[Federal Register Volume 60, Number 217 (Thursday, November 9, 1995)]
[Rules and Regulations]
[Pages 56504-56506]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-27814]



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DEPARTMENT OF AGRICULTURE
7 CFR Parts 932 and 944

[Docket No. FV95-932-1FIR]


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: 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 1995-96 crop year. 
This final rule allows 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 
final rule also changes the olive import regulation so that it conforms 
with the requirements established under the California olive marketing 
order.

EFFECTIVE DATE: December 11, 1995.

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 final 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 final 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 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 

[[Page 56505]]
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 are 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.
    An interim final rule was issued on August 11, 1995, and published 
in the Federal Register (60 FR 42772, August 17, 1995), with an 
effective date of August 21, 1995. That rule authorized the use of 
smaller-sized limited use olives under the order and for importation 
into the U.S. during the 1995-96 crop year. That rule provided a 30-day 
comment period which ended September 18, 1995. No comments were 
received.
    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), the agency 
responsible for local administration of the order, 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 unseasonal 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 uses 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. Permitting the use of such smaller olives for limited use 
styles would, therefore, improve grower returns.
    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. This rule will continue to 
permit handlers to market more olives than under regulations effective 
prior to the interim final rule.
    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 final rule finalizes an interim final 
rule that allowed 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 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 

[[Page 56506]]
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 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 final rule.
    After consideration of all relevant material presented, including 
the committee's recommendations and other information, it is found that 
finalizing the interim final rule, without change, as published in the 
Federal Register on August 17, 1995 (60 FR 42772), 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:

PART 932--OLIVES GROWN IN CALIFORNIA

    Accordingly, the interim final rule amending 7 CFR part 932, which 
was published at 60 FR 42772 on August 17, 1995, 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 60 FR 42772 on August 17, 1995, is adopted as a final 
rule without change.

    Dated: November 3, 1995.
Sharon Bomer Lauritsen,
Deputy Director, Fruit and Vegetable Division.
[FR Doc. 95-27814 Filed 11-8-95; 8:45 am]
BILLING CODE 3410-02-P