[Federal Register: August 28, 2007 (Volume 72, Number 166)]
[Rules and Regulations]
[Page 49136-49139]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28au07-4]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 959
[Docket No. AMS-FV-06-0214; FV07-959-1 FIR]
Onions Grown in South Texas; Change in Regulatory Period
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 revising the regulatory
period for minimum grade, size, quality, and maturity requirements
applicable to onions grown in South Texas under Marketing Order No. 959
(order). Prior to implementation of the interim final rule, the
regulatory period for South Texas onions was March 1 through June 4 of
each year. Changes in available varieties, growing seasons, and
marketing opportunities over the years have resulted in a prolonged
onion shipping season that now extends beyond June 4 into mid-July.
This rule continues in effect the action that extended the regulatory
period through July 15. The South Texas Onion Committee (Committee),
which locally administers the order, unanimously recommended the
change.
EFFECTIVE DATE: September 27, 2007.
FOR FURTHER INFORMATION CONTACT: Belinda G. Garza, Regional Manager,
Texas Marketing Field Office, Marketing Order Administration Branch,
Fruit and Vegetable Programs, AMS, USDA; Telephone: (956) 682-2833,
Fax: (956) 682-5942, or E-mail: Belinda.Garza@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
Agreement No. 143 and Order No. 959, both as amended (7 CFR part 959),
regulating the handling of onions grown in South Texas, 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. 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
[[Page 49137]]
the petition, provided an action is filed not later than 20 days after
the date of the entry of the ruling.
This action, which was unanimously recommended by the Committee,
continues in effect the action that extended the regulatory period when
minimum grade, size, quality, and maturity requirements apply to onions
grown under the order in South Texas.
Under the terms of the order, fresh market shipments of onions
grown in a 35-county production area in South Texas were, prior to
implementation of the interim final rule, subject to handling
regulations during the period March 1 through June 4 of each year.
According to the Committee, changes in available varieties, growing
seasons, and marketing opportunities over the years have resulted in a
prolonged onion shipping season that extended beyond June 4 into mid-
July. Because the previous regulatory period did not cover the
production season completely, not all onion shipments occurring after
June 4 were subject to order requirements.
According to USDA Market News data, 40 percent of South Texas
onions shipped in 2005 from District 2, or roughly 11 percent of total
shipments for the production area, occurred after June 4. In 2006, 30
percent of onions shipped from District 2, or approximately 10 percent
of total shipments for the production area, were shipped after June 4.
Section 959.110 of the order's rules and regulations apportions the
35 counties between two onion-growing areas known as District 1,
designated as the Coastal Bend-Lower Valley area, and District 2,
designated as the Laredo-Winter Garden area. District 1 is comprised of
the counties of Victoria, Calhoun, Goliad, Refugio, Bee, Live Oak, San
Patricio, Aransas, Jim Wells, Nueces, Kleberg, Brooks, Kenedy, Duval,
McMullen, Cameron, Hidalgo, Starr, and Willacy. District 2 includes the
counties of Zapata, Webb, Jim Hogg, De Witt, Wilson, Atascosa, Karnes,
Val Verde, Frio, Kinney, Uvalde, Medina, Maverick, Zavala, Dimmit, and
LaSalle.
Section 959.52(b) of the order provides authority to limit the
handling of any grade, size, quality, maturity, or pack of onions
within the production area during any period. Section 959.322 outlines
the regulatory requirements authorized under Sec. 959.52(b). Such
grade requirements are based on the U.S. Standards for Grades of
Bermuda-Granex-Grano Type Onions (7 CFR part 51.3195-3212), or the U.S.
Standards for Grades of Onions (Other than Bermuda-Granex-Grano and
Creole Types) (7 CFR part 51.2830-2854).
Currently, these handling regulations provide that shipments may
not exceed 20 percent defects of U.S. No. 1 grade. In percentage grade
lots, tolerances for serious damage shall not exceed 10 percent
including not more than 2 percent decay. Double the lot tolerance is
permitted in individual packages in percentage grade lots. Applications
of tolerances in U.S. onion standards apply to in-grade lots.
Minimum size requirements for different size designations are
outlined in the regulations. Specifically, for white onions only, the
minimum diameter is 1 inch to 2\1/4\ inches maximum diameter. For other
than white onions, the minimum diameter for repacker onions is 1\3/4\
inches to 3 inches maximum with 60 percent or more 2 inches in diameter
or larger, 2 to 3\1/2\ inches for medium, 3 inches or larger for jumbo
or large onions, and 3\3/4\ inches or larger for colossal.
