82_FR_60229 82 FR 59988 - National Organic Program (NOP); Organic Livestock and Poultry Practices-Withdrawal

82 FR 59988 - National Organic Program (NOP); Organic Livestock and Poultry Practices-Withdrawal

DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service

Federal Register Volume 82, Issue 241 (December 18, 2017)

Page Range59988-59992
FR Document2017-27316

This proposed rule sets forth the U.S. Department of Agriculture's (USDA or Department) intention to withdraw the Organic Livestock and Poultry Practices (OLPP) final rule published in the Federal Register on January 19, 2017, by USDA's Agricultural Marketing Service (AMS). The OLPP final rule amends the organic livestock and poultry production requirements in the USDA organic regulations by adding new provisions for livestock handling and transport for slaughter and avian living conditions; and expands and clarifies existing requirements covering livestock care and production practices and mammalian living conditions. The OLPP final rule was originally set to take effect on March 20, 2017. The effective date has been extended to May 14, 2018 under separate actions.

Federal Register, Volume 82 Issue 241 (Monday, December 18, 2017)
[Federal Register Volume 82, Number 241 (Monday, December 18, 2017)]
[Proposed Rules]
[Pages 59988-59992]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-27316]


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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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Federal Register / Vol. 82, No. 241 / Monday, December 18, 2017 / 
Proposed Rules

[[Page 59988]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 205

[Doc. No. AMS-NOP-15-0012; NOP-15-06]
RIN 0581-AD75


National Organic Program (NOP); Organic Livestock and Poultry 
Practices--Withdrawal

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule sets forth the U.S. Department of 
Agriculture's (USDA or Department) intention to withdraw the Organic 
Livestock and Poultry Practices (OLPP) final rule published in the 
Federal Register on January 19, 2017, by USDA's Agricultural Marketing 
Service (AMS). The OLPP final rule amends the organic livestock and 
poultry production requirements in the USDA organic regulations by 
adding new provisions for livestock handling and transport for 
slaughter and avian living conditions; and expands and clarifies 
existing requirements covering livestock care and production practices 
and mammalian living conditions. The OLPP final rule was originally set 
to take effect on March 20, 2017. The effective date has been extended 
to May 14, 2018 under separate actions.

DATES: Interested persons are invited to submit written comments on 
this proposed rule on or before January 17, 2018.

ADDRESSES: We invite you to submit comments on the proposed rule by any 
of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: Paul Lewis, Ph.D., Director, Standards Division, 
National Organic Program, USDA-AMS-NOP, 1400 Independence Ave. SW, Room 
2642-So., Ag Stop 0268, Washington, DC 20250-0268.
    Instructions: All submissions received must include the docket 
number AMS-NOP-15-0012; NOP-15-06, and/or Regulatory Information Number 
(RIN) 0581-AD75 for this rulemaking. You should clearly indicate the 
reason(s) for your stated position. All comments received and any 
relevant background documents will be posted without change to http://www.regulations.gov.
    Document: For access to the document and to read background 
documents or comments received, go to http://www.regulations.gov. 
Comments submitted in response to this proposed rule will also be 
available for viewing in person at USDA-AMS, National Organic Program, 
Room 2642-South Building, 1400 Independence Ave. SW, Washington, DC, 
from 9 a.m. to 12 noon and from 1 p.m. to 4 p.m., Monday through Friday 
(except official Federal holidays). Persons wanting to visit the USDA 
South Building to view comments received in response to this proposed 
rule are requested to make an appointment in advance by calling (202) 
720-3252.

FOR FURTHER INFORMATION CONTACT: Paul Lewis, Ph.D., Director, Standards 
Division, Telephone: (202) 720-3252; Fax: (202) 720-7808.

SUPPLEMENTARY INFORMATION:

I. Background

    The Organic Foods Production Act of 1990 (OFPA), as amended (7 
U.S.C. 6501-6522), authorizes the United States Department of 
Agriculture (USDA) to establish national standards governing the 
marketing of certain agricultural products as organically produced to 
assure consumers that organically produced products meet a consistent 
standard and to facilitate interstate commerce in fresh and processed 
food that is organically produced. USDA's Agricultural Marketing 
Service (AMS) administers the National Organic Program (NOP) under 7 
CFR part 205.
    On April 13, 2016, AMS published the OLPP proposed rule in the 
Federal Register (81 FR 21956).
    On January 19, 2017, AMS published the OLPP final rule in the 
Federal Register (82 FR 7042). This rule was scheduled to take effect 
on March 20, 2017.
    On January 20, 2017, the Assistant to the President and Chief of 
Staff sent a memorandum titled ``Regulatory Freeze Pending Review'' to 
USDA and other federal executive departments and agencies. Accordingly, 
on February 9, 2017, AMS published a notice in the Federal Register (82 
FR 9967) delaying the OLPP final rule's effective date until May 19, 
2017.
    On May 10, 2017, AMS published two documents regarding the OLPP 
final rule in the Federal Register. The first document delayed the OLPP 
final rule's effective date until November 14, 2017 (82 FR 21677). The 
second document presented four options for agency action (82 FR 21742). 
Interested parties were invited to submit comments on the four options 
on or before June 9, 2017.
    On November 14, 2017, AMS published a final rule in the Federal 
Register (82 FR 52643) delaying the effective date of the OLPP final 
rule until May 14, 2018 to allow AMS the opportunity to gather 
additional public comments on important questions regarding USDA's 
statutory authority to promulgate the OLPP final rule and the likely 
costs and benefits of the rule.

II. Overview of Action Being Considered

    By this notice, AMS is proposing to withdraw the OLPP final rule. 
See 82 FR 7042 (January 19, 2017). USDA has reviewed the OLPP final 
rule and is initiating this action based on the outcome of that review. 
Specifically, USDA proposes withdrawing the OLPP rule based on its 
current interpretation of 7 U.S.C. 6905, under which the OLPP final 
rule would exceed USDA's statutory authority. Withdrawal of the OLPP 
rule also is independently justified based upon USDA's revised 
assessments of its benefits and burdens and USDA's view of sound 
regulatory policy. If this withdrawal is finalized, the existing 
organic livestock and poultry regulations now published at 7 CFR part 
205 would remain effective. AMS seeks comments on the proposal to 
withdraw the OLPP final rule.

III. Related Documents

    Documents related to this OLPP final rule include: OFPA (7 U.S.C. 
6501--6524) and its implementing regulations (7 CFR part 205); the 
Organic Livestock and Poultry Practices proposed rule published in the 
Federal Register on April 13, 2016 (81 FR 21956); the OLPP final rule 
published in the Federal Register on January 19, 2017 (82 FR 7042); the 
final rule delaying the OLPP

[[Page 59989]]

final rule's effective date until May 19, 2017, published by AMS in the 
Federal Register on February 9, 2017 (82 FR 9967); the final rule 
delaying the OLPP final rule's effective date until November 14, 2017, 
published by AMS in the Federal Register on May 10, 2017 (82 FR 21677); 
a second proposed rule presenting the four options for agency action 
listed in Section I, supra, published by AMS in the Federal Register on 
May 10, 2017 (82 FR 21742); and a final rule further delaying the OLPP 
final rule's effective date until May 14, 2018, published by AMS in the 
Federal Register on November 14, 2017 (82 FR 52643).

IV. Legal Authority

    The basis for the proposed withdrawal of the OLPP final rule is 
USDA's current interpretation of OFPA, which is discussed in this 
notice and USDA's revised assessment of the regulatory benefits and 
burdens of the OLPP rule.\1\ USDA invites comment generally on the 
regulatory and other policy implications of the legal interpretation of 
OFPA proposed in this action.
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    \1\ USDA's legal authority to revisit the OLPP final rule is 
well-established. As an initial matter, agencies have broad 
discretion to reconsider a regulation at any time. Clean Air Council 
v. Pruitt, 862 F.3d 1, 8-9 (DC Cir. 2017). Furthermore, USDA's 
interpretation of OFPA ``is not instantly carved in stone,'' but may 
be evaluated ``on a continuing basis.'' Chevron U.S.A. Inc. v. NRDC, 
Inc., 467 U.S. 837, 863-64 (1984). This is true when, as is the case 
here, the agency's review is undertaken in response to a change in 
administrations. National Cable & Telecommunications Ass'n v. Brand 
X Internet Services, 545 U.S. 967, 981 (2005).
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    OFPA is the statutory authority for the OLPP final rule as well as 
for this rulemaking. AMS believes that withdrawing the Organic 
Livestock and Poultry Practices final rule is appropriate in light of 
its interpretation of the scope of authority granted to USDA by OFPA 
and to maintain consistency with USDA regulatory policy principles. If 
this proposed rule to withdraw is finalized, the existing organic 
livestock and poultry regulations now published at 7 CFR part 205 would 
remain effective.

