[Federal Register Volume 61, Number 16 (Wednesday, January 24, 1996)]
[Proposed Rules]
[Pages 1855-1857]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-927]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 985
[FV95-985-5PR]
Spearmint Oil Produced in the Far West; Salable Quantities and
Allotment Percentages for the 1996-97 Marketing Year
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would establish the quantity of spearmint
oil produced in the Far West, by class, that handlers may purchase
from, or handle for, producers during the 1996-97 marketing year. 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 for the
purpose of avoiding extreme fluctuations in supplies and prices, and
thus help to maintain stability in the spearmint oil market.
DATES: Comments must be received by February 23, 1996.
ADDRESSES: Interested persons are invited to submit written comments
concerning this proposed rule. Comments must be sent in triplicate to
the Docket Clerk, Fruit and Vegetable Division, AMS, USDA, room 2525,
South Building, PO Box 96456, Washington, DC 20090-6456. Comments
should reference the docket number and the date and page number of this
issue of the Federal Register and will be made available for public
inspection in the Office of the Docket Clerk during regular business
hours.
FOR FURTHER INFORMATION CONTACT: Robert J. Curry, Northwest Marketing
Field Office, Marketing Order Administration Branch, Fruit and
Vegetable Division, AMS, USDA, 1220 SW., Third Avenue, room 369,
Portland, Oregon 97204; telephone: (503) 326-2724; or Caroline C.
Thorpe, Marketing Order Administration Branch, Fruit and Vegetable
Division, AMS, USDA, room 2525, South Building, PO Box 96456,
Washington, DC 20090-6456; telephone: (202) 720-5127
SUPPLEMENTARY INFORMATION: This proposed rule is issued under Marketing
Order No. 985 (7 CFR part 985), regulating the handling of spearmint
oil produced in the Far West (Washington, Idaho, Oregon, and designated
parts of California, Nevada, Montana, and Utah). This marketing order
is effective under the Agricultural Marketing Agreement Act of 1937, as
amended (7 U.S.C. 601-
[[Page 1856]]
674), hereinafter referred to as the ``Act.''
The Department of Agriculture (Department) is issuing this rule in
conformance with Executive Order 12866.
This proposed rule has been reviewed under Executive Order 12778,
Civil Justice Reform. Under the provisions of the marketing order now
in effect, salable quantities and allotment percentages may be
established for classes of spearmint oil produced in the Far West. This
proposed rule would establish the quantity of spearmint oil produced in
the Far West, by class, that may be purchased from or handled for
producers by handlers during the 1996-97 marketing year, which begins
on June 1, 1996. This proposed 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 in equity to review the
Secretary's ruling on the petition, provided a bill in equity is filed
not later than 20 days after date of the entry of the ruling.
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), the Administrator of the Agricultural Marketing Service
(AMS) has considered the economic impact of this action on small
entities.
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 8 spearmint oil handlers subject to regulation under the
marketing order and approximately 260 producers of spearmint oil in the
regulated production area. Of the 260 producers, approximately 160
producers hold Class 1 (Scotch) oil allotment base, and approximately
145 producers hold Class 3 (Native) oil allotment base. Small
agricultural service firms are defined by the Small Business
Administration (13 CFR 121.601) 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. A minority of
producers and handlers of Far West spearmint oil may 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. The U.S. production of spearmint oil
is concentrated in the Far West, primarily Washington, Idaho, and
Oregon (part of the area covered by the marketing order). Spearmint oil
is also produced in the Midwest. The production area covered by the
marketing order accounts for approximately 75 percent of the annual
U.S. production of spearmint oil.
Pursuant to authority contained in Secs. 985.50, 985.51, and 985.52
of the marketing order, the Committee recommended the salable
quantities and allotment percentages for the 1996-97 marketing year at
its September 26, 1995, meeting. The Committee recommended the
establishment of a salable quantity and allotment percentage for Scotch
spearmint oil in a vote of six in favor and one opposed. The member
voting in opposition favored the establishment of a higher salable
quantity and allotment percentage. The Committee recommended the
establishment of a salable quantity and allotment percentage for Native
spearmint oil in a vote of seven in favor and none opposed. The
Chairman abstained from voting on both actions.
