[Federal Register Volume 61, Number 16 (Wednesday, January 24, 1996)]
[Proposed Rules]
[Pages 1855-1857]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-927]



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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service

7 CFR Part 985

[FV95-985-5PR]


Spearmint Oil Produced in the Far West; Salable Quantities and 
Allotment Percentages for the 1996-97 Marketing Year

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would establish the quantity of spearmint 
oil produced in the Far West, by class, that handlers may purchase 
from, or handle for, producers during the 1996-97 marketing year. The 
Spearmint Oil Administrative Committee (Committee), the agency 
responsible for local administration of the marketing order for 
spearmint oil produced in the Far West, recommended this rule for the 
purpose of avoiding extreme fluctuations in supplies and prices, and 
thus help to maintain stability in the spearmint oil market.

DATES: Comments must be received by February 23, 1996.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. Comments must be sent in triplicate to 
the Docket Clerk, Fruit and Vegetable Division, AMS, USDA, room 2525, 
South Building, PO Box 96456, Washington, DC 20090-6456. Comments 
should reference the docket number and the date and page number of this 
issue of the Federal Register and will be made available for public 
inspection in the Office of the Docket Clerk during regular business 
hours.

FOR FURTHER INFORMATION CONTACT: Robert J. Curry, Northwest Marketing 
Field Office, Marketing Order Administration Branch, Fruit and 
Vegetable Division, AMS, USDA, 1220 SW., Third Avenue, room 369, 
Portland, Oregon 97204; telephone: (503) 326-2724; or Caroline C. 
Thorpe, Marketing Order Administration Branch, Fruit and Vegetable 
Division, AMS, USDA, room 2525, South Building, PO Box 96456, 
Washington, DC 20090-6456; telephone: (202) 720-5127

SUPPLEMENTARY INFORMATION: This proposed rule is issued under Marketing 
Order No. 985 (7 CFR part 985), regulating the handling of spearmint 
oil produced in the Far West (Washington, Idaho, Oregon, and designated 
parts of California, Nevada, Montana, and Utah). This marketing order 
is effective under the Agricultural Marketing Agreement Act of 1937, as 
amended (7 U.S.C. 601-

