Marketing Order Regulating the Handling of Spearmint Oil Produced in the Far West; Revision of Administrative Rules and Regulations Governing Issuance of Additional Allotment Base, 25710-25715 [2014-10132]
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25710
Proposed Rules
Federal Register
Vol. 79, No. 87
Tuesday, May 6, 2014
This section of the FEDERAL REGISTER
contains notices to the public of the proposed
issuance of rules and regulations. The
purpose of these notices is to give interested
persons an opportunity to participate in the
rule making prior to the adoption of the final
rules.
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 985
[Doc. No. AMS–FV–13–0088; FV14–985–2
PR]
Marketing Order Regulating the
Handling of Spearmint Oil Produced in
the Far West; Revision of
Administrative Rules and Regulations
Governing Issuance of Additional
Allotment Base
Agricultural Marketing Service,
USDA.
ACTION: Proposed rule.
AGENCY:
This proposed rule invites
comments on revisions to the procedure
currently prescribed for issuing
additional allotment base for Class 1
(Scotch) and Class 3 (Native) spearmint
oil to new and existing producers under
the Far West spearmint oil marketing
order (order). The order regulates the
handling of spearmint oil produced in
the Far West and is administered locally
by the Spearmint Oil Administrative
Committee (Committee). This action
would: Reduce the number of new
producers that are issued additional
allotment bases each year from three to
two, for each class of oil; temporarily
change the method by which additional
allotment base is allocated to existing
producers to take into account small
production operations; and amend the
requirements for eligibility, retention,
and transfer of additional allotment base
issued to new and existing producers.
Revising the procedure for issuing
additional allotment base would help
ensure that new and existing spearmint
oil producers have sufficient allotment
base to be economically viable in the
future.
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SUMMARY:
Comments must be received by
May 21, 2014.
ADDRESSES: Interested persons are
invited to submit written comments
concerning this proposed rule.
Comments must be sent to the Docket
DATES:
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Clerk, Marketing Order and Agreement
Division, Fruit and Vegetable Program,
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 proposal
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:
Manuel Michel or Gary D. Olson,
Northwest Marketing Field Office,
Marketing Order and Agreement
Division, Fruit and Vegetable Program,
AMS, USDA; Telephone: (503) 326–
2724, Fax: (503) 326–7440, or Email:
Manuel.Michel@ams.usda.gov or
GaryD.Olson@ams.usda.gov.
Small businesses may request
information on complying with this
regulation by contacting Jeffrey Smutny,
Marketing Order and Agreement
Division, Fruit and Vegetable Program,
AMS, USDA, 1400 Independence
Avenue SW., STOP 0237, Washington,
DC 20250–0237; Telephone: (202) 720–
2491, Fax: (202) 720–8938, or Email:
Jeffrey.Smutny@ams.usda.gov.
SUPPLEMENTARY INFORMATION: This
proposal 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 proposed rule in
conformance with Executive Orders
12866, 13563, and 13175.
This proposal has been reviewed
under Executive Order 12988, Civil
Justice Reform. This proposed rule is
not intended to have retroactive effect.
The Act provides that administrative
proceedings must be exhausted before
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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.
This proposal invites comments on
revisions to the procedure currently
prescribed for issuing additional
allotment base for Class 1 (Scotch) and
Class 3 (Native) spearmint oil to new
and existing producers under the order’s
volume control provisions. This
proposal would: (1) Reduce the number
of allocations of additional allotment
base issued to new producers each year
from three to two, for each class of oil;
(2) temporarily change the method by
which additional allotment base is
issued to existing producers in order to
take into account producers whose total
allotment base is below the size of the
minimum economic enterprise (MEE)
required to produce each class of
spearmint oil; (3) provide that
additional allotment base issued to
existing producers under the revised
procedure could not be used to replace
allotment base that has been previously
transferred away; and (4) provide that
additional allotment base issued under
the revised procedure could not be
transferred to another producer for at
least five years following issuance. This
action was recommended unanimously
by the Committee at a meeting on
November 6, 2013.
Under the order, volume control
measures are authorized to regulate the
marketing of spearmint oil. Regulation
is currently effectuated through the
issuance of allotment bases to
producers, the establishment of annual
salable quantities and allotment
percentages, and the reserve pooling of
excess production. Allotment base is
each producer’s quantified share of the
spearmint oil market based on a
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statistical representation of past
spearmint oil production, with
accommodation for reasonable and
normal adjustments to such base. The
order’s provisions allow for the
regulation of spearmint oil volume
available to the market. The objective of
regulation is to establish orderly
marketing conditions for spearmint oil
and to ensure that there is sufficient
spearmint oil supply available to meet
market requirements. Since the
program’s inception, volume regulation
has been instrumental in promoting
market and price stability within the
industry.
The order contains provisions to
ensure that there is orderly market
expansion and that new producers are
able to produce and market spearmint
oil. Section 985.53(d)(1) of the order
requires the Committee to annually
make additional allotment bases
available for each class of oil in the
amount of no more than 1 percent of the
total allotment base for that class of oil.
Fifty percent of these additional
allotment bases shall be made available
to new producers and 50 percent made
available to existing producers.
Section 985.53(d)(3) requires the
Committee, with the approval of the
Secretary, to establish rules and
regulations to be used for determining
the distribution of additional allotment
bases. In 1982, these rules and
regulations were established and have
been subsequently revised on several
occasions, most recently in 2003. Each
time a revision is made, the Committee
considers several important factors
which include: the size of the MEE
required for spearmint oil production,
the applicant’s ability to produce
spearmint oil, the area where the
spearmint oil will be produced, and
other economic and marketing factors
that have a direct impact on spearmint
oil producers. The Committee reviews
regularly, and updates as needed, the
size of the MEE required for spearmint
oil production. Under the order, MEE is
the minimum size of production
operation that the Committee has
determined to be economically viable
for each class of spearmint oil. Between
1982 and 1997, the Committee revised
the MEE for Scotch spearmint oil
production three times and Native
spearmint oil production four times. As
a result, the MEE increased from 1,200
pounds to 3,000 pounds for Scotch
spearmint oil, and from 1,800 pounds to
3,400 pounds for Native spearmint oil.
Section 985.153(c)(1) of the order’s
administrative rules and regulations
prescribes the method by which
additional allotment base is issued to
new producers. In addition,
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§ 985.153(c)(2) prescribes the procedure
by which additional allotment base is
issued to existing producers. Lastly,
§ 985.153(d) specifies certain
requirements for spearmint oil
producers who are issued additional
allotment base pursuant to
§ 985.153(c)(1) and (c)(2).
The Committee met on November 6,
2013, to consider the current procedures
for issuing additional allotment base to
new and existing producers and to make
recommendations regarding the revision
of those procedures. As required by
§ 985.153(c)(1)(ii), the Committee first
considered the size of the MEE required
to produce each class of spearmint oil.
The Committee determined that the
MEE levels for both classes of spearmint
oil were no longer representative and
needed to be revised. The Committee
recognized that, as production and
cultural practices for spearmint oil have
continued to change and production
costs per acre have increased, the
Committee’s previously established
MEE levels are too low and should be
revised. As such, the Committee
concluded that the MEE thresholds had
increased to 5,121 pounds for Scotch
spearmint oil and 5,812 pounds for
Native spearmint oil.
