[Federal Register Volume 87, Number 31 (Tuesday, February 15, 2022)]
[Rules and Regulations]
[Pages 8399-8402]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-03177]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 946

[Doc. No. AMS-SC-20-0095; SC21-946-1 FR]


Irish Potatoes Grown in Washington; Termination of Marketing 
Order 946

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule; termination of order.

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SUMMARY: This final rule terminates the Federal marketing order 
regulating the handling of Irish potatoes grown in Washington, and the 
rules and regulations issued thereunder. The marketing order is 
administered locally by the State of Washington Potato Committee 
(Committee), which unanimously recommended its termination at a meeting 
held on June 11, 2020. This recommendation is based on the Committee's 
determination that the marketing order is no longer an effective 
marketing tool for the Washington potato industry and that termination 
best serves the current needs of the industry by eliminating the costs 
associated with its operation.

DATES: Effective March 2, 2022.

FOR FURTHER INFORMATION CONTACT: Gregory A. Breasher, Marketing 
Specialist, or Gary Olson, Regional Director, Market Development 
Division, Specialty Crops Program, AMS, USDA; Telephone: (503) 326-2054 
or Email: [email protected] or [email protected].
    Small businesses may request information on complying with this 
regulation by contacting Richard Lower, Market Development Division, 
Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP 
0237, Washington, DC 20250-0237;

[[Page 8400]]

Telephone: (202) 720-2491, Fax: (202) 720-8938, or Email: 
[email protected].

SUPPLEMENTARY INFORMATION: This action, pursuant to 5 U.S.C. 553, 
finalizes the termination of regulations issued to carry out a 
marketing order as defined in 7 CFR 900.2(j). This final rule is issued 
under Marketing Order No. 946, as amended (7 CFR part 946), regulating 
the handling of potatoes grown in Washington. Part 946 (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.'' This action is governed by Sec.  608c(16)(A) of the Act. 
The Committee locally administers the Order and is comprised of 
producers and handlers operating within the production area.
    The Department of Agriculture (USDA) is issuing this final rule in 
conformance with Executive Orders 12866 and 13563. Executive Orders 
12866 and 13563 direct agencies to assess all costs and benefits of 
available regulatory alternatives and, if regulation is necessary, to 
select regulatory approaches that maximize net benefits (including 
potential economic, environmental, public health and safety effects, 
distributive impacts and equity). Executive Order 13563 emphasizes the 
importance of quantifying both costs and benefits, reducing costs, 
harmonizing rules, and promoting flexibility. This action falls within 
a category of regulatory actions that the Office of Management and 
Budget (OMB) exempted from Executive Order 12866 review.
    In addition, this final rule has been reviewed under Executive 
Order 13175--Consultation and Coordination with Indian Tribal 
Governments, which requires agencies to consider whether their 
rulemaking actions would have tribal implications. Agricultural 
Marketing Service (AMS) has determined this final rule is unlikely to 
have substantial direct effects on one or more Indian tribes, on the 
relationship between the Federal Government and Indian tribes, or on 
the distribution of power and responsibilities between the Federal 
Government and Indian tribes.
    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This final 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 a marketing order may file with USDA a 
petition stating that the marketing order, any provision of the 
marketing order, or any obligation imposed in connection with the 
marketing order is not in accordance with law and request a 
modification of the marketing 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 final rule terminates the Order and the rules and regulations 
issued thereunder. The Order contains authority for the regulation of 
