This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

63678

Vol. 62, No. 231

Tuesday, December 2, 1997

DEPARTMENT OF AGRICULTURE

Farm Service Agency

7 CFR Part 729

Commodity Credit Corporation

7 CFR Part 1446

RIN 0560–AF16

1998-Crop Peanut National Poundage

Quota, 1998-Crop Additional Peanuts

National Average Support Level and

Minimum Commodity Credit

Corporation (CCC) Export Edible Sales

Price for the 1998 and Subsequent

Crops of Additional Peanuts

AGENCY: Farm Service Agency and

Commodity Credit Corporation, USDA.

ACTION: Proposed rule.

SUMMARY: The Agricultural Adjustment

Act of 1938, (the 1938 Act) as amended,

requires that the national peanut

poundage quota for the 1998 crop be

announced by December 15, 1997. The

Agricultural Act of 1949, (the 1949 Act),

as amended, requires that the additional

support level be announced not later

than February 15, 1998. The minimum

CCC export edible sales price for

additional peanuts is usually

announced at the same time as the price

support level. This proposed rule

suggests a national poundage quota

figure in the range between 1,133,000

short tons (st) and 1,175,000 st,

proposes that the national average

additional price support level for the

1998 crop peanuts be set between $132

per st and $175 per st, and that the

minimum CCC sales price for 1998 and

subsequent crops of additional peanuts

for export edible use be set between

$350 to $400 per st or by formula.

DATES: Comments must be received by

December 9, 1997, in order to be assured

of consideration.

ADDRESSES: Comments must be

submitted to the Director, Tobacco and

Peanuts Division, Farm Service Agency

(FSA), United States Department of

Agriculture, STOP 0514, 1400

Independence Avenue, S.W.,

Washington, DC 20250–0514. All

written submissions will be made

available for public inspection from 8:15

a.m. to 4:45 p.m., Monday through

Friday, except holidays, in Room 5750-

South Building, 1400 Independence

Avenue, S.W., Washington, DC 20250–

0514.

FOR FURTHER INFORMATION CONTACT:

Kenneth M. Robison, Tobacco and

Peanuts Division, FSA, USDA, STOP

0514, 1400 Independence Avenue, S.W.,

Washington, DC 20250–0514, telephone

202–720–9255. Copies of the costbenefit assessment prepared for the rule

can be obtained from Mr. Robison.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This proposed rule has been

determined to be significant and was

reviewed by OMB under Executive

Order 12866.

Federal Assistance Program

The title and number of the Federal

Assistance Program, as found in the

Catalog of Federal Domestic Assistance,

to which this rule applies are:

Commodity Loans and Purchases

—10.051.

Executive Order 12998

This rule has been reviewed in

accordance with Executive Order 12998.

The provisions of this proposed rule do

not preempt State laws, are not

retroactive, and do not involve

administrative appeals.

Regulatory Flexibility Act

It has been determined that the

Regulatory Flexibility Act is not

applicable to this proposed rule since

neither FSA nor CCC is required by 5

U.S.C. 553 or any other provision of law

to publish a notice of proposed

rulemaking with respect to the subject

of these determinations.

Paperwork Reduction Act

These proposed amendments do not

contain information collections that

require clearance by the Office of

Management and Budget under the

provisions of 44 U.S.C. chapter 35.

Discussion

This proposed rule would amend 7

CFR part 729 to set forth the 1998-crop

peanut national poundage quota, and 7

CFR part 1446 to set forth the 1998-crop

national average support level for

additional peanuts and the minimum

CCC sales price for 1998 crop additional

peanuts sold for export edible use.

A. National Poundage Quota

Section 358–1(a)(1) of the 1938 Act, as

amended by the Federal Agricultural

Improvement and Reform Act of 1996

(1996 Act), requires that the Secretary

set a basic national quota for peanuts for

each of the 1996 through 2002

marketing years (MY) at a level that is

equal to the quantity of peanuts (in tons)

that the Secretary estimates will be

devoted in each MY to domestic edible

use (excluding seed) and related uses.

