Irish Potatoes Grown in Washington; Relaxation of Handling and Import Regulations, 52573-52576 [E8-20999]
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52573
Rules and Regulations
Federal Register
Vol. 73, No. 176
Wednesday, September 10, 2008
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 under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents. Prices of
new books are listed in the first FEDERAL
REGISTER issue of each week.
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 946
[Docket No. AMS–FV–08–0036; FV08–946–
1 IFR]
Irish Potatoes Grown in Washington;
Relaxation of Handling and Import
Regulations
Agricultural Marketing Service,
USDA.
ACTION: Interim final rule with request
for comments.
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AGENCY:
SUMMARY: This rule relaxes the size
requirement prescribed under the
Washington potato marketing order. The
marketing order regulates the handling
of Irish potatoes grown in Washington,
and is administered locally by the State
of Washington Potato Committee
(Committee). This rule decreases the
minimum size required for all fresh
market red, yellow fleshed, and white
types of potatoes from 1 inch (25.4 mm)
to 3⁄4 inch (19.1 mm) in diameter, if the
potatoes otherwise meet the
requirements of U.S. No. 1 grade. This
rule will also decrease the minimum
size requirement from July 1 through
September 30 of each year for imported
red-skinned, round type potatoes under
the import regulations as required by
section 8e of the Agricultural Marketing
Agreement Act of 1937. The Committee
recommended this change in response
to the recently revised U.S. Standards
for Grades of Potatoes which added a
definition for Creamer potatoes. This
change is intended to provide potato
handlers with greater marketing
flexibility, growers with increased
returns, consumers with a greater
supply of small potatoes, and to bring
the section 8e potato import regulation
into conformity with the marketing
order.
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Effective September 11, 2008;
comments received by November 10,
2008 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, Marketing
Order Administration Branch, Fruit and
Vegetable Programs, AMS, USDA, 1400
Independence Avenue, SW., STOP
0237, Washington, DC 20250–0237; Fax:
(202) 720–8938; or Internet: https://
www.regulations.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, or can be viewed
at: https://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT:
Teresa Hutchinson or Gary Olson,
Northwest Marketing Field Office,
Marketing Order Administration
Branch, Fruit and Vegetable Programs,
AMS, USDA, Telephone: (503) 326–
2724, Fax: (503) 326–7440, or E-mail:
Teresa.Hutchinson@usda.gov or
GaryD.Olson@usda.gov.
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: (202) 720–
2491, Fax: (202) 720–8938, or E-mail:
Jay.Guerber@usda.gov.
SUPPLEMENTARY INFORMATION: This rule
is issued under Marketing Order No.
946, as amended (7 CFR part 946),
regulating the handling of Irish potatoes
grown in Washington, hereinafter
referred to as the ‘‘order.’’ The order is
effective under the Agricultural
Marketing Agreement Act of 1937, as
amended (7 U.S.C. 601–674), hereinafter
referred to as the ‘‘Act.’’
This interim final rule is also issued
under section 8e of the Act, which
provides that whenever certain
specified commodities, including
potatoes, are regulated under a Federal
marketing order, imports of these
commodities into the United States are
prohibited unless they meet the same or
comparable grade, size, quality, or
maturity requirements as those in effect
for the domestically produced
commodities. Section 8e also provides
DATES:
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that whenever two or more marketing
orders regulating the same commodity
produced in different areas of the
United States are concurrently in effect,
a determination must be made as to
which of the areas produces the
commodity in most direct competition
with the imported commodity. Imports
must meet the same or comparable
requirements established for that
particular area. The requirements for
red-skinned, round type potatoes
imported from July 1 through September
30 are based on the Washington potato
marketing order requirements.
The Department of Agriculture
(USDA) is issuing this rule in
conformance with Executive Order
12866.
This rule has been reviewed under
Executive Order 12988, Civil Justice
Reform. This rule is not intended to
have retroactive effect. 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 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.
This rule decreases the size required
for all fresh market red, yellow fleshed,
and white types of potatoes produced in
Washington State from 1 inch (25.4 mm)
to 3⁄4 inch (19.1 mm) minimum, if the
potatoes otherwise meet the
requirements of U.S. No. 1 grade. This
change is intended to provide potato
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handlers with greater marketing
flexibility, growers with increased
returns, and consumers with a greater
supply of small potatoes. As provided
under section 8e of the Act, the size
modification will also apply to all redskinned, round type potatoes imported
from July 1 through September 30. This
rule will not affect the current import
requirements for all other round type or
long type potatoes.
Section 946.52 of the order authorizes
the establishment of grade, size, quality,
or maturity regulations for any variety
or varieties of potatoes grown in the
production area. Section 946.52 also
authorizes the regulation of the size,
capacity, weight, dimensions, pack, and
marking or labeling of the container, or
containers, which may be used in the
packing or handling of potatoes, or both.
