**GAO-03-245R**                      Dec 04, 2002                  

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## Highlights

GAO reviewed the Department of Agriculture, Commodity Credit Corporation's (CCC) final rule on the Farm Security and Rural Investment Act of 2002 commodity programs of the CCC. GAO noted that (1) the rule expands the loans that may be available to producers through agricultural marketing cooperatives, (2) the rule makes a number of changes to the cotton regulations, (3) the rule provides for marketing assistance loans or loan deficiency payments to honey producers, and (4) the rule adds new marketing assistance loan and loan deficiency payments programs for mohair and wool, (5) the rule continues the dairy price support program and authorizes a new Milk Income Loss Program to provide income support for dairy farmers; and (6) CCC complied with the applicable requirements in promulgating the rule.

##  Department of Agriculture, Commodity Credit Corporation: 2002 Farm Bill Regulations--Cooperative Marketing Associations; Cotton; Dairy; Honey, GAO-03-245R, December 4, 2002

B-291576December 4, 2002The Honorable Tom Harkin     Chairman     The Honorable Richard G. Lugar     Ranking Minority Member     Committee on Agriculture, Nutrition, and Forestry     United States SenateThe Honorable Larry Combest     Chairman     The Honorable Charles W. Stenholm     Ranking Minority Member     Committee on Agriculture     House of Representatives     Subject:*Department of Agriculture, Commodity Credit Corporation: 2002 Farm Bill Regulations--Cooperative Marketing Associations; Cotton; Dairy;    Honey*Pursuant to section 801(a)(2)(A) of title 5, United States Code, this is our report on a major rule promulgated by the Department of    Agriculture, Commodity Credit Corporation (CCC), entitled 2002 Farm Bill Regulations--Cooperative Marketing Associations; Cotton; Dairy; Honey (RIN: 0560-AG72).  We received    the rule on November 29, 2002.  It was published in the Federal Register as a final rule on October 18, 2002.  67 Fed. Reg. 64454.     The final rule implements requirements of Title I of the Farm Security and Rural Investment Act of 2002 (the 2002 Act)(Pub. L. 107-171) relating to the commodity programs of the CCC.  The    rule (1) expands the loans that may be available to producers through agricultural marketing cooperatives, (2) makes a number of changes to the cotton regulations, (3) provides for marketing    assistance loans or loan deficiency payments to honey producers, and (4) adds new marketing assistance loan and loan deficiency payment programs for mohair and wool.  The rule also continues    the dairy price support program and authorizes a new Milk Income Loss Program to provide income support for dairy farmers.     Enclosed is our assessment of the CCC's compliance with the procedural steps required by section 801(a)(1)(B)(i) through (iv) of title 5 with respect to the rule.  Our review indicates that    the CCC complied with the applicable requirements     If you have any questions about this report, please contact James W. Vickers, Assistant General Counsel, at (202) 512-8210.  The official responsible for GAO evaluation work relating to the    subject matter of the rule is Robert Robinson, Managing Director, Natural Resources and Environment.  Mr. Robinson can be reached at (202) 512-3841.                 signed     Kathleen E. Wannisky     Managing Associate General Counsel     Enclosure     cc: Thomas J. Witzig     Chief, Regulatory Review Group     Department of Agriculture            ENCLOSURE     ANALYSIS UNDER 5 U.S.C.  801(a)(1)(B)(i)-(iv) OF A MAJOR RULE     ISSUED BY THE     DEPARTMENT OF AGRICULTURE,     COMMODITY CREDIT CORPORATION     ENTITLED     "2002 FARM BILL REGULATIONS--COOPERATIVE MARKETING     ASSOCIATIONS; COTTON; DAIRY; HONEY"     (RIN: 0560-AG72)(i) Cost-benefit analysis     CCC estimates that outlays for marketing loans are projected at $1.2 billion for upland cotton in fiscal year (FY) 2003 but will decline to $0.4 million in FY 2007.  Outlays for the Upland    Cotton User Marketing Certificate Program are expected to increase by $95 million per year through FY 2006.  Annual outlays for the extra long staple cotton payments are estimated to be in    the range of $1.3 million to $3.9 million per year.     CCC expenditures with the extended Milk Price Support Program will be approximately $2.0 billion for FY 2002 through 2007, of which $1.6 billion is for product purchases.  Over the period    December 1, 2001, through September 30, 2005, the Milk Income Loss Contract Program is expected to result in payments to dairy operations in the range of $3.5 billion to $4.5 billion    annually.      The Honey Marketing Assistance Loans and Loan Deficiency Payments are estimated at $26.1 million.(ii) Agency actions relevant to the Regulatory Flexibility Act, 5 U.S.C.  603-605, 607, and 609     Since the final rule was not issued following a notice of proposed rulemaking, the requirements of the Regulatory Flexibility Act do not apply.(iii) Agency actions relevant to sections 202-205 of the Unfunded Mandates Reform Act of 1995, 2 U.S.C.  1532-1535     The final rule does not contain either an intergovernmental or a private sector mandate, as defined in title II, of more than $100 million in any one year.(iv) Other relevant information or requirements under acts and executive orders     Administrative Procedure Act, 5 U.S.C.  551 etseq.     Section 1601(c) of the Farm Security and Rural Investment Act of 2002 states that the final rule shall be issued without regard to the requirements of 5 U.S.C. 553.     Paperwork Reduction Act, 44 U.S.C.  3501-3520     Section 1601(c) of the Farm Security and Rural Investment Act of 2002 states that the final rule shall be issued without regard to the requirements of the Paperwork Reduction Act.     Statutory authorization for the rule     The final rule is promulgated under the authority of Title I of the Farm Security and Rural Investment Act of 2002 (Pub. L. 107-171).     Executive Order No. 12866     The final rule was reviewed by the Office of Management and Budget and found to be an economically significant regulatory action under the order.

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