[Federal Register Volume 63, Number 232 (Thursday, December 3, 1998)]
[Rules and Regulations]
[Pages 66718-66720]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-32209]
[[Page 66718]]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 948
[Docket No. FV98-948-2 FIR]
Irish Potatoes Grown in Colorado; Exemption From Area No. 2
Handling Regulation for Potatoes Shipped for Experimentation and the
Manufacture or Conversion Into Specified Products
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: The Department of Agriculture (Department) is adopting, as a
final rule, without change, the provisions of an interim final rule
which exempts shipments of potatoes handled for experimentation and the
manufacture or conversion into specified products from the grade, size,
maturity, and inspection requirements prescribed under the handling
regulations of the Colorado Potato Marketing Order for Area No. 2 (San
Luis Valley). This rule was unanimously recommended by the Colorado
Potato Administrative Committee for Area No. 2 (Committee), the agency
responsible for local administration of the marketing order. This rule
continues in effect exemptions designed to expand markets for potatoes
and to increase fresh utilization. These changes are expected to
improve the marketing of Colorado potatoes and increase returns to
producers.
EFFECTIVE DATE: January 4, 1999.
FOR FURTHER INFORMATION CONTACT: Dennis L. West, Northwest Marketing
Field Office, Marketing Order Administration Branch, Fruit and
Vegetable Programs, AMS, USDA, 1220 SW Third Avenue, room 369,
Portland, Oregon 97204; telephone: (503) 326-2724, Fax: (503) 326-7440;
or George J. Kelhart, Technical Advisor, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, Room 2525-S, P.O. Box
96456, Washington, DC 20090-6456; telephone: (202) 720-2491, Fax: (202)
205-6632. Small businesses may request information on complying with
this regulation, or obtain a guide on complying with fruit, vegetable,
and specialty crop marketing agreements and orders by contacting Jay
Guerber, Marketing Order Administration Branch, Fruit and Vegetable
Programs, AMS, USDA, room 2525-S, P.O. Box 96456, Washington, DC 20090-
6456; telephone: (202) 720-2491, Fax: (202) 205-6632, or E-mail:
Jay__N__G[email protected]. You may view the marketing agreement and
order small business compliance guide at the following web site: http:/
/www.ams.usda.gov/fv/moab.html.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing
Agreement No. 97 and Marketing Order No. 948 (7 CFR part 948), both as
amended, regulating the handling of Irish potatoes grown in Colorado,
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 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 the Secretary 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 the Secretary 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 the Secretary's
ruling on the petition, provided an action is filed not later than 20
days after the date of the entry of the ruling.
This rule continues to exempt shipments of potatoes handled for the
purposes of experimentation and the manufacture or conversion into
specified products from the grade, size, maturity, and inspection
requirements prescribed under the order's handling regulations for Area
No. 2 (San Luis Valley).
Section 948.22 authorizes the issuance of regulations for grade,
size, quality, maturity, and pack for any variety or varieties of
potatoes grown in different portions of the production area during any
period. Section 948.23 authorizes the issuance of regulations that
modify, suspend, or terminate requirements issued under Sec. 948.22 or
to facilitate the handling of potatoes for special purposes. Section
948.24 requires adequate safeguards to be prescribed to ensure that
potatoes handled pursuant to Sec. 948.23 enter authorized trade
channels. Safeguard procedures for special purpose shipments are
specified in Secs. 948.120 through 948.125.
At its meeting on June 18, 1998, the Committee unanimously
recommended that handlers of potatoes shipped for experimentation and
for the manufacture or conversion into specified products be exempted
from the grade, size, maturity, and inspection requirements prescribed
under the order's handling regulations for Area No. 2 in Sec. 948.386.
The Committee recommended that experimentation and manufacture or
conversion into specified products be added under Sec. 948.386(d)(2) as
special purpose shipments.
As required for all special purpose shipments, handlers desiring to
handle potatoes for such purposes would apply for and obtain
Certificates of Privilege and furnish the Committee such information as
the Committee may require to track such shipments and to verify proper
disposition.
