[Federal Register Volume 59, Number 148 (Wednesday, August 3, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-18882]


[[Page Unknown]]

[Federal Register: August 3, 1994]


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DEPARTMENT OF AGRICULTURE
7 CFR Part 998

[Docket No. FV94-998-1FIR]

 

Expenses, Assessment Rate, and Indemnification Reserve for 
Marketing Agreement No. 146 Regulating the Quality of Domestically 
Produced Peanuts

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (Department) is adopting, 
without change, the provisions of an interim final rule that authorized 
expenditures for administration and indemnification, established an 
assessment rate, and authorized continuation of an indemnification 
reserve under Marketing Agreement 146 (agreement) for the 1994-95 crop 
year. The rule also increased the administrative assessment rate for 
the 1993-94 crop year. Authorization of this budget enables the Peanut 
Administrative Committee (Committee) to incur operating expenses, 
collect funds to pay those expenses, and settle indemnification claims 
during the 1994-95 crop year. Authorization of the increase in the 
administrative assessment rate for the 1993-94 crop year enables the 
Committee to collect sufficient funds to pay expenses projected for the 
remainder of that year. Funds to administer this program are derived 
from assessments on handlers who have signed the agreement.

EFFECTIVE DATES: Section 998.407 is effective July 1, 1994, through 
June 30, 1995. Section 998.406 was effective July 1, 1993, through June 
30, 1994.

