65FR36549 Agricultural Disaster and Market Assistance, Part 2/4
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Posting-number: Volume 65, Issue 111, Page 36549, Part 1
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\1\ After administrative expenses of approximately $12.4 million.
\2\ Total of actual outlays up to May 4, 2000 and maximum expected
outlays through September 30, 2000.
\3\ Reallocated from funding previously attributed to the 1999 Crop
Disaster Program.
\4\ After administrative expenses of approximately $100,000.
\5\ Includes $3 million for LIP in FY 1999 and $12.5 million for AILFP
for FY's 1997 and subsequent years.
1999 Oilseed Market Loss Assistance Program
U.S. oilseed producers are experiencing serious financial hardship
as a result of low oilseed prices. The farm-level market value of
oilseed production has dropped substantially since the mid-1990's. In
fact, the farm value of the 1999 U.S. oilseed crop was down an
estimated $5 billion, or 27 percent from the previous 5-year high set
in 1996, despite a 12-percent increase in production. Some producers
have also had their financial problems exacerbated by isolated weather
problems that reduced their 1999 production.
Section 804 of Pub. L. 106-78 authorized the use of $475 million in
Commodity Credit Corporation funds to assist oilseed producers
suffering from reduced farm income as a result of large supplies and
low prices. To be eligible for payments from these funds, a producer
must have produced an oilseed in 1999 that is eligible to obtain a
marketing assistance loan under Sec. 131 of the Agricultural Market
Transition Act (7 U.S.C. 7231). These oilseeds include: soybeans,
safflower seed, canola, rapeseed, mustard seed, sunflower seed,
flaxseed, and crambe.
The payment rate determined by the Secretary must consider the
number of eligible payment acres and payment yields as well as the
fixed amount of Commodity Credit Corporation funds authorized by
Congress for the Oilseed Program. Section 822 of Pub. L. 106-78
provides that the Secretary may reserve up to $56 million of the
amounts made available under subtitle A to cover administrative costs
incurred by the Farm Service Agency directly related to carrying out
that subtitle. For the Oilseed Program the authorized amount of $475
million will be reduced by approximately $12.4 million to cover
administrative costs. After accounting for administrative costs, direct
payments to producers under the Oilseed Program are expected to total
approximately $462.6 million. Of this total about $442.7 million (96
percent) is expected to go to soybean producers. The remaining $19.9
million will be split among the producers of the other minor oilseeds
eligible for marketing assistance. Payments to producers of those
oilseed are estimated to be $13.2 million for sunflower seed producers,
$3.8 million for canola producers, $1.7 million for safflower
producers, $938,923 for flaxseed producers, $172,471 for mustard seed
producers, $112,990 for crambe producers, and $16,260 for rapeseed
producers. Because assistance will be in the form of direct payments,
the program is expected to result in a dollar-for-dollar increase in
farm income for oilseed producers.
Pre-enrollment estimates of per-unit payment rates are expected to
be highest for safflower seed and mustard seed at 34 and 31 cents per
hundredweight (cwt.), respectively. The lowest per unit rate is
expected to be for flaxseed at 22 cents per cwt. (12 cents per bushel).
The pre-enrollment estimate for the soybean payment rate is 24 cents
per cwt. (14 cents per bushel). On a per-acre basis, the safflower seed
payment will be highest among the various crops at $6.13 per acre. The
pre-enrollment payment for soybeans is estimated at $5.92 per acre. For
the remaining oilseeds, pre-enrollment estimates indicate that per-acre
payments will range from a low of $2.55 for flaxseed to a high of $3.69
for rapeseed.
Cottonseed Market Loss Assistance
The cottonseed support payment program is designed to provide
payments to cotton ginners in response to a severe decline in the price
of cottonseed in the 1999 crop year. Throughout the Cotton Belt, in
most years, the value of the cottonseed that is the by-product of the
ginning process has been accepted by cotton ginners as payment in full
for the cost of ginning seed cotton. Unless they are members of a co-
operative gin (many are) or they own or are partners in a gin, farmers
do not secure any benefit from the seed other than to have their
ginning costs canceled.
This season, the average price of cottonseed has dropped by about
$48 per ton (37 percent) from the average level received last year, and
about $36 per ton (31 percent) from the average of 1994 through 1998.
In the 1999 season, cottonseed prices in many parts of the Cotton Belt
do not cover the cost of ginning.
Cottonseed prices this season equate to about $34 worth of seed per
bale of cotton lint produced, on a national average. The national
average ginning cost for 1999 is estimated at $46 per bale. Thus, the
national average value of cottonseed falls about $12 short of the cost
of ginning a bale of cotton. That is the equivalent of about 2.5 cents
per pound of lint. For ginning services, some farmers are being asked
to pay in cash to the ginner an additional 2 or 3 cents per pound of
cotton lint beyond the value of the seed, while, in other cases,
ginners are holding ginning bills until they see how this payment
program will be implemented.
The most viable option to assist cotton producers is a direct
payment program in which payments are made to ginners. There are
between 1,000 and 1,100 gins in the United States. About 25 percent of
those are co-operatives. Another 50 percent are owned as corporations
by farmers who gin their own and their neighbors' cotton. About 25
percent are independent gins.
[[Page 36559]]
Thus, farmers have a direct interest in about 75 percent of the
gins and can be expected to receive nearly the full benefit of payments
made to the gins. In the other 25 percent of gins where farmers do not
directly operate or share in the ownership of the gins, farmers still
may be expected to receive a substantial portion of the program
benefits because the gins may have held the ginning bills pending the
implementation of this program, the gins may rebate to farmers any
ginning bill already paid, or competition among gins may dictate that
any payments beyond those needed to cover the shortfall in seed prices
will be rebated to the gins customers.
Funding for this program is provided from a portion of the residual
funds authorized for Pub. L. 106-78 and Pub. L. 105-277. Approximately
$74 million of those funds will be available for cottonseed payments
for crop year 1999. This will allow payments of approximately $4 per
bale of lint, or about 1 cent per lb.
Extra Long Staple Cotton Competitiveness Program
The program is designed so that payments trigger in response to a
reduction in other world prices, as specified in the legislation. In
the period since October 1, 1999, were triggered only during the period
April 4, 2000, through May 2, 2000.
It is not possible to predict whether there will be further
reductions in foreign prices, nor how large they will be, nor how long
they will last. There would be no theoretical maximum payment rate.
However, during the 6-week period April 4, 2000, through May 2, 2000,
in which payments were triggered, outlays were less than $1 million.
For the remainder of FY 2000 (mid-May through September), the program
could incur from $3 million to $5 million in outlays if there is no
drastic change in price relationships currently being observed and if
it operates every week until September 30.
