Pistachios Grown in California, Arizona and New Mexico; Decreased Assessment Rate, 86287-86289 [2024-24733]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 89, Number 210 (Wednesday, October 30, 2024)]
[Proposed Rules]
[Pages 86287-86289]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-24733]


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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. 89, No. 210 / Wednesday, October 30, 2024 / 
Proposed Rules

[[Page 86287]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 983

[Doc. No. AMS-SC-24-0021]


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would implement a recommendation from the 
Administrative Committee for Pistachios (Committee) to decrease the 
assessment rate established for the 2024-2025 and subsequent production 
years from $0.0007 to $0.0003 per pound of assessable pistachios 
handled under the marketing order. The proposed assessment rate would 
remain in effect indefinitely unless modified, suspended, or 
terminated.

DATES: Comments must be received by November 29, 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 can also be sent to the Docket Clerk electronically by Email: 
[email protected] or internet: https://www.regulations.gov. Comments should reference the document number and 
the date and page number of this issue of the Federal Register. 
Comments submitted in response to this proposed rule will be included 
in the record, will be made available to the public and can be viewed 
at: https://www.regulations.gov. 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: Peter Sommers, Marketing Specialist, 
or Abigail Maharaj, Chief, West Region Branch, Market Development 
Division, Specialty Crops Program, AMS, USDA; Telephone: (559) 487-
5901; or Email: [email protected] or [email protected].
    Small businesses may request information on complying with this 
regulation by contacting Richard Lower, Marketing 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. 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 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. AMS has determined 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, pistachio 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 pistachios for the 2024-2025 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 8c(15)(A) of the 
Act (7 U.S.C. 608(c)(15)(A)), any handler subject to an order may file 
with 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 no later than 20 days after the date of the 
entry of the ruling.
    This proposed rule would decrease the assessment rate for 
pistachios handled under the Order from $0.0007 per pound, the rate 
that was established for the 2021-2022 and subsequent production years, 
to $0.0003 per pound for the 2024-2025 and subsequent production years.
    Sections 983.70 and 983.71 of the Order authorize the Committee, 
with the approval of AMS, to formulate an

[[Page 86288]]

annual budget of expenses and collect assessments from handlers to 
administer the program. The members 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 2021-2022 and subsequent production years, the Committee 
recommended, and AMS approved, an assessment rate of $0.0007 per pound 
of assessable pistachios within the production area (87 FR 22105). That 
rate continues in effect from production year to production year unless 
modified, suspended, or terminated by AMS upon recommendation and 
information submitted by the Committee or other information available 
to AMS. This rule would decrease the assessment rate from $0.0007 to 
$0.0003 per pound of assessable pistachios for the 2024-2025 and 
subsequent production years.
    The Committee held a public meeting on April 9, 2024, and 
unanimously recommended an assessment rate of $0.0003 per pound of 
assessable pistachios for the 2024-2025 and subsequent production 
years. The Committee also met on July 10, 2024, and unanimously 
recommended 2024-2025 production year expenditures of $956,700. In 
comparison, last period's budgeted expenses were $1,145,161. The 
proposed assessment rate of $0.0003 is $0.0004 less than the rate 
currently in effect. The Committee recommended decreasing the 
assessment rate to help ensure the Committee's compliance with Sec.  
983.74, which stipulates that assessments will be reduced to bring 
reserve funds to an amount that is less than or equal to two production 
years' budgeted expenses.
    The major expenditures recommended by the Committee for the 2024-
2025 production year include $512,900 for salaries and related 
expenses, $125,000 for research, $100,000 for a contingency fund, 
$73,500 for administrative expenses, and $10,000 for compliance 
expenses. By comparison, budgeted expenses for these items during the 
2023-24 production year were $631,900, $125,000, $200,000, $76,450 and 
$10,000, respectively.
    The Committee derived the recommended assessment rate by 
considering anticipated expenses, anticipated production of assessable 
pistachios, and the amount of funds available in the authorized 
reserve. The expected 1 billion pounds of pistachios for the 2024-2025 
production year would generate $300,000 in assessment revenue at the 
proposed assessment rate (1,000,000,000 pounds multiplied by $0.0003 
assessment rate). Income derived from handler assessments, along with 
the California Pistachio Research Board (CPRB) management income of 
approximately $220,200 and funds from the Committee's authorized 
reserve of approximately $436,500, should be adequate to cover budgeted 
expenses of $956,700. Funds available in the reserve (currently about 
$844,000) would be kept within the maximum level of approximately two 
production years' budgeted expenses as authorized by the Order.
    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 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 AMS. Committee meetings are open to the public and interested 
persons may express their views at these meetings. AMS 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 2024-2025 
budget, and those for subsequent production years would 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 has 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 19 handlers subject to regulation under the Order, and 
approximately 1,871 producers of pistachios in the production area. 
Small agricultural producers of pistachios are defined by the Small 
Business Administration (SBA) as those having annual receipts equal to 
or less than $3.75 million (NAICS code 111335, Tree Nut Farming). Small 
agricultural service firms (handlers) have been defined as those whose 
annual receipts are equal to or less than $34 million (NAICS code 
115114, Postharvest Crop Activities) (13 CFR 121.201).
    Data from USDA's National Agricultural Statistics Service (NASS) 
can be used to characterize the proportion of small versus large 
pistachio producers and handlers according to the SBA standards. Due to 
the significant year-to-year variation in pistachio production and crop 
value, it is helpful to use two-year averages. The average value for 
crop years 2022 and 2023 ($1.861 and $2.98 billion, respectively) is 
$2.42 billion. Dividing $2.42 billion by 1,871 producers yields an 
estimated average sales receipt per producer estimate of about $1.29 
million, which is well below the $3.75 million threshold for small 
producers. Assuming a normal distribution, the majority of pistachio 
producers may be classified as small entities.
    Estimating the proportion of small handlers requires an additional 
computation. An average price per handler can be estimated using AMS 
Market News prices for pistachio packages at the San Francisco terminal 
market. The average terminal market price for 12 one-pound packages of 
pistachios at the San Francisco terminal market from January to July 
2024 was $41 per package. Dividing $41 by the weight of the package (12 
pounds) yields a handler average price estimate of $3.417 per pound. 
Dividing the SBA size standard of $34 million by $3.417 yields an 
estimate of 9.951 million pounds per year (just under 10 million 
pounds).
    The Committee reported that 12 out of 19 handlers (63 percent) 
handled under 10 million pounds per year. Therefore, 63 percent of the 
pistachio handlers would be considered small handlers under the SBA 
standard.
    The Committee's recommended assessment rate of $0.0003 per pound of 
assessable pistachios complies with section 983.71(b) of the Order, 
which states that any proposed assessment rate must not exceed one-half 
of one percent of the average price received by producers in the 
preceding production year. The proposed decreased assessment rate of 
$0.0003 per pound is well below the computed maximum allowable rate of 
$0.01 per pound (0.5

