Change in Minimum Quality and Handling Standards for Domestic and Imported Peanuts Marketed in the United States, 44043-44046 [05-15167]
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44043
Rules and Regulations
Federal Register
Vol. 70, No. 146
Monday, August 1, 2005
This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents. Prices of
new books are listed in the first FEDERAL
REGISTER issue of each week.
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 996
Change in Minimum Quality and
Handling Standards for Domestic and
Imported Peanuts Marketed in the
United States
Agricultural Marketing Service,
USDA.
ACTION: Final rule.
AGENCY:
SUMMARY: This rule changes the peanut
quality and handling standards
(Standards) to require that domestic and
imported peanuts be dried to 18 percent
moisture or less prior to inspection and
to 10.49 percent or less prior to storing
or milling. Virginia-type peanuts used
for seed must be dried to 18 percent or
less prior to inspection and to 11.49
percent or less prior to storing or
milling. The Standards and the Peanut
Standards Board (Board) were
established by the Department of
Agriculture (USDA), pursuant to section
1308 of the Farm Security and Rural
Investment Act of 2002. The Board
suggested changing the peanut quality
and handling standards to allow
handlers and importers to receive or
acquire high moisture peanuts to
promote the development of new drying
technologies, increase efficiencies, and
reduce costs to the industry.
DATES: Effective August 2, 2005.
FOR FURTHER INFORMATION CONTACT:
Dawana J. Clark or Kenneth G. Johnson,
DC Marketing Field Office, Marketing
Order Administration Branch, Fruit and
Vegetable Programs, AMS, USDA;
Telephone (301) 734–5243, Fax: (301)
734–5275; or George J. Kelhart,
Technical Advisor, Marketing Order
Administration Branch, Fruit and
Vegetable Programs, AMS, USDA, 1400
Independence Avenue SW., Stop 0237,
14:24 Jul 29, 2005
This final
rule is issued under section 1308 of the
Farm Security and Rural Investment Act
of 2002 (Pub. L. 107–171), 7 U.S.C.
7958, hereinafter referred to as the
‘‘Farm Bill.’’
This final rule has been determined to
be not significant for purposes of
Executive Order 12866 and has not been
reviewed by the Office of Management
and Budget.
This final 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.
SUPPLEMENTARY INFORMATION:
[Docket No. FV05–996–2 FR]
VerDate jul<14>2003
Washington, DC 20250–0237;
Telephone (202) 720–2491, Fax: (202)
720–8938; or E-mail:
dawana.clark@usda.gov,
kenneth.johnson@usda.gov or
george.kelhart@usda.gov.
Small businesses may request
information on complying with this rule
by contacting Jay Guerber, Marketing
Order Administration Branch, Fruit and
Vegetable Programs, AMS, USDA, 1400
Independence Avenue, SW., STOP
0237, Washington, DC 20250–0237;
Telephone: (202) 720–2491, Fax: (202)
720–8938, or E-mail:
jay.guerber@usda.gov.
Jkt 205001
Background
Section 1308 of the Farm Bill requires
that USDA take several actions with
regard to peanuts marketed in the
United States. These include ensuring
mandatory inspection on all peanuts
marketed in the United States;
establishing the Board comprised of
producers and industry representatives
to advise USDA; developing and
implementing peanut quality and
handling standards; and modifying
those quality and handling standards
when needed. An interim final rule was
published in the Federal Register (67
FR 57129) on September 9, 2002,
terminating the previous peanut
programs and establishing standards in
part 996 to insure the continued
inspection of 2002 crop year peanuts
and subsequent crop year peanuts, 2001
crop year peanuts not yet inspected, and
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2001 crop year failing peanuts that had
not yet met disposition standards.
The initial Board was selected and
announced on December 5, 2002. A
final rule finalizing the interim final
rule was published in the Federal
Register (68 FR 1145) on January 9,
2003, to continue requiring all domestic
and imported peanuts marketed in the
United States to be handled consistent
with the handling standards and
officially inspected against the quality
standards of the new program. The
peanut quality and handling standards
were later revised in rules published in
the Federal Register (68 FR 46919,
August 7, 2003, and 68 FR 53490,
September 11, 2003). The provisions of
this program continue in force and
effect until modified, suspended, or
terminated.
Pursuant to the Farm Bill, USDA has
consulted with Board members in its
review of the handling and quality
standards for the 2005 and subsequent
crop years. The quality and handling
standards are intended to assure that
satisfactory quality and wholesome
peanuts are used in the domestic and
import peanut markets. All peanuts
intended for human consumption must
be officially inspected and graded by the
Federal or Federal-State Inspection
Service and, if necessary, undergo
chemical testing by a USDA laboratory
or a private laboratory approved by
USDA.
Under the Standards, § 996.30(b)
Moisture. specifies ‘‘No handler or
importer shall receive or acquire farmers
stock peanuts for subsequent
disposition to human consumption
outlets containing more than 10.49
percent moisture: Provided, That
peanuts of a higher moisture may be
received and dried to not more than
10.49 percent moisture prior to storing
or milling: And Provided further, That
Virginia-type peanuts used for seed may
be received or acquired containing up to
11.49 percent moisture.’’
