[Federal Register Volume 61, Number 232 (Monday, December 2, 1996)]
[Rules and Regulations]
[Pages 63697-63702]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-30551]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 61, No. 232 / Monday, December 2, 1996 /
Rules and Regulations
[[Page 63697]]
DEPARTMENT OF AGRICULTURE
Farm Service Agency
7 CFR Part 723
Commodity Credit Corporation
7 CFR Part 1464
RIN 0560-AE46
1996 Marketing Quotas and Price Support Levels for Fire-Cured
(Type 21), Fire-Cured (Types 22-23), Dark Air-Cured (Types 35-36),
Virginia Sun-Cured (Type 37), Cigar-Filler and Binder (Types 42-44 and
53-55), and Cigar-Filler (Type 46) Tobaccos
AGENCIES: Farm Service Agency and Commodity Credit Corporation, USDA.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The purpose of this final rule is to codify the national
marketing quotas and price support levels for the 1996 crops for
several kinds of tobacco announced by press release on March 5, 1996.
In accordance with the Agricultural Adjustment Act of 1938, as
amended (the 1938 Act), the Secretary determined the 1996 marketing
quotas to be as follows: fire-cured (type 21), 1.97 million pounds;
fire-cured (types 22-23), 40.6 million pounds; dark air-cured (types
35-36), 9.2 million pounds; Virginia sun-cured (type 37), 148,000
pounds; cigar-filler and binder (types 42-44 and 53-55), 8.9 million
pounds; and cigar-filler (type 46), zero pounds.
Quotas are necessary to adjust the production levels of certain
tobaccos to more fully reflect supply and demand conditions, as
provided by statute.
In addition, in accordance with the Agricultural Act of 1949 as
amended (the 1949 Act), the Secretary determined the 1996 levels of
support to be as follows (in cents per pound): fire-cured (type 21),
145.5; fire-cured (types 22-23), 155.7; dark air-cured (types 35-36),
133.9; Virginia sun-cured (type 37), 128.8; cigar-filler and binder
(types 42-44 and 53-55), 112.0; and cigar-filler (type 46), 88.1. Price
supports are generally necessary to maintain grower income. However,
with respect to cigar-filler (type 46) there will be no quotas or price
support for the 1996 and subsequent marketing years, unless conditions
change, as a result of the recent quota referendum on that type of
tobacco.
EFFECTIVE DATE: March 5, 1996.
FOR FURTHER INFORMATION CONTACT: Robert L. Tarczy, Farm Service Agency
(FSA), U.S. Department of Agriculture (USDA), room 5750, South
Building, STOP 0514, P.O. Box 2415, Washington, DC 20013-2415, 202-720-
5346.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This final rule has been determined to be significant for purposes
of Executive Order 12866 and, therefore, has been reviewed by OMB.
Federal Assistance Program
The title and number of the Federal Assistance Program, as found in
the Catalog of Federal Domestic Assistance, to which this rule applies,
are Commodity Loans and Purchases--10.051.
Executive Order 12778
This final rule has been reviewed in accordance with Executive
Order 12778, Civil Justice Reform. The provisions of this rule do not
preempt State laws, are not retroactive, and do not involve
administrative appeals.
Regulatory Flexibility Act
It has been determined that the Regulatory Flexibility Act is not
applicable because Farm Service Agency (FSA) is not required by 5
U.S.C. 553 or any other provision of law to publish a notice of
proposed rulemaking with respect to the subject of these
determinations.
Paperwork Reduction Act
The amendments to 7 CFR parts 723 and 1464 set forth in this final
rule do not contain information collections that require clearance
through the Office of Management and Budget under the provisions of 44
U.S.C. Chapter 35.
Background
This final rule is issued pursuant to the provisions of the 1938
Act and the 1949 Act.
On March 5, 1996, the Secretary determined and announced the
national marketing quotas and price support levels for the 1996 crops
of fire-cured (type 21), fire-cured (types 22-23), dark air-cured
(types 35-36), Virginia sun-cured (type 37), cigar-filler and binder
(types 42-44 and 53-55), and cigar-filler (type 46) tobaccos. A number
of related determinations were made at the same time which this final
rule affirms. On the same date, the Secretary also announced that
referenda would be conducted by mail with respect to cigar-filler and
binder (types 42-44; 53-55) and (at polling places for) cigar filler
(type 46) tobaccos.
