[Federal Register Volume 59, Number 217 (Thursday, November 10, 1994)]
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From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-27920]


  Federal Register / Vol. 59, No. 217 / Thursday, November 10, 1994 /
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[[Page Unknown]]

[Federal Register: November 10, 1994]


                                                   VOL. 59, NO. 217

                                        Thursday, November 10, 1994

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 932 and 944

[Docket No. FV94-932-1FIR]

 

Olives Grown in California and Imported Olives; Final Rule 
Establishing Limited Use Olive Requirements During the 1994-95 Crop 
Year

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (Department) is adopting as a 
final rule without change, the provisions of an interim final rule 
which authorized the use of smaller sized olives in the production of 
limited use styles for California olives during the 1994-95 crop year. 
This rule is intended to allow more olives into fresh market channels 
and is consistent with current market demand for olives. As required 
under section 8e of the Agricultural Marketing Agreement Act of 1937, 
this rule also changes the olive import regulation.

EFFECTIVE DATE: December 12, 1994.

FOR FURTHER INFORMATION CONTACT: Caroline C. Thorpe, Marketing Order 
Administration Branch, Fruit and Vegetable Division, AMS, USDA, P.O. 
Box 96456, Room 2523-S, Washington, D.C. 20090-6456; telephone (202) 
720-5127, or Terry Vawter, California Marketing Field Office, Fruit and 
Vegetable Division, AMS, USDA, 2202 Monterey Street, Suite 102-B, 
Fresno, CA 93721, telephone (209) 487-5901.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement No. 148 and Order No. 932 (7 CFR Part 932), as amended, 
regulating the handling of olives grown in California, hereinafter 
referred to as the order. 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.
    This rule is also issued under section 8e of the Act, which 
requires the Secretary of Agriculture to issue grade, size, quality, or 
maturity requirements for certain listed commodities, including olives, 
imported into the United States that are the same as, or comparable to, 
those requirements imposed upon the domestic commodities regulated 
under the Federal marketing orders.
    The Department is issuing this rule in conformance with Executive 
Order 12866.
    This rule has been reviewed under Executive Order 12778, Civil 
Justice Reform. This rule is not intended to have retroactive effect. 
This rule will not preempt any State or local laws, regulations, or 
policies, unless they present an irreconcilable conflict with this 
rule.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 608(15)(A) of the 
Act, any handler subject to an order may file with the Secretary 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 requesting a modification of the order or to be exempted 
therefrom. A handler is afforded the opportunity for a hearing on the 
petition. After the hearing the Secretary 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 in equity to review the 
Secretary's ruling on the petition, provided a bill in equity is filed 
not later than 20 days after date of the entry of the ruling.
    There are no administrative procedures which must be exhausted 
prior to any judicial challenge to the provisions of import regulations 
issued under section 8e of the Act.
    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act (RFA), the Administrator of the Agricultural Marketing 
Service (AMS) has considered the economic impact of this action on 
small entities.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and rules issued thereunder, are unique in that 
they are brought about through group action of essentially small 
entities acting on their own behalf. Thus, both statutes have small 
entity orientation and compatibility. Import regulations issued under 
the Act are based on those established under Federal marketing orders.
    There are 5 handlers of California olives that will be subject to 
regulation under the order during the current season, and there are 
about 1,200 olive producers in California. There are approximately 25 
importers of olives subject to the olive import regulation. Small 
agricultural producers have been defined by the Small Business 
Administration (13 CFR 121.601) as those whose annual receipts are less 
than $500,000, and small agricultural service firms, which include 
handlers and importers, have been defined by the Small Business 
Administration as those having annual receipts of less than $5,000,000. 
None of the domestic olive handlers may be classified as small 
entities. The majority of olive producers and importers may be 
classified as small entities.
    Nearly all of the olives grown in the United States are produced in 
California. The growing areas are scattered throughout California with 
most of the commercial production coming from inland valleys. The 
majority of olives are produced in central California. California 
olives are primarily used for canned ripe whole and whole pitted olives 
which are eaten out of hand as hors d'oeuvres or used as an ingredient 
in cooking and in salads. The canned ripe olive market is essentially a 
domestic market. A few shipments of California olives are exported.
