[Federal Register Volume 69, Number 157 (Monday, August 16, 2004)]
[Rules and Regulations]
[Pages 50286-50289]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-18612]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 956

[Docket No. FV04-956-1 FIR]


Sweet Onions Grown in the Walla Walla Valley of Southeast 
Washington and Northeast Oregon; Establishment of Special Purpose 
Shipping Regulations and Modification of Reporting 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 that established procedures 
to allow the grading, packing, or storing of Walla Walla sweet onions 
outside the production area established under the Walla Walla sweet 
onion marketing order, and modified handler reporting requirements. The 
marketing order regulates the handling of sweet onions grown in the 
Walla Walla Valley of Southeast Washington and Northeast Oregon and is 
administered locally by the Walla Walla Sweet Onion Marketing Committee 
(Committee). Allowing sweet onion market preparation to occur outside 
the production area increases the marketing options for Walla Walla 
sweet onions and may reduce marketing costs. Modification of the 
reporting requirements contributes to the efficient operation of the 
program and enhances compliance with the special purpose shipment 
procedures established in this rule.

EFFECTIVE DATE: September 15, 2004.

FOR FURTHER INFORMATION CONTACT: Barry Broadbent, Marketing Specialist, 
Northwest Marketing Field Office, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, 1220 SW., Third 
Avenue, Suite 385, Portland, Oregon 97204-2807; Telephone: (503) 326-
2724; Fax: (503) 326-7440; or e-mail: [email protected]; 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. 956, both as amended (7 CFR part 956), 
regulating the handling of Walla Walla sweet onions grown in Southeast 
Washington and Northeast Oregon, 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.''
    The Department of Agriculture (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 the 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 the 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 the 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.
    Minimum grade, size, maturity, container, and pack requirements are 
authorized under the order, but currently only container markings are 
regulated. This rule continues in effect the implementation of 
procedures and safeguard requirements that allow grading, packing, or 
storing of Walla Walla sweet onions outside the production area, but 
within the States of Oregon and Washington. Persons desiring to ship, 
as well as those desiring to receive Walla Walla sweet onions for 
grading, packing, or storing outside the production area must apply and 
report to the Committee on forms provided by the Committee. This rule 
also continues in effect the additional requirement that handlers must 
submit a preseason registration form as well as provide additional 
information on the handler's shipment statement.
    Section 956.63 of the order provides authority for the USDA to 
issue special regulations to facilitate the shipping of Walla Walla 
sweet onions for grading, packing, or storing outside the production 
area. Further, Sec.  956.66 provides authority for the establishment of 
such safeguards as may be necessary to ensure that Walla Walla sweet 
onions are shipped for the purpose so authorized. Reporting 
requirements are authorized in Sec.  956.80.
    The Committee met on December 8, 2003, and unanimously recommended 
the establishment of procedures and safeguard requirements to allow the 
grading, packing, or storing of Walla Walla sweet onions outside the 
production area. At that meeting, the Committee also unanimously 
recommended expanding the current handler reporting requirements to 
include a preseason registration form. The Committee met again on 
February 10, 2004, and made a unanimous recommendation to broaden the 
scope of the handler shipment statement to include a listing of 
producers whose product was handled and the quantity handled for each 
producer. Committee members believe that this rule will: (1) Allow 
shippers to use grading, packing, or storing facilities that will be 
most beneficial to their individual circumstances; (2) contribute to 
the efficient operation of the program by improving Committee 
information; and (3) enhance compliance with the provisions of the 
order.
    The grading, packing, and storing costs associated with preparing 
Walla Walla sweet onions for market may vary between onion packing 
facilities inside and outside the production area. There may also be 
differences in the type and variety of packaging options, the 
transportation alternatives available, or

