Proposed Rule2024-08679
Onions Grown in South Texas; Increased Assessment Rate
Primary source
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Published
April 24, 2024
Issuing agencies
Agriculture DepartmentAgricultural Marketing Service
Abstract
This proposed rule would implement a recommendation from the South Texas Onion Committee (Committee) to increase the assessment rate established for the 2023-2024 and subsequent fiscal periods from $0.05 to $0.08 per 50-pound container or equivalent for South Texas onions. The proposed assessment rate would remain in effect indefinitely unless modified, suspended, or terminated.
Full Text
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<title>Federal Register, Volume 89 Issue 80 (Wednesday, April 24, 2024)</title>
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[Federal Register Volume 89, Number 80 (Wednesday, April 24, 2024)]
[Proposed Rules]
[Pages 31093-31095]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-08679]
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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. 89, No. 80 / Wednesday, April 24, 2024 /
Proposed Rules
[[Page 31093]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 959
[Doc. No. AMS-SC-23-0086]
Onions Grown in South Texas; Increased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would implement a recommendation from the
South Texas Onion Committee (Committee) to increase the assessment rate
established for the 2023-2024 and subsequent fiscal periods from $0.05
to $0.08 per 50-pound container or equivalent for South Texas onions.
The proposed assessment rate would remain in effect indefinitely unless
modified, suspended, or terminated.
DATES: Comments must be received by May 24, 2024.
ADDRESSES: Interested persons are invited to submit written comments
concerning this proposed rule. Comments can be sent to the Docket
Clerk. Market Development Division, Specialty Crops Program, AMS, USDA,
1400 Independence Avenue SW, STOP 0237, Washington, DC 20250-0237.
Comments can also be sent to the Docket Clerk electronically by Email:
<a href="/cdn-cgi/l/email-protection#470a26352c22332e2920083523223504282a2a222933073234232669202831"><span class="__cf_email__" data-cfemail="95d8f4e7fef0e1fcfbf2dae7f1f0e7d6faf8f8f0fbe1d5e0e6f1f4bbf2fae3">[email protected]</span></a> or via the internet at: <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Comments should reference the document number and
the date and page number of this issue of the Federal Register.
Comments submitted in response to this proposed rule will be included
in the record and will be made available to the public and can be
viewed at: <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Please be advised that the
identity of the individuals or entities submitting the comments will be
made public on the internet at the address provided above.
FOR FURTHER INFORMATION CONTACT: Delaney Fuhrmeister, Marketing
Specialist, or Christian Nissen, Chief, Southeast Region Branch, Market
Development Division, Specialty Crops Program, AMS, USDA; Telephone:
(863) 324-3375 or Email: <a href="/cdn-cgi/l/email-protection#f7b3929b9699928ed9b1829f859a929e84839285b782849396d9909881"><span class="__cf_email__" data-cfemail="2e6a4b424f404b5700685b465c434b475d5a4b5c6e5b5d4a4f00494158">[email protected]</span></a> or
<a href="/cdn-cgi/l/email-protection#8ccfe4fee5fff8e5ede2a2c2e5ffffe9e2ccf9ffe8eda2ebe3fa"><span class="__cf_email__" data-cfemail="682b001a011b1c0109064626011b1b0d06281d1b0c09460f071e">[email protected]</span></a>.
Small businesses may request information on complying with this
regulation by contacting Richard Lower, Market Development Division,
Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP
0237, Washington, DC 20250-0237; Telephone: (202) 720-8085, or Email:
<a href="/cdn-cgi/l/email-protection#1e4c777d767f6c7a305271697b6c5e6b6d7a7f30797168"><span class="__cf_email__" data-cfemail="61330802090013054f2d0e16041321141205004f060e17">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: This action, pursuant to 5 U.S.C. 553,
proposes to amend regulations issued to carry out a marketing order as
defined in 7 CFR 900.2(j). This proposed rule is issued under Marketing
Order No. 959, as amended (7 CFR part 959), regulating the handling of
onions grown in South Texas. Part 959 (referred to as 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
Committee locally administers the Order and is comprised of producers
and handlers of onions operating within the area of production.
