[Federal Register Volume 65, Number 91 (Wednesday, May 10, 2000)]
[Rules and Regulations]
[Pages 29942-29945]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-11642]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 959

[Docket No. FV00-959-2 FIR]


Onions Grown in South Texas; Change in Container 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 
revising the container requirements for shipping onions to fresh 
processors under the South Texas onion marketing order. 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 continues to provide handlers additional marketing 
flexibility by allowing them to ship onions for peeling, chopping, and 
slicing in bulk trailer loads, 48-inch deep bulk bins, and tote bags. 
These changes allow the South Texas onion industry to better meet the 
needs of fresh processors and allow the industry to compete with other 
suppliers of onions for fresh processing.

EFFECTIVE DATE: June 9, 2000.

FOR FURTHER INFORMATION CONTACT: Belinda G. Garza, Regional Manager, 
McAllen Marketing Field Office, Marketing Order Administration Branch, 
Fruit and Vegetable Programs, 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) 720-
5698.
    Small businesses may request information on complying with this 
regulation by contacting Jay Guerber, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, P.O. Box 96456, room 
2525-S, Washington, DC 20090-6456; telephone: (202) 720-2491, Fax: 
(202) 720-5698, or E-mail: [email protected].

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 to revise the container requirements for onion 
shipments for peeling, chopping, and slicing prescribed under the South 
Texas onion marketing order. Handlers are allowed to ship onions for 
peeling, chopping, and slicing in bulk trailer loads, 48-inch deep bulk 
bins, and tote bags. Previously, onions for these purposes could only 
be shipped in 47 inch by 37\1/2\ inch by 36 inch deep bulk bins, having 
a volume of 63,450 cubic inches (hereinafter referred to as the ``36-
inch deep bulk bin''), or containers deemed similar by the Committee. A 
dimension tolerance for the bulk containers was also added. All 
handlers shipping onions for peeling, chopping, and slicing will 
continue to be required to meet grade, size, inspection, and safeguard 
requirements. The additional method of shipment and containers allows 
the South Texas onion industry to better meet the needs of fresh 
processors and allows the industry to compete with other suppliers of 
onions for fresh processing.
    These changes were first unanimously recommended by the Committee 
at its meeting on September 16, 1999. At that meeting, the Chairman 
appointed a subcommittee to review the Committee's recommendations. On 
October 19, 1999, the Committee met again and unanimously approved the 
subcommittee's recommendations detailed herein.
    Section 959.52 of the South Texas onion marketing order authorizes 
the establishment of grade, size, quality, maturity, and pack and 
container regulations for shipments of onions. Section 959.52(c) allows 
for the modification, suspension, or termination of such regulations 
when warranted. Section 959.53 authorizes changes to the order's 
regulations to facilitate the handling of onions for relief, charity, 
experimental purposes, export, or other purposes recommended by the 
Committee and approved by the Secretary. Section 959.54 of the order 
provides authority for the Committee to establish that onions handled 
for special purposes are handled only as authorized. Section 959.60 
provides that whenever onions are regulated pursuant to Sec. 959.52, 
such onions must be inspected by the inspection service and certified 
as meeting the applicable requirements. Section 959.80 of the order 
authorizes handler reporting requirements.
    Section 959.322(f) of the order's rules and regulations provides 
specific safeguards for certain special purpose shipments of onions. 
Furthermore, paragraph (f)(3) of Sec. 959.322 provides authority for 
the shipment of onions for fresh peeling, chopping, and slicing in 36-
inch deep bulk bins, or containers deemed similar by the Committee. 
Such shipments are exempt from the container requirements specified in 
paragraph (c) of Sec. 959.322, but are

[[Page 29943]]