As a result of the Committee’s
determination that the MEE thresholds
have increased, and given the quantity
of additional allotment base available to
new producers each year (1⁄2 of 1
percent of the total allotment base for
each class of oil), the additional
allotment base issued each year is only
enough for two new producers, instead
of three, for each class of oil.
The Committee’s initial calculation is
that the total allotment base for Scotch
spearmint oil during the 2014–2015
marketing year will be approximately
2,089,146 pounds. One half of one
percent of this amount would be 10,445
pounds. With the MEE for Scotch
spearmint oil determined to be 5,121
pounds, issuing allotment base to two
new producers would require 10,242
pounds, which is within the amount of
additional allotment base that would be
available for the year.
Likewise, the Committee’s initial
calculation is that the total allotment
base for Native spearmint oil during the
2014–2015 marketing year will be
approximately 2,371,350 pounds. One
half of one percent of this amount
would be 11,856 pounds. With the MEE
for Native spearmint oil determined to
be 5,812 pounds, issuing allotment base
to two new producers would require
11,624 pounds, which is within the
amount of additional allotment base that
would be available for the year.
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Based on the above information, the
Committee unanimously recommended
reducing the number of new producers
that would be issued additional
allotment base each year from three to
two for each class of oil. The Committee
also recommended that the additional
allotment base issued to new producers
not be transferrable for at least five years
following issuance. The current
retention period prior to transferability
is two years. New producers issued
additional allotment base under this
proposal would continue to be required
to submit evidence of an ability to
produce and sell oil from such
allotment base in the first marketing
year following issuance of such base.
The Committee also gave
consideration to existing producers with
regards to the size of the MEE required
to produce spearmint oil and the
allocation of additional allotment base.
After analyzing the Committee’s
records, the Committee found that some
existing producers hold allotment bases
that are below the revised MEE levels.
As a result, the Committee unanimously
recommended that the additional
allotment base that is made available
each year to existing producers be
temporarily allocated first to those
eligible producers who hold allotment
bases that are less than the MEE
threshold in order to bring their total up
to that level.
Under the proposal, existing Scotch
spearmint oil producers whose
allotment bases are less than 5,121
pounds as of October 17, 2012, who
apply and who have the ability to
produce additional quantities of
spearmint oil, would be issued
sufficient additional allotment base to
bring them up to the MEE threshold
over a three-year period extending
through the 2016–2017 marketing year.
In addition, existing Native spearmint
oil producers who hold allotment bases
of less than 5,812 pounds as of October
17, 2012, who apply and who have the
ability to produce additional quantities
of spearmint oil, would be issued
sufficient additional allotment base to
bring them up to the MEE threshold
over a four-year period extending
through the 2017–2018 marketing year.
The Committee estimates there would
be 21 producers of Scotch spearmint oil
and 30 producers of Native spearmint
oil eligible for additional allotment base
under the proposal. It is expected that
eligible existing producers of both
Scotch and Native spearmint oil would
apply for the full amount of additional
allotment base made available to them.
If there is any unallocated additional
allotment base remaining for either
Scotch spearmint oil during the 2016–
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2017 marketing year, or Native
spearmint oil during the 2017–2018
marketing year, such amount would be
distributed on a prorated basis among
all existing producers of each respective
class of spearmint oil.
The Committee also recommended
that additional allotment base issued to
producers under the proposed revised
procedure should not be used to replace
allotment base that has been previously
transferred away by that producer and
that additional allotment base issued
under the revised procedure not be
transferrable for at least five years
following issuance.
Since the establishment of the order,
one of the Committee’s primary
objectives has been to help ensure that
all spearmint oil producers are
economically viable, as evidenced by
holding allotment bases that are above
the minimum economic threshold
required for spearmint oil production.
The Committee has worked to meet this
objective by regularly determining the
size of the MEE and issuing additional
allotment base accordingly. Specifically,
the Committee has raised the quantity of
allotment base issued to new producers,
and increased the allotment bases of
those existing producers who hold
allotment bases that are below the levels
that comprise the minimum economic
threshold required for spearmint oil
production.
Another Committee objective has
been to issue as many additional
allotment bases as possible to new
producers, at levels considered
economically viable to each recipient.
However, since the order limits the
amount of additional allotment base
issued to new producers, and because
the size of the MEE required for
spearmint oil production must be
considered, the Committee has found it
necessary to limit the number of new
producers that are issued additional
allotment base each year. Therefore,
given the circumstances, the Committee
believes the combination of these
actions provides the best method
available for optimizing the number of
new producers that enter and remain in
business, and also helps assure that
there will continue to be a broad base
of spearmint oil production.
The procedure for issuing additional
allotment base to new and existing
producers has been modified several
times since the inception of the order.
Between 1982 and 1991, the entire Far
West spearmint oil production area was
treated as a single region for the purpose
of issuing additional allotment base to
new producers. The Committee would
determine the size and number of
economic enterprises of additional
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allotment base for each class of
spearmint oil to be made available to
new producers. The additional
allotment bases were then issued to new
producers drawn from the lot of eligible
individuals who had requested
additional allotment base.
In 1991, the order’s administrative
rules and regulations were modified
through the rulemaking process to
divide the production area into four
regions for purposes of issuing
additional allotment base to new
producers. An equal number of
allotment bases were issued to new
producers in each region based on the
amount of additional allotment base
available and the MEE determined by
the Committee. Based on the
Committee’s determinations, this
effectively allowed one new producer
annually from each of the four regions
to be issued additional allotment base,
for each class of spearmint oil.
Again in 1997, rulemaking action was
taken to reorganize and reduce the
number of regions within the Far West
production area from four to three. This
revision had the effect of reducing the
number of new producers that were
issued additional allotment bases each
year from four to three for each class of
spearmint oil. The Committee
recommended the revision with the
purpose of distributing additional
allotment bases within the production
area, and to increase the size of
allotment bases issued to new producers
to correspond to the size of the MEE.
The Committee had determined that the
size of the MEE for spearmint oil
production had increased to a point
where there was insufficient additional
allotment base to issue economically
sufficient quantities of base to new
producers in all four regions. By
reorganizing and reducing the number
of regions to three, there was adequate
additional allotment base to issue base
to three new producers of each class of
spearmint oil. In reaching its
recommendation, the Committee
weighed the importance of issuing as
many additional allotment bases as
possible against the need to issue such
bases at levels considered economically
viable to each recipient.
In 2000, the three regions of the Far
West production area were further
reduced to two regions through the
rulemaking process. However, the
number of new producers issued
additional allotment bases each year
was maintained at three for each class
of spearmint oil. As before, the
Committee recommended the revision
with the purpose of distributing
additional allotment bases to new
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spearmint oil producers throughout the
production area.
The proposal to reduce the number of
new producers issued additional
allotment base each year from three to
two for each class of spearmint oil is
consistent with previous rulemaking.
The Committee’s purpose, then and
now, is to ensure that a maximum
number of eligible new producers are
issued additional allotment bases each
year at levels that are economically
viable to produce each class of
spearmint oil.
