[Federal Register Volume 64, Number 122 (Friday, June 25, 1999)]
[Proposed Rules]
[Pages 34154-34155]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-16168]
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DEPARTMENT OF AGRICULTURE
Commodity Credit Corporation
7 CFR Part 1412
RIN 0560-AF79
Production Flexibility Contracts for Wheat, Feed Grains, Rice,
and Upland Cotton
AGENCY: Commodity Credit Corporation, USDA.
ACTION: Advance notice of proposed rulemaking--Additional comments.
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SUMMARY: The Commodity Credit Corporation (CCC) is re-issuing this
Advance Notice of Proposed Rulemaking (ANPRM) to invite comment from
all interested parties on reductions of Production Flexibility Contract
(PFC) payments that were affected by the planting of fruits or
vegetables in violation of section 118(b)(1) of the Federal Agriculture
Improvement and Reform Act of 1996 (7 U.S.C. 7218(b)(1)). Comment was
previously requested by a Notice published on May 5, 1999 (64 FR 24091)
for which the comment period closed on June 2, 1999. This notice will
allow for an extension of the comment period.
DATES: Comments must be received at the address below by July 23, 1999.
ADDRESSES: Comments should be directed to Sharon Biastock, Farm Service
Agency (FSA), STOP 0517, 1400 Independence Avenue, SW., Washington, DC
20250.
FOR FURTHER INFORMATION CONTACT: Sharon Biastock, (202) 720-6336.
SUPPLEMENTARY INFORMATION:
Background
The Federal Agriculture Improvement and Reform Act of 1996 (the
1996 Act) provided producers the opportunity to enter into Production
Flexibility Contracts (PFC's). The 1996 Act prohibited the planting of
fruits and vegetables on PFC acreage except as provided by specific
exceptions. Two exceptions require the application of an acre-for-acre
payment reduction for each acre of fruit or vegetables planted on PFC
acreage. A violation of the PFC occurs when producers do not comply
with the fruit and vegetable provisions and the exceptions unless it is
determined that the violation is not serious enough to warrant
termination of the PFC. The 1996 Act provides that if the Secretary
determines that a violation does not warrant termination of the PFC,
the Secretary may require the owner or producer subject to the contract
to: (1) Refund to the Secretary that part of the contract payments
received by the owner or producer during the period of the violation,
together with interest on the contract payments as determined by the
Secretary; or (2) to accept a reduction in the amount of future
contract payments that is proportionate to the severity of the
violation, as determined by the Secretary.
Under current regulations, if the county FSA committee determines
that a planting violation does not warrant termination of the PFC, a
reduction may be made in the current or future contract payments,
proportionate to the severity of the violation and equal to the sum of
either or both: (1) The market value of the fruits and vegetables
planted on contract acreage, and (2) the contract payment for each
contract acre. The market value is determined by the State committee
for the specific fruit or vegetable without any adjustment to reflect
costs associated with planting, cultivating or harvesting the fruit or
vegetable. If the number of acres on the farm planted to fruits or
vegetables exceeds the total PFC acreage and more than one fruit or
vegetable has been planted on the farm, the calculation is based on the
fruit or vegetable determined to have the highest value. If the acreage
of fruit or vegetable with the highest value is less than the acres in
violation, the calculation for the remaining acres in violation is
based on the fruit or vegetable with the next highest value. The
payment reduction is applied to current PFC payments and any future PFC
payments for the farm on which the violation occurred and any other
farm in which the producers who share in PFC payments on the violating
farm have an interest.
For example, if the county committee determines that 25 acres of
fruit or vegetables were planted on PFC acreage in violation of the
PFC, but the violation did not warrant termination of the PFC, a
payment reduction for the planting violation would be assessed in
addition to an acre-for-acre reduction for each of the 25 acres. If, on
the farm in this example, the producer planted 100 acres of green peas,
which the State committee determined had a value of $500 per acre, and
one acre of celery, which the State committee determined had a value of
$3,000 per acre, the payment reduction for the planting violation in
this example would be $15,000 plus a PFC payment reduction for 25
acres. The $15,000 payment reduction for the planting violation
represents the value of the one acre of celery and 24 acres of green
peas, as determined by the State committee. This payment reduction
would be applied to the current year PFC payments and any future PFC
payments for the farm on which the planting violation occurred and any
other farm in which the producers sharing in the PFC payments for the
farm on which the planting violation occurred have an interest.
The payment reductions calculated in accordance with the current
implementing regulations and procedure are viewed by some to be out of
proportion to the severity of the fruit or vegetable planting
violation. Accordingly, as indicated below, the public is invited to
comment on PFC violations for planting fruits and vegetables.
Purpose
The purpose of this ANPRM is to seek comments on: (1) The
appropriateness of the current method of calculating PFC payment
reductions as a result of a fruit or vegetable planting violation as
set forth in 7 CFR 1412.401; (2) alternative methods for calculating
PFC payment reductions for fruit or vegetable planting violations, if
the current method of calculation is considered inappropriate; (3) the
retroactivity of any change in the method of calculating payment
reductions; and (4) the effect any change in the method of calculating
payment reductions should have on PFC's which have been terminated, or
for which contract acreage was reduced, because of the current method
of calculating
[[Page 34155]]
payment reductions for fruit or vegetable planting violations.
Signed at Washington, DC, on June 17, 1999.
Keith Kelly,
Executive Vice President, Commodity Credit Corporation.
[FR Doc. 99-16168 Filed 6-24-99; 8:45 am]
BILLING CODE 3410-05-P
