[Federal Register Volume 86, Number 148 (Thursday, August 5, 2021)]
[Proposed Rules]
[Pages 42748-42751]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-16495]
========================================================================
Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
========================================================================
Federal Register / Vol. 86, No. 148 / Thursday, August 5, 2021 /
Proposed Rules
[[Page 42748]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Parts 959 and 980
[Docket No. AMS-SC-21-0003; SC21-959-2 PR]
Onions Grown in South Texas and Imported Onions; Termination of
Marketing Order 959 and Change in Import Requirements
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This rule invites comments on the proposed termination of the
Federal marketing order regulating the handling of onions grown in
South Texas and the rules and regulations issued thereunder. A
corresponding change would be made to the onion import regulation as
required under section 8e of the Agricultural Marketing Agreement Act
of 1937.
DATES: Comments must be received by October 4, 2021.
ADDRESSES: Interested persons are invited to submit written comments
concerning this proposal. Comments must be submitted to the Docket
Clerk electronically by Email: [email protected] 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 can be viewed at: http://www.regulations.gov. All
comments submitted in response to this proposal 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: Abigail Campos, Marketing Specialist,
or Christian D. Nissen, Regional Director, Southeast Marketing Field
Office, Marketing Order and Agreement Division, Specialty Crops
Program, AMS, USDA; Telephone: (863) 324-3375, Fax: (863) 291-8614, or
Email: [email protected] or [email protected].
Small businesses may request information on complying with this
regulation by contacting Richard Lower, Marketing Order and Agreement
Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue
SW, STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, or
Email: [email protected].
SUPPLEMENTARY INFORMATION: This action, pursuant to 5 U.S.C. 553,
proposes the termination of regulations issued to carry out a marketing
order as defined in 7 CFR 900.2(j). This proposed rule is issued under
Marketing Order No. 959, as amended (7 CFR part 959), regulating the
handling of onions grown in South Texas. Part 959 (referred to as 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 South Texas Onion Committee (Committee) locally
administers the Order and is comprised of producers and handlers
operating within the production area.
This proposed rule is also issued under section 8e of the Act (7
U.S.C. 608e-1), which provides whenever certain specified commodities,
including onions, are regulated under a Federal marketing order,
imports of theses commodities into the United States are prohibited
unless they meet the same or comparable grade, size, quality, or
maturity requirements as those in effect for the domestically produced
commodities.
The Department of Agriculture (USDA) is issuing this proposed rule
in conformance with Executive Orders 12866 and 13563. Executive Orders
12866 and 13563 direct agencies to assess all costs and benefits of
available regulatory alternatives and, if regulation is necessary, to
select regulatory approaches that maximize net benefits (including
potential economic, environmental, public health and safety effects,
distributive impacts and equity). Executive Order 13563 emphasizes the
importance of quantifying both costs and benefits, reducing costs,
harmonizing rules, and promoting flexibility. This action falls within
a category of regulatory actions that the Office of Management and
Budget (OMB) exempted from Executive Order 12866 review.
This proposed rule has been reviewed under Executive Order 13175--
Consultation and Coordination with Indian Tribal Governments, which
requires agencies to consider whether their rulemaking actions would
have tribal implications. AMS has determined that this proposed rule is
unlikely to have substantial direct effects on one or more Indian
tribes, on the relationship between the Federal Government and Indian
tribes, or on the distribution of power and responsibilities between
the Federal Government and Indian tribes.
This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. This proposed rule is not intended to have
retroactive effect.
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 a marketing order may file with USDA a
petition stating that the marketing order, any provision of the
marketing order, or any obligation imposed in connection with the
marketing order is not in accordance with law and request a
modification of the marketing 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 (U.S.) 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.
There are no administrative procedures that must be exhausted prior
to any judicial challenge to the provisions of import regulations
issued under section 8e of the Act.
The Order has been in effect since 1961 and provides the South
Texas onion industry with authority for grade, size, quality, pack, and
container regulations, research, and promotion programs, as well as
authority for inspection requirements. The Order also authorizes
reporting and recordkeeping functions required for the operation of the
Order. The Order is locally administered by the Committee and is
[[Page 42749]]
funded by assessments imposed on handlers.
