[Federal Register Volume 74, Number 225 (Tuesday, November 24, 2009)]
[Rules and Regulations]
[Pages 61263-61265]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-28144]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 959

[Doc. No. AMS-FV-09-0044; FV09-959-2 FIR]


Onions Grown in South Texas; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Affirmation of interim final rule as final rule.

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SUMMARY: The Department of Agriculture (USDA) is adopting, as a final 
rule, without change, an interim final rule that decreased the 
assessment rate established for the South Texas Onion Committee 
(Committee) for the 2009-10 and subsequent fiscal periods from $0.03 to 
$0.025 per 50-pound equivalent of onions handled. The Committee locally 
administers the marketing order which regulates the handling of onions 
grown in South Texas. The interim final rule was necessary to reduce 
the Committee's reserve fund to a desirable level.

DATES: Effective Date: Effective November 25, 2009.

FOR FURTHER INFORMATION CONTACT: Belinda G. Garza, Regional Manager,

[[Page 61264]]

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 obtain information on complying with this and 
other marketing order regulations by viewing a guide at the following 
Web site: http://www.ams.usda.gov/AMSv1.0/ams.fetchTemplateData.do?template=TemplateN&page=MarketingOrdersSmallBusinessGuide; or 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.''
    USDA is issuing this rule in conformance with Executive Order 
12866.
    Under the order, South Texas onion handlers are subject to 
assessments, which provide funds to administer the order. Assessment 
rates issued under the order are intended to be applicable to all 
assessable onions for the entire fiscal period, and continue 
indefinitely until amended, suspended, or terminated. The Committee's 
fiscal period begins on August 1 and ends on July 31.
    In an interim final rule published in the Federal Register on 
August 4, 2009, and effective on August 5, 2009 (74 FR 38505, Doc. No. 
AMS-FV-09-0044; FV09-959-2 IFR), Sec.  959.237 was amended by 
decreasing the assessment rate established for the Committee for the 
2009-10 and subsequent fiscal periods from $0.03 to $0.025 per 50-pound 
equivalent of onions handled. The decrease in the per-unit assessment 
rate was possible due to a higher than desired reserve fund coupled 
with adequate anticipated assessment revenue and interest income.

Final 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 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 84 producers of onions in the production 
area and approximately 31 handlers who are 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 less than $750,000, and small agricultural service firms are 
defined as those whose annual receipts are 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 continues in effect the action that decreased the 
assessment rate established for the Committee and collected from 
handlers for the 2009-10 and subsequent fiscal periods from $0.03 to 
$0.025 per 50-pound equivalent of onions. The Committee unanimously 
recommended 2009-10 expenditures of $184,705.12 and an assessment rate 
of $0.025 per 50-pound equivalent. The assessment rate of $0.025 is 
$0.005 lower than the rate previously in effect. The quantity of 
assessable onions for the 2009-10 fiscal period is estimated at 6 
million 50-pound equivalents. Thus, the $0.025 rate should provide 
$150,000 in assessment income. Income derived from handler assessments, 
along with interest income and funds from the Committee's authorized 
reserve will be adequate to cover budgeted expenses.
    The major expenditures recommended by the Committee for the 2009-10 
fiscal period include $73,705 for management, administrative, and rent 
expenses; $45,000 for promotion expenses; and $44,000 for compliance. 
Budgeted expenses for these items in 2008-09 (previous year) were 
$66,695, $45,000, and $48,000, respectively.
    The Committee reviewed and unanimously recommended 2009-10 
expenditures of $184,705.12, which included a decrease in compliance 
expenses due to a shortened regulatory period. The assessment rate of 
$0.025 per 50-pound equivalent of assessable onions recommended by the 
Committee was determined by considering anticipated expenses and 
production levels of South Texas onions. As stated earlier, the 
Committee utilized an estimate of 6 million 50-pound equivalents of 
assessable onions for the 2009-10 fiscal period, which, if realized 
will provide estimated assessment revenue of $150,000 from all 
handlers. In addition, it is anticipated that $34,705 will be provided 
by interest income and reserve funds. When combined, revenue from these 
sources will be adequate to cover budgeted expenses.
    The Committee discussed alternative expenditure levels, but 
determined that the recommended expenses were reasonable and necessary 
to adequately cover program operations. Other assessment rates were not 
considered because the Committee believed decreasing the rate by $0.005 
was sufficient to reduce their current reserve fund to a desirable 
level.
    A review of historical information and preliminary information 
pertaining to the upcoming fiscal period indicates that the season 
average f.o.b. price for the 2009-10 fiscal period could range between 
$10.00 and $28.00 per 50-

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pound equivalent of onions. Therefore, the estimated assessment revenue 
for the 2009-10 fiscal period as a percentage of total f.o.b. revenue 
could range between 0.1 and 0.25 percent.
    This rule continues in effect the action that decreased the 
assessment obligation imposed on handlers. Assessments are applied 
uniformly on all handlers, and some of the costs may be passed on to 
producers. However, decreasing the assessment rate reduces the burden 
on handlers, and may reduce the burden on producers. In addition, the 
Committee's meeting was widely publicized throughout the South Texas 
onion production area and all interested persons were invited to attend 
the meeting and participate in Committee deliberations on all issues. 
Like all Committee meetings, the June 9, 2009, 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 South Texas 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.
    Comments on the interim final rule were required to be received on 
or before October 5, 2009. No comments were received. Therefore, for 
the reasons given in the interim final rule, we are adopting the 
interim final rule as a final rule, without change.
    To view the interim final rule, go to http://www.regulations.gov/search/Regs/home.html#documentDetail?R=0900006480a0086c.
    This action also affirms information contained in the interim final 
rule concerning Executive Orders 12866 and 12988, the Paperwork 
Reduction Act (44 U.S.C. Chapter 35), and the E-Gov Act (44 U.S.C. 
101).
    After consideration of all relevant material presented, it is found 
that finalizing the interim final rule, without change, as published in 
the Federal Register (74 FR 38505, August 4, 2009) will tend to 
effectuate the declared policy of the Act.

List of Subjects in 7 CFR Part 959

    Marketing agreements, Onions, 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 74 FR 38505 on August 4, 2009, is adopted as a final rule, 
without change.

    Dated: November 17, 2009.
Rayne Pegg,
Administrator, Agricultural Marketing Service.
[FR Doc. E9-28144 Filed 11-23-09; 8:45 am]
BILLING CODE 3410-02-P