[Federal Register Volume 63, Number 22 (Tuesday, February 3, 1998)]
[Proposed Rules]
[Pages 5472-5474]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-2551]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
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  Federal Register / Vol. 63, No. 22 / Tuesday, February 3, 1998 / 
Proposed Rules  

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 958 and 980

[Docket No. FV97-958-2AN]


Onions Grown in Certain Designated Counties in Idaho, and Malheur 
County, Oregon, and Imported Onions; Possible Increase in Grade 
Requirements for White Onions

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Advance notice of proposed rulemaking; request for public 
comments.

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SUMMARY: The Agricultural Marketing Service (AMS) invites comments from 
producers, handlers, importers, commercial users, and other interested 
persons on a possible increase in the minimum grade requirements for 
white onions handled under the Idaho-Eastern Oregon onion marketing 
order, and for imported white onions. A recommendation to increase the 
minimum grade for white onions from U.S. No. 2 to U.S. No. 1 is under 
consideration. Comments pertaining to the volume and grade of imported 
white onions, as well as to other aspects of the potential grade 
increase, including its probable regulatory and economic impact on 
small business entities are sought.

DATES: Comments received by April 6, 1998, will be considered prior to 
issuance of a proposed rule.

ADDRESSES: Interested persons are invited to submit written comments 
concerning the issues contained in this notice. Comments must be sent 
in triplicate to the Docket Clerk, Fruit and Vegetable Programs, AMS, 
USDA, room 2525-S, P.O. Box 96456, Washington, DC 20090-6456; Fax: 
(202) 205-6632. 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: Robert J. Curry, Northwest Marketing 
Field Office, Marketing Order Administration Branch, Fruit and 
Vegetable Programs, AMS, USDA, 1220 SW Third Avenue, room 369, 
Portland, Oregon 97204-2807; telephone: (503) 326-2724, Fax: (503) 326-
7440; or George J. Kelhart, Marketing Order Administration Branch, 
Fruit and Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box 96456, 
Washington, DC 20090-6456; telephone (202) 720-2491, Fax: (202) 205-
6632.

SUPPLEMENTARY INFORMATION: This advance notice of proposed rulemaking 
invites comments on a possible increase in the minimum grade 
requirements for Idaho-Eastern Oregon and imported white onions. AMS is 
seeking information pertaining to the volume and grade of imported 
white onions, and on the regulatory and economic impact such rulemaking 
might have on handlers, producers, importers, and other interested 
parties, including small businesses. All other views, suggestions or 
comments relative to the proposal in general also are sought. The 
regulation being considered for amendment governs the handling of 
onions grown in certain designated counties in Idaho, and Malheur 
County, Oregon, and is authorized under Marketing Agreement No. 130 and 
Marketing Order No. 958, both as amended (7 CFR part 958). Any action 
to amend the domestic onion handling regulation also would affect the 
Onion Import Regulation (7 CFR 980.117). The marketing agreement, 
marketing order, and import regulation are effective under the 
Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-
674), hereinafter referred to as the ``Act.''
    The onion import regulation requires imported onions to meet the 
same or comparable grade, size, quality, and maturity standards as are 
in effect for domestic onions under a Federal marketing order. The Act 
further provides that when two or more marketing orders regulating the 
same commodity are concurrently in effect, imports will be subject to 
the requirements established for the commodity grown in the area with 
which the imported commodity is in most direct competition. Onion 
import requirements are based on regulations established under the 
Idaho-Eastern Oregon (7 CFR part 958) and South Texas (7 CFR part 959) 
onion marketing orders. The action under consideration is a change to 
the grade requirements for imported white onions during the period the 
Idaho-Eastern Oregon requirements apply (June 5-March 9).
    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act, the AMS will consider the economic impact any such 
action would have on small entities and prepare regulatory flexibility 
analyses for inclusion in any subsequent rulemaking actions. Any 
actions undertaken as a result of this advance notice or also reviewed 
by the AMS under Executive Order 12866 and 12988.
    This advance notice is based on a unanimous recommendation of the 
Idaho-Eastern Oregon Onion Committee (Committee). The Committee 
recommendation would increase the minimum grade requirements for white 
onion varieties grown in the Idaho-Eastern Oregon onion production area 
and handled subject to marketing order requirements. Pursuant to 
section 8e of the Act and the onion import regulation, this action 
would also affect imported white onions.
    The recommended change would increase the minimum grade from U.S. 
No. 2 to U.S. No. 1, thereby eliminating from the fresh market all U.S. 
Commercial and U.S. No. 2 white onions produced in the regulated 
production area and those imported into the U.S. during the period from 
June 5 through March 9. Information, suggestions, and comments 
pertaining to the proposal are sought. Anyone having specific 
information relative to the affect the recommendation to eliminate the 
importation of U.S. Commercial and U.S. No. 2 white onions would have 
on the volume of imported white onions is encouraged to comment. 
Producers, handlers, importers, and other small businesses, both large 
and small, potentially impacted by the possible grade change also are 
encouraged to provide comments relative to any probable regulatory and 
economic impacts.
    Section 958.328(a)(1) establishes the grade requirements for white 
onions handled subject to the Idaho-Eastern onion marketing order. Such 
grade requirements are based on the U.S. Standards for Grades of Onions 
(Other

