[Federal Register Volume 86, Number 164 (Friday, August 27, 2021)]
[Proposed Rules]
[Pages 48046-48049]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-18536]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 86, No. 164 / Friday, August 27, 2021 / 
Proposed Rules  

[[Page 48046]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1216

[Document Number AMS-SC-20-0100]


Peanut Promotion, Research, and Information Order; Increase the 
Threshold of the Primary Peanut-Producing States and Adjustment of 
Membership

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposal invites comments on increasing the threshold for 
defining primary peanut-producing states as states that maintain a 3-
year average production of at least 20,000 tons of peanuts instead of 
10,000 tons of peanuts as currently prescribed in the Peanut Promotion, 
Research, and Information Order (Order). The Order is administered by 
the National Peanut Board (Board) with oversight by the U.S. Department 
of Agriculture (USDA). As a result of increasing the threshold, this 
proposal would decrease the Board's membership from 13 to 12 members 
and their respective alternates. This action would contribute to 
effective administration of the program.

DATES: Comments must be received by September 27, 2021.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. All comments must be submitted through 
the Federal e-rulemaking portal at: http://www.regulations.gov, and 
should reference the document number and date, and page number of this 
issue of the Federal Register. Comments submitted in response to this 
proposed rule will be included in the rulemaking record and will be 
made available to the public. Please be advised that the identity of 
individuals or entities submitting the comments will be made public on 
the internet at: http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Victoria M. Carpenter, Marketing 
Specialist, Promotion and Economics Division, Specialty Crop Program, 
AMS, USDA, Stop 0244, 1400 Independence Avenue SW, Room 1406-S, 
Washington, DC 20250-0244; telephone: (202) 720-6930; or electronic 
mail: [email protected].

SUPPLEMENTARY INFORMATION: This proposal affecting the Order (7 CFR 
part 1216) is authorized under the Commodity Promotion, Research, and 
Information Act of 1996 (1996 Act) (7 U.S.C. 7411-7425).

Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility. 
This action falls within a category of regulatory actions that the 
Office of Management and Budget (OMB) exempted from Executive Order 
12866 review.

Executive Order 13175

    This action has been reviewed in accordance with requirements of 
Executive Order 13175, Consultation and Coordination with Indian Tribal 
Governments. AMS has assessed the impact of this proposed rule on 
Indian tribes and determined that this rule would not have tribal 
implications that require consultation under Executive Order 13175. AMS 
hosts a quarterly teleconference with tribal leaders where matters of 
mutual interest regarding the marketing of agricultural products are 
discussed. Information about proposed changes to regulations will be 
shared during an upcoming quarterly call, and tribal leaders will be 
informed about proposed revisions to the regulation and the opportunity 
to submit comments. AMS will work with the USDA Office of Tribal 
Relations to ensure meaningful consultation is provided as needed with 
regards to this change to the Order.

Executive Order 12988

    This proposal has been reviewed under Executive Order 12988, Civil 
Justice Reform. It is not intended to have retroactive effect. Section 
524 of the 1996 Act (7 U.S.C. 7423) provides that it shall not affect 
or preempt any other Federal or State law authorizing promotion or 
research relating to an agricultural commodity.
    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Office of Information and Regulatory Affairs designated this rule 
as not a major rule, as defined by 5 U.S.C. 804(2).
    Under section 519 of the 1996 Act (7 U.S.C. 7418), a person subject 
to an order may file a written petition with USDA stating that an 
order, any provision of an order, or any obligation imposed in 
connection with an order, is not established in accordance with the 
law, and request a modification of an order or an exemption from an 
order. Any petition filed challenging an order, any provision of an 
order, or any obligation imposed in connection with an order, shall be 
filed within two years after the effective date of an order, provision, 
or obligation subject to challenge in the petition. The petitioner will 
have the opportunity for a hearing on the petition. Thereafter, USDA 
will issue a ruling on the petition. The 1996 Act provides that the 
district court of the United States for any district in which the 
petitioner resides or conducts business shall have the jurisdiction to 
review a final ruling on the petition, if the petitioner files a 
complaint for that purpose not later than 20 days after the date of the 
entry of USDA's final ruling.

