[Federal Register Volume 64, Number 61 (Wednesday, March 31, 1999)]
[Rules and Regulations]
[Pages 15290-15296]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-7799]


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DEPARTMENT OF AGRICULTURE

Farm Service Agency

7 CFR Part 723

Commodity Credit Corporation

7 CFR Part 1464

RIN 0560-AF 20


1998 Marketing Quotas and Price Support Levels for Fire-Cured 
(Type 21), Fire-Cured (Types 22-23), Maryland (Type 32), Dark Air-Cured 
(Types 35-36), Virginia Sun-Cured (Type 37), Cigar-Filler (Type 41), 
Cigar-Filler and Binder (Types 42-44 and 53-55), and Cigar Binder 
(Types 51-52) Tobaccos

AGENCIES: Farm Service Agency and Commodity Credit Corporation, USDA.

ACTION: Affirmation of determination and final rule.

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SUMMARY: The purpose of this notice is to codify the national marketing 
quotas and price support levels for the 1998 crops for several kinds of 
tobacco announced by press release on February 27, 1998.
    In accordance with the Agricultural Adjustment Act of 1938, as 
amended (the 1938 Act), the Secretary determined the 1998 marketing 
quotas to be as follows: fire-cured (type 21), 2.725 million pounds; 
fire-cured (types 22-23), 44.6 million pounds; Maryland (type 32), 5.45 
million pounds; dark air-cured (types 35-36), 11.15 million pounds; 
Virginia sun-cured (type 37), 165,000 pounds; cigar-filler (type 41), 
0.665 million pounds; cigar-filler and binder (types 42-44 and 53-55), 
6.63 million pounds; and cigar binder (types 51-52), 1.31 million 
pounds.
    Quotas are necessary to adjust the production levels of certain 
tobaccos to more fully reflect supply and demand conditions, as 
provided by statute.
    In accordance with the Agricultural Act of 1949 as amended (the 
1949 Act), the Secretary determined the 1998 levels of price support to 
be as follows (in cents per pound): fire-cured (type 21), 153.6; fire-
cured (types 22-23), 168.1; dark air-cured (types 35-36), 145.0; 
Virginia sun-cured (type 37), 136.0; and cigar-filler and binder (types 
42-44 and 53-55), 121.2. Price support for Maryland (type 32), cigar-
filler (type 41), and cigar binder (types 51-52) were not announced 
because producers of each of these kinds of tobacco had disapproved 
marketing quotas for many years and were not expected to approve quotas 
in separate referenda held on March 23-26, 1998. This notice also fixes 
a technical error in a section heading.

EFFECTIVE DATE: February 27, 1998.

FOR FURTHER INFORMATION CONTACT: Robert L. Tarczy, Tobacco and Peanuts 
Division, FSA, USDA, STOP 0514, 1400 Independence Avenue, SW, 
Washington, DC 20250-0514, telephone 202-720-5346. Copies of the cost-
benefit assessment prepared for this rule can be obtained from Mr. 
Tarczy.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This notice has been determined to be significant and was 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 12988

    This final rule has been reviewed in accordance with Executive 
Order 12988. 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 since neither the Farm Service Agency 
(FSA) nor the Commodity Credit Corporation (CCC) is 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 of these 
determinations.

Paperwork Reduction Act

    The amendments to 7 CFR parts 723 and 1464 set forth in this final 
rule do not contain information collections that require clearance by 
the Office of Management and Budget under the provisions of 44 U.S.C. 
chapter 35.

Unfunded Federal Mandates

    This rule contains no Federal mandates under the regulatory 
provisions of Title II of the Unfunded Mandate Reform Act of 1995 
(UMRA), for State, local, and tribal governments or the private sector. 
Thus, this rule is not subject to the requirements of sections 202 and 
205 of the UMRA.

