82_FR_24182 82 FR 24082 - Minimum Quality and Handling Standards for Domestic and Imported Peanuts Marketed in the United States; Change to the Quality and Handling Requirements

82 FR 24082 - Minimum Quality and Handling Standards for Domestic and Imported Peanuts Marketed in the United States; Change to the Quality and Handling Requirements

DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service

Federal Register Volume 82, Issue 100 (May 25, 2017)

Page Range24082-24085
FR Document2017-10680

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.

Federal Register, Volume 82 Issue 100 (Thursday, May 25, 2017)
[Federal Register Volume 82, Number 100 (Thursday, May 25, 2017)]
[Proposed Rules]
[Pages 24082-24085]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-10680]


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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

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: http://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: http://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: [email protected] or 
[email protected].
    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: [email protected].

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: http://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



     24082                   Federal Register / Vol. 82, No. 100 / Thursday, May 25, 2017 / Proposed Rules

     financial statements, and the need to                   duplication by industry and public                    DEPARTMENT OF AGRICULTURE
     both reduce financial reserves and                      sector agencies.
     increase its marketing efforts to increase                 AMS is committed to complying with                 Agricultural Marketing Service
     demand for tart cherries. The Board also                the E-Government Act, to promote the
     considered not taking this action, but                  use of the Internet and other                         7 CFR Part 996
     determined that 2016–17 expenditures                    information technologies to provide                   [Doc. No. AMS–SC–16–0102; SC16–996–3
     of $2,523,550 were appropriate, and the                 increased opportunities for citizen                   PR]
     recommended assessment rate and                         access to Government information and
     allocation, along with funds from                       services, and for other purposes.                     Minimum Quality and Handling
     interest income, block grants, and funds                                                                      Standards for Domestic and Imported
     from reserves, would be adequate to                        USDA has not identified any relevant
                                                             Federal rules that duplicate, overlap, or             Peanuts Marketed in the United States;
     cover budgeted expenses.                                                                                      Change to the Quality and Handling
        A review of historical information and               conflict with this action.
                                                                                                                   Requirements
     preliminary information pertaining to                      A small business guide on complying
     the upcoming crop year indicates that                   with fruit, vegetable, and specialty crop             AGENCY:  Agricultural Marketing Service,
     the average grower price for the 2016–                  marketing agreements and orders may                   USDA.
     17 season could be approximately                        be viewed at: http://www.ams.usda.gov/                ACTION: Proposed rule.
     $0.348 per pound of tart cherries.                      rules-regulations/moa/small-businesses.
     Therefore, the estimated assessment                     Any questions about the compliance                    SUMMARY:   This proposed rule would
     revenue for the 2016–17 crop year as a                  guide should be sent to Richard Lower                 implement a recommendation from the
     percentage of total grower revenue                      at the previously mentioned address in                Peanut Standards Board (Board) to
     would be approximately 2 percent.                       the FOR FURTHER INFORMATION CONTACT                   revise the minimum quality and
        This action would not increase the                   section.                                              handling standards for domestic and
     assessment obligation imposed on                                                                              imported peanuts marketed in the
                                                                A 30-day comment period is provided
     handlers. While assessments impose                                                                            United States (Standards). The Board
                                                             to allow interested persons to respond
     some additional costs on handlers, the                                                                        advises the Secretary of Agriculture
                                                             to this proposed rule.
     costs are minimal and uniform on all                                                                          regarding potential changes to the
     handlers. Some of the costs may be                      List of Subjects in 7 CFR Part 930                    Standards and is comprised of
     passed on to producers. However, these                                                                        producers and industry representatives.
                                                               Marketing agreements, Reporting and                 This action would relax the allowance
     costs would be offset by the benefits
