Tart Cherries Grown in the States of Michigan, New York, Pennsylvania, Oregon, Utah, Washington, and Wisconsin; Order Amending Marketing Order No. 930, 33673-33678 [2010-14286]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 75, Number 114 (Tuesday, June 15, 2010)]
[Rules and Regulations]
[Pages 33673-33678]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-14286]



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Federal Register / Vol. 75, No. 114 / Tuesday, June 15, 2010 / Rules 
and Regulations

[[Page 33673]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 930

[Doc. No. AO-370-A8; AMS-FV-06-0213; FV07-930-2]


Tart Cherries Grown in the States of Michigan, New York, 
Pennsylvania, Oregon, Utah, Washington, and Wisconsin; Order Amending 
Marketing Order No. 930

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This final rule amends Marketing Order No. 930 (order), which 
regulates the handling of tart cherries grown in Michigan, New York, 
Pennsylvania, Oregon, Utah, Washington, and Wisconsin. The amendments 
were proposed by the Cherry Industry Administrative Board (Board), 
which is responsible for local administration of the order. These 
amendments will: Authorize changing the primary reserve capacity 
associated with the volume control provisions of the order; authorize 
establishment of a minimum inventory level at which all remaining 
product held in reserves would be released to handlers for use as free 
tonnage; establish an age limitation on product placed into reserves; 
revise the nomination and election process for handler members on the 
Board; revise Board membership affiliation requirements; and update 
order language to more accurately reflect grower and handler 
participation in the nomination and election process in districts with 
only one Board representative.
    The amendments are designed to provide flexibility in administering 
the volume control provisions of the order and to update Board 
nomination, election, and membership requirements. The amendments are 
intended to improve the operation and administration of the order.

DATES: This rule is effective July 15, 2010.

FOR FURTHER INFORMATION CONTACT: Martin Engeler, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 2202 
Monterey Street, Suite 102-B, Fresno, California 93721; telephone: 
(559) 487-5110, Fax: (559) 487-5906, or e-mail: 
Martin.Engeler@ams.usda.gov; or Kathy Finn, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 
Independence Avenue, SW., Stop 0237, Washington, DC 20250-0237; 
telephone: (202) 720-9921, fax: (202) 720-8938, or e-mail: 
Kathy.Finn@ams.usda.gov.
    Small businesses may request information on this proceeding by 
contacting Antoinette Carter, 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, E-mail: Antoinette.Carter@ams.usda.gov.

SUPPLEMENTARY INFORMATION: Prior documents in this proceeding: Notice 
of Hearing issued on February 5, 2007, and published in the February 7, 
2007, issue of the Federal Register (72 FR 5646), a Recommended 
Decision issued on May 7, 2009 and published in the May 12, 2009, issue 
of the Federal Register (74 FR 22112), and a Secretary's Decision and 
Referendum Order issued on January 6, 2010, and published in the 
January 13, 2010, issue of the Federal Register (75 FR 1724).
    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

    This final rule was formulated on the record of a public hearing 
held on February 21 and 22, 2007, in Grand Rapids, Michigan, and March 
1 and 2, 2007, in Provo, Utah. Notice of this hearing was issued on 
February 5, 2007, and published in the February 7, 2007, issue of the 
Federal Register (72 FR 5646). The hearing was held to consider 
proposed amendments to the order.
    The hearing was held 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 Notice of Hearing contained several amendment proposals 
submitted by the Board. Upon the basis of evidence introduced at the 
hearing and the record thereof, the Administrator of AMS on May 7, 
2009, filed with the Hearing Clerk, U.S. Department of Agriculture, a 
Recommended Decision and Opportunity to File Written Exceptions 
thereto. This Recommended Decision was published in the May 12, 2009, 
issue of the Federal Register (74 FR 22112). Six exceptions were filed 
during the exception period.
    A Secretary's Decision and Referendum Order was issued on January 
6, 2010, and published in the January 13, 2010, issue of the Federal 
Register (75 FR 1724). This document directed that a referendum among 
tart cherry growers and processors be conducted during the period 
February 1, 2010, through February 13, 2010 to determine whether they 
favor the proposed amendments to the order. To become effective, the 
amendments had to be approved by at least two-thirds of the growers 
voting in the referendum or two-thirds of the production represented by 
such growers. In addition, processors who had frozen or canned at least 
fifty percent of the volume of tart cherries had to vote in favor of 
the amendments for them to become effective. All of the proposed 
amendments were approved by growers and processors. The amendments 
included in this final order will:
    1. Amend Sec.  930.50 of the order to authorize changing the 
primary reserve capacity associated with the volume control provisions 
of the order.
    2. Amend Sec.  930.54 of the order to authorize establishment of a 
minimum inventory level at which all remaining product held in reserves 
would be released to handlers for use as free tonnage.
    3. Amend Sec.  930.55 to establish an age limitation on product 
placed into reserves.
    4. Amend Sec.  930.23 to revise the nomination and election process 
for handler members on the Board, including revisions to conform this 
section to amendment of Sec.  930.20 regarding membership affiliation 
requirements.

[[Page 33674]]

    5. Amend Sec.  930.20 to revise Board membership affiliation 
requirements.
    6. Amend Sec.  930.23 to update order language to more accurately 
reflect grower and handler participation in the nomination and election 
process in Districts with only one Board representative.
    In addition to these amendments to the order, AMS proposed to make 
any such additional changes as may be necessary to the order to conform 
to any amendments that may be adopted. To the extent necessary, 
conforming changes have been made to the amendments.
    An amended marketing agreement was subsequently mailed to all tart 
cherry handlers in the production area for their approval. The 
marketing agreement was not approved by handlers representing more than 
50 percent of the volume of tart cherries handled by all handlers 
during the representative period of July 1, 2008, through June 30, 
2009.

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 final 
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.
    Small agricultural producers have been defined by the Small 
Business Administration (SBA) (13 CFR 121.201) as those having annual 
receipts of less than $750,000. Small agricultural service firms, which 
include handlers regulated under the order, are defined as those with 
annual receipts of less than $7,000,000.
    There are approximately 40 handlers and processors of tart cherries 
subject to regulation under the order and approximately 600 producers 
of tart cherries in the regulated area. A majority of the producers, 
processors, and handlers are considered small entities according to the 
SBA's definition.
    The geographic region regulated under the order covers 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 
hearing, bearing acreage in 1987-88 totaled 50,050 acres; by 2006-2007 
it had declined to 37,200 acres. Michigan accounts for 74 percent of 
total U.S. bearing acreage with 27,700 bearing acres. Utah is second, 
with a reported 2,800 acres, or approximately eight percent of the 
total. The remaining states' acreage ranges from 700 to 2,000 acres.
    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 supplies presents a marketing challenge 
for the tart cherry industry because demand for the product is 
relatively static. In addition, the demand for tart cherries is 
inelastic, which means a change in the supply has a proportionately 
larger change in the price level.
    Authorities under the order include volume regulation, promotion 
and research, and grade and quality standards. Volume regulation is 
used under the order to augment supplies during short supply years with 
product placed in reserves during large supply years. This practice is 
intended to reduce the annual fluctuations in supplies and 
corresponding fluctuations in prices.
    The Board is comprised of representatives from all producing areas 
based on the volume of cherries produced in those areas. The Board 
consists of a mix of handler and grower members, and a member that 
represents the public. Board meetings where regulatory recommendations 
and other decisions are made are open to the public. All members are 
able to participate in Board deliberations, and each Board member has 
an equal vote. Others in attendance at meetings are also allowed to 
express their views.
    The Board appointed a subcommittee to consider amendments to the 
marketing order. The subcommittee met several times for this purpose, 
and ultimately recommended several amendments to the order. The Board 
subsequently requested that USDA conduct a hearing to consider the 
proposed amendments. The views of all participants were considered 
throughout this process.
    In addition, the hearing to receive evidence on the proposed 
amendments was open to the public and all interested parties were 
invited and encouraged to participate and express their views.
    The proposed amendments are intended to provide additional 
flexibility in administering the volume control provisions of the 
order, and to update Board nomination, election, and membership 
requirements. The amendments are intended to improve the operation and 
administration of the order. Record evidence indicates the proposals 
are intended to benefit all producers and handlers under the order, 
regardless of size.