This rule proposes termination of the Order and the rules and
regulations issued thereunder. The Order regulates the handling of
onions grown in South Texas. This action is based on the results of a
continuance referendum in which producers failed to support the
continuation of the Order. USDA believes termination of this program
would be appropriate as the Order is no longer favored by industry
producers.
Section 959.84(d) of the Order provides that USDA shall conduct a
referendum within six years after the establishment of the Order and
every sixth year thereafter to ascertain whether continuance is favored
by producers. The section also states USDA would consider termination
of the Order if less than two-thirds of the producers voting in the
referendum and producers of less than two-thirds of the volume of
onions represented in the referendum favor continuance. As required by
the Order, USDA held a continuance referendum among South Texas onion
producers from September 21 through October 13, 2020, to determine if
they favored continuation of the program.
Ballots were mailed to 71 producers in the South Texas production
area. For the referendum, 23 valid ballots were cast. The results show
57 percent of the producers voting, who produced 53 percent of the
volume represented in the referendum, favored continuation of the
program. The Order failed to meet both of the two-thirds criteria for
continuance, demonstrating a lack of the producer support needed to
carry out the objectives of the Act.
Section 608c(16)(A) of the Act provides that USDA terminate or
suspend the operation of any order whenever the order or any provision
thereof obstructs or does not tend to effectuate the declared policy of
the Act. Based on the foregoing, and pursuant to Sec. 608c(16)(A) of
the Act and Sec. 959.84 of the Order, USDA is considering termination
of the Order. If USDA decides to terminate the Order, trustees would be
appointed to conclude and liquidate the affairs of the Committee and
would continue in that capacity until discharged by USDA. In addition,
USDA would notify Congress of the proposed termination of the Order not
later than 60 days before the Order is terminated pursuant to Sec.
608c(16)(A) of the Act.
A notice announcing the results of the referendum was issued on
January 5, 2021. On March 15, 2021, USDA suspended collection of
assessments under the Order while the proposed termination of the
program is being processed by USDA. All other provisions, including
grade and size requirements, remain in effect until the Order is
terminated.
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. Because
this proposed rule would terminate regulations for domestically
produced onions, a corresponding change to the imported regulations
would also be required.
Minimum grade, size, maturity, and quality requirements for onions
imported into the United States are established under Sec. 980.117.
Currently, from March 10 through June 4 of each marketing year,
imported onions, not including pearl and cipolline onions, must comply
with grade, size, quality, and maturity requirements imposed under the
Order for South Texas onions. From June 5 through March 9 of each
marketing year, and for the entire year for pearl and cipolline onions,
imported onions are subject to the requirements of Marketing Order 958,
which regulate onions handled in Idaho and Oregon. This proposal would
amend Sec. 980.117 by removing the requirements based on the Order for
South Texas onions from March 10 through June 4. The import
requirements for onions based on Marketing Order 958 would remain in
effect from June 5 through March 9, and for the entire year for pearl
and cipolline 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 proposed rule 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
businesses 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 70 producers of onions in the production
area and approximately 30 handlers subject to regulation under the
Order. There are 53 onion importers. Small agricultural producers are
defined by the Small Business Administration (SBA) as those having
annual receipts of less than $1,000,000, and small agricultural service
firms are defined as those having annual receipts of less than
$30,000,000 (13 CFR 121.201).
According to the National Agricultural Statistics Service (NASS),
the weighted producer price for South Texas onions during the 2018-19
season was around $9.09 per 50-pound equivalent. The Committee reports
total onion shipments were approximately 4.2 million 50-pound
equivalents. Using the weighted average price and shipment information,
the total 2018-19 crop value is estimated at $38.2 million. Dividing
the crop value by the estimated number of producers (70) yields an
estimated average receipt per producer of $545,714, so the majority of
producers would have annual receipts of less than $1,000,000.
