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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. Paluby. 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. 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

tain parts of India. What part with respect to geography are those sections where they are accustomed to eating rice and rice only as against wheat !

Mr. Davis. I think all Indians, so far as I know, are rice eaters. Perhaps, the heaviest rice-consuming sections are in the southern part of the country.

Mr. GATHINGS. The southern part? Mr. Davis. Yes. Mr. GATHINGS. That is the more populous part of India ? Mr. Davis. Yes, that is right. Mr. GATHINGS. As we are going now it looks like in the current fiscal year which would conclude August 1, it is estimated that milled and rough rice, there is some 10,384,000 hundredweight being disposed of within the current year, which is a little under a year ago. That is about right, isn't it?

Mr. THOMPSON. Less than that, 95 and 82 as against 22 and nearly 2.

Mr. GATHINGS. We have gone along here now some 7 months of the year. As I understand, these are current figures?

Mr. PALMBY. These are current CCC-owned rice figures; that is right. Mr. SIKES CCC. Mr. THOMPSON. In CCC hands. There isn't any other. Mr. PALMBY. Yes.

Mr. Ellis. As of today that should be true. The takeover for the 1957 crop was officially on Monday, the 17th.

Mr. GATHIXGs. Let us have the figures on that, Mr. Ellis, with the takeover now, what would it come to? Something over 20 or under 20 million hundredweight? After the takeover of 1957?

Mr. Ellis. We do not have any official report on what the takeover will be. We have had some estimates by the trade and by our field offices, and apparently it will be somewhere around 12 million hundredweight of rough rice to be taken over from the 1957 crop.

Mr. GATHINGS. Then how much is already in CCC hands?

Mr. Ellis. I don't have a current actual inventory, but based on our estimates of what we will do this year, we would probably have left at the end of the current crop year roughly 3 million hundredweight of rough rice or equivalent, from the 1956 crop. So that that would give us a total surplus, total carryover, I mean, of CCC rice at the end of the year of approximately 15 million hundredweight.

Mr. GATHINGS. What countries are now negotiating for some of this 15 million hundredweight of surplus stocks?

Mr. Ellis. I don't believe you could say that there are any negotiations for that rice at the present time. But there are negotiations still going on. Let me see, there would be about a third of the CCC rice which we expected to export this year under Public Law 480 has not been actually finalized by the issuance of purchase authorization. That is not part of the 15 million I mentioned.

Mr. GATHINGS. That is separate.
Mr. Ellis. That will be taken care of.

Mr. THOMPSON. You are assuming that that will be finalized before
August 19
Mr. Ellis. Yes.

Mr. GATHINGS. What do you estimate would be the carryover on August 1, 1959, Mr. Ellis?

Mr. Ellis. Well, the total carryover, we did make an estimate a while back would be, I believe, 17,250,000 hundredweight rough equivalent. Mr. SATTERFIELD. That is August 1, 1958. Mr. PALMBY. He wants 1959. Mr. GATHINGS. For 1959. Mr. SATTERFIELD. Seventeen million. Mr. GATHINGS. You figure 17 million? Mr. SATTERFIELD. Yes.

Mr. GATHINGS. That has not changed from the figures that you had given me earlier ?

Mr. Ellis. No; there would not be any reason to change that.
Mr. GATHINGS. That is all.

Mr. THOMPSON. This situation in India interests me very much. Apparently, there is a demand in India that would absorb all of our surplus. Apparently, there is an effort being made to give them some wheat which they do not want under any circumstances. Or at least, which they are very reluctant to take.

Mr. PALMBY. I think I disagree with that statement that they do not want it. I did make the statement that on wheat their first preference has been soft wheat. As I understand it, the Indians want that for various reasons. But they are buying hard wheat. And as far as we can determine without any reluctance at all.

Mr. GAITHINGS. That has not changed from the figures that you had

So I think it is a fair statement, too, that they would take more cereals than they are presently getting, but there is this overall limiation of how it can be supplied; in other words, there is always a limit on the allocation that we have. I would like to just make a comment or two again on our total supply percentage of some crops. The supply percentages for price support purposes as of normal on wheat was 144.5 percent, as of July 1, 1957, and on corn again, it was 126.3 percent, as of October 1, 1957, on cotton it was 127 percent, and on rice it was 117 percent. These are percentages of normal.

We must take this situation into consideration in allocating commodities for programing to FAS.

Mr. THOMPSON. It is very difficult to accept that in the rice industry when it will have such a disastrous effect on the whole industry next year. As I told you a little while ago, there is no inclination on the part of this committee to criticize anybody who is here. We are only trying to establish the fact. We, naturally, want some kind of relief so that the Department won't use a set of artificial surplus figures, to keep down the acreage on rice, and keep down the support price.

The fact still remains that the world at large needs all the rice that we can produce next year. That is without any question.

Mr. PALMBY. Again, I would like to make the statement, Mr. Thompson, in defense of what we have made available for programing, certainly, the same can be said of some classes of wheat, what you said here of the almost unlimited demand, provided the funds are there. It does become one of fitting the commodities into this limitation.

Mr. THOMPSON. What is the situation in Korea ? Have they had some rice under Public Law 480 ?

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. Palmly. 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.



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.

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