[Federal Register: May 22, 2009 (Volume 74, Number 98)]
[Proposed Rules]
[Page 23958-23961]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22my09-9]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 945
[Doc. No. AMS-FV-08-0062; FV08-945-1 PR]
Irish Potatoes Grown in Certain Designated Counties in Idaho, and
Malheur County, OR and Imported Irish Potatoes; Relaxation of Size
Requirements
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would relax the size requirements for
potatoes handled under the marketing order for Idaho-Eastern Oregon
potatoes and for long type potatoes imported into the United States.
This rule would revise the size requirements to allow: Creamer size
(\3/4\ inch to 1\5/8\ inches diameter) for all varieties of potatoes to
be handled if the potatoes otherwise meet U.S. No. 1 grade; and round
type potatoes to be handled without regard to size so long as the size
is specified on the container in connection with the grade. The
proposed changes are intended to improve the handling and marketing of
Idaho-Eastern Oregon potatoes and increase returns to producers. The
proposed changes would also allow the importation of Creamer size long
type potatoes under regulations as authorized by section 8e of the
Agricultural Marketing Agreement Act of 1937.
DATES: Comments must be received by July 21, 2009.
ADDRESSES: Interested persons are invited to submit written comments
concerning this proposal. Comments should be sent to the Docket Clerk,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC
20250-0237; Fax: (202) 720-8938; or Internet: http://
www.regulations.gov. All comments should reference the document number
and the date and page number of this issue of the Federal Register and
will be available for public inspection in the office of the Docket
Clerk during regular business hours, or can be viewed at http://
www.regulations.gov. All comments submitted in response to this rule
will be included in the record and will be made available to the
public. Please be advised that the identity of the individuals or
entities submitting the comments will be made public on the Internet at
the address provided above.
FOR FURTHER INFORMATION CONTACT: Barry Broadbent or Gary D. Olson,
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 E-mail: Barry.Broadbent@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.
[[Page 23959]]
SUPPLEMENTARY INFORMATION: This proposed 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.''
This proposed 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.
USDA is issuing this rule in conformance with Executive Order
12866.
This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. This action is not intended to have retroactive
effect. This proposed 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.
Under the terms of the marketing order, fresh market shipments of
Idaho-Eastern Oregon potatoes are required to be inspected and are
subject to grade, size, quality, maturity, pack, and container
requirements. This proposed rule invites comments on relaxing the
current size requirements for potatoes handled under the order. As
required under section 8e of the Act, the addition of the Creamer size
allowance for U.S. No. 1 grade potatoes to the size requirements
contained in the marketing order regulations would change the import
regulations for imported long type potatoes.
At its meeting on June 9, 2008, the Committee unanimously
recommended relaxing the size requirements for all varieties of U.S.
No. 1 grade potatoes. Additionally, the Committee recommended adding a
provision to the current requirements that would allow handling of U.S.
No. 2 or better grade round type potatoes without regard to size so
long as the size is specified on the container in connection with the
grade.
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. Currently, the
order's handling regulations specify the size requirement for round
type potato varieties handled subject to the order to be 1\7/8\ inches
minimum diameter. All other varieties of potatoes handled must be 2
inches minimum diameter, or 4 ounce minimum weight, provided that at
least 40 percent of the potatoes in each lot shall be 5 ounces or
heavier. Additionally, the order's handling regulations allow the
handling of Size B potatoes (1\1/2\ to 2\1/4\ inches diameter), as
established in the United States Standards for Grades of Potatoes (7
CFR 51.1540-51.1566), so long as the potatoes otherwise meet the
requirements of U.S. No. 1 grade.
This proposed rule would relax the size requirements of potatoes
regulated under the order to allow the handling of Creamer size
potatoes (\3/4\ to 1\5/8\ inches diameter, as defined in the United
States Standards for Grades of Potatoes), if those potatoes otherwise
meet the requirements of U.S. No. 1 grade. In addition, this rule would
add a provision to the existing size requirements to allow U.S. No. 2
grade or better round type potatoes to be handled without regard to
size, so long as the size is specified on the container in connection
with the grade. This change is consistent with the size requirements
for U.S. No 1 and U.S. No. 2 grade potatoes as contained in the United
States Standards for Grades of Potatoes.
Committee members stated that consumer demand for small potatoes
has been increasing in recent years and now makes up a significant
percentage of total domestic potato consumption. The trend has also
increased domestic market demand for potatoes smaller than currently
allowed by the size requirements prescribed in the order. This shift in
consumer preference has been recognized with the inclusion of the new
Creamer size classification in the most recent update of the United
States Standards for Grades of Potatoes, which became effective April
21, 2008 (73 FR 15052). The market for smaller potatoes is currently
being supplied by potato production areas outside the order's
production area and through limited special purpose shipments
authorized under Sec. 945.341(e)(iii).
Committee members believe that it is important that the handling
regulations be changed to recognize the significant increase in the
demand for small size potatoes. They believe that relaxing the minimum
size requirement for certain grades and packs of potatoes would enable
handlers to market a larger portion of the potato crop in fresh market
outlets, meet the supply needs of potato buyers, and satisfy the
purchasing preferences of potato consumers.
