[Federal Register Volume 70, Number 122 (Monday, June 27, 2005)]
[Rules and Regulations]
[Pages 36809-36812]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-12617]


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

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 915

[Docket No. FV05-915-1 FR]


Avocados Grown in South Florida; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

SUMMARY: This rule increases the assessment rate established for the 
Avocado Administrative Committee (Committee) for the 2005-06 and 
subsequent fiscal years from $0.20 to $0.27 per 55-pound bushel 
container or equivalent of avocados handled. The Committee locally 
administers the marketing order which regulates the handling of 
avocados grown in South Florida. Authorization to assess avocado 
handlers enables the Committee to incur expenses that are reasonable 
and necessary to administer the program. The fiscal year began April 1 
and ends March 31. The assessment rate remains in effect indefinitely 
unless modified, suspended, or terminated.

DATES: Effective June 28, 2005.

FOR FURTHER INFORMATION CONTACT: William G. Pimental, Marketing 
Specialist, Marketing Order Administration Branch, Fruit and Vegetable 
Programs, AMS, USDA, Southeast Marketing Field Office, 799 Overlook 
Drive, Suite A, Winter Haven, Florida 33884; Telephone: (863) 324-3375, 
Fax: (863) 325-8793; or George Kelhart, Technical Advisor, Marketing 
Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 
1400 Independence Avenue, SW., STOP 0237, Washington, DC 20250-0237; 
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

[[Page 36810]]

Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence 
Avenue, SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 
720-2491, Fax: (202) 720-8938, or e-mail: [email protected].

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement No. 121 and Order No. 915, both as amended (7 CFR part 915), 
regulating the handling of avocados grown in South Florida, 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 (USDA) 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 
avocado handlers are subject to assessments. Funds to administer the 
order are derived from such assessments. It is intended that the 
assessment rate herein is applicable to all assessable avocados 
beginning on April 1, 2005, and will 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 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 rule increases the assessment rate established for the 
Committee for the 2005-06 and subsequent fiscal years from $0.20 to 
$0.27 per 55-pound bushel container or equivalent of avocados.
    The Florida avocado marketing order provides authority for the 
Committee, with the approval of USDA, 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 
Florida avocados. 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 2002-03 and subsequent fiscal years, the Committee 
recommended, and USDA approved, an assessment rate that would continue 
in effect from fiscal year to fiscal year unless modified, suspended, 
or terminated by USDA upon recommendation and information submitted by 
the Committee or other information available to USDA.
    The Committee met on February 17, 2005, and recommended with a vote 
of nine in favor and one abstention, 2005-06 expenditures of $211,038 
and an assessment rate of $0.27 per 55-pound bushel container or 
equivalent of avocados. In comparison, last year's budgeted 
expenditures were $241,568. The assessment rate of $0.27 is $0.07 more 
than the previous rate. The Committee recommended the $0.07 increase to 
rebuild its reserves which have been reduced in recent years. In 2003-
04, the Committee estimated assessable production at one million 
containers but only harvested 660,000, causing the Committee to use its 
reserves to cover necessary expenses. In 2004-05, there was another 
shortfall of approximately 100,000 containers. Thus, 2004-05 
assessments were reduced by approximately $20,000 and the Committee 
again had to use reserves to cover its expenses. The Committee reserves 
were estimated to be approximately $110,000 at the start of the new 
fiscal year that began April 1, 2005. The Committee expects 900,000 55-
pound bushel containers to be harvested during the 2005-06 fiscal year. 
This is expected to result in approximately $32,000 in excess 
assessment income, which would increase the Committee's reserves to 
around $142,000.
    The major expenditures recommended by the Committee for the 2005-06 
year include $90,235 for salaries, $24,203 for insurance and bonds, 
$22,730 for employee benefits, $15,000 for research, and $10,000 for 
local and national enforcement. Budgeted expenses for these items in 
2004-05 were $79,800, $26,093, $23,643, $21,000, and $43,135, 
respectively. The budget item local and national enforcement was 
reduced for 2005-06 because the compliance officer was hired as 
Committee manager and this person performs both compliance and 
managerial functions. The budget item for salaries reflects these 
function changes.
    The assessment rate recommended by the Committee was derived by 
dividing anticipated expenses and increase in reserves by expected 
shipments of Florida avocados. Avocado shipments for the year are 
estimated at 900,000 bushels which should provide $243,000 in 
assessment income. Income derived from handler assessments, along with 
interest income and funds from the Committee's authorized reserve 
should be adequate to cover budgeted expenses. Funds in the reserve 
(estimated to be about $110,000 on April 1, 2005) will be kept within 
the maximum permitted by the order (approximately three fiscal years' 
expenses).
    The assessment rate established in this rule continues in effect 
indefinitely unless modified, suspended, or terminated by USDA 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 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 USDA. 
Committee meetings are open to the public and interested persons may 
express their views at these meetings. USDA 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 2005-06 budget and those 
for subsequent fiscal years will be reviewed and, as appropriate, 
approved by USDA.

