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[Federal Register Volume 80, Number 77 (Wednesday, April 22, 2015)]
[Rules and Regulations]
[Pages 22359-22361]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-09289]

[[Page 22359]]

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 948 and 980

[Doc. No. AMS-FV-13-0073; FV13-948-3 FR]

Irish Potatoes Grown in Colorado and Imported Irish Potatoes; 
Relaxation of the Handling Regulation for Area No. 2 and Import 
Regulations

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule revises the minimum quantity exception for potatoes 
handled under the Colorado potato marketing order, Area No. 2 (order). 
The order regulates the handling of Irish potatoes grown in Colorado 
and is administered locally by the Colorado Potato Administrative 
Committee, Area No. 2 (Committee). This action increases the quantity 
of potatoes that may be handled under the order without regard to the 
order's handling regulation requirements from 1,000 to 2,000 pounds. 
The change in the import regulation is required under section 8e of the 
Agricultural Marketing Agreement Act of 1937. This action allows for 
the importation which, in the aggregate, does not exceed 2,000 pounds 
for all other round type potatoes, except red skinned, round type or 
long type potatoes that continue to remain at a 500 pound limit, to be 
imported without regard to the import regulations. This action is 
expected to benefit producers, handlers, and importers.

DATES: Effective date: April 27, 2015.

FOR FURTHER INFORMATION CONTACT: Sue Coleman, Marketing Specialist, or 
Gary D. 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: 
Sue.Coleman@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 final 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.''
    This final rule is also issued under section 8e of the Act, which 
provides that whenever certain specified commodities, including Irish 
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 rule in 
conformance with Executive Orders 12866, 13563, and 13175.
    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. 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.
    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.
    This final rule revises the minimum quantity exception currently 
prescribed in the handling regulation for potatoes handled under 
Marketing Order No. 948. This rule increases the quantity of potatoes 
that may be handled without regard to the order's handling regulation 
from 1,000 to 2,000 pounds. Relaxing the minimum quantity exception is 
expected to benefit producers, handlers, and importers. The rule was 
unanimously recommended by the Committee at a meeting on July 18, 2013.
    Section 948.4 of the order divides the State of Colorado into three 
areas of regulation for marketing order purposes. These areas include: 
Area No. 1, commonly known as the Western Slope; Area No. 2, commonly 
known as San Luis Valley; and, Area No. 3, which consists of the 
remaining producing areas within the State of Colorado not included in 
the definition of Area No. 1 or Area No. 2. Currently, the order only 
regulates the handling of potatoes produced in Area No. 2 and Area No. 
3. Regulation for Area No. 1 has been suspended.
    Section 948.50 of the order establishes committees as 
administrative agencies for each of the areas set forth under Sec.  
948.4. Section 948.22(a) of the order authorizes the issuance of grade, 
size, quality, maturity, pack, and container regulations for potatoes 
grown in the order's production area. Further, Sec.  948.22(b)(2) of 
the order provides authority for each area committee to recommend 
modification of regulations to provide for minimum quantities that 
should be relieved of regulatory or administrative obligations.
    Section 948.386 of the order's administrative rules prescribes 
grade, size, maturity, and inspection requirements for Colorado Area 
No. 2 potatoes. Paragraph (f) of that section prescribes the minimum 
quantity of potatoes that are exempt from regulation. Currently, each 
person may handle up to 1,000 pounds of potatoes without regard to the 
order's grade, size, maturity, and inspection requirements.
    At its meeting on July 18, 2013, the Committee unanimously 
recommended increasing the order's minimum quantity exception from 
1,000 to 2,000 pounds. The recommendation was made at the request of 
producers and handlers who wanted greater flexibility in distributing 
smaller quantities of potatoes. In its deliberations, the Committee 
commented that 2,000 pounds is consistent with the current weight of a 
pallet of potatoes. One pallet is typically the smallest lot of 
potatoes distributed, since most delivery vehicles are now capable of 
transporting at least 2,000 pounds.
    Handlers also feel that the value of one pallet of potatoes does 
not warrant the cost of complying with the order's regulations. Based 
on an estimated average f.o.b. price of $12.60, the value of one pallet 
of potatoes is approximately $252.00. Increasing the minimum quantity 
exception from 1,000 to 2,000 pounds of potatoes allows a handler to 
ship one pallet of potatoes without regard to the order's grade, size, 
maturity, and inspection requirements. Relaxing the minimum quantity is

