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###### Department of Agriculture

###### Agricultural Marketing Service

          - 7 CFR Part 932
          - [Docket No. FV04-932-2 PR]

# AGENCY:

Agricultural Marketing Service, USDA.

# ACTION:

Proposed rule.

# SUMMARY:

This rule invites comments on the redefinition of the producer districts and reapportionment of each district's membership on the California Olive Committee (committee). The Federal marketing order for California olives (order) regulates the handling of canned ripe olives grown in California and is administered locally by the committee. This rule would reduce the number of producer districts in the production area from four to two and would reapportion the committee representation from each district to reflect the consolidation. These changes would reflect recent shifts in olive acreage and producer numbers within the production area and would provide equitable committee representation from each district.

# DATES:

Comments must be received by December 27, 2004.

# ADDRESSES:

                        Interested persons are invited to submit written comments concerning this proposal. Comments must be sent to the Docket Clerk, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 20250-0237; Fax: (202) 720-8938, or E-mail:                         *moab.docketclerk@usda.gov;*                         or Internet:                         *http://www.regulations.gov.*                         All comments should reference the docket number and the date and page number of this issue of the                         **Federal Register**                         and will be made available for public inspection in the Office of the Docket Clerk during regular business hours, or can be viewed at:                         *http//www.ams.usda.gov/​fv/​moab.html.*

# FOR FURTHER INFORMATION CONTACT:

Laurel L. May, Marketing Specialist, California Marketing Field Office, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 2202 Monterey Street, Suite 102B, Fresno, California 93721; telephone: (559) 487-5901, Fax: (559) 487-5906; or George Kelhart, Technical Advisor, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 20250-0237; telephone: (202) 720-2491, Fax: (202) 720-8938.

                        Small businesses may request information on complying with this regulation by contacting Jay Guerber, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 20250-0237; telephone (202) 720-2491, Fax: (202) 720-8938, or E-mail:                         *Jay.Guerber@usda.gov.*

# 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 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 Department of Agriculture (USDA) is issuing this rule in conformance with Executive Order 12866.

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule is not intended to have retroactive effect. This proposal 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 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.

                    This rule would consolidate the four existing producer districts into two larger districts. Producer representation on the committee would be reapportioned accordingly. These changes would reflect recent shifts in olive acreage and producer numbers within the production area and would assure equitable committee                           ( print page 62830)                        representation from each district. This action was unanimously recommended by the committee at a meeting on July 8, 2004.                

Section 932.21 of the order defines the producer districts as geographical areas of the State of California. Section 932.25 establishes an administrative committee of olive handlers and producers and provides for the allocation of committee membership to assure equitable producer representation from the districts. Section 932.35(k) authorizes the redefinition of the producer districts and the reapportionment of committee membership as needed to reflect shifts in olive acreage within the districts and area, numbers of growers in the districts, and the tonnage produced to assure equitable producer representation on the committee.

Currently, § 932.121 of the order's administrative rules and regulations lists and defines four producer districts within the production area. District 1 includes Glenn, Tehama and Shasta Counties. District 2 includes the counties of Mono, Mariposa, Merced, San Benito, Monterey, and all counties south thereof excluding Tulare County. District 3 includes the counties of Alpine, Tuolumne, Stanislaus, Santa Clara, Santa Cruz, and all counties north thereof except those in District 1. District 4 includes Tulare County.

Section 932.125 specifies the producer representation on the committee. Currently, District 1 is represented by two producer members on the committee. District 2 is represented by one producer member. District 3 is represented by one producer member. District 4 is represented by four producer members.

At its meeting on July 8, 2004, the committee recommended redefining the producer districts to consolidate the four existing districts into two. The committee also recommended reapportionment of the producer membership on the committee to reflect the consolidation of the districts. The committee believes that redistricting and reapportioning the eight producer member positions and alternates would provide equitable representation throughout the production area. The committee based this recommendation on the current olive acreage and number of producers as required under the marketing order.

Total canned ripe olive acreage in the production area has declined by approximately four percent since 1994. Although production acreage in District 1 has increased by approximately 21 percent, shifts in varietal preference and challenging production conditions have led to declining acreages in the other districts. Production acreages in Districts 2, 3, and 4 have declined by approximately 34 percent, 99 percent, and 1 percent, respectively.

The number of producers in the entire production area has declined by approximately 23 percent since 1994. Some of the decline has been caused by changes in ownership of productive acreage, and some producers have stopped growing olives for cannery use. While District 1 has lost only two percent of its producers since 1994, Districts 2, 3, and 4 have lost 49 percent, 89 percent, and 29 percent, respectively. Some districts no longer have enough available or eligible producers to fill all the member seats currently allocated them on the committee.

Revisions to both the district definitions and committee membership apportionment were last made in 1987. At that time District 4 was created because Tulare County represented more than 45 percent of the average production, number of producers, and acreage of the entire production area. District 4 now represents approximately 56 percent of the canned ripe olive acreage as well as approximately 51 percent of the producers in the production area. District 4 is represented by 50 percent of the producer members and alternates on the committee.

Other districts are less equitably represented. District 1 currently has 36 percent of the total acreage in the production area and 46 percent of the producers, but is represented by only 25 percent of the committee's producer members and alternates. District 2, with nine percent of the acreage and two percent of the producers is represented by 12.5 percent of the committee members. District 3, with less than 1 percent of both the total acreage and number of producers is likewise represented by 12.5 percent of the committee's producer members and alternates.

