[Federal Register Volume 63, Number 193 (Tuesday, October 6, 1998)]
[Rules and Regulations]
[Pages 53543-53546]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-26763]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 63, No. 193 / Tuesday, October 6, 1998 /
Rules and Regulations
[[Page 53543]]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 1207
[FV-96-703FR]
Potato Research and Promotion Plan; Suspension of Portions of the
Plan; Amendments of the Regulations Regarding Importers' Votes; and
Clarification of Reporting Requirements
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: The U.S. Department of Agriculture (USDA or the Department) is
adopting without modification as a final rule an interim final rule
which suspended portions of the Potato Research and Promotion Plan
(Plan) that required National Potato Promotion Board (Board) members to
be nominated at meetings, suspended obsolete provisions in the Plan,
amended the rules and regulations issued under the Plan to provide for
mail balloting as an alternative means of selecting nominees for
appointment, permitted importer members of the Board to vote on the
basis of the volume of imported potatoes, and provided in the rules and
regulations that designated handlers must report to the Board those
potatoes of their own production for which the assessment has been paid
by another designated handler.
EFFECTIVE DATE: November 5, 1998.
FOR FURTHER INFORMATION CONTACT: Michael I. Hankin, Research and
Promotion Branch, Fruit and Vegetable Programs, AMS, USDA, Stop 0244,
1400 Independence Avenue, S.W., Washington, DC 20250-0244; telephone
(202) 720-9915 or (888) 720-9917 (toll free).
SUPPLEMENTARY INFORMATION: This rule is issued under the Potato
Research and Promotion Plan (Plan) [7 CFR Part 1207]. The Plan is
authorized by the Potato Research and Promotion Act, as amended [7
U.S.C. 2611-2627], hereinafter referred to as the Act.
Executive Order 12988
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. It is not intended to have retroactive effect. This
rule will not preempt any state or local laws, regulations, or policies
unless they present an irreconcilable conflict with this rule.
The Act provides that administrative proceedings must be exhausted
before parties may file suit in court. Under section 311 of the Act, a
person subject to a plan may file a petition with the Secretary of
Agriculture (Secretary) stating that such plan, any provision of such
plan, or any obligation imposed in connection with such plan is not in
accordance with law; and requesting a modification of the plan or an
exemption from the plan. Such person is afforded the opportunity for a
hearing on the petition. After the hearing, the Secretary will rule on
the petition. The Act provides that the district court of the United
States in any district in which such person is an inhabitant, or has
principal place of business, has jurisdiction to review the Secretary's
ruling on the petition, provided that a complaint is filed within 20
days after the date of entry of the ruling.
Executive Order 12866 and Regulatory Flexibility Act
This rule has been determined not significant for purposes of
Executive Order 12866 and, therefore, has not been reviewed by the
Office of Management and Budget (OMB).
In accordance with the Regulatory Flexibility Act [5 U.S.C. 601 et
seq.] (RFA), the Agency has examined the impact of this rule on small
entities. Accordingly, we have performed this final regulatory
flexibility analysis.
According to data from the 1992 Census of Agriculture, published by
the Department of Commerce, there are approximately 6,744 potato
producers who grow potatoes on 5 or more acres and are thus subject to
the provisions of the Plan. Of these, approximately 4,817 potato
producers may be classified as small agricultural producers. Small
agricultural producers are defined by the Small Business Administration
[13 CFR 121.601] as those having annual receipts of less than $500,000.
Therefore, the majority of potato producers may be classified as small
entities.
According to data from the Board, there are an estimated 1,511
potato handlers, 334 importers of potatoes and potato products for
human consumption, and 27 importers of seed potatoes who are subject to
the provisions of the Plan. Small agricultural service firms are
defined by the Small Business Administration [13 CFR 121.601] as those
whose annual receipts are less than $5 million. For the purpose of this
analysis, it is concluded that the majority of potato handlers and
importers are small entities.
