[Federal Register Volume 65, Number 242 (Friday, December 15, 2000)]
[Rules and Regulations]
[Pages 78405-78407]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-31957]


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DEPARTMENT OF AGRICULTURE

Farm Service Agency

7 CFR Part 723

Commodity Credit Corporation

7 CFR Part 1464

RIN 0560-AF85


2000 Marketing Quota and Price Support for Burley Tobacco

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

ACTION: Final rule.

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SUMMARY: The purpose of this final rule is to codify determinations 
made by the Secretary of Agriculture (Secretary) with respect to the 
2000 crop of burley tobacco. In accordance with the Agricultural 
Adjustment Act of 1938, as amended (1938 Act), the Secretary determined 
the 2000 marketing quota for burley tobacco to be 247.4 million pounds. 
In accordance with the Agricultural Act of 1949, as amended (1949 Act), 
the Secretary determined the 2000 price support level to be 180.5 cents 
per pound. A number of related

[[Page 78406]]

determinations were made at the same time, which the rule affirms.

EFFECTIVE DATE: February 1, 2000.

FOR FURTHER INFORMATION CONTACT: Robert L. Tarczy, Tobacco and Peanuts 
Division, USDA, FSA, 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 final rule has been determined to be significant for purposes 
of Executive Order 12866 and has been reviewed by OMB under Executive 
Order 12866.

Federal Assistance Program

    The title and number of the Federal Assistance Program, as found in 
the Catalog of Federal Domestic Assistance, to which this rule applies, 
are Commodity Loans and Purchases--10.051.

Executive Order 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

    These proposed amendments 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 rule is issued pursuant to the provisions of the 1938 Act and 
the 1949 Act. Section 1108(c) of Pub. L. 99-272 provides that the 
determinations made in this rule are not subject to the provisions for 
public participation in rule making contained in 5 U.S.C. 553 or in any 
directive of the Secretary. Further, since this rule affirms existing 
determinations which are time-sensitive, the rule is made effective as 
of the date of the underlying determinations.

Marketing Quota

    Section 319(c)(3) of the 1938 Act provides, in part, that the 
national marketing quota for a marketing year (MY) for burley tobacco 
shall be quantity of such tobacco that is not more than 103 percent nor 
less than 97 percent of the total of: (1) the amount of burley tobacco 
that domestic manufacturers of cigarettes estimate they intend to 
purchase on U.S. auction markets or from producers, (2) the average 
quantity exported annually from the U.S. during the 3 marketing years 
immediately preceding the marketing year for which the determination is 
being made, and (3) the quantity, if any, that the Secretary, in the 
Secretary's discretion, determines necessary to adjust loan stocks to 
the reserve stock level.
    The reserve stock level is defined in section 301(b)(14)(D) of the 
1938 Act as the greater of 50 million pounds or 15 percent of the 
national marketing quota for burley tobacco for the marketing year 
immediately preceding the marketing year for which the level is being 
determined.
    Section 320A of the 1938 Act provides that all domestic 
manufacturers of cigarettes with more than 1 percent of U.S. cigarette 
production and sales shall submit to the Secretary a statement of 
purchase intentions for the 2000 crop of burley tobacco by January 15, 
2000. Five such manufacturers were required to submit such a statement 
for the 2000 crop and the total of their intended purchases for the 
2000 crop is 242.5 million pounds. The 3-year average of exports is 
159.1 million pounds.
    The national marketing quota for the 1999 crop year was 452.9 
million pounds. Thus, in accordance with section 301(b)(14)(D) of the 
1938 Act, the reserve stock level for use in determining the 2000 
marketing quota for burley tobacco is 67.9 million pounds.
    As of January 30, 2000, the Burley Tobacco Growers Cooperative 
Association and Burley Stabilization Corporation had in their 
inventories 185.8 million pounds of burley tobacco net of deferred 
sales. The 1999-crop receipts are expected to total about 205 million 
pounds. However, any reduction in adjusting loan inventory to the 
reserve stock level for burley tobacco is limited by statute, to the 
greater of 35 million pounds or 50 percent of the amount that the total 
pool inventory exceeds the reserve stock level. Accordingly, the 
adjustment allowed to move loan stocks toward the reserve supply level 
is a decrease of 161.4 million pounds (one-half of 322.9 million 
pounds).
    The total of the three marketing quota components for the 2000 
marketing year is 240.2 million pounds. In addition, USDA used its 
discretionary authority to increase the three-component total by 3 
percent (7.2 million pounds) because the Secretary determined that the 
48.6 percent decrease called for by the quota formula would be too much 
of a hardship for small producers to handle at one time. Accordingly, 
the national marketing quota for the marketing year beginning October 
1, 2000, for burley tobacco is 247.4 million pounds.
    In accordance with section 319(c)(2) of the 1938 Act, the Secretary 
is authorized to establish a national reserve from the national quota, 
in an amount equivalent to not more than 1 percent of the national 
quota, for the purpose of making corrections in farm quotas to adjust 
for inequities and establish quotas for new farms. The Secretary has 
determined that a national reserve for the 2000 crop of burley tobacco 
of 579,000 pounds is adequate for these purposes.