    Olive production has fluctuated from a low of 24,200 tons during 
the 1972-73 crop year to a high of 163,023 tons during the 1992-93 crop 
year. The California Olive Committee (committee) indicated that 1993-94 
production totalled about 120,049 tons. Total production for the 1994-
95 crop year is estimated to be 95,000 tons. Because olive trees need 
to restore their nutrients from one season to the next, various 
varieties of olives produced in California have alternate bearing 
tendencies. This results in high production one year and low the next, 
which usually causes the total crop to vary greatly from year to year. 
This crop year's estimated production is expected to be smaller than 
last year due to weather conditions early in the season which resulted 
in poor fruit pollination.
    However, based on past production and marketing experience, the 
committee believes that handlers will need smaller sized olives during 
the 1994-95 crop year to meet market demand for limited use styles of 
canned olives. Limited use olives are too small to meet the minimum 
size requirements established for whole and whole pitted canned ripe 
olives. However, they are large enough to be suitable for processing 
into limited use styles such as wedges, halves, slices, or segments. 
Absent this action, olives which are smaller than those authorized for 
whole and whole pitted canning uses would have to be disposed of by 
handlers into non-canning uses such as crushing into oil.
    Paragraph (a)(3) of Sec. 932.52 of the order provides that 
processed olives smaller than the sizes prescribed for whole and whole 
pitted styles may be used for limited uses if recommended by the 
committee and approved by the Secretary. Until October 1, 1991, 
paragraph (a)(3) also prescribed minimum sizes, by variety group, which 
could be authorized for use in the production of limited use styles by 
the Secretary.
    Effective October 1, 1991, certain non-canning size disposition 
requirements specified in Sec. 932.51(a)(3) and minimum sizes 
authorized for limited use specified in Sec. 932.52(a)(3) of the 
marketing order were suspended. The committee may now recommend the use 
of olives for limited uses that are smaller than those previously 
permitted under the order. Minimum size and grade requirements may be 
recommended annually by the committee and approved by the Secretary. 
During the past three crop years, 1991-92, 1992-93, and 1993-94, the 
committee recommended sizes smaller than those previously authorized.
    The minimum sizes which could previously be authorized for limited 
uses were established in a 1971 amendment to the marketing order. 
Olives smaller than the prescribed minimum sizes which could be 
authorized for limited uses had to be disposed of through less 
profitable non-canning uses such as crushing for oil. Returns to 
producers are lower on fruit used for such purposes. The use of smaller 
sized olives for limited use styles has been authorized in all but two 
crop years since the order was promulgated in 1965.
    This final rule finalizes an interim final rule that will help 
growers and handlers to meet the growing market demand for limited use 
style olives based upon current conditions. The limited use size 
requirements allow the use of sizes which would otherwise have to be 
disposed of for less profitable, non-canning uses. Permitting the use 
of such smaller olives for limited use styles would therefore improve 
grower returns.
    On July 13, 1994, the committee recommended by a vote of 15-1, to 
establish grade and size regulations for limited use size olives during 
the 1994-95 crop year pursuant to paragraph (a)(3) of Sec. 932.52 of 
the order. The one handler member who dissented was concerned that 
approval of limited use size olives would be detrimental to handlers, 
due to already large inventories of such olives from the two previous 
seasons. The recommended grade and size requirements are the same as 
those established during the 1990-91 crop year, which means slightly 
larger minimum sizes than were in effect during the 1991-92, 1992-93, 
and 1993-94 crop years.
    The specified sizes for the different olive variety groups are the 
minimum sizes which are deemed desirable for use in the production of 
limited use styles at this time. As in past years, permitting the use 
of the smaller olives in the production of limited use styles allowed 
handlers to take advantage of the strong market for halved, segmented, 
sliced, and chopped canned ripe olives. Handlers will be able to market 
more olives with this relaxation in size requirements than under 
regulations effective prior to the interim final rule.
    The committee also based its decision on certain production and 
market factors. The last three crop years were the first crop years 
that limited use olives were authorized at sizes below the 1990-91 crop 
year minimum size requirements. Prior to the 1990-91 crop year, the 
committee investigated limited use olives that were below permitted 
minimum sizes. From investigations and surveys within the industry, the 
committee determined that limited use olives below 1990-91 minimum 
sizes could be efficiently sliced using current technology. However, 
consumer interest in and need for such olives also had to be 
determined, specifically for smaller sliced olive rings. Thus, minimum 
