Y4

, A3sif

foti_AMEND TITLE I OF PUBLIC LAW

GOVERNMEN*1

Storage

HEARING

BEFORE THE

COMMITTEE ON AGRICUL

HOUSE OF REPRESENT I. TINTS .; ...,

-. , .

EIGHTY-SEVENTH CONGR , SS

FIRST SESSION *4 IT •

k

i

KSU LIBRARIES 

ON

H.R. 4728

rq

0- MARCH 15, 1961

rrl

Printed for the use of the Committee on Agriculture

0-

1-1

r-1 Serial C

U.S. GOVERNMENT PRINTING OFFICE

67894 WASHINGTON : 1961

arromim Newooli
COMMITTEE ON AGRICULTURE

HAROLD D. COOLEY, North Carolina, Chairman

W. R. POAGE, Texas, Vice Chairman

GEORGE GRANT, Alabama

E. C. GATHINGS, Arkansas

JOHN L. McMILLAN, South Carolina

THOMAS G. ABERNETHY, Mississippi

CARL ALBERT, Oklahoma

WATKINS M. A BBITT, Virginia

CLARK W. THOMPSON, Texas

PAUL C. JONES, Missouri

HARLAN HAGEN, California

LESTER R. JOHNSON, Wisconsin

ROSS BASS, Tennessee

W. PAT JENNINGS, Virginia

D. R. (BILLY) MATTHEWS, Florida

MERWIN COAD, Iowa

J. FLOYD BREEDING, Kansas

FRANK A. STUBBLEFIELD, Kentucky

HAROLD B. McSWEEN, Louisiana

DANIEL K. INOUYE, Hawaii

_RALPH R. HARDING, Idaho

MTS. CHRISTINE S. GALLAGHER, Clerk

HYDE H. MURRAY, Assistant Clerk

JOHN I. HEIMBURGER, COWILSe/

FRANCIS M. LEMAY, Staff Consultant

CHARLES B. HOEVEN, Iowa

PAUL B. DAGUE, Pennsylvania

PAGE BELCHER, Oklahoma

CLIFFORD G. McINTIRE, Maine

CHARLES M. TEAGUE, California

ALBERT H. QUIE, Minnesota

DON L. SHORT, North Dakota

CATHERINE MAY, Washington

DELBERT L. LATTA, Ohio

RALPH HARVEY, Indiana

PAUL FINDLEY, Illinois

ROBERT DOLE, Kansas

RALPH F. BEERMANN, Nebraska

BEN REIFEL, South Dakota

RESIDENT COMMISSIONER

A. FERN6S-ISERN, Puerto Rico
CONTENTS

H.R. 4728. A bill to amend title I of the Agricultural Trade Development and Assistance Act of 1954 -

Statement of—

Hon. John P. Duncan, Jr., Assistant Secretary of Agriculture; accom- panied by Robert C. Tetro, Administrator, R. A. Ioanes, Deputy Administrator, and Patrick M. O'Leary, Assistant Administrator, Foreign Agricultural Service, U.S. Department of Agriculture Communication submitted to the committee: National Milk Producers Federation, Washington, D.C., letter of March 28, 1961 

In

Pus

2

36

AMEND TITLE I OF PUBLIC LAW 480

WEDNESDAY, MARCH 15, 1961

HOUSE OF REPRESENTATIVES,

COMMITTEE ON AGRICULTURE,

Washington, D.C.

The committee met, pursuant to 

notice, 

at 10 a.m., in room 1310,

New House Office Building, Hon. Harold D. Cooley (chairman) presiding.

Present: Representatives Cooley, Poage Grant, Gathings, Abernethy, Albert, Abbitt, Thompson, Jones, Hagen, Johnson, Jennings,

Matthews, Coad, Breeding, Stubblefield, McSween, Inouye, Hoeven,

Dague, Belcher, McIntire, Teague, Short, May, Harvey, Findley,

Dolele, Beermann, and Reifel.

S. Gallagher, clerk; Hyde H. Murray, assistant clerk; and

John Heimburger, counsel.

The CHAIRMAN. The committee will be in order.

I call up H.R. 4728, a bill to amend title I of the Agricultural Trade

Development and Assistance Act of 1954.

We have with us this morning Mr. John Duncan, Assistant Secretary of Agriculture, and some of his associates from the Department

of Agriculture.

Mr. Secretary, we are very glad to have you with us this morning,

and we are very glad to have the administration's views on H.R. 4728.

(H.R. 4728 follows:)

[H.R. 4728, 87th Cong., 1st sess.]

A BILL To amend title I of the Agricultural Trade Development and Assistance Act of 1954

Be it enacted by the Senate and House of Representatives of the United States of

America in Congress assembled, That section 103(b) of the Agricultural Trade Development and Assistance Act of 1954, as amended, is amended by deleting "any

calendar year during the period beginning January 1, 1960, and ending December 31, 1961," and substituting "the calendar year 1960," and by adding at the

end thereof the following: "Agreements shall not be entered into under this title

in the calendar year 1961 which will call for appropriations to reimburse the

Commodity Credit Corporation, pursuant to subsection (a) of this section, in

amounts in excess of $3,500,000,000, plus any amount by which agreements

entered into in the preceding calendar year have called or will call for appropriations to reimburse the Commodity Credit Corporation in amounts less than

authorized for such preceding year by this Act as in effect during such preceding

year."

1
2 AMEND TITLE I OF PUBLIC LAW 480

STATEMENT OF HON. JOHN P. DUNCAN, JR., ASSISTANT SECRETARY OF AGRICULTURE; ACCOMPANIED BY ROBERT C. TETRO,

ADMINISTRATOR; R. A. IOANES, DEPUTY ADMINISTRATOR;

AND PATRICK M. O'LEARY, ASSISTANT ADMINISTRATOR, FOREIGN AGRICULTURAL SERVICE, DEPARTMENT OF AGRICULTURE

Mr. DUNCAN. Mr. Chairman, I would like to introduce my colleagues with me here this morning.

On my left is Mr. Bob Tetro, who is the Administrator of FAS. On

my right is Mr. R. A. Ioanes, who is the Deputy Administrator of

FAS. And to Mr. Tetro's left is Mr. Pat O'Leary, who is the Assistant

Administrator of FAS.

Mr. Chairman and members of the committee, I appreciate the

opportunity to discuss with you the Department's request for an increase of $2 billion in the title I, Public Law 480, authority.

We are literally out of title I funds today. Programs in negotiation

and in process of development will exhaust our current balances. We

are being forced to defer action on several new requests because of the

lack of funds.

Therefore, we urge that the $2 billion increase be considered and

enacted promptly to permit commodity programing for the balance of

this calendar year.

Need for additional authorization of $2 billion: For calendar years

1960 and 1961, the amount of title I funds available totaled about

$3.5 billion. This amount included the $1.5 billion furnished for

each of these 2 years plus about $500 million in unused funds carried

over from previous authorizations.

The additional $2 billion we are requesting means that we expect

to program a total of $5.5 billion during calendar years 1960 and 1961.

This is virtually the same amount programed during the first five

and a half years of Public Law 480.

Our present fund situation is this: Of the approximately $3.5

billion available for programing in calendar years 1960 and 1961, all

but about $150 million has been committed under signed agreements.

Requests for programs on hand far exceed this $150 million balance.

Therefore, action on several requests, including one that runs into

hundreds of millions of dollars, is being deferred because of the lack

of funds.

You are all familiar with the Pakistan agreement we are discussing

with that country, which will be a 4-year deal.

To proceed: Authority to negotiate title I foreign currency sale

agreements must continue without interruption so that we can keep

commodities moving abroad in an orderly manner and in large

volume. We must be in a position to meet commodity requirements

of participating countries so they will not reduce consumption levels

or fail to meet goals of consumption increases they urgently need to

attain. Only by maintaining a steady flow of commodities under

this program can we carry out the objectives of food for peace.

There are a number of reasons for the increased interest in the

program. More and more, foreign countries now understand that

"food for peace" is not a slogan, not an effort to dump our commodities

on the world market, but is a positive program backed wholeheartedly

by the American people. The program uses our abundance to improve
AMEND TITLE I OF PUBLIC LAW 480 3

nutrition and economic development throughout the world on a

continuing basis.

The President has taken the leadership in making the program a

vital force for peaceful purposes.

Because of lower yields abroad for wheat and other commodities,

countries are making larger requests for title I programs. Brazil is

an example of a country where increased demand for U.S. wheat has

resulted from poor crop conditions abroad.

Also, participating governments have indicated widespread interest

in multiyear supply programs now that they clearly understand that

such programs are welcomed by the U.S. Government.

We believe it makes sense to negotiate multiyear title .T agreements

similar to the 4-year agreement concluded last year with the Government of India. These arrangements assure the availability of adequate supplies of commodities to food-deficit countries; it lets them

plan commodity procurement and shipment over longer periods and

conduct such operations more effectively; it permits maximum use of

facilities to receive, store, and distribute commodities; it allows

coordination of import programs with local production; and it supports

long range plans for total economic development.

The greater use of longer term supply commitments means that we

should take a more careful look ahead at the continuing needs of

underdeveloped countries and our own ability to supply these needs.

In short, we must develop a world food budget and a national food

policy geared more effectively to meet food requirements.

Our request for an additional $2 billion authorization for the balance

of this year indicates our strong desire to make greater use of this

valuable program.

Farm productivity is national blessing: At this point, I want to

make clear the administration's position on farm abundance. We do

not view it as a problem which forces us into a surplus disposal operation. We do not view it as a national catastrophe.

Rather, we believe U.S. farm productivity is a national blessing.

The American farmer is efficient and productive. And this capacity

offers great opportunities to feed needy people in this 'country, particularly in depressed areas. There is also great opportunity to

attack hunger and malnutrition overseas.

We are using U.S. farm products to help shape national and international policy. This is a positive policy. We have buried the

dilemma of surpluses; we recognize our agricultural abundance as a

national asset and seek its maximum use.

I might say that the difficulty Russia and Red China are having

with food production further emphasizes the favorable position that

we are in, with the abundance of food that we have in this country.

Title I program operations: Our efforts to make greater use of U.S.

agricultural commodities are reflected in title I, Public Law 480,

program operations. Commodities are now moving abroad in record

volume and we believe that title I exports for the current fiscal year

will be the largest on record.

Next year we expect shipments to be even larger. Increased movements, of course, are dependent upon enactment of the additional

authority we are requesting today.

A brief reference to the volume of exports best illustrates the commodity impact of title I. Total U.S. exports of wheat for the year
4 AMEND TITLE I OF PUBLIC LAW 480

ending June 30 should reach about 600 million bushels, more than half

of which will move under title I. Rice exports should reach 20 million

bags, and vegetable oil exports should total 1.6 billion pounds; again

more than half of these quantities will move under title I.

Title I feed grain and cotton exports, although not as significant in

total U.S. agricultural exports, continue in important volume. Title

I feed grain exports this year should run about 70 million bushels and

cotton exports should total about 1.2 million bales.

We are also developing programs to make available a wider variety

of commodities, for example, poultry, to upgrade the diets of needy

people abroad.

Total U.S. agricultural exports: I want to emphasize that our primary interest in agricultural exports is commercial sales for dollars.

Seventy percent of our total exports are commercial sales for dollars.

Public Law 480 serves as a large and supplementary means for the

Department to expand foreign markets for U.S. agricultural commodities. Here the outlook is bright. For the year ending June 30

we expect to exceed the record of $4.7 billion established in fiscal year

1957. The 1957 record was stimulated by the Suez crisis.

The volume of exports will also establish a new record—a high level

of shipments is expected for wheat, cotton, rice, vegetable oils, tobacco, soybeans, and poultry. Our promotion of commercial sales

for dollars, alone with greater emphasis on feeding needy people

through special export programs such as Public Law 480, gives promise

for continuing high agricultural export totals.

We will be glad to furnish more information on some of the operations and policies we have discussed only briefly in this statement.

We feel there is great hope that the production of U.S. farmers can

be put to greater use in the United States and in many parts of the

world.

In our testimony today, we are requesting an additional $2 billion

for title I programing. We appreciate that there are other changes

in the law which should be considered. However, the need for additional funds is so urgent that we recommend you defer action on such

• other amendments.

We assure you that the administration will have proposals for

changes in the law. These will be presented along with our recommendations for continuation of Public Law 480 beyond December 31,

1961.

I urge that this committee give prompt consideration to H.R. 4728

to provide additional funds to continue title I of Public Law 480

operations. We strongly support this bill.

The CHAIRMAN. Thank you, Mr. Secretary for your presentation.

I would like to ask you a few questions.

First I would like you to tell the committee, if you can, why it is

that no title IV program has been consummated.

Mr. DUNCAN. Mr. Chairman, we are certainly friendly toward title

IV. We are pushing title IV. And we expect to make an announcement within the very near future of our first transaction under the

program.

The CHAIRMAN. IS it not a fact that the Congress authorized programs under title IV as a loan program?

Mr. DUNCAN. That is true.
AMEND TITLE I OF PUBLIC LAW 480 5

The CHAIRMAN. That is the program that contemplates sales for

dollars

'

at low-interest rates?

Mr. DUNCAN. Correct.

The CHAIRMAN. Do you not think that program should be used

more in fact as a program?

Mr. DUNCAN. Mr. Chairman, we certainly are friendly, as I said,

toward the title IV authority. We have already begun moving in

that direction. We are pushing title IV. And we are right now on

the verge of signing an agreement with a foreign country for our first

sales under the program.

