Proposed Rule2024-06482
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
March 28, 2024
Issuing agencies
Agriculture DepartmentAgricultural Marketing Service
Abstract
This proposed rule would implement a recommendation from the California Olive Committee (Committee) to decrease the assessment rate established for the 2024 fiscal year and subsequent fiscal years. The proposed assessment rate would remain in effect indefinitely unless modified, suspended, or terminated.
Full Text
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<title>Federal Register, Volume 89 Issue 61 (Thursday, March 28, 2024)</title>
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[Federal Register Volume 89, Number 61 (Thursday, March 28, 2024)]
[Proposed Rules]
[Pages 21441-21443]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-06482]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 89, No. 61 / Thursday, March 28, 2024 /
Proposed Rules
[[Page 21441]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 932
[Doc. No. AMS-SC-23-0087]
Olives Grown in California; Decreased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would implement a recommendation from the
California Olive Committee (Committee) to decrease the assessment rate
established for the 2024 fiscal year and subsequent fiscal years. The
proposed assessment rate would remain in effect indefinitely unless
modified, suspended, or terminated.
DATES: Comments must be received by April 29, 2024.
ADDRESSES: Interested persons are invited to submit written comments
concerning this proposed rule. Comments must be sent to the Docket
Clerk electronically by Email: <a href="/cdn-cgi/l/email-protection#c78aa6b5aca2b3aea9a088b5a3a2b584a8aaaaa2a9b387b2b4a3a6e9a0a8b1"><span class="__cf_email__" data-cfemail="a0edc1d2cbc5d4c9cec7efd2c4c5d2e3cfcdcdc5ced4e0d5d3c4c18ec7cfd6">[email protected]</span></a> or
internet: <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Comments should reference the
document number and the date and page number of this issue of the
Federal Register and can be viewed at: <a href="https://www.regulations.gov">https://www.regulations.gov</a>. All
comments submitted in response to this proposed rule will be included
in the record and will be made available to the public. Please be
advised that the identity of the individuals or entities submitting the
comments will be made public on the internet at the address provided
above.
FOR FURTHER INFORMATION CONTACT: Jeremy Sasselli, Marketing Specialist,
or Barry Broadbent, Acting Chief, West Region Branch, Market
Development Division, Specialty Crops Program, AMS, USDA; Telephone:
(559) 487-5901, or Email: <a href="/cdn-cgi/l/email-protection#a0eac5d2c5cdd98ef3c1d3d3c5ccccc9e0d5d3c4c18ec7cfd6"><span class="__cf_email__" data-cfemail="09436c7b6c6470275a687a7a6c656560497c7a6d68276e667f">[email protected]</span></a> or
<a href="/cdn-cgi/l/email-protection#2f6d4e5d5d56016d5d404e4b4d4a415b6f5a5c4b4e01484059"><span class="__cf_email__" data-cfemail="4e0c2f3c3c37600c3c212f2a2c2b203a0e3b3d2a2f60292138">[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) 720-8085, or Email:
<a href="/cdn-cgi/l/email-protection#adffc4cec5ccdfc983e1c2dac8dfedd8dec9cc83cac2db"><span class="__cf_email__" data-cfemail="b3e1dad0dbd2c1d79dffdcc4d6c1f3c6c0d7d29dd4dcc5">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: This action, pursuant to 5 U.S.C. 553,
proposes to amend regulations issued to carry out a marketing order as
defined in 7 CFR 900.2(j). 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. 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 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 proposed
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 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 proposed 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 proposed 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 proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. This proposed 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 proposed
assessment rate would be applicable to all assessable olives beginning
on January 1, 2024, 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 U.S. 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 requesting 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.
Section 932.38 of the Order authorizes the Committee, with the
approval of USDA, 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 proposed rule would decrease the assessment rate from $35 per
ton of assessed olives, the rate that was
[[Page 21442]]
established for the 2023 fiscal year and subsequent fiscal years, to
$28 per ton of assessed olives for the 2024 fiscal year and subsequent
fiscal years. The proposed lower rate is the result of the
significantly higher crop size in 2023 (fruit that is marketed over the
course of the 2024 fiscal year), and the need to maintain the
Committee's financial reserve at a responsible level.
The Committee met on December 12, 2023, and unanimously recommended
2024 expenditures of $1,100,151 and an assessment rate of $28 per ton
of assessed olives. In comparison, last year's budgeted expenditures
were $1,154,412. The proposed assessment rate of $28 is $7 lower than
the rate currently in effect. Producer receipts show total production
of approximately 34,000 tons of olives from the 2023 crop year that
will be assessable during the 2024 fiscal year. This amount is
substantially higher than the quantity of olives that was harvested in
2022.
Olives harvested in 2023 will be marketed over the course of the
2024 fiscal year, which begins on January 1, 2024, as the harvested
olives are stored in brining tanks and processed over the subsequent
year. The 34,000 tons of assessable olives from the 2023 crop would
generate $952,000 in assessment revenue over the 2024 fiscal year at
the proposed assessment rate. The balance of funds needed to cover
budgeted expenditures would come from interest income and the
Committee's financial reserve. The 2024 fiscal year assessment rate
decrease is appropriate to ensure the Committee has sufficient revenue
to fund the recommended 2024 fiscal year budgeted expenditures while
also ensuring that funds in the reserve do not exceed approximately one
fiscal year's expenses, the maximum reserve amount 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
(2022) followed by a large crop (2023). For this assessment rate
proposed rule, the Committee utilized the estimated 2023 crop year
receipts to determine the recommended assessment rate for the 2024
fiscal year.