Section 946.51 further authorizes the
modification, suspension, or
termination of regulations issued under
§ 946.52. Section 946.60 provides that
whenever potatoes are regulated
pursuant to § 946.52 such potatoes must
be inspected by the Federal or FederalState Inspection Service, and certified as
meeting the applicable requirements of
such regulations.
Section 946.336 of the order’s
administrative rules and regulations
prescribes the quality, size, maturity,
cleanness, pack, and inspection
requirements for fresh market
Washington potatoes. Section
946.336(a)(2) prescribes the size
requirements. Relevant import
regulations are contained in § 980.1 and
§ 980.501 of the vegetable import
regulations.
During a video conference meeting
held on April 16, 2008, with a followup mail vote, the Committee
unanimously recommended changing
the minimum size requirement for all
U.S. No. 1 grade fresh market red,
yellow fleshed, and white types of
potatoes produced under the order from
1 inch to 3⁄4 inch in diameter.
The Committee recommended this
change in response to the recently
revised U.S. Standards for Grades of
Potatoes (Standards) which became
effective on April 21, 2008 (73 FR
15051, March 21, 2008). The revised
Standards added a definition for
Creamer potatoes. The revised
Standards define the Creamer size
designation as 3⁄4 inch minimum
diameter and 15⁄8 inch maximum
diameter with no minimum or
maximum weight.
Before the Standards were revised to
include a Creamer size designation,
various states developed their own
standards for Creamer potatoes in an
attempt to meet the increasing consumer
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demand for small potatoes. The
Washington potato industry had
previously considered Creamer potatoes
to have a 1 inch minimum diameter.
The Committee recommended reducing
the minimum diameter to 3⁄4 inch so
that the handling regulation would
correspond with the revised Standards
and to ensure that the industry was
being responsive to the desires of
consumers. The Committee also believes
that inconsistency between what was
marketed in Washington as Creamer
potatoes and the Standards would have
caused confusion in the marketplace.
Within the past several years,
consumer demand has increased for
small potatoes which often command
premium prices. Decreasing the
minimum size requirement from 1 inch
to 3⁄4 inch will help handlers in
Washington meet the needs of their
customers.
Committee statistics show that
approximately 25 percent (2,483,219
hundredweight) of fresh market
Washington potatoes (9,932,874
hundredweight) are red, yellow fleshed
and white types of potatoes. The
decrease in the size requirement is
expected to increase the volume of red,
yellow fleshed, and white types of
potatoes that meet minimum size
requirements. Shipping a larger portion
of the crop to market would help meet
consumer demand and is expected to
increase returns to growers.
As mentioned earlier, section 8e of
the Act provides that when certain
domestically produced commodities,
including potatoes, are regulated under
a Federal marketing order, imports of
that commodity must meet the same or
comparable grade, size, quality, and
maturity requirements. Section 8e also
provides that whenever two or more
marketing orders regulating the same
commodity produced in different areas
of the United States are concurrently in
effect, a determination must be made as
to which of the areas produces the
commodity in most direct competition
with the imported commodity. Imports
must meet the requirements established
for that particular area.
Grade, size, quality, and maturity
regulations have been issued regularly
under marketing orders No. 945 (IdahoEastern Oregon potatoes), No. 948
(Colorado potatoes, Area No. 2 and Area
No. 3), No. 946 (Washington potatoes),
and No. 953 (Southeastern potatoes)
since the marketing orders were
established. Section 980.1 of the
vegetable import regulations specifies
that import requirements for potatoes
are to be based on the seasonal
categories of potatoes produced in all
marketing order areas. In that regard,
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imported red-skinned, round type
potatoes must meet the requirements of
the Washington potato marketing order
during the months of July through
September and the Area No. 2 Colorado
potato marketing order during the
months of October through the
following June. This rule will not affect
the current import requirements for all
other round type or long type potatoes.
Initial Regulatory Flexibility Analysis
Pursuant to requirements set forth in
the Regulatory Flexibility Act (RFA) (5
U.S.C. 601–612), the Agricultural
Marketing Service (AMS) has
considered the economic impact of this
action on small entities. Accordingly,
AMS has prepared this 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 rules issued thereunder, are
unique in that they are brought about
through group action of essentially
small entities acting on their own
behalf.
Import regulations issued under the
Act are based on regulations established
under Federal marketing orders which
regulate the handling of domestically
produced products.
Currently, there are approximately 45
handlers of Washington potatoes who
are subject to regulation under the
marketing order and approximately 267
potato producers in the regulated area.
Small agricultural service firms are
defined by the Small Business
Administration (SBA) (13 CFR 121.201)
as those having annual receipts of less
than $6,500,000, and small agricultural
producers are defined as those having
annual receipts of less than $750,000.
