[Federal Register Volume 70, Number 10 (Friday, January 14, 2005)]
[Proposed Rules]
[Pages 2573-2577]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-825]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 923

[Docket Nos. AO-F&V-923-3 FV03-923-01]


Sweet Cherries Grown in Designated Counties in Washington; 
Secretary's Decision and Referendum Order on Proposed Amendments to 
Marketing Agreement and Order No. 923

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule and referendum order.

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SUMMARY: This decision proposes amending the marketing agreement and 
order (order) for sweet cherries grown in Washington, and provides 
growers with the opportunity to vote in a referendum to determine if 
they favor the changes. The amendments are based on those proposed by 
the Washington Cherry Marketing Committee (Committee), which is 
responsible for local administration of the order. The amendments 
include: adding authority for promotion, including paid advertising, 
and production research projects; adding authority for supplemental 
rates of assessment for individual varieties of cherries; adding 
authority for the Committee to accept voluntary contributions for 
research and promotion; and, adding a public member to the Committee. 
Two additional amendments are based on those proposed by the 
Agricultural Marketing Service: Establishing tenure limitations for 
Committee members and, requiring that continuance referenda be

[[Page 2574]]

conducted every 6 years. The proposed amendments are intended to 
improve the operation and functioning of the sweet cherry marketing 
order program.

DATES: The referendum will be conducted from March 1 through March 21, 
2005. The representative period for the purpose of the referendum is 
April 1, 2003 through March 31, 2004.

FOR FURTHER INFORMATION CONTACT: Melissa Schmaedick, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, Agricultural 
Marketing Service, USDA, Post Office Box 1035, Moab, UT 84532, 
telephone: (435) 259-7988, fax: (435) 259-4945.
    Small businesses may request information on this proceeding 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.

SUPPLEMENTARY INFORMATION: Prior documents in this proceeding include: 
a Notice of Hearing issued on October 6, 2003, and published in the 
October 10, 2003, issue of the Federal Register (68 FR 58636), and a 
Recommended Decision issued on September 29, 2004 and published in the 
October 5, 2004 issue of the Federal Register (69 FR 59551).
    This administrative action is governed by the provisions of 
sections 556 and 557 of title 5 of the United States Code and is 
therefore excluded from the requirements of Executive Order 12866.

Preliminary Statement

    The amendments are based on the record of a public hearing held 
November 18, 2003, in Yakima, Washington. The hearing was held to 
consider the proposed amendment of Marketing Agreement and Order No. 
923, regulating the handling of sweet cherries grown in the State of 
Washington, hereinafter referred to 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 the formulation of marketing agreements and marketing orders 
(7 CFR part 900). The Notice of Hearing contained numerous proposals 
submitted by the Committee and two proposals by the Agricultural 
Marketing Committee (AMS).
    The amendments included in this decision would: (1) Add the 
authority for promotion, including paid advertising, and production 
research projects; (2) add the authority for supplemental rates of 
assessment for individual varieties of cherries; (3) add the authority 
for the Committee to accept voluntary contributions for marketing 
research and promotion, including paid advertising, and production 
research projects; and (4) add a public member and alternate public 
member to the Committee.
    The Fruit and Vegetable Programs of AMS proposed to establish 
tenure limitations for Committee members and to require that 
continuance referenda be conducted on a periodic basis to ascertain 
grower support for the order. In addition, AMS proposed to allow such 
changes as may be necessary to the order, if any of the proposed 
changes are adopted, so that all of the order's provisions conform to 
the effectuated amendments.
    Upon the basis of evidence introduced at the hearing and the record 
thereof, the Administrator of AMS on October 4, 2004, filed with the 
Hearing Clerk, U.S. Department of Agriculture, a Recommended Decision 
and Opportunity to File Written Exceptions thereto by November 4, 2004. 
That document also announced AMS's intent to request approval of new 
information collection requirements to implement the program. Written 
comments on the proposed information collection requirements were due 
by November 4, 2004. None were filed.

