[Federal Register Volume 76, Number 87 (Thursday, May 5, 2011)]
[Proposed Rules]
[Pages 25619-25622]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-11043]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1210

[Document Number AMS-FV-10-0093]


Watermelon Research and Promotion Plan; Redistricting and 
Importer Representation

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule invites comments on changing the boundaries 
of all seven districts under the Watermelon Research and Promotion Plan 
(Plan) to reapportion the producer, handler, and importer memberships 
on the National Watermelon Promotion Board (Board). In addition, the 
Board is adding two importer seats based on the quantity of watermelon 
imports in the past three years. These changes are based on a review of 
the production and assessments paid in each district and the amount of 
watermelon import assessments, which the Plan requires at least every 
five years. As a result of these changes, the importer seats would 
increase from six to eight. Therefore, the total Board membership would 
increase from 35 to 37 members. In addition, a new CFR section is added 
to reflect the importer representation on the Board.

DATES: Comments must be received by June 6, 2011.

ADDRESSES: Interested persons are invited to submit written comments on 
the Internet at: http://www.regulations.gov or to the Research and 
Promotion Branch, Fruit and Vegetable Programs, Agricultural Marketing 
Service (AMS), U.S. Department of Agriculture, (USDA) Room 0632-S, Stop 
0244, 1400 Independence Avenue, SW., Washington, DC 20250-0244; 
facsimile: (202) 205-2800. All comments should reference the docket 
number and the date and page number of this issue of the Federal 
Register and will be made available for public inspection in the above 
office during regular business hours or it can be viewed at http://www.regulations.gov. All comments received will be posted without 
change, including any personal information provided. Please be advised 
that the identity of the individuals or entities submitting comments 
will be made public on the Internet at the address provided above.

FOR FURTHER INFORMATION CONTACT: Jeanette Palmer, Marketing Specialist, 
Research and Promotion Branch, Fruit and Vegetable Programs, AMS, U.S. 
Department of Agriculture, Stop 0244, 1400 Independence Avenue, SW., 
Room 0632-S, Washington, DC 20250-0244; telephone: (888) 720-9917; 
facsimile: (202) 205-2800; or electronic mail: 
[email protected].

SUPPLEMENTARY INFORMATION: This rule is issued under the Watermelon 
Research and Promotion Plan [7 CFR part 1210]. The Plan is authorized 
under the Watermelon Research and Promotion Act (Act) [7 U.S.C. 4901-
4916].

Executive Orders 12886

    The Office of Management and Budget has waived the review process 
required by Executive Order 12866 for this action.

Executive Order 12988

    In addition, this rule has been reviewed under Executive Order 
12988, Civil Justice Reform. The rule is not intended to have 
retroactive effect.
    The Act allows producers, producer-packers, handlers, and importers 
to file a written petition with the Secretary of Agriculture 
(Secretary) if they believe that the Plan, any provision of the Plan, 
or any obligation imposed in connection with the Plan, is not 
established in accordance with law. In any petition, the person may 
request a modification of the Plan or an exemption from the Plan. The 
petitioner will have the opportunity for a hearing on the petition. 
Afterwards, an Administrative Law Judge (ALJ) will issue a decision. If 
the petitioner disagrees with the ALJ's ruling, the petitioner has 30 
days to appeal to the Judicial Officer, who will issue a ruling on 
behalf of the Secretary. If the petitioner disagrees with the 
Secretary's ruling, the petitioner may file, within 20 days, an appeal 
in the U.S. District Court for the district where the petitioner 
resides or conducts business.

Initial Regulatory Flexibility Act and Paperwork Reduction Act

    In accordance with the Regulatory Flexibility Act [5 U.S.C. 601-
612], AMS has examined the economic impact of

[[Page 25620]]

