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[Federal Register Volume 76, Number 93 (Friday, May 13, 2011)]
[Rules and Regulations]
[Pages 27850-27852]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-11713]

[[Page 27850]]

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 946

[Doc. No. AMS-FV-11-0024; FV11-946-3IR]

Irish Potatoes Grown in Washington; Modification of the Rules and 
Regulations

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim rule with request for comments.

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SUMMARY: This rule extends the one-year suspension of the minimum 
quality, maturity, pack, marking, and inspection requirements 
prescribed for russet potato varieties under the Washington potato 
marketing order for the 2011-2012 and subsequent fiscal periods. The 
current one-year suspension of the russet potato handling regulation 
ends June 30, 2011. The marketing order regulates the handling of Irish 
potatoes grown in Washington, and is administered locally by the State 
of Washington Potato Committee (Committee). This rule also extends the 
reporting requirement for russet potato handlers for the purpose of 
obtaining information necessary for administering 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 continue exploring alternative marketing strategies.

DATES: Effective July 1, 2011; comments received by July 12, 2011 will 
be considered prior to formal adoption as 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 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 Laurel May, 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: Laurel.May@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 there from. 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 extends the one-year suspension of the order's handling 
regulation for russet potato varieties for the 2011-2012 and subsequent 
fiscal periods. The current one-year suspension of the russet potato 
handling regulation ends June 30, 2011. This action also extends the 
reporting requirement for russet potato handlers to obtain information 
necessary for the collection of assessments and statistical data. This 
rule allows the Washington potato industry to continue marketing russet 
potatoes without regard to the minimum quality, maturity, pack, 
marking, and inspection requirements prescribed under the Washington 
potato marketing order.
    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.
    The Committee met on June 1, 2010, and recommended suspending the 
minimum quality, maturity, pack, marking, and inspection requirements 
(handling regulation) for a one-year period. In addition, the Committee 
recommended that a new reporting provision be implemented to require 
handlers to report their russet potato shipments during this period to 
enable

[[Page 27851]]

the Committee to collect assessments and compile statistics. This 
information replaced similar information obtained from FSIP reports, 
which would not be available as a result of the suspension of the 
handling regulations. These recommendations were implemented by the 
USDA with an interim rule published in the Federal Register on July 23, 
2010 (75 FR 43042), and finalized on December 14, 2010 (75 FR 77749).
    The handling regulation was suspended temporarily so the Committee 
could evaluate the effects of operating without regulation, such as 
potential cost savings to handlers through elimination of mandatory 
inspection of product, and the potential market impact of operating 
with no mandatory quality and inspection requirements.
    During the period when the temporary suspension of the handling 
regulation was in effect, most handlers reportedly continued to have 
their product inspected prior to shipment to satisfy their customer's 
needs and market requirements. However, since full-time inspection was 
not mandatory, handlers were able to coordinate the timing and 
utilization of inspection services to meet the needs of their 
individual operations, resulting in improved efficiencies and reduced 
costs. No negative market impacts were experienced as a result of the 
temporary suspension. Handlers have continued to meet their customer's 
specifications and needs, either with voluntary inspection or no 
inspection. The Committee believes that the suspension of the russet 
potato handling regulation, effective from July 24, 2010, through June 
30, 2011, has been successful. Therefore, at its January 26, 2011, 
meeting, the Committee recommended extending the suspension of the 
handling regulation for russet potatoes for the 2011-2012 and 
subsequent fiscal periods. The Committee also recommended extending the 
reporting requirement for russet potato handlers to obtain information 
necessary for the collection of assessments and statistical data.
    This rule permits handlers to continue shipping russet potatoes 
without regard to minimum quality, maturity, pack, marking, and 
inspection requirements for the 2011-2012 and subsequent fiscal 
periods. This rule also continues the reporting requirement for russet 
potato handlers to collect assessments and compile statistical data. 
Authorization to assess handlers enables the Committee to incur 
expenses that are reasonable and necessary to administer the program.
    Although this rule continues to provide 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 continue to evaluate the effects of the suspension on marketing 
and on producer returns at future Committee meetings.
    Although continuing to require handler reports, this rule, through 
the suspension of the handling regulation and thereby mandatory 
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 43 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 producers are defined as those 
having annual receipts of less than $750,000.
    During the 2009-2010 fiscal period, the Committee reports that 
9,765,131 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 2010 was $7.55 per hundredweight. The average 
gross annual producer revenue for each of the 267 Washington potato 
producers is therefore calculated to be approximately $276,130. In view 
of the foregoing, the majority of Washington potato producers and 
handlers may be classified as small entities.
    This rule extends the one-year suspension of the handling 
regulation for russet potato varieties for the 2011-2012 and subsequent 
fiscal periods. This rule also extends the reporting requirement for 
russet potato handlers to obtain information necessary to administer 
the order. This rule is expected to reduce overall industry expenses 
while providing the industry with the opportunity to continue exploring 
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 and reporting requirement 
are specified under Sec. Sec.  946.336 and 946.143, respectively, of 
the order's administrative rules and regulations.
    The Committee anticipates that this rule will not negatively impact 
small businesses. This rule will extend the one-year suspension of 
minimum quality, maturity, pack, marking, and inspection requirements 
indefinitely. 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 2009-
2010 fiscal period, the total cost of inspection--at $0.07 per 
hundredweight for the approximately 7,421,500 hundredweight of 
Washington russet potatoes shipped--was about $519,505. This is 
approximately $15,743 per handler.
    The Committee discussed alternatives to this recommendation. The 
Committee considered suspending the handling regulation for russet 
potatoes for another one-year period. However, the Committee believes 
that the current one-year suspension has been successful and 
recommended extending the suspension of the handling regulation for 
russet potatoes indefinitely.
    This rule continues the monthly reporting requirement for russet 
potato handlers. The reports provide the Committee with information 
necessary to track shipments and collect assessments. The information 
collection burden generated from the temporary suspension of the 
handling regulation (75 FR 77749) was merged into the generic vegetable 
package under OMB

[[Page 27852]]

Number 0581-0178 and continues in effect until March 31, 2014.
    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.
    The Committee's meeting was 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, 2011, meeting was a public meeting, 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.
    This rule invites comments on modifications to the handling 
regulation and reporting requirement for russet potatoes under the 
Washington potato marketing order. The modifications revise the 
introductory text of both regulations by removing a sentence in Sec.  
946.143 and by removing and replacing text in Sec.  946.336. 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 
July 1, 2011, because the one-year suspension of the russet potato-
handling regulation ends June 30, 2011; (2) the Committee discussed and 
unanimously recommended these changes at a public meeting and all 
interested parties had an opportunity to provide input; and (3) 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.
    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.

Sec.  946.143  [Amended]

0
2. Amend the introductory text of Sec.  946.143 by removing the words 
``Provided, That the first report shall include all required 
information from July 24, 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.''

Sec.  946.336 [Amended]  

0
3. Amend the introductory text of Sec.  946.336 by removing the words 
``from July 24, 2010, through June 30, 2011'' and adding in their place 
the words ``beginning July 1, 2011''.

    Dated: May 9, 2011.
Ellen King,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2011-11713 Filed 5-12-11; 8:45 am]
BILLING CODE 3410-02-P
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