[Federal Register Volume 89, Number 72 (Friday, April 12, 2024)]
[Rules and Regulations]
[Pages 25775-25778]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-07809]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 927

[Doc. No. AMS-SC-23-0037]


Pears Grown in Oregon and Washington; Increased Assessment Rate 
for Processed Pears

AGENCY: Agricultural Marketing Service, Department of Agriculture 
(USDA).

ACTION: Final rule.

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SUMMARY: This rule implements a recommendation from the Processed Pear 
Committee (Committee) to increase the assessment rate established for 
the 2023-2024 fiscal period and subsequent fiscal periods. The 
assessment rate will remain in effect indefinitely unless modified, 
suspended, or terminated.

DATES: Effective May 13, 2024.

FOR FURTHER INFORMATION CONTACT: Dale Novotny, Marketing Specialist, or 
Barry Broadbent, Acting Chief, West Region Branch, Market Development 
Division, Specialty Crops Program, AMS, USDA; Telephone: (503) 326-
2724, or Email: [email protected] or [email protected].
    Small businesses may request information on complying with this 
regulation by contacting Richard Lower, Market Development Division, 
Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP 
0237, Washington, DC 20250-0237; Telephone: (202) 720-8085, or Email: 
[email protected].

SUPPLEMENTARY INFORMATION: This action, pursuant to 5 U.S.C. 553, 
implements an amendment to regulations issued to carry out a marketing 
order as defined in 7 CFR 900.2(j). This rule is issued under Marketing 
Order No. 927, as amended (7 CFR part 927), regulating the handling of 
pears grown in Oregon and Washington. Part 927 referred to as 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 Committee locally administers the Order and is comprised 
of growers, handlers, and processors of pears operating within the area 
of production, and a public member.
    The Agricultural Marketing Service (AMS) is issuing this rule in 
conformance with Executive Orders 12866, 13563, and 14094. Executive 
Orders 12866 and 13563 direct agencies to assess all costs and benefits 
of available regulatory alternatives and, if regulation is necessary, 
to select regulatory approaches that maximize net benefits (including 
potential economic, environmental, public health and safety effects, 
distributive impacts, and equity). Executive Order 13563 emphasizes the 
importance of quantifying both costs and benefits, reducing costs, 
harmonizing rules, and promoting flexibility. Executive Order 14094 
reaffirms, supplements, and updates Executive Order 12866 and further 
directs agencies to solicit and consider input from a wide range of 
affected and interested parties through a variety of means. This action 
falls within a category of regulatory actions that the Office of 
Management and Budget (OMB) exempted from Executive Order 12866 review.
    This rule has been reviewed under Executive Order 13175--
Consultation and Coordination with Indian Tribal Governments, which 
requires Federal

[[Page 25776]]

