Marketing Order Regulating the Handling of Spearmint Oil Produced in the Far West; Revision of the Salable Quantity and Allotment Percentage for Class 1 (Scotch) and Class 3 (Native) Spearmint Oil for the 2006-2007 Marketing Year, 18345-18349 [07-1831]
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Federal Register / Vol. 72, No. 70 / Thursday, April 12, 2007 / Rules and Regulations
access to Government information and
services, and for other purposes.
USDA has not identified any relevant
Federal rules that duplicate, overlap, or
conflict with this rule.
A proposed rule concerning this
action was published in the Federal
Register on March 7, 2007 (72 FR
10091). Copies of the proposed rule
were also mailed or sent via facsimile to
all olive handlers. Finally, the proposal
was made available through the Internet
by USDA and the Office of the Federal
Register. A 15-day comment period
ending March 22, 2007, was provided
for interested persons to respond to the
proposal. No comments were received.
A small business guide on complying
with fruit, vegetable, and specialty crop
marketing agreements and orders may
be viewed at: https://www.ams.usda.gov/
fv/moab/html. Any questions about the
compliance guide should be sent to Jay
Guerber at the previously mentioned
address in the FOR FURTHER INFORMATION
CONTACT section.
After consideration of all relevant
material presented, including the
information and recommendation
submitted by the committee and other
available information, it is hereby found
that this rule, as hereinafter set forth,
will tend to effectuate the declared
policy of the Act.
Pursuant to 5 U.S.C. 553, it is also
found and determined that good cause
exists for not postponing the effective
date of this rule until 30 days after
publication in the Federal Register
because: (1) The 2007 fiscal year began
on January 1, 2007, and the marketing
order requires that the rate of
assessment for each fiscal year apply to
all assessable olives handled during
such fiscal year; (2) the committee needs
sufficient funds to pay its expenses,
which are incurred on a continuous
basis; and (3) handlers are aware of this
action, which was discussed by the
committee and unanimously
recommended at a public meeting, and
is similar to other assessment rate
actions issued in past years. Also, a 15day comment period was provided for
in the proposed rule.
List of Subjects in 7 CFR Part 932
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Marketing agreements, Olives,
Reporting and recordkeeping
requirements.
I For the reasons set forth in the
preamble, 7 CFR part 932 is proposed to
be amended as follows:
PART 932—OLIVES GROWN IN
CALIFORNIA
1. The authority citation for 7 CFR
part 932 continues to read as follows:
I
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Authority: 7 U.S.C. 601–674.
2. Section 932.230 is revised to read
as follows:
I
§ 932.230
Assessment rate.
On and after January 1, 2007, an
assessment rate of $47.84 per ton is
established for California olives.
Dated: April 9, 2007.
Lloyd C. Day,
Administrator, Agricultural Marketing
Service.
[FR Doc. 07–1832 Filed 4–10–07; 1:10 pm]
BILLING CODE 3410–02–P
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 985
[Docket Nos. AMS–FV–07–0039; FV07–985–
2 IFR]
Marketing Order Regulating the
Handling of Spearmint Oil Produced in
the Far West; Revision of the Salable
Quantity and Allotment Percentage for
Class 1 (Scotch) and Class 3 (Native)
Spearmint Oil for the 2006–2007
Marketing Year
Agricultural Marketing Service,
USDA.
ACTION: Interim final rule with request
for comments.
AGENCY:
SUMMARY: This rule revises the quantity
of Class 1 (Scotch) and Class 3 (Native)
spearmint oil that handlers may
purchase from, or handle for, producers
during the 2006–2007 marketing year.
This rule increases the Scotch spearmint
oil salable quantity from 878,205
pounds to 2,984,817 pounds, and the
allotment percentage from 45 percent to
153 percent. In addition, this rule
increases the Native spearmint oil
salable quantity from 1,161,260 pounds
to 1,205,208 pounds, and the allotment
percentage from 53 percent to 55
percent. The marketing order regulates
the handling of spearmint oil produced
in the Far West and is administered
locally by the Spearmint Oil
Administrative Committee (Committee).
The Committee recommended this rule
for the purpose of avoiding extreme
fluctuations in supplies and prices and
to help maintain stability in the Far
West spearmint oil market.
DATES: Effective June 1, 2006, through
May 31, 2007; comments received by
June 11, 2007 will be considered prior
to issuance of a final rule.
ADDRESSES: Interested persons are
invited to submit written comments
concerning this rule. Comments must be
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18345
sent to the Docket Clerk, Marketing
Order Administration Branch, Fruit and
Vegetable Programs, AMS, USDA, 1400
Independence Avenue, SW., STOP
0237, Washington, DC 20250–0237; Fax:
(202) 720–8938; or Internet: https://
www.regulations.gov. All comments
should reference the docket number and
the date and page number of this issue
of the Federal Register and will be
made available for public inspection in
the Office of the Docket Clerk during
regular business hours, or can be viewed
at: https://www.regulations.gov.
FURTHER INFORMATION CONTACT: Susan
M. Hiller, Marketing Specialist, or Gary
D. Olson, Regional Manager, Northwest
Marketing Field Office, Marketing Order
Administration Branch, Fruit and
Vegetable Programs, AMS, USDA;
Telephone: (503) 326–2724, Fax: (503)
326–7440, or e-mail:
Susan.Hiller@usda.gov or
GaryD.Olson@usda.gov.
Small businesses may request
information on complying with this
regulation by contacting Jay Guerber,
Marketing Order Administration
Branch, Fruit and Vegetable Programs,
AMS, USDA, 1400 Independence
Avenue, SW., STOP 0237, Washington,
DC 20250–0237; Telephone: (202) 720–
2491, Fax: (202) 720–8938, or e-mail:
Jay.Guerber@usda.gov.
SUPPLEMENTARY INFORMATION: This rule
is issued under Marketing Order No.
985 (7 CFR part 985), as amended,
regulating the handling of spearmint oil
produced in the Far West (Washington,
Idaho, Oregon, and designated parts of
Nevada and Utah), hereinafter referred
to as the ‘‘order.’’ The order is effective
under the Agricultural Marketing
Agreement Act of 1937, as amended (7
U.S.C. 601–674), hereinafter referred to
as the ‘‘Act.’’
The Department of Agriculture
(USDA) is issuing this rule in
conformance with Executive Order
12866.
This rule has been reviewed under
Executive Order 12988, Civil Justice
Reform. Under the provisions of the
marketing order now in effect, salable
quantities and allotment percentages
may be established for classes of
spearmint oil produced in the Far West.
This rule increases the quantity of
Scotch and Native spearmint oil
produced in the Far West that may be
purchased from or handled for
producers by handlers during the 2006–
2007 marketing year, which ends on
May 31, 2007. This rule will not
preempt any State or local laws,
regulations, or policies, unless they
present an irreconcilable conflict with
this rule.
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The Act provides that administrative
proceedings must be exhausted before
parties may file suit in court. Under
section 608c(15)(A) of the Act, any
handler subject to an order may file
with USDA 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 request 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 USDA
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 to review USDA’s ruling on
the petition, provided an action is filed
not later than 20 days after the date of
the entry of the ruling.
