(1) The increase of $275,200,000 for program purposes is necessary to complete payments to producers participating in the expanded 1958 acreage reserve program. Based on preliminary reports as of May 9, 1958, it is estimated that a total of $697,861,076 will be paid to producers on the 1958 program. The regular 1959 appropriation bill provides $317 million for payments on the 1958 program. It is estimated that $105,661,076 will be paid to producers on the 1958 program from the 1958 appropriation. The balance required is therefore $275,200,000. The amount of $105,661,076 estimated to be paid from the 1958 appropriation represents an increase over previous estimates. It reflects our judgment that due to noncompliance, cancellations, and adjustments, actual compensation paid will be $11,362,982 less than the maximum compensation under signed agreements for the 1956 program and $3,838,570 less than the maximum compensation under signed agreements for the 1957 program. These amounts may therefore be applied to payments for the 1958 program.

The 1959 budget estimate for this program was based on payments required under a $500 million program for 1958 crops as authorized in the 1958 Appropriation Act, and reflected an anticipated short fall signup under this program. The Second Supplemental Appropriation Act, 1958 increased the 1958 program anthorization to $750 million because of the heavy participation on cotton and corn which materialized. Because this act was passed late in March 1958, it was not possible to provide for the additional requirements in the regular budget. Under current procedures, program funds are advanced to the Commodity Credit Corporation periodically in amounts estimated to be required to cover negotiable certificates to be issued to producers by ASC county offices. Funds advanced are expenditures under the appropriation "Acreage reserve program." Allocations are issued to ASC offices limiting the issuance of certificates to amounts advanced to the Corporation. For various reasons ASC offices may not be able to issue, before June 30, 1958, certificates equal to allocations. If amounts equal to such unused allocations were withdrawn from the Corporation and returned to the appropriation, this proposed supplemental appropriation would probably be inadequate. In order to keep the amount of the supplemental to the minimum, it is therefore necessary that funds advanced to CCC in the fiscal year 1958 in excess of negotiable certificates issued through June 30, 1958, be retained by the Corporation to cover certificates issued in the fiscal year 1959. Similar procedures will be followed with regard to the conservation reserve program.

Attached is a table summarizing participation in and payments required under the 1956, 1957, and 1958 acreage reserve programs.

2899558--11

1 Through May 9, 1958, for 1958 crops planted in the spring of 1958.

Estimated breakdown between spring and winter wheat.

(2) The increase of $7,600,000 above the $13 million for all operating expenses provided in the budget is proposed for use by ASC county committees. The need arises primarily from the additional performance checking which will be required in the fiscal year 1959 to determine eligibility of the larger number of individual producers participating in and receiving payments under the expanded program, as compared with the number anticipated in the budget. The original estimate provided funds for checking performance on 438,260 farms and making payments to 575,000 farmers in the fiscal year 1959. Current estimates are that 936,500 farms will need to be measured and 975,000 payments made in the fiscal year 1959, or about double the original workload estimated. ASC county offices are being directed to make payments on 1958 agreements promptly on determination of performance.

The Conference Report No. 682, 85th Congress, 1st session, on the 1958 appropriation bill stated the opinion of the conferees that all payments under 1958 acreage reserve contracts should be made on or before September 15, 1958. Since the bulk of performance work will have to be done early in the fiscal year 1959, not only on the acreage reserve program, but also to complete performance work on acreage allotment and marketing quota programs, county committees will be hard pressed to do all the necessary work in the time allotted. It is expected that substantially all of the payments required will be made before September 30. Payments, of course, cannot be made where matters of compliance are not finally determined or are in an appeal stage or where violation proceedings may be involved. Experience to date does not indicate that there should be many such cases.

With the increased operating funds of $250,000 made available in the Second Supplemental Appropriation Act, 1958, and the funds contained in the regular 1958 appropriation, a special effort is being made by ASC county committees to carry out the maximum amount of work possible in the 1958 program prior to June 30, 1958. Except for winter wheat crops, it is not expected, however, that significant amounts of 1958 crops can be checked or producers' eligibility determined very far in advance of June 30. The late spring has delayed planting in many areas well beyond the normal period for such activity.

GENERAL STATEMENT

Mr. McLAIN. Mr. Chairman and members of the committee, the supplemental budget estimate before you requests an additional $282,800,000 for the 1958 acreage reserve program.

Total payments to be made on the 1958 budget program in accordance with the latest reports of participation are now estimated at $696,061,076, of which $590,400,000 will be required to be paid from 1959 appropriations.

This revised esimate is $1,800,000 less than the estimate originally submitted to the committee and the estimate submitted to the House. This comes about because we tried to bring this right up to date so that we have the most accurate figure.

Of course, as you know, these payments will have to be made, according to the request of the Appropriations Committees, within the next 4 to 6 weeks.

Therefore, the supplemental appropriation requirements are reduced to $273,400,000 for program payments and $7,600,000 for ASC county committees, making a total revised estimate of $281 million, as compared to the $282,800,000.

EFFECT OF HOUSE REDUCTION

The House Appropriations Committee bill reduced the estimate to $275 million, providing $270,500,000 for program payments and $4,500,000 for ASC county committees.

The amount provided for program payments is $2,900,000 below the Department's latest estimates of its commitments to participants

in the program. The House committee, in its report, stated that it stands ready to recommend any additional funds necessary to meet all obligations.

In fairness to the House Appropriations Committee I think we ought to say that, of course, we appeared before them about 5 weeks ago so the latest information was not available then.

The conference report on the 1958 appropriations requested that payments should be completed by September 15, 1958, and the Department is attempting to do so.

Because of the short period involved, it will be almost impossible to obtain funds by another supplemental appropriation in time to make payments as planned.

If the reduction in program payments recommended by the House committee is allowed to stand, there will almost certainly be some counties in some States which will not be able to issue certificates for payment to all eligible farmers. This will certainly result in dissatisfaction by those who cannot be paid promptly.

EFFECT OF INCREASED PROGRAM AUTHORIZATION ON ADMINISTRATIVE EXPENSES

The 1959 appropriation provided $8,419,000 for the operation of the ASC county committees. This amount was based on a 1958 program of less than $500 million.

Under the expanded program the workload has more than doubled. As an example, the number of farms on which performance is to be determined in the fiscal year 1959 increased from 438.260 to 936.500. Based on the increased workload, the $7.600,000 requested for ASC county committees is the minimum we estimate is required for them to carry out their functions.

Of course, as you know, this has come about because of the added $250 million program authorized which brought our total authorization up to $750 million.

RESTORATION REQUESTED

It is, therefore, strongly recommended that $2,900,000 of the reduction in program payments made by the Honse committee be restored and that the full amount of the $7,600.000 for the expenses of the ASC county committees be allowed, so that payments can be made promptly as planned without the further delays which would be necessary if another supplemental appropriation were to be requested.

A tabular presentation of these figures was shown in the letter of July 22, 1958, from the Acting Secretary to the chairman of this committee, which I understand has been inserted in the record.

(The information referred to appears on p. 139.)

URGENT NEED OF FUNDS TO COMPLETE PAYMENTS

Mr. Chairman, reports from our field offices indicate that they are now, or soon will be, in a position to make payments to most of the participants in the next 4 weeks.

Unless this appropriation is made shortly, there will be many cases of delayed payments.

We will, therefore, appreciate any special attention that you may give to taking action on this request as soon as possible.