Olives Grown in California; Modification to Handler Membership on the California Olive Committee

AGENCY:

Agricultural Marketing Service, USDA.

ACTION:

Proposed rule.

SUMMARY:

This rule would modify the handler membership on the California Olive Committee (Committee). The Committee locally administers the California olive marketing order (order) which regulates the handling of olives grown in California. The Committee is composed of 16 industry members of which 8 are producers and 8 are handlers. Current handler representation on the Committee provides that the two handlers who handled the largest and second largest total volume of olives during the crop year in which nominations are made and in the preceding crop year shall be represented by three members and alternate members each, and that the remaining handler shall be represented by two members and alternate members. Recently, one of the handlers indicated that it is exiting the business, and no longer desired to serve on the Committee. This rule would reallocate handler membership and enable the Committee to operate at full strength.

DATES:

Comments must be received by October 11, 2000.

ADDRESSES:

Interested persons are invited to submit written comments concerning this proposal. Comments must be sent to the Docket Clerk, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box 96456, Washington, DC 20090-6456; Fax: (202) 720-5698; or E-mail: moab.docketclerk@usda.gov. All comments should reference the docket number and the date and page number of this issue of the Federal Register and will be made available for public inspection in the Office of the Docket Clerk during regular business hours.

FOR FURTHER INFORMATION CONTACT:

Rose Aguayo, Marketing Specialist, California Marketing Field Office, Marketing Order Administration Branch, F&V, 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 complying with this regulation by contacting Jay Guerber, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, P.O. Box 96456, room 2525-S, Washington, DC 20090-6456; telephone: (202) 720-2491, Fax: (202) 720-5698, or E-mail: Jay.Guerber@usda.gov.

SUPPLEMENTARY INFORMATION:

This proposed 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 proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. This action is not intended to have retroactive effect. This proposed 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. A 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 would modify the order's administrative rules and regulations regarding the structure of handler membership on the Committee. The change in structure was unanimously recommended by the Committee.

Section 932.25 of the order provides for the establishment of the Committee to locally administer the terms and provisions of the order. The Committee is composed of 16 industry members, each with an alternate. Of the 16 industry members, 8 are producers and 8 are handlers. This section also specifies how the handler membership on the Committee is allocated. Authority is provided for the Committee, with the approval of the Secretary, to change the allocation of both producer and handler members as may be necessary to assure equitable representation.

Based on this authority, § 932.159 of the administrative rules and regulations currently provides that the two handlers who handled the largest and second largest total volume of olives during the crop year in which nominations are made and in the preceding crop year shall be represented by three members and alternate members each, and the remaining handler shall be represented by two members and alternate members. This reallocation was implemented in January of 1999 (64 FR 4286) with an interim final rule. Comments were invited until March 29, 1999. The interim final rule was adopted without change in a final rule in April of 1999 (64 FR 23009).

The structure of the olive industry has changed over the years and the number of handlers, both cooperative and independent (or handlers not affiliated with a cooperative marketing organization), has decreased. At one time, there were a number of cooperative marketing organizations and independent handlers and the Committee's structure was designed so that four of the eight handler seats were held by cooperatives and four were held by independents. This representation was also weighted by the volume of olives handled so that if one group, either cooperatives or independents, handled 65 percent or more of the total industry's volume handled during the nominating crop year and the preceding crop year, that group would have five seats on the Committee and the other group would have three seats.

In 1993, handler membership on the Committee was reallocated to reflect changes within the handler segment of the industry. The number of industry handlers declined to only five handlers—one cooperative and four independents. At that time, § 932.159 of the order's rules and regulations was modified to reapportion handler membership to provide cooperative handlers with two seats on the Committee and independent handlers with six seats.

When the number of handlers declined to one cooperative and two independent handlers, and restrictions on handler affiliation resulted in two vacant handler positions on the Committee, changes on handler allocation were implemented to allow those positions to be filled and to enable the Committee to operate at full strength. Section 932.159 was revised (64 FR 4286, January 28, 1999; 64 FR 23009, April 29, 1999) to eliminate the distinction between cooperative marketing organizations and independent handlers and § 932.160 on handler affiliation was removed. The eight handler seats on the Committee were reallocated based on the total volume of olives handled during the crop year in which nominations are made and the preceding crop year, with the handlers handling the first and second largest volume being represented by three members each, and the remaining handler being represented by two members.

Recently, one handler in the industry indicated that it is exiting the business, will no longer be handling olives after it markets its old crop inventory, and, that it no longer desired to serve on the Committee. The Committee met and unanimously recommended modifying the rules and regulations to reallocate handler membership equally between the two other handlers. Each handler would be represented by four handlers and four alternates. This rule is intended to modify the Committee's handler membership to enable the Committee to operate at full strength; i.e., with all eight handler and producer positions filled.

