Marketing Order Regulating the Handling of Spearmint Oil Produced in the Far West; Revision of the Salable Quantity and Allotment Percentage for Class 3 (Native) Spearmint Oil for the 2010-2011 Marketing Year, 4204-4207 [2011-1429]
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Federal Register / Vol. 76, No. 16 / Tuesday, January 25, 2011 / Rules and Regulations
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 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) Any changes resulting from
this rule should be effective as soon as
practicable because the OregonWashington pear shipping season began
in August; (2) the Committee discussed
and unanimously recommended this
change at a public meeting and all
interested parties had an opportunity to
provide input; (3) this action is a
relaxation of the handling regulations
that is intended to benefit pear handlers
while facilitating the sale of fresh, local
pears directly to consumers; (4) the
industry is aware of this action and
wants to take advantage of the
relaxation during this shipping season;
and (5) 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 927
Marketing agreements, Pears,
Reporting and recordkeeping
requirements.
For the reasons set forth in the
preamble, 7 CFR part 927 is amended as
follows:
PART 927—PEARS GROWN IN
OREGON AND WASHINGTON
1. The authority citation for 7 CFR
part 927 continues to read as follows:
■
Authority: 7 U.S.C. 601–674.
2. A new § 927.122 is added to read
as follows:
■
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§ 927.122
Consumer direct pear sales.
Notwithstanding any other provision
of this section, fresh pears may be
handled without regard to the
provisions of §§ 927.41, 927.51, 927.60,
and 927.70 under the following
conditions:
(a) Such pears are sold in person and
sold directly to consumers on the
premises where grown, at packing
facilities, at roadside stands, or at
farmers’ markets.
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(b) Such pears are for home use only
and are not for resale.
(c) The total quantity of such pears
sold to each consumer during any single
transaction does not exceed 220 pounds.
Dated: January 19, 2011.
Rayne Pegg,
Administrator, Agricultural Marketing
Service.
[FR Doc. 2011–1508 Filed 1–24–11; 8:45 am]
BILLING CODE 3410–02–P
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 985
[Docket Nos. AMS–FV–09–0082; FV10–985–
1A IR]
Marketing Order Regulating the
Handling of Spearmint Oil Produced in
the Far West; Revision of the Salable
Quantity and Allotment Percentage for
Class 3 (Native) Spearmint Oil for the
2010–2011 Marketing Year
Agricultural Marketing Service,
USDA.
ACTION: Interim rule with request for
comments.
AGENCY:
This rule revises the quantity
of Class 3 (Native) spearmint oil that
handlers may purchase from, or handle
on behalf of, producers during the
2010–2011 marketing year. This rule
increases the Native spearmint oil
salable quantity from 980,220 pounds to
1,118,639 pounds, and the allotment
percentage from 43 percent to 50
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 unanimously
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, 2010, through
May 31, 2011; comments received by
March 28, 2011 will be considered prior
to issuance of a final rule.
ADDRESSES: Interested persons are
invited to submit written comments
concerning this proposal. 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
SUMMARY:
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document 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. All comments
submitted in response to this rule will
be included in the record and will be
made available to the public. Please be
advised that the identity of the
individuals or entities submitting the
comments will be made public on the
Internet at the address provided above.
FOR FURTHER INFORMATION CONTACT:
Barry Broadbent, Marketing Specialist
or Gary 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:
Barry.Broadbent@ams.usda.gov or
GaryD.Olson@ams.usda.gov.
Small businesses may request
information on complying with this
regulation by contacting Antoinette
Carter, 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:
Antoinette.Carter@ams.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
Native spearmint oil produced in the
Far West that handlers may purchase
from, or handle on behalf of, producers
during the 2010–2011 marketing year,
which ends on May 31, 2011.
