[Federal Register Volume 64, Number 108 (Monday, June 7, 1999)]
[Rules and Regulations]
[Pages 30229-30232]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-14310]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 930

[Docket No. FV99-930-2 IFR]


Tart Cherries Grown in the States of Michigan, et al.; Revision 
of the Sampling Techniques for Whole Block and Partial Block Diversions 
and Increasing the Number of Partial Block Diversions Per Season for 
Tart Cherries

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This interim final rule revises the sampling techniques for 
whole and partial block diversions and increases the number of 
allowable partial block diversions under the Federal marketing order 
for tart cherries. These changes are intended to make the voluntary 
grower diversion program more flexible for grower participants. The 
order regulates the handling of tart cherries grown in the States of 
Michigan, New York, Pennsylvania, Oregon, Utah, Washington, and 
Wisconsin and is administered locally by the Cherry Industry 
Administrative Board (Board). The Board unanimously recommended this 
action.

DATES: Effective June 8, 1999; comments received by August 6, 1999, 
will be considered prior to issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent to the Docket Clerk, Fruit 
and Vegetable Programs, AMS, USDA, room 2525-S, PO Box 96456, 
Washington, DC 20090-6456, Fax: (202) 720-5698; or E-mail: 
[email protected]. All comments should reference the docket 
number and the date and page number of this issue of the Federal 
Register and will be made available for public inspection in the Office 
of the Docket Clerk during regular business hours.

FOR FURTHER INFORMATION CONTACT: Patricia A. Petrella or Kenneth G. 
Johnson, Marketing Order Administration Branch, F&V, AMS, USDA, room 
2530-S, P.O. Box 96456, Washington, DC 20090-6456, telephone: (202) 
720-2491. Small businesses may request information on compliance with 
this regulation, or obtain a guide on complying with fruit, vegetable, 
and specialty crop marketing agreements and orders 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; or E-mail: 
Jay.G[email protected]. You may also view the marketing agreements and 
orders small business compliance guide at the following website: http:/
/www.ams.usda.gov/fv/moab.html.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement and Order No. 930 (7 CFR part 930) regulating the handling of 
tart cherries grown in the States of Michigan, New York, Pennsylvania, 
Oregon, Utah, Washington, and Wisconsin, hereinafter referred to as the 
``order.'' This 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 or USDA) is issuing this 
rule in conformance with Executive Order 12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule is not intended to have retroactive effect. 
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 request a modification of the order or to be exempted 
therefrom. A 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 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.
    This rule revises the sampling techniques used in determining the 
amount of production diverted from whole blocks and partial blocks of 
cherry trees, and increases the number of allowable partial block 
diversions per season under the order. Whole block diversion results 
when an entire orchard block is left unharvested. Partial block 
diversion occurs when a contiguous portion of a definable block is 
diverted. An orchard block is defined as a group of cherry trees of 
similar age, with rows aligned in the same direction, and

[[Page 30230]]