The original salable quantity and
allotment percentages for Scotch and
Native spearmint oil for the 2006–2007
marketing year were recommended by
the Committee at its October 5, 2005,
meeting. The Committee recommended
salable quantities of 878,205 pounds
and 1,007,886 pounds, and allotment
percentages of 45 percent and 46
percent, respectively, for Scotch and
Native spearmint oil. A proposed rule
was published in the Federal Register
on February 1, 2006 (71 FR 5183).
Comments on the proposed rule were
solicited from interested persons until
March 3, 2006. No comments were
received. Subsequently, a final rule
establishing the salable quantities and
allotment percentages for Scotch and
Native spearmint oil for the 2006–2007
marketing year was published in the
Federal Register on April 5, 2006 (71 FR
16986).
Pursuant to authority contained in
§§ 985.50, 985.51, and 985.52 of the
order, the Committee has made
recommendations to increase the
quantity of Scotch and Native spearmint
oil that handlers may purchase from, or
handle for, producers during the 2006–
2007 marketing year, which ends on
May 31, 2007. An interim final rule was
published in the Federal Register on
May 26, 2006 (71 FR 30266), which
increased the 2006–2007 salable
quantity and allotment percentage for
Native spearmint oil to 1,161,260
pounds and 53 percent, respectively.
Comments on the interim final rule
were solicited from interested persons
until July 25, 2006. No comments were
received. Subsequently, a final rule
establishing the salable quantity and
allotment percentage for Native
spearmint oil was published in the
Federal Register on September 7, 2006
(71 FR 52735).
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This rule would further revise the
quantity of Scotch and Native spearmint
oil that handlers may purchase from, or
handle for, producers during the 2006–
2007 marketing year, which ends on
May 31, 2007. The Committee, with all
eight members present, met on February
21, 2007, and in two separate motions,
recommended that the 2006–2007
Scotch and Native spearmint oil
allotment percentages be increased by
108 percent and 2 percent, respectively.
The motion to increase the allotment
percentage for Scotch was unanimous
and the motion to increase the allotment
percentage for Native passed with seven
members in favor and one member
opposed. The member opposing was
concerned that there was not enough
demand.
Thus, taking into consideration the
following discussion on adjustments to
the Scotch and Native spearmint oil
salable quantities, this rule increases the
2006–2007 marketing year salable
quantities and allotment percentages for
Scotch and Native spearmint oil to
2,984,817 pounds and 153 percent, and
1,205,208 pounds and 55 percent,
respectively.
The salable quantity is the total
quantity of each class of oil that
handlers may purchase from, or handle
for, producers during the marketing
year. The total salable quantity is
divided by the total industry allotment
base to determine an allotment
percentage. Each producer is allotted a
share of the salable quantity by applying
the allotment percentage to the
producer’s individual allotment base for
the applicable class of spearmint oil.
The total industry allotment base for
Scotch spearmint oil for the 2006–2007
marketing year was estimated by the
Committee at the October 5, 2005,
meeting at 1,951,567 pounds. This was
later revised at the beginning of the
2006–2007 marketing year to 1,950,861
pounds to reflect a 2005–2006
marketing year loss of 706 pounds of
base due to non-production of some
producers’ total annual allotments.
When the revised total allotment base of
1,950,861 pounds is applied to the
originally established allotment
percentage of 45 percent, the initially
established 2006–2007 marketing year
salable quantity of 878,205 pounds is
effectively modified to 877,887 pounds.
The same situation applies to Native
spearmint oil where the Committee
estimated that the total industry
allotment base for the 2006–2007
marketing year was established at
2,191,056 pounds and was revised at the
beginning of the 2006–2007 marketing
year to 2,191,287 pounds to reflect a
2005–2006 marketing year gain of 231
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pounds of base for new and existing
producers. When the revised total
allotment base of 2,191,287 pounds is
applied to the originally established
allotment percentage of 46 percent, the
initially established 2006–2007
marketing year salable quantity of
1,007,886 pounds is effectively
modified to 1,007,992 pounds.
By increasing the salable quantities
and allotment percentages, this rule
makes an additional amount of Scotch
and Native spearmint oil available by
releasing oil from the reserve pool.
When applied to each individual
producer, the allotment percentage
increase allows each producer to take
up to an amount equal to their allotment
base from their reserve for this
respective class of oil. In addition,
pursuant to §§ 985.56 and 985.156,
producers with excess oil are not able to
transfer such excess oil to other
producers to fill deficiencies in annual
allotments after October 31 of each
marketing year.
The following table summarizes the
Committee recommendations:
Scotch Spearmint Oil Recommendation
(A) Estimated 2006–2007 Allotment
Base—1,951,567 pounds. This is the
estimate on which the original 2006–
2007 Scotch spearmint oil salable
quantity and allotment percentage was
based.
(B) Revised 2006–2007 Allotment
Base—1,950,861 pounds. This is 706
pounds less than the estimated
allotment base of 1,951,567 pounds.
This is less because some producers
failed to produce all of their 2005–2006
allotment.
(C) Original 2006–2007 Allotment
Percentage—45 percent. This was
unanimously recommended by the
Committee on October 5, 2005.
(D) Original 2006–2007 Salable
Quantity—878,205 pounds. This figure
is 45 percent of the estimated 2006–
2007 allotment base of 1,951,567
pounds.
(E) Adjustment to the Original 2006–
2007 Salable Quantity—877,887
pounds. This figure reflects the salable
quantity initially available after the
beginning of the 2005–2006 marketing
year due to the 706 pound reduction in
the industry allotment base to 1,950,861
pounds.
(F) First Revision to the 2006–2007
Salable Quantity and Allotment
Percentage:
(1) Increase in Allotment Percentage—
108 percent. The Committee
recommended a 108 percent increase at
its February 21, 2007, meeting.
(2) 2006–2007 Allotment Percentage—
153 percent. This figure is derived by
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adding the increase of 108 percent to the
original 2006–2007 allotment
percentage of 45 percent.
(3) Calculated Revised 2006–2007
Salable Quantity—2,984,817 pounds.
This figure is 153 percent of the
adjusted 2006–2007 allotment base of
1,950,861 pounds.
(4) Computed Increase in the 2006–
2007 Salable Quantity—2,106,930
pounds. This figure is 108 percent of the
adjusted 2006–2007 allotment base of
1,950,861 pounds.
(G) No Second Revision to the 2006–
2007 Salable Quantity and Allotment
Percentage.
The 2006–2007 marketing year began
on June 1, 2006, with an estimated
carry-in of 43,057 pounds of salable oil.
Of the original 2006–2007 salable
quantity of 877,887 pounds, only
708,768 pounds was actually produced.
This results in an available supply of
751,825 pounds for the 2006–2007
marketing year. Of this amount, 736,904
pounds of Scotch spearmint oil has
already been sold or committed for the
2006–2007 marketing year, which leaves
14,921 pounds available for sale. As of
February 15, 2007, the reserve pool is
estimated at 13,529 pounds.
