[Federal Register Volume 64, Number 122 (Friday, June 25, 1999)]
[Rules and Regulations]
[Pages 34113-34117]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-16056]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 947
[Docket No. FV99-947-1 IFR]
Irish Potatoes Grown in Modoc and Siskiyou Counties, California,
and in all Counties in Oregon, Except Malheur County; Temporary
Suspension of Handling Regulations and Establishment of Reporting
Requirements
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim final rule with request for comments.
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SUMMARY: This rule suspends, for the 1999-2000 season only, the minimum
grade, size, quality, maturity, pack, inspection, and other related
requirements currently prescribed under the Oregon-California potato
marketing order. The marketing order regulates the handling of Irish
potatoes grown in Modoc and Siskiyou Counties, California, and in all
Counties in
[[Page 34114]]
Oregon, except Malheur County, and is administered locally by the
Oregon-California Potato Committee (Committee). During this suspension
of the handling regulations, reports from handlers will be required to
obtain information necessary to administer the marketing order. This
rule is expected to reduce industry expenses.
DATES: Effective July 1, 1999, through June 30, 2000; comments received
by August 24, 1999 will be considered prior to issuance of a final
rule.
ADDRESSES: Interested persons are invited to submit written comments
concerning this rule. Comments must be sent to the Docket Clerk, Fruit
and Vegetable Programs, AMS, USDA, Room 2525-S, P.O. Box 96456,
Washington, DC 20090-6456; Fax: (202) 720-5698; or E-mail:
moab.docketclerk@usda.gov. All comments should reference the docket
number and the date and page number of this issue of the Federal
Register and will be made available for public inspection in the Office
of the Docket Clerk during regular business hours.
FOR FURTHER INFORMATION CONTACT: Teresa L. Hutchinson, Northwest
Marketing Field Office, Marketing Order Administration Branch, Fruit
and Vegetable Programs, AMS, USDA, 1220 SW Third Avenue, Room 369,
Portland, Oregon 97204-2807; telephone: (503) 326-2724, Fax: (503) 326-
7440 or George Kelhart, Technical Advisor, Marketing Order
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, Room
2525-S, P.O. Box 96456, Washington, DC 20090-6456; telephone: (202)
720-2491, Fax: (202) 720-5698. Small businesses may request information
on complying with this regulation, or obtain a guide on complying with
fruit, vegetable, and specialty crop marketing agreements and orders by
contacting Jay Guerber, Marketing Order Administration Branch, Fruit
and Vegetable Programs, AMS, USDA, P.O. Box 96456, Room 2525-S,
Washington, DC 20090-6456; telephone (202) 720-2491, Fax: (202) 720-
5698, or E-mail: Jay.Guerber@usda.gov. You may view the marketing
agreement and order small business compliance guide at the following
web site: http://www.ams.usda.gov/fv/moab.html.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing
Agreement No. 114 and Marketing Order No. 947, both as amended (7 CFR
part 947), regulating the handling of Irish potatoes grown in Modoc and
Siskiyou Counties in California, and in all counties in Oregon, except
Malheur County, hereinafter referred to as the ``order.'' The marketing
agreement and order are 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 (Department) 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.
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 608c(15)(A) of the
Act, any handler subject to an order may file with the Secretary 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 the Secretary 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 the Secretary's
ruling on the petition, provided an action is filed not later than 20
days after date of the entry of the ruling.
This rule suspends the handling and related regulations currently
prescribed under the order from July 1, 1999, to June 30, 2000. This
rule allows the Oregon-California potato industry to market potatoes
without minimum grade, size, quality, maturity, pack, and inspection
requirements. These regulations will resume July 1, 2000, for the 2000-
2001 season and future seasons. This rule also establishes handler
reporting requirements during the same time period. Reporting
requirements will allow the Committee to obtain information from
handlers necessary to administer the order.
Section 947.52 of the order authorizes the issuance of regulations
for grade, size, quality, maturity, and pack for any variety of
potatoes grown in the production area during any period. Section 947.51
authorizes the modification, suspension, or termination of regulations
issued under Sec. 947.52.
