Ruttongee (one of the great workers in the antituberculosis fight) was accepted by me to visit with the Grantham Hospital. Finished in 1957, this modern facility is doing a great work. In this work CARE has been very helpful, especially in the supply of food. Our churches of all denominations and creeds have also been active as has been the Red Cross. I visited Father Rominelli's noodle factory and saw some of our food bounty being put to work. Noodles are increasing in popularity and should increase the consumption of wheat and corn in Asia. In Hong Kong one sees Western civilization at work in a way that makes one proud to be a member of it. JAPAN It is in Japan that the work of Western Wheat Associates, the Great Plains Wheat Market Development Association, and the Foreign Agricultural Serviceall implemented in the beginning by the opportunities embodied in Public Law 480-has had its greatest success. Today, of course, Japan is a dollar market and is very much in the area of commercial competition. The Japanese are students of nutrition and they have a Government policy looking toward this end. This atmosphere was made to order for the work that our American wheat industry set out to do. First by advertising, they pointed out the great desirabiilty of wheat as a supplement to the traditional rice fish diet. They were able to train 1,700 home economists in the better balance that wheat afforded. Today over 60 percent of Japan's schools serve a nutritious lunch, including a one-third pound wheat roll, to well over 10 million children. The results of improved national nutrition, of which the school lunch is a part, are vivid in the children of the new Japan. The average sixth grade boy today is 3 inches taller and 8.3 pounds heavier than his counterpart was in 1946. Our wheat industry men and the FAS has given every encouragement and assistance to the Japan Baker's Training School, a well-staffed and well-equipped institution in Tokyo. In an effort to increase wheat consumption in rural Japan as well as in the urban areas, where it is now over one-third of the diet, bakers were brought to the school from all over Japan. After a 3 month's intensive course, these bakers went back to their prefectures to train more bakers. Over 12,000 bakers are today masters of wheat-flour preparation and baking. But this program also carries the art of wheat flour baking directly to the rural areas by means of kitchen demonstration buses. The program has shown results. In prewar days, the Japanese consumed about 300 pounds of rice and 30 pounds of wheat per person annually. Today rice has dropped to 264 pounds per person per year, while wheat has increased by 300 percent to 90 pounds per person. So effective has been the work of our wheat men and FAS that both Canada and Australia are now following their lead with trade promotion work of their own on wheat. However, as we have noted, Japan is today a dollar market and very much in commercial competition. It is only to be assumed that she will seek to balance her trade where there are consumers for her production. I can only say that our own wheat industry and FAS are watching for every opportunity and are showing no inclination to rest on their oars. One is always impressed when, on the streets of Japan, he sees Japanese with cheesecloth patches tied over their mouths and noses. When one has a cold, this is their preventive measure. While in Tokyo I was invited to visit a poultry farm not far from the city that today produces 70,000 eggs a day and is expanding. When we arrived there on a chilly day in early January 1961, I was invited to wash my hands in a carbolic acid solution and to rinse them in a pan of cold, clear water. This done, I entered the premises, donned boots and a white coat and proceeded to look this modern 3-year-old plant over. New structures were being put up everywhere and in addition they are planning a modern broiler operation. On the way back to Tokyo we visited another broiler operation and I was informed that several of the fishing companies were also looking into the broiler industry as an equal venture with their fishing activities. There can be no doubt of the great potential for such operations in Japan. There is a vast market to supply and the Japanese see it. From the standpoint of wheat, feed grains, and corn, this could become an important market and it, too, is being watched very closely. In short, I was pleased with what I saw on this trip. The forward-looking men of our own wheat industry, the able and alert men who man our agricultural Attaché offices, and the men of our Foreign Service indeed made me proud to represent the United States on this trip. Then, too, the striving for progress that we saw in all of the countries, sometimes against worse than “bootstrap" limitations, was encouraging. One thing that did impress me: There is a determination to work hard to the end that poor diet, malnutrition, and even starvation shall not visit these countries if bounty exists anywhere and the complexities of commerce can somehow overcome them. Mr. WHITTEN. Thank you, Mr. Tetro. Mr. TETRO. Thank you, Mr. Chairman. FEDERAL CROP INSURANCE CORPORATION WITNESSES J. N. LUFT, MANAGER, FEDERAL CROP INSURANCE CORPORATION ERWIN SHRIER, ASSISTANT MANAGER M. E. COLBY, DIRECTOR, UNDERWRITING DIVISION E. C. NEAS, DIRECTOR, CLAIMS DIVISION E. H. NIKKEL, DIRECTOR, SALES AND SERVICING DIVISION G. E. EVANS, DIRECTOR, FINANCE DIVISION