Monday, October 31, 2011

Revised onion handling regs: Idaho - eastern Oregon

DEPARTMENT OF AGRICULTURE 3410-02P
Agricultural Marketing Service
7 CFR Part 958
[Doc. No. AMS-FV-11-0025; FV11-958-1 FR]
Onions Grown in Certain Designated Counties in Idaho, and
Malheur County, Oregon; Modification of Handling
Regulations
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
SUMMARY: This rule revises the handling regulation for
onions handled under the Idaho-Eastern Oregon onion
marketing order. The marketing order regulates the
handling of onions grown in designated counties in Idaho,
and Malheur County, Oregon, and is administered locally by
the Idaho-Eastern Oregon Onion Committee (Committee). This
rule revises the marketing order’s handling regulation to
allow special purpose shipments of onions for
experimentation. The revision will allow the Idaho-Eastern
Oregon onion industry to identify and develop new market
niches and is expected to benefit producers, handlers, and
consumers of onions.
EFFECTIVE DATE: [INSERT DATE 1 DAY AFTER THE DATE OF
PUBLICATION IN THE FEDERAL REGISTER].
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FOR FURTHER INFORMATION CONTACT: Barry Broadbent or Gary D.
Olson, Northwest Marketing Field Office, Marketing Order
Administration Branch, Fruit and Vegetable Programs, AMS,
USDA, 805 SW Broadway, suite 930, Portland, OR 97205;
Telephone: (503) 326-2724, Fax: (503) 326-7440, or E-mail:
Barry.Broadbent@ams.usda.gov or GaryD.Olson@ams.usda.gov.
Small businesses may request information on complying
with this regulation by contacting Laurel May, Marketing
Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA, 1400 Independence Avenue SW, STOP 0237,
Washington, DC 20250-0237; Telephone: (202) 720-2491, Fax:
(202) 720-8938, or E-mail: Laurel.May@ams.usda.gov.
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.
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This final rule has been reviewed under Executive
Order 12988, Civil Justice Reform. This rule is not
intended to have retroactive effect.
The Act provides that administrative proceedings must
be exhausted before parties may file suit in court. Under
§ 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. A 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 final rule revises the handling regulation for
onions handled under the order. Specifically, this rule
revises the handling regulation to allow special purpose
shipments of onions for the purpose of experimentation
without regard to the minimum grade, size, maturity, pack,
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and inspection requirements of the order. The revision
will give the Idaho-Eastern Oregon onion industry the
opportunity to identify and develop new markets. The
changes are expected to benefit producers, handlers, and
consumers of onions. This rule was unanimously recommended
by the Committee at a meeting on January 20, 2011.
Sections 958.42, 958.51, 958.52, and 958.60 of the
order provide authority for assessment, mandatory
inspection, and establishment of grade, size, quality,
maturity, and pack regulations applicable to the handling
of onions. Section 958.53 of the order provides authority
for the issuance of special regulations, or the
modification, suspension, or termination of requirements in
effect pursuant to §§ 958.42, 958.52, 958.60, or any
combination thereof, in order to facilitate the handling of
onions for certain specified purposes.
Section 958.328 establishes minimum requirements for
onions handled subject to the order. Currently, no person
shall handle any lot of onions unless such onions are
inspected, are at least “moderately cured”, and meet the
grade, size, maturity, and pack requirements of paragraphs
(a), (b), and (c). Paragraph (e) delineates specific types
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of special purpose shipments that are exempt from the
requirements of the order. Paragraph (f) outlines the
safeguards for such special purpose shipments.
The Committee recommended this revision to the
handling regulations to respond to the industry’s desire to
have greater flexibility in indentifying and pursuing
unique marketing opportunities for onions that do not
conform to the requirements of the order. The concern from
the onion industry is that onion producers and handlers
within the order’s production area are at a competitive
disadvantage, relative to other onion producing regions,
with respect to their ability to identify and develop new
markets for non-standard onions. Adding authority to allow
experimental onion shipments under the order provides
handlers access to markets not previously available to
them.
An example that demonstrates how the industry benefits
from this final rule would be a scenario in which a handler
wants to produce and ship a unique, irregularly shaped
small onion (e.g. a heart or a square shape) in order to
target a newly developed niche market. Since irregular
shape is a physical characteristic that does not conform to
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the order’s grade requirements, previously such onions
could not have been handled under the marketing order.
