[Federal Register Volume 63, Number 117 (Thursday, June 18, 1998)]
[Rules and Regulations]
[Pages 33237-33243]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-16269]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Parts 997 and 998
[Docket Nos. FV97-997-1 FIR and FV97-998-1 FIR]
Peanuts Marketed in the United States; Relaxation of Handling
Regulations
AGENCY: Agricultural Marketing Service (AMS), USDA.
ACTION: Final rule.
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SUMMARY: The Department of Agriculture (Department) is adopting, as a
final rule, with modifications, the provisions of an interim final rule
(IFR) that relaxed for 1997 and subsequent crop peanuts, several
provisions regulating the handling of domestically produced peanuts
marketed in the United States. This finalization continues the IFR's
improved efficiency and reduced program costs resulting in a similar
reduction in assessments charged Agreement signer and non-signer
handlers.
EFFECTIVE DATE: June 19, 1998.
FOR FURTHER INFORMATION CONTACT: George J. Kelhart or Jim Wendland,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA, P.O. Box 96456, room 2525-S, Washington, D.C. 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, D.C.,
20090-6456; telephone: (202) 720-2491, Fax: (202) 205-6632.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing
Agreement No. 146 (Agreement)(7 CFR part 998) and the Agricultural
Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674),
hereinafter referred to as the ``Act.'' The Agreement and the
regulations issued thereunder and the non-signatory peanut handler
regulations (7 CFR part 997) regulate the quality of domestically
produced peanuts.
The Department is issuing this final rule in conformance with
Executive Order 12866.
This 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.
Following explanation of each change to the Agreement's regulation,
the corresponding change to the non-signatory handlers' regulation is
discussed.
Incoming Regulations
Farmers Stock Storage and Handling Facilities
The Peanut Administrative Committee (Committee) recommended
amending Sec. 998.100 Incoming quality regulation for 1996 and
subsequent crop peanuts by removing paragraph (g) Farmers Stock Storage
and Handling Facilities which previously regulated the condition of
such facilities and authorized Committee inspection. The Committee
recommended the change to save approximately $450,000, by eliminating
the positions of the seven fieldmen whose specified duties through the
1996 crop year included spending an estimated 60-65 percent of their
time inspecting and approving such facilities. The vote was 17 ``For''
and 1 ``Against'', with the dissenting voter contending that the
fieldmen were providing valuable services, their positions should not
be eliminated, and that inspection and approval of such facilities by
the Committee staff were important. Handlers contended they were
already paying their own employees to do facilities inspections and the
cost of such duplication of effort needed to be eliminated and the
Department issued the change. Also, this cost-cutting has not adversely
[[Page 33238]]
affected quality since peanuts must still meet the Outgoing Quality
Regulation.
Elimination of the regulatory provision has allowed the Committee
to reduce its non-headquarters staff from seven to one compliance
officer in each of the three production areas and reduce the current
``fieldmen'' staffing costs to zero. The compliance officers are
conducting compliance audits of Agreement signers similar to AMS
approved non-signer program compliance plan procedures, where AMS
Compliance Staff auditors check non-signers' records. A revised 1997-98
compliance plan from the Committee includes these new procedures. AMS
believes this will continue to assure compliance under the Agreement.
The non-signer regulation contains no similar requirements for
inspection and approval of such facilities, so no change is needed to
it.
