1994 Marketing Quotas and Price Support Levels for Fire-Cured (Type 21), Fire-Cured (Types 22-23), Dark Air-Cured (Types 35-36), Virginia Sun-Cured (Type 37), Cigar-Filler and Binder (Types 42-44 and 53-55), and Cigar-Filler (Type 46) Tobaccos

DEPARTMENT OF AGRICULTURE

Agricultural Stabilization and Conservation Service

7 CFR Part 723

Commodity Credit Corporation

7 CFR Part 1464

RIN 0560-AD23 and 0560-AD28

1994 Marketing Quotas and Price Support Levels for Fire-Cured

(Type 21), Fire-Cured (Types 22-23), Dark Air-Cured (Types 35-36),

Virginia Sun-Cured (Type 37), Cigar-Filler and Binder (Types 42-44 and

53-55), and Cigar-Filler (Type 46) Tobaccos

AGENCIES: Agricultural Stabilization and Conservation Service and

Commodity Credit Corporation, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The purpose of this final rule is to codify the national

marketing quotas and price support levels for the 1994 crops for

several kinds of tobacco announced by press release on March 1, 1994.

In accordance with the Agricultural Adjustment Act of 1938 (the

1938 Act), as amended, the Secretary determined the 1994 marketing

quotas to be as follows: Fire-cured (type 21), 2.150 million pounds;

fire-cured (types 22-23), 40.4 million pounds; dark air-cured (types

35-36), 10.6 million pounds; Virginia sun-cured (type 37), 131,000

pounds; cigar-filler and binder (types 42-44 and 53-55), 9.3 million

pounds; and cigar-filler (type 46), zero pounds.

This rule is necessary to adjust the production levels of these

kinds of tobacco to more fully reflect supply and demand conditions.

In accordance with the Agricultural Act of 1949 (the 1949 Act), as

amended, the Secretary determined the 1994 levels of support to be as

follows (in cents per pound): Fire-cured (type 21), 140.7; fire-cured

(types 22-23), 148.3; dark air-cured (types 35-36), 127.3; Virginia

sun-cured (type 37), 124.5; cigar-filler and binder (types 42-44 and

53-55), 108.4; and cigar-filler (type 46), 84.4.

This is required by section 106 of the 1949 Act.

EFFECTIVE DATE: March 1, 1994.

FOR FURTHER INFORMATION CONTACT: Robert L. Tarczy, Agricultural

Economist, Tobacco and Peanuts Analysis Division, Agricultural

Stabilization and Conservation Service (ASCS), United States Department

of Agriculture (USDA), room 3736, South Building, P.O. Box 2415,

Washington, DC 20013-2415, 202-720-8839.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This rule has been determined to be not significant for purposes of

Executive Order 12866 and therefore has not been reviewed by OMB.

Executive Order 12778

The final rule has been reviewed in accordance with Executive Order

12778, Civil Justice Reform. The provisions of this rule do not preempt

State laws, are not retroactive, and do not involve administrative

appeals.

Federal Assistance Program

The title and number of the Federal Assistance Program, as found in

the Catalog of Federal Domestic Assistance, to which this rule applies

are: Commodity Loans and Purchases--10.051.

Regulatory Flexibility Act

It has been determined that the Regulatory Flexibility Act is not

applicable to this final rule since neither ASCS nor the Commodity

Credit Corporation is required by 5 U.S.C. 553 or any provision of law

to publish a notice of proposed rulemaking with respect to the subject

matter of this rule.

Executive Order 12372

This activity is not subject to the provisions of Executive Order

12372 which requires intergovernmental consultation with State and

local officials. See the Notice related to 7 CFR part 3015, subpart V,

published at 48 FR 29115 (June 24, 1983).

Paperwork Reduction Act

The amendments to 7 CFR part 723 set forth in this final rule do

not contain any new or revised information collection requirements that

require clearance through the Office of Management and Budget under the

provisions of 44 U.S.C. 35.

Statutory Background

This final rule is issued pursuant to the provisions of the 1938

Act and the 1949 Act.

On March 1, 1994, the Secretary determined and announced the

national marketing quotas and price support levels for the 1994 crops

of fire-cured (type 21), fire-cured (types 22-23), dark air-cured

(types 35-36), Virginia sun-cured (type 37), cigar-filler and binder

(types 42-44 and 53-55), and cigar-filler (type 46) tobaccos. A number

of related determinations were made at the same time, which this final

rule affirms. On the same date, the Secretary also announced that

referenda would be conducted by mail with respect to fire-cured (types

21-23) and dark air-cured (types 35-36) tobaccos.

