TABLE II.-Dispositions of CCC-owned rice in fiscal years 1957 and 1958 by

Mr. THOMPSON. Is there any part of this on which you would like to make comments?

Mr. PALMBY. I think that the second page of this statement I just read pretty much covers what is in these tables in detail.

The tables, particularly table I, spell out supplies, utilization, ending stocks, and, also, the exports.

And table II shows in detail the amount moving under the various Government programs, namely, title I, title II, section 416, barter, and in turn section 402.

Mr. THOMPSON. What is the world situation; the world demand for rice at the moment? Is there a shortage anywhere?

Mr. PALMBY. Mr. Davis, that is a question more for the Foreign Agricultural Service. Do you care to answer that?

Mr. DAVIS. I do not have exact data on the world situation. There are countries, I am sure, where rice consumption would increase if the rice were available, but that, of course, is à condition which prevails all times in some areas.

Mr. THOMPSON. Do we have rice available for export now?
Mr. DAVIS. Yes.

Mr. THOMPSON. We seem to have a conflicting opinion as to the amount of rice that has been available in the past year. The figures that I have which I think came from testimony of Mr. Butz before the Senate Committee on Finance on Public Law 480, last July or August reflected foreign requirements of 241⁄2 million hundredweight. Do you recall those figures? Is that about correct?

Mr. DAVIS. I do not know.

Mr. PALMBY. Mr. Thompson, I think at this point we could be most helpful to you if we would review in detail what we have done as regards selling CCC stocks. We have a representative of the Sales Manager of the C. S. S. here and, also, a gentleman from the Grain

Division. And I think they could give us some figures at this time which would answer your question.

Mr. THOMPSON. I think that is, probably, a good way to proceed. What we are trying to find out is just how much rice we are going to need next year.

Mr. PALMBY. Yes, I understand.

Mr. THOMPSON. If we continue to maintain the surplus and do not take advantage of the foreign markets that are available then we have created a fictitious situation which will be felt when we set the support price.

Mr. PALMBY. You are talking of overall export programs specifically?

Mr. THOMPSON. Overall; I think that any additional exports of any considerable quantity would have to come under 480, would they not?

Mr. PALMBY. Yes, I would gather that is right, Mr. Thompson. That is the reason why I would like at this point to call on the Sales Manager and the CSS people to give in detail the amounts that are moved for dollars and under various programs.

Mr. THOMPSON. Fine, let us do that.

Mr. PALMBY. This will be Mr. Sikes of the CSS.

Mr. SIKES. I have some tables here which show the CCC disposition by programs of the rice during the fiscal years 1957-58.

Under the export category and under the category of dollar sales, the dispositions for 1956-57 are shown as 1 million hundredweight. One million hundredweights of milled rice. And 76,000 hundredweight of your rough.

Estimated for 1957-58 are 1 million hundredweight milled rice and 500,000 hundredweight of rough.

Under the barter program for 1956-57, 736,000 hundredweight of milled rice, and none are reflected in 1957-58.

Under Public Law 480, title I, for the 1956-57 year, 15,552,000 hundredweight; 1957-58 title I, 6,175,000 hundredweight of milled, 252,000 rough rice.

Under title II, Public Law 480 program, 558,000 hundredweight for 1956-57, and 225,000 hundredweight, 1957-58.

Under your section 402 of ICA program we have none reflected in 1956-57; 625,000 hundredweight, 1957-58.

Donations, section 416, 2,915,000, 1956-57 of milled rice and 650,000 milled rice for 1957-58.

That is the picture of the export disposition.

And the domestic disposition are as follows:

Mr. PALMBY. We have some duplicate tables here.

Mr. THOMPSON. That would be very helpful.

Mr. PALMBY. That is the first table that he has been reviewing. Mr. SIKES. The domestic disposition, dollar sales of milled rice for 1956-57, total 803,000 hundredweight of milled and 1,885,000 hundredweight of rough rice, for 1956-57.