this rule on the small producers, handlers, and importers that would be 
affected by this rule.
    The Small Business Administration defines, in 13 CFR part 121, 
small agricultural producers as those having annual receipts of no more 
than $750,000 and small agricultural service firms (handlers and 
importers) as those having annual receipts of no more than $7 million. 
Under these definitions, the majority of the producers, handlers, and 
importers that would be affected by this rule would be considered small 
entities. Producers of less than 10 acres of watermelons are exempt 
from this program. Importers of less than 150,000 pounds of watermelons 
per year are also exempt.
    USDA's National Agricultural Statistics Service (NASS) data for the 
2010 crop year was about 310 hundredweight (cwt.) of watermelons were 
produced per acre. The 2010 grower price published by NASS was $12.00 
per hundredweight. Thus, the value of watermelon production per acre in 
2010 averaged about $3,720 (310 cwt. x $12.00). At that average price, 
a producer would have to farm over 202 acres to receive an annual 
income from watermelons of $750,000 ($750,000 divided by $3,720 per 
acre equals 202). Accordingly, as previously noted, a majority of the 
watermelon producers would be classified as small businesses.
    Based on the Board's data, using an average of freight on board 
(f.o.b.) price of $.0164 per pound and the number of pounds handled in 
2010, none of the watermelon handlers had receipts over the $7.5 
million threshold. Therefore, the watermelon handlers would all be 
considered small businesses. A handler would have to ship over 457 
million pounds of watermelons to be considered large (457,317,073 times 
$.0164 f.o.b. equals $7,500,000).
    According to the Board, there are approximately 950 producers, 230 
handlers, and 137 importers who are required to pay assessments under 
the program.
    Based on the watermelon import assessments received for the year 
2010, the United States imported watermelons worth over $260 million 
dollars. The largest imports of watermelon came from Mexico which 
accounted for 93 percent of the total in 2010. Other suppliers of 
imported watermelon are Guatemala at 3 percent and Honduras at 1 
percent. The remaining 3 percent of imported watermelon came from 
Canada, Netherlands, Nicaragua, Nigeria, and Panama.
    The Board's assessment records show imports for the years 2007, 
2008, and 2009 at $681,565, $783,249, and $742,363 respectively. Based 
on this data, the three-year average annual imports for watermelon 
total $735,725 (2,207,177 divided by 3). This represents approximately 
29 percent of the total assessments paid to the Board. Currently there 
are 6 importers on the Board representing 17 percent of the total 
members. Accordingly, two importer seats should be added to the Board. 
The new Board membership distribution would be 14 producers, 14 
handlers, 8 importers, and 1 public member which would bring the 
percentage of seats for importers to 22 percent of the total seats on 
the Board.
    Nominations and appointments to the Board are conducted pursuant to 
sections 1210.321 of the Plan. The Plan requires producers to be 
nominated by producers, handlers to be nominated by handlers, and 
importers to be nominated by importers. This would not change. Because 
some current members are in States or counties which would be moved to 
other districts under this rule, one producer member vacancy in the new 
District 2, one handler member vacancy in the new Districts 3, and one 
producer member vacancy in the new District 7 would result with this 
change. Nomination meetings will be held in the new districts to fill 
these vacancies.
    Appointments to the Board are made by the Secretary from a slate of 
nominated candidates. The nominees for the two producer, one handler 
and two importer positions will be submitted to the Secretary for 
appointment to the Board.
    The overall impact is favorable because the new district boundaries 
provide more equitable representation for the producers, handlers, and 
importers who pay assessments in the various districts.
    The Board chose the realignment scenario that kept the States 
together. For instance, California is currently divided into two 
districts and the Board has realigned California so that all the 
counties in California are located in one district. The new realignment 
would also give Georgia and Texas their own respective districts. The 
other States will be divided up to reflect their watermelon production 
levels and grouped together for the four remaining districts.
    The Board considered several alignments of the districts in an 
effort to provide balanced representation for each district. The Board 
selected the alignment described in this rule as it provides 
proportional representation on the Board of producers, handlers, and 
importers. The addition of two importers would allow for more importers 
representation on the Board's decision making and also potentially 
provide an opportunity to increase diversity on the Board.
    In accordance with the Office of Management and Budget (OMB) 
regulation [5 CFR part 1320] which implements the Paperwork Reduction 
Act of 1995 [44 U.S.C. Chapter 35], the background form, which 
represents the information collection and recordkeeping requirements 
that are imposed by the Plan have been approved previously under OMB 
number 0505-0001.
    The Plan requires that two nominees be submitted for each vacant 
position. With regard to information collection requirements, adding 
two importers to the Board means that four additional importers will be 
required to submit background forms to USDA in order to be considered 
for appointment to the Board. However, serving on the Board is 
optional, and the burden of submitting the background form would be 
offset by the benefits of serving on the Board. The estimated annual 
cost of providing the information by four importers would be $33 or 
$8.25 per importer. The additional minimal burden will be included in 
the existing information collection package under OMB number 0505-0001.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this rule.
    We have performed this Initial Regulatory Flexibility Analysis 
regarding the impact of this amendment to the Plan on small entities, 
and we invite comments concerning potential effects of this amendment.

