E9-18415. Olives Grown in California; Increased Assessment Rate

AGENCY:

Agricultural Marketing Service, USDA.

ACTION:

Affirmation of interim final rule as final rule.

SUMMARY:

The Department of Agriculture (USDA) is adopting, as a final rule, without change, an interim final rule that changed the assessment rate established under the marketing order (order) for olives grown in California for the 2009 and subsequent fiscal years. The interim final rule increased the assessment rate from $15.60 to $28.63 per assessable ton of olives handled. The interim final rule was necessary to provide adequate operating funds for the California Olive Committee (committee), which administers the order locally.

DATES:

Effective Date: Effective August 4, 2009.

FOR FURTHER INFORMATION CONTACT:

Jennifer Robinson, Marketing Specialist, or Kurt J. Kimmel, Regional Manager, California Marketing Field Office, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA; Telephone: [phone], Fax: [phone]; or e-mail: Jen. [e-mail] or [e-mail].

Small businesses may obtain information on complying with this and other marketing order regulations by viewing a guide at the following Web site: http://www.ams.usda.gov/​AMSv1.0/​ams.fetchTemplateData.do?​template=​TemplateN&​page=​MarketingOrdersSmallBusinessGuide; or 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: [phone], Fax: [phone], or E-mail: [e-mail].

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.

The handling of olives grown in California is regulated under 7 CFR part 932. Under the order, California olive handlers are subject to assessments, which provide funds to administer the order. Assessment rates issued under the order are intended to be applicable to all assessable olives for the entire fiscal year, and continue indefinitely until amended, suspended, or terminated. The committee's fiscal year begins on January 1, and ends on December 31.

In an interim final rule published in the Federal Register on February 20, 2009, and effective on February 21, 2009 (74 FR 7782, Doc. No. AMS-FV-08-0105; FV09-932-1 IFR), § 932.230 was amended by increasing the assessment rate established for the committee for the 2009 and subsequent fiscal years from $15.60 to $28.63 per ton of assessable olives from the applicable crop years. The increase in the per ton assessment rate was deemed necessary because the 2008-2009 olive crop was significantly smaller than the previous year's crop and would not have generated adequate assessment revenues to meet the committee's budgeted program needs.

Final Regulatory Flexibility Analysis

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), 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.

There are approximately 1,000 producers of olives in the production area and 2 handlers subject to regulation under the marketing order. Small agricultural producers are defined by the Small Business Administration (13 CFR 121.201) as those having annual receipts less than $750,000, and small agricultural service firms are defined as those whose annual receipts are less than $7,000,000.

Based upon information from the committee, the majority of olive producers may be classified as small entities. Both of the handlers may be classified as large entities.

This rule continues in effect the action that increased the assessment rate established for the committee and collected from handlers for the 2009 and subsequent fiscal years from $15.60 to $28.63 per ton of assessable olives. The committee unanimously recommended 2009 expenditures of $1,482,349 and an assessment rate of $28.63 per ton. The assessment rate of $28.63 is $13.03 higher than the 2008 rate. The higher assessment rate is necessary because assessable olive receipts for the 2008-09 crop year were reported by the CASS to be 49,067 tons, compared to 108,059 tons for the 2007-08 crop year. Actual assessable tonnage for the 2009 fiscal year is expected to be lower because some of the receipts may be diverted by handlers to exempt outlets on which assessments are not paid.

Income generated from the $28.63 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 would be kept within the maximum permitted by the order of about one fiscal year's expenses (§ 932.40).

Expenditures recommended by the committee for the 2009 fiscal year include $495,000 for research, $627,800 for marketing activities, and $359,549 for administration. Budgeted expenditures for these items in 2008 were $500,000, $750,000, and $288,552, respectively. The 2009 marketing and research programs will be scaled back.

Prior to arriving at this budget, the committee considered information from various sources, such as the committee's Executive, Market Development, and Research Subcommittees. 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 reduced olive production. The assessment rate of $28.63 per ton of assessable olives was derived by considering anticipated expenses, the volume of assessable olives and additional pertinent factors.

A review of historical information indicates that the grower price for the 2008-09 crop year was approximately $1,109.47 per ton for canning fruit and $380.71 per ton for limited-use sizes, leaving the balance as unusable cull fruit. Approximately 84 percent of the total tonnage of olives received is canning fruit sizes and 11 percent is limited use sizes, leaving the balance as unusable cull fruit. Grower revenue on 49,067 total tons of canning and limited-use sizes would be $49,283,177 given the current grower prices for those sizes. Therefore, with an assessment rate increased from $15.60 to $28.63, the estimated assessment revenue is expected to be almost 3 percent of 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 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, 2008, meeting was a public meeting and all entities, both large and small, were able to express views on this issue.

This action imposes no additional reporting or recordkeeping requirements on either small or large 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.

Comments on the interim final rule were required to be received on or before April 21, 2009. No comments were received. Therefore, for the reasons given in the interim final rule, we are adopting the interim final rule as a final rule, without change.

To view the interim final rule, go to http://www.regulations.gov/​fdmspublic/​component/​main?​main=​DocketDetail&​d=​AMS-FV-08-0105.

This action also affirms information contained in the interim final rule concerning Executive Orders 12866 and 12988, the Paperwork Reduction Act (44 U.S.C. Chapter 35), and the E-Gov Act (44 U.S.C. 101).

After consideration of all relevant material presented, it is found that finalizing the interim final rule, without change, as published in the Federal Register (74 FR 7782, February 20, 2009) 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—[AMENDED]

Accordingly, the interim final rule that amended 7 CFR part 932 and that was published at 74 FR 7782 on February 20, 2009, is adopted as final rule, without change.

Dated: July 28, 2009.

Rayne Pegg,

Administrator, Agricultural Marketing Service.