[Federal Register Volume 69, Number 99 (Friday, May 21, 2004)]
[Rules and Regulations]
[Pages 29171-29173]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-11512]


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

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 932

[Docket No. FV04-932-1 FIR]


Olives Grown in California; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

SUMMARY: The Department of Agriculture (USDA) is adopting, as a final 
rule, without change, an interim final rule that decreased the 
assessment rate established for the California Olive Committee 
(committee) for the 2004 and subsequent fiscal years from $13.89 to 
$12.18 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.

DATES: Effective Date: June 21, 2004.

FOR FURTHER INFORMATION CONTACT: Terry Vawter, Marketing Specialist, 
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.''
    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 established herein will be applicable to all assessable 
olives beginning on January 1, 2004, and continue until amended, 
suspended, or

[[Page 29172]]

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 continues in effect the decreased assessment rate 
established for the committee for the 2004 and subsequent fiscal years 
from $13.89 per ton of assessable olives to $12.18 per ton of 
assessable 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 under Sec. Sec.  932.38 and 932.39. 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 
deliberated and formulated in a public meeting, and the expenditures 
are deliberated in various public subcommittee meetings prior to the 
committee meeting. Thus, all directly affected persons have an 
opportunity to participate and provide input.
    For the 2003 and subsequent fiscal years, the committee 
recommended, and USDA approved, an assessment rate that would continue 
in effect from one fiscal year to another 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, 2003, and unanimously recommended 
fiscal year 2004 expenditures of $1,269,063 and an assessment rate of 
$12.18 per ton of olives. In comparison, last year's budgeted 
expenditures were $1,230,590. The assessment rate of $12.18 is $1.71 
lower than the $13.89 rate previously in effect.
    Expenditures recommended by the committee for the 2004 fiscal year 
include $633,500 for marketing development, $360,563 for 
administration, and $225,000 for research. The committee also 
recommended a fiscal year 2004 expenditure of $50,000 for the 
development of an enhanced flavor standards program.
    Budgeted expenses for these items in 2003 were $633,500 for 
marketing development, $347,090 for administration, $250,000 for 
research. There were no budgeted expenditures for the development of 
flavor standards and flavor-standards inspection training for the 2003 
fiscal year.
    The California Agricultural Statistics Service (CASS) reported 
olive receipts for the 2003-04 crop year at 102,703 tons, which 
compares to 89,006 for the 2002-03 crop year. The increase in size of 
the 2003-04 crop, due in large part to the alternate-bearing 
characteristics of olives, has made it possible for the committee to 
recommend a decrease of $1.71 per ton in the assessment rate from the 
previous $13.89 per assessable ton to $12.18 per assessable ton. The 
assessment rate recommended by the committee was derived by considering 
anticipated expenses, actual olive tonnage received by handlers, and 
additional pertinent factors.
    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 of approximately one fiscal 
period's expenses as required by Sec.  932.40 of the marketing order.
    The assessable tonnage for the 2004 fiscal year is expected to be 
less than the receipts of 102,703 tons reported by CASS, because some 
olives may be diverted by handlers for uses that are exempt from 
marketing order requirements. The quantity of olives 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 confidentially of this handler information must be 
maintained to protect the proprietary business positions of each of the 
handlers.
    The assessment rate 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 and subcommittee 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 modification of the assessment rate is needed. 
Further rulemaking will be undertaken as necessary. The committee's 
2004 budget and those for subsequent fiscal years would 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 to ensure 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. 
The Small Business Administration (13 CFR 121.201) defines small 
agricultural producers as those with annual receipts less than 
$750,000, and small agricultural service firms as those with annual 
receipts less than $5,000,000. Based upon information from the 
committee, the majority of olive producers may be classified as small 
entities, but only one of the three handlers may be classified as a 
small entity.
    This rule continues in effect the decreased assessment rate 
established for the committee and collected from handlers for the 2004 
and subsequent fiscal years. The assessment rate was decreased from 
$13.89 per ton to $12.18 per ton of assessable olives. The committee 
unanimously recommended 2004 fiscal year expenditures of $1,269,063 at 
the assessment rate of $12.18 per ton. That assessment rate is

