FOREIGN ASSISTANCE PROGRAMS AND SPECIAL EXPORT PROGRAMS-Continued General and special funds—Continued PUBLIC LAW 480-Continued 1. Sale of surplus agricultural commodities for foreign currencies (title I).-Under this title, the United States accepts foreign currency in payment for surplus agricultural commodities and their products. The main purpose is to increase sales to countries unable to expand commercial purchases because of a lack of dollar exchange. As the economies of countries improve, a gradual shift from title I purchases to dollar purchases occurs. Sales are made only to "friendly nations"-as defined in section 107 of Public Law 480, 83d Congress. Foreign currencies received are deposited to the account of the U.S. Treasury and can be used only as stated in section 104. The dollar value of such deposits through June 30, 1964, amounted to $8.1 billion. Public Law 88-638 established an advisory committee to review the status and use of foreign currencies and recommend to the President as to how to assure maximum benefits to the United States from the use of foreign currencies and returns from sales made under title I. The committee consists of the Secretary of Agriculture, the Director of the Bureau of the Budget, the Administrator of the Agency for International Development, the chairman and ranking minority member of the House Committee on Agriculture and of the Senate Committee on Agriculture and Forestry. Certain proposals for use of currencies or use of principal or interest repayments (except pursuant to appropriations) are to be submitted to those two committees. Uses fall into two groups-those of benefit to the foreign country, mainly loans and grants to promote economic development, and to support common defense, and those of benefit to the United States. The latter includes, among others: Expenses of the U.S. Government abroad; agricultural market development; educational exchange; construction of military family housing; sales of foreign currency to U.S. citizens and American tourists. Foreign currencies for U.S. uses are subject to the appropriation process. Sales agreements specify particular uses, and in those entered into after December 31, 1964, the amount subject to the appropriation process will increase, with certain possible exceptions, from the previous minimum of 10%. Such uses reduce dollar outflow and the deficit in the balance of payments of the United States. The Corporation is reimbursed for the dollar value of currencies so used. In 1964 and 1965, such receipts have been applied to reduce prior years' unrecovered costs due the Commodity Credit Corporation. Dollar repayments of foreign currency loans have also been applied to repay the Corporation. It is anticipated that prior years' costs will have been fully paid during 1965. Thereafter, such proceeds will be applied against current costs. The appropriation estimate reflects these as a reduction in the appropriation needed. Section 509 of Public Law 86-500, approved June 8, 1960 (7 U.S.C. 1704b note) provides that at least 75% of the total cost of foreign military housing projects (unless otherwise specified) shall be paid from foreign currencies acquired under title I. The Department of Defense reimburses the Corporation for the foreign currencies used. Pursuant to section 2681 (b) of title 10 U.S.C. as amended, the estimates reflect payment to the Corporation of $6 million each year for amounts due under Public Law 480 and the French housing barter transaction discussed under Commodity Credit Corporation. It is estimated that $4 million will be applied against Public Law 480 amounts due with a balance of $52.7 million remaining unpaid as of June 30, 1966. Sales agreements have been signed with 49 countries. They cover sales of commodities at an export market value of over $8.9 billion. Major items are wheat, cotton, and fats and oils-74% of the market value total. Agreements signed under title I prior to January 1, 1965, provide that the United States will finance in dollars the total U.S.-flag ocean transportation costs, and that the United States will receive foreign currencies in an amount equivalent to the foreign-flag rates. For shipments required to be made in U.S.-flag vessels under agreements signed after December 31, 1964, the foreign countries must finance in dollars the freight costs equivalent to the foreignflag rate. Agreements may be entered into under title I through December 31, 1966, which will call for appropriations to reimburse Commodity Credit Corporation in a total amount not in excess of $2.7 billion plus the unused portion of prior years' authorizations for title I and dollar reimbursements from foreign currency sales. Agreements may not be made during either of the last 2 calendar years of this period which would call for an appropriation in excess of $2.5 billion. The following table reflects the composition of appropriations for 1964, 1965 and 1966 (in thousands of dollars): 7,123 -7,123 1965 (estimate) 1966 (estimate) Cumulative totals.... Deduct sales of currencies, loan repayments, and receipts from Defense De Appropriations through June 30, 1966. Unreimbursed costs. June 30, 1966, representing amounts due from 52,700 2. Commodities disposed of for emergency famine relief to friendly peoples (title II).