E7-16713. Milk Income Loss Contract Program

AGENCY:

Commodity Credit Corporation, USDA.

ACTION:

Final rule.

SUMMARY:

This rule amends the regulations for the Milk Income Loss Contract (MILC) Program as authorized by the U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007, to extend the payment calculation at 34 percent for the month of September 2007.

DATES:

Effective Date: August 22, 2007.

FOR FURTHER INFORMATION CONTACT:

Danielle Cooke, Special Programs Manager, Price Support Division, FSA/USDA, STOP 0512, 1400 Independence Ave., SW., Washington, DC 20250-0512; telephone [phone]; facsimile [phone]; e-mail: [e-mail]. Persons with disabilities who require alternative means for communication (Braille, large print, audio tape, etc.) should contact the USDA Target Center at [phone] (voice and TDD).

SUPPLEMENTARY INFORMATION:

Background

The Milk Income Loss Contract (MILC) Program is administered by the Commodity Credit Corporation (CCC). The MILC Program compensates dairy producers when domestic milk prices fall below a specified level. In general, eligible dairy producers are those who commercially produce and market cow milk in the United States or produce milk in the United States and commercially market the milk outside the United States.

The program began on December 1, 2001 and was extended to September 30, 2007. In 2006, applicable to the program extension, the signup and contract periods were both set to end on September 30, 2007. The 2006 amendment lowered the payment calculation percentage from 45 to 34; however, it only extended the payment calculation of 34 percent through August 31, 2007. It further specified that beginning on September 1, 2007, the payment calculation would be zero percent (0%).

Recently, section 9006 of the U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007 (2007 Emergency Supplemental) amended the authority for the MILC Program to extend the current payment calculation percentage of 34 percent to September 30, 2007.

The MILC Program supports the dairy industry by providing direct counter-cyclical payments to milk producers when the Boston Milk Marketing Order Class I price for fluid milk falls below $16.94 per hundredweight (cwt). Each fiscal year, eligible dairy operations can receive a monthly payment based on the quantity of milk sold in that month, up to a maximum of 2.4 million pounds per dairy operation for the fiscal year. We determine the per hundredweight payment rate for the applicable month by subtracting the Boston Class I price for that month from the $16.94 baseline, and multiplying the difference by 34 percent. For example:

• Boston Class I price announced in February 2006 = $16.63.
• $16.94 − $16.63 = $0.31.
• $0.31 × 34 percent = $0.1054000.
• Therefore, the payment rate for February 2006 was $0.1054 per hundredweight.

This rule amends 7 CFR part 1430 to increase the payment rate percentage during the month of September 2007. This makes the calculation percentage consistent for all months in fiscal years 2006 and 2007.

MILC payments are based on the commercially-marketed milk production from the MILC production start month selected by the dairy operation, and continue with each subsequent month's commercial milk production until the earlier of the following: the dairy operation reaches the maximum payment quantity of 2.4 million pounds or the applicable fiscal year ends.

If there is a payment rate in effect during the month of September 2007 and the dairy operation has received MILC payments on less than 2.4 million pounds of production for the 2007 fiscal year, payments will continue through September 2007. The dairy operation can change its production start month selection, with some limitations, to September 2007, as specified in 7 CFR 1430.205, Selection of Starting Month. New MILC producers entering into a MILC will be allowed to select, with some limitations, September 2007 as the production start month for their dairy operation. Those selections must be made in advance of the announcement of the Boston Class I milk price and establishment of the MILC payment rate for that month. Dairy operations that have exceeded their 2.4 million pound production limitation for the 2007 fiscal year will not receive a MILC payment for September 2007.

Notice and Comment

Section 1601(c) of the Farm Security and Rural Investment Act of 2002 (Pub. L. 107-171), also referred to as the 2002 Farm Bill, requires that the regulations necessary to implement Title I of the 2002 Act, including the MILC Program, are to be promulgated and administered without regard to the notice and comment provisions of 5 U.S.C. 553 or the Statement of Policy of the Secretary of Agriculture effective July 24, 1971, (36 FR 13804) relating to notices of proposed rulemaking and public participation in rulemaking. This regulatory change of the MILC Program is therefore issued as final.

Executive Order 12866

This final rule is not significant according to Executive Order 12866 and has not been reviewed by the Office of Management and Budget (OMB).

Regulatory Flexibility Act

The Regulatory Flexibility Act is not applicable to this rule because CCC is not required to publish a notice of proposed rulemaking with respect to the subject matter of this rule.

Environmental Review

In accordance with the National Environmental Policy Act (42 U.S.C. 4321-4347) and the regulations in 40 CFR 1502.4 (Major Federal actions requiring the preparation of Environmental Impact Statements), 7 CFR part 799 (Environmental Quality and Related Environmental Concerns—Compliance with NEPA implementing the regulations of the Council on Environmental Quality), and 40 CFR parts 1500-1508, FSA has determined that this final rule will have no significant impacts upon the human environment. Therefore no environmental assessment or environmental impact statement will be prepared.

Executive Order 12988

The final rule has been reviewed under Executive Order 12988. This rule preempts State laws that are inconsistent with its provisions. Before any judicial action may be brought regarding this rule, all administrative remedies must be exhausted.

Executive Order 12372

This program is not subject to Executive Order 12372, which requires consultation with State and local officials. See the notice related to 7 CFR part 3015, subpart V, published in the Federal Register on June 24, 1983 (48 FR 29115).

Unfunded Mandates

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) does not apply to this rule because CCC is not required to publish a notice of proposed rulemaking about the subject matter of this rule. Further, this rule imposes no unfunded mandates, as define in UMRA, on any local, state, or tribal government or the private sector.

Paperwork Reduction Act

Section 1601(c) of the 2002 Farm Bill provides that the promulgation of regulations and the administration of Title I of the 2002 Farm Bill, including the MILC Program, be made without regard to chapter 5 of title 44 of the United States Code (the Paperwork Reduction Act). Accordingly, these regulations, the forms, and other information collection activities needed to administer the program authorized by these regulations are not subject to review by the Office of Management and Budget under the Paperwork Reduction Act.

E-Government Act Compliance

FSA is committed to complying with the E-Government Act, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

Federal Assistance Programs

The title and number of the Federal assistance program in the Catalog of Federal Domestic Assistance to which this final rule applies is 10.051—Commodity Loans and Loan Deficiency Payments.

List of Subjects in 7 CFR Part 1430

• Dairy products
• Fraud
• Loan programs—agriculture
• Penalties
• Price support programs
• Reporting and recordkeeping requirements

For the reasons explained above, 7 CFR part 1430 is amended as set forth below.

PART 1430—DAIRY PRODUCTS

1. Revise the authority citation for part 1430 to read as follows:

Authority: 7 U.S.C. 7981 and 7982; 15 U.S.C. 714b and 714c; Pub. L. 108-324, 118 Stat. 1235; 16 U.S.C. 3801 note (Pub. L. 109-234, 120 Stat. 474); and Pub. L. 110-28, section 9006.

Subpart B—Milk Income Loss Contract Program

§ 1430.208

[Amended]

2. Amend § 1430.208 as follows:

a. In paragraph (b)(2), remove the words “August 31” and add, in their place, the words “September 30”; remove the words “; and” and add in their place a period; and

b. Remove paragraph (b)(3).

Signed in Washington, DC, on August 9, 2007.

Glen L. Keppy,

Executive Vice President, Commodity Credit Corporation.