[Federal Register Volume 72, Number 60 (Thursday, March 29, 2007)]
[Rules and Regulations]
[Pages 14651-14654]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-5791]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 929

[Docket No. AMS-FV-06-0174; FV06-929-1 FR]


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule increases the assessment rate established for the 
Cranberry Marketing Committee (Committee) for the 2006-2007 fiscal year 
and subsequent fiscal years from $0.18 to $0.28 per barrel. 
Authorization to assess cranberry handlers enables the Committee to 
incur expenses that are reasonable and necessary to administer the 
program. The Committee locally administers the marketing order which 
regulates the handling of 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. The fiscal year began September 1, 2006, and ends August 
31, 2007. The assessment rate will remain in effect indefinitely unless 
modified, suspended, or terminated.

DATES: Effective Date: This rule becomes effective March 30, 2007.

FOR FURTHER INFORMATION CONTACT: Patricia A. Petrella or Kenneth G. 
Johnson, DC Marketing Field Office, Fruit and Vegetable Programs, AMS, 
USDA, Unit 155, 4700 River Road, Riverdale, Maryland 20737; telephone: 
(301) 734-5243, Fax: (301) 734-5275, or E-mail at 
[email protected] or [email protected].
    Small businesses may request information on complying with this 
regulation by contacting Jay Guerber, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence 
Avenue, SW, STOP 0237, Washington, DC 20250-0237; telephone: (202) 720-

[[Page 14652]]

2491, Fax: (202) 720-8938, or e-mail: [email protected].

SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing 
Agreement and Order No. 929, as amended (7 CFR part 929), regulating 
the handling of cranberries produced in the States of 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 (USDA) is issuing this rule in 
conformance with Executive Order 12866.
    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. Under the marketing order now in effect, 
cranberries 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, 2006, 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 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 the 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 the 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 final rule increases the assessment rate established for the 
2006-2007 and subsequent fiscal years from $0.18 to $0.28 per barrel of 
cranberries.
    The proposed rule inadvertently referred to the proposed increase 
as a ``per pound'' increase rather than a ``per barrel'' increase two 
times in the SUPPLEMENTARY INFORMATION section. The proposed regulatory 
text was correct in the proposed rule. The inadvertent errors are 
corrected in this document.
    The cranberry marketing order provides authority for the Committee, 
with 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 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.  929.41 of the order. In 
addition, Sec.  929.45 of the order provides that the Committee, with 
the approval of the USDA, may 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 is paid from funds collected 
pursuant to Sec.  929.41 (Assessments), or from such other funds as 
approved by the USDA.
    For the 2001-2002 fiscal year, the Committee recommended, and USDA 
approved, an assessment rate of $0.18 per barrel of cranberries handled 
that would continue in effect from fiscal period to fiscal period 
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 August 28, 2006, and recommended 2006-2007 
expenditures of $3,522,062 and an assessment rate of $0.28 per barrel 
of cranberries. The Committee passed the assessment rate increase by a 
vote of 12 to 2. Those not supporting the recommendation wanted a 
lesser increase. In comparison, last year's budgeted expenses were 
$2,612,265. The assessment rate of $0.28 is $0.10 higher than the rate 
currently in effect.
    The Committee recommended the $0.10 per barrel increase to cover 
increased costs. The Committee has expanded its contributions to the 
export market development program from $50,000 in 1999 to $480,000 in 
2006. The Committee has increased funding of the export market 
development program as target markets have expanded from two in 1999 
(Japan and Germany), to five in 2006 (Japan, Germany, Mexico, France 
and Australia) with contingency plans to expand activities regionally 
within Europe and in South Korea. According to the Committee, 
cranberries and cranberry products going into export markets have 
steadily increased from 10 percent of the annual cranberry production 
during the 1999-2000 fiscal period to approximately 24 percent of the 
annual production in the 2005-2006 fiscal period.
    In order to expand and maintain activities within the target 
markets, the Committee has used funds from its reserve account to meet 
the costs of educating consumers and the trade industry.
    Since the last increase published in the Federal Register on 
February 14, 2002, at 67 FR 6843, the assessment rate has not been 
increased to compensate for increases in the costs of goods and 
services, costs contributable to increasing the Committee membership 
and to pay back funds taken from the reserve for the expanding export 
market development program. As a result, the reserve has continued to 
decrease until it is at a point where the Committee is unable to meet 
the order's reserve funding requirements or balance its budget without 
an increase in assessments and/or cutback in program activities. The 
Committee recommended the assessment rate increase to continue to 
expand the generic export market development program and have 
sufficient funding to meet its operational expenses. Without this 
increase, the Committee would have to curtail expansion of the export 
market development and promotion program.
    All cranberry handlers regulated under the marketing order will pay 
the proposed assessment rate. However, certain organic handlers may be 
exempt from paying assessments for market promotion activities pursuant 
to 7 CFR 900.700.
    The major expenditures recommended by the Committee for the 2006-
2007 fiscal year include $500,000 for domestic promotion, $480,000 for 
export promotion, $154,116 for personnel, $103,500 for meetings, and 
$107,527 for administrative expenses. Budgeted expenses for major items 
in 2005-2006 were $488,225 for domestic promotion, $147,420 for 
personnel, $105,500 for meetings, and $116,542 for administrative 
expenses. The Committee recommended an increased assessment rate to 
generate larger revenue to meet its operational and export promotion 
expenses and keep its reserves at an acceptable level.

