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

67375 

Vol. 70, No. 214 

Monday, November 7, 2005 

DEPARTMENT OF AGRICULTURE 

Animal and Plant Health Inspection 

Service 

7 CFR Part 319 

[Docket No. 05–003–2] 

Importation of Peppers From Certain 

Central American Countries; 

Correction 

AGENCY: Animal and Plant Health 

Inspection Service, USDA. 

ACTION: Proposed rule; correction 

SUMMARY: We are correcting two errors 

in a proposed rule that would amend 

the fruits and vegetables regulations to 

allow certain types of peppers grown in 

approved registered production sites in 

Costa Rica, El Salvador, Guatemala, 

Honduras, and Nicaragua to be imported 

into the United States without 

treatment. The proposed rule was 

published in the Federal Register on 

October 12, 2005 (70 FR 59283–59290, 

Docket No. 05–003–1). 

FOR FURTHER INFORMATION CONTACT: Ms. 

Donna L. West, Senior Import 

Specialist, Commodity Import Analysis 

and Operations, PPQ, APHIS, 4700 

River Road Unit 133, Riverdale, MD 

20737–1228; (301) 734–8758. 

SUPPLEMENTARY INFORMATION: On 

October 12, 2005, we published in the 

Federal Register (70 FR 59283–59290, 

Docket No. 05–003–1) a proposed rule 

that would amend the fruits and 

vegetables regulations in 7 CFR part 319 

to allow certain types of peppers grown 

in approved registered production sites 

in Costa Rica, El Salvador, Guatemala, 

Honduras, and Nicaragua to be imported 

into the United States without 

treatment. 

In the SUPPLEMENTARY INFORMATION

section of the proposed rule, we stated 

that Guatemala and Honduras contained 

areas that had been determined to be 

free of the Mediterranean fruit fly 

(Medfly) in accordance with § 319.56– 

2(f). This information was incorrect. The 

Department of Peten in Guatemala is 

currently the only Medfly-free area in 

the five Central American countries 

covered by the proposed rule. 

Also in the supplementary 

information of the proposed rule, under 

the heading ‘‘Paperwork Reduction 

Act,’’ we stated that the estimated total 

annual burden on respondents was 

2,299 hours. This number was incorrect. 

It should have read 2,999 hours. This 

document corrects these errors. 

Correction 

In FR Doc. 05–20388, published on 

October 12, 2005 70 FR 59283–59290, 

make the following corrections: On page 

59285, second column, fourth 

paragraph, in the second sentence, 

correct ‘‘Honduras and Guatemala are 

the only Central American countries 

covered by this proposal that contain 

such areas.’’ to read ‘‘Guatemala is the 

only Central American country covered 

by this proposal that contains such 

areas.’’ On page 59288, second column, 

eighth paragraph, in the first sentence, 

correct ‘‘2,299’’ to read ‘‘2,999’. 

Done in Washington, DC, this 1st day of 

November 2005. 

Elizabeth E. Gaston, 

Acting Administrator, Animal and Plant 

Health Inspection Service. 

[FR Doc. 05–22176 Filed 11–4–05; 8:45 am] 

BILLING CODE 3410–34–P 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 930 

[Docket No. FV05–930–1 PR] 

Tart Cherries Grown in the States of 

Michigan, et al.; Final Free and 

Restricted Percentages for the 2005– 

2006 Crop Year for Tart Cherries 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Proposed rule. 

SUMMARY: This rule invites comments 

on the establishment of final free and 

restricted percentages for the 2005–2006 

crop year. The percentages are 58 

percent free and 42 percent restricted 

and will establish the proportion of 

cherries from the 2005 crop which may 

be handled in commercial outlets. The 

percentages are intended to stabilize 

supplies and prices, and strengthen 

market conditions. The percentages 

were recommended by the Cherry 

Industry Administrative Board (Board), 

the body that locally administers the 

marketing order. The marketing order 

regulates the handling of tart cherries 

grown in the States of Michigan, New 

York, Pennsylvania, Oregon, Utah, 

Washington, and Wisconsin. 

DATES: Comments must be received by 

December 7, 2005. 

ADDRESSES: Interested persons are 

invited to submit written comments 

concerning this rule. Comments must be 

sent to the Docket Clerk, Marketing 

Order Administration Branch, Fruit and 

Vegetable Programs, AMS, USDA, 1400 

Independence Avenue, SW., Stop 0237, 

Washington, DC 20250–0237; Fax: (202) 

720–5698, or e-mail: 

moabdocket.clerk@usda.gov. Comments 

should reference the docket number and 

the date and page number of this issue 

of the Federal Register and will be 

available for public inspection in the 

Office of the Docket Clerk during regular 

business hours or can be viewed at: 

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

FOR FURTHER INFORMATION CONTACT: 

Patricia A. Petrella or Kenneth G. 

