This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

5933

Vol. 62, No. 27

Monday, February 10, 1997

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 956

[FV96–956–3 PR]

Sweet Onions Grown in the Walla

Walla Valley of Southeast Washington

and Northeast Oregon; Establishment

of Container Marking Requirements

and Special Purpose Shipment

Exemptions

AGENCY: Agricultural Marketing Service,

USDA.

ACTION: Proposed rule.

SUMMARY: This rule would establish

container marking requirements for all

shipments of Walla Walla Sweet

Onions, and establish exemptions from

assessment and container marking

requirements for certain special purpose

shipments of Walla Walla Sweet

Onions. This rule would contribute to

the efficient marketing of Walla Walla

Sweet Onions and assist in program

compliance. This rule was

recommended by the Walla Walla Sweet

Onion Committee (Committee), the

agency responsible for the local

administration of the marketing order

for sweet onions grown in the Walla

Walla Valley.

DATES: Comments must be received by

March 12, 1997.

ADDRESSES: Interested persons are

invited to submit written comments

concerning this proposal. Comments

must be sent in triplicate to the Docket

Clerk, Fruit and Vegetable Division,

AMS, USDA, room 2525–S, South

Building, P.O. Box 96456, Washington,

DC 20090–6456, Fax: (202) 720–5698.

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:

Robert J. Curry, Northwest Marketing

Field Office, Marketing Order

Administration Branch, Fruit and

Vegetable Division, AMS, USDA, 1220

SW Third Avenue, room 369, Portland,

Oregon 97204–2807; telephone: (503)

326–2043; or George J. Kelhart,

Marketing Order Administration

Branch, Fruit and Vegetable Division,

AMS, USDA, P.O. Box 96456, room

2525–S, Washington, DC 20090–6456;

telephone: (202) 690–3919. Small

businesses may request information on

compliance with this regulation by

contacting: Jay Guerber, Marketing

Order Administration Branch, Fruit and

Vegetable Division, AMS, USDA, P.O.

Box 96456, room 2525–S, Washington,

DC 20090–6456; telephone (202) 720–

2491; Fax (202) 720–5698.

SUPPLEMENTARY INFORMATION: This rule

is proposed under Marketing Agreement

and Order No. 956 (7 CFR Part 956),

regulating the handling of sweet onions

grown in the Walla Walla Valley of

southeast Washington and northeast

Oregon, hereinafter referred to as the

‘‘order.’’ This order is authorized by 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 proposed rule has been reviewed

under Executive Order 12988, Civil

Justice Reform. It is not intended to

have retroactive effect. If adopted, the

proposed rule would not preempt any

State or local laws, regulations, or

policies, unless they present an

irreconcilable conflict with the

proposal.

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 date of the entry

of the ruling.

The Committee meets regularly

throughout each season to consider

recommendations for implementation,

modification, suspension, or

termination of the regulatory

requirements for Walla Walla Sweet

Onions. Committee meetings are open to

the public and interested persons may

express their views at these meetings.

The Department reviews Committee

recommendations in conjunction with

information submitted by the

Committee and from other industry and

government sources.

The Committee met twice to

recommend adding container marking

requirements and exemption for special

purpose shipments to the marketing

order’s Subpart—Rules and Regulations

provisions which are authorized in the

order. Section 956.62 provides authority

for the Committee, with the approval of

the Secretary, to establish a method for

fixing the markings of containers used

in the packaging or handling of Walla

Walla Sweet Onions. Further, based

upon recommendations submitted by

the Committee, section 956.63 provides

authority for the Secretary to issue

regulations in regard to assessment and

container marking requirements to

facilitate the handling of Walla Walla

Sweet Onions for specified purposes.

The Committee met October 8, 1996,

and recommended that all Walla Walla

Sweet Onions produced in the

production area and shipped to the

fresh market be packed in containers

marked with the ‘‘Genuine Walla Walla

Sweet Onion’’ logo. The Committee also

recommended exemption from

assessments for sweet onions shipped to

outlets specified in proposed § 956.163.

