[Federal Register Volume 76, Number 112 (Friday, June 10, 2011)]
[Rules and Regulations]
[Pages 33967-33969]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-14431]



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 Rules and Regulations
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  Federal Register / Vol. 76, No. 112 / Friday, June 10, 2011 / Rules 
and Regulations  

[[Page 33967]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 953

[Doc. No. AMS-FV-11-0027; FV11-953-1 IR]


Irish Potatoes Grown in Southeastern States; Suspension of 
Marketing Order Provisions

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim rule with request for comments.

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SUMMARY: This rule suspends the marketing order for Irish potatoes 
grown in Southeastern states (order), and the rules and regulations 
implemented thereunder, through March 1, 2014. The order regulates the 
handling of Irish potatoes grown in Southeastern states and is 
administered locally by the Southeastern Potato Committee (Committee). 
The Committee believes advances in farming technology and production 
quality have reduced the need for the order. When considering the costs 
associated with continuing the order, the Committee unanimously 
recommended that the order be suspended.

DATES: Effective June 13, 2011 through March 1, 2014; comments received 
by August 9, 2011 will be considered prior to adoption as a final rule.

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; or Internet: http://www.regulations.gov. All comments should reference the document number 
and the date and 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.regulations.gov. All comments submitted in response to this rule 
will be included in the record and will be made available to the 
public. Please be advised that the identity of the individuals or 
entities submitting the comments will be made public on the Internet at 
the address provided above.

FOR FURTHER INFORMATION CONTACT: Dawana J. Clark, Marketing Specialist, 
or Kenneth G. Johnson, Regional Manager, DC Marketing Field Office, 
Marketing Order Administration Branch, Fruit and Vegetable Programs, 
AMS, USDA; Telephone: (301) 734-5243, Fax: (301) 734-5275, or E-mail: 
[email protected] or [email protected].
    Small businesses may request information on complying with this 
regulation by contacting Laurel May, 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 rule is issued under Marketing 
Agreement No. 104 and Marketing Order No. 953, both as amended (7 CFR 
part 953), regulating the handling of Irish potatoes grown in 
Southeastern states, 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 rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule is not intended to have retroactive effect.
    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 rule suspends the order and all provisions prescribed 
thereunder through March 1, 2014. The suspension includes, but is not 
limited to, grade, size, quality, assessment, reporting, and inspection 
requirements. The Committee believes advances in farming technology and 
production quality have reduced the need for the order. When 
considering the costs associated with continuing the order, the 
Committee agreed that the order should be suspended. The Committee met 
on February 17, 2011, and unanimously recommended suspending the order 
for three years, through to March 1, 2014.
    The order was promulgated in 1948, and regulates the handling of 
Irish potatoes grown in designated counties of Virginia and North 
Carolina. The order has been used to provide the industry with grade, 
size, quality, and inspection requirements. The order also authorizes 
reporting and recordkeeping functions required for the operation of the 
order. The program is funded by assessments imposed on handlers.
    Over the past several years, the Southeastern potato industry has 
been in decline, with acreage and production trending downward. 
Production has fallen from an estimated 1,600,000 hundredweight for the 
1996-97 season, to a current estimate of 600,000 hundredweight for the 
2010-11 season. In 1996, there were approximately 150 growers and 60 
handlers in the production area. Currently, there are approximately 20 
growers and 10 handlers covered in the production area.
    The Committee met February 17, 2011, to discuss the continued need 
for the order. During the discussion, several members mentioned that 
the order was promulgated at a time when the industry was having an 
issue with the quality of potatoes being produced. The purpose of the 
order was to establish standards to improve the quality of marketed 
product.

[[Page 33968]]

    Since the implementation of the order, the quality of Southeastern 
potatoes has greatly improved. Advances in farm machinery and 
improvements in the grading process have helped to ensure that only 
quality product is being shipped to buyers. Concerns the industry 
previously had prior to implementation of the order are no longer an 
issue, and for the past several years, some industry members have 
started questioning the continued need for the order and its associated 
costs.
    At the meeting, members were informed that to maintain the order, 
the Committee would have to incur some additional administrative 
expenses. To cover these costs, the Committee would need to increase 
the assessment rate. Committee members agreed that the industry would 
not support an assessment increase.
    In addition to the assessment costs, comments were also made 
regarding the cost of inspection required under the order. It was 
stated that some industry members see the cost of mandatory inspection 
as an unnecessary burden. Other Committee members expressed concern 
over whether inspection would still be available if the order was 
suspended. This issue was resolved when members were assured that 
inspection would still be available for those who request it, 
regardless of the status of the order.
    Based on discussion at the meeting, and on letters from growers who 
were not able to attend, changes in the industry and industry practices 
have diminished the need for the order. Further, there are concerns 
regarding the costs associated with maintaining the order, and no 
industry support for raising assessments to cover increasing 
administrative costs. Therefore, the Committee unanimously recommended 
suspending the order for three years, through to March 1, 2014.
    The Committee recommended suspension of the order, not termination, 
to allow the industry an opportunity to review the effectiveness of 
operating without order requirements. If problems develop, Committee 
members wanted the industry to have the alternative of reactivating the 
order. During the suspension period, the industry will be able to 
monitor the Southeastern potato industry to determine if quality issues 
reoccur. A meeting will be held prior to March 1, 2014, to review the 
state of the industry and determine whether to continue the suspension, 
or to reactivate or terminate the order.
    It is hereby determined that Federal Marketing Order No. 953, and 
the rules and regulations issued thereunder, do not tend to effectuate 
the declared policy of the Act. This action suspends, through March 1, 
2014, the provisions of Federal Marketing Order No. 953, and the rules 
and regulations issued thereunder, including but not limited to: 
Provisions of the order dealing with the establishment and the 
responsibilities of the Committee; provisions of the order dealing with 
expenses and the collection of assessments; all rules and regulations; 
and, all information collection and reporting requirements.

