[Federal Register Volume 65, Number 218 (Thursday, November 9, 2000)]
[Proposed Rules]
[Pages 67585-67598]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-28660]
[[Page 67583]]
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Part IV
Department of Agriculture
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Agricultural Marketing Service
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7 CFR Part 923
Sweet Cherries Grown in Designated Counties in Washington; Recommended
Decision and Opportunity To File Written Exceptions to Proposed
Amendment of Marketing Agreement No. 134 and Marketing Order No. 923;
Proposed Rule
[[Page 67584]]
Federal Register / Vol. 65, No. 218 / Thursday, November 9, 2000 /
Proposed Rules
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 923
[Docket Nos. 99AMS-FV-923-A1; FV00-923-1]
Sweet Cherries Grown in Designated Counties in Washington;
Recommended Decision and Opportunity To File Written Exceptions to
Proposed Amendment of Marketing Agreement No. 134 and Marketing Order
No. 923
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule and opportunity to file exceptions.
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SUMMARY: This recommended decision invites written exceptions on
proposed amendments to the marketing agreement and order for sweet
cherries grown in six counties in eastern Washington. Six proposals
were submitted by the Washington Cherry Marketing Committee
(Committee), which is responsible for local administration of the
order. The Committee's proposals would: increase the production area to
cover the area in the State of Washington east of the Cascade Mountain
Range and allow for special purpose shipments of cherries to packing
operations outside the production area; increase representation on the
Committee by adding an additional handler member; provide for late
payment and interest charges on delinquent assessments; authorize
establishment of container marking requirements; and allow prospective
Committee members and alternates to qualify for membership by filing a
single form. The Fruit and Vegetable Programs (F&V) of the Agricultural
Marketing Service (AMS) proposed the establishment of tenure
requirements for Committee members and to require that continuance
referenda be conducted every six years. AMS also proposed to allow such
changes as may be necessary to the order to conform with any amendment
that may result from the hearing. These proposals are intended to
improve the operation and functioning of the Washington sweet cherry
marketing order program.
DATES: Written exceptions must be filed by December 11, 2000.
ADDRESSES: Written exceptions should be filed with the Hearing Clerk,
U.S. Department of Agriculture, room 1081-S, Washington, DC 20250-9200,
Facsimile number (202) 720-9776. Four copies of all written exceptions
should be submitted and they should reference the docket numbers and
the date and page number of this issue of the Federal Register.
Exceptions will be made available for public inspection in the Office
of the Hearing Clerk during regular business hours, or can be viewed
at: http://www.ams.usda.gov/fv/moab.html.
FOR FURTHER INFORMATION CONTACT: Kathleen M. Finn, Marketing
Specialist, Marketing Order Administration Branch, Fruit and Vegetable
Programs, AMS, USDA, room 2525-S, Washington, D.C. 20250-0237;
telephone: (202) 720-2491, or Fax: (202) 720-5698.
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: [email protected].
SUPPLEMENTARY INFORMATION: Prior document in this proceeding: Notice of
Hearing issued on November 3, 1999, and published in the November 8,
1999, issue of the Federal Register (64 FR 60733).
This administrative action is governed by the provisions of
sections 556 and 557 of Title 5 of the United States Code and,
therefore, is excluded from the requirements of Executive Order 12866.
Question and Answer Overview
What circumstances led to this recommended decision?
The Washington Cherry Marketing Committee (Committee), which is
responsible for local administration of the marketing order,
recommended amending the current order. A hearing was held on these
proposed amendments in Yakima, Washington, on November 16, 1999.
The Washington Cherry Marketing Order was created in 1957 and has
never been amended. Since that time, cherry production has dramatically
increased in areas outside the current 6-county production area.
The marketing order's primary authority is the use of grade, size
and container regulations for fresh shipments of cherries from the
production area. The purpose of these regulations is to ensure the
shipment of high quality cherries. The order has allowed the industry
to develop the reputation for shipping a quality product, which has
allowed producers to ship and sell sweet cherries in a more stable
marketplace.
The primary purpose of this proceeding is to expand the production
area to include the other sweet cherry producing counties in Washington
and maintain the high quality image of the Washington sweet cherry.
This proceeding would also allow shipments of cherries outside the
production area for packing, to accommodate growers in the proposed
production area who have their cherries packed in Oregon.
The Committee also recommended increasing representation on the
Committee, allowing for late payment and interest charges on unpaid
assessments, authorizing container marking requirements and other
administrative changes.
AMS proposed establishing a limit on the number of consecutive
terms a person may serve as a member on the Committee and requiring
that continuance referenda be conducted every six years to ascertain
industry support for the order.
Who would be impacted by this action?
Growers and handlers of sweet cherries in the current and proposed
production area would be affected by these amendments. Handlers would
be required to pay assessments based on the amount of cherries handled.
The current assessment rate is 75 cents per ton of cherries handled.
Handlers would also be required to abide by the regulations in effect
under the order which includes obtaining Federal/State inspections on
all cherries to ensure that marketing order requirements are met.
Current regulations specify certain size, maturity and pack
requirements and are based on the State of Washington grade standards.
Field-run cherries from Washington growers sent to Oregon packers
also would have to meet these requirements as well.
How can I comment on these proposals?
Written exceptions should be filed with the Hearing Clerk, U.S.
Department of Agriculture, room 1081-S, Washington, DC 20250-9200,
Facsimile number (202) 720-9776. Four copies of all written exceptions
should be submitted and they should reference the docket numbers and
the date and page number of this issue of the Federal Register.
Exceptions will be made available for public inspection in the Office
of the Hearing Clerk during regular business hours, or can be viewed
at: http://www.ams.usda.gov/fv/moab.html.
All exceptions will be considered before issuing any final
decision.
[[Page 67585]]
What are the next steps after the recommended decision?
USDA will evaluate the exceptions and, if it is decided to continue
with the proceeding, a Secretary's Decision and Referendum Order will
be issued. A producer referendum will be conducted and will include all
affected producers. The referendum will be conducted by mail ballot,
and producers can vote on each material issue presented. There are
seven material issues in this recommended decision.
To become effective, the amendments require approval of two-thirds
of the producers voting in the referendum or approval by two-thirds of
the volume of production represented by the producers voting in the
referendum. If the vote favors any or all of the amendments, the
Department prepares a final order effectuating the amendments.
Preliminary Statement
Notice is hereby given of the filing with the Hearing Clerk of this
recommended decision with respect to the proposed amendment of
Marketing Agreement No. 134 and Marketing Order No. 923, regulating the
handling of sweet cherries grown in designated counties in Washington,
(hereinafter referred to as the order), and the opportunity to file
written exceptions thereto.
This action is issued pursuant to the provisions of the
Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601
et seq.), hereinafter referred to as the ``Act,'' and the applicable
rules of practice and procedure governing the formulation of marketing
agreements and orders (7 CFR Part 900).
The proposed amendment of Marketing Agreement No. 134 and Order No.
923 is based on the record of a public hearing held in Yakima,
Washington, on November 16, 1999. Notice of this hearing was published
in the Federal Register on November 8, 1999. The notice of hearing
contained proposals submitted by the Committee and the Department.
The Committee's proposed amendments would: Increase the production
area to cover the area in the State of Washington east of the Cascade
Mountain Range, redefine the districts currently established under the
order and allow for special purpose shipments of cherries to packing
operations outside the production area; Increase representation on the
Committee by adding an additional handler member; Provide for late
payment and interest charges on delinquent assessments; Authorize
establishment of container marking requirements; and Allow prospective
Committee members and alternates to qualify for membership by filing a
single form.
Also, AMS proposed to establish a limit on the number of
consecutive terms a person may serve as a member on the Committee and
to require that continuance referenda be conducted on a periodic basis
to ascertain industry support for the order.
At the conclusion of the hearing, the Administrative Law Judge
fixed January 20, 2000, as the final date for interested persons to
file proposed findings and conclusions or written arguments and briefs
based on the evidence received at the hearing. None were filed.
Material Issues
The material issues of record addressed in this decision are as
follows:
(1) Whether to increase the production area to cover the area in
the State of Washington east of the Cascade Mountain Range; to redefine
the districts established under the order; and to authorize special
purpose shipments, with appropriate safeguards, allowing movement of
cherries to packing facilities outside the production area;
(2) Whether to increase representation on the Committee by adding
one additional handler member;
(3) Whether to authorize the Committee, with USDA approval, to
collect late payment and interest charges on delinquent assessments;
(4) Whether to authorize the Committee, with USDA approval, to
establish container marking requirements;
(5) Whether to authorize Committee nominees to qualify as a member
or alternate by filing a written acceptance of willingness to serve
prior to the selection;
(6) Whether to establish a limit on the number of consecutive terms
a person may serve as a member on the Committee; and
(7) Whether to require that continuance referenda be conducted on a
periodic basis to ascertain industry support for the order.
Findings and Conclusions
The findings and conclusions on the material issues, all of which
are based on evidence presented at the hearing and the record thereof,
are:
Material Issue Number 1
The definition of production area under Sec. 923.4 should be
amended to include the counties of Okanogan, Chelan, Kittitas, Yakima,
Klickitat in the State of Washington and all of the counties in
Washington lying east thereof and Sec. 923.14 should be amended to
include the additional counties in the two districts established under
the order. In addition, Sec. 923.54 should be amended to authorize
special purpose shipments, with appropriate safeguards, allowing
movement of cherries to packing operations outside the production area.