The major expenditures recommended by the Committee for the 2024
fiscal year include $350,250 for program administration, $164,650 for
export programs, $197,500 for marketing activities, $302,751 for
research, and $85,000 for inspection. Budgeted expenses for these items
during the 2023 fiscal year were $399,700, $148,000, $193,000,
$325,712, and $88,000, respectively.
The assessment rate recommended by the Committee resulted from
consideration of anticipated fiscal year expenses, estimated olive
tonnage received by handlers during the 2023 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 proposed in this rule
would continue in effect indefinitely unless modified, suspended, or
terminated by USDA upon recommendation and information submitted by the
Committee or other available information.
Although this assessment rate would be in effect for an indefinite
period, the Committee would 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 USDA.
Committee meetings are open to the public and interested persons may
express their views at these meetings. USDA would 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 would be reviewed and, as appropriate, approved by USDA.
Initial 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 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
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 are defined by the Small Business Administration
(SBA) as those having annual receipts equal to or 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 equal to or less than $34.0 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 a two-year average of the seasonal
average producer price when undertaking calculations relating to
average producer revenue. The National Agricultural Statistics Service
(NASS) reported season average producer prices of olives utilized for
canning for 2021 and 2022 of $851 and $913 per ton, respectively, with
a two-year average price of $882. NASS had not reported the 2023 season
average producer price at the time this proposed rule was published.
The appropriate quantities to consider are the annual assessable
olive quantities, which were 43,336 tons in 2021 and 19,912 tons in
2022, with the two-year average production being 31,624 tons.
Multiplying 31,624 tons by the two-year average producer price of $882
yields a two-year average crop value of $27,892,368. Dividing the crop
value by the number of olive producers (800) yields calculated annual
average producer revenue of $34,865, 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 $27,892,368 average crop value by 2 (the number of
handlers) equals $13,946,184, which is the annual average producer crop
value processed by each of the 2 handlers over the two-year period.
Dividing the $34.0 million annual sales SBA size threshold for a large
handler by the $13,946,184 crop value per handler yields an estimate of
a 125 percent manufacturing margin for the 2 handlers, on average, to
be considered large handlers. A key question is whether 125 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. Although the studies are not recent, canning
technology has not changed significantly since that time period.
Therefore, with the 125 percent margin estimate for the 2 olive
handlers, the data indicates that they could be on the threshold of
being large handlers
[[Page 21443]]
($34.0 million in annual 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 crop that each of the handlers
processed.
This proposal would decrease the assessment rate collected from
handlers for the 2024 fiscal year and subsequent fiscal years from $35
to $28 per ton of assessable olives. The Committee unanimously
recommended 2024 expenditures of $1,100,151 and an assessment rate of
$28 per ton. The recommended assessment rate of $28 is $7 lower than
the 2023 assessment rate. The quantity of assessable olives harvested
in the 2023 crop year is estimated to be 34,000 tons, compared to
19,912 tons in 2022. Olives are an alternate-bearing crop, with a small
crop (2022) followed by a large crop (2023). Income derived from the
$28 per ton assessment rate, along with interest income and funds from
the authorized reserve, would be adequate to meet this fiscal year's
budgeted expenditures.
The major expenditures recommended by the Committee for the 2024
fiscal year include $350,250 for program administration, $164,650 for
export programs, $197,500 for marketing activities, $302,751 for
research, and $85,000 for inspection. Budgeted expenses for these items
during the 2023 fiscal year were $399,700, $148,000, $193,000,
$325,712, and $88,000, respectively.
The Committee deliberated on many of the expenses, weighed the
relative value of various programs or projects, and decreased their
expenses for inspection and research activities while increasing
marketing activities. Overall, the 2024 budget of $1,100,151 is $54,261
less than the $1,154,412 budgeted for the 2023 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 $28 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 information from NASS indicates that the average
producer price for the 2022 crop year (the most recent year for which
information is available) was $913 per ton. Therefore, utilizing the
recommended assessment rate of $28 per ton, assessment revenue for the
2024 fiscal year as a percentage of total producer revenue would be
approximately 3.1 percent ($28 divided by $913 times 100).
This proposed action would decrease the assessment obligation
imposed on handlers. Assessments are applied uniformly on all handlers.
Some of the assessment costs to handlers may be passed on to producers.
Decreasing the assessment rate would reduce the burden on handlers and
may also, therefore, 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 December
12, 2023, meeting was a public meeting and all entities, both large and
small, were able to express views on this issue. In addition,
interested persons are invited to submit comments on this proposed
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 proposed rule would 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 action.
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, USDA has determined that this proposed
rule is consistent with, and would effectuate the purposes of, the Act.
A 30-day comment period is provided to allow interested persons to
respond to this proposed rule. All written comments timely received
will be considered before a final determination is made on this rule.
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 proposes to amend 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, 2024, an assessment rate of $28 per ton is
established for California olives.
Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2024-06482 Filed 3-27-24; 8:45 am]
BILLING CODE P
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