### 14441 Federal Register / Vol. 79, No. 50 / Friday, March 14, 2014 / Proposed Rules

Office of the Docket Clerk, Marketing Order and Agreement Division, Fruit and Vegetable Program, AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 20250–0237, or

Internet: http://www.regulations.gov.

**FOR FURTHER INFORMATION CONTACT :**  Andrea Ricci, Marketing Specialist, or Martin Engeler, Regional Director, California Marketing Field Office, Marketing Order and Agreement Division, Fruit and Vegetable Program, AMS, USDA; Telephone: (559) 487–

5901, Fax: (559) 487–5906, or Email: Andrea.Ricci@ams.usda.gov or Martin.Engeler@ams.usda.gov, respectively.

**SUPPLEMENTARY INFORMATION :**  Pursuant to Marketing Order No. 984, as amended (7 CFR part 984), hereinafter referred to as the ‘‘order,’’ and the applicable provisions of the Agricultural Marketing Agreement Act of 1937, as amended (7

U.S.C. 601–674), hereinafter referred to as the ‘‘Act,’’ it is hereby directed that

a referendum be conducted to ascertain

whether continuance of the order is favored by growers. The referendum shall be conducted from April 1 through April 19, 2014, among eligible California walnut growers. Only current growers that were also engaged in the production of walnuts in California during the period of September 1, 2012, through August 31, 2013, may participate in the continuance

referendum.

USDA has determined that

continuance referenda are an effective means for determining whether growers favor the continuation of marketing order programs. USDA would consider

termination of the order if less than twothirds of the growers voting in the referendum and growers of less than

two-thirds of the volume of California walnuts represented in the referendum favor continuance of their program. In evaluating the merits of continuance

versus termination, USDA will consider

the results of the continuance

referendum and other relevant information regarding operation of the

order. USDA will also consider the

order’s relative benefits and disadvantages to growers, handlers, and

consumers to determine whether continuing the order would tend to effectuate the declared policy of the Act.

In accordance with the Paperwork

Reduction Act of 1995 (44 U.S.C. Chapter 35), the ballot materials used in

the referendum herein ordered have been approved by the Office of Management and Budget (OMB), under

OMB No. 0581–0178, Walnuts Grown in

California. It has been estimated that it will take an average of 20 minutes for each of the approximately 4,100 growers

of California walnuts to cast a ballot. Participation is voluntary. Ballots postmarked after April 19, 2014, will

not be included in the vote tabulation.

Andrea Ricci and Terry Vawter of the California Marketing Field Office, Fruit and Vegetable Program, AMS, USDA, are hereby designated as the referendum agents of the Secretary of Agriculture to conduct this referendum. The procedure applicable to the referendum shall be

the ‘‘Procedure for the Conduct of

Referenda in Connection With Marketing Orders for Fruits, Vegetables, and Nuts Pursuant to the Agricultural Marketing Agreement Act of 1937, as

Amended’’ (7 CFR 900.400–900.407).

Ballots will be mailed to all growers of record and may also be obtained from the referendum agents or from their
appointees.

List of Subjects in 7 CFR Part 984

Marketing agreements, Nuts, Reporting and recordkeeping requirements, Walnuts.

Authority: 7 U.S.C. 601–674.

Dated: February 26, 2014.

Rex A. Barnes,

Associate Administrator, Agricultural Marketing Service.

[FR Doc. 2014–05585 Filed 3–13–14; 8:45 am]

**BILLING CODE 3410–02–P**

**DEPARTMENT OF AGRICULTURE**

**Agricultural Marketing Service**

**7 CFR Part 985**

**[Doc. No. AMS–FV–13–0087; FV14–985–1**

**PR]**

**Marketing Order Regulating the Handling of Spearmint Oil Produced in** 
**the Far West; Salable Quantities and**
**Allotment Percentages for the 2014–**
**2015 Marketing Year**

**AGENCY :**  Agricultural Marketing Service,

USDA.

**ACTION :**  Proposed rule.

**SUMMARY :**  This proposed rule invites comments on proposed limits to the quantity of Far West Scotch and Native spearmint oil that handlers may purchase from, or handle on behalf of, producers during the 2014–2015 marketing year, which begins on June 1,

2014. The Far West includes Washington, Idaho, Oregon, and designated parts of Nevada and Utah. The salable quantity and allotment percentage for Class 1 (Scotch) spearmint oil would be set at 1,149,030 pounds and 55 percent, respectively. For Class 3 (Native) spearmint oil, the salable quantity and allotment percentage would be set at 1,090,821 pounds and 46 percent, respectively. The Spearmint Oil Administrative Committee (Committee), the agency responsible for local administration of the marketing order for spearmint oil produced in the Far West, recommended these quantities.

**DATES :**  Comments must be received by

March 31, 2014.

**ADDRESSES :**  Interested persons are

invited to submit written comments concerning this proposal. Comments

must be sent to the Docket Clerk, Marketing Order and Agreement Division, Fruit and Vegetable Program, AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington,

DC 20250–0237; Fax: (202) 720–8938; or

Internet: http://www.regulations.gov. All

comments should reference the

document number and the date and page number of this issue of the Federal
Register and will be made available for public inspection in the Office of the Docket Clerk during regular business

hours, or can be viewed at: http:// www.regulations.gov. All comments submitted in response to this proposal

will be included in the record and will be made available to the public. Please be advised that the identity of the individuals or entities submitting the comments will be made public on the internet at the address provided above.

