Marketing Order Regulating the Handling of Spearmint Oil Produced in the Far West; Revision of the Salable Quantity and Allotment Percentage for Class 1 (Scotch) Spearmint Oil for the 2014-2015 Marketing Year, 64657-64661 [2014-25646]

Download as PDF 64657 Rules and Regulations Federal Register Vol. 79, No. 211 Friday, October 31, 2014 This section of the FEDERAL REGISTER contains regulatory documents having general applicability and legal effect, most of which are keyed to and codified in the Code of Federal Regulations, which is published under 50 titles pursuant to 44 U.S.C. 1510. The Code of Federal Regulations is sold by the Superintendent of Documents. Prices of new books are listed in the first FEDERAL REGISTER issue of each week. DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Part 985 [Doc. No. AMS–FV–13–0087; FV14–985–1A IR] Marketing Order Regulating the Handling of Spearmint Oil Produced in the Far West; Revision of the Salable Quantity and Allotment Percentage for Class 1 (Scotch) Spearmint Oil for the 2014–2015 Marketing Year Agricultural Marketing Service, USDA. ACTION: Interim rule with request for comments. AGENCY: This interim rule revises the quantity of Class 1 (Scotch) spearmint oil that handlers may purchase from, or handle on behalf of, producers during the 2014–2015 marketing year under the Far West spearmint oil marketing order. This rule increases the Scotch spearmint oil salable quantity from 1,149,030 pounds to 1,984,423 pounds and the allotment percentage from 55 percent to 95 percent. The marketing order regulates the handling of spearmint oil produced in the Far West and is administered locally by the Spearmint Oil Administrative Committee (Committee). The Committee recommended this rule for the purpose of maintaining orderly marketing conditions in the Far West spearmint oil market. DATES: Effective October 31, 2014 and applicable to the 2014–2015 marketing year; comments received by December 30, 2014 will be considered prior to issuance of a final rule. ADDRESSES: Interested persons are invited to submit written comments concerning this rule. Comments must be sent to the Docket Clerk, Marketing Order and Agreement Division, Fruit and Vegetable Program, AMS, USDA, rmajette on DSK2VPTVN1PROD with RULES SUMMARY: VerDate Sep<11>2014 14:37 Oct 30, 2014 Jkt 235001 1400 Independence Avenue SW., STOP 0237, Washington, DC 20250–0237; Fax: (202) 720–8938; or Internet: http:// 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: http://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, Senior Marketing Specialist, or Gary Olson, Regional Director, 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: Barry.Broadbent@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 interim 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 Orders 12866, 13563, and 13175. 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 PO 00000 Frm 00001 Fmt 4700 Sfmt 4700 Scotch spearmint oil produced in the Far West that handlers may purchase from, or handle on behalf of, producers during the 2014–2015 marketing year, which began on June 1, 2014, and ends on May 31, 2015. 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 rule revises the quantity of Scotch spearmint oil that handlers may purchase from, or handle on behalf of, producers during the 2014–2015 marketing year under the Far West spearmint oil marketing order. This rule increases the Scotch spearmint oil salable quantity from 1,149,030 pounds to 1,984,423 pounds and the allotment percentage from 55 percent to 95 percent. Under the volume regulation provisions of the order, the Committee meets each year to adopt a marketing policy for the ensuing year. When the Committee’s marketing policy considerations indicate a need for limiting the quantity of spearmint oil available to the market to establish or maintain orderly marketing conditions, the Committee submits a recommendation to the Secretary for volume regulation. Volume regulation under the order is effectuated through the establishment of a salable quantity and allotment percentage applicable to each class of spearmint oil handled in the production area during a marketing year. The salable quantity is the total quantity of each class of oil that handlers may purchase from, or handle on behalf of, producers during a given marketing year. The allotment percentage for each E:\FR\FM\31OCR1.SGM 31OCR1 rmajette on DSK2VPTVN1PROD with RULES 64658 Federal Register / Vol. 79, No. 211 / Friday, October 31, 2014 / Rules and Regulations class of oil is derived by dividing the salable quantity by the total industry allotment base for that same class of oil. The total industry allotment base is the aggregate of all allotment base held individually by producers. Producer allotment base is the quantity of each class of spearmint oil that the Committee has determined is representative of a producer’s spearmint oil production. Each producer is allotted a pro rata share of the total salable quantity of each class of spearmint oil each marketing year. Each producer’s annual allotment is determined by applying the allotment percentage to the producer’s individual allotment base for each applicable class of spearmint oil. The full Committee met on November 6, 2013, to consider its marketing policy for the ensuing year. At that meeting, the Committee determined that marketing conditions indicated a need for volume regulation of both classes of spearmint oil for the 2014–2015 marketing year. The Committee recommended salable quantities of 1,149,030 pounds and 1,090,821 pounds, and allotment percentages of 55 percent and 46 percent, respectively, for Scotch and Native spearmint oil. A proposed rule to that effect was published in the Federal Register on March 14, 2014 (79 FR 14441). Comments on the proposed rule were solicited from interested persons until March 31, 2014. No comments were received. Subsequently, a final rule establishing the salable quantities and allotment percentages for Scotch and Native spearmint oil for the 2014–2015 marketing year was published in the Federal Register on May 8, 2014 (79 FR 26359). Pursuant to authority contained in §§ 985.50, 985.51, and 985.52 of the order, the full eight member Committee met again on September 11, 2014, to consider pertinent market information on the current supply, demand, and price of spearmint oil. After some deliberation, the Committee recommended increasing the 2014–2015 marketing year Scotch spearmint oil salable quantity from 1,149,030 pounds to 1,984,423 pounds and the allotment percentage from 55 percent to 95 percent. The motion to increase the salable quantity and allotment percentage for Scotch passed with six members in favor and one member opposed. The public member, while present, abstained from the vote. The member opposed to the motion agreed with the other members of the Committee that an increase in the salable quantity and allotment percentage was necessary for the industry to respond to increasing VerDate Sep<11>2014 14:37 Oct 30, 2014 Jkt 235001 demand. However, he cast his vote against the motion based on his opinion that an 835,393 pound increase in the salable quantity, and a corresponding 40 percent increase in the allotment percentage, was