Outgoing Regulations
The Committee unanimously recommended that Sec. 998.200(a) be
amended to provide that minimum grade requirements for lots of
``splits'' (the separated halves of peanut kernels) be modified to
correspond with ``United States Standards For Grades Of: (1) Cleaned
Virginia Type Peanuts In The Shell; or (2) Shelled Runner Type Peanuts;
or (3) Shelled Spanish Type Peanuts; or (4) Shelled Virginia Type
Peanuts'' (7 CFR part 51: Sections 51.1235-1242; 51.2710-2721; 51.2730-
2741; and 51.2750-2763, respectively). The increase to 2.00 percent
from the prior 1.50 percent for unshelled peanuts and damaged kernels
was needed to provide consistency with the grade standards. Under the
former regulation, a handler could have had a lot of peanuts which met
U.S. Grade Standards for U.S. Splits, but failed to meet Agreement
requirements for edible quality. It was initially expected that this
change might reduce the number of lots needing remilling to meet
outgoing quality requirements by less than 10 percent if it was an
average year. But the 1997 crop has been stressed by drought conditions
and the industry in virtually all peanut producing States has expressed
having some problems with quality. Thus, this change is now expected to
reduce handlers' need to remill by more than 10 percent during the 1997
crop year, saving an estimated $30 on each ton not needing to be
remilled.
The only comment received concerning the IFR, filed by the
Committee, dealt with Sec. 998.200(a). The Committee urged that
portions of Table 2 INDEMNIFIABLE GRADES, which had been removed by the
IFR, be restored by adding them to the MAXIMUM LIMITATIONS table. The
IFR modification inadvertently eliminated all nine of the INDEMNIFIABLE
GRADE categories. The Committee said its intent was to cause all edible
grade categories of peanuts to be eligible for indemnification, not to
eliminate any grade categories. Three of the grade categories--Runner
with splits, Virginia with splits, and Spanish and Valencia with
splits--are not included in the U.S. grade standards for peanuts.
``Runner with splits'' exists under the American Peanut Shellers
Association's specifications but not the other categories. Therefore,
the three not included in the grade standards need to be restored, for
convenient use by the peanut industry, since such peanuts still have a
domestic market niche. Federal Government Commodity Procurement
Program, Farm Service Agency's Commodity Operations Division and many
commercial firms had used these grade categories in contract
specifications to purchase such peanuts. Also, to be consistent with
the other maximum tolerances in the ``Unshelled peanuts and damaged
kernels'' column and the ``Unshelled peanuts and damaged kernels and
minor defects'' column, the percentage tolerances for the three
restored categories need to be relaxed to 1.50 percent from 1.25 and to
2.50 percent from 2.00, respectively. Therefore, the three ``* * * with
splits'' type and grade categories and their relaxed tolerances need to
be incorporated into the MAXIMUM LIMITATION table in Sec. 998.200(a)
and Sec. 997.30(a). This simplifies grade requirements by having only
one set of quality requirements for human consumption use. The
Department agrees with the comment and includes the changes in this
finalization of the IFR. This relaxation in tolerances will reduce the
number of lots that need to be reconditioned to meet outgoing quality
requirements. This will save signer handlers reconditioning and storage
costs.
Similar changes are made to the corresponding Sec. 997.30(a) of the
non-signer regulation, with proportional savings on such handlers' much
smaller volume.
The Committee unanimously recommended that Sec. 998.200(h)(1) be
amended to allow lots of peanuts which fail edible quality
requirements, due to excessive fall through, to be custom blanched.
However, such lots will have to be certified as meeting minimum ``fall
through'' requirements after blanching. This finalization continues the
elimination of the former requirement that prior to movement of such
peanuts, handlers had to submit a form to the Committee and receive
authorization for movement and blanching of each such lot.
Section 997.40(d) of the non-signer regulation currently does not
require such handlers to submit a request to the Department and receive
authorization for movement and blanching of each such lot. Therefore,
no similar change to that provision is needed. However, this
finalization continues the IFR's amendment which added ``fall through''
to the category of items allowed in the first and third sentences.
The Committee also unanimously recommended a further change to
paragraph (h), specifically that subparagraphs (h)(1) and (h)(2) be
further amended to provide that reject peanuts may be placed in
suitable containers acceptable to the Committee. The current
requirement specifies ``bagged'', which refers to the older standard-
sized burlap bags, which hold approximately 110 pounds. It does not
include the many newer and more efficient containers which are easier
to handle such as tote bags, corrugated containers (including those
with capacities of over a ton), Super Sacks, and other various company
containers used by individual peanut product manufacturers. This
finalization will continue the IFR's change which allowed handlers to
use more efficient containers or those desired by their customers. For
purposes of this provision, most any container that handlers use will
be considered suitable.