During the 2006–2007 marketing year,
9,932,874 hundredweight of
Washington potatoes were inspected
under the order and sold into the fresh
market by 43 handlers, according to
Committee data. The Committee reports
that an industry consensus estimate of
an average fresh potato f.o.b. price is
$8.45 per hundredweight. Multiplying
the 2006–2007 fresh shipments of
9,932,874 hundredweight by the average
f.o.b. price of $8.45 yields a handlerlevel fresh market crop value of $83.933
million. Dividing $83.933 million by 43
handlers gives an average annual sales
value per handler estimate of about
$1.952 million. The Committee
estimates that 41, or about 95 percent of
these 43 handlers, had annual receipts
of less than $6,500,000.
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A comparable computation can be
made to estimate annual average
revenue per producer. Based on
information provided by the National
Agricultural Statistics Service, the 2006
season average producer price for
Washington potatoes was $6.25 per
hundredweight. Multiplying the 2006–
2007 fresh shipments of 9,932,874
hundredweight by the average producer
price of $6.25 provides a producer-level
fresh market crop value of $62.08
million. Dividing $62.08 million by 267
Washington potato producers yields an
average annual fresh market sales value
per producer of approximately
$232,500.
In view of the foregoing, it can be
concluded that the majority of the
Washington potato producers and
handlers may be classified as small
entities. Although it is not known how
many importers of potatoes may be
classified as small entities, we believe
that many of the importers of potatoes
can be classified as such.
This rule decreases the minimum size
required for all fresh market red, yellow
fleshed, and white types of potatoes
produced under the order from 1 inch
to 3⁄4 inch in diameter, if they otherwise
meet the requirements of U.S. No. 1
grade. This change enables handlers
with the ability to respond to the
consumer demand for small potatoes.
As provided under section 8e of the Act,
this change will also apply to all
imported red-skinned, round type
potatoes between July 1 through
September 30 of each year. While no
change will be required in the language
of § 980.1, all imported red-skinned,
round type potatoes from July 1 through
September 30 will be required to meet
the minimum size requirement of 3⁄4
inch in diameter.
The authority for the grade and size
requirements is provided in § 946.52 of
the order. Section 946.336(a)(2) of the
order’s administrative rules and
regulations prescribes the size
requirement. Relevant import
regulations are contained in § 980.1 and
§ 980.501 of the vegetable import
regulations.
Regarding the impact of this rule on
affected entities, decreasing the size
requirement for these potatoes is
expected to benefit handlers, importers
and growers. There should be no extra
cost to producers or handlers because
current harvesting and handling
methods can accommodate the sorting
of these smaller potatoes. By decreasing
the minimum size requirement for these
potatoes, a greater quantity of potatoes
will meet the order’s handling
regulations and the import regulations.
This could translate into an increased
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market for small potatoes and greater
returns for handlers, importers, and
growers.
As small potatoes have grown in
popularity with consumers, the market
demand has outpaced the quantity of
small, high quality potatoes available
from Washington. The Committee
believes that a decrease in the size
requirement will increase the available
supply of small potatoes. The small
potato market is a minor segment of the
Washington potato market. As such, the
Committee believes that these small
potatoes do not compete directly with
most of the fresh market potatoes and
that this action will not adversely affect
the overall Washington potato market.
By providing Washington handlers
the flexibility to pack the smaller red,
yellow fleshed, and white types of
potatoes, the Committee believes the
industry will remain competitive in the
marketplace. The Creamer potato market
is a premium market and this action is
expected to further increase sales of
Washington Creamer potatoes to benefit
the Washington potato industry. The
benefits of this rule are not expected to
be disproportionately greater or lesser
for small entities than large entities.
The Committee discussed several
alternatives to this recommendation,
including not changing the minimum
size requirement. However, the
Committee believes that it is important
that the Washington potato handling
regulations be consistent with the
revised Standards to reduce confusion
during the inspection and marketing of
these types of potatoes. The Committee
also determined that decreasing the
minimum size requirement for these
potatoes will provide the greatest
benefit to the industry by augmenting
the developing market for small
potatoes and increasing grower returns.
This rule will not impose any
additional reporting or recordkeeping
requirements on either small or large
potato handlers. As with all Federal
marketing order programs, reports and
forms are periodically reviewed to
reduce information requirements and
duplication by industry and public
sector agencies. In addition, USDA has
not identified any relevant Federal rules
that duplicate, overlap or conflict with
this rule.
AMS is committed to complying with
the E-Government Act, to promote the
use of the Internet and other
information technologies to provide
increased opportunities for citizen
access to Government information and
services, and for other purposes.
