[Federal Register Volume 59, Number 101 (Thursday, May 26, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-12888]
[[Page Unknown]]
[Federal Register: May 26, 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-AD23 and 0560-AD28
1994 Marketing Quotas and Price Support Levels for Fire-Cured
(Type 21), Fire-Cured (Types 22-23), Dark Air-Cured (Types 35-36),
Virginia Sun-Cured (Type 37), Cigar-Filler and Binder (Types 42-44 and
53-55), and Cigar-Filler (Type 46) Tobaccos
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 the national
marketing quotas and price support levels for the 1994 crops for
several kinds of tobacco announced by press release on March 1, 1994.
In accordance with the Agricultural Adjustment Act of 1938 (the
1938 Act), as amended, the Secretary determined the 1994 marketing
quotas to be as follows: Fire-cured (type 21), 2.150 million pounds;
fire-cured (types 22-23), 40.4 million pounds; dark air-cured (types
35-36), 10.6 million pounds; Virginia sun-cured (type 37), 131,000
pounds; cigar-filler and binder (types 42-44 and 53-55), 9.3 million
pounds; and cigar-filler (type 46), zero pounds.
This rule is necessary to adjust the production levels of these
kinds of tobacco to more fully reflect supply and demand conditions.
In accordance with the Agricultural Act of 1949 (the 1949 Act), as
amended, the Secretary determined the 1994 levels of support to be as
follows (in cents per pound): Fire-cured (type 21), 140.7; fire-cured
(types 22-23), 148.3; dark air-cured (types 35-36), 127.3; Virginia
sun-cured (type 37), 124.5; cigar-filler and binder (types 42-44 and
53-55), 108.4; and cigar-filler (type 46), 84.4.
This is required by section 106 of the 1949 Act.
EFFECTIVE DATE: March 1, 1994.
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, 202-720-8839.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This rule has been determined to be not significant for purposes of
Executive Order 12866 and therefore has not been reviewed by OMB.
Executive Order 12778
The 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 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 part 723 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. 35.
Statutory Background
This final rule is issued pursuant to the provisions of the 1938
Act and the 1949 Act.
On March 1, 1994, the Secretary determined and announced the
national marketing quotas and price support levels for the 1994 crops
of fire-cured (type 21), fire-cured (types 22-23), dark air-cured
(types 35-36), Virginia sun-cured (type 37), cigar-filler and binder
(types 42-44 and 53-55), and cigar-filler (type 46) tobaccos. A number
of related determinations were made at the same time, which this final
rule affirms. On the same date, the Secretary also announced that
referenda would be conducted by mail with respect to fire-cured (types
21-23) and dark air-cured (types 35-36) tobaccos.
During March 28-31, 1994, eligible fire-cured (types 21-23) and
dark air-cured (types 35-36) tobacco producers voted in separate
referenda to determine whether such producers disapprove marketing
quotas for the 1994, 1995, and 1996 marketing years (MYs) for these
tobaccos. Of the producers voting, 89.8 percent favored marketing
quotas for fire-cured tobacco and 90.0 percent favored marketing quotas
for dark air-cured tobacco. Accordingly, quotas and price supports for
both kinds are in effect for the 1994 MY.
In accordance with section 312(a) of the 1938 Act, the Secretary of
Agriculture is required to proclaim not later than March 1 of any MY
with respect to any kind of tobacco, other than burley and flue-cured
tobacco, a national marketing quota for any such kind of tobacco for
each of the next three MYs if such MY is the last year of three
consecutive years for which marketing quotas previously proclaimed will
be in effect. With respect to both fire-cured (type 21-23) and dark
air-cured (types 35-36) tobaccos, the 1993 MY is the last year of three
such consecutive years. Accordingly, marketing quotas for fire-cured
(types 21-23) and dark air-cured (types 35-36) tobaccos have been
proclaimed for each of the three MYs beginning October 1, 1994; October
1, 1995; and October 1, 1996.
