[Federal Register Volume 75, Number 193 (Wednesday, October 6, 2010)]
[Rules and Regulations]
[Pages 61589-61591]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-25130]



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  Federal Register / Vol. 75, No. 193 / Wednesday, October 6, 2010 / 
Rules and Regulations  

[[Page 61589]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1219

[Document Number AMS-FV-10-0007]


Hass Avocado Promotion, Research, and Information Order; Section 
610 Review

AGENCY: Agricultural Marketing Service.

ACTION: Confirmation of regulations.

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SUMMARY: This document summarizes the results of an Agricultural 
Marketing Service (AMS) review of the Hass Avocado Promotion, Research, 
and Information Order (Order) under criteria contained in section 610 
of the Regulatory Flexibility Act (RFA).

ADDRESSES: Interested persons may obtain a copy of the review on the 
Internet at: http://www.regulations.gov or request copies from the 
Docket Clerk, Research and Promotion Branch, Fruit and Vegetable 
Programs, AMS, USDA, 1400 Independence Avenue, SW., Room 0632-S, Stop 
0244, Washington, DC 20250-0244; facsimile: (202) 205-2800 or 
electronic mail: [email protected].

FOR FURTHER INFORMATION CONTACT: Maureen T. Pello, Marketing 
Specialist, Research and Promotion Branch, Fruit and Vegetable 
Programs, AMS, USDA, P.O. Box 831, Beavercreek, Oregon 97004; 
telephone: (503) 632-8848; facsimile (503) 632-8852; or electronic 
mail: [email protected].

SUPPLEMENTARY INFORMATION: The Order (7 CFR part 1219) is authorized 
under the Hass Avocado Promotion, Research and Information Act of 2000 
(Act) (7 U.S.C. 7801-7813).
    The Order became effective on September 9, 2002. The Order is 
administered by the Hass Avocado Board (Board) with oversight by AMS. 
The program is funded by assessments on fresh domestic and imported 
Hass avocados. Domestic producers and importers pay the assessments. 
The producer assessment is remitted by first handlers, and the importer 
assessment is remitted by the U.S. Customs and Border Protection. 
Exports of domestic Hass avocados are exempt from assessments. The 
purpose of the program is to increase consumption of Hass avocados in 
the United States.
    Under the Order, a State association of avocado producers receives 
85 percent of the assessments paid by domestic producers, and certified 
importer associations receive 85 percent of the assessments paid by 
their members. The State and importer associations use these funds to 
conduct State-of-origin and country-of-origin promotions, respectively.
    The Board is composed of 12 members, 7 who are producers and 5 who 
are importers. Each member has an alternate. The members and alternates 
are appointed to the Board by the Secretary of Agriculture (Secretary) 
and serve a term of 3 years.
    Currently, there are approximately 6,000 producers of Hass avocados 
in the United States, approximately 115 importers, and approximately 
100 first handlers subject to the provisions of the Order. The majority 
of domestic producers and importers of Hass avocados may be classified 
as small entities, while most first handlers would not.
    AMS published in the Federal Register on March 24, 2006 (71 FR 
14827), its plan to review certain regulations, including the Order, 
under criteria contained in section 610 of the RFA (5 U.S.C. 601-612). 
Because many AMS regulations impact small entities, AMS decided, as a 
matter of policy, to review certain regulations which, although they 
may not meet the threshold requirement under section 610 of the RFA, 
warrant review.
    AMS published a notice of review and request for written comments 
in the Federal Register on February 23, 2010 (75 FR 7986) on its plan 
to review certain regulations, including the Order. The comment period 
ended on April 26, 2010. Three comments were received in response to 
the notice and are discussed later in this document.
    The purpose of the review was to determine whether the Order should 
be continued without change, amended, or rescinded (consistent with the 
objectives of the Act) to minimize the impact on small entities. AMS 
considered the following factors: (1) The continued need for the Order; 
(2) the nature of complaints or comments received from the public 
concerning the Order; (3) the complexity of the Order; (4) the extent 
to which the Order overlaps, duplicates, or conflicts with other 
Federal rules, and, to the extent feasible, with State and local 
regulations; and (5) the length of time since the Order has been 
evaluated or the degree to which technology, economic conditions, or 
other factors have changed in the area affected by the Order.
    Based upon its review, USDA has concluded that there is a continued 
need for the Order. The total volume of Hass avocados produced 
domestically and imported into the United States has grown 
significantly since the inception of the Order. From 2003 through 2005, 
Hass avocado domestic production and imports averaged about 712 million 
pounds annually. From 2007 through 2009, Hass avocado domestic 
production and imports averaged about 1 billion pounds annually. 
Through the efforts of the Board and State and importer associations 
which receive assessments funds from the Board, the industry has worked 
together to successfully grow the demand for Hass avocados. Between 
1998 and 2007, the average annual growth for U.S. consumption for 
avocados was 13.2 percent with producer prices remaining fairly 
constant.\1\ The Board and State and importer association promotion 
programs have significantly helped to increase demand and maintain 
orderly marketing since the Order's inception.
---------------------------------------------------------------------------

