[Federal Register Volume 64, Number 122 (Friday, June 25, 1999)]
[Rules and Regulations]
[Pages 34113-34117]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-16056]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 947

[Docket No. FV99-947-1 IFR]


Irish Potatoes Grown in Modoc and Siskiyou Counties, California, 
and in all Counties in Oregon, Except Malheur County; Temporary 
Suspension of Handling Regulations and Establishment of Reporting 
Requirements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule suspends, for the 1999-2000 season only, the minimum 
grade, size, quality, maturity, pack, inspection, and other related 
requirements currently prescribed under the Oregon-California potato 
marketing order. The marketing order regulates the handling of Irish 
potatoes grown in Modoc and Siskiyou Counties, California, and in all 
Counties in

[[Page 34114]]

Oregon, except Malheur County, and is administered locally by the 
Oregon-California Potato Committee (Committee). During this suspension 
of the handling regulations, reports from handlers will be required to 
obtain information necessary to administer the marketing order. This 
rule is expected to reduce industry expenses.

DATES: Effective July 1, 1999, through June 30, 2000; comments received 
by August 24, 1999 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, Fruit 
and Vegetable Programs, AMS, USDA, Room 2525-S, P.O. Box 96456, 
Washington, DC 20090-6456; Fax: (202) 720-5698; or E-mail: 
[email protected]. 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: Teresa L. Hutchinson, Northwest 
Marketing Field Office, Marketing Order Administration Branch, Fruit 
and Vegetable Programs, AMS, USDA, 1220 SW Third Avenue, Room 369, 
Portland, Oregon 97204-2807; telephone: (503) 326-2724, Fax: (503) 326-
7440 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) 720-5698. 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, P.O. Box 96456, Room 2525-S, 
Washington, DC 20090-6456; telephone (202) 720-2491, Fax: (202) 720-
5698, or E-mail: Jay.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. 114 and Marketing Order No. 947, both as amended (7 CFR 
part 947), regulating the handling of Irish potatoes grown in Modoc and 
Siskiyou Counties in California, and in all counties in Oregon, except 
Malheur County, hereinafter referred to as the ``order.'' The marketing 
agreement and order are 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 (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 date of the entry of the ruling.
    This rule suspends the handling and related regulations currently 
prescribed under the order from July 1, 1999, to June 30, 2000. This 
rule allows the Oregon-California potato industry to market potatoes 
without minimum grade, size, quality, maturity, pack, and inspection 
requirements. These regulations will resume July 1, 2000, for the 2000-
2001 season and future seasons. This rule also establishes handler 
reporting requirements during the same time period. Reporting 
requirements will allow the Committee to obtain information from 
handlers necessary to administer the order.
    Section 947.52 of the order authorizes the issuance of regulations 
for grade, size, quality, maturity, and pack for any variety of 
potatoes grown in the production area during any period. Section 947.51 
authorizes the modification, suspension, or termination of regulations 
issued under Sec. 947.52.
    Section 947.60 provides that whenever potatoes are regulated 
pursuant to Sec. 947.52, such potatoes must be inspected by the 
Federal-State Inspection Service, and certified as meeting the 
applicable requirements of such regulations. The cost of inspection and 
certification is borne by handlers.
    Section 947.80 authorizes the Committee, with the approval of the 
Secretary, to require reports and other information from handlers that 
are necessary for the Committee to perform its duties.
    Minimum grade, size, quality, maturity, and pack requirements for 
potatoes regulated under the order are specified in Sec. 947.340 
Handling Regulation [7 CFR 947.340]. This regulation, with 
modifications and exemptions for different varieties and types of 
shipments, provides that all potatoes grade at least U.S. No. 2; be at 
least 2 inches in diameter or weigh at least 4 ounces; and be not more 
than moderately skinned. Additionally, potatoes packed in cartons must 
be U.S. No. 1 grade or better, with an additional tolerance allowed for 
internal defects, or U.S. No. 2 grade weighing at least 10 ounces. 
Section 947.340 also includes waivers of inspection procedures, 
reporting and safeguard requirements for special purpose shipments, and 
a minimum quantity exemption of 19 hundredweight per day. Related 
provisions appear in the regulations at Sec. 947.130, Special Purpose 
Certificates--application and issuance; Sec. 947.132 Reports; 
Sec. 947.133 Denial and appeals; and Sec. 847.134 Establishment of list 
of manufacturers of potato products.
    The Committee meets prior to and during each season to consider 
recommendations for modification, suspension, or termination of the 
regulatory requirements for Oregon-California potatoes which have been 
issued on a continuing basis. Committee meetings are open to the public 
and interested persons may express their views at these meetings. The 
Department reviews Committee recommendations and information submitted 
by the Committee and other available information, and determines 
whether modification, suspension, or termination of the regulatory 
requirements would tend to effectuate the declared policy of the Act.
    At its February 23, 1999, meeting, the Committee unanimously 
recommended suspending the handling regulations and related sections 
and establishing handler reporting requirements for the 1999-2000 
season. The Committee met again on May 14, 1999, to review the 
recommendation made at the earlier meeting. After extensive discussion, 
the Committee decided not to rescind or modify their earlier 
recommendation to suspend handling regulations and related sections. 
The Committee requested that this rule be effective at