Statutory Background

    This final rule is issued pursuant to the provisions of the 1938 
Act and the 1949 Act.
    On February 27, 1998, the Secretary determined and announced the 
national marketing quotas and price support levels for the 1998 crops 
of fire-cured (type 21), fire-cured (types 22-23), dark air-cured 
(types 35-36), Virginia sun-cured (type 37), and cigar-filler and 
binder (types 42-44 and 53-55) tobaccos. In addition, the Secretary 
announced marketing quotas for Maryland (type 32), cigar-filler (type 
41) and cigar-binder (types 51-52). 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 Maryland (type 32), Virginia sun-cured (type 37), 
cigar-filler (type 41), and cigar-binder (types 51-52) tobaccos.
    During March 23-26, 1998, eligible producers of Maryland (types 
32), Virginia sun-cured (type 37), cigar-filler (type 41), and cigar 
binder (types 51-52) tobacco voted in separate referenda to determine 
whether such producers approved marketing quotas for the 1998, 1999, 
and 2000 marketing years (MY) for these tobaccos. Of the producers 
voting, 14.8 percent favored marketing quotas for Maryland (type 32) 
tobacco; 96.7 percent favored marketing quotas for Virginia sun-cured 
(type 37) tobacco; 9.1 percent favored marketing quotas for cigar-
filler (type 41) tobacco; and 2.5 percent favored marketing quotas for 
cigar-filler (types 51-52) tobacco. Accordingly, among these tobaccos, 
quotas and price supports for only Virginia sun-cured (type 37) tobacco 
are in effect for the 1998 though 2000 MYs. For the other three kinds, 
neither marketing quotas nor price supports will be in effect for the 
next 3 MYs.
    In accordance with section 312 of the 1938 Act, for tobaccos other 
than flue-

[[Page 15291]]

cured tobacco and burley tobacco, the Secretary of Agriculture is 
required to proclaim not later than March 1 of any MY a national 
marketing quota for those tobaccos for which either: (1) are tobaccos 
for which marketing quotas have been approved in the prior 3 years or 
(2) are tobaccos for which it has been 3 years since the last quota 
referendum. There is a vote on quotas for each kind in a 3-year cycle. 
With respect to Virginia sun-cured (type 37) tobacco, the 1997 MY was 
the last year of 3 consecutive years of quota. For Maryland (type 32), 
cigar-filler (type 41), and cigar binder (types 51-52) tobacco, all of 
which had been without quotas, 1998 represented the beginning of 
another 3 year cycle. Accordingly, marketing quotas for Maryland (type 
32), Virginia sun-cured (type 37), cigar-filler (type 41) and cigar 
binder (types 51-52) tobaccos were proclaimed for each of the 3 MYs 
beginning October 1, 1998; October 1, 1999, and October 1, 2000, but 
subject to producer approval. As indicated, however, only Virginia sun-
cured (type 37) producers approved quotas in the four referenda. Quotas 
for the other tobaccos covered by this notice were approved in 
referenda which were still effective.
    Because of producer approval of quotas, sections 312 and 313 of the 
1938 Act required that the Secretary also announce 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), and 
cigar filler and binder (types 42-44 and 53-55) tobaccos for the MY 
beginning October 1, 1997. The Secretary also announced 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.
    Under the 1949 Act, 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. Since producers of Maryland (type 32), cigar filler (type 
41), and cigar binder (types 51-52) tobacco disapproved quotas, price 
supports were not considered in this notice. With respect to the 1998 
crops of the kinds of tobacco that are the subject of this notice which 
have approved national marketing quotas, the respective maximum levels 
of price support for these kinds of tobacco is determined in accordance 
with section 106 of the 1949 Act. Announcement of the price support 
levels for these five kinds of tobacco are normally made before the 
planting seasons. Under the provisions of Section 1108(c), of Pub. L. 
No. 99-272, the price support level announcements do not require prior 
rulemaking. For the 1998 crops, the price support announcements were 
made on February 27, 1998, at the same time the quota announcements 
were made. Quota and price support determinations for burley and flue-
cured tobacco are made separately and are the subject of separate 
notices.

