[Federal Register Volume 64, Number 181 (Monday, September 20, 1999)]
[Rules and Regulations]
[Pages 50745-50748]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-24437]



[[Page 50745]]

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 930

[Docket No. FV99-930-2 FIR]


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: Final rule.

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SUMMARY: The Department of Agriculture (Department) is adopting, as a 
final rule, without change, the provisions of an interim final rule 
revising the sampling techniques for whole and partial block diversions 
and increasing the number of allowable partial block diversions under 
the Federal marketing order for tart cherries. This rule continues in 
effect making 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).

EFFECTIVE DATE: October 20, 1999.

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 complying 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; or E-mail: Jay.G[email protected].

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 continues in effect modifications to the handling 
regulations that revise 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 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 diversion.
    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. Prior to the issuance of the interim final rule published 
June 7, 1999, (64 FR 30229), Sec. 930.158 specified that, if a block 
had 5 rows or less, 3 rows were randomly chosen to be sampled. If a 
block had 6 to 15 rows, 4 rows were randomly chosen to be sampled. If a 
block had 16 or more rows, 5 rows were randomly chosen to be sampled. 
The rows chosen had to be contiguous, and 10 contiguous tree sites were 
sampled from each row.
    During its review of the grower diversion program the Board 
concluded that the sampling procedure mentioned above, which is based 
solely on the number of rows in a block, required more trees to be 
sampled on smaller blocks or on blocks that had shorter rows than was 
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. 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

[[Page 50746]]

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 revised sampling procedure continues in effect 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 old sampling criteria, if a grower had 10 
rows with 20 tree sites per row (10  x  20 equals 200 tree sites), 4 
rows would have to be sampled. Under the revised rules in effect, only 
3 rows would have to be sampled since there are 200 tree sites.
    As 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 continue to 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 trees). If a total of 4,600 pounds is harvested 
from the sample trees 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 trees 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 that continue in effect 
increased 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. Section 930.158(b)(3) previously 
limited the number of partial block diversions to one partial block 
diversion for each grower per year. This limitation was intended to 
alleviate 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 had 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 believed that its administrative 
costs would not increase materially by making this change. Because this 
method of diversion allows growers to divert cherries based on quality, 
the Board further believed that the ability to take advantage of 
partial block diversion on a larger scale would continue to 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 
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 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.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at the 
following website: http://www.ams.usda.gov/fv/moab.html. Any questions 
about the compliance guide should be sent to Jay Guerber at the 
previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    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 1994/95 through 1998/99, approximately 90 percent of 
the U.S. tart cherry crop, or 288.3 million pounds, were processed 
annually. Of the 288.3 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 was 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

[[Page 50747]]

can then 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 diversion.
    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. Prior to the issuance of the interim final rule published 
June 7, 1999, (64 FR 30229), Sec. 930.158 specified that, if a block 
had 5 rows or less, 3 rows were randomly chosen to be sampled. If a 
block had 6 to 15 rows, 4 rows were randomly chosen to be sampled. If a 
block had 16 or more rows, 5 rows were randomly chosen to be sampled. 
Ten contiguous tree sites were sampled from each row.
    During its review of the grower diversion program, the Board 
concluded that the sampling procedure mentioned previously, which was 
based solely on the number of rows in a block, required more trees to 
be sampled on smaller blocks or on blocks that had shorter rows than 
was 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 revised sampling procedure continues in effect 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 that continue in effect 
increased 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. Section 930.158(b)(3) previously 
limited the number of partial block diversions to one partial block 
diversion for each grower per year. This limitation was intended to 
alleviate 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 
believed that the ability to take advantage of partial block diversion 
on a larger scale would continue to 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 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 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 that 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 whom 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.
    An interim final rule concerning this action was published in the 
Federal Register on June 7, 1999. The Board's staff mailed copies of 
the rule to all Board members and cherry handlers. In addition, the 
Office of the Federal Register made the rule available through the 
Internet. That rule provided a 60-day comment period that ended August 
6, 1999. No comments were received.
    After consideration of all relevant material presented, including 
the Board's recommendation, and other information, it is found that 
finalizing this interim final rule, as published in the Federal 
Register (64 FR 30229), will tend to effectuate the declared policy of 
the Act.

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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

    Accordingly, the interim final rule amending 7 CFR part 930 which 
was published at 64 FR 30229 on June 7, 1999, is adopted as a final 
rule without change.

    Dated: September 14, 1999.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 99-24437 Filed 9-17-99; 8:45 am]
BILLING CODE 3410-02-P