Mr. MICHEL. Well, I can't say it any better than that, Mr. Ioanes. Now what does that represent in total dollars?

Mr. IOANES. Well, I could give a guess. I would say we are in the process of selling close to 100 million pounds and the return from those 100 million pounds will be in the neighborhood of $25 or $30 million, and compared with the domestic value, the difference is another $25 or $30 million.

BUTTER EXPORTS

Mr. MICHEL. Is this a marked increase in the export of butter?

Mr. IOANES. It is a fantastic increase. It is probably more than all of our exports of butter put together for years and years. Mr. LEROUX. Exports of 9 to 100 million pounds.

Mr. MICHEL. If you are selling it 50 percent cheaper than what it sells for domestically, it is understandable that some of these countries would be most anxious to buy it, isn't that true?

Mr. IOANES. It is partly true. The big reason Europe is buying this butter is because it has had successions of a bad winter, a year ago, and then it had a drought in some areas and too much rain in other. Mr. MICHEL. If that is the case, if it is in such demand, couldn't we get a better price for it?

Mr. IOANES. We have moved up our price some. But the price in Europe, for butter traded internationally, is a relatively low price by our standards. And the butter that has been sold by numerous other exporting countries in the limited free markets of the world has been in this range we are talking about.

So you have had a little appropriation from a rather low range. Butter is priced fairly cheaply in international markets, historically. In other words, our domestic price is always above the world-made price.

Mr. MICHEL. Where has this increase in the turkey exports been principally?

Mr. IOANES. Mostly to Western Europe, Italy, for example, which we are very gratified with. We are finally getting the Italian market open. But we are having good success with poultry in a lot of places. The major trouble we have is the Common Market, itself, but, even there, turkey has gone up a little.

CERTIFICATION OF PUBLIC LAW 480 COMMODITY ARRIVALS

Mr. MICHEL. Later on, in your testimony, where you address yourself to the tightening procedures, checking compliance, et cetera, you say, "For the countries mentioned in the report, all commodities have been accounted for." How about the commodities that aren't mentioned in that particular report? Are they accounted for?

Mr. IOANES. Yes, sir. What the GAO really said was your reporting system, your paperwork, is not up to date, and they didn't say commodities have gone astray. And what this report says is that we have taken the particular examples they pointed to, and we have not only brought up our paperwork to date, but we have gone to the countries to vertify that the commodities were received. We are in this position now for all areas-not just the one GAO called to our attention-but for all of the commodities, for all countries, of bring

ing all of our reports up to date and not only bringing them up to date, but of actually making certain the commodities were received in the

countries.

EXPORTS TO SOUTH VIETNAM

Mr. MICHEL. Has your shop sent any of these agricultural commodities to South Vietnam in the past year?

Mr. IOANES. Yes, sir.

Mr. MICHEL. About how much?

Mr. ESKILDSEN. Just a minute. I can give you a number on that. Vietnam, going back, for the whole period of time we have been doing business there, we have sold them commodities in the amount of $111 million at CCC cost, or $88 million in market value. There have been some fairly sizable programs there in the last few years, including a fair amount of dairy products.

Mr. MICHEL. Now are you talking about grain here?

Is that everything?

Mr. ESKILDSEN. That would be everything.

Mr. MICHEL. That is over a period of what time?

Mr. ESKILDSEN. From the beginning of the program in 1954, but many of these program in later years, the last few years. I don't believe I have, right here, a breakdown for the last year, but we could supply that for the record.

(The information requested follows:)

Quantity and value of commodities programed under title I, Public Law 480 agreements signed with Vietnam during calendar year 1963

Mr. IOANES. I would say those numbers are for the last 5 years. Mr. ESKILDSEN. Generally speaking, that is about right. Mr. MICHEL. I think the question was raised at one time whether or not those people got all that. Was that cleared up?

ARRIVAL CERTIFICATION PROCEDURES

Mr. IOANES. Yes; that is one of the countries we checked and we verified the commodities did go in. There were nine countries named in the GAO report, of which one was Vietnam, and investigators were sent from our office and the Inspector General's Office to Vietnam to investigate the arrival records in those countries and they advised us that all of the title I shipments were received.

Mr. MICHEL. Of course, after they once get there, you don't know for sure what happens to them; do you?

Mr. IOANES. For sure, well, we don't follow products all the way into stomachs, no; but we do have a pretty good knowledge of what happens to them; yes, sir.

Mr. MICHEL. Are your points of delivery to the Government or to private concerns?

Mr. IOANES. Basically, what we try to do is see to it it is delivered for use in the country and is put into the commercial stream. Then what we do is get certifications from the Government, which, in effect, say that they have a system of patroling borders to see that stuff doesn't go out.

This system is one that relies on the customs control of the country to see that they are used within the country. But we do not attempt to end-use audit the commodity once it has gotten into the commercial stream. I don't think it would be worth while for us to do it. We do spot check on distribution use in the country.

Mr. MICHEL. When you send grain to Vietnam or any place like that, and you follow this 50-percent-in-U.S.-bottoms rule, there is no prohibition on what flags make up the other 50 percent; is there?

Mr. IOANES. Only the restrictions that would come in with respect to certain countries of the world. There are certain countries of the world whose ships can't call at our ports. The Communist Chinese can't do it, for example.

But beyond that, the only other restriction would be with respect to the calling at Cuban ports. There have been restrictions with respect to the countries that, for a while, did not live up to our rules on trade with Cuba.

But, so far as I know, at the moment, these have all been sorted out. That is, the countries and the companies have either stopped trading with Cuba or decided not to call at our ports. So the answer to you is, with those two exceptions, when the other country pays for the ocean shipping, to carry their half of the program, they can select their own flag or somebody else's.

