[Federal Register Volume 79, Number 29 (Wednesday, February 12, 2014)]
[Rules and Regulations]
[Pages 8253-8257]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-03043]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 79, No. 29 / Wednesday, February 12, 2014 /
Rules and Regulations
[[Page 8253]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Parts 946 and 980
[Doc. No. AMS-FV-13-0068; FV13-946-3 IR]
Irish Potatoes Grown in Washington and Imported Potatoes;
Modification of the Handling Regulations, Reporting Requirements, and
Import Regulations for Red Types of Potatoes
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim rule with request for comments.
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SUMMARY: This rule exempts red types of potatoes from minimum quality,
maturity, pack, marking, and inspection requirements of the Washington
potato marketing order for the remainder of the 2013-2014 fiscal period
and subsequent fiscal periods. The marketing order regulates the
handling of Irish potatoes grown in Washington and is administered
locally by the State of Washington Potato Committee (Committee). During
the exemption period, reports will be required from handlers of red
types of potatoes to obtain information necessary to administer the
marketing order. As required under section 8e of the Agricultural
Marketing Agreement Act of 1937, this action also exempts imported red-
skinned, round type potatoes from minimum grade, size, quality, and
maturity requirements. This rule is expected to reduce overall industry
expenses and increase net returns to producers and handlers while
giving the industry the opportunity to explore alternative marketing
strategies.
DATES: Effective February 15, 2014; comments received by April 14, 2014
will be considered prior to issuance of a final rule.
ADDRESSES: Interested persons are invited to submit written comments
concerning this rule. Comments must be sent to the Docket Clerk,
Marketing Order and Agreement Division, Fruit and Vegetable Program,
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 made 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 comments will be made public on the internet at the
address provided above.
FOR FURTHER INFORMATION CONTACT: Teresa Hutchinson, Marketing
Specialist, or Gary Olson, Regional Director, Northwest Marketing Field
Office, Marketing Order and Agreement Division, Fruit and Vegetable
Program, AMS, USDA; Telephone: (503) 326-2724, Fax: (503) 326-7440, or
Email: [email protected] or [email protected].
Small businesses may request information on complying with this
regulation by contacting Jeffrey Smutny, Marketing Order and Agreement
Division, Fruit and Vegetable Program, AMS, USDA, 1400 Independence
Avenue SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-
2491, Fax: (202) 720-8938, or Email: [email protected].
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 interim 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, the
importation of these commodities into the United States is prohibited
unless they meet the same or comparable grade, size, quality, or
maturity requirements as those in effect for domestically produced
commodities.
The Department of Agriculture (USDA) is issuing this rule in
conformance with Executive Order 12866 and Executive Order 13563.
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. This rule is not intended to have retroactive effect.
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 there from. 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
entry of the ruling.
There are no administrative procedures which must be exhausted
prior to any judicial challenge to the provisions of import regulation
issued under section 8e of the Act.
This rule exempts red types of potatoes from the order's handling
regulations for the remainder of the 2013-2014 fiscal period and
subsequent fiscal periods. This rule allows the Washington potato
industry to market red types of potatoes without regard to the minimum
quality, maturity, pack, marking, and inspection requirements currently
prescribed under the order.
This rule also modifies the order's reporting requirements to
require reports from handlers of red types of potatoes for the
remainder of the 2013-2014 fiscal period and subsequent fiscal periods.
By modifying the reporting requirements, the Committee can continue to
obtain information necessary to administer the marketing order,
including the collection of assessments, in the absence of inspection
certificates and reports issued by the Federal State Inspection Service
(FSIS). Assessments on all fresh
[[Page 8254]]
red type potatoes handled under the order will remain in effect during
the exemption period.
The order authorizes the establishment of handling regulations for
all varieties or varietal types of potatoes grown in the production
area. These regulations can include minimum grade, size, quality,
maturity, and inspection requirements. They can also provide for the
size, capacity, weight, dimensions, pack, marking, or labeling of
containers used in the handling of such potatoes. The order also allows
such handling regulations to be modified, suspended, or terminated when
recommended by the Committee and approved by the Secretary.
When handling regulations are in effect, regulated potatoes must be
inspected and certified by FSIS. As authorized under the order, the
Committee uses information included on FSIS inspection certificates as
a basis for collecting assessments and compiling industry statistics.
