Mr. ANDERSEN. Mr. Anderson is on the board. Mr. Munger is the chairman. Mr. COLVIN. They will be glad to answer any questions. Mr. ANDERSEN. I understand there are 11 other members. Who is the member appointed by the Secretary? Mr. COLVIN. Mr. Frank Peck. He is director of the Farm Foundation of Chicago. BREAKDOWN OF SUPPLEMENTAL REQUEST Mr. ANDERSEN. Mr. Colvin, we had best have a breakdown in the record, please, of each of the three items, showing the number of positions, cost of personnel, travel, supplies, and so forth. Mr. COLVIN. All right, sir. (The information requested is as follows:) Subtotal____ Supervisory and administrative expenses formerly paid from appropriated funds 1 $30, 000 7,500 18, 750 11, 300 67, 550 34, 300 750 35, 050 37, 400 Total___ 140, 000 1 In the original 1954 estimates, $78,900 of FCA personal service cost was allocated to the general fund appropriation for cooperative research and service. Upon the transfer of the activity to Farmer Cooperative Service, all appropriated funds were released but only $39,100 of positions formerly financed from the $78,900 of appropriations were transferred. The remainder of $39,800 is the cost of the fractional time of employees essential to the operation of FCA. The cost of these positions was formerly shared by the two activities and funds. As the greater percentage of their time was devoted to activities related to the supervision of the Farm Credit banks and corporations, these employees are to be retained by Farm Credit Administration and paid from additional assessments of $37,400, $2,400 having been absorbed. Mr. ANDERSEN. That will conclude our hearings on this item. Thank you, gentlemen. DEPARTMENT OF AGRICULTURE TUESDAY, MARCH 9, 1954. COMMODITY CREDIT CORPORATION WITNESSES R. P. BEACH, BUDGET OFFICER, COMMODITY STABILIZATIONTM SERVICE PRESTON RICHARDS, VICE PRESIDENT, COMMODITY CREDIT CORPORATION JOSEPH C. WHEELER, DIRECTOR OF FINANCE AND BUDGET OFFICER, DEPARTMENT OF AGRICULTURE INCREASE IN LIMITATION ON ADMINISTRATIVE EXPENSES Mr. ANDERSEN. Gentlemen, we will now consider an item presented to us in House Document 330 for the Commodity Credit Corporation. We have with us Mr. R. P. Beach, Budget Officer, and Mr. Preston Richards, Vice President of the Commodity Credit Corporation. The estimate is for $3 million additional for the limitation on administrative expenses of the Commodity Credit Corporation, for 1954 fiscal year. We will place in the record at this point the language requested in House Document No. 330 and pages 1 through 9 of the justifications.. (The material referred to is as follows:) COMMODITY CREDIT CORPORATION The limitation under this head in the Department of Agriculture Appropriation Act, 1954, on the amount available for administrative expenses of the Corporation, is increased from "$17,100,000" to "$20,100,000". Administrative expenses, Commodity Credit Corporation, 1954 (H. Doc. 330) Request, for 12 months from May 13, 1954. Limitation to date. Obligations to Jan. 31, 1954 Expenditures to Jan. 31, 1954.. Employment: Average number current limitation. Actual employment, Jan. 31, 1954 (man-months) Average number involved this estimate.. $3, 000, 000 $17, 100, 000 PURPOSE AND NEED FOR SUPPLEMENTAL FUNDS 2,835 576 3, 271 At the time the revised fiscal year 1954 budget estimate was submitted to Congress, it was pointed out (pp. 1595-1597, Hearings before the Subcommittee of the Committee on Appropriations, House of Representatives, and on page 581, Hearings before the Subcommittee of the Committee on Appropriations, United States Senate) that "if current estimates of program volume materialize fully, it will be necessary to request the Bureau of the Budget to apportion the limitation * * * in such manner as to provide needed funds for the early quarters of the fiscal year, even though such a rate could not be continued for the full year with a limitation of $17,100,000.” At that time it was estimated that $17,800,000 would be required, or an increase of $700,000 over the present limitation. However, subsequent workload developments and present program volume estimates indicate a deficit of $3 million, $2,300,000 more than previously estimated. Accordingly, the Bureau of the Budget was requested to apportion the present limitation of $17,100,000 on a basis which indicated that additional funds would be necessary to complete the fiscal year. The Bureau of the Budget approved the apportionment as requested and as outlined in a letter dated September 24, 1953, from the Director of the Bureau of the Budget to the Speaker of the House of Representatives. Current program volume estimates indicate that carlot acquisitions of all commodities except cotton will increase 49 percent over the estimated volume upon which the fiscal year 1954 revised budget estimate was predicated. Carlot dispositions are anticipated to exceed the 1954 revised budget estimate by 69 percent. The attached table 1 reflects a comparison of the program volume estimates as shown in the revised budget estimate for the fiscal year 1954 with the current estimates. The major changes in program volume have been in connection with wheat, corn, cotton, and dairy products. Wheat.