[Federal Register Volume 66, Number 218 (Friday, November 9, 2001)]
[Rules and Regulations]
[Pages 56597-56599]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-28202]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 930

[Docket No. FV01-930-3 FIR]


Tart Cherries Grown in the States of Michigan, et al.; 
Modifications to the Rules and Regulations Under the Tart Cherry 
Marketing Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (USDA) is adopting, as a final 
rule, without change, an interim final rule increasing the Cherry 
Industry Administrative Board (Board) membership, and establishing 
procedures under the rules and regulations of the Federal tart cherry 
marketing order (order) for handlers who want to post surety bonds to 
temporarily defer maintaining an inventory reserve for tart cherries. 
The Board recommended these actions to improve order administration, 
provide handlers more marketing flexibility, and change Board 
representation as required. The order regulates the handling of tart 
cherries grown in the States of Michigan, New York, Pennsylvania, 
Oregon, Utah, Washington, and Wisconsin and is administered locally by 
the Board.

EFFECTIVE DATE: December 10, 2001.

FOR FURTHER INFORMATION CONTACT: Patricia A. Petrella or Kenneth G. 
Johnson, Marketing Order Administration Branch, F&V, AMS, USDA, Suite 
2A04, Unit 155, 4700 River Road, Riverdale, Maryland 20737, telephone: 
(301) 734-5243, Fax: (301) 734-5275; or George Kelhart, Technical 
Advisor, Marketing Order Administration Branch, Fruit and Vegetable 
Programs, AMS, USDA, Room 2525-S, P.O. Box 96456, Washington, DC 20090-
6456; telephone: (202) 720-2491, Fax: (202) 720-8938. Small businesses 
may request information on compliance with this regulation, or obtain a 
guide on complying with fruit, vegetable, and specialty crop marketing 
agreements and orders by contacting Jay Guerber, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, P.O. 
Box 96456, room 2525-S, Washington, DC 20090-6456; telephone (202) 720-
2491; Fax: (202) 720-8938, or e-mail: [email protected].

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement and Order No. 930 (7 CFR part 930) regulating the handling of 
tart cherries grown in the States of Michigan, New York, Pennsylvania, 
Oregon, Utah, Washington, and Wisconsin, hereinafter referred to as the 
``order.'' This order is effective under the Agricultural Marketing 
Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter 
referred to as the ``Act.''
    The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Order 12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule is not intended to have retroactive effect. 
This rule will not preempt any State or local laws, regulations, or 
policies, unless they present an irreconcilable conflict with this 
rule.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 608c(15)(A) of the 
Act, any handler subject to an order may file with USDA 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 USDA would rule on the petition. The Act

[[Page 56598]]

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 USDA's ruling on the 
petition, provided an action is filed not later than 20 days after the 
date of the entry of the ruling.
    This rule continues in effect an interim final rule that increased 
the Board's membership, and established procedures under the order's 
rules and regulations for handlers to post surety bonds to temporarily 
defer maintaining an inventory reserve for tart cherries.
    The Board recommended that its membership be increased by one 
member for District 8, the State of Washington. Currently, 
Sec. 930.20(e) provides that if Districts 5, 6, 8, or 9 become subject 
to volume regulation under Sec. 930.52(a), the Board shall be 
reestablished by USDA to provide such District(s) with at least one 
grower and one handler seat on the Board. Prior to the increase, 
Washington was represented by one grower or one handler member. At the 
September 8, 2000, meeting it was determined that the State of 
Washington's annual average production of cherries over the prior three 
years had exceeded the 15 million pound threshold required for 
districts to become regulated. Preliminary volume regulation 
percentages have been computed and announced by the Board for the 2001-
2002 crop year. Handlers handling tart cherries grown in Washington are 
expected to be subject to volume regulation when final percentages are 
recommended by the Board and approved by USDA.
    Therefore, the Board should be increased from 18 to 19 members 
which would allow two members instead of one to represent District 8--
Washington. The new member and alternate would be nominated and 
selected in the same manner as other Board members and alternates. With 
the change for District 8, Washington, District representation on the 
Board will be as follows:

