[Federal Register Volume 70, Number 30 (Tuesday, February 15, 2005)]
[Rules and Regulations]
[Pages 7633-7645]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-2878]



 ========================================================================
 Rules and Regulations
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains regulatory documents 
 having general applicability and legal effect, most of which are keyed 
 to and codified in the Code of Federal Regulations, which is published 
 under 50 titles pursuant to 44 U.S.C. 1510.
 
 The Code of Federal Regulations is sold by the Superintendent of Documents. 
 Prices of new books are listed in the first FEDERAL REGISTER issue of each 
 week.
 
 ========================================================================
 

  Federal Register / Vol. 70, No. 30 / Tuesday, February 15, 2005 / 
Rules and Regulations  

[[Page 7633]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 929

[Docket Nos. AO-341-A6; FV02-929-1A]


Cranberries Grown in the States of Massachusetts, et al.; Order 
Amending Marketing Agreement and Order No. 929

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This final rule amends the marketing agreement and order for 
cranberries grown in Massachusetts, Rhode Island, Connecticut, New 
Jersey, Wisconsin, Michigan, Minnesota, Oregon, Washington, and Long 
Island in the State of New York. The amendments are based on those 
proposed by the Cranberry Marketing Committee (Committee), which is 
responsible for local administration of the order and other interested 
parties representing cranberry growers and handlers. The amendments 
will: Revise the volume control provisions; add authority for paid 
advertising; authorize the Committee to reestablish districts within 
the production area and reapportion grower membership among the various 
districts; clarify the definition of handle; and incorporate 
administrative changes. The amendments are intended to improve the 
operation and functioning of the cranberry marketing order program.

DATES: Effective Date: February 16, 2005.

FOR FURTHER INFORMATION CONTACT: Kathleen M. Finn, 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 compliance 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.

SUPPLEMENTARY INFORMATION: Prior documents in this proceeding: Notice 
of Hearing issued on April 23, 2002, and published in the May 1, 2002, 
issue of the Federal Register (67 FR 21854); Secretary's Decision on 
partial amendments issued on December 4, 2003, and published in the 
December 12 issue of the Federal Register (68 FR 69343); final order 
amending order on partial amendments issued on April 5, 2004, and 
published in the April 9 issue of the Federal Register (69 FR 18803); 
recommended decision on remainder of amendments issued on April 21, 
2004, and published in the April 28 issue of the Federal Register (69 
FR 23330); and Secretary's decision on remainder amendments issued on 
November 30, 2004, and published in the December 1 issue of the Federal 
Register (69 FR 69995).
    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 based on the record of a public 
hearing held in Plymouth, Massachusetts on May 20 and 21, 2002; in 
Bangor, Maine on May 23, 2002; in Wisconsin Rapids, Wisconsin on June 3 
and 4, 2002; and in Portland, Oregon on June 6, 2002. The hearing was 
held to consider the proposed amendment of Marketing Agreement and 
Order No. 929, regulating the handling of cranberries grown in the 
States of Massachusetts, Rhode Island, Connecticut, New Jersey, 
Wisconsin, Michigan, Minnesota, Oregon, Washington, and Long Island in 
the State of New York, 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 the formulation of marketing 
agreements and marketing orders (7 CFR part 900). The notice of hearing 
contained numerous proposals submitted by the Committee, other 
interested parties and one proposed by the Agricultural Marketing 
Service (AMS). This action adopts the remaining potion of proposed 
amendments listed in the Notice of Hearing that were not expedited in a 
previous proceeding.
    The amendments included in this decision will: Authorize the 
Committee to reestablish districts within the production area and 
reapportion grower membership among the various districts; simplify 
criteria considered and set forth more appropriate dates in 
establishing the Committee's marketing policy; revise the formula for 
calculating sales histories under the producer allotment program; allow 
compensation of sales history for catastrophic events that impact a 
grower's crop; remove specified dates relating to when information is 
required to be filed by growers/handlers in order to issue annual 
allotments; clarify how the Committee allocates unused allotment to 
handlers; allow growers who decide not to grow a crop flexibility in 
deciding what to do with their allotment; allow growers to transfer 
allotment during a year of volume regulation; authorize the 
implementation of the producer allotment and withholding programs in 
the same year; require specific authority to exempt fresh, organic or 
other forms of cranberries from order provisions; allow for greater 
flexibility in establishing other outlets for excess cranberries; 
update and streamline the withholding volume control provisions; modify 
the buy-back provisions under the withholding volume control 
provisions; add authority for paid advertising under the research and 
development provision of the order; modify the definition of handle to 
clarify that transporting fresh cranberries to foreign countries is 
considered handling and include the temporary cold storage or freezing 
of withheld cranberries as an exemption from handling; relocate some 
reporting provisions to a more suitable provision and streamline the 
language relating to verification of reports and records; and delete an 
obsolete provision from the order relating to preliminary regulation.
    The Fruit and Vegetable Programs of AMS proposed to allow such 
changes as may be necessary to the order, if any of

[[Page 7634]]

the proposed amendments are adopted, so that all of the order's 
provisions conform to the effectuated amendments.
    Upon the basis of evidence introduced at the hearing, a Secretary's 
decision was issued on December 1, 2004, directing that a referendum be 
conducted during the period December 13 to December 27, 2004, among 
growers and processors of cranberries to determine whether they favored 
the proposed amendments to the order. In the referendum, all amendments 
were favored by more than two-thirds of the growers voting in the 
referendum by number or by volume. Processors representing more than 50 
percent of the crop also approved the amendments.
    The amended marketing agreement was mailed to all cranberry 
handlers in the production area for their approval. The marketing 
agreement was approved by handlers representing more than 50 percent of 
the volume of cranberries handled by all handlers during the 
representative period of September 1, 2003, through August 31, 2004.

Small Business Considerations

    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act (RFA), 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 so that small businesses will not be 
unduly or disproportionately burdened. 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.
    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 these 
amendments will not result in additional regulatory requirements being 
imposed on some cranberry growers and handlers.
    There are about 20 handlers currently regulated under Marketing 
Order No. 929. In addition, the record indicates that there are about 
1,250 producers of cranberries in the current production area.
    Based on recent years' price and sales levels, AMS finds that 
nearly all of the cranberry producers and some of the handlers are 
considered small under the SBA definition. In 2001, a total of 34,300 
acres were harvested with an average U.S. yield per acre of 156.2 
barrels. Grower prices in 2001 averaged $22.90 per barrel. Average 
total annual grower receipts for 2001 are estimated at $153,375 per 
grower. However, there are some growers whose estimated sales would 
exceed the $750,000 threshold. Thus, these amendments will apply almost 
exclusively to small entities.
    Five handlers handle over 97 percent of the cranberry crop. Using 
Committee data on volumes handled, AMS has determined that none of 
these handlers qualify as small businesses under SBA's definition. The 
remainder of the crop is marketed by about a dozen grower-handlers who 
handle their own crops. Dividing the remaining 3 percent of the crop by 
these grower-handlers, all would be considered small businesses.
    This action amends the order to: Authorize the Committee to 
reestablish districts within the production area and reapportion grower 
membership among the various districts; simplify criteria considered 
and set forth more appropriate dates in establishing the Committee's 
marketing policy; revise the formula for calculating sales histories 
under the producer allotment program; allow compensation of sales 
history for catastrophic events that impact a grower's crop; remove 
specified dates relating to when information is required to be filed by 
growers/handlers in order to issue annual allotments; clarify how the 
Committee allocates unused allotment to handlers; allow growers who 
decide not to grow a crop flexibility in deciding what to do with their 
allotment; allow growers to transfer allotment during a year of volume 
regulation; authorize the implementation of the producer allotment and 
withholding programs in the same year; require specific dates for 
recommending volume regulation; add specific authority to exempt fresh, 
organic or other forms of cranberries from order provisions; allow for 
greater flexibility in establishing other outlets for excess 
cranberries; update and streamline the withholding volume control 
provisions; modify the buy-back provisions under the withholding volume 
control provisions; add authority for paid advertising under the 
research and development provision of the order; modify the definition 
of handle to clarify that transporting fresh cranberries to foreign 
countries is considered handling and include the temporary cold storage 
or freezing of withheld cranberries as an exemption from handling; 
relocate some reporting provisions to a more suitable provision and 
streamline the language relating to verification of reports and 
records; and delete an obsolete provision from the order relating to 
preliminary regulation.