Background

    This proposed rule invites comments on increasing the threshold for 
defining primary peanut-producing states as states that maintain a 3-
year average production of at least 20,000 tons of peanuts instead of 
10,000 tons of peanuts as currently prescribed in the Order. This would 
help ensure that the Board reflects the peanut production in the United 
States. The Order is administered by the Board with oversight by USDA.
    The Order became effective on July 30, 1999. Under the Order, the 
Board administers a nationally coordinated program of promotion, 
research and information designed to strengthen the position of peanuts 
in the marketplace

[[Page 48047]]

and to develop, maintain, and expand the demand for peanuts in the 
United States. Under the program, assessments are levied on all farmers 
stock peanuts sold at a rate of $3.55 per ton for Segregation 1 peanuts 
and $1.25 per ton for Segregation 2 peanuts and 3 peanuts, as those 
terms are defined in 7 CFR 996.13(b) through (d). Assessments are 
remitted to the Board by handlers and, for peanuts under loan, by the 
Commodity Credit Corporation.
    The Order defines terms ``minor peanut-producing states'' and 
``primary peanut-producing states'' for purposes of Board 
representation and voting at meetings. According to USDA, Federal-State 
Inspection Service, National Peanut Tonnage Reports, there are 13 
peanut-producing states, which include: Alabama, Arkansas, Florida, 
Georgia, Louisiana, Mississippi, Missouri, New Mexico, North Carolina, 
Oklahoma, South Carolina, Texas, and Virginia. Section 1216.21 
currently defines primary peanut-producing states as Alabama, Arkansas, 
Florida, Georgia, Mississippi, Missouri, New Mexico, North Carolina, 
Oklahoma, South Carolina, Texas, and Virginia. These states must 
maintain a 3-year average production of at least 10,000 tons of peanuts 
to meet the current definition. All other peanut-producing states are 
defined as minor peanut-producing states in Sec.  1216.15 and are 
represented by one member and one alternate on the Board--currently 
only Louisiana meets this definition.
    With the growth in farm size, there are fewer and larger peanut 
producers than when the Order was promulgated in 1999. As stated above, 
currently, there is only one state, Louisiana, that represents the 
minor peanut-producing states, which is the at-large position on the 
Board. This makes it difficult to get adequate numbers of nominees to 
fill both member and alternate member seats on the Board. By increasing 
the threshold for defining primary peanut-producing states to states 
that maintain a 3-year average production of at least 20,000 tons 
instead of 10,000 tons of peanuts as currently prescribed, this action 
would increase the candidate pool for at-large member seats on the 
Board.
    Pursuant to Sec.  1216.87, amendments to the Order may be proposed 
from time to time by the Board or by any interested person affected by 
provisions of the 1996 Act, including the Secretary of Agriculture.
    The Board has been concerned about having enough nominees to fill 
vacant seats for several years and was hopeful that the situation would 
improve. The Board staff has actively recruited candidates to be 
considered for nomination from multiple primary peanut-producing states 
and the at-large state, sometimes with little success. Due to an 
alternate member vacancy for New Mexico and difficulty finding 
producers to serve, the Board determined it was time to increase the 3-
year average.
    The Board discussed increasing the threshold with the industry to 
explain the situation, and it was determined that increasing the 
threshold for defining primary peanut-producing states was a good way 
to give the peanut producing states an opportunity to be nominated for 
a member or alternate seat on the Board.

