Vidalia Onions Grown in Georgia; Decreased Assessment Rate

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 955

[Docket No. FV98-955-1 IFR]

Vidalia Onions Grown in Georgia; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule decreases the assessment rate from $0.10 to $0.07

per 50-pound bag or equivalent of Vidalia onions established for the

Vidalia Onion Committee (Committee) under Marketing Order No. 955 for

the 1998-99 and subsequent fiscal periods. The Committee is responsible

for local administration of the marketing order which regulates the

handling of Vidalia onions grown in Georgia. Authorization to assess

Vidalia onion handlers enables the Committee to incur expenses that are

reasonable and necessary to administer the program. The fiscal period

began September 16 and ends September 15. The assessment rate will

remain in effect indefinitely unless modified, suspended, or

terminated.

DATES: Effective: September 28, 1998. Comments received by November 24,

1998, will be considered prior to issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments

concerning this rule. Comments must be sent to the Docket Clerk, Fruit

and Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box 96456,

Washington, DC 20090-6456; Fax: (202) 205-6632; or E-mail:

[email protected]. Comments should reference the docket number

and the date and page number of this issue of the Federal Register and

will be available for public inspection in the Office of the Docket

Clerk during regular business hours.

FOR FURTHER INFORMATION CONTACT: Doris Jamieson, Southeast Marketing

Field Office, Fruit and Vegetable Programs, AMS, USDA, P.O. Box 2276,

Winter Haven, FL 33883-2276; telephone: (941) 299-4770, Fax: (941) 299-

5169; or George Kelhart, Technical Advisor, Marketing Order

Administration Branch, Fruit and Vegetable Programs, AMS, USDA, room

2525-S, P.O. Box 96456, Washington, DC 20090-6456; telephone: (202)

720-2491, Fax: (202) 205-6632. Small businesses may request information

on compliance with this regulation by contacting Jay Guerber, Marketing

Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA,

room 2525-S, P.O. Box 96456, Washington, DC 20090-6456; telephone:

(202) 720-2491, Fax: (202) 205-6632.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing

Agreement and Order No. 955, both as amended (7 CFR part 955),

regulating the handling of Vidalia onions grown in Georgia, hereinafter

referred to as the ``order.'' The marketing agreement and 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.''

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

conformance with Executive Order 12866.

This rule has been reviewed under Executive Order 12988, Civil

Justice Reform. Under the marketing order now in effect, Vidalia onion

handlers are subject to assessments. Funds to administer the order are

derived from such assessments. It is intended that the assessment rate

as issued herein will be applicable to all assessable Vidalia onions

beginning September 16, 1998, and continue until amended, suspended, or

terminated. This 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. Such 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 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.

This rule deceases the assessment rate established for the

Committee for the 1998-99 and subsequent fiscal periods from $0.10 to

$0.07 per 50-pound bag or equivalent of Vidalia onions.

The Vidalia onion marketing order provides authority for the

Committee, with the approval of the Department, to formulate an annual

budget of expenses and collect assessments from handlers to administer

the program. The members of the Committee are producers and handlers of

Vidalia onions. They are familiar with the Committee's needs and with

the costs for goods and services in their local area and are thus in a

position to formulate an appropriate budget and assessment rate. The

assessment rate is formulated and discussed in a public meeting. Thus,

all directly affected persons have an opportunity to participate and

provide input.

For the 1996-97 and subsequent fiscal periods, the Committee

recommended, and the Department approved, an assessment rate that would

continue in effect from fiscal period to fiscal period unless modified,

suspended, or terminated by the Secretary upon recommendation and

information submitted by the Committee or other information available

to the Secretary.

The Committee met on July 28, 1998, and unanimously recommended

1998-99 expenditures of $373,577 and an assessment rate of $0.07 per

50-pound bag or equivalent of Vidalia onions. In comparison, last

year's budgeted expenditures were $429,800. The assessment rate of

$0.07 is $0.03 lower than the rate currently in effect. For the past

two seasons, the Committee has elected to refund excess funds to the

handlers to reduce their costs. The Committee unanimously elected to

reduce the assessment rate rather than

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continue the practice of refunding excess funds.

