[Federal Register Volume 59, Number 147 (Tuesday, August 2, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-18656]


  Federal Register / Vol. 59, No. 147 / Tuesday, August 2, 1994 /
  
[[Page Unknown]]

[Federal Register: August 2, 1994]


                                                   VOL. 59, NO. 147

                                            Tuesday, August 2, 1994

DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Parts 1413 and 1421

RINS 0560-AC75, 0560-AD02, and 0560-AD26

 

1994 Wheat and Feed Grain Acreage Reduction Programs and the 1994 
Oilseed Price Support Rates

AGENCY: Commodity Credit Corporation, USDA.

ACTION: Final rule.

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

SUMMARY: The Commodity Credit Corporation (CCC) issued proposed rules 
with respect to the 1994 production adjustment program for wheat on 
April 6, 1993, and for feed grains on August 5, 1993, which is 
conducted by the CCC in accordance with the Agricultural Act of 1949 
(1949 Act), as amended. This final rule amends the regulations to set 
forth the following determinations: the Acreage Reduction Program (ARP) 
percentages for the 1994 crops of wheat, corn, grain sorghum, barley, 
and oats will be zero percent; a paid land diversion (PLD) program will 
not be implemented for the 1994-crop of wheat and feed grains; 
producers of malting barley must, as a condition of eligibility for 
feed grain loans, purchases, and payments, comply with requirements of 
the zero percent ARP for the 1994 crop of barley; and the 1994-crop 
price support rates per bushel will be $2.58 for wheat, $1.89 for corn, 
$1.80 for grain sorghum, $1.54 for barley, $0.97 for oats, $1.61 for 
rye, $4.92 for soybeans, and $0.087 per pound for canola, flaxseed, 
mustard seed, rapeseed, safflower, and sunflower seed. These actions 
are required by section 107B, in the case of wheat, section 105B, in 
the case of feed grains, and section 205, in the case of oilseeds, of 
the 1949 Act.

EFFECTIVE DATE: August 2, 1994.

FOR FURTHER INFORMATION CONTACT: Philip W. Sronce, Director, Grains 
Analysis Division, Agricultural Stabilization and Conservation Service, 
United States Department of Agriculture (USDA), P.O. Box 2415, 
Washington, DC 20013-2415 or call 202-720-4418.

SUPPLEMENTARY INFORMATION:

Final Regulatory Impact Analysis

    The Final Regulatory Impact Analysis describing the options 
considered in developing this rule and the impact of the implementation 
of each option is available on request from the above-named individual.

Executive Order 12866

    This final rule is issued in conformance with Executive Order 
12866. Based on information compiled by the USDA, it has been 
determined to be ``economically significant'' because it would have an 
annual effect on the economy of more than $100 million and would 
materially alter the budgetary impact of entitlements, or loan programs 
or rights and obligations of recipients thereof. Budget outlays for 
1994-crop deficiency payments are expected to range from $1.3 billion 
to $1.8 billion for wheat and from $2.5 billion to $3.0 billion for 
feed grains. This final rule 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; would not create a serious 
inconsistency or otherwise interfere with an action taken or planned by 
another agency; and 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.

Federal Assistance Programs

    The titles and numbers of the Federal Assistance Programs, as found 
in the Catalog of Federal Domestic Assistance, to which this rule 
applies, are as follows: 

------------------------------------------------------------------------
                            Titles                              Numbers 
------------------------------------------------------------------------
Commodity Loans and Purchases................................     10.051
Feed Grain Production Stabilization..........................     10.055
Wheat Production Stabilization...............................    10.058 
------------------------------------------------------------------------

Regulatory Flexibility Act

    It has been determined that the Regulatory Flexibility Act is 
applicable to this final rule because the CCC is required by sections 
107B(o) and 105B(o) of the 1949 Act to publish a notice of proposed 
rulemaking with respect to certain provisions of this rule. A Final 
Regulatory Flexibility Analysis for the 1994 Wheat and Feed Grain ARP 
was prepared as part of the Final Regulatory Impact Analysis. Copies of 
this analysis are available from the above-named individual.

