[Federal Register Volume 61, Number 194 (Friday, October 4, 1996)]
[Proposed Rules]
[Pages 51811-51835]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-25519]
[[Page 51811]]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Parts 997, 998, and 999
[Docket Nos. FV96-997-1 PR; FV96-998-4 PR and FV96-999-3 PR]
Peanuts Marketed in the United States; Changes in Handling and
Disposition Requirements
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This proposal invites comments on relaxing, for 1996 and
subsequent crop peanuts, several provisions regulating the handling and
disposition of domestically and foreign produced peanuts marketed in
the United States. The rule would eliminate several requirements
covering the disposition of inedible peanuts. At the same time, it
would provide safeguard measures including amendments to the aflatoxin
provisions to prevent inedible peanuts from entering human consumption
outlets. The proposal would increase opportunities for reconditioning
failing peanuts and reduce inspection and handling costs to handlers
and importers. The changes were recommended by the Peanut
Administrative Committee (Committee), the administrative agency which
oversees the quality assurance program under Peanut Marketing Agreement
No. 146 (7 CFR Part 998, Agreement). By law, the same or similar
regulations issued under the Agreement also must be issued under Part
997 regulating non-signatory peanut handlers, and Part 999.600
regulating peanut importers. This proposal includes changes recommended
by the Department to help ensure effective safeguard measures. The
recommended changes should enable the industry to be more competitive
in the changing international peanut market.
DATES: Comments must be received by October 24, 1996.
ADDRESSES: Interested persons are invited to submit written comments
concerning this proposal. Comments must be sent in triplicate to the
Docket Clerk, Fruit and Vegetable Division, AMS, USDA, room 2523-S,
P.O. Box 96456, Washington, DC 20090-6456; FAX: (202) 720-5698. 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: Jim Wendland, Marketing Specialist,
Marketing Order Administration Branch, Fruit and Vegetable Division,
AMS, USDA, P.O. Box 96456, room 2523-S, Washington, D.C. 20090-6456;
telephone: (202) 720-2170, or fax: (202) 720-5698; or 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: (941) 299-4770, or fax: (941) 299-5169. Small
businesses may request information on compliance with this proposed
regulation by contacting: Jay Guerber, Marketing Order Administration
Branch, Fruit and Vegetable Division, AMS, USDA, P.O. Box 96456, room
2523-S, Washington, D.C., 20090-6456; telephone: (202) 720-2491, fax:
(202) 720-5698.
SUPPLEMENTARY INFORMATION: This proposal is issued under Peanut
Marketing Agreement No. 146 (7 CFR Part 998); the non-signatory handler
peanut regulation (7 CFR Part 997); and the peanut import regulation
published in the June 19, 1996, issue of the Federal Register (61 FR
31306, 7 CFR Part 999.600). These programs regulate the quality of
domestically produced peanuts handled by Agreement signers and non-
signers as well as imported peanuts. The first two Parts are effective
under the Agricultural Marketing Agreement Act of 1937, as amended (7
U.S.C. 601-674), hereinafter referred to as the ``Act.'' Part 999 is
effective under section 108B(f)(2) of the Agricultural Act of 1949, as
amended (7 U.S.C. 1445c-3).
The U.S. Department of Agriculture (Department) is issuing this
rule in conformance with Executive Order 12866.
This proposed 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.
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.
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.
About 80 signatory or non-signatory peanut handlers are subject to
regulation under the two domestic programs. There are about 47,000
peanut producers in the 16-state production area. Small agricultural
service firms, which include handlers and importers, 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 have been 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. The import requirements have not been in
place long enough to determine the exact number of peanut importers or
the percentage which qualify as small businesses. However, it can be
assumed that some importers are small entities. Interested persons are
invited to submit information on the regulatory impact of this proposed
rule on small businesses.
The changes to handling requirements proposed in this rule would
enable handlers to more efficiently manage and process their peanut
inventories and make better use of their inedible peanuts, without
jeopardizing safeguard requirements in the current regulations. The
relaxed requirements should reduce handling costs and, thus, increase
returns to handlers. The rule would also ensure that all lots of
peanuts intended for human consumption are chemically tested and
negative to aflatoxin, and that foreign produced peanuts awaiting the
start of the new quota period are properly stored. These changes should
benefit peanut handlers and peanut importers by ensuring that all
peanuts in domestic U.S. human consumption markets are wholesome.
Domestic peanut production in 1995 was 1.76 million tons, with a
farm value of slightly over $1 billion.
The objective of the two domestic programs and the import
regulation 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,
have signed the Agreement. The remaining 30 percent are non-signatory
handlers handling the remaining 5 percent of domestic production. The
1995 duty-free import quota was equal to approximately 2 percent of
1995 domestic production.
Under the three 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
[[Page 51812]]
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 Committee, which is composed of producers and handlers of
peanuts, meets at least annually to review the Agreement's rules and
regulations, which are effective on a continuous basis from one 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.
Public Law 101-220 amended section 608b of the Act 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. The non-signatory handler regulations have been
amended several times thereafter and are published in 7 CFR part 997.
Similarly, recent amendments to the Agricultural Act of 1949
require that all foreign produced peanuts in the domestic market fully
comply with all quality standards under the Agreement. Section
999.600--Specialty Crops; Import Regulations was added to 7 CFR part
999 on June 19, 1996 (61 FR 31306), to establish minimum quality,
identification, certification and safeguard requirements for foreign-
produced farmers' stock, shelled and cleaned-inshell peanuts presented
for importation into the United States.
Thus, the Committee's recommended changes to the Agreement's
regulations, as proposed in this rule, also are proposed for the peanut
non-signer and import regulations. This proposed rule identifies the
corresponding changes to the non-signer and import regulations for each
proposed change to Agreement requirements.
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 of: (1) Decreasing
consumption of peanuts and peanut products; (2) accompanying decreases
in U.S. peanut production and increases in production costs; and (3)
increasing imports of peanuts and peanut products.
The study shows that peanut consumption has declined. Between 1991
and 1994, per capita peanut consumption steadily declined a total of 11
percent. Peanuts used in primary products declined 12 percent, and
peanuts used in peanut butter (the largest product usage) declined 20
percent.
Among other things, the study shows that harvested acreage of
peanuts in the U.S. has declined 25 percent between 1991 and 1995.
Production has fluctuated downward, with 1995 production 30 percent
below that of 1991. Farm value of peanut production has dropped 29
percent (from $1.4 billion to slightly over $1 billion) in the same
period.
The study points to recent increases in the duty-free import quota
for raw peanuts. The volume of imported peanuts has, indeed, increased
due to recent significant relaxations of the duty-free quota enacted
through the legislation to implement the North American Free Trade
Agreement (NAFTA) and the Uruguay Round Agreements under the General
Agreement on Tariffs and Trade (GATT). Prior to 1994, the volume of
imported peanuts was limited, in most cases, to 1.71 million pounds
annually. However, the Schedule of the United States annexed to NAFTA,
implemented on January 1, 1994, provided duty-free entry for up to
approximately 7.43 million pounds of qualifying peanuts from Mexico.
For 1996, the duty-free access for Mexican peanuts increased to
approximately 7.88 million pounds. In calendar year 2008, access for
Mexican peanuts will be unlimited. In addition, the United States
Schedule to the Uruguay Round Agreements under GATT increased the
peanut import quota to 74.5 million pounds in 1995, with additional
annual increases of approximately 10 million pounds to reach a ceiling
of 125 million pounds by the year 2000 for all imported peanuts.
The study shows that imports of peanut butter from 1991 to 1996
increased 116 percent. More significantly, the study reports that
imported peanut butter's share of U.S. peanut butter consumption
increased 12 fold between 1988 and 1993.
The study also makes projections for the near future. Farmer
production costs and revenue are projected to be equal by the year
2000, as are handler costs and revenue. Total imports of shelled
peanuts and paste are expected to increase 50 percent by the year 2000
and the U.S. position in the world market is expected to drop 7 percent
between 1995 and 1996.
In addition, the modifications in the Federal government's peanut
quota and price support program under the Federal Agriculture
Improvement and Reform Act of 1996 will result in the domestic industry
undergoing changes over the next few years. The study shows that the
quota poundage was reduced over 20 percent between 1991 and 1995, and
the support price dropped from $670 per ton in 1995 to $610 in 1996.
Further decreases in the support price are scheduled over the next few
years.
The Committee agrees that all of these factors combined show that
the domestic peanut industry is in decline and that the outlook is not
expected to change without some positive intervention by the industry.
In mid-1994, peanut industry members began to discuss needed
changes in the handling of peanuts. In mid-1994, the Committee
appointed a subcommittee to evaluate the present program and to
recommend changes. The Agreement's handling regulations were evaluated
with the intent of streamlining procedures and making them consistent
with current industry economies and technological developments.
Different recommendations were developed for streamlining both
incoming and outgoing handling procedures. The proposed changes focus
on handlers' freedom to prepare and dispose of peanut lots according to
economic incentives of the marketplace. For instance, current
restrictions that prevent certain lots failing quality requirements
from being blanched or remilled would be removed so that more peanuts
could be reconditioned to meet human consumption requirements. Also,
provisions throughout the regulations under the Agreement require that
certain lots be kept separate and apart from other, similar peanut
lots. For the most part, these provisions tend to limit handlers'
flexibility to move and recondition peanuts. Such provisions also may
work against optimum utilization of equipment and facilities, and
prevent a handler from making the most economic use of their peanut
inventories. Peanut processing machinery has been improved through
technological advances to the point that virtually any lot of peanuts,
regardless of original (incoming) quality, can now be shelled, remilled
and/or blanched (processed) to meet outgoing quality requirements of
the Agreement and the non-signer program. In the final analysis, it was
the opinion of the subcommittee that handlers should have
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the option of deciding whether it is more economically advantageous to
recondition a lot or send it to an inedible peanut outlet.
Subcommittee members also recommended that many of the requirements
controlling disposition of inedible peanuts be removed because those
requirements should be placed on buyers rather than handlers. The
subcommittee contended that peanuts either pass or fail quality and
aflatoxin requirements, and the requirements limiting disposition based
on aflatoxin content (restricted and unrestricted dispositions) should
be removed.
The subcommittee contended further that these changes, primarily
relaxations, could be made without limiting the effectiveness of the
Agreement's quality assurance program. As long as all peanut lots
intended for human consumption continue to be sampled and tested
against current outgoing requirements, the industry's high quality
standards would be maintained.
These recommendations represent a fundamental change in the
Agreement's handling regulations. The full Committee met three times
from March to May, 1996, to review all of the recommendations. At a May
23, 1996, meeting the Committee recommended the following changes to
the Agreement's incoming and outgoing regulations for 1996 and
subsequent crop peanuts. After review of the recommendations, the
Department concurs that the recommended changes would help the industry
and be in the public interest. This proposed rule would not increase
reporting and recordkeeping burdens under the Paperwork Reduction Act
and, thus, would not change the current impact of those burdens on
small businesses. Moreover, costs imposed for required testing would
not be applied disproportionately to small businesses. Therefore, the
AMS has determined that this proposed rule would not have a significant
economic impact on a substantial number of small entities.
In accordance with the Paperwork Reduction Act of 1988 (44 U.S.C.
Chapter 35), information collection requirements that are contained in
this proposal have been previously approved by the Office of Management
and Budget (OMB) and have been assigned OMB Nos. 0581-0067 (for
signatory handlers), 0581-0163 (for non-signers), and 0581-0176 (for
importers).
This proposed rule would not increase the reporting and
recordkeeping burden on handlers and importers regulated under the
three programs, and may even result in an overall reduction in
reporting and recordkeeping requirements.
Following explanation of each recommended change to the Agreement's
regulation, the corresponding proposed changes to the non-signatory
regulation and to the import regulation are discussed.
Incoming Regulations
Loose Shelled Kernels
The Committee recommended amending Sec. 998.100 Incoming quality
regulation by removing paragraph (d) Loose shelled kernels which
regulates the acquisition of loose shelled kernels (LSKs) and other
defective kernels. The Committee believes that the regulations should
focus more on outgoing quality and less on the shelling and milling
processes necessary to meet the outgoing, human consumption
requirements. New, high technology milling and blanching equipment
enables handlers to recondition failing peanut lots that could not have
been reconditioned when the regulations were promulgated. Therefore, it
is no longer necessary to impose restrictions that hinder efficiency of
handling operations and result in the loss of potentially good quality
peanuts. Thus, paragraph (d)(1) restrictions on acquiring farmers stock
with more than 14.49 percent LSKs and 5 percent fall-through from
specified screen sizes would be removed.
For the non-signer regulation, paragraph (d) Loose shelled kernels
in Sec. 997.20, corresponds to paragraph (d) of the Agreement's
Sec. 998.100. Paragraph (d) of the non-signer regulation would be
removed for the reasons cited above and to be consistent with
corresponding changes to the Agreement.
For the import regulation, paragraph (b)(1)(iv) Loose shelled
kernels of Sec. 999.600 also would be removed for the reasons cited
above.
The Committee recommended removing paragraph (d)(2) which requires
that handlers submit to the Committee diagrams of their handling
facilities and procedures. This provision is no longer considered
necessary for the Committee's oversight of the signatory handlers.
Therefore, it would also be removed.
The non-signer regulation and the import regulation do not have
paragraphs corresponding to paragraph (d)(2) of Sec. 998.100.
Seed Peanuts
The Committee recommended removing the requirement in Sec. 998.100,
paragraph (e) Seed peanuts, that requires handlers who receive or
acquire seed residuals to hold and mill such peanuts separate and apart
from other edible quality peanuts. The Committee concluded that as long
as the peanuts sent to human consumption outlets must ultimately meet
outgoing requirements, including certification as negative to
aflatoxin, it is not necessary to hold them separate and apart from
other lots also destined for edible consumption. Therefore,
Sec. 998.100(e) would be amended to remove such requirement.
For the non-signer regulation, paragraph (e) Seed peanuts in
Sec. 997.20 contains different wording but the same meaning and intent
as the Agreement's seed provisions. Changes to the Agreement's
paragraph (e) concerning holding and milling seed peanuts separate and
apart from other peanuts would be made to Sec. 997.20 paragraph (e) of
the non-signer regulation for the reasons cited above and to be
consistent with corresponding changes to the Agreement.
For the import regulation, paragraph (b)(2) Seed peanuts in
Sec. 999.600, also would be changed accordingly. Further, paragraph
(b)(2) provides that Segregation 2 and 3 peanuts may be shelled for
seed purposes, but must be dyed or chemically treated to indicate the
peanuts are unfit for human or animal consumption. This requirement is
the same as that in paragraphs (i)(1) and (2) of Sec. 998.200--which
are recommended to be removed (discussed below). Corresponding changes
would be made to paragraph (b)(2) of Sec. 999.600. Finally, the
Department proposes removing the second sentence of the import
regulation paragraph (b)(2) on reporting disposition to the Secretary.
This information is adequately covered in the last two sentences of the
same paragraph.
Oilstock
In paragraph (f) of Sec. 998.100, the Committee recommended removal
of the current prohibition on exporting inedible quality peanuts to
Canada or Mexico and removal of references to ``fragmented'' peanuts.
Committee members expressed the point that other countries ship
inedible peanuts and unfragmented peanuts to Canada and Mexico, as well
as to other international markets. The Committee believes that domestic
handlers should not deny themselves access to the same international
markets, thereby optimizing their returns.
Further, the Committee believes that it would be better to remove
the term ``fragmented'' from paragraph (f) and allow the term
``peanuts'' to refer to peanuts in any form, including
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fragmented kernels, which may be acquired by handlers and disposed of
to crushing or exported. The Department concurs with this
recommendation. The term ``shelled'' is also removed from paragraph (f)
where appropriate for the same reason.
For the non-signer regulation, the prohibition on exports to Canada
and Mexico and the requirement of fragmentation would be removed to
make paragraph (f) of Sec. 997.20 consistent with the proposed changes
to the regulations under the Agreement.
In Sec. 999.600 of the import regulation, paragraph (b)(3) does not
restrict exports and so no corresponding change is made.
Finally in Sec. 998.100, the Committee recommended removal of
paragraph (j) which covers disposition of shelled peanuts for use as
animal feed. This paragraph would be removed, since it contains
restrictions which are not necessary to safeguard the quality of
peanuts for human consumption. Appropriate safeguard measures are
provided in proposed replacement provisions discussed below.
The corresponding paragraph in Sec. 997.20 of the non-signer
regulation, is paragraph (h)--which also would be removed for the
reason cited. Paragraph (i) of the non-signer regulations would be
retained because that paragraph applies to producer/handlers handling
peanuts of their own production. This paragraph provides that such
farm-stored peanuts must meet the requirements of the non-signer
regulation. Paragraph (i) of the non-signer incoming regulation would
be retained and redesignated as paragraph (g) in Sec. 997.20.
