[Federal Register Volume 64, Number 91 (Wednesday, May 12, 1999)]
[Proposed Rules]
[Pages 25462-25464]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-11976]
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Proposed Rules
Federal Register
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This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 64, No. 91 / Wednesday, May 12, 1999 /
Proposed Rules
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 29
[Docket No. TB-99-02]
Tobacco Inspection
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: The Department is proposing to revise the regulations for
flue-cured tobacco to more accurately describe tobacco as it presently
appears at the marketplace. The revision would add a special factor to
the grademark to identify any lots of baled flue-cured tobacco not
opened for inspection. This would allow a distinction between lots that
are opened for inspection and lots that are not opened for inspection.
Additional bale dimensions and space requirements would be established
for uniform marketing display in the warehouses. To take into account
the marketing of bales, a revision would also be necessary in the
poundage adjustment for a warehouse selling in excess of the sales
schedule and for undesignated producer tobacco.
DATES: Comments are due on or before June 11, 1999.
ADDRESSES: Send comments to John P. Duncan III, Deputy Administrator,
Tobacco Programs, Agricultural Marketing Service (AMS), United States
Department of Agriculture (USDA), Room 502 Annex Building, PO Box
96456, Washington, DC 20090-6456. Comments will be made available for
public inspection at this location during regular business hours.
FOR FURTHER INFORMATION CONTACT:
John P. Duncan III, Deputy Administrator, Tobacco Programs, AMS, USDA,
Room 502 Annex Building, PO Box 96456, Washington, DC 20090-6456.
Telephone (202) 205-0567.
SUPPLEMENTARY INFORMATION: Notice is hereby given that the Department
proposes to amend regulations under subpart B, regulations; subpart C,
Standards, and subpart G, Policy Statement and Regulations Governing
Availability of Tobacco Inspection and Price Support Services to Flue-
Cured Tobacco on Designated Markets, pursuant to the authority
contained in the Tobacco Inspection Act of 1935, as amended (49 Stat.
731; 7 U.S.C. 511 et seq.).
This proposal was based on a research project conducted by AMS and
recommendations made by the industry to revise the regulations to
better adapt flue-cured bale inspection into the current marketing
system. On December 30, 1998, the Flue-Cured Tobacco Advisory Committee
(FCTAC) met and reviewed recommendations from the tobacco industry on
the flue-cured bale as an alternative packaging method. The
recommendations made by the FCTAC have been included in this proposal
for regulatory action. The proposed revision would add a special factor
to the grademark to identify lots of flue-cured tobacco not opened for
inspection, establish dimension and spacing requirements for marketing
display of bales, and revise the poundage adjustment for a warehouse
selling in excess of the sales schedule.
Flue-cured tobacco has been traditionally marketed in a sheet with
a maximum weight of 275 pounds. The dimensions of the sheet is 8 feet x
8 feet and is composed of burlap or other synthetic materials. The
tobacco is arranged in a circular pattern on the sheet and the corners
are tied diagonally for handling purposes. The lot of sheeted tobacco
is approximately 4 feet in diameter.
The tobacco industry has experimented with the bale as an
alternative packaging method for marketing flue-cured tobacco during
the past 3 years. This alternative package is a 42-inch wide x 42-
inch high x 40-inch long bale weighing approximately 750 pounds. The
bale is compressed together and bound by metal wires. The FCTAC
recommended bale dimensions of 42 inches x 42 inches x 40 inches.
The current regulations under the Tobacco Inspection Act do not
specifically restrict baling as a packaging method for flue-cured
tobacco. However, the current regulations do require that an official
grade determination be based on a thorough examination of a lot of
tobacco. A minimum of three locations within a lot is required to be
sampled to show the range of the entire lot. However, the buying
segment of the tobacco industry has opposed opening bales citing
integrity issues. Without the ability to examine the interior of the
bale for such conditions as doubtful keeping order (high moisture
level), damaged tobacco, or nesting (inferior quality tobacco), an
accurate grade determination could not be assured.
During the 1998 flue-cured marketing season, Tobacco Programs
conducted a research project on marketing flue-cured tobacco in bales.
The research focused on the grade and condition of flue-cured baled
tobacco from the beginning to the end of the marketing process.
Research data was collected at the farm level as the tobacco was
compressed into a bale, at the auction warehouse before and during the
day of sale, and at the processing facility as the bale was
disassembled.
The purpose of the research project was to determine if significant
variations existed between the exterior and interior of the flue-cured
bale that would impact the official grade standards. The findings
indicated there was no significant variation in grade and condition
observed. However, USDA inspectors were present at the farm to observe
tobacco being placed into a bale and the potential to conceal inferior
quality tobacco was eliminated. Furthermore, the practice of nesting
(concealing inferior quality tobacco) has been a problem in the past
and it is expected that this problem will be present in the future.
Without opening a bale and examining interiors, an accurate grade
determination is not assured. Since flue-cured tobacco is and will
continue to be marketed in both the sheeted and bale packages, we
believe that a distinction needs to be made between lots that are not
opened for inspection. Making such a distinction would contribute to
grading accuracy and assist in maintaining program integrity. In the
event that a problem exists regarding the quality or condition of the
interior of the bale, a buyer would have to resolve the matter with the
producer or the commissioned warehouse operator.