having definable boundaries (e.g., roads, ditches, or other permanent 
landmarks).
    Section 930.58 of the tart cherry marketing order provides 
authority for voluntary grower diversion. Growers can divert all or a 
portion of their cherries which otherwise, upon delivery to a handler, 
would be subject to volume regulation. One of the ways handlers can 
satisfy their restricted percentage obligations is by redeeming grower 
diversion certificates. After the Board confirms that the grower 
diverted his/her crop, the Board issues a diversion certificate to the 
grower stating the weight of cherries diverted. The grower can present 
the certificate to a handler in lieu of actual cherries. The handler, 
in turn, can present the certificate to the Board. The Board then 
applies the weight of cherries represented by the certificate against 
the handler's restricted percentage obligation, which reduces the 
handler's restricted obligation.
    Section 930.158 provides rules and regulations for grower 
diversion. Included in this section are procedures and deadline dates 
for applying for diversion and choosing the type of diversion available 
to growers. There are four types of diversion-random row, whole block, 
partial block, and in-orchard tank. This rule only makes changes to the 
whole and partial block diversions.
    Grower applications for diversion must be filed by April 15 and 
growers must inform the Board by July 1 whether they elect to whole or 
partial block divert their tart cherries. If whole block or partial 
block diversion is not selected by July 1, the grower would have to 
choose the random row method or the in-orchard tank methods of 
diversion.
    In whole and partial block diversion, the quantity of the fruit 
diverted is determined by application of a statistical sampling 
protocol. Currently, Sec. 930.158 specifies that, if a block has 5 rows 
or less, 3 rows are randomly chosen to be sampled. If a block has 6 to 
15 rows, 4 rows are randomly chosen to be sampled. If a block has 16 or 
more rows, 5 rows are randomly chosen to be sampled. Ten contiguous 
tree sites would be sampled from each row.
    During its review of the grower diversion program, the Board 
concluded that the current sampling procedure, which is based solely on 
the number of rows in a block, requires more trees to be sampled on 
smaller blocks or on blocks that had short rows than is necessary to 
accurately determine the amount of tart cherries diverted. The Board 
determined that a sample size of approximately 10 to 15 percent which 
had been taken on larger orchard blocks with more trees in a row, was 
adequate to accurately calculate the quantity of fruit diverted from 
such orchard blocks. That sample size could easily be twice as large in 
small orchards having fewer trees per row. Therefore, the Board 
recommended that the regulations be amended so that the sample taken 
from both large and small orchard blocks would be about 10 to 15 
percent.
    To achieve this goal, the Board recommended that the sampling 
procedure be revised by taking into account the number of rows and 
number of tree sites in each particular block. The sampling method used 
would be the one requiring the smaller number of trees. A tree site is 
a planted tree or an area where a tree was planted and may have been 
uprooted or died. The recommended sampling procedure is as follows: If 
a block has 5 rows or less, or 200 or less tree sites, 3 rows would be 
randomly chosen to be sampled. If a block has 6 to 15 rows or 201-400 
tree sites, 4 rows would be randomly chosen to be sampled. If a block 
has 16 or more rows and greater than 400 tree sites, 5 rows would be 
randomly chosen to be sampled. This procedure is expected to result in 
a sample size of about 12 to 15 percent whether the orchard block has 
long rows or short rows.
    For example, under the current sampling criteria, if a grower has 
10 rows with 20 tree sites per row (10  x  20 equals 200 tree sites), 4 
rows would have to be sampled. Under these rules, only 3 rows would 
have to be sampled since there are 200 tree sites.
    As is currently required, prior to sampling, the grower must notify 
the Board to allow observation of the sampling process by a compliance 
officer. The sampling method used would be the one requiring the 
smaller number of trees to be sampled. The compliance officer will use 
an orchard map in determining how many trees to sample.
    To determine the yield for whole block diversion when five rows are 
to be sampled, 10 contiguous tree sites in each of the five rows are 
sampled. A total of 50 tree sites would be sampled ((10 original tree 
sites) X (5 rows)= 50 tree sites). If, for example, a total of 4,600 
pounds is harvested from the sample tree sites and this is divided by 
50 tree sites, a yield of 92 pounds per tree site will be obtained. The 
yield for the block is found by multiplying the calculated 92 pounds 
per tree site yield by the 880 tree sites that were mapped in the block 
to yield 80,960 pounds for that block.
    For partial block diversion, the yield for the partial block is 
found by multiplying the calculated pounds per tree site yield by the 
number of trees in the rows mapped in the partial block. Partial blocks 
shall consist of contiguous rows.
    After harvest, the compliance officer could again visit the 
grower's orchard to verify that diversion actually took place. A 
diversion certificate would be issued for an amount equal to the volume 
of cherries diverted. The grower could then present the certificate to 
a handler to be redeemed.
    The second change to the regulations increases the number of 
partial blocks that growers may divert each season. Partial block 
diversion is when a contiguous portion of a definable block is 
diverted. Using this method of diversion, a grower having a block with 
35 rows could divert contiguous rows 1 through 22 and harvest rows 23 
through 35. Currently, section 930.158(b)(3) limits the number of 
partial block diversions to one partial block diversion for each grower 
per year. This limitation was intended to reduce the time that 
compliance officers needed to spend observing sampling and diversion 
activities at growers' orchards and the administrative costs involved.
    After one year of diversion under these rules, the Board 
reevaluated the program and determined that the number of partial block 
diversions per grower per year could be increased from one to five, or 
50 percent of a producer's total number of blocks. For example, if a 
grower has 12 separate orchard blocks mapped by the Board, such grower 
would now be able to divert up to 6 partial blocks. After reviewing 
last year's operations, the Board believes that its administrative 
costs will not increase materially by making this change. Because this 
method of diversion allows growers to divert cherries based on quality, 
the Board further believes that the ability to take advantage of 
partial block diversion on a larger scale will foster increased 
participation in the voluntary program.