                                                             recordkeeping requirements, tart                      for damaged kernels in farmers stock
     derived by the operation of the
                                                             cherries.                                             peanuts when determining segregation.
     marketing order.
        The Board’s meetings were widely                       For the reasons set forth in the                    This change would increase the
     publicized throughout the tart cherry                   preamble, 7 CFR part 930 is proposed to               allowance for damaged kernels under
     industry, and all interested persons                    be amended as follows:                                Segregation 1 from not more than 2.49
     were invited to attend the meetings and                                                                       percent to not more than 3.49 percent.
     participate in Board deliberations on all               PART 930—TART CHERRIES GROWN                          The requirements for Segregation 2
     issues. Like all Board meetings, the June               IN THE STATES OF MICHIGAN, NEW                        would also be adjusted to reflect this
     23, 2016, and September 8, 2016,                        YORK, PENNSYLVANIA, OREGON,                           change. The Board recommended this
     meetings were public meetings, and all                  UTAH, WASHINGTON, AND                                 change to align the incoming standards
     entities, both large and small, were able               WISCONSIN                                             with recent changes to the outgoing
     to express views on this issue. Finally,                                                                      quality standards and to help increase
     interested persons are invited to submit                ■ 1. The authority citation for 7 CFR                 returns to producers.
     comments on this proposed rule,                         part 930 continues to read as follows:                DATES: Comments must be received by
     including the regulatory and                                                                                  June 26, 2017.
                                                                 Authority: 7 U.S.C. 601–674.
     informational impacts of this action on                                                                       ADDRESSES: Interested persons are
     small businesses.                                       ■ 2. Section 930.200 is revised to read               invited to submit written comments
        In accordance with the Paperwork                     as follows:                                           concerning this proposal. Comments
     Reduction Act of 1995 (44 U.S.C.                                                                              must be sent to the Docket Clerk,
     Chapter 35), the order’s information                    § 930.200    Assessment rate.                         Marketing Order and Agreement
     collection requirements have been                         On and after October 1, 2016, the                   Division, Specialty Crops Program,
     previously approved by OMB and                          assessment rate imposed on handlers                   AMS, USDA, 1400 Independence
     assigned OMB No. 0581–0177, Tart                        shall be $0.0075 per pound of tart                    Avenue SW., STOP 0237, Washington,
     Cherries Grown in the States of                         cherries grown in the production area                 DC 20250–0237; Fax: (202) 720–8938; or
     Michigan, New York, Pennsylvania,                       and utilized in the production of tart                Internet: http://www.regulations.gov. All
     Oregon, Utah, Washington, and                           cherry products. Included in this rate is             comments should reference the
     Wisconsin. No changes in those                          $0.006 per pound of tart cherries to                  document number and the date and
     requirements are necessary as a result of               cover the cost of the research and                    page number of this issue of the Federal
     this proposed action. Should any                        promotion program and $0.0015 per                     Register and will be made available for
     changes become necessary, they would                    pound of tart cherries to cover                       public inspection in the Office of the
     be submitted to OMB for approval.                       administrative expenses.                              Docket Clerk during regular business
        This proposed rule would impose no                                                                         hours, or can be viewed at: http://
                                                               Dated: May 19, 2017.
     additional reporting or recordkeeping                                                                         www.regulations.gov. All comments
     requirements on either small or large                   Bruce Summers,                                        submitted in response to this proposal
     tart cherry handlers. As with all Federal               Acting Administrator, Agricultural Marketing          will be included in the record and will
     marketing order programs, reports and                   Service.                                              be made available to the public. Please
     forms are periodically reviewed to                      [FR Doc. 2017–10677 Filed 5–24–17; 8:45 am]           be advised that the identity of the
     reduce information requirements and                     BILLING CODE 3410–02–P                                individuals or entities submitting the


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                             Federal Register / Vol. 82, No. 100 / Thursday, May 25, 2017 / Proposed Rules                                           24083

