[Federal Register Volume 69, Number 183 (Wednesday, September 22, 2004)]
[Rules and Regulations]
[Pages 56667-56672]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-21238]



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  Federal Register / Vol. 69, No. 183 / Wednesday, September 22, 2004 / 
Rules and Regulations  

[[Page 56667]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 958 and 980

[Docket No. FV04-958-1 IFR]


Onions Grown in Certain Designated Counties in Idaho and Malheur 
County, Oregon; Relaxation of Handling and Import Regulations

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

-----------------------------------------------------------------------

SUMMARY: This rule relaxes the size requirement for pearl onions, 
relaxes the minimum grade and size requirements for cipolline onion 
varieties, and updates the regulatory text concerning certain reporting 
requirements for onions handled under the Idaho-Eastern Oregon onion 
marketing order. The marketing order regulates the handling of onions 
grown in Idaho and Eastern Oregon and is administered locally by the 
Idaho Eastern-Oregon Onion Committee (Committee). This rule also 
relaxes the requirements for pearl and cipolline onions under the 
import regulations as required by section 8e of the Agricultural 
Marketing Agreement Act of 1937. Specifically, this rule changes the 
definition of pearl onions to mean onions 2 inches in diameter or less, 
establishes a relaxed minimum grade of U.S. No. 2 and relaxed minimum 
diameter of 1\1/2\ inches for cipolline onions, and adds clarification 
and specificity to the reporting requirements for onions handled for 
peeling, chopping, or slicing. The changes are intended to facilitate 
the marketing of onions handled under the marketing order, improve 
producer returns, and bring the section 8e import regulation into 
conformity with the marketing order.

DATES: Effective: September 23, 2004; comments received by November 22, 
2004 will be considered prior to issuance of a final rule.

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, 1400 Independence Avenue SW., STOP 0237, Washington, DC 
20250-0237; Fax: (202) 720-8938; E-mail: [email protected]; or 
Internet: http://www.regulations.gov. All comments should reference the 
docket number and the date and page number of this issue of the Federal 
Register and will be made 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: Robert J. Curry, Northwest Marketing 
Field Office, Marketing Order Administration Branch, Fruit and 
Vegetable Programs, AMS, USDA, 1220 SW. Third Avenue, suite 385, 
Portland, Oregon 97204; telephone: (503) 326-2724, Fax: (503) 326-7440; 
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 No. 130 and Marketing Order No. 958, both as amended (7 CFR 
part 958), regulating the handling of onions grown in certain 
designated counties in Idaho, and Malheur County, 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.''
    This rule is also issued under section 8e of the Act, which 
provides that whenever certain specified commodities, including onions, 
are regulated under a Federal marketing order, imports of these 
commodities into the United States are prohibited unless they meet the 
same or comparable grade, size, quality, or maturity requirements as 
those in effect for the domestically produced commodities.
    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 Sec.  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.
    There are no administrative procedures which must be exhausted 
prior to any judicial challenge to the provisions of import regulations 
issued under section 8e of the Act.
    This rule relaxes handling regulations for pearl and cipolline 
onions produced in certain designated counties in Idaho, and Malheur 
County Oregon, by redefining pearl onions to mean onions 2 inches in 
diameter or less, and by establishing a relaxed minimum grade of U.S. 
No. 2 and a relaxed minimum diameter of 1\1/2\ inches for cipolline 
onion varieties. As provided under section 8e of the Act, these changes 
also apply to all imported pearl and cipolline onions. This rule also 
adds clarification and specificity to the

[[Page 56668]]

