81_FR_63856 81 FR 63676 - Tart Cherries Grown in the States of Michigan, et al.; Revision of Optimum Supply Requirements and Establishment of Inventory Release Procedures

81 FR 63676 - Tart Cherries Grown in the States of Michigan, et al.; Revision of Optimum Supply Requirements and Establishment of Inventory Release Procedures

DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service

Federal Register Volume 81, Issue 180 (September 16, 2016)

Page Range63676-63679
FR Document2016-22258

This rule implements 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 area of production. This final rule establishes procedures for releasing inventory from reserves and increases the maximum carry-out volume available when calculating optimum supply from 20 million pounds to 100 million pounds. These changes provide clear procedures should an inventory release be necessary and provides more flexibility when calculating optimum supply.

Federal Register, Volume 81 Issue 180 (Friday, September 16, 2016)
[Federal Register Volume 81, Number 180 (Friday, September 16, 2016)]
[Rules and Regulations]
[Pages 63676-63679]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-22258]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 930

[Doc. No. AMS-FV-15-0047; FV15-930-2 FR]


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: Final rule.

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

SUMMARY: This rule implements 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 area of production. This final rule establishes 
procedures for releasing inventory from reserves and increases the 
maximum carry-out volume available when calculating optimum supply from 
20 million pounds to 100 million pounds. These changes provide clear 
procedures should an inventory release be necessary and provides more 
flexibility when calculating optimum supply.

DATES: Effective September 19, 2016.

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: [email protected] or 
[email protected].
    Small businesses may request information on complying with this 
regulation by contacting Richard Lower, Marketing Order and Agreement 
Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue 
SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-

[[Page 63677]]

2491, Fax: (202) 720-8938, or Email: [email protected].

SUPPLEMENTARY INFORMATION: This final rule 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 rule in 
conformance with Executive Orders 12866, 13563, and 13175.
    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This 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 final rule adds inventory release procedures and revises the 
optimum supply and exemption provisions under the order. This rule 
establishes procedures for releasing inventory from reserves and 
increases the maximum carry-out volume available when calculating 
optimum supply from 20 million pounds to 100 million pounds. These 
changes provide clear procedures should an inventory release be 
necessary and provides more flexibility when calculating optimum 
supply. The Board voted to recommend these 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 rule amends 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 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 rule creates 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 release 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 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 have 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 rule adds 
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 rule 
adds 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

[[Page 63678]]

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 in 
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 action only increases the available range 
for the carry-out value from 0 to 20 million pounds to 0 to 100 
million. This change will provide the Board with additional flexibility 
when considering the carry-out, but in itself does not establish a 
carry-out amount. The Board will still 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 rule amends 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.

Final 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 final 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 
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 final rule creates Sec.  930.154 of the rules and regulations, 
establishing procedures for release of inventory reserves. This final 
rule also revises 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.
    It is not anticipated that this action will impose additional costs 
on handlers or growers, regardless of size. The implemented 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 will 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 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 action will 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.
    As noted in the initial regulatory flexibility analysis, USDA has 
not identified any relevant Federal rules that duplicate, overlap or 
conflict with this final rule.
    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.

[[Page 63679]]

    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.
    A proposed rule concerning this action was published in the Federal 
Register on June 15, 2016 (81 FR 38975). Copies of the rule were mailed 
or sent via facsimile to all Board members and tart cherry handlers. 
Finally, the rule was made available through the internet by USDA and 
the Office of the Federal Register. A 30-day comment period ending July 
15, 2016, was provided to allow interested persons to respond to the 
proposal.
    One comment was received during the comment period in response to 
the proposal. The commenter is an individual who supports the proposed 
action. The commenter described the proposed changes as positive for 
the industry. Accordingly, no changes will be made to the rule as 
proposed, based on the comment received.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/rules-regulations/moa/small-businesses. Any questions 
about the compliance guide should be sent to Richard Lower at the 
previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    After consideration of all relevant matter presented, including the 
information and recommendation submitted by the Board and other 
available information, it is hereby found that this rule, as 
hereinafter set forth, will tend to effectuate the declared policy of 
the Act.
    It is further found that good cause exists for not postponing the 
effective date of this rule until 30 days after publication in the 
Federal Register (5 U.S.C. 553) because handlers are already putting 
cherries into reserve. This action also needs to be in place before the 
Board meets in September to discuss establishing volume control, 
including determining an appropriate carry-out figure. Further, 
handlers are aware of this rule, which was recommended at a public 
meeting. Also, a 30-day comment period was provided for in the proposed 
rule.