Johnson, Marketing Order 

Administration Branch, Fruit and 

Vegetable Programs, AMS, USDA, Unit 

155, 4700 River Road, Riverdale, MD 

20737; Telephone: (301) 734–5243, or 

Fax: (301) 734–5275; or George Kelhart, 

Technical Advisor, Marketing Order 

Administration Branch, Fruit and 

Vegetable Programs, AMS, USDA, 1400 

Independence Avenue, SW., STOP 

0237, Washington, DC 20250–0237; 

Telephone: (202) 720–2491, or Fax: 

(202) 720–8938. Small businesses may 

request information on complying with 

this regulation, or obtain a guide on 

complying with fruit, vegetable, and 

specialty crop marketing agreements 

and orders by contacting Jay Guerber, 

Marketing Order Administration 

Branch, Fruit and Vegetable Programs, 

AMS, USDA, 1400 Independence 

Avenue, SW., STOP 0237, Washington, 

DC 20250–0237; Telephone: (202) 720– 

2491, Fax: (202) 720–8938, or e-mail: 

Jay.Guerber@usda.gov. 

SUPPLEMENTARY INFORMATION: This 

proposed rule is issued under Marketing 

Agreement and Order No. 930 (7 CFR 

part 930), regulating the handling of tart 

cherries produced in the States of 

Michigan, New York, Pennsylvania, 

Oregon, Utah, Washington, and 

67376 Federal Register / Vol. 70, No. 214 / Monday, November 7, 2005 / Proposed Rules 

Wisconsin, hereinafter referred to as the 

‘‘order.’’ The order is effective under the 

Agricultural Marketing Agreement Act 

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

hereinafter referred to as the ‘‘Act.’’

The Department of Agriculture 

(USDA) is issuing this 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, final free 

and restricted percentages may be 

established for tart cherries handled by 

handlers during the crop year. This rule 

establishes final free and restricted 

percentages for tart cherries for the 

2005–2006 crop year, beginning July 1, 

2005, through June 30, 2006. This rule 

will not preempt any State or local laws, 

regulations, or policies, unless they 

present an irreconcilable conflict with 

this rule. 

The Act provides that administrative 

proceedings must be exhausted before 

parties may file suit in court. Under 

§ 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 exempt therefrom. Such handler 

is afforded the opportunity for a hearing 

on the petition. After the hearing, the 

Secretary would rule on the petition. 

The Act provides that the district court 

of the United States in any district in 

which the handler is an inhabitant, or 

has his or her principal place of 

business, has jurisdiction in equity to 

review the Secretary’s ruling on the 

petition, provided an action is filed not 

later than 20 days after the date of the 

entry of the ruling. 

The order prescribes procedures for 

computing an optimum supply and 

preliminary and final percentages that 

establish the amount of tart cherries that 

can be marketed throughout the season. 

The regulations apply to all handlers of 

tart cherries that are in the regulated 

districts. Tart cherries in the free 

percentage category may be shipped 

immediately to any market, while 

restricted percentage tart cherries must 

be held by handlers in a primary or 

secondary reserve, or be diverted in 

accordance with § 930.59 of the order 

and § 930.159 of the regulations, or used 

for exempt purposes (to obtain diversion 

credit) under § 930.62 of the order and 

§ 930.162 of the regulations. The 

regulated Districts for this season are: 

District one—Northern Michigan; 

District two—Central Michigan; District 

three—Southwest Michigan; District 

four—New York; District seven—Utah; 

District eight—Washington, and District 

nine—Wisconsin. Districts five and six 

(Oregon and Pennsylvania, respectively) 

will not be regulated for the 2005–2006 

season. 

The order prescribes under § 930.52 

that those districts to be regulated shall 

be those districts in which the average 

annual production of cherries over the 

prior three years has exceeded six 

million pounds. A district not meeting 

the six million-pound requirement shall 

not be regulated in such crop year. 

Because this requirement was not met in 

the Districts of Oregon and 

Pennsylvania, handlers in those districts 

will not be subject to volume regulation 

during the 2005–2006 crop year. 

