20274 Federal Register / Vol. 63, No. 78 /Thursday, April 23, 1998 / Proposed Rules

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 930

[Docket No. FV97–930–2 PR]

Tart Cherries Grown in the States of

Michigan, et al.; Establishment of

Rules and Regulations for Grower

Diversion and a Compensation Rate

for the Cherry Industry Administrative

Board Public Member and Alternate

Public Member

AGENCY: Agricultural Marketing Service,

USDA.

ACTION: Proposed rule.

SUMMARY: This document contains rules

and regulations for a grower diversion

program under the tart cherry marketing

order for the 1998–1999 and following

crop years. It would also establish a

compensation rate to be paid to the

Cherry Industry Administrative Board

(Board) public member and/or alternate

public member when attending Board

meetings.

DATES: Comments must be received by

May 26, 1998.

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, PO Box 96456, Washington, DC

20090–6456; Fax: (202) 720–5698. 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.

FOR FURTHER INFORMATION CONTACT:

Patricia A. Petrella or Kenneth G.

Johnson, Marketing Order

Administration Branch, F&V, AMS,

USDA, room 2525–S, PO Box 96456,

Washington, DC 20090–6456, telephone:

(202) 720–5053, Fax: (202) 720–5698.

Small businesses may request

information on compliance with this

regulation by contacting: Jay Guerber,

Marketing Order Administration

Branch, Fruit and Vegetable Programs,

AMS, USDA, PO Box 96456, room

2525–S, Washington, DC 20090–6456;

telephone (202) 720–2491; Fax: (202)

720–5698.

SUPPLEMENTARY INFORMATION: This

proposal is issued under Marketing

Agreement and Order No. 930 (7 CFR

part 930), regulating the handling of tart

cherries grown in the States of

Michigan, New York, Pennsylvania,

Oregon, Utah, Washington, and

Wisconsin, hereinafter referred to as the

‘‘order.’’ The marketing agreement and

order are effective under the

Agricultural Marketing Agreement Act

of 1937, as amended (7 U.S.C. 601–674),

hereinafter referred to as the ‘‘Act.’’

The Department of Agriculture

(Department) is issuing this proposed

rule in conformance with Executive

Order 12866.

This proposal has been reviewed

under Executive Order 12988, Civil

Justice Reform. This proposed rule is

not intended to have retroactive effect.

This proposed rule would not preempt

any State or local laws, regulations, or

policies, unless they present an

irreconcilable conflict with this

proposed 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 proposal invites comments on

rules and regulations for grower

diversion under the tart cherry

marketing order and the establishment

of a compensation rate of $250 per

meeting for the public member and

alternate public member when attending

Board meetings. The tart cherry

marketing order became effective in

September of 1996 and the Board met

March 12–13, June 26–27, September

11–12, 1997, and January 29–30, 1998,

to establish and recommend to the

Secretary rules and regulations to

implement order authorities. At its

meetings, the Board recommended

grower diversion regulations and a

compensation rate for the public

member and alternate public member to

the Department for appropriate action.

An interim final rule was published

in the Federal Register on August 25,

1997, to establish terms and conditions

for the issuance of grower diversion

certificates for the 1997–1998 crop

season. A final rule is being published

separately in the Federal Register. This

proposed rule includes the terms and

conditions for the grower diversion

program proposed to be used for 1998–

1999 and subsequent crop years.

Section 930.33 of the order authorizes

the Board to compensate the public

member and/or alternate public member

for performance of their duties. The

Board at its discretion may request the

attendance of the alternate public

member at any or all meetings,

notwithstanding the expected or actual

presence of the public member. The

$250 compensation rate would allow

the Board to compensate the public

member and alternate public member

for attending Board meetings. Such

compensation is a per meeting rate. For

example, if a Board meeting is convened

and lasts four days or four hours, the

public member and/or alternate public

member attending the meeting would

receive $250. This action is intended to

compensate them for loss of work and

wages. This payment would be in

addition to compensation for travel,

lodging, meals, and other related costs

incurred in attending public Board

meetings.

