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[Federal Register: April 5, 2010 (Volume 75, Number 64)]
[Rules and Regulations]               
[Page 17034-17036]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05ap10-3]                         

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 948

[Doc. No. AMS-FV-08-0115; FV09-948-2 IFR]

 
Irish Potatoes Grown in Colorado; Relaxation of the Handling 
Regulation for Area No. 3

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim rule with request for comments.

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SUMMARY: This rule relaxes the size requirement prescribed under the 
Colorado potato marketing order. The marketing order regulates the 
handling of Irish potatoes grown in Colorado, and is administered 
locally by the Colorado Potato Administrative Committee for Area No. 3 
(Committee). This rule provides for the handling of all varieties of 
potatoes with a minimum diameter of \3/4\ inch, if the potatoes 
otherwise meet U.S. No. 1 grade. This change is intended to provide 
potato handlers with greater marketing flexibility, producers with 
increased returns, and consumers with a greater supply of potatoes.

DATES: Effective April 6, 2010; comments received by June 4, 2010 will 
be considered prior to issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent to the Docket Clerk, 
Marketing Order Administration Branch, Fruit and Vegetable Programs, 
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 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: Teresa Hutchinson or Gary Olson, 
Northwest Marketing Field Office, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, Telephone: (503) 326-
2724, Fax: (503) 326-7440, or E-mail: Teresa.Hutchinson@ams.usda.gov or 
GaryD.Olson@ams.usda.gov.
    Small businesses may request information on complying with this 
regulation by contacting Antoinette Carter, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 
Independence Avenue, SW., STOP 0237, Washington, DC 20250-0237; 
Telephone: (202) 720-2491, Fax: (202) 720-8938, or E-mail: 
Antoinette.Carter@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This 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.''
    The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Order 12866.
    This 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 there from. 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 rule relaxes the size requirement for all varieties of 
Colorado Area No. 3 potatoes by allowing the handling of potatoes with 
a minimum diameter of \3/4\ inch, if the potatoes otherwise meet U.S. 
No. 1 grade. This change is intended to provide potato handlers with 
greater marketing flexibility, producers with increased returns, and 
consumers with a greater supply of potatoes.
    Section 948.22 authorizes the issuance of grade, size, quality, 
maturity, pack, and container regulations for potatoes grown in the 
production area. Section 948.21 further authorizes the modification, 
suspension, or termination of requirements issued pursuant to Sec.  
948.22.
    Section 948.40 provides that whenever the handling of potatoes is 
regulated pursuant to Sec. Sec.  948.20 through 948.24, such potatoes 
must be inspected by the Federal-State Inspection Service, and 
certified as meeting the applicable requirements of such regulations.
    Under the order, the State of Colorado is divided into three 
separate regulatory areas for marketing order purposes. Area No. 1, 
commonly known as the Western Slope, includes and consists of the 
counties of Routt, Eagle, Pitkin, Gunnison, Hinsdale, La Plata, and all 
counties west thereof; Area No. 2, commonly known as the San Luis 
Valley, includes and consists of the counties of Saguache, Huerfano, 
Las Animas, Mineral, Archuleta, and all counties south thereof; and 
Area No. 3 includes and consists of all the remaining counties in the 
State of Colorado which are not included in Area No. 1 or Area No. 2. 
The order currently regulates the handling of potatoes grown in Areas 
No. 2 and No. 3 only; regulation for Area No. 1 is currently not 
active.
    Grade, size, and maturity regulations specific to the handling of 
Colorado potatoes grown in Area No. 3 are contained in Sec.  948.387 of 
the order's administrative rules and regulations.
    The Committee met on June 4, 2009, and again on November 17, 2009, 
to discuss decreasing the minimum size requirement for certain 
potatoes. As a consequence of these deliberations, the Committee 
unanimously recommended on November 17 that Sec.  948.387(a) of the 
order's handling regulation be revised to provide for the handling of 
all varieties of potatoes with a minimum diameter of \3/4\ inch, if the 
potatoes otherwise meet U.S. No. 1 grade requirements (a potato meeting 
all the requirements of a U.S. No. 1 grade potato as defined in the 
U.S. Standards for Grades of Potatoes would have a minimum size of 1\7/
8\ inches). This recommendation provides for the handling of potatoes 
within both the