too large of an increase this early in the marketing year. The member felt that it would be better to be conservative at this point in the marketing year, given that the Committee had the ability to further increase the volume control provisions later if marketing conditions warranted. Thus, taking into consideration the following discussion, this rule makes additional amounts of Scotch spearmint oil available to the market by increasing the salable quantity and allotment percentage. This rule increases the 2014–2015 marketing year Scotch spearmint oil salable quantity from 1,149,030 pounds to 1,984,423 pounds and raises the allotment percentage from 55 percent to 95 percent. Such additional oil may come from excess Scotch spearmint oil produced in the current marketing year or by releasing Scotch spearmint oil held in the reserve pool. As of May 31, 2014, the Committee records show that the Scotch spearmint oil reserve pool contained just 551 pounds of oil. In addition, the Committee estimates that producers have produced 222,544 pounds of Scotch spearmint oil production in excess of their annual allotments for the 2014–2015 marketing year. The increase in the salable quantity as a result of this rule represents an additional 835,393 pounds of Scotch spearmint oil being made available to the market. However, due to the limited amount of Scotch spearmint oil held by individual producers (oil produced in the current year or held in reserve from past years production), the Committee expects that only 211,877 pounds of additional Scotch spearmint oil will actually be made available to the spearmint oil market. The relatively high salable quantity resulting from this action, as compared to the actual quantity of spearmint oil that will be made available to the market, is necessary to ensure that those producers that have Scotch spearmint oil in inventory have enough annual allotment to be able to market that oil. Producers that do not have additional Scotch spearmint oil in inventory (either oil held in the reserve pool or from excess production in the current year) will not be able to utilize the additional annual allotment issued to them as a result of this action and the additional annual allotment will go unused. The 2014–2015 marketing year began on June 1, 2014, with an estimated carry-in of 7,064 pounds of salable PO 00000 Frm 00002 Fmt 4700 Sfmt 4700 Scotch spearmint oil. When the estimated carry-in is added to the 2014– 2015 salable quantity of 1,149,030 pounds initially established for Scotch spearmint oil, the result is a total available supply for the 2014–2015 marketing year of 1,156,094 pounds. However, the Committee estimates that some Scotch spearmint oil producers do not have sufficient production from the 2014 crop to fill approximately 190,174 pounds of their respective 2014–2015 marketing year annual allotment. As such, the Committee estimates that the total actual supply of Scotch spearmint oil available to the market prior to the issuance of this rule is 965,920 pounds, not the 1,156,094 pounds as originally estimated. Of this amount, the Committee estimates that 927,675 pounds of Scotch spearmint oil have already been sold or have been committed to be sold as of the September 11, 2014, meeting date. This leaves just 38,245 pounds of uncommitted salable Scotch spearmint oil actually available for sale for the remainder of the 2014–2015 marketing year. The Committee believes that maintaining such a small amount of salable Scotch spearmint oil would be detrimental to the industry. In making the recommendation to increase the salable quantity and allotment percentage of Scotch spearmint oil, the Committee considered all currently available information on the price, supply, and demand of spearmint oil. The Committee also considered reports and other information from handlers and producers in attendance at the meeting. Lastly, the Committee manager presented information and reports that were provided to the Committee staff by handlers and producers who were not in attendance at the September 11, 2014, meeting. This action increases the 2014–2015 marketing year Scotch spearmint oil salable quantity by 835,393 pounds, to a total of 1,984,423 pounds. However, as mentioned previously, the net effect of the increase will be much less than the calculated increase due to the amount of actual oil individual producers have available to market from the current year’s excess production and from reserve pool inventory. The Committee estimates that this action will actually make an additional 211,877 pounds of Scotch spearmint oil available to the market. That amount, combined with the 38,245 pounds of salable Scotch spearmint oil currently available, will make a total of 250,122 pounds that may be marketed through the remainder of the marketing year. The total supply of Scotch spearmint oil that is anticipated E:\FR\FM\31OCR1.SGM 31OCR1 rmajette on DSK2VPTVN1PROD with RULES Federal Register / Vol. 79, No. 211 / Friday, October 31, 2014 / Rules and Regulations to be available to the market will be increased to 1,177,797 pounds. Actual sales of Scotch spearmint oil for the 2013–2014 marketing year totaled 1,065,725 pounds. The Committee estimates that this action will completely deplete reserve pool stocks of Scotch spearmint oil during the course of the 2014–2015 marketing year. In addition, the Committee estimates that all but 11,218 pounds of the current year’s Scotch spearmint oil production will be available to enter the market. While these inventory levels are low, the Committee believes that trying to hold any Scotch spearmint oil in reserve under the current market conditions could result in the market experiencing a shortage of Scotch spearmint oil during the course of the 2014–2015 marketing year. Further, the Committee expects the Scotch spearmint oil industry to respond to the current market conditions with increased production in the coming years, and that Scotch spearmint oil inventory levels will quickly return to normal levels. When the original 2014–2015 marketing policy statement was drafted, handlers estimated the demand for Scotch spearmint oil for the 2014–2015 marketing year to be 1,000,000 pounds. The Committee’s initial recommendation for the establishment of the Scotch spearmint oil salable quantity and allotment percentage for the 2014–2015 marketing year was based on that estimate and did not anticipate the increase in demand for Scotch spearmint oil that the market is currently experiencing. Handlers now estimate that Scotch spearmint oil demand for the 2014–2015 marketing year could be as much as 1,100,000 to 1,200,000 pounds. As such, the Committee believes that the supply of Scotch spearmint oil available to the market under the initially established salable quantity and allotment percentage is insufficient to satisfy the current level of demand for oil at reasonable price levels. The Committee further believes that the increase in the salable quantity and allotment percentage effectuated by this action is vital to ensuring an adequate supply of Scotch spearmint oil is available to the market moving forward. As previously stated, this action will make nearly all of the Scotch spearmint oil held