V. Rationale for Withdrawing Organic Livestock and Poultry Practices 
OLPP Final Rule

    This section provides AMS' primary reasons for proposing to 
withdraw the OLPP final rule.

A. Authority Under the OFPA To Issue Animal Welfare Regulations

    The OLPP final rule consisted, in large part, of rules clarifying 
how producers and handlers participating in the National Organic 
Program must treat livestock and poultry to ensure their wellbeing (82 
FR 7042). AMS is proposing to withdraw the OLPP final rule because it 
now believes OFPA does not authorize the animal welfare provisions of 
the OLPP final rule. Rather, the agency's current reading of the 
statute, given the relevant language and context, suggests OFPA's 
reference to additional regulatory standards ``for the care'' of 
organically produced livestock should be limited to health care 
practices similar to those specified by Congress in the statute, rather 
than expanded to encompass stand-alone animal welfare concerns. 7 
U.S.C. 6509(d)(2).
    USDA believes that the Department's power to act and how it may act 
are authoritatively prescribed by statutory language and context; USDA 
believes that it may not lawfully regulate outside the boundaries of 
legislative text.\2\ Therefore, in considering the scope of its lawful 
authority, USDA believes the threshold question should be whether 
Congress has authorized the proposed action. If, however, a statute is 
silent or ambiguous with respect to a specific issue, then USDA 
believes that its interpretation is entitled to deference and the 
question becomes simply whether USDA's action is based on a permissible 
statutory construction.\3\
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    \2\ City of Arlington v. FCC, 133 S. Ct. 1863, 1868 (2013).
    \3\ See Chevron, U.S.A., 467 U.S. at 843; City of Arlington, 133 
S. Ct. at 1871. USDA believes that fidelity to the Constitution and 
to the rule of law are better served when regulatory authority is 
firmly grounded in plain statutory text. Id. at 1876 (Scalia, J.) 
(``The fox-in-the-henhouse syndrome is to be avoided. . . . by 
taking seriously, and applying rigorously, in all cases, statutory 
limits on agencies' authority'') (emphasis added); id. at 1879 
(Roberts, CJ., dissenting) (``the danger posed by the growing 
administrative state cannot be dismissed''); Youngstown Sheet & Tube 
Co. v. Sawyer, 343 U.S. 579, 593-94 (1952) (Frankfurter, J., 
concurring) (``The accretion of dangerous power does not come in a 
day. . . . [but] slowly, from the generative force of unchecked 
disregard of the restrictions that fence in even the most 
disinterested assertion of authority''); FTC v. Ruberoid Co., 343 
U.S. 470, 487 (1952) (Jackson, J., dissenting) (the administrative 
state ``has deranged our three-branch legal theories''). USDA 
generally believes that it may promulgate rules that are reasonable 
in light of the text, nature, and purpose of the relevant statute in 
cases of gaps or ambiguity. United States v. Mead Corp., 533 U.S. 
218, 229 (2001). However, USDA also believes Congress knows to speak 
in plain terms when it wishes to circumscribe, and in capacious 
terms when it wishes to enlarge, USDA's discretion. Compare 7 U.S.C. 
6509(g), with 7 U.S.C. 2151 (``The Secretary is authorized to 
promulgate such rules, regulations, and orders as he may deem 
necessary in order to effectuate the purposes of this chapter''), 15 
U.S.C. 1823(c) (``The Secretary shall prescribe by regulation 
requirements . . . to detect and diagnose a horse that is sore . . 
.''), 35 U.S.C. 316(a)(4) (the Patent Office has the authority to 
issue ``regulations . . . establishing and governing inter parties 
review under this chapter''), and 49 U.S.C. 40103(b) (FAA shall 
``prescribe air traffic regulations''); see generally Cuzzo Speed 
Technologies, LLC v. Lee, 136 S. Ct. 2131, 2142-43 (2016); City of 
Arlington, 133 S. Ct. at 1868.
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    USDA believes 7 U.S.C. 6509 is the relevant authority for OFPA-
related regulations governing animal production practices. USDA further 
believes that it should adhere to this legislative text and that it 
lacks the power to tailor legislation to policy goals, however worthy, 
by rewriting unambiguous statutory terms. Rather, USDA believes it may 
properly exercise discretion only in the interstices created by 
statutory silence or ambiguity and must always give effect to the 
unambiguously expressed intent of Congress.\4\
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    \4\ See generally Utility Air Regulatory Group v. Environmental 
Protection Agency, 134 S. Ct. 2427, 2441, 2445-46 (2014) (citations 
omitted).
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    The OLPP final rule is a broadly prescriptive animal welfare 
regulation governing outdoor access and space, transport, and 
slaughter, among other things. (82 FR 7042, 7074, 7082). USDA's general 
OFPA implementing authority was used as justification for the OLPP 
final rule, which cited 7 U.S.C. 6509(g) as ``convey(ing) the intent 
for the USDA to develop more specific standards. . . .'' (82 FR 7043), 
and 7 U.S.C. 6509(d)(2) as authorizing regulations for animal 
``wellbeing'' and the ``care of livestock.'' (82 FR 7042, 7074, 7082).
    But nothing in Section 6509 authorizes the broadly prescriptive, 
stand-alone animal welfare regulations contained in the OLPP final 
rule.\5\ Rather, section 6509 authorizes USDA to regulate with respect 
to discrete aspects of animal production practices and materials: 
Breeder stock, feed and growth promoters, animal health care, forage, 
and record-keeping. Section 6509(d) is titled ``Health Care.''

[[Page 59990]]

Subsection 6509(d)(1) identifies prohibited health care practices, 
including subtherapeutic doses of antibiotics; routine synthetic 
internal parasiticides; and medication, other than vaccinations, absent 
illness. Reading the plain language in context, AMS now believes that 
the authority granted in section 6509(g) for the Secretary to issue 
regulations fairly extends only to those aspects of animal care that 
are similar to those described in section 6509(d)(1) and that are shown 
to be necessary to meet the congressional objectives specified in 7 
U.S.C. 6501.\6\ The Secretary's authority to promulgate rules under 
section 6509(g) is similarly circumscribed: He may ``develop detailed 
regulations'' only to ``guide the implementation of the standards for 
livestock products provided under this section.'' 7 U.S.C. 6509(g) 
(emphasis added).
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    \5\ Congress directed USDA to establish national standards 
governing the marketing of certain agricultural products as 
organically produced products; to assure consumers that organically 
produced products meet a consistent standard; and to facilitate 
interstate commerce in fresh and processed food that is organically 
produced, assure consumers that organically produced products meet a 
consistent standard, among other things. 7 U.S.C. 6501. However, 
OFPA's plain language does not mandate, and arguably limits, the 
Secretary's authority to promulgate prescriptive rules governing how 
producers meet programmatic standards. Instead, USDA believes a 
contextual reading of OFPA suggests a regulatory approach based on 
market-based solutions is more appropriate. See 7 U.S.C. 6503-11 
(setting standards); 7 U.S.C. 6509(g) (authorizing promulgation of 
regulations to ``guide implementation of standards . . .''); 7 
U.S.C. 6512 (``If a production or handling practice is not 
prohibited or otherwise restricted under this chapter, such practice 
shall be permitted unless it is determined that such practice would 
be inconsistent with the applicable organic certification 
program'').
    \6\ Compare 7 U.S.C. 6509(g) (regulations to ``guide the 
implementation of standards for livestock products'') with 7 U.S.C. 
2151 (``The Secretary is authorized to promulgate such rules, 
regulations, and orders as he may deem necessary in order to 
effectuate the purposes of this chapter''), 15 U.S.C. 1823(c) (``The 
Secretary shall prescribe by regulation requirements . . . to detect 
and diagnose a horse that is sore . . .'', and 49 U.S.C. 40103(b) 
(FAA shall ``prescribe air traffic regulations'').
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    AMS finds that its rulemaking authority in section 6509(d)(2) 
should not be construed in isolation, but rather should be interpreted 
in light of section 6509(d)(1) and section 6509(g). Furthermore, even 
if OFPA is deemed to be silent or ambiguous with respect to this issue, 
AMS believes that a decision to withdraw the OLPP final rule based on 
section 6509's language, titles, and position within Chapter 94 of 
Title 7 of the United States Code; \7\ controlling Supreme Court 
authorities; and general USDA regulatory policy, would be a permissible 
statutory construction. AMS seeks comment on this issue.
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    \7\ See Yates v. United States, 135 S. Ct. 1074, 1082 (2015).
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B. Impact of OLPP Final Rule on Producers

