[Federal Register Volume 70, Number 148 (Wednesday, August 3, 2005)]
[Proposed Rules]
[Pages 44525-44533]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-15231]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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 

  Federal Register / Vol. 70, No. 148 / Wednesday, August 3, 2005 / 
Proposed Rules  

[[Page 44525]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 82

[Docket No. FV05-82-01 PR]
RIN 0581-AC45


Regulations Governing the California Clingstone Peach (Tree 
Removal) Diversion Program; Notice of Request for Approval of a New 
Information Collection

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule with request for comments.

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

SUMMARY: This proposed rule invites comments on procedures for a 
California Clingstone Peach Diversion Program. The program would be 
voluntary and consist entirely of tree removal. The program would be 
implemented under clause (3) of section 32 of the Act of August 24, 
1935, as amended. Based on 2003 and prior season acreage, production, 
supply, and marketing information for California clingstone peaches, 
the proposed program is expected to bring the domestic canned peach 
supply more in line with the market and provide relief to growers faced 
with excess acreage and supplies, and with low prices. The program 
would ensure that removal is not part of the normal process of tree 
replacement. This rule also announces the Agricultural Marketing 
Service's intention to request approval by the Office of Management and 
Budget (OMB) of the new information collection requirements necessary 
to implement the proposed California Clingstone Peach (Tree Removal) 
Diversion Program.

DATES: Comments received by September 2, 2005, will be considered prior 
to issuance of a final rule. Pursuant to the Paperwork Reduction Act, 
comments on the information collection burden that would result from 
this proposal must be received by October 3, 2005.

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

FOR FURTHER INFORMATION CONTACT: George Kelhart, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 
Independence Avenue, SW., Stop 0237, Washington, DC 20250-0237; 
telephone: (202) 720-2491; Fax: (202) 720-8938; or e-mail: 
[email protected]; or Kurt Kimmel, California Marketing Field 
Office, Marketing Order Administration Branch, Fruit and Vegetable 
Programs, AMS, USDA, 2202 Monterey Street, Suite 102B, Fresno, 
California 93721; telephone: (559) 487-5901; Fax: (559) 487-5906; or e-
mail: [email protected].
    Small businesses may request information on the proposed diversion 
program by contacting Jay Guerber, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence 
Avenue, SW., Stop 0237, Washington, DC 20250-0237; telephone: (202) 
720-2491; Fax: (202) 720-8938; or e-mail: [email protected].

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This proposed rule has been determined to be significant for the 
purposes of Executive Order 12866 and therefore has been reviewed by 
the Office of Management and Budget (OMB). In accordance with Executive 
Order 12866, the Department of Agriculture (USDA) has prepared a 
detailed regulatory impact cost-benefit assessment, which can be 
obtained by contacting the person listed in the FOR FURTHER INFORMATION 
CONTACT section of this proposed rule. USDA also prepared a civil 
rights impact analysis. This document also can be obtained by following 
the same procedure.

Public Law 104-4

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State and local governments and 
the private sector. Under section 202 of the UMRA, the Agricultural 
Marketing Service (AMS) generally must prepare a written statement, 
including a cost-benefit analysis, for proposed and final rules with 
``Federal mandates'' that may result in expenditures by State and local 
governments, in the aggregate, or by the private sector, of $100 
million or more in any one year. When such a statement is needed for a 
rule, section 205 of the UMRA generally requires federal agencies to 
identify and consider a reasonable number of regulatory alternatives 
and adopt the least costly, most cost-effective, or least burdensome 
alternative that achieves the objectives of the rule.
    This rule contains no Federal mandates (under the regulatory 
provisions of Title II of the UMRA) for State and local governments or 
the private sector of $100 million or more in any one year. Therefore, 
this rule is not subject to the requirements of sections 202 and 205 of 
the UMRA.

Executive Order 12988

    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. The rule is intended to have preemptive effect 
with respect to any State or local laws, regulations or policies which 
conflict with its provisions, or which would otherwise impede its full 
implementation. Prior to any judicial challenge to the provisions of 
this rule or the application of its provisions, all applicable 
administrative procedures must be exhausted.

Executive Order 12372

    This program is not subject to the provisions of Executive Order 
12372, which requires intergovernmental consultation with State and 
local officials. See the Notice related to 7 CFR part 3015, subpart V 
published at 48 FR 29115 (June 24, 1983).

Executive Order 12612

    It has been determined that this rule does not have sufficient 
Federalism

[[Page 44526]]

implications to warrant the preparation of a Federalism Assessment. The 
provisions contained in this rule would not have a substantial direct 
effect on States or their political subdivisions or on the distribution 
of power and responsibilities among the various levels of government.

Authority for a Diversion Program

    The proposed program is intended to reestablish the purchasing 
power of California clingstone peach growers who suffered from excess 
acreage, supplies, and low prices in 2003. Programs to reestablish the 
purchasing power of U.S. farmers are authorized by clause (3) of 
Section 32 of the Act of August 24, 1935, as amended (7 U.S.C. 612c), 
hereinafter referred to as ``Section 32.'' Clause (3) authorizes USDA 
to ``* * * reestablish farmers' purchasing power by making payments in 
connection with the normal production of any agricultural commodity for 
domestic consumption.'' Section 32 also authorizes USDA to use Section 
32 funds `` at such times, and in such manner, and in such amounts, as 
USDA finds will effectuate substantial accomplishments of any one or 
more of the purposes of this section.'' Furthermore, ``Determinations 
by USDA as to what constitutes * * * normal production for domestic 
consumption shall be final.''
    This proposal also invites comments on the reporting and 
recordkeeping provisions that would be generated by this proposed rule. 
The information collection and recordkeeping requirements associated 
with this proposed rule are explained in more detail in the Paperwork 
Reduction Act section of this rule.

