[Federal Register Volume 89, Number 102 (Friday, May 24, 2024)]
[Rules and Regulations]
[Pages 45751-45754]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-11452]



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 Rules and Regulations
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  Federal Register / Vol. 89, No. 102 / Friday, May 24, 2024 / Rules 
and Regulations  

[[Page 45751]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 958

[Doc. No. AMS-SC-23-0033]


Onions Grown in Certain Designated Counties in Idaho and Malheur 
County, Oregon; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This final rule implements a recommendation from the Idaho-
Eastern Oregon Onion Committee (Committee) to increase the assessment 
rate established for the 2023-2024 and subsequent fiscal periods. The 
assessment rate will remain in effect indefinitely unless modified, 
suspended, or terminated.

DATES: This rule is effective June 24, 2024.

FOR FURTHER INFORMATION CONTACT: Joshua Wilde, Marketing Specialist, or 
Barry Broadbent, Branch 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 No. 130 
and Marketing Order No. 958, both as amended (7 CFR part 958), 
regulating the handling of onions grown in certain counties in Idaho, 
and Malheur County, Oregon. Part 958 (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 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 Federal agencies to consider whether their rulemaking actions 
would have Tribal implications. 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, Idaho-Eastern Oregon 
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 Idaho-Eastern 
Oregon onions for the 2023-2024 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 U.S. Department 
of Agriculture (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 Idaho-Eastern Oregon 
onions handled under the Order from $0.05 per hundredweight, the rate 
that was established for the 2015-2016 and subsequent fiscal periods, 
to $0.07 per hundredweight for the 2023-2024 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. Committee members are familiar 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 2015-2016 and subsequent fiscal periods, the Committee 
recommended, and AMS approved, an assessment rate of $0.05 per 
hundredweight of Idaho-Eastern Oregon onions within the production 
area. 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 June 27, 2023, and recommended 2023-2024 
fiscal

[[Page 45752]]

period expenditures of $1,039,785 and an assessment rate of $0.07 per 
hundredweight of Idaho- Eastern Oregon onions handled for the 2023-2024 
and subsequent fiscal periods with a vote of 7 in favor and none 
opposed. In comparison, last fiscal period's budgeted expenditures were 
$819,435. The assessment rate of $0.07 per hundredweight is $0.02 
higher than the rate currently in effect. The Committee recommended 
increasing the assessment rate to fund operations more fully without 
relying on its financial reserve funds. The Committee has drawn down 
its financial reserve in recent years to cover expenses as unfavorable 
growing conditions have caused the volume of assessable onion shipments 
to fall well below what the Committee had expected. Therefore, actual 
assessment income collected for the 2021-2022 and 2022-2023 fiscal 
periods was significantly less than projected. The Committee is 
cautiously optimistic that conditions will improve, projecting handler 
shipments of 10,000,000 hundredweight of assessable Idaho-Eastern 
Oregon onions for the 2023-2024 fiscal period, which is the same as 
initially projected for the 2022-2023 fiscal period.
    The major expenditures budgeted by the Committee for the 2023-2024 
fiscal period include $190,000 for research; $175,000 for promotion; 
$21,000 for export initiatives; $118,529 in salary expenses; $55,270 
for travel/office expenses; $15,000 for marketing order contingency; 
and $6,000 for Committee expenses. By comparison, for the 2022-2023 
fiscal period, budgeted expenses for research, promotion, export 
initiatives, salaries, travel/office, and marketing order contingency 
were $263,061; $200,000; $126,000; $103,004; $96,370; $25,000; and 
$6,000, respectively. The Committee's 2023-2024 budget also includes a 
separate line-item expense of $458,986 for ``grant expenses'' which 
refers to other research and development projects funded with 
reimbursable Specialty Crop Block Grant Program funds. This category 
reflects the total grant amount awarded for approved research, 
promotion, and export activities. In previous budgets, these funds were 
allocated to the individual programs where those funds would be 
utilized (e.g., research, promotion, and export). However, the 
Committee felt that holding these expenditures as a separate expense 
category for the 2023-2024 fiscal period helped differentiate 
activities funded exclusively through assessment income from those 
funded through reimbursable grants. The Committee submits each project 
under the Specialty Crop Block Grant to the State of Idaho for 
evaluation and approval prior to reimbursement.
    The expected 10,000,000 hundredweight of Idaho-Eastern Oregon 
onions from the 2023-2024 crop will generate $700,000 in assessment 
revenue at the increased assessment rate (10,000,000 hundredweight of 
onions multiplied by $0.07 assessment rate). The 2023-2024 fiscal 
period assessment rate increase should ensure the Committee has 
sufficient revenue, along with an anticipated $458,986 in funds awarded 
through the Specialty Crop Block Grant Program and $23,850 in other 
income, to fully fund its recommended 2023-2024 fiscal period budgeted 
expenditures and begin replenishing the Committee's reserve funds to a 
level that the Committee believes is appropriate.
    The Committee derived the recommended assessment rate by 
considering anticipated fiscal period expenses and the estimated 2023 
crop volume of 10,000,000 hundredweight of assessable Idaho-Eastern 
Oregon onions. Income derived from handler assessments ($700,000), 
Specialty Crop Block Grants ($458,986), and other sources including 
interest income and voluntary contributions ($23,850), should be more 
than adequate to cover budgeted expenses ($1,039,785). The Committee 
projects a positive net difference between 2023-2024 fiscal period 
income and expenses of $143,051. This amount will help replenish the 
Committee's reserve fund from an estimated $230,351 on July 1, 2023, to 
an estimated $373,402 on July 1, 2024, a figure much more closely 
aligned with the Committee's preferred reserve balance of approximately 
half of one year's operational expenses.
    This new 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 2023-2024 fiscal period 
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 has 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 190 producers of Idaho-Eastern Oregon 
onions in the production area and 30 handlers subject to regulation 
under the Order. Small agricultural producers of onions are defined by 
the Small Business Administration (SBA) as those having annual receipts 
of equal to or less than $3,750,000 (Other Vegetable (except Potato) 
and Melon Farming, North American Industry Classification System 
(NAICS) code 111219), and small agricultural service firms are defined 
as those whose annual receipts are equal to or less than $34,000,000 
(Postharvest Crop Activities, NAICS code 115114)(13 CFR 121.201).
    According to the National Agricultural Statistics Service (NASS), 
the average annual producer price received for dry fresh market onions 
in Idaho, in 2021, the most recent year for which there is NASS data, 
was $21.10 per hundredweight. NASS did not provide fresh onion producer 
prices specific to Malheur County, Oregon, for 2021. Total production 
of Idaho-Eastern Oregon onions for the 2021 season was reported by the 
Committee to be 9,281,912 hundredweight. Using the average Idaho 
producer price from 2021, and applying it to the entire production 
area, the total 2021-2022 crop value of Idaho-Eastern Oregon onions 
could therefore be estimated to be $195,848,343 (9,281,912 
hundredweight times $21.10 per hundredweight). Dividing the crop value 
by the estimated number of producers (190) yields an estimated average 
receipt per producer of $1,030,780, which is well below the SBA 
threshold for small producers.

