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[Federal Register Volume 76, Number 247 (Friday, December 23, 2011)]
[Rules and Regulations]
[Pages 80211-80214]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-32927]

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 948

[Doc. No. AMS-FV-11-0051; FV11-948-1 FR]

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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule revises the size requirements for potatoes under the 
Colorado potato marketing order (order). The order regulates the 
handling of Irish potatoes grown in Colorado, and is administered 
locally by the Colorado

[[Page 80212]]

Potato Administrative Committee for Area No. 3 (Committee). This rule 
modifies the size requirements for handling small potatoes that measure 
under 1\7/8\ inches in diameter. This rule allows the handling of two 
size ranges: \3/4\ inch minimum diameter to 1\7/8\ inches maximum 
diameter and Size B (1\1/2\ to 2\1/4\ inches), if such potatoes 
otherwise meet the requirements of the U.S. No. 1 grade. The revisions 
will promote orderly marketing by ensuring that only potatoes of 
certain similar size profiles are packed and shipped in the same 
container. This rule is expected to benefit the producers, handlers, 
and consumers of Colorado potatoes.

DATES: Effective Date: December 24, 2011.

FOR FURTHER INFORMATION CONTACT: Barry Broadbent 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 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 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 Email: Laurel.May@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This final 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 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 final rule revises the size requirements for small U.S. No. 1 
grade potatoes handled under the Colorado Area 3 handling regulations. 
The rule modifies the size requirements to establish allowable size 
ranges for potatoes that measure less than 1\7/8\ inches. This rule 
allows potatoes that measure \3/4\ inch minimum diameter to 1\7/8\ 
inches maximum diameter to be handled if such potatoes otherwise meet 
the requirements of the U.S. No. 1 grade. In addition, U.S. No. 1 grade 
Size B potatoes (1\1/2\ inches minimum diameter to 2\1/4\ inches 
maximum diameter) are also allowed to be handled. The size requirements 
for U.S. No. 2 and better grade potatoes that are 1\7/8\ inches minimum 
diameter and larger are not affected by this change. The rule was 
unanimously recommended by the Committee at a meeting on May 12, 2011. 
The changes are expected to enhance orderly marketing conditions and 
increase returns for producers and handlers.
    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 requirements issued pursuant to Sec.  
948.22.
    Section 948.40 provides that whenever the handling of potatoes is 
regulated pursuant to Sec. Sec.  948.20 through 948.24, such potatoes 
must be inspected by the Federal-State Inspection Service and certified 
as meeting the applicable requirements of such regulations.
    Under the order, the State of Colorado is divided into three 
separate regulatory areas for marketing order purposes. Area No. 1, 
commonly known as the Western Slope, includes and consists of the 
counties of Routt, Eagle, Pitkin, Gunnison, Hinsdale, La Plata, and all 
counties west thereof; Area No. 2, commonly known as the San Luis 
Valley, includes and consists of the counties of Saguache, Huerfano, 
Las Animas, Mineral, Archuleta, and all counties south thereof; and 
Area No. 3 includes and consists of all the remaining counties in the 
State of Colorado which are not included in Area No. 1 or Area No. 2. 
The order currently regulates the handling of potatoes grown in Areas 
No. 2 and No. 3 only; regulation for Area No. 1 is currently not 
active.
    Grade, size, and maturity regulations specific to the handling of 
Colorado potatoes grown in Area No. 3 are contained in Sec.  948.387 of 
the order's administrative rules and regulations. Prior to this action, 
Sec.  948.387(a) required that all varieties of potatoes handled under 
the order be U.S. No. 2 or better grade and 1\7/8\ inches minimum 
diameter or 4 ounces minimum weight, except that potatoes that meet the 
requirements of the U.S. No. 1 grade may be \3/4\ inch minimum 
diameter.
    The Committee met on May 12, 2011, to discuss revising the size 
requirements in the handling regulations. As a result of the 
deliberations, the Committee unanimously recommended modifying the size 
requirements for potatoes that meet U.S. No. 1 grade. Specifically, the 
Committee recommended establishing allowable size ranges for small size 
(under 1\7/8\ inches in diameter) U.S. No. 1 grade and better potatoes. 
With this final rule, two allowable size ranges, \3/4\ inch minimum 
diameter to 1\7/8\ inches maximum diameter and Size B (1\1/2\ inches 
minimum diameter to 2\1/4\ inches maximum diameter), are established 
for potatoes that otherwise meet or exceed the minimum requirements of 
the U.S. No. 1 grade standard. The allowable size ranges replace the 
\3/4\ inch minimum diameter size requirement allowance in effect prior 
to this action.
    The Committee has observed in recent years that consumer demand has 
been increasing for smaller size potatoes and that those size potatoes 
often command premium prices. The Committee previously responded to 
this trend by modifying the size requirements in the handling 
regulations to allow for the handling of \3/4\ inch minimum diameter 
and larger size potatoes, if the potatoes otherwise meet the 
requirements of the U.S. No. 1 grade. However, the \3/4\ inch minimum 
size requirement had no other parameters associated with it and allowed 
for the commingling of small size potatoes (under 1\7/8\ inches in 
diameter) with larger size potatoes (over 1\7/8\ inches in diameter).
    The Committee reiterated that quality assurance is important to the 
industry and to consumers. Providing consistent, high quality potatoes 
is necessary to maintain consumer confidence. The potential for mixing 
small size potatoes with larger size potatoes in the same container is 
perceived by the Committee as being contrary to the goals of 
maintaining orderly marketing conditions and ensuring that only 
consistent, high quality potatoes from

