[Federal Register Volume 68, Number 249 (Tuesday, December 30, 2003)]
[Proposed Rules]
[Pages 75148-75153]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-31946]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 930

[Docket No. FV04-930-1 PR]


Tart Cherries Grown in the States of Michigan, et al.; Final Free 
and Restricted Percentages for the 2003-2004 Crop Year for Tart 
Cherries

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposal invites comments on the establishment of final 
free and restricted percentages for the 2003-2004 crop year. The 
percentages are 75 percent free and 25 percent restricted and would 
establish the proportion of cherries from the 2003 crop which may be 
handled in commercial outlets. The percentages are intended to 
stabilize supplies and prices, and strengthen market conditions and 
were recommended by the Cherry Industry Administrative Board (Board), 
the body which locally administers the marketing order. The marketing 
order regulates the handling of tart cherries grown in the States of 
Michigan, New York, Pennsylvania, Oregon, Utah, Washington, and 
Wisconsin.

DATES: Comments must be received by January 14, 2004.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this action. Comments must be sent to the Docket Clerk, 
Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW 
STOP 0237, Washington, DC 20250-0237; Fax: (202) 720-8938, or E-mail: 
[email protected]. All comments should reference the docket 
number and the date and page number of this issue of the Federal 
Register and will be made available for public inspection in the Office 
of the Docket Clerk during regular business hours or can be viewed at: 
http://www.ams/usda.gov/fv/moab/html.

FOR FURTHER INFORMATION CONTACT: Patricia A. Petrella or Kenneth G. 
Johnson, Marketing Order Administration Branch, Fruit and Vegetable 
Programs, AMS, USDA, Suite 2A04, Unit 155, 4700 River Road, Riverdale, 
MD 20737; telephone: (301)

[[Page 75149]]

