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contains regulatory documents having general

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are keyed to and codified in the Code of

Federal Regulations, which is published under

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Rules and Regulations Federal Register

5379 

Vol. 77, No. 23 

Friday, February 3, 2012 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 27 

[Doc. #AMS–CN–10–0073; CN–10–005] 

RIN 0581–AD16 

Revision of Cotton Futures 

Classification Procedures 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Final rule. 

SUMMARY: The Agricultural Marketing 

Service (AMS) is amending the 

procedures for cotton futures quality 

classification services by using SmithDoxey classification data in the cotton 

futures classification process. In 

addition, references to a separate and 

optional review of cotton futures 

certification are being eliminated to 

reflect current industry practices. These 

changes in procedures for cotton futures 

quality classification services, as well as 

proposed conforming changes, reflect 

advances in cotton fiber quality 

measurement and data processing made 

since the regulations were last updated 

in 1992. 

DATES: Effective Date: March 5, 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 

revising procedures for providing 

services related to the classification of 

cotton futures as authorized by Act by 

using Smith-Doxey classification data in 

the cotton futures classification process. 

The Act requires USDA-certified quality 

measurements for each bale included in 

futures contracts for the purpose of 

verifying that each bale meets the 

minimum quality requirements for 

cotton futures trading. 

USDA was first directed to provide 

cotton classification services to 

producers of cotton under the SmithDoxey Act of April 13, 1937 (Pub. L. 75– 

28). Therefore, the original classification 

of a cotton bale’s sample and quality 

data which results from this 

classification is commonly referred to as 

the Smith-Doxey classification or SmithDoxey data. While cotton classification 

is not mandatory, practically every 

cotton bale grown in the United States 

today is classed by USDA under the 

authority of the Cotton Statistics and 

Estimates Act (7 U.S.C. 471–476) and 

the U.S. Cotton Standards Act (7 U.S.C. 

51–65) and under regulations found in 

7 CFR part 28—Cotton Classing, Testing, 

and Standards. The U.S. cotton industry 

uses Smith-Doxey classification data to 

assign quality-adjusted market values to 

U.S. cotton and market U.S. cotton both 

domestically and internationally. 

Although the Smith-Doxey classification 

and the futures classification are 

independent measures of cotton quality 

that serve different purposes, the SmithDoxey data is used by the cotton 

merchant community to indicate which 

bales may be tenderable against a cotton 

futures contract. 

USDA’s cotton classification 

capabilities have dramatically improved 

as a result of the extensive technological 

progress, increasing data accuracy and 

operational efficiency. In addition to the 

increased accuracy and reliability of 

Smith-Doxey data, improvements in 

data management and the desire to 

increase operational efficiencies have 

prompted the Cotton and Tobacco 

Programs to propose the use of SmithDoxey classification data in the cotton 

futures classification process. 

Currently, the futures classification 

process is a two-step process that occurs 

after the Smith-Doxey classification in 

which an initial futures classification is 

immediately verified by a review— 

commonly referred to as a final futures 

classification. When verified by a 

futures classification, Smith-Doxey 

classification data will serve as the 

initial futures classification with the 

verifying futures classification serving 

as the final futures classification, 

reducing the number of futures 

classifications required in many 

instances. Verification of Smith-Doxey 

classing data is necessary because 

certain quality characteristics— 

especially color—are known to change 

over time and when cotton is subjected 

to certain environmental conditions. 

In cases where the comparison of 

Smith-Doxey data and futures 

classification data fail to pass preestablished tolerances, a second futures 

classification will be required. The use 

of Smith-Doxey classification data will 

significantly reduce the need for yet 

another cotton futures classification. 

The proposed changes would improve 

operational efficiency while potentially 

improving the integrity and accuracy of 

classification data provided to the 

cotton industry. 

For the reasons set forth above, this 

rule amends 7 CFR part 27—Cotton 

Classification Under Cotton Futures 

Legislation, which establishes the 

procedures for determining cotton 

classification for cotton submitted for 

futures certification. Specific changes 

required to implement the revised 

futures classification procedure include 

the elimination of outdated procedures 

in sections 27.61–27.67, 27.69 and 27.72 

used to guide optional reviews of 

futures classifications and the 

elimination of references to fees charged 

for ‘‘initial classification and 

certification’’, ‘‘review classification and 

certification’’ and ‘‘combination 

services’’ in section 27.80. Conforming 

changes remove references to eliminated 

sections 27.9, 27.14, 27.21., 27.36 and 

27.47 and apply current organizational 

terminology in paragraph (h) of section 

27.2 and section 27.39. 


