95-11181. 1995 Marketing Quota and Price Support for Flue-Cured Tobacco  

  • [Federal Register Volume 60, Number 88 (Monday, May 8, 1995)]
    [Rules and Regulations]
    [Pages 22458-22460]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 95-11181]
    
    
    
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    DEPARTMENT OF AGRICULTURE
    7 CFR Parts 723 and 1464
    
    RIN 0560-AD62
    
    
    1995 Marketing Quota and Price Support for Flue-Cured Tobacco
    
    AGENCIES: Consolidated Farm Service Agency and Commodity Credit 
    Corporation, USDA.
    
    ACTION: Final rule.
    
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    SUMMARY: The purpose of this final rule is to codify determinations 
    made by the Secretary of Agriculture (Secretary) with respect to the 
    1995 crop of flue-cured tobacco. In accordance with the Agricultural 
    Adjustment Act of 1938, as amended, (1938 Act), the Secretary 
    determined the 1995 marketing quota for flue-cured tobacco to be 934.6 
    million pounds. In accordance with the Agricultural Act of 1949, as 
    amended, (1949 Act), the Secretary determined the 1995 price support 
    level to be 159.7 cents per pound.
    
    EFFECTIVE DATE: December 15, 1994.
    
    FOR FURTHER INFORMATION CONTACT: Robert Miller, CFSA, USDA, room 3739, 
    South Building, P.O. Box 2415, Washington, DC 20013-2415, on 202 720-
    8839.
    
    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 under 
    Executive Order 12866.
    
    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 [[Page 22459]] 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.
    
    Paperwork Reduction Act
    
        The amendments to 7 CFR parts 723 and 1464 set forth in this final 
    rule do not contain any new or revised information collection 
    requirements that require clearance through the Office of Management 
    and Budget under the provisions of 44 U.S.C. chapter 35.
    
    Statutory Background
    
        This rule is issued pursuant to the provisions of the 1938 Act and 
    the 1949 Act. Section 1108(c) of P.L. 99-272 provides that the 
    determinations made in this rule are not subject to the provisions for 
    public participation in rule making contained in 5 U.S.C. 553 or in any 
    directive of the Secretary.
    
    Proclamation
    
        On December 15, 1994, the Secretary proclaimed the national 
    marketing quota and announced the price support level for the 1995 crop 
    of flue-cured tobacco.
        A number of related determinations were made at the same time, 
    which this final rule also affirms. The Secretary also announced that a 
    marketing quota referendum would be conducted by mail ballot with 
    respect to flue-cured tobacco.
        During January 9-12, 1995, eligible flue-cured tobacco producers 
    voted in a referendum to determine whether such producers disapprove 
    marketing quotas for the 1995, 1996, and 1997 marketing years (MY's) 
    for this kind of tobacco. Of the producers voting, 98.7 percent favored 
    marketing quotas for flue-cured tobacco. Accordingly, quotas and price 
    support are in effect for the 1995 MY.
    