Board Recommendation

    The Board met to discuss methods to increase the pool of candidates 
for representation of the minor peanut-producing states to serve on the 
Board. At the time of the Board's formation in July 1999 (64 FR 41252), 
peanut farms were smaller, and therefore, there were many more 
producers eligible to be nominated to serve on the Board. In April 
1999, USDA reported there were approximately 25,000 peanut producers 
(64 FR 80107). Based on the Board's records, for the 2018 production 
crop year, there were 8,126 peanut producers and for the 2019 crop 
year, there were 7,200 peanut producers.
    Currently, in minor peanut-producing states the pool of candidates 
is very small, with Louisiana being the only state in this category. 
The Board has had difficulty in gathering the required two nominees for 
each open position for submission to the Secretary of Agriculture.
    The Board has been concerned about this issue for several years and 
was hopeful that the situation would improve. For approximately 10 
years, the Board's management has actively recruited candidates to be 
considered for nomination from multiple primary and minor peanut-
producing states to fill seats on the Board. In the 2020 submission to 
the Secretary for appointments to fill member and alternate seats for 
New Mexico, only two nominees were submitted for consideration instead 
of four. Therefore, only the member seat was filled, and the alternate 
seat remains vacant. In addition, since there is currently only one 
state (Louisiana) representing minor peanut-producing states, it is 
often difficult to get a sufficient number of nominees to fill member 
and alternate positions as well. These nominees are comprised of 
producers of all sizes including small producers.
    In 1999, the Board was comprised of 10 members and their 
alternates. The Board's representation for primary peanut-producing 
states were Alabama, Florida, Georgia, New Mexico, North Carolina, 
Oklahoma, South Carolina, Texas, and Virginia and minor peanut-
producing states were represented by a Louisiana member and an Arizona 
alternate member. Over the years, there have been three adjustments of 
membership, which increased the size of the Board's membership. On July 
9, 2008, the Board increased its membership from 10 to 11 when it added 
Mississippi as a primary peanut-producing state (73 FR 39214). On March 
21, 2014, the Board increased its membership a second time from 11 to 
12 when it added Arkansas as a primary peanut-producing state (79 FR 
15636). The most recent change in the Board's membership was the 
addition of Missouri, which was published on March 23, 2020 (85 FR 
16229). That addition increased the membership from 12 to 13.
    For the 2019 production year, computations based on Federal State 
Inspection Service data show that Georgia was the largest producer, 
with 49.8 percent followed by Florida (10.7 percent), Alabama (9.4 
percent), Texas (8.7 percent), North Carolina (8.1 percent), South 
Carolina (4.1 percent), Arkansas (3.1 percent), Virginia (2.0 percent), 
Mississippi (1.4 percent), Missouri (1.2 percent), Oklahoma (1.0 
percent), and New Mexico (0.3 percent). Currently, these 12 states are 
considered primary peanut-producing states and they each have a member, 
with their alternate, seated on the Board. All other states (minor 
peanut-producing states) that produce peanuts are represented by the 
at-large member.
    As a result of membership adjustments described above, there is 
currently only one minor peanut-producing state (Louisiana) 
representing ``at-large'' seats. That minor peanut-producing state has 
only five producers producing peanuts in that state. Increasing the 
threshold from 10,000 tons to 20,000 tons, would cause the state of New 
Mexico to become a minor peanut-producing state instead of a primary 
peanut-producing state. This change would increase the pool of 
candidates eligible to represent minor peanut-producing states as the 
at-large member and alternate. Minor peanut-producing states would be 
represented by Louisiana and New Mexico. This proposal would increase 
the threshold for defining primary peanut-producing states as states 
that maintain a 3-year average production of at least 20,000 tons of 
peanuts instead of 10,000 tons of peanuts, an increase of 10,000 tons.

[[Page 48048]]

    The intent of the Order was to allow peanut farmers to oversee a 
peanut research, marketing, and promotion organization to improve their 
economic condition. To be successful, there must be an adequate pool of 
interested, qualified producers to serve on the Board. The Board voted 
unanimously on December 3, 2020, and February 3, 2021, to raise the 
threshold for primary peanut-producing states to those that maintain a 
3-year average production of at least 20,000 tons of peanuts. This 
proposed change would cause the state of New Mexico to become a minor 
peanut-producing state instead of a primary peanut-producing state, 
since its production will be below the proposed 20,000-ton threshold. 
Minor peanut-producing states will be represented by Louisiana and New 
Mexico. The Board recommended that the change take place by January 1, 
2022, to give New Mexico's certified peanut producer organization 
enough notice of their status change to a minor peanut-producing state. 
Nominations to fill the at-large seats would take place in 2022 for the 
term of office to begin in 2023.
    Accordingly, this proposed rule would amend Sec. Sec.  1216.15 and 
1216.21 to define the state of New Mexico as a minor peanut-producing 
state. This proposal would require primary peanut-producing states to 
maintain a 3-year average production of at least 20,000 tons of 
peanuts. This proposal would also revise Sec.  1216.40(a) to specify 
that the Board would be comprised of no more than 12 peanut producer 
members and their alternates rather than 13, and revise Sec.  
1216.40(a)(1) to reflect the new number of primary peanut-producing 
states, by revising 12 to 11.

