[Federal Register: December 21, 2004 (Volume 69, Number 244)]
[Rules and Regulations]
[Page 76381-76385]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21de04-5]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Parts 958 and 980
[Docket No. FV04-958-1 FIR]
Onions Grown in Certain Designated Counties in Idaho and Malheur
County, Oregon; Relaxation of Handling and Import Regulations
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: The Department of Agriculture (USDA) is adopting, as a final
rule, without change, an interim final rule which relaxes the size
requirement for pearl onions, relaxes the minimum grade and size
requirements for cipolline onion varieties, and updates the regulatory
text concerning certain reporting requirements for onions handled under
the Idaho-Eastern Oregon onion marketing order. The marketing order
regulates the handling of onions grown in Idaho and Eastern Oregon and
is administered locally by the Idaho-Eastern Oregon Onion Committee
(Committee). This rule also continues in effect the action that relaxes
the requirements for pearl and cipolline onions under the import
regulations as required by section 8e of the Agricultural Marketing
Agreement Act of 1937. Specifically, this rule continues in effect the
action that changes the definition of pearl onions to mean onions 2
inches in diameter or less, establishes a relaxed minimum grade of U.S.
No. 2 and relaxed minimum diameter of 1-1/2 inches for cipolline
onions, and adds clarification and specificity to the reporting
requirements for onions handled for peeling, chopping, or slicing. The
changes will facilitate the marketing of onions handled under the
marketing order, improve producer returns, and bring the section 8e
import regulation into conformity with the marketing order.
DATES: Effective Date: January 20, 2005.
FOR FURTHER INFORMATION CONTACT: Robert J. Curry, Northwest Marketing
Field Office, Marketing Order Administration Branch, Fruit and
Vegetable Programs, AMS, USDA, 1220 SW. Third Avenue, Suite 385,
Portland, Oregon 97204; telephone: (503) 326-2724, Fax: (503) 326-7440;
or George Kelhart, Technical Advisor, 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.
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
Agreement No. 130 and Marketing 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.''
This rule is also issued under section 8e of the Act, which
provides that whenever certain specified commodities, including onions,
are regulated under a Federal marketing order, imports of these
commodities into the United States are prohibited unless they meet the
same or comparable grade, size, quality, or maturity requirements as
those in effect for the domestically produced commodities.
USDA 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
[[Page 76382]]
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.
There are no administrative procedures which must be exhausted
prior to any judicial challenge to the provisions of import regulations
issued under section 8e of the Act.
This rule continues in effect the action that relaxes handling
regulations for pearl and cipolline onions produced in certain
designated counties in Idaho, and Malheur County Oregon, by redefining
pearl onions to mean onions 2 inches in diameter or less, and by
establishing a relaxed minimum grade of U.S. No. 2 and a relaxed
minimum diameter of 1\1/2\ inches for cipolline onion varieties. As
provided under section 8e of the Act, these changes continue in effect
the actions that also apply to all imported pearl and cipolline onions.
This rule also continues in effect the action that adds clarification
and specificity to the reporting requirements by updating Sec.
958.328(d) for onions handled for peeling, chopping, or slicing to
reflect current form provisions. These changes were unanimously
recommended by the Committee on April 1, 2004, and are intended to
facilitate the marketing of Idaho-Eastern Oregon onions and improve
producer returns.
Sections 958.51 and 958.52 of the order authorize the Committee to
recommend, and the USDA to issue, grade, size, quality, pack, and
container regulations for any variety or varieties of onions grown in
the production area. Section 958.53 authorizes the issuance of special
regulations to facilitate the handling of pearl onions as well as other
special purpose shipments. Section 958.65 authorizes the Committee to
collect information from handlers. Regulations specific to the handling
of onions produced in the regulated production area are contained in
Sec. 958.328 of the order's handling regulations, whereas relevant
import regulations are contained in Sec. 980.117 and Sec. 980.501 of
the vegetable import regulations.
Pearl onions and cipolline onions are small, specialty onions with
end uses in both the fresh market (raw and cooked) and processed
market. Although there are relatively few pearl onions and cipolline
onions produced in the Northwest, increased producer interest in both
types of onions, as well as changes in customer preferences, encouraged
this Committee recommendation.