Consistent with actions taken in the
past, the Committee made the
recommendation after carefully
considering information available from
its management records, Federal and
state government sources, and industry
participants. The Committee also
considered the size of the MEE required
for the production of each class of
spearmint oil, historical statistics
relating to the locations of the producers
applying for the annual additional
allotment base, and other factors, such
as number of producers in the regulated
production area and the amount of
allotment base held by such producers.
Based on its review, the Committee
believes that the recommended action is
the most effective option available in
order to continue fulfilling the order’s
objectives.
Initial Regulatory Flexibility Analysis
Pursuant to requirements set forth in
the Regulatory Flexibility Act (RFA) (5
U.S.C. 601–612), 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
businesses subject to such actions in
order that small businesses will not be
unduly or disproportionately burdened.
Marketing orders issued pursuant to the
Act, and 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 eight spearmint oil handlers
subject to regulation under the order. In
addition, there are approximately 36
producers of Scotch spearmint oil and
approximately 91 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
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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
manufacture and trade of essential oils
and the products of essential oils in the
international market. In addition, the
Committee estimates that 19 of the 36
Scotch spearmint oil producers and 29
of the 91 Native spearmint oil producers
could be classified as small entities
under the SBA definition. Thus, many
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 purposes of weed,
insect, and disease control. To remain
economically viable with the added
costs associated with spearmint oil
production, a majority of spearmint oilproducing 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 from market
fluctuations. Such small producers
generally need to market their entire
annual allotment 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 market and price provides
small producing entities with the ability
to maintain sufficient cash flow and to
meet annual expenses. Thus, the market
and price stability provided by the order
potentially benefit small producers
more than such provisions benefit large
producers.
This proposal would revise the
procedure for issuing additional
allotment base by reducing the number
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of additional allotment bases issued to
new producers from three to two, for
each class of spearmint oil. In addition,
this action would increase the required
retention period prior to transferability
of additional allotment base issued to
new producers from two years to five
years following issuance.
This proposal would also temporarily
change the procedures for the allocation
of additional allotment base by class to
take into account existing producers
that are below the MEE threshold. This
revision is intended to help existing
small spearmint oil producers by
increasing their individual allotment
bases to a level that approximates the
MEE required for spearmint oil
production. The action would help
ensure that small existing spearmint oil
producers have sufficient allotment base
to remain economically viable in the
future. Also, this proposal would
provide that additional allotment base
issued to existing small producers could
not be used to replace allotment base
which has been previously transferred
away. Finally, this action would provide
that additional allotment base issued
under the revised procedure could not
be transferred for at least five years
following issuance. The proposed
procedure revising the method by which
additional allotment base is allocated to
existing producers would be in effect
temporarily through May 31, 2017, for
Scotch spearmint oil, and May 31, 2018,
for Native spearmint oil, or until all
producers who are eligible and apply
have received enough allotment base to
bring them up to the respective MEE
level for each class of oil. Authority for
this action is provided in § 985.53(d)(3)
of the order.
At the meeting on November 6, 2013,
the Committee discussed the impact of
the proposed revisions on handlers and
producers in terms of costs and returns.
Under the order, the Committee is
responsible for determining the size of
the MEE required to produce each class
of spearmint oil. The Committee
determined the MEE size for the 2014–
2015 and subsequent marketing years to
be 5,121 pounds for Scotch spearmint
oil and 5,812 pounds for Native
spearmint oil. Taking this information
into consideration, the Committee
calculated that the number of new
producers issued additional allotment
bases each year would need to be
reduced from three to two for each class
of oil. While this action would reduce
the number of new producers issued
additional allotment bases each year,
each new producer would have a larger
initial allotment base, thereby
enhancing their long term economic
viability in the spearmint oil industry.
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Additionally, the Committee
estimates there are 21 producers of
Scotch spearmint oil whose allotment
bases are below the MEE threshold and
it would take a total of 21,913 pounds
of additional allotment base to raise
these producers’ allotment bases up to
the Scotch spearmint oil MEE threshold.
Likewise, the Committee estimates there
are also 30 producers of Native
spearmint oil whose allotment bases are
below the MEE level, and it would take
a total of 43,456 pounds of additional
allotment base to raise these producers’
allotment bases to the size of the MEE
required to produce Native spearmint
oil.
While the amount of additional
allotment base necessary to bring all
spearmint oil producers’ allotment bases
up to the MEE threshold is a fraction of
the total allotment base, the benefits of
the proposed revision would be
significant to these small producers,
because it would improve their
economic viability into the future.
Without the revision, small spearmint
oil producers are at a greater risk of not
being able to continue to produce
spearmint oil. Therefore, the benefits of
this proposed rule are expected to be
greater for small producers than for
larger entities.
The Committee discussed several
alternatives to the recommendations
contained in this proposed rule,
including not making any changes to the
procedures as currently prescribed in
the order. However, the Committee
determined that not taking the MEE
threshold into consideration when
issuing additional base would have
negative impacts primarily affecting
new and existing small producers. The
Committee concluded that the most
effective option was to revise the
procedure for issuing additional
allotment base in order to improve the
economic viability of new and existing
producers whose allotment bases are
below the MEE threshold.
The Committee also considered
alternative MEE thresholds before
deciding on the levels that were most
representative of the production
economics for each class of spearmint
oil. The Committee considers the size of
the MEE for the production of each class
of spearmint oil is accurate and
appropriate given the information
available.
In addition, the Committee
considered the length of time that new
and existing producers should be
expected to hold onto additional
allotment base issued under the
proposed revised procedure before such
allotment base could be transferred. The
Committee considered other retention
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periods other than the proposed five
years, including maintaining the current
two year retention period. However, it
concluded that a five year retention
requirement prior to transfer of
additional allotment base issued under
the proposed revised procedure was a
sufficient period for new and existing
producers to demonstrate viability in
spearmint oil production and should
not present an undue hardship on the
producers being issued the additional
allotment base.
In its deliberations, the Committee
considered all available information,
including its determination of the size
of the MEE required for spearmint oil
production, historical statistics relating
to the locations of the producers
applying for the annual additional
allotment base, and other factors such as
the number of producers in the
regulated production area and the
amount of allotment base held by such
producers. Based on those
determinations, the full eight-member
Committee unanimously recommended
revising the procedure for issuing
additional allotment base to new and
existing spearmint oil producers, for
each class of oil, as proposed herein.
In accordance with the Paperwork
Reduction Act of 1995 (44 U.S.C.
Chapter 35), the order’s information
collection requirements is currently
approved by the Office of Management
and Budget (OMB) and assigned OMB
No. 0581–0178, Generic Vegetable and
Specialty Crops. Upon publication of
the final rule, we will submit a
Justification of Change to make minor
modifications changing the appearance
of two forms and adjusting the burden,
accordingly.
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.
USDA has not identified any relevant
Federal rules that duplicate, overlap or
conflict with this proposed rule.
