(The announcement referred to is as follows:)

U.S. DEPARTMENT OF AGRICULTURE

USDA ANNOUNCES REVISIONS IN BARTER PROGRAM

The U.S. Department of Agriculture today announced major revisions in the barter program, under which agricultural commodities are exchanged for mate rials, goods, equipment, and services to meet the requirements of U.S. Government agencies and, under certain conditions, for strategic and other materials for stockpiling.

The revisions are effective immediately and will apply only to proposals dated after February 13, 1963.

Today's announcement implements program changes approved by the President upon recommendation by the Executive Stockpile Committee. The changes include a number of provisions developed by USDA as a result of a report on the program made to the Secretary of Agriculture last year by a private trade task force. Additional program improvements are receiving consideration.

Greater emphasis than in the past will be given to use of barter transactions for procurement of non-strategic-material items (including, but not limited to, offshore procurement) which meet approved program requirements of U.S Government agencies within funds currently available or within procurement authority which extends over a period of years and for which dollars would normally be spent abroad.

USDA is consulting with the Department of Defense and the Agency for International Development on ways to more effectively utilize barter transactions for procurement of items by these agencies. When policies and techniques have been agreed upon a public announcement will be issued.

With certain exceptions, additions to stockpile inventories of strategic materials by the barter route will hereafter be limited to materials for which there is a strategic stockpile requirement in either raw or processed form. The exceptions are those cases where there is an advantage to the United States over and above the exportation of additional quantities of agricultural commodities in exchange for materials of which the United States does not produce its requirements domestically and which are less subject to deterioration or substantially less costly to store.

These cases will for the present be limited to those where (1) it is found to be more advantageous to accept such a material than to acquire additional foreign currency; (2) the international economic or foreign policy interests of the United States will be advanced, including help for weaker independent states to resist economic overtures and pressures from unfriendly powers; or (3) an existing Government dollar contract can be converted to barter on terms serving the best interests of the United States and benefiting the balance of payments. Materials excess to anticipated strategic requirements will be acquired under the above exceptions only after required consultations with, and after obtaining necessary concurrence of, the Secretary of State and the Secretary of the Treas ury, and taking into account the overall surplus disposal policy. Also, there will be periodic consultations on the general impact of the barter program on foreign policy considerations and on balance-of-payments problems with the Secretary of State and the Secretary of the Treasury, respectively.

Barter offers involving military procurement in any country with which the United States has arrangements for payments to offset U.S. military expenditures in that country will be approved only with concurernce of the Secretary of the Treasury, who will review such offers in the light of the specific offset arrangements to insure that the offers represent a true improvement in the U.S. balance of payments.

Furthermore, all strategic and other materials approved for acquisition through barter for the supplemental stockpile will first be considered by the Supplemental Stockpile Advisory Committee for Barter, presently composed of representatives from the Departments of Agriculture, Commerce, Defense (observer), Interior, State, and Treasury; and from the Atomic Energy Commission (observer), Agency for International Development, Bureau of the Budget, General Services Administration, and Office of Emergency Planning.

The previous system of commodity-country barter export designations (X, A, B, and C), involving consideration of the relative potential of friendly countries as cash markets of the United States (or of International Wheat Agree

ment countries in the case of wheat and wheat flour), will be retained except that the C category is eliminated and the present B and C categories are combined into new category B. The exportation designations for Spain and Israel have also been raised to A for some commodities.

(Copies of the revised list of commodity-country designations, which will be subject to change from time to time, may be obtained from the Barter and Stockpiling Manager, Foreign Agricultural Service, U.S. Department of Agriculture, Washington 25, D.C.)

As in the past, the commodity-country list in effect at the time a barter commitment is made will continue effective for the life of that particular barter arrangement with respect to commodities available for barter at the time of commitment.

Some existing barter contracts provide that, if any additional agricultural commodities become available for barter during the life of the contract, such commodities will be available to the contractor for export to countries designated C at the time the commodities are acquired. Any agricultural commodities which become available for barter on or after the effective date of this announcement will be exportable, under the above-cited provision of existing contracts, to any country designated B at the time the comomdities are acquired. The rules governing barter exports of agricultural commodities are: Exports to "X" destinations are prohibited; exports to "A" destinations may be made only after USDA is reasonably satisfied (prior to export) that undue disruption of world market prices and replacement of cash sales for dollars will not result; and exports to "B" destinations may be made without restriction.

However, in order to attain specific objectives, USDA reserves the right to require that certain barters be consummated on a bilateral basis only or to specify the source country of the material being accepted, the destination of the agricultural commodities, or the particular agricultural commodity to be exchanged. It is expected that future barters for those materials in stockpile surplus will be chiefly with underdeveloped countries and bilateral in nature.