[[Page 5473]]

than Bermuda-Granex-Grano and Creole Types)(7 CFR part 51.2830 et 
seq.), or the U.S. Standards for Grades of Bermuda-Grano-Granex Type 
Onions (7 CFR part 51.3195 et seq.). Currently, these handling 
regulations require that white onion varieties shall be (1) U.S. No. 2 
or U.S. Commercial, 1 inch minimum to 2 inches maximum diameter; or (2) 
U.S. No. 2 or U.S. Commercial, if not more than 30 percent of the lot 
is comprised of onions of U.S. No. 1 quality, and at least 1\1/2\ 
inches minimum diameter; or (3) U.S. No. 1, at least 1\1/2\ inches 
minimum diameter. The regulations further specify that none of these 
three categories may be commingled in the same bag or other container.
    The change under consideration would require all bags or other 
containers of white onion varieties shipped subject to marketing order 
requirements to be either: (1) U.S. No. 1, 1 inch minimum to 2 inches 
maximum diameter; or (2) U.S. No. 1, at least 1\1/2\ inches minimum 
diameter. Commingling of these two categories would not be allowed. 
Current exemptions under the order for special purpose shipments in 
section 958.328(e), and shipments qualifying for a minimum quantity 
exemption in section 958.328(g), would continue to apply when 
applicable.
    The Committee justified its recommendation stating that the 
shipment of U.S. No. 2 and U.S. Commercial grade white onions have had 
a negative impact on producer returns and have been a factor in 
decreasing this industry's share of the fresh domestic white onion 
market. In addition, the Committee stated that consumers of white 
onions traditionally demand a quality product and that U.S. No. 2 and 
U.S. Commercial grade white onions have poor consumer acceptance.
    The Committee stated that producers seldom profit from U.S. No. 2 
or U.S. Commercial grade white onion sales, and as a consequence, 
common business practice for many is to discard such onions as culls 
following harvest. Furthermore, the Committee indicated that shipments 
of low quality U.S. No. 2 or U.S. Commercial grade white onions have a 
depressing influence on the price of the higher quality U.S. No. 1 
grade white onions.
    An annual average of 336,000 hundredweight of white onions, 
representing 3.9 percent of the total of all onion varieties, have been 
shipped from the Idaho-Eastern Oregon production area since the 1986/87 
marketing season. The annual average of all Idaho-Eastern Oregon onion 
shipments for this period, including white, yellow, and red onion 
varieties, is 9,517,500 hundredweight. During the same period of time, 
shipments of Idaho-Eastern Oregon U.S. No. 2 white onions averaged 
3,807 hundredweight per year, or approximately an annual average of 1.2 
percent of white Idaho-Eastern Oregon onion shipments and an annual 
average of .04 percent of all Idaho-Eastern Oregon onion shipments. 
Onions from the Idaho-Eastern Oregon production area are shipped 
throughout the year. The majority of Idaho-Eastern Oregon white onions 
are marketed during the months of September, October and November, with 
significant additional volume through February.
    As mentioned earlier, section 8e of the Act requires that when 
certain domestically produced commodities, including onions, are 
regulated under a Federal marketing order, imports of that commodity 
must meet the same or comparable grade, size, quality, or maturity 
requirements. Section 8e also provides that whenever two or more 
marketing orders regulating the same commodity produced in different 
areas of the U.S. are concurrently in effect, a determination must be 
made as to which of the areas produces the commodity in more direct 
competition with the imported commodity. Imports must then meet the 
requirements established for the particular area.
    Grade, size, quality, and maturity regulations have been issued 
regularly under both Marketing Order No. 958 and Marketing Order No. 
959, which regulates the handling of onions grown in South Texas, since 
the marketing orders were established. The current import regulation 
specifies that import requirements for onions are to be based on the 
seasonal categories of onions grown in both marketing order areas. The 
import regulation specifies that imported onions must meet the 
requirements of the Idaho-Eastern Oregon onion marketing order during 
the period June 5 through March 9 and the South Texas onion marketing 
order during the period March 10 through June 4 each season. The 
Committee's recommendation, if adopted, would change the import 
requirements for the period June 5 through March 9 of each marketing 
year to provide that all imported white onion varieties must be U.S. 
No. 1 grade. While no changes are required in the language of section 
980.117, all white onion varieties imported during this period would be 
required to meet the modified grade requirement should the recommended 
grade increase eventually be implemented.
    During the period June 5 through March 9, the current import 
regulation requires that all imported onions, except braided red 
varieties, must be at least U.S. No. 2 grade. During the period March 
10 through June 4 the current onion import regulation requires that all 
imported onions must be U.S. No. 1 grade with an allowable tolerance of 
up to 20 percent for defects, 10 percent for serious damage, and 2 
percent for decay.
    White onions are imported into the U.S. throughout the year from a 
number of different countries. By far the largest source of all 
imported onions is Mexico. Mexican white onions enter the U.S. from 
November through July, with the heaviest volumes moving during the 
months of December through April. The annual average volume of all 
Mexican onions imported into the U.S. between 1986 and 1996 was 
3,333,150 hundredweight, while the annual average volume for all 
imported onions from all sources during the same period was 4,040,004 
hundredweight. Other major sources of imported onions are Canada, 
Chile, Australia, and New Zealand with small quantities coming from 
Belgium, France, Guatemala, Israel, Morocco, the Netherlands, and 
Taiwan. Compiled statistics specific to the volume and grade of 
imported white onions are not available at this time.
    There are approximately 35 handlers of Idaho-Eastern Oregon onions 
who are subject to regulation under the marketing order and 
approximately 260 producers, including approximately 80 producers of 
white onions, in the regulated area. In addition, approximately 150 
importers of onions are subject to import regulations and would be 
affected by the possible grade change discussed in this document. Small 
agricultural service firms 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 
having annual receipts of less than $500,000. Although it is unknown 
how many importers of white onions may be classified as small entities, 
approximately 9 percent of the handlers and 7 percent of the producers 
of Idaho-Eastern Oregon white onions may be classified as small 
entities.
    In conclusion, the AMS is soliciting the views of producers, 
handlers, importers, commercial users, consumers, and other interested 
persons on possible grade requirement changes for Idaho-Eastern Oregon 
and imported onions described in this document. Specifically, the AMS 
is interested in statistical information, suggestions, and comments 
pertaining to the volume and grade of imported white onions and to the 
probable regulatory and economic

[[Page 5474]]

impact of the proposal on small businesses. All views are solicited, 
however, so that every aspect of this potential revision may be studied 
prior to formulating a proposed rule, if such is deemed warranted by 
the Agency.
    This request for public comments does not constitute notification 
that the recommendation to change the regulations described in this 
document is or will be proposed or adopted.
    A 60-day comment period is provided to allow interested persons the 
opportunity to respond to this request for information and comments. 
All written comments timely received will be considered before any 
subsequent rulemaking action is undertaken.

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

    Dated: January 28, 1998.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-2551 Filed 2-2-98; 8:45 am]
BILLING CODE 3410-02-P