E9-29023. Vegetable Import Regulations; Modification of Potato Import Regulations

AGENCY:

Agricultural Marketing Service, USDA.

ACTION:

Final rule.

SUMMARY:

This rule modifies the import regulations for Irish potatoes by reducing the number of marketing order areas determined as being in the most direct competition with imported potatoes from five to three; exempting U.S. No. 1 grade potatoes imported in certain small containers from size requirements; and removing certain language from Marketing Orders No. 948 and 953 that reference the regulation of imported Irish potatoes. In addition, this rule makes minor administrative changes to the potato, onion, and tomato import regulations to update informational references. The modifications to the import regulations are expected to benefit potato importers and consumers.

DATES:

Effective Date: January 11, 2010.

FOR FURTHER INFORMATION CONTACT:

Barry Broadbent or Gary D. Olson, Northwest Marketing Field Office, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1220 SW. Third Avenue, Suite 385, Portland, OR 97204; Telephone: [phone], Fax: [phone], or E-mail: [e-mail] or [e-mail].

Small businesses may request information on complying with this regulation by contacting Jay Guerber, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC 20250-0237; Telephone: [phone], Fax: [phone], or E-mail: [e-mail].

SUPPLEMENTARY INFORMATION:

This final rule is issued under section 8e of the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act”, which provides that whenever certain specified commodities, including potatoes produced in certain areas, are regulated under a Federal marketing order, imports of that commodity must meet the same or comparable grade, size, quality, and maturity requirements as those in effect for the domestically produced commodity. The import regulations for vegetables issued under section 8e, which cover imports of Irish potatoes, onions, and tomatoes, are contained in 7 CFR part 980.

This final rule is also issued under Marketing Agreement No. 97 and Marketing Order No. 948, both as amended (7 CFR part 948), regulating the handling of Irish potatoes grown in Colorado, and Marketing Agreement No. 104 and Marketing Order No. 953, both as amended (7 CFR part 953), regulating the handling of Irish potatoes grown in two southeastern States (Virginia and North Carolina). Both orders are effective under the Act.

The Department of Agriculture (USDA) is issuing this rule in conformance with Executive Order 12866.

This final 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 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.

There are no administrative procedures which must be exhausted prior to any judicial challenge to the provisions of import regulations issued under section 8e of the Act.

Section 8e provides authority to regulate certain imported commodities whenever those same commodities are regulated by a domestic marketing order. Potatoes are one of the commodities specifically covered by section 8e in the Act. In addition, section 8e provides that whenever two or more such marketing orders regulating the same agricultural commodity produced in different areas are concurrently in effect, imports must comply with the provisions of the order which regulates the commodity produced in the area with which the imported commodity is in the “most direct competition.” Prior to this rule, five marketing orders were determined to be in most direct competition with Irish potato imports, varying by the type of potato and the shipping season. Section 980.1(a) reflected this determination.

This final rule modifies the Irish potato import regulations by reducing the number of domestic marketing order areas determined as being in the most direct competition with imported Irish potatoes from five to three. This final rule also exempts U.S. No. 1 grade potatoes that are imported in three-pound or less containers from any concurrent marketing order size requirements. Additionally, this final rule removes language contained in Marketing Orders No. 948 and 953 that becomes obsolete upon the implementation of this rule. Finally, this rule makes minor changes to update certain informational references contained in the Irish potato, onion, and tomato import regulations.

Prior to this action, five marketing orders were determined to be in most direct competition with imported Irish potatoes and acted as the basis for the establishment of minimum grade, size, quality, and maturity requirements for imported Irish potatoes, as set forth in the import regulations issued under section 8e. The marketing order areas that were previously determined to be in most direct competition were: Marketing Order No. 946 (Irish Potatoes Grown in Washington) for imports of red-skinned, round type potatoes during the period July through September; Marketing Order No. 948 (Area II) for imports of red-skinned, round type potatoes during the period October through the following June; Marketing Order No. 953 for imports of round white potatoes during the period June 5 through July 31; Marketing Order No. 948 (Area III) for imports of all other round type potatoes during the period August 1 through June 4 of the following year; and Marketing Order No. 945 for imports of long type potatoes during each month of the marketing year.

