Sweet Onions Grown in the Walla Walla Valley of Southeast Washington and Northeast Oregon; Increased Assessment Rate, 39377-39379 [2023-12917]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 88, Number 116 (Friday, June 16, 2023)]
[Proposed Rules]
[Pages 39377-39379]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-12917]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 956

[Doc. No. AMS-SC-23-0006]


Sweet Onions Grown in the Walla Walla Valley of Southeast 
Washington and Northeast Oregon; 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 
Walla Walla Sweet Onion Marketing Committee (Committee) to increase the 
assessment rate established for the 2023 and subsequent fiscal periods. 
The proposed assessment rate would remain in effect indefinitely unless 
modified, suspended, or terminated.

DATES: Comments must be received by July 17, 2023.

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 submitted to the Docket Clerk electronically by 
Email: [email protected] or via the internet at: https://www.regulations.gov. 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: https://www.regulations.gov. 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: Dale Novotny, Marketing Specialist, or 
Gary Olson, Chief, Western Region Branch, Market Development Division, 
Specialty Crops Program, AMS, USDA; Telephone: (503) 326-2724, or 
Email: [email protected] or [email protected].
    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: 
[email protected].

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 
Agreement and Order No. 956, both as amended (7 CFR part 956), 
regulating the handling of sweet onions grown in the Walla Walla Valley 
of southeast Washington and northeast Oregon. Part 956 (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 Walla Walla sweet onions 
operating within the area of production, and a public member.
    The Agricultural Marketing Service (AMS) is issuing this proposed 
rule in conformance with Executive Orders 12866 and 13563. 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. This 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 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, Walla Walla sweet 
onion handlers are subject to assessments. Funds to administer the 
Order are derived from such assessments. It is intended that the 
assessment rate would be applicable to all assessable Walla Walla sweet 
onions for the 2023 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 section 608c(15)(A) of the 
Act, any handler subject to an order may file with the U.S. Department 
of Agricultrue (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 Walla 
Walla sweet onions handled under the Order from $0.15 per 50-pound bag 
or equivalent, the rate that was established for the 2020 and 
subsequent fiscal periods, to $0.20 per 50-pound bag or equivalent for 
the 2023 and subsequent fiscal periods.
    The Order authorizes the Committee, with the approval of AMS, to 
formulate an annual budget of expenses and collect assessments from 
handlers to administer the program. The 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 and subsequent fiscal periods, the Committee 
recommended, and AMS approved, an assessment rate of $0.15 per 50-pound 
bag or equivalent of Walla Walla sweet onions.\1\ That rate continues 
in effect from fiscal period to fiscal period until modified, 
suspended,

[[Page 39378]]

