The U.S. Department of Agriculture's Agricultural Marketing Service (AMS) has issued a proposed rule to raise the assessment rate for first handlers and importers of honey and honey products under the Honey Packers and Importers Research, Promotion, Consumer Education and Industry Information Order. Published in the Federal Register on March 9, 2026, the rule would increase the rate from the current $0.015 per pound to $0.02 per pound in two stages: first to $0.0175 per pound effective June 1, 2026, and then to $0.02 per pound starting January 1, 2027. This adjustment stems from a recommendation by the National Honey Board, which administers the program, to counter inflation and operational constraints. The move is significant as it would boost the board's revenue by approximately $2.99 million annually, based on 2024 assessment volumes, supporting enhanced marketing and research efforts in an industry facing rising costs and import dynamics.
Background of the Honey Research and Promotion Order
The Honey Packers and Importers Research, Promotion, Consumer Education and Industry Information Order, established in 2008 under the Commodity Promotion, Research, and Information Act of 1996 (7 U.S.C. 7411-7425), creates a framework for the honey industry to fund collective activities. The National Honey Board oversees these efforts, collecting assessments from first handlers and importers who deal in more than 250,000 pounds of honey or honey products annually. First handlers, often producers themselves, pay on domestically produced honey they handle, while importers pay on honey entering the U.S. via Customs and Border Protection. The program's goal is to strengthen market position through research, advertising, and education. The assessment rate was last increased in 2015 from $0.01 to $0.015 per pound, marking the only change since inception. Under the order's rules (7 CFR 1212.52(f)), rate adjustments require a two-thirds vote of the board and cannot exceed $0.02 per pound total or $0.0025 in any single fiscal year.
Details of the Proposed Assessment Increase
The proposed rule amends 7 CFR 1212.52(a) to implement the staged increase. Through May 31, 2026, the rate remains $0.015 per pound. It rises to $0.0175 per pound from June 1, 2026, to December 31, 2026, and reaches $0.02 per pound on January 1, 2027, remaining in effect until further modification. This structure complies with the order's limits on annual increments. The board voted 9-1 in favor of the recommendation on October 25, 2024, after discussions at its spring 2024 meeting and input from the National Honey Packers and Dealers Association, which supported the full increase to $0.02. The proposal estimates that, based on 2024 data, the change would add $2.42 million from importers and $567,782 from handlers to the board's budget, calculated from assessed volumes of 484.11 million pounds for importers and 113.56 million pounds for handlers.
Reasons Driving the Recommendation
Inflation and operational costs have eroded the board's purchasing power since the 2015 rate adjustment. U.S. inflation has risen 36 percent in that period, impacting staffing, promotion, and research expenses. While assessment revenue grew slightly since 2023, it has not kept pace with these increases, limiting the board's ability to execute projects. A key factor is the reimbursement process for imported organic honey. Under 7 CFR 1212.53(c), 100 percent organic products, as defined by the National Organic Program, are exempt from assessments. However, Customs collects fees on all imports, requiring importers to seek reimbursements from the board. This process incurs administrative costs and forces the board to reserve funds for requests extending 90 days into the next fiscal year (7 CFR 1212.53(e)(1)). Such reserves constrain spending on core activities. The board argues that the increase would alleviate these pressures, allowing more aggressive investment in promotion and research without depleting funds for reimbursements.
Regulatory and Economic Impact Analysis
The proposal includes reviews under several executive orders, confirming exemptions from certain oversight processes. It is exempt from Office of Management and Budget review under Executive Order 12866, as it amends an existing program essential for its operation. Assessments under Executive Order 13175 found no tribal implications, and Executive Order 12988 affirms no retroactive effects or preemption of other laws. The Initial Regulatory Flexibility Act analysis examines effects on small entities. Using Small Business Administration thresholds—$3.25 million in annual receipts for honey producers (NAICS 112910) and $34 million for service firms (NAICS 115114)—the AMS estimates that most of the 95 importers and 34 handlers affected qualify as small businesses. Average annual revenues are projected at $27.21 million per importer and $17.83 million per handler, below the $34 million threshold. The increase would raise costs uniformly but not disproportionately, adding to the program's budget without unduly burdening small operators. Paperwork Reduction Act compliance notes that existing forms under OMB control number 0581-0093 remain unchanged, with no new burdens identified.
Perspectives and Potential Implications
Stakeholders offer varied views on the proposal. The board and industry groups like the National Honey Packers and Dealers Association emphasize the need for increased funding to maintain competitiveness amid global honey market challenges, including rising imports and organic trends. Importers, who pay 81 percent of assessments, might see higher costs passed along in pricing, potentially affecting market dynamics. Handlers and producers could benefit from expanded promotion, but some may question the timing amid economic pressures. Short-term implications include a comment period until April 8, 2026, allowing input that could shape the final rule. Long-term effects might involve stronger industry research and marketing, though debates persist on assessment equity, especially for organic exemptions. No legal precedents directly apply, but the proposal aligns with similar adjustments in other commodity programs under the 1996 Act.
In summary, this proposed rule addresses funding shortfalls in the honey promotion program through a measured assessment increase. Key takeaways include the staged implementation to comply with order limits and the focus on countering inflation and reimbursements. Looking ahead, the comment period offers a chance for refinements, with potential finalization leading to enhanced board capabilities. Ongoing challenges may involve balancing assessment burdens with program benefits, while debates could center on exemption policies and market adaptations. Future trajectories might include further rate reviews if economic conditions evolve, ensuring the program's sustainability without speculative outcomes.