by the industry available to the market. However, to achieve that desired net effect under the current supply conditions in the industry, it is necessary for the salable quantity and allotment percentage established under the volume regulation provisions of the VerDate Sep<11>2014 14:37 Oct 30, 2014 Jkt 235001 order to be set at historically high levels. The Committee records show that very few producers hold Scotch spearmint oil in reserve. In addition, not every producer produced Scotch spearmint oil in excess of his/her annual allotment. Given the process by which volume regulation is effectuated under the order, those producers with large amounts of excess Scotch spearmint oil production are only able to market their entire inventory of Scotch spearmint oil when the allotment percentage is set very high. Likewise, producers that do not have excess Scotch spearmint oil production from the current year, or reserve oil from previous years, will not have any Scotch spearmint oil inventory to market, regardless of the level of increase in the allotment percentage. As such, the Committee expects that establishing a high salable quantity and allotment percentage for Scotch spearmint oil will translate into a large amount of the increased salable quantity going unused, as a number of producers have little or no Scotch spearmint oil available to sell. As an example, assume Producer A has 2,000 pounds of Scotch spearmint oil allotment base. In addition, assume that during the 2014–2015 marketing year Producer A produced 1,900 pounds of Scotch spearmint oil. Producer A currently holds no Scotch spearmint oil in reserve from production in prior years. Given that the initial 2014–2015 marketing year allotment percentage was established at 55 percent, Producer A would be able to market 1,100 pounds of the current year production (55 percent allotment percentage × 2,000 pounds of allotment base), leaving the producer with 800 pounds of excess production that was initially not available to market. Without an increase in the allotment percentage, the producer would not be able to market any of the 800 pounds of excess oil produced and the oil would be placed in the reserve pool for marketing in subsequent years. For Producer A to market all 1,900 pounds of his/her current year Scotch spearmint oil production, the allotment percentage would need to be increased by 40 percent to a total of 95 percent (95 percent × 2,000 pounds = 1,900 pounds). An increase in the allotment percentage of anything less than 40 percent would fail to release all of the Scotch spearmint oil that the producer produced in the current year. In contrast, assume that another producer, Producer B, likewise has 2,000 pounds of Scotch spearmint oil allotment base, but produced just 1,100 pounds of Scotch spearmint oil during the 2014–2015 marketing year. Producer PO 00000 Frm 00003 Fmt 4700 Sfmt 4700 64659 B also has no oil held in reserve. As in the first case, Producer B would be able to market all of his/her current year production under the initial allotment percentage of 55 percent. However, a subsequent increase in the allotment percentage of 40 percent would have no impact on Producer B, as the producer has no excess Scotch spearmint oil production or reserve pool oil available to deliver to the market. As a result, the 800 pounds of additional annual allotment allocated to Producer B after a 40 percent increase in the allotment percentage would go unfilled. The Committee estimates that a 40 percent increase in the salable quantity and allotment percentage is required to make all of the Scotch spearmint oil reserve pool, and most of the 2014 crop year excess Scotch spearmint oil production, available to the market. As mentioned previously, the Committee estimates that producers hold just 551 pounds of Scotch spearmint oil in the reserve pool that could enter the market under the increase. As such, the Committee believes that the majority of the Scotch spearmint oil that may be released to the market as a result of this action will come from the estimated 222,544 pounds of 2014 crop year production that is in excess of the producer’s annual allotments. The Committee expects that all but approximately 11,218 pounds of Scotch spearmint oil will be available after the 40 percent increase in salable quantity and allotment percentage. By the Committee’s calculation, the salable quantity would need to be increased by 5,431,052 pounds and the allotment percentage increased by 260 percent for the last 11,218 pounds of the Scotch spearmint oil to be released to the market under the volume control provisions of the order. It is anticipated that the 11,218 pounds of Scotch spearmint oil will be available to the market at the beginning of the 2015– 2016 marketing year on June 1, 2015. The Committee acknowledges that the high salable quantity, and the corresponding high allotment percentage, will create a large quantity of available Scotch spearmint oil for which no Scotch spearmint oil actually exists. Accordingly, the Committee expects that 623,516 pounds of the recommended 835,393 pound increase in salable quantity will go unfilled. The potentially large underutilized salable quantity has been factored into the Committee’s recommendation. The Committee’s stated intent in the use of marketing order volume control regulation is to keep adequate supplies available to meet market needs and to maintain orderly marketing conditions. E:\FR\FM\31OCR1.SGM 31OCR1 rmajette on DSK2VPTVN1PROD with RULES 64660 Federal Register / Vol. 79, No. 211 / Friday, October 31, 2014 / Rules and Regulations With that in mind, the Committee developed its recommendation for increasing the Scotch spearmint oil salable quantity and allotment percentage for the 2014–2015 marketing year based on the information discussed above, as well as the summary data outlined below. (A) Estimated 2014–2015 Scotch Allotment Base—2,089,146 pounds. This is the estimate on which the original 2014–2015 salable quantity and allotment percentage was based. (B) Revised 2014–2015 Scotch Allotment Base—2,088,866 pounds. This is 280 pounds less than the estimated allotment base of 2,089,146 pounds. The difference is the result of annual adjustments made to the allotment base according to the provisions of the order. (C) Original 2014–2015 Scotch Allotment Percentage—55 percent. This was unanimously recommended by the Committee on November 6, 2013. (D) Original 2014–2015 Scotch Salable Quantity—1,149,030 pounds. This figure is 55 percent of the original estimated 2014–2015 allotment base of 2,089,146 pounds. (E) Adjusted 2014–2015 Scotch Salable Quantity—1,148,898 pounds. This figure reflects the salable quantity actually available at the beginning of the 2014–2015 marketing year. This quantity is derived by applying the 55 percent allotment percentage to the revised allotment base of 2,088,866. (F) Current Revision to the 2014–2015 Scotch Salable Quantity and Allotment Percentage: (1) Increase in Scotch Allotment Percentage—40 percent. The Committee recommended a 40 percent increase at its September 11, 2014, meeting. (2) 2014–2015 Scotch Allotment Percentage—95 percent. This figure is derived by adding the increase of 40 percent