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[Federal Register Volume 80, Number 14 (Thursday, January 22, 2015)]
[Rules and Regulations]
[Pages 3140-3142]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-01014]

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 948

[Doc. No. AMS-FV-14-0092; FV15-948-1 IR]

Irish Potatoes Grown in Colorado; Relaxation of the Handling 
Regulation for Area No. 3

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim rule with request for comments.

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SUMMARY: This rule revises the minimum quantity exception for potatoes 
handled under the Colorado potato marketing order, Area No. 3 (order). 
The order regulates the handling of Irish potatoes grown in Colorado 
and is administered locally by the Colorado Potato Administrative 
Committee, Area No. 3 (Committee). This rule 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. 
This action is expected to benefit producers and handlers.

DATES: Effective January 23, 2015; comments received by March 23, 2015 
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 comments will be made public on the internet at the 
address provided above.

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: 
[email protected] or [email protected].
    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: [email protected].

SUPPLEMENTARY INFORMATION: This 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.''
    The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Orders 12866, 13563, and 13175.
    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

[[Page 3141]]

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 revises the minimum quantity exception currently 
prescribed in the handling regulation for potatoes handled under the 
order. This rule will increase the quantity of potatoes that may be 
handled without regard to the order's handling requirements from 1,000 
to 2,000 pounds. Relaxing the minimum quantity exception is expected to 
benefit producers and handlers. The rule was unanimously recommended by 
the Committee at a meeting on May 14, 2014.
    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, section 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 948.387 of the order's administrative rules prescribes 
grade, size, maturity, and inspection requirements for Colorado Area 
No. 3 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 handling requirements.
    At its meeting on May 14, 2014, 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 $10.70, the value of one pallet 
of potatoes is approximately $214.00. Increasing the minimum quantity 
exception from 1,000 to 2,000 pounds of potatoes will allow a handler 
to ship one pallet of potatoes without regard to the order's handling 
requirements. Relaxing the minimum quantity is expected to benefit 
producers and handlers.

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 
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.
    There are approximately 6 handlers of Colorado Area No. 3 potatoes 
subject to regulation under the order and approximately 6 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 2013-2014 fiscal period, the most recent for which 
statistics are available, 663,025 hundredweight of Colorado Area No. 3 
potatoes were inspected under the order and sold into the fresh market. 
The USDA Market News Service reported a 2013-2014 average f.o.b. price 
of $10.70 per hundredweight. Multiplying $10.70 by the shipment 
quantity of 663,025 hundredweight yields a shipping point revenue 
estimate of $7,094,368. The average annual fresh potato revenue for 
each of the 6 Colorado Area No. 3 potato handlers is therefore 
calculated to be approximately $1,182,395 ($7,094,368 divided by 6), 
which is less than the SBA threshold of $7,000,000. In view of the 
foregoing, the majority of Colorado Area No. 3 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 
2013 Colorado fall potato crop was $7.25 per hundredweight. Multiplying 
$7.25 by the shipment quantity of 663,025 hundredweight yields an 
annual crop revenue estimate of $4,806,931. The average annual fresh 
potato revenue for each of the 6 Colorado Area No. 3 potato producers 
is therefore calculated to be approximately $801,155 ($4,806,931 
divided by 6), which is greater than the SBA threshold of $750,000. 
Consequently, on average, most of the Colorado Area No. 3 potato 
producers may not be classified as small entities.
    This rule revises the quantity of potatoes that may be handled 
without regard to the requirements of Sec.  948.387(a) and (b) of the 
order from 1,000 to 2,000 pounds. At the May 14, 2014 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 
rule amends the provisions in Sec.  948.387(f).
    This action is not expected to increase the costs associated with 
the order's requirements. 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 of both time and inspection 
fees, which is high in relation to the small value (approximately 
$214.00 per pallet) of these transactions. This action will allow 
shipments of up to 2,000 pounds of potatoes without regard to the 
order's handling requirements and the related costs. The benefits for 
this rule are expected to be equally available to all fresh potato 
producers and handlers, regardless of their size.
    As an alternative to this action, the Committee discussed leaving 
the handling regulation unchanged. The Committee rejected this idea 
because a

[[Page 3142]]

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.
    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 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. 3 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.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this rule.
    In addition, the Committee's meeting was widely publicized 
throughout the Colorado Area No. 3 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 May 14, 
2014, 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 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 Jeffrey Smutny at the 
previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    This rule invites comments on an increase to the quantity of 
potatoes that may be handled under the order without regard to the 
handling requirements. 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 shipping season for Colorado 
potatoes began in September of 2014; (2) the Committee unanimously 
recommended this change at a public meeting and interested parties had 
an opportunity to provide input; (3) potato handlers are aware of this 
action and want to take advantage of this relaxation; 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 above, 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. Amend Sec.  948.387(f) to read as follows:

Sec.  948.387  Handling regulation.

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

    Dated: January 15, 2015.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2015-01014 Filed 1-21-15; 8:45 am]
BILLING CODE P
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