During March 28-31, 1994, eligible fire-cured (types 21-23) and

dark air-cured (types 35-36) tobacco producers voted in separate

referenda to determine whether such producers disapprove marketing

quotas for the 1994, 1995, and 1996 marketing years (MYs) for these

tobaccos. Of the producers voting, 89.8 percent favored marketing

quotas for fire-cured tobacco and 90.0 percent favored marketing quotas

for dark air-cured tobacco. Accordingly, quotas and price supports for

both kinds are in effect for the 1994 MY.

In accordance with section 312(a) of the 1938 Act, the Secretary of

Agriculture is required to proclaim not later than March 1 of any MY

with respect to any kind of tobacco, other than burley and flue-cured

tobacco, a national marketing quota for any such kind of tobacco for

each of the next three MYs if such MY is the last year of three

consecutive years for which marketing quotas previously proclaimed will

be in effect. With respect to both fire-cured (type 21-23) and dark

air-cured (types 35-36) tobaccos, the 1993 MY is the last year of three

such consecutive years. Accordingly, marketing quotas for fire-cured

(types 21-23) and dark air-cured (types 35-36) tobaccos have been

proclaimed for each of the three MYs beginning October 1, 1994; October

1, 1995; and October 1, 1996.

Sections 312 and 313 of the 1938 Act also provide that the

Secretary shall announce not later than March 1 of any MY the reserve

supply level and the total supply of fire-cured (type 21), fire-cured

(types 22-23), dark air-cured (types 35-36), Virginia sun-cured (type

37), cigar-filler and binder (types 42-44 and 53-55), and cigar-filler

(type 46) tobaccos for the MY beginning October 1, 1993, and the

amounts of the national marketing quotas, national acreage allotments,

national acreage factors for apportioning the national acreage

allotments (less reserves) to old farms, and the amounts of the

national reserves and parts thereof available for (1) new farms and (2)

making corrections and adjusting inequities in old farm allotments for

fire-cured (type 21), fire-cured (types 22-23), dark air-cured (types

35-36), Virginia sun-cured (type 37), cigar-filler and binder (types

42-44 and 53-55), and cigar-filler (type 46) tobacco for the MY

beginning October 1994.

Price support is required to be made available for each crop of a

kind of tobacco for which marketing quotas are in effect or for which

marketing quotas have not been disapproved by producers. With respect

to the 1994 crop of the six kinds of tobacco which are the subject of

this rule, the respective maximum level of support is determined in

accordance with section 106 of the 1949 Act.

The announcement of the price support levels for the 1994 crops of

the six kinds of tobacco must be made insofar as practicable before the

beginning of the planting season.

Marketing Quotas

Section 312(b) of the 1938 Act provides, in part, that the amount

of the national marketing quota for a kind of tobacco is the total

quantity of that kind of tobacco which may be marketed that will make

available during such MY a supply of such tobacco equal to the reserve

supply level.

Section 313(g) of the 1938 Act provides that the Secretary may

convert the national marketing quota into a national acreage allotment

for apportionment to individual farms.

Since producers of these kinds of tobacco generally produce less

than their respective national acreage allotments would allow, it has

been determined that a larger quota would be necessary to make

available production equal to the reserve supply level. The amount of

the national marketing quota so announced may, not later than the

following March 1, be increased by not more than 20 percent if the

Secretary determines that such increase is necessary in order to meet

market demands or to avoid undue restriction of marketings in adjusting

the total supply to the reserve supply level.

Section 301(b)(14)(B) of the 1938 Act defines ``reserve supply

level'' as the normal supply, plus 5 percent thereof, to ensure a

supply adequate to meet domestic consumption and export needs in years

of drought, flood, or other adverse conditions, as well as in years of

plenty. The ``normal supply'' is defined in section 301(b)(10)(B) of

the 1938 Act as a normal year's domestic consumption and exports, plus

175 percent of a normal year's domestic use and 65 percent of a normal

year's exports as an allowance for a normal year's carryover. A

``normal'' year's domestic consumption is defined in section

301(b)(11)(B) of the Act as the average quantity produced and consumed

in the United States during the 10 MYs immediately preceding the MY in

which such consumption is determined, adjusted for current trends in

such consumption.

A normal year's exports is defined in section 301(b)(12) of the

1938 Act as the average quantity produced in and exported from the

United States during the 10 MYs immediately preceding the MY in which

such exports are determined, adjusted for current trends in such

exports.

In accordance with section 313(g) of the 1938 Act, the Secretary is

authorized to establish a national reserve from the national acreage

allotment in an amount equivalent to not more than 1 percent of the

national acreage allotment for the purpose of making corrections in

farm acreage allotments, adjusting for inequities, and for establishing

allotments for new farms. The Secretary has determined that the

national reserve, noted herein, for the 1994 crop of each of these

kinds of tobacco is adequate for these purposes.