**FOR FURTHER INFORMATION CONTACT :**  Manuel Michel, Marketing Specialist, or Gary Olson, Regional Director, Northwest Marketing Field Office, Marketing Order and Agreement Division, Fruit and Vegetable Program, AMS, USDA; Telephone: (503) 326–

2724, Fax: (503) 326–7440, or Email: Manuel.Michel@ams.usda.gov or GaryD.Olson@ams.usda.gov.

Small businesses may request information on complying with this regulation by contacting Jeffrey Smutny, Marketing Order and Agreement Division, Fruit and Vegetable Program, AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 20250–0237; Telephone: (202) 720–

2491, Fax: (202) 720–8938, or Email: Jeffrey.Smutny@ams.usda.gov.

**SUPPLEMENTARY INFORMATION :**  This proposal is issued under Marketing

Order No. 985 (7 CFR Part 985), as amended, regulating the handling of spearmint oil produced in the Far West (Washington, Idaho, Oregon, and designated parts of Nevada and Utah),

hereinafter referred to as the ‘‘order.’’

The order is effective under the Agricultural Marketing Agreement Act


### 14442 Federal Register / Vol. 79, No. 50 / Friday, March 14, 2014 / Proposed Rules

of 1937, as amended (7 U.S.C. 601–674),

hereinafter referred to as the ‘‘Act.’’

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

conformance with Executive Orders

12866, 13175, and 13563.

This proposed rule has been reviewed

under Executive Order 12988, Civil Justice Reform. This proposed rule is

not intended to have retroactive effect.

Under the order now in effect, salable quantities and allotment percentages may be established for classes of spearmint oil produced in the Far West. This proposed rule would establish the quantity of spearmint oil produced in the Far West, by class, which handlers may purchase from, or handle on behalf of, producers during the 2014–2015 marketing year, which begins on June 1,

2014.

The Act 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 file with USDA 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 and request a modification of the order or to be exempted therefrom. A handler is afforded the opportunity for a hearing on the petition. After the hearing, USDA 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 his or her principal place of business, has jurisdiction to review USDA’s ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling.

The Committee meets annually in the fall to adopt a marketing policy for the ensuing marketing year or years. In determining such marketing policy, the

Committee considers a number of factors, including, but not limited to, the current and projected supply, estimated future demand, production costs, and producer prices for all classes of spearmint oil. Input from spearmint oil handlers and producers regarding prospective marketing conditions for the upcoming year is considered as well. During the meeting, the Committee recommends to USDA any volume regulations deemed necessary to meet market requirements and to establish orderly marketing conditions for Far West spearmint oil. If the Committee’s marketing policy considerations indicate a need for limiting the quantity of any or all classes of spearmint oil marketed, the Committee subsequently

recommends the establishment of a salable quantity and allotment percentage for such class or classes of oil for the forthcoming marketing year.

The salable quantity represents the total amount of each class of spearmint oil that handlers may purchase from, or handle on behalf of, producers during the marketing year. The allotment percentage is the percentage used to calculate each producer’s prorated share of the salable quantity. The calculation applies the allotment percentage to a producer’s allotment base for each applicable class of spearmint oil. The allotment base is each producer’s quantified share of the spearmint oil

market based on a statistical representation of past spearmint oil production, with accommodation for reasonable and normal adjustments to such base as prescribed by the Committee and approved by USDA. Salable quantities are established at

levels intended to meet market requirements and to establish orderly marketing conditions. Committee

recommendations for volume controls are made well in advance of the period in which the regulations are to be effective, thereby allowing producers the chance to adjust their production decisions accordingly.

Pursuant to authority in §§ 985.50,

985.51, and 985.52 of the order, the full eight-member Committee met on

November 6, 2013, and recommended salable quantities and allotment percentages for both classes of oil for the 2014–2015 marketing year. The Committee unanimously recommended the establishment of a salable quantity and allotment percentage for Class 1 (Scotch) spearmint oil of 1,149,030 pounds and 55 percent, respectively.

The Committee, also with a unanimous

vote, recommended the establishment of a salable quantity and allotment percentage for Class 3 (Native) spearmint oil of 1,090,821 pounds and 46 percent, respectively.

This action would set the amount of Scotch and Native spearmint oil that handlers may purchase from, or handle on behalf of, producers during the 2014–2015 marketing year, which begins on June 1, 2014. Salable quantities and allotment percentages have been placed into effect each season since the order’s inception in 1980.

Class 1 (Scotch) Spearmint Oil

As noted above, the Committee unanimously recommended a salable quantity of Scotch spearmint oil of 1,149,030 pounds and an allotment percentage of 55 percent for the upcoming 2014–2015 marketing year.

The Committee utilized 2014–2015 sales estimates for Scotch spearmint oil, as provided by several of the industry’s handlers, as well as historical and current Scotch spearmint oil production and inventory statistics, to arrive at

these recommendations.

