[Federal Register: October 5, 2004 (Volume 69, Number 192)]
[Proposed Rules]
[Page 59551-59557]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05oc04-15]
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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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[[Page 59551]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 923
[Docket Nos. AO-F&V-923-3; FV03-923-01]
Sweet Cherries Grown in Designated Counties in Washington;
Recommended Decision and Opportunity To File Written Exceptions to
Proposed Amendments to Marketing Agreement and Order No. 923
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule and opportunity to file exceptions.
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SUMMARY: This recommended decision invites written exceptions on
proposed amendments to the marketing agreement and order (order) for
sweet cherries grown in Washington. Four amendments were proposed by
the Washington Cherry Marketing Committee (Committee), which is
responsible for local administration of the order: adding authority for
promotion, including paid advertising, and production research
projects; adding authority for supplemental rates of assessment for
individual varieties of cherries; adding authority for the Committee to
accept voluntary contributions for research and promotion; and, adding
a public member to the Committee. Two additional amendments are
proposed by the Agricultural Marketing Service: establishing tenure
limitations for Committee members; and, requiring that continuance
referenda be conducted every 6 years.
DATES: Written exceptions must be filed by November 4, 2004.
ADDRESSES: Written exceptions should be filed with the Hearing Clerk,
U.S. Department of Agriculture, room 1081-S, Washington, DC 20250-9200,
Facsimile number (202) 720-9776 or http://www.regulations.gov. All
comments should reference the docket 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.ams.usda.gov/fv/moab.html
.
FOR FURTHER INFORMATION CONTACT: Melissa Schmaedick, Marketing Order
Administration Branch, Fruit and Vegetable Programs, Agricultural
Marketing Service, USDA, Post Office Box 1035, Moab, UT 84532,
telephone: (435) 259-7988, fax: (435) 259-4945.
Small businesses may request information on this proceeding by
contacting Jay Guerber, Marketing Order Administration Branch, Fruit
and Vegetable Programs, AMS, USDA, 1400 Independence Avenue SW., Stop
0237, Washington, DC 20250-0237; telephone: (202) 720-2491, fax: (202)
720-8938.
SUPPLEMENTARY INFORMATION: Prior documents in this proceeding include a
Notice of Hearing issued on October 6, 2003, and published in the
October 10, 2003, issue of the Federal Register (68 FR 58636).
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 of
Marketing Agreement and Order No. 923 regulating the handling of sweet
cherries grown in designated counties in Washington, and the
opportunity to file written exceptions thereto. Copies of this decision
can be obtained from Melissa Schmaedick, 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 et seq.), 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 November 18, 2003, in Yakima, Washington. Notice of this hearing
was published in the Federal Register on October 10, 2003. The notice
of hearing contained proposals submitted by the Committee and by AMS.
The Committee's proposed amendments include: (1) Adding the
authority for promotion, including paid advertising, and production
research projects; (2) adding the authority for supplemental rates of
assessment for individual varieties of cherries; (3) adding the
authority for the Committee to accept voluntary contributions for
marketing research and promotion, including paid advertising, and
production research projects; and (4) adding a public member and
alternate public member to the Committee.
The Fruit and Vegetable Programs of AMS proposed two additional
amendments: to establish tenure limitations for Committee members and
require that continuance referenda be conducted on a periodic basis to
ascertain grower support for the order. In addition, AMS proposed to
allow such changes as may be necessary to the order, if any of the
proposed changes are adopted, so that all of the order's provisions
conform to the effectuated amendments.
Six industry witnesses testified at the hearing. These witnesses
represented sweet cherry growers and handlers in the production area,
and they all supported the Committee's recommended changes.
Witnesses addressed the need for adding the authority for
promotion, including paid advertising, and production research
projects. This authority would enable the Committee to develop more
efficient growing, harvesting, marketing and distribution techniques
for sweet cherries produced in the production area. Promotional
activities, including paid advertising, could lead to greater market
exposure and consumer demand for sweet cherries, thereby supporting
increased grower returns.
Witnesses stated their approval of the Committee's recommendation
to add the authority for supplemental rates of assessment for
individual varieties of cherries. Funds generated from supplemental
rates of assessment would be used for research or promotion projects
specific to an individual variety of sweet cherry.