Because this action exempts red types of potatoes from FSIS inspection
and certification, the industry must collect necessary information from
an alternate source. Therefore, this action also modifies current
reporting requirements to require handlers to submit reports to provide
information on the volume of red types of potatoes handled for the
fresh market during the exemption period.
The above-described authorities are found in Sec. Sec. 946.51,
946.52, 946.60, and 946.70 of the order. Administrative rules and
regulations issued under these authorities are found in Sec. Sec.
946.143 and 946.336.
The Committee meets regularly to consider the effectiveness of
regulatory requirements in place for Washington potatoes. These
requirements are issued on a continuing basis and are subject to
modification, suspension, or termination upon recommendation of the
Committee and approval by USDA. Committee meetings are open to the
public, and interested persons may express their views at these
meetings. USDA reviews recommendations made by the Committee, along
with any additional information submitted by the Committee and other
available information, and determines whether such recommendations
would tend to effectuate the declared policy of the Act.
On May 9, 2013, the Committee met to discuss the handling
regulations and the mandatory inspection requirements in effect for
Washington potatoes. The Committee considered whether a short-term
exemption of red types of potatoes from regulation could be beneficial.
The industry is concerned that the benefits of regulating the quality
of Washington potatoes may be outweighed by the current cost of
mandatory inspections.
After much consideration, on July 16, 2013, the Committee
unanimously recommended temporarily exempting red types of potatoes
from the handling regulations and modifying the reporting requirements
for such potatoes. The temporary exemption was recommended for the
duration of the current fiscal period so that the industry could
evaluate the exemption's effects on the marketing of potatoes.
On December 10, 2013, the Committee again met to discuss the
temporary exemption of red types of potatoes from the handling
regulations. The Committee continued to believe that the exemption of
red types of potatoes from handling regulations would reduce industry
costs without negatively impacting the market. Upon further
consideration, the Committee unanimously recommended exempting red
types of potatoes from the handling regulations for the remainder of
the current fiscal period and subsequent fiscal periods.
As a result of this exemption, red types of potatoes will not be
subject to the minimum grade, size, quality, cleanness, maturity, pack,
marking, and inspection requirements of the order for the remainder of
the 2013-2014 fiscal period and subsequent fiscal periods. Also during
this time, modified reporting requirements will be in effect to require
handlers to submit reports of their shipments of fresh red types of
potatoes to the Committee.
Historically, an objective of the order's handling regulations has
been to ensure that only quality Washington potatoes enter the fresh
market, thereby fostering consumer satisfaction and increasing sales
and returns for producers. However, the Committee reported that the
cost for inspections has recently increased. With potato prices at
reportedly low levels in recent years, the Committee studied the
possibility of reducing production costs by eliminating the mandatory
inspection requirement.
In discussing the relative benefits of quality control during the
Committee meeting, some individuals expressed concern that eliminating
quality requirements could result in lower quality potatoes being
shipped to the fresh market, thereby negatively affecting consumer
demand. Others expressed concern that without minimum requirements the
overall quality of potatoes could decline and the Washington potato
industry could lose sales to other potato producing areas with
mandatory quality and inspection requirements. While the industry
recognizes that quality is an important factor for maintaining sales,
the Committee believes the cost of mandatory inspections may exceed the
benefits derived from the quality regulation of red types of potatoes.
The Committee believes that the exemption of red types of potatoes
from handling regulations will also benefit the Washington potato
industry. The Committee recommended that red types of potatoes be
exempted from the regulations for the remainder of the current fiscal
period and subsequent fiscal periods.
This rule modifies Sec. 946.336 to exempt red types of potatoes
from handling regulations for the remainder of the 2013-2014 fiscal
period and subsequent fiscal periods. This rule does not restrict
handlers from seeking inspection on a voluntary basis, if they so
choose.
This action will result in a suspension of the monthly FSIS
inspection reports for red types of potatoes. The Committee has
utilized these monthly reports, compiled by FSIS from inspection
certificates, as a basis for collecting assessments. During the
exemption period, handlers will be required to report fresh shipments
of red types of potatoes directly to the Committee on an existing form
that is being modified for this purpose. This information will allow
the Committee to collect assessments and compile industry statistics.