It is projected that ELS competitiveness payments could increase
domestic use of American Pima cotton by about 5,000 bales (about 3
percent) per year and exports by 25,000 bales (about 6 percent) per
year. This increase in disappearance could add about 2 cents to the
average price of American Pima and reduce net lending costs to CCC by
about $25 million. Farm receipts would rise by about $4 million for the
1999 crop.
Funding for this program is provided from a portion of the residual
funds authorized for Pub. L. 106-78 and Pub. L. 105-277. Approximately
$10 million of those funds will be available for the ELS Cotton
Competitiveness Payment Program.
Pasture Recovery Program
Weather-related disasters in calendar year 1999 exacerbated the
financial crisis affecting the Nation's agricultural sector. Prolonged
drought, predominantly in the Mid-Atlantic and Northeastern United
States, left livestock producers with destroyed or severely damaged
pasture. The purpose of the Pasture Recovery Program (PRP) is to
provide payments to owners and operators of pasture who suffered
pasture losses due to drought in 1999 and who reestablish the forage
crop on their pastures.
Funds to reestablish pasture damaged by drought will be allocated
from funds provided for crop and livestock loss assistance under Pub.
L. 106-78 and Pub. L. 106-113 that otherwise would be committed to the
Crop Disaster Program, the Livestock Assistance Program, or the
Livestock Indemnity Program.
PRP payments will be authorized only in counties determined
eligible for the Livestock Assistance Program and approved for the
Emergency Conservation Program. As of mid-January, 2000, about 400
counties met both of these requirements and about 30,000 producers had
applied for the 1999 LAP. The funding level of $40 million will be met
if slightly more than half of the 30,000 eligible producers receive the
maximum payment of $2,500 per person. To be eligible, land must be
established pasture land on which livestock are normally grazed and
that was so damaged by drought that seeding is required to reestablish
a cover crop. Neither hay land nor rangeland is eligible.
Payment rates per acre will equal 50 percent of the eligible area's
average cost of reestablishing the approved forage crop and are not to
exceed $125 per acre. FSA's Deputy Administrator for Farm Programs must
approve payment rates above $75 per acre.
The cost to reestablish pastures is estimated to be between $100
and $250 per acre, depending on the tillage and fertilization rates
required. Most are expected to fall between $100 and $150 per acre,
which will allow producers a payment rate of $50-$75 per acre. At an
average payment rate of $62.50 per acre and subject to the $2,500
limitation producers could reestablish pasture on a maximum of 40
acres.
The Pasture Recovery Program will provide benefits to livestock
producers who graze animals on land that has been damaged by drought.
It will partially offset the cost of reestablishing a forage crop where
cover has been destroyed, which will provide some reduction in soil
erosion due to wind and water.
Funding for the program will provide payments for livestock
producers who have suffered losses due to drought. Payments will be
reduced for some producers in some programs in order to provide
payments under PRP. Some funding will be shifted from crop programs to
livestock producers and some will be shifted from other livestock
producers to those using pastures affected by drought.
Livestock Indemnity Program for Contract Growers
Contract livestock growers are eligible for assistance through the
Livestock Indemnity Program for Contract Growers (CG-LIP) if livestock
or poultry lost on the farm exceeds normal nationally-determined
mortality rates, and if the livestock or poultry lost were on a farm in
a region affected by a natural disaster between January 1, 1999, and
December 31, 1999.
The CG-LIP program will be administered in a manner similar to the
1999 LIP program for livestock owners. However, owing to the differing
financial interests between the owners of livestock and poultry and
contract growers of the lost livestock and poultry, payment rates will
need to be adjusted to reflect the losses suffered by the contract
growers. Generally, payment rates per animal lost for contract growers
are expected to be less than for the livestock and poultry owners,
reflecting the smaller per-animal investment (and loss) by contract
growers. Contract growers will be paid on those losses exceeding normal
mortality. Based on the numbers of livestock lost, claims are expected
to be approximately $2 million, well short of the $10 million
available. Consequently, it is unlikely that payments will be factored.
On a sectoral basis, the payments represent a small fraction of the
total value of livestock production.
However, for those contract growers who actually suffered the
losses, the impact on their equity and cash flow positions is
significant. Indemnity payments will assist contract growers affected
by the disaster in meeting their financial obligations for inputs used
in the production of the lost livestock and poultry, replace lost
income, and to service debt. It is assumed, in part as a result of the
CG-LIP, that contract producers affected by the disaster would remain
in business and rebuild their contract growing operations to their
previous size.
[[Page 36560]]
Finalization of Existing Regulations for the Livestock Indemnity
Program and American Indian Livestock Feed Program
The Livestock Indemnity Program (LIP) provides financial assistance
to livestock producers who suffered significant financial losses due to
natural disasters between May 2, 1998, and May 21, 1999. The impact of
the indemnity payments on livestock and milk market prices and
consumers is not expected to be measurable. Farm income was expected to
be $3 million higher, equaling the amount of indemnity payments.
Federal outlays would also increase by the indemnity payment of $3
million.
For those producers who actually suffered the losses, the impact on
their equity and cash flow positions is significant. Indemnity payments
assist producers affected by the disaster in meeting their financial
obligations for inputs used in the production of the lost livestock and
to replace breeding stock. It is assumed, in part as a result of LIP,
that producers affected by the disaster would remain in business and
rebuild their foundation herds to their previous size.
The American Indian Livestock Feed Program (AILFP) provides
assistance to eligible livestock producers who have suffered
significant loss of livestock feed production for 1997 and subsequent
years. Theses funds will help eligible producers to meet financial
obligations against feed stocks purchased to maintain livestock as a
result of lost feed production. It is expected that up to 45,000
livestock producers will receive assistance and be able to maintain
their herds. The impact of the program on livestock and feed prices is
not expected to be measurable. Aggregate American Indian farm income
losses will be somewhat reduced by AILFP payments. Federal outlays for
the 1997 and subsequent crop years might total around $12.5 million,
which will be funded from the Feed Grain Disaster Reserve.
Warehouse-Stored Tobacco Loss Assistance
During the late summer and early fall of 1999, three major
hurricanes dropped an unprecedented amount of rain in North Carolina. A
substantial amount of warehouse-stored tobacco was destroyed in the
flooding that resulted. Some producers, because they had placed their
tobacco in warehouses and it had not been sold, suffered flood losses
to that tobacco. However, because the tobacco had been harvested and
placed in a warehouse, those producers were not eligible for disaster
assistance under FSA's normal crop-loss programs and the producers
therefore incurred the entire financial burden of the loss. Pub. L.
