```

[Federal Register Volume 78, Number 205 (Wednesday, October 23, 2013)]
[Rules and Regulations]
[Pages 62967-62970]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-24814]

[[Page 62967]]

-----------------------------------------------------------------------

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 946

[Doc. No. AMS-FV-13-0067; FV13-946-2 IR]

Irish Potatoes Grown in Washington; Temporary Change to the 
Handling Regulations and Reporting Requirements for Yellow Fleshed and 
White Types of Potatoes

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim rule with request for comments.

-----------------------------------------------------------------------

SUMMARY: This rule temporarily exempts yellow fleshed and white skin 
(white types) potatoes from minimum quality, maturity, pack, marking, 
and inspection requirements under the Washington potato marketing order 
through June 30, 2014. The marketing order regulates the handling of 
Irish potatoes grown in Washington and is administered locally by the 
State of Washington Potato Committee (Committee). During the temporary 
exemption period, reports will be required from handlers of yellow 
fleshed and white types of potatoes to obtain information necessary to 
administer the marketing order. This rule is expected to reduce overall 
industry expenses and increase net returns to producers and handlers 
while giving the industry the opportunity to explore alternative 
marketing strategies.

DATES: Effective October 24, 2013; comments received by December 23, 
2013 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 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 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 comments will be made public on the internet at the 
address provided above.

FOR FURTHER INFORMATION CONTACT: Teresa Hutchinson, Marketing 
Specialist, or Gary 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: Teresa.Hutchinson@ams.usda.gov or GaryD.Olson@ams.usda.gov.
    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: Jeffrey.Smutny@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order 
No. 946, as amended (7 CFR part 946), regulating the handling of Irish 
potatoes grown in Washington, 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 and Executive Order 13563.
    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 
entry of the ruling.
    This rule temporarily exempts yellow fleshed and white types of 
potatoes from the order's handling regulations through June 30, 2014. 
This rule allows the Washington potato industry to market yellow 
fleshed and white types of potatoes without regard to the minimum 
quality, maturity, pack, marking, and inspection requirements currently 
prescribed under the order.
    This rule also modifies the order's reporting requirements to 
require reports from handlers of yellow fleshed and white types of 
potatoes through June 30, 2014. By modifying the reporting 
requirements, the Committee can continue to obtain information 
necessary to administer the marketing order, including the collection 
of assessments, in the absence of inspection certificates and reports 
issued by the Federal State Inspection Service (FSIS). Assessments on 
all fresh yellow fleshed and white types of potatoes handled under the 
order will remain in effect during the temporary exemption.
    The order authorizes the establishment of handling regulations for 
all varieties or varietal types of potatoes grown in the production 
area. These regulations can include minimum grade, size, quality, or 
maturity requirements. They can also stipulate the size, capacity, 
weight, dimensions, pack, marking, or labeling of containers used in 
the handling of such potatoes. The order also allows the handling 
regulations to be modified, suspended, or terminated when recommended 
by the Committee and approved by the Secretary.
    When handling regulations are in effect, regulated potatoes must be 
inspected and certified by FSIS. As authorized under the order, the 
Committee uses information included on FSIS inspection certificates as 
a basis for collecting assessments and compiling industry statistics. 
Because this action exempts yellow fleshed and white types of potatoes 
from FSIS inspection and certification, the industry must collect 
necessary information from an alternate source. Therefore, this action 
also modifies current reporting requirements to require handlers to 
submit reports to provide information on the volume of yellow fleshed 
and white types of potatoes handled for the fresh market during the 
exemption period.
    The above-described authorities are found in Sec. Sec.  946.51, 
946.52, 946.60, and 946.70 of the order. Supporting rules and 
regulations for these authorities are found in Sec. Sec.  946.143 and 
946.336.
    The Committee meets regularly to consider the effectiveness of 
regulatory requirements in place for Washington potatoes. These 
requirements are issued on a continuing basis and are subject to 
modification, suspension, or termination upon recommendation of the 
Committee and approval by USDA. Committee meetings are open to the 
public, and interested persons may

[[Page 62968]]

express their views at these meetings. USDA reviews recommendations 
made by the Committee, along with any additional information submitted 
by the Committee and other available information, and determines 
whether such recommendations would tend to effectuate the declared 
policy of the Act.
    On May 9, 2013, the Committee met to discuss the handling 
regulations and the mandatory inspection requirements in effect for 
Washington potatoes. The Committee considered whether a short-term 
exemption of yellow fleshed and white types of potatoes from regulation 
could be beneficial. The industry is concerned that the benefits of 
regulating the quality of Washington potatoes may be outweighed by the 
current cost of mandatory inspections.
    After much consideration, on July 16, 2013, the Committee 
unanimously recommended temporarily exempting yellow fleshed and white 
types of potatoes from the handling regulations and modifying the 
reporting requirements for such potatoes. The temporary exemption was 
recommended for the duration of the current fiscal period so that the 
industry can evaluate the exemption's effects on the marketing of 
potatoes.
