Mr. GRANT. Mr. Chairman, the table which you have just inserted in the record showing AID funds advanced to the Department in 1963 and estimated for 1964 and 1965 includes the estimates for the 1964 fiscal year as we had developed them a few weeks ago when the justifications were prepared. I have another table showing AID funds actually advanced this year to date which I will insert in the record at this point. (The table follows:) Allotment of Agency for International Development funds for fiscal year 1964 as of Mar. 16, 1964 Mr. WHITTEN. I realize you didn't write the budget, Mr. Drosdoff, but you make a very good statement about what all this means to other countries. Can you see any reason for us cutting down our attention to American agriculture by 448 man-years so as to allow us to do this! Is it worth that much? Mr. DROSDOFF. I don't think that is the intention. Unless there are special ceiling allocations, or unless AID provides the positions to do the jobs which they are requesting us to do, we won't be able to do it. Our policy is—and I think it is directed in the legislation—that the domestic programs are not to be handicapped by our participation in the oversea program. It is understood that, unless AID provides the funds and makes some special arrangements to get ceiling allocations for their overseas programs, which they are requesting, we just won't be able to meet these requests. Mr. WHITTEN. May I say, you make a very good statement for the work that you are engaged in, and you express your confidence and belief in it. Your background would indicate that you have had some opportunities and experience behind that belief. AID TO U.S. BUSINESS OVERSEAS In these hearings this year many disturbing things have developed. One is the tremendous amount of beef which we are importing, while we are buying beef under section 32, trying to keep the surplus that is on the market from depressing the price of the rest of it. In connection with that the committee has an investigation going now concerning this and the AID program. A reading of the AID pamphlet entitled "Aids to Business, Overseas Investment" will disclose that this agency will provide up to 50 percent of the cost of a U.S. citizen to go abroad just to look into the situation to see if he wants to go into business. Second, it shows that quite a number of agencies will make dollar loans to help this American citizen to go into business. One of those is AID. The others include the International Finance Corporation, the World Bank, the Inter-American Development Bank, and the Export-Import Bank. Third, AID will make local currency loans for the same purpose. Fourth, AID will guarantee against political risk and the inconvertibility of currency and expropriation. It will also guarantee against some business risks. Now we find that 448 man-years of the Department of Agriculture are going into problems of other countries and helping them over there. They are helping to get these countries on a good, clean, operating basis so that the American businessmen, with all these guarantees by the American Government, will have a good chance to make money. Then we keep the gates open so they can send some of this production back into the United States. We won't use section 22 which gives us the right to keep this production out. May I say that this committee had an investigation several years ago. In South and Central America the American Government was providing assistance in drainage, irrigation, protection against mosquitoes, while holding its own production off world markets, the same things you are talking about. At that time American financial interests were investing their money in South and Central America and Mexico. Now it is Brazil and other countries. We furnished 714 technicians to help American and foreign financial interests abroad produce for the world market with all these Government guarantees. I don't see how we could hope for American agriculture, even to stay prosperous under the conditions that our committee has developed. Do you? POLICY TO DISCOURAGE COMPETITION Mr. DROSDOFF. Perhaps due to the investigations of this committee, there have been some policy shifts bringing this question into sharper focus. In recent years there has been a lot more attention paid to agricultural development in these countries and the production of crops that would not be competitive with the United States, and that are not surplus on the world market. In 1959, and I think again in 1961, AID put out a policy statement in the manual orders, of which every oversea operating mission received a copy, which directed the mission to discourage any efforts on the part of the host country or in their technical assistance operation getting into the area where crops will be competitive or where there is surplus on the world market. As a result, we have had a little different reorientation in our technical assistance efforts. Previously, it must be admitted, perhaps enough attention wasn't given to this factor. It certainly is now. In those surplus crops we are not giving any encouragement or technical assistance effort. Mr. WHITTEN. I have had several letters recently. One of them had to do with a man who had been in Brazil and looked over the area. I would like to put one of the letters in the record at this point, together with the attached press article. The material referred to follows:) VICTORIA MERCANTILE CO., GENERAL MERCHANDISE, Victoria, Miss., January 29, 1964. Hon. JAMIE WHITTEN, House of Representatives, Washington, D.C. DEAR MR. WHITTEN: I see by the enclosed newspaper clipping that the Government is loaning money for cattle farmers to purchase land in Central America. I would appreciate your sending me any information you might have pertaining to this subject-such as, what countries are involved, living conditions, etc. Thank you. Very truly yours, HUGHEY JONES. [From the Commercial Appeal, Memphis, Tenn., Jan. 28, 1964] RANCHERS BRAND U.S. BEEF POLICY (By E. W. Kieckhefer, staff writer) LAKE VILLAGE, ARK., January 26.