[Federal Register Volume 65, Number 28 (Thursday, February 10, 2000)]
[Rules and Regulations]
[Pages 6528-6531]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-3041]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 985

[Docket No. FV00-985-3 IFR]


Marketing Order Regulating the Handling of Spearmint Oil Produced 
in the Far West; Revision of the Salable Quantity and Allotment 
Percentage for Class 3 (Native) Spearmint Oil for the 1999-2000 
Marketing Year

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule increases the quantity of Class 3 (Native) spearmint 
oil produced in the Far West that handlers may purchase from, or handle 
for, producers during the 1999-2000 marketing year. This interim final 
rule increases the Native spearmint oil salable quantity by 102,311 
pounds from 1,125,755 pounds to 1,228,066 pounds, and the allotment 
percentage by 5 percent from 55 percent to 60 percent. 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 this rule to avoid extreme fluctuations in 
supplies and prices and thus help to maintain stability in the Far West 
spearmint oil market.

DATES: Effective on February 11, 2000 through May 31, 2000; comments 
received by April 10, 2000 will be considered prior to issuance of a 
final rule.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent to the Docket Clerk, Fruit 
and Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box 96456, 
Washington, DC 20090-6456; Fax: (202) 720-5698, or E-mail: 
<a href="/cdn-cgi/l/email-protection#75181a14175b111a161e1001161910071e35000611145b121a03"><span class="__cf_email__" data-cfemail="f69b999794d89299959d9382959a93849db683859297d8919980">[email protected]</span></a>. All comments should reference the docket 
number and the date and page number of this issue of the Federal 
Register and

[[Page 6529]]

will be made available for public inspection in the Office of the 
Docket Clerk during regular business hours.

