Tomatoes Grown in Florida; Decreased Assessment Rate

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 966

[Docket No. FV99-966-1 FIR]

Tomatoes Grown in Florida; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (Department) is adopting, as a

final rule, without change, the provisions of an interim final rule

which decreased the assessment rate established for the Florida Tomato

Committee (Committee) for the 1999-2000 and subsequent fiscal periods

from $0.03 per 25-pound container to $0.025 per 25-pound container of

tomatoes handled. The Committee is responsible for local administration

of the marketing order which regulates the handling of tomatoes grown

in Florida. Authorization to assess tomato handlers enables the

Committee to incur expenses that are reasonable and necessary to

administer the program. The fiscal period began August 1 and ends July

31. The assessment rate will remain in effect indefinitely unless

modified, suspended, or terminated.

EFFECTIVE DATE: February 14, 2000.

FOR FURTHER INFORMATION CONTACT: Doris Jamieson, Southeast Marketing

Field Office, Fruit and Vegetable Programs, AMS, USDA, P.O. Box 2276,

Winter Haven, FL 33883-2276; telephone: (863) 299-4770, Fax: (863) 299-

5169; or George Kelhart, Technical Advisor, Marketing Order

Administration Branch, Fruit and Vegetable Programs, AMS, USDA, room

2525-S, P.O. Box 96456, Washington, DC 20090-6456; telephone: (202)

720-2491, Fax: (202) 720-5698.

Small businesses may request information on complying with this

regulation by contacting Jay Guerber, Marketing Order Administration

Branch, Fruit and Vegetable Programs, AMS, USDA, P.O. Box 96456, room

2525-S, Washington, DC 20090-6456; telephone (202) 720-2491, Fax: (202)

720-5698, or E-mail: Jay.G[email protected].

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing

Agreement

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No. 125 and Order No. 966, both as amended (7 CFR part 966), regulating

the handling of tomatoes grown in Florida, hereinafter referred to as

the ``order.'' The marketing agreement and order are effective under

the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C.

601-674), hereinafter referred to as the ``Act.''

The Department is issuing this rule in conformance with Executive

Order 12866.

This rule has been reviewed under Executive Order 12988, Civil

Justice Reform. Under the marketing order now in effect, Florida tomato

handlers are subject to assessments. Funds to administer the order are

derived from such assessments. It is intended that the assessment rate

as issued herein will be applicable to all assessable Florida tomatoes

beginning August 1, 1999, and continue until amended, suspended, or

terminated. This rule will not preempt any State or local laws,

regulations, or policies, unless they present an irreconcilable

conflict with this rule.

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 Secretary 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 the Secretary 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 the

Secretary's ruling on the petition, provided an action is filed not

later than 20 days after the date of the entry of the ruling.

This rule continues to decrease the assessment rate established for

the Florida Tomato Committee for the 1999-2000 and subsequent fiscal

periods from $0.03 per 25-pound container to $0.025 per 25-pound

container of tomatoes.

The Florida tomato marketing order provides authority for the

Committee, with the approval of the Department, to formulate an annual

budget of expenses and collect assessments from handlers to administer

the program. The members of the Committee are producers of Florida

tomatoes. They are familiar with the Committee's needs and with the

costs for goods and services in their local area and are thus in a

position to formulate an appropriate budget and assessment rate. The

assessment rate is formulated and discussed in a public meeting. Thus,

all directly affected persons have an opportunity to participate and

provide input.

For the 1996-97 and subsequent fiscal periods, the Committee

recommended, and the Department approved, an assessment rate that would

continue in effect from fiscal period to fiscal period unless modified,

suspended, or terminated by the Secretary upon recommendation and

information submitted by the Committee or other information available

to the Secretary.