Reestablishment of Districts and Reapportionment of Grower Membership 
Among the Districts

    The amendment to authorize the Committee to reestablish and/or 
reapportion districts will give the Committee greater flexibility in 
responding to changes in grower demographics and district significance 
in the future. This authority will allow the Committee to recommend 
changes through informal rulemaking rather than through an order 
amendment. The amendment includes specific criteria to be considered 
prior to making any recommendations.
    This authority does not change the districts. It only authorizes 
the Committee to recommend changes more efficiently. No additional 
administrative costs are anticipated with this amendment.

Development of Marketing Policy

    Section 929.46 of the order requires the Committee to develop a 
marketing policy each year as soon as practicable after August 1. In 
its marketing policy, the Committee projects expected supply and market 
conditions for the upcoming season. The marketing policy should be 
adopted before any recommendation for regulation, as it serves to 
inform USDA and the industry, in advance of the marketing of the crop, 
of the Committee's plans for regulation and the bases therefore. 
Handlers and growers can then plan their operations in accordance with 
the marketing policy.
    The Committee is currently required to consider nine criteria in 
developing its marketing policy. The criteria include such items as 
expected production, expected demand conditions, and inventory levels. 
The amendment will remove the criteria not considered to be relevant in 
making a decision on the need for volume regulation.
    The marketing order section of the order also states that the 
Committee must estimate the marketable quantity necessary to establish 
a producer allotment program by May 1, and must submit its marketing 
policy to USDA after August 1. These dates are inconsistent with the 
dates by which the Committee must recommend a volume

[[Page 7635]]

regulation (if one or both are deemed necessary) for the upcoming crop. 
This amendment will remove both dates.
    These changes are non-substantive in nature. They remove 
unnecessary criteria and obsolete dates from the order. As such, they 
will have no economic impact on growers or handlers.

Sales History Calculations Under the Producer Allotment Program

    The amendment to modify the method for calculating sales histories 
will provide growers with additional sales histories to compensate them 
for expected increases in yields on newer acres during a year of volume 
regulation, which would result in sales histories more reflective of 
actual sales. This amendment will also allow more flexibility in 
recommending changes to the formula and add the authority to calculate 
fresh and processed cranberries separately.
    The amendment to the sales history calculations will benefit a 
majority of growers, especially growers who planted some or all of 
their acreage within the previous 5 years. It will also help ensure 
that growers with mature acres who also have newer acreage and growers 
with only newer acres are treated equitably.
    During the 2000 volume regulation, many growers, particularly those 
with acreage 4 years old or less, indicated that the method of sales 
history calculation placed them at a disadvantage because they realized 
more production on their acreage than their sales history indicated. 
With the volume of new acres within the industry, this would affect 
many growers.
    The Committee determined that something needed to be done to 
address the concerns associated in the 2000 crop year with growers with 
newer acreage. The Committee discussed a number of approaches for 
estimating sales history on new acres. One suggestion was to allow 
growers with newer acreage to add a percentage of the State average 
yield to their sales history each year up to the fourth year. The 
example presented was that acreage being harvested for the second time 
during a year of volume regulation would receive a sales history that 
was 25 percent of the State average yield, a third year harvest would 
receive 50 percent of State average yield, and a fourth year harvest 
would receive 75 percent of State average yield. Although this method 
would address some of the problems experienced in 2000, it was 
determined that the method established by this action would be simpler 
and more practical for growers to obtain the most realistic sales 
history.
    This action addresses grower concerns regarding determination of 
their sales histories. The method provides additional sales history for 
growers with newer acres to account for increased yields for each 
growing year up to the fifth year by factoring in appropriate 
adjustments to reflect rapidly increasing production during initial 
harvests. The adjustments are in the form of additional sales histories 
based on the year of planting.
    An appeals process will be established in crop years when volume 
regulation is used for growers to request a redetermination of their 
sales histories. For the 2000-2001 volume regulation, over 250 appeals 
were received by the appeals subcommittee (the first level of review 
for appeals). In 2001-2002, a total of 49 appeals were filed. The 
decrease in appeals filed was a direct result of the formula for 
calculating sales histories that was implemented in 2001. This 
amendment represents a generic version of the formula that was used in 
2001.
    This amendment will not impose any immediate regulations on large 
or small growers and handlers. It will only modify the formula for 
calculating sales histories in the event volume regulations are 
implemented in the future. This amendment will benefit small businesses 
by allowing them more flexibility in receiving a more equitable sales 
history if volume regulations are recommended and implemented in future 
years. Growers and handlers will know specifically how sales histories 
are calculated so they can be informed and business decisions can be 
made ahead of the future season.
    The amendment also includes that sales histories, starting with the 
crop year following adoption of this amendment, will be calculated 
separately for fresh and processed cranberries. Fresh and organic fruit 
were exempt from the 2000 and 2001 volume regulations because it was 
determined that they did not contribute to the surplus. In both years, 
fresh fruit sales were deducted from sales histories and each grower's 
sales history represented processed sales only. To have sales histories 
more reflective of sales, the Committee proposed calculating separate 
sales histories for fresh and processed cranberries. Also, in future 
years, fresh cranberry sales could contribute to the surplus. This 
amendment makes sales history calculations more equitable.
    These changes will have a positive effect on all growers and 
handlers because they will result in a more equitable allocation of the 
marketable quantity among growers. The amendment will be favorable to 
both large and small entities.

Catastrophic Events That Impact Growers' Sales Histories

    The amendment will provide more flexibility in the provision under 
the sales history calculations that compensates growers with additional 
sales histories for losses on acreage due to forces beyond the grower's 
control.
    The current provisions require that if a grower has no commercial 
sales from acreage for 3 consecutive crop years due to forces beyond 
the grower's control, the Committee shall compute a level of commercial 
sales for the fourth year for that acreage using an estimated 
production.
    The record revealed that this provision was too stringent as 
evidenced by only one grower meeting these criteria in two years of 
volume regulation.
    The amendment will authorize the Committee to recommend rules and 
regulations to allow for adjustments of a grower's sales history to 
compensate for catastrophic events that impact a grower's crop. The 
Committee will recommend procedures and guidelines to be followed in 
each year a volume regulation is implemented. The amendment will have a 
positive impact on both large and small growers as the Committee would 
be in a position to compensate more growers who experienced losses due 
to catastrophic events than the current order provides.

Remove Specified Dates Relating To Issuing Annual Allotments

    The order currently provides that when a producer allotment 
regulation is implemented, USDA establishes an allotment percentage 
equal to the marketable quantity divided by the total of all growers' 
sales histories. The allotment percentage is then applied to each 
grower's sales history to determine that individual's annual allotment. 
All growers must file an AL-1 form with the Committee on or before 
April 15 of each year in order to receive their annual allotments. The 
Committee is required to notify each handler of the annual allotment 
that can be handled for each grower whose crop will be delivered to 
such handler on or before June 1.
    Experience during the 2000 and 2001 crop years has proven that 
maintaining a specified date by which growers are to file a form to 
qualify for their allotment and for the Committee to notify handlers of 
their growers' annual allotments has been difficult. This amendment 
will delete the specified

