5. 7 CFR Part 1476--Cranberry Market Loss Assistance Payment Program

    Section 816 of Public Law 106-387 directs the Secretary of
Agriculture to use $20 million of funds of the Commodity Credit
Corporation (CCC) to provide assistance to producers of the 1999 crop
of cranberries. Public Law 106-554 mandated a Government-wide
rescission of 0.22 percent of appropriated funds, reducing the funding
for the Cranberry Market Loss Assistance Payment Program to $19.956
million. This will be the first time since 1959 that the government has
provided financial assistance directly to cranberry growers.
    Recent increases in acreage and yields, while demand has remained
fairly constant, have resulted in a large cranberry surplus. During the
1999 crop year, U.S. cranberry production reached a record high of 6.4
million barrels, which caused the price of cranberries to plummet to an
average price of $17 per barrel, a historical low. The result has been
a tremendous increase in inventory and reduced grower returns. These
extreme market conditions have caused many cranberry growers
difficulty. Steps taken thus far by USDA towards stabilizing prices,
including the purchase of agricultural products containing cranberry
ingredients, have only marginally reduced existing surpluses. A
cranberry marketing order was approved by the Secretary to help reduce
the surplus, but the short-term impact on growers will be negative
unless and until prices for cranberries are restored. There are an
estimated 1,300 cranberry growers in the U.S. representing
approximately 11 states nationwide, producing over 90 percent of
cranberry production in the processed market, with the remainder sold
to the fresh fruit market. Without a significant improvement in the
market price on sales of cranberries, many cranberry producers will not
be able to remain in business.
    Producers of cranberries can receive a cash payment per pound for a
qualifying farm unit's 1999 production of cranberries. Producers will
only be paid on a maximum quantity of 1,600,000 pounds per separate
farm unit, as reported to the Cranberry Marketing Committee, or other
source approved by CCC. Payments will not be subject to administrative
offset, as provided by section 842 of Public Law 106-387.
    To receive cash payments, eligible cranberry producers must (1)
have produced cranberries during the 1999 crop year, (2) not have
received a payment from any other Federal program, other than crop
insurance, for the same loss, (3) be engaged in the business of
producing and marketing agricultural products at the time of
application for cash payment, and (4) apply for cash payments during
the application period for each farm unit.
    Program applications will be mailed to all cranberry growers in the
United States by the Farm Service Agency's (FSA), Price Support
Division (PSD). The names, addresses, and production of cranberry
growers in the United States have been obtained from the Cranberry
Marketing Committee list of producers who marketed cranberries under
the Agricultural Marketing Service's Cranberry Marketing Order for
1999. There are approximately 30 producers in the State of Maine who do
not market under the marketing order who will be identified by CCC and
contacted to make application. In addition, program applications may be
obtained by mail, telephone, or facsimile from the Price Support
Division or obtained via the Internet. The Internet website is located
at www.fsa.usda.gov/dafp/psd/.
    To participate in the program, cranberry producers must complete
the application form and return it by mail to the PSD within the
announced application period. At the close of the application period, a
national per pound payment rate will be determined based on the
factoring of the available funds of $19.956 million divided by the
total pounds of eligible 1999 cranberry production from each applying
farm unit, with no farm exceeding 1,600,000 pounds of cranberry
production. Because outlays for this program are a fixed amount, the
national average payment rate and individual payments can only be
calculated after the total eligible quantity of 1999 cranberry
production has been determined from approved applications.


Cranberry Market Loss Assistance Program

    The principal benefit from the market loss assistance program will
be the approximately $20 million in financial assistance that cranberry
growers receive, which could determine if some of them remain in
business. Individual payments will be based on each grower's
production, with an upper cap of 1.6 million pounds. The per-pound
payment hinges on the total eligible production reported by applicants,
so FSA will be unable to calculate the final rate until about February
2001. Participation will likely be almost universal among eligible
cranberry