-Some of the cattlemen in this part of the delta have become so concerned about the drop in cattle prices and the increase in beef imports that they have gone to Central America to look into the situation there. N. V. Bunker, Jr., who operates a spread south of here that would be the envy of many a western rancher, came back from Central America just last week. "Everywhere we went down there they told us 'this is going to be cattle country,'" he says. Large numbers of cattle already are being processed into frozen beef in Central America and shipped to the United States in refrigerated ships. Indeed, the Ruth Ann, a converted small military ship operated now by Jesse Brent, of Greenville, Miss., across the river, has brought many loads of such beef up the river as far as Memphis. Mr. Bunker has reduced his cattle operations already from several thousand head to about 500 steers. His main operations now are crops. In traveling around Central America, he was told he could buy excellent grazing land for as little as $12 an acre (good land here costs as much as $250), get money from the U.S. Government to buy it outright, pay low interest on the money for 4 years and nothing on the capital until the fifth year. He also was told U.S. citizens who buy land or put up buildings in Central America are "insured" by the U.S. Government against loss of their investment through seizure by the Central Americans. "It's no wonder they can produce cheap beef down there and ship it into the United States," says Bill Elliott, former Texas Christian University football player who now ranches in Arkansas. Mr. Elliott operates the ranch with his father-in-law, Jesse Myatt. Mr. Myatt was reared in Hickman County, Tenn., but moved to Texas as a young man. He is 75 and has been handling cattle since he was big enough to hold a hatchet to crack corn. He still has ranching operations in Texas, so he knows the cattle business in both areas. "Our ranchers and feeders just can't live with this sort of market and this competition from foreign beef that is pushing our cattle prices down," says Mr. Myatt. "Why, down in Texas the taxes on our land now are higher than the lease price on the land used to be." Mr. Myatt has survived many ups and downs in ranching, including the depression of the 1930's, but he says he doubts that he will stay in business very long if there are no signs of relief from the present situation. "We are not making 2 percent on our investment now." He says he could do much better if he sold out and invested his money in tax-free bonds. Some ranchers and farmers already have done that. With feed costs too high in relation to the cattle prices, the cattlemen have been trying to figure rations that will be cheap enough and yet will hold their cattle. But they say it still costs them about 80 cents a day to feed a cow and Mr. Myatt says "you can't afford six bits." Land costs in this area have shot up in recent years, too, largely due to farmers coming in from other States after selling their land for subdivision or other high-priced uses. But Mr. Elliott says he believes land prices will have to break before long unless the cattle market improves. "They say if you can't figure on paper how to make a piece of land pay, don't try it on the land," he said. "Well, with these land and cattle prices and interest rates, I can't figure it on paper." George Shepherd, who manages a large cattle operation south of here for a Texas owner, said he had last sold calves from his herd in June. Ordinarily he would have sold about 1,000 calves from one unit of that operation, but he has sold only about 300, holding the rest in hopes of market improvements that have not come. Cattlemen throughout the Delta seem to be in agreement that some restrictions on imports of cheap beef from Australia, New Zealand, and Central America would ease their situation, but they are bitter because they feel the administration in Washington has been ignoring their situation. Mr. WHITTEN. Let's get this down to homely illustrations. We go around the world, and every area that is not self-sufficient in food and fiber we, through AID, make them self-sufficient. We are dependent for a third of our markets on exports. We haven't put anybody in the export business but we have made them all self-sufficient. What happens to the export market for our products? What is tragic about this is that our Government should also make this attractive to the financial interest of Americans. I think American agriculture can compete with any foreign group, even though the foreigners have cheap labor. But American agriculture can't compete with other Americans, with all of their know-how, all of these guarantees, and cheap labor. Mr. MURPHY. Might I comment on that, Mr. Chairman? DEVELOPMENT OF TRADE POTENTIAL OVERSEAS Mr. MURPHY. I don't think it is necessarily true that by helping economic development in these foreign countries, and helping agricultural production in these foreign countries, that we close them out as markets for American agricultural exports. I don't have the material with me today, but yesterday, when the Foreign Agricultural Service people were here, I believe they gave us a number of examples of countries where we formerly had provided foreign aid. I expect, although I am not sure, some agricultural aid was involved in the case of Greece and in the case of Spain. These countries have subsequently become much larger markets for American agricultural exports than they ever were before. I think it is perfectly true that if foreign aid is to be made to work in this fashion, that it needs to be administered with great care, and that it is perfectly possible to administer it in such fashion that it does, instead of contributing addi |