1 Marketing year beginning Apr. 1, unless otherwise indicated.

* Changes effective Sept. 17, 1960, and Mar. 10, 1961.

* Includes special and military milk programs; regular military procurement, and shipments to territories. Includes domestic distribution by Commodity Credit Corporation and sec. 32 for school lunch and welfare programs.

Less than 500,000 pounds.

Inventories as of Mar. 13, 1963.

For fiscal years ending June 30.

Purchase and other costs (processing, repackaging, transportation, storage and handling), less proceed from sales. Excludes Government costs of activities under titles I and II of Public Law 480. Estimated as of March 1963.

CONSERVATION RESERVE PAYMENTS, 1959-62

In 1959 and 1960 contracts were signed under the conservation reserve program to withdraw land from production for a period up to 10 years. Although no additional contracts were signed in 1961 and 1962, the cost of this program continued, since existing term contracts remained in effect. Payments in 1959 and 1960 totaled $692 million. Although these amounts declined during the first 2 years of this administration, $638 million was required to meet commitments of earlier years.

By 1960 nearly 29 million acres were under contract, and yet surplus stocks continued to increase. In this 2-year period feed grain stocks increased more than 17 million tons and wheat stocks increased about 116 million bushels. In marked contrast were the declines in stocks during the 2 years 1961 and 1962: Feed grains, more than 23 million tons; and wheat, 186 million bushels. Conservation reserve payments for calendar years 1959-62 are shown below: [Millions of dollars]

NOTE. For putting land into the conservation reserve, 2 types of payment were provided: (1) An annual rental payment to compensate for the loss of income the acreage would otherwise produce, and (2) a cost-share, practice payment to assist in establishing an approved conservation use on the land.

USE OF AMERICAN SHIPS FOR PUBLIC LAW 480 SHIPMENTS

Mr. WHITTEN. Now, turning to one other thing, I have had several folks ask me why it is that the Department of Agriculture, with our international problem of dollar exchange, does not use American ships to ship all of these commodities abroad. It is the law, as I understand it, that you must use at least 50 percent American ships.

I realize that this is in the area of overall Government policy. Could you provide for the record how much cash has been paid out to foreign shipping to move these commodities from the Department of Agriculture?

Mr. GODFREY. We may have that with us. If we don't have, we can provide it for the record.

Mr. WHITTEN. Over a reasonable period of time.

Mr. BEACH. What period would you like covered?

Mr. WHITTEN. For about 8 or 10 years. There is no need of you doing a lot of work. We will take what you have that is readily

accessible.

Mr. BEACH. Total ocean freight paid through December 31, 1962, since the inception of the title I, Public Law 480, program is $548,131,227.

Mr. WHITTEN. When you say "inception," what is the date of that? Mr. BEACH. 1954. I do not have the breakdown between how much of that is represented by foreign ships and how much domestic. That we can furnish.

Mr. WHITTEN. Please do.

(The material requested follows:)

Ocean transportation paid and tonnage booked under Public Law 480

1 Since Oct. 31, 1956, full cost of shipments on foreign flag carriers financed by foreign importers or governments.

Mr. WHITTEN. Is the determination as to the method or means of shipment made by the Department. Is it paid out of your funds, or do you get repayment?

Mr. BEACH. No, sir. We finance that out of CCC funds. That is reimbursed to CCC as part of the foreign assistance program cost. Mr. WHITTEN. To the degree that you pay out these dollars, to that degree our dollar balances are affected.

Mr. BEACH. That's correct.

Mr. HORAN. I believe, Mr. Chairman, at that point, that the Commodity is not reimbursed, the value of the commodity that enters into the foreign aid program is not reimbursed.

Mr. WHITTEN. The freight is not, either.

Mr. BEACH. We are talking about title I sales for foreign currency. Mr. WHITTEN. The freight is not refunded.

Mr. HORAN. We have already raised the point that this certainly should be added to the cost of foreign aid and should be

Mr. WHITTEN. In the public mind it should be charged up to it because it is a part of it.

Mr. Beach, in answer to my question, made the point that the Commodity Credit Corporation pays this in cash and gets no refund from any source.