[[Page 80213]]

the production area enter the market. As such, the Committee felt that 
implementing revisions to the size requirements helps to maintain the 
consistency and quality of the product while still allowing the 
industry the maneuverability to respond to changing consumer 
preferences.

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 
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.
    Based on Committee data, there are eight producers (the majority of 
whom are also handlers) in the regulated area and eight handlers (the 
majority of whom are also producers) subject to regulation under the 
order. Small agricultural producers are defined by the Small Business 
Administration (13 CFR 121.201) as those having annual receipts of less 
than $750,000, and small agricultural service firms are defined as 
those having annual receipts of less than $7,000,000.
    According to the Committee, 981,609 hundredweight of Colorado Area 
No. 3 potatoes were produced for the fresh market during the 2009-2010 
season. Based on National Agricultural Statistics Service (NASS) data, 
the average producer price for Colorado summer potatoes for that season 
was $6.90 per hundredweight. The average annual producer revenue for 
the eight Colorado Area No. 3 potato producers is therefore calculated 
to be approximately $846,637. Using Committee data regarding each 
individual handler's total shipments during the 2009-2010 fiscal period 
and a Committee estimated average f.o.b. price for 2010 of $9.10 per 
hundredweight ($6.90 per hundredweight producer price plus estimated 
packing and handling costs of $2.20 per hundredweight), none of the 
Colorado Area No. 3 potato handlers ship over $7,000,000 worth of 
potatoes. Thus, all of the handlers and many of the producers of 
Colorado Area No. 3 potatoes may be classified as small entities.
    This final rule makes revisions to the size requirements contained 
in the order's handling regulations. The rule revises the size 
requirements to establish two allowable size ranges--\3/4\ inch minimum 
to 1\7/8\ inches maximum diameter and Size B--if such potatoes 
otherwise meet the requirements of the U.S. No. 1 grade standard. The 
revisions promote orderly marketing by ensuring that only potatoes of a 
similar size profile are shipped in the same container.
    The authority for regulating grade and size is provided in Sec.  
948.22 of the order. Section 948.387(a) of the order's administrative 
rules and regulations prescribes the applicable size requirements.
    This rule is expected to have a beneficial impact on handlers and 
producers by maintaining the superior reputation of the industry and 
ensuring that only consistent, high quality potatoes are shipped from 
the production area. There should be no extra cost to producers or 
handlers as a result of the changes because current harvesting and 
handling methods can accommodate the sorting of these smaller potatoes. 
The Committee believes that this revision will translate into greater 
returns for handlers and producers over time.
    Neither NASS nor the Committee compiles statistics relating to the 
production of potatoes measuring less than 1\7/8\ inches in diameter. 
The Committee has relied on information provided by producers and 
handlers familiar with the small potato market for its recommendation.
    As small potatoes have grown in popularity with consumers, high 
quality potatoes from Colorado have been in demand. The Committee 
believes that modifying the size requirements for such small potatoes 
will help maintain their consistency and increase their quality 
reputation in the market. The changes are expected to increase sales of 
Colorado potatoes and to benefit the Colorado potato industry. The 
