[Federal Register Volume 61, Number 148 (Wednesday, July 31, 1996)]
[Rules and Regulations]
[Pages 39839-39841]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-19375]



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 Rules and Regulations
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  Federal Register / Vol. 61, No. 148 / Wednesday, July 31, 1996 / 
Rules and Regulations  

[[Page 39839]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 958

[Docket No. FV96-958-3 IFR]


Onions Grown in Certain Designated Counties in Idaho, and Malheur 
County, Oregon; Relaxation of Pack and Marking Requirements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

-----------------------------------------------------------------------

SUMMARY: This interim final rule permits bulk shipments of U.S. 
Commercial and U.S. No. 2 grade onions which contain more than 30 
percent U.S. No. 1 grade onions. A bulk shipment is one in which the 
onions are packed in containers weighing 60 pounds or more. This rule 
also removes the requirement that bulk containers of onions packed as 
U.S. Commercial grade shall have the grade marked permanently and 
conspicuously on the containers. These changes are intended to improve 
the marketing of such onions, reduce handler packing costs, and 
increase returns to growers. These changes were recommended by the 
Idaho-Eastern Oregon Onion Committee (committee), the agency 
responsible for the local administration of the marketing order for 
onions grown in certain designated counties in Idaho, and Malheur 
County, Oregon.

DATES: Effective August 1, 1996; comments received by August 30, 1996 
will be considered prior to issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent in triplicate to the Docket 
Clerk, Fruit and Vegetable Division, AMS, USDA, room 2525-S, P.O. Box 
96456, Washington, DC 20090-6456; FAX (202) 720-5698. All comments 
should reference the docket number and the date and page number of this 
issue of the Federal Register and will be made available for public 
inspection in the Office of the Docket Clerk during regular business 
hours.

FOR FURTHER INFORMATION CONTACT: Gary D. Olson, Northwest Marketing 
Field Office, Marketing Order Administration Branch, Fruit and 
Vegetable Division, AMS, USDA, 1220 SW Third Avenue, room 369, 
Portland, Oregon 97204-2807; Telephone: (503) 326-2724, FAX: (503) 326-
7440; or Robert F. Matthews, Marketing Order Administration Branch, 
Fruit and Vegetable Division, AMS, USDA, room 2525, South Building, 
P.O. Box 96456, Washington, DC 20090-6456; Telephone: (202) 690-0464, 
Fax: (202) 720-5698. Small businesses may request information on 
compliance with this regulation by contacting: Jay Guerber, Marketing 
Order Administration Branch, Fruit and Vegetable Division, AMS, P.O. 
Box 96456, Room 2523-S, Washington, D.C. 20090-6456; telephone (202) 
720-2491, Fax No. (202) 720-5698.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement No. 130 and Marketing Order No. 958 (7 CFR part 958), as 
amended, regulating the handling of onions grown in certain designated 
counties in Idaho and Malheur County, 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 (Department) 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 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 to review the Secretary's 
ruling on the petition, provided an action 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 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 approximately 34 handlers who are subject to regulation 
under the order and approximately 550 producers in the production area. 
Small agricultural service firms, which includes handlers of Idaho-
Eastern Oregon onions, have been defined by the Small Business 
Administration (13 CFR 121.601) as those having annual receipts of less 
than $5,000,000, and small agricultural producers are defined as those 
whose annual receipts are less than $500,000. The majority of Idaho-
Eastern Oregon onion handlers and producers may be classified as small 
entities.
    This interim final rule removes pack and container marking 
requirements for shipments of bulk containers. Bulk containers contain 
60 pounds or more of onions. Currently, shipments of all varieties of 
onions (except red) which grade U.S. Commercial or U.S. No. 2 may not 
contain more then 30 percent U.S. No. 1 grade onions, regardless of 
container size. The intent of this requirement is to lessen the chances 
of market confusion by providing a clear distinction between onions 
packed as U.S. No. 1, the highest grade shipped from the production 
area, and those onions packed at the U.S. Commercial

