[Federal Register Volume 76, Number 217 (Wednesday, November 9, 2011)]
[Proposed Rules]
[Pages 69673-69678]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-29031]
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Proposed Rules
Federal Register
________________________________________________________________________
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. 76, No. 217 / Wednesday, November 9, 2011 /
Proposed Rules
[[Page 69673]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 930
[Doc. No. AO-370-A9; 11-0093; AMS-FV-10-0087; FV10-930-5]
Tart Cherries Grown in Michigan, New York, Pennsylvania, Oregon,
Utah, Washington, and Wisconsin; Recommended Decision and Opportunity
To File Written Exceptions to Proposed Amendment of Marketing Order No.
930
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule and opportunity to file exceptions.
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SUMMARY: This is a recommended decision regarding proposed amendments
to Marketing Order No. 930 (order), which regulates the handling of
tart cherries grown in Michigan, New York, Pennsylvania, Oregon, Utah,
Washington, and Wisconsin. These amendments were proposed by the Cherry
Industry Administrative Board (CIAB), which is responsible for local
administration of the order. These amendments would revise: Section
930.10, the definition of ``Handle,'' Section 930.50, ``Marketing
Policy,'' and Section 930.58, ``Grower Diversion Privilege.''
The proposed amendments are intended to improve the operation and
administration of the order. This recommended decision invites written
exceptions on the proposed amendments.
DATES: Written exceptions must be filed by November 25, 2011.
ADDRESSES: Written exceptions should be filed with the Hearing Clerk,
U.S. Department of Agriculture, Room 1031-S, Washington, DC 20250-9200,
Fax: (202) 720-9776 or via the Internet at http://www.regulations.gov,
or to Parisa Salehi at the Email address provided in the FOR FURTHER
INFORMATION CONTACT section. All comments should reference the document
number and the date and page number of this issue of the Federal
Register. Comments will be made available for public inspection in the
Office of the Hearing Clerk during regular business hours, or can be
viewed at: http://www.regulations.gov. All comments submitted in
response to this rule will be included in the record and will be made
available to the public. Please be advised that the identity of the
individuals or entities submitting the comments will be made public on
the Internet at the address provided above.
FOR FURTHER INFORMATION CONTACT: Parisa Salehi, Marketing Order and
Agreement Division, Fruit and Vegetable Programs, AMS, USDA, 1400
Independence Avenue SW., Stop 0237, Washington, DC; Telephone: (202)
720-9918, Fax: (202) 720-8938, or Email: [email protected]; or
Martin Engeler, Marketing Order and Agreement Division, Fruit and
Vegetable Programs, AMS, USDA, 2202 Monterey Street, Fresno,
California, Telephone: (559) 487-5110, Fax: (559) 487-5906, or Email:
[email protected].
Small businesses may request information on this proceeding by
contacting Laurel May, Marketing Order Administration Division, Fruit
and Vegetable Programs, AMS, USDA, 1400 Independence Avenue SW., Stop
0237, Washington, DC 20250-0237; Telephone: (202) 205-2830, Fax: (202)
720-8938, Email: [email protected].
SUPPLEMENTARY INFORMATION: Prior document in this proceeding: Notice of
Hearing issued on March 4, 2011, and published in the March 14, 2011,
issue of the Federal Register (76 FR 13528).
This action is governed by the provisions of sections 556 and 557
of title 5 of the United States Code and is therefore excluded from the
requirements of Executive Order 12866.
Preliminary Statement
Notice is hereby given of the filing with the Hearing Clerk of this
recommended decision with respect to the proposed amendment to
Marketing Order 930 regulating the handling of tart cherries grown in
Michigan, New York, Pennsylvania, Oregon, Utah, Washington, and
Wisconsin and the opportunity to file written exceptions thereto.
Copies of this decision can be obtained from Parisa Salehi, whose
address is listed above.
