[Federal Register Volume 68, Number 85 (Friday, May 2, 2003)]
[Rules and Regulations]
[Pages 23378-23381]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-10818]


-----------------------------------------------------------------------

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 932

[Docket No. FV03-932-1 FR]


Olives Grown in California; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

[[Page 23379]]

SUMMARY: This rule increases the assessment rate established for the 
California Olive Committee (committee) for the 2003 and subsequent 
fiscal years from $10.09 to $13.89 per ton of olives handled. The 
committee locally administers the marketing order regulating the 
handling of olives grown in California. Authorization to assess olive 
handlers enables the committee to incur expenses that are reasonable 
and necessary to administer the program. The fiscal year began January 
1 and ends December 31. The assessment rate will remain in effect 
indefinitely unless modified, suspended, or terminated.

EFFECTIVE DATE: May 5, 2003.

FOR FURTHER INFORMATION CONTACT: Toni Sasselli, Program Assistant, 
California Marketing Field Office, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, 2202 Monterey Street, 
Suite 102B, Fresno, California 93721; telephone: (559) 487-5901, Fax: 
(559) 487-5906; or George Kelhart, Technical Advisor, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 
Independence Avenue SW., STOP 0237, Washington, DC 20250-0237; 
telephone: (202) 720-2491, Fax: (202) 720-8938.
    Small businesses may request information on complying with this 
regulation by contacting Jay Guerber, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence 
Avenue SW., STOP 0237, Washington, DC 20250-0237; telephone (202) 720-
2491, Fax: (202) 720-8938, or E-mail: [email protected].

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement No. 148 and Order No. 932, both as amended (7 CFR part 932), 
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.''
    The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Order 12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the marketing order now in effect, California 
olive handlers are subject to assessments. Funds to administer the 
order are derived from such assessments. It is intended that the 
assessment rate fixed herein will be applicable to all assessable 
olives beginning on January 1, 2003, and continue until amended, 
suspended, or terminated. 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 608c(15)(A) of the 
Act, any handler subject to an order may file with USDA 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 
request a modification of the order or to be exempted therefrom. Such 
handler is afforded the opportunity for a hearing on the petition. 
After the hearing USDA 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 to review USDA's ruling on the petition, 
provided an action is filed not later than 20 days after the date of 
the entry of the ruling.
    This rule increases the assessment rate established for the 
committee for the 2003 and subsequent fiscal years from $10.09 per ton 
to $13.89 per ton of olives.
    The California olive marketing order provides authority for the 
committee, with the approval of USDA, to formulate an annual budget of 
expenses and collect assessments from handlers to administer the 
program. The members of the committee are producers and handlers of 
California olives. They are familiar with the committee's needs and 
with the costs for goods and services in their local area and are thus 
in a position to formulate an appropriate budget and assessment rate. 
The assessment rate is formulated and discussed in a public meeting. 
Thus, all directly affected persons have an opportunity to participate 
and provide input.
    For the 2002 and subsequent fiscal years, the committee 
recommended, and USDA approved, an assessment rate that would continue 
in effect from fiscal year to fiscal year unless modified, suspended, 
or terminated by USDA upon recommendation and information submitted by 
the committee or other information available to USDA.
    The committee met on December 11, 2002, and unanimously recommended 
fiscal year 2003 expenditures of $1,230,590 and an assessment rate of 
$13.89 per ton of olives. In comparison, last year's budgeted 
expenditures were $1,428,585. The assessment rate of $13.89 is $3.80 
higher than the $10.09 rate currently in effect.
    Expenditures recommended by the committee for the 2003 fiscal year 
include $633,500 for marketing development, $347,090 for 
administration, and $250,000 for research. Budgeted expenses for these 
items in 2002 were $811,935 for marketing development, $339,650 for 
administration, and $250,000 for research.
    The assessment rate recommended by the committee was derived by 
considering anticipated expenses, actual olive tonnage received by 
handlers, and additional pertinent factors. The California Agricultural 
Statistics Service (CASS) reported olive receipts for the 2002-03 crop 
year at 89,006 tons, which compares to 123,439 for the 2001-02 crop 
year. The reduction in the crop size for the 2002-03 crop year, due in 
large part to the alternate-bearing characteristics of olives, made it 
necessary for the committee to recommend an increase in the assessment 
rate from the current $10.09 per assessable ton to $13.89 per 
assessable ton, an increase of $3.80 per ton. Income derived from 
handler assessments, interest, and utilization of reserve funds will be 
adequate to cover budgeted expenses. Funds in the reserve will be kept 
within the maximum permitted by the order of approximately one fiscal 
year's expenses (Sec.  932.40).
    The assessable tonnage for the 2003 fiscal year is expected to be 
less than the receipts of 89,006 tons reported by CASS, because some 
olives may be diverted by handlers to uses that are exempt from 
marketing order requirements. The quantity of olives that is expected 
to be diverted cannot be published in this document. The olive industry 
consists of only three handlers, two of which are much larger than the 
third, and the confidentiality of this handler information must be 
maintained to protect the proprietary business positions of each of the 
handlers.
    The assessment rate established in this rule will continue in 
effect indefinitely unless modified, suspended, or terminated by USDA 
upon recommendation and information submitted by the committee or other 
available information.
    Although this assessment rate will be in effect for an indefinite 
period, the committee will continue to meet prior to or during each 
fiscal year to recommend a budget of expenses and consider 
recommendations for modification of the assessment rate. The dates and 
times of committee meetings are available from the committee or USDA. 
Committee meetings are open to the public and interested persons may 
express their views at these meetings. USDA will evaluate committee 
recommendations and other available information to determine whether