In making this recommendation, the
Committee considered all available
information on price, supply, and
demand. The Committee also
considered reports and other
information from handlers and
producers in attendance at the meeting
and reports given by the Committee
Manager from handlers who were not in
attendance. Handlers expressed concern
about the limited supply of Scotch
spearmint oil remaining and that
significant quantities of this oil is of less
than desirable quality. An additional
concern is that the remaining spearmint
oil is in the possession of only a few
producers with minimal allotment base.
An example of this would be a producer
who has 4,000 pounds of reserve pool
oil and only 3,700 pounds of allotment
base. The only way a handler could
purchase this producer’s oil is if the
allotment percentage is increased to at
least 108 percent. Without this increase,
the industry may not be able to meet
market demand based on past history
and current conditions. Additionally,
when the Committee made its original
recommendation for the establishment
of the Scotch spearmint oil salable
quantity and allotment percentage for
the 2006–2007 marketing year, it had
anticipated that the year would end
with an ample available supply.
Native Spearmint Oil Recommendation
(A) Estimated 2006–2007 Allotment
Base—2,191,056 pounds. This is the
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estimate on which the original 2006–
2007 Native spearmint oil salable
quantity and allotment percentage was
based.
(B) Revised 2006–2007 Allotment
Base—2,191,287 pounds. This is 231
pounds more than the estimated
allotment base of 2,191,056 pounds.
This is more because some producers
over-produced their 2005–2006
allotment.
(C) Original 2006–2007 Allotment
Percentage—46 percent. This was
unanimously recommended by the
Committee on October 5, 2005.
(D) Original 2006–2007 Salable
Quantity—1,007,886 pounds. This
figure is 46 percent of the estimated
2006–2007 allotment base of 2,191,056
pounds.
(E) Adjustment to the Original 2006–
2007 Salable Quantity—1,007,992
pounds. This figure reflects the salable
quantity initially available after the
beginning of the 2006–2007 marketing
year due to the 231 pound gain in the
industry allotment base to 2,191,287
pounds.
(F) First Revision to the 2006–2007
Salable Quantity and Allotment
Percentage:
(1) Increase in Allotment Percentage—
7 percent. The Committee
recommended a 7 percent increase at its
April 18, 2006, meeting.
(2) 2006–2007 Allotment Percentage—
53 percent. This figure is derived by
adding the increase of 7 percent to the
original 2006–2007 allotment
percentage of 46 percent.
(3) Calculated Revised 2006–2007
Salable Quantity—1,161,382 pounds.
This figure is 53 percent of the adjusted
2006–2007 allotment base of 2,191,287
pounds.
(4) Computed Increase in the 2006–
2007 Salable Quantity—153,390
pounds. This figure is 7 percent of the
adjusted 2006–2007 allotment base of
2,191,287 pounds.
(G) Second Revision to the 2006–2007
Salable Quantity and Allotment
Percentage:
(1) Increase in Allotment Percentage—
2 percent. The Committee
recommended a 2 percent increase at its
February 21, 2007, meeting.
(2) 2006–2007 Allotment Percentage—
55 percent. This figure is derived by
adding the increase of 2 percent to the
first revised 2006–2007 allotment
percentage of 53 percent.
(3) Calculated Revised 2006–2007
Salable Quantity—1,205,208 pounds.
This figure is 55 percent of the adjusted
2006–2007 allotment base of 2,191,287
pounds.
(4) Computed Increase in the 2006–
2007 Salable Quantity—43,826 pounds.
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This figure is 2 percent of the adjusted
2006–2007 allotment base of 2,191,287
pounds.
The 2006–2007 marketing year began
on June 1, 2006, with an estimated
carry-in of 82,675 pounds of salable oil.
When the estimated carry-in is added to
the revised 2006–2007 salable quantity
of 1,161,382 pounds, a total estimated
available supply for the 2006–2007
marketing year of 1,244,057 pounds
results. Of this amount, 1,130,872
pounds of oil has already been sold or
committed for the 2006–2007 marketing
year, which leaves 113,185 pounds
available for sale. As of February 15,
2007, the reserve pool is estimated at
223,880 pounds.
In making this recommendation, the
Committee considered all available
information on price, supply, and
demand. The Committee also
considered reports and other
information from handlers and
producers in attendance at the meeting
and reports given by the Committee
Manager from handlers and producers
who were not in attendance. On
average, handlers estimate that there is
demand for an additional 30,000
pounds to 50,000 pounds of Native
spearmint oil for the 2006–2007
marketing year. The Committee was
reluctant to increase the salable quantity
any more due to the relatively low
demand; however the Committee
believed that an increase was necessary
since handlers expressed their difficulty
in finding spearmint oil available for
sale. It was also reported that
approximately 30,000 pounds to 80,000
pounds of Native spearmint oil was
poor quality or re-distilled to improve
its chemical composition. Therefore, the
industry may not be able to meet market
demand without this increase. In
addition, when the Committee made its
original recommendation for the
establishment of the Native spearmint
oil salable quantity and allotment
percentage for the 2006–2007 marketing
year, it had anticipated that the year
would end with an ample available
supply.
Based on its analysis of available
information, USDA has determined that
the salable quantity and allotment
percentage for Scotch spearmint oil for
the 2006–2007 marketing year should be
increased to 2,984,817 pounds and 153
percent, respectively. In addition, USDA
has determined that the salable quantity
and allotment percentage for Native
spearmint oil for the 2006–2007
marketing year should be increased to
1,205,208 pounds and 55 percent,
respectively.
This rule relaxes the regulation of
Scotch and Native spearmint oil and
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will allow producers to meet market
demand while improving producer
returns. In conjunction with the
issuance of this rule, the Committee’s
revised marketing policy statement for
the 2006–2007 marketing year has been
reviewed by USDA. The Committee’s
marketing policy statement, a
requirement whenever the Committee
recommends implementing volume
regulations or recommends revisions to
existing volume regulations, meets the
intent of § 985.50 of the order. During its
discussion of revising the 2006–2007
salable quantities and allotment
percentages, the Committee considered:
(1) The estimated quantity of salable oil
of each class held by producers and
handlers; (2) the estimated demand for
each class of oil; (3) prospective
production of each class of oil; (4) total
of allotment bases of each class of oil for
the current marketing year and the
estimated total of allotment bases of
each class for the ensuing marketing
year; (5) the quantity of reserve oil, by
class, in storage; (6) producer prices of
oil, including prices for each class of oil;
and (7) general market conditions for
each class of oil, including whether the
estimated season average price to
producers is likely to exceed parity.
Conformity with USDA’s ‘‘Guidelines
for Fruit, Vegetable, and Specialty Crop
Marketing Orders’’ has also been
reviewed and confirmed.
The increases in the Scotch and
Native spearmint oil salable quantity
and allotment percentage allows for
anticipated market needs for both
classes of oil. In determining anticipated
market needs, consideration by the
Committee was given to historical sales,
and changes and trends in production
and demand.
Initial Regulatory Flexibility Analysis
Pursuant to requirements set forth in
the Regulatory Flexibility Act (RFA), the
Agricultural Marketing Service (AMS)
has considered the economic impact of
this action on small entities.