-Under this title, surplus stocks of the Commodity Credit Corporation are transferred, on a grant basis, to friendly nations or friendly peoples to meet famine or other urgent or emergency relief needs. Grants are also made under authority of this title to promote economic and community development in underdeveloped countries. The Agency for International Development is responsible for administering the title II programs. Public Law 88-638 amends section 203 to provide that $7.5 million each year may be spent under this title to buy foreign currencies accruing under title I to meet costs (other than personnel and administrative) of cooperating sponsors, distributing agencies, and recipient agencies, such as those for essential tools and equipment. This is to assure that commodities furnished under titles II and III are used to carry out more effectively the purposes for which these commodities are furnished and to promote community and other self-help activities which would alleviate the causes of the need for such aid. In the past 10 years, transfer authorizations were issued for about $1,446 million worth of food under this title including ocean freight costs. Of this total, $989 million (69%) was for the relief of victims of floods, earthquakes, droughts and plagues, and for refugees, $165 million (11%) for child feeding, and $292 million (20%) for economic development. Also, about $280 million was authorized for ocean freight costs on commodities donated under section 416 of the Agricultural Act of 1949, as amended, making total authorizations of $1,725 million for the 10 years this program has been in effect. Section 203 provides for appropriations to cover costs of these programs. These include commodity costs, ocean freight on shipments under this title and ocean freight on shipments under section 416. Also authorized for payment from such appropriations are charges for general average contributions arising out of ocean transport of commodities furnished under the above two laws as well as section 308 of Public Law 480 and section 9 of the act of September 6, 1958. Through December 31, 1964, a total of $2,300 million of appropriations were authorized. Since 1958, these II, as amended by Public Law 88-638, provides that prowere at the rate of $300 million per calendar year. Title Since 1958, these grams of assistance shall not be undertaken under title II during any calendar year beginning January 1, 1965, and ending December 31, 1966, which call for appropriations 1965 funds not applied to program. Cumulative totals... Program expenditures Interest Total 86,623 273 86,896 91,277 2,308 93,585 120,430 4,461 124,891 116,001 5,445 121,446 95,511 2,417 97.928 93,161 196,109 241,939 241,939 3. Long-term supply contracts (title IV).-This title, which was added in 1959, and amended in 1962, provides long-term credit and supply contracts. The major obfor sales of U.S. surplus agricultural commodities under jective is to stimulate and increase sales for dollars through credit thereby helping the development of foreign markets and the economies of friendly nations. Generally, agreements providing for the delivery of surplus agricultural commodities over periods of up to 10 years may be entered into with the governments of friendly of such nations, or with United States and foreign private nations, including financial institutions acting on behalf delivered in each calendar year, with interest, are made trade entities. Payments in U.S. dollars for commodities over periods of up to 20 years, except in certain cases in charged from the date of last delivery of commodities which payment must be made within 5 years. Interest is under the agreement in each calendar year. Rates of interest may not be set at less than the minimum rate development loans. required by the Foreign Assistance Act for dollar repayable Total agreements made since the inception to June 30, 1964, amounted to $355.7 million cost value including ocean freight. Major commodities were wheat, cotton, rice, oils and oilseeds. Repayments for the period 1965 (estimate). Cumulative totals.. Deduct recoveries from foreign governments.. Program expenditures Interest Total 28.955 17 28.972 79,228 1,133 80,361 62,920 2,207 65,127 212,164 2,800 214,964 226,385 226,385 609,652 6,157 615,809 26.394 589,415 -589,415 Unreimbursed costs, June 30, 1966, financed by CCC borrowing au- Appropriations are provided to cover costs of this Amounts due from foreign governments June 30, 1966, to be applied The following reflects the composition of the appropriations for 1964, 1965, and 1966 (in thousands of dollars): Under existing legislation, 1965.