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[Federal Register Volume 75, Number 141 (Friday, July 23, 2010)]
[Rules and Regulations]
[Pages 43042-43045]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-18091]

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 946

[Doc. No. AMS-FV-10-0052; FV10-946-1 IR]

Irish Potatoes Grown in Washington; Temporary Change to the 
Handling Regulations and Reporting Requirements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim rule with request for comments.

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SUMMARY: This rule suspends, for the 2010-2011 season only, the minimum 
quality, maturity, pack, marking, and inspection requirements currently 
prescribed for russet potato varieties under the Washington potato 
marketing order. 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 suspension of 
the russet potato handling regulation, reports from handlers will be 
required for the purpose of obtaining 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 allowing the industry the opportunity to explore alternative 
marketing strategies.

DATES: Effective July 24, 2010; comments received by September 21, 2010 
will be considered prior to issuance of a final rule. Pursuant to the 
Paperwork Reduction Act, comments on the information collection burden 
must be received by September 21, 2010.

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 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.
    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 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 suspends the order's handling regulation for russet 
potato varieties for the 2010-2011 season. This rule allows the 
Washington potato industry to market russet potatoes without regard to 
the minimum quality, maturity, pack, marking, and inspection 
requirements currently prescribed under the Washington potato marketing 
order. It is intended that the suspension will apply to the season 
beginning on July 1, 2010, and continuing through June 30, 2011. The 
minimum quality, maturity, pack, marking, and inspection requirements 
will resume July 1, 2011, for the 2011-2012 season and continue unless 
modified, suspended, or terminated.
    This rule also establishes a new reporting requirement for russet 
potatoes handled during the same 12 month period. As assessments will 
remain in effect on all fresh russet potatoes handled under the order, 
reporting requirements will allow the Committee to obtain information 
necessary to facilitate assessment collection.

[[Page 43043]]

    Section 946.52 of the order authorizes the establishment of grade, 
size, quality, or maturity regulations for any variety or varieties of 
potatoes grown in the production area. Section 946.52 also authorizes 
regulation of the size, capacity, weight, dimensions, pack, and marking 
or labeling of the container, or containers, which may be used in the 
packing or handling of potatoes, or both. Section 946.51 further 
authorizes the modification, suspension, or termination of regulations 
issued under Sec.  946.52. Section 946.60 provides that whenever 
potatoes are regulated pursuant to Sec.  946.52 such potatoes must be 
inspected by the Federal State Inspection Program (FSIP), and certified 
as meeting the applicable requirements of such regulations.
    Section 946.70 authorizes the Committee, with the approval of USDA, 
to require information from handlers that will enable the Committee to 
exercise its duties under the order.
    Section 946.336 of the order's administrative rules and regulations 
prescribes the grade, size, quality, cleanness, maturity, pack, 
marking, and inspection requirements for fresh market Washington 
potatoes.
    The Committee meets regularly to consider recommendations for 
modification, suspension, or termination of the regulatory requirements 
for Washington potatoes 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, information submitted by the Committee, and other 
available information, and determines whether modification, suspension, 
or termination of the regulatory requirements would tend to effectuate 
the declared policy of the Act.
    At its January 26, 2010, meeting, the Committee was asked to 
evaluate the benefits of handling regulations and mandatory inspection 
for Washington potatoes. As a consequence, the Committee formed a 
subcommittee that met on May 11, 2010, to consider the implications of 
regulatory and inspection requirement suspension. Subsequently, at its 
June 1, 2010, meeting, the Committee unanimously recommended suspending 
the handling regulation for russet potatoes for the period beginning 
July 1, 2010, and ending on June 30, 2011, as well as establishing a 
requirement that handlers report their russet potato shipments during 
this period to the Committee on a specially developed form.
    Historically, an objective of the order's handling regulations has 
been to ensure that quality Washington potatoes enter the fresh market, 
thereby ensuring consumer satisfaction, increased sales, and improved 
returns to producers. While the industry continues to support quality 
as an important factor in maintaining sales, the Committee believes the 
cost of inspection (mandated when the handling regulations are in 
effect) may exceed the benefits derived from the russet potato quality 
regulations.
    With russet potato prices reportedly at low levels in recent years, 
the Committee, as noted earlier, has been studying the possibility of 
reducing costs through the elimination of mandatory inspection. In 
evaluating the relative benefits of quality control versus a 
regulation-free market, some concern was expressed at the meeting that 
elimination of the quality requirements could result in low quality 
potatoes being shipped to the fresh market, thereby negatively 
affecting consumer demand. Also, there is some concern that overall 
quality of the product may decline, and that the Washington potato 
industry could lose russet potato sales to production areas that are 
covered by quality and inspection requirements. Furthermore, because 
russet potatoes comprise about 76 percent of the fresh market 
Washington potato crop, the Committee is concerned about future 
availability of inspection services if the FSIP reduced staff as a 
result of the decrease in the demand for their services. With these 
concerns in mind, and having the desire to explore the benefits of non-
regulation, the Committee recommended that the suspension of the russet 
potato handling regulation be effective for a temporary period only. 
This will enable the Committee to study the impacts of the suspension 
and consider appropriate actions for ensuing seasons.
    This rule permits handlers to ship russet potatoes without regard 
to minimum quality, maturity, pack, marking, and inspection 
requirements for the period July 1, 2010, through June 30, 2011. 
Although this rule provides russet potato handlers the opportunity to 
decrease their total costs by elimination of the expenses associated 
with mandatory inspection, it does not restrict handlers from seeking 
inspection on a voluntary basis. The Committee will evaluate the 
temporary regulatory suspension at its next meeting.
    This action will result in the elimination of the monthly FSIP 
inspection report for russet potatoes. The Committee uses these monthly 
reports--compiled by the FSIP from inspection certificates--as a basis 
for assessment collection. During the suspension of the regulations for 
russet potatoes, the Committee will require handler reports specific to 
russet potato shipments in order to collect assessments and to compile 
statistics.
    Therefore, a new Sec.  946.143 Assessment reports is added to the 
administrative rules and regulations requiring each person handling 
russet type potatoes to submit a monthly report to the Committee 
containing the following information: (a) The name and address of the 
handler; (b) the date and quantity of russet potatoes shipped; (c) the 
assessment payment due; and (d) other information as may be requested 
by the Committee. The first report shall include all required 
information from the effective date of this rule through the end of the 
month in which the assessment report information is approved by the 
Office of Management and Budget.
    Authorization to assess handlers enables the Committee to incur 
expenses that are reasonable and necessary to administer the program. 
This reporting requirement will enable the Committee to continue 
collecting the funds needed to cover necessary program costs. Although 
adding reporting requirements, this rule, through the suspension of the 
handling regulation and thereby inspection, is expected to reduce 
overall industry expenses.