The major expenditures recommended by the Committee for the 1998-99

fiscal period include $131,600 for marketing and promotion, $75,000 for

research, $135,127 for program administration, and $31,850 for

compliance. Budgeted expenses for these items in 1997-98 were $158,000,

$108,300, $137,500, and $26,000, respectively.

The assessment rate recommended by the Committee was derived by

dividing anticipated expenses by expected shipments of Vidalia onions.

Vidalia onion shipments for 1998-99 are estimated at 3,300,000 50-pound

bags or equivalents for the year, 15,000 50-pound bags or equivalents

of green Vidalias, 1,385,000 50-pound bags or equivalents of storage

Vidalias, and 100,000 50-pound bags or equivalents of storage onions

from the previous season, which should provide $336,000 in assessment

income. Income derived from handler assessments, along with interest

income and funds from the Committee's authorized reserve, will be

adequate to cover budgeted expenses. Funds in the reserve (currently

$174,073) will be kept within the maximum permitted by the order

(approximately three fiscal periods' budgeted expenses; Sec. 955.44).

The assessment rate established in this rule will continue in

effect indefinitely unless modified, suspended, or terminated by the

Secretary upon recommendation and information submitted by the

Committee or other available information.

Although this assessment rate is effective for an indefinite

period, the Committee will continue to meet prior to or during each

fiscal period to recommend a budget of expenses and consider

recommendations for modification of the assessment rate. The dates and

times of Committee meetings are available from the Committee or the

Department. Committee meetings are open to the public and interested

persons may express their views at these meetings. The Department will

evaluate Committee recommendations and other available information to

determine whether modification of the assessment rate is needed.

Further rulemaking will be undertaken as necessary. The Committee's

1998-99 budget and those for subsequent fiscal periods will be reviewed

and, as appropriate, approved by the Department.

Pursuant to requirements set forth in the Regulatory Flexibility

Act (RFA), the Agricultural Marketing Service (AMS) has considered the

economic impact of this rule on small entities. Accordingly, AMS has

prepared this initial 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 the 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 currently approximately 136 producers of Vidalia onions

in the production area and approximately 101 handlers subject to

regulation under the marketing order. Small agricultural producers have

been defined by the Small Business Administration (13 CFR 121.601) as

those having annual receipts less than $500,000, and small agricultural

service firms are defined as those whose annual receipts are less than

$5,000,000.

During the 1996-97 fiscal year, as a percentage, approximately 14

percent of the handlers shipped approximately 2,771,000 50-pound bags

or equivalents of Vidalia onions and approximately 86 percent of the

handlers shipped approximately 1,262,940 50-pound bags or equivalents.

Using an average f.o.b. price of $12.80 per 50-pound bag or equivalent,

the majority of handlers could be considered small businesses under

SBA's definition. The majority of handlers and producers of Vidalia

onions may be classified as small entities.

This rule decreases the assessment rate established for the

Committee and collected from handlers for the 1998-99 and subsequent

fiscal periods from $0.10 to $0.07 per 50-pound bag or equivalent of

Vidalia onions. The Committee unanimously recommended 1998-99

expenditures of $373,577 and an assessment rate of $0.07 per 50-pound

bag or equivalent. The assessment rate of $0.07 is $0.03 lower than the

1997-98 rate. The quantity of assessable Vidalia onions for the 1998-99

season is estimated at 4,800,000 50-pound bags or equivalents. Thus,

the $0.07 rate should provide $336,000 in assessment income. Income

derived from handler assessments, along with interest income and funds

from the Committee's authorized reserve, will be adequate to cover

budgeted expenses. Funds in the reserve (currently $174,073) will be

kept within the maximum permitted by the order (approximately three

fiscal periods' budgeted expenses; Sec. 955.44).