This proposed rule would establish a salable quantity of 989,303
pounds and an allotment percentage of 55 percent for Scotch spearmint
oil, and a salable quantity of 1,074,902 pounds and an allotment
percentage of 54 percent for Native spearmint oil. This rule would
limit the amount of spearmint oil that handlers may purchase from, or
handle for, producers during the 1996-97 marketing year, which begins
on June 1, 1996. Salable quantities and allotment percentages have been
placed into effect each season since the marketing order's inception in
1980.
The Committee revised its procedure for calculating the salable
quantity and allotment percentage for Scotch spearmint oil this season
by using a formula based on that portion of the entire North American
market share targeted by the Far West. The Committee chose to use a
targeted percentage of the North American market share in its
deliberations due to the increased production of Scotch spearmint oil
in Canada and certain domestic areas outside of the Far West production
area. The Far West spearmint oil industry maintained approximately 72
percent of the North American Scotch spearmint oil market share during
1980, the marketing order's first year of operation. By 1994, this had
gradually diminished to the point where the Far West had sales of
Scotch spearmint oil representing approximately 52 percent of the North
American market. Reestablishing the Far West with a majority of the
North American market share is a priority of the Committee, while at
the same time maintaining market stability. Although desiring to regain
the market share level realized in 1980, the Committee plans to work at
achieving this goal over a period of several years.
The method of calculating the Native spearmint oil salable quantity
and allotment percentage remains unchanged, with the primary
consideration being price and available supply as affected by the
estimated trade demand for Far West spearmint oil. United States
production of Native spearmint oil is centered in the Far West which
produces approximately 90 percent of the total supply.
The proposed salable quantity and allotment percentage for each
class of spearmint oil for the 1996-97 marketing year is based upon the
Committee's recommendation and the data presented below.
(1) Class 1 (Scotch) Spearmint Oil
(A) Estimated carry-in on June l, 1996--196,384 pounds. This number
is derived by subtracting the estimated 1995-96 marketing year trade
demand of 862,784 pounds from the revised 1995-96 marketing year total
available supply of 1,059,168 pounds.
(B) Estimated North American production (U.S. and Canada) for the
1996-97 marketing year--1,549,316 pounds. This number is an estimate
based on Committee information provided by producers and buyers.
(C) Percentage of North American market targeted--64.67 percent.
This number is an average of the recommended target percentages made at
each of the six regional producer meetings held throughout the Far West
[[Page 1857]]
production area during the month of September, 1995.
(D) Total quantity of Scotch spearmint oil needed to reach targeted
percentage--1,001,891 pounds. This number is the product of the
estimated 1996-97 North American production and the targeted
percentage.
(E) Minimum amount desired to have on hand throughout the season--
191,667 pounds. This number is an average of those amounts recommended
by producers at the six regional producer meetings, and reflects the
Committee's commitment in regaining market share by maintaining a
minimum quantity on hand.
(F) Total supply required--1,193,558 pounds. This number is derived
by adding the minimum desired on hand amount to the total quantity
required to meet the targeted percentage.
(G) Additional quantity required--997,174 pounds. This represents
the actual amount of additional or new oil needed to meet the
Committee's projections, and is computed by subtracting the estimated
carry-in of 196,384 pounds from the total supply required of 1,193,558
pounds.
(H) Total allotment base for the 1996-97 marketing year--1,798,732
pounds.
(I) Computed allotment percentage--55 percent. This percentage is
computed by dividing the required salable quantity by the total
allotment base.
(J) Recommended allotment percentage--55 percent.
(K) The Committee's recommended salable quantity--989,303 pounds.