Further, the Committee’s meeting was
widely publicized throughout the
Washington potato industry and all
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52575
interested persons were invited to
participate in Committee deliberations.
Like all Committee meetings, the April
16, 2008, meeting was a public meeting
and all entities, both large and small,
were able to express views on this issue.
In addition, the World Trade
Organization and known importers of
potatoes will be notified of this action.
Finally, interested persons are invited to
submit comments on this interim final
rule, including the regulatory and
informational impacts of this action on
small businesses.
A small business guide on complying
with fruit, vegetable, and specialty crop
marketing agreements and orders may
be viewed at: https://www.ams.usda.gov/
AMSv1.0/ams.fetchTemplate
Data.do?template=TemplateN&
page=MarketingOrders
SmallBusinessGuide. Any questions
about the compliance guide should be
sent to Jay Guerber at the previously
mentioned address in the FOR FURTHER
INFORMATION CONTACT section.
This rule invites comments on a
relaxation of the size requirement
prescribed under the Washington potato
marketing order and the potato import
regulations. Any comments received
will be considered prior to finalization
of this rule.
In accordance with section 8e of the
Act, the United States Trade
Representative has concurred with the
issuance of this rule.
After consideration of all relevant
material presented, including the
Committee’s recommendation, and
other information, it is found that this
interim final rule, as hereinafter set
forth, will tend to effectuate the
declared policy of the Act.
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) Any changes resulting from
this rule should be effective as soon as
practicable because the Washington
potato shipping season begins in July;
(2) the Committee unanimously
recommended these changes at a public
meeting and all interested parties had
an opportunity to provide input; (3)
handlers are aware of this action and
want to take advantage of this relaxation
as soon as possible; and (4) this rule
provides a 60-day comment period and
any comments received will be
considered prior to finalization of this
rule.
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Federal Register / Vol. 73, No. 176 / Wednesday, September 10, 2008 / Rules and Regulations
List of Subjects in 7 CFR Part 946
Marketing agreements, Potatoes,
Reporting and recordkeeping
requirements.
I For the reasons set forth in the
preamble, 7 CFR part 946 is amended as
follows:
PART 946—IRISH POTATOES GROWN
IN WASHINGTON
1. The authority citation for 7 CFR
part 946 continues to read as follows:
I
Authority: 7 U.S.C. 601–674.
2. In § 946.336, paragraph (a)(2)(i) is
revised to read as follows:
I
§ 946.336
Handling regulation.
*
*
*
*
*
(a) * * *
(2) Size: (i) At least 17⁄8 inches in
diameter, except that all red, yellow
fleshed, and white types may be 3⁄4 inch
(19.1 mm) minimum diameter, if they
otherwise meet the requirements of U.S.
No. 1.
*
*
*
*
*
Dated: September 5, 2008.
Lloyd C. Day,
Administrator, Agricultural Marketing
Service.
[FR Doc. E8–20999 Filed 9–5–08; 4:15 pm]
BILLING CODE 3410–02–P
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Part 8
[Docket No. OCC–2008–0013]
RIN 1557–AD06
Assessment of Fees
Office of the Comptroller of the
Currency, Treasury.
ACTION: Final rule.
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AGENCY:
SUMMARY: The Office of the Comptroller
of the Currency (OCC) is adopting as
final and without change the interim
final assessments rule issued on
February 19, 2008. The interim final
rule added two new asset-size categories
to the table in 12 CFR 8.2(a) used to
calculate each national bank’s
semiannual assessment. The addition of
these categories is warranted to take
account of significant structural changes
in the national banking system since
1992, when the table was last revised,
and has enabled the OCC to realign
assessments to better reflect industry
structure and OCC’s corresponding
expenses of operations. No comments
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were received in response to the request
for comment on the interim final rule.
DATES: Effective Date: Effective
September 10, 2008 the rule published
on February 19, 2008 (73 FR 9012) and
corrected at 73 FR 9625, Feb. 21, 2008
is adopted as final without change.
FOR FURTHER INFORMATION CONTACT:
MaryAnn Nash, Counsel, Legislative
and Regulatory Activities Division,
(202) 874–5090; Stuart Feldstein,
Assistant Director, Legislative and
Regulatory Activities Division, (202)
874–5090; or Colette Baylson,
Accounting Operations Manager,
Financial Management, (202) 874–4403,
Office of the Comptroller of the
Currency, 250 E Street, SW.,
Washington, DC 20219.