This recommended decision is issued pursuant to the provisions of
the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C.
601-674), hereinafter referred to as the ``Act'', and the applicable
rules of practice and procedure governing the formulation of marketing
agreements and orders (7 CFR part 900).
The proposed amendments are based on the record of a public hearing
held April 20 and 21, 2011, in Grand Rapids, Michigan, and on April 26,
2011, in Provo, Utah. Notice of this hearing was published in the
Federal Register on March 14, 2011 (76 FR 13528).
The proposed amendments were recommended by CIAB and submitted to
USDA on September 22, 2010.
The proposed amendments recommended by CIAB are summarized below.
1. Amendment 1 would revise the term ``handle'' within the order.
This proposal would revise existing Sec. 930.10, Handle, to exclude
handler acquisition of grower diversion certificates from the
definition of handle.
2. Amendment 2 would revise the ``marketing policy'' provisions in
Sec. 930.50 of the order so that grower-diverted cherries are not
counted as production in the volume control formula.
3. Amendment 3 would revise the existing Sec. 930.58, so grower-
diverted cherries are not treated as actual harvested cherries.
In addition to the proposed amendments to the order, AMS proposed
making any additional changes to the order as may be necessary to
conform to any amendment that may result from the hearings.
Eighteen industry witnesses testified at the hearing. These
witnesses represented tart cherry producers and handlers in the
production area, as well as CIAB staff, and all supported the proposed
amendments.
At the conclusion of the hearing, the Administrative Law Judge
established a deadline of June 28, 2011, for interested persons to file
proposed findings and conclusions or written arguments and briefs based
on the evidence received at the hearing. CIAB requested an extension of
time to submit its brief. Its request was granted and the date for
submission of briefs was set to July 8,
[[Page 69674]]
2011. One brief was filed; it supported the proposed amendments.
Material Issues
The material issues presented on the record of hearing are as
follows:
(1) Whether to amend the order to exclude grower diversion
certificates from the definition of handle;
(2) Whether to amend the order so that grower diverted cherries are
not counted as production in the volume control formula;
(3) Whether to amend the order so that grower diverted cherries are
not treated as actual harvested cherries.
Findings and Conclusions
The following findings and conclusions on the material issues are
based on evidence presented at the hearing and the record thereof.
Material Issue Number 1--Definition of Handle
Section 930.10 of the order should be amended to exclude handler
acquisition of grower diversion certificates from the definition of
handle.
Under Section 930.10 of the order, the current definition of
``handle'' includes the converting of cherries commercially into a
processed product, and obtaining grower diversion certificates. Under
the order, a ``handler'' is any person who first handles cherries.
Marketing order obligations are applicable to handlers, and are based
upon the quantity of cherries handled by handlers.
Volume control provisions under the order provide a mechanism for
the industry to set aside crop in large crop years to help stabilize
supply and prices. When volume control is in effect, free and
restricted percentages are established. These percentages are applied
to cherries and grower diversion certificates acquired by handlers from
growers. Handlers can market free percentage cherries to any market. To
meet their restricted percentage obligation, handlers have three
options: place cherries in inventory reserve, acquire grower diversion
certificates, or divert cherries themselves.
Grower diversion provisions under the order provide another method
of managing supply by allowing growers the opportunity to undertake in-
orchard diversion of cherries prior to or during harvest. When a grower
chooses to divert cherries from production, the CIAB issues a grower
diversion certificate to that grower representing the quantity of the
diverted cherries that were left in the orchard. Growers can redeem the
diversion certificates with handlers, who then use the certificates as
one of their compliance tools to satisfy their restricted percentages.
Under current order provisions, handler acquisition of grower
diversion certificates is treated the same as actual cherries
delivered. Thus, when volume regulation is in effect, free and
restricted percentages apply to the quantity of cherries (including
grower diversion certificates) handled by each handler. As handlers
acquire grower diversion certificates in order to help satisfy their
restricted obligation, their restricted obligation increases. The
result is a reduction in value to handlers of the grower diversion
certificates, which in turn causes a disincentive for growers to divert
cherries.
