[Federal Register Volume 59, Number 70 (Tuesday, April 12, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-8890]
Federal Register / Vol. 59, No. 70 / Tuesday, April 12, 1994 /
[[Page Unknown]]
[Federal Register: April 12, 1994]
VOL. 59, NO. 70
Tuesday, April 12, 1994
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 959
[FV-93-959-2FR]
Onions Grown in South Texas--Regulation of Red Onions and Change
in Regulatory Period
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: This final rule establishes requirements for red variety
onions grown in South Texas under Marketing Order 959. In recent years,
shipments of poor quality red onions have appeared in the marketplace
and have adversely affected grower prices. This rule will tend to
improve grower prices by providing more desirable quality red onions
for consumers. This rule also extends the termination date of the
order's regulatory period from May 20 to June 15 of each year. More
late season onions are being grown in a portion of the production area,
increasing the need for marketing order quality requirements over a
longer time period. Regulating onions from the production area through
June 15 will help make more desirable onions available to markets.
EFFECTIVE DATE: April 12, 1994.
FOR FURTHER INFORMATION CONTACT: Robert Matthews, Marketing Specialist,
Marketing Order Administration Branch, F&V, AMS, USDA, Room 2523-S,
P.O. Box 96456, Washington, DC, 20090-6456, telephone: (202) 690-0464;
or Belinda G. Garza, McAllen Marketing Field Office, Marketing Order
Administration Branch, F&V, AMS, USDA, 1313 E. Hackberry, McAllen,
Texas 78501; telephone: (210) 682-2833.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing
Agreement No. 143 and Marketing Order No. 959 (7 CFR Part 959), as
amended, regulating the handling of onions grown in South Texas,
hereinafter referred to as the ``order.'' This order is effective under
the Agricultural Marketing Agreement 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 12778, Civil
Justice Reform. This action 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
action.
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 in equity to review the
Secretary's ruling on the petition, provided a bill in equity is filed
not later than 20 days after date of the entry of the ruling.
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), the Administrator of the Agricultural Marketing Service
(AMS) has considered the economic impact of this action on small
entities.
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 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 38 handlers of South Texas onions who are subject to
regulation under the marketing order and 97 producers in the regulated
area. Small agricultural service firms, which includes handlers, have
been defined by the Small Business Administration (13 CFR 121.601) as
those having annual receipts of less than $3,500,000, and small
agricultural producers are defined as those having annual receipts of
less than $500,000. The majority of handlers and producers of South
Texas onions may be classified as small entities.
At its November 9, 1993, meeting, the South Texas Onion Committee
(committee) recommended, under the authority of Sec. 959.52(c) of the
order, that red varieties of onions be regulated and also that the
termination date of the regulatory period for all varieties of
regulated onions be extended from May 20 to June 15 of each year.
Red varieties of onions have been exempt from regulation since the
inception of Marketing Order No. 959. The quantities of such onions
produced have usually represented a small portion of the total annual
production in the marketing order's regulated area. However, red
variety acreage has increased significantly in recent seasons.
Moreover, the committee reports that poor quality red onions grown in
the production area have appeared in the marketplace from time to time.
The impact on the industry is two-fold. Poor quality red onions
diminish consumer confidence in the better quality red onions, leading
to fewer sales and lower returns to growers. In addition, a less
favorable consumer opinion of red variety onions often leads to lower
sales for all onions grown in the production area, including yellow and
white varieties which now enjoy an excellent reputation with receivers
and consumers.
Red onions, like yellow onions and white onions, are varieties of
Allium cepa, and are therefore covered by the same U.S. standards
referenced in Sec. 959.322(h). Because of this, the regulatory
requirements set forth in Sec. 959.322 applicable to yellow and white
varieties of onions are appropriate for red varieties also. The
committee believes that by regulating red onions in the same fashion as
yellow and white onions, consumers can be assured of buying better
quality red onions. Thus, increased consumer confidence should result
in improved returns to growers. In addition to grade and size
requirements, the committee also recommended that red varieties be
subject to the same pack, container, inspection, assessment, and
safeguard requirements as yellow and white varieties. In this way, red,
yellow, and white onions will be regulated to the same extent.
The second recommendation concerns the length of the regulatory
period for shipments of onions from the regulated area. Previously,
order regulations were in effect from March 1 through May 20 each year.
District 2 (Laredo-Winter Garden) is in the northern part of the
production area and has a shipping season that extends from May to well
into June. This district is comprised of the Counties of Zapata, Webb,
Jim Hogg, DeWitt, Wilson, Atascosa, Karnes, Val Verde, Frio, Kinney,
Uvalde, Medina, Maverick, Zavala, Dimmit and LaSalle. In the 1980's,
District 2 production was declining and industry members asked to be
relieved from the marketing order requirements after May 20 each
season, instead of the June 15 date in effect at that time. By May 20,
shipments from District No. 1 in the southern part of the production
area usually are finished. Thus, effective for the 1989 and subsequent
seasons, the termination date for the regulatory period was advanced
for the entire production area from June 15 to May 20 (54 FR 8519,
March 1, 1989).
However, committee records indicate an increase in onion shipments
from District 2 during the past three years. The committee members from
District 2 who attended the November meeting stated that shipments
during the May 20 through June 15 period should once again be regulated
so that funds could be assessed to fund the committee's production
research and market development efforts as well as assure the consumer
a quality pack of onions from their district. Shipments from this
district typically account for 10 to 12 percent of the production area
total, and the committee believes that grade, size, container, and
other order requirements are necessary to maintain the quality of South
Texas onions that receivers and consumers have become accustomed to.