High Moisture peanuts are farmers
stock peanuts that have a moisture
content, when harvested, in excess of
10.49 percent moisture. In order to
ensure that high moisture peanuts are
dried to or below 10.49 percent
moisture, growers must dry the peanuts
on individual wagons/trailers. Often
farmers stock peanuts are dried, taken to
a sheller or handler, inspected and
found to still be too high in moisture
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Federal Register / Vol. 70, No. 146 / Monday, August 1, 2005 / Rules and Regulations
content, and must then be returned for
additional drying at the grower’s farm,
at a handler/buying point facility, or at
another location. Not all buying points,
especially those in very rural locations,
have drying facilities. This results in
inefficiencies and added costs.
Handlers may receive high moisture
peanuts, but cannot acquire them.
Peanuts that are received cannot be
mixed, commingled, or otherwise lose
their identity. Accordingly, any high
moisture deliveries from a producer
cannot be mixed with other high
moisture deliveries. However, the
inability to commingle high moisture
peanut deliveries for drying slows
producer deliveries and raises drying
costs. It also raises inspection costs
because the peanuts need to be
inspected a second time to verify
moisture levels prior to handler
acquisition.
In response to requests from industry
representatives and the Board, USDA
allowed a trial relaxation in incoming
peanut requirements for the 2004 crop
year only. The Standards continued to
require that farmers stock peanuts be
dried to 10.49 percent moisture or less
before storing or milling. However,
wagonloads or lots of farmers stock
peanuts grading between 10.50 and
18.00 percent moisture could be
commingled at the handler/buying point
facilities and bulk dried by handlers, in
agreement with each producer of the
wagonloads or lots being commingled.
An 18 percent moisture limit recognizes
the difficulties in the Inspection
Service’s use of its shelling equipment
for peanuts with more than 18 percent
moisture. After drying, a second
inspection for moisture only was
performed by Federal-State inspectors
and documented accordingly. When the
commingled lot was presented for the
second ‘‘moisture only’’ inspection, the
buying point was required to provide
documentation identifying the specific
lots or wagonloads which constituted
the commingled lot. In the event that a
commingled lot, after bulk drying, still
did not meet the 10.49 percent moisture
requirement, the lot could be further
dried and re-inspected until the lot
contained no more than 10.49 percent
moisture.
This temporary relaxation was the
culmination of several meetings and
requests from the Board and the peanut
industry to bring the high moisture
issue to conclusion. The Board made
several recommendations regarding high
moisture peanuts in 2003 and 2004.
However, prior to the Board’s
discussion of any changes for 2005 crop
peanuts, the USDA’s Farm Service
Agency (FSA) identified an FSA
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14:24 Jul 29, 2005
Jkt 205001
program issue requiring resolution
before implementation of any relaxation
to the moisture standard. Under FSA’s
loan program (7 CFR part 1421), high
moisture peanuts must be segregated by
each producer and dried to a moisture
content not exceeding 10.49 percent. If
high moisture peanuts from more than
one producer are commingled and batch
dried, the quality, quantity, and identity
of each participating producer’s peanuts
would be lost. As such, those high
moisture peanuts would not be eligible
for FSA marketing assistance loans
(MAL) or loan deficiency payments
(LDP).
These concerns have been resolved
through a formulation of a revised FSA
Form 1007 (a combined inspection
certificate and calculation worksheet)
that identifies and tracks high moisture
peanut shipments. Inspection
procedures and reporting requirements
will remain unchanged. The original
peanut inspection notesheet/certificate
will accompany the FSA Form 1007
with the converted high moisture factors
from the high moisture conversion
charts provided by the National Peanut
Research Laboratory (NPRL). The NPRL
conversion charts provide a guide for
varying levels of high moisture peanuts
received and the converted grade factor
equivalents when dried down to an
acceptable level without having to
conduct another inspection on the dried
down peanuts.
The Board met on March 16, 2005,
and unanimously recommended that
§ 996.30(b) be modified so that handlers
and importers may receive or acquire
farmers stock peanuts for subsequent
disposition to human consumption
outlets containing more than 18 percent
moisture: Provided, That farmers stock
peanuts be dried to not more than 18
percent moisture prior to inspection and
grading. If the sound mature kernel and
sound splits grade is 60 or below on a
lot of peanuts that contains moisture
between 10.49 and 18 percent, the lot of
peanuts shall be dried to a moisture
level of 10.49 or below prior to
inspection and grading. Valencia
peanuts may only be inspected at
moisture levels 10.49 and below. All
farmers stock peanuts must be dried to
not more than 10.49 percent moisture
prior to storing or milling: Provided,
That Virginia-type peanuts used for seed
must be dried to 18 percent or less prior
to inspection and to 11.49 percent or
less prior to storing or milling.
On March 23, 2005, the Board’s
implementation sub-committee
recommended the removal from the
Board’s recommendation of the
moisture requirement on peanuts with a
sound mature kernel plus sound splits
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grade of 60 or below because this
requirement was not needed.
According to a number of Board
members, allowing handlers and
importers to receive high moisture
peanuts will make a significant
difference in the efficient acquisition
and warehousing of farmers’ stock
peanuts each fall. Allowing the
acquisition of high moisture peanuts
will allow handlers to accumulate a
number of loads and batch dry them at
the same time. These Board members
indicated that this will speed up drying,
grading, and movement of peanuts at
harvest, which will be especially
important when adverse weather
conditions during harvest could cause
peanut quality to deteriorate. According
to some Board members, it will also
reduce drying and inspection costs.