[[Page 39840]]

or U.S. No. 2 grade levels. Also, containers of onions of the U.S. 
Commercial grade must be prominently and conspicuously marked to 
further achieve the distinction between the various grades packed and 
shipped from the production area.
    Industry experience indicates that it is not important to limit the 
percentage of U.S. No. 1 onions in marketing bulk containers, because 
such onions normally go to firms that peel, slice, dice, chop, or 
otherwise prepare them for use in salad bars, fast food, or similar 
retail outlets. Shipments for the wholesale, retail, repacker, and 
export trade generally are made in containers weighing less than 60 
pounds. Thus, the risk of confusion among buyers as to the quality of 
onions for traditional bulk shipment market outlets is quite low. 
Absent these changes, bulk shipments of onions containing more than 30 
percent U.S. No. 1 grade onions would require handlers to repack the 
onions to meet the 30 percent tolerance and thereby incur additional 
expenses. This rule will especially benefit small handlers shipping 
bulk containers because such handlers normally operate with fewer 
packing lines and pack fewer onions. This makes it more difficult for 
small handlers to repack lots to meet the 30 percent U.S. No. 1 
tolerance compared to larger handlers.
    With the reduced packing costs, and greater marketing flexibility 
expected to result from these changes, small and large handlers in the 
Idaho-Eastern Oregon onion industry will be able to compete more 
effectively in the marketplace. Therefore, the AMS has determined that 
this action will not have a significant economic impact on a 
substantial number of small entities. Interested persons are invited to 
submit information on the regulatory and informational impacts of this 
action on small businesses.
    Section 958.52 of the order authorizes the issuance of grade, size, 
quality, container markings, pack, and container regulations for any 
variety or varieties of onions grown in the production area. Section 
958.51 authorizes the modification, suspension, or termination of 
regulations issued under section 958.52.
    This rule amends paragraphs (a)(1)(ii) and (a)(3)(i) of section 
958.328 by removing, for onions packed in containers weighing 60 pounds 
or greater, the current requirement that all varieties of onions 
(except red) which grade U.S. No. 2 or U.S. Commercial may not be 
shipped if more than 30 percent of the lot is comprised of onions of 
U.S. No. 1 quality. This rule also amends paragraph (b) of section 
958.328 by removing, for onions packed in containers weighing 60 pounds 
or greater, the current requirement that onions packed as U.S. 
Commercial grade shall have the grade marked permanently and 
conspicuously on such containers. These requirements would continue for 
onions shipped in containers weighing less than 60 pounds.
    The committee unanimously recommended these changes at its June 18, 
1996, meeting. The committee meets prior to and during each season to 
consider recommendations for modification, suspension, or termination 
of the regulatory requirements for Idaho-Eastern Oregon onions which 
have been issued on a continuing basis. Committee meetings are open to 
the public and interested persons may express their views at these 
meetings. The Department reviews committee recommendations and 
information submitted by the committee and other available information, 
and determines whether modification, suspension, or termination of the 
regulatory requirements would tend to effectuate the declared policy of 
the Act.
    The current requirement that all varieties of onions (except red) 
which grade U.S. No. 2 or U.S. Commercial may not be shipped if more 
than 30 percent of the lot is comprised of onions of U.S. No. 1 quality 
is intended to reduce market confusion by providing a clear distinction 
between onions packed as U.S. No. 1 and those packed at the U.S. No. 2 
and U.S. Commercial grade levels. The goal of providing a clear 
distinction between packs in the marketplace is further achieved by 
requiring that onions packed as U.S. Commercial grade shall have the 
grade marked permanently and conspicuously on the container. Preventing 
market confusion is important to the industry in maintaining orderly 
marketing, and maximizing industry shipments.
    The committee reports that this distinction is of little value for 
bulk shipments of onions, which normally are used for peeling, 
chopping, slicing, or repacking, and that these requirements have 
placed an undue regulatory burden on handlers and unnecessarily 
increased packing costs for such shipments. The committee reports that 
requiring the grade marking on bulk containers of U.S. Commercial grade 
onions is not necessary because the chance of market confusion between 
handlers and buyers of bulk containers is small.
    The current requirement which prohibits the bulk shipment of a lot 
of onions that grades U.S. No. 2 or U.S. Commercial because it is 
comprised of more than 30 percent U.S. No. 1 quality grade sometimes 
forces handlers to resort such onions, or blend them with poorer 
quality onions to bring the lots into conformance with the 30 percent 
tolerance. Rather than incur these additional costs, handlers sometimes 
send such onions to lower value, secondary outlets, such as processing; 
e.g., canning, freezing, dehydration, or similar outlets. Removing the 
30 percent commingling requirement for bulk onion shipments is expected 
to provide handlers with greater marketing flexibility, reduce packing 
costs, and increase returns to growers. Removing the U.S. Commercial 
grade marking requirement for bulk containers is expected to reduce 
handler packing costs and remove an unnecessary regulatory burden on 
handlers of such containers.
    The 30 percent commingling and marking requirements for containers 
with less than 60 pounds of onions will continue in effect to maintain 
the distinction between the various grades shipped into non-bulk 
markets. As mentioned earlier, this is necessary to prevent market 
confusion and to maintain orderly marketing conditions.
     After consideration of all relevant material presented, including 
the committee's recommendation, and other available information, it is 
found that this interim final rule, as hereinafter set forth, will tend 
to effectuate the declared policy of the Act.
     Pursuant to 5 U.S.C. 553, it is also found and determined upon 
good cause that it is impracticable, unnecessary, and contrary to the 
public interest to give preliminary notice prior to putting this rule 
into effect and that good cause exists for not postponing the effective 
date of this rule until 30 days after publication in the Federal 
Register because: (1) This rule relaxes the current pack and container 
marking requirements for bulk shipments of Idaho-Eastern Oregon onions; 
(2) this rule was unanimously recommended at a public meeting and all 
interested persons had an opportunity to express their views and 
provide input; (3) Idaho-Eastern Oregon onion handlers are aware of 
this rule and need no additional time to comply with the relaxed 
requirements; (4) Idaho-Eastern Oregon onions are shipped throughout 
the year, and this rule should be in effect by August 15, the date 1996 
crop shipments are expected to begin; and (5) this rule provides a 30-
day comment period and any comments received will be considered prior 
to finalization of this rule.

