[Federal Register Volume 84, Number 98 (Tuesday, May 21, 2019)]
[Rules and Regulations]
[Pages 22957-22959]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-10615]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 948

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


Irish Potatoes Grown in Colorado; Modification of the Handling 
Regulations for Area No. 2

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This final rule revises the size requirements currently 
prescribed under the federal marketing order for Irish potatoes grown 
in Colorado. This action revises 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 revises the size requirements for 
smaller size profile U.S. Commercial grade or better potatoes.

DATES: Effective June 20, 2019.

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, 
amends regulations issued to carry out a marketing order as defined in 
7 CFR 900.2(j). This 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 rule is also issued pursuant to 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 final 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 final 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 final 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. 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

[[Page 22958]]

prior to any judicial challenge to the provisions of import regulations 
issued under section 8e of the Act.
    This final rule revises the size requirements prescribed for 
potatoes regulated under the Order. This action modifies the 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 regulations is effectuated 
by merging the size requirements for U.S. No. 2 or better grade 
potatoes (previously differentiated with separate requirements for 
round varieties and all other varieties) into one minimum size 
requirement that covers all U.S. No. 2 or better grade potatoes.
    In addition, this rule revises 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 potatoes. The new size 
requirement is 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)) allowed 
prior to implementation of this rule. The handling regulations will no 
longer refer to the ``Creamer'' size in the size requirements, because 
the specified size range will no longer conform to the Creamer 
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. Prior to this action, the Order's handling regulations required 
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 were 
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 were allowed to 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 will 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 will allow area 
handlers to better compete with other domestic potato producing 
regions. The changes will effectively increase the quantity of potatoes 
that can enter the fresh market from the production area and will 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.

Final 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 final 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 are unique in that they are brought about through 
group action of essentially small entities acting on their own behalf. 
Import regulations issued, pursuant to the Act are based on the 
requirements established in Federal marketing orders.
    There are approximately 60 handlers of Colorado Area No. 2 potatoes 
subject to 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 also 
subject to the Order. 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 as 
required by 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

[[Page 22959]]

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 rule revises the minimum size requirement for round U.S. No. 2 
grade or better potatoes from 2 inches minimum diameter to 2 inches 
minimum diameter or 4 ounces minimum weight. In addition, this final 
rule revises 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 the size requirements will 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 
remain unchanged. Authority for this action is contained in Sec. Sec.  
948.20, 948.21, and 948.22 of the Order.
    This final 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.
    At its July 12, 2018, meeting, the Committee discussed possible 
alternatives to this action. 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, will meet the industry's 
current marketing needs while maintaining the integrity of the Order's 
quality objectives. During its deliberations, the Committee considered 
making no changes to the handling regulations, as well as further 
changing the size requirements for all potatoes. The Committee believed 
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 this 
action.
    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 are necessary in those requirements as 
a result of this action. Should any changes become necessary, they 
would be submitted to OMB for approval.
    This rule revises the size requirements established under the 
Order. Accordingly, this action does 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. 
USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this final 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.
    A proposed rule concerning this action was published in the Federal 
Register on January 31, 2019 (84 FR 572). Copies of the proposed rule 
were also mailed or sent via facsimile to all Colorado potato handlers. 
The proposal was made available through the internet by USDA and the 
Office of the Federal Register. A 60-day comment period ending April 1, 
2019, was provided for interested persons to respond to the proposal. 
One comment was received during the comment period. The comment was 
supportive of the proposal. Accordingly, no changes will be made to the 
rule as proposed.
    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.
    After consideration of all relevant material presented, including 
the information and recommendation submitted by the Committee and other 
available information, it is hereby found that this rule, will tend to 
effectuate the declared policy of the Act.

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 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 (5) as paragraphs (a)(1) through (4), and revise new 
paragraphs (a)(1) and (3).
    The revisions 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: May 16, 2019.
Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2019-10615 Filed 5-20-19; 8:45 am]
 BILLING CODE 3410-02-P