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[Federal Register Volume 78, Number 1 (Wednesday, January 2, 2013)]
[Rules and Regulations]
[Pages 3-5]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-31513]

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 948

[Doc. No. AMS-FV-12-0043; FV12-948-1 IR]

Irish Potatoes Grown in Colorado; Modification of the Handling 
Regulation for Area No. 2

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim rule with request for comments.

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SUMMARY: This rule modifies the grade requirements 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 rule relaxes the minimum grade requirement 
for size B and 1-inch to 1\3/4\-inch diameter round, red-skinned 
potatoes handled under the Colorado potato marketing order from U.S. 
No. 1 to U.S. Commercial. This change is expected to facilitate the 
handling and marketing of the Area No. 2 potato crop, provide producers 
and handlers with increased returns, and supply consumers with 
increased potato purchasing options.

DATES: Effective January 3, 2013; comments received by March 4, 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 the comments will be made public on the Internet at 
the address provided above.

FOR FURTHER INFORMATION CONTACT: Barry Broadbent, 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: 
Barry.Broadbent@ams.usda.gov or GaryD.Olson@ams.usda.gov.
    Small businesses may request information on complying with this 
regulation by contacting Laurel May, 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: Laurel.May@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement No. 97 and Marketing 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.''
    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 Sec.  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 modifies the minimum requirements for certain potatoes 
handled under the order's handling regulation. This rule relaxes the 
minimum grade requirement for all size B (1\1/2\-inch to 2\1/4\-inch 
diameter) and 1-inch to 1\3/4\-inch diameter round, red-skinned 
potatoes handled under the order to U.S. Commercial. Prior to this 
change, round, red-skinned potatoes in the above size ranges were 
required to meet or exceed the requirements of the U.S. No. 1 grade 
standard if such potatoes were to be shipped outside the State of 
Colorado. This rule is a relaxation of the handling regulation and will 
make the minimum grade requirements for round, red-skinned potatoes 
consistent with the current minimum grade requirements for all other 
varieties of similarly sized potatoes handled under the order. This 
change was unanimously recommended by the Committee at a meeting held 
on July 19, 2012.
    Section 948.22 authorizes the issuance of grade, size, quality, 
maturity, pack, and container regulations for potatoes grown in the 
production area. Section 948.21 further authorizes the modification, 
suspension, or termination of regulations issued pursuant to Sec.  
948.22.
    Under the Colorado potato marketing order, the State of Colorado is 
divided into three areas of regulation for marketing order purposes. 
These include: Area 1, commonly known as the Western Slope; Area 2, 
commonly known as San Luis Valley; and, Area 3, which consists of the 
remaining producing areas within the State of Colorado not included in 
the definition of Area 1 or Area 2. Currently, the order only regulates 
the handling of potatoes produced in Area 2 and Area 3. Regulation for 
Area 1 has been suspended.
    The grade, size, and maturity regulations specific to the handling 
of potatoes grown in Area 2 are contained in Sec.  948.386 of the 
order. The current handling regulation requires that all potatoes 
handled under the order must meet the minimum requirements of the U.S. 
No. 2 grade and be 2 inches or greater in diameter. Smaller size 
potatoes may be handled if such potatoes meet the requirements of 
certain higher grades. For all varieties, except round, red-skinned 
varieties, size B and 1-inch to 1\3/4\-inch diameter potatoes may be 
handled if such potatoes meet the requirements of the U.S. Commercial 
grade. Round, red-skinned varieties of the above size profiles must 
meet the minimum requirements of the U.S. No. 1 grade standard to be 
handled under the order.
    At the July 19 Committee meeting, industry participants indicated 
to the Committee that there is an emerging market for smaller size U.S. 
Commercial grade round, red-skinned potatoes for use in certain value 
added potato products. They further stated that the order's current 
U.S. No. 1 grade requirement for small-size, round, red-skinned 
potatoes precludes them from

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supplying that market. Relaxing the minimum grade requirement for such 
potatoes will allow area handlers to compete with other domestic potato 
producing regions for this developing market segment.
    Changing the handling regulations to allow small-size, round, red-
skinned potatoes to meet or exceed U.S. Commercial grade, instead of 
the more stringent U.S. No. 1 grade, will make more small potatoes 
available to consumers and will allow Area 2 handlers to move more of 
the area's potato production into the fresh market. This change is 
expected to benefit producers, handlers, and consumers of round, red-
skinned potatoes.