—A supplemental appropriation of $506.4 million is proposed to repay the Commodity Credit Corporation for (1) additional estimated costs in 1965 under title I, Sale of surplus agricultural commodities for foreign currencies, $273 million; and (2) additional current year costs and prior year unrecovered costs under title IV, long-term supply contracts, $233.4 million. Projections of the demands on the Cor215,500 poration's $14.5 billion borrowing power indicate that it will be exhausted during January 1965. This appropriation would help the Corporation to finance its mandatory operations during the remainder of 1965. 215,500 215,500 SPECIAL EXPORT PROGRAMS In addition to the Foreign assistance programs described, the Commodity Credit Corporation conducts other special export programs under specific legislative authority. These are: International Wheat Agreement 215,500 (7 U.S.C. 1641-1642); and Bartered materials for supplemental stockpile (7 U.S.C. 1856). The International Wheat Agreement Act of 1949, as amended, authorizes the President, acting through the Corporation, to make available or cause to be made available wheat and flour at such prices as are necessary to exercise the rights, obtain the benefits, and fulfill the obligations of the United States under the International Wheat Agreement which terminates July 31, 1965. The maximum and minimum prices in the current agreement are $2.02% and $1.62%1⁄2 per bushel, respectively, for the basic grade of wheat, No. 1, Manitoba Northern, at Fort William/Port Arthur, Canada. The Corporation causes wheat and flour to be made available under the agreement through payments in kind to exporters of wheat and cash payments to exporters of flour. Such payments cover the difference between the export price and the cost of wheat to exporters. If the domestic market price of wheat falls below the agreement price, exporters will make commensurate refunds of payments previously received. Appropriations are authorized to cover costs of this program. The following reflects the composition of the appropriations for 1964, 1965, and 1966 (in thousands of dollars): Expenses of shipments: Commodity Credit Corporation stocks.. 1964 actual 1965 estimate 1966 estimate Under existing legislation, 1965.—A supplemental appropriation of $54,956 thousand is proposed to repay the Commodity Credit Corporation for unreimbursed prior years' costs. Projections of the demands on the Corporation's $14.5 billion borrowing power indicate that it will be exhausted during January 1965. This appropriation would help the Corporation to finance its mandatory operations during the remainder of 1965. Private stocks and operating costs... 10,069 4.393 23,600 3,944 Relation of obligations to expenditures: 71 Total obligations (affecting expenditures). 90 Expenditures.. 82,860 92,860 52,500 82,860 92,860 52,500 Materials transferred to supplemental stockpile... CORPORATIONS The following corporations and agencies are hereby authorized to make such expenditures, within the limits of funds and borrowing authority available to each such corporation or agency and in accord with law, and to make such contracts and commitments without regard to fiscal year limitations as provided by section 104 of the Government Corporation Control Act, as amended, as may be necessary in carrying out the programs set forth in the budget for the current fiscal year for such corporation or agency, except as hereinafter provided: FEDERAL CROP INSURANCE CORPORATION General and special funds: ADMINISTRATIVE AND OPERATING EXPENSES For administrative and operating expenses, [$6,942,000] $8,478,000. [For an additional amount for "Administrative and operating expenses", $250,000.] (7 U.S.C. 1501-1519; 31 U.S.C. 841, 846852, 866-868c, 869; 78 Stat. 933; Department of Agriculture and Related Agencies Appropriation Act, 1965; Supplemental Appropriation Act, 1965.) Program and Financing (in thousands of dollars) 1 Includes capital outlay as follows: June 30, 1964, $41 thousand; 1965, $41 thousand: 1966, $56 thousand. Includes year end balances of unpaid undelivered orders as follows: 1963, $42 thousand; 1964, $56 thousand; 1965, $56 thousand; 1966. $56 thousand. This appropriation finances a major portion of the administrative and operating expenses of the Corporation. The budget for insurance operations financed from capital funds appears below. An increase is proposed for 1966 to finance administrative costs related to the planned expansion in the insurance program. Object Classification (in thousands of dollars) 99.0 Total obligations. New obligational authority....... FEDERAL CROP INSURANCE CORPORATION FUND Not to exceed $3,638,000 of administrative and operating expenses may be paid from premium income: Provided, That in the event the Federal Crop Insurance Corporation Fund is insufficient to meet indemnity payments and other charges against such Fund, such additional amounts as may be necessary may be borrowed from the Commodity Credit Corporation under such terms and conditions as the Secretary may prescribe, but repayment of such amount shall include interest at a rate not less than the cost of money to the Commodity (7 U.S.C. 1516(a); Credit Corporation for a comparable period. 78 Stat. 933; Department of Agriculture and Related Agencies Appropriation Act, 1965.) |