In 1957-58, 200,000 hundredweight of milled and 100,000 rough. Donations, section 32, 508,000 hundredweight, 1956-57, and donation domestic, under section 416, 324,000 hundredweight of milled 1956-57, and 650,000 1957-58.

That is the total domestic of 1.6 million milled rice, 1.8 million rough in 1956-57, and 850,000 and 100,000, respectively, for 1957-58. For a total of both your domestic and your exports of 22,397,000, 1956-57 milled, and 1,961,000 rough. For 1957-58, 9,525,000 milled and 852,000 rough.

Mr. GATHINGS. Mr. Chairman, those figures would indicate that it is absolutely necessary that in order to stay in the business of producing rice that rice in large quantities must of necessity be exported. Do you agree with that?

Mr. PALMBY. I think there is no doubt about that.

Mr. GATHINGS. What part of the total production of rice is consumed in this country?

Mr. ELLIS. I think, approximately, half is used domestically of the production.

Mr. THOMPSON. Normally?

Mr. ELLIS. Normally, yes.

Mr. SATTERFIELD. I think that is true with respect to the current production.

Mr. ELLIS. Yes, about half; yes, that is correct.

Mr. GATHINGS. Of course, that is under the reduced acreage that we now have?

Mr. SATTERFIELD. Yes.

Mr. THOMPSON. The figures under Public Law 480, title I, indicate that we exported 15,552,000 hundredweight in 1956-57. The estimate for the current year is 6,175,000 hundredweight.

I would like to know why that is. It seems to be an awful discrepancy.

Mr. PALMBY. Mr. Thompson, I would like to review with just a minute the relative size of our CCC inventories with respect to wheat, corn, and cotton.

In that situation, we have looked upon these programs generally under title I as being an outlet for surplus commodities. And this allocation for disposal, needless to tell you, has caused us a great deal of concern.

We have a situation where the corn inventory has gone up each year since 1951.

Our wheat inventory has gone up constantly until this year there is a slight reduction, as you know.

And we, also, had a very big cotton inventory.

So as we look at the various commodities that we have and, needless to say further, there is great demand for rice and, also, of soft white wheat, and we have found that by making limitations of soft white wheat that the countries made allocations under title I have willingly bought hard wheat even though their first preference has been soft wheat.

I mention that because we have much the same situation as regards soft white wheat in the Pacific Northwest of this country.

There again, the recipients of many title I programs would prefer soft white wheat. For many months we have restricted it (the reason being that we have much larger inventories of hard wheat, hard red winter wheat and spring wheat). And they have bought hard wheat even though they would still prefer the soft wheat.

I mention that as a predicament that we find ourselves in of trying to alleviate the huge inventories we have of a class or of a particular

grain or fiber commodity. So as we look at what we in CSS should make available to the Foreign Agricultural Service for programing under title I, this, in our opinion, looking at it from the size of the overall inventory, was a reasonable figure to make available for programing under title I, keeping in mind all of the time that we have had to make some very real decisions as regards classes of wheat, and the amount that would be made available to the Foreign Agricultural Service as regards cotton.

Mr. THOMPSON. The relationship to wheat I can see, but the relationship to cotton is a bit obscure. I realize that it is all so many dollars. Here is a commodity which has a surplus ready for export. Here is a market that wants that commodity. It seems to me to be very unfair to penalize that industry as, certainly, will be the case if we do not do something about it. We penalize them by saying, "We are going to maintain an arbitrary surplus or rather an artificial surplus. And what is going to happen to you, is your own worry.'

It is the worry of this committee, because we are going to see an absolutely unjustified reduction in rice increase next year. We are going to see a lowering of the price supports which would not be the case if we went ahead and filled the market needs. Do I make myself clear?

Mr. PALMBY. Yes, you do.

Mr. THOMPSON. I realize that this comes from the highest policymaking level. I am not blaming you.