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), 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 the rules issued thereunder, are unique in 
that they are brought about through group action of essentially small 
entities acting on their own behalf.
    There are approximately 10 handlers of Irish potatoes grown in 
Southeastern states who are subject to regulation under the order and 
approximately 20 potato producers in the regulated area. Small 
agricultural service firms are defined by the Small Business 
Administration (SBA) as those having annual receipts of less than 
$7,000,000, and small agricultural producers are defined as those 
having annual receipts of less than $750,000 (13 CFR 121.201).
    Using AMS Market News Service reported prices, the average f.o.b. 
price for Southeastern potatoes for the 2010 marketing season was 
around $20 per hundredweight. The Committee estimated production for 
the 2010-11 season at approximately 600,000 hundredweight of potatoes. 
Based on this information, average annual receipts for handlers would 
be less than $7,000,000. Information provided by the National 
Agricultural Statistics Service indicates that the average producer 
price for Irish potatoes grown in North Carolina and Virginia in 2010 
was approximately $11.63 per hundredweight. Considering estimated 
production, average producer revenue would be about $350,000 for the 
2010-11 season. Therefore, the majority of Southeastern potato handlers 
and producers may be classified as small entities.
    This rule suspends the order and the rules and regulations 
implemented thereunder through March 1, 2014. The Committee believes 
advances in farming technology and production quality have reduced the 
need for the order. When considering the costs associated with 
continuing the order, the Committee unanimously recommended that the 
order be suspended. The Committee made this recommendation on February 
17, 2011. Authority for this action is provided in section 8c(16)(A) of 
the Act.
    Suspension of the order and its corresponding regulations relieves 
handlers of quality, inspection, and assessment burdens during the 
suspension period. Also, handler reports will not be required. 
Additionally, growers may be relieved of some costs, such as assessment 
expenses, which are often passed onto them by handlers. Suspension of 
the order is therefore expected to reduce the regulatory burden on 
handlers and growers of all sizes.
    The Committee considered alternatives to this rule, including 
maintaining the order or terminating it rather than suspending. Support 
was not shown for either of these options. Therefore these alternatives 
were rejected.
    This rule will not impose any additional reporting or recordkeeping 
requirements on either small or large Southeastern 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. In addition, USDA 
has not identified any relevant Federal rules that duplicate, overlap 
or conflict with this rule.
    AMS is committed to complying with the E-Government Act, to promote 
the use of the Internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.
    Further, the Committee's meeting was widely publicized throughout 
the Southeastern potato industry and all interested persons were 
invited to attend the meeting and participate in Committee 
deliberations. Like all Committee meetings, the February 17, 2011 
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 comments on this interim rule, including 
the regulatory and informational impacts of this action on small 
businesses.

[[Page 33969]]

    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/MarketingOrdersSmallBusinessGuide. Any questions 
about the compliance guide should be sent to Laurel May at the 
previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    This rule invites comments on the suspension of all provisions 
prescribed under the marketing order for Irish potatoes grown in 
Southeastern states. Any comments received will be considered prior to 
finalization of this rule.
    After consideration of all relevant material presented, including 
the Committee's recommendation, and other information, it is found that 
the order suspended by this interim rule, as hereinafter set forth, 
does not tend to effectuate the declared policy of the Act.
    Pursuant to 5 U.S.C. 553, it is also found and determined upon good 
cause that it is impracticable, unnecessary, and contrary to the 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) This action suspends the order and the rules and 
regulations thereunder; (2) this change will help the Committee and 
industry avoid any additional costs associated with the order; (3) 
handlers are aware of this action, which was unanimously recommended at 
a public meeting, and interested parties had an opportunity to provide 
input; and (4) this rule provides a 60-day comment period and any 
comments received will be considered prior to finalization of this 
rule.

List of Subjects in 7 CFR Part 953

    Marketing agreements, Potatoes, Reporting and recordkeeping 
requirements.

PART 953--[SUSPENDED]

0
For the reasons set forth in the preamble, under the authority of 7 
U.S.C. 601-674, 7 CFR part 953 is suspended effective June 13, 2011 
through March 1, 2014.

    Dated: June 6, 2011.
Ellen King,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2011-14431 Filed 6-9-11; 8:45 am]
BILLING CODE 3410-02-P