Need for a Diversion Program

    Domestic production of clingstone peaches is concentrated in 
California. Although there are more than 200 peach varieties, there are 
two basic types: clingstone and freestone. Clingstone peaches--so named 
because their flesh ``clings'' to the stone, or pit--are almost 
exclusively canned due to their ability to retain flavor and textural 
consistency. Other relatively minor uses include frozen peaches, baby 
food, and fruit concentrate for juice. Freestone peaches--so named 
because their flesh is readily removed from the stone--are primarily 
produced for the fresh market, with secondary outlets including the 
frozen and dried fruit market.
    Although peaches are grown commercially in more than 30 states, the 
National Agricultural Statistics Service (NASS) reported that, in 2003, 
California produced about 74 percent of all peaches grown in the U.S. 
Other significant peach producing states, including South Carolina, 
Georgia, New Jersey, Pennsylvania, and Washington, had a combined 
production of a little less than 17 percent of the U.S. total. As noted 
earlier, clingstone peach production is concentrated in California, 
which claims over 95 percent of the domestic production.
    NASS reports that U.S. production of all peaches in 2004 totaled a 
little over 1.279 million tons, of which 949 thousand tons were 
produced in California. In comparison, California clingstone peach 
production in 2004 totaled 539 thousand tons.
    The U.S. is the largest producer of canned peaches in the world. 
However, foreign imports of canned clingstone peaches are providing an 
increasingly important volume of competition for the U.S. industry. 
Greece, the world's second largest producer of canned peaches, has been 
the largest exporter to the U.S., followed by Spain, South Africa, 
China, and Thailand (re-manufactured product). According to a February 
2001 report by the Foreign Agricultural Service, the U.S. has become a 
net importer of canned peaches, with exports averaging around 20 
thousand tons and imports averaging approximately 21 thousand tons.
    The California Canning Peach Association (CCPA) requested the 
proposed diversion program on behalf of the clingstone peach industry. 
Established in 1922, the CCPA is a nonprofit cooperative bargaining 
association, owned and directed by its member growers. The CCPA 
negotiates an annual grower price and otherwise operates on behalf of 
its nearly 600 members, who produce approximately 80 percent of the 
clingstone peaches grown in California.
    Specifically, the industry requested that USDA provide funding for 
a tree removal program during 2004. Implementation was not possible at 
that time. Implementation of the proposed diversion program would begin 
at the end of calendar year 2005 and tree removal would have to be 
completed by May 1, 2006. CCPA believes that the program would provide 
relief to the peach growers who have been displaced from domestic and 
international markets. CCPA cited continuing market disruption and 
deteriorating economic conditions during 2003 for peach growers as 
reasons for the diversion program. The CCPA stated that the steadily 
increasing supply of low-priced foreign canned peaches, as well as high 
production costs and high levels of domestic production have resulted 
in record amounts of unsold fruit.
    The industry's difficulty is due in part to the high cost of 
domestic production coupled with high levels of plantings between 1998 
and 2002, and in part to the increased supply of low-priced canned 
peaches from other nations. Labor costs (more than \2/3\ of growers' 
direct production costs), as well as the costs of energy, chemicals, 
fertilizer, and equipment have climbed dramatically over the last few 
years. Producer prices have not kept pace with these increases. 
Moreover, as processing costs have increased, canners have been forced 
to raise their selling prices, thus providing a more attractive 
domestic market for low-priced imports and a more attractive market for 
clingstone peaches in countries traditionally supplied by the U.S. 
industry (Mexico, Canada, and Japan, for example).
    As previously noted, the U.S. has become a net importer of canned 
peaches due to several factors, including unfavorable exchange rates, 
subsidized Greek over-production, and low-cost Chinese production. The 
large increase in imports has resulted in a diminished need for 
domestic production with the consequence of record volumes of fruit not 
being sold. Imports are expected to continue to increase while the 
export of canned clingstone peaches, as well as clingstone peaches for 
canning, is anticipated to stay steady or decline. Exports to Mexico 
and other Central American countries--both canned peaches and peaches 
for canning--are being priced out by Greece, while exports to Asian 
markets are facing strong price competition from both Greece and China. 
Increasing levels of both domestic and foreign production coupled with 
diminished export demand (world demand for canned fruit is flat outside 
of the European Union) will lead to continued surplus situations for a 
number of years.
    Young, recently planted clingstone peach trees are more productive 
than older trees. This results in actual production volume increasing 
rapidly in proportion to the increase in acreage. Due to an industry-
wide belief that the canned peach market would be taking a turn for the 
better, farmers planted an average of 3,526 acres of clingstone peach 
trees per year between 1998 and 2002. Although much of this acreage has 
been offset with concurrent acreage reduction, the net result over the 
last ten years is an increase of about 4,000 acres. This extra peach 
acreage is not needed, however, because of the slow demand growth in 
the canned fruit sector and the increasing pressure from imports. The 
recent bankruptcy of Tri-Valley Growers (one of the major peach 
processors in California) has also greatly

[[Page 44527]]

impacted the industry's ability to process the extra peach production.
    Once planted, it takes clingstone peach trees 3 years to produce 
fruit in commercial quantities. Once a peach grower has committed funds 
to the planting and maintenance of an orchard, it is difficult to 
reverse those decisions and recoup cost. Because supply is slow to 
adjust to changing market conditions, without some remedial action the 
industry anticipates many years of production outpacing demand, 
resulting in a continuation, if not a worsening, of disruptive market 
conditions.

Industry Self-Help Initiatives

    The California clingstone peach industry has taken a number of 
steps on its own to deal with oversupply issues. Since 1993, the 
industry has spent over $17 million to remove more than 10,000 acres of 
trees. In fact, the industry sponsored a tree pull in the spring of 
2005 resulting in the removal of 2,000 additional acres. Although the 
CCPA administered some industry initiated acreage removal programs that 
compensated growers, many growers carried the costs of tree removal 
themselves. As noted earlier, even with aggressive tree removal, net 
acreage is currently up by about 4,000 acres over what it was a decade 
ago. The CCPA has also initiated and helped fund research projects 
aimed at reducing labor costs in the orchards, funded export incentive 
programs, and, as of 2004, its growers have limited new plantings to 
the lowest level in more than 50 years (only 580 acres planted in 2004, 
and an estimated 890 acres will be planted in 2005). To further improve 
its long-term market position, the California peach industry plans on 
developing new processing technology as well as new and innovative uses 
for clingstone peaches other than canning.
    Despite these recent self-help efforts at mitigating the supply and 
demand imbalance, production of clingstone peaches has continued to be 
significantly greater than normal market needs. In fact, during both 
2001 and 2002, 50 million pounds of clingstone peaches were harvested 
but could not be sold, and in 2003 the unutilized quantity was 61 
million pounds. The unsold portions represented 5.3, 4.5, and 5.9 
percent, respectively, of the total crops in each of those years.
    The magnitude of the current oversupply problem is too great to 
deal with through industry funds alone. The California clingstone peach 
industry is in need of the immediate relief USDA can provide. A 
diversion program wholly consisting of a reduction in acreage through 
the removal of bearing trees would assist the industry in restoring a 
more balanced supply-demand situation for the clingstone peach industry 
in the short- and long-term.

