Vidalia Onions Grown in Georgia; Fiscal Period Change

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 955

[Docket No. FV99-955-1 IFR]

Vidalia Onions Grown in Georgia; Fiscal Period Change

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

-----------------------------------------------------------------------

SUMMARY: This rule changes the fiscal period under the Vidalia onion

marketing order (order) to January 1-December 31 from September 16-

September 15. It also extends the current fiscal period which began

September 16, 1998, through December 31, 1999. The order is

administered locally by the Vidalia Onion Committee (Committee), which

recommends its program expenses on a fiscal period basis. An assessment

rate, levied on fresh Vidalia onion shipments, is established to pay

those expenses. When the current fiscal period was established, it

coincided with the Vidalia onion marketing season which ran from April

through June. Due largely to the use of Controlled Atmosphere (CA)

storage, Vidalia onions are now shipped through the fall. This action

will make the fiscal period consistent with the current marketing

season.

DATES: Effective September 7, 1999; comments received by November 2,

1999 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, PO Box 96456,

Washington, DC 20090-6456; Fax: (202) 720-5698; or E-mail:

[email protected]. 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: William G. Pimental, Southeast

Marketing Field Office, F&V, AMS, USDA, PO 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, PO Box 96456,

Washington, DC 20090-6456; telephone: (202) 720-2491, Fax: (202) 720-

5698.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing

Agreement and Order No. 955 (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. This rule is not intended to have retroactive effect.

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. 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 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.

Section 955.40 of the order provides authority for the Committee to

incur expenses that are reasonable and necessary to operate the

program. The order also provides that these expenses be paid by

assessments levied on fresh shipments of Vidalia onions. The Committee

prepares an annual budget of expenses on a fiscal year basis. Section

955.13 of the order defines ``fiscal period'' to mean September 16

through September 15 of the following year, or such other period that

may be recommended by the Committee and approved by the Secretary.

This rule changes the fiscal period to January 1 through December

31, making it consistent with the current Vidalia onion marketing

season. It also extends the 1998-99 fiscal period, currently September

16, 1998 through September 15, 1999, through December 31, 1999. These

changes were unanimously recommended by the Committee at its November

19, 1998, meeting.

When the order was first issued in 1989, the harvesting and

marketing season for Vidalia onions ran from April through June. The

September 16 through September 15 fiscal period thus covered the entire

marketing season and was appropriate for budget planning purposes. Over

the past decade, changes in the industry have extended the marketing

season. In particular, the adoption of Controlled Atmosphere (CA)

storage by three-fourths of the handlers has allowed them to

economically store Vidalia onions through December. While there are

some added storage costs and losses due to shrinkage, these costs are

more than offset by prices received for Vidalia onions during the

holiday season (November and December).

The Committee's current annual budget is $373,577, and the

assessment rate is set at 7 cents per 50-pound bag. Major expenses

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

$135,127 for administrative expenses, and $31,850 for compliance. It is

appropriate that the Committee plan and finance its activities

consistent with the Vidalia onion marketing season.

The Committee will begin operating under the revised fiscal period

on January 1, 2000. Therefore, this rule also extends the current

fiscal period

[[Page 48244]]

through December 31, 1999. This will provide for continuous operation

of the program. The Committee will revise its current budget of

expenses to cover the 3\1/2\ months being added to the current fiscal

period.

The fiscal period change is designed to improve the functioning and

operation of the program. The majority of handlers maintain their

business records on a calendar year basis. Therefore, this rule will

better reflect current industry practices.

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. 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 approximately 86 handlers of Vidalia onions who are

subject to regulation under the order and approximately 133 Vidalia

onion producers in the regulated area. Small agricultural service firms

have been defined by the Small Business Administration (SBA) (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.

During the 1996-97 fiscal year, about 14 percent of the handlers

shipped about 2,771,000 50-pound bags of Vidalia onions, for an average

of about 197,930 bags. The remaining 86 percent of the handlers shipped

about 1,262,940 bags, for an average of about 14,685 bags. Using an

average f.o.b. price of $12.80 per bag, the majority of handlers could

be considered small businesses under SBA's definition. Likewise, the

majority of Vidalia onion growers may be classified as small

businesses.