    As a result of this exemption, yellow fleshed and white types of 
potatoes will not be subject to the minimum grade, size, quality, 
cleanness, maturity, pack, marking, and inspection requirements of the 
order through June 30, 2014. Also during this time, modified reporting 
requirements will be in effect to require handlers to submit reports of 
their shipments of fresh yellow fleshed and white types of potatoes to 
the Committee.
    Historically, an objective of the order's handling regulations has 
been to ensure that only quality Washington potatoes enter the fresh 
market, thereby fostering consumer satisfaction, and increasing sales 
and returns for producers. While the industry recognizes that quality 
is an important factor for maintaining sales, the Committee believes 
the cost of mandatory inspections may exceed the benefits derived from 
the quality regulation of yellow fleshed and white types of potatoes.
    The cost for inspections has increased. With potato prices at 
reportedly low levels in recent years, the Committee studied the 
possibility of reducing production costs by eliminating the mandatory 
inspection requirement. In evaluating the relative benefits of quality 
control, some individuals expressed concern that eliminating quality 
requirements could result in lower quality potatoes being shipped to 
the fresh market, thereby negatively affecting consumer demand. Others 
expressed concern that without minimum requirements the overall quality 
of potatoes could decline and the Washington potato industry could lose 
sales to other potato producing areas with mandatory quality and 
inspection requirements.
    With these concerns in mind, combined with the desire to explore 
alternative strategies, the Committee recommended that yellow fleshed 
and white types of potatoes be temporarily exempted from the 
regulations through June 30, 2014. This will allow the Committee to 
study the impacts of not having handling regulations and consider 
appropriate actions for ensuing seasons. Therefore, this rule modifies 
Sec.  946.336 to temporarily exempt yellow fleshed and white types of 
potatoes from handling regulations through June 30, 2014. This rule 
does not restrict handlers from seeking inspection on a voluntary 
basis, if they so choose.
    This action will result in a temporary suspension of the monthly 
FSIS inspection reports for yellow fleshed and white types of potatoes. 
The Committee has utilized these monthly reports, compiled by FSIS from 
inspection certificates, as a basis for collecting assessments. During 
the temporary exemption period, handlers will be required to report 
fresh shipments of yellow fleshed and white types of potatoes directly 
to the Committee on an existing form that is being modified for this 
purpose. This information will allow the Committee to collect 
assessments and compile industry statistics.
    Therefore, this rule modifies Sec.  946.143 to require that each 
person handling yellow fleshed and white types of potatoes submit a 
monthly report to the Committee. The reporting requirement was 
originally established in 2010 to facilitate the exemption of russet 
type potatoes from the handling regulations. It will be modified to 
include the collection of information for yellow fleshed and white 
types of potatoes.
    Authorization to assess handlers enables the Committee to incur 
expenses that are reasonable and necessary to administer the program. 
The modified reporting requirement will facilitate the Committee's 
ability to continue collecting the funds needed to cover necessary 
program costs.

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.
    There are 43 handlers of Washington potatoes subject to regulation 
under the order and approximately 267 producers in the regulated 
production area. Small agricultural service firms are defined by the 
Small Business Administration 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)
    For the 2011-2012 marketing year, the Committee reports that 
11,018,670 hundredweight of Washington potatoes were shipped into the 
fresh market. Based on average f.o.b. prices estimated by the USDA's 
Economic Research Service and Committee data on individual handler 
shipments, the Committee estimates that 42, or approximately 98 percent 
of the handlers, had annual receipts of less than $7,000,000.
    In addition, based on information provided by the National 
Agricultural Statistics Service, the average producer price for 
Washington potatoes for 2011-2012 was $7.90 per hundredweight. The 
average gross annual revenue for the 267 Washington potato producers is 
therefore calculated to be approximately $326,021. In view of the 
foregoing, the majority of Washington potato handlers and producers may 
be classified as small entities.
    This rule exempts yellow fleshed and white types of potatoes from 
the handling regulations and modifies the reporting requirements 
through June 30, 2014. The industry is concerned that the cost of 
mandatory inspections, which have increased, may outweigh the benefits 
of having the quality regulations in place. This change is expected to 
reduce overall industry expenses and provide the industry with the 
opportunity to explore alternative marketing strategies.
    The authority for regulation is provided in Sec.  946.52 of the 
order, while authority for reports and records is provided in Sec.  
946.70. In addition, the handling regulations are specified under Sec.  
946.336 of the order's administrative

[[Page 62969]]

rules and regulations, and reporting requirements are specified under 
Sec.  946.143.
    The Committee does not anticipate that this rule will negatively 
impact small businesses. This rule will temporarily exempt yellow 
fleshed and white types of potatoes from minimum quality, maturity, 
pack, marking, and inspection requirements for the current fiscal 
period. Though inspections are not mandatory for such potatoes during 
the exemption period, handlers may choose to have their potatoes 
inspected. Handlers are thus able to control costs based on the demands 
of their customers.
