[Federal Register Volume 66, Number 7 (Wednesday, January 10, 2001)]
[Proposed Rules]
[Pages 1915-1917]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-717]



[[Page 1915]]

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 955

[Docket No. FV01-955-1 PR]


Vidalia Onions Grown in Georgia; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule would increase the assessment rate established for 
the Vidalia Onion Committee (Committee) for the 2001 and subsequent 
fiscal periods from $0.10 to $0.12 per 50-pound bag of Vidalia onions 
handled. The Committee locally administers the marketing order, which 
regulates the handling of Vidalia onions grown in Georgia. 
Authorization to assess Vidalia onion handlers enables the Committee to 
incur expenses that are reasonable and necessary to administer the 
program. The fiscal period begins on January 1 and ends December 31. 
The assessment rate would remain in effect indefinitely unless 
modified, suspended, or terminated.

DATES: Comments must be received by February 9, 2001.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent to the Docket Clerk, 
Marketing Order Administration Branch, Fruit and Vegetable Programs, 
AMS, USDA, room 2525-S, P.O. Box 96456, Washington, DC 20090-6456; Fax: 
(202) 720-5698; or E-mail: [email protected]. Comments should 
reference the docket number and the date and page number of this issue 
of the Federal Register and will be available for public inspection in 
the Office of the Docket Clerk during regular business hours, or can be 
viewed at: http://www.ams.usda.gov/fv/moab.html.

FOR FURTHER INFORMATION CONTACT: William Pimental, Marketing 
Specialist, Southeast Marketing Field Office, Fruit and Vegetable 
Programs, AMS, USDA, P.O. Box 2276, Winter Haven, FL 33883-2276; 
telephone: (863) 299-4770, Fax: (863) 299-5169; 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 and Order No. 955, (7 CFR part 955), regulating the handling 
of Vidalia onions grown in Georgia, 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. Under the marketing order now in effect, Vidalia onion 
handlers are subject to assessments. Funds to administer the order are 
derived from such assessments. It is intended that the assessment rate 
as proposed herein would be applicable to all assessable Vidalia onions 
beginning on January 1, 2001, and continue until amended, suspended, or 
terminated. 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. Such 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 would increase the assessment rate established for the 
Committee for the 2001 and subsequent fiscal periods from $0.10 to 
$0.12 per 50-pound bag or equivalent of Vidalia onions.
    The Vidalia onion marketing order provides authority for the 
Committee, with the approval of the Department, to formulate an annual 
budget of expenses and collect assessments from handlers to administer 
the program. The members of the Committee are producers and producer/
handlers of Vidalia onions. They are familiar with the Committee's 
needs and with the costs for goods and services in their local area and 
are thus in a position to formulate an appropriate budget and 
assessment rate. The assessment rate is formulated and discussed in a 
public meeting. Thus, all directly affected persons have an opportunity 
to participate and provide input.
    For the 1999-2000 and subsequent fiscal periods, the Committee 
recommended, and the Department approved, an assessment rate that would 
continue in effect from fiscal period to fiscal period unless modified, 
suspended, or terminated by the Secretary upon recommendation and 
information submitted by the Committee or other information available 
to the Secretary.
    The Committee met on November 16, 2000, and discussed 2001 
expenditures of $411,102 and an increased assessment rate of $0.12 per 
50-pound bag or equivalent of onions. The Committee held a telephone 
meeting on November 27, 2000, and recommended this budget and 
assessment rate change in a vote of 5 in favor and 3 opposed. The three 
members opposed objected to increasing the assessment rate following a 
season with reduced returns.
    The recommended assessment rate of $0.12 is $0.02 higher than the 
rate currently in effect. Last year, budgeted expenditures were 
$421,600 and the assessment rate was $0.10. The Committee projected 4.2 
million assessable 50-pound bags of Vidalia onions for the 2000 fiscal 
period. The actual quantity of assessable onions was closer to 
3,908,000 50-pound bags. Because of this shortfall, the Committee had 
to use its authorized reserve funds to cover approved expenses. The 
Committee believes that fewer acres of Vidalia onions will be planted 
in 2001 because of lower grower returns and high yield losses last 
season. The quantity of assessable Vidalia Onions for the 2001 fiscal 
period is projected to be less than in previous seasons. Therefore, the 
increase in the assessment rate is needed to cover expenses and to 
replenish the reserve fund.
    The major expenditures recommended by the Committee for the 2001 
fiscal period include $135,227 for administrative costs, $37,850 for 
compliance activities, $188,025 for promotional activities, and $50,000 
for

