DEPARTMENT OF AGRICULTURE

Federal Grain Inspection Service

7 CFR Part 800

RIN 0580AA25

Prohibition on Adding Water to Grain

AGENCY: Federal Grain Inspection Service, USDA.

ACTION: Proposed rule.

SUMMARY: The Federal Grain Inspection Service (FGIS) is proposing to revise
the regulations under the United States Grain Standards Act (USGSA) to
prohibit the application of water to grain for domestic or export shipment.
This prohibition would be applicable to all persons handling grain, not just
those receiving official inspection and weighing services under the USGSA.
FGIS has determined that water, which is sometimes applied as a dust
suppressant, can be too easily misused to increase the weight of grain.
Additionally, externally-applied water has a significant potential for
degrading the quality of grain. This action would foster the marketing of
grain of high quality to both domestic and foreign buyers and promote fair
and honest weighing practices.

DATES: Comments must be received on or before December 2, 1993.

ADDRESSES: Written comments must be submitted to George Wollam, FGIS, USDA,
room 0619 South Building, P.O. Box 96454, Washington, DC, 200906454; telemail
users may respond to IRSTAFF/FGIS/USDA; telex users may respond to 7607351,
ANS:FGIS UC; and telecopy users may respond to the automatic telecopier
machine at (202) 7204628.

All comments received will be made available for public inspection in room
0632 USDA South Building, 1400 Independence Avenue SW., Washington, DC, during
regular business hours (7 CFR 1.27(b)).

FOR FURTHER INFORMATION CONTACT: George Wollam, address as above, telephone
(202) 7200292.

SUPPLEMENTARY INFORMATION:

Executive Order 12291

This proposed rule has been issued in conformance with Executive Order 12291
and Departmental Regulation 15121. This action has been classified as
nonmajor because it does not meet the criteria for a major regulation
established in the Order.

Executive Order 12778

This proposed rule has been reviewed under Executive Order 12778, Civil
Justice Reform. This action is not intended to have a retroactive effect. The
United States Grain Standards Act provides in section 87g that no State or
subdivision may require or impose any requirements or restrictions concerning
the inspection, weighing, or description of grain under the Act. Otherwise,
this proposed rule will not preempt any State or local laws, regulations, or
policies, unless they present an irreconcilable conflict with this rule. There
are no administrative procedures which must be exhausted prior to any judicial
challenge to the provisions of this rule.

Regulatory Flexibility Act Certification

David R. Galliart, Acting Administrator, FGIS, has determined that this
proposed rule will not have a significant economic impact on a substantial
number of small entities. Most users of the official inspection and weighing
services and those persons that perform those services do not meet the
requirements for small entities as defined in the Regulatory Flexibility Act
(5 U.S.C. 601 et seq.).

Information Collection Requirements

In accordance with the Paperwork Reduction Act of 1980 (44 U.S.C. chapter 35),
the information collection requirements contained in the rule to be amended
have been previously approved by OMB under control number 05800013.

Background

In the March 4, 1987, Federal Register (52 FR 6493), FGIS amended the
regulations under the United States Grain Standards Act (USGSA) to establish
provisions for officially inspecting and weighing additive-treated grain.
These provisions were established to offer the grain industry the opportunity
to utilize available dust suppression technology, apply insect and fungi
controls, and mark grain for identification purposes with Food and Drug
Administration (FDA) approved additives.

Industry comments received during the rulemaking process supported the new
provisions, but also expressed concern over the possible misuse of additives.
A total of 15 comments were received. Three commenters were in favor of the
then proposed regulations without any reservations. Two commenters were
opposed to the proposed additive provisions, as related to dust-suppressing
agents. They asserted, in part, that water may be added just to increase the
weight of the grain. Additionally, three of the commenters who were in favor
of the proposed provisions expressed concern about the potential for improper
addition of additives for the purpose of adding weight to the grain. Applying
any substance for the purpose of increasing weight is prohibited by the Food,
Drug, and Cosmetic Act (see 21 U.S.C. 342(b)).

