Federal Register - December 6, 2021
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Source: Federal Register
khammond on DSKJM1Z7X2PROD with PROPOSALS
Federal Register / Vol. 86, No. 231 / Monday, December 6, 2021 / Proposed Rules persons have an opportunity to participate and provide input.
For 202021 and subsequent production years, the Committee recommended, and USDA approved, an assessment rate of $0.00015 per pound of pistachios. This assessment rate would continue to be in effect from production year to production 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 July 20, 2021, and unanimously recommended expenditures of $828,000 and an assessment rate of $0.0007 per pound of pistachios handled for 202122 and subsequent production years. In comparison, the prior years budgeted expenditures were $679,800. The proposed assessment rate of $0.0007 is $0.00055 higher than the rate currently in effect. The Committee recommended increasing the assessment rate to pay for additional Committee staff in preparation for the retirement of key staff positions manager and administrative assistant and to provide adequate income to cover all of the Committees budgeted expenses for the 202122 production year.
Major expenditures recommended by the Committee for the 202122
production year include $462,500 for personnel expenses, $125,000 for research, $100,000 for a contingency fund, $82,700 for administration, and $57,800 for office expenses. Budgeted expenses for these items in the 202021
production year were $336,500, $125,000, $80,000, $80,700, and $57,600, respectively.
The Committee derived the recommended assessment rate by considering anticipated expenses, an estimated crop of 975,000 million pounds of pistachios, and the amount of funds available in the authorized reserve. Income derived from handler assessments, calculated at $682,500
975,000,000 pounds multiplied by $0.0007 assessment rate, along with other income $220,200, would be adequate to cover budgeted expenses of $828,000. Excess assessment revenue would be added to the Committees reserve fund. Funds in the Committees financial reserve are expected to be approximately $385,157 at the end of the 202122 production year, which would be within the Orders requirement of no more than approximately two production years budgeted expenses.
The assessment rate proposed in this rulemaking would continue in effect indefinitely unless modified,
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suspended, or terminated by USDA
upon recommendation and information submitted by the Committee or other available information.
Although this assessment rate would be in effect for an indefinite period, the Committee will continue to meet prior to or during each production year to recommend a budget of expenses and consider recommendations for modification of the assessment rate.
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 Committees 202223 production year budget, and those for subsequent production years, would be reviewed and, as appropriate, approved by USDA.
Initial 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 proposed rule on small entities.
Accordingly, AMS has prepared this initial 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 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 19 handlers subject to regulation under the Order, and approximately 1,624 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 201920 production year was $2.75 per pound. Committee data indicates 201920 production year total pistachio production was 582,111,271 pounds. The total 201920
production year value of the pistachio crop was calculated as $1,600,805,995
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582,111,271 pounds times $2.75 per pound equals $1,600,805,995. Dividing the crop value by the estimated number of producers 1,624 yields an estimated average receipt per producer of $985,718, which is just below the SBA
threshold for small producers.
According to USDA Market News data, the reported terminal price for 2021 for pistachios ranged between $150.00 to $250.00 per 25-pound carton.
The average of this range is $200.00
$150.00 plus $250.00 divided by 2
equals $200.00. Dividing the average value by 25-pounds per carton yields an estimated average price per pound of $8.00 $200.00 average value for 25pound carton divided by 25.
Multiplying the 201920 production year total pistachio production of 582,111,271 pounds by the estimated average price per pound of $8.00 equals $4,656,890,168. Dividing this figure by 19 regulated handlers yields estimated average annual handler receipts of $245,099,483, which is well above the SBA threshold for small agriculture service firms.
Therefore, using the above data, and assuming a normal distribution, the majority of pistachio producers may be classified as small entities and the majority of handlers of pistachios may be classified as large entities.
The proposed assessment rate of $0.0007 that the Committee approved complies with section 983.71b of the Order, which states that any proposed assessment rate must not exceed onehalf 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 $2.75 per pound of pistachios. Thus, $2.75 times 0.5
percent equals $0.01375, which is greater than the proposed assessment rate of $0.0007.
This proposal would increase the assessment rate collected from handlers for 202122 and subsequent production years from $0.00015 to $0.0007 per pound of pistachios. The Committee unanimously recommended 202122
production year expenditures of $828,000 and an assessment rate of $0.0007 per pound of pistachios handled. The proposed assessment rate of $0.0007 per pound of pistachios is $0.00055 higher than the current rate.
The volume of assessable pistachios for the 202122 production year is estimated to be 975 million pounds.
Thus, the $0.0007 per pound assessment rate should provide $682,500 in assessment income 975,000,000
multiplied by $0.0007. Income derived from handler assessments, along with an estimated $220,000 of other income,
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