[Federal Register Volume 68, Number 120 (Monday, June 23, 2003)]
[Rules and Regulations]
[Pages 37063-37065]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-15739]



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  Federal Register / Vol. 68, No. 120 / Monday, June 23, 2003 / Rules 
and Regulations  

[[Page 37063]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 923

[Docket No. FV02-923-1 FIR]


Sweet Cherries Grown in Designated Counties in Washington; 
Establishment of Procedures To Allow the Grading or Packing of Sweet 
Cherries Outside the Production Area

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 allowing the grading or 
packing of sweet cherries outside the production area established under 
the Washington sweet cherry marketing order which regulates the 
handling of sweet cherries grown in designated counties in Washington. 
Persons desiring to ship Washington sweet cherries for grading or 
packing outside the production area will apply and report to the 
Washington Cherry Marketing Committee (Committee) on forms provided by 
the Committee. The reporting requirement will provide the Committee 
with safeguard information on the grading or packing of sweet cherries 
outside the production area to assure that acceptable quality fruit is 
shipped. This rule will provide greater flexibility in the grading, 
packing, and marketing of Washington sweet cherries. In some cases, the 
facilities outside the production area are closer to where the fruit is 
produced, and the ability to grade and pack outside the production area 
could reduce costs. This rule was recommended unanimously by the 
Committee, the agency responsible for local administration of the 
order.

EFFECTIVE DATE: July 23, 2003.

FOR FURTHER INFORMATION CONTACT: Teresa L. Hutchinson, Marketing 
Specialist, Northwest Marketing Field Office, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1220 
SW., Third Avenue, suite 385, Portland, Oregon 97204; telephone: (503) 
326-2724; Fax: (503) 326-7440; or George Kelhart, Technical Advisor, 
Marketing Order Administration Branch, Fruit and Vegetable Programs, 
AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 
20250-0237; telephone: (202) 720-2491, Fax: (202) 720-8938.
    Small businesses may request information on complying with this 
regulation by contacting Jay Guerber, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence 
Avenue SW., STOP 0237, Washington, DC 20250-0237; telephone (202) 720-
2491, Fax: (202) 720-8938, or E-mail: [email protected].

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement No. 134 and Order No. 923, both as amended (7 CFR part 923), 
regulating the handling of sweet cherries grown in designated counties 
in Washington, hereinafter referred to as the ``order.'' The 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 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.
    Minimum grade, size, maturity, container, pack and inspection 
requirements are currently established under the order. This rule 
continues in effect procedures and safeguard requirements that allow 
for the grading or packing of Washington sweet cherries outside the 
production area. Persons desiring to ship Washington sweet cherries for 
grading or packing outside the production area will apply and report to 
the Committee on forms provided by the Committee.
    Consistent with the authorities and procedures outlined in the Act, 
the order was amended on November 21, 2001 (66 FR 58350). One of the 
amendments increased the size of the production area to include all 
counties east of the Cascade Mountain Range and provided authority in 
Sec.  923.54 for the establishment of procedures to allow the shipment 
of Washington sweet cherries outside the production area for grading 
and packing. Section 923.54 also provides authority for the 
establishment of such safeguards as may be necessary to ensure the 
sweet cherries are handled in accordance with the order's provisions.
    The Committee met on May 14, 2002, and unanimously recommended the 
establishment of procedures and safeguard requirements to allow the 
grading or packing of sweet cherries outside the production area. 
Currently, all cherries are required to be graded and packed before 
leaving the production area. Committee members believe that this will 
give shippers an opportunity to choose those grading and packing 
facilities that will be most beneficial to their individual 
circumstances. The grading and packing costs that are charged to 
growers may be different among different handlers in the production 
area or packing facilities outside the production area. There may be 
differences in the type of packaging or other services offered by 
packing facilities within or outside the production area.
    For example, a packing facility outside the area of production is

