[Federal Register Volume 59, Number 30 (Monday, February 14, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-3369]


  Federal Register / Vol. 59, No. 30 / Monday, February 14, 1994 /
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[[Page Unknown]]

[Federal Register: February 14, 1994]


                                                    VOL. 59, NO. 30

                                          Monday, February 14, 1994
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DEPARTMENT OF AGRICULTURE

Agricultural Stabilization and Conservation Service

7 CFR Part 723

Commodity Credit Corporation

7 CFR Part 1464

RIN 0560-AD24

 

1994 Marketing Quota and Price Support for Flue-Cured Tobacco

AGENCIES: Agricultural Stabilization and Conservation Service and 
Commodity Credit Corporation, USDA.

ACTION: Final rule.

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SUMMARY: The purpose of this final rule is to codify determinations 
made by the Secretary of Agriculture (Secretary) with respect to the 
1994 crop of flue-cured tobacco. In accordance with the Agricultural 
Adjustment Act of 1938 (1938 Act), as amended, the Secretary determined 
the 1994 marketing quota for flue-cured tobacco to be 802.6 million 
pounds. In accordance with the Agricultural Act of 1949 (1949 Act), as 
amended, the Secretary determined the 1994 price support level to be 
158.3 cents per pound.

EFFECTIVE DATE: December 15, 1993.

FOR FURTHER INFORMATION CONTACT: Robert L. Tarczy, Agricultural 
Economist, Tobacco and Peanuts Analysis Division, Agricultural 
Stabilization and Conservation Service (ASCS), United States Department 
of Agriculture (USDA), room 3736, South Building, P.O. Box 2415, 
Washington, DC 20013-2415, telephone 202-720-8839.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This final rule is issued in conformance with Executive Order 
12866. Based on information compiled by USDA, it has been determined 
that this final rule:
    (1) Would have an annual effect on the economy of less than $100 
million;
    (2) Would not adversely affect in a material way the economy, a 
sector of the economy, productivity, competition, jobs, the 
environment, public health or safety, or State, local, or tribal 
governments or communities;
    (3) Would not create a serious inconsistency or otherwise interfere 
with an action taken or planned by another agency;
    (4) Would not alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or rights and obligations of recipients 
thereof; and
    (5) Would not raise novel legal or policy issues arising out of 
legal mandates, the President's priorities, or principles set forth in 
Executive Order 12866.

Final Regulatory Impact Analysis

    A final regulatory impact analysis describing the impact of the 
established quota and support level is available on request from Robert 
L. Tarczy.

Executive Order 12778

    This final rule has been reviewed in accordance with Executive 
Order 12778, Civil Justice Reform. The provisions of this rule do not 
preempt State laws, are not retroactive, and do not involve 
administrative appeals.

Federal Assistance Program

    The title and number of the Federal Assistance Program, as found in 
the Catalog of Federal Domestic Assistance, to which this rule applies 
are: Commodity Loans and Purchases--10.051.

Regulatory Flexibility Act

    It has been determined that the Regulatory Flexibility Act is not 
applicable to this final rule since neither ASCS nor the Commodity 
Credit Corporation is required by 5 U.S.C. 553 or any other provision 
of law to publish a notice of proposed rulemaking with respect to the 
subject matter of this rule.

Executive Order 12372

    This activity is not subject to the provisions of Executive Order 
12372 which requires intergovernmental consultation with State and 
local officials. See the Notice related to 7 CFR part 3015, subpart V, 
published at 48 FR 29115 (June 24, 1983).

Paperwork Reduction Act

    The amendments to 7 CFR parts 723 and 1464 set forth in this final 
rule do not contain any new or revised information collection 
requirements that require clearance through the Office of Management 
and Budget under the provisions of 44 U.S.C. chapter 35.

Statutory Background

    This rule is issued pursuant to the provisions of the 1938 Act and 
the 1949 Act. Section 1108(c) of Public Law 99-272 provides that the 
determinations made in this rule are not subject to the provisions for 
public participation in rule making contained in 5 U.S.C. 553 or in any 
directive of the Secretary.
    On December 15, 1993, the Secretary announced the national 
marketing quota and price support level for the 1994 crop of flue-cured 
tobacco.