Accordingly, AMS has prepared this
initial regulatory flexibility analysis.
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 issued pursuant to the
Act, and the 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 statutes have small
entity orientation and compatibility.
There are eight spearmint oil handlers
subject to regulation under the order,
and approximately 58 producers of
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Scotch spearmint oil and approximately
90 producers of Native spearmint oil in
the regulated production area. Small
agricultural service firms are defined by
the Small Business Administration
(SBA) (13 CFR 121.201) as those having
annual receipts of less than $6,500,000,
and small agricultural producers are
defined as those having annual receipts
of less than $750,000.
Based on the SBA’s definition of
small entities, the Committee estimates
that two of the eight handlers regulated
by the order could be considered small
entities. Most of the handlers are large
corporations involved in the
international trading of essential oils
and the products of essential oils. In
addition, the Committee estimates that
19 of the 58 Scotch spearmint oil
producers and 21 of the 90 Native
spearmint oil producers could be
classified as small entities under the
SBA definition. Thus, a majority of
handlers and producers of Far West
spearmint oil may not be classified as
small entities.
The Far West spearmint oil industry
is characterized by producers whose
farming operations generally involve
more than one commodity, and whose
income from farming operations is not
exclusively dependent on the
production of spearmint oil. A typical
spearmint oil-producing operation has
enough acreage for rotation such that
the total acreage required to produce the
crop is about one-third spearmint and
two-thirds rotational crops. Thus, the
typical spearmint oil producer has to
have considerably more acreage than is
planted to spearmint during any given
season. Crop rotation is an essential
cultural practice in the production of
spearmint oil for weed, insect, and
disease control. To remain economically
viable with the added costs associated
with spearmint oil production, most
spearmint oil-producing farms fall into
the SBA category of large businesses.
Small spearmint oil producers
generally are not as extensively
diversified as larger ones and as such
are more at risk to market fluctuations.
Such small producers generally need to
market their entire annual crop and do
not have the luxury of having other
crops to cushion seasons with poor
spearmint oil returns. Conversely, large
diversified producers have the potential
to endure one or more seasons of poor
spearmint oil markets because income
from alternate crops could support the
operation for a period of time. Being
reasonably assured of a stable price and
market provides small producing
entities with the ability to maintain
proper cash flow and to meet annual
expenses. Thus, the market and price
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stability provided by the order
potentially benefit the small producer
more than such provisions benefit large
producers. Even though a majority of
handlers and producers of spearmint oil
may not be classified as small entities,
the volume control feature of this order
has small entity orientation.
This rule further increases the
quantity of Scotch and Native spearmint
oil that handlers may purchase from, or
handle for, producers during the 2006–
2007 marketing year, which ends on
May 31, 2007. This rule increases the
2006–2007 marketing year salable
quantities and allotment percentages for
Scotch and Native spearmint oil to
2,984,817 and 153 percent, and
1,205,208 pounds and 55 percent,
respectively.
An econometric model was used to
assess the impact that volume control
has on the prices producers receive for
their commodity. Without volume
control, spearmint oil markets would
likely be over-supplied, resulting in low
producer prices and a large volume of
oil stored and carried over to the next
crop year. The model estimates how
much lower producer prices would
likely be in the absence of volume
controls.
The recommended allotment
percentages, upon which 2006–2007
producer allotments are based, are 153
percent for Scotch (a 108 percentage
point increase from the original
allotment percentage of 45 percent) and
55 percent for Native (a 9 percentage
point increase from the original
allotment percentage of 46 percent).
Without volume controls, producers
would not be limited to these allotment
levels, and could produce and sell
additional spearmint oil. The
econometric model estimated a $1.37
decline in the season average producer
price per pound of Far West spearmint
oil (combining the two classes of
spearmint oil) resulting from the higher
quantities that would be produced and
marketed if volume controls were not
used.
A previous price decline estimate of
$1.49 per pound was based on the
original 2006–2007 allotment
percentages (45 percent for Scotch and
46 percent for Native) published in the
Federal Register on April 5, 2006 (71 FR
16986). The revised estimate reflects the
impact of the additional quantities that
will be made available by this rule
compared to the original allotment
percentages. In actuality, this rule will
make available 13,026 additional
pounds of Scotch and 21,624 additional
pounds of Native spearmint oil, since
not all producers have reserve pool oil.
Loosening the volume control
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Federal Register / Vol. 72, No. 70 / Thursday, April 12, 2007 / Rules and Regulations
restriction resulted in the smaller price
decline estimate of $1.37 per pound.
The use of volume controls allows the
industry to fully supply spearmint oil
markets while avoiding the negative
consequences of over-supplying these
markets. The use of volume controls is
believed to have little or no effect on
consumer prices of products containing
spearmint oil and will not result in
fewer retail sales of such products.
Based on projections available at the
meeting, the Committee considered
alternatives to each of the increases. The
Committee not only considered leaving
the salable quantity and allotment
percentage unchanged, but also looked
at various increases. The Committee
reached each of its recommendations to
increase the salable quantity and
allotment percentage for Scotch and
Native spearmint oil after careful
consideration of all available
information, and believes that the levels
recommended will achieve the
objectives sought. Without the
increases, the Committee believes the
industry would not be able to meet
market needs.
This rule will not impose any
additional reporting or recordkeeping
requirements on either small or large
spearmint oil handlers. As with all
Federal marketing order programs,
reports and forms are periodically
reviewed to reduce information
requirements and duplication by
industry and public sector agencies. In
addition, USDA has not identified any
relevant Federal rules that duplicate,
overlap or conflict with this rule.
The AMS 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.
The Committee’s meeting was widely
publicized throughout the spearmint oil
industry and all interested persons were
invited to attend the meeting and
participate in Committee deliberations.
Like all Committee meetings, the
February 21, 2007, meeting was a public
meeting and all entities, both large and
small, were able to express their views
on this issue. Finally, interested persons
are invited to submit information on the
regulatory and informational impacts of
this action on small businesses.
A small business guide on complying
with fruit, vegetable, and specialty crop
marketing agreements and orders may
be viewed at: https://www.ams.usda.gov/
fv/moab.html. Any questions about the
compliance guide should be sent to Jay
Guerber at the previously mentioned
VerDate Aug<31>2005
14:18 Apr 11, 2007
Jkt 211001
address in the FOR FURTHER INFORMATION
section.
This rule invites comments on
changes to the salable quantities and
allotment percentages for Scotch and
Native spearmint oil for the 2006–2007
marketing year. Any comments received
will be considered prior to finalization
of this rule.
After consideration of all relevant
material presented, including the
Committee’s recommendation, and
other information, it is found that this
interim final rule, as hereinafter set
forth, will tend to effectuate the
declared policy of the Act.
Pursuant to 5 U.S.C. 553, it is also
found and determined upon good cause
that it is impracticable, unnecessary,
and contrary to the public interest to
give preliminary notice prior to putting
this rule into effect and that good cause
exists for not postponing the effective
date of this rule until 30 days after
publication in the Federal Register
because: (1) This rule increases the
quantity of Scotch and Native spearmint
oil that may be marketed during the
marketing year which ends on May 31,
2007; (2) the current quantity of Scotch
and Native spearmint oil may be
inadequate to meet demand for the
2006–2007 marketing year, thus making
the additional oil available as soon as is
practicable will be beneficial to both
handlers and producers; (3) the
Committee recommended these changes
at a public meeting and interested
parties had an opportunity to provide
input; and (4) this rule provides a 60day comment period and any comments
received will be considered prior to
finalization of this rule.