or terminated by AMS upon recommendation and information submitted by 
the Committee or other information available to AMS.
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    \1\ 85 FR 41323.
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    The Committee met on December 5, 2022, and unanimously recommended 
2023 fiscal period expenditures of $70,400 and an assessment rate of 
$0.20 per 50-pound bag or equivalent of Walla Walla sweet onions 
handled for the 2023 and subsequent fiscal periods. In comparison, last 
year's budgeted expenditures were $85,270. The proposed assessment rate 
of $0.20 per 50-pound bag or equivalent is $0.05 higher than the rate 
currently in effect. The Committee recommended increasing the 
assessment rate to better fund operations using assessment revenue and 
reduce the reliance on reserve funds. The Committee has drawn down its 
financial reserve in recent years to cover Committee expenses and to 
reduce the reserve so as to not exceed approximately two fiscal 
periods' budgeted expenses, in conformance with the Order (7 CFR 
956.44(a)). The Committee projects handler receipts of 262,500 50-pound 
bags or equivalent of assessable Walla Walla sweet onions for the 2023 
fiscal period, which is 16,150 50-pound bags or equivalent more than 
was projected for the 2022 fiscal period.
    The major expenditures recommended by the Committee for the 2023 
fiscal period include $43,400 for administrative expenses, $17,000 for 
promotions, $5,000 for research, and $5,000 for Committee travel. 
Budgeted expenditures for the 2022 fiscal period were $43,400, $31,870, 
$5,000 and $4,000, respectively.
    Walla Walla sweet onions harvested in 2023 will be marketed mostly 
in the spring and summer of the 2023 fiscal period, which follows the 
calendar year. The expected 262,500 50-pound bags or equivalent of 
Walla Walla sweet onions from the 2023 crop would generate $52,500 in 
assessment revenue at the proposed assessment rate (262,500 50-pound 
bags or equivalent of Walla Walla sweet onions multiplied by $0.20 
assessment rate). The remaining $17,900 needed to cover budgeted 
expenditures would come from reserve funds carried over from previous 
fiscal periods. The 2023 fiscal period assessment rate increase should 
be appropriate to ensure the Committee has sufficient revenue, along 
with its reserve, to fully fund its recommended 2023 fiscal period 
budgeted expenditures and maintain a level of reserve funds that the 
Committee believes is appropriate.
    The Committee derived the recommended assessment rate by 
considering anticipated fiscal period expenses, an estimated 2023 crop 
volume of 262,500 50-pound bags or equivalent of assessable Walla Walla 
sweet onions, and the amount of funds available in the authorized 
reserve. Income derived from handler assessments ($52,500) and funds 
from the Committee's authorized reserve ($17,900) are expected to be 
adequate to cover budgeted expenses ($70,400).
    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 would 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 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 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 approximately 15 producers of Walla Walla sweet onions in 
the production area and 11 handlers subject to regulation under the 
Order. Small agricultural producers of Walla Walla sweet onions are 
defined by the Small Business Administration (SBA) as those having 
annual receipts of less than $3,750,000, and small agricultural service 
firms are defined as those whose annual receipts are less than 
$34,000,000 (13 CFR 121.201).
    According to the National Agricultural Statistics Service (NASS), 
the average annual producer price received for dry and fresh market 
onions sold in Washington between 2018 and 2021 ranged from $9.13 to 
$13.30 per hundredweight. The average over those years was 
approximately $10.88 per hundredweight, or $5.44 per 50-pound bag or 
equivalent. Total production of Walla Walla sweet onions for the 2022 
season was reported by the Committee to be 299,993 50-pound bags or 
equivalent. Using the average price from 2018-2021, the most recent 
years for which there is NASS data, the total 2022 crop value of Walla 
Walla sweet onions could therefore be estimated to be $1,631,962 
(299,993 50-pound bags or equivalent multiplied by $5.44 per 50-
pounds). Dividing the crop value by the estimated number of producers 
(15) yields an estimated average receipt per producer of $108,797, 
which is well below the SBA threshold for small producers.
    In addition, according to USDA Market News data, the reported 
average 2021 terminal market price for Walla Walla sweet onions was $35 
per 40-pound carton. Multiplying this figure by 1.25 to adjust for a 
50-pound bag or equivalent yields an average 2021 terminal market price 
of $43.75 per 50-pound bag or equivalent. Multiplying the 2022 Walla 
Walla sweet onion production of 299,993 50-pound bags or equivalent by 
the estimated average price per 50-pound bag or equivalent of $43.75 
equals $13,124,694. Dividing this figure by the 11 regulated handlers 
yields estimated average annual handler receipts of $1,193,154 
($13,124,694 divided by 11 handlers), which is below the SBA threshold 
for small agricultural service firms. Therefore, using the above data, 
all of the producers and handlers of Walla Walla sweet onions may be 
classified as small entities.
    This proposal would increase the assessment rate collected from 
handlers for the 2023 and subsequent fiscal periods from $0.15 to $0.20 
per 50-pound bag or equivalent of Walla Walla sweet onions. The 
Committee unanimously recommended 2023 fiscal period expenditures of 
$70,400 and an assessment rate of $0.20 per 50-pound bag or equivalent 
of Walla Walla sweet onions. The proposed assessment rate of $0.20 is 
$.05 higher than the current rate. The Committee expects the industry 
to handle 262,500 50-pound bags or equivalent of Walla Walla sweet 
onions during the 2023 fiscal period. Thus, the $0.20 per 50-pound bag 
or equivalent rate should provide $52,500

