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FOREIGN ASSISTANCE PROGRAMS Continued

General and special funds-Continued

PUBLIC LAW 480-Continued

2. Commodities disposed of for emergency famine relief to friendly peoples. Under title II of the Agricultural Trade Development and Assistance Act of 1954, Public Law 480, as amended (7 U.S.C. 1703, 1721-1724), the Commodity Credit Corporation makes its surplus stocks of agricultural commodities available to the President for famine relief and other assistance to friendly nations and friendly peoples in meeting famine or other relief requirements and pays ocean freight charges for the shipment of donated commodities.

Public Law 86-472, enacted May 14, 1960, authorized payment of transportation to point of entry of landlocked countries and general average contributions arising out of ocean transport of commodities transferred under title II. Public Law 87-92, approved July 20, 1961, continued the authority of the President under section 202, title II, to utilize surplus agricultural commodities to assist needy peoples and to promote economic development in underdeveloped areas of the world.

Under this program, the Corporation will also transfer surplus agricultural commodities from its stocks and finance ocean freight charges to carry out participation of the United States in the 3-year experimental World Food Program established by resolutions of the General Assembly and of the Food and Agriculture Organization of the United Nations.

Appropriations are authorized to reimburse the Corporation for its costs in carrying out the program. Through December 31, 1959, a total of $800 million was authorized. From January 1, 1960, $300 million per calendar year is authorized through December 31, 1961, plus unused balances of the previous authorization, making a total of $1.4 billion.

Public Law 87-128, approved August 8, 1961, amended section 203 of title II limiting to $300 million, plus any unused preceding year's authorization, the appropriations to reimburse Commodity Credit Corporation (including Commodity Credit Corporation's investment in commodities made available) which can be made in any calendar year beginning January 1, 1961, and ending December 31, 1964, and extending to December 31, 1964, the programs of assistance which may be undertaken under this title.

The following reflects the composition of the appropriations for 1962, 1963, and 1964.

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3. Long-term supply contracts.-Under title IV of the Agricultural Trade Development and Assistance Act (7 U.S.C. Supp. 1, 1731-1736), the President, in order to stimulate and increase sales for dollars, is authorized to make agreements with friendly nations, including financial institutions, or with the private trade under which the United States would deliver surplus agricultural commodities over periods of up to 10 years and accept payment in dollars with interest over periods of up to 20 years.

During 1962, a total of 9 agreements or amendments to agreements were signed with 6 countries for commodities representing an export market value of $57 million, including ocean transportation.

The following reflects the composition of the appropritions for 1962, 1963, and 1964:

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1962.

1963 (estimate).

Total expenses-current year's costs recoverable from appropriations.........

1964 (estimate).

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Unobligated balance available:

Cumulative totals.

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Deduct recoveries from foreign governments..

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575,355 5,017 580,372 15,200 560, 155 4,217 564,372

800 16,000

132,000

432,372

247,988 1,000 248,988 298,412 4,000 302,412

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Law 540, Eighty-fourth Congress (7 U.S.C. 1856), [$125,000,000] $82,860,000, to remain available until expended. (Department of Agriculture and Related Agencies Appropriation Act, 1963.)

Program and Financing (in thousands of dollars)

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Program by activities:

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Bartered materials for supplemental stockpile (cost-obligations) (object class 41). 125,000 Financing:

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The International Wheat Agreement Act, as amended (7 U.S.C. 1641-1642), which was renewed for a period of 3 years effective August 1, 1962, operates to provide an assured market for wheat to exporting countries at stable and equitable prices. The maximum and minimum prices in the 1962 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, in terms of Canadian currency at the parity for the Canadian dollar determined for the purposes of the International Monetary Fund as at March 1949. The total quantity traded under the agreement in the 1961-1962 crop year represented about 39% of world trade in wheat, yet the 10 exporting member countries export inside and outside the agreement over 97% of all wheat moving in world

trade.

The Commodity Credit Corporation makes available wheat or wheat flour to carry out the provisions of the agreement, including the payment-in-kind to the exporter for the difference between the prevailing sales price of wheat under the agreement and the domestic market price. A cash payment for this differential is made for flour.

The following reflects the composition of the appropriations for 1962, 1963, and 1964:

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New obligational authority (appropriation)... 125,000

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 as a result of barter and exchange of agricultural commodities other than those acquired for the national stockpile or for other purposes. Appropriations are authorized for the value of materials transferred to the stockpile at the lower of cost or market value at the time of the transfer.