During March 25-28, 1996, eligible producers of cigar-filler and
binder (types 42-44; 53-55) and cigar-binder (type 46) tobacco voted in
separate referenda to determine whether such producers disapprove
marketing quotas for the 1996, 1997, and 1998 marketing years (MYs) for
these tobaccos. Of the producers voting, 78.7 percent favored marketing
quotas for cigar-filler and binder tobacco while no one voted in the
cigar-filler (type 46) referendum. Accordingly, quotas and price
supports for cigar-filler and binder tobacco are in effect for the 1996
MY. As it appears that there is no interest in growing cigar-filler
(type 46) tobacco and that there are no current producers of this type
of tobacco, it has been determined that quotas and price support shall
not be in effect for the 1996 and subsequent MYs. For the same reasons,
it has been determined that there shall not be any further referenda
held for this type unless production resumes and a petition for a
reinstatement of quotas is submitted by one-fourth of the then-current
producers or by such other number of producers as appears to make the
holding of a referenda worthwhile and appropriate.
In accordance with section 312(a) of the 1938 Act, the Secretary of
Agriculture was required to proclaim not later than March 1 of any MY
with respect to any kind of tobacco, other than burley and flue-cured
tobacco, a national marketing quota for any such kind of tobacco for
each of the next 3 MYs if such MY is the last year of 3 consecutive
years for which marketing
[[Page 63698]]
quotas previously proclaimed will be in effect. With respect to cigar-
filler and binder (types 42-44; 53-55) and cigar-filler (type 46)
tobaccos, the 1995 MY is the last year of 3 such consecutive years.
Accordingly, subject to producer approval, marketing quotas for these
tobaccos have been proclaimed for each of the 3 MYs beginning October
1, 1996; October 1, 1997; and October 1, 1998. As indicated, however,
only types 42-44; 53-55 producers approved the quotas.
Because of producer approval of quotas, sections 312 and 313 of the
1938 Act required that the Secretary also announce the reserve supply
level and the total supply of fire-cured (type 21), fire-cured (types
22-23), dark air-cured (types 35-36), Virginia sun-cured (type 37),
cigar-filler and binder (types 42-44 and 53-55), and cigar-filler (type
46), tobaccos for the MY beginning October 1, 1996, and for these
tobaccos, the amounts of the national marketing quotas, national
acreage allotments, national acreage factors for apportioning the
national acreage allotments (less reserves) to old farms, and the
amounts of the national reserves and parts thereof available for (1)
new farms and (2) making corrections and adjusting inequities in old
farm allotments. However, these determinations were subject to those
referenda which were required to be held this year.
Also, under the 1949 Act, price support is required to be made
available for each crop of a kind of tobacco for which marketing quotas
are in effect or for which marketing quotas have not been disapproved
by producers. With respect to the 1996 crop of the six kinds of tobacco
that are the subject of this notice of final rulemaking, the respective
maximum level of support for six of those kinds is determined in
accordance with section 106 of the 1949 Act. Announcement of the price
support levels for these six kinds of tobacco are normally made before
the planting seasons. For the 1996 crops, the announcements were made
on March 5, 1996, at the same time as the quota announcements, and
subject to producer approval for those types which were subject to a
1996 referendum.
Quotas and Related Determinations
Statutory Provisions
Section 312(b) of the 1938 Act provides, in part, that the national
marketing quota for a kind of tobacco is the total quantity of that
kind of tobacco that may be marketed such that a supply of such tobacco
equal to its reserve supply level is made available during the MY.
Section 313(g) of the 1938 Act provides that the Secretary may
convert the national marketing quota into a national acreage allotment
for apportionment to individual farms.
Since producers of these kinds of tobacco generally produce
considerably less than their respective national acreage allotments
allow, a larger quota is necessary to make available production equal
to the reserve supply level. Further, the amount of the national
marketing quota so announced may, not later than the following March 1,
be increased by not more than 20 percent if the Secretary determines
that such increase is necessary in order to meet market demands or to
avoid undue restriction of marketings in adjusting the total supply to
the reserve supply level.
Section 301(b)(14)(B) of the 1938 Act defines ``reserve supply
level'' as the normal supply, plus 5 percent thereof, to ensure a
supply adequate to meet domestic consumption and export needs in years
of drought, flood, or other adverse conditions, as well as in years of
plenty. ``Normal supply'' is defined in section 301(b)(10)(B) of the
1938 Act as a normal year's domestic consumption and exports, plus 175
percent of a normal year's domestic use and 65 percent of a normal
year's exports as an allowance for a normal year's carryover.