[[Page 23380]]

modification of the assessment rate is needed. Further rulemaking will 
be undertaken as necessary. The committee's 2003 budget and those for 
subsequent fiscal years will be reviewed and, as appropriate, approved 
by USDA.

Final Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Agricultural Marketing Service (AMS) has considered the 
economic impact of this rule on small entities. Accordingly, AMS has 
prepared this final regulatory flexibility analysis.
    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 the 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.
    There are approximately 1,200 producers of olives in the production 
area and 3 handlers subject to regulation under the marketing order. 
Small agricultural producers are defined by the Small Business 
Administration (13 CFR 121.601) as those having annual receipts less 
than $750,000, and small agricultural service firms are defined as 
those whose annual receipts are less than $5,000,000.
    Based upon information from the committee, the majority of olive 
producers may be classified as small entities. One of the handlers may 
be classified as a small entity, but the majority of the handlers may 
be classified as large entities.
    This rule increases the assessment rate established for the 
committee and collected from handlers for the 2003 and subsequent 
fiscal years from $10.09 per ton to $13.89 per ton of olives. The 
committee unanimously recommended 2003 expenditures of $1,230,590 and 
an assessment rate of $13.89 per ton. The assessment rate of $13.89 per 
ton is $3.80 per ton higher than the 2002 rate. The quantity of olive 
receipts for the 2002-03 crop year was reported by CASS to be 89,006 
tons, but the actual assessable tonnage for the 2003 fiscal year is 
expected to be lower. This is because some of the receipts are expected 
to be diverted by handlers to exempt outlets on which assessments are 
not paid. The amount of assessable tonnage cannot be reported in this 
document. The amount of the exempt tonnage must be kept confidential so 
the business position of each of the three olive handlers is not 
revealed. The $13.89 per ton assessment rate should be adequate to meet 
this year's expenses when combined with funds from the authorized 
reserve and interest income. Funds in the reserve will be kept within 
the maximum permitted by the order of about one fiscal year's expenses 
(Sec.  932.40).
    Expenditures recommended by the committee for the 2003 fiscal year 
include $633,500 for marketing development, $347,090 for 
administration, and $250,000 for research. Budgeted expenses for these 
items in 2002 were $811,935 for marketing development, $339,650 for 
administration, and $250,000 for research.
    Last year's olive receipts totaled 123,439 tons compared to this 
year's tonnage of 89,006. Although the committee decreased 2003 
expenses, the significant decrease in olive production makes the higher 
assessment rate necessary.
    The research expenditures will fund studies to develop chemical and 
scientific defenses to counteract a threat from the olive fruit fly in 
the California production area. Market development expenditures are 
lower because the committee's marketing program for 2003 is limited to 
consumer and nutritionist activities. The committee reviewed and 
unanimously recommended 2003 expenditures of $1,230,590, which reflects 
decreases in the research, market development, and administrative 
budgets.
    Prior to arriving at this budget, the committee considered 
information from various sources, such as the committee's Executive 
Subcommittee and the Market Development Subcommittee. Alternate 
spending levels were discussed by these groups, based upon the relative 
value of various research and marketing projects to the olive industry 
and the anticipated olive production. The assessment rate of $13.89 per 
ton of assessable olives was derived by considering anticipated 
expenses, the volume of assessable olives, and additional pertinent 
factors.
