[Federal Register: March 14, 2008 (Volume 73, Number 51)]
[Proposed Rules]
[Page 13798-13800]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14mr08-14]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 956
[Docket No. AMS-FV-07-0157; FV08-956-1 PR]
Sweet Onions Grown in the Walla Walla Valley of Southeast
Washington and Northeast Oregon; Increased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This rule would increase the assessment rate established for
the Walla Walla Sweet Onion Marketing Committee (Committee) for the
2008 and subsequent fiscal periods from $0.21 to $0.22 per 50-pound bag
or equivalent of Walla Walla sweet onions handled. The Committee
locally administers the marketing order which regulates the handling of
sweet onions grown in the Walla Walla Valley of Southeast Washington
and Northeast Oregon. Assessments upon Walla Walla sweet onion handlers
are used by the Committee to fund the reasonable and necessary expenses
of the program. The fiscal period begins January 1 and ends December
31. The assessment rate would remain in effect indefinitely unless
modified, suspended, or terminated.
DATES: Comments must be received by May 13, 2008.
ADDRESSES: Interested persons are invited to submit written comments
concerning this proposal. Comments should be sent to the Docket Clerk,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC
20250-0237; Fax: (202) 720-8938, or Internet: http://
www.regulations.gov. Comments should reference the docket number and
the date and page number of this issue of the Federal Register and will
be available for public inspection in the Office of the Docket Clerk
during regular business hours, or can be viewed at: http://
www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Barry Broadbent or Gary Olson,
Northwest Marketing Field Office, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, 1220 SW. Third Avenue,
Suite 385, Portland, OR 97204; Telephone: (503) 326-2724, Fax: (503)
326-7440, or E-mail: Barry.Broadbent@usda.gov or GaryD.Olson@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 and Order No. 956, both as amended (7 CFR part 956),
regulating the handling of Walla Walla sweet onions grown in Southeast
Washington and Northeast Oregon, 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.''
The Department of Agriculture (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, Walla Walla
sweet onion handlers are subject to assessments. Funds to administer
the order are derived from such assessments. It is intended that the
assessment rate, as proposed herein, would be applicable to all
assessable Walla Walla sweet onions beginning on January 1, 2008, 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 would increase the assessment rate established for the
Committee for the 2008 and subsequent fiscal periods from $0.21 to
$0.22 per 50-pound bag or equivalent of Walla Walla sweet onions
handled.
The Walla Walla sweet onion marketing 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
[[Page 13799]]
producers and handlers of Walla Walla sweet 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 1998-1999 and subsequent fiscal periods, the Committee
recommended, and USDA approved, an assessment rate of $0.21 per 50-
pound bag or equivalent that would continue in effect indefinitely
unless modified, suspended, or terminated by USDA upon the basis of the
Committee's recommendation or other information available to USDA.
On December 11, 2007, the Committee met and unanimously recommended
2008 expenditures of $116,255 and a $0.01 increase in the assessment
rate from $0.21 to $0.22 per 50-pound bag or equivalent. In comparison,
the budgeted expenditures for the 2007 fiscal period were $139,210.
The increase in the assessment rate is necessary to offset the
recent decline in assessments paid by handlers. Assessment receipts
have decreased as the production levels of Walla Walla sweet onions
have dropped below historical averages--a result of lower total acreage
planted and isolated weather related crop failures. In response to the
lower assessment income level, the Committee reduced the total budgeted
expenditures from $139,210 in 2007 to $116,255 for 2008, but still
found it necessary to increase the assessment rate to adequately fund
Committee operations.
The major expenditures recommended by the Committee for the 2008
fiscal year include $62,732 for administration, $5,000 for travel,
$44,000 for promotion, and $2,000 for compliance. Budgeted expenses for
these items in 2007 was $62,477, $5,000, $63,300, and $1,000,
respectively.
The assessment rate recommended by the Committee was derived at by
dividing anticipated expenses by expected shipments of Walla Walla
sweet onions from the production area. Walla Walla sweet onion
shipments are estimated to be 510,250 50-pound bags or equivalents for
the 2008 fiscal period, which should provide $112,255 in assessment
income. The remaining difference between the anticipated Committee
expenses and the anticipated revenue from assessments is expected to
come from interest income on reserve funds ($4,000). Funds held in
reserve by the Committee (currently $144,953) are not expected to
exceed the equivalent of two fiscal periods budgeted expenditures, the
maximum permitted by the order.
The proposed assessment rate would 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 would be in effect for an indefinite
period, the Committee would 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 would evaluate Committee
recommendations and other available information to determine whether
modification of the assessment rate is needed. Further rulemaking would
be undertaken as necessary. The Committee's 2008 budget, and those for
subsequent fiscal periods, would be reviewed and, as appropriate,
approved by USDA.
Initial 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 initial 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.
