[Federal Register Volume 62, Number 71 (Monday, April 14, 1997)]
[Rules and Regulations]
[Pages 18023-18026]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-9479]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 956
[FV96-956-3 FR]
Sweet Onions Grown in the Walla Walla Valley of Southeast
Washington and Northeast Oregon; Establishment of Container Marking
Requirements and Special Purpose Shipment Exemptions
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: This final rule (1) establishes container marking requirements
for all shipments of Walla Walla Sweet Onions, and (2) establishes
exemptions from assessment and container marking requirements for
certain special purpose shipments of Walla Walla Sweet Onions. This
rule will contribute to the efficient marketing of Walla Walla Sweet
Onions and assist in program compliance. This rule was recommended by
the Walla Walla Sweet Onion Committee (Committee), the agency
responsible for the local administration of the marketing order for
sweet onions grown in the Walla Walla Valley.
EFFECTIVE DATE: This final rule becomes effective April 15, 1997.
FOR FURTHER INFORMATION CONTACT: Robert J. Curry, Northwest Marketing
Field Office, Marketing Order Administration Branch, Fruit and
Vegetable Division, AMS, USDA, 1220 SW Third Avenue, room 369,
Portland, Oregon 97204-2807; telephone: (503) 326-2043; or George J.
Kelhart, Marketing Order Administration Branch, Fruit and Vegetable
Division, AMS, USDA, P.O. Box 96456, room
[[Page 18024]]
2525-S, Washington, DC 20090-6456; telephone: (202) 690-3919. Small
businesses may request information on compliance with this regulation
by contacting: Jay Guerber, Marketing Order Administration Branch,
Fruit and Vegetable Division, AMS, USDA, P.O. Box 96456, room 2525-S,
Washington, DC 20090-6456; telephone (202) 720-2491; Fax (202) 720-
5698.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing
Agreement and Order No. 956 (7 CFR Part 956), regulating the handling
of sweet onions grown in the Walla Walla Valley of southeast Washington
and northeast Oregon, hereinafter referred to as the ``order.'' This
order is authorized by 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 final rule has been reviewed under Executive Order 12988,
Civil Justice Reform. It 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 the 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.
The Committee meets regularly throughout each season to consider
recommendations for implementation, modification, suspension, or
termination of the regulatory requirements for Walla Walla Sweet
Onions. Committee meetings are open to the public and interested
persons may express their views at these meetings. The Department
reviews Committee recommendations in conjunction with information
submitted by the Committee and from other industry and government
sources.
This final rule (1) establishes container marking requirements for
all shipments of Walla Walla Sweet Onions, and (2) establishes
exemptions from assessment and container marking requirements for
certain special purpose shipments of Walla Walla Sweet Onions. This
rule will contribute to the efficient marketing of Walla Walla Sweet
Onions and assist in program compliance, and was recommended by the
Committee.
The Committee met twice to recommend adding container marking
requirements and exemption for special purpose shipments to the
marketing order's Subpart--Rules and Regulations provisions which are
authorized in the order. Section 956.62 provides authority for the
Committee, with the approval of the Secretary, to establish a method
for fixing the markings of containers used in the packaging or handling
of Walla Walla Sweet Onions. Further, based upon recommendations
submitted by the Committee, Sec. 956.63 provides authority for the
Secretary to issue regulations in regard to assessment and container
marking requirements to facilitate the handling of Walla Walla Sweet
Onions for specified purposes.
The Committee met October 8, 1996, and recommended that all Walla
Walla Sweet Onions produced in the production area and shipped to the
fresh market be packed in containers marked with the ``Genuine Walla
Walla Sweet Onion'' logo. The Committee also recommended exemption from
assessments for sweet onions shipped to outlets specified in
Sec. 956.163.
At its next regularly scheduled meeting on November 12, 1996, the
Committee reconfirmed the recommendations to establish container
marking requirements and exempt specified shipments from assessments.