The import regulation does not have a paragraph corresponding
specifically to the Agreement's paragraph (j) on animal feed. The topic
is addressed in paragraph (e) of the outgoing regulations, the removal
of which is discussed below.
Outgoing Regulations
Paragraph (a) of Sec. 998.200 Outgoing quality regulation provides
that peanut lots meeting the Indemnifiable Grade requirements in Table
2 do not have to be tested and certified as negative to aflatoxin. The
Committee recommended modification of this requirement to provide that
all lots (including Indemnifiable Grade lots) intended for human
consumption be chemically tested and certified ``negative'' as to
aflatoxin content. This change would make the Agreement regulations
consistent with current industry practice. Most, if not all, buyers
require that all peanuts for human consumption be certified negative as
to aflatoxin. This proposed amendment would, therefore, have a twofold
purpose. It would codify a practice which is common in the industry,
and would ensure that the regulations effectuate the objectives of the
Agreement.
Under the current outgoing regulation, peanut lots meeting the
grade requirements of Table 1, Other Edible Quality, must be certified
negative to aflatoxin prior to shipment to the buyer. This requirement
would not be changed. Under current industry practice, Indemnifiable
Grade peanut lots may be chemically tested and certified while the lot
is in transit to the buyer. This practice could be continued under the
proposed procedures and the actual transfer of lot ownership would not
normally occur until certification has been received by the handler. A
shorter turn-around time for chemical analysis is now possible with
current testing practices and equipment, overnight and express mail
services, and fax transmissions.
The Committee recommended that the regulatory language affecting
this change should be added to the regulatory text of paragraph (a)
after Table 2. However, the Department proposes revising paragraph (a)
between Table 1 and Table 2. The proposed, revised text of paragraph
(a) more clearly specifies the intent of the Committee's
recommendation, and removes current text that some consider misleading
of the industry's common practices. Additional conforming changes would
be made to the paragraph.
Paragraphs (a)(1) (i) and (ii) in Sec. 997.30 of the non-signer
regulation and paragraphs (c)(1) (i) and (ii) in Sec. 999.600 of the
import regulation correspond to paragraph (a) in Sec. 998.200 of the
signer regulation. Both sets of paragraphs would be revised for the
reasons cited above and to correspond with the proposed changes to the
Agreement's outgoing regulation.
The Committee recommended changing the title of paragraph (c)
Pretesting shelled peanuts of Sec. 998.200. The new title is proposed
to be Sampling and testing shelled peanuts to include the sampling
process which comprises a significant part of the current paragraph. As
a conforming change, the beginning of the first sentence of revised
paragraph (c) would be changed to add the words ``Prior to shipment,* *
*.'' Also, the first paragraph is proposed to be numbered (c)(1)
because a paragraph (c)(2) is cited in the Code of Federal Regulations.
Paragraph (c) is otherwise unchanged.
A conforming change would be made to the title of corresponding
paragraph (c) of the non-signer regulation. No conforming change is
necessary in the import regulation. A conforming change also would be
made to non-signer paragraph (c)(2) which currently specifies that
handlers shall cause samples to be ground by the inspection service
prior to shipment. The revised paragraph would provide that the non-
signer handler shall cause the sample to be ground for testing.
Paragraph (c)(4) of Sec. 998.200 specifies the maximum allowable
aflatoxin content for edible peanut lots as 15 parts per billion (ppb).
Such lots are certified as ``negative'' to aflatoxin. Paragraph (c)(4)
also specifies a ``negative'' content for inedible peanut lots as 25
ppb or less. Under the current regulation, failing lots with aflatoxin
content in excess of 15 ppb but 25 ppb or less are considered
``unrestricted,'' which means the peanuts can be used in certain non-
human consumption peanut outlets such as animal feed, wildlife feed,
etc. ``Unrestricted'' use may provide more of a financial return for
handlers while not posing a food safety threat to consumers. Peanut
lots with aflatoxin content of more than 25 ppb are certified as
``restricted'' and can only be crushed for oil or exported. Aflatoxin
certificates from USDA and private laboratories specify unrestricted
lots as ``negative'' and usually do not include the numerical count of
the lot's aflatoxin content. Currently, restricted lot certificates
must cite the numerical aflatoxin count of the failing lot.
The Committee's recommendations to revise paragraph (h) and remove
paragraphs (j) and (l) of Sec. 998.200 would remove, among other
things, procedures relevant to ``unrestricted'' and ``restricted'' lots
of peanuts. Restrictions on the disposition of failing peanut lots
would be relaxed under the proposed rule. Failing lots of peanuts
composed on LSKs, fall through and pickouts from initial shelling
operations would be limited to crushing or export unless certified as
to aflatoxin content. If so certified, the lots could go to other non-
edible uses. Other failing lots and residuals from blanching and
remilling also could be sold to any buyer provided that the lot is
positive lot identified (PLI), certified as to aflatoxin content, and
in specified containers. Therefore, there is no reason to retain the
phrase in paragraph (c)(4) of Sec. 998.200 that specifies 25 ppb or
less as ``negative'' to aflatoxin for inedible peanuts. Such a
requirement would only cause confusion under the proposed regulations.
[[Page 51815]]
Further, the proposed replacement paragraphs ((f), (g), and (h) of
Sec. 998.200) would require that failing lots be ``certified as to
aflatoxin content''--which means a numerical count rather than a
general term covering a ppb spread from 16 to 26 ppb under current
practice. For these reasons, the Department proposes removing reference
to 25 ppb or less as ``negative'' for inedible peanuts. For peanut lots
testing more than 15 ppb, the aflatoxin certificate would be required
to show the lot's numerical aflatoxin count.
Currently, peanut lots meeting human consumption requirements may
be certified as ``negative'' to aflatoxin--meaning that the chemical
analysis shows the peanuts have 15 ppb or less aflatoxin content. The
chemical analysis certificates for such lots usually are certified as
``negative as to aflatoxin for edible peanuts'' (or similar language).
The certificates do not have to specify the numerical aflatoxin count
of the lot.
If this proposed rule becomes effective, USDA and private aflatoxin
laboratories would specify the numerical aflatoxin content on
certificates issued on inedible peanut lots testing more than 15 ppb.
Aflatoxin certificates on lots which fail grade requirements but are
tested at 15 ppb or less, would be certified as ``negative to
aflatoxin'' for inedible peanuts. Non-signer and imported peanut lots
meeting edible requirements would also be required to be certified as
negative to aflatoxin.
In the non-signer regulations, a corresponding change would be made
to paragraph (a)(2) of Sec. 997.30. In the import regulation, paragraph
(f)(3) establishes the restricted category of inedible peanuts as more
than 25 ppb aflatoxin content. That paragraph would be removed for the
reasons cited above and to correspond with other recommendations of the
Committee.
Paragraph (d) Identification of Sec. 998.200 is proposed to be
amended by adding a clause in the first sentence establishing the
maximum lot size as 200,000 pounds. The maximum limit specification
occurs elsewhere in the Agreement's regulatory language and is proposed
to be added here for consistency and clarity. The phrase would be
removed elsewhere in the Agreement regulations, but would apply to all
sampling situations.
In the non-signer regulation, section Sec. 997.50 applies to
identification, among other topics. While the maximum lot size is
specified elsewhere in the regulations, the same sentence added to
paragraph (d) of Sec. 998.200 is added to Sec. 997.50 Inspection,
chemical analysis, certification and identification.
In the import regulation, paragraph (d)(3)(ii) in Sec. 999.600
already specifies the 200,000 pound maximum lot size for farmers stock,
shelled, and cleaned-inshell peanuts for sampling purposes.
Paragraph (f) Interplant transfer of Sec. 998.200 was revised last
year and currently provides that peanut lots may be transferred to any
handler or storage without PLI and certification, and that, upon
disposition for human consumption such transferred peanuts must meet
edible requirements. This paragraph is consistent with the Committee's
intention to remove provisions which restrict movement and increase
costs of handling peanuts. As long as any lot of peanuts intended for
human consumption are required to be sampled and meet outgoing quality
requirements and are PLI, any additional requirements on the transfer
of peanuts between a handler's plants, that do not affect outgoing
quality, are irrelevant. Further, handlers would be required to keep
records of all such transfers.
In the non-signer regulation, paragraph (f) covers the transfer of
non-signer peanuts between plants. This paragraph would be removed (as
discussed below).
The import regulation does not have corresponding requirements on
the transfer of imported peanuts between plants, and, therefore, no
conforming change is necessary for that program.
Disposition of Failing Quality, Inedible Peanuts
Finally, the Committee recommended streamlining Sec. 998.200 by
removing 16 paragraphs covering disposition requirements and procedures
concerning inedible (failing quality) peanuts used for research
projects, wildlife feed, rodent bait, chemically treated seed,
fragmented export, meal from crushing, and animal feed. The paragraphs
proposed to be removed from Sec. 998.200 are:
(1) Paragraph (g)(1): defining LSKs, fall through, and pickouts and
inedible quality peanuts;
(2) paragraph (g)(2): keeping such peanuts separate and apart from
other peanuts;
(3) paragraph (g)(3): disposing of such peanuts to research
projects, wildlife feed, rodent bait, chemical treatment for seed, and
export to countries other than Canada and Mexico, designations of
restricted and unrestricted failing lots, and limiting disposition of
meal from crushing;
(4) paragraph (g)(4) specifying further requirements on the
transfer of inedible peanuts;
(5) paragraph (h)(1) specifying further requirements on identifying
and reporting the transfer of inedible peanuts;
(6) paragraph (h)(3) specifying further requirements regarding the
disposition of failing quality Segregation 1 peanuts to specified
outlets;
(7) paragraph (i)(1) specifying disposition of seed peanuts and
seed residuals;
(8) paragraph (i)(2) specifying the chemical treatment of seed
peanuts;
(9) paragraph (j)(1) specifying requirements on commingling and
disposition of Segregation 2 and 3 peanuts;
(10) paragraph (j)(2) specifying further requirements on
commingling and disposition of Segregation 2 and 3 peanuts;
(11) paragraph (k)(1) regulating the exportation of Segregation 1
peanuts;
(12) paragraph (k)(2) specifying further requirements on the
disposition of Segregation 1 peanuts to inedible outlets;
(13) paragraph (l)(1) regarding the unrestricted disposition of
shelled peanuts;
(14) paragraph (l)(2) regarding the restricted disposition of
shelled peanuts;
(15) paragraph (m)(1) specifying requirements for the disposition
of shelled peanuts for domestic animal feed; and (16) paragraph (m)(2)
specifying coloring or dyeing and other requirements for disposition as
domestic animal feed.
The proposed changes include removal of paragraphs (j) and (k) from
Sec. 998.200. These paragraphs address disposition requirements for
farmers stock peanuts. The Committee believes that these two paragraphs
would no longer be needed because current paragraph (f) Oilstock of
Sec. 998.100 Incoming quality regulations provides that handlers may
acquire Segregation 2 and 3 peanuts for crushing or export and that the
Area Association supervise such dispositions. Handlers may not acquire
Segregation 2 or 3 peanuts for purposes other than crushing or export.
Handlers may also acquire for crushing or export peanuts originating
from Segregation 1 farmers stock which are milled and fail human
consumption quality and are PLI.
Paragraph (j)(3) of the outgoing regulation provides handlers with
exemption from assessments for acquisitions of Segregation 2 and 3
peanuts used for crushing or export. The Committee intends that the
assessment exemption for such peanuts should remain in effect, but did
not specifically discuss retention of the paragraph.
[[Page 51816]]
Paragraph (j)(3) was added to the regulatory language last year (60 FR
36208, July 14, 1995) to make clear the provisions of Secs. 998.31 and
.48 of the Agreement. Because paragraph (j)(3) is relatively new in the
regulatory text, and because a corresponding provision in the non-
signer regulation is required, the Department proposes that the
exemption for Segregation 2 and 3 peanuts acquired for oilstock or
export remain in the regulation. The exemption paragraph would be
redesignated as paragraph (i) in Sec. 998.100 of the incoming
regulation, and revised to remove the references to the removed
paragraphs (j)(1) and (j)(2) in Sec. 998.200.
A relaxation also is recommended by the Committee in the current
blanching (h)(2) and remilling (h)(4) paragraphs. These provisions
prohibit the blanching or remilling of peanut lots which exceed certain
defect levels--10 percent total unshelled peanuts and damaged kernels,
or 10 percent foreign material, and, for remilling, 10 percent fall
through. The restrictions on the amount of damage and foreign material
in out-of-grade lots would be removed so that handlers would have more
opportunity to recondition failing lots. This would increase handler
flexibility, reduce inspection and handling costs, and enable more
peanuts to be reconditioned and shipped for human consumption. The
Committee recommended that the restriction on 10 percent fall-through
for remilling peanuts remain in effect. The non-signer and import
regulations do not contain the same limitations on blanching and
remilling of defective lots, so the corresponding paragraphs
(Sec. 997.40(a) and Sec. 999.600(f), respectively) in those regulations
do not need to reflect this proposed change.
The Committee indicated that the present regulations are too
restrictive and limit handlers' ability to recondition potentially
edible peanuts. Further, as long as peanuts are required to meet the
outgoing requirements, including negative aflatoxin certification, it
should not matter from which categories the peanuts originated. The
Committee recommended removal of many of the restrictions as proposed
in this rule and the addition of appropriate safeguards, as discussed
below. The Committee believes these safeguard requirements would help
ensure that inedible peanuts do not end up in human consumption
outlets.
The provisions covering peanut disposition would be replaced by two
new paragraphs and revisions would be made in two existing paragraphs.
New paragraphs (f) (1), (2) and (3) of the outgoing regulation would
modify Sec. 998.32 of the Agreement and specify disposition
requirements for edible and non-edible peanut lots. New paragraph (g)
would provide for disposition of inedible milled peanuts (``sheller
oilstock residuals''). Proposed paragraph (h)(1) would cover the
blanching of inedible peanuts (revised from current paragraph (h)(2)).
Proposed paragraph (h)(2) would cover the remilling of inedible peanuts
(revised from current paragraph (h)(4)).
The Committee believes that safeguard measures in the current
regulations should be maintained in the proposed changes because peanut
lots sent to human consumption outlets would still need to meet the
quality requirements of paragraph (a) and be certified negative to
aflatoxin. Peanuts which cannot be reconditioned (or which a handler
chooses not to recondition) to meet outgoing quality requirements would
continue to be required to be PLI, red tagged, and maintained in
appropriate containers. If disposed of to inedible peanut outlets other
than crushing or export, failing peanuts would be required to be
certified as to aflatoxin content and that certification would
accompany the lot to the inedible peanut outlet. Paragraph (f)(2) also
would require that the shipping papers state that the peanuts are not
to be used for human consumption. All inedible dispositions would be
reported to the Committee.
In proposed paragraph (f)(3), failing quality peanuts not sent to
such inedible outlets must be either crushed or exported as prescribed
in new paragraph (g) or blanched or remilled pursuant to new paragraphs
(h)(1) and (2), respectively. Segregation 2 and 3 farmers stock peanuts
would be allowed to be milled for seed. This is a standard procedure
for obtaining seed peanuts.
New paragraph (g) of Sec. 998.200 would provide that peanuts and
portions of peanuts which result from milling operations are identified
as ``sheller oilstock residuals.'' Such peanuts may include loose
shelled kernels, fall through, and pick-outs as defined in that
paragraph and whole lots of failing peanuts that a handler may choose
to crush or export. Under the proposed paragraph (g), sheller oilstock
residuals which are certified as to aflatoxin content could be disposed
of ``domestically,'' which means that the peanuts could be sent to an
inedible peanut outlet pursuant to proposed paragraph (f)(2) or crushed
for oil. To be sent to an inedible outlet, sheller oilstock residuals
would have to be certified as to aflatoxin content. Such peanuts also
could be exported. Seller oilstock residuals not certified as aflatoxin
content could only be crushed or exported as specified in proposed
paragraph (g). Further, the shipping papers accompanying such lots
would specify that disposition limitation. All movement of sheller
oilstock residuals would be reported to the Committee--which is
consistent with current reporting requirements. However, the Department
proposed to establish the following additional safeguard requirement to
help ensure that inedible peanut lots are not disposed of to
inappropriate inedible peanut outlets.
The Committee's recommended changes in this proposed rule would
remove nearly all restrictions on handlers selling peanuts to inedible
peanut outlets. To help ensure that peanut lots with excessively high
aflatoxin content are not used in inedible outlets where aflatoxin
contamination could be transferred to human consumption products, the
Department proposes requiring that no peanut lot disposed to an
inedible outlet, other than for crushing or export, could exceed 300
ppb aflatoxin content. The 300 ppb content ceiling is the maximum
aflatoxin content recommended by the Food and Drug Administration (FDA)
for peanuts used in animal (livestock) feed. To make this change, an
additional paragraph (2) specifying the restriction would be added to
the proposed sheller oilstock residual paragraph (g). Proposed
paragraph (g) would be designated as (g)(1). The same provision would
be added to the non-signer (Sec. 997.40(c)(2)) and import regulations
(Sec. 999.600(e)(2)(ii)).