Because the current order provisions regarding handler acquisitions
of grower diversion certificates reduces the value of grower diversion
certificates to handlers, growers are less likely to divert cherries
from production than they would be if handler acquisition of grower
diversion certificates was not considered ``handling'', and handlers'
restricted obligations did not increase with the acquisition of such
certificates.
According to hearing evidence, currently, when a handler utilizes
the grower diversion certificates, the handler compensates the grower
at a reduced rate because the certificates' worth as a compliance tool
to a handler is reduced. Witnesses testified that as a result, growers
have less incentive to divert cherries and utilize grower diversion
certificates. Data was presented at the hearing to illustrate the
potential difference in costs associated with diverting cherries by
leaving them un-harvested versus harvesting them. The data illustrates
that costs to both growers and handlers would be reduced, if this
amendment is implemented. A discussion of the costs and possible
reimbursement to growers, as well as the benefits, is included in the
Regulatory Flexibility Analysis section of this recommended decision.
Record evidence supports that if this amendment is implemented, it
would satisfy its intent to increase the value of grower diversion
certificates, and thus provide incentives for growers to leave some
fruit un-harvested, as they would receive full credit for diverting a
portion of their crops. According to the record, one of the primary
reasons the order was established was to improve grower returns. The
record indicates that while the order has benefited growers, prices in
general do not reach the growers' costs of production in some years.
The record further indicates, however, that if this proposal is
implemented, it would provide additional benefits to growers, and help
provide long-term sustainability of the industry.
Record evidence indicates that the current marketing order
provisions discourage in-orchard diversions, especially in those years
when the restricted percentage is large. Therefore, this aspect in the
order should be restructured to better serve the needs of the tart
cherry industry. Witnesses testified that if the term ``handle'' is
amended according to this proposal, it provides an incentive for
growers to divert a portion of their crop in high volume crop years.
Grower diversion can reduce growers' costs of harvesting and
transporting fruit. It can also help improve prices by decreasing the
supply of cherries in handlers' inventories. When the available supply
of cherries to the market is decreased, the price depressing effect of
oversupply is no longer present, resulting in a positive effect for
both growers and handlers.
Witnesses testified that the intent of this recommendation is to
remove the disincentive for growers to divert cherries from production.
The record indicates that increased grower diversion activity will help
to reduce excess supply, which in turn is expected to positively impact
grower returns. In addition, grower costs associated with harvesting
and transporting cherries to handlers will be reduced as more cherries
are diverted in orchard. Witnesses supported the idea that increasing
the value of un-harvested cherries would improve the volume control
provisions of the order, and would incentivize growers to divert their
cherries in orchard. There was no opposition testimony against this
proposed amendment. For the reasons stated herein, it is recommended
that Sec. 930.10, Handle, be amended to exclude the phrase ``or obtain
grower diversion certificates issued pursuant to Sec. 930.58.''
Material Issue Number 2--Marketing Policy
Section 930.50 of the order should be amended so that grower
diverted cherries are not counted as production in the volume control
formula. Section 930.50(d) of the order currently provides in part that
``No later than September 15 of each crop year the Board shall review
actual production during the current crop year * * *.'' Section
930.50(d), would be revised to read as follows: ``No later than
September 15 of each crop year the Board shall review the most current
information available including, but not limited to, processed
production and grower diversion of cherries during the current crop
year.''
