[Federal Register Volume 67, Number 180 (Tuesday, September 17, 2002)]
[Rules and Regulations]
[Pages 58511-58515]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-23551]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 955

[Docket No. FV02-955-1 FIR]


Vidalia Onions Grown in Georgia; Revision of Reporting and 
Assessment Requirements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (USDA) is adopting, as a final 
rule, without change, an interim final rule revising the reporting and 
assessment requirements prescribed under the marketing order for 
Vidalia onions grown in Georgia (order). The order regulates the 
handling of Vidalia onions grown in Georgia, and is administered 
locally by the Vidalia Onion Committee (Committee). This rule continues 
in effect the change from monthly shipment reporting to weekly 
reporting. It also continues in effect changes in when assessments are 
due and how delinquent assessments are handled. This rule provides the 
industry with more accurate and timely shipment and supply information 
and facilitates the collection of assessments.

EFFECTIVE DATE: October 17, 2002.

FOR FURTHER INFORMATION CONTACT: William Pimental, Southeast Marketing 
Field Office, Marketing Order Administration Branch, Fruit and 
Vegetable Programs, AMS, USDA, 799 Overlook Drive, Suite A, Winter 
Haven, FL 33884-1671; telephone: (863) 324-3375, Fax: (863) 325-8793; 
or George Kelhart, Technical Advisor, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence 
Avenue SW,. STOP 0237, Washington, DC 20250-0237; telephone: (202) 720-
2491, Fax: (202) 720-8938.
    Small businesses may request information on complying with this 
regulation by contacting Jay Guerber, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence 
Avenue, SW., STOP 0237, Washington, DC 20250-0237; telephone: (202) 
720-2491, Fax: (202) 720-8938, 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 order is effective under the Agricultural Marketing 
Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter 
referred to as the ``Act.''
    USDA 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 USDA 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 USDA 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 USDA'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 changes to the reporting and 
assessment requirements prescribed under the order. This rule continues 
in effect the change from monthly shipment reporting to weekly 
reporting. It also continues in effect changes in when assessments are 
due and how delinquent assessments are handled. This rule provides the 
industry with more accurate and timely shipment and supply information 
and facilitates assessment collection. The Committee unanimously 
recommended these changes at a meeting held on December 6, 2001.
    Section 955.60 of the order provides authority for the Committee to 
require handlers to file reports and provide other information as may 
be necessary for the Committee to perform its duties. Section 955.101 
of the regulations provides the requisite reporting requirements. 
Previously, handlers were required to file monthly reports including 
the name and address of the handler, the period covered in the report, 
the total Vidalia onions received by the handler, and the handler's 
total fresh market shipments.
    Section 955.42 provides the authority for the formulation of an 
annual budget of expenses and the collection of assessments from 
handlers to administer

[[Page 58512]]

