[Federal Register Volume 67, Number 197 (Thursday, October 10, 2002)]
[Notices]
[Pages 63070-63073]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-25841]


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 Notices
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 This section of the FEDERAL REGISTER contains documents other than rules 
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  Federal Register / Vol. 67, No. 197 / Thursday, October 10, 2002 / 
Notices  

[[Page 63070]]



DEPARTMENT OF AGRICULTURE

Farm Service Agency


Notice of Funds Availability; 2002 Livestock Compensation Program

AGENCY: Farm Service Agency, USDA.

ACTION: Notice.

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SUMMARY: This Notice announces the availability of $752 million under 
section 32 of the Act of August 24, 1935 (section 32) to implement the 
2002 Livestock Compensation Program (LCP). Livestock feed supplies and 
grazing availability have been significantly reduced due to the extreme 
drought that has occurred throughout much of the United States during 
2001 and 2002. The LCP was created by the United States Department of 
Agriculture (USDA) to provide immediate financial assistance to the 
producers of eligible beef, dairy, buffalo, beefalo, sheep or goats, or 
cash lessees of eligible livestock, in certain States and counties to 
offset losses due to drought. Funds will be provided to eligible 
applicants in counties declared under a disaster designation made after 
January 1, 2001, or submitted to the Secretary of Agriculture, by the 
Governor of a State or a Tribal Leader of an Indian Reservation, no 
later than September 19, 2002. The county must be approved by the 
Secretary to be eligible for the LCP. Complete eligibility criteria and 
application procedures are provided in the notice below. The Farm 
Service Agency (FSA) will determine eligible producers and the amount 
of assistance that will be paid.

DATES: FSA began accepting applications on October 1, 2002. The 
application deadline will be determined by the Deputy Administrator for 
Farm Programs of FSA. Payments will be issued to applicants meeting all 
eligibility requirements beginning October 7, 2002.

FOR FURTHER INFORMATION CONTACT: Lynn Tjeerdsma, Chief, Emergency 
Preparedness and Programs Branch, USDA/FSA, 1400 Independence Ave. SW, 
STOP 0517, Washington, D.C. 20250-0522; telephone (202) 720-7641; 
facsimile (202) 690-3610; electronic mail: Lynn--
[email protected]. Persons with disabilities who require 
alternative means for communication of regulatory information (braille, 
large print, audiotape, etc.) should contact USDA's TARGET Center at 
(202) 720-2600 (voice and TDD).

SUPPLEMENTARY INFORMATION:

Executive Order 12372

    This program is not subject to the provisions of Executive Order 
12372, which requires consultation with State and local officials.

Environmental Compliance

    Due to the drought-related emergency requiring the Agency to 
provide immediate relief, sufficient time was not available to complete 
an environmental review prior to implementing the proposed action. 
Therefore, an environmental assessment is being completed to consider 
the potential impacts of this proposed action on the human environment 
in accordance with the provisions of the National Environmental Policy 
Act of 1969 (NEPA), 42 U.S.C. 4321 et seq., the regulations of the 
Council on Environmental Quality (40 CFR Parts 1500-1508), and FSA's 
regulations for compliance with NEPA, 7 CFR part 799. A copy of the 
draft environmental assessment will be made available for public review 
and comment upon request.

Paperwork Reduction Act

    A request for emergency clearance of the information collections 
associated with this notice has been approved by the Office of 
Management and Budget (OMB) under 5 CFR 1320.13(a)(2)(iii), and been 
assigned OMB control number 0560-0223.

I. Definitions

    The following definitions are applicable to the 2002 Livestock 
Compensation Program:
    Adult beef cows are female bovine livestock, of a breed used for 
the purpose of providing meat for human consumption, that have 
delivered one or more offspring, at any time before June 1, 2002.
    Adult beef bulls are male bovine livestock, of a breed used for the 
purpose of providing meat for human consumption, to be used for 
breeding purposes, that were two years old on or before June 1, 2002.
    Adult buffalo and beefalo cows are female livestock of those 
breeds, used for the purpose of providing meat for human consumption, 
that have delivered one or more offspring, at any time before June 1, 
2002.
    Adult buffalo and beefalo bulls are male livestock of those breeds, 
used for the purpose of providing meat for human consumption, to be 
used for breeding purposes that were two years old on or before June 1, 
2002.
    Adult dairy bulls are male bovine livestock that are two years old 
on or before June 1, 2002, of a breed used for producing milk for human 
consumption, for breeding dairy cows.
    Adult dairy cows are female bovine livestock, used for the purpose 
of providing milk for human consumption, that have delivered one or 
more offspring, at any time before June 1, 2002.
    Agency is the Farm Service Agency, its employees, and any successor 
agency.
    Applicant is the individual or business entity applying for 
assistance.
    Application means the Form FSA-553, Livestock Compensation Program 
(LCP) Application. The FSA-553 is available at FSA county service 
centers and on the Internet.
    Beef bulls are male bovine livestock, used for the purpose of 
providing meat for human consumption, that as of June 1, 2002, weighed 
more than 500 pounds and were less than two years old.
    Beef replacement heifers and non-breeding heifers are female bovine 
livestock, used for the purpose of providing meat for human 
consumption, that as of June 1, 2002, weighed more than 500 pounds and 
had never delivered any offspring.
    Beef steers are neutered male bovine livestock, used for the 
purpose of providing meat for human consumption, that weighed more than 
500 pounds on or before June 1, 2002.
    Buffalo and beefalo bulls are male livestock of those breeds, used 
for the purpose of providing meat for human consumption, that as of 
June 1, 2002,

