Milk in the New Mexico-West Texas Marketing Area; Notice of Proposed Suspension of Certain Provisions of the Order

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1138

[DA-97-07]

Milk in the New Mexico-West Texas Marketing Area; Notice of

Proposed Suspension of Certain Provisions of the Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed suspension of rule.

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SUMMARY: This document invites written comments on a proposal that

would continue the suspension of certain segments of the pool plant and

producer milk definitions of the New Mexico-West Texas order for a two-

year period. Associated Milk Producers, Inc. (AMPI), a cooperative

association that represents a substantial number of the producers who

supply milk to the market, has requested continuation of the

suspension. The cooperative asserts that continuation of the suspension

is necessary to ensure that dairy farmers who have historically

supplied the New Mexico-West Texas order will continue to have their

milk priced under the order without incurring costly and inefficient

movements of milk.

DATES: Comments are due no later than June 12, 1997.

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: Clifford M. Carman, Marketing

Specialist, USDA/AMS/Dairy Division, Order Formulation Branch, Room

2971, South Building, P.O. Box 96456, Washington, DC 20090-6456,

(202)720-9368, e-mail address: Clifford __ M __ C[email protected].

SUPPLEMENTARY INFORMATION: The Department is issuing this proposed rule

in conformance with Executive Order 12866.

This proposed rule has been reviewed under Executive Order 12988,

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 the 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 request

modification or exemption from such order by filing 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. 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.

Small Business Consideration

In accordance with the Regulatory Flexibility Act (5 U.S.C. 601 et

seq.), the Agricultural Marketing Service has considered the economic

impact of this action on small entities and has certified that this

proposed rule will not have a significant economic impact on a

substantial number of small entities. For the purpose of the Regulatory

Flexibility Act, a dairy farm is considered a ``small business'' if it

has an annual gross revenue of less than $500,000, and a dairy products

manufacturer is a ``small business'' if it has fewer than 500

employees. For the purposes of determining which dairy farms are

``small businesses,'' the $500,000 per year criterion was used to

establish a production guideline of 326,000 pounds per month. Although

this guideline does not factor in additional monies that may be

received by dairy producers, it should be an inclusive standard for

most ``small `` dairy farmers. For purposes of determining a handler's

size, if the plant is part of a larger company operating multiple

plants that collectively exceed the 500-employee limit, the plant will

be considered a large business even if the local plant has fewer than

500 employees.

For the month of March 1997, the milk of 174 producers was pooled

on the New Mexico-West Texas Federal milk order. Of these producers, 26

producers were below the 326,000-pound production guideline and are

considered small businesses. During this same period, there were 19

handlers operating pool plants under the New Mexico-West Texas order.

Twelve of these handlers would be considered small businesses.

The proposed suspension would continue the current suspension of

segments of the pool plant and producer milk definitions under the New

Mexico-West Texas order. The provisions proposed for continued

suspension limit the pooling of diverted milk. This rule would lessen

the regulatory impact of the order on certain milk handlers and would

tend to ensure that dairy farmers would continue to have their milk

priced under the order and thereby receive the benefits that accrue

from such pricing.

Interested parties are invited to submit comments on the probable

regulatory and informational impact of this proposed rule on small

entities. Also, parties may suggest modifications of this proposal for

the purpose of tailoring their applicability to small businesses.

Proposed Rule

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

Agricultural Marketing Agreement Act, the suspension of the following

provisions of the order regulating the handling of milk in the New

Mexico-West Texas marketing area is being considered for the months of

October 1, 1997, through September 30, 1999:

1. In Sec. 1138.7, paragraph (a)(1), the words ``including producer

milk diverted from the plant,'';

2. In Sec. 1138.7, paragraph (c), the words ``35 percent or more of

the producer''; and

3. In Sec. 1138.13(d), paragraphs (1), (2), and (5).

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

about the proposed suspension should send two copies of their views to

the USDA/AMS/Dairy Division, Order Formulation Branch, Room 2971, South

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

[[Page 26258]]

6456, by the 30th day after publication of this notice in the Federal

Register.

All written submissions made pursuant to this notice will be made

available for public inspection in the Dairy Division during regular

business hours (7 CFR 1.27(b)).

Statement of Consideration

The proposed suspension would continue the current suspension of

segments of the pool plant and producer milk definitions under the New

Mexico-West Texas order. The provisions that are suspended limit the

pooling of diverted milk. The proposed suspension would be in effect

from October 1997 through September 1999. The current suspension will

expire September 30, 1997.

The proposed suspension would continue the suspension of the

following:

1. The requirement that milk diverted to a nonpool plant be

considered a receipt at the distributing plant from which it was

diverted;

2. The requirement that a cooperative must deliver at least 35

percent of its milk to pool distributing plants in order to pool a

plant that the cooperative operates which is located in the marketing

area and is neither a distributing plant nor a supply plant;

3. The requirement that a producer must deliver one day's

production to a pool plant during the months of September through

January to be eligible to be diverted to a nonpool plant;

4. The provision that limits a cooperative's diversions to nonpool

plants to an amount equal to the milk it caused to be delivered to, and

physically received at, pool plants during the month; and

5. The provision that excludes from the pool milk diverted from a

pool plant to the extent that it would cause the plant to lose its

status as a pool plant.

The continuation of the current suspension was requested by

Associated Milk Producers, Inc., a cooperative association that

represents a substantial number of dairy farmers who supply the New

Mexico-West Texas market. The cooperative stated that marketing

conditions have not changed since the provisions were suspended in

1993, and therefore should be continued until restructuring of the

Federal order program is achieved as mandated in the 1996 Farm Bill.

The cooperative states that the continuation of the current

suspension is necessary to ensure that dairy farmers who have

historically supplied the New Mexico-West Texas market will continue to

have their milk priced under this order. In addition, they maintain

that the suspension would continue to provide handlers the flexibility

needed to move milk supplies in the most efficient manner and to

eliminate costly and inefficient movements of milk that would be made

solely for the purpose of pooling the milk of dairy farmers who have

historically supplied the market.

Accordingly, it may be appropriate to suspend the aforesaid

provisions from October 1, 1997, through September 30, 1999.

List of Subjects in 7 CFR Part 1138

Milk marketing orders.

The authority citation for 7 CFR Part 1138 continues to read as

follows:

Authority: 7 U.S.C. 601-674.

Dated: May 7, 1997.

Richard M. McKee,

Director, Dairy Division.

[FR Doc. 97-12501 Filed 5-12-97; 8:45 am]

BILLING CODE 3410-02-P