     comments will be made public on the                     this regulation would not have                        segregation for incoming farmers stock
     internet at the address provided above.                 substantial and direct effects on Tribal              peanuts. Segregation 1 is currently
     FOR FURTHER INFORMATION CONTACT:                        governments and would not have                        defined as farmers stock peanuts with
     Steven W. Kauffman, Marketing                           significant Tribal implications.                      not more than 2.49 percent damaged
     Specialist, or Christian D. Nissen,                                                                           kernels nor more than l.00 percent
                                                             Executive Order 12988
     Regional Director, Southeast Marketing                                                                        concealed damage caused by rancidity,
     Field Office, Marketing Order and                          This proposed rule has been reviewed               mold, or decay and which are free from
     Agreement Division, Specialty Crops                     under Executive Order 12988, Civil                    visible Aspergillus flavus. Segregation 2
                                                             Justice Reform. It is not intended to                 is currently defined as farmers stock
     Program, AMS, USDA; Telephone: (863)
                                                             have retroactive effect and shall not                 peanuts with more than 2.49 percent
     324–3775, Fax: (863) 291–8614, or
                                                             abrogate nor nullify any other statute,               damaged kernels or more than l.00
     Email: Steven.Kauffman@ams.usda.gov
                                                             whether State or Federal, dealing with                percent concealed damage caused by
     or Christian.Nissen@ams.usda.gov.
                                                             the same subjects as this Act; but is                 rancidity, mold, or decay and which are
       Small businesses may request
                                                             intended that all such statutes shall                 free from visible Aspergillus flavus, and
     information on complying with this
                                                             remain in full force and effect except in             Segregation 3 is defined as farmers stock
     regulation by contacting Richard Lower,
                                                             so far as they are inconsistent herewith              peanuts with visible Aspergillus flavus.
     Marketing Order and Agreement
                                                             or repugnant hereto (7 U.S.C. 587).                   Section 996.30 outlines the incoming
     Division, Specialty Crops Program,                         There are no administrative
     AMS, USDA, 1400 Independence                                                                                  quality standards, which specify that all
                                                             procedures which must be exhausted                    farmers stock peanuts received by
     Avenue SW., STOP 0237, Washington,                      prior to any judicial challenge to the
     DC 20250–0237; Telephone: (202) 720–                                                                          handlers shall be inspected and certified
                                                             provisions of this rule.                              as to segregation and moisture content.
     2491, Fax: (202) 720–8938, or Email:                       The Act requires that USDA take
     Richard.Lower@ams.usda.gov.                             several actions with regard to peanuts                   Segregation 1 encompasses the
     SUPPLEMENTARY INFORMATION: This                         marketed in the United States. These                  majority of incoming farmers stock
     proposed rule is issued pursuant to                     include ensuring mandatory inspection                 peanuts. Segregation 2 peanuts have
     Public Law 107–171, the Farm Security                   on all peanuts marketed in the United                 historically constituted roughly one
     and Rural Investment Act of 2002 (Act).                 States; developing and implementing                   percent of the domestic crop. However,
     The Standards regulate the quality and                  peanut quality and handling                           there has been a slight increase for the
     handling of domestic and imported                       requirements; establishing the Board                  previous two years to 2.5 percent in
     peanuts marketed in the United States.                  comprised of producers and industry                   2014 and 3 percent for 2015. The
                                                             representatives to advise USDA                        fluctuation in the percentage of
     Executive Orders 12866, 13563 and                                                                             Segregation 2 peanuts is likely the result
                                                             regarding the quality and handling
     13771                                                                                                         of weather conditions around harvest