The Agricultural Marketing Service (AMS) is issuing this proposed
rule in conformance with Executive Orders 12866, 13563, and 14094.
Executive Orders 12866 and 13563 direct agencies to assess all costs
and benefits of available regulatory alternatives and, if regulation is
necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public health and safety
effects, distributive impacts, and equity). Executive Order 13563
emphasizes the importance of quantifying both costs and benefits,
reducing costs, harmonizing rules, and promoting flexibility. Executive
Order 14094 reaffirms, supplements, and updates Executive Order 12866
and further directs agencies to solicit and consider input from a wide
range of affected and interested parties through a variety of means.
This proposed action falls within a category of regulatory actions that
the Office of Management and Budget (OMB) exempted from Executive Order
12866 review.
This proposed rule has been reviewed under Executive Order 13175--
Consultation and Coordination with Indian Tribal Governments, which
requires Federal agencies to consider whether their rulemaking actions
would have Tribal implications. AMS has determined that this proposed
rule is unlikely to have substantial direct effects on one or more
Indian Tribes, on the relationship between the Federal Government and
Indian Tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian Tribes.
This proposed rule has been reviewed under Executive Order 12988--
Civil Justice Reform. Under the 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 proposed
assessment rate would be applicable to all assessable onions for the
2023-2024 fiscal period, and continue until amended, suspended, or
terminated.
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 the 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 proposed rule would increase the assessment rate for South
Texas onions handled under the Order from $0.05 per 50-pound container
or equivalent, the rate that was established for the 2020-2021 and
subsequent fiscal periods, to $0.08 per 50-pound container or
equivalent for the 2023-2024 and subsequent fiscal periods.
Sections 959.41 and 959.42 authorize the Committee, with the
approval of AMS, to formulate an annual budget of expenses and collect
assessments from handlers to administer the program. The
[[Page 31094]]
members of the Committee are familiar with the Committee's needs and
with the costs of goods and services in their local area and are able
to formulate an appropriate budget and assessment rate. The assessment
rate is formulated and discussed in a public meeting, and all directly
affected persons have an opportunity to participate and provide input.
For the 2020-2021 and subsequent fiscal periods, the Committee
recommended, and AMS approved, an assessment rate of $0.05 per 50-pound
container or equivalent of South Texas onions within the production
area. That rate continues in effect from fiscal period to fiscal period
until modified, suspended, or terminated by AMS upon recommendation and
information submitted by the Committee or other information available
to AMS.
The Committee met on November 1, 2023, and unanimously recommended
2023-2024 fiscal period expenditures of $280,657 and an assessment rate
of $0.08 per 50-pound container or equivalent of South Texas onions
handled for the 2023-2024 and subsequent fiscal periods. In comparison,
last fiscal period's budgeted expenditures were $177,657. The proposed
assessment rate of $0.08 per 50-pound container or equivalent is $0.03
higher than the rate currently in effect. The Committee recommended
increasing the assessment rate to better align assessment revenue with
budgeted expenses and to replenish reserves which were depleted between
March 2021 and December 2022 when the Committee ceased collecting
assessments during a temporary suspension of the Order. The Committee
estimates shipments for the 2023-2024 season to be around 3,600,000 50-
pound containers or equivalents, an increase from the 3,020,000 50-
pound containers or equivalents handled for the 2022-2023 fiscal
period.
The major expenditures recommended by the Committee for the 2023-
2024 fiscal period include $92,000 for research and marketing; $80,000
for the compliance program; and $37,050 for administrative expenses. By
comparison, budgeted expenses for these items during the 2022-2023
fiscal period were $20,000; $50,000; and $37,050, respectively.
At the current assessment rate of $0.05, the expected 3,600,000 50-
pound containers or equivalents would generate $180,000 in assessment
revenue (3,600,000 50-pound containers or equivalents multiplied by
$0.05 assessment rate), which would not cover budgeted expenses. The
Committee recommended increasing the assessment rate to meet necessary
expenses, fund marketing research, and restore reserves. By increasing
the assessment rate by $0.03 to $0.08, assessment income would generate
$288,000 in assessment revenue (3,600,000 50-pound containers or
equivalents multiplied by $0.08 assessment rate). This amount should be
appropriate to ensure the Committee has sufficient revenue to fully
fund its recommended 2023-2024 fiscal period budgeted expenditures and
to begin replenishing the Committee's reserve funds.