Therefore, this rule modifies Sec. 946.143 to require that each
person handling red types of potatoes submit a monthly report to the
Committee. The reporting requirement was originally established in 2010
to facilitate the exemption of russet type potatoes from the handling
regulations. It will be modified to include the collection of
information for red types of potatoes.
Authorization to assess handlers enables the Committee to incur
expenses that are reasonable and necessary to administer the program.
The modified reporting requirement will facilitate the Committee's
ability to continue collecting the funds needed to cover necessary
program costs.
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 as the
domestically produced product. Minimum grade, size, quality, and
maturity requirements for potatoes imported into the United States are
currently in effect under the import
[[Page 8255]]
regulations. The import regulations distinguish between each of the
three major types of potatoes handled domestically; (1) red-skinned,
round type potatoes, (2) all other round type potatoes, and (3) long
type potatoes.
Section 980.1(a)(2)(i) of the vegetable import regulations
specifies that, during each month of the marketing year, imports of
red-skinned, round type potatoes are in most direct competition with
potatoes of the same type produced in the area covered by the order.
Further, Sec. 980.1(b)(1) provides that, through the entire year, the
grade, size, quality, and maturity requirements of the order applicable
to potatoes of the red-skinned, round type shall be the respective
grade, size, quality, and maturity requirements for all imported red-
skinned, round type potatoes. As such, the exemption from minimum
grade, size, quality, and maturity requirements for domestic potatoes
covered by the order also exempts red-skinned, round type potato
varieties that are imported into the U.S. from grade, size, quality,
and maturity requirements.
Prior to this action, red-skinned, round type potatoes imported
into the U.S. must be U.S. No. 2 or better grade and meet a minimum
diameter of 1\7/8\ inches. In addition, red-skinned, round type
potatoes may be \3/4\ inch minimum diameter, if such imported potatoes
otherwise met the requirements of the U.S. No. 1 grade. Lastly,
imported red-skinned, round type potatoes could not be more than
``moderately skinned'' as defined by the U.S. Standards for Grades of
Potatoes.
As a result of the exemption of red types of potatoes from the
order's handling regulations, and pursuant to the Act, this rule also
modifies Sec. 980.1(b)(1) to exempt imported red-skinned, round types
of potatoes from the import regulations. However, this rule does not
restrict importers from having their potatoes inspected or from meeting
minimum grade, size, quality, or maturity requirements on a voluntary
basis.
Initial 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 initial regulatory flexibility
analysis.
The purpose of the RFA is to fit regulatory actions to the scale of
businesses 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.
There are 43 handlers of Washington potatoes subject to regulation
under the order and approximately 267 producers in the regulated
production area. Small agricultural service firms are defined by the
Small Business Administration 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. (13 CFR 121.201)
For the 2011-2012 marketing year, the Committee reports that
11,018,670 hundredweight of Washington potatoes were shipped into the
fresh market. Based on average f.o.b. prices estimated by the USDA's
Economic Research Service and Committee data on individual handler
shipments, the Committee estimates that 42, or approximately 98 percent
of the handlers, had annual receipts of less than $7,000,000.
In addition, based on information provided by the National
Agricultural Statistics Service, the average producer price for
Washington potatoes for 2011-2012 was $7.90 per hundredweight. Taking
the 2011-2012 shipments of fresh potatoes in the marketing order area
(11,018,670 hundredweight), multiplying it by the average producer
price for Washington potatoes, $7.90, and then dividing it by the
number of Washington potato producers (267) equates to an average gross
annual revenue per producer of approximately $326,021. In view of the
foregoing, the majority of Washington potato handlers and producers may
be classified as small entities.
Information from the Foreign Agricultural Service, USDA, indicates
that the dollar value of imported fresh potatoes averaged $128.962
million from 2008 to 2012, ranging from a low of approximately $106.502
million in 2012 to a high of approximately $155.358 million in 2008.
Taking the average dollar value of imported fresh potatoes, $128.962
million, and dividing it by the number of potato importers, 571,
results in average annual receipts per importer of approximately
$226,000. Since this below the SBA definition of small business (less
than $7 million in annual sales), most importers may be classified as
small entities.