Normal year's domestic consumption is defined in section
301(b)(11)(B) of the 1938 Act as the average quantity produced and
consumed in the United States during the 10 MYs immediately preceding
the MY in which such consumption is determined, adjusted for current
trends in such consumption. Normal year's exports is defined in section
301(b)(12) of the 1938 Act as the average quantity produced in and
exported from the United States during the 10 MYs immediately preceding
the MY in which such exports are determined, adjusted for current
trends in such exports.
In accordance with section 313(g) 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 1 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 the
national reserve, noted herein, for the 1996 crop of each of these
kinds of tobacco is adequate for these purposes.
The Proposed Rule
On February 12, 1996, a proposed rule was published (61 FR 5316) in
which interested persons were requested to comment with respect to
setting quotas for the tobacco kinds addressed in the notice.
Discussion of Comments
Twenty-six written responses were received during the comment
period which ended February 16, 1996. A summary of these comments by
kind of tobacco follows:
(1) Fire-cured (type 21) tobacco. Five comments were received. They
all recommended no change from the 1995 quota.
(2) Fire-cured (types 22-23) tobacco. Eight comments were received.
Five recommended no change from the 1995 marketing quota, while the
three others recommended a small increase in quota.
(3) Dark air-cured (types 35-36) tobacco. Seven comments were
received. Five recommended no change and the others recommended a
slight decrease in the quota.
(4) Virginia sun-cured (type 37) tobacco. Five comments were
received. All recommended a 10-percent increase in quota.
(5) Cigar-filler and binder (types 42-44 and 53-55) tobacco. One
comment was received, recommending no change in quota.
(6) Cigar filler (type 46) tobacco. No comments were received.
Quota and Related Determinations
Based on a review of these comments and the latest available
statistics of the Federal Government, which appear to be the most
reliable data available, the following determinations were made for the
six subject tobacco kinds:
(1) Fire-Cured (type 21) Tobacco
The average annual quantity of fire-cured (type 21) tobacco
produced in the United States that is estimated to have been consumed
in the United States during the 10 MYs preceding the 1995 MY was
approximately 1.1 million pounds. The average annual quantity produced
in the United States and exported from the United States during the 10
MYs preceding the 1995 MY was 2.5 million pounds (farm sales weight
basis). Both domestic use and exports have trended sharply downward.
Because of these considerations, a normal year's domestic consumption
has been determined to be 0.7 million pounds, and a normal year's
exports have been determined to be 1.59 million pounds. Application of
the formula prescribed by section 301(b)(14)(B) of the 1938 Act results
in a reserve supply level of 4.78 million pounds.
Manufacturers and dealers reported stocks held on October 1, 1995,
of 3.5 million pounds. The 1995 crop is
[[Page 63699]]
estimated to be 1.5 million pounds. Therefore, total supply for the
1995 MY is 5.0 million pounds. During the 1995 MY, it is estimated that
disappearance will total approximately 1.8 million pounds. Deducting
this disappearance from total supply results in a 1996 MY beginning
stock estimate of 3.2 million pounds.
The difference between the reserve supply level and the estimated
carryover on October 1, 1996, is 1.58 million pounds. This represents
the quantity that may be marketed that will make available during the
1996 MY a supply equal to the reserve supply level. About 80 percent of
the announced national marketing quota is expected to be produced.
Accordingly, it has been determined that a 1996 national marketing
quota of 1.97 million pounds is necessary to make available production
of 1.58 million pounds. Thus, the national marketing quota for the 1996
MY is 1.97 million pounds.
In accordance with section 313(g) of the 1938 Act, dividing the
1996 national marketing quota of 1.97 million pounds by the 1991-95, 5-
year national average yield of 1,496 pounds per acre results in a 1996
national acreage allotment of 1,316.84 acres.
Pursuant to the provisions of section 313(g) of the 1938 Act, a
national acreage factor of 1.0 is determined by dividing the national
acreage allotment for the 1996 MY, less a national reserve of 9.15
acres, by the total of the 1996 preliminary farm acreage allotments
(previous year's allotments). The preliminary farm acreage allotments
reflect the factors specified in section 313(g) of the 1938 Act for
apportioning the national acreage allotment, less the national reserve,
to old farms. (Those with access to an ``old'' allotment.)