size requirements below the 1990-91 crop year were recommended and 
became effective for limited use olives.
    During the following three seasons, the industry experienced a 
higher percentage of broken pieces in the smaller olives than with the 
slightly larger sizes. The U.S. Standards for Grades of Canned Ripe 
Olives (Standards) define a broken piece as any piece of olive that is 
less than three quarters of a full unit. This situation had a negative 
impact on the California olive market as the extra broken pieces caused 
customers to complain about the lack of uniformity and poorer quality 
of product from these smaller sizes. Such olives also had to compete 
with imported sliced olives that had fewer broken pieces. Therefore, 
the committee recommended slightly larger minimum size requirements for 
limited use olives in order to improve the quality of and enhance the 
market for California limited use olives.
    Also, the committee estimates that production for this crop year is 
expected to be at 95,000 tons, which is smaller than the previous two 
seasons. Weather conditions early in the crop year caused poor 
pollination resulting in a smaller crop with an uneven distribution of 
sizes. The 1992-93 and 1993-94 crop years produced large crops of 
163,023 tons and 120,049 tons, respectively. During years with large 
olive crops, the ratio of limited use olives to other sizes tends to be 
higher; there are more limited use size olives in proportion to the 
other sizes. During years with small olive crops, the ratio of smaller 
olives to other sizes is smaller; there tends to be fewer limited use 
size olives in proportion to the other sizes. The increased 
availability of limited use sized fruit could be reflected in handler 
processing for the last three seasons. For example, during the 1992-93 
crop year, 19 percent of the olives (163,024 tons) processed by 
handlers were limited use, and during the 1991-92 crop year, 11 percent 
of total olives (63,259 tons) processed by handlers were limited use. 
Although limited use minimum sizes were larger during the 1990-91 
season, limited use olives processed by handlers were 16 percent of 
total olives (126,879 tons) purchased by handlers. Thus, unlike the two 
previous seasons, fewer small limited use olives are expected to be 
harvested this season. The percentage of limited use olives is expected 
to be smaller. The slight increase in minimum limited use size 
requirements being established for the 1994-95 season is therefore not 
expected to greatly impact available supplies.
    Thus, it is found that permitting limited use olives as recommended 
by the committee is expected to improve market conditions, and grower 
returns, and meet market needs for limited use style olives.
    Section 8(e) of the Act requires that whenever grade, size, 
quality, or maturity requirements are in effect for olives under a 
domestic marketing order, imported olives must meet the same or 
comparable requirements. This action allows smaller olives for limited 
use styles under the marketing order. Therefore, a corresponding change 
is needed in the olive import regulation.
    Canned ripe olives, and bulk olives for processing into canned ripe 
olives, imported into the United States must meet certain minimum grade 
and size requirements specified in Olive Regulation 1 (7 CFR 944.401). 
All canned ripe olives are required to be inspected and certified prior 
to importation (release from custody of the United States Custom 
Service), and all bulk olives for processing into canned ripe olives 
must be inspected and certified prior to canning. ``Canned ripe 
olives'' means olives in hermetically sealed containers and heat 
sterilized under pressure, of two distinct types, ``ripe'' and ``green-
ripe'', as defined in the Standards. The term does not include Spanish-
style green olives.
    Any lot of olives failing to meet the import requirements may be 
exported, disposed of, or shipped for exempt uses. Exportation or 
disposal of such olives would be accomplished under the supervision of 
the Processed Products Branch of the Fruit and Vegetable Division, with 
the costs of certifying the disposal of the olives borne by the 
importer. Exempt olives are those imported for processing into oil or 
donation to charity. Any person may also import up to 100 pounds 
(drained weight) of canned ripe olives or bulk olives exempt from these 
grade and size requirements.
    This final rule finalizes an interim final rule that modified 
paragraph (b)(12) of the olive import regulation to authorize the 
importation of bulk olives which do not meet the minimum size 
requirements established for olives for whole and whole pitted uses to 
be used in the production of limited use styles during the 1994-1995 
crop year. This rule also finalizes establishment of size regulations 
for such olives in paragraph (b)(12).
    The committee recommended authorizing establishment of minimum 
sizes for use in the production of limited use styles during the 1994-
95 crop year. The sizes are specified in terms of minimum weights for 
individual olives in various variety groups and are the same for both 
domestic and imported olives. An extra category is continued in the 
import regulation to apply comparable requirements for varieties not 
grown domestically. The minimum sizes for import requirements are as 
follows:

Variety Group 1, except the Ascolano, Barouni, or St. Agostino 
varieties--\1/90\ pound
Variety Group 1 of the Ascolano, Barouni, or St. Agostino varieties--
\1/140\ pound
Variety Group 2, except the Obliza variety--\1/180\ pound
Variety Group 2 of the Obliza variety--\1/140\ pound
Olives not identifiable as to variety or variety group--\1/180\ pound

    Each of the categories includes a 35 percent tolerance for olives 
weighing less than the specified minimum size.
    Continuing to permit the use of smaller olives in the production of 
limited use styles will allow importers to take better advantage of the 
strong market for halved, segmented, sliced, and chopped canned ripe 
olives. Importers will be able to import and market more olives than 
would be permitted under regulations prior to the interim final rule 
that relaxed size requirements. This additional opportunity is provided 
to maximize the use of the available olive supply and facilitate market 
expansion. Prior to the interim final rule, the smaller fruit could not 
be imported for limited uses, and would have to be disposed of through 
less profitable, non-canning uses under the supervision of the 
inspection service, exported, or utilized in exempt outlets.
    Based on these considerations, the Administrator of the AMS has 
determined that this action will not have a significant economic impact 
on a substantial number of small entities.
    In accordance with section 8e of the Act, the U.S. Trade 
Representative has concurred with the issuance of this final rule.
    After consideration of all relevant material presented, including 
the committee's recommendation, and other available information, it is 
found that this final rule, as hereinafter set forth, will tend to 
effectuate the declared policy of the Act.

List of Subjects

7 CFR Part 932

    Marketing agreements, Olives, Reporting and recordkeeping 
requirements.

7 CFR Part 944

    Avocados, Food grades and standards, Grapefruit, Grapes, Imports, 
Kiwifruit, Limes, Olives, Oranges.

    For the reasons set forth in the preamble 7 CFR Parts 932 and 944 
are amended as follows:
    1. The authority citation for 7 CFR Parts 932 and 944 continue to 
read as follows:

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

PART 932--OLIVES GROWN IN CALIFORNIA

    Accordingly, the interim final rule amending 7 CFR Part 932 which 
was published at 59 FR 46907 on September 13, 1994, is adopted as a 
final rule without change.

PART 944--FRUITS; IMPORT REGULATIONS

    Accordingly, the interim final rule amending 7 CFR Part 944 which 
was published at 59 FR 46907 on September 13, 1994, is adopted as a 
final rule without change.

    Dated: November 4, 1994.
Eric M. Forman,
Deputy Director, Fruit and Vegetable Division.
[FR Doc. 94-27920 Filed 11-9-94; 8:45 am]
BILLING CODE 3410-02-P