Amendment 1--Adding Authority To Change the Primary Reserve Capacity

    This amendment revises Sec.  930.50 of the order to authorize 
changing the primary reserve capacity associated with the volume 
control provisions of the order through informal rulemaking. Prior to 
this amendment, changing the reserve capacity required amendment of the 
order through the formal rulemaking process.
    The order establishes a fixed quantity of 50 million pounds of tart 
cherries and tart cherry products that can be held in the primary 
reserve. Any reserve product in excess of the 50-million-pound 
limitation must be placed in the secondary reserve.
    Free tonnage product can be sold to any market outlet, but most 
shipments are sold domestically, which is considered the primary 
market. Reserve product can be used only in specific outlets which are 
considered secondary markets. These secondary markets include 
development of export markets, new product development, new markets, 
and government purchases.
    When the order was promulgated, a 50-million-pound limitation was 
placed on the capacity of the primary reserve. Proponents of the order 
proposed a limitation on the quantity of product that could be placed 
into the primary reserve. That limitation was incorporated into the 
order, and could only be changed through the formal rulemaking process.
    Economic data presented when the order was promulgated indicated 
that a reserve program could benefit the industry by managing 
fluctuating supplies. Witnesses at the February and March 2007 hearing 
indicated the order has been successful in this regard. However, the 
record indicated that the order could be more flexible in allowing 
modifications to the 50-million-pound limitation should conditions 
warrant such a change in the future.
    If the reserve capacity is changed, costs associated with storing 
product in reserves could also change. In addition, to the extent such 
a change could affect supplies in the marketplace, returns to

[[Page 33675]]

both growers and handlers could also be affected.
    Any Board recommendation to change the reserve capacity will be 
required to be implemented through the informal rulemaking process. As 
part of the informal rulemaking process, USDA expects any Board 
recommendation to include an analysis of the pertinent factors and 
issues, including the impact of a proposed regulation on producers and 
handlers. During that process, the Board will recommend a change to 
USDA, and only if the recommendation is accompanied by adequate 
justification will USDA proceed with the change.

Amendment 2--Adding Authority To Establish a Minimum Inventory Level at 
Which Reserves Will Be Released

    This amendment revises Sec.  930.54 of the order to provide the 
Board with the authority to recommend establishment of a minimum 
inventory level at which reserves will be released and made available 
to handlers as free tonnage. Establishment of such a minimum inventory 
level will allow the Board to clear out the primary reserve and 
subsequently the secondary reserve when a specified minimum inventory 
level of tart cherries is reached. The specified minimum level would be 
established through the informal rulemaking process.
    Under the order, handlers cannot access the secondary reserve until 
the primary reserve is empty. Thus, one handler who has not completely 
disposed of or otherwise fulfilled its reserve obligation can prevent 
access to the secondary reserve by other handlers.
    This amendment will allow the Board to recommend informal 
rulemaking to establish a minimum inventory level at which it can clear 
out the primary reserve in order to provide the industry access to 
secondary reserve inventories.
    If such a minimum inventory level is established, costs to both 
handlers and the Board could be reduced. Handlers incur costs in 
maintaining reserves. According to the record, these costs include the 
cost of storage, which can be in the range of $.01 per pound per month. 
Handlers also incur costs associated with tracking their own inventory 
levels. Witnesses stated that when inventory levels reach a minimal 
amount the costs of tracking inventory outweigh the benefit from 
carrying inventory in the primary reserve.
    A significant portion of the Board staff's time is directed at 
tracking reserve inventory maintained at handlers' facilities. Hearing 
witnesses testified that while it is difficult to quantify the exact 
value of the Board staff's time to conduct these activities, the time 
could be better spent on other industry issues, and it is unnecessary 
to track minimal levels of inventory.
    The establishment of a minimum inventory level at which reserves 
will be released could have a positive impact on the market. As 
inventories are released from the reserves, products could be sold, 
generating revenue for the industry.
    If the authority provided by this amendment is utilized, it is 
expected to reduce costs to handlers and the Board, thus having a 
positive economic impact.

