[Federal Register Volume 62, Number 105 (Monday, June 2, 1997)]
[Rules and Regulations]
[Pages 29649-29652]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-14273]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
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The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 62, No. 105 / Monday, June 2, 1997 / Rules
and Regulations
[[Page 29649]]
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DEPARTMENT OF AGRICULTURE
Agriculture Marketing Service
7 CFR Part 80
[FV-97-80-01]
Regulation Governing the Fresh Irish Potato Diversion Program,
1996 Crop
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim final rule with request for comments.
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SUMMARY: This interim rule sets forth the terms of the Fresh Irish
Potato Diversion Program for the 1996 crop pursuant to clause (2) of
section 32 of the Act of August 24, 1935, as amended. The program will
assist fresh Irish potato growers faced with oversupplies and low
prices by diverting potatoes to charitable institutions, and to
livestock feed.
DATES: This rule is effective May 29, 1997. Comments must be received
by July 2, 1997.
ADDRESSES: Interested persons are invited to submit written comments
concerning this action to: Susan Proden, Acting Chief, Commodity
Procurement Branch, Fruit and Vegetable Division, AMS, USDA, P.O. Box
96456, room 2548--South Building, Washington, DC 20090-6456. All
written submissions made pursuant to this rule will be made available
for public inspection in room 2548--South Building, USDA, between the
hours of 8:00 a.m. and 4:30 p.m. Monday through Friday.
FOR FURTHER INFORMATION CONTACT: Sandra Gardei, Assistant Branch Chief,
room 2548--South Building, USDA or call (202) 720-6391.
SUPPLEMENTARY INFORMATION:
Regulatory Requirements
This interim final rule has been reviewed under USDA procedures
established in accordance with Executive Order 12291 and Departmental
Regulation No. 1512-1 and has been designated as ``nonmajor''. It has
been determined that this rule will not result in: (1) An annual effect
on the economy of $100 million or more; (2) A major increase in costs
or prices for consumers, individual industries, federal, state or local
governments, or geographical regions; or (3) significant adverse
effects on competition, employment, investment, productivity,
innovation, or the ability of United States based enterprises in
domestic or export markets.
Executive Order 12778
This interim rule has been reviewed under USDA procedures
established in accordance with Executive Order 12778 Civil Justice
Reform. The provisions of the interim rule do not preempt state law and
are not retroactive. Before any judicial action may be brought
regarding the provisions of this interim rule the appeal and mediation
procedure in 7 CFR part 780 must be exhausted.
Paperwork Reduction Act
Information collection requirements contained in this (part,
subpart) have been approved by the Office of Management and Budget
(OMB) in accordance with the provisions of 44 U.S.C. chapter 35, and
have been assigned OMB control numbers 0560-0145.
Regulatory Flexibility Act
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), the Administrator of the Agricultural Marketing Service
(AMS) has determined that this action will not have a significant
economic impact on a substantial number of small entities. 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 disproportionally burdened. The Small Business Administration
(13 CFR 121.1) has defined small agricultural producers as those having
annual gross revenue for the last three years of less than $500,000,
and small agricultural service firms are defined as those whose gross
annual receipts are less than $5,000,000. Because there is a
preponderance of entities shipping fresh Irish potatoes that meet these
gross revenue limitations it is anticipated that the majority of the
program participants could be classified as small entities without
substantial regulatory restriction. Therefore the provisions of the RFA
are not applicable and no Regulatory Flexibility analysis is required.
Executive Order 12372
This program is not subject to the provisions of Executive Order
12372, which requires intergovernmental consultation with state and
local officials. See the Notice related to 7 CFR part 3015, subpart V.
Published at 4 FR 29115 (June 24, 1983).
Unfunded Mandates
The provisions of the Unfunded Mandates Reform Act of 1995 are not
applicable to this rule because AMS is not required by 5 U.S.C. 553 or
any other provision of the law to publish a notice of proposed
rulemaking with respect to the subject matter of this rule.
Interested parties are invited to submit comments with respect to
this action. However, pursuant to 5 U.S.C. 553, it is found and
determined that, upon good cause, it is impracticable, unnecessary and
contrary to the public interest to give notice prior to putting this
rule into effect, and that good cause exists for not postponing the
effective date of this action until 30 calendar days after publication
in the Federal Register because marketing is in process, the commodity
is perishable, and program effectiveness would be adversely affected by
undue delay. The crop is in the process of being sent to market and for
a diversion to occur the rule must be made effective immediately.
