Olives Grown in California; Increased Assessment Rate, 69873-69876 [2023-22332]
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69873
Rules and Regulations
Federal Register
Vol. 88, No. 194
Tuesday, October 10, 2023
This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
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FEDERAL LABOR RELATIONS
AUTHORITY
bottom, ‘‘I Content.’’ should read, ‘‘(c)
Content.’’
§ 2424.31
7. On page 62459, in the second
column, amendatory instruction 14 is
corrected to read as follows:
■ 14. Amend § 2424.31 by revising the
heading, introductory text, and
paragraph (c) to read as follows:
Corrections
In Rule Document 2023–19269,
appearing on pages 62445 through
62460 in the issue of Tuesday,
September 12, 2023, make the following
corrections:
§ 2424.2
[Corrected]
1. Beginning on page 62455, in the
third column, amendatory instruction 3
is corrected to read as follows:
■ 3. Amend § 2424.2 by revising
paragraphs (a), (c)(2) and (c)(3), adding
paragraphs (c)(4) through (7), and
revising paragraphs (e) and (f). The
revisions and additions read as follows:
■
§ 2424.11
[Corrected]
2. On page 62456, in the second
column, in the third line from the
bottom, ‘‘© Unrequested agency
allegation.’’ should read ‘‘(c)
Unrequested agency allegation.’’
■
§ 2424.22
[Corrected]
3. On the same page, in the third
column, in the fifth line from the
bottom, ‘‘I Content.’’ should read, ‘‘(c)
Content.’’
■
§ 2424.23
[Corrected]
4. On page 62457, in the second
column, in the twenty-seventh and
twenty-eighth lines, ‘‘Ö Discretionary
extension of time limits.’’ should read,
‘‘(c) Discretionary extension of time
limits.’’
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■
§ 2424.24
[Corrected]
5. On page the page, in the third
column, in the fourth line, ‘‘I Content.’’
should read, ‘‘(c) Content.’’
■
§ 2424.25
[Corrected]
8. On page the same page, in the third
column, beginning on the nineth line,
(2) and (e) are corrected to read as set
forth below:
(2) Failure to respond to an argument
or assertion raised by the other party
may, in the Authority’s discretion, be
treated as conceding such argument or
assertion.
(e) Failure to participate in
conferences; failure to respond to
Authority orders. Where a party fails to
participate in a post-petition conference
pursuant to § 2424.23, a direction or
proceeding under § 2424.31, or
otherwise fails to provide timely or
responsive information pursuant to an
Authority order, including an Authority
procedural order directing the
correction of technical deficiencies in
filing, the Authority may, in addition to
those actions set forth in paragraph (d)
of this section, take any other action
that, in the Authority’s discretion, it
deems appropriate, including dismissal
of the petition for review (with or
without prejudice to the exclusive
representative’s refiling of the petition
for review), and granting the petition for
review and directing bargaining or
rescission of an agency head
disapproval under 5 U.S.C. 7114(c)
(with or without conditions).
■
Negotiability Proceedings
§ 2424.40
[Corrected]
9. On same page, in the same column,
in the sixth line from the bottom, ‘‘(d)
Cases involving provisions.’’ should
read, ‘‘(c) Cases involving provisions.’’
■
[FR Doc. C1–2023–19269 Filed 10–5–23; 8:45 am]
BILLING CODE 0099–10–P
[Corrected]
6. On page 62458, in the first column,
in the twenty-fourth line from the
■
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Agricultural Marketing Service
[Corrected]
■
§ 2424.32
5 CFR Part 2424
DEPARTMENT OF AGRICULTURE
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7 CFR Part 932
[Doc. No. AMS–SC–22–0094]
Olives Grown in California; Increased
Assessment Rate
Agricultural Marketing Service,
USDA.
ACTION: Final rule.
AGENCY:
This final rule implements a
recommendation from the California
Olive Committee (Committee) to
increase the assessment rate established
for the 2023 fiscal year and subsequent
fiscal years. The assessment rate will
remain in effect indefinitely unless
modified, suspended, or terminated.
DATES: Effective November 9, 2023.
FOR FURTHER INFORMATION CONTACT:
Jeremy Sasselli, Marketing Specialist, or
Gary Olson, Chief, West Region Branch,
Market Development Division, Specialty
Crops Program, AMS, USDA;
Telephone: (559) 487–5901 or Email:
Jeremy.Sasselli@usda.gov or
GaryD.Olson@usda.gov.
Small businesses may request
information on complying with this
regulation by contacting Richard Lower,
Market Development Division, Specialty
Crops Program, AMS, USDA, 1400
Independence Avenue SW, STOP 0237,
Washington, DC 20250–0237;
Telephone: (202) 720–8085, or Email:
Richard.Lower@usda.gov.
