[Federal Register Volume 77, Number 144 (Thursday, July 26, 2012)]
[Rules and Regulations]
[Pages 43709-43711]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-18317]



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  Federal Register / Vol. 77, No. 144 / Thursday, July 26, 2012 / Rules 
and Regulations  

[[Page 43709]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 966

[Doc. No. AMS-FV-11-0080; FV11-966-1 FR]


Tomatoes Grown in Florida; 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 
Florida Tomato Committee (Committee) for the 2011-12 and subsequent 
fiscal periods from $0.0275 to $0.037 per 25-pound carton of tomatoes 
handled. The Committee locally administers the marketing order which 
regulates the handling of tomatoes grown in Florida. Assessments upon 
tomato handlers are used by the Committee to fund reasonable and 
necessary expenses of the program. The fiscal period begins August 1 
and ends July 31. The assessment rate will remain in effect 
indefinitely unless modified, suspended, or terminated.

DATES: Effective Date: July 27, 2012.

FOR FURTHER INFORMATION CONTACT: Doris Jamieson, Marketing Specialist, 
or Christian D. Nissen, Regional Director, Southeast Marketing Field 
Office, Marketing Order and Agreement Division, Fruit and Vegetable 
Program, AMS, USDA; Telephone: (863) 324-3375, Fax: (863) 325-8793, or 
Email: [email protected] or [email protected].
    Small businesses may request information on complying with this 
regulation by contacting Laurel May, Marketing Order and Agreement 
Division, Fruit and Vegetable Program, AMS, USDA, 1400 Independence 
Avenue SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-
2491, Fax: (202) 720-8938, or Email: [email protected].

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement No. 125 and Order No. 966, both as amended (7 CFR part 966), 
regulating the handling of tomatoes grown in 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 tomato 
handlers 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 tomatoes 
beginning August 1, 2011, and continue until amended, suspended, or 
terminated.
    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 2011-12 and subsequent fiscal periods from $0.0275 to 
$0.037 per 25-pound carton of tomatoes.
    The Florida tomato 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 of Florida 
tomatoes. 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 2009-10 and subsequent fiscal periods, the Committee 
recommended, and USDA approved, an assessment rate 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 23, 2011, and unanimously recommended 
2011-12 expenditures of $1,496,452 and an assessment rate of $0.037 per 
25-pound carton of tomatoes. In comparison, last year's budgeted 
expenditures were $1,496,971. The assessment rate of $0.037 is $0.0095 
higher than the rate currently in effect.
    The Committee estimates the 2011-2012 crop to be approximately 35 
million 25-pound cartons, down from the 45 million cartons estimated 
for last year. At the current assessment rate, assessment income would 
equal only $962,500, an amount insufficient to cover the Committee's 
anticipated expenditures. Therefore, the Committee voted to increase 
the assessment rate in order to generate sufficient funds to meet 
Committee expenses.
    The major expenditures recommended by the Committee for the 2011-12 
year include $575,000 for education and promotion, $436,372 for 
salaries, $250,000 for research, and $64,000 for office space. Budgeted 
expenses for these items in 2010-11 were $535,500, $436,372, $250,000, 
and $62,283, respectively.
    The assessment rate recommended by the Committee was derived by 
dividing anticipated expenses by expected shipments of Florida 
tomatoes. Tomato shipments for the year are estimated at 35 million 25-
pound cartons which should provide $1,295,000 in assessment income. 
Income derived from handler assessments, along with interest income, 
USDA Market Access Program (MAP) funds, and funds from the Committee's 
authorized reserve,

[[Page 43710]]

should be adequate to cover budgeted expenses. Funds in the reserve 
(approximately $200,000) will be kept within the maximum permitted by 
the order of not to exceed one fiscal period's expenses as stated in 
Sec.  966.44.
    The assessment rate established in this rule will continue 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 will be in effect 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 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 2011-12 budget and those 
for subsequent fiscal periods would be reviewed and, as appropriate, 
approved by USDA.