[[Page 7636]]

dates and allow the Committee to determine, with the approval of USDA, 
more appropriate dates by which growers are to file forms and the 
Committee is to notify handlers of their growers' annual allotments. 
The Committee would like to have established dates that the industry 
can realistically meet each season when a volume regulation is 
implemented.
    Because volume regulation was not recommended until the end of 
March during 2000 and 2001, growers had difficulty in submitting the 
required reports in a timely manner. Additionally, the rulemaking 
process to establish the allotment percentage was not completed by June 
1. Therefore, the Committee was unable to notify handlers of their 
growers' allotment by the specified deadline. With this amendment, 
dates could be established in line with the timing of the 
recommendation and establishment of volume regulation. Allowing the 
Committee to set dates that can realistically be met by the industry 
would better serve the purposes of the marketing order. Thus, this 
modification should benefit the entire industry, both large and small 
entities.
    This amendment will also clarify the explanation of how an 
allotment percentage is calculated. Currently, section 929.49(b) states 
that such allotment percentage shall equal the marketable quantity 
divided by the total of all growers' sales histories. It does not 
specify that ``all growers' sales histories'' include the sales 
histories calculated for new growers. This rule adds a clarification to 
ensure that total sales histories (including those of new growers) are 
used in this calculation. To the extent this clarification makes the 
terms of the order easier to understand, it should benefit cranberry 
growers and handlers.
    This rule also revises the information to be submitted by growers 
to qualify for an annual allotment. Currently, all growers must qualify 
for allotment by filing with the Committee a form including the 
following information: (1) The location of their cranberry producing 
acreage from which their annual allotment will be produced; (2) the 
amount of acreage which will be harvested; (3) changes in location, if 
any, of annual allotment; and (4) such other information, including a 
copy of any lease agreement, as is necessary for the Committee to 
administer the order. Such information is gathered by the Committee on 
a form specified as the AL-1 form.
    The amendment will modify these criteria by not including 
information that is not pertinent. Currently, growers are assigned a 
grower number and the amount of acreage on which cranberries are being 
produced is maintained. The location of the cranberry producing acreage 
is not maintained. Therefore, there is no need to specify this 
information on the form. It is also unnecessary to include changes in 
location, if any, of growers' annual allotment including the lease 
agreement. Annual allotment is linked to a grower's cranberry producing 
acreage and, since the acreage cannot be moved from one location to 
another, information on changes in location is not relevant. Therefore, 
the information to be submitted by growers is revised by removing the 
information that the Committee does not need to operate a producer 
allotment program. Other information that is currently requested 
(including identifying the handler(s) to whom the grower will assign 
his or her allotment) will remain unchanged.
    The AL-1 form was modified (and approved by OMB) prior to the 2001 
volume regulation. At that time, the Committee did not include this 
information on the form. Therefore, there is no reporting burden change 
as a result of this amendment. This change removes the unnecessary 
information from the order language.

Clarify How the Committee Allocates Unused Allotment to Handlers

    The amendment will change the method by which the Committee 
allocates unused allotment to handlers having excess cranberries to 
proportional distribution of each handler's total allotment.
    Currently under the producer allotment volume regulation features 
of the order, section 929.49(h) provides that handlers who receive 
cranberries more than the sum of their growers' annual allotments have 
``excess cranberries'' and shall notify the Committee. Handlers who 
have remaining unused allotment are ``deficient'' and shall notify the 
Committee. The Committee shall equitably distribute unused allotment to 
all handlers having excess cranberries.
    The proponents testified that there has been a debate in the 
industry on the interpretation of what equitable distribution means and 
how it should be accomplished. To add specificity, the amendment will 
replace the words ``equitably distribute'' with ``proportional to each 
handler's total allotment''.
    The proponents testified that the distribution of unused allotment 
will only be given to those handlers who have excess fruit and are in 
need of allotment to cover that fruit. Allotment is only distributed 
proportionately to handlers when there are more requests for unused 
allotment than available unused allotment. In this situation, handlers 
will then receive the allotment in proportion to the volume of 
cranberries they handle.
    This amendment will have a positive impact on large and small 
handlers since handlers may be able to acquire the additional allotment 
they need for their excess berries than they would have under the 
current provisions.

Growers' Assignment of Allotment if No Crop Is Produced

    The amendment to authorize growers who choose not to produce a crop 
in years of volume regulation to not assign their allotment to their 
handler will provide growers with flexibility to decide what happens 
with their unused allotment. Currently, the order requires the 
allotment to go to the handlers.
    Prior to implementing this provision, the Committee would consider 
what would happen to the unused allotment and recommend, with USDA 
approval, implementing regulations. This amendment will benefit growers 
who choose not to grow a crop by providing them with input into the 
allocation of that allotment. This amendment should be favorable to 
both large and small growers.

Transfers of Allotment During Years of Volume Regulation

    The amendment will allow growers to transfer allotment during a 
year of volume regulation and allow the sales history to remain with 
the lessor when there is a total or partial lease of cranberry acreage 
to another grower. Currently, growers are not allowed to transfer 
allotment to other growers. The only option available to growers to 
accomplish a transfer of allotment is to complete a lease agreement 
between the two growers. This involves filing paperwork, including 
signed leases and only transferring the sales history, not the 
allotment. Many of the lease agreements were initiated during the two 
years of volume regulation and created a burden on Committee staff. It 
also made recalculations of growers sales histories difficult.
    This amendment will simplify the process for growers by authorizing 
growers to transfer all or part of his or her allotment to another 
grower. Safeguards are in place to ensure that the transferred 
allotment remains with the same handler unless consent is provided by 
both handlers. In addition, the Committee may establish dates by which 
transfers may take place.

[[Page 7637]]

    This amendment will be beneficial to both large and small growers 
as it provides flexibility in transferring allotment.

Implementing Both Forms of Volume Regulation in the Same Year

    The amendment to require authorizing both forms of volume 
regulation in the same year was proposed in accordance with an 
amendment to the Act in November 2001. The amendment specified that 
USDA is authorized to implement a producer allotment program and a 
handler withholding program in the same crop year through informal 
rulemaking based on a recommendation and supporting economic analysis 
submitted by the Committee. If such recommendation is made by the 
Committee, it must be made no later than March 1 of each year. The 
amendment would provide additional flexibility to the Committee when 
considering its marketing policy each year.
    This amendment should be favorable to both large and small 
entities.

Dates for Recommending Volume Regulation

    The amendment to require the Committee to recommend a producer 
allotment program by March 1 each year will allow growers to alter 
their cultural practices in an efficient manner in the event that a 
producer allotment is implemented. Growers have indicated that they 
need to know as soon as possible whether the Committee is going to 
recommend a regulation since a producer allotment program requires 
growers to only deliver a portion of their crop. The Committee's 
decision influences whether growers can cut back on purchases of 
chemicals, fertilizer or possibly take acreage out of production. This 
can result in growers' savings. The later the decision is made, the 
chances are growers will have already invested these costs on their 
acreage.
    The amendment to require the Committee to recommend a handler 
withholding program by August 31 each year will provide the Committee 
staff with ample time to prepare reports based on handler inventory 
reports and crop projection data received from the National 
Agricultural Statistics Service (NASS). Because the withholding program 
does not impact grower deliveries, this date is more appropriate for 
making an informed decision on whether to recommend this type of 
program.
    Another amendment will authorize both forms of volume regulation to 
be implemented each year in accordance with an amendment to the Act 
authorizing such proposal. The amendment states that if both forms of 
volume regulation are recommended, it should be done by March 1. 
Therefore, this amendment will require that if both forms of regulation 
are recommended in the same year that it be recommended by March 1. The 
same reasoning for recommending a producer allotment alone would apply 
to this proposed requirement. Growers need to know as soon as possible 
if production costs can be mitigated if a producer allotment is 
recommended. All growers, both large and small, should benefit from 
this change.

Exemptions From Order Provisions

    The amendment providing that specific authority be added to exempt 
fresh, organic or other forms of cranberries from order provisions will 
clarify the current language and provide guidelines for the specific 
forms or types of cranberries that could be exempted.
    Fresh and organic cranberries were exempted from the 2000 and 2001 
volume regulations under the minimum quantity exemption authority of 
the order. This amendment will merely clarify that authority in the 
order to ensure that fresh and organic and other forms of cranberries 
could be exempted if warranted in the future. This amendment should be 
beneficial to large and small entities.

Expand Outlets for Excess Cranberries

    The amendment to the outlets for excess cranberries provisions will 
broaden the scope of noncommercial and noncompetitive outlets for 
excess cranberries. This amendment will provide the Committee, with 
USDA's approval, the ability to recognize and authorize the used of 
additional or new noncommercial and/or noncompetitive outlets for 
excess cranberries through informal rulemaking.
    Because competitive markets can change from season to season and 
new and different research ideas can be devised, the Committee will 
develop guidelines each year a volume regulation is recommended that 
would be used in determining appropriate outlets for excess 
cranberries. This will benefit growers and handlers by providing 
flexibility in determining outlets. This amendment will be particularly 
useful in determining which foreign markets can be used as outlets for 
excess cranberries. Foreign markets are one area where growth is 
occurring and demand is increasing. Exports of cranberries have 
increased from 184,000 barrels in 1988 to 824,000 barrels in 2000. Both 
large and small entities should benefit from this amendment.

