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[Federal Register Volume 77, Number 66 (Thursday, April 5, 2012)]
[Rules and Regulations]
[Pages 20503-20505]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-8125]

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Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 
Prices of new books are listed in the first FEDERAL REGISTER issue of each 
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Federal Register / Vol. 77, No. 66 / Thursday, April 5, 2012 / Rules 
and Regulations

[[Page 20503]]

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 27 and 28

[Doc. AMS-CN-11-0066]
RIN 0581-AD19

Revision of Cotton Classification Procedures for Determining 
Cotton Leaf Grade

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Agricultural Marketing Service (AMS) is amending the 
procedures for determining the official leaf grade for Upland and Pima 
cotton. The leaf grade is a part of the official classification which 
denotes cotton fiber quality used in cotton marketing and manufacturing 
of cotton products. Previously, the leaf grade was determined by visual 
examination and comparison to the Universal Cotton Standards for Leaf 
Grade that serves as the official cotton standards by qualified cotton 
classers. Amended procedures replace the classer's leaf determination 
with the instrument leaf measurement made by the High Volume Instrument 
(HVI) system, which has been used in official cotton classification for 
Upland Cotton since 1991.

DATES: Effective Date: April 6, 2012.

FOR FURTHER INFORMATION CONTACT: Darryl Earnest, Deputy Administrator, 
Cotton & Tobacco Programs, AMS, USDA, 3275 Appling Road, Memphis, TN 
38133. Telephone (901) 384-3060, facsimile (901) 384-3021, or email 
darryl.earnest@ams.usda.gov.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This final rule has been determined to be not significant for 
purposes of Executive Order 12866, and, therefore, has not been 
reviewed by the Office of Management and Budget (OMB).

Executive Order 12988

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It is not intended to have retroactive effect. 
There are no administrative procedures which must be exhausted prior to 
any judicial challenge to the provisions of this final rule.

Background

    AMS Cotton and Tobacco Programs is amending the procedures for 
providing cotton leaf grade classification services as authorized by 
the United States Cotton Standards Act of 1923, as amended (7 U.S.C. 
51-65), the Cotton Statistics and Estimates Act of 1927 (7 U.S.C. 471-
476), and the U.S. Cotton Futures Act (7 U.S.C. 15b, 7 U.S.C. 4736, 7 
U.S.C. 1622(g)). While measurements for other quality factors are 
performed by precise HVI measurements, manual determinations for leaf 
grade and extraneous matter are currently part of the official USDA 
cotton classification. Accurate assignment of leaf grade is of economic 
importance to all participants along the cotton supply chain since leaf 
content is all waste and there is a cost factor associated with its 
removal. Furthermore, since small leaf particles cannot always be 
removed, these particles detract from the quality and, therefore, the 
value of the finished product.
    AMS has HVIs with the ability to optically identify, with a high 
level of confidence, the number of leaf particles (Particle Count) and 
to measure the surface area covered by non-lint particles (Area). AMS 
then applies mathematical algorithms to correlate Particle Count and 
Area data to the Universal Cotton Standards for Leaf Grade which serve 
as the ultimate comparison for cotton grading. A pilot project was 
conduct by AMS during 2009 and 2010 cotton classing seasons to evaluate 
the accuracy of the proposed instrument leaf grade determination 
process. Results showed that the HVI measures leaf as compared back to 
the Universal Cotton Standards for Leaf Grade more accurately than 
cotton classers. This rule amends the cotton classification process, 
replacing the classer's leaf determination with the instrument leaf 
measurement made by the HVI system. Instrument leaf grading is expected 
to improve the repeatability, consistency and accuracy of leaf grade 
classification data provided to the cotton industry, while improving 
operational efficiency.
    In Sec.  27.2 (n), the definition of the term ``classification'' is 
revised to reflect the changes in procedures made under 7 CFR part 28.
    Also under 7 CFR part 27, Sec.  27.31 is revised to reflect the 
deletion of the requirement for cotton classers to manually determine 
leaf grade. The revised section reflects the changes made in procedures 
for determination of cotton quality in accordance with the official 
standards.
    In 7 CFR part 28, Sec.  28.8 is revised to reflect the change in 
cotton classification procedures which replaces classer visual 
examinations to determine leaf grade with instrument leaf measurement 
by HVI systems.
    In addition, miscellaneous other changes are made to 7 CFR parts 27 
and 28 to better reflect current procedures in view of leaf 
determination change. For example, those determinations made by cotton 
classers or by authorized Cotton Program employees are specified.