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA), the Agricultural Marketing Service (AMS) has considered the economic impact of this proposed rule on small entities. Accordingly, AMS has prepared this initial 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 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 3 handlers of California olives who are subject to regulation under the marketing order and approximately 1,200 olive producers in the regulated area. One of these handlers informed the Committee that it plans to exist the industry, and will no longer be handling olives after it markets its old crop inventory. Small agricultural service firms have been defined by the Small Business Administration (13 CFR 121.201) as those having annual receipts of less than $5,000,000, and small agricultural producers are defined as those having annual receipts of less than $500,000. None of the olive handlers may be classified as small entities.

A review of historical and preliminary information pertaining to the 1999-00 crop year (August 1 through July 31) indicates that total grower revenue for the 1999 crop will be approximately $39,500,000, and the average grower revenue will be approximately $33,000. Thus, it can be concluded that the majority of producers of California olives may be classified as small entities.

This rule would modify the rules and regulations of the olive order regarding the structure of handler membership on the Committee. Section 932.25 of the order provides for the establishment of the Committee to locally administer the terms and provisions of the order. The Committee is composed of 16 industry members, each with an alternate. Of the 16 industry members, 8 are producers and 8 are handlers. This section also specifies how the handler membership on the Committee is allocated. Authority is provided for the Committee, with the approval of the Secretary, to change the allocation of both producer and handler members as may be necessary to assure equitable representation.

Section 932.159 of the administrative rules and regulations provides that the two handlers who handled the largest and second largest total volume of olives during the crop year in which nominations are made and in the preceding crop year shall be represented by three members and alternate members each, and the remaining handler shall be represented by two members and alternate members.

The structure of the olive industry has changed over the years and the number of handlers, both cooperative and independent, has decreased. At one time, there were a number of cooperative marketing organizations and independent handlers and the Committee's structure was designed so that four of the eight handler seats were held by cooperatives and four were held by independents. This representation was also weighted by the volume of olives handled so that if one group, either cooperatives or independents, handled 65 percent or more of the total industry's volume handled during the nominating crop year and the preceding crop year, that group would have five seats on the Committee and the other group would have three seats.

In 1993, handler membership on the Committee was reallocated to reflect changes within the industry. The number of industry handlers declined to only five handlers—one cooperative and four independents. At that time, § 932.159 of the order's rules and regulations was modified to reapportion handler membership to provide cooperative handlers with two seats on the Committee and independent handlers with six seats.

When the number of handlers declined to one cooperative and two independent handlers, and restrictions on handler affiliation resulted in two vacant handler positions on the Committee, changes on handler allocation were implemented to allow these positions to be filled and to enable the Committee to operate at full strength. Section 932.159 was revised (64 FR 4286, January 28, 1999; 64 FR 23009, April 29, 1999) to eliminate the distinction between cooperative marketing organizations and independent handlers and § 932.160 on handler affiliation was removed. The eight handler seats on the Committee were reallocated based on the total volume of olives handled during the crop year in which nominations are made and the preceding crop year, with the handlers handling the first and second largest volume being represented by three members each, and the remaining handler being represented by two members.

Recently, one of the handlers indicated that it is exiting the business, will no longer be handling olives after it markets its old crop inventory, and that it no longer desired to serve on the Committee. The Committee unanimously recommended modifying the rules and regulations to reallocate handler membership equally between two handlers with each handler represented by four members and four alternates. This rule is intended to enable the Committee to operate at full strength; i.e., with all eight handler and producer positions filled.

One alternative to this rule discussed at the meeting was to leave the language in § 932.159 unchanged; however, the current language is no longer appropriate. The current language specifies that the two handlers who handled the largest and second largest volume of olives during the crop year in which nominations are made and in the preceding crop year shall be represented by three members and alternate members each, and that the remaining handler shall be represented by two members and two alternate members. Since one of the remaining handlers no longer desires to serve on the Committee, the language concerning the two seats allocated to the third handler is no longer appropriate. Therefore, the Committee recommended that handler membership be reallocated equally between two handlers and that each handler be represented by four members and four alternate members.

This rule would not impose any additional reporting or recordkeeping requirements on either of the two 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. In addition, the Department has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule.

Further, the Committee's meeting was widely publicized throughout the 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 meeting at which the recommendation was made, was a public meeting and all entities, both large and small, were able to express their views on this issue. All of the industry handlers currently represented on the Committee participated in the deliberations. Finally, interested persons are invited to submit information on the regulatory and informational impacts of this action on small businesses.

A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at the following website: 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.

A 30-day comment period is provided to allow interested persons to respond to this proposal. Thirty days is deemed appropriate because there are two vacant handler member seats on the Committee. The seats should be filled under the proposed modifications to the administrative rules and regulations. It is important that the Committee operate at full strength. Any written comments timely received will be considered before a final determination is made on this matter.

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 proposed to be 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 932.159 is revised to read as follows: