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[Federal Register Volume 76, Number 211 (Tuesday, November 1, 2011)]
[Rules and Regulations]
[Pages 67317-67320]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-28197]

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 958

[Doc. No. AMS-FV-11-0025; FV11-958-1 FR]

Onions Grown in Certain Designated Counties in Idaho, and Malheur 
County, OR; Modification of Handling Regulations

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule revises the handling regulation for onions handled 
under the Idaho-Eastern Oregon onion marketing order. The marketing 
order regulates the handling of onions grown in designated counties in 
Idaho, and Malheur County, Oregon, and is administered locally by the 
Idaho-Eastern Oregon Onion Committee (Committee). This rule revises the 
marketing order's handling regulation to allow special purpose 
shipments of onions for experimentation. The revision will allow the 
Idaho-Eastern Oregon onion industry to identify and develop new market 
niches and is expected to benefit producers, handlers, and consumers of 
onions.

DATES: Effective Date: November 2, 2011.

FOR FURTHER INFORMATION CONTACT: Barry Broadbent or Gary D. Olson, 
Northwest Marketing Field Office, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, 805 SW. Broadway, 
suite 930, Portland, OR 97205; Telephone: (503) 326-2724, Fax: (503) 
326-7440, or Email: Barry.Broadbent@ams.usda.gov or 
GaryD.Olson@ams.usda.gov.
    Small businesses may request information on complying with this 
regulation by contacting Laurel May, 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 Email: Laurel.May@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing 
Agreement No. 130 and Marketing

[[Page 67318]]

Order No. 958, both as amended (7 CFR part 958), regulating the 
handling of onions grown in certain designated counties in Idaho, and 
Malheur County, Oregon, 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 final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This rule is not intended to have retroactive 
effect.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under Sec.  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. A 
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 final rule revises the handling regulation for onions handled 
under the order. Specifically, this rule revises the handling 
regulation to allow special purpose shipments of onions for the purpose 
of experimentation without regard to the minimum grade, size, maturity, 
pack, and inspection requirements of the order. The revision will give 
the Idaho-Eastern Oregon onion industry the opportunity to identify and 
develop new markets. The changes are expected to benefit producers, 
handlers, and consumers of onions. This rule was unanimously 
recommended by the Committee at a meeting on January 20, 2011.
    Sections 958.42, 958.51, 958.52, and 958.60 of the order provide 
authority for assessment, mandatory inspection, and establishment of 
grade, size, quality, maturity, and pack regulations applicable to the 
handling of onions. Section 958.53 of the order provides authority for 
the issuance of special regulations, or the modification, suspension, 
or termination of requirements in effect pursuant to Sec. Sec.  958.42, 
958.52, 958.60, or any combination thereof, in order to facilitate the 
handling of onions for certain specified purposes.
    Section 958.328 establishes minimum requirements for onions handled 
subject to the order. Currently, no person shall handle any lot of 
onions unless such onions are inspected, are at least ``moderately 
cured'', and meet the grade, size, maturity, and pack requirements of 
paragraphs (a), (b), and (c). Paragraph (e) delineates specific types 
of special purpose shipments that are exempt from the requirements of 
the order. Paragraph (f) outlines the safeguards for such special 
purpose shipments.
    The Committee recommended this revision to the handling regulations 
to respond to the industry's desire to have greater flexibility in 
indentifying and pursuing unique marketing opportunities for onions 
that do not conform to the requirements of the order. The concern from 
the onion industry is that onion producers and handlers within the 
order's production area are at a competitive disadvantage, relative to 
other onion producing regions, with respect to their ability to 
identify and develop new markets for non-standard onions. Adding 
authority to allow experimental onion shipments under the order 
provides handlers access to markets not previously available to them.
    An example that demonstrates how the industry benefits from this 
final rule would be a scenario in which a handler wants to produce and 
ship a unique, irregularly shaped small onion (e.g. a heart or a square 
shape) in order to target a newly developed niche market. Since 
irregular shape is a physical characteristic that does not conform to 
the order's grade requirements, previously such onions could not have 
been handled under the marketing order. However, with this exemption 
for experimentation the Committee can now allow the shipment of those 
specific type onions while still maintaining the integrity of the 
order. If the market for such onions increases significantly, the 
Committee could then incorporate changes into the handling regulations 
to accommodate their handling without the continued need for an 
exemption.
    The potential for marketing opportunities like the example 
described above motivated the Committee to recommend modifying the 
handling regulation to add ``experimentation'' to the already 
established list of special purpose shipments allowed under the order. 
Onion shipments for experimental purposes will thus be exempt from the 
grade, size, maturity, pack, and inspection requirements of the 
handling regulation. Shipments made under the experimental exemption 
continue to be subject to the assessment requirement of the order, 
however. With this special purpose shipment provision for 
experimentation, handlers have greater flexibility in pursuing various 
types of unique marketing opportunities that were previously not 
available under the handling regulation.
    The Committee will require handlers to request pre-approval for 
such experimental exemptions. Through the approval process, the 
Committee will be able to regulate the quantity and timing of such 
shipments. It is the goal of the Committee that any experimental 
shipments of onions will be temporary in nature. At the point that 
emerging experimental markets reach a sufficient volume or continue for 
such a length of time as to be deemed sustainable by the Committee, the 
Committee could then recommend changes to the handling regulation 
requirements to accommodate the marketing of such onions on a permanent 
basis.

