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1964 actual

1965 estimate

1966 estimate

-1.74

of year.

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Financing:

Federal sources:
Insurance premiums, by crop:

Program by activities:

Relation of obligations to expenditures:
Operating costs, funded:

10
Indemnities, by crop:

Total obligations.

28, 229 35,463 38,378

70 Receipts and other offsets (items 11-17). -30,479 -34,267-36,875 Apples.

57

88 104 Barley

1,207

530

994 71 Obligations affecting expenditures..--
Beans.
154

-2,250
294

1,196 257

1,503 72.98 Obligated balance, start of year. Cherries. 162

84 9

293 62

Receivables in excess of obligations..
Citrus..

-1,348
40 1,041 1,106
Combined crop-

74.98 Obligated balance, end of year. -
271
229

-293
527

-637

Receivables in excess of obligations, end
Corn..

2,084 11,250 6,031
Cotton..

1,348
2,451 1,723 3,621
Flax..

544 790 586 90
Grain sorghum.

Expenditures

-819 427

-445 582 729

1,159 Oats...

290 408 605 Peaches.

525 1,566 475 Peanuts.

Cash transactions:

469 631 658 Peas..

93 138

Gross expenditures. 932 354

28,294 33,990 37,884 Potatoes.

94 684

Applicable receipts. 569 182

-29,113 -34,435-36,725 Raisins.

1,231

90 291 Rice.

57

81 Safflower

5

3 Soybeans.

Purpose and financial organization.--The Federal Crop

2,241 2,402 3,289 Tobacco.

2,271

Insurance Corporation, a wholly-owned Government

1,165 3,312
Tomatoes

10
13

45 Corporation, was created on February 16, 1938 (7 U.S.C. Tung nuts.

18 Wheat..

1501-1519), to carry out the provisions of the Federal

8,200 5,977 9,770 Crop Insurance Act. The purpose of this act is to promote Total indemnities... 23,456 30,351

the national welfare by improving the economic stability

33, 100 Inspection and adjustment costs. 1,278 1,200 1,346 of agriculture through a sound system of crop insurance Administrative expenses..

3,350 3,638 3,638

and providing the means for the research and experience Other expenses and adjustments, net..

145 274

294 helpful in devising and establishing such insurance. The Total program costs-obligations...

28, 229 35,463

38,378

Corporation provides all-risk insurance protection to farmers against loss from unavoidable causes.

Since 1948, Receipts and reimbursements from: Non

the crop insurance program has been conducted on a limited basis in selected counties and on selected crops to

obtain adequate actuarial data for the expansion of the Apples.

-163 -73 -116

program to a national basis. Based on past experience Barley.

, -1,151 -1,021 -1,104 the Corporation began with the 1962 crop year, to expand Beans.

-251 -258 -285 Cherries.

the crop insurance program at a more rapid rate to addi

- 34 -44 -69 Citrus

tional counties and commodities. -1,145 -1,157 -1,229

-604 -558 Corn...

-585

Capital stock of $100 million is authorized to be sub-5,134 -6,355 -6,701 scribed by the United States. As of June 30, 1964, the -3,510 -3,668 -4,023 Secretary of the Treasury held receipts for $40 million of -684 -618 -651

the authorized stock, leaving $60 million unissued.

-566 -715 Oats....

-810

-481 -585 Peaches.

-672

Funds from the issuance of capital stock provide work

-511 Peanuts.

-454 -528 | ing capital for the Corporation. Receipts which are for -616 -666 -731 deposit to this fund come mainly from premiums for -261 -354 -393

insurance protection afforded farmers on their investment -311 -195 - 202 - 367 -317

-323

in the production of insured crops.. The principal pay-22 -65

-90

ments from this fund are for indemnities to insured farmers -2

-3 who suffer crop losses arising from causes against which Tobacco.. -2,277 -3,318 -3,654

crop insurance provides protection, the direct cost of -3,676 -3,384 -3,680 -24 -35 —50 adjusting losses, and part of the administrative and

-20 operating expenses. The annual appropriation for the -8,625 -10,350 -10,881 major portion of the administrative and operating ex-30,413 -34,192 – 36,800

penses of the Corporation is presented earlier in the -66 -75 - 75 budget.

Budget program. -For the 1965 crop'year it is planned -41,438 -43,689 -42,493 that the crop insurance program will be extended to 25

new counties. The following table indicates the scope of 43,689 42,493 40,990

the insurance program planned for 1964, 1965, and 1966. Amounts in the 1964 column are actual and pertain to the 1963 crop year,

The 1965 column pertains to the

Combined crop

Cotton.
Flax..
Grain sorghum.

