[Federal Register Volume 66, Number 70 (Wednesday, April 11, 2001)]
[Rules and Regulations]
[Pages 18719-18721]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-8870]



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  Federal Register / Vol. 66, No. 70 / Wednesday, April 11, 2001 / 
Rules and Regulations  

[[Page 18719]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 946

[Docket No. FV00-946-1 FIR]


Irish Potatoes Grown in Washington; Exemption From Handling and 
Assessment Regulations for Potatoes Shipped for Experimental Purposes

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 
exempting potatoes shipped for experimental purposes from the handling 
and assessment regulations of the Washington State potato marketing 
order. The marketing order regulates the handling of potatoes grown in 
Washington, and is administered locally by the State of Washington 
Potato Committee (Committee). Experimental shipments of potatoes by 
handlers utilizing new and innovative packaging, including the 
commingling of different varieties of potatoes in the same package, or 
shipments of non-traditional experimental varieties of potatoes will 
continue to be exempt from the grade, size, maturity, pack, inspection, 
and assessment requirements of the marketing order. By relaxing the 
requirements on shipments of such potatoes, this rule continues to 
provide the industry with greater marketing flexibility and with the 
ability to investigate new methods for increasing producer returns. It 
also is expected to provide consumers with more choices in buying fresh 
potatoes.

EFFECTIVE DATE: May 11, 2001.

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, 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. 113 and Marketing Order No. 946, both as amended (7 CFR 
part 946), regulating the handling of Irish potatoes grown in 
Washington, 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 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 the date of the entry of the ruling.
    This rule continues in effect exemptions for shipments of potatoes 
for experimentation from the grade, size, maturity, pack, inspection, 
and assessment requirements of the marketing order. By relaxing the 
requirements on new and innovative packaging and on non-traditional 
varieties of fresh potatoes, this rule continues to provide the 
industry with greater marketing flexibility and the ability to 
investigate new methods for increasing producer returns, and provides 
consumers with more choices in buying fresh potatoes. The Committee 
unanimously recommended the exemption for experimental packs and 
varieties at its meeting held on June 8, 2000.
    Section 946.51 of the order provides authority for the Committee to 
recommend the implementation, modification, suspension, or termination 
of regulations. Section 946.52 provides the necessary authority for the 
Department to issue regulations, and to modify, suspend, or terminate 
such regulations. Furthermore, Sec. 946.54 provides authority for the 
modification, suspension, or termination of handling regulations for 
the purpose of facilitating the handling of potatoes for special 
purposes, while Sec. 946.55 provides for adequate safeguards to prevent 
such special purpose shipments from entering unauthorized outlets. The 
order's handling regulations, Sec. 946.336, establish the grade, size, 
maturity, pack, and inspection requirements for potatoes grown in 
Washington. The assessment rate for Washington potatoes is established 
in Sec. 946.248, pursuant to Sec. 946.41.
    Handlers have expressed a desire to experiment with shipping 
potatoes of different varieties in the same container. This has been a 
problem, however, since the order requires that all potato varieties, 
as a minimum, meet U.S. No. 2 grade as defined in the U.S. Standards 
for Grades of Potatoes. These standards specify that a particular lot 
of potatoes has ``similar'' varietal characteristics. Although the 
order's handling regulations do allow the mixing of any size and 
variety in a 3-pound or smaller container, handlers have been unable to

[[Page 18720]]

