[Federal Register Volume 61, Number 34 (Tuesday, February 20, 1996)]
[Proposed Rules]
[Pages 6329-6332]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3653]
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DEPARTMENT OF AGRICULTURE
7 CFR Part 985
[Docket No. A0-79-2; FV95-985-4]
Spearmint Oil Produced in the Far West; Emergency Final Decision
and Referendum Order on Proposed Amendment of Marketing Order
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule and referendum order.
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SUMMARY: This emergency final decision would amend the Federal
marketing order for spearmint oil produced in the Far West (Order). The
amendment was proposed by the Department of Agriculture (Department).
The proposed amendment would remove from the regulated production area,
the portions of California and Montana currently regulated under the
Order.
DATES: A referendum shall be conducted from March 2 through March 15,
1996, for the purpose of determining whether the proposed amendment is
favored by producers who were engaged in the production of spearmint
oil in the production area during the representative period. The
[[Page 6330]]
representative period for the purpose of the referendum herein ordered
is June 1, 1994, to May 31, 1995.
FOR FURTHER INFORMATION CONTACT: (1) Caroline C. Thorpe, Marketing
Order Administration Branch, Fruit and Vegetable Division, AMS, USDA,
AMS, room 2526-S, P.O. Box 96456, Washington, DC 20090-6456; telephone,
(202) 720-5127, or FAX: (202) 720-5698.
(2) Robert Curry, Northwest Marketing Field Office, Marketing Order
Administration Branch, Fruit and Vegetable Division, AMS, USDA, 1220
S.W. Third Avenue, room 369, Portland, Oregon, 97204; telephone: (503)
326-2725, or FAX: (503) 326-7440.
SUPPLEMENTARY INFORMATION: Prior documents in this proceeding: Notice
of Hearing issued October 4, 1995, and published in the Federal
Register on October 11, 1995 (60 FR 52869); Correction to Notice of
Hearing issued November 8, 1995, and published in the Federal Register
on November 13, 1995 (60 FR 57144); and Notice of Order Filed on
Proposed Rulemaking concerning the filing of post-hearing briefs issued
November 30, 1995, and published in the Federal Register on December 5,
1995 (60 FR 62229).
This administrative action is governed by the provisions of
sections 556 and 557 of Title 5 of the United States Code and is
therefore excluded from the requirements of Executive Order 12866.
Preliminary Statement
A public hearing was held on November 14, 1995, to consider a
proposed amendment of Marketing Order No. 985 (7 CFR Part 985),
regulating the handling of spearmint oil produced in the Far West,
hereinafter referred to collectively as the ``Order''. The hearing was
held pursuant to the provisions of the Agricultural Marketing Agreement
Act of 1937, as amended (7 U.S.C. 601 et seq.), hereinafter referred to
as the Act, and the applicable rules of practice and procedure
governing proceedings to formulate marketing agreements and marketing
orders (7 CFR Part 900).
The Notice of Hearing contained one proposal by the Department,
which redefined the production area under the Order to exclude those
portions of the area with no historic record of commercial production
of spearmint oil.
After the conclusion of the hearing, the deadline for filing post-
hearing briefs was set at December 22, 1995. Briefs and comments which
were filed, are ruled upon elsewhere in this decision.
The material issues of record are as follows: (1) Should areas with
no historic record of commercial production of spearmint oil continue
to be regulated under the Order? (2) Does the ``production area'' as
defined in the Order constitute the smallest practicable area which
should be regulated consistent with carrying out the policy of the Act?
(3) Do existing circumstances warrant expediting the amendment process
by omitting the recommended decision?
Small Business Considerations
In accordance with the provisions of the Regulatory Flexibility Act
(RFA) (5 U.S.C. 601 et seq.), the Administrator of the AMS has
determined that this action would not have a significant economic
impact on a substantial number of small entities. Small agricultural
service firms, which include handlers regulated under the Order, have
been defined by the Small Business Administration (SBA) (13 CFR
121.601) as those having annual receipts of less than $5,000,000. Small
agricultural producers are defined as those with annual receipts of
less than $500,000.
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 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 the RFA and the Act have small entity orientation
and compatibility. Interested persons were invited to present evidence
at the hearing on the probable impact that the proposed amendment to
the Order would have on small businesses.
