[Federal Register Volume 71, Number 44 (Tuesday, March 7, 2006)]
[Rules and Regulations]
[Pages 11294-11296]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-2117]


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

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1207

[Doc. No. FV-05-702 IFR]


Amendments to the Potato Research and Promotion Plan

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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

SUMMARY: The purpose of this rule is to increase the assessment rate on 
handlers and importers of potatoes from 2 cents to 2.5 cents per 
hundredweight. The increase is authorized under the Potato Research and 
Promotion (Plan). The Plan is authorized by the Potato Research and 
Promotion Act (Act). In order to sustain the three major programs 
currently conducted by the National Potato Promotion Board (Board), 
International Marketing, Domestic Marketing (which includes retail 
marketing), and a nutrition campaign at their present levels beyond 
June 2006, additional revenue is required.

DATES: This rule is effective March 8, 2006. Comments received by May 
8, 2006 will be considered prior to finalization of this rule.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule to: Docket Clerk, Research and Promotion Branch, 
Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW., 
Stop 0244, Washington, DC 20250-0244; fax: (202) 205-2800, e-mail: 
[email protected].; or Internet: http://www.regulations.gov. All 
comments should reference the docket number, the date and the page 
number of this issue of the Federal Register and will be made 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/rpb.html.

FOR FURTHER INFORMATION CONTACT: Jeanette Palmer, Research and 
Promotion Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 
Independence Avenue, SW., Stop 0244, Washington, DC 20250-0244; 
telephone (202) 720-5976 or fax (202) 205-2800.

SUPPLEMENTARY INFORMATION: This rule is issued under the Potato 
Research and Promotion (Plan) [7 CFR part 1207], which became effective 
March 9, 1972. The Plan is authorized by the Potato Research and 
Promotion Act (Act) [7 U.S.C. 2611-2627].

Executive Order 12988

    This rule has been reviewed under the 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 the Act, a person subject to the plan may file a petition 
with the Secretary of Agriculture (Secretary) stating that such plan, 
any provision of such plan, or any obligation imposed in connection 
with such plan is not in accordance with law; and requesting a 
modification of the plan or an exemption from the plan. Such person is 
afforded the opportunity for a hearing on the petition. After the 
hearing, the Secretary will rule on the petition. The Act provides that 
the district court of the United States in any district in which such 
person is an inhabitant, or has principal place of business, has 
jurisdiction to review the Secretary's ruling on the petition, provided 
that a complaint is filed within 20 days after the date of entry of the 
ruling.

Executive Order 12866

    The Office of Management and Budget (OMB) has waived the review 
process required by Executive Order 12866 for this action.

Regulatory Flexibility Act and Paperwork Reduction Act

    In accordance with the Regulatory Flexibility Act (RFA) [5 U.S.C. 
601 et seq.], the Agricultural Marketing Service

[[Page 11295]]