General Withholding Provisions

    Section 929.54 of the order sets forth the general parameters 
pertaining to withholding regulations. Under this form of regulation, 
free and restricted percentages are established, based on market needs 
and anticipated supplies. The free percentage is applied to handlers' 
acquisitions of cranberries in a given season. A handler may market 
free percentage cranberries in any chosen manner, while restricted 
berries must be withheld from handling.
    The withholding provisions of the order were used briefly over 
three decades ago. Although the cranberry industry has not used the 
authority for withholding regulations in quite some time, the record 
evidence supports maintaining this tool for possible future use. 
However, substantive changes in industry practices have rendered 
current withholding provisions in need of revision. Thus, this 
amendment updates and streamlines those provisions.
    The record shows that at the time the withholding provisions were 
designed, the cranberry industry was much smaller, producing and 
handling much lower volumes of fruit than it does now. In 1960, 
production was about 1.3 million barrels; by 1999, a record 6.3 million 
barrels were grown. A much higher percentage of the crop was marketed 
fresh--about 40 percent in the early 1960's versus less than 10 percent 
in recent years.
    Changes in harvesting and handling procedures have been made so the 
industry is better able to process higher volumes of cranberries. Forty 
years ago, virtually all cranberries were harvested dry, and water 
harvesting was in an experimental stage of development. Water 
harvesting is currently widespread in certain growing regions; 
cranberries harvested under this method must be handled immediately as 
they are subject to rapid deterioration.
    In the early 1960's, handlers acquired some cranberries that had 
been ``screened'' to remove extraneous material that was picked up with 
the berries as they were being harvested, and ``unscreened'' berries 
from which the extraneous material (including culls) had not been 
removed. The handler cleaned some of the unscreened berries immediately 
upon receipt, while others were placed in storage and screened just 
prior to processing.
    The order currently provides that when a withholding regulation is

[[Page 7638]]

implemented, the restricted percentage will be applied to the volume of 
``screened'' berries acquired by handlers. Since the term ``screening'' 
is obsolete, all references to that term are being deleted.
    The order also currently provides that withheld cranberries must 
meet such quality standards as recommended by the Committee and 
established by USDA. The Federal or Federal-State Inspection Service 
must inspect such cranberries and certify that they meet the prescribed 
quality standards. The intent of these provisions is, again, to ensure 
that the withholding regulations reduce the volume of cranberries in 
the marketplace by not allowing culls to be used to meeting withholding 
obligations. The inspection and certification process is also meant to 
assist the Committee in monitoring the proper disposition of restricted 
cranberries, thereby ensuring handler compliance with any established 
withholding requirements.
    The need for inspection and certification of withheld cranberries 
is not as great today as in the past. Additionally, it could be costly, 
particularly since most withheld berries would subsequently be dumped, 
generating no revenue for growers or handlers. The inspection process 
could also inordinately slow down handling operations, and there could 
be differential impacts of such requirements because some handling 
facilities operate in ways that lend themselves to more efficient 
methods of pulling representative samples (for inspection purposes) 
than others.
    Removing the requirements for mandatory inspection and 
certification requirements will allow the industry to develop 
alternative safeguards to achieve its objectives at lower cost. While 
the inspection process may be deemed the best method by the Committee, 
this amendment provides flexibility by allowing the Committee to 
consider other, less costly alternatives.
    Eliminating the mandatory inspection under the withholding program 
and deleting obsolete terminology will make the program more flexible 
for the industry and allow the Committee to operate more efficiently. 
As such, this amendment should benefit cranberry growers and handlers 
by providing an additional tool they could use in times of cumbersome 
oversupply.

Buy-Back Provisions Under the Handler Withholding Program

    Section 929.56 of the order, entitled ``Special provisions relating 
to withheld (restricted) cranberries,'' sets forth procedures under 
which handlers may have their restricted cranberries released to them. 
These provisions are commonly referred to in the industry as the buy-
back provisions.
    Under the current buy-back provisions, a handler can request the 
Committee to release all or a portion of his or her restricted 
cranberries for use as free cranberries. The handler request has to be 
accompanied by a deposit equal to the fair market value of those 
cranberries. The Committee then attempts to purchase as nearly an equal 
amount of free cranberries from other handlers. Cranberries so 
purchased by the Committee are transferred to the restricted percentage 
and disposed of by the Committee in outlets that are noncompetitive to 
outlets for free cranberries. The provision that each handler deposit a 
fair market price with the Committee for each barrel of cranberries 
released and that the Committee use such funds to purchase an equal 
amount or as nearly an equal amount as possible of free cranberries is 
designed to ensure that the percentage of berries withheld from 
handling remains at the quantity established by the withholding 
regulation for the crop year.
    The Committee has the authority to establish a fair market price 
for the release of restricted cranberries under the buy-back program. 
The money deposited with the Committee by handlers requesting release 
of their restricted cranberries is the only money the Committee has 
available for acquiring free cranberries. Thus, the amount deposited 
must be equal to the then current market price or the Committee will 
have insufficient funds to purchase a like quantity of free 
cranberries.
    The Committee is required to release the restricted cranberries 
within 72 hours of receipt of a proper request (including the deposit 
of a fair market value). This release was made automatic so that 
handlers will be able to plan their operations, and very little delay 
would be encountered.
    If the Committee is unable to purchase free berries to replace 
restricted cranberries that are released under these provisions, the 
funds deposited with the Committee are required to be returned to all 
handlers in proportion to the volume withheld by each handler.
    This amendment authorizes direct buy-back between handlers. With 
this option, a handler will not have to go through the Committee to 
have his or her restricted berries released. Instead, that handler 
could arrange for the purchase of another handler's free cranberries 
directly. All terms, including the price paid, would be between the two 
parties involved and would not be prescribed by the Committee. This 
change will add flexibility to the order and could offer a more 
efficient method of buying back cranberries. Also, no Committee 
administrative costs would be incurred. Handlers will have the option 
of using this method, or they could buy back their berries through the 
Committee, as is currently provided.
    There are four criteria the Committee needs to consider in 
establishing a fair market price under the buy-back program for 
purchasing restricted cranberries. These include prices at which 
growers are selling their cranberries to handlers; prices at which 
handlers are selling fresh berries to dealers; prices at which 
cranberries are being sold to processors; and prices at which the 
Committee has purchased free berries to replace released restricted 
berries.
    This action adds two criteria to the list--the prices at which 
handlers are selling cranberry concentrate and growers' costs of 
production. Both of these items are relevant to consider in determining 
a fair market value. Consideration of these criteria by the Committee 
would benefit handlers.
    Under the current buy-back provisions, handlers are required to 
deposit with the Committee the full market value of the berries they 
are asking to be released. This decision proposes a different payment 
schedule so that handlers will not have to make a large cash payment 
prior to the sale of their restricted cranberries. Twenty percent of 
the total amount would be due at the time of the request, with an 
additional 10 percent due each month thereafter. This change will 
facilitate handlers buying back their restricted berries by reducing 
the costs of such a venture. Thus, handlers should benefit.
    If the Committee is unable to purchase free berries under the buy-
back system, it is currently required to refund the money back to all 
handlers proportionate to the amount each handler withheld under 
regulation. USDA modified that provision to provide that the money be 
returned to the handler who deposited it for distribution to the 
growers whose fruit was sold. This should benefit growers whose fruit 
was sold. Additionally, this change could provide an incentive for 
handlers to make available free cranberries for purchase to replace 
restricted cranberries that are released under the buy-back provisions. 
For these reasons, this change should benefit the cranberry industry.

[[Page 7639]]

Paid Advertising

    The amendment to add authority for paid advertising under the 
research and development provisions of the order will provide the 
Committee the flexibility to use paid advertising to assist, improve, 
or promote the marketing, distribution, and consumption of cranberries 
in either its export or domestic programs. The authority for 
authorizing paid advertising under the cranberry marketing order was 
added to the Act in October, 1999.
    If a paid advertising program is recommended by the Committee, it 
could entail an increase in assessments to administer the program, 
which would have an impact on handlers. According to testimony, it is 
the Committee's intent to use paid advertising sparingly as a means to 
provide consumers with relevant information to the health-related 
benefits of cranberries. Paid advertising authority is viewed as an 
additional tool available to the Committee to meet its objectives of 
increasing demand and consumption of cranberries and cranberry 
products. It is anticipated that any additional costs incurred to all 
handlers, both large and small, would be outweighed by the benefits of 
increasing demand for cranberries. Any paid advertising program and 
increase of assessment must proceed through notice and comment 
rulemaking before it is implemented.

