Federal Register / Vol. 63, No. 117 /Thursday, June 18, 1998 /Rules and Regulations 33237

remain at five cents per bale, and the

minimum charge of $5.00 for services

provided per monthly billing period

will remain the same. The provisions of

§ 28.910 (c) concerning the fee for new

classification memoranda issued from

the central database for the business

convenience of an owner without

reclassification of the cotton will remain

the same.

The fee for review classification in

§ 28.911 will be reduced from $1.40 per

bale to $1.30 per bale.

The fee for returning samples after

classification in § 28.911 will remain at

40 cents per sample.

Finally, the authority citation for

Subpart D of Part 28 was revised at 61

FR 19512. This action would correct

that revision by specifying Subpart D

rather than a reference to Part 28 in its

entirety.

List of Subjects in 7 CFR Part 28

Administrative practice and

procedure, Cotton, Cotton samples,

Grades, Market news, Reporting and

recordkeeping requirements, Standards,

Staples, Testing, Warehouses.

For the reasons set forth in the

preamble, 7 CFR Part 28 is amended as

follows:

PART 28—[AMENDED]

1. The authority citation for part 28,

subpart D, is revised to read as follows:

Authority: 7 U.S.C. 471–476.

2. In § 28.909, paragraph (b) is revised

to read as follows:

§ 28.909 Costs.

* * * * *

(b) The cost of High Volume

Instrument (HVI) cotton classification

service to producers is $1.30 per bale.

* * * * *

3. In § 28.910, paragraph (a) is revised

to read as follows:

§ 28.910 Classification of samples and

issuance of classification data.

(a) (1) The samples submitted as

provided in the subpart shall be

classified by employees of the Division

and classification memoranda showing

the official quality determination of

each sample according to the official

cotton standards of the United States

shall be issued by any one of the

following methods at no additional

charge:

(i) Computer diskettes,

(ii) Computer tapes, or

(iii) Telecommunications, with all

long distance telephone line charges

paid by the receiver of data.

(2) When an additional copy of the

classification memorandum is issued by

any method listed in paragraph (a)(1),

there will be a charge of five cents per

bale. If provided as an additional

method of data transfer, the minimum

fee for each tape or diskette issued shall

be $10.00.

(3) Upon request, computer punch

cards may be issued. The fee for this

service shall be 10 cents per card.

* * * * *

4. In § 28.911, the last sentence of

paragraph (a) is revised to read as

follows:

§ 28.911 Review classification.

(a) * * * The fee for review

classification is $1.30 per bale.

* * * * *

Dated: June 16, 1998.

Enrique E. Figueroa,

Administrator, Agricultural Marketing

Service.

[FR Doc. 98–16376 Filed 6–17–98; 8:45 am]

BILLING CODE 3410–02–P

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 997 and 998

[Docket Nos. FV97–997–1 FIR and FV97–

998–1 FIR]

Peanuts Marketed in the United States;

Relaxation of Handling Regulations

AGENCY: Agricultural Marketing Service

(AMS), USDA.

ACTION: Final rule.

SUMMARY: The Department of

Agriculture (Department) is adopting, as

a final rule, with modifications, the

provisions of an interim final rule (IFR)

that relaxed for 1997 and subsequent

crop peanuts, several provisions

regulating the handling of domestically

produced peanuts marketed in the

United States. This finalization

continues the IFR’s improved efficiency

and reduced program costs resulting in

a similar reduction in assessments

charged Agreement signer and nonsigner handlers.

EFFECTIVE DATE: June 19, 1998.

FOR FURTHER INFORMATION CONTACT:

George J. Kelhart or Jim Wendland,

Marketing Order Administration

Branch, Fruit and Vegetable Programs,

AMS, USDA, P.O. Box 96456, room

2525–S, Washington, D.C. 20090–6456;

telephone: (202) 720–2491, Fax: (202)

205–6632. Small businesses may request

information on compliance with this

regulation by contacting: Jay Guerber,

Marketing Order Administration

Branch, Fruit and Vegetable Programs,

AMS, USDA, P.O. Box 96456, room

2525–S, Washington, D.C., 20090–6456;

telephone: (202) 720–2491, Fax: (202)

205–6632.

SUPPLEMENTARY INFORMATION: This rule

is issued under Marketing Agreement

No. 146 (Agreement)(7 CFR part 998)

and the Agricultural Marketing

Agreement Act of 1937, as amended (7

U.S.C. 601–674), hereinafter referred to

as the ‘‘Act.’’ The Agreement and the

regulations issued thereunder and the

non-signatory peanut handler

regulations (7 CFR part 997) regulate the

quality of domestically produced

peanuts.

The Department is issuing this final

rule in conformance with Executive

Order 12866.

This rule has been reviewed under

Executive Order 12988, Civil Justice

Reform. This rule is not intended to

have retroactive effect. This rule will

not preempt any State or local laws,

regulations, or policies, unless they

present an irreconcilable conflict with

this rule. There are no administrative

procedures which must be exhausted

prior to any judicial challenge to the

provisions of this rule.

Following explanation of each change

to the Agreement’s regulation, the

corresponding change to the nonsignatory handlers’ regulation is

discussed.

