I
104TH CONGRESS
1ST SESSION
H. R. 2189
To amend the Agricultural Adjustment Act of 1938 and the Agricultural
Act of 1949 to provide price support and national poundage quotas
for the 1996 through 2000 crops of peanuts, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
AUGUST 3, 1995
Mr. CHAMBLISS (for himself, Mr. BISHOP, Mr. DE LA GARZA, Mr. ROSE, Mrs.
CLAYTON, Mr. BAESLER, Mrs. THURMAN, Mr. FARR, Mr. STENHOLM,
Mr. LUCAS, Ms. MCKINNEY, Mr. LATHAM, Mr. THOMPSON, Mr. KINGS-
TON, Mr. HEFNER, Mr. NORWOOD, Mr. SISISKY, Mr. FUNDERBURK, Mr.
RICHARDSON, Mr. LEWIS of Georgia, Mr. JONES, Mr. BREWSTER, Mr.
BURR, Mr. PETERSON of Florida, Mr. HEINEMAN, Mr. TEJEDA, Mr.
WATTS of Oklahoma, Ms. BROWN of Florida, Mr. HASTINGS of Florida,
Mr. CLYBURN, Mr. PASTOR, Mrs. MEEK of Florida, and Mr. LEWIS of
Kentucky) introduced the following bill; which was referred to the Com-
mittee on Agriculture
A BILL
To amend the Agricultural Adjustment Act of 1938 and
the Agricultural Act of 1949 to provide price support
and national poundage quotas for the 1996 through 2000
crops of peanuts, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
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SECTION 1. NATIONAL POUNDAGE QUOTAS AND ACREAGE
ALLOTMENTS.
Section 358–1 of the Agricultural Adjustment Act of
1938 (7 U.S.C. 1358–1) is amended to read as follows:
‘‘SEC. 358–1. NATIONAL POUNDAGE QUOTAS AND ACREAGE
ALLOTMENTS FOR PEANUTS.
‘‘(a) NATIONAL POUNDAGE QUOTAS.—
‘‘(1) ESTABLISHMENT.—The national poundage
quota for peanuts for each marketing year shall be
established by the Secretary at a level that is equal
to the quantity of peanuts (in tons) that the Sec-
retary estimates will be devoted in each such mar-
keting year to domestic edible and related uses, ex-
cluding seed. The Secretary shall also include in his
annual estimate of domestic edible and related uses,
the estimated quantity of peanuts and peanut prod-
ucts to be imported into the United States for the
marketing year for which the quota is being estab-
lished.
‘‘(2) ANNOUNCEMENT.—The national poundage
quota for a marketing year shall be announced by
the Secretary not later than December 15 preceding
the marketing year.
‘‘(3) APPORTIONMENT
AMONG
STATES.—The
national poundage quota established under para-
graph (1) shall be apportioned among the States so
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that the poundage quota allocated to each State
shall be equal to the percentage of the national
poundage quota allocated to farms in the State for
1995.
‘‘(b) FARM POUNDAGE QUOTAS.—
‘‘(1) IN GENERAL.—
‘‘(A) ESTABLISHMENT.—A farm poundage
quota for each marketing year shall be estab-
lished—
‘‘(i) for each farm that had a farm
poundage quota for peanuts for the 1995
marketing year;
‘‘(ii) if the poundage quota appor-
tioned to a State under subsection (a)(3)
for any such marketing year is larger than
the quota for the immediately preceding
marketing year, for each other farm on
which peanuts were produced for market-
ing in at least 2 of the 3 immediately pre-
ceding crop years, as determined by the
Secretary; and
‘‘(iii) as approved and determined by
the Secretary under section 358c, for each
farm on which peanuts are produced in
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connection with experimental and research
programs.
‘‘(B) QUANTITY.—The farm poundage
quota for each marketing year for each farm
described in subparagraph (A)(i) shall be the
same as the farm poundage quota for the farm
for the immediately preceding marketing year,
as adjusted under paragraph (2), but not in-
cluding any increases resulting from the alloca-
tion of quotas voluntarily released for one year
under paragraph (7). The farm poundage
quota, if any, for each marketing year for each
farm described in subparagraph (A)(ii) shall be
equal to the quantity of peanuts allocated to the
farm for the year under paragraph (2).
‘‘(C) TRANSFERS.—For purposes of this
subsection, if the farm poundage quota, or any
part thereof, is permanently transferred in ac-
cordance with section 358a or 358b, the receiv-
ing farm shall be considered as possessing the
farm poundage quota (or portion thereof) of the
transferring farm for all subsequent marketing
years.