[[Page 34115]]

the beginning of the next fiscal period, July 1, 1999, which is also 
the date shipments of the 1999 Oregon-California potato crop are 
expected to begin.
    The objective of the handling and inspection requirements is to 
ensure that only acceptable quality potatoes enter fresh market 
channels, thereby ensuring consumer satisfaction, increasing sales, and 
improving returns to producers. While the industry continues to believe 
that quality is an important factor in maintaining sales, the Committee 
believes the cost of inspection and certification (mandated when 
minimum requirements are in effect) may exceed the benefits derived.
    Potato prices have been at low levels in recent seasons, and many 
producers have faced difficulty covering their production costs. 
Therefore, the Committee has been discussing the possibility of 
reducing costs through the elimination of mandatory inspection. The 
Committee is concerned, however, that the elimination of current 
requirements could possibly result in lower quality potatoes being 
shipped to fresh markets. Also, there is some concern that the Oregon-
California potato industry could lose sales to other potato producing 
areas that are covered by quality and inspection requirements. For 
these reasons, the Committee recommended that the suspension of the 
requirements be effective for the 1999-2000 season only. This will 
enable the Committee to study the impacts of the suspension and 
consider appropriate actions for ensuing seasons.
    This rule will enable handlers to ship potatoes without regard to 
the minimum grade, size, quality, maturity, pack, and inspection 
requirements for the 1999-2000 season only. This rule will allow 
handlers to decrease costs by eliminating the costs associated with 
inspection. This rule will not restrict handlers from seeking 
inspection on a voluntary basis. The Committee will evaluate the 
effects of removing the minimum requirements on marketing and on 
producer returns at its meeting next spring.
    The suspension action also will result in the elimination of the 
monthly inspection report from the Federal-State Inspection Service 
which the Committee used as a basis for the collection of assessments 
from handlers. This inspection report was compiled by the Federal-State 
Inspection Service from inspection certificates. During the suspension 
of the regulations, reports from handlers will be needed for the 
Committee to obtain information on which to collect assessments. 
Therefore, a new Sec. 947.180 Reports is established which requires 
each handler to submit a monthly assessment report to the Committee 
containing the following information: (a) The date and quantity of 
fresh potatoes sold including identification numbers; (b) the name and 
address of the producers; (c) the assessment payment due; and (d) the 
name and address of the handler. Authorization to assess handlers 
enables the Committee to incur expenses that are reasonable and 
necessary to administer the program. Although adding reporting 
requirements, this rule through the elimination of inspection and 
certification and other related requirements is expected to reduce 
industry expenses.
    Consistent with the suspension of Sec. 947.340, this rule also 
suspends Secs. 947.120, 947.123, 947.130, 947.132, 947.133, and 947.134 
of the rules and regulations in effect under the order. Sections 
947.120 and 947.123 provide authority for hardship exemptions from 
inspection and certification, and establish reporting and recordkeeping 
requirements when such exemptions are in place. Sections 947.130, 
947.132, 947.133, and 947.134 are safeguard and reporting provisions of 
the order that are applicable to special purpose shipments when 
inspection and certification requirements are in place.
    Contained within Sec. 947.340(i) of the current handling 
regulations is a minimum quantity exemption under which a handler may 
ship not more than 19 hundredweight of potatoes on any day without 
regard to the inspection and assessment requirements issued under the 
order. The suspension of the handling regulations removes all 
inspection requirements. To continue the current minimum quantity 
exemption for assessments, a new Sec. 947.125 Minimum quantity 
exemption is established. This section simply continues the current 
minimum quantity exemption under which a handler may ship not more than 
19 hundredweight of potatoes on any day without regard to the 
assessment requirements issued under the order.
    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, AMS has 
prepared this initial 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 30 handlers of Oregon-California potatoes 
who are subject to regulation under the marketing order and 
approximately 450 potato producers 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 
having annual receipts of less than $500,000.
    Currently, about 83 percent of the Oregon-California potato 
handlers ship less that $5,000,000 worth of potatoes and 17 percent 
ship more than $5,000,000 worth on an annual basis. In addition, based 
on acreage, production, and producer prices reported by the National 
Agricultural Statistics Service, and the total number of Oregon-
California potato producers, average annual producer receipts are 
approximately $285,000. In view of the foregoing, it can be concluded 
that the majority of handlers and producers of Oregon-California 
potatoes may be classified as small entities.
    This rule suspends the handling and related regulations and 
establishes reporting requirements from July 1, 1999, through June 30, 
2000. This rule will allow the Oregon-California potato industry to 
market potatoes without minimum grade, size, quality, maturity, pack, 
and inspection requirements. The handling regulations currently 
specified in Sec. 947.340 and in other related sections will resume 
July 1, 2000, for the 2000-2001 season and future seasons. New 
reporting requirements will allow the Committee to obtain information 
from handlers necessary to collect assessments during the period of 
suspension.
    At its February 23, 1999, meeting, the Committee unanimously 
recommended suspending the handling and related regulations and 
establishing reporting requirements for the 1999-2000 season. The 
Committee met again on May 14, 1999, to review the recommendation made 
at the earlier meeting. After extensive discussion, the Committee 
decided not to rescind or modify their earlier recommendation to 
suspend the regulations. The Committee requested that this rule be 
effective at the beginning of the next fiscal period, July 1, 1999, 
which is also the date shipments of the 1999 Oregon-California potato 
crop are expected to begin.
    The objective of the handling requirements is to ensure that only 
acceptable quality potatoes enter fresh market channels, thereby 
ensuring

