02-910. Cotton Research and Promotion Program: Determination of Whether To Conduct a Referendum Regarding 1990 Amendments to the Cotton Research and Promotion Act

AGENCY:

Agricultural Marketing Service, USDA.

ACTION:

Notice.

SUMMARY:

This notice announces the Department's view, based on a review by the Agricultural Marketing Service (AMS), that it is not necessary to conduct a referendum among producers and importers on continuation of the 1990 amendments to the Cotton Research and Promotion Act (Act). The 1990 amendments require the Secretary of Agriculture, once every five years, to conduct a review to determine whether to hold a referendum. The two major changes to the Cotton Research and Promotion Program made by the 1990 amendments were the elimination of assessment refunds to producers and a new assessment levied on imported cotton and the cotton content of imported products. Although USDA is of the view that a referendum is not needed, it will initiate a sign-up period as required by the Act, to allow cotton producers and importers to request a referendum.

FOR FURTHER INFORMATION CONTACT:

Whitney Rick, Chief, Cotton Research and Promotion Staff, Cotton Program, AMS, USDA, STOP 0224, 1400 Independence Avenue, SW, Washington, DC 20250-0224, Telephone [phone], Facsimile [phone] or e-mail [e-mail].

SUPPLEMENTARY INFORMATION:

In July 1991, the Agricultural Marketing Service (AMS) implemented the 1990 amendments to the Cotton Research and Promotion Act (Act). These amendments provided for: (1) Importer representation on the Cotton Board by an appropriate number of persons to be determined by the Secretary who import cotton or cotton products into the United States (U.S.) and are selected by the Secretary from nominations submitted by importer organizations certified by the Secretary of Agriculture; (2) assessments levied on imported cotton and cotton products at a rate determined in the same manner as for U.S. cotton; (3) increasing the amount the Secretary can be reimbursed for conduct of a referendum from $200,000 to $300,000; (4) reimbursing government agencies who assist in administering the collection of assessments on imported cotton and cotton products; and (5) terminating the right of producers to demand a refund of assessments.

Results of the July 1991 referendum showed that of the 46,220 valid ballots received; 27,879 or 60 percent of the persons voting, favored the amendments to the Cotton Research and Promotion Order (Order), and 18,341 or 40 percent opposed the amendments. AMS developed implementing regulations for the import assessment effective August 1, 1992, the elimination of the producer refund effective September 1, 1991, and provided for importer representation on the Cotton Board effective January 1, 1993. The addition of these new members brought the Cotton Board's membership to 25 (21 producer members and 4 importer members).

On October 8, 1996, USDA issued the results of the first five-year review of the Cotton Research and Promotion Program. USDA announced its view not to conduct a referendum regarding the 1991 amendments to the Order (61 FR 52772). During the period of January 15 through April 14, 1997, the Department conducted a sign-up period for all eligible persons to request a continuance referendum on the 1990 Act amendments. The results of the sign-up period did not meet the criteria as established by the Act for a continuance and therefore, a referendum was not conducted.

The Department has prepared a second report that describes the impact of the Cotton Research and Promotion Program on the cotton industry and the views of those receiving its benefits. The report is based on a review conducted by AMS to determine whether to hold a referendum of producers and importers on the continuation of the 1990 Act amendments. The review report is available upon written request to the Chief of the Cotton Research and Promotion Staff at the address provided above. Comments were solicited from all interested parties including from persons who pay the assessments as well as from organizations representing cotton producers and importers (66 FR 16440; March 26, 2001). Economic data was also reviewed in order to report on the general climate of the cotton industry. Finally, a number of independent sources of information were reviewed to help identify perspectives from outside the program including the results of independent program evaluations assessing the effects of the Cotton Research and Promotion Program activities on demand for Upland cotton, return-on-investment to cotton producers, the net value to companies who import cotton products and raw cotton, and the overall rate-of-return and qualitative benefits and returns associated with the Cotton Research and Promotion Program.

The review report cited that the 1990 amendments to the Act were successfully implemented and are operating as intended. The report also noted that there is a general consensus within the cotton industry that the Cotton Research and Promotion Program and the 1990 amendments to the Act are operating as intended. Written comments, economic data, and results from two independent evaluations support this conclusion. Industry comments cited examples of how the additional funding has yielded benefits by increasing the demand and consumption for cotton.

USDA found no compelling reason to conduct a referendum regarding the 1990 Act amendments to the Cotton Research and Promotion Order although some program participants support a referendum. Therefore, USDA will allow all eligible persons to request the conduct of a continuance referendum on the 1990 amendments through a sign-up period. Eligible producers and importers may sign-up to request such a referendum at the county office of the Farm Service Agency (FSA), or by mailing such a request to FSA. The Secretary will conduct a referendum if requested by 10 percent (4,622) or more of the number of cotton producers and importers voting in the most recent referendum (July 1991), with not more than 20 percent of such request from producers in one state or importers of cotton.

Currently, procedures for the conduct of a sign-up period appear at 7 CFR 1205.10-1205.30. These procedures will be updated as appropriate prior to the beginning of the sign-up period.

Authority: 7 U.S.C. 2101-2118.

Dated: January 9, 2002.

Kenneth C. Clayton,

Acting Administrator, Agricultural Marketing Service.