[Federal Register Volume 59, Number 70 (Tuesday, April 12, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-8890]


  Federal Register / Vol. 59, No. 70 / Tuesday, April 12, 1994 /
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[[Page Unknown]]

[Federal Register: April 12, 1994]


                                                    VOL. 59, NO. 70

                                            Tuesday, April 12, 1994

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 959

[FV-93-959-2FR]

 

Onions Grown in South Texas--Regulation of Red Onions and Change 
in Regulatory Period

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This final rule establishes requirements for red variety 
onions grown in South Texas under Marketing Order 959. In recent years, 
shipments of poor quality red onions have appeared in the marketplace 
and have adversely affected grower prices. This rule will tend to 
improve grower prices by providing more desirable quality red onions 
for consumers. This rule also extends the termination date of the 
order's regulatory period from May 20 to June 15 of each year. More 
late season onions are being grown in a portion of the production area, 
increasing the need for marketing order quality requirements over a 
longer time period. Regulating onions from the production area through 
June 15 will help make more desirable onions available to markets.

EFFECTIVE DATE: April 12, 1994.

FOR FURTHER INFORMATION CONTACT: Robert Matthews, Marketing Specialist, 
Marketing Order Administration Branch, F&V, AMS, USDA, Room 2523-S, 
P.O. Box 96456, Washington, DC, 20090-6456, telephone: (202) 690-0464; 
or Belinda G. Garza, McAllen Marketing Field Office, Marketing Order 
Administration Branch, F&V, AMS, USDA, 1313 E. Hackberry, McAllen, 
Texas 78501; telephone: (210) 682-2833.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement No. 143 and Marketing Order No. 959 (7 CFR Part 959), as 
amended, regulating the handling of onions grown in South Texas, 
hereinafter referred to as the ``order.'' This order is effective under 
the Agricultural Marketing Agreement of 1937, as amended (7 U.S.C 601-
674), hereinafter referred to as the ``Act.''
    The Department of Agriculture (Department) is issuing this rule in 
conformance with Executive Order 12866.
    This rule has been reviewed under Executive Order 12778, Civil 
Justice Reform. This action 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 
action.
    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 the Secretary 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 the Secretary 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 in equity to review the 
Secretary's ruling on the petition, provided a bill in equity is filed 
not later than 20 days after date of the entry of the ruling.
    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Administrator of the Agricultural Marketing Service 
(AMS) has considered the economic impact of this action on small 
entities.
    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 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.
    There are 38 handlers of South Texas onions who are subject to 
regulation under the marketing order and 97 producers in the regulated 
area. Small agricultural service firms, which includes handlers, have 
been defined by the Small Business Administration (13 CFR 121.601) as 
those having annual receipts of less than $3,500,000, and small 
agricultural producers are defined as those having annual receipts of 
less than $500,000. The majority of handlers and producers of South 
Texas onions may be classified as small entities.
    At its November 9, 1993, meeting, the South Texas Onion Committee 
(committee) recommended, under the authority of Sec. 959.52(c) of the 
order, that red varieties of onions be regulated and also that the 
termination date of the regulatory period for all varieties of 
regulated onions be extended from May 20 to June 15 of each year.
    Red varieties of onions have been exempt from regulation since the 
inception of Marketing Order No. 959. The quantities of such onions 
produced have usually represented a small portion of the total annual 
production in the marketing order's regulated area. However, red 
variety acreage has increased significantly in recent seasons. 
Moreover, the committee reports that poor quality red onions grown in 
the production area have appeared in the marketplace from time to time.
    The impact on the industry is two-fold. Poor quality red onions 
diminish consumer confidence in the better quality red onions, leading 
to fewer sales and lower returns to growers. In addition, a less 
favorable consumer opinion of red variety onions often leads to lower 
sales for all onions grown in the production area, including yellow and 
