[Federal Register Volume 62, Number 6 (Thursday, January 9, 1997)]
[Rules and Regulations]
[Pages 1246-1249]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-450]
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DEPARTMENT OF AGRICULTURE
7 CFR Part 985
[FV96-985-3 IFR]
Spearmint Oil Produced in the Far West; Revision of the Salable
Quantity and Allotment Percentage for Class 3 (Native) Spearmint Oil
for the 1996-97 Marketing Year
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim final rule with request for comments.
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SUMMARY: This interim final rule increases the quantity of Class 3
(Native) spearmint oil produced in the Far West that handlers may
purchase from, or handle for, producers during the 1996-97 marketing
year. This rule was recommended by the Spearmint Oil Administrative
Committee (Committee), the agency responsible for local administration
of the marketing order for spearmint oil produced in the Far West. The
Committee recommended this rule to avoid extreme fluctuations in
supplies and prices and thus help to maintain stability in the Far West
spearmint oil market.
DATES: Effective on January 9, 1997 through May 31, 1997; comments
received by February 10, 1997 will be considered prior to issuance of a
final rule.
ADDRESSES: Interested persons are invited to submit written comments
concerning this rule. Comments must be sent in triplicate to the Docket
Clerk, Fruit and Vegetable Division, AMS, USDA, room 2525, South
Building, P.O. Box 96456, Washington, DC 20090-6456; Fax: (202) 720-
5698. All 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 97204-2807; telephone: (503) 326-2043; Fax: (503) 326-
7440; or Caroline C. Thorpe, Marketing Order Administration Branch,
Fruit and Vegetable Division, AMS, USDA, room 2525, South Building,
P.O. Box 96456, Washington, DC 20090-6456; telephone: (202) 720-8139;
Fax: (202) 720-5698. Small businesses may request information on
compliance with this regulation by contacting: Jay Guerber, Marketing
Order Administration Branch, Fruit and Vegetable Division, AMS, USDA,
P.O. Box 96456, room 2525-S, Washington, DC 20090-6456; telephone (202)
720-2491; Fax: (202) 720-5698.
SUPPLEMENTARY INFORMATION: This 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 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 rule has been reviewed under Executive Order 12988, 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 rule
increases the quantity of Native spearmint oil produced in the Far West
that may be purchased from or handled for producers by handlers during
the 1996-97 marketing year, which ends on May 31, 1997. 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 date of the entry of the ruling.
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 order). Spearmint oil is also
produced in the Midwest. The production area covered by the order
normally accounts for approximately 75 percent of the annual U.S.
production of spearmint oil.
This rule increases the quantity of Native spearmint oil that
handlers may purchase from, or handle for, producers during the 1996-97
marketing year, which ends on May 31, 1997. This rule increases the
salable quantity from 1,074,902 pounds to 1,213,692 pounds and the
allotment percentage from 54 percent to 61 percent for Native spearmint
oil for the 1996-97 marketing year.
The salable quantity is the total quantity of each class of oil
that handlers may purchase from, or handle for, producers during a
marketing year. The salable quantity calculated by the Committee is
based on the estimated trade demand. The total salable quantity is
divided by the total industry allotment base to determine an allotment
percentage. Each producer is allotted a share of the salable quantity
by applying the allotment percentage to the producer's individual
allotment base for the applicable class of spearmint oil.
The initial salable quantity and allotment percentages for Scotch
and Native spearmint oils for the 1996-97 marketing year were
recommended by the Committee at its September 26, 1995, meeting. The
Committee recommended salable quantities of 989,303 pounds and
1,074,902 pounds, and allotment percentages of 55 percent and 54
percent, respectively, for Scotch and Native spearmint oils. A proposed
rule was published in the January 24, 1996, issue of the Federal
Register (61
[[Page 1247]]
FR 1855). Comments on the proposed rule were solicited from interested
persons until February 23, 1996. No comments were received.
Accordingly, based upon analysis of available information, a final rule
establishing the salable quantities and allotment percentages for
Scotch and Native spearmint oils for the 1996-97 marketing year was
published in the March 20, 1996, issue of the Federal Register (61 FR
11291).
Pursuant to authority contained in sections 985.50, 985.51, and
985.52 of the order, at its November 14, 1996, meeting, the Committee
unanimously recommended that the allotment percentage for Native
spearmint oil for the 1996-97 marketing year be increased by 7 percent
from 54 percent to 61 percent. The 1996-97 marketing year salable
quantity of 1,074,902 pounds will therefore be increased to 1,213,692
pounds.
However, some Native spearmint oil producers did not produce all of
their individual salable quantities for the 1996-97 marketing year, or
fill their deficiencies from the prior year's production. The marketing
order authorizes such producers to have their deficiencies filled by
other producers who have production in excess of their salable
quantities. This is optional for producers, but must be done before
November 1 of each marketing year.