Accordingly, the Department is proposing to revise the regulations
for flue-cured tobacco to more accurately describe tobacco as it
appears at the
[[Page 25463]]
marketplace. This proposal would revise the current tobacco regulations
to allow the inspection of bales of flue-cured tobacco without the bale
being opened for inspection. Further, this proposal also provides that
the inspection of unopened bales would be distinguished from opened
bales by adding the special factor ``B'' to the grademark.
All lots of tobacco that are subject to mandatory inspection on a
designated market should be made accessible to perform grading
activities. The recommendation was made that each lot of baled flue-
cured tobacco displayed for sale on auction warehouse floors be placed
in rows end to end so the open side of the bales are facing the aisles.
Also, a minimum space of 30 inches between the rows with the distance
between lots of tobacco within the row shall be no less than 12 inches
between immediately adjacent lots was recommended. These two spacing
proposals would promote the orderly marketing of baled tobacco by
providing a uniform marketing display in the warehouse. This would also
provide accessibility for inspection of the bales.
An additional proposed revision would increase the poundage
adjustment of 2,500 pounds by doubling the poundage amount for a
warehouse selling in excess of the daily sales schedule. For example,
2,500 pounds would become 5,000 pounds and 5,000 pounds would become
10,000 pounds. The same would be applicable to undesignated producer
tobacco, with 500 pounds becoming 1,000 pounds and 1,000 pounds
becoming 2,000 pounds. This action is being proposed because the bale
weight is approximately three times as much as tobacco marketed in
sheets. This would give the farmers a chance to complete selling their
lots of tobacco when the daily sales schedule has been depleted. This
proposal should meet industry needs for marketing tobacco in bales.
This rule has been determined to be ``not significant'' for
purposes of Executive Order 12866, and therefore, has not been reviewed
by the Office of Management and Budget.
This proposed rule has been reviewed under Executive Order 12866,
Civil Justice Reform. This action is not intended to have retroactive
effect. This proposed rule will not preempt any State or local laws,
regulations, or policies, unless they present an irreconcilable
conflict with this rule. There are no administrative procedures which
must be exhausted prior to any judicial challenge to the provision of
this rule.
Additionally, in conformance with the provisions of the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.), full consideration has been
given to the potential economic impact upon small business. All tobacco
warehouses and producers fall within the confines of ``small business''
which are defined by the Small Business Administration (13 CFR 121.601)
as those having annual receipts of less than $500,000, and small
agricultural service firms are defined as those whose annual receipts
are less than $3,500,000. There are approximately 190 tobacco
warehouses and approximately 30,000 producers. The Agricultural
Marketing Service has determined that this action would not have a
significant economic impact on a substantial number of small entities.
This proposal would add a special factor to the grademark to identify
any lots of baled flue-cured tobacco not opened for inspection. This
change would provide a distinction between lots that are opened for
inspection and lots that are not opened for inspection. Accordingly,
this change would more accurately describe tobacco as it appears in the
marketplace and would assist in maintaining program integrity.
Additional bale dimensions and space requirements would be established
for uniform marketing display in the warehouses and would provide
accessibility for inspection of the bales. A revision would also be
made to the poundage adjustment for a warehouse selling in excess of
the sales schedule and for undesignated producer tobacco in order to
take into account the marketing of bales. These changes would apply
equally to both small and large entities and they would take into
account the marketing of flue-cured tobacco as it presently appears in
the marketplace.
All persons who desire to submit written data, views, or arguments
for consideration in connection with this proposal may file them with
the Deputy Administrator, Tobacco Programs, AMS, USDA, Room 502 Annex
Building, PO Box 96456, Washington, DC 20090-6456. A 30 day comment
period is provided for comments. This period is deemed appropriate
because the flue-cured tobacco marketing season is expected to begin in
mid-July and these changes, if adopted, should be made effective as
soon as possible.
List of Subjects in 7 CFR Part 29
Administrative practice and procedure, Advisory committees,
Government publications, Imports, Pesticides and pests, Reporting and
recordkeeping requirements, Tobacco.
For the reasons set forth in the preamble, it is proposed that 7
CFR part 29 be amended as follows:
PART 29--TOBACCO INSPECTION
Subpart B--Regulations
1. The authority citation for part 29, subpart B continues to read
as follows:
Authority: 7 U.S.C. 511m and 511r.
2. A new Sec. 29.75b is added to read as follows:
Sec. 29.75 Display of baled flue-cured tobacco on auction warehouse
floors in designated markets.
Each lot of baled flue-cured tobacco displayed for sale on auction
warehouse floors shall have a minimum of 30 inches from side to side
between the rows with open side of the bale facing the aisles. Distance
between lots of baled tobacco within the row shall be no less than 12
inches between immediately adjacent lots.
Subpart C--Standards
3. The authority citation for part 29, subpart C continues to read
as follows:
Authority: 7 U.S.C. 511b, 511m, and 511r.
