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

69673 

Vol. 76, No. 217 

Wednesday, November 9, 2011 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 930 

[Doc. No. AO–370–A9; 11–0093; AMS–FV– 

10–0087; FV10–930–5] 

Tart Cherries Grown in Michigan, New 

York, Pennsylvania, Oregon, Utah, 

Washington, and Wisconsin; 

Recommended Decision and 

Opportunity To File Written Exceptions 

to Proposed Amendment of Marketing 

Order No. 930 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Proposed rule and opportunity 

to file exceptions. 

SUMMARY: This is a recommended 

decision regarding proposed 

amendments to Marketing Order No. 

930 (order), which regulates the 

handling of tart cherries grown in 

Michigan, New York, Pennsylvania, 

Oregon, Utah, Washington, and 

Wisconsin. These amendments were 

proposed by the Cherry Industry 

Administrative Board (CIAB), which is 

responsible for local administration of 

the order. These amendments would 

revise: Section 930.10, the definition of 

‘‘Handle,’’ Section 930.50, ‘‘Marketing 

Policy,’’ and Section 930.58, ‘‘Grower 

Diversion Privilege.’’ 

The proposed amendments are 

intended to improve the operation and 

administration of the order. This 

recommended decision invites written 

exceptions on the proposed 

amendments. 

DATES: Written exceptions must be filed 

by November 25, 2011. 

ADDRESSES: Written exceptions should 

be filed with the Hearing Clerk, U.S. 

Department of Agriculture, Room 1031– 

S, Washington, DC 20250–9200, Fax: 

(202) 720–9776 or via the Internet at 

http://www.regulations.gov, or to Parisa 

Salehi at the Email address provided in 

the FOR FURTHER INFORMATION CONTACT

section. All comments should reference 

the document number and the date and 

page number of this issue of the Federal 

Register. Comments will be made 

available for public inspection in the 

Office of the Hearing Clerk during 

regular business hours, or can be viewed 

at: http://www.regulations.gov. All 

comments submitted in response to this 

rule will be included in the record and 

will be made available to the public. 

Please be advised that the identity of the 

individuals or entities submitting the 

comments will be made public on the 

Internet at the address provided above. 

FOR FURTHER INFORMATION CONTACT: 

Parisa Salehi, Marketing Order and 

Agreement Division, Fruit and 

Vegetable Programs, AMS, USDA, 1400 

Independence Avenue SW., Stop 0237, 

Washington, DC; Telephone: (202) 720– 

9918, Fax: (202) 720–8938, or Email: 

Parisa.Salehi@ams.usda.gov; or Martin 

Engeler, Marketing Order and 

Agreement Division, Fruit and 

Vegetable Programs, AMS, USDA, 2202 

Monterey Street, Fresno, California, 

Telephone: (559) 487–5110, Fax: (559) 

487–5906, or Email: 

Martin.Engeler@ams.usda.gov. 

Small businesses may request 

information on this proceeding by 

contacting Laurel May, Marketing Order 

Administration Division, Fruit and 

Vegetable Programs, AMS, USDA, 1400 

Independence Avenue SW., Stop 0237, 

Washington, DC 20250–0237; 

Telephone: (202) 205–2830, Fax: (202) 

720–8938, Email: 

Laurel.May@ams.usda.gov. 

SUPPLEMENTARY INFORMATION: Prior 

document in this proceeding: Notice of 

Hearing issued on March 4, 2011, and 

published in the March 14, 2011, issue 

of the Federal Register (76 FR 13528). 

This action is governed by the 

provisions of sections 556 and 557 of 

title 5 of the United States Code and is 

therefore excluded from the 

requirements of Executive Order 12866. 

Preliminary Statement 

Notice is hereby given of the filing 

with the Hearing Clerk of this 

recommended decision with respect to 

the proposed amendment to Marketing 

Order 930 regulating the handling of tart 

cherries grown in Michigan, New York, 

Pennsylvania, Oregon, Utah, 

Washington, and Wisconsin and the 

opportunity to file written exceptions 

thereto. Copies of this decision can be 

obtained from Parisa Salehi, whose 

address is listed above. 

This recommended decision is issued 

pursuant to the provisions of the 

Agricultural Marketing Agreement Act 

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

hereinafter referred to as the ‘‘Act’’, and 

the applicable rules of practice and 

procedure governing the formulation of 

marketing agreements and orders (7 CFR 

part 900). 

The proposed amendments are based 

on the record of a public hearing held 

April 20 and 21, 2011, in Grand Rapids, 

Michigan, and on April 26, 2011, in 

Provo, Utah. Notice of this hearing was 

published in the Federal Register on 

March 14, 2011 (76 FR 13528). 

