[Federal Register Volume 66, Number 132 (Tuesday, July 10, 2001)]
[Rules and Regulations]
[Pages 35891-35896]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-17125]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 930

[Docket Nos. AO-370-A6; FV98-930-2]


Tart Cherries Grown in the States of Michigan, et al.; Order 
Amending Marketing Agreement and Order No. 930

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This final rule amends the marketing agreement and order 
(order) for tart cherries grown in the States of Michigan, New York, 
Pennsylvania, Oregon, Utah, Washington, and Wisconsin. The amendments 
were submitted by the Cherry Industry Administrative Board (Board), the 
agency responsible for local administration of the order. One change 
clarifies the current limitation on the number of Board members that 
may be from, or affiliated with, a single ``sales constituency'' by 
amending the definition of that term. Another change simplifies the 
method used to establish volume regulations for tart cherries. These 
changes were favored by tart cherry growers in a mail referendum and 
will improve the operation and functioning of the tart cherry marketing 
order program.

EFFECTIVE DATE: August 9, 2001.

FOR FURTHER INFORMATION CONTACT: Kenneth G. Johnson, Regional Manager, 
DC Marketing Field Office, Marketing Order Administration Branch, Fruit 
and Vegetable Programs, AMS, USDA, 4700 River Road, Unit 155, Suit 
2A04, Riverdale Maryland 20737; telephone (301) 734-5243, or Fax: (301) 
734-5275; or Anne M. Dec, Marketing Order Administration Branch, Fruit 
and Vegetable Programs, AMS, USDA, room 2525-S, Washington, DC 20250-
0200; telephone: (202) 720-2491; or Fax: (202) 720-8938.
    Small businesses may request information on compliance with this 
regulation by contacting Jay Guerber, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, P.O. Box 96456, Room 
2525-S, Washington, DC 20090-6456;

[[Page 35892]]

telephone (202) 720-2491; Fax (202) 720-8938.

SUPPLEMENTARY INFORMATION: Prior documents in this proceeding: Notice 
of Hearing issued on November 12, 1998, and published in the November 
17, 1998, issue of the Federal Register (63 FR 63803). Recommended 
Decision and Opportunity to File Written Exceptions issued on December 
29, 1999, and published in the Federal Register on January 5, 2000 (65 
FR 672). Secretary's Decision and Referendum Order issued December 5, 
2000, and published in the Federal Register on December 11, 2000 (65 FR 
77323).
    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.

Preliminary Statement

    This final rule was formulated on the record of a public hearing 
held in Grand Rapids, Michigan, on December 1, 1998, and in Salt Lake 
City, Utah, on December 3, 1998, to consider the proposed amendment of 
Marketing Agreement and Order No. 930, regulating the handling of tart 
cherries grown in the States of Michigan, New York, Pennsylvania, 
Oregon, Utah, Washington, and Wisconsin, hereinafter referred to 
collectively as the ``order.'' The hearing was held 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 
proceedings to formulate marketing agreements and marketing orders (7 
CFR part 900). The Notice of Hearing contained amendment proposals 
submitted by the Board and the U.S. Department of Agriculture.
    The Board's proposals pertained to clarifying the current 
limitation on the number of Board members that may be from, or 
affiliated with, a single ``sales constituency'' by amending the 
definition of that term, and simplifying the method used to establish 
volume regulations for tart cherries.
    Also, the Fruit and Vegetable Programs of the Agricultural 
Marketing Service (AMS), U.S. Department of Agriculture, proposed to 
allow such changes as may be necessary to the order, if any or all of 
the above amendments are adopted, so that all of its provisions conform 
with the proposed amendment. No conforming changes have been deemed 
necessary.
    Upon the basis of evidence introduced at the hearing and the record 
thereof, the Administrator of the AMS on December 29, 1999, filed with 
the Hearing Clerk, U.S. Department of Agriculture, a Recommended 
Decision and Opportunity to File Written Exceptions thereto by February 
4, 2000. Five exceptions were filed.
    A Secretary's Decision and Referendum Order was issued on December 
5, 2000, directing that a referendum be conducted during the period 
January 15 through January 26, 2001, among growers of tart cherries to 
determine whether they favored the proposed amendments to the order. In 
the referendum, both amendments were favored by more than two-thirds of 
the growers voting in the referendum by number and volume.
    The amended marketing agreement was subsequently mailed to all 
sweet cherry handlers in the production area for their approval. The 
marketing agreement was approved by handlers representing more than 50 
percent of the volume of tart cherries handled by all handlers during 
the representative period of June 1, 1999, through May 31, 2000.

