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[Federal Register Volume 76, Number 27 (Wednesday, February 9, 2011)]
[Rules and Regulations]
[Pages 7096-7098]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-2879]

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 996

[Doc. No. AMS-FV-10-0030; FV10-996-610 Review]

Minimum Quality and Handling Standards for Domestic and Imported 
Peanuts Marketed in the United States; Section 610 Review

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Confirmation of regulations.

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SUMMARY: This action summarizes the results under the criteria 
contained in section 610 of the Regulatory Flexibility Act (RFA), of an 
Agricultural Marketing Service (AMS) review of the Minimum Quality and 
Handling Standards for Domestic and Imported Peanuts Marketed in the 
United States contained in 7 CFR part 996 (Standards). AMS has 
determined that the Standards should be continued.

ADDRESSES: Interested persons may obtain a copy of the review. Requests 
for copies should be sent to the Docket Clerk, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 
Independence Avenue, SW., STOP 0237, Washington, DC 20250-0237; Fax: 
(202) 720-8938; or E-mail: moab.docketclerk@usda.gov. A copy of the 
review may also be obtained via the Internet at: http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Kenneth G. Johnson, DC Marketing Field 
Office, Marketing Order Administration Branch, Fruit and Vegetable 
Programs, AMS, USDA, Unit 155, 4700 River Road, Riverdale, MD 20737; 
Telephone: (301) 734-5243; Fax: (301) 734-5275; or E-mail: 
Kenneth.Johnson@usda.gov; or Martin Engeler, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 2202 
Monterey St., Fresno, California 93721; Telephone: (559) 487-5110; Fax: 
(559) 487-5906; or E-mail: Martin.Engeler@ams.usda.gov.

SUPPLEMENTARY INFORMATION: The Minimum Quality and Handling Standards 
for Domestic and Imported Peanuts Marketed in the United States 
(Standards), as amended (7 CFR part 996), were established at 7 U.S.C. 
7958 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.

[[Page 7097]]

