[Federal Register Volume 59, Number 216 (Wednesday, November 9, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-27768]


[[Page Unknown]]

[Federal Register: November 9, 1994]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 997

[Docket No. FV94-997-2FIR]

 

Clarifying and Updating Provisions Regulating the Quality of 
Domestically Produced Peanuts Handled by Persons Not Subject to the 
Peanut Marketing Agreement

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (Department) is adopting as a 
final rule, without change, the provisions of an interim rule that 
clarified that peanut handlers not signatory to Peanut Marketing 
Agreement No. 146 (Agreement) may store and shell certain Segregation 2 
seed peanut lots with Segregation 1 seed peanut lots when such lots are 
produced under the auspices of a State agency which regulates or 
controls their production. The interim rule also updated information on 
the laboratories qualified to perform aflatoxin testing of shelled 
peanuts, and certain cleaned inshell peanuts. Allowing peanut handlers 
to commingle certain seed peanut lots reduces the space and costs 
needed to store seed peanuts. Updating laboratory information should 
assist handlers in moving peanuts to market. These changes are intended 
to bring the non-signatory handling requirements into conformity with 
those specified in the Agreement.

EFFECTIVE DATE: December 9, 1994.

FOR FURTHER INFORMATION CONTACT: Richard Lower, Marketing Order 
Administration Branch, Fruit and Vegetable Division, AMS, USDA, P.O. 
Box 96456, room 2523-S, Washington, DC 20090-6456, telephone (202) 720-
2020, facsimile (202) 720-5698.