Witnesses also supported the proposal to add authority for the
Committee to accept voluntary contributions for marketing research and
promotion,
[[Page 59552]]
including paid advertising, and production research projects. Witnesses
stated that the industry would benefit from this authority as
contributions could provide the industry with additional research and
marketing opportunities.
Lastly, the Committee recommended adding a public member and
alternate public member to the Committee. Witnesses stated that a
public member would benefit Committee deliberations by bringing a non-
industry, consumer perspective to the table.
An AMS witness testified in support of tenure limitations as a way
to broaden industry participation in the program. That witness also
supported continuance referenda as a means of determining grower
sentiment on the order's operations.
At the conclusion of the hearing, the Administrative Law Judge
stated that the final date for interested persons to file proposed
findings and conclusions or written arguments and briefs based on the
evidence received at the hearing would be 30 days after USDA's receipt
of the hearing record transcript. No briefs were filed.
Material Issues
The material issues presented on the record of hearing are as
follows:
(1) Whether to add authority for promotion, including paid
advertising, and production research projects;
(2) Whether to add authority for supplemental rates of assessment
for individual varieties of cherries;
(3) Whether to add authority for the Committee to accept voluntary
contributions for marketing research and promotion, including paid
advertising, and production research projects;
(4) Whether to add a public member and alternate public member seat
to the Committee;
(5) Whether to impose term limitations on Committee members; and
(6) Whether to add a requirement that continuance referenda be held
every 6 years.
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--Authority for Production Research and
Promotion, Including Paid Advertising
Section 923.45 of the order should be amended to add authority for
production research and promotion, including paid advertising. That
order provision currently authorizes only marketing research and
development activities.
This authority would enable the Committee to develop more efficient
growing, harvesting, marketing and distribution techniques for sweet
cherries produced in the production area. Promotional activities,
including paid advertising, could lead to greater market exposure and
consumer demand for Washington sweet cherries, thereby supporting
increased returns for growers.
This authority would enable the Committee to fund production
research and promotion efforts. Such activities could be conducted by
the Committee itself or be contracted out to other parties. The
industry believes that it is important to include promotion and
production research under the Federal marketing order as these
activities are vital to the long-term health of the industry.
The record evidence shows that sweet cherry acreage in Washington
has increased from 21,000 acres in 1997 to an estimated 30,000 acres in
2004. In that same time period, overall tonnage of Washington sweet
cherries increased from 62,000 tons to 120,000 tons. Witnesses
testified that acreage and production will continue to increase, making
promotion and research all that more important. As production
increases, there is an increasing need to identify means of increasing
quality and more accurately determining the volume of cherries that
will be available to consumers in a given year.
For many years, production research and promotion has been carried
out by the Washington State Fruit Commission (Commission) and other
entities within the industry. Demonstrated success of these research
and promotion programs has led to industry support for adding this
authority to the order.
Testimony indicated that current industry production research and
promotion activities range from the development of more accurate
weather detection systems and timely distribution strategies, to in-
store promotion activities and paid advertising.
According to the record, production research in forecasting crop
yield and harvest timing through Global Positioning Systems (GPS),
satellite imagery, and real-time reporting technology has been
particularly successful. Sweet cherries are a highly perishable crop.
Accurate prediction of crop size and harvest timing is vital to the
effective marketing and distribution of high quality cherries to the
retail sectors. Because of the new advances in production technology,
the industry was able to effectively anticipate the timing and record-
breaking volume of the 2003 sweet cherry crop. In 2003, 8.5 million
boxes were harvested, marketed and sold over a four week period (June
15 to July 15). Before that year, the industry's record volume for
those four weeks was 5.5 million boxes.
Another example of research conducted by the industry involves
taste testing of newly developed sweet cherry varieties. According to
the record, new varieties developed in Prosser, Washington, were taken
to the United Kingdom for consumer taste tests in 2000. This project
was a cooperative effort by the Commission, Washington State University
and the Washington State Research Commission. This project helped the
industry determine consumer receptivity of new varieties introduced
into the market.