106-113 appropriated an additional $2.8 million to the assistance
authorized by Sec. 803 of Pub. L. 106-78, which authorized the
Secretary to use $328 million of CCC funds to make payments to States
for the reduction of quota or acreage allotted farms from the 1998 crop
year to the 1999 crop year, provided that producers who suffered
quality or quantity losses due to natural disasters on crops harvested
and placed in a warehouse and not sold shall also be eligible.
The $2.8 million will assist quota holders and growers to roughly
defray production costs for crops lost in crop year 1999 due to the
flooding in auction warehouses. The Tobacco Disaster Assistance Program
(TDAP) will pay producers approximately $1 for each pound of unsold
1999-crop tobacco lost to warehouses flooded by the hurricanes. Due to
program provisions, producers may carry these unmarketed pounds over to
crop year 2000.
Most tobacco operations are small family-owned affairs. The tobacco
program run by the U.S. Department of Agriculture, along with
topological limitations, limit the size of the typical farm and
substitutability of competing crops. Accordingly, there currently may
be few alternatives for tobacco. With no crop alternatives and little
diversification in tobacco-growing regions, cash from the tobacco crop
is vital to these producers. To the extent that the $2.8 million
payment to producers and quota-holders defrays tobacco production
costs, the TDAP enhances solvency. The production short-fall caused by
the flooding is expected to be made up in the following year. In the
short-term, the cost to the government roughly equals the benefits to
the producers. In the longer term, to the extent that these disaster
payments protect producers from bankruptcy, there is a net benefit.
Flood Assistance for Harney County, Oregon
Pub. L. 106-113 provides that the Secretary may use no more than
$1.09 million for disaster assistance to Harney County. High
precipitation during the winter of 1998 and 1999 led to flooding in the
areas around Harney Lake and Malheur Lake in Harney County, Oregon.
Heavy flooding began in February 1999 and continued until June when
snow pack runoff slowed.
Such flooding can change the basic character of the land and render
the land ineligible for other benefits or for enrollment in programs
like the Conservation Reserve Program (CRP). Generalized conditions of
that sort can produce tertiary effects in the local community and
accordingly, problems such as those in Harney County have been the
source of considerable attention and concern with respect to the
exercise of discretionary authorities that may be available to the
Secretary of Agriculture.
The impact on ranches in Harney County has been a loss of
approximately 43,000 acres of pasture, 11,000 acres of native grass
hay, 200 acres of alfalfa hay, and 200 acres of barley that were
prevented from being planted. Approximately forty producers in Harney
County are expected to be eligible for the program. Assistance
therefore will average about $25,000 each if total claims meet or
exceed $1.09 million. The expected average is well below the per-person
payment limit of $40,000. Assistance will be in addition to assistance
provided under other FSA programs.
For further information, the following individuals may be contacted
regarding the different parts of the Cost/Benefit Assessment:
Livestock and Pasture Recovery--Dan Colacicco, 202-720-6733
Cotton--Wayne Bjorlie, 202-720-7954
Cottonseed--Gene Rosera, 202-720-8481
Harney County, Oregon--Brad Karmen, 202-720-4635
Oilseeds--Phil Sronce, 202-720-2711
Tobacco--Dan Stevens, 202-720-5291
List of Subjects
Part 1400
Agriculture, Grant programs--agriculture, Loan programs--
agriculture, Price support programs, Reporting and recordkeeping
requirements.
Part 1411
Oilseeds, Production Flexibility Contracts.
Part 1427
Cotton, Cottonseed, Loan programs/agriculture, Price support
programs, Reporting and recordkeeping requirements, Warehouses.
Part 1439
Animal feeds, Disaster assistance, Livestock, Reporting and
recordkeeping requirements.
Part 1464
Imports, Loan programs--agriculture, Price support programs,
Reporting and recordkeeping requirements, Tobacco.
[[Page 36561]]
Part 1479
Crop insurance, Disaster assistance, Floods, Reporting and
recordkeeping requirements.
For the reasons set out in the preamble, 7 CFR Chapter XIV is
amended as set forth below.
PART 1400--PAYMENT LIMITATION AND PAYMENT ELIGIBILITY
1. The authority citation continues to read as follows:
Authority: 7 U.S.C. 1308, 1308-1, and 1308-2; 16 U.S.C. 3834.
Sec. 1400.1 [Amended]
2. Amend the table in Sec. 1400.1(g) by adding a line to read, in
the first column, ``Environmental Quality Incentives Program (EQIP)'',
and, in the second column, ``10,000''.
3. Amend Sec. 1400.2 by redesignating paragraphs (e) and (f) as (f)
and (g), respectively, and adding new paragraphs (e) and (h) to read as
follows:
Sec. 1400.2 Administration
* * * * *
(e) Benefits from programs subject to this part may not be issued
until all required forms and necessary payment eligibility and payment
limitation determinations are made.
* * * * *
(h) Reviews of farming operations and corresponding documentation
submitted by program participants may be conducted to determine
compliance with applicable statutes and regulations.
4. Add part 1411 to subchapter B of 7 CFR XIV to read as follows:
PART 1411--OILSEEDS PROGRAM
Subpart A--General Provisions
Sec.
1411.101 Applicability.
1411.102 Administration.
1411.103 Definitions.
1411.104 Misinformation and misaction.
1411.105 Appeals.
Subpart B--Eligibility Determinations
1411.201 Eligible producers.
1411.202 Violations, misrepresentation, or scheme or device.
1411.203 Payment amount.
1411.204 Payment acreage.
1411.205 Payment yield.
Subpart C--Application for Payment
1411.301 Signup period.
1411.302 Submitting application.
1411.303 Late-filed acreage reports.
Subpart D--Miscellaneous
1411.401 Limitation of payments.
1411.402 Offsets and Assignments; Powers of Attorney.
Authority: Sec. 804, Pub. L. 106-78, 113 Stat. 1178.
Subpart A--General Provisions
Sec. 1411.101 Applicability.
This part implements the oilseed provisions enacted in section 804
of the Agriculture, Rural Development, Food and Drug Administration,
and Related Appropriations Act, 2000 (Public Law 106-78). That section
provided funds to allow for payments to producers who planted eligible
oilseeds in 1999 and who meet other conditions of eligibility.
Sec. 1411.102 Administration.
(a) This part shall be administered by CCC through the Farm Service
Agency Deputy Administrator for Farm Programs under the general
direction and supervision of the Executive Vice President, CCC. The
program shall be carried out in the field by State and county
committees of the Farm Service Agency of the U.S. Department of
Agriculture.
(b) State and county committees, and representatives and employees
thereof, do not have the authority to modify or waive any of the
provisions of the regulations in this part, as amended or supplemented.
