Cleaning and Reinspection of Farmers Stock Peanuts

DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1446

RIN: 0560-AF56

Cleaning and Reinspection of Farmers Stock Peanuts

AGENCY: Commodity Credit Corporation, USDA.

ACTION: Interim rule with request for comments.

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SUMMARY: This rule amends regulations for the peanut price support

program to, pending comment, ease conditions for marketing Segregation

3 peanuts by allowing the peanuts to be reconditioned and regraded in

certain limited instances. Peanuts are graded as ``Segregation 3''

peanuts when they are found by visual inspection to have Aspergillus

flavus (A. flavus) mold. This rule would allow a farmer whose peanuts

were found at a buying point inspection to have the mold to reclean

those peanuts at the buying point and have them visually reinspected

within 24 hours. The farmer could obtain such a re-inspection only once

for any given lot. This rule follows litigation in which all segments

of the industry were involved and buying point inspection procedures

were at issue. This rule is issued as an interim rule to allow relief

with respect to the upcoming crop (the 1998 crop) which should come to

market shortly. However, comments on all inspection options related to

the price support program for peanuts are solicited and should be

offered by all interested parties.

DATES: Effective August 5, 1998. Comments must be received on or before

September 4, 1998 to be assured consideration. Comments regarding

information collection must be received on or before October 5, 1998 to

be assured consideration.

ADDRESSES: Submit comments on the interim rule to: Director, Tobacco

and Peanuts Division, Farm Service Agency, U.S. Department of

Agriculture, STOP 0514, 1400 Independence Avenue, SW, Washington, D.C.,

20250-0514. All written submissions made pursuant to this rule will be

made available for public inspection in Room 5750 South Building, USDA,

between the hours of 8:15 a.m. and 4:45 p.m., during regular Federal

workdays.

FOR FURTHER INFORMATION CONTACT: David Kincannon, (202) 720-7914.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

For purposes of Executive Order 12866, this rule has been

determined to be not significant and has not been reviewed by the

Office of Management and Budget (OMB).

Regulatory Flexibility Act

The Regulatory Flexibility Act is not applicable to this interim

rule because the Commodity Credit Corporation is not required by 5

U.S.C. 553 or any other provision of law to publish a notice of

proposed rulemaking with respect to the subject matter of this rule.

Environmental Evaluation

It has been determined by an environmental evaluation that this

action will have no significant impact on the quality of the human

environment. Therefore, neither an Environmental Assessment nor an

Environmental Impact Statement is needed.

Unfunded Federal Mandates

This rule contains no Federal mandates (under the regulatory

provisions of Title II of the Unfunded Mandate Reform Act of 1995

(UMRA), for State, local, and tribal governments or the private sector.

Thus, this rule is not subject to the requirements of sections 202 and

205 of the UMRA.

Federal Assistance Program

The title and number of the Federal Assistance Program, as found in

the Catalog of Federal Domestic Assistance, to which this interim rule

applies are: Commodity Loans and Purchases--10.051.

Executive Order 12372

This program is not subject to the provisions of Executive Order

12372, which requires intergovernmental consultation with State and

local officials. See the Notice related to 7 CFR

[[Page 41712]]

part 3015, subpart V, published at 48 FR 29115 (June 24, 1983).

Executive Order 12988

This interim rule has been reviewed in accordance with Executive

Order 12988. The provisions of this rule do not preempt State laws to

the extent that such laws are consistent with the provisions of this

rule. Before any legal action is brought regarding determinations made

under provisions of 7 CFR part 1446, the administrative appeal

provisions set forth at 7 CFR parts 11 and 780 must be exhausted.

National Appeals Division Rules of Procedure

The procedures set out in 7 CFR parts 11 and 780 apply to appeals

of adverse decisions made under the regulations adopted in this notice.

Paperwork Reduction Act

In accordance with the Paperwork Reduction Act of 1995, CCC will

forward a regular submission of this information collection request to

OMB for the approval of increased reporting burden necessary for the

administration of the peanut program.

Title: Peanut Program.