The order in § 930.50 provides the

method of establishing an optimum

supply level of cherries for the crop

year. The optimum supply is defined as

the average of the prior three years’ sales

of tart cherries, adjusted for carry-in and

desired carry-out inventory. The

optimum supply consists of a free

percentage amount of cherries which a

handler could sell to any market and a

restricted percentage amount, when

warranted, which would have to be

withheld from the market. Based on the

optimum supply level, the Board

establishes preliminary free and

restricted percentages. No later than

September 15, after harvesting and

processing of the crop, the Board

computes and recommends to the

Secretary final free and restricted

percentages based on actual crop

amounts. After receiving the Board’s

recommendation, the Secretary

designates the final free and restricted

percentages through informal

rulemaking if he finds that such action

would tend to effectuate the purposes of

the Act. The difference between any

final free market percentage and 100

percent is the final restricted

percentage. The Board established an

optimum supply of 247 million pounds

and preliminary free and restricted

percentages for tart cherries acquired by

handlers during the 1997–98 crop year

during its June 26–27, 1997, meeting.

Final free and restricted percentages

which were recommended by the Board

to the Secretary were established during

its September 11–12, 1997, meeting. A

proposed rule setting the final free and
Federal Register / Vol. 63, No. 78 /Thursday, April 23, 1998 / Proposed Rules 20275

restricted percentages for the 1997–98

crop year at 55 percent and 45 percent,

respectively, was published in the

Federal Register on January 21, 1998,

(63 FR 3048). A final rule is being

published separately in the Federal

Register.

Handlers can satisfy their restricted

percentage in various ways. The

restricted percentage cherries can be

maintained in handler-owned inventory

reserve pools. Handlers can also satisfy

restricted percentage obligations by

redeeming grower diversion certificates,

exporting cherries to designated

countries, shipping to exempt outlets,

contributing to charitable organizations

or diverting cherries at the handler’s

facility.

The maximum volume of cherries that

can be held in the primary inventory

reserve is 50 million pounds. Handlers

can establish a secondary inventory

reserve after the primary inventory

reserve has reached its maximum

volume. There is no maximum volume

in the secondary inventory reserve. Each

handler establishing a reserve (primary

and secondary) is required to pay all of

his or her own storage expenses.

Reserve cherries can be released for sale

upon Board approval into commercial

outlets when the current crop is not

expected to fill demand.

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 become restricted

percentage cherries. Growers would

receive diversion certificates from the

Board stating the weight of cherries

diverted. The grower could then present

this certificate to a handler in lieu of

actual cherries. The handler could apply

the weight of cherries represented by

the certificate against the handler’s

restricted percentage amount. In

comments concerning the 1997–98

grower diversion program there were

concerns that such program could act as

an insurance policy for cherries that are

not marketable contrary to the intent of

the order. The overall intent of the order

is that only cherries that have reached

a harvestable, marketable condition be

allowed to be diverted. Therefore, in

order to further clarify this concept, this

rule would provide that the Board

would not allow diversion credit to a

grower whose fruit was destroyed before

it set and/or matured on the tree, or

whose fruit is unmarketable. If

marketable fruit were to be damaged or

destroyed by acts of nature such as

storms or hail, diversion credit could be

granted.

A new § 930.158 is proposed to be

added to the rules and regulations

specifying the guidelines for grower

diversion for the 1998–99 and

subsequent crop years. First, any grower

desiring to divert in the orchard would

need to request an application form

from the Board and would need to apply

by June 15, 1998, for the 1998–99 crop

year and by April 15 for subsequent

crop years. The application would

include the name, address, phone

number and a signed statement

certifying that the grower will abide by

all the rules and regulations for

diversion. In addition, the grower would

need to include maps of such grower’s

orchard. Each map would include the

grower’s name, address and location of

the orchard.

The Board has recommended four

types of in-orchard diversion. These are:

(1) Random row diversion, in which

rows of cherry trees are randomly

selected by the Board’s computer

programs to remain unharvested; (2)

whole block diversion, in which an

entire orchard block is left unharvested;

(3) partial block diversion, in which a

contiguous portion of a definable block

is diverted; and (4) in-orchard tank

diversion, in which cherries harvested

into tanks are measured, calculated and

then diverted in the orchard. The

regulations for the 1997–98 crop year

only provide for random row and whole

block diversion.