Therefore under this final rule,
domestic and imported peanuts must be
dried to 18 percent or less prior to
inspection and 10.49 percent or less
prior to storing or milling. Virginia-type
peanuts used for seed must be dried to
18 percent or less prior to inspection
and to 11.49 percent or less prior to
storing or milling.
Final Regulatory Flexibility Analysis
Pursuant to requirements set forth in
the Regulatory Flexibility Analysis Act
(RFA) the Agricultural Marketing
Service (AMS) has considered the
economic impact of this action on small
entities. Accordingly, AMS had
prepared this final regulatory flexibility
analysis.
The purpose of the RFA is to fit
regulatory actions to the scale of
business subject to such actions in order
that small businesses will not be unduly
or disproportionately burdened. There
are approximately 55 peanut shelling
entities, operating approximately 70
shelling plants, and 25 importers subject
to regulation under the peanut program.
An estimated two-thirds of the handlers
and nearly all of the importers may be
classified as small entities, based on
documents and reports received by
USDA. Small agricultural service firms,
which include handlers and importers,
are defined by the Small Business
Administration (13 CFR 121.201), as
those having annual receipts of less than
$6,000,000.
An approximation of the number of
peanut farms that could be considered
small agricultural businesses under the
SBA definition (less than $750,000 in
annual receipts) can be obtained from
the 2002 Agricultural Census, which is
the most recent information on the
number of farms categorized by size.
There were 7,551 peanut farms with
annual agricultural sales valued at less
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Federal Register / Vol. 70, No. 146 / Monday, August 1, 2005 / Rules and Regulations
than $500,000 in 2002, representing 87
percent of the total number of peanut
farms in the U.S. (8,640). Since the
Agricultural Census does not use
$750,000 in sales as a category,
$500,000 in sales is the closest
approximation. Assuming that most of
the sales from those farms are
attributable to peanuts, the percentage
of small peanut farms in 2002 (less than
$750,000 in sales) was likely a few
percentage points higher than 87
percent, and may have shifted by a
small amount since 2002. Thus, the
proportion of small peanut farms is
likely to be close to 90 percent.
According to the National
Agricultural Statistics Service (NASS),
the two-year average peanut production
for the 2003 and 2004 crop years was
4.203 billion pounds, harvested from
average acreage of 1.353 million,
yielding an average of 3,106 pounds per
acre. The average value of production
for the two-year period was $816.904
million. The average grower price over
the two-year period was $0.194 per
pound, and the average value per
harvested acre was $604. Dividing the
two year average value of production
($816.904 million) by the estimated
8,640 peanut farms (2002 Agricultural
Census) yields an estimated average
peanut sales revenue per farm of
approximately $94,440. Average peanut
acreage per farm is 156.
The Agricultural Census provides
data on the value of annual sales of all
agricultural products from peanut farms
in terms of ranges. The value of annual
agricultural product sales of the median
peanut farm in 2002 was between
$50,000 and $99,999. The median is the
midpoint ranging from the largest to the
smallest.
Several producers may own a single
farm jointly, or, conversely, a producer
may own several farms. In the peanut
industry, there is, on average, more than
one producer per farm. Dividing the two
year average value of production of
$816.904 million by 14,186 peanut
producers (Farm Service Agency 2004
estimate) results in an estimate of
average revenue per producer of
approximately $57,585.
The current 14 custom blanchers, 8
custom remillers, 4 oil mill operators, 4
USDA and 15 USDA-approved private
chemical (aflatoxin) laboratories are
subject to this rule to the extent that
they must comply with reconditioning
provisions under § 996.50 and reporting
and recordkeeping requirements under
§ 996.71.
These requirements are applied
uniformly to these entities, whether
large or small. In addition, there are
currently 10 State inspection programs
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14:24 Jul 29, 2005
Jkt 205001
(Inspection Service) that will perform
inspections under this peanut program.
Importers of peanuts cover a broad
range of business entities, including
fresh and processed food handlers and
commodity brokers who buy
agricultural products on behalf of
others. Some large, corporate handlers
are also importers of peanuts. AMS is
not aware of any peanut producers who
imported peanuts during any of the
recent quota years.
The majority of peanut importers have
annual receipts under $6,000,000. Some
importers use customs brokers’ import
services. These brokers are usually held
accountable by the importer to see that
entry requirements under § 996.60 and
reporting and recordkeeping
requirements under § 996.71 are met.
These reporting requirements are not
applied disproportionately to small
customs brokers.
In view of the foregoing, it can be
concluded that the majority of peanut
producers, handlers, importers, and
above-mentioned entities may be
classified as small businesses.
This final rule changes the minimum
peanut quality and handling standards
so that handlers may receive peanuts
with a moisture content of up to 18
percent. The Board suggested changing
the minimum peanut quality and
handling standards to allow handlers to
receive high moisture peanuts to
promote the development of new drying
technologies, increase efficiencies and
reduce costs to the industry.
USDA has considered alternatives to
the suggested change to the quality and
handling standards. The Farm Bill
requires USDA to consult with the
Board on these standards. An alternative
would be to continue the current
standards for the 2005 crop year. The
current Board’s recommended change to
the handling and quality standards was
raised during last year’s USDA/Board
standards review but was tabled until an
inter-agency collaboration (AMS and
FSA) could coordinate their respective
peanut handling and loan regulations.
