Minimum Quality and Handling Standards for Domestic and Imported Peanuts Marketed in the United States; Change to the Quality and Handling Requirements, 24082-24085 [2017-10680]
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Federal Register / Vol. 82, No. 100 / Thursday, May 25, 2017 / Proposed Rules
financial statements, and the need to
both reduce financial reserves and
increase its marketing efforts to increase
demand for tart cherries. The Board also
considered not taking this action, but
determined that 2016–17 expenditures
of $2,523,550 were appropriate, and the
recommended assessment rate and
allocation, along with funds from
interest income, block grants, and funds
from reserves, would be adequate to
cover budgeted expenses.
A review of historical information and
preliminary information pertaining to
the upcoming crop year indicates that
the average grower price for the 2016–
17 season could be approximately
$0.348 per pound of tart cherries.
Therefore, the estimated assessment
revenue for the 2016–17 crop year as a
percentage of total grower revenue
would be approximately 2 percent.
This action would not increase the
assessment obligation imposed on
handlers. While assessments impose
some additional costs on handlers, the
costs are minimal and uniform on all
handlers. Some of the costs may be
passed on to producers. However, these
costs would be offset by the benefits
derived by the operation of the
marketing order.
The Board’s meetings were widely
publicized throughout the tart cherry
industry, and all interested persons
were invited to attend the meetings and
participate in Board deliberations on all
issues. Like all Board meetings, the June
23, 2016, and September 8, 2016,
meetings were public meetings, and all
entities, both large and small, were able
to express views on this issue. Finally,
interested persons are invited to submit
comments on this proposed rule,
including the regulatory and
informational impacts of this action on
small businesses.
In accordance with the Paperwork
Reduction Act of 1995 (44 U.S.C.
Chapter 35), the order’s information
collection requirements have been
previously approved by OMB and
assigned OMB No. 0581–0177, Tart
Cherries Grown in the States of
Michigan, New York, Pennsylvania,
Oregon, Utah, Washington, and
Wisconsin. No changes in those
requirements are necessary as a result of
this proposed action. Should any
changes become necessary, they would
be submitted to OMB for approval.
This proposed rule would impose no
additional reporting or recordkeeping
requirements on either small or large
tart cherry handlers. As with all Federal
marketing order programs, reports and
forms are periodically reviewed to
reduce information requirements and
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duplication by industry and public
sector agencies.
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.
USDA has not identified any relevant
Federal rules that duplicate, overlap, or
conflict with this action.
A small business guide on complying
with fruit, vegetable, and specialty crop
marketing agreements and orders may
be viewed at: https://www.ams.usda.gov/
rules-regulations/moa/small-businesses.
Any questions about the compliance
guide should be sent to Richard Lower
at the previously mentioned address in
the FOR FURTHER INFORMATION CONTACT
section.
A 30-day comment period is provided
to allow interested persons to respond
to this proposed rule.
List of Subjects in 7 CFR Part 930
Marketing agreements, Reporting and
recordkeeping requirements, tart
cherries.
For the reasons set forth in the
preamble, 7 CFR part 930 is proposed to
be amended as follows:
PART 930—TART CHERRIES GROWN
IN THE STATES OF MICHIGAN, NEW
YORK, PENNSYLVANIA, OREGON,
UTAH, WASHINGTON, AND
WISCONSIN
1. The authority citation for 7 CFR
part 930 continues to read as follows:
■
Authority: 7 U.S.C. 601–674.
2. Section 930.200 is revised to read
as follows:
■
§ 930.200
Assessment rate.
On and after October 1, 2016, the
assessment rate imposed on handlers
shall be $0.0075 per pound of tart
cherries grown in the production area
and utilized in the production of tart
cherry products. Included in this rate is
$0.006 per pound of tart cherries to
cover the cost of the research and
promotion program and $0.0015 per
pound of tart cherries to cover
administrative expenses.
Dated: May 19, 2017.
Bruce Summers,
Acting Administrator, Agricultural Marketing
Service.
[FR Doc. 2017–10677 Filed 5–24–17; 8:45 am]
BILLING CODE 3410–02–P
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 996
[Doc. No. AMS–SC–16–0102; SC16–996–3
PR]
Minimum Quality and Handling
Standards for Domestic and Imported
Peanuts Marketed in the United States;
Change to the Quality and Handling
Requirements
Agricultural Marketing Service,
USDA.
ACTION: Proposed rule.
AGENCY:
This proposed rule would
implement a recommendation from the
Peanut Standards Board (Board) to
revise the minimum quality and
handling standards for domestic and
imported peanuts marketed in the
United States (Standards). The Board
advises the Secretary of Agriculture
regarding potential changes to the
Standards and is comprised of
producers and industry representatives.
This action would relax the allowance
for damaged kernels in farmers stock
peanuts when determining segregation.
This change would increase the
allowance for damaged kernels under
Segregation 1 from not more than 2.49
percent to not more than 3.49 percent.