The 1997 U.S. potato crop is at 46.6 billion pounds, down 8 percent
or approximately 3.9 billion pounds from 1996. For 1997, Idaho leads in
the production of potatoes with 29 percent of the total, followed by
Washington (19 percent). Colorado, Oregon, and Wisconsin each produced
6 percent of the 1997 crop, and North Dakota contributed 5 percent to
the total. Other major producing states in 1997 were Minnesota, Maine
and California (4 percent each), and Michigan (3 percent). Nebraska,
New York, and Florida each produced approximately 2 percent of the U.S.
total; all other states produced less than 1 percent each. Per capita
consumption of potatoes in the United States has increased from 125.2
pounds in 1976 to 142.4 pounds in 1997.
Using preliminary data from NASS that shows an average U.S. farm
price for potatoes in 1997 was $5.68 per cwt., the value of the 1997
U.S. potato crop is estimated at $2.60 billion.
Exports of all types of potatoes and potato products during 1997
totaled approximately 4.3 billion pounds on a fresh weight basis. East
Asia and Pacific Rim countries are the largest markets for frozen
potatoes and frozen french fries, while Canada is the largest market
for exports of U.S. tablestock and seed potatoes.
Imports of tablestock, seed potatoes, and processed potatoes
(frozen, canned, chips, etc.) for 1997 totaled 2.7 billion pounds on a
fresh weight basis. Tablestock, seed potatoes, and frozen potato
products accounted for about 94 percent of the total value of potato
imports, and over 99 percent of these items came from Canada. Starch
for
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human consumption accounted for about 4 percent of the total value of
potato imports. Nearly all imports of potato starch for human
consumption came from Europe, with The Netherlands accounting for 57
percent, and Germany 34 percent of the total tonnage. The remaining two
percent of the value of total potato imports was from flour, flakes,
granules, and chips.
The Board administers a national program of research, development,
advertising, and promotion designed to strengthen potatoes' competitive
position and to maintain and expand domestic and foreign markets for
potatoes and potato products. The program is financed by assessments on
producers of 5 or more acres of potatoes (collected by the first
handler) and on all imported fresh or processed potatoes for human
consumption and seed potatoes (collected by the U.S. Customs Service).
The Secretary has oversight responsibility for the Board's activities.
There are currently 107 Board members--102 producers; 4 importers; and
1 public member--who are appointed by the Secretary to serve a 3-year
term on the Board. Approximately one third of the members' terms of
office expire each year on the last day of February.
On September 2, 1997 [62 FR 46175], an interim final rule suspended
portions of the Plan and amended the rules and regulations issued under
the Plan.
The suspension of portions of the Plan eliminated the requirement
that industry members be nominated for appointment to the Board only at
meetings of producers or importers. The rules issued under the Plan are
also being amended to provide mail balloting as an alternative means of
selecting nominees for appointment.
At the time, the Plan required nominations for producer and
importer members to be submitted to the Department of Agriculture (USDA
or the Department) by November 1 of each year for appointments to be
made by the Secretary by March 1 of the following year. In order to
provide the largest number of producers an opportunity to participate,
nomination meetings are typically held in conjunction with meetings of
state or local potato or vegetable industry organizations, usually late
in the fall after harvesting. However, in many cases, this places
nomination meetings close to or after the November 1 deadline for
submitting nominations to USDA. Additionally, in some states, potato
production may be in widely separated locations, posing a hardship for
growers to attend meetings. In some cases, growers must travel several
hundred miles and incur the expense of an overnight stay in order to
participate in a nomination meeting. In these cases, attendance at
meetings has suffered.
In addition, all importers have had to fly to Denver to attend a 1-
hour nomination meeting.
For several years, the Board discussed this problem with USDA. At
its January 1997 meeting, the Board's Administrative Committee, acting
on behalf of the Board, voted to recommend to USDA that action be taken
to suspend portions of the Plan and to amend the rules and regulations
to permit members of the potato industry the flexibility to choose the
manner of nominating candidates for appointment. Providing the option
of a mail ballot for nominating candidates provided an opportunity for
a greater number of industry members to participate in the nomination
process. In some cases, the burden and expense for producers to travel
long distances to attend a nomination meeting has been eliminated.
