[Federal Register Volume 88, Number 194 (Tuesday, October 10, 2023)]
[Rules and Regulations]
[Pages 69876-69879]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-22331]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 956

[Doc. No. AMS-SC-23-0006]


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 implements a recommendation from the Walla Walla 
Sweet Onion Marketing Committee (Committee) to increase the assessment 
rate established for the 2023 and subsequent fiscal periods. The 
assessment rate will remain in effect indefinitely unless modified, 
suspended, or terminated.

DATES: Effective November 9, 2023.

FOR FURTHER INFORMATION CONTACT: Dale Novotny, Marketing Specialist, or 
Gary Olson, Chief, West Region Branch, Market Development Division, 
Specialty Crops Program, AMS, USDA; Telephone: (503) 326-2724, or 
Email: [email protected] or [email protected].
    Small businesses may request information on complying with this 
regulation by contacting Richard Lower, Market Development Division, 
Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP 
0237, Washington, DC 20250-0237; Telephone: (202) 720-8085, or Email: 
[email protected].

SUPPLEMENTARY INFORMATION: This action, pursuant to 5 U.S.C. 553, 
amends regulations issued to carry out a marketing order as defined in 
7 CFR 900.2(j). This rule is issued under Marketing Agreement and Order 
No. 956, both as amended (7 CFR part 956), regulating the handling of 
sweet onions grown in the Walla Walla Valley of southeast Washington 
and northeast Oregon. Part 956 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 
Committee locally administers the Order and is comprised of producers 
and handlers of Walla Walla sweet onions operating within the area of 
production, and a public member.
    The Agricultural Marketing Service (AMS) is issuing this rule in 
conformance with Executive Orders 12866, 13563, and 14094. 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. Executive Order 14094 
reaffirms, supplements, and updates Executive Order 12866 and further 
directs agencies to solicit and consider input from a wide range of 
affected and interested parties through a variety of means. This action 
falls within a category of regulatory actions that the Office of 
Management and Budget (OMB) exempted from Executive Order 12866 review.
    This 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.

[[Page 69877]]

AMS has determined that this 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 rule has been reviewed under Executive Order 12988--Civil 
Justice Reform. Under the 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 
will be applicable to all assessable Walla Walla sweet onions for the 
2023 fiscal period, and continue until amended, suspended, or 
terminated.
    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 the 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 for Walla Walla sweet 
onions handled under the Order from $0.15 per 50-pound bag or 
equivalent, the rate that was established for the 2020 and subsequent 
fiscal periods, to $0.20 per 50-pound bag or equivalent for the 2023 
and subsequent fiscal periods.
    The Order authorizes the Committee, with the approval of AMS, to 
formulate an annual budget of expenses and collect assessments from 
handlers to administer the program. The members of the Committee are 
familiar with the Committee's needs and with the costs of goods and 
services in their local area and are able to formulate an appropriate 
budget and assessment rate. The assessment rate is formulated and 
discussed in a public meeting, and all directly affected persons have 
an opportunity to participate and provide input.
    For the 2020 and subsequent fiscal periods, the Committee 
recommended, and AMS approved, an assessment rate of $0.15 per 50-pound 
bag or equivalent of Walla Walla sweet onions. That rate continues in 
effect from fiscal period to fiscal period until modified, suspended, 
or terminated by AMS upon recommendation and information submitted by 
the Committee or other information available to AMS.
    The Committee met on December 5, 2022, and unanimously recommended 
2023 fiscal period expenditures of $70,400 and an assessment rate of 
$0.20 per 50-pound bag or equivalent of Walla Walla sweet onions 
handled for the 2023 and subsequent fiscal periods. In comparison, last 
year's budgeted expenditures were $85,270. The proposed assessment rate 
of $0.20 per 50-pound bag or equivalent is $0.05 higher than the rate 
currently in effect. The Committee recommended increasing the 
assessment rate to better fund operations using assessment revenue and 
reduce the reliance on reserve funds. The Committee has drawn down its 
financial reserve in recent years to cover Committee expenses and to 
reduce the reserve to not exceed approximately two fiscal periods' 
budgeted expenses, in conformance with the Order (7 CFR 956.44(a)). The 
Committee projects handler receipts of 262,500 50-pound bags or 
equivalent of assessable Walla Walla sweet onions for the 2023 fiscal 
period, which is 16,150 50-pound bags or equivalent more than was 
projected for the 2022 fiscal period.
    The major expenditures budgeted by the Committee for the 2023 
fiscal period include $43,400 for administrative expenses, $17,000 for 
promotions, $5,000 for research, and $5,000 for Committee travel. 
Budgeted expenditures for the 2022 fiscal period were $43,400, $31,870, 
$5,000, and $4,000, respectively.
    Walla Walla sweet onions harvested in 2023 will be marketed mostly 
in the spring and summer of the 2023 fiscal period, which follows the 
calendar year. The expected 262,500 50-pound bags or equivalent of 
Walla Walla sweet onions from the 2023 crop will generate $52,500 in 
assessment revenue at the increased assessment rate (262,500 50-pound 
bags or equivalent of Walla Walla sweet onions multiplied by $0.20 
assessment rate). The remaining $17,900 needed to cover budgeted 
expenditures will come from reserve funds carried over from previous 
fiscal periods. The 2023 fiscal period assessment rate increase will be 
appropriate to ensure the Committee has sufficient revenue, along with 
its reserve, to fully fund its 2023 fiscal period budgeted expenditures 
and maintain a level of reserve funds that the Committee believes is 
appropriate.
    The Committee derived the recommended assessment rate by 
considering anticipated fiscal period expenses, an estimated 2023 crop 
volume of 262,500 50-pound bags or equivalent of assessable Walla Walla 
sweet onions, and the amount of funds available in the authorized 
reserve. Income derived from handler assessments ($52,500) and funds 
from the Committee's authorized reserve ($17,900) will be adequate to 
cover budgeted expenses ($70,400).
    The assessment rate will continue in effect indefinitely unless 
modified, suspended, or terminated by AMS 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 AMS. 
Committee meetings are open to the public and interested persons may 
express their views at these meetings. AMS would evaluate Committee 
recommendations and other available information to determine whether 
modification of the assessment rate is needed. Further rulemaking would 
be undertaken, as necessary. The Committee's 2023 budget, and those for 
subsequent fiscal periods, will be reviewed and, as appropriate, 
approved by AMS.