The requirements for Segregation 2
would also be adjusted to reflect this
change. The Board recommended this
change to align the incoming standards
with recent changes to the outgoing
quality standards and to help increase
returns to producers.
DATES: Comments must be received by
June 26, 2017.
ADDRESSES: Interested persons are
invited to submit written comments
concerning this proposal. Comments
must be sent to the Docket Clerk,
Marketing Order and Agreement
Division, Specialty Crops Program,
AMS, USDA, 1400 Independence
Avenue SW., STOP 0237, Washington,
DC 20250–0237; Fax: (202) 720–8938; or
Internet: https://www.regulations.gov. All
comments should reference the
document number and the date and
page number of this issue of the Federal
Register and will be made available for
public inspection in the Office of the
Docket Clerk during regular business
hours, or can be viewed at: https://
www.regulations.gov. All comments
submitted in response to this proposal
will be included in the record and will
be made available to the public. Please
be advised that the identity of the
individuals or entities submitting the
SUMMARY:
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Federal Register / Vol. 82, No. 100 / Thursday, May 25, 2017 / Proposed Rules
comments will be made public on the
internet at the address provided above.
FOR FURTHER INFORMATION CONTACT:
Steven W. Kauffman, Marketing
Specialist, or Christian D. Nissen,
Regional Director, Southeast Marketing
Field Office, Marketing Order and
Agreement Division, Specialty Crops
Program, AMS, USDA; Telephone: (863)
324–3775, Fax: (863) 291–8614, or
Email: Steven.Kauffman@ams.usda.gov
or Christian.Nissen@ams.usda.gov.
Small businesses may request
information on complying with this
regulation by contacting Richard Lower,
Marketing Order and Agreement
Division, Specialty Crops Program,
AMS, USDA, 1400 Independence
Avenue SW., STOP 0237, Washington,
DC 20250–0237; Telephone: (202) 720–
2491, Fax: (202) 720–8938, or Email:
Richard.Lower@ams.usda.gov.
SUPPLEMENTARY INFORMATION: This
proposed rule is issued pursuant to
Public Law 107–171, the Farm Security
and Rural Investment Act of 2002 (Act).
The Standards regulate the quality and
handling of domestic and imported
peanuts marketed in the United States.
Executive Orders 12866, 13563 and
13771
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 has
been designated as a ‘‘non-significant
regulatory action’’ under section 3(f) of
Executive Order 12866. Accordingly,
this rule is not subject to review by the
Office of Management and Budget
(OMB). Additionally, because this rule
does not meet the definition of a
significant regulatory action it does not
trigger the requirements contained in
Executive Order 13771. See OMB’s
Memorandum titled ‘‘Interim Guidance
Implementing Section 2 of the Executive
Order of January 30, 2017 titled
‘Reducing Regulation and Controlling
Regulatory Costs’ ’’ (February 2, 2017).
Executive Order 13175
This action has been reviewed in
accordance with the requirements of
Executive Order 13175, Consultation
and Coordination with Indian Tribal
Governments. The review reveals that
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this regulation would not have
substantial and direct effects on Tribal
governments and would not have
significant Tribal implications.
Executive Order 12988
This proposed rule has been reviewed
under Executive Order 12988, Civil
Justice Reform. It is not intended to
have retroactive effect and shall not
abrogate nor nullify any other statute,
whether State or Federal, dealing with
the same subjects as this Act; but is
intended that all such statutes shall
remain in full force and effect except in
so far as they are inconsistent herewith
or repugnant hereto (7 U.S.C. 587).
There are no administrative
procedures which must be exhausted
prior to any judicial challenge to the
provisions of this rule.
The Act 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; developing and implementing
peanut quality and handling
requirements; establishing the Board
comprised of producers and industry
representatives to advise USDA
regarding the quality and handling
requirements under the Standards; and
modifying those quality and handling
requirements when needed. USDA is
required by the Act to consult with the
Board prior to making any changes to
the Standards.
Pursuant to the Act, USDA has
consulted with Board members in its
review of the changes to the Standards
included in this proposed rule. This
proposed rule invites comments on a
revision to relax the allowance for
damaged kernels in farmers stock
peanuts when determining segregation.
The Board recommended changing the
allowance for damaged kernels under
Segregation 1 from not more than 2.49
percent to not more than 3.49 percent.
The requirements for Segregation 2
would also be adjusted to reflect this
change. The Board believes these
changes would align the incoming
standards with recent revisions to the
outgoing quality standards and increase
returns to producers. These changes
were recommended by the Board at its
meeting on September 1, 2016.
The Standards establish minimum
incoming and outgoing quality
requirements for domestic and imported
peanuts marketed in the United States.
