Tart Cherries Grown in the States of Michigan, et al.; Revision of Optimum Supply Requirements and Establishment of Inventory Release Procedures, 38975-38978 [2016-14173]
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38975
Proposed Rules
Federal Register
Vol. 81, No. 115
Wednesday, June 15, 2016
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.
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 930
[Doc. No. AMS–FV–15–0047; FV15–930–2
PR]
Tart Cherries Grown in the States of
Michigan, et al.; Revision of Optimum
Supply Requirements and
Establishment of Inventory Release
Procedures
Agricultural Marketing Service,
USDA.
ACTION: Proposed rule.
AGENCY:
This proposed rule would
implement recommendations from the
Cherry Industry Administrative Board
(Board) to add inventory release
procedures and revise optimum supply
provisions under the marketing order
for tart cherries grown in the States of
Michigan, New York, Pennsylvania,
Oregon, Utah, Washington, and
Wisconsin (order). The Board locally
administers the order and is comprised
of growers and handlers operating
within the production area. This rule
would establish procedures for releasing
inventory from reserves and increase the
maximum carry-out volume available
when calculating optimum supply from
20 million pounds to 100 million
pounds. These changes would provide
clear procedures should an inventory
release be necessary and would provide
more flexibility when calculating
optimum supply.
DATES: Comments must be received by
July 15, 2016.
ADDRESSES: Interested persons are
invited to submit written comments
concerning this proposal. Comments
must be sent to the Docket Clerk,
Marketing Order and Agreement
Division, Specialty Crops Program,
AMS, USDA, 1400 Independence
Avenue SW., STOP 0237, Washington,
DC 20250–0237; Fax: (202) 720–8938; or
Internet: https://www.regulations.gov. All
comments should reference the
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SUMMARY:
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document number and the date and
page number of this issue of the Federal
Register and will be made available for
public inspection in the Office of the
Docket Clerk during regular business
hours, or can be viewed at: https://
www.regulations.gov. All comments
submitted in response to this proposal
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:
Jennie M. Varela, Marketing Specialist,
or Christian D. Nissen, Regional
Director, Southeast Marketing Field
Office, Marketing Order and Agreement
Division, Specialty Crops Program,
AMS, USDA; Telephone: (863) 324–
3375, Fax: (863) 291–8614, or Email:
Jennie.Varela@ams.usda.gov or
Christian.Nissen@ams.usda.gov.
Small businesses may request
information on complying with this
regulation by contacting Antoinette
Carter, Marketing Order and Agreement
Division, Specialty Crops Program,
AMS, USDA, 1400 Independence
Avenue SW., STOP 0237, Washington,
DC 20250–0237; Telephone: (202) 720–
2491, Fax: (202) 720–8938, or Email:
Antoinette.Carter@ams.usda.gov.
SUPPLEMENTARY INFORMATION: This
proposal is issued under Marketing
Order No. 930, as amended (7 CFR part
930), regulating the handling of tart
cherries grown in the States of
Michigan, New York, Pennsylvania,
Oregon, Utah, Washington, and
Wisconsin, hereinafter referred to as the
‘‘order.’’ The 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 proposed rule in
conformance with Executive Orders
12866, 13563, and 13175.
This proposal has been reviewed
under Executive Order 12988, Civil
Justice Reform. This proposed rule is
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
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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
not later than 20 days after the date of
the entry of the ruling.
This proposal invites comments on
changes that would add inventory
release procedures and would revise the
optimum supply and exemption
provisions under the order. This
proposal would establish procedures for
releasing inventory from reserves and
increase the maximum carry-out volume
available when calculating optimum
supply from 20 million pounds to 100
million pounds. These changes would
provide clear procedures should an
inventory release be necessary and
would provide more flexibility when
calculating optimum supply. The Board
voted to recommend these proposed
changes to the Secretary at its meeting
on June 25, 2015.
Section 930.50 prescribes procedures
for calculating an optimum supply
based on sales history to determine free
and restricted percentages under
volume regulation. As part of the
process, the Board is required to
determine the volume of fruit they
anticipate would be necessary to have
on hand at the end of the crop year. The
order refers to this volume as carry-out
inventory. This section currently
specifies, in part, that the Board can
consider a carry-out inventory of up to
20 million pounds, or another amount
with the approval of the Secretary. This
proposal would amend Section 930.151
to increase the maximum carry-out
volume available when calculating
optimum supply from 20 million
pounds to 100 million pounds.