white varieties which now enjoy an excellent reputation with receivers 
and consumers.
    Red onions, like yellow onions and white onions, are varieties of 
Allium cepa, and are therefore covered by the same U.S. standards 
referenced in Sec. 959.322(h). Because of this, the regulatory 
requirements set forth in Sec. 959.322 applicable to yellow and white 
varieties of onions are appropriate for red varieties also. The 
committee believes that by regulating red onions in the same fashion as 
yellow and white onions, consumers can be assured of buying better 
quality red onions. Thus, increased consumer confidence should result 
in improved returns to growers. In addition to grade and size 
requirements, the committee also recommended that red varieties be 
subject to the same pack, container, inspection, assessment, and 
safeguard requirements as yellow and white varieties. In this way, red, 
yellow, and white onions will be regulated to the same extent.
    The second recommendation concerns the length of the regulatory 
period for shipments of onions from the regulated area. Previously, 
order regulations were in effect from March 1 through May 20 each year. 
District 2 (Laredo-Winter Garden) is in the northern part of the 
production area and has a shipping season that extends from May to well 
into June. This district is comprised of the Counties of Zapata, Webb, 
Jim Hogg, DeWitt, Wilson, Atascosa, Karnes, Val Verde, Frio, Kinney, 
Uvalde, Medina, Maverick, Zavala, Dimmit and LaSalle. In the 1980's, 
District 2 production was declining and industry members asked to be 
relieved from the marketing order requirements after May 20 each 
season, instead of the June 15 date in effect at that time. By May 20, 
shipments from District No. 1 in the southern part of the production 
area usually are finished. Thus, effective for the 1989 and subsequent 
seasons, the termination date for the regulatory period was advanced 
for the entire production area from June 15 to May 20 (54 FR 8519, 
March 1, 1989).
    However, committee records indicate an increase in onion shipments 
from District 2 during the past three years. The committee members from 
District 2 who attended the November meeting stated that shipments 
during the May 20 through June 15 period should once again be regulated 
so that funds could be assessed to fund the committee's production 
research and market development efforts as well as assure the consumer 
a quality pack of onions from their district. Shipments from this 
district typically account for 10 to 12 percent of the production area 
total, and the committee believes that grade, size, container, and 
other order requirements are necessary to maintain the quality of South 
Texas onions that receivers and consumers have become accustomed to. 
Extension of the regulatory period will not affect District 1 handlers 
as shipments from that district normally are completed by mid-May.
    Currently, handlers may not package or load onions on Sunday during 
the period March 1 through May 20 of each season. The committee 
recommended not changing this requirement. After May 20, District 2 
handlers compete with unregulated shipments from other areas such as 
California. Permitting District 2 handlers to package and ship whenever 
they can find buyers will help to reduce the competitive advantage of 
handlers shipping from outside the regulated area.
    Notice of this final rule was published in the March 9, 1994, issue 
of the Federal Register (59 FR 11008). Interested persons were invited 
to file written comments with respect to the proposal until March 24, 
1994. Ten comments were received. One was from Mr. Greg Nelson, of the 
Cargil Produce Company, Uvalde, Texas, which is located in District 2. 
Mr. Nelson opposed the extension of the regulatory period. He stated 
that non-regulated areas such as California, the Vidalia area of 
Georgia, New Mexico, Arizona, and the Trans-Pecos area of Texas ship 
large quantities of new crop onions. These onions compete with 
regulated onions from District 2 (Laredo-Winter Garden). Mr. Nelson 
stated that the other shipping areas, being unregulated, have a 
significant competitive advantage over District 2 growers and handlers 
because those onions do not have to meet grade requirements and the 
handlers do not have to pay inspection costs.
    Six other comments also opposed the proposed extension of the 
regulation period. These comments were received from Mr. Kenneth 
Spence, Mr. Robert Willoughby, and Mr. Lee Toombs, all of Batesville; 
and from Mr. C.W. Cargil, Mr. Steve Cargil, and Mr. Steve Rambie, from 
Uvalde, Texas. All stated that regulating District 2 onions after May 
20 would cause a hardship on District 2 growers by giving non-regulated 
producing areas a competitive advantage.
