In other words, it is not in our opinion a revolving fund.

Mr. FORD. Would it be your recommendation that it should be a revolving fund?

Mr. WAUGH. Mr. Ford, I think this is tied in with the subject you mentioned a moment ago; namely, the proper handling of the foreign. currencies which the United States had acquired in one way or another. I think this Public Law 480 foreign currency is but a part of a very much larger overall picture.

Mr. FORD. Have you had enough experience with the Cooley amendment program to voice an opinion as to its soundness and its desirability?

Mr. WAUGH. We are just starting, and we have nothing very much in the way of experience, but I can say that it has been very well received in certain countries.

Mr. FORD. That is all, Mr. Chairman.

Mr. ROONEY. I believe that is all, if there are no further questions, and we wish to express our thanks to you, Mr. Waugh, and your associates, for a very interesting presentation. The committee will stand adjourned.

Mr. WAUGH. Thank you, Mr. Rooney, and gentlemen.

SUBCOMMITTEE ON DEPARTMENT OF AGRICULTURE AND RELATED AGENCIES APPROPRIATIONS

JAMIE L. WHITTEN, Mississippi, Chairman

FRED MARSHALL, Minnesota
WILLIAM H. NATCHER, Kentucky
ALFRED E. SANTANGELO, New York

H. CARL ANDERSEN, Minnesota
WALT HORAN, Washington
CHARLES W. VURSELL, Illinois

SOIL BANK PROGRAMS

ACREAGE RESERVE PROGRAM

WITNESSES

MARVIN L. McLAIN, ASSISTANT SECRETARY OF AGRICULTURE WALTER C. BERGER, ADMINISTRATOR, COMMODITY STABILIZATION SERVICE

ROBERT P. BEACH, ASSISTANT DEPUTY ADMINISTRATOR, OPERATIONS, COMMODITY STABILIZATION SERVICE

HOWARD J. DOGGETT, DIRECTOR, SOIL BANK DIVISION, COMMODITY STABILIZATION SERVICE

CHARLES L. GRANT, DIRECTOR OF FINANCE AND BUDGET OFFICER, DEPARTMENT OF AGRICULTURE

Mr. WHITTEN. The subcommittee will come to order. We are glad to have with us this afternoon Assistant Secretary McLain and his associates.

We have before us a supplemental request for $282,800,000 for the acreage reserve program. I would like to insert in the record the portion of page 12 in House Document No. 394 and the justifications. Following that, Mr. McLain, we would be glad to hear your state

ment.

Mr. McLAIN. Thank you, Mr. Chairman.

"For an additional amount for 'Acreage reserve program', $282,800,000; and the limitation under this head in the Department of Agriculture and Farm Credit Administration Appropriation Act, 1959, on the amount available for administrative expenses, is increased from $13,000,000' to '$20,600,000'."

Due to the heavy participation in the 1958 acreage reserve program, the Second Supplemental Appropriation Act, 1958, authorized an increase in the 1958 crop year acreage reserve program from $500 million to $750 million. Because of this increase, and since previous estimates were based on a program level below the $500 million authorized, this supplemental appropriation is nee essary to make payments to farmers during the fiscal year 1959.

Justification for supplemental estimate, fiscal year 1959, for acreage reserve program, soil bank programs

The Second Supplemental Appropriation Act, 1958, authorized a 1958 acreage reserve program of $750 million. This act was passed on March 28, 1958, after the 1959 budget had been transmitted to the Congress. The funds requested in the budget to pay producers who participated in this program were based on an authorized acreage reserve program of $500 million. The budget estimate anticipated that agreements under the 1958 program would reach only $485,600,000, or $14,400,000 less than the authorization. The estimate contemplated that $168,600,000 of program payments would be made from the 1958 appropriation. It provided for the balance of $317 million of program payments to be paid from the 1959 appropriation. Subsequent to transmission of the budget, an unexpectedly heavy signup developed for 1958 crops of cotton and corn. Applications for agreements from producers nearly reached a total of $750 million. In order to permit acceptance of such applications, the Congress in the Second Supplemental Appropriation Act increased the authorization to $750 million. The following table represents the variations in estimated requirements for the acreage reserve program due to the unanticipated heavy signup by producers:

27544-58

(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 authorization 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 supple mental 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.

Commodity and crop year

Commodity Stabilization Service--Acreage reserve program, 1956–58 crops

About July 1 to 27, 1956.
January to Mar. 8, 1957.
Jan. 13 to Feb. 20, 1958..

About July 1 to 27, 1956.
August to Oct. 5, 1957
Aug. 26 to Oct. 4, 1957..

$234, 630, 000

$198, 692, 723

79,997, 100

79, 997, 049

44, 739,889

44, 739, 889

33, 000, 000

32, 158, 803

27,704, 900

25, 163, 570

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