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[Federal Register Volume 79, Number 136 (Wednesday, July 16, 2014)]
[Rules and Regulations]
[Pages 41413-41415]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-16635]

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 946 and Part 980

[Doc. No. AMS-FV-13-0068; FV13-946-3 FIR]

Irish Potatoes Grown in Washington and Imported Potatoes; 
Modification of the Handling Regulations, Reporting Requirements, and 
Import Regulations for Red Types of Potatoes

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Affirmation of interim rule as a final rule.

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SUMMARY: The Department of Agriculture is adopting, as a final rule, 
without change, an interim rule that exempted red types of potatoes 
from minimum quality, maturity, pack, marking, and inspection 
requirements of the Washington potato marketing order and the potato 
import regulation for the 2013-2014 and subsequent fiscal periods. This 
rule also continues in effect the action that required handlers of red 
types of potatoes to submit reports during the period that red types of 
potatoes are exempt from regulation. This rule is expected to reduce 
overall industry expenses and increase net returns to producers and 
handlers while giving the industry the opportunity to explore 
alternative marketing strategies.

DATES: Effective July 21, 2014.

FOR FURTHER INFORMATION CONTACT: Teresa Hutchinson, 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: Teresa.Hutchinson@ams.usda.gov or GaryD.Olson@ams.usda.gov.
    Small businesses may obtain information on complying with this and 
other marketing order regulations by viewing a guide at the following 
Web site: http://www.ams.usda.gov/MarketingOrdersSmallBusinessGuide; or 
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 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.''
    This rule is also issued under section 8e of the Act, which 
provides that whenever certain specified commodities, including 
potatoes, are regulated under a Federal marketing order, imports of 
these commodities into the United States is prohibited unless they meet 
the same or comparable grade, size, quality, or maturity requirements 
as those in effect for domestically produced commodities.
    The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Orders 12866, 13563, and 13175.
    The handling of Irish potatoes grown in Washington is regulated by 
7 CFR part 946. Prior to this change, red types

[[Page 41414]]

of potatoes were subject to the requirements contained in the order's 
handling regulations (Sec.  946.336). The Washington potato industry 
was concerned that the cost of mandatory inspection for red types of 
potatoes, which has increased, may outweigh the benefits of having the 
quality regulations in place. By exempting red types of potatoes from 
handling regulations, the industry expects to reduce overall expenses 
and provide handlers the opportunity to explore alternative marketing 
strategies.
    Therefore, this rule continues in effect the interim rule that 
exempted red types of potatoes from the order's handling regulations 
for the remainder of the 2013-2014 fiscal period and subsequent fiscal 
periods. This rule also continues in effect the action that required 
handlers of red types of potatoes to submit reports during the period 
that red types of potatoes are exempt from regulation. Assessments on 
all fresh red types of potatoes handled under the order will remain in 
effect during the exemption period.
    Imported potatoes are subject to regulations specified in 7 CFR 
part 980. Under those regulations, imported potatoes must meet the same 
or comparable grade, size, quality, and maturity requirements as 
specified for domestic potatoes under the order. Therefore, the 
exemption of red types of potatoes from the minimum grade, size, 
quality, and maturity requirements of the order also exempts red-
skinned, round types of potatoes imported into the United States from 
the same requirements.
    In an interim rule published in the Federal Register on February 
12, 2014, and effective February 15, 2014, (79 FR 8253, Doc. No. FV-13-
0068, FV13-946-3 IR), Sec.  946.336 was amended to exempt red types of 
potatoes from the order's handling requirements for the remainder of 
the 2013-2014 fiscal period and subsequent fiscal periods. In addition, 
Sec.  946.143 was modified to require that each person handling red 
types of potatoes submit a monthly report to the State of Washington 
Potato Committee (Committee) during the period that red types of 
potatoes are exempt from regulation. Lastly, pursuant to the section 
8e, Sec.  980.1 was revised to exempt imported red-skinned, round types 
of potatoes from the import regulations.

