[Federal Register Volume 63, Number 11 (Friday, January 16, 1998)]
[Rules and Regulations]
[Pages 2846-2852]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-1052]
[[Page 2845]]
_______________________________________________________________________
Part IV
Department of Agriculture
_______________________________________________________________________
Agricultural Marketing Service
_______________________________________________________________________
7 CFR Parts 997 and 998
Peanuts Marketed in the United States; Relaxation of Handling
Regulations; Final Rule
Federal Register / Vol. 63, No. 11 / Friday, January 16, 1998 / Rules
and Regulations
[[Page 2846]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Parts 997 and 998
[Docket Nos. FV97-997-1 IFR and FV97-998-1 IFR]
Peanuts Marketed in the United States; Relaxation of Handling
Regulations
AGENCY: Agricultural Marketing Service (AMS), USDA.
ACTION: Interim final rule with request for comments.
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SUMMARY: This rule relaxes, for 1997 and subsequent crop peanuts,
several provisions regulating the handling of domestically produced
peanuts marketed in the United States. The relaxation includes:
Eliminating need for approval of certain facilities; allowing minimum
grade requirements for lots of splits to correspond with grade
standards; allowing certain lots to be custom blanched; providing that
under the Agreement, all lots of edible quality peanuts be eligible for
indemnification benefits; providing that peanuts which have been
certified as meeting the minimum grade requirements, but fail on
aflatoxin, may be roasted prior to being certified as meeting the
latter; and allowing rejected peanuts to be placed in ``suitable
containers'', not just ``bagged''. This rule will improve efficiency
and reduce program costs resulting in a similar reduction in assessment
rates charged Agreement signer and non-signer handlers.
DATES: Effective January 20, 1998; comments received by March 17, 1998
will be considered prior to issuance of a final rule.
ADDRESSES: Interested persons are invited to submit written comments
concerning this rule. Comments must be sent in triplicate to the Docket
Clerk, Fruit and Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box
96456, Washington, DC 20090-6456; Fax: (202) 205-6632. All comments
should reference the docket numbers, the date and page number of this
issue of the Federal Register and will be made available for public
inspection in the Office of the Docket Clerk during regular business
hours.
FOR FURTHER INFORMATION CONTACT: George J. Kelhart or Jim Wendland,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA, P.O. Box 96456, room 2525-S, Washington, DC 20090-6456;
telephone: (202) 720-2491, Fax: (202) 205-6632. Small businesses may
request information on compliance with this regulation by contacting:
Jay Guerber, Marketing Order Administration Branch, Fruit and Vegetable
Programs, AMS, USDA, P.O. Box 96456, room 2525-S, Washington, D.C.,
20090-6456; telephone: (202) 720-2491, Fax: (202) 205-6632.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing
Agreement No. 146 (7 CFR Part 998) and the Agricultural Marketing
Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter
referred to as the ``Act.'' The marketing agreement and the regulations
issued thereunder (7 CFR Part 998) and the non-signatory peanut handler
regulations (7 CFR Part 997) regulate the quality of domestically
produced peanuts.
The Department of Agriculture (Department) is issuing this rule in
conformance with Executive Order 12866.
This rule has been reviewed under Executive Order 12988, 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.
Following explanation of each change to the Agreement's regulation,
the corresponding change to the non-signatory regulation is discussed.
Incoming Regulations
Farmers Stock Storage and Handling Facilities: The Committee
recommended amending Sec. 998.100 Incoming quality regulation for 1995
and subsequent crop peanuts by removing paragraph (g) Farmers Stock
Storage and Handling Facilities which currently regulates the condition
of such facilities and authorizes Committee inspection. The Committee
recommended the change to save approximately $450,000, by eliminating
the positions of the seven fieldmen whose specified duties through last
crop year included spending an estimated 60-65 percent of their time
inspecting and approving such facilities. The vote was 17 ``For'' and 1
``Against'', with the dissenting voter contending that the fieldmen
were providing valuable services and their positions should not be
eliminated and that inspection and approval of such facilities by the
Committee staff was important. Handlers contend they are already paying
their own employees to do facilities inspections and the cost of such
duplication of effort needs to be eliminated. Also, this cost-cutting
will not adversely affect quality since peanuts must still meet the
Outgoing Quality Regulation.
Elimination of the regulatory provision will allow the Committee to
reduce its non-headquarters staff from seven to one compliance officer
in each of the three production areas and reduce the current
``fieldmen'' staffing costs to zero. The compliance officers will
conduct compliance audits of Agreement signers similar to AMS approved
non-signer program compliance plan procedures where AMS Compliance
Staff auditors check non-signers' records. A revised 1997-98 compliance
plan from the Committee includes this new procedure. AMS believes this
will continue to assure compliance under the Agreement.