[[Page 22360]]

expected to benefit producers, handlers, and importers.
    Section 8e of the Act provides that when certain domestically 
produced commodities, including Irish potatoes, are regulated under a 
Federal marketing order, imports of that commodity must meet the same 
or comparable grade, size, quality, and maturity requirements. Whenever 
two or more marketing orders regulating the same commodity produced in 
different areas of the United States are concurrently in effect, the 
importation into the United States of any such commodity shall be 
prohibited unless it complies with the grade, size, quality and 
maturity provisions of the order which, as determined by the Secretary 
of Agriculture, regulates the commodity produced in the area with which 
the imported commodity is in most direct competition (7 U.S.C. 608e-
1(a)). Section 980.1(a)(2)(ii) of the Vegetable Import Regulations 
specifies that imported round-type potatoes, except red-skinned, round 
type potatoes, are in most direct competition with potatoes of the same 
type produced in the area covered by Marketing Order 948. Since this 
action increases the minimum quantity exemption under the domestic 
handling regulations, a corresponding change to the import regulations 
must also be considered.
    Minimum grade, size, quality, and maturity requirements for Irish 
potatoes imported into the United States are currently in effect under 
Sec.  980.1 (7 CFR 980.1). The minimum quantity exemption is specified 
in Sec.  980.1(c). The exemption for red skinned, round type or long 
type potatoes will remain at a 500 pound limit as provided in Marketing 
Orders 946 and 945, respectively. This rule increases the quantity for 
all other round type potatoes that may be imported without regard to 
the import regulation requirements from 1,000 to 2,000 pounds. The 
metric equivalent for 1,000 pounds is 453.592 kilograms and 2,000 
pounds is 907.185 kilograms. The increase in the minimum quantity 
exemption for imports of potatoes will have a beneficial impact on 
importers. This rule will provide flexibility in the importation and 
distribution of smaller quantities 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, 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 80 handlers of Colorado Area No. 2 potatoes 
subject to regulation under the order and approximately 180 producers 
in the regulated production area. There are approximately 240 importers 
of potatoes. Small agricultural service firms (handlers and importers) 
are defined by the Small Business Administration (SBA) 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).
    During the 2011-2012 fiscal period, the most recent for which 
statistics are available, 15,072,963 hundredweight of Colorado Area No. 
2 potatoes were inspected under the order and sold into the fresh 
market. Based on an estimated average f.o.b. price of $12.60 per 
hundredweight, the Committee estimates that 66 Area No. 2 handlers, or 
about 83 percent, had annual receipts of less than $7,000,000. In view 
of the foregoing, the majority of 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 
2011 Colorado fall potato crop was $10.70 per hundredweight. 
Multiplying $10.70 by the shipment quantity of 15,072,963 hundredweight 
yields an annual crop revenue estimate of $161,280,704. The average 
annual fresh potato revenue for each of the 180 Colorado Area No. 2 
potato producers is therefore calculated to be approximately $896,000 
($161,280,704 divided by 180), which is greater than the SBA threshold 
of $750,000. Consequently, on average, many of the Colorado Area No. 2 
potato producers may not be classified as small entities.
    Information from the Foreign Agricultural Service, USDA, indicates 
that the dollar value of imports of the type of potatoes affected by 
this rule ranged from approximately $55.8 million in 2009 to $ 56.5 
million in 2013. Using these values, the majority of importers of the 
type of potatoes affected by this rule would have annual receipts of 
less than $7,000,000 and may be classified as small entities.
    Canada is the major potato-producing country exporting potatoes to 
the United States. In 2013, affected shipments of potatoes imported 
into the United States totaled around 3,479,468 hundredweight. Of that 
amount, 3,479,383 hundredweight were imported from Canada, 59 
hundredweight were imported from Ecuador, and 26 hundredweight were 
imported from Peru.
    This final rule revises the quantity of potatoes that may be 
handled without regard to the requirements of Sec.  948.386(a), (b), 
and (c) of the order from 1,000 to 2,000 pounds and makes a 
corresponding change to the potato import regulation. At the July 18, 
2013 meeting, the Committee unanimously recommended increasing the 
minimum quantity exception to be consistent with the approximate weight 
of one pallet of potatoes. Authority for the establishment and 
modification of a minimum quantity exception is provided in Sec.  
948.22(b)(2) of the order. This final rule amends the provisions in 
Sec. Sec.  948.386(f) and 980.1(c). The change in the import regulation 
is required under section 8e of the Act.
    This action is not expected to increase the costs associated with 
the order's requirements or the potato import regulation. Rather, it is 
anticipated that this change will have a beneficial impact. The 
Committee believes it will provide greater flexibility in the 
distribution of small quantities of potatoes. Currently, the 
distribution of potatoes between 1,000 and 2,000 pounds requires an 
inspection and certification that the product conforms to the grade, 
size, and maturity requirements of the order. This translates into a 
cost for handlers and importers of both time and inspection fees, which 
is high in relation to the small value (approximately $252.00 per 
pallet) of these transactions. This action will allow shipments up to 
2,000 pounds of potatoes without regard to the order's grade, size, 
maturity, and inspection requirements and the related costs. The 
benefits for this final rule are expected to be equally available to 
all fresh potato producers, handlers, and importers, regardless of 
their size.
    As an alternative to the proposal, the Committee discussed leaving 
the handling regulation unchanged. The Committee rejected this idea 
because a pallet of potatoes weighs approximately 2,000 pounds and the 
1,000 pound minimum quantity exception did not accommodate this size 
shipment. No other alternatives were discussed.