[[Page 15176]]

growers as the only requirement is to have produced a 1999 cranberry
crop. Given expected heavy participation and information on how
production is divided among growers provided by USDA's Agricultural
Marketing Service (AMS), FSA's preliminary projection is for a payment
rate on the order of $5 to $7 per barrel. Given that rate, half of the
cranberry growers will receive payments under $10,000 and about 12
percent of the growers will receive the highest payments of around
$90,000.
    The cranberry market loss assistance program could aid some
producers on the brink of insolvency to remain in business but the
effect of this program on the long-run viability of the industry will
be minimal. In fact, if the program encourages overproduction it will
slow structural changes needed to enhance industry viability.
Conversely, program benefits could prove to be synergistic with the two
concurrent programs designed to address oversupply: the imposition of
the cranberry marketing order in 2000 and government purchases of
excess cranberry products.
    For further information, the following individuals may be contacted
regarding the different parts of the Cost/Benefit Assessment:

Cranberry--John Jinkins, 202-720-2100


PART 1476--CRANBERRY MARKET ASSISTANCE PAYMENTS

    22. Add part 1476 to subchapter B of 7 CFR Chapter XIV to read as
follows:

PART 1476--CRANBERRY MARKET LOSS ASSISTANCE PAYMENT PROGRAM

Sec.
1476.1   Applicability.
1476.2   Administration.
1476.3   Definitions.
1476.4   Eligibility.
1476.5   Payment application, time, and method.
1476.6   Applicant payment quantity.
1476.7   Payment rate and cranberry farm unit payment.
1476.8   Offsets.
1476.9   Appeals.
1476.10   Misrepresentation and scheme or device.
1476.11   Estates, trusts, and minors.
1476.12   Death, incompetency, or disappearance.
1476.13   Maintaining records.
1476.14   Refunds; joint and several liability.

    Authority: Sec. 816, Pub. L. 106-387, 14 Stat. 1549; sec.
203(d)(1), Pub. L. 106-224, 7 U.S.C. 1421 note; 15 U.S.C. 714 et
seq.


Sec. 1476.1  Applicability.

    (a) The regulations in this part are applicable to the 1999 crop of
cranberries. These regulations set forth the terms and conditions under
which the Commodity Credit Corporation (CCC) shall provide payments to
cranberry growers who have applied to participate in the Cranberry
Market Loss Assistance Payment Program in accordance with section 816
of Public Law 106-387. Additional terms and conditions are set forth in
the payment application that must be executed by participants to
receive a cranberry payment.
    (b) Payments shall be available only for cranberries produced and
harvested in the United States.


Sec. 1476.2  Administration.

    (a) The Cranberry Market Loss Payment Program shall be administered
under the general supervision of the Executive Vice President, CCC, and
shall be carried out by FSA's Price Support Division (PSD) and Kansas
City Management Office (KCMO).
    (b) The PSD and KCMO and representative and employees thereof, do
not have the authority to modify or waive any of the provisions of the
regulations of this part.
    (c) No provision or delegation of this part to PSD or KCMO shall
preclude the Executive Vice President, CCC, or a designee, from
determining any question arising under the program or from reversing or
modifying any determination made by PSD or KCMO.
    (d) The Executive Vice President, CCC or a designee, may waive or
modify deadlines and other program requirements in cases where lateness
or failure to meet such other requirements do not affect adversely the
operation of the Cranberry Market Loss Assistance Payment Program.
    (e) A representative of CCC may execute the Cranberry Market Loss
Assistance Payment Program applications and related documents only
under the terms and conditions determined and announced by CCC.
    (f) Payment applications and related documents not executed in
accordance with the terms and conditions determined and announced by
CCC, including any purported execution outside of the dates authorized
by CCC, shall be null and void unless the Executive Vice President,
CCC, shall otherwise allow.


Sec. 1476.3  Definitions.

    The definitions set forth in this section shall be applicable for
purposes of administering the Cranberry Market Loss Assistance Payment
Program.
    Agricultural Marketing Service or AMS means the Agricultural
Marketing Service of the Department.
    Application means the Cranberry Market Loss Assistance Program
payment application, CCC.
    Application period means a period, to be announced by CCC, during
which applications for payments under the Cranberry Market Loss
Assistance Payment Program must be received to be considered for
payment.
    Barrel means 100 pounds of stored cranberries.
    Cranberry Marketing Committee means the eight member panel that
administers the Cranberry Marketing Order authorizing volume control
through producer allotments.
    Cranberry Marketing Order means the order regulating the handling
of cranberries grown in Massachusetts, Rhode Island, Connecticut, New
Jersey, Wisconsin, Michigan, Minnesota, Oregon, Washington, and Long
Island in the State of New York. The order is effective under the
Agricultural Marketing Agreement Act of 1937.
    Department or USDA means the United States Department of
Agriculture.
    Farm Unit means a separate and distinct farming operation that
reports independent production information to the Cranberry Marketing
Committee.
    Person means any individual, group of individuals, partnership,
corporation, estate, trust association, cooperative, or other business
enterprise or other legal entity who is, or whose members are, a
citizen of, or legal resident alien or aliens in the United States.
    Secretary means the Secretary of the United States Department of
Agriculture or any other officer or employee of the Department who has
been delegated the authority to act in the Secretary's stead with
respect to the program established in this part.
    United States means the 50 States of the United States of America,
the District of Columbia, and the Commonwealth of Puerto Rico.


