B-149799, SEP. 19, 1962

B-149799, SEP. 19, 1962

TO THE SECRETARY OF AGRICULTURE:

BY LETTER OF AUGUST 28, 1962, THE ASSISTANT SECRETARY FOR MARKETING AND STABILIZATION REQUESTED OUR ADVICE IN THE MATTER OF AN APPLICATION FROM KUSSMAUL HYBRIDS, MR. HOPE, WISCONSIN, FOR PARTICIPATION IN THE AMOUNT OF $3,013.50 UNDER THE HYBRID CORN AND HYBRID SORGHUM SEED SECTION 32 DIVERSION PROGRAM. FROM INFORMATION CONTAINED IN THE ASSISTANT SECRETARY'S LETTER AND ENCLOSURES THERETO, THE ESSENTIAL FACTS INVOLVED MAY BE SUMMARIZED AS FOLLOWS:

PURSUANT TO THE PROVISIONS OF SECTION 32 OF THE PUBLIC NO. 320, 74TH CONGRESS, AS AMENDED, 7 U.S.C. 612C, PAYMENTS WERE OFFERED ON HYBRID CORN AND GRAIN SORGHUM SEED DIVERTED FROM NORMAL USE CHANNELS UNDER CERTAIN TERMS AND CONDITIONS. THE PURPOSE OF THE PROGRAM WAS TO LESSEN THE ADVERSE ECONOMIC SITUATION FOR HYBRID SEED PRODUCER PROCESSORS CAUSED BY THE LATE DEVELOPMENT OF THE 1961 FEED GRAIN PROGRAM. ONE OF THE CONDITIONS IMPOSED WAS THAT DIVERSION OF SEED MUST HAVE BEGUN NO EARLIER THAN THE DATE OF APPROVAL OF THE APPLICATION FOR PARTICIPATION UNDER THE PROGRAM. THESE APPLICATIONS WERE TO BE FILED WITH THE AGRICULTURAL STABILIZATION AND CONSERVATION COUNTY COMMITTEE AND THE REQUIRED APPROVAL WAS TO BE MADE BY THE CINCINNATI AGRICULTURAL STABILIZATION AND CONSERVATION SERVICE COMMODITY OFFICE. THE REASON FOR SUBMITTING THE MATTER OF KUSSMAUL'S APPLICATION TO THIS OFFICE IS THAT ALTHOUGH ALL OF THE SUBSTANTIVE PROGRAM REQUIREMENTS WERE NOT MET UNDER ITS APPLICATION, DIVERSION OF THE SEED INVOLVED WAS MADE THREE DAYS PRIOR TO THE REQUIRED APPROVAL BY THE CINCINNATI COMMODITY OFFICE.

KUSSMAUL FILED ITS APPLICATION ON JUNE 22, 1962, TO PARTICIPATE IN THE PROGRAM. ON THAT DATE MR. KUSSMAUL ASKED IF THE DIVERSION OF SEED COULD BE WITNESSED IN THE AFTERNOON OF JUNE 25. THE DATE WAS AGREED UPON BY THE COUNTY COMMITTEE. ACTING IN GOOD FAITH, THE DIVERTER THOUGHT EVERY DETAIL WAS IN ACCORDANCE WITH THE PROGRAM BUT THE COUNTY COMMITTEE FAILED TO ACCOUNT FOR THE PROGRAM REQUIREMENT THAT DIVERSION WAS NOT TO TAKE PLACE UNTIL APPROVAL OF THE APPLICATION. THE DIVERSION WAS EFFECTED ON JUNE 25 IN STRICT COMPLIANCE WITH ALL PROGRAM DETAILS EXCEPT THAT THE APPLICATION WAS NOT APPROVED UNTIL JUNE 28.

THE ASSISTANT SECRETARY STATES THAT THE PURPOSE OF HAVING ALL APPLICATIONS SENT TO THE CINCINNATI OFFICE FOR APPROVAL AFTER DETERMINATION BY THE COUNTY OFFICE OF THE APPLICANT'S ELIGIBILITY WAS TO ESTABLISH A CENTRAL POINT OF CONTROL FOR DETERMINING QUANTITY OF ELIGIBLE SEED WHICH COULD BE DIVERTED WITHOUT CAUSING AN OVEROBLIGATION OF FUNDS. THE PURPOSE OF REQUIRING APPLICATION APPROVAL PRIOR TO DIVERSION WAS TO PROVIDE A FURTHER SAFEGUARD AGAINST DIVERTING MORE SEED THAN THAT FOR WHICH FUNDS WERE AVAILABLE.

SECTION 32, AS AMENDED, AUTHORIZES YOU TO EXPEND FUNDS APPROPRIATED THEREUNDER FOR THE PURPOSES SPECIFIED THEREIN "AT SUCH TIMES, IN SUCH MANNER, AND IN SUCH AMOUNTS AS (YOU FIND) WILL EFFECTUATE SUBSTANTIAL ACCOMPLISHMENT OF ANY ONE OR MORE OF THE PURPOSES OF THIS SECTION.' THE HYBRID SEED DIVERSION PROGRAM TERMS AND CONDITIONS SET FORTH THE BASIS UPON WHICH YOU, IN THE EXERCISE OF THE BROAD DISCRETION GRANTED BY SECTION 32, AS AMENDED, DETERMINED THAT PAYMENTS WOULD BE MADE. THUS, WHILE THERE IS NO EXPRESS PROVISION AUTHORIZING YOU TO ISSUE REGULATIONS RELATING TO PROGRAMS INITIATED PURSUANT TO THE PROVISIONS OF SECTION 32, THE TERMS AND CONDITIONS PRESCRIBED ARE, OR PARTAKE OF THE NATURE OF, STATUTORY REGULATIONS AND, AS SUCH, ARE NOT ORDINARILY TO BE WAIVED BY ADMINISTRATIVE ACTION IN PARTICULAR INSTANCES.

HOWEVER, THE REQUIREMENT FOR AWAITING APPROVAL OF THE APPLICATION FOR PAYMENT PRIOR TO EXECUTING DIVERSION DOES NOT APPEAR TO BE SIGNIFICANT IN TERMS OF KUSSMAUL'S SUBSTANTIVE QUALIFICATION UNDER THE PROGRAM. AGREE, THEREFORE, AS SUGGESTED BY THE ASSISTANT SECRETARY, THAT THIS CASE IS COMPARABLE TO ONE COVERED IN OUR LETTER OF DECEMBER 23, 1960, B-142279, INVOLVING A SIMILAR SITUATION ENCOUNTERED IN THE CRANBERRY PAYMENT PROGRAM PROMULGATED PURSUANT TO SECTION 32.

ACCORDINGLY, IF IT IS FEASIBLE TO REALISTICALLY ASCERTAIN WHETHER PAYMENT TO KUSSMAUL HYBRIDS WOULD BE PREJUDICIAL TO OTHERS WHO MAY BE SIMILARLY SITUATED AND YOU ADMINISTRATIVELY DETERMINE THAT OTHER SEED PRODUCER- PROCESSORS, IN FACT, WILL NOT BE PREJUDICED THEREBY, THIS OFFICE WILL NOT OBJECT TO PAYMENT TO KUSSMAUL HYBRIDS UNDER THE PROGRAM IN SUCH AMOUNT AS IS OTHERWISE PROPER.

THE LETTERS AND MEMORANDUMS FURNISHED WITH THE ASSISTANT SECRETARY'S LETTER ARE RETURNED AS REQUESTED.