2. Financing.-Funds obligated for market development projects by the Foreign Agricultural Service since the beginning of the program, and dollar values contributed by the cooperators are summarized by fiscal year as follows:

Dollar costs of the Foreign Agricultural Service in direct support of the market development program were $335,000 in 1962, and are estimated to amount to $349,000 in 1963, and $365,000 in 1964.

The following table 1 shows actual obligations by country in dollar equivalents of foreign currencies, including obligations under the special foreign currency program appropriation, from the beginning of the program through fiscal year 1962, under sections 104 (a), (f), and (m) of Public Law 480. Also shown are actual obligations, stated in dollars, for market development activities from the regular "Salaries and expenses" appropriation for fiscal year 1962. The estimated obligations for 1963 and 1964 are shown divided according to the special foreign currency program appropriation and the "Salaries and expenses appropriation.

TABLE 1.-Obligations under section 104 (a), (f), and (m) of Public Law 4 80 and comparable market development obligations to be financed with dollars

TATE 1.—Obligations under section 104 (a), (f), and (m) of Public Law 480 and comparable market development obligations to be financed with dollars-Continued

In accordance with the proposals in the 1964 budget, the amounts (with comparability adjustments for 1962 and 1963) would be distributed by appropriation as follows:

TABLE 2.-Obligations by commodities and miscellaneous projects and contributions by cooperators from the beginning of the market development program through June 30, 1962

[Stated in approximate dollar equivalents and dollars; rounded to dollars]

3. Statement of activities under Public Law 480.-This statement describes the activities and shows the progress for the following:

I. Sale of commodities for foreign currencies under title I of Public Law 480 (Agricultural Trade Development and Assistance Act).

II. Grants of commodities to friendly peoples for famine relief and other assistance under title II of Public Law 480.

III. Sale of commodities on long-term dollar credit basis under title IV of Publ* *aw 480.

Uses by agencies of the Department of Agriculture of foreign currencies derived from sales under title I are discussed elsewhere in these explanatory notes, as follows:

(a) Market development under section 104 (a) are included in the justifications of the Foreign Agricultural Service.

(b) Marketing and utilization research abroad under section 104 (a) and agricultural forestry, and marketing research under section 104 (k) are discussed in the justifications of the Agricultural Research Service. I. SALE OF COMMODITIES FOR FOREIGN CURRENCIES UNDER TITLE I OF PUBLIC LAW 480

1. Authority.-Title I of the Agricultural Trade Development and Assistance Act, Public Law 480, as amended, authorizes the President until December 31, 1964, to enter into agreements with friendly nations providing for the sale of surplus commodities for foreign currencies. In negotiating such agreements the President is required, among other things, to take reasonable precautions to safeguard usual marketings of the United States and to assure that sales for foreign currencies will not unduly disrupt world prices or normal patterns of commercial trade with friendly countries, to take appropriate steps to assure the use of private trade channels, and to give special consideration to the development and expansion of demand abroad for agricultural commodities. The legislation authorizes the Secretary of Agriculture to determine the nations with whom agreements shall be negotiated and to determine the commodities and quantities which may be included in such negotiations and agreements. The President is authorized to use, in agreement with the country concerned, foreign currencies accruing from title I sales for various purposes set forth in section 104 of Public Law 480, as amended.

2. Total program agreements.-Since the inception of the program through November 30, 1962, a total of 334 agreements, or supplements to agreements, were entered into with 44 friendly governments.

Their total value based on costs to the Commodity Credit Corporation is estimated at $11,726.4 million with an export market value of $7,913.3 million, both exclusive of ocean transportation costs of $984.4 million to be financed by CCC. CCC is reimbursed for its costs by appropriation and Public Law 480 provides a cumulative dollar limit of $11.25 billion to reimburse CCC for title I transactions through December 31, 1961 and an additional $4.5 billion through December 31, 1964. The commodity composition of the agreements signed July 1, 1954, through November 30, 1962, at export market value and CCC cost, is summarized in the following tabulation.

3. Shipments.-About $5,579 million worth or approximately 83 percent of these title I commodities at export market value had been shipped as of June 30, 1962. About $934 million of this amount represented shipments during the fiscal year 1961, and about $1,015 million during fiscal year 1962. Shipments for the 1962 fiscal year were up about 8.6 percent from the level reached in the fiscal year 1961.

The value of title I shipments represented about 20 percent of the total value of U.S. agricultural exports during the fiscal year 1962. In terms of quantities. title I wheat exports comprised over 54 percent of total wheat exports during the fiscal year 1962; rice 42 percent; and cottonseed oil and soybean oil 21 percent.

Shipments of wheat and flour under title I, amounted to a record 387 million bushels during fiscal year 1962. Shipments of corn also set a new record. Shipments under all Public Law 480 programs reached a record total of $1.6 billion during fiscal year 1962. Dollar exports also set a record of $3.5 billion bringing total exports of U.S. agricultural commodities to $5.1 billion.

4. Progress in negotiating agreements.-During fiscal year 1962, 64 agreements and amendments were entered into with 26 countries. During the first 5 months of the fiscal year 1963, 24 agreements and amendments were entered into with 19 countries. The programing was marked by a hardening of the Public Law 480 programs in general which resulted in (1) a continued shift from foreign currency sales under title I, to long-term credit under title IV, or to cash dollar sales wherever possible, (2) a decrease in the size and number of title I grants, (3) a provision in title I agreements to insure that the exchange rate used for the deposit of local currency will not be less favorable than the USDA selling rate, and (4) the strengthening of title I operating procedures.

Title I programs have been successfully developed for a number of newly independent nations, particularly in Africa. Title I agreements were signed during fiscal year 1962 for the first time with the Congo, Morocco, Guinea, Sudan, and Tunisia.

Renewed emphasis on advance programing under title I, Public Law 480, resulted in the signing of multiyear agreements valued at CCC cost with Pakistan. $808 million; Guinea, $11.4 million; UAR, $390 million; Republic of China (Taiwan), $52 million; and Indonesia, $136 million of which about $100 million is for multiyear delivery. In addition, delivery of commodities under the India, May 4, 1960, agreement continues into fiscal year 1963 and fiscal year 1964.

5. Progress in tightening program operations.-Considerable progress was made in bringing about a general tightening of the title I operations which was necessary because of (1) the addition of newly independent nations not familiar with United States commercial practices, (2) the wider participation of exporters not familiar with title I operations and, (3) the general expansion in title I operations.

To provide for a more orderly scheduling of contracting and delivery, purchase authorizations are now being issued for smaller quantities and with shorter contracting and delivery periods. Additional quantities are not authorized until the original authorization has been utilized and requests for extension of delivery periods beyond the date originally provided are not considered unless the delay is due to circumstances beyond the control of the exporter or importer. All commodities, except cotton, are now inspected at ports by or under the supervision of AMS, and weighed or check weighed at port. In the case of cotton, a new requirement was developed during fiscal year 1962 and subsequently made effective, which provides that at least 10 percent of the cotton be sampled by AMS in the warehouse prior to shipment to port. This is in addition to the previous requirement for inspection, weights, and arbitration, after arrival in importing countries. Safeguards have been included in purchase authorizations for packaged commodities sold under brand name labels to assure that such labels show only bona fide U.S. brand names and that the label clearly indicates that the product was produced and processed in the United States.

Program results.-Table I shows the commodity composition of the agreements entered into from the inception of the program through June 30, 1962, in terms of dollar amounts, and table II, the approximate quantities.