Marketing Quota

    Section 317(a)(1)(b) of the 1938 Act provides, in part, that the 
national marketing quota for a marketing year for flue-cured tobacco is 
the quantity of such tobacco that is not more than 103 percent nor less 
than 97 percent of the total of: (1) The amount of flue-cured tobacco 
that domestic manufacturers of cigarettes estimate they intend to 
purchase on U.S. auction markets or from producers, (2) the average 
quantity exported annually from the U.S. during the three marketing 
years immediately preceding the marketing year for which the 
determination is being made, and (3) the quantity, if any, that the 
Secretary, in the Secretary's discretion, determines necessary to 
adjust loan stocks to the reserve stock level.
    Section 317(a)(1)(c) further provides that, with respect to the 
1990 through 1994 marketing years, any reduction in the national 
marketing quota being determined shall not exceed 10 percent of the 
previous year's national marketing quota. The reserve stock level is 
defined in section 301(b)(14)(C) of the 1938 Act as the greater of 100 
million pounds or 15 percent of the national marketing quota for flue-
cured tobacco for the marketing year immediately preceding the 
marketing year for which the level is being determined.
    Section 320A of the 1938 Act provides that all domestic 
manufacturers of cigarettes with more than 1 percent of U.S. cigarette 
production and sales shall submit to the Secretary a statement of 
purchase intentions for the 1994 crop of flue-cured tobacco by December 
1, 1993. Six such manufacturers were required to submit such a 
statement for the 1994 crop and the total of their intended purchases 
for the 1994 crop is 288.0 million pounds. The three-year average of 
exports is 391.3 million pounds.
    The national marketing quota for the 1993 crop year was 891.8 
million pounds (58 FR 11960). Thus, in accordance with section 301 
(b)(14)(C), the reserve stock level for use in determining the 1994 
marketing quota for flue-cured tobacco is 133.8 million pounds.
    As of December 6, 1993, the Flue-Cured Tobacco Stabilization 
Corporation had in its inventory 316.8 million pounds of flue-cured 
tobacco (excluding pre-1985 stocks committed to be purchased by 
manufacturers and covered by deferred sales). Accordingly, the 
adjustment to maintain loan stocks at the reserve supply level is a 
decrease of 183.0 million pounds.
    The total of the three marketing quota components for the 1994-95 
marketing year is 496.3 million pounds. However, the 1994 national 
marketing quota cannot be less than 90 percent of 1993's quota. 
Accordingly, the national marketing quota for the marketing year 
beginning July 1, 1994, for flue-cured tobacco is 802.6 million pounds.
    Section 317(a)(2) of the 1938 Act provides that the national 
average yield goal be set at a level that the Secretary determines will 
improve or ensure the useability of the tobacco and increase the net 
return per pound to the growers. Yields in crop year 1993 did not 
change significantly from the previous year. Accordingly, the national 
average yield goal for the 1994-95 marketing year will be 2,088 pounds 
per acre, the same as last year's level.
    In accordance with section 317(a)(3) of the 1938 Act, the national 
acreage allotment for the 1994 crop of flue-cured tobacco is determined 
to be 384,386.97 acres, derived from dividing the national marketing 
quota by the national average yield goal.
    In accordance with section 317(e) of the 1938 Act, the Secretary is 
authorized to establish a national reserve from the national acreage 
allotment in an amount equivalent to not more than 3 percent of the 
national acreage allotment for the purpose of making corrections in 
farm acreage allotments, adjusting for inequities, and for establishing 
allotments for new farms. The Secretary has determined that a national 
reserve for the 1994 crop of flue-cured tobacco of 744 acres is 
adequate for these purposes.
    In accordance with section 317(a)(4) of the 1938 Act, the national 
acreage factor for the 1994 crop of flue-cured tobacco for uniformly 
adjusting the acreage allotment of each farm is determined to be 0.90, 
which is the result of dividing the 1994 national allotment (384,386.97 
acres) minus the national reserve (744 acres) by the total of 
allotments established for flue-cured tobacco farms in 1993 (426,268.80 
acres).
    In accordance with section 317(a)(7) of the 1938 Act, the national 
yield factor for the 1994 crop of flue-cured tobacco is determined to 
be 0.9255, which is the result of dividing the national average yield 
goal (2,088 pounds) by a weighted national average yield (2,256 
pounds).

Price Support

    Price support is required to be made available for each crop of a 
kind of tobacco for which quotas are in effect, or for which marketing 
quotas have not been disapproved by producers, at a level determined in 
accordance with a formula prescribed in section 106 of the 1949 Act.
    With respect to the 1994 crop of flue-cured tobacco, the level of 
support is determined in accordance with sections 106 (d) and (f) of 
the 1949 Act. Section 106(f)(7)(A) of the 1949 Act provides that the 
level of support for the 1994 crop of flue-cured tobacco shall be:
    (1) The level, in cents per pound, at which the 1993 crop of flue-
cured tobacco was supported, plus or minus, respectively,
    (2) An adjustment of not less than 65 percent nor more than 100 
percent of the total, as determined by the Secretary after taking into 
consideration the supply of the kind of tobacco involved in relation to 
demand, of:
    (A) 66.7 percent of the amount by which:
    (I) The average price received by producers for flue-cured tobacco 
on the United States auction markets, as determined by the Secretary, 
during the 5 marketing years immediately preceding the marketing year 
for which the determination is being made, excluding the year in which 
the average price was the highest and the year in which the average 
price was the lowest in such period, is greater or less than:
    (II) The average price received by producers for flue-cured tobacco 
on the United States auction markets, as determined by the Secretary, 
during the 5 marketing years immediately preceding the marketing year 
prior to the marketing year for which the determination is being made, 
excluding the year in which the average price was the highest and the 
year in which the average price was the lowest in such period; and
    (B) 33.3 percent of the change, expressed as a cost per pound of 
tobacco, in the index of prices paid by the tobacco producers from 
January 1 to December 31 of the calendar year immediately preceding the 
year in which the determination is made.
    The difference between the two 5-year averages (i.e., the 
difference between (A) (I) and (II)) is 0.5 cents per pound. The 
difference in the cost index from January 1 to December 31, 1993, is 
1.6 cents per pound. Applying these components to the price support 
formula (0.5 cents per pound, two-thirds weight; 1.6 cents per pound, 
one-third weight) results in a weighted total of 0.9 cents per pound. 
As indicated, section 106 provides that the Secretary may, on the basis 
of supply and demand conditions, limit the change in the price support 
level to no less than 65 percent of that amount. In order to remain 
competitive in foreign and domestic markets, the Secretary used his 
discretion to limit the increase to 65 percent of the maximum allowable 
increase. Accordingly, the 1994 crop of flue-cured tobacco will be 
supported at 158.3 cents per pound, 0.6 cents higher than in 1993.

List of Subjects

7 CFR Part 723

    Acreage allotments, Marketing quotas, Penalties, Reporting and 
recordkeeping requirements, Tobacco.

7 CFR Part 1464

    Loan programs--agriculture, Price support programs, Reporting and 
recordkeeping requirements, Tobacco, Warehouses.

    Accordingly, 7 CFR parts 723 and 1464 are amended as follows:

PART 723--TOBACCO

    1. The authority citation for 7 CFR part 723 continues to read as 
follows:

    Authority: 7 U.S.C. 1301, 1311-1314, 1314-1, 1314c, 1314d, 
1314f, 1314h, 1315, 1316, 1363, 1372-75, 1377-1379, 1421, 1445-1, 
and 1445-2.

    2. Section 723.111 is amended by:
    A. Redesignating existing text as paragraph (a), and
    B. Adding paragraph (b) to read as follows:


Sec. 723.111  Flue-cured (types 11-14) tobacco.

* * * * *
    (b) The 1994-crop national marketing quota is 802.6 million pounds.

PART 1464--TOBACCO

    3. The authority citation for 7 CFR part 1464 continues to read as 
follows:

    Authority: 7 U.S.C. 1421, 1423, 1441, 1445, 1445-1 and 1445-2; 
15 U.S.C. 714b and 714c.

    4. Section 1464.12 is amended by:
    A. Redesignating existing text as paragraph (a), and
    B. Adding paragraph (b) to read as follows:


Sec. 1464.12  Flue-Cured (types 11-14) tobacco.

* * * * *
    (b) The 1994 crop national price support level is 158.3 cents per 
pound.

    Signed at Washington, DC, on February 7, 1994.
Bruce R. Weber,
Acting Administrator, Agricultural Stabilization and Conservation 
Service and Executive Vice President, Commodity Credit Corporation.
[FR Doc. 94-3369 Filed 2-11-94; 8:45 am]
BILLING CODE 3410-05-P