Law 480. Although barters for strategic materials will not be as large a part of the program as in past years, a sizable volume of such barters should be achieved under the criteria spelled out in the ESC recommendations. The re vised program is expected to result in contracting, on a more selective basis, for the exportation of agricultural products at about or slightly above the annual level of approximately $160 million reached in fiscal years 1959 through 1961. Barter contracts negotiated during fiscal year 1963—value through 1 Materials for which the strategic stockpile objectives have not been reached. 2 Bilateral in exchange for wheat to Brazil, which could not have purchased the wheat with convertible currency. 3 European exchange system and Air Forces Europe exchange (PX items). Materials for the national and supplemental stockpiles delivered under barter contracts 1 All but $6,428,818 represents deliveries under contracts for which commitments were made on cr Jan. 31, 1962, when the President announced termination of stockpile purchases of materials for w emergency requirements had been satisfied. NOTE. In addition to the amount shown above, prior to July 1, 1954, Commodity Credit Corpora acquired by barter a total of $71,800,000,000 worth of strategic materials, all of which were for the stockpile. In addition, a total of $124,800,000,000 worth of materials, goods, and equipment have acquired under barter transactions for delivery to other U.S. Government agencies. Total acquisitions for the national stockpile were $476,500,000,000, of which $253,300,000,000 were ferred to the supplemental stockpile because of changed strategic assumptions, leaving $223,2*** which was actually transferred to the national stockpile. Bartered materials for supplemental stockpile 1. Explanation of program.-Under current policy, the Commodity Cr Corporation acquires strategic and other materials through barter of price-sup commodities only for other Government agencies or for transfer to a suppleme: U.S. stockpile established by section 104(b) of the Agricultural Trade Deve ment and Assistance Act of 1954. Transfers are valued at the lower of the dem tic market price or the Commodity Credit Corporation's investment there of the date of transfer. The General Services Administration maintains the supplemental stockpile and transfers are made pursuant to their procedures. 2. Summary of operations, 1962.-During 1962 the following materials were transferred under this program: Transfers to supplemental stockpile, fiscal year 1962 Material Materials transferred to supplemental stockpile-total cur- Appropriation... Mr. WHITTEN. Do you have a plan to phase it out? Amount $32, 164 1, 542, 643 1, 896, 470 196, 026 1, 558, 233 39, 878, 590 5, 454 481, 726 1,086, 255 5, 599, 997 960, 636 3,363, 976 1, 403, 545 79, 729 131, 337 17, 095 35, 550, 046 839, 717 1, 428, 392 16, 503, 526 3,718, 807 7,788 106, 146 15, 678, 229 5,525, 156 25, 353, 036 5,572, 615 4, 116, 592 2,297, 842 4, 024, 529 2,869, 899 124, 301 3,563, 578 591, 107 4,322, 528 2,868, 949 -3, 544 193, 293, 115 -7, 433, 539 -60, 859, 576 125, 000, 000 Mr. GODFREY. No, sir. The new revised barter program was just announced about 5 or 6 weeks ago, and I would like for Mr. Eskildsen to give you a brief on what the new barter program provides for and the changes from the old one. Mr. ESKILDSEN. Mr. Chairman, as Mr. Godfrey points out, the character of the barter program has changed rather completely since the surveys of the summer with respect particularly to the stockpiled items. At this point we foresee that the new barter program will be much more heavily engaged in offshore procurement matters than acquisition of strategic minerals. There are still some unfilled stockpile quotas for certain kinds of minerals, a much foreshortened list compared with the older one which we will still be bartering for. Secondly, there is provision in the new barter program for taking. in cases where this circumstance exists, materials which might actually be in the stockpile but which would be more valuable to the US. Government than, say, taking local currencies under title I program. So that it will be a process of trying to get the greatest advantage for the U.S. Government in a circumstance where dollar sales are not possible. This, in general, would be the character of the new program. With respect to the size of the program, I think it is a little too early to say with any certainty just what size it will reach. I think a great deal of that-a great part of that question will be answered when we get a little better idea of what we can usefully do in the offshore procurement area, which will depend again on working together with the Government agencies doing substantial purchasing abroad, principally the Department of Defense and the Agency for International Development, which we are now doing. Mr. WHITTEN. I