                                                             requirements under the Standards; and
        Executive Orders 12866 and 13563                     modifying those quality and handling                  time.
     direct agencies to assess all costs and                 requirements when needed. USDA is                        A group of several entities
     benefits of available regulatory                        required by the Act to consult with the               representing peanut producers wrote a
     alternatives and, if regulation is                      Board prior to making any changes to                  letter to the Board requesting that the
     necessary, to select regulatory                         the Standards.                                        Board review the allowance for
     approaches that maximize net benefits                      Pursuant to the Act, USDA has                      damaged kernels for farmers stock
     (including potential economic,                          consulted with Board members in its                   peanuts. In their letter, the producer
     environmental, public health and safety                 review of the changes to the Standards                groups stated they believe the loan
     effects, distributive impacts, and                      included in this proposed rule. This                  value for Segregation 2 peanuts under
     equity). Executive Order 13563                          proposed rule invites comments on a                   the Farm Service Agency’s marketing
     emphasizes the importance of                            revision to relax the allowance for                   assistance loans program remains low.
     quantifying both costs and benefits,                    damaged kernels in farmers stock                      Even though changes in regulations and
     reducing costs, harmonizing rules, and                  peanuts when determining segregation.                 technology allow Segregation 2 peanuts
     promoting flexibility. This action has                  The Board recommended changing the                    to now be cleaned and resold at a higher
     been designated as a ‘‘non-significant                  allowance for damaged kernels under                   market rate, there has been little change
     regulatory action’’ under section 3(f) of               Segregation 1 from not more than 2.49                 in the loan value for these peanuts. The
     Executive Order 12866. Accordingly,                     percent to not more than 3.49 percent.                letter further stated that should a farmer
     this rule is not subject to review by the               The requirements for Segregation 2                    have their entire crop graded
     Office of Management and Budget                         would also be adjusted to reflect this                Segregation 2, it could be economically
     (OMB). Additionally, because this rule                  change. The Board believes these                      devastating. Therefore, the letter
     does not meet the definition of a                       changes would align the incoming                      requested an increase in the allowance
     significant regulatory action it does not               standards with recent revisions to the                for damaged kernels for Segregation 1
     trigger the requirements contained in                   outgoing quality standards and increase               from 2.49 to 3.49 percent, shifting more
     Executive Order 13771. See OMB’s                        returns to producers. These changes                   peanuts into the category of Segregation
     Memorandum titled ‘‘Interim Guidance                    were recommended by the Board at its                  1.
     Implementing Section 2 of the Executive                 meeting on September 1, 2016.                            The Board discussed this request at its
     Order of January 30, 2017 titled                           The Standards establish minimum                    September 1, 2016, meeting. In its
     ‘Reducing Regulation and Controlling                    incoming and outgoing quality                         discussion, the Board recognized the
     Regulatory Costs’ ’’ (February 2, 2017).                requirements for domestic and imported                large difference between the loan rate
                                                             peanuts marketed in the United States.                for Segregation 1 and for Segregation 2
     Executive Order 13175                                   Section 996.8 defines incoming                        peanuts. The Board agreed that many
       This action has been reviewed in                      inspection as the sampling, inspection,               Segregation 2 peanut lots can be
     accordance with the requirements of                     and certification of farmers stock                    cleaned-up to meet the outgoing quality
     Executive Order 13175, Consultation                     peanuts to determine segregation and                  standards with minimal cost involved.
     and Coordination with Indian Tribal                     grade quality. Section 996.13 of the                  This allows a significant portion of the
     Governments. The review reveals that                    Standards defines three levels of                     Segregation 2 peanuts purchased to be


