Spearmint Oil Produced in the Far West; Salable Quantities and Allotment Percentages for the 1995-96 Marketing Year

SUMMARY: This proposed rule would establish the quantity of spearmint

oil produced in the Far West, by class, that handlers may purchase

from, or handle for, producers during the 1995-96 marketing year. The

Spearmint Oil Administrative Committee (Committee), the agency

responsible for local administration of the marketing order for

spearmint oil produced in the Far West, recommended this rule for the

purpose of avoiding extreme fluctuations in supplies and prices, and

thus help to maintain stability in the spearmint oil market.

DATES: Comments must be received by January 17, 1995.

ADDRESSES: Interested persons are invited to submit written comments

concerning this proposed rule. Comments must be sent in triplicate to

the Docket Clerk, Fruit and Vegetable Division, AMS, USDA, Room 2525,

South Building, P.O. Box 96456, Washington, DC 20090-6456. Comments

should reference the docket number and the date and page number of this

issue of the Federal Register and will be made available for public

inspection in the Office of the Docket Clerk during regular business

hours.

FOR FURTHER INFORMATION CONTACT: Robert J. Curry, Northwest Marketing

Field Office, Marketing Order Administration Branch, Fruit and

Vegetable Division, AMS, USDA, 1220 SW Third Avenue, Room 369,

Portland, Oregon 97204; telephone: (503) 326-2724; or Caroline C.

Thorpe, Marketing Order Administration Branch, Fruit and Vegetable

Division, AMS, USDA, Room 2525, South Building, P.O. Box 96456,

Washington, DC 20090-6456; telephone: (202) 720-5127.

SUPPLEMENTARY INFORMATION: This proposed rule is issued under Marketing

Order No. 985 [7 CFR Part 985], regulating the handling of spearmint

oil produced in the Far West (Washington, Idaho, Oregon, and designated

parts of California, Nevada, Montana, and Utah). This marketing 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 (Department) is issuing this rule in

conformance with Executive Order 12866.

This proposed rule has been reviewed under Executive Order 12778,

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

proposed rule would establish the quantity of spearmint oil produced in

the Far West, by class, that may be purchased from or handled for

producers by handlers during the 1995-96 marketing year, which begins

on June 1, 1995. This proposed rule will not preempt any state or local

laws, regulations, or policies, unless they present an irreconcilable

conflict with this rule.

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 the Secretary 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 the Secretary would rule on the petition.

After the hearing the Secretary 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 in equity to review the Secretary's

ruling on the petition, provided a bill in equity is filed not later

than 20 days after date of the entry of the ruling.

Pursuant to requirements set forth in the Regulatory Flexibility

Act (RFA), the Administrator of the Agricultural Marketing Service

(AMS) has considered the economic impact of this action on small

entities.

The purpose of the RFA is to fit regulatory actions to the scale of

business subject to such actions in order that small businesses will

not be unduly or disproportionately burdened. Marketing orders issued

pursuant to the Act, and rules issued thereunder, are unique in that

they are brought about through group action of essentially small

entities acting on their own behalf. Thus, both statutes have small

entity orientation and compatibility.

There are 8 spearmint oil handlers subject to regulation under the

marketing order and approximately 260 producers of spearmint oil in the

regulated production area. Of the 260 producers, approximately 160

producers hold Class 1 (Scotch) oil allotment base, and approximately

145 producers hold Class 3 (Native) oil allotment base. Small

agricultural service firms are defined by the Small Business

Administration [13 CFR 121.601] as those having annual receipts of less

than $5,000,000, and small agricultural producers have been defined as

those whose annual receipts are less than $500,000. A minority of

producers and handlers of Far West spearmint oil may be classified as

small entities.

The Far West spearmint oil industry is characterized by producers

whose farming operations generally involve more than one commodity and

whose income from farming operations is not exclusively dependent on

the production of spearmint oil. The U.S. production of spearmint oil

is concentrated in the Far West, primarily Washington, Idaho, and

Oregon (part of the area covered by the marketing order). Spearmint oil

is also produced in the Midwest. The production area covered by the

marketing order accounts for approximately 75 percent of the annual

U.S. production of spearmint oil.

Pursuant to authority contained in Secs. 985.50, 985.51, and 985.52

of the marketing order, the Committee recommended the salable

quantities and allotment percentages for the 1995-96 marketing year at

its October 5, 1994, meeting. The Committee recommended the

establishment of a salable quantity and allotment percentage for Scotch

spearmint oil by a unanimous vote, and a seven to one vote,

respectively. The member voting in opposition favored the establishment

of a higher salable quantity that would have resulted in a higher

allotment percentage. The Committee also recommended the establishment

of a salable quantity and allotment percentage for Native spearmint oil

by a unanimous vote.

This proposed rule would establish a salable quantity of 908,531

pounds and an allotment percentage of 51 percent for Scotch spearmint

oil, and a salable quantity of 906,449 pounds and an allotment

percentage of 46 percent for Native spearmint oil. This rule would

limit the amount of spearmint oil that handlers may purchase from, or

handle for, producers during the 1995-96 marketing year, which begins

on June 1, 1995. Salable quantities and allotment percentages have been

placed into effect each season since the marketing order's inception in

1980.

