[Federal Register Volume 89, Number 188 (Friday, September 27, 2024)]
[Proposed Rules]
[Pages 79175-79178]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-22213]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 945

[Doc. No. AMS-SC-24-0042]


Irish Potatoes Grown in Certain Designated Counties in Idaho, and 
Malheur County, Oregon; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would implement a recommendation from the 
Idaho-Eastern Oregon Potato Committee (Committee) to increase the 
assessment rate established for the 2024-2025 fiscal period and 
subsequent fiscal periods from $0.002 to $0.003 per hundredweight of 
potatoes handled under the marketing order. The proposed assessment 
rate would remain in effect indefinitely unless modified, suspended, or 
terminated.

DATES: Comments must be received by October 28, 2024.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. Comments can be sent to the Docket 
Clerk, Market Development Division, Specialty Crops Program, AMS, USDA, 
1400 Independence Avenue SW, STOP 0237, Washington, DC 20250-0237. 
Comments can also be submitted to the Docket Clerk electronically by 
Email: <a href="/cdn-cgi/l/email-protection#3b765a49505e4f52555c74495f5e49785456565e554f7b4e485f5a155c544d"><span class="__cf_email__" data-cfemail="85c8e4f7eee0f1ecebe2caf7e1e0f7c6eae8e8e0ebf1c5f0f6e1e4abe2eaf3">[email protected]</span></a> or via the internet at: https://www.regulations.gov. Comments should reference the document number and 
the date and page number of this issue of the Federal Register. 
Comments submitted in response to this proposed rule will be included 
in the record and made available to the public and can be viewed at: 
https://www.regulations.gov. 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: Gregory A. Breasher, Marketing 
Specialist, or Barry M. Broadbent, Chief, Northwest Region Branch, 
Market Development Division, Specialty Crops Program, AMS, USDA; 
Telephone: (503) 326-2282, or Email: <a href="/cdn-cgi/l/email-protection#a1c6d3c4c6ced3d88fc3d3c4c0d2c9c4d3e1d4d2c5c08fc6ced7"><span class="__cf_email__" data-cfemail="72150017151d000b5c10001713011a170032070116135c151d04">[email protected]</span></a> or 
<a href="/cdn-cgi/l/email-protection#f7959685858ed9958598969395929983b782849396d9909881"><span class="__cf_email__" data-cfemail="aac8cbd8d8d384c8d8c5cbcec8cfc4deeadfd9cecb84cdc5dc">[email protected]</span></a>.
    Small businesses may request information on complying with this 
regulation by contacting Richard Lower, Market Development Division, 
Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP 
0237, Washington, DC 20250-0237; Telephone: (202) 720-8085, or Email: 
<a href="/cdn-cgi/l/email-protection#f3a19a909b928197ddbf9c849681b386809792dd949c85"><span class="__cf_email__" data-cfemail="5f0d363c373e2d3b711330283a2d1f2a2c3b3e71383029">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: This action, pursuant to 5 U.S.C. 553, 
proposes to amend regulations issued to carry out a marketing order as 
defined in 7 CFR 900.2(j). This proposed rule is issued under Marketing 
Agreement No. 98 and Marketing Order No. 945, both as amended (7 CFR 
part 945), regulating the handling of potatoes grown in certain 
counties in Idaho, and Malheur County, Oregon. Part 945 (referred to as 
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 Committee locally administers the Order and comprises 
producers and handlers of potatoes operating within the area of 
production.
    The Agricultural Marketing Service (AMS) is issuing this proposed 
rule in conformance with Executive Orders 12866, 13563, and 14094. 
Executive Orders 12866 and 13563 direct agencies to assess all costs 
and benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects, distributive impacts, and equity). Executive Order 13563 
emphasizes the importance of quantifying both costs and benefits, 
reducing costs, harmonizing rules, and promoting flexibility. Executive 
Order 14094 reaffirms, supplements, and updates Executive Order 12866 
and further directs agencies to solicit and consider input from a wide 
range of affected and interested parties through a variety of means. 
This proposed action falls within a category of regulatory actions that 
the Office of Management and Budget (OMB) exempted from Executive Order 
12866 review.
    This proposed rule has been reviewed under Executive Order 13175--
Consultation and Coordination with Indian Tribal Governments, which 
requires Federal agencies to consider whether their rulemaking actions 
would have Tribal implications. AMS has determined that this proposed 
rule is unlikely to have substantial direct effects on one or more 
Indian Tribes, on the relationship between the Federal Government and 
Indian Tribes, or on the distribution of power and responsibilities 
between the Federal Government and Indian Tribes.
    This proposed rule has been reviewed under Executive Order 12988--
Civil Justice Reform. Under the Order now in effect, Idaho-Eastern 
Oregon potato

