[Federal Register: January 14, 2005 (Volume 70, Number 10)]
[Proposed Rules]
[Page 2573-2577]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14ja05-17]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 923
[Docket Nos. AO-F&V-923-3; FV03-923-01]
Sweet Cherries Grown in Designated Counties in Washington;
Secretary's Decision and Referendum Order on Proposed Amendments to
Marketing Agreement and Order No. 923
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule and referendum order.
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SUMMARY: This decision proposes amending the marketing agreement and
order (order) for sweet cherries grown in Washington, and provides
growers with the opportunity to vote in a referendum to determine if
they favor the changes. The amendments are based on those proposed by
the Washington Cherry Marketing Committee (Committee), which is
responsible for local administration of the order. The amendments
include: adding authority for promotion, including paid advertising,
and production research projects; adding authority for supplemental
rates of assessment for individual varieties of cherries; adding
authority for the Committee to accept voluntary contributions for
research and promotion; and, adding a public member to the Committee.
Two additional amendments are based on those proposed by the
Agricultural Marketing Service: Establishing tenure limitations for
Committee members and, requiring that continuance referenda be
[[Page 2574]]
conducted every 6 years. The proposed amendments are intended to
improve the operation and functioning of the sweet cherry marketing
order program.
DATES: The referendum will be conducted from March 1 through March 21,
2005. The representative period for the purpose of the referendum is
April 1, 2003 through March 31, 2004.
FOR FURTHER INFORMATION CONTACT: Melissa Schmaedick, Marketing Order
Administration Branch, Fruit and Vegetable Programs, Agricultural
Marketing Service, USDA, Post Office Box 1035, Moab, UT 84532,
telephone: (435) 259-7988, fax: (435) 259-4945.
Small businesses may request information on this proceeding by
contacting Jay Guerber, Marketing Order Administration Branch, Fruit
and Vegetable Programs, AMS, USDA, 1400 Independence Avenue SW., Stop
0237, Washington, DC 20250-0237; telephone: (202) 720-2491, fax: (202)
720-8938.
SUPPLEMENTARY INFORMATION: Prior documents in this proceeding include:
a Notice of Hearing issued on October 6, 2003, and published in the
October 10, 2003, issue of the Federal Register (68 FR 58636), and a
Recommended Decision issued on September 29, 2004 and published in the
October 5, 2004 issue of the Federal Register (69 FR 59551).
This administrative action is governed by the provisions of
sections 556 and 557 of title 5 of the United States Code and is
therefore excluded from the requirements of Executive Order 12866.
Preliminary Statement
The amendments are based on the record of a public hearing held
November 18, 2003, in Yakima, Washington. The hearing was held to
consider the proposed amendment of Marketing Agreement and Order No.
923, regulating the handling of sweet cherries grown in the State of
Washington, hereinafter referred to as the ``order''. The hearing was
held pursuant to the provisions of the Agricultural Marketing Agreement
Act of 1937, as amended (7 U.S.C. 601 et seq.), hereinafter referred to
as the ``Act,'' and the applicable rules of practice and procedure
governing the formulation of marketing agreements and marketing orders
(7 CFR part 900). The Notice of Hearing contained numerous proposals
submitted by the Committee and two proposals by the Agricultural
Marketing Committee (AMS).
The amendments included in this decision would: (1) Add the
authority for promotion, including paid advertising, and production
research projects; (2) add the authority for supplemental rates of
assessment for individual varieties of cherries; (3) add the authority
for the Committee to accept voluntary contributions for marketing
research and promotion, including paid advertising, and production
research projects; and (4) add a public member and alternate public
member to the Committee.
The Fruit and Vegetable Programs of AMS proposed to establish
tenure limitations for Committee members and to require that
continuance referenda be conducted on a periodic basis to ascertain
grower support for the order. In addition, AMS proposed to allow such
changes as may be necessary to the order, if any of the proposed
changes are adopted, so that all of the order's provisions conform to
the effectuated amendments.
Upon the basis of evidence introduced at the hearing and the record
thereof, the Administrator of AMS on October 4, 2004, filed with the
Hearing Clerk, U.S. Department of Agriculture, a Recommended Decision
and Opportunity to File Written Exceptions thereto by November 4, 2004.
That document also announced AMS's intent to request approval of new
information collection requirements to implement the program. Written
comments on the proposed information collection requirements were due
by November 4, 2004. None were filed.
Small Business Considerations
Pursuant to the requirements set forth in the Regulatory
Flexibility Act (RFA), the Agricultural Marketing Service (AMS) has
considered the economic impact of this action on small entities.
Accordingly, the AMS has prepared this initial regulatory flexibility
analysis.