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5380 Federal Register / Vol. 77, No. 23 / Friday, February 3, 2012 / Rules and Regulations 

As stated above, the cotton futures 

classification includes a process by 

which an initial futures classification is 

followed up by a futures final 

classification. While not mandatory, this 

two-stage process has been deemed 

appropriate by the industry. Therefore, 

sections 27.61–27.67, 27.69 and 27.72, 

which address optional reviews of 

futures classifications, are irrelevant. 

Furthermore, reference to ‘‘initial 

classification and certification’’ fees in 

paragraph (a) of section 27.80 are 

removed to avoid confusion with SmithDoxey classifications and to reflect that 

initial classification fees are already 

specified in paragraph (b) of 7 CFR 

28.909. Likewise, reference to ‘‘review 

classification and certification’’ fees in 

paragraph (b) of section 27.80 are 

removed since fees for review 

classifications are already specified in 7 

CFR 28.911. 

The term ‘‘combination services’’ in 

paragraph (d) of section 27.80 reflects 

the current practice of performing an 

‘‘initial’’ futures classification and an 

immediate ‘‘review’’ futures 

classification. Since Smith-Doxey 

classification data serves as the initial 

futures classification when verified by a 

‘‘review’’ futures classification, these 

services are simply defined as ‘‘futures 

classification services.’’ 

Summary of Comments 

A proposed rule was published on 

September 29, 2011, with a comment 

period of September 29, 2011 through 

October 31, 2011. (76 FR 60388). No 

comments were received by AMS from 

individuals or various organizations 

representing segments of the cotton 

industry. 

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 

approximately sixty cotton merchant 

organizations of various sizes active in 

trading U.S. cotton. Cotton merchants 

voluntarily use the AMS cotton futures 

classification services annually under 

the Cotton Futures Act (Act) (7 U.S.C. 

15b). Many of these cotton merchants 

are small businesses under the criteria 

established by the Small Business 

Administration (13 CFR 121.201). 

Revisions being proposed reflect the 

progress made in quality determination 

and data dissemination. The proposed 

process changes in the classification of 

cotton futures will yield increases of 

efficiency to the benefit of the cotton 

marketing industry. 

There are no Federal rules that 

duplicate, overlap, or conflict with this 

rule. 

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 have been previously 

approved by OMB and were assigned 

control number 0581–0008, Cotton 

Classing, Testing and Standards. 

List of Subjects in 7 CFR Part 27 

Commodity futures, Cotton. 

For the reasons set forth in the 

preamble 7 CFR part 27 is amended as 

follows: 

PART 27—[AMENDED] 

■ 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). 

■ 2. Section 27.2 paragraph (h) is 

revised to read as follows: 

§ 27.2 Terms defined. 

* * * * * 

(h) Quality Assurance Division. The 

Quality Assurance Division at Memphis, 

Tennessee; shall provide supervision of 

futures cotton classification. 

* * * * * 

■ 3. Section 27.9 is revised to read as 

follows: 

§ 27.9 Classing Offices; Quality Assurance 

Division. 

Classing Offices shall be maintained 

at points designated for the purpose by 

the Administrator. The Quality 

Assurance Division shall provide 

supervision of futures cotton 

classification and perform other duties 

as assigned by the Deputy 

Administrator. 

■ 4. Section 27.14 is revised to read as 

follows: 

§ 27.14 Filing of classification requests. 

Requests for futures classification 

shall be filed with the Quality 

Assurance Division within 10 days after 

sampling and before classification of the 

samples. 

§ 27.21 [Removed and Reserved] 

■ 5. Section 27.21 is removed and 

reserved. 

■ 6. Section 27.36 is revised to read as 

follows: 

§ 27.36 Classification determinations 

based on official standards. 

All cotton shall be classified on the 

basis of the official cotton standards of 

the United States in effect at the time of 

such classification. 