Demand for tart cherries at the farm 

level is derived from the demand for tart 

cherry products at retail. Demand for 

tart cherries and tart cherry products 

tend to be relatively stable from year to 

year. The supply of tart cherries, by 

contrast, varies greatly from crop year to 

crop year. The magnitude of annual 

fluctuations in tart cherry supplies is 

one of the most pronounced for any 

agricultural commodity in the United 

States. In addition, because tart cherries 

are processed either into cans or frozen, 

they can be stored and carried over from 

crop year to crop year. This creates 

substantial coordination and marketing 

problems. The supply and demand for 

tart cherries is rarely balanced. The 

primary purpose of setting free and 

restricted percentages is to balance 

supply with demand and reduce large 

surpluses that may occur. 

Section 930.50(a) of the order 

prescribes procedures for computing an 

optimum supply for each crop year. The 

Board must meet on or about July 1 of 

each crop year, to review sales data, 

inventory data, current crop forecasts 

and market conditions. The optimum 

supply volume shall be calculated as 

100 percent of the average sales of the 

prior three years to which is added a 

desirable carryout inventory not to 

exceed 20 million pounds or such other 

amount as may be established with the 

approval of the Secretary. The optimum 

supply represents the desirable volume 

of tart cherries that should be available 

for sale in the coming crop year before 

new crop supplies are available for 

marketing. 

The order also provides that on or 

about July 1 of each crop year, the Board 

is required to establish preliminary free 

and restricted percentages. These 

percentages are computed by deducting 

the actual carryin inventory from the 

optimum supply figure (adjusted to raw 

product equivalent—the actual weight 

of cherries handled to process into 

cherry products) and subtracting that 

figure from the current year’s USDA 

crop forecast. If the resulting number is 

positive, this represents the estimated 

over-production, which would be the 

restricted percentage tonnage. The 

restricted percentage tonnage is then 

divided by the sum of the USDA crop 

forecast or by an average of such other 

crop estimates for the regulated districts 

to obtain percentages for the regulated 

districts. The Board is required to 

establish a preliminary restricted 

percentage equal to the quotient, 

rounded to the nearest whole number, 

with the complement being the 

preliminary free tonnage percentage. If 

the tonnage requirements for the year 

are more than the USDA crop forecast, 

the Board is required to establish a 

preliminary free tonnage percentage of 

100 percent and a preliminary restricted 

percentage of zero. The Board is 

required to announce the preliminary 

percentages in accordance with 

paragraph (h) of § 930.50. 

The Board met on June 23, 2005, and 

computed, for the 2005–2006 crop year, 

an optimum supply of 169 million 

pounds. The Board recommended that 

the desirable carryout figure be zero 

pounds. Desirable carryout is the 

amount of fruit required to be carried 

into the succeeding crop year and is set 

by the Board after considering market 

circumstances and needs. This figure 

can range from zero to a maximum of 20 

million pounds, or such other amount, 

as the Board with the approval of the 

Secretary, may establish. 

The Board also recommended an 

economic adjustment of 16 million 

pounds to be subtracted from the 

surplus to recognize the decrease in the 

optimum supply formula which 

includes total production amounts from 

the 2002 crop disaster year. The Board 

calculated preliminary free and 

restricted percentages as follows: The 

USDA estimate of the crop for the entire 

production area was 244 million 

pounds; a 28 million pound carryin 

(based on Board estimates) was 

subtracted from the optimum supply of 

169 million pounds which resulted in 

2005–2006 tonnage requirements 

(adjusted optimum supply) of 141 

million pounds. The carryin figure 

reflects the amount of cherries that 

handlers actually had in inventory at 

the beginning of the 2005–2006 crop 

year. Subtracting the adjusted optimum 

supply of 141 million pounds from the 

USDA crop estimate (244 million 

pounds) results in a surplus of 103 

million pounds of tart cherries. An 

economic adjustment of 16 million 

pounds is subtracted from the 103 

million pound surplus that leaves a total 

Federal Register / Vol. 70, No. 214 / Monday, November 7, 2005 / Proposed Rules 67377 

surplus of 87 million pounds. The 

surplus was divided by the production 

in the regulated districts (241 million 

pounds) and resulted in a restricted 

percentage of 36 percent for the 2005–

2006 crop year. The free percentage was 

64 percent (100 percent minus 36 

percent). The Board established these 

percentages and announced them to the 

industry as required by the order. 