This rule exempts red types of potatoes from the handling
regulations and modifies the reporting for the remainder of the 2013-
2014 fiscal period and subsequent fiscal periods. The industry believes
that the increased cost of mandatory inspections outweigh the benefits
derived from quality regulation. This change is expected to reduce
overall industry expenses and provide the industry with the opportunity
to explore alternative marketing strategies.
As stated previously, the authority for regulation is provided in
Sec. 946.52 of the order, while authority for reports and records is
provided in Sec. 946.70. In addition, the handling regulations are
specified under Sec. 946.336 of the order's administrative rules and
regulations, and reporting requirements are specified under Sec.
946.143.
The Committee does not anticipate that this rule will negatively
impact small businesses. This rule will exempt red types of potatoes
from minimum quality, maturity, pack, marking, and inspection
requirements for the current fiscal period and subsequent fiscal
periods. Though inspections are not mandatory for such potatoes during
the exemption period, handlers may choose to have their potatoes
inspected. Handlers are thus able to control costs based on the demands
of their customers.
The Committee discussed alternatives to this recommendation,
including making no changes to the regulations. The Committee also
considered different types of inspection programs, exempting all types
of potatoes from handling regulations, and exempting red types from
regulation temporarily instead of indefinitely. However, the Committee
believes that the Washington potato industry will benefit more from the
indefinite exemption of red types of potatoes from handling
regulations.
The Committee identified no other alternatives to requiring
handlers to report fresh market shipments of red types of potatoes.
This information is necessary to administer the program, including the
collection of assessments.
In accordance with the Paperwork Reduction Act of 1995, (44 U.S.C.
Chapter 35), the order's information collection requirements have been
previously approved by the Office of Management and Budget (OMB) and
assigned OMB No. 0581-0178, Generic Vegetable and Specialty Crops.
This rule requires the submission of a monthly handler report for
fresh red types of potatoes handled during the exemption period. This
rule modifies the Russet Fresh Potato Report established for russet
type potatoes to include red types of potatoes during the period those
types of potatoes are exempted from regulation. The modified Self-
Reporting Potato Form will provide the Committee with information
necessary to track shipments and collect
[[Page 8256]]
assessments. AMS has submitted the modified form and a Justification of
Change to OMB for approval.
While this rule requires a reporting requirement for red types of
potatoes, their exemption from handling regulations also eliminates the
more frequent reporting requirements imposed under the order's special
purpose shipment exemptions (Sec. 946.336(d) and (e)). Under these
paragraphs, handlers are required to provide detailed reports whenever
they divert regulated potatoes for livestock feed, charity, seed,
prepeeling, processing, grading and storing in specified counties in
Oregon, and experimentation.
Therefore, any additional reporting or recordkeeping requirements
on either small or large handlers of red types of potatoes are expected
to be offset by the elimination of the other reporting requirements
currently in effect. In addition, the exemption from handling
regulations and inspection requirements for red types of potatoes is
expected to reduce industry expenses.
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.
USDA has not identified any relevant Federal rules that duplicate,
overlap or conflict with this rule.
The Committee's meetings were widely publicized throughout the
Washington potato industry and all interested persons were invited to
participate in Committee deliberations. Like all Committee meetings,
the May 9, July 16, and December 10, 2013, meetings were public
meetings. All entities, both large and small, were able to express
views on this issue. Further, interested persons are invited to submit
comments on this interim 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:
www.ams.usda.gov/MarketingOrdersSmallBusinessGuide. Any questions about
the compliance guide should be sent to Jeffrey Smutny at the previously
mentioned address in the FOR FURTHER INFORMATION CONTACT section.
This interim rule invites comments on the exemption from handling
regulations and the modification of the reporting requirements for red
types of potatoes. Any comments received will be considered prior to
finalization of this rule.
After consideration of all relevant material presented, including
the Committee's recommendation, and other information, it is found that
this interim rule, as hereinafter set forth, will tend to effectuate
the declared policy of the Act.
In accordance with section 8e of the Act, the United States Trade
Representative has concurred with the issuance of this interim rule.