The non-signer regulation contains no similar requirements for
inspection and approval of such facilities, so no change is needed.
Outgoing Regulations
The Committee unanimously recommended that Sec. 998.200(a) be
amended to provide that minimum grade requirements for lots of
``splits'' (the separated halves of peanut kernels) be modified to
correspond with ``United States Standards For Grades Of: (1) Cleaned
Virginia Type Peanuts In The Shell; or (2) Shelled Runner Type Peanuts;
or (3) Shelled Spanish Type Peanuts; or (4) Shelled Virginia Type
Peanuts'' (7 CFR Part 51: Sections 51.1235-1242; 51.2710-2721; 51.2730-
2741; and 51.2750-2763, respectively. This increase to 2.00 percent
from the current 1.50 percent for unshelled peanuts and damaged kernels
is needed to provide consistency with the grade standards. Under the
current regulation, a handler could have a lot of peanuts which met
U.S. Grade Standards for U.S. Splits, but failed to meet Agreement
requirements for edible quality. It was expected that this change might
reduce the number of lots which will need to be remilled to meet
outgoing quality requirements. Although this reduction was roughly
estimated at something less than 10 percent in an average year, this
year's crop has been stressed by drought conditions and virtually all
peanut producing States have expressed having problems with quality.
Thus, this change could still result in significant reductions in costs
for handlers.
Another modification to Sec. 998.200(a) will remove Table 2.--
INDEMNIFIABLE GRADES. The Committee had originally established this
table in its regulations to qualify higher grade peanut lots for its
indemnification program covered in Sec. 998.300. However, coverage
under this provision has been greatly reduced by
[[Page 2847]]
recent Committee action, to the point that the table is no longer
deemed necessary. The Department agrees that Table 2 is not needed and
its removal will simplify the Agreement regulations and therefore it is
hereby removed.
Similar changes are made to the corresponding Sec. 997.30(a) of the
non-signer regulation.
The Committee unanimously recommended that Sec. 998.200(h)(1) be
amended to allow lots of peanuts which fail edible quality
requirements, due to excessive fall through, to be custom blanched.
However, such lots will have to be certified as meeting minimum ``fall
through'' requirements after blanching. The change eliminates the
current requirement that prior to movement of such peanuts, handlers
have to submit a form to the Committee and receive authorization for
movement and blanching of each such lot.
Section 997.40(d) of the non-signer regulation currently does not
require such handlers to submit a request to the Department and receive
authorization for movement and blanching of each such lot. Therefore,
no similar change to that provision is needed. However, it is being
amended to add ``fall through'' to the category of items allowed in the
first and third sentences.
The Committee also unanimously recommended a further change to
paragraph (h), specifically that subparagraphs (h)(1) and (h)(2) be
further amended to provide that reject peanuts may be placed in
suitable containers acceptable to the Committee. The current
requirement specifies ``bagged,'' which refers to the older standard-
sized burlap bags. It does not include the many newer and more
efficient containers which are easier to handle such as tote bags,
corrugated containers (including those with capacities of over a ton),
Super Sacks, and other various company containers used by individual
peanut product manufacturers. The change will allow handlers to use
more efficient containers or those desired by their customers. For
purposes of this provision, most any container that handlers use other
than bulk loads--i.e., those in which peanuts are not in any type of
receptacle other than the vehicle transporting them--will be considered
suitable.
Section 997.40(c) of the non-signer regulation currently provides
for ``in bulk or bags or other suitable containers.'' To make it
consistent with the Agreement's amended regulation, the words ``in bulk
or'' are being removed. Paragraphs (d) and (e) are also being amended
by removing the word ``bagged'' and replacing it with the words
``placed in suitable containers.''
The Committee also unanimously recommended that Sec. 998.200
Outgoing quality regulation and Sec. 998.300 Terms and conditions of
indemnification . . . be amended to make all lots of edible quality
peanuts indemnifiable, for freight reimbursement, when rejected on
appeal after being certified ``negative'' as to aflatoxin. Under
provisions specified in Sec. 998.300, product claim lots of edible
quality peanuts will now also be indemnifiable. This involves lots
where a handler sustained a loss as a result of a buyer withholding
from human consumption any or all of the product made from a lot of
peanuts which had been determined to be unwholesome due to aflatoxin
after such lot had originally been certified ``negative'' as to
aflatoxin. This change will provide consistency by treating all edible
quality peanuts equally, whether appeal claims or product claims.
Although these changes should further reduce costs and will promote
uniformity in the handling of indemnification of all edible quality
peanuts, there is no way to accurately quantify how much these
reductions would be, because the savings would be different for each
handler. However, the total savings would be significantly less than
the projected approximately $200,000 total 1996 crop indemnification
costs.
The non-signer enabling legislation does not provide authority for
indemnification. Therefore, no similar change is being made in the non-
signer regulation.
