[Federal Register Volume 67, Number 115 (Friday, June 14, 2002)]
[Rules and Regulations]
[Pages 40844-40847]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-15064]


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

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 948

[Docket No. FV02-948-1 FR]


Irish Potatoes Grown in Colorado; Increase in the Minimum Size 
Requirement for Area No. 2

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

SUMMARY: This rule increases the minimum size requirement for all 
varieties of potatoes produced in Area No. 2 of Colorado, except for 
the round varieties and the Russet Burbank, Russet Norkotah, and 
Silverton Russet varieties. This rule raises the minimum size 
requirement from 1\7/8\ inches to 2 inches in diameter or 4 ounces in 
weight. This size change is based on a recommendation of the Colorado 
Potato Administrative Committee (Committee), the agency responsible for 
local administration of the marketing order for potatoes grown in 
Colorado. This change is intended to improve the marketing of Colorado 
potatoes and increase returns to producers.

EFFECTIVE DATE: This final rule becomes effective July 15, 2002.

FOR FURTHER INFORMATION CONTACT: Robert J. Curry, 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, 1400 
Independence Avenue SW., STOP 0237, Washington, DC 20250-0237; 
telephone: (202) 720-2491, Fax: (202) 720-8938.
    Small businesses may request information on complying with this 
regulation by contacting Jay Guerber, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence 
Avenue SW., STOP 0237, Washington, DC 20250-0237; telephone: (202) 720-
2491, Fax: (202) 720-8938, or E-mail: [email protected].

SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing 
Agreement No. 97 and Order No. 948, both as amended (7 CFR part 948), 
regulating the handling of Irish potatoes grown in Colorado, 
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 of Agriculture (USDA) is issuing this rule in 
conformance with Executive Order 12866.
    This final 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 USDA 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. Such 
handler is afforded the opportunity for a hearing on the petition. 
After the hearing USDA 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 USDA'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 increases the minimum size requirement for all varieties 
of potatoes produced in Area No. 2 of Colorado, except for the round 
varieties and the Russet Burbank, Russet Norkotah, and Silverton Russet 
varieties. This rule raises the minimum size requirement from 1\7/8\ 
inches in diameter to 2 inches in diameter or 4 ounces in weight. This 
action is based on a recommendation the Committee made on August 16, 
2001.
    Section 948.4 of the order defines the counties included in Area 
No. 2, which is commonly known as the San Luis Valley. Section 948.22 
of the order authorizes the issuance of regulations for grade, size, 
quality, maturity, and pack for any variety or varieties of potatoes 
grown in different portions of the production area during any period. 
Section 948.23 authorizes the issuance of regulations that modify, 
suspend, or

[[Page 40845]]

