[Federal Register: December 15, 2008 (Volume 73, Number 241)]
[Rules and Regulations]
[Page 75929-75931]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15de08-2]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 946
[Docket No. AMS-FV-08-0036; FV08-946-1 FIR]
Irish Potatoes Grown in Washington; Relaxation of Handling and
Import Regulations
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: The Department of Agriculture (USDA) is adopting, as a final
rule, without change, an interim final rule relaxing the size
requirement prescribed under the Washington potato marketing order. The
marketing order regulates the handling of Irish potatoes grown in
Washington, and is administered locally by the State of Washington
Potato Committee (Committee). This rule continues in effect the action
that relaxed the minimum size required for all fresh market red, yellow
fleshed, and white types of potatoes from 1 inch (25.4 mm) to \3/4\
inch (19.1 mm) in diameter, if the potatoes otherwise meet the
requirements of U.S. No. 1 grade. This rule also continues in effect
the action that relaxed the minimum size requirement from July 1
through September 30 of each year for imported red-skinned, round type
potatoes under the import regulations as required by section 8e of the
Agricultural Marketing Agreement Act of 1937. The Committee recommended
this change in response to the recently revised U.S. Standards for
Grades of Potatoes which added a definition for Creamer potatoes. This
change is intended to provide potato handlers with greater marketing
flexibility, growers with increased returns, consumers with a greater
supply of small potatoes, and to bring the section 8e potato import
regulation into conformity with the marketing order.
DATES: Effective Date: January 14, 2009.
FOR FURTHER INFORMATION CONTACT: Teresa Hutchinson or Gary Olson,
Northwest Marketing Field Office, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, Telephone: (503) 326-
2724, Fax: (503) 326-7440, or e-mail: Teresa.Hutchinson@usda.gov or
GaryD.Olson@usda.gov.
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 rule is issued under Marketing Order
No. 946, as amended (7 CFR part 946), regulating the handling of Irish
potatoes grown in Washington, 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.''
This rule is also issued under section 8e of the Act, which
provides that whenever certain specified commodities, including
potatoes, are regulated under a Federal marketing order, imports of
these commodities into the United States are prohibited unless they
meet the same or comparable grade, size, quality, or maturity
requirements as those in effect for the domestically produced
commodities. Section 8e also provides that whenever two or more
marketing orders regulating the same commodity produced in different
areas of the United States are concurrently in effect, a determination
must be made as to which of the areas produces the commodity in most
direct competition with the imported commodity. Imports must meet the
same or comparable requirements established for that particular area.
The requirements for red-skinned, round type potatoes imported from
July 1 through September 30 are based on the Washington potato
marketing order requirements.
USDA is issuing this rule in conformance with Executive Order
12866.
This 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.
There are no administrative procedures which must be exhausted
prior to any judicial challenge to the provisions of import regulations
issued under section 8e of the Act.
This rule continues in effect the action that relaxed the size
required for all fresh market red, yellow fleshed, and white types of
potatoes produced in Washington State from 1 inch (25.4 mm) to \3/4\
inch (19.1 mm) minimum, if the potatoes otherwise meet the requirements
of U.S. No. 1 grade. This change is intended to provide potato handlers
with greater marketing flexibility, growers with increased returns, and
consumers with a greater supply of small potatoes. This rule also
continues in effect the action that relaxed the minimum size
requirement from July 1 through September 30 of each year for imported
red-skinned, round type potatoes under the import regulations as
required by section 8e of the Agricultural Marketing Agreement Act of
1937. This rule will not affect the current import requirements for all
other round type or long type potatoes.
Section 946.52 of the order authorizes the establishment of grade,
size, quality, or maturity regulations for any variety or varieties of
potatoes grown in the production area. Section 946.52 also authorizes
the regulation of the size, capacity, weight, dimensions, pack, and
marking or labeling of the container, or
[[Page 75930]]
containers, which may be used in the packing or handling of potatoes,
or both. Section 946.51 further authorizes the modification,
suspension, or termination of regulations issued under Sec. 946.52.
Section 946.60 provides that whenever potatoes are regulated pursuant
to Sec. 946.52 such potatoes must be inspected by the Federal or
Federal-State Inspection Service, and certified as meeting the
applicable requirements of such regulations.
Section 946.336 of the order's administrative rules and regulations
prescribes the quality, size, maturity, cleanness, pack, and inspection
requirements for fresh market Washington potatoes. Section
946.336(a)(2) prescribes the size requirements. Relevant import
regulations are contained in Sec. 980.1 and Sec. 980.501 of the
vegetable import regulations.
During a video conference meeting held on April 16, 2008, with a
follow-up mail vote, the Committee unanimously recommended changing the
minimum size requirement for all U.S. No. 1 grade fresh market red,
yellow fleshed, and white types of potatoes produced under the order
from 1 inch to \3/4\ inch in diameter.
