[Federal Register Volume 68, Number 112 (Wednesday, June 11, 2003)]
[Rules and Regulations]
[Pages 34777-34779]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-14624]



 ========================================================================
 Rules and Regulations
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains regulatory documents 
 having general applicability and legal effect, most of which are keyed 
 to and codified in the Code of Federal Regulations, which is published 
 under 50 titles pursuant to 44 U.S.C. 1510.
 
 The Code of Federal Regulations is sold by the Superintendent of Documents. 
 Prices of new books are listed in the first FEDERAL REGISTER issue of each 
 week.
 
 ========================================================================
 

  Federal Register / Vol. 68, No. 112 / Wednesday, June 11, 2003 / 
Rules and Regulations  

[[Page 34777]]



DEPARTMENT OF AGRICULTURE

Farm Service Agency

7 CFR Part 723

Commodity Credit Corporation

7 CFR Part 1464

RIN 0560-AG60


2002 Marketing Quota and Price Support for Flue-Cured Tobacco

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

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The purpose of this final rule is to codify determinations 
made by the Secretary of Agriculture (Secretary) for the 2002 crop of 
flue-cured tobacco. In accordance with the Agricultural Adjustment Act 
of 1938, as amended, (1938 Act), the Secretary determined the 2002 
marketing quota for flue-cured tobacco to be 582.0 million pounds. In 
accordance with the Agricultural Act of 1949, as amended, (1949 Act), 
the Secretary determined the 2002 price support level to be 165.4 cents 
per pound. This rule will also codify the 2000 and 2001 marketing 
quotas and price support levels. The intended effect of this rule is to 
codify the announced quota levels as required.

EFFECTIVE DATE: December 15, 2001.

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 is issued in conformance with Executive Order 12866 
and has been determined to be significant and was reviewed by OMB.

Regulatory Flexibility Act

    The Regulatory Flexibility Act is not applicable to this final rule 
since neither the Commodity Credit Corporation (CCC) nor the Farm 
Service Agency (FSA) are required by 5 U.S.C. 553 or any other law to 
publish a notice of proposed rulemaking for the subject matter of this 
rule.

Federal Assistance Programs

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

Environmental Evaluation

    An environmental evaluation found that this action will have no 
significant impact on the quality of the human environment. Therefore, 
neither an environmental assessment nor an environmental impact 
statement is needed.

Executive Order 12372

    This program is not subject to the provisions of Executive Order 
12372, which require intergovernmental consultation with State and 
local officials. See the notice related to 7 CFR part 3015, subpart V, 
published at 48 FR 29115 (June 24, 1983).

Unfunded Mandates

    This rule contains no unfunded mandates and, thus, is not subject 
to the provisions of title II of the Unfunded Mandates Reform Act of 
1995.

Paperwork Reduction Act

    These 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.

Rulemaking

    This rule is issued pursuant to the 1938 Act and the 1949 Act. 
Section 1108(c) of Pub. L. 99-972 provides that the determinations made 
in this rule are not subject to the provisions for public participation 
in rulemaking in 5 U.S.C. 553 or in any directive of the Secretary. 
Further, this rule affirms existing decisions which were time-
sensitive. Hence, a delay in the implementation of the matters affirmed 
in this notice would have been impracticable, unnecessary, and counter 
to the public interest. Thus, the matters affirmed in this notice were 
made effective at the time that they were announced by press release.
    On December 15, 2001, the Secretary announced the national 
marketing quota and the price support level for the 2002 crop of flue-
cured tobacco. A number of related determinations were made at the same 
time, which this final rule affirms. In addition this rule affirms 
similar determinations made with respect to the 2000 and 2001 crops of 
flue-cured tobacco.