At that meeting, the Committee also recommended exempting shipments
specified in Sec. 956.163 from container marking requirements. This
rule combines the recommendations from the two Committee meetings into
one rulemaking action.
The first action establishes container marking requirements in
Sec. 956.162. When the Walla Walla Sweet Onion industry began the
process of formulating the order, a primary objective was to help
promote product identity at wholesale, retail, and consumer levels,
while at the same time deterring the marketing of non-sweet onions, or
onions grown outside the production area, as Walla Walla Sweet Onions.
The Committee is authorized to use a trademarked logo developed by the
Walla Walla Sweet Onion Commission and the Walla Walla Area Chamber of
Commerce. The logo was developed and patented by the Walla Walla Sweet
Onion Commission in December 1991, and currently is widely recognized
by the onion industry.
The logo has been used by the Committee on promotional material and
correspondence since the Committee obtained the license to use it on
April 19, 1996. During both the subcommittee and the regular Committee
meetings held to develop the recommendation for the regulation
specified in Sec. 956.162, all participants agreed that containers of
Walla Walla Sweet Onions should be marked with the Committee's
registered logo. Discussion during the meetings indicated that product
identity, just as it was during the formulation of the order, continues
to be a primary concern for both promotional and compliance purposes,
and that effort should be made to add specific container marking
regulations.
Committee members and other industry members agree that the use of
the widely recognized logo will have a positive effect on the economic
returns for the entire industry. One of the major problems for this
industry has been the marketing of non-Walla Walla Sweet Onions, grown
either in the traditional production area or outside of it, as Walla
Walla Sweet Onions. It is the Committee's belief that, buyers, having
purchased onions represented to them as being Walla Walla Sweet Onions,
will rarely return to purchase more due to the lack of confidence such
a sale fostered. This had, and still has, the effect of curtailing
demand and reducing returns to producers.
Some of the handler members on the Committee recommended that this
regulation allow handlers a period of time to utilize current packaging
inventory before being required to use containers marked with the
Committee's logo. These individuals expressed concern that some
handlers may have significant container inventory with pre-printed
graphics and other markings. Comments by handlers at the meeting
indicated that the expense and burden of disposing of their container
inventory, or, alternatively, adding decals, stickers, or stamps to the
existing containers would be significant. The Committee agrees that,
although handlers should make every effort to begin using the logo on
containers as soon as possible, a grace period of two crop years allows
adequate time for handlers to exhaust current container inventories.
Section 956.162(b) provides such a grace period, subject to
[[Page 18025]]
Committee verification of handler container inventories.
The Committee recommended that the logo be clearly displayed as
either a decal or an imprint on all containers, and that there should
be no specific requirements for the size and color of the markings. As
it is a common industry practice to ship onions in field pack bulk bins
containing more than 500 pounds net weight from the field to road-side
stands and farmers' markets where they are bagged for resale, the
Committee recommended that the container marking requirements should
not apply to shipments to these two small outlets. This exemption is
specified in Sec. 956.162(b). The proposed rule on this action
incorrectly stated that this exemption was specified in Sec. 956.163.
The container marking requirements will contribute to the efficient
marketing of Walla Walla Sweet Onions by ensuring better product
identification, building buyer confidence, increasing returns to the
industry, and enhancing Committee compliance efforts. During the
shipping season, the Committee manager frequently visits handling
operations to ensure that these operations are complying with marketing
order requirements. Requiring that the registered logo be displayed on
the container will decrease the amount of time the manager spends
tracing and tracking these onions to ensure that they are not non-sweet
onions, or onions from outside the production area, being sold as Walla
Walla Sweet Onions.
When considering Sec. 956.163, which provides exemptions for
shipments made to certain non-fresh use outlets, Committee members
stated that most Walla Walla Sweet Onions are shipped into the fresh
market. However, a small percentage of the onions are utilized for
other purposes, including relief and charitable organizations,
livestock feed, planting and plants, salad onions, processing, disposal
of culls, and seed. For the exemption to apply to shipments made to
relief or charitable organizations, the Committee included a provision
in its recommendation that such shipments must be donated and not sold.
