[Federal Register: April 26, 2005 (Volume 70, Number 79)]
[Rules and Regulations]
[Page 21328-21330]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26ap05-3]
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 945
[Docket No. FV05-945-1 FR]
Irish Potatoes Grown in Certain Designated Counties in Idaho, and
Malheur County, OR; Relaxation of Handling Regulations
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This rule relaxes the minimum size requirement for all U.S.
No. 2 grade non-red round potatoes handled under the marketing order
for Idaho-Eastern Oregon potatoes to 1\7/8\ inches minimum diameter.
This relaxation in the handling regulations was unanimously recommended
by the Idaho-Eastern Oregon Potato Committee (Committee), the agency
responsible for local administration of the marketing order program in
the designated production area. This change is intended to improve the
marketing of Idaho-Eastern Oregon potatoes and increase returns to
producers.
EFFECTIVE DATE: April 27, 2005.
FOR FURTHER INFORMATION CONTACT: Barry Broadbent, Marketing Specialist,
Northwest Marketing Field Office, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, 1220 SW. Third Avenue,
Suite 385, Portland, OR 97204; telephone: (503) 326-2724, Fax: (503)
326-7440; or George J. Kelhart, Technical Advisor, Marketing Order
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400
Independence Avenue, SW., STOP 0237, Washington, DC 20250-0237;
telephone: (202) 720-2491, Fax: (202) 720-8938.
Small businesses may request information on complying with this
regulation by contacting Jay Guerber, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence
Avenue, SW., STOP 0237, Washington, DC 20250-0237; telephone: (202)
720-2491, Fax: (202) 720-8938, or e-mail: Jay.Guerber@usda.gov.
SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing
Agreement and Marketing Order No. 945, both as amended (7 CFR part
945), regulating the handling of Irish potatoes grown in certain
designated counties in Idaho, and Malheur County, Oregon, hereinafter
referred to as the ``order.'' The order is effective under the
Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-
674), hereinafter referred to as the ``Act.''
The Department of Agriculture (USDA) is issuing this rule in
conformance with Executive Order 12866.
This final rule has been reviewed under Executive Order 12988,
Civil Justice Reform. This rule is not intended to have retroactive
effect. This rule will not preempt any State or local laws,
regulations, or policies, unless they present an irreconcilable
conflict with this rule.
The Act provides that administrative proceedings must be exhausted
before parties may file suit in court. Under section 608c(15)(A) of the
Act, any handler subject to an order may file with USDA a petition
stating that the order, any provision of the order, or any obligation
imposed in connection with the order is not in accordance with law and
request a modification of the order or to be exempted therefrom. A
handler is afforded the opportunity for a hearing on the petition.
After the hearing USDA would rule on the petition. The Act provides
that the district court of the United States in any district in which
the handler is an inhabitant, or has his or her principal place of
business, has jurisdiction to review USDA's ruling on the petition,
provided an action is filed not later than 20 days after the date of
the entry of the ruling.
This final rule relaxes the minimum size requirement for all U.S.
No. 2 grade non-red round potatoes handled under the order to 1\7/8\
inches minimum diameter. Currently, U.S. No. 2 grade round red-skinned
potato varieties have to meet this requirement. The other U.S. No. 2
round varieties have to be 2 inches minimum diameter or 4 ounces
minimum weight, provided that at least 40 percent of the potatoes in
each lot have to be 5 ounces or heavier.
Sections 945.51 and 945.52 of the order provide authority for the
establishment and modification of grade, size, quality, and maturity
regulations applicable to the handling of potatoes. Section 945.341
establishes minimum grade, size, and maturity requirements for potatoes
handled subject to the order. In addition to the current minimum size
requirement specifications mentioned in the previous paragraph, Sec.
945.341 also allows potatoes that are U.S. No. 1 grade to meet a less
stringent size B requirement (1\1/2\ inches minimum and 2\1/4\ inches
maximum) as specified in the United States Standards for Grades of
Potatoes (7 CFR 51.1540-51.1566).
At its meeting on November 4, 2004, the Committee unanimously
recommended reducing the minimum size requirement for all varieties of
U.S. No. 2 grade round potatoes to 1\7/8\ inches minimum diameter.
Committee members stated that round potato production, particularly
for non-red varieties, has been increasing in recent years. Non-red
round potato varieties now make up a significant percentage of total
round potato production. In the past, red-skinned varieties were
essentially the only round varieties produced within the production
area. Some new round varieties that have been introduced have skin
colors such as white, yellow, gold, purple, blue, and pink.
Committee members believe that it is important that the handling
regulations be changed to recognize the significant increase in the
production of non-red varieties of round potatoes. They believe that
relaxing the minimum size requirement for U.S. No. 2 grade round
potatoes would enable handlers to market a larger portion of the crop
in fresh market outlets and meet the needs of buyers.