SUPPLEMENTARY INFORMATION:
Background
The National Bank Act authorizes the
OCC to fund the expenses of its
operations through assessments on
national banks.1 Under this authority,
the OCC collects semiannual
assessments from national banks in
accordance with part 8 of our
regulations and with the OCC’s Notice
of the Comptroller of the Currency Fees
(Notice of Fees).2
Part 8 establishes categories, or
brackets, each of which comprises a
range of size values for a national bank’s
total assets. Each national bank’s
assessment is the sum of a base amount,
which is the same for every national
bank in that asset-size bracket, plus a
marginal amount, which is computed by
applying a marginal assessment rate to
the amount of total assets in excess of
the lower boundary of the asset-size
bracket.3 The marginal assessment rate
declines as asset size increases,
reflecting economies of scale in bank
examination and supervision, which
factor into the OCC’s overall cost of
operations. Both the base amounts and
the marginal rates applicable to each
asset-size bracket are published at least
once a year in the OCC’s Notice of
Fees.4
Prior to the issuance of the interim
final rule, the national bank assessments
1 12
U.S.C. 482.
part 8, the OCC also collects assessments
from Federal branches and Federal agencies. The
changes provided for in this final rule will also
apply to assessments of Federal branches and
Federal agencies.
3 See 12 CFR 8.2(a) (listing the asset-size
brackets).
4 See, e.g., OCC Bulletin 2007–46, ‘‘Notice of the
Comptroller of the Currency Fees for Year 2008’’
(December 1, 2007). The OCC’s regulations provide
for the annual publication of the Notice of Fees and
also authorize the publication of interim, or
amended, notices of fees ‘‘from time to time
throughout the year as necessary.’’ 12 CFR 8.8.
2 Under
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were based on asset-size brackets that
had been last updated in 1992 5 and no
longer reflected the structure and
distribution of assets in the national
banking system as a whole. For
example, since 1992, there has been a
significant increase not only in the
amount of assets held by the largest
banks, but also in the assets held by
national banks in other asset-size
brackets, resulting in a general upward
shift in the distribution of the
population of national banks on the
asset-size bracket table in 12 CFR 8.2(a).
The growth in the average assets held by
national banks reflects the consolidation
in the banking industry that has
occurred since 1992.
Given these developments, the OCC
has determined that it is appropriate to
update the existing asset-size brackets to
reflect the current structure of the
national banking system. The interim
final rule has enabled the OCC to adjust
the assessment framework to better
reflect industry structure and the OCC’s
corresponding expenses of operations.
Interim Final Rule and Comments
On February 19, 2008, the OCC
published and requested comment on
an interim final rule that expanded the
number of asset-size assessment
brackets in the table at 12 CFR 8.2(a) by
revising the current top bracket,
presently $40 billion and above, to
cover banks with assets between $40
billion and $250 billion.6 In addition,
the interim final rule created a new top
bracket that applies to banks with assets
in excess of $250 billion.
The OCC also made a conforming
change to delete the word ‘‘ten’’ from
the description of the asset-size brackets
in § 8.2(a)(1) of the assessment rules
since it no longer accurately described
the number of brackets.
The OCC received no comments in
response to the interim final rule and
has determined that it is appropriate to
adopt as final the interim final rule as
originally published on February 19,
2008.
Regulatory Flexibility Act Analysis
The Regulatory Flexibility Act (Pub.
L. 96–354, Sept. 19, 1980) (RFA) applies
only to rules for which an agency
publishes a general notice of proposed
rulemaking pursuant to 5 U.S.C. 553(b).7
Pursuant to the Administrative
Procedure Act (APA), at 5 U.S.C.
553(b)(B), notice and an opportunity for
public comment are not required prior
to the issuance of a final rule if an
5 57
FR 22413 (May 28, 1992).
FR 9012 (February 19, 2008).
7 5 U.S.C. 601(2).
6 73
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Agencies
[Federal Register Volume 73, Number 176 (Wednesday, September 10, 2008)]
[Rules and Regulations]
[Pages 52573-52576]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-20999]
========================================================================
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
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 73, No. 176 / Wednesday, September 10, 2008 /
Rules and Regulations
[[Page 52573]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 946
[Docket No. AMS-FV-08-0036; FV08-946-1 IFR]
Irish Potatoes Grown in Washington; Relaxation of Handling and
Import Regulations
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim final rule with request for comments.
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SUMMARY: This rule relaxes the size requirement prescribed under the
Washington potato marketing order. The marketing order regulates the
handling of Irish potatoes grown in Washington, and is administered
locally by the State of Washington Potato Committee (Committee). This
rule decreases the minimum size required for all fresh market red,
yellow fleshed, and white types of potatoes from 1 inch (25.4 mm) to
\3/4\ inch (19.1 mm) in diameter, if the potatoes otherwise meet the
requirements of U.S. No. 1 grade. This rule will also decrease the
minimum size requirement from July 1 through September 30 of each year
for imported red-skinned, round type potatoes under the import
regulations as required by section 8e of the Agricultural Marketing
Agreement Act of 1937. The Committee recommended this change in
response to the recently revised U.S. Standards for Grades of Potatoes
which added a definition for Creamer potatoes. This change is intended
to provide potato handlers with greater marketing flexibility, growers
with increased returns, consumers with a greater supply of small
potatoes, and to bring the section 8e potato import regulation into
conformity with the marketing order.