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 
initial regulatory flexibility analysis. The Regulatory Flexibility Act 
(RFA) allows 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

[[Page 30231]]

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 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 order and approximately 900 producers 
of tart cherries in the regulated area. The number of reported tart 
cherry producers in the regulated area is lower this crop year than in 
previous years (down from 1,220 producers) due to the Board receiving 
more accurate producer information. Small agricultural service firms, 
which includes 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. The majority of handlers 
and producers of tart cherries may be classified as small entities.
    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 1997/98, approximately 89 percent of 
the U.S. tart cherry crop, or 281.1 million pounds, was processed 
annually. Of the 281.1 million pounds of tart cherries processed, 63 
percent was frozen, 25 percent canned and 4 percent utilized for juice. 
The remaining 8 percent was dried or assembled into juice packs.
    In 1998, 37.7 million pounds of cherries were diverted in the 
orchard. Of that total, 16.3 million pounds were whole block diversions 
and 8.4 million were partial block diversions. The balance of the 
grower diversions were random row and in-orchard tank diversions.
    Section 930.58 of the tart cherry marketing order provides 
authority for voluntary grower diversion. Growers can divert all or a 
portion of their cherries which otherwise, upon delivery to a handler, 
would be subject to volume regulation. One of the ways handlers can 
satisfy their restricted percentage obligations is by redeeming grower 
diversion certificates. After the Board confirms that the grower 
diverted his/her crop, the Board issues the grower a diversion 
certificate stating the weight of cherries diverted. The grower can 
present the certificate to a handler in lieu of actual cherries. The 
handler, in turn, can present the certificate to the Board. The Board 
then applies the weight of cherries represented by the certificate 
against the handler's restricted percentage obligation, which reduces 
the handler's restricted obligation.
    Section 930.158 provides rules and regulations for grower 
diversion. Included in this section are procedures and dates for 
applying for diversion. There are four types of diversion. However, 
this action only makes changes to the rules and regulations for whole 
and partial block diversions.
    Grower applications for diversion must be filed by April 15 and 
growers must inform the Board by July 1 whether they elect to whole or 
partial block divert their tart cherries. If whole block or partial 
block diversion is not selected by July 1, the grower would have to 
choose the random row method or the in-orchard tank methods of 
diversion.
    In whole and partial block diversions, the quantity of the fruit 
diverted is determined by application of a statistical sampling 
protocol. Currently, Sec. 930.158 specifies that, if a block has 5 rows 
or less, 3 rows are randomly chosen to be sampled. If a block has 6 to 
15 rows, 4 rows are randomly chosen to be sampled. If a block has 16 or 
more rows, 5 rows are randomly chosen to be sampled. Ten contiguous 
tree sites would be sampled from each row.
    During its review of the grower diversion program, the Board 
concluded that the current sampling procedure which is based solely on 
the number of rows in a block, requires more trees to be sampled on 
smaller blocks or on blocks that had short rows than is necessary to 
accurately determine the amount of tart cherries diverted. The Board 
determined that a sample size of approximately 10 to 15 percent which 
had been taken on larger orchard blocks with more trees in a row, was 
adequate to accurately calculate the quantity of fruit diverted from 
such orchard blocks. That sample size could easily be twice as large in 
small orchards having fewer trees per row. Therefore, the Board 
recommended that the regulations be amended so that the sample taken 
from both large and small orchard blocks would be about 10 to 15 
percent.
    To achieve this goal, the Board recommended that the sampling 
procedure be revised by taking into account the number of rows and 
number of tree sites in each particular block. The sampling method used 
would be the one requiring the smaller number of trees. A tree site is 
a planted tree or an area where a tree was planted and may have been 
uprooted or died. The recommended sampling procedure is as follows: If 
a block has 5 rows or less, or 200 or less tree sites, 3 rows would be 
randomly chosen to be sampled. If a block has 6 to 15 rows or 201-400 
tree sites, 4 rows would be randomly chosen to be sampled. If a block 
has 16 or more rows and greater than 400 tree sites, 5 rows would be 
randomly chosen to be sampled. This procedure is expected to result in 
a sample size of about 12 to 15 percent whether the orchard block has 
long rows or short rows.
    The second change to the regulations increases the number of 
partial blocks that growers may divert each season. Partial block 
diversion is when a contiguous portion of a definable block is 
diverted. Using this method of diversion, a grower having a block with 
35 rows could divert contiguous rows 1 through 22 and harvest rows 23 
through 35. Currently, section 930.158(b)(3) limits the number of 
partial block diversions to one partial block diversion for each grower 
per year. This limitation was intended to reduce the time that 
compliance officers needed to spend observing sampling and diversion 
activities at growers' orchards and the administrative costs involved.
    After one year of diversion under these rules, the Board 
reevaluated the program and determined that the number of partial block 
diversions per grower per year could be increased from one to five, or 
50 percent of a producer's total number of blocks, without materially 
increasing administrative costs. Because this method of diversion 
allows growers to divert cherries based on quality, the Board further 
believes that the ability to take advantage of partial block diversion 
on a larger scale will foster increased participation in the voluntary 
program.
    The Board considered not changing the partial block diversion 
limitation as well as allowing an unlimited number of diversions. 
However, after much discussion, the Board decided that the diversion 
program could best be improved by increasing the opportunities for 
grower diversion, but believed a reasonable limit was needed to keep 
Board administrative costs as low as possible. Last year's experience 
showed that partial block diversion is the most flexible diversion 
option