The CHAIRMAN. I think I am correct in saying that I received a

communication some time ago—a few weeks ago—which indicated

that the Department was concerned over the fact that we had accumulated large sums of foreign currency from foreign countries. Will

you provide for the record information as to where the foreign currencies are and the volume, that have accumulated in different countries of the world.

Mr. DUNCAN. Mr. Tetro is familiar with it.

The CHAIRMAN. Yes.

Mr. TETRO. We will be glad to furnish that for the record. We

have this information available.

(The information follows:)

The following three tables furnish information on the use of foreign currencies

received in payment for commodities shipped under the title I, Public Law 480,

program.

Table I shows the use to be made of foreign currencies under agreements signed

from the beginning of the program through December 31, 1960. It shows the total

amount by country to be received by the United States when the agreements are

fully implemented; the amounts specified in agreements to be used by foreign

countries under 104(c) common defense grants, 104(e) economic development

grants, and 104(g) economic development loans; the amounts set aside for Cooley

amendment loans to private business firms under 104(e) ; and finally the amounts of

currencies set aside for U.S. agency uses.

Table II shows the status of the use of foreign currencies by country; the

amounts in agreements through December 31, 1960; and allocations, collections,

and disbursements through September 30, 1960, as obtained from the latest foreign

currency report prepared by the Treasury Department. As of September 30,

1960, foreign currencies deposited to the account of the United States totaled

about the equivalent of $4 billion and disbursements made through that date

total about $1.7 billion. The difference of about $2.3 billion was on hand and not

yet disbursed.

Table III shows the status of foreign currencies by the specific uses authorized

in section 104 of Public Law 480. It shows as of September 30, 1960, allocations

made by the Bureau of the Budget, amounts transferred to U.S. agency accounts,

and disbursements made by U.S. agencies.

6'S94-61 2
6 AMEND TITLE I OF PUBLIC LAW 480

TABLE 1.-Uses of foreign currency as provided in title I, Public Law 480 agreements signed July 1, 1954, through Dec. 31, 1960 1

[Amounts are in dollar equivalents at the deposit rate of exchange]

Total

amount

in agree- 104(e) 104(g)

ments 104(c) grants for 104(e) loans to

Country (market common economic loans to pri- foreign For U.S.

value in- defense develop- vate enter- govern- uses 2

eluding

oversea

transportation)

ment prise ments

Thousand Thousand Thousand Thousand Thousand Thousand

dollar equiv- dollar equiv- dollar equiv- dollar equiv- dollar equiv- dollar equivalent alent alent alent alent alent

Argentina 64, 100 8,250 36,500 19,350

Austria 42, 940 26, 328 16, 612

Brazil 214,420 2,000 178, 547 33, 873

Burma 40, 700 6,000 26,550 8, 150

Ceylon 26, 100 4, 340 6, 540 9, 580 5, 640

Chile 71, 900 100 850 56,330 14, 620

China (Taiwan) _ 55, 500 30, 550 8, 600 2, 300 14,050

Colombia_ 70,890 80 11,270 41, 180 18,360

Ecuador 10,940 710 7,660 2,570

Finland 44,735 3,165 25,454 16,116

France 60, 440 13, 989 46, 451

Germany 1,200 1,200

Greece 86, 000 7, 470 5, 945 47,350 25,235

Iceland 10,270 765 7,374 2, 131

India 3 1, 345, 203 369, 875 112, 634 667, 708 194, 986

Indonesia 164,300 21,900 13,600 91,895 36.905

Iran 32,446 5, 763 1, 557 15,605 9,521

Israel 168, 554 4,200 25, 827 111, 537 26, 990

Italy 152,900 6,250 100,500 46,150

Japan 150,800 700 600 108, 850 40, 650

Korea 201,000 162,910 3,500 34,590

Mexico 28,200 7,100 13,600 7, 500

Netherlands 275 275

Pakistan 396,870 79,366 57, 592 41,712 135,392 82,808

Paraguay 3,000 2, 250 750

Peru 37,280 100 4, 962 21, 523 10, 695

Philippines 14,400 3, 100 1,000 5,200 5. 100

Poland 365,300 365.300

Portugal 7, 100 3,400 3,700

Spain 456, 130 9,910 228, 730 217,490

Thailand 4, 600 2, 050 2, 550

Turkey 232,265 67, 739 18,230 48,092 98,204

PAR (Egypt) 198,800 37,450 113,400 47,950

UAR (Syria) 28,200 5,200 16,900 6, 100

United Kingdom 48, 150 48, 150

Uruguay 46,400 11,550 23,300 11,550

Vietnam 20,500 10,228 5, 100 5, 172

Yugoslavia 408, 530 114, 290 213,091 81, 149

Total 4 5,311, 338 372, 546 586, 267 355, 756 2,388, 176 1, 608, 593

Uses as percent of total 100.0 7.0 11.0 6.7 45.0 30.3

I Amounts shown are subject to adjustment when actual commodity purchases and currency allocations

have been made.

2 Agreements provide that a specific amount of foreign currency proceeds may be used under various U.S.

use categories, including currency uses which are limited to amounts as may be specified in appropriation

acts. Included are uses specified under subsecs. 104 (a), (b), (f)), (h), (i), (j), (k), (1), (m), (n), (o), (p),

(q), (r), and sometimes (d) insofar as specified in agreements.

3 Includes only the amounts to be financed during the 1st year of the 4-year agreement signed May 4, 1960.

4 Amounts shown in this column may differ from amounts on table I, which reflects purchase authorization transactions.
AMEND TITLE I OF PUBLIC LAW 480 7

TABLE 2.-Status of foreign currencies under title I, Public Law 480

[Amounts are in million dollar equivalents]

Argentina

Austria

Brazil 

Burma_

Ceylon

Chile. 

China (Tai

Colombia_

Ecuador

Finland_

France 

Germany

Greece

Iceland 

India 

Indonesia

Iran

Israel_ 

Italy 

Japan 

Korea 

Mexico 

Netherland

Pakistan_

Paraguay

Peru 

Philippine

Poland_

Portugal

Spain 

Thailand

Turkey_

UAR (Egy

UAR (Syri

United Ki

Uruguay

Vietnam

Yugoslavia

Total

Country I

Agreement

amounts

through

Dec. 31,

1960

Allocations

by Budget

Bureau

through

Sept. 30,

1960

Collections

through

Sept. 30,

1960

Disbursements by

agencies

through

Sept. 30,

1960

64.1 33.4 30.6 11.1

• 42. 9 40. 1 40. 1 30. 1

214.4• 155.2 157.0 68.6

• 40. 7 36. 8 36. 7 6. 1

26.1 16.4 17.1 6.5

71.9• 38.8 38.9 32. 6

wan) 55. 5 35. 1 39. 5 23. 2

70. 9 46.0 43. 2 23. 8

10.9 8.4 8.4 6.8

• 44. 7 48. 7 38. 4 24 8

60.4• 33.4 31.9 17.7

1.2 1.2 1.2 1.1

86. 0 69. 5 69. 9 57. 4

10.3 7.7 8.3 6.0

1,345. 2

164.3• 

821.5

121.2

877.6

132.7

143.5

15.8

32. 4 12. 5 12.4 10.9

168.6 144.7 151.7 95.S

152.9 143.3 144.2 109.8

• 150.8 141.4 146.4 133.0

201.0• 160.9 154.3 144.1

28.2 25. 2 25.2 17. 1

S .3 .3 .3 1 . 5

396.9 246.1 300.9 154.6

3.0 2.9 2.9 2.4

37. 3 25. 1 25. 2 19. 1

14.4 13.0 13.8 10.4

365. 3 38. 9 236.0 1.0

7.1 7.1 7.1 5.2

456. 1 363. 6 395. 6 188. 1

4.6 4.3 4.3 3.2

232.3 198.5 206.0 110.3

pt) 198.8 112.4 126.5 22.9

a) 28.2 7.7 9.2 .2

tgdom 48.2 43. 8 48.5 21. 7

46. 4 33.9 34. 7 6. 4

20.5 10.4 8.2 3.6

408. 5 358. 9 388. 6 179. 9

5,311. 3 3,608. 3 4,013. 4 2 1,715. 3

Disbursements exceed collections because of conversion from other currencies.

2 Excludes about $720,000 equivalent disburses In nontitle I countries through convertibility.
8 AMEND TITLE I OF PUBLIC LAW 480

TABLE 3.-Status of foreign currencies under Public Law 480 as of Sept. 30, 1960

[Amounts are in million dollar equivalent]

Uses as specified in sec. 104, Public Law 480

Allocation

by Bureau

of Budget

Transfers

to agency

accounts

Disbursements by

agency

104(c) common defense 317.8 299.0 268.2

104(e) grants for economic development 349. 6 219. 3 79.0

104(e) loans to private enterprise 255.0 206. 9 35. 4

104(g) loans to foreign governments 1,739. 7 1, 566. 7 885.1

U.S. uses:

Treasury: 104(f) payment of U.S. obligations 584.2 550.5 313. 7

Agriculture: 104(a) agricultural market development,

104(k) scientific activities, 104(m) agricultural fairs 

International Cooperation Administration: 104(d) pur105. 7 67. 8

•

20. 5

chase of goods for other countries 63.9 51.3 30.8

Defense: Military family housing 1 101. 5 105. 6 65.0

State:

104 (h) and (j) international educational exchange and

American-sponsored schools and centers 63.8 53.3 14. 5

104(1) buildings for U.S. Government use 5. 2 .5 

U.S. Information Agency: 104 (i) and (j) translation of

books and periodicals and American-sponsored centers__ 15.1 12.1 3.1

Health, Education, and Welfare: 104(k) scientific activities 5.2 .3 

National Science Foundation: 104(k) scientific activities__ 1.6 1.1 .6

Total 3,608. 3 3,134.4 21,715. 9

1 Includes small amount for other 104(f) uses. Defense also uses currencies for 104(k) scientific activities,

totaling less than $50,000 through Sept. 30, 1960.

2 Includes $720,000 disbursed in nontitle I countries.

The CHAIRMAN. There is one other thing that also disturbs me.

I know in some countries we have run out of foreign currency. And

I am told that you cannot take foreign currency in one country and

convert it over into that of another country. Why can that not be

done; and if necessary, why do we not amend the law so as to permit

that to be done, to be used in that fashion?

Mr. TETRO. Mr. Chairman, under title I agreements we do try to

get 2 percent as convertible foreign currency. We have had, I think,

some success in doing this. And you are right in saying that in a

number of countries today we are getting greatly reduced amounts

of local currencies compared with earlier years of this program.

The one difficulty that other countries have seen in the local currency program for permitting a larger part of the agreement to be

used on a convertible basis is that it then.proves to be a straight cash

sale to a larger extent.

We have so far had, I think, reasonably good success with most

countries in getting agreement to convert in recent programs. And

I believe that our proposals for this year for agricultural market

development purposes where we have to have hard currencies is in

the order of $4.5 million, of which we have already been able to convert well over $3 million.

In other words, in this year's trade promotion work, the target

figure is about $4.5 million, which I think will be converted.

I do not know that we need a specific amendment to support us

further in this, but I can assure you that this is the desire of the

administration to get as many of these currencies converted as are

needed for the trade promotion program.

The CHAIRMAN. It is your understanding, then, that under existing

law you can provide in the basic agreement for the convertibility of

currency?

Mr. TETRO. Yes, sir.
AMEND TITLE I OF PUBLIC LAW 480 9

The CHAIRMAN. I thought it could be done, but my recollection is

that I was told by our attaché in Rome that all of the counterpart

funds had been used and some part of it had been converted into funds

used in connection with some program for some Scandinavian country.

Mr. TETRO. Yes, sir.

The CHAIRMAN. What about the necessity for this legislation?

Do you regard it urgent that we pass this law?

Mr. DUNCAN. We do, Mr. Chairman.

The CHAIRMAN. How much money do you have now uncommitted?

Mr. DUNCAN. Uncommitted?

The CHAIRMAN. Yes.

Mr. DUNCAN. Approximately $150 million. We have requests on hand, Mr. Chairman, that are imminent, of more than $1 billion,

We are having preliminary discussions on an additional few hundred million dollars of programs. The small balance of the $2 billion will be used for programs we believe will come up soon for final signature

between the United States and importing country.

The CHAIRMAN. Enough requests on file for that?

Mr. DUNCAN. Yes.

The CHAIRMAN. To commit the funds?

Mr. DUNCAN. Yes, sir.

Tne CHAIRMAN. Is there any reason why we should not insist upon convertibility in all contracts?

Mr. TETRO. Mr. Chairman, we are trying to get 2 percent in all

programs at the present time for agricultural market development.

The CHAIRMAN. What is that?

Mr. TETRO. We are trying to get 2 percent of convertibility into all programs at the present time for agricultural market development.

The CHAIRMAN. Just 2 percent?

Mr. TETRO. Yes, sir.

The CHAIRMAN. Why do you not make it all 100 percent or 50

percent? Two percent is no amount. I think it is important for this committee to have for these bills before the House a statement indicating where the currency is, how it is being used, how much has been converted, and how much is not converted, so we can intelli- gently understand the question.

Mr. TETRO. We will supply this information.

(The information follows:)

In developing title I programs the Department seeks to obtain agreement of participating countries to permit convertibility of 2 percent of the sales proceeds.

