This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

34411

Vol. 65, No. 104

Tuesday, May 30, 2000

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 929

[Docket No. FV00–929–2 PR]

Cranberries Grown in the States of

Massachusetts, Rhode Island,

Connecticut, New Jersey, Wisconsin,

Michigan, Minnesota, Oregon,

Washington and Long Island in the

State of New York; Establishment of

Marketable Quantity and Allotment

Percentage and Other Modifications

Under the Cranberry Marketing Order

AGENCY: Agricultural Marketing Service,

USDA.

ACTION: Proposed rule.

SUMMARY: This rule would establish the

quantity of cranberries that handlers

may purchase from, or handle for,

growers during the 2000–2001 crop

year, which begins on September 1,

2000, and ends on August 31, 2001. The

Cranberry Marketing Committee

(Committee), the agency responsible for

local administration of the cranberry

marketing order, recommended a

marketable quantity of 5.4 million

barrels and an allotment percentage of

85 percent. This rule invites comments

on the Committee’s recommendation as

well as two alternative levels of

regulation being proposed by the

Department. This action is designed to

stabilize marketing conditions and

improve grower returns. Fresh and

organically-grown cranberries would be

exempt from the volume limitations to

facilitate marketing of these products.

Also proposed are improvements in the

way producer allotments are calculated,

including proposals initiated by the

Department to revise the way in which

growers’ sales histories are computed

and to suspend certain dates in the

order which are impractical.

DATES: Comments must be received by

June 14, 2000.

ADDRESSES: Interested persons are

invited to submit written comments

concerning this rule. Comments must be

sent to the Docket Clerk, Fruit and

Vegetable Programs, AMS, USDA, room

2525–S, P.O. Box 96456, Washington,

DC 20090–6456, Fax: (202) 720–5698 or

E-mail: moab.docketclerk@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 the following website:

www.ams.usda.gov/fv/moab.html.

FOR FURTHER INFORMATION CONTACT:

Patricia A. Petrella or Kenneth G.

Johnson, DC Marketing Field Office,

Fruit and Vegetable Programs, AMS,

USDA, Suite 5D03, Unit 155, 4700 River

Road, Riverdale, Maryland 20737,

telephone: (301) 734–5243; Fax: (301)

734–5275; or Anne M. Dec, 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, Fax: (202) 720–5698.

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.Guerber@usda.gov.

SUPPLEMENTARY INFORMATION: This

proposal is issued under Marketing

Order No. 929 [7 CFR Part 929], as

amended, regulating the handling of

cranberries grown in Massachusetts,

Rhode Island, Connecticut, New Jersey,

Wisconsin, Michigan, Minnesota,

Oregon, Washington, and Long Island in

the State of New York. 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.’’

Question and Answer Overview

What Are Marketing Orders?

Marketing orders are rules which are

authorized under the Agricultural

Marketing Agreement Act of 1937 and

which are based on evidence developed

at a formal hearing. Marketing orders

help fruit and vegetable growers work

together to solve marketing problems

that cannot be solved individually.

Industries voluntarily enter into these

programs and choose to have Federal

oversight of certain aspects of their

operations.

The cranberry industry has operated

under a marketing order since 1962. The

order’s primary regulatory authority is

volume control, utilizing either a

producer allotment program, or

establishing a withholding percentage

where the amount of cranberries that

handlers can handle is limited. The

order also authorizes reporting and

record keeping activities related to the

gathering of statistical information and

supporting volume control activities, as

well as research and promotion

activities. Volume control has not been

used since 1971.

The Committee, which is responsible

for local administration of the order,

recommended this action to stabilize

marketing conditions and improve

grower returns. The Department is also

proposing some changes in the way the

volume control program would be

implemented to improve the process.

Who Would Be Affected by This Action?

Growers and handlers/processors

located in the 10-State production area

would be affected by this action. The

10-State production area covers

cranberries grown in Massachusetts,

Rhode Island, Connecticut, New Jersey,

Wisconsin, Michigan, Minnesota,

Oregon, Washington, and Long Island in

the State of New York.

Why Is Volume Control Being

Recommended for This Year?

The Committee recommended volume

control this year in order to address the

serious oversupply situation being

experienced by the industry. For the

1999 crop year, industry reports show

that continued low grower prices will

accompany record high production and

inventories. Many cranberry growers are

experiencing difficulties dealing with

these extreme market conditions. The

Committee recommended implementing

volume regulations at its March 30,

2000, meeting in Minneapolis,

Minnesota.

The Committee determined the best

method of volume control would be the

producer allotment program which

provides for an annual marketable

quantity and allotment percentage.

The use of volume control is not the

only avenue that could be used to

address the oversupply situation being

34412 Federal Register / Vol. 65, No. 104 / Tuesday, May 30, 2000 / Proposed Rules

experienced by the industry. The

industry is also looking into methods of

increasing demand by developing new

markets, both domestic and foreign, by

developing new products and by

increasing promotional efforts.

What Is Marketable Quantity and

Allotment Percentage?

Marketable quantity is defined as the

number of pounds of cranberries needed

to meet total market demand and to

provide for an adequate carryover into

the next season. The Committee

determined that the marketable quantity

for the 2000–2001 crop year should be

established at 5.4 million barrels. This

is equal to the expected demand for fruit

for processing.

The allotment percentage equals the

marketable quantity divided by the total

of all growers’ sales histories. Total

growers’ sales histories were set at 6.35

million barrels. Using the formula

established under the order (5.4 million

barrels divided by 6.35 million barrels),

the annual allotment percentage is 85

percent.

The Department is proposing a change

in the way sales histories are calculated,

which would bring the industry total to

7.6 million barrels. Using the 5.4

million barrel marketable quantity

recommended by the Committee would

yield an allotment percentage of 71

percent. To keep the allotment

percentage at the level recommended by

the Committee (85 percent), the

marketable quantity would have to be

increased to 6.46 million barrels.

Comments are invited on the

Committee’s proposed recommendation

for setting a volume regulation for the

2000 cranberry crop and on the two

alternative methods proposed by the

Department.

Sales of fresh and organically-grown

fruit would be exempt from the

proposed volume regulation. In

addition, the Committee and the

Department recommended other

modifications to implement volume

regulation.

How Are Growers’ Annual Allotments

Calculated?

A grower’s annual allotment is the

result of multiplying the individual

grower’s sales history by the allotment

percentage.

How Are Sales Histories Calculated?

The Cranberry Marketing Committee

(Committee) is responsible for

calculating each grower’s sales history

on an annual basis. For growers with

existing cranberry acreage, sales history

is established by computing an average

of the best four years’ sales out of the

last six years’ sales. For growers with

four years or less of commercial sales

history, the sales history is calculated by

averaging all available years of such

grower’s sales. A grower with no sales

history would be issued allotment based

on the State average yield per acre or the

total estimated commercial sales,

whichever is greater. For the 2000–2001

crop, the State average yield would be

defined as the average State yield for the

year 1997 or the average of the best four

years out of the last six years, whichever

is greater.