There are approximately 42 producers of Walla Walla sweet onions in
the production area and approximately 20 handlers subject to regulation
under the marketing order. Small agricultural producers are defined by
the Small Business Administration (13 CFR 121.201) (SBA) as those
having annual receipts less than $750,000, and small agricultural
service firms are defined as those whose annual receipts are less than
$6,500,000.
The Committee estimates that in 2007, 494,918 50-pound units of
Walla Walla sweet onions were marketed at an average FOB price of
approximately $19.00 per 50-pound unit. Using that price as a basis,
the total industry value at shipping point was approximately
$9,400,000. Average receipts per handler were $470,000, which is much
less than the threshold the SBA uses to define a small service firm.
Average receipts for the 42 producers of Walla Walla sweet onions for
last year was approximately $225,000, well within the SBA definition of
small agricultural producer. Thus, it can be concluded that most, if
not all, handlers and producers of Walla Walla sweet onions may be
classified as small entities based on the definition of the SBA.
This rule would increase the assessment rate established for the
Committee and collected from handlers for the 2008 and subsequent
fiscal periods from $0.21 to $0.22 per 50-pound bag or equivalent. The
Committee unanimously recommended 2008 expenditures of $116,255 and an
assessment rate of $0.22 per 50-pound bag or equivalent. The proposed
assessment rate of $0.22 is $0.01 higher than the rate previously
established in the order. The quantity of assessable Walla Walla sweet
onions for the 2008 year is estimated at 510,250 50-pound bags or
equivalents. Thus, the $0.22 rate should provide $112,255 in assessment
income and, along with $4,000 in interest income, would be adequate to
meet this year's budgeted expenses of $116,255.
The major expenditures recommended by the Committee for the 2008
year include $62,732 for administration, $5,000 for travel, $44,000 for
promotion, and $2,000 for compliance. Budgeted expenses for these items
in 2007 was $62,477, $5,000, $63,300, and $1,000, respectively.
The recent decline in assessments collected from handlers has
necessitated this assessment rate increase. Assessment income has
decreased as the production levels of Walla Walla sweet onions have
dropped below historical average levels as a result of lower total
acreage planted and isolated weather related crop failures. In response
to the lower assessment income level, the Committee reduced its total
budgeted expenditures from $139,210 in 2007 to $116,255 for 2008, but
still found it necessary to increase the assessment rate to adequately
fund Committee operations without depleting the Committee's reserve
funds.
The Committee reviewed and unanimously recommended 2008
expenditures of $116,255. Prior to arriving at this budget, the
Committee considered information from various
[[Page 13800]]
sources, including the Finance and the Promotion sub-committees.
Alternative expenditure levels were discussed at length by all parties.
The assessment rate of $0.22 per 50-pound bag or equivalent of
assessable Walla Walla sweet onions was then determined by dividing the
total recommended budget by the quantity of assessable Walla Walla
sweet onions, estimated at 510,250 50-pound units for the 2008 fiscal
period. Anticipated assessment revenue is expected to be approximately
$4,000 below the budgeted expenses, which the Committee determined to
be acceptable. The Committee expects that interest income for the year
will compensate for the $4,000 deficit, but is prepared to use reserve
funds if necessary.
A review of historical information and preliminary information
pertaining to the upcoming crop year indicates that the grower price
for Walla Walla sweet onions for the 2008 season could range between
$10.00 and $12.00 per 50-pound bag or equivalent. Therefore, the
estimated assessment revenue for the 2008 crop year as a percentage of
total grower revenue could range between 1.83 and 2.20 percent.
This action would increase 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
would be offset by the benefits derived by the operation of the
marketing order. In addition, the Committee's meeting was widely
publicized throughout the Walla Walla sweet 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 11, 2007, meeting was a public meeting and all entities,
both large and small, were able to express views on this issue.
Finally, interested persons are invited to submit comments on this
proposed rule, including the regulatory and informational impacts of
this action on small businesses.
This proposed rule would impose no additional reporting or
recordkeeping requirements on either small or large production area
commodity 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.
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.
USDA has not identified any relevant Federal rules that duplicate,
overlap, or conflict with this rule.
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.
A 60-day comment period is provided to allow interested persons to
respond to this proposed rule. All written comments timely received
will be considered before a final determination is made on this matter.
List of Subjects in 7 CFR Part 956
Marketing agreements, Onions, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, 7 CFR part 956 is
proposed to be amended as follows:
PART 956--SWEET ONIONS GROWN IN THE WALLA WALLA VALLEY OF SOUTHEAST
WASHINGTON AND NORTHEAST OREGON
1. The authority citation for 7 CFR part 956 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. Section 956.202 is revised to read as follows:
Sec. 956.202 Assessment rate.
On and after January 1, 2008, an assessment rate of $0.22 per 50-
pound bag or equivalent is established for Walla Walla sweet onions.
Dated: March 10, 2008.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E8-5102 Filed 3-13-08; 8:45 am]
BILLING CODE 3410-02-P