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 As I understand, these are current figures?

the year.

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. GATHINGS. 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 1?

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. SATTERFIELD. No.

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. 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 Public 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 regard 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 October 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 hundredweight.

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 174 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 272 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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