Establishment of Negotiated Rulemaking Committee for Changes to Livestock Mandatory Reporting

AGENCY:

Agricultural Marketing Service, USDA.

ACTION:

Establishment of Negotiated Rulemaking Committee.

SUMMARY:

The U.S. Department of Agriculture, Agricultural Marketing Service (AMS) is announcing its intent to establish a Wholesale Pork Reporting Negotiated Rulemaking Committee (Committee). The Committee will attempt to reach consensus on proposed language that AMS will publish as a proposed rule in the Federal Register. The Committee will include representatives of parties who would be affected by a final rule. AMS solicits comments on this initiative and requests interested parties to nominate representatives for membership on the Committee.

DATES:

Written comments and requests for membership must be received on or before December 27, 2010.

ADDRESSES:

Comments may be submitted electronically at http://www.regulations.gov. Comments may also be sent to Michael Lynch, Chief; USDA, AMS, LS, LGMN Branch; 1400 Independence Ave., SW., Room 2619-S; Washington, DC 20250; Telephone number (202) 720-6231; or Fax (202) 690-3732.

Comments should reference docket number AMS-LS-10-0080 and note the date and page number of this issue of the Federal Register. Submitted comments will be available for public inspection at http://www.regulations.gov,, or during regular business hours at the above address. All comments submitted in response to this document will be included in the record and will be made available to the public. Please be advised that the identity of the individuals or entities submitting the comments will be made public on the Internet at the address provided above.

FOR FURTHER INFORMATION CONTACT:

Michael Lynch, Chief; USDA, AMS, LS, LGMN Branch; 1400 Independence Ave., SW., Room 2619-S; Washington, DC 20250; Telephone number (202) 720-6231; or Fax (202) 690-3732.

SUPPLEMENTARY INFORMATION:

I. Background

On December 1, 2000, AMS published the final rule to implement the LMR program as required by the Livestock Mandatory Reporting Act of 1999 (1999 Act) (7 U.S.C. 1635-1636h) [65 FR 75464]. The purpose of the 1999 Act was to establish a program of information regarding the marketing of cattle, swine, lambs, and the products of such livestock that provides information that can be readily understood by producers; improves the price and supply reporting services of USDA; and encourages competition in the marketplace for livestock and livestock products.

The statutory authority for the program lapsed on September 30, 2005. At that time, AMS sent letters to all packers required to report under the 1999 Act, requesting they continue to submit information voluntarily. In October 2006, Congress enacted legislation to reauthorize the 1999 Act through September 30, 2010, and to amend the swine reporting requirements of the 1999 Act (Reauthorization Act) (Pub. L. 109-296). The Reauthorization Act re-established the regulatory authority for the continued operation of the LMR program and separated the reporting requirements for sows and boars from barrows and gilts, among other changes.

On May 16, 2008, USDA published the final regulation to re-establish and revise the LMR program (73 FR 28606). The rule incorporated the swine reporting changes contained within the 2006 Reauthorization Act, as well as enhanced the program's overall effectiveness and efficiency based on AMS' experience in the administration of the program. The LMR Final Rule became effective on July 15, 2008. AMS believed that the rule facilitated open, transparent price discovery and provided all market participants, both large and small, with comparable levels of market information for cattle, swine, sheep, beef, and lamb meat.

The Food, Conservation, and Energy Act of 2008 (2008 Farm Bill) (Pub. L. 110-234) directed the Secretary of Agriculture (Secretary) to conduct a study to determine advantages, drawbacks, and potential implementation issues associated with adopting mandatory wholesale pork reporting. The report from this study concluded that negotiated wholesale pork price reporting is thin and becoming thinner and found some degree of support for moving to mandatory price reporting exists at every segment of the industry interviewed. That study also concluded that the benefits likely would exceed the cost of moving from a voluntary to a mandatory reporting program for wholesale pork. The report was delivered to Congress on March 25, 2010. A copy of the full report is available on the AMS Web site at http://www.ams.usda.gov/.

On September 28, 2010, the Mandatory Price Reporting Act of 2010 (2010 Reauthorization Act) (Pub. L. 111-239) reauthorizing LMR for 5 years and adding a provision for mandatory reporting of wholesale pork cuts was enacted. The 2010 Reauthorization Act directs the Secretary to engage in negotiated rulemaking to make required regulatory changes for mandatory wholesale pork reporting. The statute requires that the Committee include representatives from a specified list of interests, as identified in paragraph IV, B, Interests Involved, of this document. Further, the 2010 Reauthorization Act states that any negotiated rulemaking committee established by the Secretary shall not be subject to the Federal Advisory Committee Act (5 U.S.C. Appendix 2).

II. Statutory Provisions

The Negotiated Rulemaking Act of 1996 (NRA) (5 U.S.C. 561-570); the Mandatory Price Reporting Act of 2010 (Pub. L. 111-239); the Livestock Mandatory Reporting Act of 1999 (7 U.S.C. 1635-1636i); and 7 CFR part 59.

III. The Committee and Its Process

In a negotiated rulemaking, a proposed rule is developed by a committee composed of representatives of government and the interests that will be significantly affected by the rule. Decisions are made by “consensus.” For the purpose of this Committee's proceedings, “consensus” has been statutorily defined as unanimous concurrence among the interests represented unless the Committee agrees to a different definition.

Following receipt of comments on membership, AMS will establish a negotiated rulemaking committee representing the identified interests to negotiate the language of the proposed rule. AMS will be a member of the committee to represent the Federal Government's statutory mission.