The final rule specified that if additives are applied during loading to
outbound grain after sampling of weighing, or during unloading to inbound
grain before sampling or weighing for the purpose of insect of fungi control,
dust suppression, or identification, the inspection and/or weight certificate
must show a statement that describes the type and purpose of the additive
application. A statement was not required to be shown when additives are
applied prior to sampling and weighing out-bound grain or after sampling and
weighing inbound grain. But, all incidents or suspected incidents of
unapproved additive usage or improper additive application were required to be
reported to the appropriate Federal, State, or local authorities for action.

Even after establishing the labeling provisions for officially inspected and
weighed additive-treated grain, FGIS continued to receive complaints about
high moisture grain and improper use of additives. In 1992, several foreign
and domestic grain merchants expressed concern over potential quality
degradation due to water application and emphasized that alternative dust
control techniques are available that are practical and effective. They also
contended that the primary purpose of applying water is to increase the weight
of the grain, and, hereby, gain a market advantage. Furthermore, they
expressed deep concern about possible negative market reaction by both
domestic and foreign buyers; i.e., buyer confidence in U.S. grain will decline
if concerns develop over potential quality degradation caused by water and
"paying grain prices for water.'' Those who support allowing the application
of water to grain contend that it is an effective method for reducing dust
emissions.

In response to these concerns, FGIS recently amended sections 800.88 and
800.96 of the regulations under the USGSA to require a statement on official
export inspection and weight certificates whenever water is applied to export
grain at export port locations (58 FR 3211). The purpose of this action was to
ensure that foreign buyers of U.S. grain are informed when additives have been
applied to grain exported from export port locations. This action did not
address non-export grain.

During and since development of the regulations requiring a statement on
export grain certificates, numerous grain industry groups, including
exporters, importers, millers, processors, and producers, have voiced their
growing concern about the effect that the application of water has upon all
U.S. grain, whether or not such grain is exported from the U.S. or even
offered for official inspection and weighing services. They have stated and
available information confirms that applying water to grain poses a risk to
grain quality and can provide a strong incentive to improperly increase
weight.

FGIS believes that the practice of adding water to grain indiscriminately may
be occurring and that this practice not only adds weight but creates favorable
conditions for microbial-contamination of grain. Section 13(e)(1) of the USGGA
(7 U.S.C. 87b) authorizes the Administrator of FGIS to prohibit the
contamination of sound and pure grain as a result of the introduction of
nongrain substances. Even though kernels of grain contain moisture,
externally-applied water is a "nongrain substance.'' Therefore, FGIS proposes
to prohibit the application of water to grain. This prohibition would apply to
all persons handling grain not just those receiving official services under
the USGSA.

FGIS recognizes, however, that the amount of moisture in grain may increase
due to natural environmental reasons during handling and storage. FGIS also
realizes that water must be applied to grain during certain end-use processes.
The proposed action does not restrict either naturally-occurring moisture
changes or the addition of water during milling, malting, or similar
processing operations.

Although studies including research initiated by the National Grain and Feed
Association which was conducted by the Department (see for example, Lai, F.S.,
Martin, C.R., and Miller, B.S., 1982, "Examining the Use of Additives to
Control Grain Dust'' and "Control of Grain Dust with a Water Spray'') and
industry experience indicates that applying water to grain can suppress dust,
there are alternative dust control methods available and in use throughout the
industry. Alternative methods such as pneumatic dust collection systems do not
represent the same potential degradation of grain quality, and do not provide
an equivalent incentive to increase weight.

Most elevators, including those that currently use water, already have
pneumatic dust collection systems installed. Furthermore, many elevators that
use water also have oil-based dust suppression systems in place that are more
effective than water. These systems use either USP white mineral oil or food
grade vegetable oil (e.g., soybean oil). Research has shown that water applied
at a level of 0.3 percent to corn reduced the dust concentration by at least
80 percent on the gallery floor. At the same location, soybean oil or mineral
oil applied at a level of 0.05 percent reduced dust by more than 90 percent.

Thus, even though water is more economical than mineral or vegetable oil
(mineral oil costs over $2 a gallon), far less oil is needed to control the
same amount of dust. More importantly, oil is adsorbed (adheres) on grain,
thereby providing long-term dust suppression. Water, on the other hand, is
either absorbed (soaked-in) into grain or evaporates, and therefore, must be
repeatedly applied. Consequently, FGIS believes that prohibiting water as a
dust control method would neither increase the risk of elevator dust
explosions nor have a significant economic impact on elevators that currently
use water.

