[Federal Register: April 18, 2008 (Volume 73, Number 76)]
[Rules and Regulations]
[Page 21023-21026]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18ap08-2]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 959
[Docket No. AMS-FV-07-0151; FV08-959-1 FR]
Onions Grown in South Texas; Increased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: This rule increases the assessment rate established for the
South Texas Onion Committee (Committee) for the 2007-08 and subsequent
fiscal periods from $0.02 to $0.03 per 50-pound equivalent of onions
handled. The Committee locally administers the marketing order which
regulates the handling of onions grown in South Texas. Assessments upon
onion handlers are used by the Committee to fund reasonable and
necessary expenses of the program. The fiscal period begins August 1
and ends July 31. The assessment rate will remain
[[Page 21024]]
in effect indefinitely unless modified, suspended, or terminated.
DATES: Effective Date: April 21, 2008.
FOR FURTHER INFORMATION CONTACT: Belinda G. Garza, Regional Manager,
Texas Marketing Field Office, Marketing Order Administration Branch,
Fruit and Vegetable Programs, AMS, USDA; Telephone: (956) 682-2833,
Fax: (956) 682-5942, or E-mail: Belinda.Garza@usda.gov.
Small businesses may request information on complying with this
regulation by contacting Jay Guerber, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence
Avenue, SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202)
720-2491, Fax: (202) 720-8938, or E-mail: Jay.Guerber@usda.gov.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order
No. 959, as amended (7 CFR part 959), regulating the handling of onions
grown in South Texas, hereinafter referred to as the ``order.'' The
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 (USDA) 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, South Texas
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
onions beginning on August 1, 2007, 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 USDA 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, USDA 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 USDA'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 increases the assessment rate established for the
Committee for the 2007-08 and subsequent fiscal periods from $0.02 to
$0.03 per 50-pound equivalent of onions handled.
The South Texas onion marketing order provides authority for the
Committee, with the approval of USDA, 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
South Texas 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 2004-05 and subsequent fiscal periods, the Committee
recommended, and USDA approved, an assessment rate that would continue
in effect from fiscal period to fiscal period unless modified,
suspended, or terminated by USDA upon recommendation and information
submitted by the Committee or other information available to USDA.
The Committee met on November 16, 2007, and unanimously recommended
2007-08 expenditures of $202,315 and an assessment rate of $0.03 per
50-pound equivalent of onions. In comparison, last year's budgeted
expenditures were $193,315. The assessment rate of $0.03 is $0.01
higher than the rate currently in effect. The Committee recommended the
increased rate to continue to support the increased budget for research
started last season, while reducing the amount of funds drawn from the
Committee's authorized reserve. Without the increase, the Committee's
reserve funds would drop to $114,728. The Committee believes a reserve
that low is not adequate for its operations.
The major expenditures recommended by the Committee for the 2007-08
fiscal period include $64,315 for personnel and office expenses,
$45,000 for compliance, $25,000 for promotion, and $30,000 for
research. Budgeted expenses for these items in 2006-07 were $62,315,
$43,000, $25,000, and $25,000, respectively.
The assessment rate recommended by the Committee was derived by
dividing anticipated expenses by expected shipments of South Texas
onions. Onion shipments for the fiscal period are estimated at
5,775,000 fifty-pound equivalents, which should provide $173,250 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
$196,543) will be kept within the maximum permitted by the order
(approximately two fiscal periods' expenses, Sec. 959.43).
The assessment rate established in this rule will continue in
effect indefinitely unless modified, suspended, or terminated by USDA
upon recommendation and information submitted by the Committee or other
available information.
Although this assessment rate will be in effect 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 USDA.
Committee meetings are open to the public and interested persons may
express their views at these meetings. USDA 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 2007-08 budget and those
for subsequent fiscal periods will be reviewed and, as appropriate,
approved by USDA.
Final Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Act (5 U.S.C. 601-612) (RFA), the Agricultural Marketing Service (AMS)
has considered the economic impact of this rule 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.
There are approximately 118 producers of onions in the production
area and approximately 34 handlers subject to regulation under the
marketing order. Small agricultural producers are defined by the Small
[[Page 21025]]
Business Administration (SBA) (13 CFR 121.201) as those having annual
receipts less than $750,000, and small agricultural service firms are
defined as those whose annual receipts are less than $6,500,000.
Most of the handlers are vertically integrated corporations
involved in producing, shipping, and marketing onions. For the 2006-07
marketing year, the industry's 34 handlers shipped onions produced on
12,460 acres with the average and median volume handled being 179,457
and 171,537 fifty-pound equivalents, respectively. In terms of
production value, total revenues for the 34 handlers were estimated to
be $86.7 million, with average and median revenues being $2.55 million
and $2.35 million, respectively.
The South Texas onion industry is characterized by producers and
handlers whose farming operations generally involve more than one
commodity, and whose income from farming operations is not exclusively
dependent on the production of onions. Alternative crops provide an
opportunity to utilize many of the same facilities and equipment not in
use when the onion production season is complete. For this reason,
typical onion producers and handlers either produce multiple crops or
alternate crops within a single year.
Based on the SBA's definition of small entities, the Committee
estimates that 32 of the 34 (94 percent) handlers regulated by the
order would be considered small entities if only their spring onion
revenues are considered. However, revenues from other productive
enterprises would likely push a large number of these handlers above
the $6,500,000 annual receipt threshold. All of the 118 producers may
be classified as small entities based on the SBA definition if only
their revenue from spring onions is considered. When revenues from all
sources are considered, a majority of the producers would not be
considered small entities because receipts would exceed $750,000.