Thus, the affect of this proposed rule is to raise from 25 to 300
ppb aflatoxin content limit for failing peanut lots which can be
disposed to inedible outlets. Under the proposed changes to the
handling regulations, handlers would be allowed to recondition failing
peanut lots, and would have more incentive to do so. Handlers would
have the option of crushing a lot for oil or reconditioning the lot.
Lots above 300 ppb aflatoxin content which are not economically
beneficial to recondition would have to be crushed or exported. With
current technologies, reconditioning should be possible for most all
failing peanut lots. Whole and residual lots exceeding 300 ppb
aflatoxin content could be commingled until sufficient volume is
accumulated for crushing disposition.
According to the FDA, residuals from the reconditioning of lots
exceeding 300 ppb and the meal from crushed lots exceeding 300 ppb
should not be used as animal feed.
[[Page 51817]]
To increase peanut handlers and importers awareness of wholesome
peanut uses, the Department includes in this preamble discussion a
summary of FDA's recommended maximum aflatoxin content for domestic
animal feed. This information is summarized from FDA's Compliance
Policy Guides (Sec. 683.100) revised March 28, 1994. In that guide, FDA
states that ``Action levels for aflatoxin in animal feed now apply also
to peanut products (peanuts, peanut meal, peanut hulls, peanut skins
and ground peanut hay).'' With regard to animal feeds, the FDA guide
provides as follows:
--Peanut products intended for finishing (i.e., feedlot) beef cattle:
Action level 300 ppb.
--Peanut products intended for finishing swine of 100 pounds or
greater: Action level 200 ppb.
--Peanut products intended for breeding beef cattle, breeding swine, or
mature poultry: Action level 100 ppb.
--Peanut products and feed ingredients intended for immature animals:
Action level 20 ppb.
--Peanut products and other feed ingredients intended for dairy
animals, for animal species or uses not specified above, or when the
intended use is not known: Action level 20 ppb.
In the current regulations under the Agreement, inedible peanut
lots certified at 26 or more ppb cannot be sent to certain inedible
peanut outlets where the peanuts would not be subject to heating in the
preparation for inedible use or for uses which would allow the
aflatoxin to be passed to another food product entering human
consumption channels. This is a food safety measure which helps prevent
aflatoxin-contaminated peanut lots from being used in certain inedible
outlets--such as dairy cattle feed where the aflatoxin could be passed
to human consumption in the milk.
This proposed rule would change the certification protocols for
inedible peanut lots. Currently, peanut lots which meet both grade
quality (paragraph (a)) and aflatoxin requirements (15 ppb or less) are
certified as ``negative as to aflatoxin for edible quality peanuts''--
or similar language.
Further, lots failing grade requirements but which are certified as
25 or less ppb are currently certified as ``negative to aflatoxin for
inedible peanuts.'' Under the proposal, peanut lots meeting both grade
and aflatoxin requirements would continue to be certified as negative
to aflatoxin for edible peanuts and the aflatoxin count would not be
shown on the aflatoxin certificate.
For peanut lots which fail grade requirements but which meet
aflatoxin requirements, the proposed rule would provide that the
aflatoxin certificate show the aflatoxin count of the lot and state
that the peanuts are inedible grade quality. The Department believes
this would assist handlers in marketing inedible quality peanuts. For
example, a lot which is inedible grade quality but tests as 5 ppb would
be certified as ``inedible quality peanuts with 5 ppb aflatoxin
content''--or similar language.
Finally, the proposed rule would provide that the aflatoxin
certificate of any peanut lot which exceeds 15 ppb aflatoxin content,
regardless of grade certification, would show the numerical count of
aflatoxin content and state that the lot is inedible because of
excessive aflatoxin content--or similar language. The certification
protocols would be implemented by the USDA and PAC-approved
laboratories and would be applied to signer, non-signer, and imported
peanuts.
The Department also proposes changes to paragraph (h). In the
proposed text for the revised blanching and remilling paragraphs, the
phrase ``which originated from Segregation 1 peanuts'' was not
included. No explanation was provided in the Committee meeting or
meeting minutes as to the benefit of removing this important safeguard
provision. The phrase, at the very least, serves as a reminder that
only Segregation 1 peanuts may be shelled and sent to edible
consumption outlets. Thus, the Department proposes re-inserting the
phrase ``which originated from Segregation 1 peanuts'' in the blanching
(h)(1) and remilling (h)(2) paragraphs proposed by the Committee.
Also, the Committee recommended that the titles of the revised
blanching (h)(1) and remilling (h)(2) paragraphs include reference to
Committee approved blanchers and remillers, respectively. However, the
Department proposes removing the reference in the titles because the
reference is not necessary.
In non-signer Sec. 997.30 Outgoing regulation, paragraphs (f)
Transfer between plants and (g) Residuals from seed peanuts correspond
to the same topics covered in the Agreement's outgoing regulation, and
would be removed, accordingly. The subject matter in the two paragraphs
would be replaced with a revised Sec. 997.40 Reconditioning and
disposition of peanuts failing quality requirements. Current
Sec. 997.40 covers certain outgoing requirements corresponding to those
in the Agreement's Sec. 998.200. Paragraphs (a)(1) and (2) of
Sec. 997.40 covers remilling and blanching of inedible shelled peanuts.
These two paragraphs would be revised, and the order reversed, to
conform with the Committee's recommended revised blanching and
remilling paragraphs (h)(1) and (2). However, the paragraphs are not
identical to the Agreement provisions because non-signers are not
required to receive Department approval prior to moving a failing
shelled lot to a blancher or remiller. Also, the non-signer regulations
do not limit remilling and blanching to Committee approved remillers,
blanchers or exporters. Therefore, those requirements are not included
in the proposed revised non-signer blanching and remilling paragraphs.
The provisions of current non-signer paragraph (a)(3) of
Sec. 997.40 covering the ownership of peanuts moved for custom
blanching or remilling, and the certification and reporting of such
peanuts, are included in the revised Sec. 997.40 blanching and
remilling paragraphs (d)(1) and (2), and would be deleted in this
proposed rule. Likewise, the contents of current paragraph (a)(4) on
the bagging, red tagging and disposition of blanched and remilled
peanuts are included in the revised Sec. 997.40(d)(1) and (2). This
would make the non-signer blanching and remilling paragraphs conform
with the Agreement's revised blanching and remilling paragraphs.
Four paragraphs in Sec. 997.40(b) Disposition of shelled peanuts
failing quality requirements for human consumption cover the various
disposition procedures and outlets for failing quality, inedible
peanuts. These requirements would remain the same as, but organized and
worded differently from, the Agreement's Sec. 998.200 requirements in
paragraphs (g) through (m)--most of which would be removed and replaced
as described above. The provisions removed from paragraph (b) of
Sec. 997.40 are:
(1) Paragraph (b)(1) regulating the disposition of shelled peanuts
to unrestricted crushing, fragmenting or dyeing, export, animal feed,
wildlife feed, and rodent bait;
(2) paragraph (b)(2) specifying further requirements for
disposition to animal feed (coloring or dyeing, PLI, valid aflatoxin
certification, and reporting);
(3) paragraph (b)(3) regulating the disposition of shelled peanuts
to restricted crushing, and export;
(4) paragraph (b)(4) regulating the disposition of Segregation 2
and 3 farmers stock peanuts to restricted and
[[Page 51818]]
unrestricted meal, crushing and export; and
(5) paragraph (b)(5) specifying reporting requirements for LSKs,
fall through, and pickouts.
These paragraphs would be removed for the same reasons and to
correspond with the proposed changes to the Agreement's outgoing
regulation.
Paragraph (b)(6) of Sec. 997.40 would be retained because it
exempts from assessments, Segregation 2 and 3 farmers stock peanuts
acquired by non-signatory handlers for crushing or export. The
corresponding paragraph in the Agreement is retained and redesignated
in this proposed rulemaking. Therefore, such Segregation 2 and 3
peanuts acquired by non-signatory handlers also would continue to be
exempt from assessments. Paragraph (b)(6) would be revised and
redesignated as paragraph (b) under Sec. 997.51 Assessments and the
existing text in Sec. 997.51 would be redesignated as paragraph (1).
There is no authority to assess imported peanuts.
Several changes would be made to the import regulation regarding
disposition of inedible peanuts. Paragraph (c)(3) of Sec. 997.40 would
be moved and replace current paragraph (e). To make the same changes to
the import regulation, the provisions in paragraphs (e) and (f) would
be revised and placed under new paragraph (e), and paragraphs (g) and
(h) would be redesignated as (f) and (g), respectively.
New paragraph (e)(1) of Sec. 999.600 provides an overview for
reconditioning imported lots. New paragraph (e)(2) covers failing lots
disposed of to inedible uses such as animal feed, wildlife feed, seed
peanuts and meal, which are currently regulated under paragraphs (e)
and (f). Dispositions to these inedible outlets would be required to be
positive lot identified with red tags, bagged, and the bill of lading
would state that the peanuts could not be used for human consumption.
This proposal would remove all references to ``restricted'' and
``unrestricted'' failing peanuts and the limitations on the disposition
of restricted and unrestricted lots.
Proposed new paragraph (e)(3) of the import regulation would cover
disposition of failing quality peanuts (``sheller oilstock residuals'')
to crushing or export. Peanuts covered under the new (e)(3) would be
primarily loose shelled kernels, fall through and pickouts from milling
operations, but may also include any other failing lot that an importer
chooses to crush or export. Identification, certification and labeling
requirements are the same as those in corresponding paragraphs proposed
for the Agreement.
New paragraph (e)(4) would specify reporting requirements for
inedible lots pursuant to the reporting requirements in the safeguard
procedures.
Finally, a paragraph would be added at the end of the regulations
under the Agreement text which would specify that certain records would
be required to be maintained pursuant to Sec. 998.43 of the Agreement.
These records would pertain to peanuts which are not certified for
human consumption. In addition to maintaining certain records, the
Agreement provides that all records would be made available to
Committee staff and to representatives of the Secretary, as is
necessary to document compliance with Agreement regulations. The
additional provision does not represent an increase in the number of
forms handlers and importers would have to complete, report, or
maintain under the program.
No corresponding changes are necessary in the non-signer and import
regulations. However, in Sec. 997.52 Reports of acquisition and
shipments and elsewhere in the non-signer regulation, references
regarding specific Fruit and Vegetable Division form numbers are
proposed to be replaced with a more generic statement ``forms provided
by the Division.'' This would enable the Department to revise and
reduce the number of forms without additional rulemaking expense.
The unchanged portions of the incoming and outgoing regulations
currently in effect for 1995 and subsequent crop peanuts would remain
in effect for 1996 and subsequent crop peanuts.
Additional Change to Sec. 999.600 Import Regulation
Early Entry and Bonded Storage Pending New Quota
Experience shows that some importers continue to ship peanuts to
the U.S. even after the duty-free quota is filled for one year. The
peanuts are sampled and inspected when off-loaded at the port and then
sent inland to Customs Service bonded warehouses where the peanuts are
stored until the opening of the next yearly quota--which could be as
long as 11 months. New crop peanuts from Argentina, for instance, may
be harvested as early as May or June but may arrive in the U.S. too
late to be included in that year's quota. Such peanuts could be placed
in bonded storage awaiting the next quota year beginning the following
April.
The Department has determined that the grade and aflatoxin
certificates issued on such peanuts upon arrival in May, June, or
later, of one quota year should continue to be valid until the
following quota year. This is consistent with the Agreement which does
not place any time limits on the applicability of grade and aflatoxin
inspection certificates.
However, paragraph (e) Reinspection of Sec. 998.200 provides that
if the Committee has reason to believe that peanuts may have been
damaged or deteriorated while in storage, it may reject the then
effective inspection certificate and require a reinspection. The
Department exercises similar oversight of imported peanuts to ensure
that only wholesome peanuts enter human consumption channels. Because
of the possibility of deterioration while in storage, the Department
needs to know which peanut shipments are held in bonded storage for an
extended period of time, so that the wholesomeness of such peanuts
could be verified when removed from storage. Therefore, the Department
proposes that an additional safeguard measure, new paragraph (f)(6) be
added to the import regulation.
The proposal would require that importers report to AMS peanut
shipments which are sampled, inspected, and held in bonded storage in
excess of a stated period of time. Such time would be set at one month
in this proposal. AMS seeks comments as to whether or not one month is
appropriate. The report would be filed pursuant to paragraphs (f)(2)
and (3) of this section at the time of inspection and entry into a
bonded warehouse for storage. The report would include copies of
Customs Service documentation of the lot, the grade and aflatoxin
certificates, and location of the storage warehouse.
To avoid deterioration, peanuts should be stored in clean, dry,
odor free, warehouses and under sanitation and cold storage conditions
consistent with industry standards. While the Agreement does not
require cold storage conditions, the following points should be used as
a cold storage guide:
--Temperatures should range from 34 to 41 degrees Fahrenheit with a
relative humidity of 55 to 70 percent.
--Daily or weekly recording charts of temperature and humidity should
be maintained.
--Interior air circulation should be adequate to maintain uniform
temperatures.
--Pans under refrigeration equipment should prevent condensation from
dripping onto the peanuts.
--Peanuts should be gradually removed from cold storage over 2 to 3
days.
[[Page 51819]]
This and other information on sanitation, facilities, management
practices, and dry storage is taken from Good Management Practices for
Shelled Goods Cold Storage and Shelled Goods Dry Storage distributed by
the National Peanut Council. Copies are available for a nominal price
to non-members by calling (703)-838-9500.
Imported peanut lots certified as meeting human consumption
requirements and subsequently stored under such conditions and in
appropriate warehouses, may be entered for consumption when the next
quota year begins--without further reporting to AMS. Upon filing for
entry, the importer shall certify in writing to the Customs Service
that the peanuts covered by the entry documentation have been stored
consistent with industry standards for the entire length of the storage
period.
Paragraph (b)(4) of the import regulation provides authority for
the Secretary to require a reinspection of an imported peanut lot. If
the documentation provided to AMS, or if any evidence subsequently
received by AMS, indicates that appropriate storage standards have not
been met or maintained and the peanuts may have been damaged or
deteriorated, the Secretary could demand reinspection of the lot prior
to the importer's filing for consumption entry of the lot.
Paragraph (b)(4) of Sec. 999.600 is currently placed in the import
rule's Incoming quality regulation. However, reinspections are more
likely to be needed when shelled peanuts are placed under bonded
storage several months prior to the beginning of the next quota year,
as discussed above. Therefore, the Department proposes to redesignate
it as paragraph (f)(5) Reinspection in the import regulation. As a
safeguard provision, the paragraph will apply to farmers stock,
shelled, and inshell imported peanuts. The intent and requirements of
the paragraph remain unchanged.
Some paragraphs of the three peanut regulations would not be
changed in this proposal. However, for a better understanding of the
proposed changes, the three regulations are published in their entirety
as proposed, including paragraphs which are not changed.
If adopted, the proposed changes to the signer and non-signer
programs should be in effect as soon as possible to cover as much of
the crop year as possible. Thus, a 20-day (rather than 30-day) comment
period is provided to allow interested persons to respond to this
proposal. All written comments timely received will be considered
before a final determination is made in this matter.
Because this proposed rule will not be implemented before the
beginning of the 1996 domestic crop year, comments are also requested
on whether final implementation of this proposal after the beginning of
the crop year would have an unequal effect on one or more of the three
production areas or unequally affect small or large handlers.
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.
7 CFR Part 999
Dates, Filberts, Food grades and standards, Imports, Nuts, Peanuts,
Prunes, Raisins, Reporting and recordkeeping requirements, Walnuts.
For the reasons set forth in the preamble, 7 CFR parts 997, 998 and
999 are proposed to be 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. Under the center heading ``Quality Regulations,'' Secs. 997.20,
997.30, 997.40 and 997.50 are revised to read as follows:
Quality Regulations
Sec. 997.20 Incoming regulation.
(a) No handler shall receive or acquire peanuts intended for human
consumption, either from a producer or other person, unless such
peanuts are inspected pursuant to Sec. 997.50 and are determined to be
Segregation 1 peanuts at time of receipt from the producer or, if
received from another person, had not been mixed with peanuts of a
lower quality than Segregation 1 and meet the following additional
requirements specified in this section: Provided, That a handler may--
(1) Acquire shelled peanuts from the Commodity Credit Corporation
(CCC) or cleaned inshell or shelled peanuts from other handlers, a
handler as defined in 7 CFR 998.8, or from buyers who have purchased
such peanuts from handlers or from the CCC, if the lot has been
certified as meeting the requirements of Sec. 997.30(a) and the
identity is maintained; and/or
(2) Perform services for an area association pursuant to a peanut
receiving and warehouse contract.