The major expenditures recommended by the Committee for the 1998-99

year include $131,600 for marketing and promotion, $75,000 for

research, $135,127 for program administration, and $31,850 for

compliance. Budgeted expenses for these items in 1997-98 were $158,000,

$108,300, $137,500, and $26,000, respectively.

For the past two seasons, the Committee has refunded excess funds

to the handlers to reduce their costs. The Committee unanimously

elected to reduce the assessment rate rather than continue the practice

of refunding excess funds.

The Committee reviewed and unanimously recommended 1998-99

expenditures of $373,577 which included decreases in marketing and

promotion and research. Prior to arriving at this budget, the Committee

considered information from various sources, such as the Committee's

Budget Subcommittee. Alternative expenditure levels were discussed by

these groups, based upon the relative value of various research

projects to the Vidalia onion industry. The assessment rate of $0.07

per 50-pound bag or equivalent of assessable Vidalia onions was then

determined by dividing the total recommended budget by the quantity of

assessable Vidalia onions, estimated at 4,800,000 50-pound bags or

equivalents for the 1998-99 season. This is approximately $37,577 below

the anticipated expenses, which the Committee determined to be

acceptable. The difference between assessment income and budgeted

expenses will be covered by income from interest and the Committee's

authorized reserve.

A review of historical information and preliminary information

pertaining to the upcoming fiscal period indicates that the f.o.b.

price for the 1998-99 season could range between $12.80 and $15.25 per

50-pound bag or equivalent of Vidalia onions. Therefore, the estimated

assessment revenue for the 1998-99 fiscal period as a percentage of

total handler revenue could range between .46 and .55 percent.

This action decreases the assessment obligation imposed on

handlers. Assessments are applied uniformly on all handlers, and some

of the costs may be passed on to producers. However, decreasing the

assessment rate reduces the burden on handlers, and may reduce the

burden on producers. In addition, the Committee's meeting was widely

publicized throughout the Vidalia onion industry and all interested

persons were invited to attend the meeting and participate in Committee

deliberations on all issues. Like all Committee

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meetings, the July 28, 1998, meeting was a public meeting and all

entities, both large and small, were able to express views on this

issue. Finally, interested persons are invited to submit information on

the regulatory and informational impacts of this action on small

businesses.

This action imposes no additional reporting or recordkeeping

requirements on either small or large Vidalia 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.

The Department has not identified any relevant Federal rules that

duplicate, overlap, or conflict with this rule.

After consideration of all relevant material 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.

Pursuant to 5 U.S.C. 553, it is also found and determined upon good

cause that it is impracticable, unnecessary, and contrary to the public

interest to give preliminary notice prior to putting this rule into

effect, and that good cause exists for not postponing the effective

date of this rule until 30 days after publication in the Federal

Register because: (1) The 1998-99 fiscal period begins on September 16,

1998, and the marketing order requires that the rate of assessment for

each fiscal period apply to all assessable Vidalia onions handled

during such fiscal period; (2) this action decreases the assessment

rate for assessable Vidalia onions beginning with the 1998-99 and

subsequent fiscal periods; (3) handlers are aware of this action which

was unanimously recommended by the Committee at a public meeting and is

similar to other assessment rate actions issued in past years; and (4)

this interim final rule provides a 60-day comment period, and all

comments timely received will be considered prior to finalization of

this rule.

List of Subjects in 7 CFR Part 955

Marketing agreements, Onions, Reporting and recordkeeping

requirements.

For the reasons set forth in the preamble, 7 CFR part 955 is

amended as follows:

PART 955--VIDALIA ONIONS GROWN IN GEORGIA

1. The authority citation for 7 CFR part 955 continues to read as

follows:

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

2. Section 955.209 is revised to read as follows:

Sec. 955.209 Assessment rate.

On and after September 16, 1998, an assessment rate of $0.07 per

50-pound bag or equivalent is established for Vidalia onions.

Dated: September 21, 1998.

Robert C. Keeney,

Deputy Administrator, Fruit and Vegetable Programs.

[FR Doc. 98-25719 Filed 9-24-98; 8:45 am]

BILLING CODE 3410-02-U