For all types of diversion, except tank

diversion, growers would need to map

each orchard block they intend to

divert. A block would be defined as a

group of trees that are of similar age,

running in the same direction and

having definable boundaries (e.g., roads,

ditches). If a grower desires to divert

using the random row method, all of the

grower’s orchards would need to be

mapped, since random row diversion

would involve diverting a certain

amount of trees from all the grower’s

orchards. If the grower elects whole or

partial block diversion, all blocks to be

diverted would need to be mapped. The

maps would need to be supplied to the

Board so that the Board can calculate

the diversion amounts. New maps

would not need to be prepared each

season. However, maps would have to

be updated to reflect any substantive

changes in the grower’s orchard such as

new trees or trees destroyed by

inclement weather.

It is proposed that, for the 1998–99

and subsequent crop years, only trees

more than six years old would qualify

for diversion. This rule proposes that

trees which are six years old or younger

should not be eligible for diversion

because tart cherry trees do not come

into full commercial production before

they are five to seven years old. These

figures are based on information from

the National Agricultural Statistical

Service (NASS), and from record

testimony. Using trees which are not

producing cherries or which are only

beginning to come into full production

when calculating diversion amounts

would result in figures which are not

representative of a grower’s true

production.

By July 1 of each crop year in which

volume regulation is recommended, a

grower that has provided the Board with

the required orchard maps would have

to inform the Board of such grower’s

intention to divert in the orchard and

the method of diversion. If a grower

does not elect the method of diversion

by July 1, then only random row or inorchard tank diversion would be

available and the Board would provide

the information necessary for the grower

to divert by the random row method.

Random Row Diversion

Based on orchard maps submitted to

the Board by the grower, the Board,

using a computer program, would

randomly designate rows of trees in

each orchard block for nonharvest and

inform the grower of this designation.

This designation would be based upon

the preliminary restricted percentage

amount computed and announced by

the Board. For example, if the

preliminary restricted percentage is 20

percent, the Board’s computer would

randomly select rows of trees across all

blocks in the grower’s orchard to allow

the grower to divert 20 percent of such

grower’s crop. The grower, however,

would not have to choose this diversion

amount. No less than seven days prior

to each grower’s individual harvest date,

such grower could request a different

diversion percentage (either smaller or

greater). The purpose of the seven day

notice is to allow the Board adequate

time to prepare a different orchard map

using different percentages.

To divert cherries through random

row diversion, the grower would not

harvest the designated rows. After

completing harvest of all trees not

designated for diversion, the grower

would be required to notify the Board

and/or a Board compliance officer. Such

grower would also need to provide the

Board with total harvested production

amounts so the Board could calculate

the amount of grower diversion tonnage

to be placed on the diversion certificate.

Independent confirmation by the Board

of the grower’s production would also

be provided by the handler on Board

form number two.
20276 Federal Register / Vol. 63, No. 78 /Thursday, April 23, 1998 / Proposed Rules

Growers would receive diversion

certificates only after confirmation of

diversion is provided to the Board. After

harvest, the Board’s compliance staff

would visit the grower’s orchards to

ensure that the rows selected on the

orchard map for random row diversion

had not been harvested. Once the

orchard has been visited by a

compliance officer and the grower has

carried out the terms and conditions for

random row diversion, a diversion

certificate would be issued to the

grower. The diversion certificate would

represent the weight of cherries diverted

by the grower. The grower could then

present the certificate to a handler to be

redeemed.

Whole Block Diversion

Whole block diversion would involve

diversion of the production from an

entire block of cherry trees.

In whole block diversion, the value of

the diversion would be determined by

application of a statistical sampling

protocol. For example, if a block has 5

rows or less, 3 rows would be randomly

chosen to be sampled. If a block has 6

to 15 rows, 4 rows would be randomly

chosen to be sampled. If a block has 16

or more rows, 5 rows would be

randomly chosen to be sampled.

The Board originally recommended

that a 5 percent sample size be used.

However, after the first season of

operation, the Board determined that

the statistical method of sampling

would be much more accurate in

obtaining the weight of what is to be

diverted. From each of the rows to be

sampled, ten contiguous originally

planted tree sites would be sampled

within the rows. A tree site is a planted

tree or an area where a tree was planted

and may have been uprooted or died.

Only trees over age of six years old

would be harvested for the sample. For

example, if it is determined that five

rows are to be sampled, then 10 tree

sites in each of the five rows would be

sampled. A total of 50 tree sites would

be sampled ((10 original tree sites) × (5

rows) = 50 trees). If a total of 4600

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 92 pounds per site

by 880 trees that were mapped in the

block to yield 80,960 pounds per block.

