[Federal Register Volume 78, Number 115 (Friday, June 14, 2013)]
[Rules and Regulations]
[Pages 35743-35746]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-14175]



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  Federal Register / Vol. 78, No. 115 / Friday, June 14, 2013 / Rules 
and Regulations  

[[Page 35743]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 948

[Doc. No. AMS-FV-13-0001; FV13-948-1 IR]


Irish Potatoes Grown in Colorado; Modification of the General 
Cull and Handling Regulation for Area No. 2

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim rule with request for comments.

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

SUMMARY: This interim rule modifies the size requirements for potatoes 
handled under the Colorado potato marketing order, Area No. 2 (order). 
The order regulates the handling of Irish potatoes grown in Colorado 
and is administered locally by the Colorado Potato Administrative 
Committee, Area No. 2 (Committee). This action revises the 1-inch 
minimum to 1\3/4\-inch maximum diameter size allowance for U.S. 
Commercial and better grade potatoes contained in the order's handling 
regulation for Area 2 to \3/4\-inch minimum to 1\5/8\-inch maximum 
diameter. In addition, this action revises the minimum size requirement 
under the order's general cull regulation to \3/4\-inch diameter. As 
required under section 8e of the Agricultural Marketing Agreement Act 
of 1937, this action also revises the size requirements for imported 
round type potatoes, other than red-skinned varieties. This change is 
expected to facilitate the handling and marketing of the Area No. 2 
potato crop, provide producers and handlers with increased returns, and 
offer consumers increased potato purchasing options.

DATES: Effective June 15, 2013; comments received by August 13, 2013 
will be considered prior to issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this interim rule. Comments should be sent to the Docket 
Clerk, Marketing Order and Agreement Division, Fruit and Vegetable 
Program, 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 
interim 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: Barry Broadbent, Marketing Specialist, 
or Gary Olson, Regional Director, Northwest Marketing Field Office, 
Marketing Order and Agreement Division, Fruit and Vegetable Program, 
AMS, USDA; Telephone: (503) 326-2724, Fax: (503) 326-7440, or Email: 
[email protected] or [email protected].
    Small businesses may request information on complying with this 
regulation by contacting Jeffrey Smutny, Marketing Order and Agreement 
Division, Fruit and Vegetable Program, AMS, USDA, 1400 Independence 
Avenue SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-
2491, Fax: (202) 720-8938, or Email: [email protected].

SUPPLEMENTARY INFORMATION: This interim rule is issued under Marketing 
Agreement No. 97 and Marketing 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.''
    This interim rule is also issued under section 8e of the Act, which 
provides that whenever certain specified commodities, including 
potatoes, are regulated under a Federal marketing order, the 
importation of these commodities into the United States is prohibited 
unless they meet the same or comparable grade, size, quality, or 
maturity requirements as those in effect for the domestically produced 
commodities.
    The Department of Agriculture (USDA) is issuing this interim rule 
in conformance with Executive Order 12866.
    This interim rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This interim 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.
    There are no administrative procedures which must be exhausted 
prior to any judicial challenge to the provisions of import regulation 
issued under section 8e of the Act.
    This action modifies the size requirements for potatoes handled 
under the order's general cull regulation and handling regulation for 
Area 2. This interim rule relaxes the 1-inch minimum to 1\3/4\-inch 
maximum size allowance for U.S. Commercial or better grade potatoes 
handled under the order to \3/4\-inch minimum to 1\5/8\-inch maximum 
diameter (Creamer size, as designated in the U.S. Standards for Grades 
of Potatoes). This action also relaxes the minimum size requirement of 
the general cull regulation to \3/4\-inch diameter.
    Prior to this change, the smallest potatoes that could be shipped 
outside the State of Colorado under the order were 1-inch to 1\3/4\-
inch diameter potatoes that met or exceeded the requirements of the 
U.S. Commercial