Section 947.60 provides that whenever potatoes are regulated
pursuant to Sec. 947.52, such potatoes must be inspected by the
Federal-State Inspection Service, and certified as meeting the
applicable requirements of such regulations. The cost of inspection and
certification is borne by handlers.
Section 947.80 authorizes the Committee, with the approval of the
Secretary, to require reports and other information from handlers that
are necessary for the Committee to perform its duties.
Minimum grade, size, quality, maturity, and pack requirements for
potatoes regulated under the order are specified in Sec. 947.340
Handling Regulation [7 CFR 947.340]. This regulation, with
modifications and exemptions for different varieties and types of
shipments, provides that all potatoes grade at least U.S. No. 2; be at
least 2 inches in diameter or weigh at least 4 ounces; and be not more
than moderately skinned. Additionally, potatoes packed in cartons must
be U.S. No. 1 grade or better, with an additional tolerance allowed for
internal defects, or U.S. No. 2 grade weighing at least 10 ounces.
Section 947.340 also includes waivers of inspection procedures,
reporting and safeguard requirements for special purpose shipments, and
a minimum quantity exemption of 19 hundredweight per day. Related
provisions appear in the regulations at Sec. 947.130, Special Purpose
Certificates--application and issuance; Sec. 947.132 Reports;
Sec. 947.133 Denial and appeals; and Sec. 847.134 Establishment of list
of manufacturers of potato products.
The Committee meets prior to and during each season to consider
recommendations for modification, suspension, or termination of the
regulatory requirements for Oregon-California potatoes which have been
issued on a continuing basis. Committee meetings are open to the public
and interested persons may express their views at these meetings. The
Department reviews Committee recommendations and information submitted
by the Committee and other available information, and determines
whether modification, suspension, or termination of the regulatory
requirements would tend to effectuate the declared policy of the Act.
At its February 23, 1999, meeting, the Committee unanimously
recommended suspending the handling regulations and related sections
and establishing handler reporting requirements for the 1999-2000
season. The Committee met again on May 14, 1999, to review the
recommendation made at the earlier meeting. After extensive discussion,
the Committee decided not to rescind or modify their earlier
recommendation to suspend handling regulations and related sections.
The Committee requested that this rule be effective at
[[Page 34115]]
the beginning of the next fiscal period, July 1, 1999, which is also
the date shipments of the 1999 Oregon-California potato crop are
expected to begin.
The objective of the handling and inspection requirements is to
ensure that only acceptable quality potatoes enter fresh market
channels, thereby ensuring consumer satisfaction, increasing sales, and
improving returns to producers. While the industry continues to believe
that quality is an important factor in maintaining sales, the Committee
believes the cost of inspection and certification (mandated when
minimum requirements are in effect) may exceed the benefits derived.
Potato prices have been at low levels in recent seasons, and many
producers have faced difficulty covering their production costs.
Therefore, the Committee has been discussing the possibility of
reducing costs through the elimination of mandatory inspection. The
Committee is concerned, however, that the elimination of current
requirements could possibly result in lower quality potatoes being
shipped to fresh markets. Also, there is some concern that the Oregon-
California potato industry could lose sales to other potato producing
areas that are covered by quality and inspection requirements. For
these reasons, the Committee recommended that the suspension of the
requirements be effective for the 1999-2000 season only. This will
enable the Committee to study the impacts of the suspension and
consider appropriate actions for ensuing seasons.
This rule will enable handlers to ship potatoes without regard to
the minimum grade, size, quality, maturity, pack, and inspection
requirements for the 1999-2000 season only. This rule will allow
handlers to decrease costs by eliminating the costs associated with
inspection. This rule will not restrict handlers from seeking
inspection on a voluntary basis. The Committee will evaluate the
effects of removing the minimum requirements on marketing and on
producer returns at its meeting next spring.
The suspension action also will result in the elimination of the
monthly inspection report from the Federal-State Inspection Service
which the Committee used as a basis for the collection of assessments
from handlers. This inspection report was compiled by the Federal-State
Inspection Service from inspection certificates. During the suspension
of the regulations, reports from handlers will be needed for the
Committee to obtain information on which to collect assessments.