However, with this exemption for experimentation the
Committee can now allow the shipment of those specific type
onions while still maintaining the integrity of the order.
If the market for such onions increases significantly, the
Committee could then incorporate changes into the handling
regulations to accommodate their handling without the
continued need for an exemption.
The potential for marketing opportunities like the
example described above motivated the Committee to
recommend modifying the handling regulation to add
“experimentation” to the already established list of
special purpose shipments allowed under the order. Onion
shipments for experimental purposes will thus be exempt
from the grade, size, maturity, pack, and inspection
requirements of the handling regulation. Shipments made
under the experimental exemption continue to be subject to
the assessment requirement of the order, however. With
this special purpose shipment provision for
experimentation, handlers have greater flexibility in
pursuing various types of unique marketing opportunities
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that were previously not available under the handling
regulation.
The Committee will require handlers to request preapproval
for such experimental exemptions. Through the
approval process, the Committee will be able to regulate
the quantity and timing of such shipments. It is the goal
of the Committee that any experimental shipments of onions
will be temporary in nature. At the point that emerging
experimental markets reach a sufficient volume or continue
for such a length of time as to be deemed sustainable by
the Committee, the Committee could then recommend changes
to the handling regulation requirements to accommodate the
marketing of such onions on a permanent basis.
Final Regulatory Flexibility Analysis
Pursuant to the 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
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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.
There are approximately 35 handlers of Idaho-Eastern
Oregon onions who are subject to regulation under the order
and approximately 250 onion producers in the regulated
area. Small agricultural service firms, which include
onion handlers and receivers, are defined by the Small
Business Administration (SBA)(13 CFR 121.201) as those
having annual receipts of less than $7,000,000, and small
agricultural producers are defined as those having annual
receipts of less than $750,000.
The National Agricultural Statistics Service (NASS)
reported in the “Vegetables 2010 Summary”, published in
January 2011, that the total F.O.B. value of onions in the
regulated production area for 2010 was $133,041,000. Based
on an industry estimate of 35 handlers, the average value
of onions handled per handler is $3,801,000, well below the
SBA threshold for defining small agricultural service
firms. In addition, based on an industry estimate of 250
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producers, the average F.O.B. value of onions produced in
the industry is $532,164 per producer. Since the F.O.B.
value is usually significantly higher than the farm gate
value that the producers actually receive, most onion
producers within the order’s production area could be
considered small agricultural producers under the SBA
definition. Therefore, it can be concluded that the
majority of handlers and producers of Idaho-Eastern Oregon
onions may be classified as small entities as defined by
the SBA.
This final rule revises § 958.328(e) of the order’s
handling regulation to allow special purpose shipments of
onions for the purpose of experimentation without regard to
the minimum grade, size, maturity, pack, and inspection
requirements currently prescribed under paragraphs (a),
(b), and (c) of § 958.328. The revision will allow the
Idaho-Eastern Oregon onion industry to identify and develop
new markets for non-standard onions that have not been
previously available. The changes are expected to benefit
producers, handlers, and consumers of onions.
At a meeting on January 20, 2011, the Committee
discussed the impact of the recommended changes on handlers
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and producers in terms of increased costs. The Committee
believes that, since this change exempts certain shipments
of onions from regulation, this action will not add any
additional requirements or costs relative to the existing
regulation. Since the utilization of the special purpose
shipment provision is voluntary in nature, any additional
regulatory burden placed on a handler as a result of this
final rule will be by their choice. The changes may,
however, create opportunities for producers and handlers to
develop new markets and to enhance revenues. The Committee
believes that the potential benefit associated with this
action outweighs any potential increase in administrative
cost or regulatory burden incurred by the handler.
The Committee discussed various alternatives to adding
experimental shipments to the list of special purpose
shipment exemptions contained in the order’s handling
regulation. Some members suggested that the provision was
too broad in scope and needed greater restrictions. After
deliberation, the Committee concluded that it would be
impossible to anticipate what might be “experimental” in
the future and that affording the greatest latitude to the
provision, while maintaining strict Committee oversight,
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was in the best interest of the industry. The Committee
also considered taking no action with regard to adding an
experimental shipment provision, citing the potential for
abuse. After deliberation, the Committee agreed that the
experimental shipment provision is needed to respond to
changes in the industry and that there would be sufficient
safeguards to protect the integrity of the order.