Small Business Considerations

    Pursuant to the 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, the AMS has prepared this initial 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 growers 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 are defined as those with annual receipts of 
less than $5,000,000.
    The record shows that there are approximately 1,500 growers of 
sweet cherries in the production area and approximately 62 handlers 
subject to regulation under the order. The average production of sweet 
cherries in Washington State for the last three years is 64,676 tons 
with an average grower price of $1,943 per ton. Using this number, the 
average annual grower revenue is calculated to be approximately 
$83,777, thus indicating that the average Washington sweet cherry 
grower would qualify as a small entity according to the SBA definition.
    Using Committee data regarding each individual handler's total 
shipments during the 2002 marketing year, and an estimated average FOB 
price of $24 per 20-pound container, 79 percent of the Washington sweet 
cherry handlers shipped under $5 million worth of sweet cherries, and 
21 percent shipped over $5 million worth of sweet cherries. Therefore, 
the majority of Washington sweet cherry handlers may be classified as 
small entities.
    The Committee is currently comprised of 10 growers and 6 handlers. 
Both small and large growers and handlers are members and member 
alternates on the Committee. 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 all 
other interested persons, who are encouraged to participate in the 
deliberations and voice their opinions on topics under discussion.
    At a May 22, 2003, full Committee meeting, all industry 
representatives present could present their views concerning the 
recommended amendments. Both large and small businesses were 
represented. The Committee believes that small and large entities would 
benefit equally from the proposed amendments.
    Testimony indicates that the proposal to include paid advertising 
and production research under the order would assist both small and 
large growers and handlers in marketing Washington sweet cherry crops. 
While addition of this authority could result in increased assessments 
under the order, witnesses stated that the benefits arising from these 
activities, as evidenced by similar activities under the Commission, 
would outweigh the costs.
    Similarly, the proposal to add authority for supplemental varietal 
assessments could require additional payments per individual variety of 
sweet cherry. However, witnesses stated that they believed the benefits 
of those research and promotion activities would outweigh the costs.
    Witnesses used the example of recent Commission activities as 
evidence that research and promotion activities would lead to increased 
grower returns and market stability by providing tools to the industry 
to address expanding production and evolving consumer trends in the 
industry. Witnesses were unanimous in their belief that the benefits of 
the Commission's activities

[[Page 2575]]

more than outweigh the costs of these programs. They stated that the 
same results would be expected from any such activities conducted under 
the order.
    The proposal to add authority for the Committee to accept voluntary 
contributions would not result in any increased costs or burdens to the 
industry. In fact, witnesses stated that this authority would benefit 
the industry greatly as it could provide for additional funding sources 
of research and promotional activities. Safeguards against donor 
control over the use of voluntary contributions would ensure that these 
funds would be used in the best interest of the industry. The Committee 
would decide how to use those funds, and the decision-making process 
would be open to industry input and feedback.
    The proposal to add a public member and alternate public member to 
the Committee is not expected to result in any substantial cost 
increases. While the new members would be entitled to reimbursement for 
their expenses, the additional cost would be minimal. Additionally, the 
benefit of adding a non-industry, consumer perspective to Committee 
deliberations and decision-making could prove very beneficial. 
Witnesses stated that this additional perspective would improve the 
Committee's understanding of the consumer in the marketplace and could 
enhance Committee activities aimed at increasing consumer demand for 
Washington sweet cherries.
    The proposed amendment to add tenure requirements for Committee 
members would allow more persons the opportunity to serve as members of 
the Committee. It would provide for more diverse membership, provide 
the Committee with new perspectives and ideas, and increase the number 
of individuals in the industry with Committee experience.
    The proposal to require continuance referenda on a periodic basis 
to ascertain grower support for the order would allow growers to vote 
on whether to continue the operation of the program. The referenda 
would be conducted by USDA.
    Interested persons were invited to present evidence at the hearing 
on the probable regulatory and informational impacts of the proposed 
amendments to the order on small entities. The record evidence is that 
while some minimal costs may occur, those costs would be outweighed by 
the benefits expected to accrue to the sweet cherry industry in 
designated counties of Washington.
    The Department has not identified any relevant Federal rules that 
duplicate, overlap or conflict with this proposed rule. All of the 
amendments are designed to enhance the administration and functioning 
of the program to the benefit of Washington cherry growers and 
handlers.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), AMS has submitted a request to OMB for approval of the 
increase in information collection burden for the Washington Cherry 
marketing order.
    This decision adds a public member and alternate public member to 
the Committee. A confidential qualification and acceptance statement 
would be used to nominate and appoint the public and alternate public 
committee members. This form is based on the currently approved 
Confidential Background Statement for the Washington Cherry Marketing 
Committee. If this proposal is implemented the form would only be used 
after approval by OMB.

