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(The matter referred to above follows:)

Summary of funds authorized for ASCS operations under 1964 budget estimate

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1 Adjusted for comparability. Includes authorized transfers from CCC.

2 Budget estimate includes $5,000,000 anticipated supplemental. The supplemental actually submitted was $4,000,000.

3 Includes anticipated supplemental of $6,000,000.

4 Bracketed figures are not included in totals. They do not represent new obligational authority. NOTE. The above adjustments for funds made available to other agencies and received from other agencies include only those items which are shown separately in budget estimates. They do not include such items as payment to General Accounting Office for the CCC audit, payment to Treasury for issuing ACP checks, and numerous other transfers which are treated as payments in the budget.

Mr. WHITTEN. Thank you for a good presentation, Mr. Godfrey.

1964 BUDGET AMENDMENTS

Mr. GODFREY. I have one other document concerning the budget amendments to add for the record.

Mr. WHITTEN. We will be glad to have that for the record. And if the President's statement doesn't give a sufficient description of it you might enlarge on it.

(Document referred to follows:)

THE PRESIDENT,
The White House.

EXECUTIVE OFFICE OF THE PRESIDENT,
BUREAU OF THE BUDGET,
Washington, D.C., March 11, 1963.

SIR: I have the honor to submit herewith for your consideration amendments to the budget for the fiscal year 1964 involving decreases in the amount of $8 million in new obligational authority, and $2,225,000 in an administrative expense limitation, for the Department of Agriculture, as follows:

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This amendment reflects less participation than was expected last fall in that phase of the land-use adjustment program which provided for a 1-year extension of agreements on conservation reserve program contracts expiring on December 31, 1962.

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The above amendments would reduce the amount available for administrative expenses of the Commodity Credit Corporation. Since preparation of the 1964 budget, a reorganization of the Agricultural Stabilization and Conservation Service (the agency that administers the CCC programs) has been completed and three regional commodity offices have been closed. Savings resulting from the consolidation of offices and from increased employee productivity, offset in part by additional workload under the price support program, are expected to amount to $2,225,000. Average employment also is expected to be reduced by about 250 man-years.

I recommend that the foregoing amendments to the budget for the fiscal year 1964 be transmitted to the Congress.

Respectfully yours,

KERMIT GORDON, Director of the Bureau of the Budget.

Mr. GODFREY. This is a budget amendment for CCC administrative expenses and the land use adjustment program, reflecting a downward

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adjustment in each case, which may be unusual for an agency to propose. In CCC administrative expenses it reflects a decrease of $2,225,000. In the land use adjustment program it reflects a decrease of $8 million. This reduction in land use comes about as a result of the fact that all of the 1.4 million acres that came out of the conservation reserve were not signed up for the 1-year extension authorized by law. That is the reason for the $8 million reduction here.

But the $2,225,000 on CCC is a reduction of 249 man-years of employment, which results from the consolidation of offices and the improved workload per person.

We did insert for the record the status of employment relating to the Commodity Credit Corporation.

GENERAL EVALUATION OF FARM PROGRAMS

Mr. WHITTEN. That is fine. I commend you for making a very detailed and informative presentation of matters up to this point.

This committee is very much interested in the Agricultural Stabilization and Conservation Service. In actuality you are dealing with the body and soul of the Department's operating programs and with the biggest corporation, I presume, in the world.

I realize that through the years agriculture has, as has most every segment of our economy, from time to time been the subject of political discussions, charges and countercharges. I started serving on this subcommittee way back--I believe with Secretary Anderson. I served under Secretary Wickard, Brannan, Benson, and Secretary Freeman. I realize that these things are not always agreed upon, and that there have been differences of opinion, differences among farm groups, differences among Members of Congress, differences here, there, and yonder, and that the problem does not get solved.

I would presume that the matter of agriculture and its economic and financial health will never be solved for two or three reasons. One of them is that with a growing population, with the ups and downs of the economic well-being of the American people, all people, with the vagaries of weather and with the desire to have plentiful supplies, including adequate reserves which normally are on the market to depress prices, with a country as big as ours, all the way from Hawaii to the tip of Alaska, and all the way to the Maine coast and the tip of Florida, and with all the things involved, if we ever have a sufficient reserve to offset a year's disaster because of weather and all of that, you will always have more than enough the year that you have a good crop.

All of these things-I think anyone who would expect you, or before you Mr. Benson and his group, to solve this problem, would be expecting the impossible.

On the other hand, when the American people see that we are spending here about the same amount of money for everything in the Department as they want to spend each year to send a man to the moon, when we are spending probably 5 or 6 percent as much as we are spending for all these other activties of Government, I think that they could probably say that we have been operating agriculture successfully since 1933 in that it has not pulled down the other part of the economy. With all the programs and waste-and there has

been waste, and I am sure there still is waste, with as many things as we deal with people pay less and less percentage of their income than ever before for the best food. The consumers in the kitchen, the wives of the country, have gotten to where they have to put in less and less time because of this 14 percent of servicing that goes into the finished product which you buy in your average retail store, I am not trying to deliver a lecture here, but I think it is well for these comments to be in the record.

