[Federal Register Volume 70, Number 238 (Tuesday, December 13, 2005)]
[Rules and Regulations]
[Pages 73556-73559]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-23911]
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DEPARTMENT OF AGRICULTURE
Grain Inspection, Packers and Stockyards Administration
7 CFR Part 800
RIN 0580-AA87
Export Inspection and Weighing Waiver for High Quality Specialty
Grains Transported in Containers
AGENCY: Grain Inspection, Packers and Stockyards Administration, USDA.
ACTION: Final rule.
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SUMMARY: The Grain Inspection, Packers and Stockyards Administration
(GIPSA) is amending regulations under the United States Grain Standards
Act (USGSA) to waive the mandatory inspection and weighing requirements
of the USGSA for high quality specialty grains exported in containers.
GIPSA is establishing this waiver to facilitate the marketing of high
quality specialty grains exported in containers. This action is
consistent with the objectives of the USGSA and will promote the
continuing development of the high quality specialty export market.
This waiver will be in effect for a maximum of 5 years, and if after
this time period GIPSA determines that this waiver continues to advance
the objectives of the USGSA, GIPSA will consider making this waiver
permanent.
DATES: Effective January 12, 2006
FOR FURTHER INFORMATION CONTACT: John Sharpe, Director, Compliance
Division, at his e-mail address: [email protected] or telephone
him at (202) 720-8262.
SUPPLEMENTARY INFORMATION:
Background
The USGSA authorizes the Department to waive the mandatory
inspection and weighing requirements of the USGSA in circumstances when
the objectives of the USGSA would not be impaired. Current waivers from
the official inspection and Class X weighing requirements for export
grain appear in section 7 CFR 800.18 of the regulations. These waivers
are provided for grain exported for seeding purposes, grain shipped in
bond, grain exported by rail or truck to Canada or Mexico, grain not
sold by grade, exporters and individual elevator operators shipping
less than 15,000 metric tons during the current and preceding calendar
years, and when services are not available or in emergency situations.
This final rule provides a waiver for high quality specialty grains
exported in containers.
[[Page 73557]]
The high quality specialty grain market has evolved in recent years
as specialty grain shippers have catered to the specific needs of
buyers around the world. Transactions involving high quality specialty
grains are typically made between dedicated buyers and sellers who have
ongoing business relationships and fully understand each other's
specific needs and capabilities. Prototypically, sales are for small
volumes of grain meeting strict commercial contract specifications for
quality, production, handling, and packaging. The contractual
specifications may require a single or limited number of seed varieties
and may specify certain agronomic, harvesting, conditioning, or
handling practices.
The quality management processes employed by participants of the
high quality specialty grain market typically exceed those practiced in
the commodity grain market where commingling and blending of different
quality grains is an inherent part of the marketing process. As a
result, the characteristics of these high quality specialty grains are
differentiated from commodity grain.
Traditionally, shippers of high quality specialty grain exported in
containers handled less than 15,000 metric tons of grain annually and
thereby, were exempt from mandatory inspection and weighing
requirements in accordance with Section 800.18(b) of the regulations
under the USGSA. However, as the high quality specialty grain market
has grown, volumes have begun to exceed the 15,000 metric ton waiver
threshold requiring shippers to have their high quality specialty
grains inspected and weighed in accordance with the USGSA. The cost of
official inspection and weighing for these specialty operations is
approximately $1.80 per metric ton compared to an average $0.34 per
metric ton for bulk commodity exports. Furthermore, the contract
quality specifications for high quality specialty grains typically
exceed the grade limits for U.S. No. 1 grain. GIPSA is therefore
waiving high quality specialty grains, as defined by GIPSA, exported in
containers from the mandatory export inspection and weighing
requirements.
Accordingly, this action will promote the marketing of high quality
specialty grains and will not impair the objectives of the USGSA.
Organizations exporting high quality specialty grain will continue to
be required to notify GIPSA of their actions for registration purposes
in accordance with the USGSA. Moreover, nothing in this exemption will
prevent buyers and sellers from requesting and receiving official
inspection and weighing services should they desire such services.
On April 28, 2005, GIPSA published an interim final rule with
request for comments in the Federal Register (70 FR 21921) to amend the
regulations under the USGSA to waive the mandatory inspection and
weighing requirements for high quality specialty grains exported in
containers. GIPSA established this waiver to facilitate the marketing
of high quality specialty grains exported in containers and this action
is consistent with the objectives of the USGSA. GIPSA believes that
this waiver will promote the continuing development of the high quality
specialty export market.
In the interim final rule, GIPSA defined high quality specialty
grain as grain sold under contract terms that (1) specify quality
better than the grade limits for U.S. No. 1 grain, or (2) specify
``organic'' as defined by the regulations 7 CFR part 205 under the
Organic Foods Production Act of 1990, as amended.