[[Page 45753]]

    In addition, according to AMS Market News data, the reported 
average free on board (FOB) price for onions from Idaho-Eastern Oregon 
over the 2021-2022 fiscal period was between $15.00 and $20.00 per 50-
pound carton, depending upon variety, size and grade, and shipping 
date. Assuming an average of $17.50 for the fiscal period and 
multiplying this figure by 2 (to adjust to hundredweight) yields an 
average FOB price of $35.00 per hundredweight for the 2021-2022 fiscal 
period. Multiplying the 2021-2022 Idaho-Eastern Oregon onion production 
of 9,281,912 hundredweight by the estimated average price per 
hundredweight of $35.00 equals $324,866,920. Dividing this figure by 
the 30 regulated handlers yields estimated average annual handler 
receipts of $10,828,897 ($324,866,920 divided by 30 handlers), which is 
below the SBA threshold for small agricultural service firms. 
Therefore, using the above data and assuming a normal distribution, 
most of the producers and handlers of Idaho-Eastern Oregon onions may 
be classified as small entities.
    This rule will increase the assessment rate collected from handlers 
for the 2023-2024 and subsequent fiscal periods from $0.05 to $0.07 per 
hundredweight of Idaho-Eastern Oregon onions. The Committee unanimously 
recommended 2023-2024 fiscal period expenditures of $1,039,785 and an 
assessment rate of $0.07 per hundredweight of Idaho-Eastern Oregon 
onions. The assessment rate of $0.07 is $0.02 higher than the current 
rate. The Committee expects the industry to handle 10,000,000 
hundredweight of Idaho-Eastern Oregon onions during the 2023-2024 
fiscal period. Thus, the $0.07 per hundredweight rate will provide 
$700,000 in assessment income (10,000,000 multiplied by $0.07). The 
Committee expects to use an anticipated $458,986 awarded from the 
Specialty Crop Block Grant Program to cover remaining expenses. Income 
derived from handler assessments, Specialty Crop Block Grant Program 
funds, and other sources including interest income and voluntary 
contributions, will be adequate to cover budgeted expenses.
    The major expenditures budgeted by the Committee for the 2023-2024 
fiscal period include $190,000 for research committee, $175,000 for 
promotion committee, $21,000 for export committee, $118,529 in salary 
expenses, $55,270 for travel/office expenses, $15,000 for marketing 
order contingency, and $6,000 in committee expenses. By comparison, for 
the 2022-2023 fiscal period, budgeted expenses for research, promotion, 
export initiatives, salaries, travel/office, and marketing order 
contingency were $263,061, $200,000, $126,000, $103,004, $96,370, 
$25,000, and $6,000, respectively.
    In recent years, the Committee has utilized reserve funds to 
partially fund its budgeted expenditures. The Committee recommended 
increasing the assessment rate to fully fund 2023-2024 fiscal period 
budgeted expenditures and replenish funds held in its reserve. This 
action will add an estimated $143,051 to the Committee's financial 
reserve fund. The reserve balance will be kept at a level that the 
Committee believes is appropriate and which is compliant with the 
provisions of the Order.
    Prior to arriving at this budget and assessment rate, the Committee 
discussed various alternatives, including maintaining the current 
assessment rate of $0.05 per hundredweight and increasing the 
assessment rate by different amounts. However, the Committee determined 
that the increased assessment rate would fully fund budgeted expenses 
and replenish reserves to appropriate levels. The assessment rate of 
$0.07 per hundredweight of Idaho-Eastern Oregon onions was derived by 
considering anticipated expenses, the projected volume of assessable 
Idaho-Eastern Oregon onions, grant funds awarded, the projected 
monetary balance held in reserve, and additional pertinent factors.
    A review of NASS information indicates that the average producer 
price for the 2021-2022 fiscal period was $21.10 per hundredweight of 
onions in the production area. The assessment rate of $0.07 per 
hundredweight is approximately three tenths of one percent of the 
average producer price ($0.07 divided by $21.10). Further, the 
Committee reported the quantity of assessable Idaho-Eastern Oregon 
onions harvested in the 2021-2022 fiscal period was 9,281,912 
hundredweight, which yields estimated total producer revenue of 
$195,848,343 ($21.10 per hundredweight multiplied by 9,281,912). 
Therefore, utilizing the assessment rate of $0.07 per hundredweight, 
assessment revenue for the 2021-2022 fiscal period, as a percentage of 
total producer revenue, will be approximately 0.33 percent of total 
producer revenue ($0.07 multiplied by 9,281,912 per hundredweight 
divided by $195,848,343 and multiplied by 100).
    This action will increase the assessment obligation imposed on 
Idaho-Eastern Oregon onion 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 Idaho-Eastern Oregon 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 June 27, 2023, 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 Idaho-Eastern Oregon 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 December 12, 2023 (88 FR 86066). Copies of the proposed 
rule were also mailed or sent via email to all onion handlers. A copy 
of the proposed rule was made available through the internet by AMS via 
https://www.regulations.gov. A 30-day comment period ending January 11, 
2024, was provided for interested persons to respond to the proposal. 
AMS received one comment opposed to the increased assessment rate on 
the basis that it would raise costs for onion producers, be unlikely to 
benefit

[[Page 45754]]

producers equally, and costs might be passed on to U.S. consumers. 
However, assessments are applied uniformly on all handlers and the 
assessment burden is proportional to the volume of assessable onions 
handled. Costs to both large and small producers are expected to be 
offset by benefits derived by the operation of the Order and include 
improved market conditions resulting from additional promotion and 
research focused on Idaho-Eastern Oregon onions. Because the assessment 
rate represents a small percentage of producer revenue (three tenths of 
one percent) and a very small percentage of the retail value of onions, 
it is highly unlikely to contribute to increased onion costs to 
consumers. Both small and large producers on the Committee expressed 
support for this proposal. Further, the increased rate is still below 
the $0.10 per hundredweight assessment rate that was in effect from 
2005-2015.
    While it is intended for the assessment rate to be effective for an 
indefinite period of time, 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. AMS 
would evaluate Committee recommendations and other available 
information to determine whether modification of the assessment rate is 
needed. Notice and comment rulemaking to adjust the assessment rate 
would be undertaken as necessary. Accordingly, AMS made no changes 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 958

    Marketing agreements, Onions, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, the Agricultural 
Marketing Service amends 7 CFR part 958 as follows:

PART 958--ONIONS GROWN IN CERTAIN DESIGNATED COUNTIES IN IDAHO, AND 
MALHEUR COUNTY, OREGON

0
1. The authority citation for part 958 continues to read as follows:

    Authority: 7 U.S.C. 601-674.


0
2. Revise Sec.  958.240 to read as follows:


Sec.  958.240  Assessment rate.

    On and after July 1, 2023, an assessment rate of $0.07 per 
hundredweight is established for Idaho-Eastern Oregon onions.

Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2024-11452 Filed 5-23-24; 8:45 am]
BILLING CODE P