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 
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.

    (a) * * *
    (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.

    (a) As provided in Sec.  930.54, the Board may recommend a release 
of a portion or all of the primary and/or secondary 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.
    (b) 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: September 12, 2016.
Elanor Starmer,
Administrator, Agricultural Marketing Service.
[FR Doc. 2016-22258 Filed 9-15-16; 8:45 am]
 BILLING CODE 3410-02-P



                                           63676            Federal Register / Vol. 81, No. 180 / Friday, September 16, 2016 / Rules and Regulations

                                              Since this change is a technical                     E-Government Act                                        Dated: September 12, 2016.
                                           correction and editorial in nature, and                                                                       Elanor Starmer,
                                           will not result in a change to the way                     AMS is committed to complying with                 Associate Administrator, Agricultural
                                           service is provided to our customers,                   the E-Government Act of 2002 to                       Marketing Service.
                                           AMS has determined it will not have a                   promote the use of the Internet and                   [FR Doc. 2016–22246 Filed 9–15–16; 8:45 am]
                                           financial impact on small entities that                 other information technologies to
                                                                                                                                                         BILLING CODE 3410–02–P
                                           utilize our services.                                   provide increased opportunities for
                                              AMS will also revise the prerequisite                citizen access to government
                                           requirement of shell eggs eligible for                  information and services, and for other               DEPARTMENT OF AGRICULTURE
                                           USDA grading and certification. The                     purposes.
                                           revision will prohibit the use of SE-                                                                         Agricultural Marketing Service
                                                                                                   List of Subjects in 7 CFR Part 56
                                           adulterated shell eggs or recalled shell
                                           eggs from being presented to USDA for                     Agriculture, Eggs and egg products,                 7 CFR Part 930
                                           grading and certification.                              Food grades and standards, Food
                                              The FDA prohibits the use of SE-                                                                           [Doc. No. AMS–FV–15–0047; FV15–930–2
                                                                                                   labeling, Food packaging, Reporting and               FR]
                                           adulterated shell eggs from being sold to               recordkeeping requirements, Voluntary
                                           consumers. When shell eggs are                          standards.                                            Tart Cherries Grown in the States of
                                           suspected of being adulterated with SE,                                                                       Michigan, et al.; Revision of Optimum
                                           the packing facility is obligated to test                 For the reasons set forth in the                    Supply Requirements and
                                           the shell eggs to assure only safe                      preamble, 7 CFR part 56 is amended as                 Establishment of Inventory Release
                                           product is distributed to consumers. If                 follows:                                              Procedures
                                           shell eggs are found to be adulterated
                                           with SE, the FDA will issue a request to                PART 56—VOLUNTARY GRADING OF                          AGENCY:  Agricultural Marketing Service,
                                           the packing facility to voluntarily recall              SHELL EGGS                                            USDA.
                                           the product, or will exercise its                                                                             ACTION: Final rule.
                                           mandatory recall authority to return the                ■ 1. The authority citation for 7 CFR
                                           product to the origin facility. The                     part 56 continues to read as follows:                 SUMMARY:    This rule implements
                                           product must either be destroyed or                         Authority: 7 U.S.C. 1621 et seq.
                                                                                                                                                         recommendations from the Cherry
                                           reconditioned under FDA supervision.                                                                          Industry Administrative Board (Board)
                                              Since SE-adulterated shell eggs or                   ■ 2. Amend § 56.1 by revising the                     to add inventory release procedures and
                                           shell eggs that have been recalled are no               definition of Condition to read as                    revise optimum supply provisions
                                           longer eligible for distribution to                     follows:                                              under the marketing order for tart
                                           consumers, but are either destroyed or                                                                        cherries grown in the States of
                                           reconditioned under the direction of the                § 56.1 Meaning of words and terms                     Michigan, New York, Pennsylvania,
                                           FDA, changing the AMS regulation will                   defined.                                              Oregon, Utah, Washington, and
                                           not have an impact on small entities                    *     *     *     *     *                             Wisconsin (order). The Board locally
                                           since those shell eggs are deemed unfit                   Condition means any characteristic                  administers the order and is comprised
                                           for human consumption.                                  detected by sensory examination                       of growers and handlers operating
                                                                                                   (visual, touch, or odor), including the               within the area of production. This final
                                           Executive Order 12988                                                                                         rule establishes procedures for releasing
                                                                                                   state of preservation, cleanliness,
                                              This final rule has been reviewed                                                                          inventory from reserves and increases
                                                                                                   soundness, or fitness for human food
                                           under Executive Order 12988, Civil                                                                            the maximum carry-out volume
                                                                                                   that affects the marketing of the product.
                                           Justice Reform. When this final rule is                                                                       available when calculating optimum
                                           adopted: (1) All State and local laws and               *     *     *     *     *                             supply from 20 million pounds to 100
                                           regulations that are inconsistent with                  ■ 3. Amend § 56.40 by revising                        million pounds. These changes provide
                                           the rule will be preempted; (2) no                      paragraphs (c)(2) and (3) and adding                  clear procedures should an inventory
                                           retroactive effect will be given to this                paragraphs (c)(4) and (5) to read as                  release be necessary and provides more
                                           rule; and (3) administrative proceedings                follows:                                              flexibility when calculating optimum
                                           will not be required before parties may                                                                       supply.
                                           file suit in court challenging this rule.               § 56.40 Grading requirements of shell
                                                                                                   eggs identified with grademarks.                      DATES:   Effective September 19, 2016.
                                           Paperwork Reduction Act                                                                                       FOR FURTHER INFORMATION CONTACT:
                                                                                                   *     *      *    *     *
                                              In accordance with the Paperwork                                                                           Jennie M. Varela, Marketing Specialist,
                                           Reduction Act of 1995 (44 U.S.C. 3501                     (c) * * *                                           or Christian D. Nissen, Regional
                                           et seq.), OMB has approved the                            (2) Not possess any undesirable odors               Director, Southeast Marketing Field
                                           information collection and                              or flavors;                                           Office, Marketing Order and Agreement
                                           recordkeeping requirements included in                    (3) Not have previously been shipped                Division, Specialty Crops Program,
                                           this final rule, and there are no new                   for retail sale;                                      AMS, USDA; Telephone: (863) 324–
                                           requirements. The assigned OMB                                                                                3375, Fax: (863) 291–8614, or Email:
                                           control number is 0581–0128, as                           (4) Not originate from a layer house                Jennie.Varela@ams.usda.gov or
                                           approved on July 8, 2014.                               environment determined positive for the               Christian.Nissen@ams.usda.gov.
                                              AMS is committed to compliance                       presence of Salmonella Enteritidis (SE),                Small businesses may request
                                           with the Government Paperwork                           unless the eggs from the layer house                  information on complying with this
Lhorne on DSK30JT082PROD with RULES