[[Page 50287]]

the level of services offered by individual onion packing facilities 
inside and outside the production area. This rule allows shippers of 
Walla Walla sweet onions the flexibility to pack and ship product from 
the most advantageous facility available, regardless of where in Oregon 
or Washington that facility is located.
    Some examples of situations in which this rule benefits the 
industry are: (1) A packer outside the area of production is 
experimenting with modified atmosphere packaging that increases the 
shelf life of sweet onions; (2) a Walla Walla sweet onion producer is 
part owner of a packing facility located outside the area of production 
and wishes to pack and store sweet onions in that facility; (3) a 
packing facility outside the area of production can offer rail service 
for shipping and a rail siding is not available within the production 
area; and (4) a fresh produce marketing company that has a packing 
facility outside the area of production desires to begin packing and 
shipping Walla Walla sweet onions.
    The Committee believes that the regulations established under the 
order create orderly marketing, are good for consumers, encourage 
repeat purchases, and ultimately improve returns to producers. 
Therefore, the Committee recommended the establishment of safeguards to 
ensure that all Walla Walla sweet onions graded, packed, or stored 
outside the production area are ultimately subject to the requirements 
established under the order.
    Persons desiring to ship or receive Walla Walla sweet onions for 
grading, packing, or storing outside the production area must apply to 
the Committee on a Shippers/Receivers Application for Certificate of 
Privilege, (SRACP) Form No. 3. Applicants must complete and submit a 
SRACP form each year prior to shipping or receiving Walla Walla sweet 
onions for grading, packing, or storing outside the production area. 
Information collected on the application includes the company name, 
contact name, address, contact telephone numbers, signature of the 
shipper or receiver, date, and such other information as the Committee 
may require. Applicants must agree to furnish reports on shipments of 
sweet onions made under the Certificate of Privilege and must certify 
that all shipments of production area onions for grading, packing, or 
storing outside the production area will be made in accordance with 
order provisions. Those parties acting as receivers under the 
Certificate of Privilege must further agree to forward all assessments 
due on sweet onions handled to the Committee office. If approved, the 
Committee manager will sign the application, assign a Certificate of 
Privilege number for tracking purposes, and return a copy of the 
application to the applicant. If denied, the applicant will be notified 
in writing of the reasons for denial and have an opportunity to appeal 
the Committee's decision.
    After the Committee approves the applications of both the shipper 
and the receiver, Walla Walla sweet onions may be shipped out of the 
production area for grading, packing, or storing. When the parties 
conclude shipping or receiving, both the shipper and receiver must 
submit to the Committee a Special Purpose Shipment Report, (SPSR) Form 
No. 4. Information collected on the SPSR includes the Certificate of 
Privilege number as assigned by the Committee, company name, contact 
name, address, contact telephone numbers, names of the individuals or 
companies shipped to or received from, the total quantities of onions 
shipped or received in 50-pound equivalents, the signature of the 
shipper or receiver, date, and such other information as the Committee 
may require.
    The SPSR, as well as any assessments due, must be submitted to the 
Committee no later than 30 days after the date of the last shipment or 
receipt of Walla Walla sweet onions under the Certificate of Privilege. 
The SPSR also reiterates that it is the receiver of sweet onions 
shipped under the Certificate of Privilege that is responsible for 
payment of the administrative assessment. Shippers and receivers will 
only be required to submit one (1) of these reports annually.
    This rule also continues in effect increased handler-reporting 
requirements by requiring the submission of a Walla Walla Sweet Onion 
Handler Registration Form, (Registration) Form No. 2, and by expanding 
the scope of the information required on the existing Handler's 
Statement of Walla Walla Sweet Onion Shipments, (Form No. 1; Form FV-
141) (Statement). Each year prior to the shipping season, but in no 
case later than May 31, all persons desiring to handle Walla Walla 
sweet onions during the forthcoming season must complete a Registration 
form and submit it to the Committee. Information collected on this form 
includes: Company name, contact name, signature, date, addresses, and 
contact telephone numbers; brands or labels to be marketed; estimated 
acres of production to be packed; and such other information as the 
Committee may require.
    The previous Statement, which was submitted to the Committee at the 
end of each shipping season, required handlers to report the quantity 
of Walla Walla sweet onions handled during the season. This action 
continues in effect the expansion of the information collected on the 
Statement to include reporting the quantity of Walla Walla sweet onions 
handled on behalf of each producer. Information collected on the 
Registration and modified Statement forms will greatly enhance order 
compliance by allowing the Committee to compare the collected data with 
information from other sources for corroboration. This will ultimately 
assist the Committee in monitoring onion shipments and in the 
collection of assessments. For example, acreage and production 
information voluntarily provided by producers will be reconciled with 
similar information collected from handlers to help ensure that all 
assessable sweet onion shipments have been properly reported and that 
assessments have been correctly collected.
    This information collection is important to the Committee in light 
of the regulation relaxation that allows the grading, packing, or 
storing of Walla Walla sweet onions outside the production area. The 
Committee believes that enhancing the scope of the reporting 
requirements is the best way to maintain oversight of the special 
purpose shipment procedures as modified herein. In addition to 
enhancing the Committee's compliance efforts, the collection of handler 
profile information such as addresses and contact numbers will also be 
useful to the Committee for maintaining contact with handlers 
throughout the season.

