[Federal Register Volume 63, Number 36 (Tuesday, February 24, 1998)]
[Rules and Regulations]
[Pages 9128-9131]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-4596]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 959
[Docket No. FV98-959-2 IFR]
Onions Grown in South Texas; Removal of Sunday Packing and
Loading Prohibitions
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim final rule with request for comments.
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SUMMARY: This rule changes the handling regulation under the South
Texas onion marketing order by removing the Sunday packing and loading
prohibitions. The marketing order regulates the handling of onions
grown in South Texas and is administered locally by the South Texas
Onion Committee (Committee). This rule will allow the South Texas onion
industry to compete more effectively with other growing areas, better
meet buyer needs, and increase supplies of South Texas onions in the
marketplace.
DATES: Effective February 25, 1998; comments received by April 27,
1998, will be considered prior to issuance of a final rule.
ADDRESSES: Interested persons are invited to submit written comments
concerning this rule. Comments must be sent in triplicate to the Docket
Clerk, Fruit and Vegetable Programs, AMS, USDA, room 2525-S, PO Box
96456, Washington, DC 20090-6456; Fax: (202) 205-6632. All comments
should reference the docket number and the date and page number of this
issue of the Federal Register and will be made available for public
inspection in the Office of the Docket Clerk during regular business
hours.
FOR FURTHER INFORMATION CONTACT: Belinda G. Garza, McAllen Marketing
Field Office, Marketing Order Administration Branch, F&V, AMS, USDA,
1313 E. Hackberry, McAllen, TX 78501; telephone: (956) 682-2833, Fax:
(956) 682-5942; or George Kelhart, Technical Advisor, Marketing Order
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, room
2525-S, PO Box 96456, Washington, DC 20090-6456; telephone: (202) 720-
2491, Fax: (202) 205-6632. Small businesses may request information on
compliance with this regulation by contacting Jay Guerber, Marketing
Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA,
room 2525-S, PO Box 96456, Washington, DC 20090-6456; telephone: (202)
720-2491, Fax: (202) 205-6632.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing
Agreement No. 143 and Order No. 959, both as amended (7 CFR part 959),
regulating the handling of onions grown in South Texas, hereinafter
referred to as the ``order.'' The marketing agreement and order are
effective under the Agricultural Marketing Agreement Act of 1937, as
amended (7 U.S.C. 601-674), hereinafter referred to as the ``Act.''
The Department of Agriculture (Department) is issuing this rule in
conformance with Executive Order 12866.
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. This rule is not intended to have retroactive effect.
This rule will not preempt any State or local laws, regulations, or
policies, unless they present an irreconcilable conflict with this
rule.
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 Secretary 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. A handler is afforded the opportunity for a hearing on the
petition. After the hearing the Secretary 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 the Secretary's
ruling on the petition, provided an action is filed not later than 20
days after date of the entry of the ruling.
This rule changes the handling regulation under the South Texas
onion marketing order by removing the
[[Page 9129]]
Sunday packaging and loading prohibitions. It also modifies
Sec. 959.322(f)(5) by removing all references to the Sunday packaging
and loading prohibitions. This rule will provide handlers with greater
flexibility and additional time to prepare onions for market.
Section 959.322 of the order currently prohibits the packaging or
loading of onions on Sunday during the period March 1 through May 20 of
each season. This prohibition has been in place for 35 years to foster
orderly marketing conditions. Handlers were permitted to move onions
that were already inspected and billed, but were not prevented from
harvesting onions or taking them to the packing shed for storage or to
the dryers. The onions, however, could not be packaged or loaded on
Sunday during that time period.
At a Committee meeting on November 6, 1997, producers and handlers
expressed the view that the Sunday holiday had outlived its usefulness.
In recent seasons, the Sunday packaging and loading prohibition has
hindered the movement of South Texas onions by not allowing producers
and handlers to harvest and pack each day of the week. Last year, the
South Texas area received record amounts of rainfall and producers had
difficulty harvesting their onions. The packaging and loading
restriction prevented handlers from packaging or loading onions, even
when it was dry by Sunday. These heavy periods of rain disrupted the
normal pattern of harvesting, packing, and loading.
Due to these severe conditions last season, the Committee
unanimously recommended relief from the Sunday packing and loading
restriction in April through May 20 of the onion season. The
restriction was removed and handlers had the flexibility to package and
load onions on Sunday, which helped them to salvage some of their crop.
According to the Committee's pre-season estimate, five million fifty-
pound bags were expected to be harvested last season. However, due to
the inclement weather, only 2.78 million fifty-pound bags were shipped.
At its November 6, 1997, meeting, the Committee unanimously
recommended revising the current handling regulation to remove the
restriction on packaging and loading onions on Sundays. This action
will allow the South Texas onion industry to compete more effectively
with other growing areas, better meet buyer needs, and increase
supplies of South Texas onions in the marketplace.
