[Federal Register Volume 70, Number 14 (Monday, January 24, 2005)]
[Proposed Rules]
[Pages 3313-3315]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-1178]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
 ========================================================================
 

  Federal Register / Vol. 70, No. 14 / Monday, January 24, 2005 / 
Proposed Rules  

[[Page 3313]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 945

[Docket No. FV05-945-1 PR]


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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

SUMMARY: This proposed rule would relax the minimum size requirement 
for U.S. No. 2 grade round potatoes handled under the marketing order 
for Idaho-Eastern Oregon potatoes. The current size requirement for 
U.S. No. 2 grade round varieties, other than red, is 2 inches minimum 
diameter or 4 ounces minimum weight provided that at least 40 percent 
of the potatoes in each lot shall be 5 ounces or heavier. This rule 
would establish a minimum size requirement of 1\7/8\ inches minimum 
diameter, as is currently in effect for round red varieties, for all 
U.S. No. 2 grade round potatoes. This relaxation was unanimously 
recommended by the Idaho-Eastern Oregon Potato Committee (Committee), 
the agency responsible for local administration of the marketing order 
program in the designated production area. This proposed change is 
intended to improve the marketing of Idaho-Eastern Oregon potatoes and 
increase returns to producers.

DATES: Comments must be received by March 25, 2005.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent to the Docket Clerk, 
Marketing Order Administration Branch, Fruit and Vegetable Programs, 
AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 
20250-0237; Fax: (202) 720-8938; E-mail: [email protected]; or 
Internet: http://www.regulations.gov. Comments should reference the 
docket number and the date and page number of this issue of the Federal 
Register and will be 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: Barry Broadbent, Marketing Specialist, 
Northwest Marketing Field Office, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, 1220 SW., Third 
Avenue, Suite 385, Portland, OR 97204; Telephone: (503) 326-2724, Fax: 
(503) 326-7440; or George J. 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 proposed rule is issued under Marketing 
Agreement 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 of Agriculture (USDA) is issuing this rule in 
conformance with Executive Order 12866.
    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This rule is not intended to have retroactive 
effect. This proposal 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. A 
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 proposed rule would relax the minimum size requirement for 
U.S. No. 2 grade round potatoes handled under the order. The current 
requirement for U.S. No. 2 grade round varieties, other than red-
skinned, is 2 inches minimum diameter or 4 ounces minimum weight, 
provided that at least 40 percent of the potatoes in each lot shall be 
5 ounces or heavier. This rule would establish a minimum size 
requirement of 1\7/8\ inches minimum diameter, as is currently in 
effect for round red-skinned varieties, for all U.S. No. 2 grade round 
potatoes.
    Sections 945.51 and 945.52 of the order provide authority for the 
establishment and modification of grade, size, quality, and maturity 
regulations applicable to the handling of potatoes.
    Section 945.341 establishes minimum grade, size, and maturity 
requirements for potatoes handled subject to the order. Current 
requirements provide that round red-skinned varieties that grade U.S. 
No. 2 shall have a minimum diameter of 1\7/8\ inches. All other U.S. 
No. 2 grade potatoes are required to meet a 2 inches minimum diameter 
or 4 ounce minimum weight requirement, provided that at least 40 
percent of the potatoes in each lot shall be 5 ounces or heavier. 
Section 945.341 also allows potatoes that are U.S. No. 1 grade to meet 
a less stringent size B requirement (1\1/2\ inches minimum and 2\1/4\ 
inches maximum) as specified in the United States Standards for Grades 
of Potatoes (7 CFR 51.1540-51.1566).
    At its meeting on November 4, 2004, the Committee unanimously 
recommended reducing the minimum size requirement for all varieties of 
U.S.

[[Page 3314]]

No. 2 grade round potatoes to 1\7/8\ inches minimum diameter.
    Committee members stated that round potato production, particularly 
for non-red varieties, has been increasing in recent years and now 
makes up a significant percentage of total round potato production. In 
the past, red-skinned varieties were essentially the only round 
varieties produced within the production area. Some new round varieties 
that have been introduced have skin colors such as white, yellow, gold, 
purple, blue, and pink.
    Committee members believe that it is important that the handling 
regulations be changed to recognize the significant increase in the 
production of non-red varieties of round potatoes. They believe that 
relaxing the minimum size requirement for U.S. No. 2 grade round 
potatoes would enable handlers to market a larger portion of the crop 
in fresh market outlets and meet the needs of buyers.
    According to the Committee, quality assurance is very important to 
the industry and to its customers. 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 important to promote sales. Buyers have 
indicated that the proposed 1\7/8\ inches minimum diameter for all 
varieties of round potatoes is a desirable size.
    This proposed change is expected to improve the marketing of Idaho-
Eastern Oregon potatoes and increase returns to producers.
    This rule would have no impact on potato imports covered by section 
608e of the Act.