In most cases this is being obtained. During the first 6 months of fiscal year 1961 the market value of agreements, or the.potential amount of currencies to be received, totaled the equivalent of $477.3 million of which agreement was obtained to convert the equivalent of $5.8 million.

The amounts of foreign currencies that can be converted under the program

are extremely limited because countries eligible for title I programs are those whose financial condition precludes the purchase of commodities on a normal cash basis.

The CHAIRMAN. Mr. Short.

Mr. SHORT. Mr. Chairman, the question that I wanted to ask

Mr. Duncan and Mr. Tetro covers the same field. And that is, if

they would provide us with a brief explanation of what the reason

is for this rather considerable increase in the potential for these foreign sales to foreign countries. •And what countries, if they want

to delineate it that much.
10 AMEND TITLE I OF PUBLIC LAW 480

Mr. DUNCAN. The Pakistan 4-year agreement we are discussing

with them totals right out at $1 billion.

Mr. SHORT. That is in addition to what was anticipated under

the availability of funds that are included in the last session?

Mr. DUNCAN. That is correct.

Mr. TETRO. Mr. Chairman, we had in our testimony the two

basic reasons for these increased obligations under this authority. ,

The first is that a number of countries, owing to their long-term

development programs, are anxious to take advantage of the multiyear agreement. When we sign them, we obligate for the entire

amount.

For example, the Indian agreement of last year, which i a 4-year

agreement, is over $2 billion itself.

In addition to this instance there is very much increased interest

among other countries in multiyear agreements.

As most of you know, sir, there have been some difficult weather

situations around the world, and this is one of the reasons for the

increase for wheat. The world, as a whole, has had some difficulties

with crops.

While we have not participated in the shortages in the Balkans,

east Balkans, and in mainland China, some of our competitors have,

and, as a result, we have been filling in, in back of them. This is a

definite factor in the wheat increase.

There also has been bad weather in some other important wheat

areas.

I believe, Mr. Short, these are the two big reasons: difficult weather

in other parts of the world, and the very much increased interest in

multiyear agreements.

Mr. SHORT. Thank you.

The CHAIRMAN. I will yield to Mr. Poage.

Mr. POAGE. I wanted to find out, do we now have a pattern for

all of these agreements—are we including that clause in all of these

agreements?

Mr. TETRO. Mr. Chairman, I think the answer to that is that it

is not a pattern. The fact that it is a multiyear agreement of a

substantial kind having some relationship to a national economic

development program has increased the interest of other countries

in doing the same thing.

But as the committee has suggested before, we feel that every

request is a separate case.

Mr. POAGE. I am not bothered about the 4-year feature of it. I

think that is essential. I have already expressed my views that we

must give these people that for a substantial period of time if we are

going to have this program. They cannot do it on a year-to-year

basis. And we have to have a program, and you have got to have the

authority, to make the payment over a period of years, in order to

make the program satisfactory.

What I am talking about, what I am not satisfied with, and what I

do not personally' approve of—and I do not speak for anybody but

myself—is this matter of a gift of 42.5 percent. Are we using this

policy of making or of letting 480 be used as a means of covering up

direct grants to countries?

Mr. TETRO. -Mr. Chairman, 'I think the answer to that is a part of

what we hope to present to the committee when we come up for the

extension of titles I and II of Public Law 480.
AMEND TITLE I OF PUBLIC LAW 480 11

Mr. POAGE. Have you since we entered into these agreements—has

every other agreement that you have in this, since that time, contained a provision for a grant?

Mr. TETRO. The answer to that is "No."

Mr. POAGE. What have you got in the way of your major agreements—what happens on your major agreements? Have you in effect

basically included grants to other nations?

Mr. TETRO. In many agreements; yes, sir.

Mr. POAGE. Similar to the Indian agreement?

Mr. TETRO. Yes.

Mr. POAGE. And it is a pretty well established policy of the Department to give away. 42.5 percent of anything that we sell under Public

Law 480; is that not right?

Mr. TETRO. Mr. Chairman 

Mr. POAGE. Do not tell me "No," Mr. O'Leary, unless you can

cite me the cases where you have not done it and do not cite me a

hundred-thousand-dollar agreement, either. Let us talk about these

billion-dollar agreements to see if they contain that kind of thing.

VVhat does the Pakistan agreement contain?

Mr. TETRO. It has not been negotiated yet.

• Mr. POAGE. Are you proposing to put it in? Do you propose to

give them 42.5 percent?

Mr. TETRO. I do not know.

Mr. POAGE. How are you going to say to Pakistan that we treated

India one way—we gave India 42.5 percent, and we will not give you

42.5 percent—how can you complete the agreement if you do that?

You would have to follow one course or the other, gentlemen.

Mr. TETRO. Mr. Chairman, I do not know 

Mr. POAGE. We know that you must do that.

Mr. TETRO. We have as a part of the administration policy been

making substantial grants to countries as is shown in the following

table.

The percentage of foreign currencies set aside each fiscal year in agreements

for country grants is as follows:

104(c) common defense grants

104(e) economic development

grants

Total percent,

104 (c) and (e)

grants

Fiscal year:

1955 

1956 1957 1958 

1959 1960 

7.0 10.0

10.9

9.6 3.9 1.8

12.7

7.6 5.2 1.4

9.0 27.1

19. 7

17.6 16.1 11.0

12.9

28.9

Mr. POAGE. That is right. I know that—we know you have been

doing it. Why do we not tell the U.S. public that? And why does

this committee not act upon the basis that we are going to understand

that what you propose to do with this $2 billion is not simply to sell

for foreign currency, but to give away 42.5 percent of it and then

sell the balance for foreign currency?

That is actually what we are doing, is it not?

Mr. TETRO. Mr. Chairman 

Mr. POAGE. I think you are wrong, but you can make an argument

in behalf of giving this currency away later on. It was pointed out
I 12 AMEND TITLE I OF PUBLIC LAW 480

if we pass this authorization, it involves giving away, plain giving

away, of over $500 million.

The CHAIRMAN. That is not morally wrong.

Mr. POAGE. I am not saying it is. This clearly involves a giveaway of $0.5 billion before you get any foreign currencies.

Mr. MATTHEWS. The committee ought to know about it.

Mr. POAGE. That is all I am contending. This committee ought

to know about it. I think the Department ought to tell me what is

in these bills. I think we ought to be able to go out on the floor—

and if there is a good reason for giving away $500 million, Mr. Matthews ought to get on the floor and defend it. If there is not a good

reason for it, then we ought not to bring such a bill out.

Mr. TETRO. Mr. Chairman, may I state two things on this. First,

over the last 6 months of 1960, our percentage for grants as such is

not in the magnitude of 42.5 percent. They, probably, are less than

10 percent. This is on the basis of signed agreements.

On the other hand, Congressman Poage 

Mr. POAGE. I know we have agreements made in the last 6 months;

you have made deliveries on some of those.

Mr. TETRO. These are agreements signed in the last 6 months of

1960. I might add, however, that for the current fiscal year as a

whole the percentage of grants will be substantially higher than 10

percent.

As to the general question that Congressman Poage has raised, Mr.

Chairman, on that question, there are other people who do share his

views. And the reason I think we are unable today to give a more

direct answer is that this problem is being studied. There are many

eminent economists who, along with our Congressman from Texas,

feel this should be looked at rather carefully to see if there is not some

other way that both we and the other countries would agree is a

better way to handle it.

But I think the Secretary will agree we are not in position today

to say how those are going to develop. But I can assure Congressman

Poage that his point of view is definitely being taken into account

and is shared by other people.

Mr. POAGE. How long do you think the $2 billion will last?

Mr. TETRO. To the end of this year, sir.

Mr. POAGE. Until the end of this year?

Mr. TETRO. Yes.

Mr. POAGE. How long will it take to use up that $1.5 billion?

Mr. TETRO. What?

Mr. POAGE. How long will it take to use up the $1.5 billion?

Mr. TETRO. We have had in the current authority $3.5 billion.

This is now practically all obligated. We have about $150 million left,

which would not cover agreements already in process of negotiation.

Mr. POAGE. You had $1.5 billion in last year's authorization, did

you not? . .

Mr. TETRO. $1.5 billion per year, plus $500 million carryover from

unused previous funds.

Mr. POAGE. How long did it take to use that?

Mr. TETRO. Roughly, 15 months.

Mr. POAGE. HOW long?

Mr. TETRO. The $1.5 billion?

Mr. POAGE. Yes.
AMEND TITLE I OF PUBLIC LAW 480 13

Mr. TETRO. Less than a year.

Mr. POAGE. Less than a year?

Mr. TETRO. Yes.

Mr. POAGE. It took about 9 months. It has been in the last fiscal

year?

Mr. TETRO. Over the 2-year period, sir, we are now, roughly,

what-15 months—and the programs have just about taken up the

$3.5 billion available.

Mr. POAGE. Well, now, I notice that the bill contains language that

I think may have been provided possibly in the past:

in amounts in excess of $3.5 billion, plus any amount by which agreements entered

into in the preceding calendar year have been called or will call for appropriations

to reimburse the Commodity Credit Corporation in amounts less than authorized

for such preceding year by this Act as in effect during such preceding year.

Does that mean that the $2 billion we appropriate 

The CHAIRMAN. Let me interrupt. Your appropriations for the

calendar year are $2 billion.

Mr. TETRO. Yes.

The CHAIRMAN. You have committed all funds up into March; is

that right?

Mr. TETRO. Yes, sir.

The CHAIRMAN. You need $2 billion more, to carry on for the rest

of the year?

Mr. TETRO. Yes, sir.

The CHAIRMAN. And it commits $1.5 billion from January to

March. That is what it has in mind. I suppose all of them have a

certain amount of grant.

Mr. TETRO. Most of them do.

The CHAIRMAN. Most of them do have grants?

Mr. TETRO. Yes.

The CHAIRMAN. You provide in the agreement that the country

with which you are dealing use a certain portion of the funds for

internal improvement; is that right?

Mr. TETRO. That is right.

Mr. DUNCAN. That is correct, Mr. Chairman.

The CHAIRMAN. And then some of it is in loans?

Mr. TETRO. Yes; in most cases.

The CHAIRMAN. And a percent is for promotional purposes, and a,

certain amount is set apart for that what they call the Cooley provision?

Mr. TETRO. Yes, sir.

The CHAIRMAN. A lot of those countries with which you have been

dealing, have deleted those funds, have they not?

Mr. TETRO. Yes, sir.

The CHAIRMAN. Have those funds run completely out?

Mr. TETRO. Yes, sir.

The CHAIRMAN. Why would it not be well to insure the use of those

funds in basic agreements so that the funds shall be set aside, as we

indicated they should be? I understand some countries do not like

the idea of loaning this money to local businessmen to expand indusries in their own nation. Is that not true? That is one of the

difficulties?

Mr. DUNCAN. We have run into that. Mr. Ioanes, Mr. Chairman,

can give you that information.
14 AMEND TITLE I OF PUBLIC LAW 480

Mr. IOANES. That is correct.

The CHAIRMAN. If we are going to give away all of this money in

all of these other countries, why cannot we insist upon these conditions

being carried out in the basic agreements with the countries receiving

them or hold off the deal?

Mr. IOANES. In most cases we have come mighty close to that.

With regard to the Cooley provision you talk of, without identifying

particular countries—I do not think we ought to do that on the

record—there are two countries that refused to permit any loans to

American business. The alternative is to say, "No" to -them completely and not move the commodity, or to negotiate as best you can

and hope that next year you will do a better job of convincing them.

The CHAIRMAN. Do you not agree that in order to move commodities you are going to have to make up your mind about that?

Mr. IOANES. _Yes, sir.

The CHAIRMAN. You are not asking for any additional authority—

you are asking for money. You are asking for the appropriation of $2

billion more. Mr. Poage was the author of the amendment that we

wrote into the law authorizing the sale for a period of 20 years at low

interest rates. And yet up to now you have not made any long-term

loans and you have not committed any at low interest rates. If you

will use the authority put in the bill by this Congress for this, we

feel it would help. The maximum has been used as a minimum interest rate. If you carry out the intent and purpose of this law at

low interest rates, and make it 15 years instead of 2 and 3 years,

you will remove these objections.

Mr. DUNCAN. We agree with you that this authority should be

used. As I said before, we are very concerned about moving these

commodities for dollars, and I know your views on this. Over a long

period of time you have made them clear.

We feel we are moving in the right direction because we are hopeful

of signing an agreement soon with a country under title IV with payment in dollars at 3.75 percent. I believe that is what you are

interested in.

Mr. POAGE. HOW much?

Mr. DUNCAN. 3.75-percent interest.

Mr. POAGE. I want this in the record. What I proposed as the

author was 2-percent interest and that is because the Soviets are, at

least claiming, to make loans at 2 percent and the world believes it,

whether it is true or not. On the other side of the coin, we are selling

commodities which we now have in storage which are costing us some

14 to 20 percent a year in carrying charges. And if you can get

2-percent interest, instead of paying 14 percent, you are getting about

16-percent return on your money. There is not another place I know

of where the U.S. Government can make that kind of return other than

through this program.

The 1.75-percent difference, which is nearly 50 percent more than

the Soviet claims to be charging, is enough to make the difference

of whether you sell in a great many countries or whether you do not

sell. It is a 100-percent increase in carrying costs for the purchasing

countries. It is a question of whether we pay 16 or save 14.25 percent.

