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the fees. In some cases it involves items where transfers are proposed from other appropriations.

In some instances, increases are proposed in limitations, but the cost would still be absorbed within the appropriation. Then we reviewed the Department's appropriations to determine where there were balances which were not planned for use during the year, and are proposing to transfer such balances to other appropriations to meet the increased salary costs.

Mr. WHITTEN. What is the rule within the Department so far as transferability? What is the percentage and what are the limitations as to transferability?

If I recall correctly, within a broad category you can transfer up to 7 percent within the items in a bureau or agency. But you cannot transfer, say, from Agricultural Research or Marketing Research to Soil Conservation Service. Am I right about that?

Mr. GRANT. That is right. We can transfer under the 7-percent authority between appropriation items within the same bureau or agency, but we cannot cross agency lines.

However, I want to point out that the transfers proposed in these supplemental estimates involve action by the Congress.

Nr. WHITTEN. So if this subcommittee should authorize transfers beyond that which you normally have, there is no reason why you should not treat all agencies alike insofar as what they absorb and insofar as what they depend on for appropriations. I am asking you why each agency in the Department should not have it pro rata share of the absorption and its pro rata share of dependence upon additional appropriation.

Mr. GRANT. It could be done that way.

Mr. WHITTEN. You have heard the chairman announce what the policy of the subcommittee is. In view of that announcement could you go over these figures and see that each of the agencies accepts its part of the absorption in case you should not get additional funds to make up the difference?

Mr. GRANT. Yes, this could be done and if I understand you it would mean redistributing the transfers proposed so that each agency would get a pro rata portion of the transfer?

Mr. WHITTEN. I do not mean to belabor the issue before my colleagues, who have been nice enough to ask us down here to develop this, but it is my experience in Congress that cuts such as we are discussing now are usually applied to those plans where the Congress would be likely to restore them. If there should be a policy by the Congress requiring each agency to absorb a certain amount, all of these agencies being important to those who rely upon them, it would be beneficial to the committee and the Congress in trying to fix the sums on a reasonable basis.

I am asking you, could you go back over this and rework it?
Mr. GRANT. Yes, we could.
Mr. WHITTEN. So you will provide what you could in the transfer
of funds from various other amounts.

Mr. GRANT. Yes, sir.
(The information requested follows:)

Adjusted to reflect pro rata

distribution of transfers
and additional appropri-
ations

$3, 225, 175

$1, 470, 800

$2,023, 372

$2,672, 603

1, 191
35, 448

377,564

3, 225, 175

58, 900

1, 470, 800

2, 023, 372

25, 130

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25, 350
66, 300
366, 500

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Agency or item

Total costs

Within

existing

funds

$5, 036, 900

1, 191

35, 448

$340, 925

5,073, 539

58, 900

94, 490

24, 182

94, 490

Agricultural Research Service:

Salaries and expenses...

Salaries and expenses (special foreign currency program)

Other funds.-

Total, Agricultural Research Service-

Cooperative State Experiment Station Service: Payments and expenses.

Extension Service: Cooperative extension work, payments and expenses.

Farmer Cooperative Service.

Soil Conservation Service:

Conservation operations

Watershed protection.

Flood prevention.

Great Plains conservation program

Trust funds..

Total, Soil Conservation Service

Economic Research Service-

Statistical Reporting Service.

Agricultural Marketing Service:

Marketing research and service.

Special milk program.

School lunch program.

Removal of surplus agricultural commodities.

Perishable Agricultural Commodities Act fund.

Other funds

Total, Agricultural Marketing Service

Foreign Agricultural Service-

Commodity Exchange Authority.

3,600,000

873, 000

363, 000

109, 500

14, 500

4,960,000

385, 000

347, 235

1, 334, 600

25, 350

66,300

366, 500

31, 350

733, 087

31, 350

733, 087

1, 222,587

3,300

2,557, 187

249, 900

41,000

574, 951
106, 614
17, 515

759, 649
139, 986
23, 485

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4,812, 937
1, 509, 717
6,322, 654

14,812, 937

1, 509, 717
6,322, 654

195, 000
18,000

2 195, 000

18,000

213,000
440, 225

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509, 460
72, 345
19, 800

33, 500

14, 469

19,031

33, 500

14, 469

19, 031

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Agricultural Stabilization and Conservation Service:

Expenses, Agricultural Stabilization and Conservation Service:

Direct appropriation.

Transfer from Commodity Credit Corporation.

Total, Agricultural Stabilization and Conservation Service.

Federal Crop Insurance Corporation:

Administrative and operating expenses.

Federal Crop Insurance Corporation fund.

Total, Federal Crop Insurance Corporation.

Rural Electrification Administration.

Farmers Home Administration:

Salaries and expenses.-

Trust and emergency credit revolving funds.

Total, Farmers Home Administration.

Office of the General Counsel

Office of Information..

National Agricultural Library:

Salaries and expenses

Trust funds.

Total, National Agricultural Library -

General administration:

Salaries and expenses

Working capital fund

Total, eneral administration.

Forest Service:

Forest protection and utilization

Forest roads and trails.

Assistance to States for tree planting.

Acquisition of lands for Superior National Forest

Expenses, brush disposal...

Restoration of forest lands and improvement

Working capital and trust funds.

Total, Forest Service.

Total, U.S. Department of Agriculture.

265, 090

1 Includes $865,000 related to the administration of the agricultural conservation pro-
gram which will require an increase of this amount in the program authorization. This
increase will be covered by the general provisions language in H. Doc. 63.

