[Federal Register Volume 74, Number 78 (Friday, April 24, 2009)]
[Rules and Regulations]
[Pages 18621-18623]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-9378]



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  Federal Register / Vol. 74, No. 78 / Friday, April 24, 2009 / Rules 
and Regulations  

[[Page 18621]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 959

[Doc. No. AMS-FV-09-0012; FV09-959-1 IFR]


Onions Grown in South Texas; Change in Regulatory Period

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule revises the regulatory period during which minimum 
grade, size, quality, and maturity requirements are in effect for 
onions grown in South Texas under Marketing Order No. 959 (order). The 
previous regulatory period for South Texas onions was March 1 to July 
15 of each year. The new regulatory period ends on June 4. Prior to 
this change, onions subject to order requirements from June 5 to July 
15 were present in the market at the same time as onions produced in 
other areas of the United States not regulated under Federal marketing 
orders. Changing the ending date of the regulatory period to June 4 
relaxes the regulatory requirements for onions covered under the order, 
and will enable producers and handlers to compete more effectively in 
the marketplace, and therefore, promote the orderly marketing of 
onions. The South Texas Onion Committee (Committee), which locally 
administers the order, unanimously recommended the change.

DATES: Effective April 25, 2009; comments received by June 23, 2009 
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 document 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. All comments submitted in response to this rule 
will be included in the record and will be made available to the 
public. Please be advised that the identity of the individuals or 
entities submitting the comments will be made public on the Internet at 
the address provided above.

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 Order 
No. 959, 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. 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, which was unanimously recommended by the Committee, 
revises the regulatory period during which minimum grade, size, 
quality, and maturity requirements are in effect for onions grown under 
the order in South Texas. This change is intended to enable producers 
and handlers to compete more effectively in the marketplace, and 
therefore, promote the orderly marketing of onions.
    Section 959.52(b) of the order authorizes the establishment of 
grade, size, quality, maturity, or pack regulations for all varieties 
of onions within the production area during any period in any or all 
portions of the production area. Section 959.52(c) authorizes the 
modification, suspension, or termination of regulations. Section 959.60 
provides that whenever onions are regulated pursuant to Sec.  959.52, 
or at other times when recommended by the Committee and approved by the 
Secretary, such onions shall be inspected by the Federal or Federal-
State Inspection Service.
    Section 959.110 of the order's administrative rules and regulations 
apportions 35 South Texas counties between two onion-growing areas 
known as District 1, consisting of 19 counties designated as the 
Coastal Bend-Lower Valley area, and District 2, consisting of 16 
counties designated as the Laredo-Winter Garden area.
    Section 959.322 of the order's rules and regulations provides that 
the handling of South Texas onions shall be subject to specified grade, 
size, and inspection requirements. That section also prescribes the 
time period during which such regulatory requirements for

[[Page 18622]]

South Texas onions are in effect. Prior to this action, the regulatory 
period during which regulations were in effect ran from March 1 to July 
15, annually (see 72 FR 49136).
    During a public meeting held on December 15, 2008, the Committee 
unanimously recommended changing the ending date of the regulatory 
period for onions from July 15 to May 31. Upon further consideration, 
the Committee unanimously recommended, through a follow-up mail vote 
completed on January 28, 2009, changing the ending date to June 4.
    Prior to the 2007 marketing season, the regulatory period was from 
March 1 through June 4. At that time, the regulatory period did not 
completely cover the full South Texas production season and onion 
shipments occurring after June 4 were not subject to order 
requirements. The early and mid-season crop is produced in District 1 
of the production area, which generally accounts for about 90 percent 
of the total. The remaining crop, approximately 10 percent, is produced 
in District 2, and is shipped during the latter part of the season.
    In 2007, based on a Committee recommendation, the ending date of 
the regulatory period was extended from June 4 to July 15. The 
Committee believed that extending the ending date from June 4 to July 
15 would provide the consumer with higher-quality onions for a longer 
period of time because the entire production area would be regulated 
throughout its shipping period. Extending the ending date of regulation 
also resulted in additional assessment revenue being collected by the 
Committee, since assessments are based on inspection certificates.
    After two seasons' experience, District 2 producers and handlers 
requested the Committee to reconsider the extension of the regulatory 
period. According to the Committee, extending the regulatory period 
from June 4 to July 15 in 2007 resulted in the South Texas onion 
industry competing in the market directly with lower-quality onions 
shipped from other areas of the United States not regulated under 
Federal marketing orders. Onion prices are usually quite low during 
this period and these unregulated areas have a competitive advantage 
over District 2. Ending grade, size, quality, and maturity requirements 
on June 4, rather than July 15, relaxes regulation on District 2 
shippers and helps them compete in the market with shippers from non-
regulated production areas.
    The Committee also recommended continuing inspection of onions 
through July 15. To identify the quality and quantity of onions being 
shipped in the latter part of the season, the Committee will continue 
assessing all South Texas onion shipments. Collecting assessments for 
the entire season will provide a consistent funding source for 
Committee operations and programs, and will help to ensure that all 
handlers pay an equitable share of assessments.
    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. This action 
will have no impact on the import regulation for onions.

