution, most of the growers and handlers of 
pears for processing may be classified as small entities.
    This proposal would increase the assessment rate collected from 
handlers for the 2023-2024 fiscal period and subsequent fiscal periods 
from $7.15 to $7.50 per ton of Oregon and Washington ``summer/fall'' 
pears for canning. The Committee unanimously recommended 2023-2024 
fiscal period expenditures of $607,532 and an assessment rate of $7.50 
per ton of ``summer/fall'' pears for canning. The proposed assessment 
rate of $7.50 is $0.35 higher than the current rate. The Committee 
expects the industry to handle 78,000 tons of ``summer/fall'' varieties 
of pears for canning during the 2023-2024 fiscal period. Thus, the 
$7.50 per ton rate should provide $585,000 in assessment income (78,000 
tons multiplied by $7.50). The Committee also expects to use $22,532 
from its financial reserve and $100 in interest income to cover 
remaining expenses. Income derived from handler assessments, along with 
reserve funds, should be adequate to meet budgeted expenditures for the 
2023-2024 fiscal period.
    The major expenditures recommended by the Committee for the 2023-
2024 fiscal period include $492,595 for marketing, promotions, and paid 
advertising; $73,337 for research; $25,000 for promotion management 
fees; and $16,600 for Committee administrative expenses. Budgeted 
expenditures for the 2022-2023 fiscal period were $483,300, $66,530, 
$25,000, and $21,396, respectively.
    In recent years, the Committee has utilized reserve funds to 
partially fund its budgeted expenditures. The Committee recommended 
increasing the assessment rate to better fund 2023-2024 fiscal period 
budgeted expenditures and refrain from excessively drawing down the 
funds held in its reserve. This action would maintain the Committee's 
reserve balance at a level that the Committee believes is appropriate 
and is compliant with the provisions of the Order.
    Prior to arriving at this budget and the proposed assessment rate, 
the Committee discussed various alternatives, including maintaining the 
current assessment rate of $7.15 per ton and increasing the assessment 
rate by different amounts. However, the Committee determined that the 
recommended assessment rate would be able to fund most of the budgeted 
expenses and avoid drawing down reserves at an unsustainable rate. The 
assessment rate of $7.50 per ton of Oregon and Washington ``summer/
fall'' pears for canning was derived by considering anticipated 
expenses, the projected volume of assessable pears for canning, the 
projected monetary balance held in reserve, and additional pertinent 
factors.
    A review of NASS information indicates that the average grower 
price for the 2022-2023 fiscal period was $361 per ton. Utilizing the 
assessment rate of $7.50 per ton, assessment revenue for the 2022-2023 
fiscal period, as a percentage of total grower revenue, would have been 
approximately 2.08 percent ($7.50 per ton divided by $361 multiplied by 
100).
    This proposed action would increase 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 
production area. The processed pear industry and all interested persons 
are invited to attend the meetings and participate in Committee 
deliberations on all issues. Like all Committee meetings, the June 8, 
2023, meeting was a public meeting and all entities, both large and 
small, were able to express views on this issue. Finally, interested 
persons are invited to submit comments on this proposed 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. 0581-0189, Fruit Crops. 
No changes in those requirements would be necessary as a result of this 
proposed rule. Should any changes become necessary, they would be 
submitted to OMB for approval.
    This proposed rule would not impose any additional reporting or 
recordkeeping requirements on either small or large processed pear 
handlers. As with all Federal marketing order programs, reports and 
forms are periodically reviewed to reduce information requirements and 
duplication by industry and public sector agencies.
    AMS is committed to complying with the E-Government Act, to promote 
the use of the internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.
    AMS has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this 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.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposed rule. All written comments timely received 
will be considered before a final determination is made on this 
proposed rule.

List of Subjects in 7 CFR Part 927

    Marketing agreements, Pears, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, the Agricultural 
Marketing Service proposes to amend 7 CFR part 927 as follows:

PART 927--PEARS GROWN IN OREGON AND WASHINGTON

0
1. The authority citation for 7 CFR part 927 continues to read as 
follows:

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

0
2. Revise Sec.  927.237 introductory text and paragraph (a) to read as 
follows:


Sec.  927.237  Processed pear assessment rate.

    On and after July 1, 2023, the following base rates of assessment 
for pears for processing are established for the Processed Pear 
Committee:
    (a) $7.50 per ton for any or all varieties or subvarieties of pears 
for canning classified as ``summer/fall'' excluding pears for other 
methods of processing;
* * * * *

Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2023-26380 Filed 11-30-23; 8:45 am]
BILLING CODE P