Sections 312 and 313 of the 1938 Act also provide that the
Secretary shall announce not later than March 1 of any MY the reserve
supply level and the total supply of fire-cured (type 21), fire-cured
(types 22-23), dark air-cured (types 35-36), Virginia sun-cured (type
37), cigar-filler and binder (types 42-44 and 53-55), and cigar-filler
(type 46) tobaccos for the MY beginning October 1, 1993, and the
amounts of the national marketing quotas, national acreage allotments,
national acreage factors for apportioning the national acreage
allotments (less reserves) to old farms, and the amounts of the
national reserves and parts thereof available for (1) new farms and (2)
making corrections and adjusting inequities in old farm allotments for
fire-cured (type 21), fire-cured (types 22-23), dark air-cured (types
35-36), Virginia sun-cured (type 37), cigar-filler and binder (types
42-44 and 53-55), and cigar-filler (type 46) tobacco for the MY
beginning October 1994.
Price support is required to be made available for each crop of a
kind of tobacco for which marketing quotas are in effect or for which
marketing quotas have not been disapproved by producers. With respect
to the 1994 crop of the six kinds of tobacco which are the subject of
this rule, the respective maximum level of support is determined in
accordance with section 106 of the 1949 Act.
The announcement of the price support levels for the 1994 crops of
the six kinds of tobacco must be made insofar as practicable before the
beginning of the planting season.
Marketing Quotas
Section 312(b) of the 1938 Act provides, in part, that the amount
of the national marketing quota for a kind of tobacco is the total
quantity of that kind of tobacco which may be marketed that will make
available during such MY a supply of such tobacco equal to the reserve
supply level.
Section 313(g) of the 1938 Act provides that the Secretary may
convert the national marketing quota into a national acreage allotment
for apportionment to individual farms.
Since producers of these kinds of tobacco generally produce less
than their respective national acreage allotments would allow, it has
been determined that a larger quota would be necessary to make
available production equal to the reserve supply level. The amount of
the national marketing quota so announced may, not later than the
following March 1, be increased by not more than 20 percent if the
Secretary determines that such increase is necessary in order to meet
market demands or to avoid undue restriction of marketings in adjusting
the total supply to the reserve supply level.
Section 301(b)(14)(B) of the 1938 Act defines ``reserve supply
level'' as the normal supply, plus 5 percent thereof, to ensure a
supply adequate to meet domestic consumption and export needs in years
of drought, flood, or other adverse conditions, as well as in years of
plenty. The ``normal supply'' is defined in section 301(b)(10)(B) of
the 1938 Act as a normal year's domestic consumption and exports, plus
175 percent of a normal year's domestic use and 65 percent of a normal
year's exports as an allowance for a normal year's carryover. A
``normal'' year's domestic consumption is defined in section
301(b)(11)(B) of the Act as the average quantity produced and consumed
in the United States during the 10 MYs immediately preceding the MY in
which such consumption is determined, adjusted for current trends in
such consumption.
A normal year's exports is defined in section 301(b)(12) of the
1938 Act as the average quantity produced in and exported from the
United States during the 10 MYs immediately preceding the MY in which
such exports are determined, adjusted for current trends in such
exports.
In accordance with section 313(g) 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 1 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 the
national reserve, noted herein, for the 1994 crop of each of these
kinds of tobacco is adequate for these purposes.
On December 21, 1993, a proposed rule was published (58 FR 67376)
in which interested persons were requested to comment with respect to
these issues.
Discussion of Comments
Thirty-one written responses were received during the comment
period which ended February 4, 1994. Some respondents discussed more
than one kind of tobacco. A summary of these comments by kind of
tobacco follows:
(1) Fire-cured (type 21) tobacco. Eight comments were received.
Four comments recommended that quotas be increased by 5 percent. Two
others recommended that the marketing quotas be increased by 10 percent
from the 1993 MY while two more requested an unspecified increase.
(2) Fire-cured (types 22-23) tobacco. Four comments were received,
all recommending a five percent increase from the 1993 marketing quota.
(3) Dark air-cured (types 35-36) tobacco. Five comments were
received. Recommendations ranged from a 5-percent decrease to a 10-
percent decrease in the quota.
(4) Virginia sun-cured (type 37) tobacco. Eight comments were
received. Recommendations ranged from a 5-percent to a 20-percent
increase in quota.
(5) Cigar-filler and binder (types 42-44 and 53-55) tobacco. Six
comments were received. These comments ranged from no change in quota
to a 35-percent decrease in quota.
(6) Cigar-filler (type 46) tobacco. No comments were received.
Based upon a review of these comments and the latest available
statistics of the Federal Government, which appear to be the most
reliable data available, the following determinations have been made.