[[Page 63071]]

that weighed more than 500 pounds and were less than two years old.
    Buffalo and beefalo replacement heifers and buffalo and beefalo 
non-breeding heifers are female livestock of those breeds, used for the 
purpose of providing meat for human consumption, that as of June 1, 
2002, weighed more than 500 pounds and had never delivered any 
offspring.
    Buffalo and beefalo steers are neutered male livestock of those 
breeds, used for the purpose of providing meat for human consumption, 
that weighed more than 500 pounds on or before June 1, 2002.
    Business Entity is a corporation, partnership, joint operation, 
trust, limited liability company, or cooperative.
    Dairy bulls are male bovine livestock, of a breed used for the 
purpose of providing milk for human consumption, that as of June 1, 
2002, weighed more than 500 pounds and were less than two years old.
    Dairy replacement heifers and dairy non-breeding heifers are female 
bovine livestock, of a breed used for the purpose of providing milk for 
human consumption, that as of June 1, 2002, weighed more than 500 
pounds and had never delivered any offspring.
    Dairy steers are neutered male bovine livestock, of a breed used 
for the purpose of providing milk for human consumption, that weighed 
more than 500 pounds on or before June 1, 2002.
    Deputy Administrator or DAFP means the Deputy Administrator for 
Farm Programs, Farm Service Agency (FSA), or a designee.
    Eligible County is a county that was named as a primary county 
under a Secretarial disaster designation after January 1, 2001, for 
damages and losses due to drought; or for which a Governor of a State 
or a Tribal Leader of an Indian Reservation, requested a disaster 
designation no later than September 19, 2002, for damages and losses 
due to drought, and was subsequently approved by the Secretary as a 
primary county.
    Eligible livestock are certain beef and dairy cattle, buffalo and 
beefalo, sheep, and goats that an eligible livestock producer owned, or 
cash-leased for 90 or more days, and that were owned or subject to a 
cash lease on June 1, 2002. Certain beef and dairy cattle, buffalo and 
beefalo, sheep, and goats, subject to a contract for purchase by the 
applicant, that was negotiated prior to June 1, 2002, are eligible 
livestock.
    Eligible livestock producer is an owner or lessee of eligible 
livestock whose livestock operation headquarters is physically located 
in an eligible county.
    Goats are domesticated, bearded, horned, ruminant mammals of the 
genus Capra, including Angora goats.
    Ineligible livestock are any beef cattle, buffalo, beefalo, dairy 
cattle, sheep and goats that on June 1, 2002, were not owned or subject 
to a cash lease or under contract to be purchased by an applicant; and 
are any beef cattle, buffalo, and dairy cattle that, as of June 1, 
2002, weighed less than 500 pounds; and also include livestock owned by 
an ineligible livestock producer.
    Ineligible livestock producer is a livestock owner that slaughters, 
processes, and packs livestock meat into meat and meat products; and, 
as determined by the Deputy Administrator, is also a livestock owner 
that, for monetary reimbursement or other gain, provides feed and 
facilities for livestock owned by another person on a custom feeding 
basis; and is also a livestock owner whose livestock operation 
headquarters is not located in an eligible county.
    Sheep are domesticated, horned, ruminant mammals of the genus Ovis, 
bred for their wool, edible flesh, or skin.

II. Appeals

    An applicant may request an appeal or review of an adverse decision 
made by the Agency in accordance with 7 CFR parts 11 and 780, or its 
successor regulation.

