[Federal Register Volume 65, Number 152 (Monday, August 7, 2000)]
[Rules and Regulations]
[Pages 48142-48144]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-19874]


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

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 945

[Docket No. FV00-945-1 FIR]


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

SUMMARY: The Department of Agriculture (Department) is adopting, as a 
final rule, with change, the provisions of an interim final rule 
relaxing pack requirements to allow handlers to ship U.S. No. 2 grade 
potatoes in one-piece 50-pound cartons to better meet buyer needs. 
Prior to this action, only U.S. No. 1 and better grade potatoes could 
be shipped in cartons. This change was recommended by the Idaho-Eastern 
Oregon Potato Committee (Committee), the agency responsible for local 
administration of the marketing order. This rule continues in effect 
relaxed pack requirements which allow handlers to ship a substantial 
amount of U.S. No. 2 grade potatoes in cartons, thus meeting customer 
demand and maximizing producer returns.

EFFECTIVE DATE: August 8, 2000.

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, 
suite 385, 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 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 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. 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. Prior to this action, pack requirements 
specified that all potatoes packed in cartons were to be inspected and 
certified as meeting U.S. No. 1 grade or better, and that potato size 
be conspicuously marked on all cartons (except when used as a master 
container). Grade and size requirements in the order 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. 
Also, 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.
    This rule continues in effect pack requirements which allow 
handlers to ship U.S. No. 2 grade potatoes in one-piece 50-pound 
fiberboard cartons of natural kraft color provided each carton is 
permanently and conspicuously marked as to grade. This change allows 
handlers to ship a substantial amount of U.S. No. 2 potatoes in 
cartons, thus meeting customer demands and maximizing producer returns.
    The Committee 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 subsequently 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

[[Page 48143]]

codes have reported less administration and recordkeeping problems with 
cartons than bags because the codes are more legible on cartons.
    Many customers purchase potatoes from other areas where U.S. No. 2 
potatoes are packed in 50-pound cartons. The Committee is responding to 
these changing market conditions so that handlers will remain 
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 fiberboard cartons be 
of one-piece construction, of a natural kraft color, and permanently 
and conspicuously marked to grade.
    In addition to finalizing the interim final rule published at 65 FR 
25625, this final rule also corrects an error in that interim final 
rule that removed the maturity requirement for Norgold variety 
potatoes. This rule restores that maturity requirement as was in effect 
in Sec. 945.341(b)(2) prior to the changes made in 65 FR 25625, and 
restores the paragraphs that were redesignated as paragraphs (b)(2) and 
(b)(3) in the interim final rule, as paragraphs (b)(3) and (b)(4), 
respectively. That is, the Norgold variety shall meet the maturity 
requirement of slightly skinned (except from August 1-15 this variety 
can be moderately skinned).
    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 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 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 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 whose annual receipts 
are less than $500,000. A majority of these handlers and producers may 
be classified as small entities, excluding receipts from other sources.
    This rule continues to relax the order's 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 change enables 
handlers to ship a substantial amount of U.S. No. 2 potatoes in 
cartons, thus meeting customer demands and maximizing producer returns. 
Prior to this action, the order required that all potatoes packed in 
cartons be inspected and certified to meeting U.S. No. 1 or better 
grade. At its meeting on January 18, 2000, it was the Committee's 
unanimous consensus that pack requirements should be relaxed. The 
Committee subsequently 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 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 purchase potatoes from other areas where U.S. No. 2 
potatoes are packed in 50-pound cartons. In recommending this change, 
the Committee is responding to changing market conditions so that 
handlers will remain competitive with other areas and not lose sales.
    The Committee also recognized the need to distinguish U.S. No. 2 
grade potatoes packed in cartons from the traditional premium U.S. No. 
1 grade packed 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 the provision that the fiberboard 
cartons be of one-piece construction, of a natural kraft color, and 
permanently and conspicuously marked as to grade.
    During the meetings, the Committee discussed the impact one-piece 
50-pound cartons of U.S. No. 2 potatoes might have on the industry. The 
Committee believes that the recommendation will 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 
methods to distinguish cartons of U.S. No. 2 grade potatoes 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 sector agencies. In addition, as 
noted in the initial regulatory flexibility analysis, the Department 
has not identified any relevant Federal rules that duplicate, overlap, 
or conflict with this rule.

[[Page 48144]]

    Further, the Committee's January 18, 2000, meeting was widely 
publicized throughout the potato industry, and all interested persons 
were invited to attend and participate in Committee deliberations. Like 
all Committee meetings, this was a public meeting and all entities, 
both large and small, were able to express their views on this issue.
    An interim final rule concerning this action was published in the 
Federal Register on May 3, 2000. A copy of the rule was faxed and 
mailed to the Committee's staff, which in turn, made the rule available 
to Committee members and potato handlers. In addition, the rule was 
made available through the Internet by the Office of the Federal 
Register. That rule provided for a 60-day comment period which ended 
July 3, 2000. No comments were received.
    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.
    After consideration of all relevant material presented, including 
the Committee's recommendation, and other information, it is found that 
finalizing the interim final rule, with change, as published in the 
Federal Register (65 FR 25625, May 3, 2000) will tend to effectuate the 
declared policy of the Act.
    Pursuant to 5 U.S.C. 553, it also is found that good cause exists 
for not postponing the effective date of this action until 30 days 
after publication in the Federal Register because: (1) This action 
corrects maturity requirements for Norgold variety potatoes which were 
inadvertently removed; (2) no useful purpose would be achieved by 
delaying the effective date of this action; and (3) no comments were 
received in response to the interim final rule.

List of Subjects in 7 CFR Part 945

    Marketing agreements, Potatoes, Reporting and recordkeeping 
requirements.

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

    Accordingly, the interim final rule amending 7 CFR part 945 which 
was published at 65 FR 25625 on May 3, 2000, is adopted as a final rule 
with the following change:
    1. The authority citation for part 945 continues to read as 
follows:

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


    2. In Sec. 945.341, paragraphs (b)(2) and (b)(3) are redesignated 
as paragraphs (b)(3) and (b)(4) and a new paragraph (b)(2) is added to 
read as follows:


Sec. 945.341  Handling regulation.

* * * * *
    (b) * * *
    (2) Norgold varieties. Each year from August 1 through August 15, 
``moderately skinned''; during other periods ``slightly skinned.''
* * * * *

    Dated: August 1, 2000.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 00-19874 Filed 8-4-00; 8:45 am]
BILLING CODE 3410-02-P