Background

    Under the Plan, the Board administers a nationally coordinated 
program of research, development, advertising, and promotion designed 
to strengthen the watermelon's position in the market place and to 
establish, maintain, and expand markets for watermelons. This program 
is financed by assessments on producers growing 10 acres or more of 
watermelons, handlers of watermelons, and importers of 150,000 pounds 
of watermelons or more per year. The Plan specifies that handlers are 
responsible for collecting and submitting both the producer and handler 
assessments to the Board, reporting their handling of watermelons, and 
maintaining records necessary to verify their reporting(s). Importers 
are responsible for payment of assessments to the Board on watermelons 
imported into the United States through the U.S. Customs Service and 
Border Protection. This action will not have any impact on the 
assessment

[[Page 25621]]

rates paid by producers, handlers, and importers.
    Membership on the Board consists of two producers and two handlers 
for each of the seven districts established by the Plan, at least one 
importer, and one public member. The Board currently consists of 35 
members: 14 producers, 14 handlers, 6 importers, and 1 public member.
    The seven current districts were established in 2006. They are:
    District 1--The Florida counties of Brevard, Broward, Charlotte, 
Citrus, Collier, Dade, DeSoto, Flagler, Glades, Hardee, Hendry, 
Hernando, Highlands, Hillsborough, Indian River, Lake, Lee, Manatee, 
Martin, Marion, Monroe, Okeechobee, Orange, Osceola, Palm Beach, Pasco, 
Pinellas, Polk, Putnam, Sarasota, Seminole, St. Johns, St. Lucie, 
Sumter, and Volusia.
    District 2--The Florida counties of Alachua, Baker, Bay, Bradford, 
Calhoun, Clay, Columbia, Dixie, Duval, Escambia, Franklin, Gadsden, 
Gilchrist, Gulf, Hamilton, Holmes, Jackson, Jefferson, Lafayette, Leon, 
Levy, Liberty, Madison, Nassau, Okaloosa, Santa Rosa, Suwannee, Taylor, 
Union, Wakulla, Walton, Washington, and the Georgia counties Early, 
Baker, Miller, Mitchell, Colquitt, Thomas, Grady, Decatur, Seminole, 
and the States of Alabama, Arkansas, Louisiana, Mississippi, North 
Carolina, Oklahoma, Tennessee, and Virginia.
    District 3--The Georgia counties not included in District two and 
the State of South Carolina.
    District 4--The States of North Dakota, South Dakota, Nebraska, 
Kansas, Minnesota, Iowa, Illinois, Missouri, Michigan, Indiana, Ohio, 
Kentucky, West Virginia, Maryland, New Hampshire, Maine, New Jersey, 
New York, Pennsylvania, Massachusetts, Rhode Island, Delaware, Vermont, 
Wisconsin, Connecticut, and Washington, DC.
    District 5--The States of Alaska, Hawaii, Nevada, Oregon, and 
Washington and all of the counties in the state of California except 
for those California counties included in District Seven.
    District 6--The counties in the state of Texas, except for those 
counties in Texas included in District Seven.
    District 7--The counties in the state of Texas; Dallam, Sherman, 
Hanaford, Ochiltree, Lipscomb, Hartely, Moore, Hutchinson, Roberts, 
Hemphill, Oldham, Potter, Carson, Gray, Wheeler, Deaf Smith, Randall, 
Armstrong, Donley, Collingsworth, Parmer, Castro, Swisher, Briscoe, 
Hall, Childress, Bailey, Lamb, Hale, Floyd, Motley, Cottle, Cochran, 
Hockely, Lubbock, Crosby, Dickens, King, Yoakum, Terry, Lynn, Garza, 
Kent, Stonewall, the States of New Mexico, Arizona, Utah, Colorado, 
Idaho, Montana, and Wyoming, and the following counties in California; 
San Bernardino, Riverside, San Diego, and Imperial.
    Pursuant to section 1210.320(c) of the Plan, the Board shall review 
the seven districts every five years to determine whether realignment 
of the districts is necessary. When making a review, the Plan specifies 
that the Board should consider factors such as the most recent three 
years of USDA production reports or Board assessment reports if USDA 
production reports are unavailable, shifts and trends in quantities of 
watermelons produced, and any other relevant factors. Any realignment 
should be recommended by the Board at least six months prior to the 
