(1) An increase of $2,907,191 in program field operations Increased program volume.—In addition to the $700,000 deficit indicated in the revised budget estimate for the fiscal year 1954 it is estimated that an additional $2,102,191 will be required, bringing the total increase resulting from increased program volume to $2,802,191. The impact of the heavy increase in the volume of commodity operations will occur in the workload of the CSS commodity offices. Through an analysis of the monthly work status reports which indicate the volume of work received, completed, and on hand for these offices, it is possible to effect a continual check on the workload and corresponding financial requirements of these offices. The analyses indicate that incoming workload is running considerably higher than previously estimated and that work on hand is increasing and is now at a relatively high level. Such factors indicate that present workload and financial requirements are in line with estimated program volume. Establishment of new commodity office.—In order to increase the effectiveness of present operations and in order to relieve the other commodity offices of burdensome backlogs, a new office is being established at Cincinnati to handle processed commodities for the Commodity Stabilization Service. The bulk of the work in this office will be conducted by employees paid from funds transferred from existing offices. It is estimated, however, that the initial additional cost of establishing the office (supervisory personnel, rent, transfer of personnel from the other offices, etc.) will be $105,000. (2) An increase of $92,809 for other operations As a result of the increased workload and employment in the program field operations of the Corporation, costs of other operations such as the printing of loan forms, warehouse scale tickets, etc., and the testing and inspection of grain bins have exceeded previous estimates. These increased costs have been partially offset by an estimated decrease in audit and compliance and investigation services resulting in part from savings achieved through a consolidation of audit field offices. Inasmuch as it is estimated that obligating authority will expire on May 13, it is urgent that this request be approved as soon as possible so that work plans can be developed to handle workload for the balance of the fiscal year. TABLE 1-Fiscal year 1954 program volume estimates contained in fiscal year 1954 revised budget estimates as compared with fiscal year 1954 program volume estimates as of Jan. 27, 1954 ADMINISTRATIVE EXPENSES, COMMODITY CREDIT CORPORATION Mr. ANDERSEN. Mr. Beach, do you have a general statement on this item? Mr. BEACH. Mr. Richards has a short general statement which he would like to present. Mr. ANDERSEN. All right, Mr. Richards. Mr. RICHARDS. Mr. Chairman, during the hearings before the Congress last year on this item for administrative expenses of the Commodity Credit Corporation, for the fiscal year 1954, we pointed out that, based on the then current program volume estimates, the budget estimate of $17,100,000 would be approximately $700,000 less than required. However, we also pointed out that because many of the 1953 crops were not then planted or harvested, the program volume estimate would, of necessity, be highly tentative and that later in the year when the production of crops became better known, the Corporation would be in a position to estimate its requirements more accurately. Recent estimates, based on current production estimates and on the volume of commodities already under price support, indicate that the total volume of commodities to be handled by the Corporation during the current fiscal year will be substantially greater than previous estimates. It is now estimated that an additional $3 million will be required to meet the heavy increase in workload. MAJOR INCREASES IN PROGRAM VOLUME The major increases in program volume estimates are in connection with wheat, corn, cotton, and dairy products. In order to enable the committee to better visualize the heavy volume of workload with which the Corporation is faced, I would like to compare this year's workload on major commodities with that of the fiscal year 1951, the previous peak year for the Corporation insofar as workload and financial needs are concerned. In that year the administrative expenses were $18,637,760, or approximately 12 million less than anticipated for the current fiscal year. However, the number of man-years of personnel financed from CCC administrative expenses in the fiscal year 1951 was 3,664 or 254 more than the estimate for the fiscal year 1954. Present estimates indicate that the volume of wheat placed under loan during the fiscal year will amount to 500 million bushels or 67 percent greater than the previous estimate. As a matter of fact, the volume of wheat placed under loan through January 15 of this fiscal year was 450 million bushels-almost 2 times the volume placed under loan during all of the fiscal year 1951, the year when the administrative expenses of the Corporation were at their peak. Acquisitions through the forfeiture of wheat pledged as collateral for price. support loans are estimated to increase from the previous estimate of 121,500,000 bushels to 302,500,000 bushels, an increase of nearly 150 percent. These acquisitions totaled 53,195,386 bushels in the fiscal year 1951, approximately one-sixth of this year's estimated volume. It is anticipated that the volume of corn placed under loan will be slightly less than previous estimates. However, acquisitions are estimated to increase from 250 million bushels to 360 million bushels, an increase of 44 percent. During the fiscal year 1951, 148,458,847 bushels were acquired through the forfeiture of collateral, less than half of this year's estimated volume. During the past few months the volume of cotton placed under loan has reached record-breaking proportions. Through the week ending February 19, 6,653,641 bales had been placed under price-support loan. This amount already exceeds the total amount placed under loan during any year in the history of the Corporation. Consequently, the loan volume estimate was increased from 4,500,000 bales to 6,500,000 bales, and later to 7,250,000 bales. Only 8,075 bales of cotton were placed under price-support loans during all of the 1951 fiscal year. It is estimated that total acquisitions of dairy products will amount to 1,090 million pounds for the current fiscal year, compared with previous estimates of 410 million pounds. Acquisitions of dairy products through February 24 amounted to approximately 648,463,000 pounds this is 58 percent in excess of previous estimates for the entire year, and over 21⁄2 times the volume acquired during all of the fiscal year 1951. During the 1951 fiscal year, acquisitions of dairy products amounted to approximately 242 million pounds-less than a fourth of this year's estimated volume. COST OF PROVIDING ADEQUATE CARE OF GRAIN In addition to the heavy increase in the volume of commodities to be handled by the Corporation, there are two other items of expense not provided for in our previous estimate; namely, the cost of providing adequate care of grain, which, as a result of a serious shortage of storage space, has been stored in a fleet of 125 maritime ships, and a small cost for establishing a new commodity office in Cincinnati to handle processed commodities for the Commodity Stabilization Service. PRICE SUPPORT INVENTORIES AND LOANS OUTSTANDING COMPARED WITH FISCAL YEAR 1951 The Corporation ended the fiscal year 1951 with price-support inventories and loans outstanding valued at $1.8 billion, and loans totaling $760 million were made during the year. This year we estimate that by June 30, 1954, our price-support inventories and loans outstanding will be valued at $6 billion and that we will have made loans on commodities valued at $3.5 billion. Partially offsetting these increases, the value of commodities sold during 1951 was $2 billion compared with $1.1 billion estimated for this year. COMPARISON OF OPERATIONS IN 1951 AND 1955 As you can see, the program volume estimates for the Corporation are considerably greater than previously estimated and insofar as the major commodities are concerned, the estimates are considerably greater than the volume handled in the 1951 fiscal year. In this connection, it should be emphasized that although our present estimate for the current year indicates a need for more funds than were expended in the fiscal year 1951, we expect to handle the workload with almost 7 percent less manpower. There are two factors involved in this showing. One is increased efficiency of the CSS commodity offices, in terms of the relationship between worlkoad performed and manpower required, and some reduction in personnel other than that in the commodity offices. The other is the fact that some of the work on individual loan accounting which was performed by the commodity offices in 1951 is now being performed by county offices. |