[Federal Register: December 1, 2004 (Volume 69, Number 230)]
[Proposed Rules]
[Page 69995-70014]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01de04-24]
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Part II
Department of Agriculture
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Agricultural Marketing Service
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7 CFR Part 929
Cranberries Grown in the States of Massachusetts, et al.; Secretary's
Decision and Referendum Order on Proposed Amendment of Marketing
Agreement and Order No. 929; Proposed Rule
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 929
[Docket Nos. AO-341-A6; FV02-929-1A]
Cranberries Grown in the States of Massachusetts, et al.;
Secretary's Decision and Referendum Order on Proposed Amendment of
Marketing Agreement and Order No. 929
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule and referendum order.
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SUMMARY: This decision proposes amendments to the marketing agreement
and order for cranberries grown in Massachusetts, Rhode Island,
Connecticut, New Jersey, Wisconsin, Michigan, Minnesota, Oregon,
Washington, and Long Island in the State of New York, and provides
growers and processors with the opportunity to vote in a referendum to
determine if they favor the changes. The amendments are based on those
proposed by the Cranberry Marketing Committee (Committee), which is
responsible for local administration of the order and other interested
parties representing cranberry growers and handlers. The amendments
would: Revise the volume control provisions; add authority for paid
advertising; authorize the Committee to reestablish districts within
the production area and reapportion grower membership among the various
districts; clarify the definition of handle; and incorporate
administrative changes. The proposed amendments are intended to improve
the operation and functioning of the cranberry marketing order program.
DATES: The referendum will be conducted from December 13 to December
27, 2004. The representative period for the purpose of the referendum
is September 1, 2003, through August 31, 2004.
FOR FURTHER INFORMATION CONTACT: Kathleen M. Finn, Marketing Order
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400
Independence Avenue, SW STOP 0237, Washington, DC 20250-0237;
telephone: (202) 720-2491, or Fax: (202) 720-8938. Small businesses may
request information on compliance with this regulation by contacting
Jay Guerber, Marketing Order Administration Branch, Fruit and Vegetable
Programs, AMS, USDA, 1400 Independence Avenue, SW STOP 0237,
Washington, DC 20250-0237; telephone (202) 720-2491; Fax (202) 720-
8938.
SUPPLEMENTARY INFORMATION: Prior documents in this proceeding: Notice
of Hearing issued on April 23, 2002, and published in the May 1, 2002,
issue of the Federal Register (67 FR 21854); Secretary's Decision on
partial amendments issued on December 4, 2003, and published in the
December 12 issue of the Federal Register (68 FR 69343); Final order
amending order on partial amendments issued on April 5, 2004, and
published in the April 9 issue of the Federal Register (69 FR 18803);
and Recommended Decision on remainder of amendments issued on April 21,
2004, and published in the April 28 issue of the Federal Register (69
FR 23330).
This administrative action is governed by the provisions of
sections 556 and 557 of Title 5 of the United States Code and,
therefore, is excluded from the requirements of Executive Order 12866.
Preliminary Statement
The proposed amendments were formulated based on the record of a
public hearing held in Plymouth, Massachusetts on May 20 and 21, 2002;
in Bangor, Maine on May 23, 2002; in Wisconsin Rapids, Wisconsin on
June 3 and 4, 2002; and in Portland, Oregon on June 6, 2002. The
hearing was held to consider the proposed amendment of Marketing
Agreement and Order No. 929, regulating the handling of cranberries
grown in the States of Massachusetts, Rhode Island, Connecticut, New
Jersey, Wisconsin, Michigan, Minnesota, Oregon, Washington, and Long
Island in the State of New York, hereinafter referred to collectively
as the ``order.'' The hearing was held pursuant to the provisions of
the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C.
601 et seq.), hereinafter referred to as the ``Act,'' and the
applicable rules of practice and procedure governing the formulation of
marketing agreements and marketing orders (7 CFR Part 900). The notice
of hearing contained numerous proposals submitted by the Committee,
other interested parties and one proposed by the Agricultural Marketing
Service (AMS). A final order on 6 of the proposals determined necessary
to be expedited was published in the Federal Register on April 9, 2004.
A recommended decision on the remainder of the proposals was published
in the Federal Register on April 28, 2004. This action sets forth the
Secretary's decision and referendum order on the remaining amendments.
The proposed amendments included in this proceeding would:
Authorize the Committee to reestablish districts within the production
area and reapportion grower membership among the various districts;
Simplify criteria considered and set forth more appropriate dates in
establishing the Committee's marketing policy; Revise the formula for
calculating sales histories under the producer allotment program in
Sec. 929.48; Allow compensation of sales history for catastrophic
events that impact a grower's crop; Remove specified dates relating to
when information is required to be filed by growers/handlers in order
to issue annual allotments; Clarify how the Committee allocates unused
allotment to handlers; Allow growers who decide not to grow a crop
flexibility in deciding what to do with their allotment; Allow growers
to transfer allotment during a year of volume regulation; Authorize the
implementation of the producer allotment and withholding programs in
the same year; Require specific dates for recommending volume
regulation; Add specific authority to exempt fresh, organic or other
forms of cranberries from order provisions; Allow for greater
flexibility in establishing other outlets for excess cranberries;
Update and streamline the withholding volume control provisions; Modify
the buy-back provisions under the withholding volume control
provisions; Add authority for paid advertising under the research and
development provision of the order; Modify the definition of handle to
clarify that transporting fresh cranberries to foreign countries is
considered handling and include the temporary cold storage or freezing
of withheld cranberries as an exemption from handling; Relocate some
reporting provisions to a more suitable provision and streamline the
language relating to verification of reports and records; and Delete an
obsolete provision from the order relating to preliminary regulation.
The Fruit and Vegetable Programs of AMS proposed to allow such
changes as may be necessary to the order, if any of the proposed
amendments are adopted, so that all of the order's provisions conform
to the effectuated amendments.
Four proposed amendments were not recommended for adoption.
Upon the basis of evidence introduced at the hearing and the record
thereof, the Administrator of AMS on April 21, 2004, filed with the
Hearing Clerk, U.S. Department of Agriculture, a Recommended Decision
and Opportunity to File Written Exceptions thereto by May 28, 2004. On
June 2, 2004, the time period for filing written exceptions was
extended until June 30, 2004.
Seven exceptions were filed during the period provided. The
exceptions
[[Page 69997]]
were filed by: The Cranberry Marketing Committee (CMC), Wareham,
Massachusetts; Cape Cod Cranberry Growers' Association (CCCGA), East
Wareham, Massachusetts; Wisconsin State Cranberry Growers' Association
(WSCGA), Wisconsin Rapids, Wisconsin; Clement Pappas and Co., Inc.
(Clement Pappas), Seabrook, New Jersey; John C. Decas (John Decas),
Wareham, Massachusetts; and two exceptions were filed by Ocean Spray
Cranberries, Inc. (OSC), Lakeville/Middleboro, Massachusetts. The
exceptions filed by Ocean Spray Cranberries were identical comments but
signed by different representatives. This exception will be considered
as one. The specifics of the exceptions are discussed in the Findings
and Conclusions; Discussion of Exceptions section of this document.
Proposals Being Recommended in This Decision
The proposal to authorize the Committee to reestablish districts
within the production area and reapportion grower membership among the
various districts would amend Sec. 929.28.
The proposal to simplify criteria and dates in establishing the
Committee's marketing policy would amend Sec. 929.46.
The proposal to revise the formula for calculating sales histories
under the producer allotment program and the proposal to allow
compensation of sales history for catastrophic events that impact a
grower's crop would amend Sec. 929.48.
The proposal to remove dates for information collection for issuing
annual allotments, the proposal to clarify the allocation of unused
allotment and the proposal to allow growers to not assign their
allotment if they do not grow a crop would amend Sec. 929.49.
The proposal to allow growers to transfer allotment would amend
Sec. 929.50.
The proposal to authorize the withholding and producer allotment
programs in the same year would amend Sec. 929.52.
The proposal to require the Committee to recommend volume
regulations by specific dates would amend Sec. 929.51.
The proposal to add authority for exempting fresh and organic
cranberries would amend Sec. 929.58.
The proposal to allow more flexibility in establishing other
outlets for excess cranberries would amend Sec. 929.61.
The proposal to streamline the withholding provisions would amend
Sec. 929.54.
The proposal to modify the buy-back provisions under the
withholding program would amend Sec. 929.56.
The proposal to add authority for paid advertising under the
research and development provision of the order would amend Sec.
929.45.
The proposal to modify the definition of handle would amend Sec.
929.10.
The proposal to streamline and relocate reporting provisions to a
more appropriate provision of the order would amend Sec. Sec. 929.62
and 929.64.
The proposal to delete an obsolete provision would remove Sec.
929.47.
Proposals Not Recommended for Adoption in This Decision
The proposal to add a new Sec. 929.47 to include a handler
marketing pool or buy-back under the producer allotment program is not
being recommended for adoption.
The proposal to allow the first 1,000 barrels of each grower's
production to be exempt from regulations under the order is not being
recommended for adoption.
The proposal to amend Sec. 929.4 to expand the production area to
include the States of Maine, Delaware and the entire State of New York
is not being recommended for adoption.
The proposal to amend 929.5 to revise the definition of
``cranberries'' is not being recommended for adoption.
Small Business Considerations
Pursuant to the requirements set forth in the Regulatory
Flexibility Act (RFA), AMS has considered the economic impact of this
action on small entities. Accordingly, AMS has prepared this final
regulatory flexibility analysis.
The purpose of the RFA is to fit regulatory actions to the scale of
business subject to such actions so that small businesses will not be
unduly or disproportionately burdened. Marketing orders and amendments
thereto are unique in that they are normally brought about through
group action of essentially small entities for their own benefit. Thus,
both the RFA and the Act are compatible with respect to small entities.
Small agricultural producers have been defined by the Small
Business Administration (SBA) (13 CFR 121.201) as those having annual
receipts of less than $750,000. Small agricultural service firms, which
include handlers regulated under the order, are defined as those with
annual receipts of less than $5,000,000.
Interested persons were invited to present evidence at the hearing
on the probable regulatory and informational impact of the proposed
amendments on small businesses. The record indicates that these
amendments could result in additional regulatory requirements being
imposed on some cranberry growers and handlers. Overall benefits are
expected to exceed costs.
The record indicates that there are about 20 handlers currently
regulated under Marketing Order No. 929. In addition, the record
indicates that there are about 1,250 producers of cranberries in the
current production area.
Based on recent years' price and sales levels, AMS finds that
nearly all of the cranberry producers and some of the handlers are
considered small under the SBA definition. In 2001, a total of 34,300
acres were harvested with an average U.S. yield per acre of 156.2
barrels. Grower prices in 2001 averaged $22.90 per barrel. Using these
figures, average total annual grower receipts for 2001 are estimated at
$153,375 per grower. However, there are some growers whose estimated
sales would exceed the $750,000 threshold. Thus, the consequences of
this decision would apply almost exclusively to small entities.
Five handlers handle over 97 percent of the cranberry crop. Using
Committee data on volumes handled, AMS has determined that none of
these handlers qualify as small businesses under SBA's definition. The
remainder of the crop is marketed by about a dozen grower-handlers who
handle their own crops. Dividing the remaining 3 percent of the crop by
these grower-handlers, all would be considered small businesses.
This decision proposes that the order be amended: (1) To authorize
the Committee to reestablish districts within the production area and
reapportion grower membership among the various districts; (2) To
simplify criteria considered and set forth more appropriate dates in
establishing the Committee's marketing policy; (3) To revise the
formula for calculating sales histories under the producer allotment
program in Sec. 929.48, which includes providing additional sales
history to compensate growers for expected production on younger acres.
This proposed changed to Sec. 929.48 would also allow for more
flexibility in recommending changes to the formula and add authority
for segregating fresh and processed sales; (4) To allow compensation of
sales history for catastrophic events that impact a grower's crop; (5)
To remove specified dates relating to when information is required to
be filed by growers/handlers in order to issue annual allotments; (6)
To clarify how the Committee allocates
[[Page 69998]]
unused allotment to handlers; (7) To allow growers to decide whether to
assign allotment if no crop is produced; (8) To allow growers to
transfer allotment during a year of volume regulation; (9) To authorize
the implementation of the producer allotment and withholding programs
in the same year; (10) To set dates by which volume regulations must be
recommended; (11) To add specific authority to exempt fresh, organic or
other forms of cranberries from order provisions; (12) To allow for
greater flexibility in establishing other outlets for excess
cranberries; (13) To update and streamline the withholding volume
control provisions; (14) To modify the withholding volume regulations
by allowing growers to be compensated under the buy-back provisions if
any funds are returned to the handler by the Committee; (15) To add
authority for paid advertising under the research and development
provision of the order; (16) To modify the definition of handle to
clarify that transporting fresh cranberries to foreign countries is
considered handling and include the temporary cold storage or freezing
of withheld cranberries as an exemption from handling; (17) To relocate
some reporting provisions to a more suitable provision and streamline
the language relating to verification of reports and records; and (18)
To delete an obsolete provision from the order relating to preliminary
regulation.
