[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
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 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.
 
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 

  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.

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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