Currently, the production area includes only the counties of
Okanogan, Chelan, Douglas, Grant, Yakima and Benton in the State of
Washington. District 1 includes the counties of Chelan, Okanogan,
Douglas and Grant. District 2 includes the counties of Yakima and
Benton. There are no provisions in the current order that authorize
uninspected cherries to be shipped outside the production area for
packing.
The marketing order was promulgated in 1957. At that time, the
primary objective of the order was to provide consumers with a uniform
product so that buyers were assured of quality. The order has never
been amended. Since that time, many changes have occurred in the sweet
cherry industry. New areas of production have developed and marketing
practices have changed. For example, Franklin County is not currently
regulated under the marketing order, but reports indicate that sweet
cherry trees have been planted in that county in recent years. This is
true in other non-regulated counties as well. If 12 counties in the
State of Washington are producing cherries in significant volume, and
only 6 are regulated under the order, inconsistencies in quality could
occur which could impact the current high quality image of Washington
sweet cherries. The proposed amendment intends to update the order to
reflect this change. The proposed amendment also would redefine the
districts established under the order to include the new counties in
the existing districts.
In addition, many of the cherries grown in the counties proposed to
be added to the production area are currently packed in Oregon. If the
production area is expanded to include these counties, it is
recommended that sweet cherry shipments be authorized outside the
production area to these packing facilities for preparing for market.
This would be done under the special purpose authority contained in
Sec. 923.54 of the order. Grower/handlers could deliver cherries to
those Oregon packing operations that agree to abide by the marketing
order requirements for such cherries, including obtaining inspections
and paying assessments. The Committee would establish
[[Page 67586]]
safeguards to ensure that marketing order requirements are being met.
Expansion of Production Area
When the order was created in 1957, sweet cherries were primarily
grown in only 6 counties in the State of Washington. The 6 counties
that are currently regulated are Okanogan, Chelan, Douglas, Grant,
Benton and Yakima. The 14 additional counties proposed for inclusion
are Kittitas, Klickitat, Ferry, Stevens, Pend Oreille, Lincoln,
Spokane, Adams, Whitman, Franklin, Walla Walla, Columbia, Garfield and
Asotin.
Cherry production has dramatically increased in areas within the
State of Washington that are outside the current production area. As
more land has come into irrigation and farmers look for alternative
crops to grow, sweet cherry production is expected to continue to
increase in areas outside the current production area.
The total production of sweet cherries in Washington was reported
by the National Agricultural Statistics Service (NASS), USDA to be
96,000 tons in 1998 and 95,000 tons in 1997. Production by county is
not available. However, NASS does report production information by
Fruit Reporting Districts and this information is available annually
for 1993 through 1997.
The West Fruit Reporting District produces a minimal amount of
sweet cherries (50 tons per year) and is not proposed to be included in
the order's production area. In addition to the low level of
production, testimony revealed that, due to weather conditions, it
would be unlikely that cherries could be commercially produced in
significant amounts west of the Cascade Mountain Range in Washington.
Average production in this area is 50 tons per year. Testimony
indicated that excessive rain causes serious quality problems with
sweet cherries, such as cracking. Generally, weather conditions in
eastern Washington are more favorable for growing sweet cherries, as
well as other horticultural crops.
The Mid-Columbia Fruit Reporting District includes the counties of
Wahkiakum, Cowlitz, Clark, Skamania, and Klickitat. These counties
produced an average of 1,550 tons during the 1993 though 1997 seasons.
Only Klickitat County would be included in the proposed regulated area.
The other four counties are in the western part of the State and have
minimal sweet cherry production and no potential for significant
production. These counties not included in the proposed production area
have weather conditions similar to the counties in the West Fruit
Reporting District.
The Wenatchee Fruit Reporting District includes the counties of
Okanogan, Chelan, and Douglas. This is one of the two biggest sweet
cherry producing districts with an average production of 34,360 tons
from 1993 through 1997. These three counties are currently regulated
under the federal marketing order.
The Yakima Valley Fruit Reporting District is the other large sweet
cherry producing district with an average production of 35,830 tons
from 1993 through 1997. Yakima County is currently regulated, while
Kittitas County is proposed for inclusion in the regulated area.
The Columbia Basin Fruit Reporting District includes the counties
of Grant, Adams, and Franklin. Grant is currently regulated under the
federal marketing order, while Adams and Franklin counties are proposed
additions to the regulated area. The Columbia Basin Fruit Reporting
District averaged 3,410 tons annually over the past 5 seasons.
The Northeast Fruit Reporting District is made-up of Ferry,
Stevens, Pend Oreille, Lincoln, and Spokane counties. The average
annual production from this fruit-reporting district is 100 tons. All
of these counties would be included in the proposed production area.
The Southeast Fruit Reporting District is comprised of Whitman,
Walla Walla, Columbia, Garfield, and Asotin counties. Average
production from 1993 through 1997 for this fruit-reporting district was
100 tons. Again, the proposed production area would include all of
these counties.
Of the 14 counties that are proposed to be added to the marketing
order, 10 currently produce cherries (Franklin, Klickitat, Walla Walla,
Spokane, Stevens, Asotin, Lincoln, Kittitas, Adams, and Whitman).
Production of cherries is not shown for the counties of Ferry, Pend
Oreille, Columbia, and Garfield.
Testimony indicated that it is likely for these current non-
producing counties to produce cherries in the future. One grower
testified that there are newly planted cherry orchards in Pend Oreille,
one of the counties proposed to be in the expanded production area,
that currently lists no commercial production. Testimony indicated that
these four counties with no current statistics on cherry orchards,
could produce cherries in significant volume in the future. The
climatic conditions in those counties have potential for future growth.
Additional testimony revealed that cattle and wheat farmers in these
areas are looking for alternative crops to enhance their operations and
cherries could be a reasonable choice.
As discussed later in this decision, the Committee considered
various alternatives and concluded that the proposal it submitted on
the expansion of the production area is the most reasonable
alternative. The proposed production area is the smallest regional
area, which is practicable, while maintaining program effectiveness.
Testimony revealed that Washington cherries have a very positive
image to buyers and consumers. When purchases are made of Washington
cherries, the buyer does not necessarily know if the cherries originate
from counties under the marketing order or not. If one county ships an
inferior cherry, the entire state's image could be impacted. Testimony
indicated that most of the facilities that pack Washington cherries
(both those inside and outside the production area) already pack to the
marketing order requirements. However, without modifying the order, a
greater possibility exists for more cherries being shipped of an
inferior quality. Testimony further indicated that a grower's success
is partly based on the quality of fruit delivered. As production levels
continue to increase, the value of maintaining a high quality image
will assist growers from encountering decreasing prices. The marketing
order assists all growers in that handlers prepare their cherries to a
certain quality level, which helps to maintain price levels.
Testimony was received at the hearing on the costs associated with
the proposed amendments. The current assessment of 75 cents per ton
comprises less than 1 percent of total production costs. The 1999-2000
budget for the Committee is $62,815, of which $3,388 is earmarked for
compliance efforts. Testimony indicated that increased compliance and
administrative costs necessary to monitor this proposal would not be
significant. Testimony further indicated that the annual assessment
could even be reduced due to additional cherries being assessed with
the expansion of the production area. Testimony at the hearing
indicated that the benefits of strengthening the market would outweigh
any increase in costs. Adversely, if the production area is not
redefined, testimony indicated that the Washington cherry image could
be harmed, as more and more areas are growing cherries. In addition,
indications are that a large number of non-bearing acres are coming
into production inside and outside the current production area. Adding
to the
[[Page 67587]]
increase in production are growers of other crops, such as grain and
apples, looking for alternative crops to grow in order to supplement
incomes. Sweet cherries are an option these growers consider.
Applying grades and standards to the new production areas should
provide benefits to producers. The grades and standards allow small
producers the opportunity to develop a reputation for producing and
delivering a consistent, high quality product. These grades and
standards provide incentives and rewards for the production of high
quality product. In addition, the establishment of uniform grades and
standards across all the production areas provides a level field for
competition among both small and large growers. Testimony indicated
that as production increases, quality issues become more important.
Production is expected to increase in excess of 100,000 tons for the
first time in the industry's future.
As an example of the impact inconsistent quality can have on a
market, testimony was presented on the Rainier cherry market. Although
Rainier cherries are included in the marketing order, they were
specifically exempt from quality requirements until a few years ago.
Some handlers packed high quality Rainier cherries and received a
premium price. When other growers and handlers realized the acceptance
of the Rainier, various ranges of quality were shipped in anticipation
of receiving a premium price. However, buyers became reluctant to
purchase Rainier cherries due to inconsistent quality. The Committee
recommended minimum quality requirements for Rainier cherries which
were established by regulation under the order. Assurance of consistent
quality has resulted in the Rainier cherry market becoming more stable,
and Rainiers are again considered a premium product.
The Washington cherry market distinguishes itself from competitors.
More product is available from Washington than the other cherry
producing States. The Washington cherry market is more diverse and
national in scope, and testimony indicated that buyers have confidence
in Washington sweet cherries due to consistent quality. Testimony
revealed that this distinction is a direct result of the establishment
of minimum quality requirements under the marketing order.
Testimony was received from a cooperative cherry handler that
represents 108 growers, 27 of which are located in the proposed
production area (the balance are in the current production area.) This
handler testified that his company has two packing facilities, one
inside the current production area and one in the proposed production
area. It was this handler's position that its customers and growers
must have confidence in their ability to pack a high quality consistent
product.