SUPPLEMENTARY INFORMATION: This
action, pursuant to 5 U.S.C. 553,
amends regulations issued to carry out
a marketing order as defined in 7 CFR
900.2(j). This rule is issued under
Marketing Order No. 932, as amended (7
CFR part 932), regulating the handling
of olives grown in California. Part 932
referred to as 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 Committee
administers the Order and is comprised
of producers and handlers of olives
operating within the area of production
and may have one public member.
The Agricultural Marketing Service
(AMS) is issuing this final rule in
conformance with Executive Orders
12866, 13563, and 14094. Executive
Orders 12866 and 13563 direct agencies
SUMMARY:
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Federal Register / Vol. 88, No. 194 / Tuesday, October 10, 2023 / Rules and Regulations
to assess costs and benefits of available
regulatory alternatives and, if regulation
is necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). Executive Order 13563
emphasizes the importance of
quantifying both costs and benefits,
reducing costs, harmonizing rules, and
promoting flexibility. Executive Order
14094 updates and modernizes
Executive Order 12866 and directs
agencies to conduct proactive outreach
to engage interested and affected parties
through a variety of means, such as
through field offices, and alternative
platforms and media. This action falls
within a category of regulatory actions
that the Office of Management and
Budget (OMB) exempted from Executive
Order 12866 review.
This final rule has been reviewed
under Executive Order 13175—
Consultation and Coordination with
Indian Tribal Governments, which
requires agencies to consider whether
their rulemaking actions would have
Tribal implications. AMS has
determined that this rule is unlikely to
have substantial direct effects on one or
more Indian Tribes, on the relationship
between the Federal Government and
Indian Tribes, or on the distribution of
power and responsibilities between the
Federal Government and Indian Tribes.
This rule has been reviewed under
Executive Order 12988, Civil Justice
Reform. Under the Order now in effect,
California olive handlers are subject to
assessments. Funds to administer the
Order are derived from such
assessments. The assessment rate
established herein will be applicable to
all assessable olives beginning on
January 1, 2023, and continue until
amended, suspended, or terminated.
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 United States Department of
Agriculture (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
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the petition, provided an action is filed
not later than 20 days after the date of
the entry of the ruling.
The Order provides authority for the
Committee, with the approval of AMS,
to formulate an annual budget of
expenses and to collect assessments
from handlers to administer the
program. The members are familiar with
the Committee’s needs and with the
costs of goods and services in their local
area, and can formulate an appropriate
budget and assessment rate. The
assessment rate is formulated and
discussed in a public meeting, and all
directly affected persons have an
opportunity to participate and provide
input.
This final rule increases the
assessment rate from $16 per ton of
assessed olives, the rate that was
established for the 2022 and subsequent
fiscal years, to $35 per ton of assessed
olives for the 2023 and subsequent fiscal
years. The higher rate is the result of the
significantly lower crop size in 2022
(fruit that is marketed over the course of
the 2023 fiscal year) and the need to
maintain the Committee’s financial
reserve.
The Committee met on December 13,
2022, and unanimously recommended
2023 fiscal year expenditures of
$1,154,412 and an assessment rate of
$35 per ton of assessed olives. In
comparison, last year’s budgeted
expenditures were $1,245,085. The
assessment rate of $35 is $19 higher
than the rate currently in effect.
Producer receipts show a yield of 19,912
tons of assessable olives from the 2022
crop year, which is substantially less
than the quantity of olives harvested in
the 2021 crop year, in which 46,359
tons of assessable olives were produced.
Olives harvested in 2022 will be
marketed over the course of the 2023
fiscal year, which begins on January 1,
2023. The 19,912 tons of assessable
olives from the 2022 crop should
generate $696,920 in assessment
revenue at the $35 per ton assessment
rate. The balance of funds needed to
cover budgeted expenditures will come
from interest income, Federal grants,
and the Committee’s financial reserve.
The 2023 fiscal year assessment rate
increase is appropriate to ensure the
Committee has sufficient revenue to
fund the recommended 2023 fiscal year
budgeted expenditures. Funds in the
reserve are expected to remain within
the Order’s requirement of no more than
approximately one fiscal year’s
budgeted expenses.
The Order has a fiscal year and a crop
year that are independent of each other.
The crop year is a 12-month period that
begins on August 1 of each year and
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ends on July 31 of the following year.
The fiscal year is the 12-month period
that begins on January 1 and ends on
December 31 of each year. Olives are an
alternate-bearing crop, with a large crop
(2021) followed by a small crop (2022).