The Committee further unanimously recommended that
Sec. 998.200(h)(3) be amended to provide that peanuts which have been
certified as meeting minimum grade requirements specified in
Sec. 998.200(a)(1), but fail to meet requirements for aflatoxin, may be
roasted while being blanched prior to being certified as meeting the
aflatoxin requirements. After roasting, such peanuts must be sampled
and assayed for aflatoxin content but do not have to be re-sampled and
analyzed for grade again. This simplified process is recommended by the
Committee because blanched peanuts, after certification, often are
placed back into blancher for additional heating. Removing the blanched
peanuts short of the complete roasting process for sampling and
aflatoxin analysis, and then reinserting them back into the blancher
adds costs to the roasting process and usually causes additional,
unintentional damage due to the extra handling of the kernels. Also,
the roasting will enhance the blanching efforts to eliminate aflatoxin,
thus improving the wholesomeness, quality and value of such shelled
peanuts. The savings involved in blanching and roasting in one step
should far outweigh the approximately $40 per hour costs of having an
inspector present during this process to maintain needed positive lot
identification. Any residual peanuts, excluding skins and hearts,
resulting from this roasting process, must be red tagged and disposed
of to non-edible peanut outlets. A similar change is being made to
Sec. 997.40(d) of the non-signer regulation.
The unchanged portions of the incoming and outgoing regulations
currently in effect for 1996 and subsequent crop peanuts will remain in
effect for 1997 and subsequent crop peanuts.
Pursuant to the requirements set forth in the Regulatory
Flexibility Act (RFA), the Agricultural Marketing Service (AMS) has
considered the economic impact of this action on small entities.
Accordingly, AMS has prepared this initial regulatory flexibility
analysis.
There are approximately 27 signatory and 30 non-signatory peanut
handlers who are currently subject to regulations under the Agreement
and non-signer program respectively and approximately 25,000 commercial
peanut producers in the 16-State production area. Small agricultural
service firms, which include handlers, have been 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 are
defined as those having annual receipts of less than $500,000.
Approximately 25 percent of the signatory handlers, virtually all of
the non-signers, and most of the producers may be classified as small
entities. This action will be favorable to the industry by tending to
improve efficiency, reducing costs and increasing returns.
The relaxations to handling regulations specified in this rule will
simplify requirements and enable handlers, both large and small, to cut
costs and more efficiently handle their peanut supplies, without
jeopardizing safeguard requirements in the current regulations.
The relaxations include: 1. The elimination of the requirement for
inspection and approval of farmers stock storage and handling
facilities will save approximately $450,000 by eliminating the
positions of the seven fieldmen, who had performed this activity
through last crop year. Handlers contend they already paid their own
employees to do this and the duplicate cost should be eliminated;
[[Page 2848]]
2. Relaxing the minimum grade requirements for ``splits'' to
correspond with U.S. grade standards might reduce the number of lots
which need to be remilled this year by 10 percent due to stressed
growing conditions in virtually all areas. This should result in
significant reductions in costs for handlers;
3. Another relaxation is to provide that all lots of edible quality
peanuts, whether appeal claims or product claims, will be eligible for
handler indemnification benefits. Thus, handlers with product claim
lots will now also be eligible for reimbursement of most transportation
expenses on such lots. Such additional reimbursement was not publicly
quantified by the Committee, but would be less than the projected
approximately $200,000 total 1996 crop indemnification costs;
4. The revised provision to allow lots which fail edible quality
requirements, due to excessive fall through, to be custom blanched
eliminates the current requirement that handlers have to submit a form
to the Committee and receive authorization for movement and blanching
of each such lot. This relaxation will eliminate unnecessary paperwork
and save time for all affected handlers;
5. Relaxing the requirement that peanuts be ``bagged'' (i.e.,
placed only in older standard-size burlap bags) by allowing the use of
suitable containers, will permit use of the many newer and more
efficient containers or those desired by handlers' customers; and
6. Another relaxation will allow peanuts which have been certified
as meeting the minimum grade requirements, but fail to meet
requirements for aflatoxin, to be roasted while being blanched prior to
being certified as meeting the latter requirements. This simplified
process eliminates reinserting such peanuts back into the blancher,
which doubles the processing costs and tends to lower the peanuts'
quality and value by causing additional damage to them. Such savings
should far outweigh the approximately $40 per hour expense of having an
inspector present to maintain needed positive lot identification.
The relaxed requirements will significantly improve efficiency and
have enabled the Committee to cut in half for the 1997-98 and
subsequent crops years its administrative costs and assessment rate
charged Agreement signer and non-signer handlers to finance their
respective programs. Further, the rate of assessment last season was
$0.70 per net ton of assessable peanuts. The rate for the 1997-98 crop
year has been reduced to $0.35 per net ton by another rulemaking
action, as published in the September 17, 1997, issue of the Federal
Register (62 FR 48749). This will save regulated domestic handlers
approximately $500,000 in administrative assessment costs which should,
to a great extent, also correspond to the savings from this relaxation
action.
