[Federal Register Volume 72, Number 67 (Monday, April 9, 2007)]
[Rules and Regulations]
[Pages 17360-17362]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 07-1749]



[[Page 17360]]

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

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 959

[Docket No. AMS-FV-07-0043; FV07-959-2 IFR]


Onions Grown in South Texas; Exemption of Onions for Export

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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

SUMMARY: This rule exempts onions being shipped to export markets from 
regulations prescribed under the South Texas onion marketing order. The 
marketing order regulates the handling of onions grown in South Texas, 
and is administered locally by the South Texas Onion Committee 
(Committee). This rule provides a special purpose shipment exemption 
for onions being shipped to export markets. Under this change, onion 
shipments for export will be exempt from the grade, size, quality, and 
inspection requirements of the marketing order. This rule will provide 
handlers additional flexibility in marketing onions of different grades 
and quality in various markets outside of the U.S. This change is 
expected to help the South Texas onion industry develop additional 
markets for its onions, while increasing returns to producers and 
providing an increased supply of onions to help satisfy a rapidly 
developing export market.

DATES: Effective April 10, 2007. Comments received by June 8, 2007 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; 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.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Belinda G. Garza, Regional Manager, 
Texas Marketing Field Office, Marketing Order Administration Branch, 
Fruit and Vegetable Programs, AMS, USDA; Telephone: (956) 682-2833, 
Fax: (956) 682-5942, or E-mail: [email protected].
    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. 143 and Order No. 959, both as amended (7 CFR part 959), 
regulating the handling of onions grown in South Texas, 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 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 action, unanimously recommended by the Committee at its March 
16, 2007, meeting, exempts onion export shipments from the grade, size, 
quality and inspection requirements prescribed under the South Texas 
onion marketing order. To effectuate the exemption, paragraphs (e)(1) 
and (f) of Sec.  959.322 are modified by adding the term ``export'' to 
the list of authorized special purpose shipment categories.
    Section 959.52 of the order authorizes the issuance, amendment, 
modification, suspension, or termination of regulations for grade, 
size, quality, maturity, pack, and container for any variety of onions 
grown in the production area. Section 959.53 provides that regulations 
in effect pursuant to Sec. Sec.  959.42, 959.52, or 959.60 may be 
modified, suspended or terminated to facilitate the handling of onions 
for specified special purpose shipments, including export. Section 
959.60 provides that whenever onions are regulated pursuant to Sec.  
959.52, such onions must be inspected by the Federal-State Inspection 
Service, and certified as meeting the applicable requirements of such 
regulations.
    Section 959.322 contains the order's handling regulations and 
includes provisions for grade, size, and inspection requirements, as 
well as a minimum quantity exemption, certain special purpose shipment 
exemptions, and experimental shipments. The handling regulations also 
provide safeguards to ensure that onions being shipped for special 
purposes are handled in accordance with order provisions.
    The Committee meets prior to and during each season to consider 
recommendations for modification, suspension, or termination of the 
regulatory requirements for South Texas onions which have been issued 
on a continuing basis. Committee meetings are open to the public and 
interested persons may express their views at these meetings. The USDA 
reviews Committee recommendations and information submitted by the 
Committee and other available information, and determines whether 
modification, suspension, or termination of the regulatory requirements 
would tend to effectuate the declared policy of the Act.
    Based on discussion at the March 16, 2007, meeting, the Committee 
has conveyed to USDA that there currently exists an extremely short 
supply of onions in Mexico and other countries. This shortage has 
fueled a greater demand for all grades of onions. The Committee 
indicated that there is a great deal of interest in various foreign 
markets for onions of varying grade, size, and quality. Texas producers 
and handlers are characterized by the Committee as being eager to 
supply this demand and are thus fully in support of relaxing the 
handling regulations in an effort to provide onions for the developing 
export markets.
    The Committee also reports that the onion supply situation in Texas 
is hampered by a very short onion crop--

[[Page 17361]]

approximately 12,500 acres this year compared with approximately 18,000 
acres in past seasons--and recent cold weather that has caused some 
quality issues in certain areas of the South Texas onion production 
area.
    By exempting onions for export from the handling regulations, this 
rule will provide handlers additional flexibility in marketing onions 
of different grades and quality in various markets outside of the U.S. 
This change is expected to help the South Texas onion industry develop 
additional markets for its onions, while increasing returns to 
producers and providing an increased supply of onions to help satisfy a 
rapidly developing export market.
    Currently, all handlers making onion shipments for relief, charity, 
processing, or experimental purposes are required to apply for and 
obtain a Certificate of Privilege from the Committee to make such 
shipments. Once handlers are approved for such shipments, a Report of 
Special Purpose Onion Shipment form must be submitted to the Committee 
for each such onion shipment in order to ensure that the shipments are 
in accordance with Committee requirements. This action will allow all 
shipments to export markets to also be exempt from grade, size, 
quality, and inspection requirements and will be tracked through the 
use of the Report of Special Purpose Onion Shipment form.