However, because of the anticipated
benefits of the recommended change,
USDA believes the implementation of
the Board’s suggested change is
preferable to continuing without
change. The Board’s meeting was open
to a wide audience and all interested
persons were invited to attend the
meeting and provide input.
USDA has not identified any relevant
Federal rules that duplicate, overlap, or
conflict with this rule. A small business
guide on complying with AMS fresh
fruit, vegetable, and specialty crop
programs similar to this peanut program
may be viewed at the following Web
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44045
site: https://www.ams.usda.gov/fv/
moab.html. Any questions about the
compliance guide or compliance with
this program should be sent to Jay
Guerber at the previously mentioned
address in the FOR FURTHER INFORMATION
CONTACT section.
Information Collection
The Farm Bill specifies in section
1601(c)(2)(A) that the standards
established pursuant to it, may be
implemented without regard to the
Paperwork Reduction Act of 1995 (44
U.S.C. chapter 35). Furthermore, this
rule does not change the existing
information collection burden.
Section 1601 of the Farm Bill also
provides that promulgation of or
amendments to the standards may be
implemented without extending
interested parties an opportunity to
comment. However, due to the nature of
the proposed changes, interested parties
were provided 15 days to file comments.
The proposed rule concerning these
changes was published in the Federal
Register (70 FR 35562) on June 21, 2005.
The rule was posted on the AMS Web
site specified above and was available
through the internet by the Office of the
Federal Register. The proposed rule
provided that comments received by
July 6, 2005, would be considered in
finalizing the rulemaking action.
A total of four comments were
received from a peanut shellers
association, a peanut product
manufacturers association, a peanut
growers association, and the Georgia
Peanut Commission. Three comments
were in support of the proposed rule.
The comment from the peanut
commission stated that it wanted to be
certain that grower interests were
protected and that any proposed
changes would not be detrimental to
growers. This rule would allow handlers
and importers to receive or acquire high
moisture peanuts thereby promoting the
development of new drying
technologies, increasing efficiencies and
reducing costs to the overall industry.
This comment also mentioned an
additional concern pertaining to
comparable loan calculations on
peanuts that have been dried to a
suitable loan level. As stated previously
in this action, FSA has revised its Form
1007 to identify and track high moisture
peanut shipments, including green
peanuts. Accordingly, no changes are
made in the provisions as proposed.
It also is 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 producers and handlers are
preparing for the 2005 crop year, which
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44046
Federal Register / Vol. 70, No. 146 / Monday, August 1, 2005 / Rules and Regulations
starts September 1. Further, handlers are
aware of this rule, which was
recommended at a public meeting. Also,
a 15-day comment period was provided
for in the proposed rule and four
comments were received as discussed
herein.
List of Subjects 7 CFR Part 996
Food grades and standards, Imports,
Peanuts, Reporting and recordkeeping
requirements.
For the reasons set forth in the
preamble, 7 CFR part 996 is amended as
follows:
I
PART 996—MINIMUM QUALITY AND
HANDLING STANDARDS FOR
DOMESTIC AND IMPORTED PEANUTS
MARKETED IN THE UNITED STATES
1. The authority citation for 7 CFR part
996 continues to read as follows:
I
Authority: 7 U.S.C. 7958.
2. Paragraph (b) of § 996.30 is revised
to read as follows:
I
§ 996.30
Incoming quality standards.
(a) * * *
(b) Moisture. Domestic and imported
peanuts shall be dried to 18 percent or
less prior to inspection and to 10.49
percent or less prior to storing or
milling: Provided, That Virginia-type
peanuts used for seed shall be dried to
18 percent or less prior to inspection
and to 11.49 percent or less prior to
storing or milling.
*
*
*
*
*
Dated: July 27, 2005.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing
Service.
[FR Doc. 05–15167 Filed 7–27–05; 4:10 pm]
BILLING CODE 3410–02–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. FAA–2005–21054; Directorate
Identifier 2005–NM–054–AD; Amendment
39–14205; AD 2005–15–16]
RIN 2120–AA64
Airworthiness Directives; AvCraft
Dornier Model 328–300 Airplanes
Federal Aviation
Administration (FAA), Department of
Transportation (DOT).
ACTION: Final rule.
AGENCY:
SUMMARY: The FAA is adopting a new
airworthiness directive (AD) for certain
VerDate jul<14>2003
14:24 Jul 29, 2005
Jkt 205001
AvCraft Dornier Model 328–300
airplanes. This AD requires modifying
the electrical wiring of the fuel pumps;
installing insulation at the flow control
and shut-off valves, and other
components of the environmental
control system; installing markings at
fuel wiring harnesses; replacing the
wiring harness of the auxiliary fuel
system with a new wiring harness; and
installing insulated couplings in the fuel
system; as applicable. This AD also
requires revising the Airworthiness
Limitations section of the Instructions
for Continued Airworthiness to
incorporate new inspections of the fuel
tank system. This AD is prompted by
the results of fuel system reviews
conducted by the airplane
manufacturer. We are issuing this AD to
reduce the potential of ignition sources
inside fuel tanks, which, in combination
with flammable fuel vapors, could result
in fuel tank explosions and consequent
loss of the airplane.
DATES: This AD becomes effective
September 6, 2005.
The incorporation by reference of
certain publications listed in the AD is
approved by the Director of the Federal
Register as of September 6, 2005.