‘‘(2) ADJUSTMENTS.—
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‘‘(A) ALLOCATION OF INCREASED QUOTA
GENERALLY.—Except as provided in subpara-
graph (C), if the poundage quota apportioned
to a State under subsection (a)(3) of any mar-
keting year is increased over the poundage
quota apportioned to farms in the State for the
immediately preceding marketing year, the in-
crease shall be allocated proportionately, based
on farm production history for peanuts for the
3 immediately preceding years, among—
‘‘(i) all farms in the State for each of
which a farm poundage quota was estab-
lished for the marketing year immediately
preceding the marketing year for which the
allocation is being made; and
‘‘(ii) all other farms in the State on
each of which peanuts were produced in at
least 2 of the 3 immediately preceding crop
years, as determined by the Secretary.
‘‘(B) DECREASE.—If the poundage quota
apportioned to a State under subsection (a)(3)
for any marketing year is decreased from the
poundage quota apportioned to farms in the
State under subsection (a)(3) for the imme-
diately preceding marketing year, the decrease
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shall be allocated among all the farms in the
State for each of which a farm poundage quota
was established for the marketing year imme-
diately preceding the marketing year for which
the allocation is being made.
‘‘(C) SPECIAL RULE ON TENANT’S SHARE
OF INCREASED QUOTA.—Subject to terms and
conditions prescribed by the Secretary, on
farms that were leased to a tenant for peanut
production, the tenant shall share equally with
the owner of the farm in that percentage of the
quota referred to in subparagraph (A) and oth-
erwise allocated to the farm as the result of the
tenant’s production on the farm of additional
peanuts. Not later than April 1 of each year or
as soon as practicable, the tenant’s share of any
such quota shall be allocated to a farm within
the county owned by the tenant or sold by the
tenant to the owner of any farm within the
county and permanently transferred to that
farm. Any quota not so disposed of as provided
in this subparagraph shall be allocated to other
quota farms in the State under paragraph (6)
as part of the quota reduced from farms in the
State due to the failure to produce the quota.
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‘‘(3) QUOTA NOT PRODUCED.—
‘‘(A) IN GENERAL.—Insofar as practicable
and on such fair and equitable basis as the Sec-
retary may by regulation prescribe, the farm
poundage quota established for a farm for any
marketing year shall be reduced to the extent
that the Secretary determines that the farm
poundage quota established for the farm for
any 2 of the 3 marketing years preceding the
marketing year for which the determination is
being made was not produced, or considered
produced, on the farm.
‘‘(B) EXCLUSIONS.—For purposes of this
paragraph, the farm poundage quota for any
such preceding marketing year shall not include
any increase resulting from the allocation of
quotas voluntarily released for 1 year under
paragraph (7).
‘‘(4) QUOTA
CONSIDERED
PRODUCED.—For
purposes of this subsection, the farm poundage
quota shall be considered produced on a farm if—
‘‘(A) the farm poundage quota was not
produced on the farm because of drought, flood,
or any other natural disaster, or any other con-
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dition beyond the control of the producer, as
determined by the Secretary; or
‘‘(B) the farm poundage quota for the
farm was either leased to another owner or op-
erator of a farm within the same county for
transfer to such farm for only 1 of the 3 mar-
keting years immediately preceding the market-
ing year for which the determination is being
made or the farm poundage quota was released
voluntarily under paragraph (7) for only 1 of
the 3 marketing years immediately preceding
the marketing year for which the determination
is being made. The farm poundage quota shall
not be considered produced for more than one
marketing year out of the three immediately
preceding marketing years under this subpara-
graph.
‘‘(5) QUOTA PERMANENTLY RELEASED.—Not-
withstanding any other provision of law—
‘‘(A) the farm poundage quota established
for a farm under this subsection, or any part of
the quota, may be permanently released by the
owner of the farm, or the operator with the per-
mission of the owner; and
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‘‘(B) the poundage quota for the farm for
which the quota is released shall be adjusted
downward to reflect the quota that is so re-
leased.
‘‘(6) ALLOCATION OF QUOTAS REDUCED OR RE-
LEASED.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), the total quantity of the
farm poundage quotas reduced or voluntarily
released from farms in a State for any market-
ing year under paragraphs (3) and (5) shall be
allocated, as the Secretary may by regulation
prescribe, to other farms in the State as pro-
vided in subparagraph (B) on which peanuts
were produced in at least 2 of the 3 crop years
immediately preceding the year for which the
allocation is being made.
‘‘(B) SET-ASIDE
FOR
FARMS
WITH
NO
QUOTA.—The total amount of farm poundage
quota to be allocated in the State under sub-
paragraph (A) shall be allocated to farms in the
State for which no farm poundage quota was
established for the immediately preceding year’s
crop. The allocation to any such farm shall not
exceed the average farm production of peanuts
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for the 3 immediately preceding years during
which peanuts were produced on the farm. Any
farm quota pounds remaining after allocation to
farms under this subparagraph shall be allo-
cated to farms in the State on which poundage
quotas were established for the immediately
preceding year’s crop.