terminate requirements issued under Sec. 948.22. Section 948.386 
contains handling regulations authorized in Sec. 948.22 for potatoes 
grown in Area No. 2. The regulations in effect prior to this final rule 
prescribed minimum size requirements of 2 inches in diameter for round 
varieties and 1\7/8\ inches in diameter for long varieties.
    As stated above, this rule raises the minimum size requirement from 
1\7/8\ inches in diameter to 2 inches in diameter or 4 ounces in weight 
for all varieties of potatoes produced in Area No. 2 of Colorado, 
except for the round varieties and the Russet Burbank, Russet Norkotah, 
and Silverton Russet varieties. This means that the potato varieties 
subject to the minimum size requirements under this rule will meet the 
size requirements if they are at least 2 inches in diameter or 4 ounces 
in weight. For example, long, thin potatoes smaller than 2 inches in 
diameter, but weighing 4 ounces or more will meet these size 
requirements. Similarly, potatoes weighing less than 4 ounces, but at 
least 2 inches in diameter will also meet the minimum size requirements 
effective in this rule.
    According to the Committee, quality assurance is very important to 
the Colorado potato industry. Providing the public with acceptable 
quality produce that is appealing to the consumer on a consistent basis 
is necessary to maintain buyer confidence in the marketplace. The 
Committee reports that potato size is important to buyers and that 
providing the sizes desired is necessary to maintain buyer confidence 
in the marketplace.
    When the Committee made its recommendation, nine members voted in 
favor of the motion, two members voted in opposition to the motion and 
one member abstained from voting. The Committee made the recommendation 
to provide buyers with the sizes they prefer and to maintain buyer 
confidence. The Committee also believes that this rule will help 
improve the marketing of the potato varieties affected by the change 
and that it will help improve producer returns.
    For the purpose of obtaining additional information on the need for 
the change, the Committee conducted a producer survey prior to making 
the recommendation to the USDA. The survey indicated that 58 percent of 
the producers supported an increase in the minimum size to 2 inches in 
diameter or 4 ounces in weight for all varieties of potatoes, except 
for the round varieties and the Russet Burbank, Russet Norkotah, and 
Silverton Russet varieties.
    The Committee did not recommend a change in the minimum size 
requirement for all round varieties because it believes that the 
minimum size requirement of 2 inches in diameter for these varieties of 
potatoes continues to be appropriate. The Russet Burbank, Russet 
Norkotah, and Silverton Russet are long, thin potato varieties that 
have a tendency to fall through the sizing screens on the potato 
grading equipment, even when the potatoes are of adequate size and 
weight (i.e., 4 ounces or larger). This is particularly a problem when 
the sizing screens are tooled for larger sized potatoes such as 2 or 
2\1/4\ inch minimum diameter. Because of this problem, the Committee 
believes that the minimum size requirement for these three Russet 
varieties of 1\7/8\ inches in diameter is appropriate. Although one 
Committee member opposed the recommendation because he believed all 
Area No. 2 potato varieties should have a minimum size requirement of 2 
inches in diameter or 4 ounces in weight, the Committee believes that 
handlers might lose a high percentage of acceptable potatoes of the 
long, thin varieties during the sizing and grading of the potatoes if 
the minimum size requirement on such potatoes was increased to 2 inches 
in diameter or 4 ounces in weight. Another Committee member opposing 
the motion did not believe that the results of the producer survey were 
a sufficient reason for the Committee to recommend an increase in the 
minimum size requirements. While the survey provided background 
information that assisted the Committee in making its recommendation, 
the primary purposes for the change are to better meet the needs of 
buyers and consumers, improve the image of Colorado potatoes, and 
improve sales and prices.

Final Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Agricultural Marketing Service (AMS) has considered the 
economic impact of this rule 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 230 producers of Colorado Area No. 2 
potatoes and approximately 80 handlers subject to regulation under the 
marketing order. Small agricultural producers are defined by the Small 
Business Administration (13 CFR 121.201) as those having annual 
receipts of less than $750,000, and small agricultural service firms 
are defined as those whose annual receipts are less than $5,000,000.
    Information provided by the National Agricultural Statistics 
Service (NASS) was considered in determining the number of large and 
small producers by acreage, production, and producer prices. According 
to the information provided, the recent average yield per acre was 335 
hundredweight, the average farm size was 306 acres of potatoes, and the 
recent season average producer price was $4.20 per hundredweight. This 
equates to average gross annual producer receipts of approximately 
$430,542 each. In addition, based upon information provided by the 
Committee, all handlers of Area No. 2 potatoes have shipped under 
$5,000,000 worth of potatoes during the most recent season for which 
statistics are available. Based on the foregoing, it can be concluded 
that a majority of producers and handlers of Area No. 2 potatoes may be 
classified as small entities.
    The NASS estimated planted acreage for the 2001-02 crop in Area No. 
2 at 68,100 acres, a decrease of 7,500 acres when compared with the 
75,600 acres harvested in 2000-01. Approximately 90 percent of the 
potatoes harvested in 2001-02 entered the fresh market (including 
potatoes produced for seed).
    Russet varieties accounted for 81.4 percent of the acres planted 
for the 2001-02 crop year. Russet Norkotah, the most popular variety, 
was planted on 53.8 percent of the total potato acreage. Other Russet 
varieties, including Russet Burbank and Silverton Russet varieties, 
accounted for 27.6 percent of the total acres planted, with various 
other non-Russet varieties making up the remaining 18.6 percent. While 
exact acreage is not known, plantings of Russet Burbank and Silverton 
Russet varieties of potatoes are estimated to make up only a small 
percentage of the total potato acreage.
    This rule increases the minimum size requirement for all varieties 
of potatoes produced in Area No. 2 of Colorado, except for the round 
varieties and the Russet Burbank, Russet Norkotah, and Silverton Russet 
varieties. This rule raises the minimum size requirement from 1\7/8\ 
inches in diameter to 2 inches in diameter or 4 ounces in weight. Only

