Tart Cherries Grown in the States of Michigan, et al.; Revision of the Sampling Techniques for Whole Block and Partial Block Diversions and Increasing the Number of Partial Block Diversions Per Season for Tart Cherries

Federal RegisterSep 20, 1999

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 930

[Docket No. FV99-930-2 FIR]

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

of the Sampling Techniques for Whole Block and Partial Block Diversions

and Increasing the Number of Partial Block Diversions Per Season for

Tart Cherries

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (Department) is adopting, as a

final rule, without change, the provisions of an interim final rule

revising the sampling techniques for whole and partial block diversions

and increasing the number of allowable partial block diversions under

the Federal marketing order for tart cherries. This rule continues in

effect making the voluntary grower diversion program more flexible for

grower participants. The order regulates the handling of tart cherries

grown in the States of Michigan, New York, Pennsylvania, Oregon, Utah,

Washington, and Wisconsin and is administered locally by the Cherry

Industry Administrative Board (Board).

EFFECTIVE DATE: October 20, 1999.

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

Johnson, Marketing Order Administration Branch, F&V, AMS, USDA, room

2530-S, P.O. Box 96456, Washington, DC 20090-6456, telephone: (202)

720-2491.

Small businesses may request information on complying 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; or E-mail: Jay.G[email protected].

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.'' This 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 or USDA) is issuing this

rule in conformance with Executive Order 12866.

This rule has been reviewed under Executive Order 12988, Civil

Justice Reform. This rule is not intended to have retroactive effect.

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 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 the date of the entry of the ruling.

This rule continues in effect modifications to the handling

regulations that revise the sampling techniques used in determining the

amount of production diverted from whole blocks and partial blocks of

cherry trees, and increases the number of allowable partial block

diversions per season under the order. Whole block diversion results

when an entire orchard block is left unharvested. Partial block

diversion occurs when a contiguous portion of a definable block is

diverted. An orchard block is defined as a group of cherry trees of

similar age, with rows aligned in the same direction, and having

definable boundaries (e.g., roads, ditches, or other permanent

landmarks).

Section 930.58 of the tart cherry marketing order provides

authority for voluntary grower diversion. Growers can divert all or a

portion of their cherries which otherwise, upon delivery to a handler,

would be subject to volume regulation. One of the ways handlers can

satisfy their restricted percentage obligations is by redeeming grower

diversion certificates. After the Board confirms that the grower

diverted his/her crop, the Board issues a diversion certificate to the

grower stating the weight of cherries diverted. The grower can present

the certificate to a handler in lieu of actual cherries. The handler,

in turn, can present the certificate to the Board. The Board then

applies the weight of cherries represented by the certificate against

the handler's restricted percentage obligation, which reduces the

handler's restricted obligation.

Section 930.158 provides rules and regulations for grower

diversion. Included in this section are procedures and deadline dates

for applying for diversion and choosing the type of diversion available

to growers. There are four types of diversion-random row, whole block,

partial block, and in-orchard tank. This rule only makes changes to the

whole and partial block diversion.

Grower applications for diversion must be filed by April 15 and

growers must inform the Board by July 1 whether they elect to whole or

partial block divert their tart cherries. If whole block or partial

block diversion is not selected by July 1, the grower would have to

choose the random row method or the in-orchard tank methods of

diversion.

In whole and partial block diversion, the quantity of the fruit

diverted is determined by application of a statistical sampling

protocol. Prior to the issuance of the interim final rule published

June 7, 1999, (64 FR 30229), Sec. 930.158 specified that, if a block

had 5 rows or less, 3 rows were randomly chosen to be sampled. If a

block had 6 to 15 rows, 4 rows were randomly chosen to be sampled. If a

block had 16 or more rows, 5 rows were randomly chosen to be sampled.

The rows chosen had to be contiguous, and 10 contiguous tree sites were

sampled from each row.