to the original 2014–2015 allotment percentage of 55 percent. (3) Calculated Revised 2014–2015 Scotch Salable Quantity—1,984,423 pounds. This figure is 95 percent of the revised 2014–2015 allotment base of 2,088,866 pounds. (4) Computed Increase in the 2014– 2015 Scotch Salable Quantity—835,546 pounds. This figure is 40 percent of the revised 2014–2015 allotment base of 2,088,866 pounds. (5) Expected Actual Increase in the 2014–2015 Scotch Spearmint Oil Available to the Market—211,877 pounds. This figure is based on the Committee’s estimation of oil actually held by producers that may enter the market as a result of this rule. Native spearmint oil is also regulated by the order. As mentioned previously, VerDate Sep<11>2014 14:37 Oct 30, 2014 Jkt 235001 a salable quantity and allotment percentage for Native spearmint oil was established in a final rule published in the Federal Register on May 8, 2014 (79 FR 26359). At the September 11, 2014, meeting, the Committee considered the current production, inventory, and marketing conditions for Native spearmint oil. After receiving reports from the Committee staff and comments from the industry, the consensus of the Committee was that the previously established salable quantity and allotment percentage for Native spearmint oil was appropriate for the current market conditions. As such, the Committee took no action with regards to Native spearmint oil. This rule relaxes the regulation of Scotch 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 2014–2015 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 2014–2015 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) the prospective production of each class of oil; (4) the 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 Scotch spearmint oil salable quantity and allotment percentage allows for anticipated market needs for that class of oil. In determining anticipated market needs, the Committee considered changes and trends in historical sales, production, and demand. Initial Regulatory Flexibility Analysis Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601–612), the Agricultural PO 00000 Frm 00004 Fmt 4700 Sfmt 4700 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 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 39 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) 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 (13 CFR 121.201). Based on the SBA’s definition of small entities, the Committee estimates that only 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 22 of the 39 Scotch spearmint oil producers and 29 of the 91 Native spearmint oil producers could be classified as small entities under the SBA definition. Thus, the majority of handlers and producers of Far West spearmint oil may not be classified as small entities. The use of volume control regulation allows the spearmint oil industry to fully supply spearmint oil markets while avoiding the negative consequences of over-supplying these markets. Without volume control regulation, the supply and price of spearmint oil 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 since 1980 and provide benefits for producers, E:\FR\FM\31OCR1.SGM 31OCR1 rmajette on DSK2VPTVN1PROD with RULES Federal Register / Vol. 79, No. 211 / Friday, October 31, 2014 / Rules and Regulations handlers, manufacturers, and consumers. This rule increases the quantity of Scotch spearmint oil that handlers may purchase from, or handle on behalf of, producers during the 2014–2015 marketing year, which ends on May 31, 2015. The 2014–2015 Scotch spearmint oil salable quantity was initially established at 1,149,030 pounds and the allotment percentage initially set at 55 percent. This rule increases the Scotch spearmint oil salable quantity to 1,984,423 pounds and the allotment percentage from 55 percent to 95 percent. Based on the information and projections available at the September 11, 2014, 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 Scotch spearmint oil after careful consideration of all available information and input from all interested industry participants, 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. In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the order’s information collection requirements have been previously approved by the Office of Management and Budget (OMB) and assigned OMB No. 0581–0178, Vegetable and Specialty Crop Marketing Orders. No changes in those requirements as a result of this action are necessary. Should any changes become necessary, they would be submitted to OMB for approval. 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. VerDate Sep<11>2014 18:24 Oct 30, 2014 Jkt 235001 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 September 11, 2014, 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: 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. This rule invites comments on a change to the salable quantity and allotment percentage for Scotch spearmint oil for the 2014–2015 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 Scotch spearmint oil that may be marketed during the marketing year, which ends on May 31, 2015; (2) the current quantity of Scotch spearmint oil may be inadequate to meet demand for the 2014–2015 marketing year, thus making the additional oil available as soon as is practicable will be beneficial to both handlers and producers; (3) the Committee recommended these changes at a public meeting and interested parties had an opportunity to provide input; and (4) this rule provides a 60day comment period, and any comments received will be considered prior to finalization of this rule. List of Subjects in 7 CFR Part 985 Marketing agreements, Oils and fats, Reporting and recordkeeping requirements, Spearmint oil. PO 00000 Frm 00005 Fmt 4700 Sfmt 4700 64661 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 § 985.233, remove the note preceding the section that states ‘‘[Note: This section will not appear in the annual Code of Federal Regulations.]’’ and revise paragraph (a) to read as follows: ■ § 985.233 Salable quantities and allotment percentages—2014–2015 marketing year. * * * * * (a) Class 1 (Scotch) oil—a salable quantity of 1,984,423 pounds and an allotment percentage of 95 percent. * * * * * Dated: October 23, 2014. Rex A. Barnes, Associate Administrator, Agricultural Marketing Service. [FR Doc. 2014–25646 Filed 10–30–14; 8:45 am] BILLING CODE P FEDERAL HOUSING FINANCE BOARD 12 CFR Part 907 FEDERAL HOUSING FINANCE AGENCY 12 CFR Parts 1201 and 1211 RIN 2590–AA66 Procedures and General Definitions Federal Housing Finance Agency; Federal Housing Finance Board. ACTION: Final rule. AGENCY: The Federal Housing Finance Agency (FHFA) is amending its regulations by relocating to the FHFA chapter of the Code of Federal Regulations (CFR) a Federal Housing Finance Board (Finance Board) regulation relating to procedures under which the Federal Home Loan Banks (Banks) and the Office of Finance (OF) may request waivers, approvals, noaction letters, and regulatory interpretations. The final rule modifies these regulations to make them also applicable to the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation (collectively, Enterprises) and repeals SUMMARY: E:\FR\FM\31OCR1.SGM 31OCR1