Final 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 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

[[Page 36811]]

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 150 producers of avocados in the production 
area and approximately 33 handlers subject to regulation under the 
marketing order. Small agricultural producers are defined by the Small 
Business Administration (13 CFR 121.201) as those having annual 
receipts less than $750,000, and small agricultural service firms are 
defined as those whose annual receipts are less than $6,000,000.
    According to the National Agricultural Statistics Service and data 
provided by the Committee, the average Florida grower price for fresh 
avocados during the 2003-04 season was equivalent to $22.22 per 55-
pound bushel container and total shipments were around 660,000 55-pound 
bushels. Approximately 11 percent of all handlers handled 76 percent of 
Florida avocado shipments. Using the average price and information 
provided by the Committee, nearly all avocado handlers could be 
considered small businesses under the SBA definition. In addition, 
based on production and grower prices, and the total number of Florida 
avocado growers, the average annual grower revenue is approximately 
$98,000. Thus, the majority of Florida avocado producers may also be 
classified as small entities.
    This rule increases the assessment rate established for the 
Committee and collected from handlers for the 2005-06 and subsequent 
fiscal years from $0.20 to $0.27 per 55-pound bushel of avocados. The 
Committee recommended 2005-06 expenditures of $211,038 and an 
assessment rate of $0.27 per 55-pound bushel of avocados. The 
assessment rate of $0.27 is $0.07 higher than the 2004-05 rate. The 
quantity of assessable avocados for the 2005-06 fiscal year is 
estimated at 900,000 55-pound bushels. Thus, the $0.27 rate should 
provide $243,000 in assessment income and be adequate to meet expenses.
    The major expenditures recommended by the Committee for the 2005-06 
year include $90,235 for salaries, $24,203 for insurance and bonds, 
$22,730 for employee benefits, $15,000 for research, and $10,000 for 
local and national enforcement. Budgeted expenses for these items in 
2004-05 were $79,800, $26,093, $23,643, $21,000, and $43,135, 
respectively. The budget item local and national enforcement was 
reduced for 2005-06 because the compliance officer was hired as 
Committee manager and this person performs both compliance and 
managerial functions. The budget item salaries, reflects these function 
changes.
    The Committee recommended the increase in the assessment rate to 
rebuild its reserves which have been reduced in recent years. In 2003-
04, the Committee estimated assessable production at one million 
containers, but only harvested 660,000, causing the Committee to use 
its reserves to cover necessary expenses. For the 2004-05 season, 
production was approximately 100,000 containers below the Committee's 
estimate. Thus, 2004-2005 assessments were about $20,000 less than 
expected and the Committee had to use its reserves to cover expenses.
    The Committee reserves were approximately $110,000 as the new 
fiscal year started on April 1, 2005. The Committee estimates 900,000 
55-pound bushel containers will be harvested during the 2005-06 fiscal 
year. This is expected to result in $32,000 in excess assessment 
income, which would increase the Committee's reserves to around 
$142,000.
    The Committee reviewed and recommended 2005-06 expenditures of 
$211,038 which included increases in administrative and office 
salaries, and insurance and bond programs. Prior to arriving at this 
budget, the Committee considered information from various sources, such 
as the Committee's Budget Subcommittee. Several alternative assessment 
and expenditure levels were discussed by these groups based on at what 
level to fund a research project and on how much they wanted to add to 
reserves. The assessment rate of $0.27 per 55-pound bushel container of 
assessable avocados was then determined by dividing the total 
recommended budget, including the increase in reserves, by the quantity 
of assessable avocados, estimated at 900,000 55-pound bushel containers 
or equivalents for the 2005-06 fiscal year. This is approximately 
$32,000 above the anticipated expenses, which the Committee determined 
to be acceptable.
    A review of historical information and preliminary information 
pertaining to the upcoming fiscal year indicates that the average 
Florida grower price for the 2005-06 marketing season could range 
between around $15.00 and $22.00 per 55-pound bushel container or 
equivalent of avocados. Therefore, the estimated assessment revenue for 
the 2005-06 fiscal year as a percentage of total grower revenue could 
range between 1.2 and 1.8 percent.
    This action increases 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 
are offset by the benefits derived by the operation of the marketing 
order. In addition, the Committee's meeting was widely publicized 
throughout the Florida avocado industry and all interested persons were 
invited to attend the meeting and participate in Committee 
deliberations on all issues. Like all Committee meetings, the February 
17, 2005, meeting was a public meeting and all entities, both large and 
small, were able to express views on this issue.
    This rule imposes no additional reporting or recordkeeping 
requirements on either small or large Florida avocado 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.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this rule.
    A proposed rule concerning this action was published in the Federal 
Register on April 27, 2005 (70 FR 21682). Copies of the proposed rule 
were mailed or sent via facsimile to all Committee members and avocado 
handlers. Finally, the rule was made available through the Internet by 
USDA and the Office of the Federal Register. A 30-day comment period 
ending May 27, 2005, was provided to allow interested persons to 
respond to the proposal. No comments were received.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: 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 matter 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.
    Pursuant to 5 U.S.C. 553, it is further found that good cause 
exists for not postponing the effective date of this rule until 30 days 
after publication in the Federal Register because handlers are already 
receiving 2005-06 crop avocados from growers, and the fiscal

[[Page 36812]]

year began on April 1, 2005, and the assessment rate applies to all 
avocados received during the 2005-06 and subsequent seasons. Further, 
handlers are aware of this rule, which was recommended at a public 
meeting. Also, a 30-day comment period was provided for in the proposed 
rule and no comments were received.

List of Subjects in 7 CFR Part 915

    Avocados, Marketing agreements, Reporting and recordkeeping 
requirements.

0
For the reasons set forth in the preamble, 7 CFR part 915 is amended as 
follows:

PART 915--AVOCADOS GROWN IN SOUTH FLORIDA

0
1. The authority citation for 7 CFR part 915 continues to read as 
follows:

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

0
2. Section 915.235 is revised to read as follows:


Sec.  915.235  Assessment rate.

    On and after April 1, 2005, an assessment rate of $0.27 per 55-
pound container or equivalent is established for avocados grown in 
South Florida.

    Dated: June 20, 2005.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 05-12617 Filed 6-24-05; 8:45 am]
BILLING CODE 3410-02-P