ship a large enough quantity of the experimental packs to determine 
market feasibility. With this action, however, marketers will have the 
ability to experiment with various packs, including containers with a 
mixture of different potato varieties and sizes.
    Prior to this action, the order's regulations required that all 
potatoes shipped to the fresh market, with the exception of those 
meeting the minimum quantity and special purpose exemptions, be 
inspected and assessed. The handling regulations did not provide 
adequate relief for commercially viable shipments of non-traditional or 
experimental potato varieties that could not meet minimum inspection 
requirements. Several producers and handlers within the production area 
are attempting to develop and market new varieties of potatoes. Some of 
the new varieties have irregular shapes or are small in size and will 
not meet minimum order requirements. In order to market these unique 
potatoes, handlers were required to utilize the order's minimum 
quantity exemption, which allows shipments up to, but not in excess of, 
500 pounds of potatoes daily without regard to assessment and 
inspection requirements. This had prevented handlers from shipping 
larger quantities of these potatoes and thus adequately determining 
marketability and consumer acceptance. By allowing handlers to ship the 
quantities of new varieties they believe are necessary to determine 
marketability, this rule adequately addresses this issue.
    As is currently required for all special purpose shipments, 
handlers shipping experimental potato packs or experimental potato 
varieties will need to apply for and obtain a special purpose 
certificate from the Committee. To help ensure compliance with the 
revised provisions and to statistically track the shipments of 
experimental potato packs and varieties, the Committee will require 
that shipments made pursuant to this action be reported on the Special 
Purpose Shipment Report, as modified to include potatoes shipped for 
experimental purposes. Such reports will help the Committee in 
determining whether applicable requirements have been met and whether 
proper disposition has occurred, and will be furnished to the Committee 
for each shipment made pursuant to the applicable Special Purpose 
Certificate. The Committee's intent is to keep reporting requirements 
at the minimum level necessary to monitor compliance while determining 
the viability and extent of any changes in the packaging and marketing 
of Washington potatoes.
    The Committee contends that the purpose of the order is to provide 
quality assurance and minimum grade standards for Washington potatoes 
and not to inhibit innovation. This rule thus provides the Washington 
potato industry with the ability to seek new and innovative ways to 
market its fresh potato crop without the costs and constraints of 
regulation that otherwise provide a necessary service to the industry. 
This rule provides the industry with the flexibility to explore new 
markets while enhancing product development, and helps in identifying 
niche markets which may benefit producers, handlers, buyers, and 
consumers of Washington State potatoes. Should a particular 
experimental pack or variety become commercially significant and some 
form of quality control or assessment reinstatement be needed, the 
Committee will consider further changes in the exemptions.
    As referenced earlier, the Committee currently utilizes two forms 
for special purpose shipments. These are the Shippers Application for 
Special Purpose Certificate and the Special Purpose Shipment Report. To 
conform to this terminology, this rule also replaces the term 
``Certificate of Privilege'' with the term ``Special Purpose 
Certificate'' wherever it appears in the Rules and Regulations and 
Handling Regulations established 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 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 40 handlers of Washington potatoes who are 
subject to regulation under the marketing order and approximately 340 
Washington 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. A majority of these handlers and 
producers may be classified as small entities, excluding receipts from 
other sources.
    This rule continues in effect exemptions for shipments of potatoes 
shipped for experimentation from the grade, size, maturity, pack, 
inspection, and assessment requirements prescribed under the 
regulations of the marketing order regulating the handling of potatoes 
grown in Washington. Pursuant to authority in Secs. 946.51, 946.52, and 
946.54, at its meeting on June 8, 2000, the Committee unanimously 
recommended that this exemption for experimental potato packs and 
varieties be added under Sec. 946.336(d),

Special Purpose Shipments

    By relaxing the regulations, this rule continues to provide the 
Washington potato industry with the enhanced ability to seek new and 
innovative methods of marketing its fresh potato crop. This rule 
continues to provide the industry with the flexibility to explore new 
markets while enhancing product development, and helps to identify 
niche markets which may benefit producers, handlers, buyers, and 
consumers of Washington State potatoes.
    The Committee believes that this rule will continue to have a 
positive economic impact on the Washington potato industry. Producers 
and handlers will be able to concentrate on developing innovative new 
packaging and marketable new potato varieties without the costs 
associated with inspection and administrative assessments, as well as 
most of the costs associated with grading. Although not having specific 
information regarding the volume of potatoes that will be marketed 
through this exemption, the Committee estimates that the initial volume 
being shipped will be low and thus will have little negative impact on 
Committee assessment income. However, since one of the objectives of 
this action is to increase the utilization of fresh potatoes produced 
in Washington, the Committee will consider changing the handling 
regulation and assessment requirements in the future, if needed, to 
help ensure quality control and adequate Committee income if the 
experimental shipments become commercially viable.
    The current assessment rate is $0.002 per hundredweight of potatoes 
handled. Also, the cost of inspection under the marketing order is 
$0.06 per hundredweight of potatoes inspected. Handlers, both small and 
large, shipping

[[Page 18721]]

potatoes under the experimental shipment exemption will not incur these 
costs. Any savings accrued will be proportional to the quantities of 
potatoes shipped under the experimentation exemption.
    With regard to alternatives, we believe that this action best 
reflects the marketing and product development goals of the Washington 
potato industry.
    The Committee estimates that initially four or five handlers may 
apply for and obtain Special Purpose Certificates for the purpose of 
making shipments of experimental packs or varieties. In addition, such 
handlers will be required to furnish to the Committee a Special Purpose 
Shipment Report for each shipment made under the experimental purposes 
exemption. The Committee estimates that the time taken by the handlers 
who apply for the exemptions will total less than ten hours. Such time 
is currently approved under OMB No. 0581-0178 by the Office of 
Management and Budget in accordance with the Paperwork Reduction Act of 
1995 (44 U.S.C. Chapter 35).
    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.
    Further, the Committee's meeting was widely publicized throughout 
the Washington potato industry and all interested persons were invited 
to attend the meeting and participate in Committee deliberations. Like 
all Committee meetings, the June 8, 2000, meeting 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 November 24, 2000. Copies of the rule were mailed 
by the Committee's staff to all Committee members and Washington 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 January 23, 2001. 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, without change, as published in the 
Federal Register (65 FR 70461, November 24, 2000 and 65 FR 71201, 
November 29, 2000) will tend to effectuate the declared policy of the 
Act.

List of Subjects in 7 CFR Part 946

    Marketing agreements, Potatoes, Reporting and recordkeeping 
requirements.

PART 946--IRISH POTATOES GROWN IN WASHINGTON

    Accordingly, the interim final rule amending 7 CFR part 946 which 
was published at 65 FR 70461 on November 24, 2000, and corrected at 65 
FR 71201 on November 29, 2000, is adopted as a final rule without 
change.

    Dated: April 4, 2001.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 01-8870 Filed 4-10-01; 8:45 am]
BILLING CODE 3410-02-P