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 behalf. Thus, both statutes have small 
entity orientation and compatibility.
    There are approximately 28 handlers of Walla Walla sweet onions 
subject to regulation under the order and approximately 37 Walla Walla 
sweet onion producers in the regulated area.

[[Page 50288]]

Small agricultural service firms are defined by the Small Business 
Administration (SBA) (13 CFR 121.201) 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 $750,000.
    The Committee estimates that in 2003, 674,038 50-pound containers 
of Walla Walla sweet onions were marketed at an average FOB price of 
about $11.50 per container. The total industry value at shipping point 
was approximately $7,751,437, leaving an average annual gross receipt 
per handler of $276,837. Thus, a majority of handlers and producers of 
Walla Walla sweet onions may be classified as small entities.
    Committee meetings are widely publicized in advance of the meetings 
and are held in a location central to the production area. The meetings 
are open to all industry members and other interested persons who are 
encouraged to participate in the deliberations and voice their opinions 
on topics under discussion. Thus, Committee recommendations can be 
considered representative of small business interests in the industry.
    This rule continues the implementation of procedures that allow 
persons to ship or receive Walla Walla sweet onions outside the area of 
production for grading, packing, or storing purposes. Persons desiring 
to do so must first apply to the Committee. The applicants must certify 
that all Walla Walla sweet onions graded, packed, or stored outside the 
production area will meet any minimum grade, size, maturity, container, 
pack, or inspection requirements established under the order. 
Previously, only container, assessment, and reporting requirements were 
implemented under the order. After the Committee completes its review 
of the application and determines that everything is in order, 
applicants will be granted a Certificate of Privilege authorizing them 
to ship or receive Walla Walla sweet onions outside the production area 
for market preparation. At the end of the shipping season, both the 
shipper and receiver must submit reports to the Committee regarding the 
quantity of Walla Walla sweet onions handled under Certificate of 
Privilege. The authority for this action is provided in Sec. Sec.  
956.63 and 956.66.
    In addition, this rule continues in effect the expansion of the 
handler reporting requirements by adding a preseason handler 
registration form and expanding the scope of information required on 
the handler's shipment report. These changes provide the Committee with 
more comprehensive handler information that improves handler compliance 
and enhances safeguards already in place. The additional information 
gathered from the new mandatory report complements the modification to 
the current reporting requirements and contributes to greater 
efficiency in the operation of the program. The improved safeguards and 
oversight afforded the Committee with these reporting requirement 
changes are essential in maintaining compliance with procedures for 
market preparation outside the production area. The authority for this 
action is provided in Sec.  956.80.
    Regarding the impact of this action on affected entities, this rule 
imposes minimal additional costs. The Committee estimates that about 10 
persons may desire to ship or receive Walla Walla sweet onions for 
grading, packing, or storing outside the production area during each 
marketing year. Such shippers and receivers must complete a Shippers/
Receivers Application for Certificate of Privilege, (Form No. 3) and 
submit it to the Committee for approval each year prior to shipping or 
receiving any Walla Walla sweet onions for grading, packing, or storing 
outside the production area. Once the Committee has approved the 
application, the parties will be free to handle sweet onions for market 
preparation out of the production area.
    After Walla Walla sweet onions have been handled pursuant to the 
Certificate of Privilege, both the shipper and receiver must submit a 
Special Purpose Shipment Report (Form No. 4), to the Committee no later 
than 30 days after the date of the last shipment or receipt of onions. 
The Committee estimates that 10 shippers and receivers will each be 
obligated to submit one (1) of these reports annually. The annual 
industry burden associated with the information collection on both 
forms is estimated to total approximately 3.6 hours.
    The addition of a preseason registration form and the expansion of 
the existing reporting requirements for all Walla Walla sweet onion 
handlers also imposes minimal additional costs on the industry. Persons 
desiring to handle Walla Walla sweet onions must complete and submit a 
Walla Walla Sweet Onion Handler Registration Form (Form No. 2), prior 
to May 31 of each year. Handlers of sweet onions must also submit a 
Handler's Statement of Walla Walla Sweet Onion Shipments (Form No. 1; 
Form FV-141) that is more detailed than the one previously used. The 
Committee estimates that 28 handlers are affected, with a total annual 
industry burden of approximately 25.76 hours for both forms.
    The Committee considered one alternative to the part of this 
proposal that allows Walla Walla sweet onions to be graded, packed, or 
stored out of the area. The alternative was to prohibit any grading, 
packing, or storing of Walla Walla sweet onions outside the production 
area. The Committee felt that this alternative would have limited the 
flexibility of shippers in making marketing decisions related to the 
grading, packing, or storing of Walla Walla sweet onions and it was 
therefore rejected. Allowing the shipment of Walla Walla sweet onions 
outside the production area for grading, packing, or storing is a 
relaxation of order requirements and any costs related to additional 
reporting is outweighed by the benefits of allowing such shipments.
    The alternatives that the Committee discussed with regard to 
increasing handler reporting requirements were: (1) Maintain the status 
quo and make no changes in the reporting requirements; and (2) make the 
submission of the registration form and producer information on the 
shipment statement voluntary instead of mandatory. Both of these 
options were rejected as not sufficiently addressing the need for 
better handler information. Enhanced information collection will help 
improve the Committee's ability to ensure industry compliance with the 
order. This is especially important in light of the relaxation changes 
in the order regulations allowing grading, packing, or storing outside 
the production area.
    This rule continues to impose an additional reporting and 
recordkeeping burden on persons who ship or receive Walla Walla sweet 
onions for grading, packing, or storing outside the production area. 
This action requires three new Committee forms and modification of a 
previous form. In accordance with the Paperwork Reduction Act of 1995 
(44 U.S.C. Chapter 35), the information collection requirements on 
these three new Committee forms and the modification of the previous 
form were approved by the Office of Management and Budget (OMB) under 
OMB Control No. 0581-0221 on April 13, 2004.
    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.