(2) Class 3 (Native) Spearmint Oil
(A) Estimated carry-in on June 1, 1996--44,959 pounds. This number
is derived by subtracting the estimated 1995-96 marketing year trade
demand of 1,084,436 pounds from the revised 1995-96 marketing year
total available supply of 1,129,395 pounds.
(B) Estimated trade demand (domestic and export) for the 1996-97
marketing year--1,084,436 pounds. This number is an estimate based on
the average of total annual sales made between 1988 and 1994, handler
estimates, and Committee information provided by producers and buyers.
(C) Salable quantity required from 1996 production--1,039,477
pounds. This number is the difference between the estimated 1996-97
marketing year trade demand and the estimated carry-in on June 1, 1996.
(D) Total allotment base for the 1996-97 marketing year--1,990,559
pounds.
(E) Computed allotment percentage--52.2 percent. This percentage is
computed by dividing the required salable quantity by the total
allotment base.
(F) Recommended allotment percentage--54 percent. The Committee
recommended a percentage slightly higher than that computed so as to
maintain an ample supply of Native spearmint oil available for the
market.
(G) The Committee's recommended salable quantity--1,074,902 pounds.
The salable quantity is the total quantity of each class of oil
which handlers may purchase from or handle on behalf of producers
during a marketing year. Each producer is allotted a share of the
salable quantity by applying the allotment percentage to the producer's
allotment base for the applicable class of spearmint oil.
The Committee's recommended salable quantities of 989,303 pounds
and 1,074,902 pounds, and allotment percentages of 55 percent and 54
percent for Scotch and Native spearmint oils, respectively, are based
on anticipated 1996-97 marketing year supply and trade demand. The
relatively higher recommended salable quantities and allotment
percentages for both Scotch and Native spearmint oils for the 1996-97
marketing year, when compared to those initially recommended for the
1995-96 marketing year, are demonstrative of the Committee's concern
with the increasing production of spearmint oil, both inside and
outside the marketing order production area, and the industry's desire
to maintain a significant share of the North American market while
maintaining the overall stability of the market.
The proposed salable quantities are not expected to cause a
shortage of spearmint oil supplies. Any unanticipated or additional
market demand for spearmint oil which may develop during the marketing
year can be satisfied by an increase in the salable quantitities. Both
Scotch and Native spearmint oil producers who produce more than their
annual allotments during the 1996-97 season may transfer such excess
spearmint oil to a producer with spearmint oil production less than his
or her annual allotment or put it into the reserve pool.
This proposed regulation, if adopted, would be similar to those
which have been issued in prior seasons. Costs to producers and
handlers resulting from this proposed action are expected to be offset
by the benefits derived from improved returns.
The establishment of these salable quantities and allotment
percentages would allow for anticipated market needs based on
historical sales, changes and trends in production and demand, and
information available to the Committee. Adoption of this proposed rule
would also provide spearmint oil producers with information on the
amount of oil which should be produced for next season.
Based on available information, the Administrator of the AMS has
determined that the issuance of this proposed rule would not have a
significant economic impact on a substantial number of small entities.
A 30-day comment period is provided to allow interested persons to
respond to this proposal. All written comments received within the
comment period will be considered before a final determination is made
on this matter.
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
proposed to be amended as follows:
PART 985--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. A new Sec. 985.215 is added to read as follows:
Note: This section will not appear in the Code of Federal
Regulations.
Sec. 985.215 Salable quantities and allotment percentages--1996-97
marketing year.
The salable quantity and allotment percentage for each class of
spearmint oil during the marketing year beginning on June 1, 1996,
shall be as follows:
(a) Class 1 (Scotch) oil--a salable quantity of 989,303 pounds and
an allotment percentage of 55 percent.
(b) Class 3 (Native) oil--a salable quantity of 1,074,902 pounds
and an allotment percentage of 54 percent.
Dated: January 17, 1996.
Sharon Bomer Lauritsen,
Deputy Director, Fruit and Vegetable Division.
[FR Doc. 96-927 Filed 1-23-96; 8:45 am]
BILLING CODE 3410-02-P