(b) Moisture and foreign material. (1) Moisture. Except as provided
under paragraph (d) of Sec. 997.20, no handler shall receive or acquire
peanuts containing more than 10.49 percent moisture: Provided, That
peanuts of a higher moisture content may be received and dried to not
more than 10.49 percent moisture prior to storing or milling. For
farmers stock peanuts, moisture determinations shall be rounded to the
nearest whole number. Moisture determinations on shelled peanuts shall
be carried to the hundredths place.
(2) Foreign material. No handler shall receive or acquire farmers
stock peanuts containing more than 10.49 percent foreign material,
except that peanuts having a higher foreign material content may be
received or acquired if they are held separately until milled, or moved
over a sand-screen before storage, or shipped directly to a plant for
prompt shelling. The term sand-screen means any type of farmers stock
cleaner which, when in use, removes sand and dirt.
(c) Damage. For the purpose of determining damage, other than
concealed damage, on farmers stock peanuts, all percentage
determinations shall be rounded to the nearest whole number.
(d) Seed peanuts. Peanuts which are not Segregation 1 peanuts and
therefore cannot be acquired for human consumption may be acquired,
shelled and delivered for seed purposes. Peanuts intended for seed use,
produced under the auspices of a State agency which regulates or
controls the production of seed peanuts, which do not meet Segregation
1 requirements shall be stored and shelled separate from peanuts
intended for human consumption. However, Segregation 2 seed peanuts,
produced under the auspices of the State agency, which contain up to
3.00 percent damaged kernels and are free from visible Aspergillus
flavus may be stored and shelled with Segregation 1 peanuts which are
also produced under the auspices of the State agency. A handler whose
operations include custom seed shelling may receive, custom shell, and
deliver for seed purposes farmers stock peanuts, and such peanuts shall
be exempt from the requirements of this section and, therefore, shall
not be required to be inspected and certified as meeting these
requirements, and the
[[Page 51820]]
handler shall report to the Division the weight of each lot of farmers
stock peanuts received on such basis on a form provided by the
Department. However, handlers who acquire seed peanut residuals from
their custom shelling of uninspected (farmers stock) seed peanuts or
from another person may mill such residuals with other receipts or
acquisitions of the handler, and such peanuts which meet the
requirements specified in Sec. 997.30(a) may be disposed of by sale to
human consumption outlets.
(e) Oilstock. Handlers may acquire for disposition to domestic
crushing or export farmers stock peanuts of a lower quality than
Segregation 1 or grades or sizes of shelled peanuts or cleaned inshell
peanuts which fail to meet the requirements for human consumption.
Handlers may act as accumulators and acquire, for other handlers; a
handler as defined in 7 CFR 998.8 or from other persons, Segregation 2
or 3 farmers stock peanuts. Handlers may also acquire shelled peanuts
originating from Segregation 2 or 3 farmers stock or the entire mill
production of peanuts from Segregation 1 farmers stock or lots of
shelled peanuts originating from Segregation 1 peanuts and which have
been positive lot identified as specified in Sec. 997.30(d), which
failed to meet the requirements for human consumption pursuant to
Sec. 997.30(a): Provided, That all such acquisitions are held separate
from Segregation 1 peanuts acquired for milling or from edible grades
of shelled or milled peanuts. Handlers may commingle the Segregation 2
and 3 peanuts or keep them separate and apart. Handlers who acquire
farmers stock peanuts of a lower quality than Segregation 1 or cleaned
inshell peanuts which fail to meet the requirements for human
consumption shall report such acquisitions to the Division as
prescribed on a form prescribed by the Division. Handlers who acquire
grades or sizes of shelled peanuts which fail to meet the requirements
for human consumption for disposition to domestic crushing and
subsequent export to countries shall report such disposition on a form
provided by the Division.
(f) Shelled peanuts. Handlers may acquire shelled peanuts (which
originated from ``Segregation 1 peanuts'') from other handlers or a
handler as defined in 7 CFR 998.8, for remilling and subsequent
disposition to human consumption outlets. Further disposition of such
peanuts shall be regulated by Sec. 997.40.
(g) No producer may handle, process, prepare for sale, or otherwise
alter peanuts of his own production from the condition of farmers
stock, for disposition in human consumption outlets unless such peanuts
are first inspected and certified pursuant to Sec. 997.50 and meet the
applicable requirements of this section.
Sec. 997.30 Outgoing Regulation.
(a) Shelled peanuts. (1)(i) No handler shall ship or otherwise
dispose of shelled peanuts for human consumption unless such peanuts
are positive lot identified, certified ``negative'' as to aflatoxin and
certified as meeting the requirements in Table 1:
Table 1.--Minimum Grade Requirements--Peanuts for Human Consumption
[Whole Kernels and Splits]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Maximum limitations
---------------------------------------------------------------------------------------------------------------------------------------------------------
Excluding lots of ``splits''
---------------------------------------------------------------------------------------------------------------------------------------------------------
Unshelled Fall through
Unshelled peanuts --------------------------------------------
peanuts and damaged Foreign
Type and grade category damaged kernels and Total materials Moisture
kernels minor Sound split and Sound whole kernels (percent) (percent)
(percent) defects broken kernels
(percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Runner............................ 1.50 2.50 3.00%; \17/64\ inch 3.00%; \16/64\ x \3/ 4.00%; both screens. .20 9.00
round screen. 4\ inch; slot
screen.
Virginia (except No. 2)........... 1.50 2.50 3.00%; \17/64\ inch; 3.00%; \15/64\ x 1 4.00%; both screens. .20 9.00
round screen. inch; slot screen.
Spanish and Valencia.............. 1.50 2.50 3.00%; \16/64\ inch; 3.00%; \15/64\ x \3/ 4.00%; both screens. .20 9.00
round screen. 4\ inch; slot
screen.
No. 2 Virginia.................... 1.50 3.00 6.00%; \17/64\ inch; 6.00%; \15/64\ x 1 6.00%; both screens. .20 9.00
round screen. inch; slot screen.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Lots of ``splits''
--------------------------------------------------------------------------------------------------------------------------------------------------------
Runner (not more than 4% sound 1.50 2.50 3.00%; \17/64\ inch; 3.00%; \14/64\ x \3/ 4.00%; both screens. .20 9.00
whole kernels). round screen. 4\ inch; slot
screen.
Virginia (not less than 90% 1.50 2.50 3.00%; \17/64\ inch; 3.00%; \14/64\ x 1 4.00%; both screens. .20 9.00
splits). round screen. inch; slot screen.
Spanish and Valencia (not more 1.50 2.50 3.00%; \16/64\ inch; 3.00%; \13/64\ x \3/ 4.00%; both screens. .20 9.00
than 4% sound whole kernels). round screen. 4\ inch; slot
screen.
--------------------------------------------------------------------------------------------------------------------------------------------------------
(ii) Prior to disposition to human consumption outlets, peanuts
must be positive lot identified, be certified ``negative'' as to
aflatoxin, and be certified as meeting the following superior quality
requirements in Table 2:
[[Page 51821]]
Table 2.--Superior Quality Requirements--Peanuts for Human Consumption
[Whole Kernels and Splits]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Maximum limitations
---------------------------------------------------------------------------------------------------------------------------------------------------------
Unshelled
Unshelled peanuts,
peanuts and damaged Sound split and Foreign
Type and grade category damaged kernels and broken kernels Sound whole kernels Total materials Moisture
kernels minor (percent) (percent) (percent) (percent)
(percent) defects
(percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Runner U.S. No. 1 and better...... 1.25 2.00 3.00%; \17/64\ inch, 3.00%; \16/64\ x \3/ 4.00%; both screens. .10 9.00
round screen. 4\ inch, slot
screen.
Virginia U.S. No. 1 and better.... 1.25 2.00 3.00%; \17/64\ inch, 3.00%; \15/64\ x 1 4.00%; both screens. .10 9.00
round screen. inch, slot screen.
Spanish and Valencia U.S. No. 1 1.25 2.00 3.00%; \16/64\ inch, 2.00%; \15/64\ x \3/ 4.00%; both screens. .10 9.00
and better. round screen. 4\ inch, slot
screen.
Runner U.S. Splits (not more than 1.25 2.00 2.00%; \17/64\ inch, 3.00%; \14/64\ x \3/ 4.00%; both screens. .20 9.00
4% sound, whole kernels). round screen. 4\ inch, slot
screen.
Virginia U.S. Splits (not less 1.25 2.00 3.00%; \17/64\ inch, 3.00%; \14/64\ x 1 4.00%; both screens. .20 9.00
than 90% splits and not more than round screen. inch, slot screen.
3.00% sound whole kernels and
portions passing through \20/64\
inch round screen).
Spanish and Valencia U.S. Splits 1.25 2.00 2.00%; \16/64\ inch, 3.00%; \13/64\ x \3/ 4.00%; both screens. .20 9.00
(not more than 4% sound, whole round screen. 4\ inch, slot
kernels). screen.
Runner with splits (not more than 1.25 2.00 3.00%; \17/64\ inch, 3.00%; \16/64\ x \3/ 4.00%; both screens. .10 9.00
15% sound splits). round screen. 4\ inch, slot
screen.
Virginia with splits (not more 1.25 2.00 3.00%; \17/64\ inch, 3.00%; \15/64\ x 1 4.00%; both screens. .10 9.00
than 15% sound splits). round screen. inch, slot screen.
Spanish and Valencia with splits 1.25 2.00 3.00%; \16/64\ inch, 2.00%; \15/64\ x \3/ 4.00%; both screens. .10 9.00
(not more than 15% sound splits). round screen. 4\ inch, slot
screen.
--------------------------------------------------------------------------------------------------------------------------------------------------------
(2) The term ``fall through'', as used herein, 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
Superior Quality 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.
(b) Cleaned inshell peanuts. No handler shall ship, sell, or
otherwise dispose of cleaned inshell peanuts for human consumption:
(1) With more than 1.00 percent kernels with mold present unless a
sample of such peanuts, drawn by an inspector of the Federal or
Federal-State Inspection Service, was analyzed chemically by a U.S.
Department of Agriculture laboratory (hereinafter referred to as ``USDA
laboratory'') or a laboratory listed in paragraph (c) of this section
and found to be wholesome relative to aflatoxin;
(2) With more than 2.00 percent peanuts with damaged kernels;
(3) With more than 10.00 percent moisture; or
(4) With more than 0.50 percent foreign material.
(c) Sampling and testing shelled peanuts. (1) Each handler shall
cause appropriate samples of each lot of edible quality shelled peanuts
to be drawn by an inspector of the Federal or Federal-State Inspection
Service. The gross amount of peanuts drawn shall be large enough to
provide for a grade analysis, for a grading check-sample, and for three
48-pound samples for aflatoxin assay. The three 48-pound samples shall
be designated by the Federal or Federal-State Inspection Service as
``Sample #1N'', ``Sample #2N'', and ``Sample #3N'' and each sample
shall be placed in a suitable container and ``positive lot identified''
by means acceptable to the Inspection Service. Sample #1N may be
prepared for immediate testing or Sample #1N, Sample #2N, and Sample
#3N may be returned to the handler for testing at a later date.
(2) The handler shall cause Sample #1 to be ground by the Federal
or Federal-State Inspection Service, a USDA laboratory or a laboratory
listed herein, in a ``subsampling mill'' approved by the Division. The
resultant ground subsample from Sample #1N shall be of a size specified
by the Division and shall be designated as ``Subsample 1--ABN'' and at
the handler's or buyer's option, a second subsample may also be
extracted from Sample #1N. It shall be designated as ``Subsample 1--
CDN''. Subsample 1--CDN may be sent as requested by the handler or
buyer, for aflatoxin assay, to a USDA laboratory or other laboratory
that can provide analyses results on such samples in 36 hours. The cost
of sampling and testing Subsample 1--CDN shall be for the account of
the requester. Subsample 1--ABN shall be analyzed only in a USDA
[[Page 51822]]
laboratory or a laboratory listed herein. Both Subsamples 1--ABN and
1--CDN shall be accompanied by a notice of sampling signed by the
inspector containing, at least, identifying information as to the
handler (shipper), the buyer (receiver), if known, and the positive lot
identification of the shelled peanuts. A copy of such notice covering
each lot shall be sent to the Division.
(3) The samples designated as Sample #2N and Sample #3N shall be
held as aflatoxin check-samples by the Inspection Service or the
handler and shall not be included in the shipment to the buyer until
the analyses results from Sample #1N are known.
(4) Upon call from the laboratory, handler shall cause Sample #2N
to be ground by the Inspection Service in a ``subsampling mill.'' The
resultant ground subsample from Sample #2N shall be of a size specified
by the Division and it shall be designated as ``Subsample #2--ABN.''
Upon call from the laboratory, the handler shall cause Sample #3N to be
ground by the Inspection Service in a ``subsampling mill.'' The
resultant ground subsample from Sample #3N shall be of a size specified
by the Division and shall be designated as ``Subsample #3--ABN''.
``Subsamples 2--ABN and 3--ABN'' shall be analyzed only in a USDA
laboratory or a laboratory listed herein and each shall be accompanied
by a notice of sampling. A copy of each such notice shall be sent to
the Division. The results of each assay shall be reported by the
laboratory to the handler and to the Division. All costs involved in
the sampling and testing of peanuts required by this regulation shall
be for the account of the applicant.
(5) Information on making arrangements for the required inspection
and certification can be obtained by contacting the Fresh Products
Branch, Fruit and Vegetable Division, Agricultural Marketing Service,
USDA, P.O. Box 96456, room 2049-S, Washington, DC, 20090-6456,
telephone (202) 690-0604 or facsimile (202) 720-0393.
(i) Laboratories at the following locations are approved to perform
the chemical analyses required pursuant to this part. The sampling plan
and procedures may be obtained from the Science Division.
Science and Technology Division, AMS/USDA, P.O. Box 279, 301 West Pearl
St., Aulander, NC 27805, Tel: (919) 345-1661 Ext. 156, Fax: (919) 345-
1991
Science and Technology Division, AMS/USDA, 1211 Schley Ave., Albany, GA
31707, Tel: (912) 430-8490 / 8491, Fax: (912) 430-8534
Science and Technology Division, AMS/USDA, P.O. Box 488, Ashburn, GA
31714, Tel: (912) 567-3703
Science and Technology Division, AMS/USDA, 610 North Main St., Blakely,
GA 31723, Tel: (912) 723-4570, Fax: (912) 723-3294
Science and Technology Division, AMS/USDA, 1557 Reeves St., Dothan, AL
36303, Tel: (334) 794-5070, Fax: (334) 671-7984
Science and Technology Division, AMS/USDA, 107 South Fourth St.,
Madill, OK 73446, Tel: (405) 795-5615, Fax: (405) 795-3645
Science and Technology Division, AMS/USDA, P.O. Box 272, 715 N. Main
Street, Dawson, GA 31742, Tel: (912) 995-7257, Fax: (912) 995-3268
Science and Technology Division, AMS/USDA, P.O. Box 1130, 308 Culloden
St., Suffolk, VA 23434, Tel: (804) 925-2286, Fax: (804) 925-2285
ABC Research, 3437 SW 24th Avenue, Gainesville, FL 32607-4502, Tel:
(904) 372-0436, Fax: (904) 378-6483
J. Leek Associates, Inc., P.O. Box 50395, 1200 Wyandotte (31705),
Albany, GA 31703-0395, Tel: (912) 889-8293, Fax: (912) 888-1166
J. Leek Associates, Inc., P.O. Box 368, 675 East Pine, Colquitt, GA
31737, Tel: (912) 758-3722, Fax: (912) 758-2538
J. Leek Associates, Inc., P.O. Box 6, 502 West Navarro St., DeLeon, TX
76444, Tel: (817) 893-3653, Fax: (817) 893-3640
Pert Laboratories, P.O. Box 267, Peanut Drive, Edenton, NC 27932, Tel:
(919) 482-4456, Fax: (919) 482-5370
Pert Laboratory South, P.O. Box 149, Hwy 82 East, Seabrook Drive,
Sylvester, GA 31791, Tel: (912) 776-7676, Fax: (912) 776-1137
Professional Service Industries, Inc., 3 Burwood Lane, San Antonio, TX
78216, Tel: (210) 349-5242, Fax: (210) 342-9401
Southern Cotton Oil Company, 600 E. Nelson Street, P.O. Box 180,
Quanah, TX 79252, Tel: (817) 663-5323, Fax: (817) 663-5091
Quanta Lab, 9330 Corporate Drive, Suite 703, Selma, TX 78154-1257, Tel:
(210) 651-5799, Fax: (210) 651-9271
(ii) Handlers should contact the nearest laboratory from the list
in paragraph (c)(5)(i) of this section to arrange to have samples
chemically analyzed for aflatoxin content, or for further information
concerning the chemical analyses required pursuant to this part
handlers may contact: The Science and Technology Division, Agricultural
Marketing Service, USDA, P.O. Box 96456, room 3507-S, Washington, D.C.,
20090-6456, telephone (202) 720-5231, facsimile (202) 720-6496.
