[Federal Register: June 10, 2002 (Volume 67, Number 111)]
[Proposed Rules]
[Page 39637-39639]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10jn02-14]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 930
[Docket No. FV02-930-3 PR]
Tart Cherries Grown in the States of Michigan, et al.; Increased
Assessment Rates
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This rule would increase the assessment rate for cherries that
are utilized in the production of tart cherry products other than
juice, juice concentrate, or puree from $0.00175 to $0.0021 per pound.
It also would increase the assessment rate for cherries utilized for
juice, juice concentrate, or puree from $0.000875 to $0.00105 per
pound. Both assessment rates were recommended by the Cherry Industry
Administrative Board (Board) under Marketing Order No. 930 for the
2002-2003 and subsequent fiscal periods. The Board is responsible for
local administration of the marketing order which regulates the
handling of tart cherries grown in the production area. Authorization
to assess tart cherry handlers enables the Board to incur expenses that
are reasonable and necessary to administer the program. The fiscal
period will begin July 1, 2002, and end June 30, 2003. The assessment
rates would remain in effect indefinitely unless modified, suspended,
or terminated.
DATES: Comments must be received by July 10, 2002.
ADDRESSES: Interested persons are invited to submit written comments
concerning this action. Comments must be sent to the Docket Clerk,
Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW
STOP 0237, Washington, DC 20250-0237; Fax: (202) 720-8938, or e-mail:
moabdocket.clerk@usda.gov. All comments should reference the docket
number and the date and page number of this issue of the Federal
Register and will be made available for public inspection in the Office
of the Docket Clerk during regular business hours or can be viewed at:
http://www.ams/usda.gov/fv/moab.html.
FOR FURTHER INFORMATION CONTACT: Patricia A. Petrella or Kenneth G.
Johnson, Marketing Order Administration Branch, Fruit and Vegetable
Programs, AMS, USDA, Suite 2A04, Unit 155, 4700 River Road, Riverdale,
MD 20737, telephone: (301) 734-5243, or Fax: (301) 734-5275; or George
Kelhart, Technical Advisor, 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 complying 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, or e-mail: Jay.Guerber@usda.gov.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing
Agreement and Order No. 930 (7 CFR part 930), regulating the handling
of tart cherries grown in the States of Michigan, New York,
Pennsylvania, Oregon, Utah, Washington, and Wisconsin, hereinafter
referred to as the ``order.'' The marketing agreement and order are
effective under the Agricultural Marketing Agreement Act of 1937, as
amended (7 U.S.C. 601-674), hereinafter referred to as the ``Act.''
The Department of Agriculture (USDA) is issuing this rule in
conformance with Executive Order 12866.
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. Under the marketing order now in effect, tart cherry
handlers are subject to assessments. Funds to administer the order are
derived from such assessments. It is intended that the assessment rates
as issued herein would be applicable to all assessable tart cherries
beginning July 1, 2002, and continue until amended, suspended, or
terminated. This rule will not preempt any State or local laws,
regulations, or policies, unless they present an irreconcilable
conflict with this rule.
The Act provides that administrative proceedings must be exhausted
before parties may file suit in court. Under section 608c(15)(A) of the
Act, any handler subject to an order may file with USDA a petition
stating that the order, any provision of the order, or any obligation
imposed in connection with the order is not in accordance with law and
request a modification of the order or to be exempted therefrom. Such
handler is afforded the opportunity for a hearing on the petition.
After the hearing USDA would rule on the petition. The Act provides
that the district court of the United States in any district in which
the handler is an inhabitant, or has his or her principal place of
business, has jurisdiction to review USDA's ruling on the petition,
provided an action is filed not later than 20 days after the date of
the entry of the ruling.
This rule would increase the assessment rate established for the
Board for the 2002-2003 and subsequent fiscal periods for cherries that
are utilized in the production of tart cherry products other than
juice, juice concentrate, or puree from $0.00175 to $0.0021 per pound
of cherries. The assessment rate for cherries utilized for juice, juice
concentrate, or puree would be increased from $0.000875 to $0.00105 per
pound.