For this assessment rate rule, the actual
2022 crop year receipts are used to
determine the assessment rate for the
2023 fiscal year.
The major expenditures
recommended by the Committee for the
2023 fiscal year include $547,700 for
program administration, $193,000 for
marketing activities, $325,712 for
research, and $88,000 for inspection.
Budgeted expenses for these items
during the 2022 fiscal year were
$538,700; $284,000; $379,485; and
$42,900, respectively.
The assessment rate recommended by
the Committee resulted from
consideration of anticipated fiscal year
expenses, actual olive tonnage received
by handlers during the 2022 crop year,
and the amount in the Committee’s
financial reserve. Income derived from
handler assessments and other revenue
sources is expected to be adequate to
cover budgeted expenses. The
assessment rate established in this
rulemaking will continue in effect
indefinitely unless modified,
suspended, or terminated by AMS 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
AMS. Committee meetings are open to
the public and interested persons may
express their views at these meetings.
AMS will evaluate Committee
recommendations and other available
information to determine whether
modification of the assessment rate is
needed. Further rulemaking would be
undertaken as necessary. The
Committee’s budget for subsequent
fiscal years will be reviewed and, as
appropriate, approved by AMS.
Final Regulatory Flexibility Analysis
Pursuant to requirements set forth in
the Regulatory Flexibility Act (RFA) (5
U.S.C. 601–612), AMS has considered
the economic impact of this final 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
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businesses 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 800
producers of olives in the production
area and 2 handlers subject to regulation
under the Order. Small agricultural
producers of olives are defined by the
Small Business Administration (SBA) as
those having annual olive receipts of
less than $3.5 million (NAICS code
111339, Other Noncitrus Fruit Farming),
and small agricultural service firms are
defined as those whose annual receipts
are less than $34 million (NAICS code
115114, Postharvest Crop Activities) (13
CFR 121.201).
Because of the large year-to-year
variation in California olive production,
it is helpful to use two-year averages of
seasonal average grower price when
undertaking calculations relating to
average grower revenue. The National
Agricultural Statistics Service (NASS)
reported season average grower prices of
olives utilized for canning for 2020 and
2021 of $1,060 and $1,110 per ton,
respectively, with a two-year average
price of $1,085.
The appropriate quantities to consider
are the annual assessable olive
quantities, which were 19,912 tons in
2022 and 43,336 tons in 2021, with twoyear average production of 31,624 tons.
Multiplying 31,624 tons by the two-year
average grower price of $1,085 yields a
two-year average crop value of $34.312
million. Dividing the crop value by the
number of olive producers (800) yields
calculated annual average revenue per
producer of $42,890, much less than
SBA’s size standard of $3.5 million.
Thus, the majority of olive producers
may be classified as small entities.
Dividing the $34.312 million average
crop value by 2 (the number of
handlers) equals $17.156 million, which
is the annual average olive crop value
processed by each of the 2 handlers over
the two-year period. Subtracting
$17.156 million average crop value from
the large handler size threshold of $34
million yields a difference of $16.844
million. Dividing the $16.844 million
difference by $17.156 average crop
value processed by each of the handlers
yields an average manufacturing margin
of 98 percent to be considered large
handlers. A key question is whether 98
percent is a reasonable estimate of a
manufacturing margin for the olive
canning process.
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A review of economic literature on
canned food manufacturing margins
found no recent published estimates. A
series of Economic Research Service
reports on cost components of farm to
retail price spreads, published in the
late 1970s and early 1980s, found that
margins above crop value for a canned
vegetable product were in the range of
76 to 85 percent. These margins are
somewhat below the computed margin
estimate of 98 percent to reach the $34
million SBA threshold to be a large,
canned olive handler. Although the
studies are not recent, key observations
are that canning technology has not
changed significantly in that time
period, but canning costs may have
risen somewhat. Therefore, the
conclusion to be drawn from these
computations is that the two handlers
are slightly below the large handler
threshold of $34 million in annual
canned olive sales, using two-year
average data, and assuming that the 2
handlers are about the same size.
In a large crop year, one or both
handlers could be considered large
handlers, depending on the proportion
of the olive crop that each of the
handlers processed. For example, the
2021 quantity of assessable olives was
43,336 tons, and half of that quantity
was 21,668 tons. Multiplying that
tonnage by the average grower price of
$1,085 per ton yields a crop value per
handler estimate of $23.51 million. To
reach the $34 million size threshold
would mean canning costs of at least
$10.49 million, which would be a
manufacturing margin of 45 percent
($10.49/$23.51)—well below the range
of canning margins shown above.
The contrasting examples presented
here show that in terms of canned olive
sales, the processors can be viewed as
either being above or below the SBA
large handler size threshold, depending
on the assumptions used in alternative
calculations.