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Mr. WHITTEN. The issue now is, you have $18,000,219 that you can

absorb from funds that are unused or from some other source, leaving

$10 million which you are requesting here.

Mr. GRANT. That is right, sir.

Mr. WHITTEN. What part of that has to do with new programs, if
any, or is that limited entirely to the salary increases and to the postal
COSts?
Mr. GRANT. It is limited entirely to Pay Act costs. The figures I
gave you do not include increases for other purposes.
Mr. WHITTEN. Could you tell us which estimates are in that cate-
gory and differentiate between that and other requests pending before
the committee that have to do with the appropriation of money to
implement or set up a new program. Break it down to where we
have one in one category and the other in another.

Mr. GRANT. Yes, sir. This proposal before the committee includes

an item of $4 million for the conservation reserve program, which is

not a new program but is to provide for meeting the payments that

came due under the contracts for 1962 under the conservation reserve

program.

There is an additional item of $6 million for the land use adjustment

program. This is a new item proposed to be carried out under sec-
tion 101 of the Food and Agriculture Act of 1962.
Mr. WHITTEN. Who has charge of these programs here 2
Mr. Godfrey, give us your title for the record.
Mr. Godfrey. Administrator, Agricultural Stabilization and Con-

servation Service. I have a short statement to offer for the record.

(The statement follows:)

In 1960 and prior years the Government entered into contracts to make con-
servation reserve payments over a period of years extending through 1971. Last
year Congress provided an appropriation of $300 million to cover the payments
which are due in fiscal year 1963 under these contracts. This appropriation was
less than the budget estimate, but the House report on the agricultural appropria-
tion bill indicated that the Appropriations Committee felt that the approved
amount would be enough to meet all the contractual payments. Further, the
report said, “It is recognized that the Government is obligated to meet its com-
mitments under these contracts. Additional funds can be provided if and when
they become necessary.”

The appropriation has not been adequate to cover the Government's con-
tractual liabilities. Between 4,500 and 5,500 producers have not been paid be-
cause of insufficient funds, although they have complied with their contracts.
This has caused many hardships and the Department is receiving numerous in-
quiries and complaints as to the delay in making these payments which should
have been made in October and November of 1962.

LAND USE ADJUSTMENT PROGRAM

Last March Secretary Freeman proposed a food and agricultural program for
the 1960's. A basic problem pointed out in this program for the 1960's is that
our potential for agricultural production is likely to outrun prospective demand
for farm products over the next 10 or 20 years, even with augmented food aid
programs at home and abroad. By 1980 we will need an estimated 54 million
acres less cropland than the 461 million acres we had in 1961. If exports are
not expanded, the reduction in cropland needed would be somewhat larger.
In recognition of this problem, Congress approved a land use adjustment pro-
gram as part of the Food and Agricultural Act of 1962. Section 101 of the act
authorized the Secretary to enter into long-term agreements which would convert
land from crop production to pasture, trees, water storage, wildlife facilities, or
recreational projects. The immediate objective of the program is to test in
selected counties the feasibility and effectiveness of a long-range land use pro-
gram for general application. The program will provide experience in the con-
version of land regularly used in the production of crops or tame hay to income-
producing recreational uses, pasture, farm forests, water storage, and wildlife
habitat by providing adjustment or transition payments, conservation practice
cost-sharing, and related technical assistance to farmers and ranchers.
In the selected areas 5- and 10-year agreements are being offered to producers

for converting land regularly used in the production of row or grain crops or

tame hay to one or more of the above-named income-producing uses. Cost-

sharing assistance is offered in connection with the land treatment measures

needed to establish the new use. Transition or adjustment payments are made

only in connection with that part of the land converted which is determined to he

suitable for regular cultivation. The adjustment payments being offered are

based on approximately 60 percent of the amount which would have been paid

for similar land had it been placed in the soil bank conservation reserve for a

5-year period. For this purpose the supplemental estimate includes $5 million.

The Secretary was also authorized to extend expiring conservation reserve

contracts for 1 more year. This estimate includes $1 million for cost-sharing

assistance on these extended agreements. Extensions are granted only in cases

where the land under contract would be returned to production of unseeded

crops.

The act further authorized the Secretary to enter into agreements in advance

of appropriations. The supplemental estimate of $6 million is to cover the
estimated payments to be made between now and June 30, 1963, under both long-
term adjustment agreements and extended conservation reserve agreements.
The amounts requested in this supplemental, together with the Department's
requests for appropriations for the 1964 fiscal year for the above purposes, will
not result in expenditures in excess of the limitations imposed by the Congress
in section 101 of the Food and Agriculture Act of 1962.
That concludes my statement, Mr. Chairman. We will be glad to answer
any questions which the subcommittee may have.

CONSERVATION RESERVE PROGRAM

Mr. Whittox. I think my own subcommittee is familiar with this
conservation reserve problem. This $4 million briefly is an obligation
of the Government which is owed to folks who signed up and earned
the money under the conservation reserve program, is that right !

Mr. GodFREY. Yes, sir. That is true.

Mr. WHITTEN. And it represents a failure on the part of the Con-

gress last year to appropriate sufficient money to meet these govern-

mental contracts.

Mr. Godfrey. Yes, sir.

Mr. WHITTEN. And if it is not paid here it would mean the folks

would have to wait that much longer for that to which they are

entitled.

Mr. GoDFREY. That is right.

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