Tree Removal Diversion Program

    The industry is requesting $5 million in federal funds to fund a 
voluntary tree removal program, including administrative costs. In 
addition, a total of $2 million from CCPA assessments on its grower-
members (to be collected and remitted by processors based on 2005 
season deliveries) would be used to augment the federal funds.
    The industry would like to remove 4,000 bearing acres of clingstone 
peach trees, or a little over 13 percent of the 30,200 acres currently 
in production. A healthy peach tree lives for about 20 years and 
reaches peak production when between 8 and 12 years old. Many of the 
current bearing trees are reaching the age where the normal cycle of 
removing old trees followed by replanting would be considered. The 
proposed diversion program would provide an incentive to growers to 
remove healthy, fruit bearing trees rather than those near the end of 
their productive life, while ensuring that those orchards are not 
replanted with clingstone peach trees.
    To be eligible for the proposed tree removal program, growers must 
have made deliveries to processors during 2005. Orchards that have been 
abandoned would not be eligible for participation. Growers would be 
paid $100/ton based on their actual 2005 peach deliveries to processors 
from the same acreage that is being removed, provided that payments 
would not exceed $1,700 per acre nor be less than $500 per acre. Trees 
would have to be removed prior to May 1, 2006, and to be eligible, must 
be bearing and have been planted after 1988 and before 2002. Thus, 
trees removed under this proposed program would be 17 or fewer years 
old.
    Growers who participate in the diversion program and subsequently 
replant a clingstone peach tree in the same location, and within the 
10-year period following removal of the trees, would be required to 
refund to USDA all payments received, plus interest, on replanted 
acreage. Because it takes new trees at least 3 years to be commercially 
productive, this provision would effectively remove the acreage 
participating in the diversion program from commercial production of 
clingstone peaches for at least 13 years.
    As previously stated, the tree removal program would reduce 
California clingstone peach acreage by up to 4,000 acres, which, based 
on the most recent 10-year average annual yield of 17.5 tons per acre, 
could reduce annual production by approximately 70,000 tons. This one-
time decrease in production would help align supply with demand, while 
also ensuring an adequate supply. In addition, this program would 
provide the clingstone peach industry with the economic opportunity to 
concentrate its efforts on rebuilding demand for the future.
    The diversion program would be administered by AMS and CCPA. Any 
California clingstone peach grower wishing to participate in the 
program would file an application with the CCPA on a form approved by 
OMB. The application period would begin after publication of the final 
rule announcing the terms and conditions of the program. Applications 
would have to be submitted by October 31, 2005.
    Each applicant would provide information needed by the CCPA to 
operate the program. This would include, for example, the location of 
the orchard from which trees would be removed, the acreage to be 
removed, and the tonnage harvested off the applicable acreage in 2005. 
Applicants would also certify that all equity holders in the 
participating acreage consent to the filing of the application, and 
would agree not to replant clingstone peach trees on the same acreage 
for 10 years after the trees were removed. The CCPA would review each 
application for completeness, and would make every reasonable effort to 
contact growers to obtain any missing information.
    Each approved applicant would be notified by the CCPA on another 
form approved by OMB. The approved grower would be required to fill out 
a portion of this ``notification'' form, certifying to the CCPA that 
he/she had removed the clingstone peach trees, and the date of removal. 
The remainder of this form would be filled out by a CCPA staff member. 
The staff member would verify that the approved block of clingstone 
peach trees had been removed, list the equivalent 2005 delivery tons 
removed, and indicate the total amount of money due to the grower.
    As noted earlier, the USDA would provide $5 million to fund the 
tree removal program, including administrative costs. Applications 
would be approved until the available USDA funds have been committed. 
Each participating grower would have until May 1, 2006, to remove trees 
from their land.
    Growers would be paid $100 per ton based on their actual peach 
deliveries to processors of peaches that were

[[Page 44528]]

harvested in 2005 from the acreage involved in the tree removal 
program. Based on the conditions of program participation, payments to 
growers would range from $500 to $1,700 per acre, which should cover 
most of the costs of removing the trees as well as preparing the land 
for other uses. Thus, even if a grower had a yield greater than 17 tons 
per acre on the acreage selected for removal, payment would not exceed 
the maximum of $1,700 per acre established by this rule.
    Conversely, if a selected block of land had a 2005 yield of 5 tons 
per acre or less, the grower would receive the minimum of $500 per 
acre. The $100 per ton payment, as well as the upper and lower limits 
to the amount paid per acre, are considered necessary to help ensure 
that enough growers participate in the tree removal program. The costs 
of participating in the program would vary depending on the number of 
acres removed. Some cost savings may accrue when larger blocks of 
acreage are removed.
    Estimated costs for tree removal, including the removal of roots 
and associated debris, range from $325-$525 per acre. In addition, 
costs associated with preparing the ground for other crops, including 
leveling, fumigation, and weed control could cost between $1,050 and 
$1,875. Based on these estimates, grower costs associated with tree 
removal could total as much as $2,400 per acre. The $500-$1,500 per 
acre payment proposed under the program would offset a significant 
portion of each grower's costs associated with tree removal.
    Further offsetting the costs of tree removal would be the economic 
opportunities afforded the grower associated with being positioned to 
plant alternative crops on the cleared acreage. Additionally, the 
current economic conditions within the industry, specifically weak 
demand, reduced per capita consumption, stagnant domestic shipments and 
exports, increasing low-priced imports, and declining grower prices and 
revenues would appear to limit the incentives for replanting acreage to 
clingstone peach trees.

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Agricultural Marketing Service (AMS) has considered the 
economic impact of this rule on small entities. Accordingly, 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 actions in order that small businesses will not be 
unduly or disproportionately burdened.
    There are about 700 growers of clingstone peaches in California. 
Small agricultural producers have been defined by the Small Business 
Administration (13 CFR 121.201) as those having annual receipts of less 
than $750,000. Based on 2003 data from the California Agricultural 
Statistics Service, all of the growers would be considered small 
growers with annual incomes under $750,000. Thus, the majority of the 
growers would be considered small entities under SBA's definition.
    This proposed rule would establish a tree removal diversion program 
for California cling peaches. Authority for this program is provided in 
clause (3) of Section 32 of the Act of August 24, 1935, as amended.
    Participation in the diversion program is voluntary, so individual 
producers, both large and small, can weigh the benefits and costs for 
their own operations before deciding whether to participate in the 
program.