benefits of this rule are not expected to be disproportionately greater 
or lesser for small entities than for large entities.
    The Committee discussed alternatives to this recommendation, 
including taking no action on the matter. One alternative discussed was 
to use size ranges other than the ranges that the Committee eventually 
recommended. The Committee felt that the size ranges established by 
this rule offer the best compromise between regulatory control and 
accommodation of the marketing needs of the handlers. Another 
alternative was to establish just one \3/4\ inch to 1\7/8\ inches size 
range for small potatoes. However, that alternative was rejected 
because it would not have accommodated the mid-size range potatoes 
(1\1/2\ to 2\1/4\ inches) that some handlers prefer to ship. Thus, the 
Committee unanimously agreed that their recommendation reflected the 
best alternative available to achieve the desired result.
    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 action does 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. In addition, USDA 
has not identified any relevant Federal rules that duplicate, overlap, 
or conflict with this final rule.
    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, the Committee's meeting was widely publicized 
throughout the potato industry, and all interested persons were invited 
to attend the meeting and participate in Committee deliberations. Like 
all Committee meetings, the May 12, 2011, meeting was a public meeting 
and all entities, both large and small, were able to express their 
views on this issue.
    A proposed rule concerning this action was published in the Federal 
Register on August 30, 2011 (76 FR 53842). Copies of the rule were made 
available by Committee staff to all Committee members and potato 
handlers. Finally, the rule was made available through the Internet by 
USDA and the Office of the Federal Register. A 60-day comment period 
ending October 31, 2011, was provided to allow interested persons to 
respond to the proposal. No comments were received. Accordingly, no 
changes have been made to the rule as proposed.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: 
www.ams.usda.gov/

[[Page 80214]]

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.
    After consideration of all relevant matter presented, including the 
information and recommendation submitted by the Committee and other 
available information, it is hereby found that this rule, as 
hereinafter set forth, will tend to effectuate the declared policy of 
the Act.
    It is further found that good cause exists for not postponing the 
effective date of this rule until 30 days after publication in the 
Federal Register (5 U.S.C. 553) because handlers are already shipping 
potatoes from the 2011-2012 crop and handlers want to take advantage of 
the revisions as soon as possible. Further, handlers are aware of this 
rule, which was recommended at a public meeting. Also, a 60-day comment 
period was provided for in the proposed 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.  948.387, revise paragraph (a) to read as follows:

Sec.  948.387  Handling regulation.

* * * * *
    (a) Minimum grade and size requirements--All varieties. (1) U.S. 
No. 2 or better grade, 1\7/8\ inches minimum diameter or 4 ounces 
minimum weight.
    (2) U.S. No. 1 grade, Size B (1\1/2\ inches minimum to 2\1/4\ 
inches maximum diameter).
    (3) U.S. No. 1 grade, \3/4\ inch minimum to 1\7/8\ inches maximum 
diameter.
* * * * *

    Dated: December 14, 2011.
Robert C. Keeney,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2011-32927 Filed 12-22-11; 8:45 am]
BILLING CODE 3410-02-P
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