Executive Order 12778

    This final rule has been reviewed in accordance with Executive 
Order 12778. The provisions of this final rule do not preempt State 
laws, are not retroactive, and do not require the exhaustion of any 
administrative appeal remedies.

Environmental Evaluation

    It has been determined by an environmental evaluation that this 
action will not have a significant impact on the quality of the human 
environment. Therefore, neither an Environmental Assessment nor an 
Environmental Impact Statement is needed.

Executive Order 12372

    This program/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 1413 and 1421 set forth in this final 
rule do not contain information collections that require clearance by 
the Office of Management and Budget under the Paperwork Reduction Act 
of 1980 (44 U.S.C. 35).

Background

    This final rule amends 7 CFR parts 1413 and 1421 to set forth 
determinations of the 1994 production adjustment programs for wheat and 
feed grains and the 1994 price support rates for wheat, feed grains, 
and oilseeds. General descriptions of the statutory basis for the 1994 
Wheat and Feed Grain Program determinations in this final rule were set 
forth at 58 FR 17087 (April 6, 1993) and at 58 FR 41641 (August 5, 
1993), respectively.

1994 Wheat Program

    The public was asked to comment on whether the 1994 wheat ARP 
percentage should be set at 5 percent, 10 percent, or 15 percent or 
another percentage between 0 and 15 percent. Comments received during 
the comment period are summarized as follows:
    A total of 45 respondents commented on the ARP level. Table 1 shows 
a breakdown of the comments received by type of respondent. 

                   Table 1.--Summary of Comments on 1994 Wheat ARP Levels, by Respondent Type                   
----------------------------------------------------------------------------------------------------------------
                                                                         ARP Percentage \1\                     
                                                  --------------------------------------------------------------
                       Item                                                                      Other          
                                                   No ARP     0%       5%       10%      15%     >15%     Total 
----------------------------------------------------------------------------------------------------------------
Farm Organizations...............................               8.0      2.0      1.0                       11.0
Agri-businesses..................................      1.0      8.0                                          9.0
Individual Producers.............................               6.0      1.0      3.5     12.0      2.5     25.0
                                                  --------------------------------------------------------------
  Total..........................................      1.0     22.0      3.0      4.5     12.0      2.5     45.0
----------------------------------------------------------------------------------------------------------------
\1\A comment that gives a range is considered as half of a comment for each of the end points. For example, 0%  
  to 5% is counted as 0.5 for 0% and 0.5%.                                                                      

    Respondents favored lower ARP percentages for the following 
reasons: (1) Wheat-sector net income is higher with lower ARP levels; 
(2) the need to send a message to our competitors that the U.S. will 
not unilaterally reduce production and abandon world markets; (3) 
higher payment acres after flexibility; and (4) idling acres under the 
conservation reserve program and annual programs hurt rural economic 
activity.
    Advocates for higher ARP percentages noted that higher ARP levels: 
(1) result in higher wheat prices; (2) result in lower Government 
costs; and (3) reduce concerns over stock-building.
    After considering these comments, the Secretary of Agriculture (the 
Secretary) announced, on May 28, 1993, an ARP of zero percent. The 
Secretary was authorized to make adjustments in the 1994 ARP percentage 
no later than July 31, 1993. No change was made because estimated 1994 
wheat supplies did not change significantly (up 4 percent) from the May 
1993 supply estimates. The Secretary determined that a zero percent ARP 
for wheat would maintain U.S. competitiveness in world markets while 
balancing the risks of excessive supplies and possible shortages, 
signal U.S. competitors that the U.S. will not idle acreage to support 
the world price of wheat, and signal to domestic and foreign customers 
that the U.S. will be a reliable supplier.
    The zero-percent ARP option is the only option under which U.S. 
wheat supplies are estimated to increase over 1993 levels. Table 2 
compares supply and demand estimates under four different ARP options 
based on May 1993 estimates (the month in which the ARP decision was 
made). 