[[Page 79176]]

handlers are subject to assessments. Funds to administer the Order are 
derived from such assessments. It is intended that the assessment rate 
would be applicable to all assessable Idaho-Eastern Oregon potatoes for 
the 2024-2025 fiscal period, and continue until amended, suspended, or 
terminated.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 8c(15)(A) of the 
Act (7 U.S.C. 608(c)(15)(A)), any handler subject to an order may file 
with the U.S. Department of Agriculture (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 requesting 
a modification of the order or to be exempted therefrom. Such 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 proposed rule would increase the assessment rate for Idaho-
Eastern Oregon potatoes handled under the Order from $0.002 per 
hundredweight, the rate that was established for the 2017-2018 fiscal 
period and subsequent fiscal periods (82 FR 28550), to $0.003 per 
hundredweight for the 2024-2025 fiscal period and subsequent fiscal 
periods.
    Sections 945.41 and 945.42 of the Order authorize the Committee, 
with the approval of AMS, to formulate an annual budget of expenses and 
collect assessments from handlers to administer the program. The 
members of the Committee are familiar with the Committee's needs and 
with the costs of goods and services in their local area and are able 
to formulate an appropriate budget and assessment rate. The assessment 
rate is formulated and discussed in a public meeting, and all directly 
affected persons have an opportunity to participate and provide input.
    For the 2017-2018 fiscal period and subsequent fiscal periods, the 
Committee recommended, and AMS approved, an assessment rate of $0.002 
per hundredweight of Idaho-Eastern Oregon potatoes within the 
production area (82 FR 28550). That rate continues in effect from 
fiscal period to fiscal period until modified, suspended, or terminated 
by AMS upon recommendation and information submitted by the Committee 
or other information available to AMS.
    The Committee met on June 5, 2024, and unanimously recommended 
2024-2025 fiscal period expenditures of $99,522 and an assessment rate 
of $0.003 per hundredweight of Idaho Eastern-Oregon potatoes handled 
for the 2024-2025 fiscal period and subsequent fiscal periods. In 
comparison, the budgeted expenditures for fiscal period 2023-2024 were 
$99,703. The proposed assessment rate of $0.003 per hundredweight is 
$0.001 higher than the rate currently in effect. The Committee 
recommended increasing the assessment rate to better align assessment 
revenue with budgeted expenses and to replenish reserves which were 
depleted between August 2017 and June 2024. The Committee estimates 
shipments for the 2024-2025 season to be approximately 34,000,000 
hundredweight, an increase from the 28,167,500 hundredweight handled 
for the 2023-2024 fiscal period.
    The major expenditures recommended by the Committee for the 2024-
2025 fiscal period include $75,489 in administrative expenses; $10,013 
for operational expenses; $4,670 for insurance/banking expenses; $4,000 
for annual audit/compliance expenses; $2,950 for committee travel 
expenses and $2,400 for IT support. For comparison, budgeted expenses 
for these items during the 2023-2024 fiscal period were $74,960, 
$10,013, $4,880, $4,500, $2,950, and $2,400, respectively.
    The expected 34,000,000 hundredweight of Idaho-Eastern Oregon 
potatoes from the 2024-2025 crop would generate $102,000 in assessment 
revenue at the proposed assessment rate (34,000,000 hundredweight of 
potatoes multiplied by $0.003 assessment rate). The assessment rate 
increase should be appropriate to ensure the Committee has sufficient 
revenue to fully fund its recommended 2024-2025 fiscal period budgeted 
expenditures and begin replenishing the Committee's reserve funds to a 
level that the Committee believes is appropriate.
    The Committee derived the recommended assessment rate by 
considering anticipated fiscal period expenses, expected shipments of 
potatoes, and the amount of funds available in the financial reserve. 
Income derived from handler assessments ($102,000) would be adequate to 
cover budgeted expenses ($99,522). Funds available in the financial 
reserve (currently about $80,000) would be kept within the maximum 
permitted by the Order (approximately one fiscal period's expenses as 
authorized in Sec.  945.44).
    The proposed assessment rate would continue in effect indefinitely 
unless modified, suspended, or terminated by AMS upon recommendation 
and information submitted by the Committee or other available 
information. Although this assessment rate would be in effect for an 
indefinite period, the Committee would continue to meet prior to or 
during each fiscal period to recommend a budget of expenses and 
consider recommendations for modification of the assessment rate. The 
dates and times of Committee meetings are available from the Committee 
or AMS. Committee meetings are open to the public and interested 
persons may express their views at these meetings. AMS would evaluate 
Committee recommendations and other available information to determine 
whether modification of the assessment rate is needed. Further 
rulemaking would be undertaken as necessary. The Committee's 2024-2025 
fiscal period budget, and those for subsequent fiscal periods, will be 
reviewed and, as appropriate, approved by AMS.