(1) Fire-Cured (Type 21) Tobacco
The yearly average quantity of fire-cured (type 21) tobacco
produced in the United States which is estimated to have been consumed
in the United States during the 10 MYs preceding the 1993-94 MY is
approximately 1.5 million pounds. The average annual quantity of fire-
cured (type 21) tobacco produced in the United States and exported from
the United States during the 10 MYs preceding the 1993-94 MY was 2.7
million pounds (farm sales weight basis). Both domestic use and exports
have trended sharply downward. For that reason, a normal year's
domestic consumption has been determined to be 0.5 million pounds and a
normal year's exports have been determined to be 2.1 million pounds.
Application of the formula prescribed by section 301(b)(14)(B) of the
1938 Act results in a reserve supply level of 5.61 million pounds.
Manufacturers and dealers reported stocks of fire-cured (type 21)
tobacco held on October 1, 1993, of 4.4 million pounds. The 1993 fire-
cured (type 21) tobacco crop is estimated to be 1.9 million pounds.
Therefore, the total supply of fire-cured (type 21) tobacco for the
1993 MY is 6.3 million pounds. During the 1993 MY, it is estimated that
disappearance will total approximately 2.5 million pounds. By deducting
this disappearance from the total supply, a carryover of 3.8 million
pounds at the beginning of the 1994 MY is obtained.
The difference between the reserve supply level and the estimated
carryover on October 1, 1994, is 1.81 million pounds. This represents
the quantity of fire-cured (type 21) tobacco which may be marketed that
will make available during such MY a supply equal to the reserve supply
level. Less than 85 percent of the announced national marketing quota
is expected to be produced. Accordingly, it has been determined that a
national marketing quota of 2.15 million pounds is necessary to make
available production of 1.81 million pounds. Accordingly, the national
marketing quota for the 1994 MY is 2.15 million pounds. In accordance
with section 313(g) of the 1938 Act, dividing the 1994 national
marketing quota of 2.15 million pounds by the 1989-93, 5-year national
average yield of 1,388 pounds per acre results in a 1994 national
acreage allotment of 1,548.99 acres.
Pursuant to the provisions of section 313(g) of the 1938 Act, a
national acreage factor of 1.05 is determined by dividing the national
acreage allotment for the 1994 MY, less a national reserve of 5.0
acres, by the total of 1994 preliminary farm acreage allotments
(previous year's allotments). The preliminary farm acreage allotments
reflect the factors specified in section 313(g) of the 1938 Act for
apportioning the national acreage allotment, less the national reserve,
to old farms.
(2) Fire-Cured (Types 22-23) Tobacco
The yearly average quantity of fire-cured (types 22-23) tobacco
produced in the United States which is estimated to have been consumed
in the United States during the 10 years preceding the 1993 MY was
approximately 17.8 million pounds. The average annual quantity of fire-
cured (types 22-23) tobacco produced in the United States and exported
during the 10 MYs preceding the 1993 MY was 16.9 million pounds (farm
sales weight basis). Both domestic use and exports have trended upward
recently. A normal year's domestic consumption has for that reason been
determined to be 21.8 million pounds and a normal year's exports have
been determined to be 20.7 million pounds. Application of the formula
prescribed by section 301(b)(14)(B) of the 1938 Act results in a
reserve supply level of 98.8 million pounds.
Manufacturers and dealers reported stocks of fire-cured (types 22-
23) tobacco held on October 1, 1993, of 64.0 million pounds. The 1993
fire-cured (types 22-23) crop is estimated to be 36.8 million pounds.
Therefore, the total supply of fire-cured (types 22-23) tobacco for the
MY beginning October 1, 1993, is 100.8 million pounds. During the 1993
MY, it is estimated that disappearance will total approximately 34.0
million pounds. By deducting this disappearance from the total supply,
a carryover of 66.8 million pounds at the beginning of the 1994 MY is
obtained.
The difference between the reserve supply level and the estimated
carryover on October 1, 1994, is 32.0 million pounds. This represents
the quantity of fire-cured (types 22-23) tobacco which may be marketed
that will make available during the 1994 MY a supply equal to the
reserve supply level. About 95 percent of the announced national
marketing quota is expected to be produced.
Accordingly, it has been determined that a national marketing quota
for the 1994 MY of 33.7 million pounds is necessary to make available
production of 32.0 million pounds. In accordance with section 312(b) of
the 1938 Act, it has been further determined that the 1994 national
marketing quota must be increased by 20 percent in order to avoid undue
restriction of marketings. This results in a national marketing quota
for the 1994 MY of 40.4 million pounds.