Section 930.54 of the order governs
the use or disposition of inventory
reserve cherries. Under this authority,
the Board can recommend to the
Secretary that a portion or all of
inventory reserve cherries be released if
there is not sufficient fruit on the market
to meet commercial demand. Sections
930.55 and 930.57 outline the
provisions and requirements of the
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primary and secondary reserves,
respectively. Further, no cherries in the
secondary reserve may be released until
all cherries in the primary reserve have
been released. This proposal would
create Section 930.154 to establish
procedures for releasing inventory from
reserves.
When volume regulation is in place,
the restricted portion of the crop is
either held in reserve by handlers or can
be sold for exempt uses as authorized in
the rules and regulations of the order.
Reserves can be held over multiple crop
years and are released when there is a
shortfall in supply. While the Board
maintains record of the volume in
reserve, handlers maintain ownership of
the reserve fruit.
All inventory reserves were released
to meet demand following a crop
disaster in 2012. The following year, the
industry was still recovering and the
Board did not recommend a volume
regulation. When the Board
recommended a volume regulation for
the 2014–15 season to the Secretary, and
cherries were again being added to the
reserve, the Board established a
committee to review the procedures for
releasing restricted inventory from
reserves. The committee recommended
to the Board that the procedures as
previously developed by the Board be
maintained, and that any releases
should first come from inventory
currently in the primary reserve and
then from any cherries designated for
reserve from the current season if
necessary.
Under these procedures, once the
additional volume needed for release is
established, the release should be
apportioned among handlers based on
each handler’s prior three-year average
of volume handled as a percentage of
the industry’s three-year average. For
example, if a handler handled five
percent of the previous three years’
production, and the Board
recommended a release of 20 million
pounds, that handler would potentially
be authorized to release one million
pounds of established reserves (.05 × 20
million). If a handler receives a release
larger than what they have in the
primary reserve, the excess amount
would be reapportioned to those
handlers with remaining primary
reserve. If the handler in the scenario
above had only 750,000 pounds in the
primary reserve, the remaining 250,000
pounds would be reallocated to those
handlers who still had inventory in the
primary reserve.
The committee that reviewed the
procedures for releasing restricted
inventory from the reserves recognized
that inventory reserves can be
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accumulated over a period of years.
Therefore, the committee agreed
releases should be based on the average
amount handled during the three
previous crop years, rather than using a
year-to-year basis. The existing release
procedures were crafted by the Board
through a series of actions in past years
and meetings. However, the procedures
were not codified in the rules and
regulations under the order. This
proposal would add the inventory
release procedures to the regulations.
This recommendation was also
thought to be the most equitable way to
conduct releases. One Board member
believed the releases should come from
the current year’s reserves prior to
releasing from existing reserves, and did
not support the recommendation.
However, the Board recognized that
during the crop year, complete
information on reserves and shipment
data would not be available. Thus, the
Board recommended codifying
inventory release procedures as
recommended by the committee. The
Board supported the recommendation
by a vote of 17–1. This proposal would
add a new Section 930.154 to the
regulations to establish procedures for
releasing inventory from reserves.
In addition to reviewing inventory
release procedures, the Board discussed
changes to some of its practices
regarding calculation of optimum
supply. Optimum supply is defined as
the average free sales of the prior three
years plus desirable carry-out inventory.
Desirable carry-out is the amount of
fruit needed by the industry to be
carried into the succeeding crop year to
meet marketing demand until the new
crop is available. Desirable carry-out is
set each year by the Board after
considering market circumstances and
needs. Section 930.50(a) currently
specifies that desirable carry-out can
range from 0 to a maximum of 20
million pounds, but also authorizes the
Board to establish an alternative carryout figure with the approval of the
Secretary.
Since the promulgation of the order,
the industry has seen new products and
new segments emerge, such as dried tart
cherries. As a result, at the end of a
season there are multiple product lines
that need to be supplied with tart
cherries before the next harvest, which
has impacted desirable carry-out.
Desirable carry-out is the amount of
fruit needed by the industry to be
carried into the succeeding crop year to
meet marketing demand until the new
crop is available.
In 2014, the Board used its authority
to recommend to the Secretary a carryout volume above the order-prescribed
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20 million pound maximum for the
2014–2015 crop year. At that time, the
Board estimated it was necessary to
have 50 million pounds available at the
end of the crop year to fulfill the needs
of the industry. In discussing volume
regulation for the 2015–2016 crop year,
the Board agreed an increased carry-out
was again necessary and recommended
to the Secretary a 55 million pound
carry-out when calculating the optimum
supply.
