[Federal Register Volume 63, Number 80 (Monday, April 27, 1998)]
[Rules and Regulations]
[Pages 20522-20528]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-11023]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 930

[Docket No. FV97-930-6 FR]


Tart Cherries Grown in the States of Michigan, et al.; Final Free 
and Restricted Percentages for the 1997-98 Crop Year for Tart Cherries

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This final rule establishes final free and restricted 
percentages for the 1997-98 crop year. The percentages are 55 percent 
free and 45 percent restricted. These percentages establish the 
proportion of cherries from the 1997 crop which may be handled in 
normal commercial outlets and are intended to stabilize supplies and 
prices, and strengthen market conditions. The percentages were 
recommended by the Cherry Industry Administrative Board (Board), the 
body which locally administers the marketing order. The marketing order 
regulates the handling of tart cherries grown in the States of 
Michigan, New York, Pennsylvania, Oregon, Utah, Washington, and 
Wisconsin.

EFFECTIVE DATE: April 28, 1998 through June 30, 1998, and applies to 
all tart cherries handled from the beginning of the 1997-98 crop year.

FOR FURTHER INFORMATION CONTACT: Patricia A. Petrella or Kenneth G. 
Johnson, Marketing Order Administration Branch, Fruit and Vegetable 
Programs, AMS, USDA, room 2525-S, P.O. Box 96456, Washington, DC 20090-
6456; telephone: (202) 720-2491. Small businesses may request 
information on compliance with this regulation by contacting: Jay 
Guerber, Marketing Order Administration Branch, Fruit and Vegetable 
Programs, AMS, USDA, P.O. Box 96456, room 2525-S, Washington, DC 20090-
6456; telephone: (202) 720-2491; Fax: (202) 720-5698.

SUPPLEMENTARY INFORMATION: This final rule is issued under marketing

[[Page 20523]]