Section 997.40(c) of the non-signer regulation previously provided
for ``in bulk or bags or other suitable containers.'' This finalization
continues the IFR's change to make it consistent with the Agreement's
amended regulation, by removing the words ``in bulk or.'' The same
applies to paragraphs (d) and (e) which were amended by removing the
word ``bagged'' and replacing it with the words ``placed in suitable
containers.''
The Committee also unanimously recommended that Sec. 998.200
Outgoing quality regulation and Sec. 998.300 Terms and conditions of
indemnification * * * be amended to make all lots of edible quality
peanuts indemnifiable, for freight reimbursement, when rejected on
appeal after being certified ``negative'' as to aflatoxin. This
finalization continues the IFR's changes to provisions specified in
Sec. 998.300, making product claim lots of edible quality peanuts also
indemnifiable. This involves lots where a handler sustained a loss as a
result of a buyer withholding
[[Page 33239]]
from human consumption any or all of the product made from a lot of
peanuts which had been determined to be unwholesome due to aflatoxin
after such lot had originally been certified ``negative'' as to
aflatoxin. This change provided consistency by treating all edible
quality peanuts equally, whether appeal claims or product claims.
Although these changes have further reduced costs and promoted
uniformity in the handling of indemnification of all edible quality
peanuts, there is no way to accurately quantify how much these
reductions have been, because the savings are different for each
handler. However, the total savings are expected to be a minor fraction
of the projected approximately $350,000 total 1997 crop indemnification
costs.
The non-signer enabling legislation does not provide authority for
indemnification. Therefore, no similar change was needed in the non-
signer regulation.
The Committee further unanimously recommended that
Sec. 998.200(h)(3) be amended to provide that peanuts which have been
certified as meeting minimum grade requirements specified in
Sec. 998.200(a)(1), but fail to meet requirements for aflatoxin, may be
roasted while being blanched prior to being certified as meeting the
aflatoxin requirements. After roasting, such peanuts must be sampled
and assayed for aflatoxin content but do not have to be re-sampled and
analyzed for grade again. This simplified process was recommended by
the Committee and issued in the IFR by the Department. Prior to the
IFR, such blanched peanuts, after certification, were often returned to
the blancher for additional heating. This finalization continues the
IFR's favorable effects of not having to remove the blanched peanuts
short of the complete roasting process for sampling and aflatoxin
analysis, and then running them back through the blancher again. This
added costs to the roasting process and usually caused additional,
unintentional damage due to the extra handling of the kernels. Also,
the roasting enhances the blanching efforts to eliminate aflatoxin,
thus improving the wholesomeness, quality and value of such shelled
peanuts. The savings involved in blanching and roasting in one step may
often outweigh the approximately $40 per hour costs of having an
inspector present during this process to maintain needed positive lot
identification. Any residual peanuts, excluding skins and hearts,
resulting from this roasting process, must be red tagged and disposed
of to inedible peanut outlets. The same factors apply to Sec. 997.40(d)
of the non-signer regulation.
This finalization continues the IFR's provision that unchanged
portions of the incoming and outgoing regulations that were in effect
for 1996 and subsequent crop peanuts will remain in effect for 1997 and
subsequent crop peanuts.
An interim final rule concerning this action was published in the
Federal Register on January 16, 1998 (63 FR 2846). A 60-day comment
period, which ended on March 17, 1998, was provided to allow interested
persons to respond to the interim final rule. One comment was received
during the comment period. That comment was discussed earlier in this
document, as a part of the discussion of changes in the regulations.
