Clarification of Requirements Established Under Marketing Agreement No. 146 Regulating the Quality of Domestically Produced Peanuts for 1994 and Subsequent Crop Peanuts

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 998

[Docket No. FV94-998-2IFR]

Clarification of Requirements Established Under Marketing

Agreement No. 146 Regulating the Quality of Domestically Produced

Peanuts for 1994 and Subsequent Crop Peanuts

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule clarifies that peanut handlers signatory to Peanut

Marketing Agreement No. 146 (agreement) may store and shell certain

Segregation 2 seed peanut lots with Segregation 1 seed peanut lots when

such lots are produced under the auspices of a State agency, which

regulates or controls their production. The Peanut Administrative

Committee (Committee) believes that the current requirements authorize

such commingling of lots but recommended the clarification to remove

any chance of confusion. This rule also provides that the unchanged

portions of the incoming, outgoing, and indemnification regulations

currently in effect under the agreement for 1993 crop peanuts be

established for 1994 and subsequent crop peanuts. The clarification of

requirements was unanimously recommended by the Committee.

DATES: Effective July 18, 1994. Comments received by August 17, 1994

will be considered prior to issuance of any final rule.

ADDRESSES: Interested persons are invited to submit written comments

concerning this interim final rule. Comments must be sent in triplicate

to the Docket Clerk, Marketing Order Administrative Branch, F&V, AMS,

USDA, Room 2523-S, P.O. Box 96456, Washington, DC 20090-6456; FAX:

(202) 720-5698. Comments should reference this docket number, the date,

and page number of this issue of the Federal Register. Comments

received will be made available for public inspection in the Office of

the Docket Clerk during regular business hours.

FOR FURTHER INFORMATION CONTACT: William G. Pimental, Marketing

Specialist, Southeast Marketing Field Office, Fruit and Vegetable

Division, AMS, USDA, P.O. Box 2276, Winter Haven, Florida 33883-2276;

telephone: (813) 299-4770, or FAX: (813) 299-5169; or Jim Wendland,

Marketing Specialist, Marketing Order Administration Branch, Fruit and

Vegetable Division, AMS, USDA, P.O. Box 96456, Room 2523-S, Washington,

DC 20090-6456; telephone: (202) 720-2170, or FAX: (202) 720-5698.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing

Agreement No. 146 [7 CFR part 998] regulating the quality of

domestically produced peanuts, hereinafter referred to as the

agreement. This agreement is effective under the Agricultural Marketing

Agreement Act of 1937, as amended [7 U.S.C. 601-674], hereinafter

referred to as the ``Act.''

The Department of Agriculture (Department) is issuing this rule in

conformance with Executive Order 12866.

This rule has been reviewed under Executive Order 12778, Civil

Justice Reform. This rule is not intended to have retroactive effect.

This rule will not preempt any State or local laws, regulations, or

policies, unless they present an irreconcilable conflict with this

rule. There are no administrative procedures which must be exhausted

prior to any judicial challenge to the provisions of this rule.

Pursuant to the requirements set forth in the Regulatory

Flexibility Act (RFA), the Administrator of the Agricultural Marketing

Service (AMS) has considered the economic impact of this action on

small entities.

The purpose of the RFA is to fit regulatory actions to the scale of

business subject to such actions in order that small businesses will

not be unduly or disproportionately burdened.

There are about 75 handlers of peanuts subject to regulation under

the agreement, and about 47,000 peanut producers in the 16 States

covered under the program. Small agricultural service firms are defined

by the Small Business Administration [13 CFR 121.601] as those having

annual receipts of less than $5,000,000, and small agricultural

producers have been defined as those having annual receipts of less

than $500,000. Some of the handlers signatory to the agreement are

small entities, and a majority of the producers may be classified as

small entities.

In 1993, the reported U.S. production, mostly covered under the

agreement, was approximately 3.33 billion pounds of peanuts, a 22

percent decrease from 1992 and the lowest level since 1983. The

preliminary 1993 peanut crop value is $991.65 million, 77 percent of

the 1992 crop value.

The objective of the agreement, in place since 1965, is to ensure

that only wholesome peanuts enter edible market channels. About 70

percent of U.S. shellers (handlers), handling approximately 95 percent

of the crop, have voluntarily signed the agreement. Under the

agreement, farmers' stock peanuts with visible Aspergillus flavus mold

(the principal source of aflatoxin) are required to be diverted to non-

edible uses. Each lot of milled peanuts must be sampled and the samples

chemically analyzed for aflatoxin contamination. Signatory handlers who

comply with these requirements may be eligible for indemnification of

losses for individual lots of their peanuts which test positive to

aflatoxin. Indemnification and administrative costs are paid by

assessments levied on handlers signatory to the agreement.