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 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 80 handlers of Colorado Area No. 2 potatoes 
subject to regulation under the order and approximately 180 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 
producers are defined as those having annual receipts of less than 
$750,000.
    During the 2010-2011 marketing year, the most recent full marketing 
year for which statistics are available, 15,583,512 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 
$12.75 per hundredweight, the Committee estimates that 71 Area No. 2 
handlers, or about 89 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 
Colorado fall potatoes for 2010-2011 was $9.37 per hundredweight. The 
average annual fresh potato revenue for each of the 180 Colorado Area 
No. 2 potato producers is therefore calculated to be approximately 
$811,208. Consequently, on average, many of the Area No. 2 Colorado 
potato producers may not be classified as small entities.
    This rule relaxes the minimum grade requirement for size B and 1-
inch to 1\3/4\-inch diameter round, red-skinned potato varieties from 
U.S. No. 1 grade to U.S. Commercial. Authority for this action is 
contained in Sec. Sec.  948.21 and 948.22.
    This relaxation is expected to benefit the producers, handlers, and 
consumers of Colorado potatoes by allowing a greater quantity of fresh 
potatoes from the production area to enter the market. This anticipated 
increase in volume is expected to translate into greater returns for 
handlers and producers, and more purchasing options for consumers.
    After discussing possible alternatives to this rule, the Committee 
determined that a relaxation in the grade requirement for small-size, 
round, red-skinned potatoes from U.S. No. 1 to U.S. Commercial would 
sufficiently meet the industry's current needs while maintaining the 
integrity of the order. During its deliberations, the Committee 
considered making no changes to the handling regulations as well as 
relaxing the minimum grade requirement for all small-size potatoes to 
U.S. No. 2. The Committee believes that a relaxation in the handling 
regulation for small potatoes is necessary to allow handlers to pursue 
new markets, but lowering the grade requirements for small-size 
potatoes to U.S. No. 2 would erode the quality reputation of the area's 
potatoes. The Committee, therefore, found that there were no other 
viable alternatives to the recommended relaxation of the minimum grade 
requirements for round, red-skinned potatoes handled under the order 
from U.S. No. 1 to U.S. Commercial.
    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. 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 rule will not impose any additional reporting or recordkeeping 
requirements on either small or large 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 to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes. In addition, USDA has not 
identified any relevant Federal rules that duplicate, overlap, or 
conflict with this rule.
    Further, the Committee's meeting was widely publicized throughout 
the Colorado potato industry and all interested persons were invited to 
attend the meeting and participate in Committee deliberations. Like all 
Committee meetings, the July 19, 2012, meeting was a public meeting and 
all entities, both large and small, were able to express their views on 
this issue. Finally, interested persons are invited to submit 
information on 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 Laurel May at the previously 
mentioned address in the FOR FURTHER INFORMATION CONTACT section.
    This rule invites comments on a modification of the grade and 
maturity requirement prescribed under the Colorado potato marketing 
order. Any comments received will be considered prior to the 
finalization of this rule.
    After consideration of all relevant material presented, including 
the Committee's recommendation, and other information, it is hereby 
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) This action is a relaxation of the current handling 
regulation; (2) handlers are already shipping potatoes from the 2012-
2013 crop and may want to take advantage of this relaxation as soon as 
possible; (3) handlers are aware of this rule, which was initiated by 
the industry and unanimously

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recommended by the Committee at a public meeting during which 
interested parties had an opportunity to provide input; 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 948

    Marketing agreements, Potatoes, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 948 is 
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. In Sec.  948.386, paragraphs (a)(3) and (4) are revised to read as 
follows:

Sec.  948.386  Handling regulation.

* * * * *
    (a) * * *
    (3) 1\1/2\-inch minimum to 2\1/4\-inch maximum diameter (Size B). 
U.S. Commercial grade or better.
    (4) 1-inch minimum diameter to 1\3/4\-inch maximum diameter. U.S. 
Commercial grade or better.
* * * * *

    Dated: December 26, 2012.
David R. Shipman,
Administrator, Agricultural Marketing Service.
[FR Doc. 2012-31513 Filed 12-31-12; 8:45 am]
BILLING CODE 3410-02-P
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