Avocados Grown in South Florida; Order Amending Marketing,

[Federal Register: February 6, 2008 (Volume 73, Number 25)]

[Rules and Regulations]

[Page 6834-6838]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr06fe08-2]

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 915

[Docket No. AO-254-A10; AMS-FV-06-0220; FV06-915-2]

Avocados Grown in South Florida; Order Amending Marketing Order No. 915

AGENCY: Agricultural Marketing Service (AMS), USDA.

ACTION: Final rule.

SUMMARY: This final rule amends Marketing Order No. 915 (order), which regulates the handling of avocados grown in South Florida. The amendments are based on those proposed by the Florida Avocado Administrative Committee (committee), which is responsible for local administration of the order. The amendments will: Add authority for the committee to borrow funds; revise voting requirements for changing the assessment rate; allow for District 1 nominations to be conducted by mail; and, add authority for the committee to accept voluntary contributions. All of the proposals were favored by avocado growers in a mail referendum, held July 23 through August 6, 2007. The amendments are intended to improve the operation and functioning of the marketing order program.

DATES: This rule is effective February 7, 2008.

FOR FURTHER INFORMATION CONTACT: Marc McFetridge or Melissa

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Schmaedick, Marketing Specialists, Fruit and Vegetable Programs, Marketing Order Administration Branch (MOAB), AMS, USDA, 1400 Independence Ave., SW., Washington, DC 20250-0237; Telephone: (202) 720-2491, Fax: (202) 720-8938, or E-mail: Marc.McFetridge@usda.gov or Melissa.Schmaedick@usda.gov.

Small businesses may request information on this proceeding by contacting Jay Guerber, 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, E-mail: Jay.Guerber@usda.gov.

SUPPLEMENTARY INFORMATION: Prior documents in this proceeding: Notice of Hearing issued on July 18, 2006, and published in the July 24, 2006 issue of the Federal Register (71 FR 41740); Recommended Decision issued on March 23, 2007 and published in the March 30, 2007 issue of the Federal Register (72 FR 15056); and, a Secretary's Decision and Referendum Order issued on July 9, 2007, and published in the Federal Register on July 12, 2007 (72 FR 38027).

This action is governed by the provisions of sections 556 and 557 of title 5 of the United States Code and is therefore excluded from the requirements of Executive Order 12866.

Preliminary Statement

This final rule was formulated on the record of a public hearing held in Homestead, Florida on August 16, 2006. Notice of this hearing was issued on July 18, 2006, and published in the July 24, 2006 issue of the Federal Register (71 FR 41740). The hearing was held to consider the proposed amendment of Marketing Order No. 915, hereinafter collectively referred to as the ``order.''

The hearing was held pursuant to the provisions of the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the ``Act,'' and the applicable rules of practice and procedure governing the formulation of marketing agreements and marketing orders (7 CFR part 900).

The Notice of Hearing contained four proposals submitted by the Avocado Administrative Committee (committee), which is responsible for local administration of the order.

Upon the basis of evidence introduced at the hearing and the record thereof, the Administrator of AMS on March 23, 2007, filed with the Hearing Clerk, U.S. Department of Agriculture, a Recommended Decision and Opportunity to File Written Exceptions thereto by April 30, 2007. None were filed.

That document also announced AMS's intent to request approval of new information collection requirements to implement the program. Written exceptions on the proposed information collection requirements were due by May 29, 2007. None were filed.

A Secretary's Decision and Referendum Order was issued on July 9, 2007, directing that a referendum be conducted during the period of July 23, 2007 to August 6, 2007, among growers of avocados in South Florida to determine whether they favored the proposed amendments to the order. To become effective, the amendments had to be approved by at least two-thirds of those growers voting, or by voters representing at least two-thirds of the volume of avocados represented by voters voting in the referendum. Voters voting in the referendum favored all of the proposed amendments.

The amendments favored by voters and included in this order will: Add authority for the committee to borrow funds; revise voting requirements for changing the assessment rate; allow for District 1 nominations to be conducted by mail; and, add authority for the committee to accept voluntary contributions.

USDA also made such changes as were necessary to the order so that all of the order's provisions conform to the effectuated amendments.