DATES: Effective September 11, 2008; comments received by November 10,
2008 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,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC
20250-0237; Fax: (202) 720-8938; or Internet: https://
www.regulations.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, or can be viewed at: http:/
/www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Teresa Hutchinson or Gary Olson,
Northwest Marketing Field Office, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, Telephone: (503) 326-
2724, Fax: (503) 326-7440, or E-mail: Teresa.Hutchinson@usda.gov or
GaryD.Olson@usda.gov.
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: (202)
720-2491, Fax: (202) 720-8938, or E-mail: Jay.Guerber@usda.gov.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order
No. 946, as amended (7 CFR part 946), regulating the handling of Irish
potatoes grown in Washington, hereinafter referred to as the ``order.''
The order is effective under the Agricultural Marketing Agreement Act
of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the
``Act.''
This interim final rule is also issued under section 8e of the Act,
which provides that whenever certain specified commodities, including
potatoes, are regulated under a Federal marketing order, imports of
these commodities into the United States are prohibited unless they
meet the same or comparable grade, size, quality, or maturity
requirements as those in effect for the domestically produced
commodities. Section 8e also provides that whenever two or more
marketing orders regulating the same commodity produced in different
areas of the United States are concurrently in effect, a determination
must be made as to which of the areas produces the commodity in most
direct competition with the imported commodity. Imports must meet the
same or comparable requirements established for that particular area.
The requirements for red-skinned, round type potatoes imported from
July 1 through September 30 are based on the Washington potato
marketing order requirements.
The Department of Agriculture (USDA) is issuing this rule in
conformance with Executive Order 12866.
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. This rule is not intended to have retroactive effect.
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 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.
This rule decreases the size required for all fresh market red,
yellow fleshed, and white types of potatoes produced in Washington
State from 1 inch (25.4 mm) to \3/4\ inch (19.1 mm) minimum, if the
potatoes otherwise meet the requirements of U.S. No. 1 grade. This
change is intended to provide potato
[[Page 52574]]
handlers with greater marketing flexibility, growers with increased
returns, and consumers with a greater supply of small potatoes. As
provided under section 8e of the Act, the size modification will also
apply to all red-skinned, round type potatoes imported from July 1
through September 30. This rule will not affect the current import
requirements for all other round type or long type potatoes.
Section 946.52 of the order authorizes the establishment of grade,
size, quality, or maturity regulations for any variety or varieties of
potatoes grown in the production area. Section 946.52 also authorizes
the regulation of the size, capacity, weight, dimensions, pack, and
marking or labeling of the container, or containers, which may be used
in the packing or handling of potatoes, or both. Section 946.51 further
authorizes the modification, suspension, or termination of regulations
issued under Sec. 946.52. Section 946.60 provides that whenever
potatoes are regulated pursuant to Sec. 946.52 such potatoes must be
inspected by the Federal or Federal-State Inspection Service, and
certified as meeting the applicable requirements of such regulations.
Section 946.336 of the order's administrative rules and regulations
prescribes the quality, size, maturity, cleanness, pack, and inspection
requirements for fresh market Washington potatoes. Section
946.336(a)(2) prescribes the size requirements. Relevant import
regulations are contained in Sec. 980.1 and Sec. 980.501 of the
vegetable import regulations.
During a video conference meeting held on April 16, 2008, with a
follow-up mail vote, the Committee unanimously recommended changing the
minimum size requirement for all U.S. No. 1 grade fresh market red,
yellow fleshed, and white types of potatoes produced under the order
from 1 inch to \3/4\ inch in diameter.
The Committee recommended this change in response to the recently
revised U.S. Standards for Grades of Potatoes (Standards) which became
effective on April 21, 2008 (73 FR 15051, March 21, 2008). The revised
Standards added a definition for Creamer potatoes. The revised
Standards define the Creamer size designation as \3/4\ inch minimum
diameter and 1\5/8\ inch maximum diameter with no minimum or maximum
weight.
Before the Standards were revised to include a Creamer size
designation, various states developed their own standards for Creamer
potatoes in an attempt to meet the increasing consumer demand for small
potatoes. The Washington potato industry had previously considered
Creamer potatoes to have a 1 inch minimum diameter. The Committee
recommended reducing the minimum diameter to \3/4\ inch so that the
handling regulation would correspond with the revised Standards and to
ensure that the industry was being responsive to the desires of
consumers. The Committee also believes that inconsistency between what
was marketed in Washington as Creamer potatoes and the Standards would
have caused confusion in the marketplace.