agencies to consider whether their rulemaking actions would have Tribal 
implications. The AMS has determined that this rule is unlikely to have 
substantial direct effects on one or more Indian Tribes, on the 
relationship between the Federal Government and Indian Tribes, or on 
the distribution of power and responsibilities between the Federal 
Government and Indian Tribes.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the Order now in effect, pear handlers are 
subject to assessments. Funds to administer the Order are derived from 
such assessments. It is intended that the assessment rate will be 
applicable to all assessable ``summer/fall'' pears for canning for the 
2023-2024 fiscal period, 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 8c(15)(A) of the 
Act (7 U.S.C. 608c(15)(A)), any handler subject to an order may file 
with the United States Department of Agriculture (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 for ``summer/fall'' 
varieties of pears for canning handled under the Order from $7.15 per 
ton, the rate that was established for the 2018-2019 fiscal period and 
subsequent fiscal periods, to $7.50 per ton for the 2023-2024 fiscal 
period and subsequent fiscal periods.
    The Order authorizes the Committee, with the approval of AMS, to 
formulate an annual budget of expenses and collect assessments from 
handlers to administer the program. The members of the Committee are 
familiar with the Committee's needs and with the costs of goods and 
services in their local area and can formulate an appropriate budget 
and assessment rate. The assessment rate is formulated and discussed in 
a public meeting, and all directly affected persons have an opportunity 
to participate and provide input.
    For the 2018-2019 fiscal period and subsequent fiscal periods, the 
Committee recommended, and AMS approved, an assessment rate of $7.15 
per ton of ``summer/fall'' varieties of pears for canning handled (83 
FR 62451). That rate continues in effect from fiscal period to fiscal 
period until modified, suspended, or terminated by AMS upon 
recommendation and information submitted by the Committee or other 
information available to AMS.
    The Committee met on June 8, 2023, and unanimously recommended 
2023-2024 fiscal period expenditures of $607,532 and an assessment rate 
of $7.50 per ton of ``summer/fall'' varieties of pears for canning 
handled for the 2023-2024 fiscal period and subsequent fiscal periods. 
In comparison, last year's budgeted expenditures were $594,130. The 
increased assessment rate of $7.50 per ton is $0.35 higher than the 
rate currently in effect. The Committee recommended increasing the 
assessment rate to better fund operations using assessment revenue and 
to reduce the reliance on reserve funds. The Committee has drawn down 
its financial reserve in recent years to cover Committee expenses and 
to reduce the reserve so as to not exceed approximately one fiscal 
period's budgeted expenses, in conformance with the Order (7 CFR 
927.42(a)). The Committee projects handler receipts of 78,000 tons of 
assessable ``summer/fall'' varieties of pears for canning for the 2023-
2024 fiscal period, which is 7,288 more than was projected for the 
2022-2023 fiscal period.
    The major expenditures recommended by the Committee for the 2023-
2024 fiscal period include $492,595 for marketing, promotions, and paid 
advertising; $73,337 for research; $25,000 for promotion management 
fees; and $16,600 for Committee administrative expenses. Budgeted 
expenditures for the 2022-2023 fiscal period were $483,300, $66,530, 
$25,000, and $21,396, respectively.
    Processed pears for canning are marketed throughout the calendar 
year. The expected 78,000-ton 2023 crop will generate $585,000 in 
assessment revenue at the increased assessment rate (78,000 tons of 
assessable ``summer/fall'' varieties of pears for canning multiplied by 
$7.50 per ton assessment rate). The remaining $22,532 needed to cover 
budgeted expenditures will come from reserve funds carried over from 
previous fiscal periods and $100 in interest income. The 2023-2024 
fiscal period assessment rate increase will be appropriate to ensure 
the Committee has sufficient revenue, along with its reserve, to fully 
fund its recommended 2023-2024 fiscal period budgeted expenditures and 
maintain a level of reserve funds that the Committee believes is 
appropriate.
    The Committee derived the recommended assessment rate by 
considering anticipated fiscal period expenses, an estimated 2023 crop 
volume of 78,000 tons of assessable ``summer/fall'' varieties of pears 
for canning, and the amount of funds available in the authorized 
reserve. Income derived from handler assessments ($585,000) and funds 
from the Committee's authorized reserve ($22,432) along with interest 
income ($100) will be adequate to cover budgeted expenses ($607,532).
    The assessment rate will continue in effect indefinitely unless 
modified, suspended, or terminated by AMS 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 AMS. 
Committee meetings are open to the public and interested persons may 
express their views at these meetings. AMS would evaluate Committee 
recommendations and other available information to determine whether 
modification of the assessment rate is needed. Further rulemaking would 
be undertaken as necessary. The Committee's 2023-2024 fiscal period 
budget, and those for subsequent fiscal periods, will be reviewed and, 
as appropriate, approved by AMS.

Final Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), AMS has considered the economic impact of 
this rule on small entities. Accordingly, AMS prepared this final 
regulatory flexibility analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
businesses 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.