The original total industry allotment base for Native spearmint oil
for 1996-97 was established at 1,990,559 pounds and was revised to
1,989,659 pounds to reflect loss of base due to non-production of
producer's total annual allotments. This adjustment resulted in a 900
pound loss of total industry base, which is reflected in the
calculations for the revised salable quantity.
This interim final rule makes an additional amount of Native
spearmint oil available by increasing the salable quantity which
releases oil from the reserve pool. Only producers with Native
spearmint oil in the reserve pool will be able to use this increase in
the salable quantity. Prior to November 1, 1996, producers without
reserve pool oil or producers with an insufficient supply of reserve
oil could have deficiencies in meeting their salable quantities filled
by producers having excess Native spearmint oil. If all producers could
use their salable quantity, this 7 percent increase in the allotment
percentage would have made an additional 135,276 pounds of Native
spearmint oil available (1,989,659 x 7 percent). However, Native
spearmint oil producers having 25,546 pounds of Native spearmint oil
will not be able to use their reserve pool deficiencies this marketing
year. Deficiencies usually exist because of unplanned problems that may
reduce spearmint production. Thus, rather than 135,276 additional
pounds being made available, this action makes 113,730 additional
pounds of Native spearmint oil available to the market.
The following table summarizes the Committee recommendation:
Native Spearmint Oil Recommendation
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(a) Actual Carry In on June 1, 45,632 pounds.
1996.
(b) 1995-96 Salable Quantity..... 1,074,902 pounds.
(c) 1995-96 Available Supply..... 1,120,534 pounds (a + b).
(d) Total Sales as of November 1,036,058 pounds.
14, 1996.
(e) Calculated Available Supply 84,476 pounds ((c-d).
as of November 14, 1996.
(f) Reserve Deficiency Affecting 25,546 pounds.
Salable Quantity.
(g) Revised Total Allotment Base. 1,989,659 pounds.
(h) Recommended Allotment 61 percent.
Percentage as of November 14,
1996.
(i) Calculated Revised Salable 1,213,692 pounds (g x h).
Quantity.
(j) Actual Oil Available as 1,188,146 pounds (i-f).
Salable Quantity.
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In making this latest recommendation, the Committee considered all
available information on supply and demand. The 1996-97 marketing year
began on June 1, 1996. Handlers have indicated that with this action,
the available supply of both Scotch and Native spearmint oils appears
adequate to meet anticipated demand through May 31, 1997. Without the
increase, the Committee believes the industry would not be able to meet
market needs. As of November 14, 1996, 84,476 pounds of Native
spearmint oil was available for market. Demand for Native spearmint oil
from December 1 to May 31 over the past five years has ranged from a
high of 245,661 pounds in 1991-92 to a low of 92,658 pounds in 1992-93.
The five year average is 157,531 pounds. Therefore, based on past
history the industry would be unlikely to meet market demand without
this change. When the Committee made its initial recommendation for the
establishment of the Native spearmint oil salable quantity and
allotment percentage for the 1996-97 marketing year, it had anticipated
that the year would end with an ample available supply. This revision
adds 113,730 pounds of Native spearmint oil to the amount available for
market during the remainder of the 1996-97 marketing year.
The Department, based on its analysis of available information, has
determined that an allotment percentage of 61 percent should be
established for Native spearmint oil for the 1996-97 marketing year.
This percentage will provide an increased salable quantity of 1,213,692
and a new allotment percentage from 54 percent to 61 percent for Native
spearmint oil for the 1996-97 marketing year.
This rule relaxes the regulation of Native spearmint oil and will
allow growers to meet market needs and improved returns. In conjunction
with the issuance of this rule, the Department has reviewed the
Committee's revised marketing policy statement for the 1996-97
marketing year. The Committee's marketing policy statement has been
reviewed under the provisions as set forth in 7 CFR Sec. 985.50 and
with other USDA guidelines.
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), AMS has considered the economic impact of this action on
small entities. Accordingly, AMS has prepared this initial 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 8 spearmint oil handlers subject to regulation under the
marketing order and approximately 250 producers of spearmint oil in the
regulated production area. Of the 250 producers, approximately 135
producers hold Class 1 (Scotch) oil allotment base, and approximately
115 producers hold
[[Page 1248]]
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.