During its review of the grower diversion program the Board

concluded that the sampling procedure mentioned above, which is based

solely on the number of rows in a block, required more trees to be

sampled on smaller blocks or on blocks that had shorter rows than was

necessary to accurately determine the amount of tart cherries diverted.

The Board determined that a sample size of approximately 10 to 15

percent, which had been taken on larger orchard blocks with more trees

in a row, was adequate to accurately calculate the quantity of fruit

diverted from such orchard blocks. Therefore, the Board recommended

that the regulations be amended so that the sample taken from both

large and small orchard blocks would be about 10 to 15 percent.

To achieve this goal, the Board recommended that the sampling

procedure be revised by taking into account the number of rows and

number of tree sites in each particular block. The sampling method used

would be

[[Page 50746]]

the one requiring the smaller number of trees. A tree site is a planted

tree or an area where a tree was planted and may have been uprooted or

died. The revised sampling procedure continues in effect as follows: If

a block has 5 rows or less, or 200 or less tree sites, 3 rows would be

randomly chosen to be sampled. If a block has 6 to 15 rows or 201-400

tree sites, 4 rows would be randomly chosen to be sampled. If a block

has 16 or more rows and greater than 400 tree sites, 5 rows would be

randomly chosen to be sampled. This procedure is expected to result in

a sample size of about 12 to 15 percent whether the orchard block has

long rows or short rows.

For example, under the old sampling criteria, if a grower had 10

rows with 20 tree sites per row (10 x 20 equals 200 tree sites), 4

rows would have to be sampled. Under the revised rules in effect, only

3 rows would have to be sampled since there are 200 tree sites.

As required, prior to sampling, the grower must notify the Board to

allow observation of the sampling process by a compliance officer. The

sampling method used would continue to be the one requiring the smaller

number of trees to be sampled. The compliance officer will use an

orchard map in determining how many trees to sample.

To determine the yield for whole block diversion when five rows are

to be sampled, 10 contiguous tree sites in each of the five rows are

sampled. A total of 50 tree sites would be sampled ((10 original tree

sites) x (5 rows)=50 trees). If a total of 4,600 pounds is harvested

from the sample trees and this is divided by 50 tree sites, a yield of

92 pounds per tree site will be obtained. The yield for the block is

found by multiplying the calculated 92 pounds per tree site yield by

the 880 trees that were mapped in the block to yield 80,960 pounds for

that block.

For partial block diversion, the yield for the partial block is

found by multiplying the calculated pounds per tree site yield by the

number of trees in the rows mapped in the partial block. Partial blocks

shall consist of contiguous rows.

After harvest, the compliance officer could again visit the

grower's orchard to verify that diversion actually took place. A

diversion certificate would be issued for an amount equal to the volume

of cherries diverted. The grower could then present the certificate to

a handler to be redeemed.

The second change to the regulations that continue in effect

increased the number of partial blocks that growers may divert each

season. Partial block diversion is when a contiguous portion of a

definable block is diverted. Using this method of diversion, a grower

having a block with 35 rows could divert contiguous rows 1 through 22

and harvest rows 23 through 35. Section 930.158(b)(3) previously

limited the number of partial block diversions to one partial block

diversion for each grower per year. This limitation was intended to

alleviate the time that compliance officers needed to spend observing

sampling and diversion activities at growers' orchards and the

administrative costs involved.

After one year of diversion under these rules, the Board

reevaluated the program and determined that the number of partial block

diversions per grower per year could be increased from one to five, or

50 percent of a producer's total number of blocks. For example, if a

grower had 12 separate orchard blocks mapped by the Board, such grower

would now be able to divert up to 6 partial blocks. After reviewing

last year's operations, the Board believed that its administrative

costs would not increase materially by making this change. Because this

method of diversion allows growers to divert cherries based on quality,

the Board further believed that the ability to take advantage of

partial block diversion on a larger scale would continue to foster

increased participation in the voluntary program.