This final rule increases the
assessment rate collected from handlers
for the 2023 and subsequent fiscal years
from $16 to $35 per ton of assessable
olives. The Committee unanimously
recommended 2023 expenditures of
$1,154,412 and an assessment rate of
$35 per ton. The increased assessment
rate of $35 is $19 higher than the 2022
rate. The quantity of assessable olives
harvested in the 2022 crop year was
19,912 tons, as compared to 46,359 tons
in 2021. Olives are an alternate-bearing
crop, with a large crop (2021) followed
by a small crop (2022). Income derived
from the $35 per ton assessment rate,
along with interest income, Federal
grants, and funds from the authorized
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69875
reserve, should be adequate to meet this
fiscal year’s budgeted expenditures.
The Committee’s financial reserve is
projected to be sufficient to partially
fund 2023 fiscal year budgeted
expenditures and remain within the
requirements of § 932.40(a)(2) of the
Order. The major expenditures
recommended by the Committee for the
2023 fiscal year include $547,700 for
program administration, $193,000 for
marketing activities, $325,712 for
research, and $88,000 for inspection.
Budgeted expenses for these items
during the 2022 fiscal year were
$538,700; $284,000; $379,485; and
$42,900 respectively. The Committee
deliberated on many of the expenses,
weighed the relative value of various
programs or projects, and decreased the
budgeted expenses for research and
marketing activities, while increasing
the budget for administration and
inspection program costs. Overall, the
2023 fiscal year budget of $1,154,412 is
$90,673 less than the $1,245,085
budgeted for the 2022 fiscal year.
Prior to arriving at the budget and
recommended assessment rate, the
Committee considered information from
various sources including the
Committee’s Executive, Marketing,
Inspection, and Research
Subcommittees. Alternate expenditure
levels were discussed by these groups,
based upon the relative value of various
projects to the olive industry and the
decreased olive production. The
assessment rate of $35 per ton of
assessable olives was derived by
considering anticipated expenses, the
relatively low volume of assessable
olives, the current balance in the
monetary reserve, and additional
pertinent factors.
A review of NASS information
indicates that the average producer
price for the 2021 crop year, the most
recent crop year surveyed by NASS, was
$851 per ton. The quantity of assessable
olives harvested during the 2022 crop
year was 19,912 tons, which makes
estimated total producer revenue
$16,945,112 ($851 multiplied by 19,912
tons). Therefore, using the assessment
rate of $35 per ton, the assessment
revenue for the 2023 fiscal year as a
percentage of estimated total producer
revenue is expected to be approximately
4.1 percent ($35 multiplied by 19,912
tons divided by $16,945,112 multiplied
by 100).
This action increases the assessment
obligation imposed on handlers.
Assessments are applied uniformly on
all handlers, and some of the costs may
be passed on to producers. However,
these costs are expected to be offset by
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the benefits derived by the operation of
the Order.
The Committee’s meetings are widely
publicized throughout the production
area. The olive industry and all
interested persons are invited to attend
the meetings and participate in
Committee deliberations on all issues.
Like all Committee meetings, the
December 13, 2022, meeting was a
public meeting and all entities, both
large and small, were able to express
views on this issue. In addition,
interested persons were invited to
submit comments on this rule,
including the regulatory and
information collection impacts of this
action on small businesses.
In accordance with the Paperwork
Reduction Act of 1995, (44 U.S.C.
Chapter 35), the Order’s information
collection requirements have been
previously approved by OMB and
assigned OMB No. 0581–0178 Vegetable
and Specialty Crops. No changes are
necessary in those requirements as a
result of this action. Should any changes
become necessary, they will be
submitted to OMB for approval.
This final rule will not impose any
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.
AMS is committed to complying with
the E-Government Act, to promote the
use of the internet and other
information technologies to provide
increased opportunities for citizen
access to Government information and
services, and for other purposes.
AMS has not identified any relevant
Federal rules that duplicate, overlap, or
conflict with this action.
A proposed rule concerning this
action was published in the Federal
Register on June 16, 2023 (88 FR 39374).
Copies of the proposed rule were also
mailed or sent via email to California
olive handlers. A copy of the proposed
rule was made available through the
internet by AMS via https://
www.regulations.gov. A 30-day
comment period ending July 17, 2023,
was provided for interested persons to
respond to the proposal. No comments
were received. Accordingly, no changes
have been made to the rule as proposed.
A small business guide on complying
with fruit, vegetable, and specialty crop
marketing agreements and orders may
be viewed at: https://
www.ams.usda.gov/rules-regulations/
moa/small-businesses. Any questions
about the compliance guide should be
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sent to Richard Lower at the previously
mentioned address in the FOR FURTHER
INFORMATION CONTACT section.