During the 1994-95 marketing year from June 1, 1994, through May
31, 1995, approximately 8 handlers were regulated under the Order. In
addition, there are about 260 growers of spearmint in the regulated
area. The Act requires the application of uniform rules on regulated
handlers. A minority of handlers and producers covered under the Order
are small businesses. The Order itself is tailored to the size and
nature of these small businesses. Marketing orders, and amendments
thereto, are unique in that they are normally brought about through
group action of entities on their own behalf. Thus, both the RFA and
the Act are compatible with respect to small entities.
The proposed amendment to the Order would delete portions of the
production area currently covered by the Order which have no historic
record of commercial production of spearmint oil. This change would
provide that the Order cover the smallest regional production area
practicable, consistent with program objectives. The proposed amendment
should not have a significant economic impact on handlers or producers.
The amendment proposed herein has been reviewed under Executive
Order 12778, Civil Justice Reform. It is not intended to have
retroactive effect. If adopted, the proposed amendment would not
preempt any State or local laws, regulations, or policies, unless they
present an irreconcilable conflict with the amendment.
The Act provides that administrative proceedings must be exhausted
before parties may file suit in court. Under section 608c(15)(A) of
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 requesting 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 the date of the entry of the ruling.
Findings and Conclusions
The following findings and conclusions are based on evidence
presented at the hearing and the record thereof:
(1) Should areas with no historic record of commercial production
of spearmint oil continue to be regulated under the Order?
The Order regulates Far West spearmint oil through the
establishment of annual allotment percentages and salable quantities.
The objective of such regulation is to balance supplies with market
demand, thereby reducing price fluctuations and improving returns to
producers. The Order, and regulations issued thereunder, apply only to
spearmint oil produced in the defined ``production area''. The Order
currently defines the production area as all the area within the States
of Washington, Idaho, Oregon; that portion of California and Nevada
north of the 37th parallel; and that portion of Montana and Utah west
of the 111th meridian. This definition was established when the Order
came into effect on April 14, 1980 (45 F.R. 25039), and was based on
the
[[Page 6331]]
record of a hearing held in October 1979.
At the time the Order became effective, the production area as
defined was found to be the smallest regional production area
practicable to effectuate the declared policy of the Act. This included
all the areas in the Far West and northwestern United States having the
potential of commercially producing quality spearmint oil.
Witnesses who testified at this amendment hearing included
Department employees, a representative of the Spearmint Oil
Administrative Committee (committee), a grower from Nevada, an official
with the Montana Department of Agriculture, and representatives of the
Montana Mint Growers' Association. All witnesses supported the proposal
to no longer regulate portions of California and Montana under the
Order.
The record supports excluding these two areas from coverage
primarily because there has been no historic record of commercial
production of spearmint oil in those areas. Record evidence shows that
in 1994, there were 1,500 acres of spearmint harvested in Idaho, 10,500
acres in Washington, 1,700 acres in Oregon, and 160 acres in Utah and
Nevada combined. No harvested acreage was recorded for those parts of
California and Montana included under the Order. Likewise, evidence
shows that spearmint oil was produced in all States regulated under the
Order with the exception of California and Montana. There has been no
recorded commercial production of spearmint oil in California or
Montana since the inception of the Order. Testimony at the hearing also
indicated that there is no evidence of current commercial production in
those states.
2. Does the ``production area'' as defined in the Order constitute
the smallest practicable area which should be regulated consistent with
carrying out the policy of the Act?
The evidence of record is that the Order has been successful in
establishing orderly marketing conditions for Far West spearmint oil.
Specifically, the establishment of the Order has reduced price
volatility and ensured market stability. In the 13 years preceding the
Order's promulgation, prices for spearmint oil fluctuated between $4.16
and $11.62 per pound. From 1982 to 1992, while the Order was in effect,
prices ranged between $11.29 and $14.03 per pound.
Inclusion in the production area requires a demonstration that the
areas covered have similar crop and marketing conditions. When the
Order was promulgated, the finding for including California and Montana
in the production area was based on evidence that production and
marketing conditions in those areas would be similar to those of other
spearmint-producing States. This has proven to be incorrect. The record
indicates that land in California and Montana suitable for the
production of spearmint oil is limited, and weather conditions are a
deterrent to consistent spearmint production. Amending the Order by
removing California and Montana, would result in the Order covering the
smallest regional production area practicable to effectuate the
declared policy of the Act.
For the above reasons, it is concluded that the production area
should be redefined to exclude California and Montana. Accordingly, the
production area as defined in this amendment is found to be the
smallest practicable area which should be regulated consistent with
carrying out the policy of the Act.