  Table 2.--Comparison of 1994 Wheat Supply and Demand Estimates Under  
                          Various ARP Options                           
------------------------------------------------------------------------
                                               1994 ARP options         
                Item                 -----------------------------------
                                         1        2        3        4   
------------------------------------------------------------------------
ARP (percent).......................        0        5       10       15
Participation (percent).............       86       85       83       81
Planted Acreage (mil. ac.)..........     72.5     70.7     68.4     65.8
Production (mil. bu.)...............    2,414    2,355    2,281    2,200
Domestic User (mil. bu.)............    1,225    1,210    1,190    1,170
Exports (mil. bu.)..................    1,250    1,240    1,230    1,215
Ending Stocks 8/31 (mil. bu.).......      677      643      599      553
Average Market Price ($ per bu.)....     2.65     2.70     2.80     2.92
Deficiency Payments (mil. $)........    2,343    2,096    1,763    1,431
Net Income to Wheat Producers (mil.                                     
 $).................................    5,420    5,184    4,956   4,755 
------------------------------------------------------------------------

    The announced ARP level of zero percent is 15 percentage points 
below the statutory maximum of 15 percent. The 1949 Act provides that 
an ARP of not more than 15 percent may be implemented if the ending 
stocks-to-use (S/U) ratio for the previous marketing year is equal to 
or less than 40 percent. When the 1994 ARP was announced, the S/U for 
the 1993 marketing year was estimated to be 27.0 percent. Because the 
1993 S/U level is below 34 percent, the minimum 7-percent ARP imposed 
by section 1104 of the Agricultural Reconciliation Act of 1990 does not 
apply.
    A PLD will not be implemented for 1994 wheat because it is 
unnecessary given the supply and use conditions which led to an ARP of 
0 percent.

1994 Feed Grain Program

    The public was asked to comment on the appropriate 1994 ARP 
percentage for corn, grain sorghum, and barley and on whether or not 
malting barley producers, as a condition of eligibility for feed grain 
loans, purchases, and payments, should be exempt from complying with 
requirements of the feed grain ARP. The statutory range for 
establishing the 1994 ARP percentages, based on the supply and demand 
estimates published in the proposed rule, was 0 to 12.5 percent for 
corn and 0 to 20 percent for grain sorghum and barley. The oats ARP 
percentage is statutorily mandated at zero percent.
    Comments received during the specified comment period are 
summarized as follows:
    A total of 34 respondents commented on the ARP percentage. Twenty-
nine of the respondents commented on the corn ARP percentage, 14 of the 
respondents commented on the grain sorghum ARP percentage, and 17 of 
the respondents commented on the barley ARP percentage. Table 3 shows a 
breakdown of the comments received on the corn, grain sorghum, and 
barley ARP percentage by type of respondent.

       Table 3.--Summary of Comments on the 1994 Feed Grain ARP Levels, by Commodity and Respondent Type        
----------------------------------------------------------------------------------------------------------------
                                                                         ARP percentage                         
                     Item                      -----------------------------------------------------------------
                                                   0%         5%        7.5%        10%       12.5%      >12.5% 
----------------------------------------------------------------------------------------------------------------
Corn:                                                                                                           
    Farm Organizations........................          1          0          1          0          1          0
    Agri-businesses...........................          5          0          0          1          1          0
    Individual/Producers......................          1          0          0          0          1          0
    Others....................................          1          0          0          8          7          1
                                               -----------------------------------------------------------------
        Total.................................          8          0          1          9         10          1
Grain Sorghum:                                                                                                  
    Farm Organizations........................          1          0          0          0          0          0
    Agri-businesses...........................          4          0          0          1          0          0
    Individual/Producers......................          1          0          0          0          0          0
    Others....................................          1          0          0          5          0          1
                                               -----------------------------------------------------------------
        Total.................................          7          0          0          6          0          1
Barley:                                                                                                         
    Farm Organizations........................          5          0          0          0          4          0
    Agri-businesses...........................          4          0          0          1          6          0
    Individual/Producers......................          1          0          0          0          2          0
    Others....................................          1          0          0          5         65          0
                                               -----------------------------------------------------------------
        Total.................................         11          0          0          6         77          0
----------------------------------------------------------------------------------------------------------------

