FOREIGN ASSISTANCE PROGRAMS AND SPECIAL EXPORT PROGRAMS-Continued General and special funds-Continued PUBLIC LAW 480-Continued 1. Sale of surplus agricultural commodities for foreign currencies (title 1).-Under this title, the United States accepts foreign currency in payment for surplus agricultural commodities and their products. The main purpose is to increase sales to countries unable to expand commercial purchases because of a lack of dollar exchange. As the economies of countries improve, a gradual shift from title I purchases to dollar purchases occurs. Sales are made only to "friendly nations"-as defined in section 107 of Public Law 480, 83d Congress. Foreign currencies received are deposited to the account of the U.S. Treasury and can be used only as stated in section 104. The dollar value of such deposits through June 30, 1964, amounted to $8.1 billion. Public Law 88-638 established an advisory committee to review the status and use of foreign currencies and recommend to the President as to how to assure maximum benefits to the United States from the use of foreign currencies and returns from sales made under title I. The committee consists of the Secretary of Agriculture, the Director of the Bureau of the Budget, the Administrator of the Agency for International Development, the chairman and ranking minority member of the House Committee on Agriculture and of the Senate Committee on Agriculture and Forestry. Certain proposals for use of Certain proposals for use of currencies or use of principal or interest repayments (except pursuant to appropriations) are to be submitted to those two committees. Uses fall into two groups-those of benefit to the foreign country, mainly loans and grants to promote economic development, and to support common defense, and those of benefit to the United States. The latter includes, among others: Expenses of the U.S. Government abroad; agricultural market development; educational exchange; construction of military family housing; sales of foreign currency to U.S. citizens and American tourists. Foreign currencies for U.S. uses are subject to the appropriation process. Sales agreements specify particular uses, and in those entered into after December 31, 1964, the amount subject to the appropriation process will increase, with certain possible exceptions, from the previous minimum of 10%. Such uses reduce dollar outflow and the deficit in the balance of payments of the United States. The Corporation is reimbursed for the dollar value of currencies so used. In 1964 and 1965, such receipts have been applied to reduce prior years' unrecovered costs due the Commodity Credit Corporation. Dollar repayments of foreign currency loans have also been applied to repay the Corporation. It is anticipated that prior years' costs will have been fully paid during 1965. Thereafter, such proceeds will be applied against current costs. The appropriation estimate reflects these as a reduction in the appropriation needed. Section 509 of Public Law 86-500, approved June 8, 1960 (7 U.S.C. 1704b note) provides that at least 75% of the total cost of foreign military housing projects (unless otherwise specified) shall be paid from foreign currencies acquired under title I. The Department of Defense reimburses the Corporation for the foreign currencies used. Pursuant to section 2681 (b) of title 10 U.S.C. as amended, the estimates reflect payment to the Corporation of $6 million each year for amounts due under Public Law 480 and the French housing barter transaction discussed under Commodity Credit Corporation. It is estimated that $4 million will be applied against Public Law 480 amounts due with a balance of $52.7 million remaining unpaid as of June 30, 1966. encies fense 1196 nded. 480 nder at $4 due as of ries. rket eat, alue 65. the ant It ts st 0 al 1 2. Commodities disposed of for emergency famine relief to friendly peoples (title II).-Under this title, surplus stocks of the Commodity Credit Corporation are transferred, on a grant basis, to friendly nations or friendly peoples to meet famine or other urgent or emergency relief needs. Grants are also made under authority of this title to promote economic and community development in underdeveloped countries. The Agency for International Development is responsible for administering the title II programs. Public Law 88-638 amends section 203 to provide that $7.5 million each year may be spent under this title to buy foreign currencies accruing under title I to meet costs (other than personnel and administrative) of cooperating sponsors, distributing agencies, and recipient agencies, such as those for essential tools and equipment. This is to assure that commodities furnished under titles II and III are used to carry out more effectively the purposes for which these commodities are furnished and to promote community and other self-help activities which would alleviate the causes of the need for such aid. In the past 10 years, transfer authorizations were issued for about $1,446 million worth of food under this title including ocean freight costs. Of this total, $989 million (69%) was for the relief of victims of floods, earthquakes, droughts and plagues, and for refugees, $165 million (11%) for child feeding, and $292 million (20%) for economic development. Also, about $280 million was authorized for ocean freight costs on commodities donated under section 416 of the Agricultural Act of 1949, as amended, making total authorizations of $1,725 million for the 10 years this program has been in effect. Section 203 provides for appropriations to cover costs of these programs. These include commodity costs, ocean freight on shipments under this title and ocean freight on shipments under section 416. Also authorized for payment from such appropriations are charges for general average contributions arising out of ocean transport of commodities furnished under the above two laws as well as section 308 of Public Law 480 and section 9 of the act of September 6, 1958. Through December 31, 1964, a total of $2,300 million of appropriations were authorized. Since 1958, these II, as amended by Public Law 88-638, provides that prowere at the rate of $300 million per calendar year. Title grams of assistance shall not be undertaken under title II during any calendar year beginning January 1, 1965, and ending December 31, 1966, which call for appropriations 1955. 