Onions Grown in Certain Designated Counties in Idaho, and Malheur County, Oregon, and Imported Onions; Modification of Size Requirements

SUMMARY: This proposed rule would change the ``repacker/prepacker''

size designations for all varieties of onions except white or red

varieties by increasing the minimum diameter from 1\1/2\ inches to 1\3/

4\ inches, and the maximum diameter from 2\1/2\ inches to 2\3/4\ inches

for onions in this size category. Recent trends in buyer preference

reflect an increasing demand for larger size onions in the ``repacker/

prepacker'' category. This proposed rule is intended to benefit

producers and handlers by increasing their flexibility and efficiency

in the packaging of ``repacker/prepacker'' size onions. As provided

under section 8e of the Agricultural Marketing Agreement Act of 1937,

the proposed change to the minimum size requirement would also apply to

all imported onions except white or red varieties.

DATES: Comments must be received by June 5, 1996.

ADDRESSES: Interested persons are invited to submit written comments

concerning this rule. Comments must be sent in triplicate to the Docket

Clerk, Fruit and Vegetable Division, AMS, USDA, room 2523, South

Building, P.O. Box 96456, Washington, D.C. 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 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)326-2724; FAX: (503)326-

7440; or Robert F. Matthews, Marketing Order Administration Branch,

Fruit and Vegetable Division, AMS, USDA, room 2523, South Building,

P.O. Box 96456, Washington, D.C. 20090-6456; telephone: (202)690-0464;

FAX: (202)720-5698.

SUPPLEMENTARY INFORMATION: This proposed rule is issued under Marketing

Agreement No. 130 and Marketing Order No. 958 (7 CFR Part 958), both as

amended, regulating the handling of onions grown in certain designated

counties in Idaho and Malheur County, Oregon. The marketing agreement

and marketing order are effective under the Agricultural Marketing

Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter

referred to as the Act.

This proposed rule, which would also affect the minimum size

requirements for all varieties of imported onions, except white or red

varieties, is also issued pursuant to section 8e of the Act. The

provisions of section 8e and the onion import regulations are discussed

later in this proposed rule.

The Department of Agriculture (Department) is issuing this rule in

conformance with Executive Order 12866.

This proposed rule has been reviewed under Executive Order 12778,

Civil Justice Reform. This proposal is not intended to have retroactive

effect. This proposed 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 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 the date of the entry of the ruling.

There are no administrative proceedings which must be exhausted

prior to any judicial challenge to the provisions import regulations

issued under section 8e of the act.

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.

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. Import regulations issued under

the act are based on those established under Federal Marketing Orders.

There are currently 34 handlers subject to regulation under the

marketing order and approximately 550 onion producers in the regulated

production area. In addition, at least 148 importers of onions are

subject to import regulations and would be affected by this proposed

rule.

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

majority of handlers and producers of Idaho-Eastern Oregon onions may

be classified as small entities. The majority of importers may also be

classified as small entities.

Pursuant to authority contained in section 958.51 of the marketing

order, the Idaho-Eastern Oregon Onion Committee (Committee), at its

November 16, 1995, meeting, unanimously recommended changing the

minimum and maximum sizes set forth in section 958.328(a)(3)(ii) of the

handling regulation. For this size

[[Page 20189]]

category, the Committee recommended increasing the minimum diameter

from 1\1/2\ inches to 1\3/4\ inches, and the maximum diameter from 2\1/

2\ inches to 2\3/4\ inches for all onions except white or red varieties

produced and handled in the production area. Yellow onions are the

major group produced in the regulated production area.

This proposed rule would modify a marketing order size category

that is recognized by the onion industry as ``repacker'' or

``prepacker'' size onions. Onions in this size category are generally

packed and shipped in 50-pound sacks for later repacking into various

consumer packs.