This rule increases the assessment rate established for the
Committee and collected from handlers for the 2007-08 and subsequent
fiscal periods from $0.02 to $0.03 per 50-pound equivalent. The
Committee unanimously recommended 2007-08 expenditures of $202,315 and
an assessment rate of $0.03 per 50-pound equivalent. The assessment
rate of $0.03 is $0.01 higher than the current rate. The quantity of
assessable onions for the 2007-08 fiscal period is estimated at
5,775,000 fifty-pound equivalents. Thus, the $0.03 rate should provide
$173,250 in assessment income. Income derived from handler assessments,
along with interest income and funds from the Committee's authorized
reserve, will be more than adequate to cover budgeted expenses.
The major expenditures recommended by the Committee for the 2007-08
fiscal period include $64,315 for personnel and office expenses,
$45,000 for compliance, $25,000 for promotion, and $30,000 for
research. Budgeted expenses for these items in 2006-07 were $62,315,
$43,000, $25,000, and $25,000, respectively.
The Committee recommended the increased rate to continue funding a
research project begun last year without having to draw a large amount
from reserves. Without the increase, the Committee's reserve funds
would drop to $114,728. The Committee believes a reserve that low is
not adequate for its operations.
The Committee reviewed and unanimously recommended 2007-08
expenditures of $202,315, which included increases in the management
fee, compliance, and research. Numerous alternative expenditure levels
were discussed based upon the relative value of the research project to
the onion industry. The assessment rate of $0.03 per 50-pound
equivalent of assessable onions was then determined by dividing the
total recommended budget by the quantity of assessable onions,
estimated at 5,775,000 fifty-pound equivalents for the 2007-08 fiscal
period. The assessment rate should generate $173,250 in income.
Considering income from interest and assessments, total income will be
approximately $24,065 below the anticipated expenses, which the
Committee determined to be acceptable.
A review of historical information and preliminary information
pertaining to the upcoming fiscal period indicates that the grower
price for the 2007-08 fiscal period could range between $10.00 and
$28.00 per 50-pound equivalent of onions. Therefore, the estimated
assessment revenue for the 2007-08 fiscal period as a percentage of
total grower revenue could range between .11 and .30 percent.
This action increases the assessment obligation imposed on
handlers. While assessments impose some additional costs on handlers,
the costs are minimal and uniform on all handlers. Some of the
additional costs may be passed on to producers. However, these costs
are offset by the benefits derived by the operation of the marketing
order. In addition, the Committee's meeting was widely publicized
throughout the South Texas onion industry and all interested persons
were invited to attend the meeting and participate in Committee
deliberations on all issues. Like all Committee meetings, the November
16, 2007, meeting was a public meeting and all entities, both large and
small, were able to express views on this issue.
This rule imposes no additional reporting or recordkeeping
requirements on either small or large South Texas 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.
AMS is committed to complying with the E-Government Act, to promote
the use of the Internet and other information technologies to provide
increased opportunities for citizen access to Government information
and services, and for other purposes.
USDA has not identified any relevant Federal rules that duplicate,
overlap, or conflict with this rule.
A proposed rule concerning this action was published in the Federal
Register on February 29, 2008 (73 FR 11060). Committee staff mailed
copies of the proposed rule to all South Texas onion handlers and
producers. In addition, the proposal was made available through the
Internet by USDA and the Office of the Federal Register. A 15-day
comment period ending March 17, 2008, was provided for interested
persons to respond to the proposal. Two comments were received. One
supported the proposed increase and one opposed the proposal.
The commenter in support of the assessment rate increase stated
that the proposed increase is very modest in light of constantly
increasing costs. The commenter noted that planted South Texas onion
acreage remains volatile, but has shown an overall decline, which
further impacts on the Committee's revenues.
The commenter opposing the increase did not state the reason why he
was not in favor of the increase, only that it should remain the same.
However, we believe that the assessment increase, as recommended by the
Committee, is reasonable and necessary.
Accordingly, no changes will be made to the rule as proposed.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at: http:/
/www.ams.usda.gov/fv/moab.html. Any questions about the compliance
guide should be sent to Jay Guerber at the previously mentioned address
in the FOR FURTHER INFORMATION CONTACT section.
After consideration of all relevant material presented, including
the
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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 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 the 2007-08
fiscal period began on August 1, 2007, and the marketing order requires
that the rate of assessment for each fiscal period apply to all onions
handled during such fiscal period. In addition, the Committee needs to
have sufficient funds to pay its expenses which are incurred on a
continuous basis. Further, handlers are aware of this action which was
unanimously recommended at a public meeting and is similar to other
assessment rate actions issued in past fiscal periods. Also, a 15-day
comment period was provided for in the proposed rule.
List of Subjects in 7 CFR Part 959
Marketing agreements, Onions, Reporting and recordkeeping
requirements.
0
For the reasons set forth in the preamble, 7 CFR part 959 is amended as
follows:
PART 959--ONIONS GROWN IN SOUTH TEXAS
0
1. The authority citation for 7 CFR part 959 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
0
2. Section 959.237 is revised to read as follows:
Sec. 959.237 Assessment rate.
On and after August 1, 2007, an assessment rate of $0.03 per 50-
pound equivalent is established for South Texas onions.
Dated: April 15, 2008.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 08-1149 Filed 4-15-08; 12:13 pm]
BILLING CODE 3410-02-P