In order to facilitate future carry-out
needs without engaging with annual
rulemaking, the Board recommended
permanently increasing the maximum
carry-out to 100 million pounds. Some
members considered the 100 million
pound upper limit to be too high, and
voted against the recommendation.
However, this proposed change would
only increase the available range for the
carry-out value from 0 to 20 million
pounds to 0 to 100 million. This
proposed amendment would provide
the Board with additional flexibility
when considering the carry-out, but in
itself does not establish a carry-out
amount. The Board would still have to
discuss and recommend a desirable
carry-out value that represents current
industry needs each crop year.
Consequently, the Board supported the
recommendation by a vote of 12–5. This
proposal would amend Section 930.151
of the regulations to increase the
maximum carry-out volume possible
when calculating optimum supply from
20 million pounds to 100 million
pounds.
The Board made several other
recommendations for changes to the
rules and regulations under the order at
its June 25, 2015 meeting. These
changes are being considered under a
separate action.
Initial Regulatory Flexibility Analysis
Pursuant to requirements set forth in
the Regulatory Flexibility Act (RFA) (5
U.S.C. 601–612), 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
businesses 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.
There are approximately 600
producers of tart cherries in the
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regulated area and approximately 40
handlers of tart cherries who are subject
to regulation under the order. Small
agricultural producers are defined by
the Small Business Administration
(SBA) as those having annual receipts of
less than $750,000 and small
agricultural service firms have been
defined as those having annual receipts
of less than $7,500,000 (13 CFR
121.201).
According to the National
Agricultural Statistics Service and
Board data, the average annual grower
price for tart cherries during the 2014–
15 crop year was $0.35 per pound, and
total utilization was around 300 million
pounds. Therefore, average receipts for
tart cherry producers were around
$175,800, well below the SBA threshold
for small producers. In 2014, The Food
Institute estimated an f.o.b. price of
$0.96 per pound for frozen tart cherries,
which make up the majority of
processed tart cherries. Using this data,
average annual handler receipts were
about $6.9 million, which is also below
the SBA threshold for small agricultural
service firms. Assuming a normal
distribution, the majority of producers
and handlers of tart cherries may be
classified as small entities.
This proposed action would create
§ 930.154 of the rules and regulations,
establishing procedures for release of
inventory reserves. This proposed rule
would also revise § 930.151 to allow the
Board to consider a carry-out of up to
100 million pounds when calculating
optimum supply. These changes are
intended to provide clear direction in
the event an inventory release becomes
necessary and allow the Board to be
more responsive to tart cherry market
demand. The authority for these actions
is provided in §§ 930.50 and 930.54 of
the order. The Board voted to
recommend these proposed changes to
the Secretary at its meeting on June 25,
2015.
It is not anticipated that this action
would impose additional costs on
handlers or growers, regardless of size.
The proposed changes are
administrative in nature and intended to
align the provisions of the order with
current industry practices. The addition
of rules and regulations regarding
inventory releases is a codification of
administrative procedures the Board has
had in place for many years. The
expanded carry-out upper limit would
allow the Board additional flexibility in
meeting market needs without
additional rulemaking.
The benefits of this rule are not
expected to be disproportionately
greater or less for small handlers or
producers than for larger entities.
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The Board discussed alternatives to
these proposed changes to the order,
including releasing reserves from the
current crop year or releasing cherries in
the order in which the fruit was put into
reserve. A committee was established to
review the reserve procedures, and it
proposed using a three-year average
percentage for each handler and
releasing the previous crop years’
reserves. The Board agreed that the
committee’s recommendation would be
the most equitable solution. Regarding
the carry-out limit, the Board
considered not recommending a
permanent change. However, the Board
anticipates needing more than 20
million pounds of carry-out for the
foreseeable future. A member suggested
changing the motion to 80 million
pounds, but that suggestion did not
receive support. Thus, the suggested
alternatives were rejected.
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 as a result of this action
are necessary. Should any changes
become necessary, they would be
submitted to OMB for approval.
Accordingly, this proposal would not
impose any additional reporting or
recordkeeping requirements on either
small or large tart cherry handlers. 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.
USDA has not identified any relevant
Federal rules that duplicate, overlap or
conflict with this rule.
The Board’s meeting was widely
publicized throughout the tart cherry
industry and all interested persons were
invited to attend and participate in
Board deliberations on all issues. Like
all Board meetings, the June 25, 2015,
meeting was a public meeting and all
entities, both large and small, were able
to express views on these issues.
Finally, interested persons are invited to
submit comments on this proposed rule,
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38977
including the regulatory and
informational impacts of this action on
small businesses.