At its next regularly scheduled

meeting November 12, 1996, the

Committee reconfirmed the

recommendations to establish container

marking requirements and exempt

specified shipments from assessments.

At that meeting, the Committee also

recommended exempting shipments

specified in § 956.163 from container

marking requirements. This proposed

rule combines the recommendations

from the two Committee meetings into

one rulemaking action.

The first proposal would establish in

§ 956.162 container marking
5934 Federal Register / Vol. 62, No. 27 / Monday, February 10, 1997 / Proposed Rules

requirements under the order. When the

Walla Walla Sweet Onion industry

began the process of formulating

Marketing Order 956, a primary

objective was to help promote product

identity at wholesale, retail, and

consumer levels, while at the same time

deterring the marketing of non-sweet

onions, or onions grown outside the

production area, as Walla Walla Sweet

Onions. The Committee is authorized to

use a trademarked logo developed by

the Walla Walla Sweet Onion

Commission and the Walla Walla Area

Chamber of Commerce. The logo was

developed and patented by the Walla

Walla Sweet Onion Commission in

December 1991, and currently is widely

recognized by the onion industry.

Provisions regarding container markings

are specified in proposed § 956.162.

The logo has been used by the

Committee on promotional material and

correspondence since the Committee

obtained the license to use it on April

19, 1996. During both the subcommittee

and the regular Committee meetings

held to develop the recommendation for

this proposed rule, all participants

agreed that containers of Walla Walla

Sweet Onions should be marked with

the Committee’s registered logo.

Discussion during the meetings

indicated that product identity, just as

it was during the formulation of the

order, is still a primary concern for both

promotional and compliance purposes,

and that steps should be taken to add

specific container marking regulations.

Committee members, as well as

industry participants at the meeting,

agreed that the use of a widely

recognized logo would have a positive

effect on the economic returns for the

entire industry. One of the major

problems for this industry has been the

marketing of non-Walla Walla Sweet

Onions, grown either in the traditional

production area or outside of it, as

Walla Walla Sweet Onions. Committee

members believe that, after purchasing

onions represented to them as being

Walla Walla Sweet Onions, buyers

would rarely return to purchase more

due to the lack of confidence such a sale

had fostered. This had, and still has, the

effect of curtailing demand and

reducing returns to producers.

Some of the handler members on the

Committee recommended that the

proposed regulation allow handlers a

period of time to utilize current

packaging inventory before being

required to use containers with the

Committee’s logo. These individuals

expressed concern that some handlers

may have significant container

inventory with pre-printed graphics and

other markings. Comments by handlers

at the meeting indicated that the

expense and burden of disposing of

their container inventory, or,

alternatively, adding decals, stickers, or

stamps to the existing containers would

be significant. The Committee agreed

that, although handlers should make

every effort to begin using the logo on

containers as soon as possible, a grace

period of two crop years would allow

adequate time for handlers to exhaust

current container inventories. Proposed

§ 956.162(b) provides such a grace

period for handlers, subject to

Committee verification of handler

container inventories.

The Committee recommended that the

logo be clearly displayed as either a

decal or an imprint on all containers,

and that there should be no specific

requirements for the size and color of

the markings. As it is a common

industry practice to ship onions in field

pack bulk bins containing more than

500 pounds net weight from the field to

road-side stands and farmers’ markets

where they are bagged for resale, the

Committee recommended that the

container marking requirement should

not apply to shipments to these two

small outlets. This exemption is

specified in proposed § 956.163.

The container marking requirement

would contribute to the efficient

marketing of Walla Walla Sweet Onions

by ensuring better product

identification, building buyer

confidence, increasing returns to the

industry, and enhancing Committee

compliance efforts. During the shipping

season, the Committee manager

frequently visits handling operations to

ensure that these operations are

complying with marketing order

requirements. Requiring that the

registered logo be displayed on the

container should decrease the amount of

time the manager spends tracing and

tracking these onions to ensure that they

are not onions from outside the

production area being sold as Walla

Walla Sweet Onions.