A representative of the Commission testifying at the hearing stated
that, since 1997, both volume and prices of Washington sweet cherries
have shown annual increases. Increased market demand can be tied to the
Commission's success in working with the retail sector. From 1997 to
2003, the number of retailers running 4-week promotion ads increased
from 30 to 79. At the same time, the number of retail chains decreased
from 250 to 160. The witness stated that these numbers indicate that
the relative proportion of retail exposure for sweet cherries since
1997 has increased considerably.
Consumers have responded to marketing efforts by doubling their
purchase volume during targeted retail promotion periods. According to
the witness, since 1997, sweet cherries have become a focus item for
retail, as they have grown to make up at least 3.5 percent of the total
produce category sales. Sweet cherry sales also continue to drive just
over 10 percent sales lifts in the U.S. domestic retail market in the
months of June and July.
The witness estimates that the dollar impact on the local economy,
or the residual benefit of the Commission's marketing efforts and
increased sweet cherry demand within the State of Washington, has
increased 29.74 percent over the past 5 years. With nearly 70 percent
of total sweet cherry production sold domestically, the industry's
marketing efforts have enabled the Washington sweet cherry industry to
remain profitable in light of increasing production, rather than fall
into a non-sustaining oversupply situation with low producer returns.
One witness who produces other crops in addition to sweet cherries
indicated that the recent loss of the Washington State Apple Commission
[[Page 59553]]
has had a negative impact on his returns for apples. More specifically,
the witness indicated that the lack of promotional activities for
Washington apples resulted in that industry's inability to respond
effectively to last year's increased production. With increased volume
in the market and few tools to assist in marketing and distributing
that product, grower returns fell below subsistence levels. The witness
stated that the Washington sweet cherry industry's ability to continue
to meet the industry's challenges of increasing production through
research and promotion has resulted in that industry's continued
success. While to date that work has been done under the auspices of
the Commission, the industry wants to further its ability to conduct
these activities by adding research and promotion authority to the
order.
When asked whether a voluntary promotion program would work for the
Washington sweet cherry industry, witnesses responded that the
authority to conduct research and promotion activities under the order
would ensure that those activities continue in a consistent manner, and
that they would not be subject to economic cycles within the industry.
One witness explained that a cooperative approach to funding these
activities would operate as an ``umbrella'' mechanism for the entire
industry by providing research and promotion solutions to all industry
participants. Witnesses also indicated that this authority would be
equally beneficial to small and large grower and handler entities.
Grower input into the development of any research or promotion programs
would also ensure that these activities, and the use of assessment
funds to support them, would remain responsive to industry needs.
Adding this authority to the order would provide the Committee with
the flexibility to use research and promotional activities, including
paid advertising, to assist and improve production techniques, and
promote the marketing, distribution and consumption of Washington sweet
cherries. The use of assessments and available funding sources for
research and promotion, including paid advertising, would be an
important component to increasing demand and consumption of Washington
sweet cherries.
The record supports adding authority for production research and
promotion to Sec. 923.45 of the order. There was no opposition
testimony on this issue.
Material Issue Number 2--Supplemental Rates of Assessment
Section 923.41, Assessments, of the order should be amended to
allow additional rates of assessment for individual varieties of
cherries. Currently, the order provides for a single rate of assessment
for all cherries, regardless of variety, to be established. The base
assessment rate is recommended by the Committee for approval by the
Department. If authority to establish supplemental rates of assessment
by variety was added to the order, those rates would also be
recommended by the Committee for approval by USDA. Assessments are used
to fund the administrative functions of the Committee, as well as any
research and promotion activities. According to the record,
supplemental rates of assessment would be used for expenses specific to
an individual variety of sweet cherry.
Witnesses stated that there are a number of reasons for which
specific varieties may warrant supplemental assessment rates, including
differences in production and marketing needs. Supplemental assessments
could be used to fund research that is particular to the needs of a
specific variety, or could be used to fund promotional projects to
market lesser known or off-season varieties. Supplemental rates could
also be applied when a particular variety of cherries produces a larger
than anticipated crop in a given year. In those cases, extra funds
generated through a supplemental rate could be used to support
additional marketing efforts needed to stimulate demand and move that
crop within the market.