This decision does not recommend for adoption the following
proposed amendments: (1) To incorporate a handler marketing pool or
buy-back provisions under the producer allotment program; (2) To
authorize an exemption from order provisions for the first 1,000
barrels of cranberries produced by each grower; (3) To add Maine,
Delaware and the entire State of New York to the production area; (4)
To add the species Vaccinium oxycoccus to the definition of cranberry.
Historical Trends and Near Term Outlook
The cranberry industry has operated under a Federal marketing order
since 1962. For many years, the industry enjoyed increasing demand for
cranberry products, primarily due to the success of cranberry juice-
based drinks. This situation encouraged additional production. Between
1960 and 1999, production increased from 1.34 million barrels (one
barrel equals 100 pounds of cranberries) to a record 6.3 million
barrels. This represents a 370 percent increase from 1960 and a 17-
percent gain from the 1998 crop year. Production in the 2000 crop year
declined to 5.6 million barrels and to 5.4 million barrels in 2001, due
to the use of volume control by the industry and a decrease in yields
in some production areas due to adverse weather conditions during the
growing season.
Production increased for each of the five major producing States
from 1960 to 2001. In 1995, Wisconsin surpassed Massachusetts to become
the largest producing State. Production in all States is highly
variable. This variation in production is mainly due to the variation
in yields, which is influenced by weather in each of the producing
States. The variation in production is one of the primary reasons the
industry likes to carry out a reasonable volume of inventory into the
next crop year to insure against a short crop.
Cranberries are produced in at least 10 States, but the vast
majority of farms and production are concentrated in Massachusetts, New
Jersey, Oregon, Washington, and Wisconsin. Area harvested for the U.S.
has increased from 21,140 acres in 1960 to 34,300 acres in 2001. Most
of this increase has come from Wisconsin, where area harvested has
increased from 4,200 acres in 1960 to 15,100 acres in 2001. Currently,
Wisconsin has the highest amount of area harvested at 15,100 acres,
followed by Massachusetts with 12,200, New Jersey with 3,100 acres,
Oregon with 2,300 acres, and Washington with 1,600 acres. Total U.S.
area harvested has declined from a peak of 37,500 in 1999 to 34,300
acres in 2001. This decline is likely due to the surplus situation the
industry has experienced over the last several crop years.
Massachusetts has traditionally had the largest area harvested.
However, in 1998, Wisconsin became the State with the largest area
harvested. Since 1998, Wisconsin area harvested has continued to
increase, while Massachusetts area harvested has declined. Together,
both States account for over 80 percent of cranberry production.
Average farm size for cranberry production is very small. The
average across all producing States is about 27 acres. Wisconsin's
average is twice the U.S. average, at 56 acres, and New Jersey averages
66 acres. Average farm size is below the U.S. average for Massachusetts
(20 acres), Oregon (13 acres) and Washington (11 acres).
Yields are highly variable from year to year and yields have been
increasing over time. For the U.S., yields have more than doubled from
the 1960's to the 2000's. Increasing yields suggest that cranberry
growers have become more productive. Over the last five crop years
(1997-2001), Wisconsin has had the highest yield at 185.9 barrels per
acre, followed by New Jersey with an average yield of 154.0 barrels per
acre, then Oregon with an average yield of 151.2 barrels per acres,
then Massachusetts with an average yield of 133.2 barrels per acre, and
then Washington with an average yield of 104.1 barrels per acre.
While production capacity continues to rise, demand has leveled
off. Per capita consumption of fresh cranberries has remained stable
ranging from 0.07 to 0.10 pounds per person. The per capita consumption
of processed cranberries increased to 1.70 pounds per person in 1994.
In 1994, total domestic production was 4,682,000 barrels, while total
sales increased to 4,692,507 barrels. This increase in sales and per
capita consumption, accompanied by increasing grower prices provided
further incentives for growers to increase plantings and productivity.
However, after 1994, sales of processed cranberries began to stagnate.
Stagnant sales of processed cranberry products continued until 2000. In
the 2000 crop year, per capita consumption of processed cranberries
increased to 1.87 pounds and sales of processed cranberries increased
to over 5 million barrels for the first time.
About 92 percent of the cranberry crop is processed, with the
remainder sold as fresh fruit. In the 1950's and early 1960's, fresh
production was considerably higher than it is today, and in many years,
constituted as much as 25 to 50 percent of total production. Fresh
production began to decline in the 1980's, while processed utilization
and output soared as cranberry juice products became popular. Today,
fresh fruit claims only about 8 percent of total production. Three of
the top five States produce cranberries for fresh sales. New Jersey and
Oregon produce fruit for processed products only. There has been
tremendous growth in processed cranberries, while the fresh market has
remained relatively stable.
When supply is greater than demand, inventories are carried over
into the next crop year. Carryin inventories are reported by the
Committee. In many agricultural industries, modest levels of
inventories are believed to be desirable in situations of a late
harvest or a disastrous production year. From 1987 through 1997, annual
carryin inventories were relatively stable, averaging 1.1 million
barrels. Beginning with the 1998 crop, carryin inventories exceeded 2
million barrels. For the 2000 crop year, carryin inventories exceeded 4
million barrels. Large and increasing inventories provide an indication
of how far supply is outpacing demand. Larger inventories, beginning in
1997,
[[Page 69999]]
have resulted in prices paid to growers dropping dramatically.
From 1974 through 1996, prices trended up. Prices increased from
$11.00 per barrel in 1974 to $65.90 per barrel in 1996. Since 1996,
prices have decreased. Prices reached a recent low of $17.20 per barrel
in 1999. In 2001, prices are reported at $22.90 per barrel. The period
of increasing prices provided an incentive for producers to expand
planted acres and to increase yields. The price decline over the past
several crop years is due to the surplus situation which resulted from
the increase in planted acreage and yields and the lack of significant
sales increases to keep pace with increased production.
Grower prices do not vary greatly among the five major producing
States. This provides an indication that domestic market forces
similarly impact all U.S. cranberry growers. Further evidence that
prices for the five producing States follow very similar movements is
provided by computing the correlation coefficient for the five
producing States from 1960 to 2001. Correlation is a statistical
measure, which shows how variables are related and a figure of 1.0
would mean perfect correlation. The price correlation among the five
States is greater than 0.97.
Real prices are derived by deflating the actual (nominal) prices by
a price index (Prices Received by Farmers All Farm Products Index 1990-
92=100). Real prices have the effects of inflation removed. Real prices
show whether there has been any change in a commodity's price behavior
absent the effects of inflation. Real cranberry prices reached a peak
in 1997. Currently, real prices have fallen to levels similar to the
mid 1970's.
The value of production increased dramatically from 1960, reaching
a peak of $350 million in 1997. In 2000, the value of production fell
below $100 million for the first time since 1980. Between 1997 and
2001, growers lost 69 percent of the value of production due to the
surplus situation. The value of production has declined in all of the
major producing States.
With most agricultural commodities, there is a pronounced inverse
relationship between production and prices. When production is high,
prices are generally low and when production is low, prices are
generally high. From 1960 through 1996, prices and production are
positively correlated (the correlation coefficient is 0.93). However,
beginning in 1997, as production continued to increase, prices started
to decline and continued to decline as production increased in crop
years 1998 and 1999. Starting in 1996, supply began to outpace demand,
ultimately resulting in declining prices.
To help stabilize market supply and demand conditions, volume
regulation was introduced in 2000 and again in 2001, marking the first
time in 30 years that such regulations were implemented. Crop sizes in
2000 and 2001 have been reduced by the use of the producer allotment
program, which limits the amount of product that a producer can deliver
to a handler. Reduced crop sizes for these two crop years, combined
with increased sales and USDA purchases, have resulted in a reduction
of inventories.
In an industry such as cranberries, where the product can be stored
for long periods of time, volume control is a method that can be used
to reduce supplies so that they are more in line with market needs.
Large inventories are costly to maintain and, with the outlook for
continued high production levels, these inventories are difficult to
market. Producers may not receive full payment for cranberries
delivered to storage for several years, and storage costs are deducted
from their final payment.
The demand for cranberries is inelastic. A producer allotment
program results in a decrease in supply because producers can only
deliver a certain portion of their past sales history. With an
inelastic demand, a small shift (decrease) in the supply curve results
in relatively large impacts on grower prices. An allotment program
results in increasing grower prices and grower revenues.
The level of unsold inventory, the current capacity to produce in
excess of expected demand, and continuing low grower prices have
resulted in the industry debating various alternatives under their
marketing order.
Reestablishment of Districts and Reapportionment of Grower Membership
Among the Districts
The proposed amendment to authorize the Committee to reestablish
and/or reapportion districts would give the Committee greater
flexibility in responding to changes in grower demographics and
district significance in the future. This authority would allow the
Committee to recommend changes through informal rulemaking rather than
through an order amendment. The proposal includes specific criteria to
be considered prior to making any recommendations.
This proposed authority does not change the districts. It only
authorizes the Committee to recommend changes more efficiently. No
additional administrative costs are anticipated with this proposed
amendment. This proposal should be favorable to both large and small
entities.
Development of Marketing Policy
Section 929.46 of the order requires the Committee to develop a
marketing policy each year as soon as practicable after August 1. In
its marketing policy, the Committee projects expected supply and market
conditions for the upcoming season. The marketing policy should be
adopted before any recommendation for regulation, as it serves to
inform USDA and the industry, in advance of the marketing of the crop,
of the Committee's plans for regulation and the bases therefore.
Handlers and growers can then plan their operations in accordance with
the marketing policy.
The Committee is currently required to consider nine criteria in
developing its marketing policy. The criteria include such items as
expected production, expected demand conditions, and inventory levels.
This rule recommends removing criteria not considered to be relevant in
making a decision on the need for volume regulation.
The marketing order section of the order also states that the
Committee must estimate the marketable quantity necessary to establish
a producer allotment program by May 1, and must submit its marketing
policy to USDA after August 1. These dates are inconsistent with the
dates by which the Committee must recommend a volume regulation (if one
or both are deemed necessary) for the upcoming crop. USDA is
recommending that both dates be removed.
These changes are non-substantive in nature. They remove
unnecessary criteria and obsolete dates from the order. As such, they
will have no economic impact on growers or handlers.
Sales History Calculations Under the Producer Allotment Program
The proposed amendment to modify the method for calculating sales
histories would provide growers with additional sales histories to
compensate them for expected increases in yields on newer acres during
a year of volume regulation, which would result in sales histories more
reflective of actual sales. This proposed amendment would also allow
more flexibility in recommending changes to the sales history formula
and add the authority to calculate fresh and processed cranberries
separately.
The proposed amendment to the sales history calculations would
benefit growers, especially growers who
[[Page 70000]]
planted some or all of their acreage within the previous 5 years. The
proposal would also help ensure that growers with mature acres who also
have newer acreage and growers with only newer acres are treated
equitably.
During the 2000 volume regulation, many growers, particularly those
with new acreage 4 years old or less, indicated that the method of
calculating sales history placed them at a disadvantage because they
realized more production on their acreage than their sales history
indicated. With the volume of new acres within the industry, this would
affect many growers.
The Committee determined that something needed to be done to
address the concerns associated in the 2000 crop year with growers with
newer acreage. The Committee discussed a number of approaches for
estimating sales history on new acres. One suggestion was to allow
growers with newer acreage to add a percentage of the State average
yield to their sales history each year up to the fourth year. The
example presented was that acreage being harvested for the second time
during a year of volume regulation would receive a sales history that
was 25 percent of the State average yield, a third year harvest would
receive 50 percent of State average yield, and a fourth year harvest
would receive 75 percent of State average yield. Although this method
would address some of the problems experienced in 2000, it was
determined that the method established by this action would be simpler
and more practical for growers to obtain the most realistic sales
history.
This action addresses grower concerns regarding determination of
their sales histories. The method provides additional sales history for
growers with newer acres to account for increased yields for each
growing year up to the fifth year by factoring in appropriate
adjustments to reflect rapidly increasing production during initial
harvests. The adjustments are in the form of additional sales histories
based on the year of planting.
