[Federal Register Volume 65, Number 58 (Friday, March 24, 2000)]
[Rules and Regulations]
[Pages 15832-15835]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-7333]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 985

[Docket No. FV00-985-3 IFR-A]


Marketing Order Regulating the Handling of Spearmint Oil Produced 
in the Far West; Revision of the Salable Quantity and Allotment 
Percentage for Class 3 (Native) Spearmint Oil for the 1999-2000 
Marketing Year

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule amends a prior interim final rule that increased the 
quantity of Class 3 (Native) spearmint oil produced in the Far West 
that handlers may purchase from, or handle for, producers during the 
1999-2000 marketing year. The prior interim final rule increased the 
Native spearmint oil salable quantity by 102,311 pounds from 1,125,755 
pounds to 1,228,066 pounds, and the allotment percentage by 5 percent 
from 55 percent to 60 percent. This rule increases the Native spearmint 
oil salable quantity by an additional 81,849 pounds from 1,228,066 to 
1,309,915 pounds, and the allotment percentage by an additional 4 
percent from 60 percent to 64 percent. 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 to avoid extreme fluctuations in supplies and 
prices, and, thus, help to maintain stability in the Far West spearmint 
oil market.

DATES: Effective on March 25, 2000 through May 31, 2000; comments 
received by April 24, 2000 will be considered prior to issuance of a 
final rule.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent to the Docket Clerk, Fruit 
and Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box 96456, 
Washington, DC 20090-6456; Fax: (202) 720-5698, or E-mail: 
[email protected]. All 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 Programs, AMS, USDA, 1220 SW Third Avenue, room 369, 
Portland, Oregon 97204-2807; telephone: (503) 326-2724, Fax: (503) 326-
7440; or George Kelhart, Technical Advisor, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, room 
2525-S, P.O. Box 96456, Washington, DC 20090-6456; telephone: (202) 
720-2491, Fax: (202) 720-5698.
    Small businesses may request information on complying with this 
regulation by contacting Jay Guerber, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box 
96456, Washington, DC 20090-6456; telephone (202) 720-2491; Fax: (202) 
720-5698, or E-mail: [email protected].

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, and 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.''
    The Department of Agriculture (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 
increases the quantity of Native spearmint oil produced in the Far West 
that may be purchased from or handled for producers by handlers during 
the 1999-2000 marketing year, which ends on May 31, 2000. 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 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 63 percent of the annual U.S. production of Scotch 
spearmint oil and approximately 93 percent of the annual U.S. 
production of Native spearmint oil.
    This rule amends an interim final rule that was published in the 
Federal Register on February 10, 2000 (65 FR 6528). That rule, which 
was based on a unanimous Committee recommendation

[[Page 15833]]