Sec. 1476.4  Eligibility.

    (a) To be eligible to receive cash payments under this part, a
cranberry farm unit must:
    (1) Have produced cranberries in the United States anytime during
the 1999 crop year;
    (2) Not have been compensated for the same loss by any other
Federal programs, except an indemnity provided under a policy or plan
of insurance offered under the Federal Crop Insurance Act (7 U.S.C.
1501).
    (3) Be engaged in the business of producing and marketing
agricultural products at the time of application for payment.
    (4) Apply for payments during the application period.

[[Page 15184]]

    (b) A cranberry farm unit must submit a timely application and
comply with all other terms and conditions of this part and
instructions issued by CCC, as well as comply with those instructions
that are otherwise contained in the application to be eligible for
benefits under this part.


Sec. 1476.5  Payment application, time, and method.

    (a) Payments in accordance with this part shall be made available
to eligible cranberry producers based on information provided on a
Cranberry Market Loss Assistance Payment Program Application, CCC-890.
    (b) Payment applications must be received within the program
application period announced by CCC.
    (c) Cranberry Market Loss Assistance Payment Program applications
may be obtained from the CCC and PSD, in person, by mail, by telephone,
or by facsimile. In addition, applicants may download a copy of the
Form CCC-890 at http://www.usda.gov/dafp/psd. In order to participate
in the program authorized by this part, cranberry producers must
execute the Cranberry Market Loss Assistance Payment Program
Application and forward the completed original to PSD as directed on
the application.


Sec. 1476.6  Applicant payment quantity.

    (a) The applicant's payment quantity of cranberries will be
determined by the CCC, based on the 1999 crop of cranberries that was
produced on each farm unit, as provided by the Cranberry Marketing
Committee or obtained by CCC, with the agreement of the applicant.
    (b) The maximum quantity of the 1999 crop of cranberries for which
producers are eligible for a payment for a farm unit under this part
shall be 1,600,000 pounds.


Sec. 1476.7  Payment rate and cranberry farm unit payment.

    (a) Payments under this part may be made to a cranberry farm unit
only up to 1,600,000 pounds of 1999 cranberries produced in the United
States. A payment rate will be determined after the conclusion of the
application period, and shall be calculated by dividing the total
available program funds for the Cranberry Market Loss Assistance
Payment Program by the total 1999 eligible cranberry production
submitted and approved for payment.
    (b) Each cranberry farm unit payment will be calculated by
multiplying the payment rate determined in paragraph (a) of this
section by the farm unit's eligible production.
    (c) In the event that approval of all eligible applications would
result in expenditures in excess of the amount available, CCC shall
reduce the payment rate in such manner as CCC, in its sole discretion,
finds fair and reasonable.
    (d) After receipt of the application for payment, together with
required supporting documents and the determination of the payment
rate, CCC will issue payments to the applicant by electronic deposit to
the applicants's account. Applicants may request that payment be made
by mailed check. If a payment is not made within 30 days of the close
of the announced application period, CCC will pay interest at the
prompt payment interest rate.


Sec. 1476.8  Offsets.

    (a) Any payment or portion thereof due any person under this part
shall be allowed without regard to questions of title under State law,
and without regard to any claim or lien against a farm unit, a farm
unit's cranberry production, or proceeds thereof, in favor of the
producer or any other creditors, including agencies of the U.S.
Government.
    (b) Any payments received by a cranberry farm unit are not subject
to administrative offsets or withholdings, including administrative
offset under chapter 37 of title 31, United States Code, as provided by
Public Law 106-387.
    (c) The regulations governing offsets and withholdings found at 7
CFR part 1403 shall not be applicable to this part.