■ 7. Section 27.39 is revised to read as 

follows: 

§ 27.39 Issuance of classification records. 

Except as otherwise provided in this 

section, as soon as practicable after the 

classification of cotton has been 

completed by the Cotton and Tobacco 

Programs, the Quality Assurance 

Division shall issue an electronic cotton 

classification record showing the results 

of such classification. Each electronic 

record shall bear the date of its issuance. 

The electronic record shall show the 

identification of the cotton according to 

the information in the possession of the 

Cotton and Tobacco Programs, the 

classification of the cotton and such 

other facts as the Deputy Administrator 

may require. 

■ 8. Section 27.47 is revised to read as 

follows: 

§ 27.47 Tender or delivery of cotton; 

conditions. 

Subject to the provisions of §§ 27.52 

through 27.55, no cotton shall be 

tendered or delivered on a basis grade 

contract unless on or prior to the date 

fixed for delivery under such contract, 

and in advance of final settlement of the 

contract, the person making the tender 

shall furnish to the person receiving the 

same a valid outstanding cotton 

classification record complying with the 

regulations in this subpart, showing 

such cotton to be tenderable on a basis 

grade contract. 

§ 27.61 [Removed and Reserved] 

■ 9. The undesignated center heading 

preceding § 27.61 is removed and 

§ 27.61 is removed and reserved. 

§§ 27.62–27.67 [Removed and Reserved] 

■ 10. Sections 27.62–27.67 are removed 

and reserved. 


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Federal Register / Vol. 77, No. 23 / Friday, February 3, 2012 / Rules and Regulations 5381 

§ 27.69 [Removed and Reserved] 

■ 11. Section 27.69 is removed and 

reserved. 

§ 27.72 [Removed and Reserved] 

■ 12. Section 27.72 is removed and 

reserved. 

■ 13. Section 27.80 is revised to read as 

follows: 

§ 27.80 Fees; review classification, futures 

classification and supervision. 

For services rendered by the Cotton 

and Tobacco Programs pursuant to this 

subpart, whether the cotton involved is 

tenderable or not, the person requesting 

the services shall pay fees as follows: 

(a) [Reserved] 

(b) [Reserved] 

(c) [Reserved] 

(d) Futures classification—$3.50 per 

bale. 

Dated: January 30, 2012. 

David R. Shipman, 

Acting Administrator, Agricultural Marketing 

Service. 

[FR Doc. 2012–2382 Filed 2–2–12; 8:45 am] 

BILLING CODE 3410–02–P 

DEPARTMENT OF AGRICULTURE 

Animal and Plant Health Inspection 

Service 

7 CFR Part 301 

[Docket No. APHIS–2011–0004] 

RIN 0579–AD58 

Plum Pox Compensation 

AGENCY: Animal and Plant Health 

Inspection Service, USDA. 

ACTION: Interim rule and request for 

comments. 

SUMMARY: We are amending the plum 

pox regulations to provide for the 

payment of compensation to eligible 

owners of non-fruit-bearing ornamental 

tree nurseries and to increase the 

amount of compensation that may be 

paid to eligible owners of commercial 

stone fruit orchards and fruit tree 

nurseries whose trees are required to be 

destroyed in order to prevent the spread 

of plum pox. We are also providing 

updated instructions for the submission 

of claims for compensation. These 

changes are necessary to provide 

adequate compensation to persons who 

are economically affected by the plum 

pox quarantine and the associated State 

and Federal eradication efforts. This 

action will assist our efforts to eradicate 

plum pox in the United States. 

DATES: This interim rule is effective 

upon February 3, 2012. We will 

consider all comments that we receive 

on or before April 3, 2012. 

ADDRESSES: You may submit comments 

by either of the following methods: 

• Federal eRulemaking Portal: Go to 

http://www.regulations.gov/ 

#!documentDetail;D=APHIS-2011-0004- 

0001. 

• Postal Mail/Commercial Delivery: 

Send your comment to Docket No. 

APHIS–2011–0004, Regulatory Analysis 

and Development, PPD, APHIS, Station 

3A–03.8, 4700 River Road Unit 118, 

Riverdale, MD 20737–1238. 