------------------------------------------------------------------------
                                                    Grower      Handler
                    District                        members     members
------------------------------------------------------------------------
1...............................................           2           2
2...............................................           1           2
3...............................................           1           1
4...............................................           1           1
5...............................................           1        or 1
6...............................................           1        or 1
7...............................................           1           1
8...............................................           1           1
9...............................................           1        or 1
------------------------------------------------------------------------

    The Board also recommended that procedures be established for 
handlers to post surety bonds to temporarily defer maintaining 
inventory reserves. Section 930.63 provides in part that handlers may, 
in order to comply with the requirements of Secs. 930.50 and 930.51 and 
regulations issued thereunder, secure bonds on restricted percentage 
cherries to temporarily defer the date that inventory reserve cherries 
must be held to any date requested by a handler as long as it is not 
later than 60 days prior to the end of the crop year. Pursuant to the 
Board's recommendation, handlers will be required to post surety bonds 
at two times the market value of the quantity of cherries for which the 
holding obligation is being deferred. For example, if the inventory 
reserve product to be marketed is tart cherry juice concentrate and the 
market value for the concentrate is $20,000, the handler has to post a 
surety bond of $40,000 in order to temporarily defer his/her inventory 
reserve obligation.
    The deferment will be conditioned on the execution and delivery by 
the handler to the Board of a written undertaking within 30 days after 
USDA announces the final restricted percentage under Sec. 930.51. The 
written undertaking (required to be secured by a bond or bonds with a 
surety or sureties acceptable to the Board) must guarantee that on or 
prior to the acceptable deferred date that handler will have fully 
satisfied the restricted percentage amount required by Sec. 930.51. If 
a handler fails to satisfy that obligation with cherries in reserve by 
the date requested by the handler, the bond will be forfeited to the 
Board. The Board will then buy cherries to fulfill the handler's 
obligation. Handlers not posting surety bonds to temporarily defer 
maintaining an inventory reserve shall keep inventory reserves in 
compliance with applicable order regulations.

The Regulatory Flexibility Act and Effects on Small Businesses

    The Agricultural Marketing Service (AMS) has considered the 
economic impact of this action on small entities and has prepared this 
final regulatory flexibility analysis. The Regulatory Flexibility Act 
(RFA) allows AMS to certify that regulations do not have a significant 
economic impact on a substantial number of small entities.
    However, as a matter of general policy, AMS' Fruit and Vegetable 
Programs (Programs) no longer opt for such certification, but rather 
perform regulatory flexibility analyses for any rulemaking that would 
generate the interest of a significant number of small entities. 
Performing such analyses shifts the Programs' efforts from determining 
whether regulatory flexibility analyses are required to the 
consideration of regulatory options and economic or regulatory impacts.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and rules thereunder, are unique in that they are 
brought about through group action of essentially small entities acting 
on their own behalf. Thus, both statutes have small entity orientation 
and compatibility.
    There are approximately 40 handlers of tart cherries who are 
subject to regulation under the order and approximately 900 producers 
of tart cherries in the regulated area. Small agricultural service 
firms, which include handlers, have been defined by the Small Business 
Administration (13 CFR 121.201) as those having annual receipts of less 
than $5,000,000, and small agricultural producers are defined as those 
having annual receipts of less than $750,000. The majority of handlers 
and producers are small entities. Since the interim final rule was 
issued, the standard for determining small agricultural producers has 
been increased from $500,000 to $750,000.
    Board and subcommittee meetings are widely publicized in advance 
and are held in a location central to the production area. The meetings 
are open to all industry members (including small business entities) 
and other interested persons who are encouraged to participate in the 
deliberations and voice their opinions on topics under discussion. 
Thus, Board recommendations can be considered to represent the 
interests of small business entities in the industry.
    The principal demand for tart cherries is in the form of processed 
products. Tart cherries are dried, frozen, canned, juiced, and pureed. 
During the period 1995/96 through 1999/00, approximately 91 percent of 
the U.S. tart cherry crop, or 280.5 million pounds, was processed 
annually. Of the 280.5 million pounds of tart cherries processed, 62 
percent was frozen, 29 percent was canned, and 9 percent was utilized 
for juice.
    Based on National Agricultural Statistics Service data, acreage in 
the United States devoted to tart cherry production has been trending 
downward. In the ten-year period, 1987/88 through 1997/98, the tart 
cherry area decreased from 50,050 acres, to less than 40,000 acres. In 
1999/00, approximately 90 percent of domestic tart cherry acreage is 
located in four