Recent shifts in production acreage as well as the decline in producer numbers in the districts prompted the committee to recommend the consolidation of the two northern districts into one producer district, and the two southern districts into one producer district. The shifts in production acreage and the declines in producer numbers reflect similar changes in the tonnage produced.

The committee believes that it would be easier for each district to provide equitable representation on the committee if the districts with declining acreages and producer numbers were combined with districts having higher acreages and producer numbers. The pool of available producers from which to select committee members would then be increased for each producer district.

Accordingly, it was proposed that Districts 1 and 3 be combined to form a new District 1. District 1 would then include the counties of Alpine, Tuolumne, Stanislaus, Santa Clara, Santa Cruz and all other counties north thereof. Districts 2 and 4 would be combined to form a new District 2, which would include the counties of Mono, Mariposa, Merced, San Benito, Monterey and all other counties south thereof. Producer representation on the committee would then be reapportioned to provide three members (and alternates) from District 1 and five members (and alternates) from District 2.

These changes would benefit producers by maintaining an equitable representation on the committee as to production acreage and number of producers in each district. Under this proposal, District 1, with 36 percent of the total production acreage and 47 percent of the total number of producers would be represented by 38 percent of the producer members and alternates on the committee. District 2, with 64 percent of the total acreage and 53 percent of the total number of producers would be represented by 62 percent of the committee's producer members and alternates.

## Initial Regulatory Flexibility Analysis

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA), the Agricultural Marketing Service (AMS) has considered the economic impact of this rule on small entities. Accordingly, AMS has prepared this initial regulatory flexibility analysis.

The purpose of the RFA is to fit regulatory actions to the scale of business subject to such actions to ensure 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. Thus, both statutes have small entity orientation and compatibility.

                    There are approximately 850 producers of olives in the production area and 3 handlers subject to regulation under the marketing order. The Small Business Administration (13 CFR 121.601) defines small agricultural producers as those with annual receipts less than $750,000, and small agricultural service firms as those with annual receipts less than $5,000,000.                          ( print page 62831)    

Based upon information from the committee, the majority of olive producers may be classified as small entities, but only one of the three handlers may be classified as a small entity.

This rule would revise § 932.121 of the order's administrative rules and regulations pertaining to producer districts, and § 932.125 pertaining to producer representation on the committee. The changes would decrease the number of producer districts from four to two and would reapportion producer membership on the committee to reflect the consolidation. District 1, comprising the northern part of the production area, would be apportioned three producer members (and alternates) on the committee. District 2, comprising the southern part of the production area, would be apportioned five producer members (and alternates) on the committee. These changes would reflect recent shifts in olive acreage and producer numbers within the production area and would provide equitable committee representation from each district. The committee unanimously recommended these changes.

This rule would consolidate producer districts and reallocate producer membership on the committee; thus, there would be no additional anticipated costs to handlers or producers.

The only alternative to these changes discussed by the committee was to leave the districts and producer membership allocation as they currently exist. However, the committee believes that the recent shifts in acreage and producer numbers within the districts and production area have made these changes necessary to assure equitable producer representation from the districts.

This proposed rule would impose no additional reporting or recordkeeping requirements on 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.

USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule.

In addition, the committee's meeting was widely publicized throughout the California 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 July 8, 2004, meeting was a public meeting and all entities, both large and small, were able to express views on this issue. Finally, interested persons are invited to submit information on the regulatory and informational impacts of this action on small businesses.

                    A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at:                     *http://www.ams.usda.gov/​fv/​moab.html*. Any questions about the compliance guide should be sent to Jay Guerber at the previously mentioned address in the                     **FOR FURTHER INFORMATION CONTACT**                     section.                

A 60-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 matter. The proposed redistricting and reapportionment would coincide with the 2005 committee selection, which is scheduled to take place in the spring of 2005 for the new term to begin June 1, 2005.

# List of Subjects in 7 CFR Part 932

      - Marketing agreements
      - Olives
      - Reporting and recordkeeping requirements

For the reasons set forth in the preamble, 7 CFR part 932 is proposed to be amended as follows:

# PART 932—OLIVES GROWN IN CALIFORNIA

1. The authority citation for 7 CFR part 932 continues to read as follows:

Authority:7 U.S.C. 601-674.

2. Section 932.121 is revised to read as follows:

§ 932.121

Pursuant to the authority in § 932.35(k), commencing with the term of office beginning June 1, 2005, district means any of the following geographical areas of the State of California:

(a) District 1 shall include the counties of Alpine, Tuolumne, Stanislaus, Santa Clara, Santa Cruz, and all counties north thereof.

(b) District 2 shall include the counties of Mono, Mariposa, Merced, San Benito, Monterey and all counties south thereof.

3. Section 932.125 is revised to read as follows:

§ 932.125

Pursuant to the authority in §§ 932.25 and 932.35(k), commencing with the term of office beginning June 1, 2005, representation shall be apportioned as follows:

(a) District 1 shall be represented by three producer members and alternates.

(b) District 2 shall be represented by five producer members and alternates.

Dated: October 22, 2004.

A.J. Yates,

Administrator, Agricultural Marketing Service.

[FR Doc. 04-24089 Filed 10-27-04; 8:45 am]

BILLING CODE 3410-02-P