Potato Research and Promotion Plan; Changes to Board Membership and Administrative Committee
| Court | Agricultural Marketing Service |
| Citation | 88 FR 60599 |
| Published date | 05 September 2023 |
| Record Number | 2023-19003 |
Federal Register, Volume 88 Issue 170 (Tuesday, September 5, 2023)
[Federal Register Volume 88, Number 170 (Tuesday, September 5, 2023)]
[Proposed Rules]
[Pages 60599-60603]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-19003]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 88, No. 170 / Tuesday, September 5, 2023 /
Proposed Rules
[[Page 60599]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 1207
[Doc. No. AMS-SC-22-0041]
Potato Research and Promotion Plan; Changes to Board Membership
and Administrative Committee
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would implement recommendations from the
National Potato Promotion Board (Board) to change its membership and
organization by revising the formula used to determine the number of
producer and importer seats on the Board, reducing the maximum number
of importer seats on the Board, and indefinitely suspending the
Administrative Committee. In addition to these Board-recommended
changes, the U.S. Department of Agriculture (USDA) would make several
non-substantive changes to clarify the start of the term of office for
Board members and modernize the Board's procedures. The Board
administers the Potato Research and Promotion Plan (Plan) with
oversight by the Agricultural Marketing Service (AMS).
DATES: Comments must be received by October 5, 2023.
ADDRESSES: Interested persons are invited to submit written comments
concerning this proposed rule. Comments may be mailed to the Docket
Clerk, Market Development Division, Specialty Crops Program, AMS, USDA,
1400 Independence Avenue SW, STOP 0237, Washington, DC 20250-0237; Fax:
(202) 720-8938; or submitted electronically by Email:
[email protected]; or via internet at https://www.regulations.gov.
Comments should reference the document number and the date and page
number of this issue of the Federal Register. All comments 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. Comments submitted in response to this proposed
rule will be included in the rulemaking record and will be made
available to the public. Please be advised that the identity of the
individuals or entities submitting the comments will be made public.
FOR FURTHER INFORMATION CONTACT: Alexandra Caryl, Branch Chief, Mid-
Atlantic Region Branch, Market Development Division, Specialty Crop
Program, AMS, USDA, STOP 0244, 1400 Independence Avenue SW, Room 1406-
S, Washington, DC 20250-0244; Telephone: (202) 720-8805; or Email:
[email protected].
SUPPLEMENTARY INFORMATION: This proposed rule affecting the Plan (7 CFR
part 1207) is authorized under the Potato Research and Promotion Act of
1971 (Act) (7 U.S.C. 2611-2627).
Executive Orders 12866, 13563, and 14094
USDA is issuing this proposed rule in conformance with Executive
Orders 12866, 13563, and 14094. Executive Orders 12866 and 13563 direct
agencies to assess all costs and benefits of available regulatory
alternatives and, if regulation is necessary, to select regulatory
approaches that maximize net benefits (including potential economic,
environmental, public health and safety effects, distributive impacts,
and equity). Executive Order 13563 emphasizes the importance of
quantifying both costs and benefits, reducing costs, harmonizing rules,
and promoting flexibility. Executive Order 14094 reaffirms,
supplements, and updates Executive Order 12866 and further directs
agencies to solicit and consider input from a wide range of affected
and interested parties through a variety of means. This proposed rule
is not a significant regulatory action within the meaning of Executive
Order 12866. Accordingly, this action has not been reviewed by the
Office of Management and Budget under section 6 of the Executive Order.
Executive Order 13175
This action has been reviewed in accordance with the requirements
of Executive Order 13175, Consultation and Coordination with Indian
Tribal Governments. AMS has assessed the impact of this proposed rule
on Indian Tribes and determined that this rule would not have Tribal
implications that require consultation under Executive Order 13175. AMS
hosts a quarterly teleconference with Tribal leaders where matters of
mutual interest regarding the marketing of agricultural products are
discussed. Information about the proposed changes to the regulations
will be shared during an upcoming quarterly call, and Tribal leaders
will be informed about the proposed revisions to the regulation and the
opportunity to submit comments. AMS will work with the USDA Office of
Tribal Relations to ensure meaningful consultation is provided as
needed with regard to these proposed changes to the Plan.
Executive Order 12988
This proposal has been reviewed under Executive Order 12988, Civil
Justice Reform. It is not intended to have retroactive effect.
The Act provides that administrative proceedings must be exhausted
before parties may file suit in court. Under sec. 311 of the Act (7
U.S.C. 2620), a person subject to the Plan may file a petition with
USDA stating that the Plan, any provision of the Plan, or any
obligation imposed in connection with the Plan, is not in accordance
with law and requesting a modification of the Plan or to be exempted
therefrom. Such person is afforded the opportunity for a hearing on the
petition. Thereafter, USDA will issue a ruling on the petition. The Act
provides that the district courts of the United States for any district
in which the petitioner resides or conducts business shall have
jurisdiction to review a final ruling on the petition, if the
petitioner files a complaint for that purpose not later than 20 days
after the date of the entry of USDA's final ruling.
Background
Under the Plan, which became effective on March 9, 1972, the Board
administers a nationally coordinated program of research, development,
advertising, and promotion designed to strengthen potatoes' competitive
position and expand domestic and foreign markets for potatoes and
potato products. This program is financed by assessments on handlers
and importers of potatoes and potato products.
[[Page 60600]]
This proposed rule would modify the membership of the Board by
revising the formula to determine the number of producer and importer
seats on the Board. This action would increase the current threshold
from one member seat per five million hundredweight pounds of potatoes
produced or imported to one seat per 10 million hundredweight for both
producer and importer seats. This action would further revise importer
membership by reducing the maximum number of importer seats from five
to two. Additionally, the action would indefinitely suspend the
Administrative Committee. Finally, this proposed rule would clarify the
start date of the term of office for Board members and modernize
certain Board procedures relating to the submission of votes and
ballots.
The Board unanimously recommended the proposed changes to its
membership and the indefinite suspension of the Administrative
Committee at a public meeting on March 9, 2022. Board members present
for the vote represented domestic producers, importers, and the public,
and the recommendations incorporated industry feedback collected by the
Board over a three-year period.
Board Recommendation To Change Membership Rules
Section 1207.320(b) and (c) of the Plan provides the formula used
to determine the number of producer and importer seats on the Board.
Under this formula, one seat is created for every five million
hundredweight of potatoes produced or imported. Therefore, as more
potatoes are produced and imported, the Board has more seats.
The Board has encountered significant challenges in filling Board
member seats. First, since the Board's inception, the potato industry
has experienced both increased production and consolidation. Since the
1970s when the Board was created, production of potatoes in the U.S. as
well as imports from Canada and other countries have increased
substantially. At the same time, the number of commercial potato
farmers and importers has decreased significantly. Accordingly, the
number of seats has grown but there are fewer eligible producers and
importers to fill them. Second, Board members are volunteers, nominated
by peers to represent their State or importer sector. To be a member,
domestic producers and importers use time otherwise spent with their
businesses to travel to meetings and participate in committees and
decision making. Board members are also expected to communicate the
activities of the Board to their constituencies and recruit future
Board members. While service as Board members is important, it is time-
consuming.
As a result of these challenges, the Board in recent years has
typically had approximately 125 total seats, of which only about 100
have been filled. Therefore, the Board has experienced roughly 25
vacancies each year. The proposal would increase the threshold from one
member seat per five million hundredweight pounds of potatoes produced
or imported to one seat per 10 million hundredweight for both producer
and importer seats. With the proposed changes, the Board expects the
number of member seats to reduce to 80.
Section 308 of the Act (7 U.S.C. 2617(b)) and Sec. Sec.
1207.320(c) and 1207.322(d) of the Plan currently allow for a maximum
of five importer seats on the Board. Since importers started paying
assessments in 1991, the Board has always included the maximum of five
importer member seats. Like their domestic producer counterparts,
however, potato importers continue to experience industry
consolidation. According to Customs and Border Protection data, in 2022
there were only 10 importers with annual receipts above the Small
Business Administration's (SBA) threshold of $34 million. The Board has
not filled all five positions in the last 10 years because of the small
number of continuously active importers. Given that members serve
three-year terms and cannot serve more than two consecutive terms,
along with the small number of importers, it is reasonable to decrease
the maximum number of importers from five to two. Additionally, the
Board conducted extensive outreach to affected stakeholders and
received their support for the change, as evidenced by the unanimous
vote for this change.
The initial request for these proposed changes came from domestic
producers and importers. Since 2020, the Board has met with various
State organizations across the country to discuss the proposed changes.
USDA and members of industry also participated in numerous public
meetings conducted by the Board to discuss the chronic vacancies
experienced by the Board as a result of its current size and structure.
The proposed solution developed by the Board reflects the input from
these stakeholders.