Final 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 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 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 43 handlers of Washington potatoes subject to regulation 
under the order and approximately 267 producers in the regulated 
production area. Small agricultural service firms are defined by the 
Small Business Administration 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)
    For the 2011-2012 marketing year, the Committee reports that 
11,018,670 hundredweight of Washington potatoes were shipped into the 
fresh market. Based on average f.o.b. prices estimated by the USDA's 
Economic Research Service and Committee data on individual handler 
shipments, the Committee estimates that 42, or approximately 98 percent 
of the handlers, had annual receipts of less than $7,000,000.
    In addition, based on information provided by the National 
Agricultural Statistics Service, the average producer price for 
Washington potatoes for 2011-2012 was $7.90 per hundredweight. Taking 
the 2011-2012 shipments of fresh potatoes in the marketing order area 
(11,018,670 hundredweight), multiplying it by the average producer 
price for Washington potatoes, $7.90, and then dividing it by the 
number of Washington potato producers (267) equates to an average gross 
annual revenue per producer of approximately $326,021. In view of the 
foregoing, the majority of Washington potato handlers and producers may 
be classified as small entities.
    Information from the Foreign Agricultural Service, USDA, indicates 
that the dollar value of imported fresh potatoes averaged $128.962 
million from 2008 to 2012, ranging from a low of approximately $106.502 
million in 2012 to a high of approximately $155.358 million in 2008. 
Taking the average dollar value of imported fresh potatoes, $128.962 
million, and dividing it by the number of potato importers, 571, 
results in average annual receipts per importer of approximately 
$226,000. Since this is below the SBA definition for small businesses 
(less than $7 million in annual sales), most potato importers may be 
classified as small entities.
    This rule continues in effect the action that exempted red types of 
potatoes from the order's handling regulations and modified the order's 
reporting requirements for the remainder of the 2013-2014 fiscal period 
and subsequent fiscal periods. This rule also continues in effect the 
action that exempted imported red-skinned, round type potatoes from the 
minimum grade, size, quality, maturity, and inspection requirements of 
the potato import regulation. This change is expected to reduce overall 
industry expenses and provide the industry with the opportunity to 
explore alternative marketing strategies.
    This rule modifies Sec. Sec.  946.143, 946.336, and 980.1. 
Authority for the change in the order's rules and regulations is 
provided in Sec.  946.52 of the order, while authority for reports and 
records is provided in Sec.  946.70. The change in the potato import 
regulation is required under section 8e of the Act.
    This rule is not anticipated to negatively impact small businesses. 
This rule exempts red types of potatoes from minimum quality, maturity, 
pack, marking, and inspection requirements for the remainder of the 
current fiscal period and subsequent fiscal periods. Though inspections 
are not mandatory for such potatoes during the exemption period, 
handlers may choose to voluntarily have their potatoes inspected. 
Handlers are thus able to control costs based on the demands of their 
customers. The opportunities and benefits of this rule are equally 
available to all Washington potato handlers and producers, regardless 
of their size.
    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.
    This rule continues in effect the action requiring the submission 
of a monthly handler report for fresh red types of potatoes handled 
during the exemption period. The action modified the ``Russet Fresh 
Potato Report'' that was previously established for reporting the 
handling of russet type potatoes to now include red types of potatoes 
during the period those types of potatoes are exempted from regulation. 
The modified form, now titled the ``Self-Reporting Potato Form,'' will 
provide the Committee with information necessary to track shipments and 
collect

[[Page 41415]]

assessments. The form modification has been approved by OMB.
    While this rule continues in effect the action requiring a 
reporting requirement for red types of potatoes, the exemption of red 
types of potatoes from handling regulation also eliminates, for the 
exemption period, the more frequent reporting requirements imposed 
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 handlers of red types of potatoes are expected 
to be offset by the elimination of the other reporting requirements 
currently in effect. In addition, the exemption from handling 
regulation and inspection requirements for red types of potatoes is 
expected to reduce industry expenses.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap or conflict with this rule.
    Further, 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 May 9, July 16, and December 10, 2013, meetings were public 
meetings. All entities, both large and small, were able to express 
views on this issue.
    Comments on the interim rule were required to be received on or 
before April 14, 2014. No comments were received. Accordingly, for the 
reasons given in the interim rule, USDA is adopting the interim rule as 
a final rule, without change.
    To view the interim rule, go to: http://www.regulations.gov/#!documentDetail;D=AMS-FV-13-0068-0001.
    This action also affirms information contained in the interim rule 
concerning Executive Orders 12866, 12988, and 13563; the Paperwork 
Reduction Act (44 U.S.C. Chapter 35); and the E-Gov Act (44 U.S.C. 
101).
    In accordance with section 8e of the Act, the United States Trade 
Representative has concurred with the issuance of this final rule.
    After consideration of all relevant material presented, it is found 
that finalizing the interim rule, without change, as published in the 
Federal Register (79 FR 8253, February 12, 2014) will tend to 
effectuate the declared policy of the Act.

List of Subjects

7 CFR Part 946

    Marketing agreements, Potatoes, Reporting and recordkeeping 
requirements.

7 CFR Part 980

    Food grades and standards, Imports, Marketing agreements, Onions, 
Potatoes, Tomatoes.

PARTS 946 and 980 [AMENDED]

0
Accordingly, the interim rule that amended 7 CFR parts 946 and 980 and 
that was published at 79 FR 8253 on February 12, 2014, is adopted as 
final without change.

    Dated: July 10, 2014.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2014-16635 Filed 7-15-14; 8:45 am]
BILLING CODE 3410-02-P
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