Small Hog Operation Payment Program

DEPARTMENT OF AGRICULTURE

Farm Service Agency

7 CFR Part 761

RIN 0560-AF70

Small Hog Operation Payment Program

AGENCY: Farm Service Agency, USDA.

ACTION: Interim rule with request for comments.

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SUMMARY: This interim rule amends the regulations for the Small Hog

Operations Payment (SHOP) Program. Enactment of the 1999 Emergency

Supplemental Appropriations Act has made more funds available for the

SHOP program. This will allow the Department to spend up to $175

million (including the $50 million allocated in the original, February

10, 1999, (64 FR 6495) interim rule). Payments will be made to

producers in the order in which they were filed, to the extent that

funds are available. As amended in this rule, the SHOP program

regulations would allow hog operations to receive up to $5,000 in total

payments at a total rate of $10 per each eligible slaughter hog and

$3.60 for eligible feeder pigs sold during the relevant marketing

period. Also, this rule expands the program's eligibility provisions to

allow operations to qualify so long as the operation did not sell 2,500

or more hogs during the relevant marketing period. In the original

rule, the limit was set at less than 1,000 hogs. SHOP program payments

already received by an eligible operation will be deducted from the

expanded eligible amount an operation may have under the new rules.

DATES: Effective August 26, 1999. Comments on this rule must be

received by September 29, 1999, in order to be assured of

consideration. Comments on the information collections in this rule

must be received by October 29, 1999, in order to be assured of

consideration.

ADDRESSES: Comments should be mailed to Grady Bilberry, Director, Price

Support Division (PSD), Farm Service Agency (FSA), United States

Department of Agriculture (USDA), STOP 0512, 1400 Independence Avenue,

SW, Washington, DC 20250-0512 or Candace Thompson, Branch Chief, PSD,

FSA, USDA, at the same address; telephone: (202) 720-7901; e-mail:

[email protected]. Comments may be inspected in the

Office of the Director, PSD, FSA, USDA, Room 4095 South Building,

Washington, DC, between 7:30 a.m. and 4:30 p.m., Monday through Friday,

except holidays. A copy of this interim rule is available on the PSD

home page at

http://www.fsa.usda.gov/dafp/psd/.

FOR FURTHER INFORMATION CONTACT: Candace Thompson, (202) 720-6689.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This interim rule is in conformance with Executive Order 12866 and

has been determined to be economically significant and therefore has

been reviewed by the Office of Management and Budget.

Regulatory Flexibility Act

It has been determined that the Regulatory Flexibility Act is not

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applicable to this rule because the Farm Service Agency is not required

by 5 U.S.C. 553 or any other provision of law to publish a notice of

proposed rulemaking with respect to the subject matter of this rule.

Environmental Evaluation

It has been determined by an environmental evaluation that this

action will have no significant impact on the quality of the human

environment. Therefore, an Environmental Impact Statement is not

needed.

Executive Order 12988

This rule has been reviewed in accordance with Executive Order

12988. The provisions of this rule preempt State laws to the extent

such laws are inconsistent with the provisions of this rule. Before any

legal action may be brought regarding determinations of this rule, the

administrative appeal provisions set forth at 7 CFR part 780 must be

exhausted.

Executive Order 12372

This program is not subject to the provisions of Executive Order

12372, which require intergovernmental consultation with State and

local officials. See the notice related to 7 CFR part 3014, subpart V,

published June 24, 1983 (48 FR 29115).

Unfunded Mandates Reform Act of 1995

This rule contains no Federal mandates under the regulatory

provisions of Title II of the Unfunded Mandates Reform Act of 1995

(UMRA) for State, local, and tribal governments or the private sector.

Thus, this rule is not subject to the requirements of sections 202 and

205 of the UMRA.

Paperwork Reduction Act of 1995

In accordance with the Paperwork Reduction Act of 1995, FSA has

submitted an emergency information collection request (ICR) to OMB for

the approval of the Small Hog Operation Payment Program report as

necessary for the proper functioning of the program.

Title: Small Hog Operation Payment Program.

OMB Control Number: 0560-0193.

Type of Request: Reinstatement with change.