I am in favor of saving 14.25 percent rather than lose the deal,

You are not selling anything that you do not have a storage.charge

on, are you?
AMEND TITLE I OF PUBLIC LAW 480 15

Mr. DUNCAN. That is right for the great bulk of commodities.

Mr. POAGE. Every time you sell something you are saving a storage

charge. Once you save that charge, it is equivalent to additional

interest to the U.S. Government.

So I do not want you to feel that this member of the committee is

satisfied—and I want to speak only for myself—I do not want you to

understand that this member of the committee is a bit satisfied with

that interest rate.

Mr. DUNCAN. This country thought it was a good deal. They

were willing to pay 3.75 percent. We are not necessarily setting that

as any standard to go by.

Another thing is that we are, also sending abroad under Public

Law 480, title 1, crops that are not under price support.

Mr. POAGE. What is that?

Mr. DUNCAN. Poultry, for example.

Mr. POAGE. You are not selling dried eggs that are in storage.

You are not drying eggs just to sell them.

Mr. DUNCAN. These commodities come out of the market.

Mr. POAGE. Are you buying them and drying them just for the

purpose of selling them at a discount?

Mr. DUNCAN. They are eligible under title IV.

Mr. POAGE. They are in surplus?

Mr. DUNCAN. Yes that is correct. I do want to reiterate what I

have said, we are taking a good look at opportunities to use title IV.

The CHAIRMAN. On this question of financing with some of these

countries, they cannot do business with us because they thought our

interest rate was too high and our repayment period too short. If

you will use the law as Congress has given it to you, I think you will

move these commodities.

Mr. DUNCAN. We are doing that.

The CHAIRMAN. One other question.

We authorized the use of these commodities in barter transactions

by the Department for strategic materials selected by the President

of the United States, not by Congress, not by this committee.

Now, I understand we have some material for which we bartered,

about $105 million in storage, which are worth more than when we got

them. Why can you not step up that? I would rather have strategic

material rather than have surpluses piled up here that we cannot use.

What do you say about that?

Mr. DUNCAN. We are studying this barter program.very carefully.

And we will, certainly, in the very near future establish a firm policy

on this. Barter can be useful to move commodities.

Mr. POAGE. In that connection, may I ask this question? We anticipate there is going to be a sugar bill authorizing substantial purchases of sugar. A good many of those countries which produce

sugar are, also, recipients of our food under Public Law 480. Why

should we not—why is it not good business—maybe the President

has plans for doing this—I wonder if you have any plans—of using

this in foreign trade, when we want to buy sugar from a country we

will do so providing they take some American wheat, they take some

American cotton? If we are going to buy their sugar at a favorable

rate, why not do that?
16 AMEND TITLE I OF PUBLIC LAW 480

The CHAIRMAN. That is a concrete example. If we take 1,000 tons

of sugar, have them take back a boatload of wheat. That makes

sense to me.

Mr. POAGE. They did not talk about the wheat in that relation.

They talked about taking wheat under Public Law 480.

The CHAIRMAN. I understand that.

Mr. POAGE. Taking wheat back under Public Law 480 and have

us pay them cash for sugar.

What I want to know is why we cannot do this, in the agreement

with India? I am not advocating breaking agreements, What I am

talking about is when we go to dealing with other countries, and there

are sales, they get commodities under Public Law 480. Are we

talking to these people about the proposition if you want to sell us

sugar, how much wheat will you buy?

Mr. DUNCAN. We would have to take a good look at this.

Mr. POAGE. Are we dealing with anybody now on the basis of selling

them American wheat or other surplus commodities and their selling

us sugar in return?

Mr. DUNCAN. Congressman Poage, on a direct barter basis?

Mr. POAGE. I am not talking about a barter basis. Of course,

under this bill the President will have the say as to what country from

which we are going to buy a great deal of sugar. There is no criteria

as it stands today. The President has that authority to buy where

he thinks best. It does not mean that John Kennedy is going out

and doing this. It means the Department of Agriculture. Do you

have any negotiations with any country—I will not ask you to name

any—do you have any negotiations going on with any countries to

suggest that, "If you will buy X number of bushels of American

wheat 7,

The CHAIRMAN. Or barter it.

Mr. POAGE (continuing). "That we will then authorize the sale of

X tons of sugar in the American market at a favorable price?"

Do you have have those kind of negotiations?

Mr. DUNCAN. There may be three or four proposals.

Mr. POAGE. Do you think well of that?

Mr. DUNCAN. I think we need to see what they involve.

Mr. POAGE. Do you not think that otherwise it would be rather

foolish if along about May you come up and show us that you have

made Public Law 480 agreements, using the $2 billion that you are

asking for now, with countries that could have paid us money, or in

sugar, or in alter products?

Mr. DUNCAN. I hope we can look at these instances in the very

near future.

Mr. POAGE. I want to know what you are going to do. Would you

not agree that it would look rather ridiculous if you came up with

those kind of statements?

Mr. DUNCAN. I would say this, Mr. Cooley, that we must examine

these cases.

The CHAIRMAN. Let me give you one case. A delegation from

Manila is on its way here—on their way to Washington—coming here

because they want to sell sugar and more sugar, to have more quota

and more quota.

I want to remind you of the fact that they have on their books over

there now a law that discriminates against American-grown tobacco.
AMEND TITLE I OF PUBLIC LAW 480 17

I do not think that they come in good grace here when they come here

asking us to let them sell sugar in our market, and they refuse to take

in return American goods.

Mr. DITNCAN. I agree that we should seek to eliminate such trade

barriers.

The CHAIRMAN. I want somebody to tell them. 1 do not believe

in this business of giving them freedom for shipping in sugar and then

they sit back over there and play footsie with everybody else in the

world excepting they will not buy our tobacco. That is what I

think Mr. Poage has in mind.

We put in the sugar bill. And we want consideration to be given

to countries that have been purchasing and are willing to purchase

American surplus commodities. And you are the one that is going

to be held to account for seeing that it is properly administered.

Mr. POAGE. You have this program for market development. We

gave you authority to use 5 percent of the money.

Mr. TETRO. Yes; 5 percent.

Mr. POAGE. And you used it for promotion of sale of our products

abroad?

Mr. TETRO. Much of it; yes, sir.

Mr. POAGE. You never have used the 5 percent?

Mr. TETRO. No., sir; not in total.

Mr. POAGE. Why?

Mr. TETRO. Mr. Chairman, we have asked the groups with whom

we are cooperating in market development to sit down with us. We

met with them a week before last to review this entire program. We

are trying to develop market development plans far enough ahead so

we will know what the needs are in this area. And then I think we

will have a report which will give us a better idea of what these

demands are. Part of the answer to Congressman Poage's question is

that so far promotion programs with trade cooperators have been

carried on with the 2-percent convertibility plus the availability of

other funds in countries where they are working has been sufficient.

Mr. POAGE. Is the 2 percent intended only to take care of the trade

development fund?

Mr. TETRO. Yes, sir.

Mr. POAGE. That is all you are trying to get?

Mr. IOANES. I might add this: The 2 percent in conversion means

going to a government like India, for example, and asking them to

convert rupees into German marks or into Swiss francs. So the conversion refers to other countries other than the big title I countries.

And then of course, we also have use of currencies in the title I country

for market development.

Mr. POAGE. In most cases the effect of that is making that much

available in dollars?

Mr. TETRO. Yes.

Mr. POAGE. They pay 2 percent in dollars?

Mr. TETRO. The other side of this coin, Mr. Congressman, is to

develop cash markets. This effort is largely in hard currency countries. We really have to convert.

Mr. POAGE. I know. But we have to have convertibility to use

most of this?

MT. TETRO. Yes, sir.

Mr. POAGE. In other words, if you develop the German or French

markets, you are not sending Public Law 480 goods over there, and
18 . AMEND TITLE I OF PUBLIC LAW 480

you have no development fund for those areas where you, probably,

would have American money if you developed it. Consequently, if

the development is to mean anything, you have to convert rupees and

other currencies—you have got to convert some of it into Western

European currencies to make sure that your development is effective.

The CHAIRMAN. Would it not be an advantage if you increased that

2 percent to, say, 10 percent convertibility?

Mr. TETRO. At present we do not have programs that would require

that much. This is 10 percent of some pretty large numbers and

involves underdeveloped countries with scarce foreign exchange. We

will know soon what our trade promotion needs are.

I would suspect, Mr. Chairman, that currently the 5 percent is

enough. We would like to talk with you about this as we develop

our plans.

The CHAIRMAN. Not for promotional purposes. I am talking about

convertibility.

Mr. TETRO. For other uses?

The CHAIRMAN. To provide for convertibility of that amount.

Then you have flexibility.

Mr. JENNINGS. Would you not be creating this 5 percent in cash?

The CHAIRMAN. Not in dollars, but in some other foreign currency.

Mr. JENNINGS. The same thing.

Mr. HOEVEN. Mr. Duncan, what is the primary objective and

purpose of Public Law 480?

Mr. DUNCAN. Well, I think it has several, Mr. Hoeven. For one

thing, I think it is to develop our agricultural trade with foreign

nations.

Mr. HOEVEN. Foreign nations; did you say?

Mr. DUNCAN. Yes; with foreign nations, our agricultural trade in foreign nations. Also, in a way to help our foreign policy.

Mr. HOEVEN. I think you will find that Public Law 480 was written

in this committee. Its primary objective and purpose was to dispose

of surplus agricultural commodities, because those surplus commodities were influencing the market. Is that not correct?

Mr. TETRO. That is correct

Mr. HOEVEN. The thing that concerns me is that Public Law 480 is very rapidly getting to be a welfare program. If it is to be converted

into a welfare program, then the Committee on Agriculture will soon

lose its jurisdiction. I can visualize the whole program becoming

involved in foreign affairs and health, education, and welfare matters.

Your prepared statement is replete with suggestions that we should

primarily be concerned with improving nutrition throughout the world

on a continuing basis, and that the legislation affords an opportunity

to attack hunger and malnutrition overseas This is all very well

and appropriate, and I have no objection to such objectives. But

the thing I fear is that this entire program is rapidly developing into

a worldwide welfare program instead of the program for which the legislation was originally intended.

Do you have the same concern?

Mr. DUNCAN. No, sir; our primary concern here Mr. Hoeven, is to

move our agricultural commodities into foreign lands.

Mr. HOEVEN. Well, in the basic law there is no reference whatsoever to improving the economic situation of the countries in the world

or to be concerned about their nutrition problems or anything else.

The objective is to dispose of surplus agricultural commodities.
AMEND TITLE I OF PUBLIC LAW 480 19

think that should be a matter of concern for the Department and the

administration. You are requesting a new authorization of $2 billion.

Evidence before the committee indicates that during the first 3

months of this year you have committed about $1.5 billion. At that

rate, you will need about $6 billion

'

which is largely, as I see it now, in

the welfare category. You will have to justify every dollar of that

on the floor of the House of Representatives.

How are you going to do it?

Mr. DUNCAN. We believe we have sound programs for an additional

$2 billion. Also there are provisions in the law for grants for economic development.

Mr. HOEVEN. In your prepared statement you say:

We do not view it as a problem which forces us into a surplus disposal operation.

Does that mean that it is incumbent upon you to administer this as

a welfare program?

Mr. DUNCAN. No sir. I do not think so.

Mr. HOEVEN. Why then do you say?

We do not view it as a problem which forces us into a surplus disposal operation.

That is on page 3, the last paragraph of your statement.

Mr. TETRO. Mr. Chairman, if I might comment on the Congressman's question, the name this committee gave to the law was "The

Agricultural Trade Development and Assistance Act." And while

one sentence taken out of context here would indicate a view that it is

only surplus disposal—there might have been that—I believe this

committee and the farmers of this country have always looked on this

as a program to promote the export of U.S. agricultural commo •

The reference to the surplus disposal—by far most of the e "OW

been in the movement of commodities which have been u price

support, but not all. We have had some difficulties in otiRking

agreements with other countries because they did feel t t Nfei were

trying to dump the surpluses, that these were goods r were •

unwanted. CE.

=

The statement that Mr. Duncan has given here, sir, is ai to try

to indicate to other countries that we feel these commodities virprq3. 0 -

something, that we are not doing ourselves a favor necessarily,

trying to promote trade. We are trying to use the agricultural

abundance of this country in a useful fashion.

But this committee has also recognized that if there were no such

markets there would come a time when the U.S. agriculture within

itself would say, "We won't produce these any more.

We are trying to change an attitude here so that other countries

will understand that these are important sources of capital to them

and they are not just surpluses that we are trying to get rid of.

Mr. HOEVEN. You told Mr. Poage that 42.5 percent of the money

goes into direct grants—Mr. Duncan7told'him that. What is your

justification for the $2 billion? Why not spell it out.

Mr. DUNCAN. We need it to meet requests from food deficit

countries.

Mr. HOEVEN. For what?

Mr. DUNCAN. To carry out the requests that these foreign countries

have made. Right now we are down to $150 million. We want to

negotiate an agreement with Pakistan.

We have other requests that total hundreds of millions of dollars—

well over a billion dollars right now that are ready to be started.
20 AMEND TITLE I OF PUBLIC LAW 480

Mr. HOEVEN. How much money will be going into direct grants?

Mr. IOANES. Mr. Hoeven, we cannot give you precise figures on

what will go into grants. I would guess offhand that about 25 to 30

percent of the foreign currencies generated under the $2 billion

authorization would be for grants.