ADDRESSES: For service information
identified in this AD, contact AvCraft
Aerospace GmbH, P.O. Box 1103, D–
82230 Wessling, Germany.
Docket: The AD docket contains the
proposed AD, comments, and any final
disposition. You can examine the AD
docket on the Internet at https://
dms.dot.gov, or in person at the Docket
Management Facility office between 9
a.m. and 5 p.m., Monday through
Friday, except Federal holidays. The
Docket Management Facility office
(telephone (800) 647–5227) is located on
the plaza level of the Nassif Building at
the U.S. Department of Transportation,
400 Seventh Street, SW., room PL–401,
Washington, DC. This docket number is
FAA–2005–21054; the directorate
identifier for this docket is 2005–NM–
054–AD.
FOR FURTHER INFORMATION CONTACT: Dan
Rodina, Aerospace Engineer,
International Branch, ANM–116, FAA,
Transport Airplane Directorate, 1601
Lind Avenue, SW., Renton, Washington
98055–4056; telephone (425) 227–2125;
fax (425) 227–1149.
SUPPLEMENTARY INFORMATION: The FAA
proposed to amend 14 CFR part 39 with
an AD for certain AvCraft Dornier
Model 328–300 airplanes. That action,
published in the Federal Register on
April 26, 2005 (70 FR 21346), proposed
to require modifying the electrical
wiring of the fuel pumps; installing
insulation at the flow control and shut-
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Fmt 4700
Sfmt 4700
off valves, and other components of the
environmental control system; installing
markings at fuel wiring harnesses;
replacing the wiring harness of the
auxiliary fuel system with a new wiring
harness; and installing insulated
couplings in the fuel system; as
applicable. That action also proposed to
require revising the Airworthiness
Limitations section of the Instructions
for Continued Airworthiness to
incorporate new inspections of the fuel
tank system.
Comments
We provided the public the
opportunity to participate in the
development of this AD. We have
considered the single comment that was
submitted on the proposed AD.
Provide for Incorporation of Temporary
Revision By Normal Revision Process
The commenter requests that we
revise paragraph (h) of the proposed AD
to provide for incorporation of AvCraft
Temporary Revision (TR) ALD–028,
dated October 15, 2003, into the body of
the Airworthiness Limitations section of
the Instructions for Continued
Airworthiness document through the
normal revision process. The
commenter notes that the proposed AD,
as written, would require the TR to
remain in the Airworthiness Limitations
section forever. However, once the
information in the TR is incorporated
into the Airworthiness Limitations
section through the normal revision
process, the TR document will be
unnecessary.
We agree. We have revised paragraph
(h) of this AD accordingly, and added a
new note, Note 1, to clarify the revised
language in paragraph (h). These
changes will allow the TR to be
removed from the Airworthiness
Limitations once the information in the
TR has been incorporated into the
Airworthiness Limitations by the
normal revision process.
Explanation of Change to Applicability
We have revised the applicability of
this AD to identify model designations
as published in the most recent type
certificate data sheet for the affected
model.
Explanation of Changes to Tables 1 and
2 of Proposed AD
Tables 1 and 2 of the proposed AD
incorrectly referred to paragraphs that
do not exist in the referenced service
bulletins. We have revised Tables 1 and
2 of this AD to refer to the correct
paragraphs in the referenced service
bulletins.
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]]>Agencies
[Federal Register Volume 70, Number 146 (Monday, August 1, 2005)]
[Rules and Regulations]
[Pages 44043-44046]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-15167]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
week.
========================================================================
Federal Register / Vol. 70, No. 146 / Monday, August 1, 2005 / Rules
and Regulations
[[Page 44043]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 996
[Docket No. FV05-996-2 FR]
Change in Minimum Quality and Handling Standards for Domestic and
Imported Peanuts Marketed in the United States
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: This rule changes the peanut quality and handling standards
(Standards) to require that domestic and imported peanuts be dried to
18 percent moisture or less prior to inspection and to 10.49 percent or
less prior to storing or milling. Virginia-type peanuts used for seed
must be dried to 18 percent or less prior to inspection and to 11.49
percent or less prior to storing or milling. The Standards and the
Peanut Standards Board (Board) were established by the Department of
Agriculture (USDA), pursuant to section 1308 of the Farm Security and
Rural Investment Act of 2002. The Board suggested changing the peanut
quality and handling standards to allow handlers and importers to
receive or acquire high moisture peanuts to promote the development of
new drying technologies, increase efficiencies, and reduce costs to the
industry.
DATES: Effective August 2, 2005.
FOR FURTHER INFORMATION CONTACT: Dawana J. Clark or Kenneth G. Johnson,
DC Marketing Field Office, Marketing Order Administration Branch, Fruit
and Vegetable Programs, AMS, USDA; Telephone (301) 734-5243, Fax: (301)
734-5275; or George J. Kelhart, Technical Advisor, Marketing Order
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400
Independence Avenue SW., Stop 0237, Washington, DC 20250-0237;
Telephone (202) 720-2491, Fax: (202) 720-8938; or E-mail:
dawana.clark@usda.gov, kenneth.johnson@usda.gov or
george.kelhart@usda.gov.
Small businesses may request information on complying with this
rule by contacting Jay Guerber, Marketing Order Administration Branch,
Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW.,
STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, Fax:
(202) 720-8938, or E-mail: jay.guerber@usda.gov.