III. Eligibility Requirements

    Applicants must meet all of the following requirements to be 
eligible for the 2002 Livestock Compensation Program:
    1. Timely application. The applicant must submit a signed form FSA-
553 completed to the best of the applicant's ability to the Agency, no 
earlier than October 1, 2002, and no later than such date as announced 
by the Deputy Administrator.
    2. Livestock owner or lessee. The applicant must own, be subject to 
a contract to purchase, or cash-lease, eligible livestock.
    3. Applicant's operation must be physically located in an eligible 
county. The applicant's livestock operation headquarters must be 
physically located in an eligible county on June 1, 2002.

IV. Gross Revenue Limitation

    A person, as defined in 7 CFR part 1400, who has annual gross 
revenue in excess of $2.5 million shall not be eligible to receive 
assistance under the 2002 Livestock Compensation Program. For the 
purpose of this determination, annual gross revenue means:
    (a) With respect to a person who receives more than 50 percent of 
such person's gross income from farming and ranching, the total gross 
revenue received from such operations; and
    (b) With respect to a person who receives 50 percent or less of 
such person's gross income from farming and ranching, the total gross 
revenue from all sources.

V. Payment Limitation

    The total amount of benefits that a person, as determined in 
accordance with 7 CFR part 1400, shall be entitled to receive under the 
2002 Livestock Compensation Program may not exceed $40,000.

VI. Determining the Amount of Assistance

    (a) Analysis of need. The $752 million targeted for the 2002 
Livestock Compensation Program is the amount of net income losses 
related to livestock production in 2001 and 2002 due to drought 
conditions. The analysis was conducted by USDA's Economic Research 
Service (ERS). The analysis utilized various models and survey data 
from several different sources, and followed procedures used to develop 
USDA's regular farm income forecasts.
    The drought-affected areas were identified from the U.S. Drought 
Monitor (a comprehensive monitoring effort of USDA, National Oceanic 
and Atmospheric Administration, National Climate Control, and the 
National Drought Mitigation Center) that classifies climate regions by 
severity of drought conditions.
    Impacts were examined for livestock producers in areas delineated 
by severity as moderate, severe, extreme and exceptional drought areas.
    The ERS analysis considered the effect of drought both on revenue 
and on operating costs to obtain the net income effect related to 
livestock production in 2001 and 2002.
    (b) Revenue losses. Livestock producers in the drought areas lost 
$103 million in gross receipts in 2001 and $583 million in 2002. 
Several factors help to explain the level of these revenue losses:
    (1) The production impacts modeled in the analysis are associated 
with heat stress and water availability. In areas with exceptional 
drought, animal deaths due to heat and greater potential for disease 
contribute to lost production and revenue.
    (2) The analysis does not measure the effect on receipts from early 
sale of cattle or herd liquidations. The significant decline in 
livestock prices since last year are not attributed to

[[Page 63072]]

drought, but do affect the amount of reduction in potential receipts.
    (c) Additional Expenses. In many cases, the response to drought 
conditions by livestock producers involves changes in production 
practices that create additional and often unanticipated costs to their 
business. An example would be extra expenses for utilities such as 
electricity and for water. Such short-run increases in the cost of 
doing business were examined and their effect on total production 
expenses ranged from five percent in exceptional drought areas to less 
than one percent in moderate drought areas. Across all drought areas, 
total additional expenses were estimated to be $51 million in 2001 and 
$415 million in 2002.
    (d) Net Impacts. The net impact on income was the combination of 
revenue losses plus additional costs incurred and deduction of 
government assistance that already has been provided in 2002 through 
the FSA Noninsured Assistance Program (NAP) and the 2002 Cattle Feed 
Program (See Notice of Funds Availability published September 3, 2002 
(67 FR 56260).
    Payments for NAP in 2002 are expected to total $250 million, and 
USDA made $150 million available for the 2002 Cattle Feed Program. The 
net impact of the drought for 2001 and 2002 was $154 million and $598 
million, respectively, for a total two-year impact of just over $750 
million.
    (e) Payment Rates. Payment rates were calculated based on standard 
feed relationships among the eligible animal types and then indexed 
against beef cattle.For a beef cow, the feed requirement used for 
previous FSA-administered feed assistance programs, such as the 
Livestock Assistance Program at 7 CFR part 1439 and the 2002 Cattle 
Feed Program described in the September 3, 2002 Notice of Funds 
Availability, is converted to a corn equivalent of 15.7 pounds of corn 
per day. Using an Olympic five-year average (average of five years with 
the highest and lowest values excluded) of 1995-2000 corn prices, the 
national average price for corn is calculated at $2.07 per bushel or 
$0.037 per pound. The support feeding rate of 15.7 pounds of corn 
multiplied by $0.037 per pound of corn required per day to support a 
beef cow is equivalent to $0.58 per day to feed a beef cow. The 
subsistence level of $0.58 per day divided into the $18.00 payment for 
an eligible beef cow results in an approximate 30-day period that the 
2002 Livestock Compensation Program will provide funds to purchase feed 
for a beef cow. A feed relationship factor of 2.6 was used for dairy 
because dairy cows typically consume 2.6 times the amount of feed 
consumed by a beef cow. This factor assumes enough feed for dairy cows 
to continue normal and even increasing levels of milk production.
    The payment rate in this program is based on a 1.75 feed 
relationship factor for dairy. This lower factor was deemed appropriate 
because of the significant payments dairy producers will receive 
beginning in October, 2002 under the new Milk Income Loss Contract 
program. It also remains high enough to ensure continued milk 
production by eligible dairy cows.