Supporting documents and any 

comments we receive on this docket 

may be viewed at http:// 

www.regulations.gov/ 

#!docketDetail;D=APHIS-2011-0004 or 

in our reading room, which is located in 

room 1141 of the USDA South Building, 

14th Street and Independence Avenue 

SW., Washington, DC. Normal reading 

room hours are 8 a.m. to 4:30 p.m., 

Monday through Friday, except 

holidays. To be sure someone is there to 

help you, please call (202) 690–2817 

before coming. 

FOR FURTHER INFORMATION CONTACT: Dr. 

S. Anwar Rizvi, Plum Pox National 

Program Manager, PPQ, APHIS, 4700 

River Road Unit 26, Riverdale, MD 

20737–1231; (301) 734–4313. 

SUPPLEMENTARY INFORMATION: 

Background 

Plum pox is an extremely serious viral 

disease of plants that can affect many 

Prunus (stone fruit) species, including 

plum, peach, apricot, almond, nectarine, 

and sweet and tart cherry. A number of 

wild and ornamental Prunus species 

may also be susceptible to this disease. 

Infection eventually results in severely 

reduced fruit production, and the fruit 

that is produced is often misshapen and 

blemished. In Europe, plum pox has 

been present for a number of years and 

is considered to be the most serious 

disease affecting susceptible Prunus 

varieties. Plum pox is transmitted 

locally by various aphid species, as well 

as by budding and grafting with infected 

plant material, and spreads over longer 

distances through movement of infected 

budwood, nursery stock, and other plant 

parts. 

There are no known effective methods 

for treating trees or other plant material 

infected with plum pox, nor are there 

any known effective prophylactic 

treatments to prevent the disease from 

occurring in trees that are exposed to 

the disease due to their proximity to 

infected trees. Without effective 

treatments, the only option for 

preventing the spread of the disease is 

the destruction of infected and exposed 

trees. 

The first documented case of plum 

pox in the United States was detected in 

an Adams County, PA, orchard in 1999. 

In 2006, additional detections were 

made in New York and Michigan. 

Through cooperative Federal/State 

efforts, plum pox has been eradicated in 

Pennsylvania and Michigan. Currently, 

portions of Niagara, Orleans, and Wayne 

Counties, NY, are the only areas in the 

United States quarantined because of 

plum pox. 

The regulations in Subpart—Plum 

Pox (7 CFR 301.74 through 301.74–5), 

referred to below as the regulations, 

quarantine areas of the United States 

where plum pox has been detected and 

restrict the interstate movement of 

regulated articles (e.g., trees, seedlings, 

root stock, budwood, branches, twigs, 

and leaves of susceptible Prunus spp.) 

from quarantined areas to prevent the 

spread of plum pox virus (PPV) into 

uninfected areas of the United States. 

In addition to the quarantine and 

interstate movement restrictions in the 

regulations, § 310.74–5 also provides for 

the payment of compensation to eligible 

owners of commercial stone fruit 

orchards, including direct marketers, 

and fruit tree nurseries. Compensation 

payments are provided to eligible 

orchard owners to mitigate losses 

associated with the destruction of trees 

in order to control plum pox pursuant 

to an emergency action notification 

(EAN) issued by the U.S. Department of 

Agriculture’s (USDA) Animal and Plant 

Health Inspection Service (APHIS). 

Payments are also provided to eligible 

nursery owners to mitigate the net 

revenue losses associated with the 

prohibition on the movement or sale of 

nursery stock as a result of the issuance 

of an EAN by APHIS with respect to 

regulated articles within the nursery in 

order to control plum pox. 

The compensation provisions of 

§ 301.74–5 were established to reduce 

the economic effect of the plum pox 

quarantine on affected commercial 

growers and nursery owners, thus 

ensuring their continued cooperation 

with the survey and eradication 

activities being conducted by APHIS 

and State plant health agencies. The 

availability of compensation played an 

important role in the successful 

eradication of plum pox from Adams 

County, PA. Affected owners of 

commercial stone fruit orchards and 

fruit tree nurseries in the quarantined 

areas of New York are eligible for, and 

have received, compensation payments 

in connection with the destruction of 

trees and the resulting loss in income 


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