Tart Cherries Grown in the States of Michigan, et al.; Final Free and Restricted Percentages for the 1997-98 Crop Year for Tart Cherries

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 930

[Docket No. FV97-930-6 FR]

Tart Cherries Grown in the States of Michigan, et al.; Final Free

and Restricted Percentages for the 1997-98 Crop Year for Tart Cherries

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This final rule establishes final free and restricted

percentages for the 1997-98 crop year. The percentages are 55 percent

free and 45 percent restricted. These percentages establish the

proportion of cherries from the 1997 crop which may be handled in

normal commercial outlets and are intended to stabilize supplies and

prices, and strengthen market conditions. The percentages were

recommended by the Cherry Industry Administrative Board (Board), the

body which locally administers the marketing order. The marketing order

regulates the handling of tart cherries grown in the States of

Michigan, New York, Pennsylvania, Oregon, Utah, Washington, and

Wisconsin.

EFFECTIVE DATE: April 28, 1998 through June 30, 1998, and applies to

all tart cherries handled from the beginning of the 1997-98 crop year.

FOR FURTHER INFORMATION CONTACT: Patricia A. Petrella or Kenneth G.

Johnson, Marketing Order Administration Branch, Fruit and Vegetable

Programs, AMS, USDA, room 2525-S, P.O. Box 96456, Washington, DC 20090-

6456; telephone: (202) 720-2491. Small businesses may request

information on compliance with this regulation by contacting: Jay

Guerber, Marketing Order Administration Branch, Fruit and Vegetable

Programs, AMS, USDA, P.O. Box 96456, room 2525-S, Washington, DC 20090-

6456; telephone: (202) 720-2491; Fax: (202) 720-5698.

SUPPLEMENTARY INFORMATION: This final rule is issued under marketing

[[Page 20523]]

agreement and Order No. 930 (7 CFR part 930), regulating the handling

of tart cherries produced in the States of Michigan, New York,

Pennsylvania, Oregon, Utah, Washington, and Wisconsin, hereinafter

referred to as the ``order.'' The order is 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 (Department) 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 provisions now in effect,

final free and restricted percentages may be established for tart

cherries handled by handlers during the crop year. This rule

establishes final free and restricted percentages for tart cherries for

the 1997-98 crop year, beginning July 1, 1997, through June 30, 1998.

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 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 requesting a modification of the order or to be exempt

therefrom. Such 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 in equity to review

the Secretary's ruling on the petition, provided an action is filed not

later than 20 days after the date of the entry of the ruling.

The order prescribes procedures for computing an optimum supply and

preliminary and final percentages that establish the amount of tart

cherries that can be marketed throughout the season. The regulations

apply to all handlers of tart cherries that are in the regulated

districts. Tart cherries in the free percentage category may be shipped

to any market, while restricted percentage tart cherries must be held

by handlers in a primary or secondary reserve, or be diverted in

accordance with section 930.59 or used for exempt purposes under

section 930.62. The regulated Districts for this season are: District

one--Northern Michigan; District two--Central Michigan; District four--

New York; and District seven--Utah. Districts three, five, six, eight

and nine (Southwest Michigan, Oregon, Pennsylvania, Washington, and

Wisconsin, respectively) are not regulated for the 1997-98 season.

The order prescribes under section 930.52 that upon adoption of the

order, those districts to be regulated shall be those districts in

which the average annual production of cherries over the prior three

years has exceeded 15 million pounds. Handlers not meeting the 15

million pound requirement shall not be regulated in such crop year.

Therefore, for this season, handlers in the districts of Oregon,

Pennsylvania, Washington, and Wisconsin are not subject to volume

regulation. In addition, Southwest Michigan handlers are not subject to

volume regulation this season because the estimated production fell

below 50 percent of the average annual processed production in that

district in the previous five years. Southwest Michigan's tart cherry

production was subjected to a freeze during early bud development that

reduced its crop yield for the 1997-1998 crop year.

