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khammond on DSKJM1Z7X2PROD with PROPOSALS

Federal Register / Vol. 86, No. 148 / Thursday, August 5, 2021 / Proposed Rules funded by assessments imposed on handlers.
This rule proposes termination of the Order and the rules and regulations issued thereunder. The Order regulates the handling of onions grown in South Texas. This action is based on the results of a continuance referendum in which producers failed to support the continuation of the Order. USDA
believes termination of this program would be appropriate as the Order is no longer favored by industry producers.
Section 959.84d of the Order provides that USDA shall conduct a referendum within six years after the establishment of the Order and every sixth year thereafter to ascertain whether continuance is favored by producers. The section also states USDA
would consider termination of the Order if less than two-thirds of the producers voting in the referendum and producers of less than two-thirds of the volume of onions represented in the referendum favor continuance. As required by the Order, USDA held a continuance referendum among South Texas onion producers from September 21 through October 13, 2020, to determine if they favored continuation of the program.
Ballots were mailed to 71 producers in the South Texas production area. For the referendum, 23 valid ballots were cast. The results show 57 percent of the producers voting, who produced 53
percent of the volume represented in the referendum, favored continuation of the program. The Order failed to meet both of the two-thirds criteria for continuance, demonstrating a lack of the producer support needed to carry out the objectives of the Act.
Section 608c16A of the Act provides that USDA terminate or suspend the operation of any order whenever the order or any provision thereof obstructs or does not tend to effectuate the declared policy of the Act.
Based on the foregoing, and pursuant to 608c16A of the Act and 959.84 of the Order, USDA is considering termination of the Order. If USDA
decides to terminate the Order, trustees would be appointed to conclude and liquidate the affairs of the Committee and would continue in that capacity until discharged by USDA. In addition, USDA would notify Congress of the proposed termination of the Order not later than 60 days before the Order is terminated pursuant to 608c16A of the Act.
A notice announcing the results of the referendum was issued on January 5, 2021. On March 15, 2021, USDA
suspended collection of assessments under the Order while the proposed termination of the program is being
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processed by USDA. All other provisions, including grade and size requirements, remain in effect until the Order is terminated.
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.
Because this proposed rule would terminate regulations for domestically produced onions, a corresponding change to the imported regulations would also be required.
Minimum grade, size, maturity, and quality requirements for onions imported into the United States are established under 980.117. Currently, from March 10 through June 4 of each marketing year, imported onions, not including pearl and cipolline onions, must comply with grade, size, quality, and maturity requirements imposed under the Order for South Texas onions.
From June 5 through March 9 of each marketing year, and for the entire year for pearl and cipolline onions, imported onions are subject to the requirements of Marketing Order 958, which regulate onions handled in Idaho and Oregon.
This proposal would amend 980.117
by removing the requirements based on the Order for South Texas onions from March 10 through June 4. The import requirements for onions based on Marketing Order 958 would remain in effect from June 5 through March 9, and for the entire year for pearl and cipolline onions.
Initial Regulatory Flexibility Analysis Pursuant to requirements set forth in the Regulatory Flexibility Act RFA 5
U.S.C. 601612, the Agricultural Marketing Service 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 approximately 70 producers of onions in the production area and approximately 30 handlers subject to regulation under the Order. There are 53
onion importers. Small agricultural producers are defined by the Small Business Administration SBA as those
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having annual receipts of less than $1,000,000, and small agricultural service firms are defined as those having annual receipts of less than $30,000,000
13 CFR 121.201.
According to the National Agricultural Statistics Service NASS, the weighted producer price for South Texas onions during the 201819 season was around $9.09 per 50-pound equivalent. The Committee reports total onion shipments were approximately 4.2 million 50-pound equivalents. Using the weighted average price and shipment information, the total 201819
crop value is estimated at $38.2 million.
Dividing the crop value by the estimated number of producers 70 yields an estimated average receipt per producer of $545,714, so the majority of producers would have annual receipts of less than $1,000,000.
The average handler price for South Texas onions during the 201819 season was approximately $11.00 per 50-pound equivalent. Using the average price and shipment information, the total 201819
handler crop value is estimated at $46.2
million. Dividing this figure by the number of handlers 30 yields an estimated average annual handler receipts of $1.54 million, which is below the SBA threshold for small agricultural service firms. Thus, the majority of onion producers and handlers may be classified as small entities.
Mexico, Peru, and Canada are the major onion producing countries exporting onions to the United States. In 2019, shipments of onions imported into the United States totaled approximately 543,343 metric tons.
Information from USDAs Economic Research Service indicates the dollar value of imported onions was approximately $431 million in 2019.
Using this value and the number of importers 53, most importers would have annual receipts of less than $30,000,000 for onions.
This rule proposes termination of the Order and the rules and regulations issued thereunder, regulating the handling of onions grown in South Texas. Section 959.84d of the Order requires USDA to conduct a referendum every sixth year to ascertain whether continuance is favored by producers.
USDA would consider termination of the Order if less than two-thirds of the producers voting in the referendum and producers of less than two-thirds of the volume of onions represented in the referendum favor continuance. Based on the results of a recent continuance referendum, support for the Order failed to meet the two-thirds requirement by vote or volume indicating continuation
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