The Regulatory Flexibility Act and Effects on Small Businesses
Pursuant to 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. 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 the small businesses
will not be unduly or disproportionately burdened. Marketing agreements
and orders issued pursuant to the Act, and the rules issued thereunder,
are unique in that they are brought about through group action of
essentially small entities acting on their own behalf. Thus, both
statutes have small entity orientation and compatibility.
There are approximately 27 signatory and 30 non-signatory peanut
handlers who are currently subject to regulations under the Agreement
and non-signer program respectively and approximately 25,000 commercial
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 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. This action will be favorable to the industry by tending to
improve efficiency, reduce costs, and increase returns.
This finalization will continue the IFR's relaxations to handling
regulations by simplifying requirements; thus, enabling handlers, both
large and small, to cut costs and more efficiently handle their peanut
supplies, without jeopardizing safeguard requirements in the current
regulations.
The relaxations included:
1. The elimination of the requirement for inspection and approval
of farmers stock storage and handling facilities has saved
approximately $450,000 by eliminating the positions of the seven
fieldmen, who had performed this activity through last crop year.
Handlers contended they were already paying their own employees to do
this and that the duplicate cost should be eliminated;
2. Relaxing the minimum grade requirements for ``splits'' to
correspond with U.S. grade standards will likely reduce the number of
lots which need to be remilled during the 1997 crop by 10 percent, due
to stressed growing conditions in virtually all areas. This should
result in significant reductions in handlers' costs;
3. Another IFR relaxation provided that all lots of edible quality
peanuts, whether appeal claims or product claims, are eligible for
Agreement signer handlers' indemnification benefits. Thus, such
handlers with product claim lots are also eligible for reimbursement of
most transportation expenses on such lots. Such additional
reimbursement was not publicly quantified by the Committee, but is a
minor portion of its projected $350,000 total 1997 crop indemnification
costs;
4. The IFR's relaxed provision to allow lots which fail edible
quality requirements, due to excessive fall through, to be custom
blanched eliminates the previous requirement that handlers had to
submit a form to the Committee and receive authorization for movement
and blanching of each such lot. This relaxation has eliminated
unnecessary paperwork and saved time for all affected handlers;
5. Relaxing the previous requirement that peanuts be ``bagged''
(i.e., placed only in older standard-size burlap bags holding
approximately 110 pounds) by allowing the use of suitable containers,
which permits use of the many newer and more efficient containers or
those desired by handlers' customers; and
6. Another relaxation allowed peanuts which had been certified as
meeting the minimum grade requirements, but failed to meet requirements
for aflatoxin, to be roasted while being blanched prior to being
certified as meeting the aflatoxin requirements. This simplified
process eliminated running such peanuts back through the blancher again
for roasting, which doubled the processing costs and tended to lower
the peanuts' quality and value by causing additional damage to
[[Page 33240]]
them. Such savings may outweigh the approximately $40 per hour expense
of having an inspector present to maintain needed positive lot
identification.
The IFR's relaxed requirements have significantly improved
efficiency and enabled the Committee to cut in half its 1997 crop year
administrative budget and assessment rate charged Agreement signer and
non-signer handlers to finance their respective programs. The rate of
assessment for the 1996 crop year was $0.70 per net ton of assessable
peanuts. The rate for the 1997 crop year was reduced to $0.35 per net
ton by an earlier rulemaking action, as published in the September 17,
1997, issue of the Federal Register (62 FR 48749). This lower rate
saved regulated domestic handlers approximately $500,000 in
administrative assessment costs which, to a great extent, was made
possible by the IFR's relaxation actions.
The finalization continues the IFR's specifics of each change and
why they tended to increase returns to handlers, which were covered in
detail near the beginning of this rule under the discussion starting
with ``Incoming regulations.'' These IFR changes relaxed requirements
on regulated domestic peanut handlers, improved their efficiency and
cut costs, and benefitted the peanut industry, manufacturers, and
consumers, while still assuring the quality of all peanuts in domestic
human consumption markets.