Statutory Provisions

    Section 312(b) of the 1938 Act provides, in part, that the national 
marketing quota for a kind of tobacco is the total quantity of that 
kind of tobacco that may be marketed such that a supply of such tobacco 
equal to its reserve supply level is made available during the MY.
    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 considerably less than their respective 
national acreage allotments allow, a larger quota is necessary to make 
available production equal to the reserve supply level. Further, under 
section 312(b) of the 1938 Act the amount of the national marketing 
quota may, not later than the following March 1, be increased by not 
more than 20 percent over the straight formula amount 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. ``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.
    Normal year's domestic consumption is defined in section 
301(b)(11)(B) of the 1938 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. 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.
    Also, under 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 1998 crop of each of these 
kinds of tobacco is adequate for these purposes.

The Proposed Rule

    On February 2, 1998, a proposed rule was published in the Federal 
Register (63 FR 5285) in which interested persons were requested to 
comment with respect to setting quotas for the tobacco kinds addressed 
in this notice.

Discussion of Comments

    Seventeen written responses were received during the comment period 
which ended February 13, 1998. A summary of these comments by kind of 
tobacco follows:
    (1) Fire-cured (type 21) tobacco. Three comments were received. All 
recommended a 15 percent increase in 1998 quotas.
    (2) Fire-cured (types 22-23) tobacco. Five comments were received. 
All recommended no change in 1998 quotas.
    (3) Dark air-cured (types 35-36) tobacco. Six comments were 
received. All recommended a 20 percent increase in the quota.
    (4) Virginia sun-cured (type 37) tobacco. Three comments were 
received. They recommended a quota increase of 15 percent.
    (5) Cigar-filler and binder (types 42-44 and 53-55) tobacco. No 
comments were received.

Quota and Related Determinations

    The tobacco program is, through assessments, operated at no net 
cost to taxpayers other than the costs common to all price support 
operations. Accordingly producer comments are given considerable weight 
in this review. Based on a review of the comments received and the 
latest available statistics of the Federal Government, which appear to 
be the

[[Page 15292]]

most reliable data available, the following determinations were made 
for the five subject tobacco kinds:

(1) Fire-Cured (Type 21) Tobacco

    The average annual quantity of fire-cured (type 21) tobacco 
produced in the United States that is estimated to have been consumed 
in the United States during the 10 MYs preceding the 1997 MY was 
approximately 0.8 million pounds. The average annual quantity produced 
in the United States and exported from the United States during the 10 
MYs preceding the 1997 MY was 2.1 million pounds (farm sales weight 
basis). Both domestic use and exports have trended sharply downward. 
Because of these considerations, a normal year's domestic consumption 
has been determined to be 0.6 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 4.4 million pounds.
    Manufacturers and dealers reported stocks held on October 1, 1997, 
of 2.4 million pounds. The 1997 crop is estimated to be 2.0 million 
pounds. Therefore, total supply for the 1997 MY is 4.4 million pounds. 
During the 1997 MY, it is estimated that disappearance will total 
approximately 2.2 million pounds. Deducting this disappearance from 
total supply results in a 1998 MY beginning stock estimate of 2.2 
million pounds.
    The difference between the reserve supply level and the estimated 
carryover on October 1, 1998, is 2.2 million pounds. This represents 
the quantity that may be marketed that will make available during the 
1998 MY a supply equal to the reserve supply level. More than 95 
percent of the announced national marketing quota is expected to be 
produced. Accordingly, it has been determined that a 1998 national 
marketing quota of 2.271 million pounds is necessary to make available 
production of 2.2 million pounds. As permitted by section 312(b) of the 
1938 Act, it was further determined that the 1998 national marketing 
quota should be increased by 20 percent over the normal formula amount 
in order to avoid undue restriction of marketings. This determination 
took into account the size of last year's quota, the comments, the long 
storage time for this tobacco and the possibility of changes in demand 
over expected demand. Thus, the national marketing quota for the 1998 
crop is 2.725 million pounds.
    In accordance with section 313(g) of the 1938 Act, dividing the 
1998 national marketing quota of 2.725 million pounds by the 1993-97, 
5-year national average yield of 1,594 pounds per acre results in a 
1998 national acreage allotment of 1,709.54 acres.
    Pursuant to the provisions of section 313(g) of the 1938 Act, a 
national acreage factor of 1.15 is determined by dividing the national 
acreage allotment for the 1998 MY, less a national reserve of 9.25 
acres, by the total of the 1998 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 average annual quantity of fire-cured (types 22-23) tobacco 
produced in the United States that is estimated to have been consumed 
in the United States during the 10 years preceding the 1997 MY was 
approximately 19.1 million pounds. The average annual quantity produced 
in the United States and exported during the 10 MYs preceding the 1997 
MY was 15.8 million pounds (farm sales weight basis). Domestic use has 
trended upward while exports have varied. Because of these 
considerations, a normal year's domestic consumption has been 
determined to be 30.0 million pounds, and a normal year's exports have 
been determined to be 18.4 million pounds. Application of the formula 
prescribed by section 301(b)(14)(B) of the 1938 Act results in a 
reserve supply level of 118.5 million pounds.
    Manufacturers and dealers reported stocks held on October 1, 1997, 
of 83.3 million pounds. The 1997 crop is estimated to be 40.0 million 
pounds. Therefore, total supply for the 1997 MY is 123.3 million 
pounds. During the 1997 MY, it is estimated that disappearance will 
total approximately 40.0 million pounds. Deducting this disappearance 
from total supply results in a 1998 MY beginning stock estimate of 83.3 
million pounds.
    The difference between the reserve supply level and the estimated 
carryover on October 1, 1998, is 35.2 million pounds. This represents 
the quantity that may be marketed that will make available during the 
1998 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 1998 national marketing 
quota of 37.2 million pounds is necessary to make available production 
of 35.2 million pounds.
    Utilizing section 312(b) of the 1938 Act, it was further determined 
for the same reason as with fire-cured (type 21) tobacco, that the 1998 
national marketing quota should be increased by 20 percent over the 
normal formula amount in order to avoid undue restriction of 
marketings. Thus, the national marketing quota for the 1998 crop is 
44.6 million pounds.
    In accordance with section 313(g) of the 1938 Act, dividing the 
1998 national marketing quota of 44.6 million pounds by the 1993-97, 5-
year average yield of 2,652 pounds per acre results in a 1998 national 
acreage allotment of 16,817.50 acres.
    Pursuant to the provisions of section 313(g) of the 1938 Act, a 
national acreage factor of 1.0 is determined by dividing the national 
acreage allotment for the 1998 MY, less a national reserve of 58.00 
acres, by the total of the 1998 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.

(3) Dark Air-Cured (Types 35-36) Tobacco

    The average annual quantity of dark air-cured (types 35-36) tobacco 
produced in the United States that is estimated to have been consumed 
in the United States during the 10 MYs preceding the 1997 MY was 
approximately 9.5 million pounds. The average annual quantity produced 
in the United States and exported from the United States during the 10 
MYs preceding the 1997 MY was 1.5 million pounds (farm sales weight 
basis). Domestic use has been erratic while exports have trended 
downward. Because of these considerations, a normal year's domestic 
consumption has been determined to be 9.9 million pounds, and a normal 
year's exports have been determined to be 1.4 million pounds. 
Application of the formula prescribed by section 301(b)(14)(B) of the 
1938 Act results in a reserve supply level of 31.0 million pounds.
    Manufacturers and dealers reported stocks held on October 1, 1997, 
of 23.8 million pounds. The 1997 crop is estimated to be 8.7 million 
pounds. Therefore, total supply for the 1997 MY is 32.5 million pounds. 
During the 1997 MY, it is estimated that disappearance will total 
approximately 10.0 million pounds. Deducting this disappearance from 
total supply results in a 1998 MY beginning stock estimate of 22.5 
million pounds.
    The difference between the reserve supply level and the estimated 
carryover on October 1, 1998, is 8.5

