Peanut Promotion, Research, and Information Order; Increase the Threshold of the Primary Peanut-Producing States and Adjustment of Membership

CourtAgricultural Marketing Service
Citation86 FR 48046
Publication Date27 Aug 2021
Record Number2021-18536
Federal Register, Volume 86 Issue 164 (Friday, August 27, 2021)
[Federal Register Volume 86, Number 164 (Friday, August 27, 2021)]
                [Proposed Rules]
                [Pages 48046-48049]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2021-18536]
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                Proposed Rules
                 Federal Register
                ________________________________________________________________________
                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.
                ========================================================================
                Federal Register / Vol. 86, No. 164 / Friday, August 27, 2021 /
                Proposed Rules
                [[Page 48046]]
                DEPARTMENT OF AGRICULTURE
                Agricultural Marketing Service
                7 CFR Part 1216
                [Document Number AMS-SC-20-0100]
                Peanut Promotion, Research, and Information Order; Increase the
                Threshold of the Primary Peanut-Producing States and Adjustment of
                Membership
                AGENCY: Agricultural Marketing Service, USDA.
                ACTION: Proposed rule.
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                SUMMARY: This proposal invites comments on increasing the threshold for
                defining primary peanut-producing states as states that maintain a 3-
                year average production of at least 20,000 tons of peanuts instead of
                10,000 tons of peanuts as currently prescribed in the Peanut Promotion,
                Research, and Information Order (Order). The Order is administered by
                the National Peanut Board (Board) with oversight by the U.S. Department
                of Agriculture (USDA). As a result of increasing the threshold, this
                proposal would decrease the Board's membership from 13 to 12 members
                and their respective alternates. This action would contribute to
                effective administration of the program.
                DATES: Comments must be received by September 27, 2021.
                ADDRESSES: Interested persons are invited to submit written comments
                concerning this proposed rule. All comments must be submitted through
                the Federal e-rulemaking portal at: http://www.regulations.gov, and
                should reference the document number and date, and page number of this
                issue of the Federal Register. Comments submitted in response to this
                proposed rule will be included in the rulemaking record and will be
                made available to the public. Please be advised that the identity of
                individuals or entities submitting the comments will be made public on
                the internet at: http://www.regulations.gov.
                FOR FURTHER INFORMATION CONTACT: Victoria M. Carpenter, Marketing
                Specialist, Promotion and Economics Division, Specialty Crop Program,
                AMS, USDA, Stop 0244, 1400 Independence Avenue SW, Room 1406-S,
                Washington, DC 20250-0244; telephone: (202) 720-6930; or electronic
                mail: [email protected].
                SUPPLEMENTARY INFORMATION: This proposal affecting the Order (7 CFR
                part 1216) is authorized under the Commodity Promotion, Research, and
                Information Act of 1996 (1996 Act) (7 U.S.C. 7411-7425).
                Executive Orders 12866 and 13563
                 Executive Orders 12866 and 13563 direct agencies to assess all
                costs and benefits of available regulatory alternatives and, if
                regulation is necessary, to select regulatory approaches that maximize
                net benefits (including potential economic, environmental, public
                health and safety effects, distributive impacts, and equity). Executive
                Order 13563 emphasizes the importance of quantifying both costs and
                benefits, reducing costs, harmonizing rules, and promoting flexibility.
                This action falls within a category of regulatory actions that the
                Office of Management and Budget (OMB) exempted from Executive Order
                12866 review.
                Executive Order 13175
                 This action has been reviewed in accordance with requirements of
                Executive Order 13175, Consultation and Coordination with Indian Tribal
                Governments. AMS has assessed the impact of this proposed rule on
                Indian tribes and determined that this rule would not have tribal
                implications that require consultation under Executive Order 13175. AMS
                hosts a quarterly teleconference with tribal leaders where matters of
                mutual interest regarding the marketing of agricultural products are
                discussed. Information about proposed changes to regulations will be
                shared during an upcoming quarterly call, and tribal leaders will be
                informed about proposed revisions to the regulation and the opportunity
                to submit comments. AMS will work with the USDA Office of Tribal
                Relations to ensure meaningful consultation is provided as needed with
                regards to this change to the Order.
                Executive Order 12988
                 This proposal has been reviewed under Executive Order 12988, Civil
                Justice Reform. It is not intended to have retroactive effect. Section
                524 of the 1996 Act (7 U.S.C. 7423) provides that it shall not affect
                or preempt any other Federal or State law authorizing promotion or
                research relating to an agricultural commodity.