[[Page 69675]]
Section 930.50 provides the parameters for computing volume control
percentages under the order. The CIAB must meet on or about July 1 of
each crop year to review sales data, inventory data, current crop
forecasts, and market conditions. From this information, the CIAB
computes an optimum supply, which essentially represents the desirable
amount of cherries needed to satisfy market demands for the upcoming
crop year. The CIAB also considers the carryin inventory and production
for the upcoming crop year to determine if the supply of cherries is
expected to exceed the optimum supply. If the expected supply exceeds
the optimum supply, free and restricted volume control percentages are
computed and implemented. Under current order provisions, cherries that
have been diverted from production by growers are considered as part of
the production when computing volume control percentages, because they
are considered to be ``handled'' when they are acquired by handlers, as
discussed under Material Issue Number 1. This proposed amendment would
require the CIAB to consider the quantity of grower diversion
certificates acquired by handlers when computing volume control
percentages, under the optimum supply formula (OSF) and is consistent
with the proposed amendment under Material Issue Number 1.
Through the volume control provisions of the order, the supply and
demand of tart cherries are brought into proper relationship with each
other. When the supply of tart cherries available to the market exceeds
the average demand for them in the domestic or ``free'' market, the
crop is restricted in terms of what may move into the free market. The
restricted cherries therefore are kept out of the domestic market. A
restricted percentage is calculated pursuant to Section 930.50 of the
order and each handler's acquisition of cherries and grower diversion
certificates is subject to that percentage.
The volume control mechanism under the order involves growers
diverting cherries from production by leaving them unharvested in the
orchard. Handlers can coordinate with their growers during large crop
years by encouraging them to divert cherries from production. Handlers
can then acquire from the growers the diversion certificates issued to
growers by the CIAB and use them as credit against their restriction or
reserve obligation.
As previously discussed, handlers must currently include the pounds
of cherries represented by the grower certificates they acquire as part
of their ``handling,'' as though these cherries had been delivered and
processed. This results in grower-diverted cherries being included as
part of production when the CIAB computes volume control percentages.
Witnesses testified that grower diversion certificates contribute
to the supply for the purpose of the OSF. Consequently, grower in-
orchard diversions effectively increase the supply of restricted
cherries in any given year, even though none of these cherries are
delivered or processed. A restricted percentage is calculated pursuant
to the OSF, and each handler's handle of restricted cherries is subject
to that percentage.
Witnesses testified that the fluctuation of the restriction
percentage and its impact upon grower diversion certificates creates
considerable uncertainty. This uncertainty stems from the fact that
grower diversions are part of the supply calculation in the OSF,
currently and contribute to restriction determination.
If these amendments are implemented, grower diversion certificates
would not be included as part of production in the volume control
formula. This is because, if the cherries are diverted, they would not
be added to the supply and would therefore not be part of OSF.
An additional change will be made to this section to the factors
that the CIAB considers when it computes the preliminary and interim
percentages or determines the final percentages to recommend to the
Secretary. Section 930.50(e) will be amended to include an additional
factor and phrase: ``to be the quantity of grower-diverted cherries
during the crop year.'' The order currently includes only nine factors.
A new section 930.50(e) would include an additional factor, ``(10) The
quantity of grower-diverted cherries during the crop year.'' This
change will require the CIAB to consider grower diversion of cherries
in OSF when it computes final percentages.
For the reasons stated above, it is recommended that Sec. 930.50,
Marketing Policy, be amended to exclude grower diverted cherries from
the calculation of actual production in the volume control formula, and
to include an additional factor when computing preliminary or interim
percentages, or determining final percentages for recommendation to the
Secretary, by the CIAB. No opposition testimony was given regarding
this proposed amendment, and it is thus recommended for adoption.
Material Issue Number 3--Grower Diversion Privilege
Section 930.58 provides parameters for grower diversion of cherries
under the order. Section 930.58(a) of the order provides that grower
delivery of diversion certificates to a handler shall be treated as
though they were actual harvested cherries. Section 930.58(a) should be
modified to eliminate the phrase ``as though there were actual
harvested cherries'' to correspond to the proposed definition of
handle.