The Committee’s second

recommendation would add § 956.163

providing exemptions for shipments

made to certain non-fresh use outlets.

Committee members stated that most

Walla Walla Sweet Onions are shipped

into the fresh market. However, a small

percentage of the onions are utilized for

other purposes, including relief and

charitable organizations, livestock feed,

planting and plants, salad onions,

processing, disposal of culls, and seed.

For the exemption to apply to

shipments made to relief or charitable

organizations, the Committee included a

provision in its recommendation that

such shipments must be donated and

not sold.

Proposed § 956.163 clearly indicates

which shipments are exempted from

assessments and container marking

requirements. This is intended to lessen

the chance of confusion on the part of

the regulated industry and alleviate

potential administrative and compliance

problems for the Committee, thereby

facilitating the marketing of Walla Walla

Sweet Onions.

Pursuant to requirements set forth in

the Regulatory Flexibility Act (RFA), the

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 approximately 35 handlers

of Walla Walla Sweet Onions subject to

regulation under the marketing order

and approximately 60 producers in the

regulated production area. Small

agricultural service firms 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 whose

annual receipts are less than $500,000.

The region in which Walla Walla

Sweet Onions are produced is a

relatively small production area,

encompassing only a portion of

Oregon’s Umatilla County and

Washington’s Walla Walla County.

Produced on an estimated 850 acres, the

industry’s total 1996 Walla Walla Sweet

Onion pack-out approximated

20,106,200 pounds. Based on

assessments collected on 50-pound

cartons or sacks, Committee records for

the 1996 season show that 18 handlers

shipped 500 or fewer units, eight

handlers shipped between 500 and

5,000 units, four handlers shipped

between 5,000 and 50,000 units, and

five handlers shipped between 50,000

and 100,000 units.

Information provided by the

Department’s Fresh Fruit and Vegetable

Market News officials in Yakima,

Washington, indicates that 1996 F.O.B.

prices on jumbo Walla Walla Sweet

Onions, packed in 50-pound cartons,

ranged from a high of $16.00 early in the

season to a low at the end of the season

of $10.00. On the other end of the scale,

medium Walla Walla Sweet Onions,
Federal Register / Vol. 62, No. 27 / Monday, February 10, 1997 / Proposed Rules 5935

packed in 50-pound mesh sacks, ranged

from early season, high returns of

$14.00 per sack down to a low at the

season’s conclusion of $6.00 per sack.

Handlers have stated that packing costs

average between $4.00 and $5.00 per 50-

pound carton, and around $3.00 per 50-

pound sack. Committee records indicate

that individual farms currently have

acreage dedicated to the production of

Walla Walla Sweet Onions ranging from

1 to 160 acres.

About 25 of the 35 regulated handlers

of Walla Walla Sweet Onions are also

producers and generally pack their own

onions in the field while harvesting

them. These onions are usually

marketed direct to consumers through

road-side stands and farmers’ markets or

through mail order sales. Only about 10

of these handlers own and operate

commercially sized packing facilities

and market the majority of their onions

through large wholesale and retail

outlets. Based on current information

the majority of Walla Walla Sweet

Onion handlers and producers may be

classified as small entities.

The only alternative to this proposal

discussed at the meetings was to not

recommend the additions at all. The

Committee determined that such an

alternative would not be acceptable to

the industry because of the significant

benefits expected as a result of the

proposed regulations. Without container

marking requirements, the Committee

believes the current marketing and

compliance problems, basic reasons

behind the promulgation of the

marketing order, would not be

alleviated. As for the foregoing special

purpose shipment exemptions, the

Committee concluded that the absence

of a list of shipments exempt from

assessments and container marking

requirements would perpetuate

confusion and compliance problems, as

well as increase the economic, reporting

and recordkeeping burden on handlers.

This proposed rule would provide

that containers of Walla Walla Sweet

Onions for shipment to fresh markets be

marked with the Committee’s registered

logo, and that specified shipments of

Walla Walla Sweet Onions be exempt

from such container marking

requirements and from assessments.

This action would not impose any

additional reporting or recordkeeping

requirements on either small or large

handlers of Walla Walla Sweet Onions.

