Soybean Promotion and Research Program: Request for Referendum

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1220

[No. LS-98-001]

Soybean Promotion and Research Program: Request for Referendum

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This action would change the number of eligible soybean

producers estimated in the proposed ``Request for Referendum'' on the

Soybean Promotion and Research Order (Order) as published in the

September 4, 1998, Federal Register and would amend the regulations

accordingly. The estimated number of eligible soybean producers would

change from 381,000 soybean producers to 600,813 soybean producers

based on the results of a statistical survey.

DATES: Written comments must be received by May 17, 1999.

ADDRESSES: Send two copies of comments to Ralph L. Tapp, Chief;

Marketing Programs Branch; Livestock and Seed Program, Agricultural

Marketing Service (AMS), USDA; STOP-0251; 1400 Independence Avenue,

SW.; Washington, D.C. 20250-0251. Comments will be available for public

inspection during regular business hours in Room 2627 South Agriculture

Building; 14th and Independence Avenue, SW., Washington, D.C.

FOR FURTHER INFORMATION CONTACT: Ralph L. Tapp, Chief, Marketing

Programs Branch, 202/720-1115.

SUPPLEMENTARY INFORMATION:

Regulatory Impact Analysis

Executive Order 12866 and 12988 and the Regulatory Flexibility Act and

the Paperwork Reduction Act

The Department of Agriculture (Department) is issuing this rule in

conformance with Executive Order 12866.

This rule has been reviewed under Executive Order 12988, Civil

Justice Reform. It is not intended to have a retroactive effect. This

rule would not preempt State or local laws, regulations, or policies,

unless they present an irreconcilable conflict with this rule.

The Soybean Promotion, Research, and Consumer Information Act (Act)

provides that administrative proceedings must be exhausted before

parties may file suit in court. Under Sec. 1971 of the Act, a person

subject to the Order may file 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 the law and

request a modification of the Order or an exemption from the Order. The

petitioner is afforded the opportunity for a hearing on the petition.

After a hearing the Secretary will rule on the petition. The statute

provides that the district court of the United States in any district

in which the petitioner resides or carries on business has jurisdiction

to review the Secretary's decision if a complaint for that purpose is

filed not later than 20 days after the date of the entry of the

Secretary's decision.

Further, Sec. 1974 of the Act provides, with certain exceptions,

that nothing in the Act may be construed to preempt or supersede any

other program relating to soybean promotion, research, consumer

information, or industry information organized and operated under the

laws of the United States or any State. One exception in the Act

concerns assessments collected by the Qualified State Soybean Boards

(QSSBs). The exception provides that to ensure adequate funding of the

operations of QSSBs under the Act, no State law or regulation may limit

or have the effect of limiting the full amount of assessments that a

QSSB in that State may collect, and which is authorized to be credited

under the Act. Another exception concerns certain referendums conducted

during specified periods by a State relating to the continuation or

termination of a QSSB or State soybean assessment.

Pursuant to requirements set forth in the Regulatory Flexibility

Act (5 United States Code (U.S.C.) 601 et seq.), the Administrator of

AMS has considered the economic effect of this proposed action on small

entities and has determined that its implementation will not have a

significant economic impact on a substantial number of small business

entities.

According to the statistical survey initiated by the Department,

there are 600,813 soybean producers who would be eligible to

participate in the ``Request for Referendum.'' The majority of

producers subject to the Order are small businesses under the criteria

established by the Small Business Administration.

Further, the requirements set forth in the proposed rule are

substantially similar to the rules that established the eligibility and

participation requirements for a July 26, 1995, soybean producer poll

published as a final rule on March 22, 1995 (60 FR 15027), in the

Federal Register.

The procedures to request a referendum would not impose a

substantial burden or have a significant impact on persons subject to

the Order. Further, participation is not mandatory. Not all persons

subject to the Order are expected to participate. The Department would

determine producer eligibility.

In compliance with the Office of Management and Budget (OMB)

regulations [5 CFR Part 1320] which implements the Paperwork Reduction

Act [44 U.S.C. 3501 et seq.], the information collection requirements

contained in this proposed rule have been previously approved by OMB

and were assigned OMB control number 0581-0093. The information

collection requirements in the proposed rule include the following:

(1) Any eligible person who requests a referendum must legibly

print his/her name, or if applicable, the producer entity represented,

address, telephone number, and county on the ``Request for a Soybean

Referendum'' form (Form LS-51-1). Each person must read the

certification statement on the form and sign it certifying that he/she

or the producer entity represented meets the eligibility requirements.