    AMS notes that organic producers have already made significant 
investments in facilities and infrastructure to support the growing 
organic market under the current USDA organic regulations, and there 
has been significant growth in the organic market under the existing 
regulatory regime. This suggests that the present regulatory regime is 
meeting statutory objectives of reassuring consumers of organic 
integrity and facilitating interstate commerce in organic products, 
which coincides with the growth in the organic poultry sector. From 
2007 to 2016, the organic egg market grew 12.7 percent annually which 
shows consumer confidence in the products produced under the current 
standards. The organic industry continues to grow domestically and 
globally, with USDA's Organic Integrity Database listing 24,650 
certified organic operations in the United States, and 37,032 around 
the world, at the end of 2016. The 2016 count of U.S. certified organic 
farms and businesses reflects a 13% increase between the end of 2015 
and 2016, continuing a trend of double-digit growth in the organic 
sector. The number of certified operations has continuously increased 
since the count began in 2002; the 2015-2016 increase was one of the 
highest annual increases since 2008. According to the Organic Trade 
Association's (OTA's) 2017 Organic Industry Survey, organic sales 
reached almost $47 billion in 2016, reflecting an increase of almost 
$3.7 billion above the $43 billion mark achieved in 2015.
    Furthermore, as a policy matter and a general principle, USDA is 
concerned that the OLPP final rule's prescriptive codification of 
current industry practices in the dynamic, evolving marketplace could 
have the unintended consequence of preventing or stunting future 
market-based innovation in response to rapidly evolving social and 
producer norms. Overly prescriptive regulation can discourage 
technological and social innovation, especially by small firms and 
consumers, distorting or even preventing technological development. 
Lacking evidence of the material market failure to justify prescriptive 
regulatory action, AMS is concerned that the OLPP rule may hamper 
market-driven innovation and evolution and impose unnecessary 
regulatory burdens. AMS welcomes comment on these concerns.

C. Executive Orders 12866, 13563, and 13771

    This section provides an Executive Summary of the Preliminary 
Regulatory Impact Analysis (PRIA). Copies of the full analysis are 
available on the Regulations.gov website. This rulemaking has been 
designated as an ``economically significant regulatory action'' under 
Executive Order 12866, and, therefore, has been reviewed by the Office 
of Management and Budget (OMB).
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives, and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility.
    Executive Order 13771 directs Agencies to identify at least two 
existing regulations to be repealed for every new regulation unless 
prohibited by law. The total incremental cost of all regulations issued 
in a given fiscal year must have costs within the amount of incremental 
costs allowed by the Director of the Office of Management and Budget, 
unless otherwise required by law or approved in writing by the Director 
of the Office of Management and Budget. This proposed rule is expected 
to be an E.O. 13771 deregulatory action. Details on the estimated cost 
savings of this proposed rule can be found in the rule's PRIA, posted 
separately and summarized below.
    The estimated costs in the OLPP final rule were based on three 
potential scenarios. First, if the OLPP final rule were implemented and 
if all organic livestock and poultry producers were to come into 
compliance, the estimated cost to the industry would have been $28.7 to 
$31 million each year. Second, if 50 percent of the organic egg 
producers moved to the cage-free egg market and the organic industry 
continues to grow at historical rates, the costs would be $11.7-$12.0 
million. Third, if 50 percent of the organic egg producers moved to the 
cage-free egg market and there were no new entrants that could not 
already comply, the costs would be $8.2 million. These costs do not 
include an additional $1.95-$3.9 million associated with paperwork 
burden.
    The OLPP final rule estimated the benefits from the rule's 
implementation as $4.1 to $49.5 million annually. The estimated 
benefits spanned a wider range than the estimated costs and were based 
on research that measured consumers' willingness-to-pay for outdoor 
access for laying hens. The OLPP final rule acknowledged that the 
benefits were difficult to quantify.
    In reviewing the OLPP final rule, AMS found that the calculation of 
benefits contained mathematical errors in calculating the discount 
rates of 7% and 3%. AMS also found the estimated benefits over time 
were handled differently than were the estimated costs over time. In 
addition, the range used for estimating the benefit interval could be 
replaced with more suitable estimates. The revised calculations of 
benefits are presented in the accompanying PRIA.

[[Page 59991]]

    As a result of reviewing the calculation of estimated benefits, AMS 
reassessed the economic basis for the rulemaking as well as the 
validity of the estimated benefits. On the basis of that reassessment, 
AMS finds little, if any, economic justification for the OLPP final 
rule.
    The RIA for the OLPP final rule did not identify a significant 
market failure to justify the need for rule. The RIA for the OLPP final 
rule noted that there is wide variance in production practices within 
the organic egg sector and asserted that ``as more consumers become 
aware of this disparity, they will either seek specific brands of 
organic eggs or seek animal welfare labels in addition to the USDA 
organic seal.'' AMS also found the ``majority of organic producers also 
participate in private, third-party verified animal welfare 
certification programs.'' OLPP final rule RIA (https://www.ams.usda.gov/sites/default/files/media/OLPPSupplementalDocAnalysis.pdf) at 14. Variance in production practices and 
participation in private, third-party certification programs, however, 
do not constitute evidence of significant market failure.
    First, while AMS recognizes that the purpose of the OFPA is to 
assure consumers that organically produced products meet a consistent 
and uniform standard, that purpose does not imply that there should be 
no variation in organic production practices. Rather, a variety of 
production methods may be employed to meet the same standard. Some may 
be more labor intensive and others more capital intensive, and some may 
be appropriate for small operations while others are appropriate for 
large operations. Importantly, producers will adopt different 
production methods over time as technology evolves and enables 
operations to meet the same standard more efficiently. Thus, variation 
in production practices is expected and does not stand as an indicator 
of a significant market failure.
    Second, private, third-party certification programs are common in 
the dynamic food sector. The fact that organic suppliers participate in 
such programs does not indicate a market failure with respect to the 
standards promulgated under the USDA NOP. Rather, the use of third-
party certifications in addition to the USDA organic seal merely 
indicates that participants in the food sector seek ways to 
differentiate their products from those of their competitors. The fact 
that some aspects of a private certification may overlap with the 
requirements underlying the USDA organic seal demonstrates that food 
producers, manufacturers, and retailers use multiple methods to 
communicate with consumers about the attributes of the foods that they 
produce and sell. Private, third-party certifications reflect 
attributes that food sellers wish to emphasize, and the existence of 
such certifications on organic products provides no evidence of a 
significant market failure relating to USDA organic standards.
    Notwithstanding the lack of a market failure justification for the 
OLPP final rule, the accompanying PRIA explains several calculation 
errors associated with the OLPP final rule RIA. The PRIA also provides 
additional information regarding the estimated benefits and explains 
why they likely were overstated in the OLPP final rule RIA. In any 
case, withdrawing the OLPP final rule would prevent the negative cost 
impacts from taking effect, resulting in substantial organic poultry 
producer cost savings of $8.2 to $31 million annually, plus additional 
cost savings of $1.95-$3.9 million from paperwork reduction.
Consideration of Alternatives
    AMS considered three alternatives in developing this proposed rule. 
The first alternative considered was to implement the Organic Livestock 
and Poultry Practices final rule on May 14, 2018, which is the current 
effective date. The second alternative was to further delay the final 
rule. The third alternative, which is the selected alternative, was to 
withdraw the final rule.
    For the first alternative, if the OLPP final rule were to become 
effective on May 14, 2018, the costs and transfers described in the 
PRIA would be expected to occur, resulting in requirements with 
substantial costs not supported by evidence of significant market 
failure.
    The second alternative considered was to further delay the OLPP 
final rule. This alternative, however, would defer the decision on 
whether to implement or withdraw to a future date, despite the agency 
having performed its review and received comments from the public. This 
alternative fails to achieve USDA's goal of reducing regulatory 
uncertainty.
    AMS is proposing the third alternative, to withdraw the OLPP final 
rule as the preferred alternative. This alternative estimates cost 
savings for poultry producers of $8.2 to $31 million per year (based on 
15-year costs). In addition, $1.95-$3.9 million in annual paperwork 
burden would not be incurred. As described in the PRIA, the range of 
benefits could be expected to be lower than shown in the OLPP final 
rule RIA. Moreover, a priori, the benefits associated with any 
government intervention without there being an identifiable market 
failure will be lower than the required costs of imposing such an 
intervention. Given the unclear nature of the market failure being 
addressed by the OLPP final rule, AMS would give clear preference to 
the lower end of the benefit range, which consistently fall below the 
costs associated with the OLPP final rule.

VI. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601-612) requires agencies 
to consider the economic impact of each rule on small entities and 
evaluate alternatives that would accomplish the objectives of the rule 
without unduly burdening small entities or erecting barriers that would 
restrict their ability to compete in the market.
    Data suggest nearly all organic egg producers qualify as small 
businesses. OLPP Final Rule RIA (https://www.ams.usda.gov/sites/default/files/media/OLPPSupplementalDocAnalysis.pdf) at 140-141. Small 
egg producers are listed under NAICS code 112310 (Chicken Egg 
Production) as grossing less than $15,000,000 per year, and AMS 
estimates that out of 722 operations reporting sales of organic eggs, 
only four are not small businesses. However, the RIA found that some 
small egg producers and small chicken (broiler) producers will be 
affected by the poultry outdoor access and space provisions. See OLPP 
Final Rule RIA at 136-138, 142, 145-146. Furthermore, the RIA of the 
OLPP final rule notes that some producers were particularly concerned 
about limited land availability for outdoor access requirements and the 
potential for increased mortality attendant to the new regulatory 
demands. These were identified as sources of burdensome costs and/or 
major obstacles to compliance for some small businesses. See id. at 26-
28. Based on surveys of organic egg producers, AMS believes 
approximately fifty percent of layer production will not be able to 
acquire additional land needed to comply with the OLPP final rule. Id. 
at 142. Also, certain existing certified organic slaughter facilities 
could surrender their organic certification as a result of the OLPP 
final rule and certain businesses currently providing livestock 
transport services for certified organic producers or slaughter 
facilities may be unwilling to meet and/or document compliance with the 
livestock transit requirements. Id. at 149.
    Withdrawing the OLPP final rule would avoid these economic impacts,

[[Page 59992]]

without introducing any incremental burdens or erecting barriers that 
would restrict the ability of small entities to compete in the market. 
This conclusion is supported by the historic growth of the organic 
industry without the regulatory amendments. The demand for organic food 
has continued to grow over the past ten years under the current 
regulatory regime.
    This proposed rule would relieve producers of the costs of 
complying with the Organic Livestock and Poultry Practices final rule. 
The effects would be beneficial, but not significant. A small number of 
entities may experience time and money savings as a result of not 
having to change practices to comply with the OLPP final rule. Affected 
small entities would include organic egg and organic broiler producers. 
The proposed rule would not have a significant economic impact on a 
substantial number of small entities.
    Under these circumstances, the Administrator of the Agricultural 
Marketing Service has determined that this action would not have a 
significant economic impact on a substantial number of small entities.

VII. Executive Order 12988

    Executive Order 12988 instructs each executive agency to adhere to 
certain requirements in the development of new and revised regulations 
to avoid unduly burdening the court system.
    Pursuant to section 6519(f) of OFPA, if finalized, this rule would 
not alter the authority of the Secretary under the Federal Meat 
Inspection Act (21 U.S.C. 601-624), the Poultry Products Inspection Act 
(21 U.S.C. 451-471), or the Egg Products Inspection Act (21 U.S.C. 
1031-1056), concerning meat, poultry, and egg products, nor any of the 
authorities of the Secretary of Health and Human Services under the 
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301-399) or the Public 
Health Service Act (42 U.S.C. 201-300), nor the authority of the 
Administrator of the U.S. Environmental Protection Agency under the 
Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. 136-
136(y)).

VIII. Paperwork Reduction Act

    No additional collection or recordkeeping requirements would be 
imposed on the public by withdrawing the OLPP final rule. Accordingly, 
OMB clearance is not required by the Paperwork Reduction Act of 1995 
(44 U.S.C. 3501), Chapter 35. Withdrawing the OLPP final rule will 
avoid an estimated $1.95-$3.9 million in costs for increased paperwork 
burden associated with that final rule.

IX. Executive Order 13175

    This rule has been reviewed in accordance with the requirements of 
Executive Order 13175, ``Consultation and Coordination with Indian 
Tribal Governments.'' Executive Order 13175 requires Federal agencies 
to consult and coordinate with tribes on a government-to-government 
basis on policies that have tribal implications, including regulations, 
legislative comments or proposed legislation, and other policy 
statements or actions that have substantial direct effects on one or 
more Indian tribes, on the relationship between the Federal Government 
and Indian tribes or on the distribution of power and responsibilities 
between the Federal Government and Indian tribes.
    AMS has assessed the impact of this rule on Indian tribes and 
determined that this rule would not, to our knowledge, have tribal 
implications that require tribal consultation under E.O. 13175. If a 
Tribe requests consultation, AMS will work with the Office of Tribal 
Relations to ensure meaningful consultation is provided where changes, 
additions and modifications identified herein are not expressly 
mandated by Congress.

X. Civil Rights Impact Analysis

    AMS has reviewed this draft rule in accordance with the Department 
Regulation 4300-4, Civil Rights Impact Analysis, to address any major 
civil rights impacts the rule might have on minorities, women, and 
persons with disabilities. AMS has determined that withdrawing the OLPP 
final rule would not affect producers in protected groups differently 
than the general population of producers.

XI. Conclusion

    In compliance with USDA's interpretation of the OFPA and consistent 
with USDA regulatory policy, AMS is proposing to withdraw the OLPP 
final rule.

    Dated: December 14, 2017.
Bruce Summers,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2017-27316 Filed 12-15-17; 8:45 am]
 BILLING CODE 3410-02-P



                                                 59988

                                                 Proposed Rules                                                                                                Federal Register
                                                                                                                                                               Vol. 82, No. 241

                                                                                                                                                               Monday, December 18, 2017



                                                 This section of the FEDERAL REGISTER                      Instructions: All submissions received              Pending Review’’ to USDA and other
                                                 contains notices to the public of the proposed          must include the docket number AMS–                   federal executive departments and
                                                 issuance of rules and regulations. The                  NOP–15–0012; NOP–15–06, and/or                        agencies. Accordingly, on February 9,
                                                 purpose of these notices is to give interested          Regulatory Information Number (RIN)                   2017, AMS published a notice in the
                                                 persons an opportunity to participate in the            0581–AD75 for this rulemaking. You                    Federal Register (82 FR 9967) delaying
                                                 rule making prior to the adoption of the final
                                                                                                         should clearly indicate the reason(s) for             the OLPP final rule’s effective date until
                                                 rules.
                                                                                                         your stated position. All comments                    May 19, 2017.
                                                                                                         received and any relevant background                     On May 10, 2017, AMS published two
                                                 DEPARTMENT OF AGRICULTURE                               documents will be posted without                      documents regarding the OLPP final
                                                                                                         change to http://www.regulations.gov.                 rule in the Federal Register. The first
                                                 Agricultural Marketing Service                            Document: For access to the                         document delayed the OLPP final rule’s
                                                                                                         document and to read background                       effective date until November 14, 2017
                                                 7 CFR Part 205                                          documents or comments received, go to                 (82 FR 21677). The second document
                                                                                                         http://www.regulations.gov. Comments                  presented four options for agency action
                                                 [Doc. No. AMS–NOP–15–0012; NOP–15–06]                                                                         (82 FR 21742). Interested parties were
                                                                                                         submitted in response to this proposed
                                                 RIN 0581–AD75                                           rule will also be available for viewing in            invited to submit comments on the four
                                                                                                         person at USDA–AMS, National Organic                  options on or before June 9, 2017.
                                                 National Organic Program (NOP);                         Program, Room 2642–South Building,                       On November 14, 2017, AMS
                                                 Organic Livestock and Poultry                           1400 Independence Ave. SW,                            published a final rule in the Federal
                                                 Practices—Withdrawal                                    Washington, DC, from 9 a.m. to 12 noon                Register (82 FR 52643) delaying the
                                                                                                         and from 1 p.m. to 4 p.m., Monday                     effective date of the OLPP final rule
                                                 AGENCY:  Agricultural Marketing Service,
                                                                                                         through Friday (except official Federal               until May 14, 2018 to allow AMS the
                                                 USDA.
                                                                                                         holidays). Persons wanting to visit the               opportunity to gather additional public
                                                 ACTION: Proposed rule.                                                                                        comments on important questions
                                                                                                         USDA South Building to view
                                                 SUMMARY:    This proposed rule sets forth               comments received in response to this                 regarding USDA’s statutory authority to
                                                 the U.S. Department of Agriculture’s                    proposed rule are requested to make an                promulgate the OLPP final rule and the
                                                 (USDA or Department) intention to                       appointment in advance by calling (202)               likely costs and benefits of the rule.
                                                 withdraw the Organic Livestock and                      720–3252.                                             II. Overview of Action Being
                                                 Poultry Practices (OLPP) final rule                     FOR FURTHER INFORMATION CONTACT: Paul                 Considered
                                                 published in the Federal Register on                    Lewis, Ph.D., Director, Standards                        By this notice, AMS is proposing to
                                                 January 19, 2017, by USDA’s                             Division, Telephone: (202) 720–3252;                  withdraw the OLPP final rule. See 82 FR
                                                 Agricultural Marketing Service (AMS).                   Fax: (202) 720–7808.                                  7042 (January 19, 2017). USDA has
                                                 The OLPP final rule amends the organic                  SUPPLEMENTARY INFORMATION:                            reviewed the OLPP final rule and is
                                                 livestock and poultry production                                                                              initiating this action based on the
                                                 requirements in the USDA organic                        I. Background
                                                                                                                                                               outcome of that review. Specifically,
                                                 regulations by adding new provisions                      The Organic Foods Production Act of                 USDA proposes withdrawing the OLPP
                                                 for livestock handling and transport for                1990 (OFPA), as amended (7 U.S.C.                     rule based on its current interpretation
                                                 slaughter and avian living conditions;                  6501–6522), authorizes the United                     of 7 U.S.C. 6905, under which the OLPP
                                                 and expands and clarifies existing                      States Department of Agriculture                      final rule would exceed USDA’s
                                                 requirements covering livestock care                    (USDA) to establish national standards                statutory authority. Withdrawal of the
                                                 and production practices and                            governing the marketing of certain                    OLPP rule also is independently
                                                 mammalian living conditions. The                        agricultural products as organically                  justified based upon USDA’s revised
                                                 OLPP final rule was originally set to                   produced to assure consumers that                     assessments of its benefits and burdens
                                                 take effect on March 20, 2017. The                      organically produced products meet a                  and USDA’s view of sound regulatory
                                                 effective date has been extended to May                 consistent standard and to facilitate                 policy. If this withdrawal is finalized,
                                                 14, 2018 under separate actions.                        interstate commerce in fresh and                      the existing organic livestock and
                                                 DATES: Interested persons are invited to                processed food that is organically                    poultry regulations now published at 7
                                                 submit written comments on this                         produced. USDA’s Agricultural                         CFR part 205 would remain effective.
                                                 proposed rule on or before January 17,                  Marketing Service (AMS) administers                   AMS seeks comments on the proposal to
                                                 2018.                                                   the National Organic Program (NOP)                    withdraw the OLPP final rule.
                                                 ADDRESSES: We invite you to submit                      under 7 CFR part 205.
                                                                                                           On April 13, 2016, AMS published                    III. Related Documents
                                                 comments on the proposed rule by any
                                                 of the following methods:                               the OLPP proposed rule in the Federal                    Documents related to this OLPP final
                                                    • Federal eRulemaking Portal: http://
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                                                                                                         Register (81 FR 21956).                               rule include: OFPA (7 U.S.C. 6501—
                                                 www.regulations.gov. Follow the                           On January 19, 2017, AMS published                  6524) and its implementing regulations
                                                 instructions for submitting comments.                   the OLPP final rule in the Federal                    (7 CFR part 205); the Organic Livestock
                                                    • Mail: Paul Lewis, Ph.D., Director,                 Register (82 FR 7042). This rule was                  and Poultry Practices proposed rule
                                                 Standards Division, National Organic                    scheduled to take effect on March 20,                 published in the Federal Register on
                                                 Program, USDA–AMS–NOP, 1400                             2017.                                                 April 13, 2016 (81 FR 21956); the OLPP
                                                 Independence Ave. SW, Room 2642–                          On January 20, 2017, the Assistant to               final rule published in the Federal
                                                 So., Ag Stop 0268, Washington, DC                       the President and Chief of Staff sent a               Register on January 19, 2017 (82 FR
                                                 20250–0268.                                             memorandum titled ‘‘Regulatory Freeze                 7042); the final rule delaying the OLPP