Economic Assessment of the Diversion Program

    To assess the impact a tree removal program would have on prices 
growers receive for their product, impacts on grower prices and 
inventories with a tree removal program and without a tree removal 
program were estimated. This economic assessment compares the benefits 
and costs of a tree removal program to the alternative of not having a 
tree removal program. An econometric model was also developed for the 
purpose of estimating nominal season average grower prices under both 
scenarios.
    Although a tree removal program would directly reduce the number of 
bearing acres, the impact of the program would not be apparent until 
after the 2006 crop harvest. In 2004, bearing acres are estimated at 
31,740 acres. The industry has indicated that no additional net 
plantings of clingstone peach trees are occurring at this time. 
However, trees planted in 2002 through 2004 will enter production in 
2005 through 2007.
    The tree removal analysis assumes that 4,000 acres of clingstone 
peach orchards would be removed through this program. This results in 
the reduction in bearing acreage from 31,740 to 30,480. This number is 
estimated by taking the bearing acreage of 31,740, subtracting the 
proposed tree removal acreage (4,000) and adding the acreage planted in 
2002 (2,740 acres), which will start producing in 2005. Subsequent 
years' bearing acreage is estimated using the same process; i.e., 
adding estimated acres planted three years earlier to existing bearing 
acreage.
    Under the proposed program, acreage in 2010 is estimated to total 
28,256. It is assumed that the industry would only replant trees that 
were removed due to old age. However, it is not likely that all trees 
removed due to age would be replaced, and further, that trees removed 
due to age would not be involved in the tree removal program.
    Production for 2004 is reported by NASS at 539,000 tons. Carryin 
inventory for 2004 was reported by CCPA to be 3.44 million cases (24 
No. 2\1/2\ size cans--No. 2\1/2\ cans have a net weight of 27-29 
ounces).
    Based on historical pack-out and per capita consumption, CCPA has 
estimated that demand for the 2005 clingstone peach crop could 
approximate 460,000 tons. Subsequent demand for canned peaches is 
estimated to increase by about one percent a year for 2006 through 
2010. This assumes that per capita consumption remains constant while 
demand increases with the level of population.
    The 2005 clingstone peach production, however, is estimated at 
564,685 tons based on the reduced acreage projection of 30,480 acres 
and an estimated yield of 18.53 tons per acre. For this analysis, the 
estimated carryin is 3 million cases (24 No. 2\1/2\ basis) for 2005 and 
2 million cases (24 No. 2\1/2\ basis) for 2006 through 2010, which is 
the desirable level favored by the industry.
    Acreage removed after 2006 is estimated based on an econometric 
model. Despite the removal of 4,000 acres in the diversion program, the 
industry would conceivably continue to remove acreage on its own due to 
normally aging orchards.
    The analysis also estimates yields based on an autoregressive model 
of order two that allows for some fluctuations up and down. Yields 
under the proposed tree removal program are adjusted upwards by 0.2 
tons per acre due to the removal of lower yielding trees which would 
result in higher average yields than would happen without a program. 
Estimated production, computed by multiplying acreage times yield, 
fluctuates accordingly.
    As carryin inventories are reduced, the total available supply 
would moderate for 2006 through 2010, relative to the situation without 
a tree removal program. This results in estimated season average grower 
prices ranging from $224 to $245 per ton during that same time span. 
This estimated price is slightly more than the

[[Page 44529]]

total estimated cost of production. It should be noted that the margin 
of error for these estimates becomes very large for future years.
    Even though season-average grower prices per ton increase under the 
tree removal program, all product produced is not necessarily of 
marketable quantity. Costs are incurred on all of the production, but 
revenue is received only on product actually marketed. Thus, the 
economic effect of the tree removal program on a per acre basis is to 
dramatically reduce losses and bring producer returns closer to a 
break-even level. With the level of imports anticipated to continue to 
increase and with the level of exports anticipated to continue to 
decrease, there should be only a limited incentive to further expand 
production as a result of the tree removal program. It would remain for 
growers to control costs and to expand demand to ensure their longer-
term economic stability.
    Grower prices are a small component of the marketable canned peach 
product and are not closely associated with movements in retail prices. 
However, the increases in grower prices estimated for 2006 through 2010 
may have an impact on retail prices. The extent of any retail price 
increases would depend on processor and retailer margins, as well as 
the pricing and availability of substitute canned fruit products. It 
should be noted that clingstone peach prices are estimated to increase 
with or without a tree removal program, but the magnitude of the grower 
price increase is greater with the program. This increase in retail 
price may have a slight negative impact on the quantity demanded. Such 
a decrease in the quantity demanded is not taken into account in this 
analysis.
    Without a tree removal program in place, the number of bearing 
acres is also estimated to decrease, although at a rate slower than 
with a tree removal program. This decrease in bearing acreage is 
estimated by taking the number of producing acres during the prior 
year, subtracting the number of acres removed from production and then 
adding the number of acres planted three seasons previously. For the 
2006 through 2010, production is estimated to decrease due to the 
decline in the number of bearing acres. However, marketable production 
would continue to be above the estimated 460,000 tons desired by the 
industry and carryin inventories are estimated as high as 3.5 million 
cases (24 No. 2\1/2\ basis). In addition, abandonment of some product 
is estimated to occur for 2005 through 2010. Under this scenario, 2005 
grower prices are estimated at $220 per ton. With high inventories and 
low grower prices, market forces are assumed to induce growers to 
remove less productive acres and the number of bearing acres is 
estimated to decline from to 31,740 to 29,068. Even with the decline in 
bearing acres, production and inventories remain excessive from 2006 
through 2010. Under this scenario, grower prices are estimated to 
remain below or equal to the cost of production until 2010 when prices 
are estimated to be just above the cost of production.
    Under both scenarios, grower prices increase. However, adjustments 
to inventories and prices occur more rapidly under a tree removal 
program. This would accelerate benefits to growers until market forces 
could bring about a slow correction.
    In addition to the direct impact a tree removal program would have 
on grower price and revenue, there are indirect impacts. A tree removal 
program assists in decreasing the volume of fruit that is harvested but 
subsequently not utilized or simply not harvested. Without a tree 
removal program, large quantities of clingstone peaches could be 
produced and harvested but not utilized by packers. Growers would have 
to cover the total cost of production, harvest, and transportation but 
only receive payments on fruit actually canned. Further, in an attempt 
to sell the excessive inventories, packers might reduce f.o.b. prices, 
which in turn leads to market share battles and lower prices being 
passed back to producers. A more balanced supply and demand situation 
allows growers and packers to jointly continue developing markets in 
ways that benefit the entire industry.