Peas...
Potatoes.
Raisins.
Rice...
Safflower..
Soybeans.

Tomatoes.
Tung nuts.
Wheat...

14 Total premiums.

Interest and other receipts. 21.98 Unobligated balance available, start of

year. 24.98 Unobligated balance available, end of

year..

New obligational authority,

year (1965

actual

estimate

estimate

191

FEDERAL CROP INSURANCE CORPORATION

NET INCOME OR LOSS ON INSURANCE OPERATIONS, BY Continued

COMMODITIES

(Fiscal years ending June 30. 1964, 1965. and 1966-In thousands of dollars) Public enterprise funds-Continued

1964 actual 1965 estimate 1966 estimate

(1963 crop year) (1964 crap year) (1965 crop year) FEDERAL CROP INSURANCE CORPORATION FUND-Continued

Apples.

106
--15

12 Barley

-56
491

110 1964 crop year and reflects the current favorable growing

Beans

97
-36

28 conditions for the 1964 insured crops. Indemnities shown Cherries

-128
35

7 in the 1966 column are estimated at 90% of the estimated Citrus.

1,105
116

123 premium.

Combined crop

333
329

58 1964 fiscal 1965 fiscal 1966 fiscal

Corn..

3,050
-4,895

670
year (1963
year (1964
Cotton.

1,059
1.945

402 стор year) crop year) crop year)

Flax.

140
-172

65 Grain sorghum.

139
133

81 Number of states..

38
36

36
Oats

177

67 Number of counties.

1,094 1,187 1,212

Peaches.

-14 Estimated insurance outstanding (in thou

-1,112

53 Peanuts.

147
35

73 sands), beginning of fiscal year. $496,599 $546,842 $590,000

Peas.

123
-578

39 Insured acreage (thousands).

13,085 14,808 15,937

Potatoes

--373 Number of

20

-374
insured..
crops
418,076 447,539 472,000 Raisins.

-864
227

32 Premiums (in thousands)

$30,413 $34,192 $36,800

Rice..

22
8

9 Indemnities in thousands)

$23,456 $30,351 $33, 100
Safflower.

-3 Loss ratio...

.77
.89

.90
Soybeans.

36
916

365 Tobacco..

1,405
2,219

368 Financing.--Income from operations will provide ade- Tomatoes.

14
22

5 quate operating funds for 1966, unless unforeseen losses Tung nuts.

2 occur. Therefore, no additional Capital Funds are being

Wheat.

425
4,373

1,111 requested for program operations.

Premiums over However, inasmuch as the Corporation is expanding at

indemnities... 6,957

3.841

3,700 a more rapid rate, and will have an annual premium Inspection and loss income of approximately $43 million by 1966, a heavy Administrative expenses

-1,278
-1.200

-1,346 loss occurring early in the fiscal year prior to the time charged to premium premiums are collected could deplete the available funds

income..

-3,350
-3,638

-3,638

Other income or expense, below the amount necessary to pay indemnity claims.

net.

-79
-199

-219 The Corporation is requesting authority to borrow the necessary funds if required to meet such emergencies from

Net income or

loss. the Commodity Credit Corporation. The following table

2.250
-1,196

-1,503 reflects the comparison of the working capital, and insured liability from 1961 through 1966:

Revenue, Expense, and Retained Earnings (in thousands of dollars) COMPARISON OF INSURANCE LIABILITY TO CAPITAL, FISCAL YEARS

1961 THROUGH 1966
(Dollars In thousands)

Revenue.

30,479 34,267 36,875 Working capital Fiscal year

Expense.
al end-of-year

Percent of capital
Insured liability

28,229 -35,463–38,378 to insured liability 1961 actual. $48,016 $271.709

17.7

Net income 1962 actual..

47,591
356,553

2,250

-1,503

-1,196
13.3 Analysis of retained earnings:
1963 actual.

41,438
496,999

8.3

Retained earnings, start of year. 1964 actual.. 43,689

1,438 3,689 546,842

8.0 1965 estimated

42,493
590,000
7.2

Retained earnings, end of year..
1966 estimated
40.990

990

3,689 2,493 693,000

5.9 Operating results and financial condition.---Preliminary

Financial Condition (in thousands of dollars) estimates for crop year 1964, fiscal year 1965, indicate a favorable loss ratio for the seventh year, out of the past 8 years. Premiums of $34.2 million are estimated to exceed indemnities by $3.8 million. For the crop years

Assets: 1948 through 1963, premium income of $314.8 million

Treasury balance.

