Onions Grown in South Texas; Change in Regulatory Period

SUMMARY: This final rule changes the end of the regulatory period for

onions grown in South Texas under Marketing Order 959 from June 15 to

June 4 of each year. Terminating the handling regulation on June 4 will

relieve restrictions on handlers who ship late season onions and help

them become more competitive with handlers from non-marketing order

areas without diminishing South Texas marketing order objectives. A

corresponding change in the dates for the import regulation also will

be made in a second document. This final rule also includes a

conforming change recognizing that the onions previously defined as

``Extra large'' are now defined as ``Colossal'' under the U.S. grade

standards for onions.

EFFECTIVE DATE: June 4, 1996.

FOR FURTHER INFORMATION CONTACT: Belinda G. Garza, Marketing Order

Administration Branch, F&V, AMS, USDA, 1313 E. Hackberry, McAllen, TX

78501; telephone: 210-682-2833; FAX 210-682-5942; or Robert F.

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; FAX 202-720-5698.

SUPPLEMENTARY INFORMATION: This final rule 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 Act 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 final rule has been reviewed under Executive Order 12778,

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

effect. This final 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 will 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 the Secretary's

ruling on the petition, provided an action is filed not later than 20

days after the date of the entry of the ruling.

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.

There are 35 handlers of South Texas onions who are subject to

regulation under the marketing order and 89 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 $5,000,000, 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 a public meeting on November 8, 1994, the South Texas Onion

Committee (committee) unanimously recommended, under the authority of

Sec. 959.52(c) of the order, changing the termination date of the

regulatory period for all varieties of regulated onions from June 15 to

June 4. Currently, order regulations are in effect from March 1 through

June 15 each year. The early and mid-season crop is produced in the

Lower Rio Grande Valley (District 1), which generally accounts for

about 80 percent of the total. The remaining crop, generally 20

percent, is produced in the Laredo-Winter Garden area of South Texas

(District 2). These are the last regulated shipments to leave the

production area each season.

In April 1994, based on a committee recommendation, the regulatory

period was extended from May 20 to June 15 (59 FR 17265; April 12,

1994). At that time, the committee believed that the application of

quality control requirements over a longer time was necessary to

enhance the South Texas onion industry's market research and promotion

efforts, and protect its quality image. The committee also believed

that District 2 handlers should pay assessments on more of their

shipments for the research and promotion programs that benefit the

entire industry.

After one season's experience, District 2 growers and handlers

requested the committee to reconsider the regulatory extension.

Shipments made from District 2 compete with onions produced in West

Texas and other areas of the United States not regulated under Federal

marketing orders. Onion prices are usually quite low during this period

and unregulated areas have a competitive advantage over District 2

because inspection costs for quality control purposes and

administrative assessments are not incurred by shippers from these

areas. Ending regulations on June 4, rather than June

[[Page 24878]]

15, will relieve restrictions on District 2 shippers and help them

become more competitive with shippers from these production areas

without diminishing program objectives.

Section 8e provides that whenever certain specified commodities,

including onions, are regulated under a Federal marketing order,

imports of that commodity must meet the same or comparable grade, size,

quality, and maturity requirements as those in effect for the

domestically produced commodity, subject to concurrence by the United

States Trade Representative. The Act further provides that when two or

more marketing orders covering the same commodity are concurrently in

effect, imports will be subject to the requirements established for the

commodity grown in the area with which the imported commodity is in

most direct competition. Because this rule changes the regulatory

period under the South Texas onion marketing order, corresponding

changes will be needed in the onion import regulations. Such changes

are addressed in a separate onion import rule.

The proposed rule concerning this action was published in the

February 20, 1996, Federal Register (61 FR 6328), with a 30-day comment

period ending March 21, 1996. One comment was received in opposition to

the proposed rule from a packer. The commenter stated that both South

Texas and Idaho-Eastern Oregon successfully compete with onion

producing areas that are not regulated. He further stated that he

believed that the order was necessary to improve quality and thus make

the production area a stronger competitor in the onion industry. The

committee contends that this competition tends to bring about low

prices to the late producing areas, and sometimes the addition of an

administrative assessment and inspection fee may leave the shipper of

late season South Texas onions at a competitive disadvantage. Thus, the

committee believes that removing inspection and assessment requirements

for a very short period will help shippers of late onions meet the

competition from production areas outside of South Texas without

diminishing program objectives.

After thoroughly analyzing the comment received and other available

information, the Department has concluded that ending the regulatory

period on June 4, rather than June 15, as recommended by the committee

will reduce the regulatory burden on late season shippers and help them

compete more effectively with shippers from unregulated areas in the

United States without adversely affecting the overall objectives of the

marketing order. As mentioned earlier, onion prices are usually quite

low late in the season and unregulated areas have a competitive

advantage over the late season shippers from South Texas because

inspection costs for quality control purposes and administrative

assessments are not incurred by shippers from many of these areas.

This final rule also changes the name of the largest size

classification of onions under the handling regulation (7 CFR

959.322(b)(5)) from ``Extra large'' to ``Colossal'' to bring that

designation into conformity with the designation used in the U.S.

Standards for Grades of Bermuda-Granex-Grano Type Onions (7 CFR

51.3195-51.3209), and the U.S. Standards for Grades of Onions (Other

Than Bermuda-Granex-Grano and Creole Types) (7 CFR 51.2830-51.2854).

The standards were revised effective October 10, 1995 (60 FR 46976).

One of the revisions was the addition of a new size classification

called ``Colossal'' for onions 3\3/4\ inches or larger in diameter. A

conforming change failed to be made in the handling regulations and

onions of this size continued to be referred to as ``Extra large'' in

paragraph (b)(5) of section 959.322. Hence, this term should be changed

to ``Colossal'' to bring the handling regulation into conformity with

the standards. The committee recommended this minor conforming change.

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

Representative has concurred with the issuance of this final rule.

Based on the above, the AMS has determined that this action will

not have a significant economic impact on a substantial number of small

entities.

After consideration of all relevant matter presented, including the

information and recommendations submitted by the commenter, 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 is further found that good cause exists

for not postponing the effective date of this action until 30 days

after publication in the Federal Register because: (1) This regulation

relaxes restrictions on South Texas onion handlers by ending

regulations on June 4 of each season rather than June 15 of each

season; (2) the shipping season for South Texas onions has already

begun and the committee would like this action effective for this

season; (3) changing the ending date of the handling regulation was

discussed at a public meeting, and all interested persons had an

opportunity to provide input; and (4) there are no additional

regulatory burdens imposed by this rule which require special

preparations of handlers.

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 hereby

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 text and paragraph (b)(5) are

revised to read as follows:

Sec. 959.322 Handling regulation.

During the period beginning March 1 and ending June 4, 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.

* * * * *

(b) * * *

(5) ``Colossal''--3\3/4\ inches or larger in diameter.

* * * * *

Dated: May 14, 1996.

Robert C. Keeney,

Director, Fruit and Vegetable Division.

[FR Doc. 96-12434 Filed 5-16-96; 8:45 am]

BILLING CODE 3410-02-P