The average handler price for South Texas onions during the 2018-19
season was approximately $11.00 per 50-pound equivalent. Using the
average price and shipment information, the total 2018-19 handler crop
value is estimated at $46.2 million. Dividing this figure by the number
of handlers (30) yields an estimated average annual handler receipts of
$1.54 million, which is below the SBA threshold for small agricultural
service firms. Thus, the majority of onion producers and handlers may
be classified as small entities.
Mexico, Peru, and Canada are the major onion producing countries
exporting onions to the United States. In 2019, shipments of onions
imported into the United States totaled approximately 543,343 metric
tons. Information from USDA's Economic Research Service indicates the
dollar value of imported onions was approximately $431 million in 2019.
Using this value and the number of importers (53), most importers would
have annual receipts of less than $30,000,000 for onions.
This rule proposes termination of the Order and the rules and
regulations issued thereunder, regulating the handling of onions grown
in South Texas. Section 959.84(d) of the Order requires USDA to conduct
a referendum every sixth year to ascertain whether continuance is
favored by producers. USDA would consider termination of the Order if
less than two-thirds of the producers voting in the referendum and
producers of less than two-thirds of the volume of onions represented
in the referendum favor continuance. Based on the results of a recent
continuance referendum, support for the Order failed to meet the two-
thirds requirement by vote or volume indicating continuation
[[Page 42750]]
of the program is no longer favored by industry producers.
Consequently, USDA is considering termination of the Order.
Corresponding changes would also be made to sections of the
requirements for onions imported into the United States.
Marketing Orders provide industries with tools to assist producers
and handlers in addressing challenges facing the industry. These tools
include: Establishing minimum grade, size, quality, and maturity
requirements, setting size, capacity, weight, dimensions or pack of the
containers, collecting and publish market information useful to growers
and handlers, conducting research and promotions, and establishing
volume control requirements. Each Marketing Order is different, with
the industries deciding the authorities needed and the scope of their
Marketing Order. Marketing Orders are approved by producers through
referenda and regulate handlers to ensure compliance with all
requirements. The authority of a Marketing Order allows each industry
to create a local administrative committee that is made up of growers
and/or handlers that work collectively to solve industry problems.
Establishing minimum grade, size, quality, and maturity
requirements aims to stabilize market conditions for fresh fruit and
vegetables. The goal of these requirements is to help balance consumer
demands for high quality products and in turn provide better returns to
producers for producing and delivering more consistent, quality
products to the market. They are also expected to promote repeat
consumer purchases and increase demand for a high-quality product.
The Order has been in effect since 1961 and provides the South
Texas onion industry with authority for grade, size, quality, pack, and
container regulations, research, and promotion programs, as well as
authority for inspection requirements. The Order also authorizes
reporting and recordkeeping functions required for the operation of the
Order. The Order is locally administered by the Committee and is funded
by assessments imposed on handlers.
As this change would terminate the Order and all the rules and
regulations issued thereunder, the perceived benefits correlated with
the Order would be lost. However, there would also be savings by
eliminating costs associated with the Order, which include the payment
of assessments and costs related to inspection.
A review of the referendum results shows that producers failed to
reach the necessary threshold for the vote to pass by either vote or by
volume as specified in the Order, indicating the benefits of the
program no longer outweigh the costs to handlers and producers.
Although marketing order requirements are applied to handlers, the
costs of such requirements are often passed on to producers.
Termination of the Order, and the resulting regulatory relaxation,
could therefore be expected to reduce costs for both producers and
handlers.
Pursuant to section 8e of the Act, this action would also modify
the onion import regulation (7 CFR 980.117). That regulation currently
specifies grade, size, quality, and maturity requirements based on
those requirements established under Marketing Order 959. With this
change, those requirements would no longer be in effect from March 10
through June 4 of the marketing year. While this change could benefit
importers through a reduction in costs, the loss of grade and size
requirements both from the domestic production as well as the imported
product could negatively impact the onion market.
