[Federal Register: May 11, 2000 (Volume 65, Number 92)]
[Rules and Regulations]
[Page 30341-30345]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11my00-3]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 985
[Docket No. FV-00-985-2 FR]
Marketing Order Regulating the Handling of Spearmint Oil Produced
in the Far West; Revision of Administrative Rules and Regulations
Governing Issuance of Additional Allotment Base to New Producers
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: This rule reduces the number of regions established for
issuing additional allotment base to new producers from three regions
to two regions and revises the procedure used for determining the
distribution of
[[Page 30342]]
additional allotment base to new producers. 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 provide a more equitable
distribution of allotment base to new producers.
EFFECTIVE DATE: May 12, 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 369,
Portland, Oregon 97204; 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, D.C. 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, P.O. Box 96456, room
2525-S, Washington, DC 20090-6456; telephone (202) 720-2491, Fax: (202)
720-5698, or E-mail: Jay.Guerber@usda.gov.
SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing
Order No. 985 (7 CFR Part 985), as amended, 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 final rule has been reviewed under Executive Order 12988,
Civil Justice Reform. This rule is not intended to have retroactive
effect. 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 spearmint oil order is a volume control program that authorizes
the regulation of spearmint oil produced in the Far West through annual
allotment percentages and salable quantities for Class 1 (Scotch) and
Class 3 (Native) spearmint oils. The salable quantity limits the
quantity of each class of spearmint oil that may be marketed from each
season's crop. Each producer is allotted a share of the salable
quantity by applying the allotment percentage to that producer's
allotment base for the applicable class of spearmint oil. Handlers may
not purchase spearmint oil in excess of a producer's annual allotment,
or from producers who have not been issued an allotment base under the
order.
Section 985.53(d)(1) requires the Committee to annually make
additional allotment base available in an amount not greater than 1
percent of the total allotment base for each class of spearmint oil.
The order specifies that 50 percent of the additional allotment base be
made available for new producers and 50 percent be made available for
existing producers. A new producer is any person who has never been
issued allotment base for a class of oil, and an existing producer is
any person who has been issued allotment base for a class of oil.
Provision is made in the order for new producers to apply to the
Committee for the annually available additional allotment base, which
in turn is issued to applicants in each oil class by lottery. The
additional allotment base being made available to existing producers is
distributed equally among all existing producers who apply.
Section 985.53(d)(3) of the order provides authority for the
establishment of rules governing the annual distribution of additional
allotment base. Accordingly, on October 6, 1999, the Committee
unanimously recommended revising Sec. 985.153 of the order's rules and
regulations to provide a more equitable distribution of allotment base
to new producers. Section 985.153 provides regulations for the issuance
of additional allotment base to new and existing producers. This final
rule: (1) Reduces the number of regions established for issuing
additional allotment base to new producers from three regions to two
regions; and (2) revises the procedure used for determining the
distribution of additional allotment base to new producers to take into
account the reduced number of regions.
Currently, Sec. 985.153(c) establishes the regions for issuing
additional allotment base as follows:
(A) Region 1--The State of Oregon and those portions of Utah and
Nevada included in the production area.
(B) Region 2--The State of Idaho.
(C) Region 3--The State of Washington.
Under the current provisions, the names of all eligible new
producers were placed in separate lots per class of oil and region.
Names are then drawn based on the amount of additional allotment base
available and the Committee's determination of the minimum economic
enterprise required to produce each class of oil. These procedures
result in three new Scotch spearmint oil producers (one from each
region) receiving approximately 3,100 pounds of allotment base each,
and three new Native spearmint oil producers (one from each region)
receiving approximately 3,400 pounds of allotment base each.
This rule replaces the three regions with the following two
regions:
(A) Region A--The State of Washington.
(B) Region B--All areas of the production area outside the State of
Washington.