The amended marketing agreement was subsequently mailed to all avocado handlers in the production area for their approval. The marketing agreement was not approved by handlers representing more than 50 percent of the volume of avocados handled by all handlers during the representative period of April 1, 2006, through March 31, 2007.

Small Business Consideration

Pursuant to the requirements set forth in the Regulatory Flexibility Act (RFA), 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 so that small businesses will not be unduly or disproportionately burdened. Marketing orders and amendments thereto are unique in that they are normally brought about through group action of essentially small entities for their own benefit.

Small agricultural growers have been 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, which include handlers regulated under the order, are defined as those with annual receipts of less than $6,500,000.

Avocado Industry Background and Overview

The record indicates that there are an estimated 352 growers of avocados in the production area and 32 handlers subject to regulation under the order.

According to the National Agricultural Statistics Service (NASS) and committee data, the average price for Florida avocados during the 2005-06 season was around $46.75 per 55-pound bushel container, and total shipments were near 470,000 55-pound bushel equivalent. Using this average price and shipment information, the majority of avocado handlers could be considered small businesses under the SBA definition. In addition, based on avocado production, grower prices, and the total number of Florida avocado growers, the average annual grower revenue is less than $750,000. Thus, the majority of Florida avocado growers may also be classified as small entities.

The NASS reported that in 2005, total Florida avocado bearing acres were 5,300 and the average yield per acre was 2.26 tons. The total Florida production reported in 2005 was 12,000 tons, with growers receiving an average (farm gate) price of $940/ton. The estimated total value of 2005 Florida avocado production was $11.28 million.

Over the past 30 years, the U.S. avocado industry has seen many changes. According to NASS, the total U.S. production acres for avocados have decreased by 13 percent, from 78,000 acres in 1982 to 67,600 acres in 2005. Prices have trended upward from 1959 to 2005, although there has been significant variability in prices from year to year. The average grower price for the U.S. in 1959 was $109 per ton and in 2005 the average grower price was $1,280 per ton. The total value of U.S. avocado production has increased dramatically since 1959, reaching a peak of $394 million in 2003. The per capital consumption of fresh avocados has risen significantly since 1970. Between 1970 and 2004, per capital consumption increased almost five-fold to 2.9 pounds per person in 2004. According to the hearing record, one of the factors that may be contributing to this increase is the new year-round availability of avocados due to the volume of imported avocados in addition to domestically produced avocados.

Comparatively, Florida's avocado industry has seen similar trends.

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According to NASS, the production acreage has decreased by 53 percent over the last three decades. According to record evidence, the rapid decrease in Florida production acreage compared to that of U.S. acreage can be directly associated with crop damage resulting from hurricanes. Florida's production trended upward to 34,700 tons in the early 1980's and has shown great variability since. Production in 2005 was at a 10 year low of 12,000 tons. Prices for Florida avocados have also trended upward from 1959 to 2005. The average grower price for Florida avocados in 1959 was $88 per ton and in 2005 the average grower price was $940 per ton, which was the highest average grower price over the time span. The total value of Florida avocado production was $620,000 in 1959. After Hurricane Andrew, which affected the value of production in 1992 and 1993, the value of Florida's production has ranged from a high of $17.2 million in 2003 to a low of $11.3 million in 2005.

Material Issues

This action amends the order to: Add authority for the committee to borrow funds; revise voting requirements for changing the assessment rate; allow for District 1 nominations to be conducted by mail; and, add authority for the committee to accept voluntary contributions.

These amendments will streamline program organization, but are not expected to result in a significant change in industry production, handling or distribution activities. In discussing the impacts of the amendments on growers and handlers, record evidence indicates that the changes are expected to be positive because the administration of the programs would be more efficient, and therefore more effective, in executing committee duties and responsibilities. There would be no significant cost impact on either small or large growers or handlers.

Interested persons were invited to present evidence at the hearing on the probable regulatory and informational impact of the proposed amendments to the order on small entities. The record evidence shows that the amendments are designed to increase efficiency in the functioning of the order.