[[Page 35744]]

grade. Potatoes measuring less than 1-inch were not allowed to be 
shipped outside the State, regardless of grade. This action is a 
relaxation of the order's regulations and will allow shipments of 
Creamer size potatoes (\3/4\-inch to 1\5/8\-inch diameter), if such 
potatoes otherwise meet or exceed the requirements of the U.S. 
Commercial grade. None of the other size requirements contained in the 
handling regulation are impacted by this action. This change was 
unanimously recommended by the Committee at a meeting held on December 
20, 2012.
    Section 948.22 authorizes the issuance of grade, size, quality, 
maturity, pack, and container regulations for potatoes grown in the 
order's production area. Section 948.21 authorizes the modification, 
suspension, or termination of regulations issued pursuant to Sec.  
948.22. Section 948.20 establishes the requirements of the general cull 
regulation. The Secretary may suspend or modify the general cull 
regulation provisions contained in Sec.  948.20 upon the recommendation 
of the Committee, or on other available information.
    Under the Colorado potato marketing order, the State of Colorado is 
divided into three areas of regulation for marketing order purposes. 
These include: Area 1, commonly known as the Western Slope; Area 2, 
commonly known as San Luis Valley; and, Area 3, which consists of the 
remaining producing areas within the State of Colorado not included in 
the definition of Area 1 or Area 2. Currently, the order only regulates 
the handling of potatoes produced in Area 2 and Area 3. Regulation for 
Area 1 has been suspended.
    The grade, size, and maturity requirements specific to the handling 
of potatoes grown in Area 2 are contained in Sec.  948.386 of the 
order. Additionally, the minimum grade and size requirements 
established under the order's general cull regulation are contained in 
Sec.  948.126. The handling regulation requires that all potatoes 
handled under the order meet the minimum requirements of the U.S. No. 2 
grade, and be 2 inches or greater in diameter. Smaller size potatoes 
may be handled, if such potatoes otherwise meet the requirements of 
certain higher grade standards. For all varieties, size B potatoes 
(1\1/2\-inch minimum to 2\1/4\-inch maximum diameter as designated in 
the U.S. Standards for Grade of Potatoes) may be handled under the 
order, if such potatoes meet or exceed the requirements of the U.S. 
Commercial grade. In addition, prior to this interim rule, 1-inch to 
1\3/4\-inch diameter potatoes that met or exceeded the requirements of 
the U.S. Commercial grade were also allowed to be handled under the 
order.
    At the December 20, 2012, Committee meeting, industry participants 
indicated to the Committee that there is an emerging market for smaller 
size U.S. Commercial grade potatoes sold in consumer packs and included 
in certain value added potato products. They further stated that the 
order's current size requirements (1-inch diameter being the smallest 
potato allowed to be handled) precludes them from supplying this 
growing and profitable market. Relaxing the size requirements to allow 
shipments of such higher grade, smaller size potatoes will allow area 
handlers to compete with other domestic potato producing regions for 
this developing market segment. This change effectively lowers the 
allowable minimum diameter for U.S. Commercial and better grade 
potatoes to \3/4\-inch, which is in line with the minimum size 
requirements contained in the handling regulations of the other 
domestic potato marketing orders.
    Relaxing the size requirements to allow shipments of smaller size 
potatoes will make more small potatoes available to consumers and will 
allow Area 2 handlers to move more of the area's potato production into 
the fresh market. This change is expected to benefit producers, 
handlers, and consumers of potatoes.
    Section 8e of the Act provides that when certain domestically 
produced commodities, including potatoes, are regulated under a Federal 
marketing order, imports of that commodity must meet the same or 
comparable grade, size, quality, and maturity requirements as the 
domestically produced product. Minimum grade, size, quality, and 
maturity requirements for potatoes imported into the United States are 
currently in effect under the import regulations contained in Sec.  
980.1 (7 CFR 980.1). The import regulations distinguish between each of 
the three major types of potatoes handled domestically: Red-skinned, 
round types; long types; and all other round types.
    Section 980.1(a)(2)(ii) specifies that imports of round type 
potatoes, other than red-skinned varieties, are in most direct 
competition with potatoes of the same type produced in Area 2, Colorado 
(San Luis Valley) and covered by Marketing Order No. 948. Further, 
section 980.1(b)(2) stipulates that, through the entire year, the 
grade, size, quality, and maturity requirements of Marketing Order No. 
948 applicable to potatoes of the round type, other than red-skinned 
varieties, shall be the respective grade, size, quality, and maturity 
requirements for imports of that type potatoes. As such, the relaxation 
of the size requirements effectuated by this interim rule for domestic 
potatoes covered by the order likewise relaxes the size requirements 
for U.S. Commercial and better grade round type potatoes, other than 
red-skinned varieties, that are imported into the U.S. No change to the 
regulatory text is necessary to accomplish this action.
    Prior to this action, 1-inch minimum diameter to 1\3/4\-inch 
maximum diameter was the smallest size range of potatoes allowed to be 
imported. As a result of the change in the order's handling regulation, 
and pursuant to section 8e of the Act, importers may now ship Creamer 
size (\3/4\-inch minimum to 1\5/8\-inch maximum diameter) U.S. 
Commercial and better grade round type potatoes, other than red-skinned 
varieties, into the U.S. market.
    This action allows potato handlers and importers to better respond 
to the changing demands of the U.S. potato market. The consumers' 
increasing preference for small size potatoes applies to imported 
potatoes as well as domestic potatoes. Thus, domestic handlers and 
importers should benefit by increasing sales to this emerging domestic 
market segment.

