(a) In addition to the requirements for exemption previously discussed, section 13(b)(14) requires that the employee employed by an establishment commonly recognized as a
country elevator be “employed within the area of production (as defined by the Secretary).” Regulations defining employment within the “area of production” for purposes of
section 13(b)(14) are contained in part 536 of this chapter. All the requirements of the applicable regulations must be met in order for the
exemption to apply.
(b) Under the regulations, an employee is considered to be employed within “the area
of production” within the meaning of section 13(b)(14) if the country elevator establishment by which he is employed is located in the “open
country or a rural community,” as defined in the regulations, and receives 95 percent
or more of the agricultural commodities handled through its elevator services from
normal rural sources of supply within specified distances from the country elevator. A definition of “area of production” in terms of such criteria has been upheld by
the U.S. Supreme Court in Mitchell v. Budd, 350 U.S. 473. Reference should be made to part 536 of this chapter for the precise requirements
of the definition.
(c) However, it is appropriate to point out here that nothing in the definition places
limits on the distance from which commodities come to the elevator for purposes other
than the storage of marketing of farm products. The commodities, 95 percent of which are required by definition to come from specified
distances, are those agricultural commodities received by the elevator with respect
to which it performs the primary concentration, storage, and marketing functions of
a country elevator as previously explained (see § 780.708). This is consistent with the emphasis given, in the legislative history, to the country
elevator's function of marketing farm products, mostly grain, for farmers (see 107
Cong. Rec. (daily ed.) p. 5883). Commodities brought or shipped to a country elevator establishment not for storage
or for market but in connection with its secondary, incidental, or side-line functions
of selling products and services used in the operation of a farm (see § 780.610) are not required to be counted in determining whether 95 percent of the agricultural
commodities handled come from rural sources of supply within the specified distances.
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