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 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 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 100 producers of tomatoes in the production 
area and approximately 80 handlers subject to regulation under the 
marketing order. Small agricultural producers are defined by the Small 
Business Administration (SBA) as those having annual receipts less than 
$750,000, and small agricultural service firms are defined as those 
whose annual receipts are less than $7,000,000 (13 CFR 121.201).
    Based on industry and Committee data, the average annual price for 
fresh Florida tomatoes during the 2010-11 season was approximately 
$13.88 per 25-pound container, and total fresh shipments for the 2010-
11 season were 36,100,637 25-pound cartons of tomatoes. Committee data 
indicates that approximately 21 percent of the handlers handle 90 
percent of the total volume shipped. Based on the average price, about 
80 percent of handlers could be considered small businesses under SBA's 
definition. In addition, based on production data, grower prices as 
reported by the National Agricultural Statistics Service, and the total 
number of Florida tomato growers, the average annual grower revenue is 
below $750,000. Thus, the majority of handlers and producers of Florida 
tomatoes may be classified as small entities.
    This rule increases the assessment rate established for the 
Committee and collected from handlers for the 2011-12 and subsequent 
fiscal periods from $0.0275 to $0.037 per 25-pound carton of tomatoes. 
The Committee unanimously recommended 2011-12 expenditures of 
$1,496,452 and an assessment rate of $0.037 per 25-pound carton of 
tomatoes. The assessment rate of $0.037 is $0.0095 higher than the 
2010-11 rate. The quantity of assessable tomatoes for the 2011-12 
season is estimated at 35 million cartons. Thus, the $0.037 rate should 
provide $1,295,000 in assessment income. Income derived from handler 
assessments, along with interest income, MAP funds, and funds from the 
Committee's authorized reserve fund, should be adequate to meet this 
year's expenses.
    The major expenditures recommended by the Committee for the 2011-12 
year include $575,000 for Education and Promotion, $436,372 for 
salaries, $250,000 for research, and $64,000 for office space. Budgeted 
expenses for these items in 2010-11 were $535,500, $436,372, $250,000, 
and $62,283, respectively.
    The Committee estimates the 2011-12 crop to be approximately 35 
million 25-pound cartons, down from the 45 million cartons estimated 
for last year. At the current assessment rate, assessment income would 
equal only $962,500, an amount insufficient to cover the Committee's 
anticipated expenditures. Therefore, the Committee voted to increase 
the assessment rate in order to generate sufficient funds to meet 
Committee expenses.
    The Committee reviewed and unanimously recommended 2011-12 
expenditures of $1,496,452. Prior to arriving at this budget, the 
Committee considered information from various sources, such as the 
Committee's Executive Subcommittee, Finance Subcommittee, and Education 
and Promotion Subcommittee. Alternative expenditure levels were 
discussed by these groups, based upon the relative value of various 
education and promotion projects to the tomato industry. The assessment 
rate of $0.037 per 25-pound carton of assessable tomatoes was then 
determined by dividing the total recommended budget by the quantity of 
assessable tomatoes, estimated at 35 million 25-pound cartons for the 
2011-12 year. The increased assessment rate should provide $1,295,000 
in assessment income. This is approximately $201,452 below the 
anticipated expenses, which the Committee determined to be acceptable.
    A review of historical information and preliminary information 
pertaining to the upcoming crop year indicates that the grower price 
for the 2011-12 season could range between $32.80 and $4.83 per 25-
pound carton of tomatoes. Therefore, the estimated assessment revenue 
for the 2011-12 crop year as a percentage of total grower revenue could 
range between .1 and .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 tomato industry and all interested persons were 
invited to attend the meeting and participate in Committee 
deliberations on all issues. Like all Committee meetings, the August 
23, 2011, meeting was a public meeting and all entities, both large and 
small, were able to express views on this issue.
    In accordance with the Paperwork Reduction Act of 1995, (44 U.S.C. 
Chapter 35), the order's information collection requirements have been 
previously approved by the Office of Management and Budget (OMB) and 
assigned OMB No. 0581-0178 Vegetable and Specialty Crops. No changes in 
those requirements as a result of this action are necessary. Should any 
changes become necessary, they would be submitted to OMB for approval.
    This rule imposes no additional reporting or recordkeeping 
requirements on either small or large Florida tomato handlers. As with 
all Federal marketing order programs, reports and forms are 
periodically reviewed to reduce

[[Page 43711]]

information requirements and duplication by industry and public sector 
agencies. As noted in the initial regulatory flexibility analysis, USDA 
has not identified any relevant Federal rules that duplicate, overlap, 
or conflict with this final rule.
    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.
    A proposed rule concerning this action was published in the Federal 
Register on April 10, 2012 (77 FR 21492). Copies of the proposed rule 
were also mailed or sent via facsimile to all tomato handlers. Finally, 
the proposal was made available through the Internet by USDA and the 
Office of the Federal Register. A 15-day comment period ending April 
25, 2012, was provided for interested persons to respond to the 
proposal. Three comments were received in support of the proposal. One 
commenter stated that he initially had concerns regarding the increase 
in the assessment rate. However, after reviewing the Committee's budget 
of expenditures and noting that the increase is paid uniformly among 
all handlers, he stated the increase was necessary and fairly 
distributed. Another commenter noted that the increase is necessary due 
to the rising prices of goods and services and is only proposed to 
cover budgeted expenses. Another commenter stated the increase would 
improve the income for local farmers.
    Accordingly, no changes will be made to the rule as proposed, 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: 
www.ams.usda.gov/MarketingOrdersSmallBusinessGuide. Any questions about 
the compliance guide should be sent to Laurel May 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 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 handlers are 
already receiving 2011-12 crop tomatoes from growers; the marketing 
order requires that the rate of assessment for each fiscal period apply 
to all assessable tomatoes handled during such period; and, the 
Committee needs to have sufficient funds to pay its expenses which are 
incurred on a continuous basis. Further, handlers are aware of this 
rule which was recommended at a public meeting. Also, a 15-day comment 
period was provided for in the proposed rule.

List of Subjects in 7 CFR Part 966

    Marketing agreements, Reporting and recordkeeping requirements, 
Tomatoes.

    For the reasons set forth in the preamble, 7 CFR part 966 is 
amended as follows:

PART 966--TOMATOES GROWN IN FLORIDA

0
1. The authority citation for 7 CFR part 966 continues to read as 
follows:

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


0
2. Section 966.234 is revised to read as follows:


Sec.  966.234  Assessment rate.

    On and after August 1, 2011, an assessment rate of $0.037 per 25-
pound carton is established for Florida tomatoes.

    Dated: July 20, 2012.
David R. Shipman,
Administrator, Agricultural Marketing Service.
[FR Doc. 2012-18317 Filed 7-25-12; 8:45 am]
BILLING CODE 3410-02-P