    Marketing Quota
    
        Section 317(a)(1)(b) of the 1938 Act provides, in part, that the 
    national marketing quota for a marketing year for flue-cured tobacco is 
    the quantity of such tobacco that is not more than 103 percent nor less 
    than 97 percent of the total of: (1) The amount of flue-cured tobacco 
    that domestic manufacturers of cigarettes estimate they intend to 
    purchase on U.S. auction markets or from producers, (2) the average 
    quantity exported annually from the U.S. during the three marketing 
    years immediately preceding the marketing year for which the 
    determination is being made, and (3) the quantity, if any, that the 
    Secretary, in the Secretary's discretion, determines necessary to 
    adjust loan stocks to the reserve stock level.
        Section 317(a)(1)(c) further provides that, with respect to the 
    1995 and 1996 marketing years, any reduction in the national marketing 
    quota being determined shall not exceed 10 percent of the previous 
    year's national marketing quota; except that, if actual loan stocks 
    exceed the prescribed reserve stock level by 50 percent, the Secretary 
    may set the quota according to the 3-component formula (plus or minus 3 
    percent). The reserve stock level is defined in section 301(b)(14)(C) 
    of the 1938 Act as the greater of 100 million pounds or 15 percent of 
    the national marketing quota for flue-cured tobacco for the marketing 
    year immediately preceding the marketing year for which the level is 
    being determined.
        Section 320A of the 1938 Act provides that all domestic 
    manufacturers of cigarettes with more than 1 percent of U.S. cigarette 
    production and sales shall submit to the Secretary a statement of 
    purchase intentions for the 1995 crop of flue-cured tobacco by December 
    1, 1994. Six such manufacturers were required to submit such a 
    statement for the 1995 crop and the total of their intended purchases 
    for the 1995 crop is 569.9 million pounds. The 3-year average of 
    exports is 371.5 million pounds.
        The national marketing quota for the 1994 crop year was 802.6 
    million pounds (59 FR 6865). Thus, in accordance with section 
    301(b)(14)(C), the reserve stock level for use in determining the 1995 
    marketing quota for flue-cured tobacco is 120.4 million pounds.
        On December 1, 1994, the major cigarette manufacturers contracted 
    with the Flue-cured Tobacco Stabilization Corporation to buy all 1990-
    1993 tobacco pledged as collateral for price support loans. Tobacco 
    pledged as collateral for 1994 crop loans total 98.3 million pounds. 
    Accordingly, the adjustment necessary to maintain loan stocks at the 
    reserve supply level is an increase of 22.1 million pounds.
        The total of the three marketing quota components for the 1995-96 
    marketing year is 963.5 million pounds. In addition, the discretionary 
    authority to reduce the three-component total by 3 percent was used 
    because it was determined that the 1995/96 supply would be more than 
    ample. Accordingly, the national marketing quota for the marketing year 
    beginning July 1, 1995, for flue-cured tobacco is 934.6 million pounds.
        Section 317(a)(2) of the 1938 Act provides that the national 
    average yield goal be set at a level that the Secretary determines will 
    improve or ensure the usability of the tobacco and increase the net 
    return per pound to the growers. Yields in crop year 1994 were up 
    substantially from the previous year, but this was a result of 
    exceptionally favorable growing conditions. Accordingly, the national 
    average yield goal for the 1995-96 marketing year will be 2,088 pounds 
    per acre, the same as last year's level.
        In accordance with section 317(a)(3) of the 1938 Act, the national 
    acreage allotment for the 1995 crop of flue-cured tobacco is determined 
    to be 447,605.36 acres, derived from dividing the national marketing 
    quota by the national average yield goal.
        In accordance with section 317(e) 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 3 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 a national 
    reserve for the 1995 crop of flue-cured tobacco of 2,470 acres is 
    adequate for these purposes.
        In accordance with section 317(a)(4) of the 1938 Act, the national 
    acreage factor for the 1995 crop of flue-cured tobacco for uniformly 
    adjusting the acreage allotment of each farm is determined to be 1.16, 
    which is the result of dividing the 1995 national allotment (447,605.36 
    acres) minus the national reserve (2,470 acres) by the total of 
    allotments established for flue-cured tobacco farms in 1994 (383,737.39 
    acres).
        In accordance with section 317(a)(7) of the 1938 Act, the national 
    yield factor for the 1995 crop of flue-cured tobacco is determined to 
    be 0.9284, which is the result of dividing the national average yield 
    goal (2,088 pounds) by a weighted national average yield (2,249 
    pounds).
    