(d) Identification. Each lot of shelled or cleaned inshell peanuts,
in lot sizes not exceeding 200,000 pounds, shall be identified by
positive lot identification procedures prior to being shipped or
otherwise disposed of. For the purpose of this regulation, ``positive
lot identification'' of a lot of shelled or inshell peanuts is a means
of relating the inspection certificate to the lot which has been
inspected so that there can be no doubt that the peanuts are the same
ones described on the inspection certificate. The crop year that is
shown on the positive lot identification tags, or other means of
positive lot identification shall accurately describe the crop year in
which the peanuts in the lot were produced. Such procedure on bagged
peanuts shall consist of attaching a lot numbered tag bearing the
official stamp of the Federal or Federal-State Inspection Service to
each filled bag in the lot. The tag shall be sewed (machine sewed if
shelled peanuts) into the closure of the bag except that in plastic
bags the tag shall be inserted prior to sealing so that the official
stamp is visible. Any peanuts moved in bulk or bulk bins shall have
their lot identity maintained by sealing the conveyance and if in other
containers by other means acceptable to the Federal or Federal-State
Inspection Service. All lots of shelled or cleaned inshell peanuts
shall be handled, stored, and shipped under positive lot identification
procedures, except those lots which have been reconstituted and/or
commingled at the request of the receiver. All such reconstituted and/
or commingled lots will no longer be considered positive lot identified
and, therefore, no longer be eligible for appeal inspection. Handler
shall keep and maintain records of the quantities involved in each
reconstituting and/or commingling procedure, whether in single or
multiple lots, and such records shall be available to the Division on
request.
(e) Reinspection. Whenever the Division has reason to believe that
peanuts may have been damaged or deteriorated while in storage, the
Division may reject the then effective inspection certificate and may
require the owner of the peanuts to have a reinspection to establish
whether or not such peanuts may be disposed of for human consumption.
Sec. 997.40 Reconditioning and disposition of peanuts failing quality
requirements.
(a) Lots of peanuts which have not been certified as meeting the
requirements for disposition to human
[[Page 51823]]
consumption outlets, may be disposed of for non-human consumption uses
which are not regulated or limited by the provisions specified in this
section: Provided, That each such lot is positive lot identified, using
red tags, and certified as to aflatoxin content (actual numerical
count). However, on the shipping papers covering the disposition of
each such lot of inedible quality peanuts, the handler shall cause the
following statement to be shown: ``The peanuts covered by this bill of
lading (or invoice, etc.) are not to be used for human consumption.''
(b) Except for inedible quality peanuts disposed of under the
provisions of paragraph (f)(2) of this section and peanuts derived from
the milling for seed of Segregation 2 and 3 farmers stock peanuts,
peanuts which have not been certified as meeting the standards set
forth in paragraphs (a) or (b) of Sec. 997.30 shall be disposed of as
prescribed hereinafter in this section.
(c) Sheller Oil Stock Residuals--For Crushing or Export. Peanuts,
or portions of peanuts which are separated from edible quality peanuts
by screening or sorting or other means during the milling process, may
be segregated into categories or they may be commingled as sheller oil
stock residuals. Such sheller oil stock residuals shall be identified
pursuant to paragraph (d) of this section, but using a red tag, and
such peanuts may be disposed of domestically or to the export market,
in bulk or bags or other suitable containers. The movement of such
peanuts shall be reported to the Division by the shipping handler and
the crusher, as requested by the Division.
(1) If the peanuts have not been tested and certified as to
aflatoxin content, as prescribed in paragraph (c) of this section, the
handler shall cause the following statement to be shown on the shipping
papers: ``The peanuts covered by this bill of lading (or invoice, etc.)
are limited to crushing only and may contain aflatoxin.''
(2) If the peanuts are certified as 301 ppb or more aflatoxin
content, disposition shall be limited to crushing or export.
(d) Blanching peanuts failing quality requirements. 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 because of excessive
damage, minor defects, moisture, or foreign material or are positive as
to aflatoxin. 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 for
unshelled peanuts, damaged kernels, minor defects, moisture, and
foreign material as listed in paragraph (a) of this section and be
accompanied by a negative aflatoxin certificate. The residual peanuts,
excluding skins and hearts, resulting from blanching under these
provisions, shall be bagged 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 crushers who agree to comply with the
terms of paragraph (c) of this section.
(e) Remilling peanuts failing quality requirements. Handlers may
remiller or cause to have remilled 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 a negative aflatoxin certificate. 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 bagged 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 crushers who agree to comply with the
terms of paragraph (c) of this section.
Sec. 997.50 Inspection, chemical analysis, certification and
identification.
Each handler shall, at the handler's own expense, prior to or upon
receiving and before shipping or disposing of peanuts, cause an
inspection to be made of any such peanuts not covered by a valid
inspection certificate, to determine whether such peanuts meet the
applicable grade requirements effective pursuant to this part, and
shall comply with such identification requirements prescribed by this
part or which the Secretary may prescribe. Each handler shall also
cause appropriate samples to be drawn and chemically analyzed by a USDA
laboratory, or laboratory listed in Sec. 997.30, for wholesomeness as
provided in Sec. 997.30 of this part. Such handler shall obtain grade
and aflatoxin certificates stating that such peanuts meet the
aforementioned applicable requirements and all such certificates shall
be available for examination or use by the Division. Acceptable
certificates shall be those issued by Federal or Federal-State
inspectors authorized or licensed by the Secretary and USDA
laboratories or those listed in Sec. 997.30 of this part.
Each handler shall furnish, or cause the inspection service or the
laboratory to furnish, to the Division, a copy of the inspection
certificate and a copy of the results of the chemical analyses issued
to the handler on each lot of shelled peanuts or cleaned inshell
peanuts.
3. Under the center heading ``Assessments,'' section 997.51 is
revised to read as follows:
Sec. 997.51 Assessments.
(a) Each first handler shall pay to the Secretary, with respect to
Segregation 1 peanuts received or acquired by the handler, including
the handler's own production, an administrative assessment as approved
by the Secretary. The rate of assessment shall be the same as the
administrative assessment approved by the Secretary and applied to
signatory handlers under the Peanut Marketing Agreement No. 146. Such
administrative assessment shall be applied during the crop year
beginning July 1 and ending June 30 of the following year. Each
handler's pro rata share shall be the rate of assessment fixed by the
Secretary per net ton of farmers stock peanuts received or acquired,
other than those peanuts described in Sec. 997.20(a) (1) and (2).
During the crop year, the Secretary may increase the rate of assessment
if such an increase is established under the Agreement.
(b) Segregation 2 and Segregation 3 farmers stock peanuts disposed
to
[[Page 51824]]
crushing or exported are exempt from assessments under this section.
4. Under the center heading ``Reports, Books and Records,''
Secs. 997.52, 997.53 and 997.54 are revised to read as follows:
Reports, Books and Records
Sec. 997.52 Reports of acquisitions and shipments.
Each handler shall report acquisitions of Segregation 1 farmers
stock peanuts on a form provided by the Division and file such other
reports of acquisitions and shipments of peanuts, as prescribed in this
part. Upon the request of the Division, each handler shall furnish such
other reports and information as necessary to enable the Division to
carry out the provisions of this part. All reports and records
furnished or submitted by handlers to the Division which include data
or information constituting a trade secret or disclosing the trade
position, financial condition, or business operations of the particular
handler shall not be disclosed unless such disclosure is determined
necessary by the Secretary to enforce the provisions of this part.
Sec. 997.53 Verification of reports.
For the purpose of checking and verifying reports filed by handlers
or the operation of handlers under the provisions of this part, the
Secretary, through its duly authorized agents, shall have access to any
premises where peanuts may be held by any handler and at any time
during reasonable business hours and shall be permitted to inspect any
peanuts so held by such handler and any and all records of such handler
with respect to the acquisition, movement, holding, processing or
disposition of all peanuts which may be held or which may have been
disposed of by the handler. Each handler shall maintain such records of
peanuts received, held, and disposed of by the handler, that will
substantiate any required reports and will show performance under this
part. Such records shall be retained for at least two years beyond the
crop year of their applicability.
Sec. 997.54 Agents.
The Secretary may, by a designation in writing, name any person,
including any officer or employee of the United States Government, or
name any service, division or branch in the United States Department of
Agriculture, to act as his agent or representative in connection with
any of the provisions of this part.
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. Under the center heading ``Implementing Regulations,''
Secs. 998.100 and 998.200 are revised to read as follows:
Implementing Regulations
Sec. 998.100 Incoming quality regulation for 1996 and subsequent crop
peanuts.
The following modify Sec. 998.5 of the peanut marketing agreement
and modify or are in addition to the restrictions of section 31 on
handler receipts or acquisitions of peanuts:
(a) Modification of Sec. 998.5, paragraphs (b), (c), and (d).
Paragraphs (b), (c), and (d) of Sec. 998.5 of the peanut marketing
agreement are modified for the purposes of this section as to farmers
stock peanuts to read respectively as follows:
(1) Segregation 1. Segregation 1 peanuts means farmers stock
peanuts with not more than 2 percent damaged kernels nor more than 1.00
percent concealed damage caused by rancidity, mold, or decay and which
are free from visible Aspergillus flavus.
(2) Segregation 2. Segregation 2 peanuts means farmers stock
peanuts with more than 2 percent damaged kernels or more than 1.00
percent concealed damage caused by rancidity, mold, or decay and which
are free from visible Aspergillus flavus.
(3) Segregation 3. Segregation 3 peanuts means farmers stock
peanuts with visible Aspergillus flavus.
(b) Moisture and foreign material.
(1) Moisture. Except as provided under paragraph (d) of
Sec. 998.100, no handler shall receive or acquire peanuts containing
more than 10.49 percent moisture: Provided, That peanuts of a higher
moisture content may be received and dried to not more than 10.49
percent moisture prior to storing or milling. On farmer's stock, such
moisture determinations shall be rounded to the nearest whole number;
on shelled peanuts, the determinations shall be carried to the
hundredths place and shall not be rounded to the nearest whole number.
(2) Foreign material. No handler shall receive or acquire farmers
stock peanuts containing more than 10.49 percent foreign material,
except that peanuts having a higher foreign material content may be
received or acquired if they are held separately until milled, or moved
over a sand-screen before storage, or shipped directly to a plant for
prompt shelling. The term ``sand-screen'' means any type of farmers
stock cleaner which, when in use, removes sand and dirt.
(c) Damage. For the purpose of determining damage, other than
concealed damage, on farmers stock peanuts, all percentage
determinations shall be rounded to the nearest whole number.
(d) Seed peanuts. A handler may acquire and deliver for seed
purposes farmers stock peanuts which meet the requirements of
Segregation 1 peanuts. If the seed peanuts are produced under the
auspices of a State agency which regulates or controls the production
of seed peanuts, they may contain up to 3 percent damaged kernels and
have visible Aspergillus flavus, and, in addition, the following
moisture content, as applicable:
(1) Seed peanuts produced in the Southeastern and Virginia-Carolina
areas, may contain up to 10.49 percent moisture except Virginia type
peanuts which are not stacked at harvest time may contain up to 11.49
percent moisture; and
(2) Seed peanuts produced in the Southwestern area may contain up
to 10.49 percent moisture. However, 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, shall be stored
and shelled from other peanuts; and any residuals not used for seed
shall not be used or disposed of for human consumption unless it is
determined to be wholesome by chemical assay for aflatoxin. 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 1 seed peanuts which
are also produced under the auspices of the State agency. A handler
whose operations include custom shelling may receive, custom shell, and
deliver for seed purposes farmers stock peanuts, and such peanuts shall
be exempt from the Incoming Quality Regulation requirements, and,
therefore, shall not be required to be inspected and certified as
meeting the Incoming Quality Regulation requirements, and the handler
shall report to the Committee, as requested, the weight of each lot of
farmers stock peanuts received on such basis on a form furnished by the
Committee. Handlers who acquire seed peanut residuals from their custom
shelling of uninspected (farmers stock) seed peanuts or from another
producer or sheller may mill such residuals with
[[Page 51825]]
other receipts or acquisitions of the handler, and such residuals which
meet the Outgoing Quality Regulation requirements, may be disposed of
by sale to human consumption outlets.
(e) Oilstock. Handlers may acquire for disposition to domestic
crushing or export farmers stock peanuts of a lower quality than
Segregation 1 or grades or sizes of shelled peanuts or cleaned inshell
peanuts which fail to meet the requirements for human consumption. The
provision of Sec. 998.31 of the marketing agreement restricting
acquisitions of such peanuts to handlers who are crushers is hereby
modified pursuant to Sec. 998.34, to authorize all handlers to act as
accumulators and acquire, from other handlers or non-handlers,
Segregation 2 or 3 farmers stock peanuts. Handlers may also acquire for
crushing or export from other handlers peanuts originating from
Segregation 2 or 3 farmers stock or the entire mill production of
shelled peanuts from Segregation 1 farmers stock or lots of peanuts
originating from Segregation 1 peanuts and which have been positive lot
identified as specified in paragraph (d) of Sec. 998.200, Outgoing
quality regulation, which failed to meet the requirements for human
consumption pursuant to paragraph (a) of Sec. 998.200, Outgoing quality
regulation: Provided, That all such acquisitions are held separate from
Segregation 1 peanuts acquired for milling or from edible grades of
shelled or milled peanuts. Handlers may commingle the Segregation 2 and
3 peanuts or keep them separate and apart. Handlers who acquire farmers
stock peanuts of a lower quality than Segregation 1 or grades or sizes
of shelled peanuts or cleaned inshell peanuts which fail to meet the
requirements for human consumption shall report such acquisitions as
prescribed by the Committee. To be eligible to receive or acquire
Segregation 2 or 3 farmers stock peanuts and shelled peanuts
originating therefrom, a handler shall pay to the Area Association a
fee for the purpose of covering cost of supervision of the disposition
of such peanuts.
(f) Segregation 2 and 3 control. To assure the removal from edible
outlets of any lot of peanuts determined by Federal or Federal-State
Inspection Service to be Segregation 2 or Segregation 3, each handler
shall inform each employee, country buyer, commission buyer, or like
person through whom the handler receives peanuts of the need to receive
and withhold all lots of Segregation 2 and Segregation 3 peanuts from
milling for edible use. If any lot of Segregation 2 or Segregation 3
farmers stock peanuts is not withheld but returned to the producer, the
handler shall cause the Inspection Service to forward immediately a
copy of the inspection certificate on the lot to the designated office
of the handler and a copy to the Committee which shall be used only for
information purposes.
(g) Farmers stock storage and handling facilities. Handlers shall
report to the Committee, on a form furnished by the Committee, all
storage facilities or contract storage facilities which they will use
to store acquisitions of current crop Segregation 1 farmers stock
peanuts, and all such storage facilities must be reported prior to
storing of any such handler acquisitions. Handlers shall also report to
the Committee the locations at which they will receive or acquire
current crop farmers stock peanuts. All such storage facilities shall
have reasonable and safe access to allow for inspection of the facility
and its contents. All such storage facilities must be of sound
construction, in good repair, and built and equipped so as to provide
suitable storage and sufficient safeguards to prevent moisture
condensation and provide adequate protection for farmers stock peanuts.
All breaks or openings in the walls, floors, or roofs of the facilities
shall have been repaired so as to keep out moisture. Elevator pits and
wells must be kept dry and free of moisture at all times. Insect
control procedures must be carried out in such a manner as to prevent
undesirable moisture in the storage facilities. Any conditions in
warehouses, elevators, pits, transportation equipment, including trucks
and hopper cars, and other farmers stock handling equipment conducive
to the growth or spread of Aspergillus flavus mold shall be corrected
to the satisfaction of the Committee. The Committee may make periodic
inspections of farmers stock storage and handling facilities and
farmers stock peanuts stored in such facilities to determine if
handlers are adhering to these requirements.
(h) Shelled peanuts. Handlers may acquire shelled peanuts, which
originated from ``Segregation 1 peanuts,'' from other handlers, for
remilling and subsequent disposition to human consumption outlets.
(i) Segregation 2 and Segregation 3 farmers stock peanuts held
separate and apart or commingled, and disposed of to crushing or export
are exempt from assessments under this section.
Sec. 998.200 Outgoing quality regulation for 1996 and subsequent crop
peanuts.
