[Federal Register: March 6, 2001 (Volume 66, Number 44)]
[Proposed Rules]
[Page 13447-13454]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06mr01-27]
------------------------------------------------------------------------
[[Page 13447]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 923
[Docket Nos. 99AMS-FV-923-A1; FV00-923-1]
Sweet Cherries Grown in Designated Counties in Washington;
Secretary's Decision and Referendum Order on Proposed Amendment of
Marketing Agreement No. 134 and Marketing Order No. 923
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule and referendum order.
-----------------------------------------------------------------------
SUMMARY: This decision proposes amendments to the marketing agreement
and order (order) for sweet cherries and provides growers with the
opportunity to vote in a referendum to determine if they favor the
proposed amendments. The proposed amendments were submitted by the
Washington Cherry Marketing Committee (Committee), which is responsible
for local administration of the order. The proposed amendments would:
increase the production area to cover the area in the State of
Washington east of the Cascade Mountain Range and allow for special
purpose shipments of cherries to packing operations outside the
production area; increase representation on the Committee by adding an
additional handler member; provide for late payment and interest
charges on delinquent assessments; authorize establishment of container
marking requirements; and allow prospective Committee members and
alternates to qualify for membership by filing a single form. The Fruit
and Vegetable Programs (F&V) of the Agricultural Marketing Service
(AMS) proposed establishing of tenure requirements for Committee
members and requiring that continuance referenda be conducted every 6
years. These proposals are intended to improve the operation and
functioning of the Washington sweet cherry marketing order program.
DATES: The referendum shall be conducted from April 10, 2001, through
April 27, 2001. The representative period for the purpose of the
referendum is April 1, 1999, through March 31, 2000.
FOR FURTHER INFORMATION CONTACT: Teresa Hutchinson, Marketing
Specialist, Marketing Order Administration Branch, Fruit and Vegetable
Programs, AMS, USDA, Northwest Marketing Field Office, 1220 SW. Third
Avenue, room 369, Portland, Oregon 97204; telephone (503) 326-2724 or
Fax (503) 326-7440; or Kathleen M. Finn, Marketing Specialist,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA, room 2525-S, Washington, DC 20250-0200; telephone: (202)
720-2491, or Fax: (202) 720-8363.
Small businesses may request information on compliance with this
regulation by contacting Jay Guerber, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, P.O. Box 96456, room
2525-S, Washington, DC 20090-6456; telephone (202) 720-2491; Fax (202)
720-8353.
SUPPLEMENTARY INFORMATION: Prior documents in this proceeding: Notice
of Hearing issued on November 3, 1999, and published in the November 8,
1999, issue of the Federal Register (64 FR 60733). Recommended Decision
and Opportunity to File Written Exceptions issued on November 2, 2000,
and published in the Federal Register on November 9, 2000 (65 FR
67584).
This administrative action is governed by the provisions of
sections 556 and 557 of Title 5 of the United States Code and,
therefore, is excluded from the requirements of Executive Order 12866.
Question and Answer Overview
What Circumstances Led to This Secretary's Decision and Referendum
Order?
The Committee, which is responsible for local administration of the
marketing order, recommended amending the current order. A hearing was
held on the proposed amendments in Yakima, Washington, on November 16,
1999.
The Washington Cherry Marketing Order was created in 1957 and has
never been amended. Since that time, cherry production has dramatically
increased in areas outside the current 6-county production area.
The marketing order's primary authority is the use of grade, size
and container regulations for fresh shipments of cherries from the
production area. The purpose of these regulations is to ensure the
shipment of high quality cherries. The order has allowed the industry
to develop the reputation for shipping a quality product, which has
allowed producers to ship and sell sweet cherries in a more stable
marketplace.
The primary purpose of this proceeding is to expand the production
area to include the other sweet cherry producing counties in Washington
and maintain the high quality image of the Washington sweet cherry.
This proceeding would also allow shipments of cherries outside the
production area for packing, to accommodate growers in the proposed
production area who have their cherries packed in Oregon.
The Committee also recommended increasing representation on the
Committee, allowing for late payment and interest charges on unpaid
assessments, authorizing container marking requirements and other
administrative changes.
AMS proposed establishing a limit on the number of consecutive
terms a person may serve as a member on the Committee and requiring
that continuance referenda be conducted every 6 years to ascertain
industry support for the order.
Upon the basis of evidence introduced at the hearing and the record
thereof, the Administrator of the Agricultural Marketing Service (AMS)
on November 2, 2000, filed with the Hearing Clerk, U.S. Department of
Agriculture, a Recommended Decision and Opportunity to File Written
Exceptions thereto by December 11, 2000. No exceptions were filed.
Who Would Be Impacted by This Action?
Growers and handlers of sweet cherries in the current and proposed
production area would be affected by these amendments. Handlers would
be required to pay assessments based on the amount of cherries handled.
The current assessment rate is 75 cents per ton of cherries handled.
Handlers would also be required to abide by the regulations in effect
under the order
[[Page 13448]]
which includes obtaining Federal/State inspections on all cherries to
ensure that marketing order requirements are met. Current regulations
specify certain size, maturity and pack requirements and are based on
the State of Washington grade standards.