‘‘(7) QUOTA TEMPORARILY RELEASED.—
‘‘(A) IN
GENERAL.—The farm poundage
quota, or any portion thereof, established for a
farm for a marketing year may be voluntarily
released to the Secretary to the extent that the
quota, or any part thereof, will not be produced
on the farm for the marketing year. Any farm
poundage quota so released in a State shall be
allocated to other farms in the State on such
basis as the Secretary may by regulation pre-
scribe.
‘‘(B) EFFECTIVE PERIOD.—Except as oth-
erwise provided in this section, any adjustment
in the farm poundage quota for a farm under
subparagraph (A) shall be effective only for the
marketing year for which it is made and shall
not be taken into consideration in establishing
a farm poundage quota for the farm from which
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the quota was released for any subsequent mar-
keting year.
‘‘(8) TRANSFER
OF
ADDITIONAL
PEANUTS.—
Additional peanuts on a farm from which the quota
poundage was not harvested and marketed may be
transferred to the quota loan pool for pricing pur-
poses on such basis as the Secretary shall by regula-
tion provide, except that the poundage of such pea-
nuts so transferred shall not exceed the difference in
the total peanuts meeting quality requirements for
domestic edible use as determined by the Secretary
marketed from the farm and the total farm pound-
age quota, excluding quota pounds transferred to the
farm in the fall.
Peanuts transferred under provisions of this
paragraph shall be supported at a total of not less
than 70 percent of the quota support rate for the
marketing years in which such transfers occur and
such transfers for a farm shall not exceed 25 per-
cent of the total farm quota pounds, excluding
pounds transferred in the fall.
‘‘(9) TEMPORARY QUOTA ALLOCATION.—
‘‘(A) Temporary allocation of quota pounds
for the marketing year only in which the crop
is planted shall be made to producers as pro-
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vided in this subsection. The temporary quota
allocation shall be equal to the pounds of seed
peanuts planted on the farm as may be ad-
justed under regulations that shall be pre-
scribed by the Secretary. The temporary alloca-
tion of quota pounds under this paragraph shall
be in addition to the farm quota pounds estab-
lished under paragraph (1).
‘‘(B) The allocation of quota pounds to
producers under the provisions of this sub-
section shall be performed in such a manner as
will not result in a net decrease in quota
pounds on a farm in excess of 3 percent, after
temporary seed quota is added, from the basic
farm quota in 1996 and such decrease shall
occur one time only and shall be applicable to
the 1996 marketing year only.
‘‘(C) Implementation of provisions in this
subsection may continue so long as doing so
does not result in increased cost to the Com-
modity Credit Corporation by displacement of
quota peanuts by additional peanuts in the do-
mestic market, increased losses in the Associa-
tion loan pools or other such increases in cost.
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‘‘(D) Nothing in this paragraph shall alter
or change in any way the requirements of sec-
tion 358e(b).
‘‘(c) FARM YIELDS.—
‘‘(1) IN GENERAL.—For each farm for which a
farm poundage quota is established under subsection
(b), and when necessary for purposes of this Act, a
farm yield of peanuts shall be determined for each
such farm.
‘‘(2) QUANTITY.—The yield shall be equal to
the average of the actual yield per acre on the farm
for each of the 3 crop years in which yields were
highest on the farm out of the 5 crop years 1973
through 1977.
‘‘(3) APPRAISED YIELDS.—If peanuts were not
produced on the farm in at least 3 years during the
5-year period or there was a substantial change in
the operation of the farm during the period (includ-
ing a change in operator, lessee who is an operator,
or irrigation practices), the Secretary shall have a
yield appraised for the farm. The appraised yield
shall be that quantity determined to be fair and rea-
sonable on the basis of yields established for similar
farms that are located in the area of the farm and
on which peanuts were produced, taking into consid-
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eration land, labor, and equipment available for the
production of peanuts, crop rotation practices, soil
and water, and other relevant factors.
‘‘(d) 
REFERENDUM
RESPECTING
POUNDAGE
QUOTAS.—
‘‘(1) IN GENERAL.—Not later than December
15 of each calendar year, the Secretary shall con-
duct a referendum of producers engaged in the pro-
duction of quota peanuts in the calendar year in
which the referendum is held to determine whether
the producers are in favor of or opposed to poundage
quotas with respect to the crops of peanuts produced
in the 5 calendar years immediately following the
year in which the referendum is held, except that, if
as many as two-thirds of the producers voting in any
referendum vote in favor of poundage quotas, no ref-
erendum shall be held with respect to quotas for the
second, third, fourth, and fifth years of the period.