(c) The State committee shall take any action required by this part
that has not been taken by the county committee. The State committee
shall also:
(1) Correct, or require a county committee to correct, any action
taken by such county committee that is not in accordance with this
part; or
(2) Require a county committee to withhold taking any action that
is not in accordance with this part.
(d) No delegation in this section to a State or county committee
shall preclude the Executive Vice President, CCC, or a designee, from
determining any question arising under the program or from reversing or
modifying any determination made by a State or county committee. The
Deputy Administrator may waive or modify deadlines or other program
requirements of this part to the extent that such a waiver or
modification is otherwise permitted by law and is determined to be
appropriate on the ground that it serves the goals of the program or
other goals, and does not adversely affect the operation of the
program.
Sec. 1411.103 Definitions.
The definitions set forth in this section shall be applicable for
all purposes of administering the 1999 Oilseeds Program, and shall be
used for Oilseeds Program purposes only. Definitions contained in parts
718 and 1412 of this title shall also apply but to the extent that they
conflict, the definitions in this section govern with respect to the
Oilseeds Program in this part.
Actual yield means an oilseed yield certified by the producer on
CCC-780, and if subject to spot check, documented by acceptable
production evidence provided by the producer for all the producer's
planted acreage of the oilseed for the year in which the yield is
proven. If subject to a certified yield spot check, the producer must
document an actual yield on form FSA-658 or present RMA documentation
indicating actual yields for all of the producer's planted acreage of
the oilseed for the year in which the yield is proven.
Control county means the county that for FSA administrative
purposes will be considered to be controlling for purposes of making
payment determinations with respect to particular applicants under the
program provided for in this part.
County average soybean yield means an average yield approved by
DAFP using an Olympic average of the county's average soybean yield for
each of the crop years 1994 through 1998 as determined by the State
committee. To the extent such data is available, data from NASS shall
be used.
DAFP means the Deputy Administrator for Farm Programs, FSA.
Deputy Administrator means DAFP.
Eligible oilseed means one of the following kinds of oilseeds:
soybeans, safflower seed, canola, rapeseed, mustard seed, sunflower
seed (oil and confectionary), flaxseed, and crambe.
Established producer means a producer who planted an oilseed for
the 1999 crop year, and shared in the production of that specific
oilseed in 1997 or 1998.
National average oilseed yield means the Olympic average yield for
an eligible oilseed using the National average yields for the oilseed
for the years 1994 through 1998. Such yields shall be considered valid
only if approved by DAFP.
New producer means a producer who planted an eligible oilseed for
crop year 1999, but did not plant or share in the production of that
oilseed in 1997 or 1998. A producer may be a new producer of one
eligible oilseed, while being an established producer for another
oilseed.
Oilseed Program Application means form CCC-780.
Olympic average yield means the average yield for the stated
period, after dropping the highest and lowest yields of that period.
[[Page 36562]]
RMA means the Risk Management Agency of the United States
Department of Agriculture.
Sunflower seed acreage means the total acreage planted to sunflower
seed on the farm in the applicable crop year without regard to the type
of market to which the sunflower seed will be committed, oil or
confectionary use.
Sec. 1411.104 Misinformation and misaction.
The provisions of Sec. 718.8 of this title are applicable to this
part, with respect to performance based upon advice or action of county
or State committees.
Sec. 1411.105 Appeals.
A producer may obtain reconsideration and review of any adverse
determination made under this part in accordance with the appeal
regulations found at parts 11 and 780 of this title.
Subpart B--Eligibility Determinations
Sec. 1411.201 Eligible producers.
(a) Section 804 of Public Law 106-78 authorizes the Secretary to
make payments to a producer who planted an eligible oilseed in 1999.
Accordingly, producers of the 1999 crop of oilseeds identified in
Sec. 1411.203 are eligible to receive 1999 Oilseeds Program benefits,
providing the producer meets the requirements of this part, and is in
compliance with part 12 of this title regarding the conservation and
protection of highly erodible lands and wetlands, and Sec. 718.11 of
this title regarding denials of program benefits for activities
relating to the use of controlled substances.
(b) Eligibility determinations made under this part will be made
for each producer separately for each specific eligible oilseed planted
by that producer in 1999. A producer is not eligible for payment with
respect to an oilseed that the producer did not plant in 1999
regardless of whether the producer did or did not plant that oilseed in
1997 or 1998.
Sec. 1411.202 Violations, misrepresentation, or scheme or device.
Any person who is determined to have intentionally misrepresented
any fact affecting a program determination made in accordance with this
part shall not be entitled to oilseed payments under this part and must
refund all payments, plus interest determined in accordance with part
1403 of this chapter (relating to debt settlement polices and
procedures).
Sec. 1411.203 Payment amount.
Subject to the availability of funds, eligible persons can receive
a payment under this part. The payment amount shall be equal to the
payment rate established under this part multiplied by the producer's
payment acreage multiplied, in turn, by the producer's payment yield.
The payment rate shall be determined by DAFP after the level of program
participation is known with sufficient clarity to allow for the
calculation of the amount of payment that can be made, by unit of
production, within the limits of the available funds. To the extent
practicable, separate payment rates may be established for separate
eligible oilseeds. Payments can be made only with respect to the
production of eligible oilseeds.
Sec. 1411.204 Payment acreage.
(a) The oilseed payment acreage for an established producer shall,
for a particular oilseed, be the higher of the two acreage amounts
determined by calculating, for the 1997 and 1998 crops separately, the
acreage determined to be equal to the producer's acreage for that
oilseed at all locations for that crop year, adjusted to reflect
interests that are only partial interests in such acreage.
(b) The payment acreage for a new producer of an eligible oilseed
will be the producer's acreage for that oilseed for the 1999 crop at
all locations, adjusted to reflect interests that are only partial
interests in such acreage.
(c) Acreage not planted to an oilseed crop because of weather, or
because of crop rotation practices or other management decisions, or
because of any other reason, shall not be treated as qualifying
production for determining a person's general eligibility for payment,
a person's payment acreage, or for any other reason under this part.
Sec. 1411.205 Payment yield.
(a) For purposes of making yield determinations, under this part
and for purposes of this section in particular, a producer's
``applicable average yield'' shall be, with respect to soybeans, the
county average soybean yield. In the case of other oilseeds, the
``applicable average yield'' shall, for all persons qualifying for
payment, be the national average oilseed yield for that oilseed.
National and county average yields may be announced in advance of
signup by DAFP.
(b) A new producer's payment yield with respect to a particular
eligible oilseed shall be the higher of the:
(1) Applicable average yield for that oilseed or
(2) Producer's actual yield for the 1999 crop year.