The Board discussed another

sampling option. This would have

required that mapping be done by the

grower each year the grower applied for

diversion. However, the Board felt that

was an undue burden on the grower.

Using the proposed sampling method

would only require the grower to map

an orchard one time and update the

map, as necessary, to reflect any

substantive changes in the grower’s

orchard. The grower would not need to

redo the map every year such grower

may want to divert.

Prior to sampling, the grower would

notify the Board to allow observation of

the sampling process by a compliance

officer. 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 by the

grower. The grower could then present

the certificate to a handler to be

redeemed.

Partial Block Diversion

The Board recommended that partial

block diversion be available as an

option to growers. Inclusion of this

option would permit growers added

flexibility. Also, it would help

discourage the tendency of growers to

break up large blocks into multiple

small blocks. Partial block diversion

would also speed up the orchard

diversion activity by decreasing the

sampling time for growers and the

Board. Growers may wish to divert only

partial blocks of marketable, harvestable

cherries that have been subjected to

storm damage or are of lower quality.

For example, this would allow a grower

that has a block that is 35 rows by 40

trees per row to divert contiguous rows

1 through 22 and harvest rows 23

through 35. The partial block would be

sampled as in whole block diversion.

This provides the grower with more

options when determining if such

grower should in-orchard divert.

The Board decided to limit partial

block diversions to one partial block per

grower per year. This would alleviate

the time that compliance officers would

need to spend observing sampling and

diversion at grower’s premises. The

Board may evaluate partial block

diversions at the end of the season to

decide if it is not timely or not cost

effective to administer by the

compliance officers. Based on this

evaluation the Board may recommend

increasing the number of partial block

diversions or eliminate this type of

diversion as an option to growers. The

grower should inform the Board by July

1 if such grower elects to whole or

partial block divert. If whole block or

partial block diversion is not selected by

July 1, growers who wish to divert could

then choose the random row method or

the in-orchard tank method of diversion.

In-Orchard Tank Diversion

The Board recommended that inorchard tank diversion be authorized to

growers as another option for diversion.

The Board discussed at length the fact

that the grower diversion program must

be grower friendly in order for growers

to take full advantage of the program.

Adding options to the grower diversion

program provides more flexibility to the

grower.

A grower diverting by this method

would need to notify the Board and

compliance officers of such diversion.

Growers may wish to use tank diversion

when marketable cherries in part of the

orchard have sustained damage or are of

lower quality. Such cherries could be

picked and placed in harvesting tanks

until a compliance officer could come to

the orchard to probe the tanks for

volume measurement and observe the

destruction of the cherries on the

grower’s premises.

To use this diversion option a grower

would need to inform a compliance

officer that such grower has tanks ready

for diversion. The Board recommended

that the grower have no fewer than 10

tanks for diversion prior to informing

the compliance officer. This would keep

the cost of inspections to a minimum

and decrease the compliance officer’s

time from traveling from location to

location to observe a small amount of

in-orchard tank diversion. The Board

discussed the fact that 10 tanks is not a

large amount, since each tank holds

about 1,000 pounds and 10 tanks would

be about a truckload of cherries. This

would not be an undue hardship on

small growers that wish to take

advantage of such diversion.

After the grower informs the

compliance officer of such diversion,

the compliance officer would have up to

five days to come to the grower’s

premises to probe the tanks and observe

the diversion. This would allow the

compliance officer the flexibility to

schedule visits throughout the area and

save compliance costs.

Compliance

In-orchard diversion by growers is a

voluntary action. However, once

chosen, growers are expected to meet all

of the terms and conditions for

diversion to receive a diversion

certificate and to be diligent in actually

diverting the percentage of the crop for

which they have applied. Handlers

depend upon growers to accurately

divert the percentages requested as they

make their marketing and storage

decisions throughout the season. Thus,

in the case where growers fail to

properly divert all of the cherries
Federal Register / Vol. 63, No. 78 /Thursday, April 23, 1998 / Proposed Rules 20277

specified in their application, such

growers should not receive diversion

credit for the undiverted cherries.

When a grower chooses random row

diversion, such grower would not

harvest trees in rows that have been

randomly chosen by the Board’s

computer programs, to be left

unharvested. Unintended errors could

occur during harvest that could void a

growers diversion efforts. The Board has

recommended that growers who choose

random row diversion should be

permitted to rectify any unintended

errors that may occur during harvest.