Proponents for applying water to grain suggest that the problem is merely the
lack of enforcement of current FDA restrictions on applying any substance for
the purpose of increasing weight. They have recommended that a
licensing/permit program be established to allow firms to continue to use
water, with certain restrictions. FGIS has considered this recommendation, as
well as several other alternatives (e.g., require water weight to be deducted
from grain weight, limit the rate of water application, and restrict water
applications to certain locations/conditions) and determined that any program
for controlling or restricting water usage would be very difficult and
expensive to administer. Testing and approving water application
systems/equipment, controlling grain elevator inventories, monitoring the
amount of water applied and the location of application, and prosecuting
suspected violators would require a significant staff commitment and, even
then, would be ineffective in preventing all abuses. Also, establishing any
program that sanctions the use of water may create a perception of abuse that
jeopardizes the reputation of all U.S. grain and undermines the grain
industry's commitment to ensuring quality through good handling and storage
practices.

FGIS believes that banning the use of water reflects current market needs and
would have a positive economic impact on the U.S. grain industry. Furthermore,
most of those that are currently applying water to grain are not small
entities as defined in the Regulatory Flexibility Act (5 U.S.C. 601 et seq.).
Therefore, this proposed action should have little or no impact on small
businesses.

Comment, including data and views on this analysis and suggestions regarding
any less burdensome or more efficient alternative that would accomplish the
purposes described in this proposal, are solicited from interested parties.

Proposed Action

FGIS proposes to revise:

1. Section 800.61(b) to prohibit the addition of water to grain.

2. Section 800.61(d)(4) to exclude water as a dust suppressant.

3. Section 800.88(d) to eliminate the provision for adding water to export
grain.

4. Section 800.96(c)(2) to eliminate the provision for adding water to export
grain.

List of Subjects in 7 CFR Part 800

Administrative practice and procedure, Grain, Export.

For reasons set out in the preamble, 7 CFR part 800 is proposed to be amended
as follows:

PART 800 GENERAL REGULATIONS

1. The authority citation for part 800 continues to read as follows:

Authority: Pub. L. 94582, 90 Stat. 2867, as amended, (7 U.S.C. 71 et seq.).

2. Section 800.61 is amended to add a new paragraph (b)(3) to read as follows:

 800.61 Prohibited grain handling practices.

                                  * * * * *

(b) * * *

(3) Add water to grain for purposes other than milling, malting, or similar
processing operations.

                                  * * * * *

3. Section 800.61(d)(4) is revised to read as follows:

 800.61 Prohibited grain handling practices.

                                  * * * * *

(d) * * *

(4) Dust suppressants. Grain may be treated with an additive, other than
water, to suppress dust during handling. Elevators, other grain handlers, and
their agents are responsible for the proper use and application of dust
suppressants. Sections 800.88 and 800.96 include additional requirements for
grain that is officially inspected and weighed.

4. Section 800.88(d) is revised to read as follows:

 800.88 Loss of identity.

                                  * * * * *

(d) Additives.1  If additives are applied during loading to outbound,
including export, grain after sampling or during unloading to inbound grain
before sampling for the purpose of insect or fungi control, dust suppression,
or identification, the inspection certificate shall show a statement showing
the type and purpose of the additive application, except that no statement is
required to be shown when the additive is a fumigant applied for the purpose
of insect control.

1 Elevators, other handlers of grain, and their agents are responsible for
the additive's proper usage and application. Compliance with this section does
not excuse compliance with applicable Federal, State, and local laws.

5. Section 800.96(c)(2) is revised to read as follows:

 800.96 Weighing procedures.

                                  * * * * *

(c) * * *

(2) Additives.1  If additives are applied during loading to outbound,
including export, grain after weighing or during unloading to inbound grain
before weighing for the purpose of insect or fungi control, dust suppression,
or identification, the weight certificate shall show the actual weight of the
grain after the application of the additive for inbound grain or the actual
weight of the grain prior to the application of the additive for outbound or
export grain and a statement showing the type and purpose of the additive
application, except that no statement is required to be shown when the
additive is a fumigant applied for the purpose of insect control.

                                  * * * * *

Dated: July 27, 1993.

D. R. Galliant,

Acting Administrator.

[FR Doc. 9318300 Filed 8393; 8:45 am]

BILLING CODE 3410ENM