The following modify or in addition to the peanut marketing
agreement restrictions of Sec. 998.32 on handler disposition of
peanuts:
(a) Shelled peanuts. (1) No handler shall ship or otherwise dispose
of shelled peanuts for human consumption unless such peanuts are
positive lot identified, certified ``negative'' as to aflatoxin, and
certified as meeting the requirements in the following ``Other Edible
Quality * * *'' grades:
Table 1.--``Other Edible Quality'' (Indemnifiable) Grades--Whole Kernels and Splits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Excluding lots of ``splits''
---------------------------------------------------------------------------------------------------------------------------------------------------------
Unshelled Fall through
Unshelled peanuts, ------------------------------------------------------------------
peanuts and damaged Foreign
Type and grade category damaged kernels and materials Moisture
kernels minor Sound split and Sound whole kernels Total (percent) (percent)
(percent) defects broken kernels
(percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Runner............................ 1.50 2.50 3.00%; \17/64\ inch 3.00%; \16/64\ x \3/ 4.00%; both screens. .20 9.00
round screen. 4\ inch; slot
screen.
Virginia (except No. 2)........... 1.50 2.50 3.00%; \17/64\ inch; 3.00%; \15/64\ x 1 4.00%; both screens. .20 9.00
round screen. inch; slot screen.
[[Page 51826]]
Spanish and Valencia.............. 1.50 2.50 3.00%; \16/64\ inch; 3.00%; \15/64\ x \3/ 4.00%; both screens. .20 9.00
round screen. 4\ inch; slot
screen.
No. 2 Virginia.................... 1.50 3.00 6.00%; \17/64\ inch; 6.00%; \15/64\ x 1 6.00%; both screens. .20 9.00
round screen. inch; slot screen.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Lots of ``splits''
--------------------------------------------------------------------------------------------------------------------------------------------------------
Runner (not more than 4% sound 1.50 2.50 3.00%; \17/64\ inch; 3.00%; \14/64\ x \3/ 4.00%; both screens. .20 9.00
whole kernels). round screen. 4\ inch; slot
screen.
Virginia (not less than 90% 1.50 2.50 3.00%; \17/64\ inch; 3.00%; \14/64\ x 1 4.00%; both screens. .20 9.00
splits). round screen. inch; slot screen.
Spanish and Valencia (not more 1.50 2.50 3.00%; \16/64\ inch; 3.00%; \13/64\ x \3/ 4.00%; both screens. .20 9.00
than 4% sound whole kernels). round screen. 4\ inch; slot
screen.
--------------------------------------------------------------------------------------------------------------------------------------------------------
(2) Prior to disposition to human consumption outlets, peanuts must
be positive lot identified, be certified ``negative'' as to aflatoxin,
and be certified as meeting the requirements in the following
``Indemnifiable Grades'' grades:
Table 2.--Indemnifiable Grades
--------------------------------------------------------------------------------------------------------------------------------------------------------
Maximum limitations
---------------------------------------------------------------------------------------------------------------------------------------------------------
Unshelled Fall through
Unshelled peanuts, ------------------------------------------------------------------
peanuts and damaged Foreign
Type and grade category damaged kernels and Sound split and materials Moisture
kernels minor broken kernels Sound whole kernels Total (percent) (percent)
(percent) defects (percent) (percent)
(percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Runner U.S. No.1 and better....... 1.25 2.00 3.00%; \17/64\ inch, 3.00%; \16/64\x\3/4\ 4.00%; both screens. .10 9.00
round screen. inch, slot screen.
Virginia U.S. No.1 and better..... 1.25 2.00 3.00%; \17/64\ inch, 3.00%; \15/64\x1 4.00%; both screens. .10 9.00
round screen. inch, slot screen.
Spanish and Valencia U.S. No. 1 1.25 2.00 3.00%; \16/64\ inch, 2.00%; \15/64\x\3/4\ 4.00%; both screens. .10 9.00
and better. round screen. inch, slot screen.
Runner U.S. Splits (not more than 1.25 2.00 2.00%; \17/64\ inch, 3.00%; \14/64\x\3/4\ 4.00%; both screens. .20 9.00
4% sound, whole kernels). round screen. inch, slot screen.
Virginia U.S. Splits (not less 1.25 2.00 3.00%; \17/64\ inch, 3.00%; \14/64\x1 4.00%; both screens. .20 9.00
than 90% splits and not more than round screen. inch, slot screen.
3.00% sound whole kernels and
portions passing through \20/64\
inch round screen).
Spanish and Valencia U.S. Splits 1.25 2.00 2.00%; \16/64\ inch, 3.00%; \13/64\x\3/4\ 4.00%; both screens. .20 9.00
(not more than 4% sound, whole round screen. 4.00%; inch, slot
kernels). screen.
Runner with splits (not more than 1.25 2.00 3.00%; \17/64\ inch, 3.00%; \16/64\x\3/4\ 4.00%; both screens. .10 9.00
15% sound splits). round screen. inch, slot screen.
Virginia with splits (not more 1.25 2.00 3.00%; \17/64\ inch, 3.00%; \15/64\x1 4.00%; both screens. .10 9.00
than 15% sound splits). round screen. inch, slot screen.
[[Page 51827]]
Spanish and Valencia with splits 1.25 2.00 3.00%; \16/64\ inch, 2.00%; \15/64\x\3/4\ 4.00%; both screens. .10 9.00
(not more than 15% sound splits). round screen. inch, slot screen.
--------------------------------------------------------------------------------------------------------------------------------------------------------
(3) The term ``fall through'', as used herein, shall mean sound
split and broken kernels and whole kernels which pass through specified
screens.
(b) Cleaned inshell peanuts. No handler shall ship or otherwise
dispose of cleaned inshell peanuts for human consumption:
(1) With more than 1.00 percent kernels with mold present unless a
sample of such peanuts, drawn by an inspector of the Federal or
Federal-State Inspection Service, was analyzed chemically by
laboratories approved by the Committee or by a U.S. Department of
Agriculture laboratory (hereinafter referred to as ``USDA laboratory'')
and found to be wholesome relative to aflatoxin;
(2) with more than 2.00 percent peanuts with damaged kernels;
(3) with more than 10.00 percent moisture; or
(4) with more than 0.50 percent foreign material. The lot size of
such peanuts in bags or bulk shall not exceed 200,000 pounds.
(c) Sampling and testing shelled peanuts. (1) Prior to shipment,
each handler shall cause appropriate samples of each lot of edible
quality shelled peanuts to be drawn by an inspector of the Federal or
Federal-State Inspection Service. The gross amount of peanuts drawn
shall be large enough to provide for a grade analysis, for a grading
check-sample, and for three 48-pound samples for aflatoxin assay. The
three 48-pound samples shall be designated by the Federal or Federal-
State Inspection Service as ``Sample #1,'' ``Sample #2,'' and ``Sample
#3'' and each sample shall be placed in a suitable container and
``positive lot identified'' by means acceptable to the Inspection
Service and the Committee. Sample #1 may be prepared for immediate
testing or Sample #1, Sample #2, and Sample #3 may be returned to the
handler for testing at a later date. However, before shipment of the
lot to the buyer (receiver), the handler shall cause Sample #1 to be
ground by the Federal or Federal-State Inspection Service or a USDA or
designated laboratory in a ``subsampling mill'' approved by the
Committee. The resultant ground subsample from Sample #1 shall be of a
size specified by the Committee and be designated as ``Subsample 1-AB''
and at the handler's or buyer's option, a second subsample may also be
extracted from Sample #1. It shall be designated as ``Subsample 1-CD.''
Subsample 1-CD may be sent as requested by the handler or buyer, for
aflatoxin assay, to a laboratory listed on the most recent Committee
list of approved laboratories that can provide analyses results on such
samples in 36 hours. Subsample 1-AB shall be analyzed only in USDA or
designated laboratories. Both Subsamples 1-AB and 1-CD shall be
accompanied by a notice of sampling signed by the inspector containing,
at least, identifying information as to the handler (shipper), the
buyer (receiver), if known, and the positive lot identification of the
shelled peanuts. A copy of such notice covering each lot shall be sent
to the Committee office.
(2) The samples designated as Sample #2 and Sample #3 shall be held
as aflatoxin check-samples by the Inspection Service or the handler and
shall not be included in the shipment to the buyer until the analyses
results from Sample #1 are known. Upon call from the USDA or designated
laboratory or the Committee, the handler shall cause Sample #2 to be
ground by the Inspection Service in a ``subsampling mill.'' The
resultant ground subsample from Sample #2 shall be of the size
specified by the Committee and it shall be designated as ``Subsample 2-
AB.'' Upon call from the USDA or designated laboratory or the
Committee, the handler shall cause Sample #3 to be ground by the
Inspection Service in a ``subsampling mill.'' The resultant ground
subsample from Sample #3 shall be of the size specified by the
Committee and it shall be designated as ``Subsample 3-AB.'' Subsamples
2-AB and 3-AB shall be analyzed only in USDA or designated laboratories
and each shall be accompanied by a notice of sampling. A copy of each
such notice shall be sent to the Committee office and the cost of
delivery of Subsamples 2-AB and 3-AB to the laboratory and the cost of
assay on them shall be at the Committee's expense.
(3) All costs involved in sampling and testing Subsample 1-CD shall
be for the account of the buyer of the lot and at the buyer's expense.
However, if the handler elects to pay any portion of these cost the
handler shall charge the buyer accordingly. Aflatoxin sampling and
testing cost for the AB subsamples shall be included as a separate item
in the handler's invoice to the buyer at the rate of $0.0027 per pound
or $0.27 per hundredweight of the peanuts covered by the invoice. When
any of the samples or subsamples have been lost, misplaced, or spoiled
and replacement samples are needed, the entire cost of drawing the
replacement samples shall be for the account of the handler. The
results of each assay shall be reported to the buyer listed on the
notice of sampling and, if the handler desires, to the handler. If a
buyer is not listed on the notice of sampling, the results of the assay
shall be reported to the handler, who shall promptly cause notice to be
given to the buyer of the contents thereof, and such handler shall not
be required to furnish additional samples for assay.
(4) 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 as determined by
the Committee's sampling plan applicable to the respective grade
categories.
(d) Identification. Each lot of shelled or cleaned inshell peanuts,
in lot sizes not exceeding 200,000 pounds, shall be identified by
positive lot identification procedures prior to being shipped or
otherwise disposed of. For the purpose of this regulation, ``positive
lot
[[Page 51828]]
identification'' of a lot of shelled or inshell peanuts is a means of
relating the inspection certificate to the lot which has been inspected
so that there can be no doubt that the peanuts are the same ones
described on the inspection certificate. The crop year that is shown on
the positive lot identification tags, or other means of positive lot
identification shall accurately describe the crop year in which the
peanuts in the lot were produced. Such procedure on bagged peanuts
shall consist of attaching a lot numbered tag bearing the official
stamp of the Federal or Federal-State Inspection Service to each filled
bag in the lot. The tag shall be sewed (machine sewed if shelled
peanuts) into the closure of the bag except that in plastic bags the
tag shall be inserted prior to sealing so that the official stamp is
visible. Any peanuts moved in bulk or bulk bins shall have their lot
identity maintained by sealing the conveyance and if in other
containers by other means acceptable to the Federal or Federal-State
Inspection Service and to the Committee. All lots of shelled or cleaned
inshell peanuts shall be handled, stored, and shipped under positive
lot identification procedures, except that lots which have been
reconstituted and/or commingled at the request of the receiver. All
such reconstituted and/or commingled lots will no longer be eligible
for indemnification or for appeal inspection. Handlers shall keep and
maintain records of the quantities involved in each reconstituting and/
or commingling procedure, whether in single or multiple lots, and such
records shall be available to the Committee on request.
(e) Reinspection. Whenever the Committee has reason to believe that
peanuts may have been damaged or deteriorated while in storage, the
Committee may reject the then effective inspection certificate and may
require the owner of the peanuts to have a reinspection to establish
whether or not such peanuts may be disposed of for human consumption.
(f) Further modification of Sec. 998.32.
(1) The provisions of Sec. 998.32(a) restricting the disposition of
peanuts which fail to meet the requirements specified heretofore in
this section to the Commodity Credit Corporation or in such manner as
may be prescribed by the Committee with the approval of the Secretary,
is hereby modified to specify that only peanuts which have been
certified as meeting the requirements specified in paragraphs (a) or
(b) of this section, which have been sampled pursuant to paragraph (c)
of this section, and which have been identified pursuant to paragraph
(d) of this section are eligible for disposition to human consumption
outlets.
(2) Lots of peanuts which have not been certified as meeting the
requirements for disposition to human consumption outlets, may be
disposed for non-human consumption uses which are not regulated or
limited by the provisions specified hereinafter in this section:
Provided, That each such lot is positive lot identified, using red
tags, and certified as to aflatoxin content (actual numerical count).
However, on the shipping papers covering the disposition of each such
lot of inedible quality peanuts, the handler shall cause the following
statement to be shown: ``The peanuts covered by this bill of lading (or
invoice, etc.) are not to be used for human consumption.''
(3) Except for inedible quality peanuts disposed of under the
provisions of paragraph (f)(2) of this section and peanuts derived from
the milling for seed of Segregation 2 and 3 farmers stock peanuts,
peanuts which have not been certified as meeting the standards set
forth in paragraphs (a) or (b) of this section shall be disposed of as
prescribed hereinafter in this section.
(g) Sheller oil stock residuals--for crushing or export. Peanuts
and portions of peanuts which are separated from edible quality peanuts
by screening or sorting or other means during the milling process, may
be segregated into categories or commingled as sheller oil stock
residuals. Such sheller oil stock residuals shall be identified
pursuant to paragraph (d) of this section, but using a red tag, and
such peanuts may be disposed of domestically or to the export market in
bulk or bags or other suitable containers. Disposition to crushing may
be to handlers who are crushers or to domestic crushers who are not
handlers under the Agreement only on the condition that they agree to
comply with the terms of this paragraph and all other applicable
requirements of the Agreement. The movement of such peanuts shall be
reported to the Committee by the shipping handler and the crusher, as
requested by the Committee.
(1) If the peanuts have not been tested and certified as to
aflatoxin content, as prescribed in paragraph (c) of this section, the
handler shall cause the following statement to be shown on the shipping
papers: ``The peanuts covered by this bill of lading (or invoice, etc.)
are limited to crushing only and may contain aflatoxin.''
(2) If the peanuts are certified as 301 ppb or more aflatoxin
content, disposition shall be limited to crushing or export.
(h) Blanching and remilling peanuts failing quality requirements.
(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 because of excessive damage, minor defects, moisture, or
foreign material or are positive as to aflatoxin. Prior to movement of
such peanuts to a blancher, handlers shall report to the Committee, on
a form furnished by the Committee, and receive authorization from the
Committee for movement and blanching of each such lot. 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 for unshelled peanuts,
damaged kernels, minor defects, moisture, and foreign material as
listed in paragraph (a) of this section and be accompanied by an
aflatoxin certificate determined to be negative by the Committee. The
residual peanuts, excluding skins and hearts, resulting from blanching
under these provisions, shall be bagged 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 domestic 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. Prior to
[[Page 51829]]
movement of such peanuts under these provisions to a Committee approved
remiller, handlers shall report to the Committee, on a form furnished
by the Committee, and receive authorization from the Committee for
movement and remilling of each such lot. 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
bagged 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 domestic 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.
(i) Documentation of compliance. Each handler shall keep and
maintain records of all receipts and acquisitions and all milling,
remilling, blanching, use and disposition of peanuts which have not
been certified as meeting the requirements for disposition to human
consumption, pursuant to paragraph (a) or (b) of this section, as will
document and substantiate compliance and performance under this
agreement.
PART 999--SPECIALTY CROPS; IMPORT REGULATIONS
1. The authority citation for 7 CFR part 999 continues to read as
follows:
Authority: 7 U.S.C. 601-674; and 7 U.S.C. 1445c-3.
2. Section 999.600 is revised to read as follows:
Sec. 999.600 Regulation governing imports of peanuts.
(a) Definitions. (1) Peanuts means the seeds of the legume Arachis
hypogaea and includes both inshell and shelled peanuts produced in
countries other than the United States, other than those marketed in
green form for consumption as boiled peanuts.
(2) Farmers stock peanuts means picked and threshed raw peanuts
which have not been shelled, crushed, cleaned or otherwise changed
(except for removal of foreign material, loose shelled kernels, and
excess moisture) from the form in which customarily marketed by
producers.
(3) Inshell peanuts means peanuts, the kernels or edible portions
of which are contained in the shell.
(4) Incoming inspection means the sampling and inspection of
farmers stock peanuts to determine Segregation quality.
(5) Segregation 1 peanuts, unless otherwise specified, means
farmers stock peanuts with not more than 2.00 percent damaged kernels
nor more than 1.00 percent concealed damage caused by rancidity, mold,
or decay and which are free from visible Aspergillus flavus mold.
(6) Segregation 2 peanuts, unless otherwise specified, means
farmers stock peanuts with more than 2.00 percent damaged kernels or
more than 1.00 percent concealed damage caused by rancidity, mold, or
decay and which are free from visible Aspergillus flavus mold.
(7) Segregation 3 peanuts, unless otherwise specified, means
farmers stock peanuts with visible Aspergillus flavus mold.
