[Federal Register Volume 61, Number 247 (Monday, December 23, 1996)]
[Proposed Rules]
[Pages 67499-67501]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-32514]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
 ========================================================================
 

  Federal Register / Vol. 61, No. 247 / Monday, December 23, 1996 / 
Proposed Rules  

[[Page 67499]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 980

[FV96-980-1 PR]


Vegetables; Import Regulations; Removal of Banana and Fingerling 
Types of Potatoes and Exemption of Potatoes for Potato Salad From the 
Potato Import Regulation

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would remove banana/fingerling potatoes 
from the provisions of the potato import regulation (import 
regulation). Such potatoes cannot now be imported because they are too 
small or misshapen to meet the minimum requirements under the import 
regulation. Removing banana/fingerling potatoes from the potato import 
regulation would allow such potatoes, which do not compete with 
potatoes currently regulated under Federal marketing orders, to be 
imported for specialized markets. This proposed rule also would 
reclassify potatoes used to make fresh potato salad as potatoes for 
processing. Such potatoes would then be exempt from the grade, size, 
quality, and maturity requirements of the potato import regulation.

DATES: Comments must be received by January 22, 1997.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. Comments must be sent in triplicate to 
the Docket Clerk, Fruit and Vegetable Division, AMS, USDA, room 2525-S, 
P.O. Box 96456, Washington, DC 20090-6456; Fax number (202) 720-5698. 
All comments should reference the docket 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.

FOR FURTHER INFORMATION CONTACT: Robert F. Matthews, Marketing 
Specialist, Marketing Order Administration Branch, F&V, AMS, USDA, room 
2525-S, P.O. Box 96456, Washington, DC 20090-6456; Telephone: (202) 
690-0464; Fax number: (202) 720-5698. Small businesses may request 
information on compliance with this proposed regulation by contacting: 
Jay Guerber, Marketing Order Administration Branch, Fruit and Vegetable 
Division, AMS, USDA, P.O. Box 96456, room 2525-S, Washington, DC 20090-
6456; Telephone: (202) 720-2491; Fax number: (202) 720-5698.

SUPPLEMENTARY INFORMATION: This proposal to change the potato import 
regulation (7 CFR 980.1; 61 FR 13051, March 26, 1996) is issued under 
section 8e of 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 (Department) is issuing this rule in 
conformance with Executive Order 12866.
    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This proposed rule is not intended to have 
retroactive effect. This proposed rule would not preempt any State or 
local laws, regulations, or policies, unless they present an 
irreconcilable conflict with this rule. There are no administrative 
procedures which must be exhausted prior to any judicial challenge to 
the provisions of this proposed rule.
    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.
    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. There are approximately 
62 importers of potatoes who would be affected by this proposal. Small 
agricultural service firms, which include potato importers, have been 
defined by the Small Business Administration (13 CFR 121.601) as those 
having annual receipts of less than $5,000,000. The majority of potato 
importers may be classified as small entities.
    Import regulations issued under the Act are based on regulations 
established under Federal marketing orders which regulate the handling 
of domestically produced products. Thus, this proposed rule should 
impact on both small and large business entities in a manner comparable 
to rules issued under marketing orders.
    This rule proposes to remove banana/fingerling types of potatoes 
from the minimum grade, size, quality, and maturity provisions of the 
potato import regulation. These potatoes cannot now be imported because 
they cannot meet the minimum size or shape requirements under the 
import regulation. Removing banana/fingerling potatoes from the minimum 
requirements of the import regulation would allow such potatoes, which 
do not compete with potatoes currently regulated under Federal 
marketing orders, to be imported for specialized markets. Most 
importers of these potatoes are small business entities that would 
benefit from being able to import and sell such potatoes.
    Reclassifying potatoes imported for use in the preparation of fresh 
potato salad as potatoes for processing will benefit importers, both 
large and small. The importers of such potatoes will be subject only to 
a form filing requirement necessary for the Department to determine 
that the potatoes are used for their intended purpose. The form filing 
requirement is specified in Sec. 980.501 (OMB No. 0581-0167).
    Therefore, the AMS has determined that this proposal would not have 
a significant economic impact on a substantial number of small 
entities.
    Section 8e of the Act provides that whenever certain specified 
commodities, including potatoes, are regulated under a Federal 
marketing order, imports of that commodity into the United States are 
prohibited unless they meet the same or comparable grade, size, 
quality, and maturity requirements. Section 8e also provides that 
whenever two or more marketing orders regulate the same commodity 
produced in different areas of the United States, the Secretary shall 
determine with which area the imported commodity is in most direct 
competition and apply regulations based on that area to the imported 
commodity.