FOR FURTHER INFORMATION CONTACT: Martha Sue Clark, Marketing Order 
Administration Branch, Fruit and Vegetable Division, AMS, USDA, P.O. 
Box 96456, room 2523-S, Washington, DC 20090-6456, telephone 202-720-
9918, or William G. Pimental, Southeast Marketing Field Office, Fruit 
and Vegetable Division, AMS, USDA, P.O. Box 2276, Winter Haven, FL 
33883-2276, telephone 813-299-4770.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement 146 (7 CFR part 998) regulating the quality of domestically 
produced peanuts. This agreement is effective under the Agricultural 
Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), 
hereinafter referred to as the Act.
    The Department of Agriculture (Department) is issuing this rule in 
conformance with Executive Order 12866.
    This rule has been reviewed under Executive Order 12778, Civil 
Justice Reform. Under the agreement now in effect, peanut handlers 
signatory to the agreement are subject to assessments. Funds to 
administer the peanut agreement program are derived from such 
assessments, and a deductible type insurance for 1994-95 
indemnification expenses. This rule authorizes expenditures and 
establishes an assessment rate for the Committee for the crop year 
which began July 1, 1994, and ends June 30, 1995, and increases the 
administrative assessment rate for the crop year which began July 1, 
1993, and ended June 30, 1994. 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 requirements set forth in the Regulatory Flexibility 
Act (RFA), the Administrator of the Agricultural Marketing Service 
(AMS) has considered the economic impact of this rule on small 
entities.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened.
    There are approximately 47,000 producers of peanuts in the 16 
States covered under the agreement, and approximately 76 handlers 
regulated under the agreement. Small agricultural producers have been 
defined by the Small Business Administration (13 CFR 121.601) as those 
having annual receipts of less than $500,000, and small agricultural 
service firms are defined as those whose annual receipts are less than 
$5,000,000. A majority of the producers may be classified as small 
entities, and some of the handlers covered under the agreement are 
small entities.
    Under the agreement, the assessment rate for a particular crop year 
applies to all assessable tonnage handled from the beginning of such 
year (i.e., July 1). An annual budget of expenses is prepared by the 
Committee and submitted to the Department for approval. The members of 
the Committee are handlers and producers of peanuts. They are familiar 
with the Committee's needs and with the costs for goods, services, and 
personnel for program operations and, thus, are in a position to 
formulate appropriate budgets. The budgets are formulated and discussed 
at industry-wide meetings. Thus, all directly affected persons have an 
opportunity to provide input in recommending the budget, assessment 
rate, and indemnification reserve. The handlers of peanuts who are 
directly affected have signed the marketing agreement authorizing the 
expenses that may be incurred and the imposition of assessments.
    The assessment rate recommended by the Committee for the 1994-95 
crop year was derived by dividing anticipated expenses by expected 
receipts and acquisitions of farmers' stock peanuts. It applies to all 
assessable peanuts received or acquired by handlers from July 1, 1994. 
Because that rate is applied to actual receipts and acquisitions, it 
must be established at a rate which will produce sufficient income to 
pay the Committee's expenses.
    The Committee met on March 16, 1994, and unanimously recommended 
1994-95 crop year administrative expenses of $1,056,000 and an 
administrative assessment rate of $0.60 per net ton of assessable 
farmers' stock peanuts received or acquired by handlers. In comparison, 
1993-94 crop year budgeted administrative expenditures were $1,020,000, 
and the administrative assessment rate was initially recommended and 
fixed at $0.60 per ton.
    Administrative budget items for 1994-95 which have increased 
compared to those budgeted for 1993-94 (in parentheses) are: Executive 
salaries, $140,146 ($134,304), clerical salaries, $132,500 ($127,479), 
field representatives salaries, $290,420 ($278,778), field 
representatives travel, $110,000 ($107,000), insurance and bonds, 
$8,500 ($7,500), and furniture and equipment, $9,500 ($4,000). Items 
which have decreased compared to those budgeted for 1993-94 (in 
parentheses) are: Payroll taxes, $43,000 ($45,000), office rent and 
parking, $50,000 ($52,500), postage and mailing, $12,000 ($13,000), and 
audit fees, $9,200 ($9,500). All other items are budgeted at last 
year's amounts. The administrative budget includes $14,234 for 
contingencies ($4,439 last year).
    The Committee also unanimously recommended 1994 crop 
indemnification claims payments of up to $9,000,000 and an 
indemnification assessment of $2.00 per net ton of farmers' stock 
peanuts received or acquired by handlers to continue its 
indemnification program. The 1993-94 crop year indemnification 
assessment was $1.00 per net ton. Because of the high number of claims 
being processed during the 1993-94 crop year, the Committee recommended 
a higher assessment rate so that sufficient reserve funds will be 
available. The $9,000,000 of indemnification claims coverage to be 
provided on 1994 crop peanuts includes $5,000,000 in excess loss 
insurance to be purchased by the Committee--the same as last year.
    The cost of the indemnification insurance premium and the costs to 
carry out indemnification procedures (sampling and testing of 2-AB and 
3-AB Subsamples, and crushing supervision, of indemnified peanuts, 
pursuant to Sec. 998.200(c)), are additional indemnification costs 
which must be authorized and paid from available indemnification funds. 
Such costs are not expected to exceed $2,000,000.
    The total assessment rate is $2.60 per ton of assessable peanuts 
($0.60 for administrative and $2.00 for indemnification). Assessments 
are due on the 15th of the month following the month in which the 
farmers' stock peanuts are received or acquired. Application of the 
recommended rates to the estimated assessable tonnage of 1,760,000 will 
yield $1,056,000 for program administration and $3,520,000 for 
indemnification. The indemnification amount, when added to expected 
cash carry over from 1993-94 indemnification operations of $12,609,100, 
will provide $16,129,100, which should be adequate for the 1994 fund, 
and to maintain an adequate reserve.
    The 1993-94 budget was published in the Federal Register as an 
interim final rule on June 11, 1993 (58 FR 32600), and finalized on 
August 13, 1993 (58 FR 43066). The administrative expenses and 
assessment rate for the 1993-94 crop year were based on an estimated 
assessable tonnage of 1,700,000. Due to an unexpected short crop, the 
assessable tonnage is estimated to be only 1,476,377. In order to have 
sufficient revenue to cover budgeted expenses of $1,020,000, the 
Committee unanimously recommended that the 1993-94 crop year 
administrative assessment be increased from $0.60 to $0.70 per net ton 
of assessable farmers' stock peanuts.
    An interim final rule was published in the Federal Register on May 
12, 1994 (59 FR 24633). That interim final rule added Sec. 998.407 
which authorized expenditures for administration and indemnification, 
established an assessment rate, and authorized continuation of an 
indemnification reserve for the Committee. That rule also amended 
Sec. 998.406, paragraph (c) to increase the administrative assessment 
rate for the 1993-94 crop year. That rule provided that interested 
persons could file comments through June 13, 1994. No comments were 
received.
    While this action will impose some additional costs on handlers, 
the costs are in the form of uniform assessments on all handlers 
signatory to the agreement. Some of the additional costs may be passed 
on to producers. However, these costs will be significantly offset by 
the benefits derived from the operation of the marketing agreement. 
Therefore, the Administrator of the AMS has determined that this action 
will not have a significant economic impact on a substantial number of 
small entities.
    After consideration of all relevant matter presented, including the 
information and recommendations submitted by the Committee and other 
available information, it is hereby found that this rule, as 
hereinafter set forth, will tend to effectuate the declared policy of 
the Act.
    It is further found that good cause exists for not postponing the 
effective date of this action until 30 days after publication in the 
Federal Register (5 U.S.C. 553) because the Committee needs to have 
sufficient funds to pay its expenses which are incurred on a continuous 
basis. The 1993-94 crop year began on July 1, 1993, and the 1994-95 
crop year for the program began on July 1, 1994, and the marketing 
agreement requires that the rate of assessment for the crop year apply 
to all assessable peanuts handled during the crop year. In addition, 
handlers are aware of this action which was recommended by the 
Committee at a public meeting and published in the Federal Register as 
an interim final rule.

List of Subjects in 7 CFR Part 998

    Marketing agreements, Peanuts, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR Part 998 is 
amended as follows:

PART 998--MARKETING AGREEMENT REGULATING THE QUALITY OF 
DOMESTICALLY PRODUCED PEANUTS

    1. The authority citation for 7 CFR Part 998 continues to read as 
follows:

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

    2. Accordingly, the interim final rule adding Sec. 998.407 and 
amending Sec. 998.406, which was published at 59 FR 24633 on May 12, 
1994, is adopted as a final rule without change.

    Dated: July 28, 1994.
Robert C. Keeney,
Deputy Director, Fruit and Vegetable Division.
[FR Doc. 94-18882 Filed 8-2-94; 8:45 am]
BILLING CODE 3410-02-P