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), AMS has considered the economic impact of 
this proposed rule 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 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 approximately 450 producers of Idaho-Eastern Oregon 
potatoes in the production area and 32 handlers subject to regulation 
under the Order. At the time this analysis was prepared, the Small 
Business Administration (SBA) defined small agricultural service firms 
as those having annual receipts equal to or less than $34,000,000 
(North American Industry Classification System (NAICS) code 115114, 
Postharvest Crop Activities), and small agricultural producers of 
potatoes as those having annual receipts equal to or less than 
$4,250,000 (NAICS code 111211, Potato Farming) (13 CFR 121.201).
    According to the National Agricultural Statistics Service (NASS), 
the average annual producer price

[[Page 79177]]

received for fresh market potatoes in Idaho, and Malheur County, 
Oregon, in 2022, the most recent full year for which there is NASS 
data, was $12.50 per hundredweight. Total shipments of Idaho-Eastern 
Oregon potatoes for the 2021-2022 season were reported by the Committee 
to be 28,167,500 hundredweight. Using the average producer price from 
2022, the total 2021-2022 crop value of Idaho-Eastern Oregon potatoes 
could therefore be estimated to be $352,093,750 (28,167,500 
hundredweight times $12.50 per hundredweight). Dividing the crop value 
by the estimated number of producers (450) yields an estimated average 
receipt per producer of $782,431. This figure is well below the SBA 
small agricultural producer threshold of $4,250,000 in annual receipts. 
Assuming a normal distribution, this provides evidence that a large 
majority of potato producers would likely be considered small 
agricultural producers according to the SBA definition.
    According to AMS Market News data, the reported average free on 
board (FOB) price for potatoes from Idaho-Eastern Oregon over the 2021-
2022 fiscal period was $15.68 per 50-pound carton, depending upon 
variety, size and grade, and shipping date. Multiplying this figure by 
2 (to adjust to hundredweight) yields an average FOB price of $31.36 
per hundredweight for the 2021-2022 fiscal period. Multiplying the 
2021-2022 Idaho-Eastern Oregon potato production of 28,167,500 
hundredweight by the estimated average price per hundredweight of 
$31.36 equals $883,332,800. Dividing this figure by 32 regulated 
handlers yields estimated average annual handler receipts of 
$27,604,150 ($883,332,800 divided by 32 handlers), which is below the 
SBA threshold for small agricultural service firms. Therefore, 
according to the above data and assuming a normal distribution, most of 
the producers, and many of the handlers, of Idaho-Eastern Oregon 
potatoes may be classified as small entities.
    This proposal would increase the assessment rate collected from 
handlers for the 2024-2025 fiscal period and subsequent fiscal periods 
from $0.002 to $0.003 per hundredweight of Idaho-Eastern Oregon 
potatoes. The Committee unanimously recommended 2024-2025 fiscal period 
expenditures of $99,522 and an assessment rate of $0.003 per 
hundredweight of Idaho-Eastern Oregon potatoes handled. The proposed 
assessment rate of $0.003 is $0.001 higher than the rate currently in 
effect. The Committee expects the industry to handle 34,000,000 
hundredweight of Idaho-Eastern Oregon potatoes during the 2024-2025 
fiscal period. Thus, the $0.003 per hundredweight rate should provide 
$102,000 in assessment income (34,000,000 hundredweight multiplied by 
$0.003). The Committee expects that income generated from handler 
assessments should be sufficient to meet budgeted expenditures for the 
2024-2025 fiscal period.
    The major expenditures recommended by the Committee for the 2024-
2025 fiscal period include $75,489 in administrative expenses; $10,013 
for operational expenses; $4,670 for insurance/banking expenses; $4,000 
for annual audit/compliance expenses; $2,950 for committee travel 
expenses and $2,400 for IT support. For comparison, budgeted expenses 
for these items during the 2023-2024 fiscal period were $74,960, 
$10,013, $4,880, $4,500, $2,950, and $2,400, respectively.
    In recent years, the Committee has utilized reserve funds to 
partially fund its budgeted expenditures. The Committee recommended 
increasing the assessment rate to fully fund 2024-2025 fiscal period 
budgeted expenditures and replenish funds held in its reserve. This 