Field-run cherries from Washington growers sent to Oregon packers
would have to meet these requirements as well.
Who Is Eligible To Vote in The Referendum?
To be eligible to vote in the referendum, growers must currently be
producers and they must have produced sweet cherries in the production
area during the period April 1, 1999, through March 31, 2000. The
amendments to the order will become effective only if approved by at
least two-thirds of those growers voting in the referendum, or by
growers producing at least two-thirds of the volume of sweet cherries
represented in the referendum.
When Will the Referendum Be Held?
A producer referendum will be conducted from February 14, 2001,
through February 28, 2001, among all affected producers. The referendum
will be conducted by mail ballot, and producers can vote on each of the
seven proposed amendments.
Preliminary Statement
The proposed amendments were formulated on the record of a public
hearing held in Yakima, Washington on November 16, 1999. The hearing
was held to consider the proposed amendment of Marketing Agreement No.
134 and Marketing Order No. 923, regulating the handling of sweet
cherries grown in designated counties of Washington, hereinafter
referred to as the ``order.'' The hearing was held pursuant to the
provisions of the Agricultural Marketing Agreement Act of 1937, as
amended (7 U.S.C. 601 et seq.), hereinafter referred to as the Act, and
the applicable rules of practice and procedure governing proceedings to
formulate marketing agreements and marketing orders (7 CFR part 900).
The Notice of Hearing contained amendment proposals submitted by the
Committee and the U.S. Department of Agriculture.
The Committee proposed 5 amendments: (1) Increase the production
area to cover the area in the State of Washington east of the Cascade
Mountain Range; to redefine the districts established under the order;
and to authorize special purpose shipments, with appropriate
safeguards, to facilitate the movement of cherries to packing
facilities outside the production area; (2) increase representation on
the Committee by adding one additional handler member; (3) authorize
the Committee, with USDA approval, to collect late payment and interest
charges on delinquent assessments; (4) authorize the Committee, with
USDA approval, to establish container marking requirements; and (5)
authorize Committee nominees to qualify as a member or alternate by
filing a written acceptance of willingness to serve prior to the
selection.
Also, the Fruit and Vegetable Programs of the Agricultural
Marketing Service (AMS), U.S. Department of Agriculture, proposed three
amendments: (1) Establish a limit on the number of consecutive terms a
person may serve as a member of the Committee; (2) require that
continuance referenda be conducted every 6 years to ascertain grower
support for the order; and (3) adopt such changes as may be necessary
to the order, if any of the above amendments are adopted, so that all
of its provisions conform with those amendments. No conforming changes
have been deemed necessary.
Upon the basis of evidence introduced at the hearing and the record
thereof, the Administrator of the Agricultural Marketing Service (AMS)
on November 2, 2000, filed with the Hearing Clerk, U.S. Department of
Agriculture, a Recommended Decision and Opportunity to File Written
Exceptions thereto by December 11, 2000. None were received.
Small Business Considerations
Pursuant to the requirements set forth in the Regulatory
Flexibility Act (RFA), the AMS has considered the economic impact of
this action on small entities. Accordingly, the AMS has prepared this
final regulatory flexibility analysis.
The purpose of the RFA is to fit regulatory actions to the scale of
business subject to such actions so that small businesses will not be
unduly or disproportionately burdened. Small agricultural producers
have been defined by the Small Business Administration (SBA) (13 CFR
121.201) as those having annual receipts of less than $500,000. Small
agricultural service firms, which include handlers regulated under the
order, are defined as those with annual receipts of less than
$5,000,000.
Interested persons were invited to present evidence at the hearing
on the probable regulatory and informational impact of the proposed
amendments on small businesses. The record indicates that growers and
handlers would not be burdened by any additional regulatory
requirements, including those pertaining to reporting and recordkeeping
as a result of these proposed amendments.
Marketing orders and amendments thereto are unique in that they are
normally brought about through group action of essentially small
entities for their own benefit. Thus, both the RFA and the Act are
compatible with respect to small entities.
The record indicates that there are approximately 75 handlers
currently regulated under Marketing Order No. 923. There are two
additional packing houses in the proposed production area that would be
considered handlers if the production area is expanded. There are four
packing operations in Oregon that pack Washington cherries for grower/
handlers. In addition, there are approximately 1,400 cherry growers in
the current production area. There would be approximately 200
additional growers if the production area is expanded as proposed.
In 1998, Washington produced 96,000 tons of sweet cherries. The
average price for fresh cherries in 1998 was $1,600 per ton. This
computes to approximate revenues for the 1998 crop of $153,600,000. The
record indicated that approximately 15 handlers handle the majority of
the crop and could be classified as large businesses. Thus, a majority
of sweet cherry handlers could be classified as small entities. The
same is estimated with regard to the packing houses in Oregon.
Dividing total production from 1998 by the number of growers in the
proposed production area, the average grower produces about 60 tons of
cherries annually. With an average price of $1,600 per ton for 1998
sweet cherries, average revenues would be $96,000. Thus, it is
reasonable to conclude that most sweet cherry growers are small
entities.
Industry Background
Sweet cherries rank second to apples as the most important fruit
grown in Washington, with a value of production of $128.7 million.
