[Federal Register Volume 62, Number 112 (Wednesday, June 11, 1997)]
[Rules and Regulations]
[Pages 31704-31707]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-15253]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 985
[FV96-985-3 FIR]
Spearmint Oil Produced in the Far West; Revision of the Salable
Quantity and Allotment Percentage for Class 3 (Native) Spearmint Oil
for the 1996-97 Marketing Year
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: The Department of Agriculture (Department) is adopting as a
final rule, without change, an interim final rule increasing the
quantity of Class 3 (Native) spearmint oil produced in the Far West
that handlers may purchase from, or handle for, producers during the
1996-97 marketing year. This rule was recommended by the Spearmint Oil
Administrative Committee (Committee), the agency responsible for local
administration of the marketing order for spearmint oil produced in the
Far West. The Committee recommended this rule to avoid extreme
fluctuations in supplies and prices and thus help to maintain stability
in the Far West spearmint oil market.
EFFECTIVE DATE: June 11, 1997.
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 97204-2807; telephone: (503) 326-2043; Fax: (503) 326-
7440; or Caroline C. Thorpe, Marketing Order Administration Branch,
Fruit and Vegetable Division, AMS, USDA, room 2525, South Building,
P.O. Box 96456, Washington, DC 20090-6456; telephone: (202) 720-8139;
Fax: (202) 720-5698. Small businesses may request information on
compliance with this regulation by contacting: Jay Guerber, Marketing
Order Administration Branch, Fruit and Vegetable Division, AMS, USDA,
P.O. Box 96456, room 2525-S, Washington, DC 20090-6456; telephone (202)
720-2491; Fax: (202) 720-5698.
SUPPLEMENTARY INFORMATION: This 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, designated parts
of Nevada, and Utah), hereinafter referred to as the ``order.'' This
order is effective under the Agricultural Marketing Agreement Act of
1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the
``Act.''
[[Page 31705]]
The Department is issuing this rule in conformance with Executive
Order 12866.
This rule has been reviewed under Executive Order 12988, 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 rule
continues an increase in the quantity of Native spearmint oil produced
in the Far West that may be purchased from or handled for producers by
handlers during the 1996-97 marketing year, which ended on May 31,
1997. This 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 to review the Secretary's
ruling on the petition, provided an action is filed not later than 20
days after the date of the entry of the ruling.
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 order). Spearmint oil is also
produced in the Midwest. The production area covered by the order
normally accounts for approximately 75 percent of the annual U.S.
production of spearmint oil.
This rule finalizes an interim final rule that increased the
quantity of Native spearmint oil that handlers may purchase from, or
handle for, producers during the 1996-97 marketing year, which ends on
May 31, 1997. Thus, this rule finalizes the increase in the salable
quantity from 1,074,902 pounds to 1,213,692 pounds and the allotment
percentage from 54 percent to 61 percent for Native spearmint oil for
the 1996-97 marketing year.
The salable quantity is the total quantity of each class of oil
that handlers may purchase from, or handle for, producers during a
marketing year. The salable quantity calculated by the Committee is
based on the estimated trade demand. The total salable quantity is
divided by the total industry allotment base to determine an allotment
percentage. Each producer is allotted a share of the salable quantity
by applying the allotment percentage to the producer's individual
allotment base for the applicable class of spearmint oil.
The initial salable quantity and allotment percentages for Scotch
and Native spearmint oils for the 1996-97 marketing year were
recommended by the Committee at its September 26, 1995, meeting. The
Committee recommended salable quantities of 989,303 pounds and
1,074,902 pounds, and allotment percentages of 55 percent and 54
percent, respectively, for Scotch and Native spearmint oils. A proposed
rule was published in the January 24, 1996, issue of the Federal
Register (61 FR 1855). Comments on the proposed rule were solicited
from interested persons until February 23, 1996. No comments were
received. Accordingly, based upon analysis of available information, a
final rule establishing the salable quantities and allotment
percentages for Scotch and Native spearmint oils for the 1996-97
marketing year was published in the March 20, 1996, issue of the
Federal Register (61 FR 11291).
Pursuant to authority contained in Secs. 985.50, 985.51, and 985.52
of the order, at its November 14, 1996, meeting, the Committee
unanimously recommended that the allotment percentage for Native
spearmint oil for the 1996-97 marketing year be increased by 7 percent
from 54 percent to 61 percent. This final rule increases the 1996-97
marketing year salable quantity of 1,074,902 pounds to 1,213,692
pounds.
