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[Federal Register Volume 79, Number 36 (Monday, February 24, 2014)]
[Rules and Regulations]
[Pages 9984-9986]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-03900]

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 947

[Doc. No. AMS-FV-13-0036; FV13-947-1 FR]

Irish Potatoes Grown in Modoc and Siskiyou Counties, California, 
and in All Counties in Oregon, Except Malheur County; Termination of 
Marketing Order No. 947

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule, termination of order.

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SUMMARY: This final rule terminates Marketing Order No. 947 (order), 
which regulates the handling of Irish potatoes grown in Modoc and 
Siskiyou Counties, California, and in all counties in Oregon, except 
Malheur County, and the rules and regulations issued thereunder. The 
Department of Agriculture (USDA) has determined that the marketing 
order is no longer an effective marketing tool for the Oregon-
California potato industry, and that termination serves the current 
needs of the industry while also eliminating the costs associated with 
the operation of the marketing order.

DATES: Effective Date: February 25, 2014.

FOR FURTHER INFORMATION CONTACT: Melissa Schmaedick, Senior Marketing 
Specialist, or Michelle Sharrow, Rulemaking Branch Chief, 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: 
Melissa.Schmaedick@ams.usda.gov, or Michelle.Sharrow@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 action is governed by section 
608c(16)(A) of the Agricultural Marketing Agreement Act of 1937, as 
amended (7 U.S.C. 601-674), hereinafter referred to as the ``Act,'' and 
Sec.  947.71 of Marketing Agreement No. 114 and Marketing Order No. 
947, both as amended (7 CFR part 947), effective under the Act and 
hereinafter referred to as the ``order.''
    USDA is issuing this rule in conformance with Executive Orders 
12866 and 13563.
    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.
    This rule terminates Federal Marketing Order No. 947 and the rules 
and regulations issued thereunder. The order authorizes regulation of 
the handling of Oregon-California potatoes. At a meeting held in Salem, 
Oregon, on March 7, 2013, the Committee recommended termination of the 
order.
    Section 947.71 of the order provides, in pertinent part, that USDA 
terminate or suspend 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

[[Page 9985]]

that USDA terminate or suspend 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 at least 60 days before the date that the order would 
be terminated.
    The order has been in effect since 1942 and provides the Oregon-
California potato industry with authority to establish grade, size, 
maturity, quality, pack and inspection requirements. The order also 
authorizes the Committee to conduct marketing research and development 
projects, collect assessments, and establish reporting and 
recordkeeping requirements.
    Based on the Committee's recommendation, USDA suspended the order's 
handling, reporting, and assessment collection regulations effective 
July 1, 1999 (64 FR 49352). The suspended handling regulations (Sec.  
947.340) specify minimum quality requirements for potatoes produced 
within the regulated production area. When the Committee made the 
recommendation to suspend the handling regulations, the industry 
believed that the costs of inspections outweighed the benefits of 
having the regulatory requirements in effect. At that time, the 
Committee also suspended assessment collection because there were 
sufficient funds in the monetary reserve to support the Committee's 
administrative functions. Suspension of Sec. Sec.  947.247 and 947.180 
suspended the collection of assessments and the reporting provision 
that provided a basis for assessment collection. The Committee also 
decided to evaluate its finances and the marketing conditions annually 
thereafter to determine whether to continue with the suspension or take 
some other action.
    After almost 14 years of evaluating the effects of operating 
without the handling, reporting, and assessment collection regulations, 
the Committee has determined that suspension has not adversely impacted 
the Oregon-California potato industry. Marketing conditions and 
statistics show that the Oregon-California potato industry has steadily 
declined over the past several years, which led the Committee to 
conclude that the order is no longer an effective marketing tool. 
Termination would relieve the industry of the costs and burdens 
associated with the order.
    Evidence reflecting the industry's steady decline include 
statistics showing that the Oregon-California potato industry has fewer 
producers and handlers today than 30 years ago, and that acreage and 
production have significantly decreased. For example, USDA Marketing 
Order and Agreement Division records from a 1978 continuance referendum 
indicate that there were approximately 464 producers of potatoes in the 
order's production area, while the most recent information received 
from the Committee indicates that there are now only 130 active 
producers. Furthermore, Committee records indicate that there were 47 
handlers in 1978. Currently, there are only 16 handlers. Committee 
records also indicate that 6,810,195 hundredweight of Oregon-California 
potatoes were shipped in 1978 compared to shipments of 3,430,548 
hundredweight in 2011.