[[Page 25777]]

    There are approximately 1,500 growers of pears for processing in 
the production area and approximately 34 handlers of processed pears 
subject to regulation under the Order. Small agricultural growers of 
processed pears are defined by the Small Business Administration (SBA) 
as those having annual receipts equal to or less than $3.5 million 
(NAICS code 111339, Other Noncitrus Fruit Farming), and small 
agricultural service firms are defined as those whose annual receipts 
are equal to or less than $34 million (NAICS code 115114, Postharvest 
Crop Activities) (13 CFR 121.201).
    According to the National Agricultural Statistics Service (NASS), 
the average annual grower price received for processed pears in 
Washington and Oregon was $361 per ton (2022). Total production of 
pears for canning for the 2022 season was reported by the Committee to 
be 74,131 tons. Using the average grower price from 2022, the most 
recent years for which there is NASS data, the total 2022 crop value of 
pears grown for processing in Oregon and Washington was $26,761,291 
(74,131 tons multiplied by $361 per ton). Dividing the crop value by 
the estimated number of growers (1,500) yields an estimated average 
receipt per grower of $17,841, which is well below the SBA threshold 
for small growers.
    Given the relatively small total farmgate value of pears for 
processing produced in the production area ($26,761,291), it is 
probable that most, if not all, of the pear processors regulated by the 
Order would be considered small entities. Dividing the $26,761,291 
estimated crop value by the number of handlers of processed pears (34) 
equals $787,097. AMS has not identified a direct third-party reference 
for estimating processed pear manufacturing margins. Without direct 
third-party information regarding the industry, determination of the 
number of large and small processors using the SBA's definition would 
be difficult. However, given the low average crop value of pears for 
processing ($787,097) it may be assumed that most, if not all, of the 
handlers of processed pears would have annual receipts below the SBA 
threshold for small agricultural service firms ($34 million). 
Therefore, using the above information and assuming a normal 
distribution, most of the growers and handlers of pears for processing 
may be classified as small entities.
    This rule increases the assessment rate collected from handlers for 
the 2023-2024 fiscal period and subsequent fiscal periods from $7.15 to 
$7.50 per ton of Oregon and Washington ``summer/fall'' pears for 
canning. The Committee unanimously recommended 2023-2024 fiscal period 
expenditures of $607,532 and an assessment rate of $7.50 per ton of 
``summer/fall'' pears for canning. The assessment rate of $7.50 is 
$0.35 higher than the previous rate. The Committee expects the industry 
to handle 78,000 tons of ``summer/fall'' varieties of pears for canning 
during the 2023-2024 fiscal period. Thus, the $7.50 per ton rate will 
provide approximately $585,000 in assessment income (78,000 tons 
multiplied by $7.50). The Committee also expects to use $22,532 from 
its financial reserve and $100 in interest income to cover remaining 
expenses. Income derived from handler assessments, along with reserve 
funds, will be adequate to meet budgeted expenditures for the 2023-2024 
fiscal period.
    The major expenditures recommended by the Committee for the 2023-
2024 fiscal period include $492,595 for marketing, promotions, and paid 
advertising; $73,337 for research; $25,000 for promotion management 
fees; and $16,600 for Committee administrative expenses. Budgeted 
expenditures for the 2022-2023 fiscal period were $483,300, $66,530, 
$25,000, and $21,396, respectively.
    In recent years, the Committee has utilized reserve funds to 
partially fund its budgeted expenditures. The Committee recommended 
increasing the assessment rate to better fund 2023-2024 fiscal period 
budgeted expenditures and refrain from excessively drawing down the 
funds held in its reserve. This action will maintain the Committee's 
reserve balance at a level that the Committee believes is appropriate 
and is compliant with the provisions of the Order.
    Prior to arriving at this budget and the increased assessment rate, 
the Committee discussed various alternatives, including maintaining the 
previous assessment rate of $7.15 per ton and increasing the assessment 
rate by different amounts. However, the Committee determined that the 
recommended assessment rate will be able to fund most of the budgeted 
expenses and avoid drawing down reserves at an unsustainable rate. The 
assessment rate of $7.50 per ton of Oregon and Washington ``summer/
fall'' pears for canning was derived by considering anticipated 
expenses, the projected volume of assessable pears for canning, the 
projected monetary balance held in reserve, and additional pertinent 
factors.
    A review of NASS information indicates that the average grower 
price for the 2022-2023 fiscal period was $361 per ton. Utilizing the 
assessment rate of $7.50 per ton, assessment revenue for the 2022-2023 
fiscal period, as a percentage of total grower revenue, would have been 
approximately 2.08 percent ($7.50 per ton divided by $361 multiplied by 
100).
    This action increases the assessment obligation imposed on 
handlers. Assessments are applied uniformly on all handlers, and some 
of the costs may be passed on to producers. However, these costs are 
expected to be offset by the benefits derived by the operation of the 
Order.
    The Committee's meetings are widely publicized throughout the 
production area. The processed pear industry and all interested persons 
are invited to attend the meetings and participate in Committee 
deliberations on all issues. Like all Committee meetings, the June 8, 
2023, meeting was a public meeting and all entities, both large and 
small, were able to express views on this issue. Finally, interested 
persons were invited to submit comments on this rule, including the 
regulatory and information collection impacts of this action on small 
businesses. One comment was received during the comment period. The 
comment was seeking clarity on pear varieties and weight 
specifications, which was not relevant to the subject matter of the 
rule. Accordingly, AMS made no changes to the rule based on the comment 
received.
    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 OMB and assigned OMB No. 0581-0189, Fruit Crops. 
No changes in those requirements will be necessary because of this 
rule. Should any changes become necessary, they would be submitted to 
OMB for approval.
    This rule will not impose any additional reporting or recordkeeping 
requirements on either small or large processed pear 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.
    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.