95910-63-pt. 3- -44

Mr. HORAN. It is not even mentioned as an item when we have the foreign aid assistance bill before us.

Mr. BEACH. It is in the appropriation for foreign assistance in this budget.

STORAGE FACILITIES

Mr. WHITTEN. Mr. Godfrey, in connection with our responsibility on this committee we have had our own investigations. And regularly the Comptroller General of the United States makes a check of the activities of the Commodity Credit Corporation in the discharge of his responsibilities.

Copies of those investigations are sent to the Speaker and to the respective committees of the Congress.

Recently I attended the public hearing, as you will recall, when you were dealing with the matter of storage. I was requested to attend, I presume by fully a thousand people scattered over the whole southern area. I pointed out two or three basic things with which you and I are familiar, but many people who don't deal with it are not familiar. They are that, with a few very limited exceptions, the price support program for which the Commodity Credit Corporation was created is contingent upon having available warehousing which has been approved by the Corporation.

In order to have storage available, the Corporation beginning way back in 1949, I believe, spent something like $200 million building warehouses. This was largely in the corn, feed grain, wheat area, so as to have local storage available to enable the farmer to get the loan which the law provided for him.

I believe that the record shows further that about $193 million had been loaned by the preceding administration for the same purpose, all in order to keep the production in the area of production. This has been the main issue in a presidential race or two, as to whether it was available. To have it available in the community in the hopes it would be redeemed from the loan, the chances of that happening would be greatly enhanced.

In the statement I made at this big public meeting, I quoted from Attorney General's report of January 31, 1963, as follows:

It is CCC's policy to retain acquired cotton and cotton collateral to outstanding price-support loans in the growing areas as long as possible in order to avoid transportation costs and to encourage repayments of loans and redemptions of the cotton.

Under this policy storage facilities in the growing areas sometimes become congested and CCC finds it necessary to move or reconcentrate cotton out of the growing areas in order to make warehouse space available for the oncoming crop.

I mention this because at times we have tried to hold the Government down on spending money on building warehouses if they could prevail on getting others to do it, and on making loans if private persons could do it. In the cotton industry the private industry has provided this warehousing.

That being true, the Government has a very firm interest, in my opinion, in seeing that reasonable rates are paid. That is for the Department to work out with the folks involved, so as to see that it is kept available so that the Government won't have to build it.

You can easily see that at the local level favoritism can never be charged to the Department, because the grower carries his cotton

to the designated place to obtain the loan, all the time it being a warehouse you have approved. It is when you get out of the area of production that you have to watch so as not to be accused of favoritism. In that area I can see that you would have to have some degree of competitiveness or something so as to prevent the charge of favoritism. But you agree that at the local level the producer himself selects his warehouse and for that reason it is a matter beyond your control and no one can accuse you in that instance.

Mr. GODFREY. That is right.

Mr. WHITTEN. I would hope that you could get this matter resolved at an early date. It has greatly upset, as you can imagine, all the people in the area.

At this point I am greatly interested in all of the operations of the Department. I have tried through the years to develop for the record all of these things. Cotton happens to figure a little more prominently in much of my area than the others.

THE GAO REPORT AND CORRECTIVE ACTION TAKEN

May I say that inferentially the General Accounting Office approved this policy that I stated, because they found no complaint with it. I would like to have you for the record point out those places in dealing with cotton where the Comptroller General has found fault, giving the dates and the action that has been taken by the Department to correct those things.

I have not read all of the GAŎ report, but you have it. In my own reading of it, many of the practices and policies complained about are no longer carried on, so the Comptroller General has said.

I would want the actions, if any, the Department has taken and what may be pending, if anything, to bring about the correction of those that happened in the past.

Could you do that?

Mr. GODFREY. Yes, sir.

To start with, the first main criticism that we received from the Comptroller General was in regard to the operation of the 1959 and 1960 cotton purchase programs.

Mr. WHITTEN. I have it in front of me. I think much of what you have done has been made a matter of record. Be sure the record is complete.

Mr. GODFREY. This will suit us.

Mr. WHITTEN. Others may want to go into it further. I am familiar with the findings and the actions.

Mr. GODFREY. We will submit a chronology of everything that has happened, and what criticism has taken place.