734-5243, or Fax: (301) 734-5275; 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, or Fax: (202) 720-8938.
    Small businesses may request information on complying 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, 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 proposal is issued under Marketing 
Agreement and Order No. 930 (7 CFR part 930), regulating the handling 
of tart cherries produced in the States of Michigan, New York, 
Pennsylvania, Oregon, Utah, Washington, and Wisconsin, 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 (Department) is issuing this rule in 
conformance with Executive Order 12866.
    This proposal has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the marketing order provisions now in effect, 
final free and restricted percentages may be established for tart 
cherries handled by handlers during the crop year. This rule would 
establish final free and restricted percentages for tart cherries for 
the 2003-2004 crop year, beginning July 1, 2003, through June 30, 2004. 
This rule would 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 Sec.  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 exempt 
therefrom. Such 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 in equity to review 
the Secretary's ruling on the petition, provided an action is filed not 
later than 20 days after the date of the entry of the ruling.
    The order prescribes procedures for computing an optimum supply and 
preliminary and final percentages that establish the amount of tart 
cherries that can be marketed throughout the season. The regulations 
apply to all handlers of tart cherries that are in the regulated 
districts. Tart cherries in the free percentage category may be shipped 
immediately to any market, while restricted percentage tart cherries 
must be held by handlers in a primary or secondary reserve, or be 
diverted in accordance with Sec.  930.59 of the order and Sec.  930.159 
of the regulations, or used for exempt purposes (and obtaining 
diversion credit) under Sec.  930.62 of the order and Sec.  930.162 of 
the regulations. The regulated Districts for this season are: District 
one--Northern Michigan; District two--Central Michigan; District 
three--Southwest Michigan; District seven--Utah; District eight--
Washington and District nine--Wisconsin. Districts four, five, and six 
(New York, Oregon, and Pennsylvania, respectively) would not be 
regulated for the 2003-2004 season.
    The order prescribes under Sec.  930.52 that those districts to be 
regulated shall be those districts in which the average annual 
production of cherries over the prior three years has exceeded six 
million pounds. A district not meeting the six million-pound 
requirement shall not be regulated in such crop year. Because this 
requirement was not met in the districts of Oregon, and Pennsylvania, 
handlers in those districts would not be subject to volume regulation 
during the 2003-2004 crop year. Section 930.52 also prescribes that any 
district producing a crop which is less than 50 percent of the average 
annual processed production in that district in the previous five years 
would be exempt from any volume regulation if, in that year, a 
restricted percentage is established. Because New York's production is 
less than 50 percent of the previous 5-year production average, 
handlers in New York also would not be subject to volume regulation 
during the 2003-2004 crop year.
    Demand for tart cherries at the farm level is derived from the 
demand for tart cherry products at retail. Demand for tart cherries and 
tart cherry products tends to be relatively stable from year to year. 
The supply of tart cherries, by contrast, varies greatly from crop year 
to crop year. The magnitude of annual fluctuations in tart cherry 
supplies is one of the most pronounced for any agricultural commodity 
in the United States. In addition, since tart cherries are processed 
either into cans or frozen, they can be stored and carried over from 
crop year to crop year. This creates substantial coordination and 
marketing problems. The supply and demand for tart cherries is rarely 
balanced. The primary purpose of setting free and restricted 
percentages is to balance supply with demand and reduce large surpluses 
that may occur.
    Section 930.50(a) of the order describes procedures for computing 
an optimum supply for each crop year. The Board must meet on or about 
July 1 of each crop year, to review sales data, inventory data, current 
crop forecasts and market conditions. The optimum supply volume shall 
be calculated as 100 percent of the average sales of the prior three 
years to which is added a desirable carryout inventory not to exceed 20 
million pounds or such other amount as may be established with the 
approval of the Secretary. The optimum supply represents the desirable 
volume of tart cherries that should be available for sale in the coming 
crop year.
    The order also provides that on or about July 1 of each crop year, 
the Board is required to establish preliminary free and restricted 
percentages. These percentages are computed by deducting the actual 
carryin inventory from the optimum supply figure (adjusted to raw 
product equivalent--the actual weight of cherries handled to process 
into cherry products) and subtracting that figure from the current 
year's USDA crop forecast. If the resulting number is positive, this 
represents the estimated over-production, which would be the restricted 
percentage tonnage. The restricted percentage tonnage is then divided 
by the sum of the USDA crop forecast or by an average of such other 
crop estimates for the regulated districts to obtain percentages for 
the regulated districts. The Board is required to establish a 
preliminary restricted percentage equal to the quotient, rounded to the 
nearest whole number, with the complement being the preliminary free 
tonnage percentage. If the tonnage requirements for the year are more 
than the USDA crop forecast, the Board is required to establish a 
preliminary free tonnage percentage of 100 percent and a preliminary 
restricted percentage of zero. The Board is required to announce the 
preliminary percentages in accordance with paragraph (h) of Sec.  
930.50.
    The Board met on June 26, 2003, and computed, for the 2003-2004 
crop year, an optimum supply of 180 million

[[Page 75150]]

pounds. The Board recommended that the desirable carryout figure be 
zero pounds. Desirable carryout is the amount of fruit required to be 
carried into the succeeding crop year and is set by the Board after 
considering market circumstances and needs. This figure can range from 
zero to a maximum of 20 million pounds. The Board calculated 
preliminary free and restricted percentages as follows: The USDA 
estimate of the crop was 218 million pounds; a 10 million pound carryin 
added to that estimate results in a total available supply of 228 
million pounds. The carryin figure reflects the amount of cherries that 
handlers actually have in inventory. Subtracting the optimum supply of 
180 million pounds from the total estimated available supply results in 
a surplus of 48 million pounds of tart cherries. The surplus was 
divided by the production in the regulated districts (205 million 
pounds) and resulted in a restricted percentage of 23 percent for the 
2003-2004 crop year. The free percentage was 77 percent (100 percent 
minus 23 percent). The Board established these percentages and 
announced them to the industry as required by the order.
    The preliminary percentages were based on the USDA production 
estimate and the following supply and demand information available at 
the June meeting for the 2003-2004 year:

------------------------------------------------------------------------
                                                            Millions of
                                                              pounds
------------------------------------------------------------------------
Optimum Supply Formula:
    (1) Average sales of the prior three years..........             180
    (2) Plus desirable carryout.........................               0
    (3) Optimum supply calculated by the Board at the                180
     June meeting.......................................
Preliminary Percentages:
    (4) USDA crop estimate..............................             218
    (5) Plus carryin held by handlers as of July 1, 2003              10
    (6) Total available supply for current crop year....             228
    (7) Surplus (item 6 minus item 3)...................              48
    (8) USDA crop estimate for regulated districts......             205