Incoming Regulations

Farmers Stock Storage and Handling

Facilities

The Peanut Administrative

Committee (Committee) recommended

amending § 998.100 Incoming quality

regulation for 1996 and subsequent crop

peanuts by removing paragraph (g)

Farmers Stock Storage and Handling

Facilities which previously regulated

the condition of such facilities and

authorized Committee inspection. The

Committee recommended the change to

save approximately $450,000, by

eliminating the positions of the seven

fieldmen whose specified duties

through the 1996 crop year included

spending an estimated 60–65 percent of

their time inspecting and approving

such facilities. The vote was 17 ‘‘For’’

and 1 ‘‘Against’’, with the dissenting

voter contending that the fieldmen were

providing valuable services, their

positions should not be eliminated, and

that inspection and approval of such

facilities by the Committee staff were

important. Handlers contended they

were already paying their own

employees to do facilities inspections

and the cost of such duplication of effort

needed to be eliminated and the

Department issued the change. Also,

this cost-cutting has not adversely
33238 Federal Register / Vol. 63, No. 117 /Thursday, June 18, 1998 /Rules and Regulations

affected quality since peanuts must still

meet the Outgoing Quality Regulation.

Elimination of the regulatory

provision has allowed the Committee to

reduce its non-headquarters staff from

seven to one compliance officer in each

of the three production areas and reduce

the current ‘‘fieldmen’’ staffing costs to

zero. The compliance officers are

conducting compliance audits of

Agreement signers similar to AMS

approved non-signer program

compliance plan procedures, where

AMS Compliance Staff auditors check

non-signers’ records. A revised 1997–98

compliance plan from the Committee

includes these new procedures. AMS

believes this will continue to assure

compliance under the Agreement.

The non-signer regulation contains no

similar requirements for inspection and

approval of such facilities, so no change

is needed to it.

Outgoing Regulations

The Committee unanimously

recommended that § 998.200(a) be

amended to provide that minimum

grade requirements for lots of ‘‘splits’’

(the separated halves of peanut kernels)

be modified to correspond with ‘‘United

States Standards For Grades Of: (1)

Cleaned Virginia Type Peanuts In The

Shell; or (2) Shelled Runner Type

Peanuts; or (3) Shelled Spanish Type

Peanuts; or (4) Shelled Virginia Type

Peanuts’’ (7 CFR part 51: Sections

51.1235–1242; 51.2710-2721; 51.2730–

2741; and 51.2750–2763, respectively).

The increase to 2.00 percent from the

prior 1.50 percent for unshelled peanuts

and damaged kernels was needed to

provide consistency with the grade

standards. Under the former regulation,

a handler could have had a lot of

peanuts which met U.S. Grade

Standards for U.S. Splits, but failed to

meet Agreement requirements for edible

quality. It was initially expected that

this change might reduce the number of

lots needing remilling to meet outgoing

quality requirements by less than 10

percent if it was an average year. But the

1997 crop has been stressed by drought

conditions and the industry in virtually

all peanut producing States has

expressed having some problems with

quality. Thus, this change is now

expected to reduce handlers’ need to

remill by more than 10 percent during

the 1997 crop year, saving an estimated

$30 on each ton not needing to be

remilled.

The only comment received

concerning the IFR, filed by the

Committee, dealt with § 998.200(a). The

Committee urged that portions of Table

2 INDEMNIFIABLE GRADES, which

had been removed by the IFR, be

restored by adding them to the

MAXIMUM LIMITATIONS table. The

IFR modification inadvertently

eliminated all nine of the

INDEMNIFIABLE GRADE categories.

The Committee said its intent was to

cause all edible grade categories of

peanuts to be eligible for

indemnification, not to eliminate any

grade categories. Three of the grade

categories—Runner with splits, Virginia

with splits, and Spanish and Valencia

with splits—are not included in the U.S.

grade standards for peanuts. ‘‘Runner

with splits’’ exists under the American

Peanut Shellers Association’s

specifications but not the other

categories. Therefore, the three not

included in the grade standards need to

be restored, for convenient use by the

peanut industry, since such peanuts still

have a domestic market niche. Federal

Government Commodity Procurement

Program, Farm Service Agency’s

Commodity Operations Division and

many commercial firms had used these

grade categories in contract

specifications to purchase such peanuts.

Also, to be consistent with the other

maximum tolerances in the ‘‘Unshelled

peanuts and damaged kernels’’ column

and the ‘‘Unshelled peanuts and

damaged kernels and minor defects’’

column, the percentage tolerances for

the three restored categories need to be

relaxed to 1.50 percent from 1.25 and to

2.50 percent from 2.00, respectively.

Therefore, the three ‘‘* * * with splits’’

type and grade categories and their

relaxed tolerances need to be

incorporated into the MAXIMUM

LIMITATION table in § 998.200(a) and

§ 997.30(a). This simplifies grade

requirements by having only one set of

quality requirements for human

consumption use. The Department

agrees with the comment and includes

the changes in this finalization of the

IFR. This relaxation in tolerances will

reduce the number of lots that need to

be reconditioned to meet outgoing

quality requirements. This will save

signer handlers reconditioning and

storage costs.

