[Federal Register Volume 63, Number 14 (Thursday, January 22, 1998)]
[Rules and Regulations]
[Pages 3254-3255]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-1432]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 997 and 998

[Docket No. FV97-998-3 FIR]


Domestically Produced Peanuts Handled by Persons Not Subject to 
Peanut Marketing Agreement No. 146; 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 as a 
final rule, without change, an interim final rule which decreased the 
assessment rate for the Peanut Administrative Committee (Committee) 
under Marketing Agreement No. 146 (agreement) for the 1997-98 and 
subsequent crop years. Authorization to assess peanut handlers who have 
signed the agreement enables the Committee to incur expenses that are 
reasonable and necessary to administer the program. The Department is 
also required to impose an administrative assessment on farmers' stock 
peanuts received or acquired by handlers who are not signatory (non-
signatory handlers) to the agreement. Therefore, the assessment rate 
established under the agreement also must be applied to all non-
signatory handlers. The 1997-98 crop year began July 1 and ends June 
30. The assessment rate will remain in effect indefinitely unless 
modified, suspended, or terminated.

EFFECTIVE DATE: February 23, 1998.

FOR FURTHER INFORMATION CONTACT: Tammie Bryant or Jim Wendland, 
Marketing Order Administration Branch, Fruit and Vegetable Programs, 
AMS, USDA, P.O. Box 96456, room 2525-S, Washington, DC 20090-6456, 
telephone (202) 720-2491, FAX (202) 205-6632. Small businesses may 
request information on compliance with this regulation by contacting: 
Jay Guerber, Marketing Order Administration Branch, Fruit and Vegetable 
Programs, AMS, USDA, P.O. Box 96456, room 2525-S, Washington, DC 20090-
6456, telephone (202) 720-2491, FAX (202) 205-6632.

SUPPLEMENTARY INFORMATION: This rule is issued pursuant to the 
requirements of the Agricultural Marketing Agreement Act of 1937, as 
amended (7 U.S.C. 601-674), hereafter referred to as the ``Act''; and 
under Marketing Agreement No. 146 (7 CFR part 998) regulating the 
quality of domestically produced peanuts.
    The Department is issuing this rule in conformance with Executive 
Order 12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Farmers' stock peanuts received or acquired by non-
signatory handlers and farmers' stock peanuts received or acquired by 
handlers signatory to the agreement, other than from those described in 
Secs. 998.31(c) and (d), are subject to assessments. It is intended 
that the assessment rates issued herein will be applicable to all 
assessable peanuts beginning July 1, 1997, and continuing until 
amended, suspended, or terminated. 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.
    This rule adopts as a final rule, without change, the provisions of 
an interim final rule, which decreased the assessment rate established 
for the Committee for the 1997-98 and subsequent fiscal years from 
$0.70 to $0.35 per ton.
    The agreement provides authority for the Committee, with the 
approval of the Department, to formulate an annual budget of expenses 
and collect assessments from handlers to administer the program. Funds 
to administer the agreement program are derived from signatory handler 
assessments. The members of the Committee are handlers and producers of 
peanuts. They are familiar with the Committee's needs and with the 
costs of goods and services in their local areas and, thus, are in a 
position to formulate an appropriate budget and assessment rate. The 
assessment rate is formulated and discussed in public meetings. Thus, 
all directly affected persons have an opportunity to participate and 
provide input. 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.
    For the 1997-98 and subsequent crop years, the Committee 
recommended and the Department approved, an assessment rate that would 
continue in effect from crop year to crop year indefinitely unless 
modified, suspended, or terminated by the Secretary, upon 
recommendation and information submitted by the Committee or other 
information available to the Secretary.
    The Committee met on April 30, 1997, and unanimously recommended 
1997-98 administrative expenditures of $525,000 and an administrative 
assessment rate of $0.35 per net ton of assessable farmers' stock 
peanuts received or acquired by handlers. The Committee also voted not 
to recommend an assessment rate for indemnification for handler losses 
due to aflatoxin contamination. Adequate funds are included in the 
Committee's indemnification reserve for such expenses during the 1997-
98 crop year. In comparison, last year's budgeted administrative 
expenditures were $1,025,500. Major expenditures recommended by the 
Committee for the 1997-98 crop year compared with those budgeted for 
1996-97 (in parentheses) include: $55,000 for executive salaries 
($112,450), $50,000 for clerical salaries ($131,500), $125,000 for 
field representatives (3 compliance officers rather than 7 fieldmen) 
salaries ($296,700), $18,000 for payroll taxes ($42,000), $65,000 for 
employee benefits ($148,000), $40,000 for Committee members travel 
($40,000), $5,000 for staff travel ($5,000), $60,000 for field 
representatives travel ($110,000), $9,800 for insurance and bonds 
($9,800), $19,000 for office rent and parking ($46,200), $10,000 for 
office supplies and stationery ($14,000), $10,400 for postage and 
mailing ($13,200), $11,000 for telephone and telegraph ($15,000), 
$6,000 for repairs and maintenance agreements ($6,000), $10,400 for the 
audit fee ($10,400), and $15,800 for the contingency reserve ($10,250).
    The assessment rate recommended by the Committee was derived by 
dividing anticipated expenses by expected receipts and acquisitions of 
farmers' stock peanuts. Farmers' stock peanuts received or acquired by 
handlers signatory to the agreement, other than from those described in 
Sec. 998.31(c) and