The proposed amendments were 

recommended by CIAB and submitted 

to USDA on September 22, 2010. 

The proposed amendments 

recommended by CIAB are summarized 

below. 

1. Amendment 1 would revise the 

term ‘‘handle’’ within the order. This 

proposal would revise existing § 930.10, 

Handle, to exclude handler acquisition 

of grower diversion certificates from the 

definition of handle. 

2. Amendment 2 would revise the 

‘‘marketing policy’’ provisions in 

§ 930.50 of the order so that growerdiverted cherries are not counted as 

production in the volume control 

formula. 

3. Amendment 3 would revise the 

existing § 930.58, so grower-diverted 

cherries are not treated as actual 

harvested cherries. 

In addition to the proposed 

amendments to the order, AMS 

proposed making any additional 

changes to the order as may be 

necessary to conform to any amendment 

that may result from the hearings. 

Eighteen industry witnesses testified 

at the hearing. These witnesses 

represented tart cherry producers and 

handlers in the production area, as well 

as CIAB staff, and all supported the 

proposed amendments. 

At the conclusion of the hearing, the 

Administrative Law Judge established a 

deadline of June 28, 2011, for interested 

persons to file proposed findings and 

conclusions or written arguments and 

briefs based on the evidence received at 

the hearing. CIAB requested an 

extension of time to submit its brief. Its 

request was granted and the date for 

submission of briefs was set to July 8, 


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69674 Federal Register / Vol. 76, No. 217 / Wednesday, November 9, 2011 / Proposed Rules 

2011. One brief was filed; it supported 

the proposed amendments. 

Material Issues 

The material issues presented on the 

record of hearing are as follows: 

(1) Whether to amend the order to 

exclude grower diversion certificates 

from the definition of handle; 

(2) Whether to amend the order so 

that grower diverted cherries are not 

counted as production in the volume 

control formula; 

(3) Whether to amend the order so 

that grower diverted cherries are not 

treated as actual harvested cherries. 

Findings and Conclusions 

The following findings and 

conclusions on the material issues are 

based on evidence presented at the 

hearing and the record thereof. 

Material Issue Number 1—Definition of 

Handle 

Section 930.10 of the order should be 

amended to exclude handler acquisition 

of grower diversion certificates from the 

definition of handle. 

Under Section 930.10 of the order, the 

current definition of ‘‘handle’’ includes 

the converting of cherries commercially 

into a processed product, and obtaining 

grower diversion certificates. Under the 

order, a ‘‘handler’’ is any person who 

first handles cherries. Marketing order 

obligations are applicable to handlers, 

and are based upon the quantity of 

cherries handled by handlers. 

Volume control provisions under the 

order provide a mechanism for the 

industry to set aside crop in large crop 

years to help stabilize supply and 

prices. When volume control is in effect, 

free and restricted percentages are 

established. These percentages are 

applied to cherries and grower diversion 

certificates acquired by handlers from 

growers. Handlers can market free 

percentage cherries to any market. To 

meet their restricted percentage 

obligation, handlers have three options: 

place cherries in inventory reserve, 

acquire grower diversion certificates, or 

divert cherries themselves. 

Grower diversion provisions under 

the order provide another method of 

managing supply by allowing growers 

the opportunity to undertake in-orchard 

diversion of cherries prior to or during 

harvest. When a grower chooses to 

divert cherries from production, the 

CIAB issues a grower diversion 

certificate to that grower representing 

the quantity of the diverted cherries that 

were left in the orchard. Growers can 

redeem the diversion certificates with 

handlers, who then use the certificates 

as one of their compliance tools to 

satisfy their restricted percentages. 

Under current order provisions, 

handler acquisition of grower diversion 

certificates is treated the same as actual 

cherries delivered. Thus, when volume 

regulation is in effect, free and restricted 

percentages apply to the quantity of 

cherries (including grower diversion 

certificates) handled by each handler. 

As handlers acquire grower diversion 

certificates in order to help satisfy their 

restricted obligation, their restricted 

obligation increases. The result is a 

reduction in value to handlers of the 

grower diversion certificates, which in 

turn causes a disincentive for growers to 

divert cherries. 

Because the current order provisions 

regarding handler acquisitions of grower 

diversion certificates reduces the value 

of grower diversion certificates to 

handlers, growers are less likely to 

divert cherries from production than 

they would be if handler acquisition of 

grower diversion certificates was not 

considered ‘‘handling’’, and handlers’ 

restricted obligations did not increase 

with the acquisition of such certificates. 

According to hearing evidence, 

currently, when a handler utilizes the 

grower diversion certificates, the 

handler compensates the grower at a 

reduced rate because the certificates’ 

worth as a compliance tool to a handler 

is reduced. Witnesses testified that as a 

result, growers have less incentive to 

divert cherries and utilize grower 

diversion certificates. Data was 

presented at the hearing to illustrate the 

potential difference in costs associated 

with diverting cherries by leaving them 

un-harvested versus harvesting them. 