required to be handled in accordance with the safeguard provisions of 
Sec. 959.54, and meet the grade requirements in paragraph (a), the size 
requirements in paragraph (b), the inspection requirements in paragraph 
(d), and the safeguard requirements in paragraph (g) of Sec. 959.322.
    Previously, Sec. 959.322(f)(3) allowed onion shipments for peeling, 
chopping, and slicing in 36-inch deep bulk bins, or containers deemed 
similar by the Committee. The Committee recommended that shipments of 
onions to these outlets be authorized in bulk trailer loads, 48-inch 
deep bulk bins (with the same length and width dimensions as the 36-
inch deep bulk bin), and tote bags, and that the provisions on 
containers deemed similar be removed because it had caused confusion in 
the industry. In its place, the Committee recommended implementation of 
a dimension tolerance.
    The market for onions for fresh processing uses has grown 
dramatically in the last five years. The food service industry is the 
fastest growing market for onions in the United States. Consumption of 
onions has increased, especially for onions used in restaurants, salad 
bars, and cafeterias in fresh peeled, chopped, or sliced form. Fresh 
process is an increasingly important market for the domestic onion 
industry, and is expected to continue growing.
    Buyers of onions for fresh processing continually demand 
flexibility in container availability, and the Committee is always 
looking for ways to strengthen and expand the market for South Texas 
onions. The Committee believes that South Texas may enhance its ability 
to take full advantage of available marketing opportunities for fresh 
peeling, chopping, and slicing onions with the more flexible shipping 
container requirements. The more flexible containers and method of 
shipment allow the South Texas onion industry to better meet the needs 
of fresh processors and allow the industry to better compete with other 
suppliers of onions for fresh processing. The changes will open new 
markets for South Texas and help the industry increase its fresh 
processed onion market share. The Committee estimates that these 
changes will help the industry double shipments into these outlets.
    Because the demand for fresh processed onions is increasing and 
Texas has not been able to market more of its crop in the conveyances 
and containers the trade desires, the trade has been going to other 
competing areas, that are not restricted by regulations, leaving Texas 
at a disadvantage. Other onion-growing areas can ship onions in bulk 
loads for peeling, chopping, and slicing purposes, but the South Texas 
onion industry could not do so because the regulations restricted 
shipments to 36-inch deep bulk bins. Competition from other onion 
production areas demands that the South Texas onion industry be able to 
quickly respond to buyer demands for other types of shipments. Also, 
other onion producing areas not bound by restrictions have the 
flexibility to ship fresh processing onions as needed by buyers. The 
added flexibility of these changes allows handlers to meet the 
competition from other areas and better meet buyer's needs.
    The Committee also recommended adding tightly-woven mesh plastic 
tote bags 36 inches by 36 inches by 66 inches long with a capacity of 
approximately 2,000 pounds of onions for shipment to fresh processors. 
These tote bags are returnable and have four handles that are placed to 
fit forklifts. Ties are attached to each end of the bags and the onions 
are dumped by unfastening the bottom tie. Use of these bags helps speed 
up the unloading process, saving time and money for the fresh 
processors.
    The total volume specification of 63,450 cubic inches for the 36-
inch bulk bin previously included in the regulation did not allow any 
flexibility in the dimension of the container and the phrase ``or 
containers deemed similar by the committee'' lacked specificity and 
resulted in confusion. The Committee believed that a more precise 
tolerance was needed so that there was no room for misinterpretation by 
the industry. The Committee, therefore, recommended removing the phrase 
``and having a volume of 63,450 cubic inches, or containers deemed 
similar by the committee'' and adding in its place provisions 
establishing a dimension tolerance of 2 inches for each dimension on 
all bulk containers used for shipping onions for peeling, chopping, and 
slicing. The 2-inch tolerance for each dimension on all bulk containers 
allows handlers to pack onions for peeling, chopping, and slicing in 
containers with dimensions slightly different from the sizes specified 
in the regulation. Identifying a specific dimension tolerance in the 
regulation prevents misunderstandings, and provides handlers packing 
flexibility. The addition of the container dimension tolerance 
recognizes the difficulty in producing containers with precise 
measurements all of the time.
    The Committee recommended that the regulation specify that only 3-
inch and larger onions be shipped for these purposes because smaller 
onions cannot be processed efficiently using available machinery. 
However, the provisions under which this action was being implemented 
did not authorize the establishment of a minimum size different than 
the 1-inch minimum currently in place for all shipments. Therefore, 
this recommendation was not implemented. Lastly, minor changes were 
made to the handling regulation for clarity.
    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 80 producers of South Texas onions in the 
production area and 37 handlers subject to regulation under the 
marketing order. Small agricultural producers have been defined by the 
Small Business Administration (SBA) (13 CFR 121.201) as those having 
annual receipts less than $500,000, and small agricultural service 
firms are defined as those whose annual receipts are less than 
$5,000,000.
    Most of the handlers in South Texas are vertically integrated 
corporations involved in producing, shipping, and marketing onions. For 
the 1998-99 marketing year, onions produced in the production area were 
shipped by the industry's 37 handlers with the average and median 
volume handled being 147,669 and 102,478 fifty-pound bag equivalents, 
respectively. In terms of production value, total revenues from the 37 
handlers were estimated to be $43.7 million, with average and median 
revenues being $1.1 million, and $820,000, respectively.
    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

[[Page 29944]]