A small business guide on complying
with fruit, vegetable, and specialty crop
marketing agreements and orders may
be viewed at: https://www.ams.usda.gov/
rules-regulations/moa/small-businesses.
Any questions about the compliance
guide should be sent to Antoinette
Carter at the previously mentioned
address in the FOR FURTHER INFORMATION
CONTACT section.
A 30-day comment period is provided
to allow interested persons to respond
to this proposal. A 30-day period is
deemed appropriate because this action
would need to be in place as soon as
possible since handlers are already
putting cherries into reserve from the
2015–2016 crop. The action would also
need to be in place before the Board
meets in June to have preliminary
discussions on volume control,
including determining an appropriate
carry-out figure. All written comments
received during the comment period
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. In § 930.151:
a. Designate the current paragraph as
paragraph (a); and
■ b. Add a new paragraph (b) to read as
follows:
■
■
§ 930.151
Desirable carry-out inventory.
*
*
*
*
*
(b) Beginning with the crop year
starting July 1, 2016, for the purposes of
determining an optimum supply
volume, the Board may recommend a
desirable carry-out inventory not to
exceed 100 million pounds.
■ 3. Section 930.154 is added to read as
follows:
§ 930.154
cherries.
Release of inventory reserve
As provided in § 930.54, the Board
may recommend a release of a portion
or all of the primary and/or secondary
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Federal Register / Vol. 81, No. 115 / Wednesday, June 15, 2016 / Proposed Rules
reserve cherries. The total available
reserves will be determined at the
beginning of the crop year. The primary
reserve as defined in §§ 930.55 and
930.150 must be depleted before the
secondary reserve can be released. If a
release is recommended, the
recommended volume shall be
apportioned to handlers on the basis of
each handler’s proportion of the total
volume handled in the preceding three
crop years. If a handler has less volume
in reserve than is apportioned, the
excess volume shall be reapportioned to
those who still have volume in reserve
until the total release is complete.
Dated: June 10, 2016.
Elanor Starmer,
Administrator, Agricultural Marketing
Service.
[FR Doc. 2016–14173 Filed 6–14–16; 8:45 am]
BILLING CODE P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. FAA–2016–6140; Directorate
Identifier 2015–NM–059–AD]
RIN 2120–AA64
Airworthiness Directives; The Boeing
Company Airplanes
Federal Aviation
Administration (FAA), DOT.
ACTION: Notice of proposed rulemaking
(NPRM); extension of comment period.
AGENCY:
This document announces an
extension of the comment period for the
above-referenced NPRM, which
proposed the adoption of a new
airworthiness directive (AD) for certain
The Boeing Company Model 777
airplanes. That NPRM invited
comments concerning the proposed
requirement to modify the fuel quantity
indicating system (FQIS) to prevent
development of an ignition source
inside the center fuel tank due to
electrical fault conditions. This
extension of the comment period is
necessary to provide all interested
persons an opportunity to present their
views on the proposed requirements of
that NPRM.
DATES: We must receive comments on
the NPRM by September 19, 2016.
ADDRESSES: You may send comments,
using the procedures found in 14 CFR
11.43 and 11.45, by any of the following
methods:
• Federal eRulemaking Portal: Go to
https://www.regulations.gov. Follow the
instructions for submitting comments.
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• Fax: 202–493–2251.
• Mail: U.S. Department of
Transportation, Docket Operations, M–
30, West Building Ground Floor, Room
W12–140, 1200 New Jersey Avenue SE.,
Washington, DC 20590.
• Hand Delivery: Deliver to Mail
address above between 9 a.m. and 5
p.m., Monday through Friday, except
Federal holidays.
Examining the AD Docket
You may examine the AD docket on
the Internet at https://
www.regulations.gov by searching for
and locating Docket No. FAA–2016–
6140; or in person at the Docket
Management Facility between 9 a.m.
and 5 p.m., Monday through Friday,
except Federal holidays. The AD docket
contains the proposed AD, the
regulatory evaluation, any comments
received, and other information. The
street address for the Docket Office
(phone: 800–647–5527) is in the
ADDRESSES section. Comments will be
available in the AD docket shortly after
receipt.
FOR FURTHER INFORMATION CONTACT: Jon
Regimbal, Aerospace Engineer,
Propulsion Branch, ANM–140S, FAA,
Seattle Aircraft Certification Office
(ACO), 1601 Lind Avenue SW., Renton,
WA 98057–3356; phone: 425–917–6506;
fax: 425–917–6590; email:
Jon.Regimbal@faa.gov.