Washington growers produced 96,000 tons of sweet cherries in 1998,
which is 46 percent of the nation's total.
The varieties of sweet cherries subject to regulation under the
order are: Bing, Chelan, Lambert, Lapin, Rainier, and Sweetheart.
Shipping of these cherries generally begins around June 15 and usually
ends around August 15. The most active harvest period is from June 10
through July 20.
The order authorizes the use of grade, size and container
regulations for the fresh shipment of sweet cherries from the
production area. The regulations, specify certain size, maturity and
pack
[[Page 13449]]
requirements. The current regulations are based on Washington grade
standards and apply to specific varieties. The purpose of these
regulations is to ensure the shipment of high quality cherries. The
order has allowed the industry to develop the reputation for shipping a
quality product, which has allowed producers to ship and sell fruit in
a more stable marketplace.
Washington is the leading producer of sweet cherries for fresh
market sale. Washington's main competitors in domestic fresh markets
are California and Oregon. From 1994 through 1998, Washington produced
an average of 55,600 tons per year. This represents 59 percent of the
total sweet cherries marketed fresh. California produced an average of
20,460 tons per year and Oregon produced 12,900 tons per year from 1994
through 1998.
Sweet cherries are also grown in Idaho, Montana and Utah, as well
as Michigan, New York and Pennsylvania. Bearing acreage figures are not
published for the States of Idaho and Montana. Utah's production area
totals 600 acres, and has been declining. Bearing acreage figures are
published for Michigan, New York and Pennsylvania, but the majority of
sweet cherries grown in those states are not sold in fresh markets. The
fruit in these States are produced and marketed during the summer
months each year. While these States compete with Washington, Oregon
and California in the marketing of fresh sweet cherries, their
production is relatively small.
From 1964 through 1998, total U.S. production of sweet cherries
increased 332 percent and fresh utilization increased 393 percent. This
suggests that fresh shipments have been growing in importance, while
the processing sector has remained relatively stable. Over the past
five seasons, 66 percent of Washington's production moved into fresh
markets.
Over the last 30 years, prices between the three primary growing
States have been very competitive. Prices in California, Washington and
Oregon have averaged $1,166, $1,028 and $798 per ton, respectively.
California prices are slightly higher than prices in Washington or
Oregon. One of the reasons that California prices average higher than
Washington's is that California shipments begin in the early part of
May, when competition in the fresh fruit market is limited. Washington
shipments do not start until the middle of June. Early-season shippers
generally receive a premium for their product on the fresh market.
Fresh prices for Washington sweet cherries receive a premium over
processing sweet cherries. From 1969 to 1998, fresh prices have
increased more than 350 percent. Fresh cherry prices were $350 per ton
in 1969 and were as high as $2,150 per ton in 1996. Prices were $1,600
per ton in 1998.
While California growers receive higher prices than Washington
growers on average, Washington's value of production is much greater
than California's or Oregon's. This is due to higher yields and larger
production levels in Washington. This likely indicates that Washington
growers have a comparative cost advantage over California or Oregon
growers. In 1998, Washington reported its highest value of fresh
production, $113.6 million. This compares to a 1998 value of fresh
production of $17.9 million for California and $22.6 million for
Oregon. The value of fresh production has increased more than 150
percent since 1991.
Exports play an important role in the marketing of Washington sweet
cherries. With increasing bearing acres and production levels trending
toward 100,000 tons in the near future, increasing levels of exports
can be anticipated. However, competition in the export markets is
expected to be high. California continues to export a large volume of
their increasing production. In addition, China is estimated to have
25,000 acres of cherries planted. Spain, Greece, Turkey, Iran, Lebanon,
Syria and some Eastern European countries have also increased
production levels. These countries do not import sweet cherries into
the U.S.
Exports of fresh Washington sweet cherries have been increasing, in
particular during the 1997 and 1998 seasons. Exports reached a high of
21,148 tons in 1997. In 1998, exports increased 35 percent over the
1997 levels, achieving a new high of 28,560 tons.
Export markets demand a high quality product. With a limited shelf
life, these fresh deliveries of sweet cherries require a high quality
product. The shipment of low quality product could ruin years of market
development in an export market. Grades and standards assure the
shipment of high quality fruit into export markets, and small growers
as well as large growers will benefit.
Production Area and Shipments Outside Production Area
When the marketing order was created in 1957, sweet cherries were
primarily grown in only 6 counties in the State of Washington. The 6
counties that are currently regulated are Okanogan, Chelan, Douglas,
Grant, Benton, and Yakima. The 14 additional counties proposed for
inclusion are Kittitas, Klickitat, Ferry, Stevens, Pend Oreille,
Lincoln, Spokane, Adams, Whitman, Franklin, Walla Walla, Columbia,
Garfield, and Asotin.
Cherry production has dramatically increased in areas within the
State of Washington that are outside the current production area. As
more land has come into irrigation and farmers look for alternative
crops to grow, sweet cherry production is expected to increase in areas
outside the current production area.