Final Regulatory Flexibility Analysis

    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act (RFA) (5 U.S.C. 601-612), 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 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 35 handlers of Idaho-Eastern Oregon onions 
who are subject to regulation under the order and approximately 250 
onion producers in the regulated area. Small agricultural service 
firms, which include onion handlers and receivers, are defined by the 
Small Business Administration (SBA) (13 CFR 121.201) as those having 
annual receipts of less than $7,000,000, and small agricultural 
producers are defined as those having annual receipts of less than 
$750,000.
    The National Agricultural Statistics Service (NASS) reported in the 
``Vegetables 2010 Summary'', published in January 2011, that the total 
F.O.B. value of onions in the regulated production area for 2010 was 
$133,041,000. Based on an industry

[[Page 67319]]

estimate of 35 handlers, the average value of onions handled per 
handler is $3,801,000, well below the SBA threshold for defining small 
agricultural service firms. In addition, based on an industry estimate 
of 250 producers, the average F.O.B. value of onions produced in the 
industry is $532,164 per producer. Since the F.O.B. value is usually 
significantly higher than the farm gate value that the producers 
actually receive, most onion producers within the order's production 
area could be considered small agricultural producers under the SBA 
definition. Therefore, it can be concluded that the majority of 
handlers and producers of Idaho-Eastern Oregon onions may be classified 
as small entities as defined by the SBA.
    This final rule revises Sec.  958.328(e) of the order's handling 
regulation to allow special purpose shipments of onions for the purpose 
of experimentation without regard to the minimum grade, size, maturity, 
pack, and inspection requirements currently prescribed under paragraphs 
(a), (b), and (c) of Sec.  958.328. The revision will allow the Idaho-
Eastern Oregon onion industry to identify and develop new markets for 
non-standard onions that have not been previously available. The 
changes are expected to benefit producers, handlers, and consumers of 
onions.
    At a meeting on January 20, 2011, the Committee discussed the 
impact of the recommended changes on handlers and producers in terms of 
increased costs. The Committee believes that, since this change exempts 
certain shipments of onions from regulation, this action will not add 
any additional requirements or costs relative to the existing 
regulation. Since the utilization of the special purpose shipment 
provision is voluntary in nature, any additional regulatory burden 
placed on a handler as a result of this final rule will be by their 
choice. The changes may, however, create opportunities for producers 
and handlers to develop new markets and to enhance revenues. The 
Committee believes that the potential benefit associated with this 
action outweighs any potential increase in administrative cost or 
regulatory burden incurred by the handler.
    The Committee discussed various alternatives to adding experimental 
shipments to the list of special purpose shipment exemptions contained 
in the order's handling regulation. Some members suggested that the 
provision was too broad in scope and needed greater restrictions. After 
deliberation, the Committee concluded that it would be impossible to 
anticipate what might be ``experimental'' in the future and that 
affording the greatest latitude to the provision, while maintaining 
strict Committee oversight, was in the best interest of the industry. 
The Committee also considered taking no action with regard to adding an 
experimental shipment provision, citing the potential for abuse. After 
deliberation, the Committee agreed that the experimental shipment 
provision is needed to respond to changes in the industry and that 
there would be sufficient safeguards to protect the integrity of the 
order.
    This final rule imposes additional reporting burdens on handlers 
who make special purpose shipments of experimental onions. This action 
requires the modification of two existing Committee forms and an 