USDA has not identified any relevant Federal rules that duplicate, overlap or conflict with this proposed rule. These amendments are designed to enhance the administration and functioning of the order to the benefit of the Florida avocado industry.

Paperwork Reduction Act

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the information collection continued in this action was submitted to the Office of Management and Budget (OMB) and has been approved under OMB No. 0581-0243, Avocados Grown in South Florida. The burden and associated forms in this collection were also included in the renewal submission of OMB No. 0581-0189, Generic OMB Fruit Crops, currently at OMB for review. Upon approval of OMB No. 0581-0189, a discontinuation notice will be submitted to OMB to retire OMB No. 0581- 0243.

The amendment authorizing mail nominations for District 1 requires a nomination form and ballot to conduct mail nominations. It is estimated that there are 384 growers and handlers who will be entitled to vote by mail ballot once every two years. The estimated burden to each grower and handler is 0.083 hour per response.

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.

Civil Justice Reform

The amendments to Marketing Order No. 915 proposed herein have been reviewed under Executive Order 12988, Civil Justice Reform. They are not intended to have retroactive effect. If adopted, the proposed amendments would not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with this proposal.

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. A 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 Sates 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 no later than 20 days after the date of the entry of the ruling.

Order Amending the Order Regulating the Handling of Avocados Grown in Florida

Findings and Determinations

The findings and determinations hereinafter set forth are supplementary and in addition to the findings and determinations previously made in connection with the issuance of the order; and all of said previous findings and determinations are hereby ratified and affirmed, except insofar as such findings and determinations may be in conflict with the findings and determinations set forth herein.

(a) Findings and Determinations Upon the Basis of the Hearing Record.

Pursuant to the provisions of the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), and the applicable rules of practice and procedure effective thereunder (7 CFR part 900), a public hearing was held upon the proposed amendments to the Marketing Order No. 915 (7 CFR part 915), regulating the handling of avocados grown in Florida.

Upon the basis of the evidence introduced at such hearing and the record thereof, it is found that:

(1) The marketing order, as amended, and as hereby further amended, and all of the terms and conditions thereof, will tend to effectuate the declared policy of the Act;

(2) The marketing order, as amended, and as hereby further amended, regulates the handling of avocados grown in the production area in the same manner as, and is applicable only to persons in the respective classes of commercial and industrial activity specified in the marketing order upon which hearings have been held;

(3) The marketing order, as amended, and as hereby further amended, is limited in application to the smallest regional production area which is practicable, consistent with carrying out the declared policy of the Act, and the issuance of several orders applicable to subdivision of the production area would not effectively carry out the declared policy of the Act;

(4) The marketing order, as amended, and as hereby further amended, prescribes, insofar as practicable, such different terms applicable to different parts of the production area as are necessary to give due recognition to the differences in the production and marketing of avocados grown in the production area; and,

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(5) All handling of avocados grown in the production area is in the current of interstate or foreign commerce or directly burdens, obstructs, or affects such commerce.

(b) Additional findings.

It is necessary and in the public interest to make these amendments to the order effective not later than one day after publication in the Federal Register. A later effective date would unnecessarily delay implementation of the amendments for the new crop year. These amendments should be in place as soon as possible as the new crop year begins April 1. Therefore, making the effective date one day after publication in the Federal Register will allow the amendments, which are expected to be beneficial to the industry, to be implemented as soon as possible.

In view of the foregoing, it is hereby found and determined that good cause exists for making these amendments effective one day after publication in the Federal Register, and that it would be contrary to the public interest to delay the effective date for 30 days after publication in the Federal Register (Sec. 553(d), Administrative Procedure Act; 5 U.S.C. 551-559).

(c) Determinations. It is hereby determined that:

(1) Handlers (excluding cooperative associations of growers who are not engaged in processing, distributing, or shipping avocados covered by the order as hereby amended) who, during the period April 1, 2006, through March 31, 2007, handled 50 percent or more of the volume of such avocados covered by said order, as hereby amended, have not signed an amended marketing agreement;

(2) The issuance of this amendatory order, further amending the aforesaid order, is favored or approved by at least two-thirds of the growers who participated in a referendum on the question of approval and who, during the period of April 1, 2006, through March 31, 2007 (which has been deemed to be a representative period), have been engaged within the production area in the production of such avocados, such growers having also produced for market at least two-thirds of the volume of such commodity represented in the referendum; and

(3) In the absence of a signed marketing agreement, the issuance of this amendatory order is the only practical means pursuant to the declared policy of the Act of advancing the interests of growers of avocados in the production area.