An appeals process would be established in crop years when volume
regulation is used for growers to request a redetermination of their
sales histories. For the 2000-2001 volume regulation, over 250 appeals
were received by the appeals subcommittee (the first level of review
for appeals). In 2001-2002, a total of 49 appeals were filed. The
decrease in appeals filed was a direct result of the formula for
calculating sales histories that was implemented in 2001. This proposed
amendment represents a generic version of the formula that was used in
2001.
This proposal, if adopted, would not impose any immediate
regulations on large or small growers and handlers. It would only
modify the formula for calculating sales histories in the event volume
regulations are implemented in the future. Adopting this proposal would
benefit small businesses by allowing them more flexibility in receiving
a more equitable sales history if volume regulations are recommended
and implemented in future years. If this proposal is adopted, growers
and handlers would know specifically how sales histories are calculated
so they can be informed and business decisions can be made ahead of the
future season.
The proposal also includes that sales histories, starting with the
crop year following adoption of this amendment, would be calculated
separately for fresh and processed cranberries. Fresh and organic fruit
were exempt from the 2000 and 2001 volume regulations because it was
determined that they did not contribute to the surplus. In both years,
fresh fruit sales were deducted from sales histories and each grower's
sales history represented processed sales only. To have sales histories
more reflective of sales, the Committee proposed calculating separate
sales histories for fresh and processed cranberries. Also, in future
years, fresh cranberry sales could contribute to the surplus. This
proposed change would make sales history calculations more equitable.
These changes will have a positive effect on all growers and
handlers because they will result in a more equitable allocation of the
marketable quantity among growers. The proposal would be favorable to
both large and small entities.
Catastrophic Events That Impact Growers' Sales Histories
The proposed amendment would provide more flexibility in the
provision under the sales history calculations that compensates growers
with additional sales histories for losses on acreage due to forces
beyond the grower's control.
The current provisions require that if a grower has no commercial
sales from acreage for 3 consecutive crop years due to forces beyond
the grower's control, the Committee shall compute a level of commercial
sales for the fourth year for that acreage using an estimated
production. The record revealed that this provision was too stringent
as evidenced by only one grower meeting these criteria in two years of
volume regulation.
The proposal would authorize the Committee to recommend rules and
regulations to allow for adjustments of a grower's sales history to
compensate for catastrophic events that impact a grower's crop. The
Committee would recommend procedures and guidelines to be followed in
each year a volume regulation is implemented. The proposed amendment
would have a positive impact on both large and small growers as the
Committee would be in a position to compensate more growers who
experienced losses due to catastrophic events than the current order
provides.
Remove Specified Dates Relating to Issuing Annual Allotments
The order currently provides that when a producer allotment
regulation is implemented, USDA establishes an allotment percentage
equal to the marketable quantity divided by the total of all growers'
sales histories. The allotment percentage is then applied to each
grower's sales history to determine that individual's annual allotment.
All growers must file an AL-1 form with the Committee on or before
April 15 of each year in order to receive their annual allotments. The
Committee is required to notify each handler on or before June 1 of the
annual allotment that can be handled for each grower whose crop will be
delivered to such handler.
Experience during the 2000 and 2001 crop years has proven that
maintaining a specified date by which growers are to file a form to
qualify for their allotment and for the Committee to notify handlers of
their growers' annual allotments has been difficult. This proposed
change would delete the specified dates and allow the Committee to
determine, with the approval of USDA, more appropriate dates by which
growers are to file forms and the Committee is to notify handlers of
their growers' annual allotments. The Committee would like to establish
dates that the industry can realistically meet each season when a
volume regulation is implemented.
Because volume regulation was not recommended until the end of
March during 2000 and 2001, growers had difficulty in submitting the
required reports in a timely manner. Additionally, the rulemaking
process to establish the allotment percentage was not completed by June
1. Therefore, the Committee was unable to notify handlers of their
growers' allotment by the specified deadline. With this proposed
amendment, dates could be established in line with the timing of the
recommendation and establishment of volume regulation. Allowing the
[[Page 70001]]
Committee to set dates that can realistically be met by the industry
would better serve the purposes of the marketing order. Thus, this
modification should benefit the entire industry, both large and small
entities.
The Committee also recommended clarifying the explanation of how an
allotment percentage is calculated. Currently, section 929.49(b) states
that such allotment percentage shall equal the marketable quantity
divided by the total of all growers' sales histories. It does not
specify that ``all growers'' sales histories' includes the sales
histories calculated for new growers. This rule proposes a
clarification to ensure that total sales histories (including those of
new growers) are used in this calculation. To the extent this
clarification makes the terms of the order easier to understand, it
should benefit cranberry growers and handlers.
This rule also proposes revising the information to be submitted by
growers to qualify for an annual allotment. Currently, all growers must
qualify for allotment by filing with the Committee a form including the
following information: (1) The location of their cranberry producing
acreage from which their annual allotment will be produced; (2) the
amount of acreage which will be harvested; (3) changes in location, if
any, of annual allotment; and (4) such other information, including a
copy of any lease agreement, as is necessary for the Committee to
administer the order. Such information is gathered by the Committee on
a form specified as the AL-1 form.
The proposed amendment would modify these criteria by not including
information that is not pertinent. Currently, growers are assigned a
grower number and the amount of acreage on which cranberries are being
produced is maintained. The location of the cranberry producing acreage
is not maintained. Therefore, there is no need to specify this
information on the form. It is also unnecessary to include changes in
location, if any, of growers' annual allotment including the lease
agreement. Annual allotment is linked to a grower's cranberry producing
acreage and, since the acreage cannot be moved from one location to
another, information on changes in location is not relevant. Therefore,
the information to be submitted by growers is being recommended for
revision by removing the information that the Committee does not need
to operate a producer allotment program. Other information that is
currently requested (including identifying the handler(s) to whom the
grower will assign his or her allotment) would remain unchanged.
The AL-1 form was modified (and approved by OMB) prior to the 2001
volume regulation. At that time, the Committee did not include this
information on the form. Therefore, there is no reporting burden change
as a result of this amendment. This change removes the unnecessary
information from the order language.
Clarify How the Committee Allocates Unused Allotment to Handlers
The proposed amendment would change the method by which the
Committee allocates unused allotment to handlers having excess
cranberries to proportional distribution of each handler's total
allotment.
Currently under the producer allotment volume regulation features
of the order, section 929.49(h) provides that handlers who receive
cranberries more than the sum of their growers' annual allotments have
``excess cranberries'' and shall notify the Committee. Handlers who
have remaining unused allotment are ``deficient'' and shall notify the
Committee. The Committee shall equitably distribute unused allotment to
all handlers having excess cranberries.
The proponents testified that there has been a debate in the
industry on the interpretation of what equitable distribution means and
how it should be accomplished. To add specificity, the Committee
proposed replacing the words ``equitably distribute'' with
``proportional to each handler's total allotment''.
The proponents testified that the distribution of unused allotment
would only be given to those handlers who have excess fruit and are in
need of allotment to cover that fruit. Allotment is only distributed
proportionately to handlers when there are more requests for unused
allotment than available unused allotment. In this situation, handlers
would then receive the allotment in proportion to the volume of
cranberries they handle.
This amendment would have a positive impact on large and small
handlers since handlers may be able to acquire the additional allotment
they need for their excess berries than they would have under the
current provisions.
Growers' Assignment of Allotment if No Crop Is Produced
The proposed amendment to authorize growers who choose not to
produce a crop in years of volume regulation to not assign their
allotment to their handler would provide growers with flexibility to
decide what happens with their unused allotment. Currently, the order
requires the allotment to go to the handlers.
Prior to implementing this provision, the Committee would consider
what would happen to the unused allotment and recommend, with USDA
approval, implementing regulations. This amendment would benefit
growers who choose not to grow a crop by providing them with input into
the allocation of that allotment. This proposal should be favorable to
both large and small growers.
Transfers of Allotment During Years of Volume Regulation
The proposed amendment would allow growers to transfer allotment
during a year of volume regulation and allow the sales history to
remain with the lessor when there is a total or partial lease of
cranberry acreage to another grower. Currently, growers are not allowed
to transfer allotment to other growers. The only option available to
growers to accomplish a transfer of allotment is to complete a lease
agreement between the two growers. This involves filing paperwork,
including signed leases and only transferring the sales history, not
the allotment. Many of the lease agreements were initiated during the
two years of volume regulation and created a burden on Committee staff.
It also made recalculations of growers sales histories difficult.
This proposal would simplify the process for growers by authorizing
growers to transfer all or part of his or her allotment to another
grower. Safeguards are in place to ensure that the transferred
allotment remains with the same handler unless consent is provided by
both handlers. In addition, the Committee may establish dates by which
transfers may take place.
This proposal would be beneficial to both large and small growers
as it provides flexibility in transferring allotment.
Implementing Both Forms of Volume Regulation in the Same Year
The proposal to require authorizing both forms of volume regulation
in the same year was proposed in accordance with an amendment to the
Act in November 2001. The amendment specified that USDA is authorized
to implement a producer allotment program and a handler withholding
program in the same crop year through informal rulemaking based on a
recommendation and supporting economic analysis submitted by the
Committee. If such recommendation is made by the Committee, it must be
made no later than March 1 of each
[[Page 70002]]
year. The amendment would provide additional flexibility to the
Committee when considering its marketing policy each year.
This proposal should be favorable to both large and small entities.
Dates for Recommending Volume Regulation
The proposal to require the Committee to recommend a producer
allotment program by March 1 each year would allow growers to alter
their cultural practices in an efficient manner in the event that a
producer allotment is implemented. Growers have indicated that they
need to know as soon as possible whether the Committee is going to
recommend a regulation since a producer allotment program requires
growers to only deliver a portion of their crop. The Committee's
decision influences whether growers can cut back on purchases of
chemicals, fertilizer or possibly take acreage out of production. This
can result in growers' savings on their cost of production. The later
the decision is made by the Committee to regulate, the chances are
greater that growers will have already invested these costs on their
acreage.
The proposal to require the Committee to recommend a handler
withholding program by August 31 each year would provide the Committee
staff with ample time to prepare reports based on handler inventory
reports and crop estimates from the National Agricultural Statistics
Service (NASS). Because the withholding program does not impact grower
deliveries, this date is more appropriate for making an informed
decision on whether to recommend this type of program.
Another proposal would authorize both forms of volume regulation to
be implemented each year in accordance with an amendment to the Act
authorizing such proposal. The amendment states that if both forms of
volume regulation are recommended, it should be done by March 1.
Therefore, this proposed amendment would require that if both forms of
regulation are recommended in the same year that it be recommended by
March 1. The same reasoning for recommending a producer allotment alone
would apply to this proposed requirement. Growers need to know as soon
as possible if production costs can be mitigated if a producer
allotment is recommended. All growers, both large and small, should
benefit from this change.
Exemptions From Order Provisions
The proposed amendment recommending that specific authority be
added to exempt fresh, organic or other forms of cranberries from order
provisions would clarify the current language and provide guidelines
for the specific forms or types of cranberries that could be exempted.
Fresh and organic cranberries were exempted from the 2000 and 2001
volume regulations under the minimum quantity exemption authority of
the order. This proposal would merely clarify that authority in the
order to ensure that fresh and organic and other forms of cranberries
could be exempted if warranted in the future. This proposal should be
beneficial to large and small entities.
Expand Outlets for Excess Cranberries
The proposed amendment to the outlets for excess cranberries
provisions would broaden the scope of noncommercial and noncompetitive
outlets for excess cranberries. Adoption of this proposal would provide
the Committee, with USDA's approval, the ability to recognize and
authorize the use of additional or new noncommercial and/or
noncompetitive outlets for excess cranberries through informal
rulemaking.
Because competitive markets can change from season to season and
new and different research ideas can be devised, the Committee would
develop guidelines each year a volume regulation is recommended that
would be used in determining appropriate outlets for excess
cranberries. This would benefit growers and handlers by providing
flexibility in determining outlets. This proposal would be particularly
useful in determining which foreign markets can be used as outlets for
excess cranberries. Foreign markets are one area where growth is
occurring and demand is increasing. Exports of cranberries have
increased from 184,000 barrels in 1988 to 824,000 barrels in 2000. Both
large and small entities should benefit from this proposal.
General Withholding Provisions
Section 929.54 of the order sets forth the general parameters
pertaining to withholding regulations. Under this form of regulation,
free and restricted percentages are established, based on market needs
and anticipated supplies. The free percentage is applied to handlers'
acquisitions of cranberries in a given season. A handler may market
free percentage cranberries in any chosen manner, while restricted
berries must be withheld from handling.
The withholding provisions of the order were used briefly over
three decades ago. Although the cranberry industry has not used the
authority for withholding regulations in quite some time, the record
evidence supports maintaining this tool for possible future use.
However, substantive changes in industry practices have rendered
current withholding provisions in need of revision. Thus, this decision
recommends updating and streamlining those provisions.
