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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. GATHINGA,

House of Representatives. DEAR MR. Gatungs: 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 statisties 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 Vear, based upon inquiries that had been made by foreign countries for rive under the +50 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 171/4 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 2712 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 as 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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Mr. GATHINGS. If that continues to hold, it will take quite a while

Mr. SATTERFIELD. It will take quite a while.

Mr. GATHINGS. To consume enough rice to keep these farmers going, and keep the wells running. With the situation as it exists now, with the Department of Agriculture asking that the soil-bank acreage reserve be eliminated for 1959, why it will be a very desperate situation that the farmer will face, will it not?

Mr. SATTERFIELD. Right.

Mr. GATHINGS. As I understood you, Judge Satterfield, that was in October that this meeting was held of the officials in the Department studying this question ?

Mr. SATTERFIELD. During the crop-growing season this committee meets each month in which a production estimate is made to consider our supply situation. I believe that October was the first time that the committee attempted to project its estimate of rice exports to the 1958–59 marketing year. We had to make such projection in connection with the determination of acreage allotments and marketing quotas for the 1958 crop. In making such estimates we have to be guided by what is likely to develop in the way of a program for disposition through export channels. Evidently, the Commodity Credit Board decided this for us by its allocation of funds for the export of rice under the 480 program. Consequently, there was nothing we could do but revise our estimate of exports downward.

Mr. GATHINGS. Has there been a change since October!

Mr. SATTERFIELD. Not that I know of insofar as demand is concerned. I think the demand for rice under the 480 program is as great today as it was in October or even in September. However, I am not too sure of that since I do not keep track of all the requests that come in. The 480 program is handled primarily by the people in FAS, but I believe Mr. Ellis, who is on the sales staff of our Division, works with those people on rice and can probably give you a better answer than I.

Mr. GATHINGS. Mr. Satterfield, if we get 480 extended and have sufficient funds available for that program, would that go to help us or would it just be a static situation? I wondered whether or not it is essential that we get the 480 program extended so that we can move more rice into export.

Mr. SATTERFIELD. That is a little difficult question for me to answer. I am not one of the policymakers. I think it will depend on policy as to how they will distribute the funds between commodities.

Mr. PalmBY. I would like to make a comment on that, if I may, at this point.

I think it is self-evident without title I, we, certainly, would be in much more shape "stockwise" than we are, and further, that as regards the basic commodities rice has received far more as regards the acreage of that commodity in this country, far more benefits from title I than any other commodity.

Mr. GATHINGS. And the figures that were presented here by you today would indicate that 480 is one of the principal outlets for rice!

Mr. PALMBY. Yes, sir.

Mr. THOMPSON. We didn't quite reach the price-suport basis, Judge. We only got through the preliminaries.

Mr. McLAIN. All we say to you is, in all honesty, that we think that would be a major step, if that could be done.

Mr. THOMPSON. Maybe it can be; maybe it can't.
As I say—and I cannot speak for them-

Mr. MČLAIN. I have talked to people I respect very much in the industry, and you gentlemen have, too, that they are willing to accept that right now.

Mr. THOMPSON. Legislation is a give-and-take proposition. Where you have it at one end of the avenue, somebody who says it will be this and nothing else, it is awfully hard to get 435 men to agree to go along with any such thing as that.

Mr. McLain. We just haven't said that in this instance. I tried to give you a little indication.

Mr. THOMPSON. Reading from the President's veto message, it says: When the Secretary of Agriculture has been given these authorities to adjust price support, acreage allotments, he will set the 1959 allotment at levels at least as high as those in this year for cotton and rice_these allotments will be substantially above the levels which would otherwise prevail.

He goes on to say that when necessary, a new authorization is provided in keeping with my “legislative recommendations,” the special export program for our surplus crops will be enlarged.

Opportunities exist to export both for dollars and, through special programs, large quantities of our stable commodities.

I have been trying to interpret that ever since I first read it. I am not sure that I know yet exactly what it means.

In some ways it is very clear, and in some ways there is a veiled threat in there-or bribe I don't know which—but, certainly, I interpret it as one or the other, at times.

I would surely like to know exactly what he had in mind.

Mr. McLain. I think it is very simple to figure out what he had in mind.

Mr. THOMPSON. Giving exactly the program he says, and then he will give you a living acreage.

Mr. MČLAIN. No; he recognizes, as the Secretary of Agriculture recognizes—and certainly I recognize—that legislation isn't always exactly as any one individual wants it. We recognize that.

But I think there ought to be some steps taken in the direction of what he has asked for. I think the rice industry is willing to accept much of what he has asked for. The fact is, I am sure they are.

Mr. SORKIN. I think the reference to increased exports refers to the fact that the President recommended a billion and a half for Public Law 480 compared with a billion available this year. There is a 50 percent increase requested in those funds.

Mr. THOMPSON. Mr. Krueger, I have neglected you this morning. Mr. Krueger is one of the best consumers of rice we have and he has been extremely interested and a usefuly member of this committee.

Mr. KRUEGER. Thank you, Mr. Chairman.

Not knowing much about the rice industry or rice growing, I might have some very simple questions. They may sound simple to you, but I would like to clear up the situation for myself.

You say you have a carryover at the present time of 19.1 million hundredweight?

Mr. McLAIN. Yes.
Mr. KRUEGER. Is that a normal or abnormal carryover?

Mr. McLAIN. It has varied. As of course, during the emergencies we have had in the past, many times that carryover has been way down and, of course, we have had intervals when it has been way above that. We have the figures here. It is down considerably from the high.

Mr. KRUEGER. I wanted to ask this question: Is 19.1 million the normal carryover at the present time?

Do you consider it as being such !
Mr. McLain. You go ahead and read it, Martin, for a period back.

Mr. SORKIN. To supplement what Mr. McLain says, in 1953–54, it was a million and a half hundredweight. Then it jumped to seven and a half. Then it jumped to 26.7. Then it jumped to 34.6 and then dropped to 20.1.

We anticipate it will be down to 17.3 at the end of the current marketing year.

Mr. KRUEGER. What makes the variation ?
Mr. McLAIN. World conditions.
Mr. SORKIN. Primarily world exports.

Mr. McLain. World conditions. When you are at war and those countries that normally produce rice are out of business, that is one thing. When you have them wanting to get back into the rice exportring business then it is another thing.

So it is very much tied in to world conditions.

Mr. KRUEGER. How about the rice crop raised in this country! Does that have much of an influence on it?

Mr. McLain. The acreage has fluctuated some.

Mr. SATTERFIELD. Mr. McLain, I might give Mr. Krueger a little background on this which may clear it up some.

Prior to World War II, our acreage, I think, reached the highest point of about a million six where the allotment is to.

Mr. McLAIN. Earlier than that, it was way below that.

Mr. SATTERFIELD. From 1.2 million to 1.6 million for a period of years. During the war and subsequent to the war, it increased up to about 4.2. Prior to the war, we carried a normal carryover of about two and a half million, normal conditions, but with the acreage changes increased, it is a little difficult to say what a normal carryover is because of your very varied marketing conditions along with increased acreage.

Mr. Sorkin. I think the basic element here, Mr. Krueger, is that the domestic consumption doesn't vary much.

Mr. KRUEGER. What is the domestic consumption average per capita?

Mr. SORKIN. It runs around-
Mr. McLAIN. Per capita ?
Mr. KRUEGER. I would like to know. I like rice.
Mr. McLain. So do I.
Mr. DEAN. About 6 pounds.
Mr. McLain. You are above average, I am sure of that.
Mr. Sorkin. I am, too.

Mr. THOMPSON. So is everybody else who eats it at all. That is the funny thing about it. Once they become familiar with rice, they eat way over their per capita. The ones who bring the per capita down are the ones who have never learned to eat it.

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