[Federal Register: July 20, 2005 (Volume 70, Number 138)]
[Rules and Regulations]
[Page 41605-41608]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20jy05-2]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 955
[Docket No. FV05-955-1 FIR]
Vidalia Onions Grown in Georgia; Increased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: The Department of Agriculture (USDA) is adopting, as a final
rule, without change, an interim final rule which increased the
assessment rate and changed the assessable unit established for the
Vidalia Onion Committee (Committee) for the 2005 and subsequent fiscal
periods from $0.12 per 50-pound bag or equivalent to $0.10 per 40-pound
carton of Vidalia onions. The assessment rate of $0.10 per 40-pound
carton is $0.0001 per pound more than the assessment rate previously in
effect. The Committee locally administers the marketing order which
regulates the handling of Vidalia onions grown in Georgia.
Authorization to assess Vidalia onion handlers enables the Committee to
incur expenses that are reasonable and necessary to administer the
program. The fiscal period began January 1 and ends December 31. The
assessment rate will remain in effect indefinitely unless modified,
suspended, or terminated.
EFFECTIVE DATE: August 19, 2005.
FOR FURTHER INFORMATION CONTACT: Doris Jamieson, Southeast Marketing
Field Office, Marketing Order Administration Branch, Fruit and
Vegetable Programs, AMS, USDA, 799 Overlook Drive, Suite A, Winter
Haven, Florida 33884-1671; Telephone: (863) 324-3375, Fax: (863) 325-
8793; or George Kelhart, Technical Advisor, 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.
[[Page 41606]]
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
Agreement and Marketing Order No. 955, both as amended (7 CFR part
955), regulating the handling of Vidalia onions grown in Georgia,
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.''
USDA is issuing this rule in conformance with Executive Order
12866.
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. Under the marketing order now in effect, Vidalia onion
handlers are subject to assessments. Funds to administer the order are
derived from such assessments. It is intended that the assessment rate
as issued herein will be applicable to all assessable Vidalia onions
beginning January 1, 2005, and continue until amended, suspended, or
terminated. 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. Such
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.
This rule continues in effect the action that increased the
assessment rate and changed the assessable unit established for the
Vidalia Onion Committee (Committee) for the 2005 and subsequent fiscal
periods from $0.12 per 50-pound bag or equivalent to $0.10 per 40-pound
carton of Vidalia onions. The assessment rate of $0.10 per 40-pound
carton is $0.0001 per pound more than the assessment rate previously in
effect.
The Vidalia onion order provides authority for the Committee, with
the approval of USDA, to formulate an annual budget of expenses and
collect assessments from handlers to administer the program. The
members of the Committee are producers and handlers of Vidalia onions.
They are familiar with the Committee's needs and with the costs for
goods and services in their local area and are thus in a position to
formulate an appropriate budget and assessment rate. The assessment
rate is formulated and discussed in a public meeting. Thus, all
directly affected persons have an opportunity to participate and
provide input.
For the 2001-02 and subsequent fiscal periods, the Committee
recommended, and USDA approved, an assessment rate of $0.12 per 50-
pound bag or equivalent that would continue in effect from 2001 and
subsequent fiscal periods unless modified, suspended, or terminated by
USDA upon recommendation and information submitted by the Committee or
other information available to USDA.
The Committee met December 15, 2004, and unanimously recommended
2005 expenditures of $450,300 and an assessment rate of $0.10 per 40-
pound carton of Vidalia onions. In comparison, last year's budgeted
expenditures were $312,215. The assessment rate of $0.10 per 40-pound
carton is $0.0001 per pound more than the rate currently in effect. The
increase in the assessment rate is based on the reduction in size of
the assessable unit from 50-pounds to 40-pounds. Although the reduction
in size of the assessable unit increases the number of assessable
cartons, it only slightly increases the actual assessment per pound of
Vidalia onions handled from $0.0024 per pound to $0.0025 per pound.
The major expenditures recommended by the Committee for the 2005
year include $92,500 for salaries and benefits, $59,800 for
administrative expenses, $290,000 for marketing expenses, $5,000 for
research expenses, and $3,000 for compliance. Budgeted expenses for
these items in 2004 were $66,280, $237,435, $7,500, $1000, and $0,
respectively.