Board Recommendation To Suspend the Administrative Committee
Section 1207.507 of the Plan establishes an Administrative
Committee composed of 38 producer members, one importer member, and the
public member, as provided for in the Board's bylaws. The
Administrative Committee is selected annually. The Administrative
Committee acts for the Board in implementing marketing research,
development, advertising, and/or promotion activities as directed by
the Board and is charged with developing and submitting to USDA for
approval specific programs or projects. The Administrative Committee
also acts for the Board in authorizing contracts or agreements for the
development and carrying out of such programs or projects and the
payment of the costs thereof with funds collected pursuant to the Plan.
Finally, the Administrative Committee acts for the Board in contracting
with cooperating agencies for the collection of assessments pursuant to
the Plan.
Due to the proposed changes to the Board's membership, which would
reduce membership seats to approximately 80, the Board believes the
Administrative Committee is no longer needed. Currently, the Board uses
the Administrative Committee like a smaller Board that meets twice a
year, while the full Board only meets once. It is easier and cheaper
for the Administrative Committee to convene and conduct business
because of its reduced size. While the Board, with the proposed
changes, would still be larger than the current Administrative
Committee, the reduced membership under the proposed changes allows the
full Board to meet in lieu of the Administrative Committee. Meeting
more frequently addresses a major industry concern that only members of
committees, which make up the Administrative Committee, have sufficient
interaction with staff to fully understand the programs and activities
the Board implements. Although meeting more frequently may require a
greater time commitment from Board members, the Board believes the
benefits of this change would outweigh any additional burden on
members. Furthermore, as explained in the next section, USDA proposes
to amend the regulations to permit voting and balloting via electronic
methods, which is expected to increase the efficiency of the Board's
operations and make it easier for members to participate. By reducing
the Board size to a more reasonable number of members, the Board hopes
to include all members on committees to promote Board member
interaction and involvement. Therefore, the proposed changes would
indefinitely suspend the Administrative Committee.
[[Page 60601]]
USDA Proposed Changes
Under Sec. 1207.321(a), the term of office of Board members starts
on July 1, or such other date as may be specified in the regulations.
In 1973, USDA added Sec. 1207.504, which provided that the term of
office would instead start on April 1. In 1984, Sec. 1207.504 was
amended to require the term of office to start on March 1. Since then,
each member's term has started on March 1. USDA proposes to change the
start date in Sec. 1207.321(a) from July 1 to March 1 to match Sec.
1207.504 and be consistent with the current practice of the Board.
In Sec. 1207.325(c), the Plan provides that Board members may vote
on non-controversial matters and matters of an emergency nature when
there is not enough time to call an assembled meeting by mail,
telegraph, or telephone. USDA proposes changing this language to remove
the reference to telegraph as a means for voting and to allow for
voting by mail, electronic mail, facsimile, or any other means of
communication. In Sec. 1207.503(a), (b), and (c), the Plan provides
that producers and importers may nominate Board members at meetings or
by mail ballots. USDA proposes changing this language to allow ballots
to be submitted by mail, electronic mail, facsimile, or any other means
of communication. These proposed changes would modernize the sections
and increase accessibility to the voting and balloting processes by
providing additional options.
Initial Regulatory Flexibility Analysis
Pursuant to the requirements set forth in the Regulatory
Flexibility Act (RFA) (5 U.S.C. 601-612), 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 businesses subject
to such actions so that small businesses will not be unduly or
disproportionately burdened. The RFA requires, where feasible, an
estimate of the number of small businesses affected by the rule. This
regulatory flexibility analysis estimates a proportion of small
businesses where it is not feasible to estimate a number.
The Small Business Administration (SBA) has established size
standards that determine whether a business entity is a small business.
The size standards are based on the entity's economic activity, or
industry, and generally use the North American Industry Classification
System (NAICS). The size standards are expressed in annual receipts in
millions of dollars or in number of employees, and indicate the maximum
allowed for an entity to be considered a small business.
The SBA defines small potato producers as those having annual
receipts equal to or less than $4.25 million (Potato Farming, NAICS
code 111211). Small agricultural service firms (handlers and importers)
are defined as those having annual receipts equal to or less than $34
million (Postharvest Crop Activities, NAICS code 115114) (13 CFR
121.201). These were the numbers in effect when this initial regulatory
flexibility analysis was prepared in May 2023.
According to the Board, in 2021 there were approximately 1,500
producers and 955 handlers of potatoes. Since data was not available on
the number of producers that are small businesses according to the SBA
standard, this analysis computes an estimate of the number of small
farms using census data from the USDA's National Agricultural
Statistics Service (NASS). Producers that pay Board assessments have a
minimum of five acres of potatoes. The 2017 Agricultural Census (the
most recent census data available) reported 2,420 farms with five or
more harvested acres of potatoes, which is reasonably close to the
Board estimate of 1,500 producers that paid assessments in 2021.