In addition, the Committee meetings
were widely publicized throughout the
spearmint oil industry and all interested
persons were invited to attend the
meetings and participate in Committee
deliberations on all issues. Like all
Committee meetings, the March 6, 2013,
and the November 6, 2013, meetings
were public meetings and all entities,
both large and small, were able to
express views on this issue. Finally,
interested persons are invited to submit
comments on this proposed rule,
including the regulatory and
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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 Jeffrey Smutny
at the previously mentioned address in
the FOR FURTHER INFORMATION CONTACT
section.
A 15-day comment period is provided
to allow interested persons to respond
to this proposal. Fifteen days is deemed
appropriate because: (1) The 2014–2015
fiscal period begins on June 1, 2014; (2)
affected spearmint oil producers need to
be informed as soon as possible of any
changes in base allotment allocation in
order to plan their plantings
accordingly; and (3) spearmint oil
producers are aware of this action,
which was unanimously recommended
by the Committee at a public meeting
and is similar to previous actions
recommended by the Committee and
approved by the Secretary.
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 proposed to
be 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 § 985.153, redesignate and revise
paragraphs (c)(1)(ii) as (c)(1)(iii) and
(c)(2)(ii) as (c)(2)(iv), add new
paragraphs (c)(1)(ii), (c)(2)(ii) and
(c)(2)(iii), and revise paragraph (d) to
read as follows:
■
§ 985.153 Issuance of additional allotment
base to new and existing producers.
*
*
*
*
*
(c) * * *
(1) * * *
(ii) The Committee shall review all
requests from new producers for
additional allotment base made
available pursuant to § 985.53(d)(1).
(iii) Each year, the Committee shall
determine the size of the minimum
economic enterprise required to
produce each class of oil. The
Committee shall thereafter calculate the
number of new producers who will
receive allotment base under this
section for each class of oil. The
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Fmt 4702
Sfmt 4702
Committee shall include that
information in its announcements to
new producers in each region informing
them when to submit requests for
allotment base. The Committee shall
determine whether the new producers
requesting additional base have the
ability to produce spearmint oil. The
names of all eligible new producers
from each region shall be placed in
separate lots per class of oil. For each
class of oil, separate drawings shall be
held from a list of all applicants from
Region A and from a list of all
applicants from Region B. If, in any
marketing year, there are no requests for
additional base in a class of oil from
eligible new producers in a region, such
unallocated additional allotment base
shall be issued to an eligible new
producer whose name is selected by
drawing from a list containing the
names of all remaining eligible new
producers from the other region for that
class of oil. The Committee shall
immediately notify each new producer
whose name was drawn and issue that
producer an allotment base in the
appropriate amount. Allotment base
issued to new producers under this
section shall not be transferred for at
least five years following issuance.
(2) * * *
(ii) Class 1 base. With respect to the
issuance of additional Class 1 allotment
base to existing producers for the 2014–
2015 through the 2016–2017 marketing
years, existing producers with less than
5,121 pounds of allotment base as of
October 17, 2012, who request
additional allotment base and who have
the ability to produce additional
quantities of Class 1 spearmint oil, shall
be issued additional allotment base
sufficient to bring them up to a level not
to exceed 5,121 pounds: Provided, That
such additional Class 1 allotment base
shall be allocated to eligible producers
on a pro-rata basis from available
additional Class 1 allotment base:
Provided further, That additional
allotment base shall not be issued to any
person if such additional allotment base
would replace all or part of an allotment
base that such person has previously
transferred to another producer.
Additional allotment base in excess of
the amount needed to bring eligible
producers up to 5,121 pounds of Class
1 allotment base shall be distributed on
a prorated basis among all existing
producers who apply and who have the
ability to produce additional quantities
of spearmint oil.
(iii) Class 3 base. With respect to the
issuance of additional Class 3 allotment
base for existing producers for the 2014–
2015 through the 2017–2018 marketing
years, existing producers with less than
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sroberts on DSK5SPTVN1PROD with PROPOSALS
Federal Register / Vol. 79, No. 87 / Tuesday, May 6, 2014 / Proposed Rules
5,812 pounds of allotment base as of
October 17, 2012, who request
additional allotment base and who have
the ability to produce additional
quantities of Class 3 spearmint oil, shall
be issued additional allotment base
sufficient to bring them up to a level not
to exceed 5,812 pounds: Provided, That
such additional Class 3 allotment base
shall be allocated to eligible producers
on a pro-rata basis from available
additional Class 3 allotment base:
Provided further, That additional
allotment base shall not be issued to any
person if such additional allotment base
would replace all or part of an allotment
base that such person has previously
transferred to another producer.
Additional allotment base in excess of
the amount needed to bring eligible
producers up to 5,812 pounds of Class
3 allotment base shall be distributed on
a prorated basis among all existing
producers who apply and who have the
ability to produce additional quantities
of spearmint oil.
(iv) For each marketing year after
2016–2017 for Class 1 oil and 2017–
2018 for Class 3 oil, each existing
producer of a class of spearmint oil who
requests additional allotment base, and
who has the ability to produce
additional quantities of that class of
spearmint oil, shall be eligible to receive
a share of the additional allotment base
issued for that class of oil. Additional
allotment base issued by the Committee
for a class of oil shall be distributed on
a prorated basis among the eligible
producers for that class of oil. The
Committee shall immediately notify
each producer who is to receive
additional allotment base by issuing that
producer an allotment base in the
appropriate amount. Allotment base
issued to existing producers under this
section shall not be transferred for at
least two years following issuance,
except that additional allotment base
allocated pursuant to paragraph (c)(2)(ii)
and (c)(2)(iii) of this section shall not be
transferred for at least five years
following issuance.
(d) The person receiving additional
allotment base pursuant to this section
shall submit to the Committee evidence
of an ability to produce and sell oil from
such allotment base in the first
marketing year following issuance of
such base.
NUCLEAR REGULATORY
COMMISSION
Dated: April 29, 2014.
Rex A. Barnes,
Associate Administrator, Agricultural
Marketing Service.
Submit comments by June 5,
2014. The NRC will not address any
comments received after this date,
except as discussed in Section I.B of the
SUPPLEMENTARY INFORMATION section of
this document.
[FR Doc. 2014–10132 Filed 5–5–14; 8:45 am]
BILLING CODE P
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18:56 May 05, 2014
Jkt 232001
[NRC–2010–0135]
RIN 3150–AI85
ESBWR Design Certification
Nuclear Regulatory
Commission.
ACTION: Supplemental proposed rule.
AGENCY:
The U.S. Nuclear Regulatory
Commission (NRC) is proposing to
amend its regulations to certify the
Economic Simplified Boiling-Water
Reactor (ESBWR) standard plant design.
The proposed ESBWR design
certification rule was published for
public comment on March 24, 2011. The
NRC is publishing this supplemental
proposed rule to provide an opportunity
for the public to comment on two
matters. The first is proposed changes
related to the analysis methodology
supporting the ESBWR steam dryer
design that were made after the close of
the public comment period for the
proposed ESBWR design certification
rule. The second is the NRC’s proposed
clarification of its intent to treat 50
referenced documents within Revision
10 of the ESBWR design control
document (DCD) as requirements and
matters resolved in subsequent licensing
and enforcement actions for plants
referencing the ESBWR design
certification. In addition, the
supplemental proposed rule clarifies
that the NRC intends to obtain approval
for incorporation by reference from the
Director of the Office of the Federal
Register for the generic DCD and 20
publicly-available documents that are
referenced in the DCD that are intended
by the NRC to be requirements. The
supplemental proposed rule does not
offer an opportunity for public comment
on this clarification of the NRC’s intent.