Final Regulatory Flexibility Analysis

    Pursuant to the 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 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 16 handlers of potatoes subject to regulation under the 
order and approximately 130 potato producers in the regulated 
production area. Small agricultural service firms 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 marketing year, the Committee reported that 
3,430,548 hundredweight of Oregon-California potatoes were shipped into 
the fresh market. Based on information from the National Agricultural 
Statistics Service, the average producer prices for Oregon and 
California potatoes in 2011 were $8.05 and $14.70 per hundredweight, 
respectively. Multiplying the 2011 shipment quantity times each of the 
two state's average producer price, the average gross annual revenue 
for the 130 Oregon-California potato producers is calculated to range 
between $212,430 and $387,916.
    Typical f.o.b. shipper prices were estimated to be about $2.00 
higher than the average grower price per hundredweight. The Committee 
estimated handler annual receipts from the sale of potatoes by 
multiplying the estimated shipper prices by individual handler shipment 
quantities. Based on those computations, the Committee estimated that 
15 out of the 16 handlers, approximately 94 percent, had annual 
receipts of less than $7,000,000. In view of the foregoing, the 
majority of Oregon-California potato producers and handlers may be 
classified as small entities.
    This rule terminates the Federal marketing order for Oregon-
California potatoes and the rules and regulations issued thereunder. 
The order authorized regulation of the handling of Oregon-California 
potatoes. The Committee has determined that the order is no longer an 
effective marketing tool for the Oregon-California potato industry. 
Evidence shows that suspension of the handling regulations has not 
adversely impacted the shipment of potatoes and that the costs 
associated with the order outweigh the benefits. The Committee also 
believes that the decline in the number of handlers and producers, and 
the acreage and volume of Oregon-California potatoes supports 
termination of the order. As a consequence, in a vote at a meeting on 
March 7, 2013, the Committee recommended that USDA terminate the order.
    Section 947.71 of the order provides that USDA terminate or suspend 
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, section 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 not later than 60 days before the date the order would be 
terminated.
    The proposed termination of the order is a regulatory relaxation 
and would reduce the costs to both handlers and producers (while 
marketing order requirements are applied to handlers, the costs of such 
requirements are often passed on to producers). Furthermore, following 
a period of approximately 14 years of regulatory suspension, the 
Committee has determined that termination of the order would not 
adversely impact the Oregon-California potato industry.
    The Committee considered alternatives to this rule, including 
continuing with the suspension of the handling regulations, which would 
require no regulatory action at this time;

[[Page 9986]]

however, this would require the Committee to continue collecting 
assessments and enforcing the reporting requirements. The Committee 
also considered requesting a producer continuance referendum. The 
Committee did not support either option, and instead recommended that 
the order be terminated.
    In accordance with the Paperwork Reduction Act of 1995, (44 U.S.C. 
Chapter 35), the information collection requirements being terminated 
were previously approved by the Office of Management and Budget (OMB) 
and assigned OMB No. 0581-0178, Generic Vegetable and Specialty Crops. 
Termination of the reporting requirements under the marketing order 
would reduce the reporting and recordkeeping burden on California and 
Oregon potato handlers by 316.42 hours, and should further reduce 
industry expenses.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap or conflict with this rule.
    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.
    A proposed rule inviting comments regarding the termination of 
Federal Marketing Order 947 was published in the Federal Register on 
July 22, 2013 (78 FR 43827). The Committee distributed the rule to 
handlers and producers. In addition, the rule was made available on the 
internet by the USDA and the Office of the Federal Register. The rule 
provided a 60-day comment period which ended on September 20, 2013. No 
comments were received.
    Based on the foregoing, and pursuant to section 608c(16)(A) of the 
Act and Sec.  947.71 of the order, it is hereby found that Federal 
Marketing Order 947 regulating the handling of Irish potatoes grown in 
Modoc and Siskiyou Counties, California, and in all counties in Oregon, 
except Malheur County, does not tend to effectuate the declared policy 
of the Act, and is therefore terminated.
    Section 8c(16)(A) of the Act requires USDA to notify Congress at 
least 60 days before terminating a Federal marketing order program. 
Congress was so notified on November 12, 2013. USDA hereby appoints 
Committee Chairman, Jay Hoffman; Committee Vice Chairman Troy Betz; Jim 
Baggenstos, Mark Campbell, John Cross, Todd Dimbat, Scott Fenters, Tad 
Kloepper, Michael Macy, Frank Prosser, Sidney Staunton, Dan Walchli, 
and Roy Wright as trustees to conclude and liquidate the affairs of the 
Committee, and to continue in such capacity until discharged.
    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: (1) This action relieves 
restrictions on handlers by terminating the requirements of the Irish 
potato order; (2) handling, reporting, and assessment collection 
regulations under the order have been suspended since 1999; (3) the 
Committee recommended termination, and all handlers and producers in 
the industry have been notified and provided an opportunity to comment; 
and (4) no useful purpose would be served by delaying the effective 
date.

List of Subjects in 7 CFR Part 947

    Marketing agreements, Potatoes, Reporting and recordkeeping 
requirements.

PART 947--[REMOVED]

0
For the reasons set forth in the preamble, and under authority of 7 
U.S.C. 601-674, 7 CFR part 947 is removed.

    Dated: February 18, 2014.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2014-03900 Filed 2-21-14; 8:45 am]
BILLING CODE 3410-02-P
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