On December 21, 1993, a proposed rule was published (58 FR 67376)

in which interested persons were requested to comment with respect to

these issues.

Discussion of Comments

Thirty-one written responses were received during the comment

period which ended February 4, 1994. Some respondents discussed more

than one kind of tobacco. A summary of these comments by kind of

tobacco follows:

(1) Fire-cured (type 21) tobacco. Eight comments were received.

Four comments recommended that quotas be increased by 5 percent. Two

others recommended that the marketing quotas be increased by 10 percent

from the 1993 MY while two more requested an unspecified increase.

(2) Fire-cured (types 22-23) tobacco. Four comments were received,

all recommending a five percent increase from the 1993 marketing quota.

(3) Dark air-cured (types 35-36) tobacco. Five comments were

received. Recommendations ranged from a 5-percent decrease to a 10-

percent decrease in the quota.

(4) Virginia sun-cured (type 37) tobacco. Eight comments were

received. Recommendations ranged from a 5-percent to a 20-percent

increase in quota.

(5) Cigar-filler and binder (types 42-44 and 53-55) tobacco. Six

comments were received. These comments ranged from no change in quota

to a 35-percent decrease in quota.

(6) Cigar-filler (type 46) tobacco. No comments were received.

Based upon a review of these comments and the latest available

statistics of the Federal Government, which appear to be the most

reliable data available, the following determinations have been made.

(1) Fire-Cured (Type 21) Tobacco

The yearly average quantity of fire-cured (type 21) tobacco

produced in the United States which is estimated to have been consumed

in the United States during the 10 MYs preceding the 1993-94 MY is

approximately 1.5 million pounds. The average annual quantity of fire-

cured (type 21) tobacco produced in the United States and exported from

the United States during the 10 MYs preceding the 1993-94 MY was 2.7

million pounds (farm sales weight basis). Both domestic use and exports

have trended sharply downward. For that reason, a normal year's

domestic consumption has been determined to be 0.5 million pounds and a

normal year's exports have been determined to be 2.1 million pounds.

Application of the formula prescribed by section 301(b)(14)(B) of the

1938 Act results in a reserve supply level of 5.61 million pounds.

Manufacturers and dealers reported stocks of fire-cured (type 21)

tobacco held on October 1, 1993, of 4.4 million pounds. The 1993 fire-

cured (type 21) tobacco crop is estimated to be 1.9 million pounds.

Therefore, the total supply of fire-cured (type 21) tobacco for the

1993 MY is 6.3 million pounds. During the 1993 MY, it is estimated that

disappearance will total approximately 2.5 million pounds. By deducting

this disappearance from the total supply, a carryover of 3.8 million

pounds at the beginning of the 1994 MY is obtained.

The difference between the reserve supply level and the estimated

carryover on October 1, 1994, is 1.81 million pounds. This represents

the quantity of fire-cured (type 21) tobacco which may be marketed that

will make available during such MY a supply equal to the reserve supply

level. Less than 85 percent of the announced national marketing quota

is expected to be produced. Accordingly, it has been determined that a

national marketing quota of 2.15 million pounds is necessary to make

available production of 1.81 million pounds. Accordingly, the national

marketing quota for the 1994 MY is 2.15 million pounds. In accordance

with section 313(g) of the 1938 Act, dividing the 1994 national

marketing quota of 2.15 million pounds by the 1989-93, 5-year national

average yield of 1,388 pounds per acre results in a 1994 national

acreage allotment of 1,548.99 acres.

Pursuant to the provisions of section 313(g) of the 1938 Act, a

national acreage factor of 1.05 is determined by dividing the national

acreage allotment for the 1994 MY, less a national reserve of 5.0

acres, by the total of 1994 preliminary farm acreage allotments

(previous year's allotments). The preliminary farm acreage allotments

reflect the factors specified in section 313(g) of the 1938 Act for

apportioning the national acreage allotment, less the national reserve,

to old farms.

(2) Fire-Cured (Types 22-23) Tobacco

The yearly average quantity of fire-cured (types 22-23) tobacco

produced in the United States which is estimated to have been consumed

in the United States during the 10 years preceding the 1993 MY was

approximately 17.8 million pounds. The average annual quantity of fire-

cured (types 22-23) tobacco produced in the United States and exported

during the 10 MYs preceding the 1993 MY was 16.9 million pounds (farm

sales weight basis). Both domestic use and exports have trended upward

recently. A normal year's domestic consumption has for that reason been

determined to be 21.8 million pounds and a normal year's exports have

been determined to be 20.7 million pounds. Application of the formula

prescribed by section 301(b)(14)(B) of the 1938 Act results in a

reserve supply level of 98.8 million pounds.