NASS reported a 2022 U.S. potato crop value of $5,069,511,000 and
895,600 harvested acres (the most recent annual data available). The
estimated average value per harvested acre is $5,660 (obtained by
dividing the crop value of $5,069,511,000 by the number of acres,
895,600). Thus, on average, a farm would have to harvest 751 or fewer
acres of potatoes to meet the SBA's definition of a small business
(obtained by dividing the SBA threshold of $4.25 million by the
estimated 2022 average value per acre, $5,660).
According to the 2017 Agricultural Census, out of the 2,420 potato
farms with five or more harvested acres, 2,030 farms (84 percent)
harvested 749 or fewer acres, very close to the 751 or fewer acres in
the previous computation. Based on these computations, and assuming a
normal distribution, a large majority of potato farms paying
assessments to the Board are small businesses according to SBA
criteria.
As noted above, the SBA threshold size for a small agricultural
service business is $34 million in annual sales. The Board estimate of
the number of potato handlers in 2021 was 955. Dividing the $5.07
billion NASS crop revenue estimate by 955 yields an annual estimate of
potato sales per handler of approximately $5.3 million (farm level
value), which is well below $34 million, the SBA threshold size for a
small agricultural service business.
Potato handlers perform various procedures to get the potatoes to
market, including grading, sorting, packaging, and shipment. What
handlers are paid can be estimated by obtaining an annual average
shipping point price for potatoes from AMS Market News. AMS shipping
point prices capture the prices received by shippers (handlers) after
buying potatoes from growers, and then grading, sorting, packaging, and
shipping. The 2022 average AMS shipping point price received for
potatoes ($0.20 per pound) is 55 percent higher than the 2022 average
annual NASS price of $0.129 per pound received by growers. Adding 55
percent to the $5.3 million potato sales per handler at the farm level
yields an estimate of $8.2 million average annual sales at the handler
level, which is also well below the SBA small business threshold size
of $34 million or less in annual sales. Assuming a normal distribution,
a majority of potato handlers are small agricultural service
businesses, according to SBA criteria.
Based on a review of 2022 potato import data from U.S. Customs and
Border Protection, there were approximately 140 importers. Of those 140
importers, 130 (93 percent) had potato imports valued at $34 million or
less, the SBA size threshold for small agricultural service firms.
Therefore, 130 potato importers are small businesses in terms of potato
import value, using SBA business size criteria.
This proposal would amend Sec. Sec. 1207.320, 1207.321, 1207.322,
1207.325, and 1207.503, and suspend Sec. 1207.507. The changes would
modify the membership of the Board by revising the formula to determine
the number of seats on the Board and reducing the maximum number of
importer seats on the Board. The changes would also indefinitely
suspend the Administrative Committee, clarify the start date of the
term of office of Board members, and modernize the Board's voting and
balloting procedures.
This proposed rule would not impose any new costs on producers,
handlers, or importers. This proposal would also not impose any
additional reporting, recordkeeping, or information collection
requirements on affected entities. The proposed changes are
administrative in nature and would allow the Board to more effectively
carry out the requirements of the Plan while potentially reducing costs
and increasing participation. With these
[[Page 60602]]
changes, fewer individuals would be required to attend meetings,
reducing the time burden and costs associated with traveling and
attending meetings. Further, modernizing the Board's procedures to
authorize additional methods for casting votes and ballots could help
increase participation.
The Board considered taking no action and continuing to experience
significant membership vacancies. The Board decided against this option
because vacancies have become pervasive. Therefore, these alternatives
were rejected.
As with all Federal promotion programs, reports and forms are
periodically reviewed to reduce information requirements and
duplication by industry and public sector agencies. USDA has not
identified any relevant Federal rules that duplicate, overlap, or
conflict with this proposed 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.
Regarding outreach efforts, all the Board's meetings, including the
March 9, 2022, meeting during which the Board recommendations relevant
to this action were discussed, are open to the public and interested
persons are invited to participate and express their views. No concerns
were raised in these meetings about the changes proposed in this
document.
We have performed this initial regulatory flexibility analysis
regarding the impact of this proposed action on small entities, and we
invite comments concerning potential effects of this action on small
businesses.
While this proposed rule as set forth below has not yet received
the approval of USDA, it has been determined that it is consistent with
and would effectuate the purposes of the Act.
A 30-day comment period is provided to allow interested persons to
respond to this proposal. All written comments received in response to
this proposed rule will be considered prior to finalizing this action.
List of Subjects in 7 CFR Part 1207
Advertising, Agricultural research, Potatoes, Reporting and
recordkeeping requirements.
For the reasons stated in the preamble, the Agricultural Marketing
Service proposes to amend 7 CFR part 1207 as follows:
PART 1207--POTATO RESEARCH AND PROMOTION PLAN
0
1. The authority citation for 7 CFR part 1207 continues to read as
follows:
Authority: 7 U.S.C. 2611-2627; 7 U.S.C. 7401.
0
2. Amend Sec. 1207.320 by revising paragraphs (b) and (c) to read as
follows:
Sec. 1207.320 Establishment and membership.
* * * * *
(b) Producer membership upon the Board shall be determined on the
basis of the potato production reported in the latest Crop Production
Annual Summary Report issued by the National Agricultural Statistics
Service of the U.S. Department of Agriculture. If a State's potato
production data is not provided by the National Agricultural Statistics
Service, the Board may use an alternative data source that reliably
reflects potato production in the United States. Unless the Secretary,
upon recommendation of the Board, determines an alternate basis, for
each 10 million hundredweight of such production, or major fraction
thereof, produced within each State, such State shall be entitled to
one member. However, each State shall initially be entitled to at least
one member.
(c) The number of importer member positions on the Board shall be
based on the hundredweights of potatoes, potato products equivalent to
fresh potatoes, and seed potatoes imported into the United States but
shall not exceed two importer members. Unless the Secretary, upon
recommendation of the Board, determines an alternate basis, there shall
be one importer member position for each 10 million hundredweight, or
major fraction thereof, of potatoes, potato product equivalents, and
seed potatoes imported into the United States.
* * * * *
0
3. Amend Sec. 1207.321 by revising paragraph (a) to read as follows:
Sec. 1207.321 Term of office.
(a) The term of office of Board members shall be 3 years, beginning
March 1, or such other beginning date as may be approved pursuant to
regulations.
* * * * *
0
4. Amend Sec. 1207.322 by revising paragraph (d) to read as follows:
Sec. 1207.322 Nominations and appointment.
* * * * *
(d) The importer members shall be nominated by importers of
potatoes, potato products and/or seed potatoes. The number of importer
members on the Board shall be announced by the Secretary and shall not
exceed two members. The Board may call upon organizations of potato,
potato products and/or seed potato importers to assist in nominating
importers for membership on the Board. If such organizations fail to
submit nominees or are determined by the Board to not adequately
represent importers, then the Board may conduct meetings of importers
to nominate eligible importers for Board member positions. In
determining if importer organizations adequately represent importers,
the Board shall consider:
(1) How many importers belong to the association;
(2) What percentage of the total number of importers is represented
by the association;
(3) Is the association representative of the potato, potato
product, and seed potato import industry;
(4) Does the association speak for potato, potato product, and seed
potato importers; and
(5) Other relevant information as may be warranted.
* * * * *
0
5. Amend Sec. 1207.325 by revising paragraph (c) to read as follows:
Sec. 1207.325 Procedure.
* * * * *
(c) For routine and noncontroversial matters which do not require
deliberation and the exchange of views, and for matters of an emergency
nature when there is not enough time to call an assembled meeting, the
Board may act upon a majority of concurring votes of its members cast
by mail, telephone, electronic mail, facsimile, or any other means of
communication. Any vote cast by telephone shall be confirmed promptly
in writing.
0
6. Amend Sec. 1207.503 by revising paragraphs (a), (b), and (c) to
read as follows:
Sec. 1207.503 Nominations.
(a) Pursuant to Sec. 1207.322 of the plan, the Board shall assist
producers in producing sections or States each year to nominate
producer members for the Board. Such nominations may be conducted at
meetings or with ballots submitted by mail, electronic mail, facsimile,
or any other means of communication. One individual shall be nominated
for each position to become vacant. A list of nominees shall be
submitted to the Secretary for consideration by November 1 of each
year.
(b) Pursuant to Sec. 1207.322 of the plan, the Board shall assist
importers each year to nominate importer members for
[[Page 60603]]
the Board. Such nominations may be conducted at meetings or with
ballots submitted by mail, electronic mail, facsimile, or any other
means of communication.
(c) Nomination meetings or balloting by mail, electronic mail,
facsimile, or any other means of communication shall be well publicized
with notice given to producers, importers, and the Secretary at least
10 days prior to each meeting or distribution of ballots.
* * * * *
Sec. 1207.507 [Stayed]
0
7. Stay Sec. 1207.507 indefinitely.
Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2023-19003 Filed 9-1-23; 8:45 am]
BILLING CODE 3410-02-P