J. P. SKEFFINGTON, CHIEF, BUDGET BRANCH CHARLES L. GRANT, DIRECTOR OF FINANCE AND BUDGET OFFICER, DEPARTMENT OF AGRICULTURE Mr. WHITTEN. The committee will come to order. JUSTIFICATION OF THE ESTIMATE We shall like to have pages 1 through 3 and 8 through 17 of th justifications included in the record at this point. (The material referred to follows:) PURPOSE STATEMENT The Federal Crop Insurance Corporation is a wholly owned Governmen Corporation created February 16, 1938 (7 U.S.C. 1501) to carry out the Federa Crop Insurance Act. The purpose of this act is to promote the national welfar by improving the economic stability of agriculture through a sound system o crop insurance and providing the means for research and experience helpful i devising and establishing such insurance. Crop insurance offered to agricultural producers by the Corporation provide protection from losses caused by unavoidable natural hazards, such as insec and wildlife damage, plant diseases, fire, drought, flood, wind, and other weathe conditions. It does not indemnify producers for losses resulting from negligenc or failure to observe good farming practices. In accordance with the established policy of limited operation on an experi mental basis, the 1961 crop insurance program (fiscal year 1962) will operat in 895 counties, furnishing insurance coverage of approximately $365 million on wheat, cotton, flax, corn, tobacco, beans, citrus, combined crops, soybeans, barley, peaches, grain sorghum, oats, and rice. It is estimated that 390,000 crops will be insured for the 1961 crop year, as compared to 330,525 for the 1960 crop year. A summary of insurance operations and changes in capital for the past fiscal year 1960, and estimates for the fiscal years 1961 and 1962 follow: The crop insurance programs are developed and analyzed in the Washington headquarters office and are administered in the field by 21 State or area offices. Sales and servicing of contracts at the county level is performed by private agents under contractual agreements with the Corporation, and by Federal Crop Insurance Corporation employees hired on a part-time or w.a.e. (when actually employed) basis. Detailed program accounting and statistical functions are performed by a branch office in Chicago. As of November 30, 1960, the Corporation employed 488 full-time employees, 97 of whom were in Washington and the balance in the field, and 593 part-time or w.a.e. employees, all in the field. NOTE.-The 1962 budget estimate includes $2,830,000 for operating and administrative expenses of the Corporation payable from premium income and $6,561,000 by annual appropriation. For clarity and completeness, the following project statement and justification covers the total estimate required for operating and administrative expenses of the Corporation. Summary of increases, 1962 Increase in underwriting and actuarial analysis costs. Project statement 1 Represents obligations. Applied costs for 1960 are $6,342,186. The difference of $34,514 reflects, primarily, the excess of printing and supplies ordered over those received and used in 1960. STATUS OF PROGRAM The Federal Crop Insurance Corporation is a wholly owned Government corporation which provides all-risk crop insurance protection against unavoidable causes of loss. Since 1948, the program has been operating in selected counties on a limited basis. The objective is the development of a sound program that can be operated on a national basis. Expansion of the program has been limited to an extent deemed consistent with sound insurance principles. Summary of experience 1948-59.-During this 12-year period premiums of $226.6 million exceeded indemnities of $220.2 million by $6.4 million. Premiums exceeded indemnities in 6 of the 12 years since the program was placed on an experimental basis in 1948. The number of counties in which crop insurance is offered has increased from 375 in 1948 to 847 in 1959; and the crops insured from 169,125 to 339,463. Wheat continues to predominate the Corporation's cumulative experience. Of the total premiums of $226.6 million, $127.8 million or 56 percent was derived from the wheat program. Wheat indemnities were $122.6 million or 56 percent of the total. The loss ratio for wheat for the period is 0.96 compared to 0.97 for all commodities. Of the 13 commodities on which crop insurance was offered during the period only 3 have a loss ratio in excess of 1. Combined crop is 1.29, corn 1.12, and beans 1.14. The following tables summarize the experience for the period 1948 to 1959 by crops and years. 1948. 1949. 1950. 1951 1952 1953. 1954 1955 1956 1957 1958 1959 Total Crop [Dollars in thousands] Premiums Indemnities Loss ratio $127, 812 $122, 570 0.96 Summary of experience by years, 1948 to 1959, inclusive 1 Excess of indemnities over premiums indicated by minus sign. Operating experience 1959.-For the third consecutive year premiums exceeded indemnities. The 1959 crop year premiums of $18.5 million exceeded indemnities of $14.1 million by $4.4 million for a loss ratio of 0.76. The loss ratios for 1957 and 1958 were 0.69 and 0.26. Indemnities exceeded premiums on four commodities, flax, peaches, barley, and combined crops, for the 1959 crop year. Wheat, which represents a major portion of the insurance coverages, again had a favorable year with a loss ratio of 0.68. In 1959, insurance was offered in 847 counties. The following table indicates the distribution of county participation by commodity and State. |