The Committee derived the recommended assessment rate by
considering anticipated fiscal period expenses, expected shipments of
onions, and the amount of funds available in the financial reserve.
Income derived from handler assessments ($288,000), and other sources
including interest income, would be adequate to cover budgeted expenses
($280,657). Funds available in the financial reserve (currently about
$78,000) would be kept within the maximum permitted by the Order
(approximately two fiscal periods' expenses as authorized in Sec.
959.43).
The proposed assessment rate would continue in effect indefinitely
unless modified, suspended, or terminated by AMS upon recommendation
and information submitted by the Committee or other available
information. Although this assessment rate would be in effect for an
indefinite period, the Committee would 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 AMS. Committee meetings are open to the public and interested
persons may express their views at these meetings. AMS will evaluate
Committee recommendations and other available information to determine
whether modification of the assessment rate is needed. Further
rulemaking would be undertaken as necessary. The Committee's 2023-2024
fiscal period budget, and those for subsequent fiscal periods, will be
reviewed and, as appropriate, approved by AMS.
Initial Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA) (5 U.S.C. 601-612), AMS has considered the economic impact of
this proposed rule on small entities. Accordingly, AMS has prepared
this initial regulatory flexibility analysis.
The purpose of the RFA is to fit regulatory actions to the scale of
businesses 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 23 handlers of South Texas onions subject to regulation
under the Order and approximately 55 producers of South Texas onions in
the production area. At the time this analysis was prepared, the Small
Business Administration (SBA) defined small agricultural service firms
as those having annual receipts of less than $34,000,000 (North
American Industry Classification System (NAICS) code 115114,
Postharvest Crop Activities), and small agricultural producers of
onions as those having annual receipts of less than $3,750,000 (NAICS
code 111219, Other Vegetable farming) (13 CFR 121.201).
According to data from Market News and production records from the
Committee, the average price for South Texas onions handled during the
2022-2023 season was approximately $23.25 per 50-pound container or
equivalent, with total shipments of around 3,020,000 50-pound
containers or equivalents shipped. Based on the average terminal market
price and shipment information, the number of handlers, and assuming a
normal distribution, the majority of South Texas onion handlers have
estimated average annual receipts of significantly less than
$34,000,000 ($23.25 multiplied by 3,020,000 50-pound containers or
equivalents equals $70,215,000, divided by 23 handlers equals
$3,052,826 per handler).
In addition, based on data from the National Agricultural
Statistics Service and the Committee, the average price producers
received for South Texas onions during the 2022-2023 season was
approximately $17 per 50-pound container or equivalent, with total
shipments of around 3,020,000 million 50-pound containers or
equivalents. Using the average price producers received and shipment
information, the number of producers, and assuming a normal
distribution, the majority of producers have estimated average annual
receipts of significantly less than $3,750,000 ($17 multiplied by
3,020,000 50-pound containers or equivalents equals $51,340,000,
divided by 55 producers equals $933,455 per producer). Thus, the
majority of handlers and producers of South Texas
[[Page 31095]]
onions may be classified as small entities.
This proposal would increase the assessment rate collected from
handlers for the 2023-2024 and subsequent fiscal periods from $0.05 to
$0.08 per 50-pound container or equivalent of South Texas onions. The
Committee unanimously recommended 2023-2024 fiscal period expenditures
of $280,657 and an assessment rate of $0.08 per 50-pound container or
equivalent of South Texas onions. The proposed assessment rate of $0.08
is $0.03 higher than the current rate. The Committee expects the
industry to handle 3,600,000 50-pound container or equivalent of South
Texas onions during the 2023-2024 fiscal period. Thus, the $0.08 per
50-pound container or equivalent rate should provide $288,000 in
assessment income (3,600,000 50-pound containers or equivalents
multiplied by $0.08 assessment rate). Income derived from handler
assessments and other sources including interest income, should be
adequate to cover budgeted expenses.
