Proposed Rule2021-17234
Tart Cherries Grown in the States of Michigan, New York, Pennsylvania, Oregon, Utah, Washington, and Wisconsin; Changes to Reporting Requirements
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Published
August 13, 2021
Issuing agencies
Agriculture DepartmentAgricultural Marketing Service
Abstract
This proposed rule would implement a recommendation from the Cherry Industry Administrative Board to revise reporting requirements prescribed under the Federal marketing order regulating the handling of tart cherries. This action would modify reporting requirements to include information necessary to determine the portion of total inventory that is greater than five years old.
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<title>Federal Register, Volume 86 Issue 154 (Friday, August 13, 2021)</title>
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[Federal Register Volume 86, Number 154 (Friday, August 13, 2021)]
[Proposed Rules]
[Pages 44647-44650]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-17234]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 930
[Doc. No. AMS-SC21-0026; SC21-930-1 PR]
Tart Cherries Grown in the States of Michigan, New York,
Pennsylvania, Oregon, Utah, Washington, and Wisconsin; Changes to
Reporting Requirements
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would implement a recommendation from the
Cherry Industry Administrative Board to revise reporting requirements
prescribed under the Federal marketing order regulating the handling of
tart cherries. This action would modify reporting requirements to
include information necessary to determine the portion of total
inventory that is greater than five years old.
DATES: Comments must be received by September 13, 2021.
ADDRESSES: Interested persons are invited to submit written comments
concerning this proposal. Comments must be submitted via the internet
at: <a href="http://www.regulations.gov">http://www.regulations.gov</a>. All comments should reference the
document number and the date and page number of this issue of the
Federal Register. All comments submitted in response to this proposed
rule will be included in the record and 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: Thomas F. Nalepa, 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: <a href="/cdn-cgi/l/email-protection#47132f282a26346909262b223726073234232669202831"><span class="__cf_email__" data-cfemail="f5a19d9a989486dbbb9499908594b580869194db929a83">[email protected]</span></a> or
<a href="/cdn-cgi/l/email-protection#1f5c776d766c6b767e713151766c6c7a715f6a6c7b7e31787069"><span class="__cf_email__" data-cfemail="e8ab809a819b9c818986c6a6819b9b8d86a89d9b8c89c68f879e">[email protected]</span></a>.
Small businesses may request information on complying with this
[[Page 44648]]
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) 720-2491, or
Email: <a href="/cdn-cgi/l/email-protection#ce9ca7ada6afbcaae082a1b9abbc8ebbbdaaafe0a9a1b8"><span class="__cf_email__" data-cfemail="1f4d767c777e6d7b315370687a6d5f6a6c7b7e31787069">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: This action, pursuant to 5 U.S.C. 553,
proposes an amendment to regulations issued to carry out a marketing
order as defined in 7 CFR 900.2(j). This proposed rule is issued under
Marketing Agreement and Order No. 930, (7 CFR part 930), regulating the
handling of tart cherries produced in the States of Michigan, New York,
Pennsylvania, Oregon, Utah, Washington, and Wisconsin. Part 930
(referred to as 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 Cherry Industry
Administrative Board (Board or CIAB) locally administers the Order and
is comprised of producers and handlers of tart cherries operating
within the production area, and a public member.
The Department of Agriculture (USDA) is issuing this proposed rule
in conformance with Executive Orders 12866 and 13563. Executive Orders
12866 and 13563 direct agencies to assess all costs and benefits of
available regulatory alternatives and, if regulation is necessary, to
select regulatory approaches that maximize net benefits (including
potential economic, environmental, public health and safety effects,
distributive impacts and equity). Executive Order 13563 emphasizes the
importance of quantifying both costs and benefits, reducing costs,
harmonizing rules, and promoting flexibility. This action falls within
a category of regulatory actions that the Office of Management and
Budget (OMB) exempted from Executive Order 12866 review.