The U.S. Standards for Grades of Onions were recently amended to

include a classification for ``repacker/prepacker'' size onions (60 FR

46976, September 8, 1995), effective October 10, 1995. Section 51.2836

of the U.S. Standards defines such onions as those ranging from a

minimum diameter of 1\3/4\ inches to a maximum diameter of 3 inches.

The U.S. Standards also specify that not more than 5 percent of the

onions in a lot may be undersized and that not more than 10 percent may

be oversized.

Recent trends in buyer preference reflect an increasing demand for

larger size onions in the ``repacker/prepacker'' category. The

Committee reports that the current maximum diameter of 2\1/2\ inches

for this size category is too restrictive and has resulted in a high

percentage of onions being packed in a different category due to

oversize. This has resulted in fewer ``repacker/prepacker'' size onions

being available for market. With an increase in the maximum allowable

diameter to 2\3/4\ inches for ``repacker/prepacker'' size onions, the

Committee expects the quantity of such onions available for market to

increase. The Committee recommended an increase to 2\3/4\ inches rather

than 3 inches, the upper limit of the size range specified in the U.S.

Standards, because the smaller size is more suitable for this industry

and its customers. In addition to the proposed increase in the maximum

diameter for onions in this category, the Committee recommended that

the minimum diameter be increased from 1\1/2\ inches to 1\3/4\ inches

to be the same as the recently amended U.S. Standards.

Any costs to handlers and producers attributable to this proposed

regulation, if adopted, are expected to be offset by the benefits

derived from improved returns. The proposed modification would increase

the volume of onions marketed in this size category, and is expected to

result in higher returns for producers and handlers.

Section 8e of the Act requires that when certain domestically

produced commodities, including onions, are regulated under a Federal

marketing order, imports of that commodity must meet the same or

comparable grade, size, quality, or maturity requirements. Section 8e

also provides that whenever two or more marketing orders regulating the

same commodity produced in different areas of the United States are

concurrently in effect, the Secretary shall determine which of the

areas produces the commodity in more direct competition with the

imported commodity. Imports must then meet the requirements established

for the particular area.

Grade, size, quality, and maturity regulations have been issued

regularly under both Marketing Order 958 and Marketing Order 959, which

regulates the handling of onions grown in South Texas. The current

import regulation (7 CFR 980.117) specifies that import requirements

for onions are to be based on the seasonal categories of onions grown

in both marketing order areas. The import regulations specify that

imported onions must meet the requirements of Marketing Order 958

during the June 16 through March 9 period each season and Marketing

Order 959 through the remainder of the year. Rulemaking is now in

progress that would, if approved, change the beginning date of

Marketing Order 958 requirements to June 5 (61 FR 4941; February 9,

1996). Current import regulations also provide that all varieties of

imported onions, except for white varieties, must be a minimum of 1\1/

2\ inches in diameter. This proposal would change the import

requirements for the period June 16 through March 9 each marketing year

to provide that all varieties of onions except white or red varieties

shall be a minimum of 1\3/4\ inches in diameter. While no changes are

required in the language of section 980.117, all imported onions other

than white or red varieties would be required to meet the minimum size

requirement proposed herein.

Based on available information, the Agricultural Marketing Service

has determined that the issuance of this proposed rule would not have a

significant economic impact on a substantial number of small entities.

A 30-day comment period is provided to allow interested persons to

respond to this proposal. All written comments received within the

comment period will be considered before a final determination is made

on this matter.

In accordance with section 8e of the Act, the United States Trade

Representative has concurred with the issuance of this 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

proposed to be 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 958.328 is amended by revising paragraph (a)(3)(ii) to

read as follows:

Sec. 958.328 Handling Regulation.

* * * * *

(a) * * *

(3) * * *

(ii) U.S. No. 1, 1\3/4\ inches minimum to 2\3/4\ maximum diameter;

or

* * * * *

Dated: April 30, 1996.

Robert C. Keeney,

Director, Fruit and Vegetable Division.

[FR Doc. 96-11154 Filed 5-3-96; 8:45 am]

BILLING CODE 3410-02-P