Additionally, this rule modifies the method used to draw names by
specifying that the names of all eligible new producers are placed in
separate lots based on two regions rather than three regions. For each
class of oil, separate drawings will be held from a list of all
applicants from Region A, from a list of all applicants from Region B,
and from a list of all remaining applicants from Regions A and B
combined. If, in any marketing year, there are no requests in a class
of oil from eligible new producers in a region, such unused allotment
base will be issued to two eligible new producers whose names are
selected by drawing from a lot containing the names of all remaining
eligible new producers from the other region for that class of oil.
Thus, depending upon the amount of additional base available and the
minimum economic enterprise needed for oil production, three new
producers of each class of oil will receive equal portions of the
additional base made available each year.
[[Page 30343]]
The Committee made this recommendation after its analysis of
statistics relating to current spearmint oil production and the number
of requests received each year for additional allotment base from the
various States included in the production area. The following tables
show the number of actual applications for additional Scotch and Native
spearmint oil base over the most recent ten-year period:
Applications for AdditionaL Scotch Spearmint Oil Base
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WA ID OR UT NV
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1991........................................... 99 42 17 3 0
1992........................................... 90 47 16 3 0
1993........................................... 40 21 4 1 0
1994........................................... 27 22 5 1 0
1995........................................... 42 21 3 0 0
1996........................................... 31 19 3 0 0
1997........................................... 35 16 2 0 0
1998........................................... 32 26 1 0 0
1999........................................... 25 22 0 1 0
2000........................................... 21 9 0 0 0
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Applications for Additional Native Spearmint Oil Base
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WA ID OR UT NV
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1991........................................... 112 27 16 5 0
1992........................................... 100 49 19 5 0
1993........................................... 47 28 5 2 0
1994........................................... 44 24 8 3 0
1995........................................... 56 21 8 2 0
1996........................................... 44 19 3 0 0
1997........................................... 43 19 2 1 0
1998........................................... 39 23 2 0 0
1999........................................... 31 23 0 0 1
2000........................................... 26 15 2 0 0
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As shown in the above tables, there has consistently been few
applications received from new producers in the States of Oregon, Utah,
and Nevada, while the number of applications from new producers in
Washington, followed to a lesser extent by the number of applications
from new producers in Idaho, has consistently been much higher.
Committee records also show that the number of producers, as well as
the amount of allotment base held by those producers, is greatest in
Washington followed in decreasing order by Idaho, Oregon, Utah, and
Nevada. Therefore, reducing the number of regions from 3 to 2, and
changing the procedures used in distributing the base will result in a
more equitable distribution of allotment base to new producers. The
changes will also make the additional allotment base available to new
producers from the States which have historically requested the most
base.
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), the Agricultural Marketing Service (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
order, and approximately 119 producers of Class 1 (Scotch) spearmint
oil and approximately 105 producers of Class 3 (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 could 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 SBA category of large
businesses.
Small spearmint oil producers generally are not extensively
diversified
[[Page 30344]]
and as such are more at risk to market fluctuations. Such small
producers generally need to market their entire annual crop and do not
have the luxury of having other crops 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 incomes from alternate crops could support the operation for a
period of time. Being reasonably assured of a stable price and market
provides small producing entities with the ability to maintain proper
cash flow and to meet annual expenses. Thus, the market and price
stability provided by the order potentially benefit the small producer
more than such provisions benefit large producers. Even though a
majority of handlers and producers of spearmint oil may not be
classified as small entities, the volume control feature of this order
has small entity orientation. The order has contributed to the
stabilization of producer prices.
Section 985.53 of the order provides that each year the Committee
make available additional allotment base for each class of oil in the
amount of no more than 1 percent of the total allotment base for that
class of oil. This affords an orderly method for new spearmint oil
producers to enter into business and existing producers the ability to
expand their operations as the spearmint oil market and individual
conditions warrant. One-half of the 1 percent increase is issued
annually by lot to eligible new producers for each class of oil. To be
eligible, a producer must never have been issued allotment base for the
class of spearmint oil such producer is making application for, and
have the ability to produce such spearmint oil. The ability to produce
spearmint oil is generally demonstrated when a producer has experience
at farming, and owns or rents the equipment and land necessary to
successfully produce spearmint oil.