Trade demand for Far West Scotch spearmint oil is expected to rise from 981,536 pounds in the 2013–2014 marketing year to 1,000,000 pounds in 2014–2015, if not more. Industry reports indicate an increasing consumer demand for mint flavored products has resulted in increasing demand for Far West Scotch spearmint oil. Information gathered from spearmint oil handlers also supports this conclusion.

Production of Far West Scotch spearmint oil increased from 636,626 pounds in 2012 to 1,057,377 pounds in

2013. Committee members attribute the increase in production to both the low level of reserves and growing demand. Given that these factors are expected to continue in the coming 2014–2015 year, the Committee expects production to

increase to as much as 1,300,000 pounds in that marketing year.

The Committee also estimates that there will be zero carry-in of Scotch spearmint oil on June 1, 2014, the beginning of the 2014–2015 marketing year. This figure, which is the primary measure of excess supply, down from an estimated 16,022 pounds the previous year, is below the minimum carry-in quantity that the Committee considers favorable. The demand during the 2012– 2013 marketing year equaled total supply resulting in the zero carry-in.

The 2014–2015 salable quantity of 1,149,030 pounds recommended by the Committee represents an increase of 75,631 pounds over the total supply available during the previous marketing year. Total supply for 2013–2014 amounted to 1,073,399 pounds (1,057,377 pounds produced plus 16,022 pounds held in reserve).

The Committee estimates 2014–2015 demand for Scotch spearmint oil at 1,000,000 pounds. When considered in conjunction with the forecast that there will be zero available carry-in of Scotch spearmint oil on June 1, 2014, the recommended salable quantity of 1,149,030 pounds would satisfy market demand and yield a carry-in of 149,030 pounds for the 2015–2016 marketing

year.

The Committee’s stated intent in the use of marketing order volume control regulations for Scotch spearmint oil is to keep adequate supplies available to meet market needs and establish orderly marketing conditions. While the salable quantity recommended for the upcoming marketing year is less than the salable quantity set for the previous year (2013–2014 at 1,344,500 pounds),

the Committee felt that the


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recommended limit would adequatelymeet demand, as well as result in carryin for the following year. With that in mind, the Committee developed its recommendation for the proposed Scotch spearmint oil salable quantity and allotment percentage for the 2014– 2015 marketing year based on the

information discussed above, as well as

the data outlined below.

(A) Estimated carry-in of Scotch spearmint oil on June 1, 2014–0 pounds. This figure is the difference between the revised 2013–2014 marketing year total available supply of 1,073,399 pounds and the estimated 2013–2014 marketing year trade demand of 1,073,399 pounds.

(B) Estimated trade demand of Scotch spearmint oil for the 2014–2015 marketing year—1,000,000 pounds. This figure is based on input from producers at five Scotch spearmint oil production area meetings held in late September and early October 2013, as well as estimates provided by handlers and other meeting participants at the November 6, 2013, meeting. The average estimated trade demand provided at the five production area meetings is 1,033,000 pounds, which is 25,750 pounds less than the average of trade demand estimates submitted by

handlers. However, Far West Scotch spearmint oil sales have averaged 819,824 pounds per year over the last five years. Given this information, the Committee decided it was prudent to anticipate the trade demand at 1,000,000 pounds. Should the initially established volume control levels prove insufficient to adequately supply the market, the Committee has the authority

to recommend intra-seasonal increases

as needed.

(C) Salable quantity of Scotch spearmint oil required from the 2014– 2015 marketing year production— 1,000,000 pounds. This figure is the

difference between the estimated 2014– 2015 marketing year trade demand (1,000,000 pounds) and the estimated carry-in on June 1, 2014 (0 pounds). This figure represents the minimum salable quantity that may be needed to satisfy estimated demand for the coming year with no carryover.

(D) Total estimated allotment base of Scotch spearmint oil for the 2014–2015 marketing year—2,089,146 pounds. This figure represents a one-percent increase

over the revised 2013–2014 total allotment base. This figure is generally revised each year on June 1 due to producer base being lost because of the bona fide effort production provisions of § 985.53(e). The revision is usually

minimal.

(E) Computed Scotch spearmint oil 2014–2015 marketing year allotment percentage—47.9 percent. This percentage is computed by dividing the minimum required salable quantity (1,000,000 pounds) by the total
estimated allotment base (2,089,146 pounds).

(F) Recommended Scotch spearmint oil 2014–2015 marketing year allotment

percentage—55 percent. This is the

Committee’s recommendation and is based on the computed allotment percentage (47.9 percent), the average of the computed allotment percentage figures from the five production area meetings (46.2 percent), and input from producers and handlers at the November 6, 2013, meeting. The recommended 55 percent allotment percentage is also based on the Committee’s belief that the computed percentage (47.9 percent) may not adequately supply the potential 2014– 2015 Scotch spearmint oil market.

(G) Recommended Scotch spearmint oil 2014–2015 marketing year salable quantity—1,149,030 pounds. This figure is the product of the recommended allotment percentage (55 percent) and

the total estimated allotment base (2,089,146 pounds).

(H) Estimated total available supply of Scotch spearmint oil for the 2014– 2015 marketing year—1,149,030 pounds. This figure is the sum of the

2014–2015 recommended salable quantity (1,149,030 pounds) and the estimated carry-in on June 1, 2014 (0 pounds).