Initial Regulatory Flexibility Analysis

    Pursuant to the 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 so 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. Small agricultural producers are defined 
by the Small Business Administration (SBA) (13 CFR 121.201) as those 
having annual receipts of less than $750,000. Small agricultural 
service firms are defined as those with annual receipts of less than 
$6,500,000.
    There are approximately 114 producers of onions in the production 
area and approximately 38 handlers subject to regulation under the 
order. Most of the handlers are vertically integrated corporations 
involved in producing, shipping, and marketing onions. For the 2005-06 
marketing year, the industry's 38 handlers shipped onions produced on 
17,694 acres with the average and median volume handled being 182,148 
and 174,437 fifty-pound equivalents, respectively. In terms of 
production value, total revenues for the 38 handlers were estimated to 
be $44.2 million, with average and median revenues being $1.6 million 
and $1.12 million, respectively.
    The South Texas onion industry is characterized by producers and 
handlers whose farming operations generally involve more than one 
commodity, and whose income from farming operations is not exclusively 
dependent on the production of onions. Alternative crops provide an 
opportunity to utilize many of the same facilities and equipment not in 
use when the onion production season is complete. For this reason, 
typical onion producers and handlers either produce multiple crops or 
alternate crops within a single year.
    Based on the SBA's definition of small entities, the Committee 
estimates that all of the 38 handlers regulated by the order would be 
considered small entities if only their onion revenues are considered. 
However, revenues from other farming enterprises could result in a 
number of these handlers being above the $6,500,000 annual receipt 
threshold. All of the 114 producers may be classified as small entities 
based on the SBA definition if only their revenue from onions is 
considered.
    This rule exempts onion export shipments from the grade, size, 
quality and inspection requirements prescribed under the South Texas 
onion marketing order. To realize the exemption, paragraphs (e) and (f) 
of Sec.  959.322 are modified by adding the term ``export'' to the list 
of authorized special purpose shipment categories.
    Section 959.52 of the order authorizes the issuance of regulations 
for grade, size, quality, maturity, pack, and container for any variety 
of onions grown in the production area. Section 959.53 provides for the 
exemption from the handling regulations certain kinds of onion 
shipments, including export.
    The Committee anticipates that this rule will not negatively impact 
small businesses. This rule exempts onions being shipped to export 
markets from the order's handling regulations, and thus should provide 
enhanced marketing opportunities for all handlers, increased income for 
South Texas onion producers, and increased purchasing flexibility for 
foreign consumers.
    The Committee considered alternatives to this recommendation. One 
consideration would have relaxed the minimum quality requirement of all 
onion shipments, both domestic and export, from U.S. No. 1 to U.S. No. 
2. Although this option may have taken care of the export market 
demands, it was rejected early in the discussion due to the problems 
associated with trying to market onions that grade less than U.S. No. 1 
to U.S. consumers. Also briefly considered was the option of suspending 
the entire handling regulation, either on a temporary basis or 
indefinitely. The Committee also rejected this option as being too 
extreme for the current situation.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the information collection requirements that are contained 
in this rule are currently approved by the Office of Management and 
Budget (OMB), under OMB No. 0581-0178, Vegetable and Specialty Crops. 
This rule will impose minimal additional reporting or recordkeeping 
requirements, deemed to be insignificant, on both small and large onion 
handlers that export onions.
    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 AMS is committed to complying with the E-Government Act, to 
promote the use of the Internet and other information technologies to 
provide increased opportunities for citizen access to Government 
information and services, and for other purposes.
    The Committee's meeting was widely publicized throughout the South 
Texas onion industry and all interested persons were invited to attend 
the meeting and participate in Committee deliberations. Like all 
Committee meetings, the March 16, 2007, meeting was a public meeting 
and all entities, both large and small, were able to express their 
views on this issue. Furthermore, 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

[[Page 17362]]

address in the FOR FURTHER INFORMATION CONTACT section.
    This rule invites comments on the exemption of onions for export 
from the handling regulations prescribed under the Texas onion 
marketing order. 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 other information, it is found that 
this interim final rule, as hereinafter set forth, will tend to 
effectuate the declared policy of the Act.
    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) This rule relaxes the order's regulatory requirements by 
exempting South Texas onions shipped to the export market from the 
order's handling regulations; (2) onion handlers are aware of this 
recommendation and need no additional time to comply with the relaxed 
requirements; (3) the shipping season for South Texas onions started 
around March 1, thus this rule should be effective as soon as possible 
to ensure that all handlers can take advantage of the relaxation for as 
much of the season as possible; and (4) this rule provides a 60-day 
comment period, and any comments received will be considered prior to 
finalization of this rule.

List of Subjects in 7 CFR Part 959

    Onions, Marketing agreements, Reporting and recordkeeping 
requirements.

0
For the reasons set forth in the preamble, 7 CFR part 959 is amended as 
follows:

PART 959--ONIONS GROWN IN SOUTH TEXAS

0
1. The authority citation for 7 CFR part 959 continues to read as 
follows:

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


0
2. Section 959.322 is amended by revising paragraph (e)(1) and the 
introductory sentence of paragraph (f) to read as follows:
* * * * *
    (e) Special purpose shipments. (1) The minimum grade, size, 
quality, and inspection requirements set forth in paragraphs (a) 
through (c) of this section shall not be applicable to shipments of 
onions for charity, relief, export, and processing if handled in 
accordance with paragraph (f) of this section.
* * * * *
    (f) Safeguards. Each handler making shipments of onions for 
charity, relief, export, processing, or experimental purposes shall:
* * * * *

    Dated: April 4, 2007.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 07-1749 Filed 4-4-07; 4:27 pm]
BILLING CODE 3410-02-P