Similar changes are made to the

corresponding § 997.30(a) of the nonsigner regulation, with proportional

savings on such handlers’ much smaller

volume.

The Committee unanimously

recommended that § 998.200(h)(1) be

amended to allow lots of peanuts which

fail edible quality requirements, due to

excessive fall through, to be custom

blanched. However, such lots will have

to be certified as meeting minimum ‘‘fall

through’’ requirements after blanching.

This finalization continues the

elimination of the former requirement

that prior to movement of such peanuts,

handlers had to submit a form to the

Committee and receive authorization for

movement and blanching of each such

lot.

Section 997.40(d) of the non-signer

regulation currently does not require

such handlers to submit a request to the

Department and receive authorization

for movement and blanching of each

such lot. Therefore, no similar change to

that provision is needed. However, this

finalization continues the IFR’s

amendment which added ‘‘fall through’’

to the category of items allowed in the

first and third sentences.

The Committee also unanimously

recommended a further change to

paragraph (h), specifically that

subparagraphs (h)(1) and (h)(2) be

further amended to provide that reject

peanuts may be placed in suitable

containers acceptable to the Committee.

The current requirement specifies

‘‘bagged’’, which refers to the older

standard-sized burlap bags, which hold

approximately 110 pounds. It does not

include the many newer and more

efficient containers which are easier to

handle such as tote bags, corrugated

containers (including those with

capacities of over a ton), Super Sacks,

and other various company containers

used by individual peanut product

manufacturers. This finalization will

continue the IFR’s change which

allowed handlers to use more efficient

containers or those desired by their

customers. For purposes of this

provision, most any container that

handlers use will be considered

suitable.

Section 997.40(c) of the non-signer

regulation previously provided for ‘‘in

bulk or bags or other suitable

containers.’’ This finalization continues

the IFR’s change to make it consistent

with the Agreement’s amended

regulation, by removing the words ‘‘in

bulk or.’’ The same applies to

paragraphs (d) and (e) which were

amended by removing the word

‘‘bagged’’ and replacing it with the

words ‘‘placed in suitable containers.’’

The Committee also unanimously

recommended that § 998.200 Outgoing

quality regulation and § 998.300 Terms

and conditions of indemnification

* * * be amended to make all lots of

edible quality peanuts indemnifiable,

for freight reimbursement, when

rejected on appeal after being certified

‘‘negative’’ as to aflatoxin. This

finalization continues the IFR’s changes

to provisions specified in § 998.300,

making product claim lots of edible

quality peanuts also indemnifiable. This

involves lots where a handler sustained

a loss as a result of a buyer withholding
Federal Register / Vol. 63, No. 117 /Thursday, June 18, 1998 /Rules and Regulations 33239

from human consumption any or all of

the product made from a lot of peanuts

which had been determined to be

unwholesome due to aflatoxin after

such lot had originally been certified

‘‘negative’’ as to aflatoxin. This change

provided consistency by treating all

edible quality peanuts equally, whether

appeal claims or product claims.

Although these changes have further

reduced costs and promoted uniformity

in the handling of indemnification of all

edible quality peanuts, there is no way

to accurately quantify how much these

reductions have been, because the

savings are different for each handler.

However, the total savings are expected

to be a minor fraction of the projected

approximately $350,000 total 1997 crop

indemnification costs.

The non-signer enabling legislation

does not provide authority for

indemnification. Therefore, no similar

change was needed in the non-signer

regulation.

The Committee further unanimously

recommended that § 998.200(h)(3) be

amended to provide that peanuts which

have been certified as meeting

minimum grade requirements specified

in § 998.200(a)(1), but fail to meet

requirements for aflatoxin, may be

roasted while being blanched prior to

being certified as meeting the aflatoxin

requirements. After roasting, such

peanuts must be sampled and assayed

for aflatoxin content but do not have to

be re-sampled and analyzed for grade

again. This simplified process was

recommended by the Committee and

issued in the IFR by the Department.

Prior to the IFR, such blanched peanuts,

after certification, were often returned to

the blancher for additional heating. This

finalization continues the IFR’s

favorable effects of not having to remove

the blanched peanuts short of the

complete roasting process for sampling

and aflatoxin analysis, and then running

them back through the blancher again.

This added costs to the roasting process

and usually caused additional,

unintentional damage due to the extra

handling of the kernels. Also, the

roasting enhances the blanching efforts

to eliminate aflatoxin, thus improving

the wholesomeness, quality and value of

such shelled peanuts. The savings

involved in blanching and roasting in

one step may often outweigh the

approximately $40 per hour costs of

having an inspector present during this

process to maintain needed positive lot

identification. Any residual peanuts,

excluding skins and hearts, resulting

from this roasting process, must be red

tagged and disposed of to inedible

peanut outlets. The same factors apply

to § 997.40(d) of the non-signer

regulation.

This finalization continues the IFR’s

provision that unchanged portions of

the incoming and outgoing regulations

that were in effect for 1996 and

subsequent crop peanuts will remain in

effect for 1997 and subsequent crop

peanuts.

An interim final rule concerning this

action was published in the Federal

Register on January 16, 1998 (63 FR

2846). A 60-day comment period, which

ended on March 17, 1998, was provided

to allow interested persons to respond

to the interim final rule. One comment

was received during the comment

period. That comment was discussed

earlier in this document, as a part of the

discussion of changes in the regulations.

