Winter Pears Grown in Oregon and Washington; Increased Assessment Rate

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 927

[Docket No. FV97-927-1 FIR]

Winter Pears Grown in Oregon and Washington; Increased 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 increased the assessment rate established for the Winter Pear

Control Committee (Committee) under Marketing Order No. 927 for the

1997-98, and subsequent fiscal periods. The Committee is responsible

for local administration of the marketing order which regulates the

handling of winter pears grown in Oregon and Washington. Authorization

to assess winter pear handlers enables the Committee to incur expenses

that are reasonable and necessary to administer the program. The 1997-

98 fiscal period began July 1 and ends June 30. The assessment rate

will continue in effect indefinitely unless modified, suspended, or

terminated. The marketing order was amended recently and California was

removed from the production area.

EFFECTIVE DATE: January 20, 1998.

FOR FURTHER INFORMATION CONTACT: Teresa L. Hutchinson, Northwest

Marketing Field Office, Fruit and Vegetable Programs, AMS, USDA, 1220

SW Third Avenue, Room 369, Portland, OR 97204; telephone: (503) 326-

2724, Fax: (503) 326-7440, or George J. Kelhart, 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) 205-6632. Small businesses may request information

on compliance with this regulation by contacting Jay Guerber, 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) 205-6632.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing

Agreement and Order No. 927, both as amended (7 CFR part 927; 62 FR

60999, November 14, 1997), regulating the handling of winter pears

grown in Oregon and Washington, 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.'' Effective November 17,

1997, the marketing agreement and order were amended by removing the

State of California from the production area. The production area now

covers the States of Oregon and Washington.

The Department of Agriculture 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, winter pear

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 winter pears

beginning July 1, 1997, and continuing 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 in effect an assessment rate established for

the Committee for the 1997-98, and subsequent fiscal periods of $0.44

per standard box of winter pears.

The 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 and handlers of winter pears.

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 indefinitely

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 May 30, 1997, and unanimously recommended

1997-98 expenditures of $8,066,790 and an assessment rate of $0.44 per

standard box of winter pears. In comparison, last year's budgeted

expenditures were $5,502,979. The assessment rate of $0.44 is $0.035

more than the rate previously in effect. The Committee discussed

alternatives to this rule, including alternative expenditure levels,

but decided that an assessment rate of less than $0.44 would not

generate the income necessary to administer the program with an

adequate reserve. An assessment rate of more than $0.44 would have

resulted in a reserve that exceeded the level the Committee believes is

necessary to administer the program.

The assessment rate recommended by the Committee was derived by

dividing

[[Page 66496]]

anticipated expenses by expected shipments of winter pears. Applying

the $0.44 per standard box rate of assessment to the Committee's

17,310,000 standard box shipment estimate should provide $7,616,400 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

(approximately $268,000) will be kept within the maximum permitted by

the order (one fiscal period's expenses; Sec. 927.42).

Major expenditures recommended by the Committee for the 1997-98

include $7,010,550 for paid advertising, $346,200 for improvement of

winter pears (production research), $161,549 for salaries, and $75,000

for industry development. Budgeted expenses for these items in 1996-97

were $4,674,675, $249,316, $154,387, and $75,000, respectively.

The assessment rate established in this rule 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

1997-98 budget was approved by the Department on August 25, 1997, and

those for subsequent fiscal periods will be reviewed and, as

appropriate, approved by the Department.

A final rule amending the order was published in the Federal

Register on November 14, 1997 (62 FR 60999). One of the amendments

removed California from the production area effective November 17,

1997. The removal of California from the order is expected to have

minimal effect on the Committee's anticipated revenue from assessments,

and on expenses. Shipments of winter pears from California averaged

548,691 standard boxes or approximately four percent of the total

winter pear shipments during the prior five year period. Assessments on

shipments of winter pears from Oregon and Washington, along with

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

be adequate to meet Committee expenses.