CONTACT
List of Subjects in 7 CFR Part 985
Marketing agreements, Oils and fats,
Reporting and recordkeeping
requirements, Spearmint oil.
I For the reasons set forth in the
preamble, 7 CFR part 985 is 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:
I
Authority: 7 U.S.C. 601–674.
2. In § 985.225, paragraph (a) and (b)
are revised to read as follows:
I
[Note: This section will not appear in the
annual Code of Federal Regulations.]
§ 985.225 Salable quantities and allotment
percentages—2006–2007 marketing year.
*
PO 00000
*
*
Frm 00007
*
Fmt 4700
*
Sfmt 4700
18349
(a) Class 1 (Scotch) oil—a salable
quantity of 2,984,817 pounds and an
allotment percentage of 153 percent.
(b) Class 3 (Native) oil—a salable
quantity of 1,205,208 pounds and an
allotment percentage of 55 percent.
Dated: April 9, 2007.
Lloyd C. Day,
Administrator, Agricultural Marketing
Service.
[FR Doc. 07–1831 Filed 4–10–07; 1:10 pm]
BILLING CODE 3410–02–P
SMALL BUSINESS ADMINISTRATION
13 CFR Part 120
RIN 3245–AE83
Liquidation and Debt Collection
Activities
U.S. Small Business
Administration (SBA or Agency).
ACTION: Final rule.
AGENCY:
SUMMARY: This final rule amends the
regulations pertaining to guaranteed
loan and debenture liquidation and
litigation found in rules governing the
7(a) Guaranteed Loan program and the
Certified Development Company
program. It codifies statutory language
contained in the Small Business
Investment Act, and revises the
Agency’s guidance on the proper
liquidation and litigation of defaulted
SBA guaranteed loans and debentures.
These rules will give program
participants authority to liquidate small
business loans in a more timely fashion,
and creates a process for identifying
loans and debentures that could be
disposed of in an asset sale conducted
or overseen by SBA.
DATES: This rule is effective May 14,
2007.
FOR FURTHER INFORMATION CONTACT:
James W. Hammersley, Director, Loan
Programs Division, Office of Financial
Assistance, (202) 205–7505, or by e-mail
at james.hammersley@sba.gov.
SUPPLEMENTARY INFORMATION: On
November 3, 2005, SBA published
proposed rules to revise and update
regulations on liquidating and litigating
SBA 7(a) and 504 loans (70 FR 66800,
November 3, 2005). The initial period
for public comment ended on January 6,
2006, but was reopened for additional
comments on January 25, 2006. The
extended comment period ended on
February 24, 2006.
Comment Summary
In total, SBA received 138 responses
to the proposed regulations. Of these,
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[Federal Register Volume 72, Number 70 (Thursday, April 12, 2007)]
[Rules and Regulations]
[Pages 18345-18349]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 07-1831]
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 985
[Docket Nos. AMS-FV-07-0039; FV07-985-2 IFR]
Marketing Order Regulating the Handling of Spearmint Oil Produced
in the Far West; Revision of the Salable Quantity and Allotment
Percentage for Class 1 (Scotch) and Class 3 (Native) Spearmint Oil for
the 2006-2007 Marketing Year
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim final rule with request for comments.
-----------------------------------------------------------------------
SUMMARY: This rule revises the quantity of Class 1 (Scotch) and Class 3
(Native) spearmint oil that handlers may purchase from, or handle for,
producers during the 2006-2007 marketing year. This rule increases the
Scotch spearmint oil salable quantity from 878,205 pounds to 2,984,817
pounds, and the allotment percentage from 45 percent to 153 percent. In
addition, this rule increases the Native spearmint oil salable quantity
from 1,161,260 pounds to 1,205,208 pounds, and the allotment percentage
from 53 percent to 55 percent. The marketing order regulates the
handling of spearmint oil produced in the Far West and is administered
locally by the Spearmint Oil Administrative Committee (Committee). The
Committee recommended this rule for the purpose of avoiding extreme
fluctuations in supplies and prices and to help maintain stability in
the Far West spearmint oil market.
DATES: Effective June 1, 2006, through May 31, 2007; comments received
by June 11, 2007 will be considered prior to issuance of a final rule.
ADDRESSES: Interested persons are invited to submit written comments
concerning this rule. Comments must be sent to the Docket Clerk,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC
20250-0237; Fax: (202) 720-8938; or Internet: https://
www.regulations.gov. All comments should reference the docket number
and the date and page number of this issue of the Federal Register and
will be made available for public inspection in the Office of the
Docket Clerk during regular business hours, or can be viewed at: http:/
/www.regulations.gov.
FURTHER INFORMATION CONTACT: Susan M. Hiller, Marketing Specialist, or
Gary D. Olson, Regional Manager, Northwest Marketing Field Office,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA; Telephone: (503) 326-2724, Fax: (503) 326-7440, or e-mail:
Susan.Hiller@usda.gov or GaryD.Olson@usda.gov.
Small businesses may request information on complying with this
regulation by contacting Jay Guerber, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence
Avenue, SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202)
720-2491, Fax: (202) 720-8938, or e-mail: Jay.Guerber@usda.gov.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order
No. 985 (7 CFR part 985), as amended, regulating the handling of
spearmint oil produced in the Far West (Washington, Idaho, Oregon, and
designated parts of Nevada and Utah), hereinafter referred to as the
``order.'' The order is effective under the Agricultural Marketing
Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter
referred to as the ``Act.''
The Department of Agriculture (USDA) is issuing this rule in
conformance with Executive Order 12866.
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. Under the provisions of the marketing order now in
effect, salable quantities and allotment percentages may be established
for classes of spearmint oil produced in the Far West. This rule
increases the quantity of Scotch and Native spearmint oil produced in
the Far West that may be purchased from or handled for producers by
handlers during the 2006-2007 marketing year, which ends on May 31,
2007. This rule will not preempt any State or local laws, regulations,
or policies, unless they present an irreconcilable conflict with this
rule.
[[Page 18346]]
The Act provides that administrative proceedings must be exhausted
before parties may file suit in court. Under section 608c(15)(A) of the
Act, any handler subject to an order may file with USDA 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
request 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 USDA 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 to review USDA's ruling on the petition,
provided an action is filed not later than 20 days after the date of
the entry of the ruling.
The original salable quantity and allotment percentages for Scotch
and Native spearmint oil for the 2006-2007 marketing year were
recommended by the Committee at its October 5, 2005, meeting. The
Committee recommended salable quantities of 878,205 pounds and
1,007,886 pounds, and allotment percentages of 45 percent and 46
percent, respectively, for Scotch and Native spearmint oil. A proposed
rule was published in the Federal Register on February 1, 2006 (71 FR
5183). Comments on the proposed rule were solicited from interested
persons until March 3, 2006. No comments were received. Subsequently, a
final rule establishing the salable quantities and allotment
percentages for Scotch and Native spearmint oil for the 2006-2007
marketing year was published in the Federal Register on April 5, 2006
(71 FR 16986).
