that it is not possible to do that in some cases and in any case where it could be done, we would do it, of course. Mr. HORAN. Well, to a person interested in economy, in political science, bureaus and the size of bureaus, and the duplication of work, I think it would be quite eloquent to make a trip from Maine to Vancouver, British Columbia, and observe the various methods of operation of our ports of entry between the Canadians and ourselves. Mr. THOMPSON. We do the duplicating service, mimeographing service in one office where we have indicated, for instance on these forms, more than one reporting service act in a single town. It generally means a single office as far as the housekeeping is concerned. There is only one single Government office. Many of the markets provide free space right at the particular commodity market place for the reporting that Mr. Trigg described. He collects the statistics. We utilize a single leased-wire service and we have an integrating committee that is part of my staff that marries together the operations of the several commodity branches, but you can well realize there is a big difference in marketing of several commodities and it requires specialization on the part of the reporters themselves, and requires more than one reporter. Nevertheless, where possible, as at a point like Birmingham, we may have a one-man office there where he reports not only fruits and vegetables but grains, feeds and other things as well until it gets to such a volume that a second man in a second location would be necessary in order to get a true picture of all the market at one time. I do not think that we find duplication to the extent that would appear just looking at a map of our leased wire service indicating the services performed at the various points. (The information requested was not received in time for printing and will be found in the appendix.) Mr. WHITTEN. Before we close I wish to request that you furnish for the record a break-down for the past several years, showing the amount of ACP funds allocated to each State, any unused balances, and the counties in which such balances developed. If there are no further questions, Mr. Trigg, I believe that concludes the hearings of your department. We appreciate your cooperation. We have tried to get as much information as we could. It is a tremendous problem and we know you have your hands full and apparently the committee has its hands full in trying to determine how we are going to carry on. But I suspect the same problem faces lots of other Americans. Mr. TRIGG. Mr. Chairman, I greatly appreciate the friendly attitude and the cooperative attitude of this committee toward us in these hearings and throughout the year, and if we have not furnished all the information that might be needed here we will certainly supply it for the record or we can give any additional statements are are necessary. We certainly appreciate your consideration and the manner in which you have gone about it. WEDNESDAY, FEBRUARY 8, 1950. FEDERAL CROP INSURANCE CORPORATION WITNESSES GUS F. GEISSLER, MANAGER, FEDERAL CROP INSURANCE CORPORATION CARL A. FRETTS, CHIEF, FINANCE DIVISION, FEDERAL CROP INSURANCE CORPORATION JAMES L. BUCKLER, BUDGET OFFICER, FEDERAL CROP INSURANCE CORPORATION RALPH F. KOEBEL, ATTORNEY, OFFICE OF THE SOLICITOR M. ELDON COLBY, CHIEF, UNDERWRITING DIVISION, FEDERAL CROP INSURANCE CORPORATION RALPH S. ROBERTS, DIRECTOR OF FINANCE AND BUDGET OFFICER, DEPARTMENT OF AGRICULTURE Mr. WHITTEN. The committee will come to order. We are glad to have with us Mr. Geissler and his associates from the Federal Crop Insurance Corporation. I would like to have pages 486 and 487 of the justifications inserted in the record at this point. (The pages referred to are as follows:) PURPOSE STATEMENT The Federal Crop Insurance Corporation was created February 16, 1933, to alleviate the economic distress caused by crop failures due to unavoidable causes. In accordance with Public Law 268, approved August 25, 1949, all insurance programs are being conducted on a gradual expansion basis to develop the experience necessary to operate successful national programs. The insurance program falls into two broad types of coverage; namely, commodity and monetary. Commodity insurance guarantees production in bushels or pounds of the commodity, and is being used as the higher coverage type designed to provide protection approximating the investment in the crop. Monetary insurance, guaranteeing an amount in dollars, is a lower premium and lower coverage type offered to farmers who feel they can absorb greater losses but require protection for out-of-pocket costs. An insurance policy covering a single crop is used in the greater number of counties. The Corporation realizes that in general farming areas where farm income is diversified the insurance of a single crop does not provide the most satisfactory insurance. Consequently, it has developed a multiple-crop insurance policy which will cover a number of crops combined. Under this policy the coverage for all crops insured on the farm is combined, and a loss under the policy arises only when the value of the total production of the insured crops does not equal the combined average. The farmer benefits from the more comprehensive coverage and the lower premium rates resulting from combined coverage; the Corporation assumes less potential liability through the greater spread of risk. Insurance is being offered in crop year 1950 in a total of 637 counties covering wheat, cotton, flax, corn, tobacco, bean, and multiple crops. It is proposed to expand the program in crop year 1951 to 877 counties. 