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.
    There are 45 handlers of Washington potatoes subject to regulation 
under the order (inclusive of the 33 russet potato handlers) and 
approximately 267 producers in the regulated production area. Small 
agricultural service firms are defined by the Small Business 
Administration (13 CFR 121.201) as those having annual receipts of less 
than $7,000,000, and small agricultural

[[Page 43044]]

producers are defined as those having annual receipts of less than 
$750,000.
    During the 2008-2009 marketing year, the Committee reports that 
10,279,734 hundredweight of Washington potatoes were shipped into the 
fresh market. Based on the USDA Economic Research Service estimate that 
the 2008 average f.o.b. price for fresh domestic potatoes was $8.42 per 
hundredweight, the average gross returns for each of the 45 handlers 
was less than $2,000,000.
    In addition, based on information provided by the National 
Agricultural Statistics Service, the average producer price for 
Washington potatoes for 2009 was $7.10 per hundredweight. The average 
gross annual producer revenue for each of the 267 Washington potato 
producers is therefore calculated to be approximately $273,356. In view 
of the foregoing, the majority of Washington potato producers and 
handlers may be classified as small entities.
    This rule suspends the handling regulation and establishes 
reporting requirements for russet type potatoes for the period 
beginning July 1, 2010, and ending June 30, 2011. This change is 
expected to reduce overall industry expenses while providing 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 regulation is specified under Sec.  
946.336 of the order's administrative rules and regulations.
    The Committee anticipates that this rule will not negatively impact 
small businesses. This rule will suspend minimum quality, maturity, 
pack, marking, and inspection requirements. Though inspections will not 
be mandated for russet potatoes handled under the order, handlers may 
at their discretion choose to have their potatoes inspected. Handlers 
are thus able to control costs--which are generally passed on to 
producers--based on the demands of their customers. The Committee 
reports that during the 2008-2009 season, the total cost of 
inspection--at $0.07 per hundredweight for the approximately 7,800,000 
hundredweight of Washington russet potatoes shipped--was about 
$546,000. This is approximately $12,133 per handler.
    The Committee discussed alternatives to this recommendation. Other 
than not recommending any changes to the regulations, the Committee 
considered temporarily suspending the handling regulation for all types 
of potatoes, not just russet type potatoes. However, the Committee 
believes that it is beneficial to the industry to maintain the handling 
regulation and inspection requirements for round type potatoes. The 
Committee reports that round type potatoes generally command premium 
prices. The Washington potato industry believes that the order's round 
potato quality regulations, in conjunction with mandatory inspections, 
are valuable marketing tools. Therefore, the Committee recommended 
suspending the handling regulation for russet potatoes only.
    An alternative to establishing the reporting requirements would 
have been relieving handlers from paying assessments on shipments of 
russet potatoes. Approximately 76 percent of the fresh potato shipments 
in Washington are russet varieties (as opposed to round white and round 
red or long white type potatoes), thus the Committee determined that it 
would not be able to cover its cost of operation should shipments of 
russet potatoes not be assessed.
    This rule establishes a monthly reporting requirement for russet 
potato handlers. The report will provide the Committee with information 
necessary to track shipments and collect assessments. While this rule 
establishes new reporting requirements for russet potato shipments, the 
suspension of the handling regulation for russet potatoes also 
eliminates the more frequent reporting requirements that were included 
under the safeguard requirements for russet potatoes shipped 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 russet potato handlers are expected to be 
offset by the elimination of other reporting requirements currently in 
effect. In addition, the suspension of the handling regulation and 
inspection requirements for russet potatoes is expected to further 
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 January 26, May 11, and June 1, 2010, meetings were public 
meetings, and 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: http://www.ams.usda.gov/MarketingOrdersSmallBusinessGuide. Any questions 
about the compliance guide should be sent to Antoinette Carter at the 
previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the additional burden has been merged into the information 
collection which is currently under review for renewal under OMB No. 
0581-0178, Generic OMB Vegetable and Specialty Crops.
    Title: Irish Potatoes Grown in Washington--Marketing Order No. 946.
    OMB Number: 0581-0178.
    Type of Request: Revision of a currently approved collection.
    Abstract: The information collection requirements in this request 
are essential to carry out the intent of the Act, to provide the 
respondents the type of service they request, and to administer the 
Washington potato order, which has been operating since 1949.
    On June 1, 2010, the Committee unanimously recommended suspending 
the order's handling regulation for russet variety potatoes for the 
period beginning July 1, 2010, and ending June 30, 2011. To ensure that 
the Committee obtains handler information that is necessary for 
operation of the order, the Committee also unanimously recommended 
establishing a new reporting requirement. Information will be reported 
on a new Committee form, Monthly Russet Fresh Potato Report, which will 
require handlers to report, on a monthly basis, the total quantity of 
russet potatoes handled during the season. The first report shall 
include all required information from the effective date of this rule 
through the end of the month in which the assessment report information 
is approved by the Office of Management and Budget.