[[Page 14653]]

    In deriving the recommended assessment rate, the Committee 
determined assessable cranberry production for the upcoming fiscal 
period at 6,506,000 barrels. Therefore, total assessment income for the 
2006-2007 fiscal year is estimated at $1,821,680 (6,506,000 barrels x 
$0.28). This amount plus $1,767,600 from USDA's Foreign Agricultural 
Service's Market Access Program (MAP) and adequate funds in the reserve 
and interest income will be adequate to cover budgeted expenses. Funds 
in the reserve (approximately $541,122) will be kept within the 
approximately one fiscal period's expenses as recommended by the 
Committee consistent with Sec.  929.42(a) of the order.
    The assessment rate established in this rule will continue in 
effect indefinitely unless modified, suspended, or terminated by USDA 
upon recommendation and other information submitted by the Committee or 
other available information.
    Although the assessment rate will be 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 
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 2006-2007 budget and those 
for subsequent fiscal periods will be reviewed and, as appropriate, 
approved by the 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 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 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 50 handlers of cranberries who are subject 
to regulation under the cranberry marketing order and approximately 
1250 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 $6,500,000, and small agricultural producers are 
defined as those having annual receipts of less than $750,000. The 
majority of producers and handlers of cranberries under the order are 
considered small entities under SBA's standards.
    The principal demand for cranberries is in the form of processed 
products. Cranberries are dried, frozen, canned, and juiced. During the 
2001-2002 fiscal year through the 2005-2006 fiscal year, approximately 
91 percent of the U.S. cranberry crop, or 5.4 million barrels, was 
processed annually.
    Based on National Agricultural Statistics Service data, acreage in 
the United States devoted to cranberry production has leveled off over 
the last several crop years. Bearing acres have declined slightly from 
a high of 39,600 acres in the 2003-2004 fiscal year to 39,100 in the 
2005-2006 fiscal year. Wisconsin and Massachusetts lead the nation in 
cranberry acreage, with approximately 81 percent of the total, and 
production also at approximately 81 percent of the total U.S. cranberry 
crop each year.
    This rule increases the assessment rate established for the 
Committee and collected from handlers for the 2006-2007 fiscal period 
and subsequent periods from $0.18 to $0.28 per barrel of cranberries.
    The Committee discussed continuing the existing assessment rate, 
but concluded that it needed the additional funds to devote to its 
export market development and promotion program and replenish its 
financial reserve which would be funded through assessments.
    This action increases the assessment obligation imposed on 
handlers. While assessments impose some additional costs on handlers, 
the costs are uniform 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 cranberry 
industry and all interested persons were invited to attend the meeting 
and participate in Committee deliberations on all issues. Like all 
Committee 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 rule will 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 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.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this rule.
    As mentioned previously, a proposed rule was published in the 
Federal Register on January 16, 2007 (72 FR 1678). Copies of the 
proposed rule were mailed or sent via facsimile to all Committee 
members and handlers. Finally, the proposed rule was made available 
through the Internet, USDA and the Office of the Federal Register. A 
30-day comment period ending February 15, 2007, was provided to allow 
interested persons to respond to the proposal. Four comments were 
received. One supported and three opposed the proposal.
    The commenter in support for the assessment rate increase stated 
that the increase is needed to help fund the Committee's operations and 
to help increase consumer awareness of cranberries.
    Three comments were received (two from growers and one from a 
grower-handler) in opposition to the proposed assessment rate increase. 
One of the commenters opposed the proposal because he did not believe a 
$.10 per barrel increase in the assessment rate will have a meaningful 
increase on the demand for cranberries. The commenter also stated that 
it is inequitable to force U.S. growers to spend another $.10 per 
barrel while growers in Canada and Chile pay nothing. Finally, this 
commenter stated that it is impossible to justify an increase in the 
assessment rate for advertising when cranberry supply and demand are 
projected to be in balance. Another commenter opposed the proposal 
based on his contention that he already spends a sum of money on 
branded advertising with a major cranberry cooperative. The last