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 consumer confidence in the marketplace. The
Committee believes that relaxing the size requirements, while
maintaining all other regulatory requirements, will preserve their
commitment to quality while allowing the industry to adapt to changing
consumer preferences.
The Committee reported that potato size is a significant
consideration of potato buyers. Providing them the sizes desired by
their customers is important to promoting potato sales. In addition,
small size potatoes tend to command higher prices in the market,
providing producers and handlers the opportunity to increase revenues.
This proposed change is expected to improve the marketing of Idaho-
Eastern Oregon potatoes, increase the volume of potatoes handled, and
enhance overall returns to producers.
Section 8e provides the authority for the regulation of certain
imported commodities whenever those same commodities are regulated by a
domestic marketing order. Potatoes are one of the commodities
specifically covered by section 8e in the Act. In
[[Page 23960]]
addition, section 8e provides that whenever two or more such marketing
orders regulating the same agricultural commodity produced in different
areas are concurrently in effect, imports must comply with the
provisions of the order which regulates the commodity produced in the
area with which the imported commodity is in the ``most direct
competition.'' Section 980.1(a)(2)(iii) contains the determination that
imports of long type potatoes during each month of the year are in most
direct competition with potatoes of the same type produced in the area
covered by the order.
Minimum grade, size, quality, and maturity requirements for
potatoes imported into the United States are currently in effect under
Sec. 980.1. Section 980.1(b)(3) provides that, through the entire
year, the grade, size, quality, and maturity requirements of Marketing
Order No. 945 applicable to potatoes of all long types shall be the
respective grade, size, quality, and maturity requirements for imported
potatoes of all long types. This proposal would relax the size
requirements for imports of U.S. No. 1 grade, long type potatoes.
Currently, the minimum size requirement for imported long type U.S. No.
1 grade potatoes is Size B (1\1/2\ to 2\1/4\ inches). The proposed
change would allow importation of Creamer size (\3/4\ inch to 1\5/8\
inches) long type potatoes if the potatoes otherwise meet the
requirements of the U.S. No. 1 grade standard.
Initial 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.
Accordingly, AMS has prepared this initial 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 those
established under Federal marketing orders which regulate the handling
of domestically produced products.
There are approximately 46 handlers of Idaho-Eastern Oregon
potatoes who are subject to regulation under the order and about 900
potato producers in the regulated area. In addition, there are
approximately 255 importers of all types of potatoes, many of which
import long types, who are subject to regulation under the Act. Small
agricultural service firms, which include potato handlers and
importers, are defined by the Small Business Administration (13 CFR
121.201) as those having annual receipts of less than $7,000,000, and
small agricultural producers are defined as those whose annual receipts
are less than $750,000.
Based on a 2005-2007 average fresh potato production of 32,242,467
hundredweight as calculated from Committee records, a three-year
average of producer prices of $6.95 per hundredweight reported by the
National Agricultural Statistics Service (NASS), and 900 Idaho-Eastern
Oregon potato producers, the average annual producer revenue is
approximately $248,984. It can be concluded, therefore, that a majority
of these producers would be classified as small entities.
In addition, based on Committee records and 2005-2007 f.o.b.
shipping point prices predominantly ranging from $5.00 to $26.00 per
hundredweight reported by USDA's Market News Service (Market News),
many of the Idaho-Eastern Oregon potato handlers do not ship over
$7,000,000 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. The majority of potato importers may be
classified as small entities as well.
This proposed rule would relax the size requirements of potatoes
regulated under the order to allow the handling of Creamer size
potatoes, if those potatoes otherwise meet the requirements of U.S. No.
1 grade. Additionally, this rule would add a provision to the existing
size requirements that would allow round type potatoes to be handled
without regard to size, so long as the size is specified on the
container in connection with the grade.
Pursuant to section 8(e), this rule would also relax the size
requirements of the import regulations to allow importation of Creamer
size, long type potatoes if the potatoes otherwise meet the
requirements of U.S. No. 1 grade. This rule would not affect the
current import requirements for red-skinned, round type or all other
round type potatoes and would not require any language changes to Sec.
980.1 of the vegetable import regulations.
Committee members believe it is important to modify the handling
regulations to recognize the significant increase in the demand for
smaller size potatoes. They believe that relaxing the minimum size
requirements would enable handlers to market a larger portion of the
crop in fresh market outlets and to meet the needs of consumers and
produce buyers. Market mechanisms have indicated that smaller minimum
diameter potatoes are desirable, as evidenced by the increasing demand
for such potatoes, and consistently command higher prices in relation
to larger diameter potatoes. This action is being proposed to ensure
that the growing market for smaller sized potatoes continues to be
adequately supplied. This proposed change is expected to improve the
marketing of Idaho-Eastern Oregon potatoes and increase returns to
producers.
Authority for this proposed rule is provided in Sec. Sec. 945.51
and 945.52 of the order. Section 945.341(a)(2) of the order's handling
regulations prescribes the size requirements. Relevant import
regulations are contained in Sec. Sec. 980.1 and 980.501.
