[Federal Register Volume 65, Number 99 (Monday, May 22, 2000)]
[Rules and Regulations]
[Pages 32007-32010]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-12801]



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  Federal Register / Vol. 65, No. 99 / Monday, May 22, 2000 / Rules and 
Regulations  

[[Page 32007]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 985

[Docket No. FV00-985-3 FIR]


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: Final rule.

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SUMMARY: The Department of Agriculture (Department) is adopting, as a 
final rule, without change, the provisions of an 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. This interim final rule 
amended a prior interim final rule. When combined, the two interim 
final rules increased the Native spearmint oil salable quantity by 
184,160 pounds from 1,125,755 pounds to 1,309,915 pounds, and the 
allotment percentage by 9 percent from 55 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 these actions to 
avoid extreme fluctuations in supplies and prices, and, thus, help to 
maintain stability in the Far West spearmint oil market.

EFFECTIVE DATE: June 21, 2000.

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 385, 
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.'' 
The 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 
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 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 final rule adopts, without change, the provisions of an 
interim final rule published in the Federal Register on March 24, 2000 
(65 FR 15832) that amended an interim final rule that was published in 
the Federal Register on February 10, 2000 (65 FR 6528). The two rules 
together increased the Native spearmint oil salable quantity that 
handlers may purchase from, or handle for, producers during the 1999-
2000 marketing year, which ends on May 31, 2000, by 184,160 pounds from 
1,125,755 pounds to 1,309,915 pounds. The rules also increased the 
1999-2000 allotment percentage by a total of 9 percent, from 55 percent 
to 64 percent.
    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).

[[Page 32008]]

    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 1999-2000 marketing 
year salable quantity of 1,125,755 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 
1,125,755 pounds to 1,309,915 pounds, and 55 percent to 64 percent, 
respectively, this 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 9 percent 
allotment percentage increase allows each producer to take up to an 
amount equal to 9 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 9 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.
    For the 1999-2000 marketing year, producers receiving 18,324 pounds 
of additional allotment through these increases did not have any Native 
spearmint oil in reserve. Thus, rather than the 184,160 additional 
pounds as computed in the two interim final rules, this action 
effectively makes an additional 165,836 pounds of Native spearmint oil 
available to the market.

Summary of the Native Spearmint Oil Increases for the 1999-2000 
Marketing Year

    (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.
    (G) 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.
    (H) 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.
    (I) Additional Increase in the Allotment Percentage--4 percent. 
This percentage increase was recommended by the Committee at its 
February 23, 2000, meeting.
    (J) 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, and was effective on March 25, 2000.
    (K) 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.
    (L) Final 1999-2000 Salable Quantity as Revised by Both Interim 
Final Rules--1,309,915 pounds. This figure is the sum of the initial 
salable quantity of 1,125,755 and the combined (computed) increases of 
102,311 pounds and 81,849 pounds, and is approximately 64 percent of 
the revised 1999-2000 allotment base of 2,046,214 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 continue 
to be 1,309,915 pounds and 64 percent, respectively.
    This rule continues to relax 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 Department has reviewed 
the Committee's revised marketing policy statement for the 1999-2000 
marketing year. 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.

[[Page 32009]]

    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 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 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 finalizes an interim final rule that was published in the 
Federal Register on March 24, 2000 (65 FR 15832) that amended an 
interim final rule that was published in the Federal Register on 
February 10, 2000 (65 FR 6528). The initial interim final rule 
increased the 1999-2000 marketing year 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. The amended interim final rule increased the 1999-2000 
marketing year Native spearmint oil salable quantity by an additional 
81,849 pounds from 1,228,066 pounds to 1,309,915 pounds, and the 
allotment percentage by an additional 4 percent from 60 percent to 64 
percent. This rule continues to relax the regulation of Native 
spearmint oil and will allow producers to meet market needs and improve 
returns.
    The Committee considered alternatives to the increases based on 
projections and historical data available at both meetings. 
Recommendations at both meetings generally supported increases of 5 
percent and 4 percent, respectively. The Committee reached its 
recommendations to increase the Native spearmint oil salable quantity 
by 102,311 pounds and 81,849 pounds, respectively, and the allotment 
percentage by 5 percent and 4 percent, respectively, after careful 
consideration of all available information. The Committee believes that 
the level attained in this final rule will achieve the objectives 
sought. Without the increases, the Committee believes the industry will 
not be able to meet market needs through the end of the current 
marketing year (May 31, 2000).
    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.
    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 were also 
invited to submit information on the regulatory and informational 
impacts of this action on small businesses.
    Interim final rules concerning this action were published in the 
Federal Register on February 10, 2000 (65 FR 6528), and on March 24, 
2000 (65 FR 15832). Copies of the rules were mailed and faxed to the 
Committee office, which in turn notified Committee members and 
spearmint oil producers and handlers. In addition, 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. Copies of both rules were also made available on the 
Internet by the U.S. Government Printing Office. No comments were 
received.
    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, 
both interim final rules increasing the 1999-2000 marketing year Native 
spearmint oil salable quantity and allotment percentage, the 
Committee's recommendations and other available information, it is 
found that to continue

[[Page 32010]]

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.

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

    Accordingly, the interim final rule amending 7 CFR part 985 as 
published at 65 FR 15832 on March 24, 2000, and which amended the 
interim final rule published at 65 FR 6528 on February 10, 2000, is 
adopted as a final rule without change.

    Dated: May 16, 2000.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 00-12801 Filed 5-19-00; 8:45 am]
BILLING CODE 3410-02-P