Section 996.8 defines incoming
inspection as the sampling, inspection,
and certification of farmers stock
peanuts to determine segregation and
grade quality. Section 996.13 of the
Standards defines three levels of
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segregation for incoming farmers stock
peanuts. Segregation 1 is currently
defined as farmers stock peanuts with
not more than 2.49 percent damaged
kernels nor more than l.00 percent
concealed damage caused by rancidity,
mold, or decay and which are free from
visible Aspergillus flavus. Segregation 2
is currently defined as farmers stock
peanuts with more than 2.49 percent
damaged kernels or more than l.00
percent concealed damage caused by
rancidity, mold, or decay and which are
free from visible Aspergillus flavus, and
Segregation 3 is defined as farmers stock
peanuts with visible Aspergillus flavus.
Section 996.30 outlines the incoming
quality standards, which specify that all
farmers stock peanuts received by
handlers shall be inspected and certified
as to segregation and moisture content.
Segregation 1 encompasses the
majority of incoming farmers stock
peanuts. Segregation 2 peanuts have
historically constituted roughly one
percent of the domestic crop. However,
there has been a slight increase for the
previous two years to 2.5 percent in
2014 and 3 percent for 2015. The
fluctuation in the percentage of
Segregation 2 peanuts is likely the result
of weather conditions around harvest
time.
A group of several entities
representing peanut producers wrote a
letter to the Board requesting that the
Board review the allowance for
damaged kernels for farmers stock
peanuts. In their letter, the producer
groups stated they believe the loan
value for Segregation 2 peanuts under
the Farm Service Agency’s marketing
assistance loans program remains low.
Even though changes in regulations and
technology allow Segregation 2 peanuts
to now be cleaned and resold at a higher
market rate, there has been little change
in the loan value for these peanuts. The
letter further stated that should a farmer
have their entire crop graded
Segregation 2, it could be economically
devastating. Therefore, the letter
requested an increase in the allowance
for damaged kernels for Segregation 1
from 2.49 to 3.49 percent, shifting more
peanuts into the category of Segregation
1.
The Board discussed this request at its
September 1, 2016, meeting. In its
discussion, the Board recognized the
large difference between the loan rate
for Segregation 1 and for Segregation 2
peanuts. The Board agreed that many
Segregation 2 peanut lots can be
cleaned-up to meet the outgoing quality
standards with minimal cost involved.
This allows a significant portion of the
Segregation 2 peanuts purchased to be
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utilized at a higher value after
processing.
There has been significant industry
advancement in technology since the
2002 Farm Bill established the
Standards. Before 2002, Segregation 2
peanuts had to be sent to a crusher and
could not be reworked to meet the
outgoing quality standards. In recent
years, the improvements in technology
have allowed the industry to utilize
Segregation 2 peanuts and still meet
outgoing quality standards. Further,
recent changes to the outgoing quality
standards relaxed the allowance for
damaged kernels from 2.5 to 3.5 percent
for kernels and for cleaned-inshell
peanuts (81 FR 50283, published August
31, 2016). This relaxation made
additional peanuts available for sale for
human consumption. This proposed
change would make a corresponding
adjustment to the damage requirements
for incoming peanuts. The change
would relax the allowance for damaged
kernels under the definition for
Segregation 1 peanuts from 2.49 to 3.49
percent, which would shift a small
portion of peanuts from Segregation 2
into the Segregation 1 category.
The effect of this change on the
overall quality of peanuts in the
industry would be minimal. In
considering this issue, the Board
reviewed data from the National Center
for Peanut Competitiveness. The data
indicated that roughly one third of
Segregation 2 farmers stock peanuts
would be shifted into the Segregation 1
category under the proposed change.
Since Segregation 2 historically
composes approximately one percent of
total farmers stock peanuts, this
adjustment would represent a very
small shift in overall volume. Therefore,
the proposed change would have an
insignificant impact on the composition
of Segregation 1 peanuts.
As the producer value of farmers
stock peanuts is determined in part by
the category of segregation, the
segregation level determined during the
incoming inspection impacts producer
returns. If a producer experiences a shift
in damage that moves their peanuts
from a Segregation 1 to a Segregation 2,
it can have a significant financial
impact, especially for small producers.
This change would benefit the industry
by moving more peanuts into the
Segregation 1 category. This should
increase returns and help lower
financial risk to producers by shifting
more peanuts into the higher value
Segregation 1 category.
This change would also require
increasing the Segregation 2 criteria
from more than 2.49 percent to more
than 3.49 percent damaged kernels. The
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Board recommended these changes, in
part, to align the incoming standards
with the recent changes that were made
to the outgoing quality standards earlier
this year. Further, the Board believes the
3.49 percent allowance for damaged
kernels would represent an acceptable
level of damage while maintaining
quality peanuts.
Consequently, the Board
recommended increasing the percent
damaged kernel allowance under
Segregation 1 from not more than 2.49
percent to not more than 3.49 percent.
The Board voted 13–2 in support of the
proposed changes. One of the two Board
members voting against the changes was
concerned that the decision was being
made without enough data and was
concerned about maintaining the quality
of peanuts. Several Board members
responded that this change was not a
new issue for the industry. Further, this
change has been well supported by
producer groups prompting this action.