The specifics of each change and why they will tend to increase
returns to handlers were covered in detail near the beginning of this
rule under the discussion starting with ``Incoming regulations.''.
These changes will relax requirements on regulated domestic peanut
handlers, improve their efficiency and cut costs, to benefit the peanut
industry, manufacturers, and consumers, while still assuring quality of
all peanuts in domestic human consumption markets.
As with all Federal marketing agreement and order programs, reports
and forms are periodically reviewed to reduce information requirements
and duplication by industry and public sectors. Consistent with the
Paperwork Reduction Act (44 U.S.C. Chapter 35), the Committee
unanimously recommended greatly reducing reporting and recordkeeping
requirements on both large and small domestic peanut handlers regulated
under these two programs. It will eliminate 20 of the 21 Committee
forms currently approved by OMB that might accompany peanut shipments,
to only require use of the Form PAC-1. The PAC-1 is mailed to handlers
on a monthly basis and is used to report receipts and acquisitions of
farmers stock peanuts and to remit assessments. It is estimated this
will eliminate 95 percent (or about 2,291 hours and assuming $10 per
hour, would save respondents nearly $23,000 in costs) of the current
estimated 2,417 hours of total reporting burden on Agreement signers,
including small businesses, and a proportional, smaller reduction in
non-signer reporting burden. A notice of the proposed revision was
published in the July 31, 1997, issue of the Federal Register (62 FR
41021). Sixty days were allowed for comments. One comment was received,
from the American Peanut Shellers Association, supporting the reduced
burdens. This information collection package has been submitted to the
Office of Management and Budget (OMB) for approval.
In addition, the Department has not identified any Federal rules
that duplicate, overlap or conflict with this rule.
Further, the Committee's meeting was widely publicized throughout
the peanut industry and all interested persons were invited to attend
the meeting and participate in the Committee's deliberations. Like all
Committee meetings, the April 29-30, 1997, meeting was a public meeting
and all entities, both large and small, were able to express their
views on the issues. The 18-member Committee is composed of an equal
number of peanut handlers and producers, the majority of whom are small
entities.
Also, the Committee has a number of appointed subcommittees to
review certain issues and make recommendations to the Committee. The
Committee's Regulations, Indemnification and Quality Subcommittee and
``New Concept'' Subcommittee met on January 28, 1997, and discussed
these issues in detail. On March 25, 1997, the Committee held an
informational meeting to hear a presentation by the National Peanut
Council's Peanut Industry Revitalization Project Steering Committee and
discuss those issues there and back with their industry peers before
voting on those issues at the April Committee meeting. The Committee's
Administrative Budget Subcommittee also meet March 25, 1997, to discuss
budget recommendations. These meetings were also public meetings and
both large and small entities were able to participate and express
their views. Finally, interested persons are invited to submit
information on the regulatory and informational impacts of this action
on small businesses.
An objective of the two domestic programs is to ensure that only
high quality and wholesome peanuts enter human consumption markets in
the United States. About 70 percent of domestic handlers, handling
approximately 95 percent of the crop volume, have signed the Agreement.
The remaining 30 percent are non-signatory handlers handling the
remaining 5 percent of domestic production.
Under these regulations, farmers stock peanuts with visible
Aspergillus flavus mold (the principal source of aflatoxin) are
required to be diverted to inedible uses. Each lot of milled peanuts
must be sampled and the samples chemically analyzed for aflatoxin
content. Costs to administer the Agreement and to reimburse the
Department for oversight of the non-signatory program are paid by an
assessment levied on handlers in the respective programs.
The 18-member Committee, which is composed of an equal number of
peanut producers and handlers, meets at least annually to review the
Agreement's rules and regulations, which are effective on a continuous
basis from one
[[Page 2849]]
year to the next. Committee meetings are open to the public, and
interested persons may express their views at these meetings. The
Department assesses Committee recommendations, as well as information
from other sources, prior to making any recommended changes to the
regulations under the Agreement.
Section 608b of the Act was amended in 1989 to require that all
peanuts handled by persons who have not entered into the Agreement
(non-signers) be subject to the same quality and inspection
requirements to the same extent and manner as are required under the
Agreement. Section 608b was further amended in 1993 to impose similar
requirements regarding administrative assessments. The non-signatory
handler regulations have been amended several times thereafter and are
published in 7 CFR part 997.
Thus, the Committee's recommended changes to the Agreement
regulation, as established in this rule, also are established for the
Agreement non-signers. This interim final rule identifies the
corresponding change to the non-signer regulation for each change to
the Agreement regulation.