FOR FURTHER INFORMATION CONTACT: Robert J. Curry, Northwest Marketing 
Field Office, Marketing Order Administration Branch, Fruit and 
Vegetable Programs, AMS, USDA, 1220 SW Third Avenue, room 369, 
Portland, Oregon 97204-2807; telephone: (503) 326-2724, Fax: (503) 326-
7440; or George Kelhart, Technical Advisor, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, room 
2525-S, P.O. Box 96456, Washington, DC 20090-6456; telephone: (202) 
720-2491, Fax: (202) 720-5698.
    Small businesses may request information on complying with this 
regulation by contacting Jay Guerber, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box 
96456, Washington, DC 20090-6456; telephone (202) 720-2491; Fax: (202) 
720-5698, or E-mail: <a href="/cdn-cgi/l/email-protection#baf0dbc394fdcfdfc8d8dfc8facfc9dedb94ddd5cc"><span class="__cf_email__" data-cfemail="db91baa2f59caebea9b9bea99baea8bfbaf5bcb4ad">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:  This rule is issued under Marketing Order 
No. 985 (7 CFR Part 985), 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.'' 
This order is effective under the Agricultural Marketing Agreement Act 
of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the 
``Act.''
    The Department of Agriculture (Department) is issuing this rule in 
conformance with Executive Order 12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the provisions of the marketing order now in 
effect, salable quantities and allotment percentages may be established 
for classes of spearmint oil produced in the Far West. This rule 
increases the quantity of Native spearmint oil produced in the Far West 
that may be purchased from or handled for producers by handlers during 
the 1999-2000 marketing year, which ends on May 31, 2000. This rule 
will not preempt any State or local laws, regulations, or policies, 
unless they present an irreconcilable conflict with this rule.
    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 the Secretary a 
petition stating that the order, any provision of the order, or any 
obligation imposed in connection with the order is not in accordance 
with 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 the Secretary 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 the Secretary'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 U.S. production of spearmint oil is concentrated in the Far 
West, primarily Washington, Idaho, and Oregon (part of the area covered 
by the order). Spearmint oil is also produced in the Midwest. The 
production area covered by the order normally accounts for 
approximately 63 percent of the annual U.S. production of Scotch 
spearmint oil and approximately 93 percent of the annual U.S. 
production of Native spearmint oil.
    This rule increases the quantity of Native spearmint oil that 
handlers may purchase from, or handle for, producers during the 1999-
2000 marketing year, which ends on May 31, 2000. This rule increases 
the salable quantity from 1,125,755 pounds to 1,128,066 pounds and the 
allotment percentage from 55 percent to 60 percent for Native spearmint 
oil for the 1999-2000 marketing year.
    The salable quantity is the total quantity of each class of oil 
that handlers may purchase from, or handle for, producers during a 
marketing year. The salable quantity calculated by the Committee is 
based on the estimated trade demand. The total salable quantity is 
divided by the total industry allotment base to determine an allotment 
percentage. Each producer is allotted a share of the salable quantity 
by applying the allotment percentage to the producer's individual 
allotment base for the applicable class of spearmint oil.
    The initial salable quantity and allotment percentages for Scotch 
and Native spearmint oils for the 1999-2000 marketing year were 
recommended by the Committee at its October 7, 1998, meeting. The 
Committee recommended salable quantities of 1,199,190 pounds and 
1,125,755 pounds, and allotment percentages of 65 percent and 55 
percent, respectively, for Scotch and Native spearmint oils. A proposed 
rule was published in the November 17, 1998, issue of the Federal 
Register (63 FR 63804). A final rule establishing the salable 
quantities and allotment percentages for Scotch and Native spearmint 
oils for the 1999-2000 marketing year was published in the January 19, 
1999, issue of the Federal Register (64 FR 2799).
    Pursuant to authority contained in sections 985.50, 985.51, and 
985.52 of the order, at its January 13, 2000, meeting, the Committee 
unanimously recommended that the allotment percentage for Native 
spearmint oil for the 1999-2000 marketing year be increased by 5 
percent from 55 percent to 60 percent. Taking into consideration the 
following discussion on adjustments to the Native spearmint oil salable 
quantity, the 1999-2000 marketing year salable quantity of 1,125,755 
pounds will therefore be increased to 1,228,066 pounds.
    The original total industry allotment base for Native spearmint oil 
for the 1999-2000 marketing year was established at 2,046,828 pounds 
and was revised during the year to 2,046,214 pounds to reflect a loss 
of 614 pounds of base due to non-production of some producers' total 
annual allotments. When the revised total allotment base of 2,046,214 
pounds is applied to the originally established allotment percentage of 
55, the 1999-2000 marketing year salable quantity of 1,125,755 pounds 
is effectively modified to 1,125,418 pounds.
    By increasing the salable quantity and allotment percentage, this 
rule makes an additional amount of Native spearmint oil available by 
releasing such oil from the reserve pool. When applied to each 
individual producer, the 5 percent allotment percentage increase allows 
each producer to take up to an amount equal to 5 percent of their 
allotment base from their Native spearmint oil reserve. If a producer 
does not have any reserve pool oil, or has less than 5 percent of their 
allotment base in the reserve pool, the increase in allotment 
percentage will actually make less than such amount available to the 
market. Currently, producers receiving 10,020 pounds of additional 
allotment through this increase do not have any Native spearmint oil in 
reserve. Thus, rather than 102,311 additional pounds, this action 
effectively makes an additional 92,291 pounds of Native spearmint oil 
available to the market.
    The following table summarizes the Committee recommendation:

Native Spearmint Oil Recommendation

    (A) Estimated 1999-2000 Allotment Base--2,046,828 pounds. This is 
the figure the original 1999-2000 salable quantities and allotment 
percentages were based on.
    (B) Revised 1999-2000 Allotment Base--2,046,214 pounds. This is 614

[[Page 6530]]