Class 3 (Native) Spearmint Oil

At the November 6, 2013, meeting, the

Committee also recommended a 2014– 2015 Native spearmint oil salable quantity of 1,090,821 pounds and an allotment percentage of 46 percent. The Committee utilized Native spearmint oil sales estimates for 2014–2015 marketing year, as provided by several of the industry’s handlers, as well as historical and current Native spearmint oil market

statistics to establish these thresholds.

The recommended volume control levels represent a decrease of 341,380 pounds and 15 percentage points over the previous year’s initially established salable quantity and allotment

percentage.

The Committee also estimates that there will be 461,260 pounds reserve of Native spearmint oil on June 1, 2014. This figure, which is the oil held in reserve by producers, is down from an industry peak of 606,942 pounds in 2011. Reserve levels of Native spearmint oil are nearing the level that the Committee believes is optimal for the industry.

Committee statistics indicate that demand for Far West Native spearmint oil has been gradually increasing since 2009. Spearmint oil handlers, who previously projected the 2013–2014

trade demand for Far West Native spearmint oil to be in the range of 1,100,000 pounds to 1,400,000 pounds (with an average of 1,300,000 pounds), have projected trade demand for the 2014–2015 marketing period to be in the range of 1,290,000 pounds to 1,400,000 pounds (with an average of 1,347,500).

Given the above, the Committee estimates that approximately 1,300,000 pounds of Native spearmint oil may be sold during the 2014–2015 marketing year. When considered in conjunction with the estimated carry-in of 307,297 pounds of Native spearmint oil on June

1, 2014, the recommended salable quantity of 1,090,821 pounds results in an estimated total available supply of 1,398,118 pounds of Native spearmint oil during the 2014–2015 marketing year. Estimated carry-in of Native spearmint oil at the beginning of the 2015–2016 marketing year would be approximately 98,118 pounds. Carry-in spearmint oil is distinct from reserve pool spearmint oil and represents the amount of salable spearmint oil produced, but not marketed, in previous years and is available for sale in the current year. It is the primary measure of excess spearmint oil supply under the order. Reserve pool oil represents the amount of excess oil held by the Committee, on behalf of the producers, that is not currently available to the

market. The Committee’s stated intent in the use of marketing order volume control regulations for Native spearmint oil is to keep adequate supplies

available to meet market needs and establish orderly marketing conditions.

With that in mind, the Committee developed its recommendation for the proposed Native spearmint oil salable quantity and allotment percentage for the 2014–2015 marketing year based on

the information discussed above, as well

as the data outlined below.

(A) Estimated carry-in of Native spearmint oil on June 1, 2014—307,297 pounds. This figure is the difference

between the revised 2013–2014 marketing year total available supply of 1,577,297 pounds and the estimated 2013–2014 marketing year trade demand of 1,270,000 pounds.

(B) Estimated trade demand of Native spearmint oil for the 2014–2015 marketing year—1,300,000 pounds. This estimate is established by the Committee and is based on input from producers at six Native spearmint oil production area meetings held in late September and early October 2013, as well as estimates provided by handlers and other meeting participants at the


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November 6, 2013, meeting. The average estimated trade demand provided at the six production area meetings was 1,271,281 pounds, whereas the handlers’ estimates ranged from 1,290,000 pounds to 1,400,000 pounds, and averaged 1,347,500 pounds. The average of Far West Native spearmint oil sales over the last five years is 1,190,928 pounds.

(C) Salable quantity of Native spearmint oil required from the 2014– 2015 marketing year production— 992,703 pounds. This figure is the

difference between the estimated 2014– 2015 marketing year trade demand (1,300,000 pounds) and the estimated carry-in on June 1, 2014 (307,297 pounds). This is the minimum amount

that the Committee believes would be required to meet the anticipated 2014– 2015 Native spearmint oil trade

demand.

(D) Total estimated allotment base of Native spearmint oil for the 2014–2015 marketing year—2,371,350 pounds. This figure represents a one-percent increase

over the revised 2013–2014 total allotment base. This figure is generally revised each year on June 1 due to producer base being lost due to the bona fide effort production provisions of § 985.53(e). The revision is usually

minimal.

(E) Computed Native spearmint oil 2014–2015 marketing year allotment

percentage—41.9 percent. This percentage is computed by dividing the required salable quantity (992,703 pounds) by the total estimated allotment base (2,371,350 pounds).

(F) Recommended Native spearmint oil 2014–2015 marketing year allotment

percentage—46 percent. This is the

Committee’s recommendation based on the computed allotment percentage (41.9 percent), the average of the computed allotment percentage figures from the six production area meetings (39.9 percent), and input from producers and handlers at the November 6, 2013, meeting. The recommended 46 percent allotment percentage is also based on the Committee’s belief that the computed percentage (41.9 percent) may not adequately supply the potential 2014– 2015 Native spearmint oil market.

(G) Recommended Native spearmint oil 2014–2015 marketing year salable quantity—1,090,821 pounds. This figure is the product of the recommended allotment percentage (46 percent) and

the total estimated allotment base (2,371,350 pounds).

