[Federal Register Volume 60, Number 159 (Thursday, August 17, 1995)]
[Rules and Regulations]
[Pages 42772-42774]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-20355]



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DEPARTMENT OF AGRICULTURE
7 CFR Parts 932 and 944

[Docket No. FV95-932-1IFR]


Olives Grown in California and Imported Olives; Establishment of 
Limited Use Olive Grade and Size Requirements During the 1995-96 Crop 
Year

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This interim final rule authorizes the use of smaller sized 
olives in the production of limited use styles for California olives 
during the 1995-96 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 import 
regulation so that it conforms with the requirements established under 
the California olive marketing order.

DATES: Effective August 21, 1995; comments received by September 18, 
1995 will be considered prior to issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent in triplicate to the Docket 
Clerk, Fruit and Vegetable Division, AMS, USDA, room 2525-S, P.O. Box 
96456, Washington, DC 20090-6456, or by facsimile at 202-720-5698. All 
comments should reference the docket number and the date and page 
number of this issue of the Federal Register and will be made available 
for public inspection in the Office of the Docket Clerk during regular 
business hours.

FOR FURTHER INFORMATION CONTACT: 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; or 
Caroline C. Thorpe, Marketing Order Administration Branch, Fruit and 
Vegetable Division, AMS, USDA, P.O. Box 96456, room 2523-S, Washington, 
DC 20090-6456; telephone (202) 720-5127.

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 imposed upon the domestic commodities regulated under the Federal 
marketing orders.
    The Department of Agriculture (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 

[[Page 42773]]
    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 who 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 (913 CFR 121.601) as those whose annual receipts are 
less than $500,000; and small agricultural service firms, which 
includes 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. California olives are primarily used for canned black 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 1994-95 
production totalled about 80,925 tons. Total production for the 1995-96 
crop year is estimated to be 75,500 tons. This is the first time that 
there have been two consecutive years of declining production. The 
unprecedented and unusual rains, poor pollination, and cool weather 
during the Spring of this year have resulted in a lower than normal 
fruit crop set on the trees.
    Olive trees generally need to restore their nutrients from one 
season to the next, resulting in various varieties of olives produced 
in California having alternate bearing characteristics. This may result 
in high production one year and low the next, which can cause the total 
crop to vary greatly from year to year.
    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 use styles if recommended by the 
committee and approved by the Secretary. The minimum sizes which can be 
authorized for limited uses were established in a 1971 amendment to the 
marketing order. Olives smaller than the prescribed minimum sizes which 
are authorized for limited uses must 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 rule will help growers and handlers meet the growing market 
demand for limited use style olives based upon current conditions. This 
demand can be illustrated in the record of shipments of sliced olives 
in the previous three years. Shipments of one type of limited use style 
fruit (sliced) totalled over 29,000 tons in the 1992-93 season, 34,000 
tons in the 1993-94 season, and an estimated 30,000 tons in the 1994-95 
season. 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 12, 1995, the committee recommended, by a unanimous vote, 
establishment of grade and size regulations for limited use size olives 
during the 1995-96 crop year pursuant to paragraph (a)(3) of 
Sec. 932.52 of the order.
    Based on past production and marketing experience, the committee 
believes that handlers will need smaller sized olives during the 1995-
96 crop year to meet market demand for limited use styles of canned 
olives. Limited use size 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.
    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 allows 
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 than would be permitted in the absence of this relaxation 
in size requirements.
    Also, the committee estimates that production for this crop year is 
expected to be at 75,500 tons, which is smaller than the previous two 
seasons. The 1993-94 and 1994-95 crop years produced larger crops of 
120,049 tons, and 80,925 tons, respectively.
    During years with large olive crops, the ratio of limited use size 
olives to other sizes tends to be higher; there may be 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 tends to be 
smaller; there may be fewer limited use size olives in proportion to 
the other sizes. The increased availability of limited use size fruit 
can be reflected in handler processing for the last three seasons. For 
example, during the 1992-93 crop year, 19 percent of the olives (31,175 
tons) received by handlers were classified as limited use sizes as 
compared with 16 percent of the olives (19,465 tons) in 1993-94, and an 
estimated 9 percent of the olives (7,047 tons) in 1994-95. Thus, due to 
the poor pollination and sporadic fruit set of the 1995-96 crop, fewer 
limited use size olives are expected to be available for harvest. The 
percentage of limited use size olives available to handlers is, 
therefore, expected to be smaller.
    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 rule 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 

[[Page 42774]]
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 U.S. Standards for Grades of Canned Ripe Olives. 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 interim final rule modifies 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 1995-96 crop year.
    Permitting the use of smaller olives in the production of limited 
use styles will allow importers to better take 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 in the absence of this relaxation in size requirements. This 
additional opportunity is provided to maximize the use of the available 
olive supply and facilitate market expansion. In the absence of this 
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 interim final 
rule.
    After consideration of all relevant material presented, including 
the committee's recommendation, and other available information, it is 
found that this interim final rule, as hereinafter set forth, will tend 
to effectuate the declared policy of the Act.
    Pursuant to 5 U.S.C. 553, it is also found and determined upon good 
cause that it is impracticable, unnecessary, and contrary to the public 
interest to give preliminary notice prior to putting this rule into 
effect and that good cause exists for not postponing the effective date 
of this rule until 30 days after publication in the Federal Register 
because: (1) The 1995-96 crop year began August 1, 1995, and this rule 
needs to become effective as soon as possible to cover as much as the 
crop as possible; (2) this rule relaxes minimum size requirements; (3) 
California olive handlers are aware of this rule as it was discussed 
and unanimously recommended by the committee at a public meeting; and 
(4) this rule provides a 30-day comment period and any comments 
received will be considered prior to finalization of this rule.

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 continues to 
read as follows:

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

PART 932--OLIVES GROWN IN CALIFORNIA

    2. In Sec. 932.153, the section heading and paragraphs (a), (b) 
introductory text, and (b)(1) are revised to read as follows:


Sec. 932.153  Establishment of grade and size requirements for 
processed 1995-96 crop year olives for limited uses.

    (a) Grade. On and after August 1, 1995, any handler may use 
processed olives of the respective variety group in the production of 
limited use styles of canned ripe olives if such olives were processed 
after July 31, 1995, and meet the grade requirements specified in 
Sec. 932.52(a)(1) as modified by Sec. 932.149.
    (b) Sizes. On and after August 1, 1995, any handler may use 
processed olives in the production of limited use styles of canned ripe 
olives if such olives were harvested during the period August 1, 1995, 
through July 31, 1996, and meet the following requirements:
    (1) The processed olives shall be identified and kept separate and 
apart from any olives harvested before August 1, 1995, or after July 
31, 1996.
* * * * *

PART 944--FRUITS; IMPORT REGULATIONS

    3. In Sec. 944.401, paragraph (b)(12) introductory text is revised 
to read as follows:


Sec. 944.401  Olive Regulation 1.

* * * * *
    (b) * * *
    (12) Imported bulk olives when used in the production of canned 
ripe olives must be inspected and certified as prescribed in this 
section. Imported bulk olives which do not meet the applicable minimum 
size requirements specified in paragraphs (b)(2) through (b)(11) of 
this section may be imported during the period August 1, 1995, through 
July 31, 1996, for limited use, but any such olives so used shall not 
be smaller than the following applicable minimum size:
* * * * *
    Dated: August 11, 1995.
Terry C. Long,
Acting Deputy Director, Fruit and Vegetable Division.
[FR Doc. 95-20355 Filed 8-16-95; 8:45 am]
BILLING CODE 3410-02-P