In accordance with section 313(g) of the 1938 Act, dividing the
1994 national marketing quota of 40.4 million pounds by the 1989-93, 5-
year national average yield of 2,275 pounds per acre results in a 1994
national acreage allotment of 17,758.24 acres.
Pursuant to the provisions of section 313(g) of the 1938 Act, a
national acreage factor of 1.05 is determined by dividing the national
acreage allotment for the 1994 MY, less a national reserve of 40 acres,
by the total of 1994 preliminary farm acreage allotments. The
preliminary farm acreage allotments reflect the factors specified in
section 313(g) of the 1938 Act for apportioning the national acreage
allotment, less the national reserve, to old farms.
(3) Dark Air-Cured (Types 35-36) Tobacco
The yearly average quantity of dark air-cured (types 35-36) tobacco
produced in the United States, which is estimated to have been consumed
in the United States, during the 10 MYs preceding the 1993-94 MY was
approximately 10.6 million pounds. The average annual quantity of dark
air-cured (types 35-36) tobacco produced in the United States and
exported from the United States during the 10 MYs preceding the 1993 MY
was 1.9 million pounds (farm sales weight basis). Both domestic use and
exports have trended downward. Accordingly, a normal year's domestic
consumption has been determined to be 10.0 million pounds and a normal
year's exports have been determined to be 1.6 million pounds.
Application of the formula prescribed by section 301(b)(14)(B) of the
1938 Act results in a reserve supply level of 31.6 million pounds.
Manufacturers and dealers reported stocks of dark air-cured (types
35-36) tobacco held on October 1, 1993, of 24.2 million pounds. The
1993 dark air-cured (types 35-36) tobacco crop is estimated to be 9.9
million pounds. Therefore, the total supply of dark air-cured (types
35-36) tobacco for the 1993 MY is 34.1 million pounds. During the 1993
MY, it is estimated that disappearance will total approximately 10.0
million pounds. By deducting this disappearance from the total supply,
a carryover of 24.1 million pounds at the beginning of the 1994 MY is
obtained.
The difference between the reserve supply level and the estimated
carryover on October 1, 1994, is 7.5 million pounds. This represents
the quantity of dark air-cured (types 35-36) tobacco which may be
marketed which will make available during such MY a supply equal to the
reserve supply level.
More than 80 percent of the announced national marketing quota is
expected to be produced. Accordingly, it has been determined that a
national marketing quota of 8.8 million pounds is necessary to make
available production of 7.5 million pounds. In accordance with section
312(b) of the 1938 Act, it has been further determined that the 1994
national marketing quota must be increased by 20 percent in order to
avoid undue restriction of marketings. This results in a national
marketing quota for the 1994 MY of 10.6 million pounds.
In accordance with section 313(g) of the 1938 Act, dividing the
1994 national marketing quota of 10.6 million pounds by the 1989-93, 5-
year average yield of 2,105 pounds per acre results in a 1994 national
acreage allotment of 5,035.63 acres.
Pursuant to the provisions of section 313(g) of the 1938 Act, a
national acreage factor of 0.95 is determined by dividing the national
acreage allotment for the 1994 MY, less a national reserve of 28.0
acres, by the total of 1994 preliminary farm acreage allotments. The
preliminary farm acreage allotments reflect the factors specified in
section 313(g) of the 1938 Act for apportioning the national acreage
allotment, less the national reserve, to old farms.
(4) Virginia Sun-Cured (Type 37) Tobacco
The yearly average quantity of Virginia sun-cured (type 37) tobacco
produced in the United States which is estimated to have been consumed
in the United States during the 10 MYs preceding the 1993-94 MY was
approximately 220,000 pounds. The average annual quantity produced in
the United States and exported during the same period was approximately
120,000 pounds (farm sales weight basis). Domestic use has shown a
sharp downward trend, and exports have shown a moderate downward trend.
Accordingly, a quantity of 92,000 pounds has been determined to be a
normal year's domestic consumption and a quantity of 20,000 pounds has
been determined to be a normal year's exports. Application of the
formula prescribed by section 301(b)(14)(B) of the 1938 Act results in
a reserve supply level of 300,000 pounds.
