[Federal Register Volume 63, Number 36 (Tuesday, February 24, 1998)]
[Rules and Regulations]
[Pages 9128-9131]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-4596]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 959

[Docket No. FV98-959-2 IFR]


Onions Grown in South Texas; Removal of Sunday Packing and 
Loading Prohibitions

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule changes the handling regulation under the South 
Texas onion marketing order by removing the Sunday packing and loading 
prohibitions. The marketing order regulates the handling of onions 
grown in South Texas and is administered locally by the South Texas 
Onion Committee (Committee). This rule will allow the South Texas onion 
industry to compete more effectively with other growing areas, better 
meet buyer needs, and increase supplies of South Texas onions in the 
marketplace.

DATES: Effective February 25, 1998; comments received by April 27, 
1998, 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 Programs, AMS, USDA, room 2525-S, PO 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: Belinda G. Garza, McAllen Marketing 
Field Office, Marketing Order Administration Branch, F&V, AMS, USDA, 
1313 E. Hackberry, McAllen, TX 78501; telephone: (956) 682-2833, Fax: 
(956) 682-5942; or George Kelhart, Technical Advisor, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, room 
2525-S, PO Box 96456, Washington, DC 20090-6456; telephone: (202) 720-
2491, Fax: (202) 205-6632. Small businesses may request information on 
compliance with this regulation by contacting Jay Guerber, Marketing 
Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 
room 2525-S, PO Box 96456, Washington, DC 20090-6456; telephone: (202) 
720-2491, Fax: (202) 205-6632.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement No. 143 and Order No. 959, both as amended (7 CFR part 959), 
regulating the handling of onions grown in South Texas, hereinafter 
referred to as the ``order.'' The marketing agreement and order 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 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.
    This rule changes the handling regulation under the South Texas 
onion marketing order by removing the

[[Page 9129]]