Sec. 29.1059 [Amended]
4. In Sec. 29.1059, the words ``and 29.)'' are removed and the
words ``29, and 30.)'' are added in their place.
5. Section 29.1109 is revised to read as follows:
Sec. 29.1109 Rule 3.
In drawing an official sample from a hogshead or other package of
tobacco, three or more breaks shall be made at such points and in such
manner as the inspector or sampler may find necessary to determine the
kinds of tobacco and the percentage of each kind contained in the lot.
All breaks shall be made so that the tobacco contained in the center of
the package is visible to the sampler, except for baled tobacco that is
not opened for inspection (see Rule 30). Tobacco shall be drawn from at
least three breaks from which a representative sample shall be
selected. The sample shall include tobacco of each different group,
quality, color, length, and kind found in the lot in proportion to the
quantities of each contained in the lot.
6. Section 29.1129 is revised to read as follows:
Sec. 29.1129 Rule 23.
Tobacco shall be designated by the grademark ``No-G,'' when it is
offtype, semicured, fire-killed, smoked, oxidized over 10 percent, has
an odor foreign to the type, or is packed in bales which are
[[Page 25464]]
not approximately 42 inches wide x 42 inches high x 40 inches long
.
7. A new Sec. 29.1136 is added to read as follows:
Sec. 29.1136 Rule 30.
Any lot of baled tobacco that is not opened for inspection but
which otherwise meets the specifications of a grade shall be treated as
a special factor grade by placing the special factor ``B'' after the
grademark.
8. In Sec. 29.1181, the undesignated text immediately following
table ``1 Grade of Scrap'', is revised to read as follows:
Sec. 29.1181 Summary of standard grades.
* * * * *
Special factors ``U'' (unsound), ``W'' (doubtful-keeping order),
``S'' (strip), and ``M'' (mixed) may be applied to all grades. The
special factors ``dirt'' or ``sand'' may be applied to any grade in the
Primings group, including first quality Nondescript from the Primings
group. The special factor ``B'' may be applied to all bales to denote
tobacco not opened for inspection. Tobacco not covered by the standard
grades is designated ``No-G,'' ``No-G-F,'' or ``No-G-Nested.''
Subpart G--Policy Statement and Regulations Governing Availability
of Tobacco Inspection and Price Support Services to Flue-Cured
Tobacco on Designated Markets
9. The authority citation for part 29, subpart G continues to read
as follows:
Authority: Tobacco Inspection Act, 49 Stat. 731 (7 U.S.C. 511 et
seq.); Commodity Credit Corporation Charter Act, 62 Stat. 1070, as
amended (15 U.S.C. 714 et seq.); sec. 213, Pub. L. 98-180, 97 Stat.
1149 (7 U.S.C. 1421); 49 Stat. 731 (7 U.S.C. 511 et seq.), unless
otherwise noted.
10. In Sec. 29.9406, paragraphs (c)(1), (c)(2), (c)(3), and (d) are
revised to read as follows:
Sec. 29.9406 Failure of warehouse to comply with opening and selling
schedule.
* * * * *
(c) * * *
(1) If the excess is 5,000 pounds or less of designated producer
tobacco, the adjustment in producer sales opportunity shall be one
pound for each pound of excess; sales in excess of 5,000 pounds shall
be a violation of the sales schedule and the adjustment for the first
violation shall be 5,000 pounds plus the larger of 3 pounds for each
pound in excess of 5,000 pounds or 5,000 pounds; for the second
violation, the adjustment shall be 5,000 pounds plus the larger of 5
pounds for each pound in excess of 5,000 or 10,000 pounds; and for the
third and subsequent violations, the adjustment shall be 5,000 pounds
plus the larger of 5 pounds for each pound in excess of 5,000 pounds or
50 percent of a schedule day's sales opportunity.
(2) If the excess is 1,000 pounds or less of undesignated producer
tobacco, the adjustment in producers sales opportunity is one pound for
each pound of excess; if the excess is larger than 1,000 pounds, the
adjustment is 1,000 pounds plus the larger of 3 pounds for each pound
in excess of 1,000 or 2,000 pounds.
(3) If the excess is designated producer tobacco that is not
eligible for sales at the warehouse on the day of the sale, the
adjustment in producers sales opportunity for the first violation is
the larger of 3 pounds for each pound in excess or 5,000 pounds, and
for the second and succeeding violations, the larger of 5 pounds for
each pound in excess or 10,000 pounds.
(d) If, on any sales day, a warehouse does not sell the full
quantity of designated or undesignated tobacco authorized to be sold at
such warehouse, the designated or undesignated sales opportunity at
such warehouse on the next immediate sales day shall automatically be
increased by the unsold quantity except that no such increase in sales
opportunity shall exceed 5,000 pounds for designated tobacco or 500
pounds for undesignated tobacco.
Dated: May 6, 1999.
Enrique E. Figueroa,
Administrator, Agricultural Marketing Service.
[FR Doc. 99-11976 Filed 5-11-99; 8:45 am]
BILLING CODE 3410-02-P