This rule: (1) Reduces the number of regions established for
issuing additional allotment base to new producers from three regions
to two regions; and (2) revises the procedure used for determining the
distribution of additional allotment base to new producers to take into
account the reduced number of regions. The Committee recommended this
rule to provide for a more equitable distribution of allotment base to
new producers.
During its deliberations, the Committee considered alternatives to
their recommendation. The first option discussed would have left
Sec. 985.153(c) unchanged. This was rejected because of the need to
develop a more equitable method of issuing additional base given the
light application record from some of the States within the production
area. The Committee also discussed eliminating the use of different
regions in its additional allotment base issuance procedure and having
one drawing for the calculated number of recipients per class of oil
for the entire production area. This option was also rejected because
it would not ensure geographic distribution of the additional base.
The Committee made its recommendation after careful consideration
of available information, including the aforementioned alternative
recommendations, the minimum economic enterprise required for spearmint
oil production, historical statistics relating to the locations of the
producers applying for the annual additional allotment base, and other
factors such as number of producers by State and the amount of
allotment base held by such producers. Based on its review, the
Committee believes that the action recommended is the best option
available to ensure that the objectives sought will be achieved.
The information collection requirements contained in the section of
the order's rules and regulations being amended by this rule have been
previously approved by the Office of Management and Budget (OMB) under
the provisions of 44 U.S.C. chapter 35 and have been assigned OMB No.
0581-0065. This action will not impose any additional reporting or
record keeping requirements on either small or large spearmint oil
producers and handlers. All reports and forms associated with this
program are reviewed periodically 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.
A proposed rule was published in the Federal Register on February
17, 2000 (65 FR 8069). A 60-day comment period was provided to allow
interested persons the opportunity to respond to the proposal,
including any regulatory and informational impacts of this action on
small businesses. A copy of the proposed rule was faxed and mailed to
the Committee office, which in turn notified Committee members and
spearmint oil producers and handlers of the proposed action. In
addition, the Committee's meeting was widely publicized throughout the
spearmint oil industry and all interested persons were invited to
attend and participate on all issues. A copy of the proposal was also
made available on the Internet by the U.S. Government Printing Office.
No comments were received. Accordingly, no changes are made to the rule
as proposed.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at the
following web site: 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 the
information and recommendation submitted by the Committee and other
available information, it is hereby found that this rule, 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
1. The authority citation for 7 CFR Part 985 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. In Sec. 985.153, paragraph (c) is revised to read as follows:
Sec. 985.153 Issuance of additional allotment base to new and existing
producers.
* * * * *
(c) Issuance--(1) New producers. (i) Regions: For the purpose of
issuing additional allotment base to new producers, the production area
is divided into the following regions:
(A) Region A. The State of Washington.
(B) Region B. All areas of the production area outside the State of
Washington.
(ii) Each year, the Committee shall determine the size of the
minimum economic enterprise required to produce each class of oil. The
Committee shall thereafter calculate the number of new producers who
will receive allotment base under this section for each class of oil.
The Committee shall include that information in its announcements to
new producers in each region informing them when to submit requests for
allotment base. The Committee shall
[[Page 30345]]
determine whether the new producers requesting additional base have
ability to produce spearmint oil. The names of all eligible new
producers from each region shall be placed in separate lots per class
of oil. For each class of oil, separate drawings shall be held from a
list of all applicants from Region A, from a list of all applicants
from Region B, and from a list of all remaining applicants from Regions
A and B combined. If, in any marketing year, there are no requests in a
class of oil from eligible new producers in a region, such unused
allotment base shall be issued to two eligible new producers whose
names are selected by drawing from a lot containing the names of all
remaining eligible new producers from the other region for that class
of oil. The Committee shall immediately notify each new producer whose
name was drawn and issue that producer an allotment base in the
appropriate amount.
* * * * *
Dated: May 5, 2000.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 00-11836 Filed 5-10-00; 8:45 am]
BILLING CODE 3410-02-P
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