Witnesses stated that any supplemental assessments collected by
variety of cherry should only be used to fund projects associated with
that variety. While all growers within the production area benefit from
general sweet cherry production research and marketing efforts, growers
of specific varieties should fund any projects aimed at benefiting that
particular variety. For example, if a new variety of sweet cherry is
developed, special marketing may be needed to introduce that variety to
consumers in the market. While there is a risk associated with the
production of that new variety, both the costs and the benefits of
producing a unique and potentially higher price product should be
attributed to the growers of that product.
It is not anticipated that this authority would unduly burden small
growers or handlers. While a supplemental assessment would represent an
additional cost, witnesses stated that the benefits derived from that
assessment would outweigh its cost. Adding this authority in
conjunction with the proposal to add authority to conduct production
research and promotion activities, including paid advertising, would
allow the Committee to streamline and more specifically focus its
research and promotion activities to the needs of the industry.
Record evidence supports amending the marketing order to authorize
supplemental rates of assessment for specific varieties of sweet
cherries. This proposal would allow the Committee to collect assessment
funds to be used for research and promotion activities that are
specific to a single variety of sweet cherry in addition to projects
that are beneficial to the Washington sweet cherry industry as a whole.
There was no opposition expressed with respect to this proposal.
Material Issue Number 3--Voluntary Contributions
A new Sec. 923.43, Contributions, should be added to the order to
allow the Washington Cherry Marketing Committee to accept voluntary
contributions for the purpose of funding marketing research and
promotion (including paid advertising), and production research
projects. Such contributions should be free from any encumbrances by
the donor so that the Committee would retain complete control of their
use.
Currently, the marketing order program does not contain authority
for the Committee to accept contributions. All marketing order
activities are funded through handler assessments. Witnesses stated
that the industry would benefit from this authority as contributions
from groups and businesses could provide the industry with additional
research and marketing opportunities.
The record shows that contributions could come from equipment and
machinery dealers, fertilizer, chemical or seed dealers, container
manufacturers and dealers, and companies that currently have their own
marketing activities. One witness stated that this authority would have
healthy, long-range effects on the industry. Ultimately, this would
benefit all growers, handlers and consumers of Washington sweet
cherries.
Witnesses testified that voluntary contributions should only be
accepted with the understanding that the Committee would retain full
discretion over how those funds would be used. Witnesses stated that
project selection and spending decisions would rest with the Committee.
While a donor could
[[Page 59554]]
indicate a specific project that he or she supports, the Committee
would decide how those funds should be spent.
Record evidence supports revising the marketing order to
incorporate the authority to accept voluntary contributions. There was
no opposition given to this proposal.
Material Issue Number 4--Public Member
The marketing order should be revised to add a public member and
alternate public member to the Washington Cherry Marketing Committee.
This amendment would necessitate revising language in Sec. 923.20,
Establishment and membership, and 923.22, Nomination.
If this change were implemented, Committee membership would
increase from 16 to 17 members. The public member could not have any
financial interest in the Washington sweet cherry industry. The public
member would have the same rights and responsibilities as other
Committee members, including reimbursement for expenses as approved by
the Committee.
Witnesses stated that the addition of a public member to the
Committee would be beneficial in that it would bring a non-industry
perspective to Committee deliberations and decision-making. The public
member and alternate should be persons who can present constructive
criticism when needed, and who can work together with other Committee
members to build a bridge for better understanding between consumers
and agriculture.
The evidence of record is that a non-industry perspective could be
especially useful in deliberations over production research and
promotion activities. Research and promotion activities are aimed not
only at improving production and harvest techniques, but also product
quality. High quality is important to the industry's ability to boost
consumer demand and maintain adequate grower returns. Moreover,
promotion activities are intended to attract or increase consumer
interest in the product. Often promotion activities include an
educational element about the benefits of the product, or ideas for
using the product in cooking or food presentation. A public member
could help the Committee to decide which types of production research
or promotion activities would be most beneficial in the eyes of the
consumer.