These changes are consistent with the
Standards and the Act.
Initial Regulatory Flexibility Analysis
Pursuant to requirements set forth in
the Regulatory Flexibility Act (RFA) (5
U.S.C. 601–612), the Agricultural
Marketing Service (AMS) has
considered the economic impact of this
action on small entities. Accordingly,
AMS has prepared this initial regulatory
flexibility analysis.
The purpose of the RFA is to fit
regulatory actions to the scale of
businesses subject to such actions in
order that small businesses will not be
unduly or disproportionately burdened.
Small agricultural producers are
defined by the Small Business
Administration (SBA) as those having
annual receipts of less than $750,000
and small agricultural service firms,
including handlers and importers, are
defined as those having annual receipts
of less than $7,500,000 (13 CFR
121.201).
There are approximately 7,500 peanut
producers, 60 peanut handlers,
operating approximately 70 shelling
plants, and 25 importers subject to
regulation under the peanut program.
An approximation of the number of
peanut farms that could be considered
small agricultural businesses under the
SBA definition can be obtained from the
2012 Agricultural Census, which is the
most recent information on the number
of farms categorized by size. There were
3,066 peanut farms with annual
agricultural sales valued at less than
$500,000 in 2012, representing 47
percent of the total number of peanut
farms in the U.S. (6,561). According to
the National Agricultural Statistics
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Service (NASS), peanut production for
the 2014 and 2015 crop years averaged
5.7 billion pounds. The average value of
production for the two-year period was
$1.173 billion. The average producer
price over the two-year period was
$0.21 per pound. Dividing the two-year
average production value of $1.173
billion by the approximate number of
peanut producers of 7,500 results in an
average revenue per producer of
approximately $156,000, well below the
SBA threshold for small producers.
Dividing the two-year average
production value of $1.173 billion by
the approximate number of peanut
handlers of 60 results in an average
revenue per handler of approximately
$19,550,000. Using a normal
distribution, the majority of handlers
may be considered large entities.
Further, according to the Foreign
Agricultural Service’s Global
Agricultural Trade System, the average
annual value of peanuts imported into
the United States for the 2014 and 2015
seasons was approximately $67 million.
By dividing the annual average value of
imported peanuts by the number of
importers, the majority of importers
would meet the SBA definition for small
agricultural service firms. Consequently,
the majority of producers and importers
may be classified as small entities, but
the majority of handlers may be
considered large entities when using a
normal distribution.
This proposed rule would relax the
allowance for damaged kernels in
farmers stock peanuts when
determining segregation. This action
would change the allowance for
damaged kernels under Segregation 1
from not more than 2.49 percent to not
more than 3.49 percent. The Board
believes this proposed rule would align
incoming farmers stock peanuts
segregation with the outgoing quality
standards and increase returns to
producers.
It is not anticipated that this action
would impose additional costs on
handlers, producers, or importers,
regardless of size. Rather, these changes
should help improve returns to peanut
producers and help lower financial risk.
This proposed rule is expected to
benefit the industry. The effects of this
rule are not expected to be
disproportionately greater or less for
small handlers, producers or importers
than for larger entities.
The USDA has considered
alternatives to these changes. The Act
requires USDA to consult with the
Board on changes to the Standards. An
alternative discussed was to increase the
damaged kernel percentage up to 4.49
percent for Segregation 1. However, the
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Board believes this alternative would
relax the kernel damage too far.
Therefore, this alternative was rejected.
USDA has met with the Board, which
is representative of the industry, and
has included its recommendations in
this rule.
The Act specifies in § 1604(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).
However, USDA has considered the
reporting and recordkeeping burden on
handlers and importers under this
program. This proposed rule would
relax the allowance for damaged kernels
in farmers stock peanuts when
determining segregation under the
Standards. Recordkeeping requirements
would remain the same. Accordingly,
this rule would not impose any
additional reporting or recordkeeping
requirements on either small or large
handlers or importers.
Section 1601 of the Act also provides
that 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
are provided with a 30-day comment
period.
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.
USDA has not identified any relevant
Federal rules that duplicate, overlap or
conflict with this rule.
The Board’s meeting was widely
publicized throughout the peanut
industry and all interested persons were
invited to attend and participate in
Board deliberations on all issues. Like
all Board meetings, the September 1,
2016, meeting was a public meeting and
all entities, both large and small, were
able to express views on these issues.
Finally, interested persons are invited to
submit comments on this proposed rule,
including the regulatory and
informational impacts of this action on
small businesses.
A small business guide on complying
with fruit, vegetable, and specialty crop
marketing agreements and orders may
be viewed at: https://www.ams.usda.gov/
rules-regulations/moa/small-businesses.
Any questions about the compliance
guide should be sent to Richard Lower
at the previously mentioned address in
the FOR FURTHER INFORMATION CONTACT
section.