The proposed amendment to increase the production area to cover the
area in the State of Washington east of the Cascade Mountain Range, to
redefine the districts in order to include the additional counties and
to authorize special purpose shipments, with appropriate safeguards,
allowing movement of cherries to packing operations outside the
production area would improve the effectiveness of the marketing order
by ensuring that the major cherry producing counties in Washington are
covered under the marketing order. In addition, including counties with
potential to produce significant amounts of sweet cherries would ensure
that all major production would be covered under the marketing order in
the future. The proposed amendment would also benefit growers,
especially growers not currently regulated under the order, by allowing
many of these growers to continue shipping their cherries to Oregon for
packing.
The Committee has been discussing amending the order in this regard
for many years. In 1990, a subcommittee composed of small and large
growers and handlers was appointed to study the expansion of the
production area. The Committee discussed expanding the production area
with producers located outside the production area. Out of these
discussions, it was determined that if the production area was
expanded, the authority to grade and pack cherries outside the
production area was also needed in order to allow growers in the
proposed production area to avoid financial hardships by maintaining
continuity in the packing of their cherries.
In March 1998, the Committee recommended numerous amendments to the
marketing order, including covering the entire State of Washington in
the production area. In August 1999, the Committee recommended
modifying the recommendation on the production area proposal from
regulating the entire
[[Page 13450]]
State to only including the eastern part of the State.
Alternatives to the current proposal on the expansion of the
production area were considered by the Committee. These alternatives
were: (1) including the entire State of Washington; (2) including the
States of Washington and Oregon; and (3) including the States of
Washington, Oregon, Idaho and Utah. Committee representatives
communicated with growers and handlers in these regions. Public
meetings on the subject were publicized in these growing areas and
interested parties were encouraged to attend. Committee members also
attended grower meetings in these areas to discuss expansion of the
production area.
Regarding including the entire State of Washington, the Committee
determined that due to weather conditions, it would be unlikely that
cherries could be commercially produced in significant amounts west of
the Cascade Mountain Range in Washington. Average production in this
area is 50 tons per year. Testimony indicated that excessive rain
causes serious quality problems with sweet cherries, such as cracking.
Generally, weather conditions in eastern Washington are more favorable
for growing sweet cherries, as well as other horticultural crops.
Representatives from Idaho and Utah believed that their production
and marketing could be easily distinguished and segregated from
Washington and Oregon production. In addition, it was believed the
Idaho and Utah sweet cherry industry was not large enough to make an
impact on Washington cherries. Statistical data presented at the
hearing on the volume of cherries produced in Idaho and Utah supports
this belief.
Oregon's sweet cherry industry primarily borders the State of
Washington, but representatives from Oregon believed their industry
should be kept separate from the Washington industry. The record
evidence revealed that Oregon already has two organizations that
represent the interests of sweet cherry growers, the Oregon Sweet
Cherry Commission and the Wasco County Fruit and Produce League. These
organizations collect assessments based on cherry production. According
to record testimony, the Oregon growers did not see the need to form
another organization to protect their interests. In addition, testimony
indicated that Oregon growers did not want to become a minor part of
the Washington order.
An organization called the Northwest Cherry Growers also represents
the States of Washington, Oregon, Idaho and Utah. This group is
responsible for collecting assessments based on cherry tonnage and
directing promotion programs for sweet cherries grown in these four
states.
Based on record evidence, the Committee considered these various
alternatives and concluded that the proposal it submitted on the
expansion of the production area is the most reasonable alternative.
The proposed production area is the smallest regional area, which is
practicable, while maintaining program effectiveness.
The record revealed that the average cherry farm size in Washington
ranges from 3 or 4 acres to several hundred acres. The average farm is
approximately 40 acres. According to testimony, there are approximately
180 growers in the proposed production area that are larger that the
average farm. Some farms in the proposed production area, particularly
in Franklin County, are 50 to 200 acres. Although much of this acreage
is currently non-producing, testimony indicated that the potential
exists for significant production. Unlike the western part of the State
where significant production is not anticipated, if those areas with
significant production potential are not regulated, it could have a
detrimental impact on the favorable Washington sweet cherry quality
image.
Testimony was received at the hearing on the costs associated with
the proposed amendments. This testimony indicated that costs associated
with this proposal would be minor. The total annual cost of production
for a mature orchard is $7,413.06 per acre. The current assessment of
75 cents per ton comprises less than 1 percent of total production
costs. Any increase in assessments resulting from this proposed
amendment would not have a significant negative financial impact on
growers or handlers. Testimony indicated that the annual assessment
could even be reduced due to additional cherries being assessed with
the expansion of the production area.
Applying grades and standards to the new production areas should
provide benefits to small producers. The grades and standards allow
small producers the opportunity to develop a reputation for producing
and delivering a consistent, high quality product. These grades and
standards provide incentives and rewards for the production of high
quality product. In addition, the establishment of uniform grades and
standards across all the production areas provides a level field for
competition among both small and large growers. Testimony indicated
that as production increases, quality issues become more important and
production is expected to increase in excess of 100,000 tons for the
first time in the industry's history.
The 1999-2000 budget for the Committee is $62,815, of which $3,388
is earmarked for compliance efforts. Testimony indicated that increased
compliance and administrative costs necessary to monitor this proposal
would not be significant. It was testified that the benefits of
strengthening the market would outweigh any increase in costs.