Final Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), AMS has considered the economic impact of 
this rule on small entities. Accordingly, AMS prepared this final 
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 15 producers of Walla Walla sweet onions in 
the production area and 11 handlers subject to regulation under the 
Order. Small agricultural producers of Walla Walla sweet onions are 
defined by the Small

[[Page 69878]]

Business Administration (SBA) as those having annual receipts of less 
than $3,750,000, and small agricultural service firms are defined as 
those whose annual receipts are less than $34,000,000 (13 CFR 121.201).
    According to the National Agricultural Statistics Service (NASS), 
the average annual producer price received for dry and fresh market 
onions sold in Washington between 2018 and 2021 ranged from $9.13 to 
$13.30 per hundredweight. The average over those years was 
approximately $10.88 per hundredweight, or $5.44 per 50-pound bag or 
equivalent. Total production of Walla Walla sweet onions for the 2022 
season was reported by the Committee to be 299,993 50-pound bags or 
equivalent. Using the average price from 2018-2021, the most recent 
years for which there is NASS data, the total 2022 crop value of Walla 
Walla sweet onions could therefore be estimated to be $1,631,962 
(299,993 50-pound bags or equivalent multiplied by $5.44 per 50-
pounds). Dividing the crop value by the estimated number of producers 
(15) yields an estimated average receipt per producer of $108,797, 
which is well below the SBA threshold for small producers.
    In addition, according to USDA Market News data, the reported 
average 2021 terminal market price for Walla Walla sweet onions was $35 
per 40-pound carton. Multiplying this figure by 1.25 to adjust for a 
50-pound bag or equivalent yields an average 2021 terminal market price 
of $43.75 per 50-pound bag or equivalent. Multiplying the 2022 Walla 
Walla sweet onion production of 299,993 50-pound bags or equivalent by 
the estimated average price per 50-pound bag or equivalent of $43.75 
equals $13,124,694. Dividing this figure by the 11 regulated handlers 
yields estimated average annual handler receipts of $1,193,154 
($13,124,694 divided by 11 handlers), which is below the SBA threshold 
for small agricultural service firms. Therefore, using the above data, 
all of the producers and handlers of Walla Walla sweet onions may be 
classified as small entities.
    This final rule increases the assessment rate collected from 
handlers for the 2023 and subsequent fiscal periods from $0.15 to $0.20 
per 50-pound bag or equivalent of Walla Walla sweet onions. The 
Committee unanimously recommended 2023 fiscal period expenditures of 
$70,400 and an assessment rate of $0.20 per 50-pound bag or equivalent 
of Walla Walla sweet onions. The assessment rate of $0.20 is $.05 
higher than the current rate. The Committee expects the industry to 
handle 262,500 50-pound bags or equivalent of Walla Walla sweet onions 
during the 2023 fiscal period. Thus, the $0.20 per 50-pound bag or 
equivalent rate will provide $52,500 in assessment income (262,500 50-
pound bags or equivalent multiplied by $0.20). The Committee also 
expects to use $17,900 from its financial reserve to cover remaining 
expenses. Income derived from handler assessments, along with reserve 
funds, will be adequate to meet budgeted expenditures for the 2023 
fiscal period.
    The major expenditures budgeted by the Committee for the 2023 
fiscal period include $43,400 for administrative expenses, $17,000 for 
promotions, $5,000 for research, and $5,000 for Committee travel. 
Budgeted expenditures for the 2022 fiscal period were $43,400, $31,870, 
$5,000 and $4,000, respectively.
    In recent years, the Committee has utilized reserve funds to 
partially fund its budgeted expenditures. The Committee recommended 
increasing the assessment rate to better fund 2023 fiscal period 
budgeted expenditures and refrain from excessively drawing down the 
funds held in its reserve. This action will maintain the Committee's 
reserve balance at a level that the Committee believes is appropriate 