The proposed salable quantity and allotment percentage for each

class of spearmint oil for the 1995-96 marketing year is based upon the

Committee's recommendation and the following data and estimates:

(1) Class 1 (Scotch) Spearmint Oil--

(A) Estimated carry-in on June 1, 1995--57,325 pounds. This number

is derived by subtracting the estimated 1994-95 marketing year trade

demand of 900,000 pounds from the revised 1994-95 marketing year total

available supply of 957,325 pounds.

(B) Estimated trade demand (domestic and export) for the 1995-96

marketing year--950,000 pounds. This number is an estimate based on the

average of total annual sales made between 1980 and 1993, handler

estimates, Far West percentage of the North American market share, and

information provided by producers and buyers.

(C) Salable quantity required from 1995-96 regulated producttion--

892,675 pounds. This number is the difference between the estimated

1995-96 marketing year trade demand and the estimated carry-in on June

1, 1995.

(D) Total allotment base for the 1995-96 marketing year--1,781,433

pounds.

(E) Computed allotment percentage--50.1 percent. This percentage is

computed by dividing the required salable quantity by the total

allotment base.

(F) Recommended allotment percentage--51 percent.

(G) The Committee's recommended salable quantity--908,531 pounds.

(2) Class 3 (Native) Spearmint Oil--

(A) Estimated carry-in on June 1, 1995--156,733 pounds. This number

is derived by subtracting the estimated 1994-95 marketing year trade

demand of 1,150,000 pounds from the revised 1994-95 marketing year

total available supply of 1,306,733 pounds.

(B) Estimated trade demand (domestic and export) for the 1995-96

marketing year--1,050,000 pounds. This number is an estimate based on

the average of total annual sales made between 1980 and 1993, handler

estimates, and information provided by producers and buyers.

(C) Salable quantity required from 1995-96 regulated production--

893,267 pounds. This number is the difference between the estimated

1995-96 marketing year trade demand and the estimated carry-in on June

1, 1995.

(D) Total allotment base for the 1995-96 marketing year--1,970,542

pounds.

(E) Computed allotment percentage--45.3 percent. This percentage is

computed by dividing the required salable quantity by the total

allotment base.

(F) Recommended allotment percentage--46 percent.

(G) The Committee's recommended salable quantity--906,449 pounds.

The salable quantity is the total quantity of each class of oil

which handlers may purchase from or handle on behalf of producers

during a marketing year. Each producer is allotted a share of the

salable quantity by applying the allotment percentage to the producer's

allotment base for the applicable class of spearmint oil.

The Committee's recommended salable quantities of 908,531 pounds

and 906,449 pounds, and allotment percentages of 51 percent and 46

percent for Scotch and Native spearmint oils, respectively, are based

on anticipated 1995-96 marketing year supply and trade demand.

The recommended salable quantity and allotment percentage for

Native spearmint oil reflects the Committee's expectation that demand

during the 1995-96 marketing year will approximate the demand initially

anticipated for the 1994-95 marketing year. On the other hand, the

relatively higher recommended salable quantity and allotment percentage

for Scotch spearmint oil for the 1995-96 marketing year demonstrates

that the Committee is concerned with the increasing Scotch spearmint

oil production both inside and outside the marketing order production

area, and the industry's desire to maintain a significant share of the

North American market.

The proposed salable quantities are not expected to cause a

shortage of spearmint oil supplies. Any unanticipated or additional

market demand for spearmint oil which may develop during the marketing

year can be satisfied by an increase in the salable quantity. Both

Scotch and Native spearmint oil producers who produce more than their

annual allotments during the 1994-95 season may transfer such excess

spearmint oil to a producer with spearmint oil production less than his

or her annual allotment or put it into the reserve pool.

This proposed regulation, if adopted, would be similar to those

which have been issued in prior seasons. Costs to producers and

handlers resulting from this proposed action are expected to be offset

by the benefits derived from improved returns.

The establishment of these salable quantities and allotment

percentages would allow for anticipated market needs based on

historical sales, changes and trends in production and demand, and

information available to the Committee. Adoption of this proposed rule

would also provide spearmint oil producers with information on the

amount of oil which should be produced for next season.

Based on available information, the Administrator of the AMS has

determined that the issuance of this proposed rule would not have a

significant economic impact on a substantial number of small entities.

A 30-day comment period is provided to allow interested persons to

respond to this proposal. All written comments received within the

comment period will be considered before a final determination is made

on this matter.

List of Subjects in 7 CFR Part 985

Marketing agreements, Oils and fats, Reporting and recordkeeping

requirements, and Spearmint oil.

For the reasons set forth in the preamble, 7 CFR Part 985 is

proposed to be amended as follows:

PART 985--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. A new Sec. 985.214 is added to read as follows:

[Note: This action, if adopted, will not appear in the Code of

Federal Regulations.]

Sec. 985.214 Salable quantities and allotment percentages--1995-96

marketing year.

The salable quantity and allotment percentage for each class of

spearmint oil during the marketing year beginning on June 1, 1995,

shall be as follows:

(a) Class 1 (Scotch) oil--a salable quantity of 908,531 pounds and

an allotment percentage of 51 percent.

(b) Class 3 (Native) oil--a salable quantity of 906,449 pounds and

an allotment percentage of 46 percent.

Dated: December 9, 1994.

Eric M. Forman,

Deputy Director, Fruit and Vegetable Division.

[FR Doc. 94-30787 Filed 12-14-94; 8:45 am]

BILLING CODE 3410-02-P