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
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Federal Register / Vol. 76, No. 16 / Tuesday, January 25, 2011 / Rules and Regulations
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 2010–2011
marketing year were recommended by
the Committee at its October 14, 2009,
meeting. The Committee recommended
salable quantities of 566,962 pounds
and 980,265 pounds, and allotment
percentages of 28 percent and 43
percent, respectively, for Scotch and
Native spearmint oil. A proposed rule
was published in the Federal Register
on March 22, 2010 (75 FR 13445).
Comments on the proposed rule were
solicited from interested persons until
April 6, 2010. No comments were
received. Subsequently, a final rule
establishing the salable quantities and
allotment percentages for Scotch and
Native spearmint oil for the 2010–2011
marketing year was published in the
Federal Register on May 18, 2010 (75
FR 27631).
This rule revises the quantity of
Native spearmint oil that handlers may
purchase from, or handle on behalf of,
producers during the 2010–2011
marketing year, which ends on May 31,
2011. Pursuant to authority contained in
§§ 985.50, 985.51, and 985.52 of the
order, the full eight member Committee
met on November 19, 2010, to consider
pertinent market information on the
current supply, demand, and price of
spearmint oil. In a vote with seven
members in favor and one member
opposed, the Committee recommended
that the 2010–2011 Native spearmint oil
allotment percentage be increased by 7
percent, from 43 percent to 50 percent.
The Committee member that voted
against the increase did so without
further explanation.
Thus, taking into consideration the
following discussion on adjustments to
the Native spearmint oil salable
quantities, this rule increases the 2010–
2011 marketing year salable quantities
and allotment percentages for Native
spearmint oil to 1,118,639 pounds and
50 percent.
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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
Native spearmint oil for the 2010–2011
marketing year was estimated by the
Committee at the October 14, 2009,
meeting at 2,279,687 pounds. This
number was later revised at the
beginning of the 2010–2011 marketing
year to 2,279,439 pounds to reflect a
2009–2010 marketing year reduction of
248 pounds. Section 985.53(e) of the
order requires that producers make a
bona fide effort to produce all of their
respective allotment base each year.
Failure to do so results in a reduction
in the producer’s allotment base
equivalent to such unproduced portion.
The 248 pound reduction in allotment
base reflects the total base surrendered
by all producers due to the nonproduction of those producers’ total
annual allotments during the 2009–2010
marketing year.
When the revised total allotment base
of 2,279,439 pounds is applied to the
originally established allotment
percentage of 43 percent, the initially
established 2010–2011 marketing year
salable quantity of 980,265 pounds is
effectively modified to 980,220 pounds.
By increasing the salable quantity and
allotment percentage, this rule makes an
additional amount of Native spearmint
oil available by releasing oil from the
reserve pool. As of May 31, 2010, the
Committee estimated the reserve pool to
be 506,725 pounds.
When the allotment percentage
increase established by this rule is
applied to each individual producer,
that producer may take up to an amount
equal to such allotment from their
reserve for this respective class of oil.
Producers that do not have excess oil in
reserve on November 1, 2010, equal to
or greater than that individual’s
respective pro rata increase in the
salable quantity allotment will not be
able to exercise the full marketing rights
associated with such an increase. Also,
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. As a result, the
Committee has calculated that
deficiencies in individual producer’s oil
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reserves result in an industry total of
21,081 pounds of salable quantity that
will not enter the market.
Therefore, the 7 percent increase in
the salable percentage established by
this rule would result in a total 2010–
2011 marketing year salable quantity of
1,118,639 pounds of Native spearmint
oil. This reflects an additional 138,419
pounds made available to the market by
this rule.
The following summarizes the
Committee recommendations:
Native Spearmint Oil Recommendation
(A) Estimated 2010–2011 Allotment
Base—2,279,687 pounds. This is the
estimate on which the original 2010–
2011 Native spearmint oil salable
quantity and allotment percentage was
based.
(B) Revised 2010–2011 Allotment
Base—2,279,439 pounds. This is 248
pounds less than the estimated
allotment base of 2,279,687 pounds.
This is less because some producers
failed to produce all of their 2009–2010
allotment.