[[Page 34116]]

consumer satisfaction, increasing sales, and improving returns to 
producers. While the industry continues to believe that quality is an 
important factor in maintaining sales, the Committee believes the cost 
of inspection and certification (mandated when minimum requirements are 
in effect) may exceed the benefits derived.
    Potato prices have been at low levels in recent seasons, and many 
producers have faced difficulty covering their production costs. 
Therefore, the Committee has been discussing the possibility of 
reducing costs through the elimination of mandatory inspection. The 
Committee is concerned, however, that the elimination of current 
requirements could possibly result in lower quality potatoes being 
shipped to fresh markets. Also, there is some concern that the Oregon-
California potato industry could lose sales to other potato producing 
areas that are covered by quality and inspection requirements. For 
these reasons, the Committee recommended that the suspension of the 
requirements be effective for the 1999-2000 season only. This will 
enable the Committee to study the impacts of the suspension and 
consider appropriate actions for ensuing seasons.
    This rule will enable handlers to ship potatoes without regard to 
the minimum grade, size, quality, maturity, pack, inspection, and 
related requirements for the 1999-2000 season only. This rule will 
allow handlers to decrease costs by eliminating the costs associated 
with inspection. This rule will not restrict handlers from seeking 
inspection on a voluntary basis. The Committee will evaluate the 
effects of removing the minimum requirements on marketing and on 
producer returns at its meeting next spring.
    The suspension action also will result in the elimination of the 
monthly inspection report from the Federal-State Inspection Service 
which the Committee used for billing purposes. This inspection report 
was compiled by the Federal-State Inspection Service from inspection 
certificates. During this suspension of the regulations, reports from 
handlers will be necessary for the Committee to obtain information on 
which to collect assessments. This rule establishes a new Sec. 947.180 
Reports which requires each handler to submit a monthly assessment 
report to the Committee containing the following information: (a) The 
date and quantity of fresh potatoes sold including identification 
numbers; (b) the name and address of the producers; (c) the assessment 
payment due; and (d) the name and address of the handler. Authorization 
to assess handlers enables the Committee to incur expenses that are 
reasonable and necessary to administer the program. Although adding 
reporting requirements, this rule through the elimination of inspection 
and certification and other related requirements is expected to reduce 
industry expenses.
    Contained within Sec. 947.340(i) of the current handling 
regulations is a minimum quantity exemption under which a handler may 
ship not more than 19 hundredweight of potatoes on any day without 
regard to the inspection and assessment requirements issued under the 
order. The suspension of the handling regulations removes all 
inspection requirements. To continue the current minimum quantity 
exemption for assessments, a new Sec. 947.125 Minimum quantity 
exemption is established. This section simply continues the current 
minimum quantity exemption under which a handler may ship not more than 
19 hundredweight of potatoes on any day without regard to the 
assessment requirements issued under the order.
    The Committee anticipates that this rule will not negatively impact 
small businesses. This rule will suspend minimum grade, size, quality, 
maturity, pack, and inspection requirements. Further, this rule will 
allow handlers and producers the choice to obtain inspection for 
potatoes, as needed, thereby reducing costs for producers and handlers. 
The total cost of inspection and certification for fresh shipments of 
Oregon-California potatoes during the 1998-99 marketing season is 
estimated at $600,000. This is approximately $20,000 per handler. The 
Committee expects, however, that most handlers will continue to have 
some of their potatoes inspected and certified by the Federal-State 
Inspection Service.
    The Committee investigated the use of other types of inspection 
programs as another option to reduce the cost of inspection, but 
believed they were not viable at this time. With the suspension of 
handling regulations, there are no alternatives to reporting 
requirements to ensure the collection of assessments needed to 
administer the order.
    This rule will require monthly reports from handlers to obtain 
information necessary to collect assessments. Although this rule 
establishes new reporting requirements, the suspension of the handling 
regulations eliminates the more frequent reporting requirements that 
were included under the safeguard provisions of the order.
    Therefore, any additional reporting or recordkeeping requirements 
on either small or large potato handlers are expected to be offset by 
the elimination of reporting requirements currently in effect. In 
addition, the elimination of inspection and certification requirements 
is expected to further reduce industry expenses. Finally, as with all 
Federal marketing order programs, reports and forms are periodically 
reviewed to reduce information requirements and duplication by industry 
and public sectors.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the information collection requirements that are contained 
in this rule have been approved by the Office of Management and Budget 
(OMB) and have been assigned OMB No. 0581-0178. It is estimated that it 
will take a handler 20 minutes to complete a monthly assessment report, 
and that each handler will fill out 12 monthly assessment reports each 
year. This creates an estimated total industry burden of approximately 
120 hours. It is estimated that it currently takes a handler 5 minutes 
to complete a safeguard reporting form. With an estimated 2,000 
safeguard reports completed each year, the estimated decrease in burden 
because of the suspension of safeguard reporting requirements is 
estimated to be 167 hours. Five other miscellaneous forms are also 
being suspended. With an estimated 31 responses each year, the 
estimated decrease in burden because of the suspension of these forms 
is estimated to be 6.5 hours.
    The Department has not identified any relevant Federal rules that 
duplicate, overlap or conflict with this rule. Further, the Committee's 
meetings were widely publicized throughout the Oregon-California potato 
industry and all interested persons were invited to attend the meetings 
and participate in Committee deliberations. Like all Committee 
meetings, the February 23, 1999, and May 14, 1999, meetings were public 
meetings and all entities, both large and small, were able to express 
their views on this issue. The Committee itself is composed of 14 
members, of which 5 are handlers and 9 are producers. Finally, 
interested persons are invited to submit information on the regulatory 
and informational impacts of this action on small businesses.
    After consideration of all relevant material presented, including 
the Committee's recommendation, and other information, it is found that 
(1) The regulations suspended by this action for a specified period no 
longer tend to effectuate the declared policy of the Act and (2) the 
addition of new regulations, as hereinafter set forth, will