[[Page 15293]]

million pounds. This represents the quantity that may be marketed that 
will make available during the 1998 MY a supply equal to the reserve 
supply level. About 90 percent of the announced national marketing 
quota is expected to be produced. Accordingly, it has been determined 
that a national marketing quota of 9.29 million pounds is necessary to 
make available production of 8.5 million pounds. In accordance with 
section 312(b) of the 1938 Act, it has been further determined that the 
1998 national marketing quota should be increased by 20 percent over 
the normal formula amount in order to avoid undue restriction of 
marketings. This determination took into account the same factors as 
with fire-cured (type 21) tobacco and industry preferences. This 
results in a national marketing quota for the 1998 MY of 11.15 million 
pounds. Otherwise, the quota would be well below the level for the 1997 
crop.
    In accordance with section 313(g) of the 1938 Act, dividing the 
1998 national marketing quota of 11.15 million pounds by the 1993-97, 
5-year average yield of 2,284 pounds per acre results in a 1998 
national acreage allotment of 4,881.79 acres.
    Pursuant to the provisions of section 313(g) of the 1938 Act, a 
national acreage factor of 1.20 is determined by dividing the national 
acreage allotment for the 1998 MY, less a national reserve of 34.70 
acres, by the total of the 1998 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.

(4) Virginia Sun-Cured (Type 37) Tobacco.

    The average annual quantity of Virginia sun-cured (type 37) tobacco 
produced in the United States that is estimated to have been consumed 
in the United States during the 10 MYs preceding the 1997 MY was 
approximately 90,000 pounds. The average annual quantity produced in 
the United States and exported from the United States during the 10 MYs 
preceding the 1997 MY was approximately 90,000 pounds (farm sales 
weight basis). Both domestic use and exports have shown a sharp 
downward trend. Because of these considerations, a normal year's 
domestic consumption has been determined to be 30,000 pounds, and a 
normal year's exports have been determined to be 20,000 pounds. 
Application of the formula prescribed by section 301(b)(14)(B) of the 
1938 Act results in a reserve supply level of 121,000 pounds.
    Manufacturers and dealers reported stocks held on October 1, 1997, 
of 20,000 pounds. The 1997 crop is estimated to be 100,000 pounds. 
Therefore, total supply for the 1997 MY is 120,000 pounds. During the 
1997 MY, it is estimated that disappearance will total approximately 
120,000 pounds. Deducting this disappearance from total supply results 
in a 1998 MY beginning stock estimate of 0 pounds.
    The difference between the reserve supply level and the estimated 
carryover on October 1, 1997, is 121,000 pounds. This represents the 
quantity that may be marketed that will make available during the 1997 
MY a supply equal to the reserve supply level. Less than three-quarters 
of the announced national marketing quota is expected to be produced. 
Accordingly, it has been determined that a 1998 national marketing 
quota of 163,000 pounds is necessary to make available production of 
121,000 pounds. Thus, the national marketing quota for the 1998 crop is 
163,000 pounds which is greater than the preceding quota by about 15 
percent and should not unduly restrict marketings.
    In accordance with section 313(g) of the 1938 Act, dividing the 
1998 national marketing quota of 163,000 pounds by the 1993-97, 5-year 
average yield of 1,376 pounds per acre results in a 1998 national 
acreage allotment of 118.46 acres.
    Pursuant to the provisions of section 313(g) of the 1938 Act, a 
national acreage factor of 1.15 is determined by dividing the national 
acreage allotment for the 1998 MY, less a national reserve of 0.57 
acres, by the total of the 1998 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.