Benefits of the Program

    The economic assessment of the tree removal program indicates that 
it is expected to benefit growers (particularly small, under-
capitalized growers), canners, and others associated with the 
clingstone peach industry. The per ton sales price is projected to 
increase over the next six years, thus reducing losses and moving 
grower returns closer to break-even levels. The benefit to growers from 
reduced losses is projected to total approximately $50 million over the 
six-year period. The benefits over the six-year period would average 
nearly $8 million annually.

Costs of the Program

    The major direct cost of the program would be the payment to 
growers for removing their clingstone peach trees. A total of $5 
million, less the costs associated with local administration of the 
program, would be made available by USDA for the tree removal program. 
Administrative costs for reviewing applications and verifying tree 
removals are expected to be about $125,000. Major expense categories 
for administration include costs for salaries and benefits, vehicle 
rental and maintenance, and insurance, overhead, and supplies.
    Total grower costs associated with the completion of diversion 
program applications, payment requests, and record maintenance for the 
period specified after tree removal are expected to be about $530.

Overall Assessment of the Program

    Payments made through this program could help California clingstone 
peach growers by addressing the oversupply problem that is adversely 
affecting their industry. The implementation of a tree removal program 
could reduce available supply more quickly than if the industry relied 
on market forces alone. While market forces could also result in 
supplies being reduced, such an adjustment may occur more slowly, with 
resultant economic hardships for growers and processors. In addition, a 
tree removal program could be beneficial in reducing the risk of loan 
default for lenders that financed clingstone peach growers. This 
program could also help small, under-capitalized growers stay in 
business. Such small growers are often efficient, but do not have 
adequate resources to continue to operate given the current depressed 
conditions within their industry.
    Increasing the level of profitability also should provide 
opportunities for the industry to engage in additional demand-enhancing 
activities, especially directed at the domestic market. Even a moderate 
increase in domestic per capita consumption would have a significant, 
positive impact on grower returns.
    Costs for the program would include the $7 million ($5 million 
provided by USDA and $2 million by the industry) to be paid to growers 
and to the CCPA for administrative costs. Additionally, growers would 
incur costs totaling $500 to comply with the application and record-
keeping requirements of the program.
    Benefits to growers under the tree removal program could total 
approximately $50 million. This is calculated by multiplying total 
marketable production for each of the next six years times the 
difference between grower price and variable cost, and then adding 
those figures. This calculation was done for each of the two scenarios 
(with and without a tree removal program). The $50 million difference 
between those figures

[[Page 44530]]

represents an estimate of program benefits resulting from reduced 
grower losses.
    Growers who participate in the tree pull program will likely remove 
older, less productive trees from production. Because younger trees are 
more productive, older trees typically have higher variable costs of 
production than younger trees, where the variable costs are spread over 
a higher yield. Accordingly, the $50 million benefit under the tree 
pull scenario is the result of both higher prices resulting from the 
tree pull combined with lower variable costs per ton of production.
    This cost calculation assumes that the acreage on which trees are 
removed remains idle, and that growers would therefore absorb all fixed 
costs on that acreage. To the extent that the land is put to other 
productive uses, growers would not be absorbing all fixed costs of 
producing clingstone peaches, and grower benefits would be higher.
    If growers are earning more income, it follows that processors 
would pay more to obtain the peaches from the growers. These higher 
costs could be passed on to consumers through higher retail prices or 
could be absorbed as reduced operating margins for processors, 
wholesalers, or retailers. An estimate of these costs is obtained by 
multiplying the estimated grower price over each of the next six years 
times annual shipments with the diversion program in place and without 
it in place. That figure, summed over the six years, is approximately 
$25 million. Processors, wholesalers, and retailers are anticipated to 
absorb the additional costs. Adjustments in retail prices, as well as 
retailer and processor margins, are anticipated to change with or 
without the program.
    Another cost of the tree removal program is the reduced economic 
activity due to the growers purchasing fewer inputs (labor, chemicals, 
etc.) because of the reduction in the number of clingstone peach acres 
managed and harvested. Farm laborers and agricultural supply firms such 
as chemical manufacturers and distributors would realize less revenue 
because of the reduced need for their services and goods. To the extent 
that acreage removed is replanted in other crops, those costs could be 
somewhat offset by purchases of labor and supplies to produce the 
alternative crops. This cost of the tree removal program is difficult 
to quantify and is not included in this analysis.

