FR 2025-00193

The proposed rule, issued by the Agricultural Marketing Service of the United States Department of Agriculture (USDA), seeks to increase the assessment rate for oranges and grapefruit grown in the Lower Rio Grande Valley of Texas. Beginning from the 2024-2025 fiscal year, the assessment per 7/10 bushel carton will rise from $0.03 to $0.04. This proposal aims to cover necessary expenses and replenish the financial reserves of the Texas Valley Citrus Committee, which consists of local producers and handlers responsible for administering the marketing order. A 30-day public comment period is open, allowing individuals to provide feedback on the proposed change.

Significant Issues and Concerns

One significant issue with the proposal is the lack of detailed information regarding the allocation of the additional funds generated by the increased assessment. While the document mentions that the funds will be used to cover expenses and restore reserves, it does not provide a granular breakdown of how exactly these funds will be deployed. For stakeholders, particularly those directly affected, understanding the specific application of such funds is crucial for assessing the proposal's necessity and impact.

Further, the economic impact on small businesses is discussed in terms of averages, which may not accurately represent the varied financial situations across different entities. This approach could overlook the distinctive challenges faced by smaller or more vulnerable stakeholders who might be disproportionately affected by the assessment increase.

Additionally, the document does not extensively explore alternative solutions or take into account the broader spectrum of recommendations from industry stakeholders outside the Committee. Considering different perspectives and solutions could potentially lead to a more balanced and informed decision-making process.

Impact on the Public and Specific Stakeholders

Broadly speaking, the document's implications extend to consumers and businesses in the citrus market. An increase in operational costs, if passed along the supply chain, could potentially affect retail prices for oranges and grapefruit, impacting consumer purchases.

Specific stakeholders such as Texas citrus growers and handlers will be directly impacted. For these industry participants, the increased assessment rate could mean higher operating costs. However, if the funds generated help stabilize and improve the marketing order's operations, this could ultimately benefit the industry by supporting sustained production and marketing efforts.

Small businesses, in particular, may face challenges due to increased financial obligations. Despite the proposed change being justified by the Committee's consideration of expenses and financial reserves, the lack of alternative approaches and flexible regulatory options could disproportionately burden smaller entities.

Conclusion

In summary, while the proposed increase in the assessment rate aims to address financial and operational needs identified by the Texas Valley Citrus Committee, there are concerns regarding its detailed justification and comprehensive impact analysis. Stakeholders, especially those on the smaller end of the industry spectrum, might face challenges, highlighting the importance of thorough public feedback during the comment period. The process moving forward should ideally incorporate diverse industry input to achieve a balanced and equitable implementation of this proposed rule.

The document proposes an increase in the assessment rate for growers of oranges and grapefruit in the Lower Rio Grande Valley, Texas, from $0.03 to $0.04 per 7/10-bushel carton. The new rate is intended to cover the expenditures and replenish the depleted reserves of the Texas Valley Citrus Committee. The previous rate of $0.03 was deemed insufficient as it only generated $120,000 based on the estimated shipment of 4,000,000 7/10-bushel cartons, falling short of the budget need of $134,970. By increasing the assessment rate to $0.04, the anticipated revenue will rise to $160,000, thus meeting the financial obligations and aiding in reserve replenishment.

Use of Funds

The proposed assessment increase addresses specific financial allocations and expenditures. The Committee outlined major financial allocations including $66,220 for management expenses, $50,000 for compliance, and $18,750 for general administrative expenses for the fiscal year 2024-2025. These allocations remained consistent with the prior year, underscoring their intention to balance the budget rather than expand spending. It is clear, however, that the benefits of the increased funds revolve primarily around fulfilling the committee’s budgetary needs and rebuilding their reserves rather than expanding or improving upon their existing programs or services.

Financial Impact and Equity Concerns

The document highlights concerns about distributing financial impacts evenly across diverse entities within the industry. While the Small Business Administration's definitions of small agricultural producers set thresholds at $4 million for orange producers and $4.25 million for other citrus producers, the analysis suggests the majority of Texas growers fall significantly below these thresholds, with estimated average annual receipts around $750,594 per producer. This suggests smaller producers may bear a heavier relative burden with the increased rate.

Lack of Clarity and Alternatives

One noted issue is the insufficient breakdown or justification of how additional funds serve beyond covering the immediate expenses. The proposal does not specify how the increased funds will be managed in the long term to prevent similar shortfalls in the future or to leverage these funds beyond immediate fiscal responsibilities.

Furthermore, while the proposal briefly mentions alternative budgeting approaches considered by the Committee, there is a lack of detail about these alternatives or input from stakeholders outside of the Committee. This raises questions about the breadth of consideration given to potentially less burdensome solutions for the small businesses involved.

Conclusion

In summary, the proposed increase in the assessment rate intends to stabilize the financial situation of the Texas Valley Citrus Committee by covering budgeted expenses and replenishing depleted reserves. However, there's a lack of detailed justification for the increase beyond immediate fiscal needs, and alternative voices or solutions appear underrepresented, which could disproportionately impact smaller industry players. As stakeholders submit their thoughts during the comment period, it is crucial that these concerns be addressed to ensure a fair and transparent financial strategy moving forward.