[[Page 39379]]

in assessment income (262,500 50-pound bags or equivalent multiplied by 
$0.20). The Committee also expects to use $17,900 from its financial 
reserve to cover remaining expenses. Income derived from handler 
assessments, along with reserve funds, should be adequate to meet 
budgeted expenditures for the 2023 fiscal period.
    The major expenditures recommended by the Committee for the 2023 
fiscal period include $43,400 for administrative expenses, $17,000 for 
promotions, $5,000 for research, and $5,000 for Committee travel. 
Budgeted expenditures for the 2022 fiscal period were $43,400, $31,870, 
$5,000 and $4,000, respectively.
    In recent years, the Committee has utilized reserve funds to 
partially fund its budgeted expenditures. The Committee recommended 
increasing the assessment rate to better fund 2023 fiscal period 
budgeted expenditures and refrain from excessively drawing down the 
funds held in its reserve. This action would maintain the Committee's 
reserve balance at a level that the Committee believes is appropriate 
and is compliant with the provisions of the Order.
    Prior to arriving at this budget and the proposed assessment rate, 
the Committee discussed various alternatives, including maintaining the 
current assessment rate of $0.15 per 50-pound bag or equivalent and 
increasing the assessment rate by different amounts. However, the 
Committee determined that the recommended assessment rate would be able 
to fund most of the budgeted expenses and avoid drawing down reserves 
at an unsustainable rate. The assessment rate of $0.20 per 50-pound bag 
or equivalent of Walla Walla sweet onions was derived by considering 
anticipated expenses, the projected volume of assessable Walla Walla 
sweet onions, the projected monetary balance held in reserve, and 
additional pertinent factors.
    A review of NASS information indicates that the average producer 
price for the 2018-21 fiscal period was $5.44 per 50-pound bag or 
equivalent. Further, the Committee reported the quantity of assessable 
Walla Walla sweet onions harvested in the 2022 fiscal period was 
299,993 50-pound bags or equivalent, which yields estimated total 
producer revenue for 2022 of $1,631,962 ($5.44 per 50-pound bag or 
equivalent multiplied by 299,993). Therefore, utilizing the assessment 
rate of $0.20 per 50-pound bag or equivalent, assessment revenue for 
the 2022 fiscal period, as a percentage of total producer revenue, 
would be approximately 3.68 percent ($0.20 multiplied by 299,993 per 
50-pound bags or equivalent divided by $1,631,962 and multiplied by 
100).
    This proposed action would increase the assessment obligation 
imposed on handlers. Assessments are applied uniformly on all handlers, 
and some of the costs may be passed on to producers. However, these 
costs would be offset by the benefits derived by the operation of the 
Order.
    The Committee's meetings are widely publicized throughout the 
production area. The Walla Walla sweet 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 December 5, 2022, 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 Walla Walla sweet 
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: 
https://www.ams.usda.gov/rules-regulations/moa/small-businesses. Any 
questions about the compliance guide should be sent to Richard Lower at 
the previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposed rule. All written comments timely received 
will be considered before a final determination is made on this 
proposed rule.

List of Subjects in 7 CFR Part 956

    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 956 as follows:

PART 956--SWEET ONIONS GROWN IN THE WALLA WALLA VALLEY OF SOUTHEAST 
WASHINGTON AND NORTHEAST OREGON.

0
1. The authority citation for 7 CFR part 956 continues to read as 
follows:

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

0
2. Revise Sec.  956.202 to read as follows:


Sec.  956.202  Assessment rate.

    On and after January 1, 2023, an assessment rate of $0.20 per 50-
pound bag or equivalent is established for Walla Walla sweet onions.

Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2023-12917 Filed 6-15-23; 8:45 am]
BILLING CODE P