                                           Elimination Act, which requires                         have been sampled and have tested                     regulation by contacting Richard Lower,
                                           government agencies in general to                       negative for the presence of SE in the                Marketing Order and Agreement
                                           provide the public the option of                        eggs; and                                             Division, Specialty Crops Program,
                                           submitting information or transacting                     (5) Not originate from eggs testing                 AMS, USDA, 1400 Independence
                                           business electronically to the maximum                  positive for SE, or not have been subject             Avenue SW., STOP 0237, Washington,
                                           extent possible.                                        to a product recall.                                  DC 20250–0237; Telephone: (202) 720–


                                      VerDate Sep<11>2014   13:04 Sep 15, 2016   Jkt 238001   PO 00000   Frm 00002   Fmt 4700   Sfmt 4700   E:\FR\FM\16SER1.SGM   16SER1


                                                            Federal Register / Vol. 81, No. 180 / Friday, September 16, 2016 / Rules and Regulations                                      63677

                                           2491, Fax: (202) 720–8938, or Email:                    on hand at the end of the crop year. The              production, and the Board
                                           Richard.Lower@ams.usda.gov.                             order refers to this volume as carry-out              recommended a release of 20 million
                                           SUPPLEMENTARY INFORMATION: This final                   inventory. This section currently                     pounds, that handler would be
                                           rule is issued under Marketing Order                    specifies, in part, that the Board can                authorized to release one million
                                           No. 930, as amended (7 CFR part 930),                   consider a carry-out inventory of up to               pounds of established reserves (.05 X 20
                                           regulating the handling of tart cherries                20 million pounds, or another amount                  million). If a handler receives a release
                                           grown in the States of Michigan, New                    with the approval of the Secretary. This              larger than what they have in the
                                           York, Pennsylvania, Oregon, Utah,                       rule amends Section 930.151 to increase               primary reserve, the excess amount
                                           Washington, and Wisconsin, hereinafter                  the maximum carry-out volume                          would be reapportioned to those
                                           referred to as the ‘‘order.’’ The order is              available when calculating optimum                    handlers with remaining primary
                                           effective under the Agricultural                        supply from 20 million pounds to 100                  reserve. If the handler in the scenario
                                           Marketing Agreement Act of 1937, as                     million pounds.                                       above had only 750,000 pounds in the
                                           amended (7 U.S.C. 601–674), hereinafter                    Section 930.54 of the order governs                primary reserve, the remaining 250,000
                                           referred to as the ‘‘Act.’’                             the use or disposition of inventory                   pounds would be reallocated to those
                                              The Department of Agriculture                        reserve cherries. Under this authority,               handlers who still have inventory in the
                                           (USDA) is issuing this rule in                          the Board can recommend to the                        primary reserve.
                                           conformance with Executive Orders                       Secretary that a portion or all of                      The committee that reviewed the
                                           12866, 13563, and 13175.                                inventory reserve cherries be released if             procedures for releasing restricted
                                                                                                   there is not sufficient fruit on the market           inventory from the reserves recognized
                                              This final rule has been reviewed
                                                                                                   to meet commercial demand. Sections                   that inventory reserves can be
                                           under Executive Order 12988, Civil
                                                                                                   930.55 and 930.57 outline the                         accumulated over a period of years.
                                           Justice Reform. This rule is not intended
                                                                                                   provisions and requirements of the                    Therefore, the committee agreed
                                           to have retroactive effect.
                                                                                                   primary and secondary reserves,                       releases should be based on the average
                                              The Act provides that administrative
                                                                                                   respectively. Further, no cherries in the             amount handled during the three
                                           proceedings must be exhausted before
                                                                                                   secondary reserve may be released until               previous crop years, rather than using a
                                           parties may file suit in court. Under
                                                                                                   all cherries in the primary reserve have              year-to-year basis. The existing release
                                           section 608c(15)(A) of the Act, any
                                                                                                   been released. This rule creates section              procedures were crafted by the Board
                                           handler subject to an order may file
                                                                                                   930.154 to establish procedures for                   through a series of actions in past years
                                           with USDA a petition stating that the                   releasing inventory from reserves.                    and meetings. However, the procedures
