"(3) distribute surplus food in commercially packaged form, preferably through normal channels of trade;

"(4) establish standards under which, pursuant to subsection (c), the welfare authorities of any State or political subdivision thereof may participate in the food stamp plan for the distribution of surplus foods to the needy;

"(5) consult the Secretary of Health, Education, and Welfare, and the Secretary of Labor, in establishing standards for eligibility for surplus foods and in the conduct of the program generally to assure achievement of the goals outlined in subsection (a) of this section; and

"(6) make such other rules and regulations as he may deem necessary to carry out the purpose of this section.

"(c) The Secretary shall issue, to each welfare department or equivalent agency of a State or political subdivision requesting the distribution of surplus food under subsection (b) (1), food stamps for each kind of surplus food to be distributed, in amounts based on the total amount of surplus food to be distributed and on the total number of needy persons in the various States and political subdivisions eligible to receive such food. The food stamps shall be issued by each such welfare department or equivalent agency to needy persons receiving welfare assistance, or in need of welfare assistance but ineligible because of State or local law, and shall be redeemable by such needy persons at local distribution points to be determined by the Secretary under subsection (b) (3).

"(d) Receipt by any person of benefits under this section shall not be deemed to be income or resources under the provisions of the Social Security Act or any other Federal legislation pertaining to the security of the aged, blind, disabled, dependent children, unemployed, or other similar groups. Any State or local subdivision thereof which decreases the cash or other assistance extended to any person or group as a consequence of the assistance made available under this section shall be ineligible for further participation under this section. "(e) Surplus foods to be distributed under this section shall be limited to surplus foods acquired under the Agricultural Act of 1949 or diverted from the normal channels of trade under section 32 of Public Law 320, Seventyfourth Congress.

"(f) For the purposes of this section, a needy person is anyone receiving welfare assistance (financial or otherwise) from the welfare department or equivalent agency of any State or political subdivision thereof, or who is, in the opinion of such agency or agencies, in need of welfare assistance but is ineligible to receive it because of State or local law.

"(g) The Secretary of Agriculture, in consultation with the Secretary of Health, Education, and Welfare and the Secretary of Labor, shall make a study of, and shall report to Congress within six months after the date of enactment of this section, on the feasibility of, the costs of, and the problems involved in, extending the scope of the food stamp plan established by this section to include persons receiving unemployment compensation, receiving old-age and survivors insurance (social security) pensions, and other low-income groups not eligible to receive food stamps under this section.

"(h) There are hereby authorized to be appropriated, out of any money in the Treasury not otherwise appropriated, such sums as may be necessary to carry out the purposes of this section."

Section 307 (a new section under title III) requires the Secretary of make any surplus food commodity available for domestic relief in such quantities as he determines are reasonably necessary before making such quantities available for sale under title I.

"SEC. 307. Whenever the Secretary of Agriculture determines under section 106 of this Act that any food commodity is a surplus agricultural commodity, insofar as practicable he shall make such commodity available for distribution to needy families and persons in the United States in such quantities as he determines are reasonably necessary before such commodity is made available for sale for foreign currencies under Title I of this Act."

ACT OF SEPTEMBER 13, 1960

(Public Law 86-756, 74 Stat. 899)

Use of section 32 foods in training students in home economics. "Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That schools receiving surplus foods

pursuant to clause (3) of section 416 of the Agricultural Act of 1949 (7 U.S.C. 1431) or section 32 of the Act of August 24, 1935, as amended (7 U.S.C. 612c) are authorized to use such foods in training students in home economics.

SECTION 32-ACT OF AUGUST 24, 1935, aS AMENDED

(Public Law 320, 74th Cong. as amended, 7 U.S.C. 612c)

"SEC. 32. There is hereby appropriated for each fiscal year beginning with the fiscal year ending June 30, 1936, an amount equal to 30 per centum of the gross receipts from duties collected under the customs laws during the period January 1, to December 31, both inclusive, preceding the beginning of each such fiscal year. Such sums shall be maintained in a separate fund and shall be used by the Secretary of Agriculture only to (1) encourage the exportation of agricultural commodities and products thereof by the payment of benefits in connection with the exportation thereof or of indemnities for losses incurred in connection with such exportation or by payments to producers in connection with the production of that part of any agricultural commodity required for domestic consumption; (2) encourage the domestic consumption of such commodities or products by diverting them by the payment of benefits or indemnities or by other means, from the normal channels of trade and commerce or by increasing their utilization through benefits, indemnities, donations, or by other means, among persons in low income groups as determined by the Secretary of Agriculture; and (3) reestablish farmer's purchasing power by making payments in connection with the normal production of any agricultural commodity for domestic consumption. Determinations by the Secretary as to what constitutes diversion and what constitutes normal channels of trade and commerce and what constitutes normal production for domestic consumption shall be final."