the order. Section 955.42(f) provides the authority to impose a late 
payment charge or an interest charge or both, on any handler who fails 
to pay assessments in a timely manner and the authority to establish 
the time and rate of such charges. Section 955.142 of the rules and 
regulations outlines the procedures for applying interest charges to 
delinquent assessments.
    This rule continues in effect revisions to Sec.  955.101 requiring 
handlers to file shipping reports on a weekly, rather than a monthly, 
basis. This rule also continues in effect revisions to Sec.  955.142, 
specifying when assessments are due and adjusting the way interest is 
applied to delinquent assessments.
    Previously, Sec.  955.101 required handlers to provide the 
Committee with information regarding the volume of Vidalia onions they 
received and shipped during each month of the shipping season. The 
shipping reports were to be filed no later than seven days after the 
end of each shipping month. The Committee provided a form to assist 
handlers with supplying the required shipping information. The main 
fresh shipping season for Vidalia onions generally runs from April 
through June. However, over the past 10 years, the industry has 
developed and refined Controlled Atmosphere (CA) storage, allowing 
Vidalia onions to be shipped throughout the year.
    When the reporting requirement was originally implemented following 
the promulgation of the order in 1990, the Committee believed the best 
method for obtaining shipment data was by requiring handlers to report 
their volume of fresh market shipments at the end of each week. 
However, after the order had been in operation for a few seasons, the 
Committee found that many handlers considered weekly reporting too 
cumbersome. In the early 1990's, many Vidalia onion growers and 
handlers were small family operations. These operations did not pack 
large quantities or only packed for a limited time. Assessments owed 
were relatively small, and the industry found weekly reporting 
unnecessary and burdensome. Consequently, the Committee recommended a 
change to monthly reporting in 1993 (January 13, 1994, 59 FR 1896).
    In the early years of the order, if a handler missed a report and 
owed assessments for a short period of time, it did not create a 
significant problem. The entities were small and the volumes shipped 
and the assessment amounts owed were often minimal. However, the 
Vidalia onion industry has grown from approximately 3,700 acres in 
1989, to approximately 15,000 acres in 2001, producing a much larger 
volume of Vidalia onions. With advances in farming technology and 
changes in farm size, many smaller entities became part of larger 
enterprises or sell their onions to large handling operations rather 
than handle the onions themselves. These large operations can pack a 
considerable volume of Vidalia onions in a short amount of time. Under 
monthly reporting, the volumes shipped and assessments owed by a single 
handler can now be significant.
    The Committee uses the information in the shipment reports to 
improve decision-making and program administration with regard to 
marketing research, market development, and promotional activities. The 
more accurate the information obtained from handlers, the more precise 
the Committee can be in adjusting its marketing research and promotion 
efforts. The shipment information is also provided to the industry on a 
composite basis to aid growers and handlers in planning their 
individual operations and in making marketing decisions during the 
season.
    The reports are also used by the Committee to calculate the 
assessments owed by each handler. These reports are the Committee's 
best source for industry shipping data. Because these reports are so 
closely tied to industry information and assessment collection, it is 
imperative that the reports be both timely and accurate. Timely reports 
translate into information that is more exact and current and helps 
expedite the collection of assessments. However, the Committee had been 
experiencing problems receiving timely reports from some handlers. With 
handling operations increasing in size, delays in receiving reports 
were magnifying the industry's information and assessment collection 
problems because of the volume shipped and assessments owed.
    With handlers failing to file reports in a timely manner, the 
composite reports the Committee issues on this shipping data were 
compromised. Delayed reporting made available industry information 
inaccurate. In some years, the Committee had not received accurate 
monthly pack-out figures until the end of the season. Consequently, 
Committee reports based on this data were of limited value to the 
industry. In addition, in this time of rapidly changing markets, 
monthly reports offer handlers little insight into current market 
conditions. Because of these things, there was no reliable information 
regarding the amount of Vidalia onions in the current channels of 
commerce. Without good information regarding the supply of Vidalia 
onions available in the market, the pipelines became full, driving down 
prices.
    Delayed reporting also effected assessment collection. The 
Committee needs accurate and timely reporting to calculate and collect 
assessments due. Late reporting can lead to late assessment payments 
and corresponding interest charges on these late payments. If the 
handler has a small operation, this problem has little impact on the 
overall Committee budget. However, with the size of handler operations 
increasing, a larger handler can affect the Committee's cash flow and 
budget by falling behind in its reporting and with the corresponding 
assessment payments. This could force the Committee to delay, reduce, 
or eliminate projects due to lack of financial resources. The Committee 
does have the authority to go to lending institutions for operating 
capital, but prefers not to incur debt or the accompanying interest 
expense. Thus, it is important that reports and assessments be 
forwarded in a timely manner.
    To address these problems, the Committee voted unanimously to 
change the reporting requirement from monthly reporting to weekly 
reporting. Under this change, the shipping week is defined as Monday 
through Sunday. Reports for each shipping week are due no later than 4 
p.m. on Tuesday of the following week. Handlers are required to file 
reports for each season, with each new season beginning January 1. 
Handlers begin reporting the first week of the season in which they 
have shipments. In weeks when no shipments are made the handler is 
still required to file a report indicating that they had zero 
shipments. This continues until the handler files a final report for 
the season. The reporting form provided by the Committee has a space 
for the handler to indicate when they are filing their final report.
    The Committee believes this change reduces the problems with late 
reporting and delinquent assessments. This change gives Committee staff 
an earlier indication of potential problems. By identifying these 
potential problems sooner, the Committee staff can address them in a 
shorter period than under the monthly reporting requirement and before 
the volumes and assessments due grow to significant amounts.
    Weekly reporting compresses the reporting window and helps 
accelerate the compliance process. Identifying handlers that are not 
reporting can now be measured in weeks rather than months. With weekly 
reporting, the Committee's compliance officer has a better indication 
of which operating

[[Page 58513]]

handlers are filing timely reports and can concentrate compliance 
efforts on non-reporting handlers. A quicker response to potential 
compliance problems should help reduce reporting delays. Therefore, 
this change improves industry reporting and helps the Committee staff 
more accurately track industry shipments.
    The Committee believes weekly reporting also improves the accuracy 
and benefits of their composite reports. Handlers receive more accurate 
information regarding industry shipments and in a timelier manner. With 
a shipping week of Monday through Sunday, handlers are required to file 
reports no later than 4 p.m. on Tuesday following the week shipments 
were made. The Committee assembles composite reports by Wednesday and 
distributes them to handlers. Consequently, handlers have information 
on shipments and the supply of onions on the market on a timelier 
basis.
    Having weekly shipping data provides a clearer picture of market 
conditions and affords better information regarding the balance of 
supply and demand. This is expected to help handlers better address 
market swings, reduce market gluts, and increase grower returns.
    Because reporting and assessments are tied closely, the Committee 
believes this change also helps expedite the collection of assessments. 
Reducing the volume of delayed reporting provides the Committee with 
better, timelier information on which to determine assessments due. As 
with the filing of reports, the Committee staff has an earlier 
indication under weekly reporting of those handlers that are not paying 
their assessments in a timely manner. Again, the earlier a problem can 
be identified, the quicker it can be addressed and compliance and 
collection efforts can be started.
    Timely reports are important for both accurate reports and 
assessment collection. Therefore, the Committee recommended that the 
shipment reporting requirement in Sec.  955.101 be changed from monthly 
reporting to weekly reporting.
    In addition, this rule continues in effect revisions to Sec.  
955.101, to add information being reported by handlers but that was not 
specified in the provisions. Under the revised provisions, handlers 
report their name and address, the period covered by the report, the 
total onions received by the handler, the total fresh market onions 
shipped, as well as the amount of shipments from their own acreage, 
their total assessments due, the amount of onions sold, the volume of 
onions packed under contract for another handler and the handler 
name(s), onions sold to another handler, and information on onions 
placed in Controlled Atmosphere storage.
    This rule also continues in effect revisions to the rules and 
regulations regarding the handling of delinquent assessments. Section 
955.142 had stated that each handler must pay interest charges of 1 
percent per month on any unpaid assessments levied, and on any accrued 
unpaid interest beginning thirty days after the date of billing, until 
the delinquent handler's assessment plus applicable interest had been 
paid in full. This rule continues in effect changes specifying when 
assessments are due from handlers and adjusting the way interest is 
applied to delinquent assessments.
    Under past requirements, a handler reported shipments at the end of 
each month. The handler could then request to be billed for the 
assessments due on those shipments reported. The handler could further 
delay payment by holding the bill until the Committee sent a follow-up 
letter. This created budgeting problems and angered those handlers 
paying on time.
    To make the collection of assessments easier, timelier, and more 
cost-effective, the Committee voted to revise Sec.  955.142 by making 
assessments due at the time when the handler's shipping volume is 
required to be reported. With the change to weekly reporting, 
assessments are paid on a weekly basis for each week of shipments. 
Assessments are now due no later than 4 p.m. on Tuesday for those 
shipments made the previous week (Monday through Sunday). The option to 
request billing for assessments is no longer available.
    This change makes it easier to collect assessments. It is no longer 
necessary to keep track of who has paid, and who needs to be billed. 
Each handler's assessments are collected the same way and are due at 
the same time. With this change, the Committee also receives its money 
in a timelier manner. Rather than having to submit a bill and wait for 
payment, payment is due immediately on the date when the weekly 
shipments are required to be reported. This change also saves the 
Committee money by reducing mailing costs associated with having to 
bill handlers for assessments.
    This change also improves the Committee's cash flow. Rather than 
lump sum payments at the end of the season or large monthly 
collections, assessment income is received each week of the shipping 
season.
    Therefore, the Committee voted that Sec.  955.142 be changed so 
assessments are due no later than 4 p.m. on the Tuesday immediately 
following the week in which the shipments were made, at the same time 
weekly reports are due.
    Finally, this rule continues in effect revisions to Sec.  955.142 
that adjust the way interest charges are applied to delinquent 
assessments. Previously, Sec.  955.142 specified that handlers must pay 
interest of 1 percent per month on any unpaid assessments and on any 
accrued unpaid interest beginning thirty days after the date of 
billing. The Committee recommended changing this language so that 
interest accrues at 1 percent per week on any unpaid assessments and 
any accrued unpaid interest beginning with the day the assessments were 
due until the delinquent handler's assessment plus applicable interest 
has been paid in full. Consequently, interest begins accruing on 
delinquent assessments on the Wednesday immediately following the 
Tuesday when the assessments were due.
    The Committee also voted to increase the interest charged to 
encourage handlers to pay on time. In the past, some handlers waited 
until the end of the season to pay their assessments, in a way, forcing 
the Committee to basically loan them the assessment money.
    This change provides more incentive for handlers to pay in a timely 
manner. The additional interest charge also helps compensate the 
Committee for the extra effort and expenditures required to collect the 
late assessments. This change is expected to improve assessment 
collection, provide more timely payments, reduce compliance costs, and 
reduce the need for the Committee to borrow operating funds.
    The Committee has been looking for ways to improve the timeliness 
of reports and the payment of assessments. The Committee believes these 
changes help address these issues.