                                           order, any provision of the order, or any                  When volume regulation is in place,                were not codified in the rules and
                                           obligation imposed in connection with                   the restricted portion of the crop is                 regulations under the order. This rule
                                           the order is not in accordance with law                 either held in reserve by handlers or can             adds the inventory release procedures to
                                           and request a modification of the order                 be sold for exempt uses as authorized in              the regulations.
                                           or to be exempted therefrom. A handler                  the rules and regulations of the order.                 This recommendation was also
                                           is afforded the opportunity for a hearing               Reserves can be held over multiple crop               thought to be the most equitable way to
                                           on the petition. After the hearing, USDA                years and are released when there is a                conduct releases. One Board member
                                           would rule on the petition. The Act                     shortfall in supply. While the Board                  believed the releases should come from
                                           provides that the district court of the                 maintains record of the volume in                     the current year’s reserves prior to
                                           United States in any district in which                  reserve, handlers maintain ownership of               releasing from existing reserves, and did
                                           the handler is an inhabitant, or has his                the reserve fruit.                                    not support the recommendation.
                                           or her principal place of business, has                    All inventory reserves were released               However, the Board recognized that
                                           jurisdiction to review USDA’s ruling on                 to meet demand following a crop                       during the crop year, complete
                                           the petition, provided an action is filed               disaster in 2012. The following year, the             information on reserves and shipment
                                           not later than 20 days after the date of                industry was still recovering and the                 data would not be available. Thus, the
                                           the entry of the ruling.                                Board did not recommend a volume                      Board recommended codifying
                                              This final rule adds inventory release               regulation. When the Board                            inventory release procedures as
                                           procedures and revises the optimum                      recommended a volume regulation for                   recommended by the committee. The
                                           supply and exemption provisions under                   the 2014–15 season to the Secretary, and              Board supported the recommendation
                                           the order. This rule establishes                        cherries were again being added to the                by a vote of 17–1. This rule adds a new
                                           procedures for releasing inventory from                 reserve, the Board established a                      Section 930.154 to the regulations to
                                           reserves and increases the maximum                      committee to review the procedures for                establish procedures for releasing
                                           carry-out volume available when                         releasing restricted inventory from                   inventory from reserves.
                                           calculating optimum supply from 20                      reserves. The committee recommended                     In addition to reviewing inventory
                                           million pounds to 100 million pounds.                   to the Board that the procedures as                   release procedures, the Board discussed
                                           These changes provide clear procedures                  previously developed by the Board be                  changes to some of its practices
                                           should an inventory release be                          maintained, and that any release should               regarding calculation of optimum
                                           necessary and provides more flexibility                 first come from inventory currently in                supply. Optimum supply is defined as
                                           when calculating optimum supply. The                    the primary reserve and then from any                 the average free sales of the prior three
                                           Board voted to recommend these                          cherries designated for reserve from the              years plus desirable carry-out inventory.
                                           changes to the Secretary at its meeting                 current season if necessary.                          Desirable carry-out is the amount of
                                           on June 25, 2015.                                          Under these procedures, once the                   fruit needed by the industry to be
                                              Section 930.50 prescribes procedures                 additional volume needed for release is               carried into the succeeding crop year to
                                           for calculating an optimum supply                       established, the release should be                    meet marketing demand until the new
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                                           based on sales history to determine free                apportioned among handlers based on                   crop is available. Desirable carry-out is
                                           and restricted percentages under                        each handler’s prior three-year average               set each year by the Board after
                                           volume regulation. As part of the                       of volume handled as a percentage of                  considering market circumstances and
                                           process, the Board is required to                       the industry’s three-year average. For                needs. Section 930.50(a) currently
                                           determine the volume of fruit they                      example, if a handler handled five                    specifies that desirable carry-out can
                                           anticipate would be necessary to have                   percent of the previous three years’                  range from 0 to a maximum of 20