The Committee recommended this change in response to the recently
revised U.S. Standards for Grades of Potatoes (Standards) which became
effective on April 21, 2008 (73 FR 15051, March 21, 2008). The revised
Standards added a definition for Creamer potatoes. The revised
Standards define the Creamer size designation as \3/4\ inch minimum
diameter and 1\5/8\ inch maximum diameter with no minimum or maximum
weight.
Before the Standards were revised to include a Creamer size
designation, various states developed their own standards for Creamer
potatoes in an attempt to meet the increasing consumer demand for small
potatoes. The Washington potato industry had previously considered
Creamer potatoes to have a 1 inch minimum diameter. The Committee
recommended reducing the minimum diameter to \3/4\ inch so that the
handling regulation would correspond with the revised Standards and to
ensure that the industry was being responsive to the desires of
consumers. The Committee also believes that inconsistency between what
was marketed in Washington as Creamer potatoes and what the Standards
specify as Creamer potatoes would have caused confusion in the
marketplace.
Within the past several years, consumer demand has increased for
small potatoes which often command premium prices. Decreasing the
minimum size requirement from 1 inch to \3/4\ inch will help handlers
in Washington meet the needs of their customers.
Committee statistics show that approximately 25 percent (2,483,219
hundredweight) of fresh market Washington potatoes (9,932,874
hundredweight) are red, yellow fleshed and white types of potatoes. The
relaxation in the size requirement is expected to increase the volume
of red, yellow fleshed, and white types of potatoes that meet minimum
size requirements. Shipping a larger portion of the crop to market
would help meet consumer demand and is expected to increase returns to
growers.
As mentioned earlier, section 8e of the Act provides that when
certain domestically produced commodities, including potatoes, are
regulated under a Federal marketing order, imports of that commodity
must meet the same or comparable grade, size, quality, and maturity
requirements. Section 8e also provides that whenever two or more
marketing orders regulating the same commodity produced in different
areas of the United States are concurrently in effect, a determination
must be made as to which of the areas produces the commodity in most
direct competition with the imported commodity. Imports must meet the
requirements established for that particular area.
Grade, size, quality, and maturity regulations have been issued
regularly under marketing orders No. 945 (Idaho-Eastern Oregon
potatoes), No. 948 (Colorado potatoes, Area No. 2 and Area No. 3), No.
946 (Washington potatoes), and No. 953 (Southeastern potatoes) since
the marketing orders were established. Section 980.1 of the vegetable
import regulations specifies that import requirements for potatoes are
to be based on the seasonal categories of potatoes produced in all
marketing order areas. In that regard, imported red-skinned, round type
potatoes must meet the requirements of the Washington potato marketing
order during the months of July through September and the Area No. 2
Colorado potato marketing order during the months of October through
the following June. This rule will not affect the current import
requirements for all other round type or long type potatoes.
Final Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS)
has considered the economic impact of this action on small entities.
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.
Import regulations issued under the Act are based on regulations
established under Federal marketing orders which regulate the handling
of domestically produced products.
Currently, there are approximately 45 handlers of Washington
potatoes who are subject to regulation under the marketing order and
approximately 267 potato producers in the regulated area. Small
agricultural service firms are defined by the Small Business
Administration (SBA) (13 CFR 121.201) as those having annual receipts
of less than $7,000,000, and small agricultural producers are defined
as those having annual receipts of less than $750,000.
During the 2006-2007 marketing year, 9,932,874 hundredweight of
Washington potatoes were inspected under the order and sold into the
fresh market by 43 handlers, according to Committee data. The Committee
reports that an industry consensus estimate of an average fresh potato
f.o.b. price is $8.45 per hundredweight. Multiplying the 2006-2007
fresh shipments of 9,932,874 hundredweight by the average f.o.b. price
of $8.45 yields a handler-level fresh market crop value of $83.933
million. Dividing $83.933 million by 43 handlers gives an average
annual sales value per handler estimate of about $1.952 million. The
Committee estimates that 41, or about 95 percent of these 43 handlers,
had annual receipts of less than $7,000,000.
A comparable computation can be made to estimate annual average
revenue per producer. Based on information provided by the National
Agricultural Statistics Service, the 2006 season average producer price
for Washington potatoes was $6.25 per hundredweight. Multiplying the
2006-2007 fresh shipments of 9,932,874 hundredweight by the average
producer price of $6.25 provides a producer-level fresh market crop
value of $62.08 million. Dividing $62.08 million by 267 Washington
potato producers yields an average annual fresh market sales value per
producer of approximately $232,500.
In view of the foregoing, it can be concluded that the majority of
the
[[Page 75931]]
Washington potato producers and handlers may be classified as small
entities. Although it is not known how many importers of potatoes may
be classified as small entities, we believe that many of the importers
of potatoes can be classified as such.