The Regulatory Flexibility Act and

Effects on Small Businesses

Pursuant to requirements set forth in

the Regulatory Flexibility Act (RFA), the

Agricultural Marketing Service (AMS)

has considered the economic impact of

this action on small entities.

Accordingly, AMS has prepared this

final regulatory flexibility analysis.

The purpose of the RFA is to fit

regulatory actions to the scale of

business subject to such actions in order

that the small businesses will not be

unduly or disproportionately burdened.

Marketing agreements and orders issued

pursuant to the Act, and the rules issued

thereunder, are unique in that they are

brought about through group action of

essentially small entities acting on their

own behalf. Thus, both statutes have

small entity orientation and

compatibility.

There are approximately 27 signatory

and 30 non-signatory peanut handlers

who are currently subject to regulations

under the Agreement and non-signer

program respectively and approximately

25,000 commercial peanut producers in

the 16-State production area. Small

agricultural service firms, which

include handlers, have been defined by

the Small Business Administration (13

CFR 121.601) as those having annual

receipts of less than $5,000,000, and

small agricultural producers are defined

as those having annual receipts of less

than $500,000. Approximately 25

percent of the signatory handlers,

virtually all of the non-signers, and most

of the producers may be classified as

small entities. This action will be

favorable to the industry by tending to

improve efficiency, reduce costs, and

increase returns.

This finalization will continue the

IFR’s relaxations to handling regulations

by simplifying requirements; thus,

enabling handlers, both large and small,

to cut costs and more efficiently handle

their peanut supplies, without

jeopardizing safeguard requirements in

the current regulations.

The relaxations included:

1. The elimination of the requirement

for inspection and approval of farmers

stock storage and handling facilities has

saved approximately $450,000 by

eliminating the positions of the seven

fieldmen, who had performed this

activity through last crop year. Handlers

contended they were already paying

their own employees to do this and that

the duplicate cost should be eliminated;

2. Relaxing the minimum grade

requirements for ‘‘splits’’ to correspond

with U.S. grade standards will likely

reduce the number of lots which need

to be remilled during the 1997 crop by

10 percent, due to stressed growing

conditions in virtually all areas. This

should result in significant reductions

in handlers’ costs;

3. Another IFR relaxation provided

that all lots of edible quality peanuts,

whether appeal claims or product

claims, are eligible for Agreement signer

handlers’ indemnification benefits.

Thus, such handlers with product claim

lots are also eligible for reimbursement

of most transportation expenses on such

lots. Such additional reimbursement

was not publicly quantified by the

Committee, but is a minor portion of its

projected $350,000 total 1997 crop

indemnification costs;

4. The IFR’s relaxed provision to

allow lots which fail edible quality

requirements, due to excessive fall

through, to be custom blanched

eliminates the previous requirement

that handlers had to submit a form to

the Committee and receive

authorization for movement and

blanching of each such lot. This

relaxation has eliminated unnecessary

paperwork and saved time for all

affected handlers;

5. Relaxing the previous requirement

that peanuts be ‘‘bagged’’ (i.e., placed

only in older standard-size burlap bags

holding approximately 110 pounds) by

allowing the use of suitable containers,

which permits use of the many newer

and more efficient containers or those

desired by handlers’ customers; and

6. Another relaxation allowed peanuts

which had been certified as meeting the

minimum grade requirements, but failed

to meet requirements for aflatoxin, to be

roasted while being blanched prior to

being certified as meeting the aflatoxin

requirements. This simplified process

eliminated running such peanuts back

through the blancher again for roasting,

which doubled the processing costs and

tended to lower the peanuts’ quality and

value by causing additional damage to
33240 Federal Register / Vol. 63, No. 117 /Thursday, June 18, 1998 /Rules and Regulations

them. Such savings may outweigh the

approximately $40 per hour expense of

having an inspector present to maintain

needed positive lot identification.

The IFR’s relaxed requirements have

significantly improved efficiency and

enabled the Committee to cut in half its

1997 crop year administrative budget

and assessment rate charged Agreement

signer and non-signer handlers to

finance their respective programs. The

rate of assessment for the 1996 crop year

was $0.70 per net ton of assessable

peanuts. The rate for the 1997 crop year

was reduced to $0.35 per net ton by an

earlier rulemaking action, as published

in the September 17, 1997, issue of the

Federal Register (62 FR 48749). This

lower rate saved regulated domestic

handlers approximately $500,000 in

administrative assessment costs which,

to a great extent, was made possible by

the IFR’s relaxation actions.

The finalization continues the IFR’s

specifics of each change and why they

tended to increase returns to handlers,

which were covered in detail near the

beginning of this rule under the

discussion starting with ‘‘Incoming

regulations.’’ These IFR changes relaxed

requirements on regulated domestic

peanut handlers, improved their

efficiency and cut costs, and benefitted

the peanut industry, manufacturers, and

consumers, while still assuring the

quality of all peanuts in domestic

human consumption markets.