Permitting an optional means of nominating importers members also
eliminated the time and expense currently incurred for importers to
participate in these meetings. Additionally, nomination activity no
longer has to be coupled with industry meetings, thus permitting the
nomination process to take place early enough that the nominees'
applications for appointment can be forwarded to USDA well before the
November 1 deadline.
If these changes had not been made, producers and importers would
have continued to incur financial and time loss to attend and
participate in nomination meetings, and attendance at these meetings
would have continued to suffer.
The second amendment to the rules and regulations permitted
importer members of the Board to vote on the basis of the volume of
imported potatoes, processed potato products, and seed potatoes in the
same manner as producer members of the Board vote on the basis of
domestic potato production. Since the program's inception, the Plan
permitted producer members to call for a vote by the production of each
State. In the 1990 Farm Bill, Congress amended the Act to include,
along with other changes, imported potatoes and potato products for
human consumption and seed potatoes under the program's provisions.
When the Plan and rules and regulations were amended to conform with
the amended Act, a provision permitting importers to vote on the basis
of the volume of imported potatoes was inadvertently omitted. In
production votes taken by the Board since imports were included in the
program's provisions, importers have voted the volume of potato imports
on a fresh-weight basis.
The interim final rule corrected the oversight and included
provisions in the regulations to reflect the procedure currently in
practice. Importers' votes carry the same proportional weight as
producers' votes, resulting in equitable treatment of importers.
The third amendment made by the interim final rule specified in the
rules and regulations that designated handlers of potatoes must report
to the Board those potatoes of their own production for which the
assessment has been paid by another first handler.
Previously, the regulations required designated handlers of
potatoes to report and pay assessments on the potatoes of someone
else's production that they handle. In some cases, designated handlers
are also producers, and the assessment for their potato production may
be paid by another designated handler. For example, a processor who
purchases field-run potatoes is considered the designated handler and
is responsible for reporting to the Board and paying assessments on
those potatoes even though the producer may also be a designated
handler who is also submitting reports and assessments to the Board. In
order for the Board to assure that all handling has been reported and
assessments have been paid and credited to the producer, the Board must
be able to cross-reference the handling of potatoes on the reports of
both designated handlers.
The authority for this information collection exists in
Sec. 1207.350 of the Plan. The rulemaking was necessary to provide in
the text of the regulation concerning designated handlers' reporting
responsibilities that designated handlers must report to the Board
those potatoes of their own production for which the assessment has
been paid by another designated handler. The information collection
burden and the form used to collect the information on handling of
potatoes have been reviewed and approved by OMB under approval number
0581-0093. The 1-hour-per-response burden currently approved includes
the time necessary for designated handlers to provide information on
assessments paid by another designated handler on the reporting form
submitted no more often than monthly. This information is readily
available from the confirmation each designated handler is required to
provide to producers on the amount of assessments paid on their behalf.
[[Page 53545]]
In addition, the interim final rule suspended obsolete provisions
in the Plan referring to meetings, nomination of the initial Board, and
references to importer organizations.
As with all Federal research and promotion programs, reports and
forms are periodically reviewed to reduce information requirements and
duplication by industry and public sector agencies.
This rule finalizes the action that permitted importer members of
the Board to vote on the basis of the volume of imported potatoes. This
revision does not affect the estimated burden on potato growers or
designated handlers.
The Department has not identified any relevant Federal rules that
duplicate, overlap, or conflict with this rule.
The changes contained in this action finalize the suspension of
obsolete provisions in the Plan, provide for alternative means of
nominating candidates for appointment to the Board, provide importer
members a vote by volume at meetings, and clarify handlers' reporting
requirements. These changes enhance the efficiency of the operation of
the potato research and promotion program and reduce the financial
burden on industry members when nominating candidates for appointment
by the Secretary. Accordingly, we believe that these revisions are the
best alternatives to facilitate the nomination process, provide for
importer voting by production, and to clarify handlers' reporting
requirements.