[[Page 30232]]

available to the grower because it allows growers to divert tart 
cherries based on quality. For example, if a grower observes that part 
of a block of tart cherries is of low quality, the problem rows can be 
diverted allowing the grower to deliver high quality fruit to a 
handler. The ability to choose in this manner benefits both growers, 
handlers, and the industry as a whole.
    At the end of the upcoming season, the Board plans to review the 
number of partial block diversions approved and decide if the number of 
such diversions is appropriate for upcoming crop years.
    This rule does not require any new forms and will not impose any 
additional recordkeeping requirements on either small or large tart 
cherry diversion participants. As with all Federal marketing order 
programs, reports and forms are periodically reviewed to reduce 
information requirements and duplication by industry and public 
sectors. In addition, the Department has not identified any relevant 
Federal rules which duplicate, overlap or conflict with this rule.
    In compliance with Office of Management and Budget (OMB) 
regulations (5 CFR Part 1320) which implement the Paperwork Reduction 
Act of 1995 (44 U.S.C. Chapter 35), the information collection and 
recordkeeping requirements imposed by this order have been previously 
approved by OMB and assigned OMB Number 0581-0177.
    The Board's meetings were widely publicized throughout the tart 
cherry industry and all interested persons were invited to attend them 
and participate in Board deliberations. Like all Board meetings, the 
December 11-12, 1998, meeting was a public meeting and all entities, 
both large and small, were able to express their views on these issues. 
The Board itself is composed of 18 members, of which 17 members are 
growers and handlers and one represents the public. Also, the Board has 
a number of appointed committees to review program issues and make 
recommendations.
    This rule invites comments on revising the sampling techniques for 
whole and partial block diversions and for increasing the number of 
allowable partial block diversions under the Federal marketing order 
for tart cherries. All comments received will be considered in making a 
final decision on this action. Finally, interested persons are invited 
to submit information on the regulatory and informational impacts of 
this action on small businesses.
    After consideration of all relevant material presented, including 
the Board's recommendation, and other information, it is found that 
this interim final rule, as hereinafter set forth, will tend to 
effectuate the declared policy of the Act.
    Pursuant to 5 U.S.C. 553, it is also found and determined upon good 
cause that it is impracticable, unnecessary, and contrary to the public 
interest to give preliminary notice prior to putting this rule into 
effect and that good cause exists for not postponing the effective date 
of this rule until 30 days after publication in the Federal Register 
because: (1) This rule relaxes requirements by allowing growers the 
opportunity to divert more partial blocks and changes the sampling 
techniques for partial and whole block diversions to assure similar 
sample sizes regardless of orchard size; (2) this rule should be 
effective as soon as possible so growers can take advantage of these 
changes; (3) the Board unanimously recommended these changes at a 
public meeting and interested parties had an opportunity to provide 
input; and (4) this rule provides a 60-day comment period and any 
comments received will be considered prior to finalization of this 
rule.