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                                                                      Federal Register / Vol. 82, No. 241 / Monday, December 18, 2017 / Proposed Rules                                                      59989

                                                 final rule’s effective date until May 19,               the National Organic Program must treat                      USDA believes 7 U.S.C. 6509 is the
                                                 2017, published by AMS in the Federal                   livestock and poultry to ensure their                     relevant authority for OFPA-related
                                                 Register on February 9, 2017 (82 FR                     wellbeing (82 FR 7042). AMS is                            regulations governing animal
                                                 9967); the final rule delaying the OLPP                 proposing to withdraw the OLPP final                      production practices. USDA further
                                                 final rule’s effective date until                       rule because it now believes OFPA does                    believes that it should adhere to this
                                                 November 14, 2017, published by AMS                     not authorize the animal welfare                          legislative text and that it lacks the
                                                 in the Federal Register on May 10, 2017                 provisions of the OLPP final rule.                        power to tailor legislation to policy
                                                 (82 FR 21677); a second proposed rule                   Rather, the agency’s current reading of                   goals, however worthy, by rewriting
                                                 presenting the four options for agency                  the statute, given the relevant language                  unambiguous statutory terms. Rather,
                                                 action listed in Section I, supra,                      and context, suggests OFPA’s reference                    USDA believes it may properly exercise
                                                 published by AMS in the Federal                         to additional regulatory standards ‘‘for                  discretion only in the interstices created
                                                 Register on May 10, 2017 (82 FR 21742);                 the care’’ of organically produced                        by statutory silence or ambiguity and
                                                 and a final rule further delaying the                   livestock should be limited to health                     must always give effect to the
                                                 OLPP final rule’s effective date until                  care practices similar to those specified                 unambiguously expressed intent of
                                                 May 14, 2018, published by AMS in the                   by Congress in the statute, rather than                   Congress.4
                                                 Federal Register on November 14, 2017                   expanded to encompass stand-alone                            The OLPP final rule is a broadly
                                                 (82 FR 52643).                                          animal welfare concerns. 7 U.S.C.                         prescriptive animal welfare regulation
                                                                                                         6509(d)(2).                                               governing outdoor access and space,
                                                 IV. Legal Authority                                                                                               transport, and slaughter, among other
                                                                                                            USDA believes that the Department’s
                                                   The basis for the proposed                            power to act and how it may act are                       things. (82 FR 7042, 7074, 7082).
                                                 withdrawal of the OLPP final rule is                    authoritatively prescribed by statutory                   USDA’s general OFPA implementing
                                                 USDA’s current interpretation of OFPA,                  language and context; USDA believes                       authority was used as justification for
                                                 which is discussed in this notice and                   that it may not lawfully regulate outside                 the OLPP final rule, which cited 7
                                                 USDA’s revised assessment of the                        the boundaries of legislative text.2                      U.S.C. 6509(g) as ‘‘convey(ing) the
                                                 regulatory benefits and burdens of the                  Therefore, in considering the scope of                    intent for the USDA to develop more
                                                 OLPP rule.1 USDA invites comment                        its lawful authority, USDA believes the                   specific standards. . . .’’ (82 FR 7043),
                                                 generally on the regulatory and other                   threshold question should be whether                      and 7 U.S.C. 6509(d)(2) as authorizing
                                                 policy implications of the legal                        Congress has authorized the proposed                      regulations for animal ‘‘wellbeing’’ and
                                                 interpretation of OFPA proposed in this                 action. If, however, a statute is silent or               the ‘‘care of livestock.’’ (82 FR 7042,
                                                 action.                                                                                                           7074, 7082).
                                                                                                         ambiguous with respect to a specific
                                                   OFPA is the statutory authority for the                                                                            But nothing in Section 6509
                                                                                                         issue, then USDA believes that its
                                                 OLPP final rule as well as for this                                                                               authorizes the broadly prescriptive,
                                                 rulemaking. AMS believes that                           interpretation is entitled to deference
                                                                                                                                                                   stand-alone animal welfare regulations
                                                 withdrawing the Organic Livestock and                   and the question becomes simply
                                                                                                                                                                   contained in the OLPP final rule.5
                                                 Poultry Practices final rule is                         whether USDA’s action is based on a
                                                                                                                                                                   Rather, section 6509 authorizes USDA
                                                 appropriate in light of its interpretation              permissible statutory construction.3
                                                                                                                                                                   to regulate with respect to discrete
                                                 of the scope of authority granted to                       2 City of Arlington v. FCC, 133 S. Ct. 1863, 1868      aspects of animal production practices
                                                 USDA by OFPA and to maintain                            (2013).                                                   and materials: Breeder stock, feed and
                                                 consistency with USDA regulatory                           3 See Chevron, U.S.A., 467 U.S. at 843; City of        growth promoters, animal health care,
                                                 policy principles. If this proposed rule                Arlington, 133 S. Ct. at 1871. USDA believes that         forage, and record-keeping. Section
                                                 to withdraw is finalized, the existing                  fidelity to the Constitution and to the rule of law       6509(d) is titled ‘‘Health Care.’’
                                                                                                         are better served when regulatory authority is firmly
                                                 organic livestock and poultry                           grounded in plain statutory text. Id. at 1876 (Scalia,
                                                 regulations now published at 7 CFR part                 J.) (‘‘The fox-in-the-henhouse syndrome is to be          U.S.C. 40103(b) (FAA shall ‘‘prescribe air traffic
                                                 205 would remain effective.                             avoided. . . . by taking seriously, and applying          regulations’’); see generally Cuzzo Speed
                                                                                                         rigorously, in all cases, statutory limits on agencies’   Technologies, LLC v. Lee, 136 S. Ct. 2131, 2142–43
                                                 V. Rationale for Withdrawing Organic                    authority’’) (emphasis added); id. at 1879 (Roberts,      (2016); City of Arlington, 133 S. Ct. at 1868.
                                                 Livestock and Poultry Practices OLPP                    CJ., dissenting) (‘‘the danger posed by the growing          4 See generally Utility Air Regulatory Group v.