1 Data for fiscal years 1950 and 1951 do not agree with 1951 budget but are based on estimates as of Dec. 31, 1949, which were included in the annual report of the Corporation submitted to the Congress in accordance with the Federal Crop Insurance Act. The crop-insurance programs are developed and analyzed mainly in the headquarters office and are administered in the field through 30 State offices and through cooperative agreements with the Production and Marketing Adminis tration county committees. Program accounting and contract servicing funetions are performed by the branch office in Chicago. As of November 30, 1949, the Corporation employed 441 full-time employees, 126 of whom are in Washington, and the balance in the field; and 448 part-time field employees. Appropriated funds (operating expenses): $5, 123, 000 7,450,000 Estimated, 1950---- Funds available for obligation 1949 actual 1950 estimate 1951 estimate Includes $1,000,000 appropriated in Second Supplemental Appropriation Act 1950. Mr. WHITTEN. Mr. Geissler, we will be glad to have your statement at this time. Mr. GEISSLER. We have a prepared statement which I think has been distributed. In the interest of saving time you will probably want to insert that in the record. Mr. WHITTEN. We will insert it and let you substitute for it a brief oral statement. (The material referred to is as follows:) STATEMENT OF GUS F. GEISSLER, MANAGER, FEDERAL CROP INSURANCE CORPORATION, BEFORE THE HOUSE SUBCOMMITTEE ON AGRICULTURAL APPROPRIATIONS OBJECTIVE The long-range objective of Federal crop insurance is to promote the national welfare by improving the economic stability of agriculture through a sound system of crop insurance. In addition to the original act, other major steps in this direction were achieved when the Crop Insurance Act was amended by Public Law 320, approved August 1, 1947, and by Public Law 268, approved August 25, 1949. 60623-50-pt. 5- -14 LIMITED PROGRAM Public Law 320 made the following program changes: Provided that insurance could be offered in not to exceed 200 wheat, 56 cotton, 50 flax, 50 corn, and 35 tobacco counties. Insurance could be offered also on not to exceed 3 additional commodities in 20 counties, each during each succeeding crop year; reduced the maximum coverage to the general level of investment in the crop; authorized use of the same fixed price for establishing premiums and determining indemnities for an insured crop. This feature eliminated the necessity for hedging operations; authorized the Corporation to reinsure experimentally private insurance companies who would undertake to write all-risk crop insurance; provided broad authority for trying out different plans of insurance; increased the minimum participation requirement for a county from 50 to 200 farms for each commodity insured; and limited insurance on a commodity to counties in which the commodity provides an important part of the farm income. EXPANSION OF THE PROGRAM To implement the long-range objective set for crop insurance, the Congress passed Public Law 268, approved August 25, 1949, outlining a formula for gradual expansion of the program. This formula provides that the number of counties in which insurance can be offered may be increased each year through 1953 by 50 percent of the basic authorization. This would mean 100 wheat, 28 cotton, 25 each of flax, corn, and multiple crop, and 17 tobacco counties can be added each year. In addition, other crops, such as dry beans, may be increased by 10 counties after the program has been in operation 3 years. For crop year 1950 the Corporation will be in about 637 counties. While it is too early to predict total participation, preselection meetings in counties indicated an enthusiastic response. In several counties, petitions requesting the program were signed by over 1,000 farmers. In crop year 1951, the Corporation proposes to increase the number of counties to 877, including 10 counties for a new individually insured commodity. OPERATIONS UNDER THE NEW PROGRAM Crop year 1948 was the first year of operations under the new limited program. Insurance was offered in 375 counties on wheat, cotton, flax, corn, tobacco, dry edible beans, and multiple crop. The multiple-crop program was the Corporation's aproach to the insurance problem of farmers producing several insurable crops, none of which alone constituted the major source of agricultural income of the county. This policy was used in two counties and covered wheat, corn, flax, beans, and oats. The 1948 crop year was a good one. Premiums exceeded indemnities by $5,784,000. The operating results were in line with accepted insurance principles of building up reserves in good-crop years to cover losses in poor-crop years. The same type of insurance programs were continued in crop year 1949. Nineteen more counties were added mostly to the bean and multiple-crop program. Due to unfavorable crop conditions in several major wheat and cotton areas over-all insurance operations are estimated to result in indemnities exceeding premiums by $2,663,000. The wheat crop was severely damaged in Kansas, Nebraska, North Dakota, South Dakota, and Montana resulting in the lowest average yield per acre during the last 10 years. Net losses on wheat are estimated at $3,490,000. Although the western part of the Cotton Belt experienced unusually good crops, in the central and eastern parts there were many areas where the yield ranges from 30 percent below normal to no harvest at all. This situation is expected to result in a net loss on cotton of approximately $750,000. The remaining programs show excess of premiums over indemnities amounting to $1,577,000. The estimated operating results are in keeping with the crop conditions that prevailed. A review of individual county expereicence shows a good correlation between the 1949 insurance experience and crop conditions. The combined experience of 1948 and 1949 leaves each crop with an insurance reserve. IMPROVEMENTS IN PROGRAM OPERATIONS The Corporation instituted many changes to improve operations, make the program financially sound, and better serve the needs of the farmers. Multiple-crop insurance is probably the outstanding development. earlier, this policy was designed to afford protection of investment to farmers As stated |