The data illustrates that costs to both 

growers and handlers would be 

reduced, if this amendment is 

implemented. A discussion of the costs 

and possible reimbursement to growers, 

as well as the benefits, is included in the 

Regulatory Flexibility Analysis section 

of this recommended decision. 

Record evidence supports that if this 

amendment is implemented, it would 

satisfy its intent to increase the value of 

grower diversion certificates, and thus 

provide incentives for growers to leave 

some fruit un-harvested, as they would 

receive full credit for diverting a portion 

of their crops. According to the record, 

one of the primary reasons the order 

was established was to improve grower 

returns. The record indicates that while 

the order has benefited growers, prices 

in general do not reach the growers’ 

costs of production in some years. The 

record further indicates, however, that if 

this proposal is implemented, it would 

provide additional benefits to growers, 

and help provide long-term 

sustainability of the industry. 

Record evidence indicates that the 

current marketing order provisions 

discourage in-orchard diversions, 

especially in those years when the 

restricted percentage is large. Therefore, 

this aspect in the order should be 

restructured to better serve the needs of 

the tart cherry industry. Witnesses 

testified that if the term ‘‘handle’’ is 

amended according to this proposal, it 

provides an incentive for growers to 

divert a portion of their crop in high 

volume crop years. Grower diversion 

can reduce growers’ costs of harvesting 

and transporting fruit. It can also help 

improve prices by decreasing the supply 

of cherries in handlers’ inventories. 

When the available supply of cherries to 

the market is decreased, the price 

depressing effect of oversupply is no 

longer present, resulting in a positive 

effect for both growers and handlers. 

Witnesses testified that the intent of 

this recommendation is to remove the 

disincentive for growers to divert 

cherries from production. The record 

indicates that increased grower 

diversion activity will help to reduce 

excess supply, which in turn is 

expected to positively impact grower 

returns. In addition, grower costs 

associated with harvesting and 

transporting cherries to handlers will be 

reduced as more cherries are diverted in 

orchard. Witnesses supported the idea 

that increasing the value of unharvested cherries would improve the 

volume control provisions of the order, 

and would incentivize growers to divert 

their cherries in orchard. There was no 

opposition testimony against this 

proposed amendment. For the reasons 

stated herein, it is recommended that 

§ 930.10, Handle, be amended to 

exclude the phrase ‘‘or obtain grower 

diversion certificates issued pursuant to 

§ 930.58.’’ 

Material Issue Number 2—Marketing 

Policy 

Section 930.50 of the order should be 

amended so that grower diverted 

cherries are not counted as production 

in the volume control formula. Section 

930.50(d) of the order currently 

provides in part that ‘‘No later than 

September 15 of each crop year the 

Board shall review actual production 

during the current crop year * * *.’’ 

Section 930.50(d), would be revised to 

read as follows: ‘‘No later than 

September 15 of each crop year the 

Board shall review the most current 

information available including, but not 

limited to, processed production and 

grower diversion of cherries during the 

current crop year.’’ 


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Section 930.50 provides the 

parameters for computing volume 

control percentages under the order. 

The CIAB must meet on or about July 

1 of each crop year to review sales data, 

inventory data, current crop forecasts, 

and market conditions. From this 

information, the CIAB computes an 

optimum supply, which essentially 

represents the desirable amount of 

cherries needed to satisfy market 

demands for the upcoming crop year. 

The CIAB also considers the carryin 

inventory and production for the 

upcoming crop year to determine if the 

supply of cherries is expected to exceed 

the optimum supply. If the expected 

supply exceeds the optimum supply, 

free and restricted volume control 

percentages are computed and 

implemented. Under current order 

provisions, cherries that have been 

diverted from production by growers are 

considered as part of the production 

when computing volume control 

percentages, because they are 

considered to be ‘‘handled’’ when they 

are acquired by handlers, as discussed 

under Material Issue Number 1. This 

proposed amendment would require the 

CIAB to consider the quantity of grower 

diversion certificates acquired by 

handlers when computing volume 

control percentages, under the optimum 

supply formula (OSF) and is consistent 

with the proposed amendment under 

Material Issue Number 1. 

Through the volume control 

provisions of the order, the supply and 

demand of tart cherries are brought into 

proper relationship with each other. 

When the supply of tart cherries 

available to the market exceeds the 

average demand for them in the 

domestic or ‘‘free’’ market, the crop is 

restricted in terms of what may move 

into the free market. The restricted 

cherries therefore are kept out of the 

domestic market. A restricted 

percentage is calculated pursuant to 

Section 930.50 of the order and each 

handler’s acquisition of cherries and 

grower diversion certificates is subject 

to that percentage. 