The Committee met on September 10, 1999, and unanimously

recommended 1999-2000 expenditures of $2,088,900 and an assessment rate

of $0.025 per 25-pound container of tomatoes. In comparison, last

year's budgeted expenditures were $1,926,000. The assessment rate of

$0.025 is $0.005 lower than the rate previously in effect. For the

previous fiscal period (1998-99), the Committee had planned to use

funds from its authorized reserves to cover some of its approved

expenses. The reserve fund was larger than the Committee believed it

needed for program operations. However, there was a larger than

expected supply of assessable tomatoes during 1998-99, and instead of

the reduction, the amount in the reserve fund increased. In another

effort to reduce the amount in the reserve fund, the Committee

unanimously recommended reducing the assessment rate and using reserve

funds to pay some of its operating expenses during 1999-2000.

The major expenditures recommended by the Committee for the 1999-

2000 fiscal period include $436,000 for salaries, $241,000 for

research, $1,000,000 for education and promotion, and $150,000 for

Market Assess Program export promotion. Budgeted expenses for these

items in 1998-99 were $364,000, $212,000, $900,000, and $200,000,

respectively.

The assessment rate recommended by the Committee was derived by

dividing anticipated expenses by expected shipments of Florida

tomatoes. Tomato shipments for the year are estimated at 50,000,000 25-

pound containers which should provide $1,250,000 in assessment income.

Income derived from handler assessments, along with interest income and

funds from the Committee's authorized reserve, will be adequate to

cover budgeted expenses. Funds in the reserve (currently $1,879,557)

will be kept within the maximum permitted by the order (Sec. 966.44;

approximately one fiscal period's expenses).

The assessment rate will continue in effect indefinitely unless

modified, suspended, or terminated by the Secretary upon recommendation

and information submitted by the Committee or other available

information.

Although this assessment rate is effective for an indefinite

period, the Committee will continue to meet prior to or during each

fiscal period to recommend a budget of expenses and consider

recommendations for modification of the assessment rate. The dates and

times of Committee meetings are available from the Committee or the

Department. Committee meetings are open to the public and interested

persons may express their views at these meetings. The Department will

evaluate Committee recommendations and other available information to

determine whether modification of the assessment rate is needed.

Further rulemaking will be undertaken as necessary. The Committee's

1999-2000 budget and those for subsequent fiscal periods will be

reviewed and, as appropriate, approved by the Department.

Pursuant to requirements set forth in the Regulatory Flexibility

Act (RFA), 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

business 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. Thus, both statutes have small

entity orientation and compatibility.

There are approximately 75 producers of tomatoes in the production

area and approximately 65 handlers subject to regulation under the

marketing order. Small agricultural producers have been defined by the

Small Business Administration (13 CFR 121.601) as those having annual

receipts less than $500,000, and small agricultural service firms are

defined as those whose annual receipts are less than $5,000,000.

Based on industry and Committee data for the 1998-99 season, the

average annual f.o.b. price for fresh Florida tomatoes during the 1998-

99 season was around $7.17 per 25-pound container, and total fresh

shipments for the 1998-99 season approximated 56.7 million 25-pound

containers of tomatoes. Committee data indicates that approximately 20

percent of the Florida

[[Page 2283]]

handlers handle 80 percent of the total volume shipped outside the

regulated area. Based on this information, the shipment information for

the 1998-99 season, and the 1998-99 season average price, the majority

of handlers would be classified as small entities as defined by the

SBA. The majority of producers of Florida tomatoes also may be

classified as small entities.

This rule continues to decrease the assessment rate established for

the Committee and collected from handlers for the 1999-2000 and

subsequent fiscal periods from $0.03 per 25-pound container to $0.025

per 25-pound container of tomatoes. The Committee unanimously

recommended 1999-2000 expenditures of $2,088,900 and an assessment rate

of $0.025 per 25-pound container. The assessment rate of $0.025 is

$0.005 lower than the 1998-99 rate. The quantity of assessable tomatoes

for the 1999-2000 season is estimated at 50,000,000 25-pound

containers. Thus, the $0.025 rate should provide $1,250,000 in

assessment income. Income derived from handler assessments, along with

interest income and funds from the Committee's authorized reserve, will

be adequate to cover budgeted expenses.

