Cotton Research and Promotion Program: Determination of Whether To Conduct a Referendum Regarding 1990 Amendments to the Cotton Research and Promotion Act

DEPARTMENT OF AGRICULTURE

[CN-96-006]

Cotton Research and Promotion Program: Determination of Whether

To Conduct a Referendum Regarding 1990 Amendments to the Cotton

Research and Promotion Act

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Notice.

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

SUMMARY: This notice announces the Department's view, based on a review

by the Agricultural Marketing Service (AMS), that it is not necessary

to conduct a referendum among producers and importers on continuation

of the 1990 amendments to the Cotton Research and Promotion Act. The

1990 amendments require the Secretary of Agriculture, once every five

years, to conduct a review to determine whether to hold a referendum.

The two major changes to the Cotton Research and Promotion Program made

by the 1990 amendments were the elimination of assessment refunds to

producers and a new assessment levied on imported cotton and the cotton

content of imported products. Although USDA is of the view that a

referendum is not needed, it will initiate a sign-up period as required

by the Act, to allow cotton producers and importers to request a

referendum.

FOR FURTHER INFORMATION CONTACT: Craig Shackelford, Chief, Cotton

Research and Promotion Staff, Cotton

[[Page 52773]]

Division, AMS, USDA, Stop 0224, 1400 Independence Avenue, SW,

Washington D.C., 20250-0224. Telephone number (202) 720-2259.

SUPPLEMENTARY INFORMATION: In July 1991, the Agricultural Marketing

Service (AMS) implemented the 1990 amendments to the Cotton Research

and Promotion Act. These amendments provided for: (1) importer

representation on the Cotton Board by an appropriate number of persons

to be determined by the Secretary who import cotton or cotton products

into the U.S., and are selected by the Secretary from nominations

submitted by importer organizations certified by the Secretary; (2)

assessments levied on imported cotton and cotton products at a rate

determined in the same manner as for U.S. cotton; (3) increasing the

amount the Secretary can be reimbursed for conduct of a referendum from

$200,000 to $300,000; (4) reimbursing government agencies who assist in

administering the collection of assessments on imported cotton and

cotton products; and (5) terminating the right of producers to demand a

refund of assessments.

Results of the July 1991 referendum showed that of the 46,220 valid

ballots received; 27,879, or 60 percent of the persons voting, favored

the amendments to the Order, and 18,341 or 40 percent opposed the

amendments. AMS developed implementing regulations for the import

assessment effective August 1, 1992, the elimination of the producer

refund effective September 1, 1991, and provided for importer

representation on the Cotton Board effective January 1, 1993. The

addition of these new members brought the Cotton Board's membership to

25 (21 producer members and 4 importer members).

The Department has prepared a report which describes the impact of

the Cotton Research and Promotion Program on the cotton industry and

the views of those receiving its benefits. The report is based on a

review conducted by AMS to determine whether to hold a referendum of

producers and importers on continuation of the 1990 Act amendments. The

review report is available upon written request to the Chief of the

Cotton Research and Promotion Staff at the address provided above.

Information included in the report was gathered from a variety of

sources in order to develop a broad-base of opinion and data. Comments

were solicited from persons who pay assessments as well as from

organizations representing the cotton industry. Economic data was

reviewed in order to report on the general climate of the cotton

industry. Finally, a number of independent sources of information were

reviewed to help identify perspectives from outside the program.

The review report cited that the 1990 amendments to the Cotton

Research and Promotion Act were successfully implemented and are

operating as intended. The General Accounting Office found that USDA

implemented rules and regulations consistent with the intention of the

1990 Act amendments, but criticized some of the procedures USDA

implemented for exemptions and reimbursements of import assessments.

However, USDA addressed these concerns and considered alternatives

during the implementing rulemaking process. The U.S. Trade

Representative found that the framework for implementing the import

assessment was consistent with trade policy.

The report also noted that there is a general consensus within the

cotton industry that the Cotton Research and Promotion Program and, in

particular, the import assessment and the elimination of refunds are

operating as intended. Written comments, survey responses and economic

data support this conclusion. Industry comments cited examples of how

the additional funding has already yielded benefits by increasing the

demand for cotton and by the successful introduction of new cotton

apparel products.

USDA found no compelling reason to conduct a referendum regarding

the 1990 Act amendments to the Cotton Research and Promotion Order

although certain program participants support a referendum. Therefore,

USDA will allow all eligible persons to request the conduct of a

continuance referendum on the 1990 amendments through a sign-up period.

The sign-up period will be conducted November 25, 1996 through February

22, 1997. Eligible producers and importers may sign-up to request such

a referendum at the county office of the Farm Service Agency (FSA), or

by mailing such a request to the Secretary. The Secretary will conduct

a referendum if requested by 10 percent or more of the number of cotton

producers and importers voting in the most recent (July 1991)

referendum, with not more than 20 percent of such requests from

producers in one state or importers of cotton.

Eligible producers who wish to participate in the sign-up period to

request a referendum may visit the FSA county office or county agent,

serving the county in which the producer's farm is located. Importers

who wish to request a referendum should mail such a request to USDA,

AMS, Cotton Division, Stop 0224, 1400 Independence Avenue, S.W.,

Washington, DC, 20250-0224. All requests must be made in person or

postmarked by February 22, 1997.

The Secretary will announce the results of the sign-up period in a

separate notice in the Federal Register.

Authority: 7 U.S.C. 2101-2118.

Dated: September 30, 1996.

Lon Hatamiya,

Administrator.

[FR Doc. 96-25704 Filed 10-07-96; 8:45 am]

BILLING CODE 3410-02-P