Daily Rules, Proposed Rules, and Notices of the Federal Government
The Grain Inspection, Packers and Stockyards Administration (GIPSA) is responsible for maintaining the Swine Contract Library, which is authorized by the Livestock Mandatory Reporting (LMR) Act of 1999, and requires that certain packers submit hog procurement contracts and delivery estimates to GIPSA. The Swine Contract Library was reauthorized by Congress on October 5, 2006 through 2010. On September 28, 2010, the Mandatory Price Reporting Act of 2010 reauthorized LMR for an additional 5 years.
Packers are required to report information for individual plants even in instanceswhen a given packer owned or used more than one plant. The information collectionburden estimate provided below is based on time and cost requirements at the plantlevel. Consequently, packers that report for more than one plant would bear a cost thatwould be a multiple of the per-plant estimates.
We understand from discussions with packers complying with current reportingrequirements that reporting packers have adapted pre-existing data and informationsystems to provide the required information.
There are two types of information collections required for the Swine ContractLibrary.
The first information collection requirement consists of submitting examplecontracts. Initially, a packer submits example contracts currently in effect or available foreach swine processing plant that is subject to the regulations. Subsequently, a packersubmits example contracts for any offered, new, or amended contracts that vary frompreviously submitted contracts in regard to the base price determination, the applicationof a ledger or accrual account, carcass merit premium and discount schedules (includingthe determination of the lean percent or other merits of the carcass that is used todetermine the amount of the premiums and discounts and how those premiums anddiscounts are applied), or the use and amount of noncarcass merit premiums or discounts.The initial submission of example contracts requires more time than subsequent filings ofnew contracts or changes, as packers initially need to review all their contracts to identifythe unique types that need to be represented by an example submitted to GIPSA.
Thereafter, subsequent filings require a minimal amount of effort on the part ofpackers, as only example contracts that represent a new or different type need to be filedwith GIPSA. P&SP-342 must accompany each contract submission to identify thecontract, the plan for which the contract is valid, and the contact person.
The required submission of contracts includes both written and verbal contracts.Packers have added documentation of verbal contracts to their existing recordkeepingsystems in order to comply with this requirement. The optional form that is available, butnot required, for reporting verbal contracts is used by 10 packers; 2 packers that relyheavily on verbal contracts use this optional form exclusively to document their verbalcontracts. Of 1,022 contracts files on file, the optional verbal contract sheet was used todocument 245 verbal contracts.
The second information collection requirement is a monthly filing of summaryinformation on form P&SP 341, Monthly Report: Estimates of Swine To Be DeliveredUnder Contract. The form for the monthly filing is simple and brief. Fornew packers required to start reporting, this data should be available in the packers'existing record system. Electronic submission is encouraged and we provide thenecessary information on procedures to submit data to GIPSA electronically. In 2011,50 percent of monthly reports were submitted through the Web site, with the remaining50 percent submitted by facsimile or mail.
The estimates of time requirements used for the burden estimates below weredeveloped in consultation with GIPSA personnel knowledgeable of the industry'srecordkeeping practices. The estimates also reflect our experience in assembling largeamount of data during the course of numerous investigations involving use of datacollected from the industry. Estimates of time requirements and hourly wage costs fordeveloping electronic recordkeeping and reporting systems are based on our experience indeveloping similar systems in consultation with our automated information systems staff.
Thereafter, 64.5 total hours annually for all subsequent filing of examples foroffered contracts and for amended existing or available contracts by all plants combines,based on an average of 6 offered or amended existing or available contracts annually.Calculated as follows: 0.25 hours per contract × 6 example contracts per plant × 43 plants= 64.5 hours.
Total Cost: Initial filing $138 for all plants combined. Calculated as follows: 5.5hours × $25 per hour = $138.
Thereafter, $1,613 annually for all plants combined for submission of subsequentfilings. Calculated as follows: 64.5 hours × $25 per hour = $1,613.
516 hours for all plants combined provided all plants use electronic compiling,preparation, and submission. Calculated as follows: 1 hour per response × 43 plants × 12responses per plant = 516 hours.
Total Cost: $25,800 annually for all plants combined provided all use manualsubmission. Calculated as follows: 1,032 × $25 per hour = $25,800.
$12,900 annually for all plants combined provided all were to completely utilizeelectronic preparation and submission. Calculated as follows: 516 hours × $25 per hour =$12,900.
Additional $180 one-time set-up cost provided all plants newly subject to theRegulations were to completely utilize electronic systems for preparation and submission.
Calculated as follows: 1 hour build spreadsheet/database + 2 hours develop electronicinterface = 3 hours. 3 hours total development × $60 per hour × 1 new plant = $180.
The Paperwork Reduction Act also requires GIPSA to measure the recordkeepingburden. Under the Packers and Stockyards Act and its existing regulations, each packer isrequired to maintain and make available upon request any records necessary toverify information on all transactions between the packer and producers from whom thepacker obtains swine for slaughter. Records that packers are required to maintain underexisting regulations would meet the requirements for verifying the accuracy ofinformation required to be reported for the Swine Contract Library. These recordsinclude original contracts, agreements, receipts, schedules, and other records associatedwith any transaction related to the purchase, pricing, and delivery of swine for slaughterunder the terms of marketing contracts. Additional annual costs of maintaining recordswould be nominal since packers are required to store and maintain such records as amatter of normal business practice and in conformity with existing regulations.
As required by the Paperwork Reduction Act (44 U.S.C. 3506(c)(2)(A)) and itsimplementing regulations (5 CFR 1320.8(d)(1)), we specifically request comment to:
(a) Evaluate the proposed collection of information is necessary for the properperformance of the functions of the agency, including whether the information will havepractical utility;
(b) Evaluate the accuracy of the agency's estimate of the burden of the proposedcollection of information, including the validity of the methodology and assumptionsused;
(c) Enhance the quality, utility, and clarity of the information to becollected; and
(d) Minimize the burden on the collection of information on those who areto respond, including through the use of appropriate automated, electronic, mechanical, orother technological collection techniques or other forms of information technology.
All responses to this notice will be summarized and included in the request for theOffice of Management and Budget approval. All comments will also become a matter ofpublic record.
44 U.S.C. 3506 and 5 CFR 1320.8.