[[Page 1856]]
674), hereinafter referred to as the ``Act.''
    The Department of Agriculture (Department) is issuing this rule in 
conformance with Executive Order 12866.
    This proposed rule has been reviewed under Executive Order 12778, 
Civil Justice Reform. Under the provisions of the marketing order now 
in effect, salable quantities and allotment percentages may be 
established for classes of spearmint oil produced in the Far West. This 
proposed rule would establish the quantity of spearmint oil produced in 
the Far West, by class, that may be purchased from or handled for 
producers by handlers during the 1996-97 marketing year, which begins 
on June 1, 1996. This proposed rule will not preempt any State or local 
laws, regulations, or policies, unless they present an irreconcilable 
conflict with this rule.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 608c(15)(A) of the 
Act, any handler subject to an order may file with the Secretary a 
petition stating that the order, any provision of the order, or any 
obligation imposed in connection with the order is not in accordance 
with law and request a modification of the order or to be exempted 
therefrom. A handler is afforded the opportunity for a hearing on the 
petition. After the hearing the Secretary would rule on the petition. 
The Act provides that the district court of the United States in any 
district in which the handler is an inhabitant, or has his or her 
principal place of business, has jurisdiction in equity to review the 
Secretary's ruling on the petition, provided a bill in equity is filed 
not later than 20 days after date of the entry of the ruling.
    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Administrator of the Agricultural Marketing Service 
(AMS) has considered the economic impact of this action on small 
entities.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and rules issued thereunder, are unique in that 
they are brought about through group action of essentially small 
entities acting on their own behalf. Thus, both statutes have small 
entity orientation and compatibility.
    There are 8 spearmint oil handlers subject to regulation under the 
marketing order and approximately 260 producers of spearmint oil in the 
regulated production area. Of the 260 producers, approximately 160 
producers hold Class 1 (Scotch) oil allotment base, and approximately 
145 producers hold Class 3 (Native) oil allotment base. Small 
agricultural service firms are defined by the Small Business 
Administration (13 CFR 121.601) as those having annual receipts of less 
than $5,000,000, and small agricultural producers have been defined as 
those whose annual receipts are less than $500,000. A minority of 
producers and handlers of Far West spearmint oil may be classified as 
small entities.
    The Far West spearmint oil industry is characterized by producers 
whose farming operations generally involve more than one commodity and 
whose income from farming operations is not exclusively dependent on 
the production of spearmint oil. The U.S. production of spearmint oil 
is concentrated in the Far West, primarily Washington, Idaho, and 
Oregon (part of the area covered by the marketing order). Spearmint oil 
is also produced in the Midwest. The production area covered by the 
marketing order accounts for approximately 75 percent of the annual 
U.S. production of spearmint oil.
    Pursuant to authority contained in Secs. 985.50, 985.51, and 985.52 
of the marketing order, the Committee recommended the salable 
quantities and allotment percentages for the 1996-97 marketing year at 
its September 26, 1995, meeting. The Committee recommended the 
establishment of a salable quantity and allotment percentage for Scotch 
spearmint oil in a vote of six in favor and one opposed. The member 
voting in opposition favored the establishment of a higher salable 
quantity and allotment percentage. The Committee recommended the 
establishment of a salable quantity and allotment percentage for Native 
spearmint oil in a vote of seven in favor and none opposed. The 
Chairman abstained from voting on both actions.
    This proposed rule would establish a salable quantity of 989,303 
pounds and an allotment percentage of 55 percent for Scotch spearmint 
oil, and a salable quantity of 1,074,902 pounds and an allotment 
percentage of 54 percent for Native spearmint oil. This rule would 
limit the amount of spearmint oil that handlers may purchase from, or 
handle for, producers during the 1996-97 marketing year, which begins 
on June 1, 1996. Salable quantities and allotment percentages have been 
placed into effect each season since the marketing order's inception in 
1980.
    The Committee revised its procedure for calculating the salable 
quantity and allotment percentage for Scotch spearmint oil this season 
by using a formula based on that portion of the entire North American 
market share targeted by the Far West. The Committee chose to use a 
targeted percentage of the North American market share in its 
deliberations due to the increased production of Scotch spearmint oil 
in Canada and certain domestic areas outside of the Far West production 
area. The Far West spearmint oil industry maintained approximately 72 
percent of the North American Scotch spearmint oil market share during 
1980, the marketing order's first year of operation. By 1994, this had 
gradually diminished to the point where the Far West had sales of 
Scotch spearmint oil representing approximately 52 percent of the North 
American market. Reestablishing the Far West with a majority of the 
North American market share is a priority of the Committee, while at 
the same time maintaining market stability. Although desiring to regain 
the market share level realized in 1980, the Committee plans to work at 
achieving this goal over a period of several years.
    The method of calculating the Native spearmint oil salable quantity 
and allotment percentage remains unchanged, with the primary 
consideration being price and available supply as affected by the 
estimated trade demand for Far West spearmint oil. United States 
production of Native spearmint oil is centered in the Far West which 
produces approximately 90 percent of the total supply.
    The proposed salable quantity and allotment percentage for each 
class of spearmint oil for the 1996-97 marketing year is based upon the 
Committee's recommendation and the data presented below.

(1) Class 1 (Scotch) Spearmint Oil

    (A) Estimated carry-in on June l, 1996--196,384 pounds. This number 
is derived by subtracting the estimated 1995-96 marketing year trade 
demand of 862,784 pounds from the revised 1995-96 marketing year total 
available supply of 1,059,168 pounds.
    (B) Estimated North American production (U.S. and Canada) for the 
1996-97 marketing year--1,549,316 pounds. This number is an estimate 
based on Committee information provided by producers and buyers.
    (C) Percentage of North American market targeted--64.67 percent. 
This number is an average of the recommended target percentages made at 
each of the six regional producer meetings held throughout the Far West 


[[Page 1857]]
production area during the month of September, 1995.
    (D) Total quantity of Scotch spearmint oil needed to reach targeted 
percentage--1,001,891 pounds. This number is the product of the 
estimated 1996-97 North American production and the targeted 
percentage.
    (E) Minimum amount desired to have on hand throughout the season--
191,667 pounds. This number is an average of those amounts recommended 
by producers at the six regional producer meetings, and reflects the 
Committee's commitment in regaining market share by maintaining a 
minimum quantity on hand.
    (F) Total supply required--1,193,558 pounds. This number is derived 
by adding the minimum desired on hand amount to the total quantity 
required to meet the targeted percentage.
    (G) Additional quantity required--997,174 pounds. This represents 
the actual amount of additional or new oil needed to meet the 
Committee's projections, and is computed by subtracting the estimated 
carry-in of 196,384 pounds from the total supply required of 1,193,558 
pounds.
    (H) Total allotment base for the 1996-97 marketing year--1,798,732 
pounds.
    (I) Computed allotment percentage--55 percent. This percentage is 
computed by dividing the required salable quantity by the total 
allotment base.
    (J) Recommended allotment percentage--55 percent.
    (K) The Committee's recommended salable quantity--989,303 pounds.