The previous determinations as to the areas in most direct competition needed to be updated to reflect current production trends. With this final rule, USDA is reducing the number of marketing orders determined to be in most direct competition with Irish potato imports from five to three: One for red-skinned, round type potatoes; one for all other varieties of round potatoes; and one for long type potatoes. Consequently, the import regulations for Irish potatoes (7 CFR 980.1) are revised by determining Marketing Order No. 946 as the production area in most direct competition with imports of red-skinned, round type potatoes through the entire year and Marketing Order No. 948 (Area II) as the production area in most direct competition with imports of all other round type potatoes through the entire year. Marketing Order No. 945 continues to be the area determined to be in most direct competition with imports of long type potatoes through the entire year.

Production trends in recent years justify the changes to the designation of the areas in most direct competition with imported potatoes. The production area for Irish potatoes grown in Washington, Marketing Order No. 946, has emerged as the clear domestic shipping leader for fresh packed red-skinned, round type potatoes, shipping more than three times the quantity as any other domestic area. Based on marketing order records for the years 2003-2007, the production area for Marketing Order No. 946 shipped an average of 1,370,410 hundredweight of red-skinned, round type, fresh packed potatoes. The next highest marketing order production area was the San Luis Valley of Colorado, covered by Marketing Order No. 948 (Area II). Based on marketing order statistics for the 2003-2007 period, the area shipped an average of 405,083 hundredweight of red-skinned, round type, fresh packed potatoes. Furthermore, handlers in the Marketing Order No. 946 production area shipped in all 12 months of the year.

The production area for Marketing Order 948 (Area II) does ship a larger volume of red-skinned, round type, fresh packed potatoes than Marketing Order 946 for a few months a year during its peak shipping season, but does not ship near the total quantity or for the length of time. Marketing Order 946, therefore, is established as the marketing order area in most direct competition year round due to its dominance in total shipping volumes and year round availability.

Establishing one marketing order as the area in most direct competition for red-skinned, round type potatoes more accurately reflects current production trends and simplifies the process for importers by having the same regulations established on a year round basis. As such, USDA has determined that, based on recent shipment statistics, Marketing Order No. 946 is the area in most direct competition with imports of red-skinned, round type potatoes for the entire year.

Likewise, the production area for Irish potatoes grown in the San Luis Valley of Colorado, Marketing Order No. 948 (Area II), has become the predominant domestic shipping area of all other round type, fresh packed potatoes, shipping more than double the quantity as any other area. Based on marketing order statistics for the years 2003-2007, the production area for Marketing Order No. 948 (Area II) shipped an annual average of 1,671,810 hundredweight of all other round type, fresh packed potatoes. In addition, handlers in Area II shipped all other round type potatoes in all 12 months of the year. Following Colorado Area II in the quantity handled of all other round type, fresh potatoes was the Marketing Order No. 946 production area, where an annual average of 778,400 hundredweight was shipped during this four year period.

Prior to this action, USDA had determined that the production areas for Marketing Orders No. 948 (Area III) and No. 953 were in most direct competition with imports of all other round type potatoes during certain periods of the year and were designated as such in the import regulations. However, these production areas no longer ship fresh Irish potatoes in quantities that warrant the continuation of such a designation. Marketing order committee statistics show that handlers in the production area for Marketing Order No. 948 (Area III) shipped an annual average of 203,115 hundredweight of all other round type, fresh potatoes for the years 2003-2007, or approximately 12 percent of the amount shipped by the leading shipping area. Similarly, based on marketing order committee statistics, handlers in the production area for Marketing Order No. 953 shipped an annual average of 303,558 hundredweight of all other round type, fresh potatoes during the years 2005-2007, which is approximately 18 percent of the amount shipped by the leading shipping area.

Marketing Order 946 does ship a large volume of other round type, fresh packed potatoes during a few months a year during its peak shipping season. However, Marketing Order 948 (Area II) is established as the marketing order area in most direct competition with potato imports year round due to the area's dominance in total yearly shipping volumes and year round availability. Establishing one marketing order as the order in most direct competition for other round type potatoes more accurately reflects current production trends and will simplify the process for importers by having consistent regulations for those type potatoes established on a year round basis. Consequently, USDA has determined that, based on recent shipment statistics, Marketing Order No. 948 (Area II) is the area in most direct competition with imports of all other round type potatoes for the entire year.

The production area for Irish potatoes grown in certain designated counties in Idaho, and Malheur County, Oregon, covered by Marketing Order No. 945, has been, and is expected to continue to be, the production and shipping leader for long type potatoes. As such, the determination of the area in most direct competition with long type Irish potato imports as currently contained in the import regulations continues unchanged.

