[Federal Register Volume 70, Number 138 (Wednesday, July 20, 2005)]
[Rules and Regulations]
[Pages 41605-41608]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-14261]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 955

[Docket No. FV05-955-1 FIR]


Vidalia Onions Grown in Georgia; Increased Assessment Rate

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 which increased the 
assessment rate and changed the assessable unit established for the 
Vidalia Onion Committee (Committee) for the 2005 and subsequent fiscal 
periods from $0.12 per 50-pound bag or equivalent to $0.10 per 40-pound 
carton of Vidalia onions. The assessment rate of $0.10 per 40-pound 
carton is $0.0001 per pound more than the assessment rate previously in 
effect. 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 began January 1 and ends December 31. The 
assessment rate will remain in effect indefinitely unless modified, 
suspended, or terminated.

EFFECTIVE DATE: August 19, 2005.

FOR FURTHER INFORMATION CONTACT: Doris Jamieson, Southeast Marketing 
Field Office, Marketing Order Administration Branch, Fruit and 
Vegetable Programs, AMS, USDA, 799 Overlook Drive, Suite A, Winter 
Haven, Florida 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.

[[Page 41606]]

    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 Marketing Order No. 955, both as amended (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. 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 issued herein will be applicable to all assessable Vidalia onions 
beginning January 1, 2005, 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 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. Such 
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 the action that increased the 
assessment rate and changed the assessable unit established for the 
Vidalia Onion Committee (Committee) for the 2005 and subsequent fiscal 
periods from $0.12 per 50-pound bag or equivalent to $0.10 per 40-pound 
carton of Vidalia onions. The assessment rate of $0.10 per 40-pound 
carton is $0.0001 per pound more than the assessment rate previously in 
effect.
    The Vidalia onion order provides authority for the Committee, with 
the approval of USDA, to formulate an annual budget of expenses and 
collect assessments from handlers to administer the program. The 
members of the Committee are producers and 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 2001-02 and subsequent fiscal periods, the Committee 
recommended, and USDA approved, an assessment rate of $0.12 per 50-
pound bag or equivalent that would continue in effect from 2001 and 
subsequent fiscal periods unless modified, suspended, or terminated by 
USDA upon recommendation and information submitted by the Committee or 
other information available to USDA.
    The Committee met December 15, 2004, and unanimously recommended 
2005 expenditures of $450,300 and an assessment rate of $0.10 per 40-
pound carton of Vidalia onions. In comparison, last year's budgeted 
expenditures were $312,215. The assessment rate of $0.10 per 40-pound 
carton is $0.0001 per pound more than the rate currently in effect. The 
increase in the assessment rate is based on the reduction in size of 
the assessable unit from 50-pounds to 40-pounds. Although the reduction 
in size of the assessable unit increases the number of assessable 
cartons, it only slightly increases the actual assessment per pound of 
Vidalia onions handled from $0.0024 per pound to $0.0025 per pound.
    The major expenditures recommended by the Committee for the 2005 
year include $92,500 for salaries and benefits, $59,800 for 
administrative expenses, $290,000 for marketing expenses, $5,000 for 
research expenses, and $3,000 for compliance. Budgeted expenses for 
these items in 2004 were $66,280, $237,435, $7,500, $1000, and $0, 
respectively.
    The assessment rate recommended by the Committee was derived by 
multiplying the assessment rate by the number of 40-pound cartons of 
Vidalia onions the industry is expected to ship for the 2005 fiscal 
period, and took into consideration the availability of matching funds 
for research and promotion from the State of Georgia. Vidalia onion 
shipments for the 2005 fiscal period are estimated at 3,350,000 40-
pound cartons which should provide $335,000 in assessment income. 
Income derived from handler assessments, interest income ($3,000), 
contributions from the Georgia Department of Agriculture ($150,000), 
and income from the sale of Point-of-Sale advertisement material 
($6,000) will be adequate to cover budgeted expenses. Funds in the 
reserve (currently $67,331) will be kept within the maximum permitted 
by the order, which is three fiscal periods' budgeted expenses (Sec.  
955.44).
    The assessment rate established in this rule will continue in 
effect indefinitely unless modified, suspended, or terminated by USDA 
upon recommendation and information submitted by the Committee or other 
available information.
    Although this assessment rate is effective for an indefinite 
period, the Committee will 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 USDA. 
Committee meetings are open to the public and interested persons may 
express their views at these meetings. USDA will evaluate Committee 
recommendations and other available information to determine whether 
modification of the assessment rate is needed. Further rulemaking will 
be undertaken as necessary. The Committee's 2005 budget and those for 
subsequent fiscal periods will be reviewed and, as appropriate, 
approved by USDA.

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 rule 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.