(5) Cigar-Filler and Binder (Types 42-44 and 53-55) Tobacco

    The average annual quantity of cigar-filler and binder (types 42-44 
and 53-55) tobacco produced in the United States that is estimated to 
have been consumed in the United States during the 10 MYs preceding the 
1997 MY was approximately 12.1 million pounds. The average annual 
quantity produced in the United States and exported from the United 
States during the 10 MYs preceding the 1997 MY was less than 100,000 
pounds (farm sales weight). Domestic use has trended downward and 
exports are very small. Thus, a normal year's domestic consumption has 
been determined to be 7.2 million pounds, and a normal year's exports 
has been determined to be zero pounds. Application of the formula 
prescribed by section 301(b)(14)(B) of the 1938 Act results in a 
reserve supply level of 20.8 million pounds.
    Manufacturers and dealers reported stocks held on October 1, 1997, 
of 17.8 million pounds. The 1997 crop is estimated to be 5.5 million 
pounds. Therefore, total supply for the 1997 MY is 23.3 million pounds. 
During the 1997 MY, it is estimated that disappearance will total about 
8.0 million pounds. Deducting this disappearance from total supply 
results in a 1998 MY beginning stock estimate of 15.3 million pounds.
    The difference between the reserve supply level and the estimated 
carryover on October 1, 1998, is 5.5 million pounds. This represents 
the quantity that may be marketed that will make available during the 
1998 MY a supply equal to the reserve supply level. Slightly more than 
80 percent of the announced national marketing quota is expected to be 
produced. Accordingly, it has been determined that a 1998 national 
marketing quota of 6.63 million pounds is necessary to make available 
production of 5.5 million pounds. This results in a 1998 national 
marketing quota of 6.63 million pounds. This determination reflects 
that there are short reserve supplies and takes into account possible 
changes in expected demand and the fact that even with this adjustment 
the 1998 quota will be less than the 1997 crop quota.
    In accordance with section 313(g) of the 1938 Act, dividing the 
1998 national marketing quota of 6.63 million pounds by the 1993-97, 5-
year average yield of 1,921 pounds per acre results in a 1998 national 
acreage allotment of 3,451.33 acres.
    Pursuant to the provisions of section 313(g), of the 1938 Act, a 
national factor of 0.8 is determined by dividing the national acreage 
allotment for the 1998 MY, less a national reserve of 15.80 acres, by 
the total of the 1998 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.

(6) Referendum Results for Virginia Sun-Cured (type 37), Maryland (type 
32), Cigar Filler (type 41), and Cigar Binder (types 51-52) Tobaccos

    Because of the results of producer referenda, marketing quotas 
shall be in effect for the 1998 MY for Virginia sun-

[[Page 15294]]

cured (type 37). However, they will not be in effect for Maryland (type 
32), cigar filler (type 41), nor cigar binder (types 51-52) tobacco. In 
referenda held March 23-26, 1998, 96.7 percent of Virginia sun-cured 
producers voted in favor of quotas. However, only 14.8 percent of 
Maryland (type 32), 9.1 percent of cigar filler (type 41), and 2.5 
percent of cigar binder (types 51-52) producers voted for quotas.

                             Referenda Data
------------------------------------------------------------------------
                                       Total     Yes       No     % yes
           Kind of tobacco             votes    votes    votes    votes
------------------------------------------------------------------------
Virginia sun-cured (type 37)........       60       58        2     96.7
Maryland (type 32)..................      698      103      595     14.8
Cigar-filler (type 41)..............      230       21      209      9.1
Cigar-binder (types 51-52)..........      120        3      117      2.5
------------------------------------------------------------------------

Price Support

Statutory Provisions

    Section 106(f)(6)(A) of the 1949 Act provides that the level of 
support for the 1998 crop of a kind of tobacco (other than flue-cured 
and burley) shall be the level in cents per pound at which the 1997 
crop of such kind of tobacco was supported, plus or minus, as 
appropriate, the amount by which (i) the basic support level for the 
1998 crop, as it would otherwise be determined under section 106(b) of 
the 1949 Act, is greater or less than (ii) the support level for the 
1997 crop, as it would otherwise be determined under section 106(b). To 
the extent that the price support level would be increased as a result 
of that comparison, section 106(f) provides that the increase may be 
modified using the provisions of 106(d). Under 106(d), the Secretary 
may reduce the level of support for grades the Secretary determines 
will likely be in excess supply so long as the weighted level of 
support for all grades maintains at least 65 percent of the increase in 
the price support (from the previous year). The Secretary must consult 
with the appropriate tobacco associations and take into consideration 
the supply, and anticipated demand for the tobacco, including the 
effect of the action 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 is required to consider the domestic 
supply, including domestic inventories, the amount of such tobacco 
pledged as security for price support loans, and anticipated domestic 
and export demand, based on the maturity, uniformity, and stalk 
position of such tobacco.
    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 3 previous calendar 
years to the average index of such prices paid by farmers, including 
wage rates, interest and taxes for the 1959 calendar year.
    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.