Modification of Proposed Amendment
As a modification to the proposal, testimony was submitted for the
record in support of the proposed amendment that further proposed the
production area not be reduced again by amendment for at least 5 years.
The intent of the modification was to provide sufficient time to gather
and analyze data on the impact of removing California and Montana from
Order coverage. As submitted for the record, the 5-year period would
provide stability for the industry before any other amendments to
reduce the production area are considered.
However, a prohibition on amending the Order's definition of
production area for 5 years would unduly limit the Secretary's
discretion and authority to administer the Order consistent with the
terms of the Act. Therefore, this modification is denied.
One grower from Nevada testified that the hearing should be
reopened to consider excluding Nevada from the production area.
According to his testimony, there are only 37 acres of commercial
spearmint production in the State of Nevada. As such, the witness
concluded that Nevada is not a significant producer of spearmint oil
and should be excluded from Order coverage.
One post-hearing brief and one comment were submitted in support of
removing Nevada from regulation under the Order. There was no other
information provided by those in the spearmint industry to support this
action.
Record evidence shows that Nevada, unlike California and Montana,
currently has commercial production of spearmint oil, and there has
been production of spearmint oil in that State every year since the
inception of the Order. Record evidence indicates that producing
acreage in Nevada has been as high as 230 acres.
The evidence supports excluding from Order coverage only those
areas with no history of commercial production of spearmint oil. There
was no other evidence presented at the hearing as to whether there is a
``significant'' level of production that should justify an area's
inclusion under the Order, nor any evidence as to what that threshold
level should be. Also, no evidence was presented to show that the
marketing of spearmint oil grown in Nevada does not impact or compete
with the marketing of spearmint oil grown in other areas covered by the
Order.
For these reasons, the proposal to exclude Nevada from the
production area is denied.
This decision calls for a referendum to be conducted among
producers of spearmint oil to determine if they support the proposed
amendment to remove California and Montana from the Order's production
area. If a sufficient number of producers support the amendment, the
Order will continue in its amended form. To become effective, the
amendment must be approved by a two-thirds majority, either by number
of voters favoring it or by volume of production represented in the
referendum. If the amendment is not approved by producers, the
Secretary would consider terminating the Order.
As previously discussed, the Act requires that the Order must cover
the smallest regional production area practicable. Based on the record
evidence it is found that the production area as proposed to be amended
constitutes the smallest practicable area.
3. Do existing circumstances warrant expediting the amendment
process by omitting a recommended decision in this proceeding?
Witnesses who testified at the hearing strongly supported expedited
handling of this formal rulemaking proceeding. The record indicates
that there has been uncertainty within the spearmint oil industry for
some time with respect to the possible redefinition of the Order's
production area. Record evidence shows that such uncertainty has the
potential of hampering the ability of individual producers and handlers
to make sound economic decisions concerning their operations. The
proposed amendment could affect planting, contracting, lending and
other important economic decisions of those in the industry. There
[[Page 6332]]
was no evidence provided in opposition to expediting this proceeding.
Only through omission of a recommended decision in this proceeding
is it possible to have the outcome of the amendment and the future of
the Order determined prior to the next marketing year, which begins
June 1, 1996. As stated on the record, this is very important to
producers and handlers of spearmint oil who need to plan their
marketing and production strategies for next year.
It is therefore found that good cause exists for omission of a
recommended decision in accordance with Sec. 900.12(d) of the rules of
practice and procedure governing proceedings to formulate marketing
agreements and marketing orders (7 CFR Part 900).
Rulings on Briefs Filed by Interested Persons
Four briefs and comments were filed in this proceeding. None
opposed the proposed amendment.
One brief and one comment were filed after the filing deadline.
However, they did not introduce issues which were different from those
covered at the hearing or in the other briefs and comments.
The comments and briefs were carefully considered, along with
evidence in the record, in making the findings and reaching the
conclusions contained herein. To the extent that any suggested findings
or conclusions contained in any of the briefs or arguments are
inconsistent with the findings and conclusions contained herein, the
request to make such findings or to reach such conclusions is denied on
the basis of facts found and stated in connection with this decision.
Marketing Order
Annexed hereto and made a part hereof is a document entitled,
``Order Amending the Order Regulating the Handling of Spearmint Oil
Produced in the Far West.'' This document has been decided upon as the
detailed and appropriate means of effectuating the foregoing findings
and conclusions. It is hereby ordered, That this entire decision, be
published in the Federal Register.