Persons serving as public representatives should not be, at the
time of selection, nomination or during the term of office, engaged in
the commercial production, buying, grading, processing of any
agricultural product, nor should they be an officer, director, member,
or employee of any firm engaged in the production or processing of any
agricultural product. Should the public member or alternate public
member become involved in such activities at any time during their term
of office, they would become ineligible to continue to serve and a
replacement would be nominated for the Department's appointment.
Testimony indicates that the initial public member and alternate
public member should be nominated at the first Committee meeting
following the selection of industry members for a new term of office,
which starts on April 1. Normally, the Committee holds its marketing
policy and organization meeting during May of each year, so such
meeting could be used to nominate the public member and the alternate.
Witnesses recognized that some delay would occur in the nomination
and seating of the initial public member and alternate public member,
as recommendation of those candidates would occur after the grower and
handler members the Committee were appointed. Witnesses stated that it
would be better to have the public member positions vacant for a short
period of time until the new Committee members are seated by the
Department, rather than create a second later term of office just
applicable to the public member and alternate member. This situation
would only occur once since all subsequent public members and their
alternates would serve until their respective successors are appointed,
as is currently practiced for all Committee grower and handler members.
Record evidence supports the addition of a public member and
alternate public member to the Washington Cherry Marketing Committee.
No opposition to this proposal was presented at the hearing.
Material Issue Number 5--Tenure Limitations
Section 923.21, Term of office, should be revised to establish a
limit on the number of consecutive terms a person may serve on the
Committee. Currently, the term of office of each member and alternate
member of the Committee is three years. There are no provisions related
to tenure in the marketing order. Members and alternates may serve on
the Committee until their respective successors are selected and have
qualified.
The record shows that USDA proposed tenure requirements for
Committee members as a means to increase industry participation on the
Committee, 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.
Experience with other marketing order programs suggests that a
period of six years would be appropriate. Since the current term of
office for Washington Cherry Marketing Committee members and alternates
is two years, the Department is proposing that no member serve more
than three consecutive two-year terms or a total of six years. This
proposal for a limitation on tenure would not apply to alternates. Once
a member has served on the Committee for three consecutive terms, or
six years, the member would sit out for one year before being eligible
to serve as a member again. The member could serve as an alternate
during that time.
One witness testified in opposition to tenure limitations. He
indicated that finding growers and handlers willing to serve on the
Committee could become more difficult, and the knowledge of experienced
Committee members would be difficult to replace.
The Department believes that any additional efforts necessary to
find eligible growers and handlers who are willing to serve on the
Committee offset by the benefits derived by broader industry
participation in order operations.
Therefore, it is recommended that the order be amended to establish
tenure requirements for Committee members.
Material Issue Number 6--Continuance Referenda
Section 923.64, Termination, should be amended to require that
continuance referenda be conducted every six years to ascertain
industry support for the order.
Currently, there is no provision in the marketing order that
requires periodic continuance referenda. The record evidence is that
growers should have an opportunity to periodically vote on whether the
marketing order should continue. Continuance referenda provide an
industry with a means to measure grower support for the marketing order
program. Experience has shown that programs need significant industry
support to operate effectively. Under this proposal, the Department
would consider termination of the marketing order if continuance is not
favored by at least two-thirds of those voting, or at least two-thirds
of the volume represented in the referendum. This is the same as that
for issuance of an order. Experience in recent years indicates that six
years is an appropriate
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period to allow growers an opportunity to vote for continuance of the
program. Therefore, the proposal sets forth that a referendum would be
conducted six years after the effective date of this amendment and
every sixth year thereafter.
One industry witness testified in opposition to this proposal. He
indicated that the industry currently has the ability to request a
continuance referendum at any time, and requiring unnecessary referenda
would be costly and of little value to the industry or the Department.
The program has worked successfully since its inception, and growers
have been supportive of the order since that time.
The Department believes that growers should have an opportunity to
periodically vote on whether the marketing order should continue.
Accordingly, it is recommended that the order be amended to require a
continuance referendum every six years.
The Agricultural Marketing Service also proposed to make such
changes as may be necessary to the order to conform to any amendment
that may result from the hearing. The Department has identified no
necessary conforming changes.