SUPPLEMENTARY INFORMATION:
Comments Invited
We invite you to send any written
relevant data, views, or arguments about
this proposal. Send your comments to
an address listed under the ADDRESSES
section. Include ‘‘Docket No. FAA–
2016–6140; Directorate Identifier 2015–
NM–059–AD’’ at the beginning of your
comments. We specifically invite
comments on the overall regulatory,
economic, environmental, and energy
aspects of this proposed AD. We will
consider all comments received by the
closing date and may amend this
proposed AD because of those
comments.
We will post all comments we
receive, without change, to https://
www.regulations.gov, including any
personal information you provide. We
will also post a report summarizing each
substantive verbal contact we receive
about this proposed AD.
Discussion
We issued an NPRM to amend 14 CFR
part 39 by adding an AD that would
apply to certain The Boeing Model 777
airplanes. The NPRM published in the
Federal Register on May 4, 2016 (81 FR
26750) (‘‘the NPRM’’). The NPRM
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proposed to require modifying the fuel
quantity indicating system (FQIS) to
prevent development of an ignition
source inside the center fuel tank due to
electrical fault conditions.
The NPRM invited comments on
regulatory, economic, environmental,
and energy aspects of the proposal.
The NPRM was prompted by fuel
system reviews conducted by the
manufacturer. The actions specified by
the NPRM are intended to prevent
ignition sources inside the center fuel
tank, which, in combination with
flammable fuel vapors, could result in a
fuel tank explosion and consequent loss
of the airplane.
Related Rulemaking
At the time we issued the NPRM, we
issued five other NPRMs that also
proposed to require modification of the
FQIS:
• Docket No. FAA–2016–6139,
Directorate Identifier 2015–NM–061–
AD, for certain The Boeing Company
Model 737–600, –700, –700C, –800,
–900, and –900ER series airplanes.
• Docket No. FAA–2016–6141,
Directorate Identifier 2015–NM–048–
AD, for certain The Boeing Company
Model 767 airplanes.
• Docket No. FAA–2016–6143,
Directorate Identifier 2015–NM–028–
AD, for all Airbus Model A300 B4–600,
B4–600R, and F4–600R series airplanes,
and Model A300 C4–605R Variant F
airplanes (collectively called Model
A300–600 series airplanes), and Model
A310 series airplanes.
• Docket No. FAA–2016–6144,
Directorate Identifier 2015–NM–088–
AD, for certain Airbus Model A318,
A319, A320, and A321 airplanes.
• Docket No. FAA–2016–6145,
Directorate Identifier 2015–NM–056–
AD, for certain The Boeing Company
Model 747 airplanes.
Actions Since Previous NPRM Was
Issued
Since we issued the NPRM, we have
received a request from Airlines for
America (A4A) to extend the comment
period. A4A stated that the NPRMs are
controversial and could drive
substantial costs, especially for cargo
airlines. To be able to prepare informed
and meaningful comments with
coordinated consensus among its
members, A4A requested a longer
comment period to understand a
number of factors, including related
service information, data and safety
analysis of the unsafe condition, and
potential costs.
We agree with the request, and have
determined that it is appropriate to
extend the comment period for the
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]]>Agencies
[Federal Register Volume 81, Number 115 (Wednesday, June 15, 2016)]
[Proposed Rules]
[Pages 38975-38978]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-14173]
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Proposed Rules
Federal Register
________________________________________________________________________
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.
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Federal Register / Vol. 81, No. 115 / Wednesday, June 15, 2016 /
Proposed Rules
[[Page 38975]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 930
[Doc. No. AMS-FV-15-0047; FV15-930-2 PR]
Tart Cherries Grown in the States of Michigan, et al.; Revision
of Optimum Supply Requirements and Establishment of Inventory Release
Procedures
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would implement recommendations from the
Cherry Industry Administrative Board (Board) to add inventory release
procedures and revise optimum supply provisions under the marketing
order for tart cherries grown in the States of Michigan, New York,
Pennsylvania, Oregon, Utah, Washington, and Wisconsin (order). The
Board locally administers the order and is comprised of growers and
handlers operating within the production area. This rule would
establish procedures for releasing inventory from reserves and increase
the maximum carry-out volume available when calculating optimum supply
from 20 million pounds to 100 million pounds. These changes would
provide clear procedures should an inventory release be necessary and
would provide more flexibility when calculating optimum supply.
DATES: Comments must be received by July 15, 2016.