The volume control mechanism under 

the order involves growers diverting 

cherries from production by leaving 

them unharvested in the orchard. 

Handlers can coordinate with their 

growers during large crop years by 

encouraging them to divert cherries 

from production. Handlers can then 

acquire from the growers the diversion 

certificates issued to growers by the 

CIAB and use them as credit against 

their restriction or reserve obligation. 

As previously discussed, handlers 

must currently include the pounds of 

cherries represented by the grower 

certificates they acquire as part of their 

‘‘handling,’’ as though these cherries 

had been delivered and processed. This 

results in grower-diverted cherries being 

included as part of production when the 

CIAB computes volume control 

percentages. 

Witnesses testified that grower 

diversion certificates contribute to the 

supply for the purpose of the OSF. 

Consequently, grower in-orchard 

diversions effectively increase the 

supply of restricted cherries in any 

given year, even though none of these 

cherries are delivered or processed. A 

restricted percentage is calculated 

pursuant to the OSF, and each handler’s 

handle of restricted cherries is subject to 

that percentage. 

Witnesses testified that the 

fluctuation of the restriction percentage 

and its impact upon grower diversion 

certificates creates considerable 

uncertainty. This uncertainty stems 

from the fact that grower diversions are 

part of the supply calculation in the 

OSF, currently and contribute to 

restriction determination. 

If these amendments are 

implemented, grower diversion 

certificates would not be included as 

part of production in the volume control 

formula. This is because, if the cherries 

are diverted, they would not be added 

to the supply and would therefore not 

be part of OSF. 

An additional change will be made to 

this section to the factors that the CIAB 

considers when it computes the 

preliminary and interim percentages or 

determines the final percentages to 

recommend to the Secretary. Section 

930.50(e) will be amended to include an 

additional factor and phrase: ‘‘to be the 

quantity of grower-diverted cherries 

during the crop year.’’ The order 

currently includes only nine factors. A 

new section 930.50(e) would include an 

additional factor, ‘‘(10) The quantity of 

grower-diverted cherries during the crop 

year.’’ This change will require the 

CIAB to consider grower diversion of 

cherries in OSF when it computes final 

percentages. 

For the reasons stated above, it is 

recommended that § 930.50, Marketing 

Policy, be amended to exclude grower 

diverted cherries from the calculation of 

actual production in the volume control 

formula, and to include an additional 

factor when computing preliminary or 

interim percentages, or determining 

final percentages for recommendation to 

the Secretary, by the CIAB. No 

opposition testimony was given 

regarding this proposed amendment, 

and it is thus recommended for 

adoption. 

Material Issue Number 3—Grower 

Diversion Privilege 

Section 930.58 provides parameters 

for grower diversion of cherries under 

the order. Section 930.58(a) of the order 

provides that grower delivery of 

diversion certificates to a handler shall 

be treated as though they were actual 

harvested cherries. Section 930.58(a) 

should be modified to eliminate the 

phrase ‘‘as though there were actual 

harvested cherries’’ to correspond to the 

proposed definition of handle. 

As discussed under Material Issue 

Numbers 1 and 2, the proposed 

amendments to section 930.10 and 

section 930.50 would change how 

grower diversion of cherries are 

accounted for under the order. Grower 

diversion certificates acquired by 

handlers would no longer be counted as 

handled cherries, and would also not be 

included as production in the volume 

control formula. The proposed 

amendment to section 930.58(a) would 

make reference to the treatment of 

grower diversion certificates consistent 

with the proposed amendments to 

sections 930.10 and 930.50 by removing 

the reference that grower diversion 

certificates are treated as handled 

cherries. 

No testimony opposing this proposal 

was provided at the hearing. For the 

reasons stated above, it is recommended 

that a § 930.58, Grower diversion 

privilege, be revised so that grower 

diverted cherries would not be 

considered and accounted for as actual 

harvested cherries. 

Small Business Considerations 

Pursuant to the requirements set forth 

in the Regulatory Flexibility Act (RFA), 

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 so that 

small businesses will not be unduly or 

disproportionately burdened. Marketing 

orders and amendments thereto are 

unique in that they are normally 

brought about through group action of 

essentially small entities for their own 

benefit. 

There are approximately 40 handlers 

of tart cherries subject to regulation 

under the order and approximately 600 

producers of tart cherries in the 

regulated area. Small agricultural 

service firms, which include handlers, 

have been defined by the Small 

Business Administration (SBA)(13 CFR 

121.201) as those having annual receipts 

of less than $7,000,000, and small 


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agricultural producers are defined as 

those having annual receipts of less than 

$750,000. A majority of the tart cherry 

producers and handlers are considered 

small entities under the SBA standards. 