    In general, most individual producers favored an ARP level of 10 
percent or higher while most farm organization and agri-business 
respondents favored an ARP level of 7.5 percent or less.
    Respondents favoring the lower ARP percentages noted that the U.S. 
needs to produce more to take advantage of export opportunities and 
confirmed USDA's analysis that a lower ARP level results in higher 
producer incomes. Advocates for a zero-percent barley ARP indicated the 
need for adequate supplies to aggressively implement the Export 
Enhancement Program for barley.
    Respondents favored higher ARP percentages because feed grain 
prices would be higher, Government costs would be lower, and the rural 
economy would improve.
    Two respondents commented on whether or not malting barley 
producers should be exempt from the 1994 ARP requirement for barley. 
One respondent favored and one respondent opposed the malting barley 
exemption.
    After considering these comments, the Secretary announced on 
September 30, 1993, an ARP level of 5 percent for corn, and 0 percent 
for grain sorghum, barley, and oats, and that malting barley producers 
would not be exempt from complying with the 1994 barley ARP 
requirements.
    The Secretary was authorized to make adjustments in the 1994 ARP 
percentages no later than November 15, 1993. On November 15, 1993, the 
Secretary announced that the 1994 level for corn would be lowered from 
5 percent to 0 percent. A change was warranted because 1994 feed grain 
supplies had decreased 8 percent since the September announcement.
    The Secretary determined that zero-percent ARP's for corn, grain 
sorghum, and barley would maintain U.S. competitiveness in world 
markets, provide adequate supplies of quality feed and food for 
domestic and foreign utilization, and support farm income.
    The corn ARP level of 0 percent is 12.5 percentage points below the 
statutory maximum of 12.5 percent. The 1949 Act provides that an ARP of 
0 to 12.5 percent may be implemented if the corn ending S/U ratio for 
the previous marketing year is equal to or less than 25 percent. The 
corn ending S/U for the 1993/94 marketing year was estimated to be 16.6 
percent when the 1994 ARP levels were announced on September 30 and 
11.4 percent when the corn ARP was lowered on November 15. In the case 
of grain sorghum and barley, the 1949 Act provides for ARP percentages 
from 0 to 20 percent. Section 1104 of the Agricultural Reconciliation 
Act of 1990 provides for a minimum 7.5 percent ARP for the 1994 crop 
unless the 1993/94 corn ending S/U ratio is less than 20 percent. Since 
the 1993/94 corn S/U ratios estimated on September 30 and on November 
15 were below 20 percent, the 7.5-percent minimum ARP does not apply.
    Table 4 shows the three different 1994 feed grain ARP options that 
were considered when determining the final 1994 ARP percentages. 

                 Table 4.--1994 Feed Grain ARP Options                  
------------------------------------------------------------------------
                                                    1994 ARP Options    
                                                     (percentages)      
                    Crop                      --------------------------
                                                  1        2        3   
------------------------------------------------------------------------
Corn.........................................        0        5     12.5
Grain Sorghum................................        0        0        5
Barley.......................................        0        0        5
------------------------------------------------------------------------

    Tables 5 through 7 compare the supply and demand estimates of three 
different 1994 ARP options based on November 1993 estimates for corn, 
grain sorghum, and barley. 