Paperwork Reduction Act
This rule contains no new information collection or recordkeeping
requirements under the Paperwork Reduction Act of 1995 [44 U.S.C. 3501
et seq.]. The information collection and recordkeeping requirements
related to this action were previously approved by OMB under number
0581-0093.
Eliminating the requirement that industry members be nominated to
serve on the Board at meetings and providing the alternative of mail
balloting is less burdensome, overall, for potato producers and
importers, but the information collection burden remains the same. When
nominations are conducted by mail ballot rather than at a meeting, the
nomination ballot will be completed and mailed instead of being turned
in at a meeting.
The second amendment to the rules and regulations permits importer
members of the Board to vote on the basis of the volume of imported
potatoes, processed potato products, and seed potatoes in the same
manner as producer members of the Board vote on the basis of domestic
potato production. This amendment corrects an oversight and includes
provisions in the regulations to reflect procedures currently in
practice. Importers' votes carry the same proportional weight as
producers' votes and will result in equitable treatment of importers.
There is no burden associated with importers voting at Board meetings.
The third amendment provides in the rules and regulations that
designated handlers must report to the Board those potatoes of their
own production for which the assessments have been paid by another
handler. The information collection burden and the form used to collect
information on handling of potatoes have been reviewed and approved by
the OMB under approval number 0581-0093. The 1-hour-per-response burden
currently approved includes designated handlers providing information
on assessments paid by another designated handler on the reporting form
submitted no more often than monthly.
The form requires the minimum information necessary to effectively
carry out the requirements of the program, and its use is necessary to
fulfill the intent of the Act. Such information can be supplied without
data processing equipment or outside technical expertise. In addition,
there are no additional training requirements for individuals filling
out reports and remitting assessments to the promotion Board. The forms
are simple, easy to understand, and place as small a burden as possible
on the person required to file the information. This action will not
impose any additional reporting or recordkeeping requirements on either
small or large potato handlers.
Background
This action finalizes an interim final rule which suspended
portions of the Plan and amended three sections of the rules and
regulations issued under the Plan.
The suspension of portions of the Plan eliminated the requirement
that industry members be nominated for appointment to the Board only at
a meeting of producers or importers. Other obsolete provisions of the
Plan were also suspended. The rules issued under the Plan were also
amended to provide an alternative means of selecting nominees for
appointment such as by a mail ballot of the industry.
Previously, the Plan required nominations for producer and importer
members be submitted to USDA by November 1 of each year for
appointments to be made by the Secretary by March 1 of the following
year. In order to provide the largest number of producers an
opportunity to participate, nomination meetings are typically held in
conjunction with meetings of state or local potato or vegetable
industry organizations, usually after harvesting. However, this places
nomination meetings close to or after the November 1 deadline for
submitting nominations to USDA. Additionally, in some states, potato
production may be in widely separated locations, posing a hardship for
a grower--in some cases traveling several hours and incurring the cost
of an overnight trip--in order to participate in a nomination meeting.
In the case of importer nominations, the Plan provided that the
Board could call upon organizations of potato, potato products, and/or
seed potato importers to assist in nominating importers for appointment
to the Board. This provision was intended to allow importers the
opportunity to nominate importer members from their own membership.
However, no such organizations have been found to exist, and the Board
has conducted importer nomination meetings in Denver. Importers must
therefore travel to Denver for nomination meetings.
For several years, the Board discussed this problem with USDA. At
its January 1997 meeting, the Board's Administrative Committee, acting
on behalf of the Board, voted to recommend to USDA that action be taken
to suspend portions of the Plan and to amend the rules and regulations
to permit members of the potato industry the flexibility to choose the
manner of nominating candidates for appointment in a manner that would
provide for the ability for a greater number of industry members to
participate in the nomination process with less of a burden.
In order to do this, the interim final rule suspended wording
referring to meetings in Sec. 1207.322 of the Plan. Paragraph (a) of
Sec. 1207.322 dealt only with nomination of the initial Board and was
thus obsolete. Therefore, paragraph (a) was suspended in its entirety.