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, the AMS has prepared this 
final 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 during the 1998-99 crop year, 
approximately 41 handlers were regulated under Marketing Order No. 930. 
In addition, there were about 896 producers of tart cherries in the 
production area. 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 1998-99 tart cherry crop was about 340 million pounds. The 
record indicates that of the 41 tart cherry handlers, 12 had processed 
tonnage of more than 10 million pounds (or 29 percent of all handlers); 
4 had between 5 and 10 million pounds (10 percent); 15 had between 1 
and 5 million pounds (37 percent); and the remaining 10 had less than 1 
million pounds of processed tonnage (24 percent). Handlers accounting 
for 10 million pounds or more would be classified as large businesses. 
Thus, a majority of tart cherry handlers could be classified as small 
entities. The majority of tart cherry processors are located in 
Michigan. Many handle cherries grown in more than one district. 
Michigan accounted for 76.4 percent of the production, followed by Utah 
with 9.6 percent, Wisconsin with 4.3 percent, Washington with 4.0 
percent, New York with 3.9 percent, Pennsylvania with 1.2 percent, and 
Oregon with 0.6 percent. By State, about 72.5 percent of the growers 
are in Michigan, 9.9 percent in New York, 5.3 percent in Utah, 4.5 
percent in Wisconsin, 3.6 percent in Pennsylvania, 2.5 percent in 
Oregon, and 1.7 percent in Washington.
    Dividing total production by the number of growers, the average 
grower produces about 380,000 pounds of cherries annually. With grower 
returns of about 20 cents per pound, average revenues would be $76,000. 
Thus, it is reasonable to conclude that most tart cherry growers are 
small entities.
    At 20 cents per pound, a grower would have to produce 2.5 million 
pounds of cherries to reach the $500,000 receipt threshold to qualify 
as a large producing entity under the SBA's definition. No record 
evidence was provided to indicate how many tart cherry growers produce 
2.5 million pounds or more. One witness testified, however, that an 
estimated 150 growers (about 17 percent of the total number of growers) 
produce in excess of 1 million pounds, with the remainder producing 
less than that. With a majority of growers producing less than 1 
million pounds, it follows that a majority of growers produce less than 
2.5 million pounds. This supports the conclusion that the majority of 
tart cherry growers are small businesses. By State, however, average 
grower size varies considerably. The average grower in Washington 
accounts for roughly 910,000 pounds of cherries. Next in size is Utah 
with 680,000 pounds, followed by Michigan (400,000 pounds), Wisconsin 
(370,000 pounds), New York (150,000 pounds), Pennsylvania (130,000 
pounds) and Oregon (100,000 pounds).
    The two amendments to the tart cherry marketing order clarify the 
current limitation on the number of Board members that may represent a

[[Page 35893]]

single ``sales constituency'' and simplify the method used to establish 
volume regulations for tart cherries. Both amendments will be 
beneficial to business entities, both large and small.