agreement and Order No. 930 (7 CFR part 930), regulating the handling 
of tart cherries produced in the States of Michigan, New York, 
Pennsylvania, Oregon, Utah, Washington, and Wisconsin, hereinafter 
referred to as the ``order.'' The order is effective under the 
Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-
674), hereinafter referred to as the ``Act.''
    The Department of Agriculture (Department) is issuing this rule in 
conformance with Executive Order 12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the marketing order provisions now in effect, 
final free and restricted percentages may be established for tart 
cherries handled by handlers during the crop year. This rule 
establishes final free and restricted percentages for tart cherries for 
the 1997-98 crop year, beginning July 1, 1997, through June 30, 1998. 
This rule will not preempt any State or local laws, regulations, or 
policies, unless they present an irreconcilable conflict with this 
rule.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 608c(15)(A) of the 
Act, any handler subject to an order may file with the Secretary a 
petition stating that the order, any provision of the order, or any 
obligation imposed in connection with the order is not in accordance 
with law and requesting a modification of the order or to be exempt 
therefrom. Such handler is afforded the opportunity for a hearing on 
the petition. After the hearing, the Secretary would rule on the 
petition. The Act provides that the district court of the United States 
in any district in which the handler is an inhabitant, or has his or 
her principal place of business, has jurisdiction in equity to review 
the Secretary's ruling on the petition, provided an action is filed not 
later than 20 days after the date of the entry of the ruling.
    The order prescribes procedures for computing an optimum supply and 
preliminary and final percentages that establish the amount of tart 
cherries that can be marketed throughout the season. The regulations 
apply to all handlers of tart cherries that are in the regulated 
districts. Tart cherries in the free percentage category may be shipped 
to any market, while restricted percentage tart cherries must be held 
by handlers in a primary or secondary reserve, or be diverted in 
accordance with section 930.59 or used for exempt purposes under 
section 930.62. The regulated Districts for this season are: District 
one--Northern Michigan; District two--Central Michigan; District four--
New York; and District seven--Utah. Districts three, five, six, eight 
and nine (Southwest Michigan, Oregon, Pennsylvania, Washington, and 
Wisconsin, respectively) are not regulated for the 1997-98 season.
    The order prescribes under section 930.52 that upon adoption of the 
order, those districts to be regulated shall be those districts in 
which the average annual production of cherries over the prior three 
years has exceeded 15 million pounds. Handlers not meeting the 15 
million pound requirement shall not be regulated in such crop year. 
Therefore, for this season, handlers in the districts of Oregon, 
Pennsylvania, Washington, and Wisconsin are not subject to volume 
regulation. In addition, Southwest Michigan handlers are not subject to 
volume regulation this season because the estimated production fell 
below 50 percent of the average annual processed production in that 
district in the previous five years. Southwest Michigan's tart cherry 
production was subjected to a freeze during early bud development that 
reduced its crop yield for the 1997-1998 crop year.
    Section 930.50(a) describes procedures for computing an optimum 
supply for each crop year. The Board must meet on or about July 1 of 
each crop year, to review sales data, inventory data, current crop 
forecasts and market conditions. The optimum supply volume is 
calculated as 100 percent of the average sales of the prior three years 
to which is added a desirable carryout inventory not to exceed 20 
million pounds. The optimum supply represents the desirable volume of 
tart cherries that should be available for sale in the coming crop 
year.
    The order also provides that on or about July 1 of each crop year, 