The Department is proposing a change

in this calculation. For all existing

growers, sales histories would be based

on the best year out of the last six. For

a grower with less than six years of

sales, the sales history would be the

highest year of sales available. Growers

with no sales history would be issued

allotment as described in the previous

paragraph.

How Can I Comment on This Action?

Interested persons have 15 days from

the date of publication of the proposed

rule to file written comments. Such

comments should be sent to: Docket

Clerk, Fruit and Vegetable Programs,

AMS, USDA, room 2525–S, P.O. Box

96456, Washington, DC 20090–6456,

Fax: (202) 720–5698 or E-mail:

moab.docketclerk@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 the following website:

www.ams.usda.gov/fv/moab.html. In

addition, 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.Guerber@usda.gov.

When Will This Action Be Effective?

After the 15-day comment period

ends, the Department will analyze the

comments and issue its decision.

Depending on the results of its analysis

of the rulemaking proceeding, the

Department could issue a final rule

similar to, or the same as, this proposal.

It could also issue a rule with

appropriate modifications, based on the

comments and on the rulemaking

record, or it could terminate this

rulemaking. In rare instances, the

Department has issued a second

proposal. Any final rule would be

effective for the 2000–2001 crop year

which begins on September 1, 2000. It

would affect all current growers and

handlers of cranberries in the

production area.

Executive Orders 12866 and 12998

The Department of Agriculture

(Department) is issuing this proposed

rule in conformance with Executive

Order 12866.

This proposal has been reviewed

under Executive Order 12988, Civil

Justice Reform. Under the marketing

order provisions now in effect, a

marketable quantity and allotment

percentage may be established for

cranberries during the crop year. This

rule would establish a marketable

quantity and allotment percentage for

cranberries for the 2000–2001 crop year

beginning September 1, 2000, through

August 31, 2001. This proposal 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 date of the entry

of the ruling.

This proposal invites comments on

establishing a marketable quantity and

allotment percentage for the 2000–2001

crop year. This action would also

exempt fresh and organically-grown

cranberries from volume regulation,

define State average yield per acre,

increase the barrels per acre for

determining a commercial crop, and

revise the Committee review procedures

for re-determination of sales histories.

These actions were recommended by

the Committee at its March 30, 2000,

meeting. The volume regulation would

be in effect September 1, 2000, through

August 31, 2001.

This action also invites comments on

two proposals being suggested by the

Department. The first would change the

Federal Register / Vol. 65, No. 104 / Tuesday, May 30, 2000 / Proposed Rules 34413

way in which growers’ sales histories

are computed, which would result in a

revised marketable quantity or allotment

percentage. The second would suspend

the order requirement that grower

allotments be issued by June 1.

Marketable Quantity and Allotment

Percentage

Section 929.49 of the order currently

provides that if the Secretary finds from

the recommendation of the Committee

or from other available information, that

limiting the quantity of cranberries

purchased from or handled on behalf of

growers during a crop year would tend

to effectuate the declared policy of the

Act, the Secretary shall determine and

establish a marketable quantity for that

year. In addition, the Secretary would

establish an allotment percentage which

shall equal the marketable quantity

divided by the total of all growers’ sales

histories. Handlers cannot handle

cranberries unless they are covered by a

grower’s annual allotment.

The cranberry industry has operated

under a Federal marketing order since

1962. The last season volume regulation

was recommended was in 1971.

The order covers a ten-State area. The

highest producing States are

Massachusetts and Wisconsin, which

together account for about 80 percent of

total production. Over 95 percent of the

crop is processed, with the remainder

being sold as fresh fruit.

For many years, the industry has

enjoyed increasing demand for

cranberry products, primarily due to the

success of cranberry juice-based drinks.

This situation encouraged additional

production. From 1960 through 1999,

production increased from 1.34 million

barrels (one barrel equals 100 pounds of

cranberries) to 6.39 million barrels. This

represents a 377 percent increase.

Production in 1999 was an all-time

high, and was 17 percent above that of

the previous year.

The growth rate in production is

attributable to a 76 percent increase in

harvested area (from 21,140 to 37,200

acres) and an even higher increase (171

percent) in yields (from 63.4 to 171.7

barrels per acre).

While production continues to rise,

demand has leveled off. Total domestic

sales peaked in 1994 at 4.7 million

barrels, and declined to 4.5 million

barrels in 1998.

Increased total supplies in excess of

demand have resulted in large

inventories. Carryover inventories have

grown from 883,773 barrels in 1988 to

3,107,366 barrels in 1999. From 1988

through 1997, carryover as a percent of

production ranged from 21 to 36

percent. However, in 1998, carryover as

a percent of production increased to 40

percent; in 1999 it increased to 49

percent. Carryover inventory for the

1999 season exceeded 3 million barrels

for the first time in the industry’s

history.

When supply outpaces demand,

resulting in high levels of carryover

inventories, grower prices can be

negatively impacted. Grower prices rose

from $8.83 per barrel in 1960 to a peak

level of $65.90 per barrel in 1996. These

rising price levels provided an incentive

for producers to expand planted acres

and to increase yields. Over the past two

seasons, prices have started to decline.

In 1998, grower prices decreased to

$38.80 per barrel. The returns for the

1999 crop year are expected to fall

below $30.00 per barrel. The industry

anticipates further price reductions if

supplies are not brought more in line

with demand.

Increasing inventories and the high

costs associated with storing these

inventories have resulted in the

industry considering the use of volume

control regulations. The goal of such

regulations is to obtain a higher and

more stable price than would exist in

their absence.

In an industry such as the cranberry

industry, where the product can be

stored for long periods of time, volume

control is a method that could be used

to reduce unwanted inventories. Large

inventories are costly to maintain and,

with the outlook for continued high

production levels, these inventories

would be difficult to market.

Section 929.46 of the order requires

the Committee to develop a marketing

policy each year prior to May 1. In its

marketing policy, the Committee

projects expected supply and market

conditions for the upcoming season,

including an estimate of the marketable

quantity (defined as the number of

pounds of cranberries needed to meet

total market demand and to provide for

an adequate carryover into the next

season).

At a March 30, 2000, meeting, the

Committee estimated the 2000–2001

domestic production of cranberries at

5.89 million barrels. Carryover as of

September 1, 2000 is estimated at 4.6

million barrels. Foreign production

(primarily Canada) is projected at

800,000 barrels. Allowing for shrinkage

of approximately 3 percent, the total

adjusted available supply of cranberries

is expected to be 10,930,000 barrels.

Based in large part on historical sales

figures, the Committee estimated

utilization of processing fruit at 5.4

million barrels and of fresh fruit at

280,000 barrels.