Initial Regulatory Flexibility Act Analysis

    In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C. 
601-612), AMS is required to examine the impact of the proposed rule on 
small entities. Accordingly, AMS has considered the economic impact of 
this action on small entities.
    The purpose of the RFA is to fit regulatory actions to the scale of 
businesses subject to such actions so that small businesses will not be 
disproportionately burdened. The Small Business Administration (SBA) 
defines, in 13 CFR part 121, small agricultural producers as those 
having annual receipts of no more than $1 million and small 
agricultural service firms (handlers) as those having annual receipts 
of no more than $30 million.
    According to the Board, there were approximately 7200 producers and 
34 handlers of peanuts who were subject to the program in 2019.
    Most producers would be classified as small agricultural production 
businesses under the criteria established by the SBA (no more than $1 
million in annual peanut sales). USDA's National Agricultural 
Statistics Service (NASS) reported that crop values of peanuts produced 
in the top 11 peanut-producing states for the years 2017, 2018, and 
2019 were $1.63 billion, $1.17 billion, and $1.13 billion, 
respectively. The 3-year crop average was $1.31 billion. With a 2019 
crop value of $1.13 billion and a total of 7,200 producers, average 
peanut sales per producer were approximately $157,000. With a 2017-2018 
average crop value of $1.31 billion, average sales per producer were 
approximately $182,000. Both figures are well below the $1 million 
threshold for a small producer, providing strong evidence that most 
peanut producers are small businesses.
    With 34 handlers, the average annual peanut crop value per handler 
from 2017 to 2019 ranged from $33 million to $48 million, with a 3-year 
average of $39 million. With average sales figures moderately higher 
than the small business threshold size of $30 million, it appears that 
several handlers are small businesses and there are also a number that 
are large businesses--no definitive statement can be made.
    According to NASS, the number of pounds of U.S. peanut production 
from 11-primary peanut-producing states for 2017, 2018, and 2019 were 
7.12 billion, 5.50 billion and 5.47 billion, respectively. The 3-year 
average production was 6.03 billion pounds. Computations based on NASS 
data show that Georgia was the largest producer, with 50.9 percent of 
the 3-year average quantity, followed by Alabama (9.9 percent), Florida 
(9.9 percent), Texas (9.1 percent), North Carolina (7.2 percent), South 
Carolina (5.4 percent), Arkansas (2.4 percent), Mississippi (1.9 
percent), Virginia (1.8 percent), Oklahoma (1.0 percent), and New 
Mexico (under one percent).
    This proposal would amend Sec. Sec.  1216.15, 1216.21 and 1216.40 
to redefine the state of New Mexico from a primary peanut-producing 
state to a minor peanut-producing state. The Order is administered by 
the Board with oversight by USDA. Under the Order, primary peanut-
producing states must maintain a 3-year average production of at least 
10,000 tons of peanuts. This amendment would increase the production 
threshold to 20,000 tons of peanuts. This action would expand the 
number of minor peanut-producing states to ensure that the Board 
obtains an adequate pool of qualified producers to serve on the Board 
to represent minor peanut-producing states. This action is authorized 
under Sec.  1216.87 of the Order.
    Regarding the economic impact of this proposed rule on affected 
entities, this action would impose no costs on producers or handlers. 
Changes would define the state of New Mexico as a minor peanut-
producing state based on the proposed increase to the threshold to 
20,000 tons of peanuts.
    Regarding alternatives, the Board has been concerned about 
obtaining the required two nominees for each open seat to be submitted 
to the Secretary of Agriculture for primary peanut-producing states and 
minor peanut-producing states. For years, the Board's staff has 
actively recruited candidates to be considered for nomination from 
multiple primary peanut-producing states and minor peanut-producing 
states, sometimes with little success. The Board considered increasing 
the threshold for primary peanut-producing states from 10,000 to 30,000 
per ton for a 3-year production average. After discussion, the Board 
voted to double the threshold and require the primary peanut-producing 
states to maintain a 3-year production average of at least 20,000 tons 
of peanuts.
    In accordance with OMB regulation [5 CFR part 1320], which 
implements information collection requirements imposed by the Paperwork 
Reduction Act of 1995 [44 U.S.C. 3501 et seq.], there are no new 
requirements contained in this rule. In fact, a decrease of 0.30 hours 
in the information collection burden for the peanut program is 
expected. Information collection requirements have been previously 
approved by OMB under OMB control number 0581-0093 and 0505-0001.
    As with all Federal promotion programs, reports and forms are 
periodically reviewed to reduce information requirements and 
duplication by industry and public sector agencies. USDA has not 
identified any relevant Federal rules that duplicate, overlap, or 
conflict with this proposed rule.
    AMS is committed to complying with the E-Government Act, to promote 
the use of the internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.
    Regarding outreach efforts, the Board invited Executive Directors 
of certified peanut producer organizations who represent the primary 
peanut-producing states (Georgia, Alabama, Texas, Florida, North 
Carolina, South Carolina,