The witness testified that bringing all his growers under the
marketing order would provide better returns for these growers and help
bolster the image of the Washington sweet cherry. He stated that
implementation of these proposals would level the playing field by
eliminating confusion and creating more orderly marketing. This handler
would anticipate no significant additional costs as his company already
packs all cherries received to the marketing order's minimum quality
requirements. It was this handler's position that the benefits would
outweigh the costs to cherry growers.
This handler stated that quality issues are foremost to the
industry and equate to buyer confidence. Repeat business is critical to
the cooperative and any bad perceptions could be detrimental to future
business. If all major cherry producing counties were required to
maintain the same quality requirements, consistency in quality would
prevail. With increasing levels of production in Washington, other U.S.
states and in foreign countries, quality becomes more and more
important. Consumers view Washington cherries as a premium preferred
product and this positive image could suffer if quality is not
maintained.
When regulations are in place, all cherries in the production area
are required to be inspected and certified as meeting established
requirements. Testimony indicated that increased costs associated with
more cherries being inspected would be offset by consistent quality and
a stable marketplace. Inspection costs are discussed in detail later in
this document.
Production has and continues to increase. The increased production
is coming from the traditional growing areas in addition to the new
production areas. The peak shipping week occurs during the last week of
June. With new production and the plantings of late-season varieties of
sweet cherries, the marketing window for shipping Washington sweet
cherries is expanding into August.
Minimum quality and size standards in the proposed production area
would maintain the integrity of the product so that the commodity's
overall quality image is not diminished by a low quality sample. The
principal objective of a grading system is to make the market work more
efficiently. Minimum quality and size requirements would improve
information between buyers and sellers. Contracts could be made based
on grade specifications, and buyers need not personally inspect each
lot of product. Standardization of quality and size reduces uncertainty
between buyers and sellers, and this helps reduce marketing costs. The
goal of an effective grading system is to improve quality and size.
Minimum quality and size standards would help ensure that substandard
product does not find its way to the market and destroy consumer
confidence and harm producer returns. Cherries that do not make the
specified grade and size requirements can be shipped to processing
outlets.
Record evidence supports expanding the production area to include
all counties in the State of Washington east of the Cascade Mountain
Range.
Redefining Districts To Include Expanded Production Area
For purposes of allocating Committee membership, the production
area is divided into two geographic districts. If the production area
is expanded, it will be necessary to incorporate the additional
counties into the districts currently established under the order. The
Committee discussed dividing the production area into three districts
and distributing the counties and membership across these districts.
The Committee was concerned that this would entail increasing Committee
membership by more than one handler member as proposed and discussed in
Material Issue No. 2. The record indicated that the Committee believed
a 16 member Committee would be the most effective. Therefore, it was
decided to distribute the new counties proportionately between the two
existing districts. District 1 is currently composed of the counties of
Chelan, Okanogan, Douglas and Grant. This proposal adds the counties of
Lincoln, Spokane, Pend Oreille, Stevens and Ferry. District 2 is
currently composed of the counties of Yakima and Benton. This proposal
adds the counties of Kittitas, Klickitat, Adams, Franklin, Walla Walla,
Whitman, Columbia, Garfield and Asotin.
The proposed District 1 encompasses the northern part of the
production area and District 2 encompasses the southern part. In 1997
production in proposed District 1 was approximately 44,300 tons of
sweet cherries and in proposed District 2, 45,500 tons. In addition,
the tonnage packed in each proposed district is about the same.
[[Page 67588]]
Record evidence supports redefining the districts to incorporate
the additional counties into the currently established districts in the
order.
Authority To Deliver Cherries to Packing Facilities Outside the
Production Area
The term ``handle'' under Sec. 923.13 means to sell, consign,
deliver, or transport cherries or cause the sale, consignment,
delivery, or transportation of cherries in the current of commerce from
any point within the production area to any point outside. All cherries
``handled'' must meet marketing order requirements, but the
requirements can be waived for special purpose shipments which are
defined in Sec. 923.54 of the order. The Committee has proposed adding
as ``special purpose shipments'' the authority to ship cherries outside
the production area for grading or packing.
The Committee has been discussing amending the order for many
years. In 1990, the subcommittee appointed to study the expansion of
the production area, discussed expanding the production area with
producers located outside the production area. Out of these
discussions, it was determined that if the production area was
expanded, the authority to grade and pack outside the production area
was also needed in order to allow many growers in the proposed
production area to continue having their cherries packed in Oregon.
This would help avoid financial hardships for these growers by
maintaining continuity in the packing of their cherries.
A grower/handler from Oregon who does pack Washington cherries
testified that some growers who are in the proposed production area
have always had their cherries packed at plants outside the production
area. His company has operated an orchard at Dallesport, Washington for
over 17 years and has always packed the fruit in The Dalles, Oregon.
This witness testified that much is invested in his facilities and it
would be an economic hardship not to be able to pack and ship his fruit
at his own plant. This is a good example of why the proposals for
expansion of the production area and shipments outside the production
area for packing should be considered as one material issue. This
situation applies to many other growers in Dallesport and White Salmon,
Washington. Expenses for growers could be dramatically increased if
they are required to change their packing facilities to those that are
farther from their orchards but in the production area. The four
closest packing operations to Dallesport, Washington are in The Dalles,
Oregon. The closest packing facility in Washington to that growing area
is in Yakima, which is over 50 miles away.
In addition to proximity to their orchards, there are other reasons
growers select certain packing facilities. Many growers select packers
based on the quality of pack, the packinghouse image and/or whether or
not the packing facility is a cooperative. These options for growers
would be limited if they were no longer able to have their cherries
packed in Oregon.
There are approximately 75 packing operations in the current
production area and two additional packing houses in the proposed
production area. There are four packing operations in Oregon that pack
Washington cherries for grower/handlers. Testimony indicated that
existing packing facilities in the State of Washington could have
difficulty handling the volume of Washington cherries if the production
continues to increase. The proposal to allow shipments of Washington
cherries outside the production area for packing would specifically
address this issue. This proposal would provide flexibility in moving
product in and out of the marketing order production area while
ensuring that quality objectives are not compromised.
WSDA currently has an agreement with the Oregon Department of
Agriculture covering the border area between both states, namely in the
Bingen, Washington area, where the Oregon Department of Agriculture
conducts inspections to Washington standards and marketing order
specifications, using appropriate Washington certificates. Testimony
indicated this agreement works well, as it assists the industry in
supplying quality inspections in that area.
Because of the agreement with the Oregon Department of Agriculture,
there is assurance that any Washington product that is inspected by the
Oregon Department of Agriculture is inspected to Washington standards
or to Washington marketing order requirements. There is documentation
that verifies product inspections and this process has proven to be
successful in this area. Testimony indicated that the inspection office
does not envision any oversight burden imposed by these proposals that
it cannot meet.
Safeguard provisions are incorporated into this proposal to ensure
compliance with the proposal to authorize shipments outside the
production area. This would be done under the special purpose shipment
authority contained in Sec. 923.54 of the order. Grower/handlers could
deliver cherries to those Oregon packing operations that agree to abide
by the marketing order requirements for such cherries. The Committee
would establish additional safeguards to ensure that marketing order
requirements are being met. Although no specific procedures have been
developed as yet, such information may include a requirement that
packing facilities that grade and pack cherries outside the production
area apply to the Committee and provide pertinent information necessary
to safeguard marketing order provisions. If a packing facility does not
abide by applicable requirements, the committee can rescind their
agreement and Washington cherries could not be delivered to that
facility.
The WSDA assists in monitoring for compliance with the marketing
order and would continue to do so. The WSDA provides the Committee with
copies of all Federal/State inspection note sheets. If WSDA notifies
the Committee of a potential marketing order violation, the Committee
takes steps to ensure compliance. Compliance is currently not a problem
with the Committee.
The Committee proposal concerning this part of the amendment was
designed to address this specific situation involving the packing
facilities in Oregon. The proposed order language states that authority
for ``shipments of cherries for grading and packing to specified
locations outside the production area'' would be authorized. The
specified locations would include the areas where these packing
facilities are located in Oregon across the Washington border. This
amendment is intended to provide flexibility in addressing the current
situation of expanding the production area and to allow packing
facilities currently being used to pack Washington cherries to continue
to do so.
Record evidence supports authorizing shipments, with appropriate
safeguards, outside the production area for packing.
Combining Expansion of Production Area, Redefining Districts and
Shipments Outside the Production Area as One Issue
Record evidence supports that the proposals to expand the
production area, to redefine the districts and to authorize shipments
outside the production area for packing be considered as one votable
issue in a referendum. Evidence presented at the hearing demonstrated
that these proposals are inextricably intertwined and would cause
confusion in the referendum if not voted upon as a single issue. The
proposal to redefine the districts to allocate the new counties
[[Page 67589]]
between the existing districts obviously is only necessary if the
production area is expanded. Therefore, this proposal should be
combined with the proposal to expand the production area.
Regarding combining the proposals on the production area expansion
and the authority to authorize shipments of uninspected cherries
outside the production area for packing, these proposals are reliant on
each other and should be combined as one issue. Failure for both
aspects to pass in referendum could result in hardships for grower/
handlers, especially those grower/handlers who currently ship their
cherries to Oregon for packing. There are grower/handlers in the
proposed production area whose orchards are closer to packing plants in
Oregon than in Washington and who currently ship their cherries to
these plants for packing.