A summary of the marketing policy

follows:

CRANBERRY MARKETING POLICY

[2000 crop year estimate]

Barrels

Carryin as of 9/1/2000 ............ 4,600,000

Domestic production ............... 5,890,000

Foreign production .................. 800,000

Available supply (sum of the

above) ................................. 11,290,000

Minus shrinkage ..................... 360,000

Adjusted Supply ...................... 10,930,000

Fresh Fruit .............................. 280,000

Processing fruit ....................... 5,400,000

Total Sales and Usage ........... 5,680,000

Carryover as of 8/31/2001 ...... 5,250,000

The Committee determined that the

marketable quantity for the 2000–2001

crop year should be established at 5.4

million barrels. This is equal to the

expected demand for processing fruit.

Fresh fruit sales were not included

because (as discussed later in this

document) fresh fruit would not be

covered by the allotment percentage.

Using a marketable quantity equal to

processed fruit demand should result in

a more stable level of inventories.

Supplies in inventory could easily cover

any unexpected increases in market

demand.

Section 929.49(b) of the order

provides that the marketable quantity be

apportioned among growers by applying

the allotment percentage to each

grower’s sales history. The allotment

percentage equals the marketable

quantity divided by the total of all

grower’s sales histories. No handler can

purchase or handle cranberries on

behalf of any grower not within the

grower’s annual allotment.

Total growers’ sales histories were set

at 6.35 million barrels. Using the

formula established under the order in

§ 929.49 (5.4 million barrels divided by

6.35 million barrels), the annual

allotment percentage is 85 percent.

As described later in this document,

the Department is proposing a change in

the way growers’ sales histories are

computed. If this change is adopted,

each grower’s sales history would be

recalculated. The Committee staff

reports that this would result in a new

industry total sales history of 7.6

million barrels. Using the 5.4 million

barrel marketable quantity

recommended by the Committee would

result in an allotment percentage of 71

percent. To retain an allotment

percentage of 85 percent, the marketable

quantity would need to be increased to

6.46 million barrels. The Department is

34414 Federal Register / Vol. 65, No. 104 / Tuesday, May 30, 2000 / Proposed Rules

soliciting comments on the Committee’s

original recommendation of marketable

quantity and allotment percentage as

well as the two alternatives proposed by

the Department. To summarize, the

three options are as follows (the

marketable quantity and total sales

histories figures are all in million barrel

units):

Marketable

quantity

Total sales

histories

Allotment

percentage

Committee Recommendation .................................................................................................. 5.4 6.35 85

USDA Option 1 ........................................................................................................................ 5.4 7.6 71

USDA Option 2 ........................................................................................................................ 6.46 7.6 85

A marketable quantity and

allotmentment percentage for the 2000–

2001 crop year are proposed to be

established by adding a new § 929.250

to the order’s rules and regulations. The

Committee could at any time, by reason

of changed conditions, recommend

modification, suspension or termination

of this section.

Determination of New Sales History

Section 929.48 of the order provides

for computing growers’ sales histories to

be used in calculating marketable

quantities and allotment percentages

under § 929.49. Sales history is defined

in section 929.13 as the number of

barrels of cranberries established for a

grower by the Committee. The

Committee has been updating growers’

sales histories each season. The

Committee accomplishes this by using

information submitted by the grower on

a production and eligibility report filed

with the Committee. The order sets forth

that a grower’s sales history is

established by computing an average of

the best four years’ sales out of the last

six years’ sales for those growers with

existing acreage. For growers with four

years or less of commercial sales

history, the sales history is calculated by

averaging all available years of such

grower’s sales. A new sales history for

a grower with no sales history is

calculated by using the State average

yield per acre or the total estimated

commercial sales, whichever is greater.

The Committee considered for the

2000–2001 crop that the State average

yield be defined as the average State

yields for the year 1997 or the average

of the best four years out of the last six

years, whichever is greater. This

calculation is similar to that used to

compute sales history (an average of the

best four years out of the last six years),

and would average out seasonal

variations in yields. However, if

estimated commercial sales are greater

than what is computed above, the

Committee would use the commercial

sales estimated by the grower.

In order to take into account the

differences among the States, the

Committee recommended calculating

the average yield for each State using

the best four of the last six years, and

comparing it to the average yield for that

State in 1997. The higher of the two

figures for each State would be used to

calculate new sales histories for new

growers. This rule proposes adding a

new § 929.148 to set forth this

calculation.

Some existing growers may also have

newly planted acreage that has not yet

established a sales history. Sales

histories for such acreage would be

calculated in the same way as sales

histories for new growers.

Growers are required to file a form

with the Committee by April 15 each

year if they wish to receive an annual

allotment. Growers also must notify the

Committee of any new acreage that will

be coming into production for the 2000–

2001 crop year. The Committee would

notify each grower of his or her annual

allotment and notify each handler of the

annual allotment that can be handled

for each grower whose total crop will be

delivered to such handler. In cases

where a grower delivers a crop to more

than one handler, such grower may

determine how to apportion the annual

allotment among those handlers.

A grower who does not produce

cranberries equal to his or her annual

allotment would transfer such unused

allotment to such grower’s handler(s).

The handlers would then be required to

equitably allocate the unused allotment

to growers with excess cranberries

(those not covered by allotment) who

deliver to those handlers. Unused

allotment remaining after all such

transfers have taken place would be

forfeited to the Committee.

Handlers who receive more

cranberries than are covered by their

growers’ annual allotments have excess

cranberries. The Committee would

equitably distribute unused allotment to

those handlers that have excess

cranberries.

Outlets for Excess Cranberries

The purpose of the producer

allotment program proposed to be

implemented by this rule is to limit the

amount of the total crop that can be

marketed for normal uses. As previously

indicated, a large portion of the U.S.

cranberry crop is processed. Most of it

is marketed domestically.

There is no need to limit the volume

of cranberries that may be marketed in

noncommercial or noncompetitive

outlets. Thus, in accordance with

§ 929.61, handlers would be able to

dispose of excess cranberries in certain

designated outlets. Noncommercial

outlets include charitable institutions

and research and development projects

for market development purposes.

Noncompetitive outlets are any

nonhuman food use and foreign

markets, except Canada. Canada is

excluded because significant sales of

cranberries to Canada could result in

transshipment back to the United States

of the cranberries exported there. This

could disrupt the U.S. market, counter

to the intent of the volume regulation.

To ensure that excess cranberries

diverted to the specified outlets do not

enter normal market channels, certain

safeguard provisions are established

under § 929.61. These provisions

require handlers to provide

documentation to the Committee to

prove that the diverted cranberries were

actually used in a noncommercial or

noncompetitive outlet. In the case of

nonhuman food use, a handler would be

required to notify the Committee at least

48 hours prior to disposition so that the

Committee staff would have sufficient

time to be available to observe the

disposition of the cranberries.

Section 929.104 of the rules and

regulations is proposed to be revised to

list the outlets in which handlers can

divert excess cranberries. That section

currently lists outlets for ‘‘restricted

cranberries.’’ ‘‘Restricted cranberries’’ is

a term used in connection with

withholding requirements—another

type of volume regulation authorized

under the order. While the specific

outlets listed are not being proposed for

revision, changes are proposed in the

regulatory text to provide that these

outlets are authorized for excess

cranberries under a producer allotment

program.