Definition of Handle

    The amendment to modify the definition of handle under the order 
will clarify that the transporting of fresh cranberries to foreign 
markets other than Canada is also considered handling. This change will 
merely clarify language.
    The amendment will also modify the definition by including the cold 
storage or freezing of withheld cranberries as an exemption from 
handling for the purpose of temporary cold storage during periods when 
withholding provisions are in effect prior to their disposal. The 
provision already applies this exemption to excess cranberries under 
the producer allotment program and it was determined that handlers 
could benefit from this provision under a withholding program as well. 
This will benefit large and small handlers by allowing temporary 
storage of withheld cranberries, which could be critical during a 
withholding volume regulation.

Reporting Requirements

    The amendment to modify the reporting requirements will relocate a 
paragraph on a grower reporting requirement to the section on Reports 
for ease of referencing and is only administrative in nature.
    The amendment will also add more specific information under the 
grower reporting provisions to incorporate additional information 
necessary from growers regarding sales history and transfer of 
allotment. This will assist the Committee in assembling the most 
accurate and effective information as possible. Orders with producer 
allotment programs are unique in that specific information is needed 
from growers in order to implement a program. Both large and small 
growers benefit from reporting the information by being provided 
accurate and timely sales histories that reflect their production and 
allow equitable allotments to be determined on their acreage during 
years of volume regulation. The failure of growers to file these 
reports could be detrimental to them in the event volume regulations 
are implemented. Any additional reporting requirements resulting from 
adoption of this proposed amendment would be submitted to the Office of 
Management and Budget prior to implementation.
    The amendment will also include that handlers report on the 
quantities of excess cranberries as well as withheld cranberries. This 
is a clarification and administrative in nature. The amendment will 
also simplify and clarify the provision on verification of reports. The 
amendment should be favorable to large and small growers.

Obsolete Provision

    The amendment to delete an obsolete provision relating to 
preliminary regulation is administrative in nature. There would be no 
impact on growers or handlers.

Amendments Not Recommended for Adoption

    Four proposed amendments were not recommended for adoption. 
Therefore, there would be no economic impact resulting from such 
proposals.
    All of these changes are designed to enhance the administration and 
functioning of the marketing agreement and order to the benefit of the 
industry. Accordingly, it is determined that the benefits of 
implementing these amendments will outweigh any associated costs. Costs 
are not anticipated to be significant.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1980 (44 FR 
U.S.C. 35), any reporting and recordkeeping provisions that would be 
generated by implementing the proposed amendments would be submitted to 
the Office of Management and Budget (OMB).
    The collection of information under the marketing order would not 
be affected by these amendments to the marketing order. Current 
information collection requirements for part 929 are approved under OMB 
No. 0581-0189, Generic OMB Fruit Crops.
    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 Department has not identified any relevant Federal rules that 
duplicate, overlap or conflict with this rule. These amendments are 
designed to enhance the administration and functioning of the marketing 
order to the benefit of the industry.
    Committee meetings to consider order amendments as well as the 
hearing dates were widely publicized throughout the cranberry industry, 
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.

Civil Justice Reform

    The amendments herein 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 present 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.

[[Page 7640]]

Order Amending the Order Regulating the Handling of Cranberries Grown 
in Massachusetts, Rhode Island, Connecticut, New Jersey, Wisconsin, 
Michigan, Minnesota, Oregon, Washington, and Long Island in the State 
of New York

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. 929 (7 CFR part 929), regulating the handling 
of cranberries grown in Massachusetts, Rhode Island, Connecticut, New 
Jersey, Wisconsin, Michigan, Minnesota, Oregon, Washington, and Long 
Island in the State of New York.
    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 
further 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 amended, and as hereby 
further amended, regulate the handling of cranberries 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 amended, and as hereby 
further 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 would not effectively 
carry out the declared policy of the Act;
    (4) The marketing agreement and order, as amended and as hereby 
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 cranberries grown in the production area; and
    (5) All handling of cranberries grown in the production area is in 
the current of interstate or foreign commerce or directly burdens, 
obstructs, or affects such commerce.
    (b) Additional findings.
    It is necessary and in the public interest to make these amendments 
to the order effective not later than one day after publication in the 
Federal Register.
    A later effective date would unnecessarily delay implementation of 
the amendments modifying the Committee's marketing policy and sales 
histories which will soon be under consideration for the upcoming 
season by the Committee. Therefore, making the effective date one day 
after publication in the Federal Register will allow the amendments, 
which are expected to be beneficial to the industry, to be implemented 
as soon as possible.
    In view of the foregoing, it is hereby found and determined that 
good cause exists for making these amendments effective one day after 
publication in the Federal Register, and that it would be contrary to 
the public interest to delay the effective date for 30 days after 
publication in the Federal Register (Administrative Procedure Act; 5 
U.S.C. 551-559).
    (c) Determinations. It is hereby determined that:
    (1) Handlers (excluding cooperative associations of producers who 
are not engaged in processing, distributing, or shipping cranberries 
covered by the order as hereby amended) who, during the period 
September 1, 2003, through August 31, 2004, handled 50 percent or more 
of the volume of such cranberries 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 September 1, 
2003, through August 31, 2004 (which has been deemed to be a 
representative period), have been engaged within the production area in 
the production of such cranberries, such producers having also produced 
for market at least two-thirds of the volume of such commodity 
represented in the referendum.
    (3) The issuance of this amendatory order is favored or approved by 
processors who, during the period September 1, 2003, through August 31, 
2004 (which has been deemed to be a representative period), have 
engaged in canning or freezing cranberries for market and have frozen 
or canned more than 50 percent of the total volume of cranberries 
regulated which were canned or frozen within the production area.

Order Relative to Handling

    It is therefore ordered, that on and after the effective date 
hereof, all handling of cranberries grown in Massachusetts, Rhode 
Island, Connecticut, New Jersey, Wisconsin, Michigan, Minnesota, 
Oregon, Washington, and Long Island in the State of New York, 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 
further amending the order contained in the Secretary's Decision issued 
by the Administrator on November 30, 2004, and published in the Federal 
Register on December 1, 2004, 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 929

    Cranberries, Marketing agreements, Reporting and recordkeeping 
requirements.


0
For the reasons set forth in the preamble, 7 CFR part 929 is amended as 
follows:

PART 929--CRANBERRIES GROWN IN THE STATES OF MASSACHUSETTS, RHODE 
ISLAND, CONNECTICUT, NEW JERSEY, WISCONSIN, MICHIGAN, MINNESOTA, 
OREGON, WASHINGTON, AND LONG ISLAND IN THE STATE OF NEW YORK

0
1. The authority citation for 7 CFR part 929 continues to read as 
follows:

    Authority: 7 U.S.C. 601-674.


0
2. Amend Sec.  929.10 by revising paragraphs (a)(2) and (b)(4) to read 
as follows:


Sec.  929.10  Handle.

    (a) * * *
    (2) To sell, consign, deliver, or transport (except as a common or 
contract carrier of cranberries owned by another person) fresh 
cranberries or in any other way to place fresh cranberries in the 
current of commerce within the production area or between the 
production area and any point outside thereof.

[[Page 7641]]

    (b) * * *
    (4) The cold storage or freezing of excess or restricted 
cranberries for the purpose of temporary storage during periods when an 
annual allotment percentage and/or a handler withholding program is in 
effect prior to their disposal, pursuant to Sec. Sec.  929.54 or 
929.59.

0
3. Add a new Sec.  929.28 to read as follows:


Sec.  929.28  Redistricting and Reapportionment.

    (a) The committee, with the approval of the Secretary, may 
reestablish districts within the production area and reapportion 
membership among the districts. In recommending such changes, the 
committee shall give consideration to:
    (1) The relative volume of cranberries produced within each 
district.
    (2) The relative number of cranberry producers within each 
district.
    (3) Cranberry acreage within each district.
    (4) Other relevant factors.
    (b) The committee may establish, with the approval of the 
Secretary, rules and regulations for the implementation and operation 
of this section.