SUPPLEMENTARY INFORMATION: This final rule is issued under section 1308
of the Farm Security and Rural Investment Act of 2002 (Pub. L. 107-
171), 7 U.S.C. 7958, hereinafter referred to as the ``Farm Bill.''
This final rule has been determined to be not significant for
purposes of Executive Order 12866 and has not been reviewed by the
Office of Management and Budget.
This final 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.
Background
Section 1308 of the Farm Bill requires that USDA take several
actions with regard to peanuts marketed in the United States. These
include ensuring mandatory inspection on all peanuts marketed in the
United States; establishing the Board comprised of producers and
industry representatives to advise USDA; developing and implementing
peanut quality and handling standards; and modifying those quality and
handling standards when needed. An interim final rule was published in
the Federal Register (67 FR 57129) on September 9, 2002, terminating
the previous peanut programs and establishing standards in part 996 to
insure the continued inspection of 2002 crop year peanuts and
subsequent crop year peanuts, 2001 crop year peanuts not yet inspected,
and 2001 crop year failing peanuts that had not yet met disposition
standards.
The initial Board was selected and announced on December 5, 2002. A
final rule finalizing the interim final rule was published in the
Federal Register (68 FR 1145) on January 9, 2003, to continue requiring
all domestic and imported peanuts marketed in the United States to be
handled consistent with the handling standards and officially inspected
against the quality standards of the new program. The peanut quality
and handling standards were later revised in rules published in the
Federal Register (68 FR 46919, August 7, 2003, and 68 FR 53490,
September 11, 2003). The provisions of this program continue in force
and effect until modified, suspended, or terminated.
Pursuant to the Farm Bill, USDA has consulted with Board members in
its review of the handling and quality standards for the 2005 and
subsequent crop years. The quality and handling standards are intended
to assure that satisfactory quality and wholesome peanuts are used in
the domestic and import peanut markets. All peanuts intended for human
consumption must be officially inspected and graded by the Federal or
Federal-State Inspection Service and, if necessary, undergo chemical
testing by a USDA laboratory or a private laboratory approved by USDA.
Under the Standards, Sec. 996.30(b) Moisture. specifies ``No
handler or importer shall receive or acquire farmers stock peanuts for
subsequent disposition to human consumption outlets containing more
than 10.49 percent moisture: Provided, That peanuts of a higher
moisture may be received and dried to not more than 10.49 percent
moisture prior to storing or milling: And Provided further, That
Virginia-type peanuts used for seed may be received or acquired
containing up to 11.49 percent moisture.''
High Moisture peanuts are farmers stock peanuts that have a
moisture content, when harvested, in excess of 10.49 percent moisture.
In order to ensure that high moisture peanuts are dried to or below
10.49 percent moisture, growers must dry the peanuts on individual
wagons/trailers. Often farmers stock peanuts are dried, taken to a
sheller or handler, inspected and found to still be too high in
moisture
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content, and must then be returned for additional drying at the
grower's farm, at a handler/buying point facility, or at another
location. Not all buying points, especially those in very rural
locations, have drying facilities. This results in inefficiencies and
added costs.
Handlers may receive high moisture peanuts, but cannot acquire
them. Peanuts that are received cannot be mixed, commingled, or
otherwise lose their identity. Accordingly, any high moisture
deliveries from a producer cannot be mixed with other high moisture
deliveries. However, the inability to commingle high moisture peanut
deliveries for drying slows producer deliveries and raises drying
costs. It also raises inspection costs because the peanuts need to be
inspected a second time to verify moisture levels prior to handler
acquisition.
In response to requests from industry representatives and the
Board, USDA allowed a trial relaxation in incoming peanut requirements
for the 2004 crop year only. The Standards continued to require that
farmers stock peanuts be dried to 10.49 percent moisture or less before
storing or milling. However, wagonloads or lots of farmers stock
peanuts grading between 10.50 and 18.00 percent moisture could be
commingled at the handler/buying point facilities and bulk dried by
handlers, in agreement with each producer of the wagonloads or lots
being commingled. An 18 percent moisture limit recognizes the
difficulties in the Inspection Service's use of its shelling equipment
for peanuts with more than 18 percent moisture. After drying, a second
inspection for moisture only was performed by Federal-State inspectors
and documented accordingly. When the commingled lot was presented for
the second ``moisture only'' inspection, the buying point was required
to provide documentation identifying the specific lots or wagonloads
which constituted the commingled lot. In the event that a commingled
lot, after bulk drying, still did not meet the 10.49 percent moisture
requirement, the lot could be further dried and re-inspected until the
lot contained no more than 10.49 percent moisture.
This temporary relaxation was the culmination of several meetings
and requests from the Board and the peanut industry to bring the high
moisture issue to conclusion. The Board made several recommendations
regarding high moisture peanuts in 2003 and 2004. However, prior to the
Board's discussion of any changes for 2005 crop peanuts, the USDA's
Farm Service Agency (FSA) identified an FSA program issue requiring
resolution before implementation of any relaxation to the moisture
standard. Under FSA's loan program (7 CFR part 1421), high moisture
peanuts must be segregated by each producer and dried to a moisture
content not exceeding 10.49 percent. If high moisture peanuts from more
than one producer are commingled and batch dried, the quality,
quantity, and identity of each participating producer's peanuts would
be lost. As such, those high moisture peanuts would not be eligible for
FSA marketing assistance loans (MAL) or loan deficiency payments (LDP).