(C) Original 2010–2011 Allotment
Percentage—43 percent. This was
unanimously recommended by the
Committee on October 14, 2009.
(D) Original 2010–2011 Salable
Quantity—980,265 pounds. This figure
is 43 percent of the estimated 2010–
2011 allotment base of 2,279,687.
(E) Adjustment to the Original 2010–
2011 Salable Quantity—980,220
pounds. This figure reflects the salable
quantity initially available at the
beginning of the 2010–2011 marketing
year due to the 248 pound reduction in
the industry allotment base to 2,279,439
pounds.
(F) Current Revision to the 2010–2011
Salable Quantity and Allotment
Percentage:
(1) Increase in Allotment Percentage—
7 percent. The Committee
recommended a 7 percent increase at its
November 19, 2010, meeting.
(2) 2010–2011 Allotment Percentage—
50 percent. This figure is derived by
adding the increase of 7 percent to the
original 2010–2011 allotment
percentage of 43 percent.
(3) Calculated Revised 2010–2011
Salable Quantity—1,118,639 pounds.
This figure is 50 percent of the revised
2010–2011 allotment base of 2,279,439
pounds, less the 21,081 pounds that are
not covered by individual producer’s
reserves.
(4) Computed Increase in the 2010–
2010 Salable Quantity—138,419
pounds. This figure is 7 percent of the
revised 2010–2011 allotment base of
2,279,439 pounds less the 21,081 pound
reserve deficiency.
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Federal Register / Vol. 76, No. 16 / Tuesday, January 25, 2011 / Rules and Regulations
The 2010–2011 marketing year began
on June 1, 2010, with an estimated
carry-in of 343,517 pounds of salable
Native spearmint oil. When the
estimated carry-in is added to the
revised 2010–2011 salable quantity of
1,118,639 pounds, the result is a total
estimated available supply of Native
spearmint oil for the 2010–2011
marketing year of 1,462,156 pounds. Of
this amount, 1,112,292 pounds of oil
has already been sold or committed for
the 2010–2011 marketing year, which
leaves 349,864 pounds available for
sale.
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. By
increasing the 2010–2011 Native
spearmint oil salable percentage by 7
percent, an estimated additional
138,419 pounds will be made available
to the market. This amount combined
with the 211,445 pounds currently
available, will make a total of 349,864
pounds available to the market and
bring the total available supply for the
year to 1,462,156 pounds. The handlers
are estimating that the demand for
2010–2011 year may be 1,133,333
pounds, which would leave 328,823
pounds as a carry out at the end of the
year.
However, when the Committee made
its original recommendation for the
establishment of the Native spearmint
oil salable quantity and allotment
percentage for the 2010–2011 marketing
year, it had anticipated that the year
would end with an ample available
supply. In the interim, the Native
spearmint market experienced dynamic
changes in the supply and demand of
oil. The Committee believes that the
current available supply is insufficient
to satisfy current demand at reasonable
price levels. Therefore, the industry may
not be able to adequately meet market
demand without this increase.
Based on its analysis of available
information, USDA has determined that
the salable quantity and allotment
percentage for Native spearmint oil for
the 2010–2011 marketing year should be
increased to 1,118,639 pounds and 50
percent, respectively.
This rule relaxes the regulation of
Native spearmint oil and will allow
producers to meet market demand while
improving producer returns. In
conjunction with the issuance of this
rule, the Committee’s revised marketing
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policy statement for the 2010–2011
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 2010–2011
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 increase in the Native spearmint
oil salable quantity and allotment
percentage allows for anticipated market
needs for this class 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.
There are 8 spearmint oil handlers
subject to regulation under the order,
and approximately 38 producers of
Scotch spearmint oil and approximately
84 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
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annual receipts of less than $7,000,000,
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 38 Scotch spearmint oil
producers and 29 of the 84 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,
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the volume control feature of this order
has small entity orientation.
