[Federal Register Volume 70, Number 79 (Tuesday, April 26, 2005)]
[Rules and Regulations]
[Pages 21328-21330]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-8246]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 945

[Docket No. FV05-945-1 FR]


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule relaxes the minimum size requirement for all U.S. 
No. 2 grade non-red round potatoes handled under the marketing order 
for Idaho-Eastern Oregon potatoes to 1\7/8\ inches minimum diameter. 
This relaxation in the handling regulations 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 change is intended to improve the 
marketing of Idaho-Eastern Oregon potatoes and increase returns to 
producers.

EFFECTIVE DATE: April 27, 2005.

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 final 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 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. 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 final rule relaxes the minimum size requirement for all U.S. 
No. 2 grade non-red round potatoes handled under the order to 1\7/8\ 
inches minimum diameter. Currently, U.S. No. 2 grade round red-skinned 
potato varieties have to meet this requirement. The other U.S. No. 2 
round varieties have to be 2 inches minimum diameter or 4 ounces 
minimum weight, provided that at least 40 percent of the potatoes in 
each lot have to be 5 ounces or heavier.
    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. In addition to the current minimum size 
requirement specifications mentioned in the previous paragraph, Sec.  
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. 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. Non-red 
round potato varieties now make 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 1\7/8\ inches minimum diameter for all varieties of 
round potatoes is a desirable size.
    This change is expected to improve the marketing of Idaho-Eastern 
Oregon potatoes and increase returns to producers.
    This rule has no impact on potato imports covered by section 608e 
of the Act.

Final 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.

[[Page 21329]]

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 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 (SBA) (13 CFR 121.201) as those having annual receipts 
of less than $6,000,000, 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 $6,000,000 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 final rule establishes a minimum size requirement of 1\7/8\ 
inches minimum diameter for all U.S. No. 2 grade round potatoes. 
Currently, the minimum 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 must be 5 ounces or heavier. The red-skinned round varieties 
have to be 1\7/8\ inches minimum diameter.
    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 will 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 1\7/8\ inches minimum diameter is a desirable size. 
This change is expected to improve the marketing of Idaho-Eastern 
Oregon potatoes and increase returns to producers.
    Authority for this action is provided in Sec. Sec.  945.51 and 
945.52 of the order.
    At the November 4, 2004, meeting, the Committee discussed the 
impact of this change on handlers and producers. This action is a 
relaxation of the handling regulations 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 change will 
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 season could approach 800,000 hundredweight. The 
Committee reported that one round yellow-skinned variety might account 
for 500,000 hundredweight. Through week 33 of the 2004-2005 season, 
reported shipments of round potatoes were up 69 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 will 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 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 change. One 
alternative included making no change at all to the regulations. The 
Committee did not believe this alternative would meet the needs of 
buyers or benefit the industry. Another alternative discussed 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 relaxing the size requirement of non-red-
skinned U.S. No. 2 round potatoes to a 1\7/8\ inches minimum diameter 
will provide the greatest amount of benefit to the industry with the 
least amount of cost.
    This final rule relaxes minimum size requirements under the 
marketing order. Accordingly, this action 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.
    As noted in the initial regulatory flexibility analysis, USDA has 
not identified any relevant Federal rules that duplicate, overlap, or 
conflict with this rule. However, as previously stated, potatoes 
handled under the order must 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 U.S.C. 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

[[Page 21330]]

meeting and all entities, both large and small, were able to express 
their 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 January 24, 2005 (70 FR 3313). Copies of the rule were 
mailed or sent via facsimile to all Committee members and potato 
handlers. Finally, the rule was made available through the Internet by 
the Office of the Federal Register and USDA. A 60-day comment period 
ending March 25, 2005, was provided to allow interested persons to 
respond to the proposal. No comments were received.
    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.
    After consideration of all relevant material 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.
    It is further found that good cause exists for not postponing the 
effective date of this rule until 30 days after publication in the 
Federal Register (5 U.S.C. 553) because handlers are already shipping 
round potatoes from the 2004-2005 crop and handlers want to take 
advantage of the relaxation as soon as possible. Further, handlers are 
aware of this rule, which was recommended at a public meeting. Also, a 
60-day comment period was provided for in the proposed rule and no 
comments were received.

List of Subjects in 7 CFR Part 945

    Marketing agreements, Potatoes, Reporting and recordkeeping 
requirements.


0
For the reasons set forth above, 7 CFR part 945 is amended as follows:

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

0
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]

0
2. In Sec.  945.341, paragraph (a)(2)(i), remove the words ``Round red 
varieties.'' and add in their place ``Round varieties.''

    Dated: April 20, 2005.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 05-8246 Filed 4-25-05; 8:45 am]
BILLING CODE 3410-02-P