The record shows that at the time the withholding provisions were
designed, the cranberry industry was much smaller, producing and
handling much lower volumes of fruit than it does now. In 1960,
production was about 1.3 million barrels; by 1999, a record 6.3 million
barrels were grown. A much higher percentage of the crop was marketed
fresh--about 40 percent in the early 1960's versus less than 10 percent
in recent years.
Changes in harvesting and handling procedures have been made so the
industry is better able to process higher volumes of cranberries. Forty
years ago, virtually all cranberries were harvested dry, and water
harvesting was in an experimental stage of development. Water
harvesting is currently widespread in certain growing regions;
cranberries harvested under this method must be handled immediately as
they are subject to rapid deterioration.
In the early 1960's, handlers acquired some cranberries that had
been ``screened'' to remove extraneous material that was picked up with
the berries as they were being harvested, and ``unscreened'' berries
from which the extraneous material (including culls) had not been
removed. The handler cleaned some of the unscreened berries immediately
upon receipt, while others were placed in storage and screened just
prior to processing.
The order currently provides that when a withholding regulation is
implemented, the restricted percentage will be applied to the volume of
``screened'' berries acquired by handlers. Since the term ``screening''
is obsolete, all references to that term are being deleted.
The order also currently provides that withheld cranberries must
meet such quality standards as recommended by the Committee and
established by USDA. The Federal or Federal-State Inspection Service
must inspect such cranberries and certify that they meet the prescribed
quality standards. The intent of these provisions is, again, to ensure
that the withholding regulations reduce the volume of cranberries in
the marketplace by not allowing culls to be used to meet withholding
obligations. The inspection and certification process is also meant to
assist the Committee in monitoring the proper disposition of
[[Page 70003]]
restricted cranberries, thereby ensuring handler compliance with any
established withholding requirements.
The need for inspection and certification of withheld cranberries
is not as great today as in the past. Additionally, inspection and
certification could be costly, particularly since most withheld berries
would subsequently be dumped, generating no revenue for growers or
handlers. The inspection process could also inordinately slow down
handling operations, and there could be differential impacts of such
requirements because some handling facilities operate in ways that lend
themselves to more efficient methods of pulling representative samples
(for inspection purposes) than others.
Removing the requirements for mandatory inspection and
certification requirements would allow the industry to develop
alternative safeguards to achieve its objectives at lower cost. While
the inspection process may be deemed the best method by the Committee,
this proposal provides flexibility by allowing the Committee to
consider other, less costly alternatives.
Eliminating the mandatory inspection under the withholding program
and deleting obsolete terminology would make the program more flexible
for the industry and allow the Committee to operate more efficiently.
As such, this amendment should benefit cranberry growers and handlers
by providing an additional tool they could use in times of oversupply.
Buy-Back Provisions Under the Handler Withholding Program
Section 929.56 of the order, entitled ``Special provisions relating
to withheld (restricted) cranberries,'' sets forth procedures under
which handlers may have their restricted cranberries released to them.
These provisions are commonly referred to in the industry as the buy-
back provisions.
Under the current buy-back provisions, a handler can request the
Committee to release all or a portion of his or her restricted
cranberries for use as free cranberries. The handler request has to be
accompanied by a deposit equal to the fair market value of those
cranberries. The Committee then attempts to purchase as nearly an equal
amount of free cranberries from other handlers. Cranberries so
purchased by the Committee are transferred to the restricted percentage
and disposed of by the Committee in outlets that are noncompetitive to
outlets for free cranberries. The provision that each handler deposit a
fair market price with the Committee for each barrel of cranberries
released and that the Committee use such funds to purchase an equal
amount or as nearly an equal amount as possible of free cranberries is
designed to ensure that the percentage of berries withheld from
handling remains at the quantity established by the withholding
regulation for the crop year.
The Committee has the authority to establish a fair market price
for the release of restricted cranberries under the buy-back program.
The money deposited with the Committee by handlers requesting release
of their restricted cranberries is the only money the Committee has
available for acquiring free cranberries. Thus, the amount deposited
must be equal to the then current market price or the Committee will
have insufficient funds to purchase a like quantity of free
cranberries.
The Committee is required to release the restricted cranberries
within 72 hours of receipt of a proper request (including the deposit
of a fair market value). This release was made automatic so that
handlers would be able to plan their operations, and very little delay
would be encountered.
If the Committee is unable to purchase free berries to replace
restricted cranberries that are released under these provisions, the
funds deposited with the Committee are required to be returned to all
handlers in proportion to the volume withheld by each handler.
This rule proposes authorizing direct buy-back between handlers.
With this option, a handler would not have to go through the Committee
to have his or her restricted berries released. Instead, that handler
could arrange for the purchase of another handler's free cranberries
directly. All terms, including the price paid, would be between the two
parties involved and would not be prescribed by the Committee. This
change would add flexibility to the order and could offer a more
efficient method of buying back cranberries. Also, no Committee
administrative costs would be incurred. Handlers would have the option
of using this method, or they could buy back their berries through the
Committee, as is currently provided.
There are four criteria the Committee needs to consider in
establishing a fair market price under the buy-back program for
purchasing restricted cranberries. These include prices at which
growers are selling their cranberries to handlers; prices at which
handlers are selling fresh berries to dealers; prices at which
cranberries are being sold to processors; and prices at which the
Committee has purchased free berries to replace released restricted
berries.
This action proposes adding two criteria to the list--the prices at
which handlers are selling cranberry concentrate and growers' costs of
production. Both of these items are relevant to consider in determining
a fair market value. Consideration of these criteria by the Committee
would benefit handlers.
Under the current buy-back provisions, handlers are required to
deposit with the Committee the full market value of the berries they
are asking to be released. This decision proposes a different payment
schedule so that handlers would not have to make a large cash payment
prior to the sale of their restricted cranberries. Twenty percent of
the total amount would be due at the time of the request, with an
additional 10 percent due each month thereafter. This change would
facilitate handlers buying back their restricted berries by reducing
the costs of such a venture. Thus, handlers should benefit.
If the Committee is unable to purchase free berries under the buy-
back system, it is currently required to refund the money back to all
handlers proportionate to the amount each handler withheld under
regulation. USDA is proposing a modification that would provide that
the money be returned to the handler who deposited it for distribution
to the growers whose fruit was sold. This should benefit growers whose
fruit was sold. Additionally, this change could provide an incentive
for handlers to make available free cranberries for purchase to replace
restricted cranberries that are released under the buy-back provisions.
For these reasons, this change should benefit the cranberry industry.
Paid Advertising
The proposal to add authority for paid advertising under the
research and development provisions of the order would provide the
Committee the flexibility to use paid advertising to assist, improve,
or promote the marketing, distribution, and consumption of cranberries
in either its export or domestic programs. The authority for
authorizing paid advertising under the cranberry marketing order was
added to the Act in October, 1999.
If a paid advertising program is recommended by the Committee, it
could entail an increase in assessments to administer the program,
which would have an impact on handlers. According to testimony, it is
the Committee's intent to use paid advertising as a means
[[Page 70004]]
to provide consumers with relevant information to the health-related
benefits of cranberries. Paid advertising authority is viewed as an
additional tool available to the Committee to meet its objectives of
increasing the consumption of cranberries and cranberry products. It is
anticipated that any additional costs incurred to all handlers, both
large and small, would be outweighed by the benefits of increasing
demand for cranberries. Any paid advertising program and increase of
assessment must proceed through notice and comment rulemaking before it
is implemented.
Definition of Handle
The proposal to modify the definition of handle under the order
would clarify that the transporting of fresh cranberries to foreign
markets other than Canada is also considered handling. This proposed
change would merely clarify language.
The proposal would also modify the definition by including the cold
storage or freezing of withheld cranberries as an exemption from
handling for the purpose of temporary cold storage during periods when
withholding provisions are in effect prior to their disposal. The
provision already applies this exemption to excess cranberries under
the producer allotment program and it was determined that handlers
could benefit from this provision under a withholding program as well.
This would benefit large and small handlers by allowing temporary
storage of withheld cranberries, which could be critical during a
withholding volume regulation.
Reporting Requirements
The proposal to modify the reporting requirements would relocate a
paragraph on a grower reporting requirement to the section on Reports
for ease of referencing and is only administrative in nature.
The proposal would also add more specific information under the
grower reporting provisions to incorporate additional information
necessary from growers if the sales history and transfer of allotment
proposals are adopted. This will assist the Committee in assembling the
most accurate and effective information as possible. Orders with
producer allotment programs are unique in that specific information is
needed from growers in order to implement a program. Both large and
small growers benefit from reporting the information by being provided
accurate and timely sales histories that reflect their production and
allow equitable allotments to be determined on their acreage during
years of volume regulation. The failure of growers to file these
reports could be detrimental to them in the event volume regulations
are implemented. Any additional reporting requirements resulting from
adoption of this proposed amendment would be submitted to the Office of
Management and Budget prior to implementation.
The proposal would also include that handlers report on the
quantities of excess cranberries as well as withheld cranberries. This
is a clarification and administrative in nature. The proposal would
also simplify and clarify the provision on verification of reports. The
proposal should be favorable to large and small growers.
Obsolete Provision
The proposal to delete an obsolete provision relating to
preliminary regulation is administrative in nature and is being
recommending for adoption. There would be no impact on growers or
handlers.
Proposed Amendments Not Recommended for Adoption in This Decision
Four proposed amendments are not being recommended for adoption.
Therefore, there would be no economic impact resulting from these
proposals.
The Recommended Decision erroneously indicated that five proposed
amendments were not being recommended for adoption. The correct number
of proposed amendments not being recommended for adoption is four (as
discussed in Material Issues numbered 15, 16, 17 and 19).
The proposed amendments not recommended would have: (1)
Incorporated a handler marketing pool and/or buy-back provisions to the
producer allotment program (Material Issue 15); (2) Authorized an
exemption from order provisions for the first 1,000 barrels of
cranberries produced by each grower (Material Issue 16); (3) Expanded
the production area to include the States of Maine and Delaware and the
entire State of New York (Material Issue 17); and (4) Modified the
definition of cranberry by adding the species Vaccinium oxycoccus to
the definition (Material Issue 19).
Conclusion
The proposed amendments would not have a disproportionate economic
impact on a substantial number of small entities. Although the proposed
amendments may impose some additional costs and requirements on
handlers, it is anticipated that the amendments will enhance the
administration and functioning of the cranberry marketing order
program. Therefore, any additional costs would be offset by the
benefits derived from improved, more effective functioning of the order
benefiting handlers and producers alike.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1980 (44 U.S.C.
35), any reporting and recordkeeping provisions that would be generated
by implementing the proposed amendments would be submitted to the
Office of Management and Budget (OMB).
Many of the changes have no reporting ramifications if they are
established. As examples, adding the authority for redistricting and
reapportionment of the Committee, changing the deadlines for filing
volume regulations, or adding the authority for paid advertising would
not create any additional reporting requirements.
Some of the proposed amendments would not generate any reporting
burdens by amendment of the order alone. If these authorities were
added to the order, reporting burdens would occur at the time
regulations were established to activate the order authority. Examples
of these amendments are those that impact the two forms of volume
regulations. If a producer allotment volume regulation were
implemented, regulations would be needed to set forth any forms of
cranberries exempt from the volume regulation or what outlets (and
appropriate safeguards) would be established for excess cranberries.
Also, at the time of recommendation, the process for making adjustments
for catastrophic events would need to be recommended by the Committee.
In these instances, the reporting burdens, if any, would not exist
until the volume regulation was in place. In addition, if a handler
withholding volume regulation is established, additional reporting
burdens may be necessary to cover the handler-to-handler buy-back
program.
Reporting burdens that would be generated by these amendments are
the grower reporting requirements. However, prior to the 2001 volume
regulation, the Committee modified the AL-1 form to accommodate needed
requirements for implementing the producer allotment volume regulation.
Specifically, the way growers' sales histories were calculated that
is being recommended to be added to the order was used in the 2001
volume regulation. The AL-1 form was modified at that time (and
approved by OMB) to include
[[Page 70005]]
the additional information required, such as year of planting and year
of first harvest.
Likewise, growers are already reporting fresh and processed sales
separately on form GSAR-1. This information was included on the form
prior to the 2001 volume regulation to accommodate the regulations.
The amendment to remove dates regarding issuance of annual
allotments does not require a modification of the form as no dates are
specified on the form.
Therefore, there would be no modification to reporting and
recordkeeping burdens generated from these proposed amendments at this
time. Current information collection requirements for Part 929 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.
USDA has not identified any relevant Federal rules that duplicate,
overlap or conflict with this proposed rule. These amendments are
designed to enhance the administration and functioning of the marketing
order to the benefit of the industry.