Section 956.163 clearly indicates which shipments are exempted from
assessments and container marking requirements. This is intended to
lessen the chance of confusion on the part of the regulated industry
and alleviate potential administrative and compliance problems for the
Committee, thereby facilitating the marketing of Walla Walla Sweet
Onions.
Notice of this action was published in the Federal Register (62 FR
5933) on February 10, 1977. Interested persons were invited to submit
written comments. The deadline for such comments ended March 12, 1997.
No comments were received.
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, the AMS
has prepared this final 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 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 35 handlers of Walla Walla Sweet Onions
subject to regulation under the order and approximately 60 producers in
the regulated production area. Small agricultural service firms have
been defined by the Small Business Administration (13 CFR 121.601) as
those having annual receipts of less than $5,000,000, and small
agricultural producers are defined as those whose annual receipts are
less than $500,000.
The region in which Walla Walla Sweet Onions are produced is a
relatively small production area, encompassing only a portion of
Oregon's Umatilla County and Washington's Walla Walla County. Produced
on an estimated 850 acres, the industry's total 1996 Walla Walla Sweet
Onion pack-out approximated 20,106,200 pounds. Based on assessments
collected on 50-pound cartons or sacks, Committee records for the 1996
season show that 18 handlers shipped 500 or fewer units, eight handlers
shipped between 500 and 5,000 units, four handlers shipped between
5,000 and 50,000 units, and five handlers shipped between 50,000 and
100,000 units.
Information provided by the Department's Fresh Fruit and Vegetable
Market News officials in Yakima, Washington, indicates that 1996 F.O.B.
prices on jumbo Walla Walla Sweet Onions, packed in 50-pound cartons,
ranged from a high of $16.00 early in the season to a low at the end of
the season of $10.00. On the other end of the scale, medium Walla Walla
Sweet Onions, packed in 50-pound mesh sacks, ranged from early season,
high returns of $14.00 per sack down to a low at the season's
conclusion of $6.00 per sack. Handlers have stated that packing costs
average between $4.00 and $5.00 per 50-pound carton, and around $3.00
per 50-pound sack. Committee records indicate that individual farms
currently have acreage dedicated to the production of Walla Walla Sweet
Onions in the range from 1 to 160 acres.
About 25 of the 35 regulated handlers of Walla Walla Sweet Onions
are also producers and generally pack their own onions in the field
while harvesting them. These onions are usually marketed direct to
consumers through road-side stands and farmers' markets or through mail
order sales. Only about 10 of these handlers own and operate
commercially sized packing facilities and market the majority of their
onions through large wholesale and retail outlets. Based on current
information, the majority of Walla Walla Sweet Onion handlers and
producers may be classified as small entities.
The only alternative to the proposal discussed at the meetings was
to not recommend the rulemaking action at all. The Committee determined
that such an alternative would not be acceptable to the industry
because of the significant benefits expected as a result of these
regulations. Without container marking requirements, the Committee
believes that the current marketing and compliance problems, basic
reasons behind the promulgation of the marketing order, will not be
alleviated. As for the foregoing special purpose shipment exemptions,
the Committee concluded that the absence of a list of shipments exempt
from assessments and container marking requirements would perpetuate
confusion and compliance problems, as well as increase the economic,
reporting and recordkeeping burden on handlers.
This final rule provides that containers of Walla Walla Sweet
Onions for shipment to fresh markets be marked with the Committee's
registered logo, and that specified shipments of Walla Walla Sweet
Onions be exempt from such container marking requirements and from
assessments. This action will not impose any additional reporting or
recordkeeping requirements on either small or large handlers of Walla
Walla Sweet Onions. Additionally, the benefits of this rule are not
expected to be disproportionately greater or less for small handlers or
producers than for larger entities.
As with all Federal marketing order programs, reports and forms are
periodically reviewed to reduce information requirements and
duplication by industry and public
[[Page 18026]]
sector agencies. The Department has not identified any relevant Federal
rules that duplicate, overlap, or conflict with this rule.