As to seed, section 358–1(b)(2)(B) of the

1938 Act provides that a temporary

allocation of quota pounds for the MY

only in which the crop is planted shall

be made to producers for each of the

1996 through 2002 MYs and that the

temporary seed quota allocation shall be

equal to the pounds of seed peanuts

planted on the farm as may be adjusted

and determined under regulations

prescribed by the Secretary. The MY for

1998-crop peanuts will be from August

1, 1998 through July 31, 1999. Producers

will vote in a referendum on December

1-4, 1997 to determine whether they

approve marketing quotas for MY 1998

to MY 2002.

The national poundage quota for MY

1997 was set at 1,133,000 st. This rule

proposes that the national poundage

quota for MY 1998 be set between

1,133,000 st and 1,175,000 st based on

the following data:

Short tons

97.8%

production

94.3%

production

Domestic Edible

Use:

Domestic food ... 933,000 933,000

On farm and local

sales 9,000 9,000

Related Uses:

Crushing residual 123,000 123,000

Shrinkage and

other losses ... 37,500 37,500

Transfer to quota 5,000 5,000

Subtotal .......... 1,107,500 1,107,500

Allowance for underproduction 25,500 67,500

Totals ............. 1,133,000 1,175,000
Federal Register / Vol. 62, No. 231 / Tuesday, December 2, 1997 / Proposed Rules 63679

The estimate of 1998 domestic food

use was developed in two steps. First,

total domestic edible utilization of

1,088,000 st was estimated by the USDA

Interagency Commodity Estimates

Committee (ICEC). Second, this estimate

was reduced by 155,000 st to exclude

peanut imports, peanut butter imports,

and peanut butter exports. Although

estimates of domestic edible utilization

typically include product exports,

peanut butter exports are generally

either made from, or may otherwise be

credited under section 358(e)(1) of the

1938 Act as being made from additional

peanuts. MY 1997 farm use and local

sales were estimated at 1 percent of

ICEC’s MY 1998 production estimate.

This percentage reflects the average

difference between USDA production

data and Federal-State Inspection

Service inspections data. About one-half

of farm use and local sales is allocated

to food use and the remainder to seed,

which is excluded from quota

determinations under amendments to

the 1938 Act made by the 1996 Act.

The crushing residual represents the

farmer stock equivalent weight of

crushing grade kernels shelled from

quota peanuts. In any given lot of farmer

stock peanuts, a portion of such peanuts

is only suitable for the crushing market.

The quota must be sufficient to provide

for the shelling of both edible and

crushing grades. The crushing residual

identified above reflects the assumption

that crushing grade peanuts will be

about 12 percent, on a farmer stock

basis, of the total of MY 1998 domestic

edible use production.

The allowance for shrinkage and other

losses is an estimate of reduced kernel

weight available for milling as well as

for kernel losses due to damage, fire,

and spillage. These losses were

estimated by multiplying a factor of 0.04

times domestic edible use. This factor is

the minimum shrinkage generally

allowed for calculating obligations of

handlers under section 359a(d)(2)(B)(iv)

of the 1938 Act and is believed to be a

fair estimate of such shrinkage for

purposes of this determination, taking

into account all factors.

Segregation 2 and 3 loan transfers to

quota loan represent transfers of

Segregation 2 and 3 peanuts from

additional price support loan pools to

quota loan pools. Such transfers occur

when quota peanut producers have

insufficient Segregation 1 peanuts to fill

their quotas, yet have Segregation 2 and

3 peanuts in additional loan pools

which would have been eligible to be

pledged as collateral for price support

loans at a discounted quota loan rate.

In addition, an allowance has been

made for underproduction. Under past

legislation, only 92 percent of the quota

had been marketed. Prior to the 1996

crop, at the national level, any

unmarketed pounds up to 10 percent of

the national marketing quota could be

added to the farms basic quota for that

crop year. Under the 1996 Act any quota

pounds not marketed cannot be carried

forward and would be a loss of potential

income for producers, therefore, it is

expected that somewhat more than 92

percent of the quota will be marketed in

MY 1998. In MY 1996 about 97.3

percent was marketed and in MY 1997

about 97.5 percent of quota is expected

to be marketed. It is anticipated that

about 94 to 98 percent of the MY 1998

quota will be marketed.

