04-16271. Onions Grown in Certain Designated Counties in Idaho, and Malheur County, Oregon; Increased Assessment Rate

AGENCY:

Agricultural Marketing Service, USDA.

ACTION:

Final rule.

SUMMARY:

This rule increases the assessment rate established for the Idaho-Eastern Oregon Onion Committee (Committee) for the 2004-2005 and subsequent fiscal periods from $0.095 to $0.105 per hundredweight of onions handled. The Committee locally administers the marketing order that regulates the handling of onions grown in designated counties in Idaho, and Malheur County, Oregon. Authorization to assess onion handlers enables the Committee to incur expenses that are reasonable and necessary to administer the program. The fiscal period begins July 1 and ends June 30. The assessment rate will remain in effect indefinitely unless modified, suspended, or terminated.

EFFECTIVE DATE:

July 20, 2004.

FOR FURTHER INFORMATION CONTACT:

Barry Broadbent, Northwest Marketing Field Office, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1220 SW., Third Ave, Suite 385, Portland, OR 97204; telephone: [phone]; Fax: [phone]; or George Kelhart, Technical Advisor, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 20250-0237; telephone: [phone]; Fax: [phone].

Small businesses may request information on complying with this regulation by contacting Jay Guerber, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue SW, STOP 0237, Washington, DC 20250-0237; telephone: [phone]; Fax: [phone]; or E-mail: [e-mail].

SUPPLEMENTARY INFORMATION:

This final 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 designated counties in Idaho, and Malheur County, Oregon, hereinafter referred to as the “order.” 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 Department of Agriculture (USDA) is issuing this rule in conformance with Executive Order 12866.

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the marketing 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 as issued herein will be applicable to all assessable onions beginning July 1, 2004, and continue until amended, suspended, or terminated. 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 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 established for the Committee for the 2004-2005 and subsequent fiscal periods from $0.095 to $0.105 per hundredweight of onions handled.

The Idaho-Eastern Oregon onion marketing order provides authority for the Committee, with the approval of USDA, to formulate an annual budget of expenses and collect assessments from handlers to administer the program. The Committee consists of six producer members, four handler members and one public member. Each member is familiar with the Committee's needs and with the costs for goods and services in their local area and are thus in a position to formulate an appropriate budget and assessment rate. The assessment rate is formulated and discussed in a public meeting. Thus, all directly affected persons have an opportunity to participate and provide input.

For the 2003-2004 and subsequent fiscal periods, the Committee recommended, and USDA approved, an assessment rate that would continue in effect from fiscal period to fiscal period unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the Committee or other information available to USDA.

The Committee met on April 1, 2004, and unanimously recommended 2004-2005 expenditures of $997,442. In comparison, last year's budgeted expenditures were $957,000. At that same meeting, the Committee, in a vote of seven in favor, two opposed (desired continuation of the current rate), and one abstention, recommended increasing the assessment rate to $0.105 per hundredweight of onions handled. The assessment rate of $0.105 is $0.01 higher than the rate currently in effect. The order authorizes the Committee to establish an operating reserve of up to one fiscal period's operational expense. However, the Committee's policy is to maintain the operating reserve at a level of approximately one-half of one fiscal period's operational expenses. The Committee, over the last five fiscal periods, has reduced its operating reserve to slightly below this level. The Committee recommended the $0.01 increase so the total of assessment income ($932,400), contributions ($75,600), interest income ($7,000), and other income ($2,000) would sufficiently fund the recommended expenses for 2004-2005 of $997,442. The increased assessment income is anticipated to add approximately $19,558 to the operating reserve, increasing it to an estimated $504,661 at the end of the 2004-2005 fiscal period.

The major expenditures recommended by the Committee for the 2004-2005 fiscal period include $10,000 for committee expenses, $163,482 for salary expenses, $81,960 for travel/office expenses, $60,000 for production research expenses, $32,000 for export market development expenses, $600,000 for promotion expenses, and $50,000 for unforeseen marketing order contingencies. Budgeted expenses for these items in 2002-2003 were $10,000, $148,353, $72,610, $59,170, $27,250, $589,617, and $50,000, respectively.

The Committee estimates that fresh market onion shipments for the 2004-2005 fiscal period will be approximately 8,880,000 hundredweight, which should provide $932,400 in assessment income. Income derived from handler assessments, along with contributions ($75,600), interest income ($7,000), and other income ($2,000) would be sufficient to cover budgeted expenses and increase the operating reserve approximately $19,558. The Committee estimates that its operating reserve will be approximately $485,103 at the beginning of the 2004-2005 fiscal period. Funds in the reserve will be kept within the maximum permitted by the order of approximately one fiscal year's operational expenses (§ 958.44.)

The assessment rate established in this rule will continue in effect indefinitely unless modified, suspended, or terminated by USDA 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 USDA. Committee meetings are open to the public and interested persons may express their views at these meetings. USDA will evaluate Committee recommendations and other available information to determine whether modification of the assessment rate is needed. Further rulemaking will be undertaken as necessary. The Committee's 2004-2005 budget and those for subsequent fiscal periods would be reviewed and, as appropriate, approved by USDA.