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     24084                   Federal Register / Vol. 82, No. 100 / Thursday, May 25, 2017 / Proposed Rules

     utilized at a higher value after                        Board recommended these changes, in                   Service (NASS), peanut production for
     processing.                                             part, to align the incoming standards                 the 2014 and 2015 crop years averaged
        There has been significant industry                  with the recent changes that were made                5.7 billion pounds. The average value of
     advancement in technology since the                     to the outgoing quality standards earlier             production for the two-year period was
     2002 Farm Bill established the                          this year. Further, the Board believes the            $1.173 billion. The average producer
     Standards. Before 2002, Segregation 2                   3.49 percent allowance for damaged                    price over the two-year period was
     peanuts had to be sent to a crusher and                 kernels would represent an acceptable                 $0.21 per pound. Dividing the two-year
     could not be reworked to meet the                       level of damage while maintaining                     average production value of $1.173
     outgoing quality standards. In recent                   quality peanuts.                                      billion by the approximate number of
     years, the improvements in technology                     Consequently, the Board                             peanut producers of 7,500 results in an
     have allowed the industry to utilize                    recommended increasing the percent                    average revenue per producer of
     Segregation 2 peanuts and still meet                    damaged kernel allowance under                        approximately $156,000, well below the
     outgoing quality standards. Further,                    Segregation 1 from not more than 2.49                 SBA threshold for small producers.
     recent changes to the outgoing quality                  percent to not more than 3.49 percent.                   Dividing the two-year average
     standards relaxed the allowance for                     The Board voted 13–2 in support of the                production value of $1.173 billion by
     damaged kernels from 2.5 to 3.5 percent                 proposed changes. One of the two Board                the approximate number of peanut
     for kernels and for cleaned-inshell                     members voting against the changes was                handlers of 60 results in an average
     peanuts (81 FR 50283, published August                  concerned that the decision was being                 revenue per handler of approximately
     31, 2016). This relaxation made                         made without enough data and was                      $19,550,000. Using a normal
     additional peanuts available for sale for               concerned about maintaining the quality               distribution, the majority of handlers
     human consumption. This proposed                        of peanuts. Several Board members                     may be considered large entities.
     change would make a corresponding                       responded that this change was not a                  Further, according to the Foreign
     adjustment to the damage requirements                   new issue for the industry. Further, this             Agricultural Service’s Global
     for incoming peanuts. The change                        change has been well supported by                     Agricultural Trade System, the average
     would relax the allowance for damaged                   producer groups prompting this action.                annual value of peanuts imported into
     kernels under the definition for                        These changes are consistent with the                 the United States for the 2014 and 2015
     Segregation 1 peanuts from 2.49 to 3.49                 Standards and the Act.                                seasons was approximately $67 million.
     percent, which would shift a small                                                                            By dividing the annual average value of
                                                             Initial Regulatory Flexibility Analysis               imported peanuts by the number of
     portion of peanuts from Segregation 2
     into the Segregation 1 category.                           Pursuant to requirements set forth in              importers, the majority of importers
        The effect of this change on the                     the Regulatory Flexibility Act (RFA) (5               would meet the SBA definition for small
     overall quality of peanuts in the                       U.S.C. 601–612), the Agricultural                     agricultural service firms. Consequently,
     industry would be minimal. In                           Marketing Service (AMS) has                           the majority of producers and importers
     considering this issue, the Board                       considered the economic impact of this                may be classified as small entities, but
     reviewed data from the National Center                  action on small entities. Accordingly,                the majority of handlers may be
     for Peanut Competitiveness. The data                    AMS has prepared this initial regulatory              considered large entities when using a
     indicated that roughly one third of                     flexibility analysis.                                 normal distribution.
     Segregation 2 farmers stock peanuts                        The purpose of the RFA is to fit                      This proposed rule would relax the
     would be shifted into the Segregation 1                 regulatory actions to the scale of                    allowance for damaged kernels in
     category under the proposed change.                     businesses subject to such actions in                 farmers stock peanuts when
     Since Segregation 2 historically                        order that small businesses will not be               determining segregation. This action
     composes approximately one percent of                   unduly or disproportionately burdened.                would change the allowance for
     total farmers stock peanuts, this                          Small agricultural producers are                   damaged kernels under Segregation 1
     adjustment would represent a very                       defined by the Small Business                         from not more than 2.49 percent to not
     small shift in overall volume. Therefore,               Administration (SBA) as those having                  more than 3.49 percent. The Board
     the proposed change would have an                       annual receipts of less than $750,000                 believes this proposed rule would align
     insignificant impact on the composition                 and small agricultural service firms,                 incoming farmers stock peanuts
     of Segregation 1 peanuts.                               including handlers and importers, are                 segregation with the outgoing quality
        As the producer value of farmers                     defined as those having annual receipts               standards and increase returns to
     stock peanuts is determined in part by                  of less than $7,500,000 (13 CFR                       producers.
     the category of segregation, the                        121.201).                                                It is not anticipated that this action
     segregation level determined during the                    There are approximately 7,500 peanut               would impose additional costs on
     incoming inspection impacts producer                    producers, 60 peanut handlers,                        handlers, producers, or importers,
     returns. If a producer experiences a shift              operating approximately 70 shelling                   regardless of size. Rather, these changes
     in damage that moves their peanuts                      plants, and 25 importers subject to                   should help improve returns to peanut
     from a Segregation 1 to a Segregation 2,                regulation under the peanut program.                  producers and help lower financial risk.
     it can have a significant financial                        An approximation of the number of                     This proposed rule is expected to
     impact, especially for small producers.                 peanut farms that could be considered                 benefit the industry. The effects of this
     This change would benefit the industry                  small agricultural businesses under the               rule are not expected to be
     by moving more peanuts into the                         SBA definition can be obtained from the               disproportionately greater or less for
     Segregation 1 category. This should                     2012 Agricultural Census, which is the                small handlers, producers or importers
     increase returns and help lower                         most recent information on the number                 than for larger entities.
     financial risk to producers by shifting                 of farms categorized by size. There were                 The USDA has considered
     more peanuts into the higher value                      3,066 peanut farms with annual                        alternatives to these changes. The Act
     Segregation 1 category.                                 agricultural sales valued at less than                requires USDA to consult with the
        This change would also require                       $500,000 in 2012, representing 47                     Board on changes to the Standards. An
     increasing the Segregation 2 criteria                   percent of the total number of peanut                 alternative discussed was to increase the
     from more than 2.49 percent to more                     farms in the U.S. (6,561). According to               damaged kernel percentage up to 4.49
     than 3.49 percent damaged kernels. The                  the National Agricultural Statistics                  percent for Segregation 1. However, the