Section 955.40 of the order provides authority for the Committee to

incur expenses that are reasonable and necessary to operate the

program. The order also provides that these expenses be paid by

assessments levied on fresh shipments of Vidalia onions. The Committee

prepares an annual budget of expenses on a fiscal year basis. Section

955.13 of the order defines ``fiscal period'' to mean September 16

through September 15 of the following year, or such other period that

may be recommended by the Committee and approved by the Secretary.

This rule changes the fiscal period to January 1 through December

31, making it consistent with the current Vidalia onion marketing

season. It also extends the 1998-99 fiscal period, currently September

16, 1998, through September 15, 1999, through December 31, 1999. These

changes were unanimously recommended by the Committee at its November

19, 1998, meeting.

When the order was first issued in 1989, the harvesting and

marketing season for Vidalia onions ran from April through June. The

September 16 through September 15 fiscal period thus covered the entire

marketing season and was appropriate for budget and planning purposes.

Over the past decade, changes in the industry have extended the

marketing season. In particular, the adoption of Controlled Atmosphere

(CA) storage by three-fourths of the handlers has allowed them to

economically store Vidalia onions through December. While there are

some added storage costs and losses due to shrinkage, these costs are

more than offset by prices received for Vidalia onions during the

holiday season (November and December).

The Committee's current annual budget is $373,577, and the

assessment rate is set at 7 cents per 50-pound bag. Major expenses

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

$135,127 for administrative expenses, and $31,850 for compliance. It is

appropriate that the Committee plan and finance its activities

consistent with the Vidalia onion marketing season.

The Committee will begin operating under the revised fiscal period

on January 1, 2000. Therefore, this rule also extends the current

fiscal period through December 31, 1999. This will provide for

continuous operation of the program. The Committee will revise its

current budget of expenses to cover the 3\1/2\ months being added to

the current fiscal period.

This rule is a change to Committee operations which would not

impose any new requirements on Vidalia onion handlers. It could, on the

other hand, simplify handler operations by putting the program fiscal

period on the same basis as handlers' internal reporting and

recordkeeping procedures.

The Committee discussed the alternative of leaving the fiscal

period as it presently exists, but unanimously concluded that this

change would improve program operations.

This rule will not impose any 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 sectors. In addition, the Department

has not identified any relevant Federal rules that duplicate, overlap

or conflict with this rule.

Further, 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. Like all

Committee meetings, the November 19, 1998, meeting was a public meeting

and all entities, both large and small, were able to express their

views on this issue. The Committee itself is composed of nine members:

eight producers and one public member.

Finally, interested persons are invited to submit information on

the regulatory and informational impacts of this action on small

businesses.

Small businesses may request information on compliance with this

regulation, or obtain a guide on complying with fruit, vegetable, and

specialty crop marketing agreements and orders by contacting Jay

Guerber, Marketing Order Administration Branch, Fruit and Vegetable

Programs, AMS, USDA, room 2525-S, PO Box 96456, Washington, DC 20090-

6456; telephone: (202) 720-2491, Fax: (202) 720-5698, or E-mail:

Jay.G[email protected]. You may view the marketing agreement and order

small business compliance guide at the following web site: http://

www.ams.usda.gov/fv/moab.html.

This rule invites comments on these changes to the fiscal period

currently prescribed under the order. Any comments received will be

considered prior to finalization of this rule.

After consideration of all relevant material presented, including

the Committee's recommendation, and other information, it is 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 ends on September 15, 1999, and

this action is needed to be taken as soon as possible to assure

continuity in

[[Page 48245]]

Committee operations; (2) handlers are aware of this action which was

unanimously recommended by the Committee at a public meeting; and (3)

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. A new Subpart--Rules and Regulations is added preceding

Sec. 955.101 to read as follows:

Subpart--Rules and Regulations

3. A new Sec. 955.113 is added to read as follows:

Sec. 955.113 Fiscal period.

Pursuant to Sec. 955.13, fiscal period shall mean the period

beginning January 1 and ending December 31 of each year, except that

the fiscal period that began on September 16, 1998, shall end on

December 31, 1999.

Dated: August 30, 1999.

Robert C. Keeney

Deputy Administrator, Fruit and Vegetable Programs.

[FR Doc. 99-23012 Filed 9-2-99; 8:45 am]

BILLING CODE 3410-02-P