[[Page 22361]]

    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). No 
changes in those requirements as a result of this action are necessary. 
Should any changes become necessary, they would be submitted to OMB for 
approval.
    This final rule relaxes the minimum quantity exception under the 
order from 1,000 to 2,000 pounds. Accordingly, this action will not 
impose any additional reporting or recordkeeping requirements on either 
small or large Colorado Area No. 2 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.
    As noted in the initial regulatory flexibility analysis, 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.
    In addition, the Committee's meeting was widely publicized 
throughout the Colorado Area No. 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 July 18, 
2013, meeting was a public meeting and all entities, both large and 
small, were able to express views on this issue.
    A proposed rule concerning this action was published in the Federal 
Register on October 6, 2014 (79 FR 60117). Copies of the rule were made 
available to all interested Colorado potato producers and handlers. 
Finally, the rule was made available through the Internet by USDA and 
the Office of the Federal Register. A 60-day comment period ending 
December 5, 2014, was provided to allow interested persons to respond 
to the proposal. No comments were received.
    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/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.
    In accordance with section 8e of the Act, the United States Trade 
Representative has concurred with the issuance of this final rule.
    After consideration of all relevant matter presented, including the 
information and recommendation submitted by the Committee and other 
available information, it is hereby found that this rule, as 
hereinafter set forth, will tend to effectuate the declared policy of 
the Act.
    It is further found that good cause exists for not postponing the 
effective date of this rule until 30 days after publication in the 
Federal Register (5 U.S.C. 553) because handlers are already shipping 
potatoes from the 2014-2015 crop and handlers want to take advantage of 
the relaxation as soon as possible. Further, handlers are aware of this 
rule, which was recommended at a public meeting. Also, a 60-day comment 
period was provided for in the proposed rule and no comments were 
received.

List of Subjects

7 CFR Part 948

    Marketing agreements, Potatoes, Reporting and recordkeeping 
requirements.

7 CFR Part 980

    Food grades and standards, Imports, Marketing agreements, Onions, 
Potatoes, Tomatoes.

    For the reasons set forth above, 7 CFR parts 948 and 980 are 
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. Amend Sec.  948.386(f) to read as follows:

Sec.  948.386  Handling regulation.

* * * * *
    (f) Minimum quantity. For purposes of regulation under this part, 
each person may handle up to but not to exceed 2,000 pounds of potatoes 
without regard to the requirements of paragraphs (a), (b), and (c) of 
this section, but this exception shall not apply to any shipment which 
exceeds 2,000 pounds of potatoes.
* * * * *

PART 980--VEGETABLES; IMPORT REGULATIONS

0
3. The authority citation for 7 CFR part 980 continues to read as 
follows:

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

0
4. In Sec.  980.1, paragraph (c) is revised to read as follows:

Sec.  980.1  Import regulations; Irish potatoes.

* * * * *
    (c) Minimum quantities. Any importation which, in the aggregate, 
does not exceed 500 pounds of red skinned, round type or long type 
potatoes, or 2,000 pounds for all other round type potatoes, may be 
imported without regard to the provisions of this section.
* * * * *

    Dated: April 16, 2015.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2015-09289 Filed 4-21-15; 8:45 am]
 BILLING CODE 3410-02-P
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