Section 930.50(a) describes procedures for computing an optimum

supply for each crop year. The Board must meet on or about July 1 of

each crop year, to review sales data, inventory data, current crop

forecasts and market conditions. The optimum supply volume is

calculated as 100 percent of the average sales of the prior three years

to which is added a desirable carryout inventory not to exceed 20

million pounds. The optimum supply represents the desirable volume of

tart cherries that should be available for sale in the coming crop

year.

The order also provides that on or about July 1 of each crop year,

the Board is required to establish preliminary free and restricted

percentages. These percentages are computed by deducting the carryin

inventory from the optimum supply figure (adjusted to raw product

equivalent--the actual weight of cherries handled to process into

cherry products) and dividing that figure by the current year's USDA

crop forecast. The carryin inventory figure reflects the amount of

cherries that handlers actually have in inventory. If the resulting

quotient is 100 percent or more, the Board should establish a

preliminary free market tonnage percentage of 100 percent. If the

quotient is less than 100 percent, the Board should establish a

preliminary free market tonnage percentage equivalent to the quotient,

rounded to the nearest whole percent, with the complement being the

preliminary restricted percentage.

The Board met on June 26-27, 1997, and computed, for the 1997-98

crop year, an optimum supply of 247 million pounds. This number was

calculated by using 270 million pounds for the average three year sales

figure and subtracting 23 million pounds for exports that could have

received diversion credit. The Board recommended that the carryout

figure be zero pounds. Also at the June 26-27 meeting, the Board

established preliminary free and restricted percentages. The Board

calculated the preliminary free and restricted percentages as follows:

The USDA estimate of the crop was 242 million pounds; a 70 million

pound carryin added to that equaled a total available supply of 312

million pounds. The optimum supply was subtracted from the total

estimated available supply resulting in a surplus of 65 million pounds

of tart cherries. The surplus was divided by the production in the

regulated districts and resulted in 66 percent free and 34 percent

restricted for the 1997-98 season. The Board recommended these

percentages by a 17 to 1 vote. No reason was provided for the one

dissenting vote. No rulemaking was necessary at that time. The Board

recommended the percentages and announced them to the industry as

required by the order.

The preliminary percentages were based on the USDA production

estimate and the following supply and demand information for the 1997-

98 crop year:

------------------------------------------------------------------------

Millions of

pounds

------------------------------------------------------------------------

Optimum supply formula:

(1) Average sales of the prior three years ........... 270

(2) Plus carryout......................... ........... 0

(3) Less amount for exports that would

have received diversion credit........... ........... 23

(4) Optimum Supply calculated by the Board

at the June meeting...................... ........... 247

[[Page 20524]]

Preliminary percentages:

(5) Less carryin as of July 1, 1997....... ........... 70

(6) Tonnage requirement for current crop

year..................................... ........... 177

(7) USDA crop estimate.................... ........... 242

(8) Estimated restricted percentage

tonnage (item 7 minus item 6)............ ........... 65

(9) USDA crop estimate for regulated

districts................................ ........... 192

Percentages............................... Free Restricted

(10) Preliminary percentages (item 8

divided by item 9) x 100............... 66 34

------------------------------------------------------------------------

The Board may adjust the estimated crop production as the actual

pack is realized and interim percentages may be announced between July

1 and September 15 of the crop year.

Section 930.50(d) of the order requires the Board to meet no later

than September 15 to recommend final free and restricted percentages to

the Secretary for approval. The Board met on September 11-12, 1997, and

recommended final free and restricted percentages of 55 and 45,

respectively. The Board recommended that the interim percentages and

final percentages be the same percentages. At that time, the Board had

available actual production amounts to review and made the necessary

adjustments to the percentages.

The Secretary establishes final free and restricted percentages

through an informal rulemaking process. These percentages would make

available the tart cherries necessary to achieve the optimum supply

figure calculated earlier by the industry. The difference between any

final free market tonnage percentage designated by the Secretary and

100 percent is the final restricted percentage.