the Board is required to establish preliminary free and restricted 
percentages. These percentages are computed by deducting the carryin 
inventory from the optimum supply figure (adjusted to raw product 
equivalent--the actual weight of cherries handled to process into 
cherry products) and dividing that figure by the current year's USDA 
crop forecast. The carryin inventory figure reflects the amount of 
cherries that handlers actually have in inventory. If the resulting 
quotient is 100 percent or more, the Board should establish a 
preliminary free market tonnage percentage of 100 percent. If the 
quotient is less than 100 percent, the Board should establish a 
preliminary free market tonnage percentage equivalent to the quotient, 
rounded to the nearest whole percent, with the complement being the 
preliminary restricted percentage.
    The Board met on June 26-27, 1997, and computed, for the 1997-98 
crop year, an optimum supply of 247 million pounds. This number was 
calculated by using 270 million pounds for the average three year sales 
figure and subtracting 23 million pounds for exports that could have 
received diversion credit. The Board recommended that the carryout 
figure be zero pounds. Also at the June 26-27 meeting, the Board 
established preliminary free and restricted percentages. The Board 
calculated the preliminary free and restricted percentages as follows: 
The USDA estimate of the crop was 242 million pounds; a 70 million 
pound carryin added to that equaled a total available supply of 312 
million pounds. The optimum supply was subtracted from the total 
estimated available supply resulting in a surplus of 65 million pounds 
of tart cherries. The surplus was divided by the production in the 
regulated districts and resulted in 66 percent free and 34 percent 
restricted for the 1997-98 season. The Board recommended these 
percentages by a 17 to 1 vote. No reason was provided for the one 
dissenting vote. No rulemaking was necessary at that time. The Board 
recommended the percentages and announced them to the industry as 
required by the order.
    The preliminary percentages were based on the USDA production 
estimate and the following supply and demand information for the 1997-
98 crop year:

------------------------------------------------------------------------
                                                             Millions of
                                                                pounds  
------------------------------------------------------------------------
Optimum supply formula:                                                 
    (1) Average sales of the prior three years  ...........          270
    (2) Plus carryout.........................  ...........            0
    (3) Less amount for exports that would                              
     have received diversion credit...........  ...........           23
    (4) Optimum Supply calculated by the Board                          
     at the June meeting......................  ...........          247

[[Page 20524]]

                                                                        
Preliminary percentages:                                                
    (5) Less carryin as of July 1, 1997.......  ...........           70
    (6) Tonnage requirement for current crop                            
     year.....................................  ...........          177
    (7) USDA crop estimate....................  ...........          242
    (8) Estimated restricted percentage                                 
     tonnage (item 7 minus item 6)............  ...........           65
    (9) USDA crop estimate for regulated                                
     districts................................  ...........          192
                                                                        
    Percentages...............................      Free      Restricted
                                                                        
    (10) Preliminary percentages (item 8                                
     divided by item 9)  x  100...............           66           34
------------------------------------------------------------------------