                 Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.),
                the Office of Information and Regulatory Affairs designated this rule
                as not a major rule, as defined by 5 U.S.C. 804(2).
                 Under section 519 of the 1996 Act (7 U.S.C. 7418), a person subject
                to an order may file a written petition with USDA stating that an
                order, any provision of an order, or any obligation imposed in
                connection with an order, is not established in accordance with the
                law, and request a modification of an order or an exemption from an
                order. Any petition filed challenging an order, any provision of an
                order, or any obligation imposed in connection with an order, shall be
                filed within two years after the effective date of an order, provision,
                or obligation subject to challenge in the petition. The petitioner will
                have the opportunity for a hearing on the petition. Thereafter, USDA
                will issue a ruling on the petition. The 1996 Act provides that the
                district court of the United States for any district in which the
                petitioner resides or conducts business shall have the jurisdiction to
                review a final ruling on the petition, if the petitioner files a
                complaint for that purpose not later than 20 days after the date of the
                entry of USDA's final ruling.
                Background
                 This proposed rule invites comments on increasing the threshold for
                defining primary peanut-producing states as states that maintain a 3-
                year average production of at least 20,000 tons of peanuts instead of
                10,000 tons of peanuts as currently prescribed in the Order. This would
                help ensure that the Board reflects the peanut production in the United
                States. The Order is administered by the Board with oversight by USDA.
                 The Order became effective on July 30, 1999. Under the Order, the
                Board administers a nationally coordinated program of promotion,
                research and information designed to strengthen the position of peanuts
                in the marketplace
                [[Page 48047]]
                and to develop, maintain, and expand the demand for peanuts in the
                United States. Under the program, assessments are levied on all farmers
                stock peanuts sold at a rate of $3.55 per ton for Segregation 1 peanuts
                and $1.25 per ton for Segregation 2 peanuts and 3 peanuts, as those
                terms are defined in 7 CFR 996.13(b) through (d). Assessments are
                remitted to the Board by handlers and, for peanuts under loan, by the
                Commodity Credit Corporation.
                 The Order defines terms ``minor peanut-producing states'' and
                ``primary peanut-producing states'' for purposes of Board
                representation and voting at meetings. According to USDA, Federal-State
                Inspection Service, National Peanut Tonnage Reports, there are 13
                peanut-producing states, which include: Alabama, Arkansas, Florida,
                Georgia, Louisiana, Mississippi, Missouri, New Mexico, North Carolina,
                Oklahoma, South Carolina, Texas, and Virginia. Section 1216.21
                currently defines primary peanut-producing states as Alabama, Arkansas,
                Florida, Georgia, Mississippi, Missouri, New Mexico, North Carolina,
                Oklahoma, South Carolina, Texas, and Virginia. These states must
                maintain a 3-year average production of at least 10,000 tons of peanuts
                to meet the current definition. All other peanut-producing states are
                defined as minor peanut-producing states in Sec. 1216.15 and are
                represented by one member and one alternate on the Board--currently
                only Louisiana meets this definition.
                 With the growth in farm size, there are fewer and larger peanut
                producers than when the Order was promulgated in 1999. As stated above,
                currently, there is only one state, Louisiana, that represents the
                minor peanut-producing states, which is the at-large position on the
                Board. This makes it difficult to get adequate numbers of nominees to
                fill both member and alternate member seats on the Board. By increasing
                the threshold for defining primary peanut-producing states to states
                that maintain a 3-year average production of at least 20,000 tons
                instead of 10,000 tons of peanuts as currently prescribed, this action
                would increase the candidate pool for at-large member seats on the
                Board.
                 Pursuant to Sec. 1216.87, amendments to the Order may be proposed
                from time to time by the Board or by any interested person affected by
                provisions of the 1996 Act, including the Secretary of Agriculture.
                 The Board has been concerned about having enough nominees to fill
                vacant seats for several years and was hopeful that the situation would
                improve. The Board staff has actively recruited candidates to be
                considered for nomination from multiple primary peanut-producing states
                and the at-large state, sometimes with little success. Due to an
                alternate member vacancy for New Mexico and difficulty finding
                producers to serve, the Board determined it was time to increase the 3-
                year average.
                 The Board discussed increasing the threshold with the industry to
                explain the situation, and it was determined that increasing the
                threshold for defining primary peanut-producing states was a good way
                to give the peanut producing states an opportunity to be nominated for
                a member or alternate seat on the Board.