[[Page 34117]]

tend to effectuate the declared policy of the Act.
    This rule invites comments on suspension of the handling 
regulations and establishment of reporting requirements under the 
Oregon-California potato marketing order. Any comments received will be 
considered prior to finalization of this 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) This rule suspends the current handling and related 
regulations and establishes reporting requirements for Oregon-
California potatoes for the 1999-2000 marketing year which begins July 
1, 1999; (2) this rule was unanimously recommended by the Committee at 
open public meetings and all interested persons had an opportunity to 
express their views and provide input; (3) Oregon-California potato 
handlers are aware of this rule and need no additional time to comply 
with the relaxed requirements; (4) this rule should be in effect by 
July 1, 1999, the date 1999-2000 season shipments of the Oregon-
California potato crop are expected to begin, and this action should 
apply to the entire season's shipments; and (5) 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 947

    Marketing agreements, Potatoes, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR Part 947 is 
amended as follows:

PART 947--IRISH POTATOES GROWN IN MODOC AND SISKIYOU COUNTIES, 
CALIFORNIA, AND IN ALL COUNTIES IN OREGON, EXCEPT MALHEUR COUNTY

    1. The authority citation for 7 CFR Part 947 continues to read as 
follows:

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

    2. In Part 947, Secs. 947.120, 947.123, 947.130, 947.132, 947.133, 
947.134 and 947.340 are suspended in their entirety effective July 1, 
1999, through June 30, 2000.
    3. In Subpart--Rules and Regulations, under the undesignated center 
heading ``Exemptions'', a new Sec. 947.125 is added, and a new 
undesignated center heading and Sec. 194.180 are added to read as 
follows:


Sec. 947.125  Minimum quantity exemption.

    From July 1, 1999, through June 30, 2000, any person may handle not 
more than 19 hundredweight of potatoes on any day without regard to the 
assessment requirements of Sec. 947.41 of this part. This exemption 
shall not apply to any part of a shipment which exceeds 19 
hundredweight.

Reports


Sec. 947.180  Reports.

    From July 1, 1999, through June 30, 2000, each person handling 
potatoes shall submit a Monthly Assessment Report to the Committee 
containing the following information:
    (a) The date and quantity of fresh potatoes sold including 
identification numbers;
    (b) the name and address of the producers;
    (c) the assessment payment due; and
    (d) the name and address of such handler.

    Dated: June 18, 1999.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 99-16056 Filed 6-24-99; 8:45 am]
BILLING CODE 3410-02-P