0
4. Amend Sec.  929.45 by revising paragraph (a) to read as follows:


Sec.  929.45  Research and development.

    (a) The committee, with the approval of the Secretary, may 
establish or provide for the establishment of production research, 
marketing research, and market development projects, including paid 
advertising, designed to assist, improve, or promote the marketing, 
distribution, consumption, or efficient production of cranberries. The 
expense of such projects shall be paid from funds collected pursuant to 
Sec.  929.41, or from such other funds as approved by the Secretary.
* * * * *

0
5. Revise Sec.  929.46 to read as follows:


Sec.  929.46  Marketing policy.

    Each season prior to making any recommendation pursuant to Sec.  
929.51, the committee shall submit to the Secretary a report setting 
forth its marketing policy for the crop year. Such marketing policy 
shall contain the following information for the current crop year:
    (a) The estimated total production of cranberries;
    (b) The expected general quality of such cranberry production;
    (c) The estimated carryover, as of September 1, of frozen 
cranberries and other cranberry products;
    (d) The expected demand conditions for cranberries in different 
market outlets;
    (e) The recommended desirable total marketable quantity of 
cranberries including a recommended adequate carryover into the 
following crop year of frozen cranberries and other cranberry products;
    (f) Other factors having a bearing on the marketing of cranberries.


Sec.  929.47  [Removed]

0
6. Remove Sec.  929.47.

0
7. Revise Sec.  929.48 to read as follows:


Sec.  929.48  Sales history.

    (a) A sales history for each grower shall be computed by the 
committee in the following manner:
    (1) For growers with acreage with 6 or more years of sales history, 
the sales history shall be computed using an average of the highest 
four of the most recent six years of sales.
    (2) For growers with 5 years of sales history from acreage planted 
or replanted 2 years prior to the first harvest on that acreage, the 
sales history is computed by averaging the highest 4 of the 5 years.
    (3) For growers with 5 years of sales history from acreage planted 
or replanted 1 year prior to the first harvest on that acreage, the 
sales history is computed by averaging the highest 4 of the 5 years and 
in a year prior to a year of a producer allotment volume regulation 
shall be adjusted as provided in paragraph (a)(6) of this section.
    (4) For a grower with 4 years or less of sales history, the sales 
history shall be computed by dividing the total sales from that acreage 
by 4 and in a year prior to a year of a producer allotment volume 
regulation shall be adjusted as provided in paragraph (a)(6) of this 
section.
    (5) For growers with acreage having no sales history, or for the 
first harvest of replanted acres, the sales history will be the average 
first year yields (depending on whether first harvested 1 or 2 years 
after planting or replanting) as established by the committee and 
multiplied by the number of acres.
    (6) In a year prior to a year of a producer allotment volume 
regulation, in addition to the sales history computed in accordance 
with paragraphs (a)(3) and (a)(4) of this section, additional sales 
history shall be assigned to growers using the formula x=(a-b)c. The 
letter ``x'' constitutes the additional number of barrels to be added 
to the grower's sales history. The value ``a'' is the expected yield 
for the forthcoming year harvested acreage as established by the 
committee. The value ``b'' is the total sales from that acreage as 
established by the committee divided by four. The value ``c'' is the 
number of acres planted or replanted in the specified year. For acreage 
with five years of sales history: a = the expected yield for the 
forthcoming sixth year harvested acreage (as established by the 
committee); b = an average of the most recent 4 years of expected 
yields (as established by the committee); and c = the number of acres 
with 5 years of sales history.
    (b) A new sales history shall be calculated for each grower after 
each crop year, using the formulas established in paragraph (a) of this 
section, or such other formula(s) as determined by the committee, with 
the approval of the Secretary.
    (c) The committee, with the approval of the Secretary, may adopt 
regulations to change the number and identity of years to be used in 
computing sales histories, including the number of years to be used in 
computing the average. The committee may establish, with the approval 
of the Secretary, rules and regulations necessary for the 
implementation and operation of this section.
    (d) Sales histories, starting with the crop year following adoption 
of this part, shall be calculated separately for fresh and processed 
cranberries. The amount of fresh fruit sales history may be calculated 
based on either the delivered weight of the barrels paid for by the 
handler (excluding trash and unusable fruit) or on the weight of the 
fruit paid for by the handler after cleaning and sorting for the retail 
market. Handlers using the former calculation shall allocate delivered 
fresh fruit subsequently used for processing to growers' processing 
sales. Fresh fruit sales history, in whole or in part, may be added to 
process fruit sales history with the approval of the committee in the 
event that the grower's fruit does not qualify as fresh fruit at 
delivery.
    (e) The committee may recommend rules and regulations, with the 
approval of the Secretary, to adjust a grower's sales history to 
compensate for catastrophic events that impact the grower's crop.

0
8. Revise Sec.  929.49 to read as follows:


929.49  Marketable quantity, allotment percentage, and annual 
allotment.

    (a) Marketable quantity and allotment percentage. If the Secretary 
finds, from the recommendation of the committee or from other available 
information, that limiting the quantity of cranberries purchased from 
or handled on behalf of growers during a crop year would tend to 
effectuate the declared policy of the

[[Page 7642]]

Act, the Secretary shall determine and establish a marketable quantity 
for that crop year.
    (b) The marketable quantity shall be apportioned among growers by 
applying the allotment percentage to each grower's sales history, 
established pursuant to Sec.  929.48. Such allotment percentage shall 
be established by the Secretary and shall equal the marketable quantity 
divided by the total of all growers' sales histories including the 
estimated total sales history for new growers. Except as provided in 
paragraph (g) of this section, no handler shall purchase or handle on 
behalf of any grower cranberries not within such grower's annual 
allotment.
    (c) In any crop year in which the production of cranberries is 
estimated by the committee to be equal to or less than its recommended 
marketable quantity, the committee may recommend that the Secretary 
increase or suspend the allotment percentage applicable to that year. 
In the event it is found that market demand is greater than the 
marketable quantity previously set, the committee may recommend that 
the Secretary increase such quantity.
    (d) Issuance of annual allotments. The committee shall require all 
growers to qualify for such allotment by filing with the committee a 
form wherein growers include the following information:
    (1) The amount of acreage which will be harvested;
    (2) A copy of any lease agreement covering cranberry acreage;
    (3) The name of the handler(s) to whom their annual allotment will 
be delivered;
    (4) Such other information as may be necessary for the 
implementation and operation of this section.
    (e) On or before such date as determined by the committee, with the 
approval of the Secretary, the committee shall issue to each grower an 
annual allotment determined by applying the allotment percentage 
established pursuant to paragraph (b) of this section to the grower's 
sales history.
    (f) On or before such date as determined by the committee, with the 
approval of the Secretary, in which an allotment percentage is 
established by the Secretary, the committee shall notify each handler 
of the annual allotment that can be handled for each grower whose total 
crop will be delivered to that handler. In cases where a grower 
delivers a crop to more than one handler, the grower must specify how 
the annual allotment will be apportioned among the handlers. If a 
grower does not specify how their annual allotment is to be apportioned 
among the handlers, the Committee will apportion such annual allotment 
equally among those handlers they are delivering their crop to.
    (g) Growers who do not produce cranberries equal to their computed 
annual allotment shall transfer their unused allotment to such growers' 
handlers unless it is transferred to another grower in accordance with 
Sec.  929.50(b) or if it is not assigned in accordance with paragraph 
(i) of this section. The handler shall equitably allocate the unused 
annual allotment to growers with excess cranberries who deliver to such 
handler. Unused annual allotment remaining after all such transfers 
have occurred shall be reported and transferred to the committee by 
such date as established by the committee with the approval of the 
Secretary.
    (h) Handlers who receive cranberries more than the sum of their 
growers' annual allotments have ``excess cranberries,'' pursuant to 
Sec.  929.59, and shall so notify the committee. Handlers who have 
remaining unused allotment pursuant to paragraph (g) of this section 
are ``deficient'' and shall so notify the committee. The committee 
shall allocate unused allotment to all handlers having excess 
cranberries, proportional to each handler's total allotment.
    (i) Growers who decide not to grow a crop, during any crop year in 
which a volume regulation is in effect, may choose not to assign their 
allotment to a handler.
    (j) The committee may establish, with the approval of the 
Secretary, rules and regulations necessary for the implementation and 
operation of this section.