The lowest proposed 1998 quota

level, as set forth above, reflects

expected growth in domestic

consumption of peanut products

through government purchases, new

uses and a small increase in demand

resulting from lower peanut support

prices in recent years. This level

essentially reflects the assumption that

about 97.8 percent of the quota will be

marketed and adds increased demand

for edible peanuts. The higher range

proposal takes into account the

possibility that marketings of quota

could fall as low as the 94.3 percent

level. This range appears to be a fair

estimate of possible market conditions.

Disappearance of peanuts into

primary products has been relatively flat

over the last year. Overall demand,

including imports, is projected to

increase about 1.5 percent. However,

government support purchases in MY

1996 have increased about 45 percent

from 22,750 st farmer stock (fs) in MY

1995 to 32,200 st (fs) in MY 1996.

A significantly larger quota option

than those presented would lower the

price received by growers from first

buyers and could reduce costs to

consumers for peanut products slightly.

However, it is assumed that a

substantial increase in quota would be

needed to lower the average grower

price to a level near the average national

support price. A quota in the

neighborhood of 1,500,000 tons would

likely result in sufficient quantities of

peanuts delivered at the right time and

place such that the average price would

be only slightly higher than $610 per

ton.

This option only becomes viable if

one assumes greater responsiveness in

demand to additional supplies. One

must assume a significant growth in

demand because of a lower price to

justify this option.

The cost of overestimating demand

would be high. Assuming the demand

for greater supplies of peanuts is slight,

this level of quota could result in a

surplus and a loss on loan placements

for more than 300,000 tons of peanuts.

These peanut losses would be around

$400 a ton. Losses of up to $120 million

would occur and result in producer

assessments of over $100 per ton the

following year. This level of assessment

would lower the effective price received

by producers for quota peanuts in MY

1999 to $500 per ton or less.

Buybacks worked well in MY 1996.

Buyback is a term used to describe a

marketing transaction in which a

producer places additional peanuts

under price support loan at the

additional loan rate and a handler

simultaneously purchases the same

peanuts at the quota support level from

the marketing associations for domestic

edible use. To bolster stocks in MY

1996, the peanut industry bought back

over 100,000 tons of additional peanuts.

In MY 1997, it is anticipated that the

peanut industry will again use the

buyback provisions to purchase about

100,000 tons in order to continue

building stocks. Depending on stock

levels at the beginning of MY 1998, the

peanut industry may again use buybacks

to build stocks.

B. Additional Peanut Support Level

Section 155(b)(2) of the 1996 Act

provides that price support shall be

made available for additional peanuts at

such level as the Secretary determines

will ensure no losses to CCC from the

sale or disposal of such peanuts, taking

into consideration the demand for

peanut oil and peanut meal, expected

prices of other vegetable oils and

protein meals, and the demand for

peanuts in foreign markets.

The MY 1997 price support level for

additional peanuts was announced at

$132 per st on February 14, 1997. The

national average price support rate for

quota peanuts, for each of the 1996

through 2002 crops, was set at $610 per

st by the 1996 Act and is codified at 7

CFR section 1446.103. Regulations

pertaining to price support loan levels

for additional peanuts are found in 7

CFR section 1446.310.

The range for the MY 1998 price

support level for additional peanuts is

recommended to be within the range of

$132 per st and $175 per st. Additional

loan peanuts are sold out of inventory

in order to recoup the price support

loan principal, interest and related

costs. In the proposed price range, if the

edible peanut market deteriorated to a

point that the entire loan inventory was

sold as oil stock, anticipated revenues

should be adequate to ensure no losses

to CCC from the sale or disposal of
63680 Federal Register / Vol. 62, No. 231 / Tuesday, December 2, 1997 / Proposed Rules

additional peanuts. The statutory factors

have been analyzed as set out below:

1. The domestic use of peanut oil

during MY 1998 is forecast to be

105,000 st, up 2,500 st from MY 1997

projected domestic use. MY 1998

peanut oil beginning stocks are expected

to be 35,000 st, down about 19 percent

from MY 1997. The MY 1998 average

peanut oil price is expected to be $0.395

per pound, down $0.018 per pound

from MY 1997.