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 80 handlers of Colorado Area No. 2 potatoes 
subject to regulation under the order and approximately 180 producers 
in the regulated production area. Small agricultural service firms are 
defined by the Small Business Administration 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)

[[Page 35745]]

    During the 2011-2012 marketing year, the most recent full marketing 
year for which statistics are available, 15,072,963 hundredweight of 
Colorado Area No. 2 potatoes were inspected under the order and sold 
into the fresh market. Based on an estimated average f.o.b. price of 
$12.60 per hundredweight, the Committee estimates that 66 Area No. 2 
handlers, or about 83 percent, had annual receipts of less than 
$7,000,000. In view of the foregoing, the majority of Colorado Area No. 
2 potato handlers may be classified as small entities.
    In addition, based on information provided by the National 
Agricultural Statistics Service, the average producer price for the 
2011 Colorado fall potato crop was $10.70 per hundredweight. 
Multiplying $10.70 by the shipment quantity of 15,072,963 hundredweight 
yields an annual crop revenue estimate of $161,280,704. The average 
annual fresh potato revenue for each of the 180 Colorado Area No. 2 
potato producers is therefore calculated to be approximately $896,000 
($161,280,704 divided by 180), which is greater than the SBA threshold 
of $750,000. Consequently, on average, many of the Area No. 2 Colorado 
potato producers may not be classified as small entities.
    This interim rule relaxes the size allowance for U.S. Commercial 
and better grade potatoes in the order's handling regulation and 
modifies the size requirement in the order's general cull regulation. 
Prior to this action, the smallest size range allowed to be handled 
under the order was 1-inch minimum diameter to 1\3/4\-inch maximum 
diameter if the potatoes were otherwise U.S. Commercial or better 
grade. As a result of this interim rule, Creamer size (\3/4\-inch to 
1\5/8\-inch diameter) U.S. Commercial and better grade potatoes are now 
allowed be handled under the order. All other size requirements in the 
order's handling regulation remain unchanged. Authority for this action 
is contained in Sec. Sec.  948.20, 948.21, and 948.22.
    This relaxation is expected to benefit the producers, handlers, and 
consumers of Colorado Area 2 potatoes by allowing a greater quantity of 
fresh potatoes from the production area to enter the market. This 
anticipated increase in volume is expected to translate into greater 
returns for handlers and producers, and more purchasing options for 
consumers.
    After discussing possible alternatives to this interim rule, the 
Committee determined that a relaxation in the size requirement for U.S. 
Commercial and better grade potatoes will meet the industry's current 
needs while maintaining the potato quality objectives of the order. 
During its deliberations, the Committee considered making no changes to 
the handling regulation, as well as relaxing the size requirement for 
all U.S. No. 2 and better grade potatoes. The Committee believes that a 
relaxation in the handling regulation for small potatoes is necessary 
to allow handlers to pursue new markets, but lowering the size 
requirements for all potatoes that are U.S. No. 2 and better grade 
could erode the quality reputation of the area's production. Therefore, 
the Committee found that there were no other viable alternatives to the 
relaxation of the size requirements as recommended.