and is compliant with the provisions of the Order.
    Prior to arriving at this budget and the current assessment rate, 
the Committee discussed various alternatives, including maintaining the 
current assessment rate of $0.15 per 50-pound bag or equivalent and 
increasing the assessment rate by different amounts. The Committee 
determined that the recommended increased assessment rate will be able 
to fund most of the budgeted expenses and avoid drawing down reserves 
at an unsustainable rate. The assessment rate of $0.20 per 50-pound bag 
or equivalent of Walla Walla sweet onions was derived by considering 
anticipated expenses, the projected volume of assessable Walla Walla 
sweet onions, the projected monetary balance held in reserve, and 
additional pertinent factors.
    A review of NASS information indicates that the average producer 
price for the 2018-21 fiscal period was $5.44 per 50-pound bag or 
equivalent. Further, the Committee reported the quantity of assessable 
Walla Walla sweet onions harvested in the 2022 fiscal period was 
299,993 50-pound bags or equivalent, which yields estimated total 
producer revenue for 2022 of $1,631,962 ($5.44 per 50-pound bag or 
equivalent multiplied by 299,993). Therefore, utilizing the assessment 
rate of $0.20 per 50-pound bag or equivalent, assessment revenue for 
the 2022 fiscal period, as a percentage of total producer revenue, will 
be approximately 3.68 percent ($0.20 multiplied by 299,993 per 50-pound 
bags or equivalent divided by $1,631,962 and multiplied by 100).
    This action increases 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, these costs are 
expected to be offset by the benefits derived by the operation of the 
Order.
    The Committee's meetings are widely publicized throughout the 
production area. The Walla Walla sweet onion industry and all 
interested persons are invited to attend the meetings and participate 
in Committee deliberations on all issues. Like all Committee meetings, 
the December 5, 2022, meeting was a public meeting and all entities, 
both large and small, were able to express views on this issue. 
Finally, interested persons were invited to submit comments on this 
rule, including the regulatory and information collection impacts of 
this action on small businesses.
    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. No changes in those requirements will be necessary 
as a result of this rule. Should any changes become necessary, they 
would be submitted to OMB for approval.
    This rule will not impose any 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.
    AMS has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this rule.
    A proposed rule concerning this action was published in the Federal 
Register on June 16, 2023 (88 FR 39377). Copies of the proposed rule 
were also mailed or sent via email to all Walla Walla sweet onion 
handlers. A copy of the proposed rule was made available through the 
internet by AMS via https://

[[Page 69879]]

www.regulations.gov. A 30-day comment period ending July 17, 2023, was 
provided for interested persons to respond to the proposal. No comments 
were received. Accordingly, no changes have been made to the rule as 
proposed.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: 
https://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.
    After consideration of all relevant material presented, including 
the information and recommendations submitted by the Committee and 
other available information, AMS has determined that this rule tends to 
effectuate the declared policy of the Act.

List of Subjects in 7 CFR Part 956

    Marketing agreements, Onions, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, the Agricultural 
Marketing Service amends 7 CFR part 956 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. Revise Sec.  956.202 to read as follows:


Sec.  956.202  Assessment rate.

    On and after January 1, 2023, an assessment rate of $0.20 per 50-
pound bag or equivalent is established for Walla Walla sweet onions.

Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2023-22331 Filed 10-6-23; 8:45 am]
BILLING CODE P