‘‘(2) PROCLAMATION.—The Secretary shall pro-
claim the result of the referendum within 30 days
after the date on which it is held.
‘‘(3) VOTE
AGAINST
QUOTAS.—If more than
one-third of the producers voting in the referendum
vote against quotas, the Secretary also shall pro-
claim that poundage quotas will not be in effect with
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respect to the crop of peanuts produced in the cal-
endar year immediately following the calendar year
in which the referendum is held.
‘‘(e) DEFINITIONS.—For the purposes of this part
and title I of the Agricultural Act of 1949 (7 U.S.C. 1441
et seq.):
‘‘(1) ADDITIONAL PEANUTS.—The term ‘addi-
tional peanuts’ means, for any marketing year—
‘‘(A) any peanuts that are marketed from
a farm for which a farm poundage quota has
been established and that are in excess of the
marketings of quota peanuts from the farm for
the year; and
‘‘(B) all peanuts marketed from a farm for
which no farm poundage quota has been estab-
lished in accordance with subsection (b).
‘‘(2) CRUSHING.—The term ‘crushing’ means
the processing of peanuts to extract oil for food uses
and meal for feed uses, or the processing of peanuts
by crushing or otherwise when authorized by the
Secretary.
‘‘(3) DOMESTIC EDIBLE USE.—The term ‘do-
mestic edible use’ means use for milling to produce
domestic food peanuts (other than those described in
paragraph (2)) and use on a farm, except that the
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Secretary may exempt from this definition seeds of
peanuts that are used to produce peanuts excluded
under section 358d(c), are unique strains, and are
not commercially available.
‘‘(4) QUOTA PEANUTS.—The term ‘quota pea-
nuts’ means, for any marketing year, any peanuts
produced on a farm having a farm poundage quota,
as determined in subsection (b), that—
‘‘(A) are eligible for domestic edible use as
determined by the Secretary;
‘‘(B) are marketed or considered marketed
from a farm; and
‘‘(C) do not exceed the farm poundage
quota of the farm for the year.
‘‘(f) CROPS.—Notwithstanding any other provision of
law, this section shall be effective only for the 1996
through 2000 crops of peanuts.’’.
SEC. 2. SALE, LEASE, OR TRANSFER OF FARM POUNDAGE
QUOTA.
Section 358b of the Agricultural Adjustment Act of
1938 (7 U.S.C. 1358b) is amended to read as follows:
‘‘SEC. 358b. SALE, LEASE, OR TRANSFER OF FARM POUND-
AGE QUOTA FOR PEANUTS.
‘‘(a) IN GENERAL.—
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‘‘(1) AUTHORITY.—Subject to such terms, con-
ditions, or limitations as the Secretary may pre-
scribe, the owner, or operator with the permission of
the owner, of any farm for which a farm poundage
quota has been established under this Act may sell
or lease all or any part of the poundage quota to any
other owner or operator of a farm within the same
county for transfer to the farm, except that any such
lease of poundage quota may be entered into in the
fall or after the normal planting season—
‘‘(A) with the owner or operator of another
farm located within the same county or located
in a different county within the same state;
‘‘(B) if not less than 90 percent of the
basic quota (the farm quota exclusive of tem-
porary quota transfers), plus any poundage
quota transferred to the farm under this sub-
section, has been planted or considered planted
on the farm from which the quota is to be
leased; and
‘‘(C) under such terms and conditions as
the Secretary may by regulation prescribe.
In the case of a fall transfer or a transfer after the
normal planting season by a cash lessee, the land-
owner shall not be required to sign the transfer au-
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thorization. A fall transfer or a transfer after the
normal planting season may be made not later than
72 hours after the peanuts that are the subject of
the transfer are inspected and graded. Fall transfers
of quota pounds shall not affect the farm quota his-
tory for the transferring or receiving farm and shall
not result in reducing the farm poundage quota on
the transferring farm.
‘‘(2) TRANSFERS
TO
OTHER
SELF-OWNED
FARMS.—The owner or operator of a farm may
transfer all or any part of the farm poundage quota
to any other farm owned or controlled by the owner
or operator that is in the same county or any other
county within the same State and that had a farm
poundage quota for the preceding year’s crop, pro-
vided that both the transferring and the receiving
farms were under the control of the owner or opera-
tor for at least 3 crop years prior to the crop year
in which the farm poundage quota is to be trans-
ferred. Any farm poundage quota transferred under
this paragraph shall not result in any reduction in
the farm poundage quota for the transferring farm
if sufficient acreage is planted on the receiving farm
to produce the quota pounds transferred.
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‘‘(3) TRANSFERS
IN
STATES
WITH
SMALL
QUOTAS.—Notwithstanding paragraph (1) and (2),
in the case of any State for which the poundage
quota allocated to the State was less than 10,000
tons for the preceding year’s crop, all or any part of
a farm poundage quota may be transferred by sale
or lease or otherwise from a farm in one county to
a farm in another county in the same State.