Committee meetings regarding these proposals as well as the hearing
dates were widely publicized throughout the cranberry industry, and all
interested persons were invited to attend the meetings and the hearing
and participate in Committee deliberations on all issues. All Committee
meetings and the hearing were public forums and all entities, both
large and small, were able to express views on these issues. Finally,
interested persons are invited to submit information on the regulatory
and informational impacts of this action on small businesses.
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; Discussion of Exceptions
The material issues, findings and conclusions, rulings, and general
findings and determinations included in the Recommended Decision set
forth in the April 28 issue of the Federal Register (69 FR 23330) are
hereby approved and adopted subject to the following additions and
modifications.
Rulings on Exceptions
Material Issue Number 1--Reestablishment of Districts and
Reapportionment of Committee Membership Among Districts
Based on the exception filed, the findings and conclusions under
material issue 1 of the Recommended Decision are revised by adding the
following eight paragraphs after the fifteenth paragraph of that
section:
WSCGA filed a statement supporting the recommendation and
reiterated their position that Wisconsin is underrepresented and New
Jersey is overrepresented. Further, the WSCGA is of the view that the
committee should directly reallocate membership based upon current
production.
CCCGA filed an exception opposing reestablishing districts without
a committee recommendation for a hearing on the issue. It reiterated
its concerns that Wisconsin representatives would immediately attempt
to remove representation from New Jersey and dilute representation in
Massachusetts. CCCGA believes that if that happens, Wisconsin
representatives would have too much control over the Committee, which
would have a negative impact on smaller States. In addition, CCCGA does
not believe the cooperative seats on the Committee should decide the
fate of the independent seats.
The Committee is composed of 13 grower members and 1 public member.
District 3, which includes the State of Wisconsin, is assigned two
independent seats. All actions of the Committee require at least 10
concurring votes if the public member does not vote and 11 concurring
votes if the public member votes. The Committee was specifically
devised in this manner to ensure that Committee recommendations are
supported by a majority of the industry, which includes both
cooperative and non-cooperative members. If a motion is made to
reapportion the districts, 10 concurring votes are needed.
The decision to increase the Committee to its current level was
part of the same hearing. That portion of the proposed amendments was
expedited and the Secretary's Decision and Referendum Order was
published in the Federal Register on December 12, 2003. In that
decision, USDA concluded that providing an additional seat for District
3 at the exclusion of membership from Districts 2 or 4 was not
desirable. It was determined important to take into account the
significance of the smaller growing regions, while recognizing that the
potential scale of the impact increases with the volume of cranberries
produced and regulated.
Having 2 members from the districts that represent Wisconsin and
Massachusetts reasonably recognized the fact that those districts have
a greater economic interest at stake when more significant actions,
such as volume regulation, are considered by the Committee. Allowing
the smaller volume districts to have 1 member recognizes their
significance to the industry. Using volume alone as a means of
determining Committee membership does not take into consideration
smaller growing regions. USDA further concluded that opportunities must
be provided for input by all segments of the industry.
As stated previously, notice and comment rulemaking would be
necessary to implement any modifications in district representation.
All growers and handlers would be provided the opportunity to comment
and all comments would be considered before issuing a final rule.
Also addressed previously is that this authority provides the
Committee the flexibility to address industry changes in a timely
manner. This flexibility is deemed beneficial to the Committee and the
industry.
Accordingly, the exception on this material issue filed by CCCGA is
denied.
Material Issue Number 2--Development of Marketing Policy
Based on two comments filed in support of this proposed amendment,
the findings and conclusions under material issue 2 of the Recommended
[[Page 70006]]
Decision are revised by adding the following one paragraph after the
eleventh paragraph of that section.
CCCGA and Clement Pappas, in their exceptions filed to the
Recommended Decision, supported USDA's recommendation to delete the
decision making dates from this section and modify the criteria to be
considered in recommending the marketing policy.
Material Issue Number 3--Revision of Sales History
Based on the exceptions filed, the findings and conclusions under
material issue 3 of the Recommended Decision are revised by adding the
following twelve paragraphs after the twenty-seventh paragraph of the
subsection in material issue 3 entitled Sales History Formula:
Clement Pappas, in its exception to the Recommended Decision,
supported USDA's recommendation to amend the sales history formula.
The Committee's exception suggested this section be modified to
better reflect the Committee's intent.
The Committee stated that the intent of modifying the sales
history calculations was to provide additional sales histories to
newer acres ``in years of volume regulation.'' The way the language
is currently proposed, the Committee would calculate sales histories
annually, which would include accommodating newer acres with
additional sales histories each year. Providing additional sales
history to newer acres is referred to throughout the industry as
``ramp-up.'' The Committee stated that ramp-up should only occur
during periods when a producer allotment regulation is established.
Paragraph (b) of Sec. 929.48 states that ``a new sales history
shall be calculated for each grower after each crop year (emphasis
added) using the formulas established in paragraph (a) of this
section, or such other formula(s) as determined by the Committee,
with the approval of the Secretary.''
The Committee believes paragraph (b) should be modified to state
``a new sales history shall be calculated for each grower during
periods when a producer allotment regulation has been established
prior to the beginning of the next crop year, using the formulas
established in paragraph (a) of this section, or such other
formula(s) as determined by the Committee, with the approval of the
Secretary.''
The intent of the ramp-up formula is to provide growers ``in
years of volume regulation'' with additional sales histories to
account for expected increases in yields on newer acres in order to
provide growers of these acres with a sales history more reflective
of their actual sales potential at the time of a volume regulation.
To require the Committee to provide the adjustment each year
regardless of whether a volume regulation is in effect would be
unnecessary.
The impact of a sales history assigned to new acreage would only
affect growers when a volume regulation is implemented. For example,
if the next volume regulation were implemented in 2008, growers who
planted new acres in 2003 would have a sales history reflective of
actual production in 2008 and would not need an adjustment on those
acres. However, if new acres were planted in 2007, the ramp-up
provisions should be applied to the new acres to provide this grower
an adjustment for those acres that are not at full production at the
time of the volume regulation.
It is concluded that the language in Sec. 929.48 should be
modified to clarify that adjustments for new acres is only applied
during years of volume regulation. It is intended that the Committee
would still compute sales histories annually for growers so any
modification to this provision should ensure that new sales
histories are calculated for growers each year. The Committee's
suggested modification would not require any sales histories to be
calculated until a volume regulation is implemented. Based on the
record, the Committee needs to maintain an annual sales history for
each grower based on their average production. To only compute sales
histories in years of volume regulation would deprive the industry
of critical information necessary to the mission of the Committee.
The Committee uses this information annually in development of its
marketing policy. Growers and handlers need to know this information
to plan their growing and marketing strategies. It is important that
the Committee continue to calculate sales histories annually. The
language is being modified to express that adjustments for newer
acres would only be authorized in years prior to any producer
allotment volume regulation.
Paragraphs (a)(3), (4) and (6) are being modified. Paragraph
(a)(3) will state that for growers with 5 years of sales history
from acreage planted or replanted 1 year prior to the first harvest
on that acreage, the sales history is computed by averaging the
highest 4 of the 5 years and in a year prior to a year of a producer
allotment volume regulation, shall be adjusted as provided in
paragraph (a)(6) of this section.
Paragraph (a)(4) will state that for a grower with 4 years or
less of sales history, the sales history will be computed by
dividing the total sales from that acreage by 4 and in a year prior
to a year of a producer allotment volume regulation, shall be
adjusted as provided in paragraph (a)(6) of this section.
Paragraph (a)(6) will specify that the adjustments will only be
applied in a year prior to a producer allotment volume regulation.
Paragraph (b) will not be modified.
The Committee's exception on this material issue is being
accepted. These changes will more accurately reflect the intent of
the industry and are supported by the record.
Material Issue Number 4--Catastrophic Events That Impact Growers--Sales
Histories
Based on the exceptions filed, the findings and conclusions under
material issue 4 of the Recommended Decision are revised by adding the
following five paragraphs after the sixteenth paragraph of that
section:
WSCGA and Clement Pappas, in their exceptions filed to the
Recommended Decision, supported the flexibility provided by USDA's
recommendation to amend this provision.
CCCGA also supported the flexibility that this provision provides
but was concerned that using the word ``catastrophic'' would be too
stringent of a test to meet in order to qualify for an adjustment. As
an example, CCCGA discussed a situation that impacted a Massachusetts
grower in 2003. The grower experienced pesticide resistance with a
severe insect pest called the cranberry weevil. This situation caused
this grower to experience a crop loss in excess of 50 percent. CCCGA
believed that this situation should be one where a grower would be
authorized an adjustment in their sales history but was concerned that
this type of event may not be classified as catastrophic.
The record supported that the Committee deliberated on this
provision at length and agreed that the word catastrophic was the
terminology that was preferred. They believed that allowances should be
made for serious events that impact growers' crops, and should not be
allowed for less serious events, such as a long rainy spell. In
addition, the computation of sales histories allows a ``bad'' year not
to be included in the computation if the acreage has 5 or more years of
sales history. Only 4 of the highest years are used to calculate the
sales history.
The record supported allowing the Committee to recommend, through
informal rulemaking, more specific determinations of what would
constitute a catastrophic event. Using the informal rulemaking
authority provides the Committee the flexibility to thoroughly discuss
the issue at Committee meetings and make recommendations.
Accordingly, no changes are being made to this provision. The
exception on this issue is denied.
Material Issue Number 7--Growers Who Do Not Produce a Crop During a
Year of Regulation and Assignment of Their Allotment
Based on the exceptions filed, the findings and conclusions under
material issue 7 of the Recommended Decision are revised by adding the
following eleven paragraphs after the eighth paragraph of that section:
Two exceptions addressed this material issue. Clement Pappas
requested that specificity be added to Sec. 929.49(f) to clarify that
this provision would not supercede contractual arrangements. Although
the hearing record disclosed that the amendment is
[[Page 70007]]
not intended to obviate contractual arrangements, the commenter
believes that the order language should specify such to ensure that
there is no confusion on this issue. The amendment specifies that
growers who do not grow a crop may choose not to assign their allotment
to a handler. The commenter believes that if many growers of one
handler opt to not assign their allotment, a handler's marketing and
sales program could be ruined.
Clement Pappas suggested adding a paragraph (k) to Sec. 929.49
stating ``With the exception of issuance of annual allotments, nothing
in this section shall be construed as superseding contractual
agreements between growers and handlers.'' As stated previously,
contractual arrangements between growers and handlers fall outside the
scope of the order.
Because contractual relationships between growers and handlers are
outside the scope of the order, the language requested to be included
by this commenter is not being added to this provision. Therefore, this
exception is denied.
The Committee's exception suggested adding the following sentence
at the end of paragraph (f) of Sec. 929.49: ``If a grower does not
specify how their annual allotment is to be apportioned among the
handlers, the committee will apportion such annual allotment equally
among those handlers they are delivering their crop to.'' The Committee
states that this addition was suggested at the hearing and there was no
opposition to its inclusion. In testimony, the Committee representative
stated that in the last two volume regulations, some growers who
delivered to more than one handler did not specify the breakdown of the
allotment. The Committee exception stated that this situation resulted
in delays in apportionment and caused disagreements among handlers.
This clarification has merit.
Paragraph (f) of Sec. 929.49 is being modified to include the
authority for the Committee to apportion the allotment among handlers
if the grower fails to advise the Committee. This portion of the
Committee's exception is being accepted.
The Committee also took exception to language in Sec. 929.49 and
believed that the language in paragraph (g) is in conflict with
paragraph (i) of the same section and paragraph (b) of Sec. 929.50.
The Committee explained that paragraph (g) of 929.49 states that
growers who do not produce cranberries equal to their computed annual
allotment shall transfer their unused allotment to such grower's
handlers. In Sec. 929.50(b) stated that a grower may transfer all or
part of his/her allotment to another grower. The Committee states these
provisions are in conflict with each other. The Committee suggested
changing the shall in Sec. 929.49(g) to may to correct the issue and
because of that, paragraph (i) covering growers who do not produce a
crop is not needed.
While it is agreed that there is a conflict between paragraph (g)
of Sec. 929.49 and paragraph (b) of Sec. 929.50, the Committee's
suggested change would not address the concern. If the word may were
substituted for shall in Sec. 929.49(g), growers would not be required
to account for 100 percent of their unused allotment. Record evidence
supports that for effective administration of the program, growers
should account for all of their unused allotment. If growers have the
option to deliver unused allotment to their handler or transfer unused
allotment to other growers, they could choose not to transfer all their
unused allotment. In that situation, it would be unclear what would
happen to the remainder of their allotment. Therefore, the language is
being modified to specify that growers shall transfer their unused
allotment to their handler unless it is transferred to another grower
in accordance with Sec. 929.50(b). In this way, any unused allotment
not transferred to other growers must be transferred to their handlers.