Manufacturers and dealers reported stocks of fire-cured (types 22-

23) tobacco held on October 1, 1993, of 64.0 million pounds. The 1993

fire-cured (types 22-23) crop is estimated to be 36.8 million pounds.

Therefore, the total supply of fire-cured (types 22-23) tobacco for the

MY beginning October 1, 1993, is 100.8 million pounds. During the 1993

MY, it is estimated that disappearance will total approximately 34.0

million pounds. By deducting this disappearance from the total supply,

a carryover of 66.8 million pounds at the beginning of the 1994 MY is

obtained.

The difference between the reserve supply level and the estimated

carryover on October 1, 1994, is 32.0 million pounds. This represents

the quantity of fire-cured (types 22-23) tobacco which may be marketed

that will make available during the 1994 MY a supply equal to the

reserve supply level. About 95 percent of the announced national

marketing quota is expected to be produced.

Accordingly, it has been determined that a national marketing quota

for the 1994 MY of 33.7 million pounds is necessary to make available

production of 32.0 million pounds. In accordance with section 312(b) of

the 1938 Act, it has been further determined that the 1994 national

marketing quota must be increased by 20 percent in order to avoid undue

restriction of marketings. This results in a national marketing quota

for the 1994 MY of 40.4 million pounds.

In accordance with section 313(g) of the 1938 Act, dividing the

1994 national marketing quota of 40.4 million pounds by the 1989-93, 5-

year national average yield of 2,275 pounds per acre results in a 1994

national acreage allotment of 17,758.24 acres.

Pursuant to the provisions of section 313(g) of the 1938 Act, a

national acreage factor of 1.05 is determined by dividing the national

acreage allotment for the 1994 MY, less a national reserve of 40 acres,

by the total of 1994 preliminary farm acreage allotments. The

preliminary farm acreage allotments reflect the factors specified in

section 313(g) of the 1938 Act for apportioning the national acreage

allotment, less the national reserve, to old farms.

(3) Dark Air-Cured (Types 35-36) Tobacco

The yearly average quantity of dark air-cured (types 35-36) tobacco

produced in the United States, which is estimated to have been consumed

in the United States, during the 10 MYs preceding the 1993-94 MY was

approximately 10.6 million pounds. The average annual quantity of dark

air-cured (types 35-36) tobacco produced in the United States and

exported from the United States during the 10 MYs preceding the 1993 MY

was 1.9 million pounds (farm sales weight basis). Both domestic use and

exports have trended downward. Accordingly, a normal year's domestic

consumption has been determined to be 10.0 million pounds and a normal

year's exports have been determined to be 1.6 million pounds.

Application of the formula prescribed by section 301(b)(14)(B) of the

1938 Act results in a reserve supply level of 31.6 million pounds.

Manufacturers and dealers reported stocks of dark air-cured (types

35-36) tobacco held on October 1, 1993, of 24.2 million pounds. The

1993 dark air-cured (types 35-36) tobacco crop is estimated to be 9.9

million pounds. Therefore, the total supply of dark air-cured (types

35-36) tobacco for the 1993 MY is 34.1 million pounds. During the 1993

MY, it is estimated that disappearance will total approximately 10.0

million pounds. By deducting this disappearance from the total supply,

a carryover of 24.1 million pounds at the beginning of the 1994 MY is

obtained.

The difference between the reserve supply level and the estimated

carryover on October 1, 1994, is 7.5 million pounds. This represents

the quantity of dark air-cured (types 35-36) tobacco which may be

marketed which will make available during such MY a supply equal to the

reserve supply level.

More than 80 percent of the announced national marketing quota is

expected to be produced. Accordingly, it has been determined that a

national marketing quota of 8.8 million pounds is necessary to make

available production of 7.5 million pounds. In accordance with section

312(b) of the 1938 Act, it has been further determined that the 1994

national marketing quota must be increased by 20 percent in order to

avoid undue restriction of marketings. This results in a national

marketing quota for the 1994 MY of 10.6 million pounds.

In accordance with section 313(g) of the 1938 Act, dividing the

1994 national marketing quota of 10.6 million pounds by the 1989-93, 5-

year average yield of 2,105 pounds per acre results in a 1994 national

acreage allotment of 5,035.63 acres.

Pursuant to the provisions of section 313(g) of the 1938 Act, a

national acreage factor of 0.95 is determined by dividing the national

acreage allotment for the 1994 MY, less a national reserve of 28.0

acres, by the total of 1994 preliminary farm acreage allotments. The

preliminary farm acreage allotments reflect the factors specified in

section 313(g) of the 1938 Act for apportioning the national acreage

allotment, less the national reserve, to old farms.

(4) Virginia Sun-Cured (Type 37) Tobacco

The yearly average quantity of Virginia sun-cured (type 37) tobacco

produced in the United States which is estimated to have been consumed

in the United States during the 10 MYs preceding the 1993-94 MY was

approximately 220,000 pounds. The average annual quantity produced in

the United States and exported during the same period was approximately

120,000 pounds (farm sales weight basis). Domestic use has shown a

sharp downward trend, and exports have shown a moderate downward trend.

Accordingly, a quantity of 92,000 pounds has been determined to be a

normal year's domestic consumption and a quantity of 20,000 pounds has

been determined to be a normal year's exports. Application of the

formula prescribed by section 301(b)(14)(B) of the 1938 Act results in

a reserve supply level of 300,000 pounds.

Manufacturers and dealers reported stocks of Virginia sun-cured

(type 37) tobacco held on October 1, 1993, of 200,000 pounds. The 1993

Virginia sun-cured (type 37) tobacco crop is estimated to be 100,000

pounds. Therefore, the total supply of Virginia sun-cured (type 37)

tobacco for the 1993 MY is 300,000 pounds. During the 1993 MY, it is

estimated that disappearance will total approximately 120,000 pounds.

By deducting this disappearance from the total supply, a carryover of

180,000 pounds at the beginning of the 1994 MY is obtained.

The difference between the reserve supply level and the estimated

carryover on October 1, 1994, is 120,000 pounds. This represents the

quantity of Virginia sun-cured (type 37) tobacco which may be marketed

that will make available during such MY a supply equal to the reserve

supply level. Around 90 percent of the announced national marketing

quota is expected to be produced. Accordingly, it has been determined

that a national marketing quota of 131,000 pounds is necessary to make

available production of 120,000 pounds. Accordingly, the national

marketing quota for the 1994 MY is 131,000 pounds.

In accordance with section 313(g) of the 1938 Act, dividing the

1994 national marketing quota of 131,000 pounds by the 1989-93, 5-year

national yield of 1,286 pounds per acre results in a 1994 national

acreage allotment of 101.87 acres.

Pursuant to the provisions of section 313(g) of the 1938 Act, a

national acreage factor of 1.05 is determined by dividing the national

acreage allotment for the 1994 MY, less a national reserve of 0.08

acre, by the total of the 1994 preliminary farm acreage allotments. The

preliminary farm acreage allotments reflect the factors specified in

section 313(g) of the 1938 Act for apportioning the national acreage

allotment, less the national reserve, to old farms.

(5) Cigar-Filler and Binder (Types 42-44 and 53-55) Tobacco

The yearly average quantity of cigar-filler and binder (types 42-44

and 53-55) tobacco produced in the United States which is estimated to

have been consumed in the United States during the 10 years preceding

the 1993 MY was approximately 16.0 million pounds. The average annual

quantity of cigar-filler and binder (types 42-44 and 53-55) tobacco

produced in the United States and exported from the United States

during the 10 MYs preceding the 1993 MY was less than 100,000 pounds.

Domestic use has trended downward and exports are almost nonexistent.

Accordingly, a normal year's domestic consumption has been established

at 12.0 million pounds while a normal year's export has been

established at 60,000 pounds. Application of the formula prescribed by

section 301(b)(14)(B) of the 1938 Act results in a reserve supply level

of 34.8 million pounds.

Manufacturers and dealers report stocks of cigar-filler and binder

(types 42-44 and 53-55) tobacco held on October 1, 1993, of 30.8

million pounds. The 1993 cigar-filler and binder crop is estimated to

be 7.7 million pounds. Therefore, the total supply of cigar-filler and

binder (types 42-44 and 53-55) tobacco for the 1993 MY is 38.5 million

pounds. During the 1993 MY, it is estimated that disappearance will

total about 9.0 million pounds. By deducting this disappearance from

the total supply, a carryover of 29.5 million pounds at the beginning

of the 1994 MY is obtained.

The difference between the reserve supply level and the estimated

carryover on October 1, 1994, is 5.3 million pounds. This represents

the quantity of cigar-filler and binder tobacco which may be marketed

that will make available during such MY a supply equal to the reserve

supply level. Slightly less than 70 percent of the announced national

marketing quota may be produced. Accordingly, it has been determined

that a 1994 national marketing quota of 7.75 million pounds is

necessary to make available production of 5.3 million pounds. In

accordance with section 312(b) of the 1938 Act, it has been further

determined that the 1994 national marketing quota must be increased by

20 percent in order to avoid undue restriction of marketings. This

results in a national marketing quota for the 1994 MY of 9.3 million

pounds.

In accordance with section 313(g) of the 1938 Act, dividing the

1994 national marketing quota of 9.3 million pounds by the 1989-93, 5-

year national average yield of 1,879 pounds per acre results in a 1994

national acreage allotment of 4,949.44 acres.