According to the Committee, the domestic peanut industry is
undergoing a period of great change. The Committee bases its view, in
part, on findings in a recent study entitled ``United States Peanut
Industry Revitalization Project'' developed by the National Peanut
Council and the Department's Agricultural Research Service (May 1996).
According to the study, the U.S. peanut industry has been in a
period of dramatic economic decline since 1991 because: (1) Per capita
peanut consumption has steadily declined a total of 11 percent; (2)
harvested acreage has declined 25 percent; (3) production has declined
30 percent and farm value dropped 29 percent; and (4) imports of
peanuts and peanut products have increased from insignificant
quantities to 48,736 raw farmer stock tons in 1995 and 55,536 in 1996.
The study points to recent increases in the duty-free import quota
for raw peanuts due to the North American Free Trade Agreement (NAFTA)
and the Uruguay Round Agreements under the General Agreement on Tariffs
and Trade (GATT). Under Section 22 import quota provisions, the volume
of U.S. peanut imports had been limited to about 2.3 million pounds,
in-shell basis, annually. Thus, imports have historically represented
about one-tenth of 1 percent of U.S. food use of peanuts. Under NAFTA,
Mexico has been granted a minimum access level for duty-free entry of
peanuts of about 10 million pounds, in-shell basis. This level will
increase about 3 percent annually through 2008, when quantitative
limits will cease. Mexico's 1998 duty-free quota will total 8.4 million
pounds. Under GATT, the 1995 quota was 74.5 million pounds. This year
it is 86.8 million pounds, will increase to 96.7 million pounds
(Argentina 81.2 and all other 15.5) in 1998, and can grow to about 155
million pounds (about 4 percent of U.S. disappearance) in 2000.
The study also projects that farm production costs and revenue will
be equal by the year 2000, as will handler costs and revenue, leaving
no profit.
In addition, the modification of the Federal farm peanut poundage
quota regulations implemented under the Agricultural Market Transition
Act of 1996 (1996 Act) has resulted in the domestic industry undergoing
significant changes scheduled to continue through the year 2002. The
peanut support price has been reduced from $670 per ton in 1995 to $610
per ton through 2002. The USDA's Farm Service Agency final rule
implementing the Act was published May 9, 1997 (62 FR 25433). That rule
indicates that economic impacts of the 1996 Act include expected
reductions in domestic peanut producers' revenue of $1.25 billion from
1996 through 2002. Quota lease holders could absorb a loss of about $40
million annually because of reduced leasing rates due to the lower
peanut price support. Also, capitalized value of quotas could decline
$200 to $300 million, thus reducing land values and the tax base of
rural communities.
The Committee agrees that all of these factors combined show that
the domestic peanut industry had been in decline and that the outlook
was not expected to change without some positive intervention by the
industry.
World supply and demand are less important for peanuts than most
U.S. farm commodities. Much of world peanut production is for non-food
uses, although production for food use might increase a little if there
were no U.S. import restrictions. Also, import quotas, though increased
recently, still are set at relatively low levels.
Domestic peanut production in 1996 was approximately 3.66 billion
pounds, with a farm value of slightly under $1 billion. The
Department's November 1 forecast pegs the 1997 peanut crop production
at 3.5 billion pounds, down approximately 4 percent from last year.
Harvested acreage for 1997 is forecast to be 1.384 million acres, up
4,500 acres from a year ago. The U.S. average yield per acre for the
1997 crop is forecast at 2,528 pounds, down 11 pounds per acre from the
1996 crop.
Production is expected to gradually increase from 1996 to 2002
because domestic food use is projected to rise about 1.5 percent
annually. Imports are expected to remain at a relatively small
percentage of total U.S. peanut use.
Estimated exports of 750 million pounds in Marketing Year (MY) 1997
are below the average for the prior 3 years, but are 11 percent more
than a year earlier. Peanut oil prices are expected to average about 38
cents a pound of oil in MY 1997, 6 percent lower than MY 1996 as
vegetable oil supplies return to more normal levels. Peanut meal prices
for MY 1997 are expected to decline to $175 a ton, down 25 percent from
MY 1996 because of larger soybean meal supplies.
The season average price of farmer stock peanuts for MY 1997 may
remain unchanged from the 28.5 cents per pound average for 1996. This
was the lowest price of the last two years and reflects the adjustment
to the reduced quota support level and an unexpected change in the
proportions of quota and additionals in 1997 production. Average prices
to growers are expected to increase, but will remain below 1995 prices
because of the lower quota price support level. The value of farm
production is expected to gradually rise and surpass that of 1995 by
2000/01.
The Committee recommended the changes in this rulemaking to the
Agreement's Incoming and Outgoing regulations for 1997 and subsequent
crop peanuts at its April 30, 1997, public meeting.