(2) Fire-Cured (types 22-23) Tobacco
The average annual quantity of fire-cured (types 22-23) tobacco
produced in the United States that is estimated to have been consumed
in the United States during the 10 years preceding the 1995 MY was
approximately 18.3 million pounds. The average annual quantity produced
in the United States and exported during the 10 MYs preceding the 1995
MY was 16.4 million pounds (farm sales weight basis). Both domestic use
and exports have trended upward recently. Because of these
considerations, a normal year's domestic consumption has been
determined to be 28.0 million pounds, and a normal year's exports have
been determined to be 19.7 million pounds. Application of the formula
prescribed by section 301(b)(14)(B) of the 1938 Act results in a
reserve supply level of 115.0 million pounds.
Manufacturers and dealers reported stocks held on October 1, 1995,
of 80.5 million pounds. The 1995 crop is estimated to be 38.3 million
pounds. Therefore, total supply for the 1995 MY is 118.8 million
pounds. During the 1995 MY, it is estimated that disappearance will
total approximately 36.0 million pounds. Deducting this disappearance
from total supply results in a 1996 MY beginning stock estimate of 82.8
million pounds.
The difference between the reserve supply level and the estimated
carryover on October 1, 1996, is 32.2 million pounds. This represents
the quantity that may be marketed that will make available during the
1996 MY a supply equal to the reserve supply level. About 95 percent of
the announced national marketing quota is expected to be produced.
Accordingly, it has been determined that a 1996 national marketing
quota of 33.8 million pounds is necessary to make available production
of 32.2 million pounds.
In accordance with section 312(b) of the 1938 Act, it has been
further determined that the 1996 national marketing quota must be
increased by 20 percent in order to avoid undue restriction of
marketings. Thus, the national marketing quota for the 1996 MY is 40.6
million pounds.
In accordance with section 313(g) of the 1938 Act, dividing the
1996 national marketing quota of 40.6 million pounds by the 1991-95, 5-
year average yield of 2,462 pounds per acre results in a 1996 national
acreage allotment of 16,490.66 acres.
Pursuant to the provisions of section 313(g) of the 1938 Act, a
national acreage factor of 1.0 is determined by dividing the national
acreage allotment for the 1996 MY, less a national reserve of 1.37
acres, by the total of the 1996 preliminary farm acreage allotments
(previous year's allotments). The preliminary farm acreage allotments
reflect the factors specified in section 313(g) of the 1938 Act for
apportioning the national acreage allotment, less the national reserve,
to old farms.
(3) Dark Air-Cured (types 35-36) Tobacco
The average annual quantity of dark air-cured (types 35-36) tobacco
produced in the United States that is estimated to have been consumed
in the United States during the 10 MYs preceding the 1995 MY was
approximately 9.8 million pounds. The average annual quantity produced
in the United States and exported from the United States during the 10
MYs preceding the 1995 MY was 1.8 million pounds (farm sales weight
basis). Domestic use has been erratic while exports have trended
downward. Because of these considerations, a normal year's domestic
consumption has been determined to be 10.5 million pounds, and a normal
year's exports have been determined to be 1.6 million pounds.
Application of the formula prescribed by section 301(b)(14)(B) of the
1938 Act results in a reserve supply level of 33.2 million pounds.
Manufacturers and dealers reported stocks held on October 1, 1995,
of 27.3 million pounds. The 1995 crop is estimated to be 8.9 million
pounds. Therefore, total supply for the 1995 MY is 36.2 million pounds.
During the 1995 MY, it is estimated that disappearance will total
approximately 10.0 million pounds. Deducting this disappearance from
total supply results in a 1996 MY beginning stock estimate of 26.2
million pounds.
The difference between the reserve supply level and the estimated
carryover on October 1, 1996, is 7.0 million pounds. This represents
the quantity that may be marketed that will make available during the
1996 MY a supply equal to the reserve supply level. About 90 percent of
the announced national marketing quota is expected to be produced.
Accordingly, it has been determined that a national marketing quota of
7.7 million pounds is necessary to make available production of 7.0
million pounds. In accordance with section 312(b) of the 1938 Act, it
has been further determined that the 1996 national marketing quota
should be increased by 20 percent in order to avoid undue restriction
of marketings. This results in a national marketing quota for the 1996
MY of 9.2 million pounds.
In accordance with section 313(g) of the 1938 Act, dividing the
1996 national marketing quota of 9.2 million pounds by the 1991-95, 5-
year average yield of 2,274 pounds per acre results in a 1996 national
acreage allotment of 4,045.73 acres.
