[Federal Register Volume 79, Number 88 (Wednesday, May 7, 2014)]
[Rules and Regulations]
[Pages 26109-26111]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-10369]



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Rules and Regulations
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Federal Register / Vol. 79, No. 88 / Wednesday, May 7, 2014 / Rules 
and Regulations

[[Page 26109]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 946

[Doc. No. AMS-FV-14-0026; FV14-946-1 IR]


Irish Potatoes Grown in Washington; Modification of the Handling 
Regulations for Yellow Fleshed and White Types of Potatoes

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim rule.

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SUMMARY: This rule extends the temporary exemption of yellow fleshed 
and white skin (white types) potatoes from minimum quality, maturity, 
pack, marking, and inspection requirements under the Washington potato 
marketing order through the 2014-2015 and subsequent fiscal periods. 
Without this action, the temporary exemption currently in effect would 
end on June 30, 2014. 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 is expected 
to reduce overall industry expenses and increase net returns to 
producers and handlers while continuing to give the industry the 
opportunity to explore alternative marketing strategies.

DATES: Effective July 1, 2014; comments received by July 7, 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: Teresa.Hutchinson@ams.usda.gov or GaryD.Olson@ams.usda.gov.
    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: Jeffrey.Smutny@ams.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.''
    The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Orders 12866, 13563, and 13175.
    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 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 
entry of the ruling.
    This rule extends the temporary exemption of yellow fleshed and 
white types of potatoes from the order's handling regulations through 
the 2014-2015 and subsequent fiscal periods. Without this action, the 
temporary exemption currently in effect would end on June 30, 2014. 
This rule allows the Washington potato industry to continue to market 
yellow fleshed and white types of potatoes without regard to the 
minimum quality, maturity, pack, marking, and inspection requirements 
prescribed under the order.
    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, or 
maturity requirements. They can also stipulate the size, capacity, 
weight, dimensions, pack, marking, or labeling of containers used in 
the handling of such potatoes. The handling regulations may be 
modified, suspended, or terminated upon the recommendation of the 
Committee and the approval of the Secretary. When handling regulations 
are in effect, regulated potatoes must be inspected and certified by 
the Federal-State Inspection Service (FSIS).
    The above-described authorities are found in Sec. Sec.  946.51, 
946.52, and 946.60 of the order. Supporting rules and regulations for 
these authorities are found in Sec.  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 may be modified, 
suspended, or terminated 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

[[Page 26110]]

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.
    The Committee met on July 16, 2013, and unanimously recommended 
exempting yellow fleshed and white types of potatoes from the handling 
regulations through June 30, 2014. This recommendation was implemented 
by USDA in an interim rule published in the Federal Register on October 
23, 2013 [78 FR 62967], and finalized on May 2, 2014 [79 FR 24997].
    During the temporary exemption, yellow fleshed and white types of 
potatoes were able to be handled without regard for the order's 
handling and inspection requirements. The Committee initiated this 
action to evaluate the potential cost savings, and the corresponding 
impact on the market, that might result from such an exemption.
    Since October 24, 2013, initiation of the exemption period, 
handlers have called upon FSIS only intermittently to inspect and 
certify yellow fleshed and white types of potatoes prior to shipment in 
order to meet their customers' needs or market requirements. With full-
time inspection no longer mandatory, handlers were able to coordinate 
the timing and utilization of inspection services to meet the needs of 
their individual operations, resulting in reduced costs. No negative 
market impacts were experienced as a result of the temporary exemption 
of yellow fleshed and white types of potatoes from the handling 
regulations. Handlers have continued to meet their customers' 
specifications, either with voluntary inspection or no inspection, 
during the temporary exemption. Therefore, the Committee believes that 
the temporary exemption of yellow fleshed and white types of potatoes 
has reduced industry costs without negatively impacting the market.
    At its December 10, 2013, meeting, the Committee unanimously 
recommended indefinitely extending the temporary exemption for yellow 
fleshed and white types of potatoes from the handling regulations past 
the previously established end date of June 30, 2014. Therefore, this 
rule modifies Sec.  946.336 to exempt yellow fleshed and white types of 
potatoes from handling regulations through the 2014-2015 and subsequent 
fiscal periods.
    As a result of this exemption, yellow fleshed and white types of 
potatoes will not be subject to the minimum grade, size, quality, 
maturity, pack, marking, and inspection requirements of the order for 
the 2014-2015 fiscal period and subsequent fiscal periods. However, 
assessments on all fresh yellow fleshed and white types of potatoes 
handled under the order will remain in effect during the exemption 
period. Also during this interval, handlers will continue to be 
required to submit reports of their shipments of fresh yellow fleshed 
and white types of potatoes to the Committee for the purposes of 
collecting assessments and compiling industry statistics.
    Although this rule continues to provide handlers of yellow fleshed 
and white types of potatoes the opportunity to decrease their total 
costs by eliminating the expenses associated with mandatory inspection, 
it does not restrict handlers from seeking inspection on a voluntary 
basis. In addition, the Committee will continue to monitor and evaluate 
the effects of the exemption on marketing and producer returns at 
future Committee meetings.