Form LS-51-1 shall be obtained in person, by mail, telephone, or

facsimile from the county Farm Service Agency (FSA) office where FSA

maintains and processes the producer's administrative farm records or

at the county FSA office serving the county where the producer owns or

rents land. Form LS-51-1 may be returned by mail, by facsimile, or in

person to the same county FSA office

[[Page 18832]]

where the form was obtained. A producer or producer entity

representative who obtains Form LS-51-1 in person during the ``Request

for Referendum'' period from the appropriate county FSA office may

complete Form LS-51-1 at that time. The estimated average time burden

for completing the procedure is 5 minutes per person.

(2) Using information from each returned Form LS-51-1, county FSA

personnel shall enter the producer's name, and if applicable, producer

entity representative, the date received (and the postmarked date for

mailed requests), and the method the form was received on the ``List of

Soybean Producers Requesting a Referendum'' (Form LS-51-2). This

information may be used for the purpose of challenging the eligibility

of producers. Many county FSA offices will use more than one Form LS-

51-2 depending on the number of producers requesting a referendum.

Because only county FSA office personnel would be required to complete

Form LS-51-2, the time required to complete this form is not included

in the estimated average reporting burden for a producer.

Background

The Act (7 U.S.C. 6301-6311) provides for the establishment of a

coordinated program of promotion and research designed to strengthen

the soybean industry's position in the marketplace and to maintain and

expand domestic and foreign markets and uses for soybeans and soybean

products. The program is financed by an assessment of 0.5 of one

percent of the net market price of soybeans sold by producers. Pursuant

to the Act, an Order was made effective July 9, 1991, and the

collection of assessments began September 1, 1991.

The Act required that an initial referendum be conducted no earlier

than 18 months and no later than 36 months after the issuance of the

Order to determine whether the Order should be continued.

The initial referendum was conducted on February 9, 1994. On April

1, 1994, the Secretary announced that of the 85,606 valid ballots cast,

46,060 (53.8 percent) were in favor of continuing the Order and the

remaining 39,546 votes (46.2 percent) were against continuing the

Order. The Act required approval by a simple majority for the Order to

continue.

The Act also required that within 18 months after the Secretary

announced the results of the initial referendum, the Secretary would

conduct a poll among producers to determine if producers favored a

referendum on the continuance of the payment of refunds under the

Order.

A July 25, 1995, nationwide poll of soybean producers did not

generate sufficient support for a refund referendum to be held based on

the total number of producers in the United States established at that

time. A refund referendum would have been held if at least 20 percent

(not in excess of one-fifth of which may be producers in any one State)

of the 381,000 producers (76,200) nationwide requested it. Only 48,782

soybean producers participated in the poll. Consequently, refunds were

discontinued on October 1, 1995.

The Act also specifies that the Secretary shall, 5 years after the

conduct of the initial referendum and every 5 years thereafter, provide

soybean producers an opportunity to request a referendum on the Order.

For all such referendums, if the Secretary determines that at least

10 percent of U.S. producers engaged in growing soybeans (not in excess

of one-fifth of which may be producers in any one State) support the

conduct of a referendum, the Secretary must conduct a referendum within

1 year of that determination. If these requirements are not met, a

referendum would not be conducted.

On September 4, 1998, AMS published a proposed ``Request for

Referendum'' rule in the Federal Register (63 FR 47200). The proposed

rule set forth procedures to be followed in conducting the ``Request

for Referendum.'' The proposed rule included provisions concerning

definitions, supervision of the process for requesting a referendum,

eligibility, certification and request procedures, counting and

reporting results, and disposition of the forms and records. The

proposed rule also provided that the ``Request for Referendum,'' be

conducted at the county FSA offices and that FSA assist AMS by

determining eligibility, counting, and reporting results. Finally, the

proposed rule provided that the Secretary would use the latest official

number of U.S. soybean farms as reported by the Department's National

Agricultural Statistics Service (NASS) as representing the total number

of U.S. soybean producers. At the time the proposed rule was published,

the latest official data available and reported by NASS was based on

the 1992 Census of Agriculture (1992 Census) which showed that 381,000

farms produced soybeans.

Comments on the proposed rule were due in the Department by October

5, 1998. The Department received six comments from State and national

soybean organizations concerning the Department's estimated number of

soybean producers eligible to participate in the ``Request for

Referendum.'' Four comments were filed on time and two comments were

filed after the comment period ended. The late comments generally

expressed the same views as the timely comments. In addition, six other

comments were received addressing other matters in the September 4,

1998, proposed rule will be discussed in a final rule.

