3. An increase of $1,927,500 to continue the provisions for a contingency reserve of 7 percent. The language of the current CCC administrative expense limitation provides for a contingency reserve of not less than 7 percent of the amount authorized. For fiscal year 1964 the funds available to ASCS under the administrative expense limitation are to be transferred to and merged with other funds in "Expenses, Agricultural Stabilization and Conservation Service." It is proposed that provision for a contingency reserve continue to be included in the item "CCC administrative expenses" to be released for transfer to “Expenses, ASCS" only upon the approval of the Bureau of the Budget. The administrative expense requirements of CCC programs fluctuate according to the volume of commodities placed under price support, acquired, and disposed of. The volume of loan and inventory operations is unpredictable. Since the estimated administrative expense requirements for price-support programs are based on tentative program estimates, requirements could change considerably depending upon the volume of loan and inventory operations. The estimated savings due to increased productivity could be materially affected by fluctuations in program volume. There are many factors contributing to the uncertainty of the program volume estimates upon which estimates of administrative expense requirements are based. Of major importance is the fact that the 1963 crops, from which a large portion of the program volume will occur during the fiscal year 1964 have not as yet been planted. Factors other than the inability to estimate the volume of future production, such as agricultural production abroad and changes in domestic and world economic conditions, influence the operations of the Corporation. For example, a change of a few cents in the marketing price of a commodity at harvest time would have an immediate impact on the volume of loans made. A change of a few cents during a loan period may have considerable bearing on the volume of redemptions and collateral acquired by the Corporation. Favorable yields in just one or two States can change the storage situation in a matter of days requiring unexpected movement of commodities to provide for current production so that producers would not be deprived of the benefits of the price-support programs. Since price support is mandatory for the bulk of commodities, the Corporation cannot control the volume of loans and purchases made. In the interest of the Government, it is extremly important that provision for a full 7 percent contingency reserve be continued, to deal with additional workload in case program volume exceeds current estimates. (2) An increase of $4,542,775 for pay and postal costs consisting of: (a) An increase of $3,412,166 in direct appropriations composed of: 1. An increase of $3,216,546 consisting of $1,777,520 to provide for full year costs of the first step of the pay increase pursuant to Public Law 87-793 and $1,439,026 for fiscal year 1964 cost of the additional increase effective January 5, 1964. (An overall explanation of increases for pay act costs is included in the preface to these explanatory notes in volume 1.) 2. An increase of $195,620 for additional postal costs pursuant to Public Law 87-793. (An overall explanation of increases for postal costs is included in the preface to these explanatory notes in volume 1.) (b) An increase of $1,130,609 in funds transferred from Commodity Credit Corporation composed of: 1. An increase of $1,043,979 consisting of $103,747 to provide for full year costs of the first step of the pay increase pursuant to Public Law 87-793 and $940,232 for fiscal year 1964 cost of the additional increase effective January 5, 1964. (An overall explanation of increases for pay act costs is included in the preface to these explanatory notes in volume 1.) 2. An increase of $86,630 for additional postal costs pursuant to Public Law 87-793. (An overall explanation of increases for postal costs is included in the preface to these explanatory notes in volume 1.) The following tables relating the Commodity Credit Corporation program volume to work units, shows production rates and resultant manpower data and displays budgetary requirements. This tabulation was formerly carried under the Commodity Credit Corporation administrative expense limitation item but as these funds are now transferred to and merged with "Expenses. ASCS," this table is now included with the explanatory notes for this account. |