Pursuant to the provisions of section 313(g) of the 1938 Act, a
national acreage factor of 0.95 is determined by dividing the national
acreage allotment for the 1996 MY, less a national reserve of 0.26
acre, by the total of the 1996 preliminary farm acreage allotments
(previous year's allotments). The preliminary farm acreage allotments
reflect the factors specified in section 313(g) of the 1938 Act for
apportioning the national acreage allotment, less the national reserve,
to old farms.
(4) Virginia Sun-Cured (type 37) Tobacco
The average annual quantity of Virginia sun-cured (type 37) tobacco
[[Page 63700]]
produced in the United States that is estimated to have been consumed
in the United States during the 10 MYs preceding the 1995 MY was
approximately 150,000 pounds. The average annual quantity produced in
the United States and exported from the United States during the 10 MYs
preceding the 1995 MY was approximately 110,000 pounds (farm sales
weight basis). Both domestic use and exports have shown a sharp
downward trend. Because of the considerations, a normal year's domestic
consumption has been determined to be 55,000 pounds, and a normal
year's exports have been determined to be 13,000 pounds. Application of
the formula prescribed by section 301(b)(14)(B) of the 1938 Act results
in a reserve supply level of 193,000 pounds.
Manufacturers and dealers reported stocks held on October 1, 1995,
of 100,000 pounds. The 1995 crop is estimated to be 80,000 pounds.
Therefore, total supply for the 1995 MY is 180,000 pounds. During the
1995 MY, it is estimated that disappearance will total approximately
110,000 pounds. Deducting this disappearance from total supply results
in a 1996 MY beginning stock estimate of 70,000 pounds.
The difference between the reserve supply level and the estimated
carryover on October 1, 1995, is 123,000 pounds. This represents the
quantity that may be marketed that will make available during the 1996
MY a supply equal to the reserve supply level. Over 80 percent of the
announced national marketing quota is expected to be produced.
Accordingly, it has been determined that a 1996 national marketing
quota of 148,000 pounds is necessary to make available production of
123,000 pounds. Thus, the national marketing quota for the 1996 MY is
148,000 pounds.
In accordance with section 313(g) of the 1938 Act, dividing the
1996 national marketing quota of 148,000 pounds by the 1991-95, 5-year
average yield of 1,342 pounds per acre results in a 1996 national
acreage allotment of 110.28 acres.
Pursuant to the provisions of section 313(g) of the 1938 Act, a
national acreage factor of 1.10 is determined by dividing the national
acreage allotment for the 1996 MY, less a national reserve of 0.69
acre, by the total of the 1996 preliminary farm acreage allotments
(previous year's allotments). The preliminary farm acreage allotments
reflect the factors specified in section 313(g) of the 1938 Act for
apportioning the national acreage allotment, less the national reserve,
to old farms.
(5) Cigar-Filler and Binder (types 42-44 and 53-55) Tobacco
The average annual quantity of cigar-filler and binder (types 42-44
and 53-55) tobacco produced in the United States that is estimated to
have been consumed in the United States during the 10 MYs preceding the
1995 MY was approximately 15.2 million pounds. The average annual
quantity produced in the United States and exported from the United
States during the 10 MYs preceding the 1995 MY was less than 100,000
pounds (farm sales weight). Domestic use has trended downward and
exports are very small. Thus, a normal year's domestic consumption has
been determined to be 9.2 million pounds, and a normal year's exports
has been determined to be 100,000 pounds. Application of the formula
prescribed by section 301(b)(14)(B) of the 1938 Act results in a
reserve supply level of 26.8 million pounds.
Manufacturers and dealers reported stocks held on October 1, 1995,
of 24.6 million pounds. The 1995 crop is estimated to be 6.2 million
pounds. Therefore, total supply for the 1995 MY is 30.8 million pounds.
During the 1995 MY, it is estimated that disappearance will total about
9.0 million pounds. Deducting this disappearance from total supply
results in a 1996 MY beginning stock estimate of 21.8 million pounds.
The difference between the reserve supply level and the estimated
carryover on October 1, 1996, is 5.0 million pounds. This represents
the quantity that may be marketed that will make available during the
1996 MY a supply equal to the reserve supply level. Slightly less than
70 percent of the announced national marketing quota is expected to be
produced.