    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.
    In accordance with the Paperwork Reduction Act of 1995, (44 U.S.C. 
Chapter 35), the order's information collection requirements have been 
previously approved by the Office of Management and Budget (OMB) and 
assigned OMB No. 0581-0178 (Generic Vegetable and Specialty Crops). No 
changes in those requirements as a result of this action are necessary. 
Should any changes become necessary, they would be submitted to OMB for 
approval.
    This interim rule 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. In addition, USDA 
has not identified any relevant Federal rules that duplicate, overlap, 
or conflict with this interim rule.
    Further, the Committee's meeting was widely publicized throughout 
the Colorado potato industry and all interested persons were invited to 
attend the meeting and participate in Committee deliberations. Like all 
Committee meetings, the December 20, 2012, 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.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: 
www.ams.usda.gov/MarketingOrdersSmallBusinessGuide. Any questions about 
the compliance guide should be sent to Jeffrey Smutny at the previously 
mentioned address in the FOR FURTHER INFORMATION CONTACT section.
    This interim rule invites comments on a modification of the size 
requirements prescribed under the Colorado potato marketing order. Any 
comments received will be considered prior to the finalization of this 
interim rule.
    After consideration of all relevant material presented, including 
the Committee's recommendation, and other information, it is hereby 
found that this interim rule, as hereinafter set forth, will tend to 
effectuate the declared policy of the Act.
    In accordance with section 8e of the Act, the United States Trade 
Representative has concurred with the issuance of this interim rule.
    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 interim rule 
into effect and that good cause exists for not postponing the effective 
date of this interim rule until 30 days after publication in the 
Federal Register because: (1) This action is a relaxation of the 
current handling regulations; (2) handlers are already shipping 
potatoes from the 2012-2013 crop and may want to take advantage of this 
relaxation as soon as possible; (3) handlers are aware of this interim 
rule, which was initiated by the industry and unanimously recommended 
by the Committee at a public meeting during which interested parties 
had an opportunity to provide input; and (4) this interim rule provides 
a 60-day comment period and any comments received will be considered 
prior to finalization of this interim rule.

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

0
1. The authority citation for 7 CFR part 948 continues to read as 
follows:

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

0
2. In Sec.  948.126, paragraph (a) is revised to read as follows:


Sec.  948.126  General cull regulation.

    (a) No handler shall handle potatoes grown in the State of Colorado 
which do

[[Page 35746]]

not meet the requirements of U.S. No. 2 or better grade, or are less 
than \3/4\-inch in diameter.
* * * * *

0
3. In Sec.  948.386, the heading of paragraph (a)(4) is revised to read 
as follows:


Sec.  948.386  Handling regulation.

* * * * *
    (a) * * *
    (4) \3/4\-inch minimum diameter to 1\5/8\-inch maximum diameter 
(Creamer). * * *
* * * * *

    Dated: June 11, 2013.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2013-14175 Filed 6-13-13; 8:45 am]
BILLING CODE 3410-02-P