Definition of Sales Constituency

    Section 930.20 of the tart cherry marketing order provides for an 
18-member Cherry Industry Administrative Board to assist the Department 
in administering the program. That section also divides the production 
area into nine districts for purposes of representation on the Board 
and allocates membership among those districts. Five of the nine 
current districts, including all districts subject to volume 
regulation, are allocated more than one member. Those five districts 
are Northern Michigan (four members), Central Michigan (three members), 
Southern Michigan (two members), New York (two members), and Utah (two 
members). The four districts with one member each are Oregon, 
Pennsylvania, Washington, and Wisconsin. (The eighteenth Board member 
is selected to represent the general public, and need not be from any 
specific area.)
    Section 930.20 further provides that for those districts allocated 
more than one member, only one of those members can be affiliated with 
a single sales constituency. Section 930.16 currently defines a sales 
constituency to mean a common marketing organization or brokerage firm 
or individual representing a group of handlers or growers.
    The amendment to Sec. 930.16 provides that an organization that 
receives consignments of cherries but does not direct where those 
cherries are sold would not be considered a sales constituency. The 
growers and handlers affiliated with such an organization will not be 
limited in their representation on the Board.
    The record shows that one of the Board's primary responsibilities 
is to recommend regulations to implement the marketing order's 
authorities relating to supply management, or volume regulation. Volume 
regulations benefit all industry members, both large and small, by 
matching demand in primary markets with available supplies of tart 
cherries. These regulations also serve to expand sales in secondary 
markets. The result is improved grower and processor returns.
    The record shows that approximately 11 of the current 18 members of 
the Board are affiliated in some way with CherrCo, the organization 
which raised the question of the intended meaning of the term sales 
constituency. Applying the current order limitation on the number of 
members representing a single sales constituency to CherrCo would 
result in five of the current Board members being declared ineligible 
to serve on the Board. All of these members represent regulated 
districts--four in Michigan and one in New York.
    The record shows that CherrCo is a federated grower cooperative. It 
is comprised of 24 member cooperatives. CherrCo's members account for 
75-80 percent of Michigan's tart cherry production, and a significant 
portion of the production, and a significant portion of the production 
in New York, Utah, Washington, and Wisconsin. CherrCo currently has no 
members in Oregon or Pennsylvania. The record indicates that the 
primary function of CherrCo is to establish minimum prices for certain 
tart cherry products. The record indicates that CherrCo is not directly 
involved in the actual sales of its members' products. There is intense 
competition among its members (as well as between its members and non-
members) to sell tart cherries. The competition for sales is on the 
basis of individual handlers' reputations, on the quality and mix of 
the products they offer, on any special services they provide to their 
customers, and on whether or not their processing plants are certified 
to conform with certain sanitation standards.
    The purpose of the sales constituency limitation is explained in 
Sec. 930.20(f) of the order where it is stated that in order to achieve 
a fair and balanced representation on the Board, and to prevent any one 
sales constituency from gaining control of the Board, not more than one 
Board member may be from, or affiliated with, a single sales 
constituency in those districts having more than one seat on the Board. 
The genesis of this limitation can be traced to the order promulgation 
record where it was stated that the limitation was designed to prevent 
the recurrence of a problem that existed under the previous tart cherry 
order which was in effect from 1971 through 1987. Under that order, 
there was no such limitation, and actions of the Board only required a 
simple majority vote, allowing representatives from a single sales 
organization to pass Board actions without support from other industry 
members. As was explained in the recommended decision published on 
January 5, 2000, concerning the amendments in this rulemaking, the tart 
cherry industry is comprised of many different organizations. Some were 
clearly meant be covered by the sales constituency limitation, while 
others were not. It was clearly intended that an organization such as 
Cherry Central, Inc. (a cooperative) be covered. Its main purpose is to 
sell its members' cherries and other products. The recommended decision 
further explains that an organization such as the Cherry Marketing 
Institute was not intended to be subject to the sales constituency 
limitation. The formation of CherrCo, a federated grower cooperative 
which was not in existence when the present order was promulgated, has 
caused the Department and the industry to reopen this question and to 
consider an amendment to the definition of sales constituency. This is 
because an organization such as CherrCo lies somewhere between Cherry 
Central, Inc. and the Cherry Marketing Institute which has a primary 
function of conducting generic promotion activities to expand overall 
sales of cherries and funding and conducting research in processing 
techniques and product development.
    Some of the exceptions and briefs filed in connection with the 
Recommended Decision raised issues and concerns in connection with 
Material Issue No. 1, definition of a sales constituency, and small 
business considerations. The Board was of the view that this proposed 
amendment would not have any negative impact on small businesses and 
that it would in fact help small entities by allowing them to send a 
representative of their choice to the Board. The Board noted that the 
regulatory requirements of the proposed amendment were properly 
tailored to the size and nature of small businesses.
    Two exceptions were filed that raised small business concerns. One 
exception from Terry Dorsing, President, Washington Tart Cherries 
Products, Inc., presented an overview of the functioning of the tart 
cherry marketing order since its inception. Mr. Dorsing stated that 
since the initial hearing to establish the order, it was his and his 
company's position that the Northwest and other small production areas 
would be dominated by the large production in Michigan and the impact 
of various provisions of the order would be detrimental to small 
entities. The exception also stated that a marketing order was not good 
for the small producer and for the tart cherry industry as a whole. 
While acknowledging the inclusion in the provisions of the order of a 
variety of safeguards to protect small producers and production areas, 
the exception concluded that the Board itself, in recommending further 
changes to the order (currently subject to a separate rulemaking 
action) was preparing to tear down the safeguards to the detriment of 
small entities.