Written comments may be submitted within 30 calendar days of the
publishing of the rule in the Federal Register and will be considered
when the rule is made final.
Executive Order 12612
It has been determined that this rule does not have sufficient
federalism implications to warrant the preparation of a Federalism
Assessment. The provisions contained in this rule will not have a
substantial direct effect on States or their political subdivisions, or
on the distribution of power and responsibilities among the various
levels of government.
[[Page 29650]]
Background
Clause (2) of section 32 of the Act of August 24, 1935, as amended
(7 U.S.C. 612c) authorizes the Secretary of Agriculture to ``encourage
the domestic consumption of such [agricultural] commodities or products
by diverting them, by the payment of benefits or indemnities or by
other means, from the normal channels of trade and commerce * * *.''
Section 32 also authorizes the Secretary to use section 32 funds ``at
such times, in such manner, and in such amounts as the Secretary of
Agriculture finds will effectuate substantial accomplishment of any one
or more of the purposes of this section.'' Furthermore,
``determinations by the Secretary as to what constitutes diversion, and
what constitutes normal channels of trade and commerce, and what
constitutes normal production for domestic consumption shall be
final.''
According to crop storage reports, on May 1, 1997, fresh white
Irish potatoes and russet potatoes stored in 15 states were 32 percent
above the stocks on May 1, 1996. Storage reports for May 1, 1997,
indicate that the production of fresh Irish potatoes is up 65 percent
from the same period in 1996. Based on these statistics and other
market factors, the Secretary has determined that the fresh Irish
potato 1996 crops are in surplus supply and that the domestic
consumption of such potatoes will be encouraged by using section 32
funds to divert the fresh Irish potatoes from the normal channels of
trade and commerce under a Fresh Irish Potato Diversion Program. This
fresh Irish potato diversion program encompasses all types and
varieties of potatoes (except sweet potatoes) of U.S. Grade No. 2
(fairly clean) and U.S. Grade No. 2 Processing, including varieties
commonly used for processing, chipping and table stock. Due to a need
for expediency in implementing the Fresh Irish Potato Diversion Program
and concern about undue delay in conducting environmental analysis and
impact studies on composting, this program is limited to charitable
institutions and livestock feed.
The price established for fresh Irish potatoes destined for animal
feed will include all costs including transportation. The price
established for fresh Irish potatoes destined for use by charitable
institutions will cover all costs except transportation. USDA will
arrange and pay for the transportation costs between the grower and the
charitable institution because it is in a better position than the
grower to efficiently and effectively match the grower with the
charitable institutions already identified by USDA.
List of Subjects in 7 CFR Part 80
Administrative practice and procedures, Agriculture, Agricultural
commodities, Reporting and record keeping requirements.
For the reasons set forth in the preamble, 7 CFR part 80 is amended
as follows:
1. In Part 80, Subpart A is revised to read as follows:
PART 80--FRESH IRISH POTATO DIVERSION PROGRAM
Subpart A--Fresh Irish Potato--Diversion Program
Sec.
80.1 Applicability.
80.2 Administration.
80.3 Definitions.
80.4 Length of program.
80.5 Rate of payment.
80.6 Eligibility for payment.
80.7 Application and approval for participation.
80.8 Inspection and certificate of diversion.
80.9 Claim for payment.
80.10 Compliance with program provisions.
80.11 Inspection of premises.
80.12 Records and accounts.
80.13 Offset and assignment.
80.14 Appeals.
Authority: 7 U.S.C. 612c.
Subpart A--Fresh Irish Potato--Diversion Program
Sec. 80.1 Applicability.
In order to encourage the domestic consumption of the 1996 crop of
fresh Irish potatoes by diverting them from normal channels of trade
and commerce, the Secretary of Agriculture, pursuant to the authority
conferred by section 32 of the Act of August 24, 1935, as amended (7
U.S.C. 612c) (Section 32), will make payment to producers who divert
fresh Irish potatoes that they produced by donating them to charitable
institutions for human consumption or by using such fresh Irish
potatoes as livestock feed in accordance with the terms and conditions
set forth herein.
Sec. 80.2 Administration.
The program will be administered under the general direction and
supervision of the Director, Fruit and Vegetable Division, Agricultural
Marketing Service (AMS), United States Department of Agriculture
(USDA), and will be implemented by the Farm Service Agency (FSA). AMS,
FSA, or their authorized representatives do not have authority to
modify or waive any of the provisions of this subpart.
