Through May 9, 1958, for 1958 crops planted in the spring of 1958.

750, 000, 000

? Estimated breakdown between spring and winter wheat.

(2) The increase of $7,600,000 above the $13 million for all operating expenses provided in the budget is proposed for use by ASC county committees. The need arises primarily from the additional performance checking which will be required in the fiscal year 1959 to determine eligibility of the larger number of individual producers participating in and receiving payments under the expanded program, as compared with the number anticipated in the budget. The original estimate provided funds for checking performance on 438,260 farms and making payments to 575,000 farmers in the fiscal year 1959. Current estimates are that 936,500 farms will need to be measured and 975,000 payments made in the fiscal year 1959, or about double the original workload estimated. ASC county offices are being directed to make payments on 1958 agreements promptly on determination of performance.

The Conference Report No. 682, 85th Congress, 1st session, on the 1958 appropriation bill stated the opinion of the conferees that all payments under 1958 acreage reserve contracts should be made on or before September 15, 1958. Since the bulk of performance work will have to be done early in the fiscal year 1959, not only on the acreage reserve program, but also to complete performance work on acreage allotment and marketing quota programs, county committees will be hard pressed to do all the necessary work in the time allotted. It is expected that substantially all of the payments required will be made before September 30. Payments, of course, cannot be made where matters of compliance are not finally determined or are in an appeal stage or where violation proceedings may be involved. Experience to date does not indicate that there should be many such cases.

With the increased operating funds of $250,000 made available in the Second Supplemental Appropriation Act, 1958, and the funds contained in the regular 1958 appropriation, a special effort is being made by ASC county committees to carry out the maximum amount of work possible in the 1958 program prior to June 30, 1958. Except for winter wheat crops, it is not expected, however, that significant amounts of 1958 crops can be checked or producers' eligibility determined very far in advance of June 30. The late spring has delayed planting in many areas well beyond the normal period for such activity.

GENERAL STATEMENT

Mr. McLAIN. Mr. Chairman and members of the committee, the supplemental budget estimate before you requests an additional $282,800,000 for the 1958 acreage reserve program.

Total payments to be made on the 1958 budget program in accordance with the latest reports of participation are now estimated at $696,061,076, of which $590,400,000 will be required to be paid from 1959 appropriations.

This revised esimate is $1,800,000 less than the estimate originally submitted to the committee and the estimate submitted to the House. This comes about because we tried to bring this right up to date so that we have the most accurate figure.

Of course, as you know, these payments will have to be made, according to the request of the Appropriations Committees, within the next 4 to 6 weeks.

Therefore, the supplemental appropriation requirements are reduced to $273,400,000 for program payments and $7,600,000 for ASC county committees, making a total revised estimate of $281 million, as compared to the $282,800,000.

EFFECT OF HOUSE REDUCTION

The House Appropriations Committee bill reduced the estimate to $275 million, providing $270,500,000 for program payments and $4,500,000 for ASC county committees.

The amount provided for program payments is $2,900,000 below the Department's latest estimates of its commitments to participants

in the program. The House committee, in its report, stated that it stands ready to recommend any additional funds necessary to meet all obligations.

In fairness to the House Appropriations Committee I think we ought to say that, of course, we appeared before them about 5 weeks ago so the latest information was not available then.

The conference report on the 1958 appropriations requested that payments should be completed by September 15, 1958, and the Department is attempting to do so.

Because of the short period involved, it will be almost impossible to obtain funds by another supplemental appropriation in time to make payments as planned.

If the reduction in program payments recommended by the House committee is allowed to stand, there will almost certainly be some counties in some States which will not be able to issue certificates for payment to all eligible farmers. This will certainly result in dissatisfaction by those who cannot be paid promptly.

EFFECT OF INCREASED PROGRAM AUTHORIZATION ON ADMINISTRATIVE EXPENSES

The 1959 appropriation provided $8,419,000 for the operation of the ASC county committees. This amount was based on a 1958 program of less than $500 million.

Under the expanded program the workload has more than doubled. As an example, the number of farms on which performance is to be determined in the fiscal year 1959 increased from 438.260 to 936.500. Based on the increased workload, the $7.600,000 requested for ASC county committees is the minimum we estimate is required for them to carry out their functions.

Of course, as you know, this has come about because of the added $250 million program authorized which brought our total authorization up to $750 million.

RESTORATION REQUESTED

It is, therefore, strongly recommended that $2,900,000 of the reduction in program payments made by the House committee be restored and that the full amount of the $7,600.000 for the expenses of the ASC county committees be allowed, so that payments can be made promptly as planned without the further delays which would be necessary if another supplemental appropriation were to be requested.

A tabular presentation of these figures was shown in the letter of July 22, 1958, from the Acting Secretary to the chairman of this committee, which I understand has been inserted in the record.

(The information referred to appears on p. 139.)

URGENT NEED OF FUNDS TO COMPLETE PAYMENTS

1

Mr. Chairman, reports from our field offices indicate that they are. now, or soon will be, in a position to make payments to most of the participants in the next 4 weeks.