[[Page 40846]]

a small portion of the crop (i.e., that portion smaller than 2 inches 
in diameter or 4 ounces in weight but larger than 1\7/8\ inches in 
diameter) is expected to be affected by the size increase. The 
Committee believes that the expected benefits of improved quality, 
increased purchases and sales volume, and increased returns received by 
producers will greatly outweigh the costs related to the regulation.
    Alternatives considered by the Committee included increasing the 
minimum size requirement for all Russet varieties or not making any 
changes. The Committee does not believe it is desirable to increase the 
minimum size requirement for the Russet Burbank, Russet Norkotah, and 
Silverton Russet varieties because these long and thin varieties have a 
tendency, especially when sitting on end, to fall through the sizing 
screens on the potato grading equipment even when the potatoes are of 
good size. This is particularly a problem when the sizing screens are 
set at larger size settings such as 2 or 2\1/4\ inches. Because of this 
problem, the Committee decided that the minimum size requirement of 
1\7/8\ inches in diameter for these three Russet varieties is 
appropriate. The Committee believes that handlers would have lost a 
high percentage of acceptable potatoes through the sizing screens if 
the minimum size requirement on such potatoes had been increased to 2 
inches in diameter or 4 ounces in weight. Finally, the Committee 
determined that the alternative of not taking action would not have 
addressed the industry's marketing problems.
    This rule changes the size requirements prescribed under the 
handling regulations of the order. Accordingly, this action will not 
impose any additional reporting or recordkeeping requirements on either 
small or large potato handlers. 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.
    Furthermore, as noted in the initial regulatory flexibility 
analysis, USDA has not identified any relevant Federal rules that 
duplicate, overlap or conflict with this proposed rule.
    In addition, the Committee's meeting was widely publicized 
throughout the Colorado Area No. 2 potato industry and all interested 
persons were invited to attend the meeting and participate in Committee 
deliberations on all issues. Like all Committee meetings, the Committee 
meeting on August 16, 2001, was a public meeting and all entities, both 
large and small, were able to express views on this issue. Finally, 
interested persons were invited to submit information on the regulatory 
and informational impacts of this action on small businesses.
    A proposed rule concerning this action was published in the Federal 
Register on March 1, 2002 (67 FR 9418). A copy of the rule was provided 
to the Committee's staff, who in turn notified Committee members, 
potato producers, and handlers, and other interested persons. In 
addition, the Office of the Federal Register and USDA also made a copy 
available through the Internet. Finally, a 60-day comment period, which 
ended on April 30, 2002, was provided to allow interested persons the 
opportunity to respond to the proposal.
    Four comments were received during the comment period in response 
to the proposal. Each of the comments contained several questions and 
opinions regarding the proposed size change. We have separated the 
questions and opinions into the following four categories: (1) USDA's 
role in implementing the proposal; (2) the level of support potato 
producers in Colorado Area No. 2 have for the proposal; (3) the purpose 
of the proposed size change; and (4) the impact of the proposed size 
change on consumers. Since most of the individual commenter's opinions 
and questions were similar, their questions are addressed below within 
the context of these four categories.