Therefore, under this proposal, growers

who fail to properly divert designated

rows, but who otherwise meet the terms

and conditions of diversion, would have

to divert cherries in addition to those

randomly chosen, but would still

receive the diversion percentage

originally applied for.

For example, a grower’s map could

require such grower to random row

divert rows 5 and 6 and such grower

may harvest row 5 in error. Such grower

would then be required to divert

another two rows to make up for the

mistake in diverting. This would

discourage mistakes being made in the

orchard since such growers know they

may have to divert more cherries to

correct a mistake. This recommended

adjustment would allow a grower to

correct an error in the orchard and still

receive a diversion certificate.

However, if growers are harvesting at

the end of the orchard and thus, do not

have an opportunity to rectify a mistake

by diverting additional rows or trees,

the Board could reduce the grower’s

diversion certificate by using the two for

one method. For example, a grower

specifies a diversion amount of 20

percent on the original application for

diversion (and does not increase or

decrease such percentage by the June

15, 1998, cutoff date for the 1998–99

crop year and by April 15 for

subsequent crop years). Subsequently,

the grower fails to divert a complete

block or all of the specified rows,

resulting in diversion of only 16 percent

of the crop. Thus, the grower has failed

to divert an additional 4 percent of the

crop. The Board would then multiply

that percent by two and subtract that

amount from the original diversion

application amount. This would reduce

the diversion amount by twice the

amount of the mistake that was made

and therefore, a 2 for 1 reduction would

be made as explained above. In this

example, 2 times 4 percent equals 8

percent; which, when subtracted from

the original percentage of 20 percent,

yields a diversion credit of 12 percent

of the grower’s total production. Thus,

the grower would receive a diversion

certificate equal to 12 percent of the

originally requested amount.

Growers, when aware of such errors,

would need to immediately inform the

Board when such errors are made

during the diversion process to ensure

that they continue to meet the terms and

conditions of diversion. Growers who

divert more than their preliminary

percentage would not receive additional

diversion credit. The Department agrees

with this recommendation. The ‘‘two for

one’’ method is a necessary part of

compliance for the diversion provisions

because it is important that the industry

accurately projects the annual tonnage

of cherries available for market.

The Board recommended that all

grower diversion certificates should be

redeemed with handlers by November 1.

After November 1, grower diversion

certificates would not be valid. It was

intended that diversion certificates be

used within the same crop year that

they were issued, as if a crop had been

produced. The November 1 date would

allow handlers adequate time to meet

their restricted percentage amounts after

final percentages have been established.

Compensation

The Board also recommended adding

a new § 930.133 to provide a

compensation rate of $250 to be paid to

the public member and to the alternate

public member for each meeting they

attend. Section 930.33 provides that the

public member and alternate public

member shall receive such

compensation as the Board may

establish and the Secretary may

approve. The public and alternate

public member cannot have a financial

interest in the tart cherry industry. To

attend meetings, it may be necessary for

them to be absent from their places of

employment. Therefore, the Board

recommended a compensation rate be

established. This payment would be in

addition to compensation for travel,

lodging, meals, and other related costs

incurred in attending Board meetings.

For example, if a Board meeting is

convened and lasts for a day or two or

only four hours, the public member

and/or alternate public member

attending the meeting would receive

$250.

The Regulatory Flexibility Act and

Effects on Small Businesses

The Agricultural Marketing Service

(AMS) has considered the economic

impact of this action on small entities

and has prepared this initial regulatory

flexibility analysis. The Regulatory

Flexibility Act (RFA) 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

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 1,220 producers or

growers 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.

The majority of handlers and producers

of tart cherries may be classified as

small entities.

This proposed rule would establish

rules and regulations for grower

diversion under the tart cherry

marketing order. The order was

promulgated on September 25, 1996.

The Board was established on December

20, 1996, met several times in 1997 and

recommended numerous rulemaking

actions. The Board recommended

establishing an assessment rate and late

payment charges, procedures for grower

and handler diversion and exemptions

for certain order provisions. The Board

also recommended regulations for the

issuance of grower diversion certificates

and final free and restricted percentages

for the 1997–98 crop year. These actions

were recommended at Board meetings

held March 12–13, June 26–27,

September 11–12, 1997, and January

29–30, 1998.