Finally, the supplemental proposed rule
updates the version of the DCD (from
Revision 9 to Revision 10) which the
NRC proposes to obtain approval for
incorporation by reference from the
Office of the Federal Register. Revision
10 of the DCD was needed to address
the previously described matters. The
applicant for certification of the ESBWR
design is GE-Hitachi Nuclear Energy
(GEH).
SUMMARY:
PO 00000
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Fmt 4702
Sfmt 4702
You may submit comments
by any of the following methods (unless
this document describes a different
method for submitting comments on a
specific subject):
• Federal rulemaking Web site: Go to
https://www.regulations.gov and search
for Docket ID NRC–2010–0135. Address
questions about NRC dockets to Carol
Gallagher; telephone: 301–287–3422;
email: Carol.Gallagher@nrc.gov. For
technical questions contact the
individuals listed in the FOR FURTHER
INFORMATION CONTACT section of this
proposed rule.
• Email comments to:
Rulemaking.Comments@nrc.gov. If you
do not receive an automatic email reply
confirming receipt, then contact us at
301–415–1677.
• Fax comments to: Secretary, U.S.
Nuclear Regulatory Commission at 301–
415–1101.
• Mail comments to: Secretary, U.S.
Nuclear Regulatory Commission,
Washington, DC 20555–0001, ATTN:
Rulemakings and Adjudications Staff.
• Hand deliver comments to: 11555
Rockville Pike, Rockville, Maryland
20852, between 7:30 a.m. and 4:15 p.m.
(Eastern Time) Federal workdays;
telephone: 301–415–1677.
For additional direction on obtaining
information and submitting comments,
see ‘‘Obtaining Information and
Submitting Comments’’ in the
SUPPLEMENTARY INFORMATION section of
this document.
FOR FURTHER INFORMATION CONTACT:
George M. Tartal, telephone: 301–415–
0016, email: George.Tartal@nrc.gov; or
David Misenhimer, telephone: 301–415–
6590, email: David.Misenhimer@
nrc.gov. Both of the Office of New
Reactors, U.S. Nuclear Regulatory
Commission, Washington DC 20555–
0001.
ADDRESSES:
10 CFR Part 52
DATES:
25715
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Obtaining Information and Submitting
Comments
A. Obtaining Information
1. Documents Related To Changes
Associated With the Analysis
Methodology Supporting the ESBWR
Steam Dryer Design
2. 50 Non-Public Documents Which the
NRC Regards As Requirements and Are
Matters Resolved
B. Additional Information on Submitting
Comments
II. Background
III. Discussion
A. ESBWR Steam Dryer Design
1. Correction of Information Related to the
Steam Dryer Design
2. Designation of Revised Steam Dryer
Analysis Methodology as Tier 2*
E:\FR\FM\06MYP1.SGM
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]]>Agencies
[Federal Register Volume 79, Number 87 (Tuesday, May 6, 2014)]
[Proposed Rules]
[Pages 25710-25715]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-10132]
========================================================================
Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
========================================================================
Federal Register / Vol. 79, No. 87 / Tuesday, May 6, 2014 / Proposed
Rules
[[Page 25710]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 985
[Doc. No. AMS-FV-13-0088; FV14-985-2 PR]
Marketing Order Regulating the Handling of Spearmint Oil Produced
in the Far West; Revision of Administrative Rules and Regulations
Governing Issuance of Additional Allotment Base
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This proposed rule invites comments on revisions to the
procedure currently prescribed for issuing additional allotment base
for Class 1 (Scotch) and Class 3 (Native) spearmint oil to new and
existing producers under the Far West spearmint oil marketing order
(order). The order regulates the handling of spearmint oil produced in
the Far West and is administered locally by the Spearmint Oil
Administrative Committee (Committee). This action would: Reduce the
number of new producers that are issued additional allotment bases each
year from three to two, for each class of oil; temporarily change the
method by which additional allotment base is allocated to existing
producers to take into account small production operations; and amend
the requirements for eligibility, retention, and transfer of additional
allotment base issued to new and existing producers. Revising the
procedure for issuing additional allotment base would help ensure that
new and existing spearmint oil producers have sufficient allotment base
to be economically viable in the future.
DATES: Comments must be received by May 21, 2014.
ADDRESSES: Interested persons are invited to submit written comments
concerning this proposed rule. Comments must be sent to the Docket
Clerk, Marketing Order and Agreement Division, Fruit and Vegetable
Program, 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
proposal 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: Manuel Michel or Gary D. Olson,
Northwest Marketing Field Office, Marketing Order and Agreement
Division, Fruit and Vegetable Program, AMS, USDA; Telephone: (503) 326-
2724, Fax: (503) 326-7440, or Email: Manuel.Michel@ams.usda.gov or
GaryD.Olson@ams.usda.gov.
Small businesses may request information on complying with this
regulation by contacting Jeffrey Smutny, Marketing Order and Agreement
Division, Fruit and Vegetable Program, AMS, USDA, 1400 Independence
Avenue SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-
2491, Fax: (202) 720-8938, or Email: Jeffrey.Smutny@ams.usda.gov.
SUPPLEMENTARY INFORMATION: This proposal 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 proposed rule
in conformance with Executive Orders 12866, 13563, and 13175.
This proposal has been reviewed under Executive Order 12988, Civil
Justice Reform. This proposed rule is not intended to have retroactive
effect.
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.
This proposal invites comments on revisions to the procedure
currently prescribed for issuing additional allotment base for Class 1
(Scotch) and Class 3 (Native) spearmint oil to new and existing
producers under the order's volume control provisions. This proposal
would: (1) Reduce the number of allocations of additional allotment
base issued to new producers each year from three to two, for each
class of oil; (2) temporarily change the method by which additional
allotment base is issued to existing producers in order to take into
account producers whose total allotment base is below the size of the
minimum economic enterprise (MEE) required to produce each class of
spearmint oil; (3) provide that additional allotment base issued to
existing producers under the revised procedure could not be used to
replace allotment base that has been previously transferred away; and
(4) provide that additional allotment base issued under the revised
procedure could not be transferred to another producer for at least
five years following issuance. This action was recommended unanimously
by the Committee at a meeting on November 6, 2013.
Under the order, volume control measures are authorized to regulate
the marketing of spearmint oil. Regulation is currently effectuated
through the issuance of allotment bases to producers, the establishment
of annual salable quantities and allotment percentages, and the reserve
pooling of excess production. Allotment base is each producer's
quantified share of the spearmint oil market based on a
[[Page 25711]]
statistical representation of past spearmint oil production, with
accommodation for reasonable and normal adjustments to such base. The
order's provisions allow for the regulation of spearmint oil volume
available to the market. The objective of regulation is to establish
orderly marketing conditions for spearmint oil and to ensure that there
is sufficient spearmint oil supply available to meet market
requirements. Since the program's inception, volume regulation has been
instrumental in promoting market and price stability within the
industry.
