E9-22115. Onions Grown in South Texas; Change in Regulatory Period

AGENCY:

Agricultural Marketing Service, USDA.

ACTION:

Affirmation of interim final rule as final rule.

SUMMARY:

The Department of Agriculture (USDA) is adopting, as a final rule, without change, an interim final rule that revised the regulatory period during which minimum grade, size, quality, and maturity requirements are in effect for onions grown in South Texas under Marketing Order No. 959 (order). The interim final rule shortened the regulatory period from March 1 through July 15 to March 1 through June 4. The relaxation in the interim final rule was necessary to enable producers and handlers to compete more effectively in the marketplace.

DATES:

Effective Date: Effective September 16, 2009.

FOR FURTHER INFORMATION CONTACT:

Belinda G. Garza, Regional Manager, Texas Marketing Field Office, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA; Telephone: [phone], Fax: [phone]; or E-mail: [e-mail].

Small businesses may obtain information on complying with this and other marketing order regulations by viewing a guide at the following Web site: http://www.ams.usda.gov/​AMSv1.0/​ams.fetchTemplateData.do?​template=​TemplateN&​page=​MarketingOrdersSmallBusinessGuide; or 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 rule is issued under Marketing Order No. 959, as amended (7 CFR part 959), regulating the handling of onions grown in South Texas, 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.”

Section 8e of the Act provides that whenever certain specified commodities, including onions, are regulated under a Federal marketing order, imports of these commodities into the United States are prohibited unless they meet the same or comparable grade, size, quality, or maturity requirements as those in effect for the domestically produced commodities. The interim final rule had no impact on the import regulation for onions.

USDA is issuing this rule in conformance with Executive Order 12866.

The handling of onions grown in South Texas is regulated by 7 CFR part 959. Section 959.322 of the order's rules and regulations provides that the handling of South Texas onions shall be subject to specified grade, size, and inspection requirements. That section also prescribes the time period during which such regulatory requirements for South Texas onions are in effect. Previously, the regulatory period during which regulations were in effect ran from March 1 to July 15.

In an interim final rule published in the Federal Register on April 24, 2009, and effective on April 25, 2009 (74 FR 18621, Doc. No. AMS-FV-09-0012, FV09-959-1 IFR), § 959.322 was amended by changing the ending date of the regulatory period to June 4, except that onions handled from June 5 through July 15 would continue to be inspected. Relaxing the regulation helps shippers in districts with later production compete in the market with shippers from non-regulated production areas. Continuing the inspection requirement through July 15 allows the South Texas Onion Committee (Committee) to continue collecting assessments through the end of the onion season in order to consistently fund onion promotion and research projects under the order.

Final Regulatory Flexibility Analysis

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) has considered the economic impact of this action 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 rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf.

Industry Information

There are approximately 84 producers of onions in the production area and approximately 31 handlers subject to regulation under the order. Small agricultural producers are defined by the Small Business Administration (SBA) (13 CFR 121.201) as those having annual receipts of less than $750,000. Small agricultural service firms are defined as those having annual receipts of less than $7,000,000.

Most of the South Texas handlers are vertically integrated corporations involved in producing, shipping, and marketing onions. For the 2007-08 marketing year, the industry's 31 handlers shipped onions produced on 10,978 acres with the average and median volume handled being 202,245 and 176,551 fifty-pound equivalents, respectively. In terms of production value, total revenues for the 31 handlers were estimated to be $174.7 million, with average and median revenues being $5.64 million and $4.92 million, respectively.

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.

Based on the SBA's definition of small entities, the Committee estimates that all of the 31 handlers regulated by the order would be considered small entities if only their onion revenues are considered. However, revenues from other farming enterprises could result in a number of these handlers being above the $7,000,000 annual receipt threshold. All of the 84 producers may be classified as small entities based on the SBA definition if only their revenue from onions is considered.

This rule continues in effect the action that shortened the ending date of the order's regulatory period for Texas onions shipped to the fresh market from July 15 to June 4 of each year. This action, which was unanimously recommended by the Committee, shortened the regulatory period during which minimum grade, size, quality, and maturity requirements are in effect for onions grown under the order. Authorization to implement such regulations is provided in § 959.52(b) of the order. Regulatory requirements authorized under this section are provided in § 959.322.

The interim final rule provided that fresh onion shipments from the South Texas onion production areas meet minimum grade, size, quality, and maturity requirements from March 1 through June 4 of each year. Inspection requirements will continue through July 15. Previously, regulations required that onions grown in the production area meet order requirements from March 1 through July 15 of each year. Prior to the 2007 marketing season, the regulatory period was from March 1 through June 4. In 2007, the regulatory period was extended from June 4 to July 15. At that time, the Committee believed that applying quality requirements for a longer time period was necessary to accommodate an extended growing season.

After two seasons' experience, District 2 producers and handlers requested that the Committee reconsider the previous regulatory extension. Onions subject to quality requirements under the order from June 5 to July 15 had been competing in the market with non-regulated onions from growing areas outside the order. Relaxing the requirements by changing the ending date of the regulatory period back to June 4 relieves District 2 handlers of the resulting inequity and enables them to be more competitive with shippers from other production areas.

Under the order, the Committee collects assessments from handlers based on inspection of onions to be shipped to market. The Committee's recommendation to continue the inspection requirement to July 15 allows the Committee to continue to collect assessments through the end of the season. This revenue will continue to be used by the Committee to fund its operations, including consistent funding for onion promotion and research projects under the order.

One alternative to such action would have been to not change the regulatory period back to June 4. However, the Committee believed that leaving the quality requirements in place for the entire season would not have been as beneficial for those shipping onions in the latter part of the season.

This rule does not impose any additional reporting or recordkeeping requirements on either small or large 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.

In addition, as noted in the initial regulatory flexibility analysis, USDA 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. All Committee meetings are public meetings and all entities, both large and small, are able to express their views.

This action also affirms information contained in the interim final rule concerning Executive Orders 12866 and 12988, the Paperwork Reduction Act (44 U.S.C. Chapter 35), and the E-Gov Act (44 U.S.C. 101).

Comments on the interim final rule were required to be received on or before June 23, 2009. No comments were received. Therefore, for the reasons given in the interim final rule, we are adopting the interim final rule as a final rule, without change.

To view the interim final rule, go to http://www.regulations.gov/​fdmspublic/​component/​main?​main=​DocketDetail&​d=​AMS-FV-09-0012.

After consideration of all relevant material presented, it is found that finalizing the interim final rule, without change, as published in the Federal Register (74 FR 18621; April 24, 2009) will tend to effectuate the declared policy of the Act.

List of Subjects in 7 CFR Part 959

• Marketing agreements
• Onions
• Reporting and recordkeeping requirements

PART 959—[AMENDED]

Accordingly, the interim final rule amending 7 CFR part 959 which was published at 74 FR 18621 on April 24, 2009, is adopted as a final rule without change.

Dated: September 9, 2009.

Rayne Pegg,

Administrator, Agricultural Marketing Service.