A 30-day comment period is provided
to allow interested persons to respond
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to this proposal. Thirty days is deemed
appropriate because farmers stock
peanuts are already being delivered
from the 2016–17 crop. Further, the
industry is aware of this proposed
action recommended by the Board. All
written comments timely received will
be considered before a final
determination is made on this matter.
List of Subjects in 7 CFR Part 996
Food grades and standards, Marketing
agreements, Peanuts, Reporting and
recordkeeping requirements.
For the reasons set forth in the
preamble, 7 CFR part 996 is proposed to
be amended as follows:
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:
■
Authority: 7 U.S.C. 7958.
2. Section 996.13 is amended by
revising paragraphs (b) and (c) to read
as follows:
■
§ 996.13
Peanuts.
*
*
*
*
*
(b) Segregation 1. ‘‘Segregation 1
peanuts’’ means farmers stock peanuts
with not more than 3.49 percent
damaged kernels nor more than 1.00
percent concealed damage caused by
rancidity, mold, or decay and which are
free from visible Aspergillus flavus.
(c) Segregation 2. ‘‘Segregation 2
peanuts’’ means farmers stock peanuts
with more than 3.49 percent damaged
kernels or more than l.00 percent
concealed damage caused by rancidity,
mold, or decay and which are free from
visible Aspergillus flavus.
*
*
*
*
*
Dated: May 19, 2017.
Bruce Summers,
Acting Administrator, Agricultural Marketing
Service.
[FR Doc. 2017–10680 Filed 5–24–17; 8:45 am]
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24085
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 52
[EPA–R01–OAR–2017–0102 and EPA–R01–
OAR–2016–0758; FRL–9962–02–Region 1]
Air Plan Approval; NH; Nonattainment
New Source Review and Prevention of
Significant Deterioration Permit
Program Revisions; Public Hearing
Revisions for State Permitting
Programs; Withdrawal of Permit Fee
Program; Infrastructure Provisions for
National Ambient Air Quality
Standards
Environmental Protection
Agency (EPA).
ACTION: Proposed rule.
AGENCY:
The Environmental Protection
Agency (EPA) is proposing to approve
several different State Implementation
Plan (SIP) revisions submitted to EPA
by the New Hampshire Department of
Environmental Services (NHDES). New
Hampshire submitted to EPA on
October 26, 2016, revisions satisfying
the NHDES’s earlier commitment to
adopt and submit provisions that meet
certain requirements of the federal
Prevention of Significant Deterioration
(PSD) and Nonattainment New Source
Review (NNSR) air permit program
regulations. This proposed action will
convert to full approval EPA’s
September 25, 2015 conditional
approval of New Hampshire’s PSD and
NNSR permit programs. This action also
will approve NHDES’s SIP revisions
relating to several New Hampshire
infrastructure SIPs, which were
conditionally approved by EPA on
December 16, 2015, and July 8, 2016.
Additionally, EPA is also proposing to
approve: a January 31, 2017 SIP revision
amending the public notice and hearing
procedures for New Hampshire’s NNSR,
PSD, and minor NSR permit programs;
a January 18, 2017 SIP revision
withdrawing the State SIP’s permit fee
system; and a November 17, 2015 SIP
revision that addresses the good
neighbor provisions of New
Hampshire’s infrastructure SIP for the
2010 nitrogen oxide (NO2) national
ambient air quality standard (NAAQS).
This action is being taken in accordance
with the Clean Air Act (CAA).
DATES: Written comments must be
received on or before June 26, 2017.
ADDRESSES: Submit your comments,
identified by Docket ID No. EPA–R01–
OAR–2017–0102 and EPA–R01–OAR–
2016–0758 at https://
www.regulations.gov, or via email to
mcdonnell.ida@epa.gov. For comments
submitted at Regulations.gov, follow the
SUMMARY:
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]]>Agencies
[Federal Register Volume 82, Number 100 (Thursday, May 25, 2017)]
[Proposed Rules]
[Pages 24082-24085]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-10680]
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 996
[Doc. No. AMS-SC-16-0102; SC16-996-3 PR]
Minimum Quality and Handling Standards for Domestic and Imported
Peanuts Marketed in the United States; Change to the Quality and
Handling Requirements
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This proposed rule would implement a recommendation from the
Peanut Standards Board (Board) to revise the minimum quality and
handling standards for domestic and imported peanuts marketed in the
United States (Standards). The Board advises the Secretary of
Agriculture regarding potential changes to the Standards and is
comprised of producers and industry representatives. This action would
relax the allowance for damaged kernels in farmers stock peanuts when
determining segregation. This change would increase the allowance for
damaged kernels under Segregation 1 from not more than 2.49 percent to
not more than 3.49 percent. The requirements for Segregation 2 would
also be adjusted to reflect this change. The Board recommended this
change to align the incoming standards with recent changes to the
outgoing quality standards and to help increase returns to producers.