[[Page 86289]]

percent times $2.00, the 2023 average producer price reported by NASS).
    Using the proposed new rate, the 2024-2025 annual Committee 
assessment as a percent of producer revenue (crop value) can be 
approximated using average production and crop value for the two prior 
years. NASS reported utilized inshell pistachio production of 882 
million pounds and 1.49 billion pounds, respectively, for the 2022 and 
2023 crop years, with an average of 1.186 billion pounds. Multiplying 
1.186 billion pounds by $0.0003 per pound yields estimated annual 
Committee revenue of $355,800. Dividing estimated Committee revenue of 
$355,800 by the two-year average crop value of $2.42 billion crop 
yields an estimate of 0.01 percent. That is, the $355,800 estimated 
annual assessment total represents one hundredth of one percent of 
estimated producer revenue.
    This proposal decreases the assessment rate collected from handlers 
for the 2024-2025 and subsequent production years from $0.0007 to 
$0.0003 per pound of assessable pistachios. The Committee unanimously 
recommended 2024-2025 production year expenditures of $956,700 and an 
assessment rate of $0.0003 per pound of assessable pistachios. The 
proposed assessment rate of $0.0003 is $0.0004 lower than the rate 
currently in effect. The volume of assessable pistachios for the 2024-
2025 production year is estimated at one billion pounds. Thus, the 
$0.0003 per pound of assessable pistachios should provide $300,000 in 
assessment income (1,000,000,000 pounds multiplied by $0.0003 
assessment rate). Income derived from handler assessments, along with 
CPRB management income of approximately $220,200 and funds from the 
Committee's authorized reserve of approximately $436,500, should be 
adequate to cover budgeted expenses.
    The major expenditures recommended by the Committee for the 2024-
2025 production year include $512,900 for salaries and related 
expenses, $125,000 for research, $100,000 for a contingency fund, 
$73,500 for administrative expenses, and $10,000 for compliance 
expenses. By comparison, budgeted expenses for these activities for the 
2023-24 production year were $631,900, $125,000, $200,000, $76,450 and 
$10,000, respectively.
    The Committee recommended decreasing the assessment rate in 
conjunction with utilization of funds from the authorized reserve to 
cover Committee expenditures and ensure the financial reserve remains 
at a level in compliance with Order requirements.
    Prior to arriving at this budget and assessment rate, the Committee 
considered alternate potential expenditure levels and the impact of 
reducing the assessment rate more and/or less than the rate proposed 
herein. However, the Committee determined that the recommended 
assessment rate would achieve its goals of both adequately funding 
Committee operations and reducing the reserve to an appropriate level.
    A review of historical information and preliminary information 
pertaining to the upcoming production year indicates the average 
producer price for the 2024-2025 season should be approximately $2 per 
pound. Therefore, the estimated assessment revenue for the 2024-2025 
production year as a percentage of total producer revenue would be 
about .015 percent ($0.0003 divided by $2 multiplied by 100).
    This proposed rule would decrease the assessment obligation imposed 
on pistachio handlers. Assessments are applied uniformly on all 
handlers, and some of the cost 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 
pistachio industry and all interested persons are invited to attend the 
meetings and participate in Committee deliberations on all issues. Like 
all Committee meetings, the April 9, 2024, and July 10, 2024, meetings 
were public 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. 0581-0215, Pistachios. 
No changes in those requirements are 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 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.
    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.
    After consideration of all relevant material presented, including 
the information and recommendations submitted by the Committee and 
other available information, AMS has determined that this proposed rule 
is consistent with and would effectuate the purposes of the Act.
    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 
rulemaking.

List of Subjects in 7 CFR Part 983

    Marketing agreements, Nuts, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, the Agricultural 
Marketing Service proposes to amend 7 CFR part 983 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, 2024, an assessment rate of $0.0003 per 
pound is established for California, Arizona, and New Mexico pistachios 
covered under the Order.

Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2024-24733 Filed 10-29-24; 8:45 am]
BILLING CODE P