The Committee's meetings were widely publicized throughout the
production area. All interested persons were invited to attend the
meetings. The Committee actively seeks participation in its
deliberations at all of its meetings. Both the October 8 and November
12, 1996, meetings were open to the public and representatives of both
large and small entities expressed their views on these and related
issues. The majority of the Committee, composed of six producers and
three handlers, as well as a public member and respective alternates
for each position, represent small entities. Additionally, in the
proposed rule published in the Federal Register (62 FR 5933) on
February 10, 1997, interested persons were invited to submit
information on the regulatory and informational impacts of this action
on small businesses. A copy of the proposal was also made available on
the Internet by the U. S. Government Printing Office. The comment
period ended March 12, 1997, and no comments were received concerning
the impacts of this action on small businesses.
After consideration of all relevant matter presented, including the
information and recommendation submitted by the Committee and other
available information, it is hereby found that this rule, as
hereinafter set forth, will tend to effectuate the declared policy of
the Act.
Pursuant to 5 U.S.C. 553, it is also found and determined that good
cause exists for not postponing the effective date of this rule until
30 days after publication in the Federal Register because: (1) The 1997
shipping season begins in June; (2) handlers are well aware of this
action which was discussed at two open public meetings which were
widely publicized in the production area; and (3) a proposed rule was
published on this action and provided for a 30-day comment period. No
comments were received.
List of Subjects in 7 CFR Part 956
Marketing agreements, Onions, Reporting and record keeping
requirements.
For the reasons set forth in the preamble, 7 CFR Part 956 is
amended as follows:
PART 956--SWEET ONIONS GROWN IN THE WALLA WALLA VALLEY OF SOUTHEAST
WASHINGTON AND NORTHEAST OREGON
1. The authority citation for 7 CFR Part 956 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. New sections 956.162 and 956.163 are added to Subpart--Rules and
Regulations to read as follows:
Sec. 956.162 Container markings.
Effective April 15, 1997, no handler shall ship any container of
Walla Walla Sweet Onions except in accordance with the following terms
and provisions:
(a) Each container of Walla Walla Sweet Onions shall be
conspicuously marked with the ``Genuine Walla Walla Sweet Onion'' logo.
The marking may be in the form of a decal or a stamped imprint of any
color and size: Provided, That the decal or stamped imprint must be
placed in plain sight and easy to read.
(b) Walla Walla Sweet Onions may be handled not subject to the
marking requirements of this section when handlers ship such onions
pursuant to Sec. 956.163, or ship such onions in field packed bulk bins
containing more than 500 pounds net weight for sale to roadside stands
and farmers' market operators for repacking and direct consumer sale:
Provided, That subject to Committee verification of handler container
inventories, handlers may use their existing inventories of unmarked
containers until April 15, 1999.
Sec. 956.163 Handling for specified purposes.
(a) Assessment and container marking requirements specified in this
part shall not be applicable to shipments of onions for any of the
following purposes:
(1) Shipments of Walla Walla Sweet Onions for relief or to
charitable institutions: Provided, That such shipments must be donated
and not sold in order for this exemption to apply;
(2) Shipments of Walla Walla Sweet Onions for livestock feed;
(3) Shipments of Walla Walla Sweet Onions for planting and for
plants;
(4) Shipments of Walla Walla Sweet Onions as salad onions;
(5) Shipments of Walla Walla Sweet Onions for all processing uses
including, pickling, peeling, dehydration, juicing, or other
processing;
(6) Shipments of Walla Walla Sweet Onions for disposal;
(7) Shipments of Walla Walla Sweet Onions for seed.
(b) [Reserved]
Dated: April 7, 1997.
Sharon Bomer Lauritsen,
Acting Director, Fruit and Vegetable Division.
[FR Doc. 97-9479 Filed 4-11-97; 8:45 am]
BILLING CODE 3410-02-P