[[Page 56599]]

States: Michigan, New York, Utah, and Wisconsin.
    Michigan leads the nation in tart cherry acreage with 70 percent of 
the total. Michigan produces about 75 percent of the U.S. tart cherry 
crop each year. In 1999/00, tart cherry acreage in Michigan decreased 
to 28,100 from 28,400.
    The impact of this rule would be beneficial to growers and 
handlers. The recommendation to add another member and alternate is 
consistent with the order requirements and will provide greater 
participation on the Board by the industry. Adding procedures for 
handlers to temporarily defer their inventory reserve holding 
obligations through written undertakings secured by surety bonds is 
also consistent with order provisions and will provide handlers with 
flexibility in their day-to-day processing, packing, and marketing 
operations.
    One alternative to these actions would be to continue the status 
quo. However, the order requires a change in Board membership, 
following established nomination procedures, upon a district meeting 
the volume regulation threshold and thus subject to volume regulation. 
The order also provides handlers the authority to post surety bonds. 
Recommending procedures for handlers to implement this authority is 
another tool the Board hopes to use to facilitate the orderly marketing 
of tart cherries.
    As with all Federal marketing order programs, reports and forms are 
periodically reviewed to reduce information requirements and 
duplication by industry and public sectors. In addition, USDA has not 
identified any relevant Federal rules which duplicate, overlap, or 
conflict with this rule.
    In compliance with Office of Management and Budget (OMB) 
regulations (5 CFR part 1320) which implement the Paperwork Reduction 
Act of 1995 (44 U.S.C. Chapter 35), the information collection and 
recordkeeping requirements imposed by this action have been previously 
approved by OMB and assigned OMB Number 0581-0177. Handlers taking 
advantage of the bonding option would execute an application which 
would take about an hour to complete. The total burden hours approved, 
4,649 hours, will be adequate to cover this added burden.
    The Board's meetings are widely publicized throughout the tart 
cherry industry and all interested persons were invited to attend them 
and participate in Board deliberations. Like all Board meetings, the 
September 2000 meeting was a public meeting and all entities, both 
large and small, were able to express their views on these issues. The 
Board itself is composed of 18 members, of which 17 members are growers 
and handlers and one represents the public. Also, the Board has a 
number of appointed committees to review certain issues and make 
recommendations.
    An interim final rule concerning this action was published in the 
Federal Register on July 10, 2001. Copies of the rule were mailed by 
the Committee's staff to all Committee members and handlers. In 
addition, the rule was made available through the Internet by the 
Office of the Federal Register and USDA. That rule provided for a 60-
day comment period which ended September 10, 2001. No comments were 
received.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at the 
following website: http//www.ams.usda.gov/fv/moab.html. Any questions 
about the compliance guide should be sent to Jay Guerber at the 
previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    After consideration of all relevant material presented, including 
the information and recommendation submitted by the Committee and other 
available information, it is hereby found that finalizing the interim 
final rule, without change, as published in the Federal Register (66 FR 
35889) will tend to effectuate the declared policy of the Act.

List of Subjects in 7 CFR Part 930

    Marketing agreements, Reporting and recordkeeping requirements, 
Tart cherries.

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.

PART 930--[AMENDED]

    Accordingly, the interim final rule amending 7 CFR part 930 which 
was published at 66 FR 35889 on July 10, 2001, is adopted as a final 
rule without change.

    Dated: November 5, 2001.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 01-28202 Filed 11-8-01; 8:45 am]
BILLING CODE 3410-02-P