OMB Control Number: 0560-0006.

Type of Request: Reinstatement and Revision of a previously

approved information collection.

Abstract: The peanut price support program is made available

through the authority granted the Secretary of Agriculture under the

Agricultural Adjustment Act of 1938, as amended, and the Agriculture

Act of 1949, as amended. The Federal Agriculture Improvement and Reform

Act of 1996 amended the peanut price support program effective for the

1996 through 2002 crop years.

Under the provisions of the peanut price support program FSA

allocates peanut quota to States based on the peanut quota allocated to

the State in 1995. Each farm eligible for peanut quota allocation

receives a quota based on the increase or decrease in the States quota.

Provisions of the peanut program requires FSA to administer the

transfer of peanut quota between farm, the allocation of temporary seed

quota, the marketing, inspection and grading peanuts of all peanuts,

making warehouse-and farm-stored loans, and the contracting and

disposition of additional peanuts (peanuts grown in excess of a farms

quota allocation).

The public reporting burden imposed by the peanut price support

program requires peanut producers to document the acreage planted to

peanuts, peanut quota transferred to another farm and to an out-of-

county farm, production and disposition of peanuts. Peanut handlers are

required to report the grade factors for peanuts inspected at time of

delivery to buying points, purchase of non-inspected peanuts, peanuts

used for breeder seed or foundation seed, and peanuts used for

experimental purposes.

This information collected allows FSA, in accordance with statutory

provisions, to account for peanut production for each farm, allocate

temporary seed quota to eligible producers, and monitor the disposition

of additional peanuts to assure only quota peanuts are used in the

domestic market. In addition, this information collection allows the

CCC to administer the warehouse-and farm-stored peanut loan program and

to assure that quota peanuts are supported at the mandated price

support rate.

Estimate of Burden: Public reporting burden for this information

collection is estimated to average .68 hours per response .

Respondents: Peanut Producers.

Estimated Number of Respondents: 51,250.

Estimated Number of Responses per Respondent: 15.

Estimated Total Annual Burden on Respondents: 306,690 hours.

Proposed topics for comment include: ( a) Whether the continued

collection of information is necessary for the proper performance of

the functions of the agency, including whether the information will

have practical utility; (b) the accuracy of the CCC's estimate of

burden including the validity of the methodology and assumptions used;

(c) enhancing the quality, utility, and clarity of the information

collected; or (d) minimizing the burden of the collection of the

information on those who are to respond, including the use of

appropriate automated, electronic, mechanical, or other technological

collection techniques or other forms of information technology.

Comments should be sent to the Desk Officer for Agriculture, Office of

Information and Regulatory Affairs, Office of Management and Budget,

Washington, D.C. 20250-0517. All comments will become a matter of

public record.

OMB is required to make a decision concerning the collection of

information contained in these interim regulations between 30 and 60

days after publication of this document in the Federal Register.

Therefore, a comment to OMB is best assured of having its full effect

if OMB receives it within 30 days of publication.

Background

This rule addresses an amendment to the peanut poundage quota

regulations at 7 CFR Part 1446 with regard to determining Segregation 3

peanuts and addresses a matter which has been at issue in recent

litigation under the name of Ray T. Boyd et al. v. Glickman, USDC M.D.

Ala., Southern Div., Civil Action No. 98-A-83 S. In order to provide

some relief with respect to the matter at issue in that proceeding,

this rule modifies the definition of Segregation 3 peanuts found in

Sec. 1446.103 by providing that peanuts found to have visible

Aspergillus flavus (A. flavus) mold upon a visual inspection at a

buying point may be reconditioned and regraded in certain limited

instances. For many years peanuts found to have visible A. flavus mold

were required to be marketed as additional loan peanuts or as quota

peanuts returned to the farm for seed. Although no recleaning was

allowed, the impact of the inspection on farmers was mitigated by the

availability of ``disaster transfers'' which allowed a transfer of

additional loan peanuts to a quota loan pool. Those transfers did not

change the ultimate use of the peanuts but did allow the farmer to

receive a return close to that for quota peanuts if the farmer

otherwise would have unused quota.