This proposed rule has been reviewed under Executive Order 13175--
Consultation and Coordination with Indian Tribal Governments, which
requires agencies to consider whether their rulemaking actions would
have tribal implications. Agricultural Marketing Service (AMS) has
determined that this proposed rule is unlikely to have substantial
direct effects on one or more Indian tribes, on the relationship
between the Federal Government and Indian tribes, or on the
distribution of power and responsibilities between the Federal
Government and Indian tribes.
This proposed rule has been reviewed under Executive Order 13175--
Consultation and Coordination with Indian Tribal Governments, which
requires agencies to consider whether their rulemaking actions would
have tribal implications. Agricultural Marketing Service (AMS) has
determined that this proposed rule is unlikely to have substantial
direct effects on one or more Indian tribes, on the relationship
between the Federal Government and Indian tribes, or on the
distribution of power and responsibilities between the Federal
Government and Indian tribes.
This proposed rule 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. Such
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 action would revise the reporting requirements to include the
sales and inventory information necessary to segregate between
inventory that is five years old from inventory is less than five years
old. This modification would allow the industry to better estimate how
much inventory on-hand is still marketable and help ensure relevant
inventory information is available when considering volume
restrictions. This proposal was unanimously recommended by the Board at
its February 25, 2021 meeting.
Section 930.70 of the Order provides, in part, authority to require
handlers to submit reports of inventory. Section 930.70 further
provides, with the approval of the Secretary, authority for the Board
to collect other such information from handlers as needed to perform
its duties. This proposed rule would utilize this authority to
establish a new Sec. 930.170 under the rules and regulations of the
Order. This new section would codify existing inventory reporting
requirements and require handlers of tart cherries to annually report
inventory that exceeds five years of age.
During Board meetings held on June 25, 2020 and January 14, 2021,
the Board received industry feedback about enhancing tart cherry
inventory transparency and developing a clearer understanding of the
age of product in inventory. In these discussions, several members
expressed concern that some of the inventory currently being reported
may be product beyond its saleable date, which could create a
misleading view of the actual amount of tart cherries available for
market.
Currently, handlers submit inventory reports four times per year
for reporting periods ending November 30, February 28, May 31, and June
30, with reports for those periods due on December 10, March 10, June
10, and July 10, respectively. This information is submitted on CIAB
Form 3 (Sales/Inventory Report) as previously approved by OMB and
assigned OMB No. 0581-0177. The report includes information on the
type, form, and the amount of product, but does not include data
regarding the age of products in inventory. The Board agreed that
existing reporting requirements may limit their knowledge of the
industry's on-hand tart cherry inventory and formed a subcommittee to
review inventory reporting requirements.
The Board reviewed the subcommittee findings at the January 14,
2021, meeting, and expressed support for the subcommittee's
recommendation to adjust reporting requirements to account for
inventory greater than five years old. The Board noted a five-year
inventory cutoff date was appropriate because this period would
sufficiently accommodate lifespans of nearly all existing products
likely to be inventoried. Board members agreed having this additional
information regarding the age of inventory would be beneficial.
The Order includes the authority for establishing volume
regulation, and one element considered during those discussions is the
amount of tart cherries available in inventory. The regulated season
runs from July 1 through June 30. The current reporting aggregates the
industry's inventory data and does not separately track older
inventory, and this compilation could provide an incomplete view of the
industry's marketable inventory. By segregating the accounting of
inventory older than five years, the Board would have more precise
information regarding inventory when discussing market issues.
[[Page 44649]]
As part of their discussions, the Board also provided clarifying
information on how to calculate inventory age for reporting purposes.
To determine product age, the date used would either be the date of
harvest and processing or date of remanufacturing. Board members
emphasized the starting point for calculating inventory age would be
reset if the inventory were remanufactured into a new product.
For example, if a handler was completing their routine inventory
report on May 31, 2021, any tart cherries harvested in 2014 or earlier
would be considered over five years old. Although cherries harvested in
2014 would be considered part of the 2014-15 harvest year, based on the
date they were harvested and processed, they would be greater than five
years old for reporting purposes by the end of May 2021. If cherries
harvested in 2014 were remanufactured into another product, the date of
remanufacturing would become the date used for calculating the age for
inventory purposes. The Board stated this is the same dating procedure
as used for calculating the age of cherries held in reserve under
volume regulation. Using these dates, inventory older than five years
would be reported each May on the modified report.
