[Federal Register Volume 66, Number 225 (Wednesday, November 21, 2001)]
[Rules and Regulations]
[Pages 58350-58356]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-29116]


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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; Order 
Amending Marketing Agreement and Order No. 923

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This final rule amends the marketing agreement and order 
(order) for Washington sweet cherries. The amendments were submitted by 
the Washington Cherry Marketing Committee (Committee), the agency 
responsible for local administration of the order. The changes will: 
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 written acceptance of 
willingness to serve prior to selection. These changes were favored by 
sweet cherry growers in a mail referendum and will improve the 
operation and functioning of the Washington sweet cherry marketing 
order program. Proposed amendments to establish tenure requirements for 
Committee members and to require that continuance referenda be 
conducted every 6 years were not favored by sweet cherry growers in the 
mail referendum and are not being implemented.

EFFECTIVE DATE: December 21, 2001.

FOR FURTHER INFORMATION CONTACT: Teresa Hutchinson, Marketing 
Specialist, Marketing Order Administration Branch, Fruit and Vegetable 
Programs, AMS, USDA, Northwest Marketing Field Office, 1220 S.W. Third 
Avenue, room 369, Portland, Oregon 97204; telephone (503) 326-2724 or 
Fax (503) 326-7440; or Kathleen M. Finn, Marketing Specialist, 
Marketing Order Administration Branch, Fruit and Vegetable Programs, 
AMS, USDA, room 2525-S, Washington, D.C. 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; telephone (202) 720-2491; Fax (202) 
720-8938.

SUPPLEMENTARY INFORMATION: Prior documents 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). Recommended Decision 
and Opportunity to File Written Exceptions issued on November 2, 2000, 
and published in the Federal Register on November 9, 2000 (65 FR 
67584). USDA's Decision and Referendum Order issued March 1, 2001, and 
published in the Federal Register on March 6, 2001 (66 FR 13447).
    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 Yakima, Washington, on November 16, 1999, to consider the 
proposed amendment of Marketing Agreement and Order No. 923, regulating 
the handling of Washington sweet cherries, 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 Committee and the U.S. Department of Agriculture.
    The Committee's proposals were to: (1) Increase the production area 
to cover the area in the State of Washington east of the Cascade 
Mountain Range; redefine the districts established under the order; and 
authorize special purpose shipments, with appropriate safeguards, to 
facilitate the movement of cherries to packing facilities outside the 
production area; (2) increase representation on the Committee by adding 
one additional handler member; (3) authorize the Committee, with USDA 
approval, to collect late payment and interest charges on delinquent 
assessments; (4) authorize the Committee, with USDA approval, to 
establish container marking requirements; and (5) authorize Committee 
nominees to qualify as a

[[Page 58351]]

member or alternate by filing a written acceptance of willingness to 
serve prior to the selection.
    Also, the Fruit and Vegetable Programs of the Agricultural 
Marketing Service (AMS), U.S. Department of Agriculture (USDA), 
proposed three amendments: (1) Establish a limit on the number of 
consecutive terms a person may serve as a member of the Committee; (2) 
require that continuance referenda be conducted every 6 years to 
ascertain grower support for the order; and (3) adopt such changes as 
may be necessary to the order, if any of the above amendments are 
adopted, so that all of its provisions conform with those amendments. 
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 November 2, 2000, filed with 
the Hearing Clerk, U.S. Department of Agriculture, a Recommended 
Decision and Opportunity to File Written Exceptions thereto by December 
11, 2000. None were filed.
    A USDA's Decision and Referendum Order was issued on March 1, 2001, 
directing that a referendum be conducted during the period April 10 
through April 27, 2001, among growers of sweet cherries to determine 
whether they favored the proposed amendments to the order. In the 
referendum, all of the amendments proposed by the Committee were 
favored by more than two-thirds of the growers voting in the referendum 
by number and volume. The proposals submitted by USDA regarding 
committee tenure requirements and periodic continuation referenda on 
the marketing order received majority support but failed to receive the 
required support for passage.
    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 sweet cherries handled by all handlers during 
the representative period of April 1, 2000, through March 31, 2001.

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 $750,000. 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 there are approximately 75 handlers 
currently regulated under Marketing Order No. 923. There are two 
additional packing houses in the expanded production area that will be 
considered handlers. There are four packing operations in Oregon that 
pack Washington cherries for grower/handlers. In addition, there are 
about 1,600 cherry growers in the production area. This amount includes 
about 200 additional growers from the expanded 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.
    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 
amended 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.
    The amendments to the Washington sweet cherry marketing order will 
be beneficial to business entities, both large and small.