To ensure that exporters of high quality specialty grains comply
with this waiver, GIPSA is requiring exporters to maintain records
generated during their normal course of business that pertain to these
shipments and make these documents available to GIPSA upon request for
review or copying purposes. GIPSA is not requiring exporters of high
quality specialty grains to complete or submit new Federal government
record(s), form(s), or report(s). GIPSA is requiring exporters to
maintain, submit upon request, and make available documentation that
fully and correctly disclose transactions concerning high quality
specialty grain exported in containers. These records shall be
maintained for a period of 3 years. This information collection
requirement is essential to ensure that exporters who ship high quality
specialty grain in containers comply with the waiver provisions.
The Paperwork Reduction Act requires the Agency to measure
recordkeeping burden. Under this final rule, exporters must maintain
records generated during the normal course of business. Experience has
shown that the U.S. grain industry maintains grain contracts which
specify quality parameters agreed to by buyers and sellers of grain.
GIPSA believes that grain contracts would provide sufficient
information to determine if exporters of high quality specialty grain
are complying with the waiver.
This waiver will be in affect for a maximum of 5 years and if after
this time period GIPSA determines that this waiver continues to advance
the objectives of the USGSA, GIPSA will consider making this waiver
permanent. GIPSA will monitor this waiver of official inspection and
weighing requirements; however, if at any time, GIPSA determines that
this waiver is not consistent with the objectives of the Act, GIPSA
will remove this waiver.
Comment Review
GIPSA received comments from two separate commenters in response to
its interim final rule published on April 28, 2005, in the Federal
Register (70 FR 21921). An individual representing a high quality
specialty grain company submitted two e-mail comments, and another
comment was submitted on behalf of a grain trade association. The
following paragraphs address comments received regarding the interim
final rule.
1. Definition of High Quality Specialty Grains
The comments received questioned the meaning of the definition of
high quality specialty grain as provided in the interim final rule. The
grain trade association stated that the definition of high quality
specialty grain is too narrow in that it provides only for organic
grains and for grains with quality specifications higher than U.S. No.
1. Specifically, the commenter suggested that the definition of high
quality specialty grains be ``revised to include grains with specific
intrinsic characteristics that give value to customers beyond the
official U.S. grain grading factors in U.S. No. 2 or 1 corn.''
GIPSA does not believe that it should expand the definition of high
quality specialty grains to include specific intrinsic characteristics.
GIPSA believes that the inclusion of such characteristics in the
definition would allow a broader exemption from the mandatory
inspection and weighing requirements than is consistent with the USGSA.
Accordingly, GIPSA is not making any changes to the definition based on
this comment.
The comment received from the high quality specialty grain company
suggested that GIPSA clarify its definition of high quality specialty
grain to define whether some factors or all factors must exceed the
grade limits for U.S. No. 1 grain. The commenter also expressed
concerns about the difficulty in procuring specialty soybeans with test
weight that exceeds U.S. No. 1 because of environmental or varietal
influences. After reviewing these issues, GIPSA believes that the
definition should be clarified.
Virtually all high quality specialty grain is traded on contract
specifications
[[Page 73558]]
that require all factors exceed the grade limits for U.S. No. 1 grain
with the exception of test weight. GIPSA recognizes that test weight is
a factor that is used throughout the market in making stowage
calculations, as a measurement of stocks (volume) and production
(yield), and as a general indicator of grain quality. However, other
attributes in high quality specialty grain such as oil and protein
content, etc. may provide a better indicator for end-use quality.
Consequently, the definition merits clarification and is amended to
read as follows: ``Grain sold under contract terms that specify all
factors exceed the grade limits for U.S. No. 1 grain, except for the
factor test weight * * *''
The commenter also asked why the example of post-harvest,
pesticide-free corn would qualify for an exemption since 90 percent of
corn harvested has no post-harvest chemicals applied. This comment has
merit and, as a result, GIPSA will not use it in the future as an
example of high quality specialty grain.
2. Phyto-Sanitary Certification
The comment from the grain trade association questioned why GIPSA's
interim final rule did not address the requirement for phyto-sanitary
certification for specialty grain exported in containers. The commenter
recommended that GIPSA's interim final rule should permit approved
private labs to perform phyto-sanitary certification to reduce cost. In
brief, the USGSA does not provide GIPSA authority to regulate phyto-
sanitary inspections and/or certification; consequently, GIPSA can not
address this issue.
GIPSA will develop instructions to provide further guidance on
requirements for high quality specialty grain exported in containers.
GIPSA will also monitor exporters of high quality specialty grain in
containers to ensure compliance with these waiver provisions.
GIPSA did not receive any comments regarding the information
collection and recordkeeping requirements published in its interim
final rule.
Executive Orders 12866 and 12988
This rule has been determined to be non-significant for the purpose
of Executive Order 12866 by the Office of Management and Budget (OMB).