The major expenditures recommended by the Committee for the 1999-

2000 year include $436,000 for salaries, $241,000 for research,

$1,000,000 for education and promotion, and $150,000 for Market Assess

Program export promotion. Budgeted expenses for these items in 1998-99

were $364,000, $212,000, $900,000, and $200,000, respectively.

For the 1998-99 fiscal period, the Committee decided to use reserve

funds to cover some of its authorized expenses. The reserve fund was

larger than the Committee believed it needed for program operations.

However, there was a larger than expected supply of assessable tomatoes

in 1998-99, and instead of the anticipated reduction, the amount in the

reserve fund increased. In another effort to reduce the amount in the

reserve fund, the Committee unanimously recommended reducing the

assessment rate. The funds collected from assessments, along with money

from the reserve fund will be adequate to cover the Committee's

expenditures for the 1999-2000 fiscal year. Pursuant to Sec. 966.44,

the Committee is authorized to maintain an operating reserve not to

exceed approximately one fiscal period's expenses.

The Committee reviewed and unanimously recommended 1999-2000

expenditures of $2,088,900 which included increases in salaries,

research, and education and promotion programs. Prior to arriving at

this budget, the Committee considered information from various sources,

such as the Committee's Executive Subcommittee, Finance Subcommittee,

Research Subcommittee, and Education and Promotion Subcommittee.

Alternative expenditure levels were discussed by these groups, based

upon the relative value of various research projects to the Florida

tomato industry. The assessment rate of $0.025 per 25-pound container

of assessable tomatoes was then determined by dividing the total

recommended budget by the quantity of assessable commodity, estimated

at 50,000,000 25-pound containers for the 1999-2000 fiscal period. This

is approximately $624,900 below the anticipated expenses, which the

Committee determined to be acceptable as a means of reducing its

operating reserves.

A review of historical information and preliminary information

pertaining to the 1999-2000 fiscal period indicates that the grower

price for 1999-2000 could range between $6.09 and $9.70 per 25-pound

container of tomatoes. Therefore, the estimated assessment revenue for

the 1999-2000 fiscal period as a percentage of total grower revenue

could range between .26 and .41 percent.

This action continues to decrease 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, decreasing

the assessment rate reduces the burden on handlers, and may reduce the

burden on producers. In addition, the Committee's meeting was widely

publicized throughout the Florida tomato industry and all interested

persons were invited to attend the meeting and participate in Committee

deliberations on all issues. Like all Committee meetings, the September

10, 1999, meeting was a public meeting and all entities, both large and

small, were able to express views on this issue.

This action imposes no additional reporting or recordkeeping

requirements on either small or large Florida tomato 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.

The Department has not identified any relevant Federal rules that

duplicate, overlap, or conflict with this rule.

An interim final rule concerning this action was published in the

Federal Register on October 25, 1999 (64 FR 57361). Copies of that rule

were also mailed or sent via facsimile to all tomato handlers. Finally,

the interim final rule was made available through the Internet by the

Office of the Federal Register. A 60-day comment period was provided

for interested persons to respond to the interim final rule. The

comment period ended on December 27, 1999, and no comments were

received.

A small business guide on complying with fruit, vegetable, and

specialty crop marketing agreements and orders may be viewed at the

following web site: http://www.ams.usda.gov/fv/moab.html. Any questions

about the compliance guide should be sent to Jay Guerber at the

previously mentioned address in the FOR FURTHER INFORMATION CONTACT

section.

After consideration of all relevant material presented, including

the information and recommendation submitted by the Committee and other

available information, it is hereby found that this rule, as

hereinafter set forth, will tend to effectuate the declared policy of

the Act.

List of Subjects in 7 CFR Part 966

Marketing agreements, Reporting and recordkeeping requirements,

Tomatoes.

Tomatoes Grown in Florida

Accordingly, the interim final rule amending 7 CFR part 966 which

was published at 64 FR 57361 on October 25, 1999, is adopted as a final

rule without change.

Dated: January 10, 2000.

Robert C. Keeney,

Deputy Administrator, Fruit and Vegetable Programs.

[FR Doc. 00-978 Filed 1-13-00; 8:45 am]

BILLING CODE 3410-02-P