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Federal Register / Vol. 86, No. 42 / Friday, March 5, 2021 / Rules and Regulations
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production 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. 601612, 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 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 21 handlers subject to the regulation under the Order, and approximately 1,501
producers of pistachios in the production area. Small agricultural producers are defined by the Small Business Administration SBA as those having annual receipts of less than $1,000,000, and small agricultural service firms have been defined as those whose annual receipts are less than $30,000,000 13 CFR 121.201.
According to the National Agricultural Statistics Service NASS, the national average producer price for pistachios for the 2018 production year was $2.65 per pound. Committee data indicates 201819 pistachio total production was 746,858,150 pounds.
The total 2018 value of the pistachio crop was $1,979,174,098 746,858,150
pounds times $2.65 per pound.
Dividing the crop value by the estimated number of producers 1,501 yields an estimated average receipt per producer of $1,318,570 which is above the SBA
threshold for small producers.
According to USDA Market News data, the reported terminal price for 2018 for pistachios ranged between $155.00 to $165.00 per 25-pound carton.
The average of this range is $160.00
$155.00 plus $165.00 divided by 2.
Dividing the average value by the 25pound carton yields an estimated average price per pound of $6.40
$160.00 average value for 25-pound carton divided by 25. Multiplying the 201819 pistachio total production of 746,858,150 pounds by the estimated average price per pound of $6.40 equals $4,779,892,160.
Dividing this figure by 21 regulated handlers yields estimated average annual handler receipts of $227,613,912, which is also above the
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SBA threshold for small agricultural service firms. Therefore, using the above data, and assuming a normal distribution, the majority of producers and handlers of pistachios may be classified as large entities.
The assessment rate of $0.00015 that the committee recommended complies with section 983.71b of the Order which states that any assessment rate must not exceed one-half of one percent of the average price received by producers in the preceding production year. The average price received by producers in the preceding production year was $2.65 per pound of pistachios.
Thus, $2.65 times 0.5 percent equals $0.01325, which is greater than the assessment rate increase of $0.00015.
This rule increases the assessment rate collected from handlers for the 202021 and subsequent production years from $0.00010 to $0.00015 per pound assessed weight pistachios. The Committee unanimously recommended 202021 expenditures of $679,800 and an assessment rate of $0.00015 per pound assessed weight pistachios. The assessment rate of $0.00015 per pound assessed weight pistachios is $0.00005
higher than the rate currently in effect.
The volume of assessable pistachios for the 202021 production year is estimated at 950 million pounds. Thus, the $0.00015 per pound assessed weight pistachios should provide $142,500 in assessment income 950,000,000 pounds assessed weight pistachios multiplied by $0.00015 assessment rate. Income derived from handler assessments, along with CPRB management income and funds from the Committees authorized reserve, will be adequate to cover budgeted expenses for the 202021
production year.
The major expenditures recommended by the Committee for the 202021 production year include $74,800 for various administrative expenses, $10,000 for compliance expenses, $346,500 for salaries and related employee expenses, $125,000 for research, and $80,000 for a contingency fund. Budgeted expenses for these items in the 201920 production year were $48,900, $10,000, $336,500, $125,000, and $80,000 respectively.
In recent years, the Committee has utilized reserve funds to partially fund its budgeted expenditures. The Committee recommended increasing the assessment rate to provide income to partially cover the Committees budgeted expenses for the 202021
production year while maintaining its financial reserve within the limit required by the Order.
Prior to arriving at this budget and assessment rate, the Committee
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discussed various alternatives, including maintaining the current assessment rate of $0.00010 per pound assessed weight pistachios, and increasing the assessment rate by a different amount. However, the Committee determined that the recommended assessment rate will fund budgeted expenses and avoid drawing down reserves at an unsustainable rate.
This rule 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 Committees meeting was widely publicized throughout the pistachio industry. All interested persons were invited to attend the meeting and encouraged to participate in Committee deliberations on all issues. Like all Committee meetings, the July 14, 2020, 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.
In accordance with the Paperwork Reduction Act of 1995 44 U.S.C.
chapter 35, the Orders information collection requirements have been previously approved by the OMB and assigned OMB No. 05810215, Pistachios Grown in California, Arizona, and New Mexico. No changes in those requirements will be necessary as a result 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 pistachio 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. 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 October 5, 2020 85 FR
62615. The Committee notified all pistachio handlers of the proposed
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