Final Regulatory Flexibility Analysis

    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

[[Page 58514]]

behalf. Thus, both statutes have small entity orientation and 
compatibility.
    There are approximately 133 producers of Vidalia onions in the 
production area and approximately 109 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 $750,000, and small agricultural service 
firms, which include handlers, 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 grower price for fresh Vidalia onions during 
the 2001 season was $13.75 per 50-pound bag. Total Vidalia onion 
shipments for the 2001 season were around 3,592,200 50-pound bags. 
Using available data, about 97 percent of Vidalia onion handlers could 
be considered small businesses under the SBA definition. In addition, 
based on acreage, production, grower prices as reported by the National 
Agricultural Statistics Service, and the total number of Vidalia onion 
growers, the average annual grower revenue is below $750,000. In view 
of the foregoing, it can be concluded that the majority of handlers and 
producers of Vidalia onions may be classified as small entities.
    The Committee had not been receiving timely reports from some 
handlers. With handling operations increasing in size, this had a 
negative impact on both industry information and assessment collection 
because the quantities shipped and assessments owed by some delinquent 
handlers were significant. This rule continues to revise Sec.  955.101, 
requiring handlers to file shipping reports on a weekly basis rather 
than monthly and increases the information requested. This rule also 
continues to revise Sec.  955.142, specifying when assessments are due 
and adjusting the way interest is applied to delinquent assessments. By 
identifying problems sooner, they can be addressed in a shorter period 
than under monthly reporting and before the volumes and assessments due 
grow to significant amounts. This rule also encourages handlers to 
report and pay their required assessments in a timely manner to avoid 
increased interest charges and other compliance activities. These 
changes should help reduce the problems with late reporting and 
assessment collection and provide more accurate information on 
shipments and supply. Authority for these actions is provided in 
Sec. Sec.  955.42 and 955.60 of the order. The Committee unanimously 
recommended these changes at a December 6, 2001, meeting.
    With weekly reporting, the Committee has more accurate and timely 
information regarding industry shipments. Having this information and 
the resulting reports helps both the Committee and the industry make 
better decisions.
    This rule offers the potential for cost savings. Under this change, 
the Committee and the industry have access to more current information. 
The Committee is able to use this data when considering marketing 
research and promotion funding and activities. The industry can use the 
information to improve marketing decisions. Having access to 
information that is more current should help the industry balance 
supply with demand, thus reducing periods of oversupply and price 
variations. Even the slightest increase in price would more than 
compensate for any costs related to these changes.
    These changes also are expected to reduce assessment collection 
costs for the Committee. By removing the option to be billed for 
assessments, the Committee is saving both employee time and postage. 
This rule may also lower compliance costs for the Committee. By 
reducing the number of handlers that are reporting late, the Committee 
cuts costs associated with identifying these handlers. This should 
decrease the overall number of compliance cases.
    In addition, increasing the interest applied to late assessments 