action would add an estimated $2,478 to the Committee's financial 
reserve fund. The reserve balance would be kept at a level that the 
Committee believes is appropriate and which is compliant with the 
provisions of the Order.
    Prior to arriving at this budget and assessment rate 
recommendation, the Committee discussed various alternatives, including 
maintaining the current assessment rate of $0.002 per hundredweight and 
increasing the assessment rate by different amounts. However, the 
Committee determined that the recommended assessment rate would fully 
fund budgeted expenses and replenish reserves to appropriate levels. 
The assessment rate of $0.003 per hundredweight of Idaho-Eastern Oregon 
potatoes was derived by considering anticipated expenses, the projected 
volume of assessable Idaho-Eastern Oregon potatoes, the projected 
monetary balance held in reserve, and additional pertinent factors.
    A review of NASS information indicates that the average producer 
price for the 2021-2022 fiscal period was $12.50 per hundredweight of 
potatoes in the production area. Therefore, utilizing the proposed 
assessment rate of $0.003 per hundredweight, assessment revenue for the 
2021-2022 fiscal period, as a percentage of total producer revenue, 
would have been approximately 0.024 percent of total producer revenue 
($0.003 divided by $12.50 multiplied by 100).
    This proposed action would increase the assessment obligation 
imposed on Idaho-Eastern Oregon potato handlers. Assessments are 
applied uniformly on all handlers, and some of the costs may be passed 
on to producers. However, these costs are expected to be offset by the 
benefits derived by the operation of the Order.
    The Committee's meetings are widely publicized throughout the 
production area. The Idaho-Eastern Oregon potato industry and all 
interested persons are invited to attend the meetings and participate 
in Committee deliberations on all issues. Like all Committee meetings, 
the June 5, 2024, meeting was a public meeting 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 proposed 
rule, including the regulatory and information collection impacts of 
this action on small businesses.
    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 OMB and assigned OMB No. 0581-0178, Vegetable 
and Specialty Crops. No changes in those requirements would be 
necessary as a result of this proposed rule. Should any changes become 
necessary, they would be submitted to OMB for approval.
    This proposed rule would not impose any additional reporting or 
recordkeeping requirements on either small or large Idaho-Eastern 
Oregon 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.
    AMS is committed to complying with the E-Government Act to promote 
the use of the internet and other information technologies and to 
provide increased opportunities for citizen access to Government 
information and services, and for other purposes.
    AMS has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this proposed rule.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: 
https://www.ams.usda.gov/rules-regulations/moa/small-businesses. Any 
questions about the compliance guide should be sent to Richard Lower at 
the previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.

[[Page 79178]]

    After consideration of all relevant material presented, including 
the information and recommendations submitted by the Committee and 
other available information, USDA has determined that this proposed 
rule is consistent with and will effectuate the purposes of the Act.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposed rule. All written comments timely received 
will be considered before a final determination is made on this 
rulemaking.

List of Subjects in 7 CFR Part 945

    Marketing agreements, Potatoes, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, the Agricultural 
Marketing Service proposes to amend 7 CFR part 945 as follows:

PART 945--IRISH POTATOES GROWN IN CERTAIN DESIGNATED COUNTIES IN 
IDAHO, AND MALHEUR COUNTY, OREGON

0
1. The authority citation for 7 CFR part 945 continues to read as 
follows:

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

0
2. Revise Sec.  945.249 to read as follows:


Sec.  945.249  Assessment rate.

    On and after August 1, 2024, an assessment rate of $0.003 per 
hundredweight is established for Idaho-Eastern Oregon potatoes.

Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2024-22213 Filed 9-26-24; 8:45 am]
BILLING CODE 3410-02-P


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