Avocados Grown in South Florida; Increased Assessment Rate

CourtAgricultural Marketing Service
Citation86 FR 69159
Publication Date07 December 2021
Record Number2021-26494
Federal Register, Volume 86 Issue 232 (Tuesday, December 7, 2021)
[Federal Register Volume 86, Number 232 (Tuesday, December 7, 2021)]
                [Rules and Regulations]
                [Pages 69159-69161]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2021-26494]
                Rules and Regulations
                 Federal Register
                This section of the FEDERAL REGISTER contains regulatory documents
                having general applicability and legal effect, most of which are keyed
                to and codified in the Code of Federal Regulations, which is published
                under 50 titles pursuant to 44 U.S.C. 1510.
                The Code of Federal Regulations is sold by the Superintendent of Documents.
                Federal Register / Vol. 86, No. 232 / Tuesday, December 7, 2021 /
                Rules and Regulations
                [[Page 69159]]
                Agricultural Marketing Service
                7 CFR Part 915
                [Doc. No. AMS-SC-21-0040; SC21-915-1 FR]
                Avocados Grown in South Florida; Increased Assessment Rate
                AGENCY: Agricultural Marketing Service (AMS), Department of Agriculture
                ACTION: Final rule.
                SUMMARY: This rule implements a recommendation from the Avocado
                Administrative Committee to increase the assessment rate established
                for the 2021-22 and subsequent fiscal years. The assessment rate will
                remain in effect indefinitely unless modified, suspended, or
                DATES: Effective January 6, 2022.
                FOR FURTHER INFORMATION CONTACT: Abigail Campos, Marketing Specialist,
                or Christian D. Nissen, Regional Director, Southeast Region Branch,
                Market Development Division, Specialty Crops Program, AMS, USDA;
                Telephone: (863) 324-3375, Fax: (863) 291-8614, 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) 720-2491, or Email:
                [email protected].
                SUPPLEMENTARY INFORMATION: This action, pursuant to 5 U.S.C. 553,
                amends regulations issued to carry out a marketing order as defined in
                7 CFR 900.2(j). This rule is issued under Marketing Agreement No. 121
                and Marketing Order No. 915, both as amended (7 CFR part 915),
                regulating the handling of avocados grown in south Florida. Part 915,
                (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 Avocado Administrative
                Committee (Committee) locally administers the Order and is comprised of
                growers and handlers operating within the area of production, and a
                public member.
                 The Department of Agriculture (USDA) is issuing this rule in
                conformance with Executive Orders 12866 and 13563. 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. 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 agencies to consider whether their rulemaking actions would
                have tribal implications. AMS has determined 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, Florida avocado handlers
                are subject to assessments. Funds to administer the Order are derived
                from such assessments. It is intended that the assessment rate be
                applicable to all assessable Florida avocados for the 2021-22 fiscal
                year, and continue unless 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 2021-22 and subsequent fiscal years, from $0.35 to
                $0.45 per 55-pound bushel container of avocados.
                 The Order authorizes the Committee, with the approval of USDA, to
                formulate an annual budget of expenses and collect assessments from
                handlers to administer the program. Nine of the ten members of the
                Committee are producers and handlers of Florida avocados. They are
                familiar with the Committee's needs and with the costs for goods and
                services in their local area and are able to 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 2016-17 and subsequent fiscal years, the Committee
                recommended, and USDA approved, an assessment rate that would continue
                in effect from fiscal year to fiscal year 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 April 14, 2021, and recommended 2021-22
                expenditures of $348,484 and an assessment rate of $0.45 per 55-pound
                bushel container of avocados. In comparison, the previous fiscal year's
                budgeted expenditures were $280,484. The assessment rate of $0.45 is
                $0.10 higher than the rate currently in effect. During the last few
                fiscal years, the Committee has not funded research projects. However,
                the laurel wilt disease continues to challenge the avocado industry.
                The Committee
                [[Page 69160]]
                discussed the need for research funding and added $80,000 to its
                proposed budget for this research and recommended increasing the
                assessment rate to cover the additional expense. At the current
                assessment rate, assessment income would equal only $280,000, an amount
                insufficient to cover the Committee's anticipated expenditures of
                $348,484. By increasing the assessment rate by $0.10, assessment income
                will be $360,000. This amount should provide sufficient funds to meet
                2021-2022 anticipated expenses.
                 Major expenditures recommended by the Committee for the 2021-22
                fiscal year include $116,164 for salaries, $80,000 for research, and
                $53,350 for employee benefits. Budgeted expenses for these items in
                2020-21 were $116,164, $0, and $53,350, respectively.
                 The assessment rate recommended by the Committee was derived by
                reviewing anticipated expenses, expected shipments of Florida avocados,
                and fiscal the level of funds in reserve. Avocado shipments for the
                year are estimated at 800,000 55-pound bushel containers, which, as
                mentioned before, should provide $360,000 in assessment income (80,000
                containers x $0.45). Income derived from handler assessments at the new
                rate, along with interest income, should be adequate to cover budgeted
                expenses. Funds in the reserve (currently about $250,000) will be kept
                within the maximum permitted by the Order (approximately three fiscal
                years' expenses as authorized in Sec. 915.42).
                 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 year 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 would
                be undertaken as necessary. The Committee's 2021-22 budget and those
                for subsequent fiscal years will 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
                 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.