Adversely, if the production area is not redefined, testimony indicated
that the Washington cherry image could be harmed, as more and more
areas are growing cherries. In addition, indications are that a large
number of non-bearing acres are coming into production inside and
outside the current production area. Adding to the increase in
production are growers of other crops, such as grain and apples,
looking for alternative crops to grow in order to supplement incomes.
Sweet cherries are an option these growers consider.
The Washington cherry market distinguishes itself from competitors.
More product is available from Washington than the other cherry
producing States. The Washington cherry market is more diverse and
national in scope, and testimony indicated that buyers have confidence
in Washington sweet cherries due to consistent quality. Testimony
revealed that this distinction is a direct result of the establishment
of minimum quality requirements under the marketing order. If the
proposal to allow cherry shipments outside the production area for
packing is implemented there are safeguards in place to ensure that
minimum quality requirements are met. If these facilities fail to abide
by the applicable requirements, the committee can rescind their
privileges and Washington cherries could not be delivered to that
facility.
When regulations are in place, all cherries in the production area
are required to be inspected and certified as meeting established
requirements. The Washington State Department of Agriculture's Fruit
and Vegetable Inspection Program (WSDA), headquartered in Olympia,
Washington collaborates with USDA-AMS, Fresh Products Branch to provide
inspection to marketing order commodities in Washington. WSDA's
district offices are located in Yakima, Wenatchee and Moses Lake. These
main district offices have area offices in strategic locations to
[[Page 13451]]
the various growing areas in the State. WSDA employs approximately 150-
160 full-time inspection staff throughout the State. In addition,
during peak harvest periods, temporary inspectors are hired.
The WSDA operates on a user-fee basis; no appropriated funds are
received. Inspection fees pay for the program to operate.
Except for random inspections conducted on fruit stands to comply
with a cherry fruit fly quarantine program, WSDA provides inspections
only upon request. The applicant indicates to WSDA what type of
inspection is needed, such as compliance with a marketing order.
The fees for cherry inspections are 21 cents per hundred weight or
$23/hour, whichever is greater, plus additional charges for travel time
and mileage. The larger growers have individual inspectors stationed at
their warehouses during the season. The time and mileage charges are
more frequently assessed to the smaller grower/packer because of the
small volumes inspected and remote locations. However, WSDA attempts to
mitigate costs, especially to small growers and handlers. WSDA helps
smaller growers mitigate these costs by meeting growers halfway between
their orchard and the inspection office or WSDA authorizes the grower
to bring the product to the inspection office.
Individual shipments not exceeding 100 pounds in the aggregate are
exempt from the regulations, as well as cherries for home use and
cherries not intended for re-sale. In addition, shipments for
consumption by charitable institutions, for distribution by relief
agencies or for commercial processing into products are exempt from
regulation.
Testimony indicated that increased costs associated with more
cherries being inspected in accordance with marketing order
requirements would be offset by consistent quality and a stable market
place. In addition, most handlers already pack their cherries and have
them inspected in accordance with marketing order requirements,
regardless of whether the cherries are grown inside or outside the
current production area.
Minimum quality and size standards in the proposed production area
would maintain the integrity of the product so that the commodity's
overall quality image is not diminished by a low quality sample. The
principle objective of a grading system is to make the market work more
efficiently. Minimum quality and size requirements would improve
information between buyers and sellers. Contracts could be made based
on grade specifications, and buyers need not personally inspect each
lot of product. Standardization of quality and size reduces uncertainty
between buyers and sellers, and this helps reduce marketing costs. The
goal of an effective grading system is to improve quality and size.
Minimum quality and size standards would help ensure that substandard
produce does not find its way to the market and destroy consumer
confidence and harm producer returns. Cherries that do not meet the
grade and size requirements can be sold in the processed market.
In addition to proximity to their orchards, there are other reasons
growers select certain packinghouses. Many growers select handlers
based on the quality of pack, the packinghouse image and/or whether or
not the handler is a cooperative. These options for growers would be
limited if they were no longer able to have their cherries packed in
Oregon.
Testimony indicated that existing packing facilities in the State
of Washington could have difficulty handling the volume of Washington
cherries if the production continues to increase. The proposal to allow
shipments of Washington cherries outside the production area for
packing would specifically address this issue. This proposal would
provide flexibility in moving product in and out of the marketing order
production area.
WSDA currently has an agreement with the Oregon Department of
Agriculture covering the border area between both states, namely in the
Bingen, Washington area, where Oregon Department of Agriculture
conducts the inspections to Washington standards and marketing order
specifications. Testimony indicated this agreement works well, as it
assists the WSDA in supplying quality inspections in that area.
Testimony indicated that the inspection office does not envision any
oversight burden imposed by these proposals that it cannot meet.
Safeguard provisions are incorporated into this proposal to ensure
compliance with the proposal to authorize shipments outside the
production area.
If the production area is expanded, it would be necessary to
incorporate the additional counties regulated into the districts
currently established under the order. The Committee discussed dividing
the production area into three districts and distributing the counties
and membership across these districts. The Committee was concerned that
this would entail increasing Committee membership by more than one
handler member as proposed and discussed in Material Issue No. 2. The
record indicated that the Committee believed a 16 member Committee
would be the most effective. Therefore, it was decided to distribute
the counties proportionately among the two districts.