    Price Support
    
        Price support is required to be made available for each crop of a 
    kind of tobacco for which quotas are in effect, or for which marketing 
    quotas have not been disapproved by producers, at a level determined in 
    accordance with a formula prescribed in section 106 of the 1949 Act.
        With respect to the 1995 crop of flue-cured tobacco, the level of 
    support is determined in accordance with sections 106 (d) and (f) of 
    the 1949 Act. Section 106(f)(7)(A) of the 1949 Act provides 
    [[Page 22460]] that the level of support for the 1995 crop of flue-
    cured tobacco shall be:
        (1) The level, in cents per pound, at which the 1994 crop of flue-
    cured tobacco was supported, plus or minus, respectively,
        (2) An adjustment of not less than 65 percent nor more than 100 
    percent of the total, as determined by the Secretary after taking into 
    consideration the supply of the kind of tobacco involved in relation to 
    demand, of:
        (A) 66.7 percent of the amount by which:
        (I) The average price received by producers for flue-cured tobacco 
    on the United States auction markets, as determined by the Secretary, 
    during the 5 marketing years immediately preceding the marketing year 
    for which the determination is being made, excluding the year in which 
    the average price was the highest and the year in which the average 
    price was the lowest in such period, is greater or less than:
        (II) The average price received by producers for flue-cured tobacco 
    on the United States auction markets, as determined by the Secretary, 
    during the 5 marketing years immediately preceding the marketing year 
    prior to the marketing year for which the determination is being made, 
    excluding the year in which the average price was the highest and the 
    year in which the average price was the lowest in such period; and
        (B) 33.3 percent of the change, expressed as a cost per pound of 
    tobacco, in the index of prices paid by the tobacco producers from 
    January 1 to December 31 of the calendar year immediately preceding the 
    year in which the determination is made.
        The difference between the two 5-year averages (i.e., the 
    difference between (A) (I) and (II)) is 0.9 cent per pound. The 
    difference in the cost index from January 1 to December 31, 1994, is 
    4.7 cents per pound. Applying these components to the price support 
    formula (0.9 cents per pound, two-thirds weight; 4.7 cents per pound, 
    one-third weight) results in a weighted total of 2.2 cents per pound. 
    As indicated, section 106 provides that the Secretary may, on the basis 
    of supply and demand conditions, limit the change in the price support 
    level to no less than 65 percent of that amount. In order to remain 
    competitive in foreign and domestic markets, the Secretary used his 
    discretion to limit the increase to 65 percent of the maximum allowable 
    increase. Accordingly, the 1995 crop of flue-cured tobacco will be 
    supported at 159.7 cents per pound, 1.4 cents higher than in 1994.
    
    List of Subjects
    
    7 CFR Part 723
    
        Acreage allotments, marketing quotas, penalties, reporting and 
    recordkeeping requirements, tobacco.
    
    7 CFR Part 1464
    
        Loan programs-agriculture, price support programs, tobacco, 
    reporting and recordkeeping requirements, warehouses.
    
        Accordingly, 7 CFR parts 723 and 1464 are amended 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, 1314f, 1314h, 1315, 1316, 1363, 1372-75, 
    1377-1379, 1421, 1445-1, and 1445-2.
    
        2. Section 723.111 is amended by adding paragraph (c) to read as 
    follows:
    
    
    Sec. 723.111  Flue-cured (types 11-14) tobacco.
    
        (a) * * *
        (b) * * *
        (c) The 1995 crop national marketing quota is 934.6 million pounds.
    
    PART 1464--TOBACCO
    
        3. 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 and 1445-
    2; 15 U.S.C. 714b and 714c.
        4. Section 1464.12 is amended by adding paragraph (c) to read as 
    follows:
    
    
    Sec. 1464.12  Flue-Cured (types 11-14) tobacco.
    
        (a) * * *
        (b) * * *
        (c) The 1995 crop national price support level is 159.7 cents per 
    pound.
    
        Signed at Washington, DC, on May 1, 1995.
    Bruce R. Weber,
    Acting Administrator, Consolidated Farm Service Agency and Acting 
    Executive Vice President, Commodity Credit Corporation.
    [FR Doc. 95-11181 Filed 5-5-95; 8:45 am]
    BILLING CODE 3410-05-P
    
    

Document Information

Effective Date:
12/15/1994
Published:
05/08/1995
Department:
Agriculture Department
Entry Type:
Rule
Action:
Final rule.
Document Number:
95-11181
Dates:
December 15, 1994.
Pages:
22458-22460 (3 pages)
RINs:
0560-AD62
PDF File:
95-11181.pdf
CFR: (2)
7 CFR 723.111
7 CFR 1464.12