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), 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 rules issued thereunder, are unique in that 
they are brought about through group action of essentially small 
entities acting on their own behalf.
    Currently, there are approximately 84 producers of onions in the 
production area and approximately 31 handlers subject to regulation 
under the order. 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 having annual receipts of less than $7,000,000.
    Most of the South Texas handlers are vertically integrated 
corporations involved in producing, shipping, and marketing onions. For 
the 2007-08 marketing year, the industry's 31 handlers shipped onions 
produced on 10,978 acres with the average and median volume handled 
being 202,245 and 176,551 fifty-pound equivalents, respectively. In 
terms of production value, total revenues for the 31 handlers were 
estimated to be $174.7 million, with average and median revenues being 
$5.64 million and $4.92 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 31 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 $7,000,000 annual receipt 
threshold. All of the 84 producers may be classified as small entities 
based on the SBA definition if only their revenue from onions is 
considered.
    This rule shortens the ending date of the order's regulatory period 
for Texas onions shipped to the fresh market from July 15 to June 4 of 
each year. This action, which was unanimously recommended by the 
Committee, shortens the regulatory period during which minimum grade, 
size, quality, and maturity requirements are in effect for onions grown 
under the order. Authorization to implement such regulations is 
provided in Sec.  959.52(b) of the order. Regulatory requirements 
authorized under this section are provided in Sec.  959.322.
    This action provides that fresh onion shipments from the South 
Texas onion production area meet minimum grade, size, quality, and 
maturity requirements from March 1 through June 4 of each year. 
Inspection requirements will continue through July 15. The previous 
regulations require that onions grown in the production area meet order 
requirements from March 1 through July 15 of each year. Prior to the 
2007 marketing season, the regulatory period was from March 1 through 
June 4. In 2007, the regulatory period was extended from June 4 to July 
15. The Committee believed that applying quality requirements for a 
longer time period was necessary to accommodate an extended growing 
season.
    After two seasons' experience, District 2 producers and handlers 
requested that the Committee reconsider the previous regulatory 
extension. Onions subject to quality requirements under the order from 
June 5 to July 15 have been competing in the market with non-regulated 
onions from growing areas outside the order. Relaxing the requirements 
by changing the ending

[[Page 18623]]

date of the regulatory period back to June 4 relieves District 2 
handlers of the resulting inequity and enables them to be more 
competitive with shippers from other production areas.
    Under the order, the Committee collects assessments from handlers 
based on inspection of onions to be shipped to market. The Committee's 
recommendation to continue the inspection requirement to July 15 will 
allow the Committee to continue to collect assessments through the end 
of the season. This revenue will continue to be used by the Committee 
to fund its operations, including consistent funding for onion 
promotion and research projects under the order.
    One alternative to this action would be to not change the 
regulatory period back to June 4. However, the Committee believes that 
leaving the quality requirements in place for the entire season would 
not be as beneficial for those shipping onions in the latter part of 
the season.
    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.
    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.
    Further, 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. All 
Committee meetings are public meetings and all entities, both large and 
small, are able to express their views. Finally, interested persons are 
invited to submit comments on this interim final rule, including 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 regulatory period 
under the South 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 regulatory requirements on handlers; (2) 
this rule should be implemented as soon as possible since the South 
Texas onion regulatory period begins March 1; (3) the Committee 
unanimously recommended these changes; 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

    Marketing agreements, Onions, 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. In Sec.  959.322, the introductory text is revised to read as 
follows:
    During the period beginning March 1 and ending June 4, no handler 
shall handle any onions, including onions for peeling, chopping, and 
slicing, unless they comply with paragraphs (a) through (c) or (d) or 
(e) of this section; except that onions handled during the period June 
5 through July 15 shall comply with paragraphs (c) or (d) or (e) of 
this section.
* * * * *

    Dated: April 20, 2009.
Robert C. Keeney,
Acting Associate Administrator.
[FR Doc. E9-9378 Filed 4-23-09; 8:45 am]
BILLING CODE 3410-02-P