helps curtail the volume of delinquent assessments. Such a reduction 
also eases staff and mailing costs directed toward collecting past due 
assessments.
    This rule will have a positive impact on affected entities. The 
changes were recommended to improve available industry information, 
facilitate assessment collection, and to reduce costs. The availability 
of more timely and accurate industry information will benefit both 
large and small handling operations. The changes this rule makes in 
terms of assessment collection mean that all handlers are assessed the 
same way, with their assessments due at the same time. The reduction in 
Committee costs is also expected to benefit all handlers regardless of 
their size. Consequently, the opportunities and benefits of this rule 
are expected to be equally available to all.
    An alternative to the actions recommended by the Committee was 
considered prior to making the final recommendations. The alternative 
considered was implementing a mandatory inspection program under the 
marketing order. However, the Committee recognized this alternative 
would require amending the order and take further time to implement. 
While not ruling out this alternative in terms of future action, the 
Committee believed the recommended actions give them a more timely 
solution while they consider other alternatives.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), AMS obtained emergency approval for a new information 
collection request under OMB No. 0581-NEW for Vidalia Onions Grown in 
Georgia, Marketing Order No. 955. The emergency request was necessary 
because insufficient time was available to follow normal clearance 
procedures. This information collection will be merged with the forms 
currently approved for use under OMB No. 0581-0178 ``Vegetable and 
Specialty Crops'', and replaces the existing FV-181 ``Vidalia Onion 
Handler Report Form.''
    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 addition, as 
noted in the initial regulatory flexibility analysis, USDA has not 
identified any relevant Federal rules that duplicate, overlap or 
conflict with this rule.
    The Committee's meeting was widely publicized throughout the 
Vidalia onion industry and all interested persons were invited to 
attend the meeting and participate in Committee deliberations on all 
issues. Like all Committee meetings, the December 6, 2001, meeting was 
a public meeting and all entities, both large and small, were able to 
express views on this issue.
    An interim final rule concerning this action was published in the 
Federal Register on June 20, 2002. Copies of the rule were mailed by 
the Committee's staff to all Committee members and Vidalia onion 
handlers. In addition, the rule was made available through the Internet 
by the Office of the Federal Register and USDA. That rule provided for 
a 60-day comment period, which ended August 19, 2002. No comments were 
received.
    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.
    After consideration of all relevant material presented, including 
the Committee's recommendation, and other information, it is found that

[[Page 58515]]

finalizing the interim final rule, without change, as published in the 
Federal Register (67 FR 41811, June 20, 2002) will tend to effectuate 
the declared policy of the Act.

List of Subjects in 7 CFR Part 955

    Onions, Marketing agreements, Reporting and recordkeeping 
requirements.

PART 955--VIDALIA ONIONS GROWN IN GEORGIA

    Accordingly, the interim final rule amending 7 CFR part 955 which 
was published at 67 FR 41811 on June 20, 2002, is adopted as a final 
rule without change.

    Dated: September 11, 2002.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 02-23551 Filed 9-16-02; 8:45 am]
BILLING CODE 3410-02-P