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]

Download as PDF 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 rmajette on PROD1PC67 with RULES 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 VerDate Aug<31>2005 14:18 Apr 11, 2007 Jkt 211001 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 PO 00000 Frm 00003 Fmt 4700 Sfmt 4700 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. E:\FR\FM\12APR1.SGM 12APR1 rmajette on PROD1PC67 with RULES 18346 Federal Register / Vol. 72, No. 70 / Thursday, April 12, 2007 / Rules and Regulations 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). VerDate Aug<31>2005 14:18 Apr 11, 2007 Jkt 211001 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 PO 00000 Frm 00004 Fmt 4700 Sfmt 4700 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 E:\FR\FM\12APR1.SGM 12APR1 rmajette on PROD1PC67 with RULES Federal Register / Vol. 72, No. 70 / Thursday, April 12, 2007 / Rules and Regulations 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 VerDate Aug<31>2005 14:18 Apr 11, 2007 Jkt 211001 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. PO 00000 Frm 00005 Fmt 4700 Sfmt 4700 18347 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 E:\FR\FM\12APR1.SGM 12APR1 18348 Federal Register / Vol. 72, No. 70 / Thursday, April 12, 2007 / Rules and Regulations rmajette on PROD1PC67 with RULES 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 VerDate Aug<31>2005 14:18 Apr 11, 2007 Jkt 211001 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 PO 00000 Frm 00006 Fmt 4700 Sfmt 4700 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 E:\FR\FM\12APR1.SGM 12APR1 rmajette on PROD1PC67 with RULES 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, E:\FR\FM\12APR1.SGM 12APR1

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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]


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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.

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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