Pursuant to the provisions of section 313(g), of the 1938 Act, a

national factor of 0.70 is determined by dividing the national acreage

allotment for the 1994 MY, less a national reserve of 4 acres, by the

total of the 1994 preliminary farm acreage allotments. The preliminary

farm acreage allotments reflect the factors specified in section 313(g)

of the 1938 Act for apportioning the national acreage allotment, less

the national reserve, to old farms.

(6) Cigar-Filler (Type 46) Tobacco

There is no demand for cigar-filler (type 46) tobacco. Accordingly,

the reserve supply level is zero. The estimated carryover at the start

of MY 1994 is 0.6 million pounds.

Because the estimated carryover exceeds the reserve supply level,

the quantity of tobacco which may be marketed during MY 1994 and the

1994 acreage allotment are both zero.

(7) Referendum Results for Fire-Cured (Types 21-23) and Dark Air-Cured

(Types 35-36) Tobaccos

Marketing quotas shall be in effect for the 1994 MY for fire-cured

(types 21-23) and dark air-cured (types 35-36) tobaccos. In referenda

held March 28-31, 1994, 89.8 percent of producers of fire-cured (types

21-23) tobacco and 90.0 percent of producers of dark air-cured (types

35-36) tobacco voted in favor of marketing quotas.

The following is a summary of the results of the separate

referenda:

----------------------------------------------------------------------------------------------------------------

Percent yes

State Total votes Yes votes No votes votes

----------------------------------------------------------------------------------------------------------------

Fire-Cured Tobacco

----------------------------------------------------------------------------------------------------------------

Virginia.................................................... 720 671 49 93.2

Kentucky.................................................... 2,695 2,414 281 89.6

Tennessee................................................... 2,052 1,826 226 89.0

----------------------------------------------------------------------------------------------------------------

Dark Air-Cured Tobacco

----------------------------------------------------------------------------------------------------------------

Indiana..................................................... 11 11 0 100.0

Kentucky.................................................... 4,597 4,105 492 89.3

Tennessee................................................... 1,034 959 75 92.7

----------------------------------------------------------------------------------------------------------------

Price Support

Section 106(f)(6)(A) of the 1949 Act provides that the level of

support for the 1994 crop of a kind of tobacco (other than flue-cured

and burley) shall be the level in cents per pound at which the 1993

crop of such kind of tobacco was supported, plus or minus,

respectively, the amount by which (i) the support level for the 1994

crop, as determined under section 106(b) of the 1949 Act, is greater or

less than (ii) the support level for the 1993 crop, as determined under

section 106(d) of the 1949 Act if the support level under clause (i) is

greater than the support level under clause (ii).

Accordingly, the support level for the 1994 crop of such kind of

tobacco will be the 1993 level, adjusted by the difference (plus or

minus) between the 1993 ``basic support level'' and the 1994 ``basic

support level.''

In addition, section 106(f)(6)(B) of the 1949 Act provides that to

the extent requested by the board of directors of an association,

through which price support is made available to producers (producer

association), the Secretary may reduce the support level determined

under section 106(f)(6)(A) of the 1949 Act for the respective kind of

tobacco to more accurately reflect the market value and improve the

marketability of such tobacco. Accordingly, the price support level for

a kind of tobacco set forth in this rule could be reduced if such a

request is made.

Determinations

The following levels of price support for the 1993 crops of various

kinds of tobacco were determined in accordance with section

106(f)(6)(A) of the 1949 Act:

------------------------------------------------------------------------

Support

level

Kind and type (cents

per

pound)

------------------------------------------------------------------------

Virginia fire-cured (type 21)................................. 139.5

KY-TN fire-cured (types 22-23)................................ 146.4

Dark air-cured (types 35-36).................................. 125.5

Virginia sun-cured (type 37).................................. 123.3

Cigar-filler and binder (type 42-44 and 53-55)................ 107.4

Cigar-filler (type 46)........................................ 83.4

------------------------------------------------------------------------

Section 106(b) of the 1949 Act provides that the ``basic support

level'' for any year is determined by multiplying the support level for

the 1959 crop of such kind of tobacco by the ratio of the average of

the index of prices paid by farmers, including wage rates, interest,

and taxes (referred to as the ``parity index'') for the three previous

calendar years to the average index of such prices paid by farmers,

including wage rates, interest, and taxes for the 1959 calendar year.

For the 1994 crop year:

(1) Average parity indexes for calendar years 1990-1993 are as

follows.

------------------------------------------------------------------------

Year Index Year Index

------------------------------------------------------------------------

1990...................... 1,265 1991...................... 1,285

1991...................... 1,298 1992...................... 1,303

1992...................... 1,298 1993...................... 1,340

Average................... 1,287 Average................... 1,309

------------------------------------------------------------------------

(2) Average parity index, calendar year 1959=298.