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 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. The number of reported tart

cherry producers in the regulated area is lower this crop year than in

previous years (down from 1,220 producers) due to the Board receiving

more accurate producer information. Small agricultural service firms,

which includes 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. The majority of handlers

and producers of tart cherries may be classified as small entities.

A small business guide on complying with fruit, vegetable, and

specialty crop marketing agreements and orders may be viewed at the

following website: 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.

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 1994/95 through 1998/99, approximately 90 percent of

the U.S. tart cherry crop, or 288.3 million pounds, were processed

annually. Of the 288.3 million pounds of tart cherries processed, 63

percent was frozen, 25 percent canned and 4 percent utilized for juice.

The remaining 8 percent was dried or assembled into juice packs.

In 1998, 37.7 million pounds of cherries were diverted in the

orchard. Of that total, 16.3 million pounds were whole block diversions

and 8.4 million were partial block diversions. The balance of the

grower diversions was random row and in-orchard tank diversions.

Section 930.58 of the tart cherry marketing order provides

authority for voluntary grower diversion. Growers can divert all or a

portion of their cherries which otherwise, upon delivery to a handler,

would be subject to volume regulation. One of the ways handlers can

satisfy their restricted percentage obligations is by redeeming grower

diversion certificates. After the Board confirms that the grower

diverted his/her crop, the Board issues the grower a diversion

certificate stating the weight of cherries diverted. The grower

[[Page 50747]]

can then present the certificate to a handler in lieu of actual

cherries. The handler, in turn, can present the certificate to the

Board. The Board then applies the weight of cherries represented by the

certificate against the handler's restricted percentage obligation,

which reduces the handler's restricted obligation.

Section 930.158 provides rules and regulations for grower

diversion. Included in this section are procedures and dates for

applying for diversion. There are four types of diversion. However,

this action only makes changes to the rules and regulations for whole

and partial block diversion.

Grower applications for diversion must be filed by April 15 and

growers must inform the Board by July 1 whether they elect to whole or

partial block divert their tart cherries. If whole block or partial

block diversion is not selected by July 1, the grower would have to

choose the random row method or the in-orchard tank methods of

diversion.

In whole and partial block diversion, the quantity of the fruit

diverted is determined by application of a statistical sampling

protocol. Prior to the issuance of the interim final rule published

June 7, 1999, (64 FR 30229), Sec. 930.158 specified that, if a block

had 5 rows or less, 3 rows were randomly chosen to be sampled. If a

block had 6 to 15 rows, 4 rows were randomly chosen to be sampled. If a

block had 16 or more rows, 5 rows were randomly chosen to be sampled.

Ten contiguous tree sites were sampled from each row.

During its review of the grower diversion program, the Board

concluded that the sampling procedure mentioned previously, which was

based solely on the number of rows in a block, required more trees to

be sampled on smaller blocks or on blocks that had shorter rows than

was necessary to accurately determine the amount of tart cherries

diverted. The Board determined that a sample size of approximately 10

to 15 percent, which had been taken on larger orchard blocks with more

trees in a row, was adequate to accurately calculate the quantity of

fruit diverted from such orchard blocks. That sample size could easily

be twice as large in small orchards having fewer trees per row.

Therefore, the Board recommended that the regulations be amended so

that the sample taken from both large and small orchard blocks would be

about 10 to 15 percent.

To achieve this goal, the Board recommended that the sampling

procedure be revised by taking into account the number of rows and

number of tree sites in each particular block. The sampling method used

would be the one requiring the smaller number of trees. A tree site is

a planted tree or an area where a tree was planted and may have been

uprooted or died. The revised sampling procedure continues in effect as

follows: If a block has 5 rows or less, or 200 or less tree sites, 3

rows would be randomly chosen to be sampled. If a block has 6 to 15

rows or 201-400 tree sites, 4 rows would be randomly chosen to be

sampled. If a block has 16 or more rows and greater than 400 tree

sites, 5 rows would be randomly chosen to be sampled. This procedure is

expected to result in a sample size of about 12 to 15 percent whether

the orchard block has long rows or short rows.