Within the past several years, consumer demand has increased for
small potatoes which often command premium prices. Decreasing the
minimum size requirement from 1 inch to \3/4\ inch will help handlers
in Washington meet the needs of their customers.
Committee statistics show that approximately 25 percent (2,483,219
hundredweight) of fresh market Washington potatoes (9,932,874
hundredweight) are red, yellow fleshed and white types of potatoes. The
decrease in the size requirement is expected to increase the volume of
red, yellow fleshed, and white types of potatoes that meet minimum size
requirements. Shipping a larger portion of the crop to market would
help meet consumer demand and is expected to increase returns to
growers.
As mentioned earlier, section 8e of the Act provides that when
certain domestically produced commodities, including potatoes, are
regulated under a Federal marketing order, imports of that commodity
must meet the same or comparable grade, size, quality, and maturity
requirements. Section 8e also provides that whenever two or more
marketing orders regulating the same commodity produced in different
areas of the United States are concurrently in effect, a determination
must be made as to which of the areas produces the commodity in most
direct competition with the imported commodity. Imports must meet the
requirements established for that particular area.
Grade, size, quality, and maturity regulations have been issued
regularly under marketing orders No. 945 (Idaho-Eastern Oregon
potatoes), No. 948 (Colorado potatoes, Area No. 2 and Area No. 3), No.
946 (Washington potatoes), and No. 953 (Southeastern potatoes) since
the marketing orders were established. Section 980.1 of the vegetable
import regulations specifies that import requirements for potatoes are
to be based on the seasonal categories of potatoes produced in all
marketing order areas. In that regard, imported red-skinned, round type
potatoes must meet the requirements of the Washington potato marketing
order during the months of July through September and the Area No. 2
Colorado potato marketing order during the months of October through
the following June. This rule will not affect the current import
requirements for all other round type or long type potatoes.
Initial Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS)
has considered the economic impact of this action on small entities.
Accordingly, AMS has prepared this 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 rules issued thereunder, are unique in that
they are brought about through group action of essentially small
entities acting on their own behalf.
Import regulations issued under the Act are based on regulations
established under Federal marketing orders which regulate the handling
of domestically produced products.
Currently, there are approximately 45 handlers of Washington
potatoes who are subject to regulation under the marketing order and
approximately 267 potato producers in the regulated area. Small
agricultural service firms are defined by the Small Business
Administration (SBA) (13 CFR 121.201) as those having annual receipts
of less than $6,500,000, and small agricultural producers are defined
as those having annual receipts of less than $750,000.
During the 2006-2007 marketing year, 9,932,874 hundredweight of
Washington potatoes were inspected under the order and sold into the
fresh market by 43 handlers, according to Committee data. The Committee
reports that an industry consensus estimate of an average fresh potato
f.o.b. price is $8.45 per hundredweight. Multiplying the 2006-2007
fresh shipments of 9,932,874 hundredweight by the average f.o.b. price
of $8.45 yields a handler-level fresh market crop value of $83.933
million. Dividing $83.933 million by 43 handlers gives an average
annual sales value per handler estimate of about $1.952 million. The
Committee estimates that 41, or about 95 percent of these 43 handlers,
had annual receipts of less than $6,500,000.
[[Page 52575]]
A comparable computation can be made to estimate annual average
revenue per producer. Based on information provided by the National
Agricultural Statistics Service, the 2006 season average producer price
for Washington potatoes was $6.25 per hundredweight. Multiplying the
2006-2007 fresh shipments of 9,932,874 hundredweight by the average
producer price of $6.25 provides a producer-level fresh market crop
value of $62.08 million. Dividing $62.08 million by 267 Washington
potato producers yields an average annual fresh market sales value per
producer of approximately $232,500.
In view of the foregoing, it can be concluded that the majority of
the Washington potato producers and handlers may be classified as small
entities. Although it is not known how many importers of potatoes may
be classified as small entities, we believe that many of the importers
of potatoes can be classified as such.
This rule decreases the minimum size required for all fresh market
red, yellow fleshed, and white types of potatoes produced under the
order from 1 inch to \3/4\ inch in diameter, if they otherwise meet the
requirements of U.S. No. 1 grade. This change enables handlers with the
ability to respond to the consumer demand for small potatoes. As
provided under section 8e of the Act, this change will also apply to
all imported red-skinned, round type potatoes between July 1 through
September 30 of each year. While no change will be required in the
language of Sec. 980.1, all imported red-skinned, round type potatoes
from July 1 through September 30 will be required to meet the minimum
size requirement of \3/4\ inch in diameter.
The authority for the grade and size requirements is provided in
Sec. 946.52 of the order. Section 946.336(a)(2) of the order's
administrative rules and regulations prescribes the size requirement.
Relevant import regulations are contained in Sec. 980.1 and Sec.
