[Federal Register Volume 62, Number 27 (Monday, February 10, 1997)]
[Proposed Rules]
[Pages 5933-5935]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-3137]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

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.

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Federal Register / Vol. 62, No. 27 / Monday, February 10, 1997 / 
Proposed Rules

[[Page 5933]]



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.

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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 
Sec. 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 Sec. 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 Sec. 956.162 container 
marking

[[Page 5934]]

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 Sec. 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 Sec. 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 Sec. 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 Sec. 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 Sec. 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,

[[Page 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 Secs. 956.162 and 956.163 are added to read as 
follows:


Sec. 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 Sec. 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).


Sec. 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