[[Page 35894]]

    Another exception from Lee Schrepel, Chair, Oregon Tart Cherry 
Association, raised concern about the size of CherrCo affiliates, 
noting that perhaps most of the large handlers in the industry were 
CherrCo affiliates. The exception argued that the proposal had the 
appearance of giving a greater proportion of Board control to larger 
handlers, as defined under the Regulatory Flexibility Act. The 
exception questioned whether the Department failed to make a thorough 
examination of all relevant small business considerations, as required 
by that Act. The exception also noted that there are several examples 
of how boards administering Federal marketing orders for other 
commodities have protected the small, the remote and the independent, 
with each of the orders limiting the degree of domination by a 
particular constituency in the governed industry. Finally, the 
exception stated the proposed amendment should be rejected, that the 
Department should refer the matter back to the Board for further study 
to craft a more suitable amendment, or that the Department should 
develop a compromise amendment itself taking into account the 
alternative proposals presented in the rulemaking proceedings. 
Alternatively, the exception stated that there should be an allowance 
for permanent exclusion of all producers and handlers in the Oregon 
district, an issue that has not been proposed in the proceeding.
    Alternative proposals discussed at the hearing were considered and 
discussed in the Recommended Decision. It was determined that those 
proposals failed to properly address some of the fundamental issues 
faced by the tart cherry industry. One of these issues is that some 
districts are subject to volume control, while others are not. Another 
deals with the varying marketing and growing conditions. Probably the 
most important issue which alternative proposals failed to address was 
fair representation. Restrictions on an organization such as CherrCo 
could prevent growers in some of the highest volume producing areas 
from being adequately represented on the Board.
    Material Issue Number 1 concerns an amendment that clarifies the 
current limitation on the number of Board members that may be from, or 
affiliated with, a single sales constituency. This amendment is 
intended to be inclusive rather than exclusive. The issue presented by 
the amendment is whether an organization or entity, such as CherrCo, 
should be limited in terms of membership on the Board. The Department 
has fully reviewed this amendment consistent with the provisions of the 
Regulatory Flexibility Act as well as the statutory authority for this 
program. In doing so, it has concluded that this amendment will be 
favorable to both large and small entities. The two exceptions received 
raising small business considerations are not in agreement with this 
conclusion.
    The exceptions raised a variety of issues and concerns regarding 
the proposed amendment as well as the marketing order itself. The 
nature and structure of a board under a marketing order program 
reflects the industry that is regulated. Accordingly, a marketing order 
may provide for one or more provisions concerning board memberships. 
Such provisions would be tailored to reflect the attributes of a 
particular industry, as appropriate. In the case of the tart cherry 
marketing order, a provision was crafted to prevent any single sales 
constituency from having control of Board decision making. The proposed 
amendment would clarify the application of that provision, taking into 
account the current state of the industry as well as the present 
membership on the Board. As such, the original intent of the provisions 
would not be changed by the clarification. Looking at this amendment in 
terms of its impact, we continue to conclude that the proposed 
amendment should be favorable to both large and small entities.
    With regard to the assertion that certain safeguards in the order 
could be eliminated to the detriment of smaller production areas, this 
cannot be done by Board action alone. Any such proposed changes would 
be subject to a formal rulemaking process, including public hearings 
and a referendum, as well as an analysis and review by the Department.