    The Board may adjust the estimated crop production as the actual 
pack is realized and interim percentages may be announced between July 
1 and September 15 of the crop year.
    Section 930.50(d) of the order requires the Board to meet no later 
than September 15 to recommend final free and restricted percentages to 
the Secretary for approval. The Board met on September 11-12, 1997, and 
recommended final free and restricted percentages of 55 and 45, 
respectively. The Board recommended that the interim percentages and 
final percentages be the same percentages. At that time, the Board had 
available actual production amounts to review and made the necessary 
adjustments to the percentages.
    The Secretary establishes final free and restricted percentages 
through an informal rulemaking process. These percentages would make 
available the tart cherries necessary to achieve the optimum supply 
figure calculated earlier by the industry. The difference between any 
final free market tonnage percentage designated by the Secretary and 
100 percent is the final restricted percentage.
    The Board used a revised optimum supply figure of 270 million 
pounds for its final percentage calculations because it was determined 
that exports of 23 million pounds should not have been deducted from 
the average sales figure. At its March 1997 meeting, the Board had 
recommended that the Department modify the average sales under the 
optimum supply formula by deducting exports from the figure. The 
Department did not proceed with that recommendation since the 
promulgation record shows that average sales, as defined in the order, 
includes sales to all markets, including exports.
    The optimum supply, therefore was 270 million pounds. The actual 
production recorded by the Board was 284 million pounds, a 42 million 
pound increase from the USDA crop estimate. The increase in the crop is 
due to very favorable growing conditions in portions of the State of 
Michigan this season.
    A 70 million pound carryin was subtracted from the optimum supply, 
which yields a tonnage requirement for the current crop year of 200 
million pounds. Subtracted from the actual production of 284 million 
pounds reported by the Board is the tonnage required for the current 
crop year (200 million pounds) which results in an 84 million pound 
surplus. An adjustment for changed economic conditions of 23 million 
pounds was added to the surplus, pursuant to section 930.50(f). This 
adjustment is discussed later in this document. This yielded a total 
surplus of 107 million pounds of tart cherries. The free and restricted 
percentages would only apply to those handlers in regulated districts. 
Therefore, the percentages would be calculated by dividing the 
restricted tonnage volume by the regulated districts' production. The 
total surplus of 107 million pounds is divided by the 239 million pound 
volume of tart cherries produced in the regulated districts. This 
results in a 45 percent restricted percentage and a corresponding 55 
percent free percentage for the regulated districts.
    Section 930.51(d) of the order provides that handlers should have a 
grace period of up to 30 days to establish their inventory reserves 
after final percentages have been established. Therefore, handlers have 
30 days after the effective date of this rule to comply with the 45 
percent restricted obligation requirement.
    The final percentages are based on the Board's reported production 
figures and the following supply and demand information for the 1997-98 
crop year:

------------------------------------------------------------------------
                                                             Millions of
                                                                pounds  
------------------------------------------------------------------------
Optimum supply formula:                                                 
    (1) Average sales of the prior three years  ...........          270
    (2) Plus carryout.........................  ...........            0
    (3) Optimum Supply calculated by the Board                          
     at the September meeting.................  ...........          270
Final percentages:                                                      
    (4) Less carryin as of July 1, 1997.......  ...........           70
    (5) Tonnage required current crop year....  ...........          200
    (6) Board reported production.............  ...........          284
    (7) Surplus (item 6 minus item 5).........  ...........           84
    (8) Economic adjustment to surplus........  ...........           23
    (9) Adjusted surplus (item 7 plus item 8).  ...........          107
    (10) Production in regulated districts....  ...........          239
                                                                        
                  Percentages                       Free      Restricted
                                                                        
    (11) Final Percentages (item 9 divided by                           
     item 10) x 100...........................           55           45
------------------------------------------------------------------------

    As previously mentioned, the Board had made an earlier 
recommendation to modify the optimum supply formula by defining average 
sales to not include exports that were granted diversion credit. It was 
determined that exports

[[Page 20525]]

