[Federal Register Volume 63, Number 170 (Wednesday, September 2, 1998)]
[Rules and Regulations]
[Pages 46635-46637]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-23516]


-----------------------------------------------------------------------

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 953

[Docket No. FV98-953-1 FIR]


Irish Potatoes Grown in Southeastern States; Increased Assessment 
Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Department of Agriculture (Department) is adopting, as a 
final rule, without change, the provisions of an interim final rule 
which increased the assessment rate established for the Southeastern 
Potato Committee (Committee) under Marketing Order No. 953 for the 
1998-99 and subsequent fiscal periods from $0.0075 to $0.01 per 
hundredweight of potatoes handled. The Committee is responsible for 
local administration of the marketing order which regulates the 
handling of Irish potatoes grown in two southeastern States (Virginia 
and North Carolina). Authorization to assess potato handlers enables 
the Committee to incur expenses that are reasonable and necessary to 
administer the program. The fiscal period begins June 1 and ends May 
31. The assessment rate will remain in effect indefinitely unless 
modified, suspended, or terminated.

EFFECTIVE DATE: October 2, 1998.

FOR FURTHER INFORMATION CONTACT: Jim Wendland, DC Marketing Field 
Office, Marketing Order Administration Branch, Fruit and Vegetable 
Programs, AMS, USDA, P.O. Box 96456, room 2525-S, Washington, DC 20090-
6456; telephone: 202-720-2491, Fax: 202-205-6632; or George 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 compliance with this regulation 
by contacting Jay Guerber, also at the above address, telephone, and 
Fax.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement No. 104 and Order No. 953, both as amended (7 CFR part 953), 
regulating the handling of Irish potatoes grown in two southeastern 
States (Virginia and North Carolina), 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. Under the marketing order now in effect, Virginia-North 
Carolina potato handlers are subject to assessments. Funds to 
administer the order are derived from such assessments. It is intended 
that the assessment rate as issued herein will be applicable to all 
assessable potatoes beginning June 1, 1998, and continuing until 
amended, suspended, or terminated. 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. Such 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 increase the assessment rate established for 
the Committee for the 1998-99 and subsequent fiscal periods from 
$0.0075 to $0.01 per hundredweight of potatoes handled.
    The Southeastern Potato Marketing Order provides authority for the 
Committee, with the approval of the Department, to formulate an annual 
budget of expenses and collect assessments from handlers to administer 
the program. The members of the Committee are producers and handlers of 
Southeastern potatoes. They are familiar with the Committee's needs and 
with the costs for goods and services in their local area and are thus 
in a position to formulate an appropriate budget and assessment rate. 
The

[[Page 46636]]