[[Page 50289]]

    The Committee's meetings were widely publicized throughout the 
sweet 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 December 8, 2003, and the February 10, 
2004, meetings were public meetings and all entities, both large and 
small, were able to express their views.
    An interim final rule concerning this action was published in the 
Federal Register on April 26, 2004 (69 FR 22377). Copies of the rule 
were mailed by the Committee's staff to all Committee members and Walla 
Walla sweet onion handlers. In addition, the rule was made available 
through the Internet by the Office of the Federal Register and the 
USDA. That rule provided a 60-day comment period which ended June 25, 
2004. 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 
finalizing the interim final rule, without change, as published in the 
Federal Register (69 FR 22377, April 26, 2004) will tend to effectuate 
the declared policy of the Act.

List of Subjects in 7 CFR Part 956

    Marketing agreements, Onions, Reporting and recordkeeping 
requirements.

PART 956--SWEET ONIONS GROWN IN THE WALLA WALLA VALLEY OF SOUTHEAST 
WASHINGTON AND NORTHEAST OREGON

0
Accordingly, the interim final rule amending 7 CFR part 956 which was 
published at 69 FR 22377 on April 26, 2004, is adopted as a final rule 
without change.

    Dated: August 10, 2004.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 04-18612 Filed 8-13-04; 8:45 am]
BILLING CODE 3410-02-P