Revision of the Optimum Supply Formula

    A principal feature of the tart cherry marketing order is supply 
management through the use of volume regulations. Authority for such 
regulations appears in Sec. 930.51 of the marketing order.
    Volume regulations are implemented through the establishment of 
free and restricted percentages. Such percentages are recommended by 
the Board in accordance with Sec. 930.50 of the order, and, if deemed 
appropriate, implemented by the Department through the public 
rulemaking process. These percentages are then applied to each 
regulated handler's acquisitions in a given season. ``Free market 
tonnage percentage'' cherries may be marketed in any outlet. 
``Restricted percentage'' cherries must be withheld from the primary 
market. They may be diverted in the orchard or at the processing plant; 
placed into a reserve pool; or sold in secondary markets. These 
secondary markets include exports (except to North America), and new 
products. Sales of restricted percentage cherries to these specified 
exempt markets receive diversion credits which handlers use to fulfill 
their restricted obligation.
    The record indicates that the primary objective of tart cherry 
volume regulations is to balance supplies with market demand, thereby 
stabilizing the market and improving grower and processor returns. A 
second objective is to encourage market growth by allowing restricted 
cherries to be sold in secondary markets (for example, most export 
markets). Witnesses attributed much of the improvement in recent cherry 
market conditions to the use of regulation in the 1997/98 and 1998/99 
seasons.
    The order currently sets forth in Sec. 930.50, an ``Optimum Supply 
Formula'' (OSF) which the Board must follow in its consideration of 
annual free and restricted percentages. The optimum supply is currently 
defined as 100 percent of the average sales of the prior 3 years, to 
which is added a desirable carryout inventory.
    The record indicates that using 100 percent of prior years' sales 
results in an overstatement of the optimum supply. The record shows 
that including the sales of restricted cherries in the optimum supply 
understates the projected surplus and results in a higher free 
percentage than supply and market conditions warrant. This is because 
those total sales include not only sales to the primary market, but to 
secondary markets as well.
    In the years that tart cherry volume regulations have been used, 
this issue has been addressed through use of an adjustment in order to 
achieve an optimum supply of cherries in the marketplace. Once a 
surplus has been computed (deducting the optimum from the available 
supply), the sales to secondary markets are added back to the surplus 
as an economic adjustment. The Board's recommended amendment would 
revise the procedures currently used in calculating the optimum supply. 
Under its proposal, the optimum supply would be equal to the 3-year 
average sales in primary markets (total sales less sales to markets 
eligible for diversion credit) plus the target carryout. This would 
simplify the method of arriving at an optimum supply figure and would 
be easier for tart cherry growers and processors to understand. 
Therefore, any regulatory impact on growers or handlers would be 
minimal or non-existent.

[[Page 35895]]

    The record evidence supports the conclusion that this amendment 
will result in no extra costs to growers or processors in that any 
resulting level of volume regulation would be similar to what is 
currently in effect and its economic effect on the industry would be 
similarly analyzed in each instance. It would benefit industry members 
both large and small, however, because the process relating to the 
establishment of volume regulations would be less confusing and more 
readily understood by industry members. This process is used by growers 
and handlers in making seasonal decisions (including those relating to 
harvesting cherries). To the extent that this process is more readily 
understood, all in the industry should benefit.
    Further, in its brief filed with regard to the Recommended 
Decision, the Board noted that the Department considered the impact of 
Material Issue Number 2 on small businesses and concluded that there 
will be no negative impact. The Board stated that it considered several 
other approaches concerning the optimum supply formula and was of the 
view that the amendment was the best alternative available.
    The collection of information under the marketing order will not be 
affected by these amendments to the marketing order. Current 
information collection requirements for Part 930 are approved by OMB 
under OMB number 0581-0177.
    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 final rule. These amendments 
are designed to enhance the administration and functioning of the 
marketing order to the benefit of the industry.
    Board meetings regarding these amendments as well as the hearing 
dates were widely publicized throughout the tart cherry industry, and 
all interested persons were invited to attend the meetings and the 
hearing and participate in Board deliberations on all issues. All Board 
meetings and the hearing were public forums and all entities, both 
large and small, were able to express views on these issues.

Civil Justice Reform

    The amendments contained in this rule have been reviewed under 
Executive Order 12988, Civil Justice Reform. They are not intended to 
have retroactive effect. The amendments will not preempt any State or 
local laws, regulations, or policies, unless they represent 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.