Price Support Determinations

    The following levels of price support for the 1997 crops of various 
kinds of tobacco, which were determined in accordance with section 
106(f)(6)(A) of the 1949 Act, are as follows:

------------------------------------------------------------------------
                                                           Support level
                      Kind and type                         (cents per
                                                              pound)
------------------------------------------------------------------------
Fire-cured (type 21)....................................           149.8
Fire-cured (types 22-23)................................           162.3
Dark air-cured (types 35-36)............................           139.8
Virginia sun-cured (type 37)............................           132.6
Cigar-filler and binder (types 42-44 and 53-55).........           116.9
------------------------------------------------------------------------

    For the 1998 crop year:
    (1) Average parity indexes for calendar year periods 1994-1996 and 
1995-1997 are as follows:

----------------------------------------------------------------------------------------------------------------
                    Year                          Index                      Year                      Index
----------------------------------------------------------------------------------------------------------------
1994.......................................           1,398   1995..............................           1,437
1995.......................................           1,437   1996..............................           1,504
1996.......................................           1,504   1997..............................           1,527
Average....................................           1,446   Average...........................           1,489
----------------------------------------------------------------------------------------------------------------

    (2) Average parity index, calendar year 1959 = 298.
    (3) 1997 ratio of 1,446 to 298 = 4.85; 1998 ratio of 1,488 to 298 = 
5.00.
    (4) Ratios times 1959 support levels and 1998 increase in basic 
support levels are as follows:

[[Page 15295]]



----------------------------------------------------------------------------------------------------------------
                                                     1959      Basic support level \1\   Increase from  1996 to
                                                   support   --------------------------           1997
                                                    level                              -------------------------
                 Kind and type                  -------------   1997  (      1998  (      100%  (       65%  (
                                                   ( cents/    cents/lb.)   cents/lb.)   cents/lb.)   cents/lb.)
                                                     lb.)
----------------------------------------------------------------------------------------------------------------
Fire-cured (type 21)...........................         38.8        188.2        194.0          5.8          3.8
Fire-cured (types 22-23).......................         38.8        188.2        194.0          5.8          3.8
Dark air-cured (types 35-36)...................         34.5        167.3        172.5          5.2          3.4
Virginia sun-cured (type 37)...................         34.5        167.3        172.5          5.2          3.4
Cigar-filler and binder (types 42-44, 54-55)...         28.6        138.7        143.0          4.3         2.8
----------------------------------------------------------------------------------------------------------------
\1\ 1997 ratio is 4.85, 1998 ration is 5.00.

    The loan associations for Virginia fire-cured (type 21) and 
Virginia sun-cured (type 37) tobacco have accepted lower price support 
levels so their tobacco may remain competitive in world markets. 
Therefore, for fire-cured (type 21) tobacco and Virginia sun-cured 
(type 37) tobacco, the 1998-crop support levels were set so as to only 
add, over 1997-crop levels, 65 percent of the difference between the 
1998 crop ``basic support level'' and the 1997-crop ``basic support 
level.'' For the other tobaccos covered in this notice there was no 
such recommendation and the support levels were set accordingly. 
Accordingly, the price support levels for fire-cured (types 22-23), 
dark air-cured (types 35-36) and cigar filler and binder (types 42-44; 
53-55) tobaccos were set to use the MY 1997 level of support increased 
by 100 percent of the difference between the MY 1998 ``basic support 
level'' and the MY 1997 ``basic support level.'' 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 five kinds of tobacco in their blends.
    Accordingly, the following price support determinations were 
announced on February 27, 1998, for the 1998 crops of the tobaccos 
which are the subject of this notice:

------------------------------------------------------------------------
                                                           Support level
                      Kind and type                         (cents per
                                                              pound)
------------------------------------------------------------------------
Fire-cured (type 21)....................................           153.6
Fire-cured (types 22-23)................................           168.1
Dark air-cured (types 35-36)............................           145.0
Virginia sun-cured (type 37)............................           136.0
Cigar-filler and binder (types 42-44 and 53-55).........           121.2
------------------------------------------------------------------------

Other Determinations

    This rule also amends the heading in 7 CFR 1464.15 because of a 
technical error. Further, as to that determination and the others 
addressed in this notice which are driven by statutory deadlines and 
affect the marketing of current crops, it was determined that to the 
extent restrictions might otherwise apply, a delay in the effectiveness 
of the rule for additional notice and procedure would be contrary to 
the public interest, impracticable, and unnecessary. This conclusion is 
the same as to prior crop years and for all purposes including for 
purposes of the Small Business Regulatory Enforcement Act (Pub. L. 104-
121). With respect to the quota and price support determinations, this 
conclusion as to further procedure is based on the statutory deadlines 
and other timing factors involved. For the other change, the conclusion 
is based on the technical nature of the change.

