[Federal Register: March 13, 2009 (Volume 74, Number 48)]
[Proposed Rules]
[Page 10842-10843]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13mr09-8]
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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 10842]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Parts 1005 and 1007
[Doc. Nos. AMS-DA-07-0133; AO-388-A15; AO-366-A44; DA-03-11-B]
Milk in the Appalachian and Southeast Marketing Areas; Order To
Terminate Proceeding on Proposed Amendments to Marketing Agreements and
Orders
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Termination of proceeding.
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SUMMARY: This action terminates a rulemaking proceeding on two proposed
amendments that sought to amend the producer-handler provisions of the
Appalachian and Southeast milk marketing orders. Other proposed
amendments considered as part of the rulemaking proceeding were
addressed in previously issued decisions.
FOR FURTHER INFORMATION CONTACT: Gino M. Tosi, Order Formulation and
Enforcement, USDA/AMS/Dairy Programs, STOP 0231-Room 2971, 1400
Independence Avenue, SW., Washington, DC 20250-0231, (202) 690-1366, e-
mail address: gino.tosi@ams.usda.gov, mail to: gino.tosi@usda.gov.
SUPPLEMENTARY INFORMATION: This administrative action is governed by
the provisions of Sections 556 and 557 of Title 5 of the United States
Code and, therefore, is excluded from the requirements of Executive
Order 12866.
This action terminates the rulemaking proceeding concerning
proposed amendments to the producer-handler provisions of the
Appalachian and Southeast orders. The proposals were considered at a
public hearing held February 23-26, 2004. Other proposed amendments
considered at the public hearing were addressed in a partial
recommended decision issued May 13, 2005, and published May 20, 2005
(70 FR 29410), and a partial final decision issued September 15, 2005,
and published September 21, 2005 (70 FR 55458). A partial final rule
was published October 12, 2005 (70 FR 59221), making the amendments
adopted in these decisions effective November 1, 2005.
Regulatory Flexibility Act and Paperwork Reduction Act
In accordance with the Regulatory Flexibility Act (5 U.S.C. 601-
612), the Agricultural Marketing Service has considered the economic
impact of this action on small entities and has certified that this
rule will not have a significant economic impact on a substantial
number of small entities. For the purpose of the Regulatory Flexibility
Act, a dairy farm is considered a small business if it has an annual
gross revenue of less than $750,000, and a dairy products manufacturer
is a small business if it has fewer than 500 employees.
For the purposes of determining which dairy farms are small
businesses, the $750,000 per year criterion was used to establish a
production guideline of 500,000 pounds per month. Although this
guideline does not factor in additional monies that may be received by
dairy producers, it should be an inclusive standard for most small
dairy farmers. For purposes of determining a handler's size, if the
plant is part of a larger company operating multiple plants that
collectively exceed the 500-employee limit, the plant will be
considered a large business even if the local plant has fewer than 500
employees.
Producer-handlers are defined as dairy farmers that process only
their own milk production. These entities must be dairy farmers as a
pre-condition to operating processing plants as producer-handlers. The
size of the dairy farm determines the production level of the operation
and is the controlling factor in the capacity of the processing plant
and possible sales volume associated with the producer-handler entity.
Determining whether a producer-handler is considered a small or large
business must depend on its capacity as a dairy farm where a producer-
handler with annual gross revenue in excess of $750,000 is considered a
large business.
During February 2004, the month the hearing was held, the milk of
7,311 dairy farmers was pooled on the Appalachian (Order 5) and
Southeast (Order 7) milk orders (3,395 Order 5 dairy farmers and 3,916
Order 7 dairy farmers). Of the total, 3,252 dairy farmers (or 96
percent) and 3,764 dairy farmers (or 96 percent) were considered small
businesses on the Appalachian and Southeast orders, respectively.
During February 2004, there were a total of 36 plants associated
with the Appalachian order (25 fully regulated plants, 7 partially
regulated plants, 1 producer-handler, and 3 exempt plants) and a total
of 51 plants associated with the Southeast order (32 fully regulated
plants, 6 partially regulated plants, and 13 exempt plants). The number
of plants meeting the small business criteria under the Appalachian and
Southeast orders were 13 (or 36 percent) and 13 (or 25 percent),
respectively.
Two proposals that would amend the producer-handler provisions of
the Appalachian and Southeast orders were considered at the public
hearing. A proposal published in the hearing notice as Proposal 7
sought to apply the pooling and pricing provisions of the Southeast or
Appalachian orders to producer-handlers with more than 3 million pounds
of fluid route disposition during the month. A dairy farmer who is a
producer-handler with fluid route disposition above the proposed 3-
million pounds per month threshold would be considered a ``large''
business.