Marketing Quota

    Section 317(a)(1)(B) of the 1938 Act provides, in part, that the 
national marketing quota for a marketing year for flue-cured tobacco is 
the quantity of such tobacco that is not more than 103 percent nor less 
than 97 percent of the total of: (1) the amount of flue-cured tobacco 
that domestic manufacturers of cigarettes estimate they intend to 
purchase on United States 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)(C) of the 
1938 Act as the greater of 100 million pounds or 15 percent of the 
national marketing quota for flue-cured 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 2002 crop of flue-cured tobacco by December 
1, 2002. Five such manufacturers were required to submit such a 
statement for the 2002 crop and the total of their intended purchases 
for the 2002 crop is 310.0 million pounds. The 3-year average of 
exports is 249.9 million pounds.
    The national marketing quota for the 2001 crop year was 548.9 
million

[[Page 34778]]

pounds. In accordance with section 301(b)(14)(C) of the 1938 Act the 
reserve stock level is the greater of 15 percent of the previous year's 
quota (548.9 million pounds x .15 = 82.3 million pounds) or 100.0 
million pounds. Thus, the reserve stock level for use in determining 
the 2002 marketing quota for flue-cured tobacco is 100.0 million 
pounds.
    Pre-1997 loan crops have been sold. Further, manufacturers agreed 
in December of 1998, 1999, and 2000 to purchase an additional 210.0 
million pounds, thereby reducing loan inventory to 46.9 million pounds. 
In addition, the Agricultural Rural Development, Food and Drug 
Administration and Related Agencies Appropriations Act of 2001 (Public 
Law 106-387), as amended, allowed the forfeiture of 1999 loan 
inventories. Loans from the 2001 crop total 121 million pounds, making 
total loan stocks 77.9 million pounds. Accordingly, the adjustment to 
maintain loan stocks at the reserve supply level is an increase of 22.1 
million pounds.
    The total of the three marketing quota components for the 2001-2002 
Marketing Year (MY) is 582 million pounds. Accordingly, the national 
marketing quota for the MY beginning July 1, 2002, for flue-cured 
tobacco is 582 million pounds.
    Section 317(a)(2) of the 1938 Act provides that the national 
average yield goal be set at a level that the Secretary determines will 
improve or ensure the usability of the tobacco and increase the net 
return per pound to the producers. Since average yields have not 
changed significantly in recent years, the national average yield goal 
for the 2002 MY will be 2,088 pounds per acre, the same as last year's 
level.
    In accordance with section 317(a)(3) of the 1938 Act, the national 
acreage allotment for the 2002 crop of flue-cured tobacco is determined 
to be 278,735.63 acres, derived from dividing the national marketing 
quota by the national average yield goal.
    In accordance with section 317(e) 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 3 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 a national 
reserve for the 2002 crop of flue-cured tobacco of 733 acres is 
adequate for these purposes.
    In accordance with section 317(a)(4) of the 1938 Act, the national 
acreage factor for the 2002 crop of flue-cured tobacco for uniformly 
adjusting the acreage allotment of each farm is determined to be 1.06, 
which is the result of dividing the 2002 national allotment (278,735.63 
acres) minus the national reserve (733 acres) by the total of 
allotments established for flue-cured tobacco farms in 2001 (262,265.98 
acres).
    In accordance with section 317(a)(7) of the 1938 Act, the national 
yield factor for the 2002 crop of flue-cured tobacco is determined to 
be 0.9251, which is the result of dividing the national average yield 
goal (2,088 pounds) by a weighted national average yield (2,257 
pounds).