Several producers and handlers within the production area are
attempting to develop new fresh uses for potatoes using experimental
varieties and packs. The Committee also anticipates that some handlers
may want to ship experimental varieties, or traditional varieties, for
use in the manufacture or conversion into special products, or perform
the manufacture or conversion themselves prior to shipment. Handlers
are, for example, attempting to develop new special products such as
fresh cut potatoes shipped in vacuum sealed bags. The Committee
strongly encourages innovation that could result in the development of
new varieties, markets, or opportunities for fresh potatoes that would
be good for the Colorado potato industry. Some of the new varieties
have irregular shapes or are small in size, and that prevents them from
being shipped except under the minimum quantity exemption of 1,000
pounds specified in paragraph (f) of Sec. 948.386. This has prevented
handlers from shipping larger quantities. Handlers have also expressed
a desire to experiment with the shipment of potatoes of different
varieties in the same container. This is not currently possible because
the potatoes do not meet the minimum grade requirement that a
particular lot of potatoes have ``similar'' varietal characteristics.
For the purpose of this action, the term ``manufacture or
conversion into specified products'' means the
[[Page 66719]]
preparation of potatoes for market into products by peeling, slicing,
dicing, applying material to prevent oxidation, or other means approved
by the Committee, but not including other processing. Formerly,
potatoes for manufacture or conversion into products had to be
inspected and certified as meeting specified quality requirements prior
to preparation for market. This action continues to exempt shipments
handled for experimentation or the manufacture or conversion into
products from these requirements, thus, relieving handlers of this
regulatory burden.
These changes to the Area No. 2 handling regulation are expected to
encourage new product development and could lead to market expansion
which would benefit producers, handlers, buyers, and consumers of
Colorado potatoes.
The special purpose shipments authorized by this action are fresh
use markets so it is appropriate that the handlers taking advantage of
the exemptions be assessed to defray the costs the Committee incurs in
administering the program, tracking such shipments, in determining
whether applicable requirements have been met, and in determining
whether the potatoes ended up in the proper trade channel. This rule is
designed to expand markets for potatoes and to increase fresh
utilization. These changes are expected to improve the marketing of
Colorado potatoes and increase returns to producers.
Pursuant to 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, the 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 of disproportionately burdened. Marketing orders issued
pursuant to the Act, and the rules issued thereunder, are unique in
that they are brought about through group action of essentially small
entities acting on their own behalf. Thus, both statutes have small
entity orientation and compatibility.
There are approximately 100 handlers of Colorado Area No. 2
potatoes who are subject to regulation under the marketing order and
approximately 285 producers of Colorado potatoes in the regulated area.
Small agricultural service firms have been defined by the Small
Business Administration (13 CFR 121.601) as those having annual
receipts of less than $5,000,000, and small agricultural producers are
defined as those whose annual receipts are less than $500,000. The
majority of potato producers and handlers regulated under the marketing
agreement and order may be classified as small entities.
This rule continues to exempt shipments of potatoes handled for
experimentation and the manufacture or conversion into specified
products from the grade, size, maturity, and inspection requirements
that are prescribed under the order's handling regulations for Area No.
2 in Sec. 948.386.
At its meeting on June 18, 1998, the Committee unanimously
recommended that potatoes shipped for the purposes of experimentation
and for the manufacture or conversion into specified products be
considered special purpose shipments and be exempt from the grade,
size, maturity, and inspection requirements prescribed in Sec. 948.386.
The Committee recommended that experimentation and manufacture or
conversion into specified products be added under Sec. 948.386(d)(2) as
special purpose shipments. As is required for all special purpose
shipments, handlers desiring to handle potatoes for such purposes would
apply for and obtain Certificates of Privilege and furnish the
Committee such information as the Committee may require to track such
shipments, determine whether applicable requirements have been met, and
whether proper disposition has occurred.