Extension of the regulatory period will not affect District 1 handlers
as shipments from that district normally are completed by mid-May.
Currently, handlers may not package or load onions on Sunday during
the period March 1 through May 20 of each season. The committee
recommended not changing this requirement. After May 20, District 2
handlers compete with unregulated shipments from other areas such as
California. Permitting District 2 handlers to package and ship whenever
they can find buyers will help to reduce the competitive advantage of
handlers shipping from outside the regulated area.
Notice of this final rule was published in the March 9, 1994, issue
of the Federal Register (59 FR 11008). Interested persons were invited
to file written comments with respect to the proposal until March 24,
1994. Ten comments were received. One was from Mr. Greg Nelson, of the
Cargil Produce Company, Uvalde, Texas, which is located in District 2.
Mr. Nelson opposed the extension of the regulatory period. He stated
that non-regulated areas such as California, the Vidalia area of
Georgia, New Mexico, Arizona, and the Trans-Pecos area of Texas ship
large quantities of new crop onions. These onions compete with
regulated onions from District 2 (Laredo-Winter Garden). Mr. Nelson
stated that the other shipping areas, being unregulated, have a
significant competitive advantage over District 2 growers and handlers
because those onions do not have to meet grade requirements and the
handlers do not have to pay inspection costs.
Six other comments also opposed the proposed extension of the
regulation period. These comments were received from Mr. Kenneth
Spence, Mr. Robert Willoughby, and Mr. Lee Toombs, all of Batesville;
and from Mr. C.W. Cargil, Mr. Steve Cargil, and Mr. Steve Rambie, from
Uvalde, Texas. All stated that regulating District 2 onions after May
20 would cause a hardship on District 2 growers by giving non-regulated
producing areas a competitive advantage.
At the November 9, 1993, meeting during which this change in
regulatory period was recommended, 11 members were present; the full
committee is composed of 17 members. The committee unanimously
recommended this action, including two members from District 2. For
District 1, one position was not represented by either a member or
alternate; for District 2, two members out of seven were in attendance.
None of the opponents were in attendance.
Although District 2 producers and handlers usually face competition
from non-regulated areas during much of their shipping season, it is
important that handling requirements apply to shipments from that
district to protect the good quality image enjoyed by South Texas
onions in the marketplace and promoted by the committee's market
development program. In the absence of quality and inspection
requirements, low quality onions from District 2 could be shipped. Such
shipments could negatively effect the South Texas industry's market
development efforts and quality image. Also, in the interest of equity
and uniform regulation application, it is desirable that handlers from
District 2 pay assessments in support of these activities. Assessments
paid have helped to provide an on-going production research program
that has benefitted the entire industry with the development of new
onion varieties and new cultural techniques, as well as an effective
market development program that helps increase sales. Therefore, these
comments are denied.
The three remaining comments were from the South Texas Onion
committee, Mr. John R. Bearden, and Mr. B. L. Lackey. These comments
stated that if the rule is not adopted by April 1, the anticipated
beginning of the red onion harvesting and shipping season, poor quality
red onions will be dumped on the market, thereby diminishing consumer
confidence and depressing the market for South Texas onions. After
evaluating the comments, the Department has decided to implement the
committee's recommendation as proposed, and make the final rule
effective upon publication in the Federal Register.
Based on available information, the Administrator of the AMS has
determined that this action will not have a significant economic impact
on a substantial number of small entities.
Section 8(e) of the Act requires that whenever grade, size, quality
or maturity requirements are in effect for onions under a domestic
marketing order, imported onions must meet the same or comparable
requirements, subject to concurrence by the United States Trade
Representative. Because this rule establishes grade, size, quality and
maturity requirements on red onions and changes the regulatory period
under the South Texas onion marketing order, corresponding changes are
needed in the onion import regulation. Such changes have been addressed
in a separate onion import rule.
The information collection requirements contained in the referenced
sections have been previously approved by the Office of Management and
Budget (OMB) under the provisions of 44 U.S.C. chapter 35 and have been
assigned OMB number 0581-0074.
After consideration of all relevant material presented, including
the proposal submitted by the committee, comments received, and other
information, it is hereby found that this regulation, as hereinafter
set forth, will tend to effectuate the declared policy of the Act. It
is further found that good cause exists for not postponing the
effective date of this section until 30 days after publication in the
Federal Register because (1) the shipping season for onions has already
begun and for maximum effectiveness this rule should apply to as many
shipments as possible; (2) the proposed rule was discussed at an open
public meeting, and all interested persons had an opportunity to voice
concerns; and (3) there are no special preparations required of the
handler that cannot be completed by the effective date.
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 hereby
amended as follows:
1. The authority citation for 7 CFR part 959 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
PART 959--ONIONS GROWN IN SOUTH TEXAS
2. In Sec. 959.322, the introductory paragraph is revised to read
as follows:
Sec. 959.322 Handling regulation.
During the period beginning March 1 and ending June 15, no handler
shall handle any onions unless they comply with paragraphs (a) through
(d) or (e) or (f) of this section. In addition, no handler may package
or load onions on Sunday during the period March 1 through May 20.
* * * * *
Dated: April 8, 1994.
Robert C. Keeney,
Deputy Director, Fruit and Vegetable Division.
[FR Doc. 94-8890 Filed 4-11-94; 8:45 am]
BILLING CODE 3410-02-P