41,522 42,341 42,786 exceeded indemnity costs of $294 million by $20.8 million.

Accounts receivable, net.

4,813 6,179 5,942 Premium income exceeded indemnity costs in 9 years of

Total assets

46,335 48,520 48,728 the 16 year period. As of June 30, 1964, the Corporation's surplus was

Liabilities:

Current. $3.7 million. The favorable loss experience which occurred

4,897 4,831 6,235 the past six out of seven years is responsible for the

Government equity: current favorable financial condition of the Corporation.

Non-interest-bearing capital.

40,000 40,000 40,000

Retained earnings ---The following table summarizes the insurance operations

1,438

2,493 by commodities for 1964, 1965, and 1966.

Total Government equity---

41,438 43,689

42,493

1964 actual

1965 estimate

1966 estimate

loss for the year.

2,493

1963 actual

1964 actual

1965 estimate

1966 estimate

41.627 5,998

47,625

6,635

40,000

990

38_3,689

40,990

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Unobligated balance (Government

equity).

41,438

43,689

42,493

40,990

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LOAN AUTHORIZATIONS For loans in accordance with said Act, and for carrying out the provisions of section 7 thereof, to be borrowed from the Secretary of the Treasury in accordance with the provisions of section 3(a) of said Act, as follows: Rural electrification program, [$365,000,000] $350,000,000, of which [$90,000,000] $65,000,000 shall be placed in reserve to be borrowed under the same terms and conditions to the extent that such amount is required during the current fiscal year under the then existing conditions for the expeditious and orderly development of the rural electrification (program;] and rural telephone (program, $70,000,000 of which $7,000,000 shall be placed in reserve to be borrowed under the same terms and conditions to the extent that such amount is required during the current fiscal year under the then existing conditions for the expeditious and orderly development of the rural telephone program] programs; and rural telephone program, $97,000,000. (Department of Xyriculture and Related Agencies Appropriation Act, 1965.)

Program and Financing (in thousands of dollars)

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3,350

3,638

38_3,638

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Personnel Summary

330,194 21,218

355.000 42,000

365,000 32,000

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STATUS OF THE TELEPHONE PROGRAM-Continued

Program Statistics

RURAL ELECTRIFICATION ADMINISTRATION

Continued General and special funds-Continued

LOAN AUTHORIZATIONS--Continued and must be repaid within a period not to exceed 35 years. Loans are also made for shorter periods at 2% interest to electrification borrowers to be reloaned to their consumers for the purpose of financing the wiring of premises and the acquisition and installation of electrical and plumbing appliances and equipment, including machinery.

[Dollars in thousands]

1964 actual 1965 estimate 1966 estimate Cumulative net loans..

$1,078,444 $1,171, 174 $1,268, 174 Cumulative funds advanced..

$876,695 $961,695 $1,049,695 Unadvanced funds, end of year.

$201,749 $209,479 $218,479 Cumulative principal repaid.

$79,464 $99,664 $121,564 Cumulative interest paid..

$66,896 $85,096 $105,096 Route miles of line constructed or improved, cumulative (thousands).

354
379

404 Dial subscribers, new and improved service, cumulative (thousands).

1,569 1,675 1,777 Number of borrowers..

838
858

880 iThe reserve authorization (shown in the schedule for the electrification program) is proposed for use in either the electrification or telephone program.

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REVENUE. EXPENSE, AND RETAINED EARNINGS

lin thousands of dollars)

1964 actual 1965 estimate 1966 estimate For the fiscal year: Lending operations: Interest revenue..

75,758 79,390 83,400 Expense: Interest expense (statutory rates). 74,203 77,290

81,000 Net revenue

1,556 2,100 2,400 Administrative expenses (provided by

annual appropriations): Salaries and
expenses.

11,109 11,915
Cumulative to end of fiscal year:
Lending operations:
Interest revenue.-

872,668 952,058 1,035,458

300.000 90,000

300,000 65,000

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11,915

Program Statistics

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(Dollars in thousands) Cumulative net loans.

$5,280,872 $5,552,872 $5,852,872 Cumulative funds advanced.

$4,451,823 $4,721,823 $4,998,823 Unadvanced funds, end of year.

$829,049 $831,049 $854,049 Cumulative principal, repaid.