VII. Applicant Certification of Eligible Livestock

    Eligible livestock must be certified by owner or lessee on the FSA-
553. The applicant will report to FSA and provide proof of the number 
of eligible livestock that died or were sold after June 1, 2002.

VIII. Payment Eligibility

    To be eligible for payment under the 2002 Livestock Compensation 
Program, as determined by the Deputy Administrator, the applicant 
shall, as of June 1, 2002, be an owner, lessee, or under contract to 
purchase eligible livestock, whose livestock headquarters operation is 
physically located in an eligible county; who has submitted and 
subsequently received FSA County Committee approval on FSA-553, and who 
meets all other eligibility requirements.

IX. Payment Amounts

    Adult beef cows and bulls, and adult buffalo and beefalo cows and 
bulls, as defined in Part I: $18.00 per head.
    Adult dairy cows and bulls, as defined in Part I: $31.50 per head.
    Beef, dairy, buffalo and beefalo replacement heifers, steers, non-
breeding heifers, and bulls, as defined in Part I: $13.50 per head.
    All sheep and goats, as defined in Part I, born prior to June 1, 
2002: $4.50 per head.

X. Contract Liability

    All producers receiving a share of the LCP payment are jointly and 
severally liable for program violations and resulting repayments, if 
applicable.

XI. How the 2002 LCP Will Work

    Applications were accepted in FSA county offices beginning on 
October 1, 2002. On the LCP application, all owners of livestock in 
each livestock operation in an eligible county apply for payment on one 
application. Each applicant provides FSA with, and certifies to, the 
applicant's name and Tax Identification Number number, address, and 
number and type of eligible livestock. After FSA County Committee 
approval of the LCP application, payments will be issued beginning 
October 7, 2002, from the FSA county office to each approved livestock 
producer on the application.

XII. Misrepresentation, Scheme or Device

    A person shall be ineligible to receive assistance under this part, 
and be subject to such other remedies as may be allowed by law, if, 
with respect to such program, it is determined by the FSA State or 
county committee, or an official of FSA, that such person has:
    (a) Adopted any scheme or other device that tends to defeat the 
purpose of the program operated under this Notice;
    (b) Made any fraudulent representation with respect to this 
program; or
    (c) Misrepresented any fact affecting a program determination.

XIII. Liens and Claims of Creditors

    Any benefit or portion thereof due any person under this program 
shall be allowed without regard to questions of title under State law, 
and without regard to any claim or lien in favor of any person, except 
agencies of the U.S. Government.

XIV. Power of Attorney

    In those instances in which, prior to the issuance of this Notice, 
a producer has signed a power of attorney on an approved FSA-211 for a 
person or entity indicating that such power shall extend to all 
programs listed on the form, without limitation, such power will be 
considered to extend to this program unless by October 1, 2002, the 
person granting the power notified the local FSA office for the control 
county that the grantee of the power is not authorized to handle 
transactions for this program for the grantor.

XV. Administration

    Where circumstances preclude compliance due to circumstances beyond 
the applicant's control, the county or State committee may request that 
relief be granted by the Deputy Administrator under this Notice. In 
such cases, except for statutory deadlines and other statutory 
requirements, the Deputy Administrator may, in order to more equitably 
accomplish the goals of this Notice, waive or modify deadlines and 
other program requirements if the failure to meet such deadlines or 
other

[[Page 63073]]

requirements does not adversely affect operation of the program and are 
not prohibited by statute.
    The Section 32 funds allocated to FSA to provide assistance under 
this program will be monitored by careful review of regular and daily 
reports of all payments issued under the program. Upon expenditure of 
85 percent of the designated allocation, FSA will mandate a daily 
review of expenditures to ensure that payments do not exceed the 
allocation.

    Signed at Washington, DC, on October 7, 2002.
James R Little,
Administrator, Farm Service Agency.
[FR Doc. 02-25841 Filed 10-7-02; 3:59 pm]
BILLING CODE 3410-05-P