Referendum Order
It is hereby directed that a referendum be conducted in accordance
with the procedure for the conduct of referenda (7 CFR 900.400 et seq.)
to determine whether the issuance of the annexed order amending the
order regulating the handling of spearmint oil produced in the Far West
is approved or favored by producers, as defined under the terms of the
order, who during the representative period were engaged in the
production of spearmint oil in the Far West.
The representative period for the conduct of such referendum is
hereby determined to be June 1, 1994, through May 31, 1995.
The agents of the Secretary to conduct such referendum are hereby
designated to be Gary D. Olson and Robert J. Curry, Marketing Order
Administration Branch, Northwest Marketing Field Office, Fruit and
Vegetable Division, AMS, USDA, 1220 S.W. Third Avenue Room 369
Portland, Oregon 97204, telephone (503) 326-2724; or FAX (503) 326-
7440.
In accordance with the Paperwork Reduction Act of 1980 [44 U.S.C.
chapter 35], the ballot materials used in the referendum herein ordered
have been submitted to and approved by the Office of Management and
Budget (OMB) and have been assigned OMB No. 0581-0065 for spearmint
oil. It has been estimated that it will take an average of 10 minutes
for each of the approximately 260 producers of Far West Spearmint to
cast a ballot. Participation is voluntary. Ballots postmarked after
February 24, 1996, will not be included in the vote tabulation.
List of Subjects in 7 CFR Part 985
Marketing agreements, Oils and fats, Reporting and recordkeeping
requirements, Spearmint oil.
Dated: February 13, 1996.
Michael V. Dunn,
Assistant Secretary, Marketing and Regulatory Programs.
Order Amending the Order Regulating the Handling of Spearmint Oil
Produced in the Far West 1
\1\ This order shall not become effective unless and until the
requirements of Sec. 900.14 of the rules of practice and procedure
governing proceedings to formulate marketing agreements and
marketing orders have been met.
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Findings and Determinations
The findings and determinations hereinafter set forth are
supplementary and in addition to the findings and determinations
previously made in connection with the issuance of the order; and
all of said previous findings and determinations are hereby ratified
and affirmed, except insofar as such findings and determinations may
be in conflict with the findings and determinations set forth
herein.
(a) Findings and Determinations Upon the Basis of the Hearing
Record. Pursuant to the provisions of the Agricultural Marketing
Agreement Act of 1937, as amended (7 U.S.C. 601 et seq.), and the
applicable rules of practice and procedure effective thereunder (7
CFR Part 900), a public hearing was held on the proposed amendment
to the Marketing Agreement and Order No. 985 (7 CFR Part 985),
regulating the handling of spearmint oil produced in the Far West.
Upon the basis of the evidence introduced at such hearing and
the record thereof, it is found that:
(1) The order, as hereby proposed to be amended, and all of the
terms and conditions thereof, will tend to effectuate the declared
policy of the Act;
(2) The order, as hereby proposed to be amended, regulates the
handling of spearmint oil produced in the Far West in the same
manner as, and is applicable only to persons in the respective
classes of oil specified in the marketing order upon which hearings
have been held;
(3) The order, as hereby proposed to be amended, is limited in
application to the smallest regional production area which is
practicable, consistent with carrying out the declared policy of the
Act, and the issuance of several orders applicable to subdivisions
of the production area would not effectively carry out the declared
policy of the Act;
(4) The order, as hereby proposed to be amended, prescribes,
insofar as practicable, such different terms applicable to different
parts of the production area as are necessary to give due
recognition to the differences in the production and marketing of
spearmint oil grown in the production area; and
(5) All handling of spearmint oil produced in the production
area is in the current of interstate or foreign commerce or directly
burdens, obstructs, or affects such commerce.
Order Relative to Handling
It is therefore ordered, That on and after the effective date
hereof, all handling of spearmint oil produced in the Far West shall
be in conformity to, and in compliance with, the terms and
conditions of the said order as hereby proposed to be 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. Section 985.5 is revised as follows:
Sec. 985.5 Production area.
Production area means all the area within the States of Washington,
Idaho, Oregon, and that portion of Nevada north of the 37th parallel
and that portion of Utah west of the 111th meridian. The area shall be
divided into the following districts:
(a) District 1. State of Washington.
(b) District 2. The State of Idaho and that portion of the States
of Nevada and Utah included in the production area.
(c) District 3. The State of Oregon.
[FR Doc. 96-3653 Filed 2-16-96; 8:45 am]
BILLING CODE 3410-02-P
