HAIL SUPPRESSION

Mr. WHITTEN. Indicate the scope of the study on hail suppression being conducted for the National Science Foundation.

Dr. WEST. The study, "Economic and Institutional Considerations of Suppressing Hail," is a 3-year study. It was undertaken in 1971 at the request of the National Science Foundation which is providing $175,000 for the project. The study will develop information about the economic effect of hail on crop producers and the economic consequences of reducing crop losses by hail suppression. Objectives of the study are to estimate crop losses from hail, by crop and by county, for selected regions of the United States; analyze shifts in crop production that might be induced by hail suppression; compare hail insurance and hail suppression as they affect farm capital growth; and evaluate alternative arrangements for operating hail suppression systems.

ORGANIZATION AND STAFFING

Mr. WHITTEN. Describe your organization and staffing. How many Ph. D.'s do you have?

Dr. WEST. The Economic Research Service is divided into seven divisions with each focusing on a major subject matter area. For example, all rural development research is carried out by our Economic Development Division; all research dealing with the marketing of agricultural products is carried out by our Marketing Economics Division. The former Foreign Economic Development Service is now an ERS division and is called the Foreign Development Division.

Each of our divisions is further divided into branches. These represent subdivisions of the major area of research. For example, the Economic Development Division is divided into the Human Resources Branch, Area Analysis Branch and Community Facilities Branch. Each branch is responsible for administering a number of specific research projects which relate to their particular mission or objective. I will provide for the record our organizational chart and staffing pattern for each of our divisions including the number of Ph. D.'s. (The information follows:)

STAFFING PATTERN FOR THE ECONOMIC RESEARCH SERVICES, MARCH 1972

Mr. WHITTEN. May I say again I appreciate your presentation and I appreciate the way in which you have conducted yourself.

EFFECT OF GREAT BRITAIN'S ENTRY INTO THE EEC

Mr. NATCHER. As you know the exports, agricultural commodities assisted us considerably this past year as far as deficit and balance of payments are concerned. I believe according to the figures it saved us probably an additional billion as far as deficits of payments is concerned.

Now as you know, Great Britain joins the European Common Market on January 1, 1973. This in turn will probably bring in several other countries. I believe they have had a hearing on the Senate side, and I know, Dr. Paarlberg, that some of your people have testified before this subcommittee. This to me is a right important matter, because our exports of agricultural commodities has not only been good for the American farmer, but it has been good for the country as a whole.

Now do you see any change as far as the new fiscal year is concerned, 1973, or the future generally in what has taken place in the European Common Market?

Dr. WEST. There is no question but that the United Kingdom going into the Common Market is going to have a limiting effect on our exports. We are going to be able to ship less grain to the United Kingdom. Also the grain price is going to go up in the United Kingdom, so there is going to be a lower level of consumption because of higher price.

They will come under the system of the Common Market. The other members of the Common Market are going to have free access to that market, which we will not. So there is no question but that United Kingdom going into the Common Market is going to hurt our exports to that country.

Mr. NATCHER. As far as your statistics on world trade are concerned, this probably will show more in fiscal year 1973 than it has during the past 2 or 3 years, is that a fair statement?

Dr. WEST. Well, they do not really go in until I guess, when? Mr. NATCHER. January 1, 1973.

Dr. WEST. Yes. So it will show up after that. Although it has been expected that our exports would fall off about $400 million this year from $7.8 billion last year-although more recent estimates show that we might stay up close to $7.8 billion this fiscal year. A recent evaluation showed high export levels in January.

Mr. NATCHER. This $7.8 billion, is this cash?

Dr. WEST. No.

Mr. NATCHER. Any part of this ever been cash?

Dr. WEST. This includes Public Law 480.

Mr. NATCHER. How much would that total, a little over a billion? Dr. WEST. Roughly a billion.

Mr. NATCHER. So far as money is concerned and the export of agricultural commodities, you might say something like $6.8 billion then instead of $7.8 billion?

Dr. WEST. As far as commercial sales.

WORKING RELATIONS WITH THE STATE DEPARTMENT

Mr. NATCHER. Dr. Paarlberg, from time to time we inquire on this committee as to the relationship between the Department of Agriculture and the State Department. You know here is a place where complete cooperation will play an essential part, I think, in the future as far as exporting of agricultural commodities is concerned.