This rule revises the quantity of
Native spearmint oil that handlers may
purchase from, or handle on behalf of,
producers during the 2010–2011
marketing year, which ends on May 31,
2011. This rule increases the Native
spearmint oil salable quantity from
980,220 pounds to 1,118,639 pounds
and the allotment percentage from 43
percent to 50 percent.
The use of volume control regulation
allows the industry to fully supply
spearmint oil markets while avoiding
the negative consequences of oversupplying these markets. Volume
control is believed to have little or no
effect on consumer prices of products
containing spearmint oil and likely does
not result in fewer retail sales of such
products. Without volume control,
producers would not be limited in the
production and marketing of spearmint
oil. Under those conditions, the
spearmint oil market would likely
fluctuate widely. Periods of oversupply
could result in low producer prices and
a large volume of oil stored and carried
over to future crop years. Periods of
undersupply could lead to excessive
price spikes and could drive end users
to source flavoring needs from other
markets, potentially causing long term
economic damage to the domestic
spearmint oil industry. The marketing
order’s volume control provisions have
been successfully implemented in the
domestic spearmint oil industry for
nearly three decades and provide
benefits for producers, handlers,
manufacturers, and consumers.
Based on projections available at the
meeting, the Committee considered a
number of alternatives to this increase.
The Committee not only considered
leaving the salable quantity and
allotment percentage unchanged, but
also considered other potential levels of
increase. The Committee reached its
recommendation to increase the salable
quantity and allotment percentage for
Native spearmint oil after careful
consideration of all available
information, and believes that the levels
recommended will achieve the
objectives sought. Without the increase,
the Committee believes the industry
would not be able to satisfactorily meet
market demand.
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.
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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.
In addition, USDA has not identified
any relevant Federal rules that
duplicate, overlap or conflict with this
rule.
Further, 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 November 19, 2010,
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/
MarketingOrdersSmallBusinessGuide.
Any questions about the compliance
guide should be sent to Antoinette
Carter at the previously mentioned
address in the FOR FURTHER INFORMATION
CONTACT section.
This rule invites comments on a
change to the salable quantity and
allotment percentage for Native
spearmint oil for the 2010–2011
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 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 Native spearmint oil that
may be marketed during the marketing
year, which ends on May 31, 2011; (2)
the current quantity of Native spearmint
oil may be inadequate to meet demand
for the 2010–2011 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
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4207
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.
List of Subjects in 7 CFR Part 985
Marketing agreements, Oils and fats,
Reporting and recordkeeping
requirements, Spearmint oil.
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:
■
Authority: 7 U.S.C. 601–674.
2. In § 985.229, paragraph (b) is
revised to read as follows:
■
Note: This section will not appear in the
annual Code of Federal Regulations.
§ 985.229 Salable quantities and allotment
percentages—2010–2011 marketing year.
*
*
*
*
*
(b) Class 3 (Native) oil—a salable
quantity of 1,118,639 pounds and an
allotment percentage of 50 percent.
Dated: January 19, 2011.
Rayne Pegg,
Administrator, Agricultural Marketing
Service.
[FR Doc. 2011–1429 Filed 1–24–11; 8:45 am]
BILLING CODE 3410–02–P
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 380
Orderly Liquidation Authority
Provisions of the Dodd-Frank Wall
Street Reform and Consumer
Protection Act
Federal Deposit Insurance
Corporation (FDIC).
ACTION: Interim final rule.
AGENCY:
The FDIC is issuing an
interim final rule (‘‘Rule’’), with request
for comments, which implements
certain provisions of its authority to
resolve covered financial companies
under Title II of the Dodd-Frank Wall
Street Reform and Consumer Protection
Act (the ‘‘Dodd-Frank Act’’). The FDIC’s
purpose in issuing this Rule is to
provide greater clarity and certainty
about how key components of this
authority will be implemented and to
SUMMARY:
E:\FR\FM\25JAR1.SGM
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]]>Agencies
[Federal Register Volume 76, Number 16 (Tuesday, January 25, 2011)]
[Rules and Regulations]
[Pages 4204-4207]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-1429]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 985
[Docket Nos. AMS-FV-09-0082; FV10-985-1A IR]
Marketing Order Regulating the Handling of Spearmint Oil Produced
in the Far West; Revision of the Salable Quantity and Allotment
Percentage for Class 3 (Native) Spearmint Oil for the 2010-2011
Marketing Year
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim rule with request for comments.