Fresh and Organic Fruit Exemption

The Committee also recommended

that fresh fruit and organically-grown

Federal Register / Vol. 65, No. 104 / Tuesday, May 30, 2000 / Proposed Rules 34415

cranberries be exempted from regulation

this season. Fresh and organicallygrown fruit would be exempt pursuant

to § 929.58 of the order which provides

that the Committee may relieve from

any or all requirements cranberries in

such minimum quantities as the

Committee, with the approval of the

Secretary, may prescribe.

Fresh fruit accounts for about 4.7

percent of the total production. The

Committee estimated that about 280,000

barrels will be sold fresh this year,

compared to 260,000 barrels sold last

season.

Under current marketing practices,

there is a distinction between

cranberries for fresh market and those

for processing markets. Cranberries

intended for fresh fruit outlets are

grown and harvested differently. Fresh

cranberries are dry picked while

cranberries used for processing are

water picked. When cranberries are

water picked, the bog is flooded and the

cranberries that rise to the top are

harvested. Dry picking is a more labor

intensive and expensive form of

harvesting. Cranberry bogs are

designated as ‘‘fresh fruit’’ bogs and are

grown and harvested accordingly. Only

the lower quality fruit from a fresh bog

goes to processing outlets.

In addition, fresh cranberry sales

constitute less than 5 percent of the

cranberry market. All fresh cranberries

can be marketed and do not compete

with processing cranberries. Fresh

cranberries are seasonal (due to their

limited shelf life) and are not a part of

the growing industry inventories. The

Committee concluded that fresh

supplies do not contribute significantly

to the current cranberry surplus. Thus,

the Committee recommended that such

cranberries be exempt from the

allotment percentage this rule proposes.

Organically-grown cranberries

comprise an even smaller portion of the

total crop than fresh cranberries. The

Committee estimated that about 1,000

barrels of organic fruit will be sold this

season, compared to 450 barrels last

season. Organic cranberries are a

growing niche market and regulating

them could have an adverse effect on

the production and marketing of this

product. Like fresh cranberries, demand

for organic cranberries is in line with

the current limited production. Thus,

organic cranberries do not contribute in

any meaningful way to the current

oversupply experienced with processing

fruit. The Committee therefore

recommended that organically-grown

cranberries be exempt from volume

regulation during the upcoming season.

In order to be exempt, organic

cranberries would have to be certified as

such by a third party organic certifying

organization that is acceptable to the

Committee.

Exemptions for fresh and organicallygrown cranberries would be provided in

a proposed new § 929.158.

Definition of Commercial Crop

The Committee also recommended

that the amount of barrels that defines

a commercial crop under the marketing

order be increased. Calculations of sales

histories are based on ‘‘commercial’’

cranberry acreage. Currently, section

929.107 defines a commercial crop as

acreage that has a sufficient density of

growing vines to produce at least 15

barrels per acre without replanting or

renovation. The Committee has

recommended that the 15 barrels per

acre be increased to 50 barrels per acre.

Acreage producing less than 50 barrels

per acre would not be considered to

produce a commercial crop. This

increase would bring the order more in

line with current growing conditions.

This action would assist growers who

harvested cranberries for the first time

in 1999. These growers would qualify

for a new sales history determination.

As previously discussed, sales history

on new acreage would be the State

average yield or the grower’s estimated

commercial sales, whichever is greater.

A full commercial cranberry crop is

usually not harvested until 3 or 4 years

after being planted. Production is

usually limited during the first year,

with increases in subsequent years until

full capacity is reached. If a grower

harvested a bog for the first time in

1999, and achieved a yield of 25 barrels

per acre, such grower’s sales history

would be calculated by using the

determination for a grower with four

years or less of production. This would

be the actual production for that year.

Therefore, in this example, for the

2000–2001 crop year the grower’s sales

history would be 25 barrels multiplied

by the number of acres such grower

harvested. The 25 barrels would be used

in the calculation since it is greater than

the 15 barrels per acre used to define

commercial cranberry acreage.

Under the proposed revision, such

grower’s first year of sales harvested

from that acreage would not count since

it is less than 50 barrels per acre.

Therefore, the grower would be eligible

to receive the determination for growers

with no sales history on such acreage

(which would be the State average yield

or the grower’s estimated commercial

sales, whichever is greater). This would

benefit growers who had very low yields

per acre for their first year of

production.

Appeal Procedures

Finally, the Committee recommended

that the current review procedures for

appeals be revised. Currently, section

929.125 provides an appeal procedure

for growers who are dissatisfied with

their sales histories, as determined

pursuant to § 929.48(a) and (b) of the

order. Under the current procedures, a

grower may submit to the Committee a

written argument within 30 days after

receiving the Committee’s

determination of that grower’s sales

history, if such grower disagrees with

the determination. The Committee shall

review its determination within a

reasonable time, reviewing all the

material submitted by the grower, and

notify the grower of its decision. If the

grower is not satisfied with the

Committee’s decision, that grower may

appeal to the Secretary, through the

Committee, within 30 days after being

notified about the Committee’s decision.

The Secretary shall review all pertinent

information and render a decision. The

Secretary’s decision shall be final.

The Committee recommended

revising the current process.

Specifically, it proposed that an appeals

subcommittee be established and that

the full Committee be provided with 15

days to further review appeals by

growers. The Committee believes that

this process would be more efficient in

considering grower appeals. The

subcommittee, appointed by the

Chairman, would be composed of two

independent and two cooperative

representatives, as well as a public

member. Although an additional level of

review is being established, the

Committee believes that it would be

more efficient for a subcommittee

composed of 5 members to meet and

discuss the appeals. The subcommittee

would have 30 days to render a decision

on the request.

If the grower is not satisfied with the

appeal subcommittee’s decision, the

grower could further appeal to the full

Committee. The grower would submit

his or her written argument to the

Committee along with any pertinent

information for the Committee’s review

within 15 days after being notified about

the determination by the subcommittee.

The Committee would have 15 days

from the receipt of the grower’s appeal

to respond. The Committee would

inform the grower of its decision,

including the reasons for its decision.

The grower may further appeal to the

Secretary within 15 days after

notification of the Committee’s findings,

if such grower is not satisfied with the

Committee’s decision. The Committee

would forward a file with all pertinent

34416 Federal Register / Vol. 65, No. 104 / Tuesday, May 30, 2000 / Proposed Rules

information related to the grower’s

appeal. The Secretary would inform the

grower and Committee staff of the

Secretary’s decision. All decisions by

the Secretary are final.

USDA Proposal—Recalculation of Sales

Histories

As previously discussed, the order

sets forth that a grower’s sales history is

established by computing an average of

the best four years’ sales out of the last

six years’ sales for those growers with

existing acreage. For growers with four

years or less of commercial sales

history, the sales history is calculated by

averaging all available years of such

grower’s sales. A new sales history for

a grower with no sales history is

calculated by using the State average

yield per acre or the total estimated

commercial sales, whichever is greater.