                Board Recommendation
                 The Board met to discuss methods to increase the pool of candidates
                for representation of the minor peanut-producing states to serve on the
                Board. At the time of the Board's formation in July 1999 (64 FR 41252),
                peanut farms were smaller, and therefore, there were many more
                producers eligible to be nominated to serve on the Board. In April
                1999, USDA reported there were approximately 25,000 peanut producers
                (64 FR 80107). Based on the Board's records, for the 2018 production
                crop year, there were 8,126 peanut producers and for the 2019 crop
                year, there were 7,200 peanut producers.
                 Currently, in minor peanut-producing states the pool of candidates
                is very small, with Louisiana being the only state in this category.
                The Board has had difficulty in gathering the required two nominees for
                each open position for submission to the Secretary of Agriculture.
                 The Board has been concerned about this issue for several years and
                was hopeful that the situation would improve. For approximately 10
                years, the Board's management has actively recruited candidates to be
                considered for nomination from multiple primary and minor peanut-
                producing states to fill seats on the Board. In the 2020 submission to
                the Secretary for appointments to fill member and alternate seats for
                New Mexico, only two nominees were submitted for consideration instead
                of four. Therefore, only the member seat was filled, and the alternate
                seat remains vacant. In addition, since there is currently only one
                state (Louisiana) representing minor peanut-producing states, it is
                often difficult to get a sufficient number of nominees to fill member
                and alternate positions as well. These nominees are comprised of
                producers of all sizes including small producers.
                 In 1999, the Board was comprised of 10 members and their
                alternates. The Board's representation for primary peanut-producing
                states were Alabama, Florida, Georgia, New Mexico, North Carolina,
                Oklahoma, South Carolina, Texas, and Virginia and minor peanut-
                producing states were represented by a Louisiana member and an Arizona
                alternate member. Over the years, there have been three adjustments of
                membership, which increased the size of the Board's membership. On July
                9, 2008, the Board increased its membership from 10 to 11 when it added
                Mississippi as a primary peanut-producing state (73 FR 39214). On March
                21, 2014, the Board increased its membership a second time from 11 to
                12 when it added Arkansas as a primary peanut-producing state (79 FR
                15636). The most recent change in the Board's membership was the
                addition of Missouri, which was published on March 23, 2020 (85 FR
                16229). That addition increased the membership from 12 to 13.
                 For the 2019 production year, computations based on Federal State
                Inspection Service data show that Georgia was the largest producer,
                with 49.8 percent followed by Florida (10.7 percent), Alabama (9.4
                percent), Texas (8.7 percent), North Carolina (8.1 percent), South
                Carolina (4.1 percent), Arkansas (3.1 percent), Virginia (2.0 percent),
                Mississippi (1.4 percent), Missouri (1.2 percent), Oklahoma (1.0
                percent), and New Mexico (0.3 percent). Currently, these 12 states are
                considered primary peanut-producing states and they each have a member,
                with their alternate, seated on the Board. All other states (minor
                peanut-producing states) that produce peanuts are represented by the
                at-large member.
                 As a result of membership adjustments described above, there is
                currently only one minor peanut-producing state (Louisiana)
                representing ``at-large'' seats. That minor peanut-producing state has
                only five producers producing peanuts in that state. Increasing the
                threshold from 10,000 tons to 20,000 tons, would cause the state of New
                Mexico to become a minor peanut-producing state instead of a primary
                peanut-producing state. This change would increase the pool of
                candidates eligible to represent minor peanut-producing states as the
                at-large member and alternate. Minor peanut-producing states would be
                represented by Louisiana and New Mexico. This proposal would increase
                the threshold for defining primary peanut-producing states as states
                that maintain a 3-year average production of at least 20,000 tons of
                peanuts instead of 10,000 tons of peanuts, an increase of 10,000 tons.
                [[Page 48048]]
                 The intent of the Order was to allow peanut farmers to oversee a
                peanut research, marketing, and promotion organization to improve their
                economic condition. To be successful, there must be an adequate pool of
                interested, qualified producers to serve on the Board. The Board voted
                unanimously on December 3, 2020, and February 3, 2021, to raise the
                threshold for primary peanut-producing states to those that maintain a
                3-year average production of at least 20,000 tons of peanuts. This
                proposed change would cause the state of New Mexico to become a minor
                peanut-producing state instead of a primary peanut-producing state,
                since its production will be below the proposed 20,000-ton threshold.