The order contains provisions to ensure that there is orderly
market expansion and that new producers are able to produce and market
spearmint oil. Section 985.53(d)(1) of the order requires the Committee
to annually make additional allotment bases available for each class of
oil in the amount of no more than 1 percent of the total allotment base
for that class of oil. Fifty percent of these additional allotment
bases shall be made available to new producers and 50 percent made
available to existing producers.
Section 985.53(d)(3) requires the Committee, with the approval of
the Secretary, to establish rules and regulations to be used for
determining the distribution of additional allotment bases. In 1982,
these rules and regulations were established and have been subsequently
revised on several occasions, most recently in 2003. Each time a
revision is made, the Committee considers several important factors
which include: the size of the MEE required for spearmint oil
production, the applicant's ability to produce spearmint oil, the area
where the spearmint oil will be produced, and other economic and
marketing factors that have a direct impact on spearmint oil producers.
The Committee reviews regularly, and updates as needed, the size of the
MEE required for spearmint oil production. Under the order, MEE is the
minimum size of production operation that the Committee has determined
to be economically viable for each class of spearmint oil. Between 1982
and 1997, the Committee revised the MEE for Scotch spearmint oil
production three times and Native spearmint oil production four times.
As a result, the MEE increased from 1,200 pounds to 3,000 pounds for
Scotch spearmint oil, and from 1,800 pounds to 3,400 pounds for Native
spearmint oil.
Section 985.153(c)(1) of the order's administrative rules and
regulations prescribes the method by which additional allotment base is
issued to new producers. In addition, Sec. 985.153(c)(2) prescribes
the procedure by which additional allotment base is issued to existing
producers. Lastly, Sec. 985.153(d) specifies certain requirements for
spearmint oil producers who are issued additional allotment base
pursuant to Sec. 985.153(c)(1) and (c)(2).
The Committee met on November 6, 2013, to consider the current
procedures for issuing additional allotment base to new and existing
producers and to make recommendations regarding the revision of those
procedures. As required by Sec. 985.153(c)(1)(ii), the Committee first
considered the size of the MEE required to produce each class of
spearmint oil. The Committee determined that the MEE levels for both
classes of spearmint oil were no longer representative and needed to be
revised. The Committee recognized that, as production and cultural
practices for spearmint oil have continued to change and production
costs per acre have increased, the Committee's previously established
MEE levels are too low and should be revised. As such, the Committee
concluded that the MEE thresholds had increased to 5,121 pounds for
Scotch spearmint oil and 5,812 pounds for Native spearmint oil.
As a result of the Committee's determination that the MEE
thresholds have increased, and given the quantity of additional
allotment base available to new producers each year (\1/2\ of 1 percent
of the total allotment base for each class of oil), the additional
allotment base issued each year is only enough for two new producers,
instead of three, for each class of oil.
The Committee's initial calculation is that the total allotment
base for Scotch spearmint oil during the 2014-2015 marketing year will
be approximately 2,089,146 pounds. One half of one percent of this
amount would be 10,445 pounds. With the MEE for Scotch spearmint oil
determined to be 5,121 pounds, issuing allotment base to two new
producers would require 10,242 pounds, which is within the amount of
additional allotment base that would be available for the year.
Likewise, the Committee's initial calculation is that the total
allotment base for Native spearmint oil during the 2014-2015 marketing
year will be approximately 2,371,350 pounds. One half of one percent of
this amount would be 11,856 pounds. With the MEE for Native spearmint
oil determined to be 5,812 pounds, issuing allotment base to two new
producers would require 11,624 pounds, which is within the amount of
additional allotment base that would be available for the year.
Based on the above information, the Committee unanimously
recommended reducing the number of new producers that would be issued
additional allotment base each year from three to two for each class of
oil. The Committee also recommended that the additional allotment base
issued to new producers not be transferrable for at least five years
following issuance. The current retention period prior to
transferability is two years. New producers issued additional allotment
base under this proposal would continue to be required to submit
evidence of an ability to produce and sell oil from such allotment base
in the first marketing year following issuance of such base.
The Committee also gave consideration to existing producers with
regards to the size of the MEE required to produce spearmint oil and
the allocation of additional allotment base. After analyzing the
Committee's records, the Committee found that some existing producers
hold allotment bases that are below the revised MEE levels. As a
result, the Committee unanimously recommended that the additional
allotment base that is made available each year to existing producers
be temporarily allocated first to those eligible producers who hold
allotment bases that are less than the MEE threshold in order to bring
their total up to that level.
Under the proposal, existing Scotch spearmint oil producers whose
allotment bases are less than 5,121 pounds as of October 17, 2012, who
apply and who have the ability to produce additional quantities of
spearmint oil, would be issued sufficient additional allotment base to
bring them up to the MEE threshold over a three-year period extending
through the 2016-2017 marketing year. In addition, existing Native
spearmint oil producers who hold allotment bases of less than 5,812
pounds as of October 17, 2012, who apply and who have the ability to
produce additional quantities of spearmint oil, would be issued
sufficient additional allotment base to bring them up to the MEE
threshold over a four-year period extending through the 2017-2018
marketing year.
The Committee estimates there would be 21 producers of Scotch
spearmint oil and 30 producers of Native spearmint oil eligible for
additional allotment base under the proposal. It is expected that
eligible existing producers of both Scotch and Native spearmint oil
would apply for the full amount of additional allotment base made
available to them. If there is any unallocated additional allotment
base remaining for either Scotch spearmint oil during the 2016-
[[Page 25712]]
2017 marketing year, or Native spearmint oil during the 2017-2018
marketing year, such amount would be distributed on a prorated basis
among all existing producers of each respective class of spearmint oil.
The Committee also recommended that additional allotment base
issued to producers under the proposed revised procedure should not be
used to replace allotment base that has been previously transferred
away by that producer and that additional allotment base issued under
the revised procedure not be transferrable for at least five years
following issuance.
Since the establishment of the order, one of the Committee's
primary objectives has been to help ensure that all spearmint oil
producers are economically viable, as evidenced by holding allotment
bases that are above the minimum economic threshold required for
spearmint oil production. The Committee has worked to meet this
objective by regularly determining the size of the MEE and issuing
additional allotment base accordingly. Specifically, the Committee has
raised the quantity of allotment base issued to new producers, and
increased the allotment bases of those existing producers who hold
allotment bases that are below the levels that comprise the minimum
economic threshold required for spearmint oil production.
Another Committee objective has been to issue as many additional
allotment bases as possible to new producers, at levels considered
economically viable to each recipient. However, since the order limits
the amount of additional allotment base issued to new producers, and
because the size of the MEE required for spearmint oil production must
be considered, the Committee has found it necessary to limit the number
of new producers that are issued additional allotment base each year.
Therefore, given the circumstances, the Committee believes the
combination of these actions provides the best method available for
optimizing the number of new producers that enter and remain in
business, and also helps assure that there will continue to be a broad
base of spearmint oil production.
