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Federal Register / Vol. 86, No. 231 / Monday, December 6, 2021 / Proposed Rules
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estimated to be $2,800,000 at the end of the 202122 fiscal year, which would be within the maximum permitted by 986.64 of the Order approximately three fiscal years expenses.
The proposed assessment rate would continue in effect indefinitely unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the Council or other available information.
Although these assessment rates would be in effect for an indefinite period, the Council 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 rates.
The dates and times of Council meetings are available from the Council or USDA.
Council meetings are open to the public and interested persons may express their views at these meetings. USDA
would evaluate Council recommendations and other available information to determine whether modification of the assessment rates is needed. Further rulemaking would be undertaken as necessary. The Councils 202122 budget and those for subsequent fiscal 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 are unique in that they are brought about through group action of essentially small entities acting on their own behalf.
There are approximately 4,500
growers of pecans in the production area and approximately 150 handlers subject to regulation under the Order.
Small agricultural growers 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 Statistics Service NASS, the 202021 crop value was $435.28
million. With a crop size of 305.36
million pounds, the season average
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grower price was $1.43. Dividing the $435.28 million crop value by the estimated number of pecan growers 4,500 yields an annual average receipts per grower estimate of $96,729. This is well below the SBA threshold for small growers.
Evidence presented at the pecan marketing order promulgation hearing indicates an average handler margin of $0.58 per pound. Adding this margin to the average grower price of $1.43 for inshell pecans yields an estimated annual handler price of $2.01 per pound. With a total 202021 utilization of 305.36
million pounds, the total estimated value of production at the handler level for the fiscal year was $613.77 million $2.01 per pound multiplied by 305.36
million pounds. Dividing this $613.77
million figure by the number of handlers 150 yields an average annual receipts per handler estimate of $4.09
million. This is well below the SBA
threshold for small agricultural service firms. Assuming a normal distribution, the majority of pecan growers and handlers may be classified as small entities.
This proposal would decrease the assessment rates collected from handlers for the 202122 and subsequent fiscal years from $0.03 to $0.01 per pound of improved varieties and from $0.02 to $0.00 per pound of native and seedling varieties and for substandard pecans handled. The Council recommended 202122 fiscal year expenditures of $9,002,508 and proposed assessment rates of $0.01 per pound for improved varieties and $0.00
per pound for native and seedling varieties and for substandard pecans.
The proposed assessment rates are $0.02
per pound for improved varieties and $0.01 per pound for native and seedling varieties lower than 201617 rates. The quantity of assessable pecans for the 202122 fiscal year is estimated at 315
million pounds. Thus, the $0.01 per pound for improved varieties and $0.00
per pound for native and seedling varieties and for substandard pecans rate should provide $3,150,000 in assessment income. Income derived from handler assessments, along with interest income, MAP funds, and funds from the Councils authorized reserve, would be adequate to cover budgeted expenses.
The major expenditures projected by the Council for the 202122 year include $2,510,000 for international relations, $2,180,000 for marketing, and $1,447,066 for general administration.
Budgeted expenses for these items in 202021 were $2,510,000, $6,285,000, and $1,447,066, respectively.

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The Council recommended decreasing the assessment rates to reflect a reduction in research and promotion expenditures as these activities would be caried out by the new USDA research and promotion program also funded by the industry. Consequently, the Council recommended a corresponding decrease in the assessment rates to reflect the decrease in research and promotion expenditures.
Prior to arriving at the estimated expenditures and assessment rates, the Council considered information from various sources, such as the Councils Governance Committee. Alternative expenditure levels were discussed by this Committee, based upon the relative value of various activities to the pecan industry, and the impact of the new research and promotion program. The Council determined that based on the information currently available, program activities would be appropriately funded, and no alternate expenditure levels were deemed appropriate.
Using NASS data, a weighted average grower price for the past 3 seasons 201819 through 202021 is $1.66 per pound. This provides a reasonable forecast of the average grower price for 202122 season. The proposed assessment rate of $0.01 per pound for improved varieties represents 0.6
percent of the $1.66 weighted average price six tenths of one percent; $0.01
divided by $1.66 100.
This action would decrease the assessment obligation imposed on handlers. Assessments are applied uniformly on all handlers, and some of the costs may be passed on to growers.
However, decreasing the assessment rates reduces the burden on handlers and may also reduce the burden on growers.
The September 22, 2021 Council meeting was widely publicized throughout the pecan industry.
Meetings are held virtually or in a hybrid style. Participants have a choice whether to attend in person or virtually and can participate in the Councils deliberations on all issues. Interested persons are invited to submit comments on this proposed rule, including the regulatory and informational 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. 05810291 Federal Marketing Order for Pecans. No changes in those requirements would be necessary because of this proposed rule.

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