Conclusion

    Based on all of the information available, USDA has determined that 
there is a surplus of clingstone peaches, and that reestablishment of 
growers' purchasing power would be encouraged by using Section 32 funds 
to reduce supplies under a tree removal program for California 
clingstone peaches. USDA has further determined that this program would 
be a long-term solution to the oversupply situation that exists in the 
California clingstone peach industry, and that it would provide relief 
to growers.
    Each grower participating in the program would agree not to replant 
clingstone peaches on the land from which the trees were removed for 10 
years from the date the trees are removed. The non-planting promise is 
a guarantee by the participant that no one (not just the participant) 
would plant the land to clingstone peaches. Only those persons who are 
current owners of the land, and have not contracted to sell the land or 
destroy the trees, would be eligible to participate. Also, growers 
would guarantee that they have not made prior arrangements to sell the 
land or remove the trees for commercial purposes, like shopping 
centers, housing developments, or similar such purposes. Including such 
non-agricultural land in the program would not serve the purposes of 
the tree removal program.
    A 30-day comment period is provided to allow interested persons the 
opportunity to respond to the proposal, including any regulatory and 
informational impacts of this proposed action on small businesses. This 
comment period is deemed appropriate so that a final determination can 
be made during late summer in 2005 so those clingstone peach growers 
choosing to participate in the program have adequate time to prepare 
and to implement individual tree removal plans. All written comments 
received within the comment period will be considered before a final 
determination is made on this matter.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the AMS announces its intention to request approval by OMB 
of a new information collection, California Clingstone Peach (Tree 
Removal) Diversion Program, under OMB No. 0581-NEW.
    AMS is committed to compliance with the Government Paperwork 
Elimination Act (GPEA), which requires Government agencies in general 
to provide the public the option of submitting information or 
transacting business electronically to the maximum extent possible.
    As mentioned earlier, two forms would be needed for the 
administration of the tree removal program. Growers who wish to 
participate in the program would have to submit form FV-302, 
``Application for Clingstone Peach Tree Removal Program,'' along with 
documentation, to the CCPA, which would administer the program. Upon 
receipt of FV-302, the CCPA would send the grower form FV-303, 
``Notification of Clingstone Peach Tree Removal.'' The grower would 
fill out a portion of this form certifying that his/her approved block 
of clingstone peach trees was removed, and the date of removal. The 
remainder of this form would be filled out by a CCPA staff member, 
notifying the grower of his/her eligibility to receive a diversion 
payment. The form would also be used to notify USDA that the CCPA 
verified the grower's compliance with program regulations and recommend 
disbursement of Section 32 funds to the grower. Finally, participants 
would be required to retain records pertaining to the tree removal 
program for 10 years after the date the trees were removed.
    We estimate that 100 growers may submit applications, and that it 
would take each grower about 30 minutes to complete, for a total burden 
of 50 hours. We also estimate that it would take the growers about 2 
minutes to complete their portion of the notification form, for a total 
burden of 3 hours. The estimated one-time cost for all growers in 
completing the participation application and payment request statement 
(notification form), and maintaining records, is $530. This total cost 
was calculated by multiplying the estimated 53 burden hours by $10 per 
hour (a sum deemed reasonable, should the applicants be compensated for 
this time).
    Title: California Clingstone Peach (Tree Removal) Diversion 
Program.
    OMB Number: 0581-NEW.
    Type of Request: New Collection.
    Abstract: The information collection requirements in this request 
are applied only to those growers who voluntarily participate in the 
tree removal program. The information is essential to carry out the 
program, and to administer release of payments to participating 
growers.
    The program is expected to bring domestic canned peach supplies 
more in line with market demands and provide relief to California 
growers faced with excess acreage and supplies, and with low prices for 
their clingstone peaches. The program would ensure that those trees 
removed are not part of a normal tree replacement process.
    The forms covered under this information collection require the

[[Page 44531]]

minimum information necessary to effectively carry out the requirements 
of the program, and their use is necessary to fulfill the intent of 
clause (3) of Section 32 and the rules and regulations issued 
thereunder. This program would not be maintained by any other agency, 
therefore, the requested information will not be available from any 
other existing records.
    The information collected would be used only by authorized CCPA 
staff, and authorized representatives of the USDA, including AMS' Fruit 
and Vegetable Programs' regional and headquarters staff. Authorized 
employees of the CCPA are the primary users of the information, and AMS 
is the secondary user. All information collected would be treated as 
confidential (as indicated on the forms), and would be in conformance 
with the Privacy Act and the Freedom of Information Act.
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average .26 hours per response.
    AMS estimates that the total annual burden is 53 hours. The 
proposed request for approval of the information collection under the 
program is as follows:

FV-302, Application for Clingstone Peach Tree Removal Program

    Estimate of Burden per Response: .5 hours.
    Respondents: California clingstone peach growers.
    Estimated Number of Respondents: 100.
    Estimated Annual Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 50 hours.

FV-303, Notification of Clingstone Peach Tree Removal

    Estimate of Burden per Response: .03 hours.
    Respondents: California clingstone peach growers.
    Estimated Number of Respondents: 100.
    Estimated Annual Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 3 hours.
    Estimate of Burden per recordkeeper: 1.2 minutes.
    Respondents: California clingstone peach growers.
    Estimated Number of Respondents: 100.
    Estimated Total Annual Burden on Respondents: 2 hours.
    Comments: Comments are invited on: (1) Whether the proposed 
collection of the information is necessary for the proper performance 
of the functions of AMS, including whether the information will have 
practical utility; (2) the accuracy of AMS' estimate of the burden of 
the proposed collection of information, including the validity of the 
methodology and assumptions used; (3) ways to enhance the quality, 
utility and clarity of the information to be collected; and (4) ways to 
minimize the burden of the collection of information on those who are 
to respond, including through the use of appropriate automated, 
electronic, mechanical, or other technological collection techniques or 
other forms of information technology.
    Comments should reference OMB No. 0581-NEW and the California 
Clingstone Peach Tree Removal Diversion Program, and be mailed to the 
Docket Clerk, Fruit and Vegetable Programs, AMS, USDA, 1400 
Independence Avenue, SW., Stop 0237, Washington, DC 20250-0237; Fax 
(202) 720-8938; or e-mail: [email protected]. All comments 
should reference the docket number and the date and page number of this 
issue of the Federal Register. Comments will be available for public 
inspection in the Office of the Docket Clerk during regular business 
hours at Room 2525-S, 1400 Independence Avenue, SW., Stop 0237; or 
telephone: (202) 720-2491, or can be viewed at: http//www.ams.usda.gov/
fv/moab.
    All responses to this notice will be summarized and included in the 
request for OMB approval. All comments will also become a matter of 
public record.
    A 60-day comment period is provided to allow interested persons to 
respond to this proposed information collection.

List of Subjects in 7 CFR Part 82

    Administrative practice and procedures, Agriculture, Peaches, 
Reporting and recordkeeping requirements, Surplus agricultural 
commodities.

    For the reasons set forth in the preamble, it is proposed that 
title 7, subtitle B, chapter I, subchapter D, be amended as follows by 
adding part 82 to read as follows:

PART 82--CLINGSTONE PEACH DIVERSION PROGRAM

Sec.
82.1 Applicability.
82.2 Administration.
82.3 Definitions.
82.4 Length of program.
82.5 General requirements.
82.6 Rate of payment; total payments.
82.7 Eligibility for payment.
82.8 Application and approval for participation.
82.9 Inspection and certification of diversion.
82.10 Claim for payment.
82.11 Compliance with program provisions.
82.12 Inspection of premises.
82.13 Records and accounts.
82.14 Offset, assignment, and prompt payment.
82.15 Appeals.
82.16 Refunds; joint and several liability.
82.17 Death, incompetency or disappearance.

    Authority: 7 U.S.C. 612c.


Sec.  82.1  Applicability.