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.
    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

[[Page 58352]]

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 export 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 being included 
with this action 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 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 will 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 helps to 
ensure that all major production will be covered under the marketing 
order in the future. The amendment also benefits 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 amendment 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 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

[[Page 58353]]

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 amended production area is the smallest regional area, which is 
practicable, while maintaining program effectiveness.
    The record revealed that the cherry farm sizes in Washington range 
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 amended production area that are larger that the 
average farm. Some farms in the amended 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 should 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 amendment will 
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. The 
amendment allowing cherry shipments outside the production area for 
packing provides safeguards 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 cannot 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 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 amended production area 
will help maintain the integrity of the product so that the commodity's 
overall

[[Page 58354]]

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 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 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 amendment to 
allow shipments of Washington cherries outside the production area for 
packing specifically addresses this issue. This amendment provides 
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 amendment to ensure 
compliance with the amendment to authorize shipments outside the 
production area.
    Because the production area is expanded, it is 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.
    District 1 encompasses the northern part of the production area and 
District 2 encompasses the southern part. In 1997 production in 
District 1 was approximately 44,300 tons of sweet cherries and in 
District 2, 45,500 tons. In addition, tons packed in each district is 
close to equal. This distribution of counties among the two districts 
will provide for equal representation of handlers and growers from each 
district.

Committee Representation

    The amendment to increase representation on the Committee by adding 
one additional handler member will 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 was not expanded.
    Increasing representation on the Committee allows 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 are 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 amendment to authorize the Committee, with AMS approval, to 
collect late payment and interest charges on delinquent assessments 
will 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 are associated 
for handlers who pay timely assessments.
    Late payment and interest charges for delinquent assessments 
provides an incentive for handlers to pay on time. This should result 
in fewer funds needed by the Committee for collection activities. Also, 
the fees derived from late payment and interest charges partially 
compensates the Committee for its collection efforts.

Container Marking Requirements

    The amendment to authorize the Committee, with AMS approval, to 
establish container marking requirements further expands and enhances 
the current container and pack requirements already being used. Uniform 
marking requirements will 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 
amendment are in the form of uniform marking requirements for 
Washington sweet cherries.

Combining Forms Required by Committee Nominees

    The 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 allows the selection process to take place 
in a more timely fashion.
    The amendment deletes the requirement that the selected member/
alternate file a written acceptance after notification of selection and 
combines

[[Page 58355]]

the acceptance letter with the background statement submitted prior to 
selection. The nominee will, 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 amendment. 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.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the reporting and recordkeeping provisions that will be 
generated by the amendments have been approved by the Office of 
Management and Budget (OMB) under OMB control number 0581-0189. 
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. Previous total burden hours were 
approximately 69 hours and only related to referenda and nominations. 
Sixty eight of these hours related to producer referenda for order 
amendments and handlers signing of marketing agreements. The other hour 
covered time spent by Committee members and alternates completing 
membership forms. Adding the additional growers and handlers from the 
expanded production area increases the overall burden for referenda 
documentation by approximately 22 hours. Adding an additional handler 
member will 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 will be dramatically 
increased. It is anticipated an application form will be developed for 
these packing operations. These provisions and any additional 
provisions modifying reporting and recordkeeping burdens that generate 
from these amendments will not be effective until receiving OMB 
approval. Current information collection requirements for part 923 are 
approved by OMB under OMB number 0581-0189.
    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 USDA has not identified any relevant Federal rules that 
duplicate, overlap or conflict with this final 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 are 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 were 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.

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 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 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 date of the 
entry of the ruling.

Order Amending the Order Regulating the Handling of Sweet Cherries 
Grown in Designated Counties in Washington

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. 923 (7 CFR part 923), regulating the handling 
of sweet cherries grown in designated counties in Washington.
    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 sweet 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

[[Page 58356]]

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 sweet 
cherries grown in the production area; and
    (5) All handling of sweet 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 sweet cherries 
covered by the order as hereby amended) who, during the period April 1, 
2000, through March 31, 2001, 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 April 1, 2000, 
through March 31, 2001 (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.

Order Relative to Handling of Sweet Cherries Grown in Designated 
Counties in Washington

    It is therefore ordered, That on and after the effective date 
hereof, all handling of sweet cherries grown in designated counties in 
Washington 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 USDA's Decision issued by the Administrator on 
March 1, 2001, and published in the Federal Register on March 6, 2001, 
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 923

    Marketing agreements, Cherries, Reporting and recordkeeping 
requirements.


    For the reasons set out in the preamble, 7 CFR part 923 is 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.

    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. 923.25 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 USDA a written acceptance of 
willingness to serve on the committee.

    6. Revise 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 USDA 
as recommended by the committee.


Sec. 923.52  [Amended]

    7. In Sec. 923.52, paragraph (a)(3) is amended by adding the word 
``markings,'' after the word ``dimensions,''.

    8. 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 paragraph; 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 handled contrary to the provisions of this section.

    Dated: November 15, 2001.
A. J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 01-29116 Filed 11-20-01; 8:45 am]
BILLING CODE 3410-02-P