Pearl onions are defined, in part, in both the order and the import
regulations as onions that are produced using specific cultural
practices that limit growth and are inspected and certified as
measuring no larger than the maximum designated size. Factors that can
limit growth, and subsequently final bulb size, include the variety,
plant density, depth planted, photoperiod, and temperature. Pearl
onions are mild flavored white, red, or yellow skinned onions generally
ranging in size from about \3/4\ inch to less than 2 inches in
diameter.
Although pearl onions must be inspected and certified as measuring
no larger than the maximum size designated under the order, they have
been exempt from the minimum grade, size, and maturity requirements of
the order since 1985. In order to be eligible for this exemption, the
onions must be no greater than the stated maximum size limit. Although
exempt from the grade, size, and maturity requirements, shipments of
pearl onions are subject to administrative assessments.
Due to previous changes in handling, marketing, and buyer
preferences, the defined maximum diameter of pearl onions was changed
from 1\1/2\ inches to 1\3/4\ inches in 1990 (55 FR 27825). Similarly,
due to ongoing changes in handling, marketing, and buyer preferences,
this rule continues in effect the action that further relaxes the size
requirements by increasing the defined maximum diameter of pearl onions
to 2 inches.
The pearl onion market is a minor segment of the onion market
served by the Idaho-Eastern Oregon production area. As such, the
Committee continues to believe that pearl onions do not compete
directly with most of the onions produced in this area and that the
current exemption from size, grade, and maturity requirements should
continue.
Due to changing dynamics in the cultural and handling practices in
this region, as well as buyer and consumer preferences, this relaxation
in requirements will help facilitate the efficient movement of pearl
onions into fresh market channels and may also enhance producer
returns.
Cipolline onions--also known as Borettana onions--are traditional
Italian onions that are relatively small and button shaped, and include
white, red, and yellow varieties. As noted earlier, cipolline
(pronounced chip-ah-LEE-nee) onions have constituted a very small
percentage of the onions produced and marketed in the order's regulated
production area in the past. However, due to an increase in cipolline
onion production, and a growing consumer interest in this specialty
onion, the order's grade and size requirements were beginning to
adversely affect the handling and marketing of cipolline onions.
Under the order, white, red, and yellow onion varieties handled for
the fresh market have varying minimum grade and size requirements.
Specifically, white varieties must meet a minimum grade of U.S. No. 1,
1 inch minimum to 2 inches maximum or at least 1\1/2\ inches minimum,
whereas red varieties must meet a minimum grade of U.S. No. 2 and a
minimum diameter of 1\1/2\ inches. The most prevalent onions packed in
the Idaho-Eastern Oregon production area, yellow onion varieties, must
meet a minimum grade of U.S. No. 2 and measure 3 inches or larger in
diameter, or, if packed to U.S. No. 1 grade, they may have a minimum
measurement of 1\3/4\ inches in diameter. Prior to this change,
cipolline onions were handled, graded, and inspected in accordance with
the different order requirements for white, red, and yellow onion
varieties.
Cipolline onions, however, range in size from about 1 inch in
diameter to about 3 inches in diameter, with prevalence found in the 2-
inch to 3-inch sizes. Since most of the cipolline onions produced in
this area are yellow, U.S. No. 2 grade cipolline onions would have
difficulty meeting the three-inch minimum size requirement. Following a
review of the cultural practices, supply situation, and demand
characteristics for cipolline onions, the Committee determined that the
marketing of all cipolline onion varieties would be enhanced if
handlers were held to a minimum grade of U.S. No. 2 and a minimum size
of 1\1/2\ inches in diameter--the same minimum requirements for all
Idaho-Eastern Oregon red varieties.
This rule, by establishing a minimum grade and size for all
cipolline onion varieties distinct from the prevalent white, red, and
yellow varieties, will help ensure that marketable cipolline onions
meet the minimum requirements of the order. While the requirements in
place prior to this action allowed for the shipment of white cipolline
onions that
[[Page 76383]]
graded U.S. No. 1, 1-inch minimum to 2-inches maximum, no such
shipments were ever made from the production area. Therefore, this
change in the minimum grade and size requirements is not expected to
impact the shipment of white cipolline onions.
As mentioned earlier, section 8e of the Act provides that when
certain domestically produced commodities, including onions, are
regulated under a Federal marketing order, imports of that commodity
must meet the same or comparable grade, size, quality, and maturity
requirements. Section 8e also provides that whenever two or more
marketing orders regulating the same commodity produced in different
areas of the United States are concurrently in effect, a determination
must be made as to which of the areas produces the commodity in most
direct competition with the imported commodity. Imports must meet the
requirements established for that particular area.