USDA's Role in Implementing the Proposal

    Marketing orders are designed to help stabilize market conditions 
for fruit, vegetable, and specialty crops. The programs assist 
producers in allowing them to collectively work to solve marketing 
problems. Industries voluntarily enter into these programs and choose 
to have federal oversight of certain aspects of their operations. The 
Marketing Order Administration Branch of the Fruit and Vegetable 
Programs oversees the programs to make sure the orders operate in the 
public interest and in accordance with the authorizing Act, the order, 
and the regulations. The Colorado potato order is one of 36 active 
orders which collect assessment fees from handlers to cover the 
operational and administrative costs of the programs.
    Marketing orders contain regulations authorized by the U.S. 
Congress through the Agricultural Marketing Agreement Act of 1937. 
Local administrative committees made up of producers and handlers from 
their particular growing areas administer programs for fruits, 
vegetables, and specialty crops. Some of the committees have members 
that represent the public. The Colorado Potato Administrative Committee 
for Area No. 2 works with USDA in providing potato buyers with the size 
and quality their customers desire. Additional information on these 
programs, including the Colorado potato order, may be found at http://www.usda.gov/fv/moab.html.

The Level of Support Potato Producers in Colorado Area No. 2 Have for 
the Proposal

    Committee members are nominated by their peers and selected by 
USDA. Committee members make decisions and vote for regulations that 
are supported by their constituents--the producers or handlers that 
nominated them. When a decision is made by a committee to recommend the 
establishment of, or change in, a regulation, considerable effort and 
debate is expended to ensure that the proposal would be effective.
    In addition to relying on each of its members expertise in the 
production, handling, and marketing of the regulated crop, a committee 
compiles such other information as is available to help it make 
decisions. In that regard, as previously stated, the Colorado Area No. 
2 Committee conducted a producer survey to help it determine what type 
of changes in the size regulations it should pursue. The survey 
established that 58 percent of the respondents supported the increase 
in minimum size from 1 7/8 inches to 2 inches. Although the Committee 
made its decision based on many factors including the desire to meet 
the needs of buyers, the survey was a useful tool in providing the 
Committee with feedback.
    One of the commenters questioned whether producers in Area No. 2 
would be disadvantaged relative to producers in Areas No. 1 and 3. Area 
No. 1 is not currently regulated and the handling of potatoes in Area 
No. 3 is regulated under different handling provisions than those in 
Area No. 2. The order was established with different administrative 
committees, production areas, and handling regulations in recognition 
of the distinct geographical and marketing differences between them. 
Although the two regulated areas meet once a year as a combined 
committee, marketing and regulatory decisions are made independently of 
each other by the respective area committees in recognition that their 
decisions do not directly impact the other area. It is important to 
note that this final rule only affects the handling of certain potatoes 
produced in Area No. 2 of the State of Colorado.

[[Page 40847]]