Summary of Comments

    A proposed rule was published on December 23, 2011, with a comment 
period of December 23, 2011 through January 9, 2012 (76 FR 80278). AMS 
received four comments: One from a national trade organization that 
represents approximately 80 percent of the US cotton industry, 
including cotton producers, ginners, warehousemen, merchants, 
cooperatives, cottonseed processors, and textile manufacturers from 
Virginia to California; one from a national trade organization 
comprised of eight state and regional membership organizations that 
represent approximately 680 individual cotton ginning operations in 17 
cotton-producing states; one from a national trade organization 
representing cotton merchant firms that handle over 80 percent of the 
U.S. cotton sold in domestic and foreign markets; and one from an 
individual commenter who grades cotton. The comments from the trade 
organizations were supportive of both the proposed changes while the 
individual commenter was opposed. The comments may be viewed at 
www.regulations.gov.

[[Page 20504]]

    Comments from the three national trade organizations expressed 
support for AMS using instrument leaf grading as the method for 
determining official leaf grades. Furthermore, each of these 
organizations recognized how thorough testing conducted by AMS 
throughout both the 2009 and 2010 classing seasons demonstrated 
improvements in both the consistency and repeatability of leaf grade 
determination.
    One individual commenter expressed concerns about the accuracy of 
instrument-determined leaf grades, the timing of the regulatory change, 
and the length of the comment period. The commenter stated their belief 
that instrument leaf grading is not a more accurate means to grade 
cotton over a human classer. AMS began using the instrument-based 
system on a trial basis, with the ability of classers to overwrite 
inaccurately assigned data, during the 2009 and 2010 cotton crops. 
Results demonstrated significant improvements in accuracy and 
repeatability as factors such as grader fatigue and central tendency 
were eliminated. Trial results were presented at numerous open-forum 
discussions conducted throughout the Cotton Belt to ensure that 
technical and operational information was fully and accurately 
communicated to the various segments of the U.S. cotton industry. AMS 
graders in all field offices evaluated the process change for accuracy, 
provided feedback, and were briefed on the impact the change would have 
on streamlining their duties. AMS integrated these graders' feedback to 
help refine the computer system used for assigning the leaf grade.
    The timeline for implementing the process change was scheduled 
around the completion of critical software programing modifications 
made to more than four hundred proprietary AMS Information Technology 
(IT) programs. These computer programs ensure the accurate calculation, 
secure storage, and seamless flow of cotton quality data, while 
providing timely information to managers for the evaluation of 
equipment and employees. With the industry's acceptance, approval, and 
recommendation to implement, the expectation was that software 
modifications and the regulatory process would conclude concurrently 
prior to the beginning of the 2011 crop. However, changes in the 
timeline have resulted in finalization at this time.
    The comment period time frame was deemed appropriate to implement 
instrument leaf grading as soon as possible in order to allow the 
cotton industry to fully benefit from the increased accuracy and 
repeatability of cotton leaf data provided by instrument leaf grading 
during the current classing season. The timing of the comment period 
fell coincidentally during the Annual Cotton Beltwide Conference--the 
largest single gathering of representative of all segments of the U.S. 
cotton industry. AMS used this forum to notify constituents of the 
opportunity to submit comments.