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SUMMARY: This rule revises the quantity of Class 3 (Native) spearmint
oil that handlers may purchase from, or handle on behalf of, producers
during the 2010-2011 marketing year. This rule increases the Native
spearmint oil salable quantity from 980,220 pounds to 1,118,639 pounds,
and the allotment percentage from 43 percent to 50 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 unanimously
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, 2010, through May 31, 2011; comments received
by March 28, 2011 will be considered prior to issuance of a final rule.
ADDRESSES: Interested persons are invited to submit written comments
concerning this proposal. 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 document 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. All comments submitted in response to this rule
will be included in the record and will be made available to the
public. Please be advised that the identity of the individuals or
entities submitting the comments will be made public on the Internet at
the address provided above.
FOR FURTHER INFORMATION CONTACT: Barry Broadbent, Marketing Specialist
or Gary 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:
Barry.Broadbent@ams.usda.gov or GaryD.Olson@ams.usda.gov.
Small businesses may request information on complying with this
regulation by contacting Antoinette Carter, 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:
Antoinette.Carter@ams.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 Native spearmint oil produced in the Far West
that handlers may purchase from, or handle on behalf of, producers
during the 2010-2011 marketing year, which ends on May 31, 2011.
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
[[Page 4205]]
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 2010-2011 marketing year were
recommended by the Committee at its October 14, 2009, meeting. The
Committee recommended salable quantities of 566,962 pounds and 980,265
pounds, and allotment percentages of 28 percent and 43 percent,
respectively, for Scotch and Native spearmint oil. A proposed rule was
published in the Federal Register on March 22, 2010 (75 FR 13445).
Comments on the proposed rule were solicited from interested persons
until April 6, 2010. No comments were received. Subsequently, a final
rule establishing the salable quantities and allotment percentages for
Scotch and Native spearmint oil for the 2010-2011 marketing year was
published in the Federal Register on May 18, 2010 (75 FR 27631).
This rule revises the quantity of Native spearmint oil that
handlers may purchase from, or handle on behalf of, producers during
the 2010-2011 marketing year, which ends on May 31, 2011. Pursuant to
authority contained in Sec. Sec. 985.50, 985.51, and 985.52 of the
order, the full eight member Committee met on November 19, 2010, to
consider pertinent market information on the current supply, demand,
and price of spearmint oil. In a vote with seven members in favor and
one member opposed, the Committee recommended that the 2010-2011 Native
spearmint oil allotment percentage be increased by 7 percent, from 43
percent to 50 percent. The Committee member that voted against the
increase did so without further explanation.
Thus, taking into consideration the following discussion on
adjustments to the Native spearmint oil salable quantities, this rule
increases the 2010-2011 marketing year salable quantities and allotment
percentages for Native spearmint oil to 1,118,639 pounds and 50
percent.
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 Native spearmint oil for the
2010-2011 marketing year was estimated by the Committee at the October
14, 2009, meeting at 2,279,687 pounds. This number was later revised at
the beginning of the 2010-2011 marketing year to 2,279,439 pounds to
reflect a 2009-2010 marketing year reduction of 248 pounds. Section
985.53(e) of the order requires that producers make a bona fide effort
to produce all of their respective allotment base each year. Failure to
do so results in a reduction in the producer's allotment base
equivalent to such unproduced portion. The 248 pound reduction in
allotment base reflects the total base surrendered by all producers due
to the non-production of those producers' total annual allotments
during the 2009-2010 marketing year.
When the revised total allotment base of 2,279,439 pounds is
applied to the originally established allotment percentage of 43
percent, the initially established 2010-2011 marketing year salable
quantity of 980,265 pounds is effectively modified to 980,220 pounds.