2. The domestic use of peanut meal

during MY 1998 is forecast to be

150,000 st, unchanged from MY 1997

projected domestic use. MY 1998

peanut meal beginning stocks are

expected to be 4,000 st, unchanged from

MY 1997. The MY 1998 average peanut

meal price is expected to be $152.50 per

st, down $12.50 per st from MY 1997.

3. The domestic disappearance of

soybean oil during MY 1998 is forecast

to be 7,262,500 st, up 1.6 percent from

projected MY 1997 domestic

disappearance. MY 1998 soybean oil

beginning stocks are expected to be

890,000 st, up 11.3 percent from MY

1997. The MY 1998 average soybean oil

price is expected to be $0.230 per

pound, down $0.003 per pound from

MY 1997.

4. The domestic disappearance of

cottonseed oil during MY 1998 is

forecast to be 515,000 st, unchanged

from projected MY 1997 domestic

disappearance. MY 1998 cottonseed oil

beginning stocks are expected to be

42,500 st, up 1.2 percent from MY 1997.

The MY 1998 average cottonseed oil

price is expected to be $0.250 per

pound, down $0.01 per pound from MY

1997.

5. The domestic disappearance of

soybean meal during MY 1998 is

forecast to be 29,000,000 st, up 3.6

percent from projected MY 1997

domestic disappearance. MY 1998

soybean meal beginning stocks are

expected to be 250,000 st, up 25 percent

from MY 1997. The MY 1998 average

soybean meal price is expected to be

$187.50 per st, down $20.00 per st from

MY 1997.

6. The domestic disappearance of

cottonseed meal during MY 1998 is

forecast to be 1,635,000 st, down 0.3

percent from projected MY 1997

domestic disappearance. MY 1998

cottonseed meal beginning stocks are

expected to be 52,000 st, down 16.1

percent from MY 1997. The MY 1998

average cottonseed meal price is

expected to be $140.00 per st, down

$15.00 per st from MY 1997.

7. The world use of peanuts for MY

1997 is expected to be 13.05 million

metric tons, down 10.4 percent from MY

1996. World peanut production for MY

1997 is forecast to be 24.58 million

metric tons, down 7.8 percent from MY

1996. Ending stocks for MY 1997 are

forecast at 0.51 million metric tons, up

4.5 percent from 1996.

MY 1997 begins with record oil stocks

and large imports of oil during MY

1996. Yet, peanut oil prices are

projected to be 41.3 cents per pound.

Based on the supply use situation at the

beginning of MY 1997 and projections

for MY 1998, there are conflicting

signals in the supply price relationship

in the peanut oil market that suggest

caution in setting the additional peanut

support level. Also, based on the 1996/

97 and 1997/98 marketing seasons,

producers are expected to place about

10,000 st of quota peanuts and 140,000

st of additional peanuts under price

support loan.

C. Minimum CCC Sales Price for

Additional Peanuts Sold for Export

Edible Use

A minimum price at which 1998 crop

additional peanuts owned or controlled

by CCC may be sold for use as edible

peanuts in export markets is a

discretionary action that, by practice, is

expected to be announced on or before

February 15, 1998, the same time that

the additional peanut support level for

the 1998 crop is announced. The

announcement of that price provides

producers and handlers with

information to facilitate the negotiation

of private contracts for the sale of

additional peanuts for export.

An overly high price may create an

unrealistic expectation of high pool

dividends and discourage private sales.

If too low, the minimum price could

have an unnecessary, adverse effect on

prices paid to producers for additional

peanuts.

This proposed rule follows the

publication of an advance notice of

proposed rule making of August 18,

1997 published in the Federal Register

(62 FR 43955) soliciting comments

relative to the method for determining

the minimum export edible sales price

for additional peanuts and relative to

what that price should be. Ten

comments were received relative to the

method for determining the minimum

export edible sales price for additional

peanuts and relative to what the price

should be. Seven of the comments were

from organizations representing

producers. The seven producer

organizations commenting favored

maintaining the $400 per st minimum

price. Three comments were from

organizations representing shellers. The

three sheller organizations commenting

favored reducing the minimum export

edible sales price or establishing it by

formula.