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 2002 crop of flue-cured 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 2002 crop of flue-cured tobacco shall be:
    (1) The level, in cents per pound, at which the 2001 crop of flue-
cured tobacco was supported, plus or minus, respectively,
    (2) 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:
    (A) 66.7 percent of the amount by which:
    (I) The average price received by producers for flue-cured tobacco 
on the U.S. auction markets, as determined by the Secretary, during the 
5 MY's immediately preceding the MY 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 flue-cured tobacco 
on the U.S. auction markets, as determined by the Secretary, during the 
5 MY's immediately preceding the MY prior to the MY 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
    (B) 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 for which the determination is made.
    The difference between the two 5-year averages (i.e., the 
difference between (A)(I) and (A)(II)) is 0.10 cent per pound. The 
difference in the cost index from January 1, 2001, to December 31, 
2001, is -1.7 cents per pound. Applying these components to the price 
support formula (0.0 cent per pound, two-thirds weight; -1.7 cents per 
pound, one-third weight) results in a weighted total of -0.6 cent per 
pound. As indicated, section 106 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. As there was no justifiable basis found for limiting the 
decrease (which reflected a change in production costs), and in order 
to aid in the marketing of the crop, that discretion was not utilized. 
Accordingly, the 2002 crop of flue-cured tobacco will be supported at 
165.4 cents per pound, 0.6 cent lower than the 2001 crop.
    The 2000 and 2001 quotas and price support were determined using 
the same methodology as described for the 2002 quota and price support. 
With respect to the marketing quota determinations, for the 2000 crop 
the purchase intentions, exports (three year average), reserve stock 
average, and final quota (103% of the total) were 286.0, 334.1, (-
92.9), and 543.0 and for 2001 were 297.0, 297.7, (-61.8), and 548.9. 
The adjustment up to 103% was made, as allowed by statute, to lessen 
the impact on producers of the declining quotas. Following the time of 
the determinations for the 2002 crops, the Congress, in Pub. L. 107-71, 
adjusted the reserve stock level for flue-cured tobacco, doing so in 
section 1610 of that Act. That change will impact future crops. With 
respect to price support the price indices used in the price support 
level determination, the changes (in cents) in prices received and in 
prices paid per pound were for the 2000 crop determination, 0.4 and 1.5 
and for the 2001-crop calculation (-0.2) and 6.5. In order to aid the 
marketing of the 2000 and 2001 crops, the Secretary used the discretion 
allowed by the authorizing statute to limit the price support increase 
to 65% of the increase that would have otherwise been produced by the 
formula. Copies and other supporting documents are available from Mr. 
Robert L. Tarczy, USDA, Farm Service Agency, Stop 0514,1400 
Independence Avenue, SW., Washington, DC 20250-0514, telephone 202-720-
5346.

[[Page 34779]]

List of Subjects

7 CFR Part 723

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

7 CFR Part 1464

    Loan programs-agriculture, Price support programs, Tobacco, 
Reporting and recordkeeping requirements, Warehouses.

0
Accordingly, 7 CFR parts 723 and 1464 are amended as follows:

PART 723--TOBACCO

0
1. The authority citation for 7 CFR part 723 continues to read as 
follows:


    Authority: 7 U.S.C., 1301-1314, 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.


0
2. Section 723.111 is amended by adding paragraphs (h) through (j) to 
read as follows:


Sec.  723.111  Flue-cured (types 11-14) tobacco.

* * * * *
    (h) The 2000 crop national marketing quota is 543.0 million pounds.
    (i) The 2001 crop national marketing quota is 548.9 million pounds.
    (j) The 2002 crop national marketing quota is 582.0 millions 
pounds.

PART 1464--TOBACCO

0
3. 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; Pub. L. 106-78, Pub. L. 106-113, Stat.1135 and 
Pub. L. 106-224.


0
4. Section 1464.12 is amended by adding paragraphs (h) though (j) to 
read as follows:


Sec.  1464.12  Flue-cured (types 11-14) tobacco.

* * * * *
    (h) The 2000 crop national price support level is 164.0 cents per 
pound.
    (i) The 2001 crop national price support level is 166.0 cents per 
pound.
    (j) The 2002 crop national price support level is 165.4 cents per 
pound.

    Signed in Washington, DC, on June 3, 2003.
James R. Little,
Administrator, Farm Service Agency, Executive Vice President, Commodity 
Credit Corporation.
[FR Doc. 03-14624 Filed 6-10-03; 8:45 am]
BILLING CODE 3410-05-P