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                             Federal Register / Vol. 82, No. 100 / Thursday, May 25, 2017 / Proposed Rules                                          24085

     Board believes this alternative would                   to this proposal. Thirty days is deemed               ENVIRONMENTAL PROTECTION
     relax the kernel damage too far.                        appropriate because farmers stock                     AGENCY
     Therefore, this alternative was rejected.               peanuts are already being delivered
        USDA has met with the Board, which                   from the 2016–17 crop. Further, the                   40 CFR Part 52
     is representative of the industry, and                  industry is aware of this proposed                    [EPA–R01–OAR–2017–0102 and EPA–R01–
     has included its recommendations in                     action recommended by the Board. All                  OAR–2016–0758; FRL–9962–02–Region 1]
     this rule.                                              written comments timely received will
        The Act specifies in § 1604(c)(2)(A)                                                                       Air Plan Approval; NH; Nonattainment
                                                             be considered before a final
     that the Standards established pursuant                                                                       New Source Review and Prevention of
     to it may be implemented without                        determination is made on this matter.
                                                                                                                   Significant Deterioration Permit
     regard to the Paperwork Reduction Act                   List of Subjects in 7 CFR Part 996                    Program Revisions; Public Hearing
     of 1995 (44 U.S.C. Chapter 35).                                                                               Revisions for State Permitting
     However, USDA has considered the                          Food grades and standards, Marketing                Programs; Withdrawal of Permit Fee
     reporting and recordkeeping burden on                   agreements, Peanuts, Reporting and                    Program; Infrastructure Provisions for
     handlers and importers under this                       recordkeeping requirements.                           National Ambient Air Quality
     program. This proposed rule would                                                                             Standards
     relax the allowance for damaged kernels                   For the reasons set forth in the
     in farmers stock peanuts when                           preamble, 7 CFR part 996 is proposed to               AGENCY:  Environmental Protection
     determining segregation under the                       be amended as follows:                                Agency (EPA).
     Standards. Recordkeeping requirements                                                                         ACTION: Proposed rule.
     would remain the same. Accordingly,                     PART 996—MINIMUM QUALITY AND
                                                             HANDLING STANDARDS FOR                                SUMMARY:   The Environmental Protection
     this rule would not impose any
                                                             DOMESTIC AND IMPORTED PEANUTS                         Agency (EPA) is proposing to approve
     additional reporting or recordkeeping
                                                             MARKETED IN THE UNITED STATES                         several different State Implementation
     requirements on either small or large                                                                         Plan (SIP) revisions submitted to EPA
     handlers or importers.                                                                                        by the New Hampshire Department of
        Section 1601 of the Act also provides                ■ 1. The authority citation for 7 CFR
                                                                                                                   Environmental Services (NHDES). New
     that amendments to the Standards may                    part 996 continues to read as follows:
                                                                                                                   Hampshire submitted to EPA on
     be implemented without extending                            Authority: 7 U.S.C. 7958.                         October 26, 2016, revisions satisfying
     interested parties an opportunity to
                                                                                                                   the NHDES’s earlier commitment to
     comment. However, due to the nature of                  ■ 2. Section 996.13 is amended by                     adopt and submit provisions that meet
     the proposed changes, interested parties                revising paragraphs (b) and (c) to read               certain requirements of the federal
     are provided with a 30-day comment                      as follows:                                           Prevention of Significant Deterioration
     period.                                                                                                       (PSD) and Nonattainment New Source
        AMS is committed to complying with                   § 996.13    Peanuts.
                                                                                                                   Review (NNSR) air permit program
     the E-Government Act, to promote the                    *      *    *     *      *                            regulations. This proposed action will
     use of the internet and other
                                                                (b) Segregation 1. ‘‘Segregation 1                 convert to full approval EPA’s
     information technologies to provide