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                                           63678            Federal Register / Vol. 81, No. 180 / Friday, September 16, 2016 / Rules and Regulations

                                           million pounds, but also authorizes the                    The purpose of the RFA is to fit                   had in place for many years. The
                                           Board to establish an alternative carry-                regulatory actions to the scale of                    expanded carry-out upper limit will
                                           out figure with the approval of the                     businesses subject to such actions in                 allow the Board additional flexibility in
                                           Secretary.                                              order that small businesses will not be               meeting market needs without
                                              Since the promulgation of the order,                 unduly or disproportionately burdened.                additional rulemaking.
                                           the industry has seen new products and                  Marketing orders issued pursuant to the                  The benefits of this rule are not
                                           new segments emerge, such as dried tart                 Act, and rules issued thereunder, are                 expected to be disproportionately
                                           cherries. As a result, at the end of a                  unique in that they are brought about                 greater or less for small handlers or
                                           season there are multiple product lines                 through group action of essentially                   producers than for larger entities.
                                           that need to be supplied with tart                      small entities acting on their own                       The Board discussed alternatives to
                                           cherries before the next harvest, which                 behalf.                                               these changes to the order, including
                                           has impacted desirable carry-out.                          There are approximately 600                        releasing reserves from the current crop
                                           Desirable carry-out is the amount of                    producers of tart cherries in the                     year or releasing cherries in the order in
                                           fruit needed by the industry to be                      regulated area and approximately 40                   which the fruit was put into reserve. A
                                           carried into the succeeding crop year to                handlers of tart cherries who are subject             committee was established to review the
                                           meet marketing demand until the new                     to regulation under the order. Small                  reserve procedures, and it proposed
                                           crop is available.                                      agricultural producers are defined by                 using a three-year average percentage for
                                              In 2014, the Board used its authority                the Small Business Administration                     each handler and releasing the previous
                                           to recommend to the Secretary a carry-                  (SBA) as those having annual receipts of              crop years’ reserves. The Board agreed
                                           out volume above the order-prescribed                   less than $750,000 and small                          that the committee’s recommendation
                                           20 million pound maximum for the                        agricultural service firms have been                  would be the most equitable solution.
                                           2014–2015 crop year. At that time, the                  defined as those having annual receipts               Regarding the carry-out limit, the Board
                                                                                                   of less than $7,500,000 (13 CFR                       considered not recommending a
                                           Board estimated it was necessary to
                                                                                                   121.201).                                             permanent change. However, the Board
                                           have 50 million pounds available at the
                                                                                                      According to the National
                                           end of the crop year to fulfill the needs                                                                     anticipates needing more than 20
                                                                                                   Agricultural Statistics Service and
                                           of the industry. In discussing volume                                                                         million pounds of carry-out for the
                                                                                                   Board data, the average annual grower
                                           regulation for the 2015–2016 crop year,                                                                       foreseeable future. A member suggested
                                                                                                   price for tart cherries during the 2014–
                                           the Board agreed an increased carry-out                                                                       changing the motion to 80 million
                                                                                                   15 crop year was $0.35 per pound, and
                                           was again necessary and recommended                                                                           pounds, but that suggestion did not
                                                                                                   total utilization was around 300 million
                                           to the Secretary a 55 million pound                                                                           receive support. Thus, the suggested
                                                                                                   pounds. Therefore, average receipts for
                                           carry-out when calculating the optimum                                                                        alternatives were rejected.