The sums appropriated under this section shall be expended for such one or more of the above-specified purposes, and at such times, in such manner, and such amounts as the Secretary of Agriculture finds will effectuate substantial accomplishment of any one or more of the purposes of this section. Notwithstanding any other provision of this section, the amount that may be devoted, during any fiscal year after June 30, 1939, to any one agricultural commodity or the products thereof in such fiscal year, shall not exceed 25 percent of the funds available under this section for such fiscal year. The sums appropriated under this section shall be devoted principally to perishable nonbasic agricultural commodities (other than those receiving price support under section 1446 of this title) and their products. The sums appropriated under this section shall, notwithstanding the provisions of any other law, continue to remain available for the purposes of this section until expended; but any excess of the amount remaining unexpended at the end of any fiscal year over $300 million shall, in the same manner as though it had been appropriated for the service of such fiscal year, be subject to the provisions of sections 712 and 713 of title 31.

DEPARTMENT OF AGRICULTURE AND RELATED AGENCIES APPROPRIATION ACT, 1962 (Public Law 87-112, July 26, 1961, 75 Stat. 231; 75 Stat. 232) SCHOOL LUNCH PROGRAM

"For necessary expenses to carry out the provisions of the National School Lunch Act (42 U.S.C. 1751-1760), $125,000,000: Provided, That no part of this appropriation shall be used for nonfood assistance under section 5 of said Act: Provided further, That $45,000,000 shall be transferred to this appropriation from funds available under section 32 of the Act of August 24, 1935, for purchase and distribution of agricultural commodities and other foods pursuant to section 6 of the National School Lunch Act: Provided further, That $10,000,000 of this appropriation shall be available for assistance under section 6 of the National School Lunch Act, in addition to amounts normally expended for commodity procurement under that section, $2,500,000 of which may be distributed to provide special assistance to needy schools which because of poor local -economic conditions (1) have not been operating a school lunch program or

(2) have been serving free or at substantially reduced prices at least 20 percent of the lunches to the children.

FOREIGN AGRICULTURAL SERVICE-SALARIES AND EXPENSES

"For necessary expenses for the Foreign Agricultural Service, including carrying out title VI of the Agricultural Act of 1954 (7 U.S.C. 1761-1768), market development activities abroad, and for enabling the Secretary to cordinate and integrate activities of the Department in connection with foreign agricultural work, including not to exceed $35,000 for representation allowances and for expenses pursuant to section 8 of the Act approved August 3, 1956 (7 U.S.C. 1766), $12,457,000: Provided, That not less than $255,000 of the funds contained in this appropriation shall be available to obtain statistics and related facts on foreign production and full and complete information on methods used by other countries to move farm commodities in world trade on a competitive basis: Provided further, That, in addition, not to exceed $3,117,000 of the funds appropriated by section 32 of the act of August 24, 1935, as amended (7 U.S.C. 612c), shall be merged with this appropriation and shall be available for all expenses of the Foreign Agricultural Service."

DEPARTMENT OF AGRICULTURE AND RELATED AGENCIES APPROPRIATION ACT, 1963 (Public Law 87-879, 87th Congress, October 24, 1962, 76 Stat. 1208 and 1209)

SCHOOL LUNCH PROGRAM

"For necessary expenses to carry out the provisions of the National School Lunch Act (42 U.S.C. 1751-1760), $125,000,000: Provided, That no part of this appropriation shall be used for nonfood assistance under section 5 of said Act: Provided further, That $45,000,000 shall be transferred to this appropriation from funds available under section 32 of the act of August 24, 1935, for purchase and distribution of agricultural commodities and other foods pursuant to section 6 of the National School Lunch Act."

