Domestic Sugar Prices. An important purpose of the law is to stabilize U. S. sugar prices. The law was first enacted following a history of wildly fluctuating and disastrously low prices in the United States. The charts on the following page show that the Act has been effective in stabilizing U. S. prices. During the period (1963) of tight supplies and soaring prices in the world market United States prices did not rise sharply until after world prices skyrocketed. Then they were maintained at levels below world prices. They returned to more normal levels, while world prices declined drastically. For example, the monthly spot prices of raw sugar, duty paid and delivered at New York averaged 7.38, 7.68, and 7.90 cents per pound, respectively, during fiscal years 1968, 1969, and 1970. For the same years, world prices, f.o.b. Caribbean Areas, averaged 1.99, 2.77, and 3.34 cents per pound.

Fair Wage and Price Determinations. The Secretary, as authorized under the Act, determines fair and reasonable minimum wage rates for fieldworkers, and fair prices for sugarcane and sugarbeets. These determinations are issued after investigation,

notice, and public hearing.

Studies, Surveys and Reports. Special cost studies and surveys are made in order to develop basic data for use in making wage and price determinations, as well as for other program operations under the Sugar Act.

A field cost survey covering sugarbeet producing operations for the 1968 crop and beet sugar processing operations for the 1966, 1967, and 1968 crops was conducted in two intervals during the 1969 calendar year. Preparation of a formal report is completed and will be issued in early 1971.

A field cost survey of the Hawaiian sugarcane and raw sugar industry was completed in November 1970, and work continues on the preparation of a formal report.

International Sugar Agreement. The broad purpose of the International Sugar Agreement is to achieve and maintain a balance between supply and demand in the world sugar market at prices reasonable both to producers and consumers. The provisions of the Agreement apply to sugar exported to the so-called world free market, that is, to sugar exports that do not have the benefit of protection or favored markets. The United States under the Sugar Act reserves a portion of its market for foreign countries, and provides access for sugar imports from 31 countries at prices which, after payment of the duty, are the same as prices received by domestic producers. The United States is not a member of this International Sugar Organization but maintains liaison with that organization.

Cents

per pound

12

WORLD SUGAR PRODUCTION AND PRICES

OCTOBER 1961 TO DATE

OJAJOJ AJOJAJOJAJOJAJOJAJOJAJO JA JOJAJO 000.1961-62 1962-63 1963-64 1954-65 1935-56 1966-67 1967-68

Mil. short tons raw value

80

60

60

40

20

1961-62 1962-63 1963-64 1964-55

CROP YEARS
"Estimated

Tax collections exceed total obligations in the amount of $630,365,805 for fiscal years 1938 through 1970.

1/ 50¢ per 100 lbs., raw value, on all beet or cane sugar manufactured in the Continental U.S. for human consumption.

2/ 50¢ per 100 lbs., raw value, on all foreign direct-consumption sugar imported into Continental U.S.

3/ Applicable to imports of all foreign sugar (except Philippines' basic quota) --variable in size since it was dependent on price relationship between domestic and world sugar prices. Statutory authority for the sugar import fee ended December 31, 1964.

4/ Includes operating expenses.

1/ Adjusted for deficits. Unadjusted quotas for Puerto Rico for both calendar years 1969 and 1970, were 1,140,000 short tons, raw value:

NOTE:

Despite deficits declared, domestic areas retain right to market the amounts of their unadjusted quotas.

RURAL ENVIRONMENTAL ASSISTANCE PROGRAM

Mr. FRICK. The agricultural conservation program has done a good job for what it was set up to do. It assisted farmers in protecting the Nation's soil and water resources and their productive ability. It decreased soil loss, gulleying, dust storm loss, and protected losssusceptible land by establishing grass cover, tree cover, proper drainage, and many other needed improvements. In this process it demonstrated to farmers the long-term value of these needed actions by helping them to see first hand the changes and improvements that are not only necessary but are possible.

However, the needs of the 1970's are different from what they have been in the past. When we assess our resources, review and recognize our needs, and assign priorities, we conclude that directions and emphasis must be changed.

Progress was made under the 1970 program to increase the emphasis on practices with enduring benefits and to begin cost-share assistance to farmers for carrying out practices designed specifically for the prevention or abatement of agriculture-related pollution of water and air-in line with authority given by this committee in the 1970 Appropriation Act. Under the 1969 program we had previously reported that 87 percent of the cost shares were used for practices with enduring benefits. The steps taken under the 1970 program to increase this emphasis resulted in using 92 percent of the 1970 cost-share funds for enduring practices.

However, we must face the job of cleaning up such recently identified contributions to pollution as those created by farm livestock wastes. At the same time we must continue to face the job of stopping erosion and runoff which is still the biggest identified problem in water pollution. Sediment (with associated chemicals) from both farm and nonfarm land, is the greatest single pollutant in our surface waters. In view of this we have changed the emphasis of our 1971 program to permit State and county committees to get more specifically at these problems.

We are devoting more program effort to pollution prevention and permanent-type conservation practices such as tree planting, permanent grass cover, sod waterways, terraces, erosion-control structures, and livestock waste storage facilities. We are moving away from temporary practices and those practices which the farmer would more likely do without assistance, such as drainage, irrigation, green manure, weed control, and temporary cover practices. This is in line with past indications from the committees on appropriations and recommendations of the General Accounting Office.

If this effort to redirect the program proves to be successful in obtaining more lasting agricultural conservation and pollution prevention for the cost-share dollars spent, as we believe it will, we will probably be requesting increased funding for the program in future

years.

We hope that the committee will recognize the need for such pro gram redirection and will not restrict us to the use of program practices and provisions of past years.