[[Page 14654]]

commenter felt that the assessment rate increase was an excessive and 
unjustified expense.
    In response to these comments, the $.10 per barrel increase is not 
specifically for export promotional activities but to provide the 
Committee with funds for its operational expenses. As previously 
stated, the assessment rate has not been increased since 2002. Since 
that time, there have been increases in the costs of goods and 
services, costs contributable to increasing Committee membership and to 
pay back funds taken from the reserve for the export market development 
program. The increase in the assessment rate is needed to generate 
larger revenue for the Committee to meet its expenses and keep its 
reserves at an acceptable level. Without the increase, the Committee 
will have to curtail its operational expenses including the export 
market development and promotion program that has[K1] been 
funded by assessments and MAP funds for the past several years.
    With regard to the equitability of some handlers paying the 
increased assessment rate while others pay no assessments, all 
cranberry handlers regulated under the marketing order will have to pay 
the increased assessment rate. Certain organic handlers are exempt from 
paying assessments on market promotion activities. However, handlers 
not regulated under the marketing order (such as those handlers in 
Canada or Chile) are not subject to its provisions and thus, do not 
have to pay assessments.
    Lastly, in regards to the commenter who already pays for branded 
advertising, we note that those advertisements promote a specific brand 
of cranberries and cranberry products. The Committee's domestic and 
export promotion programs are generic and were developed to promote the 
qualities of cranberries and cranberry products for the entire 
cranberry industry. Both the generic and branded promotion of 
cranberries and cranberry products reach new markets/customers and 
increase demand for cranberries. Under the marketing order, the 
assessment obligation is imposed on handlers. While assessments impose 
some additional costs on handlers, the costs are uniform on all 
handlers. Some of the additional costs may be passed on to producers. 
However, we believe that these costs are offset by the benefits derived 
by the operation of the marketing order.
    Accordingly, no changes will be made to this rule based on the 
comments 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.
    Pursuant to 5 U.S.C. 553, it is also found and determined that good 
cause exists for not postponing the effective date of this rule until 
30 days after publication in the Federal Register because the 2006-2007 
fiscal period began September 1, 2006, and the marketing order requires 
that the rate of assessment for each fiscal period apply to all 
assessable cranberries handled during such fiscal period. Further, 
handlers are aware of this action which was recommended by the 
Committee at a public meeting. Also, a 30-day comment period was 
provided for in the proposed rule.

List of Subjects in 7 CFR Part 929

    Cranberries, Marketing agreements, Reporting and recordkeeping 
requirements.

0
For the reasons set forth in the preamble, 7 CFR part 929 is 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

0
1. The authority citation for 7 CFR part 929 continues to read as 
follows:

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


0
2. Section 929.236 is revised to read as follows:


Sec.  929.236  Assessment rate.

    On and after September 1, 2006, an assessment rate of $.28 per 
barrel is established for cranberries.

    Dated: March 23, 2007.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
 [FR Doc. E7-5791 Filed 3-28-07; 8:45 am]
BILLING CODE 3410-02-P