Rule2022-17759
Olives Grown in California; Decreased Assessment Rate
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
August 18, 2022
Effective
September 19, 2022
Issuing agencies
Agriculture DepartmentAgricultural Marketing Service
Abstract
This final rule implements a recommendation from the California Olive Committee to decrease the assessment rate established for the 2022 fiscal year and subsequent fiscal years. The assessment rate will remain in effect indefinitely unless modified, suspended, or terminated.
Full Text
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<title>Federal Register, Volume 87 Issue 159 (Thursday, August 18, 2022)</title>
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[Federal Register Volume 87, Number 159 (Thursday, August 18, 2022)]
[Rules and Regulations]
[Pages 50763-50765]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-17759]
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Rules and Regulations
Federal Register
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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 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 87, No. 159 / Thursday, August 18, 2022 /
Rules and Regulations
[[Page 50763]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 932
[Doc. No. AMS-SC-21-0099; SC22-932-1 FR]
Olives Grown in California; Decreased 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 to decrease the assessment rate established
for the 2022 fiscal year and subsequent fiscal years. The assessment
rate will remain in effect indefinitely unless modified, suspended, or
terminated.
DATES: Effective September 19, 2022.
FOR FURTHER INFORMATION CONTACT: Kathie Notoro, Marketing Specialist,
or Gary Olson, Regional Director, West Region Branch, Market
Development Division, Specialty Crops Program, AMS, USDA; Telephone:
(559) 538-1672, or Email: <a href="/cdn-cgi/l/email-protection#9dd6fce9f5f4f8b3d3f2e9f2eff2dde8eef9fcb3faf2eb"><span class="__cf_email__" data-cfemail="85cee4f1edece0abcbeaf1eaf7eac5f0f6e1e4abe2eaf3">[email protected]</span></a> or
<a href="/cdn-cgi/l/email-protection#024563707b462c4d6e716d6c42777166632c656d74"><span class="__cf_email__" data-cfemail="ffb89e8d86bbd1b0938c9091bf8a8c9b9ed1989089">[email protected]</span></a>.
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) 720-2491, or Email:
<a href="/cdn-cgi/l/email-protection#d486bdb7bcb5a6b0fa98bba3b1a694a1a7b0b5fab3bba2"><span class="__cf_email__" data-cfemail="23714a404b4251470d6f4c54465163565047420d444c55">[email protected]</span></a>.
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. 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
California Olive Committee (Committee) locally administers the Order
and is comprised of producers and handlers of olives operating within
the area of production, and one public member.
The Agricultural Marketing Service (AMS) is issuing this rule in
conformance with Executive Orders 12866 and 13563. 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. 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 will
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. This rule is not intended to have retroactive effect.
Under the 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 be applicable to
all assessable olives beginning on January 1, 2022, 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 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 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.
This rule decreases the assessment rate from $30.00 per ton of
assessed olives, the rate that was established for the 2021 and
subsequent fiscal years, to $16.00 per ton of assessed olives for the
2022 and subsequent fiscal years. The lower rate is the result of the
significantly higher crop size in 2021 (fruit that is marketed over the
course of the 2022 fiscal year) and the need to reduce the Committee's
financial reserve.
The Committee met on November 10, 2021, and unanimously recommended
2022 expenditures of $1,245,085 and an assessment rate of $16.00 per
ton of assessed olives to fund necessary administrative expenses and to
maintain a financial reserve within the limits prescribed under the
Order. In comparison, last year's budgeted expenditures were
$1,151,831. The assessment rate of $16.00 is $14.00 lower than the rate
previously in effect. Producer receipts show a yield of 43,336 tons of
assessable olives from the 2021 crop year, which is more than double
the quantity of olives harvested in 2020.
Olives harvested in 2021 will be marketed over the course of the
2022 fiscal year, which begins on January 1,
[[Page 50764]]
2022. The 43,336 tons of assessable olives from the 2021 crop should
generate $693,376 in assessment revenue at the newly established
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 2022 fiscal year assessment rate
decrease is appropriate to ensure the Committee has sufficient revenue
to fund the recommended 2022 fiscal year budgeted expenditures while
ensuring the funds in the financial reserve will be kept within the
maximum permitted by Sec. 932.40.
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 small crop
followed by a large crop. The Committee used the actual 2021 crop year
receipts, in part, to determine the recommended assessment rate for the
2022 fiscal year.
The major expenditures recommended by the Committee for the 2022
fiscal year includes $538,700 for program administration, $284,000 for
marketing activities, $379,485 for research, and $42,900 for
inspection. Budgeted expenses for these items during the 2021 fiscal
year were $531,300, $238,000, $334,532, and $48,000, respectively.