The Board used a revised optimum supply figure of 270 million

pounds for its final percentage calculations because it was determined

that exports of 23 million pounds should not have been deducted from

the average sales figure. At its March 1997 meeting, the Board had

recommended that the Department modify the average sales under the

optimum supply formula by deducting exports from the figure. The

Department did not proceed with that recommendation since the

promulgation record shows that average sales, as defined in the order,

includes sales to all markets, including exports.

The optimum supply, therefore was 270 million pounds. The actual

production recorded by the Board was 284 million pounds, a 42 million

pound increase from the USDA crop estimate. The increase in the crop is

due to very favorable growing conditions in portions of the State of

Michigan this season.

A 70 million pound carryin was subtracted from the optimum supply,

which yields a tonnage requirement for the current crop year of 200

million pounds. Subtracted from the actual production of 284 million

pounds reported by the Board is the tonnage required for the current

crop year (200 million pounds) which results in an 84 million pound

surplus. An adjustment for changed economic conditions of 23 million

pounds was added to the surplus, pursuant to section 930.50(f). This

adjustment is discussed later in this document. This yielded a total

surplus of 107 million pounds of tart cherries. The free and restricted

percentages would only apply to those handlers in regulated districts.

Therefore, the percentages would be calculated by dividing the

restricted tonnage volume by the regulated districts' production. The

total surplus of 107 million pounds is divided by the 239 million pound

volume of tart cherries produced in the regulated districts. This

results in a 45 percent restricted percentage and a corresponding 55

percent free percentage for the regulated districts.

Section 930.51(d) of the order provides that handlers should have a

grace period of up to 30 days to establish their inventory reserves

after final percentages have been established. Therefore, handlers have

30 days after the effective date of this rule to comply with the 45

percent restricted obligation requirement.

The final percentages are based on the Board's reported production

figures and the following supply and demand information for the 1997-98

crop year:

------------------------------------------------------------------------

Millions of

pounds

------------------------------------------------------------------------

Optimum supply formula:

(1) Average sales of the prior three years ........... 270

(2) Plus carryout......................... ........... 0

(3) Optimum Supply calculated by the Board

at the September meeting................. ........... 270

Final percentages:

(4) Less carryin as of July 1, 1997....... ........... 70

(5) Tonnage required current crop year.... ........... 200

(6) Board reported production............. ........... 284

(7) Surplus (item 6 minus item 5)......... ........... 84

(8) Economic adjustment to surplus........ ........... 23

(9) Adjusted surplus (item 7 plus item 8). ........... 107

(10) Production in regulated districts.... ........... 239

Percentages Free Restricted

(11) Final Percentages (item 9 divided by

item 10) x 100........................... 55 45

------------------------------------------------------------------------

As previously mentioned, the Board had made an earlier

recommendation to modify the optimum supply formula by defining average

sales to not include exports that were granted diversion credit. It was

determined that exports

[[Page 20525]]

should not have been excluded. Thus, the Board was unable to make the

23 million pound adjustment this season in the optimum supply. The

Board thus recommended at its September meeting that the marketing

policy be modified due to changes in economic conditions as specified

under section 930.50(e)(5) and (7) and (f). Specifically, the Board

recommended that the proviso in Sec. 930.59(b) of the order be

suspended for the 1997-98 year only and that diversion credit for

exports of juice and juice concentrate be allowed for the 1997-98 crop

year.

Also, at its meeting in March 1997, the Board recommended that

handler exports of cherry products, including juice and juice

concentrate, to countries other than Canada, Mexico, and Japan, receive

diversion credit. During the production and processing of the crop,

handlers have exported, or have contracted to export, tart cherry

products, including juice or juice concentrate, and were operating

under the impression that they could apply for and receive, diversion

credit for such sales. Many of these exports were for the purpose of

expanding existing markets or developing new markets. This issue was

further addressed in a separate rulemaking action (see 63 FR 399,

January 6, 1998).