This final rule also exempts U.S. No. 1 grade potatoes of any type imported in 3 pound or less containers from the size requirements otherwise specified in the potato import regulations. Marketing Order No. 946, which covers potato production in the state of Washington, contains this exemption in its handling regulation. Washington is the only domestic potato production area to ship U.S. No. 1 grade potatoes in 3 pound or less containers without regard to size. However, they are marketed throughout the year. Therefore, the exemption from size requirements for imported potatoes in 3 pound or less containers is based upon the regulation established under Marketing Order 946 for the entire year. This change will allow importers to import potatoes under comparable regulation.

Additionally, as a result of the changes delineated above, this final rule removes §§ 948.387(h) and 953.322(g) from their respective marketing orders. These paragraphs, specifically addressing “Applicability to imports”, are no longer relevant given the changes in the determination of areas in most direct competition with imported potatoes.

Marketing Orders No. 948 (Area III) and No. 953 continue to be viable marketing orders in providing for the orderly marketing of Irish potatoes in the respective production areas. This action has no direct bearing on the operation of those programs. The changes in the determination simply means that those marketing orders will no longer be used as a basis for establishing Irish potato import requirements and, as such, any language in those marketing orders that link the orders to the potato import regulations is obsolete.

Lastly, this rule makes minor changes to certain reference information included in the import regulations covering potatoes, onions, and tomatoes that either require updating or have become obsolete since the subpart was last amended. Specifically, the designation of governmental inspection services are amended to reflect agency name changes, references to certain Code of Federal Regulations citation numbers are updated to acknowledge changes, and other outdated address information is brought current.

USDA believes that the modifications specified above will streamline the import regulations that potato importers are subject to. It is expected that these changes will benefit importers of Irish potatoes and consumers.

Final Regulatory Flexibility Analysis

Pursuant to the requirements set forth in the Regulatory Flexibility Act (RFA), 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.

Small agricultural producers are defined as those whose annual receipts are less than $750,000, and small agricultural service firms, including potato importers, are defined by the Small Business Administration (13 CFR 121.201) as those having annual receipts of less than $7,000,000. There are approximately 255 importers of all types of potatoes who are subject to regulation under the Act. The majority of potato importers may be classified as small entities.

This final rule modifies the import regulations for Irish potatoes (7 CFR 980.1) by reducing the number of areas designated as being in most direct competition with Irish potato imports from five to three to reflect changes in domestic production trends. This final rule designates Marketing Order No. 946 as the sole production area in most direct competition with imports of red-skinned, round type potatoes, whereas the previous determination was that both Marketing Orders No. 946 and No. 948 (Area II) were the areas in most direct competition during certain specific periods of the year. This final rule also designates Marketing Order No. 948 (Area II) as the production area in most direct competition with imports of all other round type potatoes, whereas the previous determination was that Marketing Orders No. 948 (Area III) and No. 953 were the areas in most direct competition during certain specific periods of the year.

Section 8e of the Act provides authority for the regulation of imported Irish potatoes, whenever similar type potatoes are regulated by a domestic marketing order. In addition, section 8e provides that whenever two or more such marketing orders regulating the same agricultural commodity produced in different areas are concurrently in effect, imports must comply with the provisions of the marketing order which regulates the commodity produced in the area with which the imported commodity is in the “most direct competition.”

Prior to this action, the Irish potato import regulations required importers to comply with the grade, size, quality, and maturity requirements of five marketing orders (Marketing Orders No. 945, No. 946, No. 948 (Area II and Area III), and No. 953) depending on the type of potato and the time period when shipped. This final rule reduces that number to three by eliminating Marketing Orders No. 948 (Area III) and No. 953 from the determinations in § 980.1(a). With this action, Marketing Order No. 946 is determined as the area in most direct competition with imports of red-skinned, round type potatoes, and Marketing Order No. 948 (Area II) is determined as the area in most direct competition with imports of all other round type potatoes. Marketing Order No. 945 continues as the area determined to be in most direct competition with imports of all long type potatoes.

Designating just three marketing orders as being generally in most direct competition with imported potatoes of similar type more accurately reflects current domestic production trends. Statistics from recent years show that the production area of Marketing Order No. 946 (Irish potatoes grown in Washington) has emerged as the clear leader in the production of red-skinned, round type potatoes, nearly tripling the next largest production area (Marketing Order No. 948 (Area II)). Likewise, the production area of Marketing Order No. 948 (Area II) (Irish potatoes grown in the San Luis Valley of Colorado) has become the production leader of all other round type potatoes, producing over twice the quantity of these type potatoes than the next largest domestic producing region (Marketing Order No. 946). The production area for Marketing Order No. 945 (Irish potatoes grown in certain designated counties in Idaho, and Malheur County, Oregon) continues to be the production leader of long type potatoes.