Sunday packaging and loading prohibitions. It also modifies 
Sec. 959.322(f)(5) by removing all references to the Sunday packaging 
and loading prohibitions. This rule will provide handlers with greater 
flexibility and additional time to prepare onions for market.
    Section 959.322 of the order currently prohibits the packaging or 
loading of onions on Sunday during the period March 1 through May 20 of 
each season. This prohibition has been in place for 35 years to foster 
orderly marketing conditions. Handlers were permitted to move onions 
that were already inspected and billed, but were not prevented from 
harvesting onions or taking them to the packing shed for storage or to 
the dryers. The onions, however, could not be packaged or loaded on 
Sunday during that time period.
    At a Committee meeting on November 6, 1997, producers and handlers 
expressed the view that the Sunday holiday had outlived its usefulness. 
In recent seasons, the Sunday packaging and loading prohibition has 
hindered the movement of South Texas onions by not allowing producers 
and handlers to harvest and pack each day of the week. Last year, the 
South Texas area received record amounts of rainfall and producers had 
difficulty harvesting their onions. The packaging and loading 
restriction prevented handlers from packaging or loading onions, even 
when it was dry by Sunday. These heavy periods of rain disrupted the 
normal pattern of harvesting, packing, and loading.
    Due to these severe conditions last season, the Committee 
unanimously recommended relief from the Sunday packing and loading 
restriction in April through May 20 of the onion season. The 
restriction was removed and handlers had the flexibility to package and 
load onions on Sunday, which helped them to salvage some of their crop. 
According to the Committee's pre-season estimate, five million fifty-
pound bags were expected to be harvested last season. However, due to 
the inclement weather, only 2.78 million fifty-pound bags were shipped.
    At its November 6, 1997, meeting, the Committee unanimously 
recommended revising the current handling regulation to remove the 
restriction on packaging and loading onions on Sundays. This action 
will allow the South Texas onion industry to compete more effectively 
with other growing areas, better meet buyer needs, and increase 
supplies of South Texas onions in the marketplace.
    Continuing to prohibit the packaging and loading of onions on 
Sunday could prevent the South Texas onion industry from marketing more 
of their onions. Producers object to the Sunday restriction because if 
the shed is full of onions they are prevented from sending more onions 
to the sheds. By removing the Sunday restriction, handlers could 
continue to package and load onions on Sunday and salvage the 
producers' crops if there were a threat of adverse weather conditions.
    The Committee noted that competing areas pack and load on Sundays, 
and the restrictive Sunday holiday has prevented the South Texas onion 
industry from competing effectively with other areas that do not 
restrict packing or loading on Sundays. The South Texas onion industry 
wants the same opportunity. Continuing to prohibit the packing and 
loading of onions on Sunday would present an unreasonable and 
unnecessary hardship on handlers in the production area. If the 
prohibitions continue, the Committee believes that Texas markets will 
be taken by competing areas, and that the Texas onion industry will not 
be able to meet their buyers' needs.
    The Committee's recommendation is expected to improve producers' 
and handlers' returns by allowing them to package and load onions on 
Sunday if their operations were curtailed for some reason earlier 
during the week. There have been times when handlers have been packing 
onions on Saturday night, and at 12:01 a.m. had to stop even though the 
packing had not been completed. This restriction is unacceptable to the 
South Texas onion industry. The producers and handlers need the 
flexibility to pack and ship each day of the week to effectively meet 
their competition.
    This action will allow handlers to package and load onions on 
Sunday and permit producers to harvest and deliver their onions to 
packing sheds each day of the week. This will provide producers and 
handlers more flexibility in meeting buyer needs and additional time 
for preparing onions for market.
    Removing the Sunday packing and loading prohibitions also requires 
that all references to the Sunday restrictions be removed from 
Sec. 959.322(f)(5). Currently, the prohibition against packing or 
loading onions on Sunday may be modified or suspended to permit the 
handling of onions for export provided that such handling complies with 
safeguard procedures. In addition, whenever the handler grades, 
packages, and ships onions for export on any Sunday, such handler is 
required to cease all grading, packaging, and shipping on the first 
weekday following shipment for the same length of time as the handler 
operated on Sunday. The Committee recommended the removal of such 
references. Thus, Sec. 959.322(f)(5) is revised to remove all 
references to the Sunday prohibition.
    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. 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. Thus, both statutes have small 
entity orientation and compatibility.
    There are approximately 38 handlers of South Texas onions who are 
subject to regulation under the order and approximately 70 onion 
producers in the regulated area. Small agricultural service firms have 
been defined by the Small Business Administration (SBA) (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.
    Most of the handlers are vertically integrated corporations 
involved in producing, shipping, and marketing onions. For the 1996-97 
marketing year, onions produced on 12,175 acres were shipped by the 
industry's 38 handlers; with the average acreage and median acreage 
handled being 310 acres and 177 acres, respectively. In terms of 
production value, total revenues from the 38 handlers were estimated to 
be $23.6 million; with average and median revenue being $620,000 and 
$146,000, respectively. The industry is highly concentrated as the 
largest 8 handlers (largest 25 percent) controlled 62 percent of the 
acreage and 77 percent of onion production.
    The South Texas onion industry is characterized by producers and 
handlers whose farming operations generally involve more than one 
commodity, and whose income from farming operations is not exclusively 
dependent on the production of onions. Alternative crops provide an 
opportunity to utilize many of the same facilities and equipment not in 
use when the onion production season is complete. For this reason, 
typical onion producers and handlers either produce multiple crops or 
alternate crops within a single year.

[[Page 9130]]

