Irish Potatoes Grown in Certain Designated Counties in Idaho, and Malheur County, Oregon, and Imported Irish Potatoes; Modification of Minimum Size Requirements

SUMMARY: This proposed rule would modify the minimum size requirements

for all varieties of potatoes, except round reds, grown in certain

designated counties in Idaho, and Malheur County, Oregon, and for

imported long type potatoes. Currently, the minimum size requirement

for all varieties, except round reds, is 2 inches in diameter, or 4

ounces in weight. This rule would specify that, in addition, at least

40 percent of the potatoes in each lot, by weight, must be 5 ounces or

heavier. Requiring handlers to ship heavier potatoes could correct a

marketing problem by providing the heavier potatoes demanded by the

market and increase returns to producers and handlers. As provided

under the Agricultural Marketing Agreement Act of 1937, the proposed

changes would also apply to imported potatoes.

DATES: Comments must be received by August 24, 1994.

ADDRESSES: Interested persons are invited to submit written comments

concerning this proposal. Comments must be sent in triplicate to the

Docket Clerk, Fruit and Vegetable Division, AMS, USDA, P.O. Box 96456,

Room 2523-S, Washington, DC 20090-6456 or by Fax at (202) 720-5698. 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: Gary D. Olson, Northwest Marketing

Field Office, Fruit and Vegetable Division, AMS, USDA, 1220 SW Third

Avenue, Room 369, Portland, OR 97204; telephone: (503) 326-2724 or Fax

(503) 326-7440; or Valerie L. Emmer, Marketing Order Administration

Branch, Fruit and Vegetable Division, Agricultural Marketing Service,

U.S. Department of Agriculture, P.O. Box 96456, Room 2523-S,

Washington, DC 20090-6456; telephone: (202) 205-2829 or Fax (202) 720-

5698.

SUPPLEMENTARY INFORMATION: This proposed rule is issued under Marketing

Agreement and Marketing Order No. 945 [7 CFR part 945], as amended,

hereinafter referred to as the ``order,'' regulating the handling of

Irish potatoes grown in certain designated counties in Idaho, and

Malheur County, Oregon. 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 proposed rule, which would also affect the import requirements

for long type Irish potatoes, is also issued pursuant to section 8e of

the Act. The provisions of section 8e and the potato import regulation

are discussed later in this proposed rule.

The U.S. Department of Agriculture (Department) is issuing this

rule in conformance with Executive Order 12866.

This proposal has been reviewed under Executive Order 12778, Civil

Justice Reform. This rule is not intended to have retroactive effect.

This proposed 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 in equity to review the

Secretary's ruling on the petition, provided a bill in equity 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.

Pursuant to requirements set forth in the Regulatory Flexibility

Act (RFA), the Administrator of the Agricultural Marketing Service

(AMS) has considered the economic impact of this action on 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 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. Thus, both statutes have small

entity orientation and compatibility. Import regulations issued under

the Act are based on those established under Federal marketing orders.

There are approximately 60 handlers of Idaho-Eastern Oregon

potatoes that are subject to regulation under the order, and

approximately 2,000 producers in the production area. In addition, at

least 75 importers of Irish potatoes are subject to import regulations

and would be affected by this rule. Small agricultural service firms,

which include handlers of Idaho-Eastern Oregon potatoes, have been

defined by the Small Business Administration [13 CFR 121.601] as those

whose annual receipts are less than $5,000,000, and small agricultural

producers are defined as those whose annual receipts are less than

$500,000. A majority of these handlers and producers may be classified

as small entities. The majority of the importers of potatoes may also

be classified as small entities.

This action would amend paragraph (a)(2)(ii) of Sec. 945.341

Handling regulation of the order's rules and regulations. The proposal

is based on a unanimous recommendation made by the Idaho-Eastern Oregon

Potato Committee (committee), the agency responsible for local

administration of the order, at its June 7, 1994, public meeting. The

committee's recommended revision is authorized pursuant to Secs. 945.51

and 945.52 of the order.

Quality assurance is very important to the Idaho-Eastern Oregon

potato industry. Providing the public with acceptable quality produce

which is appealing to the consumer on a consistent basis is necessary

to maintain buyer confidence in the marketplace. The committee reports

that potato size is important to buyers.

