[Federal Register Volume 63, Number 150 (Wednesday, August 5, 1998)]
[Rules and Regulations]
[Pages 41711-41713]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-20896]


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DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1446

RIN: 0560-AF56


Cleaning and Reinspection of Farmers Stock Peanuts

AGENCY: Commodity Credit Corporation, USDA.

ACTION: Interim rule with request for comments.

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SUMMARY: This rule amends regulations for the peanut price support 
program to, pending comment, ease conditions for marketing Segregation 
3 peanuts by allowing the peanuts to be reconditioned and regraded in 
certain limited instances. Peanuts are graded as ``Segregation 3'' 
peanuts when they are found by visual inspection to have Aspergillus 
flavus (A. flavus) mold. This rule would allow a farmer whose peanuts 
were found at a buying point inspection to have the mold to reclean 
those peanuts at the buying point and have them visually reinspected 
within 24 hours. The farmer could obtain such a re-inspection only once 
for any given lot. This rule follows litigation in which all segments 
of the industry were involved and buying point inspection procedures 
were at issue. This rule is issued as an interim rule to allow relief 
with respect to the upcoming crop (the 1998 crop) which should come to 
market shortly. However, comments on all inspection options related to 
the price support program for peanuts are solicited and should be 
offered by all interested parties.

DATES: Effective August 5, 1998. Comments must be received on or before 
September 4, 1998 to be assured consideration. Comments regarding 
information collection must be received on or before October 5, 1998 to 
be assured consideration.

ADDRESSES: Submit comments on the interim rule to: Director, Tobacco 
and Peanuts Division, Farm Service Agency, U.S. Department of 
Agriculture, STOP 0514, 1400 Independence Avenue, SW, Washington, D.C., 
20250-0514. All written submissions made pursuant to this rule will be 
made available for public inspection in Room 5750 South Building, USDA, 
between the hours of 8:15 a.m. and 4:45 p.m., during regular Federal 
workdays.

FOR FURTHER INFORMATION CONTACT: David Kincannon, (202) 720-7914.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    For purposes of Executive Order 12866, this rule has been 
determined to be not significant and has not been reviewed by the 
Office of Management and Budget (OMB).

Regulatory Flexibility Act

    The Regulatory Flexibility Act is not applicable to this interim 
rule because the Commodity Credit Corporation 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.

Environmental Evaluation

    It has been determined by an environmental evaluation that this 
action will have no significant impact on the quality of the human 
environment. Therefore, neither an Environmental Assessment nor an 
Environmental Impact Statement is needed.

Unfunded Federal Mandates

    This rule contains no Federal mandates (under the regulatory 
provisions of Title II of the Unfunded Mandate Reform Act of 1995 
(UMRA), for State, local, and tribal governments or the private sector. 
Thus, this rule is not subject to the requirements of sections 202 and 
205 of the UMRA.

Federal Assistance Program

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

Executive Order 12372

    This program is not subject to the provisions of Executive Order 
12372, which requires intergovernmental consultation with State and 
local officials. See the Notice related to 7 CFR

[[Page 41712]]

part 3015, subpart V, published at 48 FR 29115 (June 24, 1983).

Executive Order 12988

    This interim rule has been reviewed in accordance with Executive 
Order 12988. The provisions of this rule do not preempt State laws to 
the extent that such laws are consistent with the provisions of this 
rule. Before any legal action is brought regarding determinations made 
under provisions of 7 CFR part 1446, the administrative appeal 
provisions set forth at 7 CFR parts 11 and 780 must be exhausted.