[[Page 67500]]

    The Secretary has determined that imported potatoes are in most 
direct competition with potatoes grown in designated counties in Idaho 
and Oregon, the States of Washington, Colorado, and in designated 
counties in North Carolina and Virginia. Additionally, the Secretary 
has found that the minimum grade, size, quality, and maturity 
requirements for certain types of potatoes imported during specified 
periods should be the same as those established under the various 
marketing orders in effect.
    Marketing Order No. 945 (7 CFR part 945) regulates the handling of 
potatoes grown in designated counties of Idaho and Eastern Oregon; all 
long types of potatoes imported into the U.S. must meet the minimum 
grade, size, quality, and maturity requirements established under this 
marketing order all year. Marketing Order No. 946 (7 CFR part 946) 
regulates the handling of potatoes grown in the State of Washington; 
imported round red potatoes must meet the requirements established 
under this order during the July through September period each year. 
Marketing Order No. 948 (7 CFR part 948) regulates the handling of 
potatoes grown in Colorado; imported round red potatoes must meet the 
requirements established under this order during the October through 
the following June period each season, and imported round white 
potatoes during the August through the following June 4 period each 
season. Marketing Order No. 953 (7 CFR part 953) regulates the handling 
of potatoes grown in designated counties in Virginia and North 
Carolina; imported round white potatoes must meet the requirements 
established under this order during the June 5 through July 31 period 
each year.
    The Department has been asked by an importer to remove small white 
and non-white fleshed varieties of potatoes, known to the trade as 
banana or fingerling potatoes, from the requirements of the potato 
import regulation.
    These potatoes are much smaller and different in appearance from 
the round red, round white, or long types of potatoes usually found in 
the marketplace, and are different varieties, not just round or long 
types that have not reached maturity. The Department had considered a 
requirement for maximum size for these potatoes. After examining 
samples of banana/fingerling potatoes provided by the importer and a 
domestic producer, the Department concluded that limiting banana/
fingerling potatoes to a maximum size may not be an appropriate 
criterion. However, such potatoes are frequently misshapen compared to 
potato varieties produced commercially and have a significantly 
different appearance than the usual commercial varieties.
    Recent trends in consumer preferences have resulted in an 
increasing demand for ``banana'' and ``fingerling'' type potatoes. 
These have a ``niche'' market as a ``gourmet'' item, and usually bring 
a much higher price than the potatoes usually found in the marketplace. 
Removing genetically different varieties of potatoes, such as 
``banana'' and ``fingerling'' types, both white and non-white fleshed, 
from the potato import regulation would recognize that these potatoes 
do not compete directly with the major commercial varieties regulated 
under the various marketing orders.
    Compliance procedures for banana/fingerling potatoes would be 
similar to those currently used for the importation of certified seed 
potatoes. Two alternatives to this proposed rule were considered. The 
first would have classified the banana/fingerling potatoes as 
tablestock potatoes, and the second alternative would have required 
importers to submit Exempt Commodity Form FV-6 to the U.S. Customs 
Service and to the Department, and receivers to complete the third part 
of the FV-6 and return it to the Department. Both of these alternatives 
were rejected with the proposed rule considered to be the most 
practicable and least burdensome alternative.
    On March 26, 1996, the Department revised the potato import 
regulation (61 FR 13051; March 26, 1996). Among other things, the final 
rule stated that potatoes offered for importation for use in the 
preparation of fresh potato salad would be considered as a fresh use, 
and, therefore, not be exempt from the grade, size, quality, and 
maturity requirements of the potato import regulation.
    Since publication of that rule, the Department has determined that 
the marketing orders for domestically produced potatoes Nos. 945 
(Idaho-Eastern Oregon), 946 (Washington), 947 (Oregon-Northern 
California), 948 (Colorado), and 953 (Southeastern States), define 
``other processing'' as the preparation of potatoes for market which 
involves the application of heat or cold to such an extent that the 
natural form or stability of the commodity undergoes a substantial 
change. In the preparation of fresh potato salad, the potatoes are 
boiled prior to being mixed with the other ingredients. Therefore, 
potatoes shipped under these orders for processing into fresh potato 
salad are exempt from minimum grade, size, quality, and maturity 
requirements established under the orders. Potatoes imported for that 
use also should be exempt from the grade, size, quality, and maturity 
requirements of the potato import regulation. Appropriate changes are 
proposed to exempt such potatoes from all such requirements. Importers 
of such potatoes would be subject to FV-6 form filing requirements to 
assure that any potatoes imported for use in the preparation of fresh 
potato salad were properly used. The form filing requirements are 
specified in section 980.501.
    A minor editorial change is proposed to be made to recognize that 
the U.S. Bureau of Customs is now called the U.S. Customs Service.
    In accordance with section 8e of the Act, the U.S. Trade 
Representative has concurred with the issuance of this proposed rule.
    A 30-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 980