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. The 
average gross annual revenue for the 267 Washington potato producers is 
therefore calculated to be approximately $326,021. In view of the 
foregoing, the majority of Washington potato handlers and producers may 
be classified as small entities.
    This rule extends the temporary exemption of yellow fleshed and 
white types of potatoes from the handling regulations through the 2014-
2015 and subsequent fiscal periods. The industry is concerned that the 
cost of mandatory inspection, which has increased, outweighs the 
benefits of having quality regulations in place. The extension of the 
temporary exemption is expected to further reduce overall industry 
expenses and continue to provide the industry with the opportunity to 
explore alternative marketing strategies.
    The authority for regulation is provided in Sec.  946.52 of the 
order. In addition, the handling regulations are specified under Sec.  
946.336 of the order's administrative rules and regulations.
    The Committee does not anticipate that this rule will negatively 
impact small businesses. This rule will exempt yellow fleshed and white 
types of potatoes from minimum quality, maturity, pack, marking, and 
inspection requirements. Though inspections are not mandatory for such 
potatoes during the exemption period, handlers may voluntarily 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 taking no action and allowing the temporary exemption to 
lapse on June 30, 2014. However, the Committee believes that the 
temporary exemption for yellow fleshed and white types of potatoes has 
been successful, and recommended extending the exemption of yellow 
fleshed and white types of potatoes from the handling regulation 
indefinitely.
    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.
    During the exemption period, handlers will continue to be required 
to report fresh shipments of yellow fleshed

[[Page 26111]]

and white types of potatoes monthly. While this rule requires a 
reporting requirement for shipments of yellow fleshed and white 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 yellow fleshed and white 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 yellow 
fleshed and white 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 December 10, 2013, meeting was a public meeting. 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: http://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 of yellow 
fleshed and white types of potatoes from the handling regulations for 
the 2014-2015 and subsequent fiscal periods. 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.
    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 
July 1, 2014, because the temporary exemption for Washington yellow 
fleshed and white types of potatoes from the handling regulations ends 
on June 30, 2014; (2) the Committee discussed and unanimously 
recommended these changes at a public meeting, and all interested 
parties had an opportunity to provide input; (3) potato handlers are 
aware of this action and want to take advantage of this handling 
regulation relaxation; 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 in 7 CFR Part 946

    Marketing agreements, Potatoes, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 946 is 
amended as follows:

PART 946--IRISH POTATOES GROWN IN WASHINGTON

0
1. The authority citation for 7 CFR part 946 continues to read as 
follows:

    Authority:  7 U.S.C. 601-674.


0
2. 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 yellow fleshed, white, red, and russet 
type potatoes shall be exempt from the requirements of paragraphs (a), 
(b), (c), (e), and (g) of this section.
* * * * *

    Dated: May 1, 2014.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2014-10369 Filed 5-6-14; 8:45 am]
BILLING CODE P