National Appeals Division Rules of Procedure

    The procedures set out in 7 CFR parts 11 and 780 apply to appeals 
of adverse decisions made under the regulations adopted in this notice.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995, CCC will 
forward a regular submission of this information collection request to 
OMB for the approval of increased reporting burden necessary for the 
administration of the peanut program.
    Title: Peanut Program.
    OMB Control Number: 0560-0006.
    Type of Request: Reinstatement and Revision of a previously 
approved information collection.
    Abstract: The peanut price support program is made available 
through the authority granted the Secretary of Agriculture under the 
Agricultural Adjustment Act of 1938, as amended, and the Agriculture 
Act of 1949, as amended. The Federal Agriculture Improvement and Reform 
Act of 1996 amended the peanut price support program effective for the 
1996 through 2002 crop years.
    Under the provisions of the peanut price support program FSA 
allocates peanut quota to States based on the peanut quota allocated to 
the State in 1995. Each farm eligible for peanut quota allocation 
receives a quota based on the increase or decrease in the States quota. 
Provisions of the peanut program requires FSA to administer the 
transfer of peanut quota between farm, the allocation of temporary seed 
quota, the marketing, inspection and grading peanuts of all peanuts, 
making warehouse-and farm-stored loans, and the contracting and 
disposition of additional peanuts (peanuts grown in excess of a farms 
quota allocation).
    The public reporting burden imposed by the peanut price support 
program requires peanut producers to document the acreage planted to 
peanuts, peanut quota transferred to another farm and to an out-of-
county farm, production and disposition of peanuts. Peanut handlers are 
required to report the grade factors for peanuts inspected at time of 
delivery to buying points, purchase of non-inspected peanuts, peanuts 
used for breeder seed or foundation seed, and peanuts used for 
experimental purposes.
    This information collected allows FSA, in accordance with statutory 
provisions, to account for peanut production for each farm, allocate 
temporary seed quota to eligible producers, and monitor the disposition 
of additional peanuts to assure only quota peanuts are used in the 
domestic market. In addition, this information collection allows the 
CCC to administer the warehouse-and farm-stored peanut loan program and 
to assure that quota peanuts are supported at the mandated price 
support rate.
    Estimate of Burden: Public reporting burden for this information 
collection is estimated to average .68 hours per response .
    Respondents: Peanut Producers.
    Estimated Number of Respondents: 51,250.
    Estimated Number of Responses per Respondent: 15.
    Estimated Total Annual Burden on Respondents: 306,690 hours.
    Proposed topics for comment include: ( a) Whether the continued 
collection of information is necessary for the proper performance of 
the functions of the agency, including whether the information will 
have practical utility; (b) the accuracy of the CCC's estimate of 
burden including the validity of the methodology and assumptions used; 
(c) enhancing the quality, utility, and clarity of the information 
collected; or (d) minimizing the burden of the collection of the 
information on those who are to respond, including the use of 
appropriate automated, electronic, mechanical, or other technological 
collection techniques or other forms of information technology. 
Comments should be sent to the Desk Officer for Agriculture, Office of 
Information and Regulatory Affairs, Office of Management and Budget, 
Washington, D.C. 20250-0517. All comments will become a matter of 
public record.
    OMB is required to make a decision concerning the collection of 
information contained in these interim regulations between 30 and 60 
days after publication of this document in the Federal Register. 
Therefore, a comment to OMB is best assured of having its full effect 
if OMB receives it within 30 days of publication.

Background

    This rule addresses an amendment to the peanut poundage quota 
regulations at 7 CFR Part 1446 with regard to determining Segregation 3 
peanuts and addresses a matter which has been at issue in recent 
litigation under the name of Ray T. Boyd et al. v. Glickman, USDC M.D. 
Ala., Southern Div., Civil Action No. 98-A-83 S. In order to provide 
some relief with respect to the matter at issue in that proceeding, 
this rule modifies the definition of Segregation 3 peanuts found in 
Sec. 1446.103 by providing that peanuts found to have visible 
Aspergillus flavus (A. flavus) mold upon a visual inspection at a 
buying point may be reconditioned and regraded in certain limited 
instances. For many years peanuts found to have visible A. flavus mold 
were required to be marketed as additional loan peanuts or as quota 
peanuts returned to the farm for seed. Although no recleaning was 
allowed, the impact of the inspection on farmers was mitigated by the 
availability of ``disaster transfers'' which allowed a transfer of 
additional loan peanuts to a quota loan pool. Those transfers did not 
change the ultimate use of the peanuts but did allow the farmer to 
receive a return close to that for quota peanuts if the farmer 
otherwise would have unused quota.
    The Federal Agriculture Improvement and Reform Act of 1996 (1996 
Act) substantially limited the quantity and price on such transfers but 
did not mandate the particular procedures by which peanuts would be 
classified as Segregation 3 peanuts. In order to mitigate possible harm 
to individual farmers with Segregation 3 peanuts, farmers whose peanuts 
are found to contain visible A. flavus mold would be allowed by this 
interim rule, pending comment, to have the peanuts reconditioned by 
removing foreign material and loose shelled kernels (LSK's) at the 
buying point and regraded one time only in accordance with directions 
to be issued by the Director of the Tobacco and Peanuts Division of the 
Farm Service Agency.
    As defined by 7 CFR part 1446, farmers stock peanuts are picked or 
threshed peanuts produced in the United States which have not been 
changed (except for removal of foreign material, loose shelled kernels 
(LSK's), and excess moisture) from the condition in which picked or 
threshed peanuts are customarily marketed by producers, plus any LSK's 
that are removed from farmers stock peanuts before such farmers stock 
peanuts are marketed. Accordingly, the only permissible reconditioning 
of farmers stock peanuts