(8) Shelled peanuts means the kernels of peanuts after the shells
are removed.
(9) Outgoing inspection means the sampling and inspection of
either: shelled peanuts which have been cleaned, sorted, sized and
otherwise prepared for human consumption markets; or inshell peanuts
which have been cleaned, sorted and otherwise prepared for inshell
human consumption markets.
(10) Negative aflatoxin content means 15 parts-per-billion (ppb) or
less for peanuts which have been certified as meeting edible quality
grade requirements, and 25 ppb or less for inedible quality peanuts.
(11) Person means an individual, partnership, corporation,
association, or any other business unit.
(12) Secretary means the Secretary of Agriculture of the United
States or any officer or employee of the United States Department of
Agriculture (Department or USDA) who is, or who may hereafter be,
authorized to act on behalf of the Secretary.
(13) Inspection service means the Federal or Federal-State
Inspection Service, Fruit and Vegetable Division, Agricultural
Marketing Service, USDA.
(14) USDA laboratory means laboratories of the Science and
Technology Division, Agricultural Marketing Service, USDA, that
chemically analyze peanuts for aflatoxin content.
(15) PAC approved laboratories means laboratories approved by the
Peanut Administrative Committee, pursuant to Peanut Marketing Agreement
No. 146 (7 CFR Part 998), that chemically analyze peanuts for aflatoxin
content.
(16) Conditionally released means released from Customs Service
custody for further handling (sampling, inspection, chemical analysis,
or storage) before final release.
(17) Importation means the arrival of a peanut shipment at a port-
of-entry with the intent to enter the peanuts into channels of commerce
of the United States.
(b) Incoming regulation: (1) Farmers stock peanuts presented for
consumption must undergo incoming inspection. Only Segregation 1
peanuts may be used for human consumption. All foreign produced farmers
stock peanuts for human consumption must be sampled and inspected at a
buying point or other handling facility capable of performing incoming
sampling and inspection. Sampling and inspection shall be conducted by
the inspection service. Only Segregation 1 peanuts certified as meeting
the following requirements may be used in human consumption markets:
(i) Moisture. Except as provided under paragraph (b)(2) Seed
peanuts, of this section, peanuts may not contain more than 10.49
percent moisture: Provided, That peanuts of a higher moisture content
may be received and dried to not more than 10.49 percent moisture prior
to storage or milling.
(ii) Foreign material. Peanuts may not contain more than 10.49
percent foreign material, except that peanuts having a higher foreign
material content may be held separately until milled, or moved over a
sand-screen before storage, or shipped directly to a plant for prompt
shelling. The term ``sand-screen'' means any type of farmers stock
cleaner which, when in use, removes sand and dirt.
(iii) Damage. For the purpose of determining damage, other than
concealed damage, on farmers stock peanuts, all percentage
determinations
[[Page 51830]]
shall be rounded to the nearest whole number.
(2) Seed peanuts. Farmers stock peanuts determined to be
Segregation 1 quality, and shelled peanuts certified negative to
aflatoxin (15 ppb or less), may be imported for seed purposes.
Residuals from the shelling of Segregation 1 seed peanuts may be milled
with other imported peanuts of the importer, and such residuals meeting
quality requirements specified in paragraph (c)(1) of this section may
be disposed to human consumption channels. Any portion not meeting such
quality requirements shall be disposed to inedible peanut channels
pursuant to paragraphs (f) and (g) of this section. All disposition of
seed peanuts and residuals from seed peanuts, whether commingled or
kept separate and apart, shall be reported to the Secretary pursuant to
paragraphs (f)(2) and (f)(3) of this section. The receiving seed outlet
must retain records of the transaction, pursuant to paragraph (g)(7) of
this section.
(3) Oilstock and exportation. Farmers stock peanuts of lower
quality than Segregation 1 (Segregation 2 and 3 peanuts) shall be used
only in inedible outlets. Segregation 2 and 3 peanuts may be commingled
but shall be kept separate and apart from edible quality peanut lots.
Commingled Segregation 2 and 3 peanuts and Segregation 3 peanuts shall
be disposed only to oilstock or exported. Shelled peanuts and cleaned-
inshell peanuts which fail to meet the requirements for human
consumption in paragraphs (c)(1) or (c)(2), respectively, of
Sec. 997.600, may be crushed for oil or exported.
(c) Outgoing regulation. No person shall import peanuts for human
consumption into the United States unless such peanuts are lot
identified and certified by the inspection service as meeting one of
the following requirements:
(1) Shelled peanuts. (i) No importer shall ship or otherwise
dispose of shelled peanuts to human consumption markets unless such
peanuts are lot identified, certified as ``negative'' to aflatoxin, and
meet the requirements specified in Table 1.
Table 1.--Minimum Grade Requirements--Peanuts for Human Consumption
[Whole Kernels and Splits]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Maximum limitations
---------------------------------------------------------------------------------------------------------------------------------------------------------
Excluding lots of ``splits''
---------------------------------------------------------------------------------------------------------------------------------------------------------
Unshelled Fall through
Unshelled peanuts ------------------------------------------------------------------
peanuts and damaged Foreign
Type and grade category damaged kernels and materials Moisture
kernels minor Sound split and Sound whole kernels Total (percent) (percent)
(percent) defects broken kernels
(percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Runner............................ 1.50 2.50 3.00%; \17/64\ inch 3.00%; \16/64\ x \3/ 4.00%; both screens. .20 9.00
round screen. 4\ inch; slot
screen.
Virginia (except No. 2)........... 1.50 2.50 3.00%; \17/64\ inch; 3.00%; \15/64\ x 1 4.00%; both screens. .20 9.00
round screen. inch; slot screen.
Spanish and Valencia.............. 1.50 2.50 3.00%; \16/64\ inch; 3.00%; \15/64\ x \3/ 4.00%; both screens. .20 9.00
round screen. 4\ inch; slot
screen.
No. 2 Virginia.................... 1.50 3.00 6.00%; \17/64\ inch; 6.00%; \15/64\ x 1 6.00%; both screens. .20 9.00
round screen. inch; slot screen.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Lots of ``splits''
--------------------------------------------------------------------------------------------------------------------------------------------------------
Runner (not more than 4% sound 1.50 2.50 3.00%; \17/64\ inch; 3.00%; \14/64\ x \3/ 4.00%; both screens. .20 9.00
whole kernels). round screen. 4\ inch; slot
screen.
Virginia (not less than 90% 1.50 2.50 3.00%; \17/64\ inch; 3.00%; \14/64\ x 1 4.00%; both screens. .20 9.00
splits). round screen. inch; slot screen.
Spanish and Valencia (not more 1.50 2.50 3.00%; \16/64\ inch; 3.00%; \13/64\ x \3/ 4.00%; both screens. .20 9.00
than 4% sound whole kernels). round screen. 4\ inch; slot
screen.
--------------------------------------------------------------------------------------------------------------------------------------------------------
(ii) Shelled peanuts which are lot identified, certified as
``negative'' to aflatoxin pursuant to paragraph (d)(4)(v) of this
section, and meet requirements specified in the Table 2, may be shipped
to human consumption markets prior to the importer receiving such
aflatoxin certification.
[[Page 51831]]
Table 2.--Superior Quality Requirements--Peanuts for Human Consumption
[Whole Kernels and Splits]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Maximum limitations
---------------------------------------------------------------------------------------------------------------------------------------------------------
Unshelled Fall through
Unshelled peanuts ------------------------------------------------------------------
peanuts and damaged Foreign
Type and grade category damaged kernels and Sound split and material Moisture
kernels minor broken kernels Sound whole kernels Total (percent) (percent)
(percent) defects (percent) (percent)
(percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Runner U.S. No.1 and better....... 1.25 2.00 3.00%; \17/64\ inch, 3.00%; \16/64\ x \3/ 4%; both screens.... .10 9.00.
round screen. 4\ inch, slot
screen.
Virginia U.S. No.1 and better..... 1.25 2.00 3.00%; \17/64\ inch, 3.00%; \15/64\ x 1 4.00%; both screens. .10 9.00
round screen. inch, slot screen.
Spanish and Valencia U.S. No.1 and 1.25 2.00 3.00%; \16/64\ inch, 2.00%; \15/64\ x \3/ 4.00%; both screens. .10 9.00
better. round screen. 4\ inch, slot
screen.
Runner U.S. Splits (not more than 1.25 2.00 2.00%; \17/64\ inch, 3.00%; \14/64\ x \3/ 4.00%; both screens. 20 9.00
4% sound, whole kernels). round screen. 4\ inch, slot
screen.
Virginia U.S. Splits (not less 1.25 2.00 3.00%; \17/64\ inch, 3.00%; \14/64\ x 1 4.00%; both screens. .20 9.00
than 90% splits and not more than round screen. inch, slot screen.
3.00% sound whole kernels and
portions passing through \20/64\
inch round screen).
Spanish and Valencia U.S. Splits 1.25 2.00 2.00%; \16/64\ inch, 3.00%; \13/64\ x \3/ 4.00%; both screens. .20 9.00
(not more than 4% sound, whole round screen. 4\ inch, slot
kernels). screen.
Runner with splits (not more than 1.25 2.00 3.00%; \17/64\ inch, 3.00%; \16/64\ x \3/ 4.00%; both screens. .10 9.00
15% sound splits). round screen. 4\ inch, slot
screen.
Virginia with splits (not more 1.25 2.00 3.00%; \17/64\ inch, 3.00%; \15/64\ x 1 4.00%; both screens. .10 9.00
than 15% sound splits). round screen. inch, slot screen.
Spanish and Valencia with splits 1.25 2.00 3.00%; \16/64\ inch, 2.00%; \15/64\ x \3/ 4.00%; both screens. .10 9.00
(not more than 15% sound splits). round screen. 4\ inch, slot
screen.
--------------------------------------------------------------------------------------------------------------------------------------------------------
(iii) The term ``fall through'', as used herein, 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 (d) of this section from each lot of
Superior Quality peanuts.
(2) Cleaned-inshell peanuts. Peanuts declared as cleaned-inshell
peanuts may be presented for sampling and outgoing inspection in bags
at the port-of-entry. Alternatively, peanuts may be conditionally
released as cleaned-inshell peanuts but shall not subsequently undergo
any cleaning, sorting, sizing or drying process prior to presentation
for outgoing inspection as cleaned-inshell peanuts. Cleaned-inshell
peanuts which fail outgoing inspection may be reconditioned or
redelivered to the port-of-entry, at the option of the importer.
Cleaned-inshell peanuts determined to be unprepared farmers stock
peanuts must be inspected against incoming quality requirements and
determined to be Segregation 1 peanuts prior to outgoing inspection for
cleaned-inshell peanuts. Cleaned-inshell peanuts intended for human
consumption may not contain more than:
(i) 1.00 percent kernels with mold present, unless a sample of such
peanuts is drawn by the inspection service and analyzed chemically by a
USDA or PAC approved laboratory and certified ``negative'' as to
aflatoxin.
(ii) 2.00 percent peanuts with damaged kernels;
(iii) 10.00 percent moisture (carried to the hundredths place); and
(iv) 0.50 percent foreign material.
(d) Sampling and inspection. (1) All sampling and inspection,
quality certification, chemical analysis, and lot identification,
required under this section, shall be done by the inspection service, a
USDA laboratory, or a PAC-approved laboratory, as applicable, in
accordance with the procedures specified herein. The importer shall
make arrangements with the inspection service for sampling, inspection,
lot identification and certification of all peanuts accumulated by the
importer. The importer also shall make arrangements for the appropriate
disposition of peanuts failing edible quality requirements of this
section. All costs of sampling, inspection, certification,
identification, and disposition incurred in meeting the requirements of
this section shall be paid by the importer. Whenever peanuts are
offered for inspection, the importer shall furnish any labor and pay
any costs incurred in moving and opening containers as may be necessary
for proper sampling and inspection.
(2) For farmers stock inspection, the importer shall cause the
inspection service to perform an incoming inspection and to issue an
CFSA-1007, ``Inspection Certificate and Sales Memorandum'' form
designating the lot as Segregation 1, 2, or 3 quality peanuts. For
shelled and cleaned-inshell peanuts,
[[Page 51832]]
the importer shall cause the inspection service to perform an outgoing
inspection and issue an FV-184-9A, ``Milled Peanut Inspection
Certificate'' reporting quality and size of the shelled or cleaned-
inshell peanuts, whether the lot meets or fails to meet quality
requirements for human consumption of this section, and that the lot
originated in a country other than the United States. The importer
shall provide to the Secretary copies of all CFSA 1007 and FV-184-9A
applicable to each peanut lot conditionally released to the importer.
Such reports shall be submitted as provided in paragraphs (f)(2) and
(f)(3) of this section.
(3) Procedures for sampling and testing peanuts. Sampling and
testing of peanuts for incoming and outgoing inspections of peanuts
presented for consumption into the United States will be conducted as
follows:
(i) Application for sampling. The importer shall request inspection
and certification services from one of the following inspection service
offices convenient to the location where the peanuts are presented for
incoming and/or outgoing inspection. To avoid possible delays, the
importer should make arrangements with the inspection service in
advance of the inspection date. A copy of the Customs Service entry
document specific to the peanuts to be inspected shall be presented to
the inspection official prior to sampling of the lot.
(A) The following offices provide incoming farmers stock
inspection:
Dothan, AL, tel: (334) 792-5185,
Graceville, FL, tel: (904) 263-3204,
Winter Haven, FL, tel: (813) 291-5820, ext 260,
Albany, GA, tel: (912) 432-7505,
Williamston, NC, tel: (919) 792-1672,
Columbia, SC, tel: (803) 253-4597,
Suffolk, VA, tel: (804) 925-2286,
Portales, NM, tel: (505) 356-8393,
Oklahoma City, OK, tel: (405) 521-3864,
Gorman, TX, tel: (817) 734-3006,
Yuma, AZ, tel: (602) 344-3869.
(B) The following offices, in addition to the offices listed in
paragraph (d)(3)(i)(A) of this section, provide outgoing sampling and/
or inspection services, and certify shelled and cleaned-inshell peanuts
as meeting or failing the quality requirements of this section:
Eastern U.S.
Mobile, AL, tel: (205) 690-6154,
Jacksonville, FL, tel: (904) 359-6430,
Miami, FL, tel: (305) 592-1375,
Tampa, FL, tel: (813) 272-2470,
Presque Isle, ME, tel: (207) 764-2100,
Baltimore/Washington, tel: (301) 344-1860,
Boston, MA, tel: (617) 389-2480,
Newark, NJ, tel: (201) 645-2670,
New York, NY, tel: (212) 718-7665,
Buffalo, NY, tel: (716) 824-1585,
Philadelphia, PA, tel: (215) 336-0845,
Norfolk, VA, tel: (804) 441-6218,
Central U.S.
New Orleans, LA, tel: (504) 589-6741,
Detroit, MI, tel: (313) 226-6059,
St. Paul, MN, tel: (612) 296-8557,
Las Cruces, NM, tel: (505) 646-4929,
Alamo, TX, tel: (210) 787-4091,
El Paso, TX, tel: (915) 540-7723,
Houston, TX, tel: (713) 923-2557,
Western U.S.
Nogales, AZ, tel: (602) 281-0783,
Los Angeles, CA, tel: (213) 894-2489,
San Francisco, CA, tel: (415) 876-9313,
Honolulu, HI, tel: (808) 973-9566,
Salem, OR, tel: (503) 986-4620,
Seattle, WA, tel: (206) 859-9801.
(C) Questions regarding inspection services or requests for further
assistance may be obtained from: Fresh Products Branch, P.O. Box 96456,
room 2049-S, Fruit and Vegetable Division, AMS, USDA, Washington, D.C.
20090-6456, telephone (202) 690-0604, fax (202) 720-0393.
(ii) Sampling. Sampling of bulk farmers stock lots shall be
performed at a facility that utilizes a pneumatic sampler or approved
automatic sampling device. The size of farmers stock lots, shelled
lots, and cleaned-inshell lots, in bulk or bags, shall not exceed
200,000 pounds. For farmers stock, shelled and cleaned-inshell lots not
completely accessible for sampling, the applicant shall be required to
have lots made accessible for sampling pursuant to inspection service
requirements. The importer shall cause appropriate samples of each lot
of edible quality shelled peanuts to be drawn by the inspection
service. The amount of such peanuts drawn shall be large enough to
provide for a grade and size analysis, for a grading check-sample, and
for three 48-pound samples for aflatoxin assay. Because there is no
acceptable method of drawing official samples from bulk conveyances of
shelled peanuts, the importer shall arrange to have bulk conveyances of
shelled peanuts sampled during the unloading process. A bulk lot
sampled in this manner must be positive lot identified by the
inspection service and held in a sealed bin until the associated
inspection and aflatoxin test results have been reported.