The Purpose of the Proposed Size Change

    Most of the individuals submitting comments questioned the 
reasoning behind a rule that mandates and changes the minimum allowable 
size of potatoes for the fresh market. As previously stated, this 
regulation only regulates the minimum size of certain varieties of 
Colorado Area No. 2 potatoes that are handled for subsequent sale into 
the fresh market. This regulation does not regulate potato production. 
Only those potatoes of the varieties affected by this regulation that 
are sold into the fresh market must meet the revised minimum size of at 
least 2 inches minimum diameter or 4 ounces in weight. Potatoes of 
these varieties that do not meet this size may be sold into alternative 
markets, including processing (e.g., frozen and dehydrated).
    As explained in the proposed rule, the change in size from 1\7/8\ 
inches minimum diameter to 2 inches minimum diameter for the affected 
potato varieties was recommended by the Committee for the purpose of 
improving the marketing of certain Colorado Area No. 2 potatoes and for 
improving the income producers receives from the sale of such potatoes. 
The Committee believes that the marketing of Area No. 2 potatoes is 
improved when the demand for such potatoes improves. Based on the 
experience of its members and input from buyers, the Committee 
determined that demand for the varieties affected by this rule would be 
better if such potatoes were consistently sized and larger. In this 
regard, the Committee determined that an increase in the minimum size 
of the affected varieties by an eighth of an inch was the optimal size 
increase to best improve demand. The establishment of a larger minimum 
diameter, 2\1/2\ inches for example, would not have met with the 
Committee's, nor the Colorado Area No. 2 potato industry's, objective 
of satisfying the buyers of their potatoes and thereby increasing the 
marketing of the affected potato varieties. In addition, a larger 
minimum size would have required producers and handlers to divert a 
larger quantity of potatoes to lower return processing outlets.
    With regard to questions by some of the commenters pertaining to 
why the regulation affects only certain varieties, the Committee 
determined that a marketing problem does not exist for round varieties 
or potatoes of the Russet Burbank, Russet Norkotah, and Silverton 
Burbank varieties. Round potatoes, including various white, red, and 
yellow varieties, generally have a different fresh market niche than do 
Russet potato varieties, and as such, the Committee continues to 
believe that the minimum diameter of 2 inches is appropriate for that 
market. Moreover, the long, thin shape of the Russet Burbank, Russet 
Norkotah, and Silverton Russet varieties cause a significant quantity 
of these potatoes to fall through the sizing screens in the grading 
equipment, even when the potatoes are of adequate size and weight. When 
potatoes are being graded, sized, and otherwise prepared for market, 
they are run on conveyer belts that include sections with screens that 
allow potatoes of different sizes to fall through adjustable openings 
to other conveyer belts. This is the method generally used by the 
industry to ensure that specific sized potatoes are segregated and thus 
packaged with similar sized potatoes. If too many potatoes of a desired 
size and weight for the fresh market fall through the sizing screens to 
belts conveying the potatoes to bins destined for a processor, for 
example, the industry loses money on the potential high-value sales of 
those potatoes into the fresh market.

The Impact of the Proposed Size Change on Consumers

    Finally, most of the comments reflected concern as to how consumers 
would be affected by this rule and why they would want to support it. 
Consumers purchasing Colorado Area No. 2 potatoes will benefit from 
this rule by continuing to have available a stable supply that is of 
consistent quality and of good marketable size. Although prices to 
consumers for the slightly larger potatoes may be higher, prices at 
retail are affected by many variables. The economic impact of this 
rule, which affects only a small portion of the total number of 
potatoes available in the fresh market, would likely be insignificant 
to the consumer, while significantly beneficial to the producers of 
such potatoes.
    Based on the comments received, no changes will be made to the rule 
as proposed.
    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 matter 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.

List of Subjects in 7 CFR Part 948

    Marketing Agreements, Potatoes, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 948 is 
amended as follows:

PART 948--IRISH POTATOES GROWN IN COLORADO

    1. The authority citation for 7 CFR part 948 continues to read as 
follows:

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


    2. Section 948.386 is amended by revising the introductory text and 
paragraph (a) to read as follows:


Sec. 948.386  Handling regulation.

    No person shall handle any lot of potatoes grown in Area No. 2 
unless such potatoes meet the requirements of paragraphs (a), (b), and 
(c) of this section, or unless such potatoes are handled in accordance 
with paragraphs (d) and (e), or (f) of this section.
    (a) Minimum grade and size requirements. (1) Round varieties, U.S. 
No. 2, or better grade, 2 inches minimum diameter.
    (2) All other varieties. U.S. No. 2, or better grade, 2 inches 
minimum diameter or 4 ounces minimum weight: Provided, That the Russet 
Burbank, Russet Norkotah, and Silverton Russet varieties shall be 1\7/
8\ inches minimum diameter.
    (3) All varieties. Size B, if U.S. No. 1 grade.
    (4) All varieties. 1-inch minimum diameter to 1\3/4\ inches maximum 
diameter, if at least U.S. No. 1 grade.
    (5) None of the above categories of potatoes identified in 
paragraphs (a)(1) through (a)(4) of this section may be commingled in 
the same bag or other container.
* * * * *

    Dated: June 10, 2002.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 02-15064 Filed 6-13-02; 8:45 am]
BILLING CODE 3410-02-P