Irish potatoes grown in Washington. At a virtual meeting held on June 
11, 2020, the Committee unanimously recommended termination of the 
Order.
    Section 946.63(b) of the Order provides that USDA terminates or 
suspends any or all provisions of the Order when a finding is made that 
the Order does not tend to effectuate the declared policy of the Act. 
In addition, section 608c(16)(A) of the Act provides that USDA 
terminates or suspends the operation of any order whenever the order or 
any provision thereof obstructs or does not tend to effectuate the 
declared policy of the Act. Additionally, USDA is required to notify 
Congress no later than 60 days before the date the Order would be 
terminated.
    Marketing Order No. 946 has been in effect since 1949 and has 
provided the potato industry in Washington with authority for grade, 
size, quality, maturity, pack, and container regulations, as well as 
authority for mandatory product inspection. The Committee has met 
regularly to evaluate the current status of the Washington potato 
industry and to consider recommendations for modification, suspension, 
or termination of the Order's regulatory requirements, which have been 
issued on a continuing basis. Committee meetings are open to the public 
and interested persons may express their views at these meetings. The 
USDA reviews Committee recommendations, including information provided 
by the Committee and from other available sources, and determines 
whether modification, suspension, or termination of the Order's 
regulatory requirements would tend to effectuate the declared policy of 
the Act.
    Handling regulations requiring potatoes to be inspected and meet 
mandatory minimum grade, size, maturity, quality, pack, and container 
requirements were in effect for all types of potatoes until 2010. USDA 
temporarily suspended the handling regulations for Russet type potatoes 
for one year, effective July 24, 2010 (75 FR 43042), and subsequently 
extended that suspension indefinitely, effective July 1, 2011 (76 FR 
27850). Further, USDA temporarily suspended the handling regulations 
for yellow fleshed and white type potatoes effective October 24, 2013 
(78 FR 62967), also extending that suspension indefinitely, effective 
July 1, 2014 (79 FR 26109). Lastly, USDA indefinitely suspended the 
handling regulations for all red types of potatoes, effective February 
15, 2014 (79 FR 8253). The cumulative effect of the various suspensions 
was the total suspension of handling regulations for all fresh potatoes 
under the Order after July 1, 2014. All of the suspensions listed above 
were enacted upon the Committee's recommendation.
    Following these regulatory suspensions, the Committee continued to 
levy assessments in order to maintain its functionality. The Committee 
felt that it should continue to fund its full operational capability in 
order to collect handler reports, track industry data, and preserve the 
authority to regulate handling, should that become relevant to the 
industry again sometime in the future.
    The Committee met on January 22 and June 11, 2020, to discuss the 
current marketing environment of the Washington potato industry and the 
status of the Order. The Committee determined that the suspension of 
the Order's handling regulations has not negatively impacted the 
industry and that there is no longer a need for the Order. In addition, 
the Committee concluded that the data collection and reporting 
functions of the Order are duplicative of the services provided to the 
industry by the Washington State Potato Commission and that termination 
of the Order will not materially impact the collection and 
dissemination of essential industry data.
    At the meeting held via conference call on June 11, 2020, the 
Committee unanimously voted in favor of recommending that USDA 
terminate the Order. In addition, the Committee recommended the Order's 
reporting and assessment requirements--the only regulatory activities 
still in effect--be suspended while USDA processes termination of the 
Order. The recommendation to suspend all remaining Order activities was 
a separate regulatory action from this rule. A final rule suspending 
the Order's reporting and assessment requirements