According to the Committee, quality assurance is very important to
the industry and to its customers. Providing the public with acceptable
quality produce that is appealing to the consumer on a consistent basis
is necessary to maintain buyer confidence in the marketplace. The
Committee reports that potato size is important to buyers and that
providing the sizes desired is important to promote sales. Buyers have
indicated that 1\7/8\ inches minimum diameter for all varieties of
round potatoes is a desirable size.
This change is expected to improve the marketing of Idaho-Eastern
Oregon potatoes and increase returns to producers.
This rule has no impact on potato imports covered by section 608e
of the Act.
Final Regulatory Flexibility Analysis
Pursuant to the requirements set forth in the Regulatory
Flexibility Act (RFA), the Agricultural Marketing Service (AMS) has
considered the economic impact of this action on small entities.
[[Page 21329]]
Accordingly, AMS has prepared this final regulatory flexibility
analysis.
The purpose of the RFA is to fit regulatory actions to the scale of
business subject to such actions in order that small businesses will
not be unduly or disproportionately burdened. Marketing orders issued
pursuant to the Act, and rules issued thereunder, are unique in that
they are brought about through group action of essentially small
entities acting on their own behalf. Thus, both statutes have small
entity orientation and compatibility.
There are approximately 52 handlers of Idaho-Eastern Oregon
potatoes who are subject to regulation under the order and about 900
potato producers in the regulated area. Small agricultural service
firms, which include potato handlers, are defined by the Small Business
Administration (SBA) (13 CFR 121.201) as those having annual receipts
of less than $6,000,000, and small agricultural producers are defined
as those whose annual receipts are less than $750,000.
Based on a three-year average fresh potato production of 33,767,000
hundredweight as calculated from Committee records, a three-year
average of producer prices of $5.18 per hundredweight reported by the
National Agricultural Statistics Service, and 900 Idaho-Eastern Oregon
potato producers, the average annual producer revenue is approximately
$194,349. It can be concluded, therefore, that a majority of these
producers would be classified as small entities.
In addition, based on Committee records and 2003-04 f.o.b. shipping
point prices ranging from $4.00 to $28.00 per hundredweight reported by
USDA's Market News Service, most of the Idaho-Eastern Oregon potato
handlers do not ship over $6,000,000 worth of potatoes. In view of the
foregoing, it can be concluded that a majority of the handlers would be
classified as small entities as defined by the SBA.
This final rule establishes a minimum size requirement of 1\7/8\
inches minimum diameter for all U.S. No. 2 grade round potatoes.
Currently, the minimum size requirement for U.S. No. 2 grade round
varieties, other than red, is 2 inches minimum diameter or 4 ounces
minimum weight provided that at least 40 percent of the potatoes in
each lot must be 5 ounces or heavier. The red-skinned round varieties
have to be 1\7/8\ inches minimum diameter.
Committee members believe that it is important that the handling
regulations be changed to recognize the significant increase in the
production of non-red varieties of round potatoes. They believe that
relaxing the minimum size requirement for U.S. No. 2 grade round
potatoes will enable handlers to market a larger portion of the crop in
fresh market outlets and meet the needs of buyers. Buyers have
indicated that the 1\7/8\ inches minimum diameter is a desirable size.
This change is expected to improve the marketing of Idaho-Eastern
Oregon potatoes and increase returns to producers.
Authority for this action is provided in Sec. Sec. 945.51 and
945.52 of the order.
At the November 4, 2004, meeting, the Committee discussed the
impact of this change on handlers and producers. This action is a
relaxation of the handling regulations and, as such, should either
generate a positive impact or no impact on industry participants. The
Committee did not foresee a situation in which this change will
negatively impact either handlers or producers.
Round type potatoes are produced and handled by only a small
percentage of the industry. The predominant producing regions are
centered around the American Falls, Idaho Falls, and Blackfoot areas of
Idaho. Acreage is approximately 6,000 to 7,000 acres, which represents
only about 2 percent of the production area's 355,000 acres planted to
potatoes in 2004.
Round potato production is increasing within the production area.
Shipments for the 2003-2004 season were approximately 300,000
hundredweight. The Committee estimates that round potato shipments for
the 2004-2005 season could approach 800,000 hundredweight. The
Committee reported that one round yellow-skinned variety might account
for 500,000 hundredweight. Through week 33 of the 2004-2005 season,
reported shipments of round potatoes were up 69 percent from the prior
year.
