[Federal Register Volume 65, Number 86 (Wednesday, May 3, 2000)]
[Rules and Regulations]
[Pages 25625-25627]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-11089]



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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 945

[Docket No. FV00-945-1 IFR]


Irish Potatoes Grown in Certain Designated Counties in Idaho, and 
Malheur County, Oregon; Modification of Handling Regulations

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This interim final rule would relax pack requirements to allow 
handlers to ship U.S. No. 2 grade potatoes in one-piece 50-pound 
cartons to better meet buyer needs. Currently, only U.S. No. 1 and 
better grade potatoes can be shipped in cartons. The relaxed pack 
requirements will enable handlers to ship a substantial amount of U.S. 
No. 2 grade potatoes in cartons and help maximize producer returns.

DATES: Effective May 4, 2000. Comments must be received by July 3, 
2000.

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: Dennis L. West, Marketing Specialist, 
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 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 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) 
720-5698, or E-mail: [email protected].

SUPPLEMENTARY INFORMATION: This interim final rule is issued under 
Marketing Agreement No. 98 and Marketing Order No. 945, both as amended 
(7 CFR part 945), regulating the handling of Irish potatoes grown in 
certain designated counties in Idaho, and Malheur County, Oregon, 
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 interim final rule has been reviewed under Executive Order 
12988, Civil Justice Reform. This action 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.
    Sections 945.51 and 945.52 of the order provide authority for the 
establishment and modification of regulations applicable to the 
handling of potatoes. Section 945.341 establishes minimum maturity and 
pack requirements for potatoes handled subject to the Idaho-Eastern 
Oregon potato marketing order. Current requirements provide, in part, 
that all potatoes packed in cartons shall be inspected and certified as 
meeting U.S. No. 1 grade or better. All varieties shall meet the 
maturity requirement of slightly skinned (except the Norgold variety 
from August 1-15, and the White Rose and red skinned varieties from 
August 1-December 31 can be moderately skinned). During other periods 
of the year, the White Rose and red skinned varieties are not subject 
to maturity requirements. Size shall be conspicuously marked on all 
cartons (except when used as a master container). The grade 
requirements are based on the U.S. Standards for Grades of Potatoes (7 
CFR 51.1540-51.1566), and the size must be marked consistent with 
Sec. 51.1545 of the standards.
    This rule will relax pack requirements to allow handlers to ship 
U.S. No. 2 grade potatoes in one-piece 50-pound fiberboard cartons of 
natural kraft color provided the carton is permanently and 
conspicuously marked as to grade. This will enable handlers to ship a 
substantial amount of U.S. No. 2 potatoes in cartons, thus meeting 
customer demands and maximizing producer returns.
    The Idaho-Eastern Oregon Potato Committee, the agency responsible 
for local administration of the marketing order, met on January 18, 
2000, and again by telephone on February 3, 2000, and unanimously 
recommended the relaxation of pack requirements to allow handlers to 
ship U.S. No. 2 or better grade potatoes in one-piece 50-pound 
fiberboard cartons of natural kraft color provided the cartons are 
permanently and conspicuously marked as to grade.
    To meet the needs of the food service industry, the Committee 
recommended the relaxation of pack requirements to allow handlers to 
ship U.S. No. 2 grade potatoes in one-piece 50-pound fiberboard cartons 
of natural kraft color that are permanently and conspicuously marked as 
to grade. Currently, potatoes packed in cartons are required to grade 
at least U.S. No. 1. At its meeting on January 18, 2000, the unanimous 
consensus of the Committee was that pack requirements should be 
relaxed. The Committee then conducted a telephone vote on February 3, 
2000, and unanimously passed a motion to relax the pack requirements.
    Customers have been requesting U.S. No. 2 grade potatoes in 50-
pound cartons because of difficulties encountered in handling the 
currently used 50-pound burlap or paper bags. The burlap bags are 
messy, difficult to handle, and do not stack well on pallets. The paper 
bags often tear and are equally difficult to handle or stack. 
Warehouses that use electronic bar codes have reported less 
administration and recordkeeping problems with cartons than bags 
because the codes are more legible on cartons.
    Many customers now purchase potatoes from other areas where U.S. 
No. 2 potatoes are packed in 50-pound cartons. The Committee would like 
to respond to these changing market conditions so that handlers will 
remain