The impact of this rule would be

beneficial to growers. The receipt of

grower diversion certificates is one of

the methods under the order that

handlers can utilize to meet any such
20278 Federal Register / Vol. 63, No. 78 /Thursday, April 23, 1998 / Proposed Rules

handler’s restricted percentage. Growers

may voluntarily choose to divert

because they have an abundance of low

value, poor quality marketable cherries

or because they are unable to find a

processor willing to process some or all

of their cherries. Before choosing to

divert, the grower would most likely

evaluate the harvesting and other

cultural costs that could be saved by

diverting and locate a handler that

would be willing to redeem such

grower’s diversion certificate. An

interim final rule was published on

August 25, 1997, (62 FR 44881)

establishing terms and conditions for

the issuance of grower diversion

certificates by the Board for the 1997–

98 crop year. A final rule is being

published separately in the Federal

Register.

Initially, about 700 growers expressed

an interest in participating in the

voluntary grower diversion program.

However, because of the exceptional

quality of 1997–98 tart cherry crop,

fewer growers opted to participate in the

grower diversion program. As such,

approximately 120 growers (65 growers

diverting by random row and 55

diverting by whole block diversion)

received diversion certificates for a total

of 6,139,600 pounds of diverted cherries

for an average of 51,163 pounds of

cherries diverted per grower. Although

it is difficult to quantify the overall

effect the grower diversion program has

had on the tart cherry industry at this

time, information from the Board

indicates that the program’s economic

impact on both the handlers and

growers appears to have been positive.

There seems to be overall satisfaction

among both growers and handlers with

this year’s returns. The economic

impact of the grower diversion

provisions of this proposed regulation

are also expected to be positive. They

should result in benefits to both growers

and handlers which are similar to those

which resulted from the 1997–98

program. In addition, this proposed rule

offers growers greater flexibility when

diverting their cherries.

With regard to methods of diversion,

this rule proposes four different ones:

Random row, whole block, partial block

and in-orchard tank. During diversion

for the 1997–1998 season only the first

two were used. The Board discussed

limiting the blocks to be diverted to 5

acre blocks, but felt that this could have

an adverse impact on small growers that

produce on less than 5 acre blocks.

Therefore, the Board recommended

there be no limit on the size of orchard

blocks to be diverted. The Board also

discussed a sampling option that would

have required mapping to be done by

the grower each year the grower applied

for diversion, but rejected it because it

would be an undue burden on the

grower. Using the sampling methods in

this proposal would only require the

grower to map an orchard one time and

not redo the map every year such

grower may want to divert.

This proposed rule would also

establish a compensation rate of $250

per meeting for the public member and

alternate public member when attending

Board meetings. The public member and

alternate public member would receive

$250 whether the Board meeting

convened and lasted for one or two days

or only four hours. The compensation to

be paid to the public member and

alternate public member would

compensate such persons for loss of

work or wages since such persons do

not have a financial interest in the tart

cherry industry. There was

consideration for a lower compensation

rate but the Board decided to proceed

with the above mentioned amount. The

Board did not support a lower

compensation rate because it did not

adequately compensate the public

member and alternate public member

for their time to attend Board meetings.

This proposed rule would not impose

any reporting or recordkeeping

requirements on either small or large

tart cherry growers or handlers in

addition to those already considered or

approved during the order promulgation

proceeding. The only written

information requested from a grower is

an orchard map and the grower’s final

production volume. Since growers

maintain this information as part of

their normal farming operations, it takes

approximately 10 minutes to prepare a

map and less than a minute to total the

final production volume. 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 proposed

rule.

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 imposed by

this order have been previously

approved by OMB and assigned OMB

Number 0581–0177.

The Board’s meetings were widely

publicized throughout the tart cherry

industry and all interested persons were

invited to attend the meeting and

participate in Board deliberations. Like

all Board meetings, the March, June,

September 1997, meetings and January

1998 meeting were public meetings and

all entities, both large and small, were

allowed to express their views on these

issues. The Board itself is composed of

18 members, of which 17 members are

growers and handlers and one

represents the public. Also, the Board

has a number of appointed committees

to review certain issues and make

recommendations to the Board. The

Board’s Diversion Subcommittee met on

March 12, 1997, and discussed grower

diversion in detail. That meeting was

also a public meeting and both large and

small entities were able to participate

and express their views. Finally,

interested persons are invited to submit

information on the regulatory and

informational impacts of this action on

small businesses.