    Pursuant to the authority conferred by Section 32 of the Act of 
August 24, 1935, as amended (7 U.S.C. 612c) (Section 32), the 
Agricultural Marketing Service (AMS) will make payment to California 
growers who divert clingstone peaches by removing trees on which the 
fruit is produced in accordance with the terms and conditions set forth 
herein.


Sec.  82.2  Administration.

    The program will be administered under the general direction and 
supervision of the Deputy Administrator, Fruit and Vegetable Programs, 
AMS, United States Department of Agriculture (USDA), and will be 
implemented by the California Canning Peach Association (CCPA). The 
CCPA, or its authorized representatives, does not have authority to 
modify or waive any of the provisions of this subpart. The 
Administrator or delegatee, in the Administrator's or delegatee's sole 
discretion can modify deadlines to serve the goals of the program. In 
all cases, payments under this part are subject to the availability of 
funds.


Sec.  82.3  Definitions.

    (a) Administrator means the Administator of AMS.
    (b) AMS means the Agricultural Marketing Service of the U. S. 
Department of Agriculture.
    (c) Application means ``Application for Clingstone Peach Tree 
Removal Program.''
    (d) Calendar year means the 12-month period beginning January 1 and 
ending the following December 31.
    (e) CCPA means the California Canning Peach Association, a grower-
owned marketing and bargaining cooperative representing the clingstone 
peach industry in California.
    (f) Diversion means the removal of clingstone peach trees after 
approval of applications by the CCPA.
    (g) Grower means an individual, partnership, association, or 
corporation in the State of California who grows clingstone peaches for 
canning.
    (h) Removal or removed means that the clingstone peach trees are no 
longer

[[Page 44532]]

standing and capable of producing a crop, and the roots of the trees 
have been removed. The grower can accomplish removal by any means the 
grower desires. Grafting another type of tree to the rootstock 
remaining after removing the clingstone peach tree would not qualify as 
removal under this program.


Sec.  82.4  Length of program.

    This program is effective [Insert date 1 day after publication of 
the final rule in Federal Register], through [Insert date 10 years 
after the effective date of the program]. Growers diverting clingstone 
peaches by removing clingstone peach trees must complete the diversion 
no later than May 1, 2006.


Sec.  82.5  General requirements.

    (a) To be eligible for this program, the trees to be removed must 
be fruit-bearing and have been planted after the 1988 and before the 
2002 calendar years. Abandoned orchards and dead trees will not 
qualify. The block of trees for removal must be easily definable by 
separations from other blocks of eligible trees and contain at least 
1,000 eligible trees or an entire orchard.
    (b) Any grower participating in this program must agree not to 
replant clingstone peach trees on the land cleared under this program 
through May 1, 2016. Participants bear responsibility for ensuring that 
trees are not replanted, whether by themselves, by successors to the 
land, or by any other person, until after May 1, 2016. If trees are 
replanted before May 1, 2006, by any persons, participants must refund 
all USDA payments, with interest, made in connection with this tree 
removal program.


Sec.  82.6  Rate of payment; total payments.

    (a) Applications will be processed on a first-come, first-served 
basis. Growers will be paid $100 per ton based on their actual 2005 
deliveries of clingstone peaches to processors from those acres of 
clingstone peach trees removed under this program, except that, 
regardless of actual 2005 deliveries, growers will receive a minimum of 
$500 per acre and a maximum of $1,700 per acre.
    (b) Payment under paragraph (a) of this section will only be made 
after tree removal has been verified by the staff of the CCPA.
    (c) The $100 per ton payment is intended to cover the costs of tree 
removal. USDA will not make any other payment with respect to such 
removals. The grower will be responsible for arranging, requesting, and 
paying for the tree removal in the specified acreage.
    (d) Total payments under this program are limited to not more than 
$5,000,000 of section 32 funds. No additional expenditures shall be 
made unless the Administrator or delegatee in their sole and exclusive 
discretion shall, in writing, declare otherwise.


Sec.  82.7  Eligibility for payment.

    (a) If total applications for payment do not exceed $5,000,000, 
less administration costs, payments, as set forth in Sec.  82.6, 
payment will be made under this program to any grower of clingstone 
peaches who complies with the requirements in Sec.  82.8 and all other 
terms and conditions in this part.
    (b) If applications for participation in the program authorized by 
this part exceed $5,000,000, less administration costs, the CCPA will 
approve the applications (subject to the requirements in Sec.  82.8) in 
the order in which the completed applications are received in the CCPA 
office to the extent that funds are available. Applications received 
after total outlays exceed the amount of money available will be 
denied.


Sec.  82.8  Application and approval for participation.

    (a) Applications will be reviewed for program compliance and 
approved or disapproved by CCPA office personnel.
    (b) Applications for participation in the Clingstone Peach 
Diversion Program can be obtained from the CCPA office at 2300 River 
Plaza Drive, Suite 110, Sacramento, CA 95833; Telephone: (916) 925-
9131; Fax: (916) 925-9030.
    (c) Any grower desiring to participate in the Clingstone Peach 
Diversion Program must file an application with the CCPA prior to 
October 31, 2005. The application shall be accompanied by a copy of any 
two of the following four documents: Plot Map from the County Hall of 
Records; Irrigation Tax Bill; County Property Tax Bill; or any other 
documents containing an Assessor's Parcel Number. Such application 
shall include at least the following information:
    (1) The name, address, telephone number, and tax identification 
number or social security number of the grower;
    (2) The location and amount of acreage to be diverted;
    (3) The 2005 clingstone peach production from the acreage to be 
diverted;
    (4) If the land with respect to which the clingstone peach trees 
will be destroyed is subject to a mortgage, statutory lien, or other 
equity interest, the grower must obtain from the holder of such 
interest a written statement that such party agrees to the enrollment 
of such land in this program to the extent determined necessary by AMS. 
Obtaining such assent shall be the responsibility of the applicant who 
shall alone bear any responsibilities which may extend to such third 
parties;
    (5) A statement that the applicant agrees to comply with all of the 
regulations established for the clingstone peach diversion program;
    (6) The applicant shall sign the application certifying that the 
information contained in the application is true and correct;
    (7) The year that the clingstone peach acreage to be diverted was 
planted;
    (8) The names of the processors who received the clingstone peaches 
from the grower in 2005.
    (d) After the CCPA receives the applications, it shall review them 
to determine whether all the required information has been provided and 
that the information is correct.
    (e) If the deliveries off the acreage to be removed in such 
applications, multiplied by $100 per ton (for actual 2005 deliveries on 
these acres, but within the constraints of a minimum payment of $500 
per acre and a maximum payment of $1,700 per acre), exceed the amount 
of funds available for the diversion program, each grower's application 
will be considered in the order in which they are received at the CCPA 
office.
    (f) After the application reviews and confirmation of eligible 
trees are completed, the CCPA shall notify the applicant, in writing, 
as to whether or not the application has been approved and the tonnage 
approved for payment after removal. If an application is not approved, 
the notification shall specify the reason(s) for disapproval.