Alternative Actions Considered
Although the Committee could have recommended no changes or less
changes to the current regulations, it unanimously concluded that those
were not satisfactory solutions. It believes that all possible
simplification and cost-cutting should be done and that these
regulations should focus more on outgoing quality and less on the
shelling and milling processes necessary to meet the outgoing, human
consumption requirements. Newer, high technology milling and blanching
equipment enable handlers to recondition failing peanut lots that could
not have been economically reconditioned when the regulations were
first promulgated. Therefore, it is no longer necessary to impose
restrictions that hinder the efficiency of handling operations and
result in the loss of potentially good quality peanuts. Thus, the
Committee believes these changes will tend to improve the returns to
growers and handlers, while still maintaining consumer safeguard
provisions in the current domestic regulations, because
[[Page 2850]]
all peanuts intended for human consumption must still be inspected and
certified acceptable for such use.
After review of the recommendations, the Department concurs that
the recommended changes will tend to improve returns to the industry
and be in the public interest. Expected benefits of the changes were
included in the previous discussion of each individual change.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35) information collection requirements that are contained in
this rule have been previously approved by the Office of Management and
Budget (OMB) and have been assigned OMB Nos. 0581-0067 (for Agreement
signers) and 0581-0163 (for non-signers).
After consideration of all relevant material presented, including
the Committee's recommendations, and other information, it is found
that this interim final rule, as hereinafter set forth, will tend to
effectuate the declared policy of the Act.
This rule invites comments on changes to the quality regulations
currently prescribed under the Agreement and the non-signers program.
All written comments timely received will be considered prior to
finalization of this rule.
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 rule until 30 days after publication in the Federal Register
because: (1) This rule relaxes requirements currently in effect; (2)
the 1997 peanut crop year began July 1, 1997, and the changes should be
effective as soon as possible to allow the industry to receive the
benefits for as much of the remainder of the crop year as possible; (3)
the Committee unanimously recommended these changes at a public meeting
and all entities, both large and small, were able to express views on
these issues; (4) this rule provides a 60-day opportunity for comment,
and all written comments timely received will be considered prior to
finalization of the rule.
List of Subjects
7 CFR Part 997
Food grades and standards, Peanuts, Reporting and recordkeeping
requirements.
7 CFR Part 998
Marketing agreements, Peanuts, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, 7 CFR parts 997 and 998
are amended as follows:
PART 997--PROVISIONS REGULATING THE QUALITY OF DOMESTICALLY
PRODUCED PEANUTS HANDLED BY PERSONS NOT SUBJECT TO THE PEANUT
MARKETING AGREEMENT
1. The authority citation for 7 CFR part 997 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. Section 997.30 is amended by revising paragraph (a), to read as
follows:
Quality Regulations
Sec. 997.30 Outgoing Regulation.
(a) Shelled peanuts. (1) No handler shall dispose of shelled
peanuts for human consumption unless such peanuts are positive lot
identified, certified ``negative'' as to aflatoxin and certified as
meeting the following requirements:
Maximum Limitations
--------------------------------------------------------------------------------------------------------------------------------------------------------
Unshelled Fall through
Unshelled peanuts, ---------------------------------------------------------
peanuts and damaged Foreign Moisture
Type and grade category damaged kernels and Sound split and Sound whole material (percent)
kernels minor defects broken kernels kernels Total (percent)
(percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Excluding lots of ``splits''
Runner......................... 1.50 2.50 3.00%; \17/64\ 3.00%; \16/64\ x 4.00%; both .20 9.00
inch round \3/4\ inch slot screens.
screen. screen.
Virginia (except No. 2)........ 1.50 2.50 3.00%; \17/64\ 3.00%; \15/64\ x 4.00%; both .20 9.00
inch round 1 inch slot screens.
screen. screen.
Spanish and Valencia........... 1.50 2.50 3.00%; \16/64\ 3.00%; \15/64\ x 4.00%; both .20 9.00
inch round \3/4\ inch slot screens.
screen. screen.
No. 2 Virginia................. 1.50 3.00 6.00%; \17/64\ 6.00%; \15/64\ x 6.00%; both .20 9.00
inch round 1 inch slot screens.
screen. screen.
Lots of ``splits''
Runner (not more than 4% sound 2.00 2.50 3.00%; \17/64\ 3.00%; \14/64\ x 4.00%; both .20 9.00
whole kernels). inch round \3/4\ inch slot screens.
screen. screen.
Virginia (not less than 90% 2.00 2.50 3.00%; \17/64\ 3.00%; \14/64\ x 4.00%; both .20 9.00
splits). inch round 1 inch slot screens.
screen. screen.