reporting requirements by updating Sec.  958.328(d) for onions handled 
for peeling, chopping, or slicing to reflect current form provisions. 
These changes were unanimously recommended by the Committee on April 1, 
2004, and are intended to facilitate the marketing of Idaho-Eastern 
Oregon onions and improve producer returns.
    Sections 958.51 and 958.52 of the order authorize the Committee to 
recommend, and the USDA to issue, grade, size, quality, pack, and 
container regulations for any variety or varieties of onions grown in 
the production area. Section 958.53 authorizes the issuance of special 
regulations to facilitate the handling of pearl onions as well as other 
special purpose shipments. Section 958.65 authorizes the Committee to 
collect information from handlers. Regulations specific to the handling 
of onions produced in the regulated production area are contained in 
Sec.  958.328 of the order's handling regulations, whereas relevant 
import regulations are contained in Sec.  980.117 and Sec.  980.501 of 
the vegetable import regulations.
    Pearl onions and cipolline onions are small, specialty onions with 
end uses in both the fresh market (raw and cooked) and processed 
market. Although there are relatively few pearl onions and cipolline 
onions produced in the Northwest, increased producer interest in both 
types of onions, as well as changes in customer preferences, encouraged 
this Committee recommendation.
    Pearl onions are defined, in part, in both the order and the import 
regulations as onions that are produced using specific cultural 
practices that limit growth and are inspected and certified as 
measuring no larger than the maximum designated size. Factors that can 
limit growth, and subsequently final bulb size, include the variety, 
plant density, depth planted, photoperiod, and temperature. Pearl 
onions are mild flavored white, red, or yellow skinned onions generally 
ranging in size from about \3/4\ inch to less than 2 inches in 
diameter.
    Although pearl onions must be inspected and certified as measuring 
no larger than the maximum size designated under the order, they have 
been exempt from the minimum grade, size, and maturity requirements of 
the order since 1985. In order to be eligible for this exemption, the 
onions must be no greater than the stated maximum size limit. Although 
exempt from the grade, size, and maturity requirements, shipments of 
pearl onions are subject to administrative assessments.
    Due to previous changes in handling, marketing, and buyer 
preferences, the defined maximum diameter of pearl onions was changed 
from 1\1/2\ inches to 1\3/4\ inches in 1990 (55 FR 27825). Similarly, 
due to ongoing changes in handling, marketing, and buyer preferences, 
this rule further relaxes the size requirements by increasing the 
defined maximum diameter of pearl onions to 2 inches.
    The pearl onion market is a minor segment of the onion market 
served by the Idaho-Eastern Oregon production area. As such, the 
Committee continues to believe that pearl onions do not compete 
directly with most of the onions produced in this area and that the 
current exemption from size, grade, and maturity requirements should 
continue.
    Due to changing dynamics in the cultural and handling practices in 
this region, as well as buyer and consumer preferences, this relaxation 
in requirements will help facilitate the efficient movement of pearl 
onions into fresh market channels and may also enhance producer 
returns.
    Cipolline onions--also known as Borettana onions--are traditional 
Italian onions that are relatively small and button shaped, and include 
white, red, and yellow varieties. As noted earlier, cipolline 
(pronounced chip-ah-LEE-nee) onions have constituted a very small 
percentage of the onions produced and marketed in the order's regulated 
production area in the past. However, due to an increase in cipolline 
onion production, and a growing consumer interest in this specialty 
onion, the order's grade and size requirements were beginning to 
adversely affect the handling and marketing of cipolline onions.
    Under the order, white, red, and yellow onion varieties handled for 
the fresh market have varying minimum grade and size requirements. 
Specifically, white varieties must meet a minimum grade of U.S. No. 1, 
1 inch minimum to 2 inches maximum or at least 1\1/2\ inches minimum, 
whereas red varieties must meet a minimum grade of U.S. No. 2 and a 
minimum diameter of 1\1/2\ inches. The most prevalent onions packed in 
the Idaho-Eastern Oregon production area, yellow onion varieties, must 
meet a minimum grade of U.S. No. 2 and measure 3 inches or larger in 
diameter, or, if packed to U.S. No. 1 grade, they may have a minimum 
measurement of 1\3/4\ inches in diameter. Prior to this change, 
cipolline onions were handled, graded, and inspected in accordance with 
the different order requirements for white, red, and yellow onion 
varieties.
    Cipolline onions, however, range in size from about 1 inch in 
diameter to about 3 inches in diameter, with prevalence found in the 2-
inch to 3-inch sizes. Since most of the cipolline onions produced in 
this area are yellow, U.S. No. 2 grade cipolline onions would have 
difficulty meeting the three-inch minimum size requirement. Following a 
review of the cultural practices, supply situation, and demand 
characteristics for cipolline onions, the Committee determined that the 
marketing of all cipolline onion varieties would be enhanced if 
handlers were held to a minimum grade of U.S. No. 2 and a minimum size 
of 1\1/2\inches in diameter--the same minimum requirements for all 
Idaho-Eastern Oregon red varieties.
    This rule, by establishing a minimum grade and size for all 
cipolline onion varieties distinct from the prevalent white, red, and 
yellow varieties, will help ensure that marketable cipolline onions 
meet the minimum requirements of the order. While the requirements in 
place prior to this action allowed for the shipment of white cipolline 
onions that graded U.S. No. 1, 1-inch minimum to 2-inches maximum, no 
such shipments were ever made from the production area. Therefore, this 
change in the minimum grade and size requirements is not expected to 
impact the shipment of white cipolline onions.
    As mentioned earlier, section 8e of the Act provides that when 
certain domestically produced commodities, including onions, are 
regulated under a Federal marketing order, imports of that commodity 
must meet the same or comparable grade, size, quality, and maturity 
requirements. Section 8e also provides that whenever two or more 
marketing orders regulating the same commodity produced in different 
areas of the United States are concurrently in effect, a determination 
must be made as to which of the areas produces the commodity in most 
direct competition with the imported commodity. Imports must meet the 
requirements established for that particular area.
    Grade, size, quality, and maturity regulations have been issued 
regularly under both Marketing Order No. 958 and Marketing Order No. 
959, which regulates the handling of onions produced in South Texas, 
since the marketing orders were established. The import regulations 
specify that import requirements for onions are to be based on the 
seasonal categories of onions produced in both marketing order areas. 
In that regard, imported onions must meet the requirements of the 
Idaho-Eastern Oregon onion marketing order during the period June 5 
through March