The record supports these proposed amendments. For the above
reasons, the proposal to amend Sec. 923.4 Production area by including
the counties of Okanogan, Chelan, Kittitas, Yakima, Klickitat in the
State of Washington and all of the counties in Washington lying east;
the proposal to amend Sec. 923.14 District by including the additional
counties under Districts 1 and 2; and the proposal to amend Sec. 923.54
Special purpose shipments to authorize special purpose shipments, with
appropriate safeguards, allowing movement of cherries to packing
operations outside the production area should be voted on in the
referendum as one material issue.
Material Issue Number 2
Section 923.20 should be amended to increase representation on the
Committee by adding one additional handler member representing District
1. In addition, Sec. 923.20 should be amended to provide equal grower
representation in each district.
The current 15-member Committee consists of four grower members
representing District 1, six grower members representing District 2,
two handler members representing District 1 and three handler members
representing District 2. All members have alternates. District 1
includes the counties of Chelan, Okanogan, Douglas, and Grant. District
2 includes the counties of Yakima and Benton. If the proposal to expand
the production area is implemented, District 1 would include the
counties of Chelan, Okanogan, Douglas, Grant, Lincoln, Spokane, Pend
Oreille, Stevens and Ferry. District 2 would include the counties of
Kittitas, Yakima, Klickitat, Benton, Adams, Franklin, Walla Walla,
Whitman, Columbia, Garfield and Asotin.
The Committee believes that producer representation in District 1
should remain at 4 members and District 2 should remain at 6 members. A
witness testified that the amount of tonnage produced is significantly
greater in District 2. However, significant quantities of cherries
produced in District 2 are packed and graded in District 1. It was
estimated that total product packed is nearly equal in both districts.
By adding one handler member to District 1, both districts would be
equally represented by 3 handler members.
Record evidence supports increasing the membership on the Committee
by one handler member. The Washington sweet cherry industry is growing.
Bearing acres and production are increasing and markets, including
exports, are expanding. Although the Committee's recommendation to
increase the number of Committee members by one initially related to
the expansion of the production area, the record testimony revealed
that the Committee would prefer to have an additional handler member
even if the production area is not expanded. Therefore, this material
issue is not tied to the expansion of the production area and should be
addressed and voted in the referendum on its own merits.
Increasing representation on the Committee would allow additional
input in Committee decisions. Having equal handler representation for
each district is reasonable considering that the volume handled is
similar in each district, whether or not the production area is
expanded.
The Committee discussed alternatives to address appropriate
representation and districting should the production area be expanded.
The Committee agreed that 16 members was an appropriate number for the
Committee to be most effective while adequately representing the
expanded production area. The alternatives are discussed in more detail
later in this document.
Further, an economic report submitted as evidence at the hearing
does not support the proponents' statement that the amount of tonnage
produced is significantly greater in District 2. The report shows that
under the current districts, District 1 has approximately 814 farms
growing sweet cherries on approximately 10,000 acres of land. In
District 2, approximately 621 farms produce sweet cherries on
approximately 9,141 acres of land.
In the proposed districts, District 1 would have approximately 870
farms growing cherries on 10,074 acres. District 2 would have
approximately 753 farms that grow cherries on approximately 11,560
acres of land. Production figures show that in 1997, production in
proposed District 1 was approximately 44,300 tons of sweet cherries and
in proposed District 2, production was approximately 45,500 tons.
These statistics indicate that volume of production between
Districts 1 and 2 is not significantly different in the current and
proposed districts. Record evidence revealed that District 2 has
slightly less growing acreage currently than District 1 and would have
slightly more if the proposal to expand the production area were
adopted. Based on record testimony, the Committee is striving for
handler representation based on the volume of cherries handled in each
district. The record indicated that the Committee intends that grower
representation be based on the volume of production for each district.
Since statistics show that production in the proposed districts would
be relatively the same, grower membership between districts should be
equal. Therefore, the record supports modifying the current
representation of 4 growers for District 1 and 6 for District 2 to 5
grower members and their respective alternatives per district.
The marketing order provides the authority to redefine the
production area districts and to reapportion the representation of any
district on the Committee. The Committee may recommend changes in
district representation if cherry production within the districts and
the production area shifts. These changes can be accomplished through
informal rulemaking.
Currently, 12 members are required to make a quorum under the 15-
member Committee. Also, 9 concurring votes are currently required to
pass any Committee action. A witness testified that quorum and
concurring voting requirements were not discussed at meetings when the
issue to increase membership was discussed. However, the current quorum
and voting numbers would still be considered a ``super'' majority
should the membership on the Committee increase by one handler member.
The witness indicated that the current requirements would be adequate
and no changes are being recommended to the quorum and voting
requirements.
Seemingly, record evidence suggests increasing representation on
the Committee by one handler member and providing for equal grower
representation in each district.
Material Issue Number 3
Section 923.41 should be amended to add authority to require
handlers to pay
[[Page 67590]]
late payment charges and/or interest on late assessment payments in
order to encourage timely remittance of assessments by handlers.
Currently, Sec. 923.41 requires handlers to pay to the Committee on
demand assessments on cherries received by the handler. There is no
provision for a late payment or interest charge.
Record testimony revealed that most handlers pay assessments
promptly and timely. However, the Committee's operating budget is
relatively small and late payments could be detrimental to the
operations of the Committee. Three marketing orders are administered by
one manager and share expenses in order to mitigate costs. The other
marketing orders are the Washington Apricot marketing order (Marketing
Order No. 922) and the Washington-Oregon Fresh Prune marketing order
(Marketing Order No. 924). Assessments collected under the sweet cherry
order represent 80 percent of the combined budgets. For example, the
1999-2000 total annual budget for sweet cherries is $62,815, while the
two other program budgets combined total $18,600. Testimony indicated
that even a few hundred dollars in late assessments could be
detrimental to the administration of the cherry program.
Testimony further indicated that failure to incorporate a charge
for late payment of assessments would not be equitable for handlers who
pay on time. These handlers would be financing Committee operations
while late paying handlers would benefit from the Committee programs.
Late payment and interest charges for delinquent assessments would
provide an incentive for handlers to pay on time. This would result in
fewer funds needed by the Committee for collection activities. Also,
the fees derived from late payment and interest charges would partially
compensate the Committee for its collection efforts.
The Committee envisions implementing the specifics of the late
payment and/or interest charges through informal rulemaking with the
Secretary's approval. This would allow the Committee to remain flexible
with the establishment of the interest and late payment charge. The
Committee anticipates that the billing statements would include a date
at which time a late payment charge of a specified amount would be
assessed. The statement would advise the handler that in addition to
the late payment charge, an interest payment of a certain percent on
the unpaid balance would be assessed each month thereafter. Testimony
indicated that an example of such charges would be similar to what
commercial businesses charge, such as a $25 late fee, and a one and a
half percent per month charge on the unpaid balance.
The Department agrees that authorizing late payment and interest
charges would encourage prompt payment and thereby, help ensure that
the Committee operates effectively. The annual sweet cherry budget is
small enough that even a few handlers paying late could disrupt
Committee operations.
Accordingly, record evidence supports this aspect of the proposal.
However, in the proposed amendatory language, a provision was included
stating ``the Committee may also recommend other methods of assessment
collection with the approval of the Secretary.'' Testimony revealed
that other methods of assessment collection would be filing liens
against handlers for failure to pay assessments or suing a handler in
small claims court for unpaid assessments.
There is no authority under the Act allowing the Committee to file
liens or sue in small claims court for unpaid assessments. Therefore,
this provision should not be included in the proposed amendment.
Material Issue Number 4
Section 923.52 should be amended to authorize the Committee to
establish container marking requirements.
Currently, the order provides the authority to fix the size,
capacity, weight, dimensions, or pack of containers that may be used to
ship fresh sweet cherries. The order does not include authority to
establish marking requirements.
Testimony indicated that, in the cherry industry, the customer
dictates specifications of products such as quality, packaging and
variety. The quality, size, container and pack requirements currently
authorized under the order address many of these preferences. These
provisions are used by the Committee and modified with industry changes
and customer preferences. They help to maintain a positive image for
Washington sweet cherries and stimulate repeat business. The proposal
to add the authority to implement marking requirements would add an
additional marketing tool for the Committee to continue meeting
customer needs.
Washington sweet cherry bearing acres are continually increasing,
which has resulted in increased production. Since 1959, the production
of sweet cherries has increased by over 500 percent. Production levels
are trending toward 100,000 tons in the near future. New national
markets have developed and exports now play an important role in the
marketing of sweet cherries. Exports represented 40 percent of fresh
sweet cherry shipments in 1998. In 1998, exports increased 35 percent
over the 1997 levels, achieving a new high of 28,560 tons.
Testimony revealed that two containers are primarily used in
packing sweet cherries currently. However, in response to customer
preferences, the industry is moving to multiple packaging and multiple
varieties of cherries. As packaging and varieties become more diverse
and production continues to increase, container markings are becoming
increasingly important.
In addition, product identification and origination becomes
increasingly important as more and more sweet cherries are shipped
greater distances nationally and to foreign markets. Testimony
indicated that many handlers currently mark their containers to meet
customer needs. However, uniform marking requirements would eliminate
confusion and ensure to customers that they are receiving the products
ordered. Testimony indicated that marking requirements that may be
recommended by the Committee are weights, growing areas and State of
origin.
For these reasons, the Committee believes that it is becoming more
important to denote product origination and varieties on packaging.
Testimony indicated that containers may need to be marked more
precisely in the future than just stating ``sweet cherries.'' Uniform
marking requirements would provide additional consistency in product
identification. This proposal is intended to provide that authority.