List of Subjects

7 CFR Part 723

    Acreage allotments, Marketing quotas, Penalties, Reporting and 
recordkeeping requirements, Tobacco.

7 CFR Part 1464

    Price support, Programs, Tobacco.

    Accordingly, 7 CFR parts 723 and 1464 are amended to read 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, 1377-1379, 1421, 1445-1, and 1445-2.

    2. Section 723.113 is amended by adding paragraph (f) to read as 
follows:


Sec. 723.113  Fire-cured (type 21) tobacco.

* * * * *
    (f) The 1998-crop national marketing quota is 2.725 million pounds.
    3. Section 723.114 is amended by adding paragraph (f) to read as 
follows:


Sec. 723.114  Fire-cured (types 22-23) tobacco.

* * * * *
    (f) The 1998-crop national marketing quota is 44.6 million pounds.
    4. Section 723.115 is amended by adding paragraph (f) to read as 
follows:


Sec. 723.115  Dark air-cured (types 35-36) tobacco.

* * * * *
    (f) The 1998-crop national marketing quota is 11.15 million pounds.
    5. Section 723.116 is amended by adding paragraph (f) to read as 
follows:


Sec. 723.116  Sun-cured (type 37) tobacco.

* * * * *
    (f) The 1998-crop national marketing quota is 163,000 pounds.
    6. Section 723.117 is amended by adding paragraph (f) to read as 
follows:


Sec. 723.117  Cigar-filler and binder (types 42-44 and 53-55) tobacco.

* * * * *
    (f) The 1998-crop national marketing quota is 6.63 million pounds.

PART 1464--TOBACCO

    7. The authority citation for 7 CFR part 1464 continues to read as 
follows:

    Authority: 7 U.S.C. 1421, 1423, 1441, 1445, and 1445-1; 15 
U.S.C. 714b and 714c.

    8. Section 1464.13 is amended by adding paragraph (f) to read as 
follows:


Sec. 1464.13  Fire-cured (type 21) tobacco.

* * * * *
    (f) The 1998-crop national price support level is 153.6 cents per 
pound.

[[Page 15296]]

    9. Section 1464.14 is amended by adding paragraph (f) to read as 
follows:


Sec. 1464.14  Fire-cured (types 22-23) tobacco.

* * * * *
    (f) The 1998-crop national price support level is 168.1 cents per 
pound.
    10. Section 1464.15 is amended by changing in the heading ``types 
22-23'' to ``types 35-36'' and by adding paragraph (f) to read, in the 
amended section, as follows:


Sec. 1464.15  Dark air-cured (types 35-36) tobacco.

* * * * *
    (f) The 1998-crop national price support level is 145.0 cents per 
pound.
    11. Section 1464.16 is amended by adding paragraph (f) to read as 
follows:


Sec. 1464.16  Virginia sun-cured (type 37) tobacco.

* * * * *
    (f) The 1998-crop national price support level is 136.0 cents per 
pound.
    12. Section 1464.17 is amended by adding paragraph (f) to read as 
follows:


Sec. 1464.17  Cigar-filler and binder (types 42-44 and 53-55) tobacco.

* * * * *
    (f) The 1998-crop national price support level is 121.2 cents per 
pound.

    Signed at Washington, DC, on March 24, 1999.
Keith Kelly,
Administrator, Farm Service Agency and Executive Vice President, 
Commodity Credit Corporation.
[FR Doc. 99-7799 Filed 3-30-99; 8:45 am]
BILLING CODE 3410-05-P