    Based on the SBA's definition of small entities, the Committee 
estimates that all the 38 handlers regulated by the order would be 
considered small entities if only their spring onion revenues are 
considered. However, revenues from other productive enterprises would 
likely push a large number of these handlers above the $5,000,000 
annual receipt threshold. All of the 70 producers may be classified as 
small entities based on the SBA definition if only their revenue from 
spring onions is considered. When revenue from all sources is 
considered, a majority of the producers would be considered small 
entities because many of the producers would exceed the $500,000 
figure.
    This rule would relieve the Sunday ban on packing and loading 
onions from South Texas allowing individual firms the flexibility to 
modify operations to effectively compete with production areas not 
bound by such restrictions, to fill customer orders, and to take 
advantage of available transportation.
    The Committee recommended this rule change for the purpose of 
ensuring a timely flow of available supplies, and thus help to maintain 
stability in the onion market. Being reasonably assured of a stable 
price and market provides South Texas onion producers and handlers with 
added flexibility to maintain proper cash flow and to meet annual 
expenses. The market and price stability provided by the order 
potentially benefits the smaller handlers more than such provisions 
benefit large handlers. Smaller producers and handlers are more 
dependent upon stable prices. Larger handlers are more diversified and 
not as dependent upon price stability. Therefore, the relief of packing 
and loading restrictions on Sundays has small entity orientation.
    While the level of benefits of removing the Sunday packing and 
loading prohibitions are difficult to quantify, this action is expected 
to allow the South Texas onion industry to compete more effectively 
with other growing areas, better meet buyer needs, and increase 
supplies of South Texas onions in the marketplace. Last season, the 
South Texas onion industry expected to ship 5 million 50-pound bags of 
onions with a production value of $45.6 million. However, inclement 
weather during a substantial part of the shipping season limited 
shipments. Late in the season, the packing and loading restrictions 
were removed to help producers and handlers salvage their crops. 
Industry shipments totaled 2.8 million bags with a production value of 
$25.4 million. The suspension for last season provided producers and 
handlers more flexibility in meeting the needs of their buyers.
    The Committee believes that providing handlers the ability to pack 
and load on Sundays will benefit the industry. Removal of the 
prohibitions will provide producers with an additional window of 
opportunity to harvest and deliver their onions to handlers for 
sorting, grading, packaging, and loading. Moreover, the continued use 
of this self-imposed restriction could cause the South Texas area to 
lose its markets to other competing areas, because these areas can 
package and load onions on Sunday. Removing the Sunday packaging and 
loading prohibitions will positively impact both small and large 
handlers by helping them maintain markets.
    This action is expected to improve producers' and handlers' returns 
by allowing them to package and load onions on Sunday if their 
operations were curtailed for some reason earlier in the week. The 
ability to pack and load on Sunday will help the handlers fill 
unexpected rush orders made at the end of the normal packing week. 
There have been times when handlers were packing onions on Saturday 
night, and at 12:01 a.m. had to stop even though the packing had not 
yet been completed. This hindered handler operations and unduly delayed 
the packing and shipping of onions to meet buyer needs.
    The Committee considered not removing the Sunday packing and 
loading prohibitions. However, not relaxing the regulation could result 
in significant crop losses as occurred last season prior to the 
emergency suspension of the prohibitions. Also, the cessation in 
harvesting activity last season resulted in increased unemployment 
among onion field workers and employees at handlers' facilities. In 
addition, reduced supplies could result in consumers paying higher 
prices for onions. The opportunity to pack and load onions seven days a 
week will give producers and handlers more time to harvest and prepare 
onions for market. This increased flexibility will enable the industry 
to better meet buyer needs and to compete more effectively with its 
competition.
    This rule will not impose any additional reporting or recordkeeping 
requirements on either small or large South Texas onion handlers. As 
with all Federal marketing order programs, reports and forms are 
periodically reviewed to reduce information requirements and 
duplication by industry and public sectors. In addition, the Department 
has not identified any relevant Federal rules that duplicate, overlap 
or conflict with this rule.
    Further, the Committee's meeting was widely publicized throughout 
the South Texas onion industry and all interested persons were invited 
to attend the meeting and participate in Committee deliberations. Like 
all Committee meetings, the November 6, 1997, meeting was a public 
meeting and all entities, both large and small, were able to express 
their views on this issue. Finally, interested persons are invited to 
submit information on the regulatory and informational impacts of this 
action on small businesses.
    After consideration of all relevant material presented, including 
the information and recommendation by the Committee and other available 
information, it is hereby found that this interim final rule, as 
hereinafter set forth, will tend to effectuate the declared policy of 
the Act.
    This rule invites comments on a change to the handling regulation 
currently prescribed under the South Texas onion marketing order. Any 
comments received will be considered prior to finalization of this 
rule.
    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 requirements in the handling 
regulations; (2) this action must be taken promptly to be in place by 
March 1, the start of the South Texas onion regulatory period; (3) the 
Committee unanimously recommended these changes at a public meeting and 
interested parties had an opportunity to provide input; and (4) this 
rule provides a 60-day comment period and any comments received will be 
considered prior to finalization of this rule.

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 
amended as follows:

PART 959--ONIONS GROWN IN SOUTH TEXAS

    1. The authority citation for 7 CFR part 959 continues to read as 
follows:

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

    2. In Sec. 959.322, the introductory paragraph is amended by 
removing the last sentence and paragraph (f)(5) is revised to read as 
follows:

[[Page 9131]]

Sec. 959.322  Handling regulation.

* * * * *
    (f) * * *
    (5) Export shipments. Export shipments shall be exempt from all 
container requirements of this section.
* * * * *
    Dated: February 17, 1998.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-4596 Filed 2-23-98; 8:45 am]
BILLING CODE 3410-02-P