Since the Committee met on March

30, 2000, the Department has received

additional information from cranberry

growers and handlers pertaining to the

way in which sales histories are

computed. Of primary concern is the

potential inequities that could result

from the current process. Specifically,

newer growers would be restricted to a

greater extent than more established

growers. That is because a cranberry bog

does not reach full capacity until several

years after being planted. Using an

average of early years’ sales (which are

low) would likely result in a sales

history substantially below current sales

potential. A more established grower, on

the other hand, would have a sales

history more reflective of his or her

production capacity.

The Committee’s recommendation

concerning the definition of

‘‘commercial crop’’ (previously

discussed in this document) was in

response to this concern. However, the

Department believes a further

modification is needed to lessen the

differential impact a volume regulation

would have on individual cranberry

growers. For this reason, The

Department is proposing that a sales

history for each existing grower be

calculated using the best single sales

year in the past six years. For a grower

with less than six years of sales, the

sales history would be the highest year

of sales available. This proposal is

authorized under § 929.48(a)(2) of the

order which provides that the number

and identity of the years used to

compute sales histories may be altered

by regulation. The Department is not

proposing a change in the way sales

histories are computed for brand new

growers (those without any history of

sales).

The Department is inviting comments

on this proposed change. As previously

discussed, this change in the way sales

histories are computed would result in

a revised industry total sales history of

7.6 million barrels. This would also

result in a modification of the

marketable quantity or the allotment

percentage. It is expected that the

Committee would meet to consider this

proposal and provide the Department

with its views and any recommended

revisions prior to finalization of this

proposed rule.

This proposal would be implemented

by adding a new § 929.149 to the order’s

rules and regulations.

USDA Proposal—Suspension of

Deadline for Notifying Growers of Their

Annual Allotment

Section 929.49 of the order provides

that in any year in which an allotment

percentage is established by the

Secretary, the Committee must notify

growers of their annual allotment by

June 1. That section also requires the

Committee to notify each handler of the

annual allotments for that handler’s

growers by June 1.

This rule proposes establishing an

allotment percentage for the 2000

cranberry crop. To allow adequate time

for interested parties to comment on this

proposal and for the Department to give

due consideration to the comments

received, a final decision on this rule

may not be reached before June 1.

Therefore, the Department is proposing

that the June 1 deadline be suspended

for the 2000–2001 crop year.

The Regulatory Flexibility Act and

Effects on Small Businesses

Pursuant to 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, 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 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 20 handlers

of cranberries who are subject to

regulation under the order and

approximately 1,100 producers of

cranberries in the regulated area. Small

agricultural service firms, which

includes handlers, have been defined by

the Small Business Administration (13

CFR 121.201) 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

cranberry handlers and producers may

be classified as small businesses.

This rule would establish a

marketable quantity and an allotment

percentage for cranberries in a 10 State

production area during the crop year

from September 1, 2000, through August

31, 2001. Handlers would only be

allowed to handle those cranberries that

are covered by annual allotment. This

action would also exempt fresh and

organic cranberries from volume

regulation, define the State average

yield, increase the barrels per acre for

determining a commercial crop, and

revise the Committee review

procedures. These actions are designed

to improve the operation of the volume

regulation program.

Over the past several years, per capita

consumption of cranberries has

averaged 1.69 pounds. Per capita

consumption peaked in 1994 at 1.80

pounds and began trending downward.

In 1998, per capita consumption was

1.67 pounds. Associated with these per

capita consumption figures is the fact

that total domestic sales also peaked in

1994 at 4,692,507 barrels and has

declined to 4,506,632 barrels in 1998.

However, cranberry production reached

an all-time high of 6,389,000 barrels in

1999. This is a 17 percent increase over

1998 production of approximately 5.4

million barrels. Available cranberry

supplies continue to out pace demand,

resulting in high levels of carryover

inventories. Over the past two seasons,

prices have started to decline. In 1998

grower prices decreased to $38.80 per

barrel. In 1999, prices are expected to

fall to $18–$30 per barrel.

The cranberry industry has operated

under a Federal marketing order since

1962. The last season of volume

regulation was in 1971. The order

covers a ten-State area. The highest

producing States are Massachusetts and

Wisconsin, which together account for

about 80 percent of total production.

Over 90 percent of the crop is

processed, with the remainder being

sold as fresh fruit.

For many years the industry has

enjoyed increasing demand for

cranberry products, primarily due to the

success of cranberry juice-based drinks.

This situation encouraged additional

production. From 1960 through 1999,

production increased from 1.34 million

barrels (one barrel equals 100 pounds of

cranberries) to 6.39 million barrels. This

Federal Register / Vol. 65, No. 104 / Tuesday, May 30, 2000 / Proposed Rules 34417

represents a 377 percent increase.

Production in 1999 was an all-time

high, and was 17 percent above that of

the previous year.

The growth rate in production is

attributable to a 76 percent increase in

harvested area (from 21,140 to 37,200

acres) and an even higher increase (171

percent) in yields (from 63.4 to 171.7

barrels per acre).

While production continues to rise,

demand has leveled off. Total domestic

sales peaked in 1994 at 4.7 million

barrels, and declined to 4.5 million

barrels in 1998.

Increased total supplies in excess of

demand have resulted in large

inventories. Carryover inventories have

grown from 883,773 barrels in 1988 to

3,107,366 barrels in 1999. From 1988

through 1997, carryover as a percent of

production ranged from 21 to 36

percent. However, in 1998, carryover as

a percent of production increased to 40

percent; in 1999 it increased to 49

percent. Carryover inventory for the

1999 season exceeded 3 million barrels

for the first time in the industry’s

history.

When supply outpaces demand,

resulting in high levels of carryover

inventories, grower prices could be

negatively impacted. Grower prices rose

from $8.83 per barrel in 1960 to a peak

level of $65.90 per barrel in 1996. These

rising price levels provided an incentive

for producers to expand planted acres

and to increase yields. Over the past two

seasons, prices have started to decline.

In 1998, grower prices decreased to

$38.80 per barrel. The returns for the

1999 crop year are expected to fall

below $30.00 per barrel. The industry

anticipates further price reductions if

supplies are not brought more in line

with demand.

Increasing inventories and the high

costs associated with storing these

inventories have resulted in the

industry considering the use of volume

control regulations. The goal of such

regulations is to obtain a higher and

more stable price than would exist in

their absence.

In an industry such as cranberries,

where the product can be stored for long

periods of time, volume control is a

method that can be used to reduce

unwanted inventories. Large inventories

are costly to maintain and, with the

outlook for continued high production

levels, these inventories would be

difficult to market.

Based in large part on historical sales

figures, the Committee estimated

utilization of processing fruit at 5.4

million barrels and of fresh fruit at

280,000 barrels.