Civil Justice Reform

    The amendments to Marketing Order 923 proposed herein have been 
reviewed under Executive Order 12988, Civil Justice Reform. They are 
not intended to have retroactive effect. If adopted, the proposed 
amendments would not preempt any State or local laws, regulations, or 
policies, unless they present an irreconcilable conflict with this 
proposal.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 608c(15)(A) of the 
Act, any handler subject to an order may file with the Department 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 
there from. A handler is afforded the opportunity for a hearing on the 
petition. After the hearing, the 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 the 
Department's ruling on the petition, provided an action is filed not 
later than 20 days after the date of the entry of the ruling.

Findings and Conclusions

    The material issues, findings and conclusions, rulings, and general 
findings and determinations included in the Recommended Decision set 
forth in the October 5, 2004, issue of the Federal Register are hereby 
approved and adopted.

Marketing Agreement and Order

    Annexed hereto and made a part hereof is the document entitled 
``Order Amending the Order Regulating the Handling of Sweet Cherries 
Grown in Washington.'' This document has been decided upon as the 
detailed and appropriate means of effectuating the foregoing findings 
and conclusions.
    It is hereby ordered, That this entire decision be published in the 
Federal Register.

Referendum Order

    It is hereby directed that a referendum be conducted in accordance 
with the procedure for the conduct of referenda (7 CFR part 900.400 et 
seq.) to determine whether the annexed order amending the order 
regulating the handling of sweet cherries grown in Washington is 
approved or favored by growers, as defined under the terms of the 
order, who during the representative period were engaged in the 
production of sweet cherries in the production area.
    The representative period for the conduct of such referendum is 
hereby determined to be April 1, 2004, through February 28, 2005.
    The agent of the Secretary to conduct such referendum is hereby 
designated to be Robert Curry and Gary Olson, Northwest Marketing Field 
Office, Marketing Order Administration Branch, Fruit and Vegetable 
Programs, AMS, USDA, 1220 SW. Third Avenue, Room 369, Portland, Oregon 
97204; telephone (503) 326-2724.

List of Subjects in 7 CFR Part 923

    Cherries, Marketing agreements, Reporting and recordkeeping 
requirements.

    Dated: January 11, 2005.
A.J. Yates,
Administrator, Agricultural Marketing Service.

Order Amending the Order Regulating the Handling of Sweet Cherries 
Grown in Washington \1\

Findings and Determinations

    The findings hereinafter set forth are supplementary to the 
findings and determinations which were previously made in connection 
with the issuance of the marketing agreement and order; and

[[Page 2576]]

all 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.
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    \1\ This order shall not become effective unless and until the 
requirements of Sec. 900.14 of the rules of practice and procedure 
governing proceedings to formulate marketing agreements and 
marketing orders have been met.
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    (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 927), regulating the handling 
of sweet cherries grown 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 amended, and as hereby 
proposed to be further amended, and all of the terms and conditions 
thereof, would tend to effectuate the declared policy of the Act;
    (2) The marketing agreement and order, as amended, and as hereby 
proposed to be further amended, regulate the handling of sweet cherries 
grown in the production area in the same manner as, and are applicable 
only to, persons in the respective classes of commercial and industrial 
activity specified in the marketing agreement and order upon which a 
hearing has been held;
    (3) The marketing agreement and order, as amended, and as hereby 
proposed to be further amended, are limited in their application to the 
smallest regional production area which is practicable, consistent with 
carrying out the declared policy of the Act, and the issuance of 
several orders applicable to subdivisions of the production area would 
not effectively carry out the declared policy of the Act;
    (4) The marketing agreement and order, as amended, and as hereby 
proposed to be further 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 as 
defined in the marketing agreement and order, is in the current of 
interstate or foreign commerce or directly burdens, obstructs, or 
affects such commerce.

Order Relative to Handling

    It is therefore ordered, That on and after the effective date 
hereof, all handling of sweet cherries grown in Washington shall be in 
conformity to, and in compliance with, the terms and conditions of the 
said order as hereby proposed to be amended as follows:
    The provisions of the proposed marketing agreement and order 
amending the order contained in the Recommended Decision issued by the 
Administrator on September 29, 2004, and published in the Federal 
Register on October 5, 2004, will be and are the terms and provisions 
of this order amending the order and are set forth in full herein.

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. Section 923.20 is revised to read as follows:


Sec.  923.20  Establishment and membership.