Accordingly, it has been determined that a 1996 national marketing
quota of 7.4 million pounds is necessary to make available production
of 5.0 million pounds. In accordance with section 312(b) of the 1938
Act, it has been further determined that the 1996 national marketing
quota must be increased by 20 percent in order to avoid undue
restriction of marketings. This results in a 1996 national marketing
quota of 8.9 million pounds.
In accordance with section 313(g) of the 1938 Act, dividing the
1996 national marketing quota of 8.9 million pounds by the 1991-95, 5-
year average yield of 1,894 pounds per acre results in a 1996 national
acreage allotment of 4,699.05 acres.
Pursuant to the provisions of section 313(g), of the 1938 Act, a
national factor of 1.0 is determined by dividing the national acreage
allotment for the 1996 MY, less a national reserve of 9.99 acres, by
the total of the 1996 preliminary farm acreage allotments (previous
year's allotments). The preliminary farm acreage allotments reflect the
factors specified in section 313(g) of the 1938 Act for apportioning
the national acreage allotment, less the national reserve, to old
farms.
(6) Cigar-Filler (type 46) Tobacco
There is no demand for cigar-filler (type 46) tobacco. Accordingly,
the reserve supply level is zero. The estimated carryover at the start
of MY 1996 is less than 0.1 million pounds. However, because of the
referendum result, there will be no marketing quota, or price support,
for this type for 1996 and subsequent MYs, unless a petition for
reinstatement of quota is filed.
Because the estimated carryover exceeds the reserve supply level,
the quantity of tobacco that may be marketed during MY 1996 and the
1996 acreage allotment are both zero.
(7) Referendum Results for Cigar-Filler and Binder (types 42-44;
53-55) and Cigar-Filler (type 46 ) Tobaccos
Because of the results of producer referenda, marketing quotas
shall be in effect for the 1996 MY for cigar-filler and binder (types
42-44; 53-55) tobacco, but not for cigar-filler (type 46) tobacco. In a
referendum held March 25-28, 1996, 78.7 percent of producers of cigar-
filler and binder (types 42-44; 53-55) tobacco, voted in favor of
marketing quotas. However, no votes were cast in the March 26, 1996,
referendum held for producers of cigar binder (type 46) tobacco. As
indicated, it was determined for that reason that no quota would be set
until a petition for quotas is filed. The regulations adopted in this
notice have been drafted accordingly.
----------------------------------------------------------------------------------------------------------------
Percent yes
Kind of tobacco Total votes Yes votes No votes votes
----------------------------------------------------------------------------------------------------------------
Cigar-filler and binder (types 42-44; 53-55)................ 1084 853 231 78.7
Cigar-filler (type 46)...................................... 0 0 0 0
----------------------------------------------------------------------------------------------------------------
[[Page 63701]]
Price Support
Statutory Provisions
Section 106(f)(6)(A) of the 1949 Act provides that the level of
support for the 1996 crop of a kind of tobacco (other than flue-cured
and burley) shall be the level in cents per pound at which the 1995
crop of such kind of tobacco was supported, plus or minus, as
appropriate, the amount by which (i) the basic support level for the
1996 crop, as determined under section 106(b) of the 1949 Act, is
greater or less than (ii) the support level for the 1995 crop, as
determined under section 106(b). To the extent that the price support
level would be increased as a result of that comparison, section 106(f)
provides that the increase may be modified using the provisions of
106(d). Under 106(d), the Secretary may reduce the level of support for
grades the Secretary determines will likely be in excess supply so long
as the weighted level of support for all grades maintains at least 65
percent of the increase in the price support (from the previous year).
The Secretary must consult with the appropriate tobacco associations
and take into consideration the supply and anticipated demand for the
tobacco, including the effect of the action on other kinds of quota
tobacco. In determining whether the supply of any grade of any kind of
tobacco of a crop will be excessive, the Secretary is required to
consider the domestic supply, including domestic inventories, the
amount of such tobacco pledged as security for price support loans, and
anticipated domestic and export demand, based on the maturity,
uniformity, and stalk position of such tobacco.
Section 106(b) of the 1949 Act provides that the ``basic support
level'' for any year is determined by multiplying the support level for
the 1959 crop of such kind of tobacco by the ratio of the average of
the index of prices paid by farmers, including wage rates, interest,
and taxes (referred to as the ``parity index'') for the 3 previous
calendar years to the average index of such prices paid by farmers,
including wage rates, interest, and taxes for the 1959 calendar year.