Sec. 1476.9  Appeals.

    Any producer who is dissatisfied with a determination made pursuant
to this part may make a request for reconsideration or appeal of such
determination in accordance with the appeal regulations set forth at 7
CFR parts 11 and 780.


Sec. 1476.10  Misrepresentation and scheme or device.

    (a) A cranberry farm unit shall be ineligible to receive assistance
under this part if it is determined by the CCC to have knowingly:
    (1) Adopted any scheme or device that tends to defeat the purpose
of this program;
    (2) Made any fraudulent representation; or
    (3) Misrepresented any fact affecting a determination under this
program. CCC will notify the appropriate investigating agencies of the
United States and take steps deemed necessary to protect the interests
of the government.
    (b) Any funds disbursed pursuant to this part to any person or farm
unit engaged in a misrepresentation, scheme, or device, shall be
refunded to CCC, with interest together with such other sums as may
become due. Any cranberry farm unit or person engaged in acts
prohibited by this section and any cranberry farm unit or person
receiving payment under this part shall be jointly and severally liable
with other persons or operations involved in such claim for benefits
for any refund due under this section and for related charges. The
remedies provided in this part shall be in addition to other civil,
criminal, or administrative remedies that may apply.


Sec. 1476.11  Estates, trusts, and minors.

    (a) Program documents executed by persons legally authorized to
represent estates or trusts will be accepted only if such person
furnishes evidence of the authority to execute such documents.
    (b) A minor who is otherwise eligible for assistance under this
part must also:
    (1) Establish that the right of majority has been conferred on the
minor by court proceedings or by statute;
    (2) Show that a guardian has been appointed to manage the minor's
property and the applicable program documents are executed by the
guardian; or
    (3) Furnish a bond under which the surety guarantees any loss
incurred for which the minor would be liable had the minor been an
adult.


Sec. 1476.12  Death, incompetency, or disappearance.

    In the case of death, incompetency, disappearance or dissolution of
a person that is eligible to receive benefits in accordance with this
part, such person or persons specified in part 707 of this chapter may
receive such benefits, as determined appropriate by FSA.


Sec. 1476.13  Maintaining records.

    Cranberry farm units making application for benefits under this
part must maintain accurate records and accounts that will document
that they meet all eligibility requirements specified in this part, as
may be requested by CCC. Such records and accounts must be retained for
3 years after the date of payment to the cranberry farm unit under this
program. Such records shall be available at all reasonable times for an
audit or inspection by authorized representatives of CCC, United States
Department of Agriculture, or the Comptroller General of the United
States. Failure to keep, or make available, such records may result in
refund to CCC of all payments received plus interest thereon, as
determined by CCC.

[[Page 15185]]

Sec. 1476.14  Refunds; joint and several liability.

    (a) In the event there is a failure to comply with any term,
requirement, or condition for payment arising under the application, or
this part, and if any refund of a payment to CCC shall otherwise become
due in connection with the application, or this part, all payments made
under this part to any cranberry farm unit shall be refunded to CCC
together with interest as determined in accordance with paragraph (c)
of this section and late payment charges as provided in part 1403 of
this title.
    (b) All persons signing a cranberry farm unit's application for
payment as having an interest in the farm unit shall be jointly and
severally liable for any refund, including related charges, that is
determined to be due for any reason under the terms and conditions of
the application or this part with respect to such operation.
    (c) Interest shall be applicable to refunds required of any person
under this part if CCC determines that payments or other assistance was
provided to a person who was not eligible for such assistance. Such
interest shall be charged at the rate of interest that the United
States Treasury charges the CCC for funds, from the date CCC made such
benefits available to the date of repayment or the date interest
increases as determined in accordance with applicable regulations.
    (d) Late payment interest shall be assessed on all refunds in
accordance with the provisions of, and subject to the rates prescribed
in, 7 CFR part 792.
    (e) Any excess payments made by CCC with respect to any application
under this part must be refunded.
    (f) In the event that a benefit under this part was provided as the
result of erroneous information provided by any person, the benefit
must be repaid with any applicable interest.

    Dated: March 9, 2001.
James R. Little,
Acting Executive Vice President, Commodity Credit Corporation.
[FR Doc. 01-6428 Filed 3-13-01; 10:11 am]
BILLING CODE 3410-05-P

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