1956. 1957. 1958. 1959. 1960. 1961 1962 1965 (estimate). Cumulative totals. Appropriations through June 30, 1966. 26,447 51,695 78,142 228,199 228, 199 -2,792 215,451 Program expenditures 86,623 91,277 120,430 116,001 95,511 93,161 1965 estimate 140,863 196, 109 241,939 215,593 25,575 44,100 69,675 210,538 210,538 2,792 7,123 The following reflects the costs incurred in carrying out this program by fiscal years (in thousands of dollars): Interest 2,308 4,461 5,445 2,417 2,339 2,456 1966 estimate -7,123 220,453 298,500 228, 199 2,001,004 19,699 217,007 42,354 41,262 83,616 300,623 5,000 305,623 Total 86,896 93,585 124,891 121,446 97,928 95,500 198,565 241,939 215,593 228,199 210,538 305,623 2,020,703 2,020,703 3. Long-term supply contracts (title IV). This title, which was added in 1959, and amended in 1962, provides for sales of U.S. surplus agricultural commodities under long-term credit and supply contracts. The major objective is to stimulate and increase sales for dollars through credit thereby helping the development of foreign markets and the economies of friendly nations. Generally, agreements providing for the delivery of surplus agricultural commodities over periods of up to 10 years may be entered into with the governments of friendly of such nations, or with United States and foreign private nations, including financial institutions acting on behalf delivered in each calendar year, with interest, are made trade entities. Payments in U.S. dollars for commodities over periods of up to 20 years, except in certain cases in charged from the date of last delivery of commodities which payment must be made within 5 years. Interest is under the agreement in each calendar year. Rates of required by the Foreign Assistance Act for dollar repayable interest may not be set at less than the minimum rate development loans. Total agreements made since the inception to June 30, 1964, amounted to $355.7 million cost value including rice, oils and oilseeds. Repayments for the period ocean freight. Major commodities were wheat, cotton, FOREIGN ASSISTANCE PROGRAMS AND SPECIAL EXPORT PROGRAMS Continued General and special funds—Continued PUBLIC LAW 480-Continued amounted to $4.9 million of which $3.1 million was applied to principal and the rest to interest. Appropriations are provided to cover costs of this program but no definite limitation is stated. Previously, appropriations were requested to cover generally the difference between total Commodity Credit Corporation costs and the agreement or export value to be paid by the foreign governments less anticipated repayments during a particular fiscal year. However, as this program has progressively increased, $125.6 million of costs were due from the foreign governments as of June 30, 1964. The Corporation bears this charge against its borrowing authority which will not be collected for many years. Therefore, it is proposed to include this amount in the 1965 supplemental appropriation estimate as well as 1965 costs not included in the enacted 1965 appropriation. Appropriation requests thereafter will cover total estimated costs less repayments to be received during the year. This will relieve the borrowing authority for use in its mandatory price support and related operations. The foreign governments or private entities would continue to make repayments as stated in the agreements. As repayments actually are received each year, they will be applied against current costs. 13,331 45,090 4,499 62,920 2,207 65,127 -4,671 60,456 15,263 -24, 189 -8,926 8,926 52,515 52,515 52,515 52,515 41,415 150,449 20,300 212,164 2,800 214,964 -10.700 204,264 204,264 204,264 125,577 -52,515 268,400 35,000 233,400 268,400 44,646 159,000 22,739 226,385 215,500 215,500 The following table reflects the costs incurred by fiscal years on actual and estimated shipments (in thousands of dollars): 1962. 215,500 1964 1965 (estimate). Cumulative totals. Net costs Appropriations through June 30, 1966. Unreimbursed costs, June 30, 1966, financed by CCC borrowing au- Amounts due from foreign governments June 30, 1966, to be applied Proposed for separate transmittal: Identification code 10 PUBLIC LAW 480 Program and Financing (in thousands of dollars) Program by activities: 1. Sale of surplus agricultural commodities 2. Long-term supply contracts.. Program expenditures Interest Total 214,964 226,385 609,652 6,157 Total program costs, funded-obliga- Financing: 40 New obligational authority (proposed sup- Relation of obligations to expenditures: 71 Total obligations (affecting expenditures). 90 Expenditures 615,809 26.394 589,415 -589,415 458,692 226,385 -10,885 Under existing legislation, 1965.