The geographic region regulated by 

the order includes the states of 

Michigan, New York, Oregon, 

Pennsylvania, Utah, Washington, and 

Wisconsin. Acreage devoted to tart 

cherry production in the regulated area 

has declined in recent years. According 

to data presented at the hearings, 

bearing acreage in 1987–88 totaled 

50,050 acres; by 2010–11 it had 

declined to 35,650 acres. Michigan 

accounts for 73 percent of total U.S. 

bearing acreage with 26,200 bearing 

acres. Utah is second, with a reported 

3,300 acres, or approximately nine 

percent of the total. The remaining 

states’ acreage ranges from 600 to 1,800 

acres. The order includes authority for 

(1) Volume regulation, (2) promotion 

and research, and (3) grade and quality 

standards. Volume regulation is used 

under the order to augment supplies 

during low supply years, with product 

placed in reserves during large supply 

years. 

Production of tart cherries can 

fluctuate widely from year to year. The 

magnitude of these fluctuations is one of 

the most pronounced for any 

agricultural commodity in the United 

States, and is due in large part to 

weather related conditions during the 

bloom and growing seasons. This 

fluctuation in supply presents a 

marketing challenge for the tart cherry 

industry because demand for the 

product is relatively inelastic, meaning 

a change in supply has a 

proportionately larger change in price. 

According to data presented at the 

hearing, production has ranged from a 

low of 62.5 million pounds in 2002–03 

to a high of 395.6 million pounds in 

1995–96. For 2010–11, Michigan 

accounted for 71 percent of total U.S. 

production with 135 million pounds. 

Utah is second, with a reported 23 

million pounds, or approximately 

twelve percent of the total. The 

remaining states produce between 15.4 

and 1.2 million pounds. 

During the hearings, multiple 

witnesses testified that they did not 

believe that the proposed amendments 

would have any adverse impacts on 

small agricultural service firms or small 

agricultural producers as defined by the 

SBA. According to the record, the 

proposed amendments would help 

agricultural businesses and growers by 

encouraging growers to divert some of 

their tart cherries in the orchard during 

years of extremely large supply. The 

proposed amendments would result in 

higher grower returns during years of 

extremely large supply. Processors 

would not incur the cost of processing 

and storing excess tart cherries. 

Furthermore, the growers who divert 

their crop do not incur harvest and 

transportation costs. The proposed 

amendments would result in a lower 

possibility of market saturation. Overall 

the supply of tart cherries in extremely 

large supply years result in higher 

returns for growers. 

The proposed amendments are 

intended to provide additional 

flexibility in administering the volume 

control provisions of the order, and to 

improve its operation and 

administration. Record evidence 

indicates that the proposed amendments 

are intended to benefit all producers 

and handlers under the order, regardless 

of size. 

There are three proposed 

amendments. Amendment one would 

amend Section 930.10 of the order to 

change the definition of ‘‘handle,’’ so 

that handler acquisition of grower 

diversion certificates is not considered 

handling. Amendment two would 

amend the ‘‘marketing policy’’ 

provisions in Section 930.50 of the 

order so that grower-diverted cherries 

are not counted as production in the 

OSF. Amendment three would amend 

section 930.58 of the order so that 

grower-diverted cherries are not treated 

as actual harvested cherries. The 

proposed amendments would modify 

how grower diversions are accounted 

for under the order. 

Evidence presented when the order 

was promulgated indicated that a 

grower diversion program could benefit 

the industry by managing fluctuating 

supply. Witnesses indicated that the 

order has been successful in this regard. 

However, the record indicated that the 

order should be more flexible in 

addressing how grower diversions are 

utilized under the order. 

The most efficient method to deal 

with a surplus is at the lowest level of 

the production and processing chain. 

The industry wastes the least amount of 

resources if it diverts cherries in the 

orchard. Once they are harvested, 

chilled, washed, de-stemmed, sorted, 

pitted, and packed, significantly higher 

costs are incurred and there is a greater 

risk of waste. Diverting surplus cherries 

in the orchard is the most cost effective 

method of dealing with a surplus 

situation and provides the largest 

benefit to growers through lower costs. 

The order establishes an opportunity 

for growers to undertake in-orchard 

diversions of cherries (§ 930.58). These 

diversions are done during harvest in 

accordance with procedures defined 

under the order and are overseen by the 

CIAB. The CIAB issues grower diversion 

certificates to the growers that represent 

the pounds of cherries that were left in 

the orchard. 

