[Federal Register Volume 65, Number 132 (Monday, July 10, 2000)]
[Rules and Regulations]
[Pages 42275-42278]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-17415]



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 Rules and Regulations
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  Federal Register / Vol. 65, No. 132 / Monday, July 10, 2000 / Rules 
and Regulations  

[[Page 42275]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 947

[Docket No. FV00-947-1 IFR]


Irish Potatoes Grown in Modoc and Siskiyou Counties, California, 
and in all Counties in Oregon, except Malheur County; Suspension of 
Handling, Reporting, and Assessment Collection Regulations

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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

SUMMARY: This rule suspends for the 2000-2001 and future seasons the 
minimum grade, size, quality, maturity, pack, inspection, and other 
related requirements prescribed under the Oregon-California potato 
marketing order. It also suspends all reporting and assessment 
collection requirements. The marketing order regulates the handling of 
Irish potatoes grown in Modoc and Siskiyou Counties, California, and in 
all Counties in Oregon, except Malheur County, and is administered 
locally by the Oregon-California Potato Committee (Committee). This 
rule will reduce industry-operating expenses.

DATES: Effective July 1, 2000. Comments received by September 8, 2000 
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 or can be viewed at: 
http://www.ams.usda.gov/fv/moab.html.

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, suite 385, 
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 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: [email protected].

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 maintains continuity with the current 
suspension. 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 suspends the minimum grade, size, quality, maturity, 
pack, inspection, and other related requirements prescribed under the 
Oregon-California potato marketing order. It also suspends all 
reporting and assessment collection requirements. The marketing order 
regulates the handling of Irish potatoes grown in Modoc and Siskiyou 
Counties, California, and in all Counties in Oregon, except Malheur 
County, and is administered locally by the Oregon-California Potato 
Committee. This rule will reduce industry expenses, as it decides 
whether the marketing order should be continued.
    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 part 947. Termination or suspension authority also is 
specified in Sec. 947.71.
    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.
    Prior to the 1999-2000 season, minimum grade, size, quality, 
maturity, and pack requirements for potatoes regulated under the order 
were specified in Sec. 947.340 Handling Regulation [7 CFR part 
947.340]. This regulation, with modifications and exemptions for 
different varieties and types of shipments, provided that all potatoes 
grade at least U.S. No. 2; be at least 2 inches in diameter or weigh at 
least 4

[[Page 42276]]

ounces, and be not more than moderately skinned. Additionally, potatoes 
packed in cartons had to 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 included 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 that 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 March 31, 2000, meeting, the Committee recommended 
suspending the handling and inspection regulations and related sections 
for the 2000-2001 and future seasons. It also recommended that all 
reporting and assessment collection requirements be suspended, too. The 
Committee requested that this rule be effective on July 1, 2000, which 
is the date shipments of the 2000 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. It 
would like to further assess this matter during the 2000-2001 and 
future seasons.
    Potato prices have been at low levels in recent seasons, and many 
producers have faced difficulty covering their production costs. 
Therefore, the Committee continues to explore various alternatives for 
reducing costs.
    The Committee recommended suspending the handling regulations for a 
one-year trial from July 1, 1999, through June 30, 2000. The Committee 
was concerned that the elimination of current requirements could 
possibly result in lower quality potatoes being shipped to fresh 
markets. Also, there was some concern that the Oregon-California potato 
industry could lose sales to other potato producing areas that were 
covered by quality and inspection requirements. For these reasons, the 
Committee recommended the one-year suspension of the requirements for 
the 1999-2000 marketing season.
    The Committee believes that this one-year trial was successful and 
recommended continuing the suspension of the handling and inspection 
requirements indefinitely. Last season's suspension was implemented by 
the Department with an interim final rule published in the Federal 
Register on June 25, 1999 (64 FR 34113) and finalized on September 13, 
1999 (64 FR 49352). Continuation of the suspension for the 2000-2001 
and subsequent seasons will enable the Committee to further study the 
impacts on the industry 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, and continue to decrease handler costs associated with 
inspection. This rule will not restrict handlers from seeking 
inspection on a voluntary basis. The Committee will continue to 
evaluate the effects of removing the minimum requirements on marketing 
and on producer returns at its annual spring meetings.
    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. Section 947.125 
regarding minimum quantity assessment exemptions, and Sec. 947.180 
regarding monthly assessment reports expire by their own terms on June 
30, 2000.
    The September 13, 1999, interim final rule also established 
reporting requirements for the 1999-2000 season so the Committee could 
obtain information on which to collect assessments. In previous 
seasons, it had obtained this information from inspection reports. 
However, these reports were eliminated with the suspension of mandatory 
inspection. The reporting requirements will not be needed during the 
2000-2001 and future seasons because the Committee recommended that no 
assessments be collected from handlers during these seasons.
    Section 947.247 of the marketing order currently prescribes an 
assessment rate of $0.004 per hundredweight of assessable potatoes for 
the Oregon-California Potato Committee. Authorization to assess potato 
handlers enables the Committee to incur expenses that are necessary to 
administer the marketing order. With the suspension of handling, 
inspection, and reporting requirements, a limited Committee budget will 
be needed for program administration during the 2000-2001 and future 
seasons. For 2000-2001, the Committee recommended a budget of $2,000 
for management and its spring meetings. It has about $10,000 in 
operating reserves to cover approved Committee expenses.
    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 are 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 
having annual receipts of less than $500,000.
    The Committee estimates that about 83 percent of the handlers ship 
under $5,000,000 worth of Oregon-California