References to meetings were suspended in paragraphs (b) and (c).
Also, because no organizations of potato importers exist,
references to importer organizations are unnecessary and were suspended
in Sec. 1207.322(d).
In addition, references in Sec. 1207.503 of the rules and
regulations to meetings and importer organizations were removed and
amendments made to this section to provide the option of mail balloting
to nominate producers and importers for appointment to the Board.
[[Page 53546]]
A second amendment to the rules and regulations dealt with
importers being able to vote on the basis of the volume of the fresh-
weight equivalent of imported potatoes and potato products for human
consumption and seed potatoes in the same manner that producer members
can vote on the basis of potato production within each State.
One of the 1990 Farm Bill amendments to the Act [7 U.S.C. 2611 et
seq.] extended the Act's coverage to imported potatoes, potato
products, and seed potatoes and provided for importer representation on
the Board. When the Plan and rules and regulations issued under the
Plan were subsequently amended in 1991 to conform with the amended Act,
a provision permitting importer members to vote on the basis of the
volume of imported product was inadvertently overlooked. From the
program's inception, Sec. 1207.325 of the Plan authorized producer
members of the Board to call for a production vote in which the Board
members from each State are allocated votes based on that State's fresh
potato production (i.e., one vote for each 1 million hundredweight of
potatoes).
In production votes taken by the Board since imports were included
in the program's provisions, importers have voted the volume of potato
imports on a fresh-weight basis. At its March 1996 annual meeting, the
Board voted to amend the rules and regulations to correct this
oversight by amending Sec. 1207.505 to provide the same voting rights
as afforded to producer members.
The third amendment provided in the rules and regulations that
designated handlers must report to the Board those potatoes of their
own production for which the assessments have been paid by another
designated handler.
Section 1207.350(a) of the Plan provides authority for the Board to
prescribe in the regulations the information designated handlers must
report in order for the Board to perform its duties, and this
information is set forth in Sec. 1207.513 of the regulations. Some
designated handlers are also potato producers and, in some cases, the
assessment for their potato production may be paid by another
designated handler. For example, a processor who purchases field-run
potatoes is considered the designated handler and is responsible for
reporting to the Board and paying assessments on those potatoes even
though the producer may also be a designated handler who is also
submitting reports and paying assessments to the Board. In order for
the Board to assure that all handling has been reported and assessments
have been paid and credited to the producer, the Board must be able to
cross-reference the handling of potatoes on the reports of both
handlers. Since Sec. 1207.513 of the regulations did not specifically
state that designated handlers must report to the Board those potatoes
of their own production for which the assessments have been paid by
another designated handler, it was necessary to amend this section to
provide that handlers must report to the Board those potatoes of their
own production for which the assessment has been paid by another first
handler. Therefore, the interim final rule amended Sec. 1207.513 of the
regulations to provide for this reporting.
The interim final rule was issued on August 26, 1997, and published
in the Federal Register [62 FR 46179] on September 2, 1997. The
deadline for comments was November 3, 1997. No comments were received.
After consideration of all relevant material presented, including
the information and recommendation submitted by the Board, it is hereby
found that the suspended sections of the Plan no longer tend to
effectuate the declared policy of the Act. In addition, it is found
that the amendments to the rules and regulations are necessary for the
appropriate administration of the Plan and the rules and regulations
and that they are consistent with the intention of the Act.
List of Subjects in 7 CFR Part 1207
Advertising, Agricultural research, Marketing agreements, Potatoes,
Reporting and recordkeeping requirements.
PART 1207--POTATO RESEARCH AND PROMOTION PLAN
Accordingly, the interim final rule amending 7 CFR Part 1207 which
was published at 62 FR 46175 on September 2, 1997, is adopted as a
final rule without change.
Dated: September 30, 1998.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-26763 Filed 10-5-98; 8:45 am]
BILLING CODE 3410-02-P