Therefore, a new Sec. 947.180 Reports is established which requires
each handler to submit a monthly assessment report to the Committee
containing the following information: (a) The date and quantity of
fresh potatoes sold including identification numbers; (b) the name and
address of the producers; (c) the assessment payment due; and (d) the
name and address of the handler. Authorization to assess handlers
enables the Committee to incur expenses that are reasonable and
necessary to administer the program. Although adding reporting
requirements, this rule through the elimination of inspection and
certification and other related requirements is expected to reduce
industry expenses.
Consistent with the suspension of Sec. 947.340, this rule also
suspends Secs. 947.120, 947.123, 947.130, 947.132, 947.133, and 947.134
of the rules and regulations in effect under the order. Sections
947.120 and 947.123 provide authority for hardship exemptions from
inspection and certification, and establish reporting and recordkeeping
requirements when such exemptions are in place. Sections 947.130,
947.132, 947.133, and 947.134 are safeguard and reporting provisions of
the order that are applicable to special purpose shipments when
inspection and certification requirements are in place.
Contained within Sec. 947.340(i) of the current handling
regulations is a minimum quantity exemption under which a handler may
ship not more than 19 hundredweight of potatoes on any day without
regard to the inspection and assessment requirements issued under the
order. The suspension of the handling regulations removes all
inspection requirements. To continue the current minimum quantity
exemption for assessments, a new Sec. 947.125 Minimum quantity
exemption is established. This section simply continues the current
minimum quantity exemption under which a handler may ship not more than
19 hundredweight of potatoes on any day without regard to the
assessment requirements issued under the order.
Pursuant to 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 initial regulatory flexibility analysis.
The purpose of the RFA is to fit regulatory actions to the scale of
business subject to such actions in order that small businesses will
not be unduly or disproportionately burdened. Marketing orders issued
pursuant to the Act, and the rules issued thereunder, are unique in
that they are brought about through group action of essentially small
entities acting on their own behalf. Thus, both statutes have small
entity orientation and compatibility.
There are approximately 30 handlers of Oregon-California potatoes
who are subject to regulation under the marketing order and
approximately 450 potato producers in the regulated area. Small
agricultural service firms have been defined by the Small Business
Administration (13 CFR 121.601) as those having annual receipts of less
than $5,000,000, and small agricultural producers are defined as those
having annual receipts of less than $500,000.
Currently, about 83 percent of the Oregon-California potato
handlers ship less that $5,000,000 worth of potatoes and 17 percent
ship more than $5,000,000 worth on an annual basis. In addition, based
on acreage, production, and producer prices reported by the National
Agricultural Statistics Service, and the total number of Oregon-
California potato producers, average annual producer receipts are
approximately $285,000. In view of the foregoing, it can be concluded
that the majority of handlers and producers of Oregon-California
potatoes may be classified as small entities.
This rule suspends the handling and related regulations and
establishes reporting requirements from July 1, 1999, through June 30,
2000. This rule will allow the Oregon-California potato industry to
market potatoes without minimum grade, size, quality, maturity, pack,
and inspection requirements. The handling regulations currently
specified in Sec. 947.340 and in other related sections will resume
July 1, 2000, for the 2000-2001 season and future seasons. New
reporting requirements will allow the Committee to obtain information
from handlers necessary to collect assessments during the period of
suspension.
At its February 23, 1999, meeting, the Committee unanimously
recommended suspending the handling and related regulations and
establishing reporting requirements for the 1999-2000 season. The
Committee met again on May 14, 1999, to review the recommendation made
at the earlier meeting. After extensive discussion, the Committee
decided not to rescind or modify their earlier recommendation to
suspend the regulations. The Committee requested that this rule be
effective at the beginning of the next fiscal period, July 1, 1999,
which is also the date shipments of the 1999 Oregon-California potato
crop are expected to begin.
The objective of the handling requirements is to ensure that only
acceptable quality potatoes enter fresh market channels, thereby
ensuring
[[Page 34116]]
consumer satisfaction, increasing sales, and improving returns to
producers. While the industry continues to believe that quality is an
important factor in maintaining sales, the Committee believes the cost
of inspection and certification (mandated when minimum requirements are
in effect) may exceed the benefits derived.