The four comments timely received expressed the belief that the

381,000 soybean farms reported by the 1992 Census and proposed by the

Department as the total number of soybean producers grossly understates

the true number of soybean producers. Furthermore, the commenters

believed that the 1992 Census data (1) was outdated, (2) did not

provide a proper basis for determining the number of soybean producers,

and (3) did not reflect the current number of producers which they

believed had increased since the enactment of the 1996 Farm Bill. Two

commenters recommended that AMS utilize the results of the United

Soybean Board's (Board) recent survey of soybean producers, which was

based on FSA's data, or use other relevant information to determine the

number of soybean farmers eligible to request a referendum. The Board's

survey suggested that there could be as many as 649,000 soybean

producers in the United States which is significantly more soybean

producers than reflected in the 1992 Census data. Further, the most

recent Census data for 1997 as reported by NASS indicated that there

are 354,692 soybean farms. Accordingly, in order to better address this

issue, AMS contracted with an independent surveyor to conduct a survey

of soybean producers.

AMS obtained a list from FSA of approximately 970,000 producers who

produced soybeans, or who produced forage or hay which may have

included soybeans during crop years 1995-97. AMS then developed a

survey from this information designed to determine the number of

producers which meet the definition of a soybean producer contained in

the Act.

To achieve 95 percent confidence in the survey results with a 2

percent margin of error, the surveyor would obtain over 2,400 ``yes''

or ``no'' responses from those interviewed regarding their soybean

producer status. Those interviewed were asked to respond only after

listening to the definition of soybean producer provided under

Sec. 1967 of the Act as read by the

[[Page 18833]]

caller. The definition of producer is ``any person engaged in the

growing of soybeans in the United States who owns, or who shares the

ownership and risk of loss of, such soybeans.''

On March 5, 1999, AMS received the results of the soybean producer

survey. AMS, also, reviewed the methods used for conducting the soybean

producer survey to ensure that the procedures outlined by AMS were

followed. The results indicated that approximately 62 percent of those

surveyed were soybean producers as defined in the Act. Thus, based on

the results, for the purposes of the ``Request for Referendum,'' AMS

proposes to use 600,813 as the total number of U.S. soybean producers.

This number would serve as the basis for determining whether a soybean

referendum would be conducted. A soybean referendum would be conducted

if requested by 10 percent of the total number of U.S. soybean

producers (not in excess of one-fifth of which may be producers in any

one State) engaged in the growing of soybeans.

Since the basis for establishing the total number of producers

would no longer be NASS data, Sec. 1220.30(d) of the proposed rule

would be amended by deleting the phrase ``* * * the latest official

numbers of U.S. soybean farms as reported by the Department's National

Agricultural Statistics Service as the total number of producers.'' and

inserting the phrase ``* * * the number of soybean producers in the

United States is determined to be 600,813.''

A 30-day comment period is provided for interested persons to

comment on this amended proposed rule. This comment period is deemed

appropriate because the Act provides that the Secretary, 5 years after

the conduct of the initial referendum held in 1994, will give soybean

producers the opportunity to request an additional referendum on the

Order. A 30-day comment period will assist in timely implementation of

this rule consistent with the provisions of the Act.

List of Subjects in 7 CFR Part 1220

Administrative practice and procedure, Advertising, Agricultural

research, Marketing agreements, Reporting and recordkeeping

requirements, Soybeans and soybean products.

For the reasons set forth in the preamble, it is proposed that 7

CFR part 1220 be amended as follows:

PART 1220--SOYBEAN PROMOTION, RESEARCH, AND CONSUMER INFORMATION

1. The authority citation for part 1220 would continue to read as

follows:

Authority: 7 U.S.C. 6301-6311.

Subpart F--Procedures to Request a Referendum Procedures

2. In Sec. 1220.30, as proposed at 63 FR 47202, September 4, 1998,

paragraph (d) is further proposed to be revised to read as follows:

Sec. 1220.30 General.

* * * * *

(d) For purposes of paragraphs (b) and (c) of this section, the

number of soybean producers in the United States is determined to be

600,813.

Dated: April 13, 1999.

Barry L. Carpenter,

Deputy Administrator, Livestock and Seed Program.

[FR Doc. 99-9658 Filed 4-14-99; 11:18 am]

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