Grade, size, quality, and maturity regulations have been issued
regularly under both Marketing Order No. 958 and Marketing Order No.
959, which regulates the handling of onions produced in South Texas,
since the marketing orders were established. The import regulations
specify that import requirements for onions are to be based on the
seasonal categories of onions produced in both marketing order areas.
In that regard, imported onions must meet the requirements of the
Idaho-Eastern Oregon onion marketing order during the period June 5
through March 9 and the South Texas onion marketing order during the
period March 10 through June 4 of each season. Pearl and cipolline
onions are not currently produced in South Texas. However, they are
produced and marketed in limited quantities through out the year under
the Idaho-Eastern Oregon onion marketing order. Therefore, the
requirements for imported pearl and cipolline onions should be based
upon the requirements established under Marketing Order No. 958 for the
entire year.
As a consequence, this action continues in effect changes to Sec.
980.117(a)(1) and (2) and (b)(1) of the onion import regulations by
determining that imports of pearl and cipolline onions during the
entire year are in most direct competition with the marketing of onions
produced under Marketing Order No. 958 and changes to Sec. 980.117(h)
and (i) by redefining pearl onions to mean onions produced using
specific cultural practices that limit growth to 2 inches or less in
diameter. Accordingly, all cipolline onions imported must be U.S. No. 2
grade or better and measure 1\1/2\ inches or more in diameter, and
pearl onions cannot be larger than 2 inches in diameter.
This rule also continues in effect the action that clarifies
certain handler reporting requirements. Under the handling regulations,
onions that are inspected and certified as meeting the grade, size,
maturity, and pack requirements of the order and are subsequently
peeled, chopped, or sliced for fresh market within the production area
may be handled without reinspection. Section 958.328(d) provides
reporting procedures for the handling of such previously inspected
onions for peeling, chopping, or slicing.
The Committee uses Form FV-37, Rehandling of Onions Report, to
collect information from handlers specific to onions handled under this
section. These reporting requirements are in place primarily to ensure
handler compliance with the order's provisions. This rule continues in
effect the action that adds clarification and specificity to the
regulations by updating Sec. 958.328(d) to reflect current Form FV-37
provisions. The change is expected to minimize handler errors in
completing the form and help ensure timely submission of the completed
form to the Committee.
This form has been approved previously by the Office of Management
and Budget (OMB) under OMB Number 0581-0178, Vegetable and Specialty
Crops. This action will not impact the information collection burden
hours currently approved by OMB for this form.
Final Regulatory Flexibility Analysis
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.
Import regulations issued under the Act are based on those
established under Federal marketing orders which regulate the handling
of domestically produced products.
There are approximately 42 handlers of Idaho-Eastern Oregon onions
who are subject to regulation under the order and approximately 190
onion producers in the regulated area. In addition, based on the most
recent information available, approximately 472 importers of onions are
subject to import regulations and may be affected by this rule. Small
agricultural service firms are defined by the Small Business
Administration (13 CFR 121.201) 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 $750,000.
Based on its assessment records, the Committee estimates that about
39 of the 42 handlers ship less than $5,000,000 worth of onions on an
annual basis. In addition, based on the acreage (20,600), production
(12,000,000 cwt), and total producer revenue ($130,768,000) reported by
the National Agricultural Statistics Service for 2003, and the current
number of onion producers (190), the average annual gross producer
revenue is approximately $688,252. Thus, the majority of the onion
handlers and the onion producers in this industry may be classified as
small entities. Although it is not known how many importers of onions
may be classified as small entities, we believe that many of the 472
importers can be classified as such. There are two firms involved in
altering onions under the order and both firms may be classified as
small entities.
This rule continues in effect the action that relaxes the size
requirement for pearl onions, relaxes the minimum grade and size
requirements for cipolline onions, and clarifies certain reporting
requirements for onions handled under the Idaho-Eastern Oregon onion
marketing order. Authority for this action is contained in Sec. Sec.
958.51, 958.52, 958.53, and 958.65 of the order. This rule--unanimously
recommended by the Committee at its April 1, 2004, meeting--continues
in effect the action that changes Sec. 958.328(h) by redefining pearl
onions to mean onions produced using specific cultural practices that
limit growth to the same general size as boilers and picklers (as
defined in the U.S. Standards for Grades of Onions), and that have been
inspected and certified as measuring 2 inches in diameter or less. In
addition, this rule continues in effect the action that changes Sec.