List of Subjects in 7 CFR Part 930

    Marketing agreements, Reporting and recordkeeping requirements, 
Tart cherries.

    For the reasons set forth in the preamble, 7 CFR part 930 is 
amended 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. In Sec. 930.158, paragraphs (b)(2) and (b)(3) are revised to 
read as follows:


Sec. 930.158  Grower diversion and grower diversion certificates.

* * * * *
    (b) * * *
    (2) Whole block diversion. Based on maps supplied by the grower, a 
sampling procedure will be used to determine the amount of cherries in 
the orchard to be diverted. A block is defined as rows that run in the 
same direction, are similar in age, and have definable boundaries. The 
Board will require a number of tree sites to be sampled depending on 
the size of the block. A tree site is a planted tree or an area where a 
tree was planted and may have been uprooted or died. If a block has 5 
rows or less, or 200 or less tree sites, 3 rows would be randomly 
chosen to be sampled, if a block has 6 to 15 rows, or 201-400 tree 
sites, 4 rows would be randomly chosen to be sampled, and if a block 
has 16 or more rows and greater than 400 tree sites, 5 rows would be 
randomly chosen to be sampled. The Board's compliance officer will 
apply the sampling procedure (based on the number of rows or the number 
of tree sites) which results in the fewest number of tree sites 
required to be sampled. From each of the rows to be sampled, ten 
contiguous tree sites will be sampled. Only trees more than five years 
old will be harvested for the sample. For example, if it is determined 
that five rows are to be sampled, 10 contiguous tree sites in each of 
the five rows will be subject to harvest. Trees within the 10 sites 
which are more than five years old will be harvested. The harvested 
tonnage will be converted to a volume that represents the entire block 
of cherries. If, for example, a total of 4,600 pounds is harvested from 
the sample tree sites and this total is divided by 50 tree sites a 
yield of 92 pounds per tree site is obtained. To find the total yield 
for the block, the 92 pounds per tree site yield is multiplied by the 
880 tree sites that were mapped in the block and that equals 80,960 
pounds for that block. The compliance officer would be allowed access 
to the block to oversee the sampling process and to confirm that the 
block has been diverted.
    (3) Partial block diversion. Partial block diversion will also be 
accomplished using maps supplied by the grower. Sampling will be done 
as in whole block diversion except that only partial blocks would be 
selected and sampled. Growers may divert up to five partial blocks, or 
50 percent of a grower's total number of blocks per year. Such block(s) 
must be mapped and will be sampled as described under whole block 
diversion. Rows used in partial block diversion must be contiguous.
* * * * *
    Dated: June 1, 1999.
Bernadine M. Baker,
Acting Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 99-14310 Filed 6-4-99; 8:45 am]
BILLING CODE 3410-02-U