Final Regulatory Flexibility Analysis

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA), the Agricultural Marketing Service (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 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 37 handlers of Idaho-Eastern Oregon onions who are subject to regulation under the order and approximately 250 onion producers in the regulated production area. Small agricultural service firms are defined by the Small Business Administration (13 CFR 121.201) as those whose annual receipts are less than $5,000,000, and small agricultural producers are defined as those whose annual receipts are less than $750,000.

The Committee estimates that 32 of the 37 handlers of Idaho-Eastern Oregon onions ship under $5,000,000 worth of onions on an annual basis. According to the Vegetables 2003 Summary reported by the National Agricultural Statistics Service, the total farm gate value of onions in the regulated production area for 2003 was $130,768,000. Therefore, the 2003 average gross revenue for an onion producer in the regulated production area was $523,072. Based on this information, it can be concluded that the majority of handlers and producers of Idaho-Eastern Oregon onions may be classified as small entities.

This rule increases the assessment rate established for the Committee and collected from handlers for the 2004-2005 and subsequent fiscal periods from $0.095 to $0.105 per hundredweight of onions handled. The Committee recommended 2004-2005 expenditures of $997,442 and an assessment rate of $0.105 per hundredweight, which is $0.01 higher than the rate currently in effect. The quantity of assessable onions for the 2004-2005 fiscal period is estimated at 8,880,000 hundredweight. Thus, the $0.105 rate should provide $932,400 in assessment income, which along with anticipated contributions, interest income, and other income should be adequate to cover budgeted expenses.

The major expenditures recommended by the Committee for the 2004-2005 fiscal period include $10,000 for committee expenses, $163,482 for salary expenses, $81,960 for travel/office expenses, $60,000 for production research expenses, $32,000 for export market development expenses, $600,000 for promotion expenses, and $50,000 for unforeseen marketing order contingencies. Budgeted expenses for these items in 2003-2004 were $10,000, $148,353, $72,610, $59,170, $27,250, $589,617, and $50,000, respectively.

The Committee reviewed and unanimously recommended 2004-2005 expenditures of $997,442. This budget includes increases in the budget line items for salary expenses, travel and office expenses, research expenses, export expenses, and promotion expenses. Committee expenses and the marketing order contingency fund would remain the same. Prior to arriving at this budget, the Committee considered information from various sources, including the Idaho-Eastern Oregon Onion Executive, Research, Export, and Promotion Committees. These subcommittees discussed alternative expenditure levels, based upon the relative value of various research and promotion projects to the Idaho-Eastern Oregon onion industry. The assessment rate of $0.105 per hundredweight of assessable onions was then determined by taking into consideration the estimated level of assessable shipments, other revenue sources, and the Committee's goal of not having to use reserve funds during 2004-2005.

A review of historical information and preliminary information pertaining to the upcoming fiscal period indicates that the producer price for the 2004-2005 season could be about $10.80 per hundredweight. Therefore, the estimated assessment revenue for the 2004-2005 fiscal period as a percentage of total producer revenue could be about 1.1 percent.

This action increases the assessment obligation imposed on handlers. While assessments impose some additional costs on handlers, the costs are minimal and uniform on all handlers. Some of the additional costs may be passed on to producers. However, these costs are offset by the benefits derived by the operation of the order. In addition, the Committee's meetings were widely publicized throughout the Idaho-Eastern Oregon onion industry and all interested persons were invited to attend the meetings and participate in Committee deliberations on all issues. Like all Committee meetings, the April 1, 2004, meeting was open to the public and all entities, both large and small, were able to express views on this issue. Finally, interested persons were invited to submit information on the regulatory and informational impacts of this action on small businesses.

This rule imposes no 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.

USDA 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 May 21, 2004 (69 FR 29244). Copies of the proposed rule were also mailed or sent via facsimile to all onion handlers. Finally, the proposal was made available through the Internet by the Office of the Federal Register and USDA. A 30-day comment period ending June 21, 2004, was provided for interested persons to respond to the proposal. No comments were received.

A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/​fv/​moab.html. Any questions about the compliance guide should be sent to Jay Guerber at the previously mentioned address in the FOR FURTHER INFORMATION CONTACT section.

After consideration of all relevant material 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 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 Committee needs to have sufficient funds to pay its expenses which are incurred on a continuous basis; (2) the 2004-2005 fiscal period began on July 1, 2004, and the order requires that the rate of assessment for each fiscal period apply to all assessable onions handled during such fiscal period; (3) handlers are aware of this action which was unanimously recommended by the Committee at a public meeting; and (4) a 30-day comment period was provided for in the proposed rule, and no comments were received.

List of Subjects in 7 CFR Part 958

• Onions
• Marketing agreements
• Reporting and recordkeeping requirements

For the reasons set forth in the preamble, 7 CFR part 958 is amended as follows:

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

1. The authority citation for 7 CFR part 958 continues to read as follows:

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

2. Section 958.240 is revised to read as follows:

§ 958.240

Assessment rate.

On and after July 1, 2004, an assessment rate of $0.105 per hundredweight is established for Idaho-Eastern Oregon onions.

Dated: July 13, 2004.

A.J. Yates,

Administrator, Agricultural Marketing Service.