A 30-day comment period is provided

to allow interested persons to respond

to this proposal. This comment period

is appropriate because the 1998–99 crop

year will begin on July 1, 1998. All

written comments timely received will

be considered before a final

determination is made on this matter.

List of Subjects in 7 CFR Part 930

Marketing agreements, Reporting and

recordkeeping requirements, Tart

cheeries.

For the reasons set forth in the

preamble, 7 CFR part 930 is proposed to

be amended as follows:

PART 930—TART CHERRIES GROWN

IN THE STATES OF MICHIGAN, NEW

YORK, PENNSYLVANIA, OREGON,

UTAH, WASHINGTON, AND

WISCONSIN

1. The authority citation for 7 CFR

part 930 continues to read as follows:

Authority: 7 U.S.C. 601–674.

2. A new § 930.133 is added to read

as follows:

§ 930.133 Compensation rate.

A compensation rate of $250 per

meeting shall be paid to the public

member and to the alternate public

member when attending Board

meetings. Such compensation is a per

meeting rate. For example, if a Board

meeting is convened and lasts one or

two days or only four hours, the public

member and/or alternate public member

attending the meeting would receive

$250 each.

3. A new § 930.158 is added to read

as follows:
Federal Register / Vol. 63, No. 78 /Thursday, April 23, 1998 / Proposed Rules 20279

§ 930.158 Grower diversion and grower

diversion certificates.

(a) Grower diversion certificates. The

Board may issue diversion certificates to

growers in districts subject to volume

regulation who have voluntarily elected

to divert in the orchard all or a portion

of their tart cherry production which

otherwise, upon delivery to handlers,

would become restricted percentage

cherries. Growers may offer the

diversion certificate to handlers in lieu

of delivering cherries. Handlers may

redeem diversion certificates with the

Board through November 1 of each crop

year. After November 1 of the crop year

that crop year’s grower diversion

certificates are no longer valid. Cherries

that have reached a harvestable,

marketable condition will be eligible for

diversion. Diversion will not be granted

to growers whose fruit was destroyed

before it set and/or matured on the tree,

or whose fruit is unmarketable. If

marketable fruit were to be damaged or

destroyed by acts of nature such as

storms or hail diversion credit could be

granted.

(b) Application and mapping for

diversion. Any grower desiring to divert

cherries using methods other than

random row or in-orchard tank shall

submit a map of the orchard or orchards

to be diverted, along with a completed

Grower Diversion Application, to the

Board by June 15, 1998, for the 1998–

99 crop year (July 1, 1998 through June

30, 1999) and April 15 for subsequent

crop years. The application includes a

statement which must be signed by the

grower which states that the grower

agrees to comply with the regulations

established for a tart cherry diversion

program. Each map shall contain the

grower’s name and number assigned by

the Board, the grower’s address, block

name or number when appropriate,

location of orchard or orchards and

other information which may be

necessary to accomplish the desired

diversion. On or before July 1, the

grower should inform the Board of such

grower’s intention to divert in-orchard

and what type of diversion will be used.

The four types of diversion are random

row diversion, whole block diversion,

partial block diversion and in-orchard

tank diversion. A grower who informs

the Board about the type of diversion he

or she wishes to use by July 1 can elect

to use any diversion method or a

combination of diversion methods. Only

random row or in-orchard tank

diversion methods may be used if the

Board is not so informed by July 1.

Trees that are six years or younger do

not qualify for diversion.

(1) Random row diversion. Using the

orchard map furnished by the grower,

the Board will randomly select rows of

trees within the orchard to be diverted.

The amount of cherries to be diverted

will be based on the preliminary

restricted percentage amount

established pursuant to § 930.50. A

grower may elect a different percentage

amount; however, the grower needs to

inform the Board as soon as possible

after the preliminary percentages are

announced of this other amount, but in

no event shall this be less than seven

days in advance of harvest. The

designated rows indicated by the map

must not be harvested. After completing

harvest of the remaining rows in the

orchard, the grower must notify the

Board and/or the Board’s compliance

officer. A compliance officer will then

be allowed to observe the grower’s

orchard to assure that the selected rows

have not been harvested. The grower

must inform the Board of the total

production of the orchard to calculate

the tonnage that was diverted.