This rule has been reviewed under Executive Order 12988, Civil Justice
Reform. This action is not intended to have a retroactive effect. The
USGSA provides in Sec 87g that no subdivision may require or impose any
requirements or restrictions concerning the inspection, weighing, or
description of grain under the Act. Otherwise, this rule will not
preempt any State or local laws, regulations, or policies unless they
present irreconcilable conflict with this rule. There are no
administrative procedures that must be exhausted prior to any judicial
challenge to the provisions of this rule.
Paperwork Reduction Act and Government Paperwork Elimination Act
In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35), the information collection and record keeping requirements
included in this final rule has been approved by OMB under Control No.
0580-0022. GIPSA estimates that the time required for each exporter to
maintain, submit upon request, and make available contractual
information in a manner consistent with this rule is an average of 6-
hours per year at $5.50 per hour for a total annual burden of $33.00
per exporter. Assuming that the estimated 80 exporters of high quality
specialty grain in containers provide GIPSA this contractual
information, the total annual burden is estimated to be $2,640.
GIPSA is committed to compliance with the Government Paperwork
Elimination Act, which requires Government agencies, in general, to
provide the public the option of submitting information or transacting
business electronically to the maximum extent possible.
Regulatory Flexibility Act Certification
GIPSA has determined that this final rule does not have a
significant economic impact on a substantial number of small entities,
as defined in the Regulatory Flexibility Act (5 U.S.C. 601 et seq.).
GIPSA has considered the economic impact of this final rule on small
entities and has determined that its provisions would not have a
significant economic impact on a substantial number of small entities
because it eliminates burden. This final rule would effectively
eliminate the cost impact on small businesses that would otherwise have
to pay for onsite inspection and weighing services for specialty grain
exported in containers.
The proliferation of high quality specialty grain exported in
containers has caused shippers of high quality specialty grains to
exceed the 15,000 metric ton waiver threshold for export inspection and
weighing. GIPSA posed this situation to its Advisory Committee on
November 16, 2004. GIPSA's Advisory Committee is composed of members
representing producers, handlers, processors, and exporters. The
Advisory Committee resolved that GIPSA should continue to enforce the
mandatory export inspection and weighing requirements for commodity
grains and establish a waiver for high quality specialty grains
exported in containers. GIPSA believes that waiving high quality
specialty grains exported in containers is consistent with the intent
of the USGSA and will allow this market to continue to evolve.
Various methods were considered to address the challenges facing
U.S. high quality specialty grain producers, marketers, processors, and
handlers exporting via containers from global competition. GIPSA looked
at requiring relaxed inspection and weighing requirements for these
grains and decided that they would still place an undue burden on these
types of shipments.
This final rule will allow exporters of high quality specialty
grains shipped in containers to ship such grain without the burden of
mandatory inspection and weighing, while allowing them to request the
service when desired. Relieving this burden will allow the industry to
grow and better compete in the global market.
This rule poses minimal additional cost to exporters. However, this
rule eliminates the cost of the mandatory export inspection and
weighing requirements for high quality specialty grain exported in
containers. GIPSA estimates this cost to be at $1.80 per metric ton of
grain exported and GIPSA believes that the benefits of this rule
outweighs the cost.
List of Subjects in 7 CFR Part 800
Administrative practice and procedure, Export, Grain
0
For reasons set out in the preamble, 7 CFR part 800 is amended as
follows:
PART 800--GENERAL PROVISIONS
0
1. The authority citation for part 800 continues to read as follows:
Authority: Pub. L. 94-582, 90 Stat. 2867, as amended (7 U.S.C.
71 et seq).
0
2. Section 800.0 is amended as follows:
0
a. Paragraphs (b)(44) through (106) are redesignated as (b)(45) through
(107), respectively.
0
b. New paragraph (b)(44) is added to read as follows:
Sec. 800.0 Meaning of Terms.
* * * * *
(b) * * *
(44) High Quality Specialty Grain. Grain sold under contract terms
that specify all factors exceed the grade limits for U.S. No. 1 grain,
except for the
[[Page 73559]]
factor test weight, or specify ``organic'' as defined by 7 CFR part
205. This definition expires July 31, 2010.
* * * * *
0
3. Section 800.18 is amended by revising paragraph (b)(8) to read as
follows:
Sec. 800.18 Waivers of the official inspection and Class X weighing
requirements.
* * * * *
(b) * * *
(8) High Quality Specialty Grain Shipped in Containers. Official
inspection and weighing requirements do not apply to high quality
specialty grain exported in containers. Records generated during the
normal course of business that pertain to these shipments shall be made
available to the Service upon request, for review or copying. These
records shall be maintained for a period of 3 years. This waiver
expires July 31, 2010.
* * * * *
James E. Link,
Administrator, Grain Inspection, Packers and Stockyards Administration.
[FR Doc. 05-23911 Filed 12-12-05; 8:45 am]
BILLING CODE 3410-EN-P