[Federal Register Volume 73, Number 123 (Wednesday, June 25, 2008)]
[Rules and Regulations]
[Pages 35886-35888]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-14339]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 956

[Docket No. AMS-FV-07-0157; FV08-956-1 FR]


Sweet Onions Grown in the Walla Walla Valley of Southeast 
Washington and Northeast Oregon; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule increases the assessment rate established for the 
Walla Walla Sweet Onion Marketing Committee (Committee) for the 2008 
and subsequent fiscal periods from $0.21 to $0.22 per 50-pound bag or 
equivalent of Walla Walla sweet onions handled. The Committee locally 
administers the marketing order which regulates the handling of sweet 
onions grown in the Walla Walla Valley of Southeast Washington and 
Northeast Oregon. Assessments upon Walla Walla sweet onion handlers are 
used by the Committee to fund the reasonable and necessary expenses of 
the program. The fiscal period begins January 1 and ends December 31. 
The assessment rate will remain in effect indefinitely unless modified, 
suspended, or terminated.

DATES: Effective Date: June 26, 2008.

FOR FURTHER INFORMATION CONTACT: Barry Broadbent or Gary Olson, 
Northwest Marketing Field Office, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, 1220 SW Third Avenue, 
Suite 385, Portland, OR 97204; Telephone: (503) 326-2724, Fax: (503) 
326-7440, or E-mail: [email protected] or [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 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. Under the marketing order now in effect, Walla Walla 
sweet onion handlers are subject to assessments. Funds to administer 
the order are derived from such assessments. It is intended that the 
assessment rate, as proposed herein, will be applicable to all 
assessable Walla Walla sweet onions beginning on January 1, 2008, 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 increases the assessment rate established for the 
Committee for the 2008 and subsequent fiscal periods from $0.21 to 
$0.22 per 50-pound bag or equivalent of Walla Walla sweet onions 
handled.
    The Walla Walla sweet onion marketing order provides authority for 
the Committee, with the approval of USDA, to formulate an annual budget 
of expenses and collect assessments from

[[Page 35887]]

handlers to administer the program. The members of the Committee are 
producers and handlers of Walla Walla sweet 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 1998-1999 and subsequent fiscal periods, the Committee 
recommended, and USDA approved, an assessment rate of $0.21 per 50-
pound bag or equivalent that would continue in effect indefinitely 
unless modified, suspended, or terminated by USDA upon the basis of the 
Committee's recommendation or other information available to USDA.
    On December 11, 2007, the Committee met and unanimously recommended 
2008 expenditures of $116,255 and a $0.01 increase in the assessment 
rate from $0.21 to $0.22 per 50-pound bag or equivalent. In comparison, 
the budgeted expenditures for the 2007 fiscal period were $139,210.
    The increase in the assessment rate is necessary to offset the 
recent decline in assessments paid by handlers. Assessment receipts 
have decreased as the production levels of Walla Walla sweet onions 
have dropped below historical averages--a result of lower total acreage 
planted and isolated weather-related crop failures. In response to the 
lower assessment income level, the Committee reduced the total budgeted 
expenditures from $139,210 in 2007 to $116,255 for 2008, but still 
found it necessary to increase the assessment rate to adequately fund 
Committee operations.
    The major expenditures recommended by the Committee for the 2008 
fiscal year include $62,732 for administration, $5,000 for travel, 
$44,000 for promotion, and $2,000 for compliance. Budgeted expenses for 
these items in 2007 were $62,477, $5,000, $63,300, and $1,000, 
respectively.
    The assessment rate recommended by the Committee was derived by 
dividing anticipated expenses by expected shipments of Walla Walla 
sweet onions from the production area. Walla Walla sweet onion 
shipments are estimated to be 510,250 50-pound bags or equivalents for 
the 2008 fiscal period, which should provide $112,255 in assessment 
income. The remaining difference between the anticipated Committee 
expenses and the anticipated revenue from assessments is expected to 
come from interest income on reserve funds ($4,000). Funds held in 
reserve by the Committee (currently $144,953) are not expected to 
exceed the equivalent of two fiscal periods budgeted expenditures, the 
maximum permitted by the order.
    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 will be in effect 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 2008 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.
    There are approximately 42 producers of Walla Walla sweet onions in 
the production area and approximately 20 handlers subject to regulation 
under the marketing order. Small agricultural producers are defined by 
the Small Business Administration (13 CFR 121.201)(SBA) as those having 
annual receipts less than $750,000, and small agricultural service 
firms are defined as those whose annual receipts are less than 
$6,500,000.
    The Committee estimates that in 2007, 494,918 50-pound units of 
Walla Walla sweet onions were marketed at an average FOB price of 
approximately $19.00 per 50-pound unit. Using that price as a basis, 
the total industry value at shipping point was approximately 
$9,400,000. Average receipts per handler were $470,000, which is much 
less than the threshold the SBA uses to define a small service firm. 
Average receipts for the 42 producers of Walla Walla sweet onions for 
last year were approximately $225,000, well within the SBA definition 
of small agricultural producer. Thus, it can be concluded that most, if 
not all, handlers and producers of Walla Walla sweet onions may be 
classified as small entities based on the definition of the SBA.
    This rule increases the assessment rate established for the 
Committee and collected from handlers for the 2008 and subsequent 
fiscal periods from $0.21 to $0.22 per 50-pound bag or equivalent. The 
Committee unanimously recommended 2008 expenditures of $116,255 and an 
assessment rate of $0.22 per 50-pound bag or equivalent. The assessment 
rate of $0.22 is $0.01 higher than the rate previously established in 
the order. The quantity of assessable Walla Walla sweet onions for the 
2008 year is estimated at 510,250 50-pound bags or equivalents. Thus, 
the $0.22 rate should provide $112,255 in assessment income and, along 
with $4,000 in interest income, will be adequate to meet this year's 
budgeted expenses of $116,255.
    The major expenditures recommended by the Committee for the 2008 
year include $62,732 for administration, $5,000 for travel, $44,000 for 
promotion, and $2,000 for compliance. Budgeted expenses for these items 
in 2007 were $62,477, $5,000, $63,300, and $1,000, respectively.
    The recent decline in assessments collected from handlers has 
necessitated this assessment rate increase. Assessment income has 
decreased as the production levels of Walla Walla sweet onions have 
dropped below historical average levels as a result of lower total 
acreage planted and isolated weather related crop failures. In response 
to the lower assessment income level, the Committee reduced its total 
budgeted expenditures from $139,210 in 2007 to $116,255 for 2008, but 
still found it necessary to increase the assessment rate to adequately 
fund Committee operations without depleting the Committee's reserve 
funds.
    The Committee reviewed and unanimously recommended 2008 
expenditures of $116,255. Prior to

