[Federal Register Volume 61, Number 188 (Thursday, September 26, 1996)]
[Rules and Regulations]
[Pages 50423-50425]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24669]


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DEPARTMENT OF AGRICULTURE
Farm Service Agency

7 CFR Part 723

Commodity Credit Corporation

7 CFR Part 1464

RIN 0560-AE47


1996 Marketing Quota and Price Support for Burley Tobacco

AGENCIES: Farm Service Agency 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 
1996 crop of burley tobacco. The Secretary determined the

[[Page 50424]]

1996 marketing quota for burley tobacco to be 633.8 million pounds, and 
the 1996 price support level to be 173.7 cents per pound.

EFFECTIVE DATE: February 1, 1996.

FOR FURTHER INFORMATION CONTACT: Robert Tarczy, FSA, USDA, room 5750, 
South Building, P.O. Box 2415, STOP 0514, Washington, DC 20013-2415, 
telephone 202 720-5346.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This final rule has been determined to be significant for purposes 
of Executive Order 12866 and has been reviewed by OMB under Executive 
Order 12866.

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.

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.

Regulatory Flexibility Act

    It has been determined that the Regulatory Flexibility Act is not 
applicable to this final rule because the Farm Service Agency (FSA) is 
not 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.

Paperwork Reduction Act

    The amendments to 7 CFR parts 723 and 1464 set forth in this final 
rule do not contain any information collection requirements that 
require clearance through the Office of Management and Budget under the 
provisions of the Paperwork Reduction Act of 1995.

Statutory Background

    This rule is issued pursuant to the provisions of the Agricultural 
Adjustment Act of 1938 (the 1938 Act) and the Agricultural Act of 1949 
(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 rulemaking contained in 5 U.S.C. 553 or in any 
directive of the Secretary.
    On February 1, 1996, the Secretary announced the national marketing 
quota and the price support level for the 1996 crop of burley tobacco. 
A number of related determinations were made at the same time, which 
this final rule also affirms.

Marketing Quota

    Section 319(c)(3)(A)(B) of the 1938 Act provides, in part, that the 
national marketing quota for a marketing year for burley 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 burley 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 3 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 319(c)(3)(C) further provides that, with respect to the 
1995 and 1996 marketing years, any reduction in the national marketing 
quota being determined shall not exceed 10 percent of the previous 
year's national marketing quota. However, if actual loan stocks exceed 
the prescribed reserve stock level by 50 percent the reduction limit 
could be waived and the Secretary could then set the quota according to 
the three-component formula (plus or minus 3 percent). The reserve 
stock level is defined in section 301(b)(14)(D) of the 1938 Act as the 
greater of 50 million pounds or 15 percent of the national marketing 
quota for burley 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 1996 crop of burley tobacco by January 15, 
1996. Five such manufacturers were required to submit such a statement 
for the 1996 crop and the total of their intended purchases for the 
1996 crop is 424.0 million pounds. The 3-year average of exports is 
155.4 million pounds.
    The national marketing quota for the 1995 crop year was 549.0 
million pounds (60 FR 27867). Thus, in accordance with section 301 
(b)(14)(D), the reserve stock level for use in determining the 1996 
marketing quota for burley tobacco is 82.4 million pounds.
    As of January 26, 1996, the Burley Tobacco Growers Cooperative 
Association and Burley Stabilization Corporation had in their 
inventories 28.0 million pounds of burley tobacco (excluding pre-1994 
stocks committed to be purchased by manufacturers and covered by 
deferred sales). Accordingly, the adjustment necessary to maintain loan 
stocks at the reserve supply level is an increase of 54.4 million 
pounds.
    The total of the three marketing quota components for the 1996-97 
marketing year is 633.8 million pounds. USDA did not use its 
discretionary authority to increase or decrease the three-component 
total by up to 3 percent because the Secretary determined that the 
1996/97 supply would be more than ample at the formula level. 
Accordingly, the national marketing quota for the marketing year 
beginning October 1, 1996, for burley tobacco is 633.8 million pounds.
    In accordance with section 319(c) of the 1938 Act, the Secretary is 
authorized to establish a national reserve from the national quota in 
an amount equivalent to not more than 1 percent of the national quota 
for the purpose of making corrections in farm quotas to adjust for 
inequities and establish quotas for new farms. The Secretary has 
determined that a national reserve for the 1996 crop of burley tobacco 
of 2,429,000 pounds is adequate for these purposes.

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 1996 crop of burley 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 1996 crop of burley tobacco shall be:
    (1) The level, in cents per pound, at which the 1995 crop of burley 
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 burley tobacco on 
the United States auction markets, as

[[Page 50425]]

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 burley 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 1.8 cents per pound. The 
difference in the cost index from January 1 to December 31, 1995, is 
1.8 cents per pound. Applying these components to the price support 
formula (1.8 cents per pound, two-thirds weight; 1.8 cents per pound, 
one-third weight) results in a weighted total of 1.8 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 1996 crop of burley tobacco will be 
supported at 173.7 cents per pound, 1.2 cents higher than in 1995.

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, tobacco, 
reporting and recordkeeping requirements, 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, 1314b, 1314b-1, 
1314b-2, 1314c, 1314d, 1314e, 1314f, 1314i, 1315, 1316, 1362, 1363, 
1372-75, 1421, 1445-1, and 1445-2.

    2. Section 723.112 is amended by adding paragraph (d) to read as 
follows:


Sec. 723.112  Burley (type 31) tobacco.

* * * * *
    (d) The 1996 crop national marketing quota is 633.8 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 1464.19 is amended by adding paragraph (d) to read as 
follows:


Sec. 1464.19  Burley (type 31) tobacco.

* * * * *
    (d) The 1996 crop national price support level is 173.7 cents per 
pound.

    Signed at Washington, DC, on September 17, 1996.
Bruce R. Weber,
Administrator, Farm Service Agency and Executive Vice President, 
Commodity Credit Corporation.
[FR Doc. 96-24669 Filed 9-25-96; 8:45 am]
BILLING CODE 3410-05-P