[Federal Register Volume 66, Number 184 (Friday, September 21, 2001)]
[Proposed Rules]
[Pages 48626-48628]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-23653]


-----------------------------------------------------------------------

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 929

[Docket No. FV01-929-3 PR]


Cranberries Grown in the States of Massachusetts, et al.; 
Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: This rule would increase the assessment rate established under 
the cranberry marketing order for the 2001-2002 fiscal year and 
subsequent fiscal years from $.08 to $.18 per barrel of cranberries 
handled. Currently, funds derived from assessments are used to cover 
expenses incurred by the Cranberry Marketing Committee (Committee) in 
the performance of its duties and functions under the order and to fund 
an export market development program. The Committee is responsible for 
local administration of the marketing order which regulates the 
handling of cranberries grown in the production area. The proposed $.10 
increase would be used to fund a domestic market development program. 
The fiscal year began September 1 and ends August 30. The assessment 
rate would remain in effect indefinitely unless modified, suspended, or 
terminated.

DATES: Comments must be received by October 9, 2001.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent to the Docket Clerk, Fruit 
and Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box 96456, 
Washington, DC 20090-6456; Fax: (202) 720-8938; or e-mail: 
[email protected]. Comments should reference the docket number 
and the date and page number of this issue of the Federal Register and 
will be available for public inspection in the Office of the Docket 
Clerk during regular business hours or can be viewed at: http://www.ams.usda.gov/fv/moab.html.

FOR FURTHER INFORMATION CONTACT: Patricia A. Petrella or Kenneth G. 
Johnson, DC Marketing Field Office, Fruit and Vegetable Programs, AMS, 
USDA, Suite 2A04, Unit 155, 4700 River Road, Riverdale, Maryland 20737, 
telephone: (301) 734-5243; Fax: (301) 734-5275; 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) 720-8938.
    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) 720-8938, or e-mail: [email protected].

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order 
No. 929, as amended (7 CFR part 929), regulating the handling of 
cranberries grown in Massachusetts, Rhode Island, Connecticut, New 
Jersey, Wisconsin, Michigan, Minnesota, Oregon, Washington, and Long 
Island in the State of New York, hereinafter referred to as the 
``order.'' 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 Department of Agriculture (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, cranberry 
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 cranberries 
beginning September 1, 2001, and continue until amended, suspended, or 
terminated. This rule would 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 would increase the assessment rate established for the 
Committee for the 2001-2002 fiscal period and subsequent fiscal periods 
for cranberries from $0.08 to $0.18 per barrel of cranberries.
    The cranberry marketing order provides that one of the duties of 
the Committee is to formulate an annual budget of expenses and to 
recommend a rate of assessment necessary to administer the provisions 
of the order. The members of the Committee are producers of 
cranberries. 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.
    Authority to fix the rate of assessment to be paid by each handler 
and to collect such assessment appears in Sec. 928.41 of the order. In 
addition, Sec. 929.45 of the order provides that the Committee, with 
the approval of the Secretary, may

[[Page 48627]]

establish or provide for the establishment of production research, 
marketing research, and market development projects designed to assist, 
improve, or promote the marketing, distribution, consumption, or 
efficient production of cranberries. The expense of such projects would 
be paid from funds collected pursuant to Sec. 929.41 (Assessments), or 
from such other funds as approved by the Secretary.
    For the 2000-2001 fiscal period, the Committee recommended, and the 
Department approved, an assessment rate of $.08 per barrel of 
cranberries handled 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 voted by mail and recommended 2001-2002 expenditures 
of $1,206,772 and an assessment rate of $.18 per barrel of cranberries. 
Six of the eight committee members voted in support of the $.10 per 
barrel increase. Two members did not return their mail ballots to the 
Committee. The assessment rate increase was considered by the Committee 
at an earlier public meeting. The budget for 2001-2002 was recommended 
to the full Committee by the Executive Committee. The major 
expenditures recommended by the Committee for the 2001-2002 fiscal 
period include $846,953 for market development (including $490,000 for 
domestic market development, $273,953 for export market development, 
and $83,000 for export market consulting services), $123,952 for 
administration costs, $129,500 for personnel, $75,000 for Committee 
meetings, and $31,367 for payroll taxes and benefits. Included in the 
budget calculations would be about $6,000 interest and $213,953 Market 
Access Program (MAP) funds from USDA's Foreign Agricultural Service 
(FAS) for export market development. Budgeted expenses in the 
Committee's amended 2000-2001 budget were $223,647 for administration 
costs, $270,407 for export market development, $71,000 for export 
market consulting services, $119,464 for personnel, and $67,500 for 
Committee meetings. There was no domestic market development program 
for the 2000-2001 fiscal period.
    The Committee recommended the $.10 per barrel increase to fund a 
domestic market development program to increase demand for cranberries 
and cranberry products and thus expand cranberry shipments. Currently, 
supplies are outpacing demand. The Committee believes that a domestic 
market development program is needed to increase consumer awareness of 
the health benefits of cranberries and cranberry products. Currently, 
the Committee funds an export market development program with MAP money 
from FAS.
    Over the past several years, per capita consumption of cranberries 
has averaged 1.68 pounds. Per capita consumption peaked in 1994 at 1.80 
pounds and began trending downward. In 1998, per capita consumption was 
1.67 pounds. Associated with these per capita consumption figures is 
the fact that total domestic sales also peaked in 1994 at 4,692,507 
barrels and declined to 4,506,632 barrels in 1998. However, cranberry 
production reached an all-time high of 6,389,000 barrels in 1999. This 
is a 17 percent increase over 1998 production of approximately 5.4 
million barrels. Available cranberry supplies continue to out pace 
demand, resulting in high levels of carryin inventories and low grower 
prices. Grower returns have fallen 73 percent from 1997 to 2000, 
dropping from $65.90 to $15-$20 per barrel.
    The assessment rate recommended by the Committee was derived by 
estimating the cost of a viable domestic market development program 
($490,000) and then increasing the assessment rate to cover such costs. 
Cranberry shipments are projected at 4.9 million barrels which would 
provide $882,000 in assessment income. Income derived from handler 
assessments, along with interest income, FAS market access funds for 
export market development, and funds from the Committee's authorized 
reserve would be adequate to cover budgeted expenses expected to total 
$1,206,772 in 2001-2002. Funds in the reserve (currently $115,000) 
would be kept within the approximately one year's operational expenses 
permitted by the order (Sec. 929.42(a)).
    The assessment rate would 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 the assessment rate would be effective 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 the 
Department. Committee meetings are open to the public and interested 
persons may express their views at these meetings. The Department 
evaluates 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 
2001-2002 budget and those for subsequent fiscal periods would be 
reviewed and, as appropriate, approved by the Department.