The following agricultural commodities are currently available for barter: nonfat dry milk, butter, cheddar cheese, tobacco, wheat, corn, rye, grain sorghums, barley, and cotton (after issuance of a barter cotton announcement). This list is subject to change from time to time. CCC-owned agricultural commodities available for barter are shown in the CCC monthly sales list, obtainable upon request to the Procurement and Sales Division, Agricultural Stabilization and Conservation Service, U.S. Department of Agriculture, Washington 25, D.C. Barters involving procurement for U.S. agencies are continuing on a limited scale during interagency consultations on the increased use of such transactions. During this interim period, information on barters involving procurement for U.S. agencies may be obtained from the barter and stockpiling manager, Foreign Agricultural Service, U.S. Department of Agriculture, Washington, 25, D.C. CCC is now in a position to consider offers of the following materials for the supplemental stockpile: Asbestos (chrysotile), celestite, chromite (refractory), diamond dies (small), iodine, and selenium. Additional acceptable barter materials will be announced as soon as interdepartmental consultations, now underway, are completed and from time to time thereafter. Specifications and further details are obtainable from the barter and stockpiling manager, at the above address.

Ability to conclude a stockpile barter depends upon such factors as the U.S. national interest, existing commitments, and market conditions. Therefore, the fact that offers of a particular material can be considered by CCC does not mean that such offers will be accepted.

Other general barter requirements not inconsistent with this announcement continue to be applicable to the revised program. These include, among others: Prohibition, wthout prior written approval, of the transshipment of agricultural commodities from the ultimate destination initially supplied to or approved by CCC; posting of financial coverage in the form of cash or letters of credit for agricultural commodities taken in advance of delivery of counterpart materials, goods, or services; payment of interest on the value of such commodities unless cash was posted; and shipment in privately owned U.S.-flag commercial vessels of at least 50 percent of any goods or materials being delivered to CCC that involve ocean transportation.

USDA barter program-Commodity-country designations for exportation of agricultural commodities

KEY

A-Exports only after additionality determination by USDA.

B=No restrictions.

X=No exports permitted.

NOTE. Any friendly foreign country not specifically listed is classified "B" for all commodities. Corsult CCC Monthly Sales List for commodities currently available.

USDA barter program-Commodity-country designations for exportation of agricultural commodities-Continued

Mr. IOANES. Activity will increase from here on out this fiscal year. now that we have our policy out in public and can operate.

The items taken this year are such things as antimony, celestite. manganese ore, metallurgical grade, and then we are getting into an interesting area of offshore procurement much more heavily than in the past, where we are getting appropriated dollars back, instead of taking materials for the stockpile.

Mr. WHITTEN. On this matter of transfer, I notice you have your hands in the section 32 till to the tune of about $3 million. What is the basis for that?

Mr. MINOR. Mr. Chairman, that was originally allotted from seetion 32 back 8 or 9 years ago, and this committee

Mr. WHITTEN. Just a continuation of that.

We have been reading in recent days where the United States for the first time was trying to set up some fairs on a "hard sell" basis. I believe that was their description. Now we are trying to show in foreign countries some real good quality products that we are willing to make available at real good prices, instead of some of the showy type of things that we have done in times past. That is the sum and substance of two or three articles that I have read.

I mention that only that you might tell us what change you have made in your approach, and what you are doing, what part you are financing, and what part other agencies of the Government might be contributing to this effort.

Mr. IOANES. Thank you, Mr. Chairman.

INTERNATIONAL AGRICULTURAL FAIRS

The article you referred to had to do with the change in the charac ter of American industrial fairs put on by the Commerce Department. And it is true that they are becoming much more aggressive in their trade fair efforts, and actually sell at fairs. We have been doing this in our agricultural fairs now for about 2 years, starting with the Hamburg Fair of about 2 years ago.

And what we are finding out, quite frankly, is what everybody finds out, which is that it is one thing to show your products, but you have got to have a testing method to know that people will buy what you show them. So beginning with the Hamburg Fair we actually sold space to private companies and said, "This will give us evidence of whether the private trade community thinks that the fairs are a rea! commercial venture."

I recall that in those fairs we had about 55 or 60 companies that actually paid for space and sold at the fairs.

The second thing we are finding out is that you can't measure what you do because you get 100,000 people coming to a fair. The important thing is, do the people come who are actually buyers, or those who influence buyers? We have been directing much more of our fair a^tivity to making sure that the importers, the bankers who finan the credit, and the people who handle the port facilities, the people in the commercial stream who perhaps don't know our products actually. come to the fair and get sponsored at the fair.

Another thing that we have been doing that we think is good, is trying to make surveys for the first few weeks after the fair is over to see what happens to the buying habits of wholesalers and merchan