As discussed under Material Issue Numbers 1 and 2, the proposed
amendments to section 930.10 and section 930.50 would change how grower
diversion of cherries are accounted for under the order. Grower
diversion certificates acquired by handlers would no longer be counted
as handled cherries, and would also not be included as production in
the volume control formula. The proposed amendment to section 930.58(a)
would make reference to the treatment of grower diversion certificates
consistent with the proposed amendments to sections 930.10 and 930.50
by removing the reference that grower diversion certificates are
treated as handled cherries.
No testimony opposing this proposal was provided at the hearing.
For the reasons stated above, it is recommended that a Sec. 930.58,
Grower diversion privilege, be revised so that grower diverted cherries
would not be considered and accounted for as actual harvested cherries.
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 initial
regulatory flexibility analysis.
The purpose of the RFA is to fit regulatory actions to the scale of
business subject to such actions so that small businesses will not be
unduly or disproportionately burdened. 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.
There are approximately 40 handlers of tart cherries subject to
regulation under the order and approximately 600 producers of tart
cherries in the regulated area. Small agricultural service firms, which
include handlers, have been defined by the Small Business
Administration (SBA)(13 CFR 121.201) as those having annual receipts of
less than $7,000,000, and small
[[Page 69676]]
agricultural producers are defined as those having annual receipts of
less than $750,000. A majority of the tart cherry producers and
handlers are considered small entities under the SBA standards.
The geographic region regulated by the order includes the states of
Michigan, New York, Oregon, Pennsylvania, Utah, Washington, and
Wisconsin. Acreage devoted to tart cherry production in the regulated
area has declined in recent years. According to data presented at the
hearings, bearing acreage in 1987-88 totaled 50,050 acres; by 2010-11
it had declined to 35,650 acres. Michigan accounts for 73 percent of
total U.S. bearing acreage with 26,200 bearing acres. Utah is second,
with a reported 3,300 acres, or approximately nine percent of the
total. The remaining states' acreage ranges from 600 to 1,800 acres.
The order includes authority for (1) Volume regulation, (2) promotion
and research, and (3) grade and quality standards. Volume regulation is
used under the order to augment supplies during low supply years, with
product placed in reserves during large supply years.
Production of tart cherries can fluctuate widely from year to year.
The magnitude of these fluctuations is one of the most pronounced for
any agricultural commodity in the United States, and is due in large
part to weather related conditions during the bloom and growing
seasons. This fluctuation in supply presents a marketing challenge for
the tart cherry industry because demand for the product is relatively
inelastic, meaning a change in supply has a proportionately larger
change in price.
According to data presented at the hearing, production has ranged
from a low of 62.5 million pounds in 2002-03 to a high of 395.6 million
pounds in 1995-96. For 2010-11, Michigan accounted for 71 percent of
total U.S. production with 135 million pounds. Utah is second, with a
reported 23 million pounds, or approximately twelve percent of the
total. The remaining states produce between 15.4 and 1.2 million
pounds.
During the hearings, multiple witnesses testified that they did not
believe that the proposed amendments would have any adverse impacts on
small agricultural service firms or small agricultural producers as
defined by the SBA. According to the record, the proposed amendments
would help agricultural businesses and growers by encouraging growers
to divert some of their tart cherries in the orchard during years of
extremely large supply. The proposed amendments would result in higher
grower returns during years of extremely large supply. Processors would
not incur the cost of processing and storing excess tart cherries.
Furthermore, the growers who divert their crop do not incur harvest and
transportation costs. The proposed amendments would result in a lower
possibility of market saturation. Overall the supply of tart cherries
in extremely large supply years result in higher returns for growers.
The proposed amendments are intended to provide additional
flexibility in administering the volume control provisions of the
order, and to improve its operation and administration. Record evidence
indicates that the proposed amendments are intended to benefit all
producers and handlers under the order, regardless of size.