DATES: Comments must be received by June 26, 2017.
ADDRESSES: Interested persons are invited to submit written comments
concerning this proposal. Comments must be sent to the Docket Clerk,
Marketing Order and Agreement Division, Specialty Crops Program, AMS,
USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 20250-
0237; Fax: (202) 720-8938; or Internet: https://www.regulations.gov. All
comments should reference the document number and the date and page
number of this issue of the Federal Register and will be made available
for public inspection in the Office of the Docket Clerk during regular
business hours, or can be viewed at: https://www.regulations.gov. All
comments submitted in response to this proposal will be included in the
record and will be made available to the public. Please be advised that
the identity of the individuals or entities submitting the
[[Page 24083]]
comments will be made public on the internet at the address provided
above.
FOR FURTHER INFORMATION CONTACT: Steven W. Kauffman, Marketing
Specialist, or Christian D. Nissen, Regional Director, Southeast
Marketing Field Office, Marketing Order and Agreement Division,
Specialty Crops Program, AMS, USDA; Telephone: (863) 324-3775, Fax:
(863) 291-8614, or Email: Steven.Kauffman@ams.usda.gov or
Christian.Nissen@ams.usda.gov.
Small businesses may request information on complying with this
regulation by contacting Richard Lower, Marketing Order and Agreement
Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue
SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491,
Fax: (202) 720-8938, or Email: Richard.Lower@ams.usda.gov.
SUPPLEMENTARY INFORMATION: This proposed rule is issued pursuant to
Public Law 107-171, the Farm Security and Rural Investment Act of 2002
(Act). The Standards regulate the quality and handling of domestic and
imported peanuts marketed in the United States.
Executive Orders 12866, 13563 and 13771
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 has been designated as a ``non-significant regulatory
action'' under section 3(f) of Executive Order 12866. Accordingly, this
rule is not subject to review by the Office of Management and Budget
(OMB). Additionally, because this rule does not meet the definition of
a significant regulatory action it does not trigger the requirements
contained in Executive Order 13771. See OMB's Memorandum titled
``Interim Guidance Implementing Section 2 of the Executive Order of
January 30, 2017 titled `Reducing Regulation and Controlling Regulatory
Costs' '' (February 2, 2017).
Executive Order 13175
This action has been reviewed in accordance with the requirements
of Executive Order 13175, Consultation and Coordination with Indian
Tribal Governments. The review reveals that this regulation would not
have substantial and direct effects on Tribal governments and would not
have significant Tribal implications.
Executive Order 12988
This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. It is not intended to have retroactive effect and
shall not abrogate nor nullify any other statute, whether State or
Federal, dealing with the same subjects as this Act; but is intended
that all such statutes shall remain in full force and effect except in
so far as they are inconsistent herewith or repugnant hereto (7 U.S.C.
587).
There are no administrative procedures which must be exhausted
prior to any judicial challenge to the provisions of this rule.
The Act 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; developing and
implementing peanut quality and handling requirements; establishing the
Board comprised of producers and industry representatives to advise
USDA regarding the quality and handling requirements under the
Standards; and modifying those quality and handling requirements when
needed. USDA is required by the Act to consult with the Board prior to
making any changes to the Standards.
Pursuant to the Act, USDA has consulted with Board members in its
review of the changes to the Standards included in this proposed rule.
This proposed rule invites comments on a revision to relax the
allowance for damaged kernels in farmers stock peanuts when determining
segregation. The Board recommended changing the allowance for damaged
kernels under Segregation 1 from not more than 2.49 percent to not more
than 3.49 percent. The requirements for Segregation 2 would also be
adjusted to reflect this change. The Board believes these changes would
align the incoming standards with recent revisions to the outgoing
quality standards and increase returns to producers. These changes were
recommended by the Board at its meeting on September 1, 2016.
The Standards establish minimum incoming and outgoing quality
requirements for domestic and imported peanuts marketed in the United
States. Section 996.8 defines incoming inspection as the sampling,
inspection, and certification of farmers stock peanuts to determine
segregation and grade quality. Section 996.13 of the Standards defines
three levels of segregation for incoming farmers stock peanuts.
Segregation 1 is currently defined as farmers stock peanuts with not
more than 2.49 percent damaged kernels nor more than l.00 percent
concealed damage caused by rancidity, mold, or decay and which are free
from visible Aspergillus flavus. Segregation 2 is currently defined as
farmers stock peanuts with more than 2.49 percent damaged kernels or
more than l.00 percent concealed damage caused by rancidity, mold, or
decay and which are free from visible Aspergillus flavus, and
Segregation 3 is defined as farmers stock peanuts with visible
Aspergillus flavus. Section 996.30 outlines the incoming quality
standards, which specify that all farmers stock peanuts received by
handlers shall be inspected and certified as to segregation and
moisture content.