A second proposal published in the hearing notice as Proposal 8
sought to allow producer-handlers to purchase a limited amount of
supplemental milk without losing their status as producer-handlers. As
proposed, a producer-handler would be allowed to purchase up to 10
percent of the producer's monthly milk production during the months of
December through May, and 30 percent during the months of June through
November from other sources.
Because this action terminates the rulemaking proceeding without
amending the existing rules applicable to producer-handlers in the
Appalachian and Southeast orders, the economic conditions of small
entities remain unchanged. This action does not change reporting,
record keeping, or other compliance requirements.
Prior documents in this proceeding:
Notice of Hearing: Issued January 16, 2004; published January 23,
2004 (69 FR 3278).
Partial Recommended Decision: Issued May 13, 2005; published May
20, 2005 (70 FR 29410).
[[Page 10843]]
Partial Final Decision: Issued September 15, 2005; published
September 21, 2005 (70 FR 55458).
Partial Final Rule: Issued October 7, 2005; published October 12,
2005 (70 FR 59221).
Preliminary Statement
A public hearing was held upon proposed amendments to the marketing
agreements and orders regulating the handling of milk in the
Appalachian and Southeast marketing areas. The hearing was held,
pursuant to the provisions of the Agricultural Marketing Agreement Act
of 1937, as amended (7 U.S.C. 601-674), and the applicable rules of
practice and procedure governing the formulation of marketing
agreements and marketing orders (7 CFR part 900), at Atlanta, Georgia,
on February 23-26, 2004, pursuant to a notice of hearing issued January
16, 2004, and published in the Federal Register on January 20, 2004 (69
FR 3278).
Producer-Handler Provisions
This action terminates the rulemaking proceeding concerning
proposed amendments to the producer-handler provisions of the
Appalachian and Southeast orders. A proposal published in the hearing
notice as Proposal 7 sought to apply the Appalachian and Southeast
orders' pooling and pricing provisions to producer-handlers with fluid
route disposition in excess of 3 million pounds per month. A second
proposal, published in the hearing notice as Proposal 8, sought to
allow producer-handlers to purchase up to 10 percent of the producer's
monthly milk production during December through May and 30 percent
during June through November from other sources.
The Appalachian and the Southeast milk orders provide identical
definitions that describe and define a category of handlers known as
producer-handlers. Both orders require producer-handlers to operate
their businesses at their own enterprise and risk, meaning that the
care and management of the dairy animals and other resources necessary
for the production, processing, and distribution of fluid milk products
are the sole responsibility of the handler.
The Appalachian and Southeast orders prohibit producer-handlers
from purchasing any amount of supplemental milk from pool sources or
from any other source. Producer-handlers bear the entire burden of
balancing their own milk production. Any fluctuation in a producer-
handler's daily and seasonal milk needs must be met through their own
farm production and any excess milk supplies must be disposed of at
their own expense.
Producer-handlers are exempt from the pooling and pricing
provisions of the Appalachian and Southeast orders. Exemption from the
pooling and pricing provisions of the orders means that the minimum
class prices established under the orders that handlers must pay for
milk are not applicable to producer-handlers, and producer-handlers
receive no minimum price protection for their milk production not
disposed of for fluid uses.
While producer-handlers are exempt from the pooling and pricing
provisions of the Appalachian and Southeast orders, they are required
to submit reports to the Market Administrator who monitors producer-
handler operations to ensure that they are in compliance with the
conditions for such exemption status.
The Secretary is in the process of receiving proposals to initiate
a new rulemaking proceeding to consider the elimination of the
producer-handler provision in all Federal milk marketing orders. Two
such proposals have been received and the Secretary has invited the
submission of additional proposals. Such proposals must be received by
Dairy Programs by March 16, 2009. (See Dairy Programs Web site at
http://www.ams.usda.gov/dairy.)
Given this development and the substance of the two proposals
considered herein, the review of the producer-handler exemption under
all Federal milk marketing orders would be a more comprehensive review.
Therefore, the Secretary has determined that this rulemaking proceeding
should be terminated.
Termination of Proceeding
In view of the foregoing, it is hereby determined that the
proceeding with respect to proposed amendments to the Appalachian and
Southeast orders regarding the regulation of producer-handlers should
be and is hereby terminated.
List of Subjects in 7 CFR Parts 1005 and 1007
Milk marketing orders.
The authority citation for 7 CFR Parts 1005 and 1007 continues to
read as follows:
Authority: 7 U.S.C. 601-674, and 7253.
Dated: March 9, 2009.
Robert C. Keeney,
Acting Associate Administrator.
[FR Doc. E9-5414 Filed 3-12-09; 8:45 am]
BILLING CODE 3410-02-P