made at a meeting on January 13, 2000, increased the quantity of Native 
spearmint oil that handlers may purchase from, or handle for, producers 
during the 1999-2000 marketing year, which ends on May 31, 2000. 
Specifically, that rule increased the salable quantity by 102,311 
pounds from 1,125,755 pounds to 1,228,066 pounds, and the allotment 
percentage by 5 percent from 55 percent to 60 percent.
    This amended interim final rule, which is based on a unanimous 
Committee recommendation made at a meeting on February 23, 2000, 
increases the salable quantity an additional 81,849 pounds from 
1,228,066 pounds to 1,309,915 pounds, and the allotment percentage an 
additional 4 percent from 60 percent to 64 percent for Native spearmint 
oil for the 1999-2000 marketing year.
    The initial salable quantity and allotment percentages for Scotch 
and Native spearmint oils for the 1999-2000 marketing year were 
recommended by the Committee at its October 7, 1998, meeting. The 
Committee recommended salable quantities of 1,199,190 pounds and 
1,125,755 pounds, and allotment percentages of 65 percent and 55 
percent, respectively, for Scotch and Native spearmint oils. A proposed 
rule was published in the November 17, 1998, issue of the Federal 
Register (63 FR 63804). A final rule establishing the salable 
quantities and allotment percentages for Scotch and Native spearmint 
oils for the 1999-2000 marketing year was published in the January 19, 
1999, issue of the Federal Register (64 FR 2799).
    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.
    Sections 985.50, 985.51, and 985.52 provide the Committee 
authorization to consider and recommend salable quantities and 
allotment percentages for each class of spearmint oil for an ensuing 
marketing year. Section 985.51(b) provides the authority for the 
Committee to recommend that an increase in the salable quantity and 
allotment percentage for either or both classes of oil be considered.
    Taking into consideration the following discussion on adjustments 
to the Native spearmint oil salable quantity, the revised 1999-2000 
marketing year salable quantity of 1,228,066 pounds will, therefore, be 
increased to 1,309,915 pounds.
    The original total industry allotment base for Native spearmint oil 
for the 1999-2000 marketing year was established at 2,046,828 pounds 
and was revised during the year to 2,046,214 pounds to reflect a loss 
of 614 pounds of base due to non-production of some producers' total 
annual allotments. The Committee has used this revised allotment base 
in computing the increases to the Native spearmint oil salable 
quantity.
    By increasing the salable quantity and allotment percentage from 
1,228,066 pounds to 1,309,915 pounds, this amended interim final rule 
makes an additional amount of Native spearmint oil available by 
releasing such oil from the reserve pool. When applied to each 
individual producer, the additional 4 percent allotment percentage 
increase allows each producer to take up to an amount equal to 4 
percent of their allotment base from their Native spearmint oil 
reserve. If a producer does not have any reserve pool oil, or has less 
than 4 percent of their allotment base in the reserve pool, the 
increase in allotment percentage will actually make less than such 
amount available to the market. Currently, producers receiving 8,304 
pounds of additional allotment through this increase do not have any 
Native spearmint oil in reserve. Thus, rather than the computed 81,849 
additional pounds, this action effectively makes an additional 73,545 
pounds of Native spearmint oil available to the market.
    The following summarizes the Committee recommendation: Factors 
Affecting the Amended Native Spearmint Oil Salable Quantity and 
Allotment Percentage
    (A) Estimated 1999-2000 Allotment Base--2,046,828 pounds. This is 
the figure the original 1999-2000 salable quantities and allotment 
percentages for both classes of spearmint oil were based on.
    (B) Revised 1999-2000 Allotment Base--2,046,214 pounds. This is 614 
pounds less than the estimated allotment base of 2,046,828 pounds. This 
is less because some producers failed to produce all of their previous 
year's allotment.
    (C) Initial 1999-2000 Allotment Percentage--55 percent. This was 
recommended by the Committee on October 7, 1998.
    (D) Initial 1999-2000 Salable Quantity--1,125,755 pounds. This 
figure is 55 percent of the estimated allotment base of 2,046,828 
pounds.
    (E) Initial Increase in Allotment Percentage--5 percent. This was 
recommended by the Committee on January 13, 2000.
    (F) Initial Revision of the 1999-2000 Allotment Percentage--60 
percent. This figure was derived by adding the initial increase in the 
allotment percentage of 5 percent to the initial 1999-2000 allotment 
percentage of 55 percent and was effective on February 11, 2000.
    (H) Initial Computed Increase in the 1999-2000 Salable Quantity--
102,311 pounds. This is the product of the revised 1999-2000 allotment 
base of 2,046,214 and the initial 5 percent increase.
    (I) Initially Revised 1999-2000 Salable Quantity--1,228,066 pounds. 
This figure, effective on February 11, 2000, is the sum of the initial 
salable quantity of 1,125,755 pounds and the initial computed increase 
of 102,311 pounds, and is approximately 60 percent of the estimated 
1999-2000 allotment base of 2,046,214 pounds.
    (J) Additional Increase in the Allotment Percentage--4 percent. 
This percentage increase was recommended by the Committee at its 
February 23, 2000, meeting.
    (K) Amended 1999-2000 Allotment Percentage--64 percent. This is the 
sum of the initial allotment percentage of 55 percent, and the 5 and 4 
percent increases.
    (L) Additional Computed Increase in the 1999-2000 Salable 
Quantity--81,849 pounds. This is the product of the revised 1999-2000 
allotment base of 2,046,214 pounds and the additional 4 percent 
increase in the allotment percentage.
    (M) 1999-2000 Salable Quantity as Revised by this Amended Interim 
Final Rule--1,309,915 pounds. This figure is the sum of the revised 
salable quantity of 1,228,066 and the additional computed increase of 
81,849 pounds, and is approximately 64 percent of the revised 1999-2000 
allotment base of 2,046,214 pounds.
    In making this latest recommendation, the Committee considered all 
available information on supply and demand. The 1999-2000 marketing 
year began on June 1, 1999. 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, 2000. 
Without the increase, the Committee believes the industry will not be 
able to meet market needs. As of February 23, 2000, approximately