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competitive with the other areas and not lose sales.
    The Committee also recognized the need to distinguish these U.S. 
No. 2 grade potatoes in cartons from the industry's traditional premium 
U.S. No. 1 grade pack in cartons. Without such a distinction, buyers 
might become confused and the U.S. No. 2 grade potatoes in cartons 
might have a price depressing effect on the premium U.S. No. 1 grade 
pack in cartons. The Committee was also concerned that buyers not have 
the opportunity to re-lid cartons with misleading or erroneous 
information on the pack and grade of the potatoes. Therefore the 
Committee included in their recommendation that the fiberboard cartons 
be of one-piece construction, of a natural kraft color, and permanently 
and conspicuously marked to grade.
    Pursuant to the 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 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 63 handlers of Idaho-Eastern Oregon 
potatoes who are subject to regulation under the marketing order and 
about 1,600 potato producers in the regulated area. Small agricultural 
service firms, which include potato handlers, have been defined by the 
Small Business Administration (13 CFR 121.201) 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. A 
majority of these handlers and producers may be classified as small 
entities.
    This rule would relax pack requirements to allow handlers to ship 
U.S. No. 2 grade potatoes in one-piece 50-pound fiberboard cartons of 
natural kraft color provided the cartons are permanently and 
conspicuously marked as to grade. This would enable handlers to ship a 
substantial amount of U.S. No. 2 potatoes in cartons, thus meeting 
customer demands and maximizing producer returns.
    The Idaho-Eastern Oregon Potato Committee, the agency responsible 
for local administration of the marketing order, met on January 18, 
2000, and again by telephone on February 3, 2000, and unanimously 
recommended the relaxation of pack requirements.
    The relaxation of pack requirements to allow handlers to ship U.S. 
No. 2 grade potatoes in one-piece 50-pound fiberboard cartons of 
natural kraft color provided the cartons are permanently and 
conspicuously marked as to grade is expected to allow the industry to 
ship more potatoes. Currently, potatoes packed in cartons are required 
to grade at least U.S. No. 1. At its meeting on January 18, 2000, the 
unanimous consensus of the Committee was that pack requirements should 
be relaxed. The Committee then conducted a telephone vote on February 
3, 2000, and unanimously passed the pack relaxation motion.
    Customers have been requesting U.S. No. 2 grade potatoes in 50-
pound cartons because of difficulties experienced in handling the 
currently used 50-pound burlap or paper bags. The burlap bags are 
messy, difficult to handle, and do not stack well on pallets. The paper 
bags often tear and are equally difficult to handle or stack. 
Warehouses that use electronic bar codes have reported less 
administration and recordkeeping problems with cartons than bags 
because the codes are more legible on cartons.
    Many customers now purchase potatoes from other areas where U.S. 
No. 2 potatoes are packed in 50-pound cartons. The Committee would like 
to respond to these changing market conditions so that handlers will 
remain competitive with other areas and not lose sales.
    The Committee also recognized the need to distinguish the U.S. No. 
2 grade potatoes in cartons from this industry's traditional premium 
U.S. No. 1 grade pack in cartons. Without such a distinction, buyers 
might become confused and the U.S. No. 2 grade potatoes in cartons 
might have a price depressing effect on the premium U.S. No. 1 grade 
pack in cartons. The Committee was also concerned that buyers not have 
the opportunity to re-lid cartons with misleading or erroneous 
information on the pack and grade of the potatoes. Therefore, the 
Committee included in its recommendation that the fiberboard cartons be 
of one-piece construction, of a natural kraft color, and be permanently 
and conspicuously marked to grade.
    At the meetings the Committee discussed the impact of allowing U.S. 
No. 2 potatoes in one-piece 50 pound cartons. The Committee believes 
that the recommendation should increase the sale of U.S. No. 2 grade 
potatoes to the food service industry. Information from the Committee 
indicates that during an average season, approximately 10 percent of 
the fresh potato shipments from the production area are of U.S. No. 2 
grade, and that approximately 20 percent of the potatoes going to the 
food service industry are of U.S. No. 2 grade. This action is expected 
to further increase shipments to the food service industry, and help 
the Idaho-Eastern Oregon potato industry benefit from the increased 
growth in the food service industry.
    The relaxation of pack requirements allowing handlers to ship U.S. 
No. 2 grade potatoes in cartons might require the purchase of new 
equipment that can handle one-piece cartons. However, these costs are 
expected to be minimal and would be offset by the benefits of being 
able to ship U.S. No. 2 grade potatoes in that manner. The benefits of 
this rule are not expected to be disproportionately greater or lesser 
for small entities than large entities.
    As alternatives to this action, the Committee considered various 
alternatives to distinguish U.S. No. 2 grade potatoes packed in cartons 
from the traditional premium carton pack of U.S. No. 1 grade potatoes. 
The Committee decided that it was important that there be a clear 
distinction between the packs to ensure that the shipments of U.S. No. 
2 potatoes in cartons not negatively impact the market for U.S. No. 1 
potatoes in cartons.
    This rule will not impose any additional reporting or recordkeeping 
requirements on either small or large potato handlers and importers. As 
with all Federal marketing order programs, reports and forms are 
periodically reviewed to reduce information requirements and 
duplication by industry and public sectors. 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 potato industry, and all interested persons were invited to attend 
the meetings and participate in Committee deliberations. Like all 
Committee meetings, the January 18, 2000, 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 eight members, 
of whom three are handlers and five are producers. Finally, interested 
persons are invited to submit