As with all Federal marketing

agreement and order programs, reports

and forms are periodically reviewed to

reduce information requirements and

duplication by industry and public

sectors. Consistent with the Paperwork

Reduction Act (44 U.S.C. Chapter 35),

the Committee unanimously

recommended greatly reducing

reporting and recordkeeping

requirements on both large and small

peanut handlers regulated under the

Agreement. It has eliminated 20 of the

21 Committee forms previously

approved by the Office of Management

and Budget (OMB) that might

accompany peanut shipments, to only

require the use of the Form PAC–1. The

PAC–1 is mailed to handlers on a

monthly basis and is used to report

receipts and acquisitions of farmers

stock peanuts and to remit assessments.

It is estimated that this has eliminated

95 percent (or about 2,291 hours and

assuming $10 per hour, saving

respondents nearly $23,000 in costs) of

the previous estimated 2,417 hours of

total reporting burden on Agreement

signers, including small businesses, and

a proportional reduction in non-signers’

smaller reporting burdens. A notice of

the proposed revision was published in

the July 31, 1997, issue of the Federal

Register (62 FR 41021). Sixty days were

allowed for comments. One comment

was received, from the American Peanut

Shellers Association, supporting the

reduced burdens. This information

collection package was approved by the

OMB under OMB Control No. 0581–

0067.

In addition, the Department has not

identified any Federal rules that

duplicate, overlap, or conflict with this

finalization.

Further, the Committee’s meeting was

widely publicized throughout the

peanut industry and all interested

persons were invited to attend the

meeting and participate in the

Committee’s deliberations. Like all

Committee meetings, the April 29–30,

1997, meeting was a public meeting and

all entities, both large and small, were

able to express their views on the issues.

The 18-member Committee is composed

of an equal number of peanut handlers

and producers, the majority of whom

are small entities.

Also, the Committee has a number of

appointed subcommittees to review

certain issues and make

recommendations to the Committee.

The Committee’s Regulations,

Indemnification and Quality

Subcommittee and ‘‘New Concept’’

Subcommittee met on January 28, 1997,

and discussed these issues in detail. On

March 25, 1997, the Committee held an

informational meeting to hear a

presentation by the National Peanut

Council’s Peanut Industry Revitalization

Project Steering Committee and discuss

the issues and then take back to discuss

with their industry peers, before voting

on those issues at the April Committee

meeting. The Committee’s

Administrative Budget Subcommittee

also met March 25, 1997, to discuss

budget recommendations. All of these

meetings were public meetings and both

large and small entities were able to

participate and express their views.

An objective of the two domestic

programs is to ensure that only high

quality and wholesome peanuts enter

human consumption markets in the

United States. About half of the

domestic commercial handlers,

handling approximately 95 percent of

the crop volume, have signed the

Agreement. The other half are nonsignatory handlers handling the

remaining 5 percent of the domestic

production.

Under these regulations, farmers stock

peanuts with visible Aspergillus flavus

mold (the principal source of aflatoxin)

are required to be diverted to inedible

uses. Each lot of milled peanuts must be

sampled and the samples chemically

analyzed for aflatoxin content. Costs to

administer the Agreement and to

reimburse the Department for oversight

of the non-signatory program are paid

by an administrative assessment levied

on handlers in the respective programs.

The 18-member Committee, which is

composed of an equal number of peanut

producers and handlers, meets at least

annually to review the Agreement’s

rules and regulations, which are

effective on a continuous basis from one

crop year to the next which begins July

1. Committee meetings are open to the

public, and interested persons may

express their views at these meetings.

The Department evaluates Committee

recommendations, as well as

information from other sources, prior to

making any recommended changes to

the regulations under the Agreement.

Section 608b of the Act was amended

in 1989 to require that all peanuts

handled by persons who have not

entered into the Agreement (nonsigners) be subject to the same quality

and inspection requirements to the same

extent and manner as are required under

the Agreement. Section 608b was

further amended in 1993 to impose

similar requirements regarding

administrative assessments. The nonsignatory handler regulations have been

amended several times thereafter and

are published in 7 CFR part 997.

Thus, the Committee’s recommended

changes to the Agreement signers’

regulations, as finalized in this rule, also

are finalized for the non-signers’

regulations. This finalization of an IFR

identifies the corresponding change to

the non-signers’ regulations for each

change to the Agreement regulations.

According to the Committee, the

domestic peanut industry has been

undergoing a period of great change.

The Committee bases its view, in part,

on findings in a recent study entitled

‘‘United States Peanut Industry

Revitalization Project’’ developed by the

National Peanut Council and the

Department’s Agricultural Research

Service (May 1996).

According to that study, the U.S.

peanut industry has been in a period of

dramatic economic decline since 1991

because: (1) Per capita peanut

consumption has steadily declined a

total of 11 percent; (2) harvested acreage

has declined 25 percent; (3) production

has declined 30 percent and farm value

dropped 29 percent; and (4) imports of

peanuts and peanut products have

increased from insignificant quantities

to 48,736 raw farmer stock tons in 1995,

and to 55,536 in 1996.

That study points to recent increases

in the duty-free import quota for raw

peanuts due to the North American
Federal Register / Vol. 63, No. 117 /Thursday, June 18, 1998 /Rules and Regulations 33241

Trade Agreement (NAFTA) and the

Uruguay Round Agreements under the

General Agreement on Tariffs and Trade

(GATT). Under Section 22 import quota

provisions, the volume of U.S. peanut

imports had been limited to about 2.3

million pounds, in-shell basis, annually.