                Minor peanut-producing states will be represented by Louisiana and New
                Mexico. The Board recommended that the change take place by January 1,
                2022, to give New Mexico's certified peanut producer organization
                enough notice of their status change to a minor peanut-producing state.
                Nominations to fill the at-large seats would take place in 2022 for the
                term of office to begin in 2023.
                 Accordingly, this proposed rule would amend Sec. Sec. 1216.15 and
                1216.21 to define the state of New Mexico as a minor peanut-producing
                state. This proposal would require primary peanut-producing states to
                maintain a 3-year average production of at least 20,000 tons of
                peanuts. This proposal would also revise Sec. 1216.40(a) to specify
                that the Board would be comprised of no more than 12 peanut producer
                members and their alternates rather than 13, and revise Sec.
                1216.40(a)(1) to reflect the new number of primary peanut-producing
                states, by revising 12 to 11.
                Initial Regulatory Flexibility Act Analysis
                 In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C.
                601-612), AMS is required to examine the impact of the proposed rule on
                small entities. Accordingly, AMS has considered the economic impact of
                this action on small entities.
                 The purpose of the RFA is to fit regulatory actions to the scale of
                businesses subject to such actions so that small businesses will not be
                disproportionately burdened. The Small Business Administration (SBA)
                defines, in 13 CFR part 121, small agricultural producers as those
                having annual receipts of no more than $1 million and small
                agricultural service firms (handlers) as those having annual receipts
                of no more than $30 million.
                 According to the Board, there were approximately 7200 producers and
                34 handlers of peanuts who were subject to the program in 2019.
                 Most producers would be classified as small agricultural production
                businesses under the criteria established by the SBA (no more than $1
                million in annual peanut sales). USDA's National Agricultural
                Statistics Service (NASS) reported that crop values of peanuts produced
                in the top 11 peanut-producing states for the years 2017, 2018, and
                2019 were $1.63 billion, $1.17 billion, and $1.13 billion,
                respectively. The 3-year crop average was $1.31 billion. With a 2019
                crop value of $1.13 billion and a total of 7,200 producers, average
                peanut sales per producer were approximately $157,000. With a 2017-2018
                average crop value of $1.31 billion, average sales per producer were
                approximately $182,000. Both figures are well below the $1 million
                threshold for a small producer, providing strong evidence that most
                peanut producers are small businesses.
                 With 34 handlers, the average annual peanut crop value per handler
                from 2017 to 2019 ranged from $33 million to $48 million, with a 3-year
                average of $39 million. With average sales figures moderately higher
                than the small business threshold size of $30 million, it appears that
                several handlers are small businesses and there are also a number that
                are large businesses--no definitive statement can be made.
                 According to NASS, the number of pounds of U.S. peanut production
                from 11-primary peanut-producing states for 2017, 2018, and 2019 were
                7.12 billion, 5.50 billion and 5.47 billion, respectively. The 3-year
                average production was 6.03 billion pounds. Computations based on NASS
                data show that Georgia was the largest producer, with 50.9 percent of
                the 3-year average quantity, followed by Alabama (9.9 percent), Florida
                (9.9 percent), Texas (9.1 percent), North Carolina (7.2 percent), South
                Carolina (5.4 percent), Arkansas (2.4 percent), Mississippi (1.9
                percent), Virginia (1.8 percent), Oklahoma (1.0 percent), and New
                Mexico (under one percent).
                 This proposal would amend Sec. Sec. 1216.15, 1216.21 and 1216.40
                to redefine the state of New Mexico from a primary peanut-producing
                state to a minor peanut-producing state. The Order is administered by
                the Board with oversight by USDA. Under the Order, primary peanut-
                producing states must maintain a 3-year average production of at least
                10,000 tons of peanuts. This amendment would increase the production
                threshold to 20,000 tons of peanuts. This action would expand the
                number of minor peanut-producing states to ensure that the Board
                obtains an adequate pool of qualified producers to serve on the Board
                to represent minor peanut-producing states. This action is authorized
                under Sec. 1216.87 of the Order.
                 Regarding the economic impact of this proposed rule on affected
                entities, this action would impose no costs on producers or handlers.
                Changes would define the state of New Mexico as a minor peanut-
                producing state based on the proposed increase to the threshold to
                20,000 tons of peanuts.