By recommending the marketing policy modification, the Board

believed that it would provide stability to the marketplace and the

industry would be in a better situation for future years since new

markets will have been developed. Board members discussed at that

meeting that, if this adjustment is not made, growers could be paid

less than their production costs, because handlers could suffer

financial losses that would be passed on to growers. Handlers would

have to meet their reserve obligations by other means. In addition, the

value of cherries already in inventory could be depressed by 20 to 50

percent due to the abundant supply of available cherries, a result

inconsistent with the intent of the order and the Act.

The changes in economic conditions that justified the recommended

marketing policy modification are as follows: (1) The determination

that export sales could not be removed from the optimum supply formula

calculation was made late in the season; (2) handlers had made

marketing plans, sales and sales commitments (including exports) based

on the Board's recommendations made in March and June; and (3) prices

received for tart cherries and tart cherry products could be severely

impacted by an additional large volume of cherries being made available

to the market when there is already an abundant supply of cherries.

The Department's ``Guidelines for Fruit, Vegetable, and Specialty

Crop Marketing Orders'' specify that 110 percent of recent years' sales

should be made available to primary markets each season before

recommendations for volume regulation are approved. This goal is met by

the establishment of a final percentage which releases 100 percent of

the optimum supply and the additional release of tart cherries provided

under section 930.50(g). This release of tonnage, equal to 10 percent

of the average sales of the prior three years sales, is made available

to handlers each season. The Board recommended that such release shall

be made available to handlers the first week of December and the first

week of May. Handlers can decide how much of the 10 percent release

they would like to receive during the December and May release dates.

Once released, such cherries are released for free use by such handler.

Approximately 27 million pounds will be made available to handlers this

season in accordance with Department Guidelines. This release would be

made available to every handler and released to such handler in

proportion to its percentage of the total regulated crop handled. If

such handler does not take such handler's proportionate amount, such

amount shall remain in the inventory reserve.

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

final regulatory flexibility analysis. The Regulatory Flexibility Act

(RFA) would allow 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' Fruit and Vegetable

Programs (Programs) no longer opt for such certification, but rather

perform 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 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 tart cherry marketing order and

approximately 1,220 producers of tart cherries in the regulated area.

Small agricultural service firms, which include handlers, have been

defined by the Small Business Administration (13 CFR 121.601) as those

having annual receipts of less than $5,000,000, and small agricultural

producers are defined as those having annual receipts of less than

$500,000.

Board and subcommittee meetings are publicized in advance and are

held in a location central to the production area. The meetings are

open to all industry members (including small business entities) and

other interested persons--who are encouraged to participate in the

deliberations and voice their opinions on topics under discussion.

Thus, Board recommendations usually represent the interests of both

small and large business entities in the industry.

The principal demand for tart cherries is in the form of processed

products. Tart cherries are dried, frozen, canned, juiced and pureed.

During the period 1993/94 through 1996/97, approximately 94 percent of

the U.S. tart cherry crop, or 285.7 million pounds, was processed

annually. Of the 285.7 million pounds of tart cherries processed, 63

percent was frozen, 32 percent canned and 3 percent utilized for juice.

The remaining 2 percent was dried or assembled into juice packs.

Based on National Agricultural Statistics Service data, acreage in

the United States devoted to tart cherry production has been trending

downward since the 1991/92 season. In the ten-year period, 1986/87

through 1996/97, tart cherry area decreased from 48,180 acres, to less

than 42,000 acres. Approximately 78 percent of domestic tart cherry

acreage is located in four States: Michigan, New York, Utah and

Wisconsin. Michigan leads the nation in tart cherry acreage with 65

percent of the total. Michigan produces about 72 percent of the U.S.

tart cherry crop each year. In 1996/97, tart cherry acreage in Michigan

was down 2,700 acres, to 27,300.