have before me a letter addressed to Mr. Cannot.. chairman of the committee from the Under Secretary of the Army. calling attention to the fact that for the Ryukyu Islands it is expected that the dollar sales to those islands for the next 3 years will ru as high as $12 to $14 million. Would that indicate that you, throug this means, would collect that money from the Defense Department for procurement that you would provide for the Ryukyu Islands? Mr. ESKILDSEN. I would say, Mr. Chairman, this would be a likely target. I wouldn't know without knowing exactly Mr. WHITTEN. I will pass to you the letter. I wish you would respond to it, if you would, to the committee. CORN PRICES I have had a complaint from my State, from a wholesale grocery company, in which they are complaining that the Government, as they say, is selling corn at $75 to $200 per car below competitive private industry practices. I wrote them calling attention to the provisions of the law. Is that in line with the statements you made earlier. where you have authority to sell corn to keep the price from getting higher? Mr. GODFREY. Yes, sir, this is in line. Mr. WHITTEN. The purpose, as explained when the bill passed Cor gress, was to keep the noncooperators from making special profits of extraordinary benefits being received from nonparticipants. Mr. GODFREY. And to keep prices from increasing materially f‹consumers and users of feed grains. Mr. WHITTEN. Are there any further questions? TAKING TITLE TO COMMODITIES Mr. ADDABBO. Under the CCC, in your testimony, this concerts Government taking title, and in others CCC doesn't or can't take t Will you give me a breakdown or some explanation of those instances? Mr. GODFREY. Where the Government has title to a commodity ari then it takes title to other commodities? I will take first a storable commodity. A loan is made to the fart er if he cannot secure the support price in the marketplace. He ' \ until the maturity date, which is preestablished for that to satisfy that loan by paying it off and paying the accrued interest and handling charges. If he pays this off, then the commodity becomes his and he can sell it wherever he can, and much of this is done. If he fails to pay it off by the maturity date, then he satisfies the loan by delivering the commodity to us. We then have title to it. As long as it is in loan status, for cotton-well, for corn-the loan period extends until July 31 in most parts of the country. That is the maturity date of the prior year crop. So he can redeem the loan, even though he secured it last November, he can redeem it anytime up until he delivers it to us, which would possibly be during the month of August by paying off the principal of the loan and the interest. Mr. ADDABBо. What is the interest rate? Mr. GODFREY. 3.5 percent. In the case of the perishable commodities-we operate the price support and the dairy is a good example of this we operate the price support program by making direct purchases in the marketplace. We purchase, in the case of the dairy program, butter, cheese, and nonfat milk. And by making these purchases we keep the level of prices up to the farmer who is selling, to the price support level. We take title to that immediately when we make the purchase. Mr. WHITTEN. I don't know that I can improve on the description you make there as far as perishables are concerned. The law provides that you support it by buying, so you have title right off. Where you have storables, the law provides that you make loans. And as long as the loan was made available and the time that you have taken title. If the farmer doesn't repay it by the due date, then that belongs to the Government and you can do anything with that which you have taken title to. Usually it is a lapse of about 12 months between the time the loan was made available and the time that you have taken the title. Mr. GODFREY. That is right. Mr. WHITTEN. Sometimes the producer waits 2 months before the due date before he secures the loan. SAVINGS ON FEED GRAIN AND WHEAT PROGRAMS Mr. ADDABBO. On the feed grain and wheat program you said we will save money in storage costs by cutting down the production. Can you give us something on the variation, what the costs would be between the storage and what we would also be paying in subsidies to the farmer not to produce? Mr. GODFREY. Yes, sir. This, of course, gets a little into forecasting, because you have to consider what kind of program we had in effect before we had the feed grain program. This program provided for unlimited production and guaranteed price supports. This meant that a farmer could produce on any number of acres, and his entire production was eligible for price supports. So you would have to first consider that program that was in effect, in lieu of the feed grain program. Then you would have to determine what the effect of the savings would be. |