[[Page 41607]]

    There are approximately 145 producers of Vidalia onions in the 
production area and approximately 110 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 of less than $750,000, and small agricultural service 
firms, which include handlers, are defined as those whose annual 
receipts are less than $6,000,000.
    Based on information from the Georgia Agricultural Statistical 
Service and Committee data, around 90 percent of Vidalia onion handlers 
ship under $5,000,000 worth of onions on an annual basis. In addition, 
based on acreage, production, grower prices reported by the National 
Agricultural Statistics Service, and the total number of Vidalia onion 
growers, the average annual grower revenue is approximately $489,000. 
Thus, the majority of handlers and producers of Vidalia onions may be 
classified as small entities.
    This rule continues in effect the action that increased the 
assessment rate and changed the assessable unit from $0.12 per 50-pound 
bag or equivalent to $0.10 per 40-pound carton of Vidalia onions for 
the 2005 and subsequent fiscal periods. The Committee unanimously 
recommended 2005 expenditures of $450,300 and an assessment rate of 
$0.10 per 40-pound carton of Vidalia onions. The assessment rate of 
$0.10 per 40-pound carton is $0.0001 per pound higher than the $0.12 
per 50-pound bag or equivalent assessment rate in effect during 2004. 
The quantity of assessable Vidalia onions for the 2005 season is 
estimated at 3,350,000 40-pound cartons. Thus, the $0.10 per 40-pound 
carton rate should provide $335,000 in assessment income. Income 
derived from handler assessments, interest income ($3,000), 
contributions from the Georgia Department of Agriculture ($150,000), 
and income from the sale of Point-of-Sale advertisement material 
($6,000) will be adequate to cover budgeted expenses.
    The major expenditures recommended by the Committee for the 2005 
year include $92,500 for salaries, $59,800 for administrative expenses, 
$290,000 for marketing expenses, $5,000 for research expenses, and 
$3,000 for compliance. Budgeted expenses for these items in 2004 were 
$66,280, $237,435, $7,500, $1,000, and $0, respectively.
    The Committee at its December 15, 2004, meeting unanimously 
recommended reducing the assessable carton size from a 50-pound bag or 
equivalent to the current industry standard 40-pound carton size. The 
reduction in the assessable unit size increases the number of 
assessable units. The assessable unit size reduction also causes a 
slight increase in the actual per pound rate of assessment from $0.0024 
to $0.0025, or an increase of $0.0001 per pound.
    The Committee reviewed and unanimously recommended 2005 
expenditures of $450,300 which included increases in marketing, 
compliance, administrative expenses, and research programs. Prior to 
arriving at this budget, the Committee considered information from 
various sources. Alternative expenditure levels were discussed by the 
Committee based upon the relative value of various research and 
promotion projects to the Vidalia onion industry. The Committee also 
discussed keeping the current $0.12 per 50-pound bag or equivalent 
assessment rate. The Committee believes, however, that using the 
current industry standard unit of 40-pounds will increase efficiency by 
saving handlers the considerable time and expense previously spent in 
converting 40-pound units to the 50-pound assessment rate unit. The 
Committee also felt that the slight increase of $0.0001 per pound in 
assessments is insignificant when considering the benefits of using the 
industry standard unit. Thus, the assessment rate of $0.10 per 40-pound 
carton of assessable Vidalia onions was approved unanimously. The 
expected income was derived by multiplying the assessment rate by the 
estimated number of 40-pound cartons the industry expects to ship for 
the 2005 season. Also available for expenditure are interest income and 
matching funds from the State of Georgia (for expenditures pursuant to 
Sec.  955.50; production research, marketing research development, and 
marketing promotion, including paid advertising).
    A review of historical information and preliminary information 
pertaining to the upcoming fiscal period indicates that the grower 
price for the 2005 season could range between $13.75 and $17.15 per 40-
pound carton of Vidalia onions. Therefore, the estimated assessment 
revenue for the 2005 fiscal period as a percentage of total grower 
revenue could range between 0.58 and 0.73 percent.
    This action continues in effect the action that increased 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 are offset by the benefits derived by 
the operation of the marketing order. As noted earlier, the savings in 
time and expense previously spent on converting the industry standard 
40-pound carton to the 50-pound unit used by the Committee more than 
offsets the negligible assessment increase of $0.0001 per pound of 
onions handled. In addition, 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 
15, 2004, meeting was a public meeting and all entities, both large and 
small, were able to express views on this issue.
    This action imposes 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.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this rule.
    An interim final rule concerning this action was published in the 
Federal Register on March 8, 2005 (70 FR 11114). Copies of that rule 
were also mailed or sent via facsimile to all Vidalia onion handlers. 
Finally, the interim final rule was made available through the Internet 
by USDA and the Office of the Federal Register. A 60-day comment period 
was provided for interested persons to respond to the interim final 
rule. The comment period ended on May 9, 2005. One comment was 
received.
    The commenter stated that agricultural industry participants do not 
need government financial support to compete. However, the purpose of 
this action is to establish the assessment collection rate imposed on 
handlers, which enables the Committee to incur expenses to administer 
the program. Therefore, no changes will be made as a result of the 
comment.
    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 information and recommendation

[[Page 41608]]

submitted by the Committee and other available information, it is 
hereby found that this rule, as hereinafter set forth, 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

0
Accordingly, the interim final rule amending 7 CFR part 955 which was 
published at 70 FR 11114 on March 8, 2005, is adopted as a final rule 
without change.

    Dated: July 14, 2005.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 05-14261 Filed 7-19-05; 8:45 am]
BILLING CODE 3410-02-P