Small Business Consideration
Pursuant to the requirements set forth in the Regulatory
Flexibility Act (RFA), the Agricultural Marketing Service (AMS) has
considered the economic impact of this action on small entities.
Accordingly, the AMS has prepared this initial regulatory flexibility
analysis.
The purpose of the RFA is to fit regulatory actions to the scale of
business subject to such actions so that small businesses will not be
unduly or disproportionately burdened. Small agricultural growers have
been defined by the Small Business Administration (SBA) (13 CFR
121.201) as those having annual receipts of less than $750,000. Small
agricultural service firms are defined as those with annual receipts of
less than $5,000,000.
The record shows that there are approximately 1,500 growers of
sweet cherries in the production area and approximately 62 handlers
subject to regulation under the order. The average production of sweet
cherries in Washington State for the last three years is 64,676 tons
with an average grower price of $1,943 per ton. Using this number, the
average annual grower revenue is calculated to be approximately
$83,777, thus indicating that the average Washington sweet cherry
grower would qualify as a small entity according to the SBA definition.
Using Committee data regarding each individual handler's total
shipments during the 2002 marketing year, and an estimated average FOB
price of $24 per 20-pound container, 79 percent of the Washington sweet
cherry handlers shipped under $5 million worth of sweet cherries, and
21 percent shipped over $5 million worth of sweet cherries. Therefore,
the majority of Washington sweet cherry handlers may be classified as
small entities.
The Committee is currently comprised of 10 growers and 6 handlers.
Both small and large growers and handlers are members and member
alternates on the Committee. Committee meetings are widely publicized
in advance of the meetings and are held in a location central to the
production area. The meetings are open to all industry members and all
other interested persons, who are encouraged to participate in the
deliberations and voice their opinions on topics under discussion.
At a May 22, 2003, full Committee meeting, all industry
representatives present could present their views concerning the
recommended amendments. Both large and small businesses were
represented. The Committee believes that small and large entities would
benefit equally from the proposed amendments.
Testimony indicates that the proposal to include paid advertising
and production research under the order would assist both small and
large growers and handlers in marketing Washington sweet cherry crops.
While addition of this authority could result in increased assessments
under the order, witnesses stated that the benefits arising from these
activities, as evidenced by similar activities under the Commission,
would outweigh the costs.
Similarly, the proposal to add authority for supplemental varietal
assessments could require additional payments per individual variety of
sweet cherry. However, witnesses stated that they believed the benefits
of those research and promotion activities would outweigh the costs.
Witnesses used the example of recent Commission activities as
evidence that research and promotion activities would lead to increased
grower returns and market stability by providing tools to the industry
to address expanding production and evolving consumer trends in the
industry. Witnesses were unanimous in their belief that the benefits of
the Commission's activities more than outweigh the costs of these
programs. They stated that the same results would be expected from any
such activities conducted under the order.
The proposal to add authority for the Committee to accept voluntary
contributions would not result in any increased costs or burdens to the
industry. In fact, witnesses stated that this authority would benefit
the industry greatly as it could provide for additional funding sources
of research and promotional activities. Safeguards against donor
control over the use of voluntary contributions would ensure that these
funds would be used in the best interest of the industry. The Committee
would decide how to use those funds, and the decision-making process
would be open to industry input and feedback.
The proposal to add a public member and alternate public member to
the Committee is not expected to result in any substantial cost
increases. While the new members would be entitled to reimbursement for
their expenses, the additional cost would be minimal. Additionally, the
benefit of adding a non-industry, consumer perspective to Committee
deliberations and decision-making could prove very beneficial.
Witnesses stated that this additional perspective would improve the
Committee's understanding of the consumer in the marketplace and could
enhance Committee activities aimed at increasing consumer demand for
Washington sweet cherries.
The proposed amendment to add tenure requirements for Committee
members would allow more persons the opportunity to serve as members of
the Committee. It would provide for more diverse membership, provide
the Committee with new perspectives and ideas, and increase the number
of individuals in the industry with Committee experience.
The proposal to require continuance referenda on a periodic basis
to ascertain grower support for the order would allow growers to vote
on whether to continue the operation of the program. The referenda
would be conducted by USDA.