should not have been excluded. Thus, the Board was unable to make the 
23 million pound adjustment this season in the optimum supply. The 
Board thus recommended at its September meeting that the marketing 
policy be modified due to changes in economic conditions as specified 
under section 930.50(e)(5) and (7) and (f). Specifically, the Board 
recommended that the proviso in Sec. 930.59(b) of the order be 
suspended for the 1997-98 year only and that diversion credit for 
exports of juice and juice concentrate be allowed for the 1997-98 crop 
year.
    Also, at its meeting in March 1997, the Board recommended that 
handler exports of cherry products, including juice and juice 
concentrate, to countries other than Canada, Mexico, and Japan, receive 
diversion credit. During the production and processing of the crop, 
handlers have exported, or have contracted to export, tart cherry 
products, including juice or juice concentrate, and were operating 
under the impression that they could apply for and receive, diversion 
credit for such sales. Many of these exports were for the purpose of 
expanding existing markets or developing new markets. This issue was 
further addressed in a separate rulemaking action (see 63 FR 399, 
January 6, 1998).
    By recommending the marketing policy modification, the Board 
believed that it would provide stability to the marketplace and the 
industry would be in a better situation for future years since new 
markets will have been developed. Board members discussed at that 
meeting that, if this adjustment is not made, growers could be paid 
less than their production costs, because handlers could suffer 
financial losses that would be passed on to growers. Handlers would 
have to meet their reserve obligations by other means. In addition, the 
value of cherries already in inventory could be depressed by 20 to 50 
percent due to the abundant supply of available cherries, a result 
inconsistent with the intent of the order and the Act.
    The changes in economic conditions that justified the recommended 
marketing policy modification are as follows: (1) The determination 
that export sales could not be removed from the optimum supply formula 
calculation was made late in the season; (2) handlers had made 
marketing plans, sales and sales commitments (including exports) based 
on the Board's recommendations made in March and June; and (3) prices 
received for tart cherries and tart cherry products could be severely 
impacted by an additional large volume of cherries being made available 
to the market when there is already an abundant supply of cherries.
    The Department's ``Guidelines for Fruit, Vegetable, and Specialty 
Crop Marketing Orders'' specify that 110 percent of recent years' sales 
should be made available to primary markets each season before 
recommendations for volume regulation are approved. This goal is met by 
the establishment of a final percentage which releases 100 percent of 
the optimum supply and the additional release of tart cherries provided 
under section 930.50(g). This release of tonnage, equal to 10 percent 
of the average sales of the prior three years sales, is made available 
to handlers each season. The Board recommended that such release shall 
be made available to handlers the first week of December and the first 
week of May. Handlers can decide how much of the 10 percent release 
they would like to receive during the December and May release dates. 
Once released, such cherries are released for free use by such handler. 
Approximately 27 million pounds will be made available to handlers this 
season in accordance with Department Guidelines. This release would be 
made available to every handler and released to such handler in 
proportion to its percentage of the total regulated crop handled. If 
such handler does not take such handler's proportionate amount, such 
amount shall remain in the inventory reserve.

The Regulatory Flexibility Act and Effects on Small Businesses

    The Agricultural Marketing Service (AMS) has considered the 
economic impact of this action on small entities and has prepared this 
final regulatory flexibility analysis. The Regulatory Flexibility Act 
(RFA) would allow AMS to certify that regulations do not have a 
significant economic impact on a substantial number of small entities. 
However, as a matter of general policy, AMS' Fruit and Vegetable 
Programs (Programs) no longer opt for such certification, but rather 
perform regulatory flexibility analyses for any rulemaking that would 
generate the interest of a significant number of small entities. 
Performing such analyses shifts the Programs' efforts from determining 
whether regulatory flexibility analyses are required to the 
consideration of regulatory options and economic or regulatory impacts.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business 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. Thus, both statutes have small 
entity orientation and compatibility.
    There are approximately 40 handlers of tart cherries who are 
subject to regulation under the tart cherry marketing order and 
approximately 1,220 producers of tart cherries in the regulated area. 
Small agricultural service firms, which include handlers, have been 
defined by the Small Business Administration (13 CFR 121.601) as those 
having annual receipts of less than $5,000,000, and small agricultural 
producers are defined as those having annual receipts of less than 
$500,000.
    Board and subcommittee meetings are publicized in advance and are 
held in a location central to the production area. The meetings are 
open to all industry members (including small business entities) and 
other interested persons--who are encouraged to participate in the 
deliberations and voice their opinions on topics under discussion. 
Thus, Board recommendations usually represent the interests of both 
small and large business entities in the industry.
    The principal demand for tart cherries is in the form of processed 
products. Tart cherries are dried, frozen, canned, juiced and pureed. 
During the period 1993/94 through 1996/97, approximately 94 percent of 
the U.S. tart cherry crop, or 285.7 million pounds, was processed 
annually. Of the 285.7 million pounds of tart cherries processed, 63 
percent was frozen, 32 percent canned and 3 percent utilized for juice. 
The remaining 2 percent was dried or assembled into juice packs.
    Based on National Agricultural Statistics Service data, acreage in 
the United States devoted to tart cherry production has been trending 
downward since the 1991/92 season. In the ten-year period, 1986/87 
through 1996/97, tart cherry area decreased from 48,180 acres, to less 
than 42,000 acres. Approximately 78 percent of domestic tart cherry 
acreage is located in four States: Michigan, New York, Utah and 
Wisconsin. Michigan leads the nation in tart cherry acreage with 65 
percent of the total. Michigan produces about 72 percent of the U.S. 
tart cherry crop each year. In 1996/97, tart cherry acreage in Michigan 
was down 2,700 acres, to 27,300.
    In crop years 1986 through 1993, tart cherry production ranged from 
a high of 359 million pounds in 1987 to a low of 189.9 million pounds 
in 1991. The price per pound to tart cherry growers ranged from a low 
of 7.3 cents in 1987 to a high of 46.4 cents in 1991. These problems of