This rule continues in effect the action that decreased the minimum
size required for all fresh market red, yellow fleshed, and white types
of potatoes produced under the order from 1 inch to \3/4\ inch in
diameter, if they otherwise meet the requirements of U.S. No. 1 grade.
This change enables handlers with the ability to respond to the
consumer demand for small potatoes. As provided under section 8e of the
Act, this change will also apply to all imported red-skinned, round
type potatoes between July 1 through September 30 of each year. While
no change will be required in the language of Sec. 980.1, all imported
red-skinned, round type potatoes from July 1 through September 30 will
be required to meet the minimum size requirement of \3/4\ inch in
diameter.
The authority for the grade and size requirements is provided in
Sec. 946.52 of the order. Section 946.336(a)(2) of the order's
administrative rules and regulations prescribes the size requirement.
Relevant import regulations are contained in Sec. 980.1 and Sec.
980.501 of the vegetable import regulations.
Regarding the impact of this rule on affected entities, relaxing
the size required for these potatoes is expected to benefit handlers,
importers and growers. There should be no extra cost to producers or
handlers because current harvesting and handling methods can
accommodate the sorting of these smaller potatoes. By relaxing the
minimum size required for these potatoes, a greater quantity of
potatoes will meet the order's handling regulations and the import
regulations. This could translate into an increased market for small
potatoes and greater returns for handlers, importers, and growers.
As small potatoes have grown in popularity with consumers, the
market demand has outpaced the quantity of small, high quality potatoes
available from Washington. The Committee believes that a relaxation in
the size requirement will increase the available supply of small
potatoes. The small potato market is a minor segment of the Washington
potato market. As such, the Committee believes that these small
potatoes do not compete directly with most of the fresh market potatoes
and that this action will not adversely affect the overall Washington
potato market.
By providing Washington handlers the flexibility to pack the
smaller red, yellow fleshed, and white types of potatoes, the Committee
believes the industry will remain competitive in the marketplace. The
Creamer potato market is a premium market and this action is expected
to further increase sales of Washington Creamer potatoes to benefit the
Washington potato industry. The benefits of this rule are not expected
to be disproportionately greater or lesser for small entities than
large entities.
The Committee discussed several alternatives to this
recommendation, including not changing the minimum size requirement.
However, the Committee believes that it is important that the
Washington potato handling regulations be consistent with the revised
Standards to reduce confusion during the inspection and marketing of
these types of potatoes. The Committee also determined that relaxing
the minimum size requirement for these potatoes will provide the
greatest benefit to the industry by augmenting the developing market
for small potatoes and increasing grower returns.
AMS is committed to complying with the E-government Act, to promote
the use of the Internet and other information technologies to provide
increased opportunities for citizen access to Government information
and services, and for other purposes.
This rule will not impose any additional reporting or recordkeeping
requirements on either small or large potato handlers. 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. In addition, as noted in the initial
regulatory flexibility analysis, USDA has not identified any relevant
Federal rules that duplicate, overlap or conflict with this rule.
Further, the Committee's meeting was widely publicized throughout
the Washington potato industry and all interested persons were invited
to participate in Committee deliberations. Like all Committee meetings,
the April 16, 2008, meeting was a public meeting and all entities, both
large and small, were able to express views on this issue. In addition,
the World Trade Organization and known importers of potatoes will be
notified of this action.
An interim final rule concerning this action was published in the
Federal Register on September 10, 2008. Copies of this rule were mailed
by Committee staff to all Committee members and potato handlers. In
addition, the rule was made available through the Internet by USDA and
the Office of the Federal Register. That rule provided for a 60-day
comment period which ended November 10, 2008. No comments were
received.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at: http:/
/www.ams.usda.gov/AMSv1.0/
ams.fetchTemplateData.do?template=TemplateN&page=MarketingOrdersSmallBus
inessGuide. Any questions about the compliance guide should be sent to
Jay Guerber at the previously mentioned address in the FOR FURTHER
INFORMATION CONTACT section.
In accordance with section 8e of the Act, the United States Trade
Representative has concurred with the issuance of this rule.
After consideration of all relevant material presented, including
the Committee's recommendation, and other information, it is found that
finalizing the interim final rule, without change, as published in the
Federal Register (73 FR 52573, September 10, 2008) will tend to
effectuate the declared policy of the Act.
List of Subjects in 7 CFR Part 946
Marketing agreements, Potatoes, Reporting and recordkeeping
requirements.
PART 946--IRISH POTATOES GROWN IN WASHINGTON
0
Accordingly, the interim final rule amending 7 CFR part 946 which was
published at 73 FR 52573 on September 10, 2008, is adopted as a final
rule without change.
Dated: December 8, 2008.
James E. Link,
Administrator, Agricultural Marketing Service.
[FR Doc. E8-29600 Filed 12-12-08; 8:45 am]
BILLING CODE 3410-02-P