Initial Regulatory Flexibility Analysis

    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 52 handlers of Idaho-Eastern Oregon 
potatoes who are subject to regulation under the order and about 900 
potato producers in the regulated area. Small agricultural service 
firms, which include potato handlers, 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 $750,000.
    Based on a three-year average fresh potato production of 33,767,000 
hundredweight as calculated from Committee records, a three-year 
average of producer prices of $5.18 per hundredweight reported by the 
National Agricultural Statistics Service, and 900 Idaho-Eastern Oregon 
potato producers, the average annual producer revenue is approximately 
$194,349. It can be concluded, therefore, that a majority of these 
producers would be classified as small entities.
    In addition, based on Committee records and 2003-04 f.o.b. shipping 
point prices ranging from $4.00 to $28.00 per hundredweight reported by 
USDA's Market News Service, most of the Idaho-Eastern Oregon potato 
handlers do not ship over $5,000,000 worth of potatoes. In view of the 
foregoing, it can be concluded that a majority of the handlers would be 
classified as small entities as defined by the SBA.
    This proposed rule would establish a minimum size requirement of 
1\7/8\ inches minimum diameter, as is currently in effect for round 
red-skinned varieties, for all U.S. No. 2 grade round potatoes. The 
current size requirement for U.S. No. 2 grade round varieties, other 
than red, is 2 inches minimum diameter or 4 ounces minimum weight 
provided that at least 40 percent of the potatoes in each lot shall be 
5 ounces or heavier.
    Committee members believe that it is important that the handling 
regulations be changed to recognize the significant increase in the 
production of non-red varieties of round potatoes. They believe that 
relaxing the minimum size requirement for U.S. No. 2 grade round 
potatoes would enable handlers to market a larger portion of the crop 
in fresh market outlets and meet the needs of buyers. Buyers have 
indicated that the proposed 1\7/8\ inches minimum diameter is a 
desirable size. This proposed change is expected to improve the 
marketing of Idaho-Eastern Oregon potatoes and increase returns to 
producers.
    Authority for this proposed rule is provided in Sec. Sec.  945.51 
and 945.52 of the order.
    At the November 4 meeting, the Committee discussed the impact of 
this change on handlers and producers. The proposal is a relaxation of 
current regulation and, as such, should either generate a positive 
impact or no impact on industry participants. The Committee did not 
foresee a situation in which this proposed change would negatively 
impact either handlers or producers.
    Round type potatoes are produced and handled by only a small 
percentage of the industry. The predominant producing regions are 
centered around the American Falls, Idaho Falls, and Blackfoot areas of 
Idaho. Acreage is approximately 6,000 to 7,000 acres, which represents 
only about 2 percent of the production area's 355,000 acres planted to 
potatoes in 2004.
    Round potato production is increasing within the production area. 
Shipments for the 2003-2004 season were approximately 300,000 
hundredweight. The Committee estimates that round potato shipments for 
the 2004-2005 crop season could approach 800,000 hundredweight. The 
Committee reported that one round yellow-skinned variety might account 
for 500,000 hundredweight. Through week seventeen of the 2004-2005 
season, reported shipments of round potatoes are up 54 percent from the 
prior year.
    The Committee reported that smaller size round potatoes of good 
quality receive premium prices. This contention is consistent with USDA 
Market News Service reports. Market News does not report on round type 
potatoes in the Idaho-E. Oregon area, but does report on other round 
potato producing regions. It would be reasonable to expect price trends 
between production areas to move together, given that the regions would 
compete with each other for sales in the domestic market.
    Relaxing the size requirement would allow producers and handlers of 
non-red U.S. No. 2 grade round potatoes to market a greater percentage 
of their crop under the order. This should lead to increased total net 
returns for those firms. The benefits derived from this rule change are 
not expected to be disproportionately greater or less for small 
handlers or producers than for larger entities.
    The Committee discussed alternatives to this proposed change. One 
alternative included making no change at all to the current regulation. 
The Committee did not believe this alternative would meet the needs of 
buyers or benefit the industry. Another alternative discussed

[[Page 3315]]

was to allow round potatoes to be exempted from regulations under 
Certificate of Privilege provisions provided within the order. This 
option also was rejected because it would allow lower quality potatoes 
to be shipped to the fresh market. Lastly, the Committee considered 
further relaxing the size requirement for all round potatoes below the 
1\7/8\ inches minimum diameter. The Committee believed that relaxing 
the minimum size requirement for U.S. No. 2 round potatoes below 1\7/8\ 
inches would result in buyer dissatisfaction. Producers and handlers 
who wish to ship smaller round potatoes may do so by conforming to the 
U.S. No. 1 grade standard.
    With only a small amount of the total potato crop in the production 
area expected to be affected by relaxing the size requirement, the 
Committee believes that the proposed change to relax the size 
requirement of non-red-skinned U.S. No. 2 round potatoes to a 1\7/8\ 
inches minimum diameter would provide the greatest amount of benefit to 
the industry with the least amount of cost.
    This proposed rule would relax the size requirements under the 
marketing order. Accordingly, this action would 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.
    The USDA has not identified any relevant Federal rules that 
duplicate, overlap, or conflict with this proposed rule. However, as 
previously stated, potatoes handled under the order have to meet 
certain requirements set forth in the United States Standards for 
Potatoes (7 CFR 51.1540-51.1566) issued under the Agricultural 
Marketing Act of 1946 (7 CFR part 1621, et seq.). Standards issued 
under the Agricultural Marketing Act of 1946 are otherwise voluntary.
    Further, the Committee's meeting was widely publicized throughout 
the potato industry, and all interested persons were invited to attend 
the meeting and participate in Committee deliberations. Like all 
Committee meetings, the November 4, 2004, 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 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.
    A 60-day comment period is provided to allow interested persons to 
respond to this proposal. All written comments timely received will be 
considered before a final determination is made on this matter.

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 proposed to be 
amended as follows:

PART 945--IRISH POTATOES GROWN IN CERTAIN DESIGNATED COUNTIES IN 
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.


Sec.  945.341  [Amended]

    2. In Sec.  945.341, paragraph (a)(2)(i), remove the words ``Round 
red varieties.'' and add in their place ``Round varieties.''

    Dated: January 13, 2005.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 05-1178 Filed 1-21-05; 8:45 am]
BILLING CODE 3410-02-P