There are three proposed amendments. Amendment one would amend
Section 930.10 of the order to change the definition of ``handle,'' so
that handler acquisition of grower diversion certificates is not
considered handling. Amendment two would amend the ``marketing policy''
provisions in Section 930.50 of the order so that grower-diverted
cherries are not counted as production in the OSF. Amendment three
would amend section 930.58 of the order so that grower-diverted
cherries are not treated as actual harvested cherries. The proposed
amendments would modify how grower diversions are accounted for under
the order.
Evidence presented when the order was promulgated indicated that a
grower diversion program could benefit the industry by managing
fluctuating supply. Witnesses indicated that the order has been
successful in this regard. However, the record indicated that the order
should be more flexible in addressing how grower diversions are
utilized under the order.
The most efficient method to deal with a surplus is at the lowest
level of the production and processing chain. The industry wastes the
least amount of resources if it diverts cherries in the orchard. Once
they are harvested, chilled, washed, de-stemmed, sorted, pitted, and
packed, significantly higher costs are incurred and there is a greater
risk of waste. Diverting surplus cherries in the orchard is the most
cost effective method of dealing with a surplus situation and provides
the largest benefit to growers through lower costs.
The order establishes an opportunity for growers to undertake in-
orchard diversions of cherries (Sec. 930.58). These diversions are
done during harvest in accordance with procedures defined under the
order and are overseen by the CIAB. The CIAB issues grower diversion
certificates to the growers that represent the pounds of cherries that
were left in the orchard.
Growers redeem the diversion certificates with handlers, who use
them as one of their compliance alternatives to meet their reserve or
restricted obligation. However, under the current order definition of
``handle,'' handlers must include the pounds of cherries represented by
the certificates as part of the total cherries that have been delivered
and processed.
Consequently, grower in-orchard diversions effectively increase the
supply of restricted cherries even though none of those cherries were
delivered for processing. Grower diversion certificates are considered
to be part of the total quantity of cherries that a handler receives
and processes, and contribute to the total supply of restricted
cherries in the OSF. This creates confusion for both the growers and
processors.
The OSF is the mechanism specified in the order and used by CIAB to
determine the relationship between the demand and supply of tart
cherries in a given year. When the supply of tart cherries exceeds the
average demand, volume regulation is implemented.
In an effort to stabilize supply and prices, the tart cherry
industry uses volume regulation which allows the industry to set free
and restricted percentages. Free percentage cherries can be marketed by
handlers to any outlet, while restricted percentage cherries are placed
in a reserve inventory. The primary purpose of setting restricted
percentages and placing cherries in a reserve inventory is to attempt
to balance supply with demand.
A related component of OSF under the order involves growers
diverting cherries by leaving them unharvested in the orchard. Handlers
can coordinate with their growers in large crop years by encouraging
them to divert cherries from production. Handlers can then acquire the
diversion certificates issued to growers and use them as credit toward
their restriction or reserve obligations.
The interaction of sections 930.10 and 930.50 of the order
establishes that grower in-orchard diversion is subject to the
restriction percentage calculated for the year. Because of this, grower
diversion certificates have less value when growers redeem them with
handlers. Therefore, when a handler utilizes the grower diversion
certificates received from growers, the certificates have a reduced
value as a compliance
[[Page 69677]]
tool in meeting the restricted obligation. Because the certificates
have a reduced value growers will deliver most of their crop to
handlers instead of diverting cherries in the orchard in large crop
years.
The intent of these amendments is to remove the grower disincentive
for in-orchard diversion. If the method grower diversions are accounted
for is changed, the grower diversion program is expected to help
mitigate the negative effects of oversupply, by increasing the amount
of cherries diverted from production.
This action is expected to have a positive impact on growers with
respect to the value of the grower diversion certificates. If the value
of the certificates increases, grower diversion of cherries in large
crop years is expected to increase. Increased grower diversion activity
will help to reduce excess supplies, which in turn is expected to have
a positive impact on grower returns. In addition, grower costs
associated with harvesting and transporting cherries to handlers will
be reduced as more cherries are diverted.