   Table 5.--Comparison of 1994 Corn Supply and Demand Estimates Under  
                          Various ARP Options                           
------------------------------------------------------------------------
                                                  1994 ARP options      
                   Item                    -----------------------------
                                               1         2          3   
------------------------------------------------------------------------
ARP (percent).............................         0         5      12.5
Participation (percent)...................        74        71        65
Planted Acreage (mil. ac.)................      79.5      77.5      74.7
Production (mil. bu.).....................     8,870     8,645     8,325
Domestic Use (mil. bu.)...................     6,940     6,900     6,815
Exports (mil. bu.)........................     1,420     1,400     1,360
Ending Stocks 8/31 (mil. bu.).............     1,396     1,231     1,036
Average Market Price ($ per bu.)..........      2.32      2.40      2.50
Deficiency Payments (mil. $)..............     2,203     1,618       959
Net Income to Corn Producers (mil. $).....    11,633    11,450    11,186
------------------------------------------------------------------------


 Table 6.--Comparison of 1994 Grain Sorghum Supply and Demand Estimates 
                       Under Various ARP Options                        
------------------------------------------------------------------------
                                                  1994 ARP options      
                   Item                    -----------------------------
                                               1         2          3   
------------------------------------------------------------------------
ARP (percent).............................         0         0         5
Participation (percent)...................        76        75        69
Planted Acreage (mil. ac.)................      11.3      11.3      11.1
Production (mil. bu.).....................       680       680       665
Domestic Use (mil. bu.)...................       413       418       403
Exports (mil. bu.)........................       225       222       222
Ending Stocks 8/31 (mil. bu.).............       120       118       118
Average Market Price ($ per bu.)..........      2.12      2.17      2.30
Deficiency Payments (mil. $)..............       230       203       125
Net Income to Sorghum Producers (mil. $)..       835       844       829
------------------------------------------------------------------------


  Table 7.--Comparison of 1994 Barley Supply and Demand Estimates Under 
                          Various ARP Options                           
------------------------------------------------------------------------
                                                  1994 ARP options      
                   Item                    -----------------------------
                                               1         2          3   
------------------------------------------------------------------------
ARP (percent).............................         0         0         5
Participation (percent)...................        79        75        76
Planted Acreage (mil. bu.)................       8.0       8.0       7.8
Production (mil. bu.).....................       430       430       420
Domestic Use (mil. bu.)...................       380       380       375
Exports (mil. bu.)........................        85        84        84
Ending Stocks 5/13 (mil. bu.).............       122       123       118
Average Market Price ($ per bu.)..........      2.10      2.15      2.25
Deficiency Payments (mil. $)..............       136       123        91
Net Income to Barley Producers (mil. $)...       631       641       639
------------------------------------------------------------------------

    Malting barley producers will not be exempted from complying with 
the barley ARP requirement because exempting them would increase the 
complexity of the program and increase program outlays.
    Acreage Reduction Percentage. In accordance with sections 
107B(e)(1) and 105B(e)(1) of the 1949 Act, the ARP has been established 
with respect to the 1994 crop of corn, grain sorghum, barley, and oats 
at 0 percent. Accordingly, producers will not be required to reduce 
their 1994 acreage of corn, grain sorghum, and barley for harvest from 
the crop acreage base established for feed grains for a farm in order 
to be eligible for price support loans, purchase, and payments for the 
respective feed grain.
    Paid Land Diversion. In accordance with sections 107B(e)(5) and 
105B(e)(5) of the 1949 Act, a PLD program will not be implemented for 
the 1994 crops of wheat and feed grains.
    Malting Barley Exemption. In accordance with section 105B(e)(2)(G) 
of the 1949 Act, producers of malting barley shall as a condition of 
eligibility of feed grain loans, purchases and payments, comply with 
the requirements of the zero-percent ARP for the 1994 crop of barley.
    Price Support Rates. In accordance with sections 107B(a), 105B(a), 
and 205 of the 1949 Act, the price support rates have been established 
with respect to the 1994 crops of wheat at $2.58 per bushel, corn at 
$1.89 per bushel, grain sorghum at $1.80 per bushel, barley at $1.54 
per bushel, oats at $0.97 per bushel, rye at $1.61 per bushel, soybeans 
at $4.92 per bushel, and canola, flaxseed, mustard seed, rapeseed, 
safflower, and sunflower seed at $0.087 per pound.