However, some Native spearmint oil producers did not produce all of
their individual salable quantities for the 1996-97 marketing year, or
fill their deficiencies from the prior year's production. The marketing
order authorizes such producers to have their deficiencies filled by
other producers who have production in excess of their salable
quantities. This is optional for producers, but must be done before
November 1 of each marketing year.
The original total industry allotment base for Native spearmint oil
for 1996-97 was established at 1,990,559 pounds and was revised to
1,989,659 pounds to reflect loss of base due to non-production of
producer's total annual allotments. This adjustment resulted in a 900
pound loss of total industry base, which is reflected in the
calculations for the revised salable quantity.
This final rule finalizes the interim final rule that made an
additional amount of Native spearmint oil available by increasing the
salable quantity which releases oil from the reserve pool. Only
producers with Native spearmint oil in the reserve pool will be able to
use this increase in the salable quantity. Prior to November 1, 1996,
producers without reserve pool oil or producers with an insufficient
supply of reserve oil could have deficiencies in meeting their salable
quantities filled by producers having excess Native spearmint oil. If
all producers could use their salable quantity, this 7 percent increase
in the allotment percentage would have made an additional 135,276
pounds of Native spearmint oil available (1,989,659 x 7 percent).
However, Native spearmint oil producers having 25,546 pounds of Native
spearmint oil will not be able to use their reserve pool deficiencies
this marketing year. Deficiencies usually exist because of unplanned
problems that may reduce spearmint production. Thus, rather than
135,276 additional pounds being made available, this action continues
to make 113,730 additional pounds of Native spearmint oil available to
the market.
The following table summarizes the Committee recommendation:
Native Spearmint Oil Recommendation
(a) Actual Carry In on June 1, 1996: 45,632 pounds
(b) 1995-96 Salable Quantity: 1,074,902 pounds
(c) 1995-96 Available Supply: 1,120,534 pounds (a + b)
(d) Total Sales as of November 14, 1996: 1,036,058 pounds
(e) Calculated Available Supply as of November 14, 1996: 84,476 pounds
(c-d)
(f) Reserve Deficiency Affecting Salable Quantity: 25,546 pounds
(g) Revised Total Allotment Base: 1,989,659 pounds
(h) Recommended Allotment Percentage as of November 14, 1996: 61
percent
(i) Calculated Revised Salable Quantity: 1,213,692 pounds (g x h)
(j) Actual Oil Available as Salable Quantity: 1,188,146 pounds (i-f)
The Department, based on its analysis of available information, has
determined that an allotment percentage of 61 percent should be
established for Native spearmint oil for the 1996-97 marketing year.
This percentage will provide an
[[Page 31706]]
increased salable quantity of 1,213,692 and a new allotment percentage
from 54 percent to 61 percent for Native spearmint oil for the 1996-97
marketing year.
This rule relaxes the regulation of Native spearmint oil and will
allow growers to meet market needs and improved returns. In conjunction
with the issuance of this rule, the Department has reviewed the
Committee's revised marketing policy statement for the 1996-97
marketing year. The Committee's marketing policy statement has been
reviewed under the provisions as set forth in 7 CFR 985.50 and with
other USDA guidelines.
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), AMS has considered the economic impact of this action on
small entities. Accordingly, AMS has prepared this final regulatory
flexibility analysis.
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 250 producers of spearmint oil in the
regulated production area. Of the 250 producers, approximately 135
producers hold Class 1 (Scotch) oil allotment base, and approximately
115 producers hold Class 3 (Native) oil allotment base. Small
agricultural service firms are defined by the Small Business
Administration (SBA)(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.
Based on the SBA's definition of small entities, it is estimated
that none of the eight handlers regulated by the order would be
considered small entities. All of the handlers are large corporations
involved in the international trading of essential oils and the
products of such essential oils. It is also estimated that 20 of the
135 Scotch spearmint oil producers and 10 of the 115 Native spearmint
oil producers would be classified as small entities under the SBA
definition. This is based on production information gathered from
assessments. Thus, a majority of handlers and producers of Far West
spearmint oil may not 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. Crop rotation is an essential cultural
practice in the production of spearmint for weed, insect, and disease
control. A normal spearmint producing operation would have enough
acreage for rotation such that the total acreage required to produce
the crop would be about one-third spearmint and two-thirds rotational
crops. An average spearmint producing farm would thus have to have
considerably more acreage than would be planted to spearmint during any
given season. To remain economically viable with the added costs
associated with spearmint production, most spearmint producing farms
would fall into the category of large businesses.
Small spearmint oil producers represent a minority of farming
operations and are more vulnerable to market fluctuations. Such small
farmers generally need to market their entire annual crop and do not
have the resources to cushion seasons with poor spearmint oil returns.