After consideration of all relevant
material presented, including the
information and recommendations
submitted by the Committee and other
available information, AMS has
determined that this rule tends to
effectuate the declared policy of the Act.
List of Subjects in 7 CFR Part 932
Marketing agreements, Olives,
Reporting and recordkeeping
requirements.
For the reasons set forth in the
preamble, the Agricultural Marketing
Service amends 7 CFR part 932 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:
■
§ 932.230
Assessment rate.
On and after January 1, 2023, an
assessment rate of $35.00 per ton is
established for California olives.
Erin Morris,
Associate Administrator, Agricultural
Marketing Service.
[FR Doc. 2023–22332 Filed 10–6–23; 8:45 am]
BILLING CODE 3410–02–P
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 956
[Doc. No. AMS–SC–23–0006]
Sweet Onions Grown in the Walla
Walla Valley of Southeast Washington
and Northeast Oregon; Increased
Assessment Rate
Agricultural Marketing Service,
USDA.
ACTION: Final rule.
AGENCY:
This rule implements a
recommendation from the Walla Walla
Sweet Onion Marketing Committee
(Committee) to increase the assessment
rate established for the 2023 and
subsequent fiscal periods. The
assessment rate will remain in effect
indefinitely unless modified,
suspended, or terminated.
DATES: Effective November 9, 2023.
FOR FURTHER INFORMATION CONTACT: Dale
Novotny, Marketing Specialist, or Gary
SUMMARY:
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Olson, Chief, West Region Branch,
Market Development Division, Specialty
Crops Program, AMS, USDA;
Telephone: (503) 326–2724, or Email:
DaleJ.Novotny@usda.gov or
GaryD.Olson@usda.gov.
Small businesses may request
information on complying with this
regulation by contacting Richard Lower,
Market Development Division, Specialty
Crops Program, AMS, USDA, 1400
Independence Avenue SW, STOP 0237,
Washington, DC 20250–0237;
Telephone: (202) 720–8085, or Email:
Richard.Lower@usda.gov.
SUPPLEMENTARY INFORMATION: This
action, pursuant to 5 U.S.C. 553,
amends regulations issued to carry out
a marketing order as defined in 7 CFR
900.2(j). This rule is issued under
Marketing Agreement and Order No.
956, both as amended (7 CFR part 956),
regulating the handling of sweet onions
grown in the Walla Walla Valley of
southeast Washington and northeast
Oregon. Part 956 referred to as 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
Committee locally administers the
Order and is comprised of producers
and handlers of Walla Walla sweet
onions operating within the area of
production, and a public member.
The Agricultural Marketing Service
(AMS) is issuing this rule in
conformance with Executive Orders
12866, 13563, and 14094. Executive
Orders 12866 and 13563 direct agencies
to assess all costs and benefits of
available regulatory alternatives and, if
regulation is necessary, to select
regulatory approaches that maximize
net benefits (including potential
economic, environmental, public health
and safety effects, distributive impacts,
and equity). Executive Order 13563
emphasizes the importance of
quantifying both costs and benefits,
reducing costs, harmonizing rules, and
promoting flexibility. Executive Order
14094 reaffirms, supplements, and
updates Executive Order 12866 and
further directs agencies to solicit and
consider input from a wide range of
affected and interested parties through a
variety of means. This action falls
within a category of regulatory actions
that the Office of Management and
Budget (OMB) exempted from Executive
Order 12866 review.
This rule has been reviewed under
Executive Order 13175—Consultation
and Coordination with Indian Tribal
Governments, which requires agencies
to consider whether their rulemaking
actions would have Tribal implications.
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]]>Agencies
[Federal Register Volume 88, Number 194 (Tuesday, October 10, 2023)]
[Rules and Regulations]
[Pages 69873-69876]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-22332]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 932
[Doc. No. AMS-SC-22-0094]
Olives Grown in California; Increased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: This final rule implements a recommendation from the
California Olive Committee (Committee) to increase the assessment rate
established for the 2023 fiscal year and subsequent fiscal years. The
assessment rate will remain in effect indefinitely unless modified,
suspended, or terminated.
DATES: Effective November 9, 2023.
FOR FURTHER INFORMATION CONTACT: Jeremy Sasselli, Marketing Specialist,
or Gary Olson, Chief, West Region Branch, Market Development Division,
Specialty Crops Program, AMS, USDA; Telephone: (559) 487-5901 or Email:
[email protected] or [email protected].
Small businesses may request information on complying with this
regulation by contacting Richard Lower, Market Development Division,
Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP
0237, Washington, DC 20250-0237; Telephone: (202) 720-8085, or Email:
[email protected].