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[Federal Register Volume 79, Number 211 (Friday, October 31, 2014)]
[Rules and Regulations]
[Pages 64657-64661]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-25646]



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Federal Register / Vol. 79, No. 211 / Friday, October 31, 2014 / 
Rules and Regulations

[[Page 64657]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 985

[Doc. No. AMS-FV-13-0087; FV14-985-1A IR]


Marketing Order Regulating the Handling of Spearmint Oil Produced 
in the Far West; Revision of the Salable Quantity and Allotment 
Percentage for Class 1 (Scotch) Spearmint Oil for the 2014-2015 
Marketing Year

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim rule with request for comments.

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SUMMARY: This interim rule revises the quantity of Class 1 (Scotch) 
spearmint oil that handlers may purchase from, or handle on behalf of, 
producers during the 2014-2015 marketing year under the Far West 
spearmint oil marketing order. This rule increases the Scotch spearmint 
oil salable quantity from 1,149,030 pounds to 1,984,423 pounds and the 
allotment percentage from 55 percent to 95 percent. The marketing order 
regulates the handling of spearmint oil produced in the Far West and is 
administered locally by the Spearmint Oil Administrative Committee 
(Committee). The Committee recommended this rule for the purpose of 
maintaining orderly marketing conditions in the Far West spearmint oil 
market.

DATES: Effective October 31, 2014 and applicable to the 2014-2015 
marketing year; comments received by December 30, 2014 will be 
considered prior to issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent to the Docket Clerk, 
Marketing Order 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: http://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: http://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, Senior Marketing 
Specialist, or Gary Olson, Regional Director, 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: Barry.Broadbent@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 interim 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 Orders 12866, 13563, and 13175.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the provisions of the marketing order now in 
effect, salable quantities and allotment percentages may be established 
for classes of spearmint oil produced in the Far West. This rule 
increases the quantity of Scotch spearmint oil produced in the Far West 
that handlers may purchase from, or handle on behalf of, producers 
during the 2014-2015 marketing year, which began on June 1, 2014, and 
ends on May 31, 2015.
    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 rule revises the quantity of Scotch spearmint oil that 
handlers may purchase from, or handle on behalf of, producers during 
the 2014-2015 marketing year under the Far West spearmint oil marketing 
order. This rule increases the Scotch spearmint oil salable quantity 
from 1,149,030 pounds to 1,984,423 pounds and the allotment percentage 
from 55 percent to 95 percent.
    Under the volume regulation provisions of the order, the Committee 
meets each year to adopt a marketing policy for the ensuing year. When 
the Committee's marketing policy considerations indicate a need for 
limiting the quantity of spearmint oil available to the market to 
establish or maintain orderly marketing conditions, the Committee 
submits a recommendation to the Secretary for volume regulation.
    Volume regulation under the order is effectuated through the 
establishment of a salable quantity and allotment percentage applicable 
to each class of spearmint oil handled in the production area during a 
marketing year. The salable quantity is the total quantity of each 
class of oil that handlers may purchase from, or handle on behalf of, 
producers during a given marketing year. The allotment percentage for 
each

[[Page 64658]]