(H) Estimated available supply of Native spearmint oil for the 2014–2015 marketing year—1,398,118 pounds. This figure is the sum of the 2014–2015 recommended salable quantity (1,090,821 pounds) and the estimated carry-in on June 1, 2014 (307,297 pounds).

The salable quantity is the total quantity of each class of spearmint oil that handlers may purchase from, or handle on behalf of, producers during a marketing year. Each producer is allotted a share of the salable quantity by applying the allotment percentage to the producer’s allotment base for the applicable class of spearmint oil.

The Committee’s recommended Scotch and Native spearmint oil salable quantities and allotment percentages of 1,149,030 pounds and 55 percent, and 1,090,821 pounds and 46 percent, respectively, are based on the goal of establishing and maintaining market stability. The Committee anticipates that this goal would be achieved by matching the available supply of each class of Spearmint oil to the estimated demand of such, thus avoiding extreme fluctuations in inventories and prices.

The proposed salable quantities are not expected to cause a shortage of spearmint oil supplies. Any unanticipated or additional market demand for spearmint oil which may develop during the marketing year could be satisfied by an intra-seasonal increase in the salable quantity. Theorder contains a provision for intraseasonal increases to allow the Committee the flexibility to respond quickly to changing market conditions.

Under volume regulation, producers who produce more than their annual allotments during the 2014–2015 marketing year may transfer such excess spearmint oil to producers who have produced less than their annual allotment. In addition, up until November 1, 2014, producers may place excess spearmint oil production into the reserve pool to be released in the future

in accordance with market needs.

This proposed regulation, if adopted, would be similar to regulations issued in prior seasons. The average initial allotment percentage for the five most recent marketing years for Scotch spearmint oil is 41.4 percent, while the average initial allotment percentage for the same five-year period for Native spearmint oil is 50.2 percent. Costs to producers and handlers resulting from this rule are expected to be offset by the

benefits derived from a stable market and improved returns. In conjunction with the issuance of this proposed rule,

USDA has reviewed the Committee’s marketing policy statement for the 2014–2015 marketing year. The Committee’s marketing policy statement, a requirement whenever the

Committee recommends volume regulation, fully meets the intent of
§ 985.50 of the order.

During its discussion of potential 2014–2015 salable quantities and allotment percentages, the Committee considered: (1) The estimated quantity of salable oil of each class held by producers and handlers; (2) the

estimated demand for each class of oil; (3) the prospective production of each
class of oil; (4) the total of allotment

bases of each class of oil for the current marketing year and the estimated total

of allotment bases of each class for the ensuing marketing year; (5) the quantity of reserve oil, by class, in storage; (6) producer prices of oil, including prices for each class of oil; and (7) general

market conditions for each class of oil, including whether the estimated season average price to producers is likely to exceed parity. Conformity with USDA’s ‘‘Guidelines for Fruit, Vegetable, and Specialty Crop Marketing Orders’’ has

also been reviewed and confirmed.

The establishment of these salable quantities and allotment percentages would allow for anticipated market needs. In determining anticipated

market needs, the Committee

considered historical sales, as well as changes and trends in production and demand. This rule also provides producers with information on the amount of spearmint oil that should be produced for the 2014–2015 season in order to meet anticipated market

demand.

Initial Regulatory Flexibility Analysis

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601–612), the Agricultural Marketing Service (AMS) has considered the economic impact of this action on small entities. Accordingly, AMS has prepared this initial regulatory flexibility analysis.

The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions in

order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the

Act, and the rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own

behalf.

There are eight spearmint oil handlers subject to regulation under the order, and approximately 39 producers of Scotch spearmint oil and approximately 91 producers of Native spearmint oil in the regulated production area. Small agricultural service firms are defined by

the Small Business Administration (SBA) as those having annual receipts of

less than $7,000,000, and small


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agricultural producers are defined as those having annual receipts of less than
$750,000 (13 CFR 121.201).

Based on the SBA’s definition of

small entities, the Committee estimates that two of the eight handlers regulated by the order could be considered small entities. Most of the handlers are large corporations involved in the international trading of essential oils and the products of essential oils. In

addition, the Committee estimates that 22 of the 39 Scotch spearmint oil producers, and 29 of the 91 Native spearmint oil producers could be

classified as small entities under the SBA definition. Thus, a majority of handlers and producers of Far West spearmint oil may not be classified as

small entities.

The Far West spearmint oil industry is characterized by producers whose farming operations generally involve more than one commodity, and whose income from farming operations is not exclusively dependent on the production of spearmint oil. A typical spearmint oil-producing operation has enough acreage for rotation such that the total acreage required to produce the crop is about one-third spearmint and two-thirds rotational crops. Thus, the typical spearmint oil producer has to have considerably more acreage than is planted to spearmint during any given season. Crop rotation is an essential cultural practice in the production of spearmint oil for purposes of weed,

insect, and disease control. To remain economically viable with the added costs associated with spearmint oilproduction, a majority of spearmint oilproducing farms fall into the SBA category of large businesses.