List of Subjects

7 CFR Part 1413

    Acreage allotments, Cotton, Disaster assistance, Feed grains, Price 
support programs, Reporting and recordkeeping requirements, Rice, Soil 
conservation, Wheat.

7 CFR Part 1421

    Grains, Loan programs--agriculture, Oilseeds, Peanuts, Price 
support programs, Reporting and recordkeeping requirements, Soybeans, 
Surety bonds, Warehouses.

    Accordingly, 7 CFR parts 1413 and 1421 are amended as follows:

PART 1413--FEED GRAIN, RICE, UPLAND AND EXTRA LONG STAPLE COTTON, 
WHEAT AND RELATED PROGRAMS

    1. The authority citation for 7 CFR part 1413 continues to read as 
follows:

    Authority: 7 U.S.C. 1308, 1308a, 1309, 1441-2, 1444-2, 1444f,
    1445b-3a, 1461-1469; 15 U.S.C. 714b and 714c.

    2. Section 1413.54 is amended by:
    A. Revising paragraph (a)(1)(iii) and adding paragraph (a)(1)(iv),
    B. Revising paragraphs (a)(2)(iii)(B) and (a)(2)(iii)(C) and adding 
paragraph (a)(2)(iv),
    C. Republishing paragraph (d)(4) introductory text, and adding 
paragraphs (d)(4)(i) and (d)(4)(ii), and
    D. Revising paragraph (e) to read as follows:


Sec. 1413.54  Acreage reduction program provisions.

    (a) * * *
    (1) * * *
    (iii) 1993 wheat, 0 percent; and
    (iv) 1994 wheat, 0 percent.
    (2) * * *
    (iii) * * *
    (B) Grain sorghum, 5 percent
    (C) Barley and oats, 0 percent; and
    (iv) For the 1994 crop: corn, grain sorghum, barley, and oats, 0 
percent.
* * * * *
    (d) * * *
    (4) For the 1994 crop:
    (i) Shall not be made available to producers of wheat,
    (ii) Shall not be made available to producers of feed grains.
* * * * *
    (e) With respect to the 1991, 1992, 1993, and 1994 crop years, in 
order to receive feed grain loans, purchases, and payments in 
accordance with this part and part 1421 of this title, producers of 
malting barley must comply with the acreage reduction requirements of 
this part.
* * * * *

PART 1421--GRAINS AND SIMILARLY HANDLED COMMODITIES

    3. The authority citation for 7 CFR part 1421 continues to read as 
follows:

    Authority: 7 U.S.C. 1421, 1423, 1425, 1441z, 1444f-1, 1445b-3a, 
1445c-3, 1445e, and 1446f; 15 U.S.C. 714b and 714c.

    4. In Sec. 1421.7, paragraphs (b)(1)(iv), (b)(2)(iv), (b)(3)(iv), 
(b)(4)(iv), (b)(5)(iv), (b)(6)(iv), (b)(9)(iv), and (b)(10)(iv) are 
added to read as follows:


Sec. 1421.7  Adjustment of basic support rates.

* * * * *
    (b) * * *
    (1) * * *
    (iv) 1994 Wheat--$2.58 per bushel;
    (2) * * *
    (iv) 1994 Corn--$1.89 per bushel;
    (3) * * *
    (iv) 1994 Barley--$1.54 per bushel;
    (4) * * *
    (iv) 1994 Oats--$0.97 per bushel;
    (5) * * *
    (iv) 1994 Grain sorghum--$1.80 per bushel;
    (6) * * *
    (iv) 1994 Rye--$1.61 per bushel;
* * * * *
    (9) * * *
    (iv) 1994 Soybeans--$4.92 per bushel;
    (10) * * *
    (iv) 1994 Canola, flaxseed, mustard seed, rapeseed, safflower, and 
sunflower seed--$0.087 per pound.
* * * * *
    Signed on July 20, 1994 at Washington, DC.
Bruce R. Weber,
Acting Executive Vice President, Commodity Credit Corporation.
[FR Doc. 94-18656 Filed 8-1-94; 8:45 am]
BILLING CODE 3410-05-P