In crop years 1986 through 1993, tart cherry production ranged from

a high of 359 million pounds in 1987 to a low of 189.9 million pounds

in 1991. The price per pound to tart cherry growers ranged from a low

of 7.3 cents in 1987 to a high of 46.4 cents in 1991. These problems of

[[Page 20526]]

wide supply and price fluctuation in the tart cherry industry are

national in scope and impact. Growers testified during the order

promulgation process that the average prices of 12 to 17 cents per

pound which they received during this period did not come close to

covering the costs of production for the vast majority of tart cherry

growers. They also testified that production costs for most growers

range between 20 and 22 cents per pound, which is well above average

prices received.

As previously stated, this is the first year of operation for this

marketing order. The industry demonstrated a need for such order during

the promulgation process because large variations in annual tart cherry

supplies tend to lead to disorderly marketing. As a result of these

fluctuations in supply and price, growers receive less income for their

tart cherries. The industry, therefore, chose a volume control

marketing order to even out these wide variations in supply and improve

returns to growers. During the promulgation process, proponents

testified that small growers and processors would have the most to gain

from implementation of a marketing order because many such growers and

handlers have been going out of business over most of the last eight

years due to low tart cherry prices. They also testified that, since an

order would help increase grower returns, this should increase the

buffer between business success and failure because small growers and

handlers tend to be less capitalized than larger growers and handlers.

In discussing the possibility of marketing percentages for the

1997-98 crop year, the Board considered: (1) The estimated total

production of tart cherries; (2) the estimated size of the crop to be

handled; (3) the expected general quality of such cherry production;

(4) the expected carryover as of July 1 of canned and frozen cherries

and other cherry products; (5) the expected demand conditions for

cherries in different market segments; (6) supplies of competing

commodities; (7) an analysis of economic factors having a bearing on

the marketing of cherries; (8) the estimated tonnage held by handlers

in primary or secondary inventory reserves; and (9) any estimated

release of primary or secondary inventory reserve cherries during the

crop year.

The Board's review of the factors resulted in the computation and

announcement in July 1997 of preliminary free and restricted

percentages, and subsequent recommendation of interim and final

percentages at its September meeting.

The Board recognized that the demand for tart cherries is inelastic

at high and low levels of production. At the extremes, different

factors become operational. The promulgation record states that in very

short crops there is limited but sufficient exclusive demand for

cherries that can cause processor prices to double and grower prices to

triple. In the event of large crops, there seems to be no price low

enough to expand tart cherry sales in the marketplace sufficient to

market the crops.

The Board discussed alternatives to this recommendation. The Board

discussed the feasibility of not having volume regulation this season.

However, it was the Board's overall feeling that no volume regulation

would be detrimental to the tart cherry industry. Returns to growers

would probably not cover their production costs for this season.

The Board also discussed not granting exemptions, and diversion

credit for such exemptions, for exports to eligible countries

(including juice and juice concentrate), other exempt uses, and

charitable donations. However, the Board felt this would not be in the

best interest of the industry or the public. The Board expressed that

not allowing the export and other exemptions would have a detrimental

effect on the market this season if free and restricted percentages are

imposed. Without such exemptions and diversion credits for export

sales, new market development and other specified uses, about 50

million pounds of cherries would not be removed from the domestic

market this season, depressing grower returns for all cherries. The

marketing order was designed to increase grower returns by stabilizing

supplies with demand as well as stabilizing prices and creating a more

orderly and predictable marketing environment. Expanding markets and

developing new products is key to meeting this marketing order's goals.

Not granting exemptions and diversion credit for exports to

countries other than Canada, Mexico, and Japan was also discussed at

Board meetings. However, the Board expressed that this recommendation

is very important to creating stable conditions in the export

marketplace this season and would encourage future market growth. The

Board further stated that such action will improve returns to growers

because of the tremendous growth in the export market this season.