(2) Whole block diversion. Based on

maps supplied by the grower, a

sampling procedure will be used to

determine the amount of cherries in the

orchard to be diverted. A block is

defined as rows that run the same

direction, are similar in age, and have

definable boundaries. The Board would

require a number of trees to be sampled

depending on the size of the block. For

example, if a block has 5 rows or less,

3 rows would be randomly chosen to be

sampled, if a block has 6 to 15 rows, 4

rows would be randomly chosen to be

sampled, and if a block has 16 or more

rows, 5 rows would be randomly chosen

to be sampled. From each of the rows

to be sampled ten contiguous originally

planted tree sites will be sampled

within the rows. Only trees more than

five years old will be harvested for the

sample. For example, if it is determined

that five rows are to be sampled and 10

trees in the five rows are to be sampled,

then a total of 50 trees are to be sampled

((10 original tree sites)×(5 rows)=50

trees). A total of 4600 pounds will be

harvested from the sample trees which

is divided by 50 trees to obtain a yield

of 92 pounds per tree. To find the yield

for the block, 92 pounds is multiplied

by 880 trees that were mapped in the

block to yield 80,960 pounds per block.

The harvested tonnage will be converted

to a volume that represents the entire

block of cherries. The grower should

inform the Board when the samples are

being taken so a compliance officer can

observe the sampling. The compliance

officer would be allowed to confirm that

the block has been diverted.

(3) Partial block diversion. Partial

block diversion will also be

accomplished using maps supplied by

the grower. Sampling will be done as in

whole block diversion except that only

partial blocks would be selected and

sampled. Growers may divert one

partial block per year. Such block must

be mapped and would be sampled as

described under whole block diversion.

Rows used in partial block diversion

must be contiguous.

(4) In-orchard tank diversion. Growers

wishing to in-orchard tank divert must

pick the cherries to be diverted and

place them in harvesting tanks. A

compliance officer would then probe

the tanks for volume measurement and

observe the destruction of the cherries

on the grower’s premises. Growers

wishing to take advantage of this option

must have at least 10 tanks ready for

diversion. The compliance officer has

up to five days to come to the grower’s

premises to observe the diversion after

being contacted.

(c) Compliance. Growers who

voluntarily participate in the grower

diversion program must sign and file

with the Board a Grower Diversion

Application. By signing the application,

a grower agrees to the terms and

conditions of the grower diversion

program as contained in these

regulations. To be eligible to receive

diversion credit, growers voluntarily

choosing to divert cherries must meet

the following terms and conditions:

(1) In order to receive a certificate, a

grower must demonstrate, to the

satisfaction of the Board, that rows or

trees which were selected for diversion

were not harvested. Trees six years old

or younger do not qualify for diversion.

(2) The grower must furnish the Board

with a total harvested production

amount so the Board can calculate the

amount of grower diversion tonnage to

be placed on the diversion certificate.

The Board will confirm the grower’s

production amount with information

provided by handlers (to which the

grower delivers cherries) on Board form

Number Two.

(3) The grower must agree to allow a

Board compliance officer to visit the

grower’s orchard to confirm that

diversion has actually taken place. If the

terms and conditions for whole block,

partial block or in-orchard tank

diversion are not completed, the Board

shall not issue the grower a diversion

certificate. If a grower who chooses

random row diversion harvests rows

that were designated not to be

harvested, the grower should inform the

Board immediately of the error. The

grower will then be required to divert

twice the amount (rows or trees)

incorrectly harvested to correct the

mistake. The grower will still receive a

diversion certificate equal to the original
20280 Federal Register / Vol. 63, No. 78 /Thursday, April 23, 1998 / Proposed Rules

requested amount. However, in

instances where a grower is at the end

of harvesting the orchard and fails to

divert a complete block or specified

rows, the Board shall multiply by two

the difference between the original

diversion amount and the actual

diverted amount. The Board shall

subtract that amount from the diversion

application amount. Thus, the grower

would receive a grower diversion

certificate equal to a portion of the

originally requested amount. If the

grower does not inform the Board of

such errors, the grower will not receive

a diversion certificate.

Dated: April 17, 1998.

Robert C. Keeney,

Deputy Administrator, Fruit and Vegetable

Programs.

[FR Doc. 98–10770 Filed 4–22–98; 8:45 am]

BILLING CODE 3410–02–P