[[Page 3255]]

(d), are subject to the assessments. Farmers stock peanuts received or 
acquired by non-signatory handlers by law are subject to the same 
assessment rate. Assessments are due on the 15th of the month following 
the month in which the farmers' stock peanuts are received or acquired. 
Receipts for the year under the agreement are estimated at 1,500,000 
tons, which should provide $525,000 in assessment income. Approximately 
95 percent of the domestically produced peanut crop is marketed by 
handlers who are signatory to the agreement. The remaining 5 percent of 
the U.S. peanut crop is marketed by non-signer handlers.
    The Act provides for mandatory assessment of farmers' stock peanuts 
acquired by non-signatory peanut handlers. Section 608b of the Act 
specifies that: (1) Any assessment (except indemnification assessments) 
imposed under the agreement on signatory handlers shall also apply to 
non-signatory handlers, and (2) such assessment shall be paid to the 
Secretary.
    The assessment rates established in this rule will continue in 
effect indefinitely unless modified, suspended, or terminated by the 
Secretary upon recommendation and information submitted by the 
Committee or other available information.
    Although these assessment rates are effective for an indefinite 
period, the Committee will continue to meet prior to or during each 
crop year to recommend a budget of expenses and consider 
recommendations for modification of the assessment rate. The dates and 
times of Committee meetings are available from the Committee or the 
Department. Committee meetings are open to the public and interested 
persons may express their views at these meetings. The Department will 
evaluate Committee recommendations and other available information to 
determine whether modification of the assessment rate is needed. 
Further rulemaking will be undertaken as necessary. The Committee's 
1997-98 budget was reviewed and approved by the Department on September 
17, 1997, and those for subsequent crop years will be reviewed and, as 
appropriate, approved by the Department.
    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Agricultural Marketing Service (AMS) has considered the 
economic impact of this rule on small entities. Accordingly, AMS has 
prepared this final regulatory flexibility analysis.
    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 
80 peanut handlers who are subject to regulation under the agreement or 
the non-signer program and approximately 25,000 peanut producers in the 
16-State production area. Small agricultural service firms, which 
include handlers, have been defined by the Small Business 
Administration (13 CFR 121.601) as those having annual receipts of less 
than $5,000,000, and small agricultural producers are defined as those 
whose annual receipts are less than $500,000. Approximately 25 percent 
of the signatory handlers, virtually all of the non-signer handlers, 
and most of the producers may be classified as small entities.
    This rule continues in effect the assessment rate established for 
the Committee and collected from handlers for the 1997-98 and 
subsequent crop years of $0.35 per net ton. The assessment rate is 
$0.35 less than the rate previously in effect.
    The Committee discussed alternatives to this rule, including 
alternative expenditure levels. The Committee also discussed the 
alternative of not decreasing the assessment rate. However, it decided 
against this course of action. The peanut industry has been in a state 
of economic decline since 1991, with the Committee attempting to cut 
costs wherever possible. The Committee's budget for 1997-98 is 
$525,000; this is $500,500 less than the amount budgeted for 1996-97. 
Based on an estimated 1,500,000 net tons of assessable peanuts, income 
derived from handler assessments during 1997-98 will be adequate to 
cover budgeted expenses.
    This rule continues in effect the assessment obligation imposed on 
handlers. While this action will impose some costs on handlers, the 
costs are minimal and in the form of uniform assessments on all 
handlers. Some of the costs may be passed on to producers. However, 
these costs will be offset by the benefits derived from the operation 
of the agreement. This administrative assessment is required to also be 
applied uniformly to all non-signatory handlers and should be of 
benefit to all. In addition, the Committee's meeting was widely 
publicized throughout the peanut industry and all interested persons 
were invited to attend the meeting and participate in Committee 
deliberations on all issues. Like all Committee meetings, the April 30, 
1997, meeting was a public meeting and all entities, both large and 
small, were able to express views on this issue.
    This action will not impose any additional reporting or 
recordkeeping requirements on either small or large peanut handlers. As 
with all Federal marketing agreement and order programs, reports and 
forms are periodically reviewed to reduce information requirements and 
duplication by industry and public sector agencies.
    The Department has not identified any relevant Federal rules that 
duplicate, overlap, or conflict with this rule.
    An interim final rule concerning this action was published in the 
Federal Register on September 17, 1997 (62 FR 48749). A copy of the 
interim final rule was also made available on the Internet by the 
Office of the Federal Register. The comment period ended October 17, 
1997, and no comments were received.
    After consideration of all relevant matter presented, including the 
information and recommendation 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.

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.

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

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

    Accordingly, the interim final rule amending 7 CFR parts 997 and 
998 which was published at 62 FR 48749 on September 17, 1997, is 
adopted as a final rule without change.

    Dated: January 15, 1998.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-1432 Filed 1-21-98; 8:45 am]
BILLING CODE 3410-02-P