Amendment 3--Establishing an Age Limitation on Products Placed Into 
Reserves

    This amendment revises Sec.  930.55 to require that products placed 
in reserves must have been produced in the current or immediately 
preceding two crop years. This amendment will allow the Board to place 
an age limit on products carried in the reserve. The purpose of the 
amendment is to help ensure that products of saleable quality are 
maintained in reserve inventories.
    Witness supported the amendment by stating that it will add 
credibility to product quality for all products carried in the reserve. 
Prior to this amendment, handlers could carry products they have no 
intention of selling just to meet their reserve obligation. This 
amendment will require handlers to rotate product in their reserve 
inventory, thus preventing them from maintaining the same product in 
the reserve year after year. Product held in inventory tends to 
deteriorate over time. This amendment will help ensure that when 
reserve product is ultimately released, it is in saleable condition and 
can satisfy the market's needs. Assuring product is available to 
satisfy the market helps to foster long term market stability.
    In terms of costs, handlers may experience some minimal costs 
associated with periodically rotating product through their reserve 
inventory. It is difficult to estimate such costs because they will 
vary depending upon each handler's operation. To the extent costs may 
increase, they will be proportionate to each handler's share of the 
entire industry's reserve inventory. Each handler's reserve inventory 
obligation is based on the handler's share of the total crop handled. 
Thus, small handlers will not be disproportionately burdened.
    It is anticipated that the benefits of providing a good quality 
product in reserves to ultimately supply markets when needed will 
outweigh any costs associated with implementation of this amendment.

Amendment 4--Revision of Nomination and Election Process for Handler 
Members on the Board

    This amendment relates to nomination and election of Board members 
under Sec.  930.23 of the order. It will require a handler to receive 
support from handlers that handled at least five percent of the average 
production of tart cherries in the applicable district in order to be a 
candidate and to be elected by the industry and recommended to the 
Secretary for Board membership. Prior to this amendment, there was no 
accounting for handler volume in the nomination and balloting process. 
Each handler was entitled to one equal vote. This amendment will 
continue to allow each handler to have one vote, but will also require 
handler candidates to be supported by handlers representing at least 
five percent of the average production in the applicable district to be 
eligible to run for a Board position and to be elected by the industry 
for recommendation to the Secretary. This will help to ensure that 
handler members on the Board represent the interests of handlers in 
their district that account for at least a minimal percentage of the 
volume in the district. The amendment proposed by the Board was 
modified by AMS. The amendment as modified by AMS will not apply the 
five percent support requirements to candidates whose potential 
election could prevent a sales constituency conflict from occurring, as 
discussed under amendment number five. The modification will help to 
ensure that all qualified handlers can participate in the election 
process.
    This amendment is not anticipated to have a significant economic 
impact on small businesses. It only affects the nomination and election 
criteria for membership on the Board by adding volume as an element of 
support to help ensure that Board membership reflects the interests of 
its constituency. All qualified handlers, regardless of size, will 
continue to be able to participate in the nomination and election 
process. The process will continue to allow for both small and large 
handlers to be represented on the Board.

Amendment 5--Revision of Board Membership Affiliation Requirements

    This amendment revises Sec.  930.20 to allow more than one Board 
member to be affiliated with the same sales constituency from the same 
district, if such a conflict cannot be avoided.
    Prior to this amendment, Sec.  930.20 did not allow more than one 
Board member to be affiliated with the same sales constituency from the 
same district