(c) For established producers, the producer's payment yield for a
particular oilseed shall be the higher of:
(1) Applicable average yield; or
(2) The higher for the 1997 and 1998 crops of the producer's actual
yield respectively for those crop years for all acres of the oilseed
planted by the producer.
(d) In making determinations under paragraph (c) of this section
for established producers, the choice of a crop year history will not
be limited to the same history year chosen to set the producer's
payment acres.
(e) Where actual yields are used for purposes of establishing the
producer's payment yields, the producer, if subject to a yield spot
check or otherwise asked to do so, must document those actual yields
using form FSA-658 and must establish those yields to the satisfaction
of the county committee.
(f) In making yield determinations, the producer's yields and
payments may be adjusted by DAFP and the county and state committees,
as necessary and practicable to reflect instances in which the producer
has different yields at different locations and to reflect partial
interests that the producer may have in some acreages.
Subpart C--Application for Payment
Sec. 1411.301 Signup period.
A signup period shall be announced by the Secretary. Late-filed
applications shall not be accepted so that DAFP may establish, to the
extent practicable, a final payment rate that will limit total payments
to not more than the allocated amount, which shall be, unless
determined otherwise by DAFP, $475 million minus such administrative
expenses as can be deducted by law and minus such reserve as may be
determined needed to resolve disputes and problematic claims.
Sec. 1411.302 Submitting application.
(a) Producers shall properly complete, sign and file the
application Form CCC-780, and submit the application to the Farm
Service Agency during the signup period.
(b) A separate CCC-780 is required for each producer.
(c) For a producer to be considered to have properly filed the
application, such applications must be filed by the producer in the FSA
county office established as the control county for that producer at
the time of application.
Sec. 1411.303 Late-filed acreage reports.
Late-filed acreage reports may be submitted for Oilseed Program
purposes no later than February 18, 2000, or as determined by DAFP,
provided that the producer shall submit sufficient documentation to
verify the acreage to the satisfaction of the county committee.
[[Page 36563]]
Subpart D--Miscellaneous
Sec. 1411.401 Limitation of payments.
(a) No more than the allotted funds may be used for payments under
this part. However, no ``per-person'' limit on payments shall apply nor
shall there be a gross revenue test as a condition of payment for a
person or entity.
(b) No person shall receive a payment under this part except upon a
properly completed application properly submitted to the Farm Service
Agency during the signup period announced by the Secretary.
Sec. 1411.402 Offsets and assignments; powers of attorney.
(a) Except as provided in paragraph (b) of this section, any
payment or portion thereof to any person shall be made without regard
to questions of title under State law and without regard to any claim
or lien against the crop, or proceeds thereof, in favor of the owner or
any other creditor except agencies of the U.S. Government. The
regulations governing offsets and withholdings found at part 1403 of
this chapter shall be applicable to contract payments.
(b) Any producer entitled to any payment may assign any payments in
accordance with regulations governing assignment of payment found at
part 1404 of this chapter.
(c) In those instances in which, prior to the issuance of this
part, a producer has signed a power of attorney on an approved FSA-211
for a person or entity indicating that such power shall extend to ``all
above programs'', without limitation, such power will be considered to
extend to this program unless by June 22, 2000 the person granting the
power notifies the local FSA office for the control county that the
grantee of the power is not authorized to handle transactions for this
program for the grantor.
PART 1427--COTTON
5. The authority citation for 7 CFR part 1427 is revised to read as
follows:
Authority: 7 U.S.C. 7231-7235-7237; 15 U.S.C. 714b and 714c;
sec. 813 of Pub. L. 106-78, 113 Stat 1182; and sec. 104, Pub. L.
106-113.
6. In Sec. 1427.25 revise paragraphs (c)(1)(ii), (c)(2), (d)(1)
introductory text, (d)(2)(i), (d)(3)(ii), and (f)(2)(ii) to read as
follows:
Sec. 1427.25 Determination of the prevailing world market price and
the adjusted world price for upland cotton.
* * * * *
(c) * * *
(1) * * *
(ii) The average price of M 1\3/32\ inch, leaf 3, (micronaire 3.5
through 3.6 and 4.3 through 4.9, strength 26.5 through 28.4 grams per
tex, length uniformity 81 percent) cotton as quoted each Thursday in
the designated U.S. spot markets.
* * * * *
(2) The price determined in accordance with paragraph (c)(1) of
this section shall be adjusted to reflect the price of Strict Low
Middling (SLM) 1\1/16\ inch, leaf 4, (micronaire 3.5 through 3.6 and
4.3 through 4.9, strength 26.5 through 28.4 grams per tex, length
uniformity 81 percent) cotton (U.S. base quality) by deducting the
difference, as announced by CCC, between the applicable loan rate for a
crop of upland cotton for M 1\3/32\ inch, leaf 3, (micronaire 3.5
through 3.6 and 4.3 through 4.9, strength 26.5 through 28.4 grams per
tex, length uniformity 81 percent) cotton and the loan rate for a crop
of upland cotton of the U.S. base quality.
* * * * *
(d) * * *
(1) If the difference between the average price quotations for the
U.S. Memphis territory and the California/Arizona territory as quoted
for M 1\3/32\ inch cotton C.I.F. northern Europe and the average price
of M 1\3/32\ inch, leaf 3, (micronaire 3.5 through 3.6 and 4.3 through
4.9, strength 26.5 through 28.4 grams per tex, length uniformity 81
percent) cotton as quoted each Thursday in the designated U.S. spot
markets for any week is:
* * * * *
(2) * * *
(i) May use the available northern Europe quotation to determine
the difference between the average price quotations for the U.S.
Memphis territory and the California/Arizona territory as quoted for M
1\3/32\ inch, cotton C.I.F. northern Europe and the average price of M
1\3/32\ inch, leaf 3, (micronaire 3.5 through 3.6 and 4.3 through 4.9,
strength 26.5 through 28.4 grams per tex, length uniformity 81 percent)
cotton as quoted each Thursday in the designated U.S. spot markets for
that week, or
* * * * *
(3) * * *
(ii) the average price of M 1\3/32\ inch, leaf 3, (micronaire 3.5
through 3.6 and 4.3 through 4.9, strength 26.5 through 28.4 grams per
tex, length uniformity 81 percent) cotton as quoted in the designated
U.S. spot markets, that week will not be taken into consideration.
* * * * *
(f) * * *
(2) * * *
(ii) The difference between the applicable loan rate for a crop of
upland cotton for M 1\3/32\ inch, leaf 3, (micronaire 3.5 through 3.6
and 4.3 through 4.9, strength 26.5 through 28.4 grams per tex, length
uniformity 81 percent) cotton and the loan rate for a crop of upland
cotton for SLM 1\1/16\ inch, leaf 4, (micronaire 3.5 through 3.6 and
4.3 through 4.9, strength 26.5 through 28.4 grams per tex, length
uniformity 81 percent) cotton.
