[Federal Register Volume 79, Number 193 (Monday, October 6, 2014)]
[Proposed Rules]
[Pages 60117-60119]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-23524]


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 Proposed Rules
                                                 Federal Register
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 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.
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  Federal Register / Vol. 79, No. 193 / Monday, October 6, 2014 / 
Proposed Rules  

[[Page 60117]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 948 and 980

[Doc. No. AMS-FV-13-0073; FV13-948-3 PR]


Irish Potatoes Grown in Colorado and Imported Irish Potatoes; 
Relaxation of the Handling Regulation for Area No. 2 and Import 
Regulations

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule invites comments on a revision to the 
minimum quantity exception 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 would increase the quantity of potatoes that 
may be handled under the order without regard to the order's handling 
regulation requirements from 1,000 to 2,000 pounds. The change in the 
import regulation is required under section 8e of the Agricultural 
Marketing Agreement Act of 1937. This action would allow the 
importation which, in the aggregate, does not exceed 2,000 pounds for 
all other round type potatoes, except red skinned, round type or long 
type potatoes that continue to remain at a 500 pound limit, to be 
imported without regard to the import regulations. This action is 
expected to benefit producers, handlers, and importers.

DATES: Comments must be received by December 5, 2014.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposal. Comments must 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 
proposal 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 comments will be made public on the internet at the 
address provided above.

FOR FURTHER INFORMATION CONTACT: Sue Coleman, Marketing Specialist, or 
Gary D. 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 proposed rule is issued under Marketing 
Agreement No. 97 and 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 proposed rule is also issued under section 8e of the Act, 
which provides that whenever certain specified commodities, including 
Irish potatoes, are regulated under a Federal marketing order, imports 
of these commodities into the United States are 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 proposed rule 
in conformance with Executive Orders 12866, 13563, and 13175.
    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This proposed 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 regulations 
issued under section 8e of the Act.
    This proposal invites comments on a revision to the minimum 
quantity exception currently prescribed in the handling regulation for 
potatoes handled under the order. This proposal would increase the 
quantity of potatoes that may be handled without regard to the order's 
handling regulation from 1,000 to 2,000 pounds. Relaxing the minimum 
quantity exception is expected to benefit producers, handlers, and 
importers. The rule was unanimously recommended by the Committee at a 
meeting on July 18, 2013.
    Section 948.4 of the order divides the State of Colorado into three 
areas of regulation for marketing order purposes. These areas include: 
Area No. 1, commonly known as the Western Slope; Area No. 2, commonly 
known as San Luis Valley; and, Area No. 3, which consists of the 
remaining producing areas within the State of Colorado not included in 
the definition of Area No. 1 or Area No. 2. Currently, the order only 
regulates the handling of potatoes

[[Page 60118]]

produced in Area No. 2 and Area No. 3. Regulation for Area No. 1 has 
been suspended.
    Section 948.50 of the order establishes committees as 
administrative agencies for each of the areas set forth under Sec.  
948.4. Section 948.22(a) of the order authorizes the issuance of grade, 
size, quality, maturity, pack, and container regulations for potatoes 
grown in the order's production area. Further, section 948.22(b)(2) of 
the order provides authority for each area committee to recommend 
modification of regulations to provide for minimum quantities that 
should be relieved of regulatory or administrative obligations.
    Section 948.386 of the order's administrative rules prescribes 
grade, size, maturity, and inspection requirements for Colorado Area 
No. 2 potatoes. Paragraph (f) of that section prescribes the minimum 
quantity of potatoes that are exempt from regulation. Currently, each 
person may handle up to 1,000 pounds of potatoes without regard to the 
order's grade, size, maturity, and inspection requirements.
    At its meeting on July 18, 2013, the Committee unanimously 
recommended increasing the order's minimum quantity exception from 
1,000 to 2,000 pounds. The recommendation was made at the request of 
producers and handlers who wanted greater flexibility in distributing 
smaller quantities of potatoes. In its deliberations, the Committee 
commented that 2,000 pounds is consistent with the current weight of a 
pallet of potatoes. One pallet is typically the smallest lot of 
potatoes distributed, since most delivery vehicles are now capable of 
transporting at least 2,000 pounds.
    Handlers also feel that the value of one pallet of potatoes does 
not warrant the cost of complying with the order's regulations. Based 
on an estimated average f.o.b. price of $12.60, the value of one pallet 
of potatoes is approximately $225.00. Increasing the minimum quantity 
exception from 1,000 to 2,000 pounds of potatoes would allow a handler 
to ship one pallet of potatoes without regard to the order's grade, 
size, maturity, and inspection requirements. Relaxing the minimum 
quantity is expected to benefit producers, handlers, and importers.
    Section 8e of the Act provides that when certain domestically 
produced commodities, including Irish potatoes, are regulated under a 
Federal marketing order, imports of that commodity must meet the same 
or comparable grade, size, quality, and maturity requirements. Whenever 
two or more marketing orders regulating the same commodity produced in 
different areas of the United States are concurrently in effect, the 
importation into the United States of any such commodity shall be 
prohibited unless it complies with the grade, size, quality and 
maturity provisions of the order which, as determined by the Secretary 
of Agriculture, regulates the commodity produced in the area with which 
the imported commodity is in most direct competition (7 U.S.C. 608e-
(a)). Section 980.1(b)(2) of the Vegetable Import Regulations specifies 
that potatoes imported into the United States are in most direct 
competition with potatoes of the same type produced in the area covered 
by this order. Since this action would increase the minimum quantity 
exemption under the domestic handling regulations, a corresponding 
change to the import regulations must also be considered.
    Minimum grade, size, quality, and maturity requirements for Irish 
potatoes imported into the United States are currently in effect under 
Sec.  980.1 (7 CFR 980.1). The minimum quantity exemption is specified 
in Sec.  980.1(c). The exemption for red skinned, round type or long 
type potatoes would remain at a 500 pound limit. This proposal would 
increase the quantity for all other round type potatoes that may be 
imported without regard to the import regulation requirements from 
1,000 to 2,000 pounds. The metric equivalent for 1,000 pounds is 
453.592 kilograms and 2,000 pounds is 907.185 kilograms. The increase 
in the minimum quantity exemption for imports of potatoes would have a 
beneficial impact on importers. This proposed rule would provide 
flexibility in the importation and distribution of smaller quantities 
of potatoes.

