Onions Grown in South Texas; Increased Assessment Rate, 67520-67522 [2024-18709]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 89, Number 162 (Wednesday, August 21, 2024)]
[Rules and Regulations]
[Pages 67520-67522]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-18709]


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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: Final rule.

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SUMMARY: This final rule implements 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 assessment rate will remain in effect indefinitely unless modified, 
suspended, or terminated.

DATES: Effective September 20, 2024.

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: [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, 
amends regulations issued to carry out a marketing order as defined in 
7 CFR 900.2(j). This 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 final 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 action 
falls within a category of regulatory actions that the Office of 
Management and Budget (OMB) exempted from Executive Order 12866 review.
    This final 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 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 final 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 assessment rate 
will 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 section 8c(15)(A) of the 
Act (7 U.S.C. 608c(15)(A)), any handler subject to an order may file 
with the U.S. Department of Agriculture (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 final rule increases 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 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

[[Page 67521]]

handled for the 2023-2024 and subsequent fiscal periods. In comparison, 
last fiscal period's budgeted expenditures were $177,657. The 
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 under 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 will 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) will be kept within the maximum permitted by the Order 
(approximately two fiscal periods' expenses as authorized in Sec.  
959.43).
    The assessment rate will 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 will be in effect for an indefinite 
period, the Committee will 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.

Final 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 final rule 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 
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 onions may be 
classified as small entities.
    This final rule increases 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 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.

[[Page 67522]]

    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 
under 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 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 action increases 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 were invited to submit 
comments on this 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 final rule. Should any changes become 
necessary, they would be submitted to OMB for approval.
    This final rule will 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 rule.
    A proposed rulemaking concerning this action was published in the 
Federal Register on April 24, 2024 (89 FR 31093). Copies of the 
proposed rulemaking were provided to all South Texas onion handlers. 
The proposal was also made available through the internet by USDA and 
the Office of the Federal Register. A 30-day comment period ending May 
24, 2024, was provided for interested persons to respond to the 
proposal. AMS received one comment during the comment period. The 
comment opposed the revised assessment rate but provided no substantive 
data or justification for AMS to evaluate. After reviewing the comment, 
AMS made no changes 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: 
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.
    After consideration of all relevant material presented, including 
the information and recommendations submitted by the Committee and 
other available information, USDA has determined that this final rule 
is consistent with and effectuates the purposes of the Act.

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 amends 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. Section 959.237 is revised 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. 2024-18709 Filed 8-20-24; 8:45 am]
BILLING CODE 3410-02-P