980.501 of the vegetable import regulations.
Regarding the impact of this rule on affected entities, decreasing
the size requirement for these potatoes is expected to benefit
handlers, importers and growers. There should be no extra cost to
producers or handlers because current harvesting and handling methods
can accommodate the sorting of these smaller potatoes. By decreasing
the minimum size requirement for these potatoes, a greater quantity of
potatoes will meet the order's handling regulations and the import
regulations. This could translate into an increased market for small
potatoes and greater returns for handlers, importers, and growers.
As small potatoes have grown in popularity with consumers, the
market demand has outpaced the quantity of small, high quality potatoes
available from Washington. The Committee believes that a decrease in
the size requirement will increase the available supply of small
potatoes. The small potato market is a minor segment of the Washington
potato market. As such, the Committee believes that these small
potatoes do not compete directly with most of the fresh market potatoes
and that this action will not adversely affect the overall Washington
potato market.
By providing Washington handlers the flexibility to pack the
smaller red, yellow fleshed, and white types of potatoes, the Committee
believes the industry will remain competitive in the marketplace. The
Creamer potato market is a premium market and this action is expected
to further increase sales of Washington Creamer potatoes to benefit the
Washington potato industry. The benefits of this rule are not expected
to be disproportionately greater or lesser for small entities than
large entities.
The Committee discussed several alternatives to this
recommendation, including not changing the minimum size requirement.
However, the Committee believes that it is important that the
Washington potato handling regulations be consistent with the revised
Standards to reduce confusion during the inspection and marketing of
these types of potatoes. The Committee also determined that decreasing
the minimum size requirement for these potatoes will provide the
greatest benefit to the industry by augmenting the developing market
for small potatoes and increasing grower returns.
This rule will not impose any additional reporting or recordkeeping
requirements on either small or large potato handlers. As with all
Federal marketing order programs, reports and forms are periodically
reviewed to reduce information requirements and duplication by industry
and public sector agencies. In addition, USDA has not identified any
relevant Federal rules that duplicate, overlap or conflict with this
rule.
AMS is committed to complying with the E-Government Act, to promote
the use of the Internet and other information technologies to provide
increased opportunities for citizen access to Government information
and services, and for other purposes.
Further, the Committee's meeting was widely publicized throughout
the Washington potato industry and all interested persons were invited
to participate in Committee deliberations. Like all Committee meetings,
the April 16, 2008, meeting was a public meeting and all entities, both
large and small, were able to express views on this issue. In addition,
the World Trade Organization and known importers of potatoes will be
notified of this action. Finally, interested persons are invited to
submit comments on this interim final rule, including the regulatory
and informational impacts of this action on small businesses.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at: http:/
/www.ams.usda.gov/AMSv1.0/
ams.fetchTemplateData.do?template=TemplateN&page=MarketingOrdersSmallBus
inessGuide. Any questions about the compliance guide should be sent to
Jay Guerber at the previously mentioned address in the FOR FURTHER
INFORMATION CONTACT section.
This rule invites comments on a relaxation of the size requirement
prescribed under the Washington potato marketing order and the potato
import regulations. Any comments received will be considered prior to
finalization of this rule.
In accordance with section 8e of the Act, the United States Trade
Representative has concurred with the issuance of this rule.
After consideration of all relevant material presented, including
the Committee's recommendation, and other information, it is found that
this interim final rule, as hereinafter set forth, will tend to
effectuate the declared policy of the Act.
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) Any changes resulting from this rule should be effective
as soon as practicable because the Washington potato shipping season
begins in July; (2) the Committee unanimously recommended these changes
at a public meeting and all interested parties had an opportunity to
provide input; (3) handlers are aware of this action and want to take
advantage of this relaxation as soon as possible; and (4) this rule
provides a 60-day comment period and any comments received will be
considered prior to finalization of this rule.
[[Page 52576]]
List of Subjects in 7 CFR Part 946
Marketing agreements, Potatoes, Reporting and recordkeeping
requirements.
0
For the reasons set forth in the preamble, 7 CFR part 946 is amended as
follows:
PART 946--IRISH POTATOES GROWN IN WASHINGTON
0
1. The authority citation for 7 CFR part 946 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
0
2. In Sec. 946.336, paragraph (a)(2)(i) is revised to read as follows:
Sec. 946.336 Handling regulation.
* * * * *
(a) * * *
(2) Size: (i) At least 1\7/8\ inches in diameter, except that all
red, yellow fleshed, and white types may be \3/4\ inch (19.1 mm)
minimum diameter, if they otherwise meet the requirements of U.S. No.
1.
* * * * *
Dated: September 5, 2008.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E8-20999 Filed 9-5-08; 4:15 pm]
BILLING CODE 3410-02-P