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research projects. Budgeted expenses for these items in 1999-2000 were 
$135,127, $31,800, $175,000, and $47,000 respectively.
    The assessment rate recommended by the Committee was derived by 
dividing anticipated expenses by expected shipments of Vidalia onions. 
Vidalia onion shipments for the year are estimated at 3.6 million 50-
pound bags and should provide $432,000 in assessment income at the 
proposed rate. Income derived from handler assessments, along with 
interest income and funds from the Committee's authorized reserve, 
would be adequate to cover budgeted expenses. Income in excess of 
expenses would be added to the Committee's reserve fund. Funds in the 
reserve (currently around $77,000) would be kept within the maximum 
permitted by the order (about three fiscal period's expenses; 
Sec. 955.44).
    The Committee vote was 5 votes in support of the increase and 3 
votes opposed. Those casting negative votes stated they were opposed 
because of the relatively poor grower returns received in fiscal year 
2000 and the need for fiscal conservatism. The majority of the 
Committee members pointed out the need for funds to cover the estimated 
expenses for 2001, to build up its operating reserve, and to pay any 
loans that might be needed to cover expenses until assessment monies 
are received in the spring of 2001. Also, the positive voters pointed 
out that without the increase, there would be limited funds for 
promotion and research which was the reason for instituting the 
marketing order in the first place. Therefore, the Committee 
recommended the increase in the assessment rate.
    The proposed assessment rate would continue in effect indefinitely 
unless modified, suspended, or terminated by the Secretary upon 
recommendation and information submitted by the Committee or other 
available information.
    Although this assessment rate would be in effect for an indefinite 
period, the Committee would continue to meet prior to or during each 
fiscal period to recommend a budget of expenses and consider 
recommendations for modification of the assessment rate. The dates and 
times of Committee meetings are available from the Committee or the 
Department. Committee meetings are open to the public and interested 
persons may express their views at these meetings. The Department would 
evaluate Committee recommendations and other available information to 
determine whether modification of the assessment rate is needed. 
Further rulemaking would be undertaken as necessary. The Committee's 
2001 budget and those for subsequent fiscal periods would be reviewed 
and, as appropriate, approved by the Department.
    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Agricultural Marketing Service (AMS) has considered the 
economic impact of this rule 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 133 producers of Vidalia onions in the 
production area and approximately 102 handlers subject to regulation 
under the marketing order. Small agricultural producers are defined by 
the Small Business Administration (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.
    Based on the Georgia Agricultural Statistical Service and Committee 
data, the average annual f.o.b. price for fresh Vidalia onions during 
the 2000 season was $13.00 per 50-pound bag for all shipments, and 
total shipments for the 2000 season were around 3.9 million bags of 
Vidalia onions. Many Vidalia onion handlers ship other vegetable 
products which are not included in the Committee data but would 
contribute further to handler receipts.
    Using the available data, about 97 percent of Vidalia onion 
handlers could be considered small businesses under the SBA definition. 
The majority of Vidalia onion producers and handlers may be classified 
as small entities.
    This rule would increase the assessment rate established for the 
Committee and collected from handlers for the 2001 and subsequent 
fiscal periods from $0.10 to $0.12 per 50-pound bag of Vidalia onions. 
The Committee recommended 2001 expenditures of $411,102 and an 
assessment rate of $0.12 per 50-pound bag or equivalent. The proposed 
assessment rate of $0.12 is $0.02 higher than the 2000 rate. The 
quantity of assessable Vidalia onions for the 2001 fiscal period is 
estimated at 3.6 million 50-pound bags. Thus, the $0.12 rate should 
provide $432,000 in assessment income. Income derived from handler 
assessments, along with interest income would be adequate to cover 
budgeted expenses and any excess funds would be placed in the reserve 
fund.
    The major expenditures recommended by the Committee for 2001 fiscal 
period include $135,227 for administrative costs, $37,850 for 
compliance activities, $188,025 for promotional activities, and $50,000 
for research projects. Budgeted expenses for these items in 1999-2000 
were $135,127, $31,800, $175,000, and $47,000 respectively.
    The Committee projected 4.2 million assessable 50-pound bags of 
Vidalia onions for the 2000 fiscal period. The actual quantity of 
assessable Vidalia onions was closer to 3.9 million 50-pound bags. 
Because of this shortfall, the Committee had to use about $20,000 from 
its authorized reserve fund to cover approved expenses. The quantity of 
assessable Vidalia onions for the 2001 fiscal period is projected to be 
3.6 million 50-pound bags, which is less than in previous seasons. To 
cover necessary expenses and to bring the reserve fund back to an 
acceptable level (about $50,000), the Committee voted to recommend an 
increase in its assessment rate.
    The Committee reviewed and recommended 2001 expenditures of 
$411,102, which included increases in expenditures for compliance, 
promotion, and research. Prior to arriving at this budget, the 
Committee considered information from various sources, such as the 
Budget Subcommittee, the Research Subcommittee, and the Advertising and 
Promotion Subcommittee. Alternative expenditure levels and assessment 
rates were discussed by these groups and the full Committee, based upon 
the relative value of various promotion and research projects to the 
Vidalia onion industry. With assessable onions in 2001 estimated to 
total 3.6 million 50-pound bags, the present assessment rate of $0.10 
was too low to cover estimated expenses and would leave no funds to 
replenish the reserve fund. The Committee then considered a $0.15 cent 
assessment rate, but it was not supported. While the majority of the 
Committee believed that many growers would support a $0.02 increase in 
assessments, they did not, however, believe a $0.05 increase in 
assessments would be supported by a majority of the industry at this 
time. Therefore, this alternative was rejected.
    The assessment rate of $0.12 per 50-pound bag of assessable Vidalia 
onions was then determined by dividing the total recommended budget by 
the