[[Page 56669]]

9 and the South Texas onion marketing order during the period March 10 
through June 4 of each season. Pearl and cipolline onions are not 
currently produced in South Texas. However, they are produced and 
marketed in limited quantities through out the year under the Idaho-
Eastern Oregon onion marketing order. Therefore, the requirements for 
imported pearl and cipolline onions should be based upon the 
requirements established under Marketing Order No. 958 for the entire 
year.
    As a consequence, this action changes Sec.  980.117(a)(1) and (2) 
and (b)(1) of the onion import regulations by determining that imports 
of pearl and cipolline onions during the entire year are in most direct 
competition with the marketing of onions produced under Marketing Order 
No. 958 and changes Sec.  980.117(h) and (i) by redefining pearl onions 
to mean onions produced using specific cultural practices that limit 
growth to 2 inches or less in diameter. Accordingly, all cipolline 
onions imported must be U.S. No. 2 grade or better and measure 1\1/2\ 
inches or more in diameter, and pearl onions cannot be larger than 2 
inches in diameter.
    This rule also clarifies certain handler reporting requirements. 
Under the handling regulations, onions that are inspected and certified 
as meeting the grade, size, maturity, and pack requirements of the 
order and are subsequently peeled, chopped, or sliced for fresh market 
within the production area may be handled without reinspection. Section 
958.328(d) provides reporting procedures for the handling of such 
previously inspected onions for peeling, chopping, or slicing.
    The Committee uses Form FV-37, Rehandling of Onions Report, to 
collect information from handlers specific to onions handled under this 
section. These reporting requirements are in place primarily to ensure 
handler compliance with the order's provisions. This rule adds 
clarification and specificity to the regulations by updating Sec.  
958.328(d) to reflect current Form FV-37 provisions. The change is 
expected to minimize handler errors in completing the form and help 
ensure timely submission of the completed form to the Committee.
    This form has been approved previously by the Office of Management 
and Budget (OMB) under OMB Number 0581-0178, Vegetable and Specialty 
Crops. This action will not impact the information collection burden 
hours currently approved by OMB for this form.