Mr. HOEVEN. In my judgment you will have to make a complete

justification for the added money not only before this committee, but

before the Appropriations Committee. At the rate you are spending

money so far this year, it will amount to about $6 billion a year.

Mr. IOANES. Mr. Hoeven, basically what you are saying is there

have been changes in this program since it started. That is correct.

I recall in reading a conference report once issued by this committee,

it said that the administrators of this program were not utilizing the

authority in the law to make grants for economic development in

countries. I do not recall the exact year that that was done, but in

one of the reports in extending the law this committee took the

position that greater use should be made of that particular grant

authority.

It seems to me when we talk about surplus disposal as opposed to

what you call a welfare program, we are trying to define an area here

that is very difficult to nail down exactly.

Mr. HOEVEN. Let me ask you this--

Mr. IOANES. Yes.

Mr. HOEVEN. Do you need the full $2 billion to dispose of surplus

agricultural commodities?

Mr. IOANES. Yes, sir.

Mr. HOEVEN. One more question: I notice in the prepared statement

reference is made to the food for peace program, wherein is stated:

More and more foreign countries now understand that food for peace is not

a slogan.

Do you infer from that that the food for peace program has only

been a slogan in the past?

Mr. DUNCAN. I did not get the question.

Mr. HOEVEN. On page 2 of Mr. Duncan's statement it says "that

food for 'peace is not a slogan." Do you infer from that statement,

that under the previous administration the food for peace program

was only a slogan?

Mr. DUNCAN. No, sir; I do not.

Mr. HOEVEN. What do you mean?

Mr. TETRO. Congressman Hoeven, the "food for peace" as a term

or a slogan, if you wish, has been with us now about 2 years. And

there has been considerable discussion as to its paternity. But I

think it has been accepted by farmers in this country as an idea of

trying to use the agricultural abundance of the United States to help

maintain security in the world.

The term as used here saying, "Food for peace"—is not a slogan.

The development of these programs has extended over several years.

Food for peace has only been with us about 2 years, and has developed

into a more specific, different kind of program. Previously it did not

have as much of a practical significance.

And we have tended, I think, more and more to discover that food

for peace is what we are doing, it is what this committee asked us to do,

not just 6 but several years ago. We had section 550 of the Mutual

Security Act of 1953, which is the first time we officially tried to use

surpluses in support of an international security program.

•
AMEND TITLE I OF PUBLIC LAW 480 21

Mr. HOEVEN. I am glad you give recognition to the fact that the

food-for-peace program is about 2 years old.

Mr. TETRO. We have heard that the food-for-peace program may

be 40 years old—I do not know.

Mr. HOEVEN. I did want to remind you gentlemen that the first

reference to a food-for-peace program in a Presidential message, was

in a message sent to the Congress by President Eisenhower last year.

I think the record should, also, show that Mr. Don Paarlberg,

an assistant to President Eisenhower, had his office in the White House

and was in direct charge of the food-for-peace program. I did not

want the country to get the impression the food-for-peace proposal

was a creature of the New Frontier.

I want the food-for-peace program to succeed. I was one of those

who recommended that the food-for-peace proposal be incorporated

in President Eisenhower's farm message.

Mr. TEAGUE. Will you yield? It is 40 years old—it was mentioned

in 1920—that was during a Republican administration.

The CHAIRMAN. It was an idea.

Mr. GATHINGS. This request for $2 billion, if it is approved by the

Congress, would give you a rate of disposal under title I of $2,750

million for the fiscal year 1960 and 1961; would it not?

Mr. DUNCAN. That is true for calendar 1960 and 1961 programing.

Mr. GATHINGS. Is that greater in extent of the disposal programs

than for 1959 calendar year?

Mr. TETRO. Fiscal 1959?

Mr. GATHINGS. Well, calendar year—this comes in on the calendar

year basis-12-month period of time.

Mr. DUNCAN. About $1 billion, I believe it ran.

Mr. GATHINGS. It was what?

Mr. DUNCAN. $1 billion in 1959.

Mr. GATHINGS. The statement reflects that this request is in line

with the requests under title I in previous years. And I was wondering, would it exceed the usual movement under title I; is it more or

less?

Mr. TETRO. Congressman Gathings, I think we can give you a

general answer now, but if you would permit, we would like to put

it in the record year by year. However, part of the difficulty here is

that the year-by-year use has been moving up.

In our statement we say that the fiscal year which we are now

finishing, 1960-61, will be the largest movement of title I commodities

on record.

(The information follows:)

In response to the request to indicate the CCC cost of title I programs by time

periods, the following shows agreements signed during each fiscal year:

[In millions]

Fiscal year 1955 $466

Fiscal year 1956 . 958

Fiscal year 1957 1, 470

Fiscal year 1958 998

Fiscal year 1959 1, 138

Fiscal year 1960 1, 722

Fiscal year 1961 through Mar. 15, 1961 2, 348

Country detail is available in the following list giving the dates of .signatures

for each agreement signed since the beginning of the program through the present

date.
22 AMEND TITLE I OF PUBLIC LAW 480

U.S. DEPARTMENT OF AGRICULTURE-FOREIGN AGRICULTURAL SERVICE

Till', I, Public Law 480: Agreements signed from beginning of program (as modified

by purchase authorization transactions) through Mar. 15, 1961

[Dollar amounts in thousands]

1. '

2.

3. P

4. C

5. P

6. S

7. A

8.

9. I

10. F

11.

12. I

13. J

14.

15.

16. A

17. I

18. T

19. C

20.

21.

22. P

23. F

24. P

25. Y

26. E

27. S

28. Is

29. B

30. U

31. C

32. A

33. G

34. F

35. Y

36. S

37. Is

38. A

39. B

40. U

41. Is

42. U

43.

44. Ir

45. P

46. In

47. Si

48. T

49. K

50. C

51. S

52. F

53. F

54. P

55. P

56. T

57. P

58. J

59. U

60. It

61. N

62. P

63.

64. C

65. I

66. P

Country Date signed

Market

value

excluding

ocean transportation

Ocean

transportation

Estimated

CC C cost

including

ocean transportation

urkey 1 Nov. 15, 1954 $17,330 $4, 759 $32, 205

ugoslavia 1 

akistan 1 •

Jan. 5, 1955

Jan. 18,1955

38,021

27, 545

5, 297

1,242

04,942

34,248

hile 1 Jan. 27, 1955 4, 559 396 6, 906

eru 1 Feb. 7,1955 2,944 305 • 6,016

Pain 1 Apr. 20,1955 19,094 1,103 20,884

rgentina 1 Apr. 25.1955 5,670 128 8,211

urkey (amendment) 1 Apr. 28,1955 4,143 333 5,687

;rad 1 Apr. 29,1955 7,887 831 13,682

inland 1 May 6,1955 5,088 84 5,172

ugoslavia (amendment) I May 12, 1955 6, 522 1, 165 13,051

aly May 23,1955 49, 623 1,656 67, 485

man 1 May 31,1955 77, 607 6,842 105,177

.orea 1 do 13,998 841 14,839

nited Kingdom 1 June 7,1955 15,000 205 15, 205

ustria 2 June 14,1955 5,487 572 7, 730

rael (amendment) 1 June 15, 1955 3, 573 687 7, 279

hailand I June 21,1955 1,900 100 2,000

olombia 1 June 23, 1955 4, 166 300 5, 763

reece I June 24, 1955 5, 576 497 9, 78,5

reece 1 do 7, 261 924 13, 498

eru (amendment) 1 June 25, 1955 3,080 322 6,021

Subtotal, beginning of program through June

30, 1955 326,081 28, 581 465,817

rance 1 Aug. 11, 1955 650 650

eru (amendment) 1 Sept. 20, 1955 1,044 1,044

ugoslavia (amendment) 1 Oct. 1, 1955 17, 545 3,813 39, 542

cuador 1 Oct. 7, 1955 3, 135 278 4, 282

Dain (amendment), 

rael 1 

Oct. 20, 1955

Nov. 10, 1955

9,976

15, 980

429

1,942

10,607

27,566

razil 1 Nov. 16, 1955 35,680 4, 979 73,422

nited Arab Republic (Egypt) Dec. 14, 1955 4,818 782 10,225

olombia 1 Dec. 20, 1955 10,756 662 15,526

rgentina 1 Dec. 21, 1955 23,011 89 26, 195

ermany 1 Dec. 23, 1955 1, 197 1, 197

inland (amendment), 

ugoslavia (amendment), 

Jan. 12,1956

Jan. 19, 1956

(2)

42,461

(2)

6,340

(2)

70,729

Ain (amendment)'..Jan. 21,1956 14,881 559 15,440

rael (amendment)1 Jan. 31, 1956 (3) (3) (3)

ustria 1 Feb. 7, 1956 21,115 1,211 31,508

urma Feb. 8,1956 21,081 797 31,464

nited Arab Republic (Egypt) (amendment)' -- ----do 4,899 674 10,316

rael (amendment)1 Feb. 10, 1956 9, 999 9, 999

nited Arab Republic (Egypt) (amendment),_ Feb. 17, 1956 7,344 1,013 15, 546

reece (amendment)1 do 5,849 232 6,081

an' Feb. 20, 1956 9, 963 2,612 20,801

tkistan 1 Mar. 2,1956 16,850 28,900

Ldonesia do 90,951 7, 123 143,959

)ain Mar. 5, 1956 59, 929 4,492 77, 233

arkey 1 Mar. 12, 1956 3,825 193 4,018

orea 1 Mar. 13, 1956 41,892 4,959 53,659

hile 1 do 32, 164 2, 279 46,768

)anish-Swiss (amendment), 

inland (amendment)1 

Mar. 20,1956

Mar. 26, 1956

4,444

14, 264

270

1,061

9,324

22, 282

nland (amendment), 

traguay 1 

Apr. 26, 1956

May 2, 1956

(4)

2, 598

(4)

328

(4)

4, 539

3ru I May. 7, 1956 2, 470 295 4,370

urkey (amendment), May 11, 1956 9,807 1,258 18,703

Augal May 24, 1956 6,282 862 13, 4

pan (effective May 29, 1956), 

nited Kingdom' 

Feb. 10, 1956

June 5, 1956

57,457

12,000

6,664

186

96.3

12,

Subtotal, July 1, 1955, through June 30, 1956 616,320 56,977 957,938

ily (amendment) 1 July 5, 1956 6,596 144 6,740

etherlands 1 Aug. 7, 1956 247 7 324

tkistan I do 41,436 2, 196 70,310

recce , 

aina (Taiwan) i 

Aug. 8, 1956

Aug. 14, 1956

14,867

.8,851

1, 680

468

20,665

12, 534

dia ' Aug. 29,1956 302.618 ,59, 645 546,023

tkistan (amendment) 1 Sent. 7. 1956 2. 224 175 2..399

See footnotes at end of table, p. 25.
AMEND TITLE I OF PUBLIC LAW 480 23

Title I, Public Law 480: Agreements signed from beginning of program (as modified