Initial Regulatory Flexibility Analysis

    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 initial 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 rules 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 20 handlers of cranberries who are subject 
to regulation under the order and approximately 1,100 producers of 
cranberries in the regulated area. Small agricultural service firms, 
which includes handlers, are defined by the Small Business 
Administration (13 CFR 121.201) as those having annual receipts of less 
than $5,000,000, and small agricultural producers are defined as those 
having annual receipts of less than $750,000. The majority of cranberry 
handlers and producers may be classified as small businesses.
    This rule would increase the assessment rate established for the 
Committee and collected from handlers for the 2001-2002 and subsequent 
fiscal periods from $.08 to $.18 per barrel of cranberries. One barrel 
equals 100 pounds of cranberries.
    The Committee discussed the alternative of continuing the existing 
assessment rate, but concluded that it needed to implement a domestic 
market development program funded through assessments. The assessment 
rate recommended by the Committee was derived by determining the cost 
of a viable domestic market development program ($490,000), and then 
increasing the assessment rate to cover the additional costs. Cranberry 
shipments are projected at 4.9 million barrels which would provide 
$882,000 assessment income. Income derived from handler assessments, 
along with interest income, FAS market access

[[Page 48628]]

program funds, and funds from the Committee's authorized reserve would 
be adequate to cover budgeted expenses. Funds in the reserve (currently 
$115,000) would be kept within the approximately one year's operational 
expenses permitted by the order (section 929.42(a)).
    The major expenditures recommended by the Committee for the 2001-
2002 fiscal period include $846,953 for market development (including 
$490,000 for domestic market development, $273,953 for export market 
development, and $83,000 for export market development consulting 
services), $123,952 for administration costs, $129,500 for personnel, 
$75,000 for Committee meetings, and $31,367 for payroll taxes and 
benefits. Included in the budget calculations would be approximately 
$6,000 interest and $213,953 MAP funds from FAS for export market 
development. Budgeted expenses in the Committee's amended 2000-2001 
budget were $223,647 for administration costs, $270,407 for export 
market development, $119,464 for personnel, and $67,500 for Committee 
meetings. There was no domestic market development program for the 
2000-2001 fiscal period.
    This action would increase the assessment obligation imposed on 
handlers. While assessments impose some additional costs on handlers, 
the costs are minimal and uniform on all handlers. Some of the 
additional costs may be passed on to producers. However, these costs 
would be offset by the benefits derived by the operation of the 
marketing order. In addition, the Committee's meeting was widely 
publicized throughout the cranberry industry and all interested persons 
were invited to attend the meeting and participate in Committee 
deliberations on all issues. Like all Board meetings, all entities, 
both large and small, were able to express views on this issue. 
Finally, interested persons are invited to submit information on the 
regulatory and informational impacts of this action on small 
businesses.
    This proposed rule would impose no additional reporting or 
recordkeeping requirements on either small or large cranberry 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.
    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.
    A 15-day comment period is provided to allow interested persons to 
respond to this proposal. Fifteen days is deemed appropriate because: 
(1) The 2001-2002 fiscal period began on September 1, 2001, and the 
marketing order requires that the rate of assessment for each fiscal 
period apply to all assessable cranberries handled during such fiscal 
period; (2) the Committee needs to have sufficient funds to pay its 
expenses which are incurred on a continuous basis; and (3) handlers are 
aware of this action which was recommended by the Committee at a public 
meeting and is similar to other assessment rate actions issued in past 
years. All written comments timely received will be considered before a 
final determination is made on this matter.

List of Subjects in 7 CFR Part 929

    Cranberries, Marketing agreements, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 929 is 
proposed to be amended as follows:

PART 929--CRANBERRIES GROWN IN THE STATES OF MASSACHUSETTS, RHODE 
ISLAND, CONNECTICUT, NEW JERSEY, WISCONSIN, MICHIGAN, MINNESOTA, 
OREGON, WASHINGTON, AND LONG ISLAND IN THE STATE OF NEW YORK

    1. The authority citation for 7 CFR part 929 continues to read as 
follows:

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

    2. Section 929.239 is revised to read as follows:


Sec. 929.239  Assessment rate.

    On and after September 1, 2001, an assessment rate of $0.18 per 
barrel is established for cranberries.

    Dated: September 17, 2001.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 01-23653 Filed 9-20-01; 8:45 am]
BILLING CODE 3410-02-P