‘‘(4) TRANSFERS
BY
SALE
IN
STATES
WITH
LARGE QUOTAS.—In the case of a State for which
the poundage quota allocated to the State was
10,000 tons or greater for the previous year, the
owner, or operator with permission of the owner, of
a farm located in the State for which a farm pound-
age quota has been established under section 358–
1 may sell all or any part of the farm poundage
quota to any other eligible owner or operator of a
farm within the same State. No more than 15 per-
cent of the total poundage quota within a county as
of January 1, 1996 may be sold and transferred out-
side of the county during calendar year 1996 under
this paragraph. Beginning January 1, 1997, no
more than 5 percent of the total poundage quota
within a county as of January 1 of a calendar year
may be sold and transferred outside of the county
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during such calendar year under this paragraph. No
more than an aggregate of 30 percent of the total
poundage quota within a county may be sold and
transferred outside the county under this paragraph.
Quota poundage sold and transferred under this
paragraph may not be leased or sold to another farm
owner or operator within the same State for a period
of 5 years following the original transfer to the
farm.
‘‘(b) CONDITIONS.—Transfers (including transfer by
sale or lease) of farm poundage quotas under this section
shall be subject to all of the following conditions:
‘‘(1) LIENHOLDERS.—No transfer of the farm
poundage quota from a farm subject to a mortgage
or other lien shall be permitted unless the transfer
is agreed to by the lienholders, except that no such
agreement shall be necessary in the event of all
lease, if the operator had the lienholder’s agreement
for a previous spring cash lease.
‘‘(2) TILLABLE CROPLAND.—No transfer of the
farm poundage quota shall be permitted if the coun-
ty committee established under section 8(b) of the
Soil Conservation and Domestic Allotment Act (16
U.S.C. 590h(b)) determines that the receiving farm
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does not have adequate tillable cropland to produce
the farm poundage quota.
‘‘(3) RECORD.—No transfer of the farm pound-
age quota shall be effective until a record thereof is
filed with the county committees of the counties
from which transferred and to which transferred and
the committees determined that the transfer com-
plies with this section.
‘‘(4) OTHER
TERMS.—Such other terms and
conditions that the Secretary may by regulation pre-
scribe.
‘‘(c) CROPS.—Notwithstanding any other provision of
law, this section shall be effective only for the 1996
through 2000 crops of peanuts.’’.
SEC. 3. MARKETING PENALTIES; DISPOSITION OF ADDI-
TIONAL PEANUTS.
Section 358e of the Agricultural Adjustment Act of
1938 (7 U.S.C. 1359a) is amended to read as follows:
‘‘SEC. 358e. MARKETING PENALTIES AND DISPOSITION OF
ADDITIONAL PEANUTS.
‘‘(a) MARKETING PENALTIES.—
‘‘(1) IN GENERAL.—
‘‘(A) MARKETING PEANUTS IN EXCESS OF
QUOTA.—The marketing of any peanuts for do-
mestic edible use in excess of the farm pound-
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age quota for the farm on which the peanuts
are produced shall be subject to penalty at a
rate equal to 140 percent of the support price
for quota peanuts for the marketing year in
which the marketing occurs. The penalty shall
not apply to the marketing of breeder or Foun-
dation seed peanuts grown and marketed by a
publicly owned agricultural experiment station
(including a State operated seed organization)
under such regulations as the Secretary may
prescribe.
‘‘(B) MARKETING YEAR.—For purposes of
this section, the marketing year for peanuts
shall be the 12-month period beginning August
1 and ending July 31.
‘‘(C) 
MARKETING
ADDITIONAL
PEA-
NUTS.—The marketing of any additional pea-
nuts from a farm shall be subject to the same
penalty unless the peanuts, in accordance with
regulations established by the Secretary, are—
‘‘(i) placed under loan at the addi-
tional loan rate in effect for the peanuts
under section 108B of the Agricultural Act
of 1949 and not redeemed by the produc-
ers;
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‘‘(ii) marketed through an area mar-
keting association designated pursuant to
section 108B(c)(1) of the Agricultural Act
of 1949; or
‘‘(iii) marketed under contracts be-
tween handlers and producers pursuant to
subsection (f).
‘‘(2) PAYER.—The penalty shall be paid by the
person who buys to otherwise acquires the peanuts
from the producer or, if the peanuts are marketed
by the producer through an agent, the penalty shall
be paid by the agent. The person or agent may de-
duct an amount equivalent to the penalty from the
price paid to the producer.