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 sectors. Consistent with the
Paperwork Reduction Act (44 U.S.C. Chapter 35), the Committee
unanimously recommended greatly reducing reporting and recordkeeping
requirements on both large and small peanut handlers regulated under
the Agreement. It has eliminated 20 of the 21 Committee forms
previously approved by the Office of Management and Budget (OMB) that
might accompany peanut shipments, to only require the use of the Form
PAC-1. The PAC-1 is mailed to handlers on a monthly basis and is used
to report receipts and acquisitions of farmers stock peanuts and to
remit assessments. It is estimated that this has eliminated 95 percent
(or about 2,291 hours and assuming $10 per hour, saving respondents
nearly $23,000 in costs) of the previous estimated 2,417 hours of total
reporting burden on Agreement signers, including small businesses, and
a proportional reduction in non-signers' smaller reporting burdens. A
notice of the proposed revision was published in the July 31, 1997,
issue of the Federal Register (62 FR 41021). Sixty days were allowed
for comments. One comment was received, from the American Peanut
Shellers Association, supporting the reduced burdens. This information
collection package was approved by the OMB under OMB Control No. 0581-
0067.
In addition, the Department has not identified any Federal rules
that duplicate, overlap, or conflict with this finalization.
Further, the Committee's meeting was widely publicized throughout
the peanut industry and all interested persons were invited to attend
the meeting and participate in the Committee's deliberations. Like all
Committee meetings, the April 29-30, 1997, meeting was a public meeting
and all entities, both large and small, were able to express their
views on the issues. The 18-member Committee is composed of an equal
number of peanut handlers and producers, the majority of whom are small
entities.
Also, the Committee has a number of appointed subcommittees to
review certain issues and make recommendations to the Committee. The
Committee's Regulations, Indemnification and Quality Subcommittee and
``New Concept'' Subcommittee met on January 28, 1997, and discussed
these issues in detail. On March 25, 1997, the Committee held an
informational meeting to hear a presentation by the National Peanut
Council's Peanut Industry Revitalization Project Steering Committee and
discuss the issues and then take back to discuss with their industry
peers, before voting on those issues at the April Committee meeting.
The Committee's Administrative Budget Subcommittee also met March 25,
1997, to discuss budget recommendations. All of these meetings were
public meetings and both large and small entities were able to
participate and express their views.
An objective of the two domestic programs is to ensure that only
high quality and wholesome peanuts enter human consumption markets in
the United States. About half of the domestic commercial handlers,
handling approximately 95 percent of the crop volume, have signed the
Agreement. The other half are non-signatory handlers handling the
remaining 5 percent of the domestic production.
Under these 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 Agreement and to reimburse the
Department for oversight of the non-signatory program are paid by an
administrative assessment levied on handlers in the respective
programs.
The 18-member Committee, which is composed of an equal number of
peanut producers and handlers, meets at least annually to review the
Agreement's rules and regulations, which are effective on a continuous
basis from one crop year to the next which begins July 1. Committee
meetings are open to the public, and interested persons may express
their views at these meetings. The Department evaluates Committee
recommendations, as well as information from other sources, prior to
making any recommended changes to the regulations under the Agreement.
Section 608b of the Act was amended 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. Section 608b was further amended in 1993 to impose similar
requirements regarding administrative assessments. The non-signatory
handler regulations have been amended several times thereafter and are
published in 7 CFR part 997.
Thus, the Committee's recommended changes to the Agreement signers'
regulations, as finalized in this rule, also are finalized for the non-
signers' regulations. This finalization of an IFR identifies the
corresponding change to the non-signers' regulations for each change to
the Agreement regulations.
According to the Committee, the domestic peanut industry has been
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 that study, the U.S. peanut industry has been in a
period of dramatic economic decline since 1991 because: (1) Per capita
peanut consumption has steadily declined a total of 11 percent; (2)
harvested acreage has declined 25 percent; (3) production has declined
30 percent and farm value dropped 29 percent; and (4) imports of
peanuts and peanut products have increased from insignificant
quantities to 48,736 raw farmer stock tons in 1995, and to 55,536 in
1996.