The procedure for issuing additional allotment base to new and
existing producers has been modified several times since the inception
of the order. Between 1982 and 1991, the entire Far West spearmint oil
production area was treated as a single region for the purpose of
issuing additional allotment base to new producers. The Committee would
determine the size and number of economic enterprises of additional
allotment base for each class of spearmint oil to be made available to
new producers. The additional allotment bases were then issued to new
producers drawn from the lot of eligible individuals who had requested
additional allotment base.
In 1991, the order's administrative rules and regulations were
modified through the rulemaking process to divide the production area
into four regions for purposes of issuing additional allotment base to
new producers. An equal number of allotment bases were issued to new
producers in each region based on the amount of additional allotment
base available and the MEE determined by the Committee. Based on the
Committee's determinations, this effectively allowed one new producer
annually from each of the four regions to be issued additional
allotment base, for each class of spearmint oil.
Again in 1997, rulemaking action was taken to reorganize and reduce
the number of regions within the Far West production area from four to
three. This revision had the effect of reducing the number of new
producers that were issued additional allotment bases each year from
four to three for each class of spearmint oil. The Committee
recommended the revision with the purpose of distributing additional
allotment bases within the production area, and to increase the size of
allotment bases issued to new producers to correspond to the size of
the MEE. The Committee had determined that the size of the MEE for
spearmint oil production had increased to a point where there was
insufficient additional allotment base to issue economically sufficient
quantities of base to new producers in all four regions. By
reorganizing and reducing the number of regions to three, there was
adequate additional allotment base to issue base to three new producers
of each class of spearmint oil. In reaching its recommendation, the
Committee weighed the importance of issuing as many additional
allotment bases as possible against the need to issue such bases at
levels considered economically viable to each recipient.
In 2000, the three regions of the Far West production area were
further reduced to two regions through the rulemaking process. However,
the number of new producers issued additional allotment bases each year
was maintained at three for each class of spearmint oil. As before, the
Committee recommended the revision with the purpose of distributing
additional allotment bases to new spearmint oil producers throughout
the production area.
The proposal to reduce the number of new producers issued
additional allotment base each year from three to two for each class of
spearmint oil is consistent with previous rulemaking. The Committee's
purpose, then and now, is to ensure that a maximum number of eligible
new producers are issued additional allotment bases each year at levels
that are economically viable to produce each class of spearmint oil.
Consistent with actions taken in the past, the Committee made the
recommendation after carefully considering information available from
its management records, Federal and state government sources, and
industry participants. The Committee also considered the size of the
MEE required for the production of each class of spearmint oil,
historical statistics relating to the locations of the producers
applying for the annual additional allotment base, and other factors,
such as number of producers in the regulated production area and the
amount of allotment base held by such producers. Based on its review,
the Committee believes that the recommended action is the most
effective option available in order to continue fulfilling the order's
objectives.
Initial Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA) (5 U.S.C. 601-612), 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
businesses subject to such actions in order that small businesses will
not be unduly or disproportionately burdened. Marketing orders issued
pursuant to the Act, and 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 eight spearmint oil handlers subject to regulation under
the order. In addition, there are approximately 36 producers of Scotch
spearmint oil and approximately 91 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
[[Page 25713]]
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 manufacture and trade of essential oils
and the products of essential oils in the international market. In
addition, the Committee estimates that 19 of the 36 Scotch spearmint
oil producers and 29 of the 91 Native spearmint oil producers could be
classified as small entities under the SBA definition. Thus, many
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 purposes of weed, insect, and
disease control. To remain economically viable with the added costs
associated with spearmint oil production, a majority of 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 from market
fluctuations. Such small producers generally need to market their
entire annual allotment 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 market and price provides small
producing entities with the ability to maintain sufficient cash flow
and to meet annual expenses. Thus, the market and price stability
provided by the order potentially benefit small producers more than
such provisions benefit large producers.
This proposal would revise the procedure for issuing additional
allotment base by reducing the number of additional allotment bases
issued to new producers from three to two, for each class of spearmint
oil. In addition, this action would increase the required retention
period prior to transferability of additional allotment base issued to
new producers from two years to five years following issuance.
This proposal would also temporarily change the procedures for the
allocation of additional allotment base by class to take into account
existing producers that are below the MEE threshold. This revision is
intended to help existing small spearmint oil producers by increasing
their individual allotment bases to a level that approximates the MEE
required for spearmint oil production. The action would help ensure
that small existing spearmint oil producers have sufficient allotment
base to remain economically viable in the future. Also, this proposal
would provide that additional allotment base issued to existing small
producers could not be used to replace allotment base which has been
previously transferred away. Finally, this action would provide that
additional allotment base issued under the revised procedure could not
be transferred for at least five years following issuance. The proposed
procedure revising the method by which additional allotment base is
allocated to existing producers would be in effect temporarily through
May 31, 2017, for Scotch spearmint oil, and May 31, 2018, for Native
spearmint oil, or until all producers who are eligible and apply have
received enough allotment base to bring them up to the respective MEE
level for each class of oil. Authority for this action is provided in
Sec. 985.53(d)(3) of the order.
At the meeting on November 6, 2013, the Committee discussed the
impact of the proposed revisions on handlers and producers in terms of
costs and returns. Under the order, the Committee is responsible for
determining the size of the MEE required to produce each class of
spearmint oil. The Committee determined the MEE size for the 2014-2015
and subsequent marketing years to be 5,121 pounds for Scotch spearmint
oil and 5,812 pounds for Native spearmint oil. Taking this information
into consideration, the Committee calculated that the number of new
producers issued additional allotment bases each year would need to be
reduced from three to two for each class of oil. While this action
would reduce the number of new producers issued additional allotment
bases each year, each new producer would have a larger initial
allotment base, thereby enhancing their long term economic viability in
the spearmint oil industry.
Additionally, the Committee estimates there are 21 producers of
Scotch spearmint oil whose allotment bases are below the MEE threshold
and it would take a total of 21,913 pounds of additional allotment base
to raise these producers' allotment bases up to the Scotch spearmint
oil MEE threshold. Likewise, the Committee estimates there are also 30
producers of Native spearmint oil whose allotment bases are below the
MEE level, and it would take a total of 43,456 pounds of additional
allotment base to raise these producers' allotment bases to the size of
the MEE required to produce Native spearmint oil.
While the amount of additional allotment base necessary to bring
all spearmint oil producers' allotment bases up to the MEE threshold is
a fraction of the total allotment base, the benefits of the proposed
revision would be significant to these small producers, because it
would improve their economic viability into the future. Without the
revision, small spearmint oil producers are at a greater risk of not
being able to continue to produce spearmint oil. Therefore, the
benefits of this proposed rule are expected to be greater for small
producers than for larger entities.
The Committee discussed several alternatives to the recommendations
contained in this proposed rule, including not making any changes to
the procedures as currently prescribed in the order. However, the
Committee determined that not taking the MEE threshold into
consideration when issuing additional base would have negative impacts
primarily affecting new and existing small producers. The Committee
concluded that the most effective option was to revise the procedure
for issuing additional allotment base in order to improve the economic
viability of new and existing producers whose allotment bases are below
the MEE threshold.