Grower groups which favored setting

the minimum export edible sales price

at $400 per st in 1998, argued (1) a fixed

price for the CCC export edible sales

price has worked well for 12

consecutive years, (2) a lower CCC

export edible sales price would result in

lower grower revenues, (3) the decision

of when and at what price to contract is

complex and a formula could create

even more uncertainty and (4) a lack of

a publicly available data series creates

problems and concerns for using a

formula.

Sheller groups, which favored either a

formula or a reduced minimum sales

price argued that new pricing would: (1)

Increase U.S. competitiveness in world

edible peanut markets and (2) increase

U.S. flexibility in marketing peanuts.

One such proposal would base the

minimum export sales price at 10

percent above the current oil value of

peanuts and adjust the price monthly.

Another sheller group recommended

setting the minimum export edible sales

price at between $350 and $375 per st

in 1998 and that the price be reset

annually to account for volatility in

export edible peanut markets.

It is proposed that the minimum price

at which 1998 crop additional peanuts

owned or controlled by CCC may be

sold for use as edible peanuts in export

markets be established within the range

of $350 to $400 per st or be set by

formula. The objective of the level set or

method used is to encourage exports

while providing price stability for

additional peanuts sold under contract.

It should assure handlers that CCC will

not undercut their export-contracting

efforts with offerings of additional

peanuts for export edible sale below the

contract price of the contract additional

peanuts.

List of Subjects

7 CFR Part 729

Peanuts, Penalties, Poundage quotas,

Reporting and recordkeeping

requirements.

7 CFR Part 1446

Loan programs—Agriculture, Peanuts,

Price support programs, Reporting and

recordkeeping requirements,

Warehouses.

Accordingly, it is proposed that 7 CFR

parts 729 and 1446 be amended as

follows:

PART 729—PEANUTS

1. The authority citation for 7 CFR

part 729 continues to read as follows:
Federal Register / Vol. 62, No. 231 / Tuesday, December 2, 1997 / Proposed Rules 63681

Authority: 7 U.S.C. 1301, 1357 et seq.,

1372, 1373, 1375, and 7271.

2. Section 729.216 is amended by

revising paragraph (c) to read as follows:

§ 729.216 National poundage quota.

* * * * *

(c) Quota determination for individual

marketing years (excluding seed):

(1) The national poundage quota

(excluding seed) for quota peanuts for

marketing year 1996 is 1,100,000 short

tons.

(2) The national poundage quota

(excluding seed) for quota peanuts for

marketing year 1997 is 1,133,000 short

tons.

(3) The national poundage quota

(excluding seed) for quota peanuts for

marketing year 1998 will be set between

1,133,000 and 1,175,000 short tons.

PART 1446—PEANUTS

3. The authority citation for 7 CFR

part 1446 continues to read as follows:

Authority: 7 U.S.C. 7271, 15 U.S.C. 714b

and 714c.

4. Section 1446.310 is amended by

adding a new paragraph (c) to read as

follows:

§ 1446.310 Additional peanut support

levels.

* * * * *

(c) The national support rate for

additional peanuts for the 1998 crop

will be at a level which shall be between

$132 per short ton and $175 per short

ton.

5. Section 1446.311 is amended by

adding new paragraph (c) to read as

follows:

§ 1446.311 Minimum CCC sales price for

certain peanuts.

* * * * *

(c) The minimum CCC sales price for

additional peanuts to be sold from the

price support loan inventory for export

edible use from the 1998 and

subsequent crops will be between $350

and $400 per short ton or set by formula

as announced by the Director of the

Tobacco and Peanuts Division, FSA.

Signed at Washington, DC, on November

26, 1997.

Keith Kelly,

Administrator, Farm Service Agency and

Executive Vice President, Commodity Credit

Corporation.