class of oil is derived by dividing the salable quantity by the total 
industry allotment base for that same class of oil. The total industry 
allotment base is the aggregate of all allotment base held individually 
by producers. Producer allotment base is the quantity of each class of 
spearmint oil that the Committee has determined is representative of a 
producer's spearmint oil production. Each producer is allotted a pro 
rata share of the total salable quantity of each class of spearmint oil 
each marketing year. Each producer's annual allotment is determined by 
applying the allotment percentage to the producer's individual 
allotment base for each applicable class of spearmint oil.
    The full Committee met on November 6, 2013, to consider its 
marketing policy for the ensuing year. At that meeting, the Committee 
determined that marketing conditions indicated a need for volume 
regulation of both classes of spearmint oil for the 2014-2015 marketing 
year. The Committee recommended salable quantities of 1,149,030 pounds 
and 1,090,821 pounds, and allotment percentages of 55 percent and 46 
percent, respectively, for Scotch and Native spearmint oil. A proposed 
rule to that effect was published in the Federal Register on March 14, 
2014 (79 FR 14441). Comments on the proposed rule were solicited from 
interested persons until March 31, 2014. No comments were received. 
Subsequently, a final rule establishing the salable quantities and 
allotment percentages for Scotch and Native spearmint oil for the 2014-
2015 marketing year was published in the Federal Register on May 8, 
2014 (79 FR 26359).
    Pursuant to authority contained in Sec. Sec.  985.50, 985.51, and 
985.52 of the order, the full eight member Committee met again on 
September 11, 2014, to consider pertinent market information on the 
current supply, demand, and price of spearmint oil. After some 
deliberation, the Committee recommended increasing the 2014-2015 
marketing year Scotch spearmint oil salable quantity from 1,149,030 
pounds to 1,984,423 pounds and the allotment percentage from 55 percent 
to 95 percent. The motion to increase the salable quantity and 
allotment percentage for Scotch passed with six members in favor and 
one member opposed. The public member, while present, abstained from 
the vote. The member opposed to the motion agreed with the other 
members of the Committee that an increase in the salable quantity and 
allotment percentage was necessary for the industry to respond to 
increasing demand. However, he cast his vote against the motion based 
on his opinion that an 835,393 pound increase in the salable quantity, 
and a corresponding 40 percent increase in the allotment percentage, 
was too large of an increase this early in the marketing year. The 
member felt that it would be better to be conservative at this point in 
the marketing year, given that the Committee had the ability to further 
increase the volume control provisions later if marketing conditions 
warranted.
    Thus, taking into consideration the following discussion, this rule 
makes additional amounts of Scotch spearmint oil available to the 
market by increasing the salable quantity and allotment percentage. 
This rule increases the 2014-2015 marketing year Scotch spearmint oil 
salable quantity from 1,149,030 pounds to 1,984,423 pounds and raises 
the allotment percentage from 55 percent to 95 percent. Such additional 
oil may come from excess Scotch spearmint oil produced in the current 
marketing year or by releasing Scotch spearmint oil held in the reserve 
pool. As of May 31, 2014, the Committee records show that the Scotch 
spearmint oil reserve pool contained just 551 pounds of oil. In 
addition, the Committee estimates that producers have produced 222,544 
pounds of Scotch spearmint oil production in excess of their annual 
allotments for the 2014-2015 marketing year.
    The increase in the salable quantity as a result of this rule 
represents an additional 835,393 pounds of Scotch spearmint oil being 
made available to the market. However, due to the limited amount of 
Scotch spearmint oil held by individual producers (oil produced in the 
current year or held in reserve from past years production), the 
Committee expects that only 211,877 pounds of additional Scotch 
spearmint oil will actually be made available to the spearmint oil 
market. The relatively high salable quantity resulting from this 
action, as compared to the actual quantity of spearmint oil that will 
be made available to the market, is necessary to ensure that those 
producers that have Scotch spearmint oil in inventory have enough 
annual allotment to be able to market that oil. Producers that do not 
have additional Scotch spearmint oil in inventory (either oil held in 
the reserve pool or from excess production in the current year) will 
not be able to utilize the additional annual allotment issued to them 
as a result of this action and the additional annual allotment will go 
unused.
    The 2014-2015 marketing year began on June 1, 2014, with an 
estimated carry-in of 7,064 pounds of salable Scotch spearmint oil. 
When the estimated carry-in is added to the 2014-2015 salable quantity 
of 1,149,030 pounds initially established for Scotch spearmint oil, the 
result is a total available supply for the 2014-2015 marketing year of 
1,156,094 pounds. However, the Committee estimates that some Scotch 
spearmint oil producers do not have sufficient production from the 2014 
crop to fill approximately 190,174 pounds of their respective 2014-2015 
marketing year annual allotment. As such, the Committee estimates that 
the total actual supply of Scotch spearmint oil available to the market 
prior to the issuance of this rule is 965,920 pounds, not the 1,156,094 
pounds as originally estimated. Of this amount, the Committee estimates 
that 927,675 pounds of Scotch spearmint oil have already been sold or 
have been committed to be sold as of the September 11, 2014, meeting 
date. This leaves just 38,245 pounds of uncommitted salable Scotch 
spearmint oil actually available for sale for the remainder of the 
2014-2015 marketing year. The Committee believes that maintaining such 
a small amount of salable Scotch spearmint oil would be detrimental to 
the industry.
    In making the recommendation to increase the salable quantity and 
allotment percentage of Scotch spearmint oil, the Committee considered 
all currently available information on the price, supply, and demand of 
spearmint oil. The Committee also considered reports and other 
information from handlers and producers in attendance at the meeting. 
Lastly, the Committee manager presented information and reports that 
were provided to the Committee staff by handlers and producers who were 
not in attendance at the September 11, 2014, meeting.
    This action increases the 2014-2015 marketing year Scotch spearmint 
oil salable quantity by 835,393 pounds, to a total of 1,984,423 pounds. 
However, as mentioned previously, the net effect of the increase will 
be much less than the calculated increase due to the amount of actual 
oil individual producers have available to market from the current 
year's excess production and from reserve pool inventory. The Committee 
estimates that this action will actually make an additional 211,877 
pounds of Scotch spearmint oil available to the market. That amount, 
combined with the 38,245 pounds of salable Scotch spearmint oil 
currently available, will make a total of 250,122 pounds that may be 
marketed through the remainder of the marketing year. The total supply 
of Scotch spearmint oil that is anticipated

[[Page 64659]]