* * * * *
7. Add subpart F to 7 CFR part 1427 to read as follows:
Subpart F--Cottonseed Payment Program
Sec.
1427.1100 Applicability.
1427.1101 Administration.
1427.1102 Definitions.
1427.1103 Eligible cottonseed.
1427.1104 Eligible first handlers.
1427.1105 Payment application.
1427.1106 Total available program funds.
1427.1107 Applicant payment quantity.
1427.1108 Total payment quantity.
1427.1109 Payment Rate.
1427.1110 Payment calculation and form.
1427.1111 Liability of first handler.
Sec. 1427.1100 Applicability.
(a) The regulations in this subpart are applicable to the 1999 crop
of cottonseed. These regulations set forth the terms and conditions
under which the Commodity Credit Corporation (CCC) shall provide
payments to first handlers who have applied to participate in the
cottonseed payment program in accordance with section 104(a) of the
Omnibus Consolidated Appropriations Act, 2000 (Public Law 106-113).
Additional terms and conditions may be set forth in the payment
application that must be executed by participants to receive cottonseed
payments.
(b) Payments shall be available only for cottonseed produced and
ginned in the United States.
Sec. 1427.1101 Administration.
(a) The cottonseed payment program shall be administered under the
general supervision of the Executive Vice President, CCC
(Administrator, FSA), or a designee and shall be carried out by FSA's
Kansas City Management Office (KCMO) and Price Support Division (PSD).
(b) The KCMO and PSD representatives and employees thereof do not
have the authority to modify or waive any of the provisions of the
regulations of this subpart.
(c) No provision or delegation herein to KCMO or PSD shall preclude
the Executive Vice President, CCC, or a
[[Page 36564]]
designee, from determining any question arising under the program or
from reversing or modifying any determination made by KCMO or PSD.
(d) The Executive Vice President, CCC, or a designee, may authorize
KCMO or PSD to waive or modify deadlines and other non-statutory
program requirements in cases where lateness or failure to meet such
other requirements do not affect adversely the operation of the
cottonseed payment program. The Executive Vice President may suspend
the program should cause to do so appear as a result of a public
rulemaking or otherwise.
(e) A representative of CCC may execute cottonseed payment program
applications and related documents only under the terms and conditions
determined and announced by CCC.
(f) Payment applications and related documents not executed in
accordance with the terms and conditions determined and announced by
CCC, including any purported execution prior to the date authorized by
CCC, shall be null and void.
(g) The Deputy Administrator for Farm Programs, FSA, may waive or
modify non-statutory deadlines and other non-statutory program
requirements in cases where lateness or failure to meet such other
program requirements does not adversely affect the operation of the
cottonseed payment program.
(h) This subpart shall be administered only to the extent that it
is determined by the Executive Vice President, CCC, that it is lawful
and appropriate to commit funds to the program from sources
specifically identified in the authorizing legislation.
Sec. 1427.1102 Definitions.
The definitions set forth in this section shall be applicable for
purposes of administering the 1999 cottonseed payment program. The
terms applied in Secs. 1427.3, 1427.52, and 1427.102 shall be
applicable to this subpart.
Cottonseed means the seed from any variety of upland cotton and
extra long staple (ELS) cotton produced and ginned in the United
States.
Gin means a person (i.e., an individual, partnership, association,
corporation, cooperative marketing association, estate, trust, State or
political subdivision or agency thereof, or other legal entity) that
removes cottonseed from cotton lint in commercial quantities as
determined by CCC.
Number of bales means the absolute number of ginned cotton bales
based on individual bale weights unadjusted to a uniform bale weight.
Olympic average means the average for the stated period after
excluding the highest and lowest values.
Ton means a unit of weight equal to 2,000 pounds avoirdupois
(907.18 kilograms).
Sec. 1427.1103 Eligible cottonseed.
To be eligible for payments under this subpart, cottonseed must:
(a) Have been grown in the United States during the 1999-crop
production period.
(b) Have been ginned by the applicant from 1999-crop cotton.
(c) Not have been destroyed or damaged by fire, flood, or other
events such that its loss or damage was compensated by other local,
State, or Federal government or private or public insurance or disaster
relief payments.
Sec. 1427.1104 Eligible first handlers.
(a) For the purpose of this subpart, an eligible first handler of
cottonseed shall be a gin that ginned 1999-crop cotton.
(b) Applicants must comply with the terms and conditions set forth
in this subpart and instructions issued by CCC, and sign and submit an
accurate, legible and complete Cottonseed Payment Program Application/
Certification.
(c) Applicants must agree to share any payment received with the
producer of the cotton that was the basis of the payment to the extent
that the effect of low cottonseed prices was borne by the producer
rather than the gin. To the extent that such funds will go to
individual producers, those funds will be considered to have been
received by the applicant on behalf of such producers.
Sec. 1427.1105 Payment application.
(a) Payments in accordance with this subpart shall be made
available to eligible first handlers of cottonseed based on information
provided on a Cottonseed Payment Program Application/Certification.
(b) Payment applications must be received within the program
application period announced by CCC. Applications received after such
application period will not be accepted for payment.
(c) Cottonseed Payment Program Application/Certifications may be
obtained from the CCC as announced by news release. In order to
participate in the program authorized by this subpart, first handlers
of cottonseed must execute the Cottonseed Payment Program Application/
Certification and forward the original according to announced
instructions.
Sec. 1427.1106 Total available program funds.
The total available program fund shall be determined by CCC based
on the funds available under section 802 of Public Law 106-78
(excluding any funds authorized to carry out title IX of Public Law
106-78) and under section 1111 of Public Law 105-277 not otherwise
needed to fully implement those sections.
Sec. 1427.1107 Applicant payment quantity.
(a) The applicant's payment quantity of cottonseed will be
determined by CCC based on the eligible number of ginned cotton bales
and cotton lint weight indicated on the Cottonseed Payment Application/
Certification and/or obtained by from the Agricultural Marketing
Service.
(b) The applicant's payment quantity of cottonseed shall be
calculated by multiplying:
(1) The applicant's eligible weight of lint, in tons, for which
payment is requested, as approved by CCC, by
(2) 1.59 (the 1994-98 Olympic average ratio of estimated pounds of
cottonseed per pound of ginned cotton lint).
Sec. 1427.1108 Total payment quantity.
(a) The total quantity of 1999-crop cottonseed produced in the
United States is eligible for payment under this subpart. The total
payment quantity of cottonseed will be the total of eligible quantities
of cottonseed for which applications for payment are received within
the application period announced by CCC.