------------------------------------------------------------------------
               Percentages                     Free         Restricted
------------------------------------------------------------------------
(11) Preliminary percentages (item 7                  77              23
 divided by item 8 x 100 equals
 restricted percentage; 100 minus
 restricted percentage equals free
 percentage)............................
------------------------------------------------------------------------

    Between July 1 and September 15 of each crop year, the Board may 
modify the preliminary free and restricted percentages by announcing 
interim free and restricted percentages to adjust to the actual pack 
occurring in the industry.
    The Secretary establishes final free and restricted percentages 
through the informal rulemaking process. These percentages would make 
available the tart cherries necessary to achieve the optimum supply 
figure calculated by the Board. The difference between any final free 
percentage designated by the Secretary and 100 percent is the final 
restricted percentage. The Board met on September 12, 2003, to 
recommend final free and restricted percentages.
    The actual production reported by the Board was 222 million pounds, 
which is a four million pound increase from the USDA crop estimate of 
218 million pounds.
    A 10 million pound carryin was added to the Board's reported 
production of 222 million pounds, yielding a total available supply for 
the current crop year of 232 million pounds. The optimum supply of 180 
million pounds was subtracted from the total available supply which 
resulted in a 52 million pound surplus. The total surplus of 52 million 
pounds is divided by the 210 million-pound volume of tart cherries 
produced in the regulated districts. This results in a 25 percent 
restricted percentage and a corresponding 75 percent free percentage 
for the regulated districts.
    The final percentages are based on the Board's reported production 
figures and the following supply and demand information available in 
September for the 2003-2004 crop year:

------------------------------------------------------------------------
                                                            Millions of
                                                              pounds
------------------------------------------------------------------------
Optimum Supply Formula:
    (1) Average sales of the prior three years..........             180
    (2) Plus desirable carryout.........................               0
    (3) Optimum supply calculated by the Board at the                180
     October meeting....................................
Final Percentages:
    (4) Board reported production.......................             222
    (5) Plus carryin held by handlers as of July 1, 2003              10
    (6) Tonnage available for current crop year.........             232
    (7) Surplus (item 6 minus item 3)...................              52
    (8) Production in regulated districts...............             210


------------------------------------------------------------------------
               Percentages                     Free         Restricted
------------------------------------------------------------------------
(11) Final Percentages (item 7 divided                75              25
 by item 8 x 100 equals restricted
 percentage; 100 minus restricted
 percentage equals free percentage).....
------------------------------------------------------------------------

    The Department's ``Guidelines for Fruit, Vegetable, and Specialty 
Crop Marketing Orders'' specify that 110 percent of recent years' sales 
should be made available to primary markets each season before 
recommendations for

[[Page 75151]]

volume regulation are approved. This goal would be met by the 
establishment of a preliminary percentage which releases 100 percent of 
the optimum supply and the additional release of tart cherries provided 
under Sec.  930.50(g). This release of tonnage, equal to 10 percent of 
the average sales of the prior three years sales, is made available to 
handlers each season. The Board recommended that such release should be 
made available to handlers the first week of December and the first 
week of May. Handlers can decide how much of the 10 percent release 
they would like to receive on the December and May release dates. Once 
released, such cherries are released for free use by such handler. 
Approximately 18 million pounds would be made available to handlers 
this season in accordance with Department Guidelines. This release 
would be made available to every handler and released to such handler 
in proportion to its percentage of the total regulated crop handled. If 
a handler does not take his/her proportionate amount, such amount shall 
remain in the inventory reserve.