The proposed District 1 encompasses the northern part of the
production area and District 2 encompasses the southern part. In 1997
production in proposed District 1 was approximately 44,300 tons of
sweet cherries and in proposed District 2, 45,500 tons. In addition,
tons packed in each proposed district is close to equal. This
distribution of counties among the two districts would provide for
equal representation of handlers and growers from each district.
Committee Representation
The proposed amendment to increase representation on the Committee
by adding one additional handler member would improve representation on
the Committee and allow the Committee to function more efficiently.
Record evidence supports increasing the membership on the Committee
by one handler member. The Washington sweet cherry industry is growing.
Bearing acres and production are increasing and markets, including
exports, are expanding. Although the Committee's recommendation to
increase the number of Committee members by one initially related to
the expansion of the production area, the record testimony revealed
that the Committee would prefer to have an additional handler member
even if the production area is not expanded.
Increasing representation on the Committee would allow additional
input in Committee decisions. Having equal handler representation for
each district is reasonable considering that the volume handled is
similar in each district, regardless if the production area is
expanded. Costs of adding an additional member to the Committee would
be minimal.
In its deliberations, the Committee discussed alternatives to
address appropriate representation and districting should the
production area be expanded. One alternative was to divide the area
into three districts and distribute membership proportionately across
these districts. This alternative would have likely entailed increasing
membership by more than one. The Committee was concerned that
increasing the number of members by more than one would hinder the
decisionmaking capability of the Committee. The Committee agreed that
16 members was an appropriate number for the Committee to be most
effective while adequately representing the expanded production area.
[[Page 13452]]
Late Payment and Interest Charges on Delinquent Assessments
The proposed amendment to authorize the Committee, with AMS
approval, to collect late payment and interest charges on delinquent
assessments would encourage handlers to pay their assessments on time.
Assessments not paid promptly add an undue burden on the Committee
because the Committee has ongoing projects and programs funded by
assessments that are functioning throughout the year. The addition of
such a charge is consistent with standard business practices. No costs
would be associated for handlers who pay timely assessments.
Late payment and interest charges for delinquent assessments would
provide an incentive for handlers to pay on time. This would result in
fewer funds needed by the Committee for collection activities. Also,
the fees derived from late payment and interest charges would partially
compensate the Committee for its collection efforts.
Container Marking Requirements
The proposed amendment to authorize the Committee, with AMS
approval, to establish container marking requirements would further
expand and enhance the current container and pack requirements already
being used. Uniform marking requirements would assist in avoiding
confusion in the marketplace.
Testimony indicated that no significant costs would be incurred if
this authority were implemented because handlers already have the
equipment to mark containers. Container markings are currently
accomplished by handlers, on an individual basis. The benefits of this
proposed amendment would be in the form of uniform marking requirements
for Washington sweet cherries.
Combining Forms Required by Committee Nominees
The proposed amendment to authorize Committee nominees to qualify
as a member or alternate by filing a written acceptance of willingness
to serve prior to the selection would allow the selection process to
take place in a more timely fashion.
The proposal would delete the requirement that the selected member/
alternate file a written acceptance after notification of selection and
combine the acceptance letter with the background statement submitted
prior to selection. The nominee would, in effect, be indicating
willingness to serve on the Committee prior to being selected.
Testimony indicated that there is no benefit in waiting for the
nominee to sign the acceptance letter after being selected. No negative
impacts are anticipated from implementing this proposal. However, the
benefits are that the nominees are only required to sign and deliver
one form. In addition, the Committee could obtain all pertinent
information well ahead of the time for seating of the new Committee,
thereby operating more efficiently.
Committee Tenure Requirements
The proposed amendment to add tenure requirements for Committee
members would allow more persons the opportunity to serve as members on
the Committee. It would provide for more diverse membership, provide
the Committee with new perspectives and ideas, and increase the number
of individuals in the industry with Committee experience. It is
anticipated that this proposed amendment would not increase costs to
small businesses.
Continuance Referenda
The proposed amendment to require that continuance referenda be
conducted on a periodic basis to ascertain industry support for the
order would allow growers the opportunity to vote on whether to
continue the operation of the marketing order. Although this proposed
amendment may generate minimal Committee costs to assist in conducting
the referenda, there are no additional costs anticipated for small
businesses.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35), the reporting and recordkeeping provisions that would be
generated by the proposed amendments have been submitted to the Office
of Management and Budget (OMB). Specifically, if the production area is
expanded, the overall burden of completion of all Committee generated
forms and reports could increase due to additional handlers being
regulated, as well as additional growers in the regulated area. Current
total burden hours are approximately 69 hours and only relate to
referenda and nominations. Sixty eight of these hours relate to
producer referenda and handlers signing of marketing agreements. The
other hour covers time spent by Committee members and alternates
completing membership forms. Adding the additional growers and handlers
from the expanded production area would increase the overall burden for
referenda documentation by approximately 22 hours. Adding an additional
handler member would increase the overall burden to complete nomination
forms from 1.25 hours to 1.33 hours. The documentation required to
implement the safeguard provisions for the four packing facilities in
Oregon are yet to be established, but it is not anticipated that the
overall burden would be dramatically increased. It is anticipated an
application form would be developed for these packing operations. These
provisions and any additional provisions modifying reporting and
recordkeeping burdens that generate from these proposed amendments
would not be effective until receiving OMB approval. Current
information collection requirements for part 923 are approved by OMB
under OMB number 0581-0189. As with all Federal marketing order
programs, reports and forms are periodically reviewed to reduce
information requirements and duplication by industry and public sector
agencies.