Growers redeem the diversion 

certificates with handlers, who use them 

as one of their compliance alternatives 

to meet their reserve or restricted 

obligation. However, under the current 

order definition of ‘‘handle,’’ handlers 

must include the pounds of cherries 

represented by the certificates as part of 

the total cherries that have been 

delivered and processed. 

Consequently, grower in-orchard 

diversions effectively increase the 

supply of restricted cherries even 

though none of those cherries were 

delivered for processing. Grower 

diversion certificates are considered to 

be part of the total quantity of cherries 

that a handler receives and processes, 

and contribute to the total supply of 

restricted cherries in the OSF. This 

creates confusion for both the growers 

and processors. 

The OSF is the mechanism specified 

in the order and used by CIAB to 

determine the relationship between the 

demand and supply of tart cherries in a 

given year. When the supply of tart 

cherries exceeds the average demand, 

volume regulation is implemented. 

In an effort to stabilize supply and 

prices, the tart cherry industry uses 

volume regulation which allows the 

industry to set free and restricted 

percentages. Free percentage cherries 

can be marketed by handlers to any 

outlet, while restricted percentage 

cherries are placed in a reserve 

inventory. The primary purpose of 

setting restricted percentages and 

placing cherries in a reserve inventory 

is to attempt to balance supply with 

demand. 

A related component of OSF under 

the order involves growers diverting 

cherries by leaving them unharvested in 

the orchard. Handlers can coordinate 

with their growers in large crop years by 

encouraging them to divert cherries 

from production. Handlers can then 

acquire the diversion certificates issued 

to growers and use them as credit 

toward their restriction or reserve 

obligations. 

The interaction of sections 930.10 and 

930.50 of the order establishes that 

grower in-orchard diversion is subject to 

the restriction percentage calculated for 

the year. Because of this, grower 

diversion certificates have less value 

when growers redeem them with 

handlers. Therefore, when a handler 

utilizes the grower diversion certificates 

received from growers, the certificates 

have a reduced value as a compliance 


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Federal Register / Vol. 76, No. 217 / Wednesday, November 9, 2011 / Proposed Rules 69677 

tool in meeting the restricted obligation. 

Because the certificates have a reduced 

value growers will deliver most of their 

crop to handlers instead of diverting 

cherries in the orchard in large crop 

years. 

The intent of these amendments is to 

remove the grower disincentive for inorchard diversion. If the method grower 

diversions are accounted for is changed, 

the grower diversion program is 

expected to help mitigate the negative 

effects of oversupply, by increasing the 

amount of cherries diverted from 

production. 

This action is expected to have a 

positive impact on growers with respect 

to the value of the grower diversion 

certificates. If the value of the 

certificates increases, grower diversion 

of cherries in large crop years is 

expected to increase. Increased grower 

diversion activity will help to reduce 

excess supplies, which in turn is 

expected to have a positive impact on 

grower returns. In addition, grower costs 

associated with harvesting and 

transporting cherries to handlers will be 

reduced as more cherries are diverted. 

This action is also expected to have a 

positive impact on handlers. As more 

fruit is diverted in the orchard, handlers 

will avoid the processing and storage 

costs that they would otherwise incur if 

growers harvested and delivered the 

fruit. Reducing the available supply of 

cherries is expected to mitigate the price 

depressing effects that oversupply 

typically has on the market, resulting in 

a positive effect for both growers and 

handlers. 

Testimony at the hearing supported 

that the amendments, which would 

encourage grower diversions, would not 

have a negative impact on small growers 

or handlers. The hearing record 

supported that these amendments 

would benefit small growers by 

providing better opportunities to divert 

cherries in the orchard in large crop 

years. Small handlers are not always 

able to ship to export markets or have 

as much new product activity as larger 

handlers. Small handlers would benefit 

from these amendments by providing 

diversion credits as a way to meet their 

restrictions. 

In accordance with the Paperwork 

Reduction Act of 1995 (44 U.S.C. 

Chapter 35), the order’s information 

collection requirements have been 

previously approved by the Office of 

Management and Budget (OMB) and 

assigned OMB No. 0581–0177 (Tart 

cherries Grown in the States of 

Michigan, New York, Pennsylvania, 

Oregon, Utah, Washington and 

Wisconsin). No changes in those 

requirements is necessary a result of this 

action. Should any change become 

necessary, it would be submitted to 

OMB for approval. 

As with all Federal marketing order 

programs, reports and forms are 

periodically reviewed to reduce 

information requirements and 

duplication by industry and public 

sector agencies. USDA has not 

identified any relevant Federal rules 

that duplicate, overlap or conflict with 

this proposed rule. All of these 

amendments are designed to enhance 

the administration and functioning of 

the marketing order to the benefit of the 

industry. 

The implementation of these 

requirements is not expected to have 

any additional costs on handler. In fact, 

these proposed changes are expected to 

reduce costs for both growers and 

handlers. 