    A review of historical and preliminary information pertaining to 
the upcoming fiscal year indicates that the grower price for the 2002-
03 crop year is estimated to be approximately $672 per ton for canning 
fruit and $306 per ton for limited-use size fruit. Approximately 85 
percent of a ton of olives are canning fruit sizes and 10 percent are 
limited-use sizes, leaving the balance as unusable cull fruit. Total 
grower revenue on 89,006 tons would then be $53,563,811 given the 
percentage of canning and limited-use sizes and current grower prices 
for those sizes. An assessment rate of $13.89 will generate estimated 
assessment revenue of approximately 2.3 percent of total grower 
revenue.
    This action increases the assessment obligation imposed on 
handlers. While assessments impose some additional costs on handlers, 
the costs are minimal and uniform on all handlers. Some of the 
additional costs may be passed on to producers. However, these costs 
are offset by the benefits derived by the operation of the marketing 
order. In addition, the committee's meeting was widely publicized 
throughout the California olive industry and all interested persons 
were invited to attend the meeting and participate in committee 
deliberations on all issues. Like all committee meetings, the December 
11, 2002, meeting was a public meeting and all entities, both large and 
small, were able to express views on this issue.
    This rule imposes no additional reporting or recordkeeping 
requirements on California olive handlers. As with all Federal 
marketing order programs, reports and forms are periodically reviewed 
to reduce information requirements and duplication by industry and 
public sector agencies.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this rule.
    A proposed rule concerning this action was published in the Federal 
Register on March 10, 2003 (68 FR 11340). Copies of the proposed rule 
were also mailed or sent via facsimile to all olive handlers. Finally, 
the proposal was made available through the Internet by the Office of 
the Federal Register and USDA. A 30-day comment period ending April 9, 
2003, was provided for interested persons to respond to the proposal. 
No comments were received.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/fv/moab.html. Any questions about the compliance 
guide should be sent to Jay Guerber at the previously mentioned address 
in the FOR FURTHER INFORMATION CONTACT section.
    After consideration of all relevant material presented, including 
the information and recommendation submitted by the committee and other 
available information, it is hereby found that this 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 that good 
cause exists for not postponing the effective date of this rule until 
30 days after publication in the Federal Register because the marketing 
order requires

[[Page 23381]]

that the rate of assessment for each fiscal year apply to all 
assessable olives handled during such period. The 2003 fiscal year 
began on January 1, 2003, and the committee needs sufficient funds to 
pay its authorized expenses, which are incurred on a continuous basis. 
Further, handlers are aware of this rule which was unanimously 
recommended at a public meeting. Also, a 30-day comment period was 
provided for in the proposed rule and no comments were received.

List of Subjects in 7 CFR Part 932

    Marketing agreements, Olives, Reporting and recordkeeping 
requirements.

0
For the reasons set forth in the preamble, 7 CFR part 932 is amended as 
follows:

PART 932--OLIVES GROWN IN CALIFORNIA

0
1. The authority citation for 7 CFR part 932 continues to read as 
follows:

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


0
2. Section 932.230 is revised to read as follows:


Sec.  932.230  Assessment rate.

    On and after January 1, 2003, an assessment rate of $13.89 per ton 
is established for California olives.

    Dated: April 28, 2003.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 03-10818 Filed 5-1-03; 8:45 am]
BILLING CODE 3410-02-P