Segregation 1 encompasses the majority of incoming farmers stock
peanuts. Segregation 2 peanuts have historically constituted roughly
one percent of the domestic crop. However, there has been a slight
increase for the previous two years to 2.5 percent in 2014 and 3
percent for 2015. The fluctuation in the percentage of Segregation 2
peanuts is likely the result of weather conditions around harvest time.
A group of several entities representing peanut producers wrote a
letter to the Board requesting that the Board review the allowance for
damaged kernels for farmers stock peanuts. In their letter, the
producer groups stated they believe the loan value for Segregation 2
peanuts under the Farm Service Agency's marketing assistance loans
program remains low. Even though changes in regulations and technology
allow Segregation 2 peanuts to now be cleaned and resold at a higher
market rate, there has been little change in the loan value for these
peanuts. The letter further stated that should a farmer have their
entire crop graded Segregation 2, it could be economically devastating.
Therefore, the letter requested an increase in the allowance for
damaged kernels for Segregation 1 from 2.49 to 3.49 percent, shifting
more peanuts into the category of Segregation 1.
The Board discussed this request at its September 1, 2016, meeting.
In its discussion, the Board recognized the large difference between
the loan rate for Segregation 1 and for Segregation 2 peanuts. The
Board agreed that many Segregation 2 peanut lots can be cleaned-up to
meet the outgoing quality standards with minimal cost involved. This
allows a significant portion of the Segregation 2 peanuts purchased to
be
[[Page 24084]]
utilized at a higher value after processing.
There has been significant industry advancement in technology since
the 2002 Farm Bill established the Standards. Before 2002, Segregation
2 peanuts had to be sent to a crusher and could not be reworked to meet
the outgoing quality standards. In recent years, the improvements in
technology have allowed the industry to utilize Segregation 2 peanuts
and still meet outgoing quality standards. Further, recent changes to
the outgoing quality standards relaxed the allowance for damaged
kernels from 2.5 to 3.5 percent for kernels and for cleaned-inshell
peanuts (81 FR 50283, published August 31, 2016). This relaxation made
additional peanuts available for sale for human consumption. This
proposed change would make a corresponding adjustment to the damage
requirements for incoming peanuts. The change would relax the allowance
for damaged kernels under the definition for Segregation 1 peanuts from
2.49 to 3.49 percent, which would shift a small portion of peanuts from
Segregation 2 into the Segregation 1 category.
The effect of this change on the overall quality of peanuts in the
industry would be minimal. In considering this issue, the Board
reviewed data from the National Center for Peanut Competitiveness. The
data indicated that roughly one third of Segregation 2 farmers stock
peanuts would be shifted into the Segregation 1 category under the
proposed change. Since Segregation 2 historically composes
approximately one percent of total farmers stock peanuts, this
adjustment would represent a very small shift in overall volume.
Therefore, the proposed change would have an insignificant impact on
the composition of Segregation 1 peanuts.
As the producer value of farmers stock peanuts is determined in
part by the category of segregation, the segregation level determined
during the incoming inspection impacts producer returns. If a producer
experiences a shift in damage that moves their peanuts from a
Segregation 1 to a Segregation 2, it can have a significant financial
impact, especially for small producers. This change would benefit the
industry by moving more peanuts into the Segregation 1 category. This
should increase returns and help lower financial risk to producers by
shifting more peanuts into the higher value Segregation 1 category.
This change would also require increasing the Segregation 2
criteria from more than 2.49 percent to more than 3.49 percent damaged
kernels. The Board recommended these changes, in part, to align the
incoming standards with the recent changes that were made to the
outgoing quality standards earlier this year. Further, the Board
believes the 3.49 percent allowance for damaged kernels would represent
an acceptable level of damage while maintaining quality peanuts.
Consequently, the Board recommended increasing the percent damaged
kernel allowance under Segregation 1 from not more than 2.49 percent to
not more than 3.49 percent. The Board voted 13-2 in support of the
proposed changes. One of the two Board members voting against the
changes was concerned that the decision was being made without enough
data and was concerned about maintaining the quality of peanuts.
Several Board members responded that this change was not a new issue
for the industry. Further, this change has been well supported by
producer groups prompting this action. These changes are consistent
with the Standards and the Act.
Initial Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS)
has considered the economic impact of this action on small entities.
Accordingly, AMS has prepared this initial regulatory flexibility
analysis.
The purpose of the RFA is to fit regulatory actions to the scale of
businesses subject to such actions in order that small businesses will
not be unduly or disproportionately burdened.
Small agricultural producers are defined by the Small Business
Administration (SBA) as those having annual receipts of less than
$750,000 and small agricultural service firms, including handlers and
importers, are defined as those having annual receipts of less than
$7,500,000 (13 CFR 121.201).
There are approximately 7,500 peanut producers, 60 peanut handlers,
operating approximately 70 shelling plants, and 25 importers subject to
regulation under the peanut program.