In addition, the meetings regarding 

these proposals as well as the hearing 

dates were widely publicized 

throughout the existing tart cherry 

production area and all interested 

persons were invited to attend the 

meetings and the hearings and 

participate in CIAB deliberations on all 

issues. All CIAB meetings and the 

hearing were public forums and all 

entities, both large and small, were able 

to express views on these issues. The 

CIAB itself is composed of members 

representing handlers, producers and 

the public. Finally, interested persons 

are invited to submit information on the 

regulatory and informational impacts of 

this action on small businesses. 

AMS is committed to complying with 

the E-Government Act, to promote the 

use of the Internet and other 

information technologies to provide 

increased opportunities for citizen 

access to Government information and 

services, and for other purposes. 

Civil Justice Reform 

The amendments to Marketing Order 

930 proposed herein have been 

reviewed under Executive Order 12988, 

Civil Justice Reform. They are not 

intended to have retroactive effect. If 

adopted, the proposed amendments 

would not preempt any State or local 

laws, regulations, or policies, unless 

they present an irreconcilable conflict 

with this proposal. 

The Act provides that administrative 

proceedings must be exhausted before 

parties may file suit in court. Under 

section 608c(15)(A) of the Act, any 

handler subject to an order may file 

with USDA a petition stating that the 

order, any provision of the order, or any 

obligation imposed in connection with 

the order, is not in accordance with the 

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, USDA would rule on the 

petition. The Act provides that the 

district court of the United States in any 

district in which the handler is an 

inhabitant, or has his or her principal 

place of business, has jurisdiction to 

review USDA’s ruling on the petition, 

provided an action is filed no later than 

20 days after the date of the entry of the 

ruling. 

Rulings on Briefs of Interested Persons 

Briefs, proposed findings and 

conclusions, and the evidence in the 

record, were considered in making the 

findings and conclusions set forth in 

this recommended decision. To the 

extent that the suggested findings and 

conclusions filed by interested persons 

are inconsistent with the findings and 

conclusions of this recommended 

decision, the requests to make such 

findings or to reach such conclusions 

are denied. 

General Findings 

The findings hereinafter set forth are 

supplementary to the findings and 

determinations which were previously 

made in connection with the issuance of 

the order; and all said previous findings 

and determinations are hereby ratified 

and affirmed, except insofar as such 

findings and determinations may be in 

conflict with the findings and 

determinations set forth herein. 

1. The marketing order, as amended, 

and as hereby proposed to be further 

amended, and all of the terms and 

conditions thereof, would tend to 

effectuate the declared policy of the Act; 

2. The marketing order, as amended, 

and as hereby proposed to be further 

amended, regulates the handling of tart 

cherries grown in the production area in 

the same manner as, and is applicable 

only to, persons in the respective classes 

of commercial and industrial activity 

specified in the marketing order upon 

which a hearing has been held; 

3. The marketing order, as amended, 

and as hereby proposed to be further 

amended, is limited in its application to 

the smallest regional production area 

which is practicable, consistent with 

carrying out the declared policy of the 

Act, and the issuance of several orders 

applicable to subdivisions of the 

production area would not effectively 

carry out the declared policy of the Act; 

4. The marketing order, as amended, 

and as hereby proposed to be further 

amended, prescribes, insofar as 

practicable, such different terms 

applicable to different parts of the 

production area as are necessary to give 


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69678 Federal Register / Vol. 76, No. 217 / Wednesday, November 9, 2011 / Proposed Rules 

due recognition to the differences in the 

production and marketing of tart 

cherries grown in the production area; 

and 

5. All handling of tart cherries grown 

in the production area as defined in the 

marketing order, is in the current of 

interstate or foreign commerce or 

directly burdens, obstructs, or affects 

such commerce. 

A 15-day comment period is provided 

to allow interested persons to respond 

to this proposal. Fifteen days is deemed 

appropriate because these proposed 

changes have been widely publicized 

and implementation of the changes, if 

adopted, would be desirable to benefit 

the industry prior to the next crop year 

which begins on July 1, 2012. All 

written exceptions timely received will 

be considered and a grower referendum 

will be conducted before any of these 

proposals are implemented. 

List of Subjects in 7 CFR Part 930 

Marketing agreements, Reporting and 

recordkeeping requirements, Tart 

cherries. 

For the reasons set forth in the 

preamble, 7 CFR part 930 is proposed to 

be amended as follows: 

PART 930—TART CHERRIES GROWN 

IN THE STATES OF MICHIGAN, NEW 

YORK, PENNSYLVANIA, OREGON, 

UTAH, WASHINGTON, AND 

WISCONSIN 

1. The authority citation for 7 CFR 

part 930 continues to read as follows: 

Authority: 7 U.S.C. 601–674. 

