[Federal Register Volume 86, Number 242 (Tuesday, December 21, 2021)]
[Rules and Regulations]
[Pages 72148-72151]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-27513]


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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, Department of Agriculture 
(USDA).

ACTION: Final rule.

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SUMMARY: This rule changes 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, the Board's membership will 
decrease from 13 to 12 members and their respective alternates. This 
change will contribute to effective administration of the program.

DATES: Effective January 20, 2022.

FOR FURTHER INFORMATION CONTACT: Victoria M. Carpenter, Marketing 
Specialist, Mid Atlantic Branch, Market Development Division, Specialty 
Crops Program, AMS, USDA, Stop 0244, 1400 Independence Avenue SW, Room 
1406-S, Washington, DC 20250-0244; Telephone: (202) 720-6930; or Email: 
[email protected].

SUPPLEMENTARY INFORMATION: This rule is issued under the Order (7 CFR 
part 1216). The Order 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. The Agricultural Marketing Service (AMS) has assessed the 
impact of this rule on Indian tribes and determined that this rule will 
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 changes to 
regulations were shared during a recent quarterly call, and tribal 
leaders were informed about the revisions to the regulation and had the 
opportunity to submit comments. AMS will continue to 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 rule 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 rule will 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 as 
currently prescribed in the Order. This will 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 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 the 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,

[[Page 72149]]

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 
will 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.
    For several years, the Board has been concerned about having enough 
nominees to fill vacant seats 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 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.
    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 will 
cause the state of New Mexico to become a minor peanut-producing state 
instead of a primary peanut-producing state. This change will increase 
the pool of candidates eligible to represent minor peanut-producing 
states as the at-large member and alternate. Minor peanut-producing 
states will be represented by Louisiana and New Mexico. This rule will 
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.
    The intent of the Order is 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 rule 
will 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

[[Page 72150]]

fill the at-large seats will take place during the next nomination 
cycle.
    Accordingly, this rule will amend Sec. Sec.  1216.15 and 1216.21 to 
define the state of New Mexico as a minor peanut-producing state. This 
rule will require primary peanut-producing states to maintain a 3-year 
average production of at least 20,000 tons of peanuts. This rule will 
also revise Sec.  1216.40(a) to specify that the Board will 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.

Final 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 final 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 7,200 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 action will 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 action will increase the production threshold to 
20,000 tons of peanuts. This action will 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 final rule on affected 
entities, this action will impose no costs on producers or handlers. 
Changes will 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 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, 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.
    A 30-day comment period was provided to allow interested persons to 
respond to the proposal which was published in the Federal Register on 
August 27, 2021 [86 FR 48046]. Copies of the rule were made available 
through the internet by the Department and the Office of the Federal 
Register. The comment period ended September 27, 2021.

Analysis of Comments

    Three comments were received in response to the proposed rule. Two

[[Page 72151]]

comments were received that were determined to be immaterial to the 
topic.
    One commenter questioned if one state, Georgia, produces half of 
the peanuts in the United States, why do they have a disproportionate 
say in the promotion of peanuts on the Board? Shouldn't we be amending 
the Board to better represent the actual production of peanuts in the 
U.S., instead of assisting the 32 states who barely number more than 1% 
production?
    Research and promotion programs are well established as a way for 
producers, importers, handlers, and any other industry member to raise 
funds for generic product promotion of a commodity. The Board was 
established consisting of producers from peanut-producing States. The 
Secretary of Agriculture appoints members to the Board from nominees 
submitted by the industry according to regulations in its Order.
    Membership on the Board allows for one member and one alternate 
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. Minor peanut-
producing states collectively have one at-large member and one 
alternate, who are producers, appointed from nominations submitted by 
certified peanut producer organizations within minor peanut-producing 
states or from other certified farm organizations that include peanut 
producers as part of their membership. Georgia is currently represented 
by a member and alternate on the Board. Accordingly, no changes were 
made to the rule as proposed, based on the comments received.
    After consideration of all relevant material presented, including 
the information and recommendations submitted by the Board, the 
comments received, and other available information, AMS finds that this 
rule, as hereinafter set forth, is consistent with and will effectuate 
the purposes of the 1996 Act.

List of Subjects in 7 CFR Part 1216

    Administrative practice and procedure, Advertising, Agricultural 
research, Information, Marketing agreements, Peanuts, Reporting and 
recordkeeping requirements.

    For reasons set forth in the preamble, Agricultural Marketing 
Service amends 7 CFR part 1216 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 and 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 that 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.
* * * * *

Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2021-27513 Filed 12-20-21; 8:45 am]
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