The following reflects the composition of the appropriations for 1962, 1963, and 1964:

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REIMBURSEMENT FOR NET REALIZED LOSSES

To [partially] reimburse the Commodity Credit Corporation for net realized losses sustained during the fiscal year ending June 30, [1961] 1962, pursuant to the Act of August 17, 1961 ([75 Stat. 391), $2,278,455,000] 15 U.S.C. 713a-11, 713a-12), $2,799,400,000. (Department of Agriculture and Related Agencies Appropriation Act, 1968.)

[REIMBURSEMENT FOR SPECIAL MILK PROGRAM]

[To reimburse the Commodity Credit Corporation for amounts advanced for the fiscal year beginning July 1, 1961, for the special milk program for children pursuant to the Act of July 1, 1958, as amended (7 U.S.C. 1446; 75 Stat. 147-148, 319), $95,000,000.] (Department of Agriculture and Related Agencies Appropriation Act, 1963.)

Reimbursement to COMMODITY CREDIT CORPORATION, NATIONAL
WOOL ACT

(Permanent, indefinite)

Public enterprise funds:

Note. Expenditures from the following fund for 1963 are subject to the first paragraph of title III of the Department of Agriculture and Related Agencies Appropriation Act. 1963. For 1964 this paragraph is shown in the Department of Agriculture chapter, p. 145, preceding Federal Crop Insurance Corporation fund.

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ables, Foreign assistance programs. Costs recoverable from other funds..

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2,460,388
184,565
-511,276

Total budget expenditures..

Subtotal....

2,076,639

Repayment of loans for agricultural

conservation purposes. Total revenues and receipts.

Total, special activities..

Total obligational authority, revenues and other receipts..

9,674,346

Unobligated balance brought forward

Unobligated balance carried forward

(authorization to expend from public debt receipts)3.

111,915

(authorization to expend from public debt receipts).

Financing applied to program...

-189,918 9,596,342

180

2,133,857
50.000

2,082,306
38,100 42,100
2,114,739 2,124,406 2,183,857
4,051,932 2,193,539 2,252,857

9,840,820 10,488,037

189,918 420,991

-420,991 -1,331,996 9,609,747 9,577,032

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492,652 333,982 --420,909 2,635,785 3,185,639 1,387,198

Under its corporate charter (15 U.S.C. 714-714p), and specific statutes where applicable, the Commodity Credit Corporation engages in buying, selling, lending, and other activities with respect to agricultural commodities, their products, food, feeds, and fibers, for the purpose of stabilizing, supporting, and protecting farm income and prices; assisting in the maintenance of balanced and adequate supplies of such commodities; and facilitating their orderly distribution. The Corporation also makes available materials and facilities required in connection with the production and marketing of such commodities.

The Corporation has an authorized capital stock of $100 million held by the United States and authority to borrow up to $14.5 billion.

Programs.-The budget is based on (1) price support, export, supply, and related programs and (2) special activities.

Obligations and expenditures for these programs include primarily loans, purchases, purchase agreements, carrying charges, incentive and other payments, operating and interest expenses, and advances and current obligations incident to special activities as authorized by specific legislation.

Budget assumptions.-The following general assumptions form the basis for the Corporation's 1963 and 1964 budget estimates: (a) employment, production, and national income will rise moderately both in 1963 and 1964 from the present level; (b) on the average, the general level of prices will be the same as or increase slightly over the present level; (c) developments in international relations will not be such as to affect Government civilian programs generally; (d) exports of agricultural commodities in the fiscal year 1964 will be at about current levels; (e) yields for the 1963 crops generally are based on recent averages adjusted for trend; and (f) acreage allotments and marketing quotas will be in effect for the 1963 crops of peanuts, rice, wheat, cotton, and certain kinds of tobacco. Compliance with provisions of the Food and Agriculture Act of 1962, the provisions of the 1962 and 1963 special agricultural conservation program for feed grains and the wheat stabili4,536,155 5,533,501 5,386,480 zation programs should result in substantial acreage

7,355,954

7,322,302 7,415,495
-643,014 969,663 -161,367
6,679,288 8,385,158 7,194,587

4,518,304 5,277,426 5,435,780

17,851 256,075 -49,300

33 2,851,657 1,808,107

2,143,133

reductions in those commodities. The estimates for the
feed grain and wheat stabilization programs assume
diverted acreage based on probable signups by coopera-
However, the full impact of these programs

COMMODITY CREDIT CORPORATION-Continued

Public enterprise funds-Continued

COMMODITY CREDIT CORPORATION FUND-Continued cannot be accurately predicted until the final returns of actual participation are received for these crops.

In considering these estimates, it should be recognized that it is difficult to estimate requirements for the year ending June 30, 1964. They are dependent upon weather conditions and all other factors affecting volume of production of crops not yet planted in this country and abroad, economic conditions generally, food needs in this country and abroad, availability of dollar exchange, and other complex and unpredictable factors.