increase in burden hours for three existing forms. 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.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the order's information collection requirements have been 
previously approved by the Office of Management and Budget (OMB) and 
assigned OMB No. 0581-0241, ``Onions Grown in Certain Designated 
Counties in Idaho, and Malheur County, Oregon, M.O. No. 958.'' However, 
as a result of this action changes in those requirements are necessary 
and have been submitted to OMB for review.
    As noted in the initial regulatory flexibility analysis, USDA has 
not identified any relevant Federal rules that duplicate, overlap or 
conflict with this rule.
    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.
    In addition, the Committee's meeting was widely publicized 
throughout the 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 January 20, 2011, meeting was 
a public meeting and all entities, both large and small, were able to 
express their views on this issue.
    A proposed rule concerning this action was published in the Federal 
Register on June 21, 2011 (76 FR 35997). Copies of the rule were made 
available to all Committee members and onion handlers. Finally, the 
rule was made available through the Internet by USDA and the Office of 
the Federal Register. A 60-day comment period ending August 22, 2011, 
was provided to allow interested persons to respond to the proposal. No 
comments were received. 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/MarketingOrdersSmallBusinessGuide. Any questions 
about the compliance guide should be sent to Laurel May at the 
previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    After consideration of all relevant matter presented, including the 
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.
    It is further found that good cause exists for not postponing the 
effective date of this rule until 30 days after publication in the 
Federal Register (5 U.S.C. 553) because handlers are already shipping 
onions from the 2011-2012 crop and handlers want to take advantage of 
the revision as soon as possible. Further, handlers are aware of this 
rule, which was unanimously recommended by the committee at a public 
meeting. Also, a 60-day comment period was provided for in the proposed 
rule.

List of Subjects in 7 CFR Part 958

    Marketing agreements, Onions, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 958 is 
amended as follows:

PART 958--ONIONS GROWN IN CERTAIN DESIGNATED COUNTIES IN IDAHO, AND 
MALHEUR COUNTY, OREGON

0
1. The authority citation for 7 CFR part 958 continues to read as 
follows:

    Authority: 7 U.S.C. 601-674.

0
2. In Sec.  958.328, revise paragraph (e) and the introductory sentence 
of paragraph (f) to read as follows:

Sec.  958.328  Handling regulation.

* * * * *
    (e) Special purpose shipments. (1) The minimum grade, size, 
maturity, pack, assessment, and inspection requirements of this section 
shall not be applicable to shipments of onions for any of the following 
purposes:

[[Page 67320]]

    (i) Planting,
    (ii) Livestock feed,
    (iii) Charity,
    (iv) Dehydration,
    (v) Canning,
    (vi) Freezing,
    (vii) Extraction,
    (viii) Pickling, and
    (ix) Disposal.
    (2) Shipments of onions for the purpose of experimentation, as 
approved by the Committee, may be made without regard to the minimum 
grade, size, maturity, pack, and inspection requirements of this 
section. Assessment requirements shall be applicable to such shipments.
    (3) The minimum grade, size, and maturity requirements set forth in 
paragraph (a) of this section shall not be applicable to shipments of 
pearl onions, but the maximum size requirement in paragraph (h) of this 
section and the assessment and inspection requirements shall be 
applicable to shipments of pearl onions.
    (f) Safeguards. Each handler making shipments of onions outside the 
production area for dehydration, canning, freezing, extraction, 
pickling, or experimentation pursuant to paragraph (e) of this section 
shall:
* * * * *

    Dated: October 26, 2011.
Ellen King,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2011-28197 Filed 10-31-11; 8:45 am]
BILLING CODE 3410-02-P
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