by purchase authorization transactions) through Mar. 15, 1961-Continued

Country Date signed

Market

value

excluding

ocean transportation

Ocean

transportation

Estimated

CCC cost

including

ocean transportation

67. Israel I Sept. 11, 1956 $9, 299 $1,262 $15, 104

68. Spain (amendment) 1 Sept. 15, 1956 6,978 360 7, 338

69. Spain (amendment) I do 1,981 260 2, 241

70. Spain Oct. 23, 1956 45,366 2,925 50, 159

71. Finland (amendment) 1 Oct. 24. 1956 1,479 177 2,844

72. Italy Oct. 30, 1956 64, 262 2,464 83,437

73. Yugoslavia Nov. 3, 1956 85, 248 14, 667 143, 180

74. France 1 Nov. 8,1956 1,400 1,401)

75. Turkey 1 Nov. 12, 1956 39, 313 5,507 65,025

76. Pakistan (amendment) 1 Dec. 3, 1956 21, 642 3, 267 42, 439

77. Thailand (amendment) Dec. 14, 1956 461 39 807

78. Brazil Dec. 31, 1956 124, 378 14,322 204, 817

79. Korea (amends No. 49) Jan. 7, 1957 

80. Italy (amendtnent) 1 do 1,500 47 1.547

81. Greece (amendment) I Jan. 21, 1957 3,700 575 7,093

82. Turkey (amendment) 1 Jan. 25, 1957 20, 727 3,280 34. 993

83. Korea 1 Jan. 30, 1957 16, 724 2,091 21.640

84. Ecuador 1 Feb. 15, 1957 3, 102 230 3,936

85. Thailand I Mar. 4,1957 2,032 67 2,099

86. Greece (amendment) I do 4,309 899 8,050

87. United Kingdom (amendment) I Mar. 13, 1957 6,000 23 6, 023

88. Spain (amendment) 1 Mar. 26, 1957 7, 189 336 7, 525

89. Italy (amendment) do () (9 (2)

90. Iceland i Apr. 11, 1957 2, 586 76 3,350

91. Colombia 6 Apr. 16,1957 13,957 1,587 21,813

92. Turkey (supplement) I Apr. 20, 1957 (7) (7) (7)

93. Peru 1 May 2, 1957 3,536 270 5,878

94. Austria May 10, 1957 13,501 1,499 21,809

95. Finland I do 3,331 268 4,972

96. Poland 1 June 7, 1957 17, 635 712 24,260

97. Bolivia do (2) (2) (2)

98. Burma (amendment) June 14, 1957 663 16 679

99. Philippines 1 June 25, 1957 9,301 849 14, 711

100. United Kingdom (supplement) 1 June 27, 1957 2, 180 2, 180

Subtotal, July 1, 1956, through June 30, 1957 913,298 122, 476 1,470, 136

101. Poland (supplement) Aug. 14, 1957 43,667 3, 146 70,432

102. Mexico 1 • Oct. 23, 1957 24, 644 984 41, 170

103. Israel I Nov. 7,1957 31. 765 2,925 54,213

104. Pakistan Nov. 15, 1957 56,800 8,555 99, 767

105. Greece Dec. 18, 1957 17, 702 2,085 28,690

106. Yugoslavia (amendment) 1 Dec. 27, 1957 6, 554 664 11, 206

107. France 1 do 2, 498 49 2, 547

108. Turkey Jan. 20, 1958 43,405 3,395 60,918

109. Spain Jan. 27, 1958 65,207 3,905 77,671

110. United Kingdom Feb. 3, 1958 7,914 7,914

111. Yugoslavia do 57, 666 4,990 89,214

112. Korea Feb. 5, 1958 44, 818 5,242 69,909

113. Poland Feb. 15, 1958 67,305 5,558 100,315

114. United Kingdom (supplement) 1 Feb. 17, 1958 5,600 32 5,032

115. Finland 1 Feb. 21, 1958 7,470 328 10.363

116. France 1 Feb. 28, 1958 23,010 34,599

117. Italy Mar. 7, 1958 19,072 636 26,438

118. Colombia Mar. 14, 1958 5,967 409 7,970

119. Peru 1 Apr. 9,1958 7,207 424 11,076

120. Spain (supplement) 1 Apr. 10, 1958 3, 831 90 5, 9

121. China (Taiwan) 1 Apr. 18, 1958 10, 826 962 14,675

122. Iceland May 3, 1958 2,628 148 3,271

123. Burma May 27, 1958 17,000 1,000 22,608

124. Philippines 1 i June 3, 1958 3,375 509 5,636

125. Vietnam June 17, 1958 5,800 269 6,069

126. Ceylon' June 18, 1958 3,604 263 5,879

127. India June 23,1958 46,000 9,341 73,922

128. Turkey (supplement), June 25, 1958 5,000 213 5,213

129. Yugoslavia (supplement) June 26, 1958 2,653 292 4, 149

130. Iceland (supplement)1 do 66 96

131. Israel (supplement)1 June 30,1958 5,442 874 7,762

132. Ceylon (supplement), do 1,315 253 2,221

133. Ecuador do 1,602 200 2,377

134, France (supplement)1 do 2,000 2,000

135. Spain (supplement), do 24,371 681 27, 516

Subtotal, July 1, 1957, through June 30, 1958_ _

672,927 58,316 997,889

See footnotes at end of table, p. 25.
24 AMEND TITLE I OF PUBLIC LAW 480

Title I, Public Law 480: Agreements signed from beginning of program (as modified

by purchase authorization transactions) through Mar. 15, 1961-Continued

Country Date signed

Market

value

excluding

ocean transportation

Ocean

transportation

Estimated

CC C cost

including

ocean transportation

136. India Sept. 26, 1958 $222, 814 $38, 780 $372, 550 137. Spain (supplement) Oct. 31,1958 11,798 527 12,325 138. Israel Nov. 6, 1958 33,663 4,086 49,672 139. Pakistan Nov. 26, 1958 71,439 12,017 120,810 140. Yugoslavia Dec. 22, 1958 85,996 10,201 134,992 141. United Arab Republic (Egypt) Dec. 24, 1958 22,494 2,392 38,544 142. Finland Dec. 30,1958 3,960 104 4,200 143. Spain Jan. 13, 1959 90, 690 5, 725 102,672 144. Turkey Feb. 13, 1959 33, 163 1,517 37, 142 145. Uruguay Feb. 20,1959 9,600 310 10,526 146. Iceland Mar. 3, 1959 2, 100 276 2,889 147. Israel (supplement) Mar. 10, 1959 500 67 912 148. Ceylon Mar. 13,1959 7,155 1,311 12,380 149. France Mar. 21, 1959 3,500 55 3, 555 150. United Arab Republic (Egypt) (supplement)_ _ May 5, 1959 21, 789 1,580 26,964 151. Uruguay (supplement) May 21, 1959 2,200 314 2, 874 152. Pakistan (supplement) do 3,359 297 3,656 153. Ceylon (supplement) May 28, 1959 5,300 800 9,000 154. Indonesia May 29, 1959 38, 350 2,871 62, 405 155. China (Taiwan) June 9, 1959 12,399 957 17, 554 156. Poland June 10, 1959 40, 359 3, 480 59,566 157. Argentina June 12, 1959 1,227 1, 4S0

158. Korea June 30, 1959 29, 711 3,289 51,077

Subtotal, July 1, 1958, through June 30, 1959_ 753,325 90,760 1, 138, 103

[59. Yugoslavia (supplement) July 9, 1959 440 440 [60. United Arab Republic (Egypt) July 29, 1959 52, 735 5, 740 86, 473 161. Peru Sept. 25,1959 50 5 55 [62. Indonesia (supplement) Oct. 1,1959 9,900 1,366 16, 119 [63. Colombia Oct. 6, 1959 27, 700 3,900 44,700 [64. Vietnam Oct. 16, 1959 4, 700 194 4,894 [65. Iceland (supplement) Nov. 4, 1959 375 375 [66. Poland (supplement) Nov. 10,1959 10, 703 1,260 12,594 [67. India Nov. 13,1959 203,913 35,424 365,840 [68. United Arab Republic (Syria) Nov. 14, 1959 8,500 1,386 13,076 [69. Uruguay (supplement) Nov. 16, 1959 3,800 136 6,216 170. India (supplement) Nov. 23, 1959 15,988 1,687 33,657 .71. Uruguay (supplement) 'bee. 1, 1959 18,500 2, 507 34, 834 .72. Turkey Dec. 22, 1959 31,382 3, 697 52,057 1 73. Greece Jan. 7,1960 5,500 841 6,511

74. Israel do 26,863 3,307 39,467 ,75. India (supplement) Jan. 8, 1960 31,200 1, 617 52,367 [76. Uruguay (supplement) Jan. 13,1960 5,200 650 5,989 [77. Pakistan (supplement) Jan. 28,1960 20,352 4,151 38,650 78. China (Taiwan) (supplement) Feb. 11, 1960 5,327 687 9, 697 .79. Poland (supplement) do _ 37, 412 4,145 70,666

80. Peru Feb. 12,1960 11,000 1,000 17,543 Sl. Vietnam (supplement) Feb. 13, 1960 1,200 59 2, 059 .82. India (supplement) Mar. 21, 1960 6,944 1, 103 12,593

83. Finland Mar. 23, 1960 4,475 86 5,311

84. United Arab Republic (Egypt) (supplement). _ Mar. 26, 1960 13,989 954 15, 193 85. Iceland .Apr. 6, 1960 1, 750 288 2,404 86. PakiStan (supplement) Apr. 11, 1960 15, 122 1,204 16,326

87. Pakistan do 61,400 10,800 114,700

88. India May 4,1960 270, 250 48,750 529,750 89. Finland (supplement) May 6, 1960 100 100

90. Pakistan (supplement) May 27,1960 440 80 700 91. Chile June 2,1960 2,900 150 4,207

92. Yugoslavia June 3,1960 18,000 849 26,040

93. Spain June 22, 1960 61,300 2,837 71,637

94. Israel (supplement) June 30,1960 6,689 869 7,558

95. Vietnam (supplement) do 675 172 1,248

Subtotal, July 1, 1959, through June 30, 1960 997,235 142,515 1, 722,223

96. Poland July 21,1960 119,500 10,528 181,037

97. Iran July 26,1960 4,315 1,145 8,267

98. India (supplement) July 29,1960 39,600 2,000 68,000 99. United Arab Republic (Egypt) Aug. 1, 1960 51,800 6,730 87,963

M. United Arab Republic (Syria) Aug. 9,1960 14,900 2,573 26,377 01. Chile (amendment) Aug. 12,1960 300 50 350 02. China (Taiwan) Aug. 30,1960 12,780 1,420 20,585

03. Korea (supplement) Sept. 16, 1960 750 60 810 W. United Arab Republic (6yria) (amendment). _[. et j7 1660 1, 382 236 1, 618 05. Pakistan (supplement) ' Sept. 23, 1960 8,700 1,600 15,996

*6. India (supplement) do _ 14,100 3.051 17.151

See footnotes at end of tablet p. 25.
AMEND TITLE I OF PUBLIC LAW 480 25

Title I, Public Law 480: Agreements signed from beginning of program (as modified

by purchase authorization transactions) through Mar. 15 1961-Continued

Country Date signed

Market

value

excluding

ocean transportation

Ocean

transportation

Estimated

CC C cost

including

ocean transportation

207. Iran (supplement) Sept. 26, 1960 $11, 280 $2,078 $20, 823

208. Ecuador Sept. 27,1960 925 75 1,000

209. Ceylon Sept. 30,1960 4,100 1,000 7,200

210. Uruguay (supplement) Oct. 14,1960 2,800 494 3,294

211. Iran (supplement) Oct. 20,1960 1,095 122 1,217

212. Vietnam Oct. 28,1960 6,545 955 11,223

213. France Nov. 4,1960 2,500 32 2,532

214. Indonesia Nov. 5,1960 14,600 1,549 22,655

215. Greece Nov. 7,1960 12,200 1,561 15,509

216. Chile Nov. 8,1960 25,900 3,000 41,100

217. Korea Dec. 28,1960 31,600 3,500 51,900

218. Brazil Dec. 29,1960 30,800 3,700 55,800

Subtotal, July 1, 1960, through Dec. 31, 1960 412, 572 47, 276 665,137

Total, all agreements signed through Dec. 31,

1960 4, 691, 758 546,901 7, 417, 243

India, balance, 4-year agreement 810,750 146,250 1, 589, 250

219. Turkey Jan. 11,1961 12,400 1,600 22,000

220. UAR (Egypt) (supplement) Jan. 16,1961 4,400 200 4,600

221. China (Taiwan) (supplement) Feb. 9,1961 3,000 600 5,648

222. Iceland (amendment)._ Feb 27,1961 75 75

223. Indonesia (supplement) Mar. 2,1961 3,100 600 6,400

224. India Mar. 9,1961 33,600 1,500 43,500

225. Pakistan _

226. Pakistan 

Mar. 11,1961

do 

4,500

4,000

900

100

9,300

4,100

Subtotal, Jan. 1 through Mar. 15, 1961 875,825 151,750 1, 684, 873

Subtotal, July 1, 1960, through Mar. 15, 1961 1, 288, 397 199,026 2, 350, 010

Total, all agreements, through Mar. 15, 1961_ 5, 567,583 698,651 9, 102, 116

I Shipments completed. Amounts shown are based on accounting records.

Expired. No funds expended.

3 Funds combined with No. 28.

4 Funds combined with No. 52.

5 Funds combined with No. 72.

Agreement signed for $20,400,000 of which $15,940,000 is being financed by C CC under title I, and the

remainder has been financed by Colombia for dollars.

7 Funds combined with No. 82.

Mr. GATHINGS. It has been moving up gradually in the last 3 years,

has it not?

Mr. TETRO. Yes, sir. One difficulty is that we have, I think, is

that we are talking here about obligations authority.

Mr. GATHINGS. Yes.

Mr. TETRO. And we are, also, talking about the movement of commodities under what has been done in the past.

Mr. GATHINGS. Yes, that is correct.

Mr. TETRO. For example, the statement that it would be $2,750

million this year, or a rate of $6 billion in the first quarter of this year

will not be directly related to the amount of commodities that move

in a particular 12 months' period. This is, however, moving up and

we hope to keep it moving in that direction.

Mr. GATHINGS. If you expand your title IV shipments, that is,

what is known as the Poage provision, and move commodities out

under title IV, will you still need the $2 billion that you are asking

for here for title I?

Mr. TETRO. Yes, sir. This is a different kind of market. I think

Secretary Duncan would agree with me that we have now several

different tools.
26 AMEND TITLE I OF PUBLIC LAW 480

Title IV is certainly one.

Barter is another.

Title I, also, meets needs of underdeveloped countries.

And what we hope to do is to use each of these programs to the maximum extent to move as many agricultural commodities as we

reasonably can.

We are looking forward to more activity in title IV. Title IV was

not too well understood by us or by other countries at first.

Mr. GATHINGS. How has it been received?

Mr. TETRO. The one program which we hope to be able to announce

rather soon will be extremely well received by that particular country.

Mr. Chairman, I would like to go back on the food for-peace-record

for just a moment. I had not known Mr. McCabe had been the Director of Food for Peace. We had a coordinator of food for peace

in the White House for some time who was, also, the economic adviser

to the President, Mr. Don Paarlberg.

In, I believe, April of 1960 for the first time he was given a letter

of authority to be a coordinator of food for peace.

The big difference, perhaps, in moving out of the slogan area is

partly the practical fact that we now have a better concept of what

food for peace is. But we also have had in the last 2 months the creation of a White House position the sole function of which is

Director of Food for Peace. It is not now confused with other things.

The CHAIRMAN. Let him finish.

Mr. BREEDING. I want to interrupt.

The CHAIRMAN. Have you finished?

Mr. TETRO. Roughly, sir.