Initial 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 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.
    Import regulations issued under the Act are based on those 
established under Federal marketing orders which regulate the handling 
of domestically produced products.
    There are approximately 42 handlers of Idaho-Eastern Oregon onions 
who are subject to regulation under the order and approximately 190 
onion producers in the regulated area. In addition, based on the most 
recent information available, approximately 472 importers of onions are 
subject to import regulations and may be affected by this rule. Small 
agricultural service firms are defined by the Small Business 
Administration (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.
    Based on its assessment records, the Committee estimates that about 
39 of the 42 handlers ship less than $5,000,000 worth of onions on an 
annual basis. In addition, based on the acreage (20,600), production 
(12,000,000 cwt), and total producer revenue ($130,768,000) reported by 
the National Agricultural Statistics Service for 2003, and the current 
number of onion producers (190), the average annual gross producer 
revenue is approximately $688,252. Thus, the majority of the onion 
handlers and the onion producers in this industry may be classified as 
small entities. Although it is not known how many importers of onions 
may be classified as small entities, we believe that many of the 472 
importers can be classified as such. There are two firms involved in 
altering onions under the order and both firms can be classified as 
small entities.
    This rule relaxes the size requirement for pearl onions, relaxes 
the minimum grade and size requirements for cipolline onions, and 
clarifies certain reporting requirements for onions handled under the 
Idaho-Eastern Oregon onion marketing order. Authority for this action 
is contained in Sec. Sec.  958.51, 958.52, 958.53, and 958.65 of the 
order. This rule--unanimously recommended by the Committee at its April 
1, 2004, meeting--changes Sec.  958.328(h) by redefining pearl onions 
to mean onions produced using specific cultural practices that limit 
growth to the same general size as boilers and picklers (as defined in 
the U.S. Standards for Grades of Onions), and that have been inspected 
and certified as measuring 2 inches in diameter or less. In addition, 
this rule changes Sec.  958.328(a)(2) by adding cipolline onions to the 
minimum grade and size requirements established for red onion 
varieties: U.S. No. 2 grade or better and 1\1/2\ inch diameter or 
larger.
    Under authority in section 8e of the Act, this rule also changes 
Sec.  980.117(a)(1) and (2), and (b)(1), of the onion import 
regulations by determining that imports of pearl and cipolline onions 
are in most direct competition during the entire year with the 
marketing of onions produced under Marketing Order No. 958 and changes 
Sec.  980.117(h) and (i) by redefining pearl onions to mean onions 
produced using specific cultural practices that limit growth to 2 
inches in diameter or less. Although not specifically referenced in the 
text of Sec.  980.117, this rule also relaxes the minimum grade and 
size for imported cipolline onions to U.S. No. 2 grade and 1\1/2\ 
inches in diameter.
    Finally, this rule updates Sec.  958.328(d) to reflect the current 
form used for onions handled for peeling, chopping, or slicing. This 
action is intended to facilitate the handling and marketing of pearl 
and cipolline onions, increase producer returns, and help minimize 
errors in completing Form FV-37 concerning the handling of onions for 
peeling, chopping, or slicing, and to help ensure timely submission of 
the form to the Committee.
    According to the Committee, there is currently one producer and one 
handler of pearl and cipolline onions in the regulated production area, 
and, as such, statistics relating to the production and marketing of 
pearl and cipolline onions in the Idaho-Eastern Oregon onion production 
area cannot be made available. The quantity of such specialty onions, 
however, would be minor in relation to the prevalent large, globular 
shaped Spanish-type onion produced in the production area. Regarding 
pearl and cipolline onions produced elsewhere in the United States or 
imported into the United States: statistical information is available

[[Page 56670]]