Small spearmint oil producers generally are not as extensively diversified as larger ones and as such

are more at risk from market fluctuations. Such small producers generally need to market their entire

annual allotment and do not have the luxury of having other crops to cushion seasons with poor spearmint oil returns. Conversely, large diversified producers have the potential to endure one or more seasons of poor spearmint oil

markets because income from alternate crops could support the operation for a period of time. Being reasonably assured of a stable price and market provides small producing entities with the ability to maintain proper cash flow and to meet annual expenses. Thus, the market and price stability provided by the order potentially benefit small producers more than such provisions benefit large producers. Even though a majority of handlers and producers of spearmint oil may not be classified as small entities, the volume control feature of this order has small entity orientation.

This proposed rule would establish the quantity of spearmint oil produced in the Far West, by class, that handlers may purchase from, or handle on behalf of, producers during the 2014–2015 marketing year. The Committee recommended this rule to help maintain stability in the spearmint oil market by matching supply to estimated demand, thereby avoiding extreme fluctuations in supplies and prices. Establishing quantities that may be purchased or handled during the marketing year through volume regulations allows producers to plan their spearmint planting and harvesting to meet expected market needs. The provisions

of §§ 985.50, 985.51, and 985.52 of the

order authorize this rule.

Instability in the spearmint oil subsector of the mint industry is much more likely to originate on the supply

side than the demand side. Fluctuations in yield and acreage planted from season-to-season tend to be larger than fluctuations in the amount purchased by handlers. Notwithstanding the recent global recession and the overall negative impact on demand for consumer goods that utilize spearmint oil, demand for spearmint oil tends to change slowly from year to year.

Demand for spearmint oil at the farm

level is derived from retail demand for spearmint-flavored products such as chewing gum, toothpaste, and

mouthwash. The manufacturers of these products are by far the largest users of spearmint oil. However, spearmint flavoring is generally a very minor component of the products in which it is used, so changes in the raw product price have virtually no impact on retail prices for those goods.

Spearmint oil production tends to be cyclical. Years of relatively high production, with demand remaining reasonably stable, have led to periods in which large producer stocks of unsold spearmint oil have depressed producer prices for a number of years. Shortages and high prices may follow in subsequent years, as producers respond to price signals by cutting back production.

The significant variability of the spearmint oil market is illustrated by

the fact that the coefficient of variation (a standard measure of variability; ‘‘CV’’) of Far West spearmint oil grower prices for the period 1980–2012 (when the marketing order was in effect) is 0.19, compared to 0.34 for the decade prior to the promulgation of the order (1970–79) and 0.48 for the prior 20-year period (1960–79). This provides an indication of the price stabilizing impact of the marketing order.

Production in the shortest marketing year was about 47 percent of the 34-year average (1.92 million pounds from 1980 through 2013) and the largest crop was approximately 160 percent of the 34- year average. A key consequence is that, in years of oversupply and low prices, the season average producer price of spearmint oil is below the average cost of production (as measured by the Washington State University Cooperative Extension Service).

The wide fluctuations in supply and prices that result from this cycle, which was even more pronounced before the

creation of the order, can create liquidity problems for some producers. The order was designed to reduce the price impacts of the cyclical swings in production. However, producers have been less able to weather these cycles in recent years because of the increase in production costs. While prices have been relatively steady, the cost of production has increased to the extent that plans to plant spearmint may be postponed or changed indefinitely. Producers are also enticed by the prices of alternative crops and their lower cost of production.

In an effort to stabilize prices, the spearmint oil industry uses the volume

control mechanisms authorized under the order. This authority allows the

Committee to recommend a salable quantity and allotment percentage for each class of oil for the upcoming marketing year. The salable quantity for

each class of oil is the total volume of oil that producers may sell during the marketing year. The allotment percentage for each class of spearmint oil is derived by dividing the salable quantity by the total allotment base.

Each producer is then issued an annual allotment certificate, in pounds, for the applicable class of oil, which is calculated by multiplying the producer’s allotment base by the applicable allotment percentage. This is the amount of oil of each applicable class that the producer can sell.

By November 1 of each year, the Committee identifies any oil that individual producers have produced above the volume specified on their

annual allotment certificates. This excess oil is placed in a reserve pool administered by the Committee.

There is a reserve pool for each class of oil that may not be sold during the current marketing year unless USDA approves a Committee recommendation to increase the salable quantity and allotment percentage for a class of oil and make a portion of the pool available. However, limited quantities of


### 14446 Federal Register / Vol. 79, No. 50 / Friday, March 14, 2014 / Proposed Rules

reserve oil are typically sold by one producer to another producer to fill deficiencies. A deficiency occurs when on-farm production is less than a producer’s allotment. In that case, a producer’s own reserve oil can be sold to fill that deficiency. Excess production (higher than the producer’s allotment) can be sold to fill other producers’ deficiencies. All of these provisions need to be exercised prior to November 1 of each year.

In any given year, the total available supply of spearmint oil is composed of current production plus carryover stocks from the previous crop. The

Committee seeks to maintain market stability by balancing supply and demand, and to close the marketing year with an appropriate level of salable spearmint oil to carry over into the subsequent marketing year. If the industry has production in excess of the salable quantity, then the reserve pool absorbs the surplus quantity of spearmint oil, which goes unsold during that year, unless the oil is needed for unanticipated sales.

Under its provisions, the order may attempt to stabilize prices by (1) limiting supply and establishing reserves in high production years, thus minimizing the price-depressing effect that excess producer stocks have on unsold spearmint oil, and (2) ensuring that stocks are available in short supply years when prices would otherwise increase dramatically. The reserve pool stocks, which are increased in large production years, are drawn down in years where the crop is short.