[[Page 17035]]

Creamer size category (\3/4\ inch to 1\5/8\ inch diameter) and the Size 
B category (1\1/2\ inch to 2\1/4\ inch diameter), as well as the 
handling of small potato packs that may fall outside these categories. 
Prior to the effective date of this action, the handling regulation 
provided that Area No. 3 potatoes could not be handled unless U.S. No. 
2 grade or better, 1\7/8\ inches minimum diameter or 4 ounces minimum 
weight, and Size B potatoes if U.S. No. 1 grade or better.
    The Committee believes that in recent years consumer demand has 
been increasing for smaller potatoes which often command premium 
prices. The market for these smaller potatoes is currently being 
supplied by potato production areas outside Colorado Area No. 3. Having 
the ability to handle smaller potatoes enables the Colorado Area No. 3 
potato industry to market a larger portion of its crop while satisfying 
consumer demand for smaller potatoes. This size relaxation is also 
expected to increase returns to producers.
    The Committee believes that quality assurance is important to the 
industry and to consumers. Providing consistent, high quality potatoes 
is necessary to maintain consumer confidence. The Committee also 
believes that relaxing the size requirement for all varieties of U.S. 
No. 1 potatoes will preserve their commitment to quality while allowing 
the industry to respond to changing consumer preferences.

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 rules issued thereunder, are unique in that 
they are brought about through group action of essentially small 
entities acting on their own behalf.
    Based on Committee data, there are nine producers (eight of whom 
are also handlers) in the regulated area and nine handlers (eight of 
whom are also producers) subject to regulation under the order. Small 
agricultural producers are defined by the Small Business Administration 
(13 CFR 121.201) as those having annual receipts of less than $750,000, 
and small agricultural service firms are defined as those having annual 
receipts of less than $7,000,000.
    According to the Committee, 825,617 hundredweight of Colorado Area 
No. 3 potatoes were produced for the fresh market during the 2007 
season. Based on National Agricultural Statistics Service (NASS) data, 
the average producer price for Colorado summer potatoes for 2007 was 
$7.75 per hundredweight. The average annual producer revenue for the 
nine Colorado Area No. 3 potato producers is therefore calculated to be 
approximately $710,948. Using Committee data regarding each individual 
handler's total shipments during the 2007-2008 fiscal period and a 
Committee estimated average f.o.b. price for 2007 of $9.95 per 
hundredweight ($7.75 per hundredweight plus estimated packing and 
handling costs of $2.20 per hundredweight), none of the Colorado Area 
No. 3 potato handlers ship over $7,000,000 worth of potatoes. Thus, the 
majority of handlers and producers of Colorado Area No. 3 potatoes may 
be classified as small entities.
    This rule provides for the handling of all varieties of potatoes 
with a minimum diameter of \3/4\ inch, if the potatoes otherwise meet 
the requirements of U.S. No. 1 grade. This change enables handlers to 
respond to consumer demand for small potatoes.
    The authority for regulating grade and size is provided in Sec.  
948.22 of the order. Section 948.387(a) of the order's administrative 
rules and regulations prescribes the actual size requirements.
    This rule is expected to have a beneficial impact on handlers and 
producers due to the increased volume of potatoes into the fresh 
market. There should be no extra cost to producers or handlers because 
current harvesting and handling methods can accommodate the sorting of 
these smaller potatoes. The size relaxation will result in a greater 
quantity of potatoes meeting the minimum requirements of the handling 
regulation. The Committee believes that this relaxation should 
translate into increased sales thus greater returns for handlers and 
producers.
    Neither NASS nor the Committee compiles statistics relating to the 
production of potatoes measuring much less than 1\7/8\ inches in 
diameter. The Committee has relied on information provided by producers 
and handlers familiar with the small potato market for its 
recommendation.
    As small potatoes have grown in popularity with consumers, the 
market demand has outpaced the quantity of small, high quality potatoes 
available from Colorado. The Committee believes that this regulatory 
relaxation will increase the available supply of small potatoes. The 
Committee also believes that these smaller potatoes will not compete 
directly with the market for larger fresh market potatoes and that this 
action will not adversely affect the overall Colorado potato market.
    By providing Colorado Area No. 3 handlers the flexibility to pack 
smaller potatoes, the Committee believes the industry will remain 
competitive in the marketplace. The small potato market is a premium 
market and this action is expected to further increase sales of 
Colorado potatoes to benefit the Colorado potato industry. The benefits 
of this rule are not expected to be disproportionately greater or 
lesser for small entities than for large entities.
    The Committee discussed alternatives to this recommendation, 
including not changing the minimum size requirement. Another 
alternative discussed was to use the term ``Creamer'' which is defined 
in the U.S. Standards for Grades of Potatoes as potatoes measuring from 
\3/4\ inches in diameter to 1\5/8\ inches in diameter. However, by not 
using either the terms ``Creamer'' and ``Size B'', or the resultant 
upper and lower size designations, the Committee intends handlers to 
have greater flexibility in marketing fresh potatoes. The Committee 
believes that this rule will benefit the industry by augmenting the 
developing market for small potatoes and enhancing returns to 
producers.
    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.
    Further, the Committee's meeting was widely publicized throughout 
the Colorado potato industry and all interested persons were invited to 
participate in Committee deliberations. Like all Committee meetings, 
the June 4 and November 17, 2009, meetings were public meetings 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 interim rule, including the