In addition, section 106(f)(6)(B) of the 1949 Act provides that to
the extent requested by the board of directors of an association,
through which price support is made available to producers (producer
association), the Secretary may reduce the support level determined
under section 106(f)(6)(A) of the 1949 Act for the respective kind of
tobacco to more accurately reflect the market value and improve the
marketability of such tobacco. Accordingly, the price support level for
a kind of tobacco set forth in this rule could be reduced if such a
request is made.
Price Support Determinations
The following levels of price support for the 1995 crops of various
kinds of tobacco, which were determined in accordance with section
106(f)(6)(A) of the 1949 Act, are as follows:
------------------------------------------------------------------------
Support
level
Kind and type (cents
per
pound)
------------------------------------------------------------------------
Virginia fire-cured (type 21)................................. 143.0
KY-TN fire-cured (types 22-23)................................ 151.8
Dark air-cured (types 35-36).................................. 130.4
Virginia sun-cured (type 37).................................. 126.5
Cigar-filler and binder (types 42-44 and 53-55)............... 110.1
Cigar-filler (type 46)........................................ 86.1
------------------------------------------------------------------------
For the 1996 crop year:
(1) Average parity indexes for calendar year periods 1992-1994 and
1993-1995 are as follows:
----------------------------------------------------------------------------------------------------------------
Year Index Year Index
----------------------------------------------------------------------------------------------------------------
1992.......................................... 1,329 1993.................................. 1,355
1993.......................................... 1,355 1994.................................. 1,394
1994.......................................... 1,394 1995.................................. 1,420
Average....................................... 1,359 Average............................... 1,390
----------------------------------------------------------------------------------------------------------------
(2) Average parity index, calendar year 1959=298.
(3) 1995 ratio of 1,359 to 298=4.56; 1995 ratio of 1,359 to
298=4.66.
(4) Ratios times 1959 support levels and 1996 increase in basic
support levels are as follows:
----------------------------------------------------------------------------------------------------------------
1959 Basic support level \1\ Increase from 1995 to
support -------------------------- 1996
level -------------------------
Kind and type ------------- 1995 ( 1996 ( 100% (
( cents/ cents/lb.) cents/lb.) cents/lb.) 65% ( cents/
lb.) lb.)
----------------------------------------------------------------------------------------------------------------
VA 21.......................................... 38.8 176.9 180.8 3.9 2.5
KY-TN 22-23.................................... 38.8 176.9 180.8 3.9 2.5
KY-TN 35-36.................................... 34.5 157.3 160.8 3.5 2.3
VA 37.......................................... 34.5 157.3 160.8 3.5 2.3
Cigar-filler and binder 42-44, 54-55........... 28.6 130.4 133.3 2.9 1.9
Cigar-filler 46................................ 29.7 135.4 138.4 3.0 2.0
----------------------------------------------------------------------------------------------------------------
\1\ 1995 ratio is 4.56, 1996 ratio is 4.66.
With respect to 106(d) adjustments, for MY 1996, the flue-cured
support level was increased by 65 percent of the formula increase to
within about 12 percent of 1995's average market price. For the kinds
of tobacco subject of this rule, MY 1995 market prices were further
above the support level, and overall loan receipts remained low. Only
Virginia Fire-Cured (type 21) and Virginia sun-cured (type 37) have
significant loan stocks relative to use for MY 1995.
In addition, the loan associations for cigar filler and binder
(types 42-44; 53-55) have accepted lower price support levels so their
tobacco may remain competitive with imports and tobaccos not under
support. Therefore, for fire-cured tobacco (type 21), Virginia sun-
cured tobacco (type 37), and cigar-filler and binder tobacco (types 42-
44 and 53-55), the MY 1996 support levels consist of the 1995 support
levels which were increased by 65 percent of the difference between the
1996 ``basic support level'' and the 1995 ``basic support level.'' The
supply-use ratios for Kentucky-Tennessee fire-cured (types 22-23) and
dark air-cured (types 35-36)
[[Page 63702]]
suggest adequate supplies. Accordingly, for these tobaccos, the MY 1996
support level consists of the MY 1995 level of support increased by the
difference between the MY 1996 ``basic support level'' and the MY 1995
``basic support level.'' Also, chewing tobacco, smoking tobacco, and
snuff manufacturing formulas limit the substitutability of one of these
kinds of tobacco for another. Cigarettes, the principal outlet for
flue-cured and burley tobaccos, do not require any of these six kinds
of tobacco in their blends.