Order Amending the Order Regulating the Handling of Tart Cherries 
Grown in the States of Michigan, New York, Pennsylvania, Oregon, 
Utah, Washington, and Wisconsin

Findings and Determinations

    The findings and determinations hereinafter set forth are 
supplementary and in addition to the findings and determinations 
previously made in connection with the issuance of the order; and all 
of 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.
    (a) Findings and Determinations Upon the Basis of the Hearing 
Record. Pursuant to the provisions of the Agricultural Marketing 
Agreement Act of 1937, as amended (7 U.S.C. 601 et seq.), and the 
applicable rules of practice and procedure effective thereunder (7 CFR 
part 900), a public hearing was held upon the proposed amendments to 
the Marketing Agreement and Order No. 930 (7 CFR part 930), regulating 
the handling of tart cherries grown in the States of Michigan, New 
York, Pennsylvania, Oregon, Utah, Washington, and Wisconsin.
    Upon the basis of the evidence introduced at such hearing and the 
record thereof, it is found that:
    (1) The marketing agreement and order, as hereby amended, and all 
of the terms and conditions thereof, will tend to effectuate the 
declared policy of the Act;
    (2) The marketing agreement and order, as hereby amended, regulate 
the handling of tart cherries grown in the production area in the same 
manner as, and is applicable only to persons in the respective classes 
of commercial and industrial activity specified in the marketing order 
upon which hearings have been held;
    (3) The marketing agreement and order, as hereby amended, are 
limited in 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;
    (4) The marketing agreement and order, as hereby amended, 
prescribe, insofar as practicable, such different terms applicable to 
different parts of the production area as are necessary to give due 
recognition to the differences in the production and marketing of tart 
cherries grown in the production area; and
    (5) All handling of tart cherries grown in the production area is 
in the current of interstate or foreign commerce or directly burdens, 
obstructs, or affects such commerce.
    (b) Determinations. It is hereby determined that:
    (1) Handlers (excluding cooperative associations of producers who 
are not engaged in processing, distributing, or shipping tart cherries 
covered by the order as hereby amended) who, during the period June 1, 
1999, through May 31, 2000, handled 50 percent or more of the volume of 
such cherries covered by said order, as hereby amended, have signed an 
amended marketing agreement; and
    (2) The issuance of this amendatory order is favored or approved by 
at least two-thirds of the producers who participated in a referendum 
on the question of approval and who, during the period June 1, 1999, 
through May 31, 2000 (which has been deemed to be a representative 
period), have been engaged within the production area in the production 
of such cherries, such producers having also produced for market at 
least two-thirds of the volume of such commodity represented in the 
referendum.

[[Page 35896]]

Order Relative to Handling of Tart Cherries Grown in the States of 
Michigan, New York, Pennsylvania, Oregon, Utah, Washington and 
Wisconsin

    It is therefore ordered, That on and after the effective date 
hereof, all handling of tart cherries grown in the States of Michigan, 
New York, Pennsylvania, Oregon, Utah, Washington, and Wisconsin, shall 
be in conformity to, and in compliance with, the terms and conditions 
of the said order as hereby amended as follows:
    The provisions of the proposed marketing agreement and order 
amendments contained in the Secretary's Decision issued by the 
Administrator on December 5, 2000, and published in the Federal 
Register on December 11, 2000, shall be and are the terms and 
provisions of this order amending the order and are set forth in full 
herein.

List of Subjects in 7 CFR Part 930

    Marketing agreements, Reporting and recordkeeping requirements, 
Tart cherries.

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

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

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

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


    2. In part 930, Sec. 930.16 is revised to read as follows:


Sec. 930.16  Sales constituency.

    Sales constituency means a common marketing organization or 
brokerage firm or individual representing a group of handlers and 
growers. An organization which receives consignments of cherries and 
does not direct where the consigned cherries are sold is not a sales 
constituency.

    3. In Sec. 930.50, paragraph (a) is revised to read as follows:


Sec. 930.50  Marketing policy.

    (a) Optimum supply. On or about July 1 of each crop year, the Board 
shall hold a meeting to review sales data, inventory data, current crop 
forecasts and market conditions in order to establish an optimum supply 
level for the crop year. The optimum supply volume shall be calculated 
as 100 percent of the average sales of the prior three years reduced by 
average sales that represent dispositions of restricted percentage 
cherries qualifying for diversion credit for the same three years, 
unless the Board determines that it is necessary to recommend otherwise 
with respect to sales of restricted percentage cherries, to which shall 
be added a desirable carryout inventory not to exceed 20 million pounds 
or such other amount as the Board, with the approval of the Secretary, 
may establish. This optimum supply volume shall be announced by the 
Board in accordance with paragraph (h) of this section.
* * * * *

    Dated: July 3, 2001.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 01-17125 Filed 7-9-01; 8:45 am]
BILLING CODE 3410-02-P