Unless this appropriation is made shortly, there will be many cases of delayed payments.

We will, therefore, appreciate any special attention that you may give to taking action on this request as soon as possible.

Mr. Chairman, we will be glad to discuss these matters more fully or answer any question, to the best of our ability.

Chairman HAYDEN. Senator Young, do you have any questions?

Mr. MCLAIN. Excuse me, Senator Hayden, but I had talked to Senator Russell about this privately. I see he is not here. He planned on being here. He was in complete accord with moving ahead in this as rapidly as we could.

I am sure you agree with that.

Senator YOUNG. These are for payments on contracts entered into with farmers.

Mr. McLAIN. That is correct, acreage-reserve contracts.

Senator YOUNG. What was the amount for administration, the increase you are asking for administration?

ESTIMATED AMOUNT OF ADMINISTRATIVE EXPENSE LIMITATION

Mr. BEACH. The gross amount will be $20,600,000. That is $3,100,000 more than was approved in the House version of the supplemental bill. It is a decrease of over $14 million from the level of expense for the fiscal year 1958 because of the fact that this program discontinues after the 1958 crop program is completed.

The $20,600,000 is the total requirement for the fiscal year 1959, including the $3,100,000 which we requested from the House but which was not approved by the House committee.

Senator YOUNG. This will be only for the conservation reserve.
Mr. BEACH. Acreage reserve.

Senator YOUNG. That you are speaking of here?

Mr. BEACH. Yes.

Senator YOUNG. Entirely acreage reserve?

Mr. BEACH. That is right. The biggest part of this expense money is used for performance checking which is required by law before we can make payments to farmers. We have to know that they comply with the terms of their contract to place this land in reserve.

PERFORMANCE CHECKING REQUIREMENTS

Senator YOUNG. You have a requirement on acreage allotments, on wheat, where you have to get down to a tenth of an acre.

I think you could eliminate some expense and make the program more sensible if you eliminate these fractions. I think two good surveyors measuring a hilly tract of land would not come within a tenth of an acre if they measured it separately.

Why do you have this tenth of an acre provision?

Mr. MEYER. The biggest reason is that if you allow a larger percentage of an acre you permit more overplanting in excess of your allotment.

Senator YOUNG. The average wheat farmer underseeds quite a little in order to be safe. Occasionally they make a little mistake, but if they are one-tenth of an acre over they are subject to penalty. Mr. MEYER. In some areas they do seed within their allotment. In other areas they habitually overseed and cut back to it.

Senator YOUNG. I think you had better drop that one-tenth of an acre business.

Mr. McLAIN. You are speaking of wheat and what you s pretty much true there.

Of course, this program applies to tobacco, and there a tenth of an acre is a different thing.

Chairman HAYDEN. Senator Dworshak.

Senator DwORSHAK. Mr. McLain, how does this 1958 total of $696 million compare with the 1957 program? Mr. McLAIN. A little over $600 million.

EFFECT OF ACREAGE RESERVE ON PRODUCTION

Senator DwORSHAK. Do you think it proved successful in curtailing production of various crops?

Mr. MCLAIN. I think it did this, Senator: It prevented the crop we are going to harvest in 1958 from being much larger than what it is. Obviously, our wheat crop is going to be the second largest on record. If the acreage we took out of wheat had gone to wheat, it would have been that much worse.

Our total supply of cotton has been pulled down to a very livable carryover, primarily because of the soil-bank operation.

Senator DWORSHAK. Do you have the total production in line with the requirements?

Mr. McLAIN. We have it that way more with cotton than any other commodity.

Senator DWORSHAK. What other crops participate in this program. Mr. MCLAIN. Corn, tobacco, rice, as well as wheat.

Senator DWORSHAK. Have you made any progress in cutting acreage in the production of rice?

Mr. McLAIN. Yes, sir; we have.

ADMINISTRATION OF MARKETING-QUOTA PROGRAMS

Senator YOUNG. Mr. McLain, if you would apply the strict regulations on quotas to wheat that you do to cotton I don't think we would have this overproduction. I think we either ought to enforce quotas or else abandon them completely.

Some things you are doing over in the Department, like permitting farmers to sell their wheat placed in bond because of overseeding previous to harvest and replace with cheaper wheat and make a profit, tend to encourage farmers to overseed. That and this 15-acre provision and a few other things are making these quotas completely unworkable.

Mr. McLAIN. Of course, the 15-acre thing is a matter of statute. I think we would have no reservation doing what you want done on it. This other matter of replacing wheat, the current policy which will be in effect 2 years, will be reviewed very carefully in view of the criticism which you made of it.

As far as I am concerned, if it is the view of the people on the Hill here that we cut it out completely we will be willing to do it.

Senator YOUNG. This is a matter I would like to draw to the attention of the chairman of the Agriculture Committee and also other members of the committee.

NEED FOR CHANGE IN WHEAT PROGRAM

The Department, some 2 years ago, issued regulations permitting farmers who overseed wheat to place it under bond and to sell this wheat and replace it 30 days afterward. This year is a perfect example of how it works.