At the June 9, 2008, meeting, the Committee discussed the impact of
this change on handlers and producers. The proposal is a relaxation of
current regulation 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 proposed change would negatively
impact either handlers or producers.
Neither the Committee nor NASS compile statistics exclusively
relating to the production of small size potatoes. The Committee has
relied on the opinions of the producers and the handlers familiar with
that market to draw its conclusions. Information presented in the June
9 meeting suggests that there is increasing domestic consumer demand
for small size potatoes. There also appears to be a trend in domestic
consumer preference toward increasingly smaller diameter potatoes. This
is in contrast to the demand for larger size potatoes, which has been
essentially static for several years.
The addition of the Creamer size designation to the United States
Standards for Grades of Potatoes by the USDA Fresh Products Branch
(Fresh Products) supports the Committee's position that market demand
for small size potatoes is increasing. Prior to the recent changes made
in the United States Standards for Grades of Potatoes, the smallest
potato size designation was Size B, with a minimum diameter of 1\1/2\
inches. Fresh Products determined that a smaller potato size
designation was necessary to accommodate emerging marketing trends in
the potato industry. The addition of the Creamer size
[[Page 23961]]
designation reduced the minimum potato size, as determined in the
United States Standards for Grades of Potatoes, to \3/4\ inches
diameter.
The Committee reported that smaller size potatoes of good quality
receive premium prices. While USDA Market News does not report on round
type potatoes or on small size, long type potatoes in the Idaho-E.
Oregon area, but does report on activity in other regions producing
both round types and smaller sizes of potatoes, reports from other
areas do show that the higher grade, small size round type potatoes
consistently command higher prices than larger potatoes. 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 would allow producers and handlers of
potatoes under the order to ship a greater percentage of their crop to
the fresh market. In addition, shipments of the smaller size potatoes
that would be allowed after this change should command higher prices,
which would be expected to increase total net returns for those firms
who chose to ship. The benefits derived from this rule change are not
expected to be disproportionately more or less for small handlers or
producers than for larger entities.
Additionally, this rule would allow potato importers to respond to
the changing demand of the domestic consumers. The market's increasing
preference for small size potatoes applies to imported potatoes as well
as domestic potatoes. Thus, importers would benefit by increasing sales
to an emerging domestic market segment.
The Committee discussed alternatives to this proposed change. One
alternative included making no change at all to the current regulation.
The Committee did not believe that maintaining the current requirements
would serve to meet the needs of consumers or buyers, and would not
ultimately be of any benefit to the industry. Another alternative
discussed was to allow smaller size potatoes to continue to be handled
exempt from regulation under the special purpose shipment provisions
provided within the order. This option was also rejected because it
could potentially allow lower quality potatoes to be shipped into the
fresh market. Lastly, the Committee considered further relaxing the
size requirement for potatoes beyond what is proposed in this rule. The
discussion centered on whether to extend the relaxation to U.S. No. 2
grade potatoes as well. The Committee believed that the proposed
relaxation is sufficient to adequately supply the growing market demand
for smaller size potatoes while still maintaining high quality
standards for such potatoes. After consideration of all the
alternatives, the Committee believes that the proposed changes
contained herein would provide the greatest amount of benefit to the
industry with the least amount of cost.
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 would 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. In addition, USDA
has not identified any relevant Federal rules that duplicate, overlap,
or conflict with this proposed rule.
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 June 9, 2008, meeting was a public meeting and
all entities, both large and small, were able to express their views on
this issue. Finally, interested persons are invited to submit comments
on this proposed rule, including the regulatory and informational
impacts of this action on small businesses.
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 proposed rule.
A 60-day comment period is provided to allow interested persons to
respond to this proposal. All written comments timely received will be
considered before a final determination is made on this matter.
List of Subjects in 7 CFR Part 945
Marketing agreements, Potatoes, Reporting and recordkeeping
requirements.
For the reasons set forth above, 7 CFR part 945 is proposed to be
amended as follows:
PART 945--IRISH POTATOES GROWN IN CERTAIN DESIGNATED COUNTIES IN
IDAHO, AND MALHEUR COUNTY, OREGON
1. The authority citation for 7 CFR part 945 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. In Sec. 945.341, paragraphs (a)(2)(i) and (a)(2)(iii) are
revised to read as follows:
Sec. 945.341 Handling regulation.
* * * * *
(a) * * *
* * * * *
(2) * * *
(i) Round varieties. 1\7/8\ inches minimum diameter, unless
otherwise specified on the container in connection with the grade.
(ii) * * *
(iii) All varieties, U.S. No. 1 grade or better. (A) Size B (1\1/2\
to 2\1/4\ inches diameter).
(B) Creamer (\3/4\ to 1\5/8\ inches diameter).
* * * * *
Dated: May 18, 2009.
Robert C. Keeney,
Acting Associate Administrator.
[FR Doc. E9-11968 Filed 5-21-09; 8:45 am]
BILLING CODE 3410-02-P