The Federal Agriculture Improvement and Reform Act of 1996 (1996

Act) substantially limited the quantity and price on such transfers but

did not mandate the particular procedures by which peanuts would be

classified as Segregation 3 peanuts. In order to mitigate possible harm

to individual farmers with Segregation 3 peanuts, farmers whose peanuts

are found to contain visible A. flavus mold would be allowed by this

interim rule, pending comment, to have the peanuts reconditioned by

removing foreign material and loose shelled kernels (LSK's) at the

buying point and regraded one time only in accordance with directions

to be issued by the Director of the Tobacco and Peanuts Division of the

Farm Service Agency.

As defined by 7 CFR part 1446, farmers stock peanuts are picked or

threshed peanuts produced in the United States which have not been

changed (except for removal of foreign material, loose shelled kernels

(LSK's), and excess moisture) from the condition in which picked or

threshed peanuts are customarily marketed by producers, plus any LSK's

that are removed from farmers stock peanuts before such farmers stock

peanuts are marketed. Accordingly, the only permissible reconditioning

of farmers stock peanuts

[[Page 41713]]

is cleaning to remove foreign material and LSK's. Any LSK's removed by

cleaning must be accounted for as will be specified by the Director.

Comments on this interim rule are requested and will be considered

including comments directed at the impact of this rule on other farmers

because of possible losses that could occur on peanuts that are

regraded but after being pledged as collateral for a price support loan

at the higher quota level are not found attractive to buyers of peanuts

for quota peanut uses. It has been determined for the present that the

retesting will not be made using chemical testing because of the cost

involved, and the lack of standards for chemical testing at that stage

of the marketing process. Insofar as questions of wholesomeness are

concerned chemical testing is conducted at a later stage of the

marketing process for the purposes of insuring such wholesomeness. The

inspection addressed in this rule is for purposes of making certain

price support value determinations in the context of operating a

program that supports peanuts throughout the country.

However, comments concerning chemical testing during the inspection

for incoming producer peanuts at buying points will be carefully

considered in determining whether to amend the interim rule prior to

making that rule final. Such comments should address the efficacy of

such testing, standards for such testing and the assignment of costs

for such testing. That is, all interested parties should provide

comments expressing their view on whether the option contained in the

interim rule, or some other option, should be selected. All options

will be considered.

List of Subjects in 7 CFR part 1446

Loan programs--agriculture, Reporting and recordkeeping

requirements

For the reasons set out in the preamble, 7 CFR part 1446 is amended

as follows:

PART 1446--PEANUTS

1. The authority citation is amended to read as follows:

Authority: 7 U.S.C. 7271; 15 U.S.C. 714b and 714c

2. In Sec. 1446.103 a new definition of ``Director'' is added in

its proper alphabetical sequence and in the definition of Segregations,

paragraph (3) is revised to read as follows:

Sec. 1446.103 Definitions

* * * * *

Director. The Director, or Acting Director, Tobacco and Peanuts

Division, Farm Service Agency, U.S. Department of Agriculture.

* * * * *

Segregations. * * *

(3) Segregation 3. Segregation 3 peanuts are farmers stock peanuts

which, upon visible inspection, are found to contain Aspergillus flavus

mold: Provided, further, however, that, in accordance with such written

instructions as the Director may issue, the Director shall permit

producers at approved buying points as specified by the Director to

have a Segregation 3 lot reconditioned, one time only, so long as the

reconditioning is performed at the buying point where the peanuts were

initially delivered, and then reinspected visually. Such reinspection

may not occur more than 24 hours from the initial inspection except as

permitted by the Director and the second grade shall be considered the

final grade for the farmers stock peanuts.

* * * * *

Signed at Washington, D.C., on July 30, 1998.

Keith Kelly,

Executive Vice President, Commodity Credit Corporation.

[FR Doc. 98-20896 Filed 7-31-98; 2:59pm]

BILLING CODE 3410-05-P