Potato prices have been at low levels in recent seasons, and many
producers have faced difficulty covering their production costs.
Therefore, the Committee has been discussing the possibility of
reducing costs through the elimination of mandatory inspection. The
Committee is concerned, however, that the elimination of current
requirements could possibly result in lower quality potatoes being
shipped to fresh markets. Also, there is some concern that the Oregon-
California potato industry could lose sales to other potato producing
areas that are covered by quality and inspection requirements. For
these reasons, the Committee recommended that the suspension of the
requirements be effective for the 1999-2000 season only. This will
enable the Committee to study the impacts of the suspension and
consider appropriate actions for ensuing seasons.
This rule will enable handlers to ship potatoes without regard to
the minimum grade, size, quality, maturity, pack, inspection, and
related requirements for the 1999-2000 season only. This rule will
allow handlers to decrease costs by eliminating the costs associated
with inspection. This rule will not restrict handlers from seeking
inspection on a voluntary basis. The Committee will evaluate the
effects of removing the minimum requirements on marketing and on
producer returns at its meeting next spring.
The suspension action also will result in the elimination of the
monthly inspection report from the Federal-State Inspection Service
which the Committee used for billing purposes. This inspection report
was compiled by the Federal-State Inspection Service from inspection
certificates. During this suspension of the regulations, reports from
handlers will be necessary for the Committee to obtain information on
which to collect assessments. This rule establishes a new Sec. 947.180
Reports which requires each handler to submit a monthly assessment
report to the Committee containing the following information: (a) The
date and quantity of fresh potatoes sold including identification
numbers; (b) the name and address of the producers; (c) the assessment
payment due; and (d) the name and address of the handler. Authorization
to assess handlers enables the Committee to incur expenses that are
reasonable and necessary to administer the program. Although adding
reporting requirements, this rule through the elimination of inspection
and certification and other related requirements is expected to reduce
industry expenses.
Contained within Sec. 947.340(i) of the current handling
regulations is a minimum quantity exemption under which a handler may
ship not more than 19 hundredweight of potatoes on any day without
regard to the inspection and assessment requirements issued under the
order. The suspension of the handling regulations removes all
inspection requirements. To continue the current minimum quantity
exemption for assessments, a new Sec. 947.125 Minimum quantity
exemption is established. This section simply continues the current
minimum quantity exemption under which a handler may ship not more than
19 hundredweight of potatoes on any day without regard to the
assessment requirements issued under the order.
The Committee anticipates that this rule will not negatively impact
small businesses. This rule will suspend minimum grade, size, quality,
maturity, pack, and inspection requirements. Further, this rule will
allow handlers and producers the choice to obtain inspection for
potatoes, as needed, thereby reducing costs for producers and handlers.
The total cost of inspection and certification for fresh shipments of
Oregon-California potatoes during the 1998-99 marketing season is
estimated at $600,000. This is approximately $20,000 per handler. The
Committee expects, however, that most handlers will continue to have
some of their potatoes inspected and certified by the Federal-State
Inspection Service.
The Committee investigated the use of other types of inspection
programs as another option to reduce the cost of inspection, but
believed they were not viable at this time. With the suspension of
handling regulations, there are no alternatives to reporting
requirements to ensure the collection of assessments needed to
administer the order.
This rule will require monthly reports from handlers to obtain
information necessary to collect assessments. Although this rule
establishes new reporting requirements, the suspension of the handling
regulations eliminates the more frequent reporting requirements that
were included under the safeguard provisions of the order.
Therefore, any additional reporting or recordkeeping requirements
on either small or large potato handlers are expected to be offset by
the elimination of reporting requirements currently in effect. In
addition, the elimination of inspection and certification requirements
is expected to further reduce industry expenses. Finally, as with all
Federal marketing order programs, reports and forms are periodically
reviewed to reduce information requirements and duplication by industry
and public sectors.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35), the information collection requirements that are contained
in this rule have been approved by the Office of Management and Budget
(OMB) and have been assigned OMB No. 0581-0178. It is estimated that it
will take a handler 20 minutes to complete a monthly assessment report,
and that each handler will fill out 12 monthly assessment reports each
year. This creates an estimated total industry burden of approximately
120 hours. It is estimated that it currently takes a handler 5 minutes
to complete a safeguard reporting form. With an estimated 2,000
safeguard reports completed each year, the estimated decrease in burden
because of the suspension of safeguard reporting requirements is
estimated to be 167 hours. Five other miscellaneous forms are also
being suspended. With an estimated 31 responses each year, the
estimated decrease in burden because of the suspension of these forms
is estimated to be 6.5 hours.
