Analysis of status of statutory borrowing authorization, July 1956 through July 1958 (July-December 1957 actual; remaining months estimated) 1 Borrowing authority increased from $12,000,000,000 to $14,500,000,000 in August 1956. JUSTIFICATION OF THE ESTIMATES Mr. WHITTEN. If agreeable to the committee we will put into the record the pertinent portions of the justifications for the various supplemental requests. (The material is as follows:) AGRICULTURAL RESEARCH SERVICE Justification for supplemental estimate, fiscal year 1958, for repayments to Commodity Credit Corporation for advances for animal disease eradication activities, Agricultural Research Service NEED FOR INCREASE The Department of Agriculture and Farm Credit Administration Appropriation Act, 1958, appropriated $18,581,660 to reimburse Commodity Credit Corporation for authorized transfers through June 30, 1956 (including interest through June 30, 1957), to conduct the above two programs. The proposed supplemental estimate of $18,942,413 is to repay the Commodity Credit Corporation for funds advanced for these programs in fiscal year 1957. The amounts required, including estimated interest through March 31, 1958, are as follows: (1) For eradication of vesicular exanthema of swine.. (2) For brucellosis eradication___ Total Details of the programs are as follows: $1,393, 490 17, 548, 923 18, 942, 413 (1) Eradication of vesicular exanthema of swine, $1,393,490 Pursuant to authority contained in the Department of Agriculture and Farm Credit Administration Appropriation Act, 1957, which provided for the transfer from other appropriations or funds available to the bureaus, corporations, or agencies of the Department, of not to exceed $1,550,000 for eradication of vesicular exanthema of swine for 1957, indebtedness to Commodity Credit Corporation for the operation of this program was incurred as follows: Operating funds. Indemnity payments. Subtotal Unobligated balance forwarded to fiscal year 1957. Transferred from Commodity Credit Corporation. Unrestored balance, 1956 principal_ Estimated interest to Mar. 31, 1958. Total required for reimbursement to Commodity Credit (2) Accelerated brucellosis program, $17,548,923 1957 $1, 303, 240 52, 499 1, 355, 739 -50,000 +44, 261 1, 350, 000 1,307 42, 183 1, 393, 490 Section 204 (e) of title II of the Agricultural Act of 1954 (Public Law 690, approved August 28, 1954), as amended by Public Law 465, approved April 2, 1956, provided for the transfer of not to exceed $20 million for 1957 from funds available to the Commodity Credit Corporation to the appropriation "Salaries and expenses, Agricultural Research Service, plant and aniinal disease and pest control" for the operation of the accelerated brucellosis program. Pursuant to this authorization, indebtedness to Commodity Credit Corporation for the operation of this program was incurred as follows: Operating funds.... Indemnity payments. Subtotal Unrestored balance, 1956 principal. Estimated interest to Mar. 31, 1958. Appropriation or estimate required to reimburse Commodity AGRICULTURAL MARKETING SERVICE Justification for supplemental estimate, fiscal year 1958, for reimbursement to Commodity Credit Corporation for advances for grading and classing activities An increase of $1,139,982 is requested to reimburse Commodity Credit Corporation, including interest, for amounts advanced and used in fiscal year 1957 for inspecting and grading tobacco and classing cotton not placed under commodity loan. Normally, an estimate would be included in the 1959 budget for this repayment. However, the currently estimated volume of activity under the pricesupport programs is expected to require funds in excess of the CCC authorized borrowing authority unless this and other repayments are made before fiscal year 1959. The funds would be immediately paid to CCC as reimbursement for advances made in 1957 to inspect and grade tobacco and to class cotton not placed under CCC loan. The basis for the supplemental amount requested for 1958 is as follows: Estimated total number of classings by Federal employees. - Estimated total bales classed under Smith-Doxey Act going Advance from CCC.. Estimated cost of classing loan cotton (4,695,679 times 17.17 cents)-- Tobacco: To be repaid CCC__ Estimated total quantity of tobacco inspected and graded Estimated cost of tobacco inspection at designated markets. Advance from CCC.. Estimated cost of inspecting loan tobacco (15.89 percent of $2,189,452) _ 21, 189, 039 $3, 637, 644 17. 17 4, 695, 679 $1,900, 000 806, 249 1,093, 751 2, 207, 391, 000 $2, 189, 452 350, 766, 033 15. 