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 
initial regulatory flexibility analysis. The Regulatory Flexibility Act 
(RFA) would allow 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 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.
    There are approximately 40 handlers of tart cherries who are 
subject to regulation under the tart cherry marketing order and 
approximately 900 producers of tart cherries in the regulated area. 
Small agricultural service firms, which includes 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. A majority of the producers and handlers are considered small 
entities under SBA's standards.
    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 1998/99 through 2002/03, approximately 91 percent of 
the U.S. tart cherry crop, or 240.6 million pounds, was processed 
annually. Of the 240.6 million pounds of tart cherries processed, 55 
percent was frozen, 30 percent was canned, and 15 percent was utilized 
for juice and other products.
    Based on National Agricultural Statistics Service data, acreage in 
the United States devoted to tart cherry production has been trending 
downward. Bearing acreage has declined from a high of 50,050 acres in 
1987/88 to 36,900 acres in 2002/03. This represents a 26 percent 
decrease in total bearing acres. Michigan leads the nation in tart 
cherry acreage with 70 percent of the total and produces about 75 
percent of the U.S. tart cherry crop each year.
    The 2003/04 crop is moderate in size at 222.1 million pounds. The 
largest crop occurred in 1995 with production in the regulated 
districts reaching a record 395.6 pounds. The price per pound received 
by tart cherry growers ranged from a low of 7.3 cents in 1987 to a high 
of 46.4 cents in 1991. These problems of wide supply and price 
fluctuations in the tart cherry industry are national in scope and 
impact. Growers testified during the order promulgation process that 
the prices they received often did not come close to covering the costs 
of production.
    The industry demonstrated a need for an order during the 
promulgation process of the marketing order because large variations in 
annual tart cherry supplies tend to lead to fluctuations in prices and 
disorderly marketing. As a result of these fluctuations in supply and 
price, growers realize less income. The industry chose a volume control 
marketing order to even out these wide variations in supply and improve 
returns to growers. During the promulgation process, proponents 
testified that small growers and processors would have the most to gain 
from implementation of a marketing order because many such growers and 
handlers had been going out of business due to low tart cherry prices. 
They also testified that, since an order would help increase grower 
returns, this should increase the buffer between business success and 
failure because small growers and handlers tend to be less capitalized 
than larger growers and handlers.
    Aggregate demand for tart cherries and tart cherry products tends 
to be relatively stable from year-to-year. Similarly, prices at the 
retail level show minimal variation. Consumer prices in grocery stores, 
and particularly in food service markets, largely do not reflect 
fluctuations in cherry supplies. Retail demand is assumed to be highly 
inelastic which indicates that price reductions do not result in large 
increases in the quantity demanded. Most tart cherries are sold to food 
service outlets and to consumers as pie filling; frozen cherries are 
sold as an ingredient to manufacturers of pies and cherry desserts. 
Juice and dried cherries are expanding market outlets for tart 
cherries.
    Demand for tart cherries at the farm level is derived from the 
demand for tart cherry products at retail. In general, the farm-level 
demand for a commodity consists of the demand at retail or food service 
outlets minus per-unit processing and distribution costs incurred in 
transforming the raw farm commodity into a product available to 
consumers. These costs comprise what is known as the ``marketing 
margin.''
    The supply of tart cherries, by contrast, varies greatly. The 
magnitude of annual fluctuations in tart cherry supplies is one of the 
most pronounced for any agricultural commodity in the United States. In 
addition, since tart cherries are processed either into cans or frozen, 
they can be stored and carried over from year-to-year. This creates 
substantial coordination and marketing problems. The supply and demand 
for tart cherries is rarely in equilibrium. As a result, grower prices 
fluctuate widely, reflecting the large swings in annual supplies.
    In an effort to stabilize prices, the tart cherry industry uses the 
volume control

[[Page 75152]]