    \1\ Carmen, C., L. Li, R. Sexton, An Economic Evaluation of the 
Hass Avocado Promotion Order's First Five Years, p. 72.
---------------------------------------------------------------------------

    Regarding the nature of complaints or comments received from the 
public concerning the Order, as previously mentioned, three comments 
were received. They are discussed in the following paragraphs.
    One comment supported the marketing efforts under the program, but 
expressed concern with the rising costs that California growers are 
experiencing, especially costs for water. The comment suggested that 
the Order be revised to provide for a sliding scale for assessments so 
that avocados up to a

[[Page 61590]]

certain threshold amount would be assessed at a lower rate than 
avocados over the threshold. However, the Act authorizes only uniform 
assessment rates.
    Two comments expressed concern with the Board's composition. They 
stated that, on the 12 member Board, 7 seats are for domestic producers 
and a maximum of 5 seats are for importers, regardless of shifts in the 
volume of Hass avocados produced domestically or imported into the 
United States. They also expressed concern that foreign producers and 
packers are not represented on the Board as in some other research and 
promotion programs.
    The composition of the Board is set forth in the provisions of the 
Act and Order which provide that the Board shall consist of seven 
members who are domestic producers of Hass avocados who are subject to 
assessment under the Order and two members who represent importers of 
Hass avocados who are subject to assessment under the Order. The Board 
shall also consist of three members who are either domestic producers 
or importers to reflect the proportion of domestic production and 
imports supplying the United States market, depending on the average 
volume of domestic production of Hass avocados proportionate to the 
average volume of imports of Hass avocados in the United States over 
the previous 3 years. While the initial Board consisted of eight 
domestic producer members and four importer members, the current 
Board's membership consists of seven members who are domestic producers 
and five members who are importers, the maximum number of seats 
authorized for importers.
    Two comments expressed concern that the importer associations under 
the Order cannot use assessment funds to pay administrative expenses 
incurred by the associations while the Board can spend up to 10 percent 
of the projected level of assessments and other income received by the 
Board for a fiscal period to pay administrative expenses. The 
commenters argue this is unfair and that other Federal promotion boards 
can use assessment funds to pay administrative expenses. However, the 
Act and Order specify that assessment funds shall not be used by 
importer associations to pay administrative expenses for such 
associations, which is also consistent with the provision for the 
domestic State association.
    Two comments expressed concern that the existing State association 
under the Order receives the full 85 percent of the assessments paid by 
domestic producers while the importer associations receive 85 percent 
of the assessments paid by their respective association members.
    The Act and Order specify that a State organization of avocado 
producers established pursuant to State law shall receive an amount 
equal to the product obtained by multiplying the aggregate amount of 
assessments attributable to the pounds of Hass avocados produced in 
such State by 85 percent. The State organization (association) under 
the Order is authorized under the California Food and Agricultural 
Code.
    The Act and Order also specify that an association of Hass avocado 
importers established or certified under the Order shall receive an 
amount of assessment funds equal to 85 percent of the assessments paid 
on Hass avocados imported by its members. However, not all Hass avocado 
importers have joined or are affiliated with an importers association. 
Additionally, the Order's promulgation rulemaking record indicated that 
requiring all importers to join an association is not authorized under 
the Act. USDA believes that additional dialogue with the industry may 
be appropriate to consider possible solutions that would be consistent 
with the Act in order to address this issue.
    One comment expressed concern that the Board is required to enter 
into a contract with the State association under the Order to manage 
its promotional program that is funded primarily by assessments from 
importers.