The Committee reported that smaller size round potatoes of good
quality receive premium prices. This contention is consistent with USDA
Market News Service reports. Market News does not report on round type
potatoes in the Idaho-E. Oregon area, but does report on other round
potato producing regions. It would be reasonable to expect price trends
between production areas to move together, given that the regions would
compete with each other for sales in the domestic market.
Relaxing the size requirement will allow producers and handlers of
non-red U.S. No. 2 grade round potatoes to market a greater percentage
of their crop under the order. This should lead to increased total net
returns for those firms. The benefits derived from this change are not
expected to be disproportionately greater or less for small handlers or
producers than for larger entities.
The Committee discussed alternatives to this change. One
alternative included making no change at all to the regulations. The
Committee did not believe this alternative would meet the needs of
buyers or benefit the industry. Another alternative discussed was to
allow round potatoes to be exempted from regulations under Certificate
of Privilege provisions provided within the order. This option also was
rejected because it would allow lower quality potatoes to be shipped to
the fresh market. Lastly, the Committee considered further relaxing the
size requirement for all round potatoes below the 1\7/8\ inches minimum
diameter. The Committee believed that relaxing the minimum size
requirement for U.S. No. 2 round potatoes below 1\7/8\ inches would
result in buyer dissatisfaction. Producers and handlers who wish to
ship smaller round potatoes may do so by conforming to the U.S. No. 1
grade standard.
With only a small amount of the total potato crop in the production
area expected to be affected by relaxing the size requirement, the
Committee believes that relaxing the size requirement of non-red-
skinned U.S. No. 2 round potatoes to a 1\7/8\ inches minimum diameter
will provide the greatest amount of benefit to the industry with the
least amount of cost.
This final rule relaxes minimum size requirements under the
marketing order. Accordingly, this action will not impose any
additional reporting or recordkeeping requirements on either small or
large potato handlers and importers. As with all Federal marketing
order programs, reports and forms are periodically reviewed to reduce
information requirements and duplication by industry and public sector
agencies.
As noted in the initial regulatory flexibility analysis, USDA has
not identified any relevant Federal rules that duplicate, overlap, or
conflict with this rule. However, as previously stated, potatoes
handled under the order must meet certain requirements set forth in the
United States Standards for Potatoes (7 CFR 51.1540-51.1566) issued
under the Agricultural Marketing Act of 1946 (7 U.S.C. 1621, et seq.).
Standards issued under the Agricultural Marketing Act of 1946 are
otherwise voluntary.
Further, the Committee's meeting was widely publicized throughout
the potato industry, and all interested persons were invited to attend
the meeting and participate in Committee deliberations. Like all
Committee meetings, the November 4, 2004, meeting was a public
[[Page 21330]]
meeting and all entities, both large and small, were able to express
their views on this issue. Finally, interested persons were invited to
submit information on the regulatory and informational impacts of this
action on small businesses.
A proposed rule concerning this action was published in the Federal
Register on January 24, 2005 (70 FR 3313). Copies of the rule were
mailed or sent via facsimile to all Committee members and potato
handlers. Finally, the rule was made available through the Internet by
the Office of the Federal Register and USDA. A 60-day comment period
ending March 25, 2005, was provided to allow interested persons to
respond to the proposal. No comments were received.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at the
following Web site: http://www.ams.usda.gov/fv/moab.html. Any questions
about the compliance guide should be sent to Jay Guerber at the
previously mentioned address in the FOR FURTHER INFORMATION CONTACT
section.
After consideration of all relevant material presented, including
the information and recommendation submitted by the Committee and other
available information, it is hereby found that this rule, as
hereinafter set forth, will tend to effectuate the declared policy of
the Act.
It is further found that good cause exists for not postponing the
effective date of this rule until 30 days after publication in the
Federal Register (5 U.S.C. 553) because handlers are already shipping
round potatoes from the 2004-2005 crop and handlers want to take
advantage of the relaxation as soon as possible. Further, handlers are
aware of this rule, which was recommended at a public meeting. Also, a
60-day comment period was provided for in the proposed rule and no
comments were received.
List of Subjects in 7 CFR Part 945
Marketing agreements, Potatoes, Reporting and recordkeeping
requirements.
0
For the reasons set forth above, 7 CFR part 945 is amended as follows:
PART 945--IRISH POTATOES GROWN IN CERTAIN DESIGNATED COUNTIES IN
IDAHO, AND MALHEUR COUNTY, OREGON
0
1. The authority citation for 7 CFR part 945 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
Sec. 945.341 [Amended]
0
2. In Sec. 945.341, paragraph (a)(2)(i), remove the words ``Round red
varieties.'' and add in their place ``Round varieties.''
Dated: April 20, 2005.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 05-8246 Filed 4-25-05; 8:45 am]
BILLING CODE 3410-02-P