(3) 1993 ratio of 1,287 to 298=4.32; 1994 ratio of 1,287 to

298=4.39.

(4) Ratios times 1959 support levels and 1994 increase in basic

support levels are as follows:

----------------------------------------------------------------------------------------------------------------

1959 Basic support level\1\ Increase from 1993 to

support -------------------------- 1994

Kind and type level -------------------------

------------- 1993 (cent/ 1994 (cent/ 100% (cent/ 65% (cent/

(cent/lb.) lb.) lb.) lb.) lb.)

----------------------------------------------------------------------------------------------------------------

VA 21.......................................... 38.8 168.4 170.3 1.9 1.2

KY-Tenn 22-23.................................. 38.8 168.4 170.3 1.9 1.2

KY-Tenn 35-36.................................. 34.5 149.7 151.5 1.8 1.2

VA 37.......................................... 34.5 149.7 151.5 1.8 1.2

Cigar-filler and binder 42-44, 54-55........... 28.6 124.1 125.6 1.5 1.0

Cigar-filler 46................................ 29.7 128.9 130.4 1.5 1.0

----------------------------------------------------------------------------------------------------------------

\1\1993 ratio is 4.32, 1994 ratio is 4.39.

Section 106(d) of the 1949 Act provides that the Secretary of

Agriculture may reduce the level of support which would otherwise be

established for any grade of such kind of tobacco which the Secretary

determines will likely be in excess supply. In addition, the weighted

average of the level of support for all eligible grades of such tobacco

must, after such reduction, reflect not less than 65 percent of the

increase in the support level for such kind of tobacco which would

otherwise be established under section 106 of the Act if the support

level is higher than the support level for the preceding crop. Before

any such reduction is made, the Secretary must consult with the

associations handling price support loans and consideration must be

given to the supply and anticipated demand of such tobacco, including

the effect of such reduction on other kinds of quota tobacco. In

determining whether the supply of any grade of any kind of tobacco of a

crop will be excessive, the Secretary shall take into consideration the

domestic supply, including domestic inventories, the amount of such

tobacco pledged as security for price support loans, anticipated

domestic and export demand, based on the maturity, uniformity, and

stalk position of such tobacco.

For MY 1994, the flue-cured support level was increased by 65

percent of the formula increase to within about 9 percent of 1993's

average market price. For the kinds of tobacco that are the subject of

this rule, MY 1993 prices were further above the support level, and

overall loan receipts remained low. Only loan placements for cigar-

filler and binder (types 42-44 and 53-55) were as much as 10 percent of

production for MY 1993. Although fire-cured (type 21) and Virginia sun-

cured (type 37) supply-use ratios suggest slightly short supplies,

their respective loan associations prefer lower price support levels.

Therefore, for fire-cured tobacco (type 21), Virginia sun-cured tobacco

(type 37), and cigar-filler and binder tobacco (types 42-44 and 53-55),

the MY 1994 support levels consist of the 1993 support levels increased

by 65 percent of the difference between the 1994 ``basic support

level'' and the 1993 ``basic support level.'' The supply-use ratios for

Kentucky-Tennessee fire-cured (types 22-23) and dark air-cured (types

35-36) suggest adequate supplies. Accordingly, for these tobaccos, the

MY 1994 support level consists of the MY 1993 level of support

increased by the difference between the MY 1994 ``basic support level''

and the MY 1993 ``basic support level.'' Also, chewing tobacco, smoking

tobacco, and snuff manufacturing formulas limit the substitutability of

one of these kinds of tobacco for another. Cigarettes, the principal

outlet for flue-cured and burley tobaccos, do not require any of these

six kinds of tobacco in their blends.

Accordingly, the following determinations announced by the

Secretary of Agriculture on March 1, 1994, in accordance with section

106(f)(8)(A) of the 1949 Act are established for MY 1994 for fire-cured

(type 21), fire-cured (types 22-23), dark air-cured (types 35-36),

Virginia sun-cured (type 37), cigar-filler and binder (types 42-44 and

53-55), and cigar-filler (type 46) tobaccos.

------------------------------------------------------------------------

Support

level

Kind and type (cents

per

pound)

------------------------------------------------------------------------

Virginia fire-cured (type 21)................................. 140.7

Kentucky-Tennessee fire-cured (types 22-23)................... 148.3

Dark air-cured (types 35-36).................................. 127.3

Virginia sun-cured (type 37).................................. 124.5

Cigar-filler and binder (types 42-44 and 53-55)............... 108.4

Cigar-filler (type 46)........................................ 84.4

------------------------------------------------------------------------

List of Subjects

7 CFR Part 723

Acreage allotments, Marketing quotas, Penalties, Reporting and

recordkeeping requirements, Tobacco.