SUPPLEMENTARY INFORMATION: This action, pursuant to 5 U.S.C. 553,
amends regulations issued to carry out a marketing order as defined in
7 CFR 900.2(j). This rule is issued under Marketing Order No. 932, as
amended (7 CFR part 932), regulating the handling of olives grown in
California. Part 932 referred to as 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 Committee
administers the Order and is comprised of producers and handlers of
olives operating within the area of production and may have one public
member.
The Agricultural Marketing Service (AMS) is issuing this final rule
in conformance with Executive Orders 12866, 13563, and 14094. Executive
Orders 12866 and 13563 direct agencies
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to assess costs and benefits of available regulatory alternatives and,
if regulation is necessary, to select regulatory approaches that
maximize net benefits (including potential economic, environmental,
public health and safety effects, distributive impacts, and equity).
Executive Order 13563 emphasizes the importance of quantifying both
costs and benefits, reducing costs, harmonizing rules, and promoting
flexibility. Executive Order 14094 updates and modernizes Executive
Order 12866 and directs agencies to conduct proactive outreach to
engage interested and affected parties through a variety of means, such
as through field offices, and alternative platforms and media. This
action falls within a category of regulatory actions that the Office of
Management and Budget (OMB) exempted from Executive Order 12866 review.
This final rule has been reviewed under Executive Order 13175--
Consultation and Coordination with Indian Tribal Governments, which
requires agencies to consider whether their rulemaking actions would
have Tribal implications. AMS has determined that this rule is unlikely
to have substantial direct effects on one or more Indian Tribes, on the
relationship between the Federal Government and Indian Tribes, or on
the distribution of power and responsibilities between the Federal
Government and Indian Tribes.
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. Under the Order now in effect, California olive
handlers are subject to assessments. Funds to administer the Order are
derived from such assessments. The assessment rate established herein
will be applicable to all assessable olives beginning on January 1,
2023, and continue until amended, suspended, or terminated.
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 United States
Department of Agriculture (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.
The Order provides authority for the Committee, with the approval
of AMS, to formulate an annual budget of expenses and to collect
assessments from handlers to administer the program. The members are
familiar with the Committee's needs and with the costs of goods and
services in their local area, and can formulate an appropriate budget
and assessment rate. The assessment rate is formulated and discussed in
a public meeting, and all directly affected persons have an opportunity
to participate and provide input.
This final rule increases the assessment rate from $16 per ton of
assessed olives, the rate that was established for the 2022 and
subsequent fiscal years, to $35 per ton of assessed olives for the 2023
and subsequent fiscal years. The higher rate is the result of the
significantly lower crop size in 2022 (fruit that is marketed over the
course of the 2023 fiscal year) and the need to maintain the
Committee's financial reserve.
The Committee met on December 13, 2022, and unanimously recommended
2023 fiscal year expenditures of $1,154,412 and an assessment rate of
$35 per ton of assessed olives. In comparison, last year's budgeted
expenditures were $1,245,085. The assessment rate of $35 is $19 higher
than the rate currently in effect. Producer receipts show a yield of
19,912 tons of assessable olives from the 2022 crop year, which is
substantially less than the quantity of olives harvested in the 2021
crop year, in which 46,359 tons of assessable olives were produced.
Olives harvested in 2022 will be marketed over the course of the
2023 fiscal year, which begins on January 1, 2023. The 19,912 tons of
assessable olives from the 2022 crop should generate $696,920 in
assessment revenue at the $35 per ton assessment rate. The balance of
funds needed to cover budgeted expenditures will come from interest
income, Federal grants, and the Committee's financial reserve. The 2023
fiscal year assessment rate increase is appropriate to ensure the
Committee has sufficient revenue to fund the recommended 2023 fiscal
year budgeted expenditures. Funds in the reserve are expected to remain
within the Order's requirement of no more than approximately one fiscal
year's budgeted expenses.
The Order has a fiscal year and a crop year that are independent of
each other. The crop year is a 12-month period that begins on August 1
of each year and ends on July 31 of the following year. The fiscal year
is the 12-month period that begins on January 1 and ends on December 31
of each year. Olives are an alternate-bearing crop, with a large crop
(2021) followed by a small crop (2022). For this assessment rate rule,
the actual 2022 crop year receipts are used to determine the assessment
rate for the 2023 fiscal year.
The major expenditures recommended by the Committee for the 2023
fiscal year include $547,700 for program administration, $193,000 for
marketing activities, $325,712 for research, and $88,000 for
inspection. Budgeted expenses for these items during the 2022 fiscal
year were $538,700; $284,000; $379,485; and $42,900, respectively.