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 
businesses 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. Import regulations issued under 
the Act are based on those established under Federal marketing orders.
    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. There are approximately 240 importers 
of potatoes. Small agricultural service firms (handlers and importers) 
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).
    During the 2011-2012 fiscal period, the most recent 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 Colorado Area No. 2 
potato producers may not be classified as small entities.
    Information from the Foreign Agricultural Service, USDA, indicates 
that the dollar value of imports of the type of potatoes affected by 
this rule ranged from approximately $55.8 million in 2009 to $ 56.5 
million in 2013. Using these values, the majority of importers of the 
type of potatoes affected by this rule would have annual receipts of 
less than $7,000,000 and may be classified as small entities.
    Canada is the major potato-producing country exporting potatoes to 
the United States. In 2013, affected shipments of potatoes imported 
into the United States totaled around 3,479,468 hundredweight. Of that 
amount, 3,479,383 hundredweight were imported from Canada, 59 
hundredweight were imported from Ecuador, and 26 hundredweight were 
imported from Peru.
    This proposal would revise the quantity of potatoes that may be 
handled without regard to the

[[Page 60119]]

requirements of Sec.  948.386(a), (b), and (c) of the order from 1,000 
to 2,000 pounds and makes a corresponding change to the potato import 
regulation. At the July 18, 2013 meeting, the Committee unanimously 
recommended increasing the minimum quantity exception to be consistent 
with the approximate weight of one pallet of potatoes. Authority for 
the establishment and modification of a minimum quantity exception is 
provided in Sec.  948.22(b)(2) of the order. This proposed rule amends 
the provisions in Sec. Sec.  948.386(f) and 980.1(c). The change in the 
import regulation is required under section 8e of the Act.
    This action is not expected to increase the costs associated with 
the order's requirements or the potato import regulation. Rather, it is 
anticipated that this proposed change will have a beneficial impact. 
The Committee believes it would provide greater flexibility in the 
distribution of small quantities of potatoes. Currently, the 
distribution of potatoes between 1,000 and 2,000 pounds requires an 
inspection and certification that the product conforms to the grade, 
size, and maturity requirements of the order. This translates into a 
cost for handlers and importers of both time and inspection fees, which 
is high in relation to the small value (approximately $225.00 per 
pallet) of these transactions. This action would allow shipments up to 
2,000 pounds of potatoes without regard to the order's grade, size, 
maturity, and inspection requirements and the related costs. The 
benefits for this proposed rule are expected to be equally available to 
all fresh potato producers, handlers, and importers, regardless of 
their size.
    As an alternative to the proposal, the Committee discussed leaving 
the handling regulation unchanged. The Committee rejected this idea 
because a pallet of potatoes weighs approximately 2,000 pounds and the 
1,000 pound minimum quantity exception did not accommodate this size 
shipment. No other alternatives were discussed.
    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 proposed rule would relax the minimum quantity exception under 
the order from 1,000 to 2,000 pounds. Accordingly, this action would 
not impose any additional reporting or recordkeeping requirements on 
either small or large Colorado Area No. 2 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.
    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.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap or conflict with this proposed rule.
    In addition, the Committee's meeting was widely publicized 
throughout the Colorado Area No. 2 potato industry and all interested 
persons were invited to attend the meeting and participate in Committee 
deliberations on all issues. Like all Committee meetings, the July 18, 
2013, meeting was a public meeting and all entities, both large and 
small, were able to express views on this issue. Finally, interested 
persons are invited to submit comments on this proposed 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: http://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.
    In accordance with section 8e of the Act, the United States Trade 
Representative has concurred with the issuance of this proposed rule.
    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

7 CFR Part 948

    Marketing agreements, Potatoes, Reporting and recordkeeping 
requirements.

7 CFR Part 980

    Food grades and standards, Imports, Marketing agreements, Onions, 
Potatoes, Tomatoes.

    For the reasons set forth above, 7 CFR parts 948 and 980 are 
proposed to be 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. Revise Sec.  948.386(f) to read as follows:


Sec.  948.386  Handling regulation.

* * * * *
    (f) Minimum quantity. For purposes of regulation under this part, 
each person may handle up to but not to exceed 2,000 pounds of potatoes 
without regard to the requirements of paragraphs (a), (b), and (c) of 
this section, but this exception shall not apply to any shipment which 
exceeds 2,000 pounds of potatoes.
* * * * *

PART 980--VEGETABLES: IMPORT REGULATIONS

0
3. In Sec.  980.1, paragraph (c) is revised to read as follows:


Sec.  980.1  Import regulations; Irish potatoes.

* * * * *
    (c) Minimum quantities. Any importation which, in the aggregate, 
does not exceed 500 pounds of red skinned, round type or long type 
potatoes, or 2,000 pounds for all other round type potatoes, may be 
imported without regard to the provisions of this section.
* * * * *

    Dated: September 29, 2014.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2014-23524 Filed 10-3-14; 8:45 am]
BILLING CODE 3410-02-P