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Mr. ELLIS. Yes; they have had some. They have had rather substantial quantities in 1956–57. A rather small quantity in the current crop year.

Rice for Korea under 480, during the current year, the quantity is 10,890 tons—it is only about 230,000 bags, roughly.

Mr. Ellis. They were offered rice at one point under 480 this year and more or less indicated at one time they wanted 50,000 tons, and then they came in finally and said they didn't want any rice.

Mr. THOMPSON. That is Korea ?
Mr. ELLIS. Yes.
Mr. Davis. Yes.

Mr. THOMPSON. What is the situation in regard to possible barter? Are there any of these nations that could make such arrangements under that 480 program?

Mr. PALMbY. I can answer that in general terms. To my knowledge we have no feelers at the present time of any requests for rice under barter, other than what we are already engaged in. To my knowledge there is not any.

I think it is a fair statement to say that generally the countries that would desire rice would find it very difficult to furnish strategic materials with which to barter.

As you know, we do have a transaction under consideration with India at the present time, but that is primarily for soft white wheat.

Mr. Jones. What is the material they have under consideration with which they want to barter, from India ?

Mr. PALMBY. Ferromanganese ore.
Mr. JONES. That was just for wheat only?
Mr. PalMBY. Wheat primarily, and possibly some grain sorghums.

Mr. Jones. Do you know why rice should not have been included in that?

Mr. Palmby. There, again, in the negotiations-
Mr. THOMPSON. If you want to call in any others, you may do so.
Mr. PALMBY. These gentlemen are from the State Department.

STATEMENT OF T. C. M. ROBINSON, BUREAU OF ECONOMICS, THE

STATE DEPARTMENT

Mr. ROBINSON. I believe that the reason that the Indians requested wheat rather than rice is they get about twice as much wheat for a given value of barter commodities, in other words, the price of wheat per ton is considerably lower than the price of rice. And in barter that is considerably more important than it is in title I.

Mr. THOMPSON. We hear an interesting story that you may be able to substantiate; it may have a bearing on this conflict or it may not. We hear that India will take wheat and trade it to some other country for rice. Is that true or not?

Mr. ROBINSON. We have heard no such rumors to that effect. The only wheat that has gone to India and that is going somewhere else is going to Nepal which is being replaced by United States wheat. We have heard of no transshipment of any wheat.

Mr. THOMPSON. Have you heard of India taking some of our longgrain rice and trading it to other producing countries for short-grain rice which they seem to like?

Mr. ROBINSON. No, we haven't heard that, either.

Mr. THOMPSON. We have heard that story. It is neither here nor there in this hearing.

Mr. GATHINGS. I have a letter, Mr. Chairman, from Mr. William B. Macomber, Jr., Assistant Secretary of the Department of State, with respect to exports to India, and I would like to ask consent to incorporate it in the record at this point.

Mr. THOMPSON. Without objection it is so ordered.

It is a brief letter and I will read it. Hon. E. C. GATHINGS,

House of Representatives. DEAR MR. GATHINGS: In response to your letter of February 20, 1958, I assure you that the United States Government has not sought and is not seeking to persuade the Indian Government to withdraw a request for rice under Publie Law 480. On the contrary, every effort has been made to comply with the Indian Government's expressed desires to arrange shipments under that law. The 3-year, title I, agreement signed August 24, 1956, for instance, included provision for the shipment of approximately 200,000 metric tons of rice which India had requested. On February 13, 1958, this agreement was amended, again in accordance with the wishes of the Indian Government, to provide for the sale of about 410,000 tons of wheat in place of the cotton authorized in the original agreement.

In recognition of Indian needs, moreover, we have assured the Government of India that new requests for foodgrains and other agricultural surpluses will be considered if additional funds are authorized by Congress for the purpose.

I trust that the foregoing will allay any fears you may have had with regarů to the treatment accorded Indian requests for surplus agricultural products. Sincerely yours,

(S) WILLIAM B. MACOMBER, Jr.,

Assistant Secretary

(For the Secretary of State). Mr. Gathings. That letter is in answer to a letter that I had written to Secretary Dulles. I thought that it would be well to make it a part of this record.

Mr. THOMPSON. Is there someone here from the Department of Agriculture who can trace for us the steps that were taken in fixing the price-support level?

