Milk in the Central Arizona Marketing Area; Proposed Suspension of Certain Provisions of the Order

SUMMARY: This document invites written comments on a proposal to

suspend indefinitely certain provisions of the Central Arizona Federal

milk marketing order. This rule would continue a suspension that

eliminates the requirement that a cooperative association that operates

a manufacturing plant ship at least 50 percent of its receipts to other

handler pool plants to maintain pool status of its manufacturing plant.

United Dairymen of Arizona, a cooperative association that represents

nearly all of the producers who supply milk to the Central Arizona

market, has requested continuation of the suspension. The cooperative

association asserts that the suspension is necessary to prevent the

uneconomical and inefficient movement of milk.

DATES: Comments must be submitted on or before March 18, 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. Advance, unofficial copies

of such comments may be faxed to (202) 690-0552 or e-mailed to

OFB__FMMO__C[email protected]. Reference should be given to the title of

action and docket number.

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: CMC[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. 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.

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

Agricultural Marketing Agreement Act, the suspension of the following

provision of the order regulating the handling of milk in the Central

Arizona marketing area is being considered for an indefinite period

beginning April 1, 1997:

In Sec. 1131.7(c), the words ``50 percent or more of'',

``(including the skim milk and butterfat in fluid milk products

transferred from its own plant pursuant to this paragraph that is not

in excess of the skim milk and butterfat contained in member producer

milk actually received at such plant)'', and ``or the previous 12-month

period ending with the current month.''

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 20090-6456, by the 15th day

after 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 suspension is to be effective.

All written submissions made pursuant to this notice will be made

[[Page 9382]]

available for public inspection in the Dairy Division during regular

business hours (7 CFR 1.27(b)).

Statement of Consideration

The proposed rule would continue to suspend certain provisions of

the Central Arizona order for an indefinite period beginning April 1,

1997. The proposed suspension would continue to remove the requirement

that a cooperative association which operates a manufacturing plant in

the marketing area must ship at least 50 percent of its milk supply

during the current month or the previous 12-month period ending with

the current month to other handlers' pool plants to maintain the pool

status of its manufacturing plant.

The order permits a cooperative association's manufacturing plant,

located in the marketing area, to be a pool plant if at least 50

percent of the producer milk of members of the cooperative association

is physically received at pool plants of other handlers during the

current month or the previous12-month period ending with the current

month.

Continuation of the current suspension was requested by United

Dairymen of Arizona (UDA), a cooperative association that represents

nearly all of the dairy farmers who supply the Central Arizona market.

UDA contends that the continued pool status of their manufacturing

plant would be threatened if the suspension is not continued. UDA

states that the same marketing conditions that warranted the suspension

for the past two years still exist. UDA maintains that members who

increased their milk production to meet the projected demands of fluid

handlers for distribution into Mexico continue to suffer the adverse

impact of the collapse of the Mexican peso. Absent a suspension, UDA

projects that costly and inefficient movements of milk would have to be

made to maintain pool status of producers who have historically

supplied the market and to prevent disorderly marketing in the Central

Arizona marketing area.

Accordingly, it may be appropriate to suspend the aforesaid

provisions beginning April 1, 1997, for an indefinite period.

List of Subjects in 7 CFR Part 1131

Milk marketing orders.

The authority citation for 7 CFR Part 1131 continues to read as

follows:

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

Dated: February 24, 1997.

Richard M. McKee,

Director, Dairy Division.

[FR Doc. 97-5114 Filed 2-28-97; 8:45 am]

BILLING CODE 3410-02-P