[[Page 15834]]

40,966 pounds of Native spearmint oil was available for market. During 
the past 5 years, the average sales of Native spearmint oil from March 
1 to May 31 totaled 75,586 pounds, while the average sales for the 
period June 1 through February 29 totaled 1,087,385 pounds. The Far 
West spearmint oil industry has sold approximately 1,282,150 pounds of 
Native spearmint oil through February 23, 2000. This action has the 
effect of adding 73,545 pounds of Native spearmint oil to the amount 
available for market, bringing the total available supply for the 
remainder of this marketing year up to approximately 114,511 pounds.
    The Department, based on its analysis of available information, has 
determined that the salable quantity and allotment percentage for 
Native spearmint oil for the 1999-2000 marketing year should be 
increased to 1,309,915 and 64 percent, respectively.
    This amended rule further relaxes the regulation of Native 
spearmint oil and will allow producers to meet market needs and improve 
returns. In conjunction with the issuance of this rule, the Committee's 
revised marketing policy statement for the 1999-2000 marketing year has 
been reviewed by the Department. The Committee's marketing policy 
statement, a requirement whenever the Committee recommends implementing 
volume regulations or recommends revisions to existing volume 
regulations, meets the intent of section 985.50 of the order. During 
its discussion of revising the 1999-2000 salable quantities and 
allotment percentages, the Committee considered: (1) The estimated 
quantity of salable oil of each class held by producers and handlers; 
(2) the estimated demand for each class of oil; (3) prospective 
production of each class of oil; (4) total of allotment bases of each 
class of oil for the current marketing year and the estimated total of 
allotment bases of each class for the ensuing marketing year; (5) the 
quantity of reserve oil, by class, in storage; (6) producer prices of 
oil, including prices for each class of oil; and (7) general market 
conditions for each class of oil, including whether the estimated 
season average price to producers is likely to exceed parity. 
Conformity with the Department's ``Guidelines for Fruit, Vegetable, and 
Specialty Crop Marketing Orders'' has also been reviewed and confirmed.
    This increase in the 1999-2000 marketing year Native spearmint oil 
salable quantity and allotment percentage allows for anticipated market 
needs for this class of oil. In determining anticipated market needs, 
consideration by the Committee was given to historical sales, and 
changes and trends in production and demand.
    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the AMS has considered the economic impact of this action on 
small entities. Accordingly, the AMS has prepared this initial 
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 7 spearmint oil handlers subject to regulation under the 
marketing order and approximately 119 producers of Scotch spearmint oil 
and 105 producers of Native spearmint oil in the regulated production 
area. Small agricultural service firms are defined by the Small 
Business Administration (SBA) (13 CFR 121.201) 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, the Committee 
estimates that 2 of the 7 handlers regulated by the order could be 
considered small entities. Most of the handlers are large corporations 
involved in the international trading of essential oils and the 
products of essential oils. In addition, the Committee estimates that 
25 of the 119 Scotch spearmint oil producers and 7 of the 105 Native 
spearmint oil producers would be classified as small entities under the 
SBA definition. 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 oil for weed, insect, and 
disease control. A normal spearmint oil 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 oil 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 oil production, most 
spearmint oil 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 larger producers may have, 
increasing the Native salable quantity and allotment percentage will 
help both large and small producers by improving returns.
    This rule amends an interim final rule that was published in the 
Federal Register on February 10, 2000 (65 FR 6528). That rule increased 
the salable quantity by 102,311 pounds from 1,125,755 pounds to 
1,228,066 pounds, and the allotment percentage by 5 percent from 55 
percent to 60 percent. This amended interim final rule increases the 
salable quantity an additional 81,849 pounds from 1,228,066 pounds to 
1,309,915 pounds, and the allotment percentage an additional 4 percent 
from 60 percent to 64 percent for Native spearmint oil for the 1999-
2000 marketing year. This rule relaxes the regulation of Native 
spearmint oil and will allow producers to meet market needs and improve 
returns.
    The Committee considered alternatives to the 4 percent increase 
based on projections and historical data available at the meeting. 
Generally, spearmint oil producers and buyers attending the meeting 
recommended that the Native spearmint oil salable quantity be increased 
by at least an additional 55,000 pounds. The Committee reached its 
recommendation to increase the Native spearmint oil salable quantity by 
an additional 81,849 pounds and the allotment percentage by 4 percent 
after careful consideration of all available information, and believes 
that the level recommended will achieve the objectives sought. Without 
the increase, the Committee believes the industry will not be able to 
meet market needs. By recommending a greater increase than the market 
might otherwise demand, the Committee believes that any further 
unanticipated