grouped by dry bulb type onions, green onions, or onion sets and is 
generally unavailable by variety, size, or color. However, the U.S. 
Department of Commerce does track the quantity of pearl onions imported 
into the United States with a maximum diameter of .39 inches. In 2003, 
for example, approximately 211 hundredweight of pearl onions (less than 
or equal to .39 inches in diameter) were imported--in diminishing 
order--from Chile, Spain, China, Mexico, and India. In comparison, most 
onions imported into the U.S. are produced in Mexico, Canada, Peru, and 
Chile. Currently, there are no government statistics on the domestic 
production or importation of cipolline onions.
    Regarding the impact of this rule on affected entities, relaxing 
the size requirement for pearl onions and the grade and size 
requirement for cipolline onions is expected to benefit handlers, 
importers, and producers. With the change in the definition of pearl 
onions to include onions as large as 2 inches in diameter, a 
potentially greater quantity of onions will pass inspection and thus be 
certified under the order's pearl onion exemption provisions. 
Similarly, by relaxing the minimum grade and size requirements for 
cipolline onions, a greater quantity of these onions should meet the 
order's handling regulations. This could translate into an increased 
market for cipolline onions and greater returns for handlers, 
importers, and producers. While the requirements in place prior to this 
action allowed for the shipment of white cipolline onions that graded 
U.S. No. 1, 1-inch minimum to 2 inches maximum, no such shipments were 
ever made. Therefore, this action is not expected to impact the 
shipment of white cipolline onions.
    The clarification of reporting requirements for peeled, chopped, 
and sliced onions will have the tangible effect of providing more 
clearly understood instructions to handlers who are required to 
complete Form FV-37.
    The Committee considered several alternatives to the relaxation in 
handling regulations for pearl and cipolline onions. The Committee 
initiated this action due to a request from the Idaho-Eastern Oregon 
onion industry's single pearl and cipolline onion producer and handler 
for an all-inclusive exemption from the requirements of the order. A 
special subcommittee was formed to study the request. The initial 
request was an exemption for an entire specialty product line, which 
included onion sets, pearl onions, boiler onions, prepack onions, 
cipolline onions, and shallots. The requester's main contention with 
the order is that none of his onions fit the profile of the Idaho-
Eastern Oregon onion industry's foremost product, the large, globular 
shaped and mild Spanish-type onion. In addition, the requester was of 
the view that the Committee's promotion efforts--a major budgetary item 
for the Committee--does not benefit him as a producer and marketer of 
the small specialty onions. The requester also stated that the cost to 
him in complying with the order--in administrative assessments and 
inspection fees--is too high when considering his benefits from the 
order.
    The subcommittee noted that onion sets and shallots do not need to 
be considered for further exemptions since neither is regulated under 
the marketing order. In addition, the subcommittee determined that 
boiler and prepacker size onions should not be exempt from the handling 
regulations since both are produced throughout the regulated production 
area. Various members of the subcommittee were of the view that the 
marketing of out-of-grade and off-size boiler and prepacker onions 
would have a negative impact on the marketing of all Idaho-Eastern 
Oregon onions.
    Further, as noted earlier in this document, pearl onions have been 
exempt from the minimum grade, size, and maturity requirements of Sec.  
958.328 for several years. The subcommittee determined that an increase 
in the maximum size for pearl onions would facilitate the handling and 
marketing of these onions. The subcommittee considered increasing the 
maximum size under the pearl onion definition from 1\7/8\ inches to as 
much as 2\3/4\ inches in diameter. This was rejected, however, because 
this would permit handlers to ship these onions exempt from the quality 
requirements in competition with larger sized onions subject to such 
requirements. The subcommittee also rejected consideration of an 
exemption from the current assessment and inspection requirements for 
pearl onions as being detrimental to the program. Pearl onions are 
inspected under the order to assure that they do not exceed the maximum 
diameter permitted.
    Finally, the subcommittee considered various exemption and 
regulatory options in regard to cipolline onions. A complete exemption 
from the order was rejected since the subcommittee considered the 
cipolline onions as being a competitive product to the prevalent onion 
varieties produced and marketed under the order. Consideration was also 
given to establishing a different regulatory scheme for the county in 
which the cipolline onions are produced. This was not considered a 
viable option due to administrative concerns and the fact cipolline 
onions can be produced anywhere within the production area.
    The Committee, based on the subcommittee's consideration of the 
issue, determined that pearl and cipolline onions are promoted through 
the order's generic promotion efforts since a major component of these 
efforts are coupled to the Idaho-Eastern Oregon onion logo. In this 
regard, the Committee feels that all handlers within the regulated 
production area benefit from the order.
    This rule will not impose any additional reporting or recordkeeping 
requirements on either small or large 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. In addition, 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 Idaho-
Eastern Oregon onion industry and all interested persons were invited 
to attend the meeting and participate in Committee deliberations. Like 
all Committee meetings, the April 1, 2004, meeting was a public meeting 
and all entities, both large and small, were able to express their 
views on this issue.
    Also, as indicated earlier, the subcommittee appointed to consider 
this matter met on February 25, 2004, and discussed this issue in 
detail. That meeting was also 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.
    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.
    This rule invites comments on a change to the handling regulations 
prescribed under the Idaho-Eastern Oregon onion marketing order and the 
onion import regulations. Any comments received will be considered 
prior to finalization of this rule.
    After consideration of all relevant material presented, including 
the Committee's recommendation, and