An alternative to this action would be to maintain the Order and
its current provisions. However, the Order requires that a continuance
referendum be conducted every sixth year to determine industry support
for the program. The results of a recently held producer continuance
referendum on the Texas onion program indicated a lack of producer
support, indicating that the Order no longer meets the needs of
producers and handlers. Therefore, this alternative was rejected, and
USDA is considering terminating the Order.
This proposed rule is intended to solicit input and other available
information from interested parties on whether the Order should be
terminated. USDA will evaluate all available information prior to
making a final determination on this matter.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35), the Order's information collection requirements have been
previously approved by OMB and assigned OMB No. 0581-0178 Vegetable and
Specialty Crops. Termination of the Order, and the reporting
requirements prescribed therein, would reduce the reporting burden on
South Texas onion handlers by an estimated 1.83 hours per handler.
Handlers would no longer be required to file forms with the Committee,
which is expected to reduce industry expenses. This rule would 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.
The producer referendum was well publicized in the production area,
and referendum ballots were mailed to all known producers. As such,
producers of South Texas onions had an opportunity to indicate their
continued support for the Order. Further, interested persons are
invited to submit comments on this proposed rule, including the
regulatory and information collection impacts of this proposed 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/rules-regulations/moa/small-businesses. Any questions
about the compliance guide should be sent to Richard Lower at the
previously mentioned address in the FOR FURTHER INFORMATION CONTACT
section.
In accordance with section 8e of the Act, the United States Trade
Representative has concurred with the issuance of this proposed rule.
This rule invites comments on the proposed termination of Marketing
Order 959, which regulates the handling of onions grown in South Texas.
A 60-day comment period is provided to allow interested persons to
respond to this proposal. All comments timely received will be
considered before a final determination is made on this matter.
Termination of the Order provisions would become effective only after a
60-day notification to Congress as required by law.
List of Subjects
7 CFR Part 959
Marketing agreements, Onions, Reporting and recordkeeping
requirements.
7 CFR Part 980
Food grades and standards, Imports, Marketing agreements, Onions,
Potatoes, Tomatoes.
For the reasons set forth in the preamble, 7 CFR part 959 is
proposed to be removed and 7 CFR part 980 is proposed to be amended as
follows:
[[Page 42751]]
PART 959--[REMOVED]
0
1. Part 959 is removed.
PART 980--VEGETABLES; IMPORT REGULATIONS
0
2. The authority citation for 7 CFR part 980 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
0
3. In Sec. 980.117, revise paragraphs (a) and (b) to read as follows:
Sec. 980.117 Import regulations; onions.
(a) Findings and determinations with respect to onions.
(1) Under section 8e of the Agricultural Marketing Agreement Act of
1937, as amended (7 U.S.C. 601-674), it is hereby found that:
(i) Grade, size, quality, and maturity regulations have been issued
regularly under Marketing Order No. 958, as amended;
(ii) The marketing of onions can be reasonably distinguished by the
seasonal categories, i.e., late summer and early spring. The bulk of
the late summer crop is harvested and placed in storage in late summer
and early fall and marketed over a period of several months extending
into the following spring. But the onions harvested from the early
spring crop are generally marketed as soon as the onions are harvested.
The marketing seasons for these crops overlap;
(iii) Concurrent grade, size, quality, and maturity regulations
under the marketing order are expected in future seasons, as in the
past.
(2) Therefore, it is hereby determined that: Imports of onions
during the June 5 through March 9 period, and the entire year for
imports of pearl and cipolline varieties of onions, are in most direct
competition with the marketing of onions produced in designated
counties of Idaho and Malheur County, Oregon, covered by Marketing
Order No. 958, as amended (7 CFR part 958).
(b) Grade, size, quality, and maturity requirements. On and after
the effective date hereof no person may import onions as defined herein
unless they are inspected and meet the following requirements: During
the period June 5 through March 9 of each marketing year, and the
entire year for pearl and cipolline onions, whenever onions grown in
designated counties in Idaho and Malheur County, Oregon, are regulated
under Marketing Order No. 958, imported onions shall comply with the
grade, size, quality, and maturity requirements imposed under that
order.
* * * * *
Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2021-16495 Filed 8-4-21; 8:45 am]
BILLING CODE P