[[Page 33676]]

under any circumstances. The purpose of that provision is to prevent 
any one sales constituency from having a controlling influence on Board 
issues and actions. However, a situation occurred in District 7, Utah, 
where this particular provision of the order did not allow the district 
from having two representatives on the Board, as it was entitled to 
under section 930.20(b) of the order. In that situation, the only 
candidates willing to serve on the Board from Utah were affiliated with 
the same sales constituency. Thus Utah was only able, under the 
marketing order rules, to seat one of the two Board representatives it 
was entitled to.
    This amendment is designed to prevent a similar problem from 
occurring in the future by allowing more than one Board member 
affiliated with the same sales constituency to represent a district, if 
such a sales constituency conflict cannot be avoided. The hearing 
record is clear that the sales constituency provision should not 
prevent a district from having its allocated number of seats on the 
Board if there are eligible candidates willing to serve on the Board.
    This amendment is not expected to have an economic impact on 
growers or handlers. It relates to representation on the Board, and is 
intended to help ensure each area covered under the order has the 
opportunity to achieve its allocated representation on the Board.

Amendment 6--Update Order Language To Accurately Reflect Grower and 
Handler Participation in the Nomination and Election Process in 
Districts With Only One Board Representative

    This amendment to Sec.  930.23 revises and updates order language 
to more accurately reflect grower and handler participation in the 
nomination and election process in districts with only one Board 
representative.
    Sections 930.23(b)(5) and (c)(4) previously referenced Districts 5, 
6, 8 and 9 in regard to the nomination and election process. Those were 
the districts entitled to one Board seat when the order was initially 
promulgated. However, districts that are entitled to one Board seat 
have changed over time due to shifts in production. Amending Sec.  
930.23(b)(5) and (c)(4) by removing the specific references to 
Districts 5, 6, 8 and 9 and replacing it with generic language to cover 
any district that is entitled to only one Board representative based on 
the representative calculation established in Sec.  930.20 will update 
order language to better reflect the constantly changing tart cherry 
industry.
    This amendment updates order language to remove incorrect 
references to district representation in the event production shifts 
occur. It has no economic impact on handlers, growers, or any other 
entities.
    Interested persons were invited to present evidence at the hearing 
on the probable regulatory and informational impacts of the proposed 
amendments to the order on small entities. The record evidence is that 
some of the proposed amendments may result in some minimal cost 
increases while others will result in cost decreases. To the extent 
there are any cost increases, the benefits of the proposed changes are 
expected to outweigh the costs. In addition, changes in costs as a 
result of these amendments would be proportional to the size of 
businesses involved and would not unduly or disproportionately impact 
small entities. The informational impact of these amendments is 
addressed in the Paperwork Reduction Act discussion that follows.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap or conflict with this rule. These amendments are intended to 
improve the operation and administration of the order to the benefit of 
the tart cherry industry.

Paperwork Reduction Act

    Information collection requirements for part 930 are currently 
approved by the Office of Management and Budget (OMB), under OMB Number 
0581-0177, Tart Cherries Grown in the States of Michigan, New York, 
Pennsylvania, Oregon, Utah, Washington, and Wisconsin. Implementation 
of these amendments will not trigger any changes to those requirements. 
It is possible that a change to the reporting requirements may occur in 
the future if the Board believes it would be necessary to assist in 
program compliance efforts. Should any such changes become necessary in 
the future, they 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.
    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

    These amendments to Marketing Order 930 have been reviewed under 
Executive Order 12988, Civil Justice Reform. They are not intended to 
have retroactive effect.
    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 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.

Order Amending the Order Regulating the Handling of Tart Cherries Grown 
in Michigan, New York, Pennsylvania, Oregon, Utah, Washington, and 
Wisconsin

Findings and Determinations

    The findings and determinations hereinafter set forth are 
supplementary to the findings and determinations that were previously 
made in connection with the issuance of the marketing agreement and 
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.
(a) Findings and Determinations Upon the Basis of the Hearing Record
    Pursuant to the provisions of the Agricultural Marketing Agreement 
Act of 1937, as amended, (7 U.S.C. 601-612), and the applicable rules 
of practice and procedure effective thereunder (7 CFR part 900), a 
public hearing was held upon proposed amendment of Marketing Agreement 
and Order No. 930 (7 CFR part 930), regulating the handling of tart 
cherries grown in Michigan, New York, Pennsylvania, Oregon, Utah, 
Washington, and Wisconsin. Upon the basis of the evidence introduced at 
such hearing and the record thereof, it is found that:
    (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;

[[Page 33677]]

    (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 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 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.
    (b) Determinations. It is hereby determined that:
    (1) Handlers (excluding cooperative associations of producers who 
are not engaged in processing, distributing, or shipping tart cherries 
covered by the order as hereby amended) who, during the period July 1, 
2008, through June 30, 2009, handled 50 percent or more of the volume 
of such cherries covered by said order, as hereby amended, have not 
signed a marketing agreement; and
    (2) The issuance of this amendatory order, further amending the 
aforesaid order, is favored or approved by at least two-thirds of the 
produces who participated in a referendum on the question of approval 
and who, during the period of July 1, 2008 through June 30, 2009, 
(which has been determined to be a representative period), have been 
engaged within the production area in the production of such cherries, 
such producers having also produced for market at least two-thirds of 
the volume of such commodity represented in the referendum.
    (3) In the absence of a signed marketing agreement, the issuance of 
this amendatory order is the only practical means pursuant to the 
declared policy of the Act of advancing the interests of producers of 
tart cherries in the production area.

Order Relative to Handling of Tart Cherries Grown in Michigan, New 
York, Pennsylvania, Oregon, Utah, Washington, and Wisconsin

    It is therefore ordered, That on and after the effective date 
hereof, all handling of tart cherries grown in Michigan, New York, 
Pennsylvania, Oregon, Utah, Washington, and Wisconsin shall be in 
conformity to, and in compliance with the terms and conditions of the 
said order as hereby amended as follows:
    The provisions of the proposed order amending the order amending 
the order contained in the Secretary's Decision issued on January 6, 
2010, and published in the Federal Register on January 13, 2010 (75 FR 
1724), shall be and are the terms and provisions of this order amending 
the order and are set forth in full herein.

List of Subjects in 7 CFR Part 930

    Marketing agreements, Reporting and recordkeeping requirements, 
Tart cherries.

0
For the reasons set forth in the preamble, Chapter XI of Title 7 of the 
Code of Federal Regulations is amended as follows:

PART 930--TART CHERRIES GROWN IN THE STATES OF MICHIGAN, NEW YORK, 
PENNSYLVANIA, OREGON, UTAH, WASHINGTON, AND WISCONSIN

0
1. The authority citation for 7 CFR part 930 continues to read as 
follows:

    Authority: 7 U.S.C. 601-674.


0
2. Revise paragraph (g) of Sec.  930.20 to read as follows:


Sec.  930.20  Establishment and membership.

* * * * *
    (g) In order to achieve a fair and balanced representation on the 
Board, and to prevent any one sales constituency from gaining control 
of the Board, not more than one Board member may be from, or affiliated 
with, a single sales constituency in those districts having more than 
one seat on the Board; Provided, That this prohibition shall not apply 
in a district where such a conflict cannot be avoided. There is no 
prohibition on the number of Board members from differing districts 
that may be elected from a single sales constituency which may have 
operations in more than one district. However, as provided in Sec.  
930.23, a handler or grower may only nominate Board members and vote in 
one district.
* * * * *

0
3. Revise paragraphs (b)(2) and (b)(5), redesignate paragraph (c)(3) as 
paragraph (c)(3)(i), add a new paragraph (c)(3)(ii), and revise 
paragraph (c)(4) of Sec.  930.23 to read as follows:


Sec.  930.23  Nomination and election.