Several producers and handlers within the production area are
attempting to develop new fresh uses for potatoes using experimental
varieties and packs. The Committee also anticipates that some handlers
may want to ship experimental varieties, or traditional varieties, for
use in the manufacture or conversion into special products, or perform
the manufacture or conversion themselves prior to shipment. Handlers
are, for example, attempting to develop new special products such as
fresh cut potatoes shipped in vacuum sealed bags. The Committee
strongly encourages innovation that could result in the development of
new varieties, markets, or opportunities for fresh potatoes that would
be good for the Colorado potato industry. Some of the new varieties
have characteristics, such as small size or misshape, that prevent them
from being shipped fresh except under the minimum quantity exemption of
1,000 pounds in paragraph (f) of Sec. 948.386. This has placed a burden
on handlers desiring to ship larger quantities of such potatoes.
Handlers have also expressed a desire to experiment with the shipment
of potatoes of different varieties in the same container. This is not
currently possible because the potatoes do not meet the minimum grade
requirement that a particular lot of potatoes have ``similar'' varietal
characteristics.
For purpose of this action, the term ``manufacture or conversion
into specified products'' means the preparation of potatoes for market
into products by peeling, slicing, dicing, applying material to prevent
oxidation, or other means approved by the Committee, but not including
other processing.
These changes to the handling regulation are expected to encourage
new product development and could lead to market expansion which would
benefit producers, handlers, buyers, and consumers of Colorado
potatoes.
The special purpose outlets authorized by this action are fresh use
markets so it is appropriate that handlers taking advantage of the
exemptions be assessed to defray the costs the Committee incurs in
administering the program, tracking such shipments, determining whether
applicable requirements have been met, and whether the potatoes end up
in proper trade channels. Currently, the assessment rate is $0.0015 per
hundredweight of potatoes handled. This rule is designed to expand
markets for potatoes and to increase fresh utilization. The changes are
expected to improve the marketing of Colorado potatoes and increase
returns to producers.
There is no available information detailing how many potatoes this
relaxation will allow to be marketed. However, the Committee expects
the quantities to be small.
No viable alternatives to this action were identified that would
ensure innovations in marketing and product development. Furthermore,
the goals expressed by the committee could not be solved absent this
action.
The Committee estimates that three or four handlers may apply for
and obtain Certificates of Privilege for the handling of potatoes for
experimentation or for the manufacture or conversion into specified
products. It is estimated that the time taken by the handlers who apply
will total less than ten hours and this time is currently approved
under OMB No. O581-0178 by the Office of Management and Budget (OMB) in
accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter
35). To date, three handlers have obtained Certificates of Privilege
for these purposes.
As with all Federal marketing order programs, reports and forms are
[[Page 66720]]
periodically reviewed to reduce information requirements and
duplication by industry and public sectors. In addition, as noted in
the initial regulatory flexibility analysis, the Department 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 Colorado potato industry and all interested persons were invited to
attend the meeting and participate in Committee deliberations. Like all
Committee meetings, the June 18, 1998, meeting was a public meeting and
all entities, both large and small, were able to express their views on
this issue. The Committee itself is composed of 12 members, of which 5
are handlers and 7 are producers, the majority of whom are small
entities.
An interim final rule concerning this action was published in the
Federal Register on August 11, 1998 (63 FR 42686. Copies of the rule
were mailed by the Committee's staff to all Committee members and Area
No. 2 potato handlers. In addition, the rule was made available through
the Internet by the Office of the Federal Register. That rule provided
for a 60-day comment period which ended October 13, 1998. No comments
were received.
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 (63 FR 42686, August 11, 1998) will tend to effectuate
the declared policy of the Act.
List of Subjects in 7 CFR Part 948
Marketing agreements, Potatoes, Reporting and recordkeeping
requirements.
PART 948--IRISH POTATOES GROWN IN COLORADO
Accordingly, the interim final rule amending 7 CFR part 948 which
was published at 63 FR 42686 on August 11, 1998 is adopted as a final
rule without change.
Dated: November 27, 1998
Robert C. Keeney
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-32209 Filed 12-2-98; 8:45 am]
BILLING CODE 3410-02-P