Interested persons were invited to present evidence at the hearing
on the probable regulatory and informational impacts of the proposed
amendments to the order on small entities. The record evidence is that
while some minimal costs may occur, those costs would be outweighed by
the benefits expected to accrue to the sweet cherry industry in
designated counties of Washington.
The Department has not identified any relevant Federal rules that
duplicate, overlap or conflict with this proposed rule. All of the
amendments are designed to enhance the
[[Page 59556]]
administration and functioning of the program to the benefit of
Washington cherry growers and handlers.
A 30-day comment period is provided to allow interested persons to
respond to this proposal. Thirty days is deemed appropriate so that
this rulemaking may be completed prior to the 2005-2006 season. All
written exceptions timely received will be considered and a grower
referendum will be conducted before these proposals are implemented.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35), AMS announces its intention to request OMB approval of any
increase in information collection burden for the Washington Cherry
marketing order.
The Washington Cherry Marketing Committee (Committee) recommended
adding a public member and alternate public member to the Committee. In
conformance with the recommendation, a confidential qualification and
acceptance statement would be used to nominate and appoint the public
and alternate public committee members. This form is based on the
currently approved Confidential Background Statement for the Washington
Cherry Marketing Committee. If this proposal is implemented the form
would only be used after approval by OMB.
Civil Justice Reform
The amendments to Marketing Order 923 proposed herein have been
reviewed under Executive Order 12988, Civil Justice Reform. They are
not intended to have retroactive effect. If adopted, the proposed
amendments would not preempt any State or local laws, regulations, or
policies, unless they present an irreconcilable conflict with this
proposal.
The Act provides that administrative proceedings must be exhausted
before parties may file suit in court. Under section 608c(15)(A) of the
Act, any handler subject to an order may file with the Department a
petition stating that the order, any provision of the order, or any
obligation imposed in connection with the order is not in accordance
with law and request a modification of the order or to be exempted
therefrom. A handler is afforded the opportunity for a hearing on the
petition. After the hearing, the USDA would rule on the petition. The
Act provides that the district court of the United States in any
district in which the handler is an inhabitant, or has his or her
principal place of business, has jurisdiction to review the
Department's ruling on the petition, provided an action is filed not
later than 20 days after the date of the entry of the ruling.
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 marketing agreement and 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 agreement and order, as amended, and as hereby
proposed to be further amended, and all of the terms and conditions
thereof, would tend to effectuate the declared policy of the Act;
(2) The marketing agreement and order, as amended, and as hereby
proposed to be further amended, regulate the handling of sweet cherries
grown in the production area in the same manner as, and are applicable
only to, persons in the respective classes of commercial and industrial
activity specified in the marketing agreement and order upon which a
hearing has been held;
(3) The marketing agreement and order, as amended, and as hereby
proposed to be further amended, are limited in their application to the
smallest regional production area which is practicable, consistent with
carrying out the declared policy of the Act, and the issuance of
several orders applicable to subdivisions of the production area would
not effectively carry out the declared policy of the Act;
(4) The marketing agreement and order, as amended, and as hereby
proposed to be further amended, prescribe, insofar as practicable, such
different terms applicable to different parts of the production area as
are necessary to give due recognition to the differences in the
production and marketing of sweet cherries grown in the production
area; and
(5) All handling of sweet cherries grown in the production area as
defined in the marketing agreement and order, is in the current of
interstate or foreign commerce or directly burdens, obstructs, or
affects such commerce.
List of Subjects in 7 CFR Part 923
Cherries, Marketing agreements, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, 7 CFR part 923, is
proposed to be amended as follows:
PART 923--SWEET CHERRIES GROWN IN DESIGNATED COUNTIES IN WASHINGTON
1. The authority citation for 7 CFR part 923 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. Section 923.20 is revised to read as follows:
Sec. 923.20 Establishment and membership.