* * * * *
    (b) * * *
    (2) In order for the name of a handler nominee to appear on an 
election ballot, the nominee's name must be submitted with a petition 
form, to be supplied by the Secretary or the Board, which contains the 
signature of one or more handler(s), other than the nominee, from the 
nominee's district who is or are eligible to vote in the election and 
that handle(s) a combined total of no less than five percent (5%) of 
the average production, as that term is used Sec.  930.20, handled in 
the district. Provided, that this requirement shall not apply if its 
application would result in a sales constituency conflict as provided 
in Sec.  930.20(g). The requirement that the petition form be signed by 
a handler other than the nominee shall not apply in any district where 
fewer than two handlers are eligible to vote.
* * * * *
    (5) In districts entitled to only one Board member, both growers 
and handlers may be nominated for the district's Board seat. Grower and 
handler nominations must follow the petition procedures outlined in 
paragraphs (b)(1) and (b)(2) of this section.
* * * * *
    (c) * * *
    (3) * * *
    (ii) To be seated as a handler representative in any district, the 
successful candidate must receive the support of handler(s) that 
handled a combined total of no less than five percent (5%), of the 
average production, as that term is used in Sec.  930.20, handled in 
the district; Provided, that this paragraph shall not apply if its 
application would result in a sales constituency conflict as provided 
in Sec.  930.20(g).
    (4) In districts entitled to only one Board member, growers and 
handlers may vote for either the grower or handler nominee(s) for the 
single seat allocated to those districts.
* * * * *


0
4. Revise paragraph (i) of Sec.  930.50 to read as follows:


Sec.  930.50  Marketing policy.

* * * * *
    (i) Restricted Percentages. Restricted percentage requirements 
established under paragraphs (b), (c), or (d) of this section may be 
fulfilled by handlers by either establishing an inventory reserve

[[Page 33678]]

in accordance with Sec.  930.55 or Sec.  930.57 or by diversion of 
product in accordance with Sec.  930.59. In years where required, the 
Board shall establish a maximum percentage of the restricted quantity 
which may be established as a primary inventory reserve such that the 
total primary inventory reserve does not exceed 50-million pounds; 
Provided, That such 50-million-pound quantity may be changed upon 
recommendation of the Board and approval of the Secretary. Any such 
change shall be recommended by the Board on or before September 30 of 
any crop year to become effective for the following crop year, and the 
quantity may be changed no more than one time per crop year. Handlers 
will be permitted to divert (at plant or with grower diversion 
certificates) as much of the restricted percentage requirement as they 
deem appropriate, but may not establish a primary inventory reserve in 
excess of the percentage established by the Board for restricted 
cherries. In the event handlers wish to establish inventory reserve in 
excess of this amount, they may do so, in which case it will be 
classified as a secondary inventory reserve and will be regulated 
accordingly.
* * * * *


0
5. Add a new paragraph (d) to Sec.  930.54 to read as follows:


Sec.  930.54  Prohibition on the use or disposition of inventory 
reserve cherries.

* * * * *
    (d) Should the volume of cherries held in the primary inventory 
reserves and, subsequently, the secondary inventory reserves reach a 
minimum amount, which level will be established by the Secretary upon 
recommendation from the Board, the products held in the respective 
reserves shall be released from the reserves and made available to the 
handlers as free tonnage.


0
6. Revise paragraph (b) of Sec.  930.55 to read as follows:


Sec.  930.55  Primary inventory reserves.

* * * * *
    (b) The form of the cherries, frozen, canned in any form, dried, or 
concentrated juice, placed in the primary inventory reserve is at the 
option of the handler. The product(s) placed by the handler in the 
primary inventory reserve must have been produced in either the current 
or the preceding two crop years. Except as may be limited by Sec.  
930.50(i) or as may be permitted pursuant to Sec. Sec.  930.59 and 
930.62, such inventory reserve portion shall be equal to the sum of the 
products obtained by multiplying the weight or volume of the cherries 
in each lot of cherries acquired during the fiscal period by the then 
effective restricted percentage fixed by the Secretary; Provided, That 
in converting cherries in each lot to the form chosen by the handler, 
the inventory reserve obligations shall be adjusted in accordance with 
uniform rules adopted by the Board in terms of raw fruit equivalent.
* * * * *

    Dated: June 9, 2010.
Rayne Pegg,
Administrator, Agricultural Marketing Service.
[FR Doc. 2010-14286 Filed 6-14-10; 8:45 am]
BILLING CODE 3410-02-P