Then we come to this: in this discussion and in this operation, in spite of all the things that I have said, it still devolves upon us in this committee and you in your position to do the best we can to improve and to minimize waste and to improve quality and quantity and

all of that.

COMPARISON OF 1959-60 PROGRAMS WITH 1961-62 PROGRAMS FOR MAJOR COMMODITIES

So that the people through the discussions which take part in the political push and pull of the two parties, with some of us in my section able to criticize both, we might have the record developed here as to what the story is as a matter of record in some of the top spots. Mr. GODFREY. Yes, sir.

Mr. WHITTEN. I believe if you would put in the record the 2-year program on dairy products that preceded your 2 years, and the 2 years since, showing price support levels, production, CCC investment, plus any payment, including that for the milk program, and present supplies with that which was in being at the start. I think if you draw a line at when you took over what you found, and what you have now, it would help.

I would like to have the same type of thing for wheat, the same type of thing for cotton, for tobacco, peanuts, rice, feed grains. I want these separate where you have the name of the commodity. Then under it I want the information that I talked about. Then I want the changes that were made in the law.

But now for us to compare likes with likes under the preceding 2 years, I think you are entitled to point out the amount of money that was paid under the soil bank or the conservation reserve. I think the other side of this issue, should show the cash payments that you have made in your efforts to bring these things together.

I think any other information that you might have along that line would be appropriate.

I would like to take it commodity by commodity.

The reason for this, there is going to be lots of argument about this when we reach the floor with it, whether you have been able to do this or whether you haven't. The only answer is to show the figures. And, of course, you are entitled to high hopes for the future."

Mr. Benson, Mr. Freeman's predecessor, had high hopes that things would balance off. But always you had good weather or something that prevented it. This year some high hopes somebody had the other day ran into the fact that consumption had dropped off. So there is always the unexpected that hits us.

I think you get what I am talking about. We can discuss it further in trying to work out a true comparison for whatever it is worth with

Congress dealing with it and the people understanding it and going whichever way they want to.

(The additional information supplied follows:)

SUMMARY STATEMENT

The following tables dramatically contrast the results of agricultural programs for 1959 and 1960 with gains made under 1961 and 1962 programs. Realized net income of farmers during the fifties trended sharply downward, reaching low levels of about $11 billion in 1957 and 1959. In 1960, it was only fractionally higher. However, in 1961 and again in 1962, it reached levels that were fully $1 billion higher than those of 1960. Despite the gains of agriculture, food prices during 1961 and 1962 remained relatively stable and sharp reductions in the cost of ASCS programs are taking place.

During the 1950's the high costs of Government price support programs were born. Total budget expenditures for agriculture and agricultural resources rose to $6.5 billion in the 1959 fiscal year, after having been only $2.9 billion in 1953. Forty-three percent of those expenditures in 1959 were for price support and related programs. In 1962, expenditures for agriculture and agricultural resources were $6 billion, and only 34 percent were for price support and related programs.

The record of commodity programs and commodity legislation in the 1960's has been one of action-not of impasse. Because of this new factor, the record of the 1960's is one of increased net farm income, reduced surpluses and reduced inventories.

The actions of the Department which brought about market improvement in rural prosperity included an increase in the support levels of most agricultural commodities and inauguration of special feed grain and wheat programs. These were the commodities in which we have faced the most serious problems of oversupply and Government costs. They are the bellwethers of flexible commodity programs for better incomes, better agricultural markets, and reduced Government costs.

FEED GRAINS

The tables for feed grains and corn bring into sharp focus the contrast between the programs of the 1950's and those of the 1960's. Support prices in 1961 and 1962, as a percent of parity, are approximately 10 percent greater than for the previous 2 years. Returns to feed grain producers in 1961 were more than $700 million greater than in 1960, and in 1962 more than $900 million-increases of about 13 and 17 percent.

In both 1961 and 1962, production of feed grains has been less than consumption and exports. We actually began to use up stored surpluses. Carryout stocks were cut by almost 23.5 million tons-in contrast to increases in 1959 and 1960 of 17.2 million tons. CCC inventories were cut more than 15 million tons in 1961 and the total reduction in Government stocks of feed grains for the 2 years is expected to equal or exceed the reduction in total carryover stocks.

This reduction in CCC stocks is benefiting taxpayers. As a result of the greatly reduced cost of storage, handling, and interest costs stemming from the reduction in CCC's inventory, ultimate savings resulting from the 1961 and 1962 programs— after consideration of the cost of acreage diversion payments—is conservatively estimated at more than $1.2 billion.

Improvements during the last 2 years, shown in the table for corn, are of the same order as for feed grains as a whole.

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