                                                 Final Rule                                              administrative state cannot be dismissed’’);              Environmental Protection Agency, 134 S. Ct. 2427,
                                                                                                         Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S.           2441, 2445–46 (2014) (citations omitted).
                                                   This section provides AMS’ primary                    579, 593–94 (1952) (Frankfurter, J., concurring)             5 Congress directed USDA to establish national

                                                 reasons for proposing to withdraw the                   (‘‘The accretion of dangerous power does not come         standards governing the marketing of certain
                                                 OLPP final rule.                                        in a day. . . . [but] slowly, from the generative         agricultural products as organically produced
                                                                                                         force of unchecked disregard of the restrictions that     products; to assure consumers that organically
                                                 A. Authority Under the OFPA To Issue                    fence in even the most disinterested assertion of         produced products meet a consistent standard; and
                                                                                                         authority’’); FTC v. Ruberoid Co., 343 U.S. 470, 487      to facilitate interstate commerce in fresh and
                                                 Animal Welfare Regulations                              (1952) (Jackson, J., dissenting) (the administrative      processed food that is organically produced, assure
                                                   The OLPP final rule consisted, in                     state ‘‘has deranged our three-branch legal               consumers that organically produced products meet
                                                 large part, of rules clarifying how                     theories’’). USDA generally believes that it may          a consistent standard, among other things. 7 U.S.C.
                                                                                                         promulgate rules that are reasonable in light of the      6501. However, OFPA’s plain language does not
                                                 producers and handlers participating in                 text, nature, and purpose of the relevant statute in      mandate, and arguably limits, the Secretary’s
                                                                                                         cases of gaps or ambiguity. United States v. Mead         authority to promulgate prescriptive rules
                                                   1 USDA’s legal authority to revisit the OLPP final    Corp., 533 U.S. 218, 229 (2001). However, USDA            governing how producers meet programmatic
                                                 rule is well-established. As an initial matter,         also believes Congress knows to speak in plain            standards. Instead, USDA believes a contextual
                                                 agencies have broad discretion to reconsider a          terms when it wishes to circumscribe, and in              reading of OFPA suggests a regulatory approach
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                                                 regulation at any time. Clean Air Council v. Pruitt,    capacious terms when it wishes to enlarge, USDA’s         based on market-based solutions is more
                                                 862 F.3d 1, 8–9 (DC Cir. 2017). Furthermore,            discretion. Compare 7 U.S.C. 6509(g), with 7 U.S.C.       appropriate. See 7 U.S.C. 6503–11 (setting
                                                 USDA’s interpretation of OFPA ‘‘is not instantly        2151 (‘‘The Secretary is authorized to promulgate         standards); 7 U.S.C. 6509(g) (authorizing
                                                 carved in stone,’’ but may be evaluated ‘‘on a          such rules, regulations, and orders as he may deem        promulgation of regulations to ‘‘guide
                                                 continuing basis.’’ Chevron U.S.A. Inc. v. NRDC,        necessary in order to effectuate the purposes of this     implementation of standards . . .’’); 7 U.S.C. 6512
                                                 Inc., 467 U.S. 837, 863–64 (1984). This is true         chapter’’), 15 U.S.C. 1823(c) (‘‘The Secretary shall      (‘‘If a production or handling practice is not
                                                 when, as is the case here, the agency’s review is       prescribe by regulation requirements . . . to detect      prohibited or otherwise restricted under this
                                                 undertaken in response to a change in                   and diagnose a horse that is sore . . .’’), 35 U.S.C.     chapter, such practice shall be permitted unless it
                                                 administrations. National Cable &                       316(a)(4) (the Patent Office has the authority to         is determined that such practice would be
                                                 Telecommunications Ass’n v. Brand X Internet            issue ‘‘regulations . . . establishing and governing      inconsistent with the applicable organic
                                                 Services, 545 U.S. 967, 981 (2005).                     inter parties review under this chapter’’), and 49        certification program’’).



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                                                 59990                 Federal Register / Vol. 82, No. 241 / Monday, December 18, 2017 / Proposed Rules

                                                 Subsection 6509(d)(1) identifies                         annually which shows consumer                        effects, distributive impacts, and
                                                 prohibited health care practices,                        confidence in the products produced                  equity). Executive Order 13563
                                                 including subtherapeutic doses of                        under the current standards. The                     emphasizes the importance of
                                                 antibiotics; routine synthetic internal                  organic industry continues to grow                   quantifying both costs and benefits,
                                                 parasiticides; and medication, other                     domestically and globally, with USDA’s               reducing costs, harmonizing rules, and
                                                 than vaccinations, absent illness.                       Organic Integrity Database listing 24,650            promoting flexibility.
                                                 Reading the plain language in context,                   certified organic operations in the                     Executive Order 13771 directs
                                                 AMS now believes that the authority                      United States, and 37,032 around the                 Agencies to identify at least two existing
                                                 granted in section 6509(g) for the                       world, at the end of 2016. The 2016                  regulations to be repealed for every new
                                                 Secretary to issue regulations fairly                    count of U.S. certified organic farms and            regulation unless prohibited by law. The
                                                 extends only to those aspects of animal                  businesses reflects a 13% increase                   total incremental cost of all regulations
                                                 care that are similar to those described                 between the end of 2015 and 2016,                    issued in a given fiscal year must have
                                                 in section 6509(d)(1) and that are shown                 continuing a trend of double-digit                   costs within the amount of incremental
                                                 to be necessary to meet the                              growth in the organic sector. The                    costs allowed by the Director of the
                                                 congressional objectives specified in 7                  number of certified operations has                   Office of Management and Budget,
                                                 U.S.C. 6501.6 The Secretary’s authority                  continuously increased since the count               unless otherwise required by law or
                                                 to promulgate rules under section                        began in 2002; the 2015–2016 increase                approved in writing by the Director of
                                                 6509(g) is similarly circumscribed: He                   was one of the highest annual increases              the Office of Management and Budget.
                                                 may ‘‘develop detailed regulations’’                     since 2008. According to the Organic                 This proposed rule is expected to be an
                                                 only to ‘‘guide the implementation of                    Trade Association’s (OTA’s) 2017                     E.O. 13771 deregulatory action. Details
                                                 the standards for livestock products                     Organic Industry Survey, organic sales               on the estimated cost savings of this
                                                 provided under this section.’’ 7 U.S.C.                  reached almost $47 billion in 2016,                  proposed rule can be found in the rule’s
                                                 6509(g) (emphasis added).                                reflecting an increase of almost $3.7                PRIA, posted separately and
                                                   AMS finds that its rulemaking                          billion above the $43 billion mark                   summarized below.
                                                 authority in section 6509(d)(2) should                   achieved in 2015.                                       The estimated costs in the OLPP final
                                                 not be construed in isolation, but rather                  Furthermore, as a policy matter and a              rule were based on three potential
                                                 should be interpreted in light of section                general principle, USDA is concerned                 scenarios. First, if the OLPP final rule
                                                 6509(d)(1) and section 6509(g).                          that the OLPP final rule’s prescriptive              were implemented and if all organic
                                                 Furthermore, even if OFPA is deemed to                   codification of current industry                     livestock and poultry producers were to
                                                 be silent or ambiguous with respect to                   practices in the dynamic, evolving
                                                                                                                                                               come into compliance, the estimated
                                                 this issue, AMS believes that a decision                 marketplace could have the unintended
                                                                                                                                                               cost to the industry would have been
                                                 to withdraw the OLPP final rule based                    consequence of preventing or stunting
                                                                                                                                                               $28.7 to $31 million each year. Second,
                                                 on section 6509’s language, titles, and                  future market-based innovation in
                                                                                                                                                               if 50 percent of the organic egg
                                                 position within Chapter 94 of Title 7 of                 response to rapidly evolving social and
                                                                                                                                                               producers moved to the cage-free egg
                                                 the United States Code; 7 controlling                    producer norms. Overly prescriptive
                                                                                                                                                               market and the organic industry
                                                 Supreme Court authorities; and general                   regulation can discourage technological
                                                                                                                                                               continues to grow at historical rates, the
                                                 USDA regulatory policy, would be a                       and social innovation, especially by
                                                                                                                                                               costs would be $11.7–$12.0 million.
                                                 permissible statutory construction. AMS                  small firms and consumers, distorting or
                                                                                                                                                               Third, if 50 percent of the organic egg
                                                 seeks comment on this issue.                             even preventing technological
                                                                                                          development. Lacking evidence of the                 producers moved to the cage-free egg
                                                 B. Impact of OLPP Final Rule on                                                                               market and there were no new entrants
                                                                                                          material market failure to justify
                                                 Producers                                                                                                     that could not already comply, the costs
                                                                                                          prescriptive regulatory action, AMS is
                                                   AMS notes that organic producers                       concerned that the OLPP rule may                     would be $8.2 million. These costs do
                                                 have already made significant                            hamper market-driven innovation and                  not include an additional $1.95–$3.9
                                                 investments in facilities and                            evolution and impose unnecessary                     million associated with paperwork
                                                 infrastructure to support the growing                    regulatory burdens. AMS welcomes                     burden.
                                                 organic market under the current USDA                    comment on these concerns.                              The OLPP final rule estimated the
                                                 organic regulations, and there has been                                                                       benefits from the rule’s implementation
                                                 significant growth in the organic market                 C. Executive Orders 12866, 13563, and                as $4.1 to $49.5 million annually. The
                                                 under the existing regulatory regime.                    13771                                                estimated benefits spanned a wider
                                                 This suggests that the present regulatory                   This section provides an Executive                range than the estimated costs and were
                                                 regime is meeting statutory objectives of                Summary of the Preliminary Regulatory                based on research that measured
                                                 reassuring consumers of organic                          Impact Analysis (PRIA). Copies of the                consumers’ willingness-to-pay for
                                                 integrity and facilitating interstate                    full analysis are available on the                   outdoor access for laying hens. The
                                                 commerce in organic products, which                      Regulations.gov website. This                        OLPP final rule acknowledged that the
                                                 coincides with the growth in the organic                 rulemaking has been designated as an                 benefits were difficult to quantify.
                                                 poultry sector. From 2007 to 2016, the                   ‘‘economically significant regulatory                   In reviewing the OLPP final rule,
                                                 organic egg market grew 12.7 percent                     action’’ under Executive Order 12866,                AMS found that the calculation of
                                                                                                          and, therefore, has been reviewed by the             benefits contained mathematical errors
                                                    6 Compare 7 U.S.C. 6509(g) (regulations to ‘‘guide    Office of Management and Budget                      in calculating the discount rates of 7%
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                                                 the implementation of standards for livestock            (OMB).                                               and 3%. AMS also found the estimated
                                                 products’’) with 7 U.S.C. 2151 (‘‘The Secretary is          Executive Orders 12866 and 13563                  benefits over time were handled
                                                 authorized to promulgate such rules, regulations,
                                                 and orders as he may deem necessary in order to          direct agencies to assess all costs and              differently than were the estimated costs
                                                 effectuate the purposes of this chapter’’), 15 U.S.C.    benefits of available regulatory                     over time. In addition, the range used
                                                 1823(c) (‘‘The Secretary shall prescribe by              alternatives, and, if regulation is                  for estimating the benefit interval could
                                                 regulation requirements . . . to detect and diagnose     necessary, to select regulatory                      be replaced with more suitable
                                                 a horse that is sore . . .’’, and 49 U.S.C. 40103(b)
                                                 (FAA shall ‘‘prescribe air traffic regulations’’).       approaches that maximize net benefits                estimates. The revised calculations of
                                                    7 See Yates v. United States, 135 S. Ct. 1074, 1082   (including potential economic,                       benefits are presented in the
                                                 (2015).                                                  environmental, public health and safety              accompanying PRIA.