pounds less than the estimated allotment base. This is less because 
some producers failed to produce all of their previous year's 
allotment.
    (C) Initial 1999-2000 Allotment Percentage--55 percent.
    (D) Initial 1999-2000 Salable Quantity--1,125,755 pounds. This 
figure is 55 percent of 2,046,828 pounds.
    (E) Initial Adjustment to the 1999-2000 Salable Quantity--1,125,418 
pounds. This figure reflects the salable quantity available after the 
beginning of the 1999-2000 marketing year due to the 614 pound 
reduction in the industry allotment base to 2,046,214 pounds.
    (F) Increase in Allotment Percentage--5 percent. This percentage 
increase was recommended by the Committee at its January 13, 2000, 
meeting.
    (G) Revised 1999-2000 Allotment Percentage--60 percent. This figure 
is derived by adding the 5 percent increase to the initial 1999-2000 
allotment percentage of 55 percent.
    (H) Computed Increase in the 1999-2000 Salable Quantity--102,311 
pounds. This is the product of the revised 1999-2000 allotment base of 
2,046,214 and the 5 percent increase.
    (I) Revised 1999-2000 Salable Quantity--1,228,066 pounds. This 
figure is 60 percent of the estimated 1999-2000 allotment base of 
2,046,214 pounds.
    (J) Effective Increase in the 1999-2000 Salable Quantity--92,291 
pounds. This figure represents the amount of Native spearmint oil 
actually being made available by this action based on the adjustments 
described herein.
    In making this latest recommendation, the Committee considered all 
available information on supply and demand. The 1999-2000 marketing 
year began on June 1, 1999. Handlers have indicated that with this 
action, the available supply of both Scotch and Native spearmint oils 
appears adequate to meet anticipated demand through May 31, 2000. 
Without the increase, the Committee believes the industry would not be 
able to meet market needs. As of January 13, 2000, approximately 25,000 
pounds of Native spearmint oil was available for market. The average 
for sales of Native spearmint oil from January 1 to May 31 over the 
past 5 years is 208,994 pounds. However, average sales for the period 
June 1 through December 31 for the past 5 years are 953,978 pounds. The 
Far West spearmint oil industry has sold 1,206,290 pounds of Native 
spearmint oil through January 13, 2000. Therefore, based on past 
history the industry may require at least about 40,000 additional 
pounds of Native to meet the five year average annual market demand. 
This action has the effect of adding 92,291 pounds of Native spearmint 
oil to the amount available for market, bringing the total available 
supply for the period January 13 through May 31, 2000, up to 
approximately 117,300 pounds.
    The Department, based on its analysis of available information, has 
determined that the salable quantity and allotment percentage for 
Native spearmint oil for the 1999-2000 marketing year should be 
increased to 1,228,066 and 60 percent, respectively.
    This rule relaxes the regulation of Native spearmint oil and will 
allow growers to meet market needs and improve returns. In conjunction 
with the issuance of this rule, the Committee's revised marketing 
policy statement for the 1999-2000 marketing year has been reviewed by 
the Department. The Committee's marketing policy statement, a 
requirement whenever the Committee recommends implementing volume 
regulations or recommends revisions to existing volume regulations, 
meets the intent of section 985.50 of the order. During its discussion 
of revising the 1999-2000 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) prospective production of each class of oil; (4) 
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 the Department's ``Guidelines for Fruit, 
Vegetable, and Specialty Crop Marketing Orders'' has also been reviewed 
and confirmed.
    The increase in the Native spearmint oil salable quantity and 
allotment percentage allows for anticipated market needs for this class 
of oil. In determining anticipated market needs, consideration by the 
Committee was given to historical sales, and changes and trends in 
production and demand.
    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the AMS has considered the economic impact of this action on 
small entities. Accordingly, the AMS has prepared this initial 
regulatory flexibility analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and rules issued thereunder, are unique in that 
they are brought about through group action of essentially small 
entities acting on their own behalf. Thus, both statutes have small 
entity orientation and compatibility.
    There are 7 spearmint oil handlers subject to regulation under the 
marketing order and approximately 119 producers of Scotch spearmint oil 
and 105 producers of Native spearmint oil in the regulated production 
area. Small agricultural service firms are defined by the Small 
Business Administration (SBA) (13 CFR 121.201) as those having annual 
receipts of less than $5,000,000, and small agricultural producers have 
been defined as those whose annual receipts are less than $500,000.
    Based on the SBA's definition of small entities, the Committee 
estimates that 2 of the 7 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 
25 of the 119 Scotch spearmint oil producers and 7 of the 105 Native 
spearmint oil producers would 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. Crop rotation is an essential cultural 
practice in the production of spearmint oil for weed, insect, and 
disease control. A normal spearmint oil producing operation would have 
enough acreage for rotation such that the total acreage required to 
produce the crop would be about one-third spearmint and two-thirds 
rotational crops. An average spearmint oil producing farm would thus 
have to have considerably more acreage than would be planted to 
spearmint during any given season. To remain economically viable with 
the added costs associated with spearmint oil production, most 
spearmint oil producing farms would fall into the category of large 
businesses.
    Small spearmint oil producers represent a minority of farming 
operations and are more vulnerable to market fluctuations. Such small 
farmers