The assessment rate recommended by the Committee resulted from
consideration of anticipated fiscal year expenses, actual olive tonnage
received by handlers during the 2022 crop year, and the amount in the
Committee's financial reserve. Income derived from handler assessments
and other revenue sources is expected to be adequate to cover budgeted
expenses. The assessment rate established in this rulemaking will
continue in effect indefinitely unless modified, suspended, or
terminated by AMS 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 AMS.
Committee meetings are open to the public and interested persons may
express their views at these meetings. AMS will evaluate Committee
recommendations and other available information to determine whether
modification of the assessment rate is needed. Further rulemaking would
be undertaken as necessary. The Committee's budget for subsequent
fiscal years will be reviewed and, as appropriate, approved by AMS.
Final Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA) (5 U.S.C. 601-612), AMS has considered the economic impact of
this final 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
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businesses 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 800 producers of olives in the production
area and 2 handlers subject to regulation under the Order. Small
agricultural producers of olives are defined by the Small Business
Administration (SBA) as those having annual olive receipts of less than
$3.5 million (NAICS code 111339, Other Noncitrus Fruit Farming), and
small agricultural service firms are defined as those whose annual
receipts are less than $34 million (NAICS code 115114, Postharvest Crop
Activities) (13 CFR 121.201).
Because of the large year-to-year variation in California olive
production, it is helpful to use two-year averages of seasonal average
grower price when undertaking calculations relating to average grower
revenue. The National Agricultural Statistics Service (NASS) reported
season average grower prices of olives utilized for canning for 2020
and 2021 of $1,060 and $1,110 per ton, respectively, with a two-year
average price of $1,085.
The appropriate quantities to consider are the annual assessable
olive quantities, which were 19,912 tons in 2022 and 43,336 tons in
2021, with two-year average production of 31,624 tons. Multiplying
31,624 tons by the two-year average grower price of $1,085 yields a
two-year average crop value of $34.312 million. Dividing the crop value
by the number of olive producers (800) yields calculated annual average
revenue per producer of $42,890, much less than SBA's size standard of
$3.5 million. Thus, the majority of olive producers may be classified
as small entities.
Dividing the $34.312 million average crop value by 2 (the number of
handlers) equals $17.156 million, which is the annual average olive
crop value processed by each of the 2 handlers over the two-year
period. Subtracting $17.156 million average crop value from the large
handler size threshold of $34 million yields a difference of $16.844
million. Dividing the $16.844 million difference by $17.156 average
crop value processed by each of the handlers yields an average
manufacturing margin of 98 percent to be considered large handlers. A
key question is whether 98 percent is a reasonable estimate of a
manufacturing margin for the olive canning process.
A review of economic literature on canned food manufacturing
margins found no recent published estimates. A series of Economic
Research Service reports on cost components of farm to retail price
spreads, published in the late 1970s and early 1980s, found that
margins above crop value for a canned vegetable product were in the
range of 76 to 85 percent. These margins are somewhat below the
computed margin estimate of 98 percent to reach the $34 million SBA
threshold to be a large, canned olive handler. Although the studies are
not recent, key observations are that canning technology has not
changed significantly in that time period, but canning costs may have
risen somewhat. Therefore, the conclusion to be drawn from these
computations is that the two handlers are slightly below the large
handler threshold of $34 million in annual canned olive sales, using
two-year average data, and assuming that the 2 handlers are about the
same size.
In a large crop year, one or both handlers could be considered
large handlers, depending on the proportion of the olive crop that each
of the handlers processed. For example, the 2021 quantity of assessable
olives was 43,336 tons, and half of that quantity was 21,668 tons.
Multiplying that tonnage by the average grower price of $1,085 per ton
yields a crop value per handler estimate of $23.51 million. To reach
the $34 million size threshold would mean canning costs of at least
$10.49 million, which would be a manufacturing margin of 45 percent
($10.49/$23.51)--well below the range of canning margins shown above.
The contrasting examples presented here show that in terms of
canned olive sales, the processors can be viewed as either being above
or below the SBA large handler size threshold, depending on the
assumptions used in alternative calculations.
This final rule increases the assessment rate collected from
handlers for the 2023 and subsequent fiscal years from $16 to $35 per
ton of assessable olives. The Committee unanimously recommended 2023
expenditures of $1,154,412 and an assessment rate of $35 per ton. The
increased assessment rate of $35 is $19 higher than the 2022 rate. The
quantity of assessable olives harvested in the 2022 crop year was
19,912 tons, as compared to 46,359 tons in 2021. Olives are an
alternate-bearing crop, with a large crop (2021) followed by a small
crop (2022). Income derived from the $35 per ton assessment rate, along
with interest income, Federal grants, and funds from the authorized
reserve, should be adequate to meet this fiscal year's budgeted
expenditures.