The purpose of the RFA is to fit regulatory actions to the scale of
business subject to such actions so that small businesses will not be
unduly or disproportionately burdened. Small agricultural growers have
been defined by the Small Business Administration (SBA) (13 CFR
121.201) as those having annual receipts of less than $750,000. Small
agricultural service firms are defined as those with annual receipts of
less than $5,000,000.
The record shows that there are approximately 1,500 growers of
sweet cherries in the production area and approximately 62 handlers
subject to regulation under the order. The average production of sweet
cherries in Washington State for the last three years is 64,676 tons
with an average grower price of $1,943 per ton. Using this number, the
average annual grower revenue is calculated to be approximately
$83,777, thus indicating that the average Washington sweet cherry
grower would qualify as a small entity according to the SBA definition.
Using Committee data regarding each individual handler's total
shipments during the 2002 marketing year, and an estimated average FOB
price of $24 per 20-pound container, 79 percent of the Washington sweet
cherry handlers shipped under $5 million worth of sweet cherries, and
21 percent shipped over $5 million worth of sweet cherries. Therefore,
the majority of Washington sweet cherry handlers may be classified as
small entities.
The Committee is currently comprised of 10 growers and 6 handlers.
Both small and large growers and handlers are members and member
alternates on the Committee. Committee meetings are widely publicized
in advance of the meetings and are held in a location central to the
production area. The meetings are open to all industry members and all
other interested persons, who are encouraged to participate in the
deliberations and voice their opinions on topics under discussion.
At a May 22, 2003, full Committee meeting, all industry
representatives present could present their views concerning the
recommended amendments. Both large and small businesses were
represented. The Committee believes that small and large entities would
benefit equally from the proposed amendments.
Testimony indicates that the proposal to include paid advertising
and production research under the order would assist both small and
large growers and handlers in marketing Washington sweet cherry crops.
While addition of this authority could result in increased assessments
under the order, witnesses stated that the benefits arising from these
activities, as evidenced by similar activities under the Commission,
would outweigh the costs.
Similarly, the proposal to add authority for supplemental varietal
assessments could require additional payments per individual variety of
sweet cherry. However, witnesses stated that they believed the benefits
of those research and promotion activities would outweigh the costs.
Witnesses used the example of recent Commission activities as
evidence that research and promotion activities would lead to increased
grower returns and market stability by providing tools to the industry
to address expanding production and evolving consumer trends in the
industry. Witnesses were unanimous in their belief that the benefits of
the Commission's activities
[[Page 2575]]
more than outweigh the costs of these programs. They stated that the
same results would be expected from any such activities conducted under
the order.
The proposal to add authority for the Committee to accept voluntary
contributions would not result in any increased costs or burdens to the
industry. In fact, witnesses stated that this authority would benefit
the industry greatly as it could provide for additional funding sources
of research and promotional activities. Safeguards against donor
control over the use of voluntary contributions would ensure that these
funds would be used in the best interest of the industry. The Committee
would decide how to use those funds, and the decision-making process
would be open to industry input and feedback.
The proposal to add a public member and alternate public member to
the Committee is not expected to result in any substantial cost
increases. While the new members would be entitled to reimbursement for
their expenses, the additional cost would be minimal. Additionally, the
benefit of adding a non-industry, consumer perspective to Committee
deliberations and decision-making could prove very beneficial.
Witnesses stated that this additional perspective would improve the
Committee's understanding of the consumer in the marketplace and could
enhance Committee activities aimed at increasing consumer demand for
Washington sweet cherries.
The proposed amendment to add tenure requirements for Committee
members would allow more persons the opportunity to serve as members of
the Committee. It would provide for more diverse membership, provide
the Committee with new perspectives and ideas, and increase the number
of individuals in the industry with Committee experience.
The proposal to require continuance referenda on a periodic basis
to ascertain grower support for the order would allow growers to vote
on whether to continue the operation of the program. The referenda
would be conducted by USDA.
Interested persons were invited to present evidence at the hearing
on the probable regulatory and informational impacts of the proposed
amendments to the order on small entities. The record evidence is that
while some minimal costs may occur, those costs would be outweighed by
the benefits expected to accrue to the sweet cherry industry in
designated counties of Washington.
The Department has not identified any relevant Federal rules that
duplicate, overlap or conflict with this proposed rule. All of the
amendments are designed to enhance the administration and functioning
of the program to the benefit of Washington cherry growers and
handlers.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35), AMS has submitted a request to OMB for approval of the
increase in information collection burden for the Washington Cherry
marketing order.
This decision adds a public member and alternate public member to
the Committee. A confidential qualification and acceptance statement
would be used to nominate and appoint the public and alternate public
committee members. This form is based on the currently approved
Confidential Background Statement for the Washington Cherry Marketing
Committee. If this proposal is implemented the form would only be used
after approval by OMB.