The Committee's exception also states that there is no need for
paragraph (i) where growers who choose not to grow a crop may choose
not to assign their allotment. This situation is not in conflict with
the provisions on transfers. This was included in the proposed order to
allow growers who choose not to grow a crop some flexibility in
assigning their allotment.
However, this option should also be included under paragraph (g) as
an option for transferring unused allotment to handlers. Therefore,
paragraph (g) of Sec. 929.49 is being further modified to state that
growers must transfer their unused allotment to their handler unless it
is transferred to another grower or if it is not assigned in accordance
with paragraph (i) of Sec. 929.49.
The Committee's exception is being accepted in part and denied in
part. Specifically, Sec. 929.49(f) and (g) are being modified to
address the points of the exception. The exception to remove paragraph
(i) of Sec. 929.49 is denied.
Material Issue Number 10--Dates for Recommending Volume Regulations
Based on the exception filed, the findings and conclusions under
material issue 10 of the Recommended Decision are revised by adding the
following two paragraphs after the ninth paragraph of that section:
Clement Pappas filed an exception expressing concern with
authorizing a later date than March 1 for recommending a producer
allotment program. The order language states that an allotment
percentage must be recommended by no later than March 1, unless
unforeseen circumstances deem a later date.
The commenter states that after March 1, growers have already
incurred significant costs to maintain their bogs and prepare for the
upcoming growing season. Record testimony supported that the March 1
date be flexible enough to allow an exception in the event of
unforeseen circumstances. Therefore, this exception is denied.
Material Issue Number 11--Exemptions From Regulations
Based on the exceptions filed, the findings and conclusions under
material issue 11 of the Recommended Decision are revised by adding the
following four paragraphs after the ninth paragraph of that section:
WSCGA supports this amendment. However, it suggests that the
description of how cranberries for fresh use are harvested be
corrected. The recommended decision stated that fresh cranberries are
dry harvested. WSCGA stated that in some growing areas in the eastern
U.S., cranberries for fresh use are dry harvested. However, in
Wisconsin, cranberries for fresh use are wet harvested. This exception
is being accepted to clarify the different ways cranberries for fresh
use are harvested.
Clement Pappas filed an exception stating that the language for
exempting varieties and types of cranberries from regulations is too
broad. The exception states that exemptions should be limited to niche
markets and not varieties. The commenter further stated that allowing
specific varieties to be exempted from order regulations creates a
loophole for abuse.
The language specifies that forms or types of cranberries can be
exempted from the regulations. Testimony did indicate that types of
cranberries could be extended to include varieties. The intent of this
amendment is to clarify that cranberries such as organic and fresh
cranberries can be exempted from order provisions if recommended by the
Committee and approved by USDA. In addition, other unforeseen markets
could develop and the Committee wanted the language broad enough to
cover these unforeseen situations. It is possible that an experimental
variety could be developed that the Committee
[[Page 70008]]
believed would benefit from being exempt.
This exception is being denied. The language should remain flexible
enough to allow for unforeseen markets that may develop that an
exemption from order requirements would benefit.
Material Issue Number 13--General Withholding Provisions
Based on the exception filed, the findings and conclusions under
material issue 13 of the Recommended Decision are revised by adding the
following two paragraphs after the seventeenth paragraph of that
section:
Clement Pappas filed an exception expressing general disapproval
for the withholding method of volume regulation. The commenter stated
that except for its use in withholding very small quantities of
cranberries, the withholding provisions are a poor method of volume
regulation in comparison to the producer allotment method of volume
regulation.
The record supports maintaining this method of volume regulation as
an additional tool for the industry in considering ways to minimize
oversupply of cranberries. Any withholding regulation would have to be
recommended by the Committee and approved by USDA. Accordingly, this
exception is denied.
Material Issue Number 14--Buy-Back Provisions Under the Handler
Withholding Program
Based on the exception filed, the findings and conclusions under
material issue 14 of the Recommended Decision are revised by adding the
following six paragraphs after the twenty-third paragraph of that
section:
The Committee filed an exception pertaining to the distribution of
funds collected under the buy-back provisions of the withholding
program.
The order currently provides for situations in which the funds
deposited with the committee by handlers to purchase unrestricted
cranberries are in excess of the funds used by the committee for this
purpose. In such situations, the excess funds are to be proportionately
refunded to the handlers on the basis of the volume of cranberries
withheld by each handler.
The recommended decision (and the notice of hearing) contained two
provisions related to expended funds under the buy-back program.
Paragraph (e) of Sec. 929.56 proposed amending this provision to
provide that any excess funds received by the committee accrue to the
committee's general fund. Paragraph (f) of that same section provides
that any unexpended funds be refunded to the handler that deposited the
funds. Proposed paragraph (f) also stated that the handler would then
equitably distribute the refund among the growers delivering
cranberries to that handler.
In its exception, the committee recommended that Sec. 929.56(e) be
changed to provide that any excess funds received by the committee
would accrue to the handler who deposited the funds for the release of
withheld cranberries to be distributed proportionately to the handlers'
growers affected by the volume regulation (the committee's suggested
revision in italics).
After further review of the record evidence, USDA finds that the
committee's exception has merit. The order should be consistent in its
provisions relative to excess funds received under the buy-back
program. Further, it is reasonable that such funds be refunded to those
persons from whom they were collected.
Thus, the committee's exception is being accepted. However, the
text of paragraph (e) has been slightly modified from the committee's
suggested text. Paragraph (e) of Sec. 929.56 has been modified
accordingly.
Material Issue Number 15--Handler Marketing Pool and Buy-Back Under the
Producer Allotment Program
Based on the exceptions filed, the findings and conclusions under
material issue 15 of the Recommended Decision are revised by adding the
following four paragraphs after the thirty-seventh paragraph of that
section:
Ocean Spray, in its exception filed to the Recommended Decision,
supported USDA's recommendation to not include a handler marketing pool
to the order.
Clement Pappas believes the handler marketing pool should be added
to the order. In its exception, the commenter stated that the proposed
amendment had broad industry support and was innovative. The commenter
stated that the recommended decision states that without resolution on
price and cohesiveness from all segments of the industry, the handler
marketing pool would not work. According to the commenter, these
standards are inappropriate for evaluating the handler marketing pool
because they are impossible to meet. If this standard were applied to
all amendments, none would pass. Finally, the commenter stated that
adequate justification was not provided and this amendment should be
allowed to be voted on in a referendum.
As stated previously in the Recommended Decision, this concept was
innovative and showed the potential to address concerns of handlers.
This issue was considered at the subcommittee level and agreement on
the pricing issue could not be achieved. There were wide-ranging
options put forth on how the pricing mechanism could work, each
benefiting one segment of the industry over another. Because of the
subcommittee's inability to gain consensus on this issue, a
recommendation was not made to the full committee. In addition, nothing
additional was presented on the hearing record to demonstrate how the
handler marketing pool could work effectively, particularly in view of
the outstanding pricing issue options.
Accordingly, this exception is denied.
Material Issue Number 17--Expansion of Production Area
Based on the exceptions filed, the findings and conclusions under
material issue 17 of the Recommended Decision are revised by adding the
following eleven paragraphs after the twenty-eighth paragraph of that
section:
There were six exceptions filed regarding the decision not to
expand the production area.
The comments included discussions that the entire industry benefits
from the operation of the marketing order, especially the promotion
activities. Thus, all growing areas should contribute to these efforts,
as well as participate in any volume regulation.
Two commenters stated that there are other States currently
included in the marketing order that produce minimal amounts of
cranberries. One commenter stated that most Massachusetts producers
have minimal acreage and low yields and for this reason, Massachusetts
growers should be exempt.
Two commenters stated that all growers compete for the same
markets. As an example, a commenter stated that Maine's involvement in
the ingredients market impacts all of the Northeast States that compete
in that market.
One commenter believed that USDA's analysis of future yields of
Maine cranberries is flawed, and there is the potential for Maine to
produce large volumes of cranberries in the future.
Three commenters did not believe that there is any differentiation
in the quality of Maine cranberries compared to those grown in other
States.
Two commenters discussed the importance of receiving data from all
producing States. The best way to ensure complete information is to
collect it under marketing order reporting requirements.
One commenter stated that USDA misinterpreted the Act's requirement
[[Page 70009]]
that a marketing order be limited in its application to the smallest
regional production area practicable.
One commenter stated that it is a rare occasion when consensus is
reached in the cranberry industry and that there is consensus that the
production area should be expanded. The commenter believes that USDA
should not deny such a strongly supported position by the industry.
Another commenter added that growers should be allowed to vote on this
issue in referendum.
The concerns raised in the exceptions have been thoroughly
considered. Many segments of the industry throughout this proceeding,
both within and outside the production area, have expressed opinions on
the expansion of the production area.
After consideration of the record, including the exceptions filed
on this material issue, USDA concludes that the production area should
not be expanded at this time as proposed by the Committee. The record
includes many factors concerning the determination of the appropriate
production area. These include production levels, the number of growers
in each State, the markets and the future potential of the industry. It
is determined that expanding the production area at this time is not
necessary for the effective operation of the marketing order and thus
would not be consistent with the Act.
Accordingly, the six exceptions filed on this material issue are
denied.
In arriving at the findings and conclusions and the regulatory
provisions of this decision, the exceptions to the Recommended Decision
were carefully considered in conjunction with the record evidence. To
the extent that the findings and conclusions and the regulatory
provisions of this decision are at variance with the exceptions, such
exceptions are denied.
Order Amending the Marketing Agreement and Order
Annexed hereto and made a part hereof is the document entitled
``Order Amending the Order Regulating the Handling of Cranberries Grown
in the States of Massachusetts, Rhode Island, Connecticut, New Jersey,
Wisconsin, Michigan, Minnesota, Oregon, Washington, and Long Island in
the State of New York.'' 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 cranberries grown in the States of
Massachusetts, Rhode Island, Connecticut, New Jersey, Wisconsin,
Michigan, Minnesota, Oregon, Washington, and Long Island in the State
of New York is approved or favored by growers and processors, as
defined under the terms of the order, who during the representative
period were engaged in the production or processing of cranberries in
the production area.
The representative period for the conduct of such referendum is
hereby determined to be September 1, 2003, through August 31, 2004.
The agent of the Secretary to conduct such referendum is hereby
designated to be Kenneth G. Johnson, Regional Manager, DC Marketing
Field Office, Marketing Order Administration Branch, Fruit and
Vegetable Programs, AMS, USDA, 4700 River Road, Unit 155, Suite 2A04,
Riverdale, Maryland 20737; telephone (301) 734-5243.
List of Subjects in 7 CFR Part 929
Cranberries, Marketing agreements, Reporting and recordkeeping
requirements.
Dated: November 24, 2004.
A.J. Yates,
Administrator, Agricultural Marketing Service.
Order Amending the Order Regulating the Handling of Cranberries Grown
in the States of Massachusetts, Rhode Island, Connecticut, New Jersey,
Wisconsin, Michigan, Minnesota, Oregon, Washington, and Long Island in
the State of New York \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. 929 (7 CFR part 929), regulating the handling
of cranberries grown in the States of Massachusetts, Rhode Island,
Connecticut, New Jersey, Wisconsin, Michigan, Minnesota, Oregon,
Washington, and Long Island in the State of New York.
Upon the basis of the evidence introduced at such hearing and the
record thereof, it is found that:
(1) The marketing agreement and order, as amended, and as hereby
proposed to be further amended, and all of the terms and conditions
thereof, will tend to effectuate the declared policy of the Act;
(2) The marketing agreement and order, as amended, and as hereby
proposed to be further amended, regulate the handling of cranberries
grown in the production area in the same manner as, and is applicable
only to persons in the respective classes of commercial and industrial
activity specified in the marketing order upon which hearings have been
held;
(3) The marketing agreement and order, as amended, and as hereby
proposed to be further amended, are limited in application to the
smallest regional production area which is practicable, consistent with
carrying out the declared policy of the Act, and the issuance of
several orders applicable to subdivisions of the production area would
not effectively carry out the declared policy of the Act;
(4) The marketing agreement and order, as amended and as hereby
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 cranberries grown in the production area;
and
(5) All handling of cranberries grown in the production area as
defined in the marketing agreement and order, as amended, and as hereby
proposed to be further amended, 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 cranberries grown in the
[[Page 70010]]
States of Massachusetts, Rhode Island, Connecticut, New Jersey,
Wisconsin, Michigan, Minnesota, Oregon, Washington, and Long Island in
the State of New York, shall be in conformity to, and in compliance
with, the terms and conditions of the said order as hereby proposed to
be amended as follows:
The provisions of the proposed marketing agreement and the order
amending the order will be and are the terms and provisions of this
order amending the order and are set forth in full herein.