958.328(a)(2) by adding cipolline onions to the minimum grade and size
requirements established for red onion varieties: U.S. No. 2 grade or
better and 1\1/2\ inch diameter or larger.
Under authority in section 8e of the Act, this rule also continues
in effect the action that changes Sec. 980.117(a)(1) and
[[Page 76384]]
(2), and (b)(1), of the onion import regulations by determining that
imports of pearl and cipolline onions are in most direct competition
during the entire year with the marketing of onions produced under
Marketing Order No. 958 and changes Sec. 980.117(h) and (i) by
redefining pearl onions to mean onions produced using specific cultural
practices that limit growth to 2 inches in diameter or less. Although
not specifically referenced in the text of Sec. 980.117, this rule
also continues in effect the action that relaxes the minimum grade and
size for imported cipolline onions to U.S. No. 2 grade and 1\1/2\
inches in diameter.
Finally, this rule continues in effect the action that updates
Sec. 958.328(d) to reflect the current form used for onions handled
for peeling, chopping, or slicing. This action is intended to
facilitate the handling and marketing of pearl and cipolline onions,
increase producer returns, and help minimize errors in completing Form
FV-37 concerning the handling of onions for peeling, chopping, or
slicing, and to help ensure timely submission of the form to the
Committee.
According to the Committee, there is currently one producer and one
handler of pearl and cipolline onions in the regulated production area,
and, as such, statistics relating to the production and marketing of
pearl and cipolline onions in the Idaho-Eastern Oregon onion production
area cannot be made available. The quantity of such specialty onions,
however, would be minor in relation to the prevalent large, globular
shaped Spanish-type onion produced in the production area. Regarding
pearl and cipolline onions produced elsewhere in the United States or
imported into the United States: statistical information is available
grouped by dry bulb type onions, green onions, or onion sets and is
generally unavailable by variety, size, or color. However, the U.S.
Department of Commerce does track the quantity of pearl onions imported
into the United States with a maximum diameter of .39 inches. In 2003,
for example, approximately 211 hundredweight of pearl onions (less than
or equal to .39 inches in diameter) were imported--in diminishing
order--from Chile, Spain, China, Mexico, and India. In comparison, most
onions imported into the U.S. are produced in Mexico, Canada, Peru, and
Chile. Currently, there are no government statistics on the domestic
production or importation of cipolline onions.
Regarding the impact of this rule on affected entities, relaxing
the size requirement for pearl onions and the grade and size
requirement for cipolline onions is expected to benefit handlers,
importers, and producers. With the change in the definition of pearl
onions to include onions as large as 2 inches in diameter, a
potentially greater quantity of onions will pass inspection and thus be
certified under the order's pearl onion exemption provisions.
Similarly, by relaxing the minimum grade and size requirements for
cipolline onions, a greater quantity of these onions should meet the
order's handling regulations. This could translate into an increased
market for cipolline onions and greater returns for handlers,
importers, and producers. While the requirements in place prior to this
action allowed for the shipment of white cipolline onions that graded
U.S. No. 1, 1-inch minimum to 2 inches maximum, no such shipments were
ever made. Therefore, this action is not expected to impact the
shipment of white cipolline onions.
The clarification of reporting requirements for peeled, chopped,
and sliced onions will have the tangible effect of providing more
clearly understood instructions to handlers who are required to
complete Form FV-37.
The Committee considered several alternatives to the relaxation in
handling regulations for pearl and cipolline onions. The Committee
initiated this action due to a request from the Idaho-Eastern Oregon
onion industry's single pearl and cipolline onion producer and handler
for an all-inclusive exemption from the requirements of the order. A
special subcommittee was formed to study the request. The initial
request was an exemption for an entire specialty product line, which
included onion sets, pearl onions, boiler onions, prepack onions,
cipolline onions, and shallots. The requester's main contention with
the order is that none of his onions fit the profile of the Idaho-
Eastern Oregon onion industry's foremost product, the large, globular
shaped and mild Spanish-type onion. In addition, the requester was of
the view that the Committee's promotion efforts--a major budgetary item
for the Committee--does not benefit him as a producer and marketer of
the small specialty onions. The requester also stated that the cost to
him in complying with the order--in administrative assessments and
inspection fees--is too high when considering his benefits from the
order.