The proponents have recommended establishing the authority for
marking requirements under the marketing order. However, implementation
of any specific regulations would require a recommendation by the
Committee for informal rulemaking. The Committee wants to keep the
order language flexible enough so that the Committee could adapt and
modify marking requirements with changing needs and preferences of
customers.
Testimony indicated that no significant costs would be incurred if
this authority were implemented because handlers already have the
equipment to mark containers. Container markings are currently
accomplished by handlers on an individual basis. The benefits of this
proposed amendment would be in the form of uniform marking requirements
for Washington sweet cherries.
[[Page 67591]]
Although the Committee has not developed a specific type of marking
that would be recommended, adding the authority to establish marking
requirements in the future is reasonable. The authority for uniform
container marking requirements would further expand and complement the
current container and pack requirements already being used. The
Committee would discuss any recommended markings at meetings and vote
on support for a marking requirement. Therefore, record evidence
supports adding authority for container marking requirements to
Sec. 923.52.
Material Issue Number 5
Section 923.25 should be amended to authorize Committee nominees to
qualify as a member or alternate by filing a written acceptance of
willingness to serve prior to the selection.
The Committee consists of 15 members, each of whom has an
alternate. Ten members are growers and five are handlers. The term of
office for Committee members and alternates is two years, beginning on
April 1 and ending on March 31. Members and alternates serve in such
capacities for the term of office for which they were selected and
qualified until their respective successors are selected and have
qualified.
Currently, Committee nominations are made at the designated
meetings where elections are to be held. These meetings are required to
be held no later than March 1 of each year. Elected nominees for member
and alternate positions are required to furnish a background statement,
which is forwarded to the Secretary along with a list of nominees.
After being notified of the selection by the Secretary, the members and
alternates sign a written acceptance indicating their willingness to
serve on the Committee.
The proposal would delete the requirement that the selected member/
alternate file a written acceptance after notification of selection and
combine the acceptance letter with the background statement submitted
prior to the selection. The nominee would, in effect, be indicating
willingness to serve on the Committee prior to being selected.
Committee Form FV-23 is the Background Statement form. This form
allows the Committee and Secretary to determine a nominee's eligibility
to serve on the Committee by requiring information on the nominees'
experience in the sweet cherry industry. The time required to complete
this form is estimated to be five minutes. When nominated, the nominee
completes this form. If the nominees do not return these forms
promptly, delays can occur in submitting the nominee's names to the
Secretary for selection, which could have a negative impact on the
seating of the Committee.
The Acceptance Letter, currently signed after selection, merely
requires a signature from the person accepting the appointment.
Testimony indicated that there is no advantage to waiting for this form
to be signed by the selectee.
The Committee believes that combining these forms as one and
requiring submission at the time of nomination would be more efficient
than the current method. Testimony indicated that the nominee, in
effect, indicates willingness to serve on the Committee by accepting
the nomination and completing the background statement upon nomination.
By combining these forms into one and requiring the information at the
time of nomination, the Committee and Secretary know in advance that
the nominees are willing to serve on the Committee if selected.
Testimony indicated that there is no benefit in waiting for the
nominee to sign the Acceptance Letter after being selected. No negative
impacts are anticipated from implementing this proposal. However, the
benefits are that the nominees are only required to sign and deliver
one form. In addition, the Committee could obtain all pertinent
information well ahead of the time for seating of the new Committee,
thereby operating more efficiently.
The Department will submit the modified form to the Office of
Management and Budget (OMB) for approval. Current information
collection requirements for Part 923 are approved by OMB under OMB
number 0581-0133.
Accordingly, record evidence supports revising Sec. 923.25 of the
order.
Material Issue Number 6
Section 923.21 should be revised to establish a limit on the number
of consecutive terms a person may serve on the Committee. Currently,
the term of office of each member and alternate member of the Committee
is two years. There are no provisions related to tenure in the
marketing order. Members and alternates may serve on the Committee
until their respective successors are selected and have qualified.
The Department believes that all marketing order programs should
consider tenure requirements for committee membership as a part of any
amended order process. The Department believes that this provision
would increase industry participation on the Committee, provide for
more diverse membership, provide the Committee with new perspectives
and ideas, and increase the number of individuals in the industry with
Committee experience.
Experience with other marketing order programs suggests that a
period of six years would be appropriate. Since the current term of
office for members and alternates is two years, the Department is
proposing that no member serve more than three consecutive two-year
terms or a total of six years. This proposal for a limitation on tenure
would not apply to alternates. Once a member has served on the
Committee for three consecutive terms, or six years, the member would
sit out for one year before being eligible to serve as a member again.
The member could serve as an alternate during that time.
Witnesses presented testimony in opposition to this proposal.
Although the Committee agrees with the principal that outreach efforts
are important, the application of tenure could be problematic.
Testimony indicated that the sweet cherry producing area is rather
small in comparison to other fruit and vegetable growing areas, and
finding growers willing to serve on the Committee is difficult. In
addition, testimony further indicated that it is counterproductive to
require valuable members to step down when the current system is
working well.
Regarding diversity, testimony indicated that there are few diverse
individuals in the cherry industry and limiting tenure on the Committee
would make it challenging to maintain a diverse Committee membership
and to meet the Department's diversity goals. The Committee has
difficulty getting growers involved in Committee operations. Many
growers participate in the nomination meetings, but few volunteer to
participate as members or alternates. The Committee finds that the
industry members that do agree to serve bring knowledge and experience
to the Committee that would be difficult to replace.
Testimony indicated that the Committee would continue outreach
efforts to encourage diverse representation on the Committee. If the
proposal is implemented, the Committee supports that tenure should not
apply to alternates.
The Department believes, and experience with other marketing order
committees has demonstrated, that tenure requirements for committee
membership increases participation,
[[Page 67592]]
provides for more diverse committees, provides for different
perspectives, and increases the number of industry members with
Committee experience.
Therefore, record evidence supports establishing tenure
requirements for the Committee.
Material Issue Number 7
Section 923.64 should be amended to require that continuance
referenda be conducted every six years to ascertain industry support
for the order.
Currently, there is no provision in the marketing order that
provides for periodic continuance referenda.
The Department believes that producers should have an opportunity
to periodically vote on whether a marketing order should continue.
Continuance referenda provide an industry with a means to measure
producer support for the marketing order program. Experience has shown
that programs need significant industry support to operate effectively.
Under this proposal, the Department would consider termination of the
marketing order if less than two-thirds of those voting and less than
two-thirds of the volume represented in the referendum favored
continuance. This is the same as that for issuance of an order. As with
tenure, experience in recent years indicates that six years is an
appropriate period to allow producers an opportunity to vote for
continuance of the program. Therefore, the proposal sets forth that a
referendum would be conducted six years after the effective date of
this amendment and every sixth year thereafter.
Witnesses presented testimony in opposition to this proposal.
Testimony indicated that the industry currently has the ability to
request a continuance referendum at any time. The Committee believes
that requiring unnecessary referenda is costly and of little value to
the industry or the Department. The program has worked successfully
since 1957 and growers have not been against any major aspects of the
order since that time.
Testimony also indicated that requiring a continuance referendum
every six years would further impede participation on the Committee.
Based on record evidence, many industry members believed that the
process for conducting continuance referenda is similar to the
marketing order amendment process, in that a hearing would be required.
Contrary to formal amendment proceedings, continuance referenda do
not require a hearing. Most referenda are conducted by mail. All
growers in the production area would be sent a ballot and would be
asked, not required, to answer whether they support continuance of the
marketing order. The growers then send the ballot back to the
Department. That is the extent of grower responsibility in the
continuance referenda process. The Department prepares the ballot,
mails the ballots and tallies and publishes the results. The Committee
office does assist the Department in this process by providing a list
of growers eligible to vote in the referendum.
The Department believes that producers should have an opportunity
to periodically vote on whether the marketing order should continue.
Accordingly, the record evidence supports adding a requirement that
such referenda be conducted.
The Agricultural Marketing Service also proposed to make such
changes as may be necessary to the order to conform with any amendment
that may result from the hearing. The Department has identified no
necessary conforming changes.
Small Business Considerations
Pursuant to the requirements set forth in the Regulatory
Flexibility Act (RFA), the AMS has considered the economic impact of
this action on small entities. Accordingly, AMS has prepared this
initial regulatory flexibility analysis.
The purpose of the RFA is to fit regulatory actions to the scale of
business subject to such actions so that small businesses will not be
unduly or disproportionately burdened. Small agricultural producers
have been defined by the Small Business Administration (SBA) (13 CFR
121.201) as those having annual receipts of less than $500,000. Small
agricultural service firms, which include handlers regulated under the
order, are defined as those with annual receipts of less than
$5,000,000.
Interested persons were invited to present evidence at the hearing
on the probable regulatory and informational impact of the proposed
amendments on small businesses. The record indicates that growers and
handlers would not be burdened by any additional regulatory
requirements, including those pertaining to reporting and recordkeeping
as a result of these proposed amendments.
Marketing orders and amendments thereto are unique in that they are
normally brought about through group action of essentially small
entities for their own benefit. Thus, both the RFA and the Act are
compatible with respect to small entities.
The record indicates that there are approximately 75 handlers
currently regulated under Marketing Order No. 923. There are two
additional packing houses in the proposed production area that would be
considered handlers if the production area is expanded. There are four
packing operations in Oregon that pack Washington cherries for grower/
handlers. In addition, there are approximately 1,400 cherry growers in
the current production area. There would be approximately 200
additional growers if the production area is expanded as proposed.