Manufacturers and dealers reported stocks of Virginia sun-cured
(type 37) tobacco held on October 1, 1993, of 200,000 pounds. The 1993
Virginia sun-cured (type 37) tobacco crop is estimated to be 100,000
pounds. Therefore, the total supply of Virginia sun-cured (type 37)
tobacco for the 1993 MY is 300,000 pounds. During the 1993 MY, it is
estimated that disappearance will total approximately 120,000 pounds.
By deducting this disappearance from the total supply, a carryover of
180,000 pounds at the beginning of the 1994 MY is obtained.
The difference between the reserve supply level and the estimated
carryover on October 1, 1994, is 120,000 pounds. This represents the
quantity of Virginia sun-cured (type 37) tobacco which may be marketed
that will make available during such MY a supply equal to the reserve
supply level. Around 90 percent of the announced national marketing
quota is expected to be produced. Accordingly, it has been determined
that a national marketing quota of 131,000 pounds is necessary to make
available production of 120,000 pounds. Accordingly, the national
marketing quota for the 1994 MY is 131,000 pounds.
In accordance with section 313(g) of the 1938 Act, dividing the
1994 national marketing quota of 131,000 pounds by the 1989-93, 5-year
national yield of 1,286 pounds per acre results in a 1994 national
acreage allotment of 101.87 acres.
Pursuant to the provisions of section 313(g) of the 1938 Act, a
national acreage factor of 1.05 is determined by dividing the national
acreage allotment for the 1994 MY, less a national reserve of 0.08
acre, by the total of the 1994 preliminary farm acreage allotments. The
preliminary farm acreage allotments reflect the factors specified in
section 313(g) of the 1938 Act for apportioning the national acreage
allotment, less the national reserve, to old farms.
(5) Cigar-Filler and Binder (Types 42-44 and 53-55) Tobacco
The yearly average quantity of cigar-filler and binder (types 42-44
and 53-55) tobacco produced in the United States which is estimated to
have been consumed in the United States during the 10 years preceding
the 1993 MY was approximately 16.0 million pounds. The average annual
quantity of cigar-filler and binder (types 42-44 and 53-55) tobacco
produced in the United States and exported from the United States
during the 10 MYs preceding the 1993 MY was less than 100,000 pounds.
Domestic use has trended downward and exports are almost nonexistent.
Accordingly, a normal year's domestic consumption has been established
at 12.0 million pounds while a normal year's export has been
established at 60,000 pounds. Application of the formula prescribed by
section 301(b)(14)(B) of the 1938 Act results in a reserve supply level
of 34.8 million pounds.
Manufacturers and dealers report stocks of cigar-filler and binder
(types 42-44 and 53-55) tobacco held on October 1, 1993, of 30.8
million pounds. The 1993 cigar-filler and binder crop is estimated to
be 7.7 million pounds. Therefore, the total supply of cigar-filler and
binder (types 42-44 and 53-55) tobacco for the 1993 MY is 38.5 million
pounds. During the 1993 MY, it is estimated that disappearance will
total about 9.0 million pounds. By deducting this disappearance from
the total supply, a carryover of 29.5 million pounds at the beginning
of the 1994 MY is obtained.
The difference between the reserve supply level and the estimated
carryover on October 1, 1994, is 5.3 million pounds. This represents
the quantity of cigar-filler and binder tobacco which may be marketed
that will make available during such MY a supply equal to the reserve
supply level. Slightly less than 70 percent of the announced national
marketing quota may be produced. Accordingly, it has been determined
that a 1994 national marketing quota of 7.75 million pounds is
necessary to make available production of 5.3 million pounds. In
accordance with section 312(b) of the 1938 Act, it has been further
determined that the 1994 national marketing quota must be increased by
20 percent in order to avoid undue restriction of marketings. This
results in a national marketing quota for the 1994 MY of 9.3 million
pounds.
In accordance with section 313(g) of the 1938 Act, dividing the
1994 national marketing quota of 9.3 million pounds by the 1989-93, 5-
year national average yield of 1,879 pounds per acre results in a 1994
national acreage allotment of 4,949.44 acres.
Pursuant to the provisions of section 313(g), of the 1938 Act, a
national factor of 0.70 is determined by dividing the national acreage
allotment for the 1994 MY, less a national reserve of 4 acres, by the
total of the 1994 preliminary farm acreage allotments. The preliminary
farm acreage allotments reflect the factors specified in section 313(g)
of the 1938 Act for apportioning the national acreage allotment, less
the national reserve, to old farms.