The regulations further specify that tolerances for size in the
U.S. onion standards shall apply except that for repacker and medium
sizes, not more than 20 percent, by weight, of onions in any lot may be
larger than the maximum diameter specified.
The previous South Texas regulatory period during which the
aforementioned regulations were in effect ran from March 1 through June
4, annually. A final rule published on May 17, 1996 (61 FR 24877),
established that regulatory period to promote the orderly marketing of
onions.
Extending the end date of the regulatory period from June 4 to July
15 each year provides the consumer with quality onions for a longer
period of time because the entire production area will be regulated
throughout its shipping period. Normally, South Texas onion handlers
continued to voluntarily request inspection of their onions after June
4 to ensure product quality past the previous regulatory period.
Because the industry was already voluntarily having their onions
inspected, the extension is not expected to negatively impact the
industry and this change aligns order requirements with actual industry
operations.
Collecting assessments for an additional five weeks provides the
Committee with additional assessment revenue. Based on USDA Market News
shipment 2005 data, an additional 1,086,600 fifty-pound equivalent
cartons would have been assessed if the extended regulatory period had
been in effect. At the current assessment rate of $0.02 per carton,
this amount would have generated an additional $21,732 in assessment
revenue. Similarly, Market News data for 2006 indicates that an
additional 863,400 cartons would have been assessed between June 4 and
July 15, and would have resulted in $17,268 of additional assessment
revenue.
The additional revenue collected as a result of an extended
regulatory period in 2007 allows the Committee to further promote
onions and conduct more research projects, making it advantageous to
the industry as well as the consumer. All producers will realize a
better return for a quality pack through research and market
development projects funded by the collection of assessments through
July 15.
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 action 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 so 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. Small agricultural growers have been
defined by the Small Business Administration (SBA) (13 CFR 121.201) as
those having annual receipts of less than $750,000. Small agricultural
service firms are defined as those with annual receipts of less than
$6,500,000.
There are approximately 114 producers of onions in the production
area and approximately 38 handlers subject to regulation under the
order.
Most of the handlers are vertically integrated corporations
involved in producing, shipping, and marketing onions. For the 2005-06
marketing year, the industry's 38 handlers shipped onions produced on
17,694 acres with the average and median volume handled being 182,148
and 174,437 fifty-pound equivalents, respectively. In terms of
production value, total revenues for the 38 handlers were estimated to
be $44.2 million, with average and median revenues being $1.6 million
and $1.12 million, respectively.
The South Texas onion industry is characterized by producers and
handlers whose farming operations generally involve more than one
commodity, and whose income from farming operations is not exclusively
dependent on the production of onions. Alternative crops provide an
opportunity to utilize many of the same
[[Page 49138]]
facilities and equipment not in use when the onion production season is
complete. For this reason, typical onion producers and handlers either
produce multiple crops or alternate crops within a single year.
Based on the SBA's definition of small entities, the Committee
estimates that all of the 38 handlers regulated by the order would be
considered small entities if only their onion revenues are considered.
However, revenues from other productive enterprises would likely push a
number of these handlers above the $6,500,000 annual receipt threshold.
All of the 114 producers may be classified as small entities based on
the SBA definition if only their revenue from onions is considered.
This rule continues in effect the action that extended the end date
of the order's regulatory period from June 4 to July 15 of each year
for Texas onions shipped to the fresh market. This action, which was
unanimously recommended by the Committee, continues in effect the
action that extended the regulatory period when minimum grade, size,
quality, and maturity requirements apply to onions grown under the
order. Authorization to implement such regulations is provided in Sec.
959.52(b) of the order. Regulatory requirements authorized under this
section are provided in Sec. 959.322.
This action provides that fresh onion shipments from the entire
South Texas onion production area will meet all order requirements from
March 1 through July 15 of each year. Prior to implementation of the
interim final rule, the regulations required that onions grown in the
production area meet order requirements from March 1 through June 4 of
each year.
According to the Committee, changes in available varieties, growing
seasons, and marketing opportunities over the years have resulted in a
prolonged onion shipping season that extended beyond June 4 into mid-
July. Because the previous regulatory period did not cover the
production season completely, not all onion shipments occurring after
June 4 were subject to mandatory inspection under the order. Extending
the regulatory period ensures that all South Texas onions will be
inspected to order specifications.
Prior to implementation of the interim final rule, many South Texas
onion handlers voluntarily requested inspection of their onions after
June 4 to ensure product quality. Because the industry was already
voluntarily having their onions inspected, the extension is not
expected to negatively impact the industry and this change aligns order
requirements with present day industry operations.
According to USDA Market News data, 40 percent of South Texas
onions shipped in 2005 from District 2, or roughly 11 percent of total
shipments for the production area, occurred after June 4. In 2006, 30
percent of onions shipped from District 2, or approximately 10 percent
of total shipments for the production area, were shipped after June 4.
This action is also expected to support Committee promotional and
research activities and benefit consumers. The Committee has indicated
that collecting assessments for an additional five weeks will provide
them with additional assessment revenue.
Based on USDA Market News shipment 2005 data, an additional
1,086,600 fifty-pound equivalent cartons would have been assessed if
the extended regulatory period had then been in effect. At the current
assessment rate of $0.02 per carton, this amount would have generated
an additional $21,732 in assessment revenue. Similarly, Market News
data for 2006 indicates that an additional 863,400 cartons would have
been assessed between June 4 and July 15, 2006, and would have resulted
in $17,268 of additional assessment revenue.
The additional revenue allows the Committee to further promote
onions and conduct more research projects, making it advantageous to
the industry as well as the consumer. All producers will realize a
better return for a quality pack through research and market
development projects funded by the collection of assessments through
July 15.
The additional five weeks of assessment collection is not expected
to significantly burden South Texas onion handlers. A burden
calculation of the additional assessments that would have been
collected in 2006 if the regulatory period had been in effect for that
season indicates that the additional assessment payments by handlers
would have equaled 0.039 percent of the total of 2006 production value
[($17,268/$44.2 million) x 100 = 0.039]. Total 2006 revenues for the 38
handlers were estimated to be $44.2 million, with average and median
revenues being $1.6 million and $1.12 million, respectively.
Extending the end date of the regulatory period from June 4 to July
15 each year will also provide the consumer with quality onions for a
longer period of time because the entire production area will be
regulated throughout its shipping period.
One alternative to this action would have been to not extend the
regulatory period beyond the prior end date of June 4. However, the
Committee believed that not extending the regulatory period would have
resulted in a significant portion of the South Texas onion crop not
being consistently regulated.
While most handlers were extending inspection beyond the June 4
regulatory deadline on a voluntary basis, such inspection was not
required. By extending the regulatory period, such inspection became
mandatory. Mandatory inspection ensures orderly marketing of all South
Texas onions since all handlers and product will be required to fulfill
the same inspection requirements and product standards under the order
for the entire production period. Therefore, USDA determined that the
end date of the regulatory period for South Texas onions should be
extended from June 4 to July 15.
While this action will impose some additional costs on South Texas
onion handlers and producers, the costs are expected to be minimal, and
will be offset by the benefits of the action. The Committee believes
that this modification benefits consumers, producers, and handlers. The
benefits of this action are not expected to be disproportionately
greater or lesser for small entities than for large entities.
This rule will not impose any additional reporting or recordkeeping
requirements on either small or large 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. In addition, as noted in the initial
regulatory flexibility analysis, USDA has not identified any relevant
Federal rules that duplicate, overlap or conflict with this rule.
The 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 South Texas onion industry and all interested persons were invited
to attend the meeting and participate in Committee deliberations. All
Committee meetings were public meetings and all entities, both large
and small, were able to express their views. Furthermore, interested
persons were invited to submit information on the regulatory and
informational impacts of this action on small businesses.
[[Page 49139]]
An interim final rule concerning this action was published in the
Federal Register on May 7, 2007. Copies of the rule were mailed by the
Committee's staff to all Committee members, onion handlers, and
interested persons. In addition, the rule was made available through
the Internet by USDA and the Office of the Federal Register. That rule
provided for a 60-day comment period which ended July 6, 2007. No
comments were received.
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.
This rule continues in effect the action that extended the
regulatory period under the South Texas onion marketing order.
After consideration of all relevant material presented, including
the Committee's recommendation, and other information, it is found that
finalizing the interim final rule, without change, as published in the
Federal Register (72 FR 25677, May 7, 2007) will tend to effectuate the
declared policy of the Act.
List of Subjects in 7 CFR Part 959
Onions, Marketing agreements, Reporting and recordkeeping
requirements.
PART 959--ONIONS GROWN IN SOUTH TEXAS
Accordingly, the interim final rule amending 7 CFR part 959 which
was published at 72 FR 25677 on May 7, 2007, is adopted as a final rule
without change.
Dated: August 21, 2007.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 07-4162 Filed 8-27-07; 8:45 am]
BILLING CODE 3410-02-M