That study points to recent increases in the duty-free import quota
for raw peanuts due to the North American
[[Page 33241]]
Trade Agreement (NAFTA) and the Uruguay Round Agreements under the
General Agreement on Tariffs and Trade (GATT). Under Section 22 import
quota provisions, the volume of U.S. peanut imports had been limited to
about 2.3 million pounds, in-shell basis, annually. Thus, imports have
historically represented about one-tenth of 1 percent of U.S. food use
of peanuts. Under NAFTA, Mexico has been granted a minimum access level
for duty-free entry of peanuts of about 10 million pounds, in-shell
basis. This level will increase about 3 percent annually through 2008,
when quantitative limits will cease. Mexico's 1998 duty-free quota will
total 8.4 million pounds. Under GATT, the 1997 quota was 86.8 million
pounds, has increased to 96.8 million pounds (Argentina 81.3 & all
other 15.5) in 1998, and can grow to about 125 million pounds in the
year 2000.
The study also projects that farm production costs and revenue will
be equal by the year 2000, as will handler costs and revenue, leaving
no profit.
In addition, the modification of the Federal farm peanut poundage
quota regulations implemented under the Agricultural Market Transition
Act of 1996 (1996 Act) has resulted in the domestic industry undergoing
significant changes scheduled to continue through the year 2002. The
peanut support price has been reduced from $670 per ton in 1995 to $610
per ton through 2002. The USDA's Farm Service Agency final rule
implementing the Act was published May 9, 1997, (62 FR 25433). That
rule indicates that economic impacts of the 1996 Act include expected
reductions in domestic peanut producers' revenue of $1.25 billion from
1996 through 2002. Quota lease holders could absorb a loss of about $40
million annually because of reduced leasing rates due to the lower
peanut price support. Also, capitalized value of quotas could decline
$200 to $300 million, thus reducing land values and the tax base of
rural communities.
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.
World supply and demand are less important for peanuts than most
U.S. farm commodities. Much of the world peanut production is for non-
food uses, although production for food use might increase a little if
there were no U.S. import restrictions. Also, import quotas, though
increased recently, still are set at relatively low levels.
Domestic peanut production in 1996 was approximately 3.66 billion
pounds, with a farm value of slightly under $1 billion. The Department
reports U.S. peanut production in 1997 totaled 3.54 billion pounds,
down 3 percent from the 1996 crop. Harvested acreage for 1997 was 1.41
million acres, up 2 percent from 1996. USDA estimates that acreage will
increase by 3 percent in 1998. The U.S. yield per harvested acre for
1997 averaged 2,507 pounds, down 146 pounds from 1996. The 1997
marketing year average price received by farmers for peanuts is 26.4
cents per pound, down 1.7 cents from 1996. The value of peanut
production for the 1997 crop is reported as $932 million, down 9
percent from a year earlier.
Production is expected to gradually increase to the year 2002
because domestic food use is projected to rise about 1.5 percent
annually. Imports are expected to remain at a relatively small
percentage of total U.S. peanut use.
Estimated exports of 750 million pounds in Marketing Year (MY) 1997
are below the average for the prior 3 years, but are 11 percent more
than a year earlier. Peanut oil prices are expected to average about 38
cents a pound of oil in MY 1997, 6 percent lower than MY 1996 as
vegetable oil supplies return to more normal levels. Peanut meal prices
for MY 1997 are expected to decline to $175 a ton, down 25 percent from
MY 1996 because of larger soybean meal supplies.