The preliminary percentages were 

based on the USDA production estimate 

and the following supply and demand 

information available at the June 

meeting for the 2005–2006 crop year: 

Millions 

of pounds 

Optimum Supply Formula: 

(1) Average sales of the prior three years ....................................................................................................................................... 169 

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

(3) Optimum supply calculated by the Board at the June meeting ................................................................................................. 169 

Preliminary Percentages: 

(4) USDA crop estimate ................................................................................................................................................................... 244 

(5) Carryin held by handlers as of July 1, 2005 .............................................................................................................................. 28 

(6) Adjusted optimum supply for current crop year (Item 3 minus Item 5) ..................................................................................... 141 

(7) Surplus (restricted tonnage) (Item 4 minus Item 6) ................................................................................................................... 103 

(8) Economic adjustment .................................................................................................................................................................. 16 

(9) Surplus (Item 7 minus Item 8) .................................................................................................................................................... 87 

(10) USDA crop estimate for regulated districts .............................................................................................................................. 241 

Percentages 

Free Restricted 

(11) Preliminary percentages (Item 9 divided by Item 10 × 100 equals restricted percentage; 100 minus restricted percentage equals free percentage) ........................................................................................................ 64 36 

Between July 1 and September 15 of 

each crop year, the Board may modify 

the preliminary free and restricted 

percentages by announcing interim free 

and restricted percentages to adjust to 

the actual pack occurring in the 

industry. No modifications were made 

for this crop year. 

USDA establishes final free and 

restricted percentages through the 

informal rulemaking process. These 

percentages make available the tart 

cherries necessary to achieve the 

optimum supply figure calculated by 

the Board. The difference between any 

final free percentage designated by 

USDA and 100 percent is the final 

restricted percentage. The Board met on 

September 9, 2005, to recommend final 

free and restricted percentages. 

The actual production reported by the 

Board was 267 million pounds, which is 

a 23 million pound increase from the 

USDA crop estimate of 244 million 

pounds. 

A 29 million pound carryin (based on 

handler reports) was subtracted from the 

Board’s optimum supply of 169 million 

pounds, yielding an adjusted optimum 

supply for the current crop year of 140 

million pounds. The adjusted optimum 

supply of 140 million pounds was 

subtracted from the actual production of 

267 million pounds, which resulted in 

a 127 million pound surplus. An 

economic adjustment of 16 million 

pounds was subtracted from the surplus 

for a total of 111 million pounds of 

surplus tart cherries. The total surplus 

of 111 million pounds is divided by the 

264 million-pound volume of tart 

cherries produced in the regulated 

districts. This results in a 42 percent 

restricted percentage and a 

corresponding 58 percent free 

percentage for the regulated districts. 

The final percentages are based on the 

Board’s reported production figures and 

the following supply and demand 

information available in September for 

the 2005–2006 crop year: 

Millions 

of pounds 

Optimum Supply Formula: 

(1) Average sales of the prior three years ....................................................................................................................................... 169 

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

(3) Optimum supply calculated by the Board ................................................................................................................................... 169 

Final Percentages: 

(4) Board reported production .......................................................................................................................................................... 267 

(5) Carryin held by handlers as of July 1, 2005 .............................................................................................................................. 29 

(6) Adjusted optimum supply (Item 3 minus Item 5) ........................................................................................................................ 140 

(7) Surplus (restricted tonnage) (Item 4 minus Item 6) ................................................................................................................... 127 

(8) Economic adjustment .................................................................................................................................................................. 16 

(9) Total Surplus (Item 7 minus Item 8) ........................................................................................................................................... 111 

(10) Production in regulated districts ............................................................................................................................................... 264 

Percentages 

Free Restricted 

(11) Final Percentages (Item 9 divided by Item 10 x 100 equals restricted percentage; 100 minus restricted 

percentage equals free percentage) ..................................................................................................................... 58 42 

67378 Federal Register / Vol. 70, No. 214 / Monday, November 7, 2005 / Proposed Rules 

USDA’s ‘‘Guidelines for Fruit, 

Vegetable, and Specialty Crop 

Marketing Orders’’ specify that 110 

percent of recent years’ sales should be 

made available to primary markets each 

season before recommendations for 

volume regulation are approved. This 

goal would be met by this action which 

releases 100 percent of the optimum 

supply and the additional release of tart 

cherries provided under § 930.50(g). 