(6) Cigar-Filler (Type 46) Tobacco
There is no demand for cigar-filler (type 46) tobacco. Accordingly,
the reserve supply level is zero. The estimated carryover at the start
of MY 1994 is 0.6 million pounds.
Because the estimated carryover exceeds the reserve supply level,
the quantity of tobacco which may be marketed during MY 1994 and the
1994 acreage allotment are both zero.
(7) Referendum Results for Fire-Cured (Types 21-23) and Dark Air-Cured
(Types 35-36) Tobaccos
Marketing quotas shall be in effect for the 1994 MY for fire-cured
(types 21-23) and dark air-cured (types 35-36) tobaccos. In referenda
held March 28-31, 1994, 89.8 percent of producers of fire-cured (types
21-23) tobacco and 90.0 percent of producers of dark air-cured (types
35-36) tobacco voted in favor of marketing quotas.
The following is a summary of the results of the separate
referenda:
----------------------------------------------------------------------------------------------------------------
Percent yes
State Total votes Yes votes No votes votes
----------------------------------------------------------------------------------------------------------------
Fire-Cured Tobacco
----------------------------------------------------------------------------------------------------------------
Virginia.................................................... 720 671 49 93.2
Kentucky.................................................... 2,695 2,414 281 89.6
Tennessee................................................... 2,052 1,826 226 89.0
----------------------------------------------------------------------------------------------------------------
Dark Air-Cured Tobacco
----------------------------------------------------------------------------------------------------------------
Indiana..................................................... 11 11 0 100.0
Kentucky.................................................... 4,597 4,105 492 89.3
Tennessee................................................... 1,034 959 75 92.7
----------------------------------------------------------------------------------------------------------------
Price Support
Section 106(f)(6)(A) of the 1949 Act provides that the level of
support for the 1994 crop of a kind of tobacco (other than flue-cured
and burley) shall be the level in cents per pound at which the 1993
crop of such kind of tobacco was supported, plus or minus,
respectively, the amount by which (i) the support level for the 1994
crop, as determined under section 106(b) of the 1949 Act, is greater or
less than (ii) the support level for the 1993 crop, as determined under
section 106(d) of the 1949 Act if the support level under clause (i) is
greater than the support level under clause (ii).
Accordingly, the support level for the 1994 crop of such kind of
tobacco will be the 1993 level, adjusted by the difference (plus or
minus) between the 1993 ``basic support level'' and the 1994 ``basic
support level.''
In addition, section 106(f)(6)(B) of the 1949 Act provides that to
the extent requested by the board of directors of an association,
through which price support is made available to producers (producer
association), the Secretary may reduce the support level determined
under section 106(f)(6)(A) of the 1949 Act for the respective kind of
tobacco to more accurately reflect the market value and improve the
marketability of such tobacco. Accordingly, the price support level for
a kind of tobacco set forth in this rule could be reduced if such a
request is made.
Determinations
The following levels of price support for the 1993 crops of various
kinds of tobacco were determined in accordance with section
106(f)(6)(A) of the 1949 Act:
------------------------------------------------------------------------
Support
level
Kind and type (cents
per
pound)
------------------------------------------------------------------------
Virginia fire-cured (type 21)................................. 139.5
KY-TN fire-cured (types 22-23)................................ 146.4
Dark air-cured (types 35-36).................................. 125.5
Virginia sun-cured (type 37).................................. 123.3
Cigar-filler and binder (type 42-44 and 53-55)................ 107.4
Cigar-filler (type 46)........................................ 83.4
------------------------------------------------------------------------
Section 106(b) of the 1949 Act provides that the ``basic support
level'' for any year is determined by multiplying the support level for
the 1959 crop of such kind of tobacco by the ratio of the average of
the index of prices paid by farmers, including wage rates, interest,
and taxes (referred to as the ``parity index'') for the three previous
calendar years to the average index of such prices paid by farmers,
including wage rates, interest, and taxes for the 1959 calendar year.
For the 1994 crop year:
(1) Average parity indexes for calendar years 1990-1993 are as
follows.