Price Support

    Price support is required to be made available for each crop of a 
kind of tobacco for which quotas are in effect, or for which marketing 
quotas have not been disapproved by producers, at a level determined in 
accordance with a formula prescribed in section 106 of the 1949 Act.
    With respect to the 2000 crop of burley tobacco, the level of 
support is determined in accordance with sections 106 (d) and (f) of 
the 1949 Act. Section 106(f)(7)(A) of the 1949 Act provides that the 
level of support for the 2000 crop of burley tobacco shall be:
    (1) The level, in cents per pound, at which the 1999 crop of burley 
tobacco was supported, plus or minus, respectively,
    (a) An adjustment of not less than 65 percent nor more than 100 
percent of the total, as determined by the Secretary after taking into 
consideration the supply of the kind of tobacco involved in relation to 
demand, of:
    (i) 66.7 percent of the amount by which:
    (I) The average price received by producers for burley tobacco on 
the United States auction markets, as

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determined by the Secretary, during the 5 marketing years immediately 
preceding the marketing year for which the determination is being made, 
excluding the year in which the average price was the highest and the 
year in which the average price was the lowest in such period, is 
greater or less than:
    (II) The average price received by producers for burley tobacco on 
the United States auction markets, as determined by the Secretary, 
during the 5 marketing years immediately preceding the marketing year 
prior to the marketing year for which the determination is being made, 
excluding the year in which the average price was the highest and the 
year in which the average price was the lowest in such period; and
    (ii) 33.3 percent of the change, expressed as a cost per pound of 
tobacco, in the index of prices paid by the tobacco producers from 
January 1 to December 31 of the calendar year immediately preceding the 
year in which the determination is made.
    The difference between the two 5-year averages (i.e., the 
difference between (i) (I) and (II)) is 1.5 cents per pound. The 
difference in the cost index from January 1, 1999 to December 31, 1999, 
is 1.8 cents per pound. Applying these components to the price support 
formula (1.5 cents per pound, two-thirds weight; 1.8 cents per pound, 
one-third weight) results in a weighted total of 1.6 cents per pound. 
As indicated, section 106(f)(7)(a) of the 1949 Act provides that the 
Secretary may, on the basis of supply and demand conditions, limit the 
change in the price support level to no less than 65 percent of that 
amount. However, because the increase in price support is less than the 
cost of production, the increase was not limited. Accordingly, the 2000 
crop of burley tobacco will be supported at 180.5 cents per pound, 1.6 
cents higher than in 1999.

List of Subjects

7 CFR Part 723

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

7 CFR Part 1464

    Loan programs--tobacco, Price support programs--tobacco, Reporting 
and recordkeeping requirements.

    Accordingly, 7 CFR parts 723 and 1464 are amended as follows:

PART 723--TOBACCO

    1. The authority citation for 7 CFR part 723 continues to read as 
follows:

    Authority: 7 U.S.C. 1301, 1311-1314, 1314-1, 1314b, 1314b-1, 
1314b-2, 1314c, 1314d, 1314e, 1314f, 1314i, 1315, 1316, 1362, 1363, 
1372-75, 1421, 1445-1, and 1445-2.


    2. Section 723.112 is amended by:
    (a) Adding and reserving paragraph (g).
    (b) Adding paragraph (h) to read as follows:


Sec. 723.112  Burley (type 31) tobacco.

* * * * *
    (g) [Reserved]
    (h) The 2000-crop national marketing quota is 247.4 million pounds.

PART 1464--TOBACCO

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

    Authority: 7 U.S.C. 1421, 1423, 1441, 1445, 1445-1 and 1445-2; 
15 U.S.C. 714b and 714c.


    4. Section 1464.19 is amended by:
    (a) Adding and reserving paragraph (g).
    (b) Adding paragraph (h) to read as follows:


Sec. 1464.19  Burley (type 31) tobacco.

* * * * *
    (g) [Reserved]
    (h) The 2000 crop national price support level is 180.5 cents per 
pound.

    Signed at Washington, D.C., on December 8, 2000.
Keith Kelly,
Administrator, Farm Service Agency and Executive Vice President, 
Commodity Credit Corporation.
[FR Doc. 00-31957 Filed 12-14-00; 8:45 am]
BILLING CODE 3410-05-P