This final rule also exempts U.S. No. 1 grade potatoes of any type imported in 3 pound or less containers from the size requirements otherwise specified in the potato import regulations. Marketing Order No. 946, which covers the only domestic potato production area that ships such potatoes, currently contains this exemption. However, they are marketed throughout the year. Therefore, the exemption from size requirements for imported potatoes in 3 pound or less containers should be based upon the regulation established under Marketing Order No. 946 for the entire year. This change allows importers to import potatoes under comparable regulation.

Additionally, as a result of the changes to the import regulations delineated above, this rule removes §§ 948.387(h) and 953.322(g) from the respective marketing orders. These paragraphs, specifically addressing “Applicability to imports,” are no longer be necessary after the determination of areas in most direct competition with imported potatoes are modified.

Lastly, this final rule makes minor changes to certain informational references included in the import regulations covering potatoes, onions, and tomatoes that require updating since the subpart was last amended. Specifically, the designation of the governmental inspection service is amended to reflect agency name changes, references to certain Code of Federal Regulations citation numbers are updated to acknowledge changes, and outdated address information is brought current.

In most cases, the changes to the potato import regulations constitute a relaxation of the regulatory requirements that potato imports are subject to. In all other cases, this action represents a continuation of the current regulatory requirements. Therefore, the changes enacted by this final rule either maintain or reduce the regulatory burden on potato importers.

Imports of red-skinned, round type potatoes, previously subject to the requirements of Marketing Orders No. 946 and 948 (Area II), will now only be subject to the requirements of Marketing Order No. 946. The minimum size requirements in Marketing Order No. 946 are less restrictive than the size requirements in Marketing Order No. 948 (Area II).

Likewise, imports of all other round type potatoes, previously subject to the requirements of Marketing Orders No. 948 (Area III) and 953, will now only be subject to the requirements of Marketing Order No. 948 (Area II). The minimum size requirements in Marketing Order No. 948 (Area II) are less restrictive than the requirements of both Marketing Orders No. 948 (Area III) and 953.

Exempting U.S. No. 1 grade potatoes handled in 3 pound or less containers from size requirements is also considered a relaxation of the current regulations.

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.

This final rule will not impose any additional reporting or recordkeeping requirements on either small or large potato importers. As with all Federal marketing order programs and corresponding import regulations, 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.

A proposed rule concerning this action was published in the Federal Register on May 29, 2009 (74 FR 25678). The rule was made available through the Internet by USDA and the Office of the Federal Register. A 60-day comment period ending July 28, 2009, was provided to allow interested persons to respond to the proposal. No comments were received. Accordingly, no changes will be 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 the following Web site: http://www.ams.usda.gov/​AMSv1.0/​ams.fetchTemplateData.do?​template=​TemplateN&​page=​MarketingOrdersSmallBusinessGuide. Any questions about the compliance guide should be sent to Jay Guerber at the previously mentioned address in the FOR FURTHER INFORMATION CONTACT section.

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 matter presented, it is hereby found that this rule, as hereinafter set forth, will tend to effectuate the declared policy of the Act.

List of Subjects

7 CFR Part 948

• Marketing agreements
• Potatoes
• Reporting and recordkeeping requirements

7 CFR Part 953

• Marketing agreements
• Potatoes
• Reporting and recordkeeping requirements

7 CFR Part 980

• Food grades and standards
• Imports
• Marketing agreements
• Onions
• Potatoes
• Tomatoes

For the reasons set forth in the preamble, 7 CFR parts 948, 953, and 980 are amended as follows:

1. The authority citation for 7 CFR part 948, 953, and 980 continues to read as follows:

Authority: 7 U.S.C. 601-674.

PART 948—IRISH POTATOES GROWN IN COLORADO

2. In § 948.387, paragraph (h) is removed.

PART 953—IRISH POTATOES GROWN IN SOUTHEASTERN STATES

3. In § 953.322, paragraph (g) is removed.

PART 980—VEGETABLES; IMPORT REGULATIONS

4. In § 980.1, paragraphs (a)(2)(i), (a)(2)(ii), (b)(1), (b)(2), and (j) are revised to read as follows:

§ 980.1

Import regulations; Irish potatoes.