[[Page 17036]]

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/AMSv1.0/ams.fetchTemplateData.do?template=TemplateN&page=MarketingOrdersSmallBus
inessGuide. Any questions about the compliance guide should be sent to 
Antoinette Carter at the previously mentioned address in the FOR 
FURTHER INFORMATION CONTACT section.
    This rule invites comments on a relaxation of the size requirement 
prescribed under the Colorado potato marketing order. Any comments 
received will be considered prior to finalization of this rule.
    After consideration of all relevant material presented, including 
the Committee's recommendation, and other information, it is found that 
this interim rule, as hereinafter set forth, will tend to effectuate 
the declared policy of the Act.
    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 rule into 
effect and that good cause exists for not postponing the effective date 
of this rule until 30 days after publication in the Federal Register 
because: (1) Any changes resulting from this rule should be effective 
as soon as practicable because the Colorado Area No. 3 potato shipping 
season began in July; (2) the Committee discussed and unanimously 
recommended these changes at public meetings and all interested parties 
had an opportunity to provide input; (3) handlers are aware of this 
action and want to take advantage of this relaxation as soon as 
possible; and (4) this rule provides a 60-day comment period and any 
comments received will be considered prior to finalization of this 
rule.

List of Subjects in 7 CFR Part 948

    Marketing agreements, Potatoes, Reporting and recordkeeping 
requirements.

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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.  948.387, paragraph (a) is revised to read as follows:


Sec.  948.387  Handling regulation.

* * * * *
    (a) Grade and size requirements--All varieties.
    U.S. No. 2 or better grade, 1\7/8\ inches minimum diameter or 4 
ounces minimum weight: Provided That the minimum size may be \3/4\ inch 
in diameter, if the potatoes otherwise meet U.S. No. 1 grade.
* * * * *

    Dated: March 26, 2010.
David R. Shipman,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2010-7564 Filed 4-2-10; 8:45 am]
BILLING CODE P
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