Thus, imports have historically

represented about one-tenth of 1 percent

of U.S. food use of peanuts. Under

NAFTA, Mexico has been granted a

minimum access level for duty-free

entry of peanuts of about 10 million

pounds, in-shell basis. This level will

increase about 3 percent annually

through 2008, when quantitative limits

will cease. Mexico’s 1998 duty-free

quota will total 8.4 million pounds.

Under GATT, the 1997 quota was 86.8

million pounds, has increased to 96.8

million pounds (Argentina 81.3 & all

other 15.5) in 1998, and can grow to

about 125 million pounds in the year

2000.

The study also projects that farm

production costs and revenue will be

equal by the year 2000, as will handler

costs and revenue, leaving no profit.

In addition, the modification of the

Federal farm peanut poundage quota

regulations implemented under the

Agricultural Market Transition Act of

1996 (1996 Act) has resulted in the

domestic industry undergoing

significant changes scheduled to

continue through the year 2002. The

peanut support price has been reduced

from $670 per ton in 1995 to $610 per

ton through 2002. The USDA’s Farm

Service Agency final rule implementing

the Act was published May 9, 1997, (62

FR 25433). That rule indicates that

economic impacts of the 1996 Act

include expected reductions in

domestic peanut producers’ revenue of

$1.25 billion from 1996 through 2002.

Quota lease holders could absorb a loss

of about $40 million annually because

of reduced leasing rates due to the lower

peanut price support. Also, capitalized

value of quotas could decline $200 to

$300 million, thus reducing land values

and the tax base of rural communities.

The Committee agrees that all of these

factors combined show that the

domestic peanut industry is in decline

and that the outlook is not expected to

change without some positive

intervention by the industry.

World supply and demand are less

important for peanuts than most U.S.

farm commodities. Much of the world

peanut production is for non-food uses,

although production for food use might

increase a little if there were no U.S.

import restrictions. Also, import quotas,

though increased recently, still are set at

relatively low levels.

Domestic peanut production in 1996

was approximately 3.66 billion pounds,

with a farm value of slightly under $1

billion. The Department reports U.S.

peanut production in 1997 totaled 3.54

billion pounds, down 3 percent from the

1996 crop. Harvested acreage for 1997

was 1.41 million acres, up 2 percent

from 1996. USDA estimates that acreage

will increase by 3 percent in 1998. The

U.S. yield per harvested acre for 1997

averaged 2,507 pounds, down 146

pounds from 1996. The 1997 marketing

year average price received by farmers

for peanuts is 26.4 cents per pound,

down 1.7 cents from 1996. The value of

peanut production for the 1997 crop is

reported as $932 million, down 9

percent from a year earlier.

Production is expected to gradually

increase to the year 2002 because

domestic food use is projected to rise

about 1.5 percent annually. Imports are

expected to remain at a relatively small

percentage of total U.S. peanut use.

Estimated exports of 750 million

pounds in Marketing Year (MY) 1997

are below the average for the prior 3

years, but are 11 percent more than a

year earlier. Peanut oil prices are

expected to average about 38 cents a

pound of oil in MY 1997, 6 percent

lower than MY 1996 as vegetable oil

supplies return to more normal levels.

Peanut meal prices for MY 1997 are

expected to decline to $175 a ton, down

25 percent from MY 1996 because of

larger soybean meal supplies.

The 28.5 cents per pound season

average price of farmer stock peanuts for

MY 1997 was the lowest price of the last

two years and reflects the adjustment to

the reduced quota support level and an

unexpected change in the proportions of

quota and additionals in 1997

production. Average prices to growers

are expected to increase, but will remain

below 1995 prices because of the lower

quota price support level. The value of

farm production is expected to

gradually rise and surpass that of 1995

by 2000/01.

The IFR changes of the Agreement’s

Incoming and Outgoing regulations for

1997 and subsequent crop peanuts being

finalized in this rule were

recommended by the Committee at its

April 29–30, 1997, public meeting.

Alternative Actions Considered

Although the Committee could have

recommended no changes or less

changes to the current regulations, it

unanimously concluded that those were

not satisfactory solutions. It believes

that all possible simplification and costcutting should be done and that these

regulations should focus more on

outgoing quality and less on the shelling

and milling processes necessary to meet

the outgoing, human consumption

requirements. Newer, high technology

milling and blanching equipment enable

handlers to recondition failing peanut

lots that could not have been

economically reconditioned when the

regulations were first promulgated.

Therefore, it is no longer necessary to

impose restrictions that hinder the

efficiency of handling operations and

result in the loss of potentially good

quality peanuts. Thus, the Committee

believes this finalization will tend to

improve the returns to growers and

handlers, while still maintaining

consumer safeguard provisions in the

current domestic regulations, because

all peanuts intended for human

consumption must still be inspected

and certified acceptable for such use.

After review of the recommendations

and comment of the Committee, the

Department concurs that this

finalization of the changes will tend to

improve returns to the industry and be

in the public interest. Expected benefits

of the changes were covered in the

previous discussion of each individual

change.