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                                                                      Federal Register / Vol. 82, No. 241 / Monday, December 18, 2017 / Proposed Rules                                           59991

                                                    As a result of reviewing the                         manufacturers, and retailers use                      RIA. Moreover, a priori, the benefits
                                                 calculation of estimated benefits, AMS                  multiple methods to communicate with                  associated with any government
                                                 reassessed the economic basis for the                   consumers about the attributes of the                 intervention without there being an
                                                 rulemaking as well as the validity of the               foods that they produce and sell.                     identifiable market failure will be lower
                                                 estimated benefits. On the basis of that                Private, third-party certifications reflect           than the required costs of imposing such
                                                 reassessment, AMS finds little, if any,                 attributes that food sellers wish to                  an intervention. Given the unclear
                                                 economic justification for the OLPP                     emphasize, and the existence of such                  nature of the market failure being
                                                 final rule.                                             certifications on organic products                    addressed by the OLPP final rule, AMS
                                                    The RIA for the OLPP final rule did                  provides no evidence of a significant                 would give clear preference to the lower
                                                 not identify a significant market failure               market failure relating to USDA organic               end of the benefit range, which
                                                 to justify the need for rule. The RIA for               standards.                                            consistently fall below the costs
                                                 the OLPP final rule noted that there is                    Notwithstanding the lack of a market               associated with the OLPP final rule.
                                                 wide variance in production practices                   failure justification for the OLPP final
                                                 within the organic egg sector and                       rule, the accompanying PRIA explains                  VI. Regulatory Flexibility Act
                                                 asserted that ‘‘as more consumers                       several calculation errors associated                    The Regulatory Flexibility Act (5
                                                 become aware of this disparity, they                    with the OLPP final rule RIA. The PRIA                U.S.C. 601–612) requires agencies to
                                                 will either seek specific brands of                     also provides additional information                  consider the economic impact of each
                                                 organic eggs or seek animal welfare                     regarding the estimated benefits and                  rule on small entities and evaluate
                                                 labels in addition to the USDA organic                  explains why they likely were                         alternatives that would accomplish the
                                                 seal.’’ AMS also found the ‘‘majority of                overstated in the OLPP final rule RIA.                objectives of the rule without unduly
                                                 organic producers also participate in                   In any case, withdrawing the OLPP final               burdening small entities or erecting
                                                 private, third-party verified animal                    rule would prevent the negative cost                  barriers that would restrict their ability
                                                 welfare certification programs.’’ OLPP                  impacts from taking effect, resulting in              to compete in the market.
                                                 final rule RIA (https://                                substantial organic poultry producer                     Data suggest nearly all organic egg
                                                 www.ams.usda.gov/sites/default/files/                   cost savings of $8.2 to $31 million                   producers qualify as small businesses.
                                                 media/OLPPSupplemental                                  annually, plus additional cost savings of             OLPP Final Rule RIA (https://
                                                 DocAnalysis.pdf) at 14. Variance in                     $1.95–$3.9 million from paperwork                     www.ams.usda.gov/sites/default/files/
                                                 production practices and participation                  reduction.                                            media/OLPPSupplemental
                                                 in private, third-party certification                                                                         DocAnalysis.pdf) at 140–141. Small egg
                                                                                                         Consideration of Alternatives                         producers are listed under NAICS code
                                                 programs, however, do not constitute
                                                 evidence of significant market failure.                    AMS considered three alternatives in               112310 (Chicken Egg Production) as
                                                    First, while AMS recognizes that the                 developing this proposed rule. The first              grossing less than $15,000,000 per year,
                                                 purpose of the OFPA is to assure                        alternative considered was to                         and AMS estimates that out of 722
                                                 consumers that organically produced                     implement the Organic Livestock and                   operations reporting sales of organic
                                                 products meet a consistent and uniform                  Poultry Practices final rule on May 14,               eggs, only four are not small businesses.
                                                 standard, that purpose does not imply                   2018, which is the current effective                  However, the RIA found that some small
                                                 that there should be no variation in                    date. The second alternative was to                   egg producers and small chicken
                                                 organic production practices. Rather, a                 further delay the final rule. The third               (broiler) producers will be affected by
                                                 variety of production methods may be                    alternative, which is the selected                    the poultry outdoor access and space
                                                 employed to meet the same standard.                     alternative, was to withdraw the final                provisions. See OLPP Final Rule RIA at
                                                 Some may be more labor intensive and                    rule.                                                 136–138, 142, 145–146. Furthermore,
                                                 others more capital intensive, and some                    For the first alternative, if the OLPP             the RIA of the OLPP final rule notes that
                                                 may be appropriate for small operations                 final rule were to become effective on                some producers were particularly
                                                 while others are appropriate for large                  May 14, 2018, the costs and transfers                 concerned about limited land
                                                 operations. Importantly, producers will                 described in the PRIA would be                        availability for outdoor access
                                                 adopt different production methods                      expected to occur, resulting in                       requirements and the potential for
                                                 over time as technology evolves and                     requirements with substantial costs not               increased mortality attendant to the new
                                                 enables operations to meet the same                     supported by evidence of significant                  regulatory demands. These were
                                                 standard more efficiently. Thus,                        market failure.                                       identified as sources of burdensome
                                                 variation in production practices is                       The second alternative considered                  costs and/or major obstacles to
                                                 expected and does not stand as an                       was to further delay the OLPP final rule.             compliance for some small businesses.
                                                 indicator of a significant market failure.              This alternative, however, would defer                See id. at 26–28. Based on surveys of
                                                    Second, private, third-party                         the decision on whether to implement                  organic egg producers, AMS believes
                                                 certification programs are common in                    or withdraw to a future date, despite the             approximately fifty percent of layer
                                                 the dynamic food sector. The fact that                  agency having performed its review and                production will not be able to acquire
                                                 organic suppliers participate in such                   received comments from the public.                    additional land needed to comply with
                                                 programs does not indicate a market                     This alternative fails to achieve USDA’s              the OLPP final rule. Id. at 142. Also,
                                                 failure with respect to the standards                   goal of reducing regulatory uncertainty.              certain existing certified organic
                                                 promulgated under the USDA NOP.                            AMS is proposing the third                         slaughter facilities could surrender their
                                                 Rather, the use of third-party                          alternative, to withdraw the OLPP final               organic certification as a result of the
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                                                 certifications in addition to the USDA                  rule as the preferred alternative. This               OLPP final rule and certain businesses
                                                 organic seal merely indicates that                      alternative estimates cost savings for                currently providing livestock transport
                                                 participants in the food sector seek ways               poultry producers of $8.2 to $31 million              services for certified organic producers
                                                 to differentiate their products from                    per year (based on 15-year costs). In                 or slaughter facilities may be unwilling
                                                 those of their competitors. The fact that               addition, $1.95–$3.9 million in annual                to meet and/or document compliance
                                                 some aspects of a private certification                 paperwork burden would not be                         with the livestock transit requirements.
                                                 may overlap with the requirements                       incurred. As described in the PRIA, the               Id. at 149.
                                                 underlying the USDA organic seal                        range of benefits could be expected to be                Withdrawing the OLPP final rule
                                                 demonstrates that food producers,                       lower than shown in the OLPP final rule               would avoid these economic impacts,