[[Page 15835]]

demand for Native spearmint oil during the remainder of the marketing 
year will be satisfied.
    As of February 23, 2000, approximately 40,966 pounds of Native 
spearmint oil was available for market. During the past 5 years, the 
average sales of Native spearmint oil from March 1 to May 31 totaled 
75,586 pounds, while the average sales for the period June 1 through 
February 29 totaled 1,087,385 pounds. The Far West spearmint oil 
industry has sold approximately 1,282,150 pounds of Native spearmint 
oil through February 23, 2000. This action has the effect of adding 
73,545 pounds of Native spearmint oil to the amount available for 
market, bringing the total available supply for the remainder of this 
marketing year up to approximately 114,511 pounds.
    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 duplicative 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 meetings were widely publicized throughout 
the spearmint oil industry and all interested persons were invited to 
attend and participate on all issues. Interested persons are also 
invited to submit information on the regulatory and informational 
impacts of this action on small businesses.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at the 
following website: http://www.ams.usda.gov/fv/moab.html. Any questions 
about the compliance guide should be sent to Jay Guerber at the 
previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    After consideration of all relevant matter presented, including 
that contained in the prior proposed and final rules in connection with 
the establishment of the salable quantities and allotment percentages 
for Scotch and Native spearmint oils for the 1999-2000 marketing year, 
the prior interim final rule increasing the 1999-2000 marketing year 
Native spearmint oil salable quantity and allotment percentage, the 
Committee's recommendation and other available information, it is found 
that to revise Sec. 985.218 to change the salable quantity and 
allotment percentage for Native spearmint oil, as hereinafter set 
forth, will tend to effectuate the declared policy of the Act.
    This rule invites comments on a revision to the salable quantity 
and allotment percentage for Native spearmint oil for the 1999-2000 
marketing year. A 30-day comment period is provided. Thirty days is 
deemed appropriate because this rule increases the quantity of Native 
spearmint oil that may be marketed during the marketing year ending on 
May 31, 2000. Additionally, the current quantity of Native spearmint 
oil available for market may not be adequate to satisfy market needs 
for the remainder of the marketing year. Any comments received will be 
considered prior to finalization of this rule.
    Pursuant to 5 U.S.C. 553, it is also found and determined upon good 
cause that it is impracticable, unnecessary, and contrary to the public 
interest to give preliminary notice prior to putting this rule into 
effect and that good cause exists for not postponing the effective date 
of this rule until 30 days after publication in the Federal Register 
because: (1) This rule increases the quantity of Native spearmint oil 
that may be marketed during the marketing year which ends on May 31, 
2000; (2) the current quantity of Native spearmint oil may be 
inadequate to meet demand for the remainder of the season, thus making 
the additional oil available as soon as is practicable is beneficial to 
both handlers and producers; (3) the Committee unanimously recommended 
this change at a public meeting and interested parties had an 
opportunity to provide input; and (4) this rule provides a 30-day 
comment period and any comments received will be considered prior to 
finalization of this rule.

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 
amended as follows:

PART 985--MARKETING ORDER REGULATING THE HANDLING OF 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. Section 985.218 is amended by republishing the introductory text 
and revising paragraph (b) to read as follows:


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

Sec. 985.218  Salable quantities and allotment percentages--1999--2000 
marketing year.

    The salable quantity and allotment percentage for each class of 
spearmint oil during the marketing year beginning on June 1, 1999, 
shall be as follows:
* * * * *
    (b) Class 3 (Native) oil--a salable quantity of 1,309,915 pounds 
and an allotment percentage of 64 percent.

    Dated: March 21, 2000.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 00-7333 Filed 3-23-00; 8:45 am]
BILLING CODE 3410-02-P