The major expenditures recommended by the Committee for the 2023-
2024 fiscal period include $92,000 for research and marketing; $80,000
for the compliance program; and $37,050 for administrative expenses. By
comparison, budgeted expenses for these items during the 2022-2023
fiscal period were $20,000; $50,000; and $37,050, respectively.
The Committee recommended increasing the assessment rate to meet
necessary expenses, fund marketing research, and restore reserves,
which were depleted between March 2021 and December 2022 when the
Committee ceased collecting assessments during a temporary suspension
of the marketing order. The Committee estimates shipments for the 2023-
2024 season to be around 3,600,000 50-pound containers or equivalents.
Given the estimated number of shipments, the current assessment rate of
$0.05 would generate $180,000 in assessment income (3,600,000 50-pound
containers or equivalents multiplied by $0.05 assessment rate), which
would not cover budgeted expenses. By increasing the assessment rate by
$0.03 to $0.08, assessment income would be $288,000 (3,600,000 50-pound
containers or equivalents multiplied by $0.08 assessment rate). This
amount should provide sufficient funds to meet anticipated 2023-2024
expenses, while adding money to the financial reserve.
Prior to arriving at this budget and proposed assessment rate, the
Committee discussed various alternatives, including maintaining the
current assessment rate of $0.05 per 50-pound container or equivalent
or increasing the assessment rate to $0.06. However, neither of these
assessment rates would provide enough income to cover budgeted
expenses. Consequently, these alternative assessment rates were
rejected.
A review of historical and preliminary information pertaining to
the upcoming fiscal period indicates the average grower price for the
2023-2024 season should be approximately $16.00 per 50-pound container
or equivalent of South Texas onions. Therefore, the estimated
assessment revenue for the 2023-2024 crop year as a percentage of total
grower revenue would be about 0.5 percent ($0.08 assessment rate
divided by $16.00 multiplied by 100).
This proposed action would increase the assessment obligation
imposed on South Texas onion handlers. Assessments are applied
uniformly on all handlers, and some of the costs may be passed on to
producers. However, these costs are expected to be offset by the
benefits derived by the operation of the Order.
The Committee's meetings are widely publicized throughout the South
Texas onion industry and all interested persons are invited to attend
the meetings and participate in Committee deliberations on all issues.
Like all Committee meetings, the November 1, 2023, meeting was a public
meeting and all entities, both large and small, were able to express
views on this issue. Finally, interested persons are invited to submit
comments on this proposed rule, including the regulatory and
information collection impacts of this action on small businesses.
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 OMB and assigned OMB No. 0581-0178, Vegetable
and Specialty Crops. No changes in those requirements would be
necessary as a result of this proposed rule. Should any changes become
necessary, they would be submitted to OMB for approval.
This proposed rule would not impose any 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.
AMS has not identified any relevant Federal rules that duplicate,
overlap, or conflict with this proposed rule.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at:
<a href="https://www.ams.usda.gov/rules-regulations/moa/small-businesses">https://www.ams.usda.gov/rules-regulations/moa/small-businesses</a>. Any
questions about the compliance guide should be sent to Richard Lower at
the previously mentioned address in the FOR FURTHER INFORMATION CONTACT
section.
After consideration of all relevant material presented, including
the information and recommendations submitted by the Committee and
other available information, AMS has determined that this proposed rule
is consistent with and would effectuate the purposes of the Act.
A 30-day comment period is provided to allow interested persons to
comment on this proposed rule. All written comments timely received
will be considered before a final determination is made on this
rulemaking.
List of Subjects in 7 CFR Part 959
Marketing agreements, Onions, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, the Agricultural
Marketing Service proposes to amend 7 CFR part 959 as follows:
PART 959--ONIONS GROWN IN SOUTH TEXAS
0
1. The authority citation for part 959 continues to read as follows:
Authority: 7 U.S.C. 601-674.
0
2. Revise Sec. 959.237 to read as follows:
Sec. 959.237 Assessment rate.
On and after August 1, 2023, an assessment rate of $0.08 per 50-
pound container or equivalent is established for South Texas onions.
Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2024-08679 Filed 4-23-24; 8:45 am]
BILLING CODE P
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