    The Act and Order specify that the Board, with approval of the 
Secretary, shall enter into a contract or an agreement with an avocado 
organization established by State statute in a State with the majority 
of Hass avocado production in the United States, for the implementation 
of a plan or project for promotion, industry information, consumer 
information, or related research with respect to Hass avocados, and/or 
the payment of the costs of the contract or agreement with funds 
received by the Board under the Order.
    One comment expressed concern with the referendum criteria 
specified in the Act and Order. The comment argues that, although a 
majority of the assessments are paid by importers of Hass avocados, the 
referendum procedures were designed to give domestic producers a 
permanent majority in a referendum. Further, the comment contends that, 
even if a referendum were held to address some of their concerns, no 
relief would be provided to importers.
    The Act and Order specify that the Order, or an amendment thereto, 
must be approved by a simple majority of all votes cast in a 
referendum. Changing the referendum criteria is not authorized under 
the Act.
    One commenter expressed concern that the Board's composition 
violates the North American Free Trade Agreement (NAFTA), and that the 
85 percent provision violates the NAFTA and the General Agreement on 
Tariff and Trade. USDA continues to view these provisions as consistent 
with applicable trade obligations.
    In considering the complexity of the Order, USDA also continues to 
believe the Order is not unduly complex. It provides authority for the 
Board to collect assessments from Hass avocado domestic producers and 
importers to fund programs to help increase the consumption of Hass 
avocados in the United States.
    Regarding whether the Order overlaps, duplicates, or conflicts with 
other Federal rules and State and local regulations, there is a Federal 
marketing order for avocados grown in south Florida (7 CFR part 915). 
According to the National Agricultural Statistics Service, there is 
little or no production of Hass avocados in Florida. Since California 
is the source for more than 95 percent of avocados produced in the 
United States and Florida does not produce Hass avocados, there is no 
duplication between this Order and the Federal marketing order.
    As previously mentioned, there is also a State avocado program in 
California, which is administered by the State association. The chief 
objective of the program is to increase consumer awareness of and 
demand for avocados on behalf of the State's 6,000 producers. Under the 
program, producers pay a percentage-of-revenue fee to fund a variety of 
market development programs. The State assessment may not exceed 6.5 
percent of the gross dollar value of the year's sales of avocados by 
all producers to handlers, or which are sold by handlers on behalf of 
producers. The assessments are collected from the producers by 
handlers, who remit the money to the association. Section 1212(c) of 
the Act states that nothing may be construed to preempt or supersede 
any other program relating to Hass avocado promotion, research, 
industry information, and consumer information organized and operated 
under the laws of the United States or of a state. The Federal program 
compliments the State program but does not overlap, duplicate or 
conflict with it.
    Regarding evaluations of the Order or the degree to which 
technology, economic conditions, or other factors have changed in the 
area affected by the Order, section 1205(c)(7) of the Act and

[[Page 61591]]

Sec.  1219.38(k) of the Order require the Board to evaluate on-going 
and completed programs, plans, and projects for Hass avocado promotion, 
industry information, consumer information, or related research and to 
comply with the independent evaluation provisions of the Federal 
Agricultural Improvement and Reform Act of 1996 (FAIR). The Board 
routinely evaluates its programs to ensure their effectiveness, and a 
formal evaluation was conducted under the FAIR in 2009.
    Accordingly, USDA has determined that the Hass avocado Order should 
be continued. The Order was established to help increase the 
consumption of domestic and imported Hass avocados in the United 
States. Concerns raised in the comments received were to a great extent 
changes that would require congressional action. AMS will continue to 
work with the Hass avocado industry in maintaining an effective 
program.

    Dated: October 1, 2010.
Rayne Pegg,
Administrator.
[FR Doc. 2010-25130 Filed 10-5-10; 8:45 am]
BILLING CODE 3410-02-P