‘‘(3) FAILURE TO COLLECT.—If the person re-
quired to collect the penalty fails to collect the pen-
alty, the person and all persons entitled to share in
the peanuts marketed from the farm or the proceeds
thereof shall be jointly and severally liable with such
persons who failed to collect the penalty for the
amount of the penalty.
‘‘(4) APPLICATION
OF
QUOTA.—Peanuts pro-
duced in a calendar year in which farm poundage
quotas are in effect for the marketing year begin-
ning therein shall be subject to the quotas even
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though the peanuts are marketed prior to the date
on which the marketing year begins.
‘‘(5) FALSE
INFORMATION.—If any producer
falsely identifies, fails to accurately certify planted
acres, or fails to account for the disposition of any
peanuts produced on the planted acres, a quantity of
peanuts equal to the greater of the farm’s average
or actual yield, as determined by the Secretary,
times the planted acres, shall be deemed to have
been marketed in violation of permissible uses of
quota and additional peanuts. Any penalty payable
under this paragraph shall be paid and remitted by
the producer.
‘‘(6) UNINTENTIONAL VIOLATIONS.—The Sec-
retary shall authorize, under such regulations as the
Secretary shall issue, the county committees estab-
lished under section 8(b) of the Soil Conservation
and Domestic Allotment Act (16 U.S.C. 590h(b)) to
waive or reduce marketing penalties provided for
under this subsection in cases which the committees
determine that the violations that were the basis of
the penalties were unintentional or without knowl-
edge on the part of the parties concerned.
‘‘(7) DE
MINIMIS
VIOLATIONS.—Errors in
weight that do not exceed one-tenth of 1 percent in
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the case of any one marketing document shall not be
considered to be marketing violations except in cases
of fraud or conspiracy.
‘‘(b) USE OF QUOTA AND ADDITIONAL PEANUTS.—
‘‘(1) QUOTA
PEANUTS.—Only quota peanuts
may be retained for use as seed or for other uses on
a farm. When peanuts are so retained, such reten-
tion shall be considered as marketings of quota pea-
nuts, except that the Secretary may exempt from
consideration as marketings of quota peanuts seeds
of peanuts for the quantity involved that are used to
produce peanuts excluded under section 358d(c), are
unique strains, and are not commercially available.
‘‘(2) ADDITIONAL
PEANUTS.—Additional pea-
nuts shall not be retained for use on a farm and
shall not be marketed for domestic edible use, except
as provided in subsection (g).
‘‘(3) SEED.—Except as provided in paragraph
(1), seed for planting of any peanut acreage in the
United States shall be obtained solely from quota
peanuts marketed or considered marketed for do-
mestic edible use.
‘‘(c) MARKETING PEANUTS WITH EXCESS QUAN-
TITY, GRADE, OR QUALITY.—On a finding by the Sec-
retary that the peanuts marketed from any crop for do-
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mestic edible use by a handler are larger in quantity or
higher in grade or quality than the peanuts that could rea-
sonably be produced from the quantity of peanuts having
the grade, kernel content, the quality of the quota peanuts
acquired by the handler from the crop for the marketing
year, the handler shall be subject to a penalty equal to
140 percent of the loan level for quota peanuts on the
quantity of peanuts that the Secretary determines are in
excess of the quantity, grade, or quality of the peanuts
that could reasonably have been produced from the pea-
nuts so acquired.
‘‘(d) SUPERVISION OF HANDLERS OF ADDITIONAL
PEANUTS.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), the Secretary shall require that the han-
dling and disposal of additional peanuts be super-
vised by agents of the Secretary or by area market-
ing associations designated pursuant to section
108B(c)(1) of the Agricultural Act of 1949.
‘‘(2) SUPERVISION BY NONHANDLERS.—
‘‘(A) IN
GENERAL.—Supervision of the
handling and disposal of additional peanuts by
a handler shall not be required under para-
graph (1) if the handler agrees in writing, prior
to any handling or disposal of the peanuts, to
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comply with regulations that the Secretary shall
issue.
‘‘(B) REGULATIONS.—The regulations is-
sued by the Secretary under subparagraph (A)
shall include the following provisions:
‘‘(i) 
TYPES
OF
EXPORTED
OR
CRUSHED PEANUTS.—Handlers of shelled
or milled peanuts may export or crush pea-
nuts classified by type in all of the follow-
ing quantities:
‘‘(I) SOUND SPLIT KERNEL PEA-
NUTS.—Sound split kernel peanuts
purchased by the handler as addi-
tional peanuts to which, under price
support loan schedules, a mandated
deduction with respect to the price
paid to the producer of the peanuts
would be applied due to the percent-
age of the sound splits.
‘‘(II) SOUND
MATURE
KERNEL
PEANUTS.—Sound mature kernel pea-
nuts (which term includes sound split
kernel peanuts and sound whole ker-
nel peanuts) in an amount equal to
the poundage of the peanuts pur-
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chased by the handler as additional
peanuts, less the total poundage of
sound split kernel peanuts described
in subclause (I).