date of the call for nominations and should become effective at least 
30 days prior to this date.
    Pursuant to section 1210.320 (e) of the Plan, the Secretary shall 
review importer representation every five years. According to the Plan, 
the Secretary shall review a three-year average of watermelon import 
assessments and adjust, to the extent practicable, the number of 
importers on the Board.
    The Board appointed a subcommittee to begin reviewing the U.S. 
districts and to determine whether realignment was necessary based on 
production and assessment collections in the current districts. During 
the review, as prescribed by the Plan, the subcommittee reviewed USDA's 
Annual Crop Summary reports for 2007 through 2009, which provided 
figures for the top 17 watermelon producing states, and the Board's 
assessment collection records for 2007 through 2009. Both sets of data 
showed similar trends in production among the various States. However, 
the Board used the assessment reports because USDA's Annual Crop 
Summary reports were available for only 17 of the 34 states in which 
watermelons are produced.
    The subcommittee recommended to the Board that the boundaries of 
all seven districts be changed in order to provide for a better 
distribution of production among producers and handlers in the 
districts.
    The subcommittee also considered the assessments of watermelon 
imports paid to the Board. The Board's assessment records show imports 
for the years 2007, 2008, and 2009 at $681,565, $783,249, and $742,363 
respectively. Based on this data, the three-year average annual imports 
for watermelon total $735,725 (2,207,177 divided by 3). The average 
annual percentage of assessments paid by importers represents almost 29 
percent of the Board's assessment income. In contrast to the 2006 
realignment, the importer's assessment collection represented 20 
percent of the Board's assessment income. Because there was a 9 percent 
increase in the assessments on imports, the Board recommended an 
increase in the number of importers on the Board. USDA has evaluated 
information concerning importer assessments and has determined that the 
number of importer representatives on the Board should be increased by 
two members. Therefore, the number of importer Board members would 
increase from six to eight.
    Section 1647 (3)(A) of the Act authorizes the Board to have at 
least one or more importer representative to serve on the Board. 
However, there is no section in the Plan that identifies the number of 
importers on the Board. Section 1210.502 is currently reserved and will 
be used to reflect importer representation on the Board.
    The realignment was approved by the Board at its November 13, 2010, 
meeting. Under the realignment, each district would represent, on 
average, 16 percent of total U.S. production. The composition of the 
Board would increase to a total of 37 members: 14 producers, 14 
handlers, 8 importers, and 1 public member.
    Therefore, this rule realigns the districts as follows:
    District 1--The Florida counties of Brevard, Broward, Charlotte, 
Collier, Dade, Desoto, Glades, Hardee, Hendry, Highlands, Hillsborough, 
Indian River, Lake, Lee, Manatee, Martin, Monroe, Okeechobee, Orange, 
Osceola, Palm Beach, Pasco, Pinellas, Polk, Sarasota, Seminole, St. 
Lucie, and Volusia.
    District 2--The Florida counties of Alachua, Baker, Bay, Bradford, 
Calhoun, Citrus, Clay, Columbia, Dixie, Duval, Escambia, Flagler, 
Franklin, Gadsden, Gilchrist, Gulf, Hamilton, Hernando, Holmes, 
Jackson, Jefferson, Lafayette, Leon, Levy, Liberty, Madison, Marion, 
Nassau, Okaloosa, Putnam, Santa Rosa, St. Johns, Sumter, Suwannee, 
Taylor, Union, Wakulla, Walton, and Washington, and the States of North 
Carolina and South Carolina.
    District 3--The State of Georgia.
    District 4--The States of Alabama, Connecticut, Delaware, Illinois, 
Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, New 
Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, 
Tennessee, Virginia, Vermont, Wisconsin, West Virginia, and Washington, 
DC.
    District 5--The State of California.