Pursuant to authority contained in Sec. Sec. 985.50, 985.51, and
985.52 of the order, the Committee has made recommendations to increase
the quantity of Scotch and Native spearmint oil that handlers may
purchase from, or handle for, producers during the 2006-2007 marketing
year, which ends on May 31, 2007. An interim final rule was published
in the Federal Register on May 26, 2006 (71 FR 30266), which increased
the 2006-2007 salable quantity and allotment percentage for Native
spearmint oil to 1,161,260 pounds and 53 percent, respectively.
Comments on the interim final rule were solicited from interested
persons until July 25, 2006. No comments were received. Subsequently, a
final rule establishing the salable quantity and allotment percentage
for Native spearmint oil was published in the Federal Register on
September 7, 2006 (71 FR 52735).
This rule would further revise the quantity of Scotch and Native
spearmint oil that handlers may purchase from, or handle for, producers
during the 2006-2007 marketing year, which ends on May 31, 2007. The
Committee, with all eight members present, met on February 21, 2007,
and in two separate motions, recommended that the 2006-2007 Scotch and
Native spearmint oil allotment percentages be increased by 108 percent
and 2 percent, respectively. The motion to increase the allotment
percentage for Scotch was unanimous and the motion to increase the
allotment percentage for Native passed with seven members in favor and
one member opposed. The member opposing was concerned that there was
not enough demand.
Thus, taking into consideration the following discussion on
adjustments to the Scotch and Native spearmint oil salable quantities,
this rule increases the 2006-2007 marketing year salable quantities and
allotment percentages for Scotch and Native spearmint oil to 2,984,817
pounds and 153 percent, and 1,205,208 pounds and 55 percent,
respectively.
The salable quantity is the total quantity of each class of oil
that handlers may purchase from, or handle for, producers during the
marketing year. The total salable quantity is divided by the total
industry allotment base to determine an allotment percentage. Each
producer is allotted a share of the salable quantity by applying the
allotment percentage to the producer's individual allotment base for
the applicable class of spearmint oil.
The total industry allotment base for Scotch spearmint oil for the
2006-2007 marketing year was estimated by the Committee at the October
5, 2005, meeting at 1,951,567 pounds. This was later revised at the
beginning of the 2006-2007 marketing year to 1,950,861 pounds to
reflect a 2005-2006 marketing year loss of 706 pounds of base due to
non-production of some producers' total annual allotments. When the
revised total allotment base of 1,950,861 pounds is applied to the
originally established allotment percentage of 45 percent, the
initially established 2006-2007 marketing year salable quantity of
878,205 pounds is effectively modified to 877,887 pounds.
The same situation applies to Native spearmint oil where the
Committee estimated that the total industry allotment base for the
2006-2007 marketing year was established at 2,191,056 pounds and was
revised at the beginning of the 2006-2007 marketing year to 2,191,287
pounds to reflect a 2005-2006 marketing year gain of 231 pounds of base
for new and existing producers. When the revised total allotment base
of 2,191,287 pounds is applied to the originally established allotment
percentage of 46 percent, the initially established 2006-2007 marketing
year salable quantity of 1,007,886 pounds is effectively modified to
1,007,992 pounds.
By increasing the salable quantities and allotment percentages,
this rule makes an additional amount of Scotch and Native spearmint oil
available by releasing oil from the reserve pool. When applied to each
individual producer, the allotment percentage increase allows each
producer to take up to an amount equal to their allotment base from
their reserve for this respective class of oil. In addition, pursuant
to Sec. Sec. 985.56 and 985.156, producers with excess oil are not
able to transfer such excess oil to other producers to fill
deficiencies in annual allotments after October 31 of each marketing
year.
The following table summarizes the Committee recommendations:
Scotch Spearmint Oil Recommendation
(A) Estimated 2006-2007 Allotment Base--1,951,567 pounds. This is
the estimate on which the original 2006-2007 Scotch spearmint oil
salable quantity and allotment percentage was based.
(B) Revised 2006-2007 Allotment Base--1,950,861 pounds. This is 706
pounds less than the estimated allotment base of 1,951,567 pounds. This
is less because some producers failed to produce all of their 2005-2006
allotment.
(C) Original 2006-2007 Allotment Percentage--45 percent. This was
unanimously recommended by the Committee on October 5, 2005.
(D) Original 2006-2007 Salable Quantity--878,205 pounds. This
figure is 45 percent of the estimated 2006-2007 allotment base of
1,951,567 pounds.
(E) Adjustment to the Original 2006-2007 Salable Quantity--877,887
pounds. This figure reflects the salable quantity initially available
after the beginning of the 2005-2006 marketing year due to the 706
pound reduction in the industry allotment base to 1,950,861 pounds.
(F) First Revision to the 2006-2007 Salable Quantity and Allotment
Percentage:
(1) Increase in Allotment Percentage--108 percent. The Committee
recommended a 108 percent increase at its February 21, 2007, meeting.
(2) 2006-2007 Allotment Percentage--153 percent. This figure is
derived by
[[Page 18347]]
adding the increase of 108 percent to the original 2006-2007 allotment
percentage of 45 percent.
(3) Calculated Revised 2006-2007 Salable Quantity--2,984,817
pounds. This figure is 153 percent of the adjusted 2006-2007 allotment
base of 1,950,861 pounds.
(4) Computed Increase in the 2006-2007 Salable Quantity--2,106,930
pounds. This figure is 108 percent of the adjusted 2006-2007 allotment
base of 1,950,861 pounds.
(G) No Second Revision to the 2006-2007 Salable Quantity and
Allotment Percentage.
The 2006-2007 marketing year began on June 1, 2006, with an
estimated carry-in of 43,057 pounds of salable oil. Of the original
2006-2007 salable quantity of 877,887 pounds, only 708,768 pounds was
actually produced. This results in an available supply of 751,825
pounds for the 2006-2007 marketing year. Of this amount, 736,904 pounds
of Scotch spearmint oil has already been sold or committed for the
2006-2007 marketing year, which leaves 14,921 pounds available for
sale. As of February 15, 2007, the reserve pool is estimated at 13,529
pounds.
In making this recommendation, the Committee considered all
available information on price, supply, and demand. The Committee also
considered reports and other information from handlers and producers in
attendance at the meeting and reports given by the Committee Manager
from handlers who were not in attendance. Handlers expressed concern
about the limited supply of Scotch spearmint oil remaining and that
significant quantities of this oil is of less than desirable quality.
An additional concern is that the remaining spearmint oil is in the
possession of only a few producers with minimal allotment base. An
example of this would be a producer who has 4,000 pounds of reserve
pool oil and only 3,700 pounds of allotment base. The only way a
handler could purchase this producer's oil is if the allotment
percentage is increased to at least 108 percent. Without this increase,
the industry may not be able to meet market demand based on past
history and current conditions. Additionally, when the Committee made
its original recommendation for the establishment of the Scotch
spearmint oil salable quantity and allotment percentage for the 2006-
2007 marketing year, it had anticipated that the year would end with an
ample available supply.