Pursuant to 5 U.S.C. 553, it is also found and determined upon good
cause that it is impracticable, unnecessary, and contrary to the public
interest to give preliminary notice prior to putting this rule into
effect and that good cause exists for not postponing the effective date
of this rule until 30 days after publication in the Federal Register
because: (1) Any changes resulting from this rule should be effective
as soon as practicable because the shipping season for Washington red
types of potatoes began in July of 2013; (2) the Committee discussed
and unanimously recommended these changes at public meetings and all
interested parties had an opportunity to provide input; (3) potato
handlers are aware of this action and want to take advantage of
relaxation of the handling regulations as soon as possible; and (4)
this rule provides a 60-day comment period, and any comments received
will be considered prior to finalization of this rule.
List of Subjects
7 CFR Part 946
Marketing agreements, Potatoes, Reporting and recordkeeping
requirements.
7 CFR Part 980
Food grades and standards, Imports, Marketing agreements, Onions,
Potatoes, Tomatoes.
For the reasons set forth in the preamble, 7 CFR parts 946 and 980
are amended as follows:
0
1. The authority citation for 7 CFR parts 946 and 980 continues to read
as follows:
Authority: 7 U.S.C. 601-674.
PART 946--IRISH POTATOES GROWN IN WASHINGTON
0
2. Section 946.143 is revised to read as follows:
Sec. 946.143 Assessment reports.
During the period that russet, red, yellow fleshed, and white types
of potatoes are exempt from handling requirements under Sec. 946.336,
each person handling russet, red, yellow fleshed, and white types of
potatoes shall submit a monthly report to the Committee by the 10th day
of the month following the month such potatoes are handled. Each
assessment report shall contain the following information:
(a) The name and address of the handler;
(b) The date and quantity of russet, red, yellow fleshed, and white
types of potatoes handled;
(c) The assessment payment due; and
(d) Other information as may be requested by the Committee.
0
3. The introductory text of Sec. 946.336 is revised to read as
follows:
Sec. 946.336 Handling regulation.
No person shall handle any lot of potatoes unless such potatoes
meet the requirements of paragraphs (a), (b), (c), and (g) of this
section or unless such potatoes are handled in accordance with
paragraphs (d) and (e), or (f) of this section, except that shipments
of the blue or purple flesh varieties of potatoes shall be exempt from
both this handling regulation and the assessment requirements specified
in Sec. 946.41: Provided, That russet type potatoes shall be exempt
from the requirements of paragraphs (a), (b), (c), (e), and (g) of this
section: Provided further, That, from October 24, 2013, through June
30, 2014, yellow fleshed and white types of potatoes shall be exempt
from the requirements of paragraphs (a), (b), (c), (e), and (g) of this
section: Provided further, That, effective February 15, 2014, red types
of potatoes shall be exempt from the requirements of paragraphs (a),
(b), (c), (e), and (g) of this section.
* * * * *
PART 980--VEGETABLES; IMPORT REGULATIONS
0
4. In Sec. 980.1, paragraph (b) is revised to read as follows:
Sec. 980.1 Import regulations; Irish potatoes.
* * * * *
(b) Grade, size, quality, and maturity requirements. On and after
the effective date hereof importation of Irish potatoes, except
certified seed potatoes and red skinned, round types of potatoes, shall
be prohibited unless they comply with the following requirements.
(1) Through the entire year, the grade, size, quality, and maturity
requirements of Area II, Colorado (San Luis Valley) covered by
Marketing Order No. 948, as amended (part 948 of this chapter),
applicable to potatoes of the round type, other than red-skinned
varieties, shall
[[Page 8257]]
be the respective grade, size, quality, and maturity requirements for
imports of all other round type potatoes.
(2) Through the entire year the grade, size, quality, and maturity
requirements of Marketing Order 945, as amended (part 945 of this
chapter) applicable to potatoes of all long types shall be the
respective grade, size, quality, and maturity requirements for imported
potatoes of all long types.
(3) The grade, size, quality, and maturity requirements as provided
for in this paragraph shall apply to imports of similar types of
potatoes, unless otherwise ordered, on and after the effective date of
the applicable domestic regulation or amendment thereto, as provided in
this paragraph or 3 days following publication of such regulation or
amendment in the Federal Register, whichever is later.
* * * * *
Dated: February 6, 2014.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2014-03043 Filed 2-11-14; 8:45 am]
BILLING CODE 3410-02-P