The 28.5 cents per pound season average price of farmer stock
peanuts for MY 1997 was the lowest price of the last two years and
reflects the adjustment to the reduced quota support level and an
unexpected change in the proportions of quota and additionals in 1997
production. Average prices to growers are expected to increase, but
will remain below 1995 prices because of the lower quota price support
level. The value of farm production is expected to gradually rise and
surpass that of 1995 by 2000/01.
The IFR changes of the Agreement's Incoming and Outgoing
regulations for 1997 and subsequent crop peanuts being finalized in
this rule were recommended by the Committee at its April 29-30, 1997,
public meeting.
Alternative Actions Considered
Although the Committee could have recommended no changes or less
changes to the current regulations, it unanimously concluded that those
were not satisfactory solutions. It believes that all possible
simplification and cost-cutting should be done and that these
regulations should focus more on outgoing quality and less on the
shelling and milling processes necessary to meet the outgoing, human
consumption requirements. Newer, high technology milling and blanching
equipment enable handlers to recondition failing peanut lots that could
not have been economically reconditioned when the regulations were
first promulgated. Therefore, it is no longer necessary to impose
restrictions that hinder the efficiency of handling operations and
result in the loss of potentially good quality peanuts. Thus, the
Committee believes this finalization will tend to improve the returns
to growers and handlers, while still maintaining consumer safeguard
provisions in the current domestic regulations, because all peanuts
intended for human consumption must still be inspected and certified
acceptable for such use.
After review of the recommendations and comment of the Committee,
the Department concurs that this finalization of the changes will tend
to improve returns to the industry and be in the public interest.
Expected benefits of the changes were covered in the previous
discussion of each individual change.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35) information collection requirements that are contained in
this rule have been previously approved by the OMB and have been
assigned OMB Nos. 0581-0067 (for Agreement signers) and 0581-0163 (for
non-signers).
One comment concerning the IFR was received during the 60-day
comment period. That comment was discussed earlier in this document, as
a part of the discussion of changes in the regulations.
After consideration of all relevant material presented, including
the Committee's recommendations and comment, and other information, it
is found that finalizing the IFR with changes, 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 rule until 30 days after publication in the
Federal Register (5 U.S.C. 553) because this final rule adopts with
appropriate changes the provisions of the interim final rule; based
upon a comment received, the provisions of the interim final rule have
been modified; this rule relaxes several provisions of the regulations;
and the end of the 1997-98 crop year is June 30, 1998.
[[Page 33242]]
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.
Accordingly, the interim final rule amending 7 CFR parts 997 and
998 which was published in the Federal Register at 63 FR 2846 on
January 16, 1998, is adopted as a final rule with the following
changes:
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. In Sec. 997.30, in paragraph (a)(1), the ``Maximum Limitations''
table is revised to read as follows:
Sec. 997.30 Outgoing regulation.
* * * * *
Maximum Limitations
[Excluding lots of ``splits'']
--------------------------------------------------------------------------------------------------------------------------------------------------------
Unshelled Fall through
Unshelled peanuts, --------------------------------------------------------------------
peanuts damaged Foreign
Type and grade category and kernels and materials Moisture
damaged minor Sound split and Sound whole kernels Total (percent) (percent)
kernels defects broken kernels
(percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Runner.......................... 1.50 2.50 3.00%; \17/64\ inch 3.00%; \16/64\ x 4.00% Both screens...... .20 9.00
round screen. \3/4\ inch slot
screen.
Virginia (except No. 2)......... 1.50 2.50 3.00%; \17/64\ inch 3.00%; \15/64\ x 4.00% Both screens...... .20 9.00
round screen. 1 inch slot screen.
Spanish and Valencia............ 1.50 2.50 3.00%; \16/64\ inch 3.00%; \15/64\ x 4.00% Both screens...... .20 9.00
round screen. \3/4\ inch slot
screen.
No. 2 Virginia.................. 1.50 3.00 6.00%; \17/64\ inch 6.00%; \15/64\ x 6.00% Both screens...... .20 9.00
round screen. 1 inch slot screen.
