Rule2021-27513
Peanut Promotion, Research, and Information Order; Increase the Threshold of the Primary Peanut-Producing States and Adjustment of Membership
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
December 21, 2021
Effective
January 20, 2022
Issuing agencies
Agriculture DepartmentAgricultural Marketing Service
Abstract
This rule changes 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, the Board's membership will decrease from 13 to 12 members and their respective alternates. This change will contribute to effective administration of the program.
Full Text
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<title>Federal Register, Volume 86 Issue 242 (Tuesday, December 21, 2021)</title>
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[Federal Register Volume 86, Number 242 (Tuesday, December 21, 2021)]
[Rules and Regulations]
[Pages 72148-72151]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-27513]
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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, Department of Agriculture
(USDA).
ACTION: Final rule.
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SUMMARY: This rule changes 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, the Board's membership will
decrease from 13 to 12 members and their respective alternates. This
change will contribute to effective administration of the program.
DATES: Effective January 20, 2022.
FOR FURTHER INFORMATION CONTACT: Victoria M. Carpenter, Marketing
Specialist, Mid Atlantic Branch, Market Development Division, Specialty
Crops Program, AMS, USDA, Stop 0244, 1400 Independence Avenue SW, Room
1406-S, Washington, DC 20250-0244; Telephone: (202) 720-6930; or Email:
<a href="/cdn-cgi/l/email-protection#eabc83899e8598838ba7c4a98b989a8f849e8f98aa9f998e8bc48d859c"><span class="__cf_email__" data-cfemail="20764943544f5249416d0e63415250454e54455260555344410e474f56">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: This rule is issued under the Order (7 CFR
part 1216). The Order 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. The Agricultural Marketing Service (AMS) has assessed the
impact of this rule on Indian tribes and determined that this rule will
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 changes to
regulations were shared during a recent quarterly call, and tribal
leaders were informed about the revisions to the regulation and had the
opportunity to submit comments. AMS will continue to 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 rule 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 rule will 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 as
currently prescribed in the Order. This will 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 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 the 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,
[[Page 72149]]
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
will 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.
For several years, the Board has been concerned about having enough
nominees to fill vacant seats 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 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.
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 will
cause the state of New Mexico to become a minor peanut-producing state
instead of a primary peanut-producing state. This change will increase
the pool of candidates eligible to represent minor peanut-producing
states as the at-large member and alternate. Minor peanut-producing
states will be represented by Louisiana and New Mexico. This rule will
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.
The intent of the Order is 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 rule
will 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
[[Page 72150]]
fill the at-large seats will take place during the next nomination
cycle.
Accordingly, this rule will amend Sec. Sec. 1216.15 and 1216.21 to
define the state of New Mexico as a minor peanut-producing state. This
rule will require primary peanut-producing states to maintain a 3-year
average production of at least 20,000 tons of peanuts. This rule will
also revise Sec. 1216.40(a) to specify that the Board will 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.
Final 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 final 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 7,200 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 action will 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 action will increase the production threshold to
20,000 tons of peanuts. This action will 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 final rule on affected
entities, this action will impose no costs on producers or handlers.
Changes will 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 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, 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.
A 30-day comment period was provided to allow interested persons to
respond to the proposal which was published in the Federal Register on
August 27, 2021 [86 FR 48046]. Copies of the rule were made available
through the internet by the Department and the Office of the Federal
Register. The comment period ended September 27, 2021.
Analysis of Comments
Three comments were received in response to the proposed rule. Two
[[Page 72151]]
comments were received that were determined to be immaterial to the
topic.
One commenter questioned if one state, Georgia, produces half of
the peanuts in the United States, why do they have a disproportionate
say in the promotion of peanuts on the Board? Shouldn't we be amending
the Board to better represent the actual production of peanuts in the
U.S., instead of assisting the 32 states who barely number more than 1%
production?
Research and promotion programs are well established as a way for
producers, importers, handlers, and any other industry member to raise
funds for generic product promotion of a commodity. The Board was
established consisting of producers from peanut-producing States. The
Secretary of Agriculture appoints members to the Board from nominees
submitted by the industry according to regulations in its Order.
Membership on the Board allows for one member and one alternate
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. Minor peanut-
producing states collectively have one at-large member and one
alternate, who are producers, appointed from nominations submitted by
certified peanut producer organizations within minor peanut-producing
states or from other certified farm organizations that include peanut
producers as part of their membership. Georgia is currently represented
by a member and alternate on the Board. Accordingly, no changes were
made to the rule as proposed, based on the comments received.
After consideration of all relevant material presented, including
the information and recommendations submitted by the Board, the
comments received, and other available information, AMS finds that this
rule, as hereinafter set forth, is consistent with and will effectuate
the purposes of the 1996 Act.
List of Subjects in 7 CFR Part 1216
Administrative practice and procedure, Advertising, Agricultural
research, Information, Marketing agreements, Peanuts, Reporting and
recordkeeping requirements.
For reasons set forth in the preamble, Agricultural Marketing
Service amends 7 CFR part 1216 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 and 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 that 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.
* * * * *
Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2021-27513 Filed 12-20-21; 8:45 am]
BILLING CODE P
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