In accordance with the Paperwork

Reduction Act of 1995 (44 U.S.C.

Chapter 35) information collection

requirements that are contained in this

rule have been previously approved by

the OMB and have been assigned OMB

Nos. 0581–0067 (for Agreement signers)

and 0581–0163 (for non-signers).

One comment concerning the IFR was

received during the 60-day comment

period. That comment was discussed

earlier in this document, as a part of the

discussion of changes in the regulations.

After consideration of all relevant

material presented, including the

Committee’s recommendations and

comment, and other information, it is

found that finalizing the IFR with

changes, as hereinafter set forth, will

tend to effectuate the declared policy of

the Act.

It is further found that good cause

exists for not postponing the effective

date of this rule until 30 days after

publication in the Federal Register (5

U.S.C. 553) because this final rule

adopts with appropriate changes the

provisions of the interim final rule;

based upon a comment received, the

provisions of the interim final rule have

been modified; this rule relaxes several

provisions of the regulations; and the

end of the 1997–98 crop year is June 30,

1998.
33242 Federal Register / Vol. 63, No. 117 /Thursday, June 18, 1998 /Rules and Regulations

List of Subjects

7 CFR Part 997

Food grades and standards, Peanuts,

Reporting and recordkeeping

requirements.

7 CFR Part 998

Marketing agreements, Peanuts,

Reporting and recordkeeping

requirements.

Accordingly, the interim final rule

amending 7 CFR parts 997 and 998

which was published in the Federal

Register at 63 FR 2846 on January 16,

1998, is adopted as a final rule with the

following changes:

PART 997—PROVISIONS

REGULATING THE QUALITY OF

DOMESTICALLY PRODUCED

PEANUTS HANDLED BY PERSONS

NOT SUBJECT TO THE PEANUT

MARKETING AGREEMENT

1. The authority citation for 7 CFR

part 997 continues to read as follows:

Authority: 7 U.S.C. 601–674.

2. In § 997.30, in paragraph (a)(1), the

‘‘Maximum Limitations’’ table is revised

to read as follows:

§ 997.30 Outgoing regulation.

* * * * *

MAXIMUM LIMITATIONS

[Excluding lots of ‘‘splits’’]

Type and grade category

Unshelled

peanuts

and

damaged

kernels

(percent)

Unshelled

peanuts,

damaged

kernels and

minor defects

(percent)

Fall through

Foreign materials

(percent)

Moisture

Sound split and bro- (percent)

ken kernels

Sound whole kernels Total

Runner ..................... 1.50 2.50 3.00%; 17⁄64 inch

round screen.

3.00%; 16⁄64 × 3⁄4

inch slot screen.

4.00% Both

screens.

.20 9.00

Virginia (except No.

2).

1.50 2.50 3.00%; 17⁄64 inch

round screen.

3.00%; 15⁄64 × 1

inch slot screen.

4.00% Both

screens.

.20 9.00

Spanish and Valencia.1.50 2.50 3.00%; 16⁄64 inch

round screen.

3.00%; 15⁄64 × 3⁄4

inch slot screen.

4.00% Both

screens.

.20 9.00

No. 2 Virginia ........... 1.50 3.00 6.00%; 17⁄64 inch

round screen.

6.00%; 15⁄64 × 1

inch slot screen.

6.00% Both

screens.

.20 9.00

Runner with splits

(not more than

15% sound splits).

1.50 2.50 3.00% 17⁄64 inch

round screen.

3.00% 16⁄64 × 3⁄4

inch slot screen.

4.00% Both

screens.

.10 9.00

Virginia with splits

(not more than

15% sound splits).

1.50 2.50 3.00% 17⁄64 inch

round screen.

3.00% 15⁄64 × 1 inch

slot screen.

4.00% Both

screens.

.10 9.00

Spanish & Valencia

with splits (not

more than 15%

sound splits).

1.50 2.50 3.00% 16⁄64 inch

round screen.

2.00% 15⁄64 × 3⁄4

inch slot screen.

4.00% Both

screens.

.10 9.00

Lots of ‘‘splits’’

Runner (not more

than 4% sound

round whole kernels).

2.00 2.50 3.00%; 17⁄64 inch

round screen.

3.00%; 14⁄64 × 3⁄4

inch slot screen.

4.00% Both

screens.

.20 9.00

Virginia (not less

than 90% splits).

2.00 2.50 3.00%; 17⁄64 inch

round screen.

3.00%; 14⁄64 × 1

inch slot screen.

4.00% Both

screens.

.20 9.00

Spanish & Valencia

(not more than 4%

sound whole kernels).

2.00 2.50 3.00%; 16⁄64 inch

round screen.

3.00%; 13⁄64 × 3⁄4

inch slot screen.

4.00%; Both

screens.

.20 9.00

* * * * *

PART 998—MARKETING AGREEMENT REGULATING THE QUALITY OF DOMESTICALLY PRODUCED PEANUTS

1. The authority citation for 7 CFR part 998 continues to read as follows:

Authority: 7 U.S.C. 601–674.

2. In § 998.200, in paragraph (a)(1) the ‘‘Maximum Limitation’’ table is revised to read as follows:

§ 998.200 Outgoing quality regulation for 1997 and subsequent crop peanuts.