mechanisms under the authority of the Federal marketing order. This 
authority allows the industry to set free and restricted percentages. 
These restricted percentages are only applied to states or districts 
with a 3-year average of production greater than six million pounds.
    The primary purpose of setting restricted percentages is an attempt 
to bring supply and demand into balance. If the primary market is over-
supplied with cherries, grower prices decline substantially.
    The tart cherry sector uses an industry-wide storage program as a 
supplemental coordinating mechanism under the Federal marketing order. 
The primary purpose of the storage program is to warehouse supplies in 
large crop years in order to supplement supplies in short crop years. 
The storage approach is feasible because the increase in price--when 
moving from a large crop to a short crop year--more than offsets the 
cost for storage, interest, and handling of the stored cherries.
    The price that growers' receive for their crop is largely 
determined by the total production volume and carryin inventories. The 
Federal marketing order permits the industry to exercise supply control 
provisions, which allow for the establishment of free and restricted 
percentages for the primary market, and a storage program. The 
establishment of restricted percentages impacts the production to be 
marketed in the primary market, while the storage program has an impact 
on the volume of unsold inventories.
    The volume control mechanism used by the cherry industry results in 
decreased shipments to primary markets. Without volume control the 
primary markets (domestic) would likely be over-supplied, resulting in 
lower grower prices.
    To assess the impact that volume control has on the prices growers 
receive for their product, an econometric model has been developed. The 
econometric model provides a way to see what impacts volume control may 
have on grower prices. The three districts in Michigan, along with the 
districts in Utah, Washington, and Wisconsin are the restricted areas 
for this crop year and their combined total production is 210 million 
pounds. A 25 percent restriction means 158 million pounds is available 
to be shipped to primary markets from these three states. Production 
levels of 7 million pounds for New York, 1.3 million pounds for Oregon, 
and 3.8 million pounds for Pennsylvania, result in an additional 12.1 
million pounds available for primary market shipments.
    In addition, USDA requires a 10 percent release from reserves as a 
market growth factor. This results in an additional 18 million pounds 
being available for the primary market. The 158 million pounds from 
Michigan, Utah, Washington, and Wisconsin, the 12 million pounds from 
the other producing states, the 18 million pound release, and the 10 
million pound carryin inventory gives a total of 198 million pounds 
being available for the primary markets.
    The econometric model is used to estimate grower prices with and 
without regulation. Without the volume controls, the estimated grower 
price would be approximately $0.36 per pound. With volume controls, the 
estimated grower price would increase to approximately $0.43 per pound.
    The use of volume controls is estimated to have a positive impact 
on grower's total revenues. Without regulation, growers' total revenues 
from processed cherries are estimated to be $79.9 million in 2003-2004. 
In this scenario, production is 222 million pounds and price, without 
regulation, is estimated to be $0.36 per pound. With regulation, 
growers' revenues from processed cherries are estimated to be $85.1 
million. In this scenario, 198 million pounds are available for the 
primary markets with an estimated price of $0.43 per pound. Over the 
past several seasons, growers received approximately $0.10 cents for 
restricted (diverted) cherries.
    The results of econometric analysis are subject to some level of 
uncertainty. As long as average grower prices are $0.38 per pound or 
greater, then growers' are better off with the regulation. With a price 
of $0.38 per pound, the estimated revenues under no regulation would be 
similar to the revenues with a 25 percent regulation assuming that all 
the production would be sold and marketed under the no regulation 
scenario.
    It is concluded that the 25 percent volume control would not unduly 
burden producers, particularly smaller growers. The 25 percent 
restriction would be applied to the growers in Michigan, Utah, 
Washington, and Wisconsin. The growers in the other three regulated 
states will benefit from this restriction. Michigan, New York, and 
Washington produced over 91 percent of the tart cherry crop during the 
2001-2002 crop year.
    Recent grower prices have been as high as $0.44 per pound in the 
2002-2003 crop year. At current production and yield levels, the cost 
of production is reported to be $0.43 per pound. Thus, the estimated 
$0.43 per pound received by growers under the regulation scenario just 
covers the cost of production. Under the no regulation scenario, 
estimated grower prices would not cover the total cost of production. 
Lower yields and production result in higher costs of production. 
Overhead or fixed costs are spread over lower levels of production 
which result in higher costs of production per acre. Even in years when 
no production is harvested, growers face fixed costs of production and 
additional costs associated with maintaining the orchard for future 
years of production. The use of volume controls is believed to have 
little or no effect on consumer prices and will not result in fewer 
retail sales or sales to food service outlets.
    Without the use of volume controls, the industry could be expected 
to start to build large amounts of unwanted inventories. These 
inventories have a depressing effect on grower prices. The econometric 
model shows for every 1 million-pound increase in carryin inventories, 
a decrease in grower prices of $0.0033 per pound occurs. The use of 
volume controls allows the industry to supply the primary markets while 
avoiding the disastrous results of over-supplying these markets. In 
addition, through volume control, the industry has an additional supply 
of cherries that can be used to develop secondary markets such as 
exports and the development of new products. The use of reserve 
cherries in the production shortened 2002/03 crop year proved to be 
very useful and beneficial to growers and packers.
    In discussing the possibility of marketing percentages for the 
2003-2004 crop year, the Board considered the following factors 
contained in the marketing policy: (1) The estimated total production 
of tart cherries; (2) the estimated size of the crop to be handled; (3) 
the expected general quality of such cherry production; (4) the 
expected carryover as of July 1 of canned and frozen cherries and other 
cherry products; (5) the expected demand conditions for cherries in 
different market segments; (6) supplies of competing commodities; (7) 
an analysis of economic factors having a bearing on the marketing of 
cherries; (8) the estimated tonnage held by handlers in primary or 
secondary inventory reserves; and (9) any estimated release of primary 
or secondary inventory reserve cherries during the crop year.
    The Board's review of the factors resulted in the computation and 
announcement in September 2003 of the restricted percentages proposed 
in this rule (75 percent free and 25 percent restricted).