‘‘(III) 
REMAINDER.—The 
re-
maining quantity of total kernel con-
tent of peanuts purchased by the han-
dler as additional peanuts.
‘‘(ii) 
DOCUMENTATION.—Handlers
shall ensure that any additional peanuts
exported or crushed are evidenced by on-
board bills of lading or other appropriate
documentation as may be required by the
Secretary, or both.
‘‘(iii) LOSS OF PEANUTS.—If a han-
dler suffers a loss of peanuts as a result of
fire, flood, or any other condition beyond
the control of the handler, the portion of
the loss allocated to contracted additional
peanuts shall not be greater than the por-
tion of the handler’s total peanut pur-
chases for the year attributable to con-
tracted additional peanuts purchased for
export or crushing by the handler during
the year.
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‘‘(iv) SHRINKAGE ALLOWANCE.—
‘‘(I) IN
GENERAL.—The obliga-
tion of a handler to export or crush
peanuts in quantities described in this
subparagraph shall be reduced by a
shrinkage allowance, to be determined
by the Secretary, to reflect actual dol-
lar value shrinkage experienced by
handlers in commercial operations, ex-
cept that the allowance shall not be
less than 4 percent, except as pro-
vided in subclause (II).
‘‘(II) COMMON INDUSTRY PRAC-
TICES.—The Secretary may provide a
lower shrinkage allowance for a han-
dler who fails to comply with the re-
strictions on the use of peanuts, as
may be specified by the Commodity
Credit Corporation, to take into ac-
count common industry practices.
‘‘(3) ADEQUATE FINANCES AND FACILITIES.—A
handler shall submit to the Secretary adequate fi-
nancial guarantees, as well as evidence of adequate
facilities and assets, with the facilities under the
control and operation of the handler, to ensure the
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handler’s compliance with the obligation to export
peanuts.
‘‘(4) COMMINGLING OF LIKE PEANUTS.—Quota
and additional peanuts of like type and segregation
or quality may, under regulations issued by the Sec-
retary, be commingled and exchanged on a dollar
value basis to facilitate warehousing, handling, and
marketing.
‘‘(5) PENALTY.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), the failure by a handler to
comply with regulations issued by the Secretary
governing the disposition and handling of addi-
tional peanuts shall subject the handler to a
penalty at a rate equal to 140 percent of the
loan level for quota peanuts on the quantity of
peanuts involved in the violation.
‘‘(B) NONDELIVERY.—A handler shall not
be subject to a penalty for failure to export ad-
ditional peanuts if the peanuts were not deliv-
ered to the handler.
‘‘(6) REENTRY OF EXPORTED PEANUTS.—
‘‘(A) PENALTIES.—If any additional pea-
nuts or peanut products manufactured from ad-
ditional peanuts exported by a handler are reen-
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tered into the United States in commercial
quantities as determined by the Secretary, the
importer thereof shall be subject to a penalty at
a rate equal to 140 percent of the loan level for
quota peanuts on the quantity of peanuts reen-
tered.
‘‘(B) RECORDS.—Each person, firm, or
handler who imports peanuts into the United
States shall maintain such records and docu-
ments as are required by the Secretary to en-
sure compliance with this subsection.
‘‘(e) SPECIAL EXPORT CREDITS.—
‘‘(1) IN GENERAL.—The Secretary shall, with
due regard for the integrity of the peanut program,
promulgate regulations that will permit any handler
of peanuts who manufactures peanut products from
domestic edible peanuts to export the products and
receive credit for the fulfillment of export obligations
for the peanut content of the products against which
the export credits the handler may thereafter apply,
up to the amount thereof, equivalent quantities of
additional peanuts of the same type acquired by the
handler and used in the domestic edible market. The
peanuts so acquired for the domestic edible market
as provided in this subsection shall be of the same
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crop year as the peanuts used in the manufacture of
the products so exported.
‘‘(2) CERTIFICATION.—Under such regulations,
the Secretary shall require all handlers who are pea-
nut product manufacturers to submit annual certifi-
cations of peanut product content on a product-by-
product basis. Any changes in peanut product for-
mulas as affecting peanut content shall be recorded
within 90 days of the changes. The Secretary shall
conduct an annual review of the certifications. The
Secretary shall pursue all available remedies with re-
spect to persons who fail to comply with this para-
graph.
‘‘(3) RECORDS.—The Secretary shall require
handlers who are peanut product manufacturers to
maintain and provide such documents as are nec-
essary to ensure compliance with this subsection and
to maintain the integrity of the peanut program.