COOLEY LOAN PROGRAM

Mr. MICHEL. I am curious why, in your booklet entitled "Foreign Agriculture, Including Foreign Crops and Markets," under date of March 16, 1964, you have pictured a crawler tractor with a bulldozer on a road project on the front of this brochure.

Mr. IOANES. I think it means you make progress slowly, except when you mechanize. I really don't know.

Mr. MICHEL. I should say for the record that it is a Caterpillar tractor made in my hometown and I am glad to see it.

Mr. IOANES. You see it is going downhill slowly. I think we got the picture backwards. I think it is supposed to mean we are going uphill slowly.

Mr. MICHEL. In this area of Cooley loan funds, you have supplied for the record 15 applications that were reviewed by the Department. Mr. IOANES. Yes, sir.

Mr. MICHEL. I assume that you only get for review those applications that would come anywhere close to having some effect in the area of agriculture and its production, right?

ANES. That is true. We would get those that the people in uld consider would have some effect on molture, whether

c. because I note that you don't have any anphonations brazil. I was down there it. December and I know for a were approwing several or were in the process at approving 17 05′′ous those were not sent to not for any kind of review, NES. These I think we got it. estendar rear 1968 and were Ger that part of the law that says up to 25 percent of the lown rest be set aside for loans to Americar, businessmen, for arke development or economic development abroad. Perhars Brazil you are talking about came from, the loc gỗ loans. = 1 completely different thing.

MICHEL HOW would or be differentiated from el!

f is that part of the statute that says we want të sot pan of these funds for loans to American businessmer, or their Sabroad. It is in a narrow sense a way to get locs, eurrencies e hands of American businessmen. So control of these loans the hands, formerly of the Export-Import Bank and now nd preference is given to American invÉSTOTS.

TEEL. Oddly enough, of the several which I checked, one of the tractor company which I just mentioned. But obviously a completely different area than what you would be concerned ere, as to whether or not it had an effect, good or bad, on agri1 pursuits in this country.

AID ECONOMIC DEVELOPMENT ASSISTANCE

IOANES. Well, this particularly has two kinds of applications. will be referred to us, because of the claim that it will help the American farm products, and since this is our field of work, ants to know from us will it really do that. And then AID for a second kind of thing, where a man says, “I want to make estment in agriculture in the country," which won't compete ere we also comment; (g) is different. It is that part of the m where loans are made for economic development to the gov at of the country. And here it is a program which is largely stered in the field, on a country-by-country basis and there are rds for this program, too. In general the country directors are t to use the proceeds to aggravate any surplus problems. For le, not to use them to expand exports, let's say, of wheat or rice tries, because these are already in surplus, but use them in a illful way to feed hungry people, or to put them into diversified hat are in rather short supply.

MICHEL. Let's take the first one in Colombia which is produeanimal feeds. The advice of the Department was it would the U.S. grain market if we promoted the production of animal n Colombia.

lain that, if you will.

IOANES. Colombia is one of those countries of the world that airly good financial shape. Colombia has the possibility of takin her economic development and adding substantially to her pita income. If this occurs, it means that we are going to be able vert this entirely away from Public Law 480 to a cash market.

And since her consumption of livestock products is low, this means a market for such things as corn and meal. So I think what this says is that if an American firm, like Ralston-Purina, for example, were to go in with a mixed feed industry, the chances would be very good that we would sell them the ingredients for the industry.

Mr. MICHEL. Maybe I misunderstood the purpose of the applica tion. When they say "production of animal feeds," I assumedMr. IOANES. I am sorry. It should say "fced mixing."

Mr. MICHEL. Production, to me, means growing it. If they are going to grow it and we are going to try to sell them grain we are grow ing, then I can see the two competing. But its terminology is wrong. You mean "mixing" rather than "production." Why in the devil wouldn't that be called "mixing" instead of "production"? That is a large glaring error in terminology.

Mr. IOANES. Because I only asked for this to be done over the weekend and the man who did it, worked a good part of Saturday to get it ready for you. So, I will get it corrected. I am sure it is feed mixing.

Mr. MICHEL. That raises the question as to whether these other purposes are phony here.

Mr. IOANES. We did do these in a hurry. With your permission, I would like to take them back and go over them again.

Mr. MICHEL. Would you do that? Of course, I don't just want the titles changed. If they are really for production of animal feeds and you change the title and make it read "mixing" when it is really "production," we won't get that; will we?

(The revised table appears on p. 596.) Mr. IOANES. No; we won't do that.

BARTER AND STOCKPILING OPERATION

Mr. MICHEL. We have talked somewhat about barter agreements. Could you take me through the chronological steps of a barter agreement, or is that too lengthy, and, if so, could you supply it for the record? Who initiates this thing in the first place? (The information requested follows:)

STEPS TAKEN IN ARRANGING BARTER CONTRACTS

Although each barter arrangement differs in some respects from every other barter arrangement, the following is an outline of the principal steps which are taken in arranging most barter contracts. The principal kinds of barters are those under which payment is made in agricultural commodities for goods, equipment, and services being procured abroad for use overseas by the Department of Defense, similar procurements being made for the Agency for International Development, and procurement of foreign-produced strategic mate rials to be stockpiled. In addition, barters are sometimes undertaken to convert to barter existing dollar foreign procurement contracts entered into by Government agencies. Because of the difference in nature of each of these contracts, they are handled on a case-by-case basis.

I. Barter procurement for Department of Defense

Military procurements abroad are made on a decentralized basis.

A. Preliminary arrangements.-1. When a military procurement office overseas decides to procure items locally for use overseas, e.g. airplane parts, it notifies the USDA of the pending procurement describing the items to be procured, the dollar value, prospective source country, and delivery period.

2. USDA considers the barter possibilities and makes whatever interagency clearances are necessary. It then notifies the procurement office within 2 work