$1,379,740 $1,516,240 $1,657,240 Cumulative interest paid...

$658,730 $729,430 $805,430 Cumulative miles energized (thousands). 1.537 1,560 1,584 Cumulative consumers served (thousands).

5,301 5,451 5,601 Number of borrowers.

1,102 1,105 1,110 1 The reserve authorization of $65 million is proposed for use in either the electri. fication or telephone program.

2. Rural telephone.--This capital investment program is financed through loans which are made for the purpose of financing the improvement, expansion, construction, acquisition, and operation of the telephone lines and facilities or systems to furnish and improve telephone service in rural areas.

The loans bear 2% interest and must be repaid within a period not to exceed 35 years.

In 1950, when the telephone program started, the Census of Agriculture showed 38.2% of all farms with telephone service, fewer in both number and percentage than in 1920. Approximately 79% of the farms now have telephone service. Cumulative Rural Electrification Administration loans through June 30, 1964, will eventually provide initial or improved service to an estimated 1,965 thousand rural subscribers. STATUS OF THE TELEPHONE PROGRAM

Program Financing
(Dollars in thousands)

1964 actual
Loan funds available:
New loan authorization:
Regular.

70,000 63,000 97,000 Reserve.

7,000 (1) Carryover from prior year.

40,744 23,292

562 Rescissions of prior year loans..

2,501 4,270 Total loan funds available..---- 113,245 97,562 97,562 Less Loans approved.--

89,953 97,000 97,000 Balance to next year..

23,292

562

562

Assets:

Treasury balance.
Cash on hand.
Loans receivable, net.
Travel advances.
Accounts receivable:

Interest receivable.

Current receivable. Equipment, net.

17,385 20,112 5,786
1,332 288

288

288 3,684,645 3,860,186 4,060,486 4,264,586 95 95 95

95

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Total assets...

3,855,514 4,028, 137 4,204,614 4,397,065

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1965 estimate 1966 estimale

Total liabilities...

1,280

530

595

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! Includes capital outlay as follows: June 30, 1964, $86 thousand; 1965, $69 Under proposed legislation for 1965.-To establish in

thousand; 1966, $63 thousand.

3 Selected resources as of June 30 are as follows: Unpaid undelivered orders, 1965 a Rural Electrification Administration loan account

1963, $42 thousand (1963 adjustments, -$5 thousand); 1964. $36 thousand; 1965. which will reflect the net cost of the loan programs by

$36 thousand; 1966. $36 thousand. showing it as the excess of the aggregate of the loans to be

The Administration assists electrification borrowers and

potential borrowers to negotiate for adequate supplies of made over the current receipts on loans previously made.

power on reasonable terms, and makes loans for the exThe account will be budgeted on a net expenditure basis.

tension and improvement of electric and telephone services Net loan receipts are estimated to be $168 million in in rural areas. Business management and technical help 1965 and $177 million in 1966, adjusting new obligational is furnished borrowers where needed to protect the Govauthority in 1966 as follows (in thousands of dollars): ernment's loan security and to assure that construction

and operation of their systems conform to approved standCurrently requested....

447,000 ards and will provide continuous and reliable service. Proposed revised estimate.

102,000

Object Classification (in thousands of dollars)
Reduction in new obligational authority.--

345,000

Identification code
05-56-3100-0-1-353

estimate

1965

1964 actual

1966 estimate

SALABIES AND EXPENSES For administrative expenses, including not to exceed $500 for financial and credit reports, funds for employment pursuant to the second sentence of section 706(a) of the Organic Act of 1944 (5 U.S.C. 574), and not to exceed $150,000 for employment under section 15 of the Act of August 2, 1946 (5 U.S.C. 55a), [$11,578,000] $11,934,000. (5 U.S.C. 511-512; 7 U.S.C. 901-924; Department of Agriculture and Related Agencies Appropriation Act, 1965.)

Program and Financing (in thousands of dollars)

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Identification code 05-56-3100-0-1-353

33 118 54 81

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11,028

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Personnel Summary

5,108

5,320

5,320

1,027

11.030

-2

11,934

11,934

1,042

3

resources

2

Total number of permanent positions..
Full-time equivalent of other positions.
Average number of all employees..
Average GS grade..
Average GS salary.

1,046

3 976

9.7 $9,879

976

10

950

9.7 $9,355

Total obligations..

11,028

11,934

11,934

9.7 $9,921

Financing:

16 Comparative transfer to other accounts25 Unobligated balance lapsing.---

New obligational authority --

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