0
9. Revise Sec.  929.50 to read as follows:


Sec.  929.50  Transfers of Sales Histories and Annual Allotments.

    (a) Leases and sales of cranberry acreage. (1) Total or partial 
lease of cranberry acreage. When total or partial lease of cranberry 
acreage occurs, sales history attributable to the acreage being leased 
shall remain with the lessor.
    (2) Total sale of cranberry acreage. When there is a sale of a 
grower's total cranberry producing acreage, the committee shall 
transfer all owned acreage and all associated sales history to such 
acreage to the buyer. The seller and buyer shall file a sales transfer 
form providing the committee with such information as may be requested 
so that the buyer will have immediate access to the sales history 
computation process.
    (3) Partial sale of cranberry acreage. When less than the total 
cranberry producing acreage is sold, sales history associated with that 
portion of the acreage being sold shall be transferred with the 
acreage. The seller shall provide the committee with a sales transfer 
form containing, but not limited to the distribution of acreage and the 
percentage of sales history, as defined in Sec.  929.48(a)(1), 
attributable to the acreage being sold.
    (4) No sale of cranberry acreage shall be recognized unless the 
committee is notified in writing.
    (b) Allotment Transfers. During a year of volume regulation, a 
grower may transfer all or part of his/her allotment to another grower. 
If a lease is in effect the lessee shall receive allotment from lessor 
attributable to the acreage leased. Provided, That the transferred 
allotment shall remain assigned to the same handler and that the 
transfer shall take place prior to a date to be recommended by the 
Committee and approved by the Secretary. Transfers of allotment between 
growers having different handlers may occur with the consent of both 
handlers.
    (c) The committee may establish, with the approval of the 
Secretary, rules and regulations, as needed, for the implementation and 
operation of this section.

0
10. Revise Sec.  929.51 to read as follows:


Sec.  929.51  Recommendations for regulation.

    (a) Except as otherwise provided in paragraph (b) of this section, 
if the committee deems it advisable to regulate the handling of 
cranberries in the manner provided in Sec.  929.52, it shall so 
recommend to the Secretary by the following appropriate dates:
    (1) An allotment percentage regulation must be recommended by no 
later than March 1;
    (2) A handler withholding program must be recommended by not later 
than August 31. Such recommendation shall include the free and 
restricted percentages for the crop year;
    (3) If both programs are recommended in the same year, the 
Committee shall submit with its recommendation an economic analysis to 
the USDA prior to March 1 of the year in which the programs are 
recommended.
    (b) An exception to the requirement in paragraph (a)(1) of this 
section may be made in a crop year in which, due to unforeseen 
circumstances, a producer allotment regulation is deemed necessary 
subsequent to the March 1 deadline.
    (c) In arriving at its recommendations for regulation pursuant to 
paragraph (a) of this section, the committee shall give consideration 
to current information with respect to the factors affecting the supply 
of and demand for cranberries during the period when it is proposed

[[Page 7643]]

that such regulation should be imposed. With each such recommendation 
for regulation, the committee shall submit to the Secretary the data 
and information on which such recommendation is based and any other 
information the Secretary may request.

0
11. Revise Sec.  929.52 to read as follows:


Sec.  929.52  Issuance of regulations.

    (a) The Secretary shall regulate, in the manner specified in this 
section, the handling of cranberries whenever the Secretary finds, from 
the recommendations and information submitted by the committee, or from 
other available information, that such regulation will tend to 
effectuate the declared policy of the Act. Such regulation shall limit 
the total quantity of cranberries which may be handled during any 
fiscal period by fixing the free and restricted percentages, applied to 
cranberries acquired by handlers in accordance with Sec.  929.54, and/
or by establishing an allotment percentage in accordance with Sec.  
929.49.
    (b) The committee shall be informed immediately of any such 
regulation issued by the Secretary, and the committee shall promptly 
give notice thereof to handlers.

0
12. Revise Sec.  929.54 to read as follows:


Sec.  929.54  Withholding.

    (a) Whenever the Secretary has fixed the free and restricted 
percentages for any fiscal period, as provided for in Sec.  929.52(a), 
each handler shall withhold from handling a portion of the cranberries 
acquired during such period. The withheld portion shall be equal to the 
restricted percentage multiplied by the volume of marketable 
cranberries acquired. Such withholding requirements shall not apply to 
any lot of cranberries for which such withholding requirement 
previously has been met by another handler in accordance with Sec.  
929.55.
    (b) The committee, with the approval of the Secretary, shall 
prescribe the manner in which, and date or dates during the fiscal 
period by which, handlers shall have complied with the withholding 
requirements specified in paragraph (a) of this section.
    (c) Withheld cranberries may meet such standards of grade, size, 
quality, or condition as the committee, with the approval of the 
Secretary, may prescribe. The Federal or Federal-State Inspection 
Service may inspect all such cranberries. A certificate of such 
inspection shall be issued which shall include the name and address of 
the handler, the number and type of containers in the lot, the location 
where the lot is stored, identification marks (including lot stamp, if 
used), and the quantity of cranberries in such lot that meet the 
prescribed standards. Promptly after inspection and certification, each 
such handler shall submit to the committee a copy of the certificate of 
inspection issued with respect to such cranberries.
    (d) Any handler who withholds from handling a quantity of 
cranberries in excess of that required pursuant to paragraph (a) of 
this section shall have such excess quantity credited toward the next 
fiscal year's withholding obligation, if any--provided that such credit 
shall be applicable only if the restricted percentage established 
pursuant to Sec.  929.52 was modified pursuant to Sec.  929.53; to the 
extent such excess was disposed of prior to such modification; and 
after such handler furnishes the committee with such information as it 
prescribes regarding such withholding and disposition.
    (e) The Committee, with the approval of the Secretary, may 
establish rules and regulations necessary and incidental to the 
administration of this section.

0
13. Revise Sec.  929.56 to read as follows:


Sec.  929.56  Special provisions relating to withheld (restricted) 
cranberries.

    (a) A handler shall make a written request to the committee for the 
release of all or part of the cranberries that the handler is 
withholding from handling pursuant to Sec.  929.54(a). Each request 
shall state the quantity of cranberries for which release is requested 
and shall provide such additional information as the committee may 
require. Handlers may replace the quantity of withheld cranberries 
requested for release as provided under either paragraph (b) or (c) of 
this section.
    (b) The handler may contract with another handler for an amount of 
free cranberries to be converted to restricted cranberries that is 
equal to the volume of cranberries that the handler wishes to have 
converted from his own restricted cranberries to free cranberries.
    (1) The handlers involved in such an agreement shall provide the 
committee with such information as may be requested prior to the 
release of any restricted cranberries.
    (2) The committee shall establish guidelines to ensure that all 
necessary documentation is provided to the committee, including but not 
limited to, the amount of cranberries being converted and the 
identities of the handlers assuming the responsibility for withholding 
and disposing of the free cranberries being converted to restricted 
cranberries.
    (3) Cranberries converted to replace released cranberries may be 
required to be inspected and meet such standards as may be prescribed 
for withheld cranberries prior to disposal.
    (4) Transactions and agreements negotiated between handlers shall 
include all costs associated with such transactions including the 
purchase of the free cranberries to be converted to restricted 
cranberries and all costs associated with inspection (if applicable) 
and disposal of such restricted cranberries. No costs shall be incurred 
by the committee other than for the normal activities associated with 
the implementation and operation of a volume regulation program.
    (5) Free cranberries belonging to one handler and converted to 
restricted cranberries on the behalf of another handler shall be 
reported to the committee in such manner as prescribed by the 
committee.
    (c) Except as otherwise directed by the Secretary, as near as 
practicable to the beginning of the marketing season of each fiscal 
period with respect to which the marketing policy proposes regulation 
pursuant to Sec.  929.52(a), the committee shall determine the amount 
per barrel each handler shall deposit with the committee for it to 
release to him, in accordance with this section, all or part of the 
cranberries he is withholding; and the committee shall give notice of 
such amount of deposit to handlers. Such notice shall state the period 
during which such amount of deposit shall be in effect. Whenever the 
committee determines that, by reason of changed conditions or other 
factors, a different amount should therefore be deposited for the 
release of withheld cranberries, it shall give notice to handlers of 
the new amount and the effective period thereof. Each determination as 
to the amount of deposit shall be on the basis of the committee's 
evaluation of the following factors:
    (1) The prices at which growers are selling cranberries to 
handlers,
    (2) The prices at which handlers are selling fresh market 
cranberries to dealers,
    (3) The prices at which cranberries are being sold for processing 
in products,
    (4) The prices at which handlers are selling cranberry concentrate,
    (5) The prices the committee has paid to purchase cranberries to 
replace released cranberries in accordance with this section, and
    (6) The costs incurred by growers in producing cranberries.
    (7) Each request for release of withheld cranberries shall include, 
in addition to all other information as may be prescribed by the 
committee, the quantity of cranberries the release is