Sec. 80.3 Definitions.
Application means Form FSA-117.
Charitable institutions means those organizations which offer food,
housing, and other necessities to low income, homeless, or other
persons in need of assistance in obtaining basic sustenance.
Diversion means the delivery of potatoes to an eligible outlet.
Eligible outlet means charitable institutions or livestock feeding
operations.
Fresh Irish Potatoes means the 1996 crop of all types and varieties
of potatoes (except sweet potatoes) fit for human consumption and
produced and stored in the United States.
Invoice and certificate of inspection and diversion means Form FSA-
118.
Producer means an individual, partnership, association, or
corporation located in the United States who grows potatoes for market
and is in possession of such potatoes as of the date of May 29, 1997,
and whose Form FSA-117 has been approved by USDA.
Sec. 80.4 Length of program.
This program will be effective May 29, 1997, and will continue
until July 28, 1997. Producers diverting potatoes to charitable
institutions must file an application at the FSA office responsible for
the county in which the farm is located for FSA purposes within the
first ten Federal Government business days following the effective date
of this program. Producers diverting potatoes to livestock feed must
file an application at such office no later than July 28, 1997.
Sec. 80.5 Rate of payment.
(a) The rate of payment for potatoes for charitable institutions
will be $1.50 per hundredweight for fresh Irish potatoes. All eligible
fresh Irish potatoes intended for donation to charitable institutions
must: Meet U.S. Grade No. 2 (fairly clean) requirements as certified by
the AMS or the Federal-State Inspection Service; be in a quantity of
40,000 pounds net or a multiple of 40,000 pounds net; be in 50 pound
bags or cases and be palletized. Only transportation costs associated
with donations to charitable institutions may be arranged for and paid
by USDA. USDA will make no other payment with respect to such potatoes.
(b) Livestock feed payments will be $.75 per hundredweight for U.S.
Grade No. 2 Processing potatoes when whole as certified by AMS or the
Federal-State Inspection Service. Payment will not be made for any
fractional part of a hundredweight not meeting grade requirements. All
arrangements and costs for: U.S. grading and inspection;
[[Page 29651]]
processing, and transportation, as well as identifying the livestock
feed recipient will be included in the $.75 per hundredweight payment.
USDA will make no other payment with respect to such potatoes.
Sec. 80.6 Eligibility for payment.
(a) To the extent applications for payment do not exceed $9
million, payments will be made under this program to any producer of
fresh Irish potatoes who:
(1) Provides fresh Irish potatoes that are free from any water
damage and:
(i) If intended for human consumption, meet the requirements of 7
CFR 51.1540-51.3006 U.S. Grade No. 2 (fairly clean); or
(ii) If intended for livestock feed, meet the requirements of 7 CFR
51.3410-51.3418 U.S. Grade No. 2 Processing when whole, and are cut,
chopped sliced, gouged, crushed, ensiled, or cooked to the degree that
the potatoes are readily and obviously identifiable as having been
rendered unsuitable to enter into normal channels of trade and commerce
as determined by FSA or its representative;
(2) Executes and files Form FSA-117 with the FSA county office
responsible for the county where the producer's farm is located for FSA
program purposes;
(3) Receives approval for their application;
(4) Completes form FSA-118 and whose fresh Irish potatoes are
shipped in accordance with this regulation;
(5) Diverts fresh Irish potatoes after the date the Form FSA-117 is
approved by USDA before July 28, 1997.
(6) Files a claim as provided in Sec. 80.10; and
(7) Complies with all other terms and conditions in this subpart.
(b) In the event applications for participation in the program
authorized by this subpart exceed $9 million, USDA shall, at its sole
discretion, determine which applications to accept.
Sec. 80.7 Application and approval for participation.
(a) The applications will be reviewed by the FSA in the order shown
on the FSA register located at the respective FSA county office and
will be approved taking into account the availability of funds, for
each method of diversion;
(b) An approved Form FSA-117 may be modified or amended with the
consent of the applicant and the duly authorized representative of AMS
or FSA provided that such modification or amendment does not conflict
with the provisions of this subpart; and
(c) Copies of the applicable U.S. grade standards and the
application for participation in the Fresh Irish Potato Diversion
Program can be obtained from the local county FSA office.
Sec. 80.8 Inspection and certificate of diversion.