(b) The total payment quantity of cottonseed shall be calculated by
multiplying:
(1) The eligible weight of cotton lint, in tons, for which payment
is requested by all applicants, as approved by CCC, by
(2) 1.59 (the 1994-98 Olympic average ratio of estimated pounds of
cottonseed per pound of ginned cotton lint).
Sec. 1427.1109 Payment rate.
The payment rate (dollars per ton) for the purpose of calculating
payments made available in accordance with this subpart shall be
determined by CCC by dividing the total available program funds, as
determined by CCC, by
(a) The higher of:
(1) The total payment quantity, or
(2) The total quantity of 1999-crop cottonseed, as estimated by
CCC, or by
(b) A quantity of cottonseed determined by CCC to provide
applicants with payments at a level consistent with the statutory
objectives.
Sec. 1427.1110 Payment calculation and form.
(a) Payments in accordance with this subpart shall be determined
for individual applicants by multiplying:
(1) The payment rate, determined in accordance with Sec. 1427.1109,
by
[[Page 36565]]
(2) The eligible payment quantity of the applicant, determined in
accordance with Sec. 1427.1107.
(b) After receipt of the application for payment, together with
required supporting documents, CCC will issue payments to the
applicant, at the option of the applicant, to the applicant's mail
address or by electronic deposit to the applicant's account.
Sec. 1427.1111 Liability of first handler.
(a) If a first handler makes any fraudulent representation in
obtaining a cottonseed payment, such payment shall be refunded upon
demand by CCC. The first handler shall be liable for the amount of the
payment and applicable interest on such payment, as determined by CCC.
(b) Persons executing a joint payment application will be jointly
and severally liable for any program violation, ineligibility, or
refund due CCC, and each such person shall be and remain liable for the
repayment of the entire payment of any amount due to CCC until the
payment is fully repaid, without regard to such person's claimed share
in the cottonseed payment.
(c) If the payment recipient is suspected by CCC to have knowingly:
adopted any scheme or device to defeat the purposes of this program;
made any fraudulent representation; or misrepresented any fact
affecting a determination under this application, CCC will notify the
appropriate investigating agencies of the United States and take steps
as deemed necessary to protect the interests of the government.
(d) If the payment applicant receives a payment in excess of the
entitled payment, the applicant shall refund to CCC an amount equal to
the excess payment, plus interest thereon, as determined by CCC.
(e) From the date of the payment application until the earlier of
three years after the date of the application or July 31, 2003, the
applicant shall keep records and furnish such information and reports
relating to the application as may be requested by CCC. After that
time, destruction of records shall be at the party's own risk. CCC may
require the retention of the records for a longer period of time as the
need arises. Such records shall be available at all reasonable times
for an audit or inspection by authorized representatives of CCC, the
United States Department of Agriculture, or the Comptroller General of
the United States. Failure to keep, or make available, such records may
result in refund to CCC of all payments received, plus interest
thereon, as determined by CCC.
(f) Unless otherwise approved by CCC, no Member or Delegate of
Congress or Resident Commissioner shall be admitted to any share or
part of payments provided under this program or to any benefit to arise
therefrom, except that this provision shall not be construed to extend
to their interest in any incorporated company, if the payment is for
the general benefit of such company, or to any benefit in which it is
determined by CCC such person's interest is that of a producer of
cotton.
8. Add subpart G to 7 CFR Part 1427 to read as follows:
Subpart G--Extra Long Staple (ELS) Cotton Competitiveness Payment
Program
Sec.
1427.1200 Applicability.
1427.1201 Administration.
1427.1202 Definitions.
1427.1203 Eligible ELS cotton.
1427.1204 Eligible domestic users and exporters.
1427.1205 ELS Cotton Domestic User/Exporter Agreement.
1427.1206 Form of payment.
1427.1207 Payment rate.
1427.1208 Payment.
Subpart G--Extra Long Staple (ELS) Cotton Competitiveness Payment
Program
Sec. 1427.1200 Applicability.
(a) Except as specified by CCC, the regulations in this subpart are
applicable to the period beginning June 8, 2000, unless the Executive
Vice President, CCC, shall apply the regulations to an earlier period,
but not earlier than October 1, 1999, consistent with the authorizing
statute. These regulations set forth the terms and conditions under
which CCC shall make payments, in the form of commodity certificates or
cash, to eligible domestic users and exporters of extra long staple
(ELS) cotton who have entered into an ELS Cotton Domestic User/Exporter
Agreement with CCC to participate in the ELS cotton competitiveness
payment program in accordance with section 136A(c) of the Federal
Agriculture Improvement and Reform Act of 1996 (Pub. L. 104-127).
(b) During the effective period of these regulations, CCC may issue
marketing certificates or cash payments to domestic users and
exporters, at the option of the recipient, in accordance with this
subpart in any week following a consecutive 4-week period in which:
(1) The lowest adjusted Wednesday through Tuesday average price
quotation for foreign growths (LFQ), as quoted for ELS cotton,
delivered C.I.F. (cost, insurance and freight) Northern Europe is less
than the Wednesday through Tuesday adjusted average domestic spot price
quotation for U.S. Pima cotton, grade 3, staple 44, micronaire 3.5 or
higher, uncompressed, F.O.B. warehouse; and
(2) The LFQ, determined in accordance with Sec. 1427.1207, is less
than 134 percent of the current crop year loan level for the ELS cotton
grade 3, staple 44, micronaire 3.5 or higher.
(c) Additional terms and conditions may be set forth in the ELS
Cotton Domestic User/Exporter Agreement, which must be executed by the
domestic user or exporter in order to receive such payments.
(d) Forms that are used in administering the ELS cotton
competitiveness payment program shall be prescribed by CCC.
Sec. 1427.1201 Administration.
(a) The ELS cotton competitiveness payment program shall be
administered under the general supervision of the Executive Vice-
President, CCC (Administrator, FSA), or a designee and shall be carried
out by FSA's Kansas City Commodity Office (KCCO) and Kansas City
Management Office (KCMO).
(b) The KCCO and KCMO, and representatives and employees thereof,
do not have the authority to modify or waive any of the provisions of
the regulations of this subpart.
(c) No provision or delegation herein to KCCO or KCMO shall
preclude the Executive Vice President, CCC, or a designee, from
determining any question arising under the program or from reversing or
modifying any determination made by KCCO or KCMO.
(d) The Executive Vice President, CCC, or a designee, may authorize
KCCO or KCMO to waive or modify non-statutory deadlines and other non-
statutory program requirements in cases where lateness or failure to
meet such other requirements do not affect adversely the operation of
the ELS cotton competitiveness payment program. In addition, the
Executive Vice President may suspend the program to the extent that
cause to do so may appear as a result of a public rulemaking or
otherwise.