[[Page 20526]]

wide supply and price fluctuation in the tart cherry industry are 
national in scope and impact. Growers testified during the order 
promulgation process that the average prices of 12 to 17 cents per 
pound which they received during this period did not come close to 
covering the costs of production for the vast majority of tart cherry 
growers. They also testified that production costs for most growers 
range between 20 and 22 cents per pound, which is well above average 
prices received.
    As previously stated, this is the first year of operation for this 
marketing order. The industry demonstrated a need for such order during 
the promulgation process because large variations in annual tart cherry 
supplies tend to lead to disorderly marketing. As a result of these 
fluctuations in supply and price, growers receive less income for their 
tart cherries. The industry, therefore, chose a volume control 
marketing order to even out these wide variations in supply and improve 
returns to growers. During the promulgation process, proponents 
testified that small growers and processors would have the most to gain 
from implementation of a marketing order because many such growers and 
handlers have been going out of business over most of the last eight 
years due to low tart cherry prices. They also testified that, since an 
order would help increase grower returns, this should increase the 
buffer between business success and failure because small growers and 
handlers tend to be less capitalized than larger growers and handlers.
    In discussing the possibility of marketing percentages for the 
1997-98 crop year, the Board considered: (1) The estimated total 
production of tart cherries; (2) the estimated size of the crop to be 
handled; (3) the expected general quality of such cherry production; 
(4) the expected carryover as of July 1 of canned and frozen cherries 
and other cherry products; (5) the expected demand conditions for 
cherries in different market segments; (6) supplies of competing 
commodities; (7) an analysis of economic factors having a bearing on 
the marketing of cherries; (8) the estimated tonnage held by handlers 
in primary or secondary inventory reserves; and (9) any estimated 
release of primary or secondary inventory reserve cherries during the 
crop year.
    The Board's review of the factors resulted in the computation and 
announcement in July 1997 of preliminary free and restricted 
percentages, and subsequent recommendation of interim and final 
percentages at its September meeting.
    The Board recognized that the demand for tart cherries is inelastic 
at high and low levels of production. At the extremes, different 
factors become operational. The promulgation record states that in very 
short crops there is limited but sufficient exclusive demand for 
cherries that can cause processor prices to double and grower prices to 
triple. In the event of large crops, there seems to be no price low 
enough to expand tart cherry sales in the marketplace sufficient to 
market the crops.
    The Board discussed alternatives to this recommendation. The Board 
discussed the feasibility of not having volume regulation this season. 
However, it was the Board's overall feeling that no volume regulation 
would be detrimental to the tart cherry industry. Returns to growers 
would probably not cover their production costs for this season.
    The Board also discussed not granting exemptions, and diversion 
credit for such exemptions, for exports to eligible countries 
(including juice and juice concentrate), other exempt uses, and 
charitable donations. However, the Board felt this would not be in the 
best interest of the industry or the public. The Board expressed that 
not allowing the export and other exemptions would have a detrimental 
effect on the market this season if free and restricted percentages are 
imposed. Without such exemptions and diversion credits for export 
sales, new market development and other specified uses, about 50 
million pounds of cherries would not be removed from the domestic 
market this season, depressing grower returns for all cherries. The 
marketing order was designed to increase grower returns by stabilizing 
supplies with demand as well as stabilizing prices and creating a more 
orderly and predictable marketing environment. Expanding markets and 
developing new products is key to meeting this marketing order's goals.
    Not granting exemptions and diversion credit for exports to 
countries other than Canada, Mexico, and Japan was also discussed at 
Board meetings. However, the Board expressed that this recommendation 
is very important to creating stable conditions in the export 
marketplace this season and would encourage future market growth. The 
Board further stated that such action will improve returns to growers 
because of the tremendous growth in the export market this season. 
Exemptions and diversion credit have been addressed in other rulemaking 
actions.
    As mentioned earlier, the Department's ``Guidelines for Fruit, 
Vegetable, and Specialty Crop Marketing Orders'' specify that 110 
percent of recent years' sales should be made available to primary 
markets each season before recommendations for volume regulation are 
approved. The quantity available under this rule is 110 percent of the 
quantity shipped in the prior three years.
    The free and restricted percentages established by this rule 
release the optimum supply and apply uniformly to all regulated 
handlers in the industry, regardless of size. There are no known 
additional costs incurred by small handlers that are not incurred by 
large handlers. The stabilizing effects of the percentages impact all 
handlers positively by helping them maintain and expand markets, 
despite seasonal supply fluctuations. Likewise, price stability 
positively impacts all producers by allowing them to better anticipate 
the revenues their tart cherries will generate.
    While the level of benefits of this rulemaking are difficult to 
quantify, the stabilizing effects of the volume regulations impact both 
small and large handlers positively by helping them maintain markets 
even though tart cherry supplies fluctuate widely from season to 
season.
    In compliance with Office of Management and Budget (OMB) 
regulations (5 CFR part 1320) which implement the Paperwork Reduction 
Act of 1995 (Pub. L. 104-13), the information collection and 
recordkeeping requirements have been previously approved by OMB and 
assigned OMB Number 0581-0177.
    There are some reporting, recordkeeping and other compliance 
requirements under the marketing order. The reporting and recordkeeping 
burdens are necessary for compliance purposes and for developing 
statistical data for maintenance of the program. The forms require 
information which is readily available from handler records and which 
can be provided without data processing equipment or trained 
statistical staff. As with other, similar marketing order programs, 
reports and forms are periodically studied to reduce or eliminate 
duplicate information collection burdens by industry and public sector 
agencies. This final rule does not change those requirements.
    The Department has not identified any relevant Federal rules that 
duplicate, overlap, or conflict with this regulation.
    A proposed rule concerning this action was published in the Federal 
Register on Wednesday, January 21, 1998 (63 FR 3048). Copies of the 
rule were also mailed or sent via facsimile to