Mr. BREEDING. 1 want to get onto this food-for-peace subject

because my good friend from Iowa, Mr. Hoeven, indicated that this

program was first created under the Eisenhower administration in

1959. But I want also to remind him that in 1958 there were 30

House bills put into the Congress of the United States here to create

ft world food bank within the United Nations, which became known as

the food-for-peace program.

Certainly, I am pleased that we have a new administrator for food

for peace, Mr. George McGovern; and this office is created under the

new Kennedy administration in 1961.

Mr. MATTHEWS. Mr. Chairman, this is a little extraneous to the

specific subject matter, and I know that, perhaps, these gentlemen

cannot give me the specific answer, but I am particularly interested

in the disposal of more of our agricultural surplus. I believe it is

under title III, that disposition for charitable institutions is authorized.

Am I correct in saying that is title III?

Mr. DUNCAN. That is correct.

Mr. MATTHEWS. I have in mind in particular two institutions in

my district that are boys' ranches. They have been receiving some

surplus, but as I understand now, they are going to be able to get

more of a surplus. .

My question is, Is that true? In other words, could you gentlemen tell me whether you have all of the tools you need, the legislation

you need, to make more liberal distribution of these surplus foods to

these institutions already receiving them?

These boys' ranches, for example—a little extra handful of this

surplus food would take care of their needs. They have to go Out and
•

AMEND TITLE I OF PUBLIC LAW 480 27

beg for money and private contributions. It would mean so much,

I know, to them and to thousands and thousands of people in America,

if we make a more liberal distribution of the surpluses to those organizations and charitable institutions already authorized to receive

them by law.

So, again, my inquiry is, Could you tell me whether we are to

have a more liberal disposition of food under that title?

Mr. DUNCAN. We are. That happens to be in my department, too,

under the direct food distribution program. And we have all of the

necessary legislation. We have it right now to go forward.

Mr. MATTHEWS. You do not need any more legislative authority?

Mr. DUNCAN. No, sir. We do not.

Mr. MATTHEWS. I want to congratulate you particularly on that.

I think the American people would heartily approve of the liberalization of that program.

• Mr. DUNCAN. Thank you.

Mr. BELCHER. Mr. Secretary, I am a little concerned about the

comments in your statement here. We have been discussing these

huge surpluses in this committee for a long time and on the floor of

the House and in the newspapers.

And yet your statement seems to sound like you are not concerned

about them, that you view this as a great opportunity to feed the

people of this country and the people of the world. That might be a

fine welfare program, but every time, as I understand it, that we give

away or make grants of any of these surpluses, either abroad or here at

home, it is charged against agriculture.

Mr. DUNCAN. That is correct.

Mr. BELCHER. Then the newspapers can point to what it costs to

subsidize the farmers.

Mr. DUNCAN. Yes. •

Mr. BELCHER. It seems to me that you are welcoming these surpluses so that you will have an opportunity to use them in a welfare

, program because it states here, that this offers great opportunities to

feed the needy people of this country, particularly of the world.

Is this a welfare or a surplus disposal program?

Mr. DUNCAN. I view this food, not as a surplus, but as an abundance. And we can use this food and make it a blessing rather than

a burden on us.

I think that the greatest success story, as the Secretary stated,

not only of this country, but, also, of the world, is American agriculture.

I, also, want to say that we have confidence in this country. The

long fear that man has had is the fear of hunger and famine. And

I think that we are blessed in this country in being able to take this

food that we have on our hands and not leave it stored, not let it

become a burden, but use it to feed the needy people here in this

country, and also around the world.

Mr. BELCHER. All that starts with the American farmer and is

charged to him. The newspaper editors, when they point to $6

billion, $7 billion appropriations for the Agriculture Department, in

their minds, and in the minds, of the public, is the thought that this

money is used for the benefit of the American farmer; is it not?

Mr. DUNCAN. Yes, sir; it is charged up, of course, to Public Law

480 and is charged up to the agricultural budget.
28 AMEND TITLE I OF PUBLIC LAW 480

Mr. BELCHER. Is there anything that is appropriated for the

Department of Agriculture, technically, in the minds of the public,

that is not charged up to the American farmer? And make people

think that he is subsidized to that extent.

My understanding is that the Secretary complained the other

day about things being charged to the Department of Agriculture.

Mr. DUNCAN. That is true, and he has tried to improve public

relations.

Mr. BELCHER. In these grants, instead of the sale of these products

for currencies, are we not increasing the loss to the Department of

Agriculture and thereby causing more money to be appropriated and

more money to be charged to the farmer? Are we not going in the

wrong direction rather than in the right direction?

Mr. TETRO. Congressman Belcher, you have quite correctly stated

the accounting for this now is a charge against the farm programs.

And Secretary Freeman, as you said, has indicated that he would like

to give a different look to this if he could.

Insofar as the domestic program is concerned, we believe there is a

different attitude toward it, as Congressman Matthews has indicated.

So far as the program in general is concerned, it is now we think being

captured in the food for peace concept which has rather complicated

and manifold farm-policies-general-taxpayer aspects in it and this is

part of trying to make food for peace a living thing.

If the chairman will permit me to dream on it a little bit: The

original purpose of this act, sir, was to use our surpluses in agricultural

trade development and assistance, so that we could speed up the time

when there would be no more grants and giveaways but instead the

world would be in such a fine financial condition that we would be

selling more and more U.S. agricultural products at good prices for

cash.

I think this is still the longtime purpose of this particular effort.

And we had hoped, sir, that food for peace would be recognized as Et

general taxpayer burden and not just one that is attributed to agriculture, because there are these other aspects.

The CHAIRMAN. As Mr. Belcher points out, the public, generally,

charges up all of this to the farmer, to the farm program. And they

believe that this is because of the greediness of the farmer. I think

that all of you in the Department should do everything you possibly

can to see to it that it is regarded as a general program rather than

one for the farmer only.

Mr. TETRO. Well 

Mr. BELCHER. I would rather see the Department stick to the

original concept and that is, to dispose of our surplus products rather

than do it according to this statement:

In this capacity it offers us great opportunity to feed needy people in this

country, particularly in depressed areas and the rest of the world.

Mr. DUNCAN. Mr. Chairman, may I ask the Congressman- a

question?

The CHAIRMAN. Yes.

Mr. BELCHER. Yes.

Mr. DUNCAN. With all of this surplus food that we have, Mr. Congressman, is it that you do not want us to feed them, do I get that

correctly?
AMEND TITLE I OF PUBLIC LAW 480 29

Mr. BELCHER. No; I want somebody to pay for it besides the

farmer. I think the welfare department and the international policy

of this country is the concern of every person in America, not just a

few million farmers.

Under the theory that you are putting forward here, if the Department of Agriculture is going to be more concerned with foreign policy

and welfare than disposing of surplus commodities, then I think you

are getting out of your jurisdiction. I think you will take the jurisdiction of this program away from this committee.

Mr. HOEVEN. I would like to clarify one thing, Mr. Duncan. As

to the administrator for the food-for-peace program—is he under the

jurisdiction of the Department of State?

Mr. DUNCAN. Congressman, he is under the President.

Mr. HOEVEN. I believe he has an office in the State Department.

Mr. DUNCAN. Well, I think that is the executive offices. I would

say he had offices in the White House. They don't have 

Mr. HOEVEN. I am sure all members of the committee want to get

food to hungry mouths, but we do object to this vast program being

charged solely to the Agriculture Department, and turning Public Law

480 into a welfare program.

Mr. DUNCAN. Mr. Congressman 

Mr. HOEVEN. Someone should do a bookkeeping job. Some

phases of the program should be charged to the Department of

Health, Education, and Welfare, and others to the State Department.

Mr. DUNCAN. I think that the Secretary has made it clear that

he is concerned about this.

The CHAIRMAN. Mr. McIntire.

Mr. MCINTIRE. In Mr. Gathings' query, which was responded to

by Mr. Tetro, I think there was a request made there be put into this

record some tables showing some statistics in relation to these agreements or authorizations. I would be very much interested that this

table would show—so that the record would have the definite information, in view of the comments that $1.5 billion has been used—

what has been committed since the 1st of January. It would be

good if the record could show what has been used—whether your

records on that are on a monthly or yearly basis or whatever—

thereby giving a breakdown of the authorization and showing how it

has been running over the past couple of years or so, and how it has

been operating since the 1st of January. We could then get some

insight as to the acceleration which is your only justification for this

$2 billion figure right now.

And, also, if I understand correctly, the $1.5 billion is the amount

which you have committed of your total authorization since the

1st of January. It would be well if you could break this down to

show how many countries are involved, because you might have one

commitment that runs into a very substantial figure, one that will

not be repeated every 2 or 3 months. Could you give us some information as to the outstanding requirements, I mean, agreements under

negotiation as of the 1st of January, so that we could get some

idea of how much this buildup has been since the 1st of January?

Are you working out a backlog of agreements or are these new

agreements which have come in since the 1st of January?

I think we need that, for this matter of justifying $2 billion just

right off the cuff is not easy. And I think we need just such a break-
30 AMEND TITLE I OF PUBLIC LAW 480

down of the exact situation, far more so than just the request that

you will anticipate this much business.

If you can give some information as to your justification at this

moment in relation to the agreements now in some phases of negotiation, it would be helpful.

I do not think you would want to give a detailed program, for it

would not be appropriate to ask for that, but we do need something

of a record here that will give us some support for this total figure.

I presume it is appropriate for me to estimate that since this

program has been underway there has been about $11.8- billion used,

if my figures are correct.

Mr. O'LEARY. The title I authority is $9,250 million.

Mr. MCINTIRE. You are including in that some of 1961?

Mr. O'LEARY. The total authorized, under title I, is $9,250 million.

Mr. MCINTIRE. That is to date?

Mr. O'LEARY. Yes.

Mr. MCINTIRE. What is it to date?

Mr. O'LEARY. Pardon?

Mr. MCINTIRE. That is to date, as of today?

Mr. O'LEARY. Yes; the last authorization was 2 years ago. And

that brought the total authorized title I programing to $9,250 million.

Almost all of this has actually been programed.

Mr. MCINTIRE. Can you give me some comment relative to the

aspects of the program as of the moment that would justify the estimate that the authorizations should be substantially accelerated

above the authorizations contained in the previous authorizing

legislation?

In the Secretary's statement there was reference to the fact that

in 1957 some of the increase in exports was, in some degree prompted

by the Suez crisis. Mr. Secretary, you have, also, mentioned that

some of the additional exports will arise out of certain crop shortages

in various countries of the world.

What other aspects are there in the current situation which you

feel will justify a sum greater than you have had in the past?

I realize currently you have the crop shortages. But are there

other aspects in the current program which you feel will be the basis

of this type of authorization? Yesterday I read in the paper that

the food-for-peace program is to be based on about $2 billion a year.

I do not know what it is.

I would, also, like the Secretary to advise the committee as to what

is the framework of jurisdiction? I agree I am lost. I can read the

papers but this is about all I get. What is the framework of the

administrative jurisdiction of the food-for-peace program?

Certainly, that has not been information available to me as a

member of the committee.

Mr. DUNCAN. This was given 

Mr. GRANT (presiding). Do you want the question repeated?

[Laughter.]

Mr. DUNCAN. No. Let me say before Mr. Tetro starts, we will

give you the information you want. We will break it down for you

and furnish it to you.

(The information follows:)

The chronological listing and the information furnished on page 22 shows how

title I programing has been accelerated during fiscal years 1960 and 1961. By

far the biggest item is the 4-year Indian agreement signed on May 4, 1960. Item
AMEND TITLE I OF PUBLIC LAW 480 31

188 on page 3 of the listing represents the first year's financing of the 4-year agreement, or the amount of about $530 million at CCC cost. The balance of the

4-year agreement, or about $1.6 billion, is shown as the first item in calendar

year 1961. The grand total of the Indian agreement, $2.1 billion, is the principal

reason for the increased use of title I programing funds.

The total of agreements signed to date is about $9.1 billion which leaves a

balance of $150 million from the total title I funds authority of $9.25 billion.

We have requested an additional $2 billion authorization for programing for

the remainder of calendar year 1961. This amount represents our best estimate

as to programs that can be concluded during this period within the safeguards of

the act. It includes more than $1 billion in firm requests for programs received

from participating countries, including a very large 4-year agreement being discussed with the Government of Pakistan. It includes an additional several

hundred millions of dollars in contemplated programs based on preliminary discussions with participating governments. The relatively small remainder of the

$2 billion is made up of our estimate of requests we anticipate receiving in the

near future based on past programing experience, crop conditions abroad, and

the supply position of potential title I countries.

Mr. MCINTIRE. We want it for the record. Can you not outline

for me, Mr. Secretary, just briefly what the administration jurisdiction is here now? We are acquainted with Mr. McGovern. Many

of us are interested in the work that he is charged with doing. Can

you not tell us something of what is going on in this?

Mr. TETRO. I think, Mr. Chairman, Congressman McIntire is

asking three large questions.

The first is to provide some information in support of Mr. Gathings'

question, which we will be very happy to do. We can do it by months.

The second, what are some of the factors that have caused the sudden

increase?

We mentioned the one large multiyear agreement with India and

that we have had some difficulty in crops in certain parts of the world.

Mr. JOHNSON of Wisconsin. If you were on the old basis where

you were committed to it for a year, you would only be asking for

$500 million right now?

Mr. TETRO. That is about right; yes, sir.