(e) A representative of CCC may execute ELS cotton competitiveness
payment program payment applications, ELS Cotton Domestic User/Exporter
Agreements and related documents only under the terms and conditions
determined and announced by CCC.
(f) Payment applications, ELS Cotton Domestic User/Exporter
Agreements and related documents not executed in accordance with the
terms and
[[Page 36566]]
conditions determined and announced by CCC, including any purported
execution prior to the date authorized by CCC, shall be null and void.
(g) This program shall only be administered to the extent that it
is determined by the Executive Vice President, CCC, that it is lawful
and appropriate to commit funds to this program from those sources
specifically identified as the funding source in the authorizing
legislation.
Sec. 1427.1202 Definitions.
The definitions set forth in this section shall be applicable for
all purposes of program administration. The terms defined in
Secs. 1427.3 and 1427.52 of this part and part 1413 of this chapter
shall also be applicable.
Adjusted spot price means the spot price adjusted to reflect any
lack of data for grade 3 or staple 44 to make the adjusted spot price
comparable to a spot price assuming grade 3 and staple 44. If grade 3
spot price data are not available, spot prices for grade 2, grade 1, or
grade 4 will be used and will be adjusted by the average difference
between spot prices for grade 3 and those for grade 2, grade 1 or grade
4, as the case may be, over the available observations during the
previous 12 months. If spot prices for staple 44 are not available,
spot prices for staple 46 may be used and will be adjusted by the
average difference between spot prices for staple 44 and those for
staple 46 over the available observations during the previous 12
months.
Bale opening means the removal of the bagging and ties from a bale
of eligible ELS cotton in the normal opening area, immediately prior to
use, by a manufacturer in a building or collection of buildings where
the cotton in the bale will be used in the continuous process of
manufacturing raw cotton into cotton products in the United States.
Consumption means, the use of eligible ELS cotton by a domestic
user in the manufacture in the United States of ELS cotton products.
Cotton product means any product containing cotton fibers that
result from the use of an eligible bale of ELS cotton in manufacturing.
Current shipment price means, during the period in which two daily
price quotations are available for the LFQ for the foreign growth
quoted C.I.F. Northern Europe, the price quotation for cotton for
shipment no later than August/September of the current calendar year.
Forward shipment price means, during the period in which two daily
price quotations are available for the LFQ for foreign growths quoted
C.I.F. Northern Europe, the price quotation for cotton for shipment no
earlier than October/November of the current calendar year.
LFQ means, during the period in which only one daily price
quotation is available for the growth, the lowest average for the
preceding Wednesday-through-Tuesday week of the price quotations for
foreign growths of ELS cotton, quoted C.I.F. Northern Europe, after
each respective average is adjusted for quality differences between the
respective foreign growth and U.S. Pima, grade 3, staple 44, micronaire
3.5 and higher, provided that the lowest adjusted quotation becomes the
LFQ after it is further adjusted to reflect the estimated cost of
transportation between an average U.S. location and northern Europe.
(1) Current LFQ means the average for the preceding Wednesday
through Tuesday of the current shipment prices for the lowest adjusted
foreign growth, C.I.F. Northern Europe.
(2) Forward LFQ means the average for the preceding Wednesday
through Tuesday of the forward shipment prices for the lowest adjusted
foreign growth quoted C.I.F. Northern Europe.
Spot price means the Wednesday-Tuesday weekly average of the
domestic spot prices reported by the Agricultural Marketing Service,
USDA, for U.S. Pima, grade 3, staple 44, micronaire 3.5 or higher,
uncompressed, F.O.B. warehouse, for the San Joaquin and Desert
Southwest markets. When both San Joaquin Valley and Desert Southwest
spot quotations are available, the U.S. quotation will be the average
of the two quotations. If only one quotation is available, that
quotation will be used.
Sec. 1427.1203 Eligible ELS cotton.
(a) For the purposes of this subpart, eligible ELS cotton is
domestically produced baled ELS cotton that is--
(1) Opened by an eligible domestic user on or after October 1,
1999, or,
(2) Exported by an eligible exporter on or after October 1, 1999,
during a Wednesday through Tuesday period in which a payment rate,
determined in accordance with Sec. 1427.1207, is in effect, and that
meets the requirements of paragraphs (b) and (c) of this section;
(b) Eligible ELS cotton must be either--
(1) Baled lint, including baled lint classified by USDA's
Agricultural Marketing Service as Below Grade;
(2) Loose;
(3) Semi-processed motes that are of a quality suitable, without
further processing, for spinning, papermaking or bleaching;
(4) Reginned (processed) motes.
(c) Eligible ELS cotton must not be--
(1) ELS Cotton with respect to which a payment, in accordance with
the provisions of this subpart, has been made available;
(2) Imported ELS cotton;
(3) Raw (unprocessed) motes;
(4) Semi-processed motes that are not of a quality suitable,
without further processing, for spinning, papermaking or bleaching;
(5) Textile mill wastes; or
(6) Semi-processed or reginned (processed) motes that have been
blended with textile mill waste or other fibers.
Sec. 1427.1204 Eligible domestic users and exporters.
(a) For the purposes of this subpart, the following persons shall
be considered to be eligible domestic users and exporters of ELS
cotton:
(1) A person regularly engaged in the business of opening bales of
eligible ELS cotton for the purpose of manufacturing such cotton into
cotton products in the United States (``domestic user''), who has
entered into an agreement with CCC to participate in the ELS cotton
competitiveness payment program; or
(2) A person, including a producer or a cooperative marketing
association approved in accordance with part 1425 of this chapter,
regularly engaged in selling eligible ELS cotton for exportation from
the United States (``exporter''), who has entered into an agreement
with CCC to participate in the ELS cotton competitiveness payment
program.
(b) Applications for payment in accordance with this subpart must
contain documentation required by the provisions of the ELS Cotton
Domestic User/Exporter Agreement and instructions issued by CCC.
Sec. 1427.1205 ELS Cotton Domestic User/Exporter Agreement.
(a) Payments in accordance with this subpart shall be made
available to eligible domestic users and exporters who have entered
into an ELS Cotton Domestic User/Exporter Agreement with CCC and who
have complied with the terms and conditions set forth in this subpart,
the ELS Cotton Domestic User/Exporter Agreement and instructions issued
by CCC.
(b) ELS Cotton Domestic User/Exporter Agreements may be obtained
from the Cotton and Rice Branch, Warehouse Contract Division, Kansas
City Commodity Office, P.O. Box 419205, Kansas City, Missouri 64141-