Native Spearmint Oil Recommendation
(A) Estimated 2006-2007 Allotment Base--2,191,056 pounds. This is
the estimate on which the original 2006-2007 Native spearmint oil
salable quantity and allotment percentage was based.
(B) Revised 2006-2007 Allotment Base--2,191,287 pounds. This is 231
pounds more than the estimated allotment base of 2,191,056 pounds. This
is more because some producers over-produced their 2005-2006 allotment.
(C) Original 2006-2007 Allotment Percentage--46 percent. This was
unanimously recommended by the Committee on October 5, 2005.
(D) Original 2006-2007 Salable Quantity--1,007,886 pounds. This
figure is 46 percent of the estimated 2006-2007 allotment base of
2,191,056 pounds.
(E) Adjustment to the Original 2006-2007 Salable Quantity--
1,007,992 pounds. This figure reflects the salable quantity initially
available after the beginning of the 2006-2007 marketing year due to
the 231 pound gain in the industry allotment base to 2,191,287 pounds.
(F) First Revision to the 2006-2007 Salable Quantity and Allotment
Percentage:
(1) Increase in Allotment Percentage--7 percent. The Committee
recommended a 7 percent increase at its April 18, 2006, meeting.
(2) 2006-2007 Allotment Percentage--53 percent. This figure is
derived by adding the increase of 7 percent to the original 2006-2007
allotment percentage of 46 percent.
(3) Calculated Revised 2006-2007 Salable Quantity--1,161,382
pounds. This figure is 53 percent of the adjusted 2006-2007 allotment
base of 2,191,287 pounds.
(4) Computed Increase in the 2006-2007 Salable Quantity--153,390
pounds. This figure is 7 percent of the adjusted 2006-2007 allotment
base of 2,191,287 pounds.
(G) Second Revision to the 2006-2007 Salable Quantity and Allotment
Percentage:
(1) Increase in Allotment Percentage--2 percent. The Committee
recommended a 2 percent increase at its February 21, 2007, meeting.
(2) 2006-2007 Allotment Percentage--55 percent. This figure is
derived by adding the increase of 2 percent to the first revised 2006-
2007 allotment percentage of 53 percent.
(3) Calculated Revised 2006-2007 Salable Quantity--1,205,208
pounds. This figure is 55 percent of the adjusted 2006-2007 allotment
base of 2,191,287 pounds.
(4) Computed Increase in the 2006-2007 Salable Quantity--43,826
pounds. This figure is 2 percent of the adjusted 2006-2007 allotment
base of 2,191,287 pounds.
The 2006-2007 marketing year began on June 1, 2006, with an
estimated carry-in of 82,675 pounds of salable oil. When the estimated
carry-in is added to the revised 2006-2007 salable quantity of
1,161,382 pounds, a total estimated available supply for the 2006-2007
marketing year of 1,244,057 pounds results. Of this amount, 1,130,872
pounds of oil has already been sold or committed for the 2006-2007
marketing year, which leaves 113,185 pounds available for sale. As of
February 15, 2007, the reserve pool is estimated at 223,880 pounds.
In making this recommendation, the Committee considered all
available information on price, supply, and demand. The Committee also
considered reports and other information from handlers and producers in
attendance at the meeting and reports given by the Committee Manager
from handlers and producers who were not in attendance. On average,
handlers estimate that there is demand for an additional 30,000 pounds
to 50,000 pounds of Native spearmint oil for the 2006-2007 marketing
year. The Committee was reluctant to increase the salable quantity any
more due to the relatively low demand; however the Committee believed
that an increase was necessary since handlers expressed their
difficulty in finding spearmint oil available for sale. It was also
reported that approximately 30,000 pounds to 80,000 pounds of Native
spearmint oil was poor quality or re-distilled to improve its chemical
composition. Therefore, the industry may not be able to meet market
demand without this increase. In addition, when the Committee made its
original recommendation for the establishment of the Native spearmint
oil salable quantity and allotment percentage for the 2006-2007
marketing year, it had anticipated that the year would end with an
ample available supply.
Based on its analysis of available information, USDA has determined
that the salable quantity and allotment percentage for Scotch spearmint
oil for the 2006-2007 marketing year should be increased to 2,984,817
pounds and 153 percent, respectively. In addition, USDA has determined
that the salable quantity and allotment percentage for Native spearmint
oil for the 2006-2007 marketing year should be increased to 1,205,208
pounds and 55 percent, respectively.
This rule relaxes the regulation of Scotch and Native spearmint oil
and
[[Page 18348]]
will allow producers to meet market demand while improving producer
returns. In conjunction with the issuance of this rule, the Committee's
revised marketing policy statement for the 2006-2007 marketing year has
been reviewed by USDA. The Committee's marketing policy statement, a
requirement whenever the Committee recommends implementing volume
regulations or recommends revisions to existing volume regulations,
meets the intent of Sec. 985.50 of the order. During its discussion of
revising the 2006-2007 salable quantities and allotment percentages,
the Committee considered: (1) The estimated quantity of salable oil of
each class held by producers and handlers; (2) the estimated demand for
each class of oil; (3) prospective production of each class of oil; (4)
total of allotment bases of each class of oil for the current marketing
year and the estimated total of allotment bases of each class for the
ensuing marketing year; (5) the quantity of reserve oil, by class, in
storage; (6) producer prices of oil, including prices for each class of
oil; and (7) general market conditions for each class of oil, including
whether the estimated season average price to producers is likely to
exceed parity. Conformity with USDA's ``Guidelines for Fruit,
Vegetable, and Specialty Crop Marketing Orders'' has also been reviewed
and confirmed.
The increases in the Scotch and Native spearmint oil salable
quantity and allotment percentage allows for anticipated market needs
for both classes of oil. In determining anticipated market needs,
consideration by the Committee was given to historical sales, and
changes and trends in production and demand.
Initial Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), the Agricultural Marketing Service (AMS) has considered the
economic impact of this action on small entities. Accordingly, AMS has
prepared this initial regulatory flexibility analysis.
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 issued
pursuant to the Act, and the 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 statutes have small
entity orientation and compatibility.
There are eight spearmint oil handlers subject to regulation under
the order, and approximately 58 producers of Scotch spearmint oil and
approximately 90 producers of Native spearmint oil in the regulated
production area. Small agricultural service firms are defined by the
Small Business Administration (SBA) (13 CFR 121.201) as those having
annual receipts of less than $6,500,000, and small agricultural
producers are defined as those having annual receipts of less than
$750,000.
Based on the SBA's definition of small entities, the Committee
estimates that two of the eight handlers regulated by the order could
be considered small entities. Most of the handlers are large
corporations involved in the international trading of essential oils
and the products of essential oils. In addition, the Committee
estimates that 19 of the 58 Scotch spearmint oil producers and 21 of
the 90 Native spearmint oil producers could be classified as small
entities under the SBA definition. Thus, a majority of handlers and
producers of Far West spearmint oil may not be classified as small
entities.