‘‘(f) CONTRACTS
FOR PURCHASE
OF ADDITIONAL
PEANUTS.—
‘‘(1) IN GENERAL.—Handlers may, under such
regulations as the Secretary may issue, contract with
producers for the purchase of additional peanuts for
crushing or export, or both.
‘‘(2) SUBMISSION TO SECRETARY.—
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‘‘(A) CONTRACT
DEADLINE.—Any such
contract shall be completed and submitted to
the Secretary (or if designated by the Sec-
retary, the area marketing association) for ap-
proval not later than September 15 of the year
in which the crop is produced.
‘‘(B) EXTENSION
OF
DEADLINE.—The
Secretary may extend the deadline under sub-
paragraph (A) by up to 15 days in response to
damaging weather or related condition (as de-
fined in section 112 of the Disaster Assistance
Act of 1989 (7 U.S.C. 1421 et seq.)). The Sec-
retary shall announce the extension no later
than September 5 of the year in which the crop
is produced.
‘‘(3) FORM.—The contract shall be executed on
a form prescribed by the Secretary. The form shall
require such information as the Secretary deter-
mines appropriate to ensure the proper handling of
the additional peanuts, including the identity of the
contracting parties, the poundage, and category of
the peanuts, the disclosure of any liens, and the in-
tended disposition of the peanuts.
‘‘(4) INFORMATION FOR HANDLING AND PROC-
ESSING
ADDITIONAL
PEANUTS.—Notwithstanding
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any other provision of this section, any person wish-
ing to handle and process additional peanuts as a
handler shall submit to the Secretary (or if des-
ignated by the Secretary, the area marketing asso-
ciation), such information as may be required under
subsection (d) by such date as prescribed by the Sec-
retary so as to permit final action to be taken on the
application by July 1 of each marketing year.
‘‘(5) TERMS.—Each such contract shall contain
the final price to be paid by the handler for the pea-
nuts involved and a specific prohibition against the
disposition of the peanuts for domestic edible or seed
use.
‘‘(6) SUSPENSION
OF
RESTRICTIONS
ON
IM-
PORTED PEANUTS.—Notwithstanding any other pro-
vision of this Act, if the President issues a proclama-
tion under section 404(b) of the Uruguay Round
Agreements Act expanding the quantity of peanuts
subject to the in-quota rate of duty under a tariff-
rate quota, or under section 22 of the Agricultural
Adjustment Act (7 U.S.C. 624), reenacted with
amendments by the Agricultural Marketing Agree-
ment Act of 1937, temporarily suspending restric-
tions on the importation of peanuts, the Secretary
shall, subject to such terms and conditions as the
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Secretary may prescribe, permit a handler, with the
written consent of the producer, to purchase addi-
tional peanuts from any producer who contracted
with the handler and to offer the peanuts for sale
for domestic edible use.
‘‘(g) MARKETING
OF PEANUTS OWNED
OR CON-
TROLLED BY THE COMMODITY CREDIT CORPORATION.—
‘‘(1) IN GENERAL.—Subject to section 407 of
the Agricultural Act of 1949 (7 U.S.C. 1427), any
peanuts owned or controlled by the Commodity
Credit Corporation may be made available for do-
mestic edible use, in accordance with regulations is-
sued by the Secretary, so long as doing so does not
result in substantially increased cost to the Com-
modity Credit Corporation. Additional peanuts re-
ceived under loan shall be offered for sale for domes-
tic edible use at prices not less than those required
to cover all costs incurred with respect to the pea-
nuts for such items as inspection, warehousing,
shrinkage, and other expenses, plus—
‘‘(A) not less than 100 percent of the loan
value of quota peanuts if the additional peanuts
are sold and paid for during the harvest season
on delivery by and with the written consent of
the producer;
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upward adjustment in the Department of Agri-
culture loan schedule.
‘‘(2) EXPORTS
AND
OTHER
PEANUTS.—The
Secretary shall require that all peanuts, including
peanuts imported into the United States, meet all
U.S. quality standards under Marketing Agreement
No. 146 and that importers of such peanuts fully
comply with inspection, handling, storage and proc-
essing requirements implemented under Marketing
Agreement No. 146. The Secretary shall ensure that
peanuts produced for the export market meet qual-
ity, inspection, handling, storage and processing re-
quirements under Marketing Agreement No. 146.
‘‘(g) MARKETING ASSESSMENT.—
‘‘(1) IN GENERAL.—The Secretary shall pro-
vide, by regulation, for a nonrefundable marketing
assessment applicable to each crop of domestically-
grown peanuts and peanuts produced outside the
United States. The assessment shall be made in ac-
cordance with this subsection and shall be on a per
pound basis in an amount equal to 1.2 percent of
the applicable support rate under this subsection.
‘‘(2) FIRST PURCHASERS.—