                 Regarding alternatives, the Board has been concerned about
                obtaining the required two nominees for each open seat to be submitted
                to the Secretary of Agriculture for primary peanut-producing states and
                minor peanut-producing states. For years, the Board's staff has
                actively recruited candidates to be considered for nomination from
                multiple primary peanut-producing states and minor peanut-producing
                states, sometimes with little success. The Board considered increasing
                the threshold for primary peanut-producing states from 10,000 to 30,000
                per ton for a 3-year production average. After discussion, the Board
                voted to double the threshold and require the primary peanut-producing
                states to maintain a 3-year production average of at least 20,000 tons
                of peanuts.
                 In accordance with OMB regulation [5 CFR part 1320], which
                implements information collection requirements imposed by the Paperwork
                Reduction Act of 1995 [44 U.S.C. 3501 et seq.], there are no new
                requirements contained in this rule. In fact, a decrease of 0.30 hours
                in the information collection burden for the peanut program is
                expected. Information collection requirements have been previously
                approved by OMB under OMB control number 0581-0093 and 0505-0001.
                 As with all Federal promotion programs, reports and forms are
                periodically reviewed to reduce information requirements and
                duplication by industry and public sector agencies. USDA has not
                identified any relevant Federal rules that duplicate, overlap, or
                conflict with this proposed rule.
                 AMS is committed to complying with the E-Government Act, to promote
                the use of the internet and other information technologies to provide
                increased opportunities for citizen access to Government information
                and services, and for other purposes.
                 Regarding outreach efforts, the Board invited Executive Directors
                of certified peanut producer organizations who represent the primary
                peanut-producing states (Georgia, Alabama, Texas, Florida, North
                Carolina, South Carolina,
                [[Page 48049]]
                Mississippi, Missouri, Arkansas, Virginia, Oklahoma, and New Mexico) to
                attend its annual meeting on February 3, 2021. Most of the Executive
                Directors for certified peanut producer organizations attended this
                meeting. All the Board's meetings are open to the public and interested
                persons are invited to participate and express their views. The Board
                announced that it voted to increase the threshold level from 10,000 to
                20,000 per ton on a 3-year average production for a state to become a
                primary peanut-producing state. No concerns were raised.
                 We have performed this initial RFA analysis regarding the impact of
                this proposed action on small entities, and we invite comments
                concerning potential effects of this action on small businesses.
                 USDA has determined that this proposed rule is consistent with and
                would effectuate the purposes of the 1996 Act. A 30-day comment period
                is provided to allow interested persons to respond to this proposal.
                All written comments received in response to this proposed rule will be
                considered prior to finalizing this action.
                List of Subjects in 7 CFR Part 1216
                 Administrative practice and procedure, Advertising, Consumer
                information, Marketing agreements, Peanut promotion, Reporting and
                recordkeeping requirements.
                 For reasons set forth in the preamble, 7 CFR part 1216 is proposed
                to be amended as follows:
                PART 1216--PEANUT PROMOTION, RESEARCH, AND INFORMATION ORDER
                0
                1. The authority citation for 7 CFR part 1216 continues to read as
                follows:
                 Authority: 7 U.S.C. 7411-7425; 7 U.S.C. 7401.
                0
                2. Section 1216.15 is revised to read as follows:
                Sec. 1216.15 Minor peanut-producing states.
                 Minor peanut-producing states means all peanut-producing states
                with the exception of Alabama, Arkansas, Florida, Georgia, Mississippi,
                Missouri, North Carolina, Oklahoma, South Carolina, Texas and Virginia.
                0
                3. Section 1216.21 is revised to read as follows:
                Sec. 1216.21 Primary peanut-producing states.
                 Primary peanut-producing states means Alabama, Arkansas, Florida,
                Georgia, Mississippi, Missouri, North Carolina, Oklahoma, South
                Carolina, Texas and Virginia, provided these states maintain a 3-year
                average production of at least 20,000 tons of peanuts.
                0
                4. In Sec. 1216.40, paragraphs (a) introductory text and (a)(1) are
                revised to read as follows:
                Sec. 1216.40 Establishment and membership.
                 (a) Establishment of a National Peanut Board. There is hereby
                established a National Peanut Board, hereinafter called the Board,
                comprised of no more than 12 peanut producers and alternates, appointed
                by the Secretary from nominations as follows:
                 (1) Eleven members and alternates. One member and one alternate
                shall be appointed from each primary peanut-producing state, who are
                producers and whose nominations have been submitted by certified peanut
                producer organizations within a primary peanut-producing state.
                * * * * *
                Bruce Summers,
                Administrator, Agricultural Marketing Service.
                [FR Doc. 2021-18536 Filed 8-26-21; 8:45 am]
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