The Far West spearmint oil industry is characterized by producers
whose farming operations generally involve more than one commodity, and
whose income from farming operations is not exclusively dependent on
the production of spearmint oil. A typical spearmint oil-producing
operation has enough acreage for rotation such that the total acreage
required to produce the crop is about one-third spearmint and two-
thirds rotational crops. Thus, the typical spearmint oil producer has
to have considerably more acreage than is planted to spearmint during
any given season. Crop rotation is an essential cultural practice in
the production of spearmint oil for weed, insect, and disease control.
To remain economically viable with the added costs associated with
spearmint oil production, most spearmint oil-producing farms fall into
the SBA category of large businesses.
Small spearmint oil producers generally are not as extensively
diversified as larger ones and as such are more at risk to market
fluctuations. Such small producers generally need to market their
entire annual crop and do not have the luxury of having other crops to
cushion seasons with poor spearmint oil returns. Conversely, large
diversified producers have the potential to endure one or more seasons
of poor spearmint oil markets because income from alternate crops could
support the operation for a period of time. Being reasonably assured of
a stable price and market provides small producing entities with the
ability to maintain proper cash flow and to meet annual expenses. Thus,
the market and price stability provided by the order potentially
benefit the small producer more than such provisions benefit large
producers. Even though a majority of handlers and producers of
spearmint oil may not be classified as small entities, the volume
control feature of this order has small entity orientation.
This rule further increases the quantity of Scotch and Native
spearmint oil that handlers may purchase from, or handle for, producers
during the 2006-2007 marketing year, which ends on May 31, 2007. This
rule increases the 2006-2007 marketing year salable quantities and
allotment percentages for Scotch and Native spearmint oil to 2,984,817
and 153 percent, and 1,205,208 pounds and 55 percent, respectively.
An econometric model was used to assess the impact that volume
control has on the prices producers receive for their commodity.
Without volume control, spearmint oil markets would likely be over-
supplied, resulting in low producer prices and a large volume of oil
stored and carried over to the next crop year. The model estimates how
much lower producer prices would likely be in the absence of volume
controls.
The recommended allotment percentages, upon which 2006-2007
producer allotments are based, are 153 percent for Scotch (a 108
percentage point increase from the original allotment percentage of 45
percent) and 55 percent for Native (a 9 percentage point increase from
the original allotment percentage of 46 percent). Without volume
controls, producers would not be limited to these allotment levels, and
could produce and sell additional spearmint oil. The econometric model
estimated a $1.37 decline in the season average producer price per
pound of Far West spearmint oil (combining the two classes of spearmint
oil) resulting from the higher quantities that would be produced and
marketed if volume controls were not used.
A previous price decline estimate of $1.49 per pound was based on
the original 2006-2007 allotment percentages (45 percent for Scotch and
46 percent for Native) published in the Federal Register on April 5,
2006 (71 FR 16986). The revised estimate reflects the impact of the
additional quantities that will be made available by this rule compared
to the original allotment percentages. In actuality, this rule will
make available 13,026 additional pounds of Scotch and 21,624 additional
pounds of Native spearmint oil, since not all producers have reserve
pool oil. Loosening the volume control
[[Page 18349]]
restriction resulted in the smaller price decline estimate of $1.37 per
pound.
The use of volume controls allows the industry to fully supply
spearmint oil markets while avoiding the negative consequences of over-
supplying these markets. The use of volume controls is believed to have
little or no effect on consumer prices of products containing spearmint
oil and will not result in fewer retail sales of such products.
Based on projections available at the meeting, the Committee
considered alternatives to each of the increases. The Committee not
only considered leaving the salable quantity and allotment percentage
unchanged, but also looked at various increases. The Committee reached
each of its recommendations to increase the salable quantity and
allotment percentage for Scotch and Native spearmint oil after careful
consideration of all available information, and believes that the
levels recommended will achieve the objectives sought. Without the
increases, the Committee believes the industry would not be able to
meet market needs.
This rule will not impose any additional reporting or recordkeeping
requirements on either small or large spearmint oil handlers. As with
all Federal marketing order programs, reports and forms are
periodically reviewed to reduce information requirements and
duplication by industry and public sector agencies. In addition, USDA
has not identified any relevant Federal rules that duplicate, overlap
or conflict with this rule.
The AMS 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.
The Committee's meeting was widely publicized throughout the
spearmint oil industry and all interested persons were invited to
attend the meeting and participate in Committee deliberations. Like all
Committee meetings, the February 21, 2007, meeting was a public meeting
and all entities, both large and small, were able to express their
views on this issue. Finally, interested persons are invited to submit
information on the regulatory and informational impacts of this action
on small businesses.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at: http:/
/www.ams.usda.gov/fv/moab.html. Any questions about the compliance
guide should be sent to Jay Guerber at the previously mentioned address
in the FOR FURTHER INFORMATION CONTACT section.
This rule invites comments on changes to the salable quantities and
allotment percentages for Scotch and Native spearmint oil for the 2006-
2007 marketing year. Any comments received will be considered prior to
finalization of this rule.
After consideration of all relevant material presented, including
the Committee's recommendation, and other information, it is found that
this interim final rule, as hereinafter set forth, will tend to
effectuate the declared policy of the Act.
Pursuant to 5 U.S.C. 553, it is also found and determined upon good
cause that it is impracticable, unnecessary, and contrary to the public
interest to give preliminary notice prior to putting this rule into
effect and that good cause exists for not postponing the effective date
of this rule until 30 days after publication in the Federal Register
because: (1) This rule increases the quantity of Scotch and Native
spearmint oil that may be marketed during the marketing year which ends
on May 31, 2007; (2) the current quantity of Scotch and Native
spearmint oil may be inadequate to meet demand for the 2006-2007
marketing year, thus making the additional oil available as soon as is
practicable will be beneficial to both handlers and producers; (3) the
Committee recommended these changes at a public meeting and interested
parties had an opportunity to provide input; and (4) this rule provides
a 60-day comment period and any comments received will be considered
prior to finalization of this rule.
List of Subjects in 7 CFR Part 985
Marketing agreements, Oils and fats, Reporting and recordkeeping
requirements, Spearmint oil.
0
For the reasons set forth in the preamble, 7 CFR part 985 is amended as
follows:
PART 985--MARKETING ORDER REGULATING THE HANDLING OF SPEARMINT OIL
PRODUCED IN THE FAR WEST
0
1. The authority citation for 7 CFR part 985 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
0
2. In Sec. 985.225, paragraph (a) and (b) are revised to read as
follows:
[Note: This section will not appear in the annual Code of
Federal Regulations.]
Sec. 985.225 Salable quantities and allotment percentages--2006-2007
marketing year.
* * * * *
(a) Class 1 (Scotch) oil--a salable quantity of 2,984,817 pounds
and an allotment percentage of 153 percent.
(b) Class 3 (Native) oil--a salable quantity of 1,205,208 pounds
and an allotment percentage of 55 percent.
Dated: April 9, 2007.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 07-1831 Filed 4-10-07; 1:10 pm]
BILLING CODE 3410-02-P