Civil Justice Reform
The amendments to Marketing Order 923 proposed herein have been
reviewed under Executive Order 12988, Civil Justice Reform. They are
not intended to have retroactive effect. If adopted, the proposed
amendments would not preempt any State or local laws, regulations, or
policies, unless they present an irreconcilable conflict with this
proposal.
The Act provides that administrative proceedings must be exhausted
before parties may file suit in court. Under section 608c(15)(A) of the
Act, any handler subject to an order may file with the Department a
petition stating that the order, any provision of the order, or any
obligation imposed in connection with the order is not in accordance
with law and request a modification of the order or to be exempted
there from. A handler is afforded the opportunity for a hearing on the
petition. After the hearing, the USDA would rule on the petition. The
Act provides that the district court of the United States in any
district in which the handler is an inhabitant, or has his or her
principal place of business, has jurisdiction to review the
Department's ruling on the petition, provided an action is filed not
later than 20 days after the date of the entry of the ruling.
Findings and Conclusions
The material issues, findings and conclusions, rulings, and general
findings and determinations included in the Recommended Decision set
forth in the October 5, 2004, issue of the Federal Register are hereby
approved and adopted.
Marketing Agreement and Order
Annexed hereto and made a part hereof is the document entitled
``Order Amending the Order Regulating the Handling of Sweet Cherries
Grown in Washington.'' This document has been decided upon as the
detailed and appropriate means of effectuating the foregoing findings
and conclusions.
It is hereby ordered, That this entire decision be published in the
Federal Register.
Referendum Order
It is hereby directed that a referendum be conducted in accordance
with the procedure for the conduct of referenda (7 CFR part 900.400 et
seq.) to determine whether the annexed order amending the order
regulating the handling of sweet cherries grown in Washington is
approved or favored by growers, as defined under the terms of the
order, who during the representative period were engaged in the
production of sweet cherries in the production area.
The representative period for the conduct of such referendum is
hereby determined to be April 1, 2004, through February 28, 2005.
The agent of the Secretary to conduct such referendum is hereby
designated to be Robert Curry and Gary Olson, Northwest Marketing Field
Office, Marketing Order Administration Branch, Fruit and Vegetable
Programs, AMS, USDA, 1220 SW. Third Avenue, Room 369, Portland, Oregon
97204; telephone (503) 326-2724.
List of Subjects in 7 CFR Part 923
Cherries, Marketing agreements, Reporting and recordkeeping
requirements.
Dated: January 11, 2005.
A.J. Yates,
Administrator, Agricultural Marketing Service.
Order Amending the Order Regulating the Handling of Sweet Cherries
Grown in Washington \1\
Findings and Determinations
The findings hereinafter set forth are supplementary to the
findings and determinations which were previously made in connection
with the issuance of the marketing agreement and order; and
[[Page 2576]]
all said previous findings and determinations are hereby ratified and
affirmed, except insofar as such findings and determinations may be in
conflict with the findings and determinations set forth herein.
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\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.
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(a) Findings and Determinations Upon the Basis of the Hearing
Record.
Pursuant to the provisions of the Agricultural Marketing Agreement
Act of 1937, as amended (7 U.S.C. 601 et seq.), and the applicable
rules of practice and procedure effective thereunder (7 CFR part 900),
a public hearing was held upon the proposed amendments to the Marketing
Agreement and Order No. 923 (7 CFR part 927), regulating the handling
of sweet cherries grown in Washington. Upon the basis of the evidence
introduced at such hearing and the record thereof, it is found that:
(1) The marketing agreement and order, as amended, and as hereby
proposed to be further amended, and all of the terms and conditions
thereof, would tend to effectuate the declared policy of the Act;
(2) The marketing agreement and order, as amended, and as hereby
proposed to be further amended, regulate the handling of sweet cherries
grown in the production area in the same manner as, and are applicable
only to, persons in the respective classes of commercial and industrial
activity specified in the marketing agreement and order upon which a
hearing has been held;
(3) The marketing agreement and order, as amended, and as hereby
proposed to be further amended, are limited in their application to the
smallest regional production area which is practicable, consistent with
carrying out the declared policy of the Act, and the issuance of
several orders applicable to subdivisions of the production area would
not effectively carry out the declared policy of the Act;
(4) The marketing agreement and order, as amended, and as hereby
proposed to be further amended, prescribe, insofar as practicable, such
different terms applicable to different parts of the production area as
are necessary to give due recognition to the differences in the
production and marketing of sweet cherries grown in the production
area; and
(5) All handling of sweet cherries grown in the production area as
defined in the marketing agreement and order, is in the current of
interstate or foreign commerce or directly burdens, obstructs, or
affects such commerce.
Order Relative to Handling
It is therefore ordered, That on and after the effective date
hereof, all handling of sweet cherries grown in Washington shall be in
conformity to, and in compliance with, the terms and conditions of the
said order as hereby proposed to be amended as follows:
The provisions of the proposed marketing agreement and order
amending the order contained in the Recommended Decision issued by the
Administrator on September 29, 2004, and published in the Federal
Register on October 5, 2004, will be and are the terms and provisions
of this order amending the order and are set forth in full herein.