Several members commented the age of inventory is already recorded
by handlers as part of their normal business activities, and as a
result, this requirement would not be overly burdensome. Members
further expressed the separate reporting of inventory over five years
old would, at most, require a few extra minutes of a handler's time and
would only be required once annually.
Consequently, the Board voted to add a section to the inventory
report to include the total volume of inventory over five years old.
The Board recommended including this information on the inventory
report for the reporting period ending May 31 due on June 10. The Board
agreed this was the appropriate time to have the information available
as this report would be used to develop the industry inventory data
when the Board meets in June to consider the need to establish a volume
control recommendation for the coming season.
This proposed rule would add sales and inventory report
requirements to administrative provisions under the Order and would
require handlers to report inventory older than five years. These
reporting requirements would be added in a new Sec. 930.170 and would
include information on the handler submitting the form; the reporting
period; beginning inventory for each product; the amount packed for
each product; sales; information on transfers of product between
handlers, including the name of the selling handler, name of the
receiving handler, and form type, number of units; information on
product repacked or remanufactured during the reporting period,
including form type and number of units of source products and form
type and number of units of end products; and information on the amount
of ending inventory for each product, including the amount of ending
inventory for each product over five years old. Only the May 31 report
would require handlers to record amounts of inventories over five years
old.
This information would support the industry's ability to make
marketing decisions by providing more descriptive information than
currently available when evaluating the need for volume regulation.
Besides providing important information for industry reports regarding
sales and inventory, this action would also help ensure compliance with
this reporting requirement by including it in the rules and regulations
under the Order.
Initial Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA) (5 U.S.C. 601-612), AMS has considered the economic impact of
this proposed rule 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 are unique in that they are brought about through
group action of essentially small entities acting on their own behalf.
There are approximately 450 producers of tart cherries in the
regulated area and approximately 40 handlers who are subject to the
Order. Small agricultural growers are defined by the Small Business
Administration as those having annual receipts less than $1,000,000,
and small agricultural service firms are defined as those whose annual
receipts are less than $30,000,000 (13 CFR 121.201).
According to information from the National Agricultural Statistics
Service (NASS) and Board data, the average annual grower price for tart
cherries during the 2019-2020 season was approximately $0.15 per pound.
With total utilization at 236.34 million pounds, the total 2019-20 crop
value is estimated at $35.45 million (236.34 million pounds times
$0.15). Dividing the crop value by the estimated number of producers
(450) yields an estimated average receipt per producer of $78,778. This
is well below the SBA threshold for small producers.
A free-on-board (FOB) price of $0.82 per pound for processed tart
cherries was derived from USDA's 2020 purchases of dried tart cherries
at an average price of $4.11 per pound. The dried cherry price was
converted to a raw product equivalent price at an industry recognized
ratio of five to one. Based on utilization, this price represents a
good estimate of the price for processed cherries. Multiplying this FOB
price ($0.82) by total utilization of 236.34 million pounds results in
an estimated handler-level tart cherry value of $193.8 million.
Dividing this figure by the number of handlers (40) yields estimated
average annual handler receipts of $4.84 million, which is 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 rule would add the sales and inventory report
requirements to the administrative provisions under the Order and would
require handlers to report inventory older than five years. This
proposed rule would establish a new Sec. 930.170 under the rules and
regulations of the Order. The authority for this proposed action is
provided in Sec. 930.70 of the Order.
AMS anticipates that this proposed rule would impose minimal, if
any, additional costs on handlers or growers, regardless of their size.
This action would impose a small increase in the reporting burden for
each tart cherry handler. However, because handlers currently maintain
data about the age of their inventory in the regular course of
business, they should be able to readily access this information.
Consequently, any additional costs associated with this change would be
minimal (not significant) and apply equally to all handlers.
This proposed action should also benefit the entire industry by
providing more precise information on tart cherry product in inventory.