    The Committee discussed alternatives to this recommendation, 
including not making any changes to the regulations. The Committee also 
considered different types of inspection programs, exempting all types 
of potatoes from handling regulations, and exempting yellow fleshed and 
white types from regulation indefinitely instead of temporarily. 
However, the Committee believes that the temporary exemption for yellow 
fleshed and white types of potatoes will give handlers the opportunity 
to explore alternative marketing strategies for one fiscal period, and 
give the Committee the opportunity to revisit the situation in the 
future.
    The Committee identified no other alternatives to requiring 
handlers to report fresh market shipments of yellow fleshed and white 
types of potatoes. This information is necessary to administer the 
program, including the collection of assessments.
    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.
    This rule requires the submission of a monthly handler report for 
fresh yellow fleshed and white types potatoes handled during the 
exemption period. This rule modifies the Russet Fresh Potato Report 
established for russet type potatoes to include yellow fleshed and 
white types of potatoes during the period those types of potatoes are 
exempted from regulation. The modified Self-Reporting Potato Form will 
provide the Committee with information necessary to track shipments and 
collect assessments. AMS has submitted the modified form and a 
Justification of Change to OMB for approval.
    While this rule requires a reporting requirement for yellow fleshed 
and white types of potatoes, their exemption from handling regulations 
also eliminates the more frequent reporting requirements imposed under 
the order's special purpose shipment exemptions (Sec.  946.336(d) and 
(e)). Under these paragraphs, handlers are required to provide detailed 
reports whenever they divert regulated potatoes for livestock feed, 
charity, seed, prepeeling, processing, grading and storing in specified 
counties in Oregon, and experimentation.
    Therefore, any additional reporting or recordkeeping requirements 
on either small or large handlers of yellow fleshed and white types of 
potatoes are expected to be offset by the elimination of the other 
reporting requirements currently in effect. In addition, the temporary 
exemption from handling regulations and inspection requirements for 
yellow fleshed and white types of potatoes is expected to reduce 
industry expenses.
    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 rule.
    The Committee's meetings were widely publicized throughout the 
Washington potato industry and all interested persons were invited to 
participate in Committee deliberations. Like all Committee meetings, 
the May 9, and July 16, 2013, meetings were public meetings. All 
entities, both large and small, were able to express views on this 
issue. Further, interested persons are invited to submit comments on 
this interim 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: 
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.
    This interim rule invites comments on the temporary exemption from 
handling regulations and the modification of the reporting requirements 
for yellow fleshed and white types of potatoes. 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 shipping season for Washington 
yellow fleshed and white types of potatoes began in July of 2013; (2) 
the Committee discussed and unanimously recommended these changes at a 
public meeting and all interested parties had an opportunity to provide 
input; (3) potato handlers are aware of this action and want to take 
advantage of relaxation of the handling regulations 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 946

    Marketing agreements, Potatoes, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 946 is 
amended as follows:

PART 946--IRISH POTATOES GROWN IN WASHINGTON

0
1. The authority citation for 7 CFR part 946 continues to read as 
follows:

    Authority:  7 U.S.C. 601-674.

0
2. Section 946.143 is revised to read as follows:

Sec.  946.143  Assessment reports.

    During the period that russet, yellow fleshed, and white types of 
potatoes are exempt from handling requirements under Sec.  946.336, 
each person handling russet, yellow fleshed and white types of potatoes 
shall submit a monthly report to the Committee by the 10th day of the 
month following the month such potatoes are handled. Each assessment 
report shall contain the following information:
    (a) The name and address of the handler;
    (b) The date and quantity of russet, yellow fleshed, and white 
types of potatoes handled;
    (c) The assessment payment due; and
    (d) Other information as may be requested by the Committee.

0
3. The introductory text of Sec.  946.336 is revised to read as 
follows:

[[Page 62970]]

Sec.  946.336  Handling regulation.

    No person shall handle any lot of potatoes unless such potatoes 
meet the requirements of paragraphs (a), (b), (c), and (g) of this 
section or unless such potatoes are handled in accordance with 
paragraphs (d) and (e), or (f) of this section, except that shipments 
of the blue or purple flesh varieties of potatoes shall be exempt from 
both this handling regulation and the assessment requirements specified 
in Sec.  946.41: Provided, That russet type potatoes shall be exempt 
from the requirements of paragraphs (a), (b), (c), (e), and (g) of this 
section: Provided further, That, from October 24, 2013, through June 
30, 2014, yellow fleshed and white types of potatoes shall be exempt 
from the requirements of paragraphs (a), (b), (c), (e), and (g) of this 
section.
* * * * *

    Dated: October 17, 2013.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2013-24814 Filed 10-22-13; 8:45 am]
BILLING CODE 3410-02-P
```