This release of additional tonnage, equal 

to 10 percent of the average sales of the 

prior three years sales, is made available 

to handlers each season. The Board 

recommended that such release should 

be made available to handlers the first 

week of December and the first week of 

May. Handlers can decide how much of 

the 10 percent release they would like 

to receive on the December and May 

release dates. Once released, such 

cherries are released for free use by such 

handler. Approximately 17 million 

pounds would be made available to 

handlers this season in accordance with 

USDA Guidelines. This release would 

be made available to every handler and 

released to such handler in proportion 

to the handler’s percentage of the total 

regulated crop handled. If a handler 

does not take his/her proportionate 

amount, such amount remains in the 

inventory reserve. 

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 issued thereunder, are 

unique in that they are brought about 

through group action of essentially 

small entities acting on their own 

behalf. Thus, both statutes have small 

entity orientation and compatibility. 

There are approximately 40 handlers 

of tart cherries who are subject to 

regulation under the tart cherry 

marketing order and approximately 900 

producers of tart cherries 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 $6,000,000, and small 

agricultural producers are defined as 

those having annual receipts of less than 

$750,000. A majority of the producers 

and handlers are considered small 

entities under SBA’s standards. 

The principal demand for tart cherries 

is in the form of processed products. 

Tart cherries are dried, frozen, canned, 

juiced, and pureed. During the period 

2000/2001 through 2004/2005, 

approximately 93.4 percent of the U.S. 

tart cherry crop, or 216.8 million 

pounds, was processed annually. Of the 

216.8 million pounds of tart cherries 

processed, 59 percent was frozen, 28 

percent was canned, and 13 percent was 

utilized for juice and other products. 

Based on National Agricultural 

Statistics Service data, acreage in the 

United States devoted to tart cherry 

production has been trending 

downward. Bearing acreage has 

declined from a high of 50,050 acres in 

1987/1988 to 36,950 acres in 2004/2005. 

This represents a 26 percent decrease in 

total bearing acres. Michigan leads the 

nation in tart cherry acreage with 73 

percent of the total and produces about 

70 percent of the U.S. tart cherry crop 

each year. 

The 2005/2006 crop is relatively large 

in size at 266.7 million pounds. This is 

the highest level of production since the 

2001/2002 crop. The largest crop 

occurred in 1995/1996 with production 

in the regulated districts reaching a 

record 395.6 million pounds. The price 

per pound received by tart cherry 

growers ranged from a low of 7.3 cents 

in 1987 to a high of 46.4 cents in 1991. 

These problems of wide supply and 

price fluctuations in the tart cherry 

industry are national in scope and 

impact. Growers testified during the 

order promulgation process that the 

prices they received often did not come 

close to covering the costs of 

production. 

The industry demonstrated a need for 

an order during the promulgation 

process of the marketing order because 

large variations in annual tart cherry 

supplies tend to lead to fluctuations in 

prices and disorderly marketing. As a 

result of these fluctuations in supply 

and price, growers realize less income. 

The industry chose a volume control 

marketing order to even out these wide 

variations in supply and improve 

returns to growers. During the 

promulgation process, proponents 

testified that small growers and 

processors would have the most to gain 

from implementation of a marketing 

order because many such growers and 

handlers had been going out of business 

due to low tart cherry prices. They also 

testified that, since an order would help 

increase grower returns, this should 

increase the buffer between business 

success and failure because small 

growers and handlers tend to be less 

capitalized than larger growers and 

handlers. 

Aggregate demand for tart cherries 

and tart cherry products tends to be 

relatively stable from year-to-year. 

Similarly, prices at the retail level show 

minimal variation. Consumer prices in 

grocery stores, and particularly in food 

service markets, largely do not reflect 

fluctuations in cherry supplies. Retail 

demand is assumed to be highly 

inelastic which indicates that price 

reductions do not result in large 

increases in the quantity demanded. 

Most tart cherries are sold to food 

service outlets and to consumers as pie 

filling; frozen cherries are sold as an 

ingredient to manufacturers of pies and 

cherry desserts. Juice and dried cherries 

are expanding market outlets for tart 

cherries. 

Demand for tart cherries at the farm 

level is derived from the demand for tart 

cherry products at retail. In general, the 

farm-level demand for a commodity 

consists of the demand at retail or food 

service outlets minus per-unit 

processing and distribution costs 

incurred in transforming the raw farm 

commodity into a product available to 

consumers. These costs comprise what 

is known as the ‘‘marketing margin.’’

The supply of tart cherries, by 

contrast, varies greatly. The magnitude 

of annual fluctuations in tart cherry 

supplies is one of the most pronounced 

for any agricultural commodity in the 

United States. In addition, since tart 

cherries are processed either into cans 

or frozen, they can be stored and carried 

over from year-to-year. This creates 

substantial coordination and marketing 

problems. The supply and demand for 

tart cherries is rarely in equilibrium. As 

a result, grower prices fluctuate widely, 

reflecting the large swings in annual 

supplies. 

