[Federal Register Volume 63, Number 108 (Friday, June 5, 1998)]
[Rules and Regulations]
[Pages 30577-30579]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-15016]



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  Federal Register / Vol. 63, No. 108 / Friday, June 5, 1998 / Rules 
and Regulations  

[[Page 30577]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 959

[Docket No. FV98-959-2 FIR]


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

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 
which changed the handling regulation prescribed 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 allows 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.

EFFECTIVE DATE: July 6, 1998.

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, P.O. 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, P.O. 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 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.
    This rule continues in effect modifications to language in the 
order's handling regulation to remove the Sunday packaging and loading 
prohibitions. It also continues in effect modifications to 
Sec. 959.322(f)(5) to remove all references to the Sunday packaging and 
loading prohibitions. This rule will continue to provide handlers with 
greater flexibility and additional time to prepare onions for market.
    Section 959.322 of the order formerly prohibited the packaging or 
loading of onions on Sunday during the period March 1 through May 20 of 
each season. This prohibition had 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 had 
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 
recommendation was intended 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.
    Continuing to prohibit the packaging and loading of onions on 
Sunday could

[[Page 30578]]

have prevented the South Texas onion industry from marketing more of 
their onions. Producers objected to the Sunday restriction because if 
the shed was full of onions, they were prevented from sending more 
onions to the sheds. Removing the Sunday restriction allowed handlers 
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 that the restrictive Sunday holiday had 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 
wanted the same opportunity. Continuing to prohibit the packing and 
loading of onions on Sunday would have presented an unreasonable and 
unnecessary hardship on handlers in the production area. If the 
prohibitions had continued, the Committee believed that Texas markets 
would have been taken by competing areas, and that the Texas onion 
industry would not have been able to meet their buyers' needs.
    The Committee's recommendation was intended to improve producers' 
and handlers' returns by allowing them to package and load onions on 
Sunday when their operations were curtailed for some reason during the 
previous week. There had been times when handlers had been packing 
onions on Saturday night, and had to stop at 12:01 a.m. even though the 
packing had not been completed. This restriction was unacceptable to 
the South Texas onion industry. The producers and handlers needed the 
flexibility to pack and ship each day of the week to effectively meet 
their competition.
    This action continues to allow handlers to package and load onions 
on Sunday, and permits producers to harvest and deliver their onions to 
packing sheds each day of the week. This provides 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 required 
that all references to the Sunday restrictions be removed from 
Sec. 959.322(f)(5). Prior to the issuance of the interim final rule, 
the prohibition against packing or loading onions on Sunday could have 
been modified or suspended to permit the handling of onions for export 
provided that such handling complied with safeguard procedures. In 
addition, whenever the handler graded, packaged, and shipped onions for 
export on any Sunday, such handler was 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) 
was 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 final 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 for 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.
    Based on the SBA's definition of small entities, the Committee 
estimates that 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 not be considered small 
entities because many of the producers would exceed the $500,000 
figure.
    This rule continues to 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 continues 
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

[[Page 30579]]

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 continue to benefit the industry. Removal of 
the prohibitions provided producers with an additional window of 
opportunity to harvest and deliver their onions to handlers for 
sorting, grading, packaging, and loading. The continued use of this 
self-imposed restriction could have caused 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 positively impacted both small and large handlers by 
helping them maintain markets.
    This action is intended to improve producers' and handlers' returns 
by allowing them to package and load onions on Sunday if their 
operations were curtailed for some reason during the previous week. The 
ability to pack and load on Sunday has helped 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 have 
resulted in significant crop losses, as occurred last season, prior to 
the emergency suspension of the prohibition. 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 gives producers and handlers more time to harvest and prepare 
onions for market. This increased flexibility enables the industry to 
better meet buyer needs and 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 collection 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 were invited to 
submit information on the regulatory and informational impacts of this 
action on small businesses.
    An interim final rule concerning this action was published in the 
Federal Register on February 24, 1998 (63 FR 9128). The interim final 
rule was made available through the Internet by the Office of the 
Federal Register. A 60-day comment period was provided for interested 
persons to respond to the interim final rule. The comment period ended 
on April 27, 1998, and no comments were received.
    After consideration of all relevant material presented, including 
the information and recommendation submitted by the Committee and other 
available information, it is hereby found that finalizing the interim 
final rule, without change, as published in the Federal Register (63 FR 
9128, February 24, 1998), will tend to effectuate the declared policy 
of the Act.

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

    Accordingly, the interim final rule amending 7 CFR part 959 which 
was published at 63 FR 9128 on February 24, 1998, is adopted as a final 
rule without change.

    Dated: June 1, 1998.
Sharon Bomer Lauritsen,
Acting Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-15016 Filed 6-4-98; 8:45 am]
BILLING CODE 3410-02-P