ADDRESSES: Interested persons are invited to submit written comments
concerning this proposal. Comments must be sent to the Docket Clerk,
Marketing Order and Agreement Division, Specialty Crops Program, AMS,
USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 20250-
0237; Fax: (202) 720-8938; or Internet: https://www.regulations.gov. All
comments should reference the document number and the date and page
number of this issue of the Federal Register and will be made available
for public inspection in the Office of the Docket Clerk during regular
business hours, or can be viewed at: https://www.regulations.gov. All
comments submitted in response to this proposal 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: Jennie M. Varela, Marketing
Specialist, or Christian D. Nissen, Regional Director, Southeast
Marketing Field Office, Marketing Order and Agreement Division,
Specialty Crops Program, AMS, USDA; Telephone: (863) 324-3375, Fax:
(863) 291-8614, or Email: Jennie.Varela@ams.usda.gov or
Christian.Nissen@ams.usda.gov.
Small businesses may request information on complying with this
regulation by contacting Antoinette Carter, Marketing Order and
Agreement Division, Specialty Crops Program, AMS, USDA, 1400
Independence Avenue SW., STOP 0237, Washington, DC 20250-0237;
Telephone: (202) 720-2491, Fax: (202) 720-8938, or Email:
Antoinette.Carter@ams.usda.gov.
SUPPLEMENTARY INFORMATION: This proposal is issued under Marketing
Order No. 930, as amended (7 CFR part 930), regulating the handling of
tart cherries grown in the States of Michigan, New York, Pennsylvania,
Oregon, Utah, Washington, and Wisconsin, hereinafter referred to as the
``order.'' The 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 proposed rule
in conformance with Executive Orders 12866, 13563, and 13175.
This proposal has been reviewed under Executive Order 12988, Civil
Justice Reform. This proposed rule is 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 not later than 20 days after the date of
the entry of the ruling.
This proposal invites comments on changes that would add inventory
release procedures and would revise the optimum supply and exemption
provisions under the order. This proposal would establish procedures
for releasing inventory from reserves and increase the maximum carry-
out volume available when calculating optimum supply from 20 million
pounds to 100 million pounds. These changes would provide clear
procedures should an inventory release be necessary and would provide
more flexibility when calculating optimum supply. The Board voted to
recommend these proposed changes to the Secretary at its meeting on
June 25, 2015.
Section 930.50 prescribes procedures for calculating an optimum
supply based on sales history to determine free and restricted
percentages under volume regulation. As part of the process, the Board
is required to determine the volume of fruit they anticipate would be
necessary to have on hand at the end of the crop year. The order refers
to this volume as carry-out inventory. This section currently
specifies, in part, that the Board can consider a carry-out inventory
of up to 20 million pounds, or another amount with the approval of the
Secretary. This proposal would amend Section 930.151 to increase the
maximum carry-out volume available when calculating optimum supply from
20 million pounds to 100 million pounds.
Section 930.54 of the order governs the use or disposition of
inventory reserve cherries. Under this authority, the Board can
recommend to the Secretary that a portion or all of inventory reserve
cherries be released if there is not sufficient fruit on the market to
meet commercial demand. Sections 930.55 and 930.57 outline the
provisions and requirements of the
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primary and secondary reserves, respectively. Further, no cherries in
the secondary reserve may be released until all cherries in the primary
reserve have been released. This proposal would create Section 930.154
to establish procedures for releasing inventory from reserves.
When volume regulation is in place, the restricted portion of the
crop is either held in reserve by handlers or can be sold for exempt
uses as authorized in the rules and regulations of the order. Reserves
can be held over multiple crop years and are released when there is a
shortfall in supply. While the Board maintains record of the volume in
reserve, handlers maintain ownership of the reserve fruit.
All inventory reserves were released to meet demand following a
crop disaster in 2012. The following year, the industry was still
recovering and the Board did not recommend a volume regulation. When
the Board recommended a volume regulation for the 2014-15 season to the
Secretary, and cherries were again being added to the reserve, the
Board established a committee to review the procedures for releasing
restricted inventory from reserves. The committee recommended to the
Board that the procedures as previously developed by the Board be
maintained, and that any releases should first come from inventory
currently in the primary reserve and then from any cherries designated
for reserve from the current season if necessary.