[[Page 37064]]

experimenting with modified atmosphere packaging that increases the 
shelf life of sweet cherries. There are also Washington sweet cherry 
growers who are part owners of packing facilities that are located 
outside the area of production, and it may be advantageous for them to 
be able to deliver to those facilities for grading and packing. 
Finally, some of the facilities are closer to where the fruit is 
produced, and allowing these facilities to be used for grading, 
packing, or both could reduce grower and handler delivery costs.
    The Committee believes that the minimum grade, size, maturity, 
container, and pack requirements established under the order are very 
important to the industry. The Committee believes such requirements 
create orderly marketing, are good for consumers, encourage repeat 
purchases, and ultimately improve returns to growers. Therefore, the 
Committee also recommended the establishment of safeguards to ensure 
that all sweet cherries graded and packed outside the production area 
are ultimately inspected and certified by the Federal or Federal-State 
Inspection Service as meeting the minimum grade, size, maturity, 
container, and pack requirements established under the order. Persons 
desiring to ship or receive sweet cherries for grading or packing 
outside the production area will apply to the Committee on a Shippers/
Receivers Application for Special Purpose Shipment Certificate. Such 
applicants will submit an application each year prior to shipping or 
receiving sweet cherries for grading or packing outside the production 
area. Information collected on the application will include the date as 
well as the name, address, phone number, and signature of the 
applicant, and such other information as the Committee may require. The 
form includes a certification that all production area cherries graded 
or packed outside the production area will be inspected by the Federal 
or Federal-State Inspection Service and will meet the minimum grade, 
size, maturity, container, and pack requirements established under 
Sec.  923.322 prior to shipment.
    After the Committee approves an application, the applicant within 
the area of production and the applicant packing facility outside the 
area will be required to submit a weekly Special Purpose Shipment 
Report to the Committee when Washington sweet cherries are shipped out 
of the production area for grading or packing, along with inspection 
certificates, and other information required by the Committee for 
verification purposes. Information collected on the reports will 
include the names, addresses, telephone numbers, and signatures of the 
applicants, names of the growers and handlers of such cherries, and the 
total quantities of each variety of cherries shipped or received. These 
reports will be submitted to the Committee at the close of business 
every Friday during those weeks when the shipper applicant has shipped 
or the receiver applicant has received sweet cherries for grading and 
packing outside the production area. The Committee estimates that each 
affected applicant will submit approximately 10 of these reports 
annually.

Final Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Agricultural Marketing Service (AMS) has considered the 
economic impact of this action on small entities. Accordingly, 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 in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and the rules issued 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.
    Based on Committee data, there are approximately 1,500 growers of 
sweet cherries in the production area and approximately 62 handlers 
subject to regulation under the order. The Committee estimates that 
there are about 6 prospective applicants that may take advantage of 
this marketing opportunity. Small agricultural growers are defined by 
the Small Business Administration (SBA)(13 CFR 121.201) as those having 
annual receipts of less than $750,000, and small agricultural service 
firms are defined as those whose annual receipts are less than 
$5,000,000.
    Based on Committee data, the average production of sweet cherries 
in Washington State for the last three years is 64,676 tons. Based on 
Washington Agricultural Statistics Service data, the average grower 
price for sweet cherries in Washington State for the last three years 
is $1,943 per ton. The Committee currently estimates that there are 
1,500 sweet cherry growers. Using the Committee's 1,500 sweet cherry 
grower estimate, the average annual grower revenue is calculated to be 
approximately $83,777. Using Committee data regarding each individual 
handler's total shipments during the 2001 marketing year and a 
Committee estimated average f.o.b. price of $24.00 per 20-pound 
container in 2001, 79 percent of the Washington sweet cherry handlers 
ship under $5,000,000 worth of sweet cherries and 21 percent ship over 
$5,000,000 worth of sweet cherries. Therefore, the majority of 
Washington sweet cherry growers and handlers may be classified as small 
entities. Also, it is estimated that 6 packing facilities or receivers 
would be affected by this action. Although their size is not known, it 
is estimated that most would be considered small entities.
    Committee meetings are widely publicized in advance of the meetings 
and are held in a location central to the production area. The meetings 
are open to all industry members and other interested persons who are 
encouraged to participate in the deliberations and voice their opinions 
on topics under discussion. Thus, Committee recommendations can be 
considered to represent the interests of small business entities in the 
industry.
    This rule continues to allow persons to ship Washington sweet 
cherries outside the area of production for grading and packing. 
Applicants desiring to ship or receive sweet cherries for grading or 
packing outside the production area will be required to submit an 
application to the Committee. The applicants will certify that all 
production area cherries graded or packed outside the production area 
will be inspected by the Federal or the Federal-State Inspection 
Service and will meet the minimum grade, size, maturity, container, and 
pack requirements established under Sec.  923.322 prior to shipment. 
Persons who are approved by the Committee to ship or receive will 
report all production area sweet cherries shipped or received for 
grading or packing outside the production area at the close of business 
every Friday.
    Regarding the impact of this action on affected entities, this rule 
will impose minimal additional costs. As previously mentioned, the 
Committee estimates that about six prospective applicants may desire to 
ship or receive sweet cherries for grading or packing outside the 
production area during the marketing year. Such applicants will be 
required to submit a Shippers/Receivers Application for Special Purpose 
Shipment Certificate and receive approval from the Committee prior to 
shipping or receiving any production area sweet cherries each year for 
grading or packing. After the Committee approves an application, both 
applicants will be required to submit a