Sec.  82.9  Inspection and certification of diversion.

    When the removal of the clingstone peach trees is complete, the 
grower will notify the CCPA on a form provided by the CCPA. The CCPA 
will certify that the trees approved for removal from the acreage have 
been removed, and notify AMS.


Sec.  82.10  Claim for payment.

    To obtain payment for the trees removed, the grower must submit to 
the CCPA by June 30, 2006, a completed form provided by the CCPA. Such 
form shall include the CCPA's certification that the qualifying trees 
from the acreage have been removed. AMS will then issue a check to the 
grower in the amount of $100 per eligible ton removed consistent with 
the minimum and maximum payments per acre earlier specified in this 
part.

[[Page 44533]]

Sec.  82.11  Compliance with program provisions.

    If USDA or the CCPA determines that any provision of this part have 
not been complied with by the grower, the grower will not be entitled 
to diversion payments in connection with tree removal. If a grower does 
not comply with all the terms of this part, including the requirement 
specified in Sec.  82.5(b), the grower must refund any payment made in 
connection with this program, and will also be liable for any other 
damages incurred as a result of such failure. The USDA may deny any 
grower the right to participate in this program or the right to receive 
payments in connection with any diversion previously made under this 
program, or both, if the USDA determines that:
    (a) The grower has failed to properly remove the clingstone peach 
trees from the applicable acreage, regardless of whether such failure 
was caused directly by the grower or by any other person or persons;
    (b) The grower has not acted in good faith, or has engaged in a 
scheme, fraud, or device, in connection with any activity under this 
program; or
    (c) The grower has failed to discharge fully any obligation assumed 
by him or her under this program.


Sec.  82.12  Inspection of premises.

    The grower must permit authorized representatives of USDA or the 
CCPA, at any reasonable time, to have access to their premises to 
inspect and examine the acreage where the trees were removed as well as 
any records pertaining to that acreage to determine compliance with the 
provisions of this part.


Sec.  82.13  Records and accounts.

    (a) The growers participating in this program must keep accurate 
records and accounts showing the details relative to the clingstone 
peach tree removal, including the contract entered into with any firm 
removing the trees, as well as the invoices.
    (b) The growers must permit authorized representatives of USDA, the 
CCPA, and the Government Accountability Office at any reasonable time 
to inspect, examine, and make copies of such records and accounts to 
determine compliance with provisions of this part. Such records and 
accounts must be retained for ten years after the date of payment to 
the grower under the program, or for ten years after the date of any 
audit of records by USDA, whichever is later. Any destruction of 
records by the grower at any time will be at the risk of the grower 
when there is reason to know, believe, or suspect that matters may be 
or could be in dispute or remain in dispute.


Sec.  82.14  Offset, assignment, and prompt payment.

    (a) Any payment or portion thereof due any person under this part 
shall be allowed without regard to questions of title under State law, 
and without regard to any claim or lien against the crop proceeds 
thereof in favor of the grower or any other creditors except agencies 
of the U.S. Government.
    (b) Payments which are earned by a grower under this program may be 
assigned in the same manner as allowed under the provisions of 7 CFR 
part 1404.


Sec.  82.15  Appeals.

    Any grower who is dissatisfied with a determination made pursuant 
to this part may make a request for reconsideration or appeal of such 
determination. The Deputy Administrator of Fruit and Vegetable Programs 
shall establish the procedure for such appeals.


Sec.  82.16  Refunds; joint and several liability.

    (a) In the event there is a failure to comply with any term, 
requirement, or condition for payment arising under the application of 
this part, and if any refund of a payment to AMS shall otherwise become 
due in connection with the application of this part, all payments made 
under this part to any grower shall be refunded to AMS together with 
interest.
    (b) All growers signing an application for payment as having an 
interest in such payment shall be jointly and severally liable for any 
refund, including related charges, that is determined to be due for any 
reason under the terms and conditions of the application of this part.
    (c) Interest shall be applicable to refunds required of any grower 
under this part if AMS determines that payments or other assistance 
were provided to a grower who was not eligible for such assistance. 
Such interest shall be charged at the rate of interest that the United 
States Treasury charges the Commodity Credit Corporation (CCC) for 
funds, as of the date AMS made benefits available to such grower. Such 
interest shall accrue from the date of repayment or the date interest 
increases as determined in accordance with applicable regulations. AMS 
may waive the accrual of interest if AMS determines that the cause of 
the erroneous determination was not due to any action of the grower.
    (d) Interest determined in accordance with paragraph (c) of this 
section may be waived on refunds required of the grower when there was 
no intentional noncompliance on the part of the grower, as determined 
by AMS. Such decision to waive or not waive the interest shall be at 
the discretion of the Administrator or delegatee.
    (e) Late payment interest shall be assessed on all refunds in 
accordance with the provisions of, and subject to the rates prescribed 
for, those claims which are addressed in 14 CFR part 1403.
    (f) Growers must refund to AMS any excess payments, as determined 
by AMS, with respect to such application. Such determinations shall be 
made by the Administrator or delegatee.
    (g) In the event that a benefit under this part was provided as the 
result of erroneous information provided by the grower, or was 
erroneously or improperly paid for any other reason, the benefit must 
be repaid with any applicable interest, subject to paragraphs (c) and 
(d) of Sec.  82.6.


Sec.  82.17  Death, incompetency, or disappearance.

    In the case of death, incompetency, disappearance, or dissolution 
of a clingstone pech grower that is eligible to receive benefits in 
accordance with this part, any person or persons who would, under 7 CFR 
part 707 of this title, be eligible for payments and benefits covered 
by this part, may receive such benefits otherwise due the actual 
producer, as determined appropriate by AMS.

    Dated: July 28, 2005.
Robert C. Keeney,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 05-15231 Filed 8-2-05; 8:45 am]
BILLING CODE 3410-02-P