An approximation of the number of peanut farms that could be
considered small agricultural businesses under the SBA definition can
be obtained from the 2012 Agricultural Census, which is the most recent
information on the number of farms categorized by size. There were
3,066 peanut farms with annual agricultural sales valued at less than
$500,000 in 2012, representing 47 percent of the total number of peanut
farms in the U.S. (6,561). According to the National Agricultural
Statistics Service (NASS), peanut production for the 2014 and 2015 crop
years averaged 5.7 billion pounds. The average value of production for
the two-year period was $1.173 billion. The average producer price over
the two-year period was $0.21 per pound. Dividing the two-year average
production value of $1.173 billion by the approximate number of peanut
producers of 7,500 results in an average revenue per producer of
approximately $156,000, well below the SBA threshold for small
producers.
Dividing the two-year average production value of $1.173 billion by
the approximate number of peanut handlers of 60 results in an average
revenue per handler of approximately $19,550,000. Using a normal
distribution, the majority of handlers may be considered large
entities. Further, according to the Foreign Agricultural Service's
Global Agricultural Trade System, the average annual value of peanuts
imported into the United States for the 2014 and 2015 seasons was
approximately $67 million. By dividing the annual average value of
imported peanuts by the number of importers, the majority of importers
would meet the SBA definition for small agricultural service firms.
Consequently, the majority of producers and importers may be classified
as small entities, but the majority of handlers may be considered large
entities when using a normal distribution.
This proposed rule would relax the allowance for damaged kernels in
farmers stock peanuts when determining segregation. This action would
change the allowance for damaged kernels under Segregation 1 from not
more than 2.49 percent to not more than 3.49 percent. The Board
believes this proposed rule would align incoming farmers stock peanuts
segregation with the outgoing quality standards and increase returns to
producers.
It is not anticipated that this action would impose additional
costs on handlers, producers, or importers, regardless of size. Rather,
these changes should help improve returns to peanut producers and help
lower financial risk.
This proposed rule is expected to benefit the industry. The effects
of this rule are not expected to be disproportionately greater or less
for small handlers, producers or importers than for larger entities.
The USDA has considered alternatives to these changes. The Act
requires USDA to consult with the Board on changes to the Standards. An
alternative discussed was to increase the damaged kernel percentage up
to 4.49 percent for Segregation 1. However, the
[[Page 24085]]
Board believes this alternative would relax the kernel damage too far.
Therefore, this alternative was rejected.
USDA has met with the Board, which is representative of the
industry, and has included its recommendations in this rule.
The Act specifies in Sec. 1604(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). However, USDA
has considered the reporting and recordkeeping burden on handlers and
importers under this program. This proposed rule would relax the
allowance for damaged kernels in farmers stock peanuts when determining
segregation under the Standards. Recordkeeping requirements would
remain the same. Accordingly, this rule would not impose any additional
reporting or recordkeeping requirements on either small or large
handlers or importers.
Section 1601 of the Act also provides that 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 are provided with a 30-day comment period.
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.
USDA has not identified any relevant Federal rules that duplicate,
overlap or conflict with this rule.
The Board's meeting was widely publicized throughout the peanut
industry and all interested persons were invited to attend and
participate in Board deliberations on all issues. Like all Board
meetings, the September 1, 2016, meeting was a public meeting and all
entities, both large and small, were able to express views on these
issues. Finally, interested persons are invited to submit comments on
this proposed rule, including the regulatory and informational impacts
of this action on small businesses.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at: https://www.ams.usda.gov/rules-regulations/moa/small-businesses. Any questions
about the compliance guide should be sent to Richard Lower at the
previously mentioned address in the FOR FURTHER INFORMATION CONTACT
section.
A 30-day comment period is provided to allow interested persons to
respond to this proposal. Thirty days is deemed appropriate because
farmers stock peanuts are already being delivered from the 2016-17
crop. Further, the industry is aware of this proposed action
recommended by the Board. All written comments timely received will be
considered before a final determination is made on this matter.
List of Subjects in 7 CFR Part 996
Food grades and standards, Marketing agreements, Peanuts, Reporting
and recordkeeping requirements.
For the reasons set forth in the preamble, 7 CFR part 996 is
proposed to be 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. Section 996.13 is amended by revising paragraphs (b) and (c) to read
as follows:
Sec. 996.13 Peanuts.
* * * * *
(b) Segregation 1. ``Segregation 1 peanuts'' means farmers stock
peanuts with not more than 3.49 percent damaged kernels nor more than
1.00 percent concealed damage caused by rancidity, mold, or decay and
which are free from visible Aspergillus flavus.
(c) Segregation 2. ``Segregation 2 peanuts'' means farmers stock
peanuts with more than 3.49 percent damaged kernels or more than l.00
percent concealed damage caused by rancidity, mold, or decay and which
are free from visible Aspergillus flavus.
* * * * *
Dated: May 19, 2017.
Bruce Summers,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2017-10680 Filed 5-24-17; 8:45 am]
BILLING CODE 3410-02-P