* * * * *
Federal Register / Vol. 63, No. 117 /Thursday, June 18, 1998 /Rules and Regulations 33243

MAXIMUM LIMITATIONS

[Excluding lots of ‘‘splits’’]

Type and grade category

Unshelled

peanuts and

damaged

kernels

(percent)

Unshelled

peanuts,

damaged

kernels and

minor defects

(percent)

Fall through

Foreign materials

(percent)

Moisture

Sound split and bro- (percent)

ken kernels

Sound whole kernels Total

Runner ..................... 1.50 2.50 300%; 17⁄64 inch

round screen.

3.00%; 16⁄64 × 3⁄4

inch slot screen.

4.00% ............... .20 9.00

Virginia (except No.

2).

1.50 2.50 3.00%; 17⁄64 inch

round screen.

3.00%; 15⁄64 × 1

inch slot screen.

4.00% Both

screens.

.20 9.00

Spanish and Valencia.1.50 2.50 3.00%; 16⁄64 inch

round screen.

3.00%; 15⁄64 × 3⁄4

inch slot screen.

4.00% Both

screens.

.20 9.00

No. 2 Virginia ........... 1.50 3.00 6.00%; 17⁄64 inch

round screen.

6.00%; 15⁄64 × 1

inch slot screen.

6.00% Both

screens.

.20 9.00

Runner with splits

(not more than

15% sound splits).

1.50 2.50 3.00%; 17⁄64 inch

round screen.

3.00%; 16⁄64 × 3⁄4

inch slot screen.

4.00% Both

screens.

.10 9.00

Virginia with splits

(not more than

15% sound splits).

1.50 2.50 3.00%; 17⁄64 inch

round screen.

3.00%; 15⁄64 × 1

inch slot screen.

4.00% Both

screens.

.10 9.00

Spanish & Valencia

with splits (not

more than 15%

sound splits).

1.50 2.50 3.00%; 16⁄64 inch

round screen.

2.00%; 15⁄64 × 3⁄4

inch slot screen.

4.00% Both

screens.

.10 9.00

Lots of ‘‘splits’’

Runner (not more

than 4% sound

whole kernels).

2.00 2.50 3.00%; 17⁄64 inch

round screen.

3.00%; 14⁄64 × 3⁄4

inch slot screen.

4.00% Both

screens.

.20 9.00

Virginia (not less

than 90% splits).

2.00 2.50 3.00%; 17⁄64 inch

round screen.

3.00%; 14⁄64 × 1

inch slot screen.

4.00% Both

screens.

.20 9.00

Spanish and Valencia (not more than

4% sound whole

kernels).

2.00 2.50 3.00%; 16⁄64 inch

round screen.

3.00%; 13⁄64 × 3⁄4

inch slot screen.

4.00% Both

screens.

.20 9.00

* * * * *

Dated: June 12, 1998.

Robert C. Keeney,

Deputy Administrator, Fruit and Vegetable

Programs.

[FR Doc. 98–16269 Filed 6–17–98; 8:45 am]

BILLING CODE 3410–02–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. 97–NM–71–AD; Amendment

39–10601; AD 98–13–13]

RIN 2120–AA64

Airworthiness Directives; Mitsubishi

Heavy Industries Ltd. Model YS–11 and

YS–11A Series Airplanes

AGENCY: Federal Aviation

Administration, DOT.

ACTION: Final rule.

SUMMARY: This amendment adopts a

new airworthiness directive (AD),

applicable to all Mitsubishi Model YS–

11 and YS–11A series airplanes. This

amendment requires revising the

Airplane Flight Manual (AFM) to

prohibit positioning the power levers

below the flight idle stop. This

amendment is prompted by incidents

and accidents involving airplanes

equipped with turboprop engines in

which the propeller beta was used

improperly during flight. The actions

specified by this AD are intended to

prevent loss of airplane controllability

or engine overspeed with consequent

loss of engine power caused by the

power levers being positioned below the

flight idle stop while the airplane is in

flight.

EFFECTIVE DATE: July 23, 1998.

ADDRESSES: Information pertaining to

this amendment may be examined at the

Federal Aviation Administration (FAA),

Transport Airplane Directorate, Rules

Docket, 1601 Lind Avenue, SW.,

Renton, Washington.

FOR FURTHER INFORMATION CONTACT:

Mark Quam, Aerospace Engineer,

Standardization Branch, ANM–113,

FAA, Transport Airplane Directorate,

1601 Lind Avenue SW., Renton,

Washington 98055–4056; telephone

(425) 227–2145; fax (425) 227–1149.

SUPPLEMENTARY INFORMATION: A

proposal to amend part 39 of the Federal

Aviation Regulations (14 CFR part 39) to

include an airworthiness directive (AD)

that is applicable to all Mitsubishi

Model YS–11 and YS–11A series

airplanes was published in the Federal

Register on April 9, 1998 (63 FR 17346).

That action proposed to require revising

the Limitations Section of the Airplane

Flight Manual (AFM) to prohibit the

positioning of the power levers below

the flight idle stop while the airplane is

in flight, and to add a statement of the

consequences of positioning the power