This information would provide accurate information regarding available
inventory and help with marketing and planning for the industry.
Further, having these requirements codified under the rules and
regulations would also benefit compliance enforcement of this reporting
requirement. The benefits of this rule are expected to be equally
available to all tart cherry growers and handlers, regardless of their
size.
[[Page 44650]]
The Board discussed other alternatives to this proposed action,
including reporting inventory older than three years for the purposes
of classifying the age of inventory, reporting the age of inventory
quarterly, and leaving the current reporting requirements unchanged.
When discussing alternatives, the Board concluded a three-year
timeframe would not sufficiently cover the normal lifespan of all
products held in inventory. The Board also commented that quarterly
reporting of older inventory was unnecessary because this information
would be most useful at the end of the season, prior to making annual
volume restriction recommendations. Therefore, the 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 OMB and assigned OMB No. 0581-0177, Tart
Cherries Grown in the States of Michigan, New York, Pennsylvania,
Oregon, Utah, Washington, and Wisconsin. This proposed rule would
require changes to the Board's existing CIAB Form 3. However, changes
are minor and the currently approved burden for the form would be
minimally increased by the proposed changes. The revised form has been
submitted to OMB for approval.
As with all Federal marketing order programs, reports and forms are
periodically reviewed to reduce information requirements and
duplication by industry and public sector agencies. USDA has not
identified any relevant Federal rules that duplicate, overlap, or
conflict with this proposed rule.
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.
Further, Board meetings are widely publicized throughout the tart
cherry industry. Meetings are public and virtual or in a hybrid style
with participants having a choice whether to attend in person or
virtually. All interested persons are invited to attend meetings and
participate in Board deliberations on all issues. Board meetings on
June 25, 2020, January 14, 2021, and February 25, 2021, were each
conducted via videoconference. All entities, both large and small, were
able to express views on this issue. Finally, interested persons are
invited to submit comments on this proposed rule, including regulatory
and information collection impacts of this proposed action on small
businesses.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at: <a href="http://www.ams.usda.gov/rules-regulations/moa/small-businesses">http://www.ams.usda.gov/rules-regulations/moa/small-businesses</a>. Any questions
about the compliance guide should be sent to Richard Lower 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. All written comments timely received will be
considered before a final determination is made on this matter.
List of Subjects in 7 CFR Part 930
Marketing agreements, Reporting and recordkeeping requirements,
Tart cherries.
For 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. Add Sec. 930.170 to read as follows:
Sec. 930.170 Sales and Inventory Report.
(a) Handlers shall submit to the Board a sales and inventory report
for the reporting period ending November 30, February 28, May 31, and
June 30 of each crop year. Handlers shall file such reports by the
tenth day of the month following the reporting period, December 10,
March 10, June 10, and July 10, respectively. Should the filing due
date fall on a Saturday, Sunday, or federal holiday, reports are due by
the first business day following the due date. Such reports shall be
reported to the Board on CIAB Form 3 and include:
(1) The name, address, telephone number, and identifying number of
the handler;
(2) The reporting period covered by the report;
(3) The form, type, and unit size for each product;
(4) The total beginning of year inventory for each product;
(5) The packed amount for each product;
(6) Total inter-handler transfers, and total volume repackaged or
remanufactured for each product, year-to-date;
(7) Total sales outside the industry for each product, year-to-
date;
(8) The amount of ending inventory for each product, year-to-date;
(9) List of inter-handler transfers, both in and out, during the
reporting period including:
(i) Name of the selling handler;
(ii) Name of the receiving handler; and
(iii) Form, type, number of units.
(10) List of repacks and remanufactures during the reporting period
including:
(i) Form, type, and number of units of source products; and
(ii) Form, type, and number of units of end products.
(b) The amount of inventory for each product over 5 years old shall
be reported annually on the sales and inventory report for the
reporting period ending May 31. Product age is based on the crop year
in which the current product was processed or remanufactured.
Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2021-17234 Filed 8-12-21; 8:45 am]
BILLING CODE P
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