[Federal Register: February 13, 2006 (Volume 71, Number 29)]
[Proposed Rules]
[Page 7445-7446]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13fe06-12]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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[[Page 7445]]
DEPARTMENT OF AGRICULTURE
Farm Service Agency
7 CFR Part 735
Commodity Credit Corporation
7 CFR Part 1427
RIN 0560-AH48
Regulations for the United States Warehouse Act; Cotton Loans
AGENCY: Commodity Credit Corporation and Farm Service Agency, USDA.
ACTION: Advance notice of proposed rulemaking.
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SUMMARY: The Farm Service Agency (FSA) and the Commodity Credit
Corporation (CCC) are soliciting comments and views on whether to
revise the regulations at 7 CFR parts 735 and 1427 for the purpose of
addressing the storage of upland cotton and its impact on loan
eligibility.
DATES: Comments should be received on or before April 14, 2006 to be
assured consideration.
ADDRESSES: CCC invites interested persons to submit comments on this
proposed rule and on the collection of information. Comments may be
submitted by any of the following methods:
E-Mail: Send comments to Gene.Rosera@USDA.gov.
Fax: Submit comments by facsimile transmission to: (202)
720-8481.
Mail: Send comments to: Director, Price Support Division,
Farm Service Agency, United States Department of Agriculture (USDA),
Rm. 4095-S, 1400 Independence Avenue, SW., Washington, DC 20250-0512.
Hand Delivery or Courier: Deliver comments to the above
address.
Federal Rulemaking Portal: Go to http://www.regulations.gov.
Follow the online instructions for submitting
comments.
All written comments will be available for public inspection at the
above address during business hours from 8 a.m. to 5 p.m., Monday
through Friday.
FOR FURTHER INFORMATION CONTACT: Gene Rosera; phone: (202) 720-7901; e-
mail: Gene.Rosera@usda.gov; or fax: (202) 690-3307.
SUPPLEMENTARY INFORMATION:
Background
Traditionally, CCC has required that baled loan cotton must be
inside approved warehouses as a condition of eligibility for a
marketing assistance loan. When the 2004 and 2005 crops of upland
cotton exceeded warehouse capacity in some southern-plains areas, CCC
established requirements under which warehouses could request approval
of short-term outside storage. For both years, approvals were granted
under the provisions of 7 CFR 1427.1087.
Because some localized shortages of inside storage appear likely
for coming crops, CCC is reviewing whether its storage requirements for
loan cotton should be revised. CCC is considering whether it should
strictly enforce the traditional inside-storage requirement or
establish new provisions for exempting warehouses from one or more
storage requirements. Under traditional storage requirements, cotton
for which inside storage is not available might not be eligible as
collateral within the loan availability period, thus losing any
possible storage credit and loan gain as provided under recent short-
term storage exemptions.
Issues for Public Comment
CCC does not have any statutory authority to regulate the storage
of non-loan cotton. With respect to amending and revising current
regulations regarding the storage of loan cotton, CCC is soliciting
comments regarding the need and suitability of the following regulatory
issues, and views regarding how any suggested changes might be
implemented.
1. What should CCC storage requirements be with respect to upland
loan cotton?
2. Should CCC strictly require that all upland loan cotton be
stored inside approved cotton warehouses without granting exemptions
for any period under any circumstances, and if so, why?
3. Under the Extra Long Staple (ELS) farm-stored loan program
provided for by 7 CFR 1427.10(e) loan bales are identified to CCC by
bale number, and any bale represented by an electronic warehouse
receipt (EWR) is ineligible. Loans are provided based on the national
average loan rate and any settlements are based on classification
information established after the cotton is delivered into an approved
warehouse. Such loans are provided in limited counties, and only at
facilities with specialized equipment to package, store and handle the
bales. Should CCC establish farm-stored loans for upland cotton, as
currently available for ELS cotton, and if so, what would be
appropriate loan eligibility requirements, storage and handling
requirements, loan rates, settlement policies, and locational
considerations for such a loan program? Conversely, should the ELS
farm-stored loan provisions be eliminated to provide parity between
programs?
4. Should upland loan cotton stored outside be provided the same
dollar of storage credit as provided to inside-stored loan cotton, a
portion of the credit, or no storage credit at all, and why?
5. Should CCC formalize a process for allowing approved cotton
warehouses to request CCC approval for short-term use of outside yard
storage for upland loan cotton? If so, what, if any, circumstances must
be established by the applicant for CCC to favorably consider such
requests, and why? Additionally, should CCC establish cutoff-dates for
any approved outdoor storage periods, and if so, what dates are
recommended for different production areas?
6. If CCC allows outside storage of loan cotton during periods when
inside-storage is unavailable, should CCC provide public notice in
advance of approving any request for use of short-term outside storage
for upland cotton so that interested parties may identify reasonable
and economical alternative storage locations before any exemption is
granted?
7. Should USDA require that all cotton EWR's accommodate a trailer
record indicating whether the bale has ever been stored outside, and if
so, what information should be specifically required to be included on
trailer record? If EWR trailer records were to contain information
about any outside-
[[Page 7446]]
storage, who should have access to such information, and how should
access be provided? Note that changes to the EWR and/or disclosure of
such information may require amendments to 7 CFR part 735 or the
Electronic Provider Agreements for cotton, or both.
8. As a condition of loan eligibility, should loan applicants be
required to agree that CCC may disclose such storage information to
potential cotton buyers?
9. If CCC provides a loan for upland cotton identified on the EWR
as stored outside, should the loan rate be provided at the national
average loan rate? Additionally, should the loan settlement for any
upland loan cotton, that is stored outside and subsequently forfeited
to CCC, be based on classification information provided by the producer
after the cotton has been delivered to CCC inside an approved cotton
storage warehouse? If so, should the additional costs of providing this
classification information be paid by the producer or by CCC, and why?
10. Non-loan upland cotton stored outside at warehouses is not
subject to CCC storage requirements. Are there any storage and handling
practices commonly used by warehouses for outside storage that protect
the cotton and all interested parties and that could be adopted for
outside stored upland loan cotton, such as double bagging? If so, are
there geographic, marketing, or other constraints to such practices?
11. Are there circumstances under which CCC should increase or
decrease the weekly minimum shipping standard of 4.5 percent? If so,
explain how CCC might administer any different standard. Is there a
need for CCC to strengthen enforcement of the current standard, and if
so, by what methods? Should CCC rules be changed to reflect 4.5 percent
of total stocks rather than approved capacity?
12. In the past, CCC has at times re-concentrated loan cotton only
for the purpose of protecting the interest of the producer or CCC.
Merchants having options to purchase loan cotton may benefit from re-
concentrating loan cotton for marketing efficiencies. Should CCC allow
producers, or agents of producers, to request re-concentration of loan
cotton for any reason? If so, would the producer/producer's agent be
willing to pay for the charges associated with such re-concentration?
Should they be required to pay such charges in all instances? Define
circumstances, if any, when CCC should pay re-concentration charges.
Signed at Washington, DC February 6, 2006.
Thomas B. Hofeller,
Acting Administrator, Farm Service Agency, and Acting Executive Vice
President, Commodity Credit Corporation.
[FR Doc. 06-1284 Filed 2-10-06; 8:45 am]
BILLING CODE 3410-05-P