                                                                                                   tart cherry producers were around
                                           supply.                                                 $175,800, well below the SBA threshold                   In accordance with the Paperwork
                                              In order to facilitate future carry-out              for small producers. In 2014, The Food                Reduction Act of 1995 (44 U.S.C.
                                           needs without engaging in annual                        Institute estimated an f.o.b. price of                Chapter 35), the order’s information
                                           rulemaking, the Board recommended                       $0.96 per pound for frozen tart cherries,             collection requirements have been
                                           permanently increasing the maximum                      which make up the majority of                         previously approved by the Office of
                                           carry-out to 100 million pounds. Some                   processed tart cherries. Using this data,             Management and Budget (OMB) and
                                           members considered the 100 million                      average annual handler receipts were                  assigned OMB No. 0581–0177, (Tart
                                           pound upper limit to be too high, and                   about $6.9 million, which is also below               Cherries Grown in the States of
                                           voted against the recommendation.                       the SBA threshold for small agricultural              Michigan, New York, Pennsylvania,
                                           However, this action only increases the                 service firms. Assuming a normal                      Oregon, Utah, Washington, and
                                           available range for the carry-out value                 distribution, the majority of producers               Wisconsin). No changes in those
                                           from 0 to 20 million pounds to 0 to 100                 and handlers of tart cherries may be                  requirements as a result of this action
                                           million. This change will provide the                   classified as small entities.                         are necessary. Should any changes
                                           Board with additional flexibility when                     This final rule creates § 930.154 of the           become necessary, they would be
                                           considering the carry-out, but in itself                rules and regulations, establishing                   submitted to OMB for approval.
                                           does not establish a carry-out amount.                  procedures for release of inventory                      Accordingly, this action will not
                                           The Board will still discuss and                        reserves. This final rule also revises                impose any additional reporting or
                                           recommend a desirable carry-out value                   § 930.151 to allow the Board to consider              recordkeeping requirements on either
                                           that represents current industry needs                  a carry-out of up to 100 million pounds               small or large tart cherry handlers. As
                                           each crop year. Consequently, the Board                 when calculating optimum supply.                      with all Federal marketing order
                                           supported the recommendation by a                       These changes are intended to provide                 programs, reports and forms are
                                           vote of 12–5. This rule amends section                  clear direction in the event an inventory             periodically reviewed to reduce
                                           930.151 of the regulations to increase                  release becomes necessary and allow the               information requirements and
                                           the maximum carry-out volume possible                   Board to be more responsive to tart                   duplication by industry and public
                                           when calculating optimum supply from                    cherry market demand. The authority                   sector agencies.
                                           20 million pounds to 100 million                        for these actions is provided in                         As noted in the initial regulatory
                                           pounds.                                                 §§ 930.50 and 930.54 of the order.                    flexibility analysis, USDA has not
                                                                                                      It is not anticipated that this action             identified any relevant Federal rules
                                           Final Regulatory Flexibility Analysis                                                                         that duplicate, overlap or conflict with
                                                                                                   will impose additional costs on
                                              Pursuant to requirements set forth in                handlers or growers, regardless of size.              this final rule.
                                           the Regulatory Flexibility Act (RFA) (5                 The implemented changes are                              AMS is committed to complying with
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                                           U.S.C. 601–612), the Agricultural                       administrative in nature and intended to              the E-Government Act to promote the
                                           Marketing Service (AMS) has                             align the provisions of the order with                use of the internet and other
                                           considered the economic impact of this                  current industry practices. The addition              information technologies to provide
                                           action on small entities. Accordingly,                  of rules and regulations regarding                    increased opportunities for citizen
                                           AMS has prepared this final regulatory                  inventory releases is a codification of               access to Government information and
                                           flexibility analysis.                                   administrative procedures the Board has               services, and for other purposes.