The tart cherry marketing order provides authority for the Board,
with the approval of USDA, to formulate an annual budget of expenses
and collect assessments from handlers to administer the program. The
members of the Board are producers and handlers of tart cherries. They
are familiar with the Board's needs and with the costs for goods and
services in their local area and are thus in a position to formulate an
appropriate budget and assessment rates. The assessment rates are
formulated and discussed in a public meeting. Thus, all directly
affected
[[Page 39638]]
persons have an opportunity to participate and provide input.
For the 2001-2002 fiscal period, the Board recommended, and the
Department approved, assessment rates that would continue in effect
from fiscal period to fiscal period unless modified, suspended, or
terminated by the USDA upon recommendation and information submitted by
the Board or other information available to USDA.
Section 930.42(a) of the order authorizes a reserve sufficient to
cover one year's operating expenses. The increased rates are expected
to generate enough income to meet the Board's operating expenses in
2002-2003.
The Board met on January 24, 2002, and unanimously recommended
2002-2003 expenditures of $522,500. The Board also recommended an
assessment rate of $0.0021 per pound of tart cherries utilized in the
production of tart cherry products other than juice, juice concentrate,
and puree products and an assessment rate of $0.00105 per pound for
juice, juice concentrate, and puree products. In comparison, last
year's budgeted expenditures were $442,500. The recommended assessment
rates of $0.0021 and $0.00105 are higher than the current rates of
$0.00175 and $0.000875, respectively. The Board recommended increased
assessment rates to generate larger revenue to meet its expenses and
keep its reserves at an acceptable level.
The order provides that when an assessment rate based on the number
of pounds of tart cherries handled is established, it should provide
for differences in relative market values for various cherry products.
The discussion of this provision in the order's promulgation record
indicates that proponents testified that cherries utilized in high
value products such as frozen, canned, or dried cherries should be
assessed one rate while cherries used to make low value products such
as juice concentrate or puree should be assessed at one-half that rate.
The major expenditures recommended by the Board for the 2002-2003
fiscal period include $85,000 for meetings, $170,000 for compliance,
$185,000 for personnel, $80,000 for office expenses, and $2,500 for
industry educational efforts. Budgeted expenses for those items in
2001-2002 were $80,000 for meetings, $100,000 for compliance, $185,000
for personnel, $75,000 for office expenses, and $2,500 for industry
educational efforts, respectively.
In deriving the recommended assessment rates, the Board determined
assessable tart cherry production for the fiscal period at 260 million
pounds. It further estimated that about 220 million pounds of the
assessable poundage would be utilized in the production of high-valued
products, like frozen, canned, or dried cherries, and that about 15
million pounds would be utilized in the production of low-valued
products, like juice, juice concentrate, or puree. Potential assessment
income from the high valued products would be approximately $462,000
(220 million pounds x $0.0021 per pound). The potential income from
tart cherries utilized for juice, juice concentrate, or puree would be
$15,750 (15 million pounds x $0.00105 per pound). No assessment income
would be received by the Board on approximately 25 million pounds of
the projected production of 260 million pounds of tart cherries.
Cherries used for export and other diversion outlets are exempt from
assessment obligations. Therefore, total assessment income for 2002-
2003 is estimated at $477,750. This amount plus adequate funds in the
reserve and interest income would be adequate to cover budgeted
expenses. Funds in the reserve (approximately $233,000) would be kept
within the approximately six months' operating expenses as recommended
by the Board consistent with Sec. 930.42(a).
The assessment rates established in this rule would continue in
effect indefinitely unless modified, suspended, or terminated by USDA
upon recommendation and other information submitted by the Board or
other available information.
Although the assessment rates are effective for an indefinite
period, the Board will continue to meet prior to or during each fiscal
period to recommend a budget of expenses and consider recommendations
for modification of the assessment rates. The dates and times of Board
meetings are available from the Board or the USDA. Board meetings are
open to the public and interested persons may express their views at
these meetings. USDA would evaluate Board recommendations and other
available information to determine whether modifications of the
assessment rates are needed. Further rulemaking would be undertaken as
necessary. The Board's 2002-2003 budget and those for subsequent fiscal
periods would be reviewed and, as appropriate, approved by the USDA.