The Committee, which is composed of growers and handlers of

peanuts, meets to review the rules and regulations effective on a

continuous basis for peanuts regulated under the agreement. Committee

meetings are open to the public, and interested persons may express

their views at these meetings. The Department reviews Committee

recommendations and information, as well as information from other

sources, and determines whether modification, suspension, or

termination of the rules and regulations would tend to effectuate the

declared policy of the Act.

The Committee met on March 15 and 16, 1994, and unanimously

recommended clarifying changes to Sec. 998.100 Incoming quality

regulation.

Section 998.34 of the agreement provides authority for the

modification of the incoming quality regulation by the Secretary of

Agriculture, if the Secretary finds that such modification would tend

to effectuate the objectives of the agreement.

After considerable discussion, the Committee unanimously

recommended amending paragraph (e) Seed peanuts of Sec. 998.100 to

clarify that Segregation 2 seed peanuts meeting certain quality

requirements may be stored and shelled with Segregation 1 seed peanut

lots. Currently, paragraph (e) specifies that Segregation 3 seed peanut

lots with visible Aspergillus flavus mold must be stored and shelled

separate and apart from other peanuts. The regulation does not

specifically state that Segregation 2 seed peanuts containing up to

three percent damaged kernels and no visible Aspergillus flavus mold

can be stored and shelled with Segregation 1 seed lots if the seed

peanuts were produced under the auspices of a State agency. The

Committee believes that the current provisions authorize such

commingling but believe that the authority should be expressly stated

to avoid confusion.

The Committee noted that requiring Segregation 2 seed peanuts to be

stored separately from Segregration 1 seed peanuts would increase the

number of storage bins handlers needed to maintain separation. This

would increase handler costs. It also noted that requiring the

Segregation 2 seed peanuts to be shelled separate and apart from

Segregation 1 seed peanuts would increase handler shelling costs with

no apparent benefits.

Therefore, the Committee recommended adding a sentence to paragraph

(e) clarifying that seed peanut lots may be stored and shelled with

Segregation 1 lots if: (1) The seed peanuts do not exceed 3 percent

total damage and have no visible Aspergillus flavus mold; and (2) both

the Segregation 2 seed peanut lot and the Segregation 1 seed peanut lot

are produced under the auspices of a State agency which regulates or

controls the production of seed peanuts.

This rule also provides that the unchanged portions of the

incoming, outgoing, and indemnification regulations currently in effect

under the agreement for 1993 crop peanuts be established for 1994 and

subsequent crop peanuts.

Based on the above, the Administrator of the AMS has determined

that this interim final rule will not have a significant economic

impact on a substantial number of small entities.

Written comments, timely received, in response to this action, will

be considered before finalization of this rule.

After consideration of all relevant matter presented, the

information and recommendations submitted by the Committee, and other

information, it is found that the revision set forth below will tend to

effectuate the declared policy of the Act.

Pursuant to 5 U.S.C. 553, it is also found and determined, upon

good cause, that it is impracticable, unnecessary and contrary to the

public interest to give preliminary notice prior to putting this rule

into effect, and that good cause exists for not postponing the

effective date of this action until 30 days after publication in the

Federal Register because: (1) This action clarifies requirements

currently in effect for peanut handlers who are signatory to the

agreement; (2) this action should be in effect as soon as possible,

because the 1994 crop year begins July 1, 1994, and handlers need to

know regulations applicable to handling 1994 crop peanuts; and (3) this

action provides a 30-day comment period, and any comments received will

be considered prior to finalization of this rule.

List of Subjects in 7 CFR Part 998

Marketing agreements, Peanuts, Reporting and recordkeeping

requirements.

For the reasons set forth in the preamble, 7 CFR part 998 is

amended as follows:

PART 998--MARKETING AGREEMENT REGULATING THE QUALITY OF

DOMESTICALLY PRODUCED PEANUTS

1. The authority citation for 7 CFR part 998 continues to read as

follows:

Authority: 7 U.S.C. 601-674.

2. Section 998.100 is amended by revising the section heading and

adding a new sentence at the end of paragraph (e)(2) to read as

follows:

Sec. 998.100 Incoming quality regulation--1994 and subsequent crop

peanuts.

* * * * *

(e) * * *

(2) * * * Seed peanuts, produced under the auspices of the State

agency, which contain up to 3 percent damaged kernels and are free from

visible Aspergillus flavus, may be stored and shelled with Segregation

I seed peanuts which are also produced under the auspices of the State

agency.

* * * * *

3. Section 998.200 is amended by revising the section heading to

read as follows:

Sec. 998.200 Outgoing quality regulation--1994 and subsequent crop

peanuts.

4. Section 998.300 is amended by revising the section heading to

read as follows:

Sec. 998.300 Terms and conditions of indemnification--1994 and

subsequent crop peanuts.

Dated: July 11, 1994.

Robert C. Keeney,

Deputy Director, Fruit and Vegetable Division.

[FR Doc. 94-17241 Filed 7-15-94; 8:45 am]

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