In 1998, Washington produced 96,000 tons of sweet cherries. The
average price for fresh cherries in 1998 was $1,600 per ton. This
computes to approximate revenues for the 1998 crop of $153,600,000. The
record indicated that approximately 15 handlers handle the majority of
the crop and could be classified as large businesses. Thus, a majority
of sweet cherry handlers could be classified as small entities. The
same is estimated with regard to the packing houses in Oregon.
Dividing total production from 1998 by the number of growers in the
proposed production area, the average grower produces about 60 tons of
cherries annually. With an average price of $1,600 per ton for 1998
sweet cherries, average revenues would be $96,000. Thus, it is
reasonable to conclude that most sweet cherry growers are small
entities.
Industry Background
Sweet cherries rank second to apples as the most important fruit
grown in Washington, with a value of production of $128.7 million.
Washington growers produced 96,000 tons of sweet cherries in 1998,
which is 46 percent of the nation's total.
The varieties of sweet cherries subject to regulation under the
order are: Bing, Chelan, Lambert, Lapin, Rainier, and Sweetheart.
Shipping of these cherries generally begins around June 15 and usually
ends around August 15. The most active harvest period is from June 10
through July 20.
The order authorizes the use of grade, size and container
regulations for the fresh shipment of sweet cherries from the
production area. The regulations, specify certain size, maturity and
pack requirements. The current regulations are based on Washington
grade standards and apply to specific varieties. The purpose of these
regulations is to ensure the shipment of high quality cherries. The
order has allowed the industry to develop the reputation for shipping a
quality product, which has allowed producers to ship and sell fruit in
a more stable marketplace.
[[Page 67593]]
Washington is the leading producer of sweet cherries for fresh
market sale. Washington's main competitors in domestic fresh markets
are California and Oregon. From 1994 through 1998, Washington produced
an average of 55,600 tons per year. This represents 59 percent of the
total sweet cherries marketed fresh. California produced an average of
20,460 tons per year and Oregon produced 12,900 tons per year from 1994
through 1998.
Sweet cherries are also grown in Idaho, Montana and Utah, as well
as Michigan, New York and Pennsylvania. Bearing acreage figures are not
published for the States of Idaho and Montana. Utah's production area
totals 600 acres, and has been declining. Bearing acreage figures are
published for Michigan, New York and Pennsylvania, but the majority of
sweet cherries grown in those states are not sold in fresh markets. The
fruit in these States are produced and marketed during the summer
months each year. While these States compete with Washington, Oregon
and California in the marketing of fresh sweet cherries, their
production is relatively small.
From 1964 through 1998, total U.S. production of sweet cherries
increased 332 percent and fresh utilization increased 393 percent. This
suggests that fresh shipments have been growing in importance, while
the processing sector has remained relatively stable. Over the past
five seasons, 66 percent of Washington's production moved into fresh
markets.
Over the last 30 years, prices between the three primary growing
States have been very competitive. Prices in California, Washington and
Oregon have averaged $1,166, $1,028 and $798 per ton, respectively.
California prices are slightly higher than prices in Washington or
Oregon. One of the reasons that California prices average higher than
Washington's is that California shipments begin in the early part of
May, when competition in the fresh fruit market is limited. Washington
shipments do not start until the middle of June. Early-season shippers
generally receive a premium for their product on the fresh market.
Fresh prices for Washington sweet cherries receive a premium over
processing sweet cherries. From 1969 to 1998, fresh prices have
increased more than 350 percent. Fresh cherry prices were $350 per ton
in 1969 and were as high as $2,150 per ton in 1996. Prices were $1,600
per ton in 1998.
While California growers receive higher prices than Washington
growers on average, Washington's value of production is much greater
than California's or Oregon's. This is due to higher yields and larger
production levels in Washington. This likely indicates that Washington
growers have a comparative cost advantage over California or Oregon
growers. In 1998, Washington reported its highest value of fresh
production, $113.6 million. This compares to a 1998 value of fresh
production of $17.9 million for California and $22.6 million for
Oregon. The value of fresh production has increased more than 150
percent since 1991.
Exports play an important role in the marketing of Washington sweet
cherries. With increasing bearing acres and production levels trending
toward 100,000 tons in the near future, increasing levels of exports
can be anticipated. However, competition in the export markets is
expected to be high. California continues to export a large volume of
their increasing production. In addition, China is estimated to have
25,000 acres of cherries planted. Spain, Greece, Turkey, Iran, Lebanon,
Syria and some Eastern European countries have also increased
production levels. These countries do not import sweet cherries into
the U.S.
Exports of fresh Washington sweet cherries have been increasing, in
particular during the 1997 and 1998 seasons. Exports reached a high of
21,148 tons in 1997. In 1998, exports increased 35 percent over the
1997 levels, achieving a new high of 28,560 tons.
Export markets demand a high quality product. With a limited shelf
life, these fresh deliveries of sweet cherries require a high quality
product. The shipment of low quality product could ruin years of market
development in an export market. Grades and standards assure the
shipment of high quality fruit into export markets, and small growers
as well as large growers will benefit.
Production Area and Shipments Outside Production Area
When the marketing order was created in 1957, sweet cherries were
primarily grown in only 6 counties in the State of Washington. The 6
counties that are currently regulated are Okanogan, Chelan, Douglas,
Grant, Benton, and Yakima. The 14 additional counties proposed for
inclusion are Kittitas, Klickitat, Ferry, Stevens, Pend Oreille,
Lincoln, Spokane, Adams, Whitman, Franklin, Walla Walla, Columbia,
Garfield, and Asotin.
Cherry production has dramatically increased in areas within the
State of Washington that are outside the current production area. As
more land has come into irrigation and farmers look for alternative
crops to grow, sweet cherry production is expected to increase in areas
outside the current production area.
The proposed amendment to increase the production area to cover the
area in the State of Washington east of the Cascade Mountain Range, to
redefine the districts in order to include the additional counties and
to authorize special purpose shipments, with appropriate safeguards,
allowing movement of cherries to packing operations outside the
production area would improve the effectiveness of the marketing order
by ensuring that the major cherry producing counties in Washington are
covered under the marketing order. In addition, including counties with
potential to produce significant amounts of sweet cherries would ensure
that all major production would be covered under the marketing order in
the future. The proposed amendment would also benefit growers,
especially growers not currently regulated under the order, by allowing
many of these growers to continue shipping their cherries to Oregon for
packing.
The Committee has been discussing amending the order in this regard
for many years. In 1990, a subcommittee composed of small and large
growers and handlers was appointed to study the expansion of the
production area. The Committee discussed expanding the production area
with producers located outside the production area. Out of these
discussions, it was determined that if the production area was
expanded, the authority to grade and pack cherries outside the
production area was also needed in order to allow growers in the
proposed production area to avoid financial hardships by maintaining
continuity in the packing of their cherries.
In March 1998, the Committee recommended numerous amendments to the
marketing order, including covering the entire State of Washington in
the production area. In August 1999, the Committee recommended
modifying the recommendation on the production area proposal from
regulating the entire State to only including the eastern part of the
State.
Alternatives to the current proposal on the expansion of the
production area were considered by the Committee. These alternatives
were: (1) Including the entire State of Washington; (2) including the
States of Washington and Oregon; and (3) including the States of
Washington, Oregon, Idaho and Utah. Committee representatives
communicated with growers and handlers in these regions. Public
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meetings on the subject were publicized in these growing areas and
interested parties were encouraged to attend. Committee members also
attended grower meetings in these areas to discuss expansion of the
production area.
Regarding including the entire State of Washington, the Committee
determined that due to weather conditions, it would be unlikely that
cherries could be commercially produced in significant amounts west of
the Cascade Mountain Range in Washington. Average production in this
area is 50 tons per year. Testimony indicated that excessive rain
causes serious quality problems with sweet cherries, such as cracking.
Generally, weather conditions in eastern Washington are more favorable
for growing sweet cherries, as well as other horticultural crops.
Representatives from Idaho and Utah believed that their production
and marketing could be easily distinguished and segregated from
Washington and Oregon production. In addition, it was believed the
Idaho and Utah sweet cherry industry was not large enough to make an
impact on Washington cherries. Statistical data presented at the
hearing on the volume of cherries produced in Idaho and Utah supports
this belief.
Oregon's sweet cherry industry primarily borders the State of
Washington, but representatives from Oregon believed their industry
should be kept separate from the Washington industry. The record
evidence revealed that Oregon already has two organizations that
represent the interests of sweet cherry growers, the Oregon Sweet
Cherry Commission and the Wasco County Fruit and Produce League. These
organizations collect assessments based on cherry production. According
to record testimony, the Oregon growers did not see the need to form
another organization to protect their interests. In addition, testimony
indicated that Oregon growers did not want to become a minor part of
the Washington order.
An organization called the Northwest Cherry Growers also represents
the States of Washington, Oregon, Idaho and Utah. This group is
responsible for collecting assessments based on cherry tonnage and
directing promotion programs for sweet cherries grown in these four
states.
Based on record evidence, the Committee considered these various
alternatives and concluded that the proposal it submitted on the
expansion of the production area is the most reasonable alternative.
The proposed production area is the smallest regional area, which is
practicable, while maintaining program effectiveness.
The record revealed that the average cherry farm size in Washington
ranges from 3 or 4 acres to several hundred acres. The average farm is
approximately 40 acres. According to testimony, there are approximately
180 growers in the proposed production area that are larger that the
average farm. Some farms in the proposed production area, particularly
in Franklin County, are 50 to 200 acres. Although much of this acreage
is currently non-producing, testimony indicated that the potential
exists for significant production. Unlike the western part of the State
where significant production is not anticipated, if those areas with
significant production potential are not regulated, it could have a
detrimental impact on the favorable Washington sweet cherry quality
image.