[[Page 29173]]

$1.71 per ton lower than the previous rate.
    The quantity of olive receipts for the 2003-04 crop year was 
reported by CASS to be 102,703 tons, but the actual assessable tonnage 
for the 2004 fiscal year is expected to be lower. This is because 
handlers are expected to divert some olives to exempt outlets on which 
assessments are not paid. The amount of assessable tonnage cannot be 
reported in this document because such information must be kept 
confidential to protect the business position of each of the three 
olive handlers.
    The $12.18 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 of approximately one fiscal period's expenses as required by 
Sec.  932.40 of the marketing order.
    Expenditures recommended by the committee for the 2004 fiscal year 
include $633,500 for marketing development, $360,563 for 
administration, and $225,000 for research. The committee also 
recommended a fiscal year 2004 expenditure of $50,000 for the 
development of an enhanced flavor standards program.
    Budgeted expenses for these items in 2003 were $633,500 for 
marketing development, $347,090 for administration, and $250,000 for 
research. There were no expenditures for the development of flavor 
standards and flavor-standards training for inspection personnel in the 
2003 fiscal year.
    Olive receipts totaled 102,703 tons for the 2003-04 crop year 
compared to the previous crop year's tonnage of 89,006. The committee 
has increased fiscal year 2004 expenses, but the increase in olive 
production makes the lower assessment rate possible.
    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 the 
same because the committee's marketing program for fiscal year 2004 is 
similar.
    The committee reviewed the budget and assessment rate, and 
unanimously recommended fiscal year 2004 expenditures of $1,269,063, 
which reflect decreased research expenditures and increased 
administrative and inspection expenditures.
    While deliberating this budget, the committee considered 
information from various sources, such as the committee's Executive, 
Research, and Marketing Subcommittees. Alternate spending levels were 
discussed by these groups, based upon the relative costs and benefits 
to the olive industry of various research and marketing projects, the 
total quantity of assessable olives received by handlers, and other 
pertinent factors. Such deliberations resulted in the recommended 
assessment rate of $12.18 per ton of assessable olives.
    A review of historical industry information and preliminary 
information pertaining to the upcoming fiscal year indicates that the 
grower price for the 2003-04 crop year will be a weighted average of 
$478 per ton for canning-size fruit and $254 per ton for limited-use 
size fruit. The weighted average is calculated by the committee staff 
and takes into account the prices per ton offered by each handler for 
various sizes of the major olive varieties produced.
    Approximately 85 percent of a ton of olives are canning sizes and 
10 percent are limited-use sizes, leaving the balance as cull fruit. 
Thus, given the current anticipated grower prices, the average grower 
price per ton would be $431.70. The estimated assessment revenue is 
expected to be approximately 2.8 percent of the average grower price. 
Total grower revenue on 102.703 tons would be $44,336,885.
    This action will continue in effect the decreased 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, 2003, meeting was a public meeting and all entities, both large and 
small, were able to express views on this issue. The subcommittee 
meetings, as well, were public and all interested parties were 
encouraged to attend and provide comments. Finally, interested persons 
were invited to submit information on the regulatory and informational 
impacts of this action on small businesses.
    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.
    The interim final rule was published in the Federal Register on 
February 9, 2004 (69 FR 5905). Copies of the rule were provided to all 
handlers. Finally, USDA and the Office of the Federal Register made the 
interim final rule available through the Internet. A 60-day comment 
period was provided for interested persons to respond to the interim 
final rule. The comment period closed on April 9, 2004, and 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.

List of Subjects in 7 CFR Part 932

    Marketing agreements, Olives, Reporting and recordkeeping 
requirements.

PART 932--OLIVES GROWN IN CALIFORNIA

0
Accordingly, the interim final rule amending 7 CFR part 932, which was 
published at 69 FR 5905 on February 9, 2004, is adopted as a final rule 
without change.

    Dated: May 17, 2004.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 04-11512 Filed 5-20-04; 8:45 am]
BILLING CODE 3410-02-P