In an effort to stabilize prices, the tart 

cherry industry uses the volume control 

mechanisms under the authority of the 

Federal marketing order. This authority 

allows the industry to set free and 

restricted percentages. These restricted 

percentages are only applied to states or 

districts with a 3-year average of 

production greater than six million 

pounds, and to states or districts in 

which the production is 50 percent or 

more of the previous 5-year processed 

production average. 

The primary purpose of setting 

restricted percentages is to bring supply 

and demand into balance. If the primary 

market is over-supplied with cherries, 

grower prices decline substantially. 

The tart cherry industry uses an 

industry-wide storage program as a 

supplemental coordinating mechanism 

Federal Register / Vol. 70, No. 214 / Monday, November 7, 2005 / Proposed Rules 67379 

under the Federal marketing order. The 

primary purpose of the storage program 

is to warehouse supplies in large crop 

years to supplement supplies in short 

crop years. The storage approach is 

feasible because the increase in price—

when moving from a large crop to a 

short crop year—more than offsets the 

costs for storing, interest, and handling 

stored cherries. 

The price that growers’ receive for 

their crop is largely determined by the 

total production volume and carryin 

inventories. The Federal marketing 

order permits the industry to exercise 

supply control provisions, which allow 

for the establishment of free and 

restricted percentages for the primary 

market, and a storage program. The 

establishment of restricted percentages 

impacts the production to be marketed 

in the primary market, while the storage 

program has an impact on the volume 

of unsold inventories. 

The volume control mechanism used 

by the cherry industry results in 

decreased shipments to primary 

markets. Without volume control the 

primary markets would likely be oversupplied, resulting in lower grower 

prices. 

To assess the impact that volume 

control has on the prices growers 

receive for their product, an 

econometric model has been developed. 

The econometric model provides a way 

to see what impacts volume control may 

have on grower prices. The three 

districts in Michigan, along with the 

districts in Utah, New York, 

Washington, and Wisconsin are the 

restricted areas for this crop year and 

their combined total production is 264 

million pounds. A 42 percent restriction 

means that 185 million pounds are 

available to be shipped to primary 

markets. 

In addition, USDA requires a 10 

percent release from reserves as a 

market growth factor. This results in an 

additional 17 million pounds being 

available for the primary market. A total 

of 202 million pounds are available for 

the primary market sales. 

The econometric model is used to 

estimate grower prices with and without 

regulation. With volume controls, 

grower prices are estimated to be 

approximately $0.08 higher than 

without volume controls. 

The use of volume controls is 

estimated to have a positive impact on 

grower’s total revenues. With 

restriction, revenues are estimated to be 

$3.9 million higher than without 

restrictions. The without restrictions 

scenario assumes that all tart cherries 

produced would be delivered to 

processors for payments. 

It is concluded that the 42 percent 

restricted percentage would not unduly 

burden producers, particularly smaller 

growers. The 42 percent restriction 

would be applied to the growers in 

Michigan, New York, Utah, Washington, 

and Wisconsin. The growers and 

handlers in the other two states covered 

under the marketing order will benefit 

from the market stability anticipated to 

result from this proposed action. 

Grower prices were reported by NASS 

at $0.323 per pound for the 2004–2005 

crop year and $0.353 for the 2003–2004 

crop year. While grower prices have not 

been established in the 2005–2006 crop 

year, some processors have reported that 

growers have received an initial 

payment somewhere in the low 20 cent 

per pound range for free production. 

There will likely not be any additional 

payments by processors because of the 

larger than anticipated crop and the 

amount of surplus. The final grower 

price will likely be less than $0.20 per 

pound for combined free and restricted 

production. This estimated price is less 

than the cost of production which is 

calculated to be $0.31 per pound at a 

yield of 7,200 pounds per acre. These 

cost estimates are based on a 2003 cost 

of production study by the Michigan 

State University Extension Service. 

Without the use of volume controls, 

the industry could be expected to start 

to build large amounts of unwanted 

inventories. These inventories would 

have a depressing effect on grower 

prices. The econometric model shows 

for every 1 million-pound increase in 

carryin inventories, a decrease in grower 

prices of $0.0033 per pound occurs. The 

use of volume controls allows the 

industry to supply the primary markets 

while avoiding the disastrous results of 

over-supplying these markets. In 

addition, through volume control, the 

industry has an additional supply of 

cherries that can be used to develop 

secondary markets such as exports and 

the development of new products. The 

use of reserve cherries in the production 

shortened 2002–2003 crop year proved 

to be very useful and beneficial to 

growers and packers. 

