[Federal Register: May 21, 2004 (Volume 69, Number 99)]
[Rules and Regulations]
[Page 29171-29173]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21my04-2]
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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.
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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: Jay.Guerber@usda.gov.
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