[[Page 42277]]

potatoes and about 17 percent of the handlers ship over $5,000,000 
worth of Oregon-California potatoes 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 $294,000, excluding receipts from other sources. 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.
    At its March 31, 2000, meeting, the Committee recommended 
suspending the handling and related regulations. It also recommended 
suspending all reporting and assessment collection regulations. The 
Committee requested that this rule be effective on July 1, 2000, which 
is the date shipments of the 2000 Oregon-California potato crop are 
expected to begin. This rule will allow the Oregon-California potato 
industry to market potatoes without minimum grade, size, quality, 
maturity, pack, and inspection requirements.
    The objective of the handling 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 continues to explore various alternatives for 
reducing costs. The Committee recommended suspending the handling 
regulations for a one-year trial from July 1, 1999, through June 30, 
2000. The Committee was concerned that the elimination of current 
requirements could possibly result in lower quality potatoes being 
shipped to fresh markets. Also, there was some concern that the Oregon-
California potato industry could lose sales to other potato producing 
areas that were covered by quality and inspection requirements. For 
these reasons, the Committee recommended the one-year suspension of the 
requirements for the 1999-2000 marketing season.
    The Committee believes that this one-year trial was successful and 
recommends continuing the suspension that was finalized by the 
Department on September 13, 1999 (64 FR 49352). This will enable the 
Committee to further 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. It will decrease handler costs associated with 
inspection. This rule will not restrict handlers from seeking 
inspection on a voluntary basis. The Committee will continue to 
evaluate the effects of removing the minimum requirements on marketing 
and on producer returns at its annual spring meetings.
    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 the industry. The total 
cost of inspection and certification for fresh shipments of Oregon-
California potatoes during the 1998-99 marketing season was estimated 
at $600,000. The 1998-99 marketing season was the most recent year for 
mandatory inspection. 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 suspension of the assessment collection requirements for the 
2000-2001 and future seasons also will result in some cost savings. 
Assessment collections during the 1999-2000 season totaled $25,500. 
Absent the suspension of Sec. 947.247, assessments collected during the 
2000-2001 season would have been about $26,000, according to Committee 
estimates.
    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.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the information collection requirements being suspended by 
this rule were approved previously by the Office of Management and 
Budget (OMB) and assigned OMB No. 0581-0178. Suspension of all of the 
reporting requirements is expected to reduce the reporting burden on 
small or large Oregon-California potato handlers by almost 300 hours, 
and should further reduce industry expenses. 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 addition, 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 Oregon-California potato industry and all interested persons were 
invited to attend the meeting and participate in Committee 
deliberations. Like all Committee meetings, the March 31, 2000, meeting 
was a public meeting and all entities, both large and small, were able 
to express their views on this issue. Finally, interested persons are 
invited to submit 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: 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.
    This rule invites comments on suspension of the handling, 
reporting, and assessment collection regulations under the Oregon-
California potato marketing order. Any comments received will be 
considered prior to finalization of this rule.
    After consideration of all relevant material presented, including 
the Committee's recommendation, and other information, it is found that 
the regulations suspended by this action no longer tend to effectuate 
the declared policy of the Act.
    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 for Oregon-California potatoes beginning July 1, 2000; (2) 
this rule was recommended by the Committee at an open public meeting 
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, 2000, the 
date 2000-2001 season shipments of the Oregon-California potato crop 
are expected to begin, and this action should apply to the entire 
season's

[[Page 42278]]

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, 947.125, 947.130, 947.132, 
947.133, 947.134, 947.141, 947.180, 947.247, and 947.340 are suspended 
in their entirety effective July 1, 2000.

    Dated: July 5, 2000.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 00-17415 Filed 7-6-00; 9:48 am]
BILLING CODE 3410-02-P