The Committee determined that the

marketable quantity for the 2000–2001

crop year should be established at 5.4

million barrels. This is equal to the

expected demand for processing fruit.

Fresh fruit sales were not included

because fresh fruit would not be covered

by the allotment percentage.

Organically-grown cranberries would

also be exempted because projected

sales are only about 1,000 barrels. Using

a marketable quantity equal to

processed fruit demand should result in

a more stable level of inventories.

Supplies in inventory could easily cover

any unexpected increases in market

demand.

Section 929.49(b) provides that the

marketable quantity be apportioned

among growers by applying the

allotment percentage to each grower’s

sales history. The allotment percentage

equals the marketable quantity divided

by the total of all grower’s sales

histories. No handler can purchase or

handle cranberries on behalf of any

grower not within the grower’s annual

allotment.

Total growers’ sales histories were set

at 6.35 million barrels. Using the

formula established under the order (5.4

million barrels divided by 6.35 million

barrels), the annual allotment

percentage is 85 percent.

Currently, a grower’s sales history is

established by computing an average of

the best four years’ sales out of the last

six years’ sales for those growers with

existing acreage. For growers with four

years of less of commercial sales history,

the sales history is calculated by

averaging all available years of such

growers’ sales.

The Department is proposing that a

sales history for each existing grower be

recalculated, using the best single sales

year in the past six years. For a grower

with less than six years of sales, the

sales history would be the highest year

of sales available. This change is being

proposed to take care of potential

inequities that could result from the

current process of computing sales

histories. Specifically, newer growers

are restricted to a greater extent than

more established growers. That is

because a cranberry bog does not reach

full capacity until several years after

being planted. Using an average of early

years’ sales (which are low) would

likely results in a sales history

substantially below current sales

potential. A more established grower, on

the other hand, would have a sales

history more reflective of his or her

production capacity.

If adopted, each grower’s sales history

would be recalculated. The Committee

staff reports that this would result in a

new total industry sales history of 7.6

million barrels (compared to the current

total of 6.35 million barrels). Since the

allotment percentage is determined by

dividing the marketable quantity by the

total sales history, a change in the total

sales history could impact the level of

volume regulation.

If the 5.4 million barrel marketable

quantity recommended by the

Committee is used, the allotment

percentage would change from the 85

percent recommended by the Committee

to 71 percent. Increasing the restricted

percentage from 15 to 29 percent could

result in a higher level of restriction

than recommended by the Committee.

To retain the Committee’s

recommended allotment percentage of

85 percent with the new sales history

total, the marketable quantity would

have to be increased from the current

5.4 million barrels to 6.46 million

barrels. This would result in a lower

restriction than recommended by the

Committee.

The Department is soliciting

comments on all the proposals,

including the Committee’s original

recommendation of marketable quantity

and allotment percentage, as well as two

alternatives proposed by the

Department. Particular attention should

be given to the expected impacts of

these different levels of regulation on

cranberry growers and processors, and

whether there would be a differential

impact on small versus large entities.

The Committee could at any time, by

reason of changed conditions,

recommend modification, suspension or

termination of the marketable quantity

or allotment percentage proposed in this

rule.

The impact of this rule should be

beneficial to both growers and handlers.

The regulation is intended to decrease

the build-up of excessive inventories

and help stabilize grower prices and

returns.

Discussions at the meeting indicated

that the establishment of a producer

allotment program is the best alternative

for the industry at this time. Six months

ago, the Committee established a

volume regulation subcommittee that

researched the two methods of volume

regulation available under the order.

Those two methods are a producer

allotment program and handler

withholding program. The

subcommittee’s primary mission was to

determine what method of volume

control would be best for the industry

if volume regulations were

recommended. After holding several

meetings, the subcommittee concluded

that a producer allotment is the best

34418 Federal Register / Vol. 65, No. 104 / Tuesday, May 30, 2000 / Proposed Rules

method available to the industry at this

time.

The withholding program has not

been used since 1971. The provisions of

the producer allotment program were

amended in 1992, but never used.

Under the withholding program,

growers deliver all their cranberries to

their respective handlers. The handler is

responsible for setting aside restricted

cranberries and ultimately disposing of

the cranberries in authorized

noncommercial and noncompetitive

outlets. This could result in a large

volume of cranberries being disposed of

and perhaps destroyed. In addition, the

withholding provisions require that all

withheld cranberries be inspected by

the Federal or Federal-State Inspection

Service, which could be costly.

The producer allotment program

would allow cultural practices to be

changed at the grower level prior to

harvest. This could result in less fruit

being produced and would not require

the disposal of as many cranberries as

with the withholding provisions. In

addition, inspections are not required

under the producer allotment method,

which is more cost effective and would

be simpler to administer. For these

reasons, the subcommittee

recommended to the full Committee that

if volume regulations were

recommended, that the producer

allotment program be the method for

regulation.

In its review of the producer

allotment program, the subcommittee

recommended that cranberries intended

for fresh market be exempt from the

volume regulation. This

recommendation was unanimously

approved by the full Committee. The

Committee also recommended by

unanimous vote that organic cranberries

be exempt from volume regulations.

Fresh and organically-grown fruit

would be exempt pursuant to section

929.58 of the order which provides that

the Committee may relieve from any or

all requirements, cranberries in such

minimum quantities as the Committee,

with the approval of the Secretary, may

prescribe.

Fresh fruit accounts for about 4.7

percent of the total production. The

Committee estimated that about 280,000

barrels will be sold fresh this year,

compared to 260,000 barrels sold last

season.

Under current marketing practices,

there is a distinction between

cranberries for fresh market and those

for processing markets. Cranberries

intended for fresh fruit outlets are

grown and harvested differently. Fresh

cranberries are dry picked while

cranberries used for processing are

water picked. When cranberries are

water picked, the bog is flooded and the

cranberries that rise to the top are

harvested. Dry picking is a more labor

intensive and expensive form of

harvesting. Cranberry bogs are

designated as ‘‘fresh fruit’’ bogs and are

grown and harvested accordingly. Only

the lower quality fruit from a fresh bog

goes to processing outlets.

In addition, fresh cranberry sales

constitute approximately 5 percent of

the cranberry market. All fresh

cranberries can be marketed and do not

compete with processing cranberries.

Fresh cranberries are seasonal (due to

their limited shelf life) and are not part

of the growing industry inventories.

The Committee concluded that fresh

supplies do not contribute significantly

to the current cranberry surplus. Thus,

the Committee recommended that such

cranberries be exempt from the

allotment percentage this rule proposes.

Organically-grown cranberries

comprise an even smaller portion of the

total crop than fresh cranberries do. The

Committee estimated that about 1,000

barrels of organic fruit will be sold this

season, compared to 450 barrels last

season. Organic cranberries are a

growing niche market and regulating

them could have an adverse effect on

marketing this product. Demand for

organic cranberries is in line with the

current limited production. Thus, all

organic cranberries can be marketed,

and they do not contribute in any

meaningful way to the current

oversupply experienced with processing

fruit. The Committee therefore

recommended that organically-grown

cranberries be exempt from volume

regulation during the upcoming season.