(a) * * *

(2) * * *

(i) Imports of red-skinned, round type potatoes during each month of the marketing year are in most direct competition with potatoes of the same type produced in the area covered by Marketing Order No. 946 (part 946 of this chapter).

(ii) Imports of all other round type potatoes during each month of the marketing year are in most direct competition with potatoes of the same type produced in Area 2, Colorado (San Luis Valley) covered by Marketing Order No. 948, as amended (part 948 of this chapter).

* * * * *

(b) * * *

(1) Through the entire year, the grade, size, quality, and maturity requirements of Marketing Order No. 946, as amended (part 946 of this chapter), applicable to potatoes of the red-skinned, round type shall be the respective grade, size, quality, and maturity requirements for all imported red-skinned, round type potatoes.

(2) Through the entire year, the grade, size, quality, and maturity requirements of Area II, Colorado (San Luis Valley) covered by Marketing Order No. 948, as amended (part 948 of this chapter), applicable to potatoes of the round type, other than red-skinned varieties, shall be the respective grade, size, quality, and maturity requirements for imports of all other round type potatoes.

* * * * *

(j) Exemptions. (1) The grade, size, quality and maturity requirements of this section shall not be applicable to potatoes imported for canning, freezing, other processing, livestock feed, charity, or relief, but such potatoes shall be subject to the safeguard provisions contained in § 980.501. Processing includes canning, freezing, dehydration, chips, shoestrings, starch and flour. Processing does not include potatoes that are only peeled, or cooled, sliced, diced, or treated to prevent oxidation, or made into fresh potato salad.

(2) There shall be no size requirements for potatoes that are imported in containers with a net weight of 3 pounds or less, if the potatoes are otherwise U.S. No. 1 grade or better.

5. Amend § 980.117 as follows:

a. Revise paragraph (e) to read as set forth below;

b. Amend paragraph (f)(2) by removing the reference “( 7 CFR part 2851)” and by adding in its place the reference “(7 CFR part 51)”; and

c. Amend paragraph (h), by removing the references “( 7 CFR 2851.3195 through 2851.3209)”, “(7 CFR 2851.3955 through 2851.3970)” and “(7 CFR 2851.3195 through 2851.3209)” and by adding in their places the references “(7 CFR 51.3195 through 51.3209)”, “(7 CFR 51.3955 through 51.3970)” and “(7 CFR 51.3195 through 51.3209)” respectively.

§ 980.117

Import regulations; onions.

* * * * *

(e) Designation of governmental inspection service. The Federal or Federal-State Inspection Service, Fruit and Vegetable Programs, Agricultural Marketing Service, U.S. Department of Agriculture and the Food of Plant Origin Division, Plant Products Directorate, Canadian Food Inspection Agency, are hereby designated as governmental inspection services for the purpose of certifying the grade, size, quality, and maturity of onions that are imported, or to be imported, into the United States under the provisions of section 8e of the Act.

* * * * *

6. Amend § 980.212 as follows:

a. Revise paragraph (e) to read as set forth below;

b. Amend paragraph (f)(2) by removing the reference “( 7 CFR 2851)” and by adding in its place the reference “(7 CFR 51)”; and

c. Amend paragraph (h) by removing the words “( 7 CFR 2851.1855 through 2851.1877; title 7, chapter I, part 51 was redesignated title 7, chapter 28, part 2851 on June 27, 1977)” and by adding in their place the words “(7 CFR 51.1855 through 51.1877).”

§ 980.212

Import regulations; tomatoes.

* * * * *

(e) Designation of governmental inspection service. The Federal or Federal-State Inspection Service, Fruit and Vegetable Programs, Agricultural Marketing Service, U.S. Department of Agriculture and the Food of Plant Origin Division, Plant Products Directorate, Canadian Food Inspection Agency, are hereby designated as governmental inspection services for the purpose of certifying the grade, size, quality, and maturity of tomatoes that are imported, or to be imported, into the United States under the provisions of section 8e of the Act.

* * * * *

§ 980.501

[Amended]

7. Amend § 980.501 as follows:

a. Amend paragraph (a)(4) by removing the words “Fruit and Vegetable Division” in the first and second sentences and by adding in their places the words “Fruit and Vegetable Programs”; and

b. Amend paragraph (d) by removing the address “Marketing Order Administration Branch, USDA, AMS, P.O. Box 96456, Room 2523-S, Washington, DC 20090-6456, telephone [phone]” and by adding in its place the address “Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC 20250-0237, telephone [phone].”

Dated: December 1, 2009.

Rayne Pegg,

Administrator, Agricultural Marketing Service.