The Regulatory Flexibility Act and Effects on Small Businesses
The Agricultural Marketing Service (AMS) has considered the
economic impact of this action on small entities and has prepared this
initial regulatory flexibility analysis. The Regulatory Flexibility Act
(RFA) allows AMS to certify that regulations do not have a significant
economic impact on a substantial number of small entities. However, as
a matter of general policy, AMS's Fruit and Vegetable Programs
(Programs) no longer opts for such certification, but rather performs
regulatory flexibility analyses for any rulemaking that would generate
the interest of a significant number of small entities. Performing such
analyses shifts the Programs' efforts from determining whether
regulatory flexibility analyses are required to the consideration of
regulatory options and economic or regulatory impacts.
The purpose of the RFA is to fit regulatory actions to the scale of
business subject to such actions in order that small businesses will
not be unduly or disproportionately burdened. Marketing orders issued
pursuant to the Act, and the rules issued thereunder, are unique in
that they are brought about through group action of essentially small
entities acting on their own behalf. Thus, both statutes have small
entity orientation and compatibility.
There are approximately 40 handlers of tart cherries who are
subject to regulation under the order and approximately 900 producers
of tart cherries in the regulated area. Small agricultural service
firms have been defined by the Small Business Administration (13 CFR
121.201) as those having annual receipts less than $5,000,000, and
small agricultural producers are those whose annual receipts are less
than $750,000. A majority of the tart cherry handlers and producers may
be classified as small entities.
The Board unanimously recommended 2002-2003 expenditures of
$522,500 and assessment rate increases from $0.00175 to $0.0021 per
pound for cherries that are utilized in the production of tart cherry
products other than juice, juice concentrate, or puree, and from
$0.000875 to $0.00105 per pound for cherries utilized for juice, juice
concentrate, or puree.
This rule would increase the assessment rate established for the
Board and collected from handlers for the 2002-2003 and subsequent
fiscal periods for cherries that are utilized in the production of tart
cherry products other than juice, juice concentrate, or puree from
$0.00175 to $0.0021 per pound, and the assessment rate for cherries
utilized for juice, juice concentrate, or puree from $0.000875 to
$0.00105 per pound. The Board unanimously recommended 2002-2003
expenditures of $522,500. The quantity of assessable tart cherries
expected to be
[[Page 39639]]
produced during the 2002-2003 crop year is estimated at 260 million
pounds. Assessment income, based on this crop, along with interest
income and reserves, would be adequate to cover budgeted expenses.
The major expenditures recommended by the Board for the 2002-2003
fiscal period include $85,000 for meetings, $170,000 for compliance,
$185,000 for personnel, $80,000 for office expenses, and $2,500 for
industry educational efforts. Budgeted expenses for those items in
2001-2002 were $80,000 for meetings, $100,000 for compliance, $185,000
for personnel, $75,000 for office expenses, and $2,500 for industry
educational efforts, respectively.
The Board discussed the alternative of continuing the existing
assessment rates, but concluded that would cause the amount in the
operating reserve to be reduced to an unacceptable level.
The principal demand for tart cherries is in the form of processed
products. Tart cherries are dried, frozen, canned, juiced, and pureed.
Data from the National Agricultural Statistics Service (NASS) states
that during the period 1995/96 through 1999/00, approximately 91
percent of the U.S. tart cherry crop, or 280.5 million pounds, was
processed annually. Of the 280.5 million pounds of tart cherries
processed, 62 percent was frozen, 29 percent was canned, and 9 percent
was utilized for juice.