[[Page 25622]]

    District 6--The State of Texas.
    District 7--The States of Alaska, Arkansas, Arizona, Colorado, 
Hawaii, Idaho, Iowa, Kansas, Louisiana, Minnesota, Mississippi, 
Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, 
Oklahoma, Oregon, South Dakota, Utah, Washington, and Wyoming.
    Under this realignment: (1) The Florida counties of Citrus, 
Flagler, Hernando, Marion, Putnam, St. Johns and Sumter are moved from 
District 1 to District 2; (2) Alabama, Tennessee, and Virginia are 
moved from District 2 to District 4; (3) Arkansas, Louisiana, 
Mississippi, and Oklahoma are moved from District 2 to District 7; (4) 
Georgia counties Early, Baker, Miller, Mitchell, Colquitt, Thomas, 
Grady, Decatur, and Seminole are moved from District 2 to District 3, 
(5) South Carolina moved from District 3 to District 2; (6) Iowa, 
Kansas, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota 
are moved from District 4 to District 7; (7) Alaska, Hawaii, Nevada, 
Oregon, and Washington are moved from District 5 to District 7; (8) The 
following counties in the State of Texas: Armstrong, Bailey, Briscoe, 
Carson, Castro, Childress, Cochran, Collingsworth, Cottle, Crosby, 
Dallam, Deaf Smith, Dickens, Donley, Floyd, Garza, Gray, Hale, Hall, 
Hanaford, Hartely, Hemphill, Hockely, Hutchinson, Kent, King, Lamb, 
Lipscomb, Lubbock, Lynn, Moore, Motley, Ochiltree, Oldham, Parmer, 
Potter, Randall, Roberts, Sherman, Stonewall, Swisher, Terry, Wheeler, 
and Yoakum are moved from District 7 to District 6; (9) the following 
counties in California: San Bernardino, Riverside, San Diego, and 
Imperial are moved from District 7 to District 5.
    Due to the re-alignment of districts, the following vacancies are 
created: one producer vacancy in District 2; one handler vacancy in 
District 3, one producer vacancy in District 7; and two importer 
vacancies. Current Board members would be affected because their States 
or counties would be moved to other districts. Nomination meetings will 
be held as soon as possible in the new districts to fill the vacancies.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposal. Thirty days is deemed appropriate so that the 
proposed amendments, if adopted, may be implemented to allow for the 
calendar year 2012 nomination meetings to take place before the 
appointments for new Board members are due. All written comments 
received in response to this rule by the date specified would be 
considered prior to finalizing this action.

List of Subjects in 7 CFR Part 1210

    Administrative practice and procedure, Advertising, Consumer 
information, Marketing agreements, Reporting and recordkeeping 
requirements, Watermelon promotion.

    For the reasons set forth in the preamble, Part 1210, Chapter XI of 
Title 7 is proposed to be amended as follows:

PART 1210--WATERMELON RESEARCH AND PROMOTION PLAN

    1. The authority citation for 7 CFR Part 1210 continues to read as 
follows:

    Authority: 7 U.S.C. 4901-4916 and 7 U.S.C. 7401.

Subpart C--Rules and Regulations

    2. Section 1210.501 is revised to read as follows:


Sec.  1210.501  Realignment of districts.

    Pursuant to Sec.  1210.320(c) of the Plan, the districts shall be 
as follows:
    District 1--The Florida counties of Brevard, Broward, Charlotte, 
Collier, Dade, Desoto, Glades, Hardee, Hendry, Highlands, Hillsborough, 
Indian River, Lake, Lee, Manatee, Martin, Monroe, Okeechobee, Orange, 
Osceola, Palm Beach, Pasco, Pinellas, Polk, Sarasota, Seminole, St. 
Lucie, and Volusia.
    District 2--The Florida counties of Alachua, Baker, Bay, Bradford, 
Calhoun, Citrus, Clay, Columbia, Dixie, Duval, Escambia, Flagler, 
Franklin, Gadsden, Gilchrist, Gulf, Hamilton, Hernando, Holmes, 
Jackson, Jefferson, Lafayette, Leon, Levy, Liberty, Madison, Marion, 
Nassau, Okaloosa, Putnam, Santa Rosa, St. Johns, Sumter, Suwannee, 
Taylor, Union, Wakulla, Walton, and Washington, and the States of North 
Carolina and South Carolina.
    District 3--The State of Georgia.
    District 4--The States of Alabama, Connecticut, Delaware, Illinois, 
Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, New 
Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, 
Tennessee, Virginia, Vermont, Wisconsin, West Virginia, and Washington, 
DC.
    District 5--The State of California.
    District 6--The State of Texas.
    District 7--The States of Alaska, Arkansas, Arizona, Colorado, 
Hawaii, Idaho, Iowa, Kansas, Louisiana, Minnesota, Mississippi, 
Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, 
Oklahoma, Oregon, South Dakota, Utah, Washington, and Wyoming.
    3. Section 1210.502 is added to read as follows:


Sec.  1210.502  Importer members.

    Pursuant to Sec.  1210.320(d) of the Plan, there are eight importer 
representatives on the Board based on the proportionate percentage of 
assessments paid by importers to the Board.

    Dated: April 28, 2011.
David R. Shipman,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2011-11043 Filed 5-4-11; 8:45 am]
BILLING CODE 3410-02-P