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quantity of assessable Vidalia onions, estimated at 3.6 million 50-
pound bags for the 2001 fiscal period. This would generate 
approximately $22,500 above the anticipated expenses, which the 
Committee determined to be acceptable.
    A review of historical information and preliminary information 
pertaining to the upcoming fiscal period indicates that the grower 
price for the 2001 fiscal period could range between $10.00 and $15.00 
per 50-pound bag of Vidalia onions. Therefore, the estimated assessment 
revenue for the 2001 fiscal period as a percentage of total grower 
revenue could range between .08 and 1.2 percent.
    This action would increase the assessment obligation imposed on 
handlers. While assessments impose some additional costs on handlers, 
the costs are minimal and uniform on all handlers. Some of the 
additional costs may be passed on to producers. However, these costs 
would be offset by the benefits derived by the operation of the 
marketing order. In addition, the Committee's meeting was widely 
publicized throughout the Vidalia onion production area and all 
interested persons were invited to attend the meeting and participate 
in Committee deliberations on all issues. Like all Committee meetings, 
the November 16, 2000, meeting was a public meeting and all entities, 
both large and small, were able to express views on this issue. 
Finally, interested persons are invited to submit information on the 
regulatory and informational impacts of this action on small 
businesses.
    This proposed rule would impose no additional reporting or 
recordkeeping requirements on either small or large Vidalia 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 sector agencies.
    The Department has not identified any relevant Federal rules that 
duplicate, overlap, or conflict with this rule.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: 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.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposed rule. Thirty days is deemed appropriate 
because: (1) The 2001 fiscal period begins on January 1, 2001, and the 
marketing order requires that the rate of assessment for each fiscal 
period apply to all assessable Vidalia onions handled during such 
fiscal period; (2) the Committee needs to have sufficient funds to pay 
its expenses which are incurred on a continuous basis; and (3) handlers 
are aware of this action which was recommended by the Committee and is 
similar to other assessment rate actions issued in past years.

List of Subjects in 7 CFR Part 955

    Marketing agreements, Onions, Reporting and recordkeeping 
requirements.
    For the reasons set forth in the preamble, 7 CFR part 955 is 
proposed to be amended as follows:

PART 955--VIDALIA ONIONS GROWN IN GEORGIA

    1. The authority citation for 7 CFR parts 955 continues to read as 
follows:

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

    2. Section 955.209 is revised to read as follows:


Sec. 955.209  Assessment rate.

    On and after January 1, 2001, an assessment rate of $0.12 per 50-
pound bag or equivalent is established for Vidalia onions.

    Dated: January 4, 2001.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 01-717 Filed 1-9-01; 8:45 am]
BILLING CODE 3410-02-P