There is hereby established a Washington Cherry Marketing Committee
consisting of seventeen members, each of whom shall have an alternate
who shall have the same qualifications as the member for whom he or she
is an alternate. Ten members and their respective alternates shall be
growers or officers or employees of corporate growers. Six of the
members and their respective alternates shall be handlers, or officers
or employees of handlers. One member and his or her respective
alternate shall be a public member who is neither a grower nor a
handler. The ten members of the committee who are growers or employees
or officers of corporate growers are referred to in this part as
``grower members'' of the committee; and six members of the committee
who shall be handlers, or officers or employees of handlers are
referred to in this part as ``handler members'' of the committee. Five
of the grower members and their respective alternates shall be growers
of cherries in District 1, and five of the grower members and their
respective alternates shall be growers of cherries in District 2. Three
of the handler members and their respective alternates shall be
handlers of cherries in District 1, and three of the handler members
and their representative alternates shall be handlers of cherries in
District 2.
3. Revise Sec. 923.21 to read as follows:
Sec. 923.21 Term of office.
The term of office of each member and alternate member of the
committee shall be for two years beginning April 1 and ending March 31.
Members and alternate members shall serve in such capacities for the
portion of the term of office for which they are selected and have
qualified and until their respective successors are selected and have
qualified. Committee members shall not serve more than three
consecutive terms. Members who have served for three consecutive terms
must leave the committee for at least one year before becoming eligible
to serve again.
4. Amend Sec. 923.22 by adding a new paragraph (b)(4) to read as
follows:
[[Page 59557]]
Sec. 923.22 Nomination.
* * * * *
(b) * * *
(4) The grower and handler members of the committee shall nominate
the public member and alternate public member at the first meeting
following the selection of members for a new term of office.
5. In Sec. 923.41, paragraph (c) is redesignated as paragraph (d)
and a new paragraph (c) is added to read as follows:
Sec. 923.41 Assessments.
* * * * *
(c) Based upon a recommendation of the committee or other available
information, the Secretary shall fix the rate of assessment that
handlers shall pay on all cherries handled during each fiscal period,
and may also fix supplemental rates of assessment on individual
varieties or subvarieties to secure sufficient funds to provide for
projects authorized under Sec. 923.45. At any time during the fiscal
period when it is determined on the basis of a committee recommendation
or other information that a different rate is necessary for all
cherries or for any varieties or subvarieties, the Secretary may modify
a rate of assessment and such new rate shall apply to any or all
varieties or subvarieties that are shipped during the fiscal period.
* * * * *
6. A new Sec. 923.43 is added to read as follows:
Sec. 923.43 Contributions.
The committee may accept voluntary contributions but these shall
only be used to pay expenses incurred pursuant to Sec. 923.45.
Furthermore, such contributions shall be free from any encumbrances by
the donor and the committee shall retain complete control of their use.
7. Section Sec. 923.45 is revised to read as follows:
Sec. 923.45 Production and marketing research, promotion and market
development.
The committee, with the approval of the Secretary, may establish or
provide for the establishment of projects involving production
research, marketing research and development, and marketing promotion,
including paid advertising, designed to assist, improve, or promote the
marketing, distribution, consumption or efficient production of
cherries. The expense of such projects shall be paid from funds
collected pursuant to Sec. Sec. 923.41 and 923.43.
8. Section 923.64 is amended by:
A. Revising paragraph (c).
B. Redesignating paragraph (d) as paragraph (e).
C. Adding a new paragraph (d).
The revisions read as follows:
Sec. 923.64 Termination.
* * * * *
(c) The Secretary shall terminate the provisions of this part
whenever it is found that such termination is favored by a majority of
growers who, during a representative period, have been engaged in the
production of cherries: Provided, that such majority has, during such
representative period, produced for market more than 50 percent of the
volume of such cherries produced for market.
(d) The Secretary shall conduct a referendum six years after the
effective date of this section and every sixth year thereafter, to
ascertain whether continuance of this subpart is favored by growers.
The Secretary may terminate the provisions of this subpart at the end
of any fiscal period in which the Secretary has found that continuance
of this subpart is not favored by growers who, during a representative
period determined by the Secretary, have been engaged in the production
of cherries in the production area.
* * * * *
Dated: September 29, 2004.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 04-22303 Filed 10-4-04; 8:45 am]
BILLING CODE 3410-02-P