Abstract: Hog operations are eligible to receive direct payments

provided they make certifications that attest to their eligibility to

receive such payments. These operations must certify: (1) The number of

hogs marketed; (2) that the hogs were marketed during the last 6 months

of 1998; (3) that the hogs were not marketed under a fixed-price or

cost-plus contract; and (4) that the operation was still in the

business of farming at the time of the SHOP Program request. The

information collection will be used by FSA to approve Form FSA-1042 or

to determine the program eligibility of the hog operation in accordance

with this subpart. FSA considers the information collected essential to

prudent eligibility determinations and payment calculations. The

eligibility requirements have been established to target the direct

payments towards smaller operations.

Estimate of Burden: Public reporting burden for this collection of

information is estimated to average 15 minutes per response.

Respondents: Hog Operations.

Estimated Number of Respondents: 55,000.

Estimated Number of Responses per Respondent: 1.

Estimated Total Annual Burden on Respondents: 13,750 hours.

Proposed topics for comment include: (a) Whether the collection of

information is necessary for the proper performance of the functions of

the agency, including whether the information will have practical

utility; (b) the accuracy of the agency's estimate of burden including

the validity of the methodology and assumptions used; (c) ways to

enhance the quality, utility, and clarity of the information collected;

or (d) ways to minimize the burden of the collection of the information

on those who are to respond, including through the use of appropriate

automated, electronic, mechanical, or other technological collection

techniques or other forms of information technology. Comments should be

sent to the Desk Officer for Agriculture, Office of Information and

Regulatory Affairs, Office of Management and Budget, Washington, DC

20503 and to Grady Bilberry, Director, Price Support Division, Farm

Service Agency, United States Department of Agriculture, STOP 0512,

1400 Independence Avenue, SW, Washington, DC 20250-0512, telephone

(202) 720-7901.

Executive Order 12612

It has been determined that this rule does not have sufficient

Federalism implications to warrant the preparation of a Federalism

Assessment. The provisions contained in this rule will not have a

substantial direct effect on States or their political subdivisions, or

on the distribution of power and responsibilities among the various

levels of government.

Background

On February 10, 1999, regulations were published, by an interim

rule (64 FR 6495), to establish the SHOP program.

The SHOP program utilizes funds available under clause (3) of

section 32 of the Act of August 24, 1935, as amended (7 U.S.C. 612c).

That clause permits Section 32 funds to be used to ``[r]eestablish

farmers'' purchasing power by making payments in connection with the

normal production of any agricultural commodity for domestic

consumption.'' However, by statute, normally no more than 25 percent of

the available Section 32 funds can be used in a fiscal year for any one

agricultural commodity or the products therefrom.

Taking into consideration that limit, $50 million in assistance

were made available under the original SHOP program rule. Subsequently,

however, the 1999 Emergency Supplemental Appropriations Act (Pub. L.

106-31, enacted May 21, 1999) appropriated $145 million to be added to

the Section 32 fund and allowed the Secretary, for fiscal year 1999, to

waive the 25 percent limitation. Because of the availability of these

additional funds, it has been determined that the SHOP program's

eligibility provisions should be expanded and its payment rates

increased. Before, a hog operation could, up to February 12, 1999,

sign-up to qualify for up to $2,500 in SHOP program payments at $5 per

eligible slaughter hog and $1.80 per eligible feeder pig hog, for hogs

and feeder pigs marketed in the period from July 1, 1998 through

December 31, 1998. However, no payment would be made if the operation

marketed 1,000 or more head during that period. Under the new

provisions of this interim rule, sign-up has been extended through

September 24, 1999, the $2,500 has been increased to $5,000, the $5

payment rate increased to $10, the $1.80 payment rate increased to

$3.60, and the maximum allowable marketings raised from less than 1,000

to less than 2,500. Payments already received will be deducted from the

new benefit calculations and payments will continue to be subject to

the proviso that, if a hog operation is owned by one or more

individuals who have a gross revenue of $2.5 million or more in farming

and ranching operations in calendar year 1998, the payment to the

operation will be reduced by a pro rata amount based upon the ownership

interest of such entity or individual. All other eligibility

requirements as specified in the original rule also remain unchanged.