(2) Class 3 (Native) Spearmint Oil

    (A) Estimated carry-in on June 1, 1996--44,959 pounds. This number 
is derived by subtracting the estimated 1995-96 marketing year trade 
demand of 1,084,436 pounds from the revised 1995-96 marketing year 
total available supply of 1,129,395 pounds.
    (B) Estimated trade demand (domestic and export) for the 1996-97 
marketing year--1,084,436 pounds. This number is an estimate based on 
the average of total annual sales made between 1988 and 1994, handler 
estimates, and Committee information provided by producers and buyers.
    (C) Salable quantity required from 1996 production--1,039,477 
pounds. This number is the difference between the estimated 1996-97 
marketing year trade demand and the estimated carry-in on June 1, 1996.
    (D) Total allotment base for the 1996-97 marketing year--1,990,559 
pounds.
    (E) Computed allotment percentage--52.2 percent. This percentage is 
computed by dividing the required salable quantity by the total 
allotment base.
    (F) Recommended allotment percentage--54 percent. The Committee 
recommended a percentage slightly higher than that computed so as to 
maintain an ample supply of Native spearmint oil available for the 
market.
    (G) The Committee's recommended salable quantity--1,074,902 pounds.
    The salable quantity is the total quantity of each class of oil 
which handlers may purchase from or handle on behalf of producers 
during a marketing year. Each producer is allotted a share of the 
salable quantity by applying the allotment percentage to the producer's 
allotment base for the applicable class of spearmint oil.
    The Committee's recommended salable quantities of 989,303 pounds 
and 1,074,902 pounds, and allotment percentages of 55 percent and 54 
percent for Scotch and Native spearmint oils, respectively, are based 
on anticipated 1996-97 marketing year supply and trade demand. The 
relatively higher recommended salable quantities and allotment 
percentages for both Scotch and Native spearmint oils for the 1996-97 
marketing year, when compared to those initially recommended for the 
1995-96 marketing year, are demonstrative of the Committee's concern 
with the increasing production of spearmint oil, both inside and 
outside the marketing order production area, and the industry's desire 
to maintain a significant share of the North American market while 
maintaining the overall stability of the market.
    The proposed salable quantities are not expected to cause a 
shortage of spearmint oil supplies. Any unanticipated or additional 
market demand for spearmint oil which may develop during the marketing 
year can be satisfied by an increase in the salable quantitities. Both 
Scotch and Native spearmint oil producers who produce more than their 
annual allotments during the 1996-97 season may transfer such excess 
spearmint oil to a producer with spearmint oil production less than his 
or her annual allotment or put it into the reserve pool.
    This proposed regulation, if adopted, would be similar to those 
which have been issued in prior seasons. Costs to producers and 
handlers resulting from this proposed action are expected to be offset 
by the benefits derived from improved returns.
    The establishment of these salable quantities and allotment 
percentages would allow for anticipated market needs based on 
historical sales, changes and trends in production and demand, and 
information available to the Committee. Adoption of this proposed rule 
would also provide spearmint oil producers with information on the 
amount of oil which should be produced for next season.
    Based on available information, the Administrator of the AMS has 
determined that the issuance of this proposed rule would not have a 
significant economic impact on a substantial number of small entities.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposal. All written comments received within the 
comment period will be considered before a final determination is made 
on this matter.

List of Subjects in 7 CFR Part 985

    Marketing agreements, Oils and fats, Reporting and recordkeeping 
requirements, Spearmint oil.

    For the reasons set forth in the preamble, 7 CFR part 985 is 
proposed to be amended as follows:

PART 985--SPEARMINT OIL PRODUCED IN THE FAR WEST

    1. The authority citation for 7 CFR part 985 continues to read as 
follows:

    Authority: 7 U.S.C. 601-674.

    2. A new Sec. 985.215 is added to read as follows:

    Note: This section will not appear in the Code of Federal 
Regulations.


Sec. 985.215  Salable quantities and allotment percentages--1996-97 
marketing year.

    The salable quantity and allotment percentage for each class of 
spearmint oil during the marketing year beginning on June 1, 1996, 
shall be as follows:
    (a) Class 1 (Scotch) oil--a salable quantity of 989,303 pounds and 
an allotment percentage of 55 percent.
    (b) Class 3 (Native) oil--a salable quantity of 1,074,902 pounds 
and an allotment percentage of 54 percent.

    Dated: January 17, 1996.
Sharon Bomer Lauritsen,
Deputy Director, Fruit and Vegetable Division.
[FR Doc. 96-927 Filed 1-23-96; 8:45 am]
BILLING CODE 3410-02-P