Mr. PalMBY. You are thinking there, Mr. Thompson, of the statistics back of the tables that we use to get where we are at the present time.

Mr. THOMPSON. I think that is it.

Mr. Palmby. I think Mr. Satterfield can cover that. Can you cover that?

Mr. MILLER. This is for 1958, Congressman. You wanted the determination for the level of support for 1958?

Mr. GATHINGS. Yes. The chairman did.
Mr. THOMPSON. Yes.

Mr. SATTERFIELD. The Grain Supply Estimates Committee of the Department is a working committee which is composed of people within the Department who are concerned with program operations and activities on rice and other grains. The committee met on Octo ber 3 and after receiving reports on the foreign supply and demand situation came up with an estimate of exports of rice for the 1958-59 marketing year of 19 million hundredweight. The committee felt that exports for 1958–59 would not be any less than for the previous year, based upon inquiries that had been made by foreign countries for rice under the 480 program.

On October 30 the committee met and reaffirmed its previous estimate of 19 million hundredweight.

On November 12, immediately following the issuance of the November crop report, the Supply Estimates group met to consider the new production estimates in connection with our supply determinations. At that time the committee received instructions to limit its estimate of exports of rice for the 1958–59 marketing year to 16 million hundred weight.

Of course, we understood this limitation was a policy decision of the Commodity Credit Board. This is how we came up with the 16 million hundredweight estimate.

Mr. GATHINGS. Mr. Satterfield, that would give us what acreage in 1959 provided there is no freeze enacted ?

Mr. SATTERFIELD. In 1959 ?
Mr. GATHINGS. Yes.

Mr. SATTERFIELD. If the estimate August 1, 1958, carryover of 1714 million hundredweight stands up and the 1959 crop is as large as currently estimated, we will have a total supply of around 61.5 million hundredweight. By deducting this total supply our domestic requirements of 271,2 million hundredweight and estimated exports of 16 million we would have a carryover on August 1, 1959, of 17 million hundredweight, which is only slightly less than a year earlier.

Mr. GATHINGS. Then what would the figure on acreage be?

Mr. SATTERFIELD. If we assume that these figures will stand up, we would have to export in 1959–60 approximately 33 million hundredweight to sustain our present acreage.

Mr. GATHINGS. And the estimate is for about 16?

Mr. SATTERFIELD. Yes. If we do not export any more than 16 million, it will result in a 37-percent reduction in the present acreage level.

Mr. GATHINGS. Thirty-seven percent under the acreage at the present time--1958 ?

Mr. SATTERFIELD. For 1959.
Mr. GATHINGS. And a 37-percent cutback in 1959 ?
Mr. THOMPSON. That is a brutal cutback.

Mr. SATTERFIELD. Yes, in view of the fact that we have already had approximately a 40 percent reduction from our base acreage of rice we started out with in 1955.

Mr. GATHINGS. Let me ask you what these various promotion schemes in this country have done with regard to increasing consumption of rice.

Mr. SATTERFIELD. There has been some slight increase. It is hardly noticeable, but it is gradually moving up.

Mr. GATHINGS. With the increased population that we have in this country, it is estimated at some 173 million people, or 172 million plus, we have fallen behind on per capita consumption, have we not?

Mr. SATTERFIELD. We had a period in the early 50's in which there was a decline in the per capita consumption of rice, but during the last 2 or 3 years, due to efforts of the various promotional associations, we have been able to increase it slightly. It dropped down to a low of about 5.3 per capita. The current estimate for this past year, I believe, was 5.9 pounds per capita.

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right? Whereas, in the Farmers' Home Administration you screen the applicant and all of his relationships to determine whether he is the proper kind of a credit risk at all.

Mr. GATHINGS. May I answer that: We have just returned, several of the members of this committee, from the great State of California; we went close to the district of the gentleman who has just propounded that question. And the situation in California is quite different from some of the other sections that are so hard hit; the situation there in California was such that they can make it rain whenever it needs to rain out there in that irrigated West. And they have a situation where they can make money. If they fail on one crop, why they will make money on something else. If they fail on vegetables, they will make money on alfalfa. If they fail on that, they will make money on citrus.

If they fail on citrus they will make it on cotton and on rice.