This action is also expected to have a positive impact on handlers.
As more fruit is diverted in the orchard, handlers will avoid the
processing and storage costs that they would otherwise incur if growers
harvested and delivered the fruit. Reducing the available supply of
cherries is expected to mitigate the price depressing effects that
oversupply typically has on the market, resulting in a positive effect
for both growers and handlers.
Testimony at the hearing supported that the amendments, which would
encourage grower diversions, would not have a negative impact on small
growers or handlers. The hearing record supported that these amendments
would benefit small growers by providing better opportunities to divert
cherries in the orchard in large crop years. Small handlers are not
always able to ship to export markets or have as much new product
activity as larger handlers. Small handlers would benefit from these
amendments by providing diversion credits as a way to meet their
restrictions.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35), the order's information collection requirements have been
previously approved by the Office of Management and Budget (OMB) and
assigned OMB No. 0581-0177 (Tart cherries Grown in the States of
Michigan, New York, Pennsylvania, Oregon, Utah, Washington and
Wisconsin). No changes in those requirements is necessary a result of
this action. Should any change become necessary, it would be submitted
to OMB for approval.
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. USDA has not
identified any relevant Federal rules that duplicate, overlap or
conflict with this proposed rule. All of these amendments are designed
to enhance the administration and functioning of the marketing order to
the benefit of the industry.
The implementation of these requirements is not expected to have
any additional costs on handler. In fact, these proposed changes are
expected to reduce costs for both growers and handlers.
In addition, the meetings regarding these proposals as well as the
hearing dates were widely publicized throughout the existing tart
cherry production area and all interested persons were invited to
attend the meetings and the hearings and participate in CIAB
deliberations on all issues. All CIAB meetings and the hearing were
public forums and all entities, both large and small, were able to
express views on these issues. The CIAB itself is composed of members
representing handlers, producers and the public. Finally, interested
persons are invited to submit information on the regulatory and
informational impacts of this action on small businesses.
AMS is committed to complying with the E-Government Act, to promote
the use of the Internet and other information technologies to provide
increased opportunities for citizen access to Government information
and services, and for other purposes.
Civil Justice Reform
The amendments to Marketing Order 930 proposed herein have been
reviewed under Executive Order 12988, Civil Justice Reform. They are
not intended to have retroactive effect. If adopted, the proposed
amendments would not preempt any State or local laws, regulations, or
policies, unless they present an irreconcilable conflict with this
proposal.
The Act provides that administrative proceedings must be exhausted
before parties may file suit in court. Under section 608c(15)(A) of the
Act, any handler subject to an order may file with 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 the
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 no later than 20 days after the
date of the entry of the ruling.
Rulings on Briefs of Interested Persons
Briefs, proposed findings and conclusions, and the evidence in the
record, were considered in making the findings and conclusions set
forth in this recommended decision. To the extent that the suggested
findings and conclusions filed by interested persons are inconsistent
with the findings and conclusions of this recommended decision, the
requests to make such findings or to reach such conclusions are denied.
General Findings
The findings hereinafter set forth are supplementary to the
findings and determinations which were previously made in connection
with the issuance of the order; and all said previous findings and
determinations are hereby ratified and affirmed, except insofar as such
findings and determinations may be in conflict with the findings and
determinations set forth herein.
1. The marketing order, as amended, and as hereby proposed to be
further amended, and all of the terms and conditions thereof, would
tend to effectuate the declared policy of the Act;
2. The marketing order, as amended, and as hereby proposed to be
further amended, regulates the handling of tart cherries 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 a hearing has been held;
3. The marketing order, as amended, and as hereby proposed to be
further amended, is limited in its 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 order, as amended, and as hereby proposed to be
further amended, prescribes, insofar as practicable, such different
terms applicable to different parts of the production area as are
necessary to give
[[Page 69678]]
due recognition to the differences in the production and marketing of
tart cherries grown in the production area; and
5. All handling of tart cherries grown in the production area as
defined in the marketing order, is in the current of interstate or
foreign commerce or directly burdens, obstructs, or affects such
commerce.