In discussing the possibility of 

marketing percentages for the 2005–

2006 crop year, the Board considered 

the following factors contained in the 

marketing policy: (1) The estimated total 

production of tart cherries; (2) the 

estimated size of the crop to be handled; 

(3) the expected general quality of such 

cherry production; (4) the expected 

carryover as of July 1 of canned and 

frozen cherries and other cherry 

products; (5) the expected demand 

conditions for cherries in different 

market segments; (6) supplies of 

competing commodities; (7) an analysis 

of economic factors having a bearing on 

the marketing of cherries; (8) the 

estimated tonnage held by handlers in 

primary or secondary inventory 

reserves; and (9) any estimated release 

of primary or secondary inventory 

reserve cherries during the crop year. 

The Board’s review of the factors 

resulted in the computation and 

announcement in September 2005 of the 

free and restricted percentages proposed 

to be established by this rule (58 percent 

free and 42 percent restricted). 

One alternative to this action would 

be not to have volume regulation this 

season. Board members stated that no 

volume regulation would be detrimental 

to the tart cherry industry due to the 

size of the 2005–2006 crop. Returns to 

growers would not cover their costs of 

production for this season which might 

cause some to go out of business. 

As mentioned earlier, USDA’s 

‘‘Guidelines for Fruit, Vegetable, and 

Specialty Crop Marketing Orders’’

specify that 110 percent of recent years’

sales should be made available to 

primary markets each season before 

recommendations for volume regulation 

are approved. The quantity available 

under this rule is 110 percent of the 

quantity shipped in the prior three 

years. 

The free and restricted percentages 

established by this rule release the 

optimum supply and apply uniformly to 

all regulated handlers in the industry, 

regardless of size. There are no known 

additional costs incurred by small 

handlers that are not incurred by large 

handlers. The stabilizing effects of the 

percentages impact all handlers 

positively by helping them maintain 

and expand markets, despite seasonal 

supply fluctuations. Likewise, price 

stability positively impacts all 

producers by allowing them to better 

anticipate the revenues their tart 

cherries will generate. 

USDA has not identified any relevant 

Federal rules that duplicate, overlap, or 

conflict with this regulation. 

While the benefits resulting from this 

rulemaking are difficult to quantify, the 

stabilizing effects of the volume 

regulations impact both small and large 

handlers positively by helping them 

maintain markets even though tart 

cherry supplies fluctuate widely from 

season to season. 

In compliance with Office of 

Management and Budget (OMB) 

regulations (5 CFR part 1320) which 

implement the Paperwork Reduction 

Act of 1995 (Pub. L. 104–13), the 

information collection and 

recordkeeping requirements under the 

tart cherry marketing order have been 

67380 Federal Register / Vol. 70, No. 214 / Monday, November 7, 2005 / Proposed Rules 

previously approved by OMB and 

assigned OMB Number 0581–0177. 

Reporting and recordkeeping burdens 

are necessary for compliance purposes 

and for developing statistical data for 

maintenance of the program. The forms 

require information which is readily 

available from handler records and 

which can be provided without data 

processing equipment or trained 

statistical staff. As with other, similar 

marketing order programs, reports and 

forms are periodically studied to reduce 

or eliminate duplicate information 

collection burdens by industry and 

public sector agencies. This rule does 

not change those requirements. 

AMS is committed to compliance 

with the Government Paperwork 

Elimination Act (GPEA), which requires 

Government agencies in general to 

provide the public the option of 

submitting information or transacting 

business electronically to the maximum 

extent possible. 

A 30-day comment period is provided 

to allow interested persons to respond 

to this proposal. Thirty days is deemed 

appropriate because this rule would 

need to be in place as soon as possible 

since handlers are already shipping tart 

cherries from the 2005–2006 crop. 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 

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. Section 930.254 is added to read as 

follows: 

Note: This section will not appear in the 

annual Code of Federal Regulations. 

§ 930.254 Final free and restricted 

percentages for the 2005–2006 crop year. 

The final percentages for tart cherries 

handled by handlers during the crop 

year beginning on July 1, 2005, which 

shall be free and restricted, respectively, 

are designated as follows: Free 

percentage, 58 percent and restricted 

percentage, 42 percent. 