The Committee's financial reserve is projected to be sufficient to
partially fund 2023 fiscal year budgeted expenditures and remain within
the requirements of Sec. 932.40(a)(2) of the Order. The major
expenditures recommended by the Committee for the 2023 fiscal year
include $547,700 for program administration, $193,000 for marketing
activities, $325,712 for research, and $88,000 for inspection. Budgeted
expenses for these items during the 2022 fiscal year were $538,700;
$284,000; $379,485; and $42,900 respectively. The Committee deliberated
on many of the expenses, weighed the relative value of various programs
or projects, and decreased the budgeted expenses for research and
marketing activities, while increasing the budget for administration
and inspection program costs. Overall, the 2023 fiscal year budget of
$1,154,412 is $90,673 less than the $1,245,085 budgeted for the 2022
fiscal year.
Prior to arriving at the budget and recommended assessment rate,
the Committee considered information from various sources including the
Committee's Executive, Marketing, Inspection, and Research
Subcommittees. Alternate expenditure levels were discussed by these
groups, based upon the relative value of various projects to the olive
industry and the decreased olive production. The assessment rate of $35
per ton of assessable olives was derived by considering anticipated
expenses, the relatively low volume of assessable olives, the current
balance in the monetary reserve, and additional pertinent factors.
A review of NASS information indicates that the average producer
price for the 2021 crop year, the most recent crop year surveyed by
NASS, was $851 per ton. The quantity of assessable olives harvested
during the 2022 crop year was 19,912 tons, which makes estimated total
producer revenue $16,945,112 ($851 multiplied by 19,912 tons).
Therefore, using the assessment rate of $35 per ton, the assessment
revenue for the 2023 fiscal year as a percentage of estimated total
producer revenue is expected to be approximately 4.1 percent ($35
multiplied by 19,912 tons divided by $16,945,112 multiplied by 100).
This action increases the assessment obligation imposed on
handlers. Assessments are applied uniformly on all handlers, and some
of the costs may be passed on to producers. However, these costs are
expected to be offset by
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the benefits derived by the operation of the Order.
The Committee's meetings are widely publicized throughout the
production area. The olive industry and all interested persons are
invited to attend the meetings and participate in Committee
deliberations on all issues. Like all Committee meetings, the December
13, 2022, meeting was a public meeting and all entities, both large and
small, were able to express views on this issue. In addition,
interested persons were invited to submit comments on this rule,
including the regulatory and information collection impacts of this
action on small businesses.
In accordance with the Paperwork Reduction Act of 1995, (44 U.S.C.
Chapter 35), the Order's information collection requirements have been
previously approved by OMB and assigned OMB No. 0581-0178 Vegetable and
Specialty Crops. No changes are necessary in those requirements as a
result of this action. Should any changes become necessary, they will
be submitted to OMB for approval.
This final rule will not impose any 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.
AMS is committed to complying with the E-Government Act, to promote
the use of the internet and other information technologies to provide
increased opportunities for citizen access to Government information
and services, and for other purposes.
AMS has not identified any relevant Federal rules that duplicate,
overlap, or conflict with this action.
A proposed rule concerning this action was published in the Federal
Register on June 16, 2023 (88 FR 39374). Copies of the proposed rule
were also mailed or sent via email to California olive handlers. A copy
of the proposed rule was made available through the internet by AMS via
https://www.regulations.gov. A 30-day comment period ending July 17,
2023, was provided for interested persons to respond to the proposal.
No comments were received. Accordingly, no changes have been made to
the rule as proposed.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at:
https://www.ams.usda.gov/rules-regulations/moa/small-businesses. Any
questions about the compliance guide should be sent to Richard Lower at
the previously mentioned address in the FOR FURTHER INFORMATION CONTACT
section.
After consideration of all relevant material presented, including
the information and recommendations submitted by the Committee and
other available information, AMS has determined that this rule tends to
effectuate the declared policy of the Act.
List of Subjects in 7 CFR Part 932
Marketing agreements, Olives, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, the Agricultural
Marketing Service amends 7 CFR part 932 as follows:
PART 932--OLIVES GROWN IN CALIFORNIA
0
1. The authority citation for 7 CFR part 932 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
0
2. Section 932.230 is revised to read as follows:
Sec. 932.230 Assessment rate.
On and after January 1, 2023, an assessment rate of $35.00 per ton
is established for California olives.
Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2023-22332 Filed 10-6-23; 8:45 am]
BILLING CODE 3410-02-P
