Vidalia Onions Grown in Georgia; Fiscal Period Change

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 955

[Docket No. FV99-955-1 FIR]

Vidalia Onions Grown in Georgia; Fiscal Period Change

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (Department) is adopting, as a

final rule, without change, the provisions of an interim final rule

changing 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

former 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 continue to make the

fiscal period consistent with the current marketing season.

EFFECTIVE DATE: December 28, 1999.

FOR FURTHER INFORMATION CONTACT: William G. Pimental, Southeast

Marketing Field Office, F&V, 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) 720-

5698.

Small businesses may request information on complying with this

regulation by contacting Jay Guerber, Marketing Order Administration

Branch, Fruit and Vegetable Programs, AMS, USDA, P.O. Box 96456, room

2525-S, Washington, DC 20090-6456; telephone (202) 720-2491, Fax: (202)

720-5698, or E-mail: Jay.G[email protected].

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.

This rule continues in effect modifications to the language in the

order's administrative rules and regulations which changed the fiscal

period to January 1 through December 31, making it consistent with the

current Vidalia onion marketing season. It also continues to extend the

1998-99 fiscal period, formerly September 16, 1998, through September

15, 1999, through December 31, 1999. Therefore, this rule better

reflects current industry practice. These changes were unanimously

recommended by the Committee at its November 19, 1998, meeting.

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 and recommends an appropriate

assessment rate 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.

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

[[Page 72266]]

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 budget for 1998-99 (September 16-September 15) was

$373,577, and the assessment rate was set at 7 cents per 50-pound bag.

Major expenses included $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. This rule, therefore, also continues to extend the

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

continuous operation of the program. Based on the interim final rule,

the Committee increased its budgeted expenses from $373,577 to $475,577

to cover the 3\1/2\ months being added to the 1998-99 fiscal period.

Budgeted expenses for the major expenditures during 1998-99 (including

the 3\1/2\ month extension are $151,127 for administrative costs,

$37,850 for compliance activities, $161,600 for promotional activities,

and $125,000 for research projects.

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 final 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 91 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. The change in the number of handlers

from 86 listed in the interim final rule is based on more recent

Committee data.

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 and recommends an appropriate

assessment rate 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 continues in effect the action which changed the fiscal

period to January 1 through December 31, making it consistent with the

current Vidalia onion marketing season. It also continues to extend the

1998-99 fiscal period, formerly 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 1998-99 (September 16-September 15) budget was

$373,577, and the assessment rate was set at 7 cents per 50-pound bag.

Major expenses included $131,600 for marketing and promotion, $75,000

for research, $135,127 for administrative expenses, and $31,850 for

compliance. Budgeted expenses for these items (including the 3-1/2

month extension for 1998-99) are $151,127 for administrative costs,

$37,850 for compliance activities, $161,600 for promotional activities,

and $125,000 for research activities. 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. The interim final rule also extended the current

fiscal period through December 31, 1999.

This rule continues in effect the change in the fiscal period which

better reflects Committee and handler operations and 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 previously existed, 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.

An interim final rule concerning this action was published in the

Federal Register on September 3, 1999. Copies of the rule were mailed

by the Committee's staff to all Committee

[[Page 72267]]

members and Vidalia onion handlers. In addition, the rule was made

available through the Internet by the Office of the Federal Register.

That rule provided for a 60-day comment period which ended November 2,

1999. No comments were received during the comment period.

After consideration of all relevant material presented, including

the Committee's recommendation, and other information, it is found that

finalizing the interim final rule, without change, as published in the

Federal Register (64 FR 48243, September 3, 1999) will tend to

effectuate the declared policy of the Act.

Pursuant to 5 U.S.C. 553, it is also found and determined 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 which began on September 16, 1998, ends on

December 31, 1999; and (2) Handlers are aware of this action and the

interim final rule provided a 60-day comment period and no comments

were received.

List of Subjects in 7 CFR Part 955

Marketing agreements, Onions, Reporting and recordkeeping

requirements.

PART 955--VIDALIA ONIONS GROWN IN GEORGIA

Accordingly, the interim final rule amending 7 CFR part 955 which

was published at 64 FR 48243 on September 3, 1999, is adopted as a

final rule without change.

Dated: December 20, 1999.

James R. Frazier,

Acting Deputy Administrator, Fruit and Vegetable Programs.

[FR Doc. 99-33508 Filed 12-23-99; 8:45 am]

BILLING CODE 3410-02-P