to be available to the market will be increased to 1,177,797 pounds. 
Actual sales of Scotch spearmint oil for the 2013-2014 marketing year 
totaled 1,065,725 pounds.
    The Committee estimates that this action will completely deplete 
reserve pool stocks of Scotch spearmint oil during the course of the 
2014-2015 marketing year. In addition, the Committee estimates that all 
but 11,218 pounds of the current year's Scotch spearmint oil production 
will be available to enter the market. While these inventory levels are 
low, the Committee believes that trying to hold any Scotch spearmint 
oil in reserve under the current market conditions could result in the 
market experiencing a shortage of Scotch spearmint oil during the 
course of the 2014-2015 marketing year. Further, the Committee expects 
the Scotch spearmint oil industry to respond to the current market 
conditions with increased production in the coming years, and that 
Scotch spearmint oil inventory levels will quickly return to normal 
levels.
    When the original 2014-2015 marketing policy statement was drafted, 
handlers estimated the demand for Scotch spearmint oil for the 2014-
2015 marketing year to be 1,000,000 pounds. The Committee's initial 
recommendation for the establishment of the Scotch spearmint oil 
salable quantity and allotment percentage for the 2014-2015 marketing 
year was based on that estimate and did not anticipate the increase in 
demand for Scotch spearmint oil that the market is currently 
experiencing. Handlers now estimate that Scotch spearmint oil demand 
for the 2014-2015 marketing year could be as much as 1,100,000 to 
1,200,000 pounds. As such, the Committee believes that the supply of 
Scotch spearmint oil available to the market under the initially 
established salable quantity and allotment percentage is insufficient 
to satisfy the current level of demand for oil at reasonable price 
levels. The Committee further believes that the increase in the salable 
quantity and allotment percentage effectuated by this action is vital 
to ensuring an adequate supply of Scotch spearmint oil is available to 
the market moving forward.
    As previously stated, this action will make nearly all of the 
Scotch spearmint oil held by the industry available to the market. 
However, to achieve that desired net effect under the current supply 
conditions in the industry, it is necessary for the salable quantity 
and allotment percentage established under the volume regulation 
provisions of the order to be set at historically high levels. The 
Committee records show that very few producers hold Scotch spearmint 
oil in reserve. In addition, not every producer produced Scotch 
spearmint oil in excess of his/her annual allotment. Given the process 
by which volume regulation is effectuated under the order, those 
producers with large amounts of excess Scotch spearmint oil production 
are only able to market their entire inventory of Scotch spearmint oil 
when the allotment percentage is set very high. Likewise, producers 
that do not have excess Scotch spearmint oil production from the 
current year, or reserve oil from previous years, will not have any 
Scotch spearmint oil inventory to market, regardless of the level of 
increase in the allotment percentage. As such, the Committee expects 
that establishing a high salable quantity and allotment percentage for 
Scotch spearmint oil will translate into a large amount of the 
increased salable quantity going unused, as a number of producers have 
little or no Scotch spearmint oil available to sell.
    As an example, assume Producer A has 2,000 pounds of Scotch 
spearmint oil allotment base. In addition, assume that during the 2014-
2015 marketing year Producer A produced 1,900 pounds of Scotch 
spearmint oil. Producer A currently holds no Scotch spearmint oil in 
reserve from production in prior years. Given that the initial 2014-
2015 marketing year allotment percentage was established at 55 percent, 
Producer A would be able to market 1,100 pounds of the current year 
production (55 percent allotment percentage x 2,000 pounds of allotment 
base), leaving the producer with 800 pounds of excess production that 
was initially not available to market. Without an increase in the 
allotment percentage, the producer would not be able to market any of 
the 800 pounds of excess oil produced and the oil would be placed in 
the reserve pool for marketing in subsequent years. For Producer A to 
market all 1,900 pounds of his/her current year Scotch spearmint oil 
production, the allotment percentage would need to be increased by 40 
percent to a total of 95 percent (95 percent x 2,000 pounds = 1,900 
pounds). An increase in the allotment percentage of anything less than 
40 percent would fail to release all of the Scotch spearmint oil that 
the producer produced in the current year.
    In contrast, assume that another producer, Producer B, likewise has 
2,000 pounds of Scotch spearmint oil allotment base, but produced just 
1,100 pounds of Scotch spearmint oil during the 2014-2015 marketing 
year. Producer B also has no oil held in reserve. As in the first case, 
Producer B would be able to market all of his/her current year 
production under the initial allotment percentage of 55 percent. 
However, a subsequent increase in the allotment percentage of 40 
percent would have no impact on Producer B, as the producer has no 
excess Scotch spearmint oil production or reserve pool oil available to 
deliver to the market. As a result, the 800 pounds of additional annual 
allotment allocated to Producer B after a 40 percent increase in the 
allotment percentage would go unfilled.
    The Committee estimates that a 40 percent increase in the salable 
quantity and allotment percentage is required to make all of the Scotch 
spearmint oil reserve pool, and most of the 2014 crop year excess 
Scotch spearmint oil production, available to the market. As mentioned 
previously, the Committee estimates that producers hold just 551 pounds 
of Scotch spearmint oil in the reserve pool that could enter the market 
under the increase. As such, the Committee believes that the majority 
of the Scotch spearmint oil that may be released to the market as a 
result of this action will come from the estimated 222,544 pounds of 
2014 crop year production that is in excess of the producer's annual 
allotments. The Committee expects that all but approximately 11,218 
pounds of Scotch spearmint oil will be available after the 40 percent 
increase in salable quantity and allotment percentage. By the 
Committee's calculation, the salable quantity would need to be 
increased by 5,431,052 pounds and the allotment percentage increased by 
260 percent for the last 11,218 pounds of the Scotch spearmint oil to 
be released to the market under the volume control provisions of the 
order. It is anticipated that the 11,218 pounds of Scotch spearmint oil 
will be available to the market at the beginning of the 2015-2016 
marketing year on June 1, 2015.
    The Committee acknowledges that the high salable quantity, and the 
corresponding high allotment percentage, will create a large quantity 
of available Scotch spearmint oil for which no Scotch spearmint oil 
actually exists. Accordingly, the Committee expects that 623,516 pounds 
of the recommended 835,393 pound increase in salable quantity will go 
unfilled. The potentially large underutilized salable quantity has been 
factored into the Committee's recommendation.
    The Committee's stated intent in the use of marketing order volume 
control regulation is to keep adequate supplies available to meet 
market needs and to maintain orderly marketing conditions.