has examined the impact of this rule on small entities. The purpose of 
the RFA is to fit regulatory actions to scale of businesses subject to 
such action so that small businesses will not be disproportionately 
burdened.
    There are approximately 1,353 handlers, 5,223 producers, and 300 
importers of potatoes and potato products who are subject to the 
provisions of the Plan. The Small Business Administration (SBA) defines 
small agricultural businesses, which includes handlers and importers, 
as those whose annual receipts are less than $6 million, and small 
agricultural producers are defined as those having annual receipts of 
no more than $750,000 annually. Most of the producers and handlers, and 
some of the importers would be classified as small businesses under the 
criteria established by the SBA [13 CFR 121.201].
    Currently, potato handlers and importers pay a mandatory assessment 
of 2 cents per hundredweight. Assessments under the program are used to 
fund promotional campaigns and to conduct research in the areas of U.S. 
marketing, and international marketing and to enable the Board to 
exercise its duties in accordance with the Plan. The 2 cent assessment 
generates about $8.5 million in annual revenues. The current assessment 
became effective when the Plan was amended in May 1984, to increase the 
maximum assessment rate from 1 cent per hundredweight to 0.5 percent of 
the previous 10-year average price received by growers. The Plan is 
administered by the National Potato Promotion Board (Board) under USDA 
supervision.
    In order to sustain the three major programs currently conducted by 
the Board, International Marketing, Domestic Marketing (which includes 
retail marketing), and a nutrition campaign at their present levels 
beyond June 2006, additional revenue is required. The Board approved 
this increase in the assessment rate at its March 19, 2005, annual 
meeting. This increase is consistent with section 1207.342(a) of the 
Plan, which provides such assessments shall be levied at a rate fixed 
by the Secretary which shall not exceed one-half of one per centum of 
the immediate past ten calendar years United States average price 
received for potatoes by growers as reported by the Department of 
Agriculture. Further, not more than one such assessment may be 
collected on any potatoes.
    The \1/2\ cent assessment rate increase will bring in an estimated 
$1.5 to $2 million in new revenue, depending upon production levels. 
For 2005, domestic production was 420,879,000 hundredweight and imports 
represented 59,683,000 hundredweight. The new rate would allow the 
Board to maintain its investment in the nutrition campaign and 
marketing programs. It is estimated that the Board would collect 
approximately $10 million in assessments with a 2.5 cent per 
hundredweight assessment rate. Any additional costs should be offset by 
the benefits to be derived from the research and promotion programs. 
The Board has determined that the \1/2\ cent increase in assessments 
would cost potato growers less than one-half of one percent (0.005%) of 
total production costs or approximately $1.75 per acre based on average 
yields.
    Alternatives were also considered by the Board, which included 
cutting back funding of marketing programs and the nutrition campaign, 
and eliminating the nutrition campaign. All of the alternatives were 
rejected by the Board because it was determined that by the continued 
funding of the marketing programs and the nutrition campaign would help 
increase the demand of potatoes. In order to continue to fund these 
programs, the Board needs to increase the assessment rate by \1/2\ cent 
per hundredweight.
    There are no relevant Federal rules that duplicate, overlap, or 
conflict with this rule.
    In accordance with the OMB regulation [5 CFR part 1320] which 
implements the Paperwork Reduction Act of 1995 [44 U.S.C. Chapter 35], 
the information collection and recordkeeping requirements that are 
imposed by the Plan have been approved previously under OMB control 
number 0581-0093. This rule does not result in a change to the 
information collection and recordkeeping requirements previously 
approved.
    We have performed this initial Regulatory Flexibility Analysis 
regarding the impact of this amendment to the Plan on small entities, 
and we invite comments concerning potential effects of the proposed 
amendment.

Background

    The Plan became effective on March 9, 1972, after a national 
referendum among producers. Under the Plan, handlers and importers are 
assessed 2 cents per hundredweight. No assessment shall be levied on 
potatoes grown in the 50 States of the United States by producers of 
less than 5 acres of potatoes. Importers pay assessments on all 
tablestock potatoes imported for ultimate human consumption and on all 
imported seed potatoes. The program currently generates about $8.5 
million in annual revenues, which is administered by the Board under 
USDA supervision. The Board administers a national program of research 
development, advertising, and promotion designed to strengthen 
potatoes' competitive position and to maintain and expand domestic and 
foreign markets for potatoes and potato products.
    Currently, the assessment rate is 2 cents per hundredweight levied 
on all potatoes produced within the 50 States of the United States and 
on imports of potatoes. In order to sustain the three major programs 
being conducted by the Board, International Marketing, Domestic 
Marketing (which includes retail marketing), and a nutrition campaign 
at their present levels beyond June 2006, additional revenue to the 
Board is required. The \1/2\ cent assessment rate increase will bring 
in an estimated $1.5 to $2 million in new revenue, depending upon 
production levels. For 2005, domestic production was 420,879,000 
hundredweight and imports represented 59,683,000 hundredweight. The new 
rate would allow the Board to maintain its investment in the nutrition 
campaign and marketing programs. It is estimated that the Board would 
collect approximately $10 million in assessments with a 2.5 cent per 
hundredweight assessment rate. Any additional cost should be offset by 
the benefits to be derived from research and promotion programs.
    In addition, the Board, whose members represent all potato 
producing states as well as importers, voted to increase the assessment 
rate at its March 19, 2005, annual meeting. Eighty-eight percent of the 
Board voted to increase the assessment rate. The majority of those that 
opposed the increase in assessment rate had a number of reasons, 
including a view that a State program is preferable over a national 
program and concern about the impact on growers.
    This action will amend the rules and regulations issued under the 
Plan. This action will increase the assessment rate by \1/2\ cent. The 
rate would increase from 2 cents to 2.5 cents per hundredweight. The 
2.5 cents is within the formula allowed by section 1207.342 (a) of the 
Plan which states the funds to cover the Board's expenses shall be 
acquired by the levying of assessments upon handler and importers as 
designated in regulations recommended by the Board and issued by the 
Secretary. Such assessments shall be levied at a rate fixed by the 
Secretary which shall not exceed one-half of one per centum of