The Committee derived the recommended assessment rate by
considering anticipated fiscal year expenses, actual olive tonnage
received by handlers during the 2021 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 rule 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 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
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 olive
producers are defined by the Small Business Administration (SBA) as
those having annual receipts less than $3,000,000(NAICS code 111339,
Other Noncitrus Fruit Farming). The SBA threshold for producers changed
after the publication of the proposed rule. Thus, AMS changed the
producer threshold to reflect the new SBA threshold in this final rule.
The change did not impact the number of producers considered to be
small. Small agricultural service firms are defined as those whose
annual receipts are less than $30,000,000 (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
seasonal average grower prices of olives utilized for canning for 2019
and 2020 of $1,040 and $1,060 per ton, respectively. The two-year
average price is $1,050.
The appropriate quantities to consider are the annual assessable
olive quantities, which were 20,020 tons in 2020 and 43,336 tons in
2021. The two-year average quantity was 31,678 tons. Multiplying 31,678
tons by the two-year average grower price of $1,050 yields a two-year
average crop value of $33.262 million. Dividing the crop value by the
number of olive producers (800) yields calculated annual average
producer revenue of $41,577, much less than SBA's size threshold of
$3,000,000. Thus, the majority of olive producers may be classified as
small entities.
Dividing the $33.262 million crop value by two equals $16.631
million, which is the annual average producer crop value processed by
each of the two handlers over the two-year period. Dividing the $30
million annual sales SBA size threshold for a large handler by the
$16.631 crop value per handler yields an estimate of an 80 percent
manufacturing margin for the two canners, on average, to be considered
large handlers. A key question is whether 80 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 was in the
range of 76 to 85 percent. Although the studies are not recent, a key
observation is that canning technology has not changed significantly in
that time period. Therefore, with the 80 percent margin estimate for
the two olive handlers, the data indicates that they are right on the
threshold of being large handlers ($30 million in annual sales), using
two-year average data, and assuming that the two 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 crop that
each of the handlers processed.
This rule decreases the assessment rate collected from handlers for
the 2022 and subsequent fiscal years from $30.00 to $16.00 per ton of
assessable olives. The Committee unanimously recommended 2022
expenditures of $1,245,085 and an assessment rate of $16.00 per ton.
The new assessment rate of $16.00 is $14.00 lower than the 2021 rate.
The quantity of assessable olives harvested in the 2021 crop year was
43,336 tons as compared to 20,020 tons in 2020. Olives are an
alternate-bearing crop, with a small crop followed by a large crop.
Income derived from the $16.00 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 $1,990,000.
The major expenditures recommended by the Committee for the 2022 fiscal
year include $538,700 for program
[[Page 50765]]
administration, $284,000 for marketing activities, $379,485 for
research, and $42,900 for inspection. Budgeted expenses for these items
during the 2021 fiscal year were $531,300, $238,000, $334,531, and
$48,000, respectively. The Committee deliberated on many of the
expenses, weighed the relative value of various programs or projects,
and decreased their expenses for marketing and research activities
while increasing program administration. Overall, the 2022 budget of
$1,245,085 is $93,254 more than the $1,151,831 budgeted for the 2021
fiscal year.
Prior to arriving at this budget and 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
increased olive production. The assessment rate of $16.00 per ton of
assessable olives was derived by considering anticipated expenses, the
high 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 2020 crop year was $1,060 per ton and the quantity of
assessable olives harvested in the 2021 crop year is 43,336 tons, which
makes total producer revenue $45,936,160 ($1,060 multiplied by 43,336
tons). Therefore, utilizing the assessment rate of $16.00 per ton, the
assessment revenue for the 2022 fiscal year as a percentage of total
producer revenue is expected to be approximately 1.5 percent ($16.00
multiplied by 43,336 tons divided by $45,936,160 multiplied by 100).
This action will decrease 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, decreasing the
assessment rate reduces the burden on handlers and may also reduce the
burden on producers.
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 November
10, 2021, 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 in those requirements as a result of this
action are necessary. Should any changes become necessary, they would
be submitted to OMB for approval.
This rule does 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.
USDA has not identified any relevant Federal rules that duplicate,
overlap, or conflict with this final rule.
A proposed rule concerning this action was published in the Federal
Register on April 14, 2022 (87 FR 22142). Copies of the proposed rule
were also mailed or sent via email to all olive handlers. A copy of the
proposed rule was made available through the internet by AMS and
<a href="https://www.regulations.gov">https://www.regulations.gov</a>. A 60-day comment period ending June 13,
2022, 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:
<a href="https://www.ams.usda.gov/rules-regulations/moa/small-businesses">https://www.ams.usda.gov/rules-regulations/moa/small-businesses</a>. 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 final rule is
consistent with and will 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 is amending 7 CFR part 932 as follows:
PART 932--OLIVES GROWN IN CALIFORNIA
0
1. The authority citation for 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, 2022, an assessment rate of $16.00 per ton
is established for California olives.
Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2022-17759 Filed 8-17-22; 8:45 am]
BILLING CODE P
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