FR 2024-28214

The document under review is a proposed rule from the Agricultural Marketing Service (AMS) regarding the regulation of spearmint oil production in parts of the western United States. It primarily addresses changes for the 2024-2025 marketing year, aiming to adjust the quantity and distribution of Native spearmint oil, a specific type of spearmint oil prevalent in and around the state of Washington.

General Summary

AMS proposes to increase the allowable amount of Native spearmint oil that producers can sell or distribute. This adjustment means increasing the total quantity from 678,980 pounds to 731,220 pounds and raising the percentage of overall allotment from 26% to 28%. These changes are suggested to align supply with market demand and ensure market stability. The deadline for public comments on this proposal is December 19, 2024.

Significant Issues and Concerns

One pressing concern is the short public comment period of just 15 days. This brief window may not allow ample time for all stakeholders to voice their opinions or concerns, potentially limiting public participation. This is particularly noteworthy because stakeholders in rural or agricultural sectors might already have limited access to information and communication channels.

The economic impact analysis included in the rule relies heavily on averages, which can mask the diverse experiences of individual small businesses. Such a broad-brush approach might neglect the specific challenges faced by smaller entities within the spearmint oil industry. Furthermore, while the committee indicates that it has considered input from producers and handlers, the document lacks clarity on whether these reflections truly capture the perspectives of small business producers or skew toward larger operations.

The rationale behind the proposed changes remains somewhat vague. The specifics of why the proposed increase in salable quantity and allotment percentage was chosen over other possible adjustments are not thoroughly explained. Moreover, the document uses technical language and industry-specific jargon that may not be easily deciphered by individuals without specialized regulatory knowledge.

Broad Impact on the Public

The proposal could impact the broader public by potentially stabilizing prices for products that use Native spearmint oil. Consumers could benefit if these changes result in more consistent supply and pricing, especially those who rely on products containing this oil for health or personal care uses. However, given the complexity of the document’s language, it may be challenging for the general public to understand how this regulation will affect them directly.

Specific Stakeholder Impact

Specific stakeholders, particularly small farmers and oil handlers, may experience variable impacts. For smaller producers, the increased allotment might offer an opportunity for enhanced sales and revenue. Contrarily, the technical jargon and references without clear explanations might leave them unaware of how to fully comply or capitalize on the proposed changes.

On the other hand, larger handlers might find it easier to adapt to these changes and benefit more due to their resources to swiftly interpret and action regulatory proposals. The lack of detailed evidence supporting the proposed changes may raise questions about potential favoritism or inequitable benefits to larger entities at the expense of smaller operators.

Conclusion

Overall, while the proposed changes by the AMS aim to improve market conditions for Native spearmint oil, the approach taken in communicating this proposal may not fully serve the interest of all stakeholders. The document could benefit from clearer language, sufficient justification for the proposed changes, and a longer period for public comment to ensure comprehensive stakeholder engagement.

The document from the Agricultural Marketing Service proposes revisions to the salable quantity and allotment percentage for Native spearmint oil produced in the Far West region of the United States for the 2024-2025 marketing year. This commentary will address the financial aspects and their relevance to the issues identified in the proposed rule.

Financial References and Implications

The document provides specific financial references important for understanding the proposal's impact:

1. Small Business Thresholds:
2. Small agricultural service firms are defined by the Small Business Administration (SBA) as having annual receipts of equal to or less than $34.0 million.
3. Small agricultural producers of spearmint oil are defined as having annual receipts of equal to or less than $2.5 million.

These definitions help categorize the industry stakeholders potentially affected by the regulation's change, ensuring that the economic impact assessment considers small entities adequately.

1. Spearmint Oil Pricing:
2. The National Agricultural Statistics Service (NASS) reported the 2023 U.S. season average spearmint oil producer price per pound was $18.40.
3. Handler Free on Board (f.o.b.) price per pound is estimated at $22.08, indicating a markup from producer pricing.

These price points are crucial for calculating the overall economic impact of the proposed increases on handlers and producers.

1. Economic Value Estimations:
2. Multiplying the price per pound by the 2023-2024 marketing year utilization of both Scotch and Native spearmint oil results in an estimated handler-level spearmint oil value of $33.9 million.
3. Estimations suggest that each small handler's average annual receipts are about $5.7 million, substantially lower than the SBA's threshold for small agricultural service firms.

Relation to Identified Issues

The financial references play a significant role in addressing several of the identified issues:

• Short Comment Period: The document's brief 15-day comment period could be problematic given the complexities associated with such financial evaluations. Stakeholders might require more time to analyze the economic implications, especially when potential changes could significantly affect small business profitability.

• Economic Analysis Based on Averages: The financial evaluations, particularly the price per pound and overall market value, are based on averages. While these averages give a snapshot, they may not fully encapsulate the variability and specific challenges individual smaller entities might face, addressing the concern about the reliance on averages without individual impact assessments.

• Justification and Representation: The document mentions that all industry participants had the opportunity to contribute to the proposal. However, it does not clarify whether financial interests from both large and small entities were equally represented. This lack of detailed stakeholder representation could lead to perceptions of favoritism or inequitable benefit distribution, particularly if smaller entities feel overshadowed by larger counterparts in decision-making processes.

Overall, understanding the financial references and calculations in the document is key for stakeholders in determining how the proposed rules might affect their economic positioning within the market. Stakeholders must rigorously analyze these figures to provide informed feedback and ensure equitable consideration of both large and small entities in the spearmint oil industry.