[Federal Register Volume 76, Number 32 (Wednesday, February 16, 2011)]
[Rules and Regulations]
[Pages 8871-8872]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-3500]



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  Federal Register / Vol. 76, No. 32 / Wednesday, February 16, 2011 / 
Rules and Regulations  

[[Page 8871]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 984

[Doc. No. AMS-FV-10-0060; FV10-984-1 FIR]


Walnuts Grown in California; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Affirmation of interim rule as final rule.

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SUMMARY: The Department of Agriculture (USDA) is adopting, as a final 
rule, without change, an interim rule that decreased the assessment 
rate established for the California Walnut Board (Board) for the 2010-
11 and subsequent marketing years from $0.0177 to $0.0174 per 
kernelweight pound of assessable walnuts. The Board locally administers 
the marketing order that regulates the handling of walnuts grown in 
California. The assessment rate will remain in effect indefinitely 
unless modified, suspended, or terminated.

DATES: Effective Date: Effective February 17, 2011.

FOR FURTHER INFORMATION CONTACT: Jeff Smutny, Marketing Specialist, or 
Kurt J. Kimmel, Regional Manager, California Marketing Field Office, 
Marketing Order Administration Branch, Fruit and Vegetable Programs, 
AMS, USDA; Telephone: (559) 487-5901, Fax: (559) 487-5906, or E-mail: 
[email protected] or [email protected].
    Small businesses may obtain information on complying with this and 
other marketing order regulations by viewing a guide at the following 
Web site: http://www.ams.usda.gov/MarketingOrdersSmallBusinessGuide; or 
by contacting Antoinette Carter, 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, or E-mail: [email protected].

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order 
No. 984, as amended (7 CFR part 984), regulating the handling of 
walnuts grown in California, 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.''
    USDA is issuing this rule in conformance with Executive Order 
12866.
    Under the order, California walnut handlers are subject to 
assessments, which provide funds to administer the order. Assessment 
rates issued under the order are intended to be applicable to all 
assessable walnuts for the entire marketing year, and continue until 
amended, suspended, or terminated. The marketing year begins on 
September 1 and ends on August 31.
    In an interim rule published in the Federal Register on September 
15, 2010, and effective on September 16, 2010 (75 FR 55944, Doc. No. 
AMS-FV-10-0060; FV 10-984-1 IR), Sec.  984.347 was amended by 
decreasing the assessment rate established for the Board for the 2010-
11 and subsequent marketing years from $0.0177 to $0.0174 per 
kernelweight pound of assessable walnuts. The decrease in assessment 
rate was possible due to an expected increase in the quantity of 
assessable walnuts in the 2010-2011 marketing year.

Final Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), 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.
    There are approximately 4,500 growers of California walnuts in the 
production area and approximately 58 handlers subject to regulation 
under the marketing order. Small agricultural producers are defined by 
the Small Business Administration (SBA) (13 CFR 121.201) as those 
having annual receipts of less than $750,000. Small agricultural 
service firms are defined as those whose annual receipts are less than 
$7,000,000.
    USDA's National Agricultural Statistics Service (NASS) reports that 
the average yield for the 2009-10 crop was 1.96 tons per acre and the 
value of the 2009-10 crop was $1,690 per ton. Approximately 90 percent 
of California's walnut farms are smaller than 100 acres. A 100-acre 
farm with an average yield would have produced about 196 tons of 
walnuts during 2009-10. At $1,690 per ton, that farm's production would 
have had an approximate value of $331,240. Based on these numbers, the 
majority of growers had receipts of less than $750,000. According to 
information supplied by the industry, approximately two-thirds of 
California's walnut handlers shipped merchantable walnuts valued under 
$7,000,000 during the 2009-10 marketing year. Therefore, the majority 
of California's walnut growers and handlers could be considered small 
entities according to SBA's definition.
    This rule continues in effect the action that decreased the 
assessment rate established for the Board and collected from handlers 
for the 2010-11 and subsequent marketing years from $0.0177 to $0.0174 
per kernelweight pound of assessable walnuts. The Board unanimously 
recommended 2010-11 expenditures of $6,812,100 and an assessment rate 
of $0.0174 per kernelweight pound of assessable walnuts, which is 
$0.0003 lower than the rate previously in effect. The quantity of 
assessable walnuts for the 2010-11 marketing year is estimated at 
391,500,000 kernelweight pounds. Thus, the $0.0174 rate should provide 
$6,812,100 in assessment income and be adequate to cover budgeted 
expenses.
    Major budget expenditures recommended by the Board for the 2010-11 
marketing year include: $4,400,000 for domestic market development, 
$1,042,000 for production research, $577,500 for employee