In order to receive an exemption for

fresh or organic cranberries a handler

would be required to report such

quantities on the current grower

acquisition listing form.

The Committee also recommended, by

unanimous vote, that the sales history

re-determination procedures be

modified by appointing a subcommittee

composed of two independent and two

cooperative representatives and one

public member to be the first level of

review.

Currently, section 929.125 provides

an appeal procedure for growers that are

dissatisfied with a determination made

pursuant to section 929.48(a) and (b) of

the order which describes the

computation for a grower’s sales history.

A grower may submit to the Committee

a written argument within 30 days of

receiving the Committee’s

determination for sales history, if such

grower disagrees with the

determination. The Committee shall

review its determination within a

reasonable time, reviewing all the

material submitted by the grower. If the

grower is not satisfied with the

Committee’s decision such grower may

appeal through the Committee, within

30 days of the Committee’s decision, to

the Secretary. The Secretary shall

review all pertinent information and

render a prompt decision. The

Secretary’s decision shall be final.

The Committee recommended that an

appeals subcommittee be established

and the full Committee have less time

to further review appeals by growers.

The Committee believed that this

process would prove to be more

efficient in considering grower appeals.

Although an additional level of review

is being established, the Committee

believed that it would be more efficient

for a subcommittee composed of 5

members to meet and discuss the

appeals. Scheduling a meeting of the

entire Committee to discuss and make

determinations of grower appeals could

be cumbersome and time consuming.

The Committee also recommended, by

unanimous vote, to raise the amount of

barrels that defines a commercial crop

under the marketing order from 15 to 50

barrels. Calculations of sales histories

are made on ‘‘commercial’’ cranberry

acreage. This action would assist

growers who harvested cranberries for

the first time in 1999. These growers

would qualify for a new sales history

determination. As previously discussed,

sales history on new acreage would be

the State average yield or the grower’s

estimated commercial sales, whichever

is greater.

Under the proposed revision, such

grower’s first year of sales harvested

from that acreage would not count since

it is less than 50 barrels per acre.

Therefore, the grower would be eligible

to receive the determination for growers

with no sales history on such acreage

(which would be the State average yield

or the grower’s estimated commercial

sales, whichever is greater). This would

benefit growers who had very low yields

per acre for their first year of

production.

The Committee also considered that

State average yield for the 2000–2001

crop be defined as the average yields

during the year 1997 or the average of

the best four years out of the last six

years, whichever is greater. This

calculation is similar to that used to

compute sales history (an average of the

best four years out of the last six years),

and would average out seasonal

variations in yields. However, if

estimated commercial sales are greater

than what is computed above, the

Federal Register / Vol. 65, No. 104 / Tuesday, May 30, 2000 / Proposed Rules 34419

Committee would use the commercial

sales estimated by the grower.

In order to take into account the

differences among the States, the

Committee recommended calculating

the average yield for each State using

the best four of the last six years, and

compare it to the average yield for that

State in 1997. The higher of the two

figures for each State would be used to

calculate new sales histories for new

growers. This rule proposes adding a

new § 929.148 to set forth this

calculation.

The Department’s proposal to change

the way in which sales histories are

computed (the best out of the past six

years) should result in a more equitable

distribution of annual allotment among

individual cranberry growers. The

proposal to suspend the June 1 deadline

for notifying growers and handlers

would allow for adequate time to

complete this rulemaking proceeding,

without unduly impacting the cranberry

industry.

Some handlers at the meeting

indicated that they do not have large

inventories and therefore, may have to

purchase fruit from their competitors to

meet customer needs. They in turn

favored a lesser restriction, rather than

15 percent as proposed. Some growers

indicated that they have not contributed

to the surplus problem, and they should

not be regulated. Those at the meeting

further expressed that Wisconsin has

expanded its production and

Massachusetts has not in the past five

years. Massachusetts growers and

handlers believe they should not have to

be regulated. However, other growers

and handlers at the meeting expressed

that the surplus is a industry problem

and must be dealt with by the entire

industry.

The Committee discussed the

alternative of not regulating at all.

Economic reports of the condition of the

cranberry industry indicated that if

supplies were not controlled, grower

prices would continue to drop. The

Committee does not know how small

growers as well as large ones could

sustain further price drops.

Some growers expressed that the

Committee should consider other

methods of increasing demand rather

than regulating the industry at this time.

They suggested implementing a

domestic promotion program in

addition to the export promotion

activities already underway. The

Committee did recommend that a

subcommittee be established to research

such a possibility. They also suggested

that effort in market development and

new product development would

increase demand for cranberries and

better address the oversupply situation.

The Committee recommendation for

volume regulation passed by a seven to

one vote. The person voting against the

recommendation felt a volume

regulation would adversely affect the

growers and handlers in his district,

New Jersey. All of the other

recommendations were passed by

unanimous votes. The proposed

marketable quantity and allotment

percentage is not expected to cause a

shortage of cranberries.

The other changes discussed in this

document are designed to improve the

operation of the volume regulation this

season.

As with all Federal marketing order

programs, reports and forms are

periodically reviewed to reduce

information requirements and

duplication by industry and public

sectors. In addition, the Department has

not identified any relevant Federal rules

which duplicate, overlap or conflict

with this rule.

In compliance with Office of

Management and Budget (OMB)

regulations (5 CFR Part 1320) which

implement the Paperwork Reduction

Act of 1995 (44 U.S.C. Chapter 35), the

information collection and

recordkeeping requirements imposed by

this order have been previously

approved by OMB and assigned OMB

Number 0581–0103.

There are some reporting and

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. This rule does not

change those requirements.

The Committee’s meetings were

widely publicized throughout the

cranberry industry and all interested

persons were invited to attend them and

participate in Committee deliberations.

Like all Committee meetings, the March

2000 meeting was a public meeting and

all entities, both large and small, were

able to express their views on these

issues. The Board itself is composed of

eight members, of which seven members

are growers and one represents the

public. Also, the Committee has a

number of appointed subcommittees to

review certain issues and make

recommendations. The Committee

manager also held several meetings with

growers throughout the production area

to discuss the methods of volume

regulation and the procedures for

regulation.

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.

A 15-day comment period is provided

to allow interested persons to respond

to this proposal. Fifteen days is deemed

appropriate so that any final rule which

is issued may be applicable to 2000–

2001 crop year cranberries. All written

comments timely received will be

considered before a final determination

is made on this matter.

List of Subjects in 7 CFR Part 929

Cranberries, Marketing agreements,

Reporting and recordkeeping

requirements.