Prior to diversion of potatoes to a charitable institution, the
fresh Irish potatoes must be inspected by an inspector authorized or
licensed by the USDA to inspect and certify the class, quality, and
condition of fresh Irish potatoes. The producer will be responsible for
requesting and arranging for inspection. For charitable institutions
the product must be Positive Lot Identification (PLI) or certified by
USDA grading personnel at time of loading. With respect to potatoes
diverted for livestock feed, the producer must furnish to FSA such
scale tickets, weighing facilities, or volume measurements as
determined by the inspector to be necessary for ascertaining the net
weight of the potatoes being diverted.
Sec. 80.9 Claim for payment.
(a) In order to obtain payment for shipments to charitable
institutions, the producer must submit to the county FSA office which
approved the application: a properly executed Form FSA-118; a copy of
the Notice to Deliver sent from FSA, Kansas City Commodity Office,
Kansas City, Missouri; a bill of lading showing shipment was made. All
such claims must be filed no later than 30 days after the termination
date specified in the applicable approved application. For those
potatoes which fail to meet the definition of fresh Irish potatoes
provided in Sec. 80.3 or the eligibility requirements of Sec. 80.6, the
producer may request an appeal inspection; however, payment of the
truck detention and storage charges will be the responsibility of the
producer.
(b) Livestock feed payments will be based on the percentage of the
offered fresh Irish potatoes meeting U.S. Grade No. 2 Processing. In
order to obtain payment the producer must submit to the county FSA
office which approved the application a properly executed FSA-118, and
a livestock feed recipient delivery receipt indicating hundredweight
received, the date and name, address, and telephone number of the
recipient.
Sec. 80.10 Compliance with program provisions.
If USDA determines that any provisions of the application or of
these regulations has not been complied with, whether by the producer,
charitable institution, or livestock feeder, or that any quantity of
fresh Irish potatoes diverted under this program was not used
exclusively for donation to charitable institutions or livestock
feeders (whether such failure was caused directly by the producer or by
any other person or persons), the producer will not be entitled to
diversion payments in connection with such fresh Irish potatoes, must
refund any USDA payment made in connection with such fresh Irish
potatoes, and will also be liable to USDA for any other damages
incurred as a result of such failure to use the fresh Irish potatoes
exclusively for donation to charitable institutions or for use as
livestock feed. The USDA may deny any producer the right to participate
in this program or the right to receive payments in connection with any
diversion previously made under this program, or both, if USDA
determines that:
(a) The producer has failed to use or caused to be used any
quantity of fresh Irish potatoes diverted under this program
exclusively for donation to charitable institutions or livestock feed,
whether such failure was caused directly by the producer or by any
other person or persons;
(b) The producer has not acted in good faith in connection with any
transaction under this program; or
(c) The producer has failed to discharge fully any obligation
assumed by him under this program.
Sec. 80.11 Inspection of premises.
The producer, charitable institution, or livestock feeder must
permit authorized representatives of USDA, at any reasonable time, to
have access to their premises to inspect and examine such fresh Irish
potatoes as are being diverted or stored for diversion, and to inspect
and examine the facilities for diverting fresh Irish potatoes to
determine compliance with the provisions of this program.
Sec. 80.12 Records and accounts.
The producer, charitable institution, or livestock feeder
participating in this program must keep accurate records and accounts
showing the details relative to the diversion and livestock feeding of
the fresh Irish potatoes. The producer, charitable institution, or
livestock feeder must permit authorized representatives of USDA and the
General Accounting Office at any reasonable time to inspect, examine,
and make copies of such records and accounts to determine compliance
with provisions of this program; such records and accounts must be
retained for three years after the date of last payment to the producer
under the program, or for two years after
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date of audit of records by USDA as provided herein, whichever is the
later.
Sec. 80.13 Offset and assignment.
(a) Except as provided in paragraph (b) of this section, below, any
payment or portion thereof due any person shall be allowed without
regard to questions of title under state law, and without regard to any
claim or lien against the crop or proceeds thereof in favor of the
owner or any other creditor, except for statutory liens belonging to
agencies of the U.S. Government. The regulations governing offsets and
withholdings found at 7 CFR part 3 shall be applicable to such
payments.
(b) Assignments. Assignments will be done in accordance with Form
FSA-117.
Sec. 80.14 Appeals.
Appeals under this part will be in accordance with 7 CFR part 780.
Dated: May 28, 1997.
Lon Hatamiya,
Administrator.
[FR Doc. 97-14273 Filed 5-29-97; 8:45 am]
BILLING CODE 3410-02-P