Testimony was received at the hearing on the costs associated with
the proposed amendments. This testimony indicated that costs associated
with this proposal would be minor. The total annual cost of production
for a mature orchard is $7,413.06 per acre. The current assessment of
75 cents per ton comprises less than 1 percent of total production
costs. Any increase in assessments resulting from this proposed
amendment would not have a significant negative financial impact on
growers or handlers. Testimony indicated that the annual assessment
could even be reduced due to additional cherries being assessed with
the expansion of the production area.
Applying grades and standards to the new production areas should
provide benefits to small producers. The grades and standards allow
small producers the opportunity to develop a reputation for producing
and delivering a consistent, high quality product. These grades and
standards provide incentives and rewards for the production of high
quality product. In addition, the establishment of uniform grades and
standards across all the production areas provides a level field for
competition among both small and large growers. Testimony indicated
that as production increases, quality issues become more important and
production is expected to increase in excess of 100,000 tons for the
first time in the industry's history.
The 1999-2000 budget for the Committee is $62,815, of which $3,388
is earmarked for compliance efforts. Testimony indicated that increased
compliance and administrative costs necessary to monitor this proposal
would not be significant. It was testified that the benefits of
strengthening the market would outweigh any increase in costs.
Adversely, if the production area is not redefined, testimony indicated
that the Washington cherry image could be harmed, as more and more
areas are growing cherries. In addition, indications are that a large
number of non-bearing acres are coming into production inside and
outside the current production area. Adding to the increase in
production are growers of other crops, such as grain and apples,
looking for alternative crops to grow in order to supplement incomes.
Sweet cherries are an option these growers consider.
The Washington cherry market distinguishes itself from competitors.
More product is available from Washington than the other cherry
producing States. The Washington cherry market is more diverse and
national in scope, and testimony indicated that buyers have confidence
in Washington sweet cherries due to consistent quality. Testimony
revealed that this distinction is a direct result of the establishment
of minimum quality requirements under the marketing order. If the
proposal to allow cherry shipments outside the production area for
packing is implemented there are safeguards in place to ensure that
minimum quality requirements are met. If these facilities fail to abide
by the applicable requirements, the committee can rescind their
privileges and Washington cherries could not be delivered to that
facility.
When regulations are in place, all cherries in the production area
are required to be inspected and certified as meeting established
requirements. The Washington State Department of Agriculture's Fruit
and Vegetable Inspection Program (WSDA), headquartered in Olympia,
Washington collaborates with USDA-AMS, Fresh Products Branch to provide
inspection to marketing order commodities in Washington. WSDA's
district offices are located in Yakima, Wenatchee and Moses Lake. These
main district offices have area offices in strategic locations to the
various growing areas in the State. WSDA employs approximately 150-160
full-time inspection staff throughout the State. In addition, during
peak harvest periods, temporary inspectors are hired.
The WSDA operates on a user-fee basis; no appropriated funds are
received. Inspection fees pay for the program to operate. Except for
random inspections conducted on fruit stands to comply with a cherry
fruit fly quarantine program, WSDA provides inspections only upon
request. The applicant indicates to WSDA what type
[[Page 67595]]
of inspection is needed, such as compliance with a marketing order.
The fees for cherry inspections are 21 cents per hundred weight or
$23/hour, whichever is greater, plus additional charges for travel time
and mileage. The larger growers have individual inspectors stationed at
their warehouses during the season. The time and mileage charges are
more frequently assessed to the smaller grower/packer because of the
small volumes inspected and remote locations. However, WSDA attempts to
mitigate costs, especially to small growers and handlers. WSDA helps
smaller growers mitigate these costs by meeting growers halfway between
their orchard and the inspection office or WSDA authorizes the grower
to bring the product to the inspection office.
Individual shipments not exceeding 100 pounds in the aggregate are
exempt from the regulations, as well as cherries for home use and
cherries not intended for re-sale. In addition, shipments for
consumption by charitable institutions, for distribution by relief
agencies or for commercial processing into products are exempt from
regulation.
Testimony indicated that increased costs associated with more
cherries being inspected in accordance with marketing order
requirements would be offset by consistent quality and a stable market
place. In addition, most handlers already pack their cherries and have
them inspected in accordance with marketing order requirements,
regardless of whether the cherries are grown inside or outside the
current production area.
Minimum quality and size standards in the proposed production area
would maintain the integrity of the product so that the commodity's
overall quality image is not diminished by a low quality sample. The
principle objective of a grading system is to make the market work more
efficiently. Minimum quality and size requirements would improve
information between buyers and sellers. Contracts could be made based
on grade specifications, and buyers need not personally inspect each
lot of product. Standardization of quality and size reduces uncertainty
between buyers and sellers, and this helps reduce marketing costs. The
goal of an effective grading system is to improve quality and size.
Minimum quality and size standards would help ensure that substandard
produce does not find its way to the market and destroy consumer
confidence and harm producer returns. Cherries that do not meet the
grade and size requirements can be sold in the processed market.
In addition to proximity to their orchards, there are other reasons
growers select certain packinghouses. Many growers select handlers
based on the quality of pack, the packinghouse image and/or whether or
not the handler is a cooperative. These options for growers would be
limited if they were no longer able to have their cherries packed in
Oregon.
Testimony indicated that existing packing facilities in the State
of Washington could have difficulty handling the volume of Washington
cherries if the production continues to increase. The proposal to allow
shipments of Washington cherries outside the production area for
packing would specifically address this issue. This proposal would
provide flexibility in moving product in and out of the marketing order
production area.
WSDA currently has an agreement with the Oregon Department of
Agriculture covering the border area between both states, namely in the
Bingen, Washington area, where Oregon Department of Agriculture
conducts the inspections to Washington standards and marketing order
specifications. Testimony indicated this agreement works well, as it
assists the WSDA in supplying quality inspections in that area.
Testimony indicated that the inspection office does not envision any
oversight burden imposed by these proposals that it cannot meet.
Safeguard provisions are incorporated into this proposal to ensure
compliance with the proposal to authorize shipments outside the
production area.
If the production area is expanded, it would be necessary to
incorporate the additional counties regulated into the districts
currently established under the order. The Committee discussed dividing
the production area into three districts and distributing the counties
and membership across these districts. The Committee was concerned that
this would entail increasing Committee membership by more than one
handler member as proposed and discussed in Material Issue No. 2. The
record indicated that the Committee believed a 16 member Committee
would be the most effective. Therefore, it was decided to distribute
the counties proportionately among the two districts.
The proposed District 1 encompasses the northern part of the
production area and District 2 encompasses the southern part. In 1997
production in proposed District 1 was approximately 44,300 tons of
sweet cherries and in proposed District 2, 45,500 tons. In addition,
tons packed in each proposed district is close to equal. This
distribution of counties among the two districts would provide for
equal representation of handlers and growers from each district.
Committee Representation
The proposed amendment to increase representation on the Committee
by adding one additional handler member would improve representation on
the Committee and allow the Committee to function more efficiently.
Record evidence supports increasing the membership on the Committee
by one handler member. The Washington sweet cherry industry is growing.
Bearing acres and production are increasing and markets, including
exports, are expanding. Although the Committee's recommendation to
increase the number of Committee members by one initially related to
the expansion of the production area, the record testimony revealed
that the Committee would prefer to have an additional handler member
even if the production area is not expanded.
Increasing representation on the Committee would allow additional
input in Committee decisions. Having equal handler representation for
each district is reasonable considering that the volume handled is
similar in each district, regardless if the production area is
expanded. Costs of adding an additional member to the Committee would
be minimal.
In its deliberations, the Committee discussed alternatives to
address appropriate representation and districting should the
production area be expanded. One alternative was to divide the area
into three districts and distribute membership proportionately across
these districts. This alternative would have likely entailed increasing
membership by more than one. The Committee was concerned that
increasing the number of members by more than one would hinder the
decision-making capability of the Committee. The Committee agreed that
16 members was an appropriate number for the Committee to be most
effective while adequately representing the expanded production area.
Late Payment and Interest Charges on Delinquent Assessments
The proposed amendment to authorize the Committee, with AMS
approval, to collect late payment and interest charges on delinquent
assessments would encourage handlers to pay their assessments on time.
Assessments not paid promptly add an undue burden on the Committee
because the Committee has ongoing projects and programs funded by
assessments that are functioning throughout the year. The addition of
such a charge is consistent with standard business practices. No costs
[[Page 67596]]
would be associated for handlers who pay timely assessments.
Late payment and interest charges for delinquent assessments would
provide an incentive for handlers to pay on time. This would result in
fewer funds needed by the Committee for collection activities. Also,
the fees derived from late payment and interest charges would partially
compensate the Committee for its collection efforts.
Container Marking Requirements
The proposed amendment to authorize the Committee, with AMS
approval, to establish container marking requirements would further
expand and enhance the current container and pack requirements already
being used. Uniform marking requirements would assist in avoiding
confusion in the marketplace.
Testimony indicated that no significant costs would be incurred if
this authority were implemented because handlers already have the
equipment to mark containers. Container markings are currently
accomplished by handlers, on an individual basis. The benefits of this
proposed amendment would be in the form of uniform marking requirements
for Washington sweet cherries.