This interim final rule increases the quantity of Native spearmint
oil produced in the Far West that handlers may purchase from, or handle
for, producers during the 1996-97 marketing year. This rule was
recommended by the Committee, the agency responsible for local
administration of the marketing order for spearmint oil produced in the
Far West. Pursuant to authority contained in sections 985.50, 985.51,
and 985.52 of the order, at its November 14, 1996, meeting, the
Committee unanimously recommended that the allotment percentage for
Native spearmint oil for the 1996-97 marketing year be increased by 7
percent from 54 percent to 61 percent. The 1996-97 marketing year
salable quantity of 1,074,902 pounds will therefore be increased to
1,213,692 pounds. The Committee recommended this rule to avoid extreme
fluctuations in supplies and prices and thus help to maintain stability
in the Far West spearmint oil market.
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 for weed, insect, and disease
control. A normal spearmint 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 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 production, most spearmint producing farms
would fall into the category of large businesses.
Based on the Small Business Administration's definition of small
entities, the Committee estimates that none of the eight handlers
regulated by the order would be considered small entities as all are
national and multinational corporations involved in the buying and
selling of essential oils and the products of such essential oils. The
Committee also estimates that 20 of the 135 Scotch spearmint oil
producers and 10 of the 115 Native spearmint oil producers would be
classified as small entities. This is based on production information
gathered from assessments. Thus, a majority of handlers and producers
of Far West spearmint oil may not be classified as small entities.
Small spearmint oil producers represent a minority of farming
operations and are more vulnerable to market fluctuations. Such small
farmers generally need to market their entire annual crop and do not
have the resources 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 of stronger
incomes from alternate crops which could support the operation for a
period of time. Despite the advantage of larger producers, increasing
the Native salable quantity and allotment percentage will help both
large and small producers by improving returns. In addition, this
change may potentially benefit the small producer more than large
producers. This is because the change ensures that small producers are
more likely to maintain a profitable cash flow and meet annual
expenses.
Alternatives to this rule included not to increase the available
supply of Native spearmint oil, which could potentially hurt small
producers. The Committee reached its recommendation to increase the
salable quantity and allotment percentage for Native class oil after
careful consideration of all available information, and believes that
the level recommended will achieve the objectives sought. Without the
increase, the Committee believes the industry would not be able to meet
market needs. As of November 14, 1996, 84,476 pounds of Native
spearmint oil was available for market. Demand for Native spearmint oil
from December 1 to May 31 over the past five years has ranged from a
high of 245,661 pounds in 1991-92 to a low of 92,658 pounds in 1992-93.
The five year average is 157,531 pounds. Therefore, based on past
history the industry would be unlikely to meet market demand without
this change.
Annual salable quantities and allotment percentages have been
issued for both classes of spearmint oil since the order's inception.
Reporting and recordkeeping requirements have remained the same for
each year of regulation. Accordingly, this action will not impose any
additional reporting or recordkeeping requirements on either small or
large spearmint oil producers and handlers. All reports and forms
associated with this program are reviewed periodically in order to
avoid unnecessary and duplicitous 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.
Finally, 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. Interested persons are also
invited to submit information on the regulatory and informational
impacts of this action on small businesses.
After consideration of all relevant matter presented, including
that contained in the prior proposed and final rules in connection with
the establishment of the salable quantities and allotment percentages
for Scotch and Native spearmint oils for the 1996-97 marketing year,
the Committee's recommendation and other available information, it is
found that to revise section 985.215 (61 FR 11291) to change the
salable quantity and allotment percentage for Native spearmint oil, as
hereinafter set forth, will tend to effectuate the declared policy of
the Act.
Pursuant to 5 U.S.C. 553, it is also found and determined upon good
cause that it is impracticable, unnecessary, and contrary to the public
interest to give preliminary notice prior to putting this rule into
effect and that good cause exists for not postponing the effective date
of this rule until 30 days after publication in the Federal Register
because: (1) This rule increases the quantity of Native spearmint oil
that may be marketed during the marketing year which began on June 1,
1996; (2) The quantity of Native spearmint planted for the 1997-98
marketing year may be affected, thus handlers and producers should be
apprised as soon as possible of the salable quantity and allotment
percentage of Native spearmint oil contained in this interim final
rule; (3) the Committee unanimously recommended this change at a public
meeting and interested parties had an opportunity to provide input; and
(4) This rule provides a 30-day comment period and any comments
received will be considered prior to finalization of this rule.
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:
[[Page 1249]]
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. Section 985.215 is amended by revising paragraph (b) to read as
follows:
Note: This section will not appear in the annual Code of Federal
Regulations.
Sec. 985.215 Salable quantities and allotment percentages 1996-97
marketing year.
* * * * *
(b)Class 3 (Native) oil--a salable quantity of 1,213,692 pounds and
an allotment percentage of 61 percent.
Dated: January 3, 1997.
Robert C. Keeney,
Director, Fruit and Vegetable Division.
[FR Doc. 97-450 Filed 1-8-97; 8:45 am]
BILLING CODE 3410-02-P