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                                                 59992                Federal Register / Vol. 82, No. 241 / Monday, December 18, 2017 / Proposed Rules

                                                 without introducing any incremental                     IX. Executive Order 13175                             DEPARTMENT OF ENERGY
                                                 burdens or erecting barriers that would
                                                 restrict the ability of small entities to                 This rule has been reviewed in                      10 CFR Part 430
                                                 compete in the market. This conclusion                  accordance with the requirements of
                                                 is supported by the historic growth of                  Executive Order 13175, ‘‘Consultation                 Procedures, Interpretations, and
                                                 the organic industry without the                        and Coordination with Indian Tribal                   Policies for Consideration of New or
                                                 regulatory amendments. The demand                       Governments.’’ Executive Order 13175                  Revised Energy Conservation
                                                 for organic food has continued to grow                  requires Federal agencies to consult and              Standards for Consumer Products
                                                 over the past ten years under the current               coordinate with tribes on a government-               AGENCY:   Office of Energy Efficiency and
                                                 regulatory regime.                                      to-government basis on policies that                  Renewable Energy, Department of
                                                    This proposed rule would relieve                     have tribal implications, including                   Energy.
                                                 producers of the costs of complying                     regulations, legislative comments or
                                                 with the Organic Livestock and Poultry                                                                        ACTION: Request for information and
                                                                                                         proposed legislation, and other policy
                                                 Practices final rule. The effects would                                                                       notification of public meeting.
                                                                                                         statements or actions that have
                                                 be beneficial, but not significant. A                   substantial direct effects on one or more
                                                 small number of entities may experience                                                                       SUMMARY:    As part of its implementation
                                                                                                         Indian tribes, on the relationship                    of, ‘‘Reducing Regulation and
                                                 time and money savings as a result of
                                                                                                         between the Federal Government and                    Controlling Regulatory Costs,’’ (January
                                                 not having to change practices to
                                                 comply with the OLPP final rule.                        Indian tribes or on the distribution of               30, 2017) and, ‘‘Enforcing the
                                                 Affected small entities would include                   power and responsibilities between the                Regulatory Reform Agenda,’’ (Feb. 24,
                                                 organic egg and organic broiler                         Federal Government and Indian tribes.                 2017), the Department of Energy (DOE)
                                                 producers. The proposed rule would not                    AMS has assessed the impact of this                 is seeking comments and information
                                                 have a significant economic impact on                   rule on Indian tribes and determined                  from interested parties to assist DOE in
                                                 a substantial number of small entities.                 that this rule would not, to our                      identifying potential modifications to its
                                                    Under these circumstances, the                       knowledge, have tribal implications that              ‘‘Process Rule’’ for the development of
                                                 Administrator of the Agricultural                       require tribal consultation under E.O.                appliance standards to achieve
                                                 Marketing Service has determined that                                                                         meaningful burden reduction while
                                                                                                         13175. If a Tribe requests consultation,
                                                 this action would not have a significant                                                                      continuing to achieve the Department’s
                                                                                                         AMS will work with the Office of Tribal
                                                 economic impact on a substantial                                                                              statutory obligations in the development
                                                                                                         Relations to ensure meaningful                        of appliance standards. DOE will also
                                                 number of small entities.                               consultation is provided where changes,               hold a public meeting to receive input
                                                 VII. Executive Order 12988                              additions and modifications identified                from interested parties on potential
                                                    Executive Order 12988 instructs each                 herein are not expressly mandated by                  improvements to the ‘‘Process Rule’’.
                                                 executive agency to adhere to certain                   Congress.                                             This RFI is the first in a series of steps
                                                 requirements in the development of new                  X. Civil Rights Impact Analysis                       DOE is taking to consider modifications
                                                 and revised regulations to avoid unduly                                                                       to the ‘‘Process Rule.’’ Subsequently,
                                                 burdening the court system.                                AMS has reviewed this draft rule in                DOE expects to expeditiously publish
                                                    Pursuant to section 6519(f) of OFPA,                 accordance with the Department                        an ANPRM that will provide feedback
                                                 if finalized, this rule would not alter the             Regulation 4300–4, Civil Rights Impact                on the public comment received in
                                                 authority of the Secretary under the                    Analysis, to address any major civil                  response to this notice and seek
                                                 Federal Meat Inspection Act (21 U.S.C.                  rights impacts the rule might have on                 additional information on potential
                                                 601–624), the Poultry Products                          minorities, women, and persons with                   improvements to our process for
                                                 Inspection Act (21 U.S.C. 451–471), or                  disabilities. AMS has determined that                 developing and promulgating energy
                                                 the Egg Products Inspection Act (21                     withdrawing the OLPP final rule would                 efficiency standards.
                                                 U.S.C. 1031–1056), concerning meat,                     not affect producers in protected groups              DATES: Written comments and
                                                 poultry, and egg products, nor any of                   differently than the general population               information are requested on or before
                                                 the authorities of the Secretary of Health                                                                    February 16, 2018. A public meeting
                                                                                                         of producers.
                                                 and Human Services under the Federal                                                                          will be held on January 9, 2018.
                                                 Food, Drug, and Cosmetic Act (21 U.S.C.                 XI. Conclusion
                                                                                                                                                               ADDRESSES: The public meeting will
                                                 301–399) or the Public Health Service
                                                 Act (42 U.S.C. 201–300), nor the                          In compliance with USDA’s                           begin at 9:30 a.m., at the U.S.
                                                 authority of the Administrator of the                   interpretation of the OFPA and                        Department of Energy, Forrestal
                                                 U.S. Environmental Protection Agency                    consistent with USDA regulatory policy,               Building, Room 8E–089, 1000
                                                 under the Federal Insecticide,                          AMS is proposing to withdraw the                      Independence Avenue SW, Washington,
                                                 Fungicide, and Rodenticide Act (7                       OLPP final rule.                                      DC 20585.
                                                 U.S.C. 136–136(y)).                                                                                              Interested persons are encouraged to
                                                                                                           Dated: December 14, 2017.                           submit comments, identified by
                                                 VIII. Paperwork Reduction Act                           Bruce Summers,                                        ‘‘Process Rule RFI,’’ by any of the
                                                   No additional collection or                           Acting Administrator, Agricultural Marketing          following methods:
                                                 recordkeeping requirements would be                     Service.                                                 • Federal eRulemaking Portal: http://
                                                                                                                                                               www.regulations.gov. Follow the
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                                                 imposed on the public by withdrawing                    [FR Doc. 2017–27316 Filed 12–15–17; 8:45 am]
                                                 the OLPP final rule. Accordingly, OMB                   BILLING CODE 3410–02–P                                instructions for submitting comments.
                                                 clearance is not required by the                                                                                 • Email: Regulatory.Review@
                                                 Paperwork Reduction Act of 1995 (44                                                                           hq.doe.gov. Include ‘‘Process Rule RFI’’
                                                 U.S.C. 3501), Chapter 35. Withdrawing                                                                         in the subject line of the message.
                                                 the OLPP final rule will avoid an                                                                                • Mail: U.S. Department of Energy,
                                                 estimated $1.95–$3.9 million in costs                                                                         Office of the General Counsel, 1000
                                                 for increased paperwork burden                                                                                Independence Avenue SW, Room
                                                 associated with that final rule.                                                                              6A245, Washington, DC 20585.


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Document Created: 2017-12-15 23:54:56
Document Modified: 2017-12-15 23:54:56
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionProposed Rules
ActionProposed rule.
DatesInterested persons are invited to submit written comments on this proposed rule on or before January 17, 2018.
ContactPaul Lewis, Ph.D., Director, Standards Division, Telephone: (202) 720-3252; Fax: (202) 720-7808.
FR Citation82 FR 59988 
RIN Number0581-AD75

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