Exemptions and diversion credit have been addressed in other rulemaking

actions.

As mentioned earlier, the Department's ``Guidelines for Fruit,

Vegetable, and Specialty Crop Marketing Orders'' specify that 110

percent of recent years' sales should be made available to primary

markets each season before recommendations for volume regulation are

approved. The quantity available under this rule is 110 percent of the

quantity shipped in the prior three years.

The free and restricted percentages established by this rule

release the optimum supply and apply uniformly to all regulated

handlers in the industry, regardless of size. There are no known

additional costs incurred by small handlers that are not incurred by

large handlers. The stabilizing effects of the percentages impact all

handlers positively by helping them maintain and expand markets,

despite seasonal supply fluctuations. Likewise, price stability

positively impacts all producers by allowing them to better anticipate

the revenues their tart cherries will generate.

While the level of benefits of this rulemaking are difficult to

quantify, the stabilizing effects of the volume regulations impact both

small and large handlers positively by helping them maintain markets

even though tart cherry supplies fluctuate widely from season to

season.

In compliance with Office of Management and Budget (OMB)

regulations (5 CFR part 1320) which implement the Paperwork Reduction

Act of 1995 (Pub. L. 104-13), the information collection and

recordkeeping requirements have been previously approved by OMB and

assigned OMB Number 0581-0177.

There are some reporting, recordkeeping and other compliance

requirements under the marketing order. The reporting and recordkeeping

burdens are necessary for compliance purposes and for developing

statistical data for maintenance of the program. The forms require

information which is readily available from handler records and which

can be provided without data processing equipment or trained

statistical staff. As with other, similar marketing order programs,

reports and forms are periodically studied to reduce or eliminate

duplicate information collection burdens by industry and public sector

agencies. This final rule does not change those requirements.

The Department has not identified any relevant Federal rules that

duplicate, overlap, or conflict with this regulation.

A proposed rule concerning this action was published in the Federal

Register on Wednesday, January 21, 1998 (63 FR 3048). Copies of the

rule were also mailed or sent via facsimile to

[[Page 20527]]

all Board members and cherry handlers. Finally, the rule was made

available through the Internet by the Office of the Federal Register.

A 15-day comment period was provided to allow interested persons to

respond to the proposal. Fifteen days was deemed appropriate because a

rule finalizing the action would need to be in place as soon as

possible since handlers are currently marketing 1997-98 crop cherries.

One comment was received during the comment period in response to

the proposal. The comment addressed the proposed rule published in the

Federal Register on January 21, 1998, concerning final free and

restricted percentages which are being finalized in this rulemaking.

The commenter represents a tart cherry association in the State of

Oregon. The comment also responded to a request for comments made in

the interim final rule published in the Federal Register on January 6,

1998 (63 FR 399). That document established regulations for handler

diversion and included a temporary suspension of order provisions. To

the extent that the comment addressed issues relating to the January 6,

1998, publication, that portion of the comment will be discussed, as

appropriate, in the final action concerning that document which will be

published separately from this action.

With respect to the proposed rule which preceded this action, the

commenter disagreed with a statement contained in the initial

regulatory flexibility analysis and that also appears in the final

regulatory flexibility analysis in this action. The statement indicated

that Board meetings are widely publicized in advance and are held in a

location central to the production area. The commenter stated that to

date meetings have been central only to those producers and handlers in

the Michigan districts. No fewer than five Board members and their

alternates spend almost a full day commuting to Board meetings.

Secondly, the commenter commented that access to the meetings is

limited to those who have the resources of money and time to make such

a commitment. Most of those present represent large growers and

handlers. The commenter believes that Board recommendations usually

represent the interests of primarily large business entities. The

commenter also stated that the Board does a poor job of publicizing

Board and subcommittee meetings. To the commenter's knowledge, meetings

are announced among participants and in no way are published in

agricultural or business trade journals or newspapers in the production

districts. According to the commenter, growers and handlers are not

receiving a notice of all meetings. Finally, the commenter urged the

Department to rule on the identity and nature of CherrCo, Inc., a new

entity in the tart cherry industry, as it relates to the Federal tart

cherry marketing order.