Combining Forms Required by Committee Nominees
The proposed amendment to authorize Committee nominees to qualify
as a member or alternate by filing a written acceptance of willingness
to serve prior to the selection would allow the selection process to
take place in a more timely fashion.
The proposal would delete the requirement that the selected member/
alternate file a written acceptance after notification of selection and
combine the acceptance letter with the background statement submitted
prior to selection. The nominee would, in effect, be indicating
willingness to serve on the Committee prior to being selected.
Testimony indicated that there is no benefit in waiting for the
nominee to sign the acceptance letter after being selected. No negative
impacts are anticipated from implementing this proposal. However, the
benefits are that the nominees are only required to sign and deliver
one form. In addition, the Committee could obtain all pertinent
information well ahead of the time for seating of the new Committee,
thereby operating more efficiently.
Committee Tenure Requirements
The proposed amendment to add tenure requirements for Committee
members would allow more persons the opportunity to serve as members on
the Committee. It would provide for more diverse membership, provide
the Committee with new perspectives and ideas, and increase the number
of individuals in the industry with Committee experience. It is
anticipated that this proposed amendment would not increase costs to
small businesses.
Continuance Referenda
The proposed amendment to require that continuance referenda be
conducted on a periodic basis to ascertain industry support for the
order would allow growers the opportunity to vote on whether to
continue the operation of the marketing order. Although this proposed
amendment may generate minimal Committee costs to assist in conducting
the referenda, there are no additional costs anticipated for small
businesses.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1980 (44 U.S.C.
35), the reporting and recordkeeping provisions that would be generated
by the proposed amendments would be submitted to the Office of
Management and Budget (OMB). Specifically, if the production area is
expanded, the overall burden of completion of all Committee generated
forms and reports could increase due to additional handlers being
regulated, as well as additional growers in the regulated area. Current
total burden hours are approximately 69 hours and only relate to
referenda and nominations. Sixty eight of these hours relate to
producer referenda. The other hour covers time spent by Committee
members and alternates completing membership forms. Adding an
additional 200 growers would increase the overall burden for referenda
documentation by approximately one hour. Adding an additional handler
member would increase the overall burden to complete nomination forms
from 1.25 hours to 1.33 hours. The documentation required to implement
the safeguard provisions for the four packing facilities in Oregon are
yet to be established, but it is not anticipated that the overall
burden would be dramatically increased. It is anticipated an
application form would be developed for these packing operations. These
provisions and any additional provisions modifying reporting and
recordkeeping burdens that generate from these proposed amendments
would not be effective until receiving OMB approval. Current
information collection requirements for Part 923 are approved by OMB
under OMB number 0581-0133. As with all Federal marketing order
programs, reports and forms are periodically reviewed to reduce
information requirements and duplication by industry and public sector
agencies.
The Department has not identified any relevant Federal rules that
duplicate, overlap or conflict with this proposed rule. All of these
amendments are designed to enhance the administration and functioning
of the marketing order to the benefit of the industry.
While the implementation of these requirements may impose some
additional costs on handlers, the costs are minimal and uniform on all
handlers. Some of these costs may be passed on to growers. However,
these costs would be offset by the benefits derived by the operation of
the marketing order. In addition, the meetings regarding these
proposals as well as the hearing date were widely publicized throughout
the Washington sweet cherry production area and proposed production
area and all interested persons were invited to attend the meetings and
the hearing and participate in Committee deliberations on all issues.
All Committee meetings and the hearing were public forums and all
entities, both large and small, were able to express views on these
issues. The Committee itself is composed of 15 members, of whom five
are handlers and ten are producers. Finally, interested persons are
invited to submit information on the regulatory and informational
impacts of this action on small businesses.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at the
following web site: 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.
A 30-day comment period is provided to allow interested persons to
respond to this proposal. Thirty days is deemed appropriate so that
this rulemaking may be completed prior to the 2001 season which begins
April 1, 2001. All written exceptions timely received will be
considered and a grower referendum will be conducted before these
proposals are implemented.
[[Page 67597]]
Civil Justice Reform
The amendments proposed herein have been reviewed under Executive
Order 12988, Civil Justice Reform. They are not intended to have
retroactive effect. If adopted, the proposed amendments will not
preempt any State or local laws, regulations, or policies, unless they
present an irreconcilable conflict with the amendments.
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 date of the entry of the ruling.
General Findings
The findings hereinafter set forth are supplementary to the
findings and determinations which were previously made in connection
with the issuance of the marketing agreement and order; and all said
previous findings and determinations are hereby ratified and affirmed,
except insofar as such findings and determinations may be in conflict
with the findings and determinations set forth herein.
(1) The marketing agreement and order, as hereby proposed to be
amended, and all of the terms and conditions thereof, would tend to
effectuate the declared policy of the Act;
(2) The marketing agreement and order, as hereby proposed to be
amended, regulate the handling of sweet cherries grown in the
production area in the same manner as, and are applicable only to,
persons in the respective classes of commercial and industrial activity
specified in the marketing agreement and order upon which a hearing has
been held;
(3) The marketing agreement and order, as hereby proposed to be
amended, are limited in their application to the smallest regional
production area which is practicable, consistent with carrying out the
declared policy of the Act, and the issuance of several orders
applicable to subdivisions of the production area would not effectively
carry out the declared policy of the Act; and
(4) All handling of sweet cherries grown in the production area as
defined in the marketing agreement and order, as hereby proposed to be
amended, is in the current of interstate or foreign commerce or
directly burdens, obstructs, or affects such commerce.
List of Subjects in 7 CFR Part 923
Marketing agreements, Cherries, Reporting and recordkeeping
requirements.
Recommended Amendment of the Marketing Agreement and Order
For the reasons set out in the preamble, 7 CFR part 923 is proposed
to be amended as follows:
PART 923--SWEET CHERRIES GROWN IN DESIGNATED COUNTIES IN WASHINGTON
1. The authority citation for 7 CFR part 923 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. Revise Sec. 923.4 to read as follows:
Sec. 923.4 Production area.
Production area means the counties of Okanogan, Chelan, Kittitas,
Yakima, Klickitat in the State of Washington and all of the counties in
Washington lying east thereof.
3. Amend Sec. 923.14 by revising paragraphs (a) and (b) to read as
follows:
Sec. 923.14 District.
* * * * *
(a) District 1 shall include the Counties of Chelan, Okanogan,
Douglas, Grant, Lincoln, Spokane, Pend Oreille, Stevens, and Ferry.
(b) District 2 shall include the counties of Kittitas, Yakima,
Klickitat, Benton, Adams, Franklin, Walla Walla, Whitman, Columbia,
Garfield and Asotin.
Sec. 923.20 [Amended]
4. Amend Sec. 923.20 as follows:
a. In the first sentence remove the word ``fifteen'' and add the
word ``sixteen'' in its place;
b. In the third and fourth sentences remove the word ``five'' and
add the word ``six'' in its place;
c. In the fifth sentence, remove the words ``four'' and ``six'' and
add the word ``five'' in their place; and
d. In the sixth sentence, remove the word ``two'' and add the word
``three'' in its place.
5. Revise Sec. 923.21 to read as follows:
Sec. 923.21 Term of office.
The term of office of each member and alternate member of the
committee shall be for two years beginning April 1 and ending March 31.
Members and alternate members shall serve in such capacities for the
portion of the term of office for which they are selected and have
qualified and until their respective successors are selected and have
qualified. Committee members shall not serve more than three
consecutive terms. Members who have served for three consecutive terms
must leave the committee for at least one year before becoming eligible
to serve again.
6. Revise Sec. 923.25 to read as follows:
Sec. 923.25 Acceptance.
Any person prior to selection as a member or an alternate member of
the committee shall qualify by filing with the Secretary a written
acceptance of willingness to serve on the committee.
7. Amend Sec. 923.41 by adding a new paragraph (c) to read as
follows:
Sec. 923.41 Assessments.
* * * * *
(c) If a handler does not pay any assessment within the time
prescribed by the committee, the assessment may be subject to an
interest or late payment charge, or both, as may be established by the
Secretary as recommended by the committee.
Sec. 923.52 [Amended]
8. In Sec. 923.52, paragraph (a)(3) is amended by adding the word
``markings,'' after the word ``dimensions,''.
9. Amend Sec. 923.54 as follows
a. Remove the words ``(including shipments to facilitate the
conduct of marketing research and development projects established
pursuant to Sec. 923.45),'' in paragraph (b) and add a new sentence at
the end of the section; and
b. Add a new sentence at the end of paragraph (c) to read as
follows:
Sec. 923.54 Special purpose shipments.
* * * * *
(b) * * * Specified purposes under this section may include
shipments of cherries for grading or packing to specified locations
outside the production area and shipments to facilitate the conduct of
marketing research and development projects established pursuant to
Sec. 923.45.
(c) * * * The committee may rescind or deny to any packing facility
the special purpose shipment certificate if proof satisfactory to the
committee is obtained that cherries shipped for the purpose stated in
this section were
[[Page 67598]]
handled contrary to the provisions of this section.
10. Amend Sec. 923.64 by adding a new sentence at the beginning of
paragraph (c) to read as follows:
Sec. 923.64 Termination.
* * * * *
(c) The Secretary shall conduct a referendum six years after the
effective date of this paragraph and every sixth year thereafter to
ascertain whether continuance of this part is favored by growers. * * *
* * * * *
Dated: November 2, 2000.
Kenneth C. Clayton,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 00-28660 Filed 11-8-00; 8:45 am]
BILLING CODE 3410-02-P