[[Page 35888]]

arriving at this budget, the Committee considered information from 
various sources, including the Finance and the Promotion sub-
committees. Alternative expenditure levels were discussed at length by 
all parties. The assessment rate of $0.22 per 50-pound bag or 
equivalent of assessable Walla Walla sweet onions was then determined 
by dividing the total recommended budget by the quantity of assessable 
Walla Walla sweet onions, estimated at 510,250 50-pound units for the 
2008 fiscal period. Anticipated assessment revenue is expected to be 
approximately $4,000 below the budgeted expenses, which the Committee 
determined to be acceptable. The Committee expects that interest income 
for the year will compensate for the $4,000 deficit, but is prepared to 
use reserve funds if necessary.
    A review of historical information and preliminary information 
pertaining to the upcoming crop year indicates that the producer price 
for Walla Walla sweet onions for the 2008 season could range between 
$10.00 and $12.00 per 50-pound bag or equivalent. Therefore, the 
estimated assessment revenue for the 2008 crop year as a percentage of 
total producer revenue could range between 1.83 and 2.20 percent.
    This action increases 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. In addition, the Committee's meeting was widely publicized 
throughout the Walla Walla sweet 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 
11, 2007, meeting was a public meeting and all entities, both large and 
small, were able to express views on this issue.
    This rule imposes no additional reporting or recordkeeping 
requirements on either small or large Walla Walla sweet 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.
    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.
    As noted in the initial regulatory flexibility analysis, USDA has 
not identified any relevant Federal rules that duplicate, overlap, or 
conflict with this final rule.
    A proposed rule concerning this action was published in the Federal 
Register on March 14, 2008 (73 FR 13798). Copies of the proposed rule 
were also mailed or sent via facsimile to all Walla Walla sweet onion 
handlers. Finally, the proposal was made available through the Internet 
by USDA and the Office of the Federal Register. A 60-day comment period 
ending May 13, 2008, was provided for interested persons to respond to 
the proposal. 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/AMSv1.0/ams.fetchTemplateData.do?template=TemplateN&page=MarketingOrdersSmallBusinessGuide. 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 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.
    Pursuant to 5 U.S.C. 553, it also found and determined that good 
cause exists for not postponing the effective date of this rule until 
30 days after publication in the Federal Register because handlers are 
already receiving 2008 crop Walla Walla sweet onions from producers. 
The crop year began on January 1, 2008, and the assessment rate applies 
to all Walla Walla sweet onions received during the 2008 and subsequent 
seasons. Also, the Committee needs funds to pay its expenses, which are 
incurred on a continuing basis. Further, handlers are aware of this 
rule which was recommended at a public meeting. Finally, a 60-day 
comment period was provided for in the proposed rule.

List of Subjects in 7 CFR Part 956

    Marketing agreements, Onions, Reporting and recordkeeping 
requirements.


0
For the reasons set forth in the preamble, 7 CFR part 956 is amended as 
follows:

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

0
1. The authority citation for 7 CFR part 956 continues to read as 
follows:

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


0
2. Section 956.202 is revised to read as follows:


Sec.  956.202  Assessment rate.

    On and after January 1, 2008, an assessment rate of $0.22 per 50-
pound bag or equivalent is established for Walla Walla sweet onions.

    Dated: June 19, 2008.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E8-14339 Filed 6-24-08; 8:45 am]
BILLING CODE 3410-02-P