The nation's system for regulating peanuts is, well, nuts. The laws don't allow farmers to grow and sell peanuts to fellow Americans unless they own a Federal license, very few of which have been issued since the early 1940's. That keeps peanut production low and prices high. Americans pay 50 percent more for home-grown peanuts than do foreigners.

The system also makes it impossible for most farmers to enrich their soil by planting peanuts along with their other crops. George Washington Carver, the scientist who taught the world how nutritious peanuts could be for both people and soil, would doubtless applaud Representative Dick Armey's proposal to abolish the system.

The licenses, or ''poundage quotas,'' were begun during the Depression in order to create an artificial peanut scarcity and drive up prices. At the time, agriculture sales and prices were spiraling downward. What Congress seems not to have noticed is that the Depression ended 50 years ago, eliminating the need to fork over welfare to a small elite who inherited the original licenses. Mr. Armey's bill would abolish the licenses and regulate peanuts like most other crops. That would guarantee lower prices for consumers and more freedom for farmers. The losers would be those who inherited, or bought, the licenses that were originally given to Depression-era peanut farmers. Half of these current owners don't grow peanuts and might not know the difference between a peanut and a pine nut. They nevertheless collect enormous fees by renting their licenses to farmers who do.

Mr. Armey would include peanuts among the crops that Congress routinely protects from competition. An even better policy would be to scrap protectionist laws. Studies show that they drive up consumer prices primarily for the benefit of large, wealthy farmers. But Mr. Armey's bill is good enough, and politically feasible.