(4) Aflatoxin assay. (i) The importer shall cause appropriate
samples of each lot of shelled peanuts intended for edible consumption
to be drawn by the inspection service. The three 48-pound samples shall
be designated by the inspection service as ``Sample 1IMP,'' ``Sample
2IMP,'' and ``Sample 3IMP'' and each sample shall be placed in a
suitable container and lot identified by the inspection service. Sample
1IMP may be prepared for immediate testing or Samples 1IMP, 2IMP and
3IMP may be returned to the importer for testing at a later date, under
lot identification procedures.
(ii) The importer shall cause Sample 1IMP to be ground by the
inspection service or a USDA or PAC-approved laboratory in a
subsampling mill. The resultant ground subsample shall be of a size
specified by the inspection service and shall be designated as
``Subsample 1-ABIMP.'' At the importer's option, a second subsample may
also be extracted from Sample 1IMP and designated ``Subsample 1-CDIMP''
which may be sent for aflatoxin assay to a USDA or PAC-approved
laboratory. Both subsamples shall be accompanied by a notice of
sampling signed by the inspector containing identifying information as
to the importer, the lot identification of the shelled peanut lot, and
other information deemed necessary by the inspection service.
Subsamples 1-ABIMP and 1-CDIMP shall be analyzed only in a USDA or PAC-
approved laboratory. The methods prescribed by the Instruction Manual
for Aflatoxin Testing, SD Instruction-1, August 1994, shall be used to
assay the aflatoxin level. The cost of testing and notification of
Subsamples 1-ABIMP and 1-CDIMP shall be borne by the importer.
(iii) The samples designated as Sample 2IMP and Sample 3IMP shall
be held as aflatoxin check-samples by the inspection service or the
importer until the analyses results from Sample 1IMP are known. Upon
call from the USDA or PAC-approved laboratory, the importer shall cause
Sample 2IMP to be ground by the inspection service in a subsampling
mill. The resultant ground subsample from Sample 2IMP shall be
designated as ``Subsample 2-ABIMP.'' Upon further call from the
laboratory, the importer shall cause Sample 3IMP to be ground by the
inspection service in a subsampling mill. The resultant ground
subsample shall be designated as ``Subsample 3-ABIMP.'' The importer
shall cause Subsamples 2-ABIMP and 3-ABIMP to be sent to and analyzed
only in a USDA or PAC-approved laboratory. Each subsample shall be
accompanied by a notice of sampling. The results of each assay shall be
reported by the laboratory to the importer. All costs involved in the
sampling, shipment and assay analysis
[[Page 51833]]
of subsamples required by this section shall be borne by the importer.
(iv)(A) Importers should contact one of the following USDA or PAC-
approved laboratories to arrange for chemical analysis.
Science and Technology Division, AMS/USDA, P.O. Box 279, 301 West Pearl
St., Aulander, NC 27805, Tel: (919) 345-1661 Ext. 156, Fax: (919) 345-
1991
Science and Technology Division, AMS/USDA, 1211 Schley Ave., Albany, GA
31707, Tel: (912) 430-8490 / 8491, Fax: (912) 430-8534
Science and Technology Division, AMS/USDA, P.O. Box 488, Ashburn, GA
31714, Tel: (912) 567-3703
Science and Technology Division, AMS/USDA, 610 North Main St., Blakely,
GA 31723, Tel: (912) 723-4570, Fax: (912) 723-3294
Science and Technology Division, AMS/USDA, 1557 Reeves St., Dothan, AL
36303, Tel: (334) 794-5070, Fax: (334) 671-7984
Science and Technology Division, AMS/USDA, 107 South Fourth St.,
Madill, OK 73446, Tel: (405) 795-5615, Fax: (405) 795-3645
Science and Technology Division, AMS/USDA, P.O. Box 272, 715 N. Main
Street, Dawson, GA 31742, Tel: (912) 995-7257, Fax: (912) 995-3268
Science and Technology Division, AMS/USDA, P.O. Box 1130, 308 Culloden
St., Suffolk, VA 23434, Tel: (804) 925-2286, Fax: (804) 925-2285
ABC Research, 3437 SW 24th Avenue, Gainesville, FL 32607-4502, Tel:
(904) 372-0436, Fax: (904) 378-6483
J. Leek Associates, Inc., P.O. Box 50395, 1200 Wyandotte (31705),
Albany, GA 31703-0395, Tel: (912) 889-8293, Fax: (912) 888-1166
J. Leek Associates, Inc., P.O. Box 368, 675 East Pine, Colquitt, GA
31737, Tel: (912) 758-3722, Fax: (912) 758-2538
J. Leek Associates, Inc., P.O. Box 6, 502 West Navarro St., DeLeon, TX
76444, Tel: (817) 893-3653, Fax: (817) 893-3640
Pert Laboratories, P.O. Box 267, Peanut Drive, Edenton, NC 27932, Tel:
(919) 482-4456, Fax: (919) 482-5370
Pert Laboratory South, P.O. Box 149, Hwy 82 East, Seabrook Drive,
Sylvester, GA 31791, Tel: (912) 776-7676, Fax: (912) 776-1137
Professional Service Industries, Inc., 3 Burwood Lane, San Antonio, TX
78216, Tel: (210) 349-5242, Fax: (210) 342-9401
Southern Cotton Oil Company, 600 E. Nelson Street, P.O. Box 180,
Quanah, TX 79252, Tel: (817) 663-5323, Fax: (817) 663-5091
Quanta Lab, 9330 Corporate Drive, Suite 703, Selma, TX 78154-1257, Tel:
(210) 651-5799, Fax: (210) 651-9271
(B) Further information concerning the chemical analyses required
pursuant to this section may be obtained from: Science and Technology
Division, USDA/AMS, P.O. Box 96456, room 3507-S, Washington, DC 20090-
6456, telephone (202) 720-5231, or facsimile (202) 720-6496.
(v) Reporting aflatoxin assays. A separate aflatoxin assay
certificate, Form CSSD-3 ``Certificate of Analysis for Official
Samples'' or equivalent PAC approved laboratory form, shall be issued
by the laboratory performing the analysis for each lot. The assay
certificate shall identify the importer, the volume of the peanut lot
assayed, date of the assay, and numerical test result of the assay. The
results of the assay shall be reported as follows.
(A) For the current peanut quota year, ``negative'' aflatoxin
content means 15 parts per billion (ppb) or less aflatoxin content for
peanuts which have been certified as meeting edible quality grade
requirements. Such lots shall be certified as ``Meets U.S. import
requirements for edible peanuts under Sec. 999.600 with regard to
aflatoxin.''
(B) Lots containing more than 15 ppb aflatoxin content shall be
certified as ``Fails to meet U.S. import requirements for edible
peanuts under Sec. 999.600 with regard to aflatoxin.'' The certificate
of any inedible peanut lot also shall specify the aflatoxin count in
ppb. The importer shall file USDA Form CSSD-3, or equivalent form, with
the Secretary, regardless of the test result.
(5) Appeal inspection. In the event an importer questions the
results of a quality and size inspection, an appeal inspection may be
requested by the importer and performed by the inspection service. A
second sample will be drawn from each container and shall be double the
size of the original sample. The results of the appeal sample shall be
final and the fee for sampling, grading and aflatoxin analysis shall be
charged to the importer.
(e) Disposition of peanuts failing edible quality requirements.
Peanuts shelled, sized and sorted in another country prior to arrival
in the U.S. and shelled peanuts which originated from imported
Segregation 1 peanuts that fail quality requirements of Table 1
(excessive damage, minor defects, moisture, or foreign material) or are
positive to aflatoxin may be reconditioned by remilling and/or
blanching. After such reconditioning, peanuts meeting the quality
requirements of Table 1 and which are negative to aflatoxin (15 ppb or
less) may be disposed for edible peanut use. Residual peanut lots
resulting from milling or reconditioning of such lots shall be disposed
of as prescribed below:
(1) Failing peanut lots may be disposed for non-human consumption
uses (such as livestock feed, wild animal feed, rodent bait, seed,
etc.) which are not otherwise regulated by this section; Provided, that
each such lot is lot identified and certified as to aflatoxin content
(actual numerical count). On the shipping papers covering the
disposition of each such lot, the importer shall cause the following
statement to be shown: ``The peanuts covered by this bill of lading (or
invoice) are not to be used for human consumption.''
(2) Peanuts, and portions of peanuts which are separated from
edible quality peanuts by screening or sorting or other means during
the milling process (``sheller oilstock residuals''), may be sent to
inedible peanut markets pursuant to paragraph (e)(1) of this section,
crushed or exported. Such peanut may be commingled with other milled
residuals. Such peanuts shall be positive lot identified, red tagged in
bulk or bags or other suitable containers.
(i) If such peanuts have not been certified as to aflatoxin
content, as prescribed in paragraph (d) of this section, disposition is
limited to crushing and the importer shall cause the following
statement to be shown on the shipping papers: ``The peanuts covered by
this bill of lading (or invoice, etc.) are limited to crushing only and
may contain aflatoxin.''
(ii) If the peanuts are certified as 301 ppb or more aflatoxin
content, disposition shall be limited to crushing or export.
(3) Shelled peanuts which originated from Segregation 1 peanuts
that fail quality requirements of Table 1, peanuts derived from the
milling for seed of Segregation 2 and 3 farmers stock peanuts, and
peanuts which are positive to aflatoxin may be remilled or blanched.
Residuals of remilled and/or blanched peanuts which continue to fail
quality requirements of Table 1 shall be disposed of pursuant to
paragraphs (e)(1) or (2) of this section.
(4) All certifications, lot identifications, and movement to
inedible dispositions, sufficient to account for all peanuts in each
consumption entry, shall be reported to the Secretary by the importer
pursuant to paragraphs (f)(2) and (f)(3) of this section.
(f) Safeguard procedures. (1) Prior to arrival of a foreign
produced peanut lot
[[Page 51834]]
at a port-of-entry, the importer, or customs broker acting on behalf of
the importer, shall mail or send by facsimile transmission (fax) a copy
of the Customs Service entry documentation for the peanut lot or lots
to the inspection service office that will perform sampling of the
peanut shipment. More than one lot may be entered on one entry
document. The documentation shall include identifying lot(s) or
container number(s) and volume of the peanuts in each lot being
entered, and the location (including city and street address), date and
time for inspection sampling. The inspection office shall sign, stamp,
and return the entry document to the importer. The importer shall
present the stamped document to the Customs Service at the port-of-
entry and send a copy of the document to the Secretary. The importer
also shall cause a copy of the entry document to accompany the peanut
lot and be presented to the inspection service at the inland
destination of the lot.
(2) The importer shall file with the Secretary copies of the entry
document and grade, aflatoxin, and lot identification certifications
sufficient to account for all peanuts in each lot listed on the entry
document filed by the importer. Positive lot identification of residual
lots, transfer certificates, and other documentation showing inedible
disposition or export, such as bills of lading and sales receipts,
export declarations, or certificates of burying, which report the
weight of peanuts being disposed and the name, address and telephone
number of the inedible peanut receiver, must be sent to the Marketing
Order Administration Branch, Attn: Report of Imported Peanuts.
Facsimile transmissions and overnight mail may be used to ensure timely
receipt of inspection certificates and other documentation. Fax reports
should be sent to (202) 720-5698. Overnight and express mail deliveries
should be addressed to USDA, AMS, Marketing Order Administration
Branch, 14th and Independence Avenue, SW, Room: 2525-S, Washington,
D.C., 20250, Attn: Report of Imported Peanuts. Regular mail should be
sent to AMS, USDA, P.O. Box 96456, room 2526-S, Washington, DC 20090-
6456, Attn: Report of Imported Peanuts. Telephone inquiries should be
made to (202) 720-6862.
(3) Certificates and other documentation for each peanut lot must
be filed within 23 days of the date of filing for consumption entry,
or, if a redelivery notice is issued on the peanut lot, subsequently
filed prior to conclusion of the redelivery period which will be 60
days, unless otherwise specified by the Customs Service.
(4) The Secretary shall ask the Customs Service to issue a
redelivery demand for foreign produced peanut lots failing to meet
requirements of this section. Extensions in a redelivery period granted
by the Customs Service will be correspondingly extended by the
Secretary, upon request of the importer. Importers unable to account
for the disposition of all peanuts covered in a redelivery order, or
redeliver such peanuts, shall be liable for liquidated damages. Failure
to fully comply with quality and handling requirements or failure to
notify the Secretary of disposition of all foreign produced peanuts, as
required under this section, may result in a compliance investigation
by the Secretary. Falsification of reports submitted to the Secretary
is a violation of Federal law punishable by fine or imprisonment, or
both.
(5) Reinspection. Whenever the Secretary has reason to believe that
peanuts may have been damaged or deteriorated while in storage, the
Secretary may reject the then effective inspection certificate and may
require the importer to have the peanuts reinspected to establish
whether or not such peanuts may be disposed of for human consumption.
(6) Early arrival and storage. Peanut lots sampled and inspected
upon arrival in the United States, but placed in storage for more than
one month prior to beginning of the quota year for which the peanuts
will be entered, must be reported to AMS at the time of inspection. The
importer shall file copies of the Customs Service documentation, copies
of the lot's grade and aflatoxin certificates, and the city, street
address and any identifying number of the storage warehouse. Such
peanuts should be stored in clean, dry warehouses and under cold
storage conditions consistent with industry standards. Pursuant to
paragraph (f)(5) of this section, the Secretary may require
reinspection of the lot at the time the lot is declared for entry with
the Customs Service.
(g) Additional requirements. (1) Nothing contained in this section
shall preclude any importer from milling or reconditioning, prior to
importation, any shipment of peanuts for the purpose of making such lot
eligible for importation into the United States. However, all peanuts
presented for entry for human consumption use must be certified as
meeting the quality requirements specified in paragraph (c) of this
section.
(2) Conditionally released peanut lots of like quality and
belonging to the same importer may be commingled. Defects in an
inspected lot may not be blended out by commingling with other lots of
higher quality. Commingling also must be consistent with applicable
Customs Service regulations. Commingled lots must be reported and
disposed of pursuant to paragraphs (f)(2) and (f)(3) of this section.
(3) Inspection by the Federal or Federal-State Inspection Service
shall be available and performed in accordance with the rules and
regulations governing certification of fresh fruits, vegetables and
other products (7 CFR part 51). The importer shall make each
conditionally released lot available and accessible for inspection as
provided herein. Because inspectors may not be stationed in the
immediate vicinity of some ports-of-entry, importers must make
arrangements for sampling, inspection, and certification through one of
the offices and laboratories listed in paragraphs (d)(3) and (d)(4) of
this section, respectively.
(4) Imported peanut lots sampled and inspected at the port-of-
entry, or at other locations, shall meet the quality requirements of
this section in effect on the date of inspection.
(5) A foreign-produced peanut lot entered for consumption or for
warehouse may be transferred or sold to another person: Provided, That
the original importer shall be the importer of record unless the new
owner applies for bond and files Customs Service documents pursuant to
19 CFR Secs. 141.113 and 141.20; and Provided further, That such
peanuts must be certified and reported to the Secretary pursuant to
paragraphs (f)(2) and (f)(3) of this section.
(6) The cost of transportation, sampling, inspection,
certification, chemical analysis, and identification, as well as
remilling and blanching, and further inspection of remilled and
blanched lots, and disposition of failing peanuts, shall be borne by
the importer. Whenever peanuts are presented for inspection, the
importer shall furnish any labor and pay any costs incurred in moving,
opening containers, and shipment of samples as may be necessary for
proper sampling and inspection. The inspection service shall bill the
importer for fees covering quality and size inspections; time for
sampling; packaging and delivering aflatoxin samples to laboratories;
certifications of lot identification and lot transfer to other
locations, and other inspection certifications as may be necessary to
verify edible quality or inedible disposition, as specified herein. The
USDA and PAC-approved laboratories shall bill the importer
[[Page 51835]]
separately for fees for aflatoxin assay. The importer also shall pay
all required Customs Service costs as required by that agency.
(7) Each person subject to this section shall maintain true and
complete records of activities and transactions specified in these
regulations. Such records and documentation accumulated during entry
shall be retained for not less than two years after the calendar year
of acquisition, except that Customs Service documents shall be retained
as required by that agency. The Secretary, through duly authorized
representatives, shall have access to any such person's premises during
regular business hours and shall be permitted, at any such time, to
inspect such records and any peanuts held by such person.
(8) The provisions of this section do not supersede any
restrictions or prohibitions on peanuts under the Federal Plant
Quarantine Act of 1912, the Federal Food, Drug and Cosmetic Act, any
other applicable laws, or regulations of other Federal agencies,
including import regulations and procedures of the Customs Service.
Dated: October 1, 1996.
Sharon Bomer Lauritsen,
Acting Director, Fruit and Vegetable Division.
[FR Doc. 96-25519 Filed 10-3-96; 8:45 am]
BILLING CODE 3410-02-P