                                                             peanuts’’ means farmers stock peanuts                 September 25, 2015 conditional
     increased opportunities for citizen
                                                             with not more than 3.49 percent                       approval of New Hampshire’s PSD and
     access to Government information and
                                                             damaged kernels nor more than 1.00                    NNSR permit programs. This action also
     services, and for other purposes.
        USDA has not identified any relevant                 percent concealed damage caused by                    will approve NHDES’s SIP revisions
     Federal rules that duplicate, overlap or                rancidity, mold, or decay and which are               relating to several New Hampshire
     conflict with this rule.                                free from visible Aspergillus flavus.                 infrastructure SIPs, which were
        The Board’s meeting was widely                                                                             conditionally approved by EPA on
                                                                (c) Segregation 2. ‘‘Segregation 2
     publicized throughout the peanut                                                                              December 16, 2015, and July 8, 2016.
                                                             peanuts’’ means farmers stock peanuts                    Additionally, EPA is also proposing to
     industry and all interested persons were                with more than 3.49 percent damaged
     invited to attend and participate in                                                                          approve: a January 31, 2017 SIP revision
                                                             kernels or more than l.00 percent                     amending the public notice and hearing
     Board deliberations on all issues. Like                 concealed damage caused by rancidity,
     all Board meetings, the September 1,                                                                          procedures for New Hampshire’s NNSR,
                                                             mold, or decay and which are free from                PSD, and minor NSR permit programs;
     2016, meeting was a public meeting and
                                                             visible Aspergillus flavus.                           a January 18, 2017 SIP revision
     all entities, both large and small, were
     able to express views on these issues.                  *      *    *     *      *                            withdrawing the State SIP’s permit fee
     Finally, interested persons are invited to                                                                    system; and a November 17, 2015 SIP
                                                               Dated: May 19, 2017.
     submit comments on this proposed rule,                                                                        revision that addresses the good
                                                             Bruce Summers,                                        neighbor provisions of New
     including the regulatory and
                                                             Acting Administrator, Agricultural Marketing          Hampshire’s infrastructure SIP for the
     informational impacts of this action on                 Service.
     small businesses.                                                                                             2010 nitrogen oxide (NO2) national
        A small business guide on complying                  [FR Doc. 2017–10680 Filed 5–24–17; 8:45 am]           ambient air quality standard (NAAQS).
     with fruit, vegetable, and specialty crop               BILLING CODE 3410–02–P                                This action is being taken in accordance
     marketing agreements and orders may                                                                           with the Clean Air Act (CAA).
     be viewed at: http://www.ams.usda.gov/                                                                        DATES: Written comments must be
     rules-regulations/moa/small-businesses.                                                                       received on or before June 26, 2017.
     Any questions about the compliance                                                                            ADDRESSES: Submit your comments,
     guide should be sent to Richard Lower                                                                         identified by Docket ID No. EPA–R01–
     at the previously mentioned address in                                                                        OAR–2017–0102 and EPA–R01–OAR–
     the FOR FURTHER INFORMATION CONTACT                                                                           2016–0758 at https://
     section.                                                                                                      www.regulations.gov, or via email to
        A 30-day comment period is provided                                                                        mcdonnell.ida@epa.gov. For comments
     to allow interested persons to respond                                                                        submitted at Regulations.gov, follow the


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Document Created: 2018-11-08 08:53:08
Document Modified: 2018-11-08 08:53:08
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionProposed Rules
ActionProposed rule.
DatesComments must be received by June 26, 2017.
ContactSteven 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: [email protected] or [email protected]
FR Citation82 FR 24082 
CFR AssociatedFood Grades and Standards; Marketing Agreements; Peanuts and Reporting and Recordkeeping Requirements

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