[[Page 56671]]

other information, it is found that this interim final rule, as 
hereinafter set forth, will tend to effectuate the declared policy of 
the Act.
    In accordance with section 8e of the Act, the United States Trade 
Representative has concurred with the issuance of this rule.
    Pursuant to 5 U.S.C. 553, it is also found and determined upon good 
cause that it is impracticable, unnecessary, and contrary to the public 
interest to give preliminary notice prior to putting this rule into 
effect and that good cause exists for not postponing the effective date 
of this rule until 30 days after publication in the Federal Register 
because: (1) Handlers will begin shipping onions for the 2004-2005 
season in August and to ensure maximum benefit to the industry, this 
relaxation should be in effect as soon as possible; (2) the Committee 
unanimously recommended these changes at a public meeting and 
interested parties had an opportunity to provide input; and (3) this 
rule provides a 60-day comment period and any comments received will be 
considered prior to finalization of this rule.

List of Subjects

7 CFR Part 958

    Marketing agreements, Onions, Reporting and recordkeeping 
requirements.

7 CFR Part 980

    Food grades and standards, Imports, Marketing agreements, Onions, 
Potatoes, Tomatoes.

0
For the reasons set forth in the preamble, 7 CFR parts 958 and 980 are 
amended as follows:
0
1. The authority citation for 7 CFR parts 958 and 980 continues to read 
as follows:

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

PART 958--ONIONS GROWN IN CERTAIN DESIGNATED COUNTIES IN IDAHO, AND 
MALHEUR COUNTY, OREGON

0
2. In Sec.  958.328, paragraphs (a)(1) and (2), paragraph (d), and 
paragraph (h), are revised to read as follows:


Sec.  958.328  Handling regulation.

* * * * *
    (a) Grade and size requirements--(1) White varieties (except 
cipolline (Borettana) varieties). Shall be either:
    (i) U.S. No. 1, 1 inch minimum to 2 inches maximum diameter; or
    (ii) U.S. No. 1, at least 1\1/2\ inches minimum diameter. However, 
neither of these two categories of onions may be commingled in the same 
bag or other container.
    (2) Cipolline (Borettana) varieties and red varieties. U.S. No. 2 
or better grade, at least 1\1/2\ inches minimum diameter.
* * * * *
    (d) Onions for peeling, chopping, or slicing. Onions that have been 
inspected and certified as meeting the requirements of paragraphs (a) 
and (b) of this section and that are subsequently peeled, chopped, or 
sliced for fresh market within the production area may be handled 
without reinspection subject to the following:
    (1) Each handler making shipments of onions for altering by 
peeling, chopping, or slicing must, within 15 days of delivery of the 
onions, provide the committee with a copy of the original inspection 
certificate verifying that minimum marketing order requirements have 
been met. Furthermore, each handler of onions for peeling, chopping, or 
slicing must, within 15 days of delivery of the onions, provide the 
handler responsible for alteration of the onions and the committee the 
following information on forms provided by the committee:
    (i) Business name, address, telephone number, signature and the 
date the form was signed;
    (ii) The date the onions were delivered to the handler responsible 
for alteration of the onions by peeling, chopping, or slicing;
    (iii) Information specific to the delivery of such onions to that 
handler (e.g., rail car number, truck license number, or ``from 
storage'' if both handlers are the same entity);
    (iv) Inspection certificate number;
    (v) The hundredweight of onions delivered for alteration;
    (vi) Such other information that may be required by the committee.
    (2) Each handler responsible for alteration of onions for peeling, 
chopping, or slicing must, within 15 days of alteration of the onions, 
provide the handler and the committee the following information on 
forms provided by the committee:
    (i) Business name, address, telephone number, signature and the 
date the form was signed;
    (ii) The date the onions were altered by peeling, chopping, or 
slicing;
    (iii) The hundredweight of onions after alteration;
    (iv) Such other information that may be required by the committee.
    Handlers who peel, chop, or slice onions produced outside the 
production area must provide the committee with documentation showing 
that the onions so prepared were produced outside the production area.
* * * * *
    (h) Definitions. The terms ``U.S. No. 1'', ``U.S. Commercial,'' and 
``U.S. No. 2'' have the same meaning as defined in the United States 
Standards for Grades of Onions (Other than Bermuda Granex-Grano and 
Creole Types), as amended (7 CFR 51.2830 through 51.2854), or the 
United States Standards for Grades of Bermuda-Granex-Grano Type Onions 
(7 CFR 51.3195 through 51.3209), as amended, whichever is applicable to 
the particular variety, or variations thereof specified in this 
section. The term ``braided red onions'' means onions of red varieties 
with tops braided (interlaced). ``Pearl onions'' means onions produced 
using specific cultural practices that limit growth to the same general 
size as boilers and picklers (defined in the United States Standards 
specified in this paragraph), and that have been inspected and 
certified as measuring 2 inches in diameter or less. The term 
``moderately cured'' means the onions are mature and are more nearly 
well cured than fairly well cured. Other terms used in this section 
have the same meaning as when used in Marketing Agreement No. 130 and 
this part.