PART 923--SWEET CHERRIES GROWN IN DESIGNATED COUNTIES IN WASHINGTON
1. The authority citation for 7 CFR part 923 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. Section 923.20 is revised to read as follows:
Sec. 923.20 Establishment and membership.
There is hereby established a Washington Cherry Marketing Committee
consisting of seventeen members, each of whom shall have an alternate
who shall have the same qualifications as the member for whom he or she
is an alternate. Ten members and their respective alternates shall be
growers or officers or employees of corporate growers. Six of the
members and their respective alternates shall be handlers, or officers
or employees of handlers. One member and his or her respective
alternate shall be a public member who is neither a grower nor a
handler. The ten members of the committee who are growers or employees
or officers of corporate growers are referred to in this part as
``grower members'' of the committee; and six members of the committee
who shall be handlers, or officers or employees of handlers are
referred to in this part as ``handler members'' of the committee. Five
of the grower members and their respective alternates shall be growers
of cherries in District 1, and five of the grower members and their
respective alternates shall be growers of cherries in District 2. Three
of the handler members and their respective alternates shall be
handlers of cherries in District 1, and three of the handler members
and their representative alternates shall be handlers of cherries in
District 2.
3. Revise Sec. 923.21 to read as follows:
Sec. 923.21 Term of office.
The term of office of each member and alternate member of the
committee shall be for two years beginning April 1 and ending March 31.
Members and alternate members shall serve in such capacities for the
portion of the term of office for which they are selected and have
qualified and until their respective successors are selected and have
qualified. Committee members shall not serve more than three
consecutive terms. Members who have served for three consecutive terms
must leave the committee for at least one year before becoming eligible
to serve again.
4. Amend Sec. 923.22 by adding a new paragraph (b)(4) to read as
follows:
Sec. 923.22 Nomination.
* * * * *
(b) * * *
(4) The grower and handler members of the committee shall nominate
the public member and alternate public member at the first meeting
following the selection of members for a new term of office.
5. In Sec. 923.41, paragraph (c) is redesignated as paragraph (d)
and a new paragraph (c) is added to read as follows:
Sec. 923.41 Assessments.
* * * * *
(c) Based upon a recommendation of the committee or other available
information, the Secretary shall fix the rate of assessment that
handlers shall pay on all cherries handled during each fiscal period,
and may also fix supplemental rates of assessment on individual
varieties or subvarieties to secure sufficient funds to provide for
projects authorized under Sec. 923.45. At any time during the fiscal
period when it is determined on the basis of a committee recommendation
or other information that a different rate is necessary for all
cherries or for any varieties or subvarieties, the Secretary may modify
a rate of assessment and such new rate shall apply to any or all
varieties or subvarieties that are shipped during the fiscal period.
* * * * *
6. A new Sec. 923.43 is added to read as follows:
Sec. 923.43 Contributions.
The committee may accept voluntary contributions but these shall
only be used to pay expenses incurred pursuant to Sec. 923.45.
Furthermore, such contributions shall be free from any encumbrances by
the donor and the committee shall retain complete control of their use.
[[Page 2577]]
7. Section 923.45 is revised to read as follows:
Sec. 923.45 Production and marketing research, promotion and market
development.
The committee, with the approval of the Secretary, may establish or
provide for the establishment of projects involving production
research, marketing research and development, and marketing promotion,
including paid advertising, designed to assist, improve, or promote the
marketing, distribution, consumption or efficient production of
cherries. The expense of such projects shall be paid from funds
collected pursuant to Sec. Sec. 923.41 and 923.43.
8. Section 923.64 is amended by:
A. Revising paragraph (c).
B. Redesignating paragraph (d) as paragraph (e).
C. Adding a new paragraph (d).
The revision and addition read as follows:
Sec. 923.64 Termination.
* * * * *
(c) The Secretary shall terminate the provisions of this part
whenever it is found that such termination is favored by a majority of
growers who, during a representative period, have been engaged in the
production of cherries: Provided, that such majority has, during such
representative period, produced for market more than 50 percent of the
volume of such cherries produced for market.
(d) The Secretary shall conduct a referendum six years after the
effective date of this section and every sixth year thereafter, to
ascertain whether continuance of this subpart is favored by growers.
The Secretary may terminate the provisions of this subpart at the end
of any fiscal period in which the Secretary has found that continuance
of this subpart is not favored by growers who, during a representative
period determined by the Secretary, have been engaged in the production
of cherries in the production area.
* * * * *
[FR Doc. 05-825 Filed 1-13-05; 8:45 am]
BILLING CODE 3410-02-P