An econometric model was used to assess the impact that volume control has on the prices producers receive for their commodity. Without volume control, spearmint oil markets would likely be over-supplied. This could result in low producer prices and a large

volume of oil stored and carried over to the next crop year. The model estimates how much lower producer prices would likely be in the absence of volume

controls.

The Committee estimated trade demand for the 2014–2015 marketing year for both classes of oil at 2,300,000 pounds, and that the expected combined salable carry-in will be 307,297 pounds. This results in a combined required salable quantity of 1,992,703 pounds. With volume control, sales by producers for the 2014–2015 marketing year would be limited to 2,239,851 pounds (the recommended salable quantity for both classes of spearmint oil).

The recommended allotment percentages, upon which 2014–2015 producer allotments are based, are 55 percent for Scotch and 46 percent for

Native. Without volume controls, producers would not be limited to these allotment levels, and could produce and sell additional spearmint. The

econometric model estimated a decline of about $1.90 in the season average producer price per pound (from both classes of spearmint oil) resulting from the higher quantities that would be produced and marketed without volume control. The surplus situation for the spearmint oil market that would exist

without volume controls in 2014–2015 also would likely dampen prospects for improved producer prices in future years because of the buildup in stocks.

The use of volume control allows the industry to fully supply spearmint oil markets while avoiding the negative consequences of over-supplying these

markets. The use of volume control is

believed to have little or no effect on consumer prices of products containing spearmint oil and would not result in fewer retail sales of such products.

The Committee discussed alternatives

to the recommendations contained in this rule for both classes of spearmint

oil. The Committee discussed and rejected the idea of recommending that there not be any volume regulation for both classes of spearmint oil because of the severe price-depressing effects that

would occur without volume control.

After computing the initial 47.9 percent Scotch spearmint oil allotment percentage, the Committee considered

various alternative levels of volume control for Scotch spearmint oil. Even with the moderately optimistic marketing conditions, there was

consensus from the Committee that the Scotch spearmint oil allotment percentage for 2014–2015 should be less than the percentage established for the 2013–2014 marketing year (65 percent).After considerable discussion, the eightmember committee unanimously determined that 1,149,030 pounds and 55 percent would be the most effective Scotch spearmint oil salable quantity and allotment percentage, respectively, for the 2014–2015 marketing year.

The Committee was also able to reach a consensus regarding the level of volume control for Native spearmint oil. After first determining the computed allotment percentage at 41.9 percent, the Committee unanimously recommended 1,090,821 pounds and 46 percent for the effective Native spearmint oil salable quantity and allotment percentage, respectively, for the 2014–2015 marketing year.

As noted earlier, the Committee’s

recommendation to establish salable quantities and allotment percentages for both classes of spearmint oil was made after careful consideration of all available information including: (1) The estimated quantity of salable oil of each class held by producers and handlers;

(2) the estimated demand for each class of oil; (3) the prospective production of

each class of oil; (4) the total of

allotment bases of each class of oil for the current marketing year and the

estimated total of allotment bases of each class for the ensuing marketing year; (5) the quantity of reserve oil, by class, in storage; (6) producer prices of oil, including prices for each class of oil; and (7) general market conditions for each class of oil, including whether the estimated season average price to producers is likely to exceed parity.

Based on its review, the Committee believes that the salable quantity and allotment percentage levels

recommended would achieve the objectives sought.

Without any regulations in effect, the Committee believes the industry would return to the pronounced cyclical price patterns that occurred prior to the order, and that prices in 2014–2015 could decline substantially below current

levels.

According to the Committee, the recommended salable quantities and allotment percentages are expected to facilitate the goal of establishing orderly marketing conditions for Far West spearmint oil.

As previously stated, annual salable quantities and allotment percentages

have been issued for both classes of spearmint oil since the order’s
inception.

In accordance with the Paperwork

Reduction Act of 1995 (44 U.S.C. Chapter 35), the order’s information collection requirements have been previously approved by the Office of Management and Budget (OMB) and assigned OMB No. 0581–0178, Vegetable and Specialty Crops. No changes in those requirements as a result of this action are necessary. Should any changes become necessary, they would be submitted to OMB for approval.

This proposed rule would establish the salable quantities and allotment percentages for Class 1 (Scotch) spearmint oil and Class 3 (Native) spearmint oil produced in the Far West during the 2014–2015 marketing year. Accordingly, this action would not impose any additional reporting or recordkeeping requirements on either small or large spearmint oil producers

or handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and


### 14447 Federal Register / Vol. 79, No. 50 / Friday, March 14, 2014 / Proposed Rules

duplication by industry and public
sector agencies.

AMS is committed to complying with the E-Government Act to promote the

use of the internet and other information technologies to provide increased opportunities for citizen

access to Government information and services, and for other purposes.

USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this proposed rule.

The Committee’s meeting was widely publicized throughout the spearmint oil industry and all interested persons were invited to attend the meeting and participate in Committee deliberations

on all issues. Like all Committee meetings, the November 6, 2013, meeting was a public meeting and all entities, both large and small, were able to express views on this issue. Finally, interested persons are invited to submit comments on this proposed rule, including the regulatory and informational impacts of this action on

small businesses.