The new eligibility

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requirements are consistent with the purposes of the original program,

some of the comments in response to the original rule, and with the

available funding. The regulations specify that no more than $175

million in total may be expended under the SHOP program with the claims

of old claimants given a first priority. For new claimants, the claims

will be handled first-come, first-served, to the extent the $175

million total has not been expended. However, it is expected that the

total claims will be considerably below that amount.

Hog operations may apply in person at county FSA offices during

regular business hours by the close of business September 24, 1999, and

at that time complete the application Form FSA-1042. Hog operations who

applied for and received payment under the February 1999 SHOP program

interim rule do not need to re-apply. Additional payments will be

issued based upon the original application. Hog operations needing an

application may request the SHOP program application by mail,

telephone, or facsimile from their designated county FSA office, or

obtain the application via the Internet. The Internet website is

located at www.fsa.usda.gov/dafp/psd/. The completed application, Form

FSA-1042, must be received by the hog operations' local county FSA

office by the September 24 deadline and can be returned in person, by

mail, or by facsimile.

Because of the poor market conditions that have recently faced hog

operations as specified in the February rule, particularly that have

faced small hog operations, a delay in making this assistance available

would be contrary to the public interest and the purpose of the statute

authorizing additional assistance. Likewise and for those reasons it

has been determined that to the extent that Section 801 of the Small

Business Regulatory Enforcement Fairness Act of 1996 would otherwise

apply, delaying this rule for Congressional review would be contrary to

the public interest. Accordingly, it has been determined that this rule

will be made effective immediately upon filing for public inspection at

the Office of the Federal Register.

List of Subjects in 7 CFR Part 761

Direct payments to small hog operations, Reporting and

recordkeeping requirements.

Accordingly, 7 CFR Part 761 is amended to read as follows:

PART 761--SMALL HOG OPERATION PAYMENT PROGRAM

1. The authority citation for part 761 continues to read as

follows:

Authority: 7 U.S.C. 612c.

2. Amend Sec. 761.4 by removing ``February 12, 1999'' and adding in

its place ``September 24, 1999''.

3. Amend Sec. 761.5 by removing ``1,000'' and adding in its place

``2,500''.

* * * * *

4. Revise Sec. 761.6 to read as follows:

Sec. 761.6 Rate of payment and limitations on funding.

(a) Benefits under this part may be made to hog operations for the

quantity of eligible slaughter hogs and feeder pigs actually marketed

during the marketing period in accordance with the limitations set

forth in this section. Payments will be calculated by operation and

shall be made in an amount determined by:

(1) Multiplying $3.60 by the number of eligible feeder pigs

marketed during the marketing period; plus

(2) Multiplying $10 by the number of eligible slaughter hogs

marketed during the marketing period;

(3) Limiting the payment per hog operation otherwise calculated

under paragraphs (a)(1) and (2) of this section to $5,000; and

(4) Reducing the amount due as calculated under paragraphs (a)(1)

through (3) of this section by amounts previously paid under this part

based on marketings in the same period and, for claims filed after

February 12, 1999, by reducing the payment further to zero as necessary

to insure subject to paragraph (c), that the total payments under this

part do not exceed $175 million.

(b) Producers who filed an application under this part prior to

February 12, 1999, do not need to file another application in order to

receive benefits at the increased rates announced in the Federal

Register published on August 30, 1999. A producer who wishes to amend

an application filed prior to February 12, 1999, may file an amended

application by the deadline for new applications specified in

Sec. 761.4 of this part.

(c) To the extent that $175 million is not sufficient to cover all

claims under this part, claims filed on or before February 12, 1999,

shall be paid in full for the eligible hogs and feeder pigs which were

the subject of that claim. For claims filed after that date, the claims

will be paid in the manner deemed appropriate by FSA to assure, to the

extent practicable, that the claims are paid in the order in which they

are filed, until the available funds are expended at which point no

additional claims will be paid.

Signed at Washington, DC, on August 29, 1999.

Parks Shackelford,

Acting Administrator, Farm Service Agency.

[FR Doc. 99-22484 Filed 8-26-99; 10:09 am]

BILLING CODE 3410-05-P