Experience of various Federal agencies in negotiated rulemaking has demonstrated that using a trained neutral party to facilitate the process will assist all parties during negotiations to identify their real interests, evaluate their positions, communicate effectively, find common ground, and reach consensus where possible. AMS plans to engage a third-party facilitator for this process. The facilitator will serve as the chairman of the Committee. After the Committee reaches consensus on the provisions of the proposed rule, AMS agrees to publish the consensus language reached by the committee in the Federal Register.

Section 563 of the NRA requires the head of the agency to determine that the use of the negotiated rulemaking procedure is in the public interest. Implementation of mandatory pork reporting is required by Congress. Congress delegated responsibility to the Secretary for determining what information is necessary and appropriate; and directed that a rule be promulgated through the negotiated rulemaking process. AMS expects the Committee will address issues related to, but not limited to, confidentiality, transportation, frequency of reporting, export data, and product heterogeneity.

IV. Negotiated Rulemaking Procedures

In compliance with the NRA, AMS will use the following procedures for guidelines for this negotiated rulemaking. Pursuant to the 2010 Reauthorization Act, this negotiated rulemaking committee shall not be subject to the Federal Advisory Committee Act (5 U.S.C. Appendix 2). AMS may modify these procedures in response to comments received on this document or during the negotiation process.

A. Committee Formation

A committee will be formed and operated in full compliance with the requirements of NRA.

B. Interests Involved

AMS intends to ensure full and adequate representation of those interests that are expected to be significantly affected by the proposed rule. In determining membership, AMS will consider whether the interest represented by a member will be affected significantly by the final product of the Committee and whether that interest is already adequately represented by other members. Under Section 562(5) of the NRA, “interest” means, with respect to an issue or matter, multiple parties which have a similar point of view or which are likely to be affected in a similar manner.

AMS is seeking comments on the composition of the Committee and, in Section D, Request for Nominations, AMS provides a process for the public to nominate organizations to be appointed to the Committee. However, to facilitate the process of identifying a Committee and following guidelines established by the 2010 Reauthorization Act, AMS is proposing the following list of organizations serve on the Committee to adequately represent the stakeholders affected by mandatory pork reporting.

(i) Organizations representing swine producers—American Farm Bureau Federation, National Farmers Union, National Pork Producers Council;

(ii) Organizations representing packers of pork, processors of pork, retailers of pork, and buyers of wholesale pork—American Frozen Foods Institute, American Meat Institute, Food Marketing Institute, Grocery Manufacturers Association, National Meat Association;

(iii) Department of Agriculture—AMS;

(iv) Among interested parties that participate in swine or pork production—Chicago Mercantile Exchange, Livestock Marketing Information Center, and other interested parties.

C. Membership

As directed by the NRA, the Committee should not exceed 25 members. Further, AMS believes that this Committee will adequately represent the interested parties and operate most effectively with no more than 12-16 members. The facilitator will not count against the membership. Section 568(c) of the NRA states:

Members of a negotiated rulemaking committee shall be responsible for their own expenses of participation in such committee, except that an agency may, in accordance with section 7(d) of the FACA, pay for a member's reasonable travel and per diem expenses, expenses to obtain technical assistance, and a reasonable rate of compensation, if (1) Such member certifies a lack of adequate financial resources to participate in the committee; and (2) The agency determines that such member's participation in the committee is necessary to assure an adequate representation of the member's interest.

D. Request for Nominations

AMS solicits nominations for appointment to membership on the Committee. Members can be individuals or representatives of organizations. An organization should identify the individual who will be its representative. Committee members need to have authorization to negotiate on behalf of their interests and be willing to negotiate in good faith. AMS interprets good faith to include: (1) A willingness to bring all issues to the table; and (2) not to discuss the issues in other forums. Good faith also includes a willingness to move away from taking adversarial positions and instead to explore openly all relevant and productive ideas that may emerge from the discussion of the Committee.

Authorization for each application or nomination must include:

1. The name of the applicant or nominee and a description of the interests such person will represent;

2. A description of the person's qualifications and expertise regarding those interests;

3. Whether the participant will be seeking agency resources to participate on the committee; and

4. A written commitment of the applicant or nominee to actively participate in good faith in the negotiated rulemaking.

E. Tentative Schedule

Once AMS makes the final determination on Committee membership, it will publish another document in the Federal Register announcing the final list of members. A proposed agenda and schedule for completing the work of the Committee, including a date for the first meeting, will also be included in the document.

Once formally established and assembled, the Committee will have reasonable latitude to determine appropriate number and frequency of meetings necessary to achieve its objectives. However, for planning purposes, AMS expects the Committee will meet three to four times at various locations across the country. AMS expects that each meeting will last approximately three days. The Committee's work is expected to occur over the course of 3 to 4 months in order to allow sufficient time to reach consensus for a proposed rule.

AMS and its facilitator will, throughout the process, provide necessary technical and logistical support to the Committee. In addition, once the Committee is established, it may seek advisors or subject matter experts to provide information valuable to the decision-making process.

V. Requests for Nominations and Comments

To comply with negotiated rulemaking procedures, AMS invites written comments on this initiative and nominations for the negotiated rulemaking committee. Nominations are for all interests that could be affected by mandatory pork reporting and must comply with paragraph IV, D, Request for Nominations, of this document. All written comments and nominations must be sent to an appropriate address as listed in the ADDRESSES section of this Notice.