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Federal Register / Vol. 86, No. 170 / Tuesday, September 7, 2021 / Proposed Rules USDA is required to notify Congress no later than 60 days before the date on which the Order would be terminated.
Marketing Order No. 946 has been in effect since 1949 and has provided the potato industry in Washington with authority for grade, size, quality, maturity, pack, and container regulations, as well as authority for mandatory product inspection. The Committee has met regularly to evaluate the current status of the Washington potato industry and to consider recommendations for modification, suspension, or termination of the Orders regulatory requirements, 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 USDA reviews Committee recommendations, including information provided by the Committee and from other available sources, and determines whether modification, suspension, or termination of the Orders regulatory requirements would tend to effectuate the declared policy of the Act.
Handling regulations requiring potatoes to be inspected and meet mandatory minimum grade, size, maturity, quality, pack, and container requirements were in effect for all types of potatoes until 2010. USDA
temporarily suspended handling regulations for Russet type potatoes for one-year, effective July 24, 2010 75 FR
43042, and subsequently extended that suspension indefinitely effective July 1, 2011 76 FR 27850. Further, USDA
temporarily suspended handling regulations for yellow fleshed and white type potatoes effective October 24, 2013
78 FR 62967, also extending that suspension indefinitely effective July 1, 2014 79 FR 26109. Lastly, USDA
indefinitely suspended handling regulations for all red types of potatoes effective February 15, 2014 79 FR
8253. The cumulative effect of these suspensions was the total suspension of handling regulations for all fresh potatoes under the Order after July 1, 2014. All suspensions listed above were conducted upon the recommendation of the Committee.
Following these regulatory suspensions, the Committee continued to levy assessments in order to maintain its functionality. The Committee felt that it should continue to fund its full operational capability in order to collect handler reports, track industry data, and preserve the authority to regulate handling, should that become relevant to the industry again sometime in the future.

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The Committee met on January 22 and June 11, 2020, to discuss the current marketing environment of the Washington potato industry and the status of the Order. The Committee determined that the suspension of the Orders handling regulations have not negatively impacted the industry and that there is no longer a need for the Order. In addition, the Committee concluded that data collection and reporting functions of the Order are duplicative of the services provided to the industry by the Washington State Potato Commission and that termination of the Order would not materially impact the collection and dissemination of essential industry data.
At the meeting held via conference call on June 11, 2020, the Committee unanimously voted in favor of recommending that USDA to terminate the Order. In addition, the Committee recommended the Orders reporting and assessment requirementsthe only regulatory activities still in effectbe suspended while USDA processes termination of the Order. The recommendation to suspend all remaining Order activities is a separate regulatory action from this rule. A
proposed rule to suspend the Orders reporting and assessment requirements was published in the Federal Register October 13, 2020 85 FR 64415.
Initial Regulatory Flexibility Analysis Pursuant to requirements set forth in the Regulatory Flexibility Act RFA 5
U.S.C. 601612, AMS has considered the economic impact of this proposed rule 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 businesses 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.
There are approximately 26 handlers of Washington potatoes and approximately 250 potato producers in the production area subject to regulation by the Order.
Small agricultural service firms are defined by the Small Business Administration SBA as those having annual receipts of less than $30,000,000, and small agricultural producers are defined as those having annual receipts of less than $1,000,000 13 CFR
121.201.

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According to USDA Market News, the average shipping point price for fresh Washington potatoes during the 2019
shipping season was approximately $15.79 per hundredweight. The Committee reported that 20192020
marketing year fresh potato shipments were 9,687,170 hundredweight. Using the average price and shipment information, the number of handlers, and assuming a normal distribution, most handlers had average annual receipts of less than $30,000,000 $15.79
times 9,687,170 hundredweight equals $152,960,414, divided by 26 handlers equals $5,883,093 per handler. Thus, AMS concludes that the majority of handlers would meet the SBA definition of a small business.
USDA National Agricultural Statistics Service reported an average producer price of $8.20 per hundredweight for the 2019 crop. Given the number of Washington potato producers and assuming a normal distribution, average annual producer revenue is below $1,000,000 $8.20 times 9,687,170
hundredweight equals $79,434,794, divided by 250 producers equals $317,739 per producer. Therefore, most producers of fresh Washington potatoes may be classified as small businesses under the SBA definition.
This rule proposes to terminate the Federal marketing order for Irish potatoes grown in Washington, and rules and regulations issued thereunder.
The Order contains authority to regulate the handling of Irish potatoes grown in Washington. The Committee determined that regulating the handling of potatoes under the Order is no longer an effective marketing tool for the Washington potato industry. Evidence from the past 6 years of operating with suspended handling regulations showed that potatoes can be shipped from the production area in the absence of the Orders minimum requirements without a negative economic impact on the industry.
Secondly, the Committee determined that the data collection and reporting function of the Order is duplicative of the services provided to the industry by the Washington State Potato Commission. The termination of the Order would not materially impact the collection and dissemination of essential industry data to Washington State potato growers.
As such, the Committee concluded that the cost associated with the administration of the Order outweigh benefits of continuing the Order. This conclusion is based on the Committees analysis of the 6-year period of regulatory suspension and findings that termination is not expected to
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