The assessment rate recommended by the Committee was derived by
multiplying the assessment rate by the number of 40-pound cartons of
Vidalia onions the industry is expected to ship for the 2005 fiscal
period, and took into consideration the availability of matching funds
for research and promotion from the State of Georgia. Vidalia onion
shipments for the 2005 fiscal period are estimated at 3,350,000 40-
pound cartons which should provide $335,000 in assessment income.
Income derived from handler assessments, interest income ($3,000),
contributions from the Georgia Department of Agriculture ($150,000),
and income from the sale of Point-of-Sale advertisement material
($6,000) will be adequate to cover budgeted expenses. Funds in the
reserve (currently $67,331) will be kept within the maximum permitted
by the order, which is three fiscal periods' budgeted expenses (Sec.
955.44).
The assessment rate established in this rule will continue in
effect indefinitely unless modified, suspended, or terminated by USDA
upon recommendation and information submitted by the Committee or other
available information.
Although this assessment rate is effective for an indefinite
period, the Committee will continue to meet prior to or during each
fiscal period to recommend a budget of expenses and consider
recommendations for modification of the assessment rate. The dates and
times of Committee meetings are available from the Committee or USDA.
Committee meetings are open to the public and interested persons may
express their views at these meetings. USDA will evaluate Committee
recommendations and other available information to determine whether
modification of the assessment rate is needed. Further rulemaking will
be undertaken as necessary. The Committee's 2005 budget and those for
subsequent fiscal periods will be reviewed and, as appropriate,
approved by USDA.
Final Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), the Agricultural Marketing Service (AMS) has considered the
economic impact of this rule on small entities. Accordingly, AMS has
prepared this final regulatory flexibility analysis.
The purpose of the RFA is to fit regulatory actions to the scale of
business subject to such actions in order that small businesses will
not be unduly or disproportionately burdened. Marketing orders issued
pursuant to the Act, and the rules issued thereunder, are unique in
that they are brought about through group action of essentially small
entities acting on their own behalf. Thus, both statutes have small
entity orientation and compatibility.
[[Page 41607]]
There are approximately 145 producers of Vidalia onions in the
production area and approximately 110 handlers subject to regulation
under the marketing order. Small agricultural producers are defined by
the Small Business Administration (13 CFR 121.201) as those having
annual receipts of less than $750,000, and small agricultural service
firms, which include handlers, are defined as those whose annual
receipts are less than $6,000,000.
Based on information from the Georgia Agricultural Statistical
Service and Committee data, around 90 percent of Vidalia onion handlers
ship under $5,000,000 worth of onions on an annual basis. In addition,
based on acreage, production, grower prices reported by the National
Agricultural Statistics Service, and the total number of Vidalia onion
growers, the average annual grower revenue is approximately $489,000.
Thus, the majority of handlers and producers of Vidalia onions may be
classified as small entities.
This rule continues in effect the action that increased the
assessment rate and changed the assessable unit from $0.12 per 50-pound
bag or equivalent to $0.10 per 40-pound carton of Vidalia onions for
the 2005 and subsequent fiscal periods. The Committee unanimously
recommended 2005 expenditures of $450,300 and an assessment rate of
$0.10 per 40-pound carton of Vidalia onions. The assessment rate of
$0.10 per 40-pound carton is $0.0001 per pound higher than the $0.12
per 50-pound bag or equivalent assessment rate in effect during 2004.
The quantity of assessable Vidalia onions for the 2005 season is
estimated at 3,350,000 40-pound cartons. Thus, the $0.10 per 40-pound
carton rate should provide $335,000 in assessment income. Income
derived from handler assessments, interest income ($3,000),
contributions from the Georgia Department of Agriculture ($150,000),
and income from the sale of Point-of-Sale advertisement material
($6,000) will be adequate to cover budgeted expenses.
The major expenditures recommended by the Committee for the 2005
year include $92,500 for salaries, $59,800 for administrative expenses,
$290,000 for marketing expenses, $5,000 for research expenses, and
$3,000 for compliance. Budgeted expenses for these items in 2004 were
$66,280, $237,435, $7,500, $1,000, and $0, respectively.
The Committee at its December 15, 2004, meeting unanimously
recommended reducing the assessable carton size from a 50-pound bag or
equivalent to the current industry standard 40-pound carton size. The
reduction in the assessable unit size increases the number of
assessable units. The assessable unit size reduction also causes a
slight increase in the actual per pound rate of assessment from $0.0024
to $0.0025, or an increase of $0.0001 per pound.
The Committee reviewed and unanimously recommended 2005
expenditures of $450,300 which included increases in marketing,
compliance, administrative expenses, and research programs. Prior to
arriving at this budget, the Committee considered information from
various sources. Alternative expenditure levels were discussed by the
Committee based upon the relative value of various research and
promotion projects to the Vidalia onion industry. The Committee also
discussed keeping the current $0.12 per 50-pound bag or equivalent
assessment rate. The Committee believes, however, that using the
current industry standard unit of 40-pounds will increase efficiency by
saving handlers the considerable time and expense previously spent in
converting 40-pound units to the 50-pound assessment rate unit. The
Committee also felt that the slight increase of $0.0001 per pound in
assessments is insignificant when considering the benefits of using the
industry standard unit. Thus, the assessment rate of $0.10 per 40-pound
carton of assessable Vidalia onions was approved unanimously. The
expected income was derived by multiplying the assessment rate by the
estimated number of 40-pound cartons the industry expects to ship for
the 2005 season. Also available for expenditure are interest income and
matching funds from the State of Georgia (for expenditures pursuant to
Sec. 955.50; production research, marketing research development, and
marketing promotion, including paid advertising).
A review of historical information and preliminary information
pertaining to the upcoming fiscal period indicates that the grower
price for the 2005 season could range between $13.75 and $17.15 per 40-
pound carton of Vidalia onions. Therefore, the estimated assessment
revenue for the 2005 fiscal period as a percentage of total grower
revenue could range between 0.58 and 0.73 percent.
This action continues in effect the action that increased the
assessment obligation imposed on handlers. While assessments impose
some additional costs on handlers, the costs are minimal and uniform on
all handlers. Some of the additional costs may be passed on to
producers. However, these costs are offset by the benefits derived by
the operation of the marketing order. As noted earlier, the savings in
time and expense previously spent on converting the industry standard
40-pound carton to the 50-pound unit used by the Committee more than
offsets the negligible assessment increase of $0.0001 per pound of
onions handled. In addition, the Committee's meeting was widely
publicized throughout the Vidalia onion industry and all interested
persons were invited to attend the meeting and participate in Committee
deliberations on all issues. Like all Committee meetings, the December
15, 2004, meeting was a public meeting and all entities, both large and
small, were able to express views on this issue.
This action imposes no additional reporting or recordkeeping
requirements on either small or large Vidalia onion 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.
USDA has not identified any relevant Federal rules that duplicate,
overlap, or conflict with this rule.
An interim final rule concerning this action was published in the
Federal Register on March 8, 2005 (70 FR 11114). Copies of that rule
were also mailed or sent via facsimile to all Vidalia onion handlers.
Finally, the interim final rule was made available through the Internet
by USDA and the Office of the Federal Register. A 60-day comment period
was provided for interested persons to respond to the interim final
rule. The comment period ended on May 9, 2005. One comment was
received.
The commenter stated that agricultural industry participants do not
need government financial support to compete. However, the purpose of
this action is to establish the assessment collection rate imposed on
handlers, which enables the Committee to incur expenses to administer
the program. Therefore, no changes will be made as a result of the
comment.
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/fv/moab.html.
Any questions about the compliance
guide should be sent to Jay Guerber at the previously mentioned address
in the FOR FURTHER INFORMATION CONTACT section.
After consideration of all relevant material presented, including
the information and recommendation
[[Page 41608]]
submitted by the Committee and other available information, it is
hereby found that this rule, as hereinafter set forth, will tend to
effectuate the declared policy of the Act.
List of Subjects in 7 CFR Part 955
Onions, Marketing agreements, Reporting and recordkeeping
requirements.
PART 955--VIDALIA ONIONS GROWN IN GEORGIA
0
Accordingly, the interim final rule amending 7 CFR part 955 which was
published at 70 FR 11114 on March 8, 2005, is adopted as a final rule
without change.
Dated: July 14, 2005.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 05-14261 Filed 7-19-05; 8:45 am]
BILLING CODE 3410-02-P