Conversely, large diversified producers have the potential to endure
one or more seasons of poor spearmint oil markets because of stronger
incomes from alternate crops which could support the operation for a
period of time. Despite the advantage of larger producers, increasing
the Native salable quantity and allotment percentage will help both
large and small producers by improving returns. In addition, this
change may potentially benefit the small producer more than large
producers. This is because the change ensures that small producers are
more likely to maintain a profitable cash flow and meet annual
expenses.
In making this latest recommendation, the Committee considered all
available information on supply and demand. The 1996-97 marketing year
began on June 1, 1996. As required under Sec. 985.50, the Committee
reviewed at a public meeting and submitted to the Department, a
marketing policy that included the following Native spearmint oil
information: estimated quantity; estimated demand; prospective
production; estimated total allotment base; quantity of reserve oil;
oil prices; market conditions; and whether the average price was
expected to exceed parity. Handlers have indicated that with this
action, the available supply of both Scotch and Native spearmint oils
appears adequate to meet anticipated demand through May 31, 1997.
Without the increase in Native spearmint oil, the Committee
believes the industry would not be able to meet market needs. As of
November 14, 1996, 84,476 pounds of Native spearmint oil was available
for market. Demand for Native spearmint oil from December 1 to May 31
over the past five years has ranged from a high of 245,661 pounds in
1991-92 to a low of 92,658 pounds in 1992-93. The five year average is
157,531 pounds. Therefore, given this past history the industry would
be unlikely to meet market demand without this change. When the
Committee made its initial recommendation for the establishment of the
Native spearmint oil salable quantity and allotment percentage for the
1996-97 marketing year, it had anticipated that the year would end with
an ample available supply. This revision adds 113,730 pounds of Native
spearmint oil to the amount available for market during the remainder
of the 1996-97 marketing year.
Alternatives to this rule included not to increase the available
supply of Native spearmint oil, which could potentially hurt small
producers. The Committee believes that the level recommended will meet
market needs.
Annual salable quantities and allotment percentages have been
issued for both classes of spearmint oil since the order's inception.
Reporting and recordkeeping requirements have remained the same for
each year of regulation. Accordingly, this action will not impose any
additional reporting or recordkeeping requirements on either small or
large spearmint oil producers and handlers. All reports and forms
associated with this program are reviewed periodically in order to
avoid unnecessary and duplicitous information collection by industry
and public sector agencies. The Department has not identified any
relevant Federal rules that duplicate, overlap, or conflict with this
rule.
Finally, the Committee's meeting was widely publicized throughout
the spearmint oil industry and all interested persons were invited to
attend and participate on all issues. Interested persons were also
invited to submit information on the regulatory and informational
impacts of this action on small businesses.
The interim final rule regarding this action was issued on January
3, 1997, and published in the Federal Register (62 FR 1246, January 9,
1997), with an effective date of January 9, 1997. That rule amended
Sec. 985.215 of the rules and regulations in effect under the order.
[[Page 31707]]
That rule provided a 30-day comment period which ended February 10,
1997. No comments were received.
After consideration of all relevant matter presented, including
that contained in the prior proposed, interim final, and final rules in
connection with the establishment of the salable quantities and
allotment percentages for Scotch and Native spearmint oils for the
1996-97 marketing year, the Committee's recommendation and other
available information, it is found that to revise Sec. 985.215 (61 FR
11291) to change the salable quantity and allotment percentage for
Native spearmint oil as effective in the interim final rule (62 FR
1246), as hereinafter set forth, will tend to effectuate the declared
policy of the Act.
It is further found that good cause exists for not postponing the
effective date of this rule until 30 days after publication in the
Federal Register (5 U.S.C. 553) because this rule applies to spearmint
produced during the 1996-97 marketing year, which ended May 31, 1997.
Further, handlers are aware of this rule, which was recommended at a
public meeting. Also, a 30-day comment period was provided in the
interim final rule and no comments were received.
List of Subjects in 7 CFR Part 985
Marketing agreements, Oils and fats, Reporting and recordkeeping
requirements, Spearmint oil.
PART 985--SPEARMINT OIL PRODUCED IN THE FAR WEST
Accordingly, the interim final rule amending 7 CFR part 985 which
was published at 61 FR 1246 on January 9, 1997, is adopted as a final
rule without change.
Dated: June 4, 1997.
Robert C. Keeney,
Director, Fruit and Vegetable Division.
[FR Doc. 97-15253 Filed 6-10-97; 8:45 am]
BILLING CODE 3410-02-P