Olives Grown in California; Increased Assessment Rate

[Federal Register Volume 64, Number 59 (Monday, March 29, 1999)]
[Rules and Regulations]
[Pages 14811-14813]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-7650]



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Federal Register / Vol. 64, No. 59 / Monday, March 29, 1999 / Rules 
and Regulations

[[Page 14811]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 932

[Docket No. FV99-932-1 FR]


Olives Grown in California; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule increases the assessment rate from $17.10 to $26.18 
per ton of olives established for the California Olive Committee 
(Committee) under Marketing Order No. 932 for the 1999 and subsequent 
fiscal years. The Committee is responsible for local administration of 
the marketing order which regulates 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: March 30, 1999.

FOR FURTHER INFORMATION CONTACT: Diane Purvis, Marketing Assistant, and 
Terry Vawter, Marketing Specialist, California Marketing Field Office, 
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, room 
2525-S, P.O. Box 96456, Washington, DC 20090-6456; telephone: (202) 
720-2491, Fax: (202) 720-5698. Small businesses may request information 
on compliance with this regulation, or obtain a guide on complying with 
fruit, vegetable, and specialty crop marketing agreements and orders by 
contacting Jay Guerber, Marketing Order Administration Branch, Fruit 
and Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box 96456, 
Washington, DC 20090-6456; telephone: (202) 720-2491, Fax: (202) 720-
5698, or E-mail: Jay__N__Guerber@usda.gov. You may view the marketing 
agreement and order small business compliance guide at the following 
web site: https://www.ams.usda.gov/fv/moab.html.

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 marketing agreement and order are 
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 (Department) 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 as issued herein will be applicable to all assessable 
olives beginning on January 1, 1999, 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 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 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 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 to review the 
Secretary'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 1999 and subsequent fiscal years from $17.10 per ton 
to $26.18 per ton of olives.
    The California olive marketing order provides authority for the 
Committee, with the approval of the Department, 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 1998 and subsequent fiscal years, the Committee 
recommended, and the Department approved, an assessment rate that would 
continue in effect from fiscal year to fiscal year unless modified, 
suspended, or terminated by the Secretary upon recommendation and 
information submitted by the Committee or other information available 
to the Secretary.
    The Committee met on December 10, 1998, and unanimously recommended 
1999 expenditures of $1,845,185 and an assessment rate of $26.18 per 
ton of olives. In comparison, last year's budgeted expenditures were 
$1,750,000. The assessment rate of $26.18 is $9.08 higher than the rate 
currently in effect. A higher assessment rate is needed because:
    (1) Assessable tonnage is down for the second year in a row due in 
large part this crop year to adverse conditions created by the weather 
phenomenon El Nino. Assessable tonnage in 1996 totaled 144,075 tons, in 
1997 it totaled 85,585 tons, and in 1998 the assessable tonnage totaled 
67,990 tons; and
    (2) Rather than reduce 1999 expenditures, the Committee determined 
that more funds are needed to continue the development of an improved 
mechanical olive harvester that can efficiently harvest most orchard 
configurations. The California olive

[[Page 14812]]

industry recognized that it needs to make reducing harvesting costs a 
top priority if it is to remain competitive with imports. Consequently, 
after considerable discussion, the Committee recommended increasing the 
$52,000 1999 Research Fund initially suggested by Committee members by 
an additional $250,000. The additional $250,000 is to be used 
specifically for the purpose of further development of a mechanical 
harvester that can be more effectively utilized by growers throughout 
the California olive industry while at the same time reducing 
harvesting costs.
    The following table compares major budget expenditure 
recommendations for the 1999 fiscal year with those from last year:

------------------------------------------------------------------------
              Budget expenditure                    1998         1999
------------------------------------------------------------------------
Administration................................     $357,900     $346,485
Research......................................       50,000      302,000
Market Development............................    1,308,500    1,190,500
------------------------------------------------------------------------