PART 929--CRANBERRIES GROWN IN THE STATES OF MASSACHUSETTS, RHODE
ISLAND, CONNECTICUT, NEW JERSEY, WISCONSIN, MICHIGAN, MINNESOTA,
OREGON, WASHINGTON, AND LONG ISLAND IN THE STATE OF NEW YORK
1. The authority citation for 7 CFR part 929 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. Amend Sec. 929.10 by revising paragraphs (a)(2) and (b)(4) to
read as follows:
Sec. 929.10 Handle.
(a) * * *
(2) To sell, consign, deliver, or transport (except as a common or
contract carrier of cranberries owned by another person) fresh
cranberries or in any other way to place fresh cranberries in the
current of commerce within the production area or between the
production area and any point outside thereof.
(b) * * *
(4) The cold storage or freezing of excess or restricted
cranberries for the purpose of temporary storage during periods when an
annual allotment percentage and/or a handler withholding program is in
effect prior to their disposal, pursuant to Sec. Sec. 929.54 or
929.59.
3. Add a new Sec. 929.28 to read as follows:
Sec. 929.28 Redistricting and reapportionment.
(a) The committee, with the approval of the Secretary, may
reestablish districts within the production area and reapportion
membership among the districts. In recommending such changes, the
committee shall give consideration to:
(1) The relative volume of cranberries produced within each
district.
(2) The relative number of cranberry producers within each
district.
(3) Cranberry acreage within each district.
(4) Other relevant factors.
(b) The committee may establish, with the approval of the
Secretary, rules and regulations for the implementation and operation
of this section.
4. Revise Sec. 929.45 to read as follows:
Sec. 929.45 Research and development.
(a) The committee, with the approval of the Secretary, may
establish or provide for the establishment of production research,
marketing research, and market development projects, including paid
advertising, designed to assist, improve, or promote the marketing,
distribution, consumption, or efficient production of cranberries. The
expense of such projects shall be paid from funds collected pursuant to
Sec. 929.41, or from such other funds as approved by the Secretary.
(b) The committee may, with the approval of the Secretary,
establish rules and regulations as necessary for the implementation and
operation of this section.
5. Revise Sec. 929.46 to read as follows:
Sec. 929.46 Marketing policy.
Each season prior to making any recommendation pursuant to Sec.
929.51, the committee shall submit to the Secretary a report setting
forth its marketing policy for the crop year. Such marketing policy
shall contain the following information for the current crop year:
(a) The estimated total production of cranberries;
(b) The expected general quality of such cranberry production;
(c) The estimated carryover, as of September 1, of frozen
cranberries and other cranberry products;
(d) The expected demand conditions for cranberries in different
market outlets;
(e) The recommended desirable total marketable quantity of
cranberries including a recommended adequate carryover into the
following crop year of frozen cranberries and other cranberry products;
(f) Other factors having a bearing on the marketing of cranberries.
Sec. 929.47 [Removed]
6. Remove Sec. 929.47.
7. Revise Sec. 929.48 to read as follows:
Sec. 929.48 Sales history.
(a) A sales history for each grower shall be computed by the
committee in the following manner:
(1) For growers with acreage with 6 or more years of sales history,
the sales history shall be computed using an average of the highest
four of the most recent six years of sales.
(2) For growers with 5 years of sales history from acreage planted
or replanted 2 years prior to the first harvest on that acreage, the
sales history is computed by averaging the highest 4 of the 5 years.
(3) For growers with 5 years of sales history from acreage planted
or replanted 1 year prior to the first harvest on that acreage, the
sales history is computed by averaging the highest 4 of the 5 years and
in a year prior to a year of a producer allotment volume regulation
shall be adjusted as provided in paragraph (6) of this section.
(4) For a grower with 4 years or less of sales history, the sales
history shall be computed by dividing the total sales from that acreage
by 4 and in a year prior to a year of a producer allotment volume
regulation shall be adjusted as provided in paragraph (a)(6) of this
section.
(5) For growers with acreage having no sales history, or for the
first harvest of replanted acres, the sales history will be the average
first year yields (depending on whether first harvested 1 or 2 years
after planting or replanting) as established by the committee and
multiplied by the number of acres.
(6) In a year prior to a year of a producer allotment volume
regulation, in addition to the sales history computed in accordance
with paragraphs (a)(3) and (4) of this section, additional sales
history shall be assigned to growers using the formula x=(a-b)c. The
letter ``x'' constitutes the additional number of barrels to be added
to the grower's sales history. The value ``a'' is the expected yield
for the forthcoming year harvested acreage as established by the
committee. The value ``b'' is the total sales from that acreage as
established by the committee divided by four. The value ``c'' is the
number of acres planted or replanted in the specified year. For acreage
with five years of sales history: a = the expected yield for the
forthcoming sixth year harvested acreage (as established by the
committee); b = an average of the most recent 4 years of expected
yields (as established by the committee); and c = the number of acres
with 5 years of sales history.
(b) A new sales history shall be calculated for each grower after
each crop year, using the formulas established in paragraph (a) of this
section, or such other formula(s) as determined by the committee, with
the approval of the Secretary.
(c) The committee, with the approval of the Secretary, may adopt
regulations to change the number and identity of years to be used in
computing sales histories, including the number of years
[[Page 70011]]
to be used in computing the average. The committee may establish, with
the approval of the Secretary, rules and regulations necessary for the
implementation and operation of this section.
(d) Sales histories, starting with the crop year following adoption
of this part, shall be calculated separately for fresh and processed
cranberries. The amount of fresh fruit sales history may be calculated
based on either the delivered weight of the barrels paid for by the
handler (excluding trash and unusable fruit) or on the weight of the
fruit paid for by the handler after cleaning and sorting for the retail
market. Handlers using the former calculation shall allocate delivered
fresh fruit subsequently used for processing to growers' processing
sales. Fresh fruit sales history, in whole or in part, may be added to
process fruit sales history with the approval of the committee in the
event that the grower's fruit does not qualify as fresh fruit at
delivery.
(e) The committee may recommend rules and regulations, with the
approval of the Secretary, to adjust a grower's sales history to
compensate for catastrophic events that impact the grower's crop.
8. Revise Sec. 929.49 to read as follows:
Sec. 929.49 Marketable quantity, allotment percentage, and annual
allotment.
(a) Marketable quantity and allotment percentage. If the Secretary
finds, from the recommendation of the committee or from other available
information, that limiting the quantity of cranberries purchased from
or handled on behalf of growers during a crop year would tend to
effectuate the declared policy of the Act, the Secretary shall
determine and establish a marketable quantity for that crop year.
(b) The marketable quantity shall be apportioned among growers by
applying the allotment percentage to each grower's sales history,
established pursuant to Sec. 929.48. Such allotment percentage shall
be established by the Secretary and shall equal the marketable quantity
divided by the total of all growers' sales histories including the
estimated total sales history for new growers. Except as provided in
paragraph (g) of this section, no handler shall purchase or handle on
behalf of any grower cranberries not within such grower's annual
allotment.
(c) In any crop year in which the production of cranberries is
estimated by the committee to be equal to or less than its recommended
marketable quantity, the committee may recommend that the Secretary
increase or suspend the allotment percentage applicable to that year.
In the event it is found that market demand is greater than the
marketable quantity previously set, the committee may recommend that
the Secretary increase such quantity.
(d) Issuance of annual allotments. The committee shall require all
growers to qualify for such allotment by filing with the committee a
form wherein growers include the following information:
(1) The amount of acreage which will be harvested;
(2) A copy of any lease agreement covering cranberry acreage;
(3) The name of the handler(s) to whom their annual allotment will
be delivered;
(4) Such other information as may be necessary for the
implementation and operation of this section.
(e) On or before such date as determined by the committee, with the
approval of the Secretary, the committee shall issue to each grower an
annual allotment determined by applying the allotment percentage
established pursuant to paragraph (b) of this section to the grower's
sales history.
(f) On or before such date as determined by the committee, with the
approval of the Secretary, in which an allotment percentage is
established by the Secretary, the committee shall notify each handler
of the annual allotment that can be handled for each grower whose total
crop will be delivered to that handler. In cases where a grower
delivers a crop to more than one handler, the grower must specify how
the annual allotment will be apportioned among the handlers. If a
grower does not specify how their annual allotment is to be apportioned
among the handlers, the Committee will apportion such annual allotment
equally among those handlers they are delivering their crop to.
(g) Growers who do not produce cranberries equal to their computed
annual allotment shall transfer their unused allotment to such growers'
handlers unless it is transferred to another grower in accordance with
Sec. 929.50(b) or if it is not assigned in accordance with paragraph
(i) of this section. The handler shall equitably allocate the unused
annual allotment to growers with excess cranberries who deliver to such
handler. Unused annual allotment remaining after all such transfers
have occurred shall be reported and transferred to the committee by
such date as established by the committee with the approval of the
Secretary.
(h) Handlers who receive cranberries more than the sum of their
growers' annual allotments have ``excess cranberries,'' pursuant to
Sec. 929.59, and shall so notify the committee. Handlers who have
remaining unused allotment pursuant to paragraph (g) of this section
are ``deficient'' and shall so notify the committee. The committee
shall allocate unused allotment to all handlers having excess
cranberries, proportional to each handler's total allotment.
(i) Growers who decide not to grow a crop, during any crop year in
which a volume regulation is in effect, may choose not to assign their
allotment to a handler.
(j) The committee may establish, with the approval of the
Secretary, rules and regulations necessary for the implementation and
operation of this section.
9. Revise Sec. 929.50 to read as follows:
Sec. 929.50 Transfers of sales histories and annual allotments.
(a) Leases and sales of cranberry acreage.
(1) Total or partial lease of cranberry acreage. When total or
partial lease of cranberry acreage occurs, sales history attributable
to the acreage being leased shall remain with the lessor.
(2) Total sale of cranberry acreage. When there is a sale of a
grower's total cranberry producing acreage, the committee shall
transfer all owned acreage and all associated sales history to such
acreage to the buyer. The seller and buyer shall file a sales transfer
form providing the committee with such information as may be requested
so that the buyer will have immediate access to the sales history
computation process.
(3) Partial sale of cranberry acreage. When less than the total
cranberry producing acreage is sold, sales history associated with that
portion of the acreage being sold shall be transferred with the
acreage. The seller shall provide the committee with a sales transfer
form containing, but not limited to the distribution of acreage and the
percentage of sales history, as defined in Sec. 929.48(a)(1),
attributable to the acreage being sold.
(4) No sale of cranberry acreage shall be recognized unless the
committee is notified in writing.
(b) Allotment transfers. During a year of volume regulation, a
grower may transfer all or part of his/her allotment to another grower.
If a lease is in effect the lessee shall receive allotment from lessor
attributable to the acreage leased. Provided, That the transferred
allotment shall remain assigned to the same handler and that the
transfer shall take place prior to a date to be recommended by the
Committee and approved by the Secretary. Transfers of allotment between
growers having different
[[Page 70012]]
handlers may occur with the consent of both handlers.
(c) The committee may establish, with the approval of the
Secretary, rules and regulations, as needed, for the implementation and
operation of this section.
10. Revise Sec. 929.51 to read as follows:
929.51 Recommendations for regulation.
(a) Except as otherwise provided in paragraph (b) of this section,
if the committee deems it advisable to regulate the handling of
cranberries in the manner provided in Sec. 929.52, it shall so
recommend to the Secretary by the following appropriate dates:
(1) An allotment percentage regulation must be recommended by no
later than March 1;
(2) A handler withholding program must be recommended by not later
than August 31. Such recommendation shall include the free and
restricted percentages for the crop year;
(3) If both programs are recommended in the same year, the
Committee shall submit with its recommendation an economic analysis to
the USDA prior to March 1 of the year in which the programs are
recommended.
(b) An exception to the requirement in paragraph (a)(1) of this
section may be made in a crop year in which, due to unforeseen
circumstances, a producer allotment regulation is deemed necessary
subsequent to the March 1 deadline.
(c) In arriving at its recommendations for regulation pursuant to
paragraph (a) of this section, the committee shall give consideration
to current information with respect to the factors affecting the supply
of and demand for cranberries during the period when it is proposed
that such regulation should be imposed. With each such recommendation
for regulation, the committee shall submit to the Secretary the data
and information on which such recommendation is based and any other
information the Secretary may request.
11. Revise Sec. 929.52 to read as follows:
Sec. 929.52 Issuance of regulations.