For the reasons set forth in the

preamble, 7 CFR Part 929 is proposed to

be amended as follows:

PART 929—CRANBERRIES GROWN IN

THE STATES OF MASSACHUSETTS,

RHODE ISLAND, CONNECTICUT, NEW

JERSEY, WISCONSIN, MICHIGAN,

MINNESOTA, OREGON,

WASHINGTON, AND LONG ISLAND IN

THE STATE OF NEW YORK

1. The authority citation for 7 CFR

Part 929 continues to read as follows:

Authority: 7 U.S.C. 601–674.

§ 929.49 [Amended]

2. In paragraph (d) of § 929.49, the

phrase ‘‘On or before June 1’’ is

suspended.

3. In paragraph (e) of § 929.49, the

phrase ‘‘On or before June 1 of any year

in which an allotment percentage is

established by the Secretary’’ is

suspended.

4. Section 929.104 is revised to read

as follows:

§ 929.104 Outlets for excess cranberries.

(a) In accordance with § 929.61,

excess cranberries may be disposed of

only in the following noncommercial or

noncompetitive outlets, but only if the

requirements in paragraph (b) of this

section are complied with:

(1) Foreign countries, except Canada.

(2) Charitable institutions.

(3) Any nonhuman food use.

(4) Research and development

projects dealing with dehydration,

radiation, freeze drying, or freezing of

cranberries, for the development of

foreign markets.

34420 Federal Register / Vol. 65, No. 104 / Tuesday, May 30, 2000 / Proposed Rules

(b) Handlers may divert excess

cranberries in the outlets listed in

paragraph (a) of this section only if they

meet the diversion requirements

specified in § 929.61(c).

§ 929.107 [Amended]

5. In § 929.107, paragraphs (a) and (c)

are amended by removing the number

‘‘15’’ and adding in its place the number

‘‘50’’.

6. Section 929.125 is revised to read

as follows:

§ 929.125 Committee review procedures.

Growers may request, and the

Committee may grant, a review of

determinations made by the Committee

pursuant to section 929.48, in

accordance with the following

procedures: (a) If a grower is dissatisfied with a

determination made by the Committee

which affects such grower, the grower

may submit to the Committee within 30

days after receipt of the Committee’s

determination of sales history, a request

for a review by an appeals

subcommittee composed of two

independent and two cooperative

representatives, as well as a public

member. Such appeals subcommittee

shall be appointed by the Chairman of

the Committee. Such grower may

forward with the request any pertinent

material for consideration of such

grower’s appeal. (b) The subcommittee shall review the

information submitted by the grower

and render a decision within 30 days of

receipt of such appeal. The

subcommittee shall notify the grower of

its decision, accompanied by the

reasons for its conclusions and findings. (c) If the grower is not satisfied with

the subcommittee’s decision, the grower

may further appeal to the full

Committee. The grower must submit its

written argument to the Committee

along with any pertinent information for

the Committee’s review within 15 days

after notification of the subcommittee’s

decision. The Committee shall respond

within 15 days of the receipt of the

grower’s appeal. The Committee shall

inform the grower of its decision,

accompanied by the reasons for its

decision.

(d) The grower may further appeal to

the Secretary, within 15 days after

notification of the Committee’s findings,

if such grower is not satisfied with the

Committee’s decision. The Committee

shall forward a file with all pertinent

information related to the grower’s

appeal. The Secretary shall inform the

grower and all interested parties of the

Secretary’s decision. All decisions by

the Secretary are final. 7. A new § 929.148 is added to read

as follows:

§ 929.148 State average yield.

The State average yield pursuant to

section 929.48(a)(5)(ii) is defined as the

yield per State for the year 1997 or the

best four years out of the last six years

whichever is greater. However, if the

estimated commercial sales are greater

than the volume computed by this

method, the Committee will use the

grower’s estimated commercial sales.

8. A new § 929.149 is added to read

as follows:

§ 929.149 Determination of sales history.

A sales history for each grower shall

be computed by using the sales in the

highest one of the most recent six

seasons of sales. For a grower with less

than six seasons of sales, the sales

history shall be computed using the

highest sales season. Sales history for a

grower with no previous sales will be

computed according to § 929.48 of the

order.

9. A new § 929.158 is added to read

as follows:

§ 929.158 Exemptions.

Sales of organic and fresh cranberries

shall be exempt from volume regulation

provisions. Handlers shall qualify for

such exemption by filing the amount of

fresh or organic cranberry sales on the

grower acquisition listing form. In order

to receive an exemption for organic

cranberry sales, such cranberries must

be certified as such by a third party

organic certifying organization

acceptable to the Committee.

10. A new § 929.250 is added to read

as follows:

Option 1

§ 929.250 Marketable quantity and

allotment percentage for the 2000–2001

crop year.

The marketable quantity for the 2000–

2001 crop year is set at 5.4 million

barrels and the allotment percentage is

designated at 85 percent.

Option 2

§ 929.250 Marketable quantity and

allotment percentage for the 2000–2001

crop year.

The marketable quantity for the 2000–

2001 crop year is set at 5.4 million

barrels and the allotment percentage is

designated at 71 percent.

Option 3

§ 929.250 Marketable quantity and

allotment percentage for the 2000–2001

crop year.

The marketable quantity for the 2000–

2001 crop year is set at 6.46 million

barrels and the allotment percentage is

designated at 85 percent.

Dated: May 24, 2000.

Robert C. Keeney,

Deputy Administrator, Fruit and Vegetable

Programs.

[FR Doc. 00–13467 Filed 5–25–00; 8:45 am]

BILLING CODE 3410–02–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. 97–NM–260–AD]

RIN 2120–AA64

Airworthiness Directives; Boeing

Model 777–200 Series Airplanes

AGENCY: Federal Aviation

Administration, DOT.

ACTION: Notice of proposed rulemaking

(NPRM).

SUMMARY: This document proposes the

supersedure of an existing airworthiness

directive (AD), applicable to certain

Boeing Model 777–200 series airplanes,

that currently requires a one-time

inspection to determine the serial

numbers of various switch modules on

the overhead panel and control stand,

and replacement of switch modules

with new, improved modules. The

existing AD also requires repetitive tests

of the cargo fire extinguishing system,

and one-time tests of the fuel crossfeed

valve, pack, trim air, and alternate flap

control switches; and repair or

replacement of switch modules with

new improved modules, if necessary.

This action would revise the

applicability of the existing AD. This

action also would require replacement

of the existing switch modules with new

switch modules; replacement of the

existing module assemblies with new

module assemblies; or reworked module

assemblies; as applicable. This proposal

is prompted by the FAA’s determination

that certain switches are susceptible to

contamination. The actions specified by

the proposed AD are intended to

minimize contamination of the switch

contacts and consequent failure of the

switches, which, if not corrected, could

result in inability of the flight crew to

activate the cargo fire extinguishing,

fuel, air conditioning, and alternate flap

systems.

DATES: Comments must be received by

July 14, 2000.

ADDRESSES: Submit comments in

triplicate to the Federal Aviation

Administration (FAA), Transport

Airplane Directorate, ANM–114,

Attention: Rules Docket No. 97–NM–

260–AD, 1601 Lind Avenue, SW.,