Continuing to prohibit the packaging and loading of onions on
Sunday could prevent the South Texas onion industry from marketing more
of their onions. Producers object to the Sunday restriction because if
the shed is full of onions they are prevented from sending more onions
to the sheds. By removing the Sunday restriction, handlers could
continue to package and load onions on Sunday and salvage the
producers' crops if there were a threat of adverse weather conditions.
The Committee noted that competing areas pack and load on Sundays,
and the restrictive Sunday holiday has prevented the South Texas onion
industry from competing effectively with other areas that do not
restrict packing or loading on Sundays. The South Texas onion industry
wants the same opportunity. Continuing to prohibit the packing and
loading of onions on Sunday would present an unreasonable and
unnecessary hardship on handlers in the production area. If the
prohibitions continue, the Committee believes that Texas markets will
be taken by competing areas, and that the Texas onion industry will not
be able to meet their buyers' needs.
The Committee's recommendation is expected to improve producers'
and handlers' returns by allowing them to package and load onions on
Sunday if their operations were curtailed for some reason earlier
during the week. There have been times when handlers have been packing
onions on Saturday night, and at 12:01 a.m. had to stop even though the
packing had not been completed. This restriction is unacceptable to the
South Texas onion industry. The producers and handlers need the
flexibility to pack and ship each day of the week to effectively meet
their competition.
This action will allow handlers to package and load onions on
Sunday and permit producers to harvest and deliver their onions to
packing sheds each day of the week. This will provide producers and
handlers more flexibility in meeting buyer needs and additional time
for preparing onions for market.
Removing the Sunday packing and loading prohibitions also requires
that all references to the Sunday restrictions be removed from
Sec. 959.322(f)(5). Currently, the prohibition against packing or
loading onions on Sunday may be modified or suspended to permit the
handling of onions for export provided that such handling complies with
safeguard procedures. In addition, whenever the handler grades,
packages, and ships onions for export on any Sunday, such handler is
required to cease all grading, packaging, and shipping on the first
weekday following shipment for the same length of time as the handler
operated on Sunday. The Committee recommended the removal of such
references. Thus, Sec. 959.322(f)(5) is revised to remove all
references to the Sunday prohibition.
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), the Agricultural Marketing Service (AMS) has considered the
economic impact of this action 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
business subject to such actions in order that small businesses will
not be unduly or disproportionately burdened. Marketing orders issued
pursuant to the Act, and the rules issued thereunder, are unique in
that they are brought about through group action of essentially small
entities acting on their own behalf. Thus, both statutes have small
entity orientation and compatibility.
There are approximately 38 handlers of South Texas onions who are
subject to regulation under the order and approximately 70 onion
producers in the regulated area. Small agricultural service firms have
been defined by the Small Business Administration (SBA) (13 CFR
121.601) as those having annual receipts of less than $5,000,000, and
small agricultural producers are defined as those having annual
receipts of less than $500,000.
Most of the handlers are vertically integrated corporations
involved in producing, shipping, and marketing onions. For the 1996-97
marketing year, onions produced on 12,175 acres were shipped by the
industry's 38 handlers; with the average acreage and median acreage
handled being 310 acres and 177 acres, respectively. In terms of
production value, total revenues from the 38 handlers were estimated to
be $23.6 million; with average and median revenue being $620,000 and
$146,000, respectively. The industry is highly concentrated as the
largest 8 handlers (largest 25 percent) controlled 62 percent of the
acreage and 77 percent of onion production.
The South Texas onion industry is characterized by producers and
handlers whose farming operations generally involve more than one
commodity, and whose income from farming operations is not exclusively
dependent on the production of onions. Alternative crops provide an
opportunity to utilize many of the same facilities and equipment not in
use when the onion production season is complete. For this reason,
typical onion producers and handlers either produce multiple crops or
alternate crops within a single year.
[[Page 9130]]
Based on the SBA's definition of small entities, the Committee
estimates that all the 38 handlers regulated by the order would be
considered small entities if only their spring onion revenues are
considered. However, revenues from other productive enterprises would
likely push a large number of these handlers above the $5,000,000
annual receipt threshold. All of the 70 producers may be classified as
small entities based on the SBA definition if only their revenue from
spring onions is considered. When revenue from all sources is
considered, a majority of the producers would be considered small
entities because many of the producers would exceed the $500,000
figure.
This rule would relieve the Sunday ban on packing and loading
onions from South Texas allowing individual firms the flexibility to
modify operations to effectively compete with production areas not
bound by such restrictions, to fill customer orders, and to take
advantage of available transportation.
The Committee recommended this rule change for the purpose of
ensuring a timely flow of available supplies, and thus help to maintain
stability in the onion market. Being reasonably assured of a stable
price and market provides South Texas onion producers and handlers with
added flexibility to maintain proper cash flow and to meet annual
expenses. The market and price stability provided by the order
potentially benefits the smaller handlers more than such provisions
benefit large handlers. Smaller producers and handlers are more
dependent upon stable prices. Larger handlers are more diversified and
not as dependent upon price stability. Therefore, the relief of packing
and loading restrictions on Sundays has small entity orientation.
While the level of benefits of removing the Sunday packing and
loading prohibitions are difficult to quantify, this action is expected
to allow the South Texas onion industry to compete more effectively
with other growing areas, better meet buyer needs, and increase
supplies of South Texas onions in the marketplace. Last season, the
South Texas onion industry expected to ship 5 million 50-pound bags of
onions with a production value of $45.6 million. However, inclement
weather during a substantial part of the shipping season limited
shipments. Late in the season, the packing and loading restrictions
were removed to help producers and handlers salvage their crops.
Industry shipments totaled 2.8 million bags with a production value of
$25.4 million. The suspension for last season provided producers and
handlers more flexibility in meeting the needs of their buyers.
The Committee believes that providing handlers the ability to pack
and load on Sundays will benefit the industry. Removal of the
prohibitions will provide producers with an additional window of
opportunity to harvest and deliver their onions to handlers for
sorting, grading, packaging, and loading. Moreover, the continued use
of this self-imposed restriction could cause the South Texas area to
lose its markets to other competing areas, because these areas can
package and load onions on Sunday. Removing the Sunday packaging and
loading prohibitions will positively impact both small and large
handlers by helping them maintain markets.
This action is expected to improve producers' and handlers' returns
by allowing them to package and load onions on Sunday if their
operations were curtailed for some reason earlier in the week. The
ability to pack and load on Sunday will help the handlers fill
unexpected rush orders made at the end of the normal packing week.
There have been times when handlers were packing onions on Saturday
night, and at 12:01 a.m. had to stop even though the packing had not
yet been completed. This hindered handler operations and unduly delayed
the packing and shipping of onions to meet buyer needs.
The Committee considered not removing the Sunday packing and
loading prohibitions. However, not relaxing the regulation could result
in significant crop losses as occurred last season prior to the
emergency suspension of the prohibitions. Also, the cessation in
harvesting activity last season resulted in increased unemployment
among onion field workers and employees at handlers' facilities. In
addition, reduced supplies could result in consumers paying higher
prices for onions. The opportunity to pack and load onions seven days a
week will give producers and handlers more time to harvest and prepare
onions for market. This increased flexibility will enable the industry
to better meet buyer needs and to compete more effectively with its
competition.
This rule will not impose any additional reporting or recordkeeping
requirements on either small or large South Texas onion handlers. As
with all Federal marketing order programs, reports and forms are
periodically reviewed to reduce information requirements and
duplication by industry and public sectors. In addition, the Department
has not identified any relevant Federal rules that duplicate, overlap
or conflict with this rule.
Further, the Committee's meeting was widely publicized throughout
the South Texas onion industry and all interested persons were invited
to attend the meeting and participate in Committee deliberations. Like
all Committee meetings, the November 6, 1997, meeting was a public
meeting and all entities, both large and small, were able to express
their views on this issue. Finally, interested persons are invited to
submit information on the regulatory and informational impacts of this
action on small businesses.
After consideration of all relevant material presented, including
the information and recommendation by the Committee and other available
information, it is hereby found that this interim final rule, as
hereinafter set forth, will tend to effectuate the declared policy of
the Act.
This rule invites comments on a change to the handling regulation
currently prescribed under the South Texas onion marketing order. Any
comments received will be considered prior to finalization of this
rule.
Pursuant to 5 U.S.C. 553, it is also found and determined upon good
cause that it is impracticable, unnecessary, and contrary to the public
interest to give preliminary notice prior to putting this rule into
effect and that good cause exists for not postponing the effective date
of this rule until 30 days after publication in the Federal Register
because: (1) This rule relaxes requirements in the handling
regulations; (2) this action must be taken promptly to be in place by
March 1, the start of the South Texas onion regulatory period; (3) the
Committee unanimously recommended these changes at a public meeting and
interested parties had an opportunity to provide input; and (4) this
rule provides a 60-day comment period and any comments received will be
considered prior to finalization of this rule.
List of Subjects in 7 CFR Part 959
Marketing agreements, Onions, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, 7 CFR part 959 is
amended as follows:
PART 959--ONIONS GROWN IN SOUTH TEXAS
1. The authority citation for 7 CFR part 959 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. In Sec. 959.322, the introductory paragraph is amended by
removing the last sentence and paragraph (f)(5) is revised to read as
follows:
[[Page 9131]]
Sec. 959.322 Handling regulation.
* * * * *
(f) * * *
(5) Export shipments. Export shipments shall be exempt from all
container requirements of this section.
* * * * *
Dated: February 17, 1998.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-4596 Filed 2-23-98; 8:45 am]
BILLING CODE 3410-02-P