The Department has not identified any relevant Federal rules that
duplicate, overlap or conflict with this proposed rule. All of these
amendments are designed to enhance the administration and functioning
of the marketing order to the benefit of the industry.
While the implementation of these requirements may impose some
additional costs on handlers, the costs are minimal and uniform on all
handlers. Some of these costs may be passed on to growers. However,
these costs would be offset by the benefits derived by the operation of
the marketing order. In addition, the meetings regarding these
proposals as well as the hearing date were widely publicized throughout
the Washington sweet cherry production area and proposed production
area and all interested persons were invited to attend the meetings and
the hearing and participate in Committee deliberations on all issues.
All Committee meetings and the hearing were public forums and all
entities, both large and small, were able to express views on these
issues. The Committee itself is composed of 15 members, of whom five
are handlers and ten are producers. Finally, interested persons were
invited to submit information on the regulatory and informational
impacts of this action on small businesses.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at the
following web site: http://www.ams.usda.gov/fv/moab.html.
[[Page 13453]]
Any questions about the compliance guide should be sent to Jay Guerber
at the previously mentioned address in the FOR FURTHER INFORMATION
CONTACT section.
Civil Justice Reform
The amendments 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 the amendments.
The Act provides that administrative proceedings must be exhausted
before parties may file suit in court. Under section 608c(15)(A) of the
Act, any handler subject to an order may file with the Secretary a
petition stating that the order, any provision of the order, or any
obligation imposed in connection with the order is not in accordance
with law and request a modification of the order or to be exempted
therefrom. A handler is afforded the opportunity for a hearing on the
petition. After the hearing the Secretary would rule on the petition.
The Act provides that the district court of the United States in any
district in which the handler is an inhabitant, or has his or her
principal place of business, has jurisdiction to review the Secretary's
ruling on the petition, provided an action is filed not later than 20
days after date of the entry of the ruling.
Findings and Conclusions
The material issues, findings and conclusions, rulings, and general
findings and determinations included in the Recommended Decision set
forth in the November 9, 2000, issue of the Federal Register (65 FR
67584) are hereby approved and adopted.
Marketing Agreement and Order
Annexed hereto and made a part hereof is the document entitled
``Order Amending the Order Regulating the Handling of Sweet Cherries
Grown in designated counties of Washington.'' This document has been
decided upon as the detailed and appropriate means of effectuating the
foregoing findings and conclusions.
It is hereby ordered, That this entire decision be published in the
Federal Register.
Referendum Order
It is hereby directed that a referendum be conducted in accordance
with the procedure for the conduct of referenda (7 CFR part 900.400 et
seq.) to determine whether the issuance of the annexed order amending
the order regulating the handling of sweet cherries grown in designated
counties in Washington is approved or favored by growers, as defined
under the terms of the order, who during the representative period were
engaged in the production of sweet cherries in the production area.
The representative period for the conduct of such referendum is
hereby determined to be April 1, 1999, through March 31, 2000.
The agents of the Secretary to conduct such referendum are hereby
designated to be Gary Olson and Teresa Hutchinson, Northwest Marketing
Field Office, Marketing Order Administration Branch, Fruit and
Vegetable Programs, AMS, USDA, 1220 SW. Third Avenue, room 369,
Portland, Oregon 97204; telephone (503) 326-2724.
List of Subjects in 7 CFR Part 923
Cherries, Marketing agreements, Reporting and recordkeeping
requirements.
Dated: March 1, 2001.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
Order Amending the Order Regulating the Handling of Sweet Cherries
Grown in designated counties in Washington \1\
---------------------------------------------------------------------------
\1\ This order shall not become effective unless and until the
requirements of Sec. 900.14 of the rules of practice and procedure
governing proceedings to formulate marketing agreements and
marketing orders have been met.
---------------------------------------------------------------------------
Findings and Determinations
The findings and determinations hereinafter set forth are
supplementary and in addition to the findings and determinations
previously made in connection with the issuance of the order; and all
of said previous findings and determinations are hereby ratified and
affirmed, except insofar as such findings and determinations may be in
conflict with the findings and determinations set forth herein.
(a) Findings and Determinations Upon the Basis of the Hearing Record
Pursuant to the provisions of the Agricultural Marketing Agreement
Act of 1937, as amended (7 U.S.C. 601 et seq.), and the applicable
rules of practice and procedure effective thereunder (7 CFR part 900),
a public hearing was held upon the proposed amendments to the Marketing
Agreement and Order No. 923 (7 CFR part 923), regulating the handling
of sweet cherries grown in designated counties in Washington.