[[Page 64660]]

With that in mind, the Committee developed its recommendation for 
increasing the Scotch spearmint oil salable quantity and allotment 
percentage for the 2014-2015 marketing year based on the information 
discussed above, as well as the summary data outlined below.
    (A) Estimated 2014-2015 Scotch Allotment Base--2,089,146 pounds. 
This is the estimate on which the original 2014-2015 salable quantity 
and allotment percentage was based.
    (B) Revised 2014-2015 Scotch Allotment Base--2,088,866 pounds. This 
is 280 pounds less than the estimated allotment base of 2,089,146 
pounds. The difference is the result of annual adjustments made to the 
allotment base according to the provisions of the order.
    (C) Original 2014-2015 Scotch Allotment Percentage--55 percent. 
This was unanimously recommended by the Committee on November 6, 2013.
    (D) Original 2014-2015 Scotch Salable Quantity--1,149,030 pounds. 
This figure is 55 percent of the original estimated 2014-2015 allotment 
base of 2,089,146 pounds.
    (E) Adjusted 2014-2015 Scotch Salable Quantity--1,148,898 pounds. 
This figure reflects the salable quantity actually available at the 
beginning of the 2014-2015 marketing year. This quantity is derived by 
applying the 55 percent allotment percentage to the revised allotment 
base of 2,088,866.
    (F) Current Revision to the 2014-2015 Scotch Salable Quantity and 
Allotment Percentage:
    (1) Increase in Scotch Allotment Percentage--40 percent. The 
Committee recommended a 40 percent increase at its September 11, 2014, 
meeting.
    (2) 2014-2015 Scotch Allotment Percentage--95 percent. This figure 
is derived by adding the increase of 40 percent to the original 2014-
2015 allotment percentage of 55 percent.
    (3) Calculated Revised 2014-2015 Scotch Salable Quantity--1,984,423 
pounds. This figure is 95 percent of the revised 2014-2015 allotment 
base of 2,088,866 pounds.
    (4) Computed Increase in the 2014-2015 Scotch Salable Quantity--
835,546 pounds. This figure is 40 percent of the revised 2014-2015 
allotment base of 2,088,866 pounds.
    (5) Expected Actual Increase in the 2014-2015 Scotch Spearmint Oil 
Available to the Market--211,877 pounds. This figure is based on the 
Committee's estimation of oil actually held by producers that may enter 
the market as a result of this rule.
    Native spearmint oil is also regulated by the order. As mentioned 
previously, a salable quantity and allotment percentage for Native 
spearmint oil was established in a final rule published in the Federal 
Register on May 8, 2014 (79 FR 26359). At the September 11, 2014, 
meeting, the Committee considered the current production, inventory, 
and marketing conditions for Native spearmint oil. After receiving 
reports from the Committee staff and comments from the industry, the 
consensus of the Committee was that the previously established salable 
quantity and allotment percentage for Native spearmint oil was 
appropriate for the current market conditions. As such, the Committee 
took no action with regards to Native spearmint oil.
    This rule relaxes the regulation of Scotch 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 2014-2015 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 2014-2015 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) the prospective production of each class of oil; 
(4) the 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 Scotch spearmint oil salable quantity and 
allotment percentage allows for anticipated market needs for that class 
of oil. In determining anticipated market needs, the Committee 
considered changes and trends in historical sales, production, and 
demand.

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 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 39 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) 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 (13 CFR 121.201).
    Based on the SBA's definition of small entities, the Committee 
estimates that only 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 22 of the 39 Scotch spearmint oil producers and 29 of 
the 91 Native spearmint oil producers could be classified as small 
entities under the SBA definition. Thus, the majority of handlers and 
producers of Far West spearmint oil may not be classified as small 
entities.
    The use of volume control regulation allows the spearmint oil 
industry to fully supply spearmint oil markets while avoiding the 
negative consequences of over-supplying these markets. Without volume 
control regulation, the supply and price of spearmint oil 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 since 
1980 and provide benefits for producers,

[[Page 64661]]

handlers, manufacturers, and consumers.
    This rule increases the quantity of Scotch spearmint oil that 
handlers may purchase from, or handle on behalf of, producers during 
the 2014-2015 marketing year, which ends on May 31, 2015. The 2014-2015 
Scotch spearmint oil salable quantity was initially established at 
1,149,030 pounds and the allotment percentage initially set at 55 
percent. This rule increases the Scotch spearmint oil salable quantity 
to 1,984,423 pounds and the allotment percentage from 55 percent to 95 
percent.
    Based on the information and projections available at the September 
11, 2014, 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 Scotch 
spearmint oil after careful consideration of all available information 
and input from all interested industry participants, 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.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the order's information collection requirements have been 
previously approved by the Office of Management and Budget (OMB) and 
assigned OMB No. 0581-0178, Vegetable and Specialty Crop Marketing 
Orders. No changes in those requirements as a result of this action are 
necessary. Should any changes become necessary, they would be submitted 
to OMB for approval.
    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 September 11, 2014, 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: 
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.
    This rule invites comments on a change to the salable quantity and 
allotment percentage for Scotch spearmint oil for the 2014-2015 
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 Scotch spearmint oil 
that may be marketed during the marketing year, which ends on May 31, 
2015; (2) the current quantity of Scotch spearmint oil may be 
inadequate to meet demand for the 2014-2015 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.  985.233, remove the note preceding the section that states 
``[Note: This section will not appear in the annual Code of Federal 
Regulations.]'' and revise paragraph (a) to read as follows:


Sec.  985.233  Salable quantities and allotment percentages--2014-2015 
marketing year.

* * * * *
    (a) Class 1 (Scotch) oil--a salable quantity of 1,984,423 pounds 
and an allotment percentage of 95 percent.
* * * * *

    Dated: October 23, 2014.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2014-25646 Filed 10-30-14; 8:45 am]
BILLING CODE P