    There is hereby established a Washington Cherry Marketing Committee 
consisting of seventeen members, each of whom shall have an alternate 
who shall have the same qualifications as the member for whom he or she 
is an alternate. Ten members and their respective alternates shall be 
growers or officers or employees of corporate growers. Six of the 
members and their respective alternates shall be handlers, or officers 
or employees of handlers. One member and his or her respective 
alternate shall be a public member who is neither a grower nor a 
handler. The ten members of the committee who are growers or employees 
or officers of corporate growers are referred to in this part as 
``grower members'' of the committee; and six members of the committee 
who shall be handlers, or officers or employees of handlers are 
referred to in this part as ``handler members'' of the committee. Five 
of the grower members and their respective alternates shall be growers 
of cherries in District 1, and five of the grower members and their 
respective alternates shall be growers of cherries in District 2. Three 
of the handler members and their respective alternates shall be 
handlers of cherries in District 1, and three of the handler members 
and their representative alternates shall be handlers of cherries in 
District 2.
    3. Revise Sec.  923.21 to read as follows:


Sec.  923.21  Term of office.

    The term of office of each member and alternate member of the 
committee shall be for two years beginning April 1 and ending March 31. 
Members and alternate members shall serve in such capacities for the 
portion of the term of office for which they are selected and have 
qualified and until their respective successors are selected and have 
qualified. Committee members shall not serve more than three 
consecutive terms. Members who have served for three consecutive terms 
must leave the committee for at least one year before becoming eligible 
to serve again.
    4. Amend Sec.  923.22 by adding a new paragraph (b)(4) to read as 
follows:


Sec.  923.22  Nomination.

* * * * *
    (b) * * *
    (4) The grower and handler members of the committee shall nominate 
the public member and alternate public member at the first meeting 
following the selection of members for a new term of office.
    5. In Sec.  923.41, paragraph (c) is redesignated as paragraph (d) 
and a new paragraph (c) is added to read as follows:


Sec.  923.41  Assessments.

* * * * *
    (c) Based upon a recommendation of the committee or other available 
information, the Secretary shall fix the rate of assessment that 
handlers shall pay on all cherries handled during each fiscal period, 
and may also fix supplemental rates of assessment on individual 
varieties or subvarieties to secure sufficient funds to provide for 
projects authorized under Sec.  923.45. At any time during the fiscal 
period when it is determined on the basis of a committee recommendation 
or other information that a different rate is necessary for all 
cherries or for any varieties or subvarieties, the Secretary may modify 
a rate of assessment and such new rate shall apply to any or all 
varieties or subvarieties that are shipped during the fiscal period.
* * * * *
    6. A new Sec.  923.43 is added to read as follows:


Sec.  923.43  Contributions.

    The committee may accept voluntary contributions but these shall 
only be used to pay expenses incurred pursuant to Sec.  923.45. 
Furthermore, such contributions shall be free from any encumbrances by 
the donor and the committee shall retain complete control of their use.

[[Page 2577]]

    7. Section 923.45 is revised to read as follows:


Sec.  923.45  Production and marketing research, promotion and market 
development.

    The committee, with the approval of the Secretary, may establish or 
provide for the establishment of projects involving production 
research, marketing research and development, and marketing promotion, 
including paid advertising, designed to assist, improve, or promote the 
marketing, distribution, consumption or efficient production of 
cherries. The expense of such projects shall be paid from funds 
collected pursuant to Sec. Sec.  923.41 and 923.43.
    8. Section 923.64 is amended by:
    A. Revising paragraph (c).
    B. Redesignating paragraph (d) as paragraph (e).
    C. Adding a new paragraph (d).
    The revision and addition read as follows:


Sec.  923.64  Termination.

* * * * *
    (c) The Secretary shall terminate the provisions of this part 
whenever it is found that such termination is favored by a majority of 
growers who, during a representative period, have been engaged in the 
production of cherries: Provided, that such majority has, during such 
representative period, produced for market more than 50 percent of the 
volume of such cherries produced for market.
    (d) The Secretary shall conduct a referendum six years after the 
effective date of this section and every sixth year thereafter, to 
ascertain whether continuance of this subpart is favored by growers. 
The Secretary may terminate the provisions of this subpart at the end 
of any fiscal period in which the Secretary has found that continuance 
of this subpart is not favored by growers who, during a representative 
period determined by the Secretary, have been engaged in the production 
of cherries in the production area.
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[FR Doc. 05-825 Filed 1-13-05; 8:45 am]
BILLING CODE 3410-02-P