I do hope that the gentleman from California will bear in mind we do have problems that you do not have. We have a situation that this bill will correct. And we have this recession due largely to the fact that the farmer has lost the income which he has heretofore been enjoying. And if we could pump this new money into these communities it would be a shot in the arm.

There will be some losses, of course, but the American people pay their debts.

Mr. Hagen. That particular category of farmer that you are talking about is a very poor risk. He does not deal at arm's length in the boginning

Mr. GATHINGS. Any type of grower that is hard hit, whether he has been renting or owns land, if he is a farmer, he will come under the provisions of this bill. He is part of the community. We want to keep him there.

Mr. IIAGEN. To really help him would be to provide him with a loan to make a crop in 1958 ?

Mr. GATHINGS. That has been done. These gentlemen here are doing that, and doing a good job in that respect.

Mr. Hagen. His landlord should be willing to enter into some agreement, or standby agreement. His only possibility of getting any money out of that fellow on the average, I would assume, is to be kept in the farming business.

Mr. GATHINGS. He is in the farming business.
Mr. HAGEN. This is a creditor's bill rather than a debtor's bill.

Mr. GATHINGS. The gentleman cannot appreciate the fact what that situation is. You do not have that in your part of the country. You do not get great stacks of mail, saying, “Why don't we get some help?" That is what we are trying to do. We would like for you to join with us and help us, like we are trying to help your folks in bringing this badly needed credit to these people. I hope you will join with us.

I would like to talk with you after this committee meeting is over about it.

Mr. Jones. I would like to reply to Mr. Hagen. One thing we are trying to do here is that we know it is an economic problem, but frankly, we realize that it is a hazardous loan. There is no question about it.

As was pointed out here by several of the witnesses, we think that if the Government will come in here and make this loan which they have at least an opportunity, and I think a good opportunity to collect, because ordinarily we have pretty fair crops there, and they will pay off, but if we do not let them have this money, many of these people will be on relief and the Government will actually be spending more money on that individual than they will possibly spend through this program here. At the same time the fellow will have the satisfaction and will retain some of his pride to think that he is making an effort to pay this debt himself and not be forced on relief. Most of these people, the large majority of them in fact, a very small

percentage of them only are in the category of where they are trying to be dishonest to evade the debts—they want to pay them. And this just offers an opportunity to give some extended credit where they can pay it. That is all we are trying to do here.

Mr. Hagen. The best opportunity to give them would be to enable them to produce a crop and pay their debts out of that crop:

Mr. Jones. That is true. We are, also, trying to maintain the economy in the area.

Mr. Hagen. Here you are paying his debts first. On the average, I do not say "always" but I am sure that in many instances this fellow, the landlord could drop him tomorrow.

Mr. Jones. The landlords themselves are in this.

Mr. HAGEN. I think we ought to pick out that class. The Government could very well be holding the bag on this thing through the action of the landlord.

Mr. JONES. What, do you think the Government is holding in the bag on all of this relief! They are emptying the bag. They are not just holding the bag. We are trying to keep something in the bag.

Mr. Hagen. That is true. In that instance it goes to the ultimate beneficiary.

Mr. Jones. It is going to them. This money would go to a beneficiary who would be helped, in helping maintain the economy in that area because some of these small businesses need help. Eventually they will be out of business anyway, but so long as he wants to try to make his own living through a business no matter how small it is, I think we ought to try to help him do it.

Mr. GATHINGS. These gentlemen from the Department are very busy men. They have more applications that have poured into the Washington office for the emergency loans than they have ever had before. That is about right; isn't it?

Mr. SMITH. Yes, sir: it is. Mr. GATHINGS. We could talk in executive session here among ourselves, and if you want to make an amendment to this bill you can do it when they go into executive session.

Mr. Suitu. The question was raised here this morning about the provision on page 3 of Congressman Jones' bill, that is H. R. 10954, with respect to the requirement for personal liabilities of stockholders in the event loans are made to corporations. If paragraph subsection (5) is eliminated from the bill, it would seem to be appropriate to insert on page 2, after "stockmen” in line 2, the words “except corporations,” because if the Government did make loans to farming corporations, we have found from experience that it is much better to require the stockholders of the corporation to become personally liable on the notes. That is the purpose of the paragraph on page 3.

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