[[Page 41713]]

is cleaning to remove foreign material and LSK's. Any LSK's removed by 
cleaning must be accounted for as will be specified by the Director.
    Comments on this interim rule are requested and will be considered 
including comments directed at the impact of this rule on other farmers 
because of possible losses that could occur on peanuts that are 
regraded but after being pledged as collateral for a price support loan 
at the higher quota level are not found attractive to buyers of peanuts 
for quota peanut uses. It has been determined for the present that the 
retesting will not be made using chemical testing because of the cost 
involved, and the lack of standards for chemical testing at that stage 
of the marketing process. Insofar as questions of wholesomeness are 
concerned chemical testing is conducted at a later stage of the 
marketing process for the purposes of insuring such wholesomeness. The 
inspection addressed in this rule is for purposes of making certain 
price support value determinations in the context of operating a 
program that supports peanuts throughout the country.
    However, comments concerning chemical testing during the inspection 
for incoming producer peanuts at buying points will be carefully 
considered in determining whether to amend the interim rule prior to 
making that rule final. Such comments should address the efficacy of 
such testing, standards for such testing and the assignment of costs 
for such testing. That is, all interested parties should provide 
comments expressing their view on whether the option contained in the 
interim rule, or some other option, should be selected. All options 
will be considered.

List of Subjects in 7 CFR part 1446

    Loan programs--agriculture, Reporting and recordkeeping 
requirements
    For the reasons set out in the preamble, 7 CFR part 1446 is amended 
as follows:

PART 1446--PEANUTS

    1. The authority citation is amended to read as follows:

    Authority: 7 U.S.C. 7271; 15 U.S.C. 714b and 714c

    2. In Sec. 1446.103 a new definition of ``Director'' is added in 
its proper alphabetical sequence and in the definition of Segregations, 
paragraph (3) is revised to read as follows:


Sec. 1446.103  Definitions

* * * * *
    Director. The Director, or Acting Director, Tobacco and Peanuts 
Division, Farm Service Agency, U.S. Department of Agriculture.
* * * * *
    Segregations. * * *
    (3) Segregation 3. Segregation 3 peanuts are farmers stock peanuts 
which, upon visible inspection, are found to contain Aspergillus flavus 
mold: Provided, further, however, that, in accordance with such written 
instructions as the Director may issue, the Director shall permit 
producers at approved buying points as specified by the Director to 
have a Segregation 3 lot reconditioned, one time only, so long as the 
reconditioning is performed at the buying point where the peanuts were 
initially delivered, and then reinspected visually. Such reinspection 
may not occur more than 24 hours from the initial inspection except as 
permitted by the Director and the second grade shall be considered the 
final grade for the farmers stock peanuts.
* * * * *
    Signed at Washington, D.C., on July 30, 1998.
Keith Kelly,
Executive Vice President, Commodity Credit Corporation.
[FR Doc. 98-20896 Filed 7-31-98; 2:59pm]
BILLING CODE 3410-05-P