By increasing the salable quantity and allotment percentage, this
rule makes an additional amount of Native spearmint oil available by
releasing oil from the reserve pool. As of May 31, 2010, the Committee
estimated the reserve pool to be 506,725 pounds.
When the allotment percentage increase established by this rule is
applied to each individual producer, that producer may take up to an
amount equal to such allotment from their reserve for this respective
class of oil. Producers that do not have excess oil in reserve on
November 1, 2010, equal to or greater than that individual's respective
pro rata increase in the salable quantity allotment will not be able to
exercise the full marketing rights associated with such an increase.
Also, 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. As a result, the Committee has calculated that deficiencies in
individual producer's oil reserves result in an industry total of
21,081 pounds of salable quantity that will not enter the market.
Therefore, the 7 percent increase in the salable percentage
established by this rule would result in a total 2010-2011 marketing
year salable quantity of 1,118,639 pounds of Native spearmint oil. This
reflects an additional 138,419 pounds made available to the market by
this rule.
The following summarizes the Committee recommendations:
Native Spearmint Oil Recommendation
(A) Estimated 2010-2011 Allotment Base--2,279,687 pounds. This is
the estimate on which the original 2010-2011 Native spearmint oil
salable quantity and allotment percentage was based.
(B) Revised 2010-2011 Allotment Base--2,279,439 pounds. This is 248
pounds less than the estimated allotment base of 2,279,687 pounds. This
is less because some producers failed to produce all of their 2009-2010
allotment.
(C) Original 2010-2011 Allotment Percentage--43 percent. This was
unanimously recommended by the Committee on October 14, 2009.
(D) Original 2010-2011 Salable Quantity--980,265 pounds. This
figure is 43 percent of the estimated 2010-2011 allotment base of
2,279,687.
(E) Adjustment to the Original 2010-2011 Salable Quantity--980,220
pounds. This figure reflects the salable quantity initially available
at the beginning of the 2010-2011 marketing year due to the 248 pound
reduction in the industry allotment base to 2,279,439 pounds.
(F) Current Revision to the 2010-2011 Salable Quantity and
Allotment Percentage:
(1) Increase in Allotment Percentage--7 percent. The Committee
recommended a 7 percent increase at its November 19, 2010, meeting.
(2) 2010-2011 Allotment Percentage--50 percent. This figure is
derived by adding the increase of 7 percent to the original 2010-2011
allotment percentage of 43 percent.
(3) Calculated Revised 2010-2011 Salable Quantity--1,118,639
pounds. This figure is 50 percent of the revised 2010-2011 allotment
base of 2,279,439 pounds, less the 21,081 pounds that are not covered
by individual producer's reserves.
(4) Computed Increase in the 2010-2010 Salable Quantity--138,419
pounds. This figure is 7 percent of the revised 2010-2011 allotment
base of 2,279,439 pounds less the 21,081 pound reserve deficiency.
[[Page 4206]]
The 2010-2011 marketing year began on June 1, 2010, with an
estimated carry-in of 343,517 pounds of salable Native spearmint oil.
When the estimated carry-in is added to the revised 2010-2011 salable
quantity of 1,118,639 pounds, the result is a total estimated available
supply of Native spearmint oil for the 2010-2011 marketing year of
1,462,156 pounds. Of this amount, 1,112,292 pounds of oil has already
been sold or committed for the 2010-2011 marketing year, which leaves
349,864 pounds available for sale.
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. By increasing
the 2010-2011 Native spearmint oil salable percentage by 7 percent, an
estimated additional 138,419 pounds will be made available to the
market. This amount combined with the 211,445 pounds currently
available, will make a total of 349,864 pounds available to the market
and bring the total available supply for the year to 1,462,156 pounds.
The handlers are estimating that the demand for 2010-2011 year may be
1,133,333 pounds, which would leave 328,823 pounds as a carry out at
the end of the year.