—A supplemental ap215,500 propriation of $506.4 million is proposed to repay the Commodity Credit Corporation for (1) additional estimated costs in 1965 under title I, Sale of surplus agricultural commodities for foreign currencies, $273 million; and (2) additional current year costs and prior year unrecovered costs under title IV, long-term supply contracts, $233.4 million. Projections of the demands on the Corporation's $14.5 billion borrowing power indicate that it will be exhausted during January 1965. This appropriation would help the Corporation to finance its mandatory operations during the remainder of 1965. 1966 estimate SPECIAL EXPORT PROGRAMS In addition to the Foreign assistance programs described, the Commodity Credit Corporation conducts other special export programs under specific legislative authority. These are: International Wheat Agreement 215,500 (7 U.S.C. 1641-1642); and Bartered materials for supple mental stockpile (7 U.S.C. 1856). INTERNATIONAL WHEAT AGREEMENT For expenses during fiscal year [1965] 1966 and unrecovered prior years' costs, including interest thereon, under the International Wheat Agreement Act of 1949, as amended (7 U.S.C. 1641-1642), [$31,838,000] $27,544,000, to remain available until expended. (Department of Agriculture and Related Agencies Appropriation Act, 1965.) Program and Financing (in thousands of dollars) Identification code 05-48-2270-0-1-351 Program by activities: 10 International Wheat Agreement (costs, funded-obligations) (object class 41.0)| Financing: 40 New obligational authority (appropriation). Expenses of shipments: Subtotal, expenses of shipments.... Interest on unrecovered balance.... 1964 actual Total. Unrecovered 1963 costs paid from 1964 funds... Unrecovered 1964 costs brought forward.. 86,218 Total available or estimate.. Proposed supplemental, 1965... Appropriation or estimate. 86,218 Relation of obligations to expenditures: 71 Total obligations (affecting expenditures) __ 86,218 31,838 90 Expenditures... 1965 estimate 86,218 31,838 27,544 31,838 The International Wheat Agreement Act of 1949, as amended, authorizes the President, acting through the Corporation, to make available or cause to be made available wheat and flour at such prices as are necessary to exercise the rights, obtain the benefits, and fulfill the obligations of the United States under the International Wheat Agreement which terminates July 31, 1965. The maximum and minimum prices in the current agreement are $2.02% and $1.62% per bushel, respectively, for the basic grade of wheat, No. 1, Manitoba Northern, at Fort William/Port Arthur, Canada. 1966 estimate The Corporation causes wheat and flour to be made available under the agreement through payments in kind to exporters of wheat and cash payments to exporters of flour. Such payments cover the difference between the export price and the cost of wheat to exporters. If the domestic market price of wheat falls below the agreement price, exporters will make commensurate refunds of payments previously received. Appropriations are authorized to cover costs of this program. The following reflects the composition of the appropriations for 1964, 1965, and 1966 (in thousands of dollars): 27,544 86,218 31,838 27,544 27,544 1964 actual 1965 estimate 1966 estimate 115,046 24,500 23,600 10,069 4,393 125,115 668 125,783 17,273 -56,838 56,838 86,218 31,838 54,956 86,794 27,544 28,893 27,544 1,063 29,956 27,544 27,544 Financing: 40 New obligational authority (appropriation). 1964 actual Under existing legislation, 1965.-A supplemental appropriation of $54,956 thousand is proposed to repay the Commodity Credit Corporation for unreimbursed prior years' costs. years' costs. Projections of the demands on the Corporation's $14.5 billion borrowing power indicate that it will be exhausted during January 1965. This appropriation would help the Corporation to finance its mandatory operations during the remainder of 1965. 82,860 1965 estimate BARTERED MATERIALS FOR SUPPLEMENTAL STOCKPILE For expenses during fiscal year [1965] 1966 and unrecovered prior years' costs related to strategic and other materials acquired as a result of barter or exchange of agricultural commodities or products and transferred to the supplemental stockpile pursuant to Public Law 540, Eighty-fourth Congress (7 U.S.C. 1856), [$92,860,000 $52,500,000, to remain available until expended. (Department of Agriculture and Related Agencies Appropriation Act, 1965.) Program and Financing (in thousands of dollars) 82,860 54,956 Relation of obligations to expenditures: 71 Total obligations (affecting expenditures).. 82,860 90 Expenditures.. 54,956 54,956 54,956 1966 estimate 1965 1966 estimate estimate 92,860 52,500 92,860 52,500 92,860 52,500 82,860 92,860 52,500 Under title II of the Agricultural Act of 1956 (7 U.S.C. 1856), the Commodity Credit Corporation transfers to the supplemental stockpile, strategic and other materials acquired from the barter and exchange of agricultural commodities. This does not cover those acquired for the national stockpile or for other purposes. Appropriations are authorized for the value of materials transferred to the stockpile. This is based on the lower FEDERAL CROP INSURANCE CORPORATION FUND Not to exceed $3,638,000 of administrative and operating expenses may be paid from premium income: Provided, That in the event the Federal Crop Insurance Corporation Fund is insufficient to meet indemnity payments and other charges against such Fund, such additional amounts as may be necessary may be borrowed from the Commodity Credit Corporation under such terms and conditions as the Secretary may prescribe, but repayment of such amount shall include interest at a rate not less than the cost of money to the Commodity (7 U.S.C. 1516(a); Credit Corporation for a comparable period. 78 Stat. 933; Department of Agriculture and Related Agencies Appropriation Act, 1965.) |
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