Spanish and Valencia (not more 2.00 2.50 3.00%; \16/64\ 3.00%; \13/64\ x 4.00% both .20 9.00
than 4% sound whole kernels). inch round \3/4\ inch slot screens.
screen. screen.
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 2851]]
(2) The term fall through, as used in this paragraph, shall mean
sound split and broken kernels and whole kernels which pass through
specified screens. Prior to shipment, appropriate samples for
pretesting shall be drawn in accordance with paragraph (c) of this
section from each lot of peanuts. For the current crop year,
``negative'' aflatoxin content means 15 parts per billion (ppb) or less
for peanuts which have been certified as meeting edible quality grade
requirements.
* * * * *
3. In Sec. 997.40, paragraph (c) introductory text is amended by
removing the words ``bulk or'', paragraph (e) is amended by removing
the word ``bagged'' and adding in its place the words ``placed in
suitable containers acceptable to AMS'', paragraph (d) is amended by
removing the word ``bagged'' and adding in its place the words ``placed
in suitable containers acceptable to AMS'', and adding after the last
sentence, 5 additional sentences, to read as follows:
Sec. 997.40 Reconditioning and disposition of peanuts failing quality
requirements.
* * * * *
(d) * * * Handlers may contract with Committee approved blanchers
for roasting positive lot identified shelled peanuts, which originated
from Segregation 1 peanuts, that meet the grade requirements of
paragraph (a) of this section but are positive as to aflatoxin. Lots of
peanuts moved under these provisions must be accompanied by a valid
grade inspection certificate and a valid aflatoxin certificate. To be
eligible for disposal into human consumption outlets, such peanuts
after roasting, shall have had the positive lot identity maintained and
be accompanied by a negative aflatoxin certificate. The residual
peanuts, excluding skins and hearts, resulting from roasting under
these provisions, shall be placed in suitable containers acceptable to
AMS and red tagged and disposition shall be that such peanuts are
returned to the handler for further disposition; or that in the
alternative, such residuals shall be positive lot identified by a
Federal or Federal-State Inspection Service, and shall be disposed of,
by the blancher, to handlers who are crushers, or to crushers who are
not handlers under the Agreement only on the condition that they agree
to comply with the terms of paragraph (c) of this section and all other
applicable requirements of this regulation. Roasting under the
provisions of this paragraph shall be performed only by blanchers who
are approved by the Committee.
* * * * *
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.
Sec. 998.100 [Amended]
2. Section 998.100 is amended by removing paragraph (g),
redesignating paragraphs (h) and (i) as paragraphs (g) and (h), and
removing the number ``1996'' in the section heading and adding in its
place the number ``1997''.
3. In Sec. 998.200, the section heading and paragraphs (a), (h)(1)
and (h)(2) are revised and a new paragraph (h)(3) is added to read as
follows:
Sec. 998.200 Outgoing quality regulation for 1997 and subsequent crop
peanuts.
* * * * *
(a) Shelled peanuts. (1) No handler shall dispose of shelled
peanuts for human consumption unless such peanuts are positive lot
identified, certified ``negative'' as to aflatoxin, and certified as
meeting the following requirements:
Maximum Limitations
--------------------------------------------------------------------------------------------------------------------------------------------------------
Unshelled Fall through
Unshelled peanuts, ---------------------------------------------------------
peanuts and damaged Foreign Moisture
Type and grade category damaged kernels and Sound split and Sound whole materials (percent)
kernels minor defects broker kernels kernels Total (percent)
(percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Excluding lots of ``splits''
Runner......................... 1.50 2.50 3.00%; \17/64\ 3.00% \16/64\ x 4.00%; both .20 9.00
inch round \3/4\ inch slot screens.
screen. screen.
Virginia (except No. 2......... 1.50 2.50 3.00%; \17/64\ 3.00%; \15/64\ x 4.00%; both .20 9.00
inch round 1 inch slot screens.
screen. screen.
Spanish and Valencia........... 1.50 2.50 3.00%; \16/64\ 3.00%; \15/64\ x 4.00% both .20 9.00
inch round \3/4\ inch slot screens.
screen. screen.
No. 2 Virginia 1.50 3.00 6.00%; \17/64\ 6.00%; \15/64\ x 6.00%; both .20 9.00
inch round 1 inch slot screens.
screen. screen.
Lots of ``splits''
Runner (not more than 4% sound 2.00 2.50 3.00%; \17/64\ 3.00%; \14/64\ x 4.00%; both .20 9.00
whole kernels. inch round \3/4\ inch slot screens.
screen. screen.
Virginia (not less than 90% 2.00 2.50 3.00%; \17/64\ 3.00%; \14/64\ x 4.00%; both .20 9.00
splits. inch round 1 inch slot screens.
screen. screen.