The Department has not identified any relevant Federal rules that
duplicate, overlap or conflict with this rule. Further, the Committee's
meetings were widely publicized throughout the Oregon-California potato
industry and all interested persons were invited to attend the meetings
and participate in Committee deliberations. Like all Committee
meetings, the February 23, 1999, and May 14, 1999, meetings were public
meetings and all entities, both large and small, were able to express
their views on this issue. The Committee itself is composed of 14
members, of which 5 are handlers and 9 are producers. Finally,
interested persons are invited to submit information on the regulatory
and informational impacts of this action on small businesses.
After consideration of all relevant material presented, including
the Committee's recommendation, and other information, it is found that
(1) The regulations suspended by this action for a specified period no
longer tend to effectuate the declared policy of the Act and (2) the
addition of new regulations, as hereinafter set forth, will
[[Page 34117]]
tend to effectuate the declared policy of the Act.
This rule invites comments on suspension of the handling
regulations and establishment of reporting requirements under the
Oregon-California potato marketing order. Any comments received will be
considered prior to finalization of this rule.
Pursuant to 5 U.S.C. 553, it is also found and determined upon good
cause that it is impracticable, unnecessary, and contrary to the public
interest to give preliminary notice prior to putting this rule into
effect and that good cause exists for not postponing the effective date
of this rule until 30 days after publication in the Federal Register
because: (1) This rule suspends the current handling and related
regulations and establishes reporting requirements for Oregon-
California potatoes for the 1999-2000 marketing year which begins July
1, 1999; (2) this rule was unanimously recommended by the Committee at
open public meetings and all interested persons had an opportunity to
express their views and provide input; (3) Oregon-California potato
handlers are aware of this rule and need no additional time to comply
with the relaxed requirements; (4) this rule should be in effect by
July 1, 1999, the date 1999-2000 season shipments of the Oregon-
California potato crop are expected to begin, and this action should
apply to the entire season's shipments; and (5) this rule provides a
60-day comment period, and any comments received will be considered
prior to finalization of this rule.
List of Subjects in 7 CFR Part 947
Marketing agreements, Potatoes, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, 7 CFR Part 947 is
amended as follows:
PART 947--IRISH POTATOES GROWN IN MODOC AND SISKIYOU COUNTIES,
CALIFORNIA, AND IN ALL COUNTIES IN OREGON, EXCEPT MALHEUR COUNTY
1. The authority citation for 7 CFR Part 947 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. In Part 947, Secs. 947.120, 947.123, 947.130, 947.132, 947.133,
947.134 and 947.340 are suspended in their entirety effective July 1,
1999, through June 30, 2000.
3. In Subpart--Rules and Regulations, under the undesignated center
heading ``Exemptions'', a new Sec. 947.125 is added, and a new
undesignated center heading and Sec. 194.180 are added to read as
follows:
Sec. 947.125 Minimum quantity exemption.
From July 1, 1999, through June 30, 2000, any person may handle not
more than 19 hundredweight of potatoes on any day without regard to the
assessment requirements of Sec. 947.41 of this part. This exemption
shall not apply to any part of a shipment which exceeds 19
hundredweight.
Reports
Sec. 947.180 Reports.
From July 1, 1999, through June 30, 2000, each person handling
potatoes shall submit a Monthly Assessment Report to the Committee
containing the following information:
(a) The date and quantity of fresh potatoes sold including
identification numbers;
(b) the name and address of the producers;
(c) the assessment payment due; and
(d) the name and address of such handler.
Dated: June 18, 1999.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 99-16056 Filed 6-24-99; 8:45 am]
BILLING CODE 3410-02-P
