Onions Grown in South TexasRegulation of Red Onions and Change in Regulatory Period

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 959

[FV-93-959-2PR]

Onions Grown in South Texas--Regulation of Red Onions and Change

in Regulatory Period

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule with a request for comments.

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SUMMARY: This proposed rule would establish 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 would

tend to improve grower prices by providing more desirable quality red

onions for consumers. This rule also would extend 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 would help make more desirable onions available to

markets.

DATES: Comments must be received by March 24, 1994.

ADDRESSES: Interested persons are invited to submit written comments

concerning this proposal. Comments must be sent in triplicate to the

Docket Clerk, Fruit and Vegetable Division, AMS, USDA, Room 2525-S,

P.O. Box 96456, Washington, DC 20090-6456, FAX (202) 720-5698. All

comments should reference the docket number and the date and page

number of this issue of the Federal Register and will be made available

for public inspection in the Office of the Docket Clerk during regular

business hours.

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 proposal 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 proposal has been reviewed under Executive Order 12778, Civil

Justice Reform. This action is not intended to have retroactive effect.

This proposal 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, 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, that 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

would be regulated to the same extent.

The second recommendation concerns the length of the regulatory

period for shipments of onions from the regulated area. Currently,

order regulations are 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 stated that

it is the desire of the producers in District 2 that onions regulated

under the marketing order once again be regulated during the May 20

through June 15 period. 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 would 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 would be competing with unregulated shipments from other areas

such as California. Permitting District 2 handlers to package and ship

whenever they can find buyers would help to reduce the competitive

advantage of handlers shipping from outside the regulated area.

This action was unanimously recommended by the committee, and

should ensure that consumers are provided with quality onions,

including red varieties, during the entire South Texas shipping period.

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 would establish grade, size, quality

and maturity requirements on red onions and would change the regulatory

period under the South Texas onion marketing order, corresponding

changes would be needed in the onion import regulation. Such changes

would be addressed in a separate onion import rule.

Based on available information, the Administrator of the AMS has

determined that this action would not have a significant economic

impact on a substantial number of small entities.

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.

Interested persons are invited to submit their views and comments

on this proposal. A 15-day comment period is considered appropriate

because any changes to the regulations, if adopted, should be in effect

as soon as possible. The marketing period begins March 1. All comments

timely received will be considered prior to finalization of this rule.

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

proposed to be amended as follows:

PART 959--ONIONS GROWN IN SOUTH TEXAS

1. The authority citation for 7 CFR part 959 continues to read as

follows:

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

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: March 4, 1994.

Martha B. Ransom,

Acting Deputy Director, Fruit and Vegetable Division.

[FR Doc. 94-5559 Filed 3-8-94; 8:45 am]

BILLING CODE 3410-02-P