    The assessment rate recommended by the Committee was derived by 
considering anticipated expenses, actual receipts of olives, and 
additional pertinent factors. The quantity of assessable olives for the 
1999 fiscal year is 67,990 tons which should provide $1,779,978 in 
assessment income. Income derived from handler assessments, interest, 
and carryover of reserve funds should be adequate to cover budgeted 
expenses. Funds in the reserve (currently $316,409) would be kept 
within the maximum permitted by the order (approximately one fiscal 
year's expenses, Sec. 932.40).
    The assessment rate established in this rule will continue in 
effect indefinitely unless modified, suspended, or terminated by the 
Secretary 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 the 
Department. Committee meetings are open to the public and interested 
persons may express their views at these meetings. The Department 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 
1999 budget and those for subsequent fiscal years will be reviewed and, 
as appropriate, approved by the Department.
    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 have been defined by the Small Business 
Administration (13 CFR 121.601) as those having annual receipts less 
than $500,000, and small agricultural service firms are defined as 
those whose annual receipts are less than $5,000,000. The majority of 
olive producers may be classified as small entities, while none of the 
olive handlers may be classified as small entities.
    This rule increases the assessment rate established for the 
Committee and collected from handlers for the 1999 and subsequent 
fiscal years from $17.10 per ton to $26.18 per ton of olives. The 
Committee unanimously recommended 1999 expenditures of $1,845,185 and 
an assessment rate of $26.18 per ton. The assessment rate of $26.18 is 
$9.08 higher than the 1998 rate. The quantity of assessable olives for 
the 1999 fiscal year is 67,990 tons. Thus, the $26.18 rate should 
provide $1,779,978 in assessment income and be adequate to meet this 
year's budgeted expenses, when combined with funds from the authorized 
reserve and interest income.
    The following table compares major budget expenditure 
recommendations for the 1999 fiscal year with those from last year:

------------------------------------------------------------------------
              Budget expenditure                    1998         1999
------------------------------------------------------------------------
Administration................................     $357,900     $346,485
Research......................................       50,000      302,000
Market Development............................    1,308,500    1,190,500
------------------------------------------------------------------------

    A higher assessment rate is needed for 1999 because:
    (1) Assessable tonnage is down for the second year in a row due in 
large part this crop year to adverse conditions created by the weather 
phenomenon El Nino. Assessable tonnage in 1996 totaled 144,075 tons, in 
1997 it totaled 85,585 tons, and in 1998 the assessable tonnage totaled 
67,990 tons; and
    (2) Rather than reduce 1999 expenditures, the Committee determined 
that more funds are needed to continue the development of an improved 
mechanical olive harvester that can efficiently harvest most orchard 
configurations. The California olive industry recognized that it needs 
to make reducing harvesting costs a top priority if it is to remain 
competitive with imports. Consequently, after considerable discussion, 
the Committee recommended increasing the $52,000 1999 Research Fund 
initially suggested by Committee members by an additional $250,000. The 
additional $250,000 is to be used specifically for the purpose of 
further development of a mechanical harvester that can be more 
effectively utilized by growers throughout the California olive 
industry while at the same time reducing harvesting costs.
    The Committee reviewed and unanimously recommended 1999 
expenditures of $1,845,185 which included the $250,000 increase in 
research development of an improved mechanical olive harvester. To 
finance this additional research allotment, the Committee considered 
reducing the Market Development budget item by amounts ranging from 
$100,000 to $309,530. The prevailing opinion was that the money 
allocated for 1999 Market Development recommended by the Marketing 
Subcommittee remain the same ($1,190,500) as initially suggested, which 
is $118,000 less than budgeted for 1998. The Committee members believed 
that the Administrative Budget had already been reduced as low as 
possible ($11,415 less than for 1998). The only other alternative was 
to increase the assessment rate. The assessment rate of $26.18 per ton 
of assessable olives was then derived by considering anticipated 
expenses, actual receipts of olives, and additional pertinent factors.
    Based on a review of historical and preliminary marketing and price 
information, grower revenue for the 1998-99 crop year (August 1 through 
July 31) is estimated to be approximately $39,500,000. Therefore, the 
estimated assessment revenue of $1,779,978 for the 1999 fiscal year 
will be approximately 4.5 percent of grower revenue.
    This action increases the assessment obligation imposed on 
handlers. While

[[Page 14813]]

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 will be 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 10, 1998, meeting was a public 
meeting and all entities, both large and small, were able to express 
views on this issue.
    This final 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.
    The Department 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 January 28, 1999 (64 FR 4350). 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. A 30-day comment period ending March 1, 1999, was 
provided for interested persons to respond to the proposal. No comments 
were received.
    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 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: (1) The 
Committee needs to begin assessing handlers at the $26.18 per ton rate 
as soon as possible to generate sufficient funds to pay its expenses; 
(2) the 1999 fiscal year began on January 1, 1999, and the order 
requires that the rate of assessment for each fiscal year apply to all 
assessable olives handled during the current crop year (August 1, 1998-
July 31, 1999); and (3) all three handlers are represented on the 
Committee and participated in deliberations. 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.

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

PART 932--OLIVES GROWN IN CALIFORNIA

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

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

    2. Section 932.230 is revised to read as follows:


Sec. 932.230  Assessment rate.

    On and after January 1, 1999, an assessment rate of $26.18 per ton 
is established for assessable olives grown in California.

    Dated: March 24, 1999.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 99-7650 Filed 3-26-99; 8:45 am]
BILLING CODE 3410-02-U