Accordingly, the following price support determinations were
announced on March 5, 1996:
------------------------------------------------------------------------
Support
level
Kind and type (cents
per
pound)
------------------------------------------------------------------------
Virginia fire-cured (type 21)................................. 145.5
Kentucky-Tennessee fire-cured (types 22-23)................... 155.7
Dark air-cured (types 35-36).................................. 133.9
Virginia sun-cured (type 37).................................. 128.8
Cigar-filler and binder (types 42-44 and 53-55)............... 112.0
Cigar-filler (type 46)........................................ 88.1
------------------------------------------------------------------------
However, as indicated, price support will not be made available for
type 46 until such time as quotas may be established for this type.
List of Subjects
7 CFR Part 723
Acreage allotments, Marketing quotas, Penalties, Reporting and
recordkeeping requirements, Tobacco.
7 CFR Part 1464
Price supports, Tobacco.
Accordingly, 7 CFR parts 723 and 1464 are amended to read as
follows:
PART 723--TOBACCO
1. The authority citation for 7 CFR part 723 continues to read as
follows:
Authority: 7 U.S.C. 1301, 1311-1314, 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.
2. Section 723.113 is amended by adding paragraph (d) to read as
follows:
Sec. 723.113 Fire-cured (type 21) tobacco.
* * * * *
(d) The 1996-crop national marketing quota is 1.97 million pounds.
3. Section 723.114 is amended by adding paragraph (d) to read as
follows:
Sec. 723.114 Fire-cured (types 22-23) tobacco.
* * * * *
(d) The 1996-crop national marketing quota is 40.6 million pounds.
4. Section 723.115 is amended by adding paragraph (d) to read as
follows:
Sec. 723.115 Dark air-cured (types 35-36) tobacco.
* * * * *
(d) The 1996-crop national marketing quota is 9.2 million pounds.
5. Section 723.116 is amended by adding paragraph (d) to read as
follows:
Sec. 723.116 Sun-cured (type 37) tobacco.
* * * * *
(d) The 1996-crop national marketing quota is 148,000 pounds.
6. Section 723.117 is amended by adding paragraph (d) to read as
follows:
Sec. 723.117 Cigar-filler and cigar binder (types 42-44: 53-55)
tobacco.
* * * * *
(d) The 1996-crop national marketing quota is 8.9 million pounds.
7. Section 723.118 is amended by adding paragraph (d) to read as
follows:
Sec. 723.118 Cigar filler (type 46) tobacco.
* * * * *
(d) There shall be no national or individual marketing quotas for
the 1996 and subsequent marketing years for this type (46).
PART 1464--TOBACCO
8. 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.
9. Section 1464.13 is amended by adding paragraph (d) to read as
follows:
Sec. 1464.13 Fire-cured (type 21) tobacco.
* * * * *
(d) The 1996-crop national price support level is 145.5 cents per
pound.
10. Section 1464.14 is amended by adding paragraph (d) to read as
follows:
Sec. 1464.14 Fire-cured (types 22-23) tobacco.
* * * * *
(d) The 1996-crop national price support level is 155.7 cents per
pound.
11. Section 1464.15 is amended by adding paragraph (d) to read as
follows:
Sec. 1464.15 Dark air-cured (types 35-36) tobacco.
* * * * *
(d) The 1996-crop national price support level is 133.9 cents per
pound.
12. Section 1464.16 is amended by adding paragraph (d) to read as
follows:
Sec. 1464.16 Virginia sun-cured (type 37) tobacco.
* * * * *
(d) The 1996-crop national price support is 128.8 cents per pound.
13. Section 1464.17 is amended by adding paragraph (d) to read as
follows:
Sec. 1464.17 Cigar-filler and binder (types 42-44 and 53-55) tobacco.
* * * * *
(d) The 1996-crop national price support level is 112.0 cents per
pound.
14. Section 1464.18 is amended by adding paragraph (d) to read as
follows:
Sec. 1464.18 Cigar-filler (type 46) tobacco.
* * * * *
(d) Price support shall not be made available for the 1996 and
subsequent crops of this type (46).
* * * * *
Signed at Washington, DC, on November 12, 1996.
Bruce R. Weber,
Acting Administrator, Farm Service Agency and Executive Vice President,
Commodity Credit Corporation.
[FR Doc. 96-30551 Filed 11-29-96; 8:45 am]
BILLING CODE 3410-05-P