[FR Doc. 97–31573 Filed 11–26–97; 3:08 pm]

BILLING CODE 3410–05–P

SOCIAL SECURITY ADMINISTRATION

20 CFR Part 422

[Regulations No. 22]

RIN 0960–AE36

Permit the Department of State (DOS)

and the Immigration and Naturalization

Service (INS) to Collect Information

Needed to Assign Social Security

Numbers (SSNs) to Aliens

AGENCY: Social Security Administration

(SSA).

ACTION: Proposed rule.

SUMMARY: We are proposing to provide

a description of how DOS and INS will

provide the SSA with information,

collected as part of the immigration

process, to enable SSA to assign SSNs

and issue SSN cards to lawfully

admitted aliens. We also propose: to

amend the rule on the presumption of

authority of a nonimmigrant alien to

accept employment to include

circumstances where a Form I–94,

‘‘Arrival-Departure Record,’’ has not

been issued by INS; to remove outdated

rules on school and alien legalization

enumeration; to remove outdated rules

on the application for a nonwork SSN;

and to specifically acknowledge the

requirement to complete a Form SS–5,

‘‘Application For A Social Security

Card,’’ to obtain a duplicate SSN card.

DATES: To be sure that your comments

are considered, we must receive them

no later than February 2, 1998.

ADDRESSES: Comments should be

submitted in writing to the

Commissioner of Social Security, P.O.

Box 1585, Baltimore, MD 21235, sent by

telefax to (410) 966–2830, sent by E-mail

to ‘‘regulations@ssa.gov’’, or delivered

to the Office of Process and Innovation

Management, Social Security

Administration, L2109 West Low Rise

Building, 6401 Security Boulevard,

Baltimore, MD 21235–0001, between

8:00 A.M. and 4:30 P.M. on regular

business days. Comments may be

inspected during these same hours by

making arrangements with the contact

person shown below.

FOR FURTHER INFORMATION CONTACT:

Daniel T. Bridgewater, Legal Assistant,

Office of Process and Innovation

Management, Social Security

Administration, L2109 West Low Rise

Building, 6401 Security Boulevard,

Baltimore, MD 21235, (410) 965–3298

for information about these rules.

SUPPLEMENTARY INFORMATION:

Background

Currently, SSA assigns an SSN to an

alien when the individual submits to an

SSA field office a completed Form SS–

5 and documentary evidence of age,

identity, and lawful admission for

permanent residence or other authority

of law permitting work in the United

States (U.S.). Any applicant age 18 and

older applying for an original SSN must

appear for an in-person interview at any

SSA field office.

The second phase of the National

Performance Review (NPR), the Federal

Reinventing Government effort, was

announced by the President and Vice

President on December 19, 1994. It was

designed to focus attention on what

each agency does, examining its mission

and looking at its programs and

functions to see if there are ways to

provide better service to the public and,

at the same time, do business in a more

cost-effective manner, i.e., ‘‘make

government work better and cost less.’’

Each agency was asked to assemble a

team to review its own programs and

functions.

SSA’s team worked closely with a

team of representatives from the NPR

and the Office of Management and

Budget (OMB) to develop proposals for

consideration. One of these proposals

was for INS to assist SSA in

enumerating aliens. On April 11, 1995,

the President formally approved SSA’s

reinvention proposals and officially

announced them the next day. When we

began developing this proposal with

INS, we found that we needed to

include DOS to take into consideration

those aliens who enter the U.S. via

foreign service posts.

Proposed Changes

These proposed rules describe the

process by which elements of DOS and

INS would collect and then forward

enumeration information to SSA. Based

on agreements among the three agencies

(SSA, DOS, and INS), DOS and INS will

collect this information, and INS will

electronically transmit the information

to SSA. DOS and INS will modify their

forms to collect this information, and

INS will retain the forms, which will be

made available to SSA when necessary.

Assigning SSNs to aliens when they

enter the U.S., based on information

collected by DOS and INS as part of the

immigration process, would improve

the integrity of the SSN process. There

is widespread counterfeiting of INS

documents, and SSA employees must be

familiar with a variety of INS

documents and determine if those

presented are valid. By having INS

transmit enumeration information

directly to SSA, the potential for SSA

employees to inadvertently accept

inappropriate and/or counterfeit

documents will be reduced.