This final rule imposes additional reporting burdens
on handlers who make special purpose shipments of
experimental onions. This action requires the modification
of two existing Committee forms and an increase in burden
hours for three existing forms. 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.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995
(44 U.S.C. Chapter 35), the order's information collection
requirements have been previously approved by the Office of
Management and Budget (OMB) and assigned OMB No. 0581–0241,
“Onions Grown in Certain Designated Counties in Idaho, and
Malheur County, Oregon, M.O. No. 958.” However, as a
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result of this action changes in those requirements are
necessary and have been submitted to OMB for review.
As noted in the initial regulatory flexibility
analysis, USDA has not identified any relevant Federal
rules that duplicate, overlap or conflict with this rule.
AMS is committed to complying with the E-Government
Act, to promote the use of the Internet and other
information technologies to provide increased opportunities
for citizen access to Government information and services,
and for other purposes.
In addition, the Committee’s meeting was widely
publicized throughout the onion industry, and all
interested persons were invited to attend the meeting and
participate in Committee deliberations on all issues. Like
all Committee meetings, the January 20, 2011, meeting was a
public meeting and all entities, both large and small, were
able to express their views on this issue.
A proposed rule concerning this action was published
in the Federal Register on June 21, 2011 (76 FR 35997).
Copies of the rule were made available to all Committee
members and onion handlers. Finally, the rule was made
available through the Internet by USDA and the Office of
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the Federal Register. A 60-day comment period ending
August 22, 2011, was provided to allow interested persons
to respond to the proposal. No comments were received.
Accordingly, no changes will be made to the rule as
proposed.
A small business guide on complying with fruit,
vegetable, and specialty crop marketing agreements and
orders may be viewed at:
www.ams.usda.gov/MarketingOrdersSmallBusinessGuide. Any
questions about the compliance guide should be sent to
Laurel May at the previously mentioned address in the FOR
FURTHER INFORMATION CONTACT section.
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.
It is further found that good cause exists for not
postponing the effective date of this rule until 30 days
after publication in the Federal Register (5 U.S.C. 553)
because handlers are already shipping onions from the 2011-
2012 crop and handlers want to take advantage of the
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revision as soon as possible. Further, handlers are aware
of this rule, which was unanimously recommended by the
committee at a public meeting. Also, a 60-day comment
period was provided for in the proposed rule.
List of Subjects in 7 CFR Part 958
Marketing agreements, Onions, 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. In § 958.328, revise paragraph (e) and the
introductory sentence of paragraph (f) to read as follows:
§ 958.328 Handling regulation.
* * * * *
(e) Special purpose shipments. (1) The minimum
grade, size, maturity, pack, assessment, and inspection
requirements of this section shall not be applicable to
shipments of onions for any of the following purposes:
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(i) Planting,
(ii) Livestock feed,
(iii) Charity,
(iv) Dehydration,
(v) Canning,
(vi) Freezing,
(vii) Extraction,
(viii) Pickling, and
(ix) Disposal.
(2) Shipments of onions for the purpose of
experimentation, as approved by the Committee, may be made
without regard to the minimum grade, size, maturity, pack,
and inspection requirements of this section. Assessment
requirements shall be applicable to such shipments.
(3) The minimum grade, size, and maturity
requirements set forth in paragraph (a) of this section
shall not be applicable to shipments of pearl onions, but
the maximum size requirement in paragraph (h) of this
section and the assessment and inspection requirements
shall be applicable to shipments of pearl onions.
(f) Safeguards. Each handler making shipments of
onions outside the production area for dehydration,
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canning, freezing, extraction, pickling, or experimentation
pursuant to paragraph (e) of this section shall:
* * * * *
Dated: October 26, 2011
Ellen King
Acting Administrator
Agricultural Marketing Service
[FR Doc. 2011-28197 Filed 10/31/2011 at 8:45 am;
Publication Date: 11/01/2011]

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