The Committee also considered alternative MEE thresholds before
deciding on the levels that were most representative of the production
economics for each class of spearmint oil. The Committee considers the
size of the MEE for the production of each class of spearmint oil is
accurate and appropriate given the information available.
In addition, the Committee considered the length of time that new
and existing producers should be expected to hold onto additional
allotment base issued under the proposed revised procedure before such
allotment base could be transferred. The Committee considered other
retention
[[Page 25714]]
periods other than the proposed five years, including maintaining the
current two year retention period. However, it concluded that a five
year retention requirement prior to transfer of additional allotment
base issued under the proposed revised procedure was a sufficient
period for new and existing producers to demonstrate viability in
spearmint oil production and should not present an undue hardship on
the producers being issued the additional allotment base.
In its deliberations, the Committee considered all available
information, including its determination of the size of the MEE
required for spearmint oil production, historical statistics relating
to the locations of the producers applying for the annual additional
allotment base, and other factors such as the number of producers in
the regulated production area and the amount of allotment base held by
such producers. Based on those determinations, the full eight-member
Committee unanimously recommended revising the procedure for issuing
additional allotment base to new and existing spearmint oil producers,
for each class of oil, as proposed herein.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35), the order's information collection requirements is
currently approved by the Office of Management and Budget (OMB) and
assigned OMB No. 0581-0178, Generic Vegetable and Specialty Crops. Upon
publication of the final rule, we will submit a Justification of Change
to make minor modifications changing the appearance of two forms and
adjusting the burden, accordingly.
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.
USDA has not identified any relevant Federal rules that duplicate,
overlap or conflict with this proposed rule.
In addition, the Committee meetings were widely publicized
throughout the spearmint oil industry and all interested persons were
invited to attend the meetings and participate in Committee
deliberations on all issues. Like all Committee meetings, the March 6,
2013, and the November 6, 2013, meetings were public meetings and all
entities, both large and small, were able to express views on this
issue. Finally, interested persons are invited to submit comments on
this proposed rule, including 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 Jeffrey Smutny at the
previously mentioned address in the FOR FURTHER INFORMATION CONTACT
section.
A 15-day comment period is provided to allow interested persons to
respond to this proposal. Fifteen days is deemed appropriate because:
(1) The 2014-2015 fiscal period begins on June 1, 2014; (2) affected
spearmint oil producers need to be informed as soon as possible of any
changes in base allotment allocation in order to plan their plantings
accordingly; and (3) spearmint oil producers are aware of this action,
which was unanimously recommended by the Committee at a public meeting
and is similar to previous actions recommended by the Committee and
approved by the Secretary.
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
proposed to be 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. 985.153, redesignate and revise paragraphs (c)(1)(ii) as
(c)(1)(iii) and (c)(2)(ii) as (c)(2)(iv), add new paragraphs
(c)(1)(ii), (c)(2)(ii) and (c)(2)(iii), and revise paragraph (d) to
read as follows:
Sec. 985.153 Issuance of additional allotment base to new and
existing producers.
* * * * *
(c) * * *
(1) * * *
(ii) The Committee shall review all requests from new producers for
additional allotment base made available pursuant to Sec.
985.53(d)(1).
(iii) Each year, the Committee shall determine the size of the
minimum economic enterprise required to produce each class of oil. The
Committee shall thereafter calculate the number of new producers who
will receive allotment base under this section for each class of oil.
The Committee shall include that information in its announcements to
new producers in each region informing them when to submit requests for
allotment base. The Committee shall determine whether the new producers
requesting additional base have the ability to produce spearmint oil.
The names of all eligible new producers from each region shall be
placed in separate lots per class of oil. For each class of oil,
separate drawings shall be held from a list of all applicants from
Region A and from a list of all applicants from Region B. If, in any
marketing year, there are no requests for additional base in a class of
oil from eligible new producers in a region, such unallocated
additional allotment base shall be issued to an eligible new producer
whose name is selected by drawing from a list containing the names of
all remaining eligible new producers from the other region for that
class of oil. The Committee shall immediately notify each new producer
whose name was drawn and issue that producer an allotment base in the
appropriate amount. Allotment base issued to new producers under this
section shall not be transferred for at least five years following
issuance.
(2) * * *
(ii) Class 1 base. With respect to the issuance of additional Class
1 allotment base to existing producers for the 2014-2015 through the
2016-2017 marketing years, existing producers with less than 5,121
pounds of allotment base as of October 17, 2012, who request additional
allotment base and who have the ability to produce additional
quantities of Class 1 spearmint oil, shall be issued additional
allotment base sufficient to bring them up to a level not to exceed
5,121 pounds: Provided, That such additional Class 1 allotment base
shall be allocated to eligible producers on a pro-rata basis from
available additional Class 1 allotment base: Provided further, That
additional allotment base shall not be issued to any person if such
additional allotment base would replace all or part of an allotment
base that such person has previously transferred to another producer.
Additional allotment base in excess of the amount needed to bring
eligible producers up to 5,121 pounds of Class 1 allotment base shall
be distributed on a prorated basis among all existing producers who
apply and who have the ability to produce additional quantities of
spearmint oil.
(iii) Class 3 base. With respect to the issuance of additional
Class 3 allotment base for existing producers for the 2014-2015 through
the 2017-2018 marketing years, existing producers with less than
[[Page 25715]]
5,812 pounds of allotment base as of October 17, 2012, who request
additional allotment base and who have the ability to produce
additional quantities of Class 3 spearmint oil, shall be issued
additional allotment base sufficient to bring them up to a level not to
exceed 5,812 pounds: Provided, That such additional Class 3 allotment
base shall be allocated to eligible producers on a pro-rata basis from
available additional Class 3 allotment base: Provided further, That
additional allotment base shall not be issued to any person if such
additional allotment base would replace all or part of an allotment
base that such person has previously transferred to another producer.
Additional allotment base in excess of the amount needed to bring
eligible producers up to 5,812 pounds of Class 3 allotment base shall
be distributed on a prorated basis among all existing producers who
apply and who have the ability to produce additional quantities of
spearmint oil.
(iv) For each marketing year after 2016-2017 for Class 1 oil and
2017-2018 for Class 3 oil, each existing producer of a class of
spearmint oil who requests additional allotment base, and who has the
ability to produce additional quantities of that class of spearmint
oil, shall be eligible to receive a share of the additional allotment
base issued for that class of oil. Additional allotment base issued by
the Committee for a class of oil shall be distributed on a prorated
basis among the eligible producers for that class of oil. The Committee
shall immediately notify each producer who is to receive additional
allotment base by issuing that producer an allotment base in the
appropriate amount. Allotment base issued to existing producers under
this section shall not be transferred for at least two years following
issuance, except that additional allotment base allocated pursuant to
paragraph (c)(2)(ii) and (c)(2)(iii) of this section shall not be
transferred for at least five years following issuance.
(d) The person receiving additional allotment base pursuant to this
section shall submit to the Committee evidence of an ability to produce
and sell oil from such allotment base in the first marketing year
following issuance of such base.
Dated: April 29, 2014.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2014-10132 Filed 5-5-14; 8:45 am]
BILLING CODE P