[[Page 8401]]

was published in the Federal Register February 24, 2021 (86 FR 11091).

Final Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), AMS has considered the economic impact of 
this final rule 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, 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 26 handlers of Washington potatoes and 
approximately 250 potato producers in the production area subject to 
regulation by the Order.
    Small agricultural service firms are defined by the Small Business 
Administration (13 CFR 121.201) as those having annual receipts of less 
than $30,000,000, and small agricultural producers are defined as those 
having annual receipts of less than $1,000,000.
    According to USDA Market News, the average shipping point price for 
fresh Washington potatoes during the 2019 shipping season was 
approximately $15.79 per hundredweight. The Committee reported that 
2019-2020 marketing year fresh potato shipments were 9,687,170 
hundredweight. Using the average price and shipment information, the 
number of handlers, and assuming a normal distribution, most handlers 
had average annual receipts of less than $30,000,000 ($15.79 times 
9,687,170 hundredweight equals $152,960,414, divided by 26 handlers 
equals $5,883,093 per handler). Thus, AMS concludes that the majority 
of handlers would meet the SBA definition of a small business.
    USDA National Agricultural Statistics Service reported an average 
producer price of $8.20 per hundredweight for the 2019 crop. Given the 
number of Washington potato producers, and assuming a normal 
distribution, average annual producer revenue is below $1,000,000 
($8.20 times 9,687,170 hundredweight equals $79,434,794, divided by 250 
producers equals $317,739 per producer). Therefore, most producers of 
fresh Washington potatoes may be classified as small businesses under 
the SBA definition.
    This rule terminates the Federal marketing order for Irish potatoes 
grown in Washington, and the rules and regulations issued thereunder. 
The Order contains authority to regulate the handling of Irish potatoes 
grown in Washington. The Committee determined that regulating the 
handling of potatoes under the Order is no longer an effective 
marketing tool for the Washington potato industry. Evidence from the 
past several years of operating with suspended handling regulations 
showed that potatoes can be shipped from the production area in the 
absence of the Order's minimum requirements without a negative economic 
impact on the industry.
    Secondly, the Committee determined that the data collection and 
reporting function of the Order is duplicative of the services provided 
to the industry by the Washington State Potato Commission. The 
termination of the Order will not materially impact the collection and 
dissemination of essential industry data to Washington state potato 
growers.
    As such, the Committee concluded that the costs associated with the 
administration of the Order outweigh the benefits of continuing the 
Order. This conclusion is based on the Committee's analysis of the 6-
year period of regulatory suspension and findings that termination is 
not expected to negatively impact the marketing of fresh Washington 
potatoes because this action reduces the costs to both handlers and 
producers. Therefore, in an action taken on June 11, 2020, the 
Committee unanimously recommended that USDA terminates the Order.
    Section 946.63(b) of the Order provides that USDA terminates or 
suspends any or all provisions of the Order when a finding is made that 
the Order does not tend to effectuate the declared policy of the Act. 
Furthermore, Sec.  608c(16)(A) of the Act provides that USDA shall 
terminate or suspend the operation of any order whenever the order or 
provision thereof obstructs or does not tend to effectuate the declared 
policy of the Act. An additional provision requires that Congress be 
notified no later than 60 days before the date the order would be 
terminated.
    The Committee considered alternatives to this rule, including 
taking no action (which would keep the Order active but with the 
handling regulations suspended) and suspending all of the Order's 
remaining regulatory provisions but not terminating the Order. The 
Committee determined that neither option was a viable long-term 
solution and subsequently recommended that the Order be terminated.
    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 contained in OMB No. 0581-0178 Vegetable 
and Specialty Crops. Termination of the Order, and the reporting 
requirements prescribed therein, will eliminate the reporting burden on 
Washington potato handlers. Handlers will no longer file forms with the 
Committee, which will reduce industry expenses and save an estimated 
9.7 hours per handler per year. This rule will not impose any 
additional reporting or recordkeeping requirements on either small or 
large 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.
    The Committee's meetings are widely publicized throughout the 
Washington potato industry, and all interested persons are invited to 
attend the meetings and participate in Committee deliberations on all 
issues. Like all Committee meetings, the January 22 and June 11, 2020, 
meetings were public meetings, and all entities, both large and small, 
were able to express their views on these issues. Interested persons 
were invited to submit comments on a 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: 
https://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 proposed rule inviting comments regarding termination of the 
Order was published in the Federal Register on September 7, 2021 (86 FR 
49930). AMS distributed the proposed rule to State of Washington potato 
industry members. In addition, the rule was made available on the 
internet by AMS and the Office of the Federal Register. The proposed 
rule provided a 60-day comment period

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for the interested parties to comment, which ended on November 8, 2021. 
Two comments were received in support of the termination.
    Based on the foregoing, and pursuant to Sec.  608c(16)(A) of the 
Act and Sec.  946.63 of the Order, it is hereby found that the Federal 
marketing Order 946 regulating the handling of Irish potatoes grown in 
Washington does not tend to effectuate the declared policy of the Act 
and is therefore terminated.
    Following termination, trustees will be appointed to conclude and 
liquidate the Committee affairs and will continue in that capacity 
until discharged by USDA. Section 608c(16)(A) of the Act requires USDA 
to notify Congress 60 days in advance of termination of a Federal 
marketing order. USDA notified Congress on December 2, 2021.

List of Subjects in 7 CFR Part 946

    Marketing agreements, Potatoes, Reporting and recordkeeping 
requirements.

PART 946--[REMOVED]

0
For the reasons set forth in the preamble, and under the authority of 7 
U.S.C. 601-674, 7 CFR part 946 is removed.

Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2022-03177 Filed 2-14-22; 8:45 am]
BILLING CODE 3410-02-P