2. Revise the introductory paragraph 

in § 930.10 to read as follows: 

§ 930.10 Handle. 

Handle means the process to brine, 

can, concentrate, freeze, dehydrate, pit, 

press or puree cherries, or in any other 

way convert cherries commercially into 

a processed product, or divert cherries 

pursuant to § 930.59, or to otherwise 

place cherries into the current of 

commerce within the production area or 

from the area to points outside thereof: 

Provided, That the term handle shall not 

include: 

* * * * * 

3. Revise paragraphs (d) and (e) of 

§ 930.50 to read as follows: 

§ 930.50 Marketing Policy. 

* * * * * 

(d) Final percentages. No later than 

September 15 of each crop year, the 

Board shall review the most current 

information available including, but not 

limited to, processed production and 

grower diversions of cherries during the 

current crop year. The Board shall make 

such adjustments as are necessary 

between free and restricted tonnage to 

achieve the optimum supply and 

recommend such final free market 

tonnage and restricted percentages to 

the Secretary and announce them in 

accordance with paragraph (h) of this 

section. The difference between any 

final free market tonnage percentage 

designated by the Secretary and 100 

percent shall be the final restricted 

percentage. With its recommendation, 

the Board shall report on its 

consideration of the factors in paragraph 

(e) of this section. 

(e) Factors. When computing 

preliminary and interim percentages, or 

determining final percentages for 

recommendation to the Secretary, the 

Board shall give consideration to the 

following factors: 

(1) The estimated total production of 

cherries; 

(2) The estimated size of the crop to 

be handled; 

(3) The expected general quality of 

such cherry production; 

(4) The expected carryover as of July 

1 of canned and frozen cherries and 

other cherry products; 

(5) The expected demand conditions 

for cherries in different market 

segments; 

(6) Supplies of competing 

commodities; 

(7) An analysis of economic factors 

having a bearing on the marketing of 

cherries; 

(8) The estimated tonnage held by 

handlers in primary or secondary 

inventory reserves; 

(9) Any estimated release of primary 

or secondary inventory reserve cherries 

during the crop year; and 

(10) The quantity of grower-diverted 

cherries during the crop year. 

* * * * * 

4. Revise paragraph (a) of § 930.58 to 

read as follows: 

§ 930.58 Grower Diversion privilege. 

(a) In general. Any grower may 

voluntarily elect to 

divert, in accordance with the 

provisions of this section, all or a 

portion of the cherries which otherwise, 

upon delivery to a handler, would 

become restricted percentage cherries. 

Upon such diversion and compliance 

with the provisions of this section, the 

Board shall issue to the diverting grower 

a grower diversion certificate which 

such grower may deliver to a handler. 

Any grower diversions completed in 

accordance with this section, but which 

are undertaken in districts subsequently 

exempted by the Board from volume 

regulation under § 930.52(d), shall 

qualify for diversion credit. 

* * * * * 

Dated: November 3, 2011. 

David R. Shipman, 

Acting Administrator, Agricultural Marketing 

Service. 

[FR Doc. 2011–29031 Filed 11–8–11; 8:45 am] 

BILLING CODE 3410–02–P 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 987 

[Doc. No. AMS–FV–10–0025; FV10–987–1 

PR] 

Domestic Dates Produced or Packed in 

Riverside County, CA; Proposed 

Amendments to Marketing Order 987 

and Referendum Order 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Proposed rule and referendum 

order. 

SUMMARY: This rule proposes seven 

amendments to Marketing Agreement 

and Order No. 987 (order), which 

regulates the handling of domestic dates 

produced or packed in Riverside 

County, California, and provides 

growers with the opportunity to vote in 

a referendum to determine if they favor 

the changes. Five amendments were 

proposed by the California Date 

Administrative Committee (CDAC or 

committee), which is responsible for 

local administration of the order. These 

proposed amendments are intended to 

improve administration of and 

compliance with the order and reflect 

current industry practices. 

In addition to the committee’s 

proposals, the Agricultural Marketing 

Service (AMS) proposes two 

amendments that would provide for a 

continuance referendum every six years, 

and would establish term limits of up to 

six consecutive years for committee 

members. These proposals would allow 

producers to indicate continued support 

for the order and provide all interested 

industry members the opportunity to 

serve on the committee. 

DATES: The referendum will be 

conducted from January 16, 2012, 

through February 3, 2012. The 

representative period for the purpose of 

the referendum is October 1, 2010, 

through September 30, 2011. 

FOR FURTHER INFORMATION CONTACT: 

Martin Engeler, Senior Marketing 

Specialist, Marketing Order and 

Agreement Division, Fruit and 


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