[[Page 11296]]

the immediate past ten calendar years United States average price 
received for potatoes by growers as reported by the Department of 
Agriculture. Further, not more than one such assessment may be 
collected on any potatoes. The average price was determined to be $5.88 
using the years 1994-2003 and one-half of one per centum is 2.94 cents. 
Accordingly, the Board's recommendation of 2.5 cents is within the 
formula allowed by section 1207.342(a).
    Pursuant to 5 U.S.C. 553, it is also found and determined upon good 
cause that it is impracticable, unnecessary, and contrary to public 
interest to give preliminary notice prior to putting this rule into 
effect and that good cause exists for not postponing the effective date 
of this rule until 30 days after publication in the Federal Register 
because: (1) The increase in the assessment rate should correspond as 
closely as practicable with the new 2006 crop; (2) the Board currently 
needs additional funding to maintain its marketing programs and 
nutrition campaign; and (3) a sixty-day period is provided for 
interested persons to comment.

List of Subjects in 7 CFR Part 1207

    Administrative practice and procedure, Advertising, Consumer 
information, Marketing agreements, Potatoes, Promotion, Reporting and 
recordkeeping requirements.


0
For the reasons set forth in the preamble, 7 CFR part 1207 is amended 
as follows:

PART 1207--POTATO RESEARCH AND PROMOTION PLAN

0
1. The authority citation for part 1207 continues to read as follows:

    Authority: 7 U.S.C. 2611-2627.


0
2. In Sec.  1207.510, paragraphs (a)(1), (b)(1) and the table 
immediately following paragraph (b)(3) are revised to read as follows:


Sec.  1207.510  Levy of assessments.

    (a) * * * (1) An assessment rate of 2.5 cents per hundredweight 
shall be levied on all potatoes produced within the 50 States of the 
United States.
* * * * *
    (b) * * * (1) An assessment rate of 2.5 cents per hundredweight 
shall be levied on all tablestock potatoes imported into the United 
States for ultimate consumption by humans and all seed potatoes 
imported into the United States. An assessment rate of 2.5 cents per 
hundredweight shall be levied on the fresh weight equivalents of 
imported frozen or processed potatoes for ultimate consumption by 
humans. The importer of imported tablestock potatoes, potato products, 
or seed potatoes shall pay the assessment to the Board through the U.S. 
Customs Service and Border Protection at the time of entry or 
withdrawal for consumption of such potatoes and potato products into 
the United States.
* * * * *
    (3) * * *

------------------------------------------------------------------------
                                                          Assessment
 Tablestock potatoes, frozen or processed potatoes, --------------------
                 and seed  potatoes                  cents/cwt  cents/kg
------------------------------------------------------------------------
0701.10.0020.......................................       2.50    0.0551
0701.10.0040.......................................       2.50    0.0551
0701.90.1000.......................................       2.50    0.0551
0701.90.5010.......................................       2.50    0.0551
0701.90.5020.......................................       2.50    0.0551
0701.90.5030.......................................       2.50    0.0551
0701.90.5040.......................................       2.50    0.0551
0710.10.0000.......................................       5.00    0.1103
2004.10.4000.......................................       5.00    0.1103
2004.10.8020.......................................       5.00    0.1103
2004.10.8040.......................................       5.00    0.1103
0712.90.3000.......................................       3.93    0.0866
2005.20.0070.......................................      17.86    0.3936
1105.10.0000.......................................      17.86    0.3936
1105.20.0000.......................................      17.86    0.3936
2005.20.0040.......................................      17.86    0.3936
2005.20.0020.......................................      10.20    0.2250
1108.13.0010.......................................      22.50    0.4961
------------------------------------------------------------------------


    Dated: February 28, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 06-2117 Filed 3-6-06; 8:45 am]
BILLING CODE 3410-02-P