Mr. PALMBY. Here again, if I could take another approach on this: In trying to analyze what we should make available to the FAS of our stocks, we run into the same thing, if I may make this side statement again, on soft white wheat for instance, where there is no question at all but what those countries that are getting title I would prefer that class of wheat over hard wheat. We think with a limited amount of money available we must use that money to its best advantage, so that it is spread around on all commodities.

I will have to say as regards soft wheat again; "there is almost an unlimited demand." I think it would be foolish to say that there isn't a great demand for rice under title I, there is. But with a limited. overall that can be spent on this program we think that it is fair to make an amount of all surplus commodities available for programing, provided those commodities are acceptable to the receiving country. Mr. GATHINGS. Mr. Palmby, what is the date of the making up of this estimate sheet here, this tabulation? Does that run through the month of February or January, or what?

Mr. PALMBY. What sheet do you have there?

Mr. GATHINGS. The sheet that we are now working on-the table, disposition of CCC-owned rice, table No. 2, in fiscal year 1957-58 by programs?

Mr. PALMBY. March 10. Is that the final date?

Mr. SIKES. On your estimated

Mr. PALMBY. For 1957-58?

Mr. GATHINGS. Yes.

Mr. SIKES. That is the current estimate.

Mr. PALMBY. Through the marketing year, through July?

Mr. SIKES. Yes.

Mr. GATHINGS. We are running behind now in disposition of CCC stocks, that is compared with a year ago.

Mr. PALMBY. Compared with a year ago, yes.

Mr. GATHINGS. Just about how far are we running behind at this moment as compared to a year ago?

Mr. PALMBY. Your question is how much has been lifted or programed as of now?

Mr. GATHINGS. Yes. In comparison with a year ago. We seem to be running a little behind on the disposition both for export and domestic use, isn't that right?

Mr. PALMBY. Can you give the current situation?

Mr. GATHINGS. You might have the answer to that, if so, we would like to have it.

Mr. ELLIS. We have definitely in process of delivery or shipment at the present time about 225,000 metric tons of milled rice.

Mr. GATHINGS. Let us get that down to hundredweights, Mr. Ellis. Let us see what 225,000 metric tons is.

Mr. ELLIS. That is approximately 5 million.

Mr. GATHINGS. About 5 million?

Mr. ELLIS. Five million hundredweight of milled rice. That rice has gone and is going to Pakistan, Philippines, Korea, Indonesia, Bolivia, Ryukyu Islands, Peru, Ceylon.

Mr. GATHINGS. What about Japan-any of that going to Japan? Mr. ELLIS. Nothing to Japan. And nothing planned for Japan at this time.

Mr. GATHINGS. Nothing planned for Japan, although they do desire to buy this rice in Japan?

Mr. ELLIS. Well, rice could go to Japan, of course, through commercial channels. There is no 480 program for Japan.

Mr. GATHINGS. What about India-how much of that would you estimate would be going to India?

Mr. ELLIS. None.

Mr. GATHINGS. None at all?

Mr. ELLIS. There is at the present time no program for India under 480 for rice. They did have a program, as you know, but it was all shipped this past year, the entire quantity of rice of the program was shipped in the past year to India.

Mr. GATHINGS. Negotiations are going on at this time with India, are they?

Mr. ELLIS. I can't answer that.

Mr. GATHINGS. Who could answer that?

Mr. DAVIS. No negotiations for a title I program are in progress at the moment with India. A title I program was signed in August of 1956, which was a 3-year program, that did include rice, but the rice has all been shipped.

Mr. GATHINGS. And all of the current year anticipated shipments have gone forward?

Mr. DAVIS. They have taken all of the rice, that is correct.

Mr. GATHINGS. It will be time now to enter into another agreement if we are going to sell any rice to India.

Mr. DAVIS. There is a request in and I assume that it will be acted upon soon after the new authorization becomes available. That is, for India.

Mr. GATHINGS. The information I get is that these people have been accustomed to eating rice and they like rice, particularly in cer