    Food grades and standards, Imports, Marketing agreements, Onions, 
Potatoes, Tomatoes.

    For the reasons set forth in the preamble, 7 CFR part 980 is 
proposed to be amended as follows:

PART 980--VEGETABLES; IMPORT REGULATIONS

    1. The authority citation for 7 CFR part 980 continues to read as 
follows:

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

    2. In Sec. 980.1, paragraph (b) introductory text is revised and 
paragraphs (h)(1) and (h)(2) are redesignated as paragraphs (i) and (j) 
and revised, to read as follows:


Sec. 980.1  Import regulations; Irish potatoes.

* * * * *
    (b) Grade, size, quality, and maturity requirements. The 
importation of Irish potatoes, except banana/fingerling potatoes and 
certified seed potatoes, shall be prohibited unless they comply with 
the following requirements.
* * * * *
    (i) Definitions. (1) For the purpose of this part, potatoes meeting 
the requirements of Canada No. 1 grade and Canada No. 2 grade shall be 
deemed to comply with the requirements of the U.S. No. 1 grade and U.S. 
No. 2 grade, respectively, and the tolerances for size as set forth in 
the U.S. Standards for Potatoes (Secs. 51.1540 to 51.1566, inclusive of 
this title) may be used.
    (2) Importation means release from custody of the U.S. Customs 
Service.

[[Page 67501]]

    (3) Banana/fingerling potatoes means various varieties of potatoes 
which, when mature, have a significantly different shape from normal 
commercial varieties of potatoes to the extent that they may be 
seriously misshapen as set forth in the U.S.Standards for Grades of 
Potatoes, Secs. 51.1540 through 51.1566.
    (j) Exemptions. The grade, size, quality, and maturity requirements 
of this section shall not be applicable to potatoes imported for 
canning, freezing, other processing, livestock feed, charity, or 
relief, but such potatoes shall be subject to the safeguard provisions 
contained in section 980.501. Processing includes canning, freezing, 
dehydration, chips, shoestrings, starch, cooking the potatoes for use 
in fresh potato salad, and flour. Processing does not include potatoes 
that are only peeled, or cooled, sliced, diced, or treated to prevent 
oxidation.

    Dated: December 17, 1996.
Robert C. Keeney,
Director, Fruit and Vegetable Division.
[FR Doc. 96-32514 Filed 12-20-96; 8:45 am]
BILLING CODE 3410-02-P