Runner with splits (not more 1.50 2.50 3.00% \17/64\ inch 3.00% \16/64\ x 4.00% Both screens...... .10 9.00
than 15% sound splits). round screen. \3/4\ inch slot
screen.
Virginia with splits (not more 1.50 2.50 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 & Valencia with splits 1.50 2.50 3.00% \16/64\ inch 2.00% \15/64\ x 4.00% Both screens...... .10 9.00
(not more than 15% sound round screen. \3/4\ inch slot
splits). screen.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Lots of ``splits''
--------------------------------------------------------------------------------------------------------------------------------------------------------
Runner (not more than 4% sound 2.00 2.50 3.00%; \17/64\ inch 3.00%; \14/64\ x 4.00% Both screens...... .20 9.00
round whole kernels). round screen. \3/4\ inch slot
screen.
Virginia (not less than 90% 2.00 2.50 3.00%; \17/64\ inch 3.00%; \14/64\ x 4.00% Both screens...... .20 9.00
splits). round screen. 1 inch slot screen.
Spanish & Valencia (not more 2.00 2.50 3.00%; \16/64\ inch 3.00%; \13/64\ x 4.00%; Both screens..... .20 9.00
than 4% sound whole kernels). round screen. \3/4\ inch slot
screen.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* * * * *
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. In Sec. 998.200, in paragraph (a)(1) the ``Maximum Limitation''
table is revised to read as follows:
Sec. 998.200 Outgoing quality regulation for 1997 and subsequent crop
peanuts.
* * * * *
[[Page 33243]]
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 2.50 300%; \17/64\ inch 3.00%; \16/64\ x 4.00%................... .20 9.00
round screen. \3/4\ inch slot
screen.
Virginia (except No. 2)......... 1.50 2.50 3.00%; \17/64\ inch 3.00%; \15/64\ x 4.00% Both screens...... .20 9.00
round screen. 1 inch slot screen.
Spanish and Valencia............ 1.50 2.50 3.00%; \16/64\ inch 3.00%; \15/64\ x 4.00% Both screens...... .20 9.00
round screen. \3/4\ inch slot
screen.
No. 2 Virginia.................. 1.50 3.00 6.00%; \17/64\ inch 6.00%; \15/64\ x 6.00% Both screens...... .20 9.00
round screen. 1 inch slot screen.
Runner with splits (not more 1.50 2.50 3.00%; \17/64\ inch 3.00%; \16/64\ x 4.00% Both screens...... .10 9.00
than 15% sound splits). round screen. \3/4\ inch slot
screen.
Virginia with splits (not more 1.50 2.50 3.00%; \17/64\ inch 3.00%; \15/64\ x 4.00% Both screens...... .10 9.00
than 15% sound splits). round screen. 1 inch slot screen.
Spanish & Valencia with splits 1.50 2.50 3.00%; \16/64\ inch 2.00%; \15/64\ x 4.00% Both screens...... .10 9.00
(not more than 15% sound round screen. \3/4\ inch slot
splits). screen.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Lots of ``splits''
--------------------------------------------------------------------------------------------------------------------------------------------------------
Runner (not more than 4% sound 2.00 2.50 3.00%; \17/64\ inch 3.00%; \14/64\ x 4.00% Both screens...... .20 9.00
whole kernels). round screen. \3/4\ inch slot
screen.
Virginia (not less than 90% 2.00 2.50 3.00%; \17/64\ inch 3.00%; \14/64\ x 4.00% Both screens...... .20 9.00
splits). round screen. 1 inch slot screen.
Spanish and Valencia (not more 2.00 2.50 3.00%; \16/64\ inch 3.00%; \13/64\ x 4.00% Both screens...... .20 9.00
than 4% sound whole kernels). round screen. \3/4\ inch slot
screen.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* * * * *
Dated: June 12, 1998.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-16269 Filed 6-17-98; 8:45 am]
BILLING CODE 3410-02-P