------------------------------------------------------------------------
Year Index Year Index
------------------------------------------------------------------------
1990...................... 1,265 1991...................... 1,285
1991...................... 1,298 1992...................... 1,303
1992...................... 1,298 1993...................... 1,340
Average................... 1,287 Average................... 1,309
------------------------------------------------------------------------
(2) Average parity index, calendar year 1959=298.
(3) 1993 ratio of 1,287 to 298=4.32; 1994 ratio of 1,287 to
298=4.39.
(4) Ratios times 1959 support levels and 1994 increase in basic
support levels are as follows:
----------------------------------------------------------------------------------------------------------------
1959 Basic support level\1\ Increase from 1993 to
support -------------------------- 1994
Kind and type level -------------------------
------------- 1993 (cent/ 1994 (cent/ 100% (cent/ 65% (cent/
(cent/lb.) lb.) lb.) lb.) lb.)
----------------------------------------------------------------------------------------------------------------
VA 21.......................................... 38.8 168.4 170.3 1.9 1.2
KY-Tenn 22-23.................................. 38.8 168.4 170.3 1.9 1.2
KY-Tenn 35-36.................................. 34.5 149.7 151.5 1.8 1.2
VA 37.......................................... 34.5 149.7 151.5 1.8 1.2
Cigar-filler and binder 42-44, 54-55........... 28.6 124.1 125.6 1.5 1.0
Cigar-filler 46................................ 29.7 128.9 130.4 1.5 1.0
----------------------------------------------------------------------------------------------------------------
\1\1993 ratio is 4.32, 1994 ratio is 4.39.
Section 106(d) of the 1949 Act provides that the Secretary of
Agriculture may reduce the level of support which would otherwise be
established for any grade of such kind of tobacco which the Secretary
determines will likely be in excess supply. In addition, the weighted
average of the level of support for all eligible grades of such tobacco
must, after such reduction, reflect not less than 65 percent of the
increase in the support level for such kind of tobacco which would
otherwise be established under section 106 of the Act if the support
level is higher than the support level for the preceding crop. Before
any such reduction is made, the Secretary must consult with the
associations handling price support loans and consideration must be
given to the supply and anticipated demand of such tobacco, including
the effect of such reduction on other kinds of quota tobacco. In
determining whether the supply of any grade of any kind of tobacco of a
crop will be excessive, the Secretary shall take into consideration the
domestic supply, including domestic inventories, the amount of such
tobacco pledged as security for price support loans, anticipated
domestic and export demand, based on the maturity, uniformity, and
stalk position of such tobacco.
For MY 1994, the flue-cured support level was increased by 65
percent of the formula increase to within about 9 percent of 1993's
average market price. For the kinds of tobacco that are the subject of
this rule, MY 1993 prices were further above the support level, and
overall loan receipts remained low. Only loan placements for cigar-
filler and binder (types 42-44 and 53-55) were as much as 10 percent of
production for MY 1993. Although fire-cured (type 21) and Virginia sun-
cured (type 37) supply-use ratios suggest slightly short supplies,
their respective loan associations prefer lower price support levels.
Therefore, for fire-cured tobacco (type 21), Virginia sun-cured tobacco
(type 37), and cigar-filler and binder tobacco (types 42-44 and 53-55),
the MY 1994 support levels consist of the 1993 support levels increased
by 65 percent of the difference between the 1994 ``basic support
level'' and the 1993 ``basic support level.'' The supply-use ratios for
Kentucky-Tennessee fire-cured (types 22-23) and dark air-cured (types
35-36) suggest adequate supplies. Accordingly, for these tobaccos, the
MY 1994 support level consists of the MY 1993 level of support
increased by the difference between the MY 1994 ``basic support level''
and the MY 1993 ``basic support level.'' Also, chewing tobacco, smoking
tobacco, and snuff manufacturing formulas limit the substitutability of
one of these kinds of tobacco for another. Cigarettes, the principal
outlet for flue-cured and burley tobaccos, do not require any of these
six kinds of tobacco in their blends.
Accordingly, the following determinations announced by the
Secretary of Agriculture on March 1, 1994, in accordance with section
106(f)(8)(A) of the 1949 Act are established for MY 1994 for fire-cured
(type 21), fire-cured (types 22-23), dark air-cured (types 35-36),
Virginia sun-cured (type 37), cigar-filler and binder (types 42-44 and
53-55), and cigar-filler (type 46) tobaccos.