A 15-day comment period is provided to allow interested persons to
respond to this proposal. Fifteen days is deemed appropriate because
these proposed changes have been widely publicized and implementation
of the changes, if adopted, would be desirable to benefit the industry
prior to the next crop year which begins on July 1, 2012. All written
exceptions timely received will be considered and a grower referendum
will be conducted before any of these proposals are implemented.
List of Subjects in 7 CFR Part 930
Marketing agreements, Reporting and recordkeeping requirements,
Tart cherries.
For the reasons set forth in the preamble, 7 CFR part 930 is
proposed to be amended as follows:
PART 930--TART CHERRIES GROWN IN THE STATES OF MICHIGAN, NEW YORK,
PENNSYLVANIA, OREGON, UTAH, WASHINGTON, AND WISCONSIN
1. The authority citation for 7 CFR part 930 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. Revise the introductory paragraph in Sec. 930.10 to read as
follows:
Sec. 930.10 Handle.
Handle means the process to brine, can, concentrate, freeze,
dehydrate, pit, press or puree cherries, or in any other way convert
cherries commercially into a processed product, or divert cherries
pursuant to Sec. 930.59, or to otherwise place cherries into the
current of commerce within the production area or from the area to
points outside thereof: Provided, That the term handle shall not
include:
* * * * *
3. Revise paragraphs (d) and (e) of Sec. 930.50 to read as
follows:
Sec. 930.50 Marketing Policy.
* * * * *
(d) Final percentages. No later than September 15 of each crop
year, the Board shall review the most current information available
including, but not limited to, processed production and grower
diversions of cherries during the current crop year. The Board shall
make such adjustments as are necessary between free and restricted
tonnage to achieve the optimum supply and recommend such final free
market tonnage and restricted percentages to the Secretary and announce
them in accordance with paragraph (h) of this section. The difference
between any final free market tonnage percentage designated by the
Secretary and 100 percent shall be the final restricted percentage.
With its recommendation, the Board shall report on its consideration of
the factors in paragraph (e) of this section.
(e) Factors. When computing preliminary and interim percentages, or
determining final percentages for recommendation to the Secretary, the
Board shall give consideration to the following factors:
(1) The estimated total production of cherries;
(2) The estimated size of the crop to be handled;
(3) The expected general quality of such cherry production;
(4) The expected carryover as of July 1 of canned and frozen
cherries and other cherry products;
(5) The expected demand conditions for cherries in different market
segments;
(6) Supplies of competing commodities;
(7) An analysis of economic factors having a bearing on the
marketing of cherries;
(8) The estimated tonnage held by handlers in primary or secondary
inventory reserves;
(9) Any estimated release of primary or secondary inventory reserve
cherries during the crop year; and
(10) The quantity of grower-diverted cherries during the crop year.
* * * * *
4. Revise paragraph (a) of Sec. 930.58 to read as follows:
Sec. 930.58 Grower Diversion privilege.
(a) In general. Any grower may voluntarily elect to
divert, in accordance with the provisions of this section, all or a
portion of the cherries which otherwise, upon delivery to a handler,
would become restricted percentage cherries. Upon such diversion and
compliance with the provisions of this section, the Board shall issue
to the diverting grower a grower diversion certificate which such
grower may deliver to a handler. Any grower diversions completed in
accordance with this section, but which are undertaken in districts
subsequently exempted by the Board from volume regulation under Sec.
930.52(d), shall qualify for diversion credit.
* * * * *
Dated: November 3, 2011.
David R. Shipman,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2011-29031 Filed 11-8-11; 8:45 am]
BILLING CODE 3410-02-P