[[Page 25778]]

    AMS has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this final rule.
    A proposed rule concerning this action was published in the Federal 
Register on December 1, 2023 (88 FR 83870). Copies of the proposed rule 
were provided to all processed pear handlers. The proposal was also 
made available through the internet by USDA and the Office of the 
Federal Register. A 30-day comment period ending January 2, 2024, was 
provided for interested persons to respond to the proposal. One comment 
was received during the comment period. The comment was seeking clarity 
on pear varieties and weight specifications, which was not relevant to 
the subject matter of the proposed rule. Accordingly, AMS made no 
changes to the rule. A small business guide on complying with fruit, 
vegetable, and specialty crop marketing agreements and orders may be 
viewed at: https://www.ams.usda.gov/rules-regulations/moa/small-businesses. Any questions about the compliance guide should be sent to 
Richard Lower at the previously mentioned address in the FOR FURTHER 
INFORMATION CONTACT section.
    After consideration of all relevant material presented, including 
the information and recommendations submitted by the Committee and 
other available information, USDA has determined that this final rule 
is consistent with and will effectuate the purposes of the Act.

List of Subjects in 7 CFR Part 927

    Marketing agreements, Pears, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, the Agricultural 
Marketing Service amends 7 CFR part 927 as follows:

PART 927--PEARS GROWN IN OREGON AND WASHINGTON

0
1. The authority citation for 7 CFR part 927 continues to read as 
follows:

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


0
2. Amend Sec.  927.237 by revising the introductory text and paragraph 
(a) to read as follows:


Sec.  927.237  Processed pear assessment rate.

    On and after July 1, 2023, the following base rates of assessment 
for pears for processing are established for the Processed Pear 
Committee:
    (a) $7.50 per ton for any or all varieties or subvarieties of pears 
for canning classified as ``summer/fall'' excluding pears for other 
methods of processing;
* * * * *

Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2024-07809 Filed 4-11-24; 8:45 am]
BILLING CODE 3410-02-P