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                                                            Federal Register / Vol. 81, No. 180 / Friday, September 16, 2016 / Rules and Regulations                                       63679

                                              The Board’s meeting was widely                         For the reasons set forth in the                    DEPARTMENT OF AGRICULTURE
                                           publicized throughout the tart cherry                   preamble, 7 CFR part 930 is amended as
                                           industry and all interested persons were                follows:                                              Agricultural Marketing Service
                                           invited to attend and participate in
                                           Board deliberations on all issues. Like                 PART 930—TART CHERRIES GROWN                          7 CFR Part 983
                                           all Board meetings, the June 25, 2015,                  IN THE STATES OF MICHIGAN, NEW                        [Docket No. AMS–SC–16–0076 SC16–983–
                                           meeting was a public meeting and all                    YORK, PENNSYLVANIA, OREGON,                           2 IR]
                                           entities, both large and small, were able               UTAH, WASHINGTON, AND
                                           to express views on these issues.                       WISCONSIN                                             Pistachios Grown in California,
                                              A proposed rule concerning this                                                                            Arizona, and New Mexico; Decreased
                                           action was published in the Federal                     ■ 1. The authority citation for 7 CFR                 Assessment Rate
                                           Register on June 15, 2016 (81 FR 38975).                part 930 continues to read as follows:
                                           Copies of the rule were mailed or sent                                                                        AGENCY:  Agricultural Marketing Service,
                                           via facsimile to all Board members and                      Authority: 7 U.S.C. 601–674.                      USDA.
                                           tart cherry handlers. Finally, the rule                                                                       ACTION: Interim rule with request for
                                                                                                   ■ 2. In § 930.151:
                                           was made available through the internet                                                                       comments.
                                           by USDA and the Office of the Federal                   ■ a. Designate the current paragraph as
                                           Register. A 30-day comment period                       paragraph (a); and                                    SUMMARY:   This rule implements a
                                           ending July 15, 2016, was provided to                                                                         recommendation from the
                                                                                                   ■ b. Add a new paragraph (b) to read as
                                           allow interested persons to respond to                                                                        Administrative Committee for
                                                                                                   follows:
                                           the proposal.                                                                                                 Pistachios (Committee) for a decrease in
                                                                                                   § 930.151    Desirable carry-out inventory.           the assessment rate established for the
                                              One comment was received during
                                                                                                                                                         2016–17 and subsequent production
                                           the comment period in response to the                     (a) * * *                                           years from $0.0035 to $0.0010 per
                                           proposal. The commenter is an
                                                                                                     (b) Beginning with the crop year                    pound of assessed weight pistachios
                                           individual who supports the proposed
                                                                                                   starting July 1, 2016, for the purposes of            handled under the marketing order
                                           action. The commenter described the
                                                                                                   determining an optimum supply                         (order). The Committee locally
                                           proposed changes as positive for the
                                                                                                   volume, the Board may recommend a                     administers the order and is comprised
                                           industry. Accordingly, no changes will
                                                                                                   desirable carry-out inventory not to                  of producers and handlers of pistachios
                                           be made to the rule as proposed, based
                                                                                                   exceed 100 million pounds.                            operating within the area of production.
                                           on the comment received.
                                                                                                                                                         Assessments upon pistachio handlers
                                              A small business guide on complying                  ■ 3. Section 930.154 is added to read as              are used by the Committee to fund
                                           with fruit, vegetable, and specialty crop               follows:                                              reasonable and necessary expenses of
                                           marketing agreements and orders may
                                                                                                                                                         the program. The production year
                                           be viewed at: http://www.ams.usda.gov/                  § 930.154    Release of inventory reserve
                                                                                                   cherries.
                                                                                                                                                         begins September 1 and ends August 31.