[[Page 48049]]

Mississippi, Missouri, Arkansas, Virginia, Oklahoma, and New Mexico) to 
attend its annual meeting on February 3, 2021. Most of the Executive 
Directors for certified peanut producer organizations attended this 
meeting. All the Board's meetings are open to the public and interested 
persons are invited to participate and express their views. The Board 
announced that it voted to increase the threshold level from 10,000 to 
20,000 per ton on a 3-year average production for a state to become a 
primary peanut-producing state. No concerns were raised.
    We have performed this initial RFA analysis regarding the impact of 
this proposed action on small entities, and we invite comments 
concerning potential effects of this action on small businesses.
    USDA has determined that this proposed rule is consistent with and 
would effectuate the purposes of the 1996 Act. A 30-day comment period 
is provided to allow interested persons to respond to this proposal. 
All written comments received in response to this proposed rule will be 
considered prior to finalizing this action.

List of Subjects in 7 CFR Part 1216

    Administrative practice and procedure, Advertising, Consumer 
information, Marketing agreements, Peanut promotion, Reporting and 
recordkeeping requirements.

    For reasons set forth in the preamble, 7 CFR part 1216 is proposed 
to be amended as follows:

PART 1216--PEANUT PROMOTION, RESEARCH, AND INFORMATION ORDER

0
1. The authority citation for 7 CFR part 1216 continues to read as 
follows:

    Authority:  7 U.S.C. 7411-7425; 7 U.S.C. 7401.

0
2. Section 1216.15 is revised to read as follows:


Sec.  1216.15   Minor peanut-producing states.

    Minor peanut-producing states means all peanut-producing states 
with the exception of Alabama, Arkansas, Florida, Georgia, Mississippi, 
Missouri, North Carolina, Oklahoma, South Carolina, Texas and Virginia.
0
3. Section 1216.21 is revised to read as follows:


Sec.  1216.21   Primary peanut-producing states.

    Primary peanut-producing states means Alabama, Arkansas, Florida, 
Georgia, Mississippi, Missouri, North Carolina, Oklahoma, South 
Carolina, Texas and Virginia, provided these states maintain a 3-year 
average production of at least 20,000 tons of peanuts.
0
4. In Sec.  1216.40, paragraphs (a) introductory text and (a)(1) are 
revised to read as follows:


Sec.  1216.40   Establishment and membership.

    (a) Establishment of a National Peanut Board. There is hereby 
established a National Peanut Board, hereinafter called the Board, 
comprised of no more than 12 peanut producers and alternates, appointed 
by the Secretary from nominations as follows:
    (1) Eleven members and alternates. One member and one alternate 
shall be appointed from each primary peanut-producing state, who are 
producers and whose nominations have been submitted by certified peanut 
producer organizations within a primary peanut-producing state.
* * * * *

Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2021-18536 Filed 8-26-21; 8:45 am]
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