[[Page 75153]]

    One alternative to this action would be not to have volume 
regulation this season. Board members stated that no volume regulation 
would be detrimental to the tart cherry industry due to the size of the 
2003-2004 crop. Returns to growers would not cover their costs of 
production for this season which might cause some to go out of 
business.
    As mentioned earlier, the Department's ``Guidelines for Fruit, 
Vegetable, and Specialty Crop Marketing Orders'' specify that 110 
percent of recent years' sales should be made available to primary 
markets each season before recommendations for volume regulation are 
approved. The quantity available under this rule is 110 percent of the 
quantity shipped in the prior three years.
    The free and restricted percentages proposed to be established by 
this rule release the optimum supply and apply uniformly to all 
regulated handlers in the industry, regardless of size. There are no 
known additional costs incurred by small handlers that are not incurred 
by large handlers. The stabilizing effects of the percentages impact 
all handlers positively by helping them maintain and expand markets, 
despite seasonal supply fluctuations. Likewise, price stability 
positively impacts all producers by allowing them to better anticipate 
the revenues their tart cherries will generate.
    The Department has not identified any relevant Federal rules that 
duplicate, overlap, or conflict with this regulation.
    While the benefits resulting from this rulemaking are difficult to 
quantify, the stabilizing effects of the volume regulations impact both 
small and large handlers positively by helping them maintain markets 
even though tart cherry supplies fluctuate widely from season to 
season.
    In compliance with Office of Management and Budget (OMB) 
regulations (5 CFR part 1320) which implement the Paperwork Reduction 
Act of 1995 (Pub. L. 104-13), the information collection and 
recordkeeping requirements have been previously approved by OMB and 
assigned OMB Number 0581-0177.
    There are some reporting, recordkeeping, and other compliance 
requirements under the marketing order. The reporting and recordkeeping 
burdens are necessary for compliance purposes and for developing 
statistical data for maintenance of the program. The forms require 
information which is readily available from handler records and which 
can be provided without data processing equipment or trained 
statistical staff. As with other, similar marketing order programs, 
reports and forms are periodically studied to reduce or eliminate 
duplicate information collection burdens by industry and public sector 
agencies. This rule does not change those requirements.
    A 15-day comment period is provided to allow interested persons to 
respond to this proposal. Fifteen days is deemed appropriate because 
this rule needs to be in place as soon as possible to achieve its 
intended purpose of making the optimum supply quantity computed by the 
Board available to handlers marketing 2003-2004 crop year cherries. All 
written comments timely received will be considered before a final 
determination is made on this matter.

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 
proposed to be 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. Section 930.253 is added to read as follows:

    Note: This section will not appear in the annual Code of Federal 
Regulations.

Sec.  930.253  Final free and restricted percentages for the 2003-2004 
crop year.

    The final percentages for tart cherries handled by handlers during 
the crop year beginning on July 1, 2003, which shall be free and 
restricted, respectively, are designated as follows: Free percentage, 
75 percent and restricted percentage, 25 percent.

    Dated: December 22, 2003.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 03-31946 Filed 12-29-03; 8:45 am]
BILLING CODE 3410-02-P