FOREIGN AGRICULTURAL SERVICE-SALARIES AND EXPENSES

"For necessary expenses for the Foreign Agricultural Service, including carrying out title VI of the Agricultural Act of 1954 (7 U.S.C. 1761-1768), market development activities abroad, and for enabling the Secretary to coordinate and integrate activities of the Department in connection with foreign agricultural work, including not to exceed $35,000 for representation allowances and for expenses pursuant to section 8 of the Act, approved August 3, 1956 (7 U.S.C. 1766), $16,895,000: Provided, That not less than $255,000 of the funds contained in this appropriation shall be available to obtain statistics and related facts on foreign production and full and complete information on methods used by other countries to move farm commodities in world trade on a competitive basis: Provided further, That, in addition, not to exceed $3,117,000 of the funds appropriated by section 32 of the act of August 24, 1935, as amended (7 U.S.C. 612c) shall be merged with this appropriation and shall be available for all expenses of the Foreign Agricultural Service."

DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES APPROPRIATION ACTS

(75 Stat. 251; 76 Stat. 340)

Fiscal Years 1962 and 1963

SECTION 32 COMMODITIES TO BE DONATED TO TRUST TERRITORY OF THE

PACIFIC ISLANDS

“Provided further, That notwithstanding the provisions of any law, the Trust Territory of the Pacific Islands is authorized to receive, during the current fiscal year, from the Department of Agriculture for distribution on the same basis as domestic distribution in any State, territory, or possession of the United States, without exchange of funds, such surplus food commodities as may be available pursuant to section 32 of the Act of August 24, 1935, as amended (7 U.S.C. 612c) and section 416 of the Agricultural Act of 1949, as amended (7 U.S.C. 1431)."

PRIMARY OBJECTIVES OF SECTION 32 PROGRAMS

Mr. WHITTEN. In a nutshell, section 32 provides that 30 percent of the import duties on things coming into this country is set aside for specified uses which have been spelled out in the language of the act. With all changes, it still remains that this act primarily is to promote new uses, to provide for the movement of surplus to increase consumption and exports.

Now there are several sections, or authorities provided in the act. One of them that we ran into a few years ago was this authority to maintain purchasing power for producers, for example, the cranberry problem, which this committee learned of after the fact and on which we later had hearings.

However, the Government had contributed substantially to causing the problem, so I do think the Government's effort to make up for the damage by publicizing and promoting cranberries has probably put them in a better position than they were before the occurrence took place. I hear that from retail outlets. They say they are selling about as much cranberry juice as other juices, in many instances.

Mr. SMITH. Yes, the industry has made a remarkable recovery. Mr. WHITTEN. Now what are the main features of the present law under which you are operating now?

Mr. SMITH. The main features, Mr. Chairman, breaks down into three broad categories, as far as the Act's authority is concerned.

Clause (1) as we refer to it, relates to encouraging the exportation of agricultural commodities and products thereof by benefit payments, in connection with the exportation or indemnities.

Clause (2) which is the more commonly used section or portion of section 32, relates to encouraging domestic consumption, of such commodities or products by diverting them, by payment of benefits or indemnities, or by other means from the normal channels of trade, or by increasing their utilization through benefits, indemnities, donations or by other means among persons in the low income groups, as determined by the Secretary of Agriculture.

And the third one provides authority for reestablishing farmers' purchasing power, making payment in connection with the normal production of any agricultural commodity.

Mr. WHITTEN. At this point, Mr. Smith, we might quote for the record clause (1). I will read it for the information of the Committee since I have the copy in front of me.

Clause 1, and I quote:

Encourage the exportation of agricultural commodities and products thereof by the payment of benefits in connection with the exportation thereof, or of indemnities for loss incurred in connection with such exportation or by payments to producers in connection with the production of that part of any agricultural commodity required for domestic consumption.

How long has that section been used, if you know, in the history of the act?

Mr. SMITH. Since its inception, there have been export programs of one kind or another, Mr. Chairman.

COMMODITIES SUPPORTED BY SECTION 32 FUNDS

Mr. WHITTEN. How difficult would it be for you to provide for the record the commodities which have participated in these funds, how much money out of these funds accumulatively have been used for the various commodities through the years, with a separate breakdown for last year? Do you have that?

Mr. SMITH. We have that information, Mr. Chairman.

Mr. WHITTEN. I would like to have that included in the record at this point.

(The material requested follows:)