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

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 932

[Docket No. FV99-932-2 FIR]

Olives Grown in California; Modification to Handler Membership on

the California Olive Committee

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule

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SUMMARY: The Department of Agriculture (Department) is adopting, as a

final rule, without change, the provisions of an interim final rule

modifying 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. Previously, handler membership was

allocated between cooperative marketing organizations and independent

handlers (handlers not affiliated with cooperatives), and the number of

handler members who may have been affiliated with any one handler was

limited to two. This rule continues in effect the removal of the

distinction between cooperative and independent handlers, continues in

effect the removal of the limitation on handler affiliation, and

continues in effect the reallocation of handler membership on the basis

of the total quantity of olives handled. These modifications will allow

two vacant handler member positions on the committee to be filled. This

rule was unanimously recommended by the committee.

EFFECTIVE DATE: June 1, 1999.

FOR FURTHER INFORMATION CONTACT: Terry Vawter, 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, F&V, AMS, USDA, room 2525-S, PO Box 96456, Washington, DC

20090-6456; telephone: (202) 720-2491; Fax: (202) 720-5698. Small

businesses may request information on complying 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, PO Box 96456, room 2525-S, Washington, DC 20090-6456;

telephone: (202) 720-2491; Fax: (202) 720-5698, or E-mail:

Jay.G[email protected]. You may view the marketing agreement and order

small business compliance guide at the following web site: http://

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 is issuing this rule in conformance with Executive

Order 12866.

This final rule has been reviewed under Executive Order 12988,

Civil Justice Reform. This rule is not intended to have retroactive

effect. 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. 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.

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 two members shall represent cooperative marketing

organizations and six members shall represent handlers who are not

cooperative marketing organizations. In addition, Sec. 932.160 limits

to two the number of handler members that may be affiliated with the

same handler.

The committee met on December 10, 1998, and unanimously recommended

modifying the rules and regulations to remove the distinction between

cooperative and independent handlers, and increase the limitation on

the number of handler members that may be affiliated with the same

handler. It also unanimously recommended 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 the preceding crop year

be represented by three members each, and that the third largest

handler be represented by two members. This rule continues in effect

the modification of the committee's handler membership to reflect

changes within the handler segment of the industry, and to enable the

committee to operate at full strength; i.e., with all eight handler and

producer positions filled.

[[Page 23010]]

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, Sec. 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.

Since 1993, the number of handlers in the olive industry has

continued to decline. Today there are three handlers remaining--one

cooperative and two independents. Because there is only one existing

cooperative, the committee believes that the distinction regarding

cooperative and independent handlers on the committee is no longer

appropriate or necessary.

Additionally, prior to the issuance of the interim final rule,

Sec. 932.160 specified that no more than two nominees for member and

alternate member positions may be affiliated with the same handler.

Because there are only three handlers remaining in the industry, this

restriction resulted in two vacant handler positions on the committee

that could not be filled.

To allow these positions to be filled and enable the committee to

operate at full strength, the committee recommended that Sec. 932.159

be revised to eliminate the distinction between cooperative marketing

organizations and independent handlers (or handlers not affiliated with

a cooperative marketing organization). It also recommended that the

eight handler seats on the committee be 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 with three members each,

and the remaining handler being represented with two members.

The reallocation of handler membership in Sec. 932.159 makes the

two-nominee limitation on affiliation with the same handler specified

in Sec. 932.160 unnecessary, and that section is continued to be

removed.

These changes are designed to modify the committee's handler

membership to reflect structural changes within the handler segment of

the industry, and to remove the former barriers to filling the two

vacant handler positions on the committee.

Pursuant to requirements set forth in the Regulatory Flexibility

Act (RFA), the Agricultural Marketing Service (AMS) has considered the

economic impact of this action 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 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. Small agricultural service firms have

been defined by the Small Business Administration (13 CFR 121.601) 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.

Based on a review of historical and preliminary price and marketing

information, total grower revenue for the 1998-99 crop year (August 1

through July 31) is estimated to 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 continues in effect the modification of the order's

administrative rules and regulations regarding the structure of handler

membership on the committee. The committee locally administers the

order and is composed of 16 industry members. Eight of the 16 industry

members are producers and 8 are handlers. Previously, handler

membership provisions distinguished between cooperative marketing

organizations and independent handlers specifying that two members

shall represent cooperative marketing organizations and six members

shall represent handlers who are not cooperative marketing

organizations. The handler nominee provisions also specified that no

more than two nominees for handler member and alternate member

positions may be affiliated with the same handler.

This rule also continues in effect the modification of the order's

rules and regulations to remove the distinction between cooperative and

independent handlers, and to specify that the number of members

representing each of the three currently existing industry handlers

shall be based on the total volume of olives handled during the

nominating crop year and the preceding crop year, with the two handlers

handling the largest and second largest volume of olives represented by

three members and alternates each, and the remaining handler

represented by two members and alternates. In addition, this rule

continues in effect the removal of provisions limiting the number of

members to which each handler is entitled because the limitation is no

longer necessary. The changes were unanimously recommended by the

committee and are intended to modify the committee's handler membership

to reflect structural changes within the handler segment of the

industry, and to remove former barriers to filling two vacant handler

positions on the committee. Authority for this rule is provided in

Sec. 932.25 which allows the committee, with the approval of the

Secretary, to reallocate the committee's producer or handler membership

as necessary to assure equitable representation.

Continuing in effect the removal of the distinction between

cooperative and independent handlers will not have any impact on

handlers or producers in the California olive industry.

One alternative to this rule discussed at the meeting was to leave

the language in Sec. 932.159 unchanged; however, the committee believed

that the distinction between cooperative and independent was no longer

appropriate, because there is only one existing cooperative in the

industry and two independent handlers. Another alternative discussed at

the meeting was to leave Sec. 932.160 of the order's rules and

regulations unchanged so that only two members may be affiliated with

the same handler, but with only three handlers currently in the

industry that would have resulted in uneven representation between

growers with eight members and

[[Page 23011]]

handlers with six members, and would have failed to assure equitable

representation on the committee as is required pursuant to Sec. 932.25.

This rule will not impose any additional reporting or recordkeeping

requirements on any of the three 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, as noted in the initial regulatory

flexibility analysis, 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 December 10, 1998, meeting was a

public meeting and all entities, both large and small, were able to

express their views on this issue. All three industry handlers are

currently represented on the committee and participated in the

deliberations.

An interim final rule concerning this action was published in the

Federal Register on January 28, 1999. The committee staff advised each

handler of such publication by personal contact. In addition, the rule

was made available through the Internet by the Office of the Federal

Register. That rule provided a 60-day comment period, which ended March

29, 1999. No comments were received.

After consideration of all relevant material presented, including

the committee's recommendation, and other information, it is found that

finalizing the interim final rule, without change, as published in the

Federal Register (64 FR 4286), 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

Accordingly, the interim final rule amending 7 CFR part 932 which

was published at 64 FR 4286 on January 28, 1999, is adopted as a final

rule without change.

Dated: April 21, 1999.

Robert C. Keeney,

Deputy Administrator, Fruit and Vegetable Programs.

[FR Doc. 99-10773 Filed 4-28-99; 8:45 am]

BILLING CODE 3410-02-P