    At the November 9, 1993, meeting during which this change in 
regulatory period was recommended, 11 members were present; the full 
committee is composed of 17 members. The committee unanimously 
recommended this action, including two members from District 2. For 
District 1, one position was not represented by either a member or 
alternate; for District 2, two members out of seven were in attendance. 
None of the opponents were in attendance.
    Although District 2 producers and handlers usually face competition 
from non-regulated areas during much of their shipping season, it is 
important that handling requirements apply to shipments from that 
district to protect the good quality image enjoyed by South Texas 
onions in the marketplace and promoted by the committee's market 
development program. In the absence of quality and inspection 
requirements, low quality onions from District 2 could be shipped. Such 
shipments could negatively effect the South Texas industry's market 
development efforts and quality image. Also, in the interest of equity 
and uniform regulation application, it is desirable that handlers from 
District 2 pay assessments in support of these activities. Assessments 
paid have helped to provide an on-going production research program 
that has benefitted the entire industry with the development of new 
onion varieties and new cultural techniques, as well as an effective 
market development program that helps increase sales. Therefore, these 
comments are denied.
    The three remaining comments were from the South Texas Onion 
committee, Mr. John R. Bearden, and Mr. B. L. Lackey. These comments 
stated that if the rule is not adopted by April 1, the anticipated 
beginning of the red onion harvesting and shipping season, poor quality 
red onions will be dumped on the market, thereby diminishing consumer 
confidence and depressing the market for South Texas onions. After 
evaluating the comments, the Department has decided to implement the 
committee's recommendation as proposed, and make the final rule 
effective upon publication in the Federal Register.
    Based on available information, the Administrator of the AMS has 
determined that this action will not have a significant economic impact 
on a substantial number of small entities.
    Section 8(e) of the Act requires that whenever grade, size, quality 
or maturity requirements are in effect for onions under a domestic 
marketing order, imported onions must meet the same or comparable 
requirements, subject to concurrence by the United States Trade 
Representative. Because this rule establishes grade, size, quality and 
maturity requirements on red onions and changes the regulatory period 
under the South Texas onion marketing order, corresponding changes are 
needed in the onion import regulation. Such changes have been addressed 
in a separate onion import rule.
    The information collection requirements contained in the referenced 
sections have been previously approved by the Office of Management and 
Budget (OMB) under the provisions of 44 U.S.C. chapter 35 and have been 
assigned OMB number 0581-0074.
    After consideration of all relevant material presented, including 
the proposal submitted by the committee, comments received, and other 
information, it is hereby found that this regulation, as hereinafter 
set forth, will tend to effectuate the declared policy of the Act. It 
is further found that good cause exists for not postponing the 
effective date of this section until 30 days after publication in the 
Federal Register because (1) the shipping season for onions has already 
begun and for maximum effectiveness this rule should apply to as many 
shipments as possible; (2) the proposed rule was discussed at an open 
public meeting, and all interested persons had an opportunity to voice 
concerns; and (3) there are no special preparations required of the 
handler that cannot be completed by the effective date.

List of Subjects in 7 CFR Part 959

    Marketing agreements, Onions, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 959 is hereby 
amended as follows:
    1. The authority citation for 7 CFR part 959 continues to read as 
follows:

    Authority: 7 U.S.C. 601-674.

PART 959--ONIONS GROWN IN SOUTH TEXAS

    2. In Sec. 959.322, the introductory paragraph is revised to read 
as follows:


Sec. 959.322  Handling regulation.

    During the period beginning March 1 and ending June 15, no handler 
shall handle any onions unless they comply with paragraphs (a) through 
(d) or (e) or (f) of this section. In addition, no handler may package 
or load onions on Sunday during the period March 1 through May 20.
* * * * *
    Dated: April 8, 1994.
Robert C. Keeney,
Deputy Director, Fruit and Vegetable Division.
[FR Doc. 94-8890 Filed 4-11-94; 8:45 am]
BILLING CODE 3410-02-P