Upon the basis of the evidence introduced at such hearing and the
record thereof, it is found that:
(1) The marketing agreement and order, as hereby proposed to be
amended, and all of the terms and conditions thereof, will tend to
effectuate the declared policy of the Act;
(2) The marketing agreement and order, as hereby proposed to be
amended, regulate the handling of sweet 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 hearings have been held;
(3) The marketing agreement and order, as hereby proposed to be
amended, are limited in application to the smallest regional production
area which is practicable, consistent with carrying out the declared
policy of the Act, and the issuance of several orders applicable to
subdivisions of the production area would not effectively carry out the
declared policy of the Act; and
(4) The marketing agreement and order, as hereby proposed to be
amended, prescribe, insofar as practicable, such different terms
applicable to different parts of the production area as are necessary
to give due recognition to the differences in the production and
marketing of sweet cherries grown in the production area; and
(5) All handling of sweet cherries grown in the production area is
in the current of interstate or foreign commerce or directly burdens,
obstructs, or affects such commerce.
Order Relative to Handling
It is therefore ordered, That on and after the effective date
hereof, all handling of sweet cherries grown in designated counties in
Washington, shall be in conformity to, and in compliance with, the
terms and conditions of the said order as hereby proposed to be amended
as follows:
The provisions of the proposed marketing agreement and the order
amending the order contained in the Recommended Decision issued by the
Administrator on November 2, 1999, and published in the Federal
Register on November 9, 1999, shall be and are the terms and provisions
of this order amending the order and are set forth in full herein.
PART 923--SWEET CHERRIES GROWN IN DESIGNATED COUNTIES IN WASHINGTON
1. The authority citation for 7 CFR part 923 continues to read as
follows:
[[Page 13454]]
Authority: 7 U.S.C. 601-674.
2. Revise Sec. 923.4 to read as follows:
Sec. 923.4 Production area.
Production area means the counties of Okanogan, Chelan, Kittitas,
Yakima, Klickitat in the State of Washington and all of the counties in
Washington lying east thereof.
3. Amend Sec. 923.14 by revising paragraphs (a) and (b) to read as
follows:
Sec. 923.14 District.
* * * * *
(a) District 1 shall include the Counties of Chelan, Okanogan,
Douglas, Grant, Lincoln, Spokane, Pend Oreille, Stevens, and Ferry.
(b) District 2 shall include the counties of Kittitas, Yakima,
Klickitat, Benton, Adams, Franklin, Walla Walla, Whitman, Columbia,
Garfield and Asotin.
Sec. 923.20 [Amended]
4. Amend Sec. 923.20 as follows:
(a) In the first sentence remove the word ``fifteen'' and add the
word ``sixteen'' in its place;
(b) In the third and fourth sentences remove the word ``five'' and
add the word ``six'' in its place;
(c) In the fifth sentence, remove the words ``four'' and ``six''
and add the word ``five'' in their place; and
(d) In the sixth sentence, remove the word ``two'' and add the word
``three'' in its place.
5. Revise Sec. 923.21 to read as follows:
Sec. 923.21 Term of office.
The term of office of each member and alternate member of the
committee shall be for two years beginning April 1 and ending March 31.
Members and alternate members shall serve in such capacities for the
portion of the term of office for which they are selected and have
qualified and until their respective successors are selected and have
qualified. Committee members shall not serve more than three
consecutive terms. Members who have served for three consecutive terms
must leave the committee for at least one year before becoming eligible
to serve again.
6. Revise Sec. 923.25 to read as follows:
Sec. 923.25 Acceptance.
Any person prior to selection as a member or an alternate member of
the committee shall qualify by filing with the Secretary a written
acceptance of willingness to serve on the committee.
7. Revise Sec. 923.41 by adding a new paragraph (c) to read as
follows:
Sec. 923.41 Assessments.
* * * * *
(c) If a handler does not pay any assessment within the time
prescribed by the committee, the assessment may be subject to an
interest or late payment charge, or both, as may be established by the
Secretary as recommended by the committee.
Sec. 923.52 [Amended]
8. In Sec. 923.52, paragraph (a)(3) is amended by adding the word
``markings,''; after the word ``dimensions,''.
9. Amend Sec. 923.54 as follows
Remove the words ``(including shipments to facilitate the conduct
of marketing research and development projects established pursuant to
Sec. 923.45),'' in paragraph (b) and add a new sentence at the end of
the paragraph; and add a new sentence at the end of paragraph (c) to
read as follows:
Sec. 923.54 Special purpose shipments.
* * * * *
(b) * * * Specified purposes under this section may include
shipments of cherries for grading or packing to specified locations
outside the production area and shipments to facilitate the conduct of
marketing research and development projects established pursuant to
Sec. 923.45.
(c) * * * The committee may rescind or deny to any packing facility
the special purpose shipment certificate if proof satisfactory to the
committee is obtained that cherries shipped for the purpose stated in
this section were handled contrary to the provisions of this section.
10. Amend Sec. 923.64 by adding a new sentence at the beginning of
paragraph (c) to read as follows:
Sec. 923.64 Termination
* * * * *
(c) The Secretary shall conduct a referendum six years after [the
effective date of this paragraph] and every sixth year thereafter to
ascertain whether continuance of this part is favored by growers. * * *
* * * * *
[FR Doc. 01-5418 Filed 3-5-01; 8:45 am]
BILLING CODE 3410-02-P
This archive was generated by hypermail 2b29 : 2001/03/06 EST