[Code of Federal Regulations]
[Title 7, Volume 7, Parts 700 to 899]
[Revised as of January 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR729.315]

[Page 207-208]
 
                          TITLE 7--AGRICULTURE
 
                            CHAPTER VII--FARM
                SERVICE AGENCY, DEPARTMENT OF AGRICULTURE
 
PART 729--PEANUTS--Table of Contents
 
   Subpart C--Marketing Cards, Marketings, Penalties, and Assessments
 
Sec. 729.315  Handling Segregation 3 peanuts.

    (a) Disposition of Segregation 3 peanuts. Any producer who has a lot 
of farmers stock peanuts classified by the inspector as Segregation 3 
peanuts shall retain such lot of peanuts for seed in accordance with 
paragraph (c) of this section or shall deliver such lot of peanuts:
    (1) To the area association for a price support loan subject to such 
conditions as apply to eligibility for such loans including those in 
part 1446 of this title.
    (2) As contract additional peanuts subject to provisions of part 
1446 of this title;
    (3) As quota peanuts, subject to the conditions set forth in this 
part to a handler who has signed the peanut marketing agreement provided 
the peanuts were produced for seed under an agreement with a State 
agency; or
    (4) To a handler as quota peanuts if:
    (i) The peanuts were produced for seed under an agreement with a 
State agency.
    (ii) The handler to whom the peanuts are sold has, for that purpose, 
signed a supervision supplement to a

[[Page 208]]

warehousing contract with the area marketing association.
    (b) Failure to properly dispose of Segregation 3 peanuts--(1) Loss 
of price support. If the producer does not, within the time allowed in 
this part for designation of the category for marketing such peanuts, 
dispose of Segregation 3 peanuts in the manner specified in this 
section, such producer shall be ineligible for continued quota price 
support for the remainder of the marketing year.
    (2) Liquidated damages. Any peanut producer participating in the 
price support loan program shall be deemed to have agreed that:
    (i) CCC will incur serious and substantial damage to its program to 
support the price of peanuts if Segregation 3 peanuts are disposed of 
other than in the manner prescribed by this subpart or by the CCC;
    (ii) The amount of such damages will be difficult, it not 
impossible, to ascertain;
    (iii) With respect to any lot of peanuts which is pledged as 
collateral for a quota price support loan but which is ineligible for 
such loan, or any lot of peanuts which is pledged as collateral for a 
quota price support loan by a producer after the producer has disposed 
of any lot of Segregation 3 peanuts in any manner other than in the 
manner prescribed in this section, liquidated damages shall be due to 
CCC, not as a penalty, based on the difference between the quota loan 
rate and the additional loan rate (on a per pound basis) per net pound 
of such peanuts,
    (iv) Such liquidated damages are a reasonable estimate of the 
probable actual damages which CCC would suffer because of such action by 
the producer; and,
    (v) This remedy shall be in addition to any other remedy or sanction 
available against the producer, including penalties under this part.
    (c) Retention of Segregation 3 peanuts for seed. If the producer 
elects to retain a lot of Segregation 3 peanuts for seed, the buying 
point operator shall give a copy of the FSA-1007 to the producer as a 
record showing the quantity and quality factors of the peanuts. The 
producer:
    (1) Shall designate such peanuts as quota peanuts.
    (2) Shall have the net weight of such peanuts determined and 
deducted from the farm marketing card.
    (3) Shall advise the inspector that the peanuts are being retained 
for seed.
    (4) Must store such peanuts separate from other peanuts on the farm.
    (5) Shall notify the county executive director when such peanuts are 
used and otherwise account for the disposition of such peanuts.
    (6) Shall not sell such peanuts to a handler for seed; however, the 
peanuts may be sold to another producer for seed.
    (7) May, if it is later determined that such peanuts are unfit for 
seed use and after receiving prior approval from the county office, sell 
such peanuts as quota peanuts for crushing without benefit of price 
support.