The subcommittee noted that onion sets and shallots do not need to
be considered for further exemptions since neither is regulated under
the marketing order. In addition, the subcommittee determined that
boiler and prepacker size onions should not be exempt from the handling
regulations since both are produced throughout the regulated production
area. Various members of the subcommittee were of the view that the
marketing of out-of-grade and off-size boiler and prepacker onions
would have a negative impact on the marketing of all Idaho-Eastern
Oregon onions.
Further, as noted earlier in this document, pearl onions have been
exempt from the minimum grade, size, and maturity requirements of Sec.
958.328 for several years. The subcommittee determined that an increase
in the maximum size for pearl onions would facilitate the handling and
marketing of these onions. The subcommittee considered increasing the
maximum size under the pearl onion definition from 1\7/8\ inches to as
much as 2\3/4\ inches in diameter. This was rejected, however, because
this would permit handlers to ship these onions exempt from the quality
requirements in competition with larger sized onions subject to such
requirements. The subcommittee also rejected consideration of an
exemption from the current assessment and inspection requirements for
pearl onions as being detrimental to the program. Pearl onions are
inspected under the order to assure that they do not exceed the maximum
diameter permitted.
Finally, the subcommittee considered various exemption and
regulatory options in regard to cipolline onions. A complete exemption
from the order was rejected since the subcommittee considered the
cipolline onions as being a competitive product to the prevalent onion
varieties produced and marketed under the order. Consideration was also
given to establishing a different regulatory scheme for the county in
which the cipolline onions are produced. This was not considered a
viable option due to administrative concerns and the fact cipolline
onions can be produced anywhere within the production area.
The Committee, based on the subcommittee's consideration of the
issue, determined that pearl and cipolline onions are promoted through
the order's generic promotion efforts since a major component of these
efforts are coupled to the Idaho-Eastern Oregon onion logo. In this
regard, the Committee feels that all handlers within the regulated
production area benefit from the order.
This rule will not impose any additional reporting or recordkeeping
requirements on either small or large onion handlers. As with all
Federal marketing order programs, reports and
[[Page 76385]]
forms are periodically reviewed to reduce information requirements and
duplication by industry and public sector agencies. In addition, USDA
has not identified any relevant Federal rules that duplicate, overlap,
or conflict with this rule.
The Committee's meeting was widely publicized throughout the Idaho-
Eastern Oregon onion industry and all interested persons were invited
to attend the meeting and participate in Committee deliberations. Like
all Committee meetings, the April 1, 2004, meeting was a public meeting
and all entities, both large and small, were able to express their
views on this issue.
Also, as indicated earlier, the subcommittee appointed to consider
this matter met on February 25, 2004, and discussed this issue in
detail. That meeting was also a public meeting and both large and small
entities were able to participate and express their views.
An interim final rule concerning this action was published in the
Federal Register on September 22, 2004. Copies of the rule were made
available by the Committee's staff to all producers, handlers, and
interested persons. In addition, the rule was made available though the
Internet by USDA and the Office of the Federal Register. That rule
provided for a 60-day comment period which ended November 22, 2004. Two
comments were received during that period. Neither comment addressed
the substance of the interim final rule; therefore, no changes are made
as a result of these comments.
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 Committee's recommendation, and other information, it is found that
finalizing the interim final rule, without change, as published in the
Federal Register (69 FR 56667) will tend to effectuate the declared
policy of the Act.
In accordance with section 8e of the Act, the United States Trade
Representative has concurred with the finalization of this rule.
List of Subjects
7 CFR Part 958
Marketing agreements, Onions, Reporting and recordkeeping
requirements.
7 CFR Part 980
Food grades and standards, Imports, Marketing agreements, Onions,
Potatoes, Tomatoes.
PART 958--ONIONS GROWN IN CERTAIN DESIGNATED COUNTIES IN IDAHO, AND
MALHEUR COUNTY, OREGON
PART 980--VEGETABLES; IMPORT REGULATIONS
0
Accordingly, the interim final rule amending 7 CFR parts 958 and 980
which was published at 69 FR 56667 on September 22, 2004, is adopted as
a final rule without change.
Dated: December 15, 2004.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 04-27909 Filed 12-20-04; 8:45 am]
BILLING CODE 3410-02-U