Under these procedures, once the additional volume needed for
release is established, the release should be apportioned among
handlers based on each handler's prior three-year average of volume
handled as a percentage of the industry's three-year average. For
example, if a handler handled five percent of the previous three years'
production, and the Board recommended a release of 20 million pounds,
that handler would potentially be authorized to release one million
pounds of established reserves (.05 x 20 million). If a handler
receives a release larger than what they have in the primary reserve,
the excess amount would be reapportioned to those handlers with
remaining primary reserve. If the handler in the scenario above had
only 750,000 pounds in the primary reserve, the remaining 250,000
pounds would be reallocated to those handlers who still had inventory
in the primary reserve.
The committee that reviewed the procedures for releasing restricted
inventory from the reserves recognized that inventory reserves can be
accumulated over a period of years. Therefore, the committee agreed
releases should be based on the average amount handled during the three
previous crop years, rather than using a year-to-year basis. The
existing release procedures were crafted by the Board through a series
of actions in past years and meetings. However, the procedures were not
codified in the rules and regulations under the order. This proposal
would add the inventory release procedures to the regulations.
This recommendation was also thought to be the most equitable way
to conduct releases. One Board member believed the releases should come
from the current year's reserves prior to releasing from existing
reserves, and did not support the recommendation. However, the Board
recognized that during the crop year, complete information on reserves
and shipment data would not be available. Thus, the Board recommended
codifying inventory release procedures as recommended by the committee.
The Board supported the recommendation by a vote of 17-1. This proposal
would add a new Section 930.154 to the regulations to establish
procedures for releasing inventory from reserves.
In addition to reviewing inventory release procedures, the Board
discussed changes to some of its practices regarding calculation of
optimum supply. Optimum supply is defined as the average free sales of
the prior three years plus desirable carry-out inventory. Desirable
carry-out is the amount of fruit needed by the industry to be carried
into the succeeding crop year to meet marketing demand until the new
crop is available. Desirable carry-out is set each year by the Board
after considering market circumstances and needs. Section 930.50(a)
currently specifies that desirable carry-out can range from 0 to a
maximum of 20 million pounds, but also authorizes the Board to
establish an alternative carry-out figure with the approval of the
Secretary.
Since the promulgation of the order, the industry has seen new
products and new segments emerge, such as dried tart cherries. As a
result, at the end of a season there are multiple product lines that
need to be supplied with tart cherries before the next harvest, which
has impacted desirable carry-out. Desirable carry-out is the amount of
fruit needed by the industry to be carried into the succeeding crop
year to meet marketing demand until the new crop is available.
In 2014, the Board used its authority to recommend to the Secretary
a carry-out volume above the order-prescribed 20 million pound maximum
for the 2014-2015 crop year. At that time, the Board estimated it was
necessary to have 50 million pounds available at the end of the crop
year to fulfill the needs of the industry. In discussing volume
regulation for the 2015-2016 crop year, the Board agreed an increased
carry-out was again necessary and recommended to the Secretary a 55
million pound carry-out when calculating the optimum supply.
In order to facilitate future carry-out needs without engaging with
annual rulemaking, the Board recommended permanently increasing the
maximum carry-out to 100 million pounds. Some members considered the
100 million pound upper limit to be too high, and voted against the
recommendation. However, this proposed change would only increase the
available range for the carry-out value from 0 to 20 million pounds to
0 to 100 million. This proposed amendment would provide the Board with
additional flexibility when considering the carry-out, but in itself
does not establish a carry-out amount. The Board would still have to
discuss and recommend a desirable carry-out value that represents
current industry needs each crop year. Consequently, the Board
supported the recommendation by a vote of 12-5. This proposal would
amend Section 930.151 of the regulations to increase the maximum carry-
out volume possible when calculating optimum supply from 20 million
pounds to 100 million pounds.
The Board made several other recommendations for changes to the
rules and regulations under the order at its June 25, 2015 meeting.
These changes are being considered under a separate action.
Initial Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA) (5 U.S.C. 601-612), 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
businesses 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.
There are approximately 600 producers of tart cherries in the
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regulated area and approximately 40 handlers of tart cherries who are
subject to regulation under the order. Small agricultural producers are
defined by the Small Business Administration (SBA) as those having
annual receipts of less than $750,000 and small agricultural service
firms have been defined as those having annual receipts of less than
$7,500,000 (13 CFR 121.201).
According to the National Agricultural Statistics Service and Board
data, the average annual grower price for tart cherries during the
2014-15 crop year was $0.35 per pound, and total utilization was around
300 million pounds. Therefore, average receipts for tart cherry
producers were around $175,800, well below the SBA threshold for small
producers. In 2014, The Food Institute estimated an f.o.b. price of
$0.96 per pound for frozen tart cherries, which make up the majority of
processed tart cherries. Using this data, average annual handler
receipts were about $6.9 million, which is also below the SBA threshold
for small agricultural service firms. Assuming a normal distribution,
the majority of producers and handlers of tart cherries may be
classified as small entities.