[[Page 37065]]

weekly Special Purpose Shipment Report to the Committee when Washington 
sweet cherries are shipped or received for grading or packing along 
with inspection certificates or other information required by the 
Committee for verification purposes. The Committee estimates that each 
affected applicant will submit about 10 of these reports annually. The 
annual industry burden associated with this information collection is 
estimated to total approximately 5 hours.
    An alternative to this action would be to not allow Washington 
sweet cherries to be shipped outside the production area for grading or 
packing. This alternative would limit the flexibility of growers and 
handlers to make decisions related to the grading, packing, and 
marketing of Washington sweet cherries. Another alternative would be to 
allow shipments of such sweet cherries for grading or packing outside 
the production area, but not require any reporting. The Committee did 
not support this alternative because of the lack of any safeguards to 
ensure compliance with the handling requirements implemented under the 
order. Allowing the shipment of Washington sweet cherries outside the 
production area for grading or packing is a relaxation of order 
requirements and any costs related to additional reporting will be 
greatly outweighed by the benefits of allowing such shipments.
    This rule will impose an additional reporting and recordkeeping 
burden on persons who ship or receive sweet cherries for grading or 
packing outside the production area. This action requires two new 
Committee forms. In accordance with the Paperwork Reduction Act of 1995 
(44 U.S.C. Chapter 35), the information collection requirements on 
these two Committee forms was approved by the Office of Management and 
Budget (OMB) under OMB Control No. 0581-0214 on March 31, 2003.
    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. In addition, as 
noted in the initial regulatory flexibility analysis, USDA has not 
identified any relevant Federal rules that duplicate, overlap or 
conflict with this rule.
    Further, the Committee's meeting was widely publicized throughout 
the sweet cherry industry and all interested persons were invited to 
attend the meeting and participate in Committee deliberations on all 
issues. Like all Committee meetings, the May 14, 2002, meeting was a 
public meeting and all entities, both large and small, were able to 
express views on this issue.
    An interim final rule concerning this action was published in the 
Federal Register on April 2, 2003 (68 FR 15923). Copies of this rule 
were mailed by the Committee staff to all Committee members. In 
addition, the rule was made available through the Internet by the 
Office of the Federal Register and the USDA. That rule provided for a 
60-day comment period that ended June 2, 2003. No comments were 
received.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: 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 Committee's recommendation, and other information, it is found that 
finalizing the interim final rule, without change, as published in the 
Federal Register (68 FR 15923, April 2, 2003) will tend to effectuate 
the declared policy of the Act.

List of Subjects in 7 CFR Part 923

    Cherries, Marketing agreements, Reporting and recordkeeping 
requirements.

PART 923--SWEET CHERRIES GROWN IN DESIGNATED COUNTIES IN WASHINGTON

0
Accordingly, the interim final rule amending 7 CFR part 923 that was 
published at 68 FR 15923 on April 2, 2003, is adopted as a final rule 
without change.

    Dated: June 17, 2003.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 03-15739 Filed 6-20-03; 8:45 am]
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