7 CFR Part 1464

Loan programs-agriculture, Price support programs, Reporting and

recordkeeping requirements, Tobacco, Warehouses.

Accordingly, 7 CFR parts 723 and 1464 are amended as follows:

PART 723--TOBACCO

1. The authority citation for 7 CFR part 723 continues to read as

follows:

Authority: 7 U.S.C. 1301, 1311-1314, 1314-1, 1314c, 1314d,

1314f, 1314h, 1315, 1316, 1363, 1372-75, 1377-1379, 1421, 1445-1,

and 1445-2.

2. Section 723.113 is amended by:

A. Redesignating existing text as paragraph (a), and

B. Adding paragraph (b) to read as follows:

Sec. 723.113 Fire-cured (type 21) tobacco.

* * * * *

(b) The 1994-crop national marketing quota is 2.15 million pounds.

3. Section 723.114 is amended by:

A. Redesignating existing text as paragraph (a), and

B. Adding paragraph (b) to read as follows:

Sec. 723.114 Fire-cured (types 22-23) tobacco.

* * * * *

(b) The 1994-crop national marketing quota is 40.4 million pounds.

4. Section 723.115 is amended by:

A. Redesignating existing text as paragraph (a), and

B. Adding paragraph (b) to read as follows:

Sec. 723.115 Dark air-cured (types 35-36) tobacco.

* * * * *

(b) The 1994-crop national marketing quota is 10.6 million pounds.

5. Section 723.116 is amended by:

A. Redesignating existing text as paragraph (a), and

B. Adding paragraph (b) to read as follows:

Sec. 723.116 Sun-cured (type 37) tobacco.

* * * * *

(b) The 1994-crop national marketing quota is 131,000 pounds.

6. Section 723.117 is amended by:

A. Redesignating existing text as paragraph (a), and

B. Adding paragraph (b) to read as follows:

Sec. 723.117 Cigar-filler and binder (types 42-44 and 53-55) tobacco.

* * * * *

(b) The 1994-crop national marketing quota is 9.3 million pounds.

7. Section 723.118 is amended by:

A. Redesignating existing text as paragraph (a), and

B. Adding paragraph (b) to read as follows:

Sec. 723.118 Cigar-filler (type 46) tobacco.

* * * * *

(b) The 1994-crop national marketing quota is zero pounds.

PART 1464--TOBACCO

8. The authority citation for 7 CFR part 1464 continues to read as

follows:

Authority: 7 U.S.C. 1421, 1423, 1441, 1445, 1445-1 and 1445-2;

15 U.S.C. 714b and 714c.

9. Section 1464.13 is amended by:

A. Redesignating existing text as paragraph (a), and

B. Adding paragraph (b) to read as follows:

Sec. 1464.13 Fire-cured (type 21) tobacco.

* * * * *

(b) The 1994-crop national price support level is 140.7 cents per

pound.

10. Section 1464.14 is amended by:

A. Redesignating existing text as paragraph (a), and

B. Adding paragraph (b) to read as follows:

Sec. 1464.14 Fire-cured (types 22-23) tobacco.

* * * * *

(b) The 1994-crop national price support level is 148.3 cents per

pound.

11. Section 1464.15 is amended by:

A. Redesignating existing text as paragraph (a), and

B. Adding paragraph (b) to read as follows:

Sec. 1464.15 Dark air-cured (types 35-36) tobacco.

* * * * *

(b) The 1994-crop national price support level is 127.3 cents per

pound.

12. Section 1464.16 is amended by:

A. Redesignating existing text as paragraph (a), and

B. Adding paragraph (b) to read as follows:

Sec. 1464.16 Virginia sun-cured (type 37) tobacco.

* * * * *

(b) The 1994-crop national price support is 124.5 cents per pound.

13. Section 1464.17 is amended by:

A. Redesignating existing text as paragraph (a), and

B. Adding paragraph (b) to read as follows:

Sec. 1464.17 Cigar-filler and binder (types 42-44 and 55-53) tobacco.

* * * * *

(b) The 1994-crop national price support level is 108.4 cents per

pound.

14. Section 1464.18 is amended by:

A. Redesignating existing text as paragraph (a), and

B. Adding paragraph (b) to read as follows:

Sec. 1464.18 Cigar-filler (type 46) tobacco.

* * * * *

(b) The 1994-crop national price support level is 84.4 cents per

pound.

Signed at Washington, DC, on May 20, 1994.

Bruce R. Weber,

Acting Administrator, Agricultural Stabilization and Conservation

Service and Executive Vice President, Commodity Credit Corporation.

[FR Doc. 94-12888 Filed 5-25-94; 8:45 am]

BILLING CODE 3410-05-P