Order Relative to Handling of Avocados Grown in South Florida

It is therefore ordered, That on and after the effective date hereof, all handling of avocados grown in Florida, shall be in conformity to, and in compliance with, the terms and conditions of the said order as hereby amended as follows:

The provisions of the proposed marketing agreement and order further amending the order contained in the Secretary's Decision issued by the Administrator on July 9, 2007, and published in the Federal Register on July 12, 2007, shall be and are the terms and provision of this order amending the order and are set forth in full herein.

List of Subjects in 7 CFR Part 915

Avocados, Marketing agreements, Reporting and recordkeeping requirements.

PART 915--AVOCADOS GROWN IN SOUTH FLORIDA

0 For the reasons set forth in the preamble, Title 7 of Chapter XI of the Code of Federal Regulations is amended by amending part 915 as follows:

0 1. The authority citation for 7 CFR part 915 continues to read as follows:

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

0 2. In Sec. 915.11, paragraphs (a) and (b) are revised to read as follows:

Sec. 915.11 District.

* * * * *

(a) District 1 shall include Miami-Dade County.

(b) District 2 shall include all of the production area except Miami-Dade County. 0 3. In Sec. 915.22, paragraph (b)(1) is revised to read as follows:

Sec. 915.22 Nomination.

* * * * *

(b) Successor members. (1) The committee shall hold or cause to be held a meeting or meetings of growers and handlers in each district to designate nominees for successor members and alternate members of the committee; or the committee may conduct nominations in Districts 1 and 2 by mail in a manner recommended by the committee and approved by the Secretary. Such nominations shall be submitted to the Secretary by the committee not later than March 1 of each year. The committee shall prescribe procedural rules, not inconsistent with the provisions of this section, for the conduct of nomination. * * * * *

0 4. In Sec. 915.30, paragraph (c) is revised to read as follows:

Sec. 915.30 Procedure.

* * * * *

(c) For any recommendation of the committee for an assessment rate change, a quorum of seven committee members and a two-thirds majority vote of approval of those in attendance is required.

0 5. In Sec. 915.41, paragraph (b) is revised to read as follows:

Sec. 915.41 Assessments.

* * * * *

(b) The Secretary shall fix the rate of assessment per 55-pounds of fruit or equivalent in any container or in bulk, to be paid by each such handler. At any time during or after a fiscal year, the Secretary may increase the rate of assessment, in order to secure sufficient funds to cover any later finding by the Secretary relative to the expense which may be incurred. Such increase shall be applied to all fruit handled during the applicable fiscal year. In order to provide funds for the administration of the provisions of this part, the committee may accept the payment of assessments in advance, or borrow money on an emergency short-term basis. The authority of the committee to borrow money is subject to approval of the Secretary and may be used only to meet financial obligations as the obligations occur or to allow the committee to adjust its reserve funds to meet such obligations.

0 6. Add a new Sec. 915.43 to read as follows:

Sec. 915.43 Contributions.

The committee may accept voluntary contributions. Such contributions shall be free from any encumbrances by the donor and the committee shall retain complete control of their use.

0 7. Revise Sec. 915.45 to read as follows:

Sec. 915.45 Production research, marketing research and development.

The committee may, with the approval of the Secretary, establish or provide for the establishment of production research, marketing research and development projects designed to assist, improve or promote the marketing, distribution, and consumption or efficient production of avocados. Such products may provide for any form of marketing promotion, including paid advertising. The expenses of such projects shall be paid from funds collected pursuant to the applicable provisions of Sec. 915.41, or from such other funds as approved by the USDA.

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Dated: February 1, 2008. Lloyd C. Day, Administrator, Agricultural Marketing Service.

[FR Doc. 08-536 Filed 2-4-08; 9:46 am]

BILLING CODE 3410-02-P