Additionally, the benefits of this rule

are not expected to be

disproportionately greater or less for

small handlers or producers than for

larger entities.

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 proposed rule.

The Committee’s meetings were

widely publicized throughout the

production area. All interested persons

were invited to attend the meetings. The

Committee actively seeks participation

in its deliberations at all of its meetings.

Both the October 8 and November 12,

1996, meetings were open to the public

and representatives of both large and

small entities expressed their views on

these and related issues. The majority of

the Committee, composed of six

producers, three handlers, and a public

member, represent small entities.

Additionally, interested persons are

invited to submit information on the

regulatory and informational impacts of

this action on small businesses.

A 30-day comment period is provided

to allow interested persons to respond

to this proposal. All written comments

received within the comment period

will be considered before a final

determination is made on this matter.

List of Subjects in 7 CFR Part 956

Marketing agreements, Onions,

Reporting and recordkeeping

requirements.

For the reasons set forth in the

preamble, it is proposed that 7 CFR Part

956 be amended as follows:

PART 956—SWEET ONIONS GROWN

IN THE WALLA WALLA VALLEY OF

SOUTHEAST WASHINGTON AND

NORTHEAST OREGON

1. The authority citation for 7 CFR

Part 956 continues to read as follows:

Authority: 7 U.S.C. 601–674.

2. In part 956, new §§ 956.162 and

956.163 are added to read as follows:

§ 956.162 Container markings.

Effective (Insert date one date after

day of publication of the final rule in

the Federal Register), no handler shall

ship any container of Walla Walla Sweet

Onions except in accordance with the

following terms and provisions:

(a) Each container of Walla Walla

Sweet Onions shall be conspicuously

marked with the ‘‘Genuine Walla Walla

Sweet Onion’’ logo. The marking may be

in the form of a decal or a stamped

imprint of any color and size: Provided,

That the decal or stamped imprint must

be placed in plain sight and easy to

read.

(b) Walla Walla Sweet Onions may be

handled not subject to the marking

requirements of this section when

handlers ship such onions pursuant to

§ 956.163, or ship such onions in field

packed bulk bins containing more than

500 pounds net weight for sale to

roadside stands and farmers’ market

operators for repacking and direct

consumer sale: Provided, That subject to

Committee verification of handler

container inventories, handlers may use

their existing inventories of unmarked

containers until (Insert date two years

after publication after the effective date

of the final rule).

§ 956.163 Handling for specified purposes.

(a) Assessment and container marking

requirements specified in this part shall

not be applicable to shipments of onions

for any of the following purposes:

(1) Shipments of Walla Walla Sweet

Onions for relief or to charitable

institutions: Provided, That such

shipments must be donated and not sold

in order for this exemption to apply;

(2) Shipments of Walla Walla Sweet

Onions for livestock feed;

(3) Shipments of Walla Walla Sweet

Onions for planting and for plants;

(4) Shipments of Walla Walla Sweet

Onions as salad onions;

(5) Shipments of Walla Walla Sweet

Onions for all processing uses

including, pickling, peeling,

dehydration, juicing, or other

processing;

(6) Shipments of Walla Walla Sweet

Onions for disposal;

(7) Shipments of Walla Walla Sweet

Onions for seed.

Dated: February 4, 1997.

Robert C. Keeney,

Director, Fruit and Vegetable Division.

[FR Doc. 97–3137 Filed 2–7–97; 8:45 am]

BILLING CODE 3410–02–P

Grain Inspection, Packers and

Stockyards Administration

9 CFR Part 201

RIN 0580–AA51

Regulations Issued under the Packers

and Stockyards Act: Poultry Grower

Contracts, Scales, Weighing

AGENCY: Grain Inspection, Packers and

Stockyards Administration, USDA.

ACTION: Advance notice of proposed

rulemaking.

SUMMARY: The Agency is considering the

need for issuing substantive regulations

to address concerns in the poultry

industry with respect to contract

payment provisions tied to the

performance of other growers, with

respect to feed deliveries to contract