[Federal Register Volume 84, Number 21 (Thursday, January 31, 2019)]
[Proposed Rules]
[Pages 572-574]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-00553]


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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. 84, No. 21 / Thursday, January 31, 2019 / 
Proposed Rules  

[[Page 572]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 948

[Doc. No. AMS-SC-18-0067; SC18-948-2 PR]


Irish Potatoes Grown in Colorado; Handling Regulation for Area 
No. 2

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule invites comments on a recommendation to 
revise the size requirements currently prescribed under the federal 
marketing order for Irish potatoes grown in Colorado. This action would 
revise the minimum size requirement for U.S. No. 2 or better grade 
round potatoes to align with the current size requirements for all 
other types of U.S. No. 2 or better grade potatoes. In addition, this 
rule would revise the size requirements for smaller size profile U.S. 
Commercial grade or better potatoes.

DATES: Comments must be received by April 1, 2019.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. Comments must be sent to the Docket 
Clerk, Marketing Order and Agreement Division, Specialty Crops 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 the comments will be made public on the internet at 
the address provided above.

FOR FURTHER INFORMATION CONTACT: Barry Broadbent, Senior Marketing 
Specialist, or Gary D. Olson, Regional Director, Northwest Marketing 
Field Office, Marketing Order and Agreement Division, Specialty Crops 
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 Richard Lower, Marketing Order and Agreement 
Division, Specialty Crops 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 action, pursuant to 5 U.S.C. 553, 
proposes amendments to the regulations issued to carry out a marketing 
order as defined in 7 CFR 900.2(j). This proposed rule is issued under 
Marketing Agreement No. 97 and Order No. 948, as amended (7 CFR part 
948), regulating the handling of Irish potatoes grown in Colorado. Part 
948, (referred to as 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 Colorado Potato 
Administrative Committee, Area 2 (Committee) locally administers the 
Order and is comprised of potato producers and handlers operating 
within the area of production.
    This proposed rule is also issued under section 8e of the Act (7 
U.S.C. 608e-1), which provides that whenever certain specified 
commodities, including 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 13563 and 13175. This action falls 
within a category of regulatory actions that the Office of Management 
and Budget (OMB) exempted from Executive Order 12866 review. 
Additionally, because this proposed rule does not meet the definition 
of a significant regulatory action, it does not trigger the 
requirements contained in Executive Order 13771. See OMB's Memorandum 
titled ``Interim Guidance Implementing Section 2 of the Executive Order 
of January 30, 2017, titled `Reducing Regulation and Controlling 
Regulatory Costs'[thinsp]'' (February 2, 2017).
    This proposed 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 (7 U.S.C. 608c(15)(A)), 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. Such 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 (7 U.S.C. 608e-1).
    This proposed rule would revise the size requirements currently 
prescribed for potatoes regulated under the Order. This proposal would 
update the current minimum size requirement for U.S. No. 2 or better 
grade round potatoes from 2 inches minimum diameter to 2 inches minimum 
diameter or 4 ounces minimum weight. The change in the handling 
regulation would be effectuated by merging the two current size 
requirements for U.S. No. 2 or better grade potatoes (one for round 
varieties and one for all other varieties) into one minimum size 
requirement that covers all U.S. No. 2 or better grade potatoes.
    In addition, this rule would revise the size requirements for U.S. 
Commercial grade or better potatoes to allow

[[Page 573]]