[[Page 39841]]

List of Subjects in 7 CFR Part 958

     Marketing agreements, Onions, Reporting and recordkeeping 
requirements.

     For the reasons set forth in the preamble, 7 CFR part 958 is 
amended as follows:

PART 958--ONIONS GROWN IN CERTAIN DESIGNATED COUNTIES IN IDAHO, AND 
MALHEUR COUNTY, OREGON

     1. The authority citation for 7 CFR part 958 continues to read as 
follows:

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

     2. Section 958.328 is amended by revising paragraphs 
(a)(1)(ii),(a)(3)(i), and (b) to read as follows:


Sec. 958.328   Handling regulation.

* * * * *
     (a) * * *
     (1) * * *
     (ii) U.S. No. 2 or U.S. Commercial grade, at least 1\1/2\ inches 
minimum diameter but not more than 30 percent of the lot shall be 
comprised of onions of U.S. No. 1 quality when packed in containers 
weighing less than 60 pounds; or
* * * * *
     (3) * * *
     (i) U.S. No. 2 or U.S. Commercial grade, at least 3 inches minimum 
diameter, but not more than 30 percent of the lot shall be comprised of 
onions of U.S. No. 1 quality when packed in containers weighing less 
than 60 pounds; or
* * * * *
     (b) Pack. Onions packed as U.S. Commercial grade in containers 
weighing less than 60 pounds shall have the grade marked permanently 
and conspicuously on the container.
* * * * *
    Dated: July 25, 1996.
Sharon Bomer Lauritsen,
Acting Director, Fruit and Vegetable Division.
[FR Doc. 96-19375 Filed 7-30-96; 8:45 am]
BILLING CODE 3410-02-P