                 There are approximately 325 producers of Florida avocados in the
                production area and 25 handlers subject to regulation under the Order.
                Small agricultural producers are defined by the Small Business
                Administration (SBA) as those having annual receipts less than
                $1,000,000, and small agricultural service firms are defined as those
                whose annual receipts are less than $30,000,000 (13 CFR 121.201).
                 According to the National Agricultural Statistical Service (NASS),
                the average grower price paid for Florida avocados during the 2020-21
                fiscal year was $21.97 per 55-pound bushel. Utilized production was
                equivalent to 624,364 55-pound bushels for a total value of
                approximately $13,718,830. Dividing the crop value by the estimated
                number of producers (325) yields an estimated average receipt per
                producer of $42,212, so the majority of producers will have annual
                receipts of less than $1,000,000.
                 USDA Market News reported April 2021 terminal market prices for
                green skinned avocados were about $36.43 per 24-pound container. Using
                this price and the total utilization, the total 2020-21 handler crop
                value is estimated at $52.1 million. Dividing this figure by the number
                of handlers (25) yields an estimated average annual handler receipts of
                over $2 million, which is below the SBA threshold for small
                agricultural service firms. Thus, the majority of Florida avocado
                producers and handlers are classified as small entities.
                 This rule increases the assessment rate established for the
                Committee and collected from handlers for the 2021-22 and subsequent
                fiscal years from $0.35 to $0.45 per 55-pound bushel container of
                avocados. The Committee recommended 2021-22 expenditures of $348,484
                and an assessment rate of $0.45 per 55-pound bushel container. The
                assessment rate of $0.45 is $0.10 higher than the previous rate. The
                quantity of assessable avocados for the 2021-22 season is estimated at
                800,000 55-pound bushel containers. Thus, the $0.45 rate will provide
                $360,000 in assessment income and be adequate to meet this year's
                 Major expenditures recommended by the Committee for the 2021-22
                fiscal year include $116,164 for salaries, $80,000 for research, and
                $53,350 for employee benefits. Budgeted expenses for these items in
                2020-21 were $116,164, $0, and $53,350, respectively.
                 In recent years, the Committee did not fund any research. However,
                Committee members believe further research is needed to address laurel
                wilt disease and voted to commit $80,000 to research in the coming
                fiscal year. At the current assessment rate and with the 2021-22 crop
                estimated to be 800,000 55-pound bushel containers, assessment income
                would equal only $280,000, an amount insufficient to cover the
                Committee's anticipated expenditures of $348,484. By increasing the
                assessment rate by $0.10, assessment income would be approximately
                $360,000. This amount will provide sufficient funds to meet 2021-22
                anticipated expenses. Consequently, the Committee recommended
                increasing the assessment rate.
                 Prior to arriving at this budget and assessment rate, the Committee
                considered information from various sources, including its Research
                Subcommittee. The Committee discussed alternative expenditure levels
                based upon the relative value of various activities to the south
                Florida avocado industry. The Committee ultimately determined that
                2021-22 expenditures of $348,484, including the additional funds for
                research, were appropriate, and the recommended assessment rate, along
                with interest income, should generate sufficient revenue to meet its
                 A review of historical information and preliminary information
                pertaining to the upcoming season indicates that the grower price for
                the 2021-22 season should be around $20-25 per 55-pound bushel
                container of avocados. Therefore, the estimated assessment revenue for
                the 2021-22 fiscal year as a percentage of total grower revenue would
                be between 1.8 and 2.25 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. Additionally, these
                costs will be offset
                [[Page 69161]]
                by the benefits derived by the operation of the Order.
                 The Committee's meeting was widely publicized throughout the
                Florida avocado industry and all interested persons were invited to
                attend the meeting and participate in Committee deliberations on all
                issues. Like all Committee meetings, the April 14, 2021, 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 OMB and assigned OMB No. 0581-0189 Fruit Crops.
                No changes in those requirements are necessary as a result of this
                action. 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 avocado 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. As noted in the
                initial regulatory flexibility analysis, USDA has not identified any
                relevant Federal rules that duplicate, overlap, or conflict with this
                 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 August 24, 2021 (86 FR 47248). Copies of the proposed rule
                were also mailed or sent via email to all Florida avocado handlers. The
                proposal was made available through the internet by USDA and the Office
                of the Federal Register. A 30-day comment period ending September 23,
                2021, was provided for interested persons to respond to the proposal.
                 During the comment period, one comment was received in response to
                the proposal. The comment received did not address the merits of this
                rule. Accordingly, no changes will be made to the rule as proposed,
                based on the comment received.
                 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
                 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 will tend to
                effectuate the declared policy of the Act.
                List of Subjects in 7 CFR Part 915
                 Avocados, Marketing agreements, Reporting and recordkeeping
                 For the reasons set forth in the preamble, 7 CFR part 915 is
                amended as follows:
                1. The authority citation for 7 CFR part 915 continues to read as
                 Authority: 7 U.S.C. 601-674.
                2. Section 915.235 is revised to read as follows:
                Sec. 915.235 Assessment rate.
                 On and after April 1, 2021, an assessment rate of $0.45 per 55-
                pound container or equivalent is established for avocados grown in
                South Florida.
                Erin Morris,
                Associate Administrator, Agricultural Marketing Service.
                [FR Doc. 2021-26494 Filed 12-6-21; 8:45 am]
                BILLING CODE 3410-02-P

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