Pursuant to requirements set forth in the Regulatory Flexibility

Act (RFA), the Agricultural Marketing Service (AMS) has considered the

economic impact of this action 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.

Since the interim final rule was issued, the Department has

received new figures on the number of producers and handlers in the

production area. There are now approximately 1,700 producers of winter

pears in the production area and approximately 93 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. The majority of winter pear producers and handlers may be

classified as small entities.

This rule continues in effect an increased assessment rate

established for the Committee and collected from handlers for the 1997-

98, and subsequent fiscal periods. The Committee unanimously

recommended 1997-98 expenditures of $8,066,790, and an assessment rate

of $0.44 per standard box of winter pears. The assessment rate of $0.44

is $0.035 more than the rate previously in effect. Winter pear

shipments for the year are estimated at 17,310,000 standard boxes,

which should provide $7,616,400 in assessment income. Income derived

from handler assessments on shipments of winter pears from Oregon and

Washington, along with interest income and funds from the Committee's

authorized reserve, will be adequate to cover budgeted expenses. Funds

in the reserve (approximately $268,000) will be kept within the maximum

permitted by the order (one fiscal period's expenses; Sec. 927.42).

The Committee discussed alternatives to this rule, including

alternative expenditure levels. Lower assessment rates were considered,

but not recommended because they would not generate the income

necessary to administer the program with an adequate reserve. An

assessment rate of more than $0.44 would have resulted in a reserve

that exceeded the level the Committee believes is necessary to

administer the program.

Major expenditures recommended by the Committee for the 1997-98

include $7,010,550 for paid advertising, $346,200 for improvement of

winter pears (production research), $161,549 for salaries, and $75,000

for industry development. Budgeted expenses for these items in 1996-97

were $4,674,675, $249,316, $154,387, and $75,000, respectively. The

increase in paid advertising is needed to help the industry market this

season's crop, which is significantly larger than last year's crop. A

lower level of funding for paid advertising was ruled out by the

Committee because it felt that a more aggressive advertising program

was needed this season to market the large crop. The increased level

for production research provides funds for current and anticipated

research in 1997-98. The increase in salaries provides funds for staff

salary adjustments.

Recent price information indicates that the grower price for the

1997-98 season will range between $4.82 and $11.81 per standard box of

winter pears. Therefore, the estimated assessment revenue for the 1997-

98 fiscal period as a percentage of total grower revenue will range

between 4 and 9 percent.

This action will increase the assessment obligation imposed on

handlers. While this rule will impose some additional costs on

handlers, the costs are minimal and in the form of uniform assessments

on all handlers. Some of the additional costs may be passed on to

producers. However, these costs will be offset by the benefits derived

by the operation of the marketing order. In addition, the Committee's

meeting was widely publicized throughout the winter pear industry and

all interested persons were invited to attend the meeting and

participate in Committee deliberations on all issues. Like all

Committee meetings, the May 30, 1997, meeting was a public meeting and

all entities, both large and small, were able to express views on this

issue.

This action will not impose any additional reporting or

recordkeeping requirements on either small or large

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winter 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.

The Department has not identified any relevant Federal rules that

duplicate, overlap, or conflict with this rule.

The interim final rule concerning this action was published in the

Federal Register (62 FR 44202) on August 20, 1997, and requested

comments to be received by September 21, 1997. A copy of the interim

final rule was also made available on the Internet by the U.S.

Government Printing Office. No comments were received.

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 927

Marketing agreements, Pears, Reporting and recordkeeping

requirements.

PART 927--WINTER PEARS GROWN IN OREGON AND WASHINGTON

Accordingly, the interim final rule amending 7 CFR part 927 which

was published at 62 FR 44202 on August 20, 1997, is adopted as a final

rule without change.

Dated: December 15, 1997.

Robert C. Keeney,

Deputy Administrator, Fruit and Vegetable Programs.

[FR Doc. 97-33168 Filed 12-18-97; 8:45 am]

BILLING CODE 3410-02-P