Based on NASS data, acreage in the United States devoted to tart
cherry production has been trending downward. In the ten-year period,
1987/88 through 1997/98, the tart cherry area decreased from 50,050
acres, to less than 40,000 acres. In 1999/00, approximately 90 percent
of domestic tart cherry acreage was located in four States: Michigan,
New York, Utah and Wisconsin. Michigan leads the nation in tart cherry
acreage with 70 percent of the total. Michigan produces about 75
percent of the U.S. tart cherry crop each year. In 1999/00, tart cherry
acreage in Michigan decreased to 28,100 acres from 28,400 acres the
previous year.
In deriving the recommended assessment rates, the Board estimated
assessable tart cherry production for the fiscal period at 260 million
pounds. It further estimated that about 220 million pounds of the
assessable poundage would be utilized in the production of high-valued
products, like frozen, canned, or dried cherries, and that about 15
million pounds would be utilized in the production of low-valued
products, like juice, juice concentrate, or puree. Potential assessment
income from the high valued products would be approximately $462,000
(220 million pounds X $0.0021 per pound). The potential income from the
tart cherries utilized for juice, juice concentrate, or puree would be
$15,750 (15 million pounds X $0.00105 per pound). No assessment income
would be received by the Board on approximately 25 million pounds of
the projected production of 260 million pounds of tart cherries.
Cherries used for export and other diversion outlets are exempt from
assessment obligations. Therefore, total assessment income for 2002-
2003 is estimated at $477,750. This amount plus adequate funds in the
reserve and interest income should be adequate to cover budgeted
expenses. Funds in the reserve (approximately $233,000) will be kept
within the approximately six months' operational expenses as
recommended by the Board which would be consistent with the order
(Sec. 930.42(a)).
While this action would impose additional costs on handlers, the
costs are in the form of assessments which are applied uniformly. Some
of the costs may also be passed on to producers. However, these costs
are offset by the benefits derived from the operation of the marketing
order. The Board's meeting was widely publicized throughout the tart
cherry industry and all interested persons were invited to attend the
meeting and participate in Board deliberations on all issues. Like all
Board meetings, the January 24, 2002, meeting was a public meeting and
all entities, both large and small, were able to express views on this
issue. Finally, interested persons are invited to submit information on
the regulatory and informational impacts of this action on small
businesses.
This action would impose no additional reporting or recordkeeping
requirements on either small or large tart cherry handlers. 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 rule.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at: http:/
/www.ams.usda.gov/fv/moab.html. Any questions about the compliance
guide should be sent to Jay Guerber at the previously mentioned address
in the FOR FURTHER INFORMATION CONTACT section.
A 30-day comment period is provided to allow interested persons to
respond to this proposed rule. Thirty days is deemed appropriate
because: (1) The 2002-2003 fiscal period begins on July 1, 2002, and
ends on June 30, 2003, and the marketing order requires that the rate
of assessment for each fiscal period apply to all assessable tart
cherries handled during such fiscal period; (2) the Board needs to have
sufficient funds to pay its expenses which are incurred on a continuous
basis; and (3) handlers are aware of this action which was unanimously
recommended by the Board at a public meeting and is similar to other
assessment rate actions issued in past years.
List of Subjects in 7 CFR Part 930
Marketing agreements, Reporting and recordkeeping requirements,
Tart cherries.
For the reasons set forth in the preamble, 7 CFR part 930 is
proposed to be amended as follows:
PART 930--TART CHERRIES GROWN IN THE STATES OF MICHIGAN, NEW YORK,
PENNSYLVANIA, OREGON, UTAH, WASHINGTON, AND WISCONSIN
1. The authority citation for 7 CFR part 930 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. Section 930.200 is revised to read as follows:
Sec. 930.200 Handler assessment rate.
On and after July 1, 2002, the assessment rate imposed on handlers
shall be $0.0021 per pound of cherries handled for tart cherries grown
in the production area and utilized in the production of tart cherry
products other than juice, juice concentrate, or puree. The assessment
rate for juice, juice concentrate, and puree products shall be $0.00105
per pound.
Dated: June 4, 2002.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 02-14405 Filed 6-7-02; 8:45 am]
BILLING CODE 3410-02-P