SUPPLEMENTARY INFORMATION: This rule is issued pursuant to requirements 
of the Agricultural Marketing Agreement Act of 1937, as amended (7 
U.S.C. 601-674), hereinafter referred to as the ``Act.''
    The Department is issuing this rule in conformance with Executive 
Order 12866.
    This rule has been reviewed under Executive Order 12778, Civil 
Justice Reform. This rule will not preempt any State or local laws, 
regulations, or policies, unless they present an irreconcilable 
conflict with this rule. This action is not intended to have 
retroactive effect. 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 45 handlers of peanuts who have not signed 
the Agreement who are subject to the regulations contained herein. 
Small agricultural service firms are defined by the Small Business 
Administration (13 CFR 121.601) as those whose annual receipts are less 
than $5,000,000. It is estimated that most of the handlers are small 
entities. Most producers doing business with these handlers are also 
small entities. Small agricultural producers have been defined as those 
having annual receipts of less than $500,000.
    In 1993, the reported U.S. production, mostly covered under the 
Agreement, was approximately 3.33 billion pounds of peanuts, a 22 
percent decrease from 1992 and the lowest level since 1983. The 
preliminary 1993 peanut crop value is $991.65 million, 77 percent of 
the 1992 crop value.
    After aflatoxin was found in peanuts in the mid-1960's, the 
domestic peanut industry has sought to minimize aflatoxin contamination 
in peanuts and peanut products. Under authority of the Act, Peanut 
Marketing Agreement No. 146 and the Peanut Administrative Committee 
(Committee) were established by the Secretary in 1965. The Agreement 
was signed by a majority of domestic peanut handlers.
    Public Law 101-220, enacted December 12, 1989, amended section 
608(b) of the Act to require that all peanuts handled by persons who 
have not entered into the Agreement (non-signers) be subject to quality 
and inspection requirements to the same extent and manner as are 
required under the Agreement. It is estimated that 5 percent of the 
domestic peanut crop is marketed by non-signatory handlers and the 
remainder of the crop is handled by signatory handlers.
    Under the non-signer provisions, no peanuts may be sold or 
otherwise disposed of for human consumption if the peanuts fail to meet 
the quality requirements of the Agreement. Regulations to implement 
Public Law 101-220 were issued and made effective on December 4, 1990 
(55 FR 49980) and amended several times thereafter, and are published 
in 7 CFR part 997. All such amendments were made to ensure that the 
non-signer handling requirements remain consistent with modifications 
to the handling requirements applied to signatory handlers under the 
Agreement. Violation of those regulations may result in a penalty in 
the form of an assessment by the Secretary equal to 140 percent of the 
support price for quota peanuts. The support price for quota peanuts is 
determined under section 108B of the Agricultural Act of 1949 (7 U.S.C. 
1445c-3) for the crop year during which the violation occurs.
    The intent of P.L. 101-220 and the objective of the Agreement are 
to insure that only wholesome peanuts of good quality enter edible 
market channels. Under the non-signer and Agreement regulatory 
provisions, farmers' stock peanuts with visible Aspergillus flavus mold 
(the principal source of aflatoxin) are required to be diverted to non-
edible uses. Each lot of shelled peanuts and certain lots of inshell 
peanuts, destined for edible channels, must be officially sampled and 
chemically tested for aflatoxin by the Department or in other 
laboratories listed in the regulations. Inspection and chemical 
analysis programs are administered by the Department.
    Under the non-signer provisions, the second sentence of paragraph 
(e) Seed peanuts. prohibits the commingling of Segregation 2 seed lots 
with Segregation 1 peanut lots intended for human consumption. The 
difference between Segregation 1 and Segregation 2 lots is that 
Segregation 1 lots may contain no more than 2 percent damaged kernels 
and no more than 1 percent concealed damaged kernels, while Segregation 
2 lots may contain more than 2 percent damaged kernels and 1 percent 
concealed damaged kernels. Both Segregation 1 lots and Segregation 2 
lots must be free of visible Aspergillus flavus.
    This rule continues in effect the clarification of the handling 
provisions in paragraph (e) of Sec. 997.20 Incoming regulation allowing 
Segregation 2 seed peanut lots containing up to 3 percent total damaged 
kernels to be stored, shelled and commingled with Segregation 1 seed 
peanut lots if both lots were produced under the auspices of a State 
peanut agency which regulates or controls the production of the lots 
being commingled.
    The Committee meets in February or March each year and recommends 
to the Secretary such rules and regulations as may be necessary to keep 
the Agreement consistent with current industry practice. The Committee 
met on March 16, 1994, and unanimously recommended clarification of 
seed peanut handling regulations under the Agreement. Members of the 
Committee noted the impracticality of having separate storage bins for 
each of the various types and varieties of seed peanuts with up to 3 
percent damage. It was noted that, if Segregation 2 seed lots with up 
to 3 percent damage must be stored separate from Segregation 1 seed 
lots, ``foundation,'' ``registered,'' and ``certified'' seed lots would 
have to be segregated into separate categories. This could increase the 
number of separate bins and space needed to store seed peanut lots. The 
current regulations for both signers and non-signers do not 
specifically address commingling Segregation 1 seed lots with 
Segregation 2 seed lots.
    The Committee concluded that it is impracticable to require such 
Segregation 2 seed peanuts be stored and shelled separate from 
Segregation 1 seed peanuts. The Department has completed rulemaking 
implementing such a clarification in handling requirements applied on 
signatory handlers.
    Continuation of the amendment to paragraph (e) of Sec. 997.20(e) 
for non-signer seed peanuts will continue the continuity between the 
non-signatory handling requirements and those specified in the 
Agreement, and facilitate the movement of peanuts to market.
    This rule will not affect the outgoing quality regulation of the 
non-signer provisions. The quality and handling requirements, as 
specified in Sec. 997.30 Outgoing regulations applicable to non-
signatory 1993-94 crop peanuts, continue to be effective for 1994-95 
crop peanuts.
    The interim rule also updated addresses and facsimile numbers, 
where applicable, of approved aflatoxin testing laboratories that 
perform chemical analyses required by the non-signatory handling 
regulations. This information is provided in paragraph (c)(5)(i) of 
Sec. 997.30 Outgoing regulations. Non-signatory handlers may send 
peanut samples to any laboratory on the list, per instructions 
specified in paragraph (c) of the outgoing regulation. The interim rule 
also updated information in paragraph (c)(5)(ii) identifying the 
contact point of the USDA Science Division headquarter's office. This 
final rule continues the aforementioned changes.
    The interim final rule was published in the Federal Register on 
August 30, 1994 (59 FR 44610). That interim final rule provided that 
interested persons could file comments through September 29, 1994. No 
comments were received.
    Based on available information, the Administrator of the AMS has 
determined that the issuance of this rule will not have a significant 
economic impact on a substantial number of small entities.
    After consideration of all available information, it is found that 
this rule, as hereinafter set forth, will tend to effectuate the 
declared policy of the Act.

List of Subjects in 7 CFR Part 997

    Food grades and standards, Peanuts, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 997 is 
amended as follows:

PART 997--PROVISIONS REGULATING THE QUALITY OF DOMESTICALLY 
PRODUCED PEANUTS HANDLED BY PERSONS NOT SUBJECT TO THE PEANUT 
MARKETING AGREEMENT

    Accordingly, the interim final rule amending 7 CFR part 997 which 
was published at 59 FR 44610, on August 30, 1994, is adopted as a final 
rule without change.

    Dated: November 3, 1994.
Martha B. Ransom,
Acting Deputy Director, Fruit and Vegetable Division.
[FR Doc. 94-27768 Filed 11-8-94; 8:45 am]
BILLING CODE 3410-02-P