89 To be repaid CCC... Total amount to be repaid: Cotton Tobacco... Total.. Interest $598, 500 347, 904 250, 596 1,093, 751 250, 596 1, 344, 347 45, 635 Total amount to be reimbursed to CCC.. Repaid from unobligated Marketing Services balances in 1957... Supplemental estimate, 1958.. 1,389, 982 250,000 1, 139, 982 Justification for supplemental estimate, fiscal year 1958, for reimbursemeni to Commodity Credit Corporation for costs incurred under soil-bank programs Public Law 540, approved May 28, 1956, authorized the Secretary to utilize the facilities, services, authorities, and funds of the Commodity Credit Corporation in carrying out the Soil Bank Act. The law authorized appropriations to be made for payment to the Corporation for costs incurred by it under this legislation through June 30, 1957. Such costs amounted to $567,500,000 through June 30, 1957, including interest through March 31, 1958, the anticipated date of reimbursement. The estimate is to cover costs incurred of $508,256,066 for the acreage reserve program, $36,764,014 for the conservation reserve program, and $22,479,920 for interest expense. Under normal procedures a request for an appropriation to reimburse the Commodity Credit Corporation for expenses incurred through June 30, 1957, would be included in the 1959 budget, and funds for this purpose would not become available before July 1, 1958, or enactment of the 1959 appropriation act for the Department of Agriculture. Until such time as the reimbursements are received by the Corporation, the amounts due remain as charges against the borrowing authority of the Corporation. This reduces the availability of borrowing authority to carry out the Corporation's primary function—its mandatory price support operations. On the basis of current estimates of program volume, it appears that the current borrowing authority of the Corporation may be inadequate before July 1, 1958. Hastening the appropriation to reimburse the Corporation for costs incurred to finance the soil-bank programs by a few months would assure availability of sufficient borrowing authority to conduct its mandatory price. support operations without requiring an increase in the present authorized $14.5 billion borrowing power. The proposed appropriation would be used to reimburse funds to the Corporation to cover all program payments, operating expenses, and interest thereon through March 31, 1958. The estimate provides funds to cover operating expenses and payments to producers in the fiscal year 1957 as well as some operating expenses incurred by the Commodity Stabilization Service in the fiscal year 1956 subsequent to enactment of the soil-bank legislation. The details of the requirements are shown on the table below. No provision was made in the regular fiscal year 1957 appropriation act for the soil-bank programs because (1) the soil-bank legislation was enacted just a few days before the appropriation act was passed, and (2) there was insufficient experience or data on which to develop even a tentative estimate of program requirements. Acreage reserve program.-The Soil Bank Act provides that producers be compensated for reducing acreages of certain basic commodities below their farmacreage allotments or farm-base acreage. As of June 30, 1957, a total of $477,161,076 was paid to producers consisting of $248,175,261 for the 1956 program and $228,985,815 for the 1957 program. In addition, operating expenses of the Commodity Stabilization Service, the Agricultural Stabilization and Conservation State and County Committees, the Office of the General Counsel, and the Office of Information amounted to $31,094,990. Total payments and operating expenses through June 30, 1957, were $508,256,066. Conservation reserve program.-The Soil Bank Act provides that producers be offered contracts providing annual payments of rent and a part of the cost of establishing and maintaining vegetative cover or water storage facilities, or other soil, water, wildlife or forest-conserving uses on certain designated acreage. As of June 30, 1957, a total of $25,394,973 was paid for program purposes, consisting of $11,778,890 for rental payments on 1956 and 1957 contracts, $6,768,464 for practice payments in 1956 and 1957 contracts, and $6,847,619 was advanced to States for expansion of nursery-production facilities, seed collection, and nursery operation. In addition, operating expenses of the Commodity Stabilization Service, the Agricultural Stabilization and Conservation State and County Committees, the Agricultural Conservation Program Service, the Soil Conserva |