------------------------------------------------------------------------
Support
level
Kind and type (cents
per
pound)
------------------------------------------------------------------------
Virginia fire-cured (type 21)................................. 140.7
Kentucky-Tennessee fire-cured (types 22-23)................... 148.3
Dark air-cured (types 35-36).................................. 127.3
Virginia sun-cured (type 37).................................. 124.5
Cigar-filler and binder (types 42-44 and 53-55)............... 108.4
Cigar-filler (type 46)........................................ 84.4
------------------------------------------------------------------------
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 723.113 is amended by:
A. Redesignating existing text as paragraph (a), and
B. Adding paragraph (b) to read as follows:
Sec. 723.113 Fire-cured (type 21) tobacco.
* * * * *
(b) The 1994-crop national marketing quota is 2.15 million pounds.
3. Section 723.114 is amended by:
A. Redesignating existing text as paragraph (a), and
B. Adding paragraph (b) to read as follows:
Sec. 723.114 Fire-cured (types 22-23) tobacco.
* * * * *
(b) The 1994-crop national marketing quota is 40.4 million pounds.
4. Section 723.115 is amended by:
A. Redesignating existing text as paragraph (a), and
B. Adding paragraph (b) to read as follows:
Sec. 723.115 Dark air-cured (types 35-36) tobacco.
* * * * *
(b) The 1994-crop national marketing quota is 10.6 million pounds.
5. Section 723.116 is amended by:
A. Redesignating existing text as paragraph (a), and
B. Adding paragraph (b) to read as follows:
Sec. 723.116 Sun-cured (type 37) tobacco.
* * * * *
(b) The 1994-crop national marketing quota is 131,000 pounds.
6. Section 723.117 is amended by:
A. Redesignating existing text as paragraph (a), and
B. Adding paragraph (b) to read as follows:
Sec. 723.117 Cigar-filler and binder (types 42-44 and 53-55) tobacco.
* * * * *
(b) The 1994-crop national marketing quota is 9.3 million pounds.
7. Section 723.118 is amended by:
A. Redesignating existing text as paragraph (a), and
B. Adding paragraph (b) to read as follows:
Sec. 723.118 Cigar-filler (type 46) tobacco.
* * * * *
(b) The 1994-crop national marketing quota is zero pounds.
PART 1464--TOBACCO
8. 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.
9. Section 1464.13 is amended by:
A. Redesignating existing text as paragraph (a), and
B. Adding paragraph (b) to read as follows:
Sec. 1464.13 Fire-cured (type 21) tobacco.
* * * * *
(b) The 1994-crop national price support level is 140.7 cents per
pound.
10. Section 1464.14 is amended by:
A. Redesignating existing text as paragraph (a), and
B. Adding paragraph (b) to read as follows:
Sec. 1464.14 Fire-cured (types 22-23) tobacco.
* * * * *
(b) The 1994-crop national price support level is 148.3 cents per
pound.
11. Section 1464.15 is amended by:
A. Redesignating existing text as paragraph (a), and
B. Adding paragraph (b) to read as follows:
Sec. 1464.15 Dark air-cured (types 35-36) tobacco.
* * * * *
(b) The 1994-crop national price support level is 127.3 cents per
pound.
12. Section 1464.16 is amended by:
A. Redesignating existing text as paragraph (a), and
B. Adding paragraph (b) to read as follows:
Sec. 1464.16 Virginia sun-cured (type 37) tobacco.
* * * * *
(b) The 1994-crop national price support is 124.5 cents per pound.
13. Section 1464.17 is amended by:
A. Redesignating existing text as paragraph (a), and
B. Adding paragraph (b) to read as follows:
Sec. 1464.17 Cigar-filler and binder (types 42-44 and 55-53) tobacco.
* * * * *
(b) The 1994-crop national price support level is 108.4 cents per
pound.
14. Section 1464.18 is amended by:
A. Redesignating existing text as paragraph (a), and
B. Adding paragraph (b) to read as follows:
Sec. 1464.18 Cigar-filler (type 46) tobacco.
* * * * *
(b) The 1994-crop national price support level is 84.4 cents per
pound.
Signed at Washington, DC, on May 20, 1994.
Bruce R. Weber,
Acting Administrator, Agricultural Stabilization and Conservation
Service and Executive Vice President, Commodity Credit Corporation.
[FR Doc. 94-12888 Filed 5-25-94; 8:45 am]
BILLING CODE 3410-05-P