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Proposed Rule

Tobacco Inspection, Growers Referendum

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Agricultural Marketing Service, USDA.


Notice of referendum.


This notice announces that a referendum will be conducted by mail during the period May 9-13, 2005, for producers of all kinds of tobacco who sold their tobacco at auction on designated markets in 2004/05. The referendum is being conducted to determine if the designation of all existing tobacco auction markets should be terminated, thus eliminating the requirement for mandatory, federal inspection and grading for the 2005 and succeeding crop years.


The referendum will be held May 9-13, 2005.

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William O. Coats, Acting Deputy Administrator, United States Department of Agriculture (USDA), Agricultural Marketing Service (AMS), Tobacco Programs, Room 502 Cotton Annex Building, Stop 0280, 1400 Independence Avenue, SW., Washington, DC 20250-0280, (202) 205-0567.

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The Fair and Equitable Tobacco Reform Act of 2004 eliminated the price support and quota system for U.S. produced tobacco. Although mandatory grading is eliminated on types of tobacco eligible for price support, mandatory federal grading of any tobacco sold at auction on a designated market continues under the Tobacco Inspection Act. Currently, there are 70 designated auction markets that sell flue-cured, burley, dark fire-cured, and dark air-cured types of tobacco. The user fee for the inspection of tobacco at auction markets is $.90 per hundred pounds.

At a February 1, 2005, meeting of the National Advisory Committee for Tobacco Inspection Services, a request was made to the USDA to conduct a referendum to determine if tobacco producers favored the termination of the designation of all current auction markets, thereby eliminating the requirement for mandatory, federal inspection and grading if they sell their crop at auction. The Committee, which is comprised of members from Farm Bureaus and Granges representing all tobacco producing states, strongly advised that mandatory federal grading, without the benefit of price support, would reduce the monetary returns to producers and create a competitive disadvantage for operators of auction warehouses.

Because the recently enacted legislation eliminates all mandatory inspection except for tobacco sold at auction on designated markets, the USDA determined that a referendum would be an appropriate means of deciding whether to discontinue mandatory grading on all designated auction markets. It is hereby determined that the referendum will be held by mail during the period May 9-13, 2005. Only producers who sold tobacco at auction on a designated market in 2004 are eligible to vote. The purpose of the referendum is to determine whether producers of Flue-Cured tobacco, Types 11-14, Burley tobacco, Type 31, Virginia Fire-Cured tobacco, Type 21, Kentucky and Tennessee Fire-Cured tobacco, Types 22-23, and Dark Air-Cured tobacco, Types 35-37, are in favor of or opposed to terminating the designation of all tobacco auction markets and thereby eliminating mandatory, federal grading of their crop for the 2005 and succeeding crop years. Accordingly, if a majority of the tobacco producers who vote in the referendum favor termination of auction market designations, the designation of all 70 auction markets will be terminated.

The referendum will be held in accordance with the provisions for referenda of the Tobacco Inspection Act, as amended (7 U.S.C. 511d), and the regulations for such referendum set forth in 7 CFR 29.74.

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Authority: 7 U.S.C. 511 et seq.

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Dated: April 15, 2005.

Kenneth C. Clayton,

Acting Administrator, Agricultural Marketing Service.

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[FR Doc. 05-8030 Filed 4-20-05; 8:45 am]