In regard to the commenter's first issue of meetings being held in

a location central to the production, the Board also has to consider

the cost of travel for all Board members since the Board pays travel

expenses for all of its members. The first meetings held in December of

1996 and throughout 1997 were attended by all members and their

alternates. A Board recommendation was passed that the start-up

meetings be attended by the alternates so they would be involved and

aware of Board activities. It would have resulted in considerable

expense to the Board to hold the meetings outside of Michigan since 16

members and alternates are from the State of Michigan. The Board

realizes the time spent in travel could be inconvenient for some of the

other Board members and has made a commitment to hold the June

marketing policy meeting in Michigan and the September marketing policy

meeting in a district outside of Michigan. The Board is also committed

to holding meetings outside the Michigan districts to allow producers

and handlers to attend the meetings and cut down on travel time for

those not located in Michigan.

In regard to the second issue raised by the commenter concerning

access to the meetings being limited to those who have money and time

to commit, the meetings held in Michigan were held frequently to do the

groundwork needed to implement the many marketing order authorities. It

was more cost effective to the industry to have such meetings in

Michigan. As previously mentioned, the Board pays all travel costs for

its members and 16 Board members and alternates are from Michigan.

Growers and handlers are welcome to attend these meetings. The Board

has made the commitment to rotate meeting sites throughout the

production area to allow growers and handlers from other districts to

participate. Recommendations are not made by the Board for only the

benefit of large growers and handlers. The Board, which is comprised of

small entities, discusses the impacts of such recommendations on small

and large growers and handlers. The Board has been given the

responsibility to make recommendations that benefit the industry as a

whole.

In regard to the commenter's contention that the Board does a poor

job of publicizing Board and subcommittee meetings, we disagree. The

Board has and will continue to take appropriate action to provide the

widest possible notice of upcoming meetings to all handlers and Board

members and alternate Board members. The Board sends meeting notices to

all Board members and several tart cherry industry organizations. In

fact, the Board is currently developing a newsletter which will be

distributed to all growers and handlers of record to further publicize

upcoming Board meetings.

Finally, in regard to the CherrCo issue, the Department is

continuing to work with the Board on this issue. This issue will be

addressed separately.

Accordingly, no changes will be made to the rule as proposed, based

on the comments received.

After consideration of all relevant matter presented, including the

information and recommendation submitted by the Board and other

available information, it is hereby found that this rule, as

hereinafter set forth, will tend to effectuate the declared policy of

the Act.

It is further found that good cause exists for not postponing the

effective date of this rule until 30 days after publication in the

Federal Register (5 U.S.C. 553) because handlers are currently

marketing 1997-98 tart cherries. Further, handlers are aware of this

rule, which was recommended at a public meeting. Also, a 15-day comment

period was provided for in the proposed rule.

List of Subjects in 7 CFR Part 930

Marketing agreements, Tart cherries, Reporting and recordkeeping

requirements.

For the reasons set forth in the preamble, 7 CFR Part 930 is

amended to read 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. A new subpart--Supplementary Regulations and a new section

930.250 are added to read as follows:

Sec. 930.250 Final free and restricted percentages for the 1997-98

crop year.

The final percentages for tart cherries handled by handlers in

volume

[[Page 20528]]

regulated districts during the crop year beginning on July 1, 1997,

which shall be free and restricted, respectively, are designated as

follows: Free percentage, 55 percent and restricted percentage, 45

percent.

Dated: April 20, 1998.

Robert C. Keeney,

Deputy Administrator, Fruit and Vegetable Programs.

[FR Doc. 98-11023 Filed 4-24-98; 8:45 am]

BILLING CODE 3410-02-P