[Federal Register Volume 61, Number 231 (Friday, November 29, 1996)]
[Rules and Regulations]
[Pages 60509-60510]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-30087]



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 Rules and Regulations
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  Federal Register / Vol. 61, No. 231 / Friday, November 29, 1996 / 
Rules and Regulations  

[[Page 60509]]



DEPARTMENT OF AGRICULTURE

Farm Service Agency

7 CFR Part 729

RIN 0560-AE45


1996-Crop Peanuts Amended National Poundage Quota

AGENCY: Farm Service Agency, USDA.

ACTION: Final rule.

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SUMMARY: This document affirms the announcement by the Secretary of 
Agriculture on April 17, 1996, of the basic national peanut quota for 
the 1996 crop of 1,100,000 short tons. The April 17 announcement was 
issued after new legislation and amended an earlier announcement of the 
quota. The new legislation eliminated the floor on the national quota 
and separated seed use from the establishment of the basic quota. This 
document amends the regulations which were published on July 16, 1996.

EFFECTIVE DATE: April 17, 1996.

FOR FURTHER INFORMATION CONTACT: Kenneth Robison, Farm Service Agency 
(FSA), United States Department of Agriculture (USDA), STOP 0514, P.O. 
Box 2415, Washington, DC, 20013-2415, telephone 202-720-9255.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This final rule has been determined to be significant and was 
reviewed by OMB under Executive Order 12866.

Federal Assistance Program

    The title and number of the Federal Assistance Program, as found in 
the Catalog of Federal Domestic Assistance, to which this rule applies, 
are Commodity Loans and Purchases--10.051.

Executive Order 12778

    This final rule has been reviewed in accordance with Executive 
Order 12778. The provisions of this rule do not preempt State laws, are 
not retroactive, and do not involve administrative appeals.

Regulatory Flexibility Act

    It has been determined that the Regulatory Flexibility Act is not 
applicable to this final rule because FSA is not required by 5 U.S.C. 
553 or any other provision of law to publish a notice of proposed 
rulemaking with respect to the subject matter of this rule.

Paperwork Reduction Act

    Information collection requirements pertaining to poundage quotas 
and marketing of peanuts have previously been approved by the Office of 
Management and Budget (OMB) and assigned OMB number 0560-0006 under the 
provisions of the Paperwork Reduction Act of 1995.
    The amendments to 7 CFR part 729 set forth in this final rule do 
not change the information collection requirements previously approved.
    On December 6, 1995, the Secretary announced a preliminary national 
quota for the 1996 crop of peanuts under existing provisions of the 
Agricultural Adjustment Act of 1938 (1938 Act). The Secretary also 
announced that a referendum would be held on December 11-14 to 
determine, as provided for in the 1938 Act, whether a quota would be in 
effect for the 1996 crop. Ninety-seven percent of the voting producers 
voted for the quota, thereby approving a quota. The Secretary, 
thereafter, announced the quota level under existing provisions of the 
1938 Act. That announcement was amended on April 17, 1996, based on 
provisions in the Federal Agriculture Improvement and Reform Act of 
1996 (1996 Act). Effective with the 1996 crop, the 1996 amendments 
eliminated the quota floor and separated seed use from other quota 
uses. Section 358-1(a) (1) of the 1938 Act, as now amended, requires 
that the Secretary set a basic national quota for peanuts for the 1996 
through 2002 marketing years (MY's) at a level that is equal to the 
quantity of peanuts (in tons) that the Secretary estimates will be 
devoted in each MY to domestic edible use (excluding seed) and related 
uses. As to seed, section 358-1(b)(2)(B) provides that a temporary 
allocation of quota pounds for the marketing year only in which the 
crop is planted shall be made to producers for each of the 1996 through 
2002 marketing years and that the temporary seed quota allocation shall 
be equal to the pounds of seed peanuts planted on the farm as may be 
adjusted and determined under regulations prescribed by the Secretary. 
Regulations implementing the quota amendments to the 1938 Act were 
published in the Federal Register on July 16, 1996 (61 FR 36997). 
Because of the onset of the production year it was necessary to make 
the amended quota effective immediately. Further, under section 162 of 
the 1996 Act, provision was made by Congress for immediate 
implementation of 1996 commodity program amendments without advance 
notice and comment. The December announcement proposed a quota of 
1,215,000 tons which included an estimate of about 100,000 for expected 
seed use. In the April 17 notice, the basic 358-1 (a) quota amount 
(which excludes the 358-1 (b) ``seed'' quota) was set by the Secretary 
at 1,100,000 tons, based on the following data:
    The national poundage quota for the MY for the 1996 crop was 
established at 1,100,000 tons, based on the following data:

    Estimated Domestic Edible, and Related Uses for 1996-Crop Peanuts   
------------------------------------------------------------------------
                                                           Farmer stock 
                          Item                              equivalent  
                                                           (short tons) 
------------------------------------------------------------------------
Domestic Edible Use:                                                    
    Domestic food use...................................         903,000
    On-farm and local sales.............................           9,000
Related Uses:                                                           
    Crushing residual...................................         123,000
    Shrinkage and other losses..........................          36,000
Segregation 2 and 3 loan:                                               
    Transfers to quota loan.............................           5,000
Underproduction.........................................          24,000
                                                         ---------------
      Total.............................................       1,100,000
------------------------------------------------------------------------

    Estimates of domestic production for domestic food use peanuts are 
developed in two steps. First, the farmer stock equivalent of peanuts 
for edible food use is projected by USDA's Interagency Commodity 
Estimates Committee (ICEC). Secondly, the ICEC food use estimate is 
reduced by the amount of peanut butter exports, edible

[[Page 60510]]

peanut imports, and peanut butter imports. This is because the ICEC 
food use estimate is an aggregate which includes peanut product exports 
and is derived from total supply that includes imports of peanuts and 
peanut butter. Peanut product exports are in most instances made from, 
or otherwise credited under Section 358(e)(1) of the 1938 Act as being 
made from, additional peanuts.
    Farm use and local sales are estimated at 1 percent of ICEC's 
production estimate. This percentage reflects the average difference 
between USDA production estimates and inspection data. However, only 
about one half of the amount is included in the quota determination 
because of farmer held peanuts used for seed.
    The crushing residual is the portion of farmer stock quota peanuts 
suitable only for the crushing market. The quota must be sufficient to 
provide for the shelling of both edible and crushing grades. Therefore, 
a crushing residual representing the farmer stock equivalent weight of 
crushing grade kernels shelled from quota peanuts is included under the 
``related uses'' category. The crushing residual is estimated under the 
assumption that crushing peanuts will be approximately 12 percent, on a 
farmer stock basis, of total domestic food and seed production.
    Shrinkage and other losses is an estimate of reduced kernel weight 
available for marketing as well as for kernel losses due to damage, 
fire, and spillage. These losses were estimated by multiplying a factor 
of 0.04 times domestic food use. The utilized factor is an FSA estimate 
equal to the minimum allowable shrinkage used in calculating a 
handler's obligation to export or crush additional peanuts as set forth 
in Section 358e(d)(2)(iv) of the 1938 Act. Excessive moisture and 
weight loss due to foreign material in delivered farmer stock peanuts 
were not considered since such factors are accounted for at buying 
points and do not impact quota marketing tonnage.
    Segregation 2 and 3 loan transfers to quota loan represent 
transfers of Segregation 2 and 3 peanuts from additional price support 
loan pools to quota loan pools. Such transfers occur when quota peanut 
producers have insufficient Segregation 1 peanuts to fill their quotas 
yet have Segregation 2 and 3 peanuts in additional loan pools which 
would have been eligible to be pledged as collateral for price support 
at the quota loan rate, if it were not for quality problems. In such 
cases, for price support purposes only, these peanuts may be pledged as 
collateral for price support loans at a discounted quota loan rate.
    In addition, an allowance has been made for underproduction because 
the 1996 quota amendments also ended the ability of producers to carry 
forward undermarketings as a supplement to their current quotas. The 
allowance takes into account normal undermarketings. Also, it takes 
into account that the change in law should reduce the amount of 
undermarketings by eliminating the compensatory quota increase formerly 
available to individual producers.

List of Subjects in 7 CFR Part 729

    Poundage quotas, Peanuts, Reporting and recordkeeping requirements.

    Accordingly, 7 CFR part 729 is amended as follows:

PART 729--PEANUTS

    1. The authority citation for 7 CFR part 729 continues to read as 
follows:

    Authority: 7 U.S.C. 1301, 1357 et seq., 1372, 1373, 1375; 7 
U.S.C. 1445c-3.


Sec. 729.216  [Amended]

    2. Section 729.216(a) is amended by adding after the words ``and 
related uses'' the words: ``as may be set out in paragraph (c) of this 
section.''
    3. Section 729.216 is amended further by adding paragraph (c) to 
read as follows:


Sec. 729.216  National poundage quota.

* * * * *
    (c) Quota determination for individual marketing years. The basic 
national poundage quota for peanuts for marketing year 1996, exclusive 
of the temporary quota allocation for seed use provided for in section 
358-1 (b) of the Act, is 1,100,000 short tons.

    Signed at Washington, DC, on November 15, 1996.
Bruce R. Weber,
Acting Administrator, Farm Service Agency.
[FR Doc. 96-30087 Filed 11-27-96; 8:45 am]
BILLING CODE 3410-05-P