These concerns have been resolved through a formulation of a
revised FSA Form 1007 (a combined inspection certificate and
calculation worksheet) that identifies and tracks high moisture peanut
shipments. Inspection procedures and reporting requirements will remain
unchanged. The original peanut inspection notesheet/certificate will
accompany the FSA Form 1007 with the converted high moisture factors
from the high moisture conversion charts provided by the National
Peanut Research Laboratory (NPRL). The NPRL conversion charts provide a
guide for varying levels of high moisture peanuts received and the
converted grade factor equivalents when dried down to an acceptable
level without having to conduct another inspection on the dried down
peanuts.
The Board met on March 16, 2005, and unanimously recommended that
Sec. 996.30(b) be modified so that handlers and importers may receive
or acquire farmers stock peanuts for subsequent disposition to human
consumption outlets containing more than 18 percent moisture: Provided,
That farmers stock peanuts be dried to not more than 18 percent
moisture prior to inspection and grading. If the sound mature kernel
and sound splits grade is 60 or below on a lot of peanuts that contains
moisture between 10.49 and 18 percent, the lot of peanuts shall be
dried to a moisture level of 10.49 or below prior to inspection and
grading. Valencia peanuts may only be inspected at moisture levels
10.49 and below. All farmers stock peanuts must be dried to not more
than 10.49 percent moisture prior to storing or milling: Provided, That
Virginia-type peanuts used for seed must be dried to 18 percent or less
prior to inspection and to 11.49 percent or less prior to storing or
milling.
On March 23, 2005, the Board's implementation sub-committee
recommended the removal from the Board's recommendation of the moisture
requirement on peanuts with a sound mature kernel plus sound splits
grade of 60 or below because this requirement was not needed.
According to a number of Board members, allowing handlers and
importers to receive high moisture peanuts will make a significant
difference in the efficient acquisition and warehousing of farmers'
stock peanuts each fall. Allowing the acquisition of high moisture
peanuts will allow handlers to accumulate a number of loads and batch
dry them at the same time. These Board members indicated that this will
speed up drying, grading, and movement of peanuts at harvest, which
will be especially important when adverse weather conditions during
harvest could cause peanut quality to deteriorate. According to some
Board members, it will also reduce drying and inspection costs.
Therefore under this final rule, domestic and imported peanuts must
be dried to 18 percent or less prior to inspection and 10.49 percent or
less prior to storing or milling. Virginia-type peanuts used for seed
must be dried to 18 percent or less prior to inspection and to 11.49
percent or less prior to storing or milling.
Final Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Analysis Act (RFA) the Agricultural Marketing Service (AMS) has
considered the economic impact of this action on small entities.
Accordingly, AMS had prepared this final regulatory flexibility
analysis.
The purpose of the RFA is to fit regulatory actions to the scale of
business subject to such actions in order that small businesses will
not be unduly or disproportionately burdened. There are approximately
55 peanut shelling entities, operating approximately 70 shelling
plants, and 25 importers subject to regulation under the peanut
program. An estimated two-thirds of the handlers and nearly all of the
importers may be classified as small entities, based on documents and
reports received by USDA. Small agricultural service firms, which
include handlers and importers, are defined by the Small Business
Administration (13 CFR 121.201), as those having annual receipts of
less than $6,000,000.
An approximation of the number of peanut farms that could be
considered small agricultural businesses under the SBA definition (less
than $750,000 in annual receipts) can be obtained from the 2002
Agricultural Census, which is the most recent information on the number
of farms categorized by size. There were 7,551 peanut farms with annual
agricultural sales valued at less
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than $500,000 in 2002, representing 87 percent of the total number of
peanut farms in the U.S. (8,640). Since the Agricultural Census does
not use $750,000 in sales as a category, $500,000 in sales is the
closest approximation. Assuming that most of the sales from those farms
are attributable to peanuts, the percentage of small peanut farms in
2002 (less than $750,000 in sales) was likely a few percentage points
higher than 87 percent, and may have shifted by a small amount since
2002. Thus, the proportion of small peanut farms is likely to be close
to 90 percent.
According to the National Agricultural Statistics Service (NASS),
the two-year average peanut production for the 2003 and 2004 crop years
was 4.203 billion pounds, harvested from average acreage of 1.353
million, yielding an average of 3,106 pounds per acre. The average
value of production for the two-year period was $816.904 million. The
average grower price over the two-year period was $0.194 per pound, and
the average value per harvested acre was $604. Dividing the two year
average value of production ($816.904 million) by the estimated 8,640
peanut farms (2002 Agricultural Census) yields an estimated average
peanut sales revenue per farm of approximately $94,440. Average peanut
acreage per farm is 156.
The Agricultural Census provides data on the value of annual sales
of all agricultural products from peanut farms in terms of ranges. The
value of annual agricultural product sales of the median peanut farm in
2002 was between $50,000 and $99,999. The median is the midpoint
ranging from the largest to the smallest.
Several producers may own a single farm jointly, or, conversely, a
producer may own several farms. In the peanut industry, there is, on
average, more than one producer per farm. Dividing the two year average
value of production of $816.904 million by 14,186 peanut producers
(Farm Service Agency 2004 estimate) results in an estimate of average
revenue per producer of approximately $57,585.