    The Act also provided for establishment of the Peanut Standards 
Board (Board) to advise the Secretary of Agriculture (Secretary) in 
establishing the Standards. The Board is comprised of 18 members. Nine 
of the members are peanut producers representing three producing 
regions, and nine are peanut industry representatives that also 
represent the three producing regions. Board members are nominated by 
the industry and selected by the Department of Agriculture (USDA). The 
Board is responsible for advising the USDA regarding the quality and 
handling requirements under the Standards. USDA is required by the Act 
to consult with the Board prior to making any change to the Standards.
    Currently, it is estimated that there are 8,500 peanut producers in 
the U.S. There are approximately 70 shelling plants operated by 
approximately 55 shelling entities in the industry, and an estimated 25 
importers of peanuts. The Small Business Administration (SBA) defines 
small farms as those having annual receipts of less than $750,000. 
Small agricultural service firms are defined by the SBA as those whose 
annual receipts are less than $7,000,000. It is estimated that 
approximately 90 percent of the peanut producers in the U.S. can be 
considered small businesses under this definition. It is also estimated 
that approximately two-thirds of U.S. peanut handlers can be considered 
small businesses, and nearly all of the importers. The regulations 
implemented under the Standards are applied uniformly to small and 
large entities, and are not intended to have differential impacts based 
on size.
    AMS published in the Federal Register on February 18, 1999 (64 FR 
8014), a plan to review certain regulations under criteria contained in 
section 610 of the RFA (5 U.S.C. 601-612). Updated plans were published 
in the Federal Register on January 4, 2002 (67 FR 525), August 14, 2003 
(68 FR 48574), and again on March 24, 2006 (71 FR 14827). Accordingly, 
AMS published a notice of review and request for written comments on 
the Standards in the April 28, 2010, issue of the Federal Register (75 
FR 22213). The deadline for comments ended June 28, 2010. Several 
comments were received in response to the notice, and are discussed 
later in this document.
    The review was undertaken to determine whether the Standards should 
be continued without being changed, amended, or rescinded to minimize 
the impacts on small entities. In conducting this review, AMS 
considered the following factors: (1) The continued need for the 
Standards; (2) the nature of complaints or comments received from the 
public concerning the Standards; (3) the complexity of the Standards; 
(4) the extent to which the Standards overlap, duplicate, or conflict 
with other Federal rules, and, to the extent feasible, with State and 
local governmental rules; and (5) the length of time since the 
Standards have been evaluated or the degree to which technology, 
economic conditions, or other factors have changed in the area affected 
by the Standards.
    The Standards establish minimum incoming and outgoing quality 
requirements for domestic and imported peanuts marketed in the U.S. 
Mandatory inspection is required to ensure the quality regulations are 
met. The Standards also require positive lot identification (PLI) of 
peanuts so they can be identified and tracked during processing and 
disposition. Finally, the Standards require reporting and recordkeeping 
by handlers and importers.
    The quality and inspection requirements have helped ensure that 
domestic and imported peanuts meet an acceptable quality level before 
being shipped for human consumption. Ensuring a good quality product 
contributes to consumer confidence. The PLI requirements help to 
maintain the identity of peanuts throughout the handling process, thus 
maintaining the integrity of lots being shipped to human consumption 
outlets, lots that are subjected to the reconditioning process, and 
lots that are disposed of to non-human consumption outlets. This helps 
to ensure that nuts certified for human consumption are not commingled 
with lower quality nuts. In addition, the PLI requirements are a useful 
tool in product traceability. The reporting and recordkeeping 
requirements substantiate handler and importer compliance with the 
Standards.
    Regarding complaints or comments received from the public 
concerning the order, AMS received five comments in response to the 
notice of review published in the Federal Register on April 28, 2010 
(75 FR 22213). In addition, nine letters were received from 
congressional representatives after the comment period was closed. All 
of the comments expressed support for outgoing quality requirements 
shipped to human consumption outlets. Three comments received from 
peanut shellers and sheller associations stated that while they support 
the quality requirements, they do not support the PLI and recordkeeping 
requirements associated with reconditioned peanuts. They expressed the 
belief that these requirements result in inefficiencies and unnecessary 
costs to shellers, and that the goal of ensuring peanuts meet minimum 
quality requirements can be achieved without these requirements. They 
further contend that foreign peanut shellers are not subject to the 
same requirements. At least one of the comments pointed out that the 
Board, which is responsible for advising USDA in regard to the 
Standards, has not met in at least two years.
    Two comments from grower associations support the program as it 
currently exists. They support not only the quality standards in place, 
but also the PLI procedures and recordkeeping requirements. These 
comments stated that it is important to track lots of peanuts that fail 
to meet the quality standards to ensure those nuts are disposed of 
properly to protect consumers from poor quality product and to prevent 
potential related problems or issues for the peanut industry. The 
comments cite recent adverse events in the peanut industry as an 
example of the importance of an effective quality control program.
    The nine congressional letters essentially reiterate the comments 
submitted by the peanut shellers and sheller associations. They support 
food quality and safety, but do not support the PLI requirements for 
the same reasons cited above.
    However, as previously discussed, the PLI requirements help to 
maintain the identity of peanuts throughout the handling process and 
are a useful tool in product traceability, and the reporting and 
recordkeeping requirements substantiate compliance with the Standards.
    In considering the complexity of the Standards, AMS has determined 
that they are not unduly complex.
    During the review, the Standards were checked for duplication and 
overlap with other regulations. AMS did not identify any relevant 
Federal rules, or State and local regulations that duplicate, overlap, 
or conflict with the Standards.
    The Standards were established in 2002 and have been revised two 
times, with the last revision occurring in 2005. Since the Standards 
have been in effect, AMS and the U.S. peanut industry have monitored 
their implementation and operation. Changes in regulations have been 
implemented to reflect current industry operating practices, and to 
solve problems as they occur. The goal of periodic evaluations is to 
ensure that the Standards continue to fit the needs of the industry and 
are consistent with the Act.
    The Board meets periodically to discuss issues and to determine if, 
or

[[Page 7098]]

what, changes may be necessary to reflect current industry practices. 
As a result, regulatory changes have been made to the Standards to 
reflect current industry operations and procedures, and continue to 
meet the industry's needs.
    Based upon our review, AMS has determined that the Minimum Quality 
and Handling Standards for Domestic and Imported Peanuts Marketed in 
the United States should be continued. However, USDA believes that a 
meeting with the Board would be beneficial to discuss any potential 
improvements to the program. As required by the Act, The Secretary of 
Agriculture must consult with the Board prior to making any changes to 
the Standards. Any changes to the Standards would then be made by 
notice and comment rulemaking by USDA. All comments would be considered 
in the decision making process by the Board and USDA before 
recommendations are implemented.
    AMS will continue to work with the peanut industry to maintain 
useful and effective quality and handling standards, and in accordance 
with the Act will consult with the Board, as appropriate.

    Dated: February 3, 2011.
Rayne Pegg,
Administrator, Agricultural Marketing Service.
[FR Doc. 2011-2879 Filed 2-8-11; 8:45 am]
BILLING CODE 3410-02-P
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