A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may

be viewed at: http://www.ams.usda.gov/ MarketingOrdersSmallBusinessGuide

. Any questions about the compliance guide should be sent to Jeffrey Smutny at the previously mentioned address in

the **FOR FURTHER INFORMATION CONTACT**

section.

A 15-day comment period is provided to allow interested persons to respond to this proposed rule. Fifteen days is deemed appropriate because: (1) The 2014–2015 fiscal period begins on June

1, 2014, and a final determination on the salable quantities and allotment percentages should be made prior to handlers purchasing from, or handling on behalf of, producers any oil for the ensuing marketing year; and (2)

handlers are aware of this action, which was recommended by the Committee at a public meeting and is similar to other salable quantities and allotment percentages issued in past years.

List of Subjects in 7 CFR Part 985

Marketing agreements, Oils and fats, Reporting and recordkeeping requirements, Spearmint oil.

For the reasons set forth in the preamble, 7 CFR Part 985 is proposed to

be amended as follows:

**PART 985—MARKETING ORDER**

**REGULATING THE HANDLING OF**

**SPEARMINT OIL PRODUCED IN THE**

**FAR WEST**

■ 1. The authority citation for 7 CFR

Part 985 continues to read as follows: Authority: 7 U.S.C. 601–674.

■ 2. Section 985.233 is added to read as

follows:

Note: This section will not appear in the Code of Federal Regulations.

**§ 985.233 Salable quantities and allotment**
**percentages—2014–2015 marketing year.**

The salable quantity and allotment percentage for each class of spearmint oil during the marketing year beginning on June 1, 2014, shall be as follows:

(a) Class 1 (Scotch) oil—a salable quantity of 1,149,030 pounds and an allotment percentage of 55 percent.

(b) Class 3 (Native) oil—a salable quantity of 1,090,821 pounds and an allotment percentage of 46 percent.

Dated: March 5, 2014.

Rex A. Barnes,

Associate Administrator, Agricultural Marketing Service.

[FR Doc. 2014–05587 Filed 3–13–14; 8:45 am]

**BILLING CODE 3410–02–P**

**DEPARTMENT OF TRANSPORTATION**

**Federal Aviation Administration**

**14 CFR Part 39**

**[Docket No. FAA–2014–0156; Directorate Identifier 2014–CE–001–AD]** 

**RIN 2120–AA64**

**Airworthiness Directives; Costruzioni**
**Aeronautiche Tecnam srl Airplanes**

**AGENCY :**  Federal Aviation Administration (FAA), Department of Transportation (DOT).

**ACTION :**  Notice of proposed rulemaking

(NPRM).

**SUMMARY :**  We propose to adopt a new

airworthiness directive (AD) for

Costruzioni Aeronautiche Tecnam srl Model P2006T airplanes. This proposed AD results from mandatory continuing

airworthiness information (MCAI) originated by an aviation authority of another country to identify and correct

an unsafe condition on an aviation product. The MCAI describes the unsafe condition as a cracked engine mount. We are issuing this proposed AD to require actions to address the unsafe condition on these products.

**DATES :**  We must receive comments on this proposed AD by April 28, 2014.

**ADDRESSES :**  You may send comments by any of the following methods:

• Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments.

• Fax: (202) 493–2251.

• Mail: U.S. Department of Transportation, Docket Operations, M– 30, West Building Ground Floor, Room
W12–140, 1200 New Jersey Avenue SE., Washington, DC 20590.

• Hand Delivery: U.S. Department of Transportation, Docket Operations, M– 30, West Building Ground Floor, Room
W12–140, 1200 New Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

For service information identified in this proposed AD, contact Costruzioni

Aeronautiche Tecnam Airworthiness Office, Via Maiorise–81043 Capua (CE) Italy; telephone: +39 0823 620134; fax:

+39 0823 622899; email:

m.oliva@tecnam.com or g.paduano@tecnam.com ; Internet:

www.tecnam.com/it-IT/documenti/ service-bulletins.aspx. You may review copies of the referenced service information at the FAA, Small Airplane
Directorate, 901 Locust, Kansas City,

Missouri 64106. For information on the availability of this material at the FAA,

call (816) 329–4148.

Examining the AD Docket

You may examine the AD docket on

the Internet at http:// www.regulations.gov by searching for and locating Docket No. FAA–2014– 0156; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this proposed AD, the regulatory evaluation, any comments

received, and other information. The

street address for the Docket Office (telephone (800) 647–5527) is in the

**ADDRESSES** section. Comments will be available in the AD docket shortly after
receipt.

**FOR FURTHER INFORMATION CONTACT :**  Albert Mercado, Aerospace Engineer, FAA, Small Airplane Directorate, 901
Locust, Room 301, Kansas City, Missouri 64106; telephone: (816) 329–

4119; fax: (816) 329–4090; email: albert.mercado@faa.gov.

**SUPPLEMENTARY INFORMATION :** 

Comments Invited

We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments

to an address listed under the

**ADDRESSES** section. Include ‘‘Docket No.

FAA–2014–0156; Directorate Identifier 2014–CE–001–AD’’ at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this