PRICE SUPPORT, EXPORT, SUPPLY, AND RELATED PROGRAMS

Price support.-Price-support operations are carried out under the Corporation's charter powers (15 U.S.C. 714) and in conformity with the Agricultural Act of 1949, as amended (7 U.S.C. 1421), and other applicable legislation including the Food and Agriculture Act of 1962, Public Law 87-703. Under the Agricultural Act of 1949, as amended, price support is mandatory for the basic commodities-corn, cotton, wheat, rice, peanuts, and tobacco-and specific nonbasic commodities; namely, tung nuts, honey, milk, butterfat, and the products of milk and butterfat, barley, oats, rye, and grain sorghums. Price support for wool and mohair is mandatory under the National Wool Act of 1954, as amended (7 U.S.C. 1781– 1787), through the marketing year ending March 31, 1966. Price support for other nonbasic agricultural commodities is discretionary except that whenever the price of either cottonseed or soybeans is supported, the price of the other must be supported at such level as the Secretary determines will cause them to compete on equal terms on the market. This program may also include operations to remove and dispose of or aid in the removal or disposition of surplus agricultural commodities for the purpose of stabilizing prices at levels not in excess of permissible price-support levels.

Price support is made available through loans, payments, purchase agreements, purchases, and other operations, and, in the case of wool and mohair, through incentive payments based on marketings. Producers' commodities serve as collateral for price-support loans. With limited exceptions, price-support loans are nonrecourse and the Corporation looks only to the pledged or mortgaged collateral for satisfaction of the loan. Purchase agreements generally are available during the same period that loans are available. By signing a purchase agreement, a producer receives an option to sell to the Corporation any quantity of the commodity he may elect within the maximum specified in the agreement. Direct purchases are made from producers and processors depending on the commodities involved. Under section 308 of the Agricultural Trade Development and Assistance Act of 1954. as amended, purchases of animal fats and edible oils and products thereof are authorized as will tend to maintain the support level for cottonseed and soybeans without requiring the acquisition of such commodities under the usual loan and purchase agreements of the price-support program. Under section 416 of the Agricultural Act of 1949, as amended, price supported commodities in private stocks are made available for donation in order to prevent the waste thereof before such commodities can be disposed of in normal domestic channels without impairment of the price-support program or sold abroad at competitive

world prices. The incentive payment program and mohair is described under Special activities

In all its price support operations, the Co utilizes normal trade facilities to the maximu practicable. In its lending activities the Co uses local banks, cooperatives, and other financi tions. Commercial storage facilities are used extent in the storage of loan collateral and of quired by the Corporation.

Disposition of commodities acquired by the Co in its price-support operations is made in compli sections 202, 407, and 416 of the Agricultural Ad as amended, and other applicable legislation, på the Agricultural Trade Development and Assis of 1954, Public Law 480, 83d Congress, as an U.S.C. 1691), title II of the Agricultural Act o amended, the Agricultural Act of 1961, the act 19, 1958, in the case of cornmeal and wheat flo Law 86-299 (7 U.S.C. 1427 note) along with P 87-127, with respect to sale of livestock feed in e areas, and the Food and Agriculture Act of 1961

Price-support commodities in Commodity Cre ration inventory which are disposed of through modity export program, redemption of payme certificates, and special activities such as sales f currencies are, for accounting purposes, credit price-support program.

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6,590,278

590,441

1,285,566

1,279,485

1,100,627

Investment in price support as of June 30. 6,657,026
Net expenditures..
Realized losses._

Commodity export. -The Corporation pron export of agricultural commodities and produc sales, barters, payments, and other operation than in barters for stockpiling purposes, such co and products may be those held in private trad as well as those acquired by the Corporation in support operations. This program is carried the authority contained in the Corporation' particularly sections 5(d) and 5(f), and in & with specific statutes where applicable, such 407 and 416 of the Agricultural Act of 1949, as the International Wheat Agreement Act of amended (7 U.S.C. 1641), the Agricultural Trad ment and Assistance Act of 1954, as amended the Agricultural Act of 1954, title II of the A Act of 1956, as amended, and section 9 of the tember 6, 1958. In general, transactions involv currencies are conducted pursuant to the A Trade Development and Assistance Act of amended. However, other such transactions conducted under the charter authority.

Based on recommendations of the Executive Committee, approved by the President on Sep 1962, the emphasis of the barter program will from acquisition of strategic and critical materi supplemental stockpile to its use in various ty shore procurement programs for the Departme fense, the Agency for International Develop

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