assessment rate is formulated and discussed in a public meeting. Thus, 
all directly affected persons have an opportunity to participate and 
provide input.
    For the 1996-97 and subsequent fiscal periods the Committee 
recommended, and the Department approved, an assessment rate of $0.0075 
per hundredweight of potatoes handled that would continue in effect 
from fiscal period to fiscal period unless modified, suspended, or 
terminated by the Secretary upon recommendation and information 
submitted by the Committee or other information available to the 
Secretary.
    The Committee met on April 16, 1998, and unanimously recommended 
1998-99 expenditures of $12,000, the same as last year. The major 
expenditures include $7,700 for the manager's and secretarial salaries 
and $1,000 for travel expenses. These and all other expense items are 
budgeted at last year's amounts.
    Regarding the assessment rate, after considering several options, 
the Committee concluded that the former rate of $0.0075 per 
hundredweight would not be adequate for the 1998-99 fiscal period for 
the following reasons. The Committee's operating reserve was only 
$5,000 and was expected to be quickly exhausted. The reserve was the 
lowest ever for any of the Committee's fiscal periods except one. Also, 
wet fields caused delayed plantings and unfavorable growing conditions, 
resulting in potato plant stands estimated to be 20 percent below 
normal. As a result of this and other factors, the Committee projected 
that during the industry's brief, predominately June and July, shipping 
and assessing period, its total potato volume to be handled would be 
down at least 100,000 hundredweight. Therefore, the Committee 
unanimously recommended an assessment rate of $0.01 per hundredweight, 
$0.0025 higher than the rate formerly in effect.
    The assessment rate recommended by the Committee was based on 
projected fresh market shipments of 1,200,000 hundredweight (cwt) of 
Southeastern potatoes, which should provide $12,000 in assessment 
income. However, recent information indicates that these shipments will 
only be approximately 900,000 cwt, providing about $9,000 in 
assessments. But this income, along with funds from the Committee's 
authorized operating reserve, will be adequate to cover budgeted 
expenses. Funds in the reserve at the beginning of the 1997-98 fiscal 
period were estimated at only $5,000. Funds in the reserve are now 
expected to be about $2,000, well within the maximum permitted by the 
order of approximately one fiscal period's expenses (Sec. 953.35).
    The assessment rate will continue in effect indefinitely unless 
modified, suspended, or terminated by the Secretary upon recommendation 
and information submitted by the Committee or other available 
information.
    Although this assessment rate is effective for an indefinite 
period, the Committee will continue to meet prior to or during each 
fiscal period to recommend a budget of expenses and consider 
recommendations for modification of the assessment rate. The dates and 
times of Committee meetings are available from the Committee or the 
Department. Committee meetings are open to the public and interested 
persons may express their views at these meetings. The Department will 
evaluate Committee recommendations and other available information to 
determine whether modification of the assessment rate is needed. 
Further rulemaking will be undertaken as necessary. The Committee's 
1998-99 budget and those for subsequent fiscal periods will be reviewed 
and, as appropriate, approved by the Department.
    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Agricultural Marketing Service (AMS) has considered the 
economic impact of this rule on small entities. Accordingly, 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 or 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 85 producers of Southeastern potatoes in 
the production area and approximately 40 handlers subject to regulation 
under the marketing order. Small agricultural producers have been 
defined by the Small Business Administration (13 CFR 121.601) as those 
having annual receipts of less than $500,000, and small agricultural 
service firms are defined as those whose annual receipts are less than 
$5,000,000. The majority of Southeastern potato producers and handlers 
may be classified as small entities.
    This rule continues to increase the assessment rate established for 
the Southeastern Potato Committee and collected from handlers for the 
1998-99 and subsequent fiscal periods from $0.0075 per hundredweight to 
$0.01 per hundredweight of potatoes handled. Both the $0.01 assessment 
rate and the 1998-89 budget of $12,000 were unanimously recommended by 
the Committee at its April 16, 1998, meeting. The assessment rate 
continued in effect by this action is $0.0025 higher than the 1997-98 
rate. The Committee recommended an increased assessment rate to help 
offset the smaller projected crop of assessable Southeastern potatoes 
in 1998. Recent information indicates these shipments will only be 
approximately 900,000 hundredweight (cwt), about 400,000 cwt less than 
the 1997 crop, to provide about $9,000 in assessments. But this income, 
along with funds from the Committee's authorized operating reserve, 
will be adequate to meet the 1998-99 fiscal period's budgeted expenses. 
Funds in the reserve at the beginning of the 1997-98 fiscal period were 
approximately $5,000. Funds in the reserve are now expected to be only 
about $2,000, well within the maximum permitted by the order of 
approximately one fiscal period's expenses (Sec. 953.35). The Committee 
discussed leaving the assessment at the previous $0.0075 rate but 
determined that the significantly smaller crop would not generate 
enough income to meet budgeted expenses without exhausting the $5,000 
operating reserve, and this was not acceptable.
    The major expenditures recommended by the Committee for the 1998-99 
fiscal period include $7,700 for the manager's and secretarial salaries 
and $1,000 for travel expenses. These and all other expense items are 
budgeted at last year's amounts.
    A review of historical information and recent preliminary 
information indicate that the grower price for the 1998-99 Southeastern 
potato crop could average approximately $7.00 to $8.00 per 
hundredweight. With fresh market shipments in 1998 of approximately 
900,000 hundredweight, the estimated assessment revenue for the 1998-99 
fiscal period ($9,000) as a percentage of the projected fresh market 
crop value ($7,200,000) could be 0.005 percent.
    While assessments impose some additional costs on handlers, the 
costs are minimal and uniform on all handlers. Some of the additional 
costs may be passed on to producers. However, these costs will be 
offset by the benefits derived by the operation of the order. In 
addition, the Committee's meeting was widely publicized throughout the 
Southeastern potato industry and all interested persons were invited to 
attend the meeting and

[[Page 46637]]

participate in Committee deliberations on all issues. Like all 
Committee meetings, the April 16, 1998, meeting was a public meeting 
and all entities, both large and small, were able to express views on 
this issue.
    This action imposes no additional reporting or recordkeeping 
requirements on either small or large Southeastern potato handlers. 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.
    The Department has not identified any relevant Federal rules that 
duplicate, overlap, or conflict with this rule.
    An interim final rule concerning this action was published in the 
Federal Register on June 17, 1998, (63 FR 32966). Copies of that rule 
were also mailed or sent via facsimile to all Southeastern potato 
handlers. Finally, the interim final rule was made available through 
the Internet by the Office of the Federal Register. A 30-day comment 
period was provided for interested persons to respond to the interim 
final rule. The comment period ended on July 17, 1998, and no comments 
were received.
    After consideration of all relevant material presented, including 
the information and recommendation submitted by the Committee and other 
available information, it is hereby found that this rule, as 
hereinafter set forth, will tend to effectuate the declared policy of 
the Act.

List of Subjects in 7 CFR Part 953

    Marketing agreements, Potatoes, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 953 is 
amended as follows:

PART 953--IRISH POTATOES GROWN IN SOUTHEASTERN STATES

    Accordingly, the interim final rule amending 7 CFR part 953 which 
was published at 63 FR 32966 on June 17, 1998, is adopted as a final 
rule without change.

    Dated: August 26, 1998.
Robert C. Keeney,
Deputy Administrator, Fruit & Vegetable Programs.
[FR Doc. 98-23516 Filed 9-1-98; 8:45 am]
BILLING CODE 3410-02-P