[[Page 20527]]

all Board members and cherry handlers. Finally, the rule was made 
available through the Internet by the Office of the Federal Register.
    A 15-day comment period was provided to allow interested persons to 
respond to the proposal. Fifteen days was deemed appropriate because a 
rule finalizing the action would need to be in place as soon as 
possible since handlers are currently marketing 1997-98 crop cherries.
    One comment was received during the comment period in response to 
the proposal. The comment addressed the proposed rule published in the 
Federal Register on January 21, 1998, concerning final free and 
restricted percentages which are being finalized in this rulemaking. 
The commenter represents a tart cherry association in the State of 
Oregon. The comment also responded to a request for comments made in 
the interim final rule published in the Federal Register on January 6, 
1998 (63 FR 399). That document established regulations for handler 
diversion and included a temporary suspension of order provisions. To 
the extent that the comment addressed issues relating to the January 6, 
1998, publication, that portion of the comment will be discussed, as 
appropriate, in the final action concerning that document which will be 
published separately from this action.
    With respect to the proposed rule which preceded this action, the 
commenter disagreed with a statement contained in the initial 
regulatory flexibility analysis and that also appears in the final 
regulatory flexibility analysis in this action. The statement indicated 
that Board meetings are widely publicized in advance and are held in a 
location central to the production area. The commenter stated that to 
date meetings have been central only to those producers and handlers in 
the Michigan districts. No fewer than five Board members and their 
alternates spend almost a full day commuting to Board meetings. 
Secondly, the commenter commented that access to the meetings is 
limited to those who have the resources of money and time to make such 
a commitment. Most of those present represent large growers and 
handlers. The commenter believes that Board recommendations usually 
represent the interests of primarily large business entities. The 
commenter also stated that the Board does a poor job of publicizing 
Board and subcommittee meetings. To the commenter's knowledge, meetings 
are announced among participants and in no way are published in 
agricultural or business trade journals or newspapers in the production 
districts. According to the commenter, growers and handlers are not 
receiving a notice of all meetings. Finally, the commenter urged the 
Department to rule on the identity and nature of CherrCo, Inc., a new 
entity in the tart cherry industry, as it relates to the Federal tart 
cherry marketing order.
    In regard to the commenter's first issue of meetings being held in 
a location central to the production, the Board also has to consider 
the cost of travel for all Board members since the Board pays travel 
expenses for all of its members. The first meetings held in December of 
1996 and throughout 1997 were attended by all members and their 
alternates. A Board recommendation was passed that the start-up 
meetings be attended by the alternates so they would be involved and 
aware of Board activities. It would have resulted in considerable 
expense to the Board to hold the meetings outside of Michigan since 16 
members and alternates are from the State of Michigan. The Board 
realizes the time spent in travel could be inconvenient for some of the 
other Board members and has made a commitment to hold the June 
marketing policy meeting in Michigan and the September marketing policy 
meeting in a district outside of Michigan. The Board is also committed 
to holding meetings outside the Michigan districts to allow producers 
and handlers to attend the meetings and cut down on travel time for 
those not located in Michigan.
    In regard to the second issue raised by the commenter concerning 
access to the meetings being limited to those who have money and time 
to commit, the meetings held in Michigan were held frequently to do the 
groundwork needed to implement the many marketing order authorities. It 
was more cost effective to the industry to have such meetings in 
Michigan. As previously mentioned, the Board pays all travel costs for 
its members and 16 Board members and alternates are from Michigan. 
Growers and handlers are welcome to attend these meetings. The Board 
has made the commitment to rotate meeting sites throughout the 
production area to allow growers and handlers from other districts to 
participate. Recommendations are not made by the Board for only the 
benefit of large growers and handlers. The Board, which is comprised of 
small entities, discusses the impacts of such recommendations on small 
and large growers and handlers. The Board has been given the 
responsibility to make recommendations that benefit the industry as a 
whole.
    In regard to the commenter's contention that the Board does a poor 
job of publicizing Board and subcommittee meetings, we disagree. The 
Board has and will continue to take appropriate action to provide the 
widest possible notice of upcoming meetings to all handlers and Board 
members and alternate Board members. The Board sends meeting notices to 
all Board members and several tart cherry industry organizations. In 
fact, the Board is currently developing a newsletter which will be 
distributed to all growers and handlers of record to further publicize 
upcoming Board meetings.
    Finally, in regard to the CherrCo issue, the Department is 
continuing to work with the Board on this issue. This issue will be 
addressed separately.
    Accordingly, no changes will be made to the rule as proposed, based 
on the comments received.
    After consideration of all relevant matter presented, including the 
information and recommendation submitted by the Board and other 
available information, it is hereby found that this rule, as 
hereinafter set forth, will tend to effectuate the declared policy of 
the Act.
    It is further found that good cause exists for not postponing the 
effective date of this rule until 30 days after publication in the 
Federal Register (5 U.S.C. 553) because handlers are currently 
marketing 1997-98 tart cherries. Further, handlers are aware of this 
rule, which was recommended at a public meeting. Also, a 15-day comment 
period was provided for in the proposed rule.

List of Subjects in 7 CFR Part 930

    Marketing agreements, Tart cherries, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR Part 930 is 
amended to read as follows:

PART 930--TART CHERRIES GROWN IN THE STATES OF MICHIGAN, NEW YORK, 
PENNSYLVANIA, OREGON, UTAH, WASHINGTON, AND WISCONSIN

    1. The authority citation for 7 CFR part 930 continues to read as 
follows:

    Authority: 7 U.S.C. 601-674.

    2. A new subpart--Supplementary Regulations and a new section 
930.250 are added to read as follows:


Sec. 930.250  Final free and restricted percentages for the 1997-98 
crop year.

    The final percentages for tart cherries handled by handlers in 
volume

[[Page 20528]]

regulated districts during the crop year beginning on July 1, 1997, 
which shall be free and restricted, respectively, are designated as 
follows: Free percentage, 55 percent and restricted percentage, 45 
percent.

    Dated: April 20, 1998.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-11023 Filed 4-24-98; 8:45 am]
BILLING CODE 3410-02-P