(a) The Secretary shall regulate, in the manner specified in this
section, the handling of cranberries whenever the Secretary finds, from
the recommendations and information submitted by the committee, or from
other available information, that such regulation will tend to
effectuate the declared policy of the Act. Such regulation shall limit
the total quantity of cranberries which may be handled during any
fiscal period by fixing the free and restricted percentages, applied to
cranberries acquired by handlers in accordance with Sec. 929.54, and/
or by establishing an allotment percentage in accordance with Sec.
929.49.
(b) The committee shall be informed immediately of any such
regulation issued by the Secretary, and the committee shall promptly
give notice thereof to handlers.
12. Revise Sec. 929.54 to read as follows:
Sec. 929.54 Withholding.
(a) Whenever the Secretary has fixed the free and restricted
percentages for any fiscal period, as provided for in Sec. 929.52(a),
each handler shall withhold from handling a portion of the cranberries
acquired during such period. The withheld portion shall be equal to the
restricted percentage multiplied by the volume of marketable
cranberries acquired. Such withholding requirements shall not apply to
any lot of cranberries for which such withholding requirement
previously has been met by another handler in accordance with Sec.
929.55.
(b) The committee, with the approval of the Secretary, shall
prescribe the manner in which, and date or dates during the fiscal
period by which, handlers shall have complied with the withholding
requirements specified in paragraph (a) of this section.
(c) Withheld cranberries may meet such standards of grade, size,
quality, or condition as the committee, with the approval of the
Secretary, may prescribe. The Federal or Federal-State Inspection
Service may inspect all such cranberries. A certificate of such
inspection shall be issued which shall include the name and address of
the handler, the number and type of containers in the lot, the location
where the lot is stored, identification marks (including lot stamp, if
used), and the quantity of cranberries in such lot that meet the
prescribed standards. Promptly after inspection and certification, each
such handler shall submit to the committee a copy of the certificate of
inspection issued with respect to such cranberries.
(d) Any handler who withholds from handling a quantity of
cranberries in excess of that required pursuant to paragraph (a) of
this section shall have such excess quantity credited toward the next
fiscal year's withholding obligation, if any--provided that such credit
shall be applicable only if the restricted percentage established
pursuant to Sec. 929.52 was modified pursuant to Sec. 929.53; to the
extent such excess was disposed of prior to such modification; and
after such handler furnishes the committee with such information as it
prescribes regarding such withholding and disposition.
(e) The Committee, with the approval of the Secretary, may
establish rules and regulations necessary and incidental to the
administration of this section.
13. Revise Sec. 929.56 to read as follows:
Sec. 929.56 Special provisions relating to withheld (restricted)
cranberries.
(a) A handler shall make a written request to the committee for the
release of all or part of the cranberries that the handler is
withholding from handling pursuant to Sec. 929.54(a). Each request
shall state the quantity of cranberries for which release is requested
and shall provide such additional information as the committee may
require. Handlers may replace the quantity of withheld cranberries
requested for release as provided under either paragraph (b) or (c) of
this section.
(b) The handler may contract with another handler for an amount of
free cranberries to be converted to restricted cranberries that is
equal to the volume of cranberries that the handler wishes to have
converted from his own restricted cranberries to free cranberries.
(1) The handlers involved in such an agreement shall provide the
committee with such information as may be requested prior to the
release of any restricted cranberries.
(2) The committee shall establish guidelines to ensure that all
necessary documentation is provided to the committee, including but not
limited to, the amount of cranberries being converted and the
identities of the handlers assuming the responsibility for withholding
and disposing of the free cranberries being converted to restricted
cranberries.
(3) Cranberries converted to replace released cranberries may be
required to be inspected and meet such standards as may be prescribed
for withheld cranberries prior to disposal.
(4) Transactions and agreements negotiated between handlers shall
include all costs associated with such transactions including the
purchase of the free cranberries to be converted to restricted
cranberries and all costs associated with inspection (if applicable)
and disposal of such restricted cranberries. No costs shall be incurred
by the committee other than for the normal activities associated with
the implementation and operation of a volume regulation program.
(5) Free cranberries belonging to one handler and converted to
restricted cranberries on the behalf of another handler shall be
reported to the committee in such manner as prescribed by the
committee.
(c) Except as otherwise directed by the Secretary, as near as
practicable to
[[Page 70013]]
the beginning of the marketing season of each fiscal period with
respect to which the marketing policy proposes regulation pursuant to
Sec. 929.52(a), the committee shall determine the amount per barrel
each handler shall deposit with the committee for it to release to him,
in accordance with this section, all or part of the cranberries he is
withholding; and the committee shall give notice of such amount of
deposit to handlers. Such notice shall state the period during which
such amount of deposit shall be in effect. Whenever the committee
determines that, by reason of changed conditions or other factors, a
different amount should therefore be deposited for the release of
withheld cranberries, it shall give notice to handlers of the new
amount and the effective period thereof. Each determination as to the
amount of deposit shall be on the basis of the committee's evaluation
of the following factors:
(1) The prices at which growers are selling cranberries to
handlers,
(2) The prices at which handlers are selling fresh market
cranberries to dealers,
(3) The prices at which cranberries are being sold for processing
in products,
(4) The prices at which handlers are selling cranberry concentrate,
(5) The prices the committee has paid to purchase cranberries to
replace released cranberries in accordance with this section, and
(6) The costs incurred by growers in producing cranberries.
(7) Each request for release of withheld cranberries shall include,
in addition to all other information as may be prescribed by the
committee, the quantity of cranberries the release is requesting and
shall be accompanied by a deposit (a cashier's or certified check made
payable to the Cranberry Marketing Committee) in an amount equal to the
twenty percent of the amount determined by multiplying the number of
barrels stated in the request by the then effective amount per barrel
as determined in paragraph (c).
(8) Subsequent deposits equal to, but not less than, the ten
percent of the remaining outstanding balance shall be payable to the
committee on a monthly basis commencing on January 1, and concluding by
no later than August 31 of the fiscal period.
(9) If the committee determines such a release request is properly
filled out, is accompanied by the required deposit, and contains a
certification that the handler is withholding such cranberries, it
shall release to such handler the quantity of cranberries specified in
his request.
(d) Funds deposited for the release of withheld cranberries,
pursuant to paragraph (c) of this section, shall be used by the
committee to purchase from handlers unrestricted (free percentage)
cranberries in an aggregate amount as nearly equal to, but not in
excess of, the total quantity of the released cranberries as it is
possible to purchase to replace the released cranberries.
(e) All handlers shall be given an equal opportunity to participate
in such purchase of unrestricted (free percentage) cranberries. If a
larger quantity is offered than can be purchased, the purchases shall
be made at the lowest price possible. If two or more handlers offer
unrestricted (free percentage) cranberries at the same price, purchases
from such handlers shall be in proportion to the quantity of their
respective offerings insofar as such division is practicable. The
committee shall dispose of cranberries purchased as restricted
cranberries in accordance with Sec. 929.57. Any funds received by the
committee for cranberries so disposed of, which are in excess of the
costs incurred by the committee in making such disposition, would
accrue to the handler who deposited those funds to be distributed to
that handler's growers.
(f) In the event any portion of the funds deposited with the
committee pursuant to paragraph (c) of this section cannot, for reasons
beyond the committee's control, be expended to purchase unrestricted
(free percentage) cranberries to replace those withheld cranberries
requested to be released, such unexpended funds shall, after deducting
expenses incurred by the committee, be refunded to the handler who
deposited the funds. The handler shall equitably distribute such refund
among the growers delivering to such handler.
(g) Inspection for restricted (withheld) cranberries released to a
handler is not required.
(h) The committee may establish, with the approval of the
Secretary, rules and regulations for the implementation of this
section. Such rules and regulations may include, but are not limited
to, revisions in the payment schedule specified in paragraphs (c)(7)
and (c)(8) of this section.
14. Revise Sec. 929.58 to read as follows:
Sec. 929.58 Exemptions.
(a) Upon the basis of the recommendation and information submitted
by the committee, or from other available information, the Secretary
may relieve from any or all requirements pursuant to this part the
handling of cranberries in such minimum quantities as the committee,
with the approval of the Secretary, may prescribe.
(b) Upon the basis of the recommendation and information submitted
by the committee, or from other available information, the Secretary
may relieve from any or all requirements pursuant to this part the
handling of such forms or types of cranberries as the committee, with
the approval of the Secretary, may prescribe. Forms of cranberries
could include cranberries intended for fresh sales or organically grown
cranberries.
(c) The committee, with the approval of the Secretary, shall
prescribe such rules, regulations, and safeguards as it may deem
necessary to ensure that cranberries handled under the provisions of
this section are handled only as authorized.
15. Revise Sec. 929.61 to read as follows:
Sec. 929.61 Outlets for excess cranberries.
(a) Noncommercial outlets. Excess cranberries may be disposed of in
noncommercial outlets that the committee finds, with the approval of
the Secretary, meet the requirements outlined in paragraph (c) of this
section. Noncommercial outlets include, but are not limited to:
(1) Charitable institutions; and
(2) Research and development projects.
(b) Noncompetitive outlets. Excess cranberries may be sold in
outlets that the committee finds, with the approval of the Secretary,
are noncompetitive with established markets for regulated cranberries
and meet the requirements outlined in paragraph (c) of this section.
Noncompetitive outlets include but are not limited to:
(1) Any nonhuman food use; and
(2) Other outlets established by the committee with the approval of
the Secretary.
(c) Requirements. The handler disposing of or selling excess
cranberries into noncompetitive or noncommercial outlets shall meet the
following requirements, as applicable:
(1) Charitable institutions. A statement from the charitable
institution shall be submitted to the committee showing the quantity of
cranberries received and certifying that the institution will consume
the cranberries;
(2) Research and development projects. A report shall be given to
the committee describing the project, quantity of cranberries
contributed, and date of disposition;
(3) Nonhuman food use. Notification shall be given to the committee
at least 48 hours prior to such disposition;
[[Page 70014]]
(4) Other outlets established by the committee with the approval of
the Secretary. A report shall be given to the committee describing the
project, quantity of cranberries contributed, and date of disposition.
(d) The storage and disposition of all excess cranberries withheld
from handling shall be subject to the supervision and accounting
control of the committee.
(e) The committee, with the approval of the Secretary, may
establish rules and regulations for the implementation and operation of
this section.
16. Revise Sec. 929.62 to read as follows:
Sec. 929.62 Reports.
(a) Grower report. Each grower shall file a report with the
committee by January 15 of each crop year, or such other date as
determined by the committee, with the approval of the Secretary,
indicating the following:
(1) Total acreage harvested and whether owned or leased.
(2) Total commercial cranberry sales in barrels from such acreage.
(3) Amount of acreage either in production, but not harvested or
taken out of production and the reason(s) why.
(4) Amount of new or replanted acreage coming into production.
(5) Name of the handler(s) to whom commercial cranberry sales were
made.
(6) Such other information as may be needed for implementation and
operation of this section.
(b) Inventory. Each handler engaged in the handling of cranberries
or cranberry products shall, upon request of the committee, file
promptly with the committee a certified report, showing such
information as the committee shall specify with respect to any
cranberries and cranberry products which were held by them on such date
as the committee may designate.
(c) Receipts. Each handler shall, upon request of the committee,
file promptly with the committee a certified report as to each quantity
of cranberries acquired during such period as may be specified, and the
place of production.
(d) Handling reports. Each handler shall, upon request of the
committee, file promptly with the committee a certified report as to
the quantity of cranberries handled during any designated period or
periods.
(e) Withheld and excess cranberries. Each handler shall, upon
request of the committee, file promptly with the committee a certified
report showing, for such period as the committee may specify, the total
quantity of cranberries withheld from handling or held in excess, in
accordance with Sec. Sec. 929.49 and 929.54, the portion of such
withheld or excess cranberries on hand, and the quantity and manner of
disposition of any such withheld or excess cranberries disposed of.
(f) Other reports. Upon the request of the committee, with the
approval of the Secretary, each handler shall furnish to the committee
such other information with respect to the cranberries and cranberry
products acquired and disposed of by such person as may be necessary to
enable the committee to exercise its powers and perform its duties
under this part.
(g) The committee may establish, with the approval of the
Secretary, rules and regulations for the implementation and operation
of this section.
17. Revise Sec. 929.64 to read as follows:
Sec. 929.64 Verification of reports and records.
The committee, through its duly authorized agents, during
reasonable business hours, shall have access to any handler's premises
where applicable records are maintained for the purpose of assuring
compliance and checking and verifying records and reports filed by such
handler.
[FR Doc. 04-26445 Filed 11-30-04; 8:45 am]
BILLING CODE 3410-02-P