[Federal Register Volume 72, Number 133 (Thursday, July 12, 2007)]
[Rules and Regulations]
[Pages 37993-37995]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-13547]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 959

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


Onions Grown in South Texas; Exemption of Onions for Export

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 exempting 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 continues in effect 
the action that provides a special purpose shipment exemption for 
onions being shipped to export markets. Under this change, onion 
shipments for export will continue to be exempt from the grade, size, 
quality, and inspection requirements of the marketing order.
    This rule continues in effect the action that provides handlers 
additional flexibility in marketing onions of different grades and 
quality in various markets outside of the U.S. This change helps 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 Date: August 13, 2007.

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.''
    USDA is issuing this rule in conformance with Executive Order 
12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule is not intended to have retroactive effect. 
This rule will not preempt any State or local laws, regulations, or 
policies, unless they present an irreconcilable conflict with this 
rule.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 608c(15)(A) of the 
Act, any handler subject to an order may file with USDA a petition 
stating that the order, any provision of the order, or any obligation 
imposed in connection with the order is not in accordance with law and 
request a modification of the order or to be exempted therefrom. A 
handler is afforded the opportunity for a hearing on the petition. 
After the hearing USDA would rule on the petition. The Act provides 
that the district court of the United States in any district in which 
the handler is an inhabitant, or has his or her principal place of 
business, has jurisdiction to review USDA's ruling on the petition, 
provided an action is filed not later than 20 days after the date of 
the entry of the ruling.
    This rule, unanimously recommended by the Committee at its March 
16, 2007, meeting, continues in effect the action that 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 
were 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

[[Page 37994]]

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 
conveyed to USDA that there was an extremely short supply of onions in 
Mexico and other countries. This shortage fueled a greater demand for 
all grades of onions. The Committee indicated that there was a great 
deal of interest in various foreign markets for onions of varying 
grade, size, and quality. Texas producers and handlers were 
characterized by the Committee as eager to supply this demand and were 
thus fully in support of relaxing the handling regulations in an effort 
to provide onions for the developing export markets.
    The Committee also reported that the onion supply situation in 
Texas was hampered by a very short onion crop--approximately 12,500 
acres this year compared with approximately 18,000 acres in past 
seasons--and cold weather had 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 continues in effect the action that provides handlers additional 
flexibility in marketing onions of different grades and quality in 
various markets outside of the U.S. This change helps the South Texas 
onion industry develop additional markets for its onions, while 
increasing returns to producers and provides an increased supply of 
onions to help satisfy a rapidly developing export market.
    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 rule continues in 
effect the action that allows all shipments to export markets to also 
be exempt from grade, size, quality, and inspection requirements and 
tracked through the use of the Report of Special Purpose Onion Shipment 
form.

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. 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 continues in effect the action that 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 continues in effect the action that exempts 
onions being shipped to export markets from the order's handling 
regulations, and thus provides 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 requirements 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

[[Page 37995]]

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, as 
noted in the initial regulatory flexibility analysis, USDA has not 
identified any relevant Federal rules that duplicate, overlap or 
conflict with this rule.
    The 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 were invited to 
submit information on the regulatory and informational impacts of this 
action on small businesses.
    An interim final rule concerning this action was published in the 
Federal Register on April 9, 2007. Copies of the rule were mailed by 
the Committee's staff to all Committee members, onion handlers, and 
interested persons. In addition, the rule was made available through 
the Internet by USDA and the Office of the Federal Register. That rule 
provided for a 60-day comment period, which ended June 8, 2007. 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.
    This rule continues in effect the action that exempts onions for 
export from the handling regulations prescribed under the South Texas 
onion marketing order.
    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 (72 FR 17360, April 9, 2007) will tend to effectuate 
the declared policy of the Act.

List of Subjects in 7 CFR Part 959

    Onions, Marketing agreements, Reporting and recordkeeping 
requirements.

PART 959--ONIONS GROWN IN SOUTH TEXAS

0
Accordingly, the interim final rule amending 7 CFR part 959 which was 
published at 72 FR 17360 on April 9, 2007, is adopted as a final rule 
without change.

    Dated: July 9, 2007.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
 [FR Doc. E7-13547 Filed 7-11-07; 8:45 am]
BILLING CODE 3410-02-P