[[Page 6531]]

generally need to market their entire annual crop and do not have the 
resources 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 of stronger 
incomes from alternate crops which could support the operation for a 
period of time. Despite the advantage larger producers may have, 
increasing the Native salable quantity and allotment percentage will 
help both large and small producers by improving returns.
    Based on projections available at the meeting, the Committee 
considered alternatives to the 5 percent increase. The Committee not 
only considered leaving the salable quantity and allotment percentage 
unchanged, but also looked at various increases ranging from 1 percent 
to 15 percent. The Committee reached its recommendation to increase the 
salable quantity and allotment percentage for Native spearmint oil 
after careful consideration of all available information, and believes 
that the level recommended will achieve the objectives sought. Without 
the increase, the Committee believes the industry would not be able to 
meet market needs. As of January 13, 2000, approximately 25,000 pounds 
of Native spearmint oil was available for market. The past 5-year 
average of Native spearmint oil sales from January 1 to May 31 is 
208,994 pounds, whereas the 5-year average for the period June 1 
through December 31 is 953,978 pounds. The Far West spearmint oil 
industry has sold 1,206,290 pounds of Native spearmint oil this season 
through January 13, 2000. Therefore, based on historical sales the 
industry may require about 40,000 additional pounds of Native oil to 
meet the five-year average annual market demand. This action has the 
effect of adding 92,291 pounds of Native spearmint oil to the amount 
available for market, bringing the total available supply for the 
period January 13 through May 31, 2000, up to approximately 117,300 
pounds.
    Annual salable quantities and allotment percentages have been 
issued for both classes of spearmint oil since the order's inception. 
Reporting and recordkeeping requirements have remained the same for 
each year of regulation. Accordingly, this action will not impose any 
additional reporting or recordkeeping requirements on either small or 
large spearmint oil producers and handlers. All reports and forms 
associated with this program are reviewed periodically in order to 
avoid unnecessary and duplicative information collection by industry 
and public sector agencies. The Department has not identified any 
relevant Federal rules that duplicate, overlap, or conflict with this 
rule.
    Finally, the Committee's meeting was widely publicized throughout 
the spearmint oil industry and all interested persons were invited to 
attend and participate on all issues. Interested persons are also 
invited to submit information on 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 the 
following website: http://www.ams.usda.gov/fv/moab.html. Any questions 
about the compliance guide should be sent to Jay Guerber at the 
previously mentioned address in the FURTHER INFORMATION CONTACT 
section.
    After consideration of all relevant matter presented, including 
that contained in the prior proposed and final rules in connection with 
the establishment of the salable quantities and allotment percentages 
for Scotch and Native spearmint oils for the 1999-2000 marketing year, 
the Committee's recommendation and other available information, it is 
found that to revise section 985.218 (42 FR 2799) to change the salable 
quantity and allotment percentage for Native spearmint oil, as 
hereinafter set forth, will tend to effectuate the declared policy of 
the Act.
    This rule invites comments on a revision to the salable quantity 
and allotment percentage for Native spearmint oil for the 1999-2000 
marketing year. A 60-day comment period is provided. Any comments 
received will be considered prior to finalization of this rule.
    Pursuant to 5 U.S.C. 553, it is also found and determined upon good 
cause that it is impracticable, unnecessary, and contrary to the public 
interest to give preliminary notice prior to putting this rule into 
effect and that good cause exists for not postponing the effective date 
of this rule until 30 days after publication in the Federal Register 
because: (1) This rule increases the quantity of Native spearmint oil 
that may be marketed during the marketing year which ends on May 31, 
2000; (2) the current quantity of Native spearmint oil may be 
inadequate to meet demand for the remainder of the season, thus making 
the additional oil available as soon as is practicable is beneficial to 
both handlers and producers; (3) the Committee unanimously recommended 
this change at a public meeting and interested parties had an 
opportunity to provide input; and (4) this rule provides a 60-day 
comment period and any comments received will be considered prior to 
finalization of this rule.

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 
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 985.218 is amended by republishing the introductory text 
and revising paragraph (b) to read as follows:

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


Sec. 985.218  Salable quantities and allotment percentages-1999-2000 
marketing year.

    The salable quantity and allotment percentage for each class of 
spearmint oil during the marketing year beginning on June 1, 1999, 
shall be as follows:
* * * * *
    (b) Class 3 (Native) oil--a salable quantity of 1,288,066 pounds 
and an allotment percentage of 60 percent.

    Dated: February 4, 2000.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 00-3041 Filed 2-9-00; 8:45 am]
BILLING CODE 3401-02-P


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