There is one other aspect of the programs in the underdeveloped

countries. In India, for example, their own attempts to increase

agricultural production have not kept pace with the new demands of

their population, partly because of larger population and partly

because of the very modest increase in income which has increased

the demand for food and fiber products.

And, also, we had some agreements which previously were for 2 and

3 years which have now run out, so these countries are coming back

in again.

On the last question regarding the arrangements with the director

of food for peace, he is a Presidential assistant in the White House

and he operates under an Executive order which says that he shall

coordinate all programs affecting food for peace.

The concept of food for peace itself, I think, as you said before, is

changing somewhat and we hope it is changing in a way which will

show this is not just an agricultural burden, it is a countrywide

burden.

As to the operating arrangements to date, these are being worked

out. We have to do this through Mr. McGovern and other people

in the White House and the Secretary of Agriculture.

At present the operating responsibility for this kind of program

is clearly remaining with the Department of Agriculture. There is

a problem in foreign policy, generally, where food and other programs
32 AMEND TITLE I OF PUBLIC LAW 480

are a factor where the director of food for peace will be coordinating

this effort.

I think you recognize, too, from some of the comments earlier today

that as a program is developed, while we have the primary purpose of

developing the commodity part of an agreement, there is not always

complete harmony within government because other departments of

government have different interests from ours. There is, therefore,

a need on occasion to have a sort of referee or an umpire, which will

be Mr. McGovern.

Mr. MCINTIRE. That might be so. This has been an administrative vehicle in the past.

Have you not had coordination with the State Department and

other departments and all agreeing to the agreements which were

worked out?

Mr. TETRO. Yes, sir.

Mr. MCINTIRE. What is the difference now?

Mr. TETRO. The difference now is that we have a director of

food for peace who has no other function. As I said before, Mr.

Paarlberg, when he was economic adviser, also, was coordinator of

food for peace, but only beginning near the middle of last year.

This function of the last part of last year that Mr. Paarlberg had,

you are quite right, that is the same function that I was describing

that Mr. McGovern would now have, but he has added to these in

the sense of program development which I suggest he has not yet

fully explored or developed, in this arrangement within the Government. However, we still have the operating responsibility for

developing title I programs, for getting agreement on the programs

and for getting these out into a negotiating instrument to the State

Department to negotiate.

Mr. MCINTIRE. Then would it be fair to observe that Public Law

480 is one of the tools which Mr. McGovern has the responsibility

to implement in the context of food for peace?

Mr. TETRO. Yes.

Mr. MCINTIRE. To what extent, in the present concept administratively of the food for peace program, are commercial transactions,

outside of the context of Public Law 480, considered to be within

or without the framework of the food for peace programs? Are

they considered to be within it?

Mr. TETRO. Insofar as the commercial sales operations, I would

say the answer specifically would be "No". To the extent that an

all-out effort of using agriculture to improve our public relations

around the world- would be concerned, there may be some peripheral

advantage to this; in other words, Mr. McGovern has already, with

the Secretary, given us considerable encouragement to do more work

in the market development field, which is primarily aimed at commercial hard money sales.

He does not have, I would say, direct authority in coordinating

that kind of program.

Mr. MCINTIRE. Just one other question, Mr. Chairman. My

understanding of the poultry export is that it is a rather outstanding

example of what can be accomplished in market development; am

I correct?

Mr. TETRO. Yes, sir.
AMEND TITLE I OF PUBLIC LAW 480 33

Mr. MCINTIRE. And then after it was developed it went into a

strictly sale-for-cash transaction, strictly a commercial operation.

Do I understand now correctly that this policy here is changing and

that we are now to begin, if we have not already begun, to purchase

poultry to be shipped abroad under title I; and that internally, it is

a change of policy?

Mr. TETRO. Mr. Chairman, the assumption that Congressman

McIntire has made is correct. To use Germany as a case in point,

I think we salted that mine twice but now definitely it is on its own

and has been a substantially increased commercial outlet.

Mr. MCINTIRE. Through market development funds?

Mr. TETRO. We used a small title I_program to move some poultry

and then we used market development funds to further increase

sales to the market. This, in essence, is the same kind of concept

that we have in trying to move still more poultry in other areas.

As you know, poultry in this country is what is considered by the

home economist a good buy, whereas in most other countries in the

world it is almost a luxury item. We hope by combining a judicious

use of poultry in, perhaps, title I, or under some of the other programs of Public Law 480, to increase the availability of this kind of

food for other people—a cash market, eventually, which we hope to

share rather immediately because the United States is the outstanding

exporter of poultry products.

Mr. HAGEN. The State Department would be, ultimately, the

negotiator of these agreements, the final negotiator?

MT. TETRO. Yes, sir.

Mr. HAGEN. And on the question, we will say, whether 42 percent

is granted or 5 percent, would be a State Department decision; would

it not?

Mr. IOANES. It is fair to say that the State Department negotiates

these agreements as they negotiate all other agreements of any

executive branch of the Government.

The decision as to the currency use, which is what you are talking

about, we have a voice in making that decision.

Mr. HAGEN. Who makes the ultimate decision?

You may give advice but the State Department does; does it not?

Mr. IOANES. At the present time these programs are developed by

the Department of Agriculture. The programs are presented to an

interagency group, chaired by the Department of Agriculture, and it

is in this group that the decisions are made.

Mr. HAGEN. A majority vote decision in that group or what?

Does one person have the final decision or what?

Mr. IOANES. No; if there is no agreement, then the question would

be referred to the White House. This would be Mr. McGovern in

this case.

Mr. HAGEN. Outside of the cost of these commodities themselves,

the value of these commodities themselves, what additional costs

accrue that would have to be picked up, we will say, by appropriations?

Referring to the $2 billion authorization, what additional amounts

of money would be involved?

Mr. IOANES. In addition to the cost of the farm commodity?

Mr. HAGEN. Yes. We have that in storage.

Mr. IOANES. Well, it would be the cost of processing commodities

in certain instances—the cost of transportation.
34 AMEND TITLE I OF PUBLIC LAW 480

Mr. HAGEN. Do you have any idea what the bill would be in terms

of dollars in relation to the $2 billion?

Mr. O'LEARY. We computed this one time and the net new budget

impact of a $1.5 billion authorization was about $300 million.

The complexion of the program—this was a couple of years ago—

has changed a little, and I am not sure that the relationship would

be the same, but the net new cost, if you take into account that

many of the commodities are in current storage, or if they come out

of the free market and would not otherwise move they would come

in under the price-support program at the end of the loan year and

begin to accrue storage charges, the percentage of net additional

budget impact is small.

Mr. IOANES. It is about 20 percent, roughly 20 percent of the total.

And I should have added to what I said before: that the biggest

single item in this is the cost of ocean transportation, where the U.S.

Government bears the entire dollar cost of transportation on American

vessels.

Mr. HAGEN. You deduct the potential storage cost on the commodity?

Mr. O'LEARY. In the computation we made, we assumed that if the

commodities did not move out of storage, they would stay 3 more

years. Or if they moved out of the market, they would otherwise

have come into the price-support program and stayed in storage 3

years.

We came up—I cannot remember the percentage, but my recollection is that it was about $300 million as the new cost of $1.5 billion.

Mr. HAGEN. So you are in effect asking for $2.3 billion?

Mr. O'LEARY. No; the $300 million would be within the $1.5

billion—and of $1.5 billion authorization, $1.2 billion of that is already spent. Roughly $300 million is still to be spent as net new

costs under this program.

Mr. HAGEN. Thank you.

Mr. SHORT. I would like to pursue the point that Mr. Hagen

started a little bit further. I believe, Mr. Duncan, you said these

were Government contracts. Is that quite true? Do I not understand title I of Public Law 480 to be a vehicle whereby grain exports

move through commercial channels?

Mr. TETRO. The negotiation to get an agreement with other governments is what the State Department does. Once an agreement is

signed, then the handling of the purchase authorizations under that

agreement gets the actual movements into commercial channels.

Mr. SHORT. Let me ask you this question then: Is it not possible

for a commercial transaction to be shaped up, and if the recipient,

the foreign country and those in this country come to some agreement,

then is not about the only function of the Department under this law

to make the determination of whether the export subsidy that will be

necessary to pay is a proper one; in other words, that the grain companies are not offering for sale at a price below what it should be which

would automatically raise the amount of the export subsidy?

Mr. O'LEARY. May I speak to that, sir. The government-togovernment agreement is in the nature of an international treaty. It

is not under Public Law 480, because there are certain provisions in

the law which require the foreign government to agree, for example,

that commodities purchased under Public Law 480 will not increase
AMEND TITLE I OF PUBLIC LAW 480 35

the availability of commodities to countries unfriendly to the United.

States; that they will not reexport the commodities or products without permission of the United States; that they will assure that these

imports under Public Law 480 will not displace commercial marketings

that they would otherwise make.

You, therefore, must have a government-to-government agreement

because private trade cannot agree to these. But all sales under such

an agreement are made through private trade channels by the U.S.

private trade. The function of the Government is twofold:

First, to provide that the financing is made available through banking channels, so that private trade can function; and, second, to assure

that the Government funds are spent effectively and efficiently; in

other words, that the commodities which are shipped do represent

the contract prices set up in the negotiations between the seller anu

the buyer.

Mr. SHORT. The reason I asked that is I am told that the government-to-government transaction as a transaction is similar to the

method used by Canada in their export program which does actually

have the Government in the grain export business.

Mr. O'LEARY. Public Law 480 requires that private trade channels

shall be used.

Mr. SHORT. There is a considerable difference in the concept of a

government-to-government negotiation or government-to-government

transaction, as Canada carries it out, as compared to the way we carry

it out.

Just one more question—and I think this is important to get this

picture properly into the record. It relates to the cost in dollars of

this program. Perhaps we are asking an impossible question, asking

you to make an impossible projection, because, as I see it, it will be

impossible to make a determination as to whether or not all of these

exports will be drawn out of Commodity Credit stocks or a large

portion of them will just be picked up on the market as they move

in normal channels of trade.

Mr. O'LEARY. Such a large percentage of the program consists of

commodities which are in very abundant supply—such as wheat,

feed grains, cotton, edible oils—that it is pretty safe to make the

assumption that if a cargo of wheat were not exported under title I,

it would come into the possession of CCC, at the end of the loan year.

This same thing is true of cotton, although the cotton surplus is

not as large as it used to be. But, on the other hand, the programing

of cotton is not as large as it used to be.

So the question is not as large a question as it sounds when you

take into account that the bulk of the program does consist of these

commodities. And since the beginning of the program non-pricesupported commodities have amounted to less than one-half of 1 percent of the total program.

Mr. SHORT. The bulk of that is, to keep a proper picture of this

request that you are making, as to the effect that will have on the

actual drawing out of CCC stocks—it is conceivable to me that you

might have a very extensive export program going on under the

provisions of Public Law 480—and except for the amount of the

payment-in-kind for the export subsidy, you would not draw out of

CCC stocks 1 bushel.

MIMS
36 AMEND TITLE I OF PUBLIC LAW 480

Hon. HAROLD D. COOLEY,

Chairman, House Committee on Agriculture,

House Office Building, Washington, D.C.

DEAR MR. COOLEY: We shall greatly appreciate it if you will put in the record

of the hearings on the Public Law 480 program this letter supporting an authorization for additional funds under title I.

While we are not as directly concerned with title I as we are with other parts

of Public Law 480, we do, nevertheless, have a substantial interest in its continued and expanded use. Approximately $47 million had been committed for

exports of dairy products through December 31, 1960, and some 80 million

pounds of nonfat dry milk are expected to be programed from the •additional

$2 billion now under consideration.

Public Law 480 has proven its value as an instrument for moving agricultural

products out of CCC warehouses into useful consumption throughout the world.

The need for it still continues, and we support its expansion.

Sincerely,

E. M. NORTON, Secretary.

The CHAIRMAN. We stand adjourned at this time until tomorrow

morning.

(Whereupon, at 12 noon, the committee recessed, to reconvene in

executive session at 10 a.m., Thursday, March 16, 1961.)

Mr. O'LEARY. The payment-in-kind comes out of CCC stocks.

Mr. SHORT. That is right. I said except for the payment-in-kind,

you might not draw it out of CCC stocks.

Mr. O'LEARY. That is true, sir, except if you did not move the

2 bushels that go out from private stocks together with the 1 bushel

from CCC stocks for the payment-in-kind, if you did not move it this

year it would come into CCC stocks at the end of the year.

Mr. SHORT. Not necessarily. It might be beyond the point where

you could even put it into CCC stocks. A commercial grain concern

might have a few million bushels of grain on hand. They cannot put

grain into CCC stocks.

Mr. O'LEARY. I was thinking in terms of wheat being produced,

1.3 billion bushels, and CCC is going to wind up with a certain proportion of that in spite of anything unless it is moved out of the

country.

Mr. SHORT. Thank you.

The CHAIRMAN. Any further questions?

If not, at this time we thank you for coming here, and I hope that

you will provide for the record the information which has been

requested of you to provide.

We will adjourn until tomorrow morning at 10 o'clock, at which

time we will be in executive session to take final action on this bill.

And immediately following that, Mr. Gathings' subcommittee will

have some representatives in from the Immigration and Naturalization Service, and he wants to invite all of the members of the committee to attend his hearing in executive session.

(The following letter was submitted to the committee:)

NATIONAL MILK PRODUCERS FEDERATION,

Washington, D.C., March 28, 1961.

' \,‘ 0•••

NH AA