[[Page 43045]]

    The new report is needed by the Committee to compile information 
that is essential for the collection of handler assessments and to 
provide statistical information to the industry. The Committee 
previously used monthly reports from the FSIP to obtain this 
information; reports that will no longer be available due to the 
suspension of the russet potato handling regulation. This new report 
will help to ensure compliance with the order's provisions and assist 
the Committee and the USDA with oversight and planning.
    The information collected will be used only by authorized 
representatives of USDA, including AMS, Fruit and Vegetable Programs 
regional and headquarters staff, and authorized Committee employees. 
Authorized Committee employees will be the primary users of the 
information and AMS the secondary user.
    The request for approval of the new information collection under 
the order is as follows:
    Monthly Russet Fresh Potato Report.
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 5 minutes per response.
    Respondents: Washington russet potato handlers.
    Estimated Number of Respondents: 33.
    Estimated Number of Responses per Respondent: 12.
    Estimated Total Annual Burden on Respondents: 33 hours.
    Comments: Comments are invited on: (1) Whether the collection of 
information is necessary for the proper performance of the functions of 
the agency, including whether the information will have practical 
utility; (2) the accuracy of the agency's estimate of the burden of the 
collection of information, including the validity of the methodology 
and assumptions used; (3) ways to enhance the quality, utility, and 
clarity of the information to be collected; and (4) ways to minimize 
the burden of the collection of information on those who are to 
respond, including the use of appropriate automated, electronic, 
mechanical, or other technological collection techniques or other forms 
of information technology.
    Comments should reference OMB No. 0581-NEW and the Washington 
potato order (Marketing Order No. 946), and be sent to USDA in care of 
the Docket Clerk at the previously mentioned address. All comments 
received will be available for public inspection during regular 
business hours at the same address.
    All responses to this notice will be summarized and included in the 
request for OMB approval. All comments will become a matter of public 
record. 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.
    This rule invites comments on a temporary change to the handling 
regulations and reporting requirements for russet potatoes under the 
Washington 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 Washington russet potato shipping 
season begins in July; (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.

0
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. A new Sec.  946.143 is added to read as follows:

Sec.  946.143  Assessment reports.

    During the period that russet type potatoes are exempt from 
handling requirements under Sec.  946.336, each person handling russet 
type potatoes shall submit a monthly report to the committee by the 
10th day of the month following the month such potatoes are handled: 
Provided, That the first report shall include all required information 
from July 26, 2010 through the end of the month in which the assessment 
report and its collection of information is approved by the Office of 
Management and Budget. Each assessment report shall contain the 
following information:
    (a) The name and address of the handler;
    (b) The date and quantity of russet type potatoes handled;
    (c) The assessment payment due; and
    (d) Other information as may be requested by the Committee.
0
3. Section 946.336 is revised to read as follows:

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 from July 24, 2010, through June 30, 
2011, russet type potatoes shall be exempt from the requirements of 
paragraphs (a), (b), (c), (d), (e), and (g) of this section.

    Dated: July 20, 2010.
Rayne Pegg,
Administrator, Agricultural Marketing Service.
[FR Doc. 2010-18091 Filed 7-22-10; 8:45 am]
BILLING CODE 3410-02-P
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