Dated: November 2, 2005. 

Lloyd C. Day, 

Administrator, Agricultural Marketing 

Service. 

[FR Doc. 05–22115 Filed 11–4–05; 8:45 am] 

BILLING CODE 3410–02–P 

NUCLEAR REGULATORY 

COMMISSION 

10 CFR Part 73 

RIN 3150–AH60 

Design Basis Threat 

AGENCY: Nuclear Regulatory 

Commission. 

ACTION: Proposed rule. 

SUMMARY: The Nuclear Regulatory 

Commission (NRC) is proposing to 

amend its regulations that govern the 

requirements pertaining to design basis 

threat (DBT). The proposed rule would 

amend the Commission’s regulations to, 

among other things, make generically 

applicable the security requirements 

previously imposed by the 

Commission’s April 29, 2003 DBT 

orders, which applied to existing 

licensees, and redefine the level of 

security requirements necessary to 

ensure that the public health and safety 

and common defense and security are 

adequately protected. The proposed rule 

would revise the DBT requirements for 

radiological sabotage (applied to power 

reactors and Category I fuel cycle 

facilities), and theft or diversion of NRClicensed Strategic Special Nuclear 

Material (SSNM) (applied to Category I 

fuel cycle facilities). The NRC has 

developed draft Regulatory Guides 

(RGs) that provide guidance to licensees 

concerning the DBT for radiological 

sabotage and theft and diversion. These 

draft RGs have limited distribution 

because they contain either safeguards 

or classified information. The specific 

details related to the threat, which 

contain both safeguards information 

(SGI) and classified information, are 

contained in adversary characteristics 

documents (ACDs) that are not publicly 

available. These documents include 

specific details of the attributes of the 

threat consistent with the requirements 

imposed in the April 29, 2003, DBT 

orders. Additionally, a Petition for 

Rulemaking (PRM–73–12), filed by the 

Committee to Bridge the Gap, was 

considered as part of this proposed 

rulemaking; the NRC’s disposition of 

this petition is contained in this 

document. 

DATES: Submit comments by January 23, 

2006. Comments received after this date 

will be considered if it is practical to do 

so, but the Commission is able to ensure 

consideration only for comments 

received on or before this date. 

ADDRESSES: You may submit comments 

by any one of the following methods. 

Please include the following number 

RIN 3150–AH60 in the subject line of 

your comments. Comments on 

rulemakings submitted in writing or in 

electronic form will be made available 

for public inspection. Because your 

comments will not be edited to remove 

any identifying or contact information, 

the NRC cautions you against including 

any information in your submission that 

you do not want to be publicly 

disclosed. 

Mail comments to: Secretary, U.S. 

Nuclear Regulatory Commission, 

Washington, DC 20555–0001, ATTN: 

Rulemakings and Adjudications Staff. 

E-mail comments to: SECY@nrc.gov. If 

you do not receive a reply e-mail 

confirming that we have received your 

comments, contact us directly at (301) 

415–1966. You may also submit 

comments via the NRC’s rulemaking 

Web site at http://ruleforum.llnl.gov. 

Address questions about our rulemaking 

Web site to Carol Gallagher (301) 415–

5905; e-mail cag@nrc.gov. Comments 

can also be submitted via the Federal 

eRulemaking Portal http:// 

www.regulations.gov. 

Hand deliver comments to: 11555 

Rockville Pike, Rockville, Maryland 

20852, between 7:30 am and 4:15 pm 

Federal workdays. (Telephone (301) 

415–1966). 

Fax comments to: Secretary, U.S. 

Nuclear Regulatory Commission at (301) 

415–1101. 

You may submit comments on the 

information collections by the methods 

indicated in the Paperwork Reduction 

Act Statement. 

Publicly available documents related 

to this rulemaking may be viewed 

electronically on the public computers 

located at the NRC’s Public Document 

Room (PDR), O1 F21, One White Flint 

North, 11555 Rockville Pike, Rockville, 

Maryland. The PDR reproduction 

contractor will copy documents for a 

fee. Selected documents, including 

comments, may be viewed and 

downloaded electronically via the NRC 

rulemaking Web site at http:// 

ruleforum.llnl.gov. 

Publicly available documents created 

or received at the NRC after November 

1, 1999, are available electronically at 

the NRC’s Electronic Reading Room at 

http://www.nrc.gov/reading-rm/ 

adams.html. From this site, the public 

can gain entry into the NRC’s 

Agencywide Document Access and