handling of \3/4\-inch minimum to 1\7/8\-inch maximum diameter 
potatoes. The change would be a change from the \3/4\-inch minimum to 
1\5/8\-inch maximum diameter size range (``Creamer'' size as defined in 
the U.S. Standards for Grades of Potatoes (7 CFR 51.1545)(Standards)) 
currently in effect. After the change, the handling regulations would 
no longer refer to the ``Creamer'' size in the size requirements 
because the specified size range would no longer conform to the 
requirements in the Standards. The changes to the handling regulations 
were unanimously recommended by the Committee at a meeting held on July 
12, 2018.
    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.
    Under the 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 definitions 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. The Order's current handling regulation requires round varieties 
of potatoes to be U.S. No. 2 or better grade, and 2 inches minimum 
diameter. All other non-round varieties of potatoes are required to be 
U.S. No. 2 or better grade, and either 2 inches minimum diameter or 4 
ounces minimum weight. Additionally, potatoes that are U.S. Commercial 
grade or better may be Size B (1\1/2\-inch minimum to 2\1/4\-inch 
maximum diameter) or Creamer size (\3/4\-inch minimum to 1\5/8\-inch 
maximum diameter).
    At the July 12, 2018, Committee meeting, industry participants, 
including the Colorado Department of Agriculture Inspection Division, 
indicated to the Committee that standardizing the size requirement for 
all varieties of U.S. No. 2 or better grade potatoes to 2 inches 
minimum diameter or 4 ounces minimum weight would simplify the handling 
of potatoes from the production area. The industry believes that 
merging the two current size requirements for U.S. No. 2 or better 
grade potatoes into one minimum size requirement covering all varieties 
of U.S. No. 2 or better potatoes would ease the implementation of the 
handling regulations for handlers and for the fresh produce inspectors. 
Further, industry stakeholders stated that there is a market for U.S. 
Commercial grade or better potatoes of a slightly larger size profile 
than currently allowed under the Creamer size, and increasing the 
maximum size in the profile to 1\7/8\-inch maximum diameter would 
facilitate sales.
    Revising the size requirements for round U.S. No. 2 or better grade 
potatoes and U.S. Commercial grade or better potatoes would allow area 
handlers to better compete with other domestic potato producing 
regions. The changes would effectively increase the quantity of 
potatoes that can enter the fresh market from the production area and 
would allow handlers to supply potato buyers with the grade and size 
profiles that they prefer. This change is expected to benefit 
producers, handlers, and consumers 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 60 handlers of Colorado Area No. 2 potatoes 
subject to regulation under the Order and approximately 160 producers 
in the regulated production area. In addition, there are approximately 
255 importers of all types of potatoes, many of which import long 
types, who are subject to regulation under the Act. Small agricultural 
service firms, which include potato handlers and importers, are defined 
by the Small Business Administration (SBA) as those having annual 
receipts of less than $7,500,000, and small agricultural producers are 
defined as those having annual receipts of less than $750,000 (13 CFR 
121.201).
    During the 2016-2017 marketing year, the most recent full marketing 
year for which statistics are available, approximately 19,828,000 
hundredweight of Colorado Area No. 2 potatoes were inspected under the 
Order and sold into the fresh market. Based on information reported by 
USDA's Market News Service, the average f.o.b. shipping point price for 
the 2016-2017 Colorado potato crop was $11.79 per hundredweight. 
Multiplying $11.79 by the shipment quantity of 19,828,000 hundredweight 
yields an annual crop revenue estimate of $233,772,120. The average 
annual fresh potato revenue for each of the 60 handlers is therefore 
calculated to be $3,896,202 ($233,772,120 divided by 60), which is less 
than the SBA threshold of $7,500,000. Consequently, on average most of 
the 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 
2016 Colorado fall potato crop was $9.60 per hundredweight. Multiplying 
$9.60 by the shipment quantity of 19,828,000 hundredweight yields an 
annual crop revenue estimate of $190,348,800. The average annual fresh 
potato revenue for each of the 160 Colorado Area No. 2 potato producers 
is therefore calculated to be approximately $1,189,680 ($190,348,800 
divided by 160), which is greater than the SBA threshold of $750,000. 
Therefore, on average, most of the Area No. 2 Colorado potato producers 
may not be classified as small entities.
    Further, based on information from USDA's Foreign Agricultural 
Service (FAS), potato importers imported 17,254,160 hundredweight of 
potatoes into the U.S. in 2017. FAS also reported the total value of 
potato imports for 2017 to be $235,685,000. The average 2017 annual 
revenue of the estimated 255 potato importers is therefore calculated 
to be $924,255 ($235,685,000 divided by 255), which is significantly 
less than the SBA threshold of $7,500,000. Consequently, on average, 
most of the entities importing potatoes into the U.S. may be classified 
as small entities.
    This proposal would revise the minimum size requirement for round 
U.S. No. 2 grade or better potatoes from the current 2 inches minimum 
diameter to 2 inches minimum diameter or 4 ounces minimum weight. In 
addition, this proposed rule would revise the size requirements for 
U.S. Commercial grade or better potatoes to allow handling of \3/4\-
inch minimum to 1\7/8\-inch maximum diameter size range potatoes. 
Revising

[[Page 574]]

the size requirements would allow Colorado Area 2 handlers to market 
more of their potatoes and enable them to better compete with the other 
domestic potato producing regions. All other requirements in the 
Order's handling regulations would remain unchanged. Authority for this 
action is contained in Sec. Sec.  948.20, 948.21, and 948.22 of the 
Order.
    This proposed rule is expected to benefit the producers, handlers, 
and consumers of Colorado Area 2 potatoes by allowing a greater 
quantity of potatoes from the production area to enter the fresh 
market. The 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 proposed rule, the 
Committee determined that a change in the size requirements for U.S. 
No. 2 or better grade round potatoes, and U.S. Commercial grade or 
better potatoes, would meet the industry's current needs while 
maintaining the integrity of the Order's quality objectives. During its 
deliberations, the Committee considered making no changes to the 
handling regulation, as well as further changing the size requirements 
for all potatoes. The Committee believes that a revision to the Order's 
size requirements is necessary to allow handlers to pursue all 
available markets, but further revising the size requirements for all 
other types and varieties of potatoes could erode the quality 
reputation of the area's production. Therefore, the Committee found 
that there were no other viable alternatives to the proposal as 
recommended.
    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 OMB and assigned OMB No. 0581-0178, Vegetable 
and Specialty Crops. No changes would be necessary in those 
requirements as a result of this action. Should any changes become 
necessary, they would be submitted to OMB for approval.
    This proposed rule would revise the size requirements established 
under the Order. Accordingly, this action would 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.
    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.
    The Committee's July 18, 2018, meeting was widely publicized 
throughout the Colorado Area 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 meeting 
was public, and all entities, both large and small, were able to 
express their views on this issue. Interested persons are invited to 
submit comments on this proposed rule, including the regulatory and 
information collection 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/rules-regulations/moa/small-businesses. Any questions 
about the compliance guide should be sent to Richard Lower at the 
previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    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 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 
proposed to be amended as follows:

PART 948--IRISH POTATOES GROWN IN COLORADO

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

    Authority: 7 U.S.C. 601-674.
0
2. In Sec.  948.386, remove paragraph (a)(1), redesignate paragraphs 
(a)(2) through (a)(5) as paragraphs (a)(1) through (a)(4), and revise 
new paragraphs (a)(1) and (a)(3) to read as follows:


Sec.  948.386   Handling regulation.

* * * * *
    (a) * * *
    (1) All varieties. U.S. No. 2 or better grade, 2 inches minimum 
diameter or 4 ounces minimum weight.
* * * * *
    (3) \3/4\-inch minimum to 1\7/8\-inch maximum diameter. U.S. 
Commercial grade or better.
* * * * *

    Dated: January 26, 2019.
Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2019-00553 Filed 1-30-19; 8:45 am]
BILLING CODE 3410-02-P