Regulatory Flexibility Act and Paperwork Reduction Act

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), AMS has considered the economic impact of 
this action on small entities and has determined that its 
implementation will not have a significant economic impact on a 
substantial number of small entities. Fees paid by users of the service 
are not changed by this action; implementation of the new procedures 
indicates the existing fees remain sufficient to fully reimburse AMS 
for provision of the services.
    The purpose of the RFA is to fit regulatory actions to the scale of 
businesses subject to such actions so that small businesses will not be 
disproportionately burdened. There are an estimated 25,000 cotton 
growers, merchants, and textile manufacturers in the U.S. who 
voluntarily use the AMS cotton classing services annually under the 
United States Cotton Standards Act of 1923, as amended, the Cotton 
Statistics and Estimates Act of 1927, and the U.S. Cotton Futures Act. 
The majority of these cotton growers are small businesses under the 
criteria established by the Small Business Administration (13 CFR 
121.201). The change in procedures will not significantly affect small 
businesses as defined in the RFA because:
    (1) Classification will continue to be based upon the Universal 
Cotton Standards for Leaf Grade established and maintained by the 
Department;
    (2) The HVI measurement has been a part of the official 
classification record since 1991. Implementation of the revision for 
all cotton classification will not affect competition in the 
marketplace or adversely impact on cotton classification fees; and
    (3) The use of cotton classification services is voluntary. For the 
2010 crop, 17.6 million bales were produced by growers, and virtually 
all of them were voluntarily submitted for USDA classification. Futures 
classification services provided for merchants during the same period 
totaled approximately 750 thousand bales.
    In compliance with Office of Management and Budget (OMB) 
regulations (5 CFR part 1320), which implement the Paperwork Reduction 
Act (PRA) (44 U.S.C. 3501-3520), the information collection 
requirements contained in the regulation to be amended is currently 
approved under OMB control number 0581-0008, Cotton Classing, Testing 
and Standards.
    Pursuant to 5 U.S.C. 553, it is found that good cause exists for 
not postponing the effective date of the rule until 30 days after 
publication in the Federal Register because: (1) The 2011 cotton crop 
year has already begun; (2) the industry is familiar with instrument 
leaf grading process as AMS implemented a pilot project to evaluate the 
accuracy of the determination for crop years 2009 and 2010; and (3) 
there is overall industry support for this change.

List of Subjects

7 CFR Part 27

    Commodity futures, Cotton.

7 CFR Part 28

    Administrative practice and procedure, Cotton.

    For the reasons set forth in the preamble, 7 CFR parts 27 and 28 
are amended as follows:

PART 27--[AMENDED]

0
1. The authority citation for 7 CFR part 27 continues to read as 
follows:

    Authority:  7 U.S.C. 15b, 7 U.S.C. 4736, 7 U.S.C. 1622(g).

0
2. In Sec.  27.2, paragraph (n) is revised to read as follows:

Sec.  27.2  Terms defined.

* * * * *
    (n) Classification. The classification of any cotton shall be 
determined by the quality of a sample in accordance with the Universal 
Cotton Standards (the official cotton standards of the United States) 
for the color grade, the leaf grade, and fiber property measurements of 
American Upland cotton. High Volume Instruments will determine all 
fiber property measurements except extraneous matter. Cotton classers 
authorized by the Cotton and Tobacco Programs will determine the 
presence of extraneous matter.
* * * * *

0
3. Section 27.31 is revised to read as follows:

Sec.  27.31  Classification of Cotton.

    For purposes of subsection 15b (f) of The Act, classification of 
cotton is the determination of the quality of a sample in accordance 
with the Universal Cotton Standards (the official cotton standards of 
the United States) for the color grade

[[Page 20505]]

and leaf grade of American upland cotton, and fiber property 
measurements such as micronaire. High Volume Instruments will determine 
all fiber property measurements except extraneous matter. High Volume 
Instrument colormeter measurements will be used for determining the 
official color grade. Cotton classers authorized by the Cotton and 
Tobacco Programs will determine the presence of extraneous matter and 
authorized employees of the Cotton and Tobacco Programs will determine 
all fiber property measurements using High Volume Instruments.

PART 28--[AMENDED]

0
3. The authority citation for 7 CFR part 28 continues to read as 
follows:

    Authority:  7 U.S.C. 55 and 61.

0
4. Section 28.8 is revised to read as follows:

Sec.  28.8  Classification of cotton; determination.

    For the purposes of The Act, the classification of any cotton shall 
be determined by the quality of a sample in accordance with Universal 
Cotton Standards (the official cotton standards of the United States) 
for the color grade and the leaf grade of American upland cotton, the 
length of staple, and fiber property measurements such as micronaire. 
High Volume Instruments will determine all fiber property measurements 
except extraneous matter, special conditions and remarks. High Volume 
Instrument colormeter measurements will be used for determining the 
official color grade. Cotton classers authorized by the Cotton and 
Tobacco Programs will determine the presence of extraneous matter, 
special conditions and remarks and authorized employees of the Cotton 
and Tobacco Programs will determine all fiber property measurements 
using High Volume Instruments. The classification record of a Classing 
Office or the Quality Control Division with respect to any cotton shall 
be deemed to be the classification record of the Department.

    Dated: March 30, 2012.
Robert C. Keeney,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2012-8125 Filed 4-4-12; 8:45 am]
BILLING CODE 3410-02-P
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