However, when the Committee made its original recommendation for
the establishment of the Native spearmint oil salable quantity and
allotment percentage for the 2010-2011 marketing year, it had
anticipated that the year would end with an ample available supply. In
the interim, the Native spearmint market experienced dynamic changes in
the supply and demand of oil. The Committee believes that the current
available supply is insufficient to satisfy current demand at
reasonable price levels. Therefore, the industry may not be able to
adequately meet market demand without this increase.
Based on its analysis of available information, USDA has determined
that the salable quantity and allotment percentage for Native spearmint
oil for the 2010-2011 marketing year should be increased to 1,118,639
pounds and 50 percent, respectively.
This rule relaxes the regulation of Native spearmint oil and 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 2010-2011 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 2010-2011 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 increase in the Native spearmint oil salable quantity and
allotment percentage allows for anticipated market needs for this class
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.
There are 8 spearmint oil handlers subject to regulation under the
order, and approximately 38 producers of Scotch spearmint oil and
approximately 84 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 $7,000,000, 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 38 Scotch spearmint oil producers and 29 of
the 84 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,
[[Page 4207]]
the volume control feature of this order has small entity orientation.
This rule revises the quantity of Native spearmint oil that
handlers may purchase from, or handle on behalf of, producers during
the 2010-2011 marketing year, which ends on May 31, 2011. This rule
increases the Native spearmint oil salable quantity from 980,220 pounds
to 1,118,639 pounds and the allotment percentage from 43 percent to 50
percent.
The use of volume control regulation allows the industry to fully
supply spearmint oil markets while avoiding the negative consequences
of over-supplying these markets. Volume control is believed to have
little or no effect on consumer prices of products containing spearmint
oil and likely does not result in fewer retail sales of such products.
Without volume control, producers would not be limited in the
production and marketing of spearmint oil. Under those conditions, the
spearmint oil market would likely fluctuate widely. Periods of
oversupply could result in low producer prices and a large volume of
oil stored and carried over to future crop years. Periods of
undersupply could lead to excessive price spikes and could drive end
users to source flavoring needs from other markets, potentially causing
long term economic damage to the domestic spearmint oil industry. The
marketing order's volume control provisions have been successfully
implemented in the domestic spearmint oil industry for nearly three
decades and provide benefits for producers, handlers, manufacturers,
and consumers.
Based on projections available at the meeting, the Committee
considered a number of alternatives to this increase. The Committee not
only considered leaving the salable quantity and allotment percentage
unchanged, but also considered other potential levels of increase. The
Committee reached its recommendation to increase the salable quantity
and allotment percentage for Native spearmint oil after careful
consideration of all available information, and believes that the
levels recommended will achieve the objectives sought. Without the
increase, the Committee believes the industry would not be able to
satisfactorily meet market demand.
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.
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.
In addition, USDA has not identified any relevant Federal rules
that duplicate, overlap or conflict with this rule.
Further, 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 November 19, 2010, 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/MarketingOrdersSmallBusinessGuide. Any questions
about the compliance guide should be sent to Antoinette Carter at the
previously mentioned address in the FOR FURTHER INFORMATION CONTACT
section.
This rule invites comments on a change to the salable quantity and
allotment percentage for Native spearmint oil for the 2010-2011
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 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 Native spearmint oil
that may be marketed during the marketing year, which ends on May 31,
2011; (2) the current quantity of Native spearmint oil may be
inadequate to meet demand for the 2010-2011 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.
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. 985.229, paragraph (b) is revised to read as follows:
Note: This section will not appear in the annual Code of
Federal Regulations.
Sec. 985.229 Salable quantities and allotment percentages--2010-2011
marketing year.
* * * * *
(b) Class 3 (Native) oil--a salable quantity of 1,118,639 pounds
and an allotment percentage of 50 percent.
Dated: January 19, 2011.
Rayne Pegg,
Administrator, Agricultural Marketing Service.
[FR Doc. 2011-1429 Filed 1-24-11; 8:45 am]
BILLING CODE 3410-02-P
