Domestically Produced Peanuts Handled by Persons Subject to Peanut Marketing Agreement No. 146; Changes in Terms and Conditions of Indemnification

This final rule modifies, for 1996 and subsequent crop peanuts, the indemnification program for signatory handlers under Peanut Marketing Agreement No. 146 (Agreement). This rule reduces indemnification payment coverage to certain costs involved with appeal and product claims. The Peanut Administrative Committee (Committee), which is responsible for local administration of the quality assurance program under the Agreement, recommended the changes. This rule reduces the Committee's indemnification payments for losses incurred by signatory handlers in not being able to ship unwholesome peanuts for edible purposes from a ceiling of $7 million for each of the last two years, to about $300,000. With the reduction in indemnification claim payments, the Committee will have adequate funds in its indemnification reserve to cover costs. No handler assessments for indemnification will be necessary. This will reduce signatory handlers' costs, enabling them to be more competitive in the marketplace.