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 all the 37 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 80 producers may be classified as 
small entities based on the SBA definition if only their revenue from 
spring onions is considered. When revenues from all sources are 
considered, a majority of the producers would not be considered small 
entities because receipts would exceed $500,000.
    This rule continues to revise the container requirements for onion 
shipments for peeling, chopping, and slicing prescribed under the South 
Texas onion marketing order. Shipments of onions for these purposes are 
permitted in bulk loads, 48-inch deep bulk bins, and tote bags, in 
addition to the approved 36-inch deep bulk bin. A dimension tolerance 
for the bulk containers was also added. All handlers shipping onions 
for peeling, chopping, and slicing continue to be required to meet 
grade, size, inspection, and safeguard requirements.
    This rule change continues to allow South Texas onion handlers to 
supply existing markets, opens up new markets to satisfy fresh 
processor demand, and allows the industry to be more competitive in the 
marketplace. Allowing shipments of onions to fresh processors in bulk 
loads, 48-inch bulk bins, and tote bags, in addition to the 36-inch 
deep bulk bin, is expected by the Committee to double the shipments of 
Texas onions to fresh processed buyers. The increase in shipments is 
expected because the changes allow the South Texas onion industry to 
better meet the needs of fresh processors and allow the industry to 
compete with other suppliers of onions for fresh processing.
    At the meetings, the Committee discussed the impact of these 
changes on handlers and producers and believed that the benefits of 
this rule were not expected to be disproportionately greater or less 
for small handlers or producers than for larger entities. The increased 
shipping flexibility is equally beneficial to all shippers regardless 
of size.
    An alternative to this action was to maintain the status quo, 
however, the Committee believed that the regulation did not address the 
needs of handlers desiring to expand their fresh process onion 
marketing efforts. The Committee believed that the regulations should 
be modified to address these needs. The Committee further believed that 
not allowing different types of bulk shipments for peeling, chopping, 
and slicing would be detrimental to the South Texas onion industry. 
Allowing shipments of onions in additional bulk bins and in bulk loads 
will meet the industry's objective of marketing more onions. These 
changes provide the industry with additional marketing opportunities 
and allow the industry to be more competitive.
    All handlers making onion shipments for relief, charity, 
processing, experimental purposes, or peeling, chopping, and slicing 
are required to apply for and obtain a Certificate of Privilege from 
the Committee to make such shipments. No additional reporting burden is 
estimated in making such applications because all 37 of the handlers in 
the Texas onion industry routinely apply each season for these 
certificates and this is expected to continue. However, this action 
imposes additional reporting requirements on the 37 onion handlers. 
Because this action fosters increased shipments, the handlers will file 
more Reports of Special Purpose Onion Shipments. This report 
accompanies each shipment and takes about .083 hours to complete. It is 
used to verify proper disposition of the onions. Previously, each of 
the 37 handlers shipped approximately 15 loads of onions for special 
purposes. The Committee estimates that this rule change will double the 
number of shipments going to these outlets to 30 loads per handler, 
which will result in an estimated burden to the previously-mentioned 37 
handlers of about 92 hours.
    As with all Federal marketing order programs, reports and forms are 
periodically reviewed to reduce information requirements and 
duplication by industry and public sector agencies.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the information collection requirements that are contained 
in this rule have been approved by the Office of Management and Budget 
(OMB) and have been assigned OMB No. 0581-0187. In addition, as noted 
in the initial regulatory flexibility analysis, the Department has not 
identified any relevant Federal rules that duplicate, overlap, or 
conflict with this final rule.
    Further, the Committee's meetings were widely publicized throughout 
the onion industry and all interested persons were invited to attend 
the meetings and participate in Committee deliberations on all issues. 
Like all Committee meetings, the October 19, 1999, meeting was a public 
meeting and all entities, both large and small, were able to express 
their views on this issue. The Committee itself is composed of 17 
members, of which 10 are producers and 7 are handlers. Also, the 
Committee has subcommittees to review certain issues and make 
recommendations to the Committee. The subcommittee met on October 12, 
1999, and discussed this issue in detail. The meeting was a public 
meeting and both large and small entities were able to participate and 
express their views. Finally, interested persons are 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 16, 2000. Copies of the rule were mailed 
by the Committee's staff to all Committee members and onion handlers. 
In addition, the rule was made available through the Internet by the 
Office of the Federal Register. That rule provided for a 60-day comment 
period which ended April 17, 2000. No comments were received.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at the 
following web site: http://www.ams.usda.gov/fv/moab.html. Any questions 
about the compliance guide should be sent to Jay Guerber at the 
previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    After consideration of all relevant material presented, including 
the Committee's unanimous recommendation, and other information, it is 
found that finalizing the interim final rule, without change, as 
published in the Federal Register (65 FR 7711, February 16, 2000) 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.

PART 959--ONIONS GROWN IN SOUTH TEXAS

    Accordingly, the interim final rule amending 7 CFR part 959 which 
was published at 65 FR 7711 on February 16,

[[Page 29945]]

2000, is adopted as a final rule without change.

    Dated: May 4, 2000.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 00-11642 Filed 5-9-00; 8:45 am]
BILLING CODE 3410-02-P