                                           rules-regulations/moa/small-businesses.
                                                                                                                                                         The assessment rate will remain in
                                           Any questions about the compliance                        (a) As provided in § 930.54, the Board              effect indefinitely unless modified,
                                           guide should be sent to Richard Lower                   may recommend a release of a portion                  suspended, or terminated.
                                           at the previously mentioned address in
                                                                                                   or all of the primary and/or secondary                DATES: Effective September 19, 2016;
                                           the FOR FURTHER INFORMATION CONTACT
                                                                                                   reserve cherries. The total available                 Comments received by November 15,
                                           section.
                                                                                                   reserves will be determined at the                    2016 will be considered prior to
                                              After consideration of all relevant
                                                                                                   beginning of the crop year. The primary               issuance of a final rule.
                                           matter presented, including the
                                           information and recommendation                          reserve as defined in §§ 930.55 and                   ADDRESSES: Interested persons are
                                           submitted by the Board and other                        930.150 must be depleted before the                   invited to submit written comments
                                           available information, it is hereby found               secondary reserve can be released. If a               concerning this rule. Comments must be
                                           that this rule, as hereinafter set forth,               release is recommended, the                           sent to the Docket Clerk, Marketing
                                           will tend to effectuate the declared                    recommended volume shall be                           Order and Agreement Division,
                                           policy of the Act.                                      apportioned to handlers on the basis of               Specialty Crops Program, AMS, USDA,
                                              It is further found that good cause                  each handler’s proportion of the total                1400 Independence Avenue SW., STOP
                                           exists for not postponing the effective                 volume handled in the preceding three                 0237, Washington, DC 20250–0237; Fax:
                                           date of this rule until 30 days after                   crop years.                                           (202) 720–8938; or Internet: http://
                                           publication in the Federal Register (5                    (b) If a handler has less volume in                 www.regulations.gov. Comments should
                                           U.S.C. 553) because handlers are already                reserve than is apportioned, the excess               reference the docket number and the
                                           putting cherries into reserve. This action                                                                    date and page number of this issue of
                                                                                                   volume shall be reapportioned to those
                                           also needs to be in place before the                                                                          the Federal Register and will be
                                                                                                   who still have volume in reserve until
                                           Board meets in September to discuss                                                                           available for public inspection in the
                                                                                                   the total release is complete.                        Office of the Docket Clerk during regular
                                           establishing volume control, including
                                           determining an appropriate carry-out                      Dated: September 12, 2016.                          business hours, or can be viewed at:
                                           figure. Further, handlers are aware of                  Elanor Starmer,                                       http://www.regulations.gov. All
                                           this rule, which was recommended at a                   Administrator, Agricultural Marketing                 comments submitted in response to this
                                           public meeting. Also, a 30-day comment                  Service.                                              rule will be included in the record and
                                           period was provided for in the proposed                 [FR Doc. 2016–22258 Filed 9–15–16; 8:45 am]           will be made available to the public.
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                                           rule.                                                                                                         Please be advised that the identity of the
                                                                                                   BILLING CODE 3410–02–P
                                                                                                                                                         individuals or entities submitting
                                           List of Subjects in 7 CFR Part 930                                                                            comments will be made public on the
                                             Marketing agreements, Reporting and                                                                         Internet at the address provided above.
                                           recordkeeping requirements, Tart                                                                              FOR FURTHER INFORMATION CONTACT:
                                           cherries.                                                                                                     Peter R. Sommers, Marketing Specialist,


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Document Created: 2016-09-16 00:24:40
Document Modified: 2016-09-16 00:24:40
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionRules and Regulations
ActionFinal rule.
DatesEffective September 19, 2016.
ContactJennie 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: [email protected] or [email protected]
FR Citation81 FR 63676 
CFR AssociatedMarketing Agreements; Reporting and Recordkeeping Requirements and Tart Cherries

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