Spanish and Valencia (not more 2.00 2.50 3.00%; \16/64\ 3.00%; \13/64\ x 4.00%; both .20 9.00
than 4% sound whole kernels). inch round \3/4\ inch slot screens.
screen. screen.
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 2852]]
(2) The term fall through, as used in this paragraph, shall mean
sound split and broken kernels and whole kernels which pass through
specified screens.
* * * * *
(h) * * * (1) Handlers may blanch or cause to have blanched
positive lot identified shelled peanuts, which originated from
Segregation 1 peanuts, that fail to meet the requirements of paragraph
(a) of this section. Lots of peanuts which are moved under these
provisions must be accompanied by a valid grade inspection certificate
and the title shall be retained by the handler until the peanuts are
blanched and certified by an inspector of the Federal or Federal-State
Inspection Service as meeting the requirements for disposal into human
consumption outlets. To be eligible for disposal into human consumption
outlets, such peanuts after blanching, must meet specifications as
listed in paragraph (a) of this section and be accompanied by an
aflatoxin certificate determined to be negative by the Committee. Lots
of peanuts which have been certified as meeting fall through
requirements as specified in paragraph (a) of this section, prior to
blanching, shall be exempt from fall through requirements after
blanching. The residual peanuts, excluding skins and hearts, resulting
from blanching under these provisions, shall be placed in suitable
containers acceptable to the Committee and red tagged and disposition
shall be that such peanuts are returned to the handler for further
disposition; or, in the alternative, such residuals shall be positive
lot identified by the Federal or Federal-State Inspection Service, and
shall be disposed of, by the blancher, to handlers who are crushers, or
to crushers who are not handlers under the Agreement only on the
condition that they agree to comply with the terms of paragraph (g) of
this section and all other applicable requirements of the Agreement.
Blanching under the provisions of this paragraph shall be performed
only by those firms who agree to procedures acceptable to the Committee
and who are approved by the Committee to do such blanching.
(2) Handlers may contract with Committee approved remillers for
remilling shelled peanuts, which originated from Segregation 1 peanuts,
that fail to meet the requirements for disposition to human consumption
outlets heretofore specified in paragraph (a) of this section:
Provided, That such lots of peanuts contain not in excess of 10 percent
fall through. Lots of peanuts moved under these provisions must be
accompanied by a valid grade inspection certificate and must be
positive lot identified and the title of such peanuts shall be retained
by the handler until the peanuts have been remilled and certified by
the Federal or Federal-State Inspection Service as meeting the
requirements for disposition to human consumption outlets specified in
paragraph (a) of this section, and be accompanied by an aflatoxin
certificate determined to be negative by the Committee. Remilling under
these provisions may include composite remilling of more than one such
lot of peanuts owned by the same handler. However, such peanuts owned
by one handler shall be held and remilled separate and apart from all
other peanuts. The residual peanuts resulting from remilling under
these provisions, shall be placed in suitable containers acceptable to
the Committee and red tagged and disposition shall be that such peanuts
are returned to the handler for further disposition; or, in the
alternative, such residuals shall be positive lot identified by the
Federal or Federal-State Inspection Service, and shall be disposed of,
by the remiller, to handlers who are crushers, or to crushers who are
not handlers under the Agreement only on the condition that they agree
to comply with the terms of paragraph (g) of this section and all other
applicable requirements of the Agreement. Remilling under the
provisions of this paragraph shall be performed only by those firms who
agree to procedures acceptable to the Committee and who are approved by
the Committee to do such remilling.
(3) Handlers may contract with Committee approved blanchers for
roasting positive lot identified shelled peanuts, which originated from
Segregation 1 peanuts, that meet the grade requirements of paragraph
(a) of this section but are positive as to aflatoxin. Lots of peanuts
moved under these provisions must be accompanied by a valid grade
inspection certificate and a valid aflatoxin certificate. To be
eligible for disposal into human consumption outlets, such peanuts
after roasting, shall have had the positive lot identity maintained and
be accompanied by an aflatoxin certificate determined to be negative by
the Committee. The residual peanuts, excluding skins and hearts,
resulting from roasting under these provisions, shall be placed in
suitable containers acceptable to the Committee and red tagged and
disposition shall be that such peanuts are returned to the handler for
further disposition; or in the alternative, such residuals shall be
positive lot identified by a Federal or Federal-State Inspection
Service, and shall be disposed of, by the blancher, to handlers who are
crushers, or to crushers who are not handlers under the Agreement only
on the condition that they agree to comply with the terms of paragraph
(g) of this section and all other applicable requirements of the
Agreement. Roasting under the provisions of this paragraph shall be
performed only by blanchers who are approved by the Committee.
* * * * *
Dated: January 9, 1998.
Sharon Bomer Lauritsen,
Acting Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-1052 Filed 1-15-98; 8:45 am]
BILLING CODE 3410-02-P