-Present estimates indicate that wheat placed under loan will increase from 300 million bushels to 427 million bushels, an increase of 42 percent. Acquisitions through the forfeiture of wheat pledged as collateral for price support loans are estimated to increase from 121,500,000 bushels to 302,500,000 bushels, an increase of nearly 150 percent. As a result of the act providing price support wheat for Pakistan, wheat sales are expected to increase from 50 million to 85 million bushels. Corn. Although the volume of corn placed under loan is expected to decrease slightly below the previous estimate, the acquisitions resulting from the forfeiture of corn pledged as collateral for such loans is estimated to increase from 250 million bushels to 360 million bushels, an increase of 44 percent. In addition, it is estimated that sales of corn will amount to 100 million or an increase of 25 million bushels. Cotton. The revised budget estimate for the fiscal year 1954 anticipated that 4,500,000 bales of Upland cotton would be placed under loan. However, through the week ending February 5, 1954, 6,565,468 bales had been placed under loan. Consequently, it is currently estimated that the total volume will be 7,250,000 bales. Partially offsetting this increase in cotton-loan workload is the extension of the 1952 crop cotton loan maturity date which results in the shifting of takeover activities from the fiscal year 1954 to the fiscal year 1955. Dairy products.-Present estimates indicate that acquisitions of dairy products will exceed the estimated volume contained in the revised budget estimate for fiscal year 1954 by 170 percent. Butter acquisitions are anticipated to increase from 100 million pounds to 211 million pounds, acquisitions of cheese are estimated to increase from 60 million pounds to 240 million pounds, and milk acquisitions from 250 million to 490 million pounds. Dispositions of these commodities are estimated to increase slightly. Emergency storage fleet. In addition to the increase in program volume and as a result of the heavy volume of wheat in inventory and under price-support loans, the Corporation, in order to alleviate a serious shortage of grain storage facilities, has entered into an agreement with the Maritime Administration making 125 ships available for the storage of wheat. Under this agreement, the Corporation will provide suitable staffing to assure adequate care of the grain. This cost was not included in the revised budget estimate for fiscal year 1954. The estimated increases in financial requirements resulting from the increases in program volume estimates and other items of expense not provided for in the revised budget estimate for the fiscal year 1954 are itemized by functions as follows: Adjusted to reflect transfer of administrative accounting functions ($221,000) from CSS commodity offices to Fiscal Division. (1) An increase of $2,907,191 in program field operations Increased program volume.In addition to the $700,000 deficit indicated in the revised budget estimate for the fiscal year 1954 it is estimated that an additional $2,102,191 will be required, bringing the total increase resulting from increased program volume to $2,802,191. The impact of the heavy increase in the volume of commodity operations will occur in the workload of the CSS commodity offices. Through an analysis of the monthly work status reports which indicate the volume of work received, completed, and on hand for these offices, it is possible to effect a continual check on the workload and corresponding financial requirements of these offices. The analyses indicate that incoming workload is running considerably higher than previously estimated and that work on hand is increasing and is now at a relatively high level. Such factors indicate that present workload and financial requirements are in line with estimated program volume. Establishment of new commodity office.-In order to increase the effectiveness of present operations and in order to relieve the other commodity offices of burdensome backlogs, a new office is being established at Cincinnati to handle processed commodities for the Commodity Stabilization Service. The bulk of the work in this office will be conducted by employees paid from funds transferred from existing offices. It is estimated, however, that the initial additional cost of establishing the office (supervisory personnel, rent, transfer of personnel from the other offices, etc.) will be $105,000. (2) An increase of $92,809 for other operations As a result of the increased workload and employment in the program field operations of the Corporation, costs of other operations such as the printing of loan forms, warehouse scale tickets, etc., and the testing and inspection of grain bins have exceeded previous estimates. These increased costs have been partially offset by an estimated decrease in audit and compliance and investigation services resulting in part from savings achieved through a consolidation of audit field offices. Inasmuch as it is estimated that obligating authority will expire on May 13, it is urgent that this request be approved as soon as possible so that work plans can be developed to handle workload for the balance of the fiscal year. |