Milk in the New England and New York-New Jersey Marketing Areas; Proposed Termination or Suspension of Certain Provisions of the Orders

DEPARTMENT OF AGRICULTURE

7 CFR Parts 1001 and 1002

[DA-94-09]

Milk in the New England and New York-New Jersey Marketing Areas;

Proposed Termination or Suspension of Certain Provisions of the Orders

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed termination or suspension of rules.

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SUMMARY: This document invites written comments on a proposal to either

terminate or for 1994 suspend the seasonal incentive plans for paying

producers under the New England and New York-New Jersey Federal milk

orders. This was requested by cooperative associations that represent

about one-half of the milk supply for each market. The cooperatives

contend that the payment plans, which have been suspended since 1991,

are no longer effective in altering producer seasonal milk production

patterns.

DATES: Comments are due on or before March 11, 1994.

ADDRESSES: Comments (two copies) should be filed with the USDA/AMS/

Dairy Division, Order Formulation Branch, room 2971, South Building,

P.O. Box 96456, Washington, DC 20090-6456.

FOR FURTHER INFORMATION CONTACT: Gino M. Tosi, Marketing Specialist,

USDA/AMS/Dairy Division, Order Formulation Branch, room 2971, South

Building, P.O. Box 96456, Washington, DC 20090-6456 (202) 690-1366.

SUPPLEMENTARY INFORMATION: The Regulatory Flexibility Act (5 U.S.C.

601-612) requires the Agency to examine the impact of a proposed rule

on small entities. Pursuant to 5 U.S.C. 605(b), the Administrator of

the Agricultural Marketing Service has certified that the proposed

actions would not have a significant economic impact on a substantial

number of small entities. Such actions would lessen the regulatory

impact of the order on dairy farmers and would have no impact on

regulated handlers.

The Department is issuing this proposed rule in conformance with

Executive Order 12866.

This proposed rule has been reviewed under Executive Order 12778,

Civil Justice Reform. This rule is not intended to have a retroactive

effect. If adopted, this proposed rule will not preempt any state or

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

irreconcilable conflict with this rule.

The Agricultural Marketing Agreement Act of 1937, as amended (7

U.S.C. 601-674), 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 provisions of the

order, or any obligation imposed in connection with the order is not in

accordance with law and request a modification of an order or to be

exempted from the order. A handler is afforded the opportunity for a

hearing on the petition. After a 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

its 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 the date of the entry of the ruling.

Notice is hereby given that, pursuant to the provisions of the

Agricultural Marketing Agreement Act, the termination, or as an

alternative the suspension for the months of March through June 1994

and August through November 1994, of the following provisions of the

order regulating the handling of milk in the New England and New York-

New Jersey marketing areas are being considered:

1. In Sec. 1001.62, paragraphs (c) and (d).

2. In Sec. 1002.61, paragraphs (d) and (e).

All persons who want to send written data, views, or arguments

about the proposed termination or suspension of provisions should send

two copies of them to the USDA/AMS/Dairy Division, Order Formulation

Branch, room 2971, South Building, P.O. Box 96456, Washington, DC

20090-6456, not later than 30 days after the publication of this notice

in the Federal Register. The period for filing comments is limited to

15 days because a longer period would not provide the time needed to

complete the required procedures before the requested termination or

suspension is to be effective.

The comments that are received will be made available for public

inspection in the Dairy Division during normal business hours (7 CFR

1.27(b)).

Statement of Consideration

The proposed actions would either terminate, or as an alternative

suspend for the months of March through June 1994 and August through

November 1994, the seasonal incentive plans for paying producers under

the New England and New York-New Jersey Federal milk orders. The

seasonal payment plans provide for making deductions from prices paid

to producers during the normal flush-production months of March through

June. The deducted amounts are returned to producers during the normal

short-production months of August through November. The plan is

intended to provide an incentive for dairy farmers to level out the

seasonal milk production pattern.

The actions were requested by several cooperative associations

representing dairy farmers who supply handlers regulated by the Federal

milk marketing orders for the New England and New York-New Jersey

marketing areas. Collectively, these cooperatives represent about 51

percent of the producers associated with the New England marketing area

and about 48 percent of the producers associated with the New York-New

Jersey marketing area.

The cooperatives maintain that the ``Louisville'' seasonal payment

plans have not had the effect of reducing the large seasonal spring-to-

fall swings in milk production as was intended when they were first

provided for in these orders some 25 years ago. They maintain that the

seasonality of milk production in the Northeast has not been reduced

significantly. The cooperatives assert that the seasonal payment plans

are largely ineffective because of a general lack of awareness about

the plan in the dairy farming community. They also contend that the

price differentials are too low to provide an incentive for dairy

farmers to modify their seasonal production patterns. The cooperatives

also expressed concern about the impact of reducing returns to

producers during the spring months when producer milk prices are

already generally lower than during other times of the year.

The cooperatives seeking actions noted that the seasonal incentive

payment plans have been repeatedly suspended since 1991. They contend

that the prior suspension actions are further evidence that the plans

are no longer necessary or effective. These past suspensions, according

to the cooperatives, were supported by the need for dairy farmers to

have additional monies available during the spring months in which

prices to producers declined precipitously. The cooperatives expect

that milk prices will decline in the spring of 1994, which will

continue to put a cash flow pressure on dairy farmers during a time of

increased cash needs for spring planting.

Therefore, comments are sought to determine whether the

aforementioned provisions should be terminated or, in the alternative,

suspended for the months of March through June 1994 and August through

November 1994.

List of Subjects in 7 CFR Parts 1001 and 1002

Milk marketing orders.

The authority citation for 7 CFR part 1001 and 1002 continues to

read as follows:

Authority: Secs. 1-19, 48 Stat. 31, as amended; 7 U.S.C. 601-

675.

Dated: February 15, 1994.

L.P. Massaro,

Acting Administrator.

[FR Doc. 94-4119 Filed 2-23-94; 8:45 am]

BILLING CODE 3410-02-P