This proposed action would create Sec. 930.154 of the rules and
regulations, establishing procedures for release of inventory reserves.
This proposed rule would also revise Sec. 930.151 to allow the Board
to consider a carry-out of up to 100 million pounds when calculating
optimum supply. These changes are intended to provide clear direction
in the event an inventory release becomes necessary and allow the Board
to be more responsive to tart cherry market demand. The authority for
these actions is provided in Sec. Sec. 930.50 and 930.54 of the order.
The Board voted to recommend these proposed changes to the Secretary at
its meeting on June 25, 2015.
It is not anticipated that this action would impose additional
costs on handlers or growers, regardless of size. The proposed changes
are administrative in nature and intended to align the provisions of
the order with current industry practices. The addition of rules and
regulations regarding inventory releases is a codification of
administrative procedures the Board has had in place for many years.
The expanded carry-out upper limit would allow the Board additional
flexibility in meeting market needs without additional rulemaking.
The benefits of this rule are not expected to be disproportionately
greater or less for small handlers or producers than for larger
entities.
The Board discussed alternatives to these proposed changes to the
order, including releasing reserves from the current crop year or
releasing cherries in the order in which the fruit was put into
reserve. A committee was established to review the reserve procedures,
and it proposed using a three-year average percentage for each handler
and releasing the previous crop years' reserves. The Board agreed that
the committee's recommendation would be the most equitable solution.
Regarding the carry-out limit, the Board considered not recommending a
permanent change. However, the Board anticipates needing more than 20
million pounds of carry-out for the foreseeable future. A member
suggested changing the motion to 80 million pounds, but that suggestion
did not receive support. Thus, the suggested alternatives were
rejected.
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 as a result of this action
are necessary. Should any changes become necessary, they would be
submitted to OMB for approval.
Accordingly, this proposal would not impose any additional
reporting or recordkeeping requirements on either small or large tart
cherry handlers. 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.
USDA has not identified any relevant Federal rules that duplicate,
overlap or conflict with this rule.
The Board's meeting was widely publicized throughout the tart
cherry industry and all interested persons were invited to attend and
participate in Board deliberations on all issues. Like all Board
meetings, the June 25, 2015, meeting was a public meeting and all
entities, both large and small, were able to express views on these
issues. Finally, interested persons are invited to submit comments on
this proposed rule, including the regulatory and informational impacts
of this action on small businesses.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at: https://www.ams.usda.gov/rules-regulations/moa/small-businesses. Any questions
about the compliance guide should be sent to Antoinette Carter at the
previously mentioned address in the FOR FURTHER INFORMATION CONTACT
section.
A 30-day comment period is provided to allow interested persons to
respond to this proposal. A 30-day period is deemed appropriate because
this action would need to be in place as soon as possible since
handlers are already putting cherries into reserve from the 2015-2016
crop. The action would also need to be in place before the Board meets
in June to have preliminary discussions on volume control, including
determining an appropriate carry-out figure. All written comments
received during the comment period 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
0
1. The authority citation for 7 CFR part 930 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
0
2. In Sec. 930.151:
0
a. Designate the current paragraph as paragraph (a); and
0
b. Add a new paragraph (b) to read as follows:
Sec. 930.151 Desirable carry-out inventory.
* * * * *
(b) Beginning with the crop year starting July 1, 2016, for the
purposes of determining an optimum supply volume, the Board may
recommend a desirable carry-out inventory not to exceed 100 million
pounds.
0
3. Section 930.154 is added to read as follows:
Sec. 930.154 Release of inventory reserve cherries.
As provided in Sec. 930.54, the Board may recommend a release of a
portion or all of the primary and/or secondary
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reserve cherries. The total available reserves will be determined at
the beginning of the crop year. The primary reserve as defined in
Sec. Sec. 930.55 and 930.150 must be depleted before the secondary
reserve can be released. If a release is recommended, the recommended
volume shall be apportioned to handlers on the basis of each handler's
proportion of the total volume handled in the preceding three crop
years. If a handler has less volume in reserve than is apportioned, the
excess volume shall be reapportioned to those who still have volume in
reserve until the total release is complete.
Dated: June 10, 2016.
Elanor Starmer,
Administrator, Agricultural Marketing Service.
[FR Doc. 2016-14173 Filed 6-14-16; 8:45 am]
BILLING CODE P