[[Page 8872]]

expenses, and $118,850 for office expenses. Budgeted expenses for these 
items in 2009-2010 were $4,030,500, $725,000, $535,000, and $123,750, 
respectively.
    The Board recommended decreasing the assessment rate due to an 
expected increase in the quantity of assessable walnuts in the 2010-11 
marketing year.
    Prior to arriving at this budget, the Board considered alternative 
expenditure levels but ultimately decided that the recommended levels 
were reasonable to properly administer the order. The assessment rate 
of $0.0174 per kernelweight pound of assessable walnuts was derived by 
dividing anticipated expenses of $6,812,100 by expected 2010-11 
shipments of California walnuts. Merchantable shipments for the year 
are estimated at 391,500,000 kernelweight pounds, which should provide 
$6,812,100 in assessment income and allow the Board to cover its 
expenses.
    Unexpended funds may be retained in a financial reserve, provided 
that funds in the financial reserve do not exceed approximately two 
years' budgeted expenses. If not retained in a financial reserve, 
unexpended funds may be used temporarily to defray expenses of the 
subsequent marketing year, but must be made available to the handlers 
from whom they were collected within five months after the end of the 
year, according to Sec.  984.69 of the order.
    A review of historical information and preliminary information 
pertaining to the upcoming crop year indicates that the grower price 
for the 2010-2011 season could range between $1.42 and $1.88 per 
kernelweight pound of assessable walnuts. Therefore, the estimated 
assessment revenue for the 2010-2011 season as a percentage of total 
grower revenue could range between 0.9 and 1.2 percent.
    This rule continues in effect the action that decreased the 
assessment obligation imposed on handlers. Assessments are applied 
uniformly on all handlers, and some of the cost savings may be passed 
on to growers. The Board's meeting was widely publicized throughout the 
California walnut industry, and all interested persons were invited to 
attend the meeting and participate in Board deliberations on all 
issues. Like all Board meetings, the June 11, 2010, meeting was a 
public meeting, and all entities, both large and small, were able to 
express their views on this issue.
    This rule imposes no additional reporting or recordkeeping 
requirements on either small or large California walnut 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.
    Comments on the interim rule were required to be received on or 
before November 15, 2010. No comments were received. Therefore, for the 
reasons given in the interim rule, we are adopting the interim rule as 
a final rule, without change. To view the interim rule, go to http://www.regulations.gov/search/Regs/home.html#documentDetail?R=0900006480b4f686.
    This action also affirms information contained in the interim rule 
concerning the Executive Orders 12866 and 12988, the Paperwork 
Reduction Act (44 U.S.C. Chapter 35), and the E-Gov Act (44 U.S.C. 
101).
    After consideration of all relevant material presented, it is found 
that finalizing the interim rule, without change, as published in the 
Federal Register (75 FR 55944, September 15, 2010) will tend to 
effectuate the declared policy of the Act.

List of Subjects in 7 CFR Part 984

    Marketing agreements, Nuts, Reporting and recordkeeping 
requirements, Walnuts.

PART 984--WALNUTS GROWN IN CALIFORNIA

    Accordingly, the interim rule amending 7 CFR part 984, which was 
published at 75 FR 55944 on September 15, 2010, is adopted as a final 
rule, without change.

    Dated: February 10, 2011.
Rayne Pegg,
Administrator, Agricultural Marketing Service.
[FR Doc. 2011-3500 Filed 2-15-11; 8:45 am]
BILLING CODE 3410-02-P