[[Page 7644]]

requested and shall be accompanied by a deposit (a cashier's or 
certified check made payable to the Cranberry Marketing Committee) in 
an amount equal to the twenty percent of the amount determined by 
multiplying the number of barrels stated in the request by the then 
effective amount per barrel as determined in paragraph (c).
    (8) Subsequent deposits equal to, but not less than, the ten 
percent of the remaining outstanding balance shall be payable to the 
committee on a monthly basis commencing on January 1, and concluding by 
no later than August 31 of the fiscal period.
    (9) If the committee determines such a release request is properly 
filled out, is accompanied by the required deposit, and contains a 
certification that the handler is withholding such cranberries, it 
shall release to such handler the quantity of cranberries specified in 
his request.
    (d) Funds deposited for the release of withheld cranberries, 
pursuant to paragraph (c) of this section, shall be used by the 
committee to purchase from handlers unrestricted (free percentage) 
cranberries in an aggregate amount as nearly equal to, but not in 
excess of, the total quantity of the released cranberries as it is 
possible to purchase to replace the released cranberries.
    (e) All handlers shall be given an equal opportunity to participate 
in such purchase of unrestricted (free percentage) cranberries. If a 
larger quantity is offered than can be purchased, the purchases shall 
be made at the lowest price possible. If two or more handlers offer 
unrestricted (free percentage) cranberries at the same price, purchases 
from such handlers shall be in proportion to the quantity of their 
respective offerings insofar as such division is practicable. The 
committee shall dispose of cranberries purchased as restricted 
cranberries in accordance with Sec.  929.57. Any funds received by the 
committee for cranberries so disposed of, which are in excess of the 
costs incurred by the committee in making such disposition, will accrue 
to the committee's general fund.
    (f) In the event any portion of the funds deposited with the 
committee pursuant to paragraph (c) of this section cannot, for reasons 
beyond the committee's control, be expended to purchase unrestricted 
(free percentage) cranberries to replace those withheld cranberries 
requested to be released, such unexpended funds shall, after deducting 
expenses incurred by the committee, be refunded to the handler who 
deposited the funds. The handler shall equitably distribute such refund 
among the growers delivering to such handler.
    (g) Inspection for restricted (withheld) cranberries released to a 
handler is not required.
    (h) The committee may establish, with the approval of the 
Secretary, rules and regulations for the implementation of this 
section. Such rules and regulations may include, but are not limited 
to, revisions in the payment schedule specified in paragraphs (c)(7) 
and (c)(8) of this section.

0
14. Revise Sec.  929.58 to read as follows:


Sec.  929.58  Exemptions.

    (a) Upon the basis of the recommendation and information submitted 
by the committee, or from other available information, the Secretary 
may relieve from any or all requirements pursuant to this part the 
handling of cranberries in such minimum quantities as the committee, 
with the approval of the Secretary, may prescribe.
    (b) Upon the basis of the recommendation and information submitted 
by the committee, or from other available information, the Secretary 
may relieve from any or all requirements pursuant to this part the 
handling of such forms or types of cranberries as the committee, with 
the approval of the Secretary, may prescribe. Forms of cranberries 
could include cranberries intended for fresh sales or organically grown 
cranberries.
    (c) The committee, with the approval of the Secretary, shall 
prescribe such rules, regulations, and safeguards as it may deem 
necessary to ensure that cranberries handled under the provisions of 
this section are handled only as authorized.

0
15. Revise Sec.  929.61 to read as follows:


Sec.  929.61  Outlets for excess cranberries.

    (a) Noncommercial outlets. Excess cranberries may be disposed of in 
noncommercial outlets that the committee finds, with the approval of 
the Secretary, meet the requirements outlined in paragraph (c) of this 
section. Noncommercial outlets include, but are not limited to:
    (1) Charitable institutions; and
    (2) Research and development projects.
    (b) Noncompetitive outlets. Excess cranberries may be sold in 
outlets that the committee finds, with the approval of the Secretary, 
are noncompetitive with established markets for regulated cranberries 
and meet the requirements outlined in paragraph (c) of this section. 
Noncompetitive outlets include but are not limited to:
    (1) Any nonhuman food use; and
    (2) Other outlets established by the committee with the approval of 
the Secretary.
    (c) Requirements. The handler disposing of or selling excess 
cranberries into noncompetitive or noncommercial outlets shall meet the 
following requirements, as applicable:
    (1) Charitable institutions. A statement from the charitable 
institution shall be submitted to the committee showing the quantity of 
cranberries received and certifying that the institution will consume 
the cranberries;
    (2) Research and development projects. A report shall be given to 
the committee describing the project, quantity of cranberries 
contributed, and date of disposition;
    (3) Nonhuman food use. Notification shall be given to the committee 
at least 48 hours prior to such disposition;
    (4) Other outlets established by the committee with the approval of 
the Secretary. A report shall be given to the committee describing the 
project, quantity of cranberries contributed, and date of disposition.
    (d) The storage and disposition of all excess cranberries withheld 
from handling shall be subject to the supervision and accounting 
control of the committee.
    (e) The committee, with the approval of the Secretary, may 
establish rules and regulations for the implementation and operation of 
this section.

0
16. Revise Sec.  929.62 to read as follows:


Sec.  929.62  Reports.

    (a) Grower report. Each grower shall file a report with the 
committee by January 15 of each crop year, or such other date as 
determined by the committee, with the approval of the Secretary, 
indicating the following:
    (1) Total acreage harvested and whether owned or leased.
    (2) Total commercial cranberry sales in barrels from such acreage.
    (3) Amount of acreage either in production, but not harvested or 
taken out of production and the reason(s) why.
    (4) Amount of new or replanted acreage coming into production.
    (5) Name of the handler(s) to whom commercial cranberry sales were 
made.
    (6) Such other information as may be needed for implementation and 
operation of this section.
    (b) Inventory. Each handler engaged in the handling of cranberries 
or cranberry products shall, upon request of the committee, file 
promptly with the committee a certified report, showing such 
information as the committee shall specify with respect to any 
cranberries

[[Page 7645]]

and cranberry products which were held by them on such date as the 
committee may designate.
    (c) Receipts. Each handler shall, upon request of the committee, 
file promptly with the committee a certified report as to each quantity 
of cranberries acquired during such period as may be specified, and the 
place of production.
    (d) Handling reports. Each handler shall, upon request of the 
committee, file promptly with the committee a certified report as to 
the quantity of cranberries handled during any designated period or 
periods.
    (e) Withheld and excess cranberries. Each handler shall, upon 
request of the committee, file promptly with the committee a certified 
report showing, for such period as the committee may specify, the total 
quantity of cranberries withheld from handling or held in excess, in 
accordance with Sec. Sec.  929.49 and 929.54, the portion of such 
withheld or excess cranberries on hand, and the quantity and manner of 
disposition of any such withheld or excess cranberries disposed of.
    (f) Other reports. Upon the request of the committee, with the 
approval of the Secretary, each handler shall furnish to the committee 
such other information with respect to the cranberries and cranberry 
products acquired and disposed of by such person as may be necessary to 
enable the committee to exercise its powers and perform its duties 
under this part.
    (g) The committee may establish, with the approval of the 
Secretary, rules and regulations for the implementation and operation 
of this section.

0
17. Revise Sec.  929.64 to read as follows:


Sec.  929.64  Verification of reports and records.

    The committee, through its duly authorized agents, during 
reasonable business hours, shall have access to any handler's premises 
where applicable records are maintained for the purpose of assuring 
compliance and checking and verifying records and reports filed by such 
handler.

    Dated: February 8, 2005.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 05-2878 Filed 2-14-05; 8:45 am]
BILLING CODE 3410-02-P