A proposed rule from the USDA would implement a recommendation from the South Texas Onion Committee to increase the assessment rate established for South Texas onions.
The proposal, published April 24, would increase the assessment for the 2023-24 and subsequent fiscal periods from 5 cents to 8 cents per 50-pound container for South Texas onions, according to the proposal.
Comments on the proposal must be received by May 24, according to the agency.
The USDA said the committee met Nov. 1 last year and unanimously recommended 2023-24 fiscal period expenditures of $280,657 and an assessment rate of 8 cents per 50-pound container or equivalent of South Texas onions handled for the 2023-24 and subsequent fiscal periods.
In comparison, last fiscal period’s budgeted expenditures were $177,657.
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 agency said.
The committee estimates shipments for the 2023-24 season to be around 3.6 million 50-pound containers or equivalents, an increase from the 3.02 million 50-pound containers or equivalents handled for the 2022-2023 fiscal period.
The major expenditures recommended by the committee for the 2023-24 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 5 cents, the expected 3.6 million 50-pound containers or equivalents would generate $180,000 in assessment revenue, 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 to 8 cents, assessment income would generate $288,000 in assessment revenue. This amount should be appropriate to ensure the committee has sufficient revenue to fully fund its recommended 2023-24 fiscal period budgeted expenditures and to begin replenishing the committee’s reserve funds, the agency said.
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, according to the agency.
Written comments concerning the proposed rule can be sent to the docket clerk at MarketingOrderComment@usda.gov.