Dr. PAARLBERG. I think cooperation between the two agencies is improving. There was a time, years ago, when they fought over almost every transaction.

Now the State Department is aware of the fact that these special shipments of farm products can aid American foreign policy overseas, and there are times when they come to us and ask us if we cannot generate movement of a commodity to some particular area.

So while we still have our differences, they are much less than they used to be.

Mr. NATCHER. Dr. Paarlberg, I voted against aid appropriation bills now for about 5 years. One of the main reasons why I reached that point is just exactly what is happening to the American farmer as far as trade is concerned. I know that trade must be free, but at the same time, Dr. Paarlberg, fair. It must be fair. I do not think there is any question about that.

So when you say yes to every request through the State Department, when you know what is happening in agriculture, I think that is a mistake. Right here now, as far as export of agricultural commodities is concerned, I think this is a place where the State Department should follow it right carefully and work in full conjunction with the Department of Agriculture if they want to help agriculture generally.

Dr. PAARLBERG. I agree, Congressman. My point was they are now sometimes asking that a program be initiated. Previously they resisted almost everyone. Now we do not respond to them always. There are cases where our supplies are such, our budget is such, our competitive position is such, that we think we should not respond.

In that case we resist. But it is now a dialogue, in most cases reasonably harmonious rather than almost always contentious as it formerly was.

Mr. NATCHER. Which I think is good. That is the way, Dr. Paarlberg, it should be.

Dr. WEST. Most of our increased competition comes from developed countries. Developing countries have actually lost ground as far as the world export picture is concerned. They have had some increase in income, and are eating more of their production themselves. Their agriculture has not been able to keep up, so exports from developing countries have not kept up.

But on the other hand, the developed countries are where we are getting our big competition-Canada, Australia and others.

Mr. NATCHER. When Great Britain comes in on January 1, 1973, that will probably mean three, four, or five more countries will follow right along as far as Great Britain is concerned, Great Britain in turn will see that they come into the European Common Market.

Dr. WEST. Denmark and Ireland, yes.

IMPORTANCE OF EXPORTS TO U.S. AGRICULTURE

Mr. NATCHER. You are exactly right. It is something that certainly should be followed carefully in this country because it is going to affect agriculture considerably.

Dr. Paarlberg, assuming that we had no exports of agricultural commodities, would that not be right disastrous as far as the farmer is concerned?

Dr. PAARLBERG. It would indeed. It would make necessary the retirement of many more millions of acres, and it would deprive many, many thousands of farmers the opportunity to market products. It would idle a great deal of our farm service business that is associated with exports.

It would further worsen our balance of trade situation, so that it would be a blow that we just do not want to contemplate.

Dr. WEST. Actually the dock strike not only caused a quarter billion dollars loss in sales, but also depressed prices here in the United States which probably cost the farmer another three-quarters of a billion dollars. So you can see the impact the termination of exports would have on the price. That is why it is so important to keep up and increase this level of agricultural trade.

We need to look into the situation. We need to look further into the impact of the United Kingdom going into the EEC for example. We have made a study-but we need to keep up with the situation-what effect this action will have and how we can best compete with these countries for their import market.

Mr. NATCHER. Thank you, Mr. Chairman.

Mr. WHITTEN. Evans.

IMPACT ON U.S. GRAIN EXPORTS OF GREAT BRITAIN'S ENTRY INTO EEC

Mr. EVANS. Thank you, Mr. Chairman. One question, following that of my friend, Mr. Natcher, is on the subject of how much you think we are going to lose in grain sales with Great Britain going into the Common Market. Do you concede we will be losing sales? Do you have an estimate of how much we could stand to lose?

Dr. WEST. I think we do have some estimates on that.

Mr. WILLETT. Yes. We have made a study of this. It, of course, will depend upon the prices and policies that are actually established over a period of years, which are not certain. As in any such estimates, there is a great deal of uncertainly in these, but we believe that essentially the Common Market, plus the increases in Britain, which might result from higher prices and other changes, could fill Britain's needs for grain, so that after a few years they would not have to import grain from outside the market. It might close off the market.

Mr. EVANS. In total grain shipments to Great Britain, how much did we sell to them last year? If you do not have that, can you supply it for the record?

Mr. WILLETT. Yes.

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