For several decades, the minimum size requirement for all varieties

of Idaho-Oregon potatoes, except round reds, has been 2 inches in

diameter, or 4 ounces in weight. However, the committee reports that

the industry has been losing its share of the potato market, because

the market in recent years has been demanding potatoes larger than this

minimum size. Consumers now expect some baker size potatoes in the

packages they buy. In spite of an industry campaign to encourage

handlers to voluntarily ship larger potatoes, a number of handlers have

continued to ship potatoes that barely meet the minimum size

requirement, depressing the price for other potatoes. These potatoes

are generally shipped in consumer packs (e.g., 5- or 10-pound bags) or

in 100-pound sacks for later repackaging into consumer packs.

These shipments have resulted in disappointment by buyers and

consumers in recent years, hurting the quality image of Idaho-Eastern

Oregon potatoes, reducing repeat purchases and overall sales volume,

and resulting in declines in prices, which has hurt the overall sales

volume.

To better meet market demand regarding the size of potatoes, the

committee recommended an additional requirement that at least 40

percent of the potatoes in each lot must weigh at least 5 ounces. It is

anticipated that requiring handlers to ship such heavier potatoes would

enable the industry to regain its lost share of the market and increase

returns to producers and handlers.

Section 8e of the Act requires that when certain domestically

produced commodities, including Irish potatoes, are regulated under a

Federal marketing order, imports of that commodity must meet the same

or comparable grade, size, quality, or maturity requirements, subject

to concurrence by the U.S. Trade Representative. Section 8e also

provides that whenever two or more marketing orders regulating a

commodity produced in different areas of the United States are

concurrently in effect, the Secretary shall determine which of the

areas produces the commodity in more direct competition with the

imported commodity. Imports, then must meet the quality standards set

for the particular area.

In the case of potatoes, the current import regulation [7 CFR

980.1] specifies that import requirements for long type potatoes be

based on those in effect for potatoes grown in certain designated

counties in Idaho, and Malheur County, Oregon, during each month of the

marketing year. While no changes are required in the language of

Sec. 980.1, imports of long type potatoes would have to meet the

increased minimum weight requirements proposed herein.

Section 945.341(i) Applicability to imports is proposed to be

removed from the handling regulations. That paragraph states the same

information that is contained in Sec. 980.1 of the import regulations.

Since the same information applicable to imported potatoes is contained

in the import regulations, paragraph (i) in the domestic handling

regulations should be deleted to eliminate duplication or confusion.

Based on available information, the Administrator of the AMS has

determined that this action would not have a significant economic

impact on a substantial number of small entities.

A 15-day comment period is provided to allow interested persons to

respond to this proposal. All written comments received within the

comment period will be considered before a final determination is made

on this matter. The committee unanimously recommended that this rule

become effective by September 1, 1994, to ensure that implementation be

in place early in the 1994-95 shipping season. Implementation of this

rule by this date will provide ample opportunity for handlers and the

industry to make marketing and promotional plans for the upcoming

season.

In accordance with section 8e of the Act, the United States Trade

Representative has concurred with the issuance of this proposed rule.

List of Subjects in 7 CFR Part 945

Marketing agreements, Potatoes, Reporting and recordkeeping

requirements.

For the reasons set forth in the preamble, 7 CFR part 945 is

proposed to be amended as follows:

PART 945--IRISH POTATOES GROWN IN CERTAIN DESIGNATED COUNTIES IN

IDAHO, AND MALHEUR COUNTY, OREGON

1. The authority citation for 7 CFR part 945 continues to read as

follows:

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

2. Section 945.341 is amended by revising paragraph (a)(2)(ii) to

read as follows and removing paragraph (i):

Sec. 945.341 Handling regulation.

* * * * *

(a) * * *

(2) * * *

(ii) All other varieties. 2 inches minimum diameter, or 4 ounces

minimum weight: Provided, That at least 40 percent of the potatoes in

each lot shall be 5 ounces or heavier.

* * * * *

Dated: August 2, 1994.

Terry C. Long,

Acting Deputy Director Fruit and Vegetable Division.

[FR Doc. 94-19385 Filed 8-8-94; 8:45 am]

BILLING CODE 3410-02-P