[[Page 25627]]

information on 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 the 
following web site: http://www.ams.usda.gov/fv/moab.html. Any questions 
about the compliance guide should be sent to Jay Guerber at the 
previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    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.
    A 60-day comment period is provided to allow interested persons to 
respond to this interim final rule. All written comments timely 
received will be considered before a final determination is made on 
this matter.
    Pursuant to 5 U.S.C. 553, it also is 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 action until 30 days after publication in the Federal 
Register because: (1) The Committee unanimously recommended this 
relaxation in pack requirements; (2) handlers would like to take 
advantage of the relaxation as soon as possible to better meet buyer 
needs; (3) handlers are aware of this action which was discussed by the 
Committee at public meetings; and (4) handlers are currently shipping 
U.S. No. 2 grade potatoes.

List of Subjects in 7 CFR Part 945

    Marketing agreements, Potatoes, Reporting and recordkeeping 
requirements.

    For the reasons set forth above, 7 CFR part 945 is amended as 
follows:

PART 945--IRISH POTATOES GROWN IN CERTAIN DESIGNATED COUNTIES OF 
IDAHO, AND MALHEUR COUNTY, OREGON

    1. The authority citation for 7 CFR part 945 continues to read as 
follows:

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


    2. In Sec. 945.341, paragraph (b)(2) is removed, and paragraphs 
(b)(3) and (b)(4) are redesignated as paragraphs (b)(2) and (b)(3), 
respectively, and paragraph (c)(2) is revised to read as follows:


Sec. 945.341  Handling regulation.

* * * * *
    (c) * * *
    (2) Potatoes packed in cartons (except when used as a master 
container) shall be either:
    (i) U.S. No. 1 grade or better, except potatoes of U.S. Extra No. 1 
shall be no smaller than 110 size nor larger than 60 size; or
    (ii) U.S. No. 2 grade in one-piece 50-pound fiberboard cartons of 
natural kraft color, provided the cartons are permanently and 
conspicuously marked as to grade.
* * * * *

    Dated: April 28, 2000.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 00-11089 Filed 5-1-00; 11:22 am]
BILLING CODE 3410-02-P