The current 14 custom blanchers, 8 custom remillers, 4 oil mill
operators, 4 USDA and 15 USDA-approved private chemical (aflatoxin)
laboratories are subject to this rule to the extent that they must
comply with reconditioning provisions under Sec. 996.50 and reporting
and recordkeeping requirements under Sec. 996.71.
These requirements are applied uniformly to these entities, whether
large or small. In addition, there are currently 10 State inspection
programs (Inspection Service) that will perform inspections under this
peanut program.
Importers of peanuts cover a broad range of business entities,
including fresh and processed food handlers and commodity brokers who
buy agricultural products on behalf of others. Some large, corporate
handlers are also importers of peanuts. AMS is not aware of any peanut
producers who imported peanuts during any of the recent quota years.
The majority of peanut importers have annual receipts under
$6,000,000. Some importers use customs brokers' import services. These
brokers are usually held accountable by the importer to see that entry
requirements under Sec. 996.60 and reporting and recordkeeping
requirements under Sec. 996.71 are met. These reporting requirements
are not applied disproportionately to small customs brokers.
In view of the foregoing, it can be concluded that the majority of
peanut producers, handlers, importers, and above-mentioned entities may
be classified as small businesses.
This final rule changes the minimum peanut quality and handling
standards so that handlers may receive peanuts with a moisture content
of up to 18 percent. The Board suggested changing the minimum peanut
quality and handling standards to allow handlers to receive high
moisture peanuts to promote the development of new drying technologies,
increase efficiencies and reduce costs to the industry.
USDA has considered alternatives to the suggested change to the
quality and handling standards. The Farm Bill requires USDA to consult
with the Board on these standards. An alternative would be to continue
the current standards for the 2005 crop year. The current Board's
recommended change to the handling and quality standards was raised
during last year's USDA/Board standards review but was tabled until an
inter-agency collaboration (AMS and FSA) could coordinate their
respective peanut handling and loan regulations. However, because of
the anticipated benefits of the recommended change, USDA believes the
implementation of the Board's suggested change is preferable to
continuing without change. The Board's meeting was open to a wide
audience and all interested persons were invited to attend the meeting
and provide input.
USDA has not identified any relevant Federal rules that duplicate,
overlap, or conflict with this rule. A small business guide on
complying with AMS fresh fruit, vegetable, and specialty crop programs
similar to this peanut program may be viewed at the following Web site:
https://www.ams.usda.gov/fv/moab.html. Any questions about the
compliance guide or compliance with this program should be sent to Jay
Guerber at the previously mentioned address in the FOR FURTHER
INFORMATION CONTACT section.
Information Collection
The Farm Bill specifies in section 1601(c)(2)(A) that the standards
established pursuant to it, may be implemented without regard to the
Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35). Furthermore,
this rule does not change the existing information collection burden.
Section 1601 of the Farm Bill also provides that promulgation of or
amendments to the standards may be implemented without extending
interested parties an opportunity to comment. However, due to the
nature of the proposed changes, interested parties were provided 15
days to file comments. The proposed rule concerning these changes was
published in the Federal Register (70 FR 35562) on June 21, 2005. The
rule was posted on the AMS Web site specified above and was available
through the internet by the Office of the Federal Register. The
proposed rule provided that comments received by July 6, 2005, would be
considered in finalizing the rulemaking action.
A total of four comments were received from a peanut shellers
association, a peanut product manufacturers association, a peanut
growers association, and the Georgia Peanut Commission. Three comments
were in support of the proposed rule. The comment from the peanut
commission stated that it wanted to be certain that grower interests
were protected and that any proposed changes would not be detrimental
to growers. This rule would allow handlers and importers to receive or
acquire high moisture peanuts thereby promoting the development of new
drying technologies, increasing efficiencies and reducing costs to the
overall industry. This comment also mentioned an additional concern
pertaining to comparable loan calculations on peanuts that have been
dried to a suitable loan level. As stated previously in this action,
FSA has revised its Form 1007 to identify and track high moisture
peanut shipments, including green peanuts. Accordingly, no changes are
made in the provisions as proposed.
It also is 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 producers and handlers are
preparing for the 2005 crop year, which
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starts September 1. Further, handlers are aware of this rule, which was
recommended at a public meeting. Also, a 15-day comment period was
provided for in the proposed rule and four comments were received as
discussed herein.
List of Subjects 7 CFR Part 996
Food grades and standards, Imports, Peanuts, Reporting and
recordkeeping requirements.
0
For the reasons set forth in the preamble, 7 CFR part 996 is amended as
follows:
PART 996--MINIMUM QUALITY AND HANDLING STANDARDS FOR DOMESTIC AND
IMPORTED PEANUTS MARKETED IN THE UNITED STATES
0
1. The authority citation for 7 CFR part 996 continues to read as
follows:
Authority: 7 U.S.C. 7958.
0
2. Paragraph (b) of Sec. 996.30 is revised to read as follows:
Sec. 996.30 Incoming quality standards.
(a) * * *
(b) Moisture. Domestic and imported peanuts shall be dried to 18
percent or less prior to inspection and to 10.49 percent or less prior
to storing or milling: Provided, That Virginia-type peanuts used for
seed shall be dried to 18 percent or less prior to inspection and to
11.49 percent or less prior to storing or milling.
* * * * *
Dated: July 27, 2005.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 05-15167 Filed 7-27-05; 4:10 pm]
BILLING CODE 3410-02-P