PART 980--VEGETABLES; IMPORT REGULATIONS

0
3. In Sec.  980.117, paragraphs (a)(2), (b)(1) and (2), (h), and (i) 
are revised to read as follows:


Sec.  980.117  Import regulations; onions.

    (a) * * *
    (2) Therefore, it is hereby determined that: Imports of onions 
during the June 5 through March 9 period, and the entire year for 
imports of pearl and cipolline varieties of onions, are in most direct 
competition with the marketing of onions produced in designated 
counties of Idaho and Malheur County, Oregon, covered by Marketing 
Order No. 958, as amended (7 CFR Part 958) and during the March 10 
through June 4 period the marketing of imported onions, not including 
pearl or cipolline varieties of onions, is in most direct competition 
with onions produced in designated counties in South Texas covered by 
Marketing Order No. 959, as amended (7 CFR part 959).
    (b) * * *
    (1) During the period June 5 through March 9 of each marketing 
year, and the entire year for pearl and cipolline onions, whenever 
onions grown in designated counties in Idaho and Malheur County, 
Oregon, are regulated under Marketing Order No. 958, imported onions 
shall comply with the

[[Page 56672]]

grade, size, quality, and maturity requirements imposed under that 
order.
    (2) During the period March 10 through June 4 of each marketing 
year, whenever onions grown in designated counties in South Texas are 
regulated under Marketing Order No. 959, imported onions, not including 
pearl and cipolline onions, shall comply with the grade, size, quality, 
and maturity requirements imposed under that order.
* * * * *
    (h) Definitions. For the purpose of this section, Onions means all 
varieties of Allium cepa marketed dry, except dehydrated, canned, or 
frozen onions, pickling onions in brine, onion sets, green onions, or 
braided red onions. The term U.S. No. 2 has the same meaning as set 
forth in the United States Standards for Grades of Bermuda-Granex-Grano 
Type Onions (7 CFR 2851.3195 through 2851.3209), the United States 
Standards for Grades of Creole Onions (7 CFR 2851.3955 through 
2851.3970), or the United States Standards for Grades of Onions Other 
Than Bermuda-Granex-Grano and Creole Types (7 CFR 2851.2830 through 
2851.2854), whichever is applicable to the particular variety, and 
variations thereof specified in this section. The term moderately cured 
means the onions are mature and are more nearly well cured than fairly 
well cured. Importation means release from the custody of U.S. Customs 
and Border Protection. The term pearl onions means onions produced 
using specific cultural practices that limit growth to 2 inches in 
diameter or less.
    (i) Exemptions. The grade, size, quality and maturity requirements 
of this section shall not be applicable to onions imported for 
processing, livestock feed, charity, or relief, and pearl onions, onion 
sets (plantings), braided red onions, and minimum quantity shipments of 
110 pounds, but such onions shall be subject to the safeguard 
provisions in Sec.  980.501. Processing includes canning, freezing, 
dehydration, extraction (juice) and pickling in brine. Processing does 
not include fresh chop, fresh cut, convenience food or other pre-
packaged salad operations. Pearl onions must be inspected for size 
prior to entry into the United States.

    Dated: September 16, 2004.
Kenneth C. Clayton,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 04-21238 Filed 9-21-04; 8:45 am]
BILLING CODE 3410-02-P