[Federal Register Volume 61, Number 196 (Tuesday, October 8, 1996)]
[Rules and Regulations]
[Pages 52682-52684]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-25707]


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DEPARTMENT OF AGRICULTURE
7 CFR Part 958

[Docket No. FV96-958-3 FIR]


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (Department) is adopting as a 
final rule, without change, the provisions of an interim final rule 
permitting 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

[[Page 52683]]

(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.

EFFECTIVE DATE: November 7, 1996.

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 2525-S, Washington, D.C. 20090-6456; Telephone (202) 
720-2491, FAX (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 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 the date of the entry of the ruling.
    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.
    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 final rule continues in effect an action which removed pack 
and container marking requirements for shipments of bulk containers. 
Bulk containers contain 60 pounds or more of onions. Prior to this 
rule, shipments of all varieties of onions (except red) which grade 
U.S. Commercial or U.S. No. 2 could not contain more than 30 percent 
U.S. No. 1 grade onions, regardless of container size. The intent of 
this requirement was 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 or U.S. No. 2 grade levels. Also, all containers 
of onions of the U.S. Commercial grade were required to 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 have had to be repacked to meet 
the 30 percent tolerance and handlers would have continued to 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 were invited 
to submit information on the regulatory and informational impacts of 
this action on small businesses. No such information was received.
    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 continues in effect amendments to 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 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 continues in 
effect an amendment to paragraph (b) of section 958.328 by removing, 
for onions packed in containers weighing 60 pounds or greater, the 
requirement that onions packed as U.S. Commercial grade shall have the 
grade marked permanently and conspicuously on such containers. These 
requirements continue to apply to onions shipped in containers weighing 
less than 60 pounds.

[[Page 52684]]

    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 previous requirement that all varieties of onions (except red) 
which grade U.S. No. 2 or U.S. Commercial could not be shipped if more 
than 30 percent of the lot was comprised of onions of U.S. No. 1 
quality was 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 was further achieved 
by requiring onions packed as U.S. Commercial grade to 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 reported that this distinction was 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 reported that 
requiring the grade marking on bulk containers of U.S. Commercial grade 
onions was not necessary because the chance of market confusion between 
handlers and buyers of bulk containers is small.
    The previous requirement which prohibited the bulk shipment of a 
lot of onions that graded U.S. No. 2 or U.S. Commercial because it was 
comprised of more than 30 percent U.S. No. 1 quality sometimes forced 
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 
sent such onions to lower value, secondary outlets, such as processing; 
e.g., canning, freezing, dehydration, or similar outlets. Removal of 
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. Removal of 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 continues 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.
    The interim final rule was issued on July 26, 1996, and published 
in the Federal Register (61 FR 39839, July 31, 1996), with an effective 
date of August 1, 1996. That rule provided a 30-day comment period 
which ended August 30, 1996. No comments were received.
    After consideration of all relevant material presented, including 
the committee's recommendation, and other available information, it is 
found that finalizing the interim final rule, without change, as 
published in the Federal Register (61 FR